| | | | |  | | By Zack Colman | With help from Kelsey Tamborrino, Josh Siegel and Alex Guillen 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.
| | | — President Joe Biden marked his first State of the Union with a modest mention of climate change despite campaigning heavily on the issue and with most of his energy agenda stalled in Congress. — Democrats, already worried about the inflation blame game, are split on whether to block Russian imports. But they got help from the U.S. joining allies to tap strategic reserves to tame rising fuel prices. — Fears of a Russian cyberattack are raising worries about U.S. natural gas pipelines, which are under greater scrutiny because of lax cybersecurity standards that put the U.S. power system at risk. WELCOME TO WEDNESDAY! I'm your substitute host, Zack Colman. Congratulazioni to the American Chemistry Council's Andrew Fasoli for knowing Mt. Etna is Italy's tallest mountain. For today: It's a step down from Matthew's elevated brain teasers, but here we go – who was the umpire who blew the call that cost Detroit Tigers pitcher Armando Galarraga a perfect game on June 2, 2010? Send your tips and trivia answers to me at zcolman@politico.com. 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: Why gas pipelines are a cyber risk for the U.S. power supply.
| | | | SOTU FOR YOU: Biden has offered himself as the president who could reassert U.S. leadership on climate change, but he devoted little attention to the topic in his first State of the Union address. Facing rising inflation that has saddled his administration and Democrats in Congress, Biden instead focused on kitchen table economic concerns while seeking unity in criticizing Russia's invasion of Ukraine. There's a lot of ground to cover in a State of the Union address. But Biden's climate mentions amounted to little more than a rehash of his campaign platform and the goodies baked into the stalled Build Back Better bill, which contains $555 billion of clean energy and manufacturing incentives. He stopped short of calling on Democrats, who contend they agree on the climate contents, to pursue a standalone climate measure like some had speculated he would. Achieving Biden's goal of slashing U.S. greenhouse gas emissions 50 to 52 percent below 2005 levels this decade without such incentives would be difficult, if not unrealistic. He largely framed the bill's climate provisions as a win for consumers, referencing an analysis by climate research firm Rhodium Group that the measures would cut energy costs for families by $500 per year. "Let's provide an investment tax credits to weatherize your home and your business to be energy efficient, and get a tax credit for it. Double Americans' clean energy production and solar wind and so much more," he said. "Lower the price of electric vehicles, saving another $80 a month that you're not going to have to pay at the pump." Elsewhere, Biden championed the bipartisan infrastructure law he signed last year as a boon for combating climate change. The package contained billions for deployment for clean energy projects and to harden communities against the effects of climate change, such as rising seas and floods. "We'll do it all to withstand the devastating effects of the climate crisis and promote environmental justice," he said.
| | | | SUBSCRIBE TO NATIONAL SECURITY DAILY : Keep up with the latest critical developments from Ukraine and across Europe in our daily newsletter, National Security Daily. The Russian invasion of Ukraine could disrupt the established world order and result in a refugee crisis, increased cyberattacks, rising energy costs and additional disruption to global supply chains. Go inside the top national security and foreign-policymaking shops for insight on the global threats faced by the U.S. and its allies and what actions world leaders are taking to address them. Subscribe today. | | | | | | | | BARRELED: The U.S. announced it would dip into its Strategic Petroleum Reserve for 30 million barrels, joining 30 other countries tapping their reserves to smooth supply disruptions that Russia's invasion of Ukraine is exacerbating, Ben Lefebvre reports for Pros. All told, the International Energy Agency member states joining the effort will put 60 million barrels into the market. White House Press Secretary Jen Psaki called the decision "another example of partners around the world condemning Russia's unprovoked and unjustified invasion of Ukraine." In his State of the Union address, Biden said it would "help blunt gas prices here at home." The SPR move comes as U.S. crude oil prices hit their highest level since June 2014, spiking 10 percent Tuesday to hit $106 per barrel. Republicans have hammered Democrats and Biden for inflation, of which escalating gasoline prices are a visible reminder for many Americans – though analysts contend more expensive fuel is largely a global, pandemic-related issue and predates the Ukrainian conflict. Psaki said the SPR decision reflects that "Biden was clear from the beginning that all tools are on the table to protect American businesses and consumers, including from rising prices at the pump." Republicans also have increasingly pressured the Biden administration to block imports of Russian oil to strain Russian President Vladimir Putin — yet Democrats are divided on the idea, POLITICO's Josh Siegel reports. Sen. Ed Markey (D-Mass.) and Sen. Joe Manchin (D-W.Va.), perhaps