Daily on Energy: What is in the U.S.-China pledge, and what’s missing

Agreement to talk further: The two sides agreed to restart workshops on energy policy and climate change. Those talks had been put on hold by China in retaliation for then-House Speaker Nancy Pelosi’s trip to Taiwan last year. The resumption of talks could help raise expectations for COP28 as well.

Agreement on tripling renewable energy: The two sides endorsed the G-20-backed target to triple global renewable energy capacity by 2030, and at a fast enough rate “to accelerate the substitution for coal, oil and gas generation,” according to the text shared by the State Department.

“Having the two countries really backing that— and hopefully working together diplomatically to push that over the finish line is likely to be super helpful,” Lauri Myllyvirta, the lead analyst at the Center for Research on Energy and Clean Air, told Breanne.

Agreement on reduction targets for all greenhouse gas emissions: China agreed to join the U.S. to make a plan to curb all greenhouse gas emissions, in an apparent first for the country. This would include methane emissions, which are released by coal-fired plants and are 80 times as potent as other greenhouse gasses, and which China has been pressured to reduce in recent years.

No agreement on explicit emissions reductions targets: The agreement does not explicitly set emissions reduction targets that would require China to scale down its coal operations or cease development of new coal plants, which the country continued to approve as recently as this year.

Rather, it says that leaders plan to set the targets in the future—allowing enough ambiguity for Beijing to skirt the issue and avoid taking actual action, something it has done on many occasions in years past.

“For it to actually move things, [the agreement] will have to be a lot more specific about the kinds of reductions that should be achieved by 2030 or 2035,” Myllyvirta said.

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.

NEW HEARINGS ON E&C: Republicans on the House Energy and Commerce Committee announced two new hearings focused on energy security and emissions reduction efforts as they prepare to fine-tune their messaging and preview their bipartisan trip to the U.N. climate summit in Dubai, Breanne reports. 

The hearings, shared exclusively with the Washington Examiner, will be held Nov. 29 and Dec. 5 and will highlight U.S. leadership in clean energy and efforts to build on that role and help allies reduce dependence on Russia and China for energy production.

Witnesses for both hearings are expected to be announced in the coming days.

“American energy and environmental leadership matters,” House Energy and Commerce Chairwoman Cathy McMorris Rodgers, who is co-leading the bipartisan delegation to the COP28 summit, told the Examiner. “We need to build on this legacy — not shy away from it, especially on a world stage like COP.”

The bipartisan delegation was announced last week and comes as some Republicans on the Energy and Commerce Committee look to present an alternative to the Biden administration’s ambitious clean energy targets.

Rather, they plan to argue that building a strong energy mix is the best way to create jobs, embracing an “all-of-the-above” approach to reduce emissions, strengthen energy security, and secure U.S. supply chains, “without sacrificing our innovation, economic development, or our national security,” according to a spokesperson for the committee.

Their efforts will cut a sharp contrast to the Biden administration’s recent messaging on China, however, including efforts to stabilize rocky diplomatic relations and coordinate on key climate issues. Read more from Breanne here. 

JPMORGAN’S NEW WAY OF ASSESSING GREEN DOLLARS: JPMorgan Chase is changing how it calculates greenhouse gas emissions that stem from the funding it provides oil and gas companies, Bloomberg reports. 

The Wall Street giant, which is also known as the world’s leading fossil fuel financier, said that it will evaluate its financing of zero-carbon power generation to assess how well it’s supporting a low-carbon transition.

“A singular focus on fossil fuels won’t successfully achieve the necessary transition of the global energy system,” the bank wrote in its annual climate report. “Supporting the rapid build-out of zero-carbon power” will “help replace fossil fuels and reduce emissions.”

On Wednesday, JPMorgan said its oil and gas clients’ Scope 1 and 2 emissions will stand apart from their Scope 3 emissions. Under the company’s new plan for assessing its green progress, financed Scope 3 emissions will be combined with the “zero-carbon power generation activity” it also funds, such as solar, wind and hydropower, as well as nuclear. The bank is labeling this an “energy mix target,” saying that its new goal is to reduce the carbon emissions of its energy-mix financing portfolio by 36% by 2030. The energy mix target, the bank said, is intended to “reflect the reality that we also need to prioritize a significant build-out of clean energy sources.”

