| | | | | |  | | By Matthew Choi | With help from Kelsey Tamborrino, Josh Siegel, Alex Guillén and Catherine Morehouse PROGRAMMING NOTE: Morning Energy won't publish from Friday, Dec. 24-Friday, Dec. 31. We'll be back on our normal schedule on Monday, Jan. 3. Editor's Note: Morning Energy is a free version of POLITICO Pro Energy's morning newsletter, which is delivered to our subscribers each morning at 6 a.m. The POLITICO Pro platform combines the news you need with tools you can use to take action on the day's biggest stories. Act on the news with POLITICO Pro. | | | — Sen. Joe Manchin refused to support his party's reconciliation package, sending activists and lawmakers scrambling for a new path on climate. — House Natural Resources Democrats want a new probe into this year's Southern California oil spill, citing a recent indictment on the firm at the center of the spill. — Sen. Ted Cruz reached an agreement to lift his hold on national security nominees in exchange for a vote on his sanctions bill over the Nord Stream 2 pipeline. WELCOME TO MONDAY. I'm your host, Matthew Choi. Rachel Starr in Sen. John Hickenlooper 's office gets the trivia for knowing Greta Gerwig was born and raised in Sacramento, Calif. For today: Hans Zimmer went to boarding school in which two countries? Send your tips and trivia answers to mchoi@politico.com. 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: The alarming Western megadrought. | | | | | | | | STEP INSIDE THE WEST WING: What's really happening in West Wing offices? Find out who's up, who's down, and who really has the president's ear in our West Wing Playbook newsletter, the insider's guide to the Biden White House and Cabinet. For buzzy nuggets and details that you won't find anywhere else, subscribe today. | | | | | | | | HOW MANCHIN STOLE CHRISTMAS: Senate Energy Chair Joe Manchin dropped a bomb Sunday morning, saying he doesn't back Democrats' reconciliation package. Suffice it to say, it left his colleagues and the White House dumbfounded. Citing concerns with inflation, Manchin told Fox News Sunday he was a "no" on the bill. He made his position crystal clear in a statement shortly after , where he said pushing a transition to clean energy "at a rate that is faster than technology or the markets allow will have catastrophic consequences for the American people like we have seen in both Texas and California in the last two years." White House press secretary Jen Psaki issued a scathing statement shortly after, saying Manchin and President Joe Biden had an agreement to keep working on their proposals and called Manchin's Sunday comments "a breach of his commitments to the President and the Senator's colleagues in the House and Senate." The White House had been so confident in its position that it held a call with environmentalists as recently as Friday to tell them to tune out the noise from Manchin on BBB and to say the climate items were still on track, Pro's Josh Siegel learned. Manchin's staff informed the White House and Democratic aides ahead of time about his position, POLITICO's Burgess Everett, Nicholas Wu and Jonathan Lemire report. But his peers are angry they didn't hear it from him directly, particularly after going through hoops and leaps for months to bend their climate items to his liking. "I am so frustrated I am sputtering." said Sen. Tina Smith (D-Minn.), the main backer of the Clean Electricity Performance Program that Manchin axed. "The clean energy tax credits in BBB were tech neutral. It was a package designed to follow the market signals but to support those market signals so investors can make decisions to support clean power." "Not only to find out that he's backing out, but he didn't even have the decency to call us, to announce this on Fox News," Rep. Sean Casten (D-Ill.) said. "We thought he was better than that." | 
Sen. Joe Manchin. | Jacquelyn Martin/AP Photo | HOW DOES THIS MAKE US LOOK? The Biden administration was hoping a major legislative win on climate could prove the U.S.' commitment to fighting climate change isn't dependent on who occupies the White House. Observers both internationally and at home were skeptical about how Biden could achieve a 50 to 52 percent reduction in emissions by decade's end — the goal he'd paraded in front of world leaders last spring — without a strong legislative mechanism. "The rest of the world is looking at us now and saying, 'You are who we thought you were'," said Casten, who traveled to Glasgow for the U.N. climate summit this fall. That 2030 deadline was also a key motivator in the reconciliation package's timeline. Biden has repeatedly called the next several years the "defining decade" on rapidly reducing emissions if there is any hope to keep warming under 1.5 degrees Celsius by 2100. And while the bipartisan infrastructure bill passed earlier this year also tackled clean energy research and development and electric vehicle charging infrastructure, researchers and Democrats alike have made clear the bipartisan bill on its own won't get the United States to its emission reduction goals. The reconciliation bill also included provisions to bring home the supply chain for clean energy technology, including tax credits for domestic manufacturing. Currently, much of that supply chain lies abroad, often in countries with unflattering human rights records like China. "If you believe in American competitiveness, and the viability of American industry, and American manufacturing, the investments that Build Back Better make have to be passed. Period. Full stop," Josh Freed, head of Third Way's Climate and Energy Program, told ME. NOT THROWING IN THE TOWEL YET: Despite the blow to morale, backers of the climate portions of BBB aren't calling it game over. Activists and lawmakers who worked directly with Manchin and his staff said the West Virginian had appeared receptive to the clean energy portions of the bill during their talks. Leah Stokes, a UC Santa Barbara