Daily on Energy, Sponsored by the American Petroleum Institute: Labor coalesces on grand bargain with Biden on infrastructure

At an event with Sen. Joe Manchin we wrote about in yesterday’s edition, the United Mine Workers of America said it was prepared to accept a transition away from fossil fuels if it came with financial aid for miners who lost their jobs, employment opportunities in renewable energy, and investment in carbon capture technology.

“Change is coming, whether we seek it or not,” it said in a document setting out its position. “Too many inside and outside the coalfields have looked the other way when it comes to recognizing and addressing specifically what that change must be, but we can look away no longer.”

Labor changes its tune: A number of labor groups made similar gestures at another event yesterday hosted by Energy Futures Initiative and AFl-CIO. Lonnie Stephenson, international president of the International Brotherhood of Electrical Workers, credited Biden with conditioning expanded clean energy tax credits in his infrastructure plan with policy mechanisms requiring employers to pay prevailing wages and follow “strong” labor standards.

The supportive statements of labor are important because many groups that represent fossil fuel workers criticized Biden’s early moves to pause new oil and gas leases on federal lands and cancel the Keystone XL pipeline.

What labor wants: Richard Trumka, president of the AFL-CIO, drew attention to the PRO Act, a Democratic bill to expand labor protections that Manchin endorsed at the UMWA event.

“Calling it a clean job doesn’t make it a good job,” Trumka said. “Workers in renewable energy need a free and fair path to organize.” Trumka also warned against the “false promise” of retraining programs. “We simply won’t allow the transition to be done on our backs,” he said. “We need job creation up front, not to be determined.”

On the same page: Energy Secretary Jennifer Granholm, who spoke at the event, promised to deliver on labor’s demands by creating a “global gold standard” for employment in renewable energy. She said Biden’s infrastructure plan would ensure that the creation of new jobs “comes first” before retraining.

She also plugged that an interagency working group created by a January executive order could release a report as soon as this week proposing ideas to help deliver federal resources to areas whose economies depend on coal, oil, and gas and to support workers employed by them.

“We are dead serious about doing everything possible to make sure this energy transition really does create opportunity,” Granholm said.

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MANCHIN’S LATEST ASK TO BIDEN…SAVE NUCLEAR: Manchin appealed to Biden this morning to “use all the tools” he has to preserve the U.S.’ existing nuclear power fleet and to prevent further plant closures.

In a letter to Biden, Manchin, the chairman of the Energy Committee, warned that an additional 5.1 gigawatts of nuclear capacity is anticipated to go offline this year, which he said would be detrimental to achieving emission reduction goals because nuclear still represents more than half of the nation’s carbon-free power.

Over the last two decades, 10 U.S. nuclear plants have shut down, mostly due to competition from cheaper natural gas and renewables.

Manchin cites a recent study by the Rhodium Group that warns that without any change in policy, half of the current nuclear fleet will retire by 2030.

CLEAN ELECTRICITY INVESTMENTS ARE A JOB CREATOR, RHODIUM GROUP SAYS: New research this morning from the Rhodium Group estimates a comprehensive clean energy investment package could increase net national energy employment by at least 290,000 jobs between 2022 and 2031, and as much as 606,000 jobs during that time period if clean energy technology costs are lower.

Rhodium finds that jobs created and retained by clean energy development, including nuclear energy, far exceed, by at least 6.5 times, the number of fossil jobs that would be lost as the electricity sector decarbonizes.

For example, in Rhodium’s mid-technology cost scenario, coal mining, transportation, and generation jobs would be collectively 25,000 lower, and natural gas production, transportation, and generation jobs would be collectively 34,600 lower than under current policies. On the flip side, however, Rhodium finds the investment package would save 26,000 jobs at existing nuclear plants and create 278,000 jobs in the manufacturing, installation, and operation of new wind, solar, geothermal, and other renewable energy facilities.

EMISSIONS WILL REBOUND MASSIVELY THIS YEAR, IEA SAYS: Global carbon dioxide emissions will increase nearly 5% this year, driven by a resurgence in coal demand by 4.5%, the International Energy Agency says in its latest global energy review released this morning.

“This is a dire warning that the economic recovery from the Covid crisis is currently anything but sustainable for our climate,” said Fatih Birol, IEA’s executive director, in a statement. “Unless governments around the world move rapidly to start cutting emissions, we are likely to face an even worse situation in 2022.”

The rapid growth of coal-fired power, especially in Asia and particularly in China, will drive the power sector to account for 80% of the expected emissions rebound this year, the IEA says. In fact, the IEA projects China alone will drive more than 50% of global coal growth, and its coal consumption is expected to reach a new record this year, surpassing 2013-2014 levels that many had thought would be its peak.

Notable, too, is the fact that the significant growth in coal demand will overshadow the continued expansion of renewable energy, which the IEA expects to account for more than half of electricity supply added this year. The IEA also projects power sector demand for renewable energy to grow 8% this year, which would be the largest year-on-year growth in absolute terms.

