Daily on Energy: Interior nominee commits to reforms of oil and gas leasing program

The comments from Beaudreau, who would oversee the day-to-day operation of the agency, underscore that the future of the oil and gas leasing program will not look the same going forward even if the pause is not permanent.

Beaudreau, remember, was Biden’s second choice for the role after centrist senators Joe Manchin of West Virginia, the Democrat chairman of the Energy Committee, and Lisa Murkowski, the Alaska Republican, helped tank the first pick for the Interior deputy position, Liz Klein, for being too liberal.

Beaudreau was considered a more moderate alternative.

“There is no doubt in my mind the leasing program needs modernization and needs reform to address the climate crisis and achieve full value for taxpayers,” Beaudreau told the Senate Energy Committee. Beaudreau stayed true to Interior Secretary Deb Haaland’s message that U.S. companies continue to receive permits to drill oil and gas on federal lands during the leasing pause, and he would not speculate on an end date for the review.

Republicans see an ally: Republican senators who oppose the lease pause tried to appeal to Beaudreau’s personal life and experiences. Beaudreau grew up in Alaska, the son of a father who worked in the Prudhoe Bay oil field on the North Slope. Working at high-level Interior roles in the Obama administration, Beaudreau implemented reforms to the offshore and gas drilling program after the Deepwater Horizon spill in the Gulf of Mexico, and later oversaw onshore leasing.

“The Biden administration has given every indication that it wants to throw oil and gas workers, who have jobs like your father’s, out of work. I hope that if you are confirmed, you can serve as a voice of reason in an administration that is waging an economic war on energy workers in my state and across the country,” said John Barrasso of Wyoming, top Republican of the committee.

Subtle reaching out: In response to questioning from Barrasso and Manchin, Beaudreau related that it’s “extremely important America maintains its energy security” and pledged that the oil and gas industry would be “at the table” as Interior considers leasing reforms. He also pleased Republicans by saying boosting development of critical minerals in the U.S. is “essential” to achieving clean energy goals and that mining can be done “responsibly.”

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RELATED…HOUSE DEMOCRATS LEASING REFORMS GET COMMITTEE APPROVAL: The House Natural Resources Committee passed a number of Democratic bills yesterday that could help deliver on Biden’s effort to reform the federal oil and gas leasing program by raising costs on producers and imposing stricter regulatory requirements.

The bills, sponsored by Reps. Alan Lowenthal, Katie Porter, Mike Levin, and Diana DeGette (all Democrats from Western states), would increase royalty rates, rental fees, and minimum bid amounts, force Interior to issue new rules to ban flaring or venting of natural gas at drill sites on public lands, and strengthen bonding requirements on operators, meaning that when a company goes bankrupt, there is more assurance they could foot the bill to reclaim their wells.

THE TRICKINESS OF WEIGHING NATURAL GAS IN DESIGNING A CES: A coalition of moderate environmental groups worked with the Bipartisan Policy Center to release a framework for policymakers today on how to design a clean electricity standard, the hottest climate policy in town.

To get consensus among disparate views, the groups focused on a standard requiring utilities to reach net-zero emissions by 2050, rather than focusing on the 2035 target for carbon-free power being pushed by the Biden administration and more liberal environmental groups.

Sasha Mackler, director of the energy project at Bipartisan Policy Center, convened the working group in 2019, enlisting the Atlantic Council, Third Way, Audubon Society, C2ES, Clean Air Task Force, and more.

In an interview with Josh, Mackler said their analysis differs from others’ in that it called out the challenge of how and whether natural gas, which is most responsible for electricity sector carbon reductions over the past decade, should be credited as part of a CES.

It’s a question that is dividing Democratic policymakers, as Abby detailed in a story earlier this month.

“That really is one of the central decisions important to think about that still seems a little unresolved,” Mackler said.

The groups were divided over the question, so they split the difference, offering two recommendations. One would provide partial credits to natural gas that phases out over time. The second alternative would be to block gas from being credited at all.

One perspective on the gas question: Mackler said BPC’s own view is that gas should be credited in a CES for its ability to continue replacing coal this decade, but he acknowledged the tighter deadline (of 2035) for carbon-free power sought by Biden would make it harder for gas to contribute.

Mackler said the longer-term role of gas and the level of credit it should receive farther out is more uncertain and contingent on technology developments, such as carbon capture for gas plants and progress in zero-carbon fuels generated from gas feedstocks, such as hydrogen or ammonia.

“That could provide a pathway for gas to play a strong role in the energy sector even with a very high CES target,” he said.

BIG OIL FEELING MOMENTUM: Shell and Total posted strong first quarter earnings reports today, following BP earlier this week, in a bullish sign for the recovery from the pandemic-driven price and demand crash.

Shell reported $3.2 billion in profits and raised its dividend (after slashing it last year for the first time since World War II), while Total (which maintained its payout to shareholders through the crisis) said its earnings returned to pre-pandemic levels. But Shell warned of “significant uncertainty” about whether demand can keep on track in the second quarter, as the virus surges in some big oil consuming countries such as India.

We’ll see if U.S. oil and gas majors Chevron and ExxonMobil keep up the momentum with their reporting tomorrow.

