Daily on Energy: Biden tries to get utility industry on board with clean power agenda

President Joe Biden’s climate adviser Gina McCarthy and her deputy Ali Zaidi are meeting today with the utility trade group Edison Electric Institute, spokesman Brian Reil confirmed to Josh.

Reil said EEI in the meeting would reinforce its “commitment to being part of the climate change solution.”

While utilities are likely to try and push the White House off its 2035 target date, we can envision a world in which some sort of compromise is reached.

“Most power companies have set pretty aggressive goals for reducing carbon emissions, but they don’t believe it’s possible to have a carbon-free power sector by 2035,” said Jeff Holmstead, an attorney with Bracewell who represents utilities, and a former deputy administrator of the EPA.

“My sense is that they would like to work with Congress and the Administration to put together a CES that’s doable, but the 2035 date just isn’t realistic in the real world,” Holmstead told Josh.

EEI’s president Tom Kuhn declared as recently as February that the 2035 date would be “an incredibly difficult situation to handle for most companies of the industry.” He warned of the potential for reliability problems and rate increases for customers if utilities were mandated to meet that timeline without progress on building transmission lines, and more progress on developing nascent low-carbon technologies such as advanced nuclear and carbon removal.

“Meeting any target is going to require substantial investments in research, development, demonstration, and deployment, so the top priority is scaling up these efforts,” Reil told Josh.

Hear us out: Many utilities, though, support the concept of a federal clean electricity standard as a way to harmonize various state policies. Utilities see the writing on the wall that Democrats have coalesced around a federal standard over carbon pricing, and they want to play a role in shaping legislation.

A “well-designed” clean energy standard is the “right approach to climate policy,” Ben Fowke, the CEO of Xcel Energy and the current chair of EEI, told lawmakers during a hearing last month in the Senate Environment Committee.

There’s precedent: Fowke suggested many more in the utility industry support a clean energy standard approach. Some other power companies, including Southern Company, American Electric Power, and Duke Energy, praised a bipartisan clean energy standard unveiled by Reps. David McKinley and Kurt Schrader last year — though that proposal sets a much less stringent target than the one proposed by Democratic leaders.

Another big utility, Dominion, came around last year to support a Virginia law requiring 100% carbon-free electricity by 2045 under pressure from the state’s Democratic legislature, after previously being skeptical of the feasibility.

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OIL INDUSTRY MUM ON BIDEN JOBS PITCH: The oil and gas industry does not sound gung ho about a provision of Biden’s green infrastructure plan to invest $16 billion to employ “hundreds of thousands” of fossil fuel workers to plug leaking wells.

The American Petroleum Institute did not directly comment on the specific proposal (which is admittedly sparse on details at this point), when asked for comment by Josh.

Instead, API’s Frank Macchiarola, senior vice president of policy and regulatory affairs, said generally that “our industry is fully committed to complying with existing state and federal requirements for abandoned wells and reclaiming wells sites, and we will continue to support efforts to plug these wells and further reduce methane emissions.”

The oil and gas industry has previously emphasized that of the 56,000 “verified” orphaned wells in the U.S., the vast majority (more than 50,000) are located on state and private lands. It’s unclear if a federal program to plug wells could deal with state and private lands.

Laura Daniel Davis, the Interior Department’s principal deputy assistant secretary of land and mineral management, said during a forum last week on Biden’s pause of new oil and gas leasing that a “partnership” to plug abandoned wells “is not limited to federal lands.”

BIDEN’S SALES JOB: Biden honed his jobs pitch during his remarks in Pittsburgh formally unveiling the infrastructure plan

The package would put “hundreds of thousands of people to work,” Biden said, citing the potential for line workers, electricians, and laborers, to lay thousands of miles of transmission lines and, of course, oil and gas workers plugging orphan oil and gas wells at the “same exact rate that a union man or woman would get having dug that well in the first place.”

Among other big promises, Biden pledged his plan would “provide tax incentives and point of sale rebates to allow all Americans to afford clean electric vehicles.”

