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The GOP says no to the jobs and growth of the future.
The Republican-controlled House is struggling to figure out what to do with its control of the chamber. GOP representatives are sure they want to take the debt ceiling hostage, but they have thus far presented no list of demands because they can’t agree on what they want.
However, they did recently pass an energy policy bill, in the form of a repeal of several provisions of President Biden’s signature Inflation Reduction Act (IRA), plus some deregulation of environmental protections. It would delete the EPA’s $27 billion Greenhouse Gas Reduction Fund as well as a new incentive for efficient appliances, and remove new fees on oil and gas drillers. Many parts of the environmental review process would be removed (as compared to Democrats, who want to speed it up with more money and staffing).
In short, it would increase production of carbon fuels, delay the energy transition, cause more environmental damage, and harm the green energy industry. The package is dead on arrival in the Senate, and President Biden has already promised to veto it as well. But it’s still a good window into the thinking, or more specifically the incoherent oppositional defiance disorder attempting to resemble thinking, that dominates the Republican worldview.
The bill is so senseless that many of the backfilled arguments from Republicans in favor of it can be read, verbatim, as criticisms. Representative Bruce Westerman of Arkansas, chair of the Natural Resources Committee, claimed that his bill would reverse the damage of the IRA, which has caused “more dependence on the worst polluters in the world.”
Yet this is precisely what the Republican bill would accomplish. As I have previously written, the bender of oil and gas infrastructure construction under Obama and Trump got America hooked on cheap oil and natural gas — which put us all at the mercy of global market trends, even for natural gas thanks to rapid construction of liquified natural gas (LNG) export terminals. Big fossil fuel companies don’t frack Pennsylvania and Texas into Swiss cheese out of some sense of patriotic duty. If they can make a nickel shipping that gas to Europe where the price is higher, they will do it, and have done so over the past year because Putin cut back gas supplies to the continent.
If the U.S. had conducted a crash energy transition during the 2010s, accelerating the rollout of zero-carbon electricity, industrial processes, electric vehicles, and so on, today it would have a lot less dependence on foreign sources of energy controlled by insane dictators. It follows that slowing down the transition would directly benefit Vladimir Putin and Mohammad bin Salman. Europe has learned the same lesson even more painfully (though to their credit they are making up for lost time).
Then there is the international angle. “We just found that a majority of [Democrats] are so extreme that they would rather stand with China and Russia than with the American energy worker,” said Speaker of the House Kevin McCarthy. The IRA will “wreck our own economy, sending our wealth and jobs overseas,” said Westerman. But the explicit intention of the IRA is to stand up a cutting-edge clean technology and energy sector in America itself and in friendly countries. China currently dominates most of this sector thanks in part to mercantilist policies and savvy past investments. The IRA is designed to change the dynamic, so as to reduce dependency on a hostile dictatorship, create jobs in the U.S., and increase redundancy in the supply chain.
More broadly, it’s obvious that the technological frontier for the next couple decades will be all about harnessing green energy. Wind and solar are now the cheapest energy source in human history, which is opening up new innovative possibilities in core industries that were thought to be mature decades ago. We’ve got new companies combining dirt-cheap renewable energy with clever new processes to produce zero-carbon steel, sucking carbon dioxide out of the air and putting it in concrete, and revolutionizing everything from paper to food production to smelting with renewable-powered thermal batteries — and this new industrial revolution has barely gotten started.
This kind of thing is going to be where the growth and jobs of the future are created. If all goes well, the IRA will put the United States and its allies at the forefront of real technological innovation — as opposed to over-hyped Silicon Valley garbage — with attendant domestic production and jobs.
But if Republicans win power anytime soon, they’ll likely tear it all up. While this current bill doesn’t repeal the tax credits that are the core of the IRA, the GOP is clearly gunning for them. Republican Representative Andy Ogles of Tennessee has introduced a bill repealing the entire thing. “It’s the beginning of starting to roll back some of those things,” his colleague Jeff Duncan, Republican congressman of South Carolina, told E&E News. “It’s the first bite of the apple here … it’s just the beginning.”
The underlying premise of the GOP’s position here is that Biden, no doubt influenced by a Soros-led Cultural Marxism conspiracy, has strangled American oil and gas production to punish red-blooded Real Americans who have no choice but to drive MRAPs to work. The reality, once again, is the exact opposite. Under Biden, America remains the largest producer of oil and gas in the world, and he has approved drilling leases on federal land faster than Trump did — including the huge Willow project in Alaska most recently.
To be clear, this is bad for the reasons detailed above. One would think the fact that Republicans give Democrats no credit for doing what they want, and instead accuse them of doing the opposite, might prompt Democrats to stop appeasing them, but never mind.
