Daily on Energy: Manchin clean energy manufacturing priority left out of bipartisan infrastructure bill

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WHAT’S HAPPENING WITH A MANCHIN PRIORITY: Democrats pulled out a key clean energy manufacturing provision pushed by centrist Sen. Joe Manchin from the final bipartisan infrastructure bill.

The $8 billion expansion of the 48C tax credit was included in a summary of the legislation that circulated last week, and also was a part of Manchin’s clean energy infrastructure bill that he marshalled through the Energy Committee he chairs.

But it is conspicuously absent from the actual bill released Sunday night.

Manchin’s proposal -- which he released as legislation with Sen. Debbie Stabenow of Michigan -- would build on the 48C tax credit by providing subsidies for companies to build or retrofit manufacturing and industrial facilities to make clean energy technologies.

Half the $8 billion of funding would be targeted for use in places where coal mines have closed or coal plants have retired, a priority for Manchin, who represents West Virginia, a big coal- and natural gas-producing state.

Lobbyists following the negotiations told me Democrats agreed to remove the provision after lead negotiator Rob Portman of Ohio, a Republican, insisted it be stripped of Davis-Bacon labor requirements for employers to pay prevailing wages.

Democrats could inadvertently benefit: Democrats are holding out to include the manufacturing subsidies as part of their forthcoming reconciliation package that can be passed without Republicans -- assuming all Democrats stick together in the 50-50 split Senate.

Preserving the measure for that effort could be a more natural fit, analysts and lobbyists told me, since it is expected to include other provisions to spur domestic manufacturing of clean energy technologies like electric car batteries and solar panels.

Holding out also allows Democratic Leader Chuck Schumer to use the 48C expansion as a sweetener to entice Manchin, who has expressed skepticism about spending $3.5 trillion on the reconciliation package, as party leaders are aiming for.

Manchin has pitched the measure as crucial to meet the challenge of matching lost fossil fuel jobs with new ones created in clean energy, a case useful to him as he looks to build support for massive infrastructure spending to his conservative constituents.

“It doesn't hurt Schumer’s case to have a little coal-fired ammunition in reserve for Manchin,” Kevin Book, managing director of ClearView Energy Partners, told me. “The idea of advanced manufacturing is pretty central to what Democrats are after in the party-line bill. They are not just interested in deploying solar capacity but also making it. If there is a place it belongs, it would be part of an effort to transform the American industrial base.”

Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writer Josh Siegel (@SiegelScribe). Email jsiegel@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.

BIDEN’S LATEST MOVE TO SLOW-WALK ANWR DRILLING: The Biden administration plans to do a new environmental review of oil and gas development in Alaska’s Arctic National Wildlife Refuge, the latest move to forestall drilling there.

The Interior Department announced today its Notice of Intent to begin a new environmental review on drilling in a small section of the 19.3 million-acre refuge, known as the “1002 area,” where billions of barrels of oil are believed to lie beneath the coastal plain.

Interior has already suspended leasing activity in the refuge, citing “legal deficiencies” in the Trump administration’s environmental review of the leasing program.

It imposed a temporary moratorium on all activities related to leases that were granted at the end of the Trump administration pending a new analysis, which Interior is now formally kickstarting with a 60-day comment period.

After the review, Interior will then determine whether the leases should be reaffirmed, voided, or subject to additional environmental mitigation measures.

Republicans in Congress and the Trump administration authorized the first drilling program in ANWR as part of the 2017 tax cut bill. The GOP tax cut bill called for a second lease sale before 2024, and Republicans have argued Interior must proceed unless Congress repeals the leasing mandate.

NEXT UP FOR INFRASTRUCTURE BILL...AMENDMENTS: Senate Republicans are seeking a “robust” amendment debate before advancing the bipartisan infrastructure bill, presenting yet another pitfall in the quest to pass the biggest investment in roads and bridges in decades, the Washington Examiner’s Susan Ferrechio reports.

Republican leaders as well as GOP lawmakers who helped write the bipartisan bill said they want to ensure lawmakers in their party have an opportunity to change the measure through the amendment process, which is controlled by the Democratic majority.

“Senators on both sides expect and deserve opportunities to have a say and to put their own states’ imprints on this major bill,” Minority Leader Mitch McConnell, a Kentucky Republican, said yesterday.

Schumer is eager to pass the bill, perhaps as soon as this week. Schumer will have to whittle down the long list of proposed amendments and urged senators to work swiftly to complete the amendment process. The Senate had been slated to adjourn for the summer at the end of the week but could remain in session longer.

“I hope that we can use our time in the Senate efficiently,” Schumer said yesterday. “Let’s start voting on amendments. The longer it takes to finish the bill, the longer we’ll be here.”

BIG ECONOMIC BENEFITS IF BIDEN FULFILLS PROMISE ON LEAD PIPES: The bipartisan infrastructure bill will not “eliminate all the lead pipes in America,” an exaggerated promise President Joe Biden repeated yesterday. The bill offers $15 billion for removing lead from the nation’s drinking water systems, much less than the $45 billion Biden initially called for in his American Jobs Plan.

