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WHAT MANCHIN WANTS: Sen. Joe Manchin, a key centrist whose approval is required to pass the party’s massive social and climate spending package, has indicated in writing to party leaders what his demands are on energy policy.
Manchin proposed a deal to Senate Majority Chuck Schumer this summer to limit the total cost of Democrats’ reconciliation spending bill to $1.5 trillion, and has been shopping it around to colleagues in recent days, according to a memo obtained by Politico and published this morning.
Manchin and Schumer both signed the document, but Schumer left a note in the margins saying he’s trying to “change Joe” on some of it.
On climate, none of Manchin’s demands are surprising, but they finally give some specificity to what he wants.
He asks that the Senate Energy Committee he chairs have “sole jurisdiction on any clean energy standard,” a reference to Democrats’ Clean Electricity Performance Program. That was the expectation of how things would proceed anyway, since the program would be implemented by the Energy Department that his committee oversees.
Manchin calls for “innovation not elimination” of energy sources, while adding he expects the clean electricity program to be “fuel neutral.”
That last part seems to suggest Manchin, as expected, wants the program to be more lenient on natural gas and to reward utilities that switch from coal to gas.
On tax policy, Manchin wants credits for coal and gas power plants that use carbon capture and storage technology, and he requests that fossil fuel subsidies not be repealed if tax credits for wind and solar power are extended in the bill. He also asks that any tax credits for vehicles not be limited to electric cars and include hydrogen-powered ones.
Seeing the contours of a deal: Manchin won’t get everything he wants, as some of these proposals are likely to upset liberals whose votes are also needed for Democrats to pass a bill through the split Senate.
But his requests show what a possible endgame compromise between progressives and centrists could look like. It would retain the core pieces of Democrats’ climate agenda — the CEPP program and clean energy tax credits — while providing more leeway to fossil fuels.
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PELOSI STICKING WITH INFRASTRUCTURE VOTE: House Speaker Nancy Pelosi is pushing ahead with a plan to vote on a bipartisan infrastructure package this afternoon despite significant opposition from liberals who say they will block it, the Washington Examiner’s Susan Ferrechio reports.
“We are on the path to win the vote,” Pelosi said. “I don’t want to consider any option other than that.”
The measure faces steep opposition from the left wing of her caucus, who are awaiting an elusive agreement among House and Senate Democrats on the larger social and climate package.
Pelosi believes she can convince liberals to first pass the infrastructure bill and then proceed with negotiation on the larger package.
“We had a great morning,” Pelosi said, describing talks with members of her caucus. “Lots of conversations, as we come to the end.”
Pelosi’s optimism defies firm pledges from House liberals that they have the numbers to block the bill.
House Progressive Caucus Chair Pramila Jayapal told reporters more than half the 95-member group will vote against the infrastructure bill unless they see a framework agreement from Senate Democrats on the larger measure.
The bipartisan infrastructure bill, which already passed the Senate, provides $550 billion in new spending, including narrower climate provisions, such as funding for demonstration projects for a host of new clean energy technologies, as well as billions on electric vehicle charging stations, mass transit, rail, climate resilience, grid upgrades, and more.
WHITE HOUSE HEDGING AGAINST FAILURE: White House climate adviser Gina McCarthy argued again yesterday the Biden administration can still meet its climate goals if the reconciliation bill fails.
“I don’t think we need to have every penny in here to make tremendous progress,” she said on a webinar hosted by the group Environmental Entrepreneurs.
That rhetoric is consistent with previous comments McCarthy has made to hedge against the package failing, saying as recently as last week the administration doesn’t need to “rely on that to get to where we need to go.”
The comments still sparked a bit of an uproar from activists, forcing McCarthy to clean up the mess. She later tweeted that the clean electricity performance program, or CEPP, remains a “top priority.”
It’s true the administration is acting on its own, strengthening regulations on methane from oil and gas and other pollutants and imposing stricter fuel efficiency standards. But analysts say the clean electricity performance program and clean energy tax credits Democrats are proposing in their reconciliation package are essential to achieving President Joe Biden’s Paris Agreement target of slicing U.S. emissions in half by 2030.
FERC COMMISSIONERS TUSSLE OVER CEPP: Democratic FERC commissioners are striking back at their Republican colleagues who warned this week that imposing the CEPP could lead to higher prices and energy shortages.
“Doomsday predictions about the reliability and cost impacts of potential federal legislation or state decisions do not find support in the data. At best, they assume a static regulatory regime incapable of evolving out of the status quo,” Commissioner Allison Clements, a Democrat, said at a FERC reliability technical conference this morning.
