Energy Update: Week of August 8th

Friends,

We made it!!   Both on the Senate passage of the budget recon package that includes $369B climate package and my Pelotonia 100-mile cancer charity ride in Columbus, OH.

First, the ride that so many of you have helped me on. My son Adam and I finished 103 miles on Saturday in 5 hrs, 30 minutes (riding time), riding the entire trip together and we were moving, averaging just over 20 MPH. The weather in Ohio was beautiful; warm, but slightly overcast with light winds (which was perfect); and the crowds/support/volunteers were amazing and inspirational. As Adam wrote on his Facebook page we passed a sign that said "thank you for saving my kid" while a father held up his young daughter who was cheering us on. Priceless moments filled with emotion on this ride.

Now that the ride is done (and you know we made it), I am making a final push to best my last year fundraising goal. I need about $1,000 to surpass last year so please help this great cause. Any little bit helps. To donate, please follow this link to my profile page:  https://pelotonia.org/profile/FM735496

Now to the budget/climate package. The Senate yesterday approved Democrats' energy, tax and health care plan on a party-line vote. It would invest $369 billion in renewables, electric vehicles, hydrogen, clean energy equipment manufacturing, home efficiency, and other climate programs. The measure is expected to pass the House and head to Biden's desk by early next week. I have a full analysis below with links and major details.

Even with the upcoming House action, we are still digesting the legislation and its specifics. There are a lot of questions. The entire political process is complicated: Both activists and energy industries face a complicated look at the bill with some things they like and many things they also oppose. Across the board, many companies and trade associations have mixed feelings, supporting the overall push for climate action while raising significant specific concerns over things like the corporate or international tax provisions or missing some industries. Enviro activists on the other hand are thrilled to finally get something, even though it falls well short of the goals and has lots of “Manchin-driven” provisions that are focused on fossil fuels and incentives that they will never like.

The political bottom line is that activists, progressives and even many moderates (like the SALT tax repeal crew) have all swallowed hard and decided this bill was worth it to attempt to change the current political dynamics (they might very well be correct). And while Republicans remained united in opposition, I still think had this bill not been hyper-partisan or rammed through the budget process, there are many provisions that a good portion of the Republican caucus would have supported.  And more from my colleague Liam Donavan on how with helps/hurts the politics of November.

Light events schedule this week but two Resources for the Future (RFF) events are key: Wednesday hosting a discussion of the newly, Senate-passed budget/climate legislation featuring Jesse Jenkins and John Larson and Thursday, a Policy Leadership Series event with DOE’s David Turk looking at the administration’s ongoing responses to high energy prices, policies and technologies needed to combat climate change while ensuring a just and equitable clean energy transition.  Also today and tomorrow, NAATBatt International, holds its 5^th annual, two-day in-person workshop on issues in lithium battery recycling and lifecycle management at the Michigan Union in Ann Arbor, Michigan.

Finally, probably no more reports until September given the August recess. We will report, as necessary.

Call with questions.

Best,

Frank Maisano

(202) 828-5864

C. (202) 997-5932

FRANKLY SPOKEN

“I didn't like it. But it's going to make permitting better for clean energy...It's a mixed bag."

Majority Leader Schumer on CNN’s State of the Union discussing the permitting reform that Manchin made a requirement of his signing on to the reconciliation bill. said on.

“I think there's a bipartisan lane. Those of us who want more offshore wind would like to see that permitting process improve. Western senators like [New Mexico’s] Martin Heinrich would like to see transmission permitting improved to open up western solar and wind sites. Obviously, the fossil fuel industry has its desires in all of this. I do think there’s a bill that a great many senators could support as long as it's reasonable and not a sellout for fossil fuels.”

Sen. Sheldon Whitehouse (D-R.I.) saying he could actually see a permitting package attracting lawmakers from both parties.

ON THE PODCAST

Volts Discusses Climate Agreement with Experts – In his weekly Volts podcast, host David Roberts discusses what's in the Senate’s Manchin-Schumer budget/climate bill and what people should think about it. Roberts brought back two of the earliest and most popular guests on Volts: Jesse Jenkins, Princeton professor and energy modeler, and Leah Stokes, professor of political science at UC Santa Barbara.

