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API SHIFT: Is the American Petroleum Institute laying the groundwork to support putting a price on carbon?
It was lost in coverage of API’s State of the American Energy event yesterday, but the largest U.S. oil and gas lobby group tweaked its rhetoric around carbon pricing.
“Market-based policies can foster meaningful emissions reductions across the economy at the lowest societal cost,” reads an API report of its 2021 priorities released to coincide with the event. “An example can be carbon pricing – balancing reducing GHGs with flexibility and pacing to keep energy affordable.”
That statement, which has not been included in API’s annual report previously, goes on to suggest that carbon pricing could inspire companies to deploy carbon capture technologies.
While API is still not ready to endorse carbon pricing outright, it appears they see it as more favorable than a clean electricity mandate, or standard, which has become the preferred carbon reduction policy of Democrats and expected to be the path pursued by President-elect Joe Biden.
“We have seen market based approaches drive emissions down already with the use of cheap natural gas; and, as we engage on this issue, we will emphasize the importance of an economy-wide and market-based approach versus sector-by-sector regulation,” Stephen Comstock, API’s vice president of corporate policy, told Josh in a follow-up statement. The logic is that carbon pricing would help API members in the short term by quickening the pace of natural gas replacing coal.
Is this just posturing? Critics would likely argue API isn’t changing all that much.
API has long held the view it doesn’t take a position on carbon pricing — meaning it doesn’t endorse or oppose the concept — unless specific legislation is seriously being considered before Congress. But to critics, that has seemed like a cop out, and rejection of the more forceful position of oil majors such as ExxonMobil and BP that have endorsed a carbon price.
What’s more, API CEO Mike Sommers on a press call after the event skirted around a question if the group supports carbon pricing.
“Every company is taking a unique approach to this and as you know some of our member companies have called for a carbon tax,” Sommers said. “[We] will judge any proposal that is put forward by the United States Congress.”
But to us it appears API is dipping its toes a bit more deeply in the water, and might be waiting to see if more Republicans support carbon pricing, providing the group cover to go all in.
Centrist Republican groups and economists that support carbon pricing have hoped it could become a compromise position in a Democratic administration — less extreme than a mandate — and API’s subtle shift seems to add credence to that.
Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Josh Siegel (@SiegelScribe) and Abby Smith (@AbbySmithDC). Email [email protected] or [email protected] for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.
HOW ‘CREDIBLE’ IS API’S METHANE POSITION? The Environmental Defense Fund, a group that works with oil and gas companies to curb emissions, is not buying API’s commitment to consider supporting new federal methane regulations from the Biden administration.
“It’s like API is now grasping for a seat at a table it’s been trying to destroy for more than five years,” Ben Ratner, senior director with the Environmental Defense Fund+Business, told Josh.
Ratner released a statement yesterday arguing API’s new position lacks “credibility” because the group supported the Trump administration’s elimination of direct regulation of methane, while also opposing the Obama administration’s efforts to require oil and gas companies to check for leaks twice a year.
Bethany Aronhalt, an API spokeswoman, responded to Ratner’s criticism by suggesting the group is capable of changing.
“While others may stay focused on the past, we are focused on the future, and we look forward to working with the Biden administration on effective methane policies that build on industry progress in reducing emissions,” Aronhalt told Josh.
BIDEN CHOOSES LIBERAL FAVORITES FOR WHITE HOUSE CLIMATE OFFICE: Biden made a slew of new hires today for his new White House domestic climate policy office that are sure to please liberal activists.
He chose Maggie Thomas, an alum of the Jay Inslee and Elizabeth Warren presidential campaigns, as chief of staff for the domestic climate office overseen by Gina McCarthy. Thomas helped inspire the Biden team to adopt its target to eliminate carbon from electricity by 2035, an early timeline that had been championed by Inslee and Warren.
Biden also hired David Hayes as special assistant to the president for climate policy. Hayes, a former deputy Interior secretary in the Obama administration, most recently has led New York University’s State Impact Center, which has organized the efforts of state attorneys general challenging Trump’s environmental rollbacks.
Other hires for the domestic climate policy office, which will coordinate actions across the energy and environmental agencies, include Sonia Aggarwal as senior advisor for climate policy and innovation and Jahi Wise as senior advisor for climate policy and finance.
Another progressive favorite, Cecilia Martinez, will be senior director for environmental justice in the White House Council on Environmental Quality.
THE LATEST MIDNIGHT RULE: The Office of the Comptroller of the Currency has quickly finalized a rule seeking to prevent big banks from dropping or restricting their investments in fossil fuel companies.
The Trump administration’s November proposal made it clear the action was responding in large part to Republican criticism that big banks such as Citigroup, JP Morgan, Morgan Stanley, and Wells Fargo were refusing to invest in new oil and gas drilling in the Arctic. The rule says big U.S. banks can’t restrict specific industries from accessing lending or other financial services and must instead undertake an “individual” and “impartial” assessment of investment risk.
The proposal drew backlash from both big banks and Democrats, but the OCC turned around a final version in just 10 days (which is lightning fast in regulatory timelines) with little changes. The OCC did remove language from the proposal that directly called out banks for refusing to lend to oil and gas companies and said they were “unequipped” to assess risks such as climate change “unrelated” to financial exposure.
