Today’s Key Takeaways: Granholm: “Oil and gas is going to remain for years to come”. Biden budget targets fossil fuels. Biden administration warns of China’s chokehold on supply chain. Manchin vs. Biden.
NEWS OF THE DAY:
Energy Transition ‘Certainly’ Includes Natural Gas and Oil, Says Granholm
Morgan Evans, Natural Gas Intelligence, March 9, 2023
U.S. Secretary of Energy Jennifer Granholm told a crowd of energy executives on Wednesday that even as the Biden administration targets a nationwide, carbon-neutral country by 2050, oil and natural gas is going to remain a part of the energy mix for years to come.
“We know that even the boldest projections for clean energy deployments suggest that in the middle of the century, we are going to be using abated fossil fuels,” Granholm told the audience at CERAWeek by S&P Global. “We know that oil and gas is going to remain a part of our energy mix for years to come.”
As such, Granholm pinned carbon capture management and storage as key to unlocking energy security while reducing emissions.
“We need to enhance the technologies for abating fossil emissions, and we need to advance the technology for clean sources,” Granholm said… “We need both traditional and new energy. As this transition progresses, we do know that our energy mix and the globe’s energy mix is going to change, and that means that we all have to play a part to ensure that the transition is a managed transition; a transition that keeps us ready and able to meet consumer demands, while growing into more diverse sources for tomorrow.”
Factbox: Biden budget to target U.S. fossil fuel subsidies
Reuters, March 9, 2023
U.S. President Joe Biden will propose a budget that would scrap oil and gas industry subsidies, according to a document seen by Reuters, reviving a perennial debate about whether fossil fuel companies should be receiving lucrative tax breaks.
While the proposal has little chance of making it through a divided Congress, it represents a political signal from the White House, which has repeatedly criticized Big Oil for raking in record profits at a time of high consumer energy costs since the Russian invasion of Ukraine.
Here are some details about U.S. fossil fuel subsidies:
HOW MUCH ARE THEY WORTH?
Calculating the cost of U.S. subsidies for the fossil fuel industry is complex because the incentives stretch across the U.S. tax code but estimates range from $10 to $50 billion per year.
Taxpayer advocates and environmental groups argue the subsidies are inappropriate at a time when the federal government is trying to shift the economy to cleaner forms of energy to fight climate change.
Don’t let China control clean energy supply chain, US officials warn
Reuters, Mining.Com, March 9, 2023
Officials from President Joe Biden’s administration warned leaders of the US clean energy transition this week to decarbonize quickly and keep the supply chain out of China’s control.
Washington’s message at the CERAWeek energy conference in Houston reflects growing concern that the rapid investment it is encouraging to fight climate change could backfire if it empowers China. Many executives agreed, but said the US had to find a way to ensure domestic supply without sparking a trade war with the world’s second biggest economy, already a dominant supplier of critical minerals and components used in everything from electric vehicle batteries to solar panels.
US tensions with Beijing have been rising over issues ranging from Chinese spying to Taiwan’s status and China’s position on Russia’s war in Ukraine.
“It’s just clear, to say it directly, that China has too much of a chokehold on critical minerals, on critical processing and upstream technologies, and solar,” White House energy adviser John Podesta told the conference.
“We let that go. That was a mistake. We need to get it back.”
He and other officials at the conference cited Europe’s historic reliance on Russian fuel as an example of risks of relying on global rivals. State Department energy envoy Amos Hochstein and Under Secretary Jose Fernandez were among officials giving speeches or participating in panel discussions.
MANCHIN VS. THE BIDEN ADMINISTRATION: Sen. Joe Manchin has publicly opposed the Biden administration on a number of energy items of business recently. To review:
- He blasted the Interior Department after it said it needs until December to publish its offshore oil and gas leasing program.
- He said he would vote against Biden’s pick for IRS commissioner, Daniel Werfel, over the administration’s implementation of the electric vehicle credits in the IRA.
- He broke with the Treasury Department over the EV tax credit implementation, accusing it of pandering to automakers and “progressive extremist groups” at the expense of energy security.
- He voted with Republicans to cancel the Labor Department retirement rule allowing for consideration of ESG factors in investment.
- He bucked efforts to ban or otherwise regulate gas stoves.
- He said he will vote with Republicans to cancel the administration’s WOTUS rule.
It’s worth noting that, apart from his disagreements with Democrats and his party over energy and climate legislation and regulation, Manchin has also crossed them by voting to block a controversial D.C. crime law and opposing Biden’s pick for FCC commissioner, Gigi Sohn, prompting her to withdraw her nomination on Tuesday.