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SALES PITCH: President Joe Biden is traveling to Howell, Michigan this afternoon to make the case for the bipartisan infrastructure bill and his larger Build Back Better agenda.
The president will deliver a speech at the International Union of Operating Engineers Local 324 training facility.
Expect Biden to tout the benefits of the bipartisan infrastructure bill, which already passed the Senate, but is being held back in the House by progressives who want the measure linked with the reconciliation package.
If the bill were to pass, Michigan should expect to receive $110 million over five years to support the expansion of an electric vehicle charging network in the state, the White House said in a memo issued to reporters.
The state would also get $1.3 billion to improve water infrastructure, $1 billion to improve public transportation options, and would also benefit from a $50 billion national investment in resilience.
Before he left for the trip, Biden was planning to meet with a group of centrist House Democrats this morning to determine how to pass his larger social and climate spending bill, recognizing “that this package is going to be smaller than originally proposed,” according to White House Press Secretary Jen Psaki.
Yesterday, Biden met with a large group of liberal House Democrats to convince them to trim the package from $3.5 trillion to somewhere closer to $2 trillion.
Party centrists Joe Manchin and Kyrsten Sinema have slammed the brakes on the plan in the Senate, calling for a lower price and major policy changes in exchange for their critically needed support.
But liberal climate activists are warning Democrats to preserve the core climate provisions of the original package — led by the Clean Electricity Performance Program and green energy tax credits — and more, including a fee on methane, funding for electric vehicles, and creating a Civilian Climate Corps.
Jamal Raad, executive director of Evergreen Action, a group with ties to the White House, referenced a memo released by Senate Majority Leader Chuck Schumer in August finding Democrats’ climate and infrastructure plans being pursued this fall have the potential to nearly fulfill Biden’s Paris Agreement pledge to cut U.S. emissions in half by 2030
“We need every piece to get to 45% or else President Biden will come to the U.N. climate conference in Glasgow empty-handed and not be the leader he needs to be on the global stage,” Raad told me. “There is no room for error.”
One way Democrats and the White House are reportedly considering shrinking the size of the package is limiting spending to a 5-year period, rather than 10.
Raad said addressing climate change and meeting Biden’s emissions reduction target for 2030 requires a 10-year spending commitment.
“Climate is not something you can shrink to paying over five years,” he added.
Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writer Josh Siegel (@SiegelScribe). Email [email protected] for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.
OIL PRICES HIT SEVEN-YEAR HIGH AS OPEC+ STANDS PAT: The benchmark U.S. oil price hit the highest level in seven years this morning after OPEC and its allies decided to reconfirm existing plans for a modest rise in production in November instead of feeding a tight market with more supply.
Despite rising demand for energy across the world, OPEC+ said it would raise production by a modest 400,000 barrels a day next month, the same level agreed to under a deal reached in July.
Oil prices have climbed on the news, with West Texas Intermediate leaping to about $79 a barrel and Brent, the international benchmark, approaching $83 per barrel.
OPEC+, in a statement, did little to explain its rationale for keeping plans intact. But analysts said the group of oil producing nations has a more cautious outlook on the chances of demand outpacing supply in the months ahead due to uncertainty around the pandemic.
“Much uncertainty remains in terms of potential COVID-related demand destruction, power generation fuel switching to fuel oil due to high gas prices and the possible return of incremental supply from Iran and Venezuela,” the research group ClearView Energy Partners said in a note.
RISK OF HIGH ENERGY COSTS THIS WINTER? Homeowners in the United States might also be in for a costly winter, although not to the same extent as countries in Europe.
Oil and natural gas prices continue to climb higher in the U.S. as supply struggles to keep up with demand, which will only increase as the temperatures begin to drop across the country and heaters begin to be switched on in houses, the Washington Examiner’s Zachary Halaschak reports in a story for our magazine this week.
The price of natural gas used to heat homes across the country and produce electricity has skyrocketed over the past year, growing by about 180%. The oil price has also significantly risen, with the cost of crude more than doubling since this time last year.
CHINA POWER SHORTAGE THREATENS SUPPLY CHAIN DISRUPTION: The consequences of China’s power shortages are leading to forecasts of additional obstacles to a global economic recovery, with the disruptions to the world’s second-largest economy expected to raise prices and compound existing supply chain issues, the Washington Examiner’s Jeremy Beaman reports.
China’s manufacturing purchasing managers’ index, an indicator of the general health of the sector, contracted to 49.6 for the month of September, the lowest since February 2020, when the coronavirus pandemic was beginning.
The country’s largest industrial power users, especially manufacturing operations, were the first victims of rationing as supplying power to residences took priority, according to Lauri Myllyvirta, lead analyst for the Centre for Research on Energy and Clean Air.
China is a significant global producer of everything from machinery and plastics to earth metals, so any disruption to industry of this scale, especially one affecting its power sector, is of significant import to the world.
“It will put pressure on prices and will affect the supply chains,” Myllyvirta told Jeremy.
What’s causing the shortage? The simple explanation is that the domestic energy supply has been unable to meet an uptick in demand fueled by the global recovery, but Myllyvirta implicated Chinese power regulators in particular for failing to be dynamic enough with price controls — not a shortage of coal, on which the Chinese grid is heavily reliant.
“Essentially, the regulator put pressure on coal mines to keep prices low with pressure on generators to generate at a low price, and that just made it uneconomic to keep purchasing coal and keep running the power plants,” he said. “And now, when global energy prices have shut up, it just brought things to a head.”
CONSERVATIVE GROUP CAMPAIGN FOR NATURAL CLIMATE SOLUTIONS: The Conservation Coalition, the educational arm of the American Conservation Coalition, is launching an ad campaign to highlight the importance of natural climate solutions, including planting trees, restoring wetlands, and using sustainable farming practices.
The Rooted in America campaign by the conservative youth environmental group includes a nearly $100,000 digital advertising buy.
The group argues natural solutions are the most popular climate policy in America, with 90% of people supporting planting 1 trillion trees.
The National Academy of Sciences has estimated that natural climate solutions can account for 37% of emissions reductions through 2030 needed to keep global warming below 2 degrees celsius.
The Rundown
RUNDOWN
Bloomberg Kerry lines up pledges to scrub emissions from carbon-heavy industries
Washington Post In California oil spill, pipeline critics find a way to push Biden
New York Times How do thousands prepare for a climate summit? With difficulty.
New York Times Energy prices spike as producers worry over pandemic and climate
Calendar
WEDNESDAY | OCT. 6
10 a.m. 406 Dirksen. The Senate Environment and Public Works Committee will hold an oversight hearing to examine the response by the U.S. Army Corps of Engineers to Hurricane Ida.
