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‘SIGNS OF LIFE’ IN OFFSHORE DRILLING AHEAD OF BIDEN BAN: The Trump administration saw strong results in an offshore oil lease sale in the Gulf of Mexico this morning, in what perhaps could have been a rush of company interest before Joe Biden can impose his promised ban on new federal drilling.
Twenty-three companies submitted bids to buy drilling rights in the Bureau of Ocean Energy Management’s lease sale, which offered about 78 million acres across Texas, Louisiana, Mississippi, Alabama and Florida. There were 105 bids across 93 offshore tracts, generating $120 million in high bids. Oil and gas giants BP and Shell, along with Equinor, made bids. That’s a much better result than the last Gulf lease sale in March amid the oil price crash, when there were 84 bids that generated $93 million.
“I am very excited,” Mike Celata, director of BOEM’s Gulf of Mexico office, told reporters on a press call. “The Gulf has a long future.”
But environmental activists are already pressuring Biden to fulfill his promise to ban new offshore drilling, after BOEM proposed another lease sale for March — when President Trump is out of office — for all of the available unleased areas in federal Gulf waters.
Katharine MacGregor, the Interior Department’s deputy secretary, said the strong results from the lease sale show how companies are anticipating oil demand returning after the pandemic. It would be another seven to 10 years before companies actually develop the leases they bid on today, so today’s low prices aren’t important.
“There was good signs of life in this lease sale,” she told reporters.
MacGregor and Deputy Energy Secretary Mark Menezes told reporters that global oil demand is likely to reach near normal levels in the future, suggesting a ban would shift production to other countries and do little to contain emissions.
“What we see today in this sale and what we will see in the future in the Gulf is companies evaluating what the need is globally and where we can send that oil,” MacGregor said. “There is acknowledgment these revenues are incredibly important to the federal treasury and these jobs extremely are important to the Gulf and entire nation who uses this oil.”
Added Menezes: “We will see a continued need for this oil. What you saw today is a long term outlook.”
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.
OFFSHORE ENERGY INDUSTRY’S WISH LIST: The offshore energy industry is expecting a mixed bag of policies from the Biden administration. Biden should reverse his proposal to ban new offshore oil and gas drilling in federal waters, which would cost nearly 200,000 jobs and strip the U.S. government of billions in dollars of revenue, the National Oceans Industries Association warned in a list of policy priorities yesterday.
But the Biden administration has an opportunity to boost the U.S’ nascent offshore wind industry as part of its clean energy goals by enacting leasing and permitting reforms, and reversing Trump’s recent withdrawal of certain areas of the Atlantic Coast from energy development.
NOIA also encourages Biden to appoint a “renewable energy permitting czar.”
SOLAR AND WIND SEEK BIG WINS BEFORE AND AFTER BIDEN TAKES OFFICE: Renewable energy groups are plotting big gains during the Biden administration, but they also don’t want lawmakers to forget about the emergency relief they say they need before Biden even takes office.
In the next few months, the renewable energy industry is operating with a foot in two separate doors. Groups like the Solar Energy Industries Association and the American Wind Energy Association are seeking policies from Biden on day one that set ambitious national goals for renewable energy deployment and that remove barriers to development, including Trump’s tariffs on foreign-made solar panels.
They’re also asking Biden to strongly lobby Congress for extensions to existing tax credits and creation of new tax credits (for offshore wind and energy storage, for example).
But they don’t want Congress, especially Democratic lawmakers, to bank on bolder action on renewables under Biden and neglect emergency relief the clean energy industry says it can’t wait on.
In a letter to congressional leaders yesterday, dozens of clean energy groups called on the lawmakers to include support for clean energy in must-pass legislation before the end of this year. The groups — which included SEIA, AWEA, the American Council on Renewable Energy, and many other clean energy advocates — are asking Congress to extend clean energy tax credits to account for coronavirus-related delays and include a direct pay option to bypass struggling tax equity markets.
“Thirteen percent of clean energy workers have, through no fault of their own, lost their jobs due to COVID-19,” said Bill Parsons, ACORE’s chief operating officer.
“Every week that passes without the emergency relief they need means further delays or outright cancellations of the projects they would otherwise be working on,” he told Abby. “If lawmakers’ goal is to support workers hurt by the pandemic and accelerate the nation’s economic recovery, then clean energy workers should be included in any must-pass legislation this year.”
It could be a tricky message politically: Renewable energy groups could have to both persuade some Republican lawmakers not to block their requests as a “liberal wish list” and convince Democratic lawmakers not to hold out for political reasons (namely, the prospects of something bigger on clean energy if Democrats win the Georgia runoffs and after Biden takes office).
“We have really made the case on the Hill that this pandemic has impacted our ability to deploy,” said Abigail Ross Hopper, SEIA’s president. She told reporters yesterday that even though solar is still growing, the pandemic has had a “detrimental impact” on the industry and employment. “Those two things can be true at the same time.”
Hopper added she thinks there is a “pretty clear understanding” among lawmakers “that extending the investment tax credit and making it refundable will help address the challenges that our industry has faced, but more importantly, really provide a roadmap for getting people back to work.”
Renewable energy groups are readying a more aggressive clean energy push under Biden: SEIA, for example, is having talks with the Biden transition team about its priorities, Hopper said. The solar group has laid out a number of day-one requests for Biden, including removing Trump’s section 201 tariffs on foreign solar panels, installing a “climate czar” in the White House, and sending legislation to Congress to extend solar tax credits by five years and create a new incentive for energy storage.
