Be more of an insider. Get the Washington Examiner Magazine, Digital Edition now.

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/

MURKOWSKI PRODS REPUBLICANS ON CLIMATE CHANGE: Senate Energy and Natural Resources Committee Chairwoman Lisa Murkowski challenged her party Wednesday morning to take climate change more seriously.

“We have to have a better discussion about climate change and the responses to it,” the Alaska Republican said during an address at the National Association of Regulatory Utility Commissioners’ Winter Policy Summit. “We have to not be afraid to use terms that some might say, that's politically charged. Why is it politically charged to say climate change? I see in my state the impact we have from warming temperatures.”

• Warming facts: Murkowski said it is “fact” that global temperatures are warming in response to man-made emissions of carbon dioxide, as most climate scientists say.

The Trump administration and many Republicans downplay the impacts of climate change and say the science on the warming of the planet is imprecise.

“It is a fact when we see habitats changing because temperatures are warmer,” Murkowski said. “It is fact when sea ice that is multi-year ice is no longer in place where it has historically been. Working towards our energy future, we must be reducing emissions that contribute to climate change.”

• ‘Stop making it harder’: Murkowski said policymakers are making it more difficult to combat climate change by not acknowledging the extent of the problem.

“This conversation is difficult,” Murkowski said. “We all know it's difficult. We have to stop making it harder. Let’s stop making it harder.”

• ‘Balance’ over dominance: Murkowski says politicians should continue to promote the use of fossil fuels, because she says removing them from the grid entirely is unrealistic and costly. But she said energy leaders should pursue “balance,” a contrast to the “dominance” agenda flouted by the Trump administration.

PERRY SHAKES UP ENERGY DEPARTMENT WITH CYBERSECURITY REBOOT: Energy Secretary Rick Perry opened the agency’s first office of cybersecurity Wednesday, as one of his first actions in implementing President Trump’s fiscal 2019 budget proposal.

“This new office best positions the department to address the emerging threats of tomorrow while protecting the reliable flow of energy to Americans today,” Perry said in opening the Office of Cybersecurity, Energy Security, and Emergency Response.

• ‘No higher priority:’ Perry says the office “plays a vital role in protecting our nation’s energy infrastructure from cyber threats, physical attack and natural disaster, and as secretary, I have no higher priority.”

The agency said Trump’s budget request includes $96 million in funding for the office to bolster the Energy Department’s efforts in cybersecurity and energy security.

The office will need a new assistant secretary to run it, which will require a nomination from the White House.

The agency said the new office will elevate its focus on energy infrastructure protection and will enable a “more coordinated preparedness and response to natural and man-made threats.”

• Capitol Hill difficulties: Although protecting the power grid from cyberattacks has bipartisan support, there may be some criticism that Perry opened a new office without Congress approving it.

• Acting under existing authority: But sources tell John that since the Trump administration is functioning under a continuing resolution from fiscal 2017, it is moving under its existing authority to act as it sees fit.

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.

FIGHT OVER ETHANOL RISES WITH STATE, INDUSTRY PUSH FOR ‘NATIONAL WAIVER:’ The refinery industry is pressing the Trump administration to issue a national waiver of the ethanol mandate after several requests from governors.

John has learned that the refining industry’s lead trade group, the American Fuels and Petrochemical Manufacturers, sent a letter Tuesday night to Environmental Protection Agency air chief Bill Wehrum.

“Over the past several months, EPA received petitions from Pennsylvania, New Mexico, Texas, and Delaware requesting nationwide waivers from the Renewable Fuel Standard in order to alleviate ‘severe economic harm’ caused by the RFS,” the letter read.

The “RFS disadvantages consumers and harms U.S. energy security,” the letter read. “The limits of the fuel distribution system to accommodate increasing ethanol volumes are well-documented, and have increased compliance costs for the program.” It also said EPA’s “continued insistence on utilizing foreign imports” for setting the amount of renewable fuel that refiners are required to blend each year is raising prices by forcing consumers to buy higher-priced biodiesel while simultaneously displacing U.S.-produced diesel with foreign fuels.

• Issue could put administration in a difficult place: The oil industry’s lead trade group, the American Petroleum Institute, prodded EPA on Tuesday to ignore the refiners’ calls for an exemption.

• Oil majors vs. independents: API represents larger, fully integrated oil companies that control both fuel production and retail fuel distribution, such as Exxon Mobil and Shell. Independent refiners tell John this has made it easier for them to weather the problems caused by the ethanol mandate, and even benefit from it.

• Ethanol industry hasn’t weighed in: The Renewable Fuels Association is too busy at its annual conference in San Antonio to think about responding to the refiners, a source told John.

However, the group issued a report on Wednesday showing the ethanol industry added more than $44 billion to the nation’s gross domestic product in 2017 while supporting 358,779 jobs.

PRUITT SAYS SECURITY THREATS FORCE FIRST-CLASS TRAVEL: EPA Administrator Scott Pruitt said Tuesday that security-related decisions made by others is prompting him to frequently fly first class or take military flights at taxpayer expense.

• Back at it: Pruitt on Tuesday again flew first class to New Hampshire for a private meeting with Gov. Chris Sununu and visits to a paper products company and a federal Superfund site.

• ‘Toxic environment’: “I’m not involved in any of those decisions,” Pruitt said during an interview with the New Hampshire Union Leader. “Those are all made by the [security] detail, the security assessment in addition to the chief of staff.”

“Unfortunately, we've had some incidents on travel dating back to when I first started serving in the March-April timeframe,” Pruitt said. “We live in a very toxic environment politically, particularly around issues of the environment,” he said.

