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!
THE PLAYERS: As the 117th Congress gets underway, climate and energy-related legislation is expected to get more attention than ever as President-elect Joe Biden has laid out aggressive emissions-cutting goals. Here are some key lawmakers to watch who will play roles in the upcoming legislative battles.
Mitch McConnell and Chuck Schumer (The agenda setters): Let’s start with the obvious ones. The results of the Georgia runoffs will tell us who sets the Senate’s legislative agenda and priorities. Schumer has allied himself with liberal climate activists, while McConnell, from the coal state of Kentucky, has long been the Democrats’ boogeyman. McConnell did quietly show at the end of last Congress he will let climate-related legislation pass if it’s pro-business, is backed by key members (Lisa Murkowski, we’ll get to you), and has consensus Republican support.
Joe Manchin (The swing vote Democrat): Manchin is the highest ranked Democrat on the Senate Energy Committee, whether he chairs it or not. His old school, deal-making approach to legislating is similar to Biden’s. And he happens to represent a major fossil fuel state, West Virginia, whose jobs he has long sought to protect even if it means shooting down Democrats’ climate plans (Yes, we know he was not literally responsible for the demise of cap-and-trade).
John Barrasso (The new Murkowski): Barrasso, another coal state (Wyoming) guy, will replace Murkowski as the top Republican on the Energy Committee. It will be interesting to see whether he and Manchin can work as productively as the Murkowski-Manchin pairing. Barrasso helped clinch a compromise that led to the HFC provision in the aforementioned year-end climate/clean energy package, and he’s a huge supporter of carbon capture and nuclear. But he’s more assertive than Murkowski in opposing “Green New Deal” style mandates and regulations.
Chris Coons (The Biden whisperer): Coons’ tight relationship with fellow Delawarean Biden is well-documented. Coons also co-chairs the bipartisan Senate Climate Solutions Caucus, and has worked with businesses to lobby Republican support for carbon pricing.
Murkowski, Mitt Romney, Susan Collins (The centrist Republicans): If Biden hopes to pick up Republican support for climate legislation without killing the filibuster, these are the key names to watch. Romney has indicated climate should be an area of focus for Republicans and has flirted with carbon pricing. Murkowski and Collins have a long record of promoting clean energy technologies and bucking their party leaders.
Reps. Kathy Castor and Garret Graves (The House guideposts): Castor and Graves lead the special select House climate committee, which returns for another session of Congress. The committee cannot write legislation, but it is expected to shape the policies coming out of the Democratically-controlled House committees. Their approach and rhetoric will also tell us a lot about where Speaker Nancy Pelosi and Republican leader Kevin McCarthy stand. McCarthy, in particular, supported an attempt by Graves and other Republicans to define a Republican climate agenda. Now that McCarthy is gunning to take back the House, and win the speakership he’s eyed since 2015, will he and Graves position Republicans on offense or defense?
Nancy Mace (The freshman to watch): Mace, a South Carolina freshman Republican who ran on her opposition to offshore drilling, is already signaling an independent, congenial path. After being sworn in yesterday, she thanked the Democrat she beat, Joe Cunnighnam, for helping with her transition.
While she touted environmental issues, Mace did not campaign as proactively on addressing climate change, but she looks to be a quick study.
AOC (The sophomore we can’t stop watching): Progressive sensation Rep. Alexandria Ocasio-Cortez isn’t going anywhere, even if Biden hasn’t exactly run with her Green New Deal mantle. Expect her to go after Biden, Pelosi, and Schumer (does she primary him?) if they aren’t fulfilling their promises.
Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Josh Siegel (@SiegelScribe) and Abby Smith (@AbbySmithDC). 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.
CLIMATE STAKES OF GEORGIA SENATE RUNOFFS: Democratic victories in Georgia this week won’t improve Biden’s odds of passing big climate legislation, even if it would improve the prospects for green infrastructure and clean energy stimulus spending.
Schumer taking the gavel from McConnell would enable Democrats to set the agenda (a big deal) and determine what gets a vote.
But with the tiniest majority (with seats split evenly between each party and Vice President-elect Kamala Harris acting as a tiebreaker) don’t expect measures like a clean electricity standard or carbon pricing to pass, Josh reports in a story posted Sunday.
