Daily on Energy: Industry to broach the topic of carbon pricing with Congress

“We felt it was the time … to rally” and “have a call to action,” said Anne Kelly, head of government relations for CERES, a group that represents industry on environmental policy, which is organizing the fly-in advocacy push on “carbon pricing.”

Big energy firms like BP and Shell will participate in the two-day event that begins Tuesday, as well as mining firms BHP and major utility companies like PSEG and National Grid. They will be joined by major firms from the technology and retail sectors. Kelly said the full list of participants will be released on Monday.

Kelly said that the industry is “laying the groundwork for a debate in the coming years.” Congress isn’t there yet, but companies want to show that they think a carbon tax is the right path to take.

A carbon tax is viewed as the simplest and most economic way to address greenhouse gas emissions by applying a per-ton fee for large emitters like power plants and refineries.

How high the per-ton tax is will likely determine the level of support for the measure. But Kelly said the industry will not be getting into that level of detail. Those talks are likely years away.

She said the goal is not to pick one specific method of enacting a carbon tax — as there are a variety of schemes floating around — but to begin the debate toward a “long-term, bipartisan solution.”

“I think everyone is sincere in trying to figure out a way to address this issue without bankrupting yourself,” said Stephen Brown, former vice president for policy for refinery giant Andeavor, who now serves as a private consultant.

“The question is how much time you have to get on top of this and what’s the direction you should be going in,” he added.

He says there is “breathing room” now to have conversations on the best policy.

Large industry groups like the American Petroleum Institute and the American Fuels and Petrochemical Manufacturers aren’t expected to be part of next week’s conversation.

Shell, which will be part of the conversation, recently left AFPM over disagreements stemming from climate policy.

An API spokesperson said the group will focus on its “world class safety and sustainability standards” when asked how it is engaging on climate change. The spokesperson would not say where the trade group stands on specific climate policies.

The electric utility industry is a little more open in discussing climate policy. The Edison Electric Institute, representing the investor-owned utility industry, will address climate change and the Green New Deal head on at an annual industry conference early next month in Philadelphia.

The top issue on the conference’s agenda that was released this week includes a discussion on the Green New Deal that asks whether it is “Visionary or Fantasy.”

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LANDMARK HEARING EXPOSES CLIMATE CHANGE GULF BETWEEN PARTIES: A landmark House Ways and Means Committee hearing Wednesday, the first focused on climate change in a dozen years, illuminated the gulf between Democrats and Republicans.

Republicans have undergone a shift in recent months in saying that climate change is a problem worth addressing. But Republican committee members threw cold water on a carbon tax, a measure many climate hawks and economists view as essential.

Rep. Tom Reed of New York, perhaps the committee’s most centrist Republican, echoed ranking member Kevin Brady’s opposition to carbon pricing, regulation, or mandates.

“I am a proud Republican that recognizes the issue of climate change needs to be addressed,” said Reed, who co-chairs the Problem Solvers Caucus. “You can mandate emissions relief and say we are going to do this, but if you don’t have the technology in order to do that, isn’t that a paper tiger?”

Reed prefers tweaks to the tax code. He plans to soon introduce legislation that would provide new “technology-neutral” tax credits that reward clean energy sources.

‘Happy talk’ in insufficient, Democrats say: But committee Democrats argued innovation would fall short unless coupled with a more aggressive policy, such as carbon pricing, that forces companies to invest in clean energy technologies.

“I listened to ranking member Brady’s happy talk about progress,” said Rep. Earl Blumenauer, D-Ore. “There was no acknowledgment about the terrible [climate change] impacts that are getting worse, and the Trump administration’s concerted effort to make it even worse. So you think we can innovate our way out of this? We are on a path that is going to be very grim.”

MANCHIN, MURKOWSKI URGE FOR CONGRESS TO ‘PUT MONEY WHERE MOUTHS ARE’ ON CARBON CAPTURE: Sens. Lisa Murkowski, R-Alaska, and Joe Manchin, D-W.V., called on Congress Thursday to support their legislation authorizing hundreds of millions of dollars to expand research and development of carbon capture technologies.

Carbon capture has emerged as a response to climate change that has bipartisan support.

“But we have got to put our money where our mouths are and enact strong, supportive legislation,” said Manchin, at a Energy and Natural Resources Committee hearing. “There should be no downside to supporting and accelerating [carbon capture] deployment on a large scale no matter where you are coming from on the political spectrum.”

Manchin, the committee’s top Democrat, and Murkowski, the chairwoman, focused the hearing on their bill introduced last month, the Enhancing Fossil Fuel Energy Carbon Technology Act of 2019.

What the bill would do: The legislation would create four new Energy Department carbon capture research and development programs.

One program would focus on lowering costs and improving efficiency and effectiveness of carbon capture and storage on coal and natural gas plants. Another would boost efforts to commercialize the captured carbon for other uses. A third program would center on improving carbon capture for alternative uses, such as for industrial plants.

And the bill also creates a carbon removal program to aid “direct air capture” technologies being developed to remove carbon directly from the atmosphere.

“We need to think of all the ways we can skin this cat,” Manchin said. “Removing CO2 from the ambient air is one of those things. This is the moonshot and we need to get behind it right now.”

