SIGN UP! If you’d like to continue receiving Washington Examiner's Daily on Energy newsletter, SUBSCRIBE HERE: http://newsletters.washingtonexaminer.com/newsletter/daily-on-energy/

KHASHOGGI FAMILY TIES TO IRAN-CONTRA AND 1970S OIL EMBARGO: Missing, and likely murdered, Saudi journalist Jamal Khashoggi is the nephew of billionaire global arms dealer Adnan Khashoggi, who died last year.

But the Khashoggi family also had close ties to one of the architects of the Saudi oil embargo of the 1970s, Ahmed Zaki Yamani.

Yamani, who at the time appeared numerous times on the cover of Newsweek, had become a member of the glitterati, but grew to dislike the extravagance of Jamal’s notorious uncle.  

In writer Jeffrey Robinson’s biography of Yamani, he describes a time when the Saudi energy chief’s wife forced him to take a vacation by borrowing a yacht from Khashoggi to tour the Caribbean for a few weeks.

“When they arrived at the dock he was told it was Adnan Khashoggi’s yacht,” Robinson writes. “Yamani was not pleased.”

Yamani didn’t want it to look like he was Khashoggi’s guest, “nor did he particularly want Khashoggi to think that.”

Left with the choice of either boarding or trekking back home, Yamani grudgingly went aboard with his wife.

Later in the 1980s, Adnan Khashoggi was implicated as the middleman in the Iran-Contra arms deal scandal that involved former Republican President Ronald Reagan, who sold arms to Iran, under an embargo, to fund the Contras in Nicaragua and eventually negotiate the release of U.S. hostages being held by Hezbollah in Lebanon. Reagan was trying to get around Congress to fund the right-wing Contras against socialist rebels.

Trump said Thursday that he wants the U.S.’ recent weapons deals with Saudi Arabia not to be held up because of the missing journalist, despite it looking more and more like he was assassinated by the Saudi government in Turkey.

Nevertheless, lawmakers on Capitol Hill say they may stop the arms deals from gaining approval over Khashoggi’s death.

Welcome to Daily on Energy, compiled 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.  

TRUMP TRAVELS TO COAL-FIRED OHIO, BUT NOT SURE ENERGY IS ON THE AGENDA: President Trump jets off to Cincinnati, Ohio Friday night to hold a rally in the swing state and talk up the economy.

It is unclear if energy will come up. Despite Ohio being a large coal producer and possessing a number of the largest coal plants in the country, it is also becoming a large natural gas producer and is shifting its energy mix.

Robert Murray, coal magnate and Trump supporter, is based on the other side of the state from where Trump will be be on Friday.

REPUBLICAN CLIMATE HAWKS HOPE DIRE UN REPORT WILL SWAY SKEPTICS: Republican climate hawks in Congress say they can overcome the dismissiveness of others in their party, including Trump, who reject, doubt, and mock a new United Nations report that warns the worst impacts of global warming are coming faster, and harder, than previously thought.

“People who speak that way will soon be recognized as part of a fringe movement,” Rep. Carlos Curbelo, R-Fla., told Josh in an interview.

"Those who choose to ignore it will pay a price. We all will ultimately," added Curbelo, who chairs the bipartisan Climate Solutions Caucus, which has seen its ranks grow to 90 members, half of them Republican.

What the report said: The U.N. report concludes that world energy use must undergo a "rapid and far-reaching" transition by 2030 to prevent the worst effects of a 1.5-degree rise in the global temperature. It says the 1.5-degree stricter threshold should be the new target for the world, rather than the 2-degree goal set in the Paris climate change agreement.

This should start a conversation, at the minimum: Some powerful Republicans, many representing states and districts already seeing the effects of climate change, accept the findings and are eager to use the report to gain support for their policies.

“I don't spend a lot of time arguing about who wrote reports or whether your science is good or bad,” Sen. Lisa Murkowski, R-Alaska, the chairwoman of the Energy and Natural Resources Committee, told Josh in an interview. “Part of my role is to engage in constructive conversation about this, and to be assessing it fairly. That is going to be an important thing for me to do going forward, not only with my role here on the committee, but more broadly coming from a state that sees the impact of climate change, and is wrestling with how we deal with that impact.”

