By: John Siciliano & Josh Seigel of the Washington Examiner

TRUMP CABINET JOCKEYS OVER ETHANOL PLAN: President Trump’s big plan to appease farmers by boosting the amount of ethanol sold nationwide encountered turbulence this week, as members of his own Cabinet sparred over whether it would come out on time or stall midstream.

The jockeying started Wednesday, when Agriculture Secretary Sonny Perdue told the House Agriculture Committee that he doesn’t see the Environmental Protection Agency issuing the proposal by June 1, when it was promised.

The key piece of the plan is relaxing EPA regulations to allow for 15-percent ethanol fuels to be sold year-round and nationwide by Memorial Day, the beginning of the summer driving season. EPA chief Andrew Wheeler has been prodded daily by members of Congress, farmers and industry to meet the deadline. Sen. Ted Cruz, R-Texas, for instance, pressured Wheeler in February by asking him to answer a laundry list of questions about how the plan would help oil refiners.

EPA immediately came out with a statement after Perdue spoke that said it would be issuing the E15 regulations “expeditiously” in March, with the goal of having it enacted into law by the summer driving season.

But it didn’t stop there. Then-acting EPA administrator Wheeler journeyed to the Department of Agriculture to refute Perdue’s statement in person. He told a conference of the National Association of State Departments of Agriculture, meeting at USDA, to “ignore reports we’re going to miss the summer driving season."

Later, Perdue tweeted a photo of the two shaking hands, saying he was pleased to hear Wheeler would move expeditiously to approve the E15 rule before the summer driving season.

Speculation over why Perdue ventured onto EPA’s turf: Some industry lobbyists believe Perdue was trying to build a fire under EPA to get the rule out by making the comments. They speculate that he had been under pressure by the ethanol industry to ensure the E15 plan comes through this year.

Although USDA is not the primary regulator when it comes to ethanol, it serves in an advisory capacity to EPA. EPA runs the nation’s only Renewable Fuel Standard, which requires refiners to blend an increasing amount of ethanol and other fuels into the gasoline and diesel supply.

Many pro-ethanol groups complained after Perdue’s statements that the president’s plan should have been done a year ago, and that it was part of the promise that Trump made to ethanol producers during his campaign.

Trump, in his last visit to Iowa ahead of the midterm elections, said he would be giving them what they wanted on E15 very soon.

But there could be legal hurdles for Trump’s plan: Industry consultants and congressional aides say the EPA faces major legal hurdles in implementing the plan that have slowed it down.  

The specifics of the EPA regulations would call for the agency to waive the Reid vapor pressure fuel volatility regulations that currently ban E15 from being used after Memorial Day, restricting its sale during summer.

However, many argue that the Reid vapor rules must be changed by Congress, and not by regulatory fiat.

Other reasons for the delay: The ethanol industry argues that a separate component of Trump’s ethanol plan, meant to help the oil industry and refiners, is slowing the rulemaking process.

This separate part of the plan would enact reforms for the ethanol credit trading market to help reduce the cost for refiners, who must comply with EPA’s ethanol mandate by purchasing the credits.

Ethanol credits have experienced high volatility in the prevailing years, forcing refiners to pay hundreds of millions of dollars per year in order to comply with the federal Renewable Fuel Standard. The refinery industry has complained that it has forced some companies into bankruptcy.

Easier to just get rid of the EPA ethanol program altogether: “The Renewable Fuel Mandate is one of the worst programs ever created by Congress,” Tom Pyle, president of the free-market American Energy Alliance, and Trump’s former energy transition chief, told John.

“The Trump proposal doesn’t make this bad program any better,” he added. “Getting to E15 has long been sought by the corn lobby but has gotten nowhere because the EPA has historically insisted that they don’t have the authority to grant the [Reid vapor pressure] waiver” for it to be sold year-round.

He called the Trump plan “pure politics” and pandering to the corn lobby. Pyle predicts Trump’s plan “will surely be thrown out in the courts.”

Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers John Siciliano (@JohnDSiciliano) and Josh Siegel (@SiegelScribe). Email dailyonenergy@washingtonexaminer.com for tips, suggestions, calendar items and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email and we’ll add you to our list.  

