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DOI Plays Larger Role In Low-Carbon Energy Shift Amid Hill Proposals

March 31, 2021

The Interior Department (DOI) under the Biden administration is playing a more forceful role in driving a shift to lower-carbon forms of energy than during the Trump administration -- seeking to impose new restrictions on fossil fuel extraction while boosting renewable energy deployment on public lands, including offshore wind power.

The expanded role for Interior was on display during the department’s recent public forum to gather input from a variety of stakeholders about potential options to overhaul the federal oil and gas program, with the event underscoring that the Biden team must navigate competing calls from multiple quarters:

Biden DOI Must Navigate Multiple Competing Calls On Oil & Gas Review

Interior Department (DOI) officials must navigate competing calls from a multitude of groups as the Biden administration conducts a comprehensive update to the federal oil and gas program to help address climate change, with some urging an end to drilling on public lands while others warn of massive economic harms from such a step.

Advocacy during the March 25 virtual forum included ideas about how the oil sector could improve its environmental performance, how federal officials could tweak aspects of the program to boost taxpayer revenue and how DOI could better engage with tribes and environmental justice (EJ) communities that are often directly affected by drilling operations.

Environmentalists, some tribal leaders and EJ representatives voiced support for aggressive steps to curtail oil and gas development on federal lands, citing the sector’s contribution to climate change and its conventional air and water pollution that often has a disproportionate adverse effect on poor and minority communities.

“We cannot afford to tap new oil and gas reserves and stay within our carbon budget,” argued Sharon Buccino, who manages the lands program for the Natural Resources Defense Council and urged DOI officials to apply a “net-zero [carbon] frame to permitting.”

But supporters of continued oil and gas production -- including industry groups, other tribal leaders and building trade union officials -- stressed the broader economic benefits from the sector, including high-paying jobs and revenue for state and local governments.

Wendy Kirchoff, vice president of regulatory policy at the American Exploration & Production Council, said communities near drilling operations “depend on the good-paying jobs and local commerce that development brings,” and that they are concerned that “without these projects, their communities would suffer because there are no replacement jobs locally waiting for them.”

The contested forum came despite prior public comity on climate issues from the White House and top oil sector officials:

DOI Faces Contested Leasing Review Despite Public Comity On Climate

Interior Department (DOI) officials will hear from a range of competing groups later this week about how -- or whether -- they should overhaul the federal oil and gas leasing program to address climate change even as White House officials and industry executives are promising cooperation on the broader climate issue.

During a March 22 White House meeting with top oil industry executives, climate policy chief Gina McCarthy “made clear that the administration is not fighting the oil and gas sector,” according to a White House readout. Rather, McCarthy stressed that the administration is fighting for union jobs, deploying emission-reduction technologies, strengthening American manufacturing and growing the economy, the readout said.

According to press reports, executives from 10 oil companies and three industry trade groups also “pledged support for federal regulations explicitly limiting emissions of methane from wells and other oilfield equipment.”

Meanwhile, DOI is poised to play a key role in seeking to greatly expand deployment of non-emitting renewables on public lands, including by setting an aggressive 2030 target for offshore wind energy in federal waters:

Biden Team Unveils 2030 Offshore Wind Goal To Aid Climate, Economy

The Biden administration is hoping to usher in a major boom in the offshore wind sector along the East Coast, announcing a new priority area for such projects as well as a deployment target for the non-emitting power technology that it hopes will help meet climate change and economic development goals.

DOI and several other agencies on March 29 unveiled a target of deploying 30 gigawatts (GW) of offshore wind by 2030, “while protecting biodiversity and promoting ocean co-use.”

That level of generation would allow for 44,000 workers in the sector by the end of the decade, while also meeting the electricity demand for 10 million homes each year while avoiding 78 million tons of carbon dioxide emissions, according to the White House.

The new target adds additional details to the administration’s previous goal of “doubling” offshore wind production -- a target that some suggested was difficult to define because the sector in North America has no commercial-scale facilities currently generating power.

In addition to the 2030 target, the administration also announced a longer-term goal of 110 GW by 2050.

A March 30 analysis by the research firm ClearView Energy Partners notes that eight East Coast states have already set individual offshore wind targets that collectively call for deploying 32 GW -- though many of those state goals stretch out to 2035.

Such goals are crucial as Congress and the Biden administration begins debating a series of tax breaks and infrastructure spending to ramp up renewable energy, though a recent report suggested officials also needed to support existing nuclear power plans while speeding the shut-down of existing coal plants:

Democrats Urged To Pair Low-Carbon Tax Breaks With Nuclear, Coal Plans

House Democrats could achieve major additional carbon reductions if they were to expand their clean energy tax program beyond its current focus on new zero-carbon power generation by also spurring the retention of non-emitting nuclear plants and funding the retirement of coal plants, according to new research.

Such a broader mix of tax incentives, according to a March 23 analysis by the independent research firm Rhodium Group, could drive a 66-74 percent reduction in power sector greenhouse gases over the next decade depending on the assumed cost of clean energy technology.

That level of GHG reduction is roughly on par with Democrats’ top line targets of an 80 percent cut from 2005 levels by 2030, followed by a net-zero power sector by 2035.

“That’s a major step forward,” the analysis says of its finding, adding that a suite of EPA rules targeting carbon and conventional air and water pollution from power plants could further reduce the sector’s GHGs by an additional 2-3 percentage points.

Broadly, Rhodium argues that clean energy tax breaks should be paired with tax policies that specifically encourage rural power cooperatives to retire their coal plants and utilities to retain their existing nuclear fleet.

Specifically, the group analyzes a policy in which Congress would write off Rural Utility Service loans for co-ops’ coal plants that retire by 2025 and are replaced with clean generation. It estimates that 30 GW of coal plants would be eligible that wouldn’t retire under current policies.

And it says recent legislation from Sens. John Barrasso (R-WY) and Sheldon Whitehouse (D-RI) to provide a tax credit to help retain existing nuclear plants could prevent 50 GW of retirements that might otherwise occur.

That legislation is one of a number of measures senators from both parties are eyeing to preserve the nation’s fleet of nuclear plants:

Senators Eye Legislation To Promote Nuclear For Decarbonized Grid

The Senate energy committee is considering legislative options for preserving the nation’s fleet of nuclear power plants as well as promoting the development of advanced reactors for a decarbonized electric grid as the Biden administration pushes forward on its goal for a net-zero emissions energy sector by 2035.

“We've got to now find out every nuclear plant that's on the chopping block right now and get to the CEOs of those of those companies and make them come here and tell us why they're taking them offline,” said Senate energy committee Chairman Joe Manchin (D-WV) during a March 25 hearing. “That’s our job,” Manchin added, laying out his agenda for the committee as it considers legislation in advance of an upcoming infrastructure debate and as part of the nation’s climate strategy.

Barrasso, the committee’s ranking Republican, also raised concerns about U.S. reliance on uranium from foreign adversaries as the United States renews its focus on nuclear power to meet its climate policy goals.

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