Republican lawmakers lauded the OCC’s move. “No matter how important their services are, they do not have the right to create de-facto bans on legal businesses like energy producers and gun manufacturers,” said North Dakota Sen. Kevin Cramer.
Environmental groups such as Friends of the Earth, however, are calling on Democrats to make the final rule a top target for cancellation under the Congressional Review Act (see yesterday’s newsletter to learn all about the CRA). The rule also doesn’t take effect until April 1, making it subject to a memo Biden is expected to issue day one to freeze all Trump actions that haven’t formally taken effect yet.
NEW YORK’S BIG OFFSHORE WIND BUY: Equinor, along with partner BP, will provide offshore wind power to New York in one of the country’s largest renewable energy procurements yet, the company announced yesterday.
The companies will provide nearly 2,500 megawatts of generation from two offshore wind projects, as well as work with New York to transform two of its ports into offshore wind manufacturing hubs, according to a news release.
The successful bids for the projects “represent a game-changer for our offshore wind business in the U.S. and underline Equinor’s commitment to be a leading company in the energy transition,” said Equinor CEO Anders Opedal. He added the move supports Equinor’s “strategic ambition of becoming a global offshore wind major.”
FORMER GOV. SNYDER CHARGED WITH WILLFUL NEGLECT OVER FLINT: Former Michigan Gov. Rick Snyder is appearing in court today, facing charges of willful neglect of duty following an investigation into the Flint water crisis, the Associated Press reports.
Reports earlier this week revealed Snyder, his former top health official, and other top officials in his administration had been told by Michigan’s attorney general office they were being charged.
Snyder, a Republican, was serving as Michigan’s governor when state officials made the decision in 2014 to switch Flint’s water supply. They did so, however, without properly treating the water, leading lead from old pipes to pollute the water supply of the largely African American city.
BIG INFRASTRUCTURE PUSH: The U.S. Chamber of Commerce and the Bipartisan Policy Center are leading more than 130 groups in a new campaign to pressure lawmakers to pass legislation investing significantly in infrastructure by July 4.
The groups will be looking for Congress to weave in efforts to boost clean energy and curb greenhouse gas emissions as part of any infrastructure package. Other members of the coalition include North America’s Building Trades Unions, the National Wildlife Federation, and the National Association of Home Builders, as well as groups representing state transportation and water officials.
There’s a ripe opportunity to get something done: Biden and both parties in Congress have expressed interest in a comprehensive infrastructure package to help fuel the U.S. economic recovery from the pandemic.
Such a package could be one of the best ways to enact climate and clean energy policies in the near-term, too. Sasha Mackler, who directs BPC’s energy project, told Abby he’d like to see any infrastructure bill include major investments in energy infrastructure such as clean energy transmission, updates to permitting to speed development of emissions-reducing projects, and enhancements to infrastructure’s resilience to climate change effects.
STATES CHALLENGE EPA SOOT DECISION: California Attorney General Xavier Becerra (Biden’s pick for Health and Human Services secretary) led 16 other states and New York City in arguing the EPA’s decision not to tighten air quality standards for industrial soot is unlawful.
The states’ lawsuit, filed yesterday, is the first challenge to the EPA’s decision declining to strengthen pollution controls for fine particulate matter (or PM2.5). The move drew intense backlash from environmentalists and went against the advice of EPA’s own career scientists. Environmentalists are calling on the Biden administration to quickly tighten the standards, though the new EPA team would have to undergo a lengthy rulemaking process to do so.
Becerra noted scientific studies have proven negative health effects from PM2.5 pollution even at minuscule levels and shown those effects are exacerbated by the coronavirus. “History books will record unkindly the Trump Administration’s callous disregard for their lives and the willful denial of science and the law,” the attorney general added.
GRADING GREEN GROUPS ON DIVERSITY: Environmental groups are hiring more people of color, but there remains a lack of diverse representation among senior staff and board members, according to a report released yesterday by Green 2.0.
Transparency among companies is uneven: While 37 out of the largest 40 NGOs responded to Green 2.0’s annual survey, only 11 of the largest 40 foundations reported data.
“We are seeing nonprofit organizations take the issue of diversity more seriously and prioritize it and be more willing to be transparent, but foundations refuse to be transparent and are still not taking the measures needed to accelerate change,” Andres Jimenez, the executive director of Green 2.0, told Josh.
FORMER EPA PRESS LEADER PASSES: Russ Dawson, who led the EPA’s press shop for much of the Reagan administration, died Sunday. He was 72. Following his stint at the EPA, Dawson led environmental communications at Potomac Communications Group, where he worked with corporate executives, major trade associations, and administration officials.
The Rundown
Politico Trump’s EPA team overrules career scientists on toxic chemical
Reuters Solving climate crisis will be at center of Biden’s job agenda -Deese
Politico Banks, insurers move to shape climate debate as Washington crackdown looms
New York Times Trump opens habitat of a threatened owl to timber harvesting
Calendar
FRIDAY | JAN. 15
1 p.m. BuildingAction hosts a virtual event on the outlook for sustainable building policy in 2021, featuring Clean Energy for Biden leader Dan Reicher and congressional staff. Abby will moderate.
