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Here are three more questions to ask after a weird few weeks of policymaking.
Let’s start with a quick recap: In late-January, the Biden administration turned the energy world on its ear by announcing that it would pause approvals of new export facilities for liquified natural gas — a decision greeted with joy by activists and indignation by lawmakers. A few weeks later, The New York Timesreported that the administration was planning to ease up on planned regulations on car tailpipe emissions that would have pushed U.S. vehicle sales to become mostly battery-electric by 2030.
Then, on Thursday, the Environmental Protection Agency announced that it planned to delay its proposed regulations to rein in emissions from the country’s existing fleet of natural gas power plants. The administration still plans to finalize the tailpipe regulations, along with new, more stringent rules for existing coal plants and new natural gas plants on its original timeline, likely in the next few weeks. Oh, and it also launched a war on Chinese EVs.
This has left many with an understandable sense of whiplash. As the Times’ Lisa Friedman put it, “The weakening of the Biden administration’s two most ambitious climate rules would call into question the ability of the United States to meet the president’s goal of cutting United States emissions roughly in half by the end of this decade.” But … does it? There’s a lot we still don’t know about the administration’s plans, including what the new tailpipe rule will say and how the EPA will approach revising those gas plant regulations.
Here are a few more questions to consider.
Climate advocates were dissatisfied with the EPA’s original proposal for existing natural gas plants. The Natural Resources Defense Council estimated, based on EPA’s analysis, that the rules for existing plants accounted for only about 20% of the proposal’s overall emission reductions. Along with groups like Clean Air Task Force and Evergreen Action, the NRDC was concerned that the majority of gas plants weren’t covered by the rule, and that the compliance timeline was too slow. Others, including the Center for Biological Diversity and Earthjustice, were concerned about the rule’s reliance on carbon capture and the lack of restrictions on other emissions of concern from gas plants, like methane and nitrous oxide.
Industry, for its part, also didn’t like it. The Edison Electric Group, the main trade group for electric utilities, argued that the technological fixes the EPA was proposing to reduce emissions from existing plants — either carbon capture or a blend of clean hydrogen and natural gas — were not mature enough and therefore that the rule was not achievable.
In justifying the decision to delay, EPA administrator Michael Regan sent mixed signals. In an interview with Bloomberg, Regan said it was a way to achieve both “more flexibilities” and “more pollution reduction.” The first reads as an appeal to industry, the second to environmentalists.
Groups from both sectors claimed the news as a victory. The American Petroleum Institute’s president of policy, economics and regulatory affairs, Dustin Meyer, welcomed the delay, stressing the gas fleet’s importance to grid reliability as electricity demand grows. Emily Sanford Fisher, executive vice president for clean energy at the Edison Electric Institute, told the Washington Post, “we appreciate that EPA has acknowledged our concerns.” Meanwhile, Earthjustice seemed to take to heart the EPA’s pledge to make the rule tougher on toxic, non-carbon pollutants like formaldehyde. The group’s president, Abigail Dillen, called it a “more ambitious strategy.”
It’s hard to imagine how the EPA could make the rule tougher on pollution while also making it more flexible. In reality, what the delay could achieve is no rule at all.
Not all environmental groups are optimistic. The Sunrise Movement accused Biden of “caving to pressure from the gas lobby” and said the delay leaves the fate of power plant regulations up to the results of the upcoming election. Frank Sturges, an attorney at Clean Air Task Force, said in a press release that he was “extremely disappointed” by the news. The group estimates that the share of power plant emissions from gas plants will nearly double by 2040 without the regulations. “The shot clock is winding down for reducing power plant emissions, and rather than taking the shot to eliminate emissions from existing gas plants, EPA has chosen to sit on the bench,” Sturges said. — Emily Pontecorvo
It’s easy to forget about the non-presidential races during a presidential election year. But it is House and Senate elections in states like Ohio, Montana, Arizona, West Virginia, and Maine that might actually be the best predictors for how the country moves forward — or doesn’t — in the green energy transition.
