Vacuum of Leadership for Energy. Manchin/Murkowski grill Haaland.

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Bipartisan group reaches agreement on $1.2 trillion “hard” infrastructure bill
Alayna Treen, Axios, July 28, 2021

After weeks of long nights and endless Zoom calls, a bipartisan group of senatorsfinally reached a deal on “the major issues” in their $1.2 trillion “hard” infrastructure package, GOP senators involved in the talks announced Wednesday.

Why it matters: It could be days before the group finishes writing the bill, but the Senate can begin debating the legislation in earnest now that they have resolved the outstanding issues.

  • Senate Majority Leader Chuck Schumer (D-N.Y.) said Wednesday that the Senate could vote as early as Wednesday night to advance the proposal, the second time they will vote on this procedural measure.
  • Schumer also insists he’s prepared to keep the Senate in session over the weekend to finish the bipartisan infrastructure bill: “It’s time for everyone to get to yes,” he announced on the floor on Monday.

Details: The deal is expected to cost $1.2 trillion over eight years, or $974 billion over five years, and offers more than $579 billion in new spending.

  • $65 billion will be allocated for broadband, Sen. Susan Collins (R-Maine), said.
  • $47 billion for flooding and coastal resiliency, said Sen. Bill Cassidy (R-La.).
  • Language regarding enforcement of unemployment insurance fraud.
  • The bill is fully paid for.

What they’re saying: “We now have an agreement on the major issues,” Sen. Rob Portman (R-Ohio), the lead GOP negotiator, announced Wednesday afternoon.

  • “We are still finalizing the details, but we have reached agreement on the major issues,” Collins said. “I am delighted that we’ve been able to come together as a bipartisan group.”
  • “There is a CBO official score that covers much of the bill,” Portman said, something many GOP senators deem necessary before voting on the measure.

Behind the scenes: The deal comes hours after Portman and White House counselor Steve Ricchetti huddled for hours at the Capitol Tuesday night hashing out the remaining sticking points of the bill.

  • The biggest problems revolved around transit policy and how to pay for the package, among other hurdles.
  • On Wednesday morning, Sens. Portman, Collins, Cassidy, Mitt Romney (R-Utah), Lisa Murkowski (R-Alaska) met with Senate Minority Leader Mitch McConnell (R-Ky.) in his office.
  • McConnell so far has taken a hands-off approach to the talks. This meeting signals the group is ready to bring him into the fold.

What’s next: Schumer has made clear that both the bipartisan bill and the Senate’s $3.5 trillion budget resolution need to pass prior to August recess, which as of now is still scheduled to begin in less than two weeks.


Manchin grills Haaland over Biden oil and gas moratorium
Zack Budryk, The Hill, July 27, 2021

Senate Energy Committee Chairman Joe Manchin (D-W.Va.) grilled Interior Secretary Deb Haaland on the status of the Biden administration’s moratorium on new oil and gas leases on public lands in a hearing Tuesday.

“While I’ve supported administration’s desire to pause lease sales to make sure the American people are getting fair returns for our shared resources, we are now well — now into the early summer timeline when we were told the review would be completed,” Manchin said during a Tuesday hearing on the Interior Department’s fiscal 2022 budget request.

“We need a plan to move forward for responsible oil and gas leasing both onshore and offshore,” he added.

In response, Haaland did not commit to a specific timeline but said “the review is being finalized internally and should be out very soon.”

Sen. Lisa Murkowski (R-Alaska), one of four GOP senators to vote to confirm Haaland, also pressed the secretary on the freeze.

“I’m not going to ask you when you think it’s coming. I hope you can sense the frustration in anticipating this and wondering when we will be able to expect you’ll be in compliance with the judge’s order,” she said, referencing a June injunction against the pause.

Sen. John Hickenlooper (D-Colo.) asked Haaland about her takeaways from her recent visit to Grand Junction, Colo., the current site of Bureau of Land Management (BLM) headquarters after its 2020 relocation.

The relocation was widely praised by Republicans in western states but criticized by Democrats who called it an attempt by the Trump administration to dilute the agency’s power. Since President Biden took office, some Democrats have called for it to be moved back to Washington, while Colorado officials of both parties have called for it to remain in Grand Junction.