AWEA, in a policy roadmap released yesterday, is asking Biden to issue executive orders in his first 100 days that set a national goal to achieve 100% clean energy by 2050, commit the federal government to buy 35% renewable power by 2025, and expand renewable energy development on federal lands.
The wind energy group doesn’t directly ask for an extension of its existing tax incentives, which expire this year, but it is seeking new incentives for offshore wind and a technology-neutral clean energy incentive.
FERC NOMINEES ADVANCED: The Senate Energy and Natural Resources Committee approved by voice vote the nominations of Republican Mark Christie and Democrat Allison Clements to FERC, which would, if the candidates are confirmed, give the chronically shorthanded commission a full slate.
Their nominations move to the Senate floor, where GOP Chairman Lisa Murkwoski hopes they’ll be confirmed in the lame duck period.
Christie is chairman of the Virginia State Corporation Commission, the state’s electric utility regulator, while Clements is a clean energy lawyer and consultant who has represented environmental groups, utilities, and independent power producers, and more. Christie would become the only state regulator at FERC.
“Both are incredibly well-qualified to serve on the commission,” said Sen. Joe Manchin, the committee’s top Democrat.
Their confirmation would give Republicans a 3-2 majority at FERC, but a Democratic chairman chosen by Biden would set the agenda.
Bonus: Also at the vote, Democratic Sen. Maria Cantwell criticized the Trump administration’s “unjustified demotion” of Republican commissioner Neil Chatteree from chairman.
NEVER-ENDING ROLLER COASTER FOR OIL DEMAND: U.S. oil demand fell last week to 19.6 million barrels per day after jumping 10% to 20.2 m/bd the week prior, the Energy Information Administration reported today in its Weekly Petroleum Status report.
Gasoline and jet fuel consumption were up down, while diesel was up.
EIA reported crude inventories rose by 0.8 million barrels last week to 489.5 million barrels, a smaller increase than the American Petroleum Institute reported. Oil prices are modestly higher today on hopes that OPEC+ will decide to postpone its planned production increase in January.
BORIS JOHNSON’S ‘GREEN INDUSTRIAL REVOLUTION’: Biden will have some competition if he wants to make the U.S. the global leader in clean energy. British conservative prime minister Boris Johnson announced a 12 billion pound ($15.9 billion) plan yesterday for a “green industrial revolution” that would ban new sales of petroleum and diesel cars by 2030 en route to reaching net-zero emissions by 2050. He’d allow sales of hybrid vehicles until 2035.
Johnson also vowed to make the U.K. the “Saudi Arabia of wind,” quadrupling offshore production to 40 gigawatts by 2030, with enough capacity to power every home by that year. He promised major investments in hydrogen, new nuclear power — including small reactors — electric vehicles, green buses, and energy efficiency.
The U.K. will remove 10 million tonnes of carbon dioxide this decade through carbon capture, Johnson said, and plant 30,000 soccer fields’ worth of trees.
Britain’s commitments come ahead of it hosting next year the G-7 and the U.N. Climate Change Conference, where Biden is expected to work together with European allies to press for stronger pledges to the Paris agreement.
BIDEN TAKES ON INDIA’S CLIMATE CHALLENGE: Biden and India Prime Minister Narendra Modi discussed “tackling the threat of climate change” in a phone call yesterday, according to a readout.
The U.S. and India, along with Brazil, are the only three of the 10 largest economies yet to commit to a net-zero emissions goal. India, along with China, resisted adopting targets as strict as developed countries during the Paris negotiations. India’s cumulative emissions are much lower than China and the U.S.
But the world won’t be able to reach global decarbonization without major changes from India, one of the fastest growing economies where coal demand over the next five years is expected to grow more than any other country.
WARREN PRESSES SEC CHAIR ON CLIMATE RISK DISCLOSURE: Sen. Elizabeth Warren blasted Securities and Exchange Commission Chairman Jay Clayton for not requiring companies to disclose the risks they face from climate change, calling for new SEC leadership “who will put this climate crisis at the top of the agency’s agenda.”
During a Senate Banking Committee hearing yesterday, Warren pressed Clayton repeatedly on whether the SEC had a mandatory disclosure standard for climate risks. Clayton responded that the SEC requires companies to disclose climate risks “to the extent that it’s material to an investment,” an answer Warren took issue with because she said it allows companies to decide not to report any climate risks.
Warren also noted the Federal Reserve’s recent increasing focus on climate change as a risk to financial markets. The Fed’s recent financial stability report included discussion of climate change for the first time ever, and Warren said the report suggested more reporting and disclosure of climate risks would be beneficial.
Clayton, for his part, told Warren he’s been talking regularly with his global counterparts, former Bank of England governor Mark Carney, and others about how to address climate risks “in a meaningful way.” He also said he is supportive of the Fed’s recent report, but he added investors want “decision-useful information.”
The Rundown
Washington Post How a pile of toxic pollution was dumped in a community of color
The Hill Haaland being vetted by Biden team for Interior secretary
San Diego Union-Tribune Sempra to build LNG export facility in Baja
Reuters Orsted strikes deal with labor union on US offshore wind development
Calendar
WEDNESDAY | NOV. 18
2:30 p.m. 366 Dirksen. The Senate Energy and Natural Resources Committee holds a hearing to consider various public lands, forests, and mining legislation.
