THE RULE: The Securities and Exchange Commission released its long-anticipated rule requiring large companies to disclose their greenhouse gas emissions, after more than a year-long delay – and, as expected, the rule is a pared down version of what was originally proposed, amid attacks from industry groups and Republicans.
The deets: The rule, finalized in a 3-2 vote Wednesday, would require companies to report on their Scope 1 and Scope 2 emissions – emissions that come from sources a company owns directly, and emissions that a company causes indirectly, stemming from the source of energy it purchases and uses, respectively.
How it’s different from the O.G. rule: The original proposal included requirements to report on Scope 3 emissions – which encompasses those produced up and down the supply chain. There had been several reports detailing the exclusion of the Scope 3 requirement ahead of the rule’s release, after backlash from business and industry groups erupted following the release of the original draft. Many argued that compliance with the original proposal would have been too costly, and questioned whether current methods of collecting data would provide accurate disclosures.
The reactions: The American Securities Association said the rule shows how SEC Chair Gary Gensler is “anti-investor and pro-Wall Street” and that the regulation oversteps the agency’s authority.
“Importantly, the rule fails to quantify how it will impact global temperatures, the cost of food for those that are hungry, or access to heat for those who are freezing,” ASA President and CEO Chris Iacovella said in a statement. “This scheme does achieve one objective; it forces an enormous transfer of wealth from working families and savers to the ESG professional class whose elites will reap windfall profits from the rule.”
Derek Kriefels, the Chief Executive Officer of the State Financial Officers Foundation, wrote in a statement that the new rule would create a financial burden on small and large businesses, forcing them to “take resources that could have gone to keeping prices low or reinvesting in the American economy, and instead waste them on staying in compliance with a rule that has no business existing in the first place.”
Green groups aren’t too happy either: Ben Jealous, the executive director of the Sierra Club, said that the rule “falls significantly short of what’s needed” by excluding the Scope 3 requirement.
“Allowing companies to continue hiding a full accounting of their climate pollution keeps investors, including the Sierra Club and our members, in the dark about critical information needed to make informed choices about companies’ financial risks, including risks stemming from the failure to invest in the transition to a decarbonized economy,” Jealous said.
Looking ahead: Several Republican attorney generals have threatened to take legal action against the rule – and if a case makes its way up to the Supreme Court, the conservative majority on the court could be favorable to those initiating the lawsuit. Earlier this year, SCOTUS curbed the executive powers of the Environmental Protection Agency in West Virginia v. EPA, arguing the agency had little authority to regulate greenhouse gas emissions from existing power plants without a clear authorization from Congress. Read more from our Zach Halaschak on the rule here.
Welcome to Daily on Energy, written by Washington Examiner Energy and Environment writers Breanne Deppisch (@breannue_dep) and Nancy Vu (@NancyVu99). Email bdeppisch@washingtonexaminer dot com or nancy.vu@washingtonexaminer dot com 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.
SOLAR INSTALLATIONS, BUOYED BY IRA INCENTIVES, SAW 51% JUMP IN 2023: The U.S. saw a record 32.4 GW of new solar power capacity in 2023, according to a new report from Wood Mackenzie and the Solar Energy Industries Association—a more than 50% jump from the previous year, and a sign of momentum that analysts expect to continue through 2024.
The report cited the Inflation Reduction Act as a key driver of solar growth, as companies increasingly look to cash in on its subsidies.
Texas and California continued to dominate in solar installation: In Texas, utility-scale installations saw a record increase of 77%, year-on-year, while California installed the highest capacity of residential and commercial solar.
“A high case for U.S. solar with increased supply chain stability, more tax credit financing and lower interest rates would increase our [solar installation] outlook [by] 17%,” Wood Mackenzie analyst and the study’s lead author, Michelle Davis, said in a statement.
“A low case with supply chain constraints, less tax credit financing and static interest rates would decrease our outlook [by] 24%,” she added.
This year, they expect growth to continue in all areas, with commercial, community, and utility-scale solar installations seeing projected increases of 19%, 15%, and 26%, respectively.
CUBA SHUTS OFF PUBLIC LIGHTS AS ENERGY CRISIS DEEPENS: Cuba abruptly switched off the lights for nearly three-quarters of the public yesterday during peak consumption, a last-ditch effort to cut costs as the country grapples with a deepening economic and energy crisis.
The government-ordered blackouts are not new, though their frequency has increased in recent months due to aging energy infrastructure that is overdue for repair and a shortage of fuel used to power its grid.
The country has in large part blamed sanctions levied during the Trump administration. But Cuba has also seen a sharp drop in foreign food, medicine, and fuel imports in recent months—in February, for example, officials said they only received 46% of planned fuel imports for the month, leaving them at a deep deficit and forcing more public blackouts in nearly everywhere besides the capital city of Havana.
A phone survey Reuters conducted found that residents in many provinces have been enduring daily blackouts ranging from six to 12 hours.
One 40-year-old state employee in Cuba’s eastern Guantanamo province said of the blackouts: “[T]he power goes out for four hours twice a day and it is unbearable because of the heat.” Another restaurant owner on the other end of the island bemoaned the havoc the daily outages have wreaked on his business, as they cause liquids and meats to defrost. Read more on the blackouts here.
CLIMATE GROUPS MOVE TO STOP RELICENSING OF DIABLO CANYON: California climate groups filed a motion yesterday to intervene in the relicensing process for the Diablo Canyon Nuclear Power Plant, citing concerns over safety and environmental hazards.