Describing her takeaways from the visit, Haaland told Hickenlooper: “We need to come to a decision fairly soon” as to the location of the headquarters.

“It’s important for folks to be able to know and understand what their task at hand is, and the way we do that is make sure that folks are hunkered down and know what they’re doing,” she added.

Hickenlooper acknowledged “certain of the processes” in the relocation were mishandled and said they were seemingly designed to drive some career public servants out of the agency but added “that has nothing to do with Grand Junction and the appreciation that community … has developed with the BLM over the last year.”


Carnival Set to Launch Its Largest-Ever Cruise Ship, Mardi Gras – Rollercoaster and All
Fran Golden, Cruise Critic, July 27, 2021

Carnival Cruise Line’s newest vessel — the much-anticipated Mardi Gras — will make history when it sets sail from Port Canaveral on Saturday, July 31, 2021. It’s the first ship in North America to operate on cleaner burning Liquified Natural Gas (LNG) and Carnival’s largest “Fun Ship” ever, large enough for nearly 6,500 passengers at full capacity.

There are signs the brand is going more upscale with this ship — including with the introduction of new top-end suites, which have previously been something of an afterthought on Carnival. But what everybody is likely to be talking about is the rollercoaster onboard.


US metals buyers pay the price of broken supply chains
Reuters, July 27, 2021

US buyers of physical aluminum ingot are paying a record premium of 30 cents per lb, or $670 per tonne, to get metal to their plants.

The US Midwest premium is payable on top of the London Metal Exchange (LME) cash price, which at a current $2,498 per tonne is within striking distance of May’s three-year high of $2,579.50.

The premium has never been higher.

Even the Trump Administration’s 2018 double-whammy of import tariffs and sanctions on Russian producer Rusal couldn’t push the premium beyond a May peak of $485 per tonne.

There are plenty of specific drivers at work in the North American aluminum market, but it’s not just aluminum buyers who are having to pay up.

U.S. tin and lead buyers are also paying record premiums for their metal.

The common theme is one of import dependency, a vulnerability that is brutally exposed by chaos in the shipping sector that has disrupted everything from global automotive to local retail supply chains.

Out of stock

The United States has no primary tin or lead production capacity and imported 32,000 tonnes and 370,000 tonnes of refined metal last year respectively, the United States Geological Survey (USGS) found.

Tin imports accounted for around 75% of U.S. consumption last year and lead imports around 24%, lower because of the greater use of recyclable material in the all-important lead-acid battery sector.

Both tin and lead markets are experiencing global supply-side disruption.

The LME three-month tin price early on Tuesday hit a fresh all-time high of $34,990 per tonne on a combination of production hits and booming demand from the electronics sector.

LME tin inventory remains chronically low at just 1,165 tonnes, excluding the 1,150 tonnes scheduled for physical load-out. Most of those stocks – 1,080 tonnes – are located in Taiwan, close to Asia’s electronics hubs.

There is nothing at all in the United States, where Midwest buyers are now paying premiums of between $3,300 and $4,000 per tonne to get material, according to Fastmarkets’ assessments.

That, remember, is on top of the record LME price.

In a misfiring global tin supply chain, the U.S. finds itself at the back of the queue and facing the highest freight costs.

So too in the lead market, where Fastmarkets’ U.S. Midwest premiums have surged to record highs of up to 19 cents per lb over LME.

LME stocks of lead are also low and there is zero registered tonnage in the United States. Europe has stocks, but that market is still short of physical metal after Germany’s Berzelius Stolberg smelter was forced to close by last week’s flooding.

While the western lead market is caught in a rolling supply squeeze, the Chinese market is awash with the stuff. Lead stocks registered with the Shanghai Futures Exchange (ShFE) have grown from 45,900 tonnes at the end of December to 158,073 now.

There is an obvious arbitrage solution to this imbalance, but since the arbitrage will be with the LME, the bulk of any export shipments will likely head to exchange warehouses in Asia.

