Phillips' FERC trifecta

Mar 15, 2022

With help from Alex Daugherty

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QUICK FIX

— FERC Commissioner Willie Phillips insists his commitment to reliability, affordability and sustainability are all sound as the commission works to incorporate more climate and environmental justice considerations into its gas approvals.

— Sarah Bloom Raskin's nomination to the Fed is all but tanked after Sen. Joe Manchin announced he won't support her, citing her energy and climate stances.

— House Democrats are renewing the call for a climate-focused package, though the administration is largely preoccupied with securing fossil fuel resources amid a ban on Russian imports.

WELCOME TO TUESDAY! I'm your host, Matthew Choi. NRDC's Jake Thompson gets the trivia for knowing Nepali Tenzing Norgay and New Zealander Edmund Hillary were the first to summit Mt. Everest. For today's trivia: "There Will Be Blood" was inspired by a novel by what author? 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 politics behind Ukraine's alarming nuclear warnings.

Driving The Day

PHILLIPS' VISION: Willie Phillips, the newest FERC commissioner, caught up with POLITICO's Catherine Morehouse on the sidelines of CERAWeek, where they discussed the hottest topics facing the commission, including its controversial policy statement on climate and environmental justice considerations in pipeline project approvals. Phillips has weathered criticism for his support for the policy statement from Republican senators who questioned if the statement was inconsistent with his previous commitment toward ensuring reliability and affordability.

Phillips assured Catherine that he still keeps reliability as a top priority, in addition to affordability and sustainability, "and seeking to balance all three. That is what I've done since I've come to FERC. And what I'll continue to do."

The Democratic commissioners got a nudge in the direction of their policy statement from EPA late last week when it urged FERC to consider the potential downstream and upstream emissions of the pending CP2 LNG and CP Express Project. The agency particularly stressed FERC to take into account how the liquefied natural gas and pipeline project would play into the Biden administration's as well as state and regional greenhouse gas reduction goals.

Phillips, former head of the D.C. Public Service Commission, said he hopes to continue finding common ground across the commission, especially as it tackles transmission rulemaking and fields feedback from the gas industry on current pipeline policy.

"I've really tried to just make myself available to as many folks as I can, being the new kid on the block," Phillips said. "I think it's important that people know that we're taking this work very, very seriously."

Read more from their conversation here.

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.

On the Hill

MANCHIN AND COLLINS REJECT RASKIN: Sarah Bloom Raskin faces near impossible odds in her confirmation quest for the Federal Reserve's top job overseeing banks after Senate Energy Chair Joe Manchin announced Monday he wouldn't support her candidacy. That means she now needs to get at least one Republican on her side, assuming there are no other Democratic defections, and don't expect it to be Sen. Susan Collins (R-Maine). The moderate, who has not shied away from approving Biden nominees in the past, told POLITICO's Burgess Everett that she agrees with Manchin.

Raskin's nomination is currently held up in the Senate Banking Committee, where Republicans are boycotting voting to advance her to the floor. She has advocated for greater attention to the financial risks of climate change and the burning of planet-warming fossil fuels, prompting energy-focused Republicans to cite her as proof that the Biden administration is hostile to domestic fossil fuels.

Manchin cited similar concerns in his Monday announcement that he would not support Raskin, writing she "failed to satisfactorily address my concerns about the critical importance of financing an all-of-the-above energy policy to meet our nation's critical energy needs." POLITICO's Victoria Guida and Burgess Everett have more.

BUILD BACK WITH CLIMATE: As the administration is putting a lot of its attention toward ramping up fossil fuel production to deal with the current geopolitical crisis and its impact on energy prices, a cohort of 89 House Democrats is urging President Joe Biden to revive his Build Back Better agenda, kicking it off with the over $500 billion in climate investments.

"During your State of the Union address, you called for decisive action on clean energy and climate change. We were encouraged to hear you discuss how families will save an average of $500 per year on their energy costs through investments and tax credits. With your support, urging Congressional leaders to move forward with these climate provisions would mark the largest climate investment in our nation's history," the lawmakers wrote in a Monday letter to Biden.

Signatories included six committee chairs and 12 appropriators. POLITICO's Anthony Adragna has more on the letter.

Manchin, who axed the BBB deal late last year, has said energy could be a starting point for renewed negotiations, though he insists any bill must include incentives for new nuclear and geothermal.

THE CANADIAN CRUDE LINK: Republican senators are urging Canadian Prime Minister Justin Trudeau to resolve a rail worker strike that could jeopardize a key rail link with the United States — and stall much needed Canadian crude with it, POLITICO's Meredith Lee reports. Sens. Kevin Cramer (R-N.D.), Steve Daines (R-Mont.), Mike Braun (R-Ind.) and John Hoeven (R-N.D.) write that "shutting down North America's essential rail supply chain would create a freight capacity crisis" in a letter to Trudeau today. Canada has been sending about 140,000 barrels of oil each day by rail to the U.S.

