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TIMING ISSUES: The Biden administration won’t be armed with a specific climate law it can tout to justify a new aggressive emissions reduction commitment it is expected to make later this month as part of the Paris Agreement. President Joe Biden’s $2 trillion infrastructure and climate spending proposal is not expected to be passed until this summer at the earliest.
Environmental groups are calling on Biden to submit a target, or “nationally determined contribution,” to reduce economy-wide emissions by at least 50% from 2005 levels by 2030.
But by the time of the climate summit Biden is hosting on Earth Day (April 22), the U.S.’ commitment is likely to amount to a whole bunch of proposals that, in the eyes of other countries, could or could not become reality based on U.S. politics.
Biden’s climate adviser Gina McCarthy dismissed that concern in a call with reporters yesterday, saying the U.S. has “a variety of ways in which we can get to an outcome in 2030 that will put us in a leadership position to the international community.”
What are the other ways? McCarthy said some of the emissions target will reflect the infrastructure package, but also executive actions, such as the administration’s big offshore wind investment announced this week. Forthcoming emissions regulations from the EPA over the power and transportation sectors could also contribute. And don’t forget about efforts, both regulatory and voluntary from businesses, to better control methane leaks, which many experts consider to be the “low hanging fruit” of easy, quick emission reduction efforts.
But a CES is still key: Credibly reaching a 50% by 2030 emission reduction target would almost certainly require Congress passing Biden’s infrastructure plan, and most critically his proposed clean electricity standard that would require power companies to use 100% carbon-free power by 2035.
“The power sector is where the tons are the next decade,” said Nat Keohane, senior vice president of climate at the Environmental Defense Fund, referring to the potential to cut emissions from electricity.
Keohane and EDF have run projections that reducing power sector emissions in the range of 80% below 2005 levels by 2030 is achievable, and is the linchpin to reaching 50% economy-wide emissions reductions.
Does timing really matter? Keohane argues it’s not necessary for Congress to pass Biden’s infrastructure package before setting its Paris emissions target — as long as it eventually becomes law.
“Credibility means a number you can back up by showing there are multiple paths to get there,” Keohane told Josh.
Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Josh Siegel (@SiegelScribe) and Abby Smith (@AbbySmithDC). 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.
BIDEN ALL BUT CLOSES DOOR ON CARBON TAX: McCarthy said yesterday that Biden’s “choice” was to “look at” a clean electricity standard as part of the infrastructure bill as its main mechanism to eliminate carbon emissions from the power sector by 2035. She said the administration won’t “close” the door on a carbon tax. But the choice seems clear, and drives home that the newfound support of business and oil and gas lobbying groups for a carbon tax has done nothing to persuade Democrats to move off their preference for a standard.
“I am certainly not going to close that,” McCarthy told reporters about a carbon tax. “But [Biden’s] choice was to look at a clean electricity standard in concert with the investments we identified. To him, that gets to the kind of reductions we promised in the campaign.”
McCarthy added that the utility industry, which she is trying to sell on Biden’s clean electricity standard proposal, sees the policy as a “flexible” tool and appreciates the “certainty” it would provide.
The Biden administration will likely be putting out a more detailed clean electricity standard plan for Congress to consider. “I am sure we will put out something more definitive on this,” McCarthy said. She also reiterated that Biden supports a standard that would count nuclear power and fossil fuel plants equipped with carbon capture technology as being clean, along with wind, solar, and hydropower.
ABOUT THAT LAST PART… THE COMING CLASH OVER NUCLEAR AND CARBON CAPTURE: Democrats’ push to eliminate greenhouse gas emissions from the power sector is exposing a fundamental difference in strategy among members of the party and environmentalists: whether to rely solely on renewable energy or support other zero- and low-carbon resources.
Both sides of the debate feel their approach is essential to avoiding climate disaster. Left-wing activists and Democrats say anything less than a singular focus on building massive amounts of renewable energy undermines overall emissions reduction goals and jeopardizes the health of people who live near smokestacks, who tend to be poorer and minorities.
However, others say the U.S. won’t be able to achieve carbon-free power while keeping the lights on and electricity costs affordable without incorporating zero-carbon technologies that can run 24/7, such as nuclear power and natural gas plants equipped with carbon capture.
The disagreements on strategy have begun to break out into the open as Democratic leadership advances policies that look beyond just renewable energy (see McCarthy’s statement about what qualifies under a clean electricity standard above as an example).
Much more on these dynamics, and what it means for Democrats’ ability to pass climate policy, in Abby’s story posted this morning.
IF AT FIRST YOU DON’T SUCCEED… House Democrat Rep. Ted Deutch of Florida is trying again to pass a carbon tax that returns the revenue to households as a monthly dividend check.
Deutch and 28 other co-sponsors yesterday re-introduced the Energy Innovation and Carbon Dividend Act, which he called a “market-based solution to drive the transition to cleaner energy sources” across the economy, not just the power sector.
