Enviromental advocates urge Calif. lawmakers to act on Western grid
Calling the California ISO's transformation into a regional grid operator for the Western U.S. "the most important opportunity before us to achieve California's renewable energy, climate and clean energy ambition," a director of the Natural Resources Defense Council's energy program made an impassioned plea on April 5 for state lawmakers to "issue an invitation" for the ISO "to be joined by anyone who wishes, anywhere in the West, to move in the direction of a transition toward a fully integrated Western grid, with all the associated reliability, economic and pollution reduction benefits."
Shine comes off Canada's oil sands as prices, policy push multinationals' exit
Canada's reputation as a safe harbor for energy investments has taken a hit as international companies pull up stakes in favor of friendlier oil and gas industry regimes and quicker returns on investments. In the last month, Royal Dutch Shell plc and Conoco Inc. shed most of their upstream oil sands operations in the country in a pair of deals that valued their assets at just over C$30 billion.
Analysts skeptical on bull case for met coal following Australia cyclone
Analysts with Morgan Stanley are warning investors feeling bullish on metallurgical coal they may want to take a step back. In an April 4 note, analysts Tom Price and Brendan Fitzpatrick said that even though Cyclone Debbie "just made a mess of Queensland, Australia," there are reasons to be a little unsure the weather event striking a region that sources half of the global met coal trade will lead to major gains in coal stocks. Morgan Stanley notes the range of estimates placing 13 million tonnes to 19 million tonnes of metallurgical coal — or about 4% to 6% of global supply — lost to trade is enough to move prices upward.
* The White House on April 5 issued additional guidance on how federal agencies should implement President Donald Trump's Jan. 30 executive order directing all nonindependent federal agencies to repeal two existing federal rules for every new regulation they promulgate.
* The Vermont Public Service Board approved TransCanada Corp.'s sale of its TransCanada Hydro NorthEast Inc. subsidiary to an ArcLight Capital Partners LLC affiliate. TransCanada Hydro owns hydroelectric facilities that have an aggregate nameplate capacity in excess of 530 MW.
* California Attorney General Xavier Becerra filed a Freedom of Information Act request with the U.S. EPA for documents related to EPA Administrator Scott Pruitt's compliance with federal ethics law. "Mr. Pruitt's numerous conflicts of interest merit close examination now that he has taken a direct role in initiating reviews of numerous EPA regulations he sought to undo through litigation in his previous role," Becerra said in a statement.
* U.S. Sen. Tom Carper, D-Del., ranking member of the Senate Environment and Public Works Committee, and 22 of his colleagues sent a letter to EPA Administrator Scott Pruitt, urging him to provide more details on how the agency plans to uphold legal obligations to protect the public from greenhouse gas pollutants. "Rescinding the Clean Power Plan will put generations of Americans at grave health and economic risk. We seek further information concerning the process and schedule the EPA plans to use to carry out the Executive Order's (EO's) directives," the letter said.
* The Ohio Power Siting Board told Fred. Olsen Renewables USA LLC and Icebreaker Windpower Inc. that it cannot begin a review of the companies' application to build a 20.7-MW offshore offshore wind farm due to insufficient information. The board is particularly asking for memoranda of understanding on monitoring studies for project impact on fisheries, other aquatic resources, and birds and bats.
* SunPower Corp. has started construction of an 8.79-MW solar project at Toyota Motor North America's headquarters in Plano, Texas, according to a news release. Toyota, which will own the renewable energy credits associated with the facility, is funding the project through a power purchase agreement with SunPower.
* Facebook Inc. announced that it will build a new data center near Papillion, Neb., which will be powered with renewable energy, using a new tariff created by Omaha Public Power District.
* The New York State Department of Environmental Conservation denied permits for National Fuel Gas Co.'s proposed Northern Access Project. "What is perhaps the most troubling aspect of this decision is that the NYS DEC waited literally until the 11th hour to issue this denial, even though we had detailed discussions with NYS DEC staff over a 34-month period and undertook detailed engineering and environmental studies at the agency's request, to support the stream-crossing techniques that now form the basis of their denial," said National Fuel Gas President and CEO Ronald Tanski in a statement.
* The PennEast natural gas pipeline project proposed by PennEast Pipeline Co. LLC cleared a final review by FERC environmental staff. The staff recommended that the commission, if it decides to authorize the project, attach 61 mitigation measures to the certificate order to help reduce environmental impacts.
* Republican Sens. Lisa Murkowski and Dan Sullivan introduced a bill to restart Outer Continental Shelf development in Alaska. The bill will provide for lease sales in the Arctic OCS and ensure Alaska receives a fair share of revenues from oil and gas development off its coast, according to a news release.
* Tellurian Inc. co-founder Charif Souki is offering Japanese buyers five-year deals through the proposed Driftwood LNG export facility at a fixed $8/MMBtu, a split from traditional 20-year contracts with Henry Hub-linked pricing, as off-takers push for shorter agreements.