UK SETS BAR WITH HUGE NEW EMISSIONS TARGET: The United Kingdom plans to enshrine into law a new target to slash emissions 78% by 2035 compared to 1990 levels, setting the bar for the world ahead of Biden’s climate summit later this week.

“We’re setting the most ambitious target to cut emissions in the world,” Prime Minister Boris Johnson said in a statement today.

The target builds on the U.K’s existing National Determined Contribution to the Paris Agreement of cutting emissions 68% by 2030, the highest reduction target of any major economy. It would top a 50% reduction target the Biden administration is rumored to be considering.

CHINA ON BLINKEN’S MIND IN BIG CLIMATE SPEECH: Secretary of State Antony Blinken delivered an oblique warning yesterday to China and other countries such as Brazil who are pursuing measures detrimental to the U.S.’ goals.

“When countries continue to rely on coal for a significant amount of their energy, or invest in new coal factories, or allow for massive deforestation, they will hear from the United States and our partners about how harmful these actions are,” Blinken said during a speech on the role of climate change in foreign policy at the Chesapeake Bay Foundation Headquarters in Annapolis, Md.

Blinken’s climate envoy John Kerry is pushing China, Japan, and South Korea to end overseas coal financing — they’re the last three major financiers of the fuel. Brazil, meanwhile, is a pariah in international climate talks for its deforestation of the Amazon.

Blinken also evoked China when discussing the need for the U.S. to ramp up its production of clean energy technologies such as wind turbines, solar panels, and EVs and its component batteries and critical minerals.

“It’s difficult to imagine the United States winning the long-term strategic competition with China if we cannot lead the renewable energy revolution,” he said. In another apparent swipe at China, Blinken said cooperation on climate change is not a “chip” countries can use to excuse bad behavior in other areas, such as human rights. “Climate is not a trading card – it’s our future,” he said.

BIPARTISAN PUSH TO BREAK US RELIANCE ON CHINA FOR CRITICAL MINERALS: Texas Reps. Lance Gooden, a Republican, and Vicente Gonzalez, a Democrat, unveiled legislation this morning to create permanent tax incentives for the mining and recycling of critical minerals in the U.S.

Those minerals, which include lithium, graphite, and cobalt, are used in everything from military equipment to renewable energy and batteries. The legislation, shared first with Abby, is meant to address growing concerns, especially from Republicans, that the U.S. is reliant upon China and other adversaries for critical materials.

The legislation comes on the heels of House Natural Resources Committee Republicans reintroducing last week legislation that would speed up the permitting process for critical minerals mines.

GAS PRICES FACING UPWARD PRESSURE Gasoline prices, which have increased rapidly over the past few months, will likely remain high and could go even higher as summer approaches, the Washington Examiner’s Zachary Halaschak reports.

One year ago, the average U.S. retail price of gas sat at just $1.94 per gallon, and as of last month, it hovered at about $2.90 per gallon, according to the U.S. Energy Information Administration. That rise is expected to stick around, experts say.

The major factor? The return of demand.

Gas prices plummeted to their lowest level in April of last year because most of the country was locked inside and not traveling due to COVID-19. In the past few months, as the U.S. vaccination rollout continues, people have felt safer leaving their homes, which has increased demand for fuel.

“As more economies both in the U.S. and around the world come out of lockdown, that’s going to put even more upward pressure on prices as the demand for fuel continues to rise,” said Nick Loris, an economist at the Heritage Foundation who focuses on energy and environmental policy.

GREEN NEW DEAL IS BACK LIKE IT NEVER LEFT: Sen. Ed Markey and Rep. Alexandria Ocasio-Cortez re-introduced their Green New Deal this morning, a symbolic gesture that enabled them to take a victory lap for reshaping the climate debate and encouraging the Biden administration to put forward a multi-trillion-dollar infrastructure proposal.

In a press conference, Markey credited the Green New Deal with elevating a new generation of young progressive climate activists.

He also said it helped him win his Senate race against his high-profile Democratic primary challenger Joe Kennedy.

“Just look at my race in Massachusetts. I ran and won on the Green New Deal,” Markey said.

AND THERE’S EVEN A GREEN NEW DEAL FOR PUBLIC HOUSING: Sen. Bernie Sanders and Ocasio-Cortez introduced sweeping legislation yesterday to overhaul the nation’s public housing stock, dubbed the “Green New Deal for Public Housing Act.”

The plan seeks to transition the public housing system “as swiftly and seamlessly as possible” to zero-carbon communities that produce on-site renewable energy.

It would invest $172 billion over 10 years and would affect nearly 2 million people living in some 950,000 public housing homes. It goes far further than Biden’s planned $2.3 trillion infrastructure package, which includes about $40 billion to improve public housing.