China on his mind: He framed his effort to expand the federal government’s role in modernizing infrastructure and fighting climate change as a way to compete with China and its state-run government for industries of the future by furnishing stagnant R&D funding and creating a clean energy technology supply chain in the U.S.

“There’s a lot of autocrats in the world who think the reason why they’re going to win is democracies can’t reach consensus any longer,” Biden said. “That’s what competition between America and China and the rest of the world is all about. It’s a basic question: Can democracies still deliver for their people? Can they get a majority? I believe we can.”

KERRY HEADED TO INDIA AND UAE FOR CLIMATE TALKS: Climate envoy John Kerry is traveling to India and the United Arab Emirates beginning today as part of his effort to encourage countries to increase their commitments to reduce emissions this decade. The trip comes ahead of a climate summit the U.S. is hosting later this month with the leaders of top emitting countries.

The Biden administration hopes the summit meeting creates momentum for the next U.N. climate conference scheduled for November, when countries are expected to formally submit updated pledges, or a Nationally Determined Contribution, for emissions cuts by 2030.

Kerry is focusing his climate advocacy on India, the world’s third biggest emitter, because it has not yet set a net-zero emissions target. India has a growing population and coal-dependent economy, but it has set aggressive commitments to expand renewable power to 450 gigawatts by 2030, almost five times existing capacity. Its per capita emissions are much lower than the U.S. and China.

In Abu Dhabi, the capital of UAE, Kerry is expected to join a regional climate discussion on April 4 with other countries in the Middle East and North Africa, according to the Wall Street Journal.

GRANHOLM PHONES SAUDI ARABIA AHEAD OF OPEC+ DECISION: Energy Secretary Jennifer Granholm tweeted last night that she spoke with Saudi Energy Minister Abdulaziz bin Salman al-Saud on the “importance of international cooperation to ensure affordable and reliable sources of energy for consumers.”

The call came ahead of a meeting today of Saudi-led OPEC+ to discuss whether the cartel and its allies such as Russia should lift its production cuts in May, or to keep it going as the world economy continues its slow recovery from the pandemic.

The alliance agreed to a gradual increase of production over a three month period, according to reports.

Climate also on the agenda: In the call between Granholm and her Saudi counterpart, the two energy leaders also discussed “collaboration to solve common challenges and develop renewable energy sources, increase efficiency, reduce methane in oil and gas production, and develop clean forms of hydrogen to combat climate change,” according to the Granholm’s account.

The Saudi energy minister seemed to get the message, dedicating the opening of his comments at the OPEC+ meeting to tout its new “Green Initiative” to plant 10 billion trees and make half of the country’s power from renewable sources by 2030.

“OPEC and the oil and gas industry must be part of the solution to climate change,” he said.

EPA DISMISSES TRUMP-APPOINTED SCIENCE ADVISERS: The EPA, in a rare move yesterday, dismissed dozens of science advisers in a bid to reconfigure the panels following Trump administration appointments that critics said packed the panels with industry representatives.

Members of the EPA’s Science Advisory Board and the Clean Air Scientific Advisory Committee, both of which advise the agency on the science behind its regulations, were informed yesterday morning their membership on the panels had expired. The EPA published notices today seeking new nominations for the panels.

“Resetting these two scientific advisory committees will ensure the agency receives the best possible scientific insight to support our work to protect human health and the environment,” EPA Administrator Michael Regan said in a statement.

The EPA said it would seek to “reverse deficiencies” caused by changes the Trump administration made to the selection process, including a 2017 directive from former EPA Administrator Scott Pruitt that barred scientists who had received research grants from the agency from serving on the panels. That directive was overturned by a federal appeals court last year.

John Graham, who had been appointed in October by former EPA Administrator Andrew Wheeler to chair the Science Advisory Board, criticized the abrupt move from Regan and said he won’t be reapplying for a position, which the EPA encouraged dismissed members to do.

“We agree that Administrator Pruitt’s decision to bar scientists with EPA grants was misguided but that does not mean that the scientists that were selected and worked hard for several years were unqualified,” he said in an emailed statement.

