The climate law's methane catch

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

Aug 22, 2022 View in browser   By Nick Sobczyk Presented by Chevron PROGRAMMING NOTE: Power Switch won't publish from Monday, Aug. 29, to Monday, Sept. 5. We'll be back on our normal schedule on Tuesday, Sept. 6." Senate Environment and Public Works Chair Tom Carper (D-Del.). | Francis Chung/E&E News The $369 billion climate bill signed into law by President Joe Biden last week will tax methane emissions, a potentially significant step in meeting international climate targets. But the policy comes with a catch: roughly $1.5 billion in grants and loans to oil and gas companies to help them measure and address those emissions. It turns out that the only politically viable way to punish fossil fuel companies for their emissions was to dish out a new subsidy for the industry. Democrats had little choice. The policy was born out of several months of intense talks between Sen. Tom Carper (D-Del.), a vocal supporter of the methane fee, and Sen. Joe Manchin (D-W.Va.), a fossil fuel industry supporter and the Senate's most important swing vote. Even in its diluted form, the policy could help clean up emissions at a crucial time. Methane concentrations in the atmosphere are rising rapidly, sparking fears among scientists that it could prevent the world from meeting its climate goals. "Those who want to criticize where we ended up are certainly free to do that," Carper said in an interview. "At the end of the day, defeat was not an option. We had to find our way to yes, we had to find a way to compromise." 'Decades of dawdling' Methane is a highly potent greenhouse gas emitted in a variety of agricultural and industrial activities, most prominently by the oil and gas industry. Under the new law, many facilities that emit methane over a certain threshold level will be subject to fines beginning in 2024. A new methane regulation from EPA is also set to be issued as soon as this year. Still, it's a bitter pill for progressive Democrats who pledged during the 2020 campaign to do away with subsidies and special treatments for oil, gas and coal companies. Some natural gas facilities may also end up being exempted from the fee, raising questions about its potential impact on emissions. "The methane fee has clearly over time been watered down from original intent," said Barry Rabe, a University of Michigan professor who tracks energy and climate policy. "There are some real gaps in it in terms of the number of producing firms that are exempt." But ultimately, Rabe said, the policy sends a strong signal both at home and abroad after nations, including the United States, pledged to reduce methane emissions during global climate talks last year. "It further positions the U.S., after decades of dawdling on methane, to begin to make some serious progress," Rabe said.   Today in POLITICO Energy's podcast: POLITICO's Zack Colman explains why environmental justice activists are unhappy with the new climate law. Listen to today's POLITICO Energy podcast It's Monday — thank you for tuning in to POLITICO's Power Switch. I'm your host, 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. This Is Climate Change A car sits in floodwaters covering a closed highway in Dallas on Aug. 22. | AP Photo/LM Otero The drought-stricken Dallas-Fort Worth region was struck by massive floods today, with some areas seeing nearly 10 inches of rain in a 24-hour span. It's as much rain as Dallas-Fort Worth residents might expect to see over an entire summer, dumped onto parts of the region in a single day. The Dallas deluge is a collision of climate impacts. The region, along with much of the American West, had been in a period of exceptional drought. Scientists say climate change is increasing "weather whiplash," with more frequent swings between extreme drought and extreme precipitation. Power Centers Transformers and power transmission lines in Des Plaines, Illinois. | Tim Boyle/Getty Images Grid trouble Utilities are having trouble getting their hands on crucial grid equipment, as the United States enters peak hurricane season, writes Peter Behr. The shortage of new power transformers means potential delays to post-storm recovery. It could also impact new clean energy deployment. Read the story here. SCOTUS fallout The Supreme Court's June decision to limit EPA's power plant greenhouse gas regulations could hit low-income and minority communities the hardest, write Lesley Clark and Jean Chemnick. "If EPA is constrained from taking action, that delay and exacerbation of the climate crisis will have the greatest effect on environmental justice communities, on fenceline communities," said Amy Laura Cahn, legal director of Taproot Earth. Read that story here. Nuclear reactions French President Emmanuel Macron and Russian President Vladimir Putin have agreed to send a team from the International Atomic Energy Agency to Zaporizhzhia nuclear power plant in Ukraine, writes Luanna Muniz. The safety watchdog has called the situation at Europe's largest nuclear facility "very alarming." It's under control of Russian troops, and shelling this month caused one reactor to shut down for safety reasons. Read more 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 Houston-area residents survey flood damage caused by Hurricane Harvey in 2017. | Scott Olson/Getty Images Climate impacts: Damage from Hurricane Harvey remains five years after it brought record rainfall to Houston. Power loans: Democrats' new climate law includes $350 billion in energy and automotive loan programs, a major boost for emerging clean energy technologies. 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 me your questions and I'll get you answers.   A message from Chevron:   Subscriber Zone A showcase of some of our best subscriber content. U.S. Fish and Wildlife Service via AP Another company is backing out of an oil and gas lease in the Arctic National Wildlife Refuge, the second in two months, leaving the state of Alaska as the sole remaining lease holder in the controversial area. Texas' plan to winterize its natural gas facilities after blackouts last year is drawing criticism from all sides. The nation's greenhouse gas emissions rose 2.5 percent in the first six months of this year, as people got back on the roads and natural gas demand stayed strong in the power sector. 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

To change your alert settings, please log in at https://www.politico.com/_login?base=https%3A%2F%2Fwww.politico.com/settings This email was sent to rouf@idiot.cloudns.cc by: POLITICO, LLC 1000 Wilson Blvd. Arlington, VA, 22209, USA Please click here and follow the steps to unsubscribe.