FUN OPINIONS

Blair: Fix the EV Tax Credit on Critical Minerals – In an opinion piece on RealClearEnergy, retired Admiral Dennis Blair, former Director of National Intelligence for President Obama, and Chairman of SAFE, writes new supply-side measures are needed to prevent China from solidifying its existing dominance of battery supply networks.    But for companies to realistically reach this important goal, these provisions must strike the right balance between high requirements and tempting incentives. In order to be eligible for the full $7,500 EV tax credit, the vehicle’s battery must meet three new standards: one for minerals, one for batteries, and one excluding foreign “entities of concern.” These requirements go in the right direction, but the pace is unrealistic. What’s needed is a ramp, not a cliff. Blair writes it will be very difficult to impossible for U.S. auto producers to meet the content requirement in the next 18 months. The infrastructure, resources, and arrangements required to achieve these major shifts in the critical mineral supply chains are still being developed. These requirements go in the right direction, but the pace is unrealistic. What’s needed is a ramp, not a cliff.

FROG BLOG

Chamber Breaks Down Energy Climate Package – In a new blog post, the US Chamber’s Global Energy Institute President Marty Durbin writes while they work to remove the harmful provisions from the latest version of the Reconciliation Bill, it is worth noting that there are parts of the bill that will advance progress on climate and energy security. The US Chamber has been consistent in our view that durable climate policy requires Congressional action, and we’ve thrown our support behind efforts that gained strong bipartisan support, including the Energy Act of 2020, the AIM Act that phases out HFC production and use, and the significant clean energy provisions of the Bipartisan Infrastructure Law. We also believe that a bipartisan “grand bargain” is within reach to both accelerate the clean energy transition and to strengthen our energy security.

FUN FACTS

• Going Nuclear: According to American Energy Society trend-spotting, the hottest energy technology right now is small modular nuclear reactors (SMRs), led in the main by the US Department of Defense:

• The US DoD has selected BWX Technologies to build "Pele," the nation’s first advanced nuclear microreactor;
• The Department of the Air Force has selected the Eielson Base in Alaska as the site of its first stationary micro-reactor;
• In 2019, Congress passed the National Defense Authorization Act (NDAA), which is just now beginning to pilot programs that will build and operate micro-reactors;
• Executive Order 13972, “Promoting Small Modular Reactors for National Defense and Space Exploration” outlines a pathway for micro-reactor development by the DoD.
• Meanwhile, Germany is giving nuclear power a second look.

THE BIG NEWS

Yesterday, the Inflation Reduction Act of 2022 passed the Senate on a party line vote of 51-50 with Vice President Kamala Harris casting the deciding vote.

After a long night of voting, featuring 39 roll calls on 44 amendments, Democrats emerged with Schumer substitute package almost entirely intact, turning back difficult GOP votes by setting upside-by-side amendments at a doomed 60 vote threshold. The only suspense came Sunday afternoon, when a weary chamber had to sort out a path forward on a late change to the 15 percent book minimum tax and its aggregation rules as it relates to private equity. Republicans and Arizona business groups spent the better part of 24 hours seeking to persuade Senator Kyrsten Sinema (D-AZ) to support a change, which she did in the form of an amendment from Senator John Thune (R-SD) that would pay for the fix by extending the cap on the state and local tax (SALT) deduction reviled by blue state Democrats. Democrats left the aggregation change, but an amendment from Sen. Mark Warner swapped the SALT offset for a two-year extension of TCJA loss limitation rules (through 2028.) With the drama resolved, the bill quickly passed, 51-50, with Vice President Kamala Harris breaking the tie.

See all filed amendments to the Inflation Reduction Act HERE (for full text and descriptions of GOP amendments click HERE).

See Majority Leader Schumer’s Amendment in Nature of a Substitute HERE.

Inflation Reduction Act of 2022

• For Inflation Reduction Act of 2022 legislative text click HERE.
• For the One-Page Summary click HERE.
• For the Tax Summary click HERE.
• For the Prescription Drugs Summary click HERE.
• For the Energy Security and Climate Change Investments Summary click HERE.
• For the Agriculture, Nutrition, and Forestry Summary click HERE.
• For a Summary of Changes to Environment and Public Works Reconciliation Title click HERE.
• For the House Build Back Better Stock Buy Back provision click HERE.

