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INFRASTRUCTURE WEEK IS COMING: Lawmakers are teeing up clean energy measures to attach to $2 trillion worth of infrastructure plans President Joe Biden is set to unveil next week in Pittsburgh as part of his recovery package (see more on what he said about this during yesterday’s press conference below).
Just in the last few days, lawmakers have unveiled legislative proposals to make it easier for clean energy developers to quickly claim tax incentives, to enhance tax credits for carbon capture and storage, and to offer greater incentives for building clean vehicle refueling stations.
Bills to watch: Two of those bills were led by Sen. Tom Carper, the top Democrat on the Senate Environment and Public Works Committee who will be helping to shepherd a big infrastructure package through the Senate.
One of those proposals, to boost federal incentives for electric vehicle charging stations and hydrogen refueling stations, is bipartisan, with the support of North Carolina GOP Sen. Richard Burr.
The other, co-sponsored with Sens. Sheldon Whitehouse and Martin Heinrich, would allow renewable energy and carbon capture developers to temporarily receive their tax credits as direct cash payments — a long-time ask of the clean energy industry that has repeatedly failed to make it into pandemic relief bills.
Carbon capture supporters are prepped for a big push to get their priorities in the infrastructure package, too. Yesterday, a dozen bipartisan senators introduced a bill to boost tax incentives for carbon capture, including by extending the deadline for projects to qualify by five years and increasing support for direct air capture.
That follows another bipartisan bill unveiled last week in the Senate and House to help spur construction of pipelines that carry captured carbon dioxide to where it can be stored underground.
Left-wing lawmakers have been preparing for infrastructure negotiations, too. Sen. Elizabeth Warren and Rep. Alexandria Ocasio-Cortez led the introduction of legislation last week that would spend $500 billion to electrify public transit.
Pent-up demand: There’s a reason these bills are being introduced now, just days before Biden will set a marker for what he thinks should be included in an infrastructure package.
Lawmakers, lobbyists, and others in Washington have been increasingly talking about a big infrastructure package for years, and everyone will be angling to get their priorities in there. Especially for climate and clean energy advocates, this is the first, and potentially best, chance in the near-future to advance legislation that significantly increases funding for low- and zero-carbon technologies.
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.
OIL INDUSTRY TAKES ITS SHOT AGAINST LEASING PAUSE: The fossil fuel industry and unions pushed the Biden administration yesterday to end its pause on federal oil and gas lease sales quickly, arguing the policy won’t reduce greenhouse gas emissions and would lead to job and revenue losses in affected states.
“The last bastions of middle-class employment are in gas and oil, petrochemicals, and power generation,” said Sean McGarvey, president of North America’s Building Trades Union, a group that represents many workers employed in the fossil fuel industry.
The Biden administration’s Interior Department did not tip its hand during a more than four-hour public forum designed to inform its plan to propose updates to the federal oil and gas program by early summer as Biden decides whether to turn the pause into a ban.
Reading the tea leaves: More likely, the Biden administration will work with Congress on reforms to raise costs and impose stricter regulation on oil and gas development on public lands and waters, possibly by raising royalty rates and imposing lease stipulations requiring better mitigation of carbon and methane emissions.
“Fossil fuels will continue to play a major role in America for years to come, but too often, the extraction of resources has been rushed to meet the false urgency of political timetables, rather than with careful consideration of the impacts to the environment and future generations of Americans,” Interior Secretary Deb Haaland said to kick off the virtual forum.
Caught between sides: Industry leaders took exception to Interior’s characterization that companies have been “stockpiling” non-producing leases for purposes of speculation, accusing the administration of not appreciating the thorough assessment that goes into actually developing oil and gas.
Environmentalists, meanwhile, reiterated their calls for Biden to fulfill his campaign promise of a full ban on new leasing. Add it all up, and, “we have a lot to think through,” concluded Laura Daniel Davis, Interior’s principal deputy assistant secretary of land and mineral management.
