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Former Markwest CEO blasts Marathon/MPLX $10B deal; Coal demand to remain flat

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Former Markwest CEO blasts Marathon/MPLX $10B deal; Coal demand to remain flat

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Utilities secure top priorities in final tax proposal from Congress

Investor-owned electric utilities secured their main priorities for tax reform in a final compromise package from Congress, but the U.S. power sector could still face hurdles.

Marathon's $10B exchange plan for MPLX draws fire from former MarkWest chief

Marathon Petroleum Corp.'s plan to exchange its general partner economic interests in MPLX LP for approximately $10.1 billion in stock has drawn the ire of the former CEO of MarkWest Energy Partners LP, which merged into MPLX in 2015.

Global coal demand will remain flat through 2022, report finds

The global demand for coal is projected to remain nearly flat through 2022, marking a decade of stagnation, according to the International Energy Agency's annual coal market report.

Power

* The Trump administration dropped climate change from the list of national security threats contained in a new report, reversing what had been a key component of its predecessor's argument for reducing carbon emissions, promoting clean energy and other environmental regulations.

* The U.S. Environmental Protection Agency issued a notice that it will solicit public input on its possible next steps to limit greenhouse gases from existing power plants in relation to its proposed repeal of the Clean Power Plan.

* An analysis from grid operator Midcontinent ISO found that new gas generation in Michigan and expanded transmission with Canada are not economic, given the limited export capability between the regions.

* Dukes Scott is stepping down as executive director of the South Carolina Office of Regulatory Staff on Jan. 15, 2018, in the wake of the abandonment of two new 1,117-MW reactors at the V.C. Summer nuclear power plant outside Columbia, S.C., the Charlotte Business Journal reported.

* The Colorado Springs City Council decided not to speed up the planned 2035 retirement of the Martin Drake coal-fired power plant but will accelerate work on transmission projects to realize a "distributed power" scenario, The Denver Post reported.

* Hawaii regulators approved a 2.5% interim rate increase for Hawaiian Electric Co. Inc., less than what the utility had agreed to in a settlement with the state Division of Consumer Advocacy last month. "After going six years without a base rate increase, while investing in work to move Hawaii to reach 100% renewable energy in full support of our state's recently adopted policy, we're extremely disappointed with this outcome," said Alan Oshima, president and CEO of Hawaiian Electric.

* Macquarie Capital (USA) Inc. lowered its investment opinion on PPL Corp. to "underperform" from "neutral" on a perceived further downside to the stock.

* Exelon Corp. and its six subsidiaries expect to record after-tax impairment charges totaling $100 million, after their respective managements found that a portion of the total transmission-related income tax regulatory assets cannot be recovered through rates.

* U.S House Appropriations Committee Chairman Rodney Frelinghuysen introduced an $81 billion emergency disaster aid package for recent hurricanes, wildfires in California and related agricultural losses.

* Indiana Utility Regulatory Commission Chairman Jim Atterholt is retiring from public service Jan. 12, 2018. Atterholt was appointed chairman Feb. 9.

Natural gas/Oil

* Tellurian Inc. plans to develop two natural gas pipelines in addition to its previously announced Driftwood pipeline, as the LNG developer seeks to link major gas production regions with an expected ramp-up in demand in southwestern Louisiana.

* U.S. Sen. Tom Carper, D-Del., wants the current audit of EPA Administrator Scott Pruitt's travels to include the recent trip to Morocco, where he promoted U.S. liquefied natural gas exports. In a letter to the EPA inspector general, Carper called for a review of the purpose of Pruitt's travels to determine whether his activities during the trips "are in line with agency's mission 'to protect human health and the environment.'"

* A study claiming that U.S. LNG exports could have large impacts on greenhouse gas emissions warned that future liquefaction and export terminals could become something akin to today's coal plants, "where entrenched interests fight meaningful action to reduce climate emissions."

* Sempra LNG & Midstream's Cameron LNG reached a settlement agreement with its contractor, CCJV, related to the construction of the planned LNG export project on the Louisiana coast. CCJV is a joint venture between an affiliate of Chicago Bridge & Iron Co. NV and Chiyoda International Corp.

* U.S. refiners are likely to continue their strategy of returning tax savings to shareholders if the tax code overhaul passes, The Wall Street Journal reported, citing analysts and "people familiar with the companies' plans."

* Inter Pipeline Ltd. received approval from its board of directors to build a C$3.5 billion integrated propane dehydrogenation and polypropylene plant, called the Heartland Petrochemical Complex, in Strathcona County, Alberta.

* The Canadian government announced more than C$80 million in new science funding for new partnerships, improved knowledge and new technologies that will mitigate oil spills.

* Petrolia Energy Corp., a U.S.-based oil exploration and production company, hired Newbridge Securities Corp. as a strategic corporate advisor. Newbridge will assist Petrolia on various initiatives, including an uplisting to a senior national exchange and potential capital raises and M&A transactions.

Coal

* Peabody Energy Corp. amended its credit agreement to increase the principal amount of its incremental revolving facility by $80 million to $350 million, according to a company filing.

* Coal prices in the Powder River Basin are low, and the recent sale of Contura Energy Inc.'s two mines in the region is unlikely to change that, according to analysts.

* BHP Billiton Group made a preliminary decision to leave the World Coal Association and is considering an exit from the U.S. Chamber of Commerce over differences in climate and energy policy.

Commodities

* Following significant power plant retirement announcements this fall, the Electric Reliability Council of Texas now expects tighter power market conditions through 2022.

* In the two years since Congress voted to end the crude oil export ban, U.S. shipments abroad have surprised and disrupted international markets. Navigating the world from Italy and the U.K. to China and Singapore, U.S. crude cargoes have skyrocketed with no signs of slowing down or tapering off.

* Power dailies could advance Tuesday, Dec. 19, as generally stronger demand expected at midweek combines with recent gains at the natural gas futures complex.

* After ending the week's opening session up 13.3 cents at $2.745/MMBtu, NYMEX January 2018 natural gas futures turned negative overnight ahead of the Tuesday, Dec. 19, open, as the market considers the impact of extended cold weather on demand and the rate of weekly storage draws.

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Quoted

"I bet you that OPEC sees the lifting of the export ban ... as a very helpful component of their strategy," said Bob McNally, president of energy consulting company The Rapidan Group, on how U.S. crude exports benefit OPEC.

The day ahead

* Early morning futures indicators pointed to a higher opening for the U.S. equity markets. To view more SNL equity market indexes, click here. To view more SNL Energy commodities prices, click here.

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