| | | | |  | | By Matthew Choi | With help from Alex Guillén, Catherine Morehouse and Kelsey Tamborrino 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's pick for the Fed's top bank cop pulled out of the running, but the push for greater climate considerations in financial regulations isn't losing steam. — House and Senate committees will take on water infrastructure today as they consider updating legislation to finance new projects. — Sen. Joe Manchin does not want Venezuelan or Iranian oil to replace Russian energy imports, saying there's plenty of capacity at home to supply the world. HAPPY WEDNESDAY! I'm your host, Matthew Choi. Congrats to ACC's Andrew Fasoli for knowing " There Will Be Blood" was inspired by "Oil!" by Upton Sinclair. For today's trivia: What is the poison used in the battle of wits in "The Princess Bride"? 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: Willie Phillips discusses FERC's pressure points.
| | | | POST-RASKIN: Republicans succeeded in their campaign to sink the nomination of Sarah Bloom Raskin as a top bank regulator at the Fed. But it's just one battle in their fight against financial regulators' growing attention toward climate change, POLITICO's Zack Colman and Ben Lefebvre report. Raskin bowed out of the running Tuesday, citing the heated push from fossil fuel interests and conservative interest groups against her nomination. Sen. Joe Manchin put the final nail in the coffin this week when he said he would not back her, saying she didn't adequately prove she'd support all sources of energy. "Their point of contention was my frank public discussion of climate change and the economic costs associated with it," she wrote in a letter to Biden obtained by POLITICO. "It was – and is – my considered view that the perils of climate change must be added to the list of serious risks that the Federal Reserve considers as it works to ensure the stability and resiliency of our economy and financial system." The administration is on board with that assessment, with the SEC proposing a draft rule Monday requiring publicly listed companies to disclose their financial risks from climate change. Raskin also enjoyed wide support within the banking industry, and Fed Chair Jerome Powell, a Trump appointee, has also spoken about the impacts of climate change on the nation's financial industry. But Republicans have been decrying the SEC proposal as micromanaging industry when the country should be focusing on boosting its oil and gas production over the war in Ukraine. The party is still workshopping its messaging as it pushes back against growing public support for considering climate risks in financial regulations. Read more on Raskin's withdrawal from the running and the continued GOP fight against climate financial regulations from Zack and Ben.
| | | WATER ON THE HILL: The Senate Environment and Public Works Committee will tackle the Clean Water State Revolving Fund today, particularly ways to update its allocation formula to accommodate for climate change, population shifts and aging infrastructure. Lawmakers will hear from interest groups, utilities and researchers on ways to update the program. Tom Sigmund, representing the National Association of Clean Water Agencies, plans to urge the committee to not reduce any funding under the program and encourage EPA and states to survey clean water needs to update the program's allocation formula. The bipartisan infrastructure package authorizes $5 million for an EPA survey and update, and the recently passed funding package for fiscal 2022 appropriates $1.5 million for an EPA survey. The infrastructure package reauthorized and increased funding for the Clean Water SRF for the first time in nearly 35 years. Across the Rotunda, the House Transportation Water and Environment Subcommittee has a hearing on the Water Resources Development Act, which is up for renewal. The panel is inviting their fellow members to testify about priorities for the updated bill. It's the second of three hearings the panel has scheduled on the package. A LEFT TURN TO BAN DRILLING: House progressives are planning to request Biden use emergency measures to ban future fossil fuel drilling on federal lands and deploy the Defense Production Act to ramp up clean energy generation, POLITICO's Josh Siegel reports. The call will also touch on other progressive priorities like immigration, voting rights and student loan relief. Though the agenda is in line with the caucus' push for the Build Back Better package, CPC Chair Pramila Jayapal stressed that the caucus isn't abandoning the legislative effort. Though the administration has pushed hard for BBB's $500 billion in clean energy and climate investments, it is also calling for increased near term domestic oil and gas production following its ban on Russian fossil energy imports. Manchin suggested last week using the Defense Production Act to increase domestic oil and gas production.