U.S. importers will still face high freight costs to move the metal to the domestic market, assuming there is available freight capacity.

Greater competition

Record U.S. aluminium premiums were already adding to a potent mix of bull drivers before last weekend’s strike action at the Kitimat smelter over the border in Canada.

Rio Tinto, which operates the plant, has said it will reduce production to 35% of its 432,000-tonne per year capacity, tightening an already super-tight market.

Tariffs on U.S. imports have already served to reduce flows of Canadian metal and producers everywhere are ramping up output of value-added products, meaning less production of the commodity-grade metal that determines the Midwest premium.

More fundamentally, however, the U.S. aluminium sector faces greater competition for imported metal as China, the world’s largest producer, itself turns net importer.

Just about all of the LME inventory – both on- and off-warrant – is located at Asian locations, particularly Malaysia’s Port Klang.

Accessible stocks have migrated eastward to within easy shipping distance of China’s ports. Competition for this material and the associated higher freight costs are driving premiums higher in both the Europe and the United States, but particularly the latter because it is furthest away.

Fracturing the global price

U.S. nickel premiums are also starting to move sharply higher and copper shows signs of stirring.

Only zinc seems relatively immune because of greater domestic production capacity and plenty of LME stocks in New Orleans.

Stocks of everything else are in the wrong place as U.S. manufacturing recovers from the pandemic.

The current turmoil in the global freight sector has served to make the United States an island in metals supply chains, a phenomenon that becomes most acute when the global market is itself operating in supply deficit, as is the case with tin.

Such import dependency has led the Biden administration to initiate a supply-chain task force to build domestic resilience in everything from medical supplies to lithium-ion batteries.

Critical minerals are a central part of this initiative. Tin is one of them but tends to be overshadowed by rare earths and battery metals, the current focus of U.S. government minerals policy.

Lead isn’t on the list even though it powers most of the vehicles currently on U.S. roads.

And aluminium has been deemed critical for national defence, but the Trump solution of import tariffs has exacerbated the stellar rise in the premium cost to U.S. manufacturers.

Aluminium also reveals the longer-term issues facing U.S. metal buyers. The tariffs, which remain in place under Biden, have accentuated the very import dependence they were meant to alleviate, baking it into a structurally higher domestic premium.

Trying to reshore supply chains inevitably makes them less global. That increases the significance of regional pricing – premiums – over global pricing on the LME. Such seems to be the evolving trend in aluminium pricing.

The woes in the global shipping sector will eventually pass but this underlying shift in metals pricing in a deglobalising world may be here to stay.


Biden energy rules hit ‘vacuum of leadership’
Leslie Clark, Kelsey Brugger, EnergyWire, July 28, 2021

President Biden has yet to nominate anyone to lead a small White House office, a gap that is stirring debate about the pace and content of rules tied to the president’s climate and clean energy agenda.

The Office of Information and Regulatory Affairs, an arm of the Office of Management and Budget, which reviews thousands of “economically significant” rules issued by federal agencies every year, has yet to secure an administrator. The delay follows the Senate’s March rejection of Neera Tanden, the president’s choice to be OMB director.

In comparison, former President Trump, who was the slowest president in modern history to name an OIRA head, had nominated someone to lead the agency by May 2017. Biden has yet to name a permanent OMB director either, or White House press secretary Jen Psaki said this week there was no update on a nominee.

The leadership of OIRA — and the pace of Biden’s rulemaking on energy issues — are under scrutiny as Biden climate adviser Gina McCarthy said this month thatthe administration would tap “regulatory authority” to move its climate agenda if Congress stalls on the issue.

“We have lots of regulatory authority that we intend to use, regardless, and we’ll move forward with those efforts to try to tackle the climate crisis,” McCarthy said at the Bloomberg Sustainable Business Summit.

Some climate advocates have praised the administration’s rulemaking process, saying it already is going a long way to moving Biden’s clean energy agenda.Others say, however, they are concerned the office is moving too slowly and that the leadership gap gives too much control to career staff, who have always enjoyed considerable authority at the office, which has long been a target of progressives who have criticized its cost-benefit analyses as too favorable to corporate America.