The House

The legislation will now be sent to the House where House Majority Leader Steny Hoyer (D-MD) has indicated they will vote on the legislation as soon as Friday, August 12th. Stay tuned for more details.

SALT: One of the things that make it easy for the State & Local Tax (SALT) repeal guys to suck it up is that the list of losers is far bigger the winners. Road to IRA paved with the skulls of much more popular and defensible BBB priorities. In many ways inclusion would have been trickier with a SALT revision in it. A fix for six-figure earners in high-tax states would be tough for many to swallow in this context, especially when the cap expires in a few years.

IN THE NEWS

NEPA Changes Blocked – In a 50-47 vote, Sen. Joe Manchin (D-W.Va.) teamed up with Republicans to advance a resolution to reverse the Biden administration's new National Environmental Policy Act rules requiring federal agencies to consider certain climate change impacts in agency reviews. It is unlikely that the measure will pass the House, where Democrats hold a slim majority, but the vote represents Manchin's commitment to work with Republicans to further a permitting reform deal he struck with Democrats, which helped the senator agree to their reconciliation package.

Chamber Key Votes NEPA – The U.S. Chamber has sent the following Key Vote letter on S.J.Res 55, Senator Sullivan’s Congressional Review Act resolution, which is expected to be voted on this afternoon.  The bill has 49 co-sponsors.

Vogtle Gets Green Light – Six years past the projected completion date and many billions over budget, the NRC has authorized the Vogtle Unit 3 in Georgia to load nuclear fuel and begin operation. Vogtle Unit 3 in Georgia is the first reactor to reach this point in the agency’s combined license process. SNC recently informed the agency that the company completed the inspections, tests, analyses, and acceptance criteria needed to show Vogtle Unit 3 can begin safe operations. The NRC’s decision moves Vogtle Unit 3, adjacent to the operating Units 1 and 2, near Waynesboro, Georgia, out of the construction reactor oversight program and into the operating reactor oversight process. Vogtle Unit 4 remains under construction.

Kodak to Use Film Manufacturing Machines to Make EV Batteries – Kodak is repurposing some of the expensive, high-tech machines used for manufacturing its photography film to produce batteries coatings for electric vehicles (EV). “Supercell” batteries require coating and engineering services used to manufacture 35mm film. So, with minimal retooling, Kodak's $70 million machines can produce materials needed to create batteries. Now, it’s expanding into making batteries for the exploding electric vehicle segment. But not only for EVs. Home storage batteries also rely on similar coatings and chemicals as the SuperCell EV vehicle batteries thousands of times their size. So, Kodak can apply the same techniques to creating rechargeable batteries for just about any electronic on the market. A Kodak battery is nothing new. But in the past, Kodak largely licensed its brand name to battery products that could be used in their film cameras. Becoming part of the supply chain for just about any product that requires a battery, including electric vehicles, is a whole new ballgame for the company started by George Eastman.

Freeport LNG to Restart – Under an agreement with PHMSA, Freeport LNG is set to restart some of its operations at its south Texas liquefied natural gas export facility in October, which supplies about 20% of U.S. LNG exports, after it shut down in early June because of an explosion. The initial restart will include three liquefaction trains, two LNG storage tanks and one LNG loading dock. The restart will enable the plant to deliver roughly two billion cubic feet (BCF) per day of LNG, enough for existing long-term customer agreements.

ON THE SCHEDULE THIS WEEK

Battery Workshop Set for Ann Arbor – Today and tomorrow, NAATBatt International, the trade association for advanced battery technology in North America, will hold its 5^th annual, two-day in-person workshop on issues in lithium battery recycling and lifecycle management at the Michigan Union in Ann Arbor, Michigan. The workshop program will present the latest information about the economics and technology of lithium battery recycling and reuse. Speakers will include leading experts on the economics of lithium battery recycling, the technology of lithium battery recycling, government assistance available to battery recyclers, and regulatory and legal matters related to lithium battery recycling and reuse.

