Harvey exposes striking new energy risks in the age of shale

As Houston and other Texas communities begin taking stock of the deadly devastation left by Harvey, the storm's impacts on the energy sector are being felt far and wide—in ways not seen before, reflecting how dramatically the U.S. energy landscape has changed in the last decade.

The U.S. Gulf Coast energy hub is no stranger to extreme weather. In 2005, Hurricanes Katrina and Rita ravaged the region's refining capacity, production and pipeline operations. The industry learned critical lessons about resilience from the deadly storms, but the years since have seen massive changes to the sector that have altered the U.S. economy, the nation's energy outlook and global markets. It has also brought new risks to all three, some of which are only now being realized.

Consider that when Katrina and Rita hit, the U.S. was the world's largest importer of refined petroleum products and was importing record high volumes of oil. Dozens of projects were also being proposed to import costly liquefied natural gas (LNG). Thanks to the shale revolution, the U.S. is now the leading exporter of refined products and net oil exports have tumbled. We are now a net exporter of natural gas and are shipping large volumes of crude abroad as well.

The growing concentration of energy infrastructure – production, refineries, processing and petrochemical plants, storage terminals, ports and more— in the Gulf Coast creates a vulnerability for the U.S. and the world. Roughly half of U.S. refined product exports go to Latin America, and Mexico depends on the U.S. for half its imports. Harvey's disruptions caused European and Asian petroleum product prices to rise, as traders diverted cargoes to meet needs in the Americas. When the Gulf Coast's energy system takes a hit, it is now felt everywhere. And in the next few years, several new natural gas export facilities will come online, meaning the next disaster could have a big impact on global gas markets as well.

To be sure, there have been some clear resilience improvements since Katrina. Much progress has been made to harden energy infrastructure and improve the resilience of the fuel supply chain. A larger share of oil production now comes from onshore shale wells that are much better protected than large offshore platforms. The increase in supply options and infrastructure routes means markets can more quickly signal supply disruptions and respond to them through price movements.

It will take time to fully assess the impacts of Harvey on the energy system. But policymakers would be well-advised to consider some preliminary lessons:

First, while much progress has been made, much more remains to be done to harden energy infrastructure. This may prove especially true fornew facilities built quickly to respond to the rapid shale boom. And new infrastructure should be built taking into consideration the future impacts of climate change, which is why it was so short-sighted of the Trump Administration to streamline the process for approving infrastructure two weeks ago by eliminating the need to plan for climate change.

Second, well-functioning, interconnected, and flexible markets bolster energy security. Removing barriers to energy trade, like export restrictions, allows markets to function more effectively. Increased pipeline, storage and port capacity, allows the system to respond more flexibly. Policymakers should ensure an efficient infrastructure permitting process.

Third, while price spikes can divert needed supplies and thus resolve shortages, higher prices take a toll on consumers and the broader economy. These costs are not borne by private firms. Government thus has a role to temper price spikes and physical supply disruptions with strategic stocks.In recent years, Congress has sold off large quantities of the U.S. Strategic Petroleum Reserve to fill short-term budget holes, assuming (incorrectly) that declining oil imports cut our vulnerability to supply disruptions. The Trump Administration has proposed selling off half the SPR. We should not get rid of this national security asset, but rather should modernize strategic stocks to match the risks we now face, including swapping a portion of oil for refined petroleum products and ensuring the infrastructure exists to bring both to market.

Fourth, it is clear that even if we import less, our vulnerability to oil disruptions is proportional to our economy's oil-dependence. Continued policy efforts to reduce the economy's oil-intensity will lessen the impacts of future outages and price spikes—a critical reason the Trump Administration's proposal to reduce the scheduled increases in fuel economy standards is unwise.

