G-7 tackles energy security

Jun 24, 2022

Presented by Earthjustice & Evergreen Action

With help from Josh Siegel, Kelsey Tamborrino and Jordan Wolman.

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QUICK FIX

— Energy security will dominate this weekend's G-7 summit, where world leaders will discuss ways to gut Russia's energy cash cow without ruining global markets.

— The imprisonment of a Vietnamese climate activist tests the balance between a clean energy transition and human rights.

— The House Climate Crisis tackles methane today, focusing on the health, economic and climate benefits of curbing emissions.

HAPPY FRIDAY! I'm your host, Matthew Choi. Congrats to Christopher Guith of the U.S. Chamber of Commerce for knowing Denmark, the Faroe Islands and Greenland are the constituent countries of the Kingdom of Denmark. For today's trivia: How old was Charlotte Lucas when she got engaged to Mr. Collins? 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: Why the U.N. climate chief is worried about the 2024 U.S. presidential election.

A message from Earthjustice & Evergreen Action:

President Biden has the legal authority and policy tools to lead a just transition from fossil fuel leasing to clean energy. The federal fossil fuel program remains incompatible with science-based climate targets and President Biden's environmental justice and climate commitments. America can lead the world in moving toward a clean energy future. We must phase out fossil fuel leasing on public lands and offshore waters. Read our report.

Driving the day

SEE YOU IN BAVARIA: President Joe Biden heads to Germany this weekend for the G-7 summit, and expect this meeting to be particularly focused on energy issues. The world leaders plan to roll out proposals to gut Russia's war machine and assist Ukraine, a senior administration official told reporters earlier this week, including how to go after Russia's energy sector without harming consumers around the world.

"We expect energy to be very much at the heart of the discussions the G-7 leaders have," the official said. "What leaders are likely to speak to is a set of shared values around taking steps to reduce reliance on Russian energy."

The U.S. was early out of the gate in banning Russian fossil energy imports, along with the United Kingdom. The European Union is also working on a ban on seaborn oil imports from Russia and financial measures to halt Russian energy shipments to other markets. Treasury Secretary Janet Yellen also floated the idea of capping prices on international Russian energy sales.

Stopping other countries from keeping Russian oil afloat remains a delicate challenge the world leaders will have to eke out over the weekend, as is lowering domestic fuel prices. The Biden administration is very publicly turning over every last stone to bring prices back down, and though Biden has directly tied high costs to the war in Ukraine, that's hardly deterred Republicans and industry from pinning the blame on him.

Argentina, India, Indonesia, Senegal and South Africa were also invited to the summit. India has rapidly increased its purchases of Russian crude for its refineries, offering Russia an alternative market as China continues to reel under Covid restrictions. Meanwhile, Indonesia is a major liquefied natural gas producer, and the Biden administration is still looking for avenues to secure 15 billion cubic meters of LNG for Europe.

B3W? The guest countries are also prime candidates for efforts to wean developing countries off of coal. When G-7 leaders met last June, they unveiled a Build Back Better World initiative to support infrastructure projects in the developing world. The initiative followed on calls from developing countries for financial assistance in adapting to climate change and countered China's aggressive overseas infrastructure push under its Belt and Road initiative.

One year later, the leaders plan to officially launch their "Global Infrastructure Partnership," the administration official said, though the exact details of what kinds of projects it would entail remains under wraps.

THE HUMAN RIGHTS ELEMENT: The movement to help developing countries move toward clean energy and climate-friendly infrastructure isn't clear cut, as POLITICO's Karl Mathiesen and Zack Colman report in their story on Vietnam's Ngụy Thị Khanh. She is her country's most high-profile environmental voice and has been active in calling for the reduction of coal use in Vietnam. But her recent sentencing to two years in prison for tax evasion is prompting human rights activists to pressure Western governments not to agree to finance the clean energy transition in Vietnam unless climate activists like Ngụy are freed.

"It's really time for the U.S. to take the gloves off and make it very clear to Vietnam that this won't be tolerated," said Michael Sutton, executive director of the Goldman Environmental Foundation.

Both the U.S. and EU called for her release, but the case illustrates the difficult position Western governments are in as they help developing countries with spotty human rights records address climate change. Read more from Karl and Zack here.

A message from Earthjustice & Evergreen Action:

On the Hill

METHANE MADNESS: The House Climate Crisis Committee has a second hearing on methane emissions today, focusing on health, job creation and climate change. The committee will hear from advocates and academics on the impact of methane emissions and the benefits of cutting emissions from the oil and gas industry.

The committee held a similar hearing last week on the role of state governments in reducing methane emissions featuring the governors of New Mexico and Wyoming.

SAVE THE SPECIES: The leadership of the Endangered Species Act Caucus praised the Biden administration's Thursday reversal of Trump-era ESA rules , emphasizing biodiversity's importance in combating climate change.

"Healthier wildlife populations mean healthier ecosystems, which results in stronger shorelines, less intense wildfires, better water quality, and fewer pests, among many other benefits," wrote Reps. Raúl Grijalva (D-Ariz.), Debbie Dingell (D-Mich.) and Don Beyer (D-Va.) in a statement.

The House passed Dingell's bipartisan Recovering America's Wildlife Act (H.R. 2773 (117)) last week, which would fund state, tribal and territorial endangered species conservation efforts. The Biden administration came out in support of the bill, which also enjoys wide bipartisan support in the Senate.

THIS IS ABOUT SEQUOIAS: House Minority Leader Kevin McCarthy wants you to stay on topic, thank you very much. During a news conference on a bipartisan bill for interagency cooperation to protect sequoias — the world's biggest tree and important carbon sinks — several reporters were much more interested in asking about the political news of the day, namely former President Donald Trump and the Jan. 6 hearing scheduled to start just a couple of hours later.

