Overnight Energy & Environment

Energy & Environment — Doubts emerge about NDAA as permitting vehicle

Left-wing opposition will likely make it difficult for Democrats to include Sen. Joe Manchin’s (D-W.Va.) permitting reform deal in a defense spending bill. Meanwhile, California eyes a penalty on “excessive profits” for oil companies, and the International Energy Agency says renewables will surpass coal globally in 2025.  

This is Overnight Energy & Environment, your source for the latest news focused on energy, the environment and beyond. For The Hill, we’re Rachel Frazin and Zack Budryk. Someone forward you this newsletter? Sign up here or in the box below.

Key Dems raise doubts about Manchin deal in NDAA

Progressive opposition to including Sen. Joe Manchin’s (D-W.Va.) permitting reform deal in a defense spending bill is throwing cold water on the energy policies’ inclusion.  

  • In recent days, several House Democrats have said that they would not only oppose the defense bill itself if Manchin’s provisions are put in; they will also oppose the rule that allows the bill that comes to the floor.  
  • Since Republicans almost never vote for rules put forward by Democrats even if they support the underlying bill, the maneuver may only require a few defectors to succeed. 

House Armed Services Chairman Adam Smith (D-Wash.) told The Hill on Tuesday that he doesn’t think the policies, which are aimed at speeding up the approval process for energy projects, have the votes to succeed.  

“It does not appear to me that there’s the votes to sustain that,” Smith told The Hill. “If it was up to me at this point it would not be in, but it’s not up to me, but it seems to me like there’s not the support for it.”  

But, he said it’s up to leadership to decide whether to include them and that a final decision hadn’t yet been made.  

  • Congressional Progressive Caucus Chair Pramila Jayapal (D-Wash.) indicated she believes the progressive effort would be enough to kill the permitting reform’s chances in the NDAA.  
  • “Typically Republicans don’t vote for the rule, some of them might, but I can’t imagine there would be enough to counter the number of progressives that have already told me they’re voting against the rule,” she said. She added the caucus was still taking stock of how large the opposition to the rule could be. 

Read more here, from Rachel and The Hill’s Mike Lillis and Ellen Mitchell. 

Newsom proposes penalties for oil companies

California Gov. Gavin Newsom (D) on Monday evening unveiled a proposal that would penalize oil companies for “excessive profits” in the Golden State. 

  • Newsom introduced the “price gouging penalty” alongside state Sen. Nancy Skinner (D) in a move they said would “deter excessive price increases and keep money in Californians’ pockets.” 
  • “California’s price gouging penalty is simple – either Big Oil reins in the profits and prices, or they’ll pay a penalty,” Newsom said in a statement

How we got here: The proposal comes as California’s legislature kicks off a special session, initiated by the governor, to address the issue of price gouging. 

California, which also has among the highest gas taxes in the country, saw prices hit a record high of $6.44 per gallon in mid-June, according to AAA. Prices at the pump on Tuesday were about $4.72 per gallon — significantly higher than the national average of $3.38. 

“No one can deny that California’s gas prices were outrageously high compared to other states. And those high prices hurt California consumers and businesses,” Skinner said in a statement. 

If approved by state lawmakers, the proposal would make it illegal for companies to charge excessive prices, and excessive refiner margins would be punishable by a civil penalty from the California Energy Commission. 

So what does that mean? The definition of excessive — including the maximum margin and penalty amounts — would be determined through the legislative process, according to the proposal. Any penalties collected would go to a “Price Gouging Penalty Fund” that would be redistributed to Californians. 

The proposal also aims to improve transparency and oversight of the oil industry by the state and expand the abilities of the California Energy Commission and the California Department of Tax and Fee Administration to obtain data on costs, profits and pricing. 

Read more from The Hill’s Sharon Udasin.

Report: Renewables will surpass coal by 2025

Renewable energy will surpass coal as a source of global electricity generation by 2025, the International Energy Agency (IEA) projected in a report Tuesday

In its annual renewables report, the IEA said the Russian invasion of Ukraine has accelerated the transition and will contribute to it increasing nearly twofold in the next five years. Between now and 2027, the IEA projects, global renewable energy capacity will increase by about 2,400 gigawatts, equivalent to China’s current capacity. 

Although nations were already trending toward renewable adoption, the expected growth is 30 percent above what the IEA was projecting a year ago. 

What changed? The invasion of Ukraine is set to be a particular accelerant for the transition in Europe. The capacity added in European nations from 2022 to 2027 will be double that of the expansion in the previous five years, according to the IEA. 

  • Elsewhere, the three top carbon emitters — China, the U.S. and India — are also set to drive expansion of renewables more than was projected a year ago. In China’s case, the nation’s latest five-year plan calls for development equivalent to nearly half of new capacity over the next five years.
  • The U.S., meanwhile, is set to implement a number of renewable energy initiatives through the Inflation Reduction Act, a year after the prospect of a climate and infrastructure bill seemed doomed in the 50-50 Senate. 
  • “Renewables were already expanding quickly, but the global energy crisis has kicked them into an extraordinary new phase of even faster growth as countries seek to capitalize on their energy security benefits,” IEA Executive Director Fatih Birol said in a statement. “The world is set to add as much renewable power in the next five years as it did in the previous 20 years. This is a clear example of how the current energy crisis can be a historic turning point towards a cleaner and more secure energy system.” 

Read more about the report here. 

Dems want to use DPA for electric transformers

A group of House Democrats is pushing Congress to use the powerful Defense Production Act (DPA) to rapidly produce electric transformers, a call that comes in the wake of an armed attack at two substations in North Carolina that left tens of thousands without power. 

The nine Democratic members — who include Reps. Sean Casten (Ill.), Doris Matsui (Calif.) and Conor Lamb (Pa.) — asked for $2.1 billion in emergency funding to develop domestic supply chains to produce transformers, which are considered a critical weak point in the power grid, Casten’s office said in a Tuesday press release

The money would be be paid out of a forthcoming disaster supplemental funding bill — an ad hoc measure expected to be passed during the lame-duck session to aid in disaster recovery. 

  • The recent attacks on transformers in Moore County, N.C., were “top of mind” for the members, said a source familiar with the matter. The FBI has joined the investigation into the destructive vandalism, which officials say was caused by gunfire. 
  • But levels of both consumer demand and disaster-based destruction of infrastructure are increasing, the House members wrote. One immediate cause of the current shortage of electric transformers stems from the fact that so many of the devices have gone to repair wrecked power systems on hurricane-ravaged parts of the Gulf Coast. 

Read more here from The Hill’s Saul Elbein.

WHAT WE’RE READING

  • Some 70 years later, the West has an answer for OPEC (Axios
  • Chevron to Take Control of Venezuelan Oil Facility This Week (Bloomberg
  • US orders chemicals removed at Virgin Islands oil refinery (ABC News
  • Alabama coal plant still the largest greenhouse gas emitter in United States (AL.com

That’s it for today, thanks for reading. Check out The Hill’s Energy & Environment page for the latest news and coverage. We’ll see you tomorrow.

Tags Adam Smith Defense Production Act Gavin Newsom Gavin Newsom International Energy Agency joe manchin Joe Manchin National Defense Authorization Act permitting reform Pramila Jayapal

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