Daily on Energy: Has the Hill moved on from carbon pricing?

“I think it’s time to try something new,” House Energy and Commerce Chairman Frank Pallone told reporters yesterday, noting past carbon pricing schemes have floundered in Congress.

Pallone noted the fears among liberal Democrats that carbon pricing might allow companies to “pay to pollute” and jeopardize the health of poor and minority populations.

“The votes are just not there for a price on carbon,” Pallone said.

Pallone’s remarks came as he unveiled House Democrats’ sweeping new climate bill, nearly 1,000 pages, that he acknowledged doesn’t feature a carbon price or carbon tax of any sort. Instead, one of the bill’s central policies is a clean electricity standard targeting carbon-free power by 2035, mirroring President Biden’s aggressive goal.

Even Rep. Paul Tonko, who admitted he “lean[s] toward a carbon price, even a cap-and-invest model,” said “we start off with what’s achievable.”

The comments suggest that top House Democrats have concluded a carbon price isn’t politically achievable, facing headwinds with their liberal colleagues and Republicans.

What we’re watching: Whether these big business groups actually push for a carbon price on the Hill.

“As lawmakers move forward, we urge them to focus their efforts on developing market-based mechanisms for reducing carbon emissions that are durable and can garner bipartisan support,” said Marty Durbin, the U.S. Chamber of Commerce’s senior vice president of policy, in response to House Democrats’ bill.

Nonetheless, while groups like the Chamber have generally backed carbon pricing, their support lacks specifics so far, which could make it challenging to persuade lawmakers to switch their approach.

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GRANHOLM’S JOBS PITCH TO FOSSIL FUEL WORKERS: New Energy Secretary Jennifer Granholm offered more specifics today on what she intends do to lead Biden’s effort to help fossil fuel workers who could be displaced by his plan to accelerate clean energy and electric vehicle growth.

Granholm said she created a new jobs office with DOE that is working with the office of fossil energy to “develop strategies to make sure we leave no worker behind.”

Granholm, the former governor of Michigan, spoke more modestly about the challenge of matching lost coal, oil, and gas jobs with those in clean energy compared to other Biden administration officials (looking at you John Kerry) who seem at risk of overpromising.

“I am not going to sugar coat how hard transitions are,” Granholm said during her first public address as secretary at CERAWeek by IHS Markit, the largest annual energy industry conference. “I am extending a hand of partnership to reduce emissions and keep people employed.”

Matching skills to jobs: Granholm cited geothermal as a natural fit for people with oil and gas experience, along with extracting critical minerals for use in batteries. She said utility workers and electricians could help build EV charging stations and that pipefitters, boilermakers, and iron workers could reinforce existing pipelines to minimize their environmental impacts and build out new pipelines to carry carbon captured from power plants to be used in enhanced oil recovery.

These opportunities are a “natural fit” for the skills of workers employed in fossil fuel-related work, Granholm said. “This is where the puck is headed and it would be great to have partners in making that a successful transition,” she added.

DOE BEGINS TO REVIVE LOAN OFFICE: Granholm also declared the Energy Department’s “once-mighty” Loan Programs Office is “back open for business” as of today, as she looks to support clean energy and transportation projects with $40 billion in unspent loan authority.

The Trump administration mostly neglected the program, which is best known for providing a $465 million loan in the Obama administration to Tesla to build a manufacturing plant in Fremont, California and for supporting some of the nation’s first solar farms.

“I’m ready to rev those engines back up, so we can spur the next generation of innovation and deployment,” Granholm said, citing clean vehicles, advanced nuclear reactors, and carbon capture as potential areas of investment.

Granholm named Jigar Shah, who runs Generate Capital, a clean energy technology investment firm, as the new head of DOE’s loan programs office.

“Jigar has written the playbook on how to drive the market towards clean energy solution,” Granholm said of Shah, who tweeted he looks forward to “helping the Federal Government be an safe and inviting place for innovation to be deployed at scale.”

TEXAS FREEZE CAUSES WILD STORAGE SWINGS: The Energy Information Administration today reported wild swings in crude and fuel inventories kept in storage caused by the Texas deep freeze.