Finally, Harvey, along with the floods in southeast Asia that killed 1,200, remind us of the importance of acting more urgently to address the threat of climate change, which increases the risks of catastrophic weather events. Hurricanes are not new, of course, but climate change can increase the severity of their impacts, like the extreme rainfall and flooding seen during Harvey. Rising sea levels, warmer waters, and increased moisture in the atmosphere exacerbate the severity of extreme weather events.

The devastation wrought by Harvey reveals many new risks and impacts of the changed U.S. energy landscape. As the Gulf Coast recovers and rebuilds, we should heed the lessons of Harvey to prepare better for next time.

Crude oil prices slip, gasoline surges nearly 7% as Harvey shuts down refineries

Crude oil slid and gasoline futures hit their highest since mid-2015 on Wednesday as flooding and damage from Tropical Storm Harvey shut about a fifth of U.S. refineries, curbing demand for crude while raising the risk of fuel shortages.

Refineries with output of 4.1 million barrels per day (bpd) were offline on Tuesday, representing 23 percent of U.S. production, Goldman Sachs said. Restarting plants even under the best conditions can take a week or more.

"It will be a while before operations can return to normal and the U.S. refining industry is bracing itself for an extended shutdown," Stephen Brennock of oil broker PVM said.

Brent crude futures, the international benchmark for crude trading, was down 55 cents, or 1.1 percent, at $51.45 a barrel by 10:48 a.m. ET (1448 GMT). U.S. West Texas Intermediate crude fell 36 cents to $46.08.

In refined products, price movements were more dramatic. The largest refinery in the United States was shutting because of flooding, sources familiar with operations said.

U.S. gasoline futures rose more than 7 percent above $1.91 a gallon, near the highest level since July 2015, before pulling back to $1.903. Diesel futures advanced by 2 percent to $1.6986 a gallon, having touched their highest since January at $1.7161.

"Crude is always easier to replace than products," said Olivier Jakob, analyst at Petromatrix. "If the refineries stay shut for more than a week or 10 days, it's going to be very problematic."

Harvey made landfall on Friday as the most powerful hurricane to hit Texas in more than 50 years, resulting in the death of at least 17 people.

In addition to shutting oil refineries, about 1.4 million bpd of U.S. crude production has been disrupted, equivalent to 15 percent of total output, Goldman Sachs said.

The impact of the storm overshadowed the latest weekly figures on U.S. oil supplies from the Energy Information Administration.

U.S. commercial crude inventories fell by 5.4 million barrels to a total of 457.8 million barrels in the week through August 25, EIA reported. Analysts had expected a decrease of 1.9 million barrels.

Gasoline stocks rose by 35,000 barrels, compared with analysts' expectations in a Reuters poll for a 1 million barrels drop.

Distillate stockpiles, which include diesel and heating oil, were up by 748,000 barrels, versus expectations for a 846,000 barrels decline, the EIA data showed.

The figures do not reflect the impact from Harvey.

U.S. oil production ticked down by about 12,000 barrels a day to 9.07 million barrels a day, according to preliminary weekly figures.

Energy stocks pummeled again as Harvey dumps more rain on Texas

More rain and flooding on Tuesday added to the Houston area’s woes as the aftermath of deadly Hurricane Harvey, downgraded to a tropical storm, continued to create destruction across a swath of Texas.

Harvey struck at the heart of the U.S. oil industry over the weekend, leaving at least 10 dead, thousands of residents displaced, and scores injured as the floodwaters rose. The effects of the powerful storm and its floodwaters will likely ripple across the energy sector for weeks to come.

Energy stocks fell on Tuesday to become the third worst-performing sector in the S&P 500 index SPX, +0.04%  as markets were also rattled by North Korea’s missile test over Japan late Monday.

Among energy stocks, refiners continued to be an exception, with shares of Andeavor ANDV, +1.06% formerly known as Tesoro Corp., and Phillips 66PSX, +0.01%  showing a rare flash of green on traders’ screens.

Refineries in the areas affected by the hurricane will likely be sidelined for weeks, and gasoline futures have spiked. While downtime is a negative for the refining industry, better margins would more than compensate for that.