Murkowski contends that Republicans first need to appreciate the realities of climate change before devising policy.

“It's hard to be able to find legislative solutions if you haven't been able to have a good base for that discussion,” she said.

There are consequences for waiting: Climate Solutions Caucus Republicans say the problem can’t wait for further debate, and are ready to press their colleagues to consider steps urged by the U.N. report.

“The IPCC report should be a wake-up call for policymakers around the world,” Rep. Brian Fitzpatrick, R-Pa., told Josh. “Congress, led by the Climate Solutions Caucus, must engage on bipartisan policy solutions to combat climate change.”

Read the rest of Josh’s report for more GOP reaction.

FREE MARKET GROUP SAYS CARBON TAX WON’T GROW GOVERNMENT: Free market group R Street Institute released a paper Friday arguing that a revenue-neutral carbon tax won’t grow government.

The U.N. report said a carbon tax must be a pillar of emissions reductions efforts, because it is the most efficient policy to combat climate change since it provides a financial incentive for energy companies to reduce their emissions through innovation, without government regulations.

Playing out the revenue debate: The biggest consideration among climate advocates is what to do with the revenue.

Josiah Neeley, R Street’s energy policy director, notes in his paper that a carbon tax provides a source of revenue that can be put to other “beneficial” purposes, such as cutting other taxes.

For example, Curbelo introduced a carbon tax bill this summer that would get rid of the federal gasoline tax.

Other proposals would use carbon tax revenue for dividends -- regular payments to every American.

The tax would fall over time: Neeley contends that a carbon tax swap tax cannot be exploited as an endless source of new government revenue because higher tax rates would drive quicker emissions reductions, leading to less carbon to tax later on.

“Unlike revenue from income, sales or property taxes, which tends to increase over time even at a constant tax rate, revenue from a carbon tax is likely to remain stable or fall gradually as emissions decline,” he said.

Read his full paper here.

‘EXPENSIVE ENERGY IS BACK,’ IEA WARNS: The International Energy Agency warned Friday that high oil, gas, and coal prices mean “expensive energy is back,” threatening economic growth, especially in developing countries.

"Our position is that expensive energy is back, with oil, gas and coal trading at multi-year highs, and it poses a threat to economic growth," IEA said in its monthly oil market report.

Oil prices are at their highest level since 2014, recently breaching $85 a barrel, but fell this week.

The higher prices are discouraging consumers, forcing the IEA to lower its demand forecast. It says demand growth will slow by 110,000 barrels per day to 1.3 million barrels per day in 2018 and 1.4 million barrels per day in 2019.

Trump’s policies are having an impact: IEA also blames Trump’s trade dispute with China for threatening economic growth, and oil demand.

“The global economy is also at risk from trade disputes,” the IEA said.

Prices are rising primarily because exports from Iran, OPEC’s third largest producer, are falling ahead of sanctions Trump will impose beginning Nov. 4. The Trump administration says it will penalize countries that buy oil from Iran, cutting them off from the American financial system. Iran’s exports have already fallen by 800,000 barrels per days since May, the IEA said.

But other OPEC producers led by Saudi Arabia are producing more to pick up the slack. OPEC crude oil production rose by 100,000 barrels per day in September to the highest level in a year.

However these production increases are “straining” the world’s spare capacity, surplus oil production that can be brought online within 90 days, the IEA said.

ED MARKEY PRODS FEDS TO 'TURN OVER EVERY STONE' IN COLUMBIA GAS PROBE: Democratic Sen. Ed Markey is calling on federal investigators to “turn over every stone” in investigating the massive Columbia Gas explosion that set neighborhoods ablaze last month outside of Boston.

“We need to turn over every stone and shine a light on the workings of this company and the entire industry, so that people can both trust that their gas system is safe and verify that nothing like this will ever happen again,” said Markey on Thursday after the National Transportation Safety Board issued the results of its preliminary investigation into the Sept. 13 natural gas explosion.

A portrait of destruction: The NTSB findings read like a timeline of events leading up to the explosions, which killed one person and injured over 20 others, including several first responders, according to the findings.

At least five homes were completely leveled by the incident, and 131 structures in three towns damaged by fires caused by natural gas appliances, the NTSB said.

