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DEBT CEILING SHOWDOWN: The Office of Management and Budget this morning issued a veto threat for the GOP debt ceiling bill planned to move this week, which would of course repeal much of the Inflation Reduction Act.
The OMB said the measure would “repeal tax credits from the Inflation Reduction Act that are leading to hundreds of billions of dollars in private-sector investment in the United States, creating thousands of manufacturing jobs” and “increase energy bills for families, while also increasing pollution.”
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MANCHIN SAYS HE WOULD REPEAL IRA: Sen. Joe Manchin said he would vote to repeal his own bill if the Biden administration continues to “liberalize” implementation of the IRA.
The escalation, which has been building for months but reached new heights over the last week in conjunction with movement around raising the debt ceiling, now has Manchin creeping to the side of the Republicans, who have themselves proposed repealing much of the IRA to reduce spending.
The IRA was scored to spend nearly $400 billion over the next 10 years via its clean energy and climate change-related provisions. The way things are going, the administration’s implementation of the law may “blow that out of the water,” Manchin told Fox News’s Sean Hannity last night.
A recent estimate by Goldman Sachs suggests the law could cost as much as $1.2 trillion.
The implementation of the EV tax credit provision has been a particular sore spot for Manchin. The new rules, with its expansive definitions, threaten to make the law a “budget buster,” Manchin said during the Senate ENR budget hearing last week featuring Granholm.
More on the politics: Manchin, whose seat is up for reelection next year, has been hammered by Republicans for writing and voting for the IRA. One of his primary defenses for the bill was that it makes the U.S. more energy-secure, not only by enabling clean energy to be built out but also by facilitating more oil and gas leasing on federal lands.
But he now sees his other leading defense, that the law will reduce the deficit, being undercut.
GRANHOLM BACKS MVP, TRIGGERING PIPELINE’S OPPONENTS: Secretary Jennifer Granholm’s endorsement of Mountain Valley Pipeline set off interest groups that have been racking up victories against the natural gas line in hopes of killing it.
The letter, which Granholm wrote to FERC’s commissioners on Friday, said gas and related infrastructure can “play an important role as part of the clean energy transition” and requested that FERC move “expeditiously” to issue any authorizations for the project that might come up (There are no such decisions before the commission currently.)
Appalachian Voices, a plaintiff to litigation against MVP, said the Biden administration is stepping on its own feet and that Granholm’s letter was a needless insertion into the process.
“The Department of Energy’s decision to insert itself into the FERC process for Mountain Valley Pipeline, a project that has repeatedly failed to meet environmental standards, fails to appreciate the consequences for the environmental justice communities along the path of the pipeline,” said Tom Cormons, executive director of Appalachian Voices.
Some key words: Granholm’s letter had some key qualifying language to make sure it aligned with the administration’s clean energy agenda. Natural gas is particularly useful for the energy transition when paired with carbon capture, she said, and the pipeline has the ability to improve energy security, a leading concern for the administration after last year’s wave of high prices.
Just doing what the Europeans do: A big sell for the authorization of new gas infrastructure in Europe is that new systems can be used for transporting hydrogen when hydrogen’s day comes. Granholm made the same case in her letter.
Not entirely new for Granholm: Granholm said during her remarks at CERAWeek that “even the boldest projections for clean energy deployment” show that “we’ll be using abated fossil fuels” when 2050 arrives. The U.S. needs traditional and new energy, she said.
With those remarks, and the White House’s larger campaign to see oil production and exports of liquefied natural gas increased, the Biden administration had already been adding a bit more distance between itself and interest groups that would end the extraction of fossil fuels today.
The Biden administration had already effectively gone on record endorsing MVP by backing Manchin’s Building American Energy Security Act of 2022 — or, at the very least, accepting MVP as a condition of larger energy permitting reform.
Manchin’s bill, which he said last week he plans to revive, would unilaterally approve the project over and against any outstanding litigation or federal authorizations, much like the Inflation Reduction Act reinstated Lease Sale 257.
BOEM PROBES INTEREST IN NEW OFFSHORE WIND BLOCKS IN NEW ENGLAND: The Bureau of Ocean Energy Management announced a new call for nominations to gauge commercial interest in developing wind resources off the coasts of Massachusetts, New Hampshire, and Maine.
Offshore Massachusetts, where developers are currently constructing Vineyard Wind, planned to come online later this year as the first commercial-scale project in the U.S., represents much of the current active offshore wind activity. Maine and New Hampshire remain virtually untouched.
The Biden administration is particularly interested in developing coastal Maine’s deepwater wind resources. Maine is one of a handful of Outer Continental Shelf locations where the administration says nascent floating wind technologies could be a good fit.
LPO REPORT SHOWS ENERGY DEPARTMENT’S BIG NUCLEAR BET: The Department of Energy’s Loan Programs Office has closed more than $36 billion in loans and loan guarantees across its four loan programs for technologies to decarbonize the economy, according to a new report the LPO put out yesterday.
The biggest winner is nuclear, which is the office’s no. 1 sector based on exposure.
Dollars for nuclear have been channeled to advanced and legacy nuclear technologies. LPO has issued $12 billion in loans for the expansion of Plant Vogtle, which will be the largest clean energy generator in the United States once its two new units come online.
GM TO END PRODUCTION OF THE CHEVY BOLT THIS YEAR: GM plans to discontinue production of the Chevy Bolt by the end of this year, CEO Mary Barra said today.
The Bolt was one of the earliest mass-market U.S. EVs and GM is producing and selling record amounts. It’s also one of the few models eligible now for the full tax credits under the IRA.
But it uses an older battery and GM said it planned to ramp up production of models based on its new Ultium battery platform, especially electric trucks and SUVs.
The Rundown
Financial Times Only 10 carmakers will survive global EV battle, says Tesla rival Xpeng
Wall Street Journal Tech billionaires bet on fusion as holy grail for business
