Daily on Energy: Democrats try to please everybody with climate plan

The 538-page plan, compiled over a year and a half by Democratic staff of the House’s special climate committee, endorses both a clean electricity mandate and carbon pricing, without specifying a preference as the core means to eliminate emissions from the power sector by 2040. Democrats’ support for carbon pricing is softer (it’s “not a silver bullet,” the plan says), and the report doesn’t specify a preference for how to use the revenue, avoiding wading too deep on an idea that has become less popular among liberals.

The plan, containing provisions from 120 already-introduced bills, has a heavy emphasis on “environmental justice” and protecting African-American communities from pollution, reflective of a national reckoning over police treatment of black people.

It also targets the fossil fuel industry, forcing public companies to disclose their climate risk and banning new oil and gas leasing on public lands and waters (planks shared by Democratic presidential nominee Joe Biden).

But Democrats leave the door open for nuclear power and carbon capture for fossil fuel plants as part of its zero-carbon mandates, and they are silent on the future role of fracking.

Planting partisan flags: The plan by the climate committee, which cannot write bills but only recommend policy, is mostly meant as a template for what climate policy could look like if Democrats control all levers of power in 2021.

“I wish it weren’t a fight, but it will be a fight as long as it needs to be,” House Speaker Nancy Pelosi said of climate change policy at a press conference outside the Capitol. “We will turn this report into law, saving the planet.”

It’s a marked contrast from Republicans, who are crying foul over process (see more on that below), while committing to an agenda that does nothing to limit future fossil fuel use.

“Nancy Pelosi just released her climate change agenda – written by Democrats and for China,” Republican Leader Kevin McCarthy told Josh, highlighting GOP-supported ideas like carbon capture, supporting advanced nuclear energy, planting trees, and combating plastic pollution.

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EXCLUSIVE…CLIMATE COMMITTEE’S TOP REPUBLICAN GRAVES FEELS LEFT OUT: Pelosi’s special climate change committee is a pointless waste of money, says the panel’s top Republican Garret Graves, who is accusing Democrats of breaching trust by releasing their report this morning without including GOP members.

“It certainly does undermine trust, and not just trust, but the viability or the value of participating in this,” Graves told Josh in an interview Monday.

“If I had known then what I know now, why did we go through this whole waste of money by putting a committee together, wasting money on staff, and do a dog and pony show with hearings? You don’t need us to do this. You certainly didn’t need to spend taxpayer funds to do it.”

Republicans were never going to endorse Democrats’ big ideas, but Graves said GOP members agree on at least some narrow policy issues, such as promoting adaptation measures, spending and tax credits for clean energy technologies, and modernizing the electricity grid.

Until recently, Democratic Chairwoman Kathy Castor of Florida and Graves had planned to release a report jointly, as the committee’s ground rules called for.

Democrats shifted gears after the disruptive coronavirus hit.

Castor, however, told Josh that committee Democrats requested Republican input and ideas “all the way along” and that “our work is not done.” She said the Democratic report contains bipartisan bills.

“This certainly is a different tone from ranking member Graves than the one he used just last week, when we agreed to work on bipartisan climate recommendations in the coming months,” Castor said. “I encourage Republicans to publicly share their ideas to protect our communities from the next flood or the next big hurricane.”

SHELL TAKES $22 BILLION WRITE-DOWN OF OIL AND GAS ASSETS: Shell became the second oil major since the pandemic to acknowledge its oil and gas assets are worth less than expected, announcing Tuesday it is writing down its assets by up to $22 billion because of low prices.

BP issued a similar $17.5 billion write-down in assets earlier this month.

Luke Parker, vice president of corporate analysis at Wood Mackenzie, said the decisions reflect a larger trend that shows the biggest industry players are concerned about peak oil demand arriving.

“The impairment Shell has announced is about more than an accounting technicality, or an adjustment to near-term price assumptions. It’s about fundamental change hitting the entire oil and gas sector,” Parker said. “Within this write down, Shell is giving us a message about stranded assets, just like BP did a few weeks ago.”

EXPLAINING FED’S PURCHASES OF ENERGY BONDS: You might have seen new data released Sunday that showed the Federal Reserve bought about $37 million in energy and utility company bonds, with some of the biggest companies among them.

Among the companies the Fed supported, as part of the Secondary Market Corporate Credit Facility to help industries through the pandemic, included Exxon Mobil, Duke Energy, FirstEnergy, and Marathon Petroleum.

David Livingston, a senior analyst with the Eurasia Group, calculated that of the 800 companies helped by the Fed, one-fifth were in the energy and utility sectors.

But that is not too far off from the energy and utility sector’s share (around 14%) of all outstanding U.S. corporate debt, Livingston noted in an email to Josh.

“The purpose of the program is to prevent credit spreads from widening to levels that would create stress and disruption in financial markets, and then in turn in the real economy,” Livingston said. “Because this program is more focused on the functioning of credit markets overall, and is less so about individual company support, that’s why this program doesn’t have some of the same stipulations as other Fed lending mechanisms, including provisions on trying to maintain employment levels and so forth.”

Livingston said the Fed can do more bond-buying in the months ahead, but whether it uses the full $750 billion in purchases authorized to it will depend “on how financial conditions, and credit spreads, evolve over the rest of 2020.”