professor who worked with Democrats on climate provisions of the reconciliation package, pointed to Manchin's posturing ahead of the Covid rescue package early this year and said maybe the path forward means "returning in January to figure out what he is on board with." "You know, that's the optimistic take," she added. "This was never the only iron in the fire on climate but it was a huge opportunity," said House climate hawk Rep. Jared Huffman, who also attended COP26. "The difference between climate and all of these other [policy areas] that Manchin's statement mentioned is more than a political setback, it's existential. And when an issue is existential, you don't just walk away. You fight harder." But what a future vehicle for the climate items would look like remains a big question mark. If the climate items are split from the rest of the package as a standalone bill outside of reconciliation, it could still be stopped by filibustering Republicans in the Senate. And if Democrats do use reconciliation, that's one less reconciliation package at their disposal for other priorities next year. | | | CALIFORNIA OIL SPILL STILL UNDER THE MICROSCOPE: The top Democrats of the House Natural Resources Committee want a hearing with Amplify Energy, the firm at the center of the Southern California oil spill in October. Chair Raúl Grijalva, along with Energy and Mineral Resources Subcommittee Chair Alan Lowenthal and Oversight Subcommittee Chair Katie Porter , wrote to the company Friday, citing allegations of negligence levied in a federal indictment last week. The lawmakers asked Amplify to respond by Jan. 3 with dates to testify that month. Read the letter here. CRUZ TO GET HIS VOTE: Sen. Ted Cruz (R-Texas) reached an agreement with Democrats to release his hold on several national security nominations, which he had been stonewalling to push through sanctions on the Nord Stream 2 pipeline, Andrew Desiderio reports for Pros. The Senate will vote before Jan. 14 on Cruz' legislation sanctioning the contentious project that ferries Russian natural gas to Germany. The State Department opted against imposing mandatory sanctions related to the pipeline earlier this year as part of its bid to mend relationships with the German government, which backed the project. But lawmakers viewed doing so as capitulating to a direct breach of Russian infrastructure in NATO territory. Regardless of their disapproval of the projects, senators from both parties were tiring of Cruz' blockade on key ambassadors in critical countries, Andrew reports. "I think it's perfectly reasonable for senators to try and get votes on policy issues that matter to them," Sen. Chris Coons (D-Del.) told Andrew. "What I think is perfectly unreasonable is that there are holds on dozens of ambassadors and senior nominees by several Republican senators. We have to have a path towards confirming qualified nominees." | | | LANDOWNERS CHALLENGE SPIRE CERTIFICATE: The Niskanen Center on Friday challenged FERC's order granting the Missouri-based Spire STL Pipeline a temporary certificate to operate on behalf of landowners, asking the commission in a request for rehearing to clarify the pipeline company does not have eminent domain authority under the certificate. The landowners want to end the condemnation proceedings against them, but will not try to eject the pipeline company entirely or interfere with its delivery of natural gas to customers, according to the filing. "Landowners do, however, reserve the right to seek damages for Spire's continued trespass," Niskanen wrote. | | | | BECOME A GLOBAL INSIDER: The world is more connected than ever. It has never been more essential to identify, unpack and analyze important news, trends and decisions shaping our future — and we've got you covered! Every Monday, Wednesday and Friday, Global Insider author Ryan Heath navigates the global news maze and connects you to power players and events changing our world. Don't miss out on this influential global community. Subscribe now. | | | | | | | | CLIMATE SHOWDOWN IN FEBRUARY: The Supreme Court will hear arguments in the fight over the scope of EPA's climate authority over power plants on Feb. 28, the court announced on Friday. The court in October said it would hear appeals from a coalition of red states and coal companies, which stem from the D.C. Circuit's January ruling striking down the Trump-era Affordable Clean Energy rule. At issue is whether EPA can consider beyond-the-fenceline strategies like generation shifting; a "no" answer from the Supreme Court could limit the efficacy of any rulemaking. The combined cases are slated for one hour of arguments, with a ruling expected by the end of term in late June or early July. COURT REVIVES 'SSM SIP CALL' LITIGATION: Litigation has been re-started over a seven-year-old Obama-era rule that bars certain pollution exemptions from state air plans. Challenges led by Florida and other Republican-controlled states had been put on hold during the Trump administration, but the Biden EPA this fall reverted back to Obama policy . At issue is an order from EPA for three dozen states to remove protections in their Clean Air Act plans that exempted or shielded sources from punishment over excess pollution emitted during periods of startup, shutdown or malfunction — known in EPA lingo as the "SSM SIP call," Reg. 2060-AR68. Briefing will stretch into February, with arguments likely in early spring, according to the court's order. | | | — "U.S. Gas Exports Likely More Trickle Than Flood," via The Wall Street Journal. — "Shipping industry needs to pull on every lever to go green," via The Financial Times. — " Is nuclear energy green? France and Germany lead opposing camps," via The Washington Post. — "Europe Braces for Energy Crunch This Week as Deep Freeze Sets in," via Bloomberg. THAT'S ALL FOR ME! | | | | Follow us on Twitter | | | | Follow us | | | | |
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