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CLIMATE STAKES OF THE INFRASTRUCTURE FIGHT: President Joe Biden will introduce a $6 trillion budget today reiterating his interest in passing large new investments in clean energy and fighting climate change. But as we somehow are upon Memorial Day, it’s getting near crunch time for the administration to turn its priorities into law through its only real vehicle of doing it — infrastructure legislation.
Biden yesterday said he is still invested in talking with Senate Republicans next week about the party’s $928 billion infrastructure proposal, reviving hopes for a bipartisan deal after talks stalled last week.
He refused to bite on a call from climate activists to stop dragging things out and to outright reject the smaller and narrower bill, which does next to nothing on clean energy other than a small investment in electric vehicle charging.
That worries climate advocates and liberal Democrats who fear Biden might not get two bites at the apple if he notches a deal with Republicans on traditional “hard” infrastructure and then moves to pass clean energy and climate provisions with only Democrats through reconciliation.
Republicans seem to be making that bet too, wagering that the longer the bipartisan talks go on the smaller infrastructure deal, the less time Biden will have to pass significant climate legislation before the 2022 midterms.
The counter-argument: Some Democrat advisers following the negotiations suggested to us that going the bipartisan route first could appease moderates such as Sen. Joe Manchin of West Virginia and Sen. Kyrsten Sinema of Arizona, whose votes the Biden administration needs in order to pass clean energy and climate measures later on since the White House can’t lose any Democrats in the split Senate.
Paul Bledsoe, a former Senate Finance Committee staff member now with the Progressive Policy Institute, told us the Biden Administration is determined to pass a reconciliation infrastructure bill with clean spending, and doing a smaller bipartisan deal first won’t prevent that.
“The Biden team will get everything it can in a traditional infrastructure bill before turning to reconciliation legislation for complementary policy,” Bledsoe said. “If Republicans want to agree to a basic infrastructure bill for their own political purposes, that’s fine, but no one should have any expectations it will prevent Democrats from pursuing reconciliation.”
There are certainly other legislative vehicles Biden could use to advance his climate priorities, including a major clean energy tax bill from Sen. Ron Wyden of Oregon that Democrats on the Senate Finance Committee moved this week. Passing two massive spending bills, however, is undoubtedly trickier than passing one, especially climate-related legislation (just ask former President Barack Obama and his team).
Democrats’ efforts to go big on climate, even though they’ve failed, have hurt them at the polls in the past — though the urgency with which the public increasingly views climate change could weigh in Biden’s favor.
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.
NOTE TO READERS: Daily on Energy will be off on Monday, May 31 for Memorial Day. We’ll be back in your inboxes on Tuesday.
LITHIUM EXEC RESPONDS TO BIDEN CRITICAL MINERALS PLANS: Relying on foreign allies for critical minerals supply instead of mining domestically would be an “irresponsible” and “dangerous” policy for the Biden administration to pursue, a top lithium executive says.
“That’s a false choice. We need to have both. We need to have production, and we need to have processing in the United States,” James Calaway, chairman of the board of lithium mining company Ioneer, told Abby. “Those go together, and that’s the most environmentally friendly way to do it.”
Calaway was responding to a report that said the Biden administration, in a move to appease environmentalists, would focus on building a domestic industry to process critical minerals rather than exploring opportunities to mine in the U.S. The potential policy decision drew immediate backlash from mining industry groups.
Ioneer, an Australian company, is working to build a lithium mine to tap into the reserves in Nevada’s Rhyolite Ridge, located about halfway between Las Vegas and Reno. The company is pledging to spend roughly $800 million on the project, the fate of which Calaway said is in the hands of the Interior Department.
More from the interview with Calaway in Abby’s story posted this morning.
EXXON’S BIGGEST INVESTOR’S SEARING REBUKE: Vanguard, the largest investor of ExxonMobil, issued a scathing indictment yesterday on the oil giant’s management in explaining the decision to vote for two new independent board members nominated by the climate activist hedge fund Engine No. 1.
Vanguard blamed “Exxon’s insular culture” for “significantly underperforming” competitors and the market financially, and said the company hasn’t gone far enough to address climate risk. It said the additions of Gregory Goff and Kaisa Hietala would add both conventional oil and gas industry and “transformational” energy perspectives to Exxon’s board, which has lacked energy sector experience.
Big asset managers were key: The vote of Vanguard and another giant asset manager, BlackRock, proved critical in Engine No. 1’s surprising victory.
BlackRock, Exxon’s second largest shareholder, issued a similarly searing statement Wednesday after backing three of the four dissident nominees proposed by Engine No. 1.
BlackRock noted Exxon invested just $10.4 billion on low-carbon energy technologies in the last 20 years, compared with more than $20 billion in overall expenditures in 2020 alone. Exxon has not adequately assessed the risk to its business from a reduction in demand for fossil fuels, BlackRock said.
“We continue to be concerned about Exxon’s strategic direction and the anticipated impact on its long-term financial performance and competitiveness,” said BlackRock, which is aiming for its entire investment portfolio to be at net zero emissions by 2050.
BANKS AREN’T DITCHING FOSSIL FUELS: The CEOs of major U.S. banks again made clear during yesterday’s hearing before the House Financial Services Committee that they won’t be dropping their fossil fuel investments or halting funding of new oil and gas development any time soon, even as the banks strive to align their financing with the Paris climate agreement.
