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TRANSATLANTIC FIGHT OVER GAS-POWERED CARS: Plans to institute a phase-out of internal combustion engine vehicles by 2035 are moving ahead in several U.S. states over Republican objections while hitting a snag in Europe, where a handful of countries seek to soften EU measures requiring only zero-emission vehicle sales by the middle of the next decade.
In the US: California, operating under a Clean Air Act waiver to set its own standards, set the benchmark with its Advanced Clean Cars II regulations, which provide that all new passenger cars, trucks, and SUVs must emit zero emissions by 2035.
Gov. Wes Moore announced this week that Maryland will adopt the 2035 target in conjunction with California’s standards, and last month, Gov. Phil Murphy announced New Jersey’s intent to do the same. At least five other states have enacted similar regulations, although in one of those, Virginia, Republican Gov. Glenn Youngkin campaigned unsuccessfully for their repeal.
Meanwhile, Republicans in Washington are pushing new legislation that would prevent EPA from issuing Clean Air Act waivers to California to enable the state to implement new regulations to ban sales of new ICE vehicles. Bill sponsors said the bill was about preserving consumer choice.
“One state should not be able to set national policy and Americans should not be coerced into making purchases they cannot afford,” said Rep. John Joyce.
Stephanie Valdez Streaty, director of strategic planning at Cox Automotive, noted that manufacturers are moving the way of all-EV fleets even without a hard-and-fast stop on ICE manufacturing at a national level. General Motors intends to manufacture an all-electric fleet by 2035. Its Cadillac and Buick brands are scheduled to get there by 2030.
“I was at Nissan when the Nissan Leaf launched in 2010. The CEO said, ‘We’re going to be the leader of mass adoption,’ and it didn’t happen,” she told Jeremy. “Now, we see like this perfect storm … the environmental regulations, the commitments, the incentives all propelling [fleet electrification].”
In Europe: The European Union and European Parliament have both approved a proposal to require all new car and van sales to be zero-emissions by 2035 but the Council has yet to reach a consensus, delaying a vote earlier this month after Germany and several other nations declined to back it.
German officials and industry players have argued the proposal precludes the possibility for technological developments and said the proposal needs an exemption for synthetic fuels, which will be needed to power ICE vehicles already on the road beyond 2035 if net-zero transport is to be achieved.
German Transport Minister Volker Wissing said earlier this month that if such fuels will be needed for the existing fleet, “then there is every reason why we should then allow internal combustion engines beyond 2035.”
Others have criticized that approach and characterized attempts by Germany, Europe’s historical leader in vehicle manufacturing and engineering, to preserve its existing automotive industry via synthetic fuels as missing the boat to the next generation of auto manufacturing.
“What is at stake is the future of Europe’s automotive industry and our wider industrial fabric. As China and the US compete in the clean tech race – with battery supply chains at the heart of it – Europe is losing precious time scrambling to accommodate a niche solution,” Julia Poliscanova, senior director for vehicles and e-mobility at European NGO Transport & Environment, wrote in an op-ed yesterday.
Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Jeremy Beaman (@jeremywbeaman) and Breanne Deppisch (@breanne_dep). 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.
GROUPS PUSH CONGRESS TO REQUIRE WIND LEASING SCHEDULE: A team of consumer and public policy groups want Congress to update federal law to require frequent wind lease sales in the Outer Continental Shelf.
The letter from the American Consumer Institute, Consumer Action for a Strong Economy, and other groups noted that offshore wind “lacks a congressional requirement for a predictable leasing schedule,” differentiating it from oil and gas leasing in the OCS.
A mandate would also give industry more certainty that more leasing blocks will be made available over time, something very important to the oil and gas industry.
“Without mandating that these resources periodically be made available to the public, federal wind leases remain at the mercy of the executive branch,” said the letter, which was addressed to leadership of the House Energy and Commerce and Natural Resources Committees.
The way things are: Wind leasing has varied widely across recent administrations. The Trump administration carried out two lease sales between 2017-2021. The Biden administration, meanwhile, has held three in two years, scheduled one more in the Gulf of Mexico, and intends to hold at least three more through 2025.
All this is according to a “path forward” the administration published in October 2021 laying out when and where it plans to lease.
A plan planned: Interior and the Bureau of Ocean Energy Management proposed new regulations in January that seek to establish a “Renewable Energy Leasing Schedule.”
The proposed renewable leasing schedule, part of a larger attempt by the agency to “modernize” regulations governing wind leasing, would similarly provide the anticipated lease sales intended for the subsequent five years.
BAY AREA GETTING BAN ON GAS-POWERED FURNACES AND WATER HEATERS: Bay Area regulators voted to begin phasing out the sale and installation of natural gas-powered water heaters and furnaces in single-family homes beginning in 2027, adopting one of the most ambitious plans in the country in an effort to drive down greenhouse gas emissions and air pollution in the area.
