Energy: What's ahead in 2023

Your guide to the political forces shaping the energy transformation

Dec 23, 2022 View in browser   By Kelsey Tamborrino PROGRAMMING NOTE: We'll be off next week for the holidays but back to our normal schedule on Tuesday, Jan. 3. President Joe Biden signs the Inflation Reduction Act with Senate Majority Leader Chuck Schumer (D-N.Y.) (left) and House Majority Whip James Clyburn (D-S.C.) in the State Dining Room of the White House on Aug. 16. | Drew Angerer/Getty Images It's been a busy — albeit bumpy — year for energy policy. And it's unlikely to slow down come January. To close out the year, here's a refresher of some of the major stories over the past 12 months and what to watch. Passing the climate law: Congressional Democrats are closing the lame-duck session by taking a victory lap, as Nick Sobczyk reports for POLITICO's E&E News. Lawmakers of both parties managed to pass significant bills, from the infrastructure law to the CHIPS and Science Act. But the surprise passage of the party-line Inflation Reduction Act marked the biggest single investment in climate policy Congress has ever made. What's next: With Republicans controlling the House, the climate law is primed for scrutiny as the GOP searches for the next Solyndra — the solar company that collapsed after taking millions of dollars in loan guarantees from the Obama administration. The ensuing drama was red meat for Republican attacks, even though the loan program at its center also spurred new technology and transformed energy markets. The Biden administration has signaled it's preparing for the increased scrutiny — but will the next green-spending flap cause the same stir? Permitting fights: As part of the deal to pass the climate bill, top Democrats promised West Virginia Democratic Sen. Joe Manchin a vote on legislation to streamline permitting rules for both renewable energy and oil and gas infrastructure. The effort sank amid opposition from progressives who called it a giveaway to fossil fuels and from Republicans who said it didn't do enough. What's next: After two failed attempts to attach Manchin's legislation to must-pass bills, Republicans are looking to push permitting measures in the next Congress on more favorable terms. Democrats who support a change say the debate at least shows that people in the party acknowledge the need to streamline permitting. As one House progressive who opposed the bill summarized: "This is a zombie that will not die. It's going to be back again and again." Russia's war on Ukraine: The invasion rattled markets, putting a renewed focus on energy security as concerns about Europe's over-reliance on Russian natural gas came to fruition. The invasion sparked a U.S. ban on Russian oil and created a political headache for the White House as gasoline prices surged, hitting a record high of $5.02 a gallon in June. After the invasion, President Joe Biden ramped up sales from the U.S. Strategic Petroleum Reserve to tame the price spikes and locked heads with oil companies by urging them to ramp up production. What's next: The U.S. and its allies are seeking new ways to punish Russia amid questions over whether President Vladimir Putin will try to tank the world's oil markets. Climate damages: Countries gathering in Egypt for last month's U.N. climate talks emerged with a long-sought win: an agreement for wealthy countries to create a "loss and damage" fund to help developing nations facing devastation from climate change. But the agreement left out a host of details — such as any pledges by rich nations to actually contribute to the fund. What's next: Next year's climate summit in the United Arab Emirates will bring pressure on the U.S. to deliver on its promises — but odds of Biden getting buy-in from the GOP-led House are low. One bad omen: Biden previously pledged to deliver $11.4 billion annually in international climate finance by 2024, but this week's spending bill proved just how difficult that may be to enact. West Virginia v. EPA: The Supreme Court issued a ruling that constrains the executive branch's authority to address climate change and raised questions about other regulations. The court found that regulators do not have broad authority to curb planet-warming pollution from power plants, spurring a wave of related lawsuits seeking to rein in the administration's reach. What's next: Those other suits are still playing out, but as E&E News' Pamela King reported this week it could be a sign of more to come from the high court. The justices are expected to hand down a decision in the coming months in another blockbuster case centered on the scope of the Clean Water Act, the law governing the nation's waterways. Happy holidays — thank you for tuning in to POLITICO's Power