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IT’S TUESDAY: Today’s brief has notes for you on some of the meaning behind the House’s unanimous passage yesterday of HR 1107, the PRC Is Not a Developing Country Act; the rise in whale deaths posing challenges for offshore wind; and the latest on House Republicans’ energy package.
Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Jeremy Beaman (@jeremywbeaman) and Breanne Deppisch (@breanne_dep). 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.
HOUSE BILL OPPOSES CHINA’S DEVELOPING COUNTRY STATUS: The House unanimously passed legislation yesterday that would require the State Department to use its station to oppose the designation of China as a developing country in international affairs.
The why: China’s developing country status has concrete implications for its obligations to reduce greenhouse gas emissions under international agreements, including the Paris agreement, and determines whether it receives financial support from wealthier countries to cut emissions.
Under Republican Rep. Young Kim’s PRC Is Not a Developing Country Act, State would be required to advocate that international organizations change China’s designation as a “developing country” to an upper-middle-income country, high-income country, or developed country.
The proposal would also require the department to advocate, within any international organization of which both the U.S. and China are members, that China “not receive preferential treatment or assistance within the organization as a result of it having the status of a developing country” — regardless of whether its official designation is changed.
The Paris agreement includes language that parties recognize “the need to support developing country parties” to implement emissions reductions. It also recognizes that “peaking [of emissions] will take longer for developing country parties.”
Other agreements, including the Kigali Amendment to the Montreal Protocol, provide financial assistance to developing countries to meet obligations.
The issue takes on its significance in light of the intense competition between the U.S. and China as the Biden administration pursues an aggressive decarbonization agenda. Some administration officials and members of Congress have said China, which committed to achieving peak emissions before 2030 and aims to be net-zero before 2060, must be much more aggressive in reducing emissions than it is now.
China plans to add hundreds of gigawatts of coal-fired power generation while neither North America nor the European Union have new planned coal capacity, according to E3G.
Lawmakers also see the dispensations for “developing countries” as giving a pass to an advanced economy in China that leads the world in the design and manufacture of many technologies — and the emission of greenhouse gases.
More than two dozen Senate Republicans voted against ratification of the Kigali Amendment in September, with several members citing an unfair advantage to China. Sen. Dan Sullivan introduced a bill in the days after the ratification resolution passed that sought to prohibit the United States’s contributions to the Protocol’s assistance fund pending removal of China’s developing country designation.
China has experienced exponential economic growth over the last half century and is the second largest economy by GDP behind the United States. Its per capita GDP remains a fraction of that of most members of the OECD, according to the World Economic Forum. As of 2018, it had more people living without access to clean cooking than the U.S. had residents.
Researchers at Columbia University suggested in a 2020 paper that China be considered a “hybrid superpower” in recognition that it maintains significant levels of poverty while wielding economic and technological might rivaled only by the United States.
WHALE FATALITIES OVERSHADOW MASSACHUSETTS OFFSHORE WIND: The Biden administration’s offshore wind energy agenda faces a Vestas turbine-sized PR hurdle in the continued strandings and deaths of marine mammals on the Atlantic coast. It was the very first question raised to Secretary Deb Haaland during today’s House Appropriations Committee hearing.
Developers have proposed more than a dozen wind projects on federal wind leases in the Atlantic, and BOEM is actively working through various phases of NEPA procedures for several of them, including SouthCoast Wind offshore Massachusetts.
BOEM staff walked through its draft environmental impact statement for SouthCoast Wind in a virtual hearing yesterday, disputing characterizations made by some in the press and by commenters during the hearing that NOAA’s incidental take authorizations — which effectively enable developers performing a given activity to unintentionally harass mammal species, something otherwise prohibited by federal law — permit wind developers to injure or kill species.
“Offshore wind developers have not applied for and NOAA Fisheries has not approved authorization to kill any marine mammals associated with offshore wind. I can’t say that strong enough,” said Kyle Baker, a BOEM biologist.
Although officials at BOEM and NOAA have maintained there’s no established link between noise associated with offshore wind activities and fatalities of right whales and others, NOAA has identified vessel strikes and entanglement in fishing gear as the main human causes of mortality of right whales in particular.
Preventing these impacts to the endangered species and other whales was a predominant theme among participants during the hearing who want BOEM to carry out more research into the issue, or block SouthCoast Wind altogether.
Wind developers, including SouthCoast Wind, have provided in their construction and operations plans procedures to mitigate vessel strikes by implementing slower vessel speeds and rigorous monitoring for species presence.
BOEM, in its draft EIS, said that reducing vessel speeds have shown to be effective mitigation measures, but some say the bureau hasn’t accounted for behavioral differences of right whales compared to other species.
“The [SouthCoast Wind draft EIS] ignores the fact that right whales are quiet for hours,” one commenter said. “No amount of on board vessel watchers … or passive acoustic monitoring is going to be able to protect them.”
Others asserted BOEM has inadequately considered how construction activities could affect mammals’ food supply.
A long-standing issue: Wind’s effect on the right whale population is not new in 2023. BOEM and cooperating agencies have taken up the issue with previous projects, including Vineyard Wind, the United States’s first commercial-scale offshore wind project that’s currently under construction.