RAISING FEARS, OR A LEGITIMATE WARNING? Energy Secretary Rick Perry warned Thursday that a polar vortex descending on the U.S. in the first half of March will be a major test for the nation's electricity grid from Montana all the way to his home state of Texas.

"This is going to be a really deep, deep polar vortex all the way to my home state that will put a massive test upon our ability to deliver an energy supply to keep our citizens safe," Perry said at a press conference.

The National Weather Service on Thursday forecast below normal low temperatures from the upper plain states to Arkansas and northern Texas, March 6 to 10.

Administration officials used previous cold snap in January to argue for an all-of-the-above energy system, one that continues to support coal and nuclear.

Perry explained that the Trump administration supports keeping an adequate number of "baseload" power plants operational to stop a major energy disruption.

"Baseload" is an industry term that is used to refer to any power plant that can supply 24-hour energy, seven days a week. For the administration's purposes, it has come to mean coal and nuclear power plants. It is an energy category that does not typically include wind or solar, although Perry pointed out that an "all-of-the-above" strategy does include renewables.

But is a warning really necessary? The grid functioned adequately during January’s polar vortex with some minor hiccups when it came to natural gas supplies.  

Perry employed similar logic in a regulatory proposal he sent to the Federal Energy Regulatory Commission in his early days as secretary. The proposal called for putting in place market-based incentives for coal plants in order to make the grid more resilient against extreme weather events. FERC unanimously rejected the proposal for lack of evidence.

TRUMP’S VENEZUELA SANCTIONS RAISING GASOLINE PRICES ONE MONTH OUT: Gasoline and diesel prices are rising in the wake of the administration's sanctions on Venezuelan oil late last month, with the Trump administration saying it is ever-watchful of the rising price of crude oil.

The Energy Information Administration's most recent oil analysis released on Wednesday shows the average price of gasoline rising seven cents in the last week, with prices in the Midwest and East Coast exceeding the average by as much as three cents. The average price of diesel fuel crept up four cents, which is four cents higher than it was a year ago.

The price of oil is steadily rising for a variety of reasons, including the sanctioning of oil from Venezuela, which in turn is causing fuel prices to rise, Hannah Breul, EIA's lead petroleum analyst, told John.

WASHINGTON GOV. JAY INSLEE ENTERS 2020 RACE WITH CLIMATE CHANGE FOCUS: Washington Gov. Jay Inslee is running for president in 2020, promising to be the only candidate running on a central platform of fighting climate change.

"I'm Jay Inslee and I'm running for president because I am the only candidate who will make defeating climate change our nation's number one priority," Inslee said in a video posted online Friday.

Inslee will hold a press conference at a solar panel installer in Seattle to further explain his platform.

Inslee, in an interview with the Washington Examiner this past Sunday, shrugged off concernshe could struggle to differentiate himself in a crowded Democratic presidential primary field also prioritizing climate change.

Not his first rodeo: The Washington governor has an actual governing record to share, having fought hard — unsuccessfully — to impose the nation’s first carbon tax in his state, which has one of the cleanest electricity grids in the country, mostly because of zero-carbon hydropower.

He says he has the policy acumen and experience to use the energy behind the Green New Deal to fill in the details.

In December, he proposed a plan for his state to use 100 percent carbon-free electricity by 2045, with proposals to boost electric vehicle use, build energy-efficient buildings, and phase out hydrofluorocarbon, potent greenhouse gases used in refrigeration.

REPUBLICANS PICK GARRET GRAVES TO LEAD ON PELOSI’S CLIMATE COMMITTEE: Rep. Garret Graves of Louisiana has been named the top Republican of House Speaker Nancy Pelosi's new climate change committee.

Graves represents a more moderate choice for Republican leadership. Minority Leader Kevin McCarthy, R-Calif., had faced competing pressures from outside groups on whether to appoint a conservative skeptic such as Rep. Jim Sensenbrenner, R-Wis., as his top GOP committee member, or members with more mainstream views on climate change, such as Graves and another contender, Rep. Francis Rooney, R-Fla. Both Sensenbrenner and Rooney were left off the committee.

