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WHAT ABOUT ‘MINED IN AMERICA’? The Biden administration would be “short-sighted” if it backs off support for domestic production of critical minerals, says Rich Nolan, CEO of the National Mining Association.
“This whole ‘made in America’ drive needs to begin with ‘mined in America’,” Nolan told Josh in an interview this morning.
Nolan was reacting to a report by Reuters yesterday that the administration is looking to lean on allied countries such as Canada and Australia to import critical minerals needed to support clean energy growth, rather than risk a fight with environmentalists and some Democrats who oppose domestic mining.
The administration is more focused on processing minerals domestically into electric vehicle battery parts, instead of prioritizing domestic production.
It will finalize its plans as part of a strategy being developed on securing the supply chain for critical minerals, which is currently dominated by China.
Ali Zaidi, White House deputy national climate advisor, insisted that the administration’s supply chain review “includes responsibly pursuing, developing, and mining critical minerals and materials used for EV batteries,” in a statement to Reuters.
Nolan argued the world’s growing appetite for critical minerals to help power electric vehicles, battery storage, solar panels, and wind turbines, means the U.S. can’t afford to take domestic production off the table.
“It’s not a question of whether you import it or find it here,” Nolan said. “It’s more of an ‘and’. Markets have made the determination these materials need to be produced globally for future demand.”
If Biden moves off support of mining projects, it would be an about-face from his campaign promises and statements from administration officials since.
“By producing rare earth elements and critical minerals here at home, we’ll create good-paying jobs and secure the supply chain we need to reach net-zero carbon emissions by 2050,” Energy Secretary Jennifer Granholm said in a Twitter post last month.
It would also risk upsetting key Democrats such as Sen. Joe Manchin of West Virginia, chairman of the Energy Committee, who supports mining of critical minerals to offset losses from fossil fuel development.
China’s stronghold on the critical minerals market in particular has caused concern among U.S. policymakers of both parties. Many Republican lawmakers, and some Democrats, are pushing policies to expand domestic mining of critical minerals, including proposals to speed up permitting and offer tax incentives.
“President Biden is once again bowing to pressure from environmental activists and abandoning American workers,” Sen. John Barrasso of Wyoming, top Republican of the Energy Committee, told Josh. “Producing critical minerals here in the U.S. will create thousands of American jobs and help make our nation more economically secure.”
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EXXON SHAREHOLDER MEETING IS TENSE: ExxonMobil briefly paused its annual shareholder meeting this morning to allow more time for it to count votes over a closely watched proxy fight that could carry significant implications for how the oil giant approaches climate change.
Shareholders are voting whether to replace some of Exxon’s current slate of 12 directors with four candidates nominated by activist hedge fund Engine No.1, who would seek to push the oil giant to invest in clean energy and move off fossil fuels more quickly.
Exxon’s meeting just resumed, with CEO Darren Woods giving a business review presentation in which he emphasizes that oil and gas will still be needed well into the next few decades, even under scenarios where greenhouse gas emissions are reduced.
In the proxy fight, though, Engine No. 1 has won the backing of several institutional investors — reportedly including BlackRock, which has a 6.7% stake in Exxon, according to Reuters.
The activist investor group accused Exxon of halting the meeting to delay closing the polls on the vote. “Shareholders should not be fooled by ExxonMobil’s last-ditch attempt to stave off much-needed board change in response to significant shareholder pressure and the prospect of losing a proxy contest,” Engine No. 1 said in a statement.
SENATE COMMITTEE PASSES INFRASTRUCTURE BILL WITH CLIMATE PROVISIONS: The Senate Environment and Public Works Committee unanimously approved a surface transportation reauthorization bill by a 20-0 vote this morning, demonstrating that some bipartisan movement is possible on infrastructure.
“This is barely the end, but it’s a good beginning,” said Sen. Tom Carper, the Democratic chairman of the committee from Delaware who brokered the legislation with top committee Republican Sen. Shelley Moore Capito of West Virginia. “This sends a strong signal to sister committees that it’s time to go to work.”
Their $303.5 billion bill, covering five years, includes 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. It’s similar to legislation passed by the committee 18 months ago, which never made it to the Senate floor.
Even so, these provisions are far more narrow than what Biden is seeking in his infrastructure plan.
