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Rebecca Zisser / Axios

The American Petroleum Institute, the nation's biggest and most influential lobbying group for the oil and natural gas industry, is fighting nuclear power subsidies across the U.S., poised to oppose any efforts to expand renewable electricity, and telling the Trump administration that its study on the power grid better not hurt natural gas in an effort to help coal and nuclear energy.

Why it matters: The entry of API into the debate over power generation is a turning point in an industry long dominated by coal and nuclear energy. It's also a shift at an organization traditionally known for focusing on drilling and the transportation sector. API's members, including Exxon Mobil Corp., and Royal Dutch Shell, are increasingly producing natural gas, and now the group is fighting to make sure that fuel becomes America's dominant source of electricity.

A decade ago, coal powered almost 50% of U.S. electricity. By last year, that figure had dropped to 30%, and natural gas has made up most of the difference. Here's an Axios card deck primer on America's electricity sources.

Fueled by the oil and natural gas boom over the last decade, API began moving into the electricity business in late 2015, when it acquired another trade group, America's Natural Gas Alliance, whose sole mission was to pump up demand for natural gas. API's broader mission has come into clearer focus over the last few months in three ways.

Trump's grid study

The Energy Department is set to issue as soon as this week a study looking at the electric grid, with a focus on what the government could do to stop coal and nuclear plants from shutting down. Energy Secretary Rick Perry talks a lot about how environmental rules and renewable subsidies are hurting coal and nuclear, but the biggest driver is the bounty of cheap natural gas in stagnant electricity markets. That puts API, a typical ally of the new administration, in an ironic position.

"We certainly want to make sure there isn't some inadvertent message coming out of this study that maybe we should be worried about having too much natural gas," said Marty Durbin, executive vice president and chief strategy officer at API.

Starting last year, API began hearing concerns from utility officials and others about fuel diversity. "To us that was a buzzword to say don't be too dependent upon natural gas," Durbin said. Which is exactly what the coal industry is doing. "We have not beat up on natural gas I would say, but we certainly have pointed to an over-reliance on the fuel," said Paul Bailey, president of the American Coalition for Clean Coal Electricity.

Nuclear war

Having largely won the battle against coal, oil and gas producers are now targeting nuclear.

Since late last year, API has been fighting efforts in a handful of states to keep financially struggling reactors from shutting down before their operating licenses require. As reactors shut down, they're being replaced mostly by natural gas. Illinois and New York have already issued policies keeping some reactors running despite API's efforts, but the group says it's been successful so far in keeping proposals at bay in Ohio, Pennsylvania and Connecticut.

In response to criticism that API is blatantly grabbing market share from nuclear power, Durbin replied: "It's nuclear that is very transparently trying to keep competitors away."

John Kotek, a vice president at the Nuclear Energy Institute, a trade group for nuclear-power companies, said nuclear provides carbon-free electricity and diversifies the grid in a way other fuels, including natural gas, don't.

Eyeing renewables

Another battle is on the horizon between API and renewable companies.

The oil group has done internal modeling concluding the five-year extension of tax credits for wind and solar companies, which Congress passed at the end of 2015, would cut demand for natural gas by 2.4 billion cubic feet a day in 2020. That's a little under 9% of the daily amount of natural gas used for electricity in the U.S. last year.

API doesn't currently have plans to lobby against the existing tax deal or to try to get states to repeal mandates that require renewable energy, which has been one of the biggest drivers for wind and solar over the past decade.

"But as states are looking at expanding or put new ones in place," Durbin said, "yes, we would want to engage in those conversations."

Go deeper

34 mins ago - World

Biden freezes U.S. arms deals with Saudi Arabia and UAE

Trump struck several large arms deals with Mohammed bin Salman (L) and Saudi Arabia. Photo: Kevin Dietsch-Pool/Getty Images

The Biden administration has put on hold two big arms deals with Saudi Arabia and the United Arab Emirates which were approved in the final weeks of the Trump administration, a State Department official tells Axios.

Why it matters: The sales of F-35 jets and attack drones to the UAE and a large supply of munitions to Saudi Arabia will be paused pending a review. That signals a major policy shift from the Trump era, and may herald sharp tensions with both Gulf countries.

Dan Primack, author of Pro Rata
1 hour ago - Podcasts

Robert Downey Jr. launches VC funds to help save the planet

Robert Downey Jr. on Wednesday announced the launch of two venture capital funds focused on startups in the sustainability sector, the latest evolution of a project he launched two years ago called Footprint Collective.

Between the lines: This is a bit of life imitating art, as Downey Jr. spent 11 films portraying a character who sought to save the planet (or, in some cases, the universe).

DHS warns of "heightened threat" because of domestic extremism

Supporters of former President Trump protest inside the U.S. Capitol on Jan. 6. Photo: Roberto Schmidt/AFP via Getty Images

The Department of Homeland Security on Wednesday issued an advisory warning of a "heightened threat environment" in the U.S. because of "ideologically-motivated violent extremists."

Why it matters: DHS believes the threat of violence will persist for "weeks" following President Biden's inauguration. The extremists include those who opposed the presidential transition, people spurred by "grievances fueled by false narratives" and "anger over COVID-19 restrictions ... and police use of force[.]"