Daily on Energy: The consensus forming on energy measures in infrastructure legislation

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AN EMERGING CONSENSUS: The latest infrastructure negotiations could yield a bipartisan bill with limited energy provisions, but the big climate pieces of President Joe Biden’s agenda must be passed with Democrats only.

That’s the consensus that appears to be emerging among top Biden administration officials and centrist senators on both sides of the aisle.

The so-called “gang of 20” negotiations, with 10 senators from each party, “will bear fruit,” Energy Secretary Jennifer Granholm said yesterday during a virtual forum hosted by Bloom Energy. That bipartisan group of senators all agree on spending on the electricity grid, clean energy demonstration projects, and incentives to keep existing nuclear power online, in addition to traditional infrastructure, Granholm said.

“It may not be the whole ball of wax. Chuck Schumer may have a plan to be able to do the rest of it in a different way, but I think you will see an infrastructure bill that will have bipartisan support,” she added.

Centrist senators agree with her: Sen. Chris Coons, a Delaware Democrat and close Biden ally, echoed Granholm’s comments, though he cautioned the window to deliver a bipartisan infrastructure bill is closing quickly.

“I don’t think it’s a charade. I think it’s a very serious undertaking, certainly on the president’s part,” Coons said at the Bloom Energy forum of the infrastructure talks. “I’ve spoken recently to some of the Democrats and Republicans engaged in these negotiations. They recognize their value, but there’s also a shrinking amount of time left for us to get a real result done in a bipartisan way.”

While Coons said much of Biden’s climate agenda lacks Republican support, he acknowledged a few items could make it into a bipartisan bill. For example, he touted legislation he introduced with Sen. Bill Cassidy, the Louisiana Republican helping lead the gang of 20 talks, that would invest significantly to support pipelines that carry captured carbon dioxide to where it can be stored.

Sen. Mitt Romney, the Utah Republican who is in the gang of 20 talks, told reporters yesterday that the bipartisan group’s infrastructure proposal is likely to include “a number of line items” related to hydrogen, direct air capture, nuclear power and carbon dioxide pipelines.

But he acknowledged more aggressive climate proposals aren’t likely to make the cut.

“The Democrats' agenda on climate change is probably something they're going to pursue, by and large, outside of an infrastructure bill,” Romney said.

Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Josh Siegel (@SiegelScribe) and Abby Smith (@AbbySmithDC). Email jsiegel@washingtonexaminer.com or asmith@washingtonexaminer.com 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.

KEYSTONE XL IS DEAD: TC Energy, the developer of the long-contested Keystone XL oil pipeline, is pulling the plug on the project, the company announced after Josh first reported the decision yesterday afternoon.

The decision by the Canadian company to cancel the $8 billion project comes after Biden canceled a permit for the 1,200-mile pipeline that would have delivered crude from Canada's Alberta oil sands to refineries on the Gulf Coast.

The move, part of a day-one climate change executive order, drew backlash from Republican lawmakers, some Democrats, and Biden’s union allies who said the cancellation would kill thousands of construction jobs.

Republican Sen. Steve Daines of Montana, in a statement, called the end of the project "devastating" and "entirely President Biden’s fault."

But TC Energy’s official decision to deem the project unviable delivers a major win for environmentalists, given that Keystone XL was their most symbolic target representing their argument that fossil fuels must be kept in the ground in order to combat climate change.

BUSINESS GROUPS ARE ANGRY: Big business groups that have sought to tread softly around Biden’s environmental agenda blamed him for Keystone XL’s demise.

“TC Energy’s decision to terminate the Keystone XL pipeline project is understandable, but necessary only because of the policy errors of the administration,” said Marty Durbin, president of the U.S. Chamber of Commerce’s Global Energy Institute.

Robin Rorick, vice president of midstream and industry operations at the American Petroleum Institute, said that “political obstructionism” led to the termination of the Keystone XL Pipeline.

BIDEN PRESSURED TO STOP MORE PIPELINES: Environmental groups are pressing the Biden administration to intervene in other oil pipeline disputes after celebrating the victory of Keystone XL’s death.

Protesters gathered in northern Minnesota where a Canadian company is poised to replace an aging pipeline that would carry oil through the state's watersheds and tribal lands, the Washington Examiner’s Mica Soellner reports.

The latest on Line 3: Over the weekend and into this week, demonstrators took part in drum circles and prayer gatherings to express their opposition to the $9 billion Enbridge pipeline expansion, dubbed Line 3. Others took more disruptive action geared toward blocking the construction efforts, leading to law enforcement action. Activists estimate that more than 160 people have been arrested.

About 60% of the Minnesota portion of the pipeline has been built.

Once completed, the pipeline would be able to carry 760,000 barrels of oil a day from Canada and across northern Minnesota and Wisconsin through 340 miles of the network. It is scheduled to be finished by the end of 2021.

Biden mum so far: The pipeline received final approval under former President Donald Trump, but protesters are lobbying the Biden administration to weigh in on their grievances and offer an eleventh-hour suspension on the project, along with stopping the Dakota Access oil pipeline. The Biden administration has thus far declined to act on either.

“These projects are dangerous and unnecessary for all the same reasons Keystone XL was, and they must be halted for Biden and climate advisor Gina McCarthy to keep their commitments on climate change and Indigenous rights,” said David Turnbull, strategic communications director with Oil Change International.

OIL CEOS BROACH CARBON TAX WITH WHITE HOUSE: Carbon pricing was among the topics discussed in a meeting yesterday between oil and gas company CEOs and McCarthy.

