| | | | |  | | By Matthew Choi | With help from Kelsey Tamborrino, Alex Guillén, Catherine Morehouse and Josh Siegel. 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. | | | — Interior's Gulf of Mexico lease sale got mothballed after a federal judge vacated its results in a massive win for environmentalists. — A bipartisan group of senators is mulling legislation to sanction Russia if it invades Ukraine, which could include penalties related to the Nord Stream 2 pipeline. — Democratic lawmakers are turning up the heat on cryptomining's high energy consumption. WELCOME TO FRIDAY! I'm your host, Matthew Choi. Felicidades to NAM's Rachel Jones for knowing Colima is the least populous state in Mexico. For today's trivia, math! What is the denominator of the quadratic formula? 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: The European energy crisis Biden hopes to avoid. | | | | HOLD THE LEASES: In the latest twist in the saga of the Biden administration's federal oil and gas leases, a U.S. district judge vacated Thursday the results of DOI's November lease sale for large swaths off the Gulf Coast. Judge Rudolph Contreras pointed to the environmental review by Interior's Bureau of Ocean Energy Management under the Trump administration, saying the bureau "acted arbitrarily in excluding foreign consumption from its emissions analysis." Environmentalists sued DOI over the lease sale, which was among the largest in the recent history of the Gulf of Mexico, decrying it as counter to the administration's stated goals of transitioning toward cleaner energy. DOI and the White House maintained the administration was merely following the law after a federal court in Louisiana found the administration's previous pause on new lease sales unlawful. Environmentalists, however, didn't buy that defense. "Today's decision is a victorious outcome not only for the Gulf's communities, wildlife, and ecosystem, but also for the warming planet," Hallie Templeton, legal director at Friends of the Earth, said in a statement. "But the fight is not over. We will continue to hold the Biden administration accountable for making unlawful decisions that contradict its pledge to take swift, urgent action on 'code red' climate and environmental justice priorities." The sale brought in $191 million, with Exxon Mobil bidding on nearly a hundred shallow water parcels. But Contreras said vacating the sale wouldn't be too big of a deal since the lease sales were never formally awarded to the winning companies. The industry, though, begged to differ. Erik Milito, president of the National Ocean Industries Association, said in a statement that preserving U.S. oil and gas production was crucial as geopolitical crises create an uncertain market. "It will be incumbent on the Administration to defend responsible U.S. offshore production and to take the necessary steps to ensure continued leasing and energy production from the U.S. Gulf of Mexico, for the benefit of all Americans," Milito wrote. Pro's Ben Lefebvre has more. NORD STREAM SANCTIONS STILL IN PLAY: A bipartisan group of senators wants to present some new legislation that could impose sanctions on Russia when the Senate is back in session next week, POLITICO's Andrew Desiderio and Alex Ward report. And they want it to bite. Working off of Senate Foreign Relations Committee Chair Bob Menendez's (D-N.J.) "mother of all sanctions" legislation targeting Russia if it invades Ukraine, a group of four Democrats and four Republicans are spearheading an effort to get something that can overcome a Republican filibuster. An effort to impose sanctions related to the Nord Stream 2 pipeline via a bill from Sen. Ted Cruz (R-Texas) failed earlier this month despite bipartisan support amid an intensive lobbying effort by the Biden administration. But Nord Stream 2 sanctions could still be in play, with Sens. Jeanne Shaheen (D-N.H.) and Chris Murphy (D-Conn.) working to get a bipartisan plan for addressing the natural gas pipeline in the latest sanctions bill, Andrew and Alex report. "There are a number of efforts underway, and I think there's a lot of interest on both sides of the aisle in trying to do something that we can get agreement on," Shaheen added. "There's interest in moving as expeditiously as possible," Shaheen said. The pipeline was a source of friction between the Biden administration and the Hill, with lawmakers frustrated that the administration wasn't more strictly enforcing sanctions on the Russian pipeline, which would carry natural gas into NATO territory. Former German Chancellor Angela Merkel's government firmly supported the project, and the Biden administration was eager to rebuild relations with Berlin after the tumult of the Trump era. Current Chancellor Olaf Scholz continued to support the project as his government leans into natural gas as a transition energy source, with resistance in his coalition toward nuclear over waste concerns. But Scholz' government is keeping the door open on sanctioning Nord Stream 2. Foreign Minister Annalena Baerbock of the Green Party said this month : "We have no choice but to defend our common rules, even at a high, sometimes economic price." Biden will host Scholz at the White House early next month, where they will discuss ways to deter Russian aggression as well as climate change, White House press secretary Jen Psaki announced Thursday.