Veterans Energy Forum Set – The Atlantic Council’s Global Energy Center holds its 2022 Veterans Advanced Energy Summit tomorrow morning in Chicago. The Veterans Advanced Energy Summit is a learning and networking event dedicated to veterans and military spouses working to strengthen US national security through careers in the advanced energy industry.

DOE Holds Building Webinar – The DOE’s EERE office holds a webinar tomorrow at 11:00 a.m. on “Deep” efficiency, which sets the bar high at 50% reduction in energy use-intensity for both new and retrofitted buildings. This webinar will walk through a deep energy-efficiency program that is far more impactful, permanent, and affordable than emissions offsets.

Forum to Look at WV Coal Transition – The American Security Project and the University of Charleston hold a virtual roundtable tomorrow at Noon on the critical role WV plays in the national energy discussion and how it can help enhance U.S. national security. In 2019, West Virginia was ranked fifth nationwide in total energy production, but with coal responsible for 84% of WV’s energy production, the event will look at what’s the future of clean energy in the Mountain State, and what role does WV have in enhancing climate security and national security.

Forum to look at Energy Storage Funding – The Clean Energy States Alliance and its Energy Storage Technology Advancement Partnership (ESTAP) will host DOE officials tomorrow at 1:00 p.m. to discuss funding for energy storage projects.  The newly created Office of Clean Energy Demonstrations has $1 billion for large-scale demonstration projects. This webinar will feature speakers from the national laboratories and US DOE, who will explain how and when these federal dollars will become available, who can qualify, and how to apply.

Web Event Looks at Business efforts to Net Zero – Green Biz and EDF are hosting a forum tomorrow at 1:00 p.m. to look at the business imperative of accelerating to net zero.  In this one-hour webcast, GreenBiz Senior Analyst John Davies, Managing Director of EDF+Business Elizabeth Sturcken, Microsoft’s Sustainability Chief of Staff Michelle Lancaster, and Director of the SustainAbility Institute at ERM Mark Lee will provide critical insights and perspectives on the current state of play for net zero, including gaps, needs, and successes.

Report to Discuss MISO Transmission Planning – ACORE and Grid Strategies hold a forum tomorrow at 1:00 p.m. focused on enabling clean energy and reliable service through better long-range transmission planning.  The Midcontinent Independent System Operator’s (MISO) Board of Directors recently approved 18 new transmission lines, representing the largest transmission expansion to enable low-cost clean energy in U.S. history. The event will feature an ACORE and Grid Strategies report, which examines how MISO’s evaluation of the benefits of transmission was critical in enabling that expansion. The report also compares the benefits MISO used with those suggested in the U.S. Federal Energy Regulatory Commission’s (FERC) Notice of Proposed Rulemaking (NOPR) on transmission planning.

Forum to Look at US Japan Energy Cooperation – On Wednesday at 9:00 a.m., the Wilson Center’s Asia Program holds a discussion on how to reconcile the needs of energy security with that of environmental resilience, and the role that both Japan and the United States can play in promoting bilateral and multilateral cooperation to develop the technology and infrastructure to meet the future energy needs of the Indo-Pacific.  Among the speakers is our friend Bob McNally.

WRI Forum Looks at Climate Finance – WRI holds a forum on Wednesday at 10:00 a.m. looking at sustainable landscape management in Guatemala. This event brings together stakeholders from diverse sectors to contribute to sustainable land management by sharing knowledge and resources. We will share the results with the aim of helping other landscape restoration initiatives in the region.

RFF to Discuss Senate-Passed Budget-Climate Modeling – On Wednesday at 1:00 p.m. Resources for the Future (RFF) hosts modeling experts from RFF, Energy Innovation, Princeton University’s REPEAT Project, and Rhodium Group have examined the Inflation Reduction Act of 2022 legislation’s climate and energy provisions and projected their effects on US emissions reductions and costs for US retail electricity consumers. The experts will talk about their analysis, key provisions in the legislation, and their work to inform the conversation surrounding this landmark proposal.