Witness says it’s not enough: Julio Friedmann, a witness at the hearing who researches carbon capture at Columbia University, noted the technology is “essential to achieve climate targets” laid out by the United Nations and others.

While he asserted carbon capture is not “untested,” with 18 projects currently operational in the world, “given today’s technology” the U.S. doesn’t have the means to deploy it at a scale needed to meet emissions reduction targets.

“Innovation alone will not bring these kinds of technologies to market,” he said, also calling for improving infrastructure to transport the carbon to where it can be sold.

FERC TAKES ACTION ON LNG AND ENERGY STORAGE: The Federal Energy Regulatory Commission on Thursday approved the expansion of the Freeport liquefied natural gas export terminal in Texas.

FERC Chairman Neil Chatterjee managed to get Democrat Commissioner Cheryl LaFleur to vote in favor of the LNG facility’s expansion, while fellow Democrat Richard Glick opposed it for not adequately addressing climate change.

Glick said he disagreed with the Republican chairman’s opinion that FERC does not have the authority to more thoroughly address the climate impacts from approving the export facilities.

LaFleur continues to advocate for an approach that could be easily added to FERC’s existing environmental review process to account for the emissions from LNG.

FERC also approved an order to take another look at policies to address energy storage. Energy storage is seen as critical to adding more renewables like wind and solar to the grid.

JAY INSLEE PROPOSES $9T CLEAN ENERGY JOBS AND INFRASTRUCTURE PLAN: Democratic presidential candidate Jay Inslee released a clean energy plan Thursday that he says would create 8 million jobs in a decade while transitioning the economy away from fossil fuels to combat climate change.

His “Evergreen Economy Plan” calls for at least $300 billion in annual federal government spending over a decade to mobilize another $600 billion each year, totaling a $9 trillion investment, on clean energy research and development, green transportation infrastructure, job-training programs, and affordable housing.

The economic plan is the second component of Inslee’s multifaceted climate agenda that has an overarching goal of making the U.S. achieve net-zero emissions, across all economic sectors, “as fast as possible, and by no later than 2045.”

Inslee released the first part of the agenda this month, which would put the U.S. on a path to having all “clean, renewable and zero-emission” electricity by 2035, with a goal of closing all the country’s coal plants by 2030.

Get all the details of the economic plan here.

HOUSE DEMOCRATS INTRODUCE CLIMATE-FOCUSED INFRASTRUCTURE BILL: House Democrats in the energy committee released an infrastructure bill on Wednesday focused on combating climate change that would dedicate tens of billions of dollars to renewable energy and energy efficiency.

More than $33 billion would go to clean energy, including $8 billion for grid upgrades to accommodate and expand the use of more renewable energy. More than $2 billion would be used to install solar panels in low-income and underserved neighborhoods and communities.

The bill, the LIFT America Act, also includes $23 billion to make energy efficiency improvements in homes, schools, and other buildings to ensure they produce less greenhouse gas emissions that contribute to global warming. The money will also be used to fund the “nationwide deployment” of cleaner fuels that can be used to heat homes and businesses.

ELIZABETH WARREN RELEASES CLIMATE CHANGE PLAN FOR THE MILITARY: Fellow presidential candidate Elizabeth Warren released a plan Wednesday that would force the U.S. military to reach net-zero carbon emissions for its infrastructure and non-combat bases by 2030.

Her plan would create a dedicated source of funding to adapt military bases to make them resilient against the effects of climate change, like worse floods.

Warren, the Democratic Massachusetts senator, would also direct the defense secretary to appoint a senior official at the Pentagon and each of the military services to ensure the Defense Department is prioritizing climate change.

And she would spend billions of dollars on a new, 10-year research and development program focused on microgrids and advanced energy storage to help power military bases with cleaner energy.

PG&E CAUSES LARGEST CALIFORNIA’S DEADLIEST WILDFIRE, INVESTIGATORS SAY: The California Department of Forestry and Fire Protection said Wednesday that a PG&E transmission line ignited last year’s Camp Fire, which killed 85 people and destroyed the town of Paradise.

PG&E filed for bankruptcy protection in January as it potentially faces billions of dollars in liability claims for helping cause wildfires.

The utility, which supplies electricity to 16 million California residents, said it faces about $30 billion in potential liability, or legal damages, for the state’s record deadly wildfires in 2017 and 2018.

The Rundown

Reuters Tanker unloads Iranian fuel oil at China port after near five-month trek

Politico Cuomo administration rejects Williams pipeline

New York Times In flood-hit Midwest, mayors see climate change as a subject best avoided

Bloomberg Tesla fires sound alarms about safety of EV batteries

Calendar

THURSDAY | May 16

2 p.m., 1300 Pennsylvania Ave. NW. The United States Energy Association holds a briefing on “Significant Low-Cost Opportunities for carbon capture, utilization and storage (CCUS) Deployment.”

5:15 p.m., 1030 15th Street NW. The Atlantic Council holds a discussion with Patrick Pouyanne, CEO of TOTAL SA, on “the challenge and opportunity of climate change as a responsible energy major.”