Subscribe today to the Washington Examiner magazine and get Washington Briefing: politics and policy stories that will keep you up to date with what’s going on in Washington. SUBSCRIBE NOW: Just $1.00 an issue!
U.S. AND E.U. DIVERGENCE ON NUCLEAR: The U.S. and European Union leaders are working on bridging some of their remaining divisions over their industrial policy and climate change mitigation policies. We should see by the end of this week how far apart they remain with Treasury’s impending guidance for the consumer clean vehicle tax credit.
The two agree on a lot, including the need to firm up natural gas supplies to thwart Russia’s influence, but they continue to splinter on the role of nuclear energy in their climate change mitigation strategies, notwithstanding strong support among the French and other member states for new and legacy technologies.
The point of departure: The Inflation Reduction Act offers a zero emissions nuclear power production credit for existing nuclear generators beginning in 2024 and running through 2032.
Separately, the law combines several existing tax credits for clean energy sources into one overarching clean energy tax credit that’s tech-neutral, making nuclear eligible alongside wind and solar.
The European Commission has charted a different path with the Net Zero Industry Act. The Act recognizes nuclear as a “net-zero technology” but does not list it among its “strategic” technologies, which receive special permitting and other privileges under the Act.
President Ursula von der Leyen indicated that in recent comments about the Act, stressing that “only the net-zero technologies that we deem strategic for the future – like solar panels, batteries and electrolysers, for example – have access to the full advantages and benefits.”
The Biden administration has recognized advanced nuclear among the key low-carbon solutions and is devoting billions to develop advanced reactors, beyond the suite of tax incentives Congress has extended.
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.
ANOTHER ORDER AGAINST BIDEN’S LEASING ‘STOP’: A federal judge enjoined the Biden administration from implementing a “stop” of new oil and gas leasing on public lands in North Dakota, although he declined the state’s request that the court order the Interior Department to carry out previously canceled lease sales.
North Dakota filed a complaint against the Bureau of Land Management in January and sought a preliminary injunction against the effective “pause” on new leasing that Biden ordered during his first week in office (an order that a separate federal court had already blocked), arguing BLM unlawfully canceled quarterly oil and gas lease sales in 2021 and 2022.
U.S. District Judge Daniel Traynor determined that the Mineral Leasing Act’s direction to Interior to hold lease sales “at least quarterly” where lands are available is “not overshadowed” by the secretary’s discretion over the program.
The order from Traynor, a Trump nominee, detailed the dearth of lease sales in North Dakota through Q2 2022, when BLM carried out its first onshore lease sales (including in North Dakota) since Biden entered office, and the subsequent lack of lease sales in Q3 and Q4 of last year.
The government asserted that where no quarterly lease sale occurred, there were no lands “available” and “eligible,” two conditions for leasing in the MLA.
Traynor’s order said with those determinations, Interior and BLM “effectively made those determinations over the course of seven quarters, thereby telling North Dakota it had no right to have federal lands leased within its borders.”
The Biden administration had restarted leasing in 2021 after District Judge Terry Doughty enjoined the leasing pause (which he later rebranded a “stop”; read about some of those details here) but has not carried out new onshore lease sales since last summer.
The IRA factor: But BLM is doing more now, engaging in scoping and planning sales over the next two quarters. The bureau has been citing leasing language in the Inflation Reduction Act for moving forward with the new lease sales.
HR1 GETS DEMOCRATIC SUPPORT: Democratic Rep. Vicente Gonzalez of Texas said this morning that he will vote for the Republican energy bill this week, saying it would help ensure reliable domestic energy production and reform the federal permitting process.
We are watching to see if other centrist Democrats support the measure – and whether centrist Republican Brian Fitzpatrick of Pennsylvania will vote in favor.
E.U. EXPLORING NEW LEGAL MEANS TO BLOCK RUSSIAN LNG IMPORTS: EU energy ministers agreed yesterday to a “security clause” that would allow member states to temporarily limit imports of gas and LNG from Belarus and Russia.
The proposal would enable member states on an individual basis to be able to “take proportionate measures to limit temporarily up-front bidding for capacity by any single network user at entry points and at LNG terminals.”
“Past evidence has also shown that gas may be used to weaponize and manipulate energy markets, for instance by hoarding capacities in gas infrastructure, to the detriment of the Union’s essential international security interests,” the proposed regulation said.
