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Energy Update: May 8, 2020

In the States

CA: The California Independent Petroleum Association (CIPA), a trade organization representing approximately 500 oil and natural gas producers, is calling on Governor Gavin Newsom to relax his oversight efforts of the fossil fuel industry. In his initial 2020-21 state budget, Governor Newsom proposed increasing staff at the California Geologic Energy Management Division (CalGEM) and several new regulations for testing oil wells. CIPA is requesting that Governor Newsom scale back the staff increase and delay or change 11 of the oil well testing requirements. "What is at stake is much greater than the viability of local production, tens of thousands of well-paid employees, hundreds of service and supply companies, lost state and local tax revenues, but also a destabilizing of California's energy supply," CIPA chief executive officer Rock Zierman said in a letter to state regulators. Conversely, environmental groups in California, including the Last Chance Alliance, urged CalGEM to move forward with Governor Newsom’s plan. “The simple truth is that CalGEM is currently dangerously understaffed," read the Last Chance Alliance’s letter to the Governor. While Governor Newsom’s budget plan is expected to change as a result of the COVID-19 pandemic, it is unclear how any changes might impact his proposal to increase oversight of fossil fuels. California Oil Producers Fighting Newsom Proposal for Stronger Industry OversightKQED via News Break


LA: Governor John Bel Edwards directed the Louisiana Department of Revenue to delay collecting severance taxes in an effort to offer economic relief to Louisiana’s oil and gas industry. No severance taxes for any industry will be collected before June 25, according to the Governor’s order. U.S. Representative Clay Higgins, who had initially asked for the severance tax suspension, said he believed the move would help preserve key oil and gas jobs. Members of the oil and gas industry cheered the Governor’s announcement. “The decision to delay severance tax payments and provide temporary relief to the industry is a welcome first step,” said Louisiana Oil and Gas Association President Gifford Briggs. Oil and gas stakeholders are hoping for additional help and Congressman Higgins and some other members of the Louisiana congressional delegation have asked the Trump administration to consider  royalty relief and the suspension of government-sponsored coastal drilling lawsuits. Coronavirus: Gov. John Bel Edwards delays collection of severance tax to help oil and gasUSA Today


PA: Governor Tom Wolf rejected a request from more than 50 Republican and Democratic lawmakers in the state legislature to withdraw Pennsylvania from the Regional Greenhouse Gas Initiative (RGGI). In their request, the lawmakers asked Governor Wolf to rescind his executive order directing the Commonwealth’s Environmental Quality Board to propose RGGI-compliant carbon dioxide restrictions. These new restrictions, the lawmakers argued, would lead to a drastic reduction of coal-fired power generation in Pennsylvania and a “significant” electricity rate increase for consumers without showing a similarly significant decrease in carbon dioxide emissions. The lawmakers also argued that rescinding the executive order would end debate over the RGGI, a major point of contention among legislators, and thus free up more time for the legislature to focus on recovery from the personal and economic impacts of the COVID-19 pandemic. In response, Governor Wolf’s press secretary Lyndsay Kensinger stated “the administration is not considering suspending the implementation of RGGI in Pennsylvania.” Governor rejects withdrawal from RGGIThe Indiana Gazette


WA: A group of environmental, labor, consumer, and social activist organizations in Washington State are requesting that Governor Jay Inslee further extend his moratorium preventing utility shutoffs. Governor Inslee’s initial extension prevented utility shutoffs until May 4, but the coalition of organizations argue that the moratorium should be continued “as long as needed”. In a letter to Governor Inslee, the groups noted that hundreds of thousands of low-income Washington households are depending on the moratorium to continue having access to essential services, and encouraged the Governor to introduce a package of policies “that expands low-income energy assistance funds, increases eligibility thresholds, reduces barriers to access, and encourages utilities to adopt more flexible credit and collection practices.” The Governor’s office has not yet responded to the latest request. Activist groups to Washington governor: Extend moratorium on service cutoffs by utilitiesTimes Union



In response to a letter sent by Iowa Senator Chuck Grassley and five other U.S. Senators, the Trump administration committed to changing the rules governing renewable energy tax credits affecting wind farm owners. Although the administration did not specify exactly how the rules would change, the Trump administration is expected to extend the amount of time wind farmers are able to claim credits for wind projects that started construction in 2016 or 2017. The extra time is critically important for many wind farmers who have seen their ongoing projects stalled by supply chain interruptions as a result of the COVID-19 pandemic. “We look forward to further detail on this critical issue, and extend our appreciation to the Treasury Department for this important step, which will help the renewable sector continue as a key economic driver through this downturn,” American Council on Renewable Energy President Greg Wetstone said in a statement. Trump administration agrees to help wind farms with subsidy tweakReuters

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