Forum to Look at Clean Hydrogen – On Thursday at 2:00 p.m., the National Association of State Energy Officials holds a forum on state efforts to advance a clean hydrogen economy. This webinar will be an opportunity to hear from these states about how they plan to advance clean hydrogen production through different policy and regulatory structures.

Forum to Focus on Direct Air Capture – The Electric Power Research Institute (EPRI) and US Energy Association host virtual event on Thursday at Noon on overcoming barriers to deploying direct air capture.  The workshop will provide a discussion of some of the most relevant issues for those advancing DAC as a climate solution. Keynote addresses will feature DOE’s Jen Wilcox and Prof. Klaus Lackner, an early DAC pioneer. Other speakers will include representatives from leading DAC organizations including Carbon Engineering, Climeworks, Oxy Low-Carbon Ventures, and Stripe. Three major themes will be addressed: Energy, Technology, and Project Execution. The energy session will focus on the source and impact of the energy required to power DAC installations. The technology session will compare different technology options with inherent advantages and challenges for each DAC approach and their ability to reduce costs for deployment.

RFF Hosts DOE’s Turk – On Thursday August 11^th at 3:00 p.m., Resources for the Future (RFF) for a Policy Leadership Series event with David Turk, Deputy Secretary of the US Department of Energy. RFF President and CEO Richard G. Newell will sit down with the deputy secretary to discuss the dual global energy and climate change crises. Their conversation will delve into the administration’s ongoing responses to high energy prices, policies and technologies needed to combat climate change while ensuring a just and equitable clean energy transition, and more.

Forum Looks at Communicating to Climate Issues – On Friday at 11:00 a.m., the American Security Project holds a discussion on effectively communicating the climate crisis, the history of misinformation about climate change and how to inoculate against climate disinformation. The event will feature Edward Maibach, a distinguished Professor and Director of George Mason University’s Center for Climate Change Communication, David Benac, an associate professor of environmental history at Western Michigan University and Anne Armstrong, co-author of Communicating Climate Change: A Guide for Educators.

IN THE FUTURE

WRI Forum to Look at NDCs – The World Resources Institute will holds a discussion on Tuesday August 16^th at 8:00 a.m. This webinar, hosted by the Adaptation Action Coalition, will highlight the areas of progress being made in using NDCs to advance adaptation action and the gaps that need to be addressed to accelerate action. We will hear from experts from World Resources Institute, NDC Partnership, NAP Global Network and GIZ about successes, challenges and tools that can support countries to improve and implement their NDCs from an adaptation perspective.

Forum to Look at Peaker Plants – On Tuesday August 16^th at 1:00 p.m., the Clean Energy States Alliance holds a forum to discuss a report on peaker plants.  More than 4.4 million people in urban areas in the United States live within one mile of a peaker power plant and are unnecessarily and directly exposed to air pollutants that cause significant health problems and higher incidence of premature death, according to The Peaker Problem: An Overview of Peaker Power Plant Facts and Impacts in Boston, Philadelphia, and Detroit. This report, released by Clean Energy Group with the consulting firm Strategen, examines the environmental justice and public health impacts of peaker power plants in these three U.S. cities.

Cornyn to Hold Hydrogen Workshop – On August 17^th, Sen. John Cornyn will hold a Texas hydrogen workshop. More on this soon…

Forum Look sat FERC Order 2222 – The World Resources Institute holds a forum on Thursday August 18^th looking at how local governments can benefit from DER aggregation opportunities enabled by FERC Order No. 2222. The event will highlight findings from new WRI research on how local governments can leverage DER aggregations to advance their clean energy and climate goals and will feature an expert panel discussion on the opportunities presented by this Order for local governments.

Forum to Look at Building Decarb – The GWU Security and Sustainability Forum holds a discussion on Thursday August 18^th at 1:15 p.m. on the building decarbonization. Reducing energy use and converting to renewables go a long way toward decarbonizing a building. But, energy is one system in a whole set of building systems. Focusing on the whole building has additional energy and carbon reduction payoffs. The event features Smita Chandra Thomas, the founder and principal of Energy Shrink – a Washington DC consulting practice focused on decarbonizing buildings for international, national, and local clients.