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TWO TOP EPA OFFICIALS RESIGN UNDER SCRUTINY: Two top Environmental Protection Agency officials who have been at the center of controversy surrounding Administrator Scott Pruitt’s spending and ethics have resigned.

The EPA Tuesday announced the departure of Albert “Kell” Kelly, who led the Superfund program at the agency targeting faster clean-ups of hazardous sites.

In addition, Pasquale “Nino” Perrotta, the head of Pruitt’s security detail, resigned Monday, and is leaving the agency as a major figure and witness in federal probes of Pruitt’s spending and ethics.

• Bank on it: Kelly attracted controversy over a revelation that he was barred from working in the finance industry because of a banking violation. He is a former banking executive and friend of Pruitt’s from his home state of Oklahoma.

The Intercept, which first reported Kelly’s banking problems, said Pruitt has received loans from Kelly’s bank.

• ‘Sorely missed’: Pruitt, in a statement, praised Kelly’s work. The EPA administrator has made faster clean-up of Superfund sites a priority and has criticized previous administrations for moving too slowly.

“Kell Kelly’s service at EPA will be sorely missed. In just over a year he has made a tremendous impact on EPA’s Superfund program,” he said.

• Key figure in spending probes: The House Oversight and Government Reform Committee on Wednesday is planning to interview Perrotta, charged with leading Pruitt’s 24/7 security detail, as part of the panel’s probe into Pruitt’s spending and ethics.

Perrotta told ABC News he plans to “fully cooperate and answer any and all questions” from Congress, starting with a transcribed interview with the Oversight Committee, led by Chairman Trey Gowdy, R-S.C.

Perrotta is at the center of several federal probes into Pruitt’s spending, involving about $3 million spent on his security, including travel and overtime pay for Pruitt’s detail, much of it approved by Perrotta.

The EPA inspector general is investigating Perrotta for directing an EPA contract to a business partner who conducted a search for surveillance devices in Pruitt’s office, according to the New York Times. Perrotta was already planning to retire this summer, the EPA said.

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FERC PICKS CLEAN ENERGY TURF BATTLE WITH STATES, UTILITIES: The federal government’s independent electricity watchdog has been venturing into new territory with a series of regulations for clean energy that states and utilities warn trample on state authority and could cost consumers more money.

• Nothing new, but more common: Jurisdictional battles between the Federal Energy Regulatory Commission and the states are nothing new, but they are becoming more common as the way energy is produced and managed rapidly changes.

• Going to court: Court cases between the states and the FERC over its jurisdiction when regulating energy consumers have increased in recent years, and the commission’s new rules under Trump’s chairman, Kevin McIntyre, is set to raise that number.

• Feds push the limit: “FERC is continually pushing the envelope on its jurisdiction,” said Delia Patterson, senior vice president for advocacy and general counsel at the American Public Power Association. FERC understands where it is crossing the line, but commissioners want to expand their jurisdiction into the states’ domain, she said.

“I think they are evaluating the jurisdictional issues, but they’re pushing for more and more jurisdiction … where they are reasoning out of entering into cooperative federalism,” she said.

Read more in this week’s magazine.

FORMER TOP EPA STAFFER SAYS SCOTT PRUITT ‘BALD-FACED’ LIED TO CONGRESS: A former top EPA staffer said Monday that Pruitt was “bald-faced lying” when he told lawmakers last week that he did not retaliate against employees who questioned his spending on security and travel.

Former EPA deputy chief of staff Kevin Chmielewski told ABC News he was “100 percent” forced out of the agency after raising concerns about Pruitt’s spending on first-class travel.

• Threatening words: Chmielewski, who worked on the campaign staff for President Trump, said a manager called him into his office and said: “Hey — Administrator Pruitt either wants me to fire you or put you in an office so that he doesn’t have to see you again.”

• ‘Final straw’: Chmielewski, acting as a whistleblower, told Democratic lawmakers behind closed doors this month that he was pushed out of the EPA after he refused to approve first-class travel retroactively for another agency aide.

The Democratic lawmakers who spoke with Chmielewski say he told them his refusal to sign off on the first-class travel “appears to him to have been the final straw” that caused him to lose his job.

DEMOCRATS ACCUSE PRUITT OF MISLEADING THEM ON WEAKENING FUEL-EFFICIENCY RULES: Democrats accused Pruitt Monday of misleading them about his plans to weaken President Barack Obama-era fuel-efficiency rules and potentially revoke a waiver for California allowing the state to make its own tougher standards.

