Daily on Energy: Haaland evasive on what has changed with oil leasing since court loss

Oil and gas industry groups and Republicans in Congress called on Interior to immediately begin new lease sales after a Louisiana-based federal district judge on June 15 granted a preliminary nationwide injunction to 13 states that sued the Biden administration over its leasing pause.

But Haaland struggled to say definitively whether Interior is resuming leasing in budget testimony before her old colleagues at the Natural Resources Committee.

Rep. Garret Graves, a Louisiana Republican, asked whether the Interior Department is moving forward with a offshore lease sale in the Gulf of Mexico, expected in March, that it canceled.

“Is there a pause right now or not? Has anything changed?” Graves said. “The judge said you can’t do that. It’s illegal.”

Haaland replied that Interior’s Bureau of Ocean Energy Management has not published a notice of resuming the canceled sale in the Federal Register, and reiterated her comments she made last week that her agency’s lawyers are reviewing the court decision and plan to abide by it.

“What has changed? We are reviewing the decision. I will make sure to get you a detailed answer on your question,” Haaland told Graves.

Democrats, meanwhile, urge Biden to press on: Democratic Rep. Jared Huffman of California, a vocal proponent of the leasing pause, encouraged President Joe Biden to declare a national climate emergency to “bolster his authority in face of these types of [court] challenges.”

Next steps unclear: Haaland also would not reveal the status of Interior’s report on the future of oil and gas leasing, in which the agency is expected (any day now) to propose reforms without stopping it by raising costs and imposing stricter regulation on fossil fuel development.

Haaland said, “I don’t think there is a plan right now for a permanent ban” — a version of a line she’s said before — but that Interior aims to ensure “American taxpayers are getting a good return on their investment” from oil and gas leasing.

Drilling is continuing: She also emphasized that Interior continues to approve permits to drill on existing leases at a steady pace, noting there are more than 8,000 drilling permits approved waiting to be used.

“As I have said many times, gas and oil production will continue well into the future. We believe that is the reality of our economy and the world we are living in,” Haaland said.

Interior’s Bureau of Land Management — overseeing onshore federal production — has been approving about 600 drilling permits per month since March, just behind the Trump administration’s 2020 rate of 700 permits per month, Chris Knight of Argos Media noted in a helpful tweet this morning.

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MCKINLEY AND SCHRADER PITCH BIDEN ON CES COMPROMISE: Republican Rep. David McKinley of West Virginia and Democratic Rep. Kurt Schrader of Oregon are introducing legislation later this week to impose a clean electricity standard requiring utilities to slash emissions 80% by 2050, Josh reported first this morning.

The bipartisan duo introduced the bill last Congress, but it got little traction and failed to pick up any additional co-sponsors.

But their effort is taking on new urgency as the White House and Democratic leaders look to include a more aggressive mandate for entirely carbon-free power in infrastructure legislation.

Biden’s clean electricity standard, floated as part of his American Jobs Plan, would mandate 100% carbon-free power by 2035.

The McKinley and Schrader mandate for 80% clean power would not kick in until 10 years after enacting the bill, after first imposing a massive scale-up of research and development spending for clean energy technologies through 2030 to lower their cost.

McKinley’s pitch: In an interview with Josh, McKinley said House Energy and Commerce Committee Chairman Frank Pallone of New Jersey, a Democrat, has agreed to discuss the bipartisan bill in a hearing focused on clean electricity standard policies.

Democrats on the Energy and Commerce Committee adopted Biden’s 2035 target for carbon-free power as part of their sweeping climate bill, known as the Clean Future Act, unveiled in March.

“Ours is bipartisan compared to his, and it gives us a chance to talk about an alternative,” McKinley said. “This just might be a fair compromise.”

While McKinley acknowledged the Democratic proposal could pass the House, he said it could struggle to gain the support of the party’s centrist voters in the split 50-50 Senate, such as Joe Manchin of West Virginia.

MEANWHILE…HOUSE CONSERVATIVES LAUNCH CLIMATE CAUCUS: A group of nearly 40 House Republicans is launching a Conservative Climate Caucus today, Josh reports.

The initiative, led by Rep. John Curtis of Utah, marks the first time that Republicans have organized a group explicitly to address climate change.

The new climate caucus aims to go beyond messaging and “educate House Republicans on climate policies and legislation consistent with conservative values,” according to a one-page summary shared by Curtis’s office.

Members of the group acknowledge “the climate is changing” and that human industrial activity has contributed to global warming, the summary reads.

Republicans in the new conservative caucus say they intend to contrast their proposals with “radical progressive” climate policies.

Democrats say the Republican approach of promoting clean energy in private sector innovation falls short of what’s needed to avoid the worst consequences of climate change.

TROUBLE FOR BIDEN’S PICK TO OVERSEE PUBLIC LANDS: Biden’s pick to lead the Bureau of Land Management is facing staunch opposition from Republican senators accusing her of past affiliation with an “ecoterrorist” organization and deception regarding a three-decade-old “tree spiking” criminal case.

