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DIVIDED HOUSE DEMOCRATS HOLD UP BIPARTISAN CARBON CAPTURE BILL: House Democrats have been the major sticking point holding up bipartisan legislation boosting carbon capture technologies, and that doesn’t seem likely to change any time soon.
Democratic leaders on the House Energy and Commerce Committee have long pushed for greater control over the bipartisan bill, known as the USE IT Act, that would authorize money for direct air capture research and help to speed permitting for carbon dioxide pipelines. And Democratic lawmakers have also strongly advocated for a larger Energy Department role in the direct air capture program. (Right now, that research program would be housed within the Environmental Protection Agency.)
But those jurisdictional issues may the the least of the roadblocks holding up the USE IT Act, if a hearing on the bill Thursday is any indication.
It’s all comes down to oil: Democrats on the House Energy and Commerce Committee, including Chairman Frank Pallone, raised a host of concerns that the bill in its current form would lead to more oil production. That’s because the primary application for captured carbon at this point is enhanced oil recovery, through which carbon dioxide is injected and stored underground in a process that produces more oil.
That doesn’t sit well with a lot of the Democrats on the committee, especially since they don’t see any guardrails or off-ramps to cap the amount of extra oil production.
“I would like to see it provide a lot more direction on medium to long-term planning for a time when enhanced oil recovery will not be the dominant use of captured carbon,” Pallone said in opening remarks. He and several other Democrats, including environment and climate subcommittee chair Paul Tonko of New York, also said they weren’t confident the EPA is properly monitoring and enforcing the requirements companies must meet for carbon sequestration.
Making perfect the enemy of the good: Republicans, though, say their Democratic colleagues have already let two opportunities to pass the USE IT Act last year slip by. The Senate, for example, passed the USE IT Act last year as part of its version of a defense authorization bill and was ready to put it in bipartisan spending legislation, too.
Republican lawmakers argue Democrats should be more willing to work on bipartisan low-hanging fruit, and by blocking the USE IT Act, Democrats are hamstringing development of a technology that will critically needed to meet any climate goals.
“It’s a bill that we know can make a meaningful difference for our economy and addressing climate risk,” said Greg Walden, the top Republican on the committee.
Even some fellow Democrats urged their colleagues to ease up on their scrutiny and move forward a technology that can reduce emissions of fossil fuels, which will likely continue to be used for decades.
Carbon capture with enhanced oil recovery is “not a panacea,” said Congressman Scott Peters, a California Democrat and a co-sponsor of the bill. “It’s not where we want to end, but it’s a good place to start.”
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CHINA GIVES ON SOME TARIFFS (INCLUDING CRUDE OIL): China said Thursday it would halve some tariffs on U.S. goods as part of its “phase one” trade deal with President Trump, and U.S. oil producers will benefit.
Tariffs on U.S. crude oil will fall to 2.5% from 5%.
As part of the phase one trade deal, China had committed to purchase $52.4 billion of energy products from the U.S. over two years, including crude oil and LNG. China is the world’s largest oil importer, although it is slowing consumption due to the coronavirus outbreak.
It does not appear that China is cutting the 25% tariff it has on U.S. LNG, given the new announcement covers tariffs that were leveled at 10% and 5%, cutting them in half.
RUSSIA BLOCKS OPEC CORONAVIRUS ACTION: Russia has rejected a Saudi-led push to deepen OPEC’s oil production cuts in response to the coronavirus.
OPEC and its ally Russia met over three days this week to discuss possible action in order to boost revenues of exporting nations after the virus sapped China’s demand for crude, and tanked oil prices.
The meetings ended with no agreement, according to the Wall Street Journal, after Russia rejected a Saudi proposal to cut oil production by 600,000 barrels per day. Moscow argued it was too early to assess the oil market effects of the coronavirus.
HEADS UP POTUS — US STILL IMPORTS A LOT OF ENERGY: Data from the Energy Information Administration released Thursday contradicts Trump’s boast of U.S. energy independence during his State of the Union address.
“Thanks to our bold regulatory reduction campaign, the United States has become the number one producer of oil and natural gas in the world, by far,“ Trump said. “With the tremendous progress we have made over the past three years, America is now energy independent.”
While the U.S. recently became a net exporter of oil and petroleum products combined (including motor gasoline and jet fuel), most regions of the country outside the Gulf Coast remain net importers.
In September 2019, the U.S. became a net petroleum exporter for the first time since records began in 1973. But regional trade levels are limited by geography, infrastructure, and local supply and demand. The Gulf Coast has seen the most change in petroleum trade due to strong crude oil production, and improvements to refineries, pipelines, and export terminals.
The U.S., meanwhile, still remains a net importer of crude oil, importing 5.8 million barrels per day and exporting 3 million as of November.
BRACING FOR A DNC CLIMATE FIGHT: A new internal independent council within the Democratic National Committee will be fighting for the most ambitious climate platform possible. That push is likely to put some stress on divisions between the more centrist and more progressive wings of the party over how quickly and aggressively to address climate change.
The eight-member board of Council on the Environment and Climate Crisis is led by Bernie Sanders surrogate Michelle Deatrick. She will lead a listening tour, starting in New Hampshire next week, taking input for a climate policy platform they’ll hope will get the party’s stamp of approval later this year, according to HuffPost.
