Energy

All hands on deck over Colonial shutdown


With help from Annie Snider.

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— The Colonial Pipeline shutdown has sparked a government-wide response, as the cyberattack and now local gas shortages pose both political and economic challenges for President Joe Biden.

The Biden administration’s approval of the nation’s first large-scale offshore wind farm offers a preview of the battles ahead between the nascent clean energy source and the commercial fishing industry.

— John Kerry heads to the Hill for the first time since taking up the climate envoy position, and he’ll face Republicans skeptical of his role — and eager to probe claims that he disclosed information about Israeli operations to Iran.

WELCOME TO WEDNESDAY! I’m your host, Matthew Choi. Congrats to Christopher Krueger of Nuclear Energy Institute for knowing Jesse and Céline met on a train from Budapest in “Before Sunrise”. For today’s trivia: Mason attends what university in the movie “Boyhood”? Send your tips and trivia answers to [email protected]. Find me on Twitter @matthewchoi2018.

Check out the POLITICO Energy podcast — all the energy and environmental politics and policy news you need to start your day, in just five minutes. Listen and subscribe for free at politico.com/energy-podcast. On today’s episode: What’s really behind the gas shortages.

DAMAGE CONTROL: With most of the Colonial Pipeline still shut down and reports of localized gasoline shortages popping up, the Biden administration is scrambling to contain a crisis that poses both economic threats to the country and political costs to his presidency.

The White House put several agencies on the problem. Energy Secretary Jennifer Granholm told reporters Tuesday the administration is “looking at every option” to avoid supply constraints, and she urged gas stations not to price gouge and customers to resist panic buying. The administration says there is still enough supply to meet national demand and is employing various emergency measures to alleviate the fuel crunch.

Among the steps taken so far: EPA has eased regulations on gas quality in several urban areas serviced by the pipeline, the Transportation Department is allowing truckers to work beyond normal driving limits and is considering waiving Jones Act restrictions on foreign ships traveling between U.S. ports, and the Federal Railroad Administration is probing ways to increase rail capacity to transport fuel. Pro’s Alex Guillén and Sam Mintz break down the federal response for Pros.

Colonial’s operators could make a decision on a full reopening as soon as today. But it would still take days to fully restore operations on the 5,500 mile pipeline network, which has never seen such a wide-scale shutdown.

The Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency is waiting on the pipeline’s operators to share key data on the hack, the agency’s head told lawmakers at a hearing Tuesday. It’s still early in the company’s response, CISA Acting Director Brandon Wales told the Senate Homeland Security Committee, and the agency often has to rely on voluntary cooperation from victims of attacks. Pro’s Eric Geller has more on the CISA side of things.

Meanwhile, the crisis is revealing the gaps in Biden’s cybersecurity team. CISA still does not have a permanent director, and Biden has not filled important mid-level cyber defense positions, including the head of the Energy Department’s cybersecurity office. Republican lawmakers are seizing on the moment to amplify calls for greater cybersecurity infrastructure and investment in pipelines, which have become political minefields as greens try to shut down projects they say are dangerous to the environment (more on that later).

Ben Lefebvre and Eric go into the political and administrative challenges Biden faces dealing with the shutdown.

WELCOME TO THE REEL WORLD: The Interior Department announced Tuesday the final federal approval for the 800-megawatt Vineyard Wind project that is set to become the first large-scale offshore wind farm in the United States. The project offers a glimpse into the potential fights ahead — and the opportunity to create the union jobs often promised by the Biden administration — as the president seeks to add 30 gigawatts of offshore wind generation to U.S. coastal waters by 2030.

The administration touted the approval as a boost for the offshore wind industry while also enabling thousands of good-paying jobs. Vineyard Wind, officials said, will be constructed under a project-labor agreement with unions — though the specifics of that agreement weren’t immediately released.

However, Vineyard Wind CEO Lars Pedersen told reporters the manufacturing of many of the project’s components will need to be done outside of the U.S., since the U.S. lacks the supply chain to do so. But he hoped that Tuesday’s announcement could spur necessary investment. “The fact that there was uncertainty on whether the industry would happen was sort of holding back those investments,” Pedersen said. “We definitely think they are going to flow right now, but for the first project that is not possible to tap into.”

Fishermen objections: The final approval was quickly condemned by the Responsible Offshore Development Alliance, a coalition of fishing industry groups and fishing companies, which said the administration ignored its recommendations to mitigate adverse impacts on the industry. For one, the group has long advocated for navigable transit through the New England wind energy areas and said the record of decision unveiled Tuesday dismissed that concern. The ROD explained that the transit lanes were not included as a reasonable alternative due to “economic and technical difficulties.”

RODA Executive Director Annie Hawkins told ME the group was evaluating next steps, but stressed its concern over the precedent being set. “This is only the first of a lot of things that are going to impact fleets and our seafood production, and so we’ve really got to regroup and figure out where we go from here, because this is just about the worst-case scenario,” she said.

BOEM Director Amanda Lefton defended the agency’s action, saying there was “robust outreach,” including to the commercial fishing industry, but she acknowledged they could improve the engagement process.

“What I will tell you is we really tried to listen,” Dennis Arriola, the CEO of Avangrid, which is developing Vineyard Wind alongside Copenhagen Infrastructure Partners, told ME. “I think that there were modifications made to our plans based upon the input that we received from various stakeholders including the fishing industry.”

BIDEN GOES TO MICHIGAN: The president is headed to Dearborn, Michigan, next Tuesday to tour the Ford Rouge Electric Vehicle Center, the White House announced. Biden will get an advanced look at the F-150 Lightning — the electric version of the automaker’s signature pickup that it plans to publicly unveil next week, according to company spokesperson Melissa Miller.