It’s honestly a bit baffing why Republicans are so resistant to the technology of the future, given how much of the new investment is going into red states. At a guess, it’s down to Republicans’ long history of climate denial, belief that renewable energy is hippie stuff, reflexive opposition to everything Democrats do regardless of what it is, and above all their increasing lack of traditional policy goals. The party is frantic with excitement over vindictive culture war red meat like stomping on LGBT people, banning books, and installing Donald Trump as president for life, but their eyes glaze over when anyone starts talking about the electric grid.
In any case, for now the Inflation Reduction Act is secure. But Democrats shouldn’t sit on their hands. In recent poll commissioned by Heatmap, 63 percent of respondents — including 53 percent of Democrats — said they knew “not much” or “nothing” about the IRA. Forty-five percent had no idea about the clean vehicle credit, 50 percent of the residential clean energy credit, and 44 percent of the energy efficiency credit. Clean energy policies are popular, but only if people know they exist.
If more is done to publicize the IRA, in time perhaps Republicans will come to accept what’s best for the country.
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The Environmental Protection Agency just unveiled its argument against regulating greenhouse emissions from power plants.
In federal policymaking, the weight of the law can rest on a single word. When it comes to reducing planet-warming emissions from the power sector, that word is “significantly.” The Clean Air Act requires the Environmental Protection Agency to regulate any stationary source of emissions that “causes, or contributes significantly to, air pollution which may reasonably be anticipated to endanger public health or welfare.”
The EPA has considered power plants a significant source of dangerous greenhouse gases since 2015. But today, Trump’s EPA said, actually, never mind.
A proposed rule published in the Federal Register on Wednesday argues that U.S. fossil fuel-fired power plants make up “a small and decreasing part of global emissions” and therefore are not significant, and do not require regulation under the law. The rule would repeal all greenhouse gas emission standards for new and existing power plants — both the standards the Biden administration finalized last year, which have been tied up in court, as well as the standards that preceded them, which were enacted by Obama in 2015.
In a separate proposal, the EPA also took steps to repeal limits on mercury and hazardous air pollutants from coal plants that were enacted last year, reverting the standard back to one set in 2012.
The argument that U.S. power plants make up a small sliver of global emissions and thus aren’t worth addressing is like having “a five-alarm fire that could be put out if you send out all the trucks, and you don’t send any of the trucks because no one truck could put the fire out by itself,” David Doniger, a senior attorney and strategist at the Natural Resources Defense Council, told me. “We just think that is a wacky reversal and a wacky interpretation of the Clean Air Act.”
When you add up every plug, power button, and light switch across the country, electricity usage produces 25% of U.S. greenhouse gas emissions each year. Over the past 30 years, American power plants have contributed about 5% of the total climate pollution spewed into the atmosphere worldwide.
In the global context, that may sound small. But in a recent report titled “The Scale of Significance," New York University’s Institute for Policy Integrity estimated that if U.S. power plants were a country, it would be the sixth biggest emitter in the world, behind China, the European Union, India, Russia, and the remainder of U.S. emissions. The report also notes that U.S. actions on emissions make other countries more likely to follow, due to technological spillovers that reduce the cost of decarbonization globally.
In addition to the significance finding, the EPA gave two other reasons for repealing the power plant rules. It argued that “cost-effective control measures are not reasonably available,” meaning there’s no economic way to reduce emissions at the source. It also said the new administration’s priority “is to promote the public health or welfare through energy dominance and independence secured by using fossil fuels to generate power.”
The first argument is an attempt to say that Biden’s standards flouted the law. In 2022, the Supreme Court ruled that the EPA could not simply tell states to reduce emissions from the power sector, which is what the Obama administration had initially tried to do. Instead, the agency would have to develop standards that could be applied on a plant-by-plant basis — so long as those rules were “cost-reasonable” and “adequately demonstrated.”
To comply with that ruling, Biden’s EPA based its standards on the potential to install carbon capture technology that can reduce flue gas emissions by 90%. The regulations would have required existing coal plants to install carbon capture by 2039, or else shut down. (To the chagrin of many energy system observers, the administration chose not to apply limits to existing gas-fired power plants.) But while fossil fuel companies and utilities had, in the past, asserted that carbon capture was viable, they deemed the standards impossible to meet.
Trump’s EPA is now agreeing. “In 2024,” Zeldin said on Wednesday, “rules were enacted seeking to suffocate our economy in order to protect the environment, to make all sorts of industries including coal and more disappear, regulate them out of existence.”