“The vacuum of leadership means that the OIRA line staff are being left to their own devices,” said James Goodwin, an analyst at the Center for Progressive Reform, adding, “they are not elected. And they are not professionally independent people. They have an ideological ax to grind. There are all the things percolating beneath the surface.”

Since taking office, Biden has released multiple regulations that influence the energy sector. The White House’s first regulatory agenda last month, formally known as the Unified Agenda, included rules aimed at cutting emissions, such as Department of Energy efficiency standards and a plan targeting the Bureau of Land Management’s leasing process to ensure protection of public lands (Greenwire, June 11). Some regulatory scholars noted at the time that roughly 1 in 5 current active rulemakings originated under Biden and that the administration had abandoned 10% of active rulemakings from the Trump administration.

This week, DOE said it has “moved swiftly” to set new energy efficiency guidelines, including on a Trump-era rule that determines how the agency writes standards for an array of household appliances and commercial equipment.

The department “will continue our efforts to craft policies that reduce wasted energy, save consumers money, and contribute to solving the climate crisis,” a spokesman said in an email.

DOE also gave notice in the Federal Register yesterday that it would revise the Trump era’s DOE’s test procedure interim waiver process, which environmentalists said gave too much power to manufacturers by giving them automatic waivers in certain circumstances.

Additionally, OIRA has conducted reviews of dozens of climate-related regulatory actions, including DOE rules. Currently an efficiency rule for manufactured housing has been on the docket for about 60 days, which is within the agency’s 90-day standard.

“This is the process operating the way this is supposed to operate,” said Stuart Shapiro, a former OIRA staffer and current Rutgers University professor.

Yet Shapiro expressed concern about the lack of a Senate-confirmed boss at OIRA and OMB, which has caused people in what he called the “OIRA world” to be “continually scratching our heads and exchanging worried looks.”

“Who does Congress call if they are upset about energy efficiency regulation at OMB?” Shapiro added. “Right now there is no easy answer.”

On his first day in office, Biden issued a memo to “modernize regulatory review” to ensure “regulatory initiatives appropriately benefit and do not inappropriately burden disadvantaged” communities. But so far nothing has come of it.

At DOE, advocates first raised alarms last month on Biden’s rulemaking pace, arguing that the release of the first regulatory plan showed an administration behind the curve when it came to tightening conservation standards for household appliances.

“It’s alarming that they haven’t yet published proposed rules to reverse the harmful Trump actions,” said Andrew deLaski, executive director of the Appliance Standards Awareness Project at the American Council for an Energy-Efficient Economy, at the time (Energywire, June 15).

Similar pushback occurred earlier this week from green groups after the Biden administration announced a Trump-era rule governing toxic wastewater pollution for coal-fired power plants would remain in place while EPA crafts a stronger replacement. Others have complained the administration has yet to repeal Trump’s changes to the National Environmental Policy Act — a law that drives energy regulations across the federal government — even as environmental groups continue to sue the government over 2020 rules.

Brett Hartl, government affairs director at the Center for Biological Diversity, which is tracking Biden’s promises on the environment, said it has been disappointed: “They are moving at the slow steady pace of agencies, but that is not sufficient to meet the moment we are in.”

Former Obama and Trump aides

Currently, Sharon Block — an Obama labor official who most recently helmed Harvard Law’s labor program — is serving as the acting administrator at OIRA. Progressives like Goodwin praised her initial appointment and hoped it signaled that the Biden team might overhaul the regulatory review process.

Some OIRA observers say they are concerned that the agency’s career staff hold too much influence without an administrator in place. Efficiency advocates, for instance, are pointing to OIRA career desk officer Sofie Miller, a former adviser at DOE during the Trump administration, as a potential reason why some DOE efficiency standards are not moving more quickly under Biden.

Before joining the Trump administration in May 2018, Miller spent six years as a senior policy analyst at the George Washington University Regulatory Studies Center, where she regularly published papers criticizing energy efficiency standards before joining the Trump administration in May 2018 (Energywire, March 13, 2019).