Like many other banks, JPMorgan has set interim decarbonization goals for most of its carbon intensive areas of its balance sheet, including oil and gas. While loans to fossil fuel companies comprise 3% of its lending portfolio, scope 3 emissions from the companies are by far the biggest contributor to the bank’s financed emissions, generating five times more greenhouse gas pollution than the next heaviest-emitting sector.

The bank also said all of its new and existing targets will be oriented around the International Energy Agency’s Net Zero Emissions by 2050 scenario. Previously, the bank aligned itself with the IEA’s sustainable development scenario, which aims to achieve net zero emission by 2070. Read more about that here. 

GULF OF MEXICO LEASE WILL BE HELD, DESPITE ENVIROS’ CONCERNS: An auction of federal Gulf of Mexico leases for oil and gas drilling must be held in 37 days, a federal appeals court ruled Tuesday – dismissing environmentalists’ concerns about the sale and throwing out plans by the Biden administration to scale back the auction to protect an endangered species of whale.

As the Associated Press lays out, the 5th Circuit Court of Appeals ruling means the lease sale – which was scheduled for September but was postponed due to litigation – will be held in December. Furthermore, it will cover 73 million acres, as originally planned when the administration announced the sale in the spring.

In August, the administration scaled back the area covered by the lease sale to 67 million acres, as part of an agreement with environmentalists to protect the endangered Rice’s whale. But the state of Louisiana joined oil and gas companies in opposing the changes.

A federal judge in Southwest Louisiana ordered the sale to go on without the whale protections, which also included regulations involving vessel speed and personnel. That led to an appeal by environmental groups, and delays to the sale as arguments continued.

However, on Tuesday, the 5th Circuit panel rejected the appeal. The judges in the case, Edith Brown Clement, Catharina Haynes, and Andrew Oldham – who are Bush and Trump appointees – found that the group did not have standing the case because they were unable to show that they will suffer “certainly impending” injury or that any such issues would be likely resolved by the court.

An attorney for the environmental group called the ruling “disappointing and unjustified,” in an emailed statement.

“This could be the difference between doing the bare minimum to save this species, and allowing it to vanish,” George Torgun, an attorney for the group Earthjustice, said in a statement.

The American Petroleum Institute, on the other hand, lauded the ruling.

“Energy independence scored an important win tonight with the Fifth Circuit decision lifting unjustified restrictions on oil and natural gas vessels and restoring acreage for offshore energy development,’’ said senior vice president and general counsel Ryan Meyers. Read more on that here. 

PROJECT PERMIAN DELAYED: Clean energy company NET Power is delaying the world’s first utility-scale gas plant with carbon capture, citing global supply chain concerns, Nancy reports.

In an earnings call on Tuesday, CEO Danny Rice said the project, known as Project Permian, would be delayed to “between the second half of 2027 and the first half of 2028.” The project, which was expected to generate electricity with nearly zero emissions, was supposed to come online in 2026.

“The global energy supply chain is lagging current market demand for new energy infrastructure, which means excessive lead times across many critical components for years to come,” Rice said. “Our supply chain strategy is intended to alleviate these market constraints, and we must prudently incorporate the current supply chain challenges into our project timing and planning.”

Project Permian, which was unveiled last November, was anticipated to generate 300 megawatts of energy and deliver almost emissions-free electricity to the grid. The company previously adjusted the cost of the project to be approximately $1 billion, an increase from an initial price tag of between $750 million and $950 million. Read more about that here. 

THUNBERG PLEADS NOT GUILTY: Climate activist Greta Thunberg pleaded not guilty to a public order defense in London after being arrested while protesting an oil and gas conference.

The 20-year-old Swedish activist was at Westminster Magistrates Court to plead with nine other protestors. A trial is set for Feb. 1, Bloomberg reports. 

Thunberg was arrested on Oct. 17 during a protest at the Energy Intelligence Forum at the Intercontinental Hotel, where oil and gas executives were speaking.

Outside Westminster Magistrate’s Court on Wednesday, about 20 protestors held signs with slogans such as “Fossil Free London” and “Oil Money Out,” chanting in support of urgent action on climate change.

Thunberg has championed the voice of young people in the global fight against climate change since her strike against attending school captured international attention in 2018. Read more on that here.

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