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TRICKY POLITICS FOR SOLAR CRA RESOLUTION: House Ways and Means will take up the chamber’s next Congressional Review Act resolution this week, which is expected to ultimately bring another bipartisan reprimand of President Joe Biden for his solar energy emergency — this one with an even wider margin than the ESG or WOTUS resolutions.
The solar CRA resolution, led by Democratic Rep. Dan Kildee and Republican Rep. Bill Posey, deals indirectly with the issue of China and its competitive advantage against U.S. manufacturers, drawing its rhetorical strength from the Commerce Department’s finding that China-based manufacturers are circumventing tariffs that are designed to level the playing field between them and U.S. manufacturers.
Opponents of the resolution include leading clean energy trade groups and a number of Democrats from western states where solar project development is biggest, who’ve made the argument that Commerce effectively changed the rules out from under industry with its determination and that tariffs are injurious to national climate goals.
Will that argument be enough? Opponents have a task in convincing members to oppose the CRA resolution, which comes at a time when hawkish sentiment against China is at a seeming peak.
The Wednesday markup was scheduled during a particularly China-centric week for the committee:
- The W&M Trade Subcommittee is holding a hearing tomorrow titled “Countering China’s Trade and Investment Agenda: Opportunities for American Leadership”
- After the markup on Wednesday, the full committee will hear from witnesses in a hearing titled “U.S. Tax Code Subsidizing Green Corporate Handouts and the Chinese Communist Party”
China looms extremely large in the greater political context, especially where supply chains for solar panels, electric vehicles, and all the rest are concerned.
The Biden administration has expressed support for breaking the reliance on Chinese manufacturing and building more things at home, although Biden’s use of emergency trade powers at issue in the resolution was premised on the need for a “bridge” to keep solar cells and modules flowing while manufacturing capacity expands domestically.
As for the vote, and the politics around it, a “no” vote might be seen as going soft on China, which Commerce already said is flouting U.S. trade law. A “yes,” though, represents a stand against Biden, something more difficult for rank-and-file Democrats to abide.
“I think generally this is a vote folks wish they could avoid,” said one solar industry source advocating that members oppose the resolution, who said the merits of Biden’s tariff moratorium aren’t being fairly considered because of the drive to do something to the broader China competitiveness issue.
“There’s a general concern about U.S. supply chains, which is a good and righteous concern, and also a lot of concern as evidenced by the committee on China competitiveness … around the role that the Chinese government plays in national security,” the person said. “I think it’s getting conflated.”
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G-7 ‘GREEN TRANSFORMATION’ KEEPS ROOM FOR NATURAL GAS: G-7 nations pledged to oversee a “green transformation” in their wide-ranging communique published over the weekend, which set up a new renewable energy target to include an increase in offshore wind capacity of 150 gigawatts by 2030.
It was one of many highlights to come out of the document, the product of weeks of negotiations that reapproved an earlier commitment to achieving at least a “predominantly decarbonized” power sector by 2035 but left the door open to new investment in the gas sector in light of the energy crisis brought on by the war in Ukraine.
Environmental interests had lobbied strongly against positive language on gas, and a number of groups expressed disappointment in the communique’s position that investment in the gas sector “can be appropriate to help address potential market shortfalls provoked by the crisis” so long as it’s “implemented in a manner consistent with our climate objectives and without creating lock-in effects.”
The price crisis: The communique opened its gas investment section with a recognition that high prices challenged the globe last year, especially developing nations, and helped drive up coal consumption and strengthen its viability despite initiatives to phase it out.
Pakistan, for example, resolved earlier this year to exponentially increase coal-fired power generation and strategically abandon new gas generation because of high prices globally, a function of the post-invasion LNG rush.
It’s a major challenge for the wealthy G-7 and members’ ambitious climate change agendas: They want to secure LNG to reduce their emissions from coal and improve energy security but are pricing out poorer developing nations, which is driving them back to coal.
The communique puts forward financing commitments to help developing countries scale up clean energy, but those countries aren’t necessarily seeing enough in the way of monetary assistance to draw them away from plans to expand fossil fuel use, according to Alden Meyer, a senior associate at environmental think tank E3G.
“They’re trying to hold a hand out to developing countries and say both that we think you need to do more to raise your ambition … and we’re willing to help you with some financing support, with technology cooperation,” Meyer told Jeremy.
“The problem there is, if you’re a developing country, you don’t see enough on the table in those areas and you’re being affected by the same economic forces of energy [prices], food insecurity, inflation, the debt crisis for many of these countries” he said.
Another word on coal: Members again did not reach an agreement to phase out unabated coal-fired power by any specific year but said they would take steps in that direction, urging other countries to do the same.
Coal generation in the U.S. is retiring fast, and the Biden administration has sought to accelerate the process with multiple new regulations expected to result in additional closures. Additional standards for regulating greenhouse gas emissions from power plants are expected to be proposed this month.
But the U.S. delegation is not ready to put a firm date on things just yet, Meyer noted, without knowing it can follow through. For one, there are questions about the extent of the administration’s legal authorities.
