Daily on Energy: Kerry struggling to lock down commitments from China and India

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THE SITUATION FACING KERRY: Climate envoy John Kerry is struggling to lock down new commitments from China and India ahead of the Biden administration’s summit of global leaders from top emitting countries on Earth Day.

It’s not surprising that China, the world’s top emitter by far, and India, the third biggest emitter, aren’t rushing to announce a new emissions reductions pledge for 2030 months before November’s United Nations meeting in Glasgow, where countries are expected to enshrine tougher targets to the Paris Agreement.

President Joe Biden’s summit is mostly a forum for the U.S. to announce its own aggressive emissions reduction target for 2030, toward the goal of re-establishing credibility after the Trump administration abandoned the Paris Agreement.

There’s a credibility gap: But the reluctance of China and India to add anything to the proceedings has caused some analysts to question whether the summit is premature, since it’s coming before the Biden administration can pass its $2.3 trillion infrastructure and climate proposal through Congress.

“The US would have far more credibility hosting this summit *after* a domestic climate bill is enacted into law. Now it risks being climate theater,” tweeted Arvind Ravikumar, a professor at Harrisburg University who studies sustainable energy development and climate equity.

Kelly Sims Gallagher, who directs the Climate Policy Lab at The Fletcher School at Tufts University, told Josh that Kerry faces a “chicken and egg problem” in trying to convince other big emitters to ramp up its targets without the U.S. having its own climate law to show off.

“Many countries are understandably mistrustful of the United States,” said Gallagher, who was a senior China advisor focused on climate in the Obama administration. “Countries appear to be waiting to see what the United States can deliver before they make further commitments themselves.”

Kerry’s last minute diplomacy has high stakes: The U.S. climate envoy is racing to China for meetings today and tomorrow, the State Department confirmed, where he will visit with his counterpart Xie Zhenhua, who negotiated a deal with Kerry in 2014 for the U.S. and China partner on climate change ahead of the Paris Agreement’s enactment.

State Department officials told the Wall Street Journal the goal of the trip is to get China to reduce emissions more quickly compared to its current target of having emissions peak before 2030 and achieving carbon neutrality by 2060.

Paul Bledsoe, strategic adviser for the Progressive Policy Institute, told Josh that China must agree to begin reducing emissions “well before” 2030 in order to have any success in cutting global emissions. To underscore how much China matters, projections from Climate Action Tracker last year suggest if Beijing were to achieve its goal of reaching carbon neutrality by 2060, it would lower global warming projections by around 0.2 to 0.3 degrees Celsius just on its own.

But Bledsoe does not expect a commitment from China at the Biden summit, and he said that Kerry will need the six months before November’s U.N. meeting to negotiate an agreement.

He said China could be holding out to “gain as much leverage as they can on trade and other issues in exchange for a deeper emissions reduction target,” despite Kerry’s appeals to make climate change a stand-alone issue between the two countries.

“Kerry wants to compartmentalize climate, but the Chinese don’t,” Bledsoe said.

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.

NEW DETAILS ON HOUSE GOP CLIMATE SUMMIT: House Republicans plan to hold a three-day forum next week to present their ideas on addressing climate change and counter the Biden Earth Day summit, Josh reported last night with exclusive new details on the plan from a GOP leadership aide.

“It’s designed to give members a chance to present our ideas,” the GOP leadership aide said of the event, dubbed, “Energy Innovation Agenda: Conservative Solutions for a Better Climate.”

As many as 30 members from across the Republican ideological spectrum will participate in the April 19-21 House forum, including members from the conservative Freedom Caucus and centrist Tuesday Group

What’s on the agenda: Of the 10 to 15 bills discussed each day, there will be measures promoting research and development of clean energy technologies, a new version of the “Trillion Trees Act,” critical minerals legislation, efforts to streamline permitting under the National Environmental Policy Act, and elements to support carbon capture projects and finance of pipelines to carry captured carbon dioxide to where it can be stored underground.

Another bill would require Biden to report to Congress before he submits a target to reduce emissions under the Paris Agreement and for the administration to provide evidence for why the goal is achievable and economically viable. House Republicans also plan to reiterate their opposition to a carbon tax.

INTERESTING TIMING…OIL COMPANIES LOBBY SENATORS FOR CARBON TAX: Oil company leaders and other business executives are meeting virtually this week with more than a dozen Democratic and Republican senators to advocate for a carbon tax, Josh reported this morning. The companies are aiming to shift the debate as Congress considers Biden’s infrastructure proposal, which excludes a carbon tax.

