OVERNIGHT ENERGY: Energy Secretary faces new tests for agenda

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STATE OF PLAY: Chu faces a new energy reality

Energy Secretary Steven Chu will meet Thursday morning with his Secretary of Energy Advisory Board, a group of heavyweight experts that dispense advice on the department’s agenda.

The meeting will “focus on the importance of innovation in maintaining global competitiveness,” DOE said. But Chu, two years into his tenure, might want advice on other topics as well.

As the Obama administration’s third year begins, Chu finds himself and his agency in a very different place.

He began his tenure amid a massive influx — tens of billions of dollars — of stimulus cash into the agency. At the same time Chu has frequently said that putting a price on carbon would provide a vital market signal that green energy is here to stay.

Two years later, climate legislation is dead. And Chu is preparing to face House Republicans who are vowing to cut spending at a time when administration officials call low-carbon energy investments vital to the economy’s future.

And beyond just spending issues, Chu faces tough GOP inquiries regarding the fate of the stimulus dollars, the Obama administration’s decision not to build the high-level nuclear waste repository at Yucca Mountain, and others.

“It is kind of a one-eighty,” said Linda Stuntz, an electricity industry lawyer who was a senior Energy Department official under President George H.W. Bush.

Chu, a Nobel Prize-winning physicist, did not have a political background when he became Secretary after leading the Lawrence Berkeley National Laboratory. Stuntz said that as a result he might not face as much fallout as officials who are political veterans.

But Stuntz added that the shift in power on Capitol Hill nonetheless “is going to put a new spotlight on him.”

“I think he is going to have to be able to deal with oversight, to explain that this spending is wise, and how the department has been good steward of the resources it has gotten,” Stuntz said.

“That,” she added, “is going to be a challenge.”

NEWS BITES:

Reilly calls for drilling safety treaty with Mexico

National oil spill commission co-chairman William Reilly called on the Obama administration to think about negotiating a treaty with Mexico and possibly Cuba that would lay out uniform safety standards for offshore drilling in the Gulf of Mexico. Reilly, a former administrator of the Environmental Protection Agency, said it’s important to have uniform standards because an oil spill in foreign waters would affect the United States. 

API working to combat conclusions of spill commission report

The American Petroleum Institute, the country’s most powerful oil and natural gas trade association, is working overtime to push back against the assertion in the oil spill commission's final report that there are “systemic” problems within the oil industry. API Upstream Director Erik Milito criticized the conclusion in remarks Wednesday at a conference on ocean energy. Milito also stressed his criticism of the report to a number of reporters after his remarks.

An API spokesman said the group will underscore that “the industry’s first priority is a culture of safety” in upcoming meetings with lawmakers and administration officials.

Shimkus to investigate Yucca Mountain

The Hill got its hands on a copy of the House Energy and Commerce Committee’s energy and environment agenda Wednesday. Here’s one more tidbit to add: Rep. John Shimkus (R-Ill.), who will chair the panel’s environment subcommittee, is planning to focus on EPA’s superfund program and the Obama administration’s efforts to abandon the Yucca Mountain nuclear waste repository.

Shimkus told The Hill Tuesday night that he plans to ask Obama administration officials why they abandoned Yucca Mountain. “We really have to ask the tough questions,” he said. “Why did we pull the plug and was it all politics. I think people know the answer to that, but you should go through the process of asking the questions.”

Chu on state dinner guest list

Energy Secretary Steven Chu is among the attendees at Wednesday night’s White House state dinner for Chinese President Hu Jintao, joining former U.S. presidents and other high-profile guests.

Oil group wary of Interior overhaul

An oil industry group said Wednesday that the Interior Department’s ongoing overhaul of its offshore energy program will create new “uncertainty” about drilling.

Interior on Wednesday detailed plans to separate the leasing and development program from environmental and safety enforcement. The agencies will be called the Bureau of Ocean Energy Management and the Bureau of Safety and Environmental Enforcement — a division that worries the National Ocean Industries Association.

“It seems that offshore operators will now need to communicate with one agency (BSEE) to obtain permits, but those permits will be reliant upon swift completion of environmental review by another agency (BOEM), thus creating the possibility for further bureaucratic delay,” said NOIA President Randall Luthi, who added that the “real test” is whether deepwater drilling permits get rolling again in the near future.

ON TAP THURSDAY I: Ag Secretary talks renewables

Agriculture Secretary Tom Vilsack will make several energy-related announcements in an afternoon press briefing.

“The Secretary will announce the funding of new biorefinery projects under the 2008 Farm Bill’s Biorefinery Assistance Program (Section 9003) and will announce that USDA has provided funding to recipients in 33 states to support the production and usage of advanced biofuels. Additionally, the Secretary will announce the selection of funding recipients under the Rural Energy for America Program and he will discuss the status of final energy program rules,” an advisory states.

ON TAP THURSDAY II: Energy and Commerce Committee gets organized

The House Energy and Commerce Committee will hold a formal organizational meeting Thursday morning. The committee lineup came more sharply into focus Wednesday when Democrats decided on their subcommittee ranking member slots, which Republicans addressed weeks ago.

IN CASE YOU MISSED IT…

Another busy day at E2. We obtained the Energy and Commerce Committee’s energy and environment agenda. We also reported on the Interior Department’s efforts to restructure its drilling functions, but noted that the department’s top drilling official wouldn’t get specific on when deepwater drilling will resume in the Gulf of Mexico. We also picked up on one of the spill commission co-chairman’s criticisms of calls to “drill, baby, drill.”

Then we gave you an update on energy talk during Chinese President Hu Jintao’s White House visit.

Meanwhile, Democrats announced their membership on two key committee: the Natural Resources Committee and the Energy and Commerce Committee.

We also reported on the chemical industry using the administration’s new regulatory framework to attack key EPA rules. And we unraveled a wonky federal report on carbon markets.

AROUND THE WEB

Investigators detail likely cause of West Virginia mining blast

“Federal investigators said on Wednesday a small fire caused by a methane or natural gas leak likely set off a massive blast of coal dust that killed 29 miners at Massey Energy's . . .  coal mine last year,” Reuters reports.

“Several sprinklers that might have quashed the initial explosion were not functioning at Massey's Upper Big Branch mine, according to a preliminary assessment by officials at the Mine Safety and Health Administration.”