Daily on Energy: Liz Cheney defends Trump overhaul of environmental reviews

Cheney’s office exclusively provided us with the details of her UNSHACKLE Act, which is a companion bill to a Senate version proposed by Republican Mike Lee of Utah.

The Biden administration has announced its intent to revisit former President Donald Trump’s changes to NEPA, which would speed and narrow environmental reviews for infrastructure projects and limit agencies’ consideration of climate change by not requiring them to measure the “cumulative” environmental impacts.

“The last Administration made critical revisions to streamline these projects to prevent them from being unnecessarily blocked by bureaucratic red tape,” Cheney said. “Unfortunately, the Biden Administration intends to empower federal agencies at the expense of state and local stakeholders who will face new challenges because of burdensome mandates that will take effect.”

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KEYSTONE XL VICTORY EMBOLDENS GREENS IN LINE 3 FIGHT: After securing the death of Keystone XL, emboldened environmentalists are projecting confidence about their chances of convincing Biden to intervene in the Line 3 oil pipeline dispute in Northern Minnesota, Josh reports in a new story this morning.

“If President Biden wants to have any credibility on climate and indigenous rights, this is a key test,” said Collin Rees, a senior campaigner with Oil Change U.S., after attending protests this week against Line 3. “The pressure is going to be all-out on them, and they will have to make a decision.”

The case against Biden acting: Since his move against Keystone XL, Biden has demonstrated reluctance to oppose other pipelines approved in the Trump administration targeted by environmentalists, including the Dakota Access pipeline. These projects differ from Keystone XL, which was never built, in that they are either operational or enhancing existing pipelines.

“If there is a lot of folks depending on a pipeline currently in service, the administration seems to be very sensitive to the disruption that would be caused by shutting it down,” said James Coleman, an energy law professor at Southern Methodist University.

WE HAVE AN INFRASTRUCTURE DEAL…KIND OF: A 10 senator bipartisan negotiating group announced last night they reached an agreement on “a realistic, compromise framework to modernize our nation’s infrastructure and energy technologies.” But details are sparse and it’s unclear if more liberal senators would support a proposal that focuses on traditional infrastructure and does not contain overt climate provisions.

There also remains disagreement between factions of Congress and the White House over how to pay for any infrastructure deal (see more on that below).

BIPARTISAN GROUP PITCHES HIGHER GAS TAX: The Senate group’s plan would index the nation’s 18-cent gas tax to inflation for the first time, which raise it over time, the Washington Examiner’s Susan Ferrechio writes.

Sen. Mitt Romney, a Utah Republican and one of the negotiators, told reporters in the Capitol the gas tax indexing proposal is one of the ways the GOP wants to pay for an infrastructure package that can garner support from Democrats and Biden.

The federal gas tax is 18.4 cents for unleaded and 24.4 cents for diesel. The federal government has not raised the gas tax in 28 years. Proponents of a higher gas tax say the current taxes, which are supposed to be used to fund highway repairs, are of diminishing value, in part because they are not indexed to inflation.

BUT…BIDEN OPPOSES THE IDEA: Biden won’t accept any infrastructure plans that would index the gas tax, the Washington Examiner’s Christian Datoc reports.

A source familiar with the negotiations told Christian that the president was explicit in his communications with lawmakers that he would not sign any bill that calls for indexing the gas tax or instituting a mileage tax for electric vehicles.

Biden promised on the campaign trail not to raise taxes on people earning less than $400,000 a year. The president has maintained that promise throughout the infrastructure negotiations and still views both proposed user fee hikes as major red lines for violating that pledge, the source added.

Interestingly, Democratic Sen. Tom Carper of Delaware, a close Biden ally who is not part of the bipartisan negotiating group, tweeted yesterday that he agrees with their idea because “things worth having are worth paying for.”

“As I’ve said for the last two Congresses, at a minimum we should index the gas tax to inflation to help fund investments in climate-resilient infrastructure,” wrote Carper, the chairman of the Environment and Public Works Committee.