But the council’s work comes as progressive climate activists have already had several fights with the DNC this cycle over what they say is its lack of attention to climate change. Remember: The DNC refused to have a dedicated climate change debate.
“The time for incrementalism is long past and the longer we wait, the faster we have to move. The house is on fire,” Deatrick told HuffPost.
EQUINOR’S NEW CLIMATE GOAL: The oil major announced Thursday it will aim to slash its net carbon intensity in half by mid-century, a goal that notably includes scope three (or indirect) emissions.
THE FOSSIL FUEL SUBSIDY DEBATE: How much of an impact would ending global fossil fuel subsidies have on climate change? Two groups of scientists debated that very question in dueling articles in Nature on Wednesday.
The genesis of their debate: A study published last year by several scientists in Europe and the U.S. that estimated eliminating all fossil fuel subsidies could slash global carbon dioxide emissions by 0.5 gigatons to 2 gigatons by 2030. That’s equivalent to between 2% and 15% of what’s needed by 2030 to put the world on a path to reach the Paris Agreement goals, they say.
But a second group of scientists is objecting to that report’s claim the emissions cuts from ending subsidies are “unexpectedly small.” The study underestimates the emissions cuts eliminating those subsidies would have and ignores the strong political effect such an action would have on the fossil fuel industry, they argue, saying the original study “can be misleading.”
‘Sweeping statements’ aren’t enough: The report’s authors, though, push back and say their findings should temper activists’ expectations that eliminating fossil fuel subsidies would be a silver bullet to combat climate change. “[I]t is time for social scientists to go beyond listing various negative effects of subsidies which are well documented in the literature and clearly extend beyond economics and instead identify opportunities and pathways for reform,” the authors write.
UTILITIES PARTNER WITH NATURAL GAS ON METHANE EMISSIONS: The utility trade group Edison Electric Institute is partnering with the American Gas Association on a new initiative to reduce methane emissions.
EEI announced the Natural Gas Sustainability Initiative at its annual presentation to Wall Street on Wednesday.
The voluntary effort encourages natural gas companies to report their methane emissions intensity across the supply chain. It provides a standard measurement protocol for companies to calculate their methane emissions.
“This is about establishing some consistency in how methane is reported so we can talk about it as a fuel that we use,” Richard McMahon, EEI’s senior vice president of finance and energy delivery, told Josh.
Utilities still use a lot of gas (they are the largest customer), so, as they seek to fulfill clean energy goals, they have a major interest in the oil and gas industry combating methane emissions.
The utility industry obtains 38% of its power from natural gas, compared to 33% in 2015, as the cleaner fossil fuel helped reduce coal use. EEI member companies have set the goal of reducing carbon emissions from electricity generation 50% by 2030, and 80% by 2050, compared with peak 2005 levels.
“We want to make sure gas remains a viable fuel for us going forward so can achieve the 2030 and 2050 objectives, and part of this is making sure it is accounting for and addressing the methane issue,” McMahon said.
GLOBAL METHANE AT AN ALL TIME HIGH: Methane reached its highest global levels since the 1980s in October of last year, according to preliminary data from the National Oceanic and Atmospheric Administration.
ITS OFFICIAL — RUBIO JOINS SENATE CLIMATE CAUCUS: Florida Senator Marco Rubio is officially joining the Senate bipartisan Climate Solutions Caucus, confirming Josh’s scoop from November.
Fellow Republican Susan Collins is also joining, along with Democrats Debbie Stabenow and Tammy Baldwin.
“Changes in our climate, such as the rise of sea levels, are measurable facts,” Rubio said in a statement. “Many communities in Florida are already dealing with the consequences of these changes and will have to adapt to and mitigate against their impact for decades to come.”
AOC TEAMS UP ON EV CHARGING BILL: Democratic Reps. Alexandria Ocasio-Cortez and Andy Levin of Michigan introduced legislation Thursday that would establish a nationwide network of EV chargers within 5 years.
The bill sponsors want charging stations built along the National Highway System to be able to fully power up EVs in the time it takes to fill up gas and diesel tanks.
The Rundown
Bloomberg Commodity chaos deepens as China LNG buyer invokes force majeure
New York Times How Europe turned into a perfect landscape for wildfires
Reuters Shell boosts crude output in top U.S. shale field to 250,000 bpd
Los Angeles Times Trump’s regional EPA chief in California is suddenly removed from his job
Bloomberg Environment California climate cases against Big Oil go before judges
Calendar
THURSDAY | FEB. 6
2 p.m. 2154 Rayburn. The House Committee on Oversight and Government Reform’s Environment Subcommittee holds a hearing on “The Trump Administration’s Proposal to Undermine Protections from Mercury Air Toxics Standards.”
FRIDAY | FEB. 7
10:30 a.m. 1030 15th St. NW. The Atlantic Council hosts Energy Secretary Dan Brouillette for a fireside chat on international energy cooperation.
WEDNESDAY | FEB. 12
10:30 a.m. 2322 Rayburn. The House Energy and Commerce Committee’s Energy Subcommittee holds a legislative hearing on six bills to improve energy efficiency and storage.
