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CLIMATE IN BIPARTISAN INFRASTRUCTURE FRAMEWORK: Liberal senators and activists are encouraging the Biden administration and Democrats to abandon bipartisan infrastructure talks picking up steam because they argue the framework in question does next to nothing to address climate change.
They also fear Democrats, whose full control of government could be fleeting, will only get one bite at the apple, and that the bipartisan effort could suck the wind out of a promised larger second bill pushed through reconciliation.
But as we learn more details about the framework, it’s become clear to us the measure does contain significant climate measures — even if its proponents aren’t in-your-face about it — and it embraces some of the core tenets of President Joe Biden’s American Jobs Plan.
What we think we know: Late last night, a two-page summary that is presumed to be an outline of the agreement leaked after it picked up the support of 11 more Republican senators, bringing the bipartisan total to 21, and giving it a new level of viability.
The bipartisan Senate plan, which still needs to be written into legislation, calls for around $974 billion in infrastructure spending over five years, including $579 billion in new spending.
It provides $15 billion for electric vehicle infrastructure, including charging, according to the leaked document, along with $73 billion for the power grid and $47 billion in funding for climate “resiliency” to protect coastlines from rising seas, among other things.
And it even matches one of Biden’s signature proposals to employ oil workers to plug leaking “orphan” oil and gas wells whose owners are either unknown or insolvent, providing $16 billion to establish such a program — the same amount the administration recommended.
“To say there is nothing in there for emissions reductions is an overstatement and not correct. It’s not just roads and bridges,” said Heather Reams, executive director of Citizens for Responsible Energy Solutions, a conservative clean energy group.
“I know environmentalists think because they have a trifecta they should try to get as much as they can get, but the margins are slim. The art of what’s possible is important here,” Reams told Josh.
More details we’ve learned: The leaked document only contains the top-line numbers associated with the clean energy and climate provisions, but other summaries of the framework circulating around town seen by Josh provided a bit more detail.
For example, the bipartisan group is looking to provide funding for a variety of demonstration projects approved as part of the large clean energy innovation legislative package approved at the end of last year.
These include projects to demonstrate new advanced nuclear reactor designs, grid-scale energy storage, and direct air capture.
It also provides funding for pipelines to transport captured carbon dioxide, and to support the creation of hydrogen infrastructure hubs.
The bipartisan group has also discussed ways to keep existing nuclear reactors online — another Biden priority.
Tricky politics for Democrats: Skeptics of the proposal will note the deal omits two of Biden’s largest initiatives — providing consumer rebates for EVs and enacting a clean electricity standard. It also doesn’t extend or expand any clean energy tax credits. Those bigger items, of course, could be tackled in a subsequent Democratic-only reconciliation bill. The question Biden and Democrats will have to weigh is whether achieving smaller wins now with Republicans would preclude them from going bigger later, if moderates such as Joe Manchin don’t want to do anything more.
Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Josh Siegel (@SiegelScribe) and Abby Smith (@AbbySmithDC). 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.
‘NO CLIMATE, NO DEAL’ CALLS GROW LOUDER: The biggest environmental groups in the country pressed congressional leaders in a letter yesterday to include aggressive climate provisions in any infrastructure bill.
We’re thinking their message is directed squarely at Senate Majority Leader Chuck Schumer and House Speaker Nancy Pelosi, though top Republicans Mitch McConnell and Kevin McCarthy were also sent the letter. Signing the letter were the CEOs of 11 major environmental groups, including the Natural Resources Defense Council, the Environmental Defense Fund, Sierra Club, and Center for American Progress.
“Our groups cannot support policies that continue to allow increases in the pollution that drives climate change or increases economic and environmental inequity for communities of color, indigenous, and low-wealth communities,” the groups wrote.
They said they will support “efforts that ensure transformational progress,” and the groups said it is critical that legislation put the United States on track to live up to Biden’s promise to reach a net-zero economy.
FERC TAKES EARLY STEPS TO ENCOURAGE MORE TRANSMISSION: The Federal Energy Regulatory commission is taking initial steps on long-promised efforts to ease the building of electric transmission lines critical to bringing more renewables onto the grid.
FERC, at its meeting today, voted to set up a federal-state task force to improve collaboration with states that play a key role in siting long interstate lines.