SCHUMER MAKES HIS MOVE: Senate Majority Leader Chuck Schumer said yesterday he’ll bring up an infrastructure package for a vote in July, putting a firm deadline on slow-moving negotiations for a bipartisan bill to fix the nation’s roads, bridges, and waterways.
Schumer’s announcement came hours after Republicans said they plan to counter the Biden administration’s $1.7 trillion infrastructure proposal offered to the GOP last week.
Schumer suggested he’ll move a bill without the GOP if necessary, the Washington Examiner’s Susan Ferrechio reports.
“That is our plan, to move forward in July,” the New York Democrat said after a closed-door meeting with party lawmakers.
Republicans are not giving up and are instead preparing “a very good offer” that they say comes close to what Biden told them he would accept.
Sen. Roger Wicker, a Mississippi Republican and a chief GOP infrastructure negotiator, said the approximately $1 trillion offer would not require a tax increase and would be partly financed with re-directed, unspent federal money meant for COVID-19 relief.
SHELL MUST CUT EMISSIONS, DUTCH COURT RULES: Oil giant Royal Dutch Shell must sharply cut its greenhouse gas emissions, in line with the Paris climate agreement, a Dutch court ruled this morning in a potentially precedent-setting win for environmentalists.
The Hague District Court ruled Shell’s current emissions reduction plan isn’t sufficient to address its contribution to climate change. Under the ruling, Shell must reduce its emissions by 45% below 2019 levels by the end of 2030. That requirement covers the full scope of Shell’s emissions, including from its suppliers and customers.
STEEL INDUSTRY COULD BENEFIT FROM CARBON BORDER TAX: Domestic steel producers are much more carbon-efficient than China and other competitors, the GOP-backed Climate Leadership Council said in a report issued this morning.
That means the U.S steel industry would be a big winner if policymakers imposed a carbon tax and a similar duty on carbon-intensive imports, known as a border carbon adjustment.
The report, written by CRU Consulting for the Climate Leadership Council, found that applying a domestic carbon price and an equivalent tax on producers who sell in the U.S. market would deliver a competitive advantage to domestic steelmakers, who would see their sales and profitability rise as they displace imports.
What would happen: If subject to a U.S. carbon import tax, most overseas steelmakers looking to export their goods would pay a higher price compared to domestic manufacturers with a smaller pollution footprint facing a carbon price.
Imposing a border carbon adjustment could also force competitors to lower their emissions if they want a piece of the U.S. market, the Council said.
There’s a problem: Biden and Democrats in Congress are not prioritizing a carbon tax as part of its infrastructure and climate legislative push, as the policy has fallen out of favor among liberals and has drawn only minimal Republican support.
Meanwhile, the administration is considering taxes on imports of carbon-intensive goods, fulfilling a Biden campaign promise to punish China and other countries that are “failing to meet their climate and environmental obligations.”
But economists warn a border carbon adjustment would be unworkable unless the U.S. also imposed a carbon tax or a similar pricing scheme on its own domestic goods.
OFFSHORE WIND COMING TO CALIFORNIA: The Biden administration is advancing the first areas off of the California coast for offshore wind development in a move that could ultimately help both the White House and the state government meet aggressive targets for carbon-free power.
The Interior Department, along with the Defense Department and the California government, announced yesterday it has identified a nearly 400 square mile area off of the state’s central coast, near Morro Bay, that could support 3 gigawatts of offshore wind power.
The Interior Department is also exploring a region off the coast of Northern California, known as the Humboldt Call Area, for a potential offshore wind project that could support up to another 1.6 gigawatts of power.
The announcement is the first move by the federal government and California to advance offshore wind in the Pacific, a notoriously more difficult feat than building wind turbines along the East Coast.
More in Abby’s story from yesterday.
CAR SALES COULD BE ALL ELECTRIC BY 2040 AT CURRENT PACE: If sales of electric vehicles continue increasing on their current trajectory, all new car sales could be electric by 2040, according to a new report out this morning from the UCL Institute for Sustainable Resources and commissioned by the We Mean Business coalition.
The report shows that global electric vehicle sales have increased 41% each year since 2015, and it cites research from the Energy Transition Commission that found consumers will prefer electric models over gas-powered cars starting in 2024.
Even so, the report says all-electric sales by 2040 is five years later than the 2035 target governments need to achieve to reach the Paris climate agreement’s goals. Thus, the report recommends governments increase investments in electric vehicle charging infrastructure, ramp up public procurement of electric cars, and encourage leasing programs and second-hand markets to cut the costs of buying an electric vehicle.