The EPA’s decision to delay some of its power plant regulations appears to be at least partially a concession to these imperiled Democrats, even as the Biden administration has tried to play up its climate bona fides to general election voters. In December, five senators — Ohio’s Sherrod Brown, West Virginia’s Joe Manchin, Arizona’s Mark Kelly and Kyrsten Sinema (an Independent who caucuses with the Dems), and Montana’s Jon Tester — signed a letter opposing the EPA’s power plant emission rule, calling it a threat to jobs as well as the price and reliability of electricity, concerns that are common among centrist voters.
The letter isn’t just grumbling among the ranks; these are critical stakes. Intelligencer has described the 2024 Senate race as “the best for the GOP in living memory,” in part thanks to Manchin's impending retirement. If Democrats only lost the West Virginia seat and Trump won the election, the GOP would win the Senate majority with a vice-president-tie-breaking 50-50 split.
And that’s the best case scenario for climate policy in the event of a Biden loss. Democrats are defending three total seats in states that Trump carried in 2020 (Ohio, West Virginia, and Montana, which he won by 16 points) plus five others in states that Biden won, but barely (like Arizona, where Sinema has yet to commit to running for reelection). Meanwhile, Brown, Tester, and possibly Sinema are all running in “toss-up” elections that could break either way. Shoring up support for them in states where the economy will likely play better than the environment among voters is good politics, even if it’s questionable climate policy.
The same dilemma exists in the House, even if seizing control of the lower chamber looks more promising for the left. Sure enough, several Democratic Representatives also sent a letter opposing the EPA rules after their Senate colleagues did, with North Carolina’s Donald Davis and Maine’s Jared Golden among the electorally threatened signatories. Marie Gluesenkamp Perez, who represents the rural southwest corner of Washington state, also faces an uphill race and has expressed disapproval of the regulations; Ohio’s Marcy Kaptur, in a Republican-leaning district, has likewise spoken publicly against them.
It was because of the 2020 Democratic trifecta that Biden was able to pass the Inflation Reduction Act and the bipartisan infrastructure bill, and it’s partially because of the 2022 flip of the House and the current 50-50 Senate that progress has ground to a halt. What happens to the climate agenda in 2026 and beyond will depend on a Biden win — but not just. — Jeva Lange
One other wildcard is what weakening the rules could mean for union support. Biden has staked his presidency on transitioning to a zero-carbon energy system — and also on meeting union demands and creating a more fair economy. While both ideas are broadly appealing to Biden’s coalition (and especially to young voters), they can sometimes come into conflict on the specifics.
Shawn Fain, the popular leader of the United Auto Workers, has repeatedly expressed concern about Biden’s support for a rapid EV transition, fearing that it will set back the legacy American automakers. That is one reason Fain initially withheld the union’s endorsement of Biden’s reelection bid.
According to the Times, Fain has also repeatedly raised the proposed rules’ stringency with White House officials. In comments filed with the EPA, the union asked that the final rule ramp up its carbon requirements at a slower rate than initially proposed.
The power plant rules could also attract some skepticism from labor. Although the International Brotherhood of Electrical Workers endorsed Biden nearly a year ago, it fought an earlier version of the EPA’s power plant rules in 2014.
Changing how labor unions feel about the rules isn’t only important to Biden’s ability to sell the rules politically; it may also help him in court. The EPA and Biden administration would much rather have the unions on their side when GOP-led states sue over the regulations, as they almost certainly will. — Robinson Meyer
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A little-noticed provision would make the payment option used by tax-exempt groups all but impossible to claim.
A little-noticed provision in the Senate tax bill will sabotage the efforts of tribes, rural electric cooperatives, and public power authorities to develop local affordable energy projects by striking a section of the Inflation Reduction Act that enabled tax-exempt groups to claim the clean energy tax credits as direct cash payments from the Treasury.
The IRA included strict domestic sourcing requirements beginning in 2026 for groups utilizing this “direct pay” option on projects larger than 1 megawatt. But the law also created exceptions for cases where domestic components were not available in sufficient quantity or quality, or would increase costs by more than 25%. The Senate bill would get rid of these exceptions.
