ENERGY BRIEFING: Democratic Senators Meet on Climate Agenda

Climate provisions in the Build Back Better bill are still in flux, Sen. Tina Smith (D-Minn.) told reporters yesterday after a meeting with other Democrats and Senate Majority Leader Chuck Schumer (D-N.Y.), Kellie Lunney reports.

“There’s really no news coming out of that meeting,” she said. “Everybody just sort of talked through where we are, and the long and the short of it is, I think there are good conversations, but it’s not nailed yet.”

Environment and Public Works Chair Tom Carper (D-Del.) also participated in the meeting. He said he was hopeful his committee this week would release its portion of the reconciliation bill, which includes several climate provisions including a possible methane fee on fossil fuel companies. “We’re just looking forward to meeting with the parliamentarian this week, and with our Republican colleagues, to go through our language and to see if we pass the Byrd rule test,” Carper told reporters. He said lawmakers have made progress over the last week on climate provisions.

Schumer has said he wants the Senate to vote on the reconciliation bill before Christmas but many aspects of the legislation, including climate language, are still being negotiated.

A compromise methane fee crafted in the Senate is expected to win the backing of a key holdout, Sen. Joe Manchin (D-W.Va.), according to Carper, Ari Natter and Jennifer A. Dlouhy report. “After a lot of give and take I think we’ve developed a principle compromise that I expect will get a vote and my hope and expectation is it will get approved,” he told reporters yesterday. Their compromise addresses criticisms about an earlier approach to the methane fee, including that it would punish oil and gas producers, Carper said.

Still, yesterday afternoon Manchin wouldn’t say one way or the other if he supports the methane fee where it stands at the moment when asked about his position by reporters, Kellie Lunney reports.

Biden’s Plan Alone Won’t Meet Climate Goal: Climate provisions in Biden’s tax-and-spending plan are critical to fulfilling his pledge to halve U.S. greenhouse gas emissions by 2030 but are far from enough, according to a new analysis that finds sweeping changes are required to confront global warming.

The U.S. also will have to rapidly accelerate adoption of electric vehicles, impose aggressive emissions limits on individual industries and deploy nascent, yet-to-be-commercialized technologies, according to the World Resources Institute paper released today. That’s on top of expanding tax incentives for renewable power, advanced energy manufacturing and building efficiency upgrades that are contained in the president’s economic legislation.

“We need a comprehensive suite of policies,” said lead author Devashree Saha. The spending plan pending in Congress and a $550 billion infrastructure package signed last month put the 2030 climate goal “within reach, but it does not take us all the way.”

Biden’s Build Back Better plan contains about $555 billion worth of climate provisions, but it is still subject to changes amid Senate negotiations. Read more from Jennifer A. Dlouhy.

• Environmental groups and Democratic strategists are trying to overcome opposition to the agenda’s $2 trillion price tag by arguing its climate provisions would reduce flooding, extreme heat and the intensity of storms, outweighing concerns about the measure’s inflation effect. “The fiscal case for all these investments is incredibly compelling,” said Collin O’Mara, head of the National Wildlife Federation. Read more from Jennifer A. Dlouhy.

Groups Urge Senate To Retain Union Provision in EV Tax Credit: More than 60 environmental groups, labor unions, and consumer organizations want a bonus tax credit for electric vehicles manufactured in the U.S. by union workers to stay in the Build Back Better bill. The federal EV tax credit in the House-passed legislation would provide rebates of up to $7,500 for consumers and an extra $4,500 incentive for vehicles made by union-represented workers.

Manchin has said he opposes the union bonus provision. Toyota, whose workers are not unionized, has a plant in Manchin’s state. “No company gets fewer incentives because of the collective bargaining bonus—even non-union companies’ vehicles remain eligible for incentives up to $7,500—but the collective bargaining bonus rightly offsets the unfair advantage enjoyed by companies that have fought workers’ efforts to join together by forming a union,” said the Dec. 15 letter to senators.

• Senate Republicans plan to mount dozens of procedural challenges to Democrats’ tax-and-spending plan, seeking to strip provisions out of the bill during a review by that chamber’s parliamentarian, Senate Finance Committee ranking member Mike Crapo (R-Idaho) said. He confirmed one of the objections will be on Democrats’ proposal to create the additional $4,500 tax credit for people who buy U.S.-made, union-assembled electric vehicles. Crapo said the “Byrd Bath” process “should” go past the upcoming holiday, based on how long past deliberations have taken,” Colin Wilhelm reports.
• Related: Ford Targets Tesla as It Seeks to Build 600,000 EVs by 2024

Fans of Tax Breaks on Green Land Fight U.S. Curbs: Organizers of syndicated conservation easements the IRS considers abusive tax shelters spent years lobbying amid an agency crackdown. Now, they are fighting legislation that could disallow deductions claimed by wealthy Americans and lead to billions of dollars in taxes. Democrats are considering whether to include restrictions on syndicated easements in the Build Back Better Act. But promoters of the land deals are pushing hard with Congress to keep the new measures out of the bill. “We’ve worked an awful long time to defeat this,” said Robert Ramsay, president of Partnership for Conservation, a non-profit that represents several deal promoters fighting the Internal Revenue Service. Read more from David Voreacos and Kaustuv Basu.