A new report this morning from E2 and the United Association of Union Plumbers & Pipefitters aims to show the economic benefits if the Biden administration is able to finish the task (perhaps by adding more funding in the reconciliation bill).

The report finds that spending $45 billion replacing all of America’s 10 million lead service lines will create and support 56,080 jobs annually for 10 years. That includes 26,900 direct jobs per year — construction workers, plumbers, pipefitters, heavy equipment operators.

That level of investment would also generate $104 billion in economic activity, taxes, and additional wages over a decade.

CONSERVATIVE GROUP RALLIES FOR INFRASTRUCTURE BILL: Citizens for Responsible Energy Solutions launched a multistate $1.5 million broadcast and digital advertising campaign today to support passage of the bipartisan infrastructure package.

“CRES strongly supports the bipartisan infrastructure package that works for all Americans by making our transportation, energy, and water sectors more reliable, resilient, and ready for the future,” said Heather Reams, executive director of CRES.

The ads will also thank Republican senators who helped craft the bill, and run in their home states.

Those senators are Richard Burr of North Carolina, Shelley Moore Capito of West Virginia, Joni Ernst and Chuck Grassley of Iowa, Jerry Moran of Kansas, Mike Rounds and John Thune of South Dakota, Thom Tillis of North Carolina, and Todd Young of Indiana.

BROAD SUPPORT FOR CARBON CAPTURE FUNDING: A coalition of more than 160 companies, labor unions, and environmental groups wrote a letter today to House and Senate leaders calling for infrastructure legislation to include significant carbon capture funding.

The letter is backed by major unions, including United Steelworkers and the AFL-CIO, oil and gas companies Equinor and Shell, and environmental groups Nature Conservancy, National Wildlife Federation and Clean Air Task Force.

“This letter represents the largest and most diverse group of companies and organizations to date that have joined together in advocating for a common federal policy agenda for carbon management,” said Brad Crabtree, director of the Carbon Capture Coalition, which organized the letter.

It comes as liberals are panning the bipartisan bill for including measures to support carbon capture, a technology they view as extending the life of fossil fuels.

The groups supporting carbon capture called on lawmakers to reform a tax credit known as 45Q by providing a “direct pay” option and to increase the subsidy amount for industrial and power plant projects, along with direct air capture. These tax measures are not in the bipartisan infrastructure bill, but could be included in the Democratic-only reconciliation package.

They also endorsed financing the buildout of pipelines to transport captured carbon dioxide and funding demonstration projects for carbon capture and direct air capture, provisions that are in the bipartisan bill.

MORE PROFITS FOR OIL AND GAS: BP reported a $2.8 billion second quarter profit this morning, the latest oil and gas giant to post strong earnings as fuel demand and crude prices have largely recovered from the pandemic.

The London-based company is also raising dividends by 4% and plans to buy back $1.4 billion in shares during the next quarter.

BP CEO Bernard Looney said the performance should ease investor concerns over the company’s aggressive plans to shift away from oil and gas to renewables and other low-carbon solutions in route to reaching net-zero emissions.

“This shows we continue to perform while transforming bp - generating value for our shareholders today while we transition the company for the future,” Looney said.

GROWING RENEWABLES INVESTMENT, BUT NOT ENOUGH: New investment into renewable energy projects and companies globally surged to $174 billion in the first half of 2021, the highest total ever recorded in the first half of any year.

But BloombergNEF’s head of analysis Albert Cheung, who helped compile the data, warned that 1.8% year-on-year increase in renewables investment is “nothing to write home about.”

“An immediate acceleration in funding is needed if we are to get on track for global net zero,” Cheung said.

Investment in solar power projects rose to a record $79 billion, up 9% compared to the same period last year, but wind project finance was around $27 billion lower.

US VOWS ‘COLLECTIVE RESPONSE’ TO IRAN ATTACK: U.S. and allied officials are planning a “collective response” to an alleged Iranian attack on an oil tanker that killed two civilians, the Washington Examiner’s Joel Gehrke reports.

“We've conducted a thorough review, and we're confident that Iran carried out this attack,” Secretary of State Antony Blinken told reporters yesterday. “And there will be a collective response.”

Blinken’s announcement adds a threatening edge to the accusation lodged against Iran by the United States, the United Kingdom, and Romania.

The Rundown

Reuters ADB, Citi, HSBC, Prudential hatch plan for Asian coal-fired closures

New York Times Britain rethinks letting China enter its nuclear power industry

Financial Times US forest fires threaten carbon offsets as company-linked trees burn



10 a.m. 366 Dirken. The Senate Energy and Natural Resources Committee will hold a hearing to examine the role of and programs within the Department of Energy’s Office of Science.

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Tags: Energy and Environment, Daily on Energy

Original Author: Josh Siegel

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