“It just makes it unlikely for those projects to go forward — or more likely for those projects to go forward with a private developer, instead of with a public utility or a tribe or a rural co-op,” Grace Henley, a tax attorney with the Natural Resources Defense Council, told me. “And so they don’t really do anything to increase the amount of domestic material that would be used, they just hurt the projects that are seeking to invest in clean energy infrastructure for these communities to lower costs.”
Public power and tribal energy advocates warn that without the exceptions, energy development will become impossible for their constituents.
Wind and solar projects being developed by these groups are already threatened by the bill’s rapid phase-out of wind and solar tax credits and its complex rules related to using materials from China. Chèri Smith, the executive director of the Alliance for Tribal Energy, told me that Tribes face longer development timelines than the average private developer. “We have multiple stages of approval that are unique to tribal energy development,” she told me, including lengthy internal consultation processes. The changes to direct pay will put these projects further out of reach, she said.
The Alliance provides free energy development consulting services to more than 100 Tribes. Smith sent me a list of projects in Alaska Native villages, Arizona, California, and Oregon that could be killed by the tax credit changes. “Alaska Native villages face some of the highest energy costs in the country,” she said, largely due to their reliance on diesel generators. Just over a third of the Hopi Tribe in Arizona lacks access to electricity, but now multiple microgrid projects meant to close the gap are at risk. Many of the projects on the list are also doubly threatened by grant cancellations and the repeal of the Tribal Energy Loan Guarantee Program.
“The bill is particularly harmful to Tribal Nations, pulling the rug out from under projects that would strengthen their energy sovereignty and power local communities,” Democratic Senators Martin Heinrich, Ron Wyden, and Brian Schatz wrote in a joint statement on Thursday. “Together, the Tribal Energy Loan Guarantee Program and our Inflation Reduction Act’s clean energy tax credits have cleared pathways and removed significant barriers for Tribes to finance and build their own resilient energy infrastructure.”
The American Public Power Association is also sounding the alarm. John Godfrey, the group’s senior government relations director, told me that in addition to wind and solar, municipal utilities and rural electric co-ops are also considering nuclear and hydropower projects. For example, Energy Northwest, a consortium of 29 public utilities in Washington State, has plans to retrofit the Columbia Generating Station nuclear plant to increase its power output. It’s also in early stages to deploy four small, modular nuclear reactors. As my colleague Matthew Zeitlin wrote a few days ago, the governor of New York has also tasked the New York Power Authority with developing a new nuclear plant in the state.
Nuclear and hydropower “are technologies where often there is not a U.S. source, but there is a good trading partner source — Canada, Germany, Japan,” Godfrey said. By tightening the domestic sourcing requirements for direct pay, the bill would “hinder the very technologies that there’s generally a bipartisan consensus we need to be developing.”
Public utilities and electric co-ops, which serve close to 30% of electric customers in the U.S., are also unfairly singled out by the provision, he said. “If my public power utility wants to develop a project and they need a Canadian turbine, they can’t get any credit. But if a taxable corporation down the street develops exactly the same project, they can.”
“If the purpose is to encourage hydropower, that’s not a good use of resources,” he said.
Editor’s note: This story has been updated to reflect that the domestic sourcing requirements in the IRA applied to projects larger than 1 megawatt.
Senate Republicans tucked a carveout into their reconciliation bill that would allow at least one lucky renewable energy project to qualify for a major Inflation Reduction Act tax credit even after the law is all but repealed.
The only problem is, it’s near impossible to be sure right now who may actually benefit from this giveaway — and the mystery is driving me up the wall. I feel like Charlie Day in that episode of It’s Always Sunny in Philadelphia, stringing documents together and ranting like a lunatic.
The Senate bill would phase out the tech-neutral production tax credit starting next year and completely eliminate it by the start of 2028. For the past week and a half, I have been trying to solve the riddle of an exemption tucked into the language that would allow a wind or solar facility that is “part of a single project” to continue to take advantage of the tech-neutral production tax credit as it exists today, which means it would not begin to phase out until 2034.