“There is a massive difference between Mitch McConnell and Chuck Schumer setting the legislative agenda. Full stop,” said Paul Bledsoe, a former Senate Finance Committee staff member and climate change adviser in the Clinton administration.
“With that being said, Democrats still need to get 60 votes for their priorities, and there are real disagreements within their own caucus,” added Bledsoe, who is now with the Progressive Policy Institute. “Having the majority is the most important single thing, but it doesn’t solve all your problems.”
The math is tough with the filibuster around: Even if Biden were able to coax all 50 Democrats to vote for a clean electricity standard, for example, it won’t guarantee passage, because most bills would still need 60 votes under Senate rules. And those pre-election dreams of ending the filibuster look dim, even liberals acknowledge.
“Even if the Democrats win both seats in Georgia, legislation is still going to be very difficult in general,” said Brett Hartl, government affairs director at the Center for Biological Diversity, a liberal environmental group. “The game has been and will be executive action for the foreseeable future because Congress is pretty broken.”
Schumer is talking a big game though: Last week, he said he’d work with Biden’s nominee for Transportation secretary, Pete Buttigieg, to prioritize a “big, bold, and green infrastructure bill.” He also touted his “Clean Cars for America” plan that would replace all ICE vehicles by 2040.
“Infrastructure and other economic legislation with climate benefits is still very possible, if not probable, but climate-only bills are dead on arrival,” Bledsoe said.
A NEW YEAR, THE SAME OIL DEMAND QUESTIONS: OPEC+, the alliance of oil-producing nations led by Saudi Arabia and Russia, is expected to decide this week to hold off on increasing output for at least another month as the pandemic continues to cast a shadow on the recovery of demand for fuels.
OPEC+ is meeting again today after reaching a compromise deal last month to modestly increase their oil production by 500,000 barrels per day in January. Prices rose on the bullish news, since that production hike was much less than the 2 million barrels per day OPEC+ had been planning for January. But the group also agreed to a monthly reassessment after January to see if it should increase output more, or cut back again, creating uncertainty.
Oil analysts, however, expect OPEC+ to carry over its production target for another month as demand remains below normal.
“If the decision is to rise output from February, prices are bound to take a hit. At the moment though, expectations are for the opposite,” said Bjornar Tonhaugen, head of oil markets at Rystad Energy. “A confirmation that the group’s production will not rise will definitely strengthen the market sentiment and assist prices on their ascent.
OUTLOOK FOR PRODUCERS IMPROVES: Oil and gas activity in the Permian Basin “jumped” in the 4th quarter of 2020 and a growing number of companies recently polled by the Dallas Fed expect to increase capital spending this year.
Of 144 companies polled, 35% said they expect capital spending will slightly increase, while an additional 14% anticipate a significant increase, compared to 15% that expect their firm’s capital spending to decrease slightly, and 14% that anticipate it to decrease significantly. Twenty-three percent expect spending to remain near 2020 levels in 2021.
Layoffs “abated” at the end of last year, while overall employment continued to decline.
About those resulting emissions: Interestingly, as oil and gas producers prepare to get back to work, the vast majority of small producers have no plans to reduce emissions of carbon or methane.
For the smaller companies (defined as producing less than 10,000 barrels per day) 10% said they plan to reduce carbon emissions, 30% plan to reduce methane emissions, and 27% plan to reduce flaring.
Larger companies, unsurprisingly, say they are prioritizing reducing emissions, with half of them planning to reduce carbon and methane, and 63% aiming to reduce flaring.
Note: Perhaps this is why oil majors say they support legislation regulating emissions, while smaller counterparts don’t.
HEADS UP: EPA Administrator Andrew Wheeler is slated to share a “major announcement” tomorrow morning during a virtual event with the conservative Competitive Enterprise Institute. We’re watching for Wheeler to unveil the EPA’s final rule restricting the types of science the agency can use in policymaking to only that where the data can be made public.