DON’T LOOK NOW…GLOBAL OIL DEMAND TO RETURN TO NORMAL: Global oil demand will return to pre-pandemic levels by the end of next year, the International Energy Agency projected in its monthly oil market report today.

Consumption is set to rise 5.4 million barrels per day this year, and another 3.1 million barrels p/d in 2022 to reach more than 100 million barrels p/d, IEA said. That recovery follows a record decline of 8.6 million barrels p/d in 2020 as coronavirus’ lockdowns blunted consumption of transportation fuels.

IEA’s forecast delivers a blow to environmentalists who argued oil demand would never return to normal consumption levels. Oil demand’s expected rise underscores “the enormous effort” required by governments to reach their climate targets and get on a path to net-zero emissions, IEA said.

MANCHIN SEEKS ‘CLARIFICATION’ ON IEA NET-ZERO REPORT: Sen. Joe Manchin, the powerful West Virginia Democrat, said today he spoke with IEA executive director Faith Birol, who offered a “helpful clarification” that the IEA’s recent net-zero by 2050 report doesn’t call for the end of fossil fuels, as many environmentalists had interpreted.

In its report last month, the IEA issued a stark call that investment in new oil and gas development must end this year for the world to be on track to slash emissions to net-zero by midcentury. Since then, many environmentalists and Democrats have used that finding to support their calls for an abrupt end to fossil fuel financing.

However, Manchin said Birol “made clear” the report doesn’t demand the end of fossil fuels. “He also reiterated that we need to remain focused on our efforts to innovate in the areas of carbon capture, utilization and sequestration (CCUS), hydrogen, nuclear, energy efficiency and renewable energy,” Manchin added.

In addition, Manchin pointed to projections from the IEA’s report that 90% of the greenhouse gas emissions growth between now and 2040 will come from developing countries, including China.

“This is yet another reminder that the United States and our allies must continue to lead the way on these technologies to use our abundant resources in the cleanest way possible, and hold countries like China accountable for reducing their emissions if we are to reach any climate goals,” the senator said.

BIDEN EYES FIRST OFFSHORE WIND LEASE SALE: The Interior Department is proposing an offshore wind lease sale in the New York Bight, the shallow waters between Long Island and the New Jersey coast, that it says could lead to more than 7 gigawatts of offshore wind power.

The Biden administration, when announcing a major offshore wind push earlier this year, had identified the New York Bight as a priority area for development. Biden has set a goal to deploy 30 GW of offshore wind power by 2030, and the Interior Department has in the last few months approved the first large-scale offshore wind project, announced potential development off the California coast, and begun exploring opportunities in the Gulf Coast.

The Interior Department’s Bureau of Ocean Energy Management is taking comment for 60 days on the proposed lease sale. BOEM is also weighing potential “lease stipulations” that would include requirements for a project labor agreement for construction of any proposed projects, a summary of how to minimize conflict with other ocean users, and options to offer benefits to low-income and minority regions.

BIDEN TO MOVE TO PROTECT TONGASS NATIONAL FOREST: The Forest Service will propose to “repeal or replace” a Trump administration action that exempted Alaska’s Tongass National Forest from the so-called “roadless rule,” opening up more than 9 million acres of untouched forest to logging and development.

The Forest Service signaled its intent to revise the Trump administration’s move in the Biden administration’s first regulatory agenda, unveiled this morning. According to the agenda, the Forest Service anticipates proposing a new rule in August.

Environmentalists quickly welcomed the Biden administration’s move, noting that the Tongass, the country’s largest national forest, also helps curb greenhouse gas emissions.

“The Tongass, in particular, stores more carbon than any other national forest, and is home to pristine wildlife and wildlands. The livelihoods of thousands of people who live in Southeast Alaska depend on it remaining intact,” said Josh Hicks, senior campaign manager for The Wilderness Society.

The administration’s move is likely to anger Alaska politicians who have been keen to see more development in their state, including centrist Sen. Lisa Murkowski who Biden has been looking to court, with mixed success so far.

CONGRESS ONE STEP CLOSER TO CANCELING TRUMP METHANE ROLLBACK: The House Energy and Commerce Committee voted 30-22 yesterday along party lines to approve a resolution under the Congressional Review Act canceling a Trump EPA action that blocks the agency from directly regulating methane emissions from the oil and gas industry.

