With help from Eric Wolff, Annie Snider and Alex Guillén
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— On the Trump administration’s last full day in office, it will stand beside oil companies at the Supreme Court as part of a case that could determine the future of climate change lawsuits against fossil fuel companies.
— Today also marks the last FERC meeting under the Trump administration, and the likely last meeting under Republican Chairman James Danly.
— President-elect Joe Biden is planning to rescind the cross-border permit for the Keystone XL pipeline on his first day in office.
WELCOME BACK! IT’S TUESDAY. I’m your host, Kelsey Tamborrino. Tim Peckinpaugh of K&L Gates LLP notched another trivia win for knowing Augusta, Maine, is the easternmost U.S. state capital. Another state-related question for today: Which state names begin and end with the same letter? Send your tips and trivia answers to [email protected].
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ON THE DOCKET: The Supreme Court will hear arguments this morning in a case that will decide whether a lawsuit brought by the city of Baltimore against oil and gas companies belongs in state courts, where the plaintiffs want it, or the federal courts, where the oil companies would stand a better chance of winning.
The court’s decision expected later this year will likely determine the path for more than a dozen other climate lawsuits the oil industry is facing or claims that could be filed in the future, Pro’s Alex Guillén reports this morning.
The city of Baltimore in 2018 sued 26 oil and gas companies, arguing that they are liable under Maryland state law for the city’s costs of dealing with climate change, such as the destruction caused by more extreme weather, sea-level rise and increased public health risks. The companies have tried to bump the suits up to federal court, arguing that greenhouse gas emissions and climate change are national and global matters, not issues for state courts.
While the court’s decision will have a dramatic effect on the legal exposure fossil fuel producers face for climate change, the case centers mostly on technical legal issues, Alex reports, in particular a relatively dry question about the statutory scope of appellate review of orders remanding lawsuits back to state courts.
If the Supreme Court rules for Baltimore, it would allow the other pending cases to move forward at the state level. That’s likely to improve the chances that the states and cities would prevail in winning damages from the industry.
SQUARING THE FERC-LE: Chairman James Danly piled up a lengthy agenda for the last FERC meeting of the Trump administration today, making the most of the brief time left that Republicans will hold both the gavel and the majority. But its not clear whether Republican Commissioner Mark Christie will take part in votes, since he’s been in office only since Jan. 4 and may not have gotten up to speed on the issues. That could leave the commission with a 2-2 split on votes, with President-elect Joe Biden almost certainly turning the chairmanship over to one of the two Democratic commissioners.
All the MOPR reason: FERC will examine three issues concerning its Minimum Offer Price Rule, including a request by New York generators to expand it, as well as a rehearing request on the commission’s October implementation order in PJM Interconnection. Christie is likely to be the swing vote on MOPR issues, and greens hope the long-time state commissioner will see the rule as impinging on state rights.
But Christie is seen as close to former Commissioner Bernard McNamee, who helped craft the MOPR rule. Christie hinted previously at his willingness to protect regulatory power at his swearing-in ceremony in Richmond, Va., which doubled as a goodbye party from the State Corporation Commission. “I have repeatedly said to our SCC staff that while the General Assembly can pass laws that dictate the outcome of cases, it can never take away our willingness to tell the truth about the real costs and real impacts of laws on those Virginians who have to pay the bills,” he said, according to a FERC press release.
The commission could finalize the “Electric Transmission Incentives Policy:” Democratic Commissioners Richard Glick and Allison Clements have said they back efforts to expand linkages for renewable generation in the Midwest and Sun Belt to population centers on the coasts. But Glick dissented in part on the proposed rule, arguing it pays utilities for building transmission lines they would have been built anyway, rather than the longer lines that are needed. The complexities here — and the large number of comments on this docket — could pose a challenge for Christie to make an informed decision, one observer told ME. If he votes, the rule is not likely to advance.
