News Oil & Gas

Oil and gas industry’s top lobbying arm considers another climate policy


Good morning and welcome to The Climate 202! As a reminder, the newsletter won’t publish on Friday since Congress is out of town. We’ll be back in your inbox on Monday. But first:

American Petroleum Institute weighs clean fuel standard after backing carbon tax

The American Petroleum Institute will hold a workshop Thursday on the merits of a clean fuel standard, a policy aimed at slashing carbon emissions from transportation, the nation’s largest source of planet-warming pollution, according to a draft meeting agenda obtained by The Climate 202.

The meeting, which was confirmed by two people familiar with the matter, signals that the oil and gas industry’s top lobbying arm is edging closer to supporting another climate policy after endorsing a tax on carbon emissions in March 2021. 

Representatives for automakers, ethanol producers and other industry interests are expected to attend the workshop at a hotel in downtown Washington, according to the two individuals familiar with the matter, who spoke on the condition of anonymity because they were not authorized to comment publicly.

“Transportation is the largest U.S. economic sector contributing to [greenhouse gas] emissions and reducing these emissions is essential to achieving the ambitions of the Paris Agreement,” the draft agenda says.

“We will work to propose an outline of a policy concept (and ultimately federal legislation) that can reduce GHG emissions from the transportation sector relatively rapidly and in a cost-effective manner for the end user and society,” the document adds.

Asked for comment, an API spokesman said in an email: “API regularly engages with a broad range of stakeholders on emissions reduction pathways across the economy.”

The spokesman did not respond to follow-up questions about whether the draft agenda was up-to-date or whether the trade group would support legislation creating a national clean fuel standard.

California and Oregon have already implemented a clean fuel standard, which requires fuel suppliers to reduce the carbon intensity of their products, including gasoline and diesel. In May, Washington Gov. Jay Inslee (D) signed legislation to establish a clean fuel standard on Jan. 1, 2023, after suffering several defeats in his years-long quest to enact the policy.

The API meeting marks the second time in a month that the policy has appeared to gain currency in Washington. In September, an initiative representing electric utilities, biofuel producers, environmentalists, electric vehicle charging companies and other interests began calling on the next Congress to pass legislation creating a national clean fuel standard.

Members of the DriveClean initiative, which launched Sept. 19, include the electric vehicle start-up Rivian, the Renewable Fuels Association and the New York League of Conservation Voters. The initiative has hired Lot Sixteen, a bipartisan lobbying and communications firm, to help with outreach.

Transportation is the largest source of climate pollution in the country, accounting for about 27 percent of U.S. greenhouse gas emissions, according to data from the Environmental Protection Agency. Gas- and diesel-powered cars and trucks account for the bulk of those emissions.

It’s unclear which specific companies plan to attend Wednesday’s meeting. A General Motors spokeswoman said the automaker did not plan to send any representatives, while a Ford spokeswoman declined to comment. 

Spokespeople for POET, the world’s largest producer of biofuels, and the Alliance for Automotive Innovation, a trade association representing automakers, did not immediately respond to requests for comment.

Reasons for some skepticism

In March, when API threw its weight behind a carbon tax, many analysts and lawmakers doubted the sincerity of the move. They noted that it is highly unlikely Congress would pass a carbon tax, “allowing the trade group to appear to support climate action while risking little,” as our colleague Steven Mufson reported at the time.

And when Inslee, the Washington governor, tried unsuccessfully to enact a clean fuel standard in 2020, he faced pushback from a group funded by the oil industry, as Maxine previously reported for E&E News. 

On its website, Affordable Fuel Washington portrays itself as a grass-roots group of citizens who worry that the policy will raise prices at the pump. But the group is bankrolled by the Western States Petroleum Association, a powerful trade association that represents the oil and gas industry in Arizona, California, Hawaii, Nevada, Oregon and Washington.

