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CORN STATE CAUCUS BENDS GOP LEADERSHIP’S EAR: Iowa’s congressional delegation wouldn’t let House leadership’s debt ceiling bill fly as it was for one reason: Biofuels reign supreme in that state.
The four Republican lawmakers — Ashley Vinson, Mariannette Miller-Meeks, Zach Nunn, and Randy Feenstra — only came around to support the measure yesterday after it was amended to keep in place tax incentives that support the industry.
“These provisions directly impacted the economy of our entire state,” a senior Republican staffer from Iowa told Jeremy. “A lot of our questions [to leadership] were, find me another provision that affects an entire state’s GDP like these.”
“Some of the solar ones — there are members who have solar manufacturing plants in their district, we get that, but … we saw that and we said we have to lock arms,” the person said.
The debt ceiling package as it was introduced last week would have terminated tax incentives for the production of biodiesel, renewable diesel, and other biofuels which the Inflation Reduction Act extended, along with the suite of new or enhanced clean energy subsidies in the law.
Biofuels interests see carbon management as central to the competitiveness of liquid renewable fuels in a lower-carbon future. The bill also would have clipped the Democratic law’s modifications making the 45(Q) carbon sequestration credit more lucrative.
Dollars and cents: A recent analysis commissioned by the Iowa Renewable Fuels Association found that the biofuels industry in 2022 supported:
- $7.2 billion of the state’s GDP
- $3.5 billion of household income for Iowa households
- 57,000 jobs
The political strategy: The Republican debt ceiling package initially took aim at all the IRA’s tax credits despite GOP members’ support for many of the provisions.
It was a decision made, we were told, to avoid plucking out items in favor of certain constituencies in the conference and complicating the path to passage.
Leadership had also made the argument to concerned members that they and every other Republican had voted against the IRA and should therefore be able to support the debt ceiling bill’s repeals, the aide said.
But the Iowa delegation was successful in getting around that stance.
“That is a very weak argument. I didn’t vote against the IRA because it had these biodiesel, ethanol tax credits,” the aide said, mimicking members’ thinking.
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SENATE LIBERALS DIG IN AGAINST ‘ALL OF THE ABOVE’ IN PERMITTING: Permitting Reform 2.0 kicked off yesterday in the Environment and Public Works Committee, and liberal Democrats are doing all they can this time around to shape the effort up front and avoid a repeat of the Inflation Reduction Act, which saw them swallowing some big concessions on fossil fuels.
Republican and Democratic members picked up the issue where it was left off in December with the failure of Sen. Joe Manchin’s legislation, stressing the need for faster environmental reviews, more electric transmission, and the like.
But Sen. Jeff Merkley and some others resisted that brand of “all of the above” reform to ease regulatory burdens on fossil fuel project construction.
Doing permitting reform as “all of the above,” which characterized Manchin’s permitting bill, and which Manchin has said is the motif behind the IRA rather than its being a “climate bill,” undermines U.S. leadership on climate change mitigation and would make other nations think twice about cutting their emissions, Merkley said.
“I have witnessed how the rest of the world responds to that, saying, “Oh, you’re lobbying us to reduce coal in Indonesia, or change our policies in Vietnam, or stop importing coal from Australia to India … isn’t the United States proceeding to do a lot more fossil projects?’” he said.
He, along with EPW member Ed Markey and seven other Democrats, voted against Manchin’s bill in December even as other Democratic climate hawks voted in favor.
Markey has circulated permitting priorities of his own, which prioritize more electric transmission to clear the interconnection queues that are full of renewable energy projects and would seek to enable more community input under NEPA, rather than add timelines to those processes.
Merkley said transmission is his priority, too, and expressed little appetite to compromise on reforms favoring oil and gas.
“The point I’m making here is that increasing fossil fuel projects is a major catastrophe that cannot be undone by the next generation, because it’s going to be too late,” Merkley told Jeremy.
The rub: There’s lots of pro-fossil sentiment in the permitting reform mix. Manchin is reviving his bill from the last Congress, and EPW Ranking Member Shelley Moore Capito, as well as Energy and Natural Resources Ranking Member John Barrasso, are teeing up permitting reform bills of their own in the coming weeks.
Barrasso is big on oil and gas, and Capito’s counter proposal to Manchin’s initial permitting bill last year likewise sought to approve the Mountain Valley Pipeline.
The Biden administration has also grown more accepting of the need for additional oil and gas production since the war in Ukraine started, while still favoring clean energy resources over others.
That has driven a wedge between the administration and allies in Congress. Secretary Jennifer Granholm went out of her way last week to say her department supports the Mountain Valley Pipeline in a letter to FERC.
Merkley called the letter “completely misguided” and out of sync with science.
