Daily on Energy: Permitting reform politics just got more interesting

The White House stakes its position with a solidly “all of the above” strategy favoring all energy sources, with some special carve-outs for natural gas of the sort that key administration allies staunchly oppose, and is ready to push its allies to moderate on the matter, adviser John Podesta said.

“We’re willing to take on some of our friends, in terms of pushing them hard to say we need to build things again in America,” Podesta said in an interview yesterday.

Not a total surprise: President Joe Biden gave his backing to the exact same text in December, and Energy Secretary Jennifer Granholm went out of her way to give her department’s support to the Mountain Valley Pipeline, the worst provision in Manchin’s bill in the eyes of the Senate Democrats who voted against it.

But other congressional Democrats are actively putting together legislation that at least in principle could serve Biden administration’s permitting aims and its climate change and environmental justice priorities with fewer compromises on language favoring fossil fuel projects.

A look at the House permitting draft: The House Sustainable Energy and Environment Coalition last week released a permitting discussion draft based on its November policy brief.

The rough draft proposes to create the role of environmental justice liaison at FERC to “consult with environmental justice communities impacted by the construction or operation” of FERC-authorized projects.

It would also provide funding for intervenors to help the public participate in and navigate the legal depths of FERC proceedings and require the provision of a community impact report for a given federal action under NEPA where it’s determined to have “potential to cause negative environmental or public health impacts on an environmental justice community.”

The House SEEC draft also includes some provisions akin to the NEPA review constraints put forward in Manchin’s text and in HR 1, in terms of capping the duration of environmental reviews, although it gives a lighter touch.

For example, the SEEC draft directs the Council on Environmental Quality to establish a method to determine the deadlines for environmental reviews and authorizations for major projects, but it does not put a number on the number of years an agency may take to perform an environmental assessment or EIS.

Another provision would facilitate more consultation with project developers during the review process.

“This is our attempt at finding pieces of both HR 1 and Manchin that we could build off of but that we revised with Democratic values in mind that we think could be politically palatable for Dems,” a House Democratic aide told Jeremy.

Still some fundamental disagreements: At the heart of this permitting reform dispute is whether rewriting NEPA and other laws, particularly in a way that puts firmer deadlines on agency review or constraints on litigation under those laws, reduces the strength of their environmental protections.

Podesta pledged at CERAWeek, where he spoke at length of the virtue in Manchin’s bill and the need for reforms in order to maximize the Inflation Reduction Act, that Biden “is never going to sign something that abandons rigorous scientific standards and doesn’t support environmental protection.”

But the remaining criticism among a number of Democrats is that Manchin’s bill, with its timelines and litigation limits, does exactly that.

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.

MORE FROM PODESTA: Podesta also downplayed estimates that the Inflation Reduction Act could end up being more expensive than it was originally scored.

Podesta, a leading marketer of the law, said what has Manchin concerned about the law “busting the budget” is actually a positive because it means more business.

“I think what he’s been pushing recently is the question that the bill is kind of overperforming, that he’s worried there’s more takeup than was anticipated,” Podesta said. “I think that’s success.”

Spending became really the only tool Democrats could use once Manchin took his stand against Build Back Better.

BBB sought to pepper the reconciliation package with some stricter regulations, perhaps most notably the clean electricity standard, which was cut in the final law.

A few, such as the methane fee, made it through, but the primary instrument was subsidies.

“We stopped asking the question whether we need to shut down and we started asking the question where do we need to invest in a clean energy future to decarbonize the energy system,” Podesta said in March.

SENATE TO TAKE UP CRA RESOLUTIONS ON SOLAR AND BIRDS: The Senate is set to vote later today on H.J. Res. 39, the Congressional Review Act resolution of disapproval that would cancel Biden’s moratorium protecting Asian solar imports from tariffs through next summer.

The House passed the resolution on Friday with support from a dozen Democrats and all but eight voting Republicans.

Manchin co-sponsored the resolution in the Senate, and Sen. Sherrod Brown, who alongside Sen. Bob Casey asked the administration to revoke Biden’s solar emergency, said he would vote in favor of it.

Senators will also vote on a CRA resolution led by Sen. Roger Marshall of Kansas to cancel the Fish and Wildlife Service’s endangered species designation for the lesser prairie-chicken, which ranges in the Midwest and in the Permian Basin within Texas and New Mexico.

NAVAJO COUNCIL VOTES TO OPPOSE CHACO CANYON WITHDRAWAL AND BUFFER: The Navajo Nation Council approved a resolution yesterday opposing the Biden administration’s proposed mineral withdrawal around Chaco Canyon National Historic Park and reversed its previous support for a five-mile buffer zone, a compromise it had proposed to Democratic lawmakers’ (including then-Rep. Deb Haaland) 2019 withdrawal legislation.

The background: The Interior Department proposed the mineral withdrawal in November 2021 to block covered lands from new mineral development, although the withdrawal was designed to limit the effect to existing land allottees around Chaco Canyon.

Interior also proposed a 10-mile buffer zone between the park and surrounding federal lands on which to ban new permits and leases for 20 years. Secretary Deb Haaland said the withdrawal was about preserving sacred land and passing on its rich cultural legacy to future generations.

Navajo leadership expressed deep concern that the withdrawal and buffer zone would cut off allottees from being able to put their land to use and earn royalties on oil and gas production on those lands.

The new resolution of opposition says the council is “concerned that any buffer zone, in addition to the withdrawal of public land, will have a detrimental impact to Navajo Nation allottees by preventing the development of new oil and gas resources on allotments as a result of the allotments being landlocked.”

NRSC ATTACKS MANCHIN OVER IRA: The National Republican Senatorial Committee released a new ad today attacking Manchin for his vote for the IRA and then subsequent suggestion that he would vote to repeal it if the administration doesn’t change course on implementation.

Manchin has not announced whether he is running for reelection in West Virginia and has fed speculation that he might instead mount a run for president. Still, Republicans are attacking him, including through an outside group allied with Mitch McConnell, over the IRA, trying to drive up his negative ratings and help pave the way for a Republican – like Rep. Alex Mooney or the recently declared Gov. Jim Justice. 

OIL PRICES DOWN SHARPLY: Oil prices have gone way down in the past few days, thanks to increased fears of weaker economic demand in China and in the U.S. Prices have declined despite OPEC+ production cuts and increased uncertainty about the effects of the war in Ukraine.

WTI was down about 4% to under $69 a barrel this morning.

Note: That’s at the lower end of the $67-$72 range that the Biden administration has said it is targeting for buying oil to restock the Strategic Petroleum Reserve.

In other oil news… Iran’s Islamic Revolutionary Guard Corps seized an oil tanker in the Strait of Hormuz early this morning, the U.S. Navy said.

This is the second time Iran has seized a foreign oil tanker this week after the Marshall Islands-flagged Advantage Sweet was taken after leaving Kuwait en route to Houston.

NEW YORK LEGISLATURE PASSES BAN ON NEW NATURAL GAS HOOKUPS: The New York legislature passed a budget last night that will ban natural gas hookups in most new buildings.

Existing hookups – and gas stoves – won’t be affected. And hospitals, critical infrastructure, and commercial food establishments, are exempt from the requirements.

Otherwise, though, the bill requires all-electric heating and cooking in new buildings shorter than seven stories by 2026.

New York is now the furthest along in terms of banning gas stoves. But bans are advancing all around the country, although they suffered a major setback at the hands of the 9th Circuit last month.

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