Daily on Energy: GOP senators dish on prospects for permitting reform

During an annual meeting for the Basin Electric Power Cooperative, the Midwestern senators urged for some type of permitting reform to pass this Congress – as it’s likely one of the few bipartisan issues that could pass in a divided Washington – and signaled their openness to working with Democrats.

“I think the best opportunity in this divided government that we’ve been talking about is the opportunity to get some permitting reforms, by giving the left a little bit of what they want, and we get a little bit of what we want,” said Cramer during the panel. “Our founders created three co-equal branches of government and bicameral legislature all on purpose.”

Cramer praised the permitting reform that was included in the debt limit deal negotiated between the White House and House Republicans, but asserted that the legislation did not go far enough to be fully comprehensive – stopping short of including judicial reform.

What they want: Cramer and Daines stressed the need for judicial reform to be paired with permitting reform, arguing that the speedy buildout of projects would be inhibited by legal challenges unless changes were implemented.

“As long as you can litigate, you’re going to have problems,” said Cramer. Daines further elaborated on the experience of his state falling into the jurisdiction of the Ninth Circuit Court, which resulted in the court issuing orders halting the Keystone XL Pipeline project. The Ninth Circuit has been criticized as being too large and wieldy, and has taken a relatively more liberal stance than other courts.

Other GOP wants: Republican ranking members of the Senate Energy and Natural Resources Committee and the Environment and Public Works Committee John Barrasso and Shelley Moore Capito introduced legislation in May that features a ban on using the “social cost of greenhouse gases” in regulation and rulemaking, if doing so increases energy costs – which would be an area where Democrats could push back.

What Democrats want: The White House released a proposal earlier this year that includes a focus on expanding the Federal Energy Regulatory Commission and the Department of Energy’s authorities that would make it easier to develop renewables and low-carbon energy. This includes the ability to place interstate transmission and establish cost allocation procedures, implement new FERC rules to speed up generation interconnection queues, establish new minimum interregional transfer requirements, and allow the DOE to use loan authorities granted by the infrastructure package for transmission projects outside of formally designated zones.

The White House has also signaled openness to changes to the National Environmental Policy Act, otherwise known as NEPA. NEPA reforms were later included in the debt limit deal in June, aiming to speed up the permitting process. But at the end of July, the Biden administration released a proposed rule that would require federal agencies executing reviews under NEPA to consider climate and equity factors, which could arguably slow down instead of quicken the process.

However, expanded authority for FERC is a nonstarter for Republicans, where more power to the agency would erode oversight authorities of state public utility commissions. Furthermore, the issue of “cost allocation” could put the burden of paying for transmission buildout on taxpayers – something Republicans have signaled they oppose.

But the bipartisan sentiment is there. In a statement to the Washington Examiner, Senate Environment and Public Works Committee Chair Tom Carper says the committee is still exploring “what bipartisan permitting reforms we can make legislatively as well.”

“We’re seeing a record number of clean energy investments across our nation thanks to the Inflation Reduction Act and Bipartisan Infrastructure Law,” Carper said. “My focus is on ensuring that clean energy projects can connect to the grid without facing unnecessary delays and without undermining our bedrock environmental protections.”

The scheduling issue: Congress is going to be laser-focused on passing spending measures to avoid a government shutdown, with an impending deadline on Sept. 30. House Speaker Kevin McCarthy and Senate Majority Leader Chuck Schumer are coalescing around a stopgap spending bill that would keep the government open through early December – but after that, lawmakers are going to be zoned in on passing a larger spending deal for fiscal year 2024. Whether or not permitting reform gets put into the legislative mix has yet to be seen – but as many Hill denizens have observed, it’s hard for Congress to chew gum and walk at the same time.

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.

HAWAIIAN ELECTRIC UTILITY UNDER SCRUTINY FOR DEADLY MAUI FIRES: Hawaii’s largest power utility is under scrutiny in relation to the deadliest U.S. wildfire in modern history, including allegations of negligence and inaction that may have helped fuel the disastrous blaze.

A new lawsuit filed this week accuses the utility, Hawaiian Electric, of failing to take proper steps to remedy its power lines after a fire in 2019, including preventing its power lines from emitting sparks.

In fact, the company spent less than $245,000 on such repairs since 2019, according to new regulatory filings reported by the Wall Street Journal—leaving its lines exposed and vulnerable to electrical disruptions like the ones that occurred on Maui and Hawaii’s Big Island last week, leaving more than 100 people dead and costing an estimated billions of dollars in damages.

In 2021, a Maui County government commission took stock of local wildfire prevention and response efforts, and warned officials that not enough was being done to address growing risks. “The investigation found that the number of incidents from a combination of wild/brush/forest fires appears to be increasing, and that this increase poses an increased threat to citizens, properties, and sacred sites,” the report said.

The commission recommended a number of steps for officials to take to better protect and prevent fires on its lands, including managing vegetation surrounding power lines, and creating so-called “fuel buffer” zones to mitigate risk of fires along the lines.

“Hawaiian Electric is not just responsible and they weren’t just negligent,” Mikal Watts, an attorney representing some of the plaintiffs, told NBC News. “They were grossly negligent by making conscious decisions to delay grid modernization projects that would have prevented this very tragedy.” Read more on the allegations here.

