With help from Ben Lefebvre, Kelsey Tamborrino and Catherine Morehouse.
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— Oklo is planning another go at its application for its advanced small nuclear reactor after getting denied by the Nuclear Regulatory Commission this month.
— Oil prices shot up this week just as the Biden administration was hoping to put the political crunch over rising fuel prices to rest.
— The House will be examining legislation on pipeline security, abandoned well clean up and several other energy priorities today.
WELCOME TO WEDNESDAY! I’m your host, Matthew Choi. Congrats to Morgan Johnson of NRDC for knowing Mendl’s specialty pastry was the courtesan au chocolat in “Grand Budapest Hotel.” For today’s trivia: What was the café where the students organized in “The French Dispatch”? 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: Saving BBB’s climate investment.
THE SMALL NUCLEAR OPTION: The Nuclear Regulatory Commission denial earlier this month of the country’s first application for an advanced small nuclear reactor left Oklo, the company behind the effort, frustrated. But it also presented setback for a technology that the Biden administration and many climate groups say is vital for reducing greenhouse gas emissions. But Oklo isn’t throwing in the towel and plans to resubmit its application “relatively quickly” with more clarity on what the commission wants.
Pro’s Josh Siegel and Kelsey Tamborrino caught up with Oklo CEO Jacob DeWitte on the company’s next steps and where DeWitte feels the federal government could better help with the development of the next generation of nuclear. DeWitte said there was “a lot of opportunity to improve” the Nuclear Regulatory Commission’s procedures for new small reactors, and added Congress could guide NRC in doing so. Since Oklo’s application was denied, he said the firm saw “a lot of calls and questions” showing interest on the Hill to support the budding industry.
“This does provide a good moment to look at these things and see how we can all move together and really drive the kind of changes we want to see happen across the board,” he said. Read more from Josh and Kelsey’s interview with Oklo CEO Jacob DeWitte here.
DEJA CRUDE: Just when the Biden administration thought it was done with high oil prices, the market surged to a new peak. U.S. benchmark prices topped $85 a barrel on Tuesday, a seven-year high, after having fallen below $70 in November. The increase, happening in oil markets around the world, comes as fuel demand returns to pre-pandemic levels just as tensions flare between Russia and Ukraine in Europe and between Iran and the United Arab Emirates in the Middle East — both important regions for oil production.
The administration is clearly looking to open more taps. DOE on Tuesday announced it had awarded a loan of 400,000 barrels of oil from the Strategic Petroleum Reserve to Atlantic Trading and Marketing, bringing the total release to over 8 million barrels. Energy Secretary Jennifer Granholm told reporters on Friday that the White House is looking to Beijing to follow the Biden administration’s lead in offering up additional barrels.
“The Biden administration secured an agreement with China to do a release from their strategic petroleum reserves as well, which they have announced they’re going to do,” Granholm told reporters, adding that China could offer up more than the 50 million barrels the DOE has pledged to the effort. Granholm went on to say that the administration wants to see more oil supply hit the market in the short term, but that the only long-term solution to oil price volatility is a stronger shift toward electric vehicles.
Still, this will be a political field day for attacks on the administration, as Republicans have homed in on high prices at the pump and just about everywhere else in day-to-day consumer lives. House Republicans are holding a forum today on rising fuel prices, with lawmakers pointing to Biden’s prioritization of renewables as a key culprit, rather than global economic trends beyond the administration’s control.
“Our neighbors across the pond are living through an energy crisis due to overregulation of their energy sector, and President Biden has placed the U.S. on the exact same path,” said Rep. Dan Newhouse (R-Wash.), chair of the Western Caucus, which is co-hosting the forum with House Oversight Republicans.
IN COMMITTEE: The House will be taking a look at several energy and environmental bills of note today, including Rep. Bobby Rush’s (D-Ill.) pipeline security bill, H.R. 6084 (117). The bill up for discussion at the Energy and Commerce Energy Subcommittee seeks to create stronger national standards for pipeline reliability through a FERC-led process.
Gas pipelines, unlike the bulk power grid, have few enforceable reliability and cybersecurity standards, and instead rely largely on voluntary measures That disparity is garnering a greater focus from lawmakers and regulators following recent lapses in the reliability and cybersecurity of the gas system, including the breakdown of the Texas power grid — which has become heavily reliant on natural gas in recent years — and the ransomware attack on the Colonial Pipeline.
FERC Chair Richard Glick, who is testifying today alongside DOE Deputy Secretary David Turk, has long called for stricter regulations for the pipeline sector to prevent breakdowns. Tackling the issue is “long-overdue,” he’ll say in his opening statement, but the right legislation “will better secure the reliability of our Nation’s energy infrastructure in the face of threats such as extreme weather and cyber-attacks.”
Meanwhile, the House Science Committee will hold a markup today on the bipartisan Abandoned Well Remediation Research and Development Act (H.R. 4270 (117)), which would direct the energy secretary to establish a research and development program for plugging abandoned wells and cleaning up their environs. The bill authorizes up to $35 billion per year for the effort by 2026. The markup will also include nuclear research investment legislation (H.R. 4819 (117)) and a bill to create a DOE program for microelectronic research and development (H.R. 6291 (117)).
The House Natural Resources Committee will also have a markup today on numerous environmental and wildlife bills, including the bipartisan Recovering America’s Wildlife Act (H.R. 2773 (117)), which would bolster state, tribal and territory funding for fish and wildlife conservation.
ANOTHER HOUSE ENERGY RETIREMENT: Rep. Jerry McNerney (D-Calif.), who sits on the energy subcommittees of both the House Energy and Commerce and House Science committees, will not seek reelection in California’s newly created 9th Congressional District. McNerney’s retirement announcement follows that of Rep. Rush, who announced earlier this month he wouldn’t seek another term.