• Stuck in time: The Trump administration is considering a proposal to freeze fuel-efficiency and greenhouse gas emissions targets at 2020 levels through 2025, according to multiple reports.

The proposal is the “preferred option” of one of several alternatives being considered by the EPA and Transportation Department’s National Highway Traffic and Safety Administration, which are jointly drafting the rules.

The EPA is also prepared to challenge California over a waiver it has that allows it to set its own, stricter fuel-efficiency standards, the New York Times and Washington Post reported.

• ‘False and misleading’: “If these reports are correct, your response to direct questioning on this issue during your appearance last week before the House Energy and Commerce Committee was potentially false and misleading,” Reps. Doris Matsui, D-Calif., and Paul Tonko, D-N.Y., wrote in a letter to Pruitt Monday.

Pruitt testified to the Energy and Commerce Committee Thursday that he has not decided whether to allow California to keep its waiver, and wants to work constructively with the state on a solution.

GRASSLEY BLASTS EPA FOR GIVING ETHANOL WAIVER TO ICAHN: Sen. Chuck Grassley on Monday accused Pruitt of “undermining” the Renewable Fuel Standard by granting a financial hardship waiver to a refinery owned by Carl Icahn, a billionaire former adviser to President Trump.

“EPA handing out ‘hardship’ waivers to billionaires like Carl Icahn is undermining integrity of the RenewableFuelStandard,” Grassley, R-Iowa, said in a Twitter post. “Pruitt shld live up 2his commitment to midwest senators &support the law/not mess w congressional intent BAILING OUT BILLIONAIRES ISNT HELPING ETHANOL/FARMERS.”

• Get what you lobbied for: The EPA has granted a financial hardship waiver to Oklahoma-based CVR Energy, owned by Icahn, Reuters reported Monday, as the agency has been granting more waivers to oil refiners recently to avoid meeting the nation’s Renewable Fuel Standard.

Icahn is under investigation by the Justice Department for trying to change biofuels policy when he was an informal adviser to Trump.

SENATORS INCREASE PRESSURE ON PRUITT TO FULFILL TRUMP’S ETHANOL PLEDGE: A bipartisan group of farm-state senators, led by Grassley, is increasing the pressure on Pruitt to fulfill Trump’s pledge to blend more corn ethanol in the nation’s fuel supply.

• 18 senators for Mr. Pruitt: “Allowing an open marketplace with more fuel options for consumers encourages competition and drives down consumer fuel costs,” the group of 18 lawmakers, led by Grassley, said in a letter to Pruitt Monday.

The senators included a mix of Republicans and Democrats, including Illinois Democratic Sens. Dick Durbin and Tammy Duckworth and Republicans such as Joni Ernst of Iowa and John Thune of South Dakota.

• Demands: They want Pruitt to provide concrete details on how he plans to fulfill Trump’s April promise to open the fuel market to 15 percent ethanol blends of gasoline by ending the EPA’s fuel-volatility restrictions on using the fuel during the summer.

EPA MOVES TO APPROVE NEW FUEL THAT COULD MAKE ETHANOL IRRELEVANT: The EPA took comments until Monday night on what could become an replacement fuel for corn ethanol under the Renewable Fuel Standard.

The agency wanted to hear the pros and cons of using a renewable form of “isobutanol” in the nation’s gasoline supply.

The company Butamax Advanced Biofuels, a joint venture between oil and chemical giants BP and DuPont, manufactures the renewable isobutanol fuel.

• Fighting for the gasoline market: The venture submitted an application to the agency to register the fuel as a gasoline additive, just like ethanol, at up to 16 volume percent, instead of ethanol’s 10 percent.

The two fuels could co-exist, theoretically, making a bigger chunk of the nation’s gasoline supply renewable.

• Just drop in: Isobutanol is what is considered a “drop-in” fuel, meaning it has all the benefits of corn ethanol without any of the problems, such as corrosion that comes with blending high levels of ethanol in gasoline. It can be “dropped in” the fuel supply with no worries. It also can be transported via steel pipeline, unlike ethanol, which requires tank cars.

• Military testing: The military had been tinkering with the fuel for years. Most recently, the Army was putting it in its Black Hawk helicopters.  

• E-15, meet I-16: But now that the fuel is on the verge of becoming commercially available, and since Butamax’s product is renewable, blending isobutanol into 16 percent of the gasoline supply could lead to a lucrative solution for refiners under the Renewable Fuel Standard.

