Daily on Energy: Advisers at odds with Biden officials over nuclear and carbon capture

In a draft report last week, the White House Environmental Justice Advisory Council recommended the federal government avoid investing in carbon capture and storage, direct air capture, the procurement of nuclear power, “research and development,” “the establishment or advancement of carbon markets, including cap and trade,” industrial scale bioenergy, and other technologies because they are categorized as “will not benefit a community.”

Investments that “may benefit a community,” according to the council of independent advisers appointed by the White House, include renewable energy and energy efficiency, clean energy jobs training, lead pipe replacement, community microgrids, and public transportation.

The categorization of such projects comes as part of the council’s work to help the Biden administration define its “Justice40” initiative, under which at least 40% of the benefits of clean energy and climate investments would go to poorer and minority regions who have suffered most from pollution.

President Joe Biden has emphasized the environmental justice initiative as a key pillar of his climate agenda, but thus far, the White House hasn’t detailed how exactly it will implement it.

“100% of investments must do no harm to Environmental Justice communities,” the White House Environmental Justice Advisory Council wrote in its draft report. “We want 100% Justice; it would be unreasonable to have any climate investment working against historically harmed communities.”

The Biden administration sees some of those technologies as crucial: Biden’s infrastructure plan includes substantial support for carbon capture and removal technologies, including the construction of pipelines to carry captured carbon dioxide to where it can be stored.

Top Biden administration officials have signaled significant support for existing nuclear plants, weighing subsidies to keep the zero-carbon facilities from shutting down, as well as new advanced nuclear technologies. The Biden administration is also bullish on hydrogen, which the environmental justice advisers don’t mention by name in their report but could fall under “research and development” and would likely require the maintenance or buildout of pipelines.

John Kerry, Biden’s climate envoy, said over the weekend that half of the reductions the U.S. and the world must make to reach net-zero emissions by midcentury “are going to come from technologies we don’t yet have.” It’s a statistic he pulled directly from the International Energy Agency’s new net-zero report, which outlines a need for massive government investments to develop direct air capture, long-duration battery storage, and hydrogen. (More on that report below).

This rift is playing out elsewhere, too: Whether to rely solely on renewable energy (and exclude technologies like carbon capture and nuclear) has also divided environmental groups.

Just last week, left-wing groups including Friends of the Earth, Center for Biological Diversity, and 350.org, called on lawmakers to pursue a 100% renewable electricity standard by 2030, instead of the clean electricity standard Biden and top House Democrats are pushing. The White House environmental justice advisers call for a similar target for utilities to stop using fossil fuels by 2030.

It’s unlikely Biden will be able to appease every constituency with his climate plans, especially if he wants to get something signed into law. But his administration may have some work to do to convince left-wing and grassroots activists that Biden’s plans to invest heavily in clean energy innovation don’t conflict with his promises on environmental justice.

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.

NO NEW FOSSIL FUEL PROJECTS, IEA SAYS: The new report providing a roadmap for the world to reach net-zero emissions by 2050 underscores the huge challenges facing the Biden administration.

Here are some actions the world must take, the IEA said:

• The world’s least efficient coal plants would need to be phased out by 2030, and any remaining plants in use by 2040 would have to be equipped with carbon capture technology.
• No new oil and natural gas fields can be approved for development.
• Automakers could not sell new gasoline-powered vehicles by 2035, while electric vehicles would have to increase from around 5% of global car sales to more than 60% by 2030.
• Across the economy, fossil fuels supply almost four-fifths of total energy supply today, but that would have to fall to just over one-fifth by 2050.
• Coal demand must decline by 90%, oil consumption by 75%, and gas demand has to decrease 55% by mid-century. 

Mulling over IEA’s fossil fuel advice: The forecasting group’s positioning on future oil and gas development is a big break from its history, and could boost political momentum for governments looking to restrict new production.

IEA doesn’t define what it means by no “new oil and natural gas fields,” but many large oil companies and producing nations in OPEC have argued that investment in new fossil fuel projects had to continue to meet the demand from developing countries in Asia and Africa.

It projected that if investment were to continue in currently producing fields but no new fields were developed, then the average annual loss of supply would be around 4.5%.

IEA acknowledged that “continued investment in existing sources of oil production are needed.”

What does this mean for the US? We also wouldn’t expect a huge effect in the U.S. The only new fields that are being considered would be the Arctic National Wildlife Refuge and offshore in the eastern Gulf of Mexico, but both of those have bleak prospects for development given political opposition. Production in the Permian basin, the most important U.S. oil field, would continue.

Nonetheless, IEA said that if global oil and gas supply shrinks in line with its road map, OPEC by 2050 would control more than half of the world’s oil supply, compared to more than a third today, as the lowest cost producers gain market share.

HOW BIDEN INFRASTRUCTURE PLAN TACKLES CYBERSECURITY: The Biden administration is touting how its $2.3 trillion infrastructure and clean energy proposal would boost the nation’s cybersecurity defenses.

The White House this morning added more detail to its pledge made after the attack on the Colonial Pipeline to require recipients of grants authorized by infrastructure legislation to implement cybersecurity protections.