Happening on the Hill

Reef Restoration Legislation Markup: The Senate Commerce, Science and Transportation Committee today will consider bipartisan legislation (S. 46) from Sens. Marco Rubio (R-Fla.) and Brian Schatz (D-Hawaii) that would reauthorizes through fiscal 2024 the Coral Reef Conservation Program and establish a U.S. Coral Reef Task Force. The House Natural Resources Committee approved companion legislation (H.R. 160) in October.

Senators Release Bipartisan Biofuels Bill: Sens. Amy Klobuchar (D-Minn.) and Chuck Grassley (R-Iowa) introduced bipartisan legislation that would prohibit the EPA from reducing the minimum applicable volume of biofuels into transportation fuel once the Renewable Volume Obligations levels are finalized for any given year, the lawmakers said in a statement. That would prevent the EPA from retroactively reducing 2020 or future finalized RVO levels, they said. The legislation comes after the EPA last week called for cutting biofuel-blending quotas retroactively for 2020.

Energy & Natural Resources

Report Ranks Clean Energy Cities: San Francisco earned the top spot for advancing clean energy goals across multiple policy areas, according to the 2021 City Clean Energy Scorecard released today by the nonprofit American Council for an Energy-Efficient Economy, Kellie Lunney reports. The group, which has produced an annual scorecard since 2013, measured cities’ efforts in five areas: community-wide initiatives, buildings policies, transportation, energy and water utilities, and local government operations.

California cities occupied four of the top 10 slots. After San Francisco, the top 10 cities for clean energy in 2021 are Seattle; Washington, D.C.; Minneapolis; Boston and New York City (tied); Denver; Los Angeles; San Jose; and Oakland. The scorecard measured 100 U.S. cities between May 2020 and July 2021. The cities assessed took at least 177 new actions to advance clean energy during that time, according to the report. Of those actions, 38% were related to the creation and adoption of a clean energy plan, 34% involved greater energy efficiency in buildings, and 28% focused on clean energy infrastructure. The pandemic delayed or altered many cities’ green plans, but urban areas increased their clean energy efforts in late 2020 and early 2021, the report found.

Still, metropolitan areas have a way to go on clean energy, according to ACCEE. “Cities continue to make limited progress toward meeting their greenhouse gas (GHG) emissions goals,” the executive summary said. “While 63 of the 100 cities we analyzed have adopted a community-wide GHG goal, only 38 have released sufficient inventory data to assess progress toward these goals. And of these, only 19 cities are on track to achieve their near-term GHG goal.”

ACCEE increased the scorecard’s focus in 2021 on racial and social equity initiatives to promote clean energy goals among disadvantaged and minority communities. Minneapolis, San Francisco, and New York City, occupied the top spots on the equity metric. But only 30 of the 177 total new clean energy actions assessed were equity-driven initiatives, the scorecard found. The new measurement resulted in lower scores overall for some cities. “Many cities can improve their scores by creating a formal clean energy decision-making body of historically marginalized community residents, supporting minority- and women-owned businesses in securing local government clean energy contracts, and pursuing policies and programs designed to reduce the energy use and costs of affordable and rental housing,” the report said.

U.S. Says Crude Export Ban Is Off the Table: Energy Secretary Jennifer Granholm extended an olive branch to the oil industry yesterday, telling executives a crude export ban is not under consideration, while assuring them that the administration was “not a bogeyman.” Granholm made the virtual remarks to an outside advisory group with members including executives from such companies as Exxon Mobil and Royal Dutch Shell. Her conciliatory tone comes as the administration’s policies on energy production, which included a temporary halt to oil leasing on federal lands and the termination of a permit for the Keystone XL pipeline, have drawn the ire of industry. “I do not want to fight with any of you,” Granholm told the National Petroleum Council. “I do think it’s much more productive to work together on future facing solutions.” Read more from Ari Natter.

Rich Nations Outpace on Clean Energy Investments: Despite a record amount of investments globally in solar farms, electric vehicles and other low-carbon projects, less money went to countries last year that have contributed the least to climate change. Investments in developing economies fell 10% to $195 billion, equal to 43% of the total, according to BloombergNEF’s annual Climatescope survey. Developed nations, which have historically caused the most environmental damage, received $262 billion. “Investors’ willingness to invest in poorer parts of the world really seemed to stall in 2020 as the pandemic took hold,” said Luiza Demôro, head of energy transitions research at BNEF. Read more from Saijel Kishan.

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Environment & Chemicals

Tribal Voices Get White House Ear But Still Waiting for Results: Tribal voices say they’re finding more ways to get their concerns in front of the Biden administration, even if that increased access isn’t always translating into wins on environmental protection and climate action. Biden has directed all federal agencies to make “regular, meaningful, and robust consultation” with tribal nations, noting that Native Americans are disproportionately impacted by health and economic disparities and worsening climate impacts. But it’s unclear whether that message has filtered down to federal agencies and departments that interact directly with tribes, said Julia Bernal, a member of Sandia Pueblo and director of the Pueblo Action Alliance. Read more from Dean Scott.

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• EPA to Miss Chemical Deadlines, Exposing Public to Risks
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• Sideline Managers Who Tampered With Reviews, EPA Told

To contact the reporters on this story: Zachary Sherwood in Washington at zsherwood@bgov.com; Kellie Lunney in Washington at klunney@bloombergindustry.com

To contact the editors responsible for this story: Giuseppe Macri at gmacri@bgov.com; Michaela Ross at mross@bgov.com