Analysts at Barclays said that Harvey knocked down about 2 million barrels a day to 3 million barrels a day of refining capacity, citing government and media reports. About 40% of U.S. petrochemical capacity is offline, alongside more than 500,000 barrels a day of oil production and around 1.5 billion cubic feet equivalent of gas production,

Due to the impact of flooding on labor, logistics, and infrastructure, “onshore and offshore production may not bounce back as quickly as the market is initially assuming,” the analyst said in a note Tuesday.

“Moreover, the delayed impact of deferred completions in (South Texas’ Eagle Ford) may dent 4Q production prospects and will likely be supportive of crude and natural gas prices in the months ahead,” they said.

Shares of refiners that operate mostly outside the Southeast jumped more than 7% Monday, but were giving back some of those gains on Tuesday. Delek U.S. Holdings Inc. DK, +0.48% and PBF Energy Inc. PBF, +0.35%  fell less than 1%, while HollyFrontier Corp. HFC, +1.78%  rose less than 1%.

These would be best positioned given the widening crude differentials and their unaffected operations, analysts at Raymond James said in a note earlier in the week.

Harvey throws a wrench into U.S. energy engine

A hurricane in the heart of the U.S. energy industry is set to curtail near-record U.S. oil production for several weeks, with the impact expected to reverberate throughout the country and across international energy markets.

Harvey hit the Texas shore as a fierce Category 4 hurricane, causing massive flooding that has knocked out 11 percent of U.S. refining capacity, a quarter of oil production from the U.S. Gulf of Mexico, and closed ports all along the Texas coast.

Gasoline futures jumped as much as 7 percent to their highest level in more than two years in early Monday trading in Asia as traders took stock of the storm’s impact.

The outages will limit the availability of U.S. crude, gasoline and other refined products for global consumers and further push up prices, analysts said.

Damage assessments could take days to weeks to complete, and the storm continues to drop unprecedented levels of rain as it lingers west of Houston, home to oil, gas, pipeline and chemical plants. And restarts are dangerous periods, as fires and explosions can occur.

So far, the federal government has not announced if it will release barrels of oil or refined products from the nation’s Strategic Petroleum Reserve (SPR), which holds nearly 680 million barrels of oil.

The SPR was established in the 1970s to prevent supply shocks in the wake of an embargo imposed by several members of the Organization of the Petroleum Exporting Countries (OPEC).

The US, China and Russia are working on a fusion project which could transform energy

At a research facility in the south of France, 35 countries, including the U.S., China and Russia, are working together on a project that could transform the way we think about energy.

Known as ITER – an acronym for the International Thermonuclear Experimental Reactor as well as Latin for 'the way' – the collaboration is constructing a magnetic fusion device known as a tokamak.

The ambition for the project is big. The tokamak has been designed to prove that fusion is a feasible large scale, carbon-free source of energy based on the same – and slightly mind boggling – principle which powers our Sun.

The difference between fission, which is used to produce nuclear energy today, and fusion is significant.

"Fission is taking a very large atom like uranium, you hit it and it splits it apart into two pieces," Mark Henderson, a physicist at ITER, told CNBC's Sustainable Energy. "Fusion takes… two (very) small particles, it fuses together and give(s) off energy," he added.

The potential of fusion is huge. According to the World Nuclear Association, fusion power "offers the prospect of an almost inexhaustible source of energy for future generations."

Henderson said that the Sun was around 15 million degrees Celsius, and that the aim at ITER's tokamak was to generate 150 million degrees Celsius.

"The objective there is (that) you need it to be really hot to take two charged particles and slam them together to fuse," he said. "The two charged particles are both positive. Normally they don't want to touch and you have to give them the energy so that they can actually combine and fuse together."

The ITER facility is currently under construction. European Union countries are responsible for the largest portion of costs, with the remainder shared by China, India, Japan, South Korea, the U.S. and Russia. 

