Daily on Energy: What to expect to follow youth victory in Montana climate case

The first is the issue of implementation: The state’s Republican-led legislature will be tasked with determining how to bring the court’s decision – that the state violated the youths’ constitutional right to a “clean and healthful environment” by approving new fossil fuel projects – into compliance, meaning that any substantive changes could be far off.

Then, there’s the issue of an appeal: Montana Attorney General Austen Knudsen’s office vowed to appeal the decision to the Montana Supreme Court. Emily Flower, a spokeswoman for Knudsen, described the judge’s decision as “absurd,” and noted that similar cases failed to gain traction in other U.S. states.

“Their same legal theory has been thrown out of federal court and courts in more than a dozen states,” Flower told the Washington Examiner in an email. “It should have been here as well.”

Importantly, Montana is not like most states: Coal-fired power plants provided the single largest share of Montana’s electricity generation in 2022, according to the U.S. Energy Information Administration, accounting for roughly 42% of in-state power generation, and more than most U.S. states.

And the state constitution contains a unique provision: The plaintiffs argued that Montana’s Environmental Policy Act, which requires state agencies to weigh environmental health hazards against the development of new energy resources—is unconstitutional, since it violates a provision in the state’s constitution to “maintain and improve a clean and healthful environment” for current and future generations.

But states hoping to follow in Montana’s footsteps could face a much more complicated path.

Our Children’s Trust, the nonprofit legal group that represented the Montana lawsuit, has filed suits in all 50 U.S. states and has active cases in Florida, Utah, Virginia, and Hawaii. It has also raised $20 million to bankroll its lawsuits in U.S. states and federal court.

Climate change cases as a whole have been particularly difficult to advance in many U.S. states, which lack the “clean and healthful environment provision” language in Montana’s constitution (or something similar). Just several others, including Pennsylvania, Massachusetts, New York, and Hawaii, contain such provisions.

Hawaii, where Our Children’s Trust also has an active lawsuit, states in Section 9 of its constitution that each person has “the right to a clean and healthful environment … including control of pollution and conservation, protection and enhancement of natural resources.”

Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Breanne Deppisch (@breanne_dep) and Nancy Vu (@NancyVu99). 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.

AS OIL EDGES TOWARDS $90 PER BARREL, LITTLE RELIEF IN SIGHT: Oil prices are edging closer to $90 a barrel, with little sign of a let-up in the demand, Bloomberg reports. 

Across the global market, record crude demand has driven up the premiums that traders pay to get cargoes. The differentials for spot cargoes from the Middle East have surged recently as buyers in China grab supplies. In the North Sea, a vital window has seen a spate of bidding, while Asian buyers have also brought millions of barrels of U.S. crude.

The move comes as refining margins have increased in recent weeks. The International Energy Agency said on Friday that global oil consumption surged to a record in June, and should rise further on average later in the year.

Futures for Brent crude have increased by nearly 20% since late June, Bloomberg notes, underpinned by supply tightness and production cuts by Saudi Arabia and Russia.

AUTO UNION RESPONDS TO BIDEN IN CONTRACT NEGOTIATIONS: The United Auto Workers appeared to take President Joe Biden’s statement on its ongoing contract negotiations with Big 3 automakers as an endorsement of its position, saying in a statement yesterday it shares in Biden’s sentiment that battery factory workers should share the “same strong pay and safety standards” as traditional auto manufacturing plants.

In fact, that’s not quite what Biden said: In his statement yesterday, Biden said he supports “a fair transition to a clean energy future,” which he said “means ensuring that Big Three auto jobs are good jobs that can support a family … and ensure that when transitions are needed, the transitions are fair and look to retool, reboot, and rehire in the same factories and communities at comparable wages, while giving existing workers the first shot to fill those jobs.” Notably, his statement did not call for joint battery factories to be included in the talks, a key area of contention that has emerged between Biden and the auto union.

