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Trump kicks off shift in US energy policy; Kentucky coal miner launches IPO

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Trump kicks off shift in US energy policy; Kentucky coal miner launches IPO

Top News

Trump sworn in as 45th president, kicking off shift in US energy policy

Donald Trump was inaugurated as the 45th U.S. president 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.

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.

Former Peabody executive accuses company of 'gross breach' of duties to shareholders

Former Peabody Energy Corp. executive Fred Palmer is objecting to the company's plan of reorganization. Palmer, once Peabody's senior vice president of government relations, filed a shareholder objection to the plan and a related disclosure statement in a detailed filing Jan. 20.

Power

* White House Chief of Staff Reince Priebus directed heads of executive departments and agencies to stop sending new regulation and withdraw pending ones to the Office of the Federal Register until a Trump appointee reviews and approves them, The Washington Post reports.

* The U.S. Navy does not plan to shut down a controversial wind farm in North Carolina because of concerns it would interfere with a nearby radar facility. The clarification by the Navy comes after a group of state legislators sent a letter to President Donald Trump's nominee for U.S. Department of Homeland Security, Gen. John Kelly.

* The U.S. Bureau of Land Management granted rights-of-way to Idaho Power Co. and Rocky Mountain Power to build the final segments of the Gateway West transmission line project on BLM-managed public lands in Idaho, according to a news release. The 500-kV line is intended to deliver up to 1,500 MW of transmission capacity in southern Wyoming and southern Idaho.

* To get California's greenhouse gas emissions to 40% below 1990 levels by 2030, the California Air Resources Board is proposing to continue the state's cap-and-trade program and take a new path toward cutting emissions at refineries. CARB's proposal, released Jan. 20, touts steps that California has already taken to reduce emissions and notes that future efforts will require contributions from all sectors of the economy.

* FirstEnergy Corp. is seeking the approval of the U.S. Nuclear Regulatory Commission to transfer Toledo Edison Co. and Ohio Edison Co.'s Beaver Valley unit 2 license to FirstEnergy Nuclear Generation LLC. Following NRC approval, FirstEnergy Nuclear Generation plans to acquire the 18.26% leased interest of Toledo Edison and the 21.66% interest of Ohio Edison in the nuclear facility, according to the Federal Register.

* The Maryland Public Service Commission awarded the remaining $7 million of a customer investment fund to Baltimore City's energy programs, The Baltimore Sun reports. Exelon Corp. contributed $113.5 million to create the fund as one of the conditions imposed by state PSC when it approved the company's acquisition of Constellation Energy Group Inc. in 2012.

* Puget Sound Energy Inc. may retire two Colstrip coal-fired units earlier than 2022 due to a planned exit by co-owner Talen Energy Corp. in 2018 and a proposed wholesale energy tax in Montana, The Associated Press reports.

* The Long Island Power Authority will decide Wednesday whether it will purchase the output of Deepwater Wind's proposed $1 billion offshore wind project in federal waters. "We're now at a point where developers can build projects at prices where utilities are willing buyers, and to me that is a very big deal," LIPA CEO Thomas Falcone told The New York Times.

* A study from the University of Chicago's Energy Policy Institute found that regions using a market approach to buy and trade electricity save about $3 billion a year. "The study is an additional piece of evidence that, while not perfect, markets perform well relative to the alternative," author Steve Cicala said in a statement.

* Massachusetts Reps. Sean Garballey and Marjorie Decker filed a bill that would transition the state to 100% renewable energy by 2050, the AP reports.

* The U.S. EPA is proposing a rule that will require Nebraska Public Power District to limit emissions at its 1,365-MW Gerald Gentleman coal-fired plant in Lincoln County, Neb., by installing scrubber technology within five years, the Omaha World-Herald reports.

Natural gas/midstream

* The Standing Rock Sioux tribe passed a resolution calling on Dakota Access Pipeline protesters to disperse. "Because we worked together, the Federal Government will prepare an Environmental Impact Statement. Moving forward, our ultimate objective is best served by our elected officials, navigating strategically through the administrative and legal processes," the tribe said in a Facebook post.

* Targa Resources Corp. subsidiary Targa Resources Partners LP agreed to acquire Delaware and Midland Basin assets of Outrigger Delaware Operating LLC, Outrigger Southern Delaware Operating LLC and Outrigger Midland Operating LLC for $565 million in cash, according to a news release. The deal will increase Targa's gross processing capacity to about 2 Bcf/d across the Permian Basin by the end of this year and is expected to be accretive to the company's distributable cash flow in 2017 and beyond.

* Southern California Gas Co. is asking customers to reduce natural gas use to help lower the possibility of natural gas and electricity shortages, according to a news release. The SoCalGas advisory, which was created in response to the moratorium on injection operations at Aliso Canyon, will be in effect starting at 7 a.m. today and will remain in effect until further notice.

