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Quick Fix
— Exxon Mobil convenes its annual shareholder meeting today, and it faces an insurgency that's seeking to add four new members to its board to drive a shift in its business strategy.
— Republicans plan to reveal a $1 trillion infrastructure proposal on Thursday, but major disagreements remain with Democrats on pay-fors.
— Carbon capture is getting a legislative boost this week, with new measures intended to encourage financing of carbon removal projects.
WELCOME TO WEDNESDAY! I’m your host, Matthew Choi. Congrats to EDF's Eleanor Krahenbuhl for knowing the Andean condor is the national bird of Chile. For today’s trivia: What was the name of the Bingleys' rented Hertfordshire estate in “Pride and Prejudice”? Send your tips and trivia answers to [email protected]. Find me on Twitter @matthewchoi2018.
Check out the POLITICO Energy podcast — all the energy and environmental politics and policy news you need to start your day, in just five minutes. Listen and subscribe for free at politico.com/energy-podcast. On today's episode: Another disastrous summer looming.
Driving the Day
THE EXXON SHOWDOWN: Exxon Mobil holds its annual shareholders meeting today, and it’s looking to be a watershed moment for the company. Shareholders will vote on four board candidates proposed by Engine No. 1, a new investment fund pushing the company to diversify from fossil fuels. The candidates — Gregory Goff, Kaisa Hietala, Alexander Karsner and Anders Runevad — are all experienced energy executives and would take up a quarter of the seats on the company’s board of directors. Exxon leadership dismissed them as unqualified.
Engine No. 1 has a minor stake in Exxon — only $50 million in the $253 billion company — but it’s impact has been massive. Exxon has spent $35 million to counter Engine No. 1’s campaign. And Reuters scooped Tuesday that BlackRock, Exxon’s second-largest shareholder, plans to back three of Engine No. 1’s candidates at today’s vote. (Some activists still objected to BlackRock's reported intention to back CEO Darren Woods and independent director Kenneth Frazier).
Engine No. 1 hasn’t issued an appeal to moral obligations to save the environment. Rather, it’s presented data showing the financial implications of not redirecting further toward renewables. “For Exxon Mobil to avoid the fate of other once-iconic American companies, it must better position itself for long-term, sustainable value creation,” the investor group wrote in a presentation to investors this month.
Financial risk associated with climate change is a growing focal point both in the private sector and the Biden administration. The left-leaning Roosevelt Institute is out today with a paper urging federal regulators intervene on a wide scale to stave off climate-related market instability.
Exxon has openly pursued methods to reduce its carbon footprint — including a $100 billion carbon capture hub in Texas — and it is well placed as demand for fossil fuels rebounds following the pandemic. It also plans to add members to its board with energy and climate expertise, Axios reports. But activists argue the steps are not nearly enough, and that the global shift to renewables will leave the company in the dust.
Pro’s Lorraine Woellert previewed what's at stake at today’s meeting.
Infrastructure
NARROWING THE INFRASTRUCTURE GAP: Democrats and Republicans are inching toward a compromise on the scope of an infrastructure package, but they are still far apart on how to pay for it. Republicans plan to put out a $1 trillion proposal on Thursday, Pro’s Anthony Adragna and Kelsey Tamborrino report, narrowing the gap with the White House’s latest $1.7 trillion offer. But Republicans are adamant that they have no intention of undoing any of their 2017 tax cuts to finance it.
Biden’s self-imposed Memorial Day deadline for a compromise is less than a week away, and both House and Senate Democrats want the package squared away in July. But members on both sides of the aisle are quietly resigned to the notion that the differences are too big to overcome and that Democrats will ultimately go at it alone, .
BATTLE LINES DRAWN: Water infrastructure bill S. 914 may have been held up by Senate Democrats as a shining area of bipartisan agreement, but it’s looking increasingly unlikely that the same will be true of House Democrats’ bill.
When an Energy and Commerce Committee subpanel considered a suite of drinking water bills Tuesday, Washington Rep. Cathy McMorris Rodgers, the committee’s top Republican, had plenty of criticism for Democrats’ priorities. Assistance programs for families that can’t afford their water bills would be a “new entitlement program,” she said, and legislation to enact Biden’s goal of removing all lead service lines would be a handout to private property owners, including “wealthy Americans.” Rather than increasing federal funding for the popular State Revolving Funds, Rodgers pushed for just allowing states to put unused Covid relief dollars towards infrastructure upgrades.