“We’ve been quite clear that there will be fossil fuel companies for decades to come, and we finance them, and we’re proud of it,” said JPMorgan CEO Jamie Dimon, during an exchange with GOP Rep. John Rose.
“We’re working with them to try to reduce their CO2. We’ve certainly not cut back on that, and we have very good relations with them,” Dimon added of fossil fuel companies.
Dimon, in an exchange with GOP Rep. Andy Barr, also said he didn’t join the United Nations-convened Net-Zero Banking Alliance, touted by climate envoy John Kerry, because it was “too vague” and “hard to meet the commitments.” Bank of America, Citigroup, and Morgan Stanley all joined the alliance, under which banks commit to achieve net-zero financed emissions by 2050 and to set interim targets for 2030 or sooner.
In an exchange with Rep. Alexandria Ocasio-Cortez, all of the bank CEOs said they are still financing new oil and gas development. Those statements come on the heels of the International Energy Agency’s recent report saying all new oil and gas development should halt immediately for the world to have a chance of reaching net-zero emissions by 2050.
MEMORIAL DAY WEEKEND GAS PRICES HIGHEST SINCE 2014: Travelers this Memorial Day weekend could spend more than $3 per gallon to fill up, the highest gas prices this time of year since 2014 amid fallout from the Colonial Pipeline hack earlier this month.
The higher gas prices come as more than 37 million people are expected to hit the roads, most of them by car, as more states lift coronavirus restrictions for fully vaccinated people. That is an increase of 60% from last year’s Memorial Day weekend travel, which was at the height of the pandemic lockdowns, according to AAA.
A handful of states are still regaining fuel following the Colonial Pipeline shutdown, too, according to GasBuddy. For example, 39% of the gas stations in Washington, D.C., are still without fuel, along with a quarter of the gas stations in Georgia and South Carolina. Other states still suffering outages include North Carolina, Tennessee, Maryland, and Florida.
Read more from Abby here.
GRANHOLM – NORD STREAM 2 ‘VERY DANGEROUS’ FOR CLIMATE: Energy Secretary Jennifer Granholm distanced herself yesterday from the Biden administration’s decision to waive sanctions on the company and CEO in charge of building the Russian Nord Stream 2 natural gas pipeline into Germany.
Granholm, testifying before the House Science Committee, said the Department of Energy was not part of the decision handled by the State Department, which cited geopolitical reasons in waiving sanctions.
Nonetheless, Granholm said she opposes the completion of Nord Stream 2 because she said the new natural gas infrastructure project would be detrimental to her agency’s interest in curbing global emissions and combating climate change.
“One of the reasons why that pipeline is very dangerous is because it is carrying the dirtiest form of natural gas on Earth with no security on methane emissions,” Granholm said in response to questioning from Rep. Michael Waltz, a Republican from Florida. “It’s not good for our climate.”
GRANHOLM PITCHING CLEAN ENERGY IN TEXAS: Granholm is making her first visit outside D.C. today to Houston, the nation’s energy capital, to tout the Biden administration’s American Jobs Plan.
The Energy secretary is touring Air Liquide’s LaPorte Hydrogen plant this morning, where she will meet with some of the company’s 20,000 U.S. workers and discuss hydrogen’s role in moving to a clean energy economy. She’ll be joined by moderate Democratic Rep. Lizzie Fletcher of Texas.
Granholm has frequently said hydrogen can play an important role in reaching net-zero emissions, with the potential to be used as a replacement fuel for carbon-intensive processes like chemical, steel, and concrete production. She wants DOE to help reduce its cost 80% by 2030.
“We are encouraged by this Administration’s support for advancing private investment and accelerating the deployment of low-carbon and renewable hydrogen,” said Mike Graff, Chairman & CEO of American Air Liquide Holdings.
Later this afternoon, Granholm will join a roundtable with Fletcher, Rep. Sheila Jackson Lee, and Houston Mayor Sylvester Turner, to discuss the future of clean energy with Texas.
BIDEN EPA TO RESTORE STATES’ POWER TO VETO ENERGY PROJECTS: The EPA said yesterday it will revise a Trump administration rule limiting states’ ability to block infrastructure projects that threaten state water quality after determining the prior EPA’s action “erodes state and Tribal authority.”
The EPA said it “intends to strengthen” the authority of states and tribes under section 401 of the Clean Water Act. In recent years, that provision has become a source of disputes as Democrat-led states have used it to block the construction of coal export terminals, oil and gas pipelines, and other fossil fuel infrastructure.
“We have serious water challenges to address as a nation and as EPA Administrator, I will not hesitate to correct decisions that weakened the authority of states and Tribes to protect their waters,” said EPA Administrator Michael Regan in a statement.
The EPA says it will begin seeking public input on a reconsideration of the section 401 rule next month, and the Trump administration’s action will remain in place in the meantime.
The Rundown
Reuters Three Exxon refineries top the list of US polluters
Wall Street Journal The Texas grid came close to an even bigger disaster during February freeze
New York Times Biden’s fossil fuel moves clash with pledges on climate change
Calendar
FRIDAY | MAY 28
3 p.m. Energy Secretary Jennifer Granholm will join a roundtable in Houston on “Advancing the Clean Energy Economy in Texas” with Rep. Lizzie Fletcher, Rep. Sheila Jackson Lee, and Houston Mayor Sylvester Turner.