"Without the ability to move heavy Canadian crude, fuel supply shortages will be exacerbated and agricultural producers who rely on diesel to power their equipment will be forced to pay even higher fuel costs," the lawmakers write. Read more from Meredith here.

CALL THE OIG: Five House Democrats, including House Oversight Chair Carolyn Maloney (D-N.Y.) and Government Operations Subcommittee Chair Gerry Connolly (D-Va.), called for the Postal Service's Office of Inspector General to investigate the USPS' decision to purchase up to 165,000 gas-powered delivery trucks over the objections of the White House and EPA.

"The Environmental Protection Agency, the White House Council for Environmental Quality and numerous environmental stakeholders have raised concerns that the Postal Service did not meet its [National Environmental Policy Act] obligations during its contracting process for the" next generation delivery vehicle, the lawmakers wrote in a letter to USPS OIG Tammy Whitcomb. "These significant concerns warrant an investigation by the OIG."

The letter comes days after the Senate overwhelmingly passed a bill, H.R.3076 , that shores up USPS' finances and ensures delivery six days a week. In recent months, Democrats largely held off on attacking Postmaster General Louis DeJoy, who was appointed by President Donald Trump, as they focused on getting a long overdue postal funding bill that DeJoy supported over the line. DeJoy was the target of Democratic attacks that he purposely slowed the delivery of mail in 2020 and 2021, but Biden doesn't have the power to remove him. While DeJoy supported the bill, its passage could mean that Democrats begin attacking him again on the electric vehicle issue.

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.

Beyond the Beltway

VENEZUELA ON THE HORIZON: Chevron is positioning itself to rev back up its Venezuela operation if the Biden administration lifts sanctions on the country to replace Russian crude, Reuters scooped Monday. Chevron is preparing employees to get visas for Venezuela in Aruba, sending them off to Caracas as soon as the administration eases restrictions.

The Biden administration met with the Maduro regime recently for talks that the White House stressed covered a range of issues, including the wellbeing and release of U.S. citizens held in Venezuela. But energy was included on the agenda, and the administration is eager to find replacements for Russian energy imports, which ramped up to replace sanctioned Venezuelan heavy crude for Gulf refiners in the first place. The South American country has about 300 billion barrels in proven reserves, though its infrastructure suffers from neglect.

Turning to Venezuela isn't going to go over easily politically. The U.S. expat Venezuelan community, many of whom fled human rights abuses and social collapse under the Maduro government, has been vocal in opposing any deals that legitimizes the current regime. Florida Republicans in particular have called out the Biden administration, denouncing any deal that would financially benefit the regime.

IEA'S PRICE SPIKE WARNING: International Energy Agency Executive Director Fatih Birol warned that the worst of the increase in energy prices over the war in Ukraine may not be behind us, and that there is a fast closing window to address it before the summer's spike in demand arrives.

Speaking with The Washington Post's Heather Long on Monday, Birol offered short-term solutions in boosting oil output from the U.S., Canada, Brazil and "hopefully" OPEC; further releasing from countries' national crude reserves; and cutting overall oil demand by curbing heating and driving. The agency plans to release a 10-step action plan for demand reduction Friday ahead of the summer driving season.

Birol also acknowledged some oil companies are making "substantially high revenues," adding that "it is only fair to ask the companies to have some sacrifices here." The European Union recently proposed windfall taxes on energy firms in order to protect consumers, and Sen. Sheldon Whitehouse (D-R.I.) and Rep. Ro Khanna (D-Calif.) introduced legislation for a similar tax last week.

ENERGY EYE ON CHINA: New Covid lockdowns in Northeastern China that could lead to a sharp drop in demand are contributing to pressure on oil prices, Reuters reports. U.S. crude futures dropped over $6 Monday morning to just over $100 a barrel — the lowest crude price seen in almost two weeks — before settling at $103.01 in the afternoon.

Russia reportedly asked China for economic assistance after its invasion, though China hasn't acknowledged the request or indicated how it would respond. National Security Adviser Jake Sullivan met with Chinese Politburo member Yang Jiechi on Monday in Rome, where Sullivan "raised a range of issues in U.S.-China relations, with substantial discussion of Russia's war against Ukraine." The White House readout of the meeting didn't give many details, but Sullivan said Sunday on CNN that the administration is keeping an open line with China, stressing consequences of any efforts to evade Russian sanctions.

Related: "Russia may do Biden a favor by killing the Iran deal," via POLITICO's Nahal Toosi.

The Grid

— "How High Oil Prices Threaten a California Plastic Container Business," via The New York Times.

— "Money Flows to Green-Energy Funds Amid Vows to Cut Russian Fuels," via Bloomberg.

— " Solar Energy Has a Dust Problem. This Could Solve It," via The Daily Beast.

— "Gravity could solve renewable energy's biggest problem," via CNN.

THAT'S ALL FOR ME!

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