Daily on Energy, presented by API: Granholm pick suggests Biden focus on electric vehicles

Granholm, when she was governor, worked with Biden, then Barack Obama’s vice president, on the 2009 bailout of auto companies, saving the dominant industry in her state.

Since then, she has promoted auto companies transitioning to electric vehicles as a way to revive the U.S. manufacturing base and create new jobs in clean energy.

“Investing in a low-carbon economy will ensure that Michigan remains a leader in the auto industry,” Granholm said in a November op-ed in the Detroit News, a pitch of sorts for working in Biden’s Cabinet in which she called for policymakers to spend big on clean energy coming out of the coronavirus.

She credits Michigan-based Ford and General Motors with producing more EVs, but said the “private sector needs greater support and political will from our policymakers to help us fully realize the potential of a zero-carbon future.”

Granholm can help companies realize that future through an office of DOE’s clean energy loan program called Advanced Technology Vehicle Manufacturing. The Trump administration mostly neglected the program, but Obama used it in 2010 to provide a $465 million loan to Tesla to build a manufacturing plant in Fremont, California.

Political connections to the auto industry: Dan Reicher, a former assistant secretary of Energy and DOE chief of staff under President Bill Clinton, told Josh that Granholm’s connections to the auto industry gives her a level of political credibility to push companies to transition away from gas-powered vehicles.

“She’s smart on the issues, she’s savvy politically and will be an excellent Energy secretary, particularly in a tense time in D.C,” said Reicher, who worked with Granholm in the sustainability practice at RIDGE-LANE, a venture development firm. “With transportation now being the largest U.S. source of emissions, her intimate understanding of the auto industry will be really important.”

Building clean energy technologies at home: Paul Bledsoe, a former Senate Finance Committee staff member and DOE consultant, told Josh that Granholm would bring a domestic-manufacturing-centric vision of the clean energy transition, with a focus on not just growing electric vehicles, but other technologies such as advanced nuclear energy, direct air capture, and energy storage.

“Granholm shares Biden’s vision of reanimating the U.S. economy through clean energy infrastructure, technology innovation, and robust investments in electric vehicles and other U.S. manufacturing sectors,” said Bledsoe, who is now with the Progressive Policy Institute. “These approaches have the opportunity to gain support not only from industry and labor, but a great many Republicans who share these goals.”

It’s worth noting that two of Biden’s other appointees reported yesterday will enhance the focus on electric vehicles. Pete Buttigieg, his pick for Transportation secretary, would help oversee the writing of new tougher fuel efficiency rules, while Gina McCarthy, chosen as Biden’s domestic “climate czar,” helped craft the Obama administration’s strict vehicle emission standards.

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TRIP DOWN MEMORY LANE: It’s worth remembering, too, that the $1 trillion infrastructure plan Buttigieg proposed on the campaign trail had some significant climate elements to it, including beefing up electric vehicle tax credits to $10,000 per vehicle (from $7,500 currently).

Like Biden, Buttigieg is also keen to expand the nation’s electric vehicle charging network. His infrastructure plan included $6 billion in grants and loans for charging infrastructure. Bloomberg has reported Biden’s pledge to build out around 500,000 chargers could cost more than $5 billion.

In addition, Buttigieg has an eye toward making sure U.S. highways, bridges, water systems, and other infrastructure are resilient to the effects of climate change. His infrastructure plan included proposals for a $250 billion clean energy bank, tens of billions to replace lead pipes, and billions to prepare infrastructure for sea level rise.

Buttigieg could also play a key role in helping oversee the tightening of fuel economy standards, something Biden has promised to start work on in his first days in office. The nitty-gritty work on those standards, however, is likely to fall to whomever Biden chooses to lead the National Highway Traffic Safety Administration (a sub-agency within the Transportation Department), as well as his EPA administrator.

BIDEN’S PICK FOR CLIMATE OFFICE WINS PRAISE FROM LIBERALS: The Sunrise Movement, which has tried to hold Biden’s feet to the fire as he selects his climate team, called Biden’s reported pick of former EPA Administrator McCarthy to oversee his domestic climate agenda “a big victory.”