When Trump moved to overturn Obama’s power plant regulations during his first term, his EPA did not contest the significance of the sector’s emissions, and simply enacted a weaker standard. A week before he left office, the agency also finalized a rule that set the threshold for “significance” at 3% of U.S. emissions — which exempted major polluters like refineries, but still applied to power plants.
This time, Trump has a new apparent game plan: Strip the Clean Air Act of its jurisdiction over greenhouse gases altogether. Today’s action was the first step; EPA Administrator Lee Zeldin has said the agency will similarly “reconsider” emissions rules for cars and oil and gas drilling. But the cornerstone of the plan is to reverse what’s known as the “endangerment finding” — the 2009 conclusion that greenhouse gases present a threat to public health and welfare, and therefore are one of the pollutants EPA must address under the Clean Air Act.
“The Trump administration is trying to say, don’t worry about the Clean Air Act. It will never apply, so you can go back to your old ways,” said Doniger. But if the argument that power plant emissions are insignificant is a stretch, appraising greenhouse gas emissions as benign is inconceivable, he said. “The endangerment finding was based, in 2009, on a Denali-sized mountain of evidence. Since then, it’s grown to Everest-size, so there’s no way that they would be able to put together a rational record saying the science is wrong.”
These highly technical questions of whether emissions are “significant” or whether carbon capture is “adequately demonstrated” could soon be determined by a group of people who lack both the expertise to answer them and the inclination to wade through thousands of pages of atmospheric science and chemical engineering documents: judges.
Last year, the Supreme Court overturned a long-held precedent known as Chevron deference. That ruling means that the courts are no longer required to defer to an agency’s interpretation of statute — judges must make their own determinations of whether agencies are following the intent of the law.
When environmental groups begin challenging the EPA’s repeals in court, judges are “going to be bombarded with the need to make these highly technical, nuanced decisions,” Michael Wara, a lawyer and scholar focused on climate and energy policy at Stanford University, told me. He said the reason Chevron deference was established in the first place is that judges didn’t want to be making engineering decisions about power plants. “They felt extremely uncomfortable having to make these calls.”
The conservative Supreme Court overturned the precedent because of a sense that political decisions were being dressed up in scientific reasoning. But Wara doesn’t think the courts are going to like being put back into the role of weighing technical minutia and making engineering decisions.
“It’s a past that the courts didn’t like and they tried to engineer a way out of via the Chevron doctrine,” he said. “I would expect that we’re going to see a drift back toward a doctrine that looks a little bit more Chevron-like, maybe less deference to agencies. But it’s hard to predict in the current environment what’s going to happen.”
Look more closely at today’s inflation figures and you’ll see it.
Inflation is slowing, but electricity bills are rising. While the below-expectations inflation figure reported by the Bureau of Labor Statistics Wednesday morning — the consumer price index rose by just 0.1% in May, and 2.4% on the year — has been eagerly claimed by the Trump administration as a victory over inflation, a looming increase in electricity costs could complicate that story.
Consumer electricity prices rose 0.9% in May, and are up 4.5% in the past year. And it’s quite likely price increases will accelerate through the summer, thanks to America’s largest electricity market, PJM Interconnection. Significant hikes are expected or are already happening in many PJM states, including Maryland,New Jersey,Delaware, Pennsylvania, and Ohio with some utilities having said they would raise rates as soon as this month.
This has led to scrambling by state governments, with New Jersey announcing hundreds of millions of dollars of relief to alleviate rate increases as high as 20%. Maryland convinced one utility to spread out the increase over a few months.
While the dysfunctions of PJM are distinct and well known — new capacity additions have not matched fossil fuel retirements, leading to skyrocketing payments for those generators that can promise to be on in time of need — the overall supply and demand dynamics of the electricity industry could lead to a broader price squeeze.
“Trump and JD Vance can get off tweets about how there’s no inflation, but I don’t think they’ll feel that way in a week or two,” Skanda Amarnath, executive director of Employ America, told me.
And while the consumer price index is made up of, well, almost everything people buy, electricity price increases can have a broad effect on prices in general. “Everyone relies on energy,” Amarnath said. “Businesses that have higher costs can’t just eat it.” That means higher electricity prices may be translated into higher costs throughout the economy, a phenomenon known as “cost-push inflation.”
Aside from the particular dynamics of any one electricity market, there’s likely to be pressure on electricity prices across the country from the increased demand for energy from computing and factories. “There’s a big supply adjustment that’s going to have to happen, the data center demand dynamic is coming to roost,” Amarnath said.
Jefferies Chief U.S. Economist Thomas Simons said as much in a note to clients Wednesday. “Increased stress on the electrical grid from AI data centers, electric vehicle charging, and obligations to fund infrastructure and greenification projects have forced utilities to increase prices,” he wrote.