To qualify for the exemption a project must, according to the Senate text, meet two conditions: It must produce more than 1 gigawatt of electricity, and be sited on federal lands where a “right-of-way grant or lease” had been given by the Bureau of Land Managementbefore June 16, which is the date the text was released.
Only a handful of projects in the U.S. could possibly fit that criteria. But every time I think I’ve identified one that will actually qualify, I learn a new fact that, to me, takes it out of the running.
Here’s why my head hurts so much: A renewables facility that would benefit from this language needs to be sited at least partially on federal lands. But because Trump isn’t issuing new right-of-way approvals or leases to most renewables projects right now, it likely had to get its right-of-way or its lease before he entered office. (The June 16 language feels like a bit of a red herring. Nothing that fits the other definitions has received these documents since the start of Trump 2.0.)
Then there’s another factor: The only projects that would benefit from this language are ones that haven't started construction yet. Even if a project doesn’t have all of its permits for federal land use, its developer can build stuff like roads on any connected private lands and technically meet the deadline to start construction laid out in the new legislation. The construction start date is what counts — it doesn’t matter whether a project is placed in service and provides power to the grid years later, as long as it began construction before that deadline.
Taken together, all this means that a project that would benefit from this language probably has to be sited on federal lands and hold permits already … but for some reason can’t start construction to qualify for the program.
When I first started hunting for an answer, many people — including renewables advocates, anti-wind activists, and even some Senate staff in conversations with me — speculated that the language was a giveaway to two wind projects under construction in Wyoming, Chokecherry and Sierra Madre, which together make up what would likely be the largest wind farm in the U.S. if completed. These two projects are largely sited on federal lands and received all their approvals before Trump entered office.
I understand why people are pointing at Chokecherry and Sierra Madre. They are not expected to be online before 2029, and the House version of the bill would have locked them out of the production tax credit because it added a requirement that projects be “placed in service” — i.e. actively providing power to the grid — by around that same period. Any slippage in construction might have really hurt their finances. They’re also backed by a powerful billionaire, GOP donor and live entertainment power-broker Phil Anschutz, a man who made his initial fortune partially from fossil fuels.
Except … my colleagues and I are still not convinced. That’s because it is not clear that these two projects are at any actual risk of losing the production tax credit. They have been actively under construction for a long time, and the Senate bill killed the House’s “placed in service” requirement.
Another project floated is the Lava Ridge wind farm in Idaho, which was fully permitted under Biden, is largely sited on federal lands, and would produce more power than necessary to qualify for the exception. Hypothetically, this project would be a great candidate for being a beneficiary of the bill because Trump banned work on the project via executive order amid opposition from Idaho politicians, making a carveout to get more time a worthwhile endeavor.
Except … Senate Finance Chair Mike Crapo, the lead author of the pertinent section of the Senate reconciliation bill, was one of those Idaho politicians who pushed Trump to kill Lava Ridge. Why would he give a tax break to a project he wanted dead?
Then there was my personal best guess for the beneficiary: Esmeralda 7, an expansive set of proposed solar farms in the Nevada desert that, as proposed, would produce more than 5 gigawatts of power and is largely sited on federal land. Construction can’t begin until Esmeralda 7 gets its federal approvals, and the Trump administration was expected to complete that work by mid-summer.
Except … I reported last week that the permitting process for Esmeralda 7 is now indefinitely stalled. The project is at best still months away from getting its right-of-way approvals from the Trump administration, which recently pushed back timelines for finishing reviews of other large Nevada solar projects, too.
Ultimately, it will be difficult to glean who the lobbyist giveaway here is for unless the legislators who wrote it disclose their intentions. I reached out to the communications director for Republicans on the Senate Finance Committee to try and find out, but so far I’ve gotten crickets.
It may be that this language is revised and that future changes lay out the true beneficiary. Sometimes lawmakers will put the wrong date or word into a bill and they’ll edit it on the floor before a vote, chalking it up to a drafting error.
