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WHAT WAS LEFT OUT: Climate activists oppose passing the nearly $1 trillion bipartisan infrastructure deal endorsed by President Joe Biden unless Democrats agree to pass a bigger “climate, jobs, and justice” package through the special budget process known as reconciliation, which would enable Democrats to pass legislation without Republican votes.
You can read more later on what’s in the bipartisan deal. But here’s a quick primer on what’s missing from what Biden initially proposed, and what activists expect to see in the larger reconciliation legislation.
*Biden himself said yesterday he is seeking $300 billion for clean energy tax credits. That number seems to come from Biden’s 2022 fiscal budget request.
In it, Biden calls for expanding and extending by 10 years tax incentives for renewable energy, at a cost of more than $265 billion. The White House also proposes to spend $9.7 billion over a decade for tax incentives to existing nuclear power plants, $10.6 billion on tax credits for zero-emissions trucks, $4.1 billion for incentives for hydrogen, and $6 billion to expand and enhance tax credits for carbon capture.
*Not a surprise here given Republicans won’t ever go for it, but Biden’s centerpiece clean electricity standard proposal for 100% clean power by 2035 is nowhere to be found in the bipartisan deal. We’ll see if Democrats can find a way to design it to fit the strict budget rules of reconciliation, no sure thing.
*The bipartisan agreement plays around the edges of Biden’s massive plans for electrifying transportation, the highest emitting economic sector. It allocates $7.5 billion to EV bus fleets and $7.5 billion to charging infrastructure. But it falls way short of the $174 billion Biden’s American Jobs Plan promise to “win the EV market” from China, including by providing rebates for consumers, and incentives for manufacturers to retool factories to make batteries and EVs.
*Biden’s grand goals for electrifying homes and buildings will have to wait too. The American Jobs Plan put $213 billion to build and retrofit 2 million homes and commercial buildings. There is no money for that in the bipartisan agreement.
*Climate activist group Evergreen Action, in a memo last night, said the bipartisan agreement is “nowhere near sufficient to fulfill the president’s commitments on environmental justice,” which included directing 40% of the benefits from his administration’s climate spending to “frontline” areas exposed to fossil fuel plant pollution.
The group also called on Biden to fund his proposed Civilian Climate Corps to employ young people to restore public spaces.
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BUT BIDEN IS CLAIMING A CLIMATE BREAKTHROUGH: The president is touting the bipartisan infrastructure agreement as a significant down payment on his aggressive pledges to combat climate change.
The White House official fact sheet says the plan “makes transformational and historic investments in clean transportation, water infrastructure, and power infrastructure.”
The framework would also enable "the building of thousands of miles" of electric transmission lines, critical to expanding the use of renewable energy, by setting up a new “Grid Authority” to speed the approval process, which can take up to a decade.
It provides $7.5 billion for electric vehicle infrastructure, along with $73 billion for the power grid and $47 billion in funding for climate “resiliency” to protect coastlines from rising seas.
As part of his American Jobs Plan, Biden originally asked for $15 billion to build 500,000 electric vehicle charging stations nationwide. He only got half of that, but the White House fact sheet claims that's enough to "accomplish the President’s goal.”
The bipartisan agreement also includes one of Biden’s signature proposals, namely funds to employ oil workers to plug leaking “orphan” oil and gas wells whose owners are either unknown or insolvent, along with remediating abandoned coal mines.
And it provides funding for public transit, passenger and freight rail, and electric buses.
BIDEN IS WALKING A FINE LINE ON TWO-STEP APPROACH: Republicans are accusing Biden of hypocrisy after he vowed not to sign into law the bipartisan infrastructure deal unless a more sweeping reconciliation bill crosses his desk at the same time.
“It almost makes your head spin — an expression of bipartisanship, and then an ultimatum on behalf of your left-wing base,” said Republican Senate leader Mitch McConnell. “I have no doubt the president is under enormous pressure from some on the left to deliver a laundry list of radical climate demands.”
But liberals are uncomfortable with bipartisan agreement and fear only the $1 trillion deal will make it across the finish line, leaving the larger package to die in the Senate.
To pass both measures together, at least 10 Senate Republicans must agree to pass the narrow infrastructure bill, and every Democrat will have to vote for the more expensive component.
HOUSE SCRAPS TRUMP METHANE DEREGULATION: The House voted this morning to cancel a Trump administration action that would have blocked the EPA from controlling methane emitted by the oil and gas industry.
The resolution, passed 229-191 with largely Democratic support, will now head to Biden’s desk. A dozen Republicans voted with Democrats to approve the measure (if you’re wondering which Republicans, see this tweet from Politico’s Alex Guillen). The Senate approved the measure in April, also with a largely party-line vote.