Biden’s American Jobs Plan, which previously did not mention cybersecurity, now proposes to provide $20 billion in block grants for state, local, and tribal governments to modernize their energy systems contingent on meeting certain standards, such as installation of technology that detects and blocks malicious cyber activity on information and operational technology networks.

It will also encourage recipients of tax credits to build transmission lines to implement cybersecurity investments. More transmission lines can boost grid resiliency by enabling regions during emergencies to pull in power from unaffected areas.

Biden’s plan, the White House notes, devotes $2 billion to support micro-grids and distributed energy infrastructure in places at high risk of power outages. These technologies could generate power on-site disconnected from the larger grid, and provide backup electricity.

Recipients of this funding would have to meet “modern sensor and reporting requirements” and install cybersecurity capabilities that detect and block “malicious activity.”

COUNTER GOP INFRASTRUCTURE PROPOSAL COMING: Senate Republicans are expected to soon present a new infrastructure proposal to the Biden administration as the two sides try to reach a compromise agreement.

Shelley Moore Capito of West Virginia, the top Republican negotiator, and other GOP senators including Energy Committee ranking member John Barrasso of Wyoming are meeting today with Transportation Secretary Pete Buttigieg, Commerce Secretary Gina Raimondo, and White House legislative affairs staff, according to Politico Playbook.

Ahead of the new GOP plan, climate activists are putting more pressure on Biden to bypass Republicans and move to reconciliation to pass his big spending clean energy plans.

“Let’s be clear, the first proposal from Senate Republicans was a road to nowhere and we expect this proposal will be more of the same,” said Pete Maysmith, senior vice president of campaigns at the League of Conservation Voters.

ALSO HAPPENING TODAY…BIDEN’S VISIT TO FORD: The Biden administration is touting the EV elements of its infrastructure proposal ahead of Biden’s visit this afternoon to a Detroit factory manufacturing the electric Ford-150.

In a fact sheet this morning, the White House boasted its $174 billion earmarked for vehicle electrification would lower the cost of EVs through subsidies and rebates, incentivize U.S. manufacturing of key parts like batteries, build 500,000 charging stations to reduce range anxiety, and scale up R&D for advanced longer-duration batteries.

We’ll be watching to see whether Biden in his remarks today tries to convince people to buy electric pickup trucks, a key market segment which we wrote yesterday would accelerate stagnant sales of EVs.

WHITE HOUSE TO TARGET EMISSIONS FROM FEDERAL BUILDINGS: The Biden administration will establish performance standards for federal buildings aimed at shrinking their carbon footprint, the White House announced yesterday.

The Biden administration isn’t saying yet what changes it will require from federal buildings to reduce their carbon emissions, and it doesn’t say how heavily it would rely on electrification. Instead, the Council on Environmental Quality is convening an interagency effort, along with GSA, the Energy Department, and the EPA, to develop the standards.

A White House fact sheet says the standards “will identify progressive performance milestones as well as the resources that agencies need to meet them.”

In addition to the pending federal building performance standards, the EPA is also setting new energy conservation standards under the ENERGY STAR program to support heat pump technology and fast chargers for electric cars.

AN UPDATE ON THE GAS PUMPS: Gas stations along the East Coast are seeing supplies come back, with yesterday seeing the largest daily drop in stations without fuel since the Colonial Pipeline hack, according to data from GasBuddy.

GasBuddy analyst Patrick De Haan said he expects the number of stations without gasoline to drop under 10,000 today, a 38% improvement from the highest number of outages last Thursday. Gasoline demand is also falling, with demand 23.9% lower than last Monday, GasBuddy data shows.

Nonetheless, some regions in the East Coast are still seeing significant outages. Roughly half of the stations in North Carolina, 44% in South Carolina, 39% in Georgia, and 27% in Virginia are without fuel. In D.C., the number of outages has increased to 73%, as of last night.

In addition, even though fuel outages may be greatly improved by Memorial Day weekend, higher gas prices will likely still affect travel plans. GasBuddy expects the national average gas prices to be $2.98 per gallon on Memorial Day, the highest that time of year since 2014.

The Rundown

Los Angeles Times California’s next climate challenge: Replacing its last nuclear power plant

New York Times Warning shot for California: A Los Angeles wildfire in May

Reuters Shell shareholders increase pressure for further climate action

S&P Global DAPL cites Colonial Pipeline outage as reason to remain open

Calendar

WEDNESDAY | MAY 19

10 a.m. G-50 Dirsken. The Senate Environment and Public Works Committee will hold a hearing titled, “Examining Biodiversity Loss: Drivers, Impacts, and Potential Solutions.”

10:30 a.m. Energy Secretary Jennifer Granholm will testify remotely before the House Energy and Commerce Committee’s Subcommittee on Energy on the agency’s fiscal year 2022 budget request.

2 p.m. Green 2.0 will host a virtual discussion with Asian-American and Pacific Islander leaders on the future of the environmental movement.

THURSDAY | MAY 20

9:30 a.m. The House Select Committee on the Climate Crisis will hold a remote hearing titled, “Powering Up Clean Energy: Investments to Modernize and Expand the Electric Grid”.

9:30 a.m. The Senate Committee on Agriculture, Nutrition, and Forestry will hold a hearing titled, “Federal, State, and Private Forestlands: Opportunities for Addressing Climate Change.”