Daily on Energy: Biden inks partnerships with Australia on clean energy, critical minerals, and climate

According to a fact sheet provided by the White House, the U.S. will partner with Australia through a number of new initiatives that would aim to strengthen supply chains and boost the clean energy industry, support critical mineral supplies between the two countries, and help both nations to meet their climate targets. The U.S. has also welcomed Australia’s bid to host COP31 in 2026, the world’s largest climate conference.

Here’s are some of the newest initiatives they’re proposing: 

Building clean energy supply chains: 

• The Department of Energy and Australia will establish an Australia-U.S. Clean Energy Industry Council, made up of business and public finance leaders to help guide officials on the industry’s development and cooperation. 
• The two countries will also be working on initiatives related to modernization of the electric grid and long-duration energy storage. 
• The pair of nations intends to establish information networks on economy-wide emission accounting schemes for hydrogen and sustainable aviation fuel 

Critical minerals: 

• Export agencies from both countries are establishing a single point of entry for critical mineral supply chain projects involving Australian or U.S. interests.
• Export Finance Australia recently announced they would provide $220 million through an export credit agency (ECA) Facility to the Liontown’s Kathleen Valley Lithium project, which will supply lithium to U.S. manufacturers.
• Australia’s Commonwealth Scientific and Industrial Research Organisation, Geoscience Australia, and the U.S. Geological Survey (USGS) will conduct joint research on minerals processing and mining waste, naturally-occuring hydrogen, geothermal resources, and carbon storage. 

Tackling climate:  

• The U.S. and Australia are working to develop a Indo-Pacific Net-Zero Transition bond series that would allocate money toward small and medium sized businesses with a focus on clean energy transition. 
• Working with agencies like USAID, both countries will collaborate to enhance access to the Green Climate Fund, which was established by the United Nations.
• The two countries will finalize a memorandum of understanding to share a U.S. energy attaché with Australia’s Department of Climate Change, Energy, the Environment and Water. 
• The U.S. and Australia are hosting an Equality in Energy Transitions Ambassador Program Roundtable focused on pipelines to accelerate the participation of women in the clean energy workforce. 

Read the full list of initiatives here. 

Why this is important: Australia is a key ally in the Pacific, and a few of these agreements can help scale down the U.S.’s trade dependence on China – specifically with critical minerals as the nation amps up its clean energy goals. Australia has the second largest lithium reserves in the world, under Chile. China, on the other hand, sits under Australia as third largest. The latest initiatives would aim to reroute where the U.S. gets most of its lithium imports, which of currently is predominantly from China.

Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Breanne Deppisch (@breanne_dep) and Nancy Vu (@NancyVu99). 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.

E&C MARK-UP RESULTS: The Energy, Climate, and Grid Security subcommittee finished its mark-up this morning, reporting all 17 bills to the full committee with a number of measures passing by voice vote. We covered the list of bills in yesterday’s newsletter edition – read about it here. 

REGULATORS GIVE CLIMATE GUIDANCE TO BIG BANKS: Bank regulatory agencies last night finalized new principles for guidance to big banks – those with more than $100 billion in assets – for handling risks associated with climate change.

The final guidance is largely as proposed late last year by the agencies, which are the Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation.

It will tell banks how to manage two kinds of risks: First, physical risks associated with the changing climate. Second, transitional risks, which come as companies move away from fossil fuels.

The guidelines would cover governance; policies, procedures, and limits; strategic planning; risk management; data, risk measurement, and reporting; and scenario analysis, according to the Fed.

Prepare for a fight over climate politics: “The Federal Reserve is not and will not be a ‘climate policymaker,’” Fed chairman Jerome Powell insisted in a statement on the release of the principles.

Yet that is the criticism he is already facing. Republican Sen. Kevin Cramer of North Dakota said that “environmental activists have seized our nation’s financial regulators and are inserting their political preferences into the equation.”

Likewise, Independent Community Bankers of America CEO Rebeca Romero Rainey said her group is worried that “that the true aim of the principles is to choke off legal but disfavored industries from the financial system.”

A notable dissent: Two members of the Fed’s board of governors voted against publishing the principles for guidance. One, Christopher Waller, had in May outlined the case that climate change is real but does not pose a risk to the financial system.

MIKE JOHNSON’S HISTORY OF CLIMATE SCIENCE SKEPTICISM: House Republicans have gone through 14 candidates, four nominees, and several votes for the speakership – and last night selected their latest candidate in three weeks to take the gavel: Rep. Mike Johnson. The Louisiana lawmaker has received more campaign money from the oil and gas industry over the course of his seven-year congressional career than any other industry, and has repeatedly downplayed climate change, E&E News reports. 

If Johnson wins the 217 votes necessary for speaker, the vice-chair of the House GOP conference will ensure representatives from oil-rich Louisiana will occupy the top two seats in party leadership (Majority Leader Steve Scalise is the other).

“The climate is changing, but the question is, is it being caused by natural cycles over the span of the Earth’s history? Or is it changing because we drive SUVs? I don’t believe in the latter,” he said at a town hall in 2017. “I don’t think that’s the primary driver.”

Former Speaker Kevin McCarthy, by contrast, created a task force in 2021 in an effort to create a GOP policy on climate change. Read more on that here. 

SHELL SCALES BACK ON LOW-CARBON JOBS AND HYDROGEN: Shell is expected to cut around 15% of its workforce within its low-carbon solutions division and scale back its hydrogen business – orders coming from CEO Wael Sawan to drive profits, Reuters reports. 

The staff cuts and organizational restructuring comes after Sawan, who took over the company in January, promised to revamp Shell’s strategy to focus on higher-yielding projects, steady oil output, and grow natural production.

Shell will cut 200 jobs in 2024, and has placed another 130 positions under review to reduce personnel in the unit, which holds 1,300 employees, according to Reuters. Some of these roles will be integrated into other parts of the company.

The low-carbon solutions operations include hydrogen and other businesses looking to decarbonize transportation and industry sectors, but do not include the renewable power business. The company will reduce its hydrogen light mobility operations, which develop technologies for light passenger vehicles. Shell will also merge two of four general manager roles in the hydrogen business.

Shell was one of the early backers of hydrogen-fueled cars, but has closed a number of hydrogen fueling stations around the world as consumers opted for electric vehicles instead. Read more on that here. 

GENERAL MOTORS’ CRUISE BANNED IN CALIFORNIA: The California Department of Motor Vehicles said yesterday that it was suspending Cruise’s permit to operate driverless cars in the state, saying that the General Motors-owned company’s vehicles are “not safe for the public’s operation.”

Cruise, along with Waymo, had been allowed to run driverless taxis in San Francisco just a few months ago.

The DMV also accused Cruise of misrepresenting the circumstances of an accident this month in San Francisco in which a pedestrian was struck and knocked under one of its cars – which then executed a pull-over maneuver and dragged her 20 feet.

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