With help from Anthony Adragna, Ben Lefebvre, Alex Guillén and Sam Mintz
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.
— The Senate Environment and Public Works Committee holds a confirmation hearing today for two of President Joe Biden’s top environmental nominees.
— House Energy and Commerce Democrats unveiled a sweeping climate bill, and Chair Frank Pallone says he won’t take using reconciliation off the table to get it through Congress.
— Texas’ power failures could prompt federal regulators to order new reliability standards in the state, even as Texans push to maintain their autonomy from the U.S. grid.
WELCOME TO WEDNESDAY! We’re your co-hosts, Matthew Choi and Kelsey Tamborrino. Barbara Smith of the Southeastern and Southwestern Power Administrations gets the trivia win for knowing both Canadian Prime Minister Justin Trudeau and his brother, Alexandre, were born on Christmas Day. For today: In what South American country is Dutch the primary language? Send your tips and trivia answers to us at [email protected] and [email protected]. Follow us on Twitter @matthewchoi2018 and @kelseytam.
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: House Dems set their climate goalpost
EPA, CEQ NOMS WILL GET BLAST FROM THE PAST: The Senate Environment and Public Works Committee will grill President Joe Biden’s nominees for Council on Environmental Quality and deputy EPA administrator this morning — and they could take a drubbing about their work during the Obama administration. Unlike pending EPA chief Michael Regan, who arrived without any ties to the Obama regulatory agenda reviled by red states, both nominees in the spotlight today will have to defend Obama-era policy choices while promoting Biden’s agenda.
Janet McCabe, picked to be EPA’s deputy administrator, was the agency’s acting air chief under former President Barack Obama and helped write the Clean Power Plan and other major regulations; expect to hear a lot about her thoughts on EPA’s authority to regulate carbon. And Brenda Mallory, the CEQ chair-designate, was a longtime EPA attorney before she was picked as CEQ’s general counsel for Obama’s final years in office, when major greenhouse gas guidance was issued.
The duo have plenty of bipartisan praise outside of Congress: Mallory won the backing of several Republican former EPA and CEQ officials, while McCabe picked up endorsements from a bipartisan group of former EPA deputies and 220 former agency employees. But it remains to be seen if they’ll win as many Republican votes in the Senate as Regan, who cleared committee 14-6 but is still awaiting final confirmation.
ENERGY AND COMMERCE DEMOCRATS UNVEIL CLIMATE BILL: The hefty 981-page measure to combat climate change aims to take a sector-by-sector approach to eliminate carbon dioxide and reach net-zero emissions by 2050, Pro’s Anthony Adragna reports. The bill builds off last year’s CLEAN Future Act and calls for a federal clean energy standard that sets goals of 80 percent clean electricity by 2030 and 100 percent by 2035.
What’s next: E&C Chair Frank Pallone vowed the legislation would move through regular order but notably did not take reconciliation off the table. “I mean obviously we’d like to move it through regular order — I don’t rule anything out — but I’m hoping that the Republicans would participate, so we don’t have to go to reconciliation,” he said, adding they would continue to hold hearings and take input from Republicans on how to improve the bill. “We certainly want to hear any new ideas that the Republicans have and we will offer the opportunity to incorporate them into this bill,” said Rep. Bobby Rush, chair of the Energy Subcommittee.
Rush said E&C Democrats have a “good, productive, positive history” with key senators, including Energy Chair Joe Manchin, whom they worked with on the end-of-year energy bill last year.
Rep. Paul Tonko, chair of the Environment and Climate Change Subcommittee, said the Biden administration provided “input” on the legislation and would continue to do so. Pallone also laid out this bold prediction: “I do believe that this bill has the support of all the Democrats on the committee. Some may like certain parts and not other parts, but it was put together to try to capture all the Democrats as well as some Republicans,” he said. Read a section-by-section summary of the bill.
GREENS AGAINST THE FILIBUSTER: More than 70 environmental groups are calling on Sen. Chuck Schumer to abolish the filibuster, which they say in a letter to the majority leader is blocking urgent measures needed to combat climate change. “Action on the climate crisis in a way that centers environmental justice should not be obstructed by a minority of Senators representing a minority of the country,” they wrote. Signatories include Climate Justice Alliance, Sunrise Movement and 350.org. Schumer fielded similar calls from advocacy groups last month, including from labor unions and progressive organizations.
COME AND TAKE IT: Texas’ power failures this winter could prompt the federal regulator to seek new reliability standards in the Lone Star State. The Federal Power Act gives FERC only limited authority in the state, but experts told Pro’s Eric Wolff that there are still other avenues to make sure a similar disaster doesn’t happen again, notably by instructing NERC, which develops grid standards, to create rules that force Texas generators to take measures to reduce winter weather risks. And commissioners could employ their soft power and hold technical conferences to pressure state regulators to protect the grid. Though FERC can’t probe price fluctuations in the state, the Natural Gas Act allows it to dig into market manipulation through interstate pipelines, plus it can investigate the nearby MISO and SPP grid operators, which also struggled that week.
TANDEN BOWS OUT: Biden’s pick for OMB director, Neera Tanden, withdrew her nomination amid mounting scrutiny over her past tweets. Sen. Joe Manchin (D-W.Va.) had said he would not support her nomination, putting her in a particularly precarious position. Hill Democrats have been pushing for Shalanda Young, deputy director of OMB, for the post. Other names floating around include Ann O’Leary, former aide to Hillary Clinton, and Gene Sperling, former economic adviser to Presidents Bill Clinton and Obama. Tanden’s withdrawal came after GOP Sen. Lisa Murkowski (Alaska) “conveyed to the White House that she was going to be a no,” according to CNN’s Jake Tapper, citing a senior administration official.