Graham added that the Science Advisory Board “exposed the scientific shortcomings” of a number of Trump EPA actions, including plans to weaken fuel economy standards and water pollution protections, as well as actions to restrict the types of science the EPA can use in policymaking and shift how the agency counts the public health benefits of reducing pollution.

CLIMATE TAKES CENTER STAGE AT FIRST FSOC MEETING: The financial risks from climate change will be a central focus of the Financial Stability Oversight Council, Treasury Secretary Janet Yellen said, chairing her first meeting of the council yesterday during which she led a discussion with agency members about what steps they’re taking to address the issue.

Leaders at federal agencies and entities such as the Securities and Exchange Commission, the National Credit Union Administration, the Commodity Futures Trading Commission, and the Federal Housing Finance Agency all outlined efforts they’re taking to beef up their capacity to understand and address climate change risks to the economy.

The council also heard a presentation from the Federal Reserve on what actions it is taking to address climate change risks to financial stability. Federal Reserve Chairman Jerome Powell said one of the goals is to incorporate climate change into its regular financial stability framework.

“Greater transparency to improve measurement and disclosure could improve the pricing of climate risks, thereby reducing the likelihood of abrupt changes in prices of climate-related assets,” Elizabeth Kiser, an economist and associate director at the Fed, told council members.

BIG OIL LOSES ANOTHER BID TO MOVE CLIMATE CASE TO FEDERAL COURT: A federal district court judge rejected a bid from ExxonMobil, the American Petroleum Institute, and other oil companies to move a climate change liability brought by Minnesota Attorney General Keith Ellison to federal court.

Judge John Tunheim, in a ruling yesterday, dismissed claims from the oil companies that Minnesota was seeking broadly to limit fossil fuel extraction and production, instead concluding the state’s action is “far more modest” focused on alleged violations of state common law and consumer protection laws over which the state has clear authority.

“This is the 11th federal court to come to the same conclusion — that climate damage and deception lawsuits filed in state court belong in state court,” Ellison said in a statement. Oil companies have lost a number of other bids to move such climate liability cases to federal court, a venue they see as more favorable, and the Supreme Court heard oral arguments in January on the oil industry’s appeal on this issue in a case brought by Baltimore.

Tunheim, in his ruling, also rejected a motion from the oil companies to put Minnesota’s lawsuit on pause until the Supreme Court issues a ruling in the Baltimore proceedings.

BUT OIL COMPANIES SEE A WIN TOO: A federal appeals court this morning affirmed a lower court ruling dismissing New York City’s climate liability case seeking to force five major oil companies to pay damages for harms the city has experienced from climate change.

“Stripped to its essence, then, the question before us is whether a nuisance suit seeking to recover damages for the harms caused by global greenhouse gas emissions may proceed under New York law,” wrote Judge Richard Sullivan of the U.S. Court of Appeals for the Second Circuit. “Our answer is simple: no.”

Worth noting: While the ruling gives the oil industry some legal precedent to point to in other climate liability cases, it’s not possible to say this means the two dozen other lawsuits will ultimately face the same fate.

New York City, unlike many others in climate liability cases, filed directly in federal court as opposed to state court. And some of the other lawsuits, like Minnesota’s case, make targeted claims under state consumer protection laws, where states have more direct jurisdiction.

CHECK IT OUT: Josh moderated a panel event airing today with former Republican Rep. Ryan Costello of Pennsylvania and other guests focused on how U.S. energy policy is confronting the impact of climate change. The discussion is part of an ongoing series between George Washington University’s Graduate School of Political Management and the Washington Examiner.

We discussed the legislative prospects of Biden’s green infrastructure plan, Costello’s support for carbon pricing, and more. Check it out here.

The Rundown

New York Times Unanswered in Biden’s climate plan: Whose home will, and won’t, be saved?

Politico When companies go green, the planet doesn’t always win

Reuters White House asks EPA to study whether EVs can generate renewable fuel credits

Bloomberg US shale output to further erode even as oil surges, BNEF says

Calendar

TUESDAY | APRIL 6

1 p.m. The National Association of State Energy Officials, Energy Futures Initiative, and BW Research Partnership will hold a virtual event to present supplemental analysis to the 2020 U.S. Energy and Employment Report.