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WAITING ON INTERIOR: Industry groups growing impatient with the Biden administration’s indefinite oil and gas leasing pause saw this week as a prime opportunity for the Interior Department to release its report on the future of the leasing program.
But so far at least, it appears the stars have not quite aligned in the way industry groups imagined.
Yesterday, Interior Secretary Deb Haaland was in Denver, Colorado meeting with Gov. Jared Polis and other state leaders to discuss the regional drought, and today she is in Grand Junction visiting the relocated Bureau of Land Management headquarters.
BLM oversees the leasing program, and there is a lot of federal land production in the Western Slope region home to Grand Junction.
“Hardworking oil and natural gas workers in Colorado and across the country deserve to know when lease sales will resume and when the Interior Department’s report will be released,” Kathleen Sgamma, president of Western Energy Alliance, said in a Denver Post op-ed ahead of Haaland’s visit. “The ongoing delay is creating a cloud of uncertainty over their jobs and the communities that rely on revenues from responsible energy development.”
Haaland, however, has no news to report.
“The review is coming very, very soon. We promised early summer,” Haaland told reporters in Denver, before asserting that it remains early summer.
(Official summer started June 20 and ends September 22, so August 7 would represent the midpoint, giving Haaland a few more weeks to play with if we are being technical about it).
It’s now been six months since President Joe Biden ordered a review of the federal leasing program and froze new oil and gas leasing on public lands and waters, and more than a month since a federal judge ruled that pause is illegal.
Haaland has been evasive about whether the agency’s practices have changed since the court ruling, other than to say Interior was reviewing the decision and planned to abide by it. Lease auctions are held quarterly, with the third-quarter sales starting in the fall.
In the meantime, Interior is approving permits to drill for oil and gas on public land at the highest rate since George W. Bush’s administration, more than fulfilling a promise that fossil fuel development would continue on existing leases even absent new leasing.
But industry groups are eager to know whether Interior intends to make the indefinite pause on leasing permanent or propose reforms to raise costs and impose stricter regulation on oil and gas development going forward instead.
As summer ticks on, stay tuned.
Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writer Josh Siegel (@SiegelScribe). Email [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.
DEMOCRATIC CARBON TARIFF PLAN SPLITS US BUSINESS: Democrats’ gambit to impose a fee on imports of carbon-intensive goods is being met with a split reaction among business interests that stand to benefit or suffer from a new form of protectionist trade policy linked to addressing climate change, as I report for a story this morning.
Sen. Chris Coons of Delaware and Rep. Scott Peters of California say their legislation introduced this week is intended to protect the competitiveness of U.S. industries exposed to domestic climate rules, and that could be further strained as the Biden administration develops more aggressive policies.
It would force companies abroad that are not subject to strict environmental rules and want to sell commodities to the United States to pay a price for each ton of carbon dioxide they emit in making their products, which would remove any competitive advantage they might otherwise have.
Who wins? Domestic industry could be the big winner. U.S. heavy industries, including steel, already have an advantage over China, India, and even Europe in producing goods at lower rates of carbon emissions.
Kevin Dempsey, president and CEO of the American Iron and Steel Institute, told me “it’s a no-brainer that a BCA is a good idea.”
He said a U.S. border fee would remove the “perverse incentive” for domestic companies to import dirtier steel from places such as China with weaker environmental rules.
“We should make sure we are incentivizing the use of the cleanest steel, which is steel made in the U.S.,” Dempsey said.
Who loses? But other industries that rely on imports of the implicated products could see their prices rise and pass those on to consumers.
Take the U.S. refining sector, for example, that relies on imports for petroleum to which carbon fees might apply. Refiners of gasoline could face two unappealing prospects: passing new costs to buyers, leading to higher pump prices, or sacrificing profit, said Kevin Book, managing director of ClearView Energy Partners.
“There are some industries heavily reliant on imports from economies that are emissions-intensive that could be losers,” Book said. “It will raise prices on the end-user, and that will destroy demand.”
Read more in this week’s Washington Examiner magazine.
RELATED…NEW BIPARTISAN BILL TO ADDRESS STEEL EMISSIONS: Reps. Anthony Gonzalez, Republican of Ohio, and Conor Lamb, Democrat of Pennsylvania,, who represent the heart of steel country, introduced legislation yesterday that would invest in innovation to complement voluntary emissions reduction pledges from U.S. steel companies.
The U.S. has the lowest carbon emissions per ton of steel produced out of the seven largest steel-producing countries, largely thanks to the fact that about 70% of domestic steel is produced using electric arc furnaces that use entirely recycled scrap, producing a much lower carbon footprint than blast furnaces.
But the industrial sector is on pace to pass power plants and vehicles as the top source of U.S. emissions — and steel manufacturing is a major contributor.
One of the problems is that the chemical processes of producing steel, cement, and iron inherently require the use of fossil fuels, and there are few substitutes that would work the same way.
The SUPER Act would establish the Energy Department’s first research, development, and deployment program for advanced low-emissions steel technologies
OIL AND GAS LOBBY BACKS MANCHIN’S ENERGY INFRASTRUCTURE BILL: The American Petroleum Institute yesterday endorsed aspects of Democratic Sen. Joe Manchin’s sprawling energy infrastructure legislation, and praised the Energy and Natural Resources Committee for passing it last week.
Manchin, the committee’s chairman, said the legislation will serve as the legislative text for portions of the broader bipartisan infrastructure bill that still needs to be finalized.