Specifically, the companies will lobby for a carbon tax proposal developed by former Republican Secretaries of State James Baker III and the late George Shultz as part of the Climate Leadership Council that would return the revenue to households through equal quarterly payments, known as “dividends,” to offset higher energy prices.

The Climate Leadership Council organized the meetings, which will be attended by top officials from U.S. oil and gas majors ExxonMobil and ConocoPhillips, along with representatives from Ford, General Motors, IBM, and more.

BIDEN TAPS NOMINEE FOR NO. 2 AT INTERIOR: Biden has selected Tommy Beaudreau to be his deputy secretary of Interior, among a slate of new environmental-related nominees the White House announced this morning. Beaudreau is an energy lawyer and former chief of staff at the Interior Department in the Obama administration.

He’s backed by centrist senators Joe Manchin, the Democrat chairman of the Energy Committee, and Lisa Murkowski, the Alaska Republican, according to the Washington Post. Manchin and Murkowski helped tank Biden’s first pick for the deputy position, Liz Klein, who Interior recently tapped instead to be senior counselor to the secretary, a position not requiring Senate confirmation.

PLUS, BIDEN NOMINATES TOP EPA LEADERSHIP: Biden is looking to elevate two officials at the EPA who are temporarily overseeing the water and chemicals offices to formally lead those offices.

Biden, in the slate of environmental nominees released this morning, nominated Radhika Fox, formally CEO of the U.S. Water Alliance, to serve as assistant administrator for water. He also tapped Michal Freedhoff, who most recently served as director of oversight for the Senate Environment Committee Democrats, to be assistant administrator for chemical safety and pollution prevention. Both Fox and Freedhoff joined the EPA early in the Biden administration as political appointees.

In addition, Biden announced he is nominating Faisal Amin to be the EPA’s chief financial officer. Amin currently serves as deputy director of the Office of Administration in the Executive Office of the President, and he worked on the Biden administration’s agency review and transition teams.

DON’T LOOK NOW…OIL DEMAND IS RECOVERING: Global oil demand will recover to 96.7 million barrels per day this year, 5.7 million b/d more than 2020, when the pandemic caused a unprecedented collapse in travel-related consumption, the International Energy Agency projected in its monthly report today.

The IEA raised its forecast for 2021 global oil demand by 230,000 b/d compared to its last report, citing the fact that “vaccine campaigns are gathering pace and the global economy appears to be on a better footing.”

Recovery from the pandemic remains “fragile” though, with the number of pandemic cases surging in some major oil consuming countries such as India and Brazil.

Still, oil prices rose this morning on the backs of IEA’s optimistic demand outlook, with Brent trading at around $65 per barrel and WTI at near $62 per barrel.

Warning signs persist: Prices could come under “renewed pressure” in the coming months with world oil supply returning, the IEA warned.

Global supply rose by 1.7 million b/d in March, driven by U.S. production surging after the February cold snap, and more oil is on the way as OPEC+ recently agreed to gradually ease output cuts by more than 2 million b/d from May through July.

US OIL CONSUMPTION ALSO ON THE RISE: U.S. oil demand rose the week ending April 9 to 20.3 million b/d from 19.2 million b/d, EIA reported this morning.

Gasoline, jet fuel, and diesel consumption increased across the board.

EIA also reported a large draw of crude oil inventories, which decreased by 5.9 million barrels from the previous week, easing the supply glut.

CANADA ASKS US TO GO BIGGER ON METHANE COMMITMENT: Canadian Environment Minister Jonathan Wilkinson, in a meeting earlier this week Kerry, proposed the two countries realign efforts to cut methane emissions and strive for a more aggressive goal to target a 75% reduction by 2030, according to a readout from the Canadian government.

Wilkinson stressed to Kerry that Canada has upheld its end of a joint commitment made during the Obama administration to reduce North American emissions of methane 40% by 2025. His comments to Kerry also come as environmentalists are calling on the Biden administration to include an aggressive target to slash methane emissions as part of its new commitment to the Paris climate agreement.

Beyond methane, Wilkinson stressed the importance of the U.S. and Canada aligning standards to improve fuel efficiency and deploy zero emission vehicles, encouraging the implementation of a target to reach 100% zero emission vehicle sales “as soon as possible.” In addition, Wilkinson suggested aligning “buy clean” approaches “as a means to enhance climate change ambitions and trade opportunities,” according to the readout.

DEJA VU IN TEXAS: Texas’ grid operator called on people in the state to conserve electricity yesterday afternoon amid higher-than-expected demand as many power plants were offline for maintenance (some undergoing repairs from the February freeze).