The National Marine Fisheries Service published its biological opinion for the project in October 2021 and concluded the proposed project is “not likely to jeopardize” the continued existence of North Atlantic right whales and others.
Haaland pledged this morning to stay on top of the whale issue, but the secretary has a great deal to consider beyond the health of an endangered species. The Biden administration has described climate change as existential and sees offshore wind among its primary solutions to reducing power sector emissions.
HR 1 AMENDMENTS PROCESS COULD ALIENATE CENTRIST REPUBLICANS: The House Rules Committee approved a rule yesterday for HR 1 that will allow consideration of 37 amendments, compared to the 153 total that were submitted by lawmakers.
That could cause friction in the days ahead, as Republicans hold a narrow four-seat majority in the chamber––and it’s unclear whether all of them will vote yes on the bill.
Among the amendments that were not considered were amendments on offshore drilling in the Gulf Coast, introduced by Florida Republicans, as well as multiple amendments filed by centrist Rep. Brian Fitzpatrick of Pennsylvania. He sought to make the package more climate-friendly, including by imposing a tax on carbon emissions from fossil fuel companies and other industrial processes.
It is unclear whether Fitzpatrick will support the bill without those amendments, and he did not respond to the Washington Examiner’s request for comment.
Worth noting – energy among McCarthy debt ceiling asks: The demands Speaker Kevin McCarthy laid out this morning for debt ceiling negotiations with President Joe Biden include enacting “policies to grow our economy and keep Americans safe, including measures to lower energy costs [and] make America energy independent.”
NEWSOM TO SIGN GAS PRICE GOUGING BILL: California Gov. Gavin Newsom is expected to sign legislation today equipping state authorities to investigate and penalize oil refiners for high gas prices.
The assembly cleared the bill yesterday after the Senate approved it last week.
The measure, the first of its kind in the nation, took form last year after gas price spiked and Newsom blamed refiners like Chevron and Phillips66. It would work by creating a watchdog agency within the California Energy Commission to monitor oil and fuel markets. It would enable the commission to impose civil penalties on refiners charging above a “maximum allowable margin” for the price of gasoline.
U.S. AND JAPAN STRIKE CRITICAL MINERALS AGREEMENT: The U.S. and Japan said today that they have reached a trade deal on critical minerals used to make EV batteries, alleviating tensions between the two countries over the sourcing requirements included in the Inflation Reduction Act.
Senior Biden administration officials said the agreement prohibits either country from enacting bilateral export restrictions on the most critical minerals used in EV battery production, including lithium, nickel, cobalt, graphite, and manganese.
The two countries also pledged to promote more “efficient” resources, and said they will meet to review foreign investments in their critical minerals supply chains in a bid to reduce dependence on China. The countries will also review the agreement every two years.
The deal is likely to be a roadmap of sorts for other allies as they look to build out critical minerals supply chains for EV batteries and production in compliance with the IRA’s “Made in America” provisions.
News of the deal comes as the Treasury Department is slated to issue long-awaited battery sourcing requirements this week.
RUSSIA CLAIMS US SANCTIONS HAVE FAILED TO CURB ITS OIL OUTPUT: Russia said sanctions packages adopted by the U.S. and Western allies have failed to restrict its crude oil shipments, and that it has redirected virtually all of its volumes to “friendly” nations in other parts of the world.
“I can say today that we have managed to completely redirect the entire volume of exports affected by the embargo. There was no decrease in sales,” Russian Energy Minister Nikolai Shulginov said at an energy forum. Instead, he said, Russia has worked to reroute its crude supplies and refined products to buyers in Asia, Africa, Latin America, and the Middle East, rather than the EU.
Deputy Prime Minister Alexander Novak touted Russia’s energy industry as “sustainable” despite the sanctions, noting at the same event that in 2022, energy revenue accounted for 42% of Russia’s federal budget, compared to just 36% in 2021.
Where it’s going: Russian crude imports to India have jumped 22-fold over the past year, the Russian officials said. India accounted for more than 50% of its seaborne crude sales in the month of March, with China in second place.
DIAMONDBACK ENERGY JOINS GLOBAL METHANE PLEDGE RANKS: Texas-based oil and gas independent Diamondback Energy announced that it has joined the United Nations’s voluntary oil and gas reporting and mitigation program, the Oil and Gas Methane Partnership 2.0.
OGMP, which includes big-name members from across the world such as BP, Equinor, and no. 1 U.S. gas producer EQT, commits member companies to the partnership’s methane reporting framework. It was created in 2015 and provides for members to report emissions confidentially.
Diamondback is one among several U.S. independents to join OGMP, whose ranks include some 100 companies with assets on five continents, representing over 35% of the world’s oil and gas production.
U.S. oil and gas companies are expressing increasing interest in mitigating methane emissions, considering it a relatively easy climate change solution and good business for making their gas cleaner to global buyers sensitive to the emissions intensity of their gas supplies.
The Rundown
Wall Street Journal New Shell CEO faces big dilemma: Should the company pump more oil?
E&E News Deep freeze and data concerns test Southeast power market
Calendar
WEDNESDAY | MARCH 29
9:30 a.m. The Senate Appropriations Committee’s Subcommittee on Interior, Environment, and Related Agencies will hold a hearing on the president’s FY 2024 budget request with testimony from Secretary Deb Haaland.
