With help from Gavin Bade and Anthony Adragna
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— Democrats last night debated key climate questions, from how to get China to cut its carbon emissions to the role natural gas should play in the energy transition.
— FERC will vote today on whether to set a price floor for subsidized renewable and nuclear energy in New York.
— The Agriculture Department is expected to announce plans to cut farmers’ environmental footprint in half by mid-century.
WELCOME TO THURSDAY! I’m your host, Kelsey Tamborrino. 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.
ClearView Energy Partners’ Kevin Book gets the win for correctly naming former President Jimmy Carter, who before being elected reported a UFO sighting in 1973. For today: How many secretaries of Energy also served as governor before joining the Energy Department? Send your tips, energy gossip and comments to ktamborrino@politico.com.
DEBATE TAKEAWAYS: Former New York City Mayor Mike Bloomberg used his first appearance on the debate stage last night to boast about his role in the shutdown of coal-fired power plants and to call for enforcing rules to stop the release of methane from fracking. But the former mayor also echoed Sen. Amy Klobuchar by calling natural gas a transition fuel and pitching a piecemeal approach to fracking. (Klobuchar also pointed to plans to make the U.S. carbon neutral, saying “we’re not going to be able to pass this unless we bring people with us.”)
“We’re not going to get rid of fracking for a while,” Bloomberg said last night. “… It is a technique. When it’s done poorly like they’re doing in too many places where the methane gets out into the air, it is very damaging. … We want to go to all renewables but that’s still many years from now.” Sen. Bernie Sanders meanwhile was asked about a recent New York Times report on whether a candidate who calls for a fracking ban can win in states like Pennsylvania. “What I tell these workers is that the scientists are telling us, if we don’t act incredibly boldly within the next six, seven years, there will be irreparable damage done,” Sanders said.
The candidates also argued about how to get China to cut its carbon emissions. “You’re not going to go to war with them,” Bloomberg said. “… You have to convince the Chinese that it is in their interests as well. Their people will die just as our people will die, and we’ll work together.” Former South Bend, Ind. Mayor Pete Buttigieg shot back that he was “a little skeptical that convincing is going to do the trick when it comes to working with China,” because “America has repeatedly overestimated our ability to shape Chinese ambitions.”
And, former Vice President Joe Biden called it “clear” that China is taking the dirtiest coal and spreading it around the world. He said last night he would “invite all the members of the Paris accord to Washington, D.C.,” if elected president. “They know me. I’m used to dealing with international relations. I will get them to up the ante,” he said. On China, Biden added that he would make it clear to the nation that, “If you continue, you will suffer severe consequences because the rest of the word will impose tariffs on everything you’re selling.”
Sen. Elizabeth Warren was asked about her call to end new drilling and mining on public lands, and opened the door to exceptions for specific resources like lithium or copper. “If we need to make exceptions because there are specific minerals that we’ve got to have access to, we locate those and we do it not in a way that is just about the profits of giant industries, but in a way that is sustainable for the environment,” she said. The senator also brought up the issue of environmental justice, calling for it to get “more than a glancing blow in this debate. … We can’t simply talk about climate change in big global terms. We need to talk about it in terms of rescuing the communities that have been damaged,” she said.
MORE MOPR MADNESS AT FERC: FERC is set to vote this morning on a proposal from New York gas generators that would set a price floor for subsidized renewable and nuclear energy in the state, likely preventing them from clearing capacity market options and boosting revenues for the gas plants that remain.
The proposed “Buyer Side Mitigation” plan is similar to price floors FERC has approved in New England and the mid-Atlantic PJM market, called Minimum Offer Price Rules. FERC previously declined to apply the New York program to renewables, but many observers expect it to reverse course in a rehearing order today and extend the price floor to wind, solar, nuclear plants and possibly energy storage.
Senate Minority Leader Chuck Schumer warned FERC Chairman Neil Chatterjee against applying the price floor in his state, saying in a letter late Wednesday that FERC’s PJM decision had “unleashed chaos” in that market and will lead to “significant price increases” for consumers. “I strongly advise against taking any action that would undermine New York’s climate and clean energy goals,” Schumer wrote.
If FERC does, it will have effectively hampered clean energy participation in the three markets targeted by the Energy Department of Energy’s 2017 grid resilience proposal, which would have provided ratepayer-funded contracts to coal, nuclear and oil plants in those regions. FERC unanimously rejected that DOE plan in early 2018, but critics say the MOPR orders will do more to support fossil fuel plants because the price floors are more likely to withstand legal challenges than the poorly designed DOE plan.
“The [DOE plan] would have been such a radical departure from FERC’s whole idea of market-based rates that I think it would have been much less likely to withstand judicial review and congressional oversight,” said Sierra Club attorney Casey Roberts. “The MOPR, while it is radical in its own way, fits more in the boundaries of what FERC has typically done … so it may be more durable in the long run.”
Chatterjee has said the MOPR orders do not seek to boost fossil fuels, only create a “level playing field” for plants that do not receive subsidies. But states that have nuclear subsidies and renewable energy mandates disagree, and have said they could end their participation in capacity markets, which pay plant owners upfront to ensure they make power available years in the future. Already, Illinois, Maryland and New Jersey are considering exiting the PJM capacity market, Connecticut is mulling a departure from ISO-New England’s, and New York utility regulators already have a proceeding open that could pull them from their ISO’s capacity market, putting the state in charge of long-term generation planning once again.
