On The Hill

 

On Wednesday (Apr. 15), the International Energy Agency (IEA) said it expected April oil demand to decrease by 29 million barrels per day from 2019’s mark, reaching 1995 levels. Second quarter demand will likely fall to 23.1 million barrels per day from the corresponding 2019 figure.

 

On Friday (Apr. 17), WTI crude oil fell as low as $17 per barrel. The agency’s report is one of the latest to quantify the downturn that has drastically impacted the oil and gas industry.

 

IEA said that the impacts of the COVID-19 pandemic will erase almost a decade of growth, noting the recent measures by OPEC+ and other countries won’t immediately rebalance the market.

 

A rebound could arise in June, with the IEA report overview stating, “in June, the gradual recovery likely begins to gain traction, although demand will still be 15 mb/d lower than a year ago.”

 

“There is no feasible agreement that could cut supply by enough to offset such near-term demand losses,” the statement also said. 

 

To view the report, click here.

 

 

 

On Thursday (Apr. 16), the Federal Energy Regulatory Commission (FERC) declined to review its December 2019 decision to limit participation of state-subsidized renewable and nuclear energy in PJM, the nation’s largest power market.

 

FERC voted 3-1 along party lines to deny the rehearing of its order that establishes a price floor for state subsidized resources in PJM’s capacity market. The decision set the stage for legal challenges and potential state exits from the region’s long-term electricity auctions.

 

The capacity market seeks to ensure grid reliability by auctioning power delivery obligations three years before the electricity is needed. PJM had asked FERC to rehear the order because the Minimum Offer Price Rule would block many wind, solar, and nuclear plants from clearing those auctions.

 

In response, FERC Chairman Neil Chatterjee said FERC would issue clarifications to the December order on some subjects. Commissioner Richard Glick, the agency’s only Democratic, opposed the December decision and voted to review it. He said the decision Thursday, “takes matters into its own hands, targeting the clean energy transition underway.”

 

PJM has proposed a June deadline for states to leave the market as part of its compliance filing.^[1]

 

 

 

On Monday (Apr. 13), the Environmental Protection Agency (EPA) proposed a rule to update the EPA’s existing gasoline, diesel, and other fuel programs to improve overall compliance assurance and maintain environmental performance, while reducing costs for industry and the agency. EPA said the changes will save the industry around $33 million a year in administrative costs.^[2]

 

The proposal said certain provisions might indirectly affect in-use fuel quality, but that on balance the program would maintain the same overall level of fuel quality. The rule would not make any substantive changes to the Renewable Fuel Standard.

 

To view the proposed rule, click here.

 

On Tuesday (Apr. 14), EPA Administrator Andrew Wheeler proposed making no change to the national air quality standard for particulate matter. “Based on review of the scientific literature and recommendation from our independent science advisors, we are proposing to retain existing PM standards which will ensure the continued protection of both public health and the environment,” he said in a statement.

 

The decision would leave in place the most recent standard set in 2013, setting an annual average exposure limit of 12 micrograms per cubic meter for fine particulate matter, specks of soot smaller than 2.5 microns.^[3]

 

EPA plans to finalize the rule by the end of the year after taking public comment.

 

On Thursday (Apr. 16), EPA released the text of its final revisions to the Mercury and Air Toxic Standard, keeping in place pollution limits set in 2013.

 

“Today’s action maintains the mercury emissions standard, and meets the statutory obligation to review the adequacy of those standards,” Wheeler said.

 

“This is another example of the EPA, under the Trump administration, following the law while making reasonable regulatory decisions that are fully protective of the public health and environment,” Wheeler added.^[4]

 

Wheeler noted that EPA is not undoing the actual numerical limits on mercury emissions from power plants. Critics argue this move leaves limits open to legal challenges from coal companies.

 

To view the final MATS revisions, click here.

 

 

 

The small business rescue fund ran out of its $350 billion funding capacity Thursday (Apr. 16), morning. The Paycheck Protection Program (PPP) loans were designed to avert layoffs during the coronavirus pandemic, and can be forgiven if businesses agree to maintain their payrolls.

 

Congress is deadlocked on plans to allocate more money for the program. The Small Business Administration (SBA) said it will be unable to accept new loan applications while funding is tapped out, and will have to wait until at least next week for any movement on Capitol Hill.

 

 

 

^[1] Bade, Gavin. “FERC denies rehearing of PJM capacity market order.” Politico Pro, 16 Apr. 2020. https://subscriber.politicopro.com/article/2020/04/ferc-denies-rehearing-of-pjm-capacity-market-order-1916485

 

^[2] Guillen, Alex. “EPA proposes streamlining fuel quality regulatory compliance.” Politico Pro, 13 Apr. 2020. https://subscriber.politicopro.com/article/2020/04/epa-proposes-streamlining-fuel-quality-regulatory-compliance-3979234

 

^[3] Guillen, Alex. “EPA proposes retaining particulate matter standard,” Politico Pro, 14 Apr. 2020. https://subscriber.politicopro.com/article/2020/04/epa-proposes-retaining-particulate-matter-standard-3979276

 

^[4] Guillen, Alex. “EPA releases final MATS revisions.” Politico Pro, 16 Apr. 2020. https://subscriber.politicopro.com/article/2020/04/epa-releases-final-mats-revisions-3979482