| | | | DON'T MISS CONGRESS MINUTES: Need to follow the action on Capitol Hill blow-by-blow? Check out Minutes, POLITICO's new platform that delivers the latest exclusives, twists and much more in real time. Get it on your desktop or download the POLITICO mobile app for iOS or Android. CHECK OUT CONGRESS MINUTES HERE. | | | | | | | | DEMS PROD CRYPTOMINING'S ENERGY HABITS: Sen. Elizabeth Warren, along with seven of her Democratic peers, is demanding details from some of the biggest cryptocurrency miners on their power consumption and environmental impact. Cryptomining is extremely energy intensive, with its high footprint drawing increased scrutiny from climate-conscious lawmakers. "The extraordinarily high energy usage and carbon emissions associated with Bitcoin mining could undermine our hard work to tackle the climate crisis — not to mention the harmful impacts crypto mining has on local environments and electricity prices," Warren said in a statement. Signatories to the letters include Sens. Sheldon Whitehouse (D-R.I.), Jeff Merkley (D-Ore.), Maggie Hassan (D-N.H.), and Ed Markey (D-Mass.), as well as Reps. Katie Porter (D-Calif.), Rashida Tlaib (D-Mich.), and Jared Huffman (D-Calif.). Sam Sutton has more for Pros. THAT'S NOT WHAT WE MEANT: Fifteen Republican senators, led by EPW ranking member Shelley Moore Capito (W.Va.), called on EPA to reconsider its proposal to deny all 65 pending small refinery exemption petitions under the Renewable Fuel Standard program, arguing the proposal flies in the face of congressional intent under the Clean Air Act. The agency proposed in December retroactively reducing 2020's biofuel blending requirements but called for ramping them back up for 2022. The proposal also called for denying the pending refinery exemption requests before the agency and opened comment on its outlook on future waivers. But the oil-state senators call it puzzling that EPA would consider the "drastic step" of denying the petitions at a time of "increasing gasoline prices and several small refinery closures around the nation." And they warned the agency's proposal will ultimately "lead to more litigation and increased uncertainty under the RFS." They add it will also raise costs on refiners and consumers through its proposed blending mandates for 2022 under the program, which they say will bake in elevated levels for years to come. It's an argument United Brotherhood of Carpenters and Joiners of America President Doug McCarron presented to Biden earlier this week, urging revision of the RFS proposal. Comments on the small refinery exemption proposal are due Feb. 7. An EPA spokesperson said the agency "will review and respond to the letter." BREAKING OLD BARRIERS IN NEW ENERGY: Rep. Bobby Rush (D-Ill.), chair of the House Energy and Commerce Energy Subcommittee, doesn't want the leadership of clean energy to look like the leadership of the old fossil fuel sector. Speaking at an American Council for Capital Formation event Thursday, Rush said a clean energy transition must include investments and DOE contracts toward minority-led initiatives, as well as access to alternative energy for communities of color. Rush cited access to electric vehicles as a prime example, saying they should not be limited to the rich and the federal government should create incentives to make them available to everyone. "Don't just have white men at the top of the fossil fuel industry and white men at the top of the alternative energy sector, you know?" Rush said. "There's no sustained progress to me if something is a repeat of business as usual." "The environment will not surrender to cash or race. It won't surrender to any of the ways we like to divide ourselves," Rush added. "The environment is for all of us." | | | PROTECT THE WATER: The Biden administration is crafting plans to collaborate with water utilities to protect them against cyberattacks, Pro's Eric Geller reports. The plan involves a Cybersecurity and Infrastructure Security Agency and EPA pilot program to help the utilities install cybersecurity monitoring technology and would have the utilities share threat information with the federal government. The program will be voluntary. EPA doesn't have the authority to mandate cyber regulations in the same way as TSA with pipelines, though the administration is working with lawmakers to fill the regulatory gap. Read more from Eric. MAJOR ECONOMIES CLIMATE