MURKOWSKI AND MANCHIN AREN’T GIVING UP ON THEIR ENERGY BILL: Passing the bill, which would be the biggest update to energy law in over a decade, is even more important now in the pandemic and economic downturn, said Sens. Lisa Murkowksi and Joe Manchin, the top Republican and Democrat on the Senate Energy Committee, in remarks on the floor Monday.

The senators are aiming to bring their bill back to the Senate floor this year, after a fight over separate legislation to limit greenhouse gas refrigerants known as HFCs sank the bill in March. Lucy Murfitt, chief counsel for the Senate Energy Committee Republicans, said Monday that Environment Committee senators fighting over the HFC provisions are making “real progress,” and if a deal is reached, the energy bill could be back up for a vote as soon as July.

Murkowski and Manchin aren’t waiting until then, though: Murkowski has offered two pieces of the broader energy bill — legislation on advanced nuclear energy and on critical minerals — as amendments to the defense bill the Senate is considering this week. She did so to provide a “second pathway” in case the whole bill can’t come to the floor, but it isn’t her preferred option, she said.

“My clear, clear, clear and undeniable preference is that we engage all of these measures as part of the energy package,” Murkowski said. “We are not taking our foot off the gas.”

She added the worst case option would be to punt the issue to next Congress (it’s worth noting Murkowski will no longer be chairman of the Energy Committee then because she is term-limited). “It would be a mistake, a significant mistake for Congress to simply give up on energy policy for yet another year,” she said.

IT’S INFRASTRUCTURE WEEK IN THE HOUSE: The House begins consideration today of Democrats’ $1.5 trillion, climate-focused infrastructure package, and the bill already faces a veto threat from the White House, which compared it to the progressive Green New Deal.

Energy groups, too, are raising concerns with Democrats’ bill, particularly with the boost it offers to electric vehicles through expanded tax credits and massive investments in charging infrastructure. A coalition of energy and agriculture groups, including the American Petroleum Institute and the American Farm Bureau, told congressional leadership in a letter Monday that such efforts “singularly benefit electric vehicle owners, a small and affluent segment of the driving public, at additional cost to all other Americans.”

Nonetheless, the bill is likely to pass on party lines later this week: And climate activists say they’ll keep increasing pressure on President Trump and Republican lawmakers to include climate and clean energy provisions in pandemic recovery measures. “Voters are clamoring for climate action and economic relief,” said Lori Lodes, executive director of Climate Power 2020, a political group. “President Trump only has lies and scare tactics to offer.”

TRUMP INFRASTRUCTURE EXECUTIVE ORDER IS ‘PLAINLY UNLAWFUL,’ ATTORNEYS GENERAL SAY: The attorneys general of 15 states and D.C. are calling for the withdrawal of Trump’s executive order allowing agencies to waive environmental reviews to allow infrastructure projects to be built during the coronavirus pandemic.

Exemptions from bedrock environmental laws like the National Environmental Policy Act, the Endangered Species Act, and the Clean Water Act are only authorized for physical emergencies like natural disasters where delays “would have stalled life-and-death federal government responses,” the attorneys general said in a letter Monday to Trump. They also raise concerns the executive order lacks transparency and would limit public input on infrastructure projects.

“Make no mistake, environmental health is public health and instructing federal agencies to take an end run around measures that protect the environment betrays the public welfare,” the attorneys general write.

ENVIRONMENTAL AND LABOR ACTIVISTS UNVEIL ECONOMIC TRANSITION PLATFORM: The platform, spearheaded by the Just Transition Fund, was developed by more than 80 organizations, including environmental groups, labor unions, and tribal and local leaders.

The National Economic Transition platform calls for focusing investments on economic development projects within cities and counties that are at risk of facing coal plant retirements. It also calls on policymakers to hold coal companies accountable to protect worker pay and benefits when undergoing bankruptcy proceedings. The platform doesn’t have a price tag, but calls for a “big and bold” investment orders of magnitude greater than what’s invested in coal industry-heavy places today.

Investing in local development versus companies: The platform looks toward the future, as opposed to pouring money back into coal companies, its supporters say.

For example, Veronica Coptis, executive director for the Center for Coalfield Justice, pointed to a recently announced Energy Department investment in coal product innovation centers. “What communities could do with community-driven projects with $122 million can extend so much further than what coal companies can do,” providing longer-lasting benefits to those places, she said.

The Rundown

New York Times With much of the world’s economy slowed down, green energy powers on

Bloomberg Norway’s $2.6 billion green bet could help the whole planet

Wall Street Journal Coronavirus sends oil prices on a wild, six-month ride

Bloomberg Law Covid-19 fears spur more cars on roads, threatening air quality

Calendar

TUESDAY | JUNE 30

2:30 p.m. 366 Dirksen. The Senate Energy and Natural Resources Committee holds a hearing to examine the impacts of the COVID-19 pandemic in the territories.

WEDNESDAY | JULY 1

1 p.m. The American Conservation Coalition holds a virtual conversation with GOP Rep. Cathy McMorris Rodgers of Washington, streamed live from its Facebook.

6 p.m. The American Conservation Coalition holds a virtual roundtable discussion with GOP Reps. Tom Reed of New York, Bruce Westerman of Arkansas, and John Curtis of Utah, streamed live from its Facebook.