"We appreciate our ongoing, constructive dialogue on CCUS, carbon pricing, and methane regulation, among other priorities,” said a spokesperson for the American Petroleum Institute, which organized the meeting with its large member companies, in a statement provided to Josh.’

Carbon pricing, of course, is not part of Biden’s American Jobs Plan proposal, and the bipartisan Senate group negotiating an infrastructure deal has dismissed inserting the policy as a payfor.

Business and oil lobby groups, however, prefer carbon pricing to a clean electricity standard favored by Biden that would likely more quickly force out most natural gas from the power sector.

HOUSE COMMITTEE PASSES INFRASTRUCTURE BILL: The House Transportation and Infrastructure Committee approved a $547 billion surface transportation bill yesterday that calls for huge investments in transit and rail to reduce the nation’s reliance on road travel.

Democrats’ INVEST in America Act, which passed out of committee 38-26, would spend $109 billion for transit and $95 billion on rail — including a tripling of funding to Amtrak — over five years. It also provides $4 billion for electric vehicle charging infrastructure, while encouraging states to repair existing roads rather than build new ones.

BIDEN EPA TO REDEFINE WOTUS: The Biden administration will seek to expand the scope of waters covered by federal protections beyond the Trump administration definition, again throwing water pollution mandates into limbo.

“The EPA and Department of the Army have determined that this rule is leading to significant environmental degradation,” EPA Administrator Michael Regan said in a statement yesterday. He added the agencies want to establish a “durable definition of ‘waters of the United States.’”

Regan and his team face a tricky task, however, in crafting a long-lasting regulation that appeases every constituency. Which waters are covered by federal protections has been a point of regulatory tension for years, following the Obama administration’s Waters of the U.S., or WOTUS, rule.

The Trump administration’s rewrite narrowed the scope of which waters were covered, excluding wetlands connected to covered waters through groundwater, many ditches, and ephemeral streams, or streams that flow with rainwater.

The Biden administration hasn’t said yet how it will define WOTUS. For now, it is asking a federal district court to send the Trump administration’s action back to the EPA for revision.

THE LATEST ON CARBON CAPTURE IN TEXAS: Texas is increasingly poised to become a carbon capture powerhouse, as state politicians move to make it easier for projects to be permitted and more companies express their interest in developing in the state.

Gov. Greg Abbott signed legislation yesterday that gives the Texas Railroad Commission, which oversees the oil and gas industry, gas utilities, pipeline safety, and mining, the authority to regulate the underground storage of carbon dioxide.

The move sets up Texas to ask the EPA for primacy to regulate wells in the state that store carbon dioxide, which carbon capture advocates say simplifies the process to approve projects. To date, just North Dakota and Wyoming have primacy under the EPA’s Class VI well program.

Also this week, Talos Energy launched a joint venture with Storegga Geotechnologies Limited to explore opportunities for carbon capture projects that store the captured CO2 offshore under the seafloor of federal waters. The venture will look at potential projects along the Gulf Coast, off the shores of Texas, Louisiana, Mississippi, and Alabama.

The venture comes on the heels of ExxonMobil’s announcement earlier this year that it wants to pursue a carbon capture hub in Houston. For more on Exxon’s plans and the oil company’s pitch to the Biden administration, see Abby’s story from last month.

BIDEN SAYS CLIMATE IS GREATEST NATIONAL SECURITY THREAT: Biden warned during a speech yesterday to American troops in England that climate change presents the greatest threat to the U.S.

“The military sat us down and let us know what the greatest threats facing America were — the greatest physical threats,” Biden said of a meeting he had with the joint chiefs after becoming vice president in 2009. “This is not a joke. You know what the joint chiefs told us the greatest threat facing America was? Global warming.”

Biden told the troops at the Royal Air Force Mildenhall station that global warming still presents that kind of threat, asking nations to commit to “ambitious climate action” that would stop the globe from warming no more than 1.5 degrees Celsius.

Biden said climate change could cause “significant population movement,” which could include “fights over land, millions of people leaving places because they’re literally sinking below the sea, like in Indonesia because of the fights over land that is not there anymore.”

SURVEY FINDS STRONG SUPPORT FOR ‘BUY CLEAN’ STANDARDS: A majority of voters polled in six heavy manufacturing states back standards requiring companies selling products to the government to disclose and minimize their carbon emissions, according to a new survey released this morning by Third Way.

More than half (59%) of those surveyed backed requirements that the U.S. government buy construction materials from manufacturers that are less carbon intensive and more energy efficient, the polling found.

Backing for clean procurement requirements remained strong even when respondents were told it would increase the costs of a project by 2%. The survey polled more than 3,300 voters across Pennsylvania, West Virginia, Ohio, Indiana, Illinois, and Michigan.

Top Democrats on the House Energy and Commerce Committee have floated a “buy clean” program to reduce emissions from construction materials in their signature climate bill, the CLEAN Future Act. Biden, meanwhile, has directed federal agencies to purchase more renewable energy and clean vehicles, as well as ordered agencies to incorporate climate change into all of their decision making, including procurement.

The Rundown

Bloomberg G-7 eyes ambitious shift to electric cars and away from oil

Wall Street Journal Europe’s carbon border tax plan looms over global trade

Calendar

THURSDAY | JUNE 10

11 a.m. The House Energy and Commerce Committee will hold a virtual markup to consider methane, energy cybersecurity, and consumer protection bills.

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Tags: Energy and Environment, Daily on Energy

Original Author: Josh Siegel, Abby Smith

Original Location: Daily on Energy: The consensus forming on energy measures in infrastructure legislation

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