With help from Josh Siegel, Anthony Adragna and Kelsey Tamborrino.
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— EPA unveiled its biofuel blending targets Tuesday, giving wins and losses to both ethanol backers and refineries.
— Senate Energy Chair Joe Manchin may still pump the brakes on reconciliation over fears the huge package may worsen inflation.
— The bipartisan Recovering America’s Wildlife Act is getting time in front of the Senate Environment and Public Works Committee today.
WELCOME TO WEDNESDAY! I’m your host, Matthew Choi. Congrats to API’s David Miller for knowing the lyrics to Girls Just Want to Have Fun: “The phone rings, in the middle of the night. My father yells ‘What you gonna do with your life?’” For today’s trivia, finish the lyrics: “Lying in my bed, I hear the clock tick and think of you. Caught up in circles, confusion is ______.” Send your tips and trivia answers to [email protected]. Find me on Twitter @matthewchoi2018.
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RENEWING THE FUEL STANDARD: EPA unveiled its long overdue biofuel blending proposals under the Renewable Fuel Standard, and it was a mixed bag for ethanol backers and refiners alike.
EPA called for retroactively lowering the blending targets for 2020 to account for the pandemic-weakened demand, but raising biofuel levels for 2022. EPA also proposed denying 65 requests for blending requirement waivers from small refiners.
The plans amount to a win-some, lose-some for both sides of the bitter battle between two politically powerful industries: farmers producing alternative fuels and blue-collar, unionized refinery workers. Like every president, Biden has committed to supporting the biofuels industry that consumes more than a third of nation’s corn crop. But he’s also been under pressure to alleviate high fuel prices going into winter amid a global energy pinch.
Farm state Democrats were happy the administration finally released its blending requirements after months of delay, but still offered some reserved criticism for lowering 2020 targets. Sens. Amy Klobuchar (Minn.), Tammy Duckworth (Ill.), Debbie Stabenow (Mich.), Dick Durbin (Ill.), Tina Smith (D-Minn.), and Tammy Baldwin (D-Wis.) issued a joint statement saying the new plan would “delay progress to achieving our climate goals” and that there “is clearly much room for improvement.”
But Republican Sen. Joni Ernst (R-Iowa) offered a sharp rebuke for the administration’s cutting the 2020 mandate, saying it was “absolutely a broken promise” by Biden.
The administration acknowledged the challenges for farmers and announced Tuesday the Agriculture Department will offer $700 million to financially assist producers and $100 million for renewable fuels infrastructure. But Ernst said flatly that the USDA funds “will not make up for it.”
The House Biofuels Caucus also knocked the 2020 reduction even as it offered tempered praise for the new proposals Tuesday, saying in a statement that “the 2022 number sets the biofuels industry on the right path moving forward. And the end of the abuse of Small Refinery Exemptions – which provide relief to oil companies at the expense of family farmers – is welcome news.” Pro’s Kelsey Tamborrino breaks down the proposals here.
RECONCILIATION TIMELINE FIGHTS: Senate Energy Chair Joe Manchin, the key centrist swing vote, doesn’t seem eager to comply with Majority Leader Chuck Schumer’s pledge to finish the Build Back Better Act by Christmas. Manchin said Tuesday “the unknown” of inflation “is much greater than the need” for Democrats to move their climate and social spending bill right now. “Utility prices are spiking. This is real. This is hurting people,” Manchin told the Wall Street Journal’s CEO Council Summit.
And broadly speaking, Manchin said, reconciliation “should never have been used for major policy change.”
Some of Manchin’s Democratic peers are sick of waiting though, with some calling for the caucus to push ahead with the bill now. Sen. Elizabeth Warren (D-Mass.) said the caucus was “down to just a small number of issues” and that key negotiators are working “around the clock” to get them ironed out.
“We want to get this thing done as quickly as possible,” Warren told reporters. “It’s time.”
TAKE IT TO THE PARLIAMENTARIAN: The Senate Environment and Public Works Committee could see its contribution to the reconciliation package go to the Senate parliamentarian as soon as today to determine whether it qualifies to be included under a budget reconciliation package, Chair Tom Carper indicated Tuesday.
Schumer has said he hopes the whole bill text will be vetted by the parliamentarian by the end of next week. Carper also said there have been some “preliminary conversations” with the parliamentarian already. That’s led to “some changes, additional changes to what the House has done.”
Carper also seemed optimistic about the methane fee, saying that he and Manchin, who has expressed reservations over the provision “had great conversations and made, I think … found some important compromises.” The latest methane fee iteration in the House reconciliation text includes $775 million to help oil and gas producers rein in their emissions and not have it immediately “happen right in their faces,” Carper said. Kelsey has more for Pros.
FWIW, during the WSJ summit Tuesday, Manchin said “our large drilling companies are doing a good job with methane. We have some smaller conventional wells we’ve got to fix.”
RAWA IN COMMITTEE: The Senate Environment and Public Works Committee is having a hearing on the Recovering America’s Wildlife Act (S. 2372 (117)) today, a popular bipartisan bill that would free up roughly $1.4 billion for state and tribal governments for fish and wildlife conservation. The Senate bill has 32 cosponsors and the House version has 137 cosponsors from both parties. Today’s hearing will feature testimony from coauthors Sens. Martin Heinrich (D-N.M.) and Roy Blunt (R-Missouri).
Wilderness conservation has recently bloomed into a point of environmental bipartisanship, with wide support on both sides of the aisle for last year’s Great American Outdoors Act (H.R. 1957 (116)). “By empowering state and local leaders, rather than relying exclusively on top-down mandates from Washington, DC, the framework set out by the Recovering America’s Wildlife Act will lead to better conservation outcomes and rebuild trust with rural communities,” Quill Robinson, American Conservation Coalition vice president of government affairs, said in a statement.
BIP PRODS THE GRID: Jigar Shah, head of the Energy Department’s loan office, is excited about the new siting authority the bipartisan infrastructure package granted the department, saying it could encourage the private sector to invest more in long-distance transmission. The law grants DOE authority to designate an area a national interest electric corridor, allowing FERC to bulldoze past state agencies to help build out long-distance transmission that could connect renewable generation to urban centers.
“I would say that all the new authorities that we have are enough to really allow the private sector to move with speed and scale” to invest in a new transmission system, said Shah during a Bipartisan Policy Center webinar on Tuesday.
But taking away transmission authority is unsurprisingly deeply unpopular among the states, and Shah acknowledged fear of souring relationships with state authorities could give the private sector pause before backing ambitious interstate projects. He urged the private sector to engage more with DOE to make sure its implementation of the infrastructure package is done effectively. “I’m not going to take responsibility if the private sector doesn’t show up,” he added. Pro’s Catherine Morehouse has more.
NOPE STREAM 2: The Biden administration expects Germany would halt the Nord Stream 2 pipeline if Russia makes a military strike deeper into Ukraine, State Department Under Secretary of State for Political Affairs Victoria Nuland said at a Senate Committee on Foreign Relations hearing. Biden also warned Russian President Vladimir Putin that the U.S. and Europe would enact “strong” financial penalties if Russia attacks its neighbor. Nuland earlier in the hearing called energy commodities “the cash cow that enables these deployments.”
Still, sanctions could be a drastic move for European countries reliant on Russian natural gas imports during the current shortages. The administration is nudging its European counterparts to focus on other import opportunities and green energy to wean off Russian gas. Ben Lefebvre has more for Pros.
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