CHECK IN: Officials of the Major Economies Forum brainstormed ways to keep global warming in line with the Paris Climate Agreement targets during a virtual summit Thursday. The participants included both the world's biggest emitters and countries that are most vulnerable to climate change, including Bangladesh, Antigua and Barbuda and the Marshall Islands. The U.S. raised the idea of individual countries setting domestic plans for their methane emissions. Other ideas included "quantifying a goal for installing new zero-carbon power and for accelerating electric vehicle deployment," Pro's Zack Colman and Karl Mathiesen report. Though Russia participated, the tension over a potential invasion into Ukraine and its impacts on energy access did not play a major role in the discussions, according to the officials. Read more from Zack and Karl here. FERC MULLS COMPETITION: Debate over how far to lean into competitive development of transmission lines remains a hot issue at FERC as it considers how to reform U.S. transmission policy , Commissioner Allison Clements said Thursday during a webinar hosted by free market think tank R Street Institute. The commission is considering arguments from competitive power interests who say opening up development to non-incumbent power providers leads to lower costs, versus utilities who argue that historic efforts to expand competition have been ineffective in spurring investment. "I've heard that competition works for customers; in some places, we've seen the proof is in the pudding where there are lower cost investments made by competitive transmission providers to the benefit of customers," Clements said. "I've also heard perspectives, and see in the record perspectives, where the introduction of competition into the regional [planning] process has been the biggest barrier to getting sufficient investment done." NO PEBBLE UNTURNED: EPA on Thursday called on the Army Corps of Engineers and the developer of the Pebble Mine in Alaska to submit updated information as the agency prepares to re-propose generally blocking mining in the Bristol Bay watershed. EPA specifically asked in a letter for any information by Feb. 11 "to demonstrate that no unacceptable adverse effects to fishery areas would result from discharges associated with mining the Pebble deposit, or that actions could be taken to prevent unacceptable adverse effects." EPA has set a May 31 deadline to issue a new determination.
| | | | 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. | | | | | | | | N.C. GROUPS RESTART PFAS TESTING LAWSUIT: Several North Carolina groups are reviving a year-old lawsuit seeking to force EPA to order Chemours, which owns a plant in Fayetteville, to conduct health and safety tests on 54 PFAS chemicals. After the Trump administration denied their petition, the Biden EPA in December reconsidered and partially granted their petition, requiring testing of just seven of the PFAS — a decision that left the groups incensed. In response, the groups are reviving their dormant legal challenge, arguing in a court brief that Regan's response "in fact rejects virtually all the requests in plaintiffs' petition and therefore 'denies' the petition." The groups' attorney, Bob Sussman, a former top EPA official, called EPA's petition response "disappointing,'' adding: "We are confident that the court will direct EPA to assure that Chemours pays for essential testing on chemicals that are in the drinking water and blood of hundreds of thousands of North Carolinians." | | | — BP announced the appointment of Matthias Bausenwein as senior vice president of offshore wind, who will be joining the company in the second half of this year. Bausenwein previously was president of the Asia-Pacific region at the Danish offshore wind giant Ørsted and stepped down from the role earlier this month. | | | — "How an 'anti-trans' group split the fight against a lithium mine," via E&E News. — "What Happens When Russian Hackers Come for the Electrical Grid," via Bloomberg. — " Australia's Woodside pulls out of Myanmar gas projects," via the Financial Times. — " Aramco CEO says energy transition 'not going smoothly '," via Reuters. — " Gas stoves in kitchens pose a risk to public health and the planet, research finds," via The Washington Post. THAT'S ALL FOR ME! | | | | Follow us on Twitter | | | | Follow us | | | | |
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