Daily on Energy: Granholm touts carbon capture as area for bipartisanship

Granholm, taking questions at a roundtable event yesterday, suggested she was unfazed by remarks by Minority Leader Mitch McConnell that Republicans won’t go above $600 billion on infrastructure and don’t want to revisit the GOP tax cut bill to pay for it.

“There’s a lot of interest that we are finding on the Republican side for investments that include things like, for example, carbon capture use and sequestration, which you might not consider traditional infrastructure but a lot of members on the Republican side are very interested in that,” Granholm said.

Granholm also cited other components of President Joe Biden’s American Jobs Plan that could strike a chord with Republicans and centrist Democrats (read, Joe Manchin) from fossil fuel-dependent states, including boosting mining of critical minerals used in renewable technologies and EV batteries.

Could the pitch work? Lobbyists following the negotiations told Josh that Granholm makes a compelling pitch — to an extent.

Biden’s $2.3 trillion plan contains various incentives and investments to deploy carbon capture technology, including enhancing the popular 45Q tax credit and making it easier to use for tough-to-decarbonize heavy industry, along with establishing a target of 15 hydrogen demonstration projects that could be paired with CCS.

“Secretary Granholm is overselling” the idea that huge carbon capture investments could be the centerpiece of a deal, said Frank Maisano, an energy lobbyist with Bracewell.

“On the other hand, there are ways to go beyond typical roads and bridges,” Maisano added, ticking off critical minerals, RD&D innovation spending on other clean technologies, and grid transmission upgrades as areas of a potential agreement, along with carbon capture.

So far, Republican Sen. Shelley Moore Capito‘s effort to work with Democrats on a $600 billion deal (which we highlighted in Friday’s edition) seems geared more toward traditional roads, bridges, waterways, and broadband projects. But it doesn’t seem crazy to us that this framework could also carve out space for energy provisions modeled after the bipartisan innovation package passed as part of last year’s spending agreement.

“You could see how some of these larger ideas, especially in areas that could be negatively impacted by a transition away from fossil fuels, could be bundled together for an attractive package that may be able to gain bipartisan support,” said Shane Skelton, a former energy adviser to former GOP House Speaker Paul Ryan, who is senior vice president at Boundary Stone Partners.

But the political landscape is not the same: The difference this time, of course, is Democrats control Congress and the White House, and progressives are pushing Biden to use a potentially narrow window of power before the 2022 midterms to go bigger on green policies, both in terms of dollars and content.

Biden’s proposal contains items less popular with Republicans, such as EV subsidies and rebates, along with his clean electricity standard for 100% clean power by 2035 that he and Democrats in Congress seem unlikely to back down from.

“The question is do progressives hold out for everything, and does Biden continue as he has in the first 100 days to lean towards where he can give them victories?” Maisano said.

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NEW CLIMATE PLEDGES BRING WORLD CLOSER TO MEETING 2-DEGREE GOAL: The stronger near-term emissions reduction targets announced by several governments, including the U.S., at Biden’s climate summit last month would lead to slightly lower projected warming of 2.4 degrees Celsius, according to new analysis this morning from the Climate Action Tracker.

An “optimistic scenario” where every government that has committed to net-zero emissions reached that goal would lead to projected warming of 2 degrees Celsius by the end of the century, putting the world in spitting distance of the Paris climate agreement’s goal to keep warming below 2 degrees.

Climate Action Tracker says the biggest contributor to narrowing the gap between the Paris Agreement goals and projected warming is updated near-term climate targets from the U.S., the European Union, China, and Japan. While China didn’t announce an updated 2030 emissions reduction target at the summit, it did say it would strictly control coal consumption over the next five years and begin to phase it out after that, which Climate Action Tracker says is a “significant milestone.”

Nonetheless, there is no guarantee that governments will meet their climate targets, especially since many countries don’t have specific policies in place to reach them. “Our warming estimate from current policies is 2.9 [degrees Celsius] — still nearly twice what it should be, and governments must urgently step up their action,” said Bill Hare, CEO of Climate Analytics, one of the Climate Action Tracker’s partner organizations.

CONSERVATIVE GROUPS FLY-IN FOR CLEAN ENERGY: Conservative groups will hold more than 50 meetings with Republicans in Congress as part of a three-day virtual “fly-in” beginning today to advocate for greater investment in clean energy.

Citizens for Responsible Energy Solutions and Conservative Energy Network plan to lobby specifically on four pieces of legislation. They are, the aptly named “Energy Storage Tax Incentive and Deployment Act” providing a 26% investment tax credit to energy storage; the “Growing Climate Solution Act” to enable farmers, ranchers, and private forest landowners to earn carbon credits for reducing emissions; the “American Critical Mineral Independence Act” to promote domestic exploration, R&D, recycling, and processing of critical minerals; and the “BUILDER Act” to streamline the NEPA permitting process.

BIDEN ADMINISTRATION REITERATES STATUS QUO ON DAPL: The Biden administration is maintaining its stance that the Dakota Access oil pipeline should not shut down as it completes another environmental review.

The U.S. Army Corps of Engineers wrote in a filing yesterday to the U.S. District Court for the District of Columbia that it does not plan on forcing the pipeline to shut down because the tribes opposing the project “have not met the applicable standard” to do so. It reiterated that a decision to shutdown the pipeline rests in the “sound discretion” of U.S. District Judge James Boasberg, who could rule within weeks.

The Standing Rock Sioux tribe and other opponents have argued the pipeline should be shut down while the Corps conducts another environmental review after multiple courts found the original version granted by the Trump administration to be deficient. The Corps plans to finish the new review by spring of 2022.

