Sat, July 16, 2022
WASHINGTON (AP) — President Joe Biden is promising “strong executive action” to combat climate change, despite dual setbacks in recent weeks that have restricted his ability to regulate carbon emissions and boost clean energy such as wind and solar power.
The Supreme Court last month limited how the nation’s main anti-air pollution law can be used to reduce carbon dioxide emissions from power plants. Then late Thursday, Sen. Joe Manchin, D-W.Va., said he wants to delay sweeping environmental legislation that Democrats have pushed as central to achieving Biden's ambitious climate goals.
Biden, who has pledged to cut greenhouse gas emissions in half by 2030, compared with 2005 levels, said Friday that "action on climate change and clean energy remains more urgent than ever.''
If the Senate will not act to address climate change and boost clean energy, “I will take strong executive action to meet this moment,'' Biden said in a statement from Saudi Arabia, where he met Friday with Saudi Crown Prince Mohammed bin Salman.
Biden did not specify what actions he will take on climate, but said they will create jobs, improve energy security, bolster domestic manufacturing and protect consumers from oil and gas price increases. “I will not back down,'' he promised.
Some advocates urged Biden to use the moment to declare a national climate emergency and reinstate a ban on crude oil exports, among other steps.
Declaring a climate emergency would allow Biden to redirect spending to accelerate renewable energy such as wind and solar and speed the nation’s transition away from fossil fuels such as coal, oil and natural gas.
Climate advocates, including some of Manchin's Democratic colleagues in the Senate, said Manchin's announcement that he cannot back the climate provisions in the Senate bill — at least for now — frees Biden of the obligation to cater to a powerful, coal-state senator eager to protect his energy-producing home state. Manchin's vote is decisive in the evenly divided Senate, where Republicans unanimously oppose climate action.
"Free at last. Let’s roll. Do it all and start it now,'' tweeted Sen. Sheldon Whitehouse, D-R.I. who has long pushed stronger action on climate. “With legislative climate options now closed, it’s now time for executive Beast Mode,'' Whitehouse wrote.
Whitehouse suggested a series of actions Biden could take, including “a robust social cost of carbon rule″ that would force energy producers to account for greenhouse gas emissions as a cost of doing business. The senator also urged Biden to require major polluters to use technology to capture carbon dioxide emissions and impose stronger pollution controls on cars, light trucks and heavy-duty vehicles.
Advocates also urged Biden to reject all onshore and offshore drilling on federal lands and in federal waters — a step he promised during the 2020 campaign but has not enacted — and restrict approval of natural gas pipelines and other fossil fuel projects.
“For too long, we’ve been waiting on a single legislative package to save us and a single legislator to determine our fate,'' said Sen. Jeff Merkley, D-Ore. “Now that it’s clear legislation to address our climate crisis is dead, President Biden needs to put us on an emergency footing to address this disaster.''
Citing Biden's campaign promise to end new drilling on federal lands and waters, Merkley said, "Now is the time to show the American people he’s serious by saying ‘no’ to expanding our addiction to fossil fuels.''
Even before Manchin's apparent rejection of the climate measures, Democrats had slimmed their down their plan from about $555 billion in climate spending to just over $300 billion in a bid to secure his support. Proposed tax credits for wind, solar and nuclear energy, along with still-unproven carbon-capture technology, could reduce emissions by up to 40% by 2030, advocates said.
Manchin had already forced Democrats to drop two tax provisions he opposes: direct payments of clean energy credits and tax credits for drivers who purchase electric vehicles. Manchin forced other concessions last year, including killing a proposal that would have paid utilities that increase clean energy while penalizing those that do not.
Sen. Ron Wyden, D-Ore., chairman of the Senate Finance Committee, said he still hopes to salvage the clean energy tax provisions and said failure “really is not an option here.”
Manchin's request to postpone action on the climate measure follows a June 30 ruling by the Supreme Court, which said in a 6-3 vote that the Clean Air Act does not give the Environmental Protection Agency broad authority to regulate greenhouse gas emissions from power plants.
The ruling by the court's conservative majority likely complicates the Biden administration’s plan to manage power plant pollution, but does not eliminate its authority to regulate greenhouse gases. EPA Administrator Michael Regan has said the agency is moving forward with proposed rules for power plants in the coming months.