The EPA’s final version of the rule cleared White House budget office review last week. Environmentalists and public health experts have sharply criticized the EPA’s plans, arguing the restrictions would undercut the EPA’s ability to set tighter pollution rules by keeping it from considering scientific studies that use human health data (which often must be kept private). Wheeler, however, has said the rule is meant to ensure there is greater transparency around the science the EPA uses to set pollution limits.
RENEWABLE PROJECTS GET MORE TIME TO QUALIFY FOR TAX CREDITS: The Treasury Department is extending the so-called “safe harbor” window for renewable energy projects offshore or on federal lands, according to guidance published last week. Those projects will be able to qualify for the wind and solar tax credits if they are placed into service within 10 years of beginning construction, the guidance said.
NEW BIPARTISAN CLIMATE BILL ON THE BLOCK: Reps. David McKinley and Kurt Schrader formally unveiled their bipartisan bill seeking to slash emissions from the power sector last week, in hopes to build support among Congress’ ranks in the new year.
The bill, which they’re calling the Clean Energy Future through Innovation Act of 2020, takes an “innovate first, regulate later” approach. The measure would massively scale up investments in research and development of clean energy technologies, including carbon capture, nuclear energy, wind, solar, and battery storage, through 2030. After that, regulation would kick in, requiring utilities to cut their emissions by 80% by 2050.
Their measure is receiving praise from a number of industry and environmental groups, such as the U.S. Chamber of Commerce, the United Mine Workers of America, the Center for Climate and Energy Solutions, and the National Wildlife Federation. Several utilities, including Duke Energy, American Electric Power, and Southern Company, are also backing the approach.
HAPPENING TODAY: FERC will officially have a 3-2 Republican majority after Mark Christie is sworn in this afternoon as the newest commissioner.
Christie had his swearing in delayed so he could finish up his work as chairman of the Virginia State Corporation Commission, the state’s electric utility regulator.
Commissioner Allison Clements, a Democrat nominated with Christie, was sworn in last month but declined to participate in votes during FERC’s December meeting before she could get up to speed.
They join incumbent Republicans James Danly and Neil Chatterjee and Democrat Richard Glick. Danly is the chairman for now, but Biden is expected to swap him with Glick or Clements, allowing Democrats to set the agenda.
EPA SETS FIRST CARBON LIMITS FOR AIRCRAFT: Wheeler touted the rule, finalized early last week, as a “historic action” to reduce greenhouse gas standards.
Environmentalists, however, slammed the action, noting even the EPA admits it won’t do anything to reduce greenhouse gas emissions beyond business-as-usual. Indeed, the EPA said many airplanes manufactured in the U.S. already meet the standards, which adopt global carbon rules negotiated by the Obama administration.
A dozen state attorneys general sharply criticized the EPA’s plans to adopt the global standards in the fall, suggesting they could bring legal action against the EPA’s move. Environmentalists are calling on the incoming Biden team to quickly tighten the aircraft standards.
EPA IS MEETING TRUMP’S DIRECTIVE BARRING RACE-RELATED TRAINING: The EPA is fully complying with President Trump’s executive order banning certain types of diversity training focused on race and gender, the agency’s inspector general said in a report last week.
That includes ensuring agency trainings didn’t teach “divisive concepts” and reporting all such trainings to the White House Office of Personnel Management for approval, according to the report. Wheeler requested the agency’s watchdog assess its compliance with the executive order.
WHILE YOU WERE GONE: The Senate on New Years Day voted to override Trump’s veto of the National Defense Authorization Act, providing the president his first and likely only veto defeat.
The likely final vote of the last Congress provided more than the two-thirds needed to force the NDAA into law over Trump’s objection.
That means new expanded sanctions on Russia’s NordStream 2 natural gas pipeline to Germany will go into effect, a part of the defense package that was supported by Trump.
The Rundown
New York Times How Trump tried, but largely failed, to derail America’s top climate report
Politico Biden set to supercharge clean energy with $40B stash
New York Times A monster wind turbine is upending an industry
Wall Street Journal Texas fracking billionaires drew Covid-19 aid while investing in rivals
Boston Globe Mass. to require all new cars sold to be electric by 2035 as part of climate-change measures
Calendar
MONDAY | JAN. 4
The 117th Congress kicks off this week