WHAT’S AT STAKE: At least 74 Biden administration officials and nominations disclosed some stake in the fossil fuel industry, according to a review of disclosure documents by Forbes Magazine and the Brown Institute for Media Innovation.

“Climate envoy John Kerry reported interests of more than $115,000 of stock in oil, gas and utility firms held in his wife’s family trust, according to a disclosure filed in January. Policy advisor Susan Rice holds between $1.1 million and $5.2 million of stock in oil and gas companies — more than anyone else identified in the review — most of which is tied up in Canadian pipeline company Enbridge. Science advisor Eric Lander, who is awaiting Senate confirmation, reported holding from $190,000 to $515,000 of stock in oil, gas and utility companies, including Exxon Mobil and Pioneer Natural Resources,” report Michela Tindera and Eric Fan.

The White House and numerous agencies said the officials were in the process of normal ethics reviews and divesting from potential conflicts of interest.

KERRY ON THE HILL: U.S. climate envoy John Kerry will be speaking at the House Foreign Affairs committee hearing on global climate action today. It’ll be his first appearance on the Hill since taking the post — and since the reports by London-based Persian news channel Iran International and picked up by the New York Times sparked outrage among Republicans over Iranian Foreign Minister Mohammad Javad Zarif’s claim that Kerry had disclosed Israeli operations against Iranian interests (Kerry flatly denies any such conversation).

A group of Republican senators want to hold back funding for Kerry’s office over the alleged conversation, and a committee aide told ME that the alleged disclosures will come up in the hearing. Republicans will also likely question Kerry on how his role meshes with the rest of the State Department — a topic that Rep. Tim Burchett (R-Tenn.) raised with Secretary of State Antony Blinken in a letter Tuesday.

NOMS UP: The Senate Environment and Public Works Committee this morning considers President Biden’s nominees for three key environmental posts: Radhika Fox to lead EPA’s water office, Michal Freedhoff to head the agency’s Office of Chemical Safety and Pollution Prevention, and Shannon Estenoz to oversee Interior’s Fish and Wildlife Service and national parks.

Expect a warm reception for the trio. Freedhoff served until recently in Chairman Tom Carper’s office, working across the aisle on PFAS issues, and she’s garnered the backing of several Republican and Democratic appointees who headed the chemical safety office. Carper plans to bring up his experience working with Freedhoff in today’s hearing, particularly her ability to connect across the aisle, according to a Carper aide. Fox, too, has gained bipartisan endorsement.

COURTING THE CENTER: Biden hosts Congressional leadership today in the talks over infrastructure, and he’s planning a meeting with Republicans led by Sen. Shelley Moore Capito Thursday. The White House has repeatedly said the two sides have been negotiating in good faith and that the president would prefer a bipartisan effort to forcing legislation through reconciliation.

But in the event it comes to that, Biden will have to keep centrist Sens. Joe Manchin (D-W.Va.) and Kyrsten Sinema (D-Ariz.) on board. The two senators met with Biden earlier this week where he expressed his intent on keeping them involved in the details of the package, and the cross-aisle negotiations signal a valuable message that the president’s bipartisan intentions were sincere. White House advisers feel that if Manchin and Sinema buy into a bipartisan effort that Republicans ultimately reject, the two centrists will be more amenable to Democrats enacting a plan alone, POLITICO’s Natasha Korecki reports.

Read more from Natasha on the White House efforts to keep Manchin and Sinema on board.

GRANHOLM BACK ON THE HILL: The Energy secretary is headed back to the Capitol for a budget hearing before the House Energy and Commerce committee next Wednesday. Committee Chair Frank Pallone and Energy Subcommittee Chair Bobby Rush said they plan to bring up the Colonial Pipeline and protections against future cyber attacks during the hearing.

LINE 5 DEADLINE: Michigan Gov. Gretchen Whitmer wants the Line 5 pipeline in the Straits of Mackinac shut down by today and is threatening to seize profits from Enbridge if it doesn’t comply. Whitmer wrote to the company that Michigan would consider the line trespassing if it keeps operating in the area, which Whitmer and environmentalists say is vulnerable to a catastrophic spill from the decades-old pipeline.

Enbridge retorts that Whitmer has no authority to shut down the pipeline and that it will only comply if a court or federal regulator orders it. Canada’s liberal government, which has been arguing a shutdown would do more harm than good to the Canadian and American workers and customers reliant on the pipeline, continues to back Enbridge’s stance. The Associated Press has more on where the conflict stands, and Pro’s Lauren Gardner went into the roots of the tension last week.

SHINING A LIGHT: One of the world’s largest solar component suppliers is looking into external auditors to assess its Xinjiang operation amid allegations of human rights abuses in the Chinese autonomous region. Daqo New Energy Corp, which is listed in the U.S., denies allegations of forced labor involving the area’s ethnic minorities, arguing the manufacturing process for polysilicon is highly automated. But external observers have had a history of encourtering roadblocks that prevent them from digging into the alleged human rights violations in the region, and access to Xinjiang remains tightly controlled by the CCP. Bloomberg has more.

Dennis Deziel is joining Bergeson & Campbell as senior government affairs adviser, E&E News reports. Deziel was EPA’s Region 1 administrator under the Trump administration.

— “Lawyer faults ‘men’s-club’ dynamic in Mass. v. EPA account,” via E&E News.

“A nonprofit promised to preserve wildlife. Then it made millions claiming it could cut down trees,” via MIT Technology Review.

— “United largely unaffected by Colonial shutdown, for now,” via POLITICO.

— “Woman who confronted Scott Pruitt running for office,” via E&E News.

THAT’S ALL FOR ME!





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