The opposition has grown to include several Republicans on the Senate Energy and Natural Resources Committee weighing Biden’s nominee, Tracy Stone-Manning, to lead the BLM. Opponents include the committee’s top Republican, Sen. John Barrasso of Wyoming, and centrist Alaska Republican Sen. Lisa Murkowski.

Barrasso, in a statement, accused Stone-Manning of “intentionally trying to deceive” the Senate Energy Committee about her involvement in criminal proceedings in the early 1990s involving an incident of “tree spiking,” in which metal rods, nails, or other materials are hammered into trees to sabotage logging operations.

Barrasso and other Republicans argue Stone-Manning is not forthcoming about the incident, in which she helped send a threatening letter to authorities informing them of the “spiking.” Allies of Stone-Manning, including a broad swath of environmental and conservation groups, are accusing the GOP senators of re-litigating the 1989 incident (which also came up and wasn’t a major issue in her 2013 confirmation to lead Montana’s Department of Environmental Quality) in a smear campaign.

Nonetheless, the growing Republican opposition means Stone-Manning, currently a senior adviser for the National Wildlife Federation, would likely have to earn the votes of all Democrats on the Senate Energy Committee to move forward. It also signals a tough vote on the Senate floor if the committee advances her nomination.

US OIL DEMAND UP AGAIN, AND PRICES KEEP RISING: Oil prices have risen nearly $1 today, experiencing their highest levels in more than two years, as U.S. crude demand rose for the second straight week, the latest mark of recovery from the pandemic.

Gasoline and jet fuel consumption are up, while overall oil demand rose to 20.8 million barrels per day from 20.6 million barrels p/d the week prior, the Energy Information Administration reported this morning. That’s just 1% below the same week in 2019, before the pandemic.

EIA also reported a massive massive oil stock draw of 7.6 million barrels, bringing U.S. WTI crude to $73.79 as of late this morning

The inventory relief, a signal of an easing of glut in the oil market, could provide another reason for the OPEC+ alliance to boost production further starting in August, with the group meeting next week to decide on future steps, Rystad Energy said in a note this morning.

US GAS PRODUCER JOINS UN METHANE REDUCTION PROGRAM: EQT Corporation, the nation’s largest natural gas producer, is the first big U.S. company to join the Oil and Gas Methane Partnership, a United Nations program that aims to drive deep reductions of methane emissions over the next decade in line with the goals of the Paris Agreement.

“To position natural gas as a decarbonizing commodity of choice it is incumbent on industry participants to embrace a modernized approach that deploys best available technology for emissions measurement and management,” said Toby Rice, president and CEO of EQT.

Rice added that tackling methane “represents an opportunity” for the U.S. to capture greater global LNG market share, as importers in Europe are applying scrutiny to the methane content of Permian oil and gas.

EQT is planning to announce a net-zero and “other emissions reduction targets” later this month, Rice said.

GRANHOLM REITERATES BIDEN SUPPORT FOR NUCLEAR AND CARBON CAPTURE: Energy Secretary Jennifer Granholm insisted during a Senate Appropriations hearing this morning that nuclear power, carbon capture and storage, and hydrogen are all key pieces of Biden’s climate agenda and his infrastructure plans.

Her comments sought to assure some of the committee’s GOP senators — especially Louisiana Sen. John Kennedy, who is the top Republican on the subpanel overseeing the Energy Department’s budget — that there are clean energy technologies the administration and Republicans can agree to support.

“We are interested in controlling the emissions that come off of fossil fuels. We are with you on that,” Granholm said during an exchange with Kennedy, stressing the Biden administration’s support for carbon capture, direct air capture, and hydrogen.

She also stressed the importance of nuclear power. She noted that while the Energy Department’s fiscal year 2022 budget request doesn’t include funds for existing power plants, the Biden administration supports efforts to subsidize those plants to keep them running, as was proposed in Biden’s infrastructure plan and as bipartisan senators are weighing in their negotiations.

Some clarity on ARPA-C: Granholm also offered a brief description of Biden’s proposed climate innovation hub, known as ARPA-C, to distinguish it from the already-existing ARPA-E hub at the Energy Department that supports emerging and new energy technologies.

Granholm described ARPA-C as a “cross-departmental effort” that the Energy Department would house in partnership with ARPA-E.

The climate innovation hub “would be looking at technologies that impact climate that aren’t necessarily energy,” she said in response to a question from Sen. Diane Feinstein about why ARPA-C was needed. As an example, Granholm said ARPA-C would focus on identifying ways to mitigate wildfires or increase a region’s ability to adapt to extreme weather worsened by climate change, efforts that aren’t centered on energy technology.

AMAZON’S LATEST RENEWABLE ENERGY BUY: Amazon announced more than a dozen new renewable energy projects this morning, making it the largest corporate buyer of renewables in the world.

The projects, 11 of which will be in the United States, will help the technology giant accelerate its plans to power all of its company operations with renewable energy. Amazon said it will strive to reach that target by 2025, five years earlier than its original goal.

The new renewable energy investments solidify Amazon’s ranking as the top renewable energy buyer in both the U.S. and the world. Other tech giants, including Google, Facebook, and Microsoft, are among the other top corporate buyers, as those companies also chase near-term targets to power their operations with 100% renewable electricity.

