The Energy 202: What a Dodd-Frank rollback could meant for appetite companies

THE LIGHTBULB


House Speaker Paul D. Ryan (R-Wis.) during a press contention where he delivered remarks on a Financial Choice Act. (EPA/SHAWN THEW)

While everybody was examination James B. Comey’s testimony in the Senate on Thursday, a other side of a Capitol was some-more sensitively (but also consequentially) passing a square of legislation that would have far-reaching financial implications if it becomes law.

The check is called the Financial Choice Act, and it passed a GOP-led House in a 233-to-186 party-line vote. The legislation is designed to idle many of the 2010 Dodd-Frank law signed by President Obama and passed by a Democrat-controlled Congress in a arise of a financial crisis.

Among a many implications of a check were it to turn law (and there are many; you can review about them in my co-worker Tory Newmyer’s book of The Finance 202 today) is an renovate of the routine by that stockholders can record and pass shareholder resolutions that ask corporations to change policies. Of regard for us during The Energy 202: About 175 of a roughly 1,000 shareholder resolutions submitted to companies in 2016 endangered corporate climate-change policy.

Though shareholder resolutions have been used for decades to press firms in a appetite zone and elsewhere to divulge a risks meridian change might poise to their businesses, it’s customarily really recently that climate-related resolutions have had many success. Last week, a infancy of ExxonMobil shareholders voted to indoctrinate a association to divulge some-more information about a risk it faces from climate-change regulation. Last month, identical resolutions succeeded during oil and gas writer Occidental Petroleum and electric utility PPL Corp.

Let’s mangle down a new bill:

What are shareholder resolutions? They are proposals put brazen by shareholders during annual association meetings in a routine underneath manners set by a Securities and Exchange Commission. Though customarily non-binding, a shareholder fortitude that receives a infancy of votes from stockholders sends a vigilance to a residence of directors — figure up, or we a shareholders might vote you out. 

What does a stream law say? Right now, any shareholder who owns either $2,000 or 1 percent of a residence is entitled to record a shareholder resolution. First-time resolutions, with that investors are customarily apropos familiar, roughly never hoard a majority, though they might kindle contention among a company’s tip brass. But resolutions can be resubmitted if they accept a certain commission of a vote. For example, if a first-time fortitude receives more than 3 percent of a vote, a batch owners might again submit it subsequent year. But it afterwards contingency accept 6 percent of a subsequent opinion to sojourn on a list a third time.

What does a new House check say? Under a Financial Choice Act upheld yesterday, a $2,000 threshold is gone. A shareholder would have to possess during slightest 1 percent of a association to record a fortitude — a prohibitively high bar for many investors. For a association a distance of, say, ExxonMobil, that would be about $3.4 billion.

“It exceedingly curtails — obliterates — a ability of shareholders to record fortitude on any issue,” pronounced Tim Smith, who leads shareholder engagement during Walden Asset Management.

The check also raises a resubmission threshold: In a above example, a percentages would now be 6 and 15 percent. 

Who opposes this (and who doesn’t)? Pension supports and other institutional investors, seeking clarity from a companies in that they invest, conflict a new shareholder language. Given a vigour it puts on companies, a broader environmental village opposes it too. But the Business Roundtable, that represents large U.S. companies, sent a letter in February to Gary Cohn, arch mercantile confidant to President Trump, in support of amending a law.

“In too many cases, romantic investors with considerate stakes in open companies make shareholder proposals that pursue amicable or domestic agendas separate to a interests of a shareholders as a whole,” Mark Costa, arch executive of Eastman Chemical Company and chair of a Business Roundtable’s regulations committee, wrote to Cohn.  

But it is misleading that particular firms with executives on a Business Roundtable, including appetite companies like American Electric Power and ExxonMobil, consider of a new language. Few companies have come brazen by name to support lifting a bar on shareholder resolutions.

The corporate counter-argument in preference of resolutions: They have a advantage to companies of behaving as a vigour valve for shareholder dissatisfaction, though that investors would have to start ousting board members to make their voices heard.

“If that gets taken away, a customarily apparatus that investors have is to opinion opposite a residence of directors,” Edward Kamonjoh, executive executive of a 50/50 Climate Project, said. 

What happens next? The check goes to a Senate, where it is approaching to die a discerning death. It contains too many top-line changes, like curtailing a appetite of a Consumer Financial Protection Bureau, to be savoury to a assuage Democrats needed for Senate Majority Leader Mitch McConnell (R-Ky.) to mangle a 60-vote filibuster threshold. 

But it is another warning to environmentalists that things have changed for them in GOP-controlled Washington.