Crude inventories increased by 21.6 million barrels last week, the largest weekly crude build since data became available in 1982, as refineries with power outages could not process the crude, leaving nowhere for it to go.

But that was offset by a massive draw of 13.6 million barrels in gasoline stocks as people continued to drive.

U.S oil demand rose by to 18.76 million barrels per day last week after dropping sharply to 18.69 million barrels p/d the week prior during the Texas freeze. Gasoline demand took the biggest jump, from 7.2 million barrels p/d to 8.1 million barrels p/d, the EIA said.

SUSAN COLLINS TO VOTE FOR HAALAND: Sen. Susan Collins this morning became the first Republican to declare she will vote to confirm Biden’s Interior secretary nominee, Deb Haaland.

Collins, a centrist, said she has “different views” on some issues, but she appreciates Haaland’s work when she was in the House on the Great American Outdoors Act, a major public lands package signed into law last year.

Haaland already got the crucial vote of Energy Committee Chairman Joe Manchin, but Collins’ endorsement ensures she will get bipartisan support and all but ensures her confirmation.

SPEAKING OF MANCHIN…LANDRIEU HAS HIS BACK: Josh caught up yesterday with Mary Landrieu, a former chairman of the Energy Committee and fellow centrist Democrat, who said Biden would be wise to pay special attention to Manchin’s needs as he crafts his clean energy policies.

“The Biden administration would be very smart to keep their eyes and ears open in working closely with him,” Landrieu said. “He will have a great deal of influence on how the [clean energy] transition is shaped.”

Landrieu, who represented Louisiana, a major oil state, said Manchin is smart to focus on helping displaced fossil fuel workers, crediting him for his new bill funding the building or retrofit of manufacturing and industrial facilities to make clean energy technologies.

“Joe Manchin has of course been smart, he’s been bold, and in many ways he has been right to say this transition to cleaner fuels is going to have a dramatic impact on West Virginia and states like Louisiana and New Mexico and we want to make sure the communities in our states are respected and heard and their economic well-being is put first,” Landrieu said.

She said Manchin, who opposed Biden’s rejection of the Keystone XL pipeline, is “wise” to promote natural gas and nuclear as “base fuels” to continue complimenting renewables, but he is also “willing to advance a transition to a lower carbon economy.”

WESTERN GOVERNORS WARY OF OIL AND GAS LEASING BAN: The Western Governors Association, led by Democrat Gov. Kate Brown of Oregon, is asking Biden to consult with states as it reviews the future of the federal oil and gas leasing program after the administration paused leasing in January.

The group, in a letter to Biden this week, suggest a long-term leasing ban would be bad for Western states with a high percentage of federal lands that depend on oil and gas royalties for funding of education and conservation programs.

“The economic effects of energy production, including oil and gas leasing on public lands are substantial in many western states,” the governors wrote.

HOUSE DEMOCRATS PROPOSE LEASING REFORMS: House Democrats yesterday released a suite of legislation to reform the federal oil and gas leasing program, providing a path forward for Biden to restrict drilling without imposing a permanent ban.

One bill, from Rep. Katie Porter, the new chairwoman of the natural resources oversight subcommittee, would raise royalty rates paid by drillers to the government from 12.5% to 18.75% onshore and boost the minimum bid price from $2 to $5. The onshore royalty rate has remained the same since 1920, said Porter.

Another bill by Rep. Diana DeGette of Colorado would require the EPA and Interior to set strict new standards on the amount of methane oil and gas producers can emit. It would force Interior to issue new rules to ban flaring or venting of natural gas at drill sites on public lands.

EXXON’S CLIMATE PLANS…RAMP UP CARBON CAPTURE INVESTMENTS: ExxonMobil sees a need for oil and gas well into the future, and the U.S. oil major isn’t following its European peers in plans to cut oil production and diversify its business into cleaner energy.

Instead, Exxon sees a greater need for investment in oil and gas, especially in the near-term, given projections that the two fuels will make up roughly 50% of the global energy mix even in a world where warming is limited to 2 degrees, said Darren Woods, the company’s CEO.