ABOUT LAST NIGHT: Biden, during his first joint address to Congress last night, reiterated that he believes the significant green spending in his infrastructure plan would create jobs and a strong U.S. clean energy manufacturing base.

“There is simply no reason why the blades for wind turbines can’t be built in Pittsburgh instead of Beijing,” Biden said. “There is no reason why American workers can’t lead the world in production of electric vehicles and batteries.”

We didn’t hear any new climate proposals in Biden’s speech (those came last week during the summit), but certainly the prioritization of climate change in his remarks was a 180-degree flip from speeches former President Donald Trump gave to Congress and even a substantial increase in focus than in many of former President Barack Obama’s speeches to Congress.

SENATE PASSES RESOLUTION TO RESTORE METHANE REGS: The Senate voted yesterday to cancel a Trump administration action that would have blocked the EPA from controlling methane emitted by the oil and gas industry.

The measure, which passed 52-42 with some Republican support via the fast-tracked Congressional Review Act, would reinstate requirements for oil and gas companies to monitor and repair equipment leaking methane.

Every Senate Democrat voted for the resolution, but only three Republicans did: Sens. Susan Collins of Maine, Lindsey Graham of South Carolina, and Rob Portman of Ohio.

Why the resolution matters: It would clear the decks for the Biden administration to fulfill a promise of setting strict controls on methane emissions from the oil and gas sector.

Combating methane emissions can create a more immediate effect than cutting carbon because methane is more than 80 times more potent than carbon over a 20-year period, although it degrades faster in the atmosphere compared to carbon, which lingers for 100 years.

“Regulating methane is the low-hanging fruit of climate action,” said independent Sen. Angus King of Maine, who caucuses with Democrats. “It’s the most significant immediate thing we can do.”

ELECTRIC CAR ADOPTION HAS ALREADY SEEN A HUGE BOOST THIS YEAR: Global first-quarter electric car sales were up by around 140% year-over-year, the International Energy Agency found in new research this morning.

Significant sales in China and in Europe largely drove the increase in global sales, though the U.S. also saw sales double compared to the first quarter of last year, the IEA says. Last year, even as the pandemic dampened overall car sales, electric car registrations rose by 41%, and Europe surpassed China as the largest electric vehicle market.

The IEA expects electric vehicles will continue to grow as a share of the overall global vehicle fleet, reaching about 7% in 2030 with existing policies. If governments put in place policies to more aggressively drive electric vehicle adoption, the IEA says electric cars could reach 12% of the global vehicle stock.

BIDEN TAPS NEW EPA NOMINEES: Biden is nominating Jeffrey Prieto, an Obama administration veteran, as the EPA’s general counsel, a critical position that will lead the Biden EPA’s defense of new greenhouse gas emissions mandates. Prieto served as general counsel for the Agriculture Department and as counsel in the Justice Department’s environment division during the Obama administration.

Biden also tapped Jane Nishida to lead the EPA’s Office of International and Tribal Affairs. Nishida, who has worked at the EPA since 2011, currently serves as principal deputy assistant administrator for International and Tribal Affairs, and she oversaw the agency briefly as its acting administrator earlier this year before EPA Administrator Michael Regan was confirmed.

MORE DOE NOMINEES TOO: Biden also nominated a slate of Department of Energy nominees: Geraldine Richmond for under secretary for science, Andrew Light for assistant secretary for international affairs, and Sam Walsh as general counsel.

Richmond is a professor of chemistry at the University of Oregon and was previously appointed to the National Science Board. Light, a former Obama administration climate adviser, has been working at DOE since January as deputy assistant secretary for international affairs. Walsh was DOE’s deputy general counsel for energy policy in the Obama administration.

SOLAR GROUP UNVEILS PROTOCOL TO TRACK SUPPLY CHAIN: The Solar Energy Industries Association unveiled this morning guidance to help companies track and report where their materials are coming from and how they are sourced, a traceability protocol meant to address concerns that the raw materials behind solar panels have been linked to forced labor practices, especially in China.

SEIA’s protocol encourages equipment manufacturers and U.S. importers to disclose such information as the origin of the materials in its products; the purpose, nature, and location of its activities; and any effects its activities may have on stakeholders. The protocol also includes an audit mechanism to measure how well a company is complying.

“Solar customers expect their products to be ethically-produced, and this protocol helps ensure that solar products coming into the United States are not made using forced labor,” said John Smirnow, SEIA’s vice president of market strategy, in a statement.

The Rundown

New York Times People of color breathe more hazardous air. The sources are everywhere.

Bloomberg Hidden super polluters revealed in wake of Texas energy crisis

Atlanta Journal-Constitution A green tech battery plant is transforming a deep-red part of Georgia

Calendar

THURSDAY | APRIL 29

11 a.m. The House Energy and Commerce Committee’s Subcommittee on Environment and Climate Change will hold a remote hearing on the EPA’s fiscal year 2022 budget request.

WEDNESDAY | MAY 5

11:30 a.m. The House Energy and Commerce Committee’s Energy Subcommittee will hold a remote hearing on electric vehicle provisions in the CLEAN Future Act.