The Senate approved the resolution in April, with some Republican support, and the Democratic-led House is likely to pass it, too. House Majority Leader Steny Hoyer said yesterday the House will vote on the resolution during the week of June 22, per Politico.

Once signed by Biden, the resolution would reinstate requirements for oil and gas companies to monitor and repair equipment leaking methane, and it would clear the decks for the EPA to set stricter emissions controls for the oil and gas sector, as Biden has promised.

Several oil companies that have publicly backed some form of federal regulation of methane also endorsed the CRA resolution, including U.S. producers Devon Energy, Cheniere, Occidental Petroleum, EQT Corporation, and Pioneer Natural Resources and European oil majors Shell, BP, and Total.

Also in yesterday’s markup: The House energy panel approved several bipartisan energy cybersecurity bills by voice vote, aiming to beef up the security of the electricity grid, pipelines, and LNG facilities against cyber attacks.

EPA TO WEIGH TIGHTER SOOT STANDARDS: The EPA announced yesterday it would reconsider the Trump administration’s decision to keep federal limits on industrial soot pollution constant.

The move opens the door to stricter standards that environmentalists and the agency’s own scientists have said are necessary to protect public health. The Trump EPA, in its last couple months in office, formally declined to tighten the standards for fine particulate matter, or PM2.5, commonly known as soot, leaving in place the levels set by the Obama administration in 2012.

“The most vulnerable among us are most at risk from exposure to particulate matter, and that’s why it’s so important we take a hard look at these standards that haven’t been updated in nine years,” EPA Administrator Michael Regan said in a statement.

The EPA says it will move “expeditiously” to reconsider the Trump administration’s decision, including by developing a supplemental scientific assessment examining the health consequences of particulate matter. That supplement will include recent studies that have shown people living in areas with higher particulate matter pollution are more vulnerable to the coronavirus, according to a news release.

The agency says it is targeting summer of next year for a proposed rulemaking and spring 2023 for a final rule.

EPA MEETINGS WORTH NOTING: Regan has met with officials from five major auto companies in the last two weeks as the EPA, along with the Transportation Department, gears up to release a proposal to tighten fuel economy standards.

The EPA administrator met with Ford last week. This week, he has met with Stellanis (formerly Fiat Chrysler), Toyota, and General Motors, according to Regan’s public calendar. Reuters reports Regan also met with Volkswagen’s CEO yesterday.

Biden directed the two agencies to unveil a new fuel economy proposal by July. The big question will be how strict of standards the agencies decide upon and whether they propose tighter requirements than what a handful of automakers agreed upon with California regulators amid the Trump administration’s fuel economy fight.

Those negotiated standards were much stricter than what the Trump agencies set, but weaker than the Obama administration’s prior regulation. Tightening fuel economy standards is one of the most significant ways Biden can help drive electric vehicle adoption in the near term.

Since Biden was elected, many automakers have solidified their push toward electric vehicles, and companies such as General Motors dropped their legal support for the Trump administration’s standards.

The Rundown

Reuters Biden mulls giving refiners relief from U.S. biofuel laws – sources

Washington Post Gore pressed Biden to stick with climate plans as liberals fear White House is softening its agenda

S&P Global Gas treatment, infrastructure tensions hamper clean electricity standard efforts

Los Angeles Times Why a California oil workers union is getting behind clean energy

Calendar

TUESDAY | JUNE 15

10 a.m. 366 Dirksen. Energy Secretary Jennifer Granholm will testify before the Senate Energy and Natural Resources Committee on DOE’s fiscal year 2022 budget request.

WEDNESDAY | JUNE 16

10 a.m. 406 Dirksen. The Senate Environment and Public Works Committee will hold a hearing to consider the nominations of Jeffrey Prieto to be general counsel of the EPA, Jane Nishida to be EPA’s assistant administrator for international and tribal affairs, and Alejandra Castillo for assistant secretary for economic development of the Department of Commerce.