When it is up and running, those behind the project say that it will be the first fusion device to generate "net energy". This term, according to ITER, refers to what happens when the total energy produced during a fusion plasma pulse exceeds the amount of energy needed to power the machine's systems.

This concept of "net energy" is an exciting, tantalizing one. Is fusion, though, just a pipe dream?

"ITER is our countries coming together to answer that question once and for all: can fusion play a role in the future," William D. Magwood IV, director general of the OECD's Nuclear Energy Agency, said.

Magwood IV added that once it was operating, the tests performed at ITER would help to answer that question.

World's largest mining company to quit US shale oil and gas as profit surges

BHP Billiton, the world’s largest miner, reported a surge in underlying full-year profits on Tuesday and said it would exit its underperforming US shale oil and gas business, pleasing disgruntled shareholders who had called for a sale.

The Anglo-Australian mining giant, which is under pressure from US hedge fund Elliott Management to rethink its investment in oil and boost shareholder returns, was buoyed by a recovery in industrial commodity markets.

It generated more cash than even in some years of the mining boom, slashed net debt by nearly $10bn (£7.8bn) to $16.3bn and tripled its final dividend to $0.43 a share.

Underlying profit of $6.7bn was below expectations for $7.4bn, but the market focused on the lower debt and the company’s determination to exit US shale, pushing its shares up 1.2 per cent.

“Net debt looks very impressive ... so the cash looks like it was applied to deleveraging versus extra dividends,” Shaw and Partners analyst Peter O’Connor said.

BHP joined other miners who have boosted payouts in the current earnings season to reward shareholders amid a resurgence in commodity prices. Rio Tinto and iron ore miner Fortescue Metals both paid record dividends, while Anglo American reinstated its dividend.

Facing calls from some shareholders to dispose of the shale business it acquired at the height of the oil boom, the miner said it was “actively pursuing options to exit”.

Chief executive Andrew Mackenzie said the preference would be a small number of trade sales, but refused to give a timetable for quitting the business.

“We certainly have plenty of people interested in taking a look,” Mr Mackenzie said. “Our determination to exit means that we have other ways to exit that do not necessarily depend on ... a competitive set of willing buyers.”

Fund managers including Elliott and Tribeca have been agitating for shale’s divestment, along with higher shareholder returns and the elimination of dual-structured Australia and London stock listings.

Tribeca welcomed BHP’s comments that shale was no longer a core priority for the company.

“That was our approach. We didn’t see it fitting strategically in BHP. We think they can realise value ahead of market expectations for the US onshore business,” Tribeca analyst James Eginton said.

Elliott, which last week raised its stake in the miner’s London-listed arm to 5 per cent, was not immediately available to comment.

BHP chairman Jac Nasser, who retires this year, has conceded the $20bn investment in shale six years ago was a mistake. Analysts have suggested the business could sell for about half that today.

“The shale acquisitions were poorly timed. We paid too much,” Mr Mackenzie said, adding that the company would be careful not to repeat the mistake by acquiring other assets at the top of commodity cycles.

“We have fundamentally changed the way we think about capital allocation, and the process that supports this, to make sure this discipline remains entrenched throughout the cycle,” he said.

Solar energy stocks tanked today, but don't blame the total eclipse, analysts say

Solar energy stocks mostly dropped on Monday as a rare total eclipse blotted out solar power in many parts of the United States, but analysts say this is likely a case of correlation, not causation.

Trading in some solar stocks was slightly above average on Monday, with many of them trading sharply lower. This came as volume in the broader market was relatively low.

Jinkosolar — a maker of solar cells, panels and mounting systems — fell 10 percent. Canadian Solar was also down nearly 10 percent, though the solar module and solutions company was also downgraded by Barclays. The Guggenheim Solar exchange-traded fund was down 2.3 percent.

One theory is that headlines about the loss of solar power during the eclipse may have drummed up interest in the space — and maybe stirred long-held concerns about the reliability of solar power. However, analysts were skeptical about that theory.

