energy and environment

White House eyes energy push as Russia strategy

Tula refinery

The White House is weighing a new round of executive actions to boost the U.S. energy industry in an attempt to portray strength against Russia.

The moves the White House is considering — President Donald Trump’s third effort to help pipeline companies — include possible executive orders that would weaken states’ power to block energy projects and ease the construction of new pipelines to facilitate the movement of a glut of domestic oil and gas, according to a senior administration official and others familiar with the effort.

The administration official said the pipeline executive order would be “quite similar” to the president’s previous actions, but “broader, deeper.”

Trump has promoted energy as an economic and national security boon throughout his presidency. In recent weeks, he has amped up the energy-focused rhetoric, making the case in public and private that low oil and gasoline prices are a sign of the success of his policy agenda — and an indication that he isn’t a pawn of Russian President Vladimir Putin.

“This is not only about economic growth and power. A lot of this is about international security policy. We’re aiming at the Russians. We can beat them,” the senior administration official told POLITICO.

But a series of executive orders is unlikely to muffle allegations that the president and his allies have kowtowed to Russia, especially with the prospect of special counsel Robert Mueller’s investigation hanging over the White House.

Any new executive orders, which could be part of a broader, long-delayed infrastructure plan, would likely draw pushback from Democrats like New York Gov. Andrew Cuomo as well as Republican state leaders who are wary of ceding power to protect their rivers and streams to the federal government. And experts say U.S. exports stand little chance of dislodging Moscow’s hold on key global markets.

Trump has pledged to drive “U.S. energy dominance” abroad, capitalizing on the decade-long surge in U.S. oil and gas production that has lifted output to record levels. The sector has remained a bright spot in an economy that experts say may be in danger of dipping into recession.

U.S. companies have opened the spigots on oil shipments since the ban on exports was lifted in 2015, and the U.S. has become one of the leading global shippers. But Russia’s oil output has also reached record levels, and its crude exports are second only to Saudi Arabia. Russia is also the world’s leading gas exporter, with a particularly strong position in Europe, which gets more than a third of its supplies from state-run Gazprom. The company notched record shipments to Europe last year and is banking on growing those volumes by 50 percent over the next decade, leveraging its position as the region’s low-cost producer.

“We are very interested in undermining Russia’s position with respect to energy in Europe,” the official said.

But despite heavy pressure from the Trump administration to block the planned Nord Stream 2 gas pipeline from Russia to Germany and diplomatic trips by Energy Secretary Rick Perry to Eastern Europe to push U.S. liquefied natural gas shipments, experts say the U.S. industry is likely to get only a modest share of the European market — and most U.S. companies are focused on higher-margin markets in Asia.

“This is not up to the White House to decide,” said Tim Boersma, director of Global Natural Gas Markets at Columbia University’s Center on Global Energy Policy. “At the end of the day, this is about private enterprise competing with one another.”

Still, he said, the White House can help facilitate investment in energy, adding that the growing global supply glut and increasing natural gas trade — both of which have U.S. fingerprints — has altered the markets and upended how Gazprom does business.

Trump has a mixed record on pipelines so far. One of his first executive actions as president was to reverse the Obama administration’s rejection of the Dakota Access Pipeline, whose construction drew bitter protests in 2016, and approve a cross-border permit for the Keystone XL pipeline, though that controversial project remains mired in legal disputes. And in August 2017, he signed anexecutive order to streamline the environmental review and permitting process for infrastructure projects, including pipelines. But other pipelines, such as the Mountain Valley and Atlantic Coast projects in the mid-Atlantic states have also hit roadblocks as courts have tossed out deficient Trump administration environmental analyses.

The White House’s new energy push is being helmed by Francis Brooke, the National Economic Council staffer whose portfolio includes energy and infrastructure. Decisions about what will go into the executive orders are still being finalized, and some in the White House hope to unveil them this winter as part of a broader push for an infrastructure bill that faces strong headwinds in Congress. But officials warned that the timing of the executive orders could slip, particularly as the partial government shutdown drags on.

Senior White House officials met last week to discuss a strategy for moving a broad infrastructure initiative, and the energy proposals were among the issues discussed.

In addition to speeding up the construction of pipelines, a second executive order under consideration by the administration would involve changing Obama-era draft guidance for complying with a section of the Clean Water Act, according to a person with knowledge of the discussions. The person said the move is intended to rein in mostly Democratic state governors, such as Gov. Cuomo, who have used the law to block energy projects.

Perry has criticized New York for using its power under the Clean Water Act’s so-called 401 certifications to block construction of the Constitution Pipeline that would deliver natural gas to the Northeast, casting the matter as “a national security issue” that outweighs “political concerns” in Albany.

The White House also has been calling friendly Republican governors to assure them any alterations to the guidance won’t infringe on state sovereignty, as many western lawmakers have raised alarms about that possibility.

But changing the Clean Water Act guidance — a move long-sought by conservatives in Washington — would almost certainly draw legal challenges.

“They’re very concerned, as any administration should be, that any action they take will survive judicial scrutiny,” said Christopher Guith, senior vice president for policy at the U.S. Chamber of Commerce’s Global Energy Institute.

More broadly, linking the White House’s economic and security ambitions to its energy policy is a risky proposition. While the United States is currently enjoying low oil and gas prices, a sudden reversal — even one that’s caused by events outside of the president’s control, like turmoil in the Middle East — could give Trump’s opponents ammunition to use against him in the presidential campaign.

The energy industry has also complained to the White House that Trump’s 25 percent tariff on imported steel was making some new projects too expensive to build, and that the government shutdown has forced the Commerce Department to furlough staff that had been processing tariff exemptions for companies like Exxon Mobil, Shell and BP.

And the Trump administration has already used its executive branch power multiple times to bolster the industry. In addition to the approving the Dakota Access Pipeline, it has stripped air pollution rules for fracking on federal land, signed legislation opening part of the Arctic National Wildlife Refuge to potential drilling and eased environmental review requirements. The president has also taken steps to reverse Obama administration environment and climate policies, including signaling an intent to withdraw from the Paris climate accord and scaling back proposed carbon dioxide limits on power plants.

For the energy industry, any help in expanding the pipeline network to move oil and gas from the Permian Basin fields in West Texas and New Mexico to far away markets or from the Marcellus Shale in Pennsylvania to the Northeast is a high priority.

“To us, they need to take steps to move this forward,” Howard Feldman, senior director of regulatory and scientific affairs with the American Petroleum Institute, said of permitting. “They’re letting the marketplace work, which is important. We think there’s opportunities for greater access in some places. Obviously what’s missing right now is infrastructure. We need more.”