Of course, there’s also great uncertainty about the future path of electricity policy — namely, what happens to the Inflation Reduction Act — and what that means for prices.
The research group Energy Innovation has modeled the House reconciliation bill’s impact on the economy and the energy industry. The report finds that the bill “would dramatically slow deployment of new electricity generating capacity at a time of rapidly growing electricity demand.” That would result in higher electricity and energy prices across the board, with increases in household energy spending of around $150 per year in 2030, and more than $260 per year in 2035, due in part to a 6% increase in electricity prices by 2035.
In the near term, there’s likely not much policymakers can do about electricity prices, and therefore utility bills going up. Renewables are almost certainly the fastest way to get new electrons on the grid, but the completion of even existing projects could be thrown into doubt by the House bill’s strict “foreign entity of concern” rules, which try to extricate the renewables industry from its relationship with China.
“We’re running into a set of cost-push dynamics. It’s a hairy problem that no one is really wrapping their heads around,” Amarnath said. “It’s not really mainstream yet. It’s going to be.”
In some relief to American consumers, if not the planet, while it may be more expensive for them to cool their homes, it will be less expensive to get out of them: Gasoline prices fell 2.5% in May, according to the BLS, and are down 12% on the year.
Six months in, federal agencies are still refusing to grant crucial permits to wind developers.
Federal agencies are still refusing to process permit applications for onshore wind energy facilities nearly six months into the Trump administration, putting billions in energy infrastructure investments at risk.
On Trump’s first day in office, he issued two executive orders threatening the wind energy industry – one halting solar and wind approvals for 60 days and another commanding agencies to “not issue new or renewed approvals, rights of way, permits, leases or loans” for all wind projects until the completion of a new governmental review of the entire industry. As we were first to report, the solar pause was lifted in March and multiple solar projects have since been approved by the Bureau of Land Management. In addition, I learned in March that at least some transmission for wind farms sited on private lands may have a shot at getting federal permits, so it was unclear if some arms of the government might let wind projects proceed.
However, I have learned that the wind industry’s worst fears are indeed coming to pass. The Fish and Wildlife Service, which is responsible for approving any activity impacting endangered birds, and the U.S. Army Corps of Engineers, tasked with greenlighting construction in federal wetlands, have simply stopped processing wind project permit applications after Trump’s orders – and the freeze appears immovable, unless something changes.
According to filings submitted to federal court Monday under penalty of perjury by Alliance for Clean Energy New York, at least three wind projects in the Empire State – Terra-Gen’s Prattsburgh Wind, Invenergy’s Canisteo Wind, and Apex’s Heritage Wind – have been unable to get the Army Corps or Fish and Wildlife Service to continue processing their permitting applications. In the filings, ACE NY states that land-based wind projects “cannot simply be put on a shelf for a few years until such time as the federal government may choose to resume permit review and issuance,” because “land leases expire, local permits and agreements expire, and as a result, the project must be terminated.”
While ACE NY’s filings discuss only these projects in New York, they describe the impacts as indicative of the national industry’s experience, and ACE NY’s executive director Marguerite Wells told me it is her understanding “that this is happening nationwide.”
“I can confirm that developers have conveyed to me that [the] Army Corps has stopped processing their applications specifically citing the wind ban,” Wells wrote in an email. “As I have understood it, the initial freeze covered both wind and solar projects, but the freeze was lifted for solar projects and not for wind projects.”
Lots of attention has been paid to Trump’s attacks on offshore wind, because those projects are sited entirely in federal waters. But while wind projects sited on private lands can hypothetically escape a federal review and keep sailing on through to operation, wind turbines are just so large in size that it’s hard to imagine that bird protection laws can’t apply to most of them. And that doesn’t account for wetlands, which seem to be now bedeviling multiple wind developers.
This means there’s an enormous economic risk in a six-month permitting pause, beyond impacts to future energy generation. The ACE NY filings state the impacts to New York alone represent more than $2 billion in capital investments, just in the land-based wind project pipeline, and there’s significant reason to believe other states are also experiencing similar risks. In a legal filing submitted by Democratic states challenging the executive order targeting wind, attorneys general listed at least three wind projects in Arizona – RWE’s Forged Ethic, AES’s West Camp, and Repsol’s Lava Run – as examples that may require approval from the federal government under the Bald and Golden Eagle Protection Act. As I’ve previously written, this is the same law that bird conservation advocates in Wyoming want Trump to use to reject wind proposals in their state, too.
The Fish and Wildlife Service and Army Corps of Engineers declined to comment after this story’s publication due to litigation on the matter. I also reached out to the developers involved in these projects to inquire about their commitments to these projects in light of the permitting pause. We’ll let you know if we hear back from them.