Markey’s not satisfied with it: “The release of the preliminary report raises more questions than answers about how the Merrimack Valley disaster occurred, and I will not stop until we get each and every answer,” said Markey.

Democrats will probe separately: Markey and fellow Democratic Sen. Elizabeth Warren, both from Massachusetts, initiated their own probe into the Columbia Gas explosion, finding that the utility’s safety and response plans contained “critical deficiencies” in dealing with the natural gas high-pressure event that resulted in the explosions and fires last month.

NTSB shows lack of foresight: The NTSB findings show that a work crew had been changing out a part of the aging natural gas distribution system before the explosion. The crew had triggered an old sensor, which caused natural gas to flow at extremely high pressure.

The agency says the company approved the crew’s work plan without any thought of triggering legacy equipment that could cause a safety hazard.

The NTSB found that the company approved the work plan for the crew that tripped the sensor, but "did not account for the location of the sensing lines or require their relocation to ensure the regulators were sensing actual system pressure."

Why Ohio? The event triggered an alarm at the company’s monitoring station hundreds of miles away in Columbus, Ohio, which could not take direct action to resolve it.

The Ohio monitoring center had “no control capability to close or open valves,” the findings read. “[I]ts only capability was to monitor pressures on the distribution system and advise field technicians accordingly."

Too little, too late: The Columbia Gas controller’s office followed company protocol by calling the Meters and Regulations group in Lawrence, Mass. And that call was soon followed by a local resident making the first 911 call to Lawrence emergency services at 4:11 p.m., read the preliminary findings.

HURRICANE MICHAEL LEAVES 1.2 MILLION WITHOUT POWER FROM FLORIDA TO VIRGINIA: Hurricane Michael left 1.2 million people without electricity, from the Gulf Coast to the southern edge of Virginia, before being downgraded to a tropical storm, according to the utility industry group helping to lead the recovery effort with the federal government.

"Currently, the majority of outages are in Florida and North Carolina," Tom Kuhn, president of the Edison Electric Institute, the lead trade group for the investor-owned utility industry, said in a statement, warning that despite Hurricane Michael being downgraded to a tropical storm, "it remains a dangerous storm as it continues to move through North Carolina and Virginia."

More than 33,000 workers from at least two dozen states have mobilized to restore power.

North Carolina leads in power outages: The Energy Department, with whom Kuhn is in contact, said that about 484,000 customers in North Carolina, about 9 percent of the state, is without power. Florida has 381,000 customers without power, followed by Georgia with 214,000 customers without electricity, and Virginia with 108,000 customers without electric service. South Carolina and Alabama had just over 70,000 customers in the dark.

DHS ORDERS BORDER AGENCY TO BYPASS ENVIRONMENTAL RULES TO START TEXAS WALL: A federal border agency has been given permission to bypass environmental laws to build 18 miles of new wall on the U.S.-Mexico border in the Rio Grande Valley of South Texas.

The Department of Homeland Security announced in the Federal Register on Thursday that it has given U.S. Customs and Border Protection approval to ignore environmental and land regulations so it can speed up the process of building miles of new barrier in Hidalgo County.

CBP will move forward on six projects in the southern border's busiest of its nine U.S. Border Patrol sectors, according to details outlined in the announcement. The largest portion of wall construction is 8 miles long and is near the International Boundary Water Commission levee.

The announcement comes a day after DHS said Secretary Kirstjen Nielsen waived regulations for two miles of other border projects in the Rio Grande Valley's Cameron County.

Green groups criticize the move: The Center for Biological Diversity slammed the department's use of waivers and said the administration is ignoring 28 relevant laws to build a wall and issued the Thursday waiver despite having been in the midst of collecting comments from local residents on the plan.

“The Trump administration is ignoring thousands of people in Hidalgo County who don’t want these disastrous border walls,” Laiken Jordahl, borderlands campaigner at the Center for Biological Diversity, said in a statement. “The Rio Grande Valley is one of the most spectacular and biologically important landscapes in the country.”

SENATE CONFIRMS TRUMP’S PICK TO DEFEND HIS ENVIRONMENTAL POLICIES: The Senate on Thursday confirmed Jeffrey Clark to be the Trump administration's top environment attorney at the Department of Justice, in a 52-45 vote.

