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DRILLING UPTICK: The Interior Department approved 2,500 requests to drill for oil and gas on public land in the first six months of this year — meaning the Biden administration is on pace for the highest level of permit approvals since George W. Bush, according to an analysis from the Associated Press this morning.
While that might seem surprising, it shouldn’t be. Interior officials have repeatedly sought to assure lawmakers from oil and gas states that the agency continues to approve permits to drill on existing leases at a steady pace even as it has suspended the issuance of new leases.
The pause on new lease sales does not stop companies from obtaining permits to drill and develop oil and gas on existing leases, and many companies “banked” leases and permits before President Joe Biden came into office, protecting against his campaign promises.
“As I have said many times, gas and oil production will continue well into the future. We believe that is the reality of our economy and the world we are living in,” Interior Secretary Deb Haaland said in testimony before Congress last month.
Future more uncertain: We’re awaiting a report any day now from Interior on the future of the oil and gas leasing program, in which the agency is expected to propose reforms that could make it harder to produce fossil fuels on public lands.
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BORDER CARBON TAX STILL ON THE TABLE, BUT HOW? The Biden administration is not ruling out taxing imports of carbon-intensive goods, climate adviser Gina McCarthy said this morning.
“It’s not off the table, certainly, in any of the discussions,” McCarthy said at the Sustainable Business Summit hosted by Bloomberg Live. “There are many ways in which you could look at a carbon border adjustment as an opportunity here.”
Economists warn the U.S. can’t credibly impose a border carbon adjustment unless it enacts a domestic carbon price of its own. But McCarthy and other Biden officials continue to downplay the prospect of a carbon price as the White House pushes for other climate policies in infrastructure legislation.
“I don’t disagree with folks that are pushing on carbon pricing as a whole, but I do think there are other strategies that may be more beneficial both in terms of putting an immediate boost into the system for the kinds of clean energy investments that we’re looking for and also ensure the president’s commitment to equity and justice,” McCarthy said.
NO ONE WINNING FROM ‘VOLATILE’ OIL MARKETS, IEA WARNS: Global oil markets are likely to “remain volatile” unless OPEC and its allies resolve a standoff over production policy, the International Energy Agency warned in its monthly report this morning.
Without a deal from OPEC+, oil markets will “tighten significantly” amid recovering demand.
U.S. oil prices hit multi-year highs last week after OPEC+ talks failed to yield a deal to increase production and abandoned talks. But the price gains did not last because of uncertainty over the potential impact of the Delta variant of the coronavirus, which could restrict travel and economic activity.
“Volatility does not help ensure orderly and secure energy transitions – nor is it in the interest of either producers or consumers,” IEA noted.
While higher prices could increase the pace of electrification of transportation and accelerate clean energy energy growth, they could also “put a drag on the economic recovery, particularly in emerging and developing countries.”
MAJOR US COMPANIES LAG ON CLIMATE LOBBYING: Most large U.S. companies are not lobbying for aggressive policies to combat climate change despite making voluntary commitments to reduce their own emissions.
Although 92% of S&P 100 companies have committed to reducing their own emissions, only 40% are actively engaging lawmakers on the issue, according to a report this morning from the sustainability investment group Ceres.
Of the 96 companies reviewed by Ceres, 21% have lobbied against “science-based” climate policy, even though the vast majority of those organizations have set their own internal emissions targets.
BIG BUSINESS WANTS NET-ZERO INFRASTRUCTURE INVESTMENTS: Dozens of companies are calling on Congress to prioritize investments in infrastructure legislation that would “accelerate” the transition to a net-zero emissions economy.
The Center for Climate and Energy Solutions organized a joint statement this morning signed by 41 companies from the oil and gas, power, tech, finance, manufacturing, chemicals, cement, mining, food, and retail sectors, including Shell, Southern Company, American Electric Power, Bank of America, Wells Fargo, DuPont, and more.
“There is an urgent imperative to act now to reduce the economic and physical risks of climate change,” the companies said. “Modern, resilient infrastructure can not only reduce these risks, but also create significant economic opportunity in cities and small towns across America.”