* The Lax Kw'alaams Band in British Columbia will hold meetings to discuss a potential site change for the Pacific NorthWest LNG project that would move docking facilities from Lelu Island to nearby Ridley Island. According to the Lax Kw'alaams' website, members can attend three "community engagement sessions" from Jan. 28 to Jan. 30.

* Schlumberger Ltd. lost $204 million in the fourth quarter of 2016, but executives see a rebounding E&P sector leading to brighter days for the company and the oilfield services industry. Paal Kibsgaard, chairman and CEO of the oilfield services giant, said he expects an increased demand for his company's services in 2017, led by activity in the U.S., and in one Texas play in particular.

* The University of Denver's board of trustees has deferred a decision until this week on a student-led petition to drop fossil fuel investments, The Denver Post reports. The petition is not welcomed by the oil and gas industry, including the Independent Petroleum Association of America.

* The Chesapeake Energy Corp. board reinstated the payment of quarterly preferred stock dividends. Holders of record on Feb. 1 for the 4.5%, 5%, 5.75% and 5.75% series A convertible preferred stock will receive four quarterly payments of dividends in arrears on Feb. 15, according to a news release.

* FERC gave Texas Eastern Transmission LP the green light to begin constructing three natural gas projects providing 622,000 Dth/d of supply to Midwest and Southeastern markets from the Appalachian Basin. A Jan. 19 FERC letter informed the company that it can start building part of the Access South, Adair Southwest and Lebanon Extension projects.

Coal

* Ramaco Resources Inc. commenced an IPO of 6 million common shares at between $12 and $15 each. A selling stockholder, who is offering 2.2 million shares under the IPO, is also granting underwriters a 30-day option to purchase up to an additional 900,000 Ramaco shares. The Kentucky-based mining operation was rumored to go public in 2017 and has been busy buying assets from companies like Alpha Natural Resources Inc. and investing in infrastructure in Appalachia.

* The U.S. Office of Surface Mining Reclamation and Enforcement is seeking additional public input on the expansion of a GCC Energy LLC mine in Colorado. GCC applied to modify its existing lease on the Colorado mine several years ago when it sought to add an extra 952 acres. GCC Energy is a subsidiary of Mexico-based Grupo Cementos de Chihuahua.

* Pacific American Coal Ltd. has tapped the former co-head of Glencore International AG's worldwide coal division to lead Elko, its flagship hard coking coal project in British Columbia. Mark Lochtenberg will assume the role of managing director Feb. 1, according to a news release.

* China's coal production inched up 1% over the previous month to 311 million tonnes in December 2016, representing its highest level in a year, Reuters reported Jan. 20, citing the National Bureau of Statistics.

Commodities

* Following expansions of propane export capacity on the Gulf Coast and a new terminal in the Northeast U.S., AltaGas Ltd. moved to bolster options on the West Coast. The expansion could lift propane prices to boost the incentive for storage.

* The CFTC named J. Christopher Giancarlo as acting chairman, effective Jan. 20. Giancarlo joined the CFTC on June 16, 2014, according to a news release. Giancarlo succeeded Timothy Massad, who resigned as chairman effective Jan. 20.

* After settling 16.4 cents lower at $3.204/MMBtu ahead of the weekend, February gas futures moved between gains and losses in overnight trading leading up to the Monday, Jan. 23, open, as receding cold weather and expanding warmth in forecasts spell declining demand and a possible pullback in the rate of weekly storage draws.

* Power dailies could be tethered to the downside in the week’s opening session Monday, Jan. 23, amid the combined pressure of expectations for predominantly declining demand for Tuesday and ongoing weakness at the natural gas futures arena.

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New from RRA

* NiSource Inc. was the group's best performer for the week through midday Friday. On Jan. 12, parties involved with the pending rate case for subsidiary Columbia Gas of Virginia Inc. reached a settlement calling for a net $24.5 million rate increase.

* Oversupplies of oil and natural gas are persistent even with recent OPEC and non-OPEC concessions. Considerable stored oil supplies also exist around the globe, and economic activity in Asia and Europe remains lethargic. Given these and additional factors, we expect that 2017 will be a year of rebuilding and midstream moderation with indications of recovery incremental in most resource formations and at most enterprises.

Quoted

"[FirstEnergy Corp.] still has plenty of wood to chop as management works to completely divest the company of its competitive energy operations (CES) over the next 12-18 months," Wells Fargo analyst Neil Kalton said following FirstEnergy's announcement that it will sell nearly 1,600 MW of merchant generating capacity.

The day ahead

* The U.S. Senate Committee on Foreign Relations will hold a business meeting at 4:30 p.m. ET to consider the nomination of Rex Tillerson as secretary of state.

* Targa will host a conference call at 10 a.m. ET to discuss its proposed purchase of Outrigger assets.

* Early morning futures indicators pointed to a lower 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.

The Daily Dose is updated as of 7:30 a.m. ET. Some links may require registration or a subscription.