“OIRA is supposed to be a fair broker, focused on cost-benefit analysis, and instead you have a person doesn’t believe any standard is cost-justified and who has a paper trail saying the program shouldn’t exist,” said deLaski.

Shapiro, though, dismissed worries that Miller — or any single staffer — could stall work.

“None of that is to say problems could not occur down the road or that Sofie couldn’t decide to be a roadblock at some point,” Shapiro said. “But these are fairly complicated rules. Her job is to look through all of them carefully. That is not a simple task.”

An OMB spokesperson pushed back against the assertion anyone was holding up Biden’s agenda.

“OIRA’s team of dedicated experts continues to charge full steam ahead delivering on the president’s ambitious climate agenda, and any assertion otherwise is misinformed,” the spokesperson wrote in an email.

Bridget Dooling, a research professor at GW who served on the Biden OIRA transition team, also stressed that every desk officer reports to a branch officer who reports to the deputy administrator and the political leadership at OMB.

“In my experience desk officers do not control the pace of regulatory reviews, but they’re an easy target because they’re often the ones communicating with the agency and meeting with the public,” she wrote in an email.

What is clear is that pending energy-related rules across the federal government could sway the U.S. emissions trajectory, particularly with congressional action uncertain on clean energy policy. In addition to two dozen DOE efficiency standards that the Trump administration did not address, another 20 products are coming up for review shortly, for example.

Updating standards for nearly 50 products would cut as much carbon over the next three decades as mothballing as many as 25 coal-fired power plants, according to a study last November by the Appliance Standards Awareness Project and the American Council for an Energy-Efficient Economy.

“It’s going to require an aggressive pace to get caught up to speed, and we’re just not seeing action that is consistent with that,” Joe Vukovich, an attorney and clean energy advocate for the Natural Resources Defense Council’s climate and clean energy program, said of the pace of energy efficiency efforts. “This is such a huge opportunity, and the Biden administration has set an ambitious climate goal.”


Red states seek to block Biden’s social cost of carbon
Maxine Joselow, ClimateWire, July 28, 2021

Ten Republican attorneys general yesterday asked a federal court to swiftly block President Biden from raising a key metric for greenhouse gases.

In a motion for preliminary injunction, the red states urged the U.S. District Court for the Western District of Louisiana to prevent Biden’s interim social cost of carbon from taking effect across the federal government.

“Plaintiff States are substantially likely to prevail on the merits of their claims and preliminary injunctive relief is necessary to avoid imminent and substantial injuries to their sovereign, quasi-sovereign and proprietary interests,” the motion says.

The 10 states sued in April over Biden’s plans to increase the social cost of carbon, a key metric that assigns a dollar value to the harm caused by emitting 1 ton of greenhouse gases (Climatewire, April 23).

The metric is used in cost-benefit analyses underpinning major federal actions, such as EPA’s emissions rules for coal-fired power plants.

Biden signed a Jan. 20 executive order that established an interagency working group tasked with recommending an interim social cost of carbon within 30 days — and a final social cost of carbon by January 2022.

The working group in March endorsed raising the social cost of carbon to $51 per ton. Under former President Trump, the figure had fallen to as little as $1 per ton (Climatewire, March 1).

The lawsuit alleges that Biden’s moves violated federal rulemaking requirements and the intent of Congress. Led by Louisiana Attorney General Jeff Landry (R), the suit was also brought by the attorneys general of Alabama, Florida, Georgia, Kentucky, Mississippi, South Dakota, Texas, West Virginia, and Wyoming.

A coalition of 12 other attorneys general launched a separate legal challenge to Biden’s interim social cost of carbon in March (E&E News PM, March 8).

That complaint, which was spearheaded by Missouri Attorney General Eric Schmitt (R), asserts that Biden lacked the authority to raise the climate metric under the Constitution, which gives that power to Congress.

The Missouri-led coalition has also asked the U.S. District Court for the Eastern District of Missouri to prohibit Biden’s interim social cost of carbon from being used in agency rulemakings.

Judge Audrey Fleissig, who was appointed during the Obama administration, has scheduled an Aug. 20 hearing on its request.

The Department of Justice doesn’t comment on pending litigation.