Related: House Transportation and Infrastructure Democrats plan to soon mark up their measure (H.R. 1915) to boost funding for wastewater infrastructure, according to a committee aide, despite efforts by the panel’s Republicans to negotiate a more bipartisan bill. (The Democrats’ bill currently has two GOP co-sponsors — Pennsylvania Rep. Brian Fitzpatrick and New Jersey Rep. Jeff Van Drew.)
On the Hill
FINANCING CARBON CAPTURE: Sens. Michael Bennet (D-Colo.) and
If more than 65 percent of CO2 emissions are captured by a given project, then all of the eligible equipment could be financed with the bonds under the new bill. This bond funding can also be done on a prorated basis for facilities that fall under that 65 percent threshold. Read the legislation here.
Meanwhile in the House, Rep. Tim Ryan (D-Ohio) led a bipartisan effort this week to bolster 45Q tax credits for carbon capture with the Coordinated Action to Capture Harmful Emissions Act, unveiled Tuesday. The bill would increase tax credits for carbon capture by power plants and other industrial facilities, and eliminate CO2 capture thresholds for those facilities and for direct air capture projects.
WHAT’S GOING ON IN COMMITTEE: The Senate Environment and Public Works Committee is marking up surface transportation authorization today, as well as some remaining nominations. Radhika Fox is up for a vote to be EPA’s water chief, Michal Freedhoff (a former EPW staffer) to head EPA’s chemical safety and pollution prevention efforts and Shannon Estenoz for assistant secretary of Fish and Wildlife and Parks at the Interior Department.
And: Four trade groups representing utilities and auto manufacturers wrote to the committee (and the House T&I), urging lawmakers to bolster the deployment of EV charging and hydrogen refueling infrastructure.
Elsewhere on the Hill: The Senate Finance Committee will mark up the Clean Energy for America Act today, and the House Natural Resources Committee will mark up amendments to legislation focusing on abandoned mines (H.R. 1146 (117), H.R. 1733 (117) and H.R. 1734 (117)) and orphaned wells (H.R. 2415 (117)). A Senate Energy subcommittee is meeting on the state of the National Parks, with Shawn Benge, deputy director of operations for the National Park Service, testifying.
MURKOWSKI TALKS ‘ALASKA INFRASTRUCTURE’: While attending a bill signing at the White House on Monday, Alaska GOP Sen. Lisa Murkowski discussed “Alaska infrastructure” with Biden, she told reporters Tuesday. That includes ConocoPhillips’ Willow oil project in the state as well as geothermal energy, said Murkowski, the ranking member on the Appropriations subcommittee responsible for EPA and Interior funding.
EXTENDING BIODIESEL TAX CREDITS: Lawmakers introduced bipartisan legislation in both the House and Senate to extend the biodiesel tax credit, presently set to expire next year, to 2025. Reps. Cindy Axne (D-Iowa) and Mike Kelly (R-Pa.) introduced a House version Tuesday, while Sens. Chuck Grassley (R-Iowa) and Maria Cantwell (D-Wash.) introduced companion legislation in the Senate. The legislation has backing from a bipartisan mix of lawmakers representing states with large agricultural industries.
NOT SO EXCITED FOR EVs: Senate Energy Committee Chair Joe Manchin (D-W.Va.) expressed skepticism at investing major federal bucks into electric vehicle infrastructure, as Biden’s plan proposes.
“I don’t remember Henry Ford — when he built the Model T — that we went out and built filling stations for him,” Manchin told reporters, including our Anthony Adragna. “We should give them incentives and help them mature it. We’re willing to do it, but it shouldn’t cost as far as the debt to the nation.”
As a refresher, Transportation Secretary Pete Buttigieg said last week that the federal government would likely only cover the costs of charging stations in areas that don’t have the means to do so — particularly in rural communities.
And during the ARPA-E Innovation Summit on Tuesday, Buttigieg stressed the need for partnerships between the private sector, public sector and academia in both advancing technologies and bringing them to scale. He brought up federal investment in commercial aviation as an example of a successful public-private technology partnership.