Read more of Josh’s coverage of the forum here.
BIG PART OF INFRASTRUCTURE PUSH…PUT A CAP ON IT: Biden’s “next major initiative” is a big spending infrastructure and climate legislative push, he confirmed in his first press conference yesterday, and you can bet one of the focuses will be designing a program to pay for remediating abandoned oil and gas wells.
Biden, as he does nearly every time he talks about climate change, touted the potential to employ fossil fuel workers to “cap those wells.”
“We have over 100,000 wellheads that are not capped, leaking methane,” Biden said. “What are we doing? We can put as many pipefitters and miners to work capping wells at the same price that they were charged to dig those wells.”
This is one of the areas of the Biden climate agenda where you could see oil industry support. Frank Macchiarola, senior vice president of policy at the American Petroleum Institute, said during the Interior leasing forum that his group “looks forward to working with you on this component of the plan.” He did note, however, that most abandoned wells are on state and private lands, not federal.
“Our partnership is not limited to federal lands on this,” replied Daniel Davis, the Interior official.
RELATED…TONKO’S NEW CLEAN ENERGY MANUFACTURING BILL: Democratic Rep. Paul Tonko, chair of the Energy and Commerce Committee’s climate subcommittee, is introducing legislation today to provide incentives for manufacturers to produce solar panels, wind turbines, electric vehicles, and more.
The legislation, which is similar to a bill introduced in the Senate by Joe Manchin, would fit snugly into what’s expected to be another component of Biden’s infrastructure push. Biden according to the New York Times, plans to direct hundreds of billions of dollars toward “high-growth industries of the future,” such as advanced battery manufacturing.
Tonko’s “Manufacturing for Our Future Act” would provide 50-50 cost-share grants to retool, expand, or establish facilities to build clean energy systems. It would offer an even greater cost-share, up to 80%, to support projects in areas whose economies depend on fossil fuels.
WE TOLD Y’ALL…REPUBLICANS UNMOVED BY API’S CARBON PRICE MOVE: Who could have seen this one coming? Republicans signaled yesterday they aren’t going to follow the oil industry and other business lobby groups on carbon pricing, as we’ve predicted would be the case.
“Proposals that impose a cost on carbon will hurt American families,” said Sen. John Barrasso of Wyoming, top Republican of the Energy Committee, in response to API broadly endorsing putting a price on carbon.
Rep. Garret Graves of Louisiana, the ranking Republican on the special House climate committee, called API’s new position a “cop-out approach to appease the radical left.”
Interpreting the GOP: Republican consensus in Congress opposing carbon pricing is deep-rooted, outside a few curious ones like Sen. Mitt Romney. Their opposition is very much ideological (the GOP instinct is to oppose anything resembling a new tax). Yes, the vocal voices opposing API’s carbon pricing endorsement are from big fossil fuel states, and very unlikely to be the ones who’d we expect to come to the table for a bipartisan measure with centrist Democrats.
But it’s hard to see much of a constituency for a carbon tax, with Democrats prioritizing a mixture of sector-by-sector standards and big infrastructure spending. API, meanwhile, is signaling it won’t lobby for a specific carbon pricing policy, so it’s not like they’ll be pushing Republicans to change their position.
CHAMBER HUDDLES WITH MCCARTHY: The Chamber of Commerce’s climate action task force met yesterday with White House climate adviser Gina McCarthy for a discussion with nearly 200 member companies representing nearly every sector of the economy.
Marty Durbin, the Chamber’s senior vice president of policy, told Josh that the group’s members “had an opportunity to share the business community’s perspective on climate and desire for bipartisan and durable legislative solutions.”
He said the Chamber wants to continue to have “dialogue” with McCarthy ahead of the next U.N. climate summit in Glasgow later this year.
