With help from Josh Siegel, Catherine Morehouse, Ben Lefebvre and Daniel Lippman.
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— The U.S. had 20 climate disasters last year that each caused more than $1 billion in damages, together eclipsing the total amount of financial damage from large-scale climate catastrophes in 2020.
— Senate Energy is taking on hydropower today, namely ways to attract investment, streamline licensing and address drought and other environmental challenges.
— Former National Security Adviser H.R. McMaster says the Trump administration could have done more to stop Nord Stream 2, but still urges Democrats not to cave on sanctions.
HAPPY TUESDAY! I’m your host, Matthew Choi. Congrats to BASF’s Mark Washko for completing the lyrics: “You have a talent for causin’ things pain. Son, be a dentist. People will pay you to be inhumane.” For today’s trivia: Who was the shortest-serving Japanese prime minister? Send your tips and trivia answers to [email protected]. Find me on Twitter @matthewchoi2018.
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THE TRUE COST: The United States experienced 20 climate and weather disasters last year that each inflicted at least $1 billion in damages, resulting in a total of $145 billion in damages and killing 688 people, according to data released Monday by the National Oceanic and Atmospheric Administration. That is two fewer disasters crossing the $1 billion threshold than in 2020, but the total cost of damages for 2021 eclipsed the $102 billion toll of 2020. These large-scale disasters have cost the U.S. more than $742 billion since 2017.
The high cost of climate change is a central motivator among environmentalists in pushing through the $555 billion in climate spending included in Democrats’ reconciliation package. Sen. Joe Manchin (D-W.Va.) has cited the reconciliation package’s cost and long-term impacts on inflation beyond the initial price tag as one of his central concerns, but environmentalists retort the cost of climate disasters easily overshadows the investments needed to abate them.
“Climate change is one of our Nation’s greatest challenges, and we must face it head-on with robust investments in science and technology,” House Science Chair Eddie Bernice Johnson (D-Texas) said in a statement in response to the NOAA report.
NOAA’s analysis joined a chorus of damning climate reports this week. The analyst firm Rhodium Group found the U.S. had an uptick in greenhouse gas emissions last year relative to the 2020 pandemic drop off, and European climate observation service Copernicus found that the last seven years were the hottest ever recorded. Read more from Pro’s Zack Colman on NOAA’s latest reports.
WHAT’S HAPPENING AT THE DAM HEARING: The Senate Energy and Natural Resources Committee is discussing ways to maintain and shore up hydropower infrastructure today, touching on some of the financial and environmental challenges the sector faces. Tax credits to help the sector continue operating and attract investors are slated to be a major topic of conversation today, with hydropower backers, including committee members Sens. Maria Cantwell (D-Wash.) and Lisa Murkowski (R-Alaska), pushing for legislation to expand investment tax credits for the sector. Cantwell worked with Senate Finance Chair Ron Wyden (D-Ore.) to include hydropower tax credits in the reconciliation package. Manchin plans to discuss the need for hydropower investments to keep the current fleet online to support other renewables that are more variable on the weather during today’s hearing.
Licensing challenges will also be on the table, with committee ranking member John Barrasso (R-Wyo.) planning to highlight the sector’s “complex and time-consuming permitting” as a major barrier to private sector investment, according to talking points shared with ME. It’s also a priority National Hydropower Association President and CEO Malcolm Woolf plans to highlight. About 30 percent of FERC licenses for hydropower are set to expire by 2030, representing 13.8 GWs.
Recent droughts in the Western U.S. have also put hydropower stations in a precarious position, with low water levels limiting dams’ generating capacity. Bureau of Reclamation Commissioner Camille Touton plans to address the issue today, discussing the Interior Department’s drought relief efforts and the bipartisan infrastructure package’s investments addressing water resiliency.
TWO ADMINISTRATIONS ON NORD STREAM 2: H.R. McMaster, who was a national security adviser to former President Donald Trump, said the Trump administration “probably didn’t do everything we could have” to stop the controversial Nord Stream 2 pipeline, which was nearly finished before Biden took office. The Biden State Department used the project’s advanced progress to justify not enforcing sanctions on the pipeline more aggressively.