Woods, in remarks during the company’s investor day, boasted of Exxon’s work on carbon capture and storage technologies, arguing the company can be a leader in what he expects to grow to be a $2 trillion industry. Exxon’s new low carbon solutions business will initially focus on carbon capture, as well as low-carbon hydrogen, and will lobby for policies that break down permitting and other barriers to build carbon capture projects and carbon dioxide pipelines.

Exxon has invested more than $10 billion in lower emission technologies over the past 20 years, and it has plans to invest at least $3 billion more through 2025, Woods said.

It’s also investing heavily in oil and gas: Woods cited projections from the International Energy Agency that oil demand will be about 75 million barrels per day in 2040 under a 2-degree scenario.

“Given the level of change required, most 2-degree pathways are back-end loaded, with demand for oil and gas dropping off in the later years,” Woods said. “In the near term, with lower erosion in demand and ongoing depletion, the need for investment is even greater.”

VOLVO TO GO ALL-ELECTRIC BY 2030: Volvo will phase out sales of all cars with an internal combustion engine, including hybrids, by 2030, the automaker said yesterday, setting a goal five years earlier than General Motors is promising to eliminate tailpipe emissions from its vehicles.

“To remain successful, we need profitable growth. So instead of investing in a shrinking business, we choose to invest in the future – electric and online,” said Håkan Samuelsson, Volvo’s chief executive, in a statement.

In the next five years, Volvo is planning to reach 50% fully electric sales globally, with the rest of its sales hybrids, the company said. Volvo also said its all-electric models will be available for sale online only.

UTILITIES TEAM UP TO BUILD ELECTRIC VEHICLE CHARGING NETWORK: Six major power companies announced yesterday they would work together to build out electric car chargers to allow for seamless travel along major highway systems on the Atlantic Coast, through the Midwest and South, and into the Gulf and Central Plains regions.

The six utilities — American Electric Power, Dominion Energy, Duke Energy, Entergy Corporation, Southern Company, and the Tennessee Valley Authority — have dubbed themselves the Electric Highway Coalition. The group is currently considering sites along major highways to build DC fast chargers that can charge up vehicles in 20 to 30 minutes, according to a news release.

BIDEN’S CLIMATE TEAM EXPANDS: The Biden administration is continuing to beef up its climate team.

Noah Kaufman, on leave from Columbia University’s Center on Global Energy Policy, joined the White House Council of Economic Advisers as a senior economist. Kaufman previously served in the Obama administration’s Council on Environmental Quality as a deputy associate director of energy and climate change.

Jane Flegal joined the White House CEQ as senior director of industrial emissions. Flegal most recently served as an environment program officer at the William and Flora Hewlett Foundation where she led grantmaking on climate change.

Andy Green, most recently a fellow at the Center for American Progress, joined the Agriculture Department as a senior adviser on fair and competitive markets. Green, a former aide at the Securities and Exchange Commission, has advocated requiring companies to disclose their greenhouse gas emissions and climate risks, testifying on the issue as recently as last week before a House Financial Services subcommittee.

MOVERS AND SHAKERS: The Environmental Defense Fund has hired Andrew Howell as its director of investor influence, a new position charged with expanding the organization’s work with the finance sector to decarbonize energy and transportation. Howell was previously an equity research analyst and strategist with Citi, which just this week became the latest U.S. bank to commit to net-zero emissions for its financing.

The Rundown

New York Times As Senate debates Interior nominee, the department moves on climate change

Bloomberg Jigar Shah to run US energy office that backed Tesla, Solyndra

New York Times Miami says it can adapt to rising seas. Not everyone is convinced.

Wall Street Journal Nuclear power prospects cool a decade after Fukushima meltdowns

Calendar

THURSDAY | MARCH 4

10 a.m. SD-366 Dirksen. The Senate Energy and Natural Resources Committee will hold a business meeting to consider the nomination of Deb Haaland to be Interior secretary.

10 a.m. SD-366 Dirksen. The Senate Energy and Natural Resources Committee will hold a hearing on the nomination of David Turk to be deputy Energy secretary.