Ann Clancy, associate climate policy director for Indivisible, a progressive advocacy group, said it was time for Biden to "stop waiting for corporate-backed Democrats and their bad faith negotiations and deliver real wins for the American people on climate.''
"We don’t have any more time to waste,'' Clancy said.
Manchin, in a radio interview Friday, said climate activists want an immediate end to U.S. use of oil, coal and gas. "That's crazy,'' he told West Virginia talk show host Hoppy Kercheval. “I’m not throwing caution to the wind. I think we need an energy policy that works for our country.”
Matthew Daly, The Associated Press
Ben Adler
·Senior Editor
Fri, July 15, 2022
President Biden traveled to Saudi Arabia on Friday to meet with officials from the desert kingdom — which holds the world’s largest oil reserves — and is expected to meet with leaders from five other oil-producing Persian Gulf nations on Saturday, in what will be the latest in a series of moves by the Biden administration to boost oil supplies to reduce high gasoline prices.
This approach represents a significant shift for the president, who campaigned on promises to restrict domestic fossil fuel development as part of his effort to combat climate change.
Earlier this month, Biden threatened to break a campaign pledge to stop selling leases for oil and gas production offshore and on federal land when the Department of the Interior (DOI) released a proposed five-year plan for offshore oil and gas drilling that could allow new lease sales in the Gulf of Mexico and in Cook Inlet in Alaska.
President Biden is welcomed at the King Abdulaziz International Airport in Jeddah, Saudi Arabia, on Friday. (Mandel Ngan/AFP via Getty Images)
And last Friday, the administration moved toward approving a giant oil drilling project in Alaska that is opposed by climate change activists. The project, owned by ConocoPhillips and known as Willow, was previously blocked by a federal judge who ruled its environmental review did not adequately consider the effects on climate change. DOI issued a new environmental impact analysis that reviewed several options and caused opponents to fear that the administration was signaling support for the project.
“Giving the Willow Project a stamp of approval after this rushed and incomplete review process could be the kiss of death for any chance at meeting President Biden’s climate commitments,” said Lena Moffitt, chief of staff at Evergreen Action, in a statement responding to the new analysis.
Given the longtime lag between the new fossil fuel leasing and any effect on prices, experts say that none of these measures are likely to lower prices in the foreseeable future.
“There are few options in the U.S. presidential toolkit to lower fuel prices in the short term. Biden has been using the ones he has, from the wise move of selling oil from the Strategic Petroleum Reserve to the more economically questionable proposal of a federal gas tax holiday,” noted Samantha Gross, director of the Energy Security and Climate Initiative at the Brookings Institution, in a blog post published Thursday on the think tank’s website.
A sign at a gas station in Williams, Ariz., on July 6. (Bill Clark/CQ-Roll Call via Getty Images)
“The Biden administration’s decision to sell off more public lands for drilling might be good for Big Oil, but it won’t lower gasoline prices and it certainly will worsen climate chaos,” Alan Zibel, research director for Public Citizen, a consumer advocacy group, told Yahoo News. “That’s because any oil extracted from leases issued now will have no conceivable effect on today’s gasoline prices.”
Oil extraction — which requires multiple steps such as seismic testing, obtaining permits and laying out infrastructure to transport equipment and oil before the drilling can even begin — is a slow process. Offshore, to go from a lease sale to oil production takes four to 10 years, depending on factors such as water depth, the drilling depth of the reservoir below the ocean floor, the distance from shore and so on.
“The outlook for the economy is a far bigger driver of oil prices than anything the Biden administration is doing on supply,” Zibel observed, noting that fears of a recession have caused crude oil prices to recently drop below $100 per barrel, bringing average U.S. gasoline prices down by 38 cents per gallon over the last month, to $4.63.
Even Biden’s Saudi swing is unlikely to yield an increase in immediate oil production. Rather, it may be a reciprocation for OPEC’s larger-than-expected increase in oil production announced in June.
“If Biden asks for increased oil production during his trip to Saudi Arabia, he is unlikely to be successful,” wrote Gross in her post for Brookings. “Saudi Arabia and the United Arab Emirates are the only countries with spare capacity today. However, that capacity is believed to be limited and they have no motivation to increase production. Both countries are enjoying today’s high oil prices, particularly in light of a coming energy transition that will eventually erode demand.”
