With help from Catherine Morehouse, Ben Lefebvre, Annie Snider and Alex Guilén.
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— The Senate committees that wrote the reconciliation bill’s biggest climate items are facing the parliamentarian’s shears.
— Carbon capture advocates could score a win they’ve been seeking for months in Democrats’ clean energy tax credits.
— The International Trade Commission recommended President Joe Biden renew Trump-era import protections for solar parts.
HAPPY THURSDAY! I’m your host, Matthew Choi. I was alarmed that so many people emailed me “Nothing new!” Wednesday morning, fearing no one found ME particularly newsy. But it was really just the many Cyndi Lauper fans who nailed the trivia by finishing the line “Lying in my bed, I hear the clock tick and think of you. Caught up in circles, confusion is nothing new.” Congrats to Chesapeake Bay Foundation’s Lisa Caruso for getting it first!
For today’s trivia, where did Cyndi Lauper go to high school? Send your tips and trivia answers to [email protected]. Find me on Twitter @matthewchoi2018.
Check out the POLITICO Energy podcast — all the energy and environmental politics and policy news you need to start your day, in just five minutes. Listen and subscribe for free at politico.com/energy-podcast. On today’s episode: Mixed reviews for Biden’s biofuels plan.
CLIMATE GETS A BYRD BATH: The Senate committees writing the climate provisions in Democrats’ $1.7 trillion budget reconciliation package are going under the parliamentarian’s microscope, which will determine what can and can’t be included under the strict rules of the process that allows the party to pass the measure with a simple majority.
The Senate Energy Committee will meet with the parliamentarian today, Pro’s Josh Siegel reports, with the Finance Committee likely to soon follow suit. The Environment and Public Works Committee met with the parliamentarian Wednesday.
At play are the Finance Committee’s hundreds of billions of dollars in clean energy tax credits that will form the biggest component of Democrats’ climate effort. The Energy Committee oversees the federal oil and gas leasing program, which House lawmakers altered to raise royalties for the first time in a century. The House version also would also ban offshore leases in many of the nation’s coastal waters.
And in the Environment committee, Republicans are fighting the inclusion of a methane plan that includes penalties and incentives to prod companies to rein in their emissions. But Sen. Shelley Moore Capito of West Virginia, the ranking member of the committee, told Josh she’s not holding out much hope that the parliamentarian will ax the methane language.
“To be perfectly honest I don’t know that we are very optimistic,” Capito said.
Still, Senate Energy Chair Joe Manchin indicated there are changes coming to the House methane language to make sure a fee doesn’t overlap with EPA’s forthcoming regulations on the potent greenhouse gas. Lawmakers are “working through” it, he said, and have “made some good adjustments on it.”
“You got to do one [of] two things,” Manchin told reporters Wednesday. “Do you want basically … regulations as far as EPA, or do you want money? If [companies] are basically complying with the regulations, then you shouldn’t be subject to a fee. So we’re talking about different things, like just trying to make common sense.”
Manchin — who has expressed skepticism about a fee — reiterated his position that “there should be incentives” instead of penalties to nudge companies along to compliance. The latest iteration of the methane fee in the House-passed reconciliation text includes $775 million for oil and gas companies to help them comply with stricter rules. Manchin said lawmakers are still mulling further adjustments to the House approach.
MOVING THE CAP ON 45Q: Carbon capture advocates are pushing to change House language around the tax incentive in the reconciliation bill for deploying CCS technology. The bill sent to the Senate raises the tax credit to $85 per captured ton of CO2 from $50, but it requires 75 percent of a facilities’ total emissions to be captured in order to qualify. That would shut out power stations that deploy carbon capture technology in a more piecemeal fashion, advocates say, and could make the tax credit functionally inaccessible.
Several key lawmakers, including Manchin, Tina Smith (D-Minn.) and Ben Ray Luján (D-N.M.) are part of a group of lawmakers discussing scrapping or at least lowering the 75 percent threshold, Josh reports. Sen. Ron Wyden (D-Ore.) was noncommittal to changing the text Wednesday, but his staff has already made a similar concession for industrial facilities earlier this year. After carbon capture advocates levied complaints against a similar 50-percent capture threshold for non-generating facilities, it was scrapped in the reconciliation text passed by the House.