the party's opposing poles on climate issues, both called for halting Russian crude imports — with Markey going so far as to introduce legislation. "There is no separating Russian oil from the corruption and human rights abuses of the Putin regime. We cannot criticize Europe for its reliance on Russian energy, as we pour dirty oil money into Russia," the Massachusetts Democrat said in a statement. Yet skeptics of the option argue Russia could simply sell the oil elsewhere. They also note that Moscow represents a relatively small amount of total U.S. energy imports. And they worry that cutting off any source of supply could further worsen the energy inflation that has become a major political vulnerability for Democrats. "It's not just about changing the source of the oil, because really in these markets there's so much fungibility, so that doesn't really get at the problem," Sen. Brian Schatz (D-Hawaii) told Josh. Schatz did make a distinction between short term tactics and longer term strategies, saying that cutting imports of Russian oil would be "great" if it's "achievable" but that the "strategic imperative is for us to not need the stuff [fossil fuels] anyway." And Rep. Sean Casten (D-Ill.) says stopping the purchase of Russian oil misses the point of Democrats' larger agenda to reduce dependence on fossil fuels altogether by investing more in clean energy. "I would love to see us get off Russian oil, but I also think there is a tendency to get into oversimplification here," Casten told Josh. "The sound bite is great. The nuance is more sophisticated. The reality is the way to stop buying Russian oil is to massively increase the efficiency of the U.S. economy. Then we can not only stop buying Russian oil, but stop buying oil from a whole lot of other people." SPEAKING OF OVERSIMPLIFICATIONS: Republicans on Capitol Hill have blamed Democratic policies that favor clean energy for, essentially, causing the Russia invasion, Ben and yours truly report. The attacks are a Frankenstein of conservative talking points repackaged for the current crisis, with inflation-baiting for garnish. The claims run the gamut: That Biden and Democrats have shut off U.S. oil and gas, boosting global oil prices to finance Putin's war; that the Keystone XL pipeline would stifle conflict; and that Biden forfeited U.S. energy independence. The problem is those charges are factually untrue. The Biden administration has approved oil and gas permits on federal land at a faster clip than former President Donald Trump's final year, the U.S. still exports more crude oil and petroleum products than it imports and Keystone XL never started while much of the oil it would have transported got to market through rail and other means. Plus, the U.S. has never been closed off from oil imports, even bringing in 7.9 million barrels per day in the first year of the coronavirus pandemic when demand cratered. EXXON EXITS RUSSIA: Exxon Mobil, one of the largest foreign investors in Russia, is winding down operations at a large liquefied natural gas facility in eastern Russia and will cease new investments in the country as a result of Putin's war. Exxon will start a "carefully managed" exit from the the Sakhalin-1 LNG project that also includes Russian oil company Rosneft as a major stakeholder, the company said in a press release. Sakhalin-1 has an export capacity of 6.2 million tons a year, and was one of the largest foreign direct investments in the country. Read Ben's story for more.
| | | WANNA CYBER ATTACK? With all the worry about Russian cyber attacks, one significant part of U.S. critical infrastructure is a sitting duck: Natural gas pipelines. Catherine Morehouse reports that federal regulators for years have warned about lax cybersecurity standards governing pipelines that transport natural gas supplying 40 percent of the nation's power. Despite awareness of the problem, regulators, lawmakers and industry remain at a standstill. The Russian invasion of Ukraine has only exacerbated fears of a cyberattack on critical energy infrastructure. Energy Secretary Jennifer Granholm urged energy executives last week to prepare "to the highest possible level" for a potential cyberattack from Russia. But the laxer standards governing the gas sector make pipelines more of a target, critics of the existing regulations say. "There's a definite vulnerability there: I don't have to take out the power plant if I want to disrupt the operations of that plant through the gas infrastructure,"Tobias Whitney, a former official with the North American Electric Reliability Corp. who is now vice president of strategy and policy at the cybersecurity firm Fortress, tells Catherine. The May 2021 attack on Colonial Pipeline — thought to be the largest successful cyberattack on oil infrastructure in U.S. history — led the Department of Homeland Security's Transportation Security Administration to issue the first mandatory cybersecurity standards for pipelines, after years of relying solely on voluntary guidelines. But Democratic lawmakers, regulators and cybersecurity experts say those standards don't go nearly far enough, and fall short of the binding standards that the U.S. electricity sector has spent years developing. EPA, YOU CAN'T TAKE THE WHEEL: Two coalitions of biofuels groups and a refinery industry association sued the EPA over its tailpipe emissions standards, emulating arguments power plants wielded in a case