With help from Kelsey Tamborrino and Josh Siegel
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— The interim social cost of carbon is back after a federal appeals court trashed a lower court ruling that gutted the metric used in rulemaking.
— Democratic lawmakers and activists aren’t giving up on a big climate and energy package, focusing on reining in emissions while meeting crisis energy demands.
— Democrats in both chambers are calling on oil and gas executives to testify on what’s driving up the cost of gasoline.
HAPPY ST PATRICK’S DAY! I’m your host, Matthew Choi. Mike Sewell of TECO Energy gets the trivia for knowing iocaine powder was the poison used in the battle of wits in “The Princess Bride.” For today: Who was the U.S cabinet secretary to go to prison for crimes committed in office? Send your tips and trivia answers to [email protected]. Find me on Twitter @matthewchoi2018.
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SOCIAL COST OF CARBON LIVES ANOTHER DAY: A federal appeals court picked apart a lower court ruling Wednesday that gutted President Joe Biden’s social cost of carbon, meaning federal agencies will be able to get back to using the figure in writing rules and assessing projects.
The Biden administration set the social cost of carbon last year at $51 per ton — the same as under the Obama administration — and environmentalists hoped that number would go up following further review. But Republican states challenged the SCC’s legality, with a federal court in Louisiana siding with them and preventing the Biden administration from using the figure, which the administration warned would lead to chaos by cutting out a major variable in their assessments.
The 5th Circuit Court of Appeals found the whole GOP-led exercise specious and lifted the injunction. The judges rejected the argument that the metric could cause real, measurable harm, and dismissed the claims as “generalized grievance” against the administration. Their stay on the Louisiana decision is temporary, but the judges cast serious doubt on the red states’ case.
Louisiana Attorney General Jeff Landry will appeal the stay, his press secretary, Cory Dennis, told POLITICO in an email. “We strongly disagree with the 5th Circuit’s opinion that we lack standing in Biden’s latest attempt to inject the federal government into the everyday lives of Americans,” Dennis wrote. “We will petition for a rehearing en banc and will continue to stand up against this Administration’s vast overreach.”
POLITICO’s Alex Guillén has more.
A NEW MOMENT FOR ENERGY OVERHAUL: The Build Back Better package may have languished these past few months, but Democrats and green groups have new clean energy ideas swirling around, POLITICO’s Zack Colman reports. And some of them could end up benefiting domestic fossil fuel production to help European allies wean off of Russian energy.
“To state the obvious, we’ve lost momentum on getting budget reconciliation passed,” said Jason Walsh, executive director of the Blue Green Alliance. “Beyond the policy particulars there is this political strategy question of when is the time to actually do this? And we think it’s fast approaching.”
One proposal being floated would use emergency authorities like the Defense Production Act to rapidly deploy efficient appliances and renewable energy. Energy think tank Rewiring America and environmentalist Bill McKibben are pushing the idea and it seems to have piqued the White House’s interest.
Other options include a bill filed by Sens. Ed Markey (D-Mass.) and Martin Heinrich (D-N.M.) last Thursday for further releases to the Strategic Petroleum Reserve. And Sens. Tom Carper (D-Del.) and Joe Manchin (D-W.Va.), who butted heads over a methane fee mechanism in BBB, have been looking for ways to compromise, with Carper steadfast on reducing methane emissions and Manchin looking for ways to boost liquefied natural gas exports.
Read more about the ideas from Zack.
BIG OIL C-SUITE BECKONED TO THE HILL: The CEOs of the biggest oil and gas companies are facing calls from Congress to testify about what exactly is keeping retail gasoline prices so high. Speaking on the Senate floor Wednesday, Senate Majority Leader Chuck Schumer accused majors of prioritizing profits and shareholder returns over increasing efficiency and lowering consumer prices. And House Energy and Commerce Chair Frank Pallone invited the CEOs of BP, Chevron, Devon Energy, Exxon Mobil, Pioneer Natural Resources and Shell to testify before the committee on April 6.
“As Americans pay more at the pump, the biggest oil companies in America are making a killing. 25 of the top oil and gas companies reported a combined $205 billion in profit. That’s an astounding figure,” Schumer said, adding the Senate would also be inviting oil executives to testify before the upper chamber soon.
But some Democratic lawmakers are skeptical of the characterization of industry purposefully engaging in anti-competitive behavior, POLITICO’s Josh Siegel and Anthony Adragna report. “Is there normally a lag between a change in [crude oil] price and the price at the pump? Yes. The energy production system is complex and has many stages in the chain and the volatility of the price per barrel has been huge in recent weeks,” Sen. Chris Coons (D-Del.) said.
Frank Macchiarola, a senior vice president at the American Petroleum Institute, denounced Schumer’s remarks as “finger pointing,” saying in a statement that gas prices are a “function of increased demand and lagging supply combined with the geopolitical turmoil resulting from Russia’s aggression in Ukraine. Lawmakers should focus on policies that increase US supply to help mitigate the situation rather than political grandstanding that does nothing but discourage investment at a time when it’s needed the most.”
The national average retail gasoline price dipped slightly Wednesday to $4.305 from last week’s high of $4.331. But the Energy Information Administration isn’t predicting much relief in the next few months. The agency projected on Wednesday gasoline prices to average $4 for the month and rise to $4.12 in May before gradually cooling for the rest of the year for an average of $3.79 in 2022. Energy Secretary Jennifer Granholm pushed the need for investment in all energy sources to curb rising prices in the short term, but urged executives not to lose sight of a transition toward clean energy during a roundtable Wednesday.
