Democrats Split Over Energy as Gas Prices Rise, Ukraine at War

Democratic efforts to define the party’s energy policies are facing mounting pressure as surging gasoline prices, Russia’s invasion of Ukraine, and the collapse in Congress of President Joe Biden’s climate spending package heighten scrutiny of their agenda.

American consumers have confronted rising energy costs at home and at the gas pump for months, while the escalating conflict in Ukraine puts further pressure on prices due to Europe’s reliance on Russian energy. In Congress, the administration’s ambitious Build Back Better bill, which contains $550 billion worth of clean energy and climate provisions, is near death.

That global instability in the energy market is creating friction within the Democratic party. Progressive Democrats and their environmentalist allies consider natural gas and domestic critical mining harmful to communities. Those in the more moderate wing of the party see both as crucial to a successful clean energy transition and national security.

“On one hand, the left is clamoring for all electric vehicles and then with the other hand, with the same movement, they won’t let America mine for any of the minerals,” said former Sen. Mary Landrieu (D-La.), who supports natural gas production and led the Energy and Natural Resources Committee during her Senate tenure. “There’s got to be a reasonable, central path, a middle ground, and that middle ground is innovation, investment, and technology.”

Photographer: David Paul Morris/Bloomberg

Biden on Tuesday announced an initiative with the private sector to expand the domestic critical minerals supply chain and reduce reliance on foreign imports to advance clean energy and electric vehicle production. He also announced sanctions this week on Russia amid President Vladimir Putin’s invasion of Ukraine as well as on the company behind the Nord Stream 2 pipeline from Russia to Germany. Biden warned Americans to brace for higher energy costs and promised to tap oil from the country’s strategic reserves if needed to keep a lid on prices.

Landrieu, who spoke to Bloomberg Government before the Biden announcements on critical minerals and Russia, said the White House messaging on energy policy has at times over the past year been “wobbly, very confusing, and sometimes contradictory.”

The Louisiana Democrat, who is a lobbyist for Van Ness Feldman, and former Sen. Heidi Heitkamp (D-N.D.), in January joined the leadership council of Natural Allies for a Clean Energy Future, a coalition of labor, business and industry leaders touting natural gas as important to the clean energy transition. The two placed a sponsored story on Wednesday in Politico that said it was time for “an honest conversation about energy.”

Heitkamp, who successfully pushed for the expansion of a carbon sequestration tax credit with a bipartisan group of lawmakers when she served in the Senate, said there “hasn’t really been an energy policy” from the administration so far. “Way too often, people think when they are having a climate discussion, they are having an energy discussion,” she said in an interview earlier this month. “But the goals of a good energy policy, which is redundant, reliable, affordable, are not always considered when people look at climate policy.”

Clean, Affordable Energy

While natural gas has helped reduce carbon emissions, progressive Democrats such as Reps. Alexandria Ocasio-Cortez (N.Y.) and Rashida Tlaib (Mich.) say there is no place for natural gas in a clean energy future. “It’s not a transition fuel,” Ocasio-Cortez said in a recent interview, pointing out the potent methane emissions released by venting and flaring of natural gas.

Tlaib during a Feb. 9 congressional hearing blasted big oil companies, including Exxon Mobil Corp., for convincing people that “renewables and natural gas go together like peanut butter and jelly.”

“My residents are in some of the most polluted zip codes in the nation,” she said during the House Oversight and Reform hearing. “They’re not talking about Russia and China. They are talking about their kids getting asthma.”

The legacy of pollution and public health crises in disadvantaged neighborhoods, many of them communities of color, makes for a hard conversation about energy production.

“Extraction, no matter what it is, impacts the communities,” said the national field manager for Moms Clean Air Force, Patrice Tomcik, who became an environmental activist seven years ago because “oil and gas come to my town.”

Tomcik lives outside of Pittsburgh and her kids attend school a half a mile away from an oil and gas well pad. She said while natural gas burns cleaner than coal, the process of extracting it still poses health risks. “We need to have clean, affordable energy that is healthy for communities. That’s what makes it hard, but not impossible.”

She said the strides that Congress, the administration, industry, environmental activists, and the global community have made in slashing methane emissions, is a model policymakers should emulate on clean energy. “When I started this seven years ago, I never thought industry would even be talking about methane rules,” Tomcik said.

Critical Minerals

Domestic mining is another “difficult” conversation for Democrats, Ocasio-Cortez said, but one that “needs to be had.”

“There is an openness to that conversation, but we need to dig in deeper and make sure we are protecting communities, the same communities that are often victimized by the fossil fuel industry,” said the architect of the Green New Deal.

After Biden announced his push to boost “sustainable domestic production of critical minerals and materials,” several environmental and conservation groups that have typically not favored more domestic mining released statements of support for the initiative.

Republicans have been vocal about the incongruity of Democrats’ push for more electric vehicles, saying the reluctance to increase mining of critical minerals in the U.S. means instead relying on imports from countries with dubious human rights records.

Democrats such as Rep. Debbie Dingell (Mich.) and Energy Secretary Jennifer Granholm have been bullish on boosting critical mineral processing and manufacturing domestically.

“The batteries used for electric vehicles have to be made here,” Dingell said in January during an online briefing with the Zero Emission Transportation Association on EV costs and federal spending. Dingell said at the time she was working on bringing labor unions, including the United Auto Workers, into the discussion over ensuring that “we are mining those minerals here in the U.S.”

Energy and Elections

Rising energy prices stemming from inflation and exacerbated by the conflict in Ukraine will play a role in November’s midterm elections.

Vulnerable Democrats, including Sen. Mark Kelly (Ariz.), have introduced legislation to pause the federal gasoline tax until Jan. 1, 2023. Other Democrats have asked Granholm to consider halting permits for U.S. liquefied natural gas facilities until the department reviews such exports and their impact on domestic energy prices.

But neither strategy enjoys support from the majority of the party. Banning energy exports is not “the answer to the challenge that we face with rising gas prices domestically,” said Rep. Lizzie Fletcher (Texas), a frontline Democrat and member of the natural gas caucus. “It’s a very complex global market.”

Fletcher said she has been talking to people in her district, which includes part of Houston, about how quickly they can supply more LNG to Europe “because obviously there is a massive infrastructure buildout that goes along with that process.” But if there is uncertainty over whether the U.S. will continue LNG exports, “then that is going to discourage that kind of investment that we need to be able to do.”

Fletcher called the politicization of energy policy “dangerous.” Policymakers and other stakeholders must take a “very sober look at the challenges in front of us, the opportunities, the foreign policy issues, the domestic policy issues, and try to do that in a way where it doesn’t become a wedge issue in our elections,” she said.

Heitkamp said rising energy prices aren’t being driven by the administration’s policy changes, but rather the market, and the fact that the U.S. is coming out of a period of low energy prices and a pandemic.

Now is the time to achieve a “meaningful, sustainable, and fact-driven” policy on energy and climate, she said. “If we don’t do it now, are we giving up, or are we just going to stay in this roller coaster depending upon every four years who gets elected?”

To contact the reporter on this story: Kellie Lunney in Washington at klunney@bloombergindustry.com

To contact the editors responsible for this story: Zachary Sherwood at zsherwood@bgov.com; Robin Meszoly at rmeszoly@bgov.com