Generation plus storage: The commission is poised to act on the information from its technical conference in October on interconnection rules for generation-plus-storage projects. Regulators have long struggled over whether to deem batteries as generation, transmission, or something else, and FERC seems ready to release a proposed rule that could provide some clarity. Republican Neil Chatterjee may be the swing vote on this issue, and some of his big initiatives while chairing the commission, including an energy storage rule and a distributed energy rule, suggest he will back changes that make it easier to put batteries on the system.
A push for pipelines: The commission will consider certificates for 12 pipeline and gas transmission projects, including two for the Mountain Valley Pipeline and PennEast in the Mid-Atlantic. It will also take up approvals for three LNG projects, including Jordan Cove and Golden Pass LNG Terminal. Certificates are typically simpler cases, and if Christie is voting these will likely all be approved.
The commission may also act on “certain exclusions under the National Environmental Policy Act” that could be an effort to help pipelines and LNG terminals avoid being forced to calculate downstream greenhouse gas emissions, a Democratic priority dating back to the Obama administration. However, such a rule would almost certainly only be a proposal and thus put on the back burner by an incoming Democratic chairman.
THE KEYSTONE STATE: Biden intends to rescind the cross-border permit for TC Energy’s Keystone XL pipeline on his first day in office, three sources confirm to POLITICO’s Lauren Gardner and Ben Lefebvre. The move is among a list of climate change actions Biden has planned for Day One, according to a presentation circulating among Washington trade groups and lobbyists, a portion of which was seen by POLITICO.
Incoming chief of staff Ron Klain also released a memo Saturday outlining Biden’s planned executive actions during the first days of his presidency, including rejoining the Paris climate accord.
TC Energy announced Sunday that Keystone XL would achieve net-zero emissions across operations once it begins running in 2023. The heads of the National Association of Manufacturers, North America’s Building Trades Unions, United Association and International Union of Operating Engineers also wrote to Biden Sunday on Keystone, warning that if the “union project is blocked, workers and families will lose a huge opportunity” and “renewable energy goals would be set back.”
BIDEN TAPS KLEIN FOR INTERIOR DEPUTY: Biden named Elizabeth Klein as the deputy secretary of the Interior Department on Monday, bringing the lawyer who served at the agency during the Clinton and Obama administrations back to help implement his climate change agenda. Klein was recently deputy director of the NYU School of Law’s State Energy and Environmental Impact Center, where she worked under David Hayes, who is joining the administration as a special assistant to Biden on climate policy.
In case you missed it: Biden also tapped Obama-era EPA veteran Janet McCabe to be the agency’s No. 2 leader on Friday.
GRANHOLM DISCLOSURES: ENERGY STOCKS, EV MAKER BOARD: Energy Secretary nominee Jennifer Granholm’s financial disclosure, released Monday, shows annual income of more than half a million dollars per year thanks to her work for the liberal super PAC American Bridge, a retainer with liberal watchdog Media Matters, speaking fees, and an adjunct professorship at the University of California-Berkeley. But most of her wealth appears to come from investment real estate holdings valued between $1 million and $5 million, and stock options with the electric car maker Proterra, where she is also a board member, valued in the same range.
In a letter to ethics officials, Granholm promises that, if confirmed to her post, she will resign from the board of both California-based Proterra and Wisconsin shipbuilder Marinette Marine, and quit her job with the university. She will also exercise her vested stocks in Proterra and sell them, as well as most of her other individually held stocks. These include utility giant Duke Energy, solar panel maker and developer FirstSolar, and automaker Ford Motor Company. She will also end her relationships with speaker firms and dissolve Granholm Mulhern Associates, a consulting firm she owns with her husband.
PRIORITIZE THIS: The system the Trump EPA put in place in 2018 to focus its work assessing the health dangers of toxic chemicals on the highest priority assessments has been confusing and counterproductive, according to a Government Accountability Office report slated for release today. Recall: That survey system implemented by EPA research chief David Dunlap effectively killed off a controversial assessment of formaldehyde that was poised to link the ubiquitous chemical with leukemia — a finding Dunlap had previously fought while working for Koch Industries, a major formaldehyde emitter.