Switch. I'm your host, Kelsey Tamborrino, temporarily in the hosting chair for Arianna Skibell. Power Switch is brought to you by the journalists behind E&E News and POLITICO Energy. Send your tips, comments, questions to askibell@eenews.net. Today in POLITICO Energy's podcast: Your Power Switch host discusses geothermal energy, a renewable power source that is poised for a resurgence — with help from the oil industry. POLITICO Pro subscribers can also read the story here. Featured story Scientists say they're experiencing more climate denial on Twitter since Elon Musk became owner of the social media platform. | Claudine Hellmuth/POLITICO (illustration); Britta Pedersen-Pool/Getty Images (Musk); iStock (Twitter icons) As co-founder of Tesla, Elon Musk helped make electric vehicles that reduce emissions cool to the masses. But as Twitter's new CEO, Musk is managing a social media platform rife with climate change misinformation that's only getting worse, reports E&E News' Scott Waldman. Some prominent climate deniers have returned to the platform after being banned, while signs emerge that scientists have left Twitter after their posts featuring global warming research were swarmed by critics. Power Centers House Minority Leader Kevin McCarthy (R-Calif.) returns to his office Friday after making a floor speech during debate on the 2023 omnibus spending bill at the Capitol. | Francis Chung/POLITICO A funding bill for Christmas The House today approved the $1.7 trillion government funding package for the fiscal year ending Oct. 1, sending the legislation to Biden's desk just before Christmas. The chamber approved the bill by 225-201-1. In a floor speech, Minority Leader Kevin McCarthy (R-Calif.) accused Democrats of seeking to leverage their waning days in power to rush through a "monstrosity" of a bill funding Democrats' "special interests," reports E&E News' Emma Dumain. The legislation would allocate roughly $40 billion for disaster recovery and drought, a $576 million increase for EPA, a $574 million boost for the Interior Department and an $1.8 billion hike for the Energy Department. Where the wind blows The Biden administration set a goal to deploy 30 gigawatts of offshore wind by 2030, and this year showcased the industry's dizzying efforts to get there. As E&E News' Heather Richards reports, 2022 was a landmark year for the offshore wind sector — from billion-dollar bids in New York to turbine installation vessels arriving in New England waters — buoying confidence in investment in the U.S. market and providing crucial lessons learned. Heather notes that insiders continue to express confidence in the industry despite economic headwinds, along with inflation and supply chain issues that could slow wind's pace. in other news EDF Renewables is abandoning plans for a solar facility in rural Ohio after facing intense local opposition, InsideClimate News reports. It marks one of the country's largest renewable energy projects thwarted by local resistance just as the U.S. is poised to expand its manufacturing footprint with new clean-energy facilities. Extreme cold and winter storms left 1.4 million homes and businesses without power across the U.S. while placing more than 200 million people under weather advisories or warnings Friday. The National Weather Service's map "depicts one of the greatest extents of winter weather warnings and advisories ever," the Associated Press reports. Subscriber Zone A showcase of some of our best subscriber content. A construction crew works on the Kayenta solar project, which was developed by the Navajo Tribal Utility Authority. | Navajo Tribal Utility Authority New incentives for "green" hydrogen are creating schisms among energy groups about how to ensure the fuel is a low-carbon resource, reports E&E News' David Iaconangelo. The Treasury Department is expected to release guidance soon on the conditions for hydrogen developers hoping to claim a new tax credit. Another provision under the climate law would lift financial barriers for Native American tribes seeking to build clean energy projects. But it could be many years before tribes can connect those projects to the power grid. The operator of the original Keystone pipeline got federal approval to restart part of the line that experienced a leak earlier this month. The pipeline segment carries oil from Steele City, Neb., to Cushing, Okla. — a major oil storage hub that then connects to refineries along the Gulf Coast. (Note: The pipeline's much more controversial cousin, Keystone XL, remains dead after Biden killed it last year.) That's it for today, folks. Thanks for reading, and have a great holiday!   Follow us on Twitter Arianna Skibell @ariannaskibell   Follow us

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