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INTO THE THICK OF IT: Just like his predecessor, President Joe Biden is caught between two factions of his party battling over the future of the long contentious Renewable Fuel Standard.
Both sides of the fight — corn-state Democrats and biofuels producers versus labor unions and Democrats from heavy refining states — had initially been waiting to see how the Biden administration might approach the federal biofuels blending law.
The Trump administration left office leaving the RFS largely in limbo, punting decisions to set the next year of compliance obligations and declining to participate in the legal fight over exemptions for small oil refineries.
Now, the fight is breaking out into the open, as prices for RFS compliance credits (known as Renewable Identification Numbers, or RINs) have skyrocketed in recent weeks. The American Fuel and Petrochemical Manufacturers said in new projections this morning that RFS compliance costs for 2021 could reach an all-time high, exceeding $30 billion.
Democratic politicians from refining states, including the governors of Pennsylvania and Louisiana and Delaware Democratic Sens. Tom Carper and Chris Coons, are asking the Biden EPA for relief. Labor unions, including the influential North American Building Trades Unions that Biden fought to win over during the campaign, are echoing those calls, saying the higher costs could force facilities to close and jeopardize jobs and fuel security.
“The EPA understands that something’s got to give here. We cannot continue on this same path,” said Derrick Morgan, senior vice president of federal and regulatory affairs for the American Fuel and Petrochemical Manufacturers.
“The career folks that manage the program through administrations and who often have to adjust to the political realities, I’m hoping that they prevail in the conversation and that relief is able to be granted,” Morgan told reporters on a press call this morning.
Biden has an additional pressure, however: Corn-state Democrats and biofuels groups, in their own push, say any relief the Biden administration would offer small oil refineries would be a giveaway to the fossil fuel industry.
And while former President Donald Trump often sought to help the oil industry, Biden has set out aggressive climate change goals that would push the United States to rely less on oil and more on lower carbon energy.
Corn-state Democrats are stressing that connection, arguing that offering relief to oil refiners would contradict Biden’s climate goals.
“Exempting refiners of their obligations to blend biofuel would mean increased reliance on oil and more carbon emissions – a result this country cannot afford if we are to meet our new commitment under the Paris Agreement to reduce emissions by 50 – 52 percent by 2030,” more than a dozen corn-state Democrats wrote in a letter this week to EPA Administrator Michael Regan and National Economic Council director Brian Deese.
Whatever initial decision the Biden administration makes on the RFS will be closely scrutinized, and it will set the tone for the battle over the program that Biden will undoubtedly remain caught in the middle of, especially as the future of the RFS is less scripted by law after 2022.
Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Josh Siegel (@SiegelScribe) and Abby Smith (@AbbySmithDC). Email [email protected] or [email protected] for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.
A NEXT OFFSHORE WIND MILESTONE: The Biden administration’s next offshore wind milestone is likely to involve the 2.6 gigawatt, 180-turbine offshore wind project Dominion Energy is proposing off the shores of Virginia Beach.
Officials with the utility say they are imminently expecting the Bureau of Ocean Energy Management to release a notice of intent for their project, which would offer the public a chance for input on the utility’s plans and start the environmental review necessary for final approval.
If all goes well, Dominion expects BOEM to issue a draft environmental impact statement in June 2022, finalize its review in June 2023, and approve the project a few months later, Scott Lawton, Dominion’s director of generation environmental business support, told reporters on a boat trip out to see the utility’s two pilot turbines this week.
Dominion’s two pilot turbines each stand taller than the Washington Monument, together generating enough electricity to power 3,000 homes. The commercial project, currently the largest proposed offshore wind project in the country, could power up to 660,000 homes, and the 180 turbines will each stand 200 feet taller than the pilot project.
More from Abby’s trip out to sea and how Dominion’s project fits with the Biden administration’s clean energy goals in her story for next week’s Washington Examiner magazine.
MORE EVIDENCE OF DRILLING RETURN: Active well service rigs have reached the highest number since the onset of the pandemic, according to data compiled by the Energy Workforce & Technology Council.
The active well service rig count has more than doubled since a pandemic-low of 456 in April 2020 to 936 rigs. But it remains 10.5% below the pre-pandemic amount of 1,046 rigs in February 2020.
The oil and gas service history was especially hit hard during the pandemic. Service rig activity is a key indicator of oil and gas production.
After a new oil or natural gas well is drilled, a service rig is used to complete the well by laying down pipe through a process called well completion.
The increase in service rig activity comes as U.S. crude production increased to 11.2 million barrels per day over the last two weeks, the highest total since May 2020.
READY FOR RECONCILIATION? As Democrats begin preparing a $6 trillion reconciliation package, according to numerous reports, a majority of voters support passing Biden’s agenda through the party-line process, a new poll shows.
The survey from the liberal Data for Progress and Invest in America found that 56% of voters, including a plurality of Independents, favor Congress using reconciliation to pass Biden’s climate-heavy American Jobs Plan and his American Families Plan, which focuses on investments in education, childcare and paid family leave.
The web survey of 1,175 likely voters conducted in June described the American Jobs Plan in favorable terms.
It called the plan a “proposal to spend $2.25 trillion over eight years to create millions of jobs by investing in infrastructure, such as roads, bridges, drinking water systems, and electric grids, lowering the cost and improving the quality of long-term care for seniors and people with disabilities, and promoting American manufacturing.”
REGAN PICKS NEW EPA CLEAN AIR ADVISERS: Regan announced yesterday the newest slate of members for the EPA’s Clean Air Scientific Advisory Committee, or CASAC, refilling the panel after he dismissed all of the members appointed by the Trump administration earlier this year.
Regan reappointed two members who he previously dismissed when he cleared the CASAC panel: James Boylan, the assistant branch chief of air protection in the Georgia Department of Natural Resources, and Mark Frampton, a professor emeritus in medicine at the University of Rochester Medical Center.
To chair the CASAC, Regan chose Elizabeth (Lianne) Sheppard, a professor of environmental and occupational health sciences and biostatistics at the University of Washington. Sheppard formerly served on the CASAC from 2015 to 2018.
Chris Zarba, a former director of the EPA’s Scientific Advisory Board, said Regan’s slate of appointments is “extremely well qualified” and “diverse.” Regan, in a rare move in March, dismissed the entire CASAC and Scientific Advisory Board in a bid to reconfigure the panels following Trump administration appointments that critics said packed the panels with industry representatives.
The EPA also formally announced it will seek nominations for an expert panel to support the CASAC’s study of particulate matter pollution. The Trump administration had disbanded that panel of independent experts.
The Rundown
Chicago Tribune 2 more coal-fired power plants shutting down amid debate over Pritzker’s clean energy plan
Financial Times Seven states, 3,000 miles: a trip across the US energy divide
Wall Street Journal West risks blackouts as hydroelectric power dries up
Bloomberg Methane leak at 395 tons an hour Is linked to Russian pipeline
Calendar
WEDNESDAY | JUNE 23
2 p.m. 366 Dirksen. The Senate Energy and Natural Resources Committee’s energy subcommittee will hold a hearing to examine existing programs and future opportunities to ensure access to affordable, reliable, and clean energy for rural and low-income communities.
THURSDAY | JUNE 24
9:30 a.m. 366 Dirksen. The Senate Energy and Natural Resources Committee will hold a hearing to examine the infrastructure needs of the U.S. energy sector, western water and public lands.
10 a.m. 406 Dirksen. The Senate Environment and Public Works Committee will hold an oversight hearing entitled, “The Role of Natural and Nature-Based Features in Water Resources Projects.”