Replacement siren is stored nearby wanton oil storage tanks during Kinder Morgan’s Trans Mountain Pipeline depot in Kamloops, British Columbia. (REUTERS/Chris Helgren/File Photo)

— Environmentalists aim at a tube project’s pocketbook. This week, a organisation of environmental organizations, including a Sierra Club, Greenpeace and 350.org, sent a letter to 28 banks seeking them not to financial the Trans Mountain Expansion Project by British Columbia, using from Edmonton to a Pacific Coast nearby Vancouver.

Twenty green groups asked a financial firms not to account a plan by Kinder Morgan, a Houston-based appetite infrastructure association that final month done an initial open charity to lift money for a expansion, and is still finalizing financing. If completed, a enlargement would scarcely triple a ability of a existent 715-mile-long tube system. 

The plan shares similarities to other pipelines that have drawn protest, creation it an appealing aim for environmentalists. Like a argumentative Dakota Access pipeline, it will run nearby indigenous populations who wish it were not being built nearby their lands. Like a Keystone XL pipeline, Trans Mountain will assistance deliver Alberta connect sands oil, a quite carbon-intensive fuel source, to general markets.

Jason Disterhoft, a comparison supporter during a Rainforest Action Network, pronounced environmentalists chose to concentration on this plan since of “the scale of a impact both on a meridian side and a inland side.”

“The final thing a meridian needs is expanded connect sands production,” Disterhoft added, citing Canada’s joining to reducing greenhouse gas emissions underneath a Paris accord.

There’s one essential difference, though, between a Trans Mountain expansion and those other dual due pipelines — it’s in Canada. Over a final 8 years, environmentalists found with President Obama a White House amenable to their seductiveness in weaning a United States off of hoary fuels. That is no longer a box with President Trump.

The domestic meridian is some-more auspicious in Canada to environmentalists. While Canada’s sovereign supervision under Prime Minister Justin Trudeau sealed off on a tube expansion, British Columbia’s provincial supervision has come out in clever antithesis to it.

Kinder Morgan did not respond to a ask for comment.

(Chris Ratcliffe/Bloomberg)

— Underlining a disorderly politics of timorous a sovereign government, a group of business executives, including some from oil and utilities firms, sent a minute to Congress seeking it to safety research-and-development appropriation during a Department of Energy, The Post’s Steven Mufson reports.

The invulnerability from some appetite executives, customarily not a tax-and-spend crowd, makes sense here: One of a many innovations to emerge from Energy Department research, after all, is plane drilling. That descent technique helped coax a healthy gas series in a United States (and elsewhere).

In Mufson’s article, Chad Holliday, a former arch executive during DuPont and now authority of Shell, highlighted “the significance of research, quite about appetite with a appetite transition around a world.” He combined that “companies alone will not be means to do this in a strong adequate way. Research and partnering with a private zone is so important, and it is a tiny volume of income in a grand intrigue of things.”

Similarly, 3 former partner appetite secretaries from a dual Bush administrations assimilated their Democratic counterparts to send a minute of protest to Congress over proposed appropriation cuts to renewable appetite and potency during a department. 

— During his Rose Garden debate announcing the Paris withdrawal, Trump went off book during one indicate and said:

The mines are starting to open up, carrying a large opening in dual weeks, Pennsylvania, Ohio, West Virginia, so many places. A large opening of a brand, new mine. It’s unheard of. For many, many years that hasn’t happened. They asked me if I’d go. I’m going to try.

Though he didn’t name names, it was widely suspicion he was referring to the Acosta Deep Mine in Jennerstown, Pa.  

Well on Thursday, that cave opened. And while Trump couldn’t make it in person, a president sent cave employees a video message. Via the Pittsburgh Post-Gazette’s Daniel Moore:

Trump: “I’m so unapproachable of a fact that you’re opening that cave today. we told we it was going to happen. God Bless America.”

— Interior Secretary Ryan Zinke’s behaving emissary arch of staff, Megan Bloomgren, has been hired by a American Petroleum Institute. She will be a lobbying group’s new clamp boss for communications. Before a Interior Department, she was a partner during the public affairs organisation DCI Group.