“As a senior Member on Energy & Commerce with deep expertise in energy, Congressman McNerney has fought relentlessly to move our nation closer to a clean energy future. And, with a PhD in mathematics, he has served as a valued and knowledgeable voice on the Science, Space, and Technology Committee,” House Speaker Nancy Pelosi said in a statement Tuesday.
THE MAYORS WITH MICHAEL: EPA Administrator Michael Regan will be unveiling new water infrastructure loans for three urban areas as he addresses the U.S. Conference of Mayors today. The loans total $688 million and will be provided to Baltimore, Milwaukee and Northern California’s Union Sanitary District under the Water Infrastructure Finance and Innovation Act loan program, which has already invested more than $5 billion across the country, according to EPA.
During his address, Regan plans to extol the bipartisan infrastructure package and its $50 billion in water funding, while pressing the importance of federal-local partnerships in equitably using infrastructure resources. Regan plans on “issuing guidance in the coming months that will go into greater detail to help ensure that this historic investment reaches our most vulnerable communities,” according to talking points shared with ME.
ORPHAN WELLS COMMITTEE: Interior signed a 10-year agreement with EPA, Department of Agriculture and other federal agencies to help administer its $4.7 billion program to cap orphan wells. In formalizing the plans Interior laid out last month, the department also said it will set up a seven-member executive committee to oversee the program.
GRANHOLM GOES TO MEXICO: Granholm is headed to Mexico this week to meet with President Andrés Manuel López Obrador as the country undergoes a number of fundamental shifts in its energy policy, Reuters reports.
López Obrador presented a plan last year to drastically increase the state’s role in the energy sector, including in electricity and resource extraction — a plan that has raised concerns in the U.S. and in Mexico of increasing investor uncertainty and chilling private investment in renewables. The López Obrador government is also investing heavily in the nation’s oil industry to try to wean it off of foreign energy. But critics say the push runs counter to the country’s clean energy goal, including the pledge made a decade ago under President Felipe Calderón to get a third of its power from clean energy by 2024.
BOILER PLATED: The U.S. Court of Appeals for the D.C. Circuit is giving the Energy Department a limited 90 days to reexamine a Trump-era rule that strengthened energy efficiency requirements for certain commercial packaged boilers. After years of inaction, the Trump administration published the final rule in January 2020, setting more stringent efficiency standards for the large boilers than those of the American Society of Heating, Refrigerating and Air Conditioning Engineers — something that can only be done if the department has found clear and convincing evidence the more stringent standard is economically justified, technically feasible and will lead to significant conservation of energy.
In its opinion on Tuesday, the D.C. Circuit said that it wasn’t persuaded that DOE had it right when it concluded the rule was supported by clear evidence, and instead remanded it back to the department to address points raised by the petitioners. The court added the rule would be automatically vacated unless DOE addressed its concerns within 90 days.
In a response, the American Public Gas Association — one of the groups that originally petitioned over the rule — said it was disappointed the court did not vacate the rule entirely, but said it was pleased the court found DOE lacking. DOE did not respond to a request for comment.
CALIFORNIA’S BUTTING SOLAR RULES: The California Public Utilities Commission’s proposal to gut solar incentives for homeowners appears to be at odds with a California Energy Commission mandate for solar power in new homes, Pro’s Colby Bermel reports. The California Energy Commission’s 2-year-old mandate requires the panels remain within the financial reach of homeowners, but investors are saying the CPUC proposal would make them practically worthless investment unless paired with expensive batteries.
CPUC’s proposal would hit net metering by introducing monthly fees for home solar owners and reducing incentives, with carve-outs for homes with batteries. The proposal is meant to make sure solar owners pay their fair share for grid maintenance, but it has garnered fierce backlash from solar advocates, who say it will squeeze out a key element of the clean energy transition. The proposal is coming up for a vote in the coming weeks.
THE NORD STREAM 2 BARGAINING CHIP: Tensions with Russia are running high as Moscow continues to build up its military presence on its western frontier and recalls much of its embassy staff in Ukraine. Germany reiterated Tuesday that it’ll prioritize security alliances over its energy plans if Russia uses any coercive action against its neighbors — a stance that could include halting the Nord Stream 2 pipeline.
“We have no choice but to defend our common rules, even at a high, sometimes economic price,” German Foreign Minister Annalena Baerbock said in Moscow. “We have reiterated again and again, at different levels of this federal government, that should energy be used as a weapon [by Russia], that would then also have appropriate consequences with regard to this pipeline.” Hans von der Burchard has more on Nord Stream 2 from Berlin.
KILL OR BE KILLINGLY-ED: New England’s grid operator on Tuesday responded to a request by the owner of a yet-to-be-built natural gas plant to pause FERC’s decision to terminate the facility’s contract with the Independent System Operator.
Developer NTE Energy last week requested an emergency stay of 120 days in order to allow its Killingly Energy Center, originally set to begin operating in 2024, to participate in the ISO-NE Feb. 7 capacity auction and to prove the facility could be completed on schedule. But the grid operator, which had asked FERC in November to terminate its contract with the project, on Tuesday argued the facility “is not entitled to make endless representations of commitments that are lacking in substance,” and that its assertions of harm were “speculative.” NTE said if necessary, it will seek an appeal from the D.C. Circuit Court of Appeals.
— “Majority of US states pursue nuclear power for emission cuts,” via The Associated Press.
— “Ceramic makers face up to dangers of EU carbon challenge,” via The Financial Times.
— “Less than half of projected U.S. renewable diesel output likely by 2025,” via Reuters.
— “Lithium in a California lake could help U.S. gain energy autonomy,” via NBC News.
— “Exxon pledges net-zero carbon emissions from operations by 2050,” via POLITICO.
THAT’S ALL FOR ME!