The Electric Reliability Council of Texas, or ERCOT, said a stalled cold front had led to higher demand for power than the grid operator had anticipated. The calls for energy conservation — and a warning the Texas grid could enter emergency conditions — comes just two months after a deep freeze left millions of Texans without power for nearly a week.

By late yesterday, however, ERCOT ended calls for energy conservation as the grid returned to normal operating conditions.

BIPARTISAN BILL TO PLUG LEAKING WELLS: Sens. Ben Ray Luján, a New Mexico Democrat, and Kevin Cramer, a North Dakota Republican, introduced legislation yesterday that would provide more than $4.6 billion in federal funding for states and tribes to plug “orphan” oil and gas wells whose owners are either unknown or insolvent.

Cramer, representing a huge oil producing state that was hit hard by the pandemic, said the legislation would “create or retain tens of thousands of jobs” for workers in the oil and gas sector.

The bill could provide a blueprint for enacting Biden’s proposed program as part of his infrastructure plan to employ “hundreds of thousands” of oil and gas workers to plug orphan and abandoned wells that can leak methane.

STRONG LABOR STANDARDS WOULDN’T JACK UP RENEWABLE ENERGY COSTS: Increasing the wages of renewable energy workers and ramping up requirements for developers to source their raw materials domestically wouldn’t greatly increase the capital costs of wind and solar energy, according to a new study from Princeton University researchers Erin Mayfield, a postdoctoral fellow, and Jesse Jenkins, an assistant professor.

Raising domestic labor costs by 20% would increase capital costs for wind and solar energy by just 2% to 4% and operation and maintenance costs by 3% to 6%, the study finds. That slight increase in costs could also be offset by an increase in domestic labor productivity associated with higher wages, unionization, and other labor standards, the report notes.

In addition, increased domestic sourcing of the materials needed to build solar panels and wind turbines results in only small increases in renewable energy costs. For example, increasing domestic sourcing by 10% across the supply chain for solar energy raises average capital costs of installed solar projects by just 1%. If a project sourced all of its materials domestically, the costs would be 7% higher than today’s average costs, the report says.

The findings are likely welcome news for the Biden administration, which is seeking to boost domestic manufacturing of clean energy technologies with promises that workers in the sector will have “good-paying” and unionized jobs.

CALIFORNIA UNVEILS INCENTIVE PROGRAM FOR CLEAN TRUCK INFRASTRUCTURE: The California Energy Commission announced yesterday a first-of-its-kind program to speed up construction of electric vehicle charging and hydrogen refueling stations to service zero-emissions trucks and buses.

Under the new program, the CEC is pledging $50 million over several years to help plan for and fund the development of charging and hydrogen refueling infrastructure, with a particular emphasis on regions that are near highways or ports that are heavily affected by vehicle pollution. The CEC is partnering with CALSTART, which will design and administer the program.

The infrastructure funding is part of California’s effort to meet an executive order from Gov. Gavin Newsom requiring all medium- and heavy-duty vehicles to be zero-emissions by 2045.

The Rundown

Washington Post In the climate change fight, the Interior Department becomes a battlefield

Bloomberg Big companies line up to crush green transparency resolutions

New York Times Japan’s plan for Fukushima wastewater meets a wall of mistrust in Asia

Reuters Cutting emissions 50% would put U.S. Paris target on par with EU: report

New York Times Texas froze and California burned. To insurers, they look similar.

Calendar

THURSDAY | APRIL 15

10 a.m. 366 Dirksen. The Senate Energy and Natural Resources Committee will hold a hearing to examine the “role of the Department of Energy in energy innovation and how its research, development, demonstration, and deployment programs may be enhanced.”

10:30 a.m. The House Energy and Commerce Committee’s Subcommittee on Environment and Climate Change will hold a remote legislative hearing on The CLEAN Future Act and environmental justice.

11 a.m. Room SH-216. The Senate Budget Committee will hold a hearing on “The Cost of Inaction on Climate Change.”

12 p.m. The House Select Committee on the Climate Crisis will hold a remote hearing titled, “Making the Case for Climate Action: The Growing Risks and Costs of Inaction.

TUESDAY | APRIL 20

11 a.m. The Great Plains Institute will host the second virtual CO2NNECT event on carbon dioxide transport and storage, featuring remarks from Energy Secretary Jennifer Granholm and Sen. Chris Coons.

12:30 p.m. The National Capital Area Chapter of the United States Association for Energy Economics’ will hold its annual Energy Policy Conference. The virtual event runs over two days.

WEDNESDAY | APRIL 21

6 p.m. Citizens’ Climate Lobby’s D.C. chapter will hold a virtual town hall meeting with Rep. Eleanor Holmes Norton.

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