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GOP KNOCKS DEMOCRATS FOR TRYING FOR CLIMATE PROVISIONS IN PANDEMIC RELIEF BILL: Republicans are hammering Democrats for trying to include climate-related provisions in the pandemic relief bill, saying they’re delaying passage by demanding extraneous measures.
The party is ditching its carefully crafted rhetoric on climate change in favor of an aggressive pushback labeling Democrats’ efforts to address the issue during a crisis as socialism and Green New Deal-y.
“Her bill’s focus is unrelated handouts for her radical environmental allies and other special interests,” said Rep. Garret Graves, the top Republican on the House Select Climate Committee, in a statement criticizing Speaker Nancy Pelosi’s draft bill. The legislation would require airlines that receive financial assistance to offset their carbon emissions, along with another having the FAA administrator require air carriers to set their own binding greenhouse gas emissions reduction targets.
Read more about Democrats’ asks in Abby’s story from yesterday.
Democrats and Treasury Secretary Steve Mnuchin seemed to resolve their differences overnight, and it’s unlikely the final agreement contains the airline climate provisions, but that didn’t stop President Trump from tweeting, “this is not about the ridiculous Green New Deal.”
Republicans also inaccurately suggested Democrats would include renewable tax credit extensions in their phase three plan, which never happened.
“What the hell does a windmill have to do with this crisis?” said Sen. Ted Cruz in a floor speech that had to tickle Trump, who hates windmills.
The time to deal will come: But some Republican groups say the GOP should deal with Democrats on clean energy in future coronavirus response bills that will focus more on long-term recovery than immediate survival.
Heather Reams, executive director of Citizens for Responsible Energy Solutions, which is influential with House GOP leaders, told Josh her group plans to send a letter soon to Congress urging extensions for solar and wind tax credits, and a new energy storage subsidy, in future coronavirus legislation.
“I am anticipating stimulus four to be a more appropriate vehicle to discuss getting Americans back to work, where we would be looking at tax credits, looking at reducing carbon, but also being sensitive to the fact we have recovering industries and a recovering economy,” Reams said.
Reams said it’s natural for Congress to revert to its “tribal” corners during a stressful, pressure-packed period amid a pandemic, but “we do need to get climate concerns back in the discussion” when “cooler heads” prevail.
Shane Skelton, a Republican energy consultant and former staffer for House Speaker Paul Ryan, said Democrats were wrong to “jam” climate provisions in an emergency bill, but he encouraged GOP lawmakers to not act “irrationally” and to work productively on future stimulus legislation.
“That is the right time to calmly work through the nuance of making smarter investments in advanced infrastructure and technologies,” Skelton told Josh. “The same dollar can solve three problems: increase economic efficiency, put people back to work in a modern and durable workforce, and begin to address climate change now, before the fallout becomes COVID-19-like in the future.”
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.
US OIL GIANT CHEVRON’S ‘LONG-BALL’ PIVOT TO CLEAN ENERGY: Top Chevron officials in charge of clean energy investments say the company is focused inward on actions it can easily control that would reduce emissions in the short term rather than chasing faraway “aspirations” that they say are unachievable without changes in government policy.
“We are trying to deliver action right now to a lower-carbon future,” Daniel Droog, vice president energy transition at Chevron, told Josh in a deep dive on the company’s strategy published in our magazine this week.
Chevron officials say the company won’t “pull back” from its clean energy pivot even as it announced big spending cuts to shale Tuesday in response to the oil price crash (see more on that below).
“We are a long-ball player,” said Barbara Burger, the president of Chevron Technology Ventures. “I don’t see a pullback.”
A narrow focus: But environmentalists say Chevron is insufficiently committed to addressing climate change. They say that it is investing in low-carbon technologies and reducing its emissions only in areas that complement its core oil and gas business, like carbon capture (it operates the world’s largest CCS plant, Gorgon in Australia) — and cutting methane.
“It’s a very risky move to play chicken with investors in the 2020s on climate action, but that is what Chevron appears to be doing,” said Ben Ratner, a senior director at the Environmental Defense Fund.
Chevron has chosen not to spend directly on renewables, which generate lower returns. Instead, it has focused narrowly on powering its operations with more wind and solar, such as serving its electricity needs at refiners and its steam operations in oil fields.
It has dipped into other clean energy ventures, investing in companies such as ChargePoint, an EV charging company, and Carbon Engineering, a startup developing technology to swipe carbon from the atmosphere. But Chevron’s focus is narrowly tailored.
“History is littered with companies getting ahead of their skis and trying to scale before it’s ready,” Burger said.
CHEVRON CUTTING CAPEX 20%: The company is cutting back on its shale investments, while also suspending stock repurchases, in response to low oil prices.
Chevron, the second-largest U.S. oil company, is reducing its capital spending by $4 billion, or 20%. Around $2 billion of the cuts are focused on its shale production, primarily in the Permian Basin, the most productive U.S. oil field straddling West Texas and New Mexico.
Chevron has taken advantage of the fracking boom to become the second-largest producer in the Permian, increasing its production 71% in 2018.
“Given the decline in commodity prices, we are taking actions expected to preserve cash, support our balance sheet strength, lower short-term production, and preserve long-term value,” said Chevron CEO Michael Wirth.