JUSTICE40 UPDATE: In a letter to White House Council on Environmental Quality Chair Brenda Mallory on Tuesday, the Congressional Hispanic Caucus called for the inclusion of Latino stakeholder groups and decision-making transparency in a list of recommendations for the Biden administration’s Justice40 program. That initiative promises to deliver 40 percent of climate investment benefits to disadvantaged communities.
Around the Agencies
FIRST IN ME: Over 30 groups, including the NRDC, Food & Water Watch, Earthjustice and Western Energy Law Center, are submitting comments to FERC today urging the commission to impose far more stringent standards to how it approves fossil fuel pipelines.
"Any permitting decision should include a determination that the project is consistent with a broader program that will reduce national emissions to stay within the 1.5°C budget,” the groups write. “Put simply, a business-as-usual approach to fossil fuel infrastructure permitting will condemn humanity to a degraded future – an outcome wholly not in the public interest.”
The comment comes as FERC Chair Rich Glick faces pressure from lawmakers to act promptly on pending pipeline projects. Glick has initiated a rethink about how the regulator weighs pipelines, and he spoke with Pro's Eric Wolff where he said climate change was one of the major aspects under consideration.
Also in FERC news: New England to eliminate minimum offer price rule, from Eric.
FOREIGN EXCHANGE: The Biden administration will rely on foreign sources — largely Canada, Australia and Brazil — for the bulk of the critical minerals needed to build EV parts, Reuters’ Ernest Scheyder and Trevor Hunnicut scooped Tuesday. Though the plan is meant to quickly achieve environmental goals, the news angered U.S. producers and labor groups, who have urged for as much of the supply chain as possible to remain in the United States.
“This policy is devastating for the sector and a setback towards the goal of establishing a secure domestic supply chain,” USA Rare Earth CEO Pini Althaus said in a statement Tuesday.
Administration officials told Reuters that they were confident relying on allies for the raw materials would not put the supply chain at risk. The administration will finalize its strategy after a year-long review of the supply chain involving national security and economic development officials, Reuters reports.
GREENS DROP OFFSHORE WAIVER LAWSUIT: Environmental advocacy group Healthy Gulf dropped a lawsuit it filed against the Trump-era Interior Department over alleged overuse of safety regulation waivers for offshore drilling companies, according to a court filing Monday. Healthy Gulf said the Biden administration offered enough assurances it will enforce offshore drilling safety rules, which were put in place following the 2010 Deepwater Horizon disaster in the Gulf of Mexico.
As POLITICO reported back in 2019, the Trump administration issued nearly 1,700 waivers to these rules in its first two years, something that environmental groups said in a subsequent lawsuit created a de facto “waiver rule.”
Beyond the Beltway
JOURNEY TO THE WEST: The Biden administration announced Tuesday that it’s partnering with California to lease out swaths of the state’s central and northern coastal waters for offshore wind farms. It will be the first-ever sale of offshore wind leases in federal waters on the West Coast, with a lease-sale slated for 2022. The areas could produce up to 4.6 gigawatts of electricity, enough to power 1.6 million homes. Pro’s Colby Bermel has more from California.
STEEL'S CARBON BORDER TAX: The Climate Leadership Council released a new report today showing that a border carbon adjustment and carbon fee could be a major boost for American steel. Foreign steelmakers who supply the U.S. emit 50 to 100 percent more carbon dioxide per ton than U.S. producers, and a BCA could bolster U.S. steel industry margins by 32 to 41 percent, the report said, based on 2019 steel market figures. It could also reduce imports of foreign steel by 50 percent. CRU International authored the report, which you can read here.
Movers and Shakers
— CPower Energy Management appointed Mike Ratliff as vice president for utility solutions. Prior to joining CPower, Ratliff was chief technology officer for Enbala and for Comverge.
The Grid
— “Meet Biden's trailblazing climate science adviser,” via E&E News.
— “Waves and Seaweed Challenge France’s Plans for Floating Wind,” via Bloomberg.
— "U.S. charges Canadian in corruption case involving fugitive ambassador," via POLITICO.
— “Shell on Trial as Court Weighs Its Climate Responsibility,” via Bloomberg.
THAT'S ALL FOR ME!
https://www.politico.com/newsletters/morning-energy/2021/05/26/exxon-mobils-big-vote-795550
2021-05-26 14:00:57Z
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