What the Chamber wants. The business community is looking to shape the Biden administration’s updated nationally determined contribution (NDC), or emissions reduction target for 2030, that he has promised to announce next month as part of the U.S.’ return to the Paris Agreement. The Chamber has called for Biden to embrace “all of the above” approaches to emissions reductions, and to consider the value of exporting natural gas to replace coal overseas, which likely means it would be pushing for something lower than the 50% emissions cut by 2030 sought by many environmental groups.
HERE COMES THE SUN: The Energy Department is aiming to cut the costs of solar power by 60% within the next 10 years, the agency announced yesterday alongside $128 million in funding for solar energy technologies.
“This first burst of funding will help us add even more affordable clean energy to the grid, jobs to communities across the country, and will put us on the fast track toward President Biden’s goal of 100% clean electricity by 2035,” Energy Secretary Jennifer Granholm said in a statement. She noted that solar power is already cheaper than coal and other fossil fuels in many areas.
The new 60% by 2030 cost reduction target represents a ramp-up by five years. In a news release, the Energy Department says traditional solar panels could make up 30% to 50% of the electricity supply by 2035 as the administration strives for carbon-free power by that year.
UTILITY LOBBY AND ENVIRONMENTAL GROUPS PUSH TRIPLING OF R&D FUNDING: The Edison Electric Institute and the Clean Air Task Force, along with several other center-left, center-right, and nonpartisan environmental groups, launched the Carbon Free Technology Initiative yesterday to advocate for policy support and funding for zero-carbon power that is readily dispatchable 24/7.
The new coalition is calling on the Biden administration and Congress to triple research and development funding at the Energy Department in the next five years. For the coming fiscal year alone, the coalition is asking for a doubling of funding for the Energy Department’s research programs for clean power. The groups are focused on technologies such as offshore wind, long-duration battery storage, advanced nuclear energy, and carbon capture, utilization, and storage.
Beyond ramping up R&D funding, the groups are also recommending stronger financial incentives to deploy the technologies, including a technology-neutral tax credit for new carbon-free energy, and reforms to permitting and siting to speed up project development.
WEST VIRGINIA ATTORNEY GENERAL SAYS MANDATORY CLIMATE DISCLOSURES ARE ILLEGAL: West Virginia Attorney General Patrick Morrisey, a staunch opponent of climate regulation, is threatening to sue the Securities and Exchange Commission if it moves to compel climate and other environmental, social, and governance (or ESG) disclosures from public companies.
“There is a significant constitutional obstacle to the unprecedented and dangerous course you charted in your remarks,” Morrisey said in a letter yesterday to acting SEC Chair Allison Herren Lee. Morrisey was referring to Lee’s announcement last week that the SEC is taking input on how to set up a framework for climate-related disclosures, a first step toward likely mandating such disclosures from public companies.
Morrisey argues the SEC mandating ESG disclosures would be unlawful, citing Supreme Court rulings in the last five years that “have the effect of requiring federal securities regulations that compel speech to withstand strict scrutiny under the First Amendment.”
The West Virginia attorney general claims mandatory ESG disclosures would fail that test, likening the requirements to “unconstitutional politicization” of the SEC.
MOVERS AND SHAKERS: Former top California air official Mary Nichols has joined Columbia University’s Center on Global Energy Policy as a distinguished visiting fellow, the center announced yesterday. In her role, Nichols “will advance smart, actionable and evidence-based energy and climate solutions through research, education and dialogue,” according to a news release.
The Rundown
Cleveland.com Ohio lawmakers vote to end nuclear bailout, other parts of scandal-ridden House Bill 6
Wall Street Journal Energy industry grapples with fallout from Suez Canal blockage
Reuters Suez blockage sets shipping rates racing, oil and gas tankers diverted away
New York Times Ad agencies step away from oil and gas in echo of cigarette exodus
Calendar
MONDAY | MARCH 31
12 p.m. CRES Forum will hold a virtual event titled “Driving Innovation: How can private and public sectors speed EV deployment.”