The Bay Area Air Quality Management District board voted 20-0, with one abstention, to pass the sweeping effort.
The rule will apply to gas-powered furnaces in 2029, and large commercial water heaters beginning 2031.
Regulators argued that the nearly 2 million gas-powered appliances in homes and buildings in the Bay Area are a major source of pollution, and account for a similar amount of nitrogen emissions as passenger vehicles. They estimate the ban will save residents an estimated $890 million per year in health impacts due to air pollution exposure.
But opponents note the rules could sharply drive up housing costs, and limit consumers’ choices when their gas-powered appliances need replacement.
According to the Air Quality Management District’s own estimates, switching from a gas-powered furnace to a zero-NOx heater will cost consumers an average of $8,030, and $2,820 to upgrade from a gas-powered water heater to a zero-NOx appliance. Residents could also incur thousands more in costs depending on whether they need to upgrade to electrical panels. Read more from Breanne here.
EU ANNOUNCES NEW DETAILS ON GREEN DEAL INDUSTRIAL PLAN: European Commission President Ursula von der Leyen presented the EU’s Net-Zero Industry Act and Critical Raw Materials Act today, a framework designed to boost the EU’s sourcing of critical minerals and allow it to compete with the U.S. and China on EV battery production and other clean technologies.
The plan calls for the EU to mine 10% of the critical minerals it consumes, such as lithium, cobalt, and other rare earth minerals by 2030, and to recycle an additional 15% by the end of the decade.
Both are part of the EU’s Green Deal Industrial Plan, which seeks to compete with the U.S. Inflation Reduction Act and generate clean energy investments in the bloc. The European Commission estimates these investments will triple by 2030, compared to the $1 trillion in investments in 2022. “The bottom line is that we want to be leaders in the green industries of the future,” the commission’s vice president, Valdis Dombrovksis, told reporters.
“We are not a resource-rich continent,” Dombrovskis said, noting the EU’s reliance on several key partners for many critical minerals and other raw materials.
“This is not a stable nor reliable way to build the industries of the future,” he added. “So we urgently need to diversify.”
UH-OH – 2.5 TONS OF URANIUM REPORTED MISSING IN LIBYA: The International Atomic Energy Agency told the U.N. yesterday it is searching for 2.5 tons of uranium that has gone missing from a site in war-torn Libya, raising concerns over safety and nuclear proliferation.
International Atomic Energy Agency Director-General Rafael Grossi said the missing uranium was discovered by agency inspectors on Tuesday during a routine inspection of the site.That inspection had been originally scheduled to take place last year but was postponed due to a security situation in the region, he said.
When IAEA inspectors arrived to inspect the site, they “found that 10 drums containing approximately 2.5 tons of natural uranium in the form of UOC [uranium ore concentrate] were not present as previously declared at a location in the state of Libya,” Grossi said in a statement reported by Reuters.
Natural uranium is a metal, and cannot be immediately used for energy production or bomb fuel. Converting it to a weapon requires a fairly complex enrichment process, including gas diffusion and centrifugation.
Still, experts warned that, if the uranium were obtained by a group with the proper means and resources, the missing amount could be used to produce 12 pounds of weapons-grade material. Read more from Breanne here.
EXXON ANNOUNCES STARTUP OF TEXAS REFINERY EXPANSION: ExxonMobil announced the startup of its new crude unit at its Beaumont, Texas, refinery, which expands the facility’s capacity by 250,000 barrels per day.
Construction on the project began in 2019, and the company stuck with it through the pandemic’s demand destruction “knowing consumer demand would return and new capacity would be critical in the post-pandemic economic recovery,” said Karen McKee, president of ExxonMobil Product Solutions.
The facility is connected to the company’s operations in the Permian Basin, where it’s focusing its North American growth plans. Exxon increased Permian production by 70% there between 2019 and 2021, and production hit a new record of 560,000 barrels of oil equivalent per day in the fourth quarter.
The refining problem: More than 1 million bpd of refining capacity has been retired or converted in recent years. The loss, compounded with high oil prices, helped drive the run-up in retail gasoline prices last year.
President Joe Biden blamed the sector for sitting on healthy earnings (Exxon made “more money than God” — remember that?) and seeking to pad them further by declining to invest in new refining capacity, although Exxon is one of the few big names to do so. Marathon and Phillips66 have closed or converted hundreds of thousands of bpd of capacity since 2019.
The Rundown
Wall Street Journal Why gas bills are going crazy—with no end in sight
Bloomberg Glencore CEO rides coal windfall on the way to a low-carbon world
Calendar
TUESDAY | MARCH 28
10:00 a.m. 2123 Rayburn. The House Energy and Commerce Subcommittee on Environment, Manufacturing, and Critical Materials will hold a hearing on the government’s response efforts to the East Palestine train derailment.
