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WHAT ABOUT OIL AND GAS? G7 countries aren’t saying whether they’ll limit investments in oil and gas projects, even as the International Energy Agency says new oil and gas development must stop immediately for the world to reach its climate targets.
Indeed, while G7 environment ministers agreed last week to end financing for new overseas coal projects by the end of this year, they didn’t address oil and gas investment at all. The G7 ministers instead acknowledged that natural gas could play a role in reducing greenhouse gas emissions in the near-term.
“We recognize that natural gas may still be needed during the clean energy transition on a time-limited basis and we will work to abate related emissions towards overwhelmingly decarbonised power systems in the 2030s,” the ministers said in a joint communique.
Their language on coal-fired power, however, was much different. The G7 leaders called coal power “the single biggest cause of global temperature increase,” and said they will take “concrete steps towards an absolute end to new direct government support for unabated international thermal coal power generation” by the end of this year.
The call last week from the IEA for new oil and gas development to end was welcomed by many environmentalists because it emboldens their calls for governments to keep fossil fuels in the ground. The IEA report will also increase pressure on both governments and private financial firms such as banks and asset managers to minimize their future investments in oil and gas.
Convincing governments to comply, however, won’t be easy: Already, some governments are pushing back on the IEA’s message.
Japanese minister Hiroshi Kajiyama said the Japanese government doesn’t agree with the IEA’s statements on stopping fossil fuel investment and eliminating coal, according to the Financial Times. Even though Japan signed onto the G7 commitment to end overseas coal financing, it has not revealed any plans to phase down its domestic use of coal power.
Norwegian oil minister Tina Bru said it wouldn’t “make a difference from a global perspective” psif the country halted oil production, the outlet reported.
IEA executive director Fatih Birol, in a LinkedIn post over the weekend, addressed some of the criticism that the IEA would include “such a radical” scenario requiring such drastic changes to the world’s energy mix.
“[F]or many years, we have been focused on shaping a secure and sustainable energy future for all, which requires transitioning to clean energy,” Birol wrote. “A secure energy future demands this – a world ravaged by climate change from fossil fuel emissions won’t be secure.”
Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Josh Siegel (@SiegelScribe) and Abby Smith (@AbbySmithDC). 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.
WHITE HOUSE COUNTEROFFER WOULDN’T DROP CLEAN ENERGY FUNDING: The Biden administration offered a slightly pared down $1.7 trillion infrastructure package on Friday in an attempt to compromise with Senate Republicans, but the White House appears unwilling to budge on including significant climate and clean energy investments in an eventual bill.
The new proposal from Biden’s team would shift investments in research and development, supply chains, manufacturing, and small business to other bills, such as the Endless Frontiers and CHIPS measures, White House press secretary Jen Psaki said.
Nonetheless, Psaki said Biden remains concerned that Republicans’ $568 billion plan excludes investments in clean energy, water quality, and workforce training, as well as the “care” economy. Biden’s infrastructure plan proposes to extend renewable energy tax credits by 10 years, to provide point-of-sale rebates for electric cars, and to include a clean electricity standard requiring utilities to purchase increasing amounts of carbon-free power.
Some compromise on climate is possible: Also on Friday, top Democrats and Republicans on the Senate Environment and Public Works Committee, including Chairman Sen. Tom Carper and top committee Republican Sen. Shelley Moore Capito, unveiled a bipartisan surface transportation reauthorization bill.
Their $303.5 billion bill does include some funding for electric vehicle charging infrastructure, as well as climate-related sections that would seek to increase infrastructure’s resilience to the effects of climate change and encourage states to curb carbon emissions from on-road transportation sources.
Even so, these provisions are far more narrow than what Biden is seeking in his infrastructure plan.
SUPREME COURT REMANDS THREE CLIMATE CASES: The Supreme Court is directing federal appeals courts to reconsider arguments from major oil companies that climate liability cases brought against them should be held in federal court, the Washington Examiner’s Nicholas Rowan reports this morning.
The Supreme Court’s decision to vacate and remand the climate cases brought by Colorado cities and counties, California cities and counties, and Rhode Island isn’t surprising following last week’s ruling in oil companies’ favor in a similar case brought by Baltimore.
Oil companies face more than two dozen climate liability cases brought by cities, counties, and states across the country demanding courts force the industry to pay for the costs to adapt to climate change effects such as extreme weather and sea level rise.
However, the Supreme Court hasn’t yet considered the merits of those arguments. Instead, oil companies and the cities, counties, and states are fighting over whether the climate lawsuits should be heard in state or federal court. Oil companies want the latter, as they see the federal courts as a more favorable venue, but thus far, several appeals courts have rejected the industry’s arguments.
Those appeals courts will now have to reconsider. In recent weeks, Democrats have been calling on the Biden administration to support the city and state plaintiffs in these climate cases.
