Daily on Energy, presented by API: It looks like liberals won on Biden personnel

That’s especially true with Biden’s newest picks, Rep. Deb Haaland of New Mexico to lead the Interior Department and Michael Regan to head the EPA. Haaland rode the possibility of being the first Native American cabinet secretary to beat out long-time Biden pal retiring Sen. Tom Udall, while Regan got the nod after liberals boxed out Mary Nichols, California’s air pollution chief who was once considered the favorite.

Now, liberals are poised to press their demands on policy and legislation, and if personnel is policy, they are in a better position to get what they want.

“It’s been a good week,” said Collin Rees, senior campaigner with Oil Change U.S., who has led a campaign of liberal groups pressing Biden on personnel.

“The pretty solid personnel picks this week give us better people to push, and also prove that Biden can be pressured to act,” Rees told Josh.

Haaland stands out as an outspoken progressive champion and original Green New Deal sponsor whose advocacy for transitioning the U.S. to 100% clean energy would suggest she is eager to fulfill Biden’s campaign pledge to ban all new oil and gas leasing on federal lands and waters.

Haaland and Biden’s choice for Energy secretary, former Michigan Gov. Jennifer Granholm, have aligned themselves with the “keep it in the ground” movement. In 2016, Haaland boosted her national profile by joining tribal leaders in rallying against the Dakota Access Pipeline.

“We see Haaland as likely confirmation of Biden’s intent to end leasing,” the research group ClearView said in note last night, although she will be in a tricky spot given her home state is the top oil producer on federal lands.

Can Biden’s team stay on the same page? Brandon Hurlbut, a former Energy Department chief of staff in the Obama administration who is on the board of the liberal Sunrise Movement, noted Biden appointed a mix of experienced, relatively centrist former colleagues, along with fresher faces more widely embraced by liberals.

Biden has tapped the Obama administration well for his top economic adviser (Brian Deese), climate “czar” (Gina McCarthy), and climate diplomat (John Kerry).

“He has done a terrific job of choosing people who have experience and can hit the ground running on Day One and others who can bring in fresh thinking to represent people of color,” Hurbult told Josh.

To appease liberal groups, Biden has broken with his history of leaning on familiar faces (he had no previous relationship with Haaland and Regan). That could set up a clash of perspectives, but, Hurlbut said, “ultimately, the president makes the decision.”

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BIDEN’S EPA PICK IS WIN TOO: Regan, North Carolina’s top environment official, will be the first black man to lead the EPA if confirmed, and only the second black administrator, at a time when liberal environmentalists want to see the Biden administration address the disproportionate effects pollution has on minority and low-income people.

Outcry from liberal and California environmental groups that Nichols has ignored the concerns of minority and low-income people ultimately jeopardized her bid for the top EPA job. Regan, meanwhile, received broad praise across the environmental community, as groups said he would be able to restore an EPA demoralized in the Trump administration.

Regan as EPA administrator would also provide a blank slate of sorts. Nichols has been aggressively regulating on climate for years, and her policy positions are more set in stone, whereas Regan would bring a different perspective not as shaped by regulatory battles with the Trump administration.

Nichols praises Regan’s nomination: In a tweet yesterday, Nichols congratulated Biden for his pick. North Carolina, California, and other states in the U.S. Climate Alliance “have led on #climateaction, #cleanenergy & #ZEVs while US was stalled,” she said. “We stand ready to support Michael & EPA in protecting #publichealth for all Americans.”

THAT NOISE YOU HEAR: Seeking to exploit their leverage, a coalition of liberal groups led by Oil Change U.S., Greenpeace, 350.org, and the Center for Biological Diversity launched a “pressure campaign” yesterday pushing Biden to limit fossil fuel production.

The green groups list 25 executive actions Biden should take, including banning new oil and gas leasing on federal lands, rejecting permits for all fossil fuel infrastructure, ending fossil fuel subsidies, and reinstating the ban on crude oil exports.

SELLING A CARBON TAX AND DIVIDEND: A Republican-backed group pushing for Congress to pass a carbon tax is out with a new study today showing it would achieve the same level of emissions reductions as a regulatory approach while producing better economic outcomes.

The group, the Climate Leadership Council, is seeking to shore up support for its carbon tax and dividend proposal as policymakers have gravitated toward other ideas, such as standards and industrial-scale spending.

That policy debate is set to intensify under Biden, whose climate plans seem to broadly endorse a mix of standards, regulations, and huge federal investments on renewables and electric vehicles.

What the numbers say: The new Council study, completed by NERA Economic Consulting, found the carbon tax and dividend plan would cut carbon emissions in half by 2036, about the same as an approach featuring a mixture of regulations and mandates.

But the carbon dividends policy results in an additional $190 billion per year in gross domestic product, on average, and by 2036, annual GDP is $420 billion higher under that method

By 2036, annual consumption per household is $1,260 higher with the carbon dividends approach than projected under the regulatory scenario, as people benefit from the subsidy to offset higher energy costs.