There’s also a certain coal-state Democrat who would not find a commitment to phasing out coal helpful, he added — one who’s up for reelection next year, and one who’s constantly at odds with the administration while being asked whether he intends to change parties.
A Kerry on top: Climate envoy John Kerry, who attended the ministerial alongside Energy Secretary Jennifer Granholm, famously declared the U.S. would not have coal plants by the time 2030 rolls around.
Kerry, in an interview about the summit’s conclusions over the weekend, said the talks were constructive overall, but there was a shred of disappointment in his voice.
Energy security as a concern is “being exaggerated in some cases,” he said, the bigger problem being emissions.
…G-7 nations also agreed to keep the Russian crude oil cap unchanged at $60 per barrel, sources familiar with the discussions told Reuters. That decision is sure to please the Biden administration, which has led the push to keep the Russian oil price cap unchanged, despite rising global crude prices, as as well as ongoing confusion as to how much crude oil Russia is keeping on the market — or whether Moscow is selling its volumes in compliance with the G-7-backed cap.
Those doubts had sparked an effort by some coalition countries to lower the capped price by as much as half, to $30 per barrel — something the U.S. has strongly resisted.
BAVARIA TRIES TO KEEP NUCLEAR PLANT ALIVE: Leaders in Bavaria are seeking to keep the region’s Isar II nuclear power plant alive after operations were shuttered over the weekend, Euractiv reported.
Conservative Prime Minister Marcus Soder had been critical of the government’s decision to retire the plants and wants to keep the plant functional. The long-shot effort would require authorization from the federal government, which the environment ministry has already rejected.
“As long as the crisis is not over and the transition to renewables is not successfully concluded, we need to use any type of energy available until the end of the decade,” Soder said over the weekend.
Contrast within the G-7: Representatives from Canada, Japan, France, and the U.S. and U.K. — the “G-5,” Granholm joked — released a strategic statement yesterday detailing intent to collaborate on nuclear energy, especially fuel acquisition, in order to blunt Russia’s influence there as a strong supplier.
National nuclear industry groups from the five nations also signed a joint declaration calling on the G-7 (and effectively calling out the Group’s two outliers, Italy and Germany) to embrace nuclear energy for all its emissions and technical benefits. It was the first-ever such industry forum of any kind to be held at the G-7.
Granhom said Japan’s turnabout on nuclear shows the generation source’s merits to be part of national energy strategies. Japan’s target is to raise nuclear to make up 25% of the nation’s generation mix by 2030.
PENTAGON RAISES CONCERN ON MID-ATLANTIC OFFSHORE WIND PROJECTS: The Pentagon is raising concerns about the Biden administration’s planned offshore wind project locations in the mid-Atlantic, citing the areas as “highly problematic” in a threat to Biden’s larger goal of reaching 30 GW of offshore wind power by 2030.
The areas in question include real estate off the coasts of North Carolina, Delaware, Virginia, and Maryland, according to documents reported by Bloomberg—all sites that were earmarked for offshore leasing by DOI last year.
The Pentagon has cited concerns with its ability to operate around the turbines, noting that the installations would be located near several of its facilities, including the Dare County bombing range in North Carolina and a Yorktown, Virginia weapons station. Per Bloomberg, the areas deemed highest concern by DOD span a “large portion” of potential lease areas off the coasts of Maryland and North Carolina. (Neither DOD nor BOEM responded to requests for comment.)
Past is prologue: The clash is reminiscent of 2010, when the two agencies went head-to-head over a proposed offshore oil leasing site near Virginia. The Defense Department concerns ultimately helped derail the plans—and similarly, their objections over the offshore wind locations are causing industry jitters. It will certainly be an area to watch…
RUSSIA’S OIL OUTPUT CUTS CALLED INTO QUESTION, AGAIN: Russian seaborne oil exports jumped back above the 3 million barrels per day threshold in the week ending April 14, calling into question whether the country has actually followed through on its vow to slash oil production through the end of 2023.
Volumes rose by roughly 540,000 bpd in the last seven-day period, according to ship-tracking data, and ship-to-ship transfers off the Spanish coast of Ceuta and Greek coast of Kalamata also appear to corroborate the increase in seaborne exports.
…Meanwhile, ship-tracking data compiled by Bloomberg also shows more than 730,000 barrels of Russian crude oil was switched this weekend onto a giant crude “supertanker” north of the Cape Verde islands in the Atlantic Ocean–– marking yet another potential hotspot for ship-to-ship transfers to be conducted as Moscow seeks to ship its oil and petroleum products beyond the reach of the G-7-backed oil price cap.
This transfer, which took roughly 35 hours to complete, is new––since up until now, almost all of Russia’s crude transfers have been conducted off the Ceuta and Kalamata coasts. It also marks the first time this year that such a transfer was recorded in the Atlantic Ocean, likely due to the higher concentration of Western shipping services in the area. Read more from Bloomberg here.
The Rundown
Wall Street Journal U.S., allies weigh how to reduce economic ties with China
Reuters California’s port truck-charging plan gets a jolt from big investors
Bloomberg Lithium in China may be bottoming as low margins hit producers
