| | | | | |  | | By Matthew Choi, Catherine Morehouse and Kelsey Tamborrino | With help from Ben Lefebvre, Zack Colman and Annie Snider 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. | | | — Recent natural disasters and a push to renewables are bringing reliability issues to the forefront, with major federal funding on the line with the latest reconciliation drama. — Democrats and climate advocates were frustrated but determined to continue work on reconciliation after Sen. Joe Manchin said he wouldn't back the package. — The latest reconciliation woes are prompting allies to further question the U.S. climate dependability. WELCOME TO TUESDAY. I'm your host, Matthew Choi. We're having some guest co-hosts from the Pro Energy team this week writing their analysis on a few of the big stories of the year and how they relate to where we are now. For today, we have Catherine Morehouse and Kelsey Tamborrino weighing in on the growing spotlight on grid reliability. And now for trivia: Congrats to Daphne Wang of Bloomberg Philanthropies for knowing Hans Zimmer went to boarding school in the U.K. and Switzerland. For today: What is the tallest mountain in North Africa? 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: From the archives: Inside Exxon's lobbying playbook. | | | | | | | WHAT'S AT STAKE FOR THE GRID: The last few years saw grid reliability come to the forefront of national attention, with natural disasters shutting the lights in some of the most populous states. The Texas winter energy crisis and the 2020 heat wave-driven grid failures in California require many "different types of reliability and resource adequacy analysis than we have done in the past," according to Alison Silverstein, a power sector resilience consultant who has worked on reliability issues at the federal and state level. "There's so many more ways things can go wrong today we need to be much sharper and more paranoid about how we conceive of risks and threats and solutions," she said. And as renewables grab an ever-greater share of the power generation market, grid operators and utilities will need to figure out better methods of energy management and storage. And lawmakers are signaling an acknowledgment of that with recent legislation. The reconciliation package — now fluttering in the wind after Sen. Joe Manchin said he would not back the current proposal — offered an avenue for that to happen, with new tax credits for the production of clean hydrogen, investments in electric transmission and a standalone credit for energy storage. That would couple tens of billions of dollars devoted to helping shore up the grid and increase resiliency in the bipartisan infrastructure bill that Biden signed into law in November. Recent analysis from Wood Mackenzie found that an extension of the investment and production tax credits in the climate and social spending package would put the U.S. electric sector on a path to reach 55 percent carbon-free energy by 2030. But the Woodmac analysts said adding energy storage and enhanced transmission and distribution infrastructure as prioritized in Democrats' package would be "critical" to reaching Biden's goal of 80 percent by 2030. Regulators and lawmakers are increasingly homing in on demand-side solutions — for instance reducing energy consumption through energy efficiency, or using on-site resources such as rooftop solar, according to Silverstein. Eventually, longer-term solutions like long-duration storage and green hydrogen could play a role, but until then the focus needs to be using the resources and technologies that are widely available today to create a carbon-free grid at the pace that's needed to mitigate the worst effects of climate change, she said. "We need to make things work immediately," said Silverstein. "We're stuck with the technologies we have at the prices we have and we have to be really clever and really ruthless in how to figure out a better mix — and how to deploy it quickly and effectively." | | | | 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. | | | | | | | | DEMS DENY DEAL IS DEAD: Democrats may be dejected and angry after Manchin's Sunday surprise on the reconciliation package, but they aren't throwing in the towel. Exact plans going forward are still murky, with interest groups and lawmakers picking up the pieces and huddling on what to do next. But as it stands, it seems shattering BBB into several items to go through regular order isn't the game plan, at least not yet, Pro's Josh Siegel and Kelsey Tamborrino report. Manchin said on the radio waves in his home state Monday that he could be on board with a new reconciliation deal that went through committee. It's a path he'd pushed his party to take earlier in negotiations. But that doesn't seem to be in tune with what Senate Majority Leader Chuck Schumer has in mind. In a dear colleague letter Monday, Schumer said he'd put the bill to the floor for a vote, "so that every member of this body has the opportunity to make their position known on the Senate floor, not just on television." Manchin and Biden talked Sunday and appeared set to continue discussing legislative avenues for their priorities, POLITICO's Jonathan Lemire reports . And though Manchin said Sunday that he was nervous a sped-up energy transition would jeopardize reliability, Democrats and advocates say the gap between Manchin and Biden on climate is narrower than on some other policy areas. Read more from Josh and Kelsey here. THE MINERS AREN'T THRILLED: The United Mine Workers of America is feeling a bit let down by its old friend Manchin, whom it has long worked with to secure benefits for its workers. The union urged Manchin on Monday to reconsider his stance on the reconciliation package, citing a number of provisions that would compel coal companies to bear more of the burden in caring for miners as well as bring in manufacturing jobs to former coal communities. It's a big blow to Manchin's defense Sunday where he said he couldn't support legislation that he couldn't explain to his constituents. "We are disappointed that the bill will not pass," UMWA International President Cecil Roberts said in a Monday statement. "We urge Senator Manchin to revisit his opposition to this legislation and work with his colleagues to pass something that will help keep coal miners working, and have a meaningful impact on our members, their families and their communities." BARRASSO'S EARLY SUMMER: Senate Energy ranking member John Barrasso offered his rebuttal to the Interior Department's review of the federal oil and gas lease program in a pointed series of questions for Secretary Deb Haaland sent Monday. In the five-page letter, he questioned the review process and whether there would be a final review of the program or further rulemakings to come out of it, but