NUCLEAR NOMINEE APPEARS AS URANIUM SUPPLY UNDER SCRUTINY: The Senate Energy Committee takes on the nomination of Kathryn Huff for assistant secretary of nuclear energy at DOE today. If confirmed, Huff — who currently serves as principal deputy assistant secretary for nuclear energy — would continue to play a key role in the Biden administration’s climate agenda, including the long-running stalemate over nuclear waste storage and the research and development of next-generation nuclear power.
But the hearing comes as Republicans and the U.S. nuclear industry have increased the focus on the U.S. reliance on Russia as a major supplier of the uranium necessary to fuel its nuclear fleet.
“We need to eliminate our dependence on Russian uranium. We also need to jump start American uranium production,” ranking member John Barrasso (R-Wyo.) will say today, according to his prepared remarks.
Barrasso will also join GOP Sens. Cynthia Lummis of Wyoming, Roger Marshall of Kansas and Kevin Cramer of North Dakota in introducing legislation today to ban imports of Russian uranium.
PUMPING HEAT: Sen. Martin Heinrich (D-N.M.) floated various ways that Biden should force the manufacture of heat pumps to ease the strain in the energy markets caused by Russia’s war in Ukraine. The Biden administration could place a significant procurement order through the Department of Defense, utilize the Loan Programs Office capacity at the Department of Energy, or invoke the Defense Production Act to “pump out heat pumps to electrify European homes,” he said at a Wednesday event hosted by Rewiring America, Evergreen Action and Ceres. He dubbed the push “electrify for peace.”
Heinrich later told Josh that invoking the Defense Production Act could enable U.S. companies to “scale” the manufacture of heat pumps “really rapidly.”
PIPELINE CYBER HITS BUGS: TSA ramped up its cybersecurity standards after the Colonial Pipeline hack led to the shut down of one of the country’s key energy arteries last year. But the pipeline industry is decrying many of the revamped processes as onerous, out of touch and wildly disruptive, POLITICO’s Eric Geller reports.
TSA’s new regulations are largely based on protections for personal computers, which haven’t translated well to pipeline control systems, industry critics said. Other rules have long timelines to implement necessary upgrades that could disrupt pipeline operations. TSA for its part is dealing with an “unprecedented” flow of requests for workarounds to keep operations running smoothly, overwhelming the agency’s resources.
“In every sense, TSA has screwed this up,” said Robert M. Lee, the CEO of Dragos, a cybersecurity firm that works with critical infrastructure companies. “It is a giant cluster and in many ways is a perfect example of what not to do with a regulatory process.” Read more from Eric.
MAX LNG CAPACITY: The Biden administration greenlit new liquefied natural gas exports from Cheniere Energy’s Sabine Pass in Louisiana and Corpus Christi in Texas — giving every operating U.S. LNG export project approval to export at full capacity to any country not under sanctions. The two orders will let the facilities ship out 0.72 billion cubic feet per day of natural gas to any country that doesn’t have a free trade agreement with the U.S., opening the door to all of Europe.
The U.S. is currently the top global LNG exporter, and the Biden administration has worked to ramp up LNG imports in Europe to help offset Russian natural gas. Republican Rep. Garret Graves of Louisiana praised the Biden administration for the approvals, but suggested DOE only acted after being compelled by events.
“It’s the right move. I am excited about it. I certainly give them applause,” Graves told Josh. But he added, “there is a zero percent chance this would have happened if it weren’t for Ukraine and the additional pressure that’s been put on them.” POLITICO’s Ben Lefebvre has more.
FOR YOUR RADAR: The White House Office of Science and Technology Policy and DOE are hosting a summit today on commercial fusion energy, featuring “fusion energy leaders from government, industry, academia, and other stakeholder groups to showcase progress made and have inclusive conversations about an updated fusion strategy.”
ICYMI: “Biden announces fresh aid to Ukraine but stops short of Zelenskyy’s demands,” via POLITICO.
GARDEN STATE PROMISES: New Jersey Gov. Phil Murphy rode his way to the governor’s mansion with the support of environmentalists hopeful for a progressive hellbent on addressing climate change.
But now environmentalists are worried he’s toning the climate talk down, as he only briefly touched on climate change in his State of the State, inaugural address and recent budget speech, POLITICO’s Ry Rivard reports. Environmentalists question if his proposals will be able to achieve the environmental goals he set in his first term, including cutting greenhouse gas emissions in half by 2030.
Murphy’s administration retorts that the latest budget has $30 million for electrifying the state’s vehicle fleet, $10 million for green jobs related work, $5 million for urban parks and money for new climate change education standards for schools. Read more from Ry here.
ALASKA WATCH: The Trump administration approval for an Alaskan land swap is back on track after a federal appeals court shot down a lower court decision killing the swap. The land swap would be used to build an emergency access road to the isolated community of King Cove for medical evacuations to an airport in Cold Bay. It’s a major priority for Sen. Lisa Murkowski, but the Obama administration rejected the road, citing ecological harm to the Izembek National Wildlife Refuge.
The Trump administration later approved the swap, only for it to be struck down twice in court, most recently in 2020. But Wednesday’s decision, written by two Trump appointees, found the district court was wrong to conclude the land swap violated the Alaska National Interest Lands Conservation Act. Alex has more for Pros.
“While this is not the last step in King Cove’s legal battle, I’m hopeful that courts at all levels will read this ruling and support the land exchange agreement signed by former Secretary [David] Bernhardt,” Murkowski said in a statement.
— “Lake Powell hits historic low, raising hydropower concerns,” via The Associated Press.
— “High-profile Penn State climate scientist to join Penn,” via the Philadelphia Inquirer.
— “A Russian oligarch’s superyacht is stuck in Norway because no one will sell it fuel,” via NPR.
— “Four things Zelenskyy just told Congress that could impact Russia’s war on Ukraine,” via POLITICO.
THAT’S ALL FOR ME!