If senators decide to add back the “placed in service” requirement to capitulate to the House, this would easily be the Chokecherry-Sierra Madre giveaway. If Republicans were to shift forward the deadline for getting a right-of-way, Esmeralda 7 would qualify. Or maybe they could change some secret third thing and a different project I hadn’t considered will be revealed as the mastermind in the shadows.
Until then, I’ll be in my basement poring over more maps and going slowly insane.
Additional reporting was provided by Emily Pontecorvo.
On resuming rare earth shipments, hurricane tracking, and EV tax credits
Current conditions: The Ohio Valley is still sweltering through the last remnants of this week’s brutal heat wave • The death toll from recent floods in South Africa has risen to 101 • It’s 90 degrees in Venice, Italy, where the world’s rich and famous are gathering for the wedding of Jeff Bezos and Lauren Sanchez.
The U.S. and China have hammered out the details of a trade deal, including an agreement that China will resume rare earth shipments to the U.S. Rare earth materials are essential for everything from planes to EVs to wind turbines. China controls most of the world’s rare earth production and halted exports in April in response to President Trump’s tariff hike, and China’s chokehold on rare earths threatened to derail trade talks between the two countries altogether. Commerce Secretary Howard Lutnick said a deal has now been “signed and sealed.” “They’re going to deliver rare earths to us,” Lutnick said, adding that the U.S. will then “take down our countermeasures.” Lutnick also indicated that Trump plans to announce further trade deals with other nations in the coming two weeks.
As climate talks in Bonn, Germany, wind down, negotiators there have agreed to increase the budget for the United Nations Framework Convention on Climate Change by 10% over the next two years to 81.5 million euros ($95.4 million). The UNFCCC runs some of the world’s largest climate negotiations and tries to ensure countries follow through on their climate commitments. Its budget is funded by government contributions. China will account for 20% of the new budget, Reuters reported. The U.S. is supposed to cover 22%, but President Trump has pulled international climate funding. Former New York Mayor Michael Bloomberg’s philanthropic arm has stepped in to cover the missing U.S. contributions. UN climate chief Simon Stiell said the budget increase was “a clear signal that governments continue to see UN-convened climate cooperation as essential, even in difficult times.”
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Hurricane forecasting is about to get a little bit more difficult. At the end of June, the federal government is going to stop distributing readings from the Defense Meteorological Satellite Program, a tool forecasters all over the world have been using to track and predict hurricane development. As retired federal meteorologist Alan Gerard told Bloomberg, this particular satellite program is unique because it lets forecasters peer inside storms and monitor for rapid intensification. As the planet warms, hurricanes are strengthening much faster than they did in recent decades. Hurricane expert Michael Lowry says the Department of Defense seems to be concerned that the satellite data poses a security concern. Its termination “will severely impede and degrade hurricane forecasts for this season and beyond, affecting tens of millions of Americans who live along its hurricane-prone shorelines,” Lowry wrote.
A group of U.S. car dealers penned a letter urging senators to “reject provisions in the budget reconciliation process that would abruptly eliminate EV-related tax credits from the Inflation Reduction Act,” warning that sudden changes would bring about market uncertainty, damage businesses, and hurt Americans. The signatories – including EV Auto, Carmax, and Caravan – instead call for a “gradual sunset” of the EV tax credits to avoid disruption to the used car market. “A multi-year transitional period would also provide the opportunity for Americans to continue adopting cleaner vehicles more affordably,” they add. The tax and budget bill put forward by Senate Republicans would end the $7,500 EV tax credit within 180 days after the law’s passage.
A report out today from the International Council on Clean Transportation estimates that the world’s private jets produced more greenhouse gas emissions in 2023 than all the flights that took off from Heathrow Airport — the world’s fourth busiest airport — that same year. Emissions from private jets increased 25% over the past decade. A few more interesting (though perhaps not surprising) tidbits from the report:
International Council on Clean Transportation
Solar power accounted for more than 10% of U.S. electrical output in April, while wind provided about 14%. As Michelle Lewis at Electreknotes, “solar is now producing more electricity than hydropower, biomass, and geothermal combined.”