The warning is especially notable given the broader industry has sought to work with Biden on issues such as methane regulation and electrifying transportation.

Reliability and affordability concerns: The group says its members are on track to cut emissions 80% by 2050. But Kuhn warned that meeting the timeline envisioned by Biden, which is faster than any state policy — including California — could lead to reliability problems and rate increases for customers. If electricity prices increase, he added, it would jeopardize “political acceptance” of plans to aggressively reduce emissions.

Kuhn cautioned that nuclear energy and natural gas will both be needed to keep the lights on and maintain grid stability as more renewables are brought online. He also called for streamlining the process of approving and building transmission lines that can deliver wind and solar from rural areas to cities.

And while the bipartisan energy package including in year-end spending legislation offered a “downpayment” on nascent low-carbon technologies such as advanced nuclear and carbon removal, there’s not nearly enough investment yet to bring those to fruition quickly, said Brian Wolff, executive vice president of public policy and external affairs at EEI. Power companies see those technologies as the ones they’ll need to eliminate the last 10% to 20% of their emissions.

“When technologies are brought to commercialization, initially, they’re always still very expensive, and it takes a while for those technologies to penetrate within the economy,” said Wolff.

“The biggest general threat is that they don’t understand our industry,” said Phil Moeller, executive vice president of EEI’s business operations group and regulatory affairs and a former FERC commissioner.

SPEAKING OF FERC — READ ON FOR THE LATEST FROM THE NEW CHAIRMAN.

Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Josh Siegel (@SiegelScribe) and Abby Smith (@AbbySmithDC). Email [email protected] or [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.

MORE…New FERC chairman weighs in: FERC, which oversees wholesale power markets, could play a key role in helping Biden achieve his clean power pledge. While the commission is independent, Biden recently transitioned an ally to chairman, Democrat Richard Glick.

Glick, in a call today with the media outlying his priorities, said he wants to improve the process of siting and incentivizing transmission lines, break barriers to new technologies, accommodate state clean energy policies, and reform the process for approving fossil fuel infrastructure to consider their effect on climate change.

Glick deferred on commenting when Josh asked about the feasibility of Biden’s 2035 100% carbon-free power target. But he observed that “everytime I have been involved on electricity issues where someone is saying it never can be done, whenever someone sets a target, we always exceed the target.”

NEW MEXICO LOSING RIGS FROM BIDEN DRILLING ORDER: New Mexico, the biggest producer of oil and gas on federal lands, is seeing rigs move to private lands in neighboring Texas because of Biden’s restrictions on leasing and permitting.

A state official under Democratic Gov. Michelle Lujan Grisham wrote a letter to Biden’s Interior secretary nominee Deb Haaland, obtained by E&E News, saying the order “has resulted in on-the-ground uncertainties that undermine our ability to safeguard New Mexico’s economy and environment.”

Up until now, Grisham had been careful not to criticize Biden’s moves to pause oil leasing on public land and slow the approval of drilling permits as she balances her interest in combating climate change with her state’s economic reliance on federal oil and gas production.

But Grisham is now following officials representing other states reliant on oil output from federal lands, including Wyoming, that have complained about uneven enforcement of the Biden orders.

What’s happening on the ground: The letter specifically cites “confusion” over an Interior Department edict that temporarily puts decisions on new drilling permits, leases, and rights of way in the hands of top agency officials, instead of being reviewed by field offices across the country.

The order includes an exemption that “this does not limit existing operations under valid leases.”

“Additional approvals are often required even when operators have a valid lease and permit to drill. Operators have reported many examples of approvals not moving forward that appear to fall under these exceptions,” the letter said.

New Mexico asks for written guidance from Interior clarifying its order.

BUT OVERALL US PRODUCTION COULD BE UNHARMED: Biden’s leasing pause and drilling restrictions won’t have a “material impact on U.S. production in the short term,” the International Energy Agency projected today as part of its monthly oil market report.

Even if there’s some shifting in drilling activity between states, onshore and offshore producers have banked a large inventory of leases in anticipation of Biden’s changes.