By deferring to the courts, the Biden administration can avoid the wrath of labor groups upset by his canceling of the Keystone XL oil pipeline, but the president risks upsetting green activists and tribes who say the decision is a test of his promises to promote “environmental justice.”

GOP ATTORNEYS GENERAL SEEK PAUSE OF CARBON COST UPDATE: More than a dozen Republican attorneys general are calling on a federal district court to prohibit federal agencies from using the Biden administration’s updated social cost of carbon while the court weighs its legality.

The Biden administration announced in February it would adopt the Obama administration’s social cost of carbon, adjusted for inflation, in the interim while an interagency working group explores longer-term updates to the metric over the next year. That means federal agencies will use an average social cost of carbon of $51 per ton as they assess the costs and benefits of mandates to curb emissions.

In their request for a preliminary injunction, the GOP state attorneys general, led by Missouri Attorney General Eric Schmitt, warn the Biden administration will use the updated social cost of carbon to justify “increase regulation and expansion of federal regulatory authority” that will cause economic harm.

“In theory, these numbers would justify imposing hundreds of billions or trillions of dollars in regulatory costs on the U.S. economy in upcoming years to offset these supposed ‘social costs,’” the attorneys general wrote.

A separate cohort of GOP attorneys general recently filed a second legal challenge against the updated social cost of carbon value.

EPA ASKS COURT TO SCRAP LAST-MINUTE RFS EXEMPTIONS: The EPA is asking a federal appeals court to vacate waivers exempting three small oil refineries from federal biofuels blending requirements that the Trump administration granted on its last day in office.

The Biden administration, in a legal filing yesterday, said the EPA didn’t properly analyze the legal questions determining whether the three refineries were “qualified to receive extensions.” The filing references a 2020 ruling from the U.S. Court of Appeals for the Tenth Circuit that sharply limited the EPA’s ability to grant exemption waivers to small oil refineries. The Supreme Court is currently weighing an appeal of that ruling from several oil refiners, but the Biden administration has said it supports the Tenth Circuit ruling.

The exemption waivers have long been a point of conflict between oil refiners and biofuels producers, which have argued the Trump administration abused the waiver program to the point where it undercut the Renewable Fuel Standard requirements. Oil refiners, however, have said they need the exemption waivers to stay afloat, citing high compliance costs from the RFS.

INTERIOR OKAYS HUGE NEW CALIFORNIA SOLAR PROJECT: The Interior Department announced yesterday it approved a $550 million solar project to be built on public land in the California desert.

The Bureau of Land Management’s record of decision authorizes Sonoran West, a subsidiary of Recurrent Energy, to construct a 350-megawatt solar photovoltaic facility with an attached energy storage system on up to 2,000 acres of lands near Blythe, California.

It has the potential to deliver power to roughly 87,500 homes, the Interior Department said, while creating 650 construction jobs, 40 more temporary jobs in operations and maintenance, and 10 permanent jobs.

The project, part of Biden’s promise to expand renewable energy development on federal land, will exist on land designated for wind and solar projects by the Desert Renewable Energy Conservation Plan, an agreement between California and the Obama administration.

CO2 RECYCLING HAS BIG POTENTIAL BUT HIGH COSTS: Recycling carbon dioxide into chemicals, fuels, and other materials such as concrete carries huge potential to reduce emissions, but the costs of many of these processes remain high, according to a new report this morning from Columbia University’s Center on Global Energy Policy.

The report explores 19 CO2 recycling pathways, including using CO2 to create hydrogen, ethanol, jet fuel, and concrete. In total, those recycling pathways have the potential to reduce 6.8 gigatons of carbon emissions per year, if supplied by low-carbon electricity, the report finds.

However, the report notes that the cost of many of the recycling pathways have a production cost of 2.5 to 7.5 times greater than the product selling price, making the CO2 recycling technologies difficult to deploy. The report also estimates a significant need for infrastructure to support the CO2 recycling pathways at scale, consuming thousands of terawatt hours of electricity, up to 100 million metric tons of hydrogen, and up to 2,000 metric tons of CO2 each year.

The report recommends several policy actions to help bring down the cost, including targeted research and development to help make these processes more efficient and procurement policies to boost early markets for pathways like CO2-to-concrete that are more mature.

MOVERS AND SHAKERS: The Clean Air Task Force announced a number of new hires as it looks to expand its work on energy access, environmental justice, and clean energy technology.

Lily Olardo, formerly an energy access policy manager with the World Resources Institute, will serve as director of energy, development, and climate in Africa. Jeanette Pablo, who most recently was general counsel for the Energy Futures Initiative, joined as a resident senior fellow focused on low-carbon energy infrastructure and equity. The group has also hired Olivia Azadegan for its carbon capture and zero-carbon fuels team in Europe.

The Rundown

Reuters EU carbon price hits record above 50 euros per tonne

New York Times A growing summertime risk for cities: power failures during heat waves

E&E News Leaked docs: Gas industry secretly fights electrification

Bloomberg Biden’s road to clean energy runs through West Virginia coal country

Calendar

WEDNESDAY | MAY 5

11:30 a.m. The House Energy and Commerce Committee’s Energy Subcommittee will hold a remote hearing on electric vehicle provisions in the CLEAN Future Act.

THURSDAY | MAY 6

1 p.m. Energy Secretary Jennifer Granholm will testify remotely on DOE’s FY 2022 budget request before the House Appropriations Committee’s Energy and Water Development Subcommittee.