Processing facilities in the Khurais oil field in Khurais, Saudi Arabia, in 2021. (Maya Siddiqui/Bloomberg via Getty Images)
Despite disappointing environmentalists, Biden’s moves also have angered the oil and gas industry, which argues that the areas potentially opened to new drilling are too limited. The offshore drilling plan, for instance, would not include any new lease sales in the Atlantic, Pacific or Arctic oceans.
Fossil fuel companies also are irritated that DOI waited until the day after the previous five-year plan expired on June 30 before proposing a new one, which won’t take effect until the fall at the soonest. And they are especially concerned about the possibility that none of the areas being considered for future fossil fuel leasing will actually be opened when the final rule is issued.
“At a time when Americans are facing record high energy costs and the world is seeking American energy leadership, tonight’s announcement [on July 1] leaves open the possibility of no new offshore lease sales, the continuation of a policy that has gone on for far too long,” said Frank Macchiarola, senior vice president of policy, economics and regulatory affairs at the American Petroleum Institute (API). “Because of their failure to act, the U.S. is now in the unprecedented position of having a substantial gap between programs for the first time.”
API also would like to see oil production increased domestically rather than in the Middle East. “President Biden, on behalf of the men and women fueling America’s economic recovery, I invite you to visit America’s vast energy fields and infrastructure,” API president and CEO Mike Sommers said in a video released Thursday. “Instead of meeting with foreign governments to ask them to increase energy production, look to reliable U.S. energy sources here at home.”
Then-White House press secretary Jen Psaki at the daily press briefing on March 3. (Anna Moneymaker/Getty Images)
The animosity is mutual, as the Biden administration has blamed oil companies for holding back on increasing supply. In March, Biden’s then press secretary Jen Psaki pointed out that “there are 9,000 approved oil leases that the oil companies are not tapping into currently” and the White House released a plan for lowering gasoline prices that asked Congress “to make companies pay fees on wells from their leases that they haven’t used in years and on acres of public lands that they are hoarding without producing.”
Oil companies are booking record profits, but one Wall Street Journal analysis found that in the first quarter of this year, the nine largest U.S. oil producers spent 54% more on paying dividends and buying back shares of their companies than they invested in new oil development. On June 15, Biden sent a letter to the major oil refiners, including Marathon Petroleum, Valero Energy, ExxonMobil, Phillips 66, Chevron, BP and Shell, asking for an increase in production.
“At a time of war — historically high refinery profit margins being passed directly onto American families are not acceptable,” Biden wrote. “Your companies need to work with my Administration to bring forward concrete, near-term solutions that address the crisis.”
The oil companies were unmoved, however, noting that refinery utilization rates are already at 94.2%, the highest rate since 2019, according to U.S. Energy Information Administration data, and that expanding refining capacity would take time. They also argued that the administration’s reluctance to embrace additional federal fossil fuel leasing discourages them from investing in capacity expansion.
A crude oil collection pipeline in an oil field in Utah. (Jon G. Fuller/VWPics/Universal Images Group via Getty Images)
“Unfortunately, what we have seen since January 2021 are policies that send a message that the Administration aims to impose obstacles to our industry delivering energy resources the world needs,” wrote Chevron in a response to Biden.
But if selling more leases or imploring Saudi Arabia won’t bring down gasoline prices in the short term, what would? Some climate change activists and consumer advocates are calling for a tax on the windfall profits being enjoyed by oil companies; the federal government could then pass that money along to taxpayers.
“Last year, four fossil fuel multinational giants — ExxonMobil, Shell, Chevron, and BP — earned more than $75 billion in a single year in profits,” noted the Center for American Progress in a brief arguing for a windfall profits tax.
In March, Sen. Sheldon Whitehouse, D-R.I., and Rep. Ro Khanna, D-Calif., introduced the Big Oil Windfall Profits Tax Act, which would tax excess corporate revenue from barrels sold over the average Brent crude price between 2015 to 2019, roughly $66 a barrel. That could raise an estimated $35 billion to $40 billion per year that would be sent to consumers as relief checks.
The proposal is not as radical as it may seem. In May, Britain’s Conservative government unveiled a 25% tax on the profits of oil and gas firms that will pay for $19 billion in subsidies to low-income households struggling with the increased cost of living.