But the 75-percent threshold still has its defenders, particularly House Democrats who fear removing it could open the door for power plants to claim millions in credits by applying carbon capture to uneconomic coal plants that would otherwise retire, a move that would undercut the climate benefits.
“The point is to set some minimum standards to make sure this is real,” Rep. Jared Huffman (D-Calif.) told Josh.
SHARING THE COST OF WATER: A group of House lawmakers are hoping to make it easier for American Indian tribes to get access to federal water relief. Reps. Melanie Stansbury (D-N.M.), Teresa Leger Fernandez (D-N.M.), Steven Horsford (D-Nev.), Ruben Gallego (D-Ariz.), Huffman, Tom Cole (R-Okla.) and Grace Napolitano (D-Calif.) are introducing the WaterSMART Access for Tribes Act today, which would allow the Interior secretary to reduce or waive cost-share requirements for tribal governments under the Bureau of Reclamation’s WaterSMART program. Less than five percent of WaterSMART-funded projects have been led by Tribes or Pueblos.
“Tribes and Pueblos have lived on this land since time immemorial, and the federal government has a trust responsibility to ensure Indigenous communities have access to clean, safe water for their health, economic, and cultural needs,” Stansbury said in a statement. “For too long, the WaterSMART program’s cost-share requirement has been a barrier for Tribes.” Read the bill text here.
SIDE SWIPED: Democrats on the House Natural Resources Committee are throwing their heft behind a lawsuit seeking to overturn the Interior Department’s November Gulf of Mexico oil lease sale. Chair Raúl Grijalva along with Huffman and Rep. Alan Lowenthal filed an amicus brief supporting environmental group Friends of the Earth as it seeks to null the sale based on what it alleges were violations of the National Environmental Protection Act and the Administrative Procedures Act.
The amicus brief points to Interior’s own misgivings about the environmental reviews the Trump administration conducted and were used to clear the offshore parcels for the November lease sale. “In proceeding with Lease Sale 257, the Bureau ignored well-established requirements of NEPA and the APA by relying on environmental reviews that courts and the Bureau itself have found to be inadequate, flawed, and outdated,” the lawmakers said in their brief. Interior declined to comment on the brief. Read more here.
KEEPING ENERGY CYBERSECURE: Sen. John Barrasso, ranking member on the Energy Committee, wants to know if the Interior and Energy departments have been subjected to any cyber attacks — and how they plan to prevent more in the future. In letters to Interior Secretary Deb Haaland on Tuesday and Energy Secretary Jennifer Granholm last week first reported by ME, Barrasso asked what steps the departments have taken to beef up their cyber security and whether any classified information had been breached by recent attacks. Barrasso pointed to the Solar Winds attack, which included DOE, and a mock-breach by the DOI inspector general in 2020.
“DOE has a critical mission [that] makes DOE a prime target for hacking groups that wish to undermine our national security and technological capabilities,” the letter to Granholm said. “It is not a question of if DOE will be the target of another well-coordinated cyber operation, but when.” Barrasso asked Granholm to respond by Dec. 15 and Haaland by Dec. 21. DOE didn’t immediately respond to ME’s request for comment. DOI declined to comment.
ABOUT THAT RISK: Leaders of Congress’ bipartisan Ethylene Oxide Task Force met Wednesday with EPA Administrator Michael Regan to discuss the Biden administration’s path forward on the highly toxic, cancer-causing chemical that has raised alarm in communities from Illinois to Georgia to Texas. According to a readout from Rep. Brad Schneider (D-Ill.), one of the task force’s co-chairs, there was agreement on the need for more ambient air monitoring to pinpoint sources of the chemical, as well as stronger engagement with affected communities.
