The Trump Vs. Newsom Energy Showdown Is Just Getting Started

SACRAMENTO, California — President Donald Trump isn’t satisfied with simply setting national energy policy. His administration wants to set the California agenda too.

The year since Trump declared a national energy emergency and thrust the U.S. into an oil-all-the-way strategy has been full of examples of his administration using the many tentacles of the federal government to delve into Golden State matters. Think: axing funding for offshore wind port development in Humboldt County and smashing the state's hydrogen hub.

But at the same time that Trump's pursuing an increasingly muscular foreign interventionism, his administration is going ever deeper into state policy. In the past month alone, it's intervened in an offshore oil pipeline, a hydropower dam and two local governments' natural gas bans.

Trump's two-pronged offensive makes sense: It’s allowed the administration to push its fossil fuels-first agenda while racking up wins against Gov. Gavin Newsom, a political adversary and stand-in for Democrats' energy priorities writ large.

“There are specific areas where California plays a direct and significant role as a state in trying to undermine the overall energy dominance agenda for the nation,” Rich Goldberg, who previously served as a senior counselor to the Trump administration’s National Energy Dominance Council, wrote in a text message. “If a state like California has to import oil from overseas because of policies restricting oil off its coast, that's a fight worth taking on.”

Last month, federal pipeline administrators wrested oversight of the pipeline system owned by oil producer Sable Offshore Corp. from the California Office of the State Fire Marshal, and then promptly greenlighted the company’s restart plan.

The feds still haven't responded to the California Coastal Commission's letter asserting its authority and asking to review Sable’s application materials, according to Coastal Commission spokesperson Joshua Smith.

In a statement, White House spokesperson Taylor Rogers criticized the Golden State’s reliance on oil imported from other countries.

“Not only do California’s energy policies result in astronomically high prices, but they also pose a national security risk,” Rogers said.

The Trump administration is also wading into Pacific Gas & Electric’s plan to dismantle a hydroelectric project and two dams on Northern California’s Eel River. That one is more about water than power, with Agriculture Secretary Brooke Rollins taking the lead.

"The heavy hand of California’s state government has gone unchecked for decades," she wrote in an op-ed in the Mendo Voice, a local Northern California paper, last month.

To be clear, the state of California has little to do with the dams. PG&E says it wants out because maintaining the century-old hydroelectric project associated with the dams is no longer economical, and applied last year to the Federal Energy Regulatory Commission to decommission the project. Last month, Rollins formally filed a notice to intervene in the regulatory proceeding and urged FERC to deny the application. PG&E is hoping for a final decision by 2028.

Another place the feds and California are poised to scrap is over the Ivanpah solar power facility in the Mojave Desert. The plant’s owners, PG&E and the Department and Energy all say that the facility’s power is just too pricey to keep it operational.

But the California Public Utilities Commission rejected the contract termination agreements last month that PG&E negotiated with the plant’s owners under the guidance of the DOE, citing concerns that the Trump administration’s hostility to renewable energy will hamper the state’s ability to meet rising demand for power.

At the time, Greg Beard, a senior adviser in the DOE’s Office of Energy Dominance Financing, vowed to appeal the decision. The DOE has a dog in the fight since it issued three loan guarantees for $1.6 billion to finance Ivanpah in 2011. The agency’s response is still brewing, according to spokesperson Theresa Garner, who said in a statement that federal officials have been working closely with the parties involved.

“DOE is evaluating next steps,” she said in a statement.

Meanwhile, the U.S. Justice Department last week sued two Northern California local governments over gas hookup ordinances that city officials say they weren’t even enforcing.

Jon Wellinghoff, who served on the Federal Energy Regulatory Commission under presidents George W. Bush and Barack Obama, said in an interview that the antagonism between the California and federal governments jacks up the risk on private energy companies interested in investing in the state, especially in the renewable sector.

“They’re going to look at a need for a higher risk premium to ultimately invest in those types of projects when you have this conflict going on between state and federal interests,” Wellinghoff said. “Obviously we can get a lot less done and it’s a lot less efficient if the two governments are working against each other as opposed to working for each other.”

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