Still, McMaster urged Democrats to buck Biden and join Senate Republicans in supporting legislation this week that would force the president to impose sanctions he waived. Senate Foreign Relations Chair Bob Menendez (D-N.J.) also has a sanctions bill on Russia and Nord Stream 2, but it is contingent on Russia invading Ukraine.
“It’s clear Russia is already using natural gas exports as a tool of coercion over EU countries,” McMaster told Pro’s Josh Siegel, noting Moscow isn’t sending as much natural gas to Europe as expected while the continent deals with a supply crunch and high prices.
“Anyone who thinks that is disconnected from the threat [Putin] is making to Ukraine is wrong,” McMaster added. “Nord Stream 2 gives him the ATM he needs to fund his security and campaign of subversion against Ukraine and Europe.”
McMaster co-authored an op-ed just before Christmas with Sen. Kevin Cramer (R-N.D.) calling for the U.S. and EU to apply a carbon fee on imported goods as part of “a transatlantic climate and trade initiative” to counter Russia’s dirtier natural gas. McMaster told Josh that he and some of his former administration colleagues tried with no avail to convince Trump to outline a policy connecting addressing climate change to his protectionist trade agenda.
“I always thought this was an opportunity as part of a national security strategy because obviously the issue of climate change is interconnected with a series of other challenges, such as energy security, water security, and food security,” McMaster said. “This is about incentivizing clean generation of energy in a way that fosters an international consensus.”
Related: The Biden administration kicked off a week of security talks with its Russian counterparts at a Geneva summit Monday, where Moscow’s envoys insisted they had no future plans to invade Ukraine. But the two sides demonstrated their cavernous policy differences on security in the region, including on a Russian push to ensure Ukraine and Georgia will never join NATO. Quint Forgey and David Herszenhorn have more for Pros.
MURKY FERC DEADLINE: A coalition of environmental and renewables groups on Friday protested FERC’s rejection of their challenge to Southeast utilities’ proposal to form a centralized energy exchange platform. FERC had rejected the complaints, filed in November, because the groups did not file within the allotted 30-day period.
But the protesting parties say the commission’s calculation of the timeline is inaccurate. FERC started the clock on a federal holiday, which the Friday complaint claims is inconsistent with commission precedent and in violation of a rule that specifies statutory periods cannot end on a legal holiday — in this case Oct. 11. FERC’s order denying rehearing “invents and retroactively applies a brand-new approach to time computation, which directly conflicts with the Commission’s consistent, long standing practice of tabulating deadlines for statutory periods … in an attempt to deprive Rehearing Parties of an opportunity to seek rehearing and, potentially, judicial review,” wrote the groups.
FERC had deadlocked on the proposal late last year, causing it to go into effect automatically. During the December open meeting, Chair Richard Glick said he was disappointed by the misunderstanding, given he believed there were issues that could have been addressed on rehearing, and added that the commission will make the comment period clearer in the future.
NO GO ON NPR-A: The Interior Department will nullify the Trump administration’s efforts to open up the entire National Petroleum Reserve-Alaska for oil and gas leasing, officials said Monday. The decision, in which Interior will choose the “no action” option the Trump administration included in its 2020 environmental impact statement laying out possible changes to how NPR-A would be managed, will keep the current leasable land at the 23 million-acre NPR-A at the 52 percent level set in 2013.
SUPREME DISAPPOINTMENT FOR ETHANOL: The Supreme Court turned down a request from biofuel backers to examine a case on the year-round sale of gasoline blended with higher levels of ethanol. The court denied a petition from ethanol supporters that centered on a lower court decision, which vacated the Trump administration’s rule to allow gasoline blended with 15 percent ethanol to be sold year-round, including the summer months. Summer sale for E15 fuel was previously restricted due to air pollution regulations.
The D.C. Circuit case centered on whether the Clean Air Act gave EPