Daily on Energy: New phase in war over oil and gas leasing in the Gulf of Mexico

The American Petroleum Institute, which intervened in the suit as a defendant, appealed Contreras’s ruling yesterday. Frank Macchiarola, the industry group’s vice president of policy, said the decision was “misguided” and creates uncertainty for producers at a time of high energy prices.

Meanwhile: Some 300 environmental and other advocacy groups are formally petitioning the Interior Department to immediately cease authorization of exploration plans and new drilling permits in the Gulf.

In an emergency petition sent to Interior yesterday, the groups expressed that Interior’s decision to carry on with the lease sale showed a “spectacular failure of climate leadership” and said the entire existing Gulf oil and gas leasing regime is illegal for relying on flawed environmental analyses that comply neither with the National Environmental Policy Act nor the Outer Continental Shelf Lands Act.

Authorization of new drilling “puts our climate, wildlife, and frontline communities at even greater risk from the numerous harms inherent in offshore oil and gas activities,” write the signatories, which include the Center for Biological Diversity, Sierra Club, and Friends of the Earth.

Hallie Templeton, Friends of the Earth’s legal director who has helped lead the group’s work against the sale, said in a statement that petitioners want President Joe Biden to “turn this ship around” and end offshore drilling.

Sale 257: The Gulf lease auction in November was the largest, in terms of total acreage, on record, and as the only one Interior conducted last year, it’s a perfect representative of the battle over energy between environmental groups and fossil fuel interests.

Moreover, the sale, to an extent almost unique unto itself, has driven a wedge between the Biden administration and some of these environmentalist and other liberal constituencies demanding more aggressive green energy policies than the administration is overseeing.

Macchiarola, on the other hand, called on the Interior Department to join its effort in appealing the decision, something that would seem to be highly unlikely considering the administration’s posture on why it held the sale at all.

Interior said after Contreras ruled that it was reviewing the decision but White House officials, speaking in recent weeks about the sale in light of criticism, maintained that the administration’s hand was forced by a court decision enjoining Biden’s moratorium on new oil and gas leases.

One final note: Laura Daniel-Davis, Biden’s nominee to be assistant secretary of the Interior for Land and Minerals Management, was grilled by Republicans on the Senate Energy and Natural Resources Committee yesterday about where she would take the agency if confirmed.

She said the department’s and its sub-agencies’ offshore work “to responsibly and safely develop energy resources on our Outer Continental Shelf helps assure our country’s energy independence and is critical to our energy future.”

SPECIAL EDITOR’S NOTE: Please welcome Breanne Deppisch to the Daily on Energy team! Before joining the Examiner, Breanne was a national politics reporter and producer at Spectrum News. She also worked at the Washington Post as a reporter and researcher on the national politics team and as a co-author of the Daily 202 newsletter.

She has also served as a senior national politics and cybersecurity reporter and then as a senior national security and cyber correspondent at The Aspen Institute. She graduated from the University of Texas at Austin.

We’re very excited to have Breanne on the beat. Please feel free to reach out to her (contact info just below)!

Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writer Jeremy Beaman (@jeremywbeaman) and Breanne Deppisch (@breanne_dep). 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.

DISAGREEMENT STALLS SEC CLIMATE DISCLOSURE RULE: Democratic appointees on the Securities and Exchange Commission are divided over the scope of a prospective rule on emissions and climate change-related disclosures for companies, delaying further a big component of the administration’s climate change agenda, Bloomberg reports.

Chair Gary Gensler and the SEC’s other two Democrats are reportedly at odds over the extent to which the commission can force disclosures about climate change risks and emissions associated with their businesses without making the rule too vulnerable to losing a legal challenge.

Those disagreements mean the proposed rule, which Gensler said would be introduced by the end of last year, may not come until March or later.

A prolonged delay poses additional challenges for the Biden administration, which is under significant pressure from some Democrats and environmentalist constituencies to score a policy win on climate change now that Biden’s Build Back Better Act is stagnant in Congress.

Evergreen Action Executive Director Jamal Raad said yesterday the SEC has “no more time to waste” in introducing its disclosure rule and said Democrats at the commission “have a mandate to protect investors.”

PRESSURE BUILDS AGAINST EPA FUEL STANDARD PROPOSAL: More public officials are asking the Biden administration to rethink its proposal for the Renewable Fuel Standard and argue that its denial of exemptions which dispense small refiners from complying with fuel blending obligations threatens to close those refineries down.

Democratic Sen. Jon Tester wrote EPA Administrator Michael Regan this week and is requesting that he create a “workable exemption” for small refiners, saying a proposed denial of all petitions “ignores the real hardships faced by small refineries in colder areas like Montana.”

The five Republican governors of Utah, Alabama, Wyoming, Oklahoma, and Idaho have sent a separate letter to Biden asking him to direct EPA to reject the proposed denial of exemptions and, like Tester, say the RFS proposal threatens to raise gasoline prices further if refiners go out of business. They also say it “runs flagrantly counter to [the administration’s] stated policy of lowering gas prices.”

Senate Republicans sent their own letter to Regan last month making the same case.

DEMOCRATS CALL FOR GAS TAX SUSPENSION AMID RISING PRICES AT THE PUMP: Two Senate Democrats are calling to suspend the federal gas tax through the remainder of 2022 in a bid to help U.S. consumers struggling with a nationwide spike in gas prices.

The Gas Price Relief Act, introduced Wednesday by Sens. Mark Kelly of Arizona and Maggie Hassan of New Hampshire, would suspend the $18.4 cents per gallon federal gas tax through 2023. It comes as the average price of gas in the U.S. has grown to exceed $3.45 per gallon, according to an estimate from AAA––up roughly $1 from the previous year. Experts expect that price to rise even higher in the coming months as many Americans resume in-person activities, including returning to the office and classrooms full-time.

To offset the lost revenue from taxes, the bill would require the Treasury Department to transfer money from a general fund into the Highway Trust Fund in order to keep it solvent through 2023.

“We need to continue to think creatively about how we can find new ways to bring down costs, and this bill would do exactly that, making a tangible difference for workers and families,” Hassan said in a statement Wednesday announcing the effort.

ARMY PUTS OUT NET-ZERO PLAN: The Army unveiled an analysis and strategy yesterday for achieving net-zero greenhouse gas emissions by 2050, the Washington Examiner’s Mike Brest reports.

A document the Army put out quotes Defense Secretary Lloyd Austin describing climate change as an existential threat for the military and lays out the branch’s plans to green its operations in the coming decades.

The Army will put money toward more than 470 charging stations this year to support a growing hybrid and electric non-tactical vehicle fleet and will acquire more of those vehicles to secure a 100% electric light-duty, non-tactical fleet by 2027.

Recognizing that “heavy reliance on fossil fuels for electricity is hampering the Army while increasing risk and cost,” it also establishes an objective of provide 100% carbon-pollution-free electricity for Army installations by 2030.

The targets align with those Biden established in his December via executive order designed to push federal agencies to cut their emissions footprints so the government can be net-zero by 2050.

VIRGINIA SENATE SNUBS TRUMP EPA CHIEF: Virginia Senate lawmakers voted Tuesday to reject former EPA administrator Andrew Wheeler from serving in the Cabinet of Gov. Glenn Youngkin––a rare snub of a state-level gubernatorial appointee, and one that precludes the former Trump administration official from serving as Virginia’s secretary of natural resources.

Voting along party lines, lawmakers in Virginia’s narrowly divided Senate voted 21-19 to strip Wheeler––a former coal lobbyist who served as EPA administrator from 2019 to 2021––from a resolution confirming the rest of Youngkin’s Cabinet nominees.

Youngkin tapped Wheeler last month for the job, and the decision immediately sparked backlash from some environmental groups, as well as former EPA employees, who penned two separate warning letters to the state Senate detailing their concerns about Wheeler.