Once Biden signs the resolution, the measure will reinstate a mandate for oil and gas companies to monitor and repair equipment leaking methane. The move is a win for Biden, too, because it clears the way for his EPA to more quickly set stricter methane standards for both new and existing oil and gas operations, which Biden has directed the agency to propose by September.
SUPREME COURT GIVES OIL REFINERS A WIN: The Supreme Court ruled this morning that the EPA has relatively broad authority to grant small oil refineries exemptions from the Renewable Fuel Standard, reversing a federal appeals court ruling last year that had sharply limited the EPA’s exemption program.
The 6-3 opinion is a major win for oil refiners, which have recently been pressing the Biden administration to grant them more relief from the federal biofuels blending requirements. But it is a huge blow to biofuels producers, who have argued the exemption program is undercutting the intent of the RFS, especially during the Trump administration when the EPA was liberally granting exemption requests.
The Supreme Court’s ruling won’t put the RFS fight to bed, however. Already, Biden has found himself caught between two factions of his party on the RFS, and there is a significant battle still to come as the EPA works to set the next round of blending obligations. The Trump administration had left office with the RFS program in limbo, punting a decision to set the 2021 requirements.
IRAN POISED TO RETURN TO GLOBAL OIL MARKETS: Biden’s expected revival of the 2015 Iran nuclear agreement will enable Iranian oil barrels to reach the global market when prices are at their highest level in two years due to demand recovery from the pandemic, Josh reports for a story posted today.
Former President Donald Trump did not fulfill his promise of “maximum pressure” to cut Iran’s oil exports to zero after scrapping the Obama administration’s nuclear deal. But his harsh sanctions deeply bruised Iran’s economy.
Iran has now demanded U.S. sanctions relief on oil exports ahead of its resumed compliance with the original nuclear deal, should negotiators reach a truce to restore it during talks in Vienna.
“The biggest driver of Iran participating in negotiations again is getting oil back on the water and oil money unfrozen in banks,” said Scott Modell, managing director of Rapidan Energy, a research group.
Don’t expect a price shock: Rapidan Energy expects Iran to increase exports to 2 million barrels per day, up from about 1 million barrels per day currently, within a month of Biden lifting sanctions. Iran could return to its full production capacity of 3.8 million barrels per day by April 2022.
Iran has been preparing for a return to the oil market, and traders may have already “priced in” its impact.
But Biden could welcome any price relief: Still, there will likely be some weakening of prices if Iran can quickly ramp up exports, a development Biden could welcome as rising gasoline prices in the U.S. have put his administration on the defensive.
“The Biden administration has a problem here,” said Kevin Book, managing director of ClearView Energy Partners, a research group. “Gas prices are rising so much, the American voter is hurting. So if one of the side effects of the Iran deal is more supply on the market, there is no reason why they would say no.”
DOMINION’S 472-FOOT OFFSHORE WIND VESSEL: Virginia-based utility company Dominion Energy is building a massive ship to install offshore wind turbines, a move that will be significant to scaling the U.S. industry up to the level Biden envisions, Abby reports.
The power company, offshore wind developers, and clean energy advocates say construction of the vessel, which will be sea-ready in 2023, will be a watershed move for the offshore wind industry.
The 472-foot ship being built in Texas will be the first U.S.-flagged offshore wind installation vessel. Importantly, that means the ship will comply with the Jones Act, a century-old law that requires ships moving U.S. goods between U.S. ports to be built and crewed domestically.
Because there have been no U.S.-flagged installation vessels to date, developers of the few offshore wind pilot projects off the East Coast have had to find complex workarounds to move the massive turbine parts from port to the offshore lease areas where they are installed. Those workarounds won’t be sufficient as the industry scales up, however.
“The way that you build a two-turbine or five-turbine project is a lot different than how you build a 60-, 80-, 120-turbine project. You can’t do some of the gymnastics you might be able to do with a smaller project,” said Claire Richer, federal affairs director with the American Clean Power Association.
PIPELINE GYMNASTICS...BIDEN BACKS TRUMP APPROVAL OF LINE 3: The Justice Department in a legal filing late Wednesday defended the Trump administration’s support of the contentious Line 3 pipeline expansion in northern Minnesota in a federal lawsuit challenging a key permit.
The Biden administration DOJ said the Army Corps of Engineers’s approval last year of permits for Enbridge’s Line 3 oil pipeline followed its legal obligation to consider the project’s environmental impacts. Enbridge is looking to replace an aging pipeline to transport crude from Canada’s Alberta oil sands, the same emissions-intensive source that would have been used in Keystone XL, through the state's watersheds and tribal lands to Superior, Wisconsin.
How about Line 5?: The move comes just after the Biden administration took a different position on another Enbride oil pipeline project, saying it would scrutinize the environmental effects of a portion of Line 5 in Michigan, wading into a long-waged battle by environmentalists and Gov. Gretchen Whitmer to shut it down. Environmental activists accused Biden of taking an “inconsistent” approach to pipelines approved in the Trump administration.