“McCarthy has the experience, clout, and vision to deliver historic action for the Biden administration,” said Sunrise Movement executive director Varshini Prakash. Both Prakash and McCarthy served on the Biden and Bernie Sanders unity task force focused on climate change, and Prakash said McCarthy “went out of her way to make sure my ideas were heard and centered because she understands the critical importance of listening to young climate activists.”

Picking a climate policymaking veteran like McCarthy signals Biden is likely to lean on executive action and regulation as he seeks to quickly implement his climate agenda. McCarthy had a hand in crafting the Obama administration’s big climate regulations, including the first greenhouse gas tailpipe limits, the first carbon limits for power plants, and the first methane limits for the oil and gas sector.

Biden is also reportedly tapping New York Gov. Andrew Cuomo climate aide Ali Zaidi, also an Obama administration veteran, as McCarthy’s deputy. In New York, Zaidi has overseen the rollout of new climate regulations across various economic sectors in the state.

API’S NEW PROGRAM TO CURB FLARING: The American Petroleum Institute is launching a program today encouraging companies to curb flaring, the practice of intentionally burning natural gas, which has become a significant contributor to greenhouse gas emissions.

As Josh reported this morning, API is expanding its Environmental Partnership initiative to include a program in which participating companies report data on how much they flare and share best practices on how to limit it.

API created the partnership in 2017 to encourage oil and gas companies to reduce leaks of methane.

What’s flaring? But it previously did not address flaring, which happens when companies burn extra unwanted natural gas as a waste that is produced in the course of drilling for oil.

Companies generally resort to flaring when there is insufficient pipeline or other infrastructure to transport the natural gas for use. Flaring primarily emits carbon, but some of the natural gas can escape as methane.

Reporting, but no targets: Participating companies will report their flaring intensity, which will be publicly released as part of the Environmental Partnership’s annual report.

Environmental groups critical of API’s effort, however, consider the reporting program weak because it does not require any overarching emissions reduction target of participating companies seeking to curb flaring.

Vanessa Ryan, manager of the carbon reduction team at Chevron and chairwoman of the Environmental Partnership said doing so would have discouraged smaller companies from participating in the program.

“We want anyone who wants to reduce flaring to be a part of this,” Ryan told Josh. “We don’t want to put in unnecessarily high barriers to join. If you have to have exemplary flaring performance to join, you probably won’t see big changes.”

Ben Ratner, a senior director with the Environmental Defense Fund+Business, told Josh that approach risks favoring quantity over quality.

“If their philosophy is to set the lowest possible bar to entice more companies to participate, it’s hard to say it will have a game changing impact,” he said.

MORE ENERGY DEPARTMENT FUNDING FOR ADVANCED NUCLEAR REACTORS: The Energy Department announced today it is providing another $30 million to U.S. companies developing advanced nuclear reactor technologies through its Advanced Reactor Demonstration Program.

The grant funding comes on top of $160 million DOE distributed in October to two companies that intend to develop and construct small nuclear reactors that can be operational this decade.

The new money is going to five additional companies for “risk reduction projects.” These projects are in their earliest phases and remain farther away from being ready for deployment — some 10 to 14 years from now.

“This is a way to spread the funding around to reduce the risk for a few other projects to achieve success, supporting a diverse spectrum of designs, technologies and applications,” Brett Rampal, nuclear team manager at the Clean Air Task Force, told Josh.

The projects receiving funding are: Kairos Power’s Hermes Reduced-Scale Test Reactor, Westinghouse’s eVinci Microreactor, BWXT’s Advanced Nuclear Reactor, Holtec’s SMR-160 Reactor, and Southern Company’s Molten Chloride Reactor Experiment.

OIL DEMAND PICKS UP: U.S. oil demand rose last week to 19.43 million barrels per day from 18.53 million b/pd the week prior, the Energy Information Administration said today in its Weekly Petroleum Status report.

Gasoline and diesel consumption both increased the week ending Dec. 11 while jet fuel demand slightly declined.

Crude inventories decreased by 3.1 million barrels after a record spike the previous week.

ARNOLD REALLY WANTS MARY NICHOLS AT EPA: Former California Republican Gov. Arnold Schwarzenegger said yesterday that he has been pushing the Biden team to choose California top air official Mary Nichols as EPA administrator, touting her as the “only one who can really pull it off and have the vision and the negotiation skills.”