TWO MORE HOME INSURERS EXIT CALIFORNIA AMID WILDFIRE RISKS, STATE RULES: Two new home insurers have abruptly announced plans to exit the California insurance market, further reducing options for residents in the state to protect their properties when risks of wildfires and other extreme weather events are on the rise.

AmGUARD Insurance, a subsidiary of Berkshire Hathaway-owned GUARD Insurance Companies, said it would withdraw its homeowners insurance policy and its personal umbrella policy program in California, while Falls Lake Insurance also announced plans to end its homeowners insurance program in the state.

The insurers’ plans make them the them the latest in a growing list of California home insurers who have either scaled back or pulled out operations altogether in the Golden State amid growing exposure to wildfires and a challenging reinsurance market—following in the steps of State Farm and Allstate, two heavyweight property insurers that said in June they would stop issuing new policies in the state.

California officials say that a rise in climate change-fueled disasters is the primary problem, but others, including insurers, say that poor management and regulation are to blame — pointing to California’s 1988 insurance law as the primary driver behind their exit. (Unlike other states, California law requires insurers to take into account 20 years of historical data when setting their insurance premiums, meaning they can’t adequately price for risks from wildfires or other climate catastrophes.)

GLOBAL OFFSHORE WIND TARGETS ‘UNREALISTIC,’ REPORT FINDS: Global offshore wind goals are “unrealistic” and will likely require $27 billion in new funding for supply chains by 2026, according to a new report from the consultancy Wood Mackenzie, appearing to throw cold water on leaders’ goals of reaching 80 GW of offshore wind generation by the end of the decade.

According to the report, the supply chain is struggling to scale up to meet offshore wind goals and will be an “impediment” to decarbonization targets in the near-term.

“Nearly 80 GW of annual installations to meet all government targets is not realistic, even achieving our forecasted 30 GW in additions will prove unrealistic if there isn’t immediate investment in the supply chain,” said Chris Seiple, vice chair of power and renewables at Wood Mackenzie. By 2030, the growth targets would require investments of up to $100 billion. Read more from Reuters here.

HOUSE DEMOCRATS ASK BIDEN ADMINISTRATION TO DENY 73-MILE MVP EXTENSION: A group of 28 House Democrats asked FERC Secretary Kimberly Bose to deny a request from the developers of the Mountain Valley Pipeline to extend the project into North Carolina, arguing in a letter this week that its construction would pose serious climate and environmental risks to affected states.

The lawmakers were led by Reps. Jennifer McClellan and Robert Scott of Virginia, and Valerie Foushee and Kathy Manning of North Carolina.

The lawmakers cited a study from the North Carolina Department of Environment Quality that found that, if approved, the MVP Southgate extension would affect 301,994 square feet of regulated riparian buffers, 13,986 linear feet of streams, and 12.4 acres of wetlands, causing serious environmental risks, including risks to drinking water quality.

They also noted that the proposed Southgate extension, which would extend MVP by an additional 73 miles, was not included in the debt ceiling deal negotiated by President Joe Biden and House Speaker Kevin McCarthy earlier this year.

“If built, this pipeline would lock homes and businesses in the Southeast into the long-term use of natural gas during a critical moment in which we must transition away from fossil fuels to avoid the worst impacts of climate change,” the lawmakers added.

EEI TAPS FORMER TRUMP OFFICIAL TO LEAD GROUP: The Edison Electric Institute announced on Wednesday it would tap Donald Trump’s former energy secretary Dan Brouillette to be its president and CEO.

Brouillette, who will step into the position Oct. 1, will succeed Tom Kuhn, who announced his plans to step down late last year.

“I have long admired the determination of EEI and its member companies to deliver clean, reliable, and resilient energy in the most affordable and inclusive manner possible,” Brouillette said. “In my former role as U.S. Secretary of Energy, I witnessed firsthand EEI’s relentless dedication to these goals, and I am excited to now work with the EEI team in support of their member companies, their customers, and our country.”

In 2019, Brouillette succeeded Rick Perry as the head of the Energy Department. He currently serves as the president of Sempra Infrastructure, which develops and invests in both natural gas and renewable energy.

TOP CHINA OFFICIAL URGES MORE SECRECY IN ITS ENERGY SECTOR: A top Chinese government official is calling for tighter secrecy in the country’s energy sector, arguing in a web post this week that a crackdown is necessary to protect national security and interests against “hostile” foreign forces.

“It is necessary to increase propaganda around ensuring confidentiality, give full play to the traditions of confidentiality in nuclear, petroleum and other energy industries, organize and hold various activities, actively foster a culture of protecting secrets and extreme discretion,” China’s National Energy Administration director, Zhang Jianhua, said in a note published yesterday on the agency’s website and translated by CNBC.

Jianhua said the foreign countries “want to steal and attack,” and “are fixed on our country’s energy sector, have increased collection of all kinds of data and information, in order to distort and slander China’s energy strategic planning, transformation, development, and other work, and interfere and influence our hard-won secure and stable environment,” though he did declined to prove any specifics.

The post echoes China’s broader messaging strategy as it looks to protect its status as a manufacturing powerhouse while still recognizing its deep reliance on oil and natural gas imports.

The Rundown

Politico EU No thanks, Joe: Britain won’t copy Biden’s IRA spending splurge

Bloomberg Brazil to cap carbon emissions for large polluting companies

Reuters EV battery imports face scrutiny under US law on Chinese forced labor