“Allowing Line 3 to move forward is, at best, inconsistent with the bold promises on climate and environmental justice President Biden campaigned and was elected on,” said Sierra Club executive director Michael Brune.
SECOND REPUBLICAN ENDORSES BIPARTISAN CES BILL: The “compromise” clean electricity standard proposal offered this week by Republican Rep. David McKinley of West Virginia and Democratic Rep. Kurt Schrader of Oregon has picked up additional co-sponsors, along with support from utilities and labor groups.
Rep. Claudia Tenney, Republican of New York, and Jim Costa, Democrat of California, signed onto the bill. Tenney, who called the measure “reasonable and realistic,” is only the second Republican we are aware of to back a clean electricity standard of any sort.
Utilities American Electric Power, Duke Energy, and Southern Company also issued supportive statements, as did union groups that represent a lot of fossil fuel workers, such as North America’s Building Trades Unions and United Mine Workers.
The McKinley-Schrader CES, of course, is much less aggressive than Biden’s proposal.
It would impose a requirement that utilities generate 80% clean power by 2050, but the standard would not kick in until 10 years after enacting the bill, after first imposing a massive scale-up of R&D spending for clean energy technologies to lower their cost -- including carbon capture.
MOMENTUM FOR FEDERAL NUCLEAR SUBSIDIES: A bipartisan group of House members has introduced legislation to provide a production tax credit to keep financially struggling nuclear plants from retiring.
We missed the rollout of the bill earlier this week, but it’s a significant step and shows Congress is likely to provide some type of aid for existing nuclear plants as part of infrastructure legislation. Sponsors of the legislation include Reps. Bill Pascrell, D-N.J, Brian Fitzpatrick, R-Pennsylvania, Tom Suozzi, D-N.Y., John Katko, R-N.Y., Bobby Rush, D-Illinois, and more.
The Biden administration has already said it supports a production tax credit for existing nuclear plants to stay online, a necessity if it wants to meet its goal of 100% carbon-free power by 2035.
Expect a similar bill to be introduced in the Senate soon.
BIPARTISAN BILL TO BOOST CARBON CAPTURE CREDITS: Sens. John Barrasso and Ben Ray Lujan led a group of bipartisan senators yesterday to introduce legislation that would increase the value of tax incentives for carbon capture and storage in a move aimed at accelerating deployment of the technology.
The bill, which mirrors a bipartisan measure introduced in the House last month, would increase the value of carbon capture projects from $50 to $85 per ton for projects that store the CO2 underground and from $35 to $60 per ton for projects that use enhanced oil recovery (injecting the CO2 underground in a process that produces more oil).
The legislation would also allow carbon capture developers to claim their tax incentives as direct cash payments, and it would scrap CO2 capture thresholds that projects have to meet to qualify for the credits. Carbon capture proponents say the latter move is critical to encouraging more projects in the industrial sector, which tend to produce smaller amounts of carbon, as well as direct air capture projects, which are currently smaller scale.
API UNVEILS GREENHOUSE GAS REPORTING TEMPLATE: The American Petroleum Institute is offering a standardized framework for oil and gas companies to report their greenhouse gas emissions, in an effort to simplify the process for the industry.
“While many companies have reported greenhouse gas indicators for over 20 years, the template aims to provide a consistent and uniform set of core greenhouse gas indicators to enable greater comparability in climate-related reporting,” said Mike Sommers, API’s CEO, during a speech yesterday before the Houston Economic Club. The oil and gas lobby intends to release additional templates focused on greenhouse gas intensity later in the year.
API’s push on greenhouse gas reporting comes as the Securities and Exchange Commission is weighing how to establish requirements for public companies to disclose their emissions and the risks they face from climate change. Investors and asset managers, along with environmentalists, have been increasingly calling for mandatory disclosure.
Worth noting: API’s reporting template focuses solely on scope 1 and scope 2 emissions, and it doesn’t address scope 3, or indirect emissions generated from the burning of its product. Environmental groups say it is especially important for companies to report scope 3 emissions, which are harder to tackle but often the largest portion of a company’s emissions.
New York Times Climate watchdog says Britain lacks a strategy to meet its goals
Wall Street Journal Environmental investing frenzy stretches the meaning of ‘green’
Wall Street Journal Thermal-coal prices hit decade high amid gas shortage
Washington Post Metro is phasing out diesel-powered buses, with plans to transform its fleet to electric by 2045
TUESDAY | JUNE 29
10:30 a.m. 2123 Rayburn. The House Energy and Commerce Committee will hold a hearing on the CLEAN Future Act and electric transmission.
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Original Author: Josh Siegel, Abby Smith