* Minnesota Gov. Mark Dayton plans to veto a bill that would allow Enbridge Energy Partners LP's planned Line 3 pipeline replacement project to proceed without the approval of the state Public Utilities Commission, The Associated Press reports.
* The U.S. Bankruptcy Court for the District of Delaware confirmed the prepackaged Chapter 11 plan of reorganization of oil and gas producer Bonanza Creek Energy Inc., according to a news release. The plan equitizes more than $867 million of unsecured debt, eliminates more than $50 million in annual cash interest and completes a new capital raise of $200 million through a rights offering.
* CenterPoint Energy Inc. has reached a settlement with parties to its pending natural gas rate case in Texas, according to a news release. The settlement allows CenterPoint Energy to raise its natural gas distribution base rate revenues for Houston-area customers by about $16.5 million and sets new parameters to be used in the company's future gas reliability infrastructure program filings, including a 9.6% return on equity on a 55.15% equity capital structure. The settlement is subject to the approval of the Railroad Commission of Texas.
* After a contentious confirmation process, the U.S. Senate voted April 7 to appoint federal appeals court Judge Neil Gorsuch to the U.S. Supreme Court. Here are some key takeaways on Gorsuch's judicial history and philosophy and what his presence as an associate justice on the high court could mean for the energy sector.
* Metallurgical coal prices are spiking, but FBR & Co. Analyst Lucas Pipes warned that the upswing is likely short-lived. Pipes encouraged coal investors to stay long on met coal names in an April 7 note, but warned there is likely to be a second-half price decline.
* Natural Resource Partners LP and NRP Finance Corp. filed a registration statement on Form S-4 in connection with their offer to exchange up to $345,638,000 of registered 10.5% senior notes due 2022 for a like amount of 10.5% unregistered senior notes due 2022. Wilmington Trust NA will act as the exchange agent for the exchange offer.
* Archer Daniels Midland Co. has started operations at its Illinois Industrial carbon capture and storage project, which is capable of storing 1.1 million tons of carbon annually. The project is currently permitted to operate for five years and has the potential to store up to 5.5 million tons of CO2.
* Cloud Peak Energy Inc. CEO Colin Marshall urged President Donald Trump to embrace the issue of climate change in a letter outlining the company's legislative priorities in support of lower-emissions technology and adjusting to a new energy landscape.
* Coal and natural gas gave West Virginia a boost in revenue collections in March, according to the state tax agency. The state's General Revenue Fund collection for March was $331.5 million, exceeding estimates by nearly $26.3 million.
* Secondary market prices for California carbon allowances have vaulted to record high levels following the recent court ruling in favor of the carbon allowance auction mechanism. As of April 6, over-the-counter broker data showed the benchmark December 2017 vintage 2017 California carbon allowance futures contract was marked in a bid-and-offer range of $14.22/tonne to $14.50/tonne, rising 60 cents on the day and soaring 92 cents from the beginning of March.
* After settling 7.0 cents lower at $3.261/MMBtu ahead of the weekend, NYMEX May natural gas futures remained deflated in overnight trading leading up to the Monday, April 10, open, as current and projected weather conditions signal demand erosion that should allow for ongoing storage building. At 7:08 a.m. ET (1108 GMT) the front-month contract was 0.5 cent lower at $3.256/MMBtu, while trading a range from $3.228/MMBtu to $3.255/MMBtu.
* Power dailies could open the new workweek varied to lower Monday, April 10, as jumbled demand outlooks for Tuesday combine with ongoing weakness at the natural gas futures complex. After losing 7.0 cents to end the week on Friday, April 7, NYMEX May natural gas futures were last trading 1.3 cents lower at $3.248/MMBtu, which should help pressure spot gas prices to start the new workweek.
New from RRA
* Appalachian Power Co. and the Virginia State Corporation Commission staff filed a settlement on April 5, in APCO's pending energy efficiency rider, or EE-RAC, proceeding (Case PUE-2016-00089). The settlement calls for a $4.7 million rate increase under the rider.
* Republican Sens. John Eklund and Frank LaRose introduced Senate Bill 128 on April 5, which calls for Ohio-jurisdictional electric distribution utilities that have an eligible nuclear generation plant in their service territory to participate in a "zero-emissions nuclear resource program."
* Utilities outperformed major market averages for the week that ended midday Friday. The DJ Utility Average was up 0.8%, compared to losses of 0.2% for the S&P 500 and 0.5% for the Nasdaq. The DJIA finished the week unchanged.
"If you are worried about Donald Trump's FERC, and you probably have some reason to be, [leading] with a target that has California written on its back is the best way I know of to invite unwelcome inference," said Ralph Cavanagh of the Natural Resources Defense Council.
The day ahead
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