The other members are: Reps. Morgan Griffith of Virginia, Buddy Carter of Georgia, Carol Millerof West Virginia, Gary Palmer of Alabama, and Kelly Armstrong of North Dakota.

Finding a middle ground: Rooney, who has introduced a carbon tax bill and is less conservative than Graves, said that the GOP representation on the Select Committee on the Climate Crisis “shows they are not quite where I am yet, and it makes me feel really good about being where I am.”

Graves’ record: Graves, however, has won the plaudits of right-leaning clean energy groups, and views climate change as a threat because his district is feeling the effects of sea level rise.

Last Congress, Graves chaired the Transportation Committee’s Subcommittee on Water Resources and Environment, where he helped pass legislation on flood protection and encouraged federal disaster response and recovery programs to emphasize climate change adaptation and resilience.

EPA’S WHEELER CONFIRMED BY SENATE, BUT MURKOWSKI HAS QUALMS: The Senate confirmed Acting Administrator Andrew Wheeler on Thursday to continue leading the EPA even as notable centrists opposed him or expressed concerns about his policies.

The mild dissent is a sign he could face pressure to soften his regulatory rollback agenda.

Most notably, Sen. Lisa Murkowski, R-Alaska, who voted for Wheeler, told Josh she is not pleased with everything he’s done. She specifically said that he has not acting strongly enough to regulate a class of chemicals that have contaminated water supplies across the U.S.

Doing more on PFAS: Earlier this month, Wheeler, responding to Republican pressure, launched a process for setting a drinking water limit for two toxic chemicals known as perfluoroalkyl and polyfluoroalkyl substances, or PFAS.

But Murkowski said in an interview Thursday that Wheeler’s promise, part of an action plan he announced earlier this month, is "not sufficient at this point in time."

She encouraged Wheeler to actually follow up and impose a drinking water standard, and said she is joining legislation to be introduced this week to force him to.

Climate matters: Murkowski, the chairwoman of the Energy and Natural Resources Committee, also challenged Wheeler to be “attentive” to reducing carbon emissions, although she did not join her collegue and friend Sen. Susan Collins of Maine in saying he is not doing enough to combat climate change. Collins was the only Republican to vote against Wheeler.

HOUSE COMMITTEE LEADERS WANT ANSWERS ON TRUMP’S CLIMATE SKEPTIC PANEL: Democratic House committee leaders, including House Armed Services Committee ChairmanAdam Smith of Washington, on Thursday ridiculed the White House’s expected move to create a panel scrutinizing climate change science. They particularly objected to the leadership of William Happer, a National Security Council senior director and physicist who has expressed doubt about climate science and questioned the threat of carbon emissions.

“Dr. Happer does not have the qualifications to serve on a working group that should be composed of climate scientists, if it is to exist at all,” the lawmakers wrote in a letter to Trump.

Signers of the letter were Smith, Energy and Commerce Committee Chairman Frank Pallone of New Jersey, Natural Resources Committee Chairman Raul Grijalva of Arizona, and Science, Space, and Technology Committee Chairwoman Eddie Bernice Johnson of Texas.

GRASSLEY INTROS TAX EXTENDERS BILL THAT IGNORES ELECTRIC VEHICLES: Senate Finance Committee Chairman Chuck Grassley, R-Iowa, introduced a bill Thursday to extend expiring tax credits, many energy-related, but it does not include a provision to help electric vehicles.

Tesla and General Motors have been pressing Congress to expand or extend the $7,500-per-vehicle tax credit for electric and plug-in hybrid vehicles, primarily by lifting the individual manufacturer cap, and allowing the credit to be used into future years.

The credit, first introduced in 2009, is capped at 200,000 vehicles sold per automaker.

Tesla and GM have already reached the limit, which under the law will result in the tax credit for buyers of its cars being reduced by half for six months and then cut to $1,875 for another six months until it ends.

Grassley’s legislation would extend the biodiesel tax credit, along with a tax break for fuel cell motor vehicles, and a tax credit for builders of energy-efficiency residential homes, among others.