More than 150 former EPA employees who served in both Republican and Democratic administrations signed onto one letter, which charged that Wheeler “pursued an extremist approach” as EPA administrator, which had the effect of “methodically weakening EPA’s ability to protect public health and the environment …”

Wheeler, the former employees added, “sidelined science at the agency, ignored both agency and outside experts, rolled back rules to cut greenhouse gases and protect the climate, and took steps to hamstring EPA and slow efforts to set the agency back on course after he left office.” The letter’s signatories included two deputy EPA administrators and two former EPA administrators from the mid-Atlantic region, according to the Associated Press.

BIDEN TOUTS ELECTRIC VEHICLE CHARGING PLANT AS THE START OF AN ‘AMERICAN MANUFACTURING COMEBACK’: The Australian electric vehicle charging company Tritium announced it will build its first U.S. manufacturing facility in Tennessee––a move hailed by Biden as a transformational step that will spur the creation of new manufacturing jobs both in Tennessee and throughout the rest of the country.

Speaking alongside Tritium officials at a White House event yesterday, Biden noted the new facility is slated to create more than 500 “good-paying” manufacturing jobs in Tennessee, with benefits that will “ripple thousands of miles in every direction,” as his administration works to distribute funds from the $1 trillion bipartisan infrastructure bill and meet his stated goal of building 500,000 electric vehicle charging stations across the country by the year 2030.

The facility, which will be based outside of Nashville, is expected to produce up to 30,000 electric vehicle chargers per year, according to a fact sheet distributed by the White House.

TAKING THE PULSE: A new Politico/Morning Consult poll found that adults in 13 countries globally, including the U.S., are frustrated with how their leaders are handling climate change, and say they are noticing a spike in extreme weather events and natural disasters.

· Majorities in all 13 countries also said they are “very” or “somewhat” concerned about climate change, according to the survey, though there is little consensus on whether, or how quickly, leaders should move to ban major sources of carbon emissions.

· Respondents were largely divided about what steps businesses should take in the fight against climate change, but there was one area of consensus: adults in all 13 countries say they believe investing in environmentally-friendly infrastructure is the most important short-term decision business leaders can make.

· Less than 1 in 5 American adults believe President Biden is doing enough to combat climate change.

· Read the full survey here.

BIDEN MEETING WITH UTILITY HEADS: Energy Secretary Jennifer Granholm and National Climate Advisor Gina McCarthy will join Biden at a meeting this afternoon with the CEOs of major electric utilities to talk over the administration’s energy and climate agenda.

Majors like Duke Energy and Southern Company will be in attendance, as will Edison Electric Institute, which represents them and some 220 other investor-owned electric companies.

As for where they stand on the Build Back Better package, EEI endorsed passage of the green energy tax incentives in the House’s version in November, saying they would benefit customers and “create a level playing field that recognizes the role of electric companies in deploying more clean energy.”

But the association also said it had “significant concerns” with the bill’s 15% corporate minimum tax on book income and said it would threaten capital investment.

EPA WELCOMES ENVIRONMENTAL JUSTICE ADVISOR: EPA announced Robin Morris Collin has been appointed Senior Advisor for Environmental Justice to Administrator Michael Regan.

Collin, who has taught law at Willamette University and the University of Oregon, as well as Tulane, will advise the agency as it “works to advance environmental justice and civil rights in communities that continue to suffer from disproportionately high pollution levels, including low-income communities and communities of color,” EPA said in an announcement yesterday.

The Rundown

Bloomberg Blackrock’s Larry Fink meets big oil and its foes to navigate climate fight

Wall Street Journal Where is there more lithium to power cars and phones? Beneath a california lake

Calendar

THURSDAY | FEB. 10

10:00 a.m 366 Dirksen The Senate Energy and Natural Resources Committee will hold a hearing examine use of clean hydrogen in the transportation, utility, industrial, commercial, and residential sectors.