Producers have also secured inventories of drilled but uncompleted wells that “will allow them to sustain current rates of activity for several years,” IEA said.

Still waiting for demand recovery: World oil demand won’t all the way recover from last year’s pandemic-fueled crash, as the rebalancing of the market remains “fragile,” the IEA added in its report.

Demand is set to grow by 5.4 million barrels per day in 2021 to 96.4 million barrels p/d, which represents a recovery of about 60% of the output lost to the pandemic.

Further growth depends on progress in distributing and administering vaccines, and the easing of travel restrictions in major economies, IEA said.

Still, the prospect for tighter oil markets has caused crude prices to reach their highest point in a year, with Brent breaching $60 per barrel.

PERMIAN’S FLARING PROBLEM: Despite a slowdown in production during the pandemic, shale operators in the Permian Basin, the largest U.S. oil field, have failed to restrain flaring, according to a report yesterday from the Environmental Defense Fund.

EDF conducted a four-week survey of flare sites that found roughly 5% of flares were unlit, meaning they were releasing methane directly into the air, while another 5% were only partially lit.

Flaring, the practice of intentionally burning natural gas, has become a significant contributor to greenhouse gas emissions, primarily emitting carbon, but some of the gas can escape as more potent methane.

“This year of data makes it painfully clear that flaring performance has remained abysmal through the industry’s highs and lows,” said Colin Leyden, EDF’s director of regulatory and legislative affairs for Texas.

Industry vows to do better: EDF released the report on the same day that the Texas Methane & Flaring Coalition, a trade group representing Permian operators, pledged to eliminate routine flaring by 2030. As Bloomberg notes, the Texas Railroad Commission, the state’s oil regulator, has signaled it may address flaring after years of liberally granting permits allowing the practice.

BIDEN AND XI ‘EXCHANGE’ CLIMATE VIEWS: Biden’s first call with China’s president Xi Jinping yesterday suggests he intends to maintain pressure on Beijing over human rights and market access issues while holding out the possibility of working together on climate change.

The readout of the call, interestingly, stopped short of saying the U.S. and China would cooperate on climate change.

The two leaders “exchanged views on countering the COVID-19 pandemic, and the shared challenges of global health security, climate change, and preventing weapons proliferation,” the White House said of the call.

China task force unveiled: Relatedly, Biden yesterday ordered a Pentagon-led review of China strategy as his administration examines the military and national security threat posed by the Asian power.

INTERIOR UNDOES BERNHARDT’S LWCF RESTRICTIONS: Biden’s Interior Department announced today it rescinded a late order from the Trump administration imposing restrictions on how money could be spent through the popular Land and Water Conservation Fund.

The order issued in November by former Interior Secretary David Bernhardt would have granted veto power to state and local governments over federal land purchases through LWCF, a conservation program intended to fund improvements to national parks, forests, wildlife refuges, and other public areas.

SHELL SAYS IT HAS HIT PEAK OIL: As part of its net-zero strategy unveiled this morning, the European oil giant says its oil production peaked in 2019 and will decline by around 1%-2% each year as it moves to lower-carbon energy.

Shell’s plans also include new targets to reduce its carbon intensity, by at least 6% in the next two years, by 20% by 2030, and by 100% by 2050. The oil company said it expects its total carbon emissions will have peaked in 2018.

The oil giant also plans to expand its development of carbon capture, adding 25 million tons of capture and storage capacity by 2035, and nature-based carbon removal. The company anticipates using nature-based removal to offset around 120 million tons of carbon a year by 2030.

In addition, Shell is pledging to diversify its business away from oil, with goals to sell 560 terawatt hours a year of electricity by 2030 and ramp up its electric vehicle charging units. Some environmental groups, however, are critical of Shell’s reliance on carbon capture and carbon removal, suggesting those approaches are a way to avoid tackling the direct emissions of its products.

BANK OF AMERICA RAISES CLIMATE GOALS: The bank set a number of new near-term climate targets today as part of its goal to reach net-zero emissions in its financing activities, operations, and supply chain by 2050, including achieving carbon neutral operations and buying 100% zero-carbon power by 2030.