The proposal was developed to serve member states’ energy security where that involves reducing dependence on Russian fossil fuels, it said.
Gas imports to the EU transiting Belarus and those via Nord Stream 1 cratered to zero, although LNG imports from Russia increased and came in at no. 2 for the year behind the United States.
Energy Commissioner Kadri Simson has discouraged companies in Europe from signing LNG deals with Russia. Although the EU jumped to embargo coal imports after the war began, and now has restrictions and the price cap regime in place covering Russian petroleum imports, gas has been spared from sanctions all the while.
U.N. NET-ZERO ASSET ALLIANCE OPPOSES NEW OIL AND GAS: A United Nations-led global alliance of asset owners published a new position providing that members should not finance new oil and gas fields in order to keep on track toward the Paris agreement’s 1.5 degree target.
The Net-Zero Asset Owner Alliance issued a document today detailing its requirements for its 85 members, which together manage some $11 trillion in assets across the world. NZAOA includes mostly European members, such as the Church of England Pension Board and a handful of American investment funds, such as the David Rockefeller Fund.
The guidelines say no new oil fields should be financed, built, developed, or planned and that investment should be limited to existing oil fields, with the same strictures applying to new natural gas fields.
NZAOA’s guidelines also restrict financing of infrastructure projects for new upstream oil and gas fields, providing that any new financing be limited to existing fields, and provide that members must set emissions targets up through Scope 3.
Its new commitments are made with the expectation that national governments will do their own part under the Paris agreement, the document said, adding that this transition “must be done while respecting the delicate balance between the supply of fossil fuels, on the one hand, and society’s demand for affordable and reliable energy, on the other.”
A heightened focus on energy security in much of the world, especially the West, and recognition by public officials in the EU and the Biden administration that fossil fuels will be needed for decades, are sure to tempt the Alliance’s members to come off the sidelines. Oil and gas earned investors lots of money last year.
Other similar international, voluntary net-zero initiatives have faced some fracturing in recent months over pressures associated with traditional energy and ESG. Vanguard left the Net Zero Asset Managers initiative in December. It pulled out “so that we can provide the clarity our investors desire about the role of index funds and about how we think about material risks, including climate-related risks.”
MARYLAND LEADERS THWART EAST PALESTINE WASTE TREATMENT: Leaders in Baltimore and around Maryland are moving to block an effort to treat waste from the East Palestine train crash in the city.
Mayor Brandon Scott directed the city’s Department of Public Works to modify discharge permits for the Back River treatment facility to effectively block receipt and treatment of the waste.
Opponents included Republican and Democratic members in public office, some of whom said they lacked confidence that the facility, which suffered an explosion onsite two weeks ago, is prepared to manage the shipment of 675,000 gallons of contaminated wastewater, WTOP reported.
“No one trusts the aging sanitary sewer lines and the Back River Plant to successfully handle toxic water in a state remotely acceptable to run into the Chesapeake Bay,” said Kathy Szeliga, a Republican state delegate.
Nobody wants a part of the East Palestine waste. Other states have blocked or sought to block shipments, leading EPA Administrator Michael Regan to warn states against blocking transportation of waste or else transgress federal law, including the Constitution’s Commerce Clause.
NEWSOM CLAIMS TO HAVE BROUGHT BIG OIL TO ITS KNEES WITH NEW LAW: California Gov. Gavin Newsom said in signing anti-price gouging legislation that “We proved that we could actually beat Big Oil.”
“There’s a new sheriff in town in California, where we brought Big Oil to their knees,” he said yesterday, according to KTLA.
The measure, the first of its kind in the nation, creates a watchdog agency within the California Energy Commission to monitor oil and fuel markets. It will enable the commission to impose civil penalties on refiners charging above a “maximum allowable margin” for the price of gasoline.
The Rundown
Wall Street Journal Russia’s economy is starting to come undone
Bloomberg A climate vulnerable nation takes the world to court over emissions
The Hill Mexico is moving to power California and Arizona. But who will pay for it?
The Press Enterprise Refilling of Diamond Valley Lake near Hemet underway for first time in three years
Calendar
WEDNESDAY | MARCH 29
9:30 a.m. – 3:30 p.m. FERC will convene a roundtable to discuss environmental justice and equity in its jurisdictional infrastructure permitting processes.