The task force will include FERC commissioners along with representatives from state utility regulators. It will meet for the first time in the fall, and could pave the way for federal support in states approving transmission lines, which often gets bogged down because of local opposition from people living near the planned power lines who might not necessarily benefit from the power transported through them.
“This is an early and foundational step to ensure we are fully engaged with our state partners,” said FERC Chairman Richard Glick, a Democrat who has emphasized transmission as a top priority. “In order to make real strides, we can’t have this discussion with just ourselves.”
Separately, FERC also approved a draft policy statement enabling states to enter into voluntary agreements to develop transmission and figure out how to pay for them. Assigning costs on who pays for transmission lines has long been a tricky challenge holding up projects.
“This serves as a reminder that this commission wants to encourage cost allocation and planning,” Glick said.
SENATE CONFIRMS BEAUDREAU AS INTERIOR’S NO. 2: The Senate confirmed Tommy Beaudreau to be deputy secretary of the Interior Department today by a wide 88-9 margin with plenty of Republican votes, given his moderate reputation from his prior stints at Interior in the Obama administration.
“He can serve as a voice of reason in an administration that is waging a war on American energy workers,” said Sen. John Barrasso of Wyoming, top Republican on the Energy Committee, in a floor speech yesterday, adding that Beaudreau understands “America’s need for an all of the above energy strategy,” including fossil fuels.
Beaudreau, however, committed in his confirmation hearing to carrying out the Biden administration’s agenda on “modernizing” the oil and gas leasing program to “address the climate crisis and achieve full value for taxpayers.”
Beadreau is best known for implementing reforms to the offshore and gas drilling program after the Deepwater Horizon spill in the Gulf of Mexico, and later oversaw onshore leasing at Interior. He was most recently an attorney representing clients in the energy industry, including renewable and oil and gas companies.
BIDEN CHALLENGES PUTIN ON CYBERATTACKS: Biden tried to turn the tables on Russian President Vladimir Putin yesterday by suggesting the country’s oil and gas infrastructure could be vulnerable to cyberattacks too.
Biden, after meeting with Putin in Geneva, said at a press conference that he gave the Russian leader a list of 16 examples of “critical infrastructure” (presumably including pipelines and power plants) and had made clear that if they were attacked, “we have significant cyber capabilities” and would respond “in a cyber way.”
The recent attack on the Colonial Pipeline that crippled gasoline supply across the Southeast was committed by a Russian criminal group.
“We’ll find out whether we have a cybersecurity arrangement that begins to bring some order,” Biden said. “Because, look, the countries that most are likely to be damaged — failure to do that — are the major countries. For example, when I talked about the pipeline that cyber hit for $5 million — that ransomware hit in the United States, I looked at him and I said, ‘Well, how would you feel if ransomware took on the pipelines from your oil fields?’ He said it would matter.”
IF AT FIRST YOU DON’T SUCCEED…PRICE CARBON: Democratic Sens. Sheldon Whitehouse of Rhode Island and Brian Schatz of Hawaii introduced carbon pricing legislation yesterday as proponents of the policy try to keep it alive in infrastructure discussions.
The Save Our Future Act, co-sponsored by five other Senate Democrats, would impose a carbon price beginning at $54/ton in 2023, rising 6% annually to adjust with inflation. It would also impose a fee on methane from oil and gas operations.
Whitehouse and Schatz, both climate hawks and long-time carbon pricing proponents, also aim to promote “environmental justice,” a key priority of liberal activists who prefer mandates and regulations.
Divvying up the revenue pot: Of the revenues raised through the emissions fees, $255 billion would support “energy affordability,” pollution reduction, business development, career training, and tribal assistance programs in areas exposed to polluting power plants. Another $120 billion would go to fossil fuel workers harmed by the bill, including wage replacement, health, retirement, and education benefits.
It would also provide direct checks to low- and middle-income families.
The bill picked up endorsements from environmental groups and labor, including the Utility Workers Union of America, Nature Conservancy, Environmental Defense Fund, National Wildlife Federation, American Sustainable Business Council, Citizens Climate Lobby.
MEANWHILE, OTHER DEMOCRATS RAMP UP CES PUSH: Sen. Tina Smith of Minnesota, escalated her push this morning for Democrats to include a clean electricity standard in infrastructure legislation, also a priority of the Biden administration.