The sponsors claim their legislation would reduce the cost of water bills among public housing residents by 30% and would slash energy bills by up to 70% per year. It also would create about 240,000 union jobs, according to Sanders and Ocasio-Cortez.

TREASURY’S NEW CLIMATE HUB: The Treasury Department formally launched its “climate hub” yesterday to prioritize policies that increase financing for clean energy and address climate-related risks to the economy.

Its creation fulfills a pledge Treasury Secretary Janet Yellen made during her confirmation hearings as part of a commitment to put climate change front and center at the agency. The announcement also comes as Biden is poised to issue a wide-ranging executive order directing several agencies, including the Treasury Department, to address climate-related risks to the financial system.

Yellen picked John Morton, a veteran of the Obama White House, to lead the climate hub as the Treasury Department’s first “climate counselor.” Morton served as the senior director for energy and climate change at the National Security Council during the Obama administration, and he most recently was a partner at Pollination, a climate change advisory and investment firm.

EXXON PITCHES HOUSTON CARBON CAPTURE HUB: ExxonMobil wants to work with the Biden administration to develop a carbon capture “hub” in Houston, dubbed the “energy capital of the world,” an effort the oil giant says would require public and private investment totaling at least $100 billion.

A carbon capture “hub” would essentially create a localized economy around capturing and storing carbon dioxide emissions. Exxon says Houston is a prime location for the strategy, given the myriad of industrial manufacturing plants, oil refineries, and power plants in the area and the massive geologic storage potential nearby.

The Energy Department has estimated there is enough capacity along the Gulf Coast to store 500 billion metric tons of carbon dioxide, which Exxon notes is equivalent to more than 130 years of U.S. total industrial and power sector emissions (based on 2018 data).

Exxon cites projections that scaling up carbon capture infrastructure in the Houston area could allow for the capture and storage of around 50 million tons of carbon dioxide annually by 2030, and 100 million tons annually by 2040.

In a blog post yesterday, Joe Blommaert, president of Exxon’s Low Carbon Solutions, encouraged the Biden administration to make carbon capture a critical piece of its soon-to-be-unveiled commitment to the Paris Agreement.

TRUMP OFFICIALS SHUT EPA STAFF OUT OF FUEL ECONOMY RULE: Top Trump EPA officials, including former EPA Administrator Scott Pruitt, decided to rely heavily on analysis from the National Highway Traffic Safety Administration for its rulemaking weakening fuel economy standards, limiting the role of EPA technical staff that have long collaborated with NHTSA on updating the standards, according to the agency’s watchdog.

“[T]he agencies’ technical personnel did not collaborate during final rule development, undercutting the joint character of the rulemaking,” the EPA Office of Inspector General wrote in a report this morning.

The report notes that Pruitt made the decision to rely upon NHTSA’s analysis, leaving only a limited advisory role for EPA technical staff on some aspects of the analysis. The EPA watchdog also notes the agency didn’t conduct separate analysis required by executive order that outlines how the fuel economy changes would affect vulnerable regions.

The lack of collaboration and deliberate effort by Trump officials to shut out EPA technical staff (who raised public concerns about freezing the fuel economy standards as the Trump administration had initially proposed) could help the Biden administration undo the Trump changes. Biden has called on his EPA to propose new, stricter fuel economy limits by July.

The Rundown

New York Times Amid Biden climate push, a question looms: Is America’s word good?

Politico As China revs up battery production, Dem lawmakers see another Middle East nightmare

Wall Street Journal New carbon market pays southern pine growers not to cut

Washington Post Huge plastics plant faces calls for environmental justice, stiff economic headwinds

Calendar

TUESDAY | APRIL 20

12 p.m. The House Select Committee on the Climate Crisis will hold a remote hearing titled, “Making the Case for Climate Action: Creating New Jobs and Catalyzing Economic Growth”

12:30 p.m. The National Capital Area Chapter of the United States Association for Energy Economics’ will hold its annual Energy Policy Conference. The virtual event runs over two days.

1 p.m. The Center for Climate and Energy Solutions will hold an event entitled “Low Carbon Business: How climate ambition leads to job creation, economic growth,” featuring remarks from representatives from GE, Duke Energy, IBM and Shell.

WEDNESDAY | APRIL 21

10 a.m. The House Appropriations Interior, Environment, and Related Agencies subcommittee will hold a hearing with EPA Administrator Michael Regan on the EPA’s fiscal year 2022 budget request.

6 p.m. Citizens’ Climate Lobby’s D.C. chapter will hold a virtual town hall meeting with Rep. Eleanor Holmes Norton.

THURSDAY | APRIL 22

10 a.m. 366 Dirksen. The Senate Energy and Natural Resources Committee will hold a hearing “to examine the opportunities and challenges that exist for advancing and deploying carbon and carbon-dioxide utilization technologies in the United States.”