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FOLLOWING UP ON KERRY’S COAL BOAST: Climate envoy John Kerry’s boast yesterday that said the United States won’t have coal plants by 2030 could provoke fossil fuel constituencies whose buy-in the Biden administration needs as it pushes its climate agenda.
The State Department tried to clean up Kerry’s comment by saying he was simply reiterating that the U.S. will have to eliminate coal (without carbon capture) in order to meet President Joe Biden’s pledge to reach 100% carbon-free electricity by 2035.
“Reaching this goal will require dramatically slashing emissions from coal power during this decade,” a State Department spokesperson added.
But even so, Kerry’s comment is among the most explicit to-date of a Biden official making clear that the administration sees no role for coal, the dirtiest fossil fuel, in the future power grid. His statement also risks oversimplifying the task at hand to move entirely off coal for power, which has declined dramatically, due to competition from natural gas and renewables, but still provides nearly 25% of U.S. electricity.
Joseph Majkut, energy security and climate change director at the Center for Strategic and International Studies, said the U.S. will be burning “a lot less coal” by 2030 due to market forces, but getting to “zero is hard” absent new regulations or a carbon price.
Biden is already facing an uphill battle to convince people in fossil fuel-dependent regions that his infrastructure and clean energy investment plan won’t leave coal, oil, and gas workers behind. Unions that represent fossil fuel workers are skeptical of Biden’s pitch to replace these jobs with ones in clean energy, given there is generally a mismatch between where energy jobs are getting lost and where new ones are created.
“Coal states and communities will need help managing the energy transition, but we need to engage them where they are,” Majkut told Josh.
Republicans were more direct in citing Kerry’s comment as evidence that Biden’s pitch to fossil fuel workers isn’t sincere.
“Next time the Biden administration says it cares about coal communities, please remember this,” tweeted the account for Republicans of the Environment and Public Works Committee, led by Sen. Shelley Moore Capito of West Virginia, a major coal- and natural gas-producing state.
Capito’s fellow West Virginian, Democratic Sen. Joe Manchin declined comment when asked to respond to Kerry.
Brandon Dennison, founder of Coalfield Development Corporation in Wayne County, West Virginia, told Josh that most fossil fuel workers his group interacts with know where Kerry “stands on the issue of coal,” so his comment wasn’t likely to make major waves.
“The reality is that coal is a declining industry, so it’s really not in the workers’ best interests to keep propping up that industry,” Dennison said, while adding “a broad statement that all coal will be gone by 2030 is pretty unrealistic.”
Biden tries to deliver for coal workers: The Biden administration, meanwhile, is touting efforts in the bipartisan infrastructure bill — soon to be signed into law — and its larger Build Back Better Act to support fossil fuel workers.
The bipartisan legislation creates a new $750 million Department of Energy grant program to support clean energy manufacturing projects in regions that have lost coal mines or plants, and would boost funding in a program employing workers to clean up abandoned mine sites.
Democrats’ larger climate and social spending bill provides funding to help rural community electric cooperatives pay off outstanding debt to retire coal plants and replace them with renewable energy and energy efficiency.
Their proposed new Climate Conservation Corps could also be helpful in Appalachia for creating jobs, Dennison said.
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BUT…US COAL APPETITE IS GROWING WITH HIGHER NATURAL GAS PRICES: U.S. coal consumption in the power sector will rise 18% this year in response to higher natural gas prices, the Energy Information Administration projects in its latest Short-Term Energy Outlook.
Power generation from coal has not increased as much to offset rising gas prices as in similar circumstances in the past, EIA said.
But it’s picked up enough that the share of U.S. electricity from coal rises from 20% in 2020 to about 23% in 2021 and 22% next year.
That bump means coal-related carbon emissions will rise by 18% this year, after falling 19% during the pandemic year in 2020.
One more thing from the EIA report: Biden is right to expect relief from high oil and gasoline prices beginning next year, EIA projections show.
Oil production from OPEC+ and the U.S. will outpace slowing growth in global demand next year and contribute to Brent crude prices declining from current levels — averaging $84 per barrel last month — to an annual average of $72 per barrel in 2022.
COP26 DRAFT DEAL CALLS FOR COAL PHASE-OUT: Organizers of COP26 released this morning a preliminary draft of an agreement on actions to take to keep the goals of the Paris agreement alive.
The language of the so-called “cover decision” — basically the political communique to come from the conference — is likely to change and its most contentious provisions could be weakened before it’s finalized by the end of this week.
The early draft is generally seen as an aspiration by the presidency of the U.N. conference, in this case, the United Kingdom. Nonetheless, the draft contains language that goes further than that of the Paris agreement. It calls upon countries “to accelerate the phasing-out of coal and subsidies for fossil fuels,” although it sets no deadlines.
It asks nations to revisit and strengthen their emissions reduction pledges, or NDCs, by the end of next year, a quicker timeline than the current schedule of updating every five years.
It also “reaffirms” the current more ambitious goal of the Paris agreement to limit warming to 1.5 degrees Celsius, but it does not commit to meeting that threshold.
The draft text does not mention the contentious “Article 6” of the climate pact, which would establish rules for a global carbon trading market. That remains one of the key unresolved issues as COP26 nears its end.
Early reactions: David Waskow, International Climate Director of the World Resources Institute, noted to reporters on a press call that setting a faster process for updating emissions pledges would be particularly important, if it holds.