EXXONMOBIL PITCHES CARBON CAPTURE ‘HUB’ IN WASHINGTON: ExxonMobil hopes to sell the Biden administration and lawmakers in Congress on a massive proposed carbon capture venture — one the oil major will need significant policy support to get off the ground.
The proposal would make Houston a hub for carbon capture and storage. Houston’s plentiful industrial facilities — such as gas-fired power plants, refineries, and chemical manufacturing operations — would install equipment to capture its carbon emissions.
The hub would also include pipeline infrastructure to transport that carbon underground. ExxonMobil envisions the storage to occur tens of miles off the Gulf Coast, deep under the seafloor in federal waters, where the storage capacity is enormous.
However, whether and how quickly ExxonMobil’s carbon capture vision can become a reality depends on what type of policy support the oil giant can get from the federal government. Erik Oswald, vice president of strategy development and advocacy for ExxonMobil’s Low Carbon Solutions, was in D.C., last week to meet with members of the Biden administration and congressional offices about the proposal.
“If you could make a lot of progress on the policy front over the next six months to a year, you’re really only a couple years away from being able to start physically building things,” Oswald said, noting ExxonMobil is “actively” in the project design and analysis stage.
More on the policies ExxonMobil says are needed to support the project in Abby’s story posted over the weekend.
ECONOMICS DRIVES CARMAKERS TO EMBRACE ELECTRIC: Major automakers see vehicles with electric powertrains as a new moneymaker in the United States, market analysts say. It’s a strategic shift driven less by climate change and more by a desire to compete economically.
The newfound electric enthusiasm from automakers could help Biden curb emissions from transportation, the highest-emitting sector in the U.S.
Last week, Ford unveiled a fully electric F-150 pickup truck, putting an electric powertrain in the bestselling vehicle in the U.S. for 39 years straight. After years of dabbling in electric vehicles to sell to a niche market of environmentally conscious consumers, automakers now see a business case for a mass market electric car.
“The biggest change was Tesla releasing the Model 3 and showing automakers that if you build a compelling and cool electric car at a price people can afford that people will buy it,” said Chris Harto, a senior transportation and energy policy analyst for Consumer Reports.
The steep decline in battery costs is helping, too, energy experts say. Those costs are falling much faster than anticipated, allowing automakers to electrify bigger vehicles such as pickup trucks and SUVs (the most popular cars in the U.S.) without breaking the bank.
More in Abby’s story for this week’s Washington Examiner magazine.
COURT LETS DAKOTA ACCESS STAY OPEN: The Dakota Access oil pipeline can remain operating while the federal government conducts a new environmental review, a federal district court ruled Friday in a blow to environmental activists who have long fought the project.
The ruling is a victory for pipeline operator Energy Transfer, which has faced years of legal challenges attempting to force the shutdown of the project.
Environmental activists and tribal groups scored a victory last year when a federal district court judge rejected a Trump administration environmental permit for the project and ordered a shutdown of the entire pipeline. However, that ruling was later reversed by a federal appeals court, allowing the pipeline to continue flowing while it undergoes the new environmental review.
In April, the Biden administration declined to adhere to calls from environmentalists and many Democrats to shut down the Dakota Access pipeline.
NATURAL GAS POWER SEES FIRST DECLINE IN THREE YEARS: Natural gas generation dipped nearly 7% during the first four months of this year, compared to the same period last year, due to higher natural gas prices and increasing competition with cheap renewable energy, the Energy Information Administration said in a research note this morning.
The decline in natural gas generation comes even as colder winter weather drove overall electricity generation up 6.6% compared to last year.
The EIA pointed to record additions of wind and solar power in the last year putting increasing pressure on natural gas generation. Between May of last year and February of this year, the U.S. added 22.5 gigawatts of wind and solar power, and the EIA is projecting another 28.7 GW to come online by the end of this year.
By comparison, 4.8 GW of natural gas capacity was added between May of last year and February this year, and the EIA expects 3.8 GW of additions the rest of this year. The EIA also expects natural gas generation as a share of overall electricity to continue declining through 2022.
The Rundown
Washington Post The fight for the soul – and the future – of ExxonMobil
New York Times It’s crunch time and Biden’s climate gambit faces steep hurdles
Politico The red meat issue Biden won’t touch
Wall Street Journal Oil majors look to fill businesses’ growing appetite for green power
Calendar
10 a.m. 366 Dirksen. The Senate Energy and Natural Resources Committee will hold a subcommittee hearing on the state of the national park system.
MONDAY | MAY 24
1 p.m. The House Natural Resources Committee’s Subcommittee on Energy and Mineral Resources will hold a virtual hearing titled, “Expanding Clean Energy on Public Lands.”
TUESDAY | MAY 25
11:30 a.m. The House Energy and Commerce Committee’s Environment and Climate Change Subcommittee will hold a virtual hearing on the drinking water provisions of the CLEAN Future Act.
WEDNESDAY | MAY 26
10 a.m. 366 Dirksen. The Senate Energy and Natural Resources Committee will hold a subcommittee hearing on the state of the national park system.