GAO found that Dunlap’s system of surveying program offices for their priorities for the Integrated Risk Information System, and requiring the politically appointed assistant administrators to sign off on them, has left staffers making “arbitrary decision[s]” about what chemicals to recommend, and, when their suggestions were dropped, unmotivated to participate again.
Instructions were never given to staff on what makes an assessment a high priority, GAO said, nor on how assistant administrators decide whether or not to sign off on their staff’s requests. For instance, in 2019, one office submitted 26 recommendations for chemicals the IRIS program should assess, but the assistant administrator only signed off on one. And the narrowed priorities haven’t resulted in faster progress on assessments; GAO found that since December 2018, no assessments have advanced to the next major step in the process. By the second year the survey system was in place, less than half of program offices even bothered to participate, GAO found.
EPA says it has updated its survey program and issued a memo since the GAO audit was conducted, but GAO said more specific guidance to staff is needed.
TRUMP WON’T FINISH NEW PLANT RULE: The Trump administration will not finalize a rule easing emissions limits for any coal-fired power plants built in the future. EPA proposed easing the limits in 2018 to remove a requirement for partial carbon capture and storage — but commandeered that rulemaking last week to declare that no stationary industry except power generators can be regulated for greenhouse gases. There was speculation that the actual coal plant numeric limits might still be issued in the final moments of the Trump administration. However, EPA said in a Friday court document that it won’t be able to reach the finish line before the inauguration. “Because that transition is imminent, EPA requests that this case remain in abeyance pending a determination by the incoming administration as to the appropriate action or actions to be taken with regards to” the rule.
Impact: Nobody expected any new coal plants to be built under either version of the rule.
EPA WON’T CHANGE AIR DEAL WITH INDIANA UTILITY: The Trump administration has not changed its mind about a Clean Air Act settlement with Indianapolis Power & Light, despite complaints from environmental groups and the state of Wisconsin. IPL allegedly failed to add pollution controls when it upgraded a coal plant. The settlement, announced in August, would allow the utility to avoid installing controls now if it closes two of its other plants by 2023, which the company had already announced plans to do. It also required the construction of a renewable energy source to power the coal plant’s internal energy needs and would set aside land for conservation.
The green groups asked for changes to the renewable source and asked for more land be bought for conservation, while the Wisconsin Department of Natural Resources argued that the retirement of the two plants is “meaningless” as it was already planned. But in a court filing last week, EPA said it would not change the deal because reopening negotiations with IPL “would require the parties to go back to the drawing board, with no certainty that an improved project, or any amended agreement for that matter, would result.” Now the settlement goes before a judge for final approval.
SURVEY SAYS: The Atlantic Council’s Global Energy Forum kicks off today with energy leaders from around the world, including Energy Secretary Dan Brouillette. To mark the event, the Atlantic Council released a series of essays from experts, including Fatih Birol and Daniel Yergin, as well as the results of a survey of international energy leaders.
Sixty-one percent of survey respondents said they believed that the Covid-19 pandemic will accelerate the energy transition, while 20 percent thought it would impede it. Forty-three percent of respondents said peak oil demand has already occurred or will occur within the next five years, according to the report, while 46 percent said it will occur late this decade or sometime in the next one. Eleven percent said it will occur in 2040 at the earliest or that it may not ever occur.
— “Biden team eyes Obama coal plan for federal oil, gas lease ban,” via POLITICO Pro.
— “Businesses aim to pull greenhouse gases from the air. It’s a gamble,” via The New York Times.
— “Big Oil’s flagship plastic waste project sinks on the Ganges,” via Reuters.
— “Trump aims to end ethanol warnings in biofuel policy blitz,” via Bloomberg.
— “Nikolai Antoshkin, who helped halt Chernobyl disaster, dies at 78,” via The New York Times.
— “Colorado sues Bureau of Land Management over Western Slope management plan from William Perry Pendley,” via Colorado Sun.
THAT’S ALL FOR ME!