Sen. Sheldon Whitehouse. (Sarah Silbiger/Bloomberg via Getty Images)
Another possibility is using laws against price gouging to restrict price increases. A bill passed by the Democratic-controlled House of Representatives in May would give the president power to declare an energy emergency that would outlaw “excessive” increases in gasoline prices, but it has gone nowhere in the closely divided Senate due to Republican opposition.
The White House did not respond to a request for comment on what it hopes to achieve on oil supply, but expert observers see the recent moves as an effort to at least give the appearance of combating high prices.
“They’re clearly terrified of what high prices at the pump mean for Biden’s approval rating and the midterms in November,” Zibel said. “Any president in this situation would do whatever they can to either lower gasoline prices or be seen as lowering gasoline prices. These prices are not his fault, but he still has a political imperative to do anything he can to try to bring them down.”
Joe Biden Urges Democrats To Take Manchin's Offer, Punt On Climate Spending
President Joe Biden on Friday urged his party to quickly pass legislation lowering the cost of prescription drugs and health care insurance ― and to set aside the rest of his economic and climate agenda in Congress for now.
It’s a bitter blow for Democrats who had hoped to take robust action to fight climate change and expand the social safety net. But it’s one made of political necessity.
With Sen. Joe Manchin’s (D-W.Va.) opposition to new spending aimed at combatting climate change ― something he argues would contribute to record inflation ― and looming health insurance premium hikes this fall, Biden was forced to accept reality and swallow a slimmed-down bill that would give Democrats a big legislative victory ahead of November’s midterm elections.
The president urged passage of the legislation this month and pledged to take “strong executive action” to address the climate crisis.
“After decades of fierce opposition from powerful special interests, Democrats have come together, beaten back the pharmaceutical industry and are prepared to give Medicare the power to negotiate lower drug prices and to prevent an increase in health insurance premiums for millions of families with coverage under the Affordable Care Act,” Biden said in a statement issued by the White House.
“Families all over the nation will sleep easier if Congress takes this action. The Senate should move forward, pass it before the August recess, and get it to my desk so I can sign it,” he added.
The drug pricing reforms would be the biggest step in decades to address health care costs. The proposal would require Medicare to negotiate prices of some drugs directly with manufacturers, leveraging the social insurance program’s massive buying power to wring savings from drugmakers.
The new proposal would also cap a Medicare patient’s out-of-pocket expenses at $2,000 per year.
In addition to the prescription drug plan, Manchin also agreed to support a temporary, two-year extension of Affordable Care Act subsidies to help keep health insurance costs from increasing this year. Democrats worried that voters would get hit by insurance premium hikes before the election if they failed to take action.
“It’s not prudent to do the other right now,” Manchin said Friday, referring to climate provisions sought by Democrats.
Democrats reacted with shock and anger to the news that Manchin had balked on several provisions they said he had already agreed to ― at least before a historically bad consumer price spending report that was released this week.
“It’s infuriating and nothing short of tragic that Senator Manchin is walking away, again, from taking essential action on climate. The world is literally burning up while he joins every single Republican to stop strong action to cut emissions,” Sen. Tina Smith (D-Minn.) said in a statement.
Rep. Jared Huffman (D-Colo.) suggested Manchin wasn’t acting in good faith during the course of a year-long negotiation with Democrats.
“We have made concession upon concession. In response to his request, we’ve taken him at his word even as he continued to break his word. And I think now we’re at a point where we have to stop empowering this puppet of the coal industry to be his own branch of government,” Huffman said Friday, referring to Manchin’s cozy ties to the oil and gas industry.
Democrats and climate activists are calling on Biden to take a number of executive actions to tackle climate change, including by declaring a national emergency over climate. It’s unclear how much of it would survive the conservative 6-3 majority on the Supreme Court, which recently kneecapped the Environmental Protection Agency’s power to regulate greenhouse gases.
Still, executive actions could signal to voters ― especially younger ones who already hold skeptical views of Biden ― that he is committed to addressing the climate crisis.
Getting the scaled-back health care bill to Biden’s desk is no sure thing yet, either. Democrats hold a very slim majority in the House, so it only takes a few members to derail legislation. If progressives decide to reject Manchin’s offer, the party may not get anything passed before November.
Jonathan Nicholson contributed to this report.
This article originally appeared on HuffPost and has been updated.
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