But Schneider also said in a statement that the task force “pushed” EPA to conduct a residual risk review for the chemical — a review that would presumably account for the far greater risk that EPA concluded in 2014 the chemical poses and could lead to stricter emissions control requirements. EPA’s Inspector General has called for such a review, but acting air chief Joe Goffman has pushed back. An EPA spokesman said Regan told lawmakers the agency “is committed to protecting workers and communities from the serious health risks posed by emissions of EtO while safeguarding the supply of vital sterilized medical devices.”
ITC RECOMMENDS FOUR MORE YEARS OF SOLAR SAFEGUARD TARIFFS: The International Trade Commission on Wednesday recommended that President Joe Biden provide four more years of import protection for solar cells and modules.
Former President Donald Trump initially imposed the safeguard measure in early 2018. It will expire in February, unless renewed by Biden. The safeguard currently consists of a 15 percent tariff on all solar modules and a 15 percent tariff on solar cells in excess of 2.5 gigawatts.
The trade panel, in a report delivered to Biden on Wednesday, recommended keeping the 2.5 gigawatt tariff-rate quota for solar cells, but reducing the 15 percent tariff for cells and modules each year by 0.25 percent. Biden has until February to announce his decision. He is not bound to follow the commission’s recommendation.
THE FEDERAL GOVERNMENT AIMS FOR NET ZERO: President Joe Biden is directing the federal government to clean up its own act and go net-zero by 2050. Biden signed an executive order Wednesday that would reach the target by electrifying the government’s vehicle fleet, using only clean electricity at federal facilities by 2030 and requiring federal buildings to reach net-zero emissions by 2045. The executive order also encourages agencies to use construction materials made with lower carbon emissions and to avoid substances containing PFAS.
It’s a microcosm of the nationwide emissions target Biden is trying achieve, such as seeking to increase electric vehicle sales to half the market by 2030 and making the entire U.S. economy net-zero by 2050.
“As the single largest land owner, energy consumer, and employer in the Nation, the Federal Government can catalyze private sector investment and expand the economy and American industry by transforming how we build, buy, and manage electricity, vehicles, buildings, and other operations to be clean and sustainable,” the executive order stated. Read more from Zack Colman.
TEXAS REGULATORS FLEX NEW AUTHORITY: Eight Texas power companies failed to comply with new rules requiring generators to file winter compliance reports with state regulators, according to a report filed by staff of the Public Utilities Commission of Texas on Wednesday. Violating facilities totaled 801 MW of the state’s 120,000 MW of installed capacity, according to the PUCT.
Texas regulators adopted rules in October requiring power companies to submit winter compliance reports, based on a joint FERC and NERC report released in 2011, and following the freeze that caused mass blackouts in the state last winter. The state’s updated regulations follow a law passed earlier this year requiring stricter winter standards for power plants.
“We are recommending stiff administrative penalties against each of these entities,” said PUC Executive Director Thomas Gleeson in a statement.
RMI: STOP SUBSIDIZING GAS HOOKUPS: Clean energy think tank RMI is out with a report today that challenges a long-standing practice of utilities absorbing the costs of an individual hookup to their gas system and passing those costs along to ratepayers. According to the report, the practice made sense under the economic rationale that adding more customers would provide system-wide benefits. But that reasoning is now at odds with growing state and local decarbonization plans that call for electrifying residential and commercial buildings, as well as the growing costs of the gas system.
Advocates in California and New York have estimated utilities spend $100 million to $200 million, respectively, per year on integrating new customers, though utilities don’t report these costs outright, which makes tracking difficult. In California, where several cities have passed mandates requiring all new buildings to use electric appliances instead of gas, regulators have proposed eliminating these allowances altogether, meaning the developer of the building or home would front these costs themselves.
The report recommends other states consider a similar policy or create an incentive system where utilities would also absorb the costs of additional electric lines for buildings and homes that shift to 100% electricity.
— “Youngkin pledges to pull Virginia from carbon market by executive order,” via Virginia Mercury.
— “California’s Public Pensions Are Major Fossil Fuel Investors,” via Bloomberg.
— “Once-Stuck Ship Gets Another Chance for Passage Through the Suez Canal,” via Bloomberg.
THAT’S ALL FOR ME!