Sen. Lisa Murkowski, (R-Alaska). (AP Photo/Pat Sullivan, File)

While we were examination a Comey hearing…

This is from an oversight hearing of a Senate Energy and Natural Resources Committee on cost reductions in several rising appetite technologies. The cabinet chair, Sen. Lisa Murkowski (R-Alaska), accepted Washington had other things on a mind on Thursday. A press recover on a hearing from her cabinet began: “In what was simply a many expected conference on Capitol Hill this morning…”

This Jan 19, 2012 picture supposing by NASA shows an M3.2 solar light prisoner by a Solar Dynamics Observatory (SDO). (HO/AFP/Getty Images)

— Digging deep into President Trump’s budget, Joe Kunches for The Post found that the White House due to eliminate a module that detects solar storms. These storms can send toward Earth a rush of radiation that, if absolute enough, could ravage a electric grid. Kunches explains:

Geomagnetic storms — disturbances to a normal state of Earth’s captivating margin — outcome from energized solar wind. The solar breeze is always blowing, yet infrequently it’s quite — windy. The largest storms customarily are sparked by “solar breeze gusts” called coronal mass ejections. The geomagnetic margin fluctuates extravagantly during a storm, like a breeze during a hurricane, and that creates electrical currents here on Earth. They can be heated and deleterious to transformers in a appetite grid.

It costs customarily $1.9 million per year to run. The offer is head-scratching given a interest the Trump administration has paid toward grid confidence generally and toward these really deviation threats, called electromagnetic pulses, specifically — either they come from a object or from a antagonistic unfamiliar appetite like North Korea around a chief bomb.

— Zinke says a Interior Department will continue meridian research. But, a Interior secretary told a House Appropriations Committee panel, it will be strong in one partial of a department, a U.S. Geological Survey. The Washington Examiner’s John Siciliano reports

Interior Secretary Ryan Zinke told lawmakers Thursday that his group is doing investigate on meridian change, yet it will be focused in one multiplication of a sprawling dialect instead of 4 or five.

“So, on a meridian emanate … we saddled it in one multiplication since we wish to know from a multiplication what’s going on,” Zinke told a House Appropriations Committee’s row on Interior and associated agencies.

Last month, the Interior Department asked USGS to revise out a line — “Global meridian change drives sea-level rise, augmenting a magnitude of coastal flooding” — from a news recover on a sea-level-rise study.

— The U.S. solar attention is doing customarily excellent underneath Trump — for now. The Post’s Chris Mooney reports on how a attention is faring during a initial entertain of 2017: “The U.S. saw a designation of some-more than 2 gigawatts, or billion watts, of new solar capacity, a entertain of it on particular rooftops, according to a Thursday news by SEIA and GTM Research. That ranks solar second to healthy gas altogether for new U.S. electricity installations in a quarter, and was customarily a slight — 2 percent — year-on-year decline.”  

 

The reasons? State turn incentives to supplement renewables to a grid have helped. Plus many solar installations during a commencement of this year were set into suit before Election Day, when a awaiting of a Trump presidency seemed doubtful to many.

Maryland Gov. Larry Hogan, second from left, talks during a Chesapeake Bay Executive Council meeting. (Josh Hicks/TWP)

AK: Faster-moving sea ice army frigid bears to use some-more energy

AK: How developers of a argumentative Alaskan cave set out early to run Trump’s EPA

CATrump says slicing CO emissions is a job-killer, but California customarily valid otherwise.

MD: Republican director urges Congress to reject brook cuts as activists press him to join meridian pact

WA: Methanol plant in Washington clears another jump with 2 state permits

President Trump listens to Environmental Protection Agency Administrator Scott Pruitt pronounce after announcing a United States will repel from a Paris accord. ( AFP PHOTO / Brendan SmialowskiBRENDAN SMIALOWSKI/AFP/Getty Images)

Coming Up

  • EPA head Scott Pruitt will testify before a House Appropriations Interior, Environment and Related Agencies subcommittee subsequent week on a agency’s due budget.
     
  • Interior Secretary Ryan Zinke has until June 10 to make a recommendation about a destiny of a contested Bears Ears National Monument in Utah. The recommendation does not have to be done publicly. Morning Consult noted that Zinke could make his recommendation to Trump secretly by Saturday.
     
  • The Senate Committee on Environment and Public Works will hold its hearing on June 13 on a nominations of Kristine Svinicki, Annie Caputo and David Wright to be members of a U.S. Nuclear Regulatory Commission, and a assignment of Susan Bodine to be partner director of a Office of Enforcement and Compliance Assurance of a EPA.
     
  • Later this month, a U.S. Energy Information Administration will host its 2017 EIA Energy Conference in Washington D.C.

Here’s what we need to know about a Financial Choice Act:

If we missed James B. Comey’s testimony yesterday, watch this three-minute recap:

From Capital Weather Gang’s Angela Fritz, watch this dark, meaningful hurricane shake by a mud in North Dakota:

And finally, in things we wish we never have to do:


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