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The Climate 202

Democrats' central climate program is in trouble

The Climate 202

Happy Thursday! My colleague Tony Romm, a congressional economic policy reporter at The Washington Post, helped with this edition of The Climate 202. We're looking forward to the new season of Succession dropping on Sunday. But first:

A reckoning over Democrats' central climate program

The White House is trying to salvage Democrats' signature climate policy for the power sector amid opposition from Sen. Joe Manchin III (D-W.Va.) and uncertainty about the Senate parliamentarian, according to four people close to the negotiations.

The details: White House aides fear that either Manchin or the parliamentarian could tank the Clean Electricity Performance Program (CEPP), which would reward utilities that deploy more clean energy and penalize those that do not.

Manchin had a frank conversation with White House aides late last week where he said he couldn't support the CEPP in its current form, according to two of the people close to the negotiations, who spoke on the condition of anonymity to describe the private discussions.

The centrist coal-state senator "doesn't see a formulation that could get past his concerns with regard to rewarding utilities for behavior they're already taking," one person said, "and he pretty much conveyed that."

Democrats are now making a last-ditch attempt to gain Manchin's support by tweaking the CEPP to include coal and natural gas plants equipped with carbon capture technology that stops their emissions from entering the atmosphere, two of the people said.

  • In its current form, the CEPP would provide federal payments to utilities that increase their share of clean energy by 4 percent each year, and it would impose federal fines on those that do not.
  • While the program wouldn't explicitly exclude coal or natural gas, it would define "clean energy" as having a carbon intensity of 0.10 metric tons of carbon dioxide equivalent per megawatt-hour — a level so low that fossil fuel plants couldn't comply.
  • There are discussions about raising that level to 0.17 or 0.20 CO2e/MWh — opening the door to coal and natural gas plants equipped with carbon capture and sequestration (CCS) technology.
  • "We have long understood that coal with CCS, and money for coal with CCS, is probably going to be the cost of doing business with Senator Manchin, frankly," said one environmental advocate close to the talks.

White House officials have made assurances in recent days that the CEPP is not dead, but it may change dramatically to get Manchin on board, a Senate Democratic aide told Romm. Other potential changes could involve lowering the 4 percent clean energy threshold or eliminating the penalties for utilities that are climate laggards, the aide said.

But Sen. Edward J. Markey (D-Mass.) told The Climate 202 that watering down the CEPP would be a mistake. "Obviously that would be a very serious blow to … meeting our 2030 goals," Markey said in an interview Wednesday, referring to President Biden's pledge to reduce greenhouse gas emissions in the next decade.

A Manchin spokeswoman declined to comment.

'Byrd bath'

Then there are the questions about Senate parliamentarian Elizabeth MacDonough, who must decide whether the CEPP satisfies the "Byrd rule." Named after the late senator Robert C. Byrd (D-W.Va.), the rule requires measures that pass via budget reconciliation to be genuinely related to the budget.

Supporters of the CEPP have toiled for months to make sure the CEPP would satisfy the rule, and feel confident about their chances. But MacDonough recently surprised Democrats by ruling that their newest immigration proposal could not be included in the budget reconciliation bill.

"I've been saying for six months now that we aren't going to get a CEPP through a Byrd bath. And I think the weakest link there is penalties," said one industry representative close to the White House.

Exclusive new analysis

The final shape of climate provisions in both Democrats' reconciliation package and the bipartisan infrastructure bill will determine the extent to which it would achieve significant emissions reductions, according to an analysis by Energy Innovation, a San Francisco-based think tank, that was exclusively shared with The Climate 202.

If both bills were fully implemented, the United States would slash greenhouse gas emissions between 1,067 and 1,510 million metric tons in 2030, the analysis found. Coupled with state action and federal regulations, that would put the country on a path toward achieving Biden's climate goals.

If the CEPP were cut from the spending package, however, emissions would be 250 to 700 million metric tons higher per year in 2030, potentially eliminating more than a third of total emissions reductions under both bills.

"Our modeling confirms that [both bills] as currently designed would be by far the most significant legislative accomplishment in U.S. history on climate change," said Robbie Orvis, senior director of energy policy design at Energy Innovation, who co-authored the analysis with Megan Mahajan.