Chairman Richard Glick, also a Democrat, took specific aim at Republican Commissioner James Danly‘s comment at a Senate hearing Tuesday comparing the CEPP to an “H bomb” that would throttle electricity markets.
The comparison to a weapon of mass destruction is “absurdity,” Glick said. “Climate change and extreme weather are obviously the big threats toward grid reliability.”
CLOSING DIABLO CANYON COULD COST $1.5 BILLION UNDER CEPP: Closing the Diablo Canyon nuclear plant in California as currently planned would lead to the imposition of major costs under House Democrats’ proposed clean electricity performance program, according to an analysis released yesterday by the Breakthrough Institute.
Shuttering Diablo Canyon, the last operating nuclear plant in California, this decade will cost between $500 million and $1.5 billion in CEPP penalties and foregone federal payments.
The California utility PG&E is planning to decommission Diablo Canyon in 2024 and 2025 (with one of the two generating units retiring in each year), despite the plant providing about half of the company’s current clean energy generation.
Breakthrough analysts say this will “very likely result” in PG&E paying a penalty under the CEPP, though the magnitude of this penalty depends on the extent to which Diablo’s generation can be replaced by other clean generation in the year it retires, or if it is instead replaced by natural gas.
While CEPP is intended to increase the growth of wind, solar, and other zero-carbon resources, it could also prevent existing carbon-free facilities, like at-risk nuclear plants, from closing prematurely.
SOLAR FIRMS LOBBY AGAINST TARIFF REQUEST: Solar firms who purchase cells and modules from Malaysia, Thailand, and Vietnam are campaigning hard against a request from U.S. solar manufacturers for tariffs on like Chinese products to be expanded to those countries, the Washington Examiner’s Jeremy Beaman reports.
The Solar Energy Industries Association has spent the last several weeks ramping up its effort against the petitions, which it says threaten the U.S. solar industry and transition to clean energy. Some firms maintain the petitions are already hurting business — even before the Commerce Department makes a decision to formally consider them.
“Just the submitting of this petition has essentially frozen the market,” George Hershman, president of Swinerton Renewable Energy, said in a call with reporters earlier this week. “We can’t get module manufacturers today to sign purchase orders that we need to deliver projects in the near term because of the concern over whether or not there’s going to be a 50% to a 250% tariff when those modules hit the port.”
The Commerce Department asked the petitioners yesterday for additional information about how they are harmed by the imports before making a decision on whether to consider their request for tariffs.
NO MORE PAUSE…OFFSHORE LEASE SALE SCHEDULED: The Biden administration has scheduled its first offshore oil and gas leasing as it complies with a ruling by a federal judge that found its indefinite pause on new auctions to be illegal.
The Interior Department’s Bureau of Ocean Energy Management announced today that it will hold an oil and gas lease sale for the Gulf of Mexico on Nov. 17 to comply with the court order from a Louisiana federal district judge.
The Biden administration is appealing the decision to the United States Court of Appeals for the 5th Circuit, but it also committed to restart leasing during the appeals process.
The offshore energy lobby group National Ocean Industries Association called the administration’s advancement of the Gulf of Mexico lease sale “welcome news for the American worker and our national security.”
PATHWAY FOR CHINA TO CLEAN ITS DIRTY STEEL SECTOR: It is technically and economically feasible for China to decarbonize its heavily polluting steel sector, the environmental group RMI claims in a report released yesterday.
The report outlined three steps China could take to do it: demand reduction, steel recycling, and switching to carbon capture and storage and other low-carbon steelmaking methods like using hydrogen.
China produces and consumes more than half of the world’s steel, accounting for about 17% of the country’s world-leading carbon emissions, according to RMI.
The country’s steel sector is harder to decarbonize than most because China has much deeper reliance on coal as fuel and feedstock, very young operating assets, and a larger portion of primary steel production. But China can’t meet its promise of carbon neutrality by 2060 without overcoming these challenges.
“The decarbonization of the steel industry will make an important contribution to China’s goal,” said Ting Li, regional managing director and chief representative of RMI’s Beijing office. “The low-carbon transformation of the industry will be driven by emerging new technologies and market changes.”
The Rundown
Wall Street Journal China’s manufacturing weakens, as power cuts threaten more damage
E&E News Utilities push to weaken Biden’s signature climate plan
Reuters The king of oil bets on batteries for a green world
Bloomberg Big Oil splits on oil’s future
New York Times Gas shortages awaken Britain to some crucial workers: truck drivers
Calendar
WEDNESDAY | OCT. 6
10 a.m. 406 Dirksen. The Senate Environment and Public Works Committee will hold an oversight hearing to examine the response by the U.S. Army Corps of Engineers to Hurricane Ida.
