Today’s Key Takeaways: Manchin/Schumer deal gives $369B to energy/climate change, 15% corporate income tax, methane fee, reinstates Gulf of Mexico oil drilling leases. U.S. top oil consumer in 2021. Angolan miners discover largest pink diamond in 300 years. Unclear whether new climate legislation deal can pass Senate and House.
NEWS OF THE DAY:
New life for climate legislation
Ben Geman, Axios, July 28, 2022
An emerging Capitol Hill deal could give White House carbon-cutting goals a huge lift that looked all but impossible weeks ago.
Why it matters: President Biden’s target under the Paris Agreement of cutting U.S. emissions 50% by 2030 could be within reach if Congress approves the new clean energy investments, analysts say — but it’s not clear that it would have the votes to pass.
Catch up fast: Senate Majority Leader Chuck Schumer and Sen. Joe Manchin (D-W.Va.) have unveiled the details of a revenue-and-spending deal with $369 billion in “energy security and climate change” measures.
- If approved, it would be the biggest federal investment in clean energy yet made in the United States.
- Manchin’s vote is needed to move the bill on a party-line vote.
- But Sen. Kyrsten Sinema (D-Ariz.) would have to vote for it too, and there’s no guarantee that she will. “We do not have a comment, as she will need to review the text,” a Sinema spokesperson told Axios’ Alayna Treene and Hans Nichols Wednesday night.
Details: The bill would provide tax credits and other incentives to spur the development and deployment of clean energy and carbon abatement technologies.
- These include wind and solar power, so-called “clean hydrogen,” as well as direct air capture.
- It also includes monetary incentives to help people buy clean cars, subject to certain income requirements.
- It would incentivize the increased domestic production of critical minerals used in batteries for electric vehicles.
- In a concession to Manchin, the bill would also force the Interior Department to reinstate Gulf of Mexico oil drilling leases from a 2021 auction that was vacated by a federal judge and conduct new Gulf leasing as well.
Zoom in: A few takeaways on the bill’s unexpected revival Wednesday evening…
1. It looks consequential. Schumer and Manchin jointly said it would cut U.S. emissions by 40% by 2030. Schumer’s office confirms that’s from 2005 levels, the same baseline as Biden’s pledge.
- Ben King of the Rhodium Group, a research firm, tells Axios if the deal is consistent with the package they’ve previously modeled, it could “plausibly” put the U.S. on track for a 40% reduction.
- “Additional action by the Biden administration and states can help close the rest of the gap to the target of a 50-52% cut by 2030,” he said via email.
- Princeton University energy expert Jesse Jenkins also tells Axios that the estimate from Schumer’s office looks accurate.
- “It’ll probably be at least 800 million tons and up to 1 billion tons of additional [emissions] reductions in 2030 relative to current policy baseline,” he said via email, noting that’s about two-thirds to three-quarters of what’s needed to reach Biden’s target.
2. It has global implications. Stronger U.S. climate efforts could prompt other big polluters to do more. Peer pressure matters in global climate diplomacy since commitments under the Paris deal are voluntary.
3. The path forward looks very real. Several of the most outspoken lawmakers on climate — like Sens. Brian Schatz and Sheldon Whitehouse — applauded the deal.
- The House Progressive Caucus said it needs to evaluate the details of the overall package but said it’s a “promising” step.
- But it’s certainly not a done deal. Every Senate Democrat must be on board to move the bill, while House Democrats can afford only a handful of defections.
4. Some lawmakers will have to grit their teeth. Manchin, whose state is a big coal and gas producer, backs fossil fuels more than most Democrats.
- In a statement, he said the deal invests in tech needed for all energy types — including fossil fuels — to be used as cleanly as possible.
- “This bill does not arbitrarily shut off our abundant fossil fuels,” Manchin said.
What they’re saying: University of California at Santa Barbara climate policy expert Leah Stokes said the bill would be “transformative” in terms of boosting clean energy jobs and manufacturing — and would be timely after the extreme weather events of recent weeks.
- “I think that the last two weeks have shown us what the price of failure is. That it is an unlivable planet,” she said.
OIL & GAS:
Who Were the Biggest Oil and Gas Consumers in 2021?