YELLEN STEPPING UP FINANCIAL PRESSURE FOR CLIMATE GOALS: Treasury Secretary Janet Yellen used a trip to Europe this past weekend to outline plans to press multilateral development banks and domestic regulatory agencies to counter climate change, the Washington Examiner’s Zachary Halaschak reports.
Yellen, speaking at the Venice International Conference on Climate, vowed to convene the heads of multilateral development banks to push for a stronger effort on combating climate change and to reiterate the United States’s expectation that they “align their portfolios with the Paris Agreement and net-zero goals as urgently as possible.”
“We also expect them to take steps to more effectively mobilize private capital so that developing countries can increasingly benefit from private-sector pledges to support climate-aligned and sustainable investments,” Yellen added.
MOUNTAIN VALLEY PIPELINE’S CARBON OFFSET PLAN: Developers of the Mountain Valley pipeline announced a plan yesterday to acquire $150 million in carbon offsets for its direct greenhouse gas emissions from operating the project.
The offsets will be generated through a methane abatement program at a metallurgical coal mine in Southwest Virginia. Mountain Valley’s offsets won’t cover emissions from the burning of natural gas once it leaves the pipeline and is delivered to customers, known as Scope 3.
Appeal to Biden? The pledge is similar to a tack taken by TC Energy, developer of the since-canceled Keystone XL, which made last-minute promises to build renewables in hopes of winning over Biden administration support.
It comes after the Environmental Protection Agency recently warned the Army Corps of Engineers that Mountain Valley has failed to demonstrate it will adequately protect against impacts from the pipeline crossing streams and wetlands,
Several of the permits for the $6.2 billion Mountain Valley pipeline, a 303-mile project that would carry natural gas from West Virginia to Virginia, are still pending.
ODDS THAT TC ENERGY RECOVERS KEYSTONE XL DAMAGES…TC Energy faces long odds and a multiyear fight to recover economic damages from Biden’s cancellation of the Keystone XL oil pipeline, Abby reported yesterday in her last story for us.
The Canadian energy company said on July 2 it had filed a notice of intent with the State Department to bring a legacy claim under the North American Free Trade Agreement. TC Energy said it would seek to recover more than $15 billion “in damages it has suffered as a result of the U.S. Government’s breach of its NAFTA obligations.”
“There is a chance there would be a ruling in favor of TC Energy, and I think that would be a reasonable indictment of the inconsistencies of U.S. pipeline policy,” said James Coleman, a law professor at Southern Methodist University.
TC Energy’s notice of intent is just the first step in a lengthy, often expensive process to resolve claims under the trade agreement. No company or investor has ever won a NAFTA claim against the U.S. before.
“These take a long time to reach the final conclusion. I’m expecting that this will likely last for several years,” said Lawrence Herman, a Toronto-based attorney with Herman & Associates.
The Rundown
New York Times EPA approved toxic chemicals for fracking a decade ago, new files show
Bloomberg Corporate climate efforts lack impact, say former sustainability executives
Wall Street Journal Record natural gas prices give power markets a jolt
Calendar
WEDNESDAY | JULY 14
9:45 a.m. 406 Dirksen. The Senate Environment and Public Works Committee will hold a business meeting to consider the nominations of Alejandra Castillo to be assistant secretary for economic development at the Commerce Department, Jane Nishida to be EPA’s assistant administrator for international and tribal affairs, and Jeffrey Prieto to be EPA’s general counsel. Immediately following, the committee will hold a hearing on the nomination of Michael Connor to be assistant secretary of the Army for civil works.
10 a.m. 366 Dirksen. The Senate Energy and Natural Resources Committee will hold a business meeting to consider draft energy legislation authored by Chairman Joe Manchin.
11:30 a.m. 2123 Rayburn. The House Energy and Commerce Committee’s environment and climate change subcommittee will hold an oversight hearing on the Nuclear Regulatory Commission.
THURSDAY | JULY 15
2:30 p.m. The House Select Committee on the Climate Crisis will hold a remote hearing titled “Advancing Environmental Justice Through Climate Action.”
