Editor’s Note: Morning Energy is a free version of POLITICO Pro Energy’s morning newsletter, which is delivered to our subscribers each morning at 6 a.m. The POLITICO Pro platform combines the news you need with tools you can use to take action on the day’s biggest stories. Act on the news with POLITICO Pro.
— Oil and gas companies are reporting positive earnings after pandemic–driven losses, but questions about the resilience of their businesses in a decarbonizing future remain.
— Energy Secretary Jennifer Granholm heads to the Hill this week to make the case for increased funding for clean energy innovation and other departmental priorities.
— Democrats are far more reserved about forcibly repealing Trump-era regulations via the Congressional Review Act than their Republican counterparts were about throwing away Obama-era rules. Part of the reason? They don’t need to.
HAPPY MONDAY! I’m your host, Matthew Choi. Congrats to Dana Wood of Kelley Drye & Warren for knowing Lourenço Marques is the former name of Maputo, Mozambique. For today’s trivia: Puccini’s “Madama Butterfly” takes place in what Japanese city? 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: Biden hides his climate math.
IS IT REALLY A COMEBACK?: Some oil and gas giants are reporting positive earnings in the first quarter, signifying a return to profitability from the pandemic slump. But it’s not all rosy, as low demand for jet fuel continue to weigh on sales and shareholders are closely monitoring how the firms respond to increasingly stringent measures around the world to curb carbon emissions.
Exxon Mobil and Chevron used their earnings announcements Friday to push their strategies ranging from carbon capture — which has bipartisan support in Washington — to implementing a national carbon pricing regime that would help stimulate a market for the main greenhouse gas, a much harder political lift. Ben Lefebvre has more for Pros.
Exxon has been active in publicizing its CO2 plans, which include a $100 billion carbon capture program in Houston (though it has yet to attract support from the Biden administration or greens). Exxon CEO Darren Woods also sat down with Barron’s and explained the company’s backing and market potential of a carbon pricing measure.
But environmentalists have been less than enthused with the carbon-reduction measures, pushing instead for a full pivot away from fossil fuels. And Exxon faces internal pressures to clarify its climate strategy, including shareholder proposals to disclose the company’s climate lobbying and how 2050 net-zero emissions targets will impact business.
Some of the earnings pain from the first quarter can’t be attributed to the pandemic. The Texas winter storm energy crisis caused hundreds of millions of dollars in reduced earnings for companies including Chevron and Exxon. Watch out for ConocoPhillips’ first quarter earnings call on Tuesday as the company engages in a legal fight with CPS Energy over prices from the Texas storm. Marathon Petroleum, Apache, Devon Energy and EOG Resources are among the big U.S. producers reporting this week.
HIGH ENERGY: Energy Secretary Jennifer Granholm will be discussing the department’s budget request before the House Appropriations Energy Subcommittee on Thursday. The administration’s budget request targets clean energy deployment innovation, increases funding for the Office of Fossil Energy and Carbon Management, invests in minority-serving institutions, finances measures to bolster nuclear security and more.
Other hearings to watch: The House Energy Committee will discuss the CLEAN Future Act — Democrats’ marquee climate bill — on Wednesday, with particular focus on decarbonizing the transportation sector. The House Science Energy Subcommittee will have a hearing Tuesday on research at the Energy Department.
TO CRA OR NOT TO CRA: Democrats have so far used the Congressional Review Act only once to repeal a Trump-era regulation, paling in comparison to the repealing spree Republicans engaged in following Trump’s election. Democrats were hardly fans of the prior administration’s environmental policies, so what gives?
A host of factors from the Covid pandemic to the courts’ willingness to roll back Trump rules could be to blame. Not to mention Democrats have been busy legislating their own major packages — from Covid relief to the American Jobs Plan. Anthony Adragna dives into the disparity for Pros.
BREAKIN’ UP IS NOT HARD TO DO: Biden and his Democratic allies are more receptive to Republicans’ infrastructure counterproposal than they were to GOP alternatives to the Covid relief package, The Washington Post reports. With the president eyeing at least one bipartisan win before the 2022 elections, Biden appears more willing to either give ground or break up the package into smaller pieces, according to the Post.
Biden communicated that recently with Sen. Shelley Moore Capito, ranking member of Senate EPW and GOP lead on infrastructure. Read more from the Post.
Meanwhile, Sen. Bill Cassidy (R-La.) said Sunday that Republicans and Democrats are “a lot closer than you might think” on a package “if you’re talking about a scope which is roads and bridges and internet and tunnels and airports and waterways.” POLITICO’s Myah Ward has more.
WHAT WOULD HARRY SAY?: Former Sen. Harry Reid, on the other hand, is pushing for Democrats to be aggressive in passing climate and infrastructure legislation. “The lesson Democrats should take away from 2020 is that ignoring the naysayers, plowing ahead with popular proposals and delivering the results voters want is not only good policy, but also good politics,” Reid wrote in an op-ed in the Las Vegas Sun.