AMERICAN PETROLEUM INSTITUTE EXPECTED TO TAP FORMER BOEHNER AIDE AS CEO: The American Petroleum Institute is expected to name Mike Sommers, who was a top aide to former House Speaker John Boehner, as its next CEO, according to reports Monday.

• Resume, please: Sommers has been president and CEO of the American Investment Council, which represents private equity investors, since February 2016. Before that, he was chief of staff to Boehner, R-Ohio. He was also special assistant to former President George W. Bush at the National Economic Council in 2005. There, he advised the president on agriculture, trade, and food policy.

• Replacing a titan: Sommers, if approved by the API board this week, would replace Jack Gerard, who is retiring as the oil industry’s top lobbyist in Washington. API is the the main trade group representing the oil and natural gas industry.

The group would not confirm plans to hire Sommers.

“The successor to Jack Gerard will be announced at the appropriate time once the committee has completed its work,” a API spokesman said.

NIGERIA’S PRESIDENT: ‘I CAN’T TELL THE US WHAT TO DO’ ON CRUDE OIL: The Nigerian president said Monday that he can’t force the U.S. to buy its crude oil after the boom in U.S. shale oil production has drastically reduced the need for it.

“I can’t tell the U.S. what to do,” Nigerian President Muhammadu Buhari said at a joint press conference with Trump at the White House.

• Nigeria still lucky: “Luckily for us, we have got a market for our crude,” the Nigerian leader said, pointing to continued Asian demand for its light, high-quality oil.

• High hopes for U.S. crude oil imports: However, Buhari said he hopes to find new inroads for Nigerian crude oil from the U.S. chemical sector, which needs lighter, more expensive crude for producing highly refined chemical products.

• Betting on technology: “I hope technology will allow them to use our crude for its quality for petrochemicals, vis a vis [what it is] getting from shale,” Buhari said.

GOT PROXY? The free-market American Council for Capital Formation released a study Tuesday about the world of proxy advisory firms and how their advocacy could be tilting energy policy because of their “activist stance” on environmental issues.

• Heavy reliance: “In this increasingly complex investment and financial landscape, investors rely heavily on the services of proxy advisory firms to support their proxy voting decisions,” said Tim Doyle, the free-market group’s vice president and general counsel, in issuing the study.

• Lack of ‘oversight’: The report, titled “The Conflicted Role of Proxy Advisers,” looks at the history of proxy advisory firms, with special scrutiny aimed at Institutional Shareholder Services and Glass, Lewis & Co., which are “currently operating with minimal oversight, making recommendations that materially impact public companies’ proxy outcomes, operations and disclosure requirements.”

• What is a proxy firm? Proxy firms lend expertise and analysis to help investment decisions, but the report highlights how environmental activism over climate change could be upsetting objectivity within the groups without the correct oversight.

• What’s up on Capitol Hill? The new study “comes on the heels of growing scrutiny of proxy advisory firms by academics, trade associations, and other institutions and individuals, including the Corporate Governance Reform and Transparency Act of 2017,” a bill co-sponsored by Repw. Sean Duffy, R-Wis., and Gregory Meeks, D-N.Y., according to the free-market group.

PJM THROWS COLD WATER ON NUCLEAR, COAL BAILOUT: The nation’s largest grid operator issued a report Monday that could undermine First Energy’s bid for the Trump administration to save its fleet of ailing nuclear and coal power plants.

Closing several First Energy nuclear reactors would pose little harm to reliability and the energy market PJM Interconnection oversees, according to the report released by the federally overseen electricity operator.

• Go ahead and shut down: “Units can retire as scheduled,” PJM said in a summary of the report, which the grid operator will discuss Thursday. It said that transmission upgrades will be in place to help overcome FirstEnergy’s closure of three nuclear plants in the next three to four years.

• First Energy responds: “PJM’s reliability finding was not a surprise, but it was a disappointment,” said Don Moul, First Energy Solutions’ chief nuclear officer. “The results of the PJM reliability study highlight that their review ignores the value that these units offer the grid in terms of fuel diversity and zero-carbon emissions generation.”

• On a different note: Separately, PJM also began a study of the the electricity market’s fuel security, which the coal industry praised.

“We commend PJM, the largest grid operator in the U.S., for recognizing the importance of fuel security because it is the foundation for a reliable and resilient electricity grid,” said Paul Bailey, president and CEO of the pro-coal American Coalition for Clean Coal Electricity.

• Coal is an endangered species in PJM: In the next three years, more than 6,000 megawatts of coal-fired power plant capacity will be lost in PJM as the plants close, the group pointed out.  