| | | | 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. | | | | | | | | MANCHIN SAYS NO TO VENEZUELA AND IRAN: Manchin has no interest in lifting sanctions to allow Iranian and Venezuelan oil imports to replace the loss of Russian energy, telling CNN's Wolf Blitzer there are plenty of energy resources at home. "We have enough energy here to keep ourselves independent and be able to back fill our allies who need it around the world," Manchin said Tuesday. He added the two countries have considerably less stringent environmental regulations on their oil and gas production. But replacing the 672,000 barrels per day of Russian imports in the U.S. with domestic energy isn't something that can be done overnight. Investors still aren't gung ho on pouring capital into new drilling. Despite pleas from the Biden administration to increase short term output to help cool current prices, the industry questions the long-term commitment of the administration toward oil and gas when it has offered so much messaging about transitioning to clean energy. Still, getting Iranian and Venezuelan oil in U.S. ports isn't an overnight solution either, with the ever shifting sands of diplomacy making it "challenging to pin down" where markets will go, OPEC wrote in its monthly oil market report. The cartel is tentatively keeping its oil demand growth projection at 4.2 million barrels per day but warned investors to stay flexible. Russian Foreign Minister Sergey Lavrov indicated that a revived Iranian deal could be on the horizon, Reuters reports , potentially freeing up the country's crude. Iran was exporting 2.5 million barrels per day of crude and condensate before the Trump administration reimposed sanctions on the regime (Russia was exporting 5 million bpd last December). Lavrov's latest comments gave some solace, though Moscow's stringent demands over the nuclear deal still threaten to thwart negotiations. The European Union is trying to keep markets from going too bonkers as it unveiled new energy-focused sanctions Tuesday, which exempted imports of Russian oil, coal and gas, as well as nuclear products and technology, POLITICO's Karl Mathiesen reported. The new sanctions will bar European companies from projects that expand Russian exploration or production of fossil fuels and from transactions with 12 state-owned enterprises including Rosneft, Gazprom Neft and Transneft. President Joe Biden is traveling to Brussels on March 24 for a NATO summit on the crisis, as well as to meet with the European Council. ICYMI: POLITICO's Josh Siegel and E&E News' Sara Schonhardt and Jeremy Dillon had a discussion on the impacts of the war on global energy, which you can read about here.
| | | E15 ALLOWANCE? The Biden administration is considering allowing the sale of gasoline with higher blends of ethanol this summer as a way to curb soaring prices, White House press secretary Jen Psaki said. A bipartisan group of corn-state senators asked the administration to take the action last week to offer relief at the pump, and Psaki said Biden is "working overtime right now to evaluate and examine a range of domestic options that continue to be on the table." But states are not waiting for the White House to take action, with a growing bipartisan group of governors eyeing local gas tax holidays, Marie French and Colby Bermel report. The national average gas price was $4.316 on Tuesday after reaching an all-time high $4.331 last week. Kelsey Tamborrino has more for Pros. CLEARER PATH FOR WYOMING PIPELINE: FERC staff wrapped up its final environmental impact statement for the Clear Creek Expansion Project on Tuesday — a proposal that would add compressor stations and several miles of pipeline to an existing compound in Wyoming. The project is of significant interest to Senate Energy Committee ranking member John Barrasso, (R-Wyo.), who used the delay of the EIS as ammunition last month to berate FERC for not approving projects fast enough. He had also requested the commission not apply its updated gas policy statement to the project. Staff found the project would not create significant environmental impacts if its recommended mitigation strategies are followed, including biweekly reports to FERC during construction and restoration. The project does not meet the greenhouse gas emission threshold set by the commission's policy statement that would require consideration of climate and environmental justice factors, staff found. TAKE A BREATH FERC: FERC is starting to get its first formal requests to change course from the controversial policy statement. Kinder Morgan and Boardwalk Pipelines requested the commission not to apply the mission statement on projects that are already pending because they say doing so "violates basic tenets of fairness and due process — especially since the Interim Policy Statements are moving targets that almost certainly will change." Catherine Morehouse has more for Pros. RENEWABLES CHALLENGE NEW ENGLAND GAS RULES: The renewables energy industry on Tuesday filed a complaint with FERC, alleging that the New England grid operator's market rules unfairly favor gas generators during winter peak conditions. Such policies disadvantage renewables and create higher costs for customers, according to the complaint filed by trade group American Clean Power and renewable energy nonprofit RENEW Northeast. HFC CRACKDOWN: Since EPA's hydrofluorocarbon program took effect on Jan. 1, Customs and Border Patrol has caught and re-exported illegal HFC shipments equivalent to 530,000 metric tons of carbon dioxide, EPA announced on Tuesday. The Biden administration paired the congressionally mandated HFC phase-down with an import enforcement task force after studying illegal HFC trade in Europe. "Our task force is already sending the clear message to potential violators that we are fortifying our borders against illegal imports. It's simple — no allowances, no entry," said Joe Goffman, a top appointee in EPA's air office. SHAH OUT: Tarak Shah is leaving his post as the Department of Energy chief of staff next month. Read his farewell email to staff here.