“Having that clarity around that process and that countries really are expected and on the hook to do something to adjust so we would be on track to meet the temperature targets is absolutely critical,” Waskow said.
BIDEN VOWS TO ADDRESS INFLATION CAUSED BY HIGH ENERGY PRICES: Biden this morning blamed high energy costs for driving inflation to its highest annual rate in 30 years.
Consumer prices rose to 6.2% in the year ending October, the Department of Labor reported today, and will add to widespread fears about inflation as Biden and Democrats look to pass their $1.75 trillion climate and social spending plan.
“The largest share of the increase in prices in this report is due to rising energy costs,” Biden said in a statement, while noting the price of natural gas has fallen in recent days. The EIA had previously projected Americans will see home-heating bills rise by 30% on average due to high natural gas prices.
Biden did not specify specific actions he might take to try and reduce energy costs, but said he directed the National Economic Council to “pursue means” to try to address the issue.
He also reiterated a previous request that the Federal Trade Commission look “to strike back at any market manipulation or price gouging” in the energy sector.
Fallout for BBB: Manchin, the key swing vote, has cited inflation as a reason Democrats should heed caution with its aggressive spending agenda.
This morning, the West Virginia Democrat reaffirmed his alarm, warning the threat is “not transitory and is instead getting worse.”
“From the grocery store to the gas pump, Americans know the inflation tax is real and DC can no longer ignore the economic pain Americans feel every day,” Manchin tweeted.
Environmental groups, though, say passing the Build Back Better Act, which provides clean energy tax credits and other “low-cost” financing provisions, would relieve high energy prices.
Democrats’ climate and social spending bill would save customers of utility companies $9 billion annually by the end of the decade, according to a recent analysis from RMI. West Virginia ratepayers in particular could save over $429 million each year if policies are enacted as currently proposed in the House version of the bill.
The bipartisan infrastructure bill, meanwhile, invests $3.5 billion in the Weatherization Assistance Program to reduce energy costs for low-income households, more than double the current funding level.
PRODUCER GROUP OPPOSES ‘MANIPULATING’ OF MARKET WITH SPR: Independent oil producers are coming out strongly against the possibility of the Biden administration releasing supplies from the nation’s Strategic Petroleum Reserve to push gasoline prices downward.
The Independent Petroleum Association of American said it opposes any attempt to “manipulate” the market through an SPR release.
“The SPR was created to deal with crude oil supply emergencies,” IPAA said. “There is at this time no crude oil supply emergency either domestically or worldwide.”
COP YIELDS NEW VEHICLE PLEDGE: A mix of national and local governments and major vehicle manufacturers agreed to “work towards” an established timeline to ensure all new car and van sales involve zero-emissions vehicles.
The declaration established an emissions-free target of 2035 for “leading markets” and 2040 for the rest.
Signatories include the United Kingdom, Chile, New Zealand, and India, governments from a range of cities like Barcelona and Dallas, as well as automobile manufacturers Ford Motor Company, General Motors, and Volvo.
Neither the U.S. nor China are among the signatories. Volkswagen and Toyota are also absent.
DOT DROPS AVIATION CLIMATE PLAN: Transportation Secretary Pete Buttigieg announced the “U.S. Aviation Climate Action Plan” yesterday in Glasgow outlining how the FAA hopes to enable the sector, which was responsible for about 2.7% of total domestic emissions in 2019, to become net-zero by 2050.
The plan outlines the demonstration of new aircraft technologies through the Sustainable Flight National Partnership to help improve fuel efficiency by as much as 30%, as well as operational improvements within the air traffic management to cut down on excess fuel burn and electrification of airport vehicles, as key pieces to its net-zero roadmap.
Expansion of sustainable aviation fuel is perhaps the most important variable outlined in the plan, as it would allow airlines to continue operation of their current fleets through replacement of petroleum-based fuels rather than having to await development of electric or hydrogen-powered aircraft to begin decarbonizing.
BLUEPRINT FOR DECARBONIZING INDUSTRY: A coalition of industrial firms and NGOs is nudging lawmakers to do more to help industry, the third-highest emitting sector, achieve a net-zero-by-2050 target.
The Industry Innovation Initiative, which includes a range of corporate and environmental stakeholders from Dow Chemical to the National Wildlife Federation, released a blueprint urging lawmakers to expand the 45Q carbon capture tax credit — which Democrats’ budget reconciliation proposal would grow from $50 to $85 per ton for industrial facilities — and to incentivize electrification of industrial processes and clean hydrogen hubs, among other things.
BANKING NOMINEE: ‘WE WANT’ FOSSIL FIRMS TO GO BANKRUPT: Saule Omarova, Biden’s nominee to be comptroller of the currency, said in a resurfaced video from March that “we want” oil and gas companies to go bankrupt in order to fight climate change, the Washington Examiner’s Zach Halaschak reports, although Omarova added that such bankruptcies would create economic displacement that the economy cannot afford.
The Rundown
New York Times In France, the people the climate summit forgot
Washington Post Harnessing the energy of the ocean to power homes, planes and whisky distilleries
Reuters Global carmakers now target $515 billion for EVs, batteries
Calendar
WEDNESDAY | NOV. 16
10:30 a.m. Rayburn 2123 The House Energy and Commerce Committee will hold a joint subcommittee hearing entitled “Securing America’s Future: Supply Chain Solutions for a Clean Energy Economy.”
