Trump sworn in as 45th president, kicking off shift in US energy policy
Donald Trump was inaugurated as the 45th U.S. president on Jan. 20, ushering in a new era of national energy policy that will likely include fewer regulations, especially with regard to climate change, and a more pro-development stance on fossil fuel production from federal lands and waters.
On a rainy day in Washington, D.C., Trump took the oath of office, promising to faithfully execute the Office of President of the United States to the best of his ability. In a speech that ran just under 20 minutes, Trump described the shuttering of factories and struggling American families, promising to return the balance of power back to the people. The broad speech touched briefly on energy and scientific research in both health and space.
Trump has promised to eliminate "job-killing restrictions" on energy production in his first 100 days in office, although he has yet to say which policies he will target first. The White House website was updated with an overview of his America First Energy Plan rolled out during the campaign. The plan calls for rolling back "burdensome" regulations, embracing shale oil and gas production, tapping more of the country's energy reserves, and reviving the U.S. coal industry.
Last-minute tax ruling on MLPs may not survive changing of the guard
A last-minute tax ruling on what activities and income can be sheltered inside a master limited partnership is generally favorable to oil and natural gas interests, analysts said, but many experts suspect the new rule will not survive the change of White House administrations.
The U.S. Treasury and the IRS released their final rule on MLP income late Jan. 19 for publication in the Federal Register on Jan. 24, with President Donald Trump in office. Past presidents have routinely put a hold on pending regulations and orders of their predecessors.
"Obama, Bush, [and] Clinton all put their predecessors' pending rules on ice; why would Trump be different?" Height Securities LLC analyst Peter Cohn told his clients Jan. 20 hours before Trump was sworn in. "Even if Trump's staff fails to issue such a memo [withdrawing publication of all pending rules], ongoing tax reform efforts on Capitol Hill as well as other legislative vehicles such as appropriations bill 'policy riders' could block the rule from taking effect."
PHMSA regulatory takeover will mean quick changes for gas storage operators
On Jan. 18, interstate natural gas storage facilities will for the first time come under rules made by the federal pipeline safety regulator. That change will mean operators will have to change the way they do business quickly.
The U.S. Pipeline and Hazardous Materials Safety Administration has had the ability to regulate gas storage facilities since 1968 but "had some pretty good reasons" to avoid doing so until a congressional mandate in 2016 made it a requirement, energy attorney James Curry said at an S&P Global Platts Gas Storage Outlook Conference in Houston.
A number of successful legal challenges to the validity of individual states regulating gas storage facilities with interstate connections, the Babst Calland Clements and Zomnir PC partner said, "forced [PHMSA's] hand." "It was fairly clear that states could not regulate interstate storage," Curry added.
Even if reopened, Aliso Canyon lacks the gas to maintain reliability, study says
Almost a year after a major gas leak was plugged, California regulators said the region's gas supplies may not recover in time to prevent shortages even if the Aliso Canyon underground gas storage field reopens soon.
Southern California Gas Co.'s Aliso Canyon needs to have a 29.7-Bcf gas inventory to maintain reliability, the California Public Utilities Commission said in a report released Jan. 17. Given that the field has just under 15 Bcf and only 34 of its 114 wells have passed the requisite tests as of Jan. 17, the CPUC said that inventory level will not be possible for much — if any — of the winter.
PHMSA codifies industry standards for pipeline inspections, updates other rules
The federal pipeline safety regulator on Jan. 17 announced that it adopted industry standards into regulation for certain kinds of inspections and laid out timelines for reporting incidents.
In a final rule slated for publication in the Federal Register on Jan. 23, the U.S. Pipeline and Hazardous Materials Safety Administration incorporated by reference consensus standards for in-line inspection tools used to assess the internal conditions of pipelines. PHMSA said the American Petroleum Institute standards are more comprehensive than the requirements on the books and codifying them will improve safety through consistency in training, processes and software for in-line inspections.
NARUC seeks open communication with Trump team on energy policy issues
The National Association of Regulatory Utility Commissioners is seeking to open lines of communication with the new Trump administration, specifically on issues of pipeline safety, Yucca Mountain and re-balancing state authority on regulatory issues.
NARUC President Robert Powelson wrote in a Jan. 19 letter to the Trump team that its members look forward to a renewed relationship with the U.S. Department of Transportation's Pipeline and Hazardous Materials Safety Administration, which is charged with ensuring the safety of the nation's pipeline infrastructure. Powelson, a member of the Pennsylvania Public Utility Commission, stressed the need to boost state funding to ensure adequate pipeline safety inspections.
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