"I think it maybe slightly brought people's attention to it. I don't think it's a big event," Ivan Feinseth, chief investment officer at Tigress Financial Partners, told CNBC's "Closing Bell."

If any news item was moving the market, it is more likely the start of a trade case last week that threatens to slap imported solar panels with new tariffs, analysts said. The United States International Trade Commission last week began holding hearings on a petition brought by two U.S. solar panel makers, who are seeking protection from low-cost panels made overseas

.

New tariffs would benefit U.S.-based solar panel makers but could hurt the companies that install them and the utilities that draw power from them, as higher prices for the panels crimp demand.

The petitioners, Suniva and World Solar, began laying out their case last week. Investors may be taking positions in solar stocks based on what they learned in the hearings and how the issue will be resolved, said Bruce Jenkyn-Jones, co-head of listed equities at Impax Asset Management.

"That may be affecting investors' thinking a bit more" than the solar eclipse, he said.

First Solar, a maker of solar panels and the systems that operate them, could be one of the winners if tariffs are imposed, said Joseph Osha, an analyst covering industrial and energy technology for JMP Securities. Shares of First Solar were down more than 4 percent on Monday.

"I do think that's part of what's been moving that company's stock price," he told CNBC's "Closing Bell."

If anything, Monday's solar power outages showed that utilities have become adept at managing the power fluctuations that renewable energy sources such as wind and solar introduce into energy markets, analysts said.

"I think this has been a really good example of how the grid deals with solar intermittency," Osha said. "To be honest, I think the grid's come through with flying colors."

The event was very manageable for transmission and distribution companies because they were able to model out when solar power would go offline and about how much power they would need to produce from other sources, Jenkyn-Jones said.

"The great thing about the eclipse is that it's totally predictable," he explained. "It's actually more reliable to know there won't be any sun in that period."

Report details growth of renewable energy in US

The United States now generates eight times more energy from wind and solar than it did in 2007, a recent report by the Environment America Research and Policy Center said.

The report was co-authored by Frontier Group.

The report analyzes the renewable energy sectors over the past decade in the country. The United States now has enough renewable energy to power 25 million homes, the report notes, and Americans use 10 percent
less energy now than they did 10 years ago.

The report also discusses a 20-fold increase in battery storage of electricity and the growth of the electric vehicle market to almost 160,000 last year.

“Despite anti-science, anti-clean energy rhetoric coming from the Trump Administration and many in Congress, the science is clear – fossil fuels pollute our air, water and land, threatening our health and changing our climate even faster than scientists predicted,” Rob Sargent, energy program director for Environment America Research and Policy Center, said. “The good news is that the progress we’ve made in the last decade on renewable energy, energy savings and technologies such as battery storage and electric cars should give us the confidence that renewable energy can be America’s energy choice.”

According to the report, the United States had enough solar energy to power approximately 120,000 American homes in 2007. Today, it could power 5 million. Wind energy’s share of electricity increased from 0.8 percent of U.S. electricity in 2007 to 5.5 percent in 2016.

“Given the environmental benefits, clean, renewable energy should be the go-to option for businesses, utilities, governments and households across the country,” Sargent said. “It won’t be easy. But we have no choice. Every day, the urgency of our environmental challenges becomes clearer. That’s why we’re ready to work to move America to a future powered wit clean, renewable energy.”

What happens to solar power generators during the eclipse?

As Americans get ready for their first total solar eclipse in 38 years, solar utilities in its path Monday are preparing for the moment their power source will disappear.

With 1,900 solar power plants expected to be fully or partially offline when the sun will be obscured by the moon, electric utilities have backup power sources covering from 1:30 p.m. to 3:40 p.m. to prevent any blackouts.