• Trump’s Energy Department: The Energy Department also put out a statement Monday night praising PJM’s study into the resilience of the electric grid, but it gave no indication which way it would lean when it came to First Energy’s request.

STATES PICKING UP CLEAN COAL AND RUNNING WITH IT: North Dakota’s energy industry can thank the state legislature’s foresight and tax code for its nation-leading push on clean coal technology.

• Shale oil meets clean coal: The state, which has the most shale oil in the upper Midwest, wants to be able to use carbon capture technology to help it produce more oil through fracking. And state lawmakers have created tax incentives so companies can write off nearly every component of the technology process.

• What’s Cook-ing? The tax credit changes were the brainchild of Republican state Sen. Dwight Cook, who looked at what states like Texas were doing to harvest carbon dioxide to help recover oil from long-abandoned wells–a process called “carbon capture.”

TRUMP SIGNS OFF ON NUCLEAR COOPERATION WITH MEXICO AND U.K.: Trump issued two memorandums Monday night to pursue the peaceful development of nuclear energy with the United Kingdom and Mexico.

Trump is in the midst of negotiating a similar agreement with Saudi Arabia.

200 LOCAL GOVERNMENTS NOW SOLAR READY: Two hundred areas of the country now have the right policies in place to make solar energy easier to use and adopt by states as a reliable energy resource, a collaboration between the Energy Department and the private Solar Energy Foundation announced Tuesday

“SolSmart” designees now include 35 states and the District of Columbia, representing more than 59 million Americans, according to the announcement.

• Who are SolSmart? The latest designees to get the SolSmart stamp of approval range from small towns, such as Fairfield, Iowa, to cities such as Asheville, N.C., and county governments like Suffolk County, New York.

The SolSmart program started in 2016 and is funded by the Department of Energy’s Solar Energy Technologies Office.

ENERGY DEPARTMENT DOLES OUT $24M FOR ‘NEWEST FRONTIER’ OF MARINE ENERGY: Meanwhile, Undersecretary of Energy Mark Menezes doled out $23 million to spur the development of new marine clean energy technologies.

• The latest and greatest: “Marine energy is the newest frontier where we can unleash American innovation to produce more energy more affordably,” Menezes announced Monday at the National Hydropower Association’s Waterpower Week conference in Washington.

The marine technology, in some cases, resembles a wind turbine submerged underwater.

Instead of wind, marine turbines use the constant flow of water on a river or ocean to generate electricity.

• Show me the money: The money hasn’t gone to any companies, yet. That comes later.

The funding will support research and development that supports industry advancement in wave, tidal, ocean and river current technologies.

U.S. BECOMES SECOND MOST ATTRACTIVE RENEWABLES MARKET AFTER CHINA: The U.S. is now the second most attractive market globally for renewables investment after China, Ernst & Young said in a report Tuesday.

China was the top country for the third consecutive year in the ranking of the top 40 renewable markets. U.S. had been third last year, because of concern about Trump’s energy policies promoting fossil fuels.

• Solar tariffs make no dent: The study projects the U.S. renewables market to not be affected by Trump’s tariffs on imported solar panels, as that industry has feared. It expects utility scale wind projects to replace any lost solar investment.

OIL INDUSTRY DRILLS DOWN DEEP INTO SOCIAL MEDIA: The American Exploration and Production Council is beefing up its presence online and on social media.

The group, representing the largest independent oil and natural gas companies, wants to use its new presence online to engage the “public, regulators, and policymakers about the benefits of safe, responsible oil and gas development.”

• Get re-tweeted: It launched a new website Tuesday with social media accounts.

“Our goal is to highlight the economic and national security benefits that independent producers provide our country and consumers, and use our substantive knowledge and expertise to present information in a way that all people can understand and appreciate,” said AXPC President Bruce Thompson.

• Filled with facts: The new website includes fact sheets, issue pages, and infographics to help engage on energy infrastructure, fact-based regulatory reform, technological innovations in the oil and gas industry, and safe, responsible operations to help protect communities, workers, and the environment, the group said.

RUNDOWN

Reuters Boom time comes early to West Texas oil patch

Associated Press America’s air isn’t getting cleaner as fast as it used to

Wall Street Journal Surging fuel demand prompts Marathon Petroleum’s $23 billion deal

Utility Dive Utilities, oil interests clash over EV policy at conservative policy summit

Houston Chronicle Q&A: Scott Angelle, the sheriff of the Gulf of Mexico

Bloomberg Why Vancouver gasoline prices are the highest in North America