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!
GRAVES TALKS NEW TASK FORCE: Rep. Garret Graves of Louisiana, the chairman of House Republicans’ new climate change task force, is betting that promoting innovation to curb emissions without targeting fossil fuels will enable the GOP to win competitive oil- and gas-producing House districts won by Democrats in 2020.
Texas House seats secured by Reps. Lizzie Fletcher and Vincente Gonzalez, both of whom won re-election by about 3 percentage points, are among those being targeted by Republicans (the Wall Street Journal has a great rundown of the challenges facing these vulnerable Democrats).
These districts and others, Graves notes, also happen to be leaders in deploying carbon capture technology, one of the chief areas of focus for Republicans who are looking to demonstrate a commitment to cutting emissions without reducing fossil fuel use. The Biden administration, by contrast, is seeking to hasten the nation’s transition away from oil and gas to meet aggressive emission reduction goals.
“This administration’s policies on energy and climate are really ill-advised in many cases and not in America’s interest,” Graves told Josh in an interview yesterday. “There is no place this hits home more than a couple of Texas seats.”
“Some of the states that are leading the revolution to cleaner energy solutions will be most impacted by Biden’s policies, which seems counter intuitive,” added Graves, an obvious choice to lead the task force because he is already the ranking GOP member of the Democratic-led Select Committee on the Climate Crisis.
What’s this all about? The GOP’s “energy, climate, and conservation task force,” created by House Minority Leader Kevin McCarthy, is tasked with devising a policy agenda to address global warming should Republicans capture the House in the 2022 midterm elections.
McCarthy’s decision to launch a climate task force is part of his emphasis on overhauling the party’s climate change platform and messaging to compete with Democrats and the Biden administration.
“McCarthy has gotten the message they need a policy on climate to be competitive nationally,” George David Banks, the former chief Republican strategist on the Select Climate Crisis Committee, told Josh. “That is going to be helpful in competitive races and help them draw a contrast with Democrats.”
Republicans seem to be betting that by having a narrowly tailored agenda they can both pick off Democrats in oil and gas dependent districts offended by President Joe Biden’s policies while appeasing young and suburban voters who are concerned about the environment and climate change.
More from Graves below…
Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Josh Siegel (@SiegelScribe) and Abby Smith (@AbbySmithDC). Email email@example.com or firstname.lastname@example.org 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.
MORE FROM GRAVES: Graves spoke of the force’s goals as more than political, focusing on the merits of Republicans efforts to boost innovation in clean energy technologies, including carbon capture and smaller nuclear reactors, along with planting trees and spending on resilience measures.
“Our objective isn’t winning in 2022,” Graves said. “The objective is moving forward in a way that is in America’s interest and sustainable. Do I believe anyone that has any level of education would look at our agenda and what this administration is doing and choose ours? Yes I do.”
‘Green-washing’ perception: House Republicans, though, will be attacked by Democrats as being insincere if they don’t support more aggressive policies that scientists say are needed to avert the worst consequences of global warming.
Graves, as in our past conversations, dismissed carbon pricing and a clean electricity standard (the favored policy of the Biden administration).
He suggested Republicans remain skeptical of establishing an emissions reduction target. He said the Biden administration is selling a “false bill of goods” by aiming for a 50% greenhouse gas reduction by 2030 as part of the Paris Agreement.
“The current state of technology and consumer demand is not conducive to those types of targets,” Graves said.
With those challenges in mind, GOP. Rep. David McKinley of West Virginia, who was also named to McCarthy’s task force, recently introduced a bipartisan bill that would delay the imposition of a clean electricity standard after a decade of massive spending on clean energy R&D.
But Graves refused to say if the task force would endorse that measure, which McKinley is pushing as a “compromise” that would benefit utilities that crave “certainty” a federal standard would provide.
“There is a reason McCarthy put a task force together and didn’t just ordain a king,” Graves said.
‘BOTTOM LINES’ IN DEMOCRATS-ONLY BILL: White House national climate adviser Gina McCarthy listed renewable energy tax credits and a clean electricity standard when asked during a Punchbowl News event this morning what her “non-negotiables” are for a Democrats-only reconciliation bill.
“We do have some bottom lines,” McCarthy said, signaling the White House will fight to ensure some of its more aggressive climate proposals are centerpieces of the reconciliation bill. In addition to renewable energy tax credits and the clean electricity standard, McCarthy said she would “love to see” money to create a Civilian Climate Corps that would put young people to work restoring ecosystems and building climate resilience.
The $1.2 trillion bipartisan infrastructure deal excludes many of the most significant climate measures Biden proposed in his initial infrastructure plan, including nearly $300 billion in clean energy tax credits and a mandate that utilities achieve carbon-free power by 2035.
McCarthy, in her remarks, said that while the bipartisan deal is a “great infrastructure package,” it doesn’t do enough to drive the adoption of clean energy.
