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GAS TAX POLITICS: President Joe Biden and states blue and red are currently all over the map where gas tax politics are concerned.
Press Secretary Karine Jean-Pierre wasn’t prepared to endorse a gas tax holiday from the podium as recently as last Monday, but Biden told reporters this morning that he’s considering it and hopes to have a decision on the matter by the end of the week.
Treasury Secretary Janet Yellen also said yesterday that Biden is ready to work with Congress on a solution to high prices and called suspension of the federal gas tax “an idea that’s certainly worth considering.”
Biden has already tried out others of the “tools” immediately available to him to bring down fuel prices — opening the Strategic Petroleum Reserve, enabling more E15 to be sold, and jawboning oil companies whom he’s accused of gouging drivers to invest more in production — while also maintaining his support for ending new drilling on federal lands and overseeing a phaseout of fossil fuels.
Support for a federal gas tax holiday is a holdout. Backing it would catch him up with some of his fellow Democrats in the Senate and with some state-level Democrats, who have overseen suspensions of state fuel taxes.
What’s happened in Congress: Sens. Mark Kelly and Maggie Hassan introduced a bill in early February, before the war in Ukraine began and when the average price of gasoline was about $1.50 lower per gallon than it is now, that would suspend the 18.4-cent federal gasoline tax through the end of the year.
The bill has no Republican cosponsors and has yet to move through committee, with Democratic leadership preferring instead to target oil companies by advancing anti-price gouging legislation.
Meanwhile, opponents of the tax holiday proposal have come from both sides of the aisle, where objections have largely been about the consequences of reducing revenues for the federal transportation fund.
Those same debates have been playing out in various states, too.
What states are doing: States are diverging widely on the gas tax holiday schemes, and in some cases, are increasing motor fuel taxes where others are suspending them.
Maryland jumped at the chance to suspend the state’s fuel tax shortly after the war in Ukraine began, and the tax holiday ran through April 17 before being reinstated. But faced with a scheduled seven-cent fuel tax increase, and associated pressure from Hogan to prevent it from happening, Senate President Bill Ferguson and House Speaker Adrienne Jones have insisted that the state needs the money for transportation and other projects (Both Democrats supported the gas tax holiday).
In Virginia, the Democrat-led state Senate just voted down a proposal endorsed by Republican Gov. Glenn Youngkin to suspend the state’s 26-cent gasoline tax. Democratic Sen. Joseph Morrissey noted complaints he gets about potholes in his district and said the state needs the tax revenue.
California, which has the highest gas prices in the nation, will also oversee an increase to its fuel tax next month by almost 3 cents per gallon against the wishes of its Republican minority, while Gov. Gavin Newsom wants to send car owners $400 rebates to help them shoulder the costs of record prices.
Other states have taken a different tack. Republican-led Georgia extended its gas tax holiday through July 14, while New York drivers won’t be paying the state’s excise tax on either gasoline or diesel fuel through the end of the year.
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GERMANY TURNS TO COAL AFTER RUSSIAN GAS SUPPLY REDUCTIONS: In case you missed it, German Vice Chancellor Robert Habeck said the country would need to return to coal-fired power plants “for a transitional period” while putting more gas into storage to get the country through the winter following supply reductions from Russia.
“Security of supply is currently guaranteed, but the situation is serious,” Habeck said in a statement. “That means, to be honest, more coal-fired power plants for a transitional period. That’s bitter, but it’s almost necessary in this situation to reduce gas consumption.”
Habeck has accused Russia of intentionally throttling supply (Russia blamed “technical issues” with an entry point on the Nord Stream 1 pipeline).
The resort to coal-fired energy is a setback to Germany’s plans to phase out coal use.
PG&E EXPANDS BLACKOUT-TRIGGERING BREAKERS: The California utility has enhanced the sensitivity of over 1,000 circuit breakers so they switch off power when contacted by a tree branch, animal, or other object in order to preempt the ignition of fires, the Sacramento Bee reported.
PG&E introduced its Enhanced Powerline Safety Settings Program last summer after its equipment was implicated for sparking the Dixie Fire, which burned nearly 1 million acres to become the second-largest wildfire in the state’s history. The number of affected circuit breakers is more than five times greater than what the program used last year.
PG&E is one among several of the nation’s utilities and grid operators to warn customers of higher risks for blackouts this summer due to forecasts of high temperatures and wildfire risks, coupled with shortages of baseload electricity-generating capacity.
BIDEN BOEM FINISHES FIRST DRAFT EIS FOR OFFSHORE WIND: The Bureau of Ocean Energy Management completed its first draft environmental impact statement for an offshore wind project since Biden took office and is soliciting comment on its review of the project, which could power more than 500,000 homes by wind generated off the New Jersey coast.
Ocean Wind proposes to build up to 98 wind turbine generators and up to three offshore substations within the lease area, which is located southeast of Atlantic City, for an estimated capacity of between 1,215 and 1,440 megawatts.
The draft EIS will be published on Friday and the comment period will be open through August 8.
CONSERVATIVE CLEAN ENERGY GROUP ADDS GRAVES ALUM: ClearPath has hired Amanda Sollazzo to be government affairs associate for the energy policy group.
Sollazzo most recently worked as an executive assistant to Republican Rep. Sam Graves and the House Transportation and Infrastructure Committee.
The Rundown
Bloomberg World looks to refiners in Saudi Arabia and Kuwait for diesel
Wall Street Journal Mining firms’ cautious spending threatens shift to green energy
Financial Times Corporate America seeks to halt SEC climate rule
Calendar
TUESDAY | JUNE 21
2:00 p.m. The Wilson Center will hold an event titled “Seabed Mining, International Law, and the United States.”