Biden views damage from Hurricane Ian, says DeSantis has ‘done a good job’

President Biden traveled to Florida on Wednesday to survey the damage from Hurricane Ian, which is shaping up to be the deadliest storm to pound the state since 1935, The Washington Post’s Danielle Paquette and Meryl Kornfield report.

While state authorities have documented 72 deaths so far, county sheriffs have reported dozens more, pushing the total to at least 103. That makes Ian more fatal than Hurricane Andrew in 1992. Slightly more than half of Ian’s victims drowned, underscoring what experts call a frequently overlooked reality: Water usually kills more people than wind.

Biden told residents of Fort Myers, Fla., that the federal government “will be here until it’s finished,” The Post’s John Wagner and Mariana Alfaro report. He added that 100 percent of the bill for debris removal, search and rescue, sheltering, feeding, and other emergency measures will be covered for 60 days, twice as long as an initial disaster declaration.

The trip brought Biden face-to-face with Florida Gov. Ron DeSantis (R), a potential 2024 White House contender who has sparred with the president on several issues, including immigration. But the two have appeared conciliatory since Ian hit the state, with both promising to put politics aside and deliver relief for hurricane-stricken residents.

“We appreciate the team effort,” DeSantis said at a news briefing Wednesday alongside Republican Sens. Marco Rubio and Rick Scott of Florida and Federal Emergency Management Agency Administrator Deanne Criswell

“What the governor has done is pretty remarkable so far,” Biden told reporters. “The biggest thing the governor has done … [is] recognized there’s this thing called global warming. The world is changing.” 

OPEC, allies move to slash oil production, eliciting blistering White House response

The Organization of the Petroleum Exporting Countries said Wednesday that it will reduce oil production by 2 million barrels per day, in a rebuke to President Biden that could drive up gasoline prices worldwide, worsen the risk of a global recession and bolster Russia in its war in Ukraine, The Post’s Jeff Stein, John Hudson and Rachel Lerman report.

The move by the coalition of oil-producing nations, led by Russia and Saudi Arabia, could lead to higher gas prices in the United States, potentially imperiling the Biden administration’s determination to lower prices at the pump ahead of the midterm elections. 

The decision prompted a blistering response from the White House, which had waged a last-minute push to persuade Middle East allies not to dramatically cut production ahead of the meeting, according to senior administration officials who spoke on the condition of anonymity to discuss internal strategy. That effort, involving high-level discussions with foreign counterparts, was seen internally as a long shot.

Sen. Joe Manchin III (D-W.Va.) on Wednesday seized on the OPEC decision as further evidence that Congress should pass his controversial legislation to speed up the permitting process for energy projects, which was pulled from a government funding bill last month.

“This announcement should serve to further motivate my colleagues in Congress to come to the table to pass comprehensive, bipartisan permitting reform to lessen our dependence on these foreign nations,” Manchin said in a statement.  

IRS, Podesta seek public input on clean energy tax credits

The Internal Revenue Service and the Treasury Department on Wednesday announced they are soliciting public input on implementing roughly $270 billion worth of clean energy tax credits in the Inflation Reduction Act.

John Podesta, a senior climate adviser to President Biden who recently joined the White House to help implement the climate law, said the IRS and Treasury are especially interested in receiving feedback from families, workers and residents of environmental justice communities.

“We’re moving fast on implementation so taxpayers can have certainty so we can fully unlock the potential of this historic law to combat climate change and strengthen U.S. energy security,” Podesta said on a Wednesday call with reporters.

Deputy Treasury Secretary Wally Adeyemo said on the call that the agency plans to release highly anticipated guidance on the clean energy tax credits in the coming months, although some information about the electric vehicle incentives may be available as soon as the end of the year.

To take advantage of the tax credits in the climate law, a company must meet certain prevailing wage and apprenticeship requirements. However, these labor rules are slated to take effect 60 days after the IRS and Treasury issue guidance on the rules. If a company begins construction on a project before then, it will be deemed to have met the labor rules.





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