The 2030 targets also include goals to reduce “location-based” greenhouse gas emissions by 75% and cut energy and water use each by 55%, the bank announced this morning.

Much of the bank’s new targets, however, deal with its direct footprint, rather than the carbon emissions of the companies it invests in. Bank of America did say it will establish “interim science based emissions targets” for its higher-emitting investment portfolios, including energy and power companies, but it didn’t provide a timeline for doing so.

TRADE COMMISSION BANS CERTAIN LITHIUM-ION IMPORTS: The International Trade Commission faulted battery maker SK Innovation for stealing trade secrets from rival battery maker LG Chem, barring imports of SK’s battery cells into the U.S. for 10 years.

Yesterday’s decision could complicate Biden’s plans to rapidly expand vehicle electrification, as SK Innovation was supplying batteries for Ford’s electric F-150 and for Volkswagen electric cars and had plans to manufacture batteries in a new multi-million dollar facility in Georgia. The ITC ruling, however, gives Ford a four-year grace period and VW a two-year grace period to continue using SK Innovation’s batteries before they must find a new supplier.

SK Innovation can turn to Biden to veto the ITC’s decision, though energy analysts such as James Frith, who heads energy storage at Bloomberg NEF, said the grace period for the automakers makes it less likely Biden will issue a veto.

“We have serious concerns about the commercial and operational implications of this decision for the future of our EV-battery facility in Commerce, Georgia,” SK Innovation said in a statement. The company added the ruling “could have a serious adverse impact on President Biden’s policies to combat climate change and expand the electrification of the US auto fleet in coming years.”

SCIENTISTS DETAIL HEALTH DAMAGES FROM TRUMP ROLLBACKS: The Trump administration’s deregulatory actions led to an increase of more than 22,000 annual environmental and occupational safety-related deaths since 2016, according to a sharply critical report released this morning by the British medical journal The Lancet.

The nearly three dozen scientists who co-authored the report say the Trump administration’s “abrupt halt to control” fine particulate matter pollution was likely a “major driver” of the increased deaths. The biggest increases, they added, occurred in Midwestern and southern states where fossil fuel production is prevalent.

The scientists said the Trump administration’s “most far-reaching policy rollback” was changes to how federal agencies conduct environmental reviews under the National Environmental Policy Act. They also tallied 29 actions relaxing air pollution standards and 20 actions lifting restrictions on fossil fuel production.

APPEALS COURT WON’T REHEAR TEENS’ CLIMATE CASE: The Ninth Circuit Court of Appeals won’t take up a novel climate case brought by a group of (mostly) teenagers again, leaving the plaintiffs to head to the Supreme Court if they want another shot at their case heading to trial.

The full court decided yesterday not to rehear the case after a three-judge panel dismissed the case in a split ruling early last year. The two-judge majority in the January 2020 ruling “reluctantly concluded” the federal courts weren’t the right venue for the young plaintiffs to make their claims.

The lawsuit, which was brought by the 21 youth plaintiffs in 2015 against the Obama administration, argues the federal government violated their constitutional right to a livable climate by taking actions that supported fossil fuels. It also brought public trust claims, arguing the government was neglecting its responsibility to hold lands, waters, and wildlife in trust for its citizens.

The youth plaintiffs are already planning to take their claims to the Supreme Court, even as allies warn the more conservative bench could use the case as an opportunity to make it harder for environmental litigants to bring climate cases. Bloomberg Law’s Ellen Gilmer has the details on what could be next for the lawsuit.

The Rundown

E&E News Gina McCarthy: Expect more climate executive orders

New York Times China’s emissions of ozone-harming gas are declining, studies find

Bloomberg Why it’s so hard for the solar industry to quit Xinjiang

E&E News Federal fine print could trip Biden’s bold energy plan

Calendar

THURSDAY | FEB. 18

11:30 a.m. The House Energy and Commerce Committee’s Energy Subcommittee will hold a remote hearing titled, “A Smarter Investment: Pathways to a Clean Energy Future.”