Why it matters: Contract talks are due to expire in less than a month, and UAW President Shawn Fain said as recently as last week that the union’s more than 150,000 employees could strike if the auto companies do not meet their demands.

The White House did not respond to the Washington Examiner’s request for comment or to clarify Biden’s original statement.

SEC SCRUTINIZES ESG ASSET MANAGERS AS PART OF WIDENING INQUIRY: Lawyers from the SEC have issued documents requests and subpoenaed several asset managers related to ESG marketing. The Washington Examiner’s Zachary Halaschak reports that lawyers from the SEC’s enforcement division sent the request as it gears up to more closely scrutinize the ESG space, and in particular seek to ensure that funds that advertise themselves as climate-conscious are not being deceptive.

INCHING CLOSER TO IRA ANNIVERSARY: Ahead of the Inflation Reduction Act’s one year anniversary, Majority Leader Chuck Schumer is drawing a contrast between former President Donald Trump and Biden, following Trump’s latest indictment in Georgia last night.

“Yesterday, you had the former president who has been indicted for trying to overthrow the election,” Schumer said in a press call with reporters. “And tomorrow, you have a president who is celebrating a one-year anniversary of significant legislation.”

Why it’s important: The major pieces of legislation that were passed in the last Congress by Democrats is their best way of showing voters what the party has done in Washington for the last two years – and could be their ticket to retaking both chambers and the White House. Plus, they’re not missing opportunities to take their shots at Republicans.

“The best proof that this is a success is all the Republicans who are showing up when a new factory opens up, when a new clean energy facility opens up,” Schumer said. “And they’re coming because they know that there are so many good paying jobs coming in across the whole country.”

A look ahead: Schumer said that he was “fully supportive” of additional disaster relief funding included in the Biden administration’s request for a supplemental, following the Hawaii wildfires and several natural disasters that devastated different parts of the country throughout the summer.

What’s in the supplemental: Biden requested $40.1 billion in new emergency funding last Thursday, which included $12 billion to fill a projected gap in funding for the Federal Emergency Management Agency. FEMA is expected to face a nearly $4.3 billion shortfall by Sept. 30.

The issue: The supplemental funding complicates an already intense spending battle on the Hill, where GOP hardliners have signaled they would reject a stopgap bill that fails to implement steep spending cuts. The majority leader said he had spoken with Speaker Kevin McCarthy at the end of July on the issue of spending, and stated that he was pleased that the GOP leader recognized the need for a continuing resolution in September.

HOTTEST JULY … EVER? Earth broke a new record with its hottest July in 174 years — and likely its hottest month ever documented, according to a new study by the National Oceanic and Atmospheric Administration, Nancy reports. 

The study, published on Monday, recorded that the planet’s average global surface temperature was approximately 2 degrees Fahrenheit above the 20th-century average, ranking it as the warmest July in NOAA’s 174-year record. Since July is the globe’s warmest month, the study says it’s likely that July 2023 was also likely Earth’s hottest month on record.

The study also notes that the month set a record for the lowest global July sea ice extent coverage on record, with there being about 470,000 square miles less than the previous record low from July 2019. The Antarctic sea ice coverage ranked lowest on record for a third consecutive month, running 1 million square miles below the 1991-2020 average. Read more on that here. 

BIOFUELS REDUCE EMISSIONS BY MORE THAN 80%: The Global Centre for Maritime Decarbonisation found carbon emissions fell 83% when a vegetable oil biofuel blend was used rather than marine gasoil in a trial for a dual-fuel liquefied petroleum gas carrier, Reuters reports.

This was the third out of five supply chain bunkering trials that GCMD has undertaken as part of an $18 million project to test different biofuel blends to reduce carbon emissions. The trials are meant to help the fuel and shipping industries come up with green fuel alternatives to meet the International Maritime Organisation’s 2030 and 2050 decarbonisation targets. Read more on that here.

The Rundown

Financial Times US government-backed start-up on course to become mining unicorn

Bloomberg Closing coal plants proves a hard sell for big global banks