| | | | 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. | | | | | | | | FOR THE RECORD: Biofuels trade group Growth Energy is calling on Energy Secretary Jennifer Granholm to "correct the record" on a recent peer-reviewed study from the University of Wisconsin-Madison that said the carbon intensity of corn-based ethanol is likely at least 24 percent higher than gasoline. Proponents of ethanol have pushed back against the study, but critics of the Renewable Fuel Standard program have pointed to it as evidence that ethanol has worsened the climate crisis. In its letter to Granholm, Growth Energy said the study contains "significant and misleading errors" in its assumptions and conclusions. Specifically, the group called on the department to make clear whether the research is inconsistent with and subordinate to DOE's own model that has shown corn ethanol has lower carbon emissions than traditional gasoline. Growth Energy also called on DOE to clarify whether it funded the study and to evaluate if the work violated a $115 million award provided by DOE to run from 2017-2022. DOE did not respond to a request for comment on the letter.
| | | CHECKING IN ON BIG OIL'S CLIMATE SUITS: Exxon Mobil will appeal to the Supreme Court a February ruling from the 10th Circuit sending a climate lawsuit brought by Colorado localities back to state court, attorney Kannon Shanmugam confirmed on Tuesday. That will make it the first such case over the jurisdiction of climate cases to go back to the high court. It might take a while to play out, however, particularly if the justices ask the Biden administration to weigh in. MEANWHILE IN MINNESOTA: A trio of judges appointed by former President Donald Trump to the 8th Circuit expressed skepticism on Tuesday over Minnesota's arguments that its climate tort lawsuit belongs in state court rather than federal court, Alex Guillén reports . A ruling against the state would clash with the Colorado ruling — a "circuit split," aka Supreme Court catnip. AND IN NEW YORK AND MASSACHUSETTS The 2nd Circuit on Tuesday dismissed Exxon Mobil's lawsuit seeking to stop the states' investigations into alleged deceptive speech practices. The New York part of the case was mooted when the state lost its enforcement action in court, while Exxon cannot pursue a federal case against Massachusetts because it already tried and failed several years ago in state courts, the 2nd Circuit ruled.
| | | — "White House again delays plan for new China tariffs," via POLITICO. — "Coal Mining Emits More Super-Polluting Methane Than Venting and Flaring From Gas and Oil Wells, a New Study Finds," via Inside Climate News. — "Saudi Arabia Considers Accepting Yuan Instead of Dollars for Chinese Oil Sales," via The Wall Street Journal. — "Ecolab will add 8% to 12% surcharges to offset rising energy costs," via The Minneapolis Star Tribune. — " Consumers Energy threatens to drop coal retirement plans based on proposed Michigan PSC decision," via Utility Dive. — "Zelenskyy expected to tell Congress to 'wake up before it's too late'," via POLITICO. THAT'S ALL FOR ME! | | | | Follow us on Twitter | | | | Follow us | | | | |
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