Smith, who introduced CES legislation in 2019, has been leading the argument that a standard could be designed in a way that complies with strict budget rules that govern the reconciliation process. This morning, Smith released a one-page summary laying out the case for her approach and teasing that she hopes to improve upon her prior bill.
“A version of this bill could be passed through the Senate via budget reconciliation, which requires only a simple majority vote,” the summary states, emphasizing a standard is not a tax and “won’t impose massive costs on utilities that get passed on to customers.”
A RECORD YEAR: The United States consumed more renewable energy last year than ever before, with renewables reaching 12% of total U.S. energy consumption, the Energy Information Administration said yesterday.
In fact, renewable energy was the only source that saw increased consumption in 2020, as both fossil fuel and nuclear energy consumption declined amid the pandemic.
Breaking down the renewables consumption: Wind energy accounted for the biggest share of renewable energy consumed, at 26%, with hydropower and wood and waste energy (such as burning wood and biomass waste for fuel) each accounted for 22%. Biofuels accounted for 17% of renewable energy consumption, and solar energy made up 11%, according to the EIA’s data.
BIPARTISAN PUSH TO DIRECT OFFSHORE WIND REVENUE TO STATES: Sen. Bill Cassidy, a Louisiana Republican, and Whitehouse are teaming up to help send revenue from offshore wind leases to the states adjacent to where those projects are developed.
The bill, introduced today, would send 50% of the revenue from offshore wind leases to the states, which could then use the revenue to fund projects to restore their coastlines and protect coastal habitats. The legislation would also dedicate 37.5% of offshore wind revenues as a funding source for the National Oceans and Coastal Security Fund.
The revenue sharing idea is similar to the Gulf of Mexico Energy Security Act, or GOMESA, program, which sends royalties from oil and gas leases in the Gulf to four energy-producing states in that region, as well as conservation projects. Cassidy and Whitehouse’s bill would also amend the GOMESA program, including by increasing the revenue sharing to 50% and eliminating caps on the funding.
CORN-STATE DEMOCRATS PRESS BIDEN OFFICIALS ON RFS: Biden is finding himself in a similar position as former President Donald Trump on the Renewable Fuels Standard — caught between two factions of his party.
More than a dozen corn-state Democratic senators and lawmakers are pushing the Biden administration to reject calls from oil refiners for relief from the federal biofuels blending requirements. Those calls include pressure from close Biden allies and Delaware Democratic Sens. Tom Carper and Chris Coons, as well as labor unions, according to recent reporting from Reuters.
The corn-state Democrats, however, say relief for small oil refineries isn’t warranted because the EPA has “repeatedly determined” those refiners aren’t harmed by the RFS. The lawmakers also say offering relief to small oil refiners would contradict Biden’s ambitious climate goals.
“Exempting refiners of their obligations to blend biofuel would mean increased reliance on oil and more carbon emissions – a result this country cannot afford if we are to meet our new commitment under the Paris Agreement to reduce emissions by 50 – 52 percent by 2030,” they wrote in a letter yesterday to EPA Administrator Michael Regan and National Economic Council director Brian Deese.
SENATE CONFIRMS EPA WATER CHIEF: The Senate confirmed Radhika Fox to lead the EPA’s water office yesterday in a 55-43 vote, with six Republicans joining Democrats to confirm her.
Fox has already been leading the EPA’s water office in an acting capacity. As the EPA’s top water official, Fox will play a critical role in crafting the EPA’s latest definition of which waters are covered under federal protections, a long contentious issue.
The Biden administration announced earlier this month that it would seek to expand the scope of covered waters beyond the narrow definition set by the Trump administration. EPA Administrator Regan said the EPA and Army Corps had determined the Trump administration’s rule “is leading to significant environmental degradation.”
The Rundown
Politico Senate Democrats weigh $6T infrastructure bill, without GOP
New York Times Climate change batters the West before summer even begins
Washington Post Earth is now trapping an ‘unprecedented’ amount of heat, NASA says
Calendar
THURSDAY | JUNE 17
10 a.m. 366 Dirksen. The Senate Energy and Natural Resources Committee will hold a hearing to examine Biden’s fiscal 2022 budget request for the U.S. Forest Service.