BIDEN UNVEILS MEASURES TO FIGHT WILDFIRES: The Biden administration announced several actions today expanding efforts to combat wildfires, including increased firefighter pay, amid scorching temperatures in the Pacific Northwest that are putting massive stress on infrastructure and public health.
The announcements come as Biden meets with a group of Western governors, top Cabinet officials, and utility executives to discuss how to prepare better for extreme conditions that scientists say climate change will make a new normal.
The backdrop of Biden’s meeting is an already-raging wildfire season and unprecedented extreme heat across the West, especially the Pacific Northwest.
As part of its efforts, the Biden administration is pledging to raise federal firefighter wages to at least $15 an hour, as well as offer bonuses to firefighters on the front lines, a senior administration official told reporters last night.
The Biden administration is also emphasizing preventative efforts. FEMA announced today that it is awarding $37 million to a wildfire mitigation project in Sonoma, California, as part of a larger grant program focused on preparing for extreme events, according to a White House fact sheet.
Nonetheless, scientists warn that in many ways, the U.S. is playing catch-up on preparedness by racing to react to natural disasters made more intense by climate change rather than giving full attention to preventive measures to reduce the severity.
RELATED…BIDEN JABS REPUBLICANS ON CLIMATE CHANGE: Biden took a shot at Republicans who are not acknowledging the role of climate change as temperatures in some Northwestern cities are 40 degrees above average
Touting the bipartisan infrastructure proposal during an event yesterday at the La Crosse Municipal Transit Utility in Wisconsin, Biden noted the spending package would help protect the nation’s “physical infrastructure from wildfires, floods, and other extreme weather.”
“Anybody ever turn on the news and see it’s 116 degrees in Portland, Oregon? 116 degrees,” the president added. “But don’t worry, there’s no global warming. Doesn’t exist. It’s a figment of our imagination. Seriously.”
DEMOCRATIC GOVERNORS HAIL BIDEN FOR LINKING WILDFIRES AND CLIMATE: “I’ve been waiting almost four and a half years for a president to say what you just said,” California Gov. Gavin Newsom told Biden this morning at the top of the meeting with Western governors about wildfires. “It’s profoundly important, every word you spoke.”
Newsom, along with Oregon Gov. Kate Brown, praised Biden for speaking about how climate change is making wildfires more intense, a linkage they noted was disputed during the Trump administration.
“We were engaged in a relationship with the federal government that was more like sparring partners, not working partners,” Newsom said, adding that Biden has an “opportunity to turn the page” on how the federal and state governments work together to fight wildfires.
Biden, during his remarks, stressed that the U.S. is “playing catch-up” on preparedness for extreme events like wildfires. He said he insisted on holding a wildfire briefing similar to the briefing presidents receive before hurricane season each year.
“This is an area that’s been under-resourced, but that’s going to change if we have anything to do with it,” Biden said of wildfire prevention and response, adding that climate change is making wildfire season “a year-round mission.”
HURDLES REMAIN FOR PENNEAST PIPELINE: The Supreme Court ruling enabling the developers of the $1 billion PennEast natural gas pipeline to seize New Jersey land to build the project might have cleared a major hurdle, but it does not mean all roads are clear for construction.
There are other legal avenues open to states opposing fossil fuel infrastructure that offer them “virtual veto authority” over pipelines through their jurisdiction, Glenn Schwartz, director of the energy policy service at Rapidan Energy Group, told Josh.
The most significant and known tool is Section 401 of the Clean Water Act, which requires a state-level certification that the project meets state water quality standards. The Trump Administration tried to roll back this discretion, but Biden has repealed that move.
PennEast isn’t out of the woods for three reasons. First, they are still waiting on a 401 certification from New Jersey and Gov. Phil Murphy, a Democrat, could press his agencies to reject that permit. Rapidan expects Murphy to slow-walk the permit, leading to more delays for PennEast.
Second, the SCOTUS decision now returns to the District Court to handle outstanding issues, including whether PennEast is even allowed to sue New Jersey, given 11th Amendment sovereign immunity.
Justice Neil Gorsuch flagged this issue in his dissent, Schwartz noted, and if the District Court follows his lead, the state lands could remain in New Jersey’s hands regardless of the SCOTUS ruling.
Meanwhile, the D.C. Circuit’s recent landmark decision, which found that affiliate precedent agreements between a natural gas pipeline operator and its affiliate alone are not sufficient to demonstrate demand for the project, could hinder PennEast and other projects going forward.
FERC makes decisions about pipelines based mostly on the economic need for the project, and whether developers have secured contracts with companies that want to use the pipeline to ship fuel, known as precedent agreements.
PennEast’s affiliate agreement that justified FERC’s permitting of the project could be reconsidered in light of the court ruling, Schwartz said.
US OIL DEMAND UP AGAIN: U.S. crude demand rose for the third straight week, the latest mark of recovery from the pandemic.
Oil consumption rose to 20.9 million barrels per day from 20.8 million barrels p/d the week prior, the Energy Information Administration reported this morning.