NJ REPUBLICAN TO TAKE WIND-WHALE PROBE ASK DIRECTLY TO GAO: Rep. Chris Smith and Natural Resources Chairman Bruce Westerman plan to ask the Government Accountability Office to investigate the sufficiency of federal agencies’ environmental review procedures in light of the recent deaths of marine mammals and other concerns about the proliferation of offshore wind facilities.
Smith’s amendment to H.R. 1 directing GAO to look into the issue passed with bipartisan support, but the Republican package isn’t going anywhere, Smith acknowledged, so he and Westerman are going to put in the request themselves.
Westerman is currently drafting the letter with Smith’s input, the New Jersey Republican told Jeremy yesterday.
Smith detailed the plan after a hearing of the House Natural Resources Energy and Mineral Resources subcommittee, featuring BOEM Director Liz Klein, where he and fellow New Jersey Republican Jeff Van Drew questioned Klein about the administration’s offshore wind goals and effects to wildlife.
Neither sits on the subcommittee but participated in the hearing.
SENATE APPROVES MEASURE TO CANCEL BIDEN VEHICLE RULE: The Senate approved another resolution of disapproval yesterday seeking to cancel the Biden administration’s heavy-duty vehicle emissions rule.
Manchin joined the chamber’s Republicans to approve the Congressional Review Act resolution, which Sen. Deb Fischer introduced in February.
Manchin also co-sponsored Sen. Rick Scott’s resolution of disapproval yesterday targeting President Joe Biden’s solar emergency. The chamber is expected to vote on the measure next week.
EU WINTER COAL DEMAND DROPPED DESPITE ENERGY CRISIS: The EU burned less coal this winter than previous years, a new analysis shows, despite its efforts to ditch Russian fossil fuels—apparently contradicting predictions that the bloc would rapidly ramp up its coal use to offset lost energy supplies.
Researchers from the think tank Ember found that, during the EU’s winter heating season, which lasts from October through March, coal generation dropped by a significant 11% compared to the previous winter. Meanwhile, gas generation also fell by 13%, due in large part to the EU’s effort to conserve resources and keep its storage tanks full.
The EU also massively increased its renewable energy power generation, which for the first time overtook fossil fuels’ share in the bloc’s power mix. Renewables made up 40% of EU power generation for the 2022-2023 winter heating season, compared to fossil fuels at a slightly lower 37%.
The drop in coal was also widespread: In total, 15 out of 18 countries in the bloc that still use coal for power reduced their consumption this winter compared to previous years. (Just Italy, Finland, and Hungary saw a rise in coal use.)
OPEC CHIEF WARNS IEA AGAINST DISCOURAGING OIL INVESTMENTS: The International Energy Agency should be “very careful” about discouraging investment in the oil industry, OPEC Secretary General Haitham Al Ghais said today, warning that such comments could add to further oil market volatility.
His remarks come one day after IEA chief Fatih Birol told Bloomberg that OPEC+ should be cautious about its production cuts, which he warned could push prices up and weaken the global economy. The group slashed production last month by 1.66 million barrels per month through the end of 2023, following another cut last fall.
But Al Ghais disputed Birol’s assertion, and said blaming oil prices for inflation was “erroneous and technically incorrect.”
“If anything will lead to future volatility it is the IEA’s repeated calls to stop investing in oil, knowing that all data-driven outlooks envisage the need for more of this precious commodity to fuel global economic growth and prosperity in the decades to come, especially in the developing world,” he said.
Al Ghais’s remarks are the latest in a months-long debate between IEA and OPEC+ over oil market demand. Saudi Arabia has blamed the IEA’s prediction on Russian oil output early last year for the Biden administration’s subsequent decision to sell off oil from its SPR stockpile.
RUBIO BLASTS GRANHOLM’S APPOINTMENT OF FORD LOBBYIST AS ADVISER: Sen. Marco Rubio blasted Energy Secretary Jennifer Granholm’s decision to tap Ford’s top EV lobbyist as a member of her advisory board, due to his role as the auto giant’s primary defender of its partnership with Chinese battery supplier CATL.
Rubio described Christopher Smith‘s new position on the Secretary of Energy Advisory Board in a statement yesterday as “deeply troubling but unsurprising.”
“By prioritizing the interests of corporations subservient to the Chinese Communist Party over the interests of hard-working Americans, the administration is once again showing its true colors,” Rubio told the Washington Examiner.
Smith will serve on the board for a two-year term, during which he will retain his current role as Ford’s head of government affairs.
The Rundown
Wall Street Journal Startups race to kill ‘forever chemicals’
Reuters Solar, EV firms say Republicans’ debt limit a ‘stunt’ that could cost jobs
Bloomberg Shipping has largely relied on one fuel. it now needs many: sparklines
