Daily on Energy: Climate politics threaten bipartisan Senate energy bill meant to reach Trump’s desk

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SENATE ENERGY BILL CAN’T SHAKE CLIMATE POLITICS: A week of negotiations hasn’t brought senators much closer to resolving the biggest fights over what to tack onto a sweeping bipartisan energy package.

The Senate began considering this week broad energy legislation that, if passed, would be the most comprehensive update to energy law in more than a decade. The legislation now includes priorities from more than 70 senators, said Senate Energy Committee Chairwoman Lisa Murkowski, the bill’s main sponsor, during remarks on the floor Thursday.

Nonetheless, even a bill that bipartisan-driven can’t seem to shake the thorny politics of climate and energy policy. The tensions raise questions about whether the bill will survive the amendment process and whether it will incorporate enough climate-specific amendments to entice House Democrats to take up the bill.

Democratic senators, critical of the bill for not doing enough to directly address climate change, are fighting to add an extension of several clean energy tax credits to the bill, including for onshore and offshore wind, solar, and electric vehicles.

But Senator Ron Wyden, an Oregon Democrat who offered the amendment, isn’t optimistic he will get any Republican support for it. “It is just too easy for business-as-usual energy Republicans to tune out renewables,” Wyden told the American Council on Renewable Energy forum Wednesday.

Bipartisan support doesn’t mean smooth sailing: Even bipartisan amendments are struggling to find traction amid opposition from conservative Republicans.

Ohio Republican Rob Portman and New Hampshire Democrat Jeanne Shaheen, for example, are trying to add back a critical piece of their energy efficiency bill, much of which is already included in the energy package, that was dropped amid cross-party disputes. That provision, which would help strengthen building codes, is responsible for the bulk of the savings and carbon emissions reductions their efficiency bill would bring about, according to analysis from the American Council for an Energy-Efficient Economy.

The language, though, has met sharp opposition from the National Association of Home Builders, which is lobbying senators to reject it.

Senators are also bickering over a bipartisan amendment to reduce potent greenhouse gas refrigerants, which Senate Environment Committee Chairman John Barrasso and other conservatives are blocking from getting a vote.

The amendment’s Republican sponsor, Louisiana’s John Kennedy, has threatened to hold up the entire energy package if his provision isn’t allowed a vote.

Trying to find a silver lining: Murkowksi, on the floor Thursday, announced she and her co-sponsor, West Virginia Democrat Joe Manchin, had accepted 18 amendments in a modified text teed up for a procedural vote Monday.

But those amendments, while split evenly between the parties’ priorities, are all relatively minor and uncontroversial, such as directing the Energy Department to study implementing microgrids in wildfire-prone areas and providing for wind technician training.

“This is not my preferred approach,” Murkowski said of the modified text. She added she’d rather proceed the “good old-fashioned way through individual votes” on amendments, but senators couldn’t reach agreement and “were blocked on votes this week.”

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.

WHAT A DIFFERENCE TWO YEARS MAKES: FreedomWorks was for policy to reduce potent greenhouse gas refrigerants before it was against it.

Before the free-market advocacy group was urging senators to reject a bipartisan amendment setting limits on the coolants, it was encouraging President Trump to back a global deal phasing down the chemicals, known as hydrofluorocarbons, or HFCs.

“Your administration should now look to advance policies that further advance American competitiveness,” reads a June 2018 letter from three free-market groups to Trump. “Because of the technological prowess of American manufacturers, U.S. businesses stand to gain from this deal — ratification will open new markets at a time when demand for refrigeration, heating, and air-condition equipment is projected to grow.”

The letter, urging Trump to send the global HFC deal to the Senate for ratification, is signed by FreedomWorks policy diretor Patrick Hedger, along with representatives from Americans for Tax Reform and the American Council for Capital Formation.

What they’re saying now: “Forcibly phasing these out would impose major costs on both new refrigeration equipment and repairs to existing ones,” reads a Tuesday letter from FreedomWorks president Adam Brandon, urging senators to oppose the HFC amendment from Kennedy and Delaware Democrat Tom Carper.

The senators’ bill would direct the EPA to issue regulations limiting the refrigerants consistent with the global HFC deal FreedomWorks once lent its support to.

Brandon writes that climate-friendly substitutes to HFCs are “massively (as much as 10 times) more expensive” and transitioning to new coolants would increase appliance prices, akin to a “regressive penalty on average consumers.”

IEA’S BIROL SAYS COST OF SMALL NUCLEAR REACTORS MUST FALL TO BE VIABLE: International Energy Agency Director Fatih Birol is not as optimistic about the development of advanced nuclear reactors as he is about the potential to provide lifetime extensions for existing plants to keep running.

Birol, in congressional testimony Thursday, said extending the licenses of nuclear plants is the cheapest way to reduce emissions. He warned if policies don’t change, the share of global nuclear power generation could fall from 20% to 6%.

But during a later appearance at the Energy Department, Birol was more cautious answering a question from Josh on the potential for smaller advanced reactors to make a difference on emissions in a timely fashion.

“At the moment, I am not [optimistic),” Birol said. “The advanced small modular reactors are still in the early phases. We have to see a lot of cost coming down before they become a good candidate for significant market share”

The cost challenge: Birol cited cost as the biggest hurdle for deploying small nuclear reactors, but he said policymakers should continue to invest in the technology.