“What you’ve done in California has been extremely successful, the most successful that anyone could have been,” Schwarzenegger told Nichols during a virtual event hosted by Veloz, an electric vehicle nonprofit that Nichols advises. Schwarzenegger said he has told Biden’s team, “We don’t need the Green New Deal. All we need is a copy of California.”

This isn’t the first time Schwarzenegger, who originally appointed Nichols to be California’s air chief, has called for her to be the EPA head. However, Nichols, once thought to be the frontrunner, has received some backlash from liberal environmental groups who say she has ignored the concerns of minority and low-income people who bear the brunt of pollution.

In recent days, Biden has reportedly been considering several other candidates to lead the EPA instead of Nichols.

Nichols, during an interview with Veloz, recalled her work on civil rights issues, talking about her experience attending the 1963 civil rights march in Washington and working to register black voters in Fayette County, Tennessee, when she was a college student.

ENERGY DEPARTMENT LOOSENS SHOWERHEAD RULES: The Energy Department issued a final rule yesterday that changes the regulatory definition for “showerhead,” allowing multi-nozzle fixtures to release more gallons per minute of water.

The move follows Trump’s complaints about weak water pressure coming from showerheads, faucets, and dishwashers.

In a separate action yesterday, the Energy Department finalized a rule creating a separate product class for home clothes washers and dryers that cycle in fewer than 30 minutes. The agency issued a similar rule in October for dishwashers that wash and dry dishes in under an hour.

GAS’ ROLE IN A CARBON-FREE GRID: The Progressive Policy Institute, a centrist Democrat research group, is calling on Biden to “strike a new bargain” with oil and gas companies to encourage the decarbonization of natural gas.

The institute released a report today arguing the Biden administration should embrace a role for gas in reaching its goal for carbon-free electricity by 2035, since an approach that relies entirely on renewables could lead to “high prices and low reliability.”

“Washington would acknowledge and support the role gas plays in enabling rapid deployment of renewable energy in exchange for industry’s commitment to make consistent progress toward zero carbon emissions,” the report says.

U.S. policymakers should work with industry to invest more heavily in carbon capture for gas plants, a nascent technology that has not been deployed in the U.S., and to adopt more ambitious goals to reduce methane emissions. Industry would accept stronger regulation of methane if Biden were to accept natural gas as a tool for decarbonization, the report argues.

BATTERY PRICES ARE FALLING: By 2023, average prices for battery packs will hover around the magic number — $100 per kilowatt hour — at which automakers should be able to produce and sell electric car at prices comparable to gas-powered cars, BloombergNEF says in new projections today.

Overall, the price of lithium-ion batteries has dropped 89% in the last ten years, to reach $137 per kWh this year, BNEF said. Battery pack prices of less than $100 per kWh were also reported for the first time, for certain batteries in electric buses in China, which BNEF head of energy storage research James Frith called a “historic milestone.”

MAKING RANK ON ENERGY EFFICIENCY: More states this year have adopted or improved energy efficiency targets and vehicles and appliance rules, but the coronavirus pandemic has slowed or deterred some efficiency efforts.

The American Council for an Energy-Efficient Economy released its annual scorecard this morning ranking states on its efficiency policies, listing California as the top performer after it approved $45 million in incentives for high-efficiency heat pump water heaters.

Massachusetts ranked second, followed by Vermont, Rhode Island, New York, and Maryland.

The worst performing states are Kansas, Mississippi, North Dakota, West Virginia, and Wyoming.

“A number of states see that they have to act aggressively now to cut carbon emissions, but others just aren’t acting urgently. We need to see more states follow the leaders here, and quickly,” said Steven Nadel, executive director of ACEEE.

Across the country, more than 300,000 energy efficiency workers are still unemployed from the pandemic.

The Rundown

New York Times To cut emissions to zero, US needs to make big changes in next 10 years

Bloomberg BP acquires majority stake in US forest carbon-offsets company

Wall Street Journal Investors pile into ETFs devoted to socially responsible ESG

Bloomberg Extending solar tax credits tentatively linked to covid aid deal

Calendar

WEDNESDAY | DEC. 16

Congress is working on an omnibus spending bill and pandemic response package