Reid asserted that a majority of Americans — members of both parties — supported investment in clean energy and infrastructure and dismissed criticisms that Democrats barreling ahead with their agenda was not acting in bipartisan faith.
DON’T FORGET THE OCEANS: Over 100 groups wrote to Congressional leaders to include $10 billion for ocean, Great Lakes and coastal restoration and resilience projects in its Covid relief and infrastructure packages. Restoration measures would boost jobs in coastal regions, protect coastal communities and fend off the impacts of climate change, the groups write. Signatories include the Environmental Defense Fund, League of Conservation Voters, Ocean Conservancy and Patagonia. Read the letter here.
PIPING UP: A bipartisan group of 25 senators led by Sens. John Hoeven (R-N.D.) and Joe Manchin (D-W.Va.) want FERC to approve more than a dozen natural gas pipeline projects before the commission implements environmental justice and climate change oriented policies. The letter comes after the commission recently restarted an effort to update its certification policy.
“Delaying and moving the regulatory goalposts on projects filed in good faith is contrary to the otherwise equitable application of the Policy Statement that all stakeholders expect,” the letter says. “At a minimum, these projects should not be subject to newly contemplated considerations that fall outside the scope of the current Policy Statement or go beyond the Commission’s statutory authority.” Eric Wolff has more for Pros.
ENERGY ACT’S IMPACT: A recent study by Resources for the Future found that funding for research, development and demonstration in advanced energy technologies (carbon capture, advanced nuclear and direct air capture to name a few) mirroring those under last year’s Energy Act would have a number of social benefits outnumbering costs, including on electricity consumer costs, health and climate — from 7 to 10 times the costs of the technologies. Read the study here.
EUROPEAN PARTNERS: Granholm will have another public appearance Thursday at a transatlantic panel hosted by the European Union’s delegation to the U.S. and The Atlantic Council. She’ll be speaking with Kadri Simson, European commissioner for energy. It will be one of the first transatlantic public forums with a climate focus since Biden’s climate leaders summit two weeks ago. The EU-US Future Forum will go from Wednesday till Friday.
Other speakers include Sens. Chris Murphy (D-Conn.) and Jeanne Shaheen (D-N.H.) as well as Annalena Baerbock, Green Party candidate for the German chancellorship. The Greens are currently enjoying considerable support in the lead up to the German elections, as our peers in Berlin broke down Friday.
IRAN PROGRESS: Parties negotiating the future of the Iran nuclear agreement are hoping to reach a deal before May 22, a deadline determined by Iran and the International Atomic Energy Agency, Bloomberg reports. The deadline also is about a month before Iran’s presidential elections, with the nuclear deal a politically hot topic domestically.
Though the talks appear to be making progress, National Security Adviser Jake Sullivan said Sunday there was still a “fair distance to travel” before a deal can be reached — largely over what sanctions to roll back and what restrictions Iran will accept.
XINJIANG SOLAR SOURCING: One of the biggest producers of polysilicon — a key component in solar technology — says it’s opening the doors to a facility in Xinjiang, insisting it is not engaging in forced labor, Bloomberg reports. The U.S.-listed Daqo New Energy Corp operates one of four factories producing about half of the world’s supply of polysilicon.
The Chinese Foreign Ministry organized the news conference Friday where the company declared there was no forced labor involved. The Chinese government has been engaging in an aggressive campaign to refute reports of forced labor and detention of the country’s ethnic minorities in Xinjiang. Bloomberg visited Xinjiang after the Chinese government made similar denials and invited foreigners to inspect their factories back in February. But the Bloomberg reporters faced bureaucratic roadblocks preventing them from getting a transparent view.
LIVE FROM NEW YORK, IT’S… ELON MUSK: Elon Musk is hosting Saturday Night Live this weekend, and Richard Ortiz, a former Tesla autoworker whom the NLRB ruled was improperly fired, is using the occasion to highlight workers roles in the transition to EVs. Ortiz blasted companies like Tesla for not recognizing unionization efforts and urged policymakers to pass Biden’s American Jobs Plan to protect workers in the energy transition.
“Unfortunately, while Musk and his colleagues are rushing to the EV future, they’re trying to drag us back to a robber baron past where bosses call the shots and workers are treated as costs to be minimized,” Ortiz wrote in an op-ed in Fortune.
— “Anna Catalano Is in the Room Where It Happens—In Part Because Someone Spoke Up for Her When She Wasn’t,” via The Wall Street Journal.
— “How Biden’s 1st 100 days changed the course of US ESG and sustainability policy,” via S&P Global.
— “Biden calls for more cash, new routes for Amtrak, on its 50th birthday,” via POLITICO.
— “What the “Infrastructure” Fight Is Really About,” via POLITICO Magazine.
— “In energy-reliant Canada, banks and investors face dilemma in meeting emissions target,” via Reuters.
THAT’S ALL FOR ME!