While the smaller reactors have lower capital costs, they produce less electricity than a traditional reactor, meaning they don’t enjoy the same economy of scale.

New nuclear reactors could also have a hard time competing in power markets with cheap gas and renewables, a disadvantage that could be counteracted if the federal government penalized carbon pollution with a tax or other type of price, which would make emissions-free nuclear power relatively more attractive.

WHO’S TO BLAME ON METHANE?: Energy Secretary Dan Brouillette acknowledged Thursday that methane venting and flaring from natural gas has an “adverse impact on all of our climate goals across the world.”

But Brouillette pointed his finger at other countries like Russia that he said have “less concern” about containing their methane emissions compared to oil and gas companies operating in the U.S.

“We are frankly very concerned about it with some of our international partners,” Brouillette said at a press briefing with Birol at the Energy Department, adding the U.S. is working with other countries on reducing their methane emissions.

IEA’s Birol was tougher on oil and gas majors: Birol said while the U.S. is not the leader in global methane emissions, it’s still a problem here. He said the major oil and gas companies operating in the U.S. and Europe can do better at containing methane emissions at no cost or low cost.

“Methane emissions can be easily minimized taking the right measures,” Birol said. “The companies should not be so greedy.”

During his earlier congressional testimony, Birol said controlling methane emissions is “the big homework” for oil and gas companies and “a litmus test for how serious they are to address” climate change.

BALTIMORE CLIMATE CASE STAYS IN STATE COURT: The ruling is a blow to major oil companies attempting to convince appeals court judges the lawsuit should be heard in federal court, where the companies see an easier path to victory.

Baltimore is suing more than two dozen oil companies, including BP, Chevron, and ExxonMobil, seeking damages for the industry’s role in causing climate change. The lawsuit is one of a dozen similar cases pending across the country, in which cities, counties, and states are seeking to hold fossil fuel companies liable for climate change.

Judges for the U.S. Court of Appeals for the Fourth Circuit, though, rejected oil companies’ attempts to shift the case to federal court. The oil majors had argued, in part, that federal jurisdiction over portions of fossil fuel production required the lawsuit be considered in federal court, but the judges in a ruling Friday said that connection is “too tenuous to support” moving the case.

Environmental advocates celebrated the ruling, saying the damage lawsuits belong in state court. “Just as Big Tobacco and Big Pharma were made to pay for harms they knew their products would cause, so too should Big Oil,” said Richard Wiles, executive director for the Center for Climate Integrity.

VIRGINIA PASSES 100% CLEAN ELECTRICITY BILL: Virginia state legislators completed passage of 100% carbon-free electricity legislation Friday requiring utilities to eliminate emissions by 2050.

Dominion Energy, the state’s largest utility representing 90% of the power market, must meet the goal by 2045. Appalachian Power Company, with a smaller footprint, has until 2050.

The Virginia Clean Economy Act was approved by the Senate after moving through the House of Delegates on Thursday. It allows for renewables and nuclear to meet the 100% clean electricity target, and keeps open the potential for carbon capture if Dominion can get approval on a proposal for a CCS plant from state regulators.

Otherwise all fossil fuel plants, including gas, run by Dominion must shutter by 2045.

The legislation would also commit Virginia to join the Regional Greenhouse Gas Initiative, the northeast’s cap-and-trade program covering the power sector. It would make significant investments in efficiency, establishing long-term energy reduction targets.

And it sets one of the largest energy storage targets in the country at 2.4 gigawatts by 2035.

Democrats were able to advance the legislation after gaining full control of the statehouse in 2019 for the first time in more than two decades. The bill now heads to the desk of Democratic Gov. Ralph Northam.

“This is a truly remarkable leap forward in Virginia energy policy,” said Harry Godfrey, director of Advanced Energy Economy, an association representing clean energy companies. “With passage of this legislation, practically overnight our Commonwealth goes from a laggard to a leader in the race to 100% clean energy.”

CLIMATE SOLUTIONS CAUCUS SHOWS SIGNS OF LIFE: The bipartisan House Climate Solutions Caucus has scheduled its first meeting since December for next week, Josh has learned.

The Thursday, March 12 meeting will focus on forestry issues and how it relates to climate change, including how to maintain current forests to store more carbon.

The caucus’ 65 or so members have had a hard time finding time to meet during an election year, with lawmakers also previously distracted by Trump’s impeachment trial.

The meeting is the first open to the public and media.

DEMOCRATS’ BILL SEEKS ‘CLIMATE READY’ DEFENSE DEPARTMENT: The legislation, introduced by House Democrats Joe Neguse of Colorado and Abigail Spanberger of Virginia, would require the Defense Department to outline the domestic and global threats climate change poses to U.S. national security.

Under the bill, the Defense Department would submit a report to Congress on those threats, specifically addressing the ways climate change could “exasperate or create new global conflicts.” It would also direct the Defense Secretary to outline ways to respond to climate threats.

The Rundown

Reuters OPEC oil cuts deal falls apart as Russia resists, crude prices plunge

Bloomberg US oil majors are snubbing climate-conscious rivals in Europe

Los Angeles Times Environmental disaster or key to a clean energy future? A new twist on hydropower

Bloomberg Trump plans to fight ruling risking refinery biofuel waivers

Calendar

TUESDAY | MARCH 10

10 a.m. 366 Dirksen. Interior Secretary David Bernhardt testifies before the Senate Energy and Natural Resources Committee on the agency’s Fiscal Year 2021 budget request.

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