"If this is going to be something about politics, I've got another press conference you can go to," McCarthy said in response to a question about endorsing Trump in 2024. "This is a stage about sequoias."

Nevertheless, the questions persisted, garnering guffaws from the minority leader. "You'll get the same answer," McCarthy said in response to a question about the debunked claims of widespread voter fraud during the 2020 election. "Have you ever visited a sequoia? You wanna take your kids? I will bring you on a tour."

McCarthy did eventually answer a question about the Jan. 6 committee, saying he doesn't regret not appointing any members. But he brought the discussion back to trees, saying "I do not want to be the generation that lost it because they were more concerned about something that politically happened a year ago." He closed out the presser congratulating his peers for putting "the health of the giant sequoias ahead of that."

A SEED ON CLIMATE: McCarthy acknowledged his bipartisan bill to protect giant sequoias is only a small piece of addressing climate change. But it's unclear if his move to protect a massive tree species threatened by wildfires prevalent in his California district represents the highwater mark of working with Democrats to address climate change should Republicans take over the House.

"Our challenge is great when it comes to climate," he said. "Trees are an element that can help us with that. It doesn't solve it all."

Rep. Scott Peters of California, the lead Democratic co-sponsor of the sequoia bill, conceded it represents a "one-off." But he added it would spark "a much larger conversation" with Republicans about confronting wildfires made worse by poor forest management practices and worsening drought conditions, as well as on other measures to mitigate fossil fuel emissions.

WIND EXECUTIVES RAISE ALARM ON HOUSE PROVISION: Offshore wind industry executives are urging senators to exclude maritime crewing language from the House-passed Coast Guard authorization bill that they warn represents "an existential threat to the future of offshore wind" in the U.S. The provision in question would require crews on specialized offshore international construction vessels match the flag of the vessel or be American mariners as a condition of working on the U.S. Outer Continental Shelf. The language from Republican Garret Graves and Democrat John Garamendi was intended to ensure that U.S. workers are employed in the construction of offshore wind.

In a letter Thursday to Senate leaders , the industry argues the House language would result in the delay and potential cancelation of the 19 offshore wind projects with power offtake contracts or awards. There are currently "insufficient" numbers of trained American mariners or crew from the vessel's flag state, which effectively means the provision would block the use of international specialized offshore vessels when there are currently no U.S.-flagged specialized construction vessels to do the work, the executives write.

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.

Around the Agencies

ABOUT THAT MEETING: Energy Secretary Jennifer Granholm and executives of some of the country's biggest oil and gas companies agreed to keep in touch on ways to bring down fuel prices following their meeting Thursday, which both sides characterized as productive. In terms of concrete commitments, the readouts were sparing, though they stressed it was a good chance for the administration and industry to get on the same page on just why exactly refining capacity is difficult to expand and ways to prepare for hurricane season given that many of the country's biggest refineries are directly exposed to storms.

Much of the meeting was another platform for the administration to stress what it has done so far to bring down prices since there frankly isn't much more it can do in the immediate term. The Energy Department in its readout boasted of "record oil production under the Biden administration" and direct interventions to increase supply, including releases from the Strategic Petroleum Reserve.

ANOTHER YEAR OF LOWERED REFINING CAPACITY: The original action item for the meeting was to get refiners to increase their refining capacity, which was limited during the early pandemic, but refineries are now operating at near max capacity. And while the decrease has slowed, it hasn't stopped, according to the Energy Information Administration. Refining capacity was down 184,000 barrels per calendar day at the start of 2022 relative to the start of 2021, according to EIA.

GONE FISHING: While the Biden administration looks to strengthen offshore wind, it's also looking to assuage concerns from the fishing industry that siting hundreds of turbines out at sea won't come at the expense of fishermen's businesses and income.

The Bureau of Ocean Energy Management released on Thursday its draft fisheries mitigation guidance and "recommends that the lessee consider establishing a compensation process if a project is likely to result in lost income to commercial and recreational fisheries." The agency also "recommends that a lessee accept valid claims from fishing interests." But it does not create a central compensation fund or administer any funds.

Members of the public now have 45 days to comment. Read the document here.

JOIN TUESDAY FOR WOMEN RULE TALK ON THE ECONOMY: The U.S. economy is showing signs of slowing down after a period of robust growth last year. How would an economic slowdown affect women's economic security across socioeconomic, racial, and geographic lines? Join POLITICO's Women Rule for a conversation on what's ahead for the U.S. economy and how it will impact women's livelihoods and economic well-being. REGISTER HERE.

The Grid

— "Russia wants to control energy reserves of all former Soviet countries, Mike Pompeo says," via POLITICO.

— "We Energies and Alliant Energy coal plants in Wisconsin to stay open longer due to energy supply fears," via The Milwaukee Journal Sentinel.

— "Google's Plan for 24/7 Carbon-Free Energy Ran Into Headwinds in 2021," via The Wall Street Journal.

THAT'S ALL FOR ME!

A message from Earthjustice & Evergreen Action:

The federal fossil fuel program does not line up with President Biden's national climate pollution targets, the goals of the Paris Agreement, or climate science. Lifecycle emissions from fossil fuels extracted from federal lands are responsible for nearly a quarter of America's carbon emissions. If the Biden administration continues on their current trajectory with federal fossil fuel leasing, there's simply no way that it can meet its climate and environmental justice commitments.

Our report provides a policy roadmap for how the Biden administration can align its federal fossil fuel program with the President's climate and environmental justice commitments. The Biden administration must act by taking three steps: 1) swiftly phasing out new federal fossil fuel leasing on public lands and waters; 2) limiting existing federal fossil fuel production to align with the Paris Agreement; and 3) leading a just transition away from a fossil-fueled economy for communities.