Climate confident

Jan 04, 2022

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.

Quick Fix

— Climate advocates and lawmakers are feeling comfortable that their portions of the BBB will survive the chopping block, but there are still unresolved issues lingering from last year.

— Senate Majority Leader Chuck Schumer wants to debate and alter Senate rules on the filibuster, potentially zapping the upper chamber's attention for the next two weeks.

— EPA will be hearing public comment today on its latest RFS proposals, which caused ire in both the agriculture and fossil fuel sectors.

HAPPY TUESDAY! I'm your host, Matthew Choi. I hope you got a chance to enjoy an extra slow start to the week because of Monday's snowstorm that descended on DC. EPRI's Rachel Gantz gets the trivia for knowing "Everlasting Arms" was used in the soundtrack to "True Grit." For today: What is the largest German state by area? Send your tips and trivia answers to mchoi@politico.com. Find me on Twitter @matthewchoi2018.

Listen to today's POLITICO Energy podcast!

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: New year, same BBB fight.

Driving the Day

CLIMATE CHECK: The Senate returns today after the snow day on Monday, and despite the December blow up of the Build Back Better Act, Democrats are still optimistic that significant climate change provisions will make it into a salvaged version of the bill that Sen. Joe Manchin can support. That assessment comes even though there is little indication that any real progress was made on reaching a deal over the holidays.

"My understanding is that the climate piece had been reworked and Manchinized so much already that it wasn't the deal breaker, so obviously I am expecting it to make the cut," Rep. Jared Huffman (D-Calif.), told our Josh Siegel on Monday.

Sen. Brian Schatz (D-Hawaii) seconded that view in a text to Josh, confirming Democrats are confident their portions of BBB are mostly locked in.

Democrats and environmental activists following negotiations say their differences with the West Virginia moderate on climate provisions are narrower than other policy areas of President Joe Biden's Build Back Better agenda, especially as it relates to the giant package of tax credits aimed at speeding the transition to clean energy.

"The plan continues: the Senate must pass the Build Back Better Act this month and act on the climate crisis. And yes, the plan is this bill will address the climate crisis," said Leah Stokes, professor of climate and energy policy at the University of California Santa Barbara, and an adviser to Evergreen Action, an environmental group with close ties to the White House.

Frank Maisano, an energy lobbyist at Bracewell, observed in a note Monday that Manchin has "shown a willingness to move forward with many of the climate provisions in BBB if some other changes are made on the much bigger political issues," such as the child tax credit.

There haven't been substantive breakthroughs, though, over outstanding energy policy areas such as the methane fee, pro-union EV tax credits, and 45Q carbon capture subsidies.

On the Hill

SCHUMER TOYS WITH THE NUCLEAR OPTION: Senate Majority Leader Chuck Schumer is taking aim at the Senate filibuster, promising he will bring the chamber's rule up for debate and a vote on by Jan. 17, Martin Luther King Jr. Day. His primary motivation is Democrats' voting rights legislation, which Republicans vehemently reject, and Schumer hasn't mentioned whether any change in rules to the voting threshold would impact the now-stalled climate and social spending reconciliation bill, Marianne LeVine and Burgess Everett report for Pros.

Democrats denied that they were pivoting away from the reconciliation package to focus on the voting legislation, with Sen. Tammy Baldwin telling Marianne and Burgess that "we met by recess over phone and we're lining up a vote on that."

The filibuster is driving Democrats' reconciliation strategy and prompting the caucus to capture their social and climate priorities in a single bill in order to take advantage of the mechanism. Schumer plans to hold a leadership meeting today after Monday's snow day, Marianne and Burgess report.

Schumer told his caucus just before the holidays that the BBB bill would go to a vote to get everyone's position on the record early in the year. But in his Monday letter, he said he would want to move through any alterations to Senate rules by Jan. 17. That's a pretty tight time frame that could suck away attention from other priorities.