According to the U.S. Energy Information Agency, only about 17 utility-scale solars are located on the path of the total eclipse, known as totality. Most of those are in eastern Oregon. Hundreds more in North Carolina and Georgia will be at least 90 percent obscured, totaling about 4,000 megawatts of capacity. Another 2,200 to 4,000 megawatts are in areas that will be 80 and 70 percent obscured. (A megawatt is enough electricity to power about 1,000 homes).

Power companies and grid operators feel confident they can meet demand. PJM Interconnection, which operates the grid in 13 states and the District of Columbia, will need to make up 2,500 megawatts of power.  California's grid operator, the California Independent System Operator, will need to dispatch 6,000 megawatts

North Carolina-based Duke Energy, the largest utility in the Carolinas, is expecting solar production to plummet from 2,500 megawatts to about 200 megawatts.

"What we've been doing is running various scenarios of what the weather conditions could be that day," said spokesman Randy Wheeless in an interview. "In the most extreme example would be a very sunny day with low humidity where we are probably getting 2,500 megawatts of solar during that time of the day."

The U.S. has grown more dependent on solar energy in recent years. The country's total solar energy capacity has increased from just 5 megawatts in 2000 to 42,619 megawatts last year, according to the North American Electric Reliability Corporation. Demand is expected to remain strong as prices for solar panels continues to drop.

Though California isn't in the path of totality, it will experience the biggest impact from the eclipse, which is expected to affect about 75 percent of the state's solar capacity in northern California and about 60 percent in southern California. California ISO, which operates much of the state's power grid, said it had enough energy stored to make up for the lost production during the eclipse.

"I am confident in the technology of our market and grid, and in the expertise and abilities of our staff," said Steve Berberich, CAISO's chief executive.

Oil rises more than one percent on bets U.S. inventories falling

Oil prices rose on Thursday as renewed attention was put on U.S. oil stockpile declines after an industry report suggested oil inventories at the Cushing, Oklahoma hub were declining.

Inventories at Cushing, the delivery hub for U.S. crude futures, declined more than a million barrels in the week to Aug. 15, traders said citing estimates from energy industry information provider Genscape.

In the latest week to Aug. 11 for which government data was available, Cushing inventories increased nearly 700,000 barrels.

Inventories in the United States are closely watched as the market grapples with a global supply glut.

Brent crude LCOc1 settled up 76 cents, or 1.51 percent at $51.03 a barrel. U.S. light crude CLc1 was 31 cents, or 0.66 percent, higher at $47.09 a barrel.

Both benchmarks fell more than 1 percent on Wednesday despite data showing that U.S. inventories last week fell the most in nearly a year. [EIA/S]

Energy Information Administration (EIA) data showed commercial U.S. crude stocks C-STK-T-EIA have fallen by almost 13 percent from their peaks in March to 466.5 million barrels. Stocks are now lower than in 2016.

U.S. oil output, however, is rising fast as shale producers take advantage of a recent increase in prices.

U.S. crude production rose 79,000 barrels per day (bpd) to over 9.5 million bpd last week, its highest level since July 2015, and 12.8 percent above the most recent low in mid-2016. C-OUT-T-EIA

"Yesterday, the production number trumped the storage number, but it was still a draw of 9 million," said Bob Yawger, director of energy futures, energy futures at Mizuho. "There are some weaker shorts that are probably sold out and they want to get out."

Rising U.S. output has been undermining efforts by the Organization of the Petroleum Exporting Countries and other producers including Russia to drain a global fuel glut.

They have promised to restrict output by a total of 1.8 million bpd between January this year and March 2018.

William O'Loughlin at Rivkin Securities said that if inventory declines continued at the current pace, U.S. stocks would fall below the five-year average in two months.

"The pace of the declines indicates that OPEC production cuts are having an effect, although the current oil price suggests that the market is skeptical about the longer-term prospects for rebalancing of the oil market," he added.

Brent prices are down almost 12 percent since OPEC and its allies began cutting production in January.