COURT FAULTS FERC POLICY IN REVOKING PIPELINE APPROVAL: The U.S. Court of Appeals for the D.C. Circuit yesterday vacated FERC’s approval of the Spire natural gas pipeline, faulting the commission’s approach for determining the need of a project.

FERC’s Republicans in 2018 approved the $286 million pipeline in Missouri and Illinois over the objections of Democratic commissioners Richard Glick, now the chairman, and Cheryl LaFleur. But the court said developers of the project failed to demonstrate more demand for natural gas.

Interesting timing: The decision comes as FERC, under Glick’s leadership, is revising its 1999 policy statement for approving natural gas pipelines.

Critics say FERC’s pipeline policy is outdated, created when climate change concerns were less dominant and the shale boom was unanticipated. They say FERC has become a “rubber stamp” for pipeline approvals because the policy statement encourages the committee to lean too heavily on economic considerations when making decisions.

FERC makes decisions about pipelines based mostly on the economic need for the project, and whether developers have secured contracts with companies that want to use the pipeline to ship fuel, known as precedent agreements.

“Today’s decision shows that when FERC cuts corners with its analysis, it puts its decisions — and the investments made in reliance on those decisions — at substantial risk,” Glick said in reaction to the court ruling.

BIDEN TO TALK DROUGHT AND FIRES WITH WESTERN GOVERNORS: Biden will convene Western governors, along with officials from the Federal Energy Management Agency and his Cabinet, next week to discuss the extreme heat the West is experiencing and the intense wildfire season expected again this year.

“The droughts in the West is just astounding, when you take a look at it. Fires have already started, and flooding,” Biden said yesterday ahead of a meeting with FEMA’s emergency preparedness team. “So we’re in for a tough season, but I think we’ve got to be prepared and have every resource available to make sure we’re there for the American people.”

In a readout following the FEMA meeting, the White House said next week’s meeting will focus on boosting prevention, preparedness, and response efforts, both at the federal and state levels, to extreme weather.

The extreme heat and drought in the West is sparking another intense wildfire season that is drawing calls from lawmakers for Biden to prioritize better forest management. More than 1 million acres have burned already this year, which is more than the United States saw by this time in 2020, according to the National Interagency Fire Center.

SENATE CONFIRMS ENERGY DEPARTMENT CONGRESSIONAL AFFAIRS NOMINEE: The Senate yesterday confirmed Ali Nouri by voice vote to be assistant secretary for Congressional and Intergovernmental Affairs at the Energy Department.

Nouri joined the Biden administration in January and was leading congressional relations on an acting basis. Previously, he was the president of the Federation of American Scientists, and an adviser to Democrats on the Senate Energy and Natural Resources Committee.

“As both a scientist and a proven consensus-builder, Ali will bring unparalleled perspective and expertise to his work with Congress,” Granholm said.

PLUS…DOE FUNDING NEW NUCLEAR PROJECTS: The Energy Department announced yesterday it is providing $61 million in funding awards for 99 advanced nuclear technology projects across 30 states.

The projects, $58 million of which will go to U.S. universities, will focus on nuclear energy research, cross-discipline technology development, and nuclear reactor infrastructure to “bolster the resiliency and use of America’s largest domestic source of carbon-free energy,” DOE said.

BIDEN’S PICK FOR EPA ENFORCEMENT CHIEF: Biden is tapping David Uhlmann, a former long-time environmental prosecutor with the Justice Department, to lead the EPA’s enforcement office, in a signal the administration intends to beef up the agency’s oversight of polluters.

Uhlmann, who currently directs the University of Michigan Law School’s environmental law and policy program, served 17 years as a federal prosecutor. For seven of those years, Uhlmann led the Justice Department’s Environmental Crimes Section, and the White House noted in its announcement that he prosecuted “the first environmental justice criminal trial.”

The Rundown

Reuters Labor, green groups urge Biden to reject any ‘watered-down’ infrastructure deal

Reuters Exxon investors to prod revamped board on net zero carbon study

New York Times Has the carbontech revolution begun?

Calendar

WEDNESDAY | JUNE 23

2 p.m. 366 Dirksen. The Senate Energy and Natural Resources Committee’s energy subcommittee will hold a hearing to examine existing programs and future opportunities to ensure access to affordable, reliable, and clean energy for rural and low-income communities.

THURSDAY | JUNE 24

9:30 a.m. 366 Dirksen. The Senate Energy and Natural Resources Committee will hold a hearing to examine the infrastructure needs of the U.S. energy sector, western water and public lands.

10 a.m. 406 Dirksen. The Senate Environment and Public Works Committee will hold an oversight hearing entitled, “The Role of Natural and Nature-Based Features in Water Resources Projects.”

11 a.m. 2167 Rayburn. The water resources and environment subcommittee of the House Transportation and Infrastructure Committee will hold a hearing on Biden’s fiscal 2022 budget request. Tennessee Valley Authority CEO Jeff Lyash is among those testifying.

TUESDAY | JUNE 29

10:30 a.m. 2123 Rayburn. The House Energy and Commerce Committee will hold a hearing on the CLEAN Future Act and electric transmission.