At the meeting, FERC will also vote on a dozen orders or rehearing requests for natural gas pipelines and export facilities. FERC’s Republican majority is likely to vote to approve the projects, while Democratic Commissioner Richard Glick will oppose them, saying FERC should give greater consideration to climate impacts when it evaluates the projects.
USDA TAKES AIM AT FARMERS’ ENVIRONMENTAL FOOTPRINT: The Agriculture Department is expected to announce today that it aims to cut farming’s environmental footprint in half by 2050 while increasing farm productivity by 40 percent, three sources briefed on the plan told POLITICO’s Catherine Boudreau. The initiative is not expected to specifically mention climate change. Instead, it will focus on research, innovation and improving USDA’s ability to collect data on farmers’ conservation practices, the sources said.
The goals are part of a new department-wide sustainability initiative, which Secretary Sonny Perdue will outline during a speech at USDA’s annual Agricultural Outlook Forum in Arlington, Va. How the department plans to define agriculture’s “environmental footprint” is unclear, Catherine reports.
IRS UNVEILS 45Q GUIDANCE: Almost two years after Congress initially expanded a tax incentive for carbon capture and sequestration projects as part of its 2018 budget bill, the IRS on Wednesday released its initial guidance on how exactly industries can take advantage of the tax credit. The IRS issued guidance describing what steps companies must take to show that construction on a project had begun in order to qualify for the expanded carbon capture tax credit, Pro’s Eric Wolff reports. The agency also issued a notice providing “safe harbor” for companies seeking to form tax partnerships. Developers with access to tax credits will often sign agreements that allow larger organizations to take the credits while providing capital for the project.
There is still one outstanding guidance on mandatory specifications for the sequestration and monitoring of captured carbon. The IRS promised in a statement that part of its guidance will be released in the “near future.”
GROUPS TO SUE OVER PFAS INCINERATION: Several community groups, led by Earthjustice, will sue the Defense Department today over its contracts to incinerate firefighting foam containing PFAS in several U.S. towns, alleging violations of the National Environmental Policy Act and the National Defense Authorization Act for FY2018. The suit will be filed today in the U.S. District Court for the Northern District of California.
Earthjustice says documents it gathered under FOIA show contracts for burning of the toxic chemicals that has already occurred or is occurring in East Liverpool, Ohio; Arkadelphia and El Dorado, Ark.; and Cohoes, N.Y. The documents also show that DoD authorized PFAS incineration in other locations, including Port Arthur, Texas, and Sauget, Ill., Earthjustice says.
TRUMP CELEBRATES WATER RULES IN CALIFORNIA: President Donald Trump officially signed a “record of decision” Wednesday, outlining endangered species rules for California’s main water hub, POLITICO’s Debra Kahn reports. Central Valley politicians have railed for years against water restrictions intended to help salmon and smelt that inhabit the Sacramento and San Joaquin rivers and Delta further north. The Trump administration estimates the new water rules will increase deliveries by 600,000 acre-feet in an average year, more than a 10 percent increase over average deliveries of 5 million acre-feet.
During remarks in California, Trump took aim at the state’s Democratic leaders. “What they’re doing to your state is a disgrace,” Trump said. “After decades of failure and delays in ensuring critical water rights for the people of the state, we are determined to finally get your problems solved.” He also mocked Gov. Gavin Newsom and state officials for fighting his administration on auto emissions rules and high-speed rail, calling a car made under his rules “safer because it would not be made out of papier-mache.”
CORONAVIRUS CUTS CHINA EMISSIONS: The deadly coronavirus outbreak has led to drop of about 100 million metric tons in China’s carbon emissions, according to analysis from nonprofit Carbon Brief. The report found that coal use at power stations in China have slumped to a four-year low, and refinery operating rates in the country’s main oil refining hub hit their lowest level since 2015. “Taken together, the reductions in coal and crude oil use indicate a reduction in CO2 emissions of 25 percent or more, compared with the same two-week period following the Chinese new year holiday in 2019,” the analysis said.
MURKOWSKI: ENERGY BILL COMING: Senate Energy Chairman Lisa Murkowski addressed the Alaska Legislature on Tuesday and told state lawmakers her bipartisan energy legislation will land next week. “When I get back to Washington, D.C., next week I intend to introduce a strong bipartisan bill to advance a range of clean energy technologies, from renewables to energy storage,” she said. “This is probably the single best step that we can take in this Congress to keep energy affordable, strengthen our long-term energy security and reduce our greenhouse gas emissions.”
No quick end for fossil development: Murkowski said with regards to climate change that the “debate is not about what is happening but what we intend to do about it” — and that that fossil fuel development will continue for quite a while. “I have to say it bothers me when I read and hear from some who suggest that in order to combat climate change Alaska must immediately turn away from developing our resources,” she said. “As far as I’m concerned, the very last drop of oil that the world uses should come from Alaska’s North Slope.” She pronounced herself “optimistic about our future production, but we can’t take it for granted.”
— “Boston harbor brings ashore a new enemy: Rising seas,” via The Washington Post.
— “Toxic Superfund cleanups decline to more than 30-year low,” via Associated Press.
— “Why the U.S. faces a steep path to a CO2-free grid,” via E&E News.
— “Arizona on track to bar cities from imposing natural gas bans,” via Reuters.
— “Why is big oil pumping money into Ventura County’s board of supervisor elections?” via Desert Sun.
THAT’S ALL FOR ME!