Andreas Exarheas, Rigzone, July 28, 2022
According to BP’s latest annual statistical review of world energy, the top oil consumer in the world in 2021 was the United States with a consumption rate of 18.68 million barrels per day.
BP highlighted that this figure was 8.7 percent up from 2020’s consumption rate, which was shown to be 17.18 million barrels per day. The U.S. consumed 19.42 million barrels of oil per day in 2019, 19.41 million barrels per day in 2018, 18.84 million barrels per day in 2017, 18.59 million barrels per day in 2016, and 18.49 million barrels per day in 2015, BP’s review showed.
China ranked second in oil consumption last year with 15.44 million barrels per day, while India ranked third with 4.87 million barrels per day, according to BP’s review. China’s consumption in 2021 marked a 7.2 percent increase compared to 2020 and India’s consumption last year marked a 3.8 percent gain on 2020, BP’s review highlighted.
In terms of natural gas consumption, the U.S. also took the 2021 top spot with a demand level of 826.7 billion cubic meters, BP’s review showed. Although this was the top consumption figure in the world last year, it marked a 0.4 percent drop compared to the 2020 U.S. natural gas consumption figure of 831.9 billion cubic meters, BP’s review outlined.
In 2019, the U.S. consumed 850.7 billion cubic meters of natural gas, in 2018 this figure was 821.7 billion cubic meters, in 2017 it was 740 billion cubic meters, in 2016 it was 749.1 billion cubic meters, and in 2015 it was 743.6 billion cubic meters, according to BP.
Russia ranked second in gas consumption last year with 474.6 billion cubic meters, while China ranked third with 378.7 billion cubic meters, BP’s review highlighted. Russia’s consumption figure was up 12.4 percent on 2020 and China’s consumption figure was up 12.8 percent on 2020, BP pointed out.
BP’s latest review highlighted that total world oil consumption in 2021 was 94.08 million barrels per day and total world natural gas consumption was 4.03 trillion cubic meters. Oil production was shown to have grown six percent compared to 2020, while gas production was shown to have grown 5.3 percent compared to 2020.
Miners just discovered the largest pink diamond in more than 300 years
Brandon Spector, LiveScience, July 28, 2022
The diamond will likely become the most expensive gemstone ever sold.
Miners in Angola have uncovered a massive pink diamond that may be the biggest gem of its kind found in the past 300 years.
The pink diamond is estimated to weigh 170 carats, making it just a smidge smaller than the 182-carat Daria-i-Noor diamond — the largest pink diamond in the world, which today is part of the Iranian National Jewels.
The new diamond has been nicknamed the “Lulo Rose,” after the Lulo mine in northeastern Angola where it was found, according to a statement from the Lucapa Diamond Company, which owns Lulo and one other diamond mine in Angola. Since 2015, the Lulo mining project has uncovered 27 diamonds weighing more than 100 carats, including the largest diamond ever found in Angola: the 404-carat “4th February Stone,” which sold for $16 million in 2016.
Oil and Gas Industry Methane Fee Survives in Manchin Spending DealAri Natter, Bloomberg/Rigzone, July 28, 2022
The oil and gas industry would face a first-time fee on the excess emission of methane under a breakthrough spending agreement reached on Wednesday by Senate Majority Leader Chuck Schumer and Senator Joe Manchin.
Methane leaking from oil and gas wells, pipelines and an array of other infrastructure would lead to fees rising to as much as $1,500 a ton in 2026 for some operators, according to the text of the agreement, which is set for a Senate vote as soon as next week.
The legislation which also includes hundreds of millions of dollars in incentives for the industry to monitor and clean up methane leaks, comes amid increasing scrutiny of methane, the primary component of natural gas, which pound-for-pound has more than 80 times the heat-trapping power of carbon dioxide. Reducing emissions of the greenhouse gas is considered crucial in the struggle against climate change.
Any fees would come alongside separate Environmental Protection Agency efforts to limit methane emissions, including proposals to strengthen requirements for companies to find and plug leaks at hundreds of thousands of oil and gas wells.
Overall, the broader deal includes some $369 billion on climate and energy spending including on a series of new and extended tax credits for clean energy and electric vehicles. It remains unclear whether the deal will be backed by the full Democratic caucus in the 50-50 Senate.
It would also have to pass the House, where progressives sought a much more expansive plan.