The climate bill's final hurdles

Presented by Chevron: Your guide to the political forces shaping the energy transformation

Aug 03, 2022 View in browser   By Nick Sobczyk Presented by Chevron Sen. Kyrsten Sinema (D-Ariz.) at the Capitol last month. | Francis Chung/E&E News Senate Democrats are scrambling to vote on their $369 billion climate bill by this weekend, but first it has to go through some procedural gymnastics. Because they can't count on any Republican votes, Democrats plan to pass the bill through a process known as budget reconciliation. That allows them to pass legislation with just 50 votes, rather than the 60 needed to get around a filibuster. But it comes with arcane standards known as the "Byrd rule" — named for the late Sen. Robert Byrd (D-W.Va.), one of the architects of reconciliation. In short, all provisions of the bill must directly affect federal revenues, typically through direct spending or new taxes. Republicans are getting their chance this week to give the bill a "Byrd bath" by challenging individual policies with the Senate parliamentarian, the referee for reconciliation. Chopping block There are a few energy and climate provisions in the massive bill that could run into trouble. In order to claim the full $7,500 clean vehicle tax credit, for instance, automakers would be required to source certain percentages of battery materials from the United States or countries with which the U.S. has a free trade agreement. Because many of those materials are currently sourced from China and Russia, it could be difficult for automakers to claim the credit. Budget experts see the provision as potentially running afoul of the Byrd rule. The reasons are complex but in short: It could be considered policy, rather than taxes or spending. The bill's clean energy tax credits could come across the same issue, specifically a provision that allows developers who pay the prevailing wage to earn a bonus incentive. "The 'prevailing wage' provisions for companies qualifying for the various credits seems problematic to me," Bill Hoagland, a budget expert and senior vice president at the Bipartisan Policy Center, said in an email. Sinema troubles The other major factor Democrats are dealing with is Sen. Kyrsten Sinema (D-Ariz.), who has not said how she will vote on the bill. Her vote — as well as the vote of every Democrat in the Senate — is needed for the legislation to pass. Sinema is waiting for the "Byrd bath" to run its course. She has also reportedly asked for changes to a tax provision and $5 billion for drought resilience. Sen. Joe Manchin (D-W.Va.), who negotiated the bill with Majority Leader Chuck Schumer (D-N.Y.), spoke to Sinema on the floor yesterday. Manchin called it a "nice talk." "She'll make a good decision based on facts, and I'm relying on that," Manchin told reporters yesterday.   It's Wednesday— thank you for tuning in to POLITICO's Power Switch. I'm your host today,  Nick Sobczyk . Arianna Skibell will be back soon! Power Switch is brought to you by the journalists behind E&E News and POLITICO Energy. Send your tips, comments, questions to nsobczyk@eenews.net. Trends Dana Nuccitelli/Citizens' Climate Lobby This graph, compiled by Citizens' Climate Lobby's Dana Nuccitelli, shows the range of expert predictions about the greenhouse gas emissions reductions that could be achieved by the "Inflation Reduction Act." Nuccitelli put together modeling from the Rhodium Group , Energy Innovation and the REPEAT Project to compare the potential impacts of the Democrats' climate bill with a business-as-usual scenario. There's some uncertainty in the outcomes, but "it's great to see the large amount of emissions cuts that the bill is projected to produce in 2030," Nuccitelli said in an interview. Power Centers President Joe Biden during a virtual appearance yesterday on innovation legislation. | White House CHIPS winners The economic competitiveness and innovation bill passed by Congress last month sends gobs of money to support clean energy manufacturing and research, write George Cahlink and Jeremy Dillon. The bipartisan legislation includes $52 billion for semiconductor manufacturing, which could boost clean energy and electric vehicles, and funding for Department of Energy research. Read the full policy breakdown here . A Manchin tipping point? The climate bill negotiated by Sen. Joe Manchin (D-W.Va.) would send billions of dollars toward decarbonizing heavy industries like steel and cement, a potential tipping point for a notoriously vexing chunk of greenhouse gas emissions, write David Iaconangelo and Carlos Anchondo. The bill's Advanced Industrial Facilities Deployment Program  could transform the industrial sector, which accounts for about a quarter of U.S. greenhouse gas emissions, according to EPA. Read the story here . European heat POLITICO readers felt the heat that swept across Europe last month, write Zia Weise and Karl Mathiesen. Each month, POLITICO Europe asks readers how they're experiencing the changing climate, and in July, they saw wildfires from the train, record temperatures and scorching sun that kept people off the streets. Read the unique project here .   A message from Chevron:  At Chevron, we believe the future of energy is lower carbon. In the Permian Basin, we're exploring solutions to help meet growing energy demand, while reducing emissions intensity.   In Other News Wind turbines in Papalote, Texas. | Brandon Bell/Getty Images Where the wind goes (or doesn't): The Lone Star State generates plenty of wind power, but lagging transmission infrastructure means it often can't get to where it's needed , leaving turbines dormant. The Stone treatment: Filmmaker Oliver Stone will debut a documentary about the benefits of nuclear power on Sept. 9. Today on POLITICO Energy's podcast, Jordan Wolman dives into why the U.S. is behind other nations in deep-sea mining. Question Corner The science, policy and politics driving the energy transition can feel miles away. But we're all affected on an individual and communal level — from hotter days and higher gas prices to home insurance rates and food supply. Want to know more? Send us your questions and we'll get you answers.   A message from Chevron:   Subscriber Zone An aerial view of the Plant Vogtle nuclear project in Georgia. | Georgia Power Co. One of two nuclear reactors under construction in the U.S. got the green light to load fuel on Wednesday. Unit 3 at Plant Vogtle in Georgia is expected to go online in the first quarter of 2023. The Tennessee Valley Authority reached an agreement with GE Hitachi in an effort to build small modular nuclear reactors Florida Power & Light, the state's largest utility, operates an exclusive lounge used to host lobbyists and lawmakers , a revelation that comes as the company is mired in scandal over its political advocacy. That's it for today, folks! Thanks for reading.   A message from Chevron: At Chevron, we recognize that energy demand is growing. It's why we're increasing production to help keep up. This year in the Permian Basin, we plan to increase oil production by 15% over 2021 levels. And we're projected to reach 1 million barrels of oil per day by 2025, while continuing to reduce both carbon and methane emissions intensities. From 2016 to 2028, we're on track to reduce our methane emissions intensity in the region by 50%. In fact, nationwide, our onshore methane intensity is 85% lower than the U.S. industry average. Every day, we look for opportunities to reduce our emission intensity as we strive to produce energy that Americans—and customers throughout the world—can count on. Find out more.     Follow us on Twitter Arianna Skibell @ariannaskibell   Follow us

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