Husky Energy to buy refinery in Wisconsin for $435M US

A $435-million US deal to buy a refinery in Wisconsin will allow Husky Energy to match processing capacity with its growing heavy oil output while postponing a planned asphalt plant expansion in Alberta.

The 50,000-barrel-per-day refinery in Superior, Wis., is being purchased from Calumet Specialty Products Partners of Indiana in a deal expected to close in the fourth quarter, the companies said Monday.

"Acquiring the Superior refinery will increase Husky's downstream crude processing capacity, keeping value-added processing in lockstep with our growing production," Husky CEO Rob Peabody said in a statement.

Husky's heavy oil production from Alberta and Saskatchewan is about 120,000 barrels per day, but that will increase by about 40,000 bpd as new projects come on stream over the next three years, spokesperson Kim Guttormson said.

The Superior refinery deal will grow capacity to refine heavy oil to about 205,000 bpd, she said. Overall downstream capacity, including light and medium grade oil refining, is to rise to about 395,000 bpd, with 275,000 bpd in the United States.

Husky owns a heavy oil upgrader and asphalt refinery in Lloydminster, on the Alberta-Saskatchewan border, as well as a light oil refinery in Lima, Ohio, and a 50 per cent stake with partner BP in a heavy oil refinery in Toledo, Ohio.

The Superior refinery produces about 9,000 bpd of asphalt, 17,500 bpd of gasoline and 10,900 bpd of diesel, as well as heavy fuel oils.

Husky has been contemplating an expansion of its asphalt refinery in Lloydminster to double production to about 30,000 bpd of asphalt.

A decision on the expansion, estimated to cost $800 million to $900 million, was expected next year, but will now be delayed until after 2020.

Analysts gave the acquisition passing marks Monday for its effect on Husky's ability to capitalize on growing asphalt demand from increased infrastructure spending across North America.

Guttormson said asphalt is transported by rail and can easily be moved across the border to where it is in demand.

Husky plans to retain the approximately 180 workers at the refinery, which has direct pipeline connections to the company's transport terminal in Hardisty, Alta.

Sierra Club sues U.S. Energy Department over power grid study

Environmental group the Sierra Club sued the U.S. Energy Department on Monday in hopes of forcing it to reveal the groups it has consulted in conducting an eagerly awaited study on the electricity grid.

It was the latest push-back on the department’s study from backers of renewable energy such as wind and solar power who fear it could be used by the Trump administration to form policies that could slow growth in the industry.

Energy Secretary Rick Perry, who commissioned the 60-day study in April, ordered his department to see whether "regulatory burdens" by other administrations including former president Barack Obama’s had forced the premature retirements of so-called baseload power plants, fired by nuclear and coal. Perry said those policies potentially put at risk the reliability and security of the national power grid.

The Sierra Club, in the suit filed Monday in the U.S. District Court for the Northern District of California, said the department had ignored a Freedom of Information Act request it filed in May. That request sought the release of communications between staff and outside groups it had consulted, in the belief that the Energy Department had mostly relied on fossil fuel backers.

"We want to make sure that when this study is finally released, that the public and policy makers fully understand how it went about doing it, who they were influenced by, and whose views they did not take into consideration," said Casey Roberts, a Sierra Club lawyer.

The Energy Department did not immediately respond to a request for comment. It had initially said the report would be released in July, but the release has been delayed. A draft of the study, conducted by a contractor who included contributions from staff across the department, said that intermittent renewable power has not harmed the grid, was leaked to the media last month.

But an energy department spokeswoman said then that the draft was "outdated" and had not been reviewed by political or career staff, leading Sierra Club and others to believe the final draft could favor coal and nuclear.

Several lawmakers with strong renewable power output in their states have said that the Energy Department had already completed long-term studies of renewable power's impact on the grid that concluded there has been no harm. Senator Chuck Grassley, a Republican from Iowa, raised concerns in a letter sent to Perry in May that the secretary had commissioned a study that appeared “geared to undermine” the wind energy industry.