On the Hill

First in The Climate 202: Grijalva seeks to protect panel's climate programs

Democrats are not just nervous about the fate of their plan for the power sector. In a previously unreported letter sent to President Biden on Tuesday, House Natural Resources Chairman Raúl M. Grijalva (Ariz.) expressed concern that his panel’s climate provisions in the reconciliation package “may be left on the negotiating table.”

"Failing to consider these provisions as essential climate investments would mean failing to meet the scope of this crisis or the needs of American communities," he wrote in the letter, which was also sent to Biden administration officials including Interior Secretary Deb Haaland and White House national climate adviser Gina McCarthy.

The Natural Resources panel last month approved a $25.6 billion slice of the reconciliation package, including $9.5 billion for coastal restoration and climate resiliency projects and $3 billion to support a Civilian Climate Corps.

“I'm worried that some of these provisions could wrongfully end up on the cutting room floor … because sometimes they're not appropriately considered climate provisions,” Grijalva said in an interview with The Climate 202. “And that bothers me.”

Grijalva added that he plans to discuss the letter with a fellow Democrat from Arizona, centrist Sen. Kyrsten Sinema, whose office has denied a New York Times report that she wants to cut at least $100 billion in climate funds from the package.

Agency alert

Top administration officials met to discuss rising energy prices

Energy Secretary Jennifer Granholm, Agriculture Secretary Tom Vilsack and Secretary of State Antony Blinken were among officials who met on Tuesday to discuss the challenge of rising gasoline and natural gas prices, Bloomberg’s Jennifer Jacobs and Annmarie Hordern report

Reuters reported Wednesday that White House officials have been in touch with representatives from major oil and gas companies about how to reduce prices.

Biden administration releases plans for seven offshore wind farms

The wind farms would dot the East and West coasts and the Gulf of Mexico in a major expansion of offshore wind power, the Associated Press's Matthew Daly reports. The goal is to deploy 30 gigawatts of offshore wind energy by 2030, enough to power 10 million homes and avoid about 78 million metric tons of planet-warming carbon emissions.

  • Interior Secretary Deb Haaland said her department hopes to hold lease sales by 2025 off the coasts of Maine, New York and the Mid-Atlantic, as well as the Carolinas, California, Oregon and in the Gulf of Mexico, Daly reports.
  • Renewable energy has struggled to match the pay and job protections that some blue-collar workers found in the fossil fuel industry, but offshore wind could be an exception. Labor advocates in Northeastern states are looking to offshore wind projects as a potential source of good-paying, union jobs, E&E News' Benjamin Storrow and WBUR's Miriam Wasser report.

Countdown to COP26

CEOs and celebrities are headed to Glasgow

Organizers of the United Nations climate conference, known as COP26, are being flooded with requests from the rich and famous who are planning to travel to Glasgow, Scotland for the biggest climate event since 2015. 

  • “Call it climate FOMO,” Politico’s Ryan Heath and Karl Mathiesen write. “Names like Leonardo DiCaprio, Bill Gates and Jeff Bezos are anticipated.”
  • The influx of A-listers is expected to create some logistical challenges: Up to 30,000 people are expected to descend on Glasgow, a city with only 12,000 hotel rooms. 

The power grid

The grid isn’t ready for the electric car revolution

By 2035, automakers will have turned away from the internal combustion engine. The primary challenge soon will be less about making electric vehicles and more about ensuring that there is sufficient infrastructure to support them, The Post's Will Englund reports.

America’s electricity grid is already plagued by sporadic blackouts, and the rise of electric vehicles will dramatically increase demand. One study suggests that the United States will need to invest $125 billion in the grid by 2030, but the current infrastructure bill in Congress includes only about $5 billion toward transmission line construction and upgrades.

Private equity funds are pumping billions into fossil fuel projects

As oil companies face pressure to start shifting away from fossil fuels, many of their dirtiest assets are ending up in the hands of private-equity-backed firms, which are “looking to pick up riskier, less desirable assets on the cheap,” The New York Times’s Hiroko Tabuchi reports.

The private equity industry has poured at least $1.1 trillion into the energy sector since 2010, according to data from Pitchbook, a company that tracks investment, and research by the Private Equity Stakeholder Project. That’s double the combined market value of three of the world’s largest energy companies, ExxonMobil, Chevron and Royal Dutch Shell. Only about 12 percent of the investment has gone toward renewable energy sources such as solar and wind.


Too real.

Thanks for reading. See you tomorrow.