The EPA’s inspector general is investigating Pruitt’s travel habits.

PRUITT GETS OK TO DECLARE BURNING TIMBER CLIMATE FRIENDLY: The substance of why Pruitt was in New Hampshire was ignored by reporters Wednesday, with flightgate taking up much of the coverage.

• Trip was about climate change, sort of: He journeyed to the Granite State to talk to the forest products industry to discuss new authority given to the EPA under a budget bill signed last year to declare biomass-fired power plants “carbon neutral.”

That means the plants can be counted as a renewable energy resource. If a state grows timber as it is being burned to produce electricity, the process sort of cancels each other out when it comes to greenhouse gas emissions. The emissions, principally carbon dioxide, are blamed for warming the planet.

For years, proponents of biomass power, or burning woodland timber waste, have wanted an EPA signoff to make electricity. New Hampshire is the second most forested state in the country.

• Importance of forest products: Pruitt delivered a letter to Sununu Tuesday announcing EPA's efforts to work towards a carbon-neutral policy for biomass.

“For years, the federal government rendered most U.S. forestry producers ineligible for federal procurement projects and created confusion around biomass carbon neutrality,” Pruitt said in a statement. “Understanding the importance of the forest products industry to the state of New Hampshire, EPA is focused on clarifying regulations that were encumbering the industry.”

• Congressional support: The EPA said it received direction from Congress in the Consolidated Appropriations Act of 2017, which directed agencies to “proactively recognize forest biomass as a renewable energy source and establish policies that reflect its carbon neutrality.”

GAS TAX INCREASE ‘ON THE TABLE:’ Raising the federal gas tax to pay for transportation funding is "on the table," Transportation Secretary Elaine Chao said Tuesday.

She said raising the tax, which has not been increased in 25 years, is not an ideal solution, but repairing the nation's roads is so important that the Trump administration would consider it.

• ‘Regressive’ but not ‘out of bounds’: "The president has not declared anything out of bounds. Everything is on the table," Chao told reporters at the White House when asked if the president would agree to a 25-cent-a-gallon increase proposed by the Chamber of Commerce. She added that the gasoline tax has a "very regressive effect" on low-income Americans and called on Congress to look for better solutions to pay for the Highway Trust Fund.

• How much is the tax? The tax is currently 18.4 cents for gasoline and 24.4 cents for diesel and goes into the trust fund. It is not indexed to inflation.

TEXAS CLEAN ENERGY COMPANY CHARGED ENERGY DEPARTMENT FOR BOOZE, TRAVEL: A now-bankrupt Texas company partnering with President Barack Obama's Energy Department on a clean coal project charged the federal government for spas, alcohol, and travel, the department's inspector general found.

• What the report found: The Energy Department’s inspector general published a report Tuesday finding the Texas Clean Energy Project, developed by Summit Texas Clean Energy, charged the agency more than $2.5 million for expenses the watchdog deemed “potentially unallowable,” including $1.2 million in lobbying costs and $1.3 million in “questionable or prohibited” travel-related expenses.

• Payout for goodies: The travel-related expenses include more than $650,000 incurred by a consultant used by Summit Texas Clean Energy for items such as a spa service, alcohol, first-class travel, limousine services, receipts in foreign currency, and business meals.

Companies partnering with the government cannot charge for lobbying fees under federal law.

• No controls: The inspector general blamed the Energy Department for not implementing “invoice review controls” that it had required of Summit Texas Clean Energy per the terms of the deal.

GREEN GROUPS SUE EPA FOR DUMPING FRACKING WASTE IN GULF: A coalition of environmental groups sued the EPA in federal court Tuesday, saying the agency allowed oil companies to dump waste from fracking and drilling into the Gulf of Mexico.

The lawsuit, filed by the Center for Biological Diversity, Gulf Restoration Network and Louisiana Bucket Brigade, says the EPA inappropriately granted a permit to companies under the Clean Air Act to allow dumping of waste in federal waters off of Texas and Louisiana.

• Water as ‘garbage disposal’: It says the EPA short-circuited the National Environmental Policy Act in granting the permit.

“The Trump administration is letting oil companies dump toxic fracking chemicals into the Gulf with no regard for the risks or the law,” said Kristen Monsell, a senior attorney at the Center for Biological Diversity, which sued in the U.S. Court of Appeals for the 5th Circuit. “That’s just unacceptable. The EPA is supposed to protect water quality, not give oil companies free rein to use our oceans as their garbage disposal.”

NATION’S LARGEST FLOWER SHOW TACKLES WATER WORRIES: The Philadelphia Horticultural Society is using its annual Philadelphia Flower Show, the nation’s largest, to promote sustainable water solutions this year.

Typically a draw for gardeners and tourists, the March 3-11 Philadelphia Flower Show is venturing into new territory in joining with the William Penn Foundation to host a daylong water summit March 7 to promote clean rivers, recreation and maybe politics and concerns the administration is watering down Obama-era rules.

“This really is farsighted,” said Bob Irvin, president of American Rivers, the national advocacy group for waterways. As a keynote speaker, he plans to talk up river success stories and ways to use “natural infrastructure” to clean rivers and maybe address the Trump administration’s recent effort to delay the Obama clean water rules.

RUNDOWN

Wall Street Journal Inside the bribery scandal sweeping through the oil industry

Reuters Wyoming, Utah explore funding legal challenges to West Coast coal policies

Bloomberg China’s Tesla dream threatened by standoff over Shanghai factory

Detroit Free Press Renewable energy proponents in Michigan push for November ballot measure

Wall Street Journal Louisiana port edges closer to oil export on supertankers