currently before the Supreme Court. The petitioners claimed EPA's rule to strengthen tailpipe standards amounts to forcing a shift in the vehicles market from liquid fuels to electric, which they claimed exceeded the agency's authority to simply regulate greenhouse gases. If that sounds familiar, it's because that's basically the argument power plants used to push back against EPA's electricity sector regulations — and that the conservative Supreme Court seemed keen to entertain. Alex Guillen has more for Pros. DOE OFFICIAL TALKS RELIANCE ON RUSSIA: A top Energy Department official told senators Tuesday that the invasion of Ukraine has made discussions "even more urgent" over U.S. reliance on Russia to fuel its nuclear reactors. Ranking member Sen. John Barrasso (R-Wyo.) questioned Geraldine Richmond, the undersecretary for science and innovation, during a Senate Energy and Natural Resources hearing Tuesday on U.S. reliance on imports of uranium to fuel its nuclear reactors — including from Russia and its allies — and pointed to $75 million provided by Congress to DOE in 2020 to establish a strategic uranium reserve, but which he said has yet to purchase any uranium from U.S. producers. "At this point, what we — folks in NNSA, as well as in the nuclear energy area — are looking for other sources in which we can partner also with our allies in this area, and also different ways that we can [have] different sources of uranium so we're not dependent on Russia," Richmond responded. Barrasso also asked whether the department was willing to produce the high-assay low-enriched uranium required by advanced nuclear reactors, which is also sourced by Russia. Richmond responded that "life is changing quickly," but said the department recognizes the fuel's crucial role in running most U.S. reactors. She added that until recently the prevailing assumption was that initial Advanced Reactor Demonstration Program projects would be supplied by Russia and that DOE is now exploring "feasible options" to address the issue. But, Richmond said, any solution will require a "substantial and sustained" source of government funding in the order of provisions included in the House-passed Build Back Better bill that remains stalled in the Senate. BUTTIGIEG TALKS INFRASTRUCTURE ON THE HILL: Transportation Secretary Pete Buttigieg will face the Senate Environment and Public Works Committee, where he will answer questions about how the department is handling the hundreds of billions of dollars Congress gave it through last year's $1 trillion infrastructure law. REGAN TALKS TRASH IN SOUTH CAROLINA: Speaking of implementing the infrastructure law, EPA Administrator Michael Regan will meet with utility officials and local leaders in Easley, S.C., to tour construction of new sewer lines, where the EPA said he will "discuss how local, state, and federal partners can work together to deliver benefits to underserved and overburdened residents and build a better America." GRANHOLM HITS THE BLUEGRASS STATE: Energy Secretary Jennifer Granholm and Kentucky Gov. Andy Beshear will visit Schneider Electric's Lexington, Ky., facility that uses new energy efficiency technology. The Boston-based firm said those improvements helped slash the plant's energy use 26 percent and carbon emissions 78 percent. Granholm will then tour a solar farm operated by East Kentucky Power Cooperative.
| | | ADMIN APPEALS SCC INJUNCTION: The Biden administration on Tuesday asked the New Orleans-based U.S. Court of Appeals for the 5th Circuit to stay a district judge's injunction against the social cost of carbon. That nationwide block, the administration has said, is wreaking havoc on executive branch functions. The Justice Department had asked the Louisiana judge to stay his own injunction by Monday — and when no word came, took their request to the higher court . "Not only is the injunction overbroad—going well beyond appropriate [Administrative Procedure Act] relief—but its specific substantive provisions are illogical, unreasonable, and unlawful," DOJ wrote. The filing asks for a decision by March 15. The 5th Circuit isn't known to be particularly friendly to Biden's agenda, but there are a few factors that might benefit the White House here. To start, the social cost of carbon has been used for over a decade, and presidents have issued orders defining how rules are analyzed since Richard Nixon. In addition, legal observers have pointed to some unusual aspects of the Louisiana judge's order, including a novel use of the "major questions" doctrine and citation of a (non-existent) "separation of powers clause."
| | | | 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. | | | | | | | | – Erika Symmonds joined the Solar Energy Industries Association as its vice president of equity and workforce development. She previously served as vice president of workforce development and service-learning at Oakland, Calif.-based nonprofit Grid Alternatives.
| | | — "After 139 Years of Coal Mining, Peabody Expands into Solar," via Bloomberg. — "Climate stories don't have to be depressing to be effective," via Anthropocene Magazine. — " These Climate Scientists Are Fed Up and Ready to Go on Strike," via The New York Times. — "How a wrinkle in the oil futures market has clogged America's oil pump," via NPR. THAT'S ALL FOR ME! | | | | Follow us on Twitter | | | | Follow us | | | | |
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