In a letter to Manchin, API CEO Mike Sommers said the group supports a provision of the bill creating a $5 billion program to combat methane emissions by employing oil workers to plug leaking “orphan” oil and gas wells.
API also endorsed another element providing funding for pipelines to transport captured carbon dioxide. And it praised the legislation’s focus on accelerating RD&D of hydrogen paired with carbon capture.
“We want to thank you and your Committee for advancing this important, common-sense legislation to address the climate challenge in a manner that supports innovation, good jobs, and a strong economy,” Sommers said.
TRANSIT FUNDING HOLD-UP IN BIPARTISAN INFRASTRUCTURE DEAL: Transit money has emerged as a last-minute obstacle for a bipartisan infrastructure deal that proponents hope to finalize next week, NBC News and others reported last night.
Democrats want more funding for public transit — a key vehicle to promote zero-emissions buses, for example — while Republicans want to spend on highways, as the two sides haggle over the ratio of money distributed between the two transportation modes.
Democrats says 80% of the funds should go to transportation projects for highways and 20% for transit, a ratio Congress has followed for 39 years. Republicans want to break that precedent so that less than 20% is for mass transit.
“We have a once-in-a-generation opportunity to invest in our nation’s infrastructure and create a better, more connected future for the American people,” said Democratic Sens. Sherrod Brown of Ohio and Tom Carper of Delaware, the chairs of the Banking and Environment and Public Works panels respectively, in a statement. “We cannot do that if Republicans attempt to strike transit funds and programs from the infrastructure package.”
TRANSMISSION LINKAGE COULD HAVE HELPED TEXAS DURING POWER CRISIS: Each additional gigawatt of transmission capacity connecting the Texas power grid with neighboring states in the Southeast could have saved nearly $1 billion and kept the heat on for approximately 200,000 homes during the state’s deep freeze in February, according to a report released yesterday by the American Council on Renewable Energy.
Texas, famously, is the only state in the Lower 48 with its own power grid, managed by the Electric Reliability Council of Texas.
The new report suggests that Texas’ island-like status contributed to the state’s power crisis caused by unprecedented cold. Since it is disconnected from the larger regional grids of the East and West, Texas is unable to bring in power from other states to fill gaps in demand.
Texas has resisted calls, including from Energy Secretary Jennifer Granholm, for the state to abandon its independent grid model and link up with the national grid to enable it to import power from neighboring states in emergencies.
“As severe weather events become more frequent, our balkanized power grid is increasingly unable to deliver reliable electricity to consumers who need it,” said ACORE president and CEO Gregory Wetstone.
RUSSIA LINKS SIBERIA FIRES TO CLIMATE CHANGE: Colossal fires are burning through Siberia, home to one of the coldest places on Earth, during a record heat wave, writes the Washington Examiner’s Brady Knox.
Fires have broken out all across the taiga, even in the northwest province of Karelia, which had to evacuate 600 people, according to the Russian Emergency Situations Ministry. The main region affected is the Sakha Republic, a large Russian province in eastern Siberia.
At the current rate, the total emissions produced by the fires this year could surpass the total last year, which set a record, according to data collected by the Copernicus Atmosphere Monitoring Service.
Russian officials blame the fires on climate change.
“Of course, there is only one reason — global climate changes. They are taking place, we see that it is getting hotter every year in Yakutia [another name for the Sakha Republic]. We are now living in the hottest, driest summer that has been in the history of meteorological observation in Yakutia since the end of the 19th century,” Aisen Nikolaev, head of the Sakha Republic, told Yakutia 24.
A recent study by an international team of scientists agreed with this assessment.
The Rundown
Cincinnati.com FirstEnergy charged in Ohio bribery scheme, agrees to deferred prosecution settlement for $230 million
Wall Street Journal Electric-vehicle sales growth outpaces broader auto industry
Reuters Next step for EVs: Design batteries to strengthen car, extend range
New York Times Climate crisis turns world’s subways into flood zones
Bloomberg Clean energy producers are eyeing old coal plants — for the wiring
Politico US and Germany have Nord Stream 2 deal, but lack authority to implement it
Calendar
TUESDAY | JULY 27
10 a.m. 366 Dirksen. The Senate Energy and Natural Resources Committee will hold a hearing to examine the White House Fiscal Year 2022 budget request for the Interior Department.
10:30 a.m. 2123 Rayburn. The House Energy and Commerce Committee’s energy subcommittee will hold a hearing on oversight of the Federal Energy Regulatory Commission.
2:45 p.m. The Bipartisan Policy Center will host a webinar to discuss how the U.S. can strengthen its domestic supply chain to secure sustainable critical minerals for the energy transition. Republican Sen. Lisa Murkowski of Alaska will participate.
WEDNESDAY | JULY 28
12 p.m. OurEnergyPolicy will hold a webinar on proposed federal clean energy standards, with opening remarks by Democratic Sen. Tina Smith of Minnesota.
3 p.m. The Center for Climate and Energy Solutions will host a fireside chat with Democratic Sen. Sheldon Whitehouse of Rhode Island to discuss his carbon pricing bill, the “Save our Future Act.”
THURSDAY | JULY 29
10 a.m. 406 Dirksen. The Senate Committee Environment and Public Works Committee’s chemical safety subcommittee will hold a hearing on three of Biden’s nominees to be members of the U.S. Chemical Safety and Hazard Investigations Board.
12 p.m. The American Council for Capital Formation will host a webinar conversation with Reps. Kurt Schrader, Democrat of Oregon, and David McKinley, Republican of West Virginia, on their clean electricity standard bill, the Clean Energy Future through Innovation Act.
