Overnight Energy & Environment

Overnight Energy & Environment — Presented by ExxonMobil — Interior pushes to increase drilling fees

Welcome to Monday's Overnight Energy & Environment, your source for the latest news focused on energy, the environment and beyond. Subscribe here: thehill.com/newsletter-signup.

Today we're looking at the Interior Department's long-awaited report, what President Biden's fiscal appointments mean for environmentalists and an increase in European greenhouse gas emissions this spring.

For The Hill, we're Rachel Frazin and Zack Budryk. Write to us with tips: rfrazin@thehill.com and zbudryk@thehill.com. Follow us on Twitter: @RachelFrazin and @BudrykZack.

Let's jump in.

Higher drilling fees recommended

A long-awaited report from the Interior Department released over the holiday weekend recommends taking steps to increase fees for drilling on public lands, arguing that taxpayers are currently being shortchanged.

The department says that the Bureau of Land Management (BLM) should carry out several policies that increase these rates.

Drilling on public lands represents 7 percent of domestically produced oil and 8 percent of domestically produced natural gas.

But not all of the report is so clear-cut: The report does not make similar concrete recommendations for offshore drilling, which accounts for 16 percent of all oil production and 3 percent of natural gas production in the U.S.

Instead, it notes that the Bureau of Ocean Energy Management is currently working on changes following a different report recommending that it ensure it is "capturing the full value" of the leases it offers. 

For both onshore and offshore drilling, the report says Interior will continue to study the best way to incorporate the cost of the planet-warming gases carbon dioxide, methane and nitrous oxide - but it didn't lay out specific steps that would be taken.

The burning of fossil fuels, including oil and gas, is the main driver of climate change. 

The report, which was originally slated for an "early summer" release that didn't materialize, is expected to inform the administration's future oil and gas leasing policies.

So what is it calling for? Specifically, the report calls on BLM, which governs public lands drilling, to raise minimum royalties paid for onshore oil and gas leases, increase minimum bids that companies can make on tracts of land and rental rates that companies pay before they begin producing oil and gas on the leased lands.

Read more about the report here.

A MESSAGE FROM EXXONMOBIL

Carbon capture and storage. One way we're helping reduce emissions.

Industry and power generation account for nearly two-thirds of global CO2 emissions. At ExxonMobil, we're collaborating on some of the world's largest carbon capture and storage projects to help reduce industrial emissions at scale.

Progressives eye future Fed pick 

President Biden is under fresh pressure from climate activists after rejecting their push to replace Federal Reserve Chair Jerome Powell.  

Biden announced last week he would renominate Powell, a Republican first appointed to the role by former President Trump, to another four-year term leading the Fed board despite intense pressure from the left. He also tapped Fed Governor Lael Brainard, the only Democrat on the bank's board, to serve as vice chair.

Powell is generally aligned with Biden on the best way to foster a full recovery from the pandemic-driven recession and has key allies in both parties. But his support for looser financial regulations and refusal to turn the screws on the fossil fuel industry turned many progressive lawmakers and climate groups against his renomination.

So what's next? Spurned by Powell's reappointment, that broad progressive coalition is now pushing Biden to nominate a Fed vice chair of supervision who will fight the risk a changing climate poses to the financial sector and push banks away from financing projects that could exacerbate the problem. 

The role "is extremely important, possibly even more important than the chair" when it comes to the kinds of actions that can help insulate the financial system from the risk of a changing climate and energy sector, said Ilmi Granoff of the advocacy group ClimateWorks.

Read more about the issue here.

EU EMISSIONS JUMP AMID REOPENINGS

The European Union's greenhouse gas emissions rose 18 percent in the spring of 2021 compared to the same period last year, as coronavirus-related lockdowns gradually eased, according to EU statistics released Monday.

Between April and June, the EU released 867 million metric tons of greenhouse gases, according to data from Eurostat, the EU's statistical office. Although this represented an increase from the second quarter of 2020, it was also the lowest level of any pre-pandemic quarter, according to Eurostat.

Construction and manufacturing produced the bulk of the greenhouse gas emissions for the quarter, at 34 percent. Electricity comprised 19 percent, while agriculture made up 14 percent and transport services made up 8 percent. Non-transport services comprised the remaining 8 percent.

Nearly all of these statistics represented a sector-by-sector increase from the second quarter of the previous year, according to Eurostat. Household heating-based emissions increased 42 percent, while manufacturing/construction emissions rose 22 percent. Individual households' transportation emissions also increased 25 percent during the quarter. Transportation service emissions increased 18 percent, while electricity supply emissions increased 17 percent.

Read more about the statistics here.

WHAT WE'RE READING

 

ICYMI

Offbeat and off-beat: The other strategic reserve

A MESSAGE FROM EXXONMOBIL

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 Tuesday.

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