CODE FIGHTS: The International Code Council meets today on whether to follow through on changing how energy conservation building codes are crafted. The changes would decrease input from local governments, which have previously pushed for aggressively greener building codes. The Energy Department weighed into the fight last month, trying to pause the change, which activists feared could dampen local efforts at the behest of construction and gas companies.
“ICC had set this process in place specifically to encourage increased participation. And now that they have achieved increased participation, something else seems to have been triggered that they want to take it away,” Kim Cheslak, who serves as director of codes at New Buildings Institute and has participated in the code process, told ME.
Acting Assistant Secretary for Energy Kelly Speakes-Backman wrote to the ICC board that the need for the change “remains unclear” and could stunt “important economic and environmental benefits at the local level,” HuffPost’s Alexander Kaufman reports. But the ICC signaled an aversion to switching course in a response to Speakes-Backman shared with ME. It said a delay in the changes would throw a wrench in a whole suite of building codes the ICC is responsible for. Still, a council spokesperson told ME its board had a productive conversation with DOE on Tuesday and that the council was “committed to assisting communities in meeting their energy efficiency and greenhouse gas reduction priorities.”
BIDEN BACKS TRUMP ON SOLAR: The Biden administration earlier this week backed its predecessor’s move to revoke a tariff loophole created for double-sided solar panels. In a Monday filing in the U.S. Court of International Trade, the Justice Department said the court should dismiss a solar industry complaint, led by the Solar Energy Industries Association, challenging the import tariff move. DOJ attorneys argued that former President Donald Trump was “lawfully and fully within his authority” when he closed the loophole, after determining it had been “undermining the effectiveness of the safeguard measure on solar products.” SEIA declined comment.
Watch this spot: A research note from ClearView Energy Partners said Tuesday the filing signals the administration is unlikely to end Trump’s solar tariffs, as some in the industry had hoped. “Although one could interpret the brief as seeking to defend Biden’s Executive Branch prerogatives, it may also suggest that Biden’s hard line on protecting U.S. industry could continue,” it said. However, ClearView said it currently regards a tariff extension as unlikely.
ABOUT THAT API CARBON PRICE: The energy world was atwitter after a news report that the American Petroleum Institute may be ready to back a price on carbon. API’s saying it supports a carbon price isn’t necessarily new — it has broached the subject in years past and mentioned it as a possible “market based solution” in a recent annual report — but word that it could be preparing to put its lobbying might where it’s PR mouth spurred intrigue among industry lobbyists. An association spokesperson would only confirm to ME that “API and its membership continue to discuss and consider carbon pricing among other policy solutions to reduce emissions and reach the ambitions of the Paris Agreement.”
Several lobbyists told ME the “leaked” news of a carbon endorsement was merely the API trying to calm warring factions among its membership, which includes a mix of international companies that may not mind a carbon tax if it keeps them in regulators’ good graces and those who want to fight against it. “This is simply a case of Shell and BP pushing the API toward a progressive stance, but it is not a view that is uniformly held by API members,” said one source familiar with the group’s inner workings. Other lobbyists were less sure. Businesses are coming to grips that Biden at some point will propose a carbon tax, that one could be included in a reconciliation package, and that it might be better for the industry than an emissions limit companies may not be able to meet. “The position that no one supports [a carbon price] but the fruitcakes from the EU, that’s definitely not the case,” the person said.
EXXON HIT WITH $14M PENALTY FOR REFINERY AIR VIOLATIONS: Exxon Mobil must pay a $14.25 million penalty for thousands of violations of the Clean Air Act at its Baytown refinery near Houston, a judge ruled on Tuesday. The company was previously slapped with a $20 million penalty in a citizen suit brought by Environment Texas and the Sierra Club. But it convinced an appeals court to order a reconsideration by Judge David Hittner of the U.S. District Court for the Southern District of Texas, a Reagan appointee. After doing so, Hittner levied penalties of $14,251,302 (plus the green groups’ expenses).
Even after chucking some of the allegations, Hittner still found more than 2,000 violations spanning 3,651 days and totaling 10 million excess pounds of airborne pollution. He also rejected Exxon’s effort to blame some of the violations on Hurricane Ike, ruling that the 2008 disaster did not count as an “act of God.” Exxon has already paid more than $1.4 million to state and county regulators over the violations, bringing the total to almost $15.7 million. Exxon said it is reviewing the decision and declined to say whether it will appeal again.
MAKING THE GRADE: The country’s infrastructure is still not an honor student, but it’s on the way up. In the American Society of Civil Engineers’ new report card, overall infrastructure in the U.S. gets a C-, the first time the metric has risen out of the D range in 20 years. The ASCE report, which comes out every four years, carries a lot of weight. It’s by far the most widely cited measure of national infrastructure quality on the Hill and around the country.
Five category grades went up: Aviation (which is now up to a D+, thanks in part to increased airport investment from Congress), drinking water, energy, inland waterways and ports. Only one went down since the last report card: Bridges, which is now a C, given 46,154 bridges in the country are structurally deficient, and the roughly $125 billion repair backlog. Rail remains the highest ranked segment, at a B. And stormwater infrastructure was included for the first time, scoring a D.
Better, but still not good: “This is not a report card anyone would be proud to take home,” said ASCE Executive Director Thomas Smith. “We have not made significant enough investments to maintain infrastructure that in some cases was built more than 50 years ago.”
— “Navarro penned 15-page memo falsely accusing Coates of being Anonymous,” via POLITICO.
— “Some industries leery of Biden’s big-economies climate talks,” via Bloomberg Law.
— “Betting on death of petrol cars, Volvo to go all electric by 2030,” via Reuters.
— “BLM planning might reopen under Biden reset,” via Missoulian.
THAT’S ALL FOR ME!