Clark, who is currently a partner at Kirkland & Ellis, will now assume the role of assistant attorney general for the Justice Department's Environment and Natural Resources Division.

In that role, he will defend Trump administration policies issued by the Environmental Protection Agency and the Department of Interior in the courts.

There are differing views of his resume: Clark previously worked in the Justice Department’s Environment and Natural under Former President George W. Bush from 2001 to 2005.

Industry groups note his experience in environmental law through his involvement with the Clean Air Act, the Clean Water Act, and the National Environmental Policy Act.

Democrats have been critical of Clark, specifically his representation of BP in litigation over the Deepwater Horizon oil spill in 2010.

DUCKWORTH SEEMS TO LIKE TRUMP’S NEW EPA CHEMICAL SAFETY NOMINEE: Sen. Tammy Duckworth, D-IL, met with Trump’s nominee, Alexandra Dunn, to head the EPA office of chemical safety on Thursday.

Duckworth said they had a “great discussion,” but wants her to go after big polluters if she is confirmed by the Senate.

Going against ‘megapolluters’ is a top concern: Environmental justice was a big topic during their meeting, Duckworth said. “If she’s confirmed, I hope she is willing to work with me to improve public health and protect Americans from toxic chemicals, rather than carry water for megapolluters,” the senator said.

Duckworth is the top Democrat on the fish and wildlife panel of the Environment and Public Works Committee, which must vote on Dunn’s appointment before the full Senate can.

Forcing out Trump’s last appointee: She points out in a read-out of the meeting that the president’s prior nominee, Michael Dourson, withdrew from consideration after she “grilled him over his Koch Industries-funded ‘research’ that falsely claimed exposure to the dangerous toxin petroleum coke (petcoke) is safe.”

Dourson’s work was used by a Koch-owned company in Chicago to justify it not cleaning up the toxin after being blamed for high asthma rates and respiratory problems for adults and children in Chicago’s Southeast Side, she explained.

MURKOWSKI MEETS WITH FERC NOMINEE AS SENATE SKIPS TOWN: Murkowski told reporters Thursday morning that she was planning to meet later in the day with Bernard McNamee, Trump’s nominee to fill an open seat on the Federal Energy and Regulatory Commission.

Murkowski’s Senate Energy and Natural Resources Committee had moved quickly to schedule a confirmation hearing next Tuesday for McNamee, so he could be confirmed by the end of the year.

But the Senate adjourned for recess Thursday night, putting that planned confirmation hearing date in doubt. The committee did not respond to a request for comment by press time.

McNamee, the head of the Energy Department’s Office of Policy, is expected to get an earful from Democrats questioning his impartiality because of his work on the administration’s plan to subsidize money-losing coal and nuclear plants. FERC, an independent agency that oversees wholesale electricity markets, may have to review any potential action.

Reading the tea leaves ahead of the hearing: Murkowski, ahead of her meeting with him, signaled she would keep an open mind on McNamee’s relationship to the coal bailout plan, which she opposes.

“It's important to recognize you have an individual who has worked for the Department of Energy in a very specific particular role,” she told reporters. “Where he would be within the FERC is different. So we will have an opportunity to have a conversation about that. It is important to recognize we've got separate roles here.”

RUNDOWN

New York Times EPA to disband a key scientific review panel on air pollution

Bloomberg China swoops in on Canadian oil that's $50 below US crude

Wall Street Journal Saudi journalist’s disappearance sends chill through foreign investors, firms

New York Times It once caused earthquakes. Now a driller in Britain tries fracking again.

SPONSOR MESSAGE: Interested in learning more about pipelines and the important role they play in the energy industry? Check out this clip on the remediation process and monitoring during pipeline operation.

Image

FRIDAY | October 12

Noon, 2322 Rayburn. Securing America’s Future Energy holds a lunchtime briefing on the Hill to discuss the importance of fuel economy standards and the steps the EPA and NHTSA can take to modernize the rules in a way that will save lives, reduce oil consumption, and strengthen American energy security.

SUNDAY | October 14

All day, New Delhi. One of largest energy conference in the U.S., CERAWeek, is holding its second annual energy forum in India, October 14-16. Featured speakers will include: Saudi energy minister Khalid Al-Falih, OPEC ministers, and U.S. Energy Undersecretary Mark Menezes.