“The intent of this study was not to criticize any particular regulation, however, if our objective is to find a global solution to climate change and rapidly decarbonize in a way that promotes the economy and where U.S. families come out ahead, it’s clear our solution is the best approach,” Greg Bertelsen, CEO of the Council, told Josh.

CLC has a key ally: Bertelsen is also staking hope in Biden’s pick for Treasury secretary, Janet Yellen, a long-time carbon tax booster who is a founding member of the Council.

“She cares deeply about finding a pragmatic solution to climate that promotes economic growth,” Bertelsen said.

CYBERATTACK REACHES ENERGY AGENCIES: The Energy Department’s National Nuclear Security Administration, which maintains the U.S. nuclear stockpile, was compromised as part of a monthslong cyberespionage campaign that is suspected to have been orchestrated by Russian hackers.

Shaylyn Hynes, a DOE spokesperson, said the agency is investigating the hacks, which infected the software company SolarWinds, an IT company that runs network management systems and whose thousands of clients including federal government agencies and Fortune 500 companies.

“At this point, the investigation has found that the malware has been isolated to business networks only, and has not impacted the mission essential national security functions of the Department, including the National Nuclear Security Administration,” Hynes said.

The attack reportedly also affected FERC, which uses SolarWinds to manage its IT assets.

FERC Commissioner Neil Chatterjee, however, told Josh that the commission did not find “any conclusive evidence that the malicious actors” infiltrated FERC systems or accessed data. Following a directive from the Department of Homeland Security, Chatterjee said FERC removed use of SolarWinds from its infrastructure.

“We are currently reviewing our IT environment comprehensively. We will continue working with our vendors and federal partners to comply with DHS guidance and ensure the security of our systems and data,” Chatterjee said.

Extra FERC action: We covered some of the highlights of its monthly meeting yesterday, but we also should mention the commission proposed a rule to create incentives for utilities to add extra cybersecurity protections beyond minimum requirements.

SPEAKING OF…BROUILLETTE ISSUES ORDER ON GRID SECURITY: Energy Secretary Dan Brouillette issued an order yesterday preventing utilities from installing specific types of electric equipment from China that “poses an undue risk to the [bulk power system], the security or resilience of critical infrastructure, the economy, national security, or safety and security of Americans.”

The order fulfills an executive order President Trump signed in May barring U.S. purchases of certain foreign-produced power equipment, a move meant to reduce national security risks to the electricity system.

GRAHAM WANTS A VOTE ON PARIS THIS CONGRESS: Sen. Lindsey Graham says he’d like to see the Senate be “on record” about whether it supports re-entering the Paris climate agreement, a vote that could be a last-ditch effort to make it harder for Biden to rejoin the deal.

“As currently drafted, the Accord is a big win for China and India,” Graham said in a tweet this week. “These two nations are enormous CO2 emitters and, under the Accord, go virtually unchallenged. Climate is a worldwide problem, not just an American problem.”

Graham is working from conservative groups’ playbook: Free market conservative groups such as the Competitive Enterprise Institute, big opponents of the Paris deal, are working to convince Trump to send the Paris Agreement to the Senate for a ratification vote before he leaves office.

“The president himself has to be presented with the ability to make that decision. If he has that, I expect he’ll make the right decision,” Myron Ebell, CEI’s energy and environment director, told Abby recently. “There are no doubt people in the White House working to make sure he doesn’t have that decision come to him.”

Ebell said if the Senate voted and rejected the Paris deal, it could make it harder for Biden to rejoin, but not necessarily impossible. Biden could ignore the vote, defy it, or go around it, Ebell added, but he “would be undermined internationally if he tried to do that.”

LONG STORY SHORT, IT WAS A BAD TIME: Global coal demand will fall 5% this year, the largest drop since World War II, driven by the pandemic, the International Energy Agency said in a new report this morning.

Coal consumption, too, has taken a significant hit, falling 7% over the last two years, a decline the IEA said is “unprecedented” in its records, which date back to the 1970s.

Next year will be a better year for coal, with global demand rebounding 2.6%, driven largely by China, India, and southeast Asia, according to the report. The IEA also projects coal’s decline in Europe and the U.S., as coal-fired power plants shutter, could even slow in 2021, with those regions seeing their coal consumption increase for the first time in almost a decade.

That’s not necessarily good news: But even as coal power is expected to rebound next year by 2.8%, its share of electricity generation will still be lower than in 2019. In 2021, coal will make up 35% of global electricity production, the lowest level in IEA records, and the report notes renewable energy will make up a larger share of new electricity demand next year than coal.

The place to watch for the future of coal, the IEA says, is China, which has recently pledged to reach carbon neutrality by 2060. To follow through on that pledge could require an economy that consumes around 4 billion tons of coal each year to massively shift away from the resource.

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