EIA also reported another massive oil stock draw of 6.7 million barrels, bringing U.S. WTI crude to $73.69 as of late this morning
The inventory relief, a signal of an easing of glut in the oil market, could provide another reason for the OPEC+ alliance to boost production further starting in August, with the group meeting tomorrow to decide on future steps (although there’s disagreement on how much output to unleash).
ANOTHER LIBERAL DEMAND: NO FOSSIL FUEL SUBSIDIES: More than 500 liberal groups released a letter yesterday calling on Democratic congressional leaders to end all fossil fuel subsidies through budget reconciliation.
Biden’s fiscal 2022 budget proposal aims to scrap 13 tax provisions specifically benefiting the fossil fuel industry in an effort to align the tax code with his aggressive climate regulatory agenda.
Activists led by Oil Change International, Sierra Club, Greenpeace USA, Friends of the Earth Action, and more, urged Biden and Democrats to fulfill that promise.
“We urge you to advocate for the elimination of fossil fuel subsidies and giveaways in any legislative package so that they no longer undermine the just transition to clean energy jobs and infrastructure that we need for our future,” the groups wrote.
TREASURY EXTENDS SAFE HARBOR FOR RENEWABLES: The Treasury Department and the IRS are giving renewable energy developers more wiggle room to recover from coronavirus-related delays, extending the time they have to finish constructing projects in order to qualify for federal tax incentives.
In a notice issued yesterday, the IRS extended the so-called “safe harbor” for renewable energy projects for which construction began between 2016 and 2019 from four years to six years. For projects where construction began in 2020, the IRS is extending the safe harbor from four years to five years. The IRS notice also provides greater flexibility to developers for how they demonstrate continuous work on the project over that time period (which is required to obtain the safe harbor).
The new IRS notice builds on action the Trump administration took last May to offer temporary relief to renewable energy developers suffering delays due to the pandemic. Renewable energy groups welcomed the Biden administration’s additional move.
“The COVID pandemic disrupted supply chains, created significant permitting delays and jeopardized the timely completion of many renewable projects,” said Gregory Wetstone, head of the American Council on Renewable Energy. “Today’s IRS notice aimed at mitigating those COVID-related impacts is a welcome development and will go a long way toward ensuring these important clean energy projects get done.”
CANADA ACCELERATES MOVE TO ZERO-EMISSION CARS: The Canadian government yesterday tightened its timeline for mandating that all passenger car sales must be zero-emissions by five years, to now target 2035.
The move brings the nation in line with goals the United Kingdom and California have set to phase out gas-powered car sales by 2035. Canadian officials say they will pursue incentives and regulations to move vehicle sales to zero-emissions, as well as set interim targets for 2025 and 2030.
Canada’s announcement could also put pressure on the United States. The Biden administration has so far shied away from setting a zero-emissions vehicle sales target nationwide, despite calls from many Democrats to do so, instead backing consumer rebates for electric vehicles and funding for charging infrastructure.
Canada’s vehicles strategy also includes working with the U.S. “to harmonize performance-based greenhouse gas regulations and greenhouse gas emissions standards,” said Jonathan Wilkinson, environment and climate change minister. The EPA and Transportation Department are poised to soon unveil a proposal for stricter fuel economy regulations in the U.S.
CALLING ON COMMITTEES TO INCREASE WITNESS DIVERSITY: The advocacy group Green 2.0 sent a letter to 15 Congressional committees today with jurisdiction over environmental and climate-related policy issues, calling on them to increase racial and ethnic representation among outside witnesses and experts testifying before them.
“Communities of color are the most affected by environmental injustices, yet some Congressional hearings occur with very little or no voices from the communities on the frontlines of the injustices,” said Andrés Jimenez, Green 2.0 executive director.
Green 2.0 cited some progress when the House Rules Committee approved an initiative this year that requires the Office of Diversity and Inclusion to develop a system to track the diversity of witnesses.
HIGH GAS PRICES AHEAD OF JULY 4: The average price for a gallon of gas in the U.S. has risen to $3.12, a price increase caused by higher oil prices due to the return of fuels consumption with the easing of the pandemic, while OPEC+ producers keep crude in the ground.
The price represents the highest price people have had to pay for gas ahead of the July 4 weekend since 2014, according to AAA.
The high prices come as AAA estimates over 43 million Americans will hit the road for the h
S&P Global Platts Sempra, Saudi Aramco unable to finalize supply agreement tied to Port Arthur LNG
Bloomberg Biggest China bank abandons $3 billion Zimbabwe coal plan
New York Times OPEC and allies hold the cards as prices and demand rise
Reuters US natural gas producers hope customers will pay more for ‘green gas’
WEDNESDAY | JUNE 30
1:30 p.m. The House Select Committee on the Climate Crisis will hold a remote hearing titled “Transportation Investments for Solving the Climate Crisis.