the crux was his push back on the administration's reluctance to issue new leases for oil and gas on federal lands. "If the Department decides to significantly raise royalty rates and other fees, it will effectively end future oil and gas production on federal land," he wrote. DOI declined to comment to ME. | | | LE DIPLOMATE: The Biden administration hoped the reconciliation package could put legislative teeth behind its global climate rhetoric. But Manchin's recent opposition has a lot of foreign partners sinking deeper into their doubts. European Union officials told ME in an email that the U.S. "has strongly confirmed its commitment to the Paris Agreement and ambitious greenhouse gas emission reductions" and that U.S. Climate Envoy John Kerry and his EU counterpart Executive Vice President Frans Timmermans "are looking forward to continuing their good cooperation to avoid the worst and adapt to the inevitable consequences of climate change." But beyond official channels, the message was received with a mixture of disbelief and dismay. "Quelle catastrophe," responded Laurence Tubiana, the architect of the Paris Climate Agreement who is CEO of the European Climate Foundation. "I could not believe my eyes." Tubiana said she planned to call Kerry to ask "how can you reassure us?" Failing to hit Biden's goal of slashing U.S. emissions 50 percent below 2005 levels this decade would invite serious credibility concerns for the world's No. 2 emitter while playing directly into complaints China made about U.S. trustworthiness during climate talks last month in Glasgow, Scotland. And it's not just Europe. A Japanese government official told ME they are "closely watching how things will develop," adding that the fate of the climate plan "can affect the overall capability of the administration to promote not only its domestic issues but also a wide range of urgent geopolitical and geoeconomic issues." Alden Meyer, a senior associate with think tank E3G, tells ME that failure to pass sweeping climate policy "is what people were afraid of in Glasgow" and they are now wondering: "Does the administration have a plan?" Related: "'It does buy us some time': Death of Biden's bill gives Canada chance to retool," via Pro's Andy Blatchford. | | | | 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. | | | | | | | | NEW RULES IN THE PIPES: The Biden administration revamped carbon dioxide limits for new vehicles in its final tailpipe emission rule released Monday, tightening a version proposed by the administration last summer. The new rule steepens the reduction curve for tailpipe emissions, with automakers facing a 10.3 percent improvement requirement for 2026 — double what had been set for the year in the summer proposal. The model year 2026 fleet will have to average emissions of 161 grams per mile, and EPA tightened compliance requirements after environmentalists said the summer proposal offered loopholes that would go against the administration's emissions goals. The transportation sector accounts for the most greenhouse gas emissions in the country, and Biden is making vehicle electrification a central legislative and regulatory priority. The reconciliation bill included substantial tax credits for electric vehicles, and auto manufacturers say they'll need federal assistance to meet EPA's new standards. Pro's Alex Guillén has more. Related: " New Jersey becomes first East Coast state to adopt clean truck rule," via Pro's Ry Rivard. DOE D'OH: The Department of Energy needs to improve how it chooses which projects to fund with research dollars and stick with its established criteria for administering those dollars, the Government Accountability Office recommends in a new report . DOE spent $684 million on eight carbon capture demonstration projects since 2009 to show the technology could work at scale, according to GAO. But because cheap natural gas made coal generated power unprofitable, only one of the projects was actually built. "As a result, the agency spent nearly $472 million on the definition and design of four unbuilt facilities," the report states. A DOE spokesperson said the department's newly authorized Office of Clean Energy Demonstrations will evaluate the GAO report and recommendations. RATCHETING UP PFAS MONITORING: EPA on Monday unveiled a final rule that requires most drinking water utilities across the country to monitor for 29 PFAS over the next three years. Such monitoring is crucial to the agency's ability to regulate contaminants, since the Safe Drinking Water Act requires that a chemical not just be dangerous to public health, but also prevalent enough in systems for a federal regulation to make a meaningful improvement. EPA has required prior rounds of monitoring for a handful of "forever chemicals," but the new rule requires that utilities look for a broader range of the chemicals and detect them down to lower levels. It comes as the agency's scientists have concluded that at least some PFAS are harmful at far lower levels than previously thought. LET'S DO THIS SYSTEMATICALLY: EPA also released a draft document Monday describing how its chemical safety office will approach the process of sifting through the scientific studies on chemicals it reviews under the Toxic Substances Control Act, after a National Academies of Sciences panel heavily criticized the process used by the Trump administration. Such "systematic review protocols" have, in recent years, become a battleground between the chemicals industry and public health advocates. | | | TRANSMISSION GROUP TOUTS LOCAL PLANNING: Trade group WIRES, which represents U.S. transmission owners and developers, released a report on Monday touting the benefits of local transmission planning in hardening the power grid against severe weather. The report comes as conversations around transmission increasingly focus on the benefits of regional planning to build out the large-scale power lines needed to usher in more renewables onto the grid. WIRES argues in its new report that although regional transmission planning is important in achieving public policy objectives, the process "fails to address additional system needs related to resiliency, interconnecting customers, and replacing aging infrastructure among others that are the primary focus of local planning." At the same time, the report says, local transmission projects "do not affect or usurp the need for regional reliability projects." | | | — "AES Buys Closely-Held Community Energy Solar in Renewables Push," via Bloomberg. — "Gabriel Boric, a Former Student Activist, Is Elected Chile's Youngest President," via The New York Times. — " Poland's emissions trading conundrum," via POLITICO. THAT'S ALL FOR ME! | | | | Follow us on Twitter | | | | Follow us | | | | |
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