The big picture: American companies ConocoPhillips and Exxon Mobil have made similar moves, while European competitors such as Shell and Total have also announced spending cuts. None of the companies, however, have spoken about potential layoffs, or whether senior executives would adjust their compensation to make up for lost profits.
OIL LOBBY ASKS EPA TO EASE UP ON ENFORCEMENT AMID PANDEMIC: The “uncertainty of the severity and duration of this pandemic” is making it difficult or near impossible for oil and gas companies to meet the requirements of environmental regulations, wrote Frank Macchiarola, the American Petroleum Institute’s senior vice president of policy, economics, and regulatory affairs, in a letter to the EPA Monday.
Those challenges range from running into administrative issues on permit requirements to not being able to send employees to monitor operations or equipment for air pollution or leaks of methane. The group’s list spans seven pages and includes programs like monitoring for benzene, detection and repair of methane leaks, and greenhouse gas reporting.
Macchiarola, in the letter, said temporary relief from the obligations API outlines “are not expected to result in a significant impact to human health or the environment,” but would instead allow companies to prioritize resources on maintaining production during these uncertain times.
ENERGY STORAGE HIT HARD WITH VIRUS DELAYS: Nearly two-thirds of companies surveyed by the Energy Storage Association are already experiencing coronavirus-related delays, and more than a third expect those delays to be six months or longer.
Those delays are the result of a disrupted global supply chain, travel constraints keeping workers from being on site, and slowing equity markets that undercut investment in projects, said Kelly Speakes-Backman, CEO of the storage group. And there’s still a lot of uncertainty. Many of the 175 companies who responded to the survey said they weren’t sure how long delays might last.
A best-case scenario is that storage growth just slows, but the worst-case is a flattening altogether, Speakes-Backman told Abby in an interview. Energy storage “has the potential to transform the way we generate and deliver electricity,” she said. “The slowdown of these will slow down, in my opinion, the entire modernization of the grid.”
What the storage industry is asking for: Like others in the renewable energy sector, they’re urging Congress to make it easier for projects to continue being financed, through a “direct pay” option, even as the tax equity market dries up for now. The storage industry in particular is also asking Congress to enact an investment tax credit for standalone energy storage — a concept that individually has bipartisan support, but it isn’t clear whether Republicans would support adding it to any relief package.
CLEAN ENERGY SECTOR RAMPS UP ITS LOBBYING: The industry is hoping Congress will take up its emergency requests as soon as possible. Without the “direct pay” option and extensions of safe harbor deadlines, projects are at risk of not qualifying for tax credits or losing investment, they say.
More than 550 U.S. solar companies wrote lawmakers on Monday, warning many projects were at risk and cancellation of residential solar projects could reach 50%, all of which would harm workers if Congress doesn’t address the tax credit fixes. Advanced Energy Economy, in its own letter, said the relief would help preserve the $238 billion in economic gains the clean energy industry has brought about in the last decade.
US ALLIANCE WITH SAUDIS ON OIL CUTS IS POSSIBLE, BROUILLETTE SAYS: Energy Secretary Dan Brouillette acknowledged Monday that the U.S. could look to partner with Saudi Arabia on self-imposed oil production cuts to resolve the price war.
“There are many, many ideas that are floated around the policy space, that is one of them,” he said in an interview with Bloomberg Television. “I don’t know that it is going to be presented in any formal way.”
Brouillette, however, said “no decisions have been made” and the Trump administration may start engaging in diplomacy “down the road.”
His comments come as oil regulators in Texas have floated the idea of issuing “pro-rationing” schedules to force producers in the state to cut production to raise the price of oil. Ryan Sitton, a member of the Texas Railroad Commission, said he has discussed with OPEC leadership the concept of Texas, the top producing state, cutting its oil output 10% in exchange for Saudi Arabia and Russia each doing the same.
FLORIDA VOTERS WANT MORE FROM TRUMP ON CLIMATE CHANGE: More than half of voters in a new poll of the key swing state Florida say Trump is not doing enough to address climate change.
A poll conducted this month for the conservative group Alliance for Market Solutions of 808 Florida voters found that 56% say Trump is not doing enough on climate change, including 14% of people who view him favorably.
Sixty-one percent of Republicans polled said the U.S. needs to address climate change with a “balanced” approach focused on the environment and economy. Only 5.6% of Republicans said “immediate action” is necessary no matter the economic cost, compared to 51.3% of Democrats who said that.
A larger amount of all those polled, 68%, believe extreme weather events are increasing, and more than half blame climate change (56%), including a quarter of Republicans.
Less than half, 42%, of Florida Republicans think human activity plays a role in climate change.
Alliance for Market Solutions advocates for a carbon tax that uses the revenue to cut other taxes. In the Florida poll, not many Republicans (15%) or Democrats (6%) favor a tax on polluters.
The Rundown
Bloomberg Should economic stimulus be green? It’s a matter of timing
Wall Street Journal The oil crash is hitting this investment hard
Politico Oil execs to Trump: Whose side are you on?
Calendar
TUESDAY | MARCH 24
House is out. Senate is considering coronavirus legislation.
THURSDAY | MARCH 26
Online via Zoom. The Atlantic Council hosts a fireside chat on COVID-19 and the future of the energy system with International Energy Agency executive director Fatih Birol.