The motion, filed by Friends of the Earth, Mothers for Peace, and the Environmental Working Group, comes less than a year after the Nuclear Regulatory Commission approved the Pacific Gas and Electric Company’s request to extend the lifespan of Diablo Canyon beyond its originally planned 2025 closure date.
In the filing, petitioners said they are “highly concerned” about extending the life of Diablo Canyon— citing both high costs for consumers and “extreme safety and environmental hazards” in keeping the plant online. They also asked the Nuclear Regulatory Committee to hold a hearing to assess any safety risks associated with relicensing Diablo.
Continued operation of the plant, the groups said, “hurts the state’s shift to safe, renewable energy and prolongs the risk of a disaster at the plant.”
Why it matters: Diablo is the single largest energy source in California, generating roughly 2,200 megawatts of carbon-free power, or roughly 17% of the state’s total zero-carbon power, according to the EIA. It’s also an important source of reliable, carbon-free power that can augment the state’s power grid as it looks to meet rising peak demand during periods of extreme weather and move to add more renewables to the grid. Read more from Breanne here.
NEW RUBIO BILLS WOULD BLOCK CHINESE EV IMPORTS: Sen. Marco Rubio introduced three new bills aimed at preventing China from “flooding” U.S. auto markets with exports of their electric vehicles, amid fears that the cheaper-made EVs will allow China to take advantage of a loophole in trade policy to evade tariffs and sell more vehicles in the U.S.
The legislation is a “multi-pronged” effort to protect U.S jobs and stop a feared influx of cheaper Chinese-made EVs, Rubio said— an effort that has taken on new significance following the news that Chinese EV maker BYD will open an EV factory in Mexico.
One bill would extend the foreign entities of concern designation to vehicles that are financed by an adversary in a third country (such as China’s planned BYD plant in Mexico)—treating the vehicles as if they originated directly from the adversary’s territory.
Another would impose a flat tariff of $20,000 on all Chinese-made vehicles entering the U.S., to combat what Rubio described as a disproportionate advantage of lower-price Chinese cars.
The third bill would require all imported vehicles hoping to receive federal subsidies to comply with rules of origin and labor value criteria set under the U.S-Mexico-Canada Agreement, or USMCA.
“America’s existing tariffs, once effective, are now insufficient to counter China’s newest strategies,” Rubio said in a statement announcing the legislation. The news comes just days after the White House announced that it is investigating Chinese EV imports and whether they pose risks to national security. Read more on that here.
GULF STATE OIL MAJORS EYE U.S. LNG PROJECTS FOR INVESTMENT: Oil majors Saudi Aramco and the Abu Dhabi National Oil Company (ADNOC) are in talks to invest in U.S LNG projects, in a bid to compete with regional rival Qatar and help meet soaring global demand.
Reuters reports that Saudi Aramco is looking to invest in phase two of the Port Arthur-based Sempra Infrastructure Port, while UAE’s state-owned oil giant ADNOC is discussing investments with U.S. LNG firm NextDecade for a new offtake at its $18 billion Rio Grande export hub.
Industry groups have expressed fears over the Biden administration’s recent pause on new project approvals. And some investors have hesitated to back similar projects because of ESG pressures. “The message is: If ESG focussed banks won’t finance U.S. projects, someone will,” Kaushal Ramesh, Rystad Energy’s vice president for LNG research, told the outlet.
BARRASSO PROBES DOE MEMBERS’ MEETING WITH CHINESE OFFICIALS: Senate Energy and Natural Resources Committee ranking member John Barrasso is blasting Energy Department officials for quietly meeting with Chinese government officials and members of the Chinese Communist Party on climate change and reducing emissions, claiming these meetings raised national security concerns and questions about the department’s transparency, Nancy reports.
In a letter sent to Energy Secretary Jennifer Granholm on Monday, the Republican conference chairman cited several Chinese media outlets to outline three separate meetings that occurred between CCP and People’s Republic of China figures and DOE officials, one of whom was Deputy Energy Secretary David Turk. Barrasso claimed that these meetings “went beyond mere diplomatic courtesies,” and instead served as “forums” where U.S. research was offered up to benefit Chinese companies and, by extension, the CCP.
“The fact that DOE engaged in such misguided interactions, especially in light of the People’s Republic of China’s (PRC) persistent and pervasive theft of the United States’ scientific and intellectual assets, is profoundly alarming,” Barrasso wrote. “The apparent desire to keep these meetings shielded from the American public’s scrutiny, with coverage found exclusively within Chinese media outlets, raises significant concerns about DOE’s transparency and broader collaboration with the CCP.”
Throughout the letter, Barrasso repeatedly highlights the Chinese officials’ political ties to argue the meetings represented a threat to security. Barrasso’s letter is the latest in a wave of criticism from Republican lawmakers who have hit the Biden administration for working jointly with China to combat emissions. The two countries are the biggest emitters of greenhouse gases and the largest powerhouses for renewable technologies.
Barrasso is requesting the department give further details about the meetings — more specifically, if there were national security and counterintelligence efforts conducted beforehand, and a list of agreements that officials may have entered with PRC officials, CCP members, or private citizens. The senator is also probing into why the DOE chose not to publicize the meetings, in contrast to Chinese media outlets. Read more from Nancy here.
RUNDOWN
Reuters Norway ends dispute with reindeer herders over wind farm
E&E News Elon Musk blasts left-wing group that attacked German Tesla plant