He pitched the dividend component as a way to “not only cover any increase in energy costs but also give extra support to those continuing to struggle financially from the pandemic.”
The legislation comes weeks after Majority Whip Sen. Dick Durbin of Illinois introduced his own version of a carbon tax and dividend bill.
Deutch’s bill, however, has no Republican co-sponsors and it’s tough to see how the pockets of interest among Democrats for carbon pricing makes up for the lack of GOP support.
LOUISIANA REPUBLICAN SEES ROOM TO WORK WITH BIDEN: Sen. Bill Cassidy sees an opportunity to work with Biden to curb emissions with technologies such as carbon capture and hydrogen — so long as the president and his team recognize a continued need for oil and natural gas.
Biden’s infrastructure plan backs legislation that Cassidy and a group of bipartisan senators introduced in March to support the build-out of pipelines to carry carbon dioxide captured from smokestacks or removed directly from ambient air to where it can be stored underground.
Cassidy told Abby in an interview that he supports actions by the Biden administration to promote carbon capture and storage, such as those included in the infrastructure package.
He also said he sees a market now for the U.S. to produce and export hydrogen — a versatile energy source that could be used to fuel vehicles, generate power, and store energy — from natural gas. Pairing that hydrogen production from natural gas with carbon capture could eliminate nearly all the emissions from that process, he argued.
“We should promote that,” Cassidy said. “That is a way to get to net carbon neutrality in a way which uses American natural resources, which preserves the jobs associated with them.”
More from the interview, which will appear in next week’s Washington Examiner magazine, here.
FALLOUT OF LATEST OPEC+ DECISION: Oil prices are up this morning after OPEC and its allies, led by Russia, signaled confidence in the market recovery by pulling off a surprise and announcing yesterday they would gradually increase production over the next three months.
Saudi Arabia, OPEC’s leader, had been signaling it thought demand needed more time to recover from the pandemic before beginning to lift its production cuts. But it appeared to cede to pressure from Russia and other producers who were eager to pump more oil to increase their revenues as lockdowns ease.
“The decision by OPEC+ shows that patience was exhausted among many producers,” said Louise Dickson, oil markets analyst at Rystad Energy.
OPEC+ agreed to boost output by 350,000 barrels per day in both May and June, and by 450,000 barrels p/d in July. In addition to that, Saudi Arabia will start to ease separate unilateral cuts it made to help lift prices.
While prices rose on the positive demand sentiment expressed by OPEC+’s decision, Dickson suggested that “market politics” seemed to prevail over the reality of a “lagging demand recovery,” with coronavirus cases rising again in the U.S. and Europe.
ENERGY DEPARTMENT TO REVERSE TRUMP CHANGES TO EFFICIENCY STANDARDS PROCESS: The Energy Department proposed yesterday to peel back several changes the Trump administration made to the agency’s methods for setting energy efficiency standards for appliances that environmentalists and efficiency advocates had argued favored the appliance industry.
Biden, in his day-one climate change executive order, directed the Energy Department to propose any major changes to the Trump rule by March and any remaining revisions by June. Under the Trump administration, the Energy Department missed more than two dozen deadlines to update efficiency standards, which must be reviewed every six years.
The Energy Department is proposing to remove a number of changes the Trump administration made, including a requirement that the agency meet a specific energy savings threshold before it can tighten a standard and that the agency rely on industry-designed testing procedures.
“Without this move the department could get hopelessly stuck in the quicksand of the restrictive process set by the previous administration,” said Steven Nadel, executive director of the American Council for an Energy-Efficient Economy.
BIDEN TASKS GRANHOLM WITH SELLING INFRASTRUCTURE PLAN: The president during his Cabinet meeting yesterday assigned five members with pitching his green infrastructure plan to the public, including Energy Secretary Jennifer Granholm.
“Working with my team here in the White House, these Cabinet members will represent me in dealing with Congress, engage the public in selling the plan, and help work out the details as we refine it and move forward,” Biden said, also naming Transportation Secretary Pete Buttigieg, HUD Secretary Marcia Fudge, Labor Secretary Marty Walsh, and Commerce Secretary Gina Raimondo.
Granholm, the former Michigan governor, is a natural pitchwoman and is already hitting the airwaves this morning, touting the infrastructure plan for making “historic and once-in-a-generation investments so we can tackle the climate emergency and save our planet.”
The Rundown
Wall Street Journal Biden’s big infrastructure plan would further boost renewable energy
Reuters Power play: India wields oil ‘weapon’ to cut dependence on Saudi
Bloomberg Fancier homes means higher premiums under new flood system
Calendar
TUESDAY | APRIL 6
1 p.m. The National Association of State Energy Officials, Energy Futures Initiative, and BW Research Partnership will hold a virtual event to present supplemental analysis to the 2020 U.S. Energy and Employment Report.