GASOLINE DEMAND CONTINUES TO STRENGTHEN: U.S. oil demand rose again last week as drivers continued to rush to the pumps after the cyberattack shutdown of the Colonial Pipeline, increasing to nearly 20 million barrels per day from 19.3 million barrels p/d the previous week.
Gasoline demand reached 9.5 million barrels p/d compared to 9.2 million barrels p/d the week prior, the highest level since the pandemic started, the Energy Information Administration reported this morning. Jet fuel and diesel consumption also increased.
EPA SEEKS SMALL BUSINESS INPUT FOR METHANE RULES: The EPA announced yesterday it is seeking nominations for a potential Small Business Advocacy Review panel to consider how requirements for oil and gas operators to curb their methane emissions would affect small companies.
The EPA faces a September deadline to propose stricter regulations governing oil and gas methane emissions, and the agency recently initiated a process to gather stakeholder input on the rule’s development.
Smaller oil and gas producers have often complained that the EPA’s methane requirements are particularly difficult for them to meet, given the low production of many of their wells and the capital required to monitor and repair leaks. The EPA said it is seeking self-nominations for the panel until June 4 from small businesses that may be subject to the emissions requirements, as well as members of trade groups that serve small producers.
BIPARTISAN EFFORT TO BOOST CARBON CAPTURE CREDITS: A group of bipartisan lawmakers, led by Democratic Rep. Tim Ryan of Ohio, introduced legislation yesterday to significantly raise the value of tax credits for carbon capture projects.
The legislation is the latest of several bipartisan bills that would seek to bolster carbon capture technology by expanding and enhancing federal tax incentives. Biden has also supported boosting the incentives for carbon capture as part of his infrastructure plan.
The new bill would increase the tax credit for carbon capture equipment attached to industrial facilities or power plants that store their carbon underground to $85 per ton. Projects that store their CO2 in oil and gas fields or use the captured carbon in products would receive an increased credit of $60 per ton.
The Rhodium Group recently found increased credit values, along with a 10-year extension of the credits and the ability for companies to claim them as direct cash payments, would prompt up to 252 million tons of carbon capture capacity in the U.S. industrial sector by 2035.
The bipartisan legislation would also eliminate thresholds for annual carbon dioxide capture that companies are required to meet to qualify for the credit, allowing for more and smaller carbon capture projects to benefit from the incentive.
CARPER UNVEILS BILL TO BOOST HYDROGEN: Carper’s legislation, introduced yesterday, would create a production tax credit and investment tax credit to encourage lower-emitting production of hydrogen, a versatile fuel that the Biden administration and industry say will be critical to curbing emissions in hard-to-abate sectors such as industrial manufacturing and heavy-duty transportation.
The bill would offer incentives to hydrogen production methods at least 50% cleaner than current production methods, with lower-emitting technologies achieving greater credits.
Biden, in his infrastructure bill, floated a potential production tax credit to support low-carbon hydrogen production, though the administration didn’t offer details.
WASHINGTON STATE TO CONSIDER NUSCALE REACTORS: NuScale has reached an agreement with a utility in Washington state to consider deploying the company’s small nuclear reactors.
NuScale, the first company to obtain a design approval for a small nuclear reactor in the U.S., announced this morning it agreed to a memo of understanding with Grant County Public Utility District to explore the development of one of the company’s small reactor nuclear plants.
NuScale hopes to begin deploying its small reactors late this decade.
The Rundown
Axios States warn banks — Drop coal, and we drop you
Washington Post DHS to issue first cybersecurity regulations for pipelines after Colonial hack
E&E News Defenders of Wildlife staffers decry ‘culture of fear’
Reuters U.S. senator prepares tax credit legislation for existing nuclear plants
Wall Street Journal Investors boost bets on timber-carbon market
Calendar
WEDNESDAY | MAY 26
1 p.m. The United States Energy Association will hold a program briefing with the Clean Hydrogen Future Coalition.
THURSDAY | MAY 27
10 a.m. 419 Dirksen. The Senate Energy and Natural Resources Committee will hold a business meeting to consider the nominations of Robert Anderson to be solicitor of the Interior Department, Shannon Estenoz to be assistant secretary for Fish and Wildlife and Parks and Tanya Trujillo, to be an assistant secretary of the Interior for water and science.