Both Manchin and Sen. Kyrsten Sinema said they have no interest in totally scrapping the 60-vote threshold to break through the filibuster, meaning a complete elimination is likely off the table. Other possibilities include bringing back the talking filibuster, forcing the minority to repeatedly put up 41 votes to block bills or eliminating the ability to filibuster a bill from even being debated on the Senate floor, according to Marianne and Burgess.

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.

RUSH TO EXIT: Rep. Bobby Rush (D-Ill.), chair of the House Energy and Commerce's energy subpanel, is not seeking reelection this year, he told POLITICO's Shia Kapos and Brakkton Booker. Rush plans to focus on his work as a pastor in Chicago's South Side after 30 years in the House. His district is in a comfortably Democratic area, and he denied his decision had anything to do with the predicted Democratic losses in this year's elections.

"I don't believe in Ouija boards, I don't believe in forecasting the future — none of that. I think Democrats are in prime position to retake the house and increase their numbers in the Senate," he said.

As Energy subcommittee chair, Rush introduced legislation that would offer federal assistance for state's energy security plans that was included in the bipartisan infrastructure package, as well as a bill directing FERC to create a new entity to ensure pipeline reliability and cybersecurity. That bill is likely to face the committee some time early this year. Read more on Rush's announcement from Shia and Brakkton here.

Around the Agencies

RFS INPUT DAY: EPA holds its public hearing today on its latest biofuels blending proposals under the Renewable Fuel Standard, and ME expects things to get testy. The proposals would retroactively lower blending targets for 2020 while increasing them for 2022 — which has drawn anger from both the agriculture sector, which was disappointed by the 2020 decrease, and from refiners, who have been decrying the targets as burdensome.

It's been a political tug of war between two vital constituencies for the Biden administration: organized labor and agriculture, and Democratic lawmakers were not afraid to voice their opposition to the EPA proposal unveiled late last year. Advocates from both sides, including organized labor, business leaders and elected officials are planning to testify. The hearing will kick off virtually at 9 a.m. today and cut off by 5 p.m. at the latest. EPA is keeping an additional session Wednesday in its pocket in case there are too many folks chiming in today.

Beyond the Beltway

EUROPE SPLIT ON WHAT'S SUSTAINABLE: The European Commission offered a proposal to treat nuclear and natural gas as sustainable under its energy investments labeling system, leading to stiff pushback and highlighting differences across the continent on transitioning to cleaner energy. A growing sentiment in Europe's capitals views renewable generation as not yet ready to carry the continent's ever-expanding electricity needs, pushing nuclear and natural gas to be increasingly viewed as necessary transition sources. French President Emmanuel Macron announced last year that the country would build more nuclear power, which is already its leading energy source.

But in Germany, Chancellor Olaf Scholz' spokesperson soundly rejected the inclusion of nuclear as a sustainable source following outcry from members of his country's green party and high-profile green ministers. Scholz' government cited waste as a driving concern for nuclear. But Germany is getting skepticism from the French over its ability to pull off its targeted emissions reductions without nuclear power — especially after Germany had to admit last week that it will likely miss its climate targets in 2022 and 2023. And Germany is still heavily reliant on natural gas, with the Scholz government deeming it a necessary "bridging technology." Hans von der Burchard has more from POLITICO Europe.

AT THE OPEC MEETING: OPEC+ is likely going to stay the course on its output increase plans going into February, Reuters reports. The cartel is meeting to discuss the plans today, according to Reuters, after seeing only slight impacts on global demand from the Omicron Covid variant.

The cartel also announced Haitham al-Gais of Kuwait will become its new secretary general during its meeting Monday. Al-Gais will replace Nigeria's Mohammad Barkindo, who has been in the role since 2016. Al-Gais predicted oil demand would return to pre-pandemic levels by the end of the year and heralded the OPEC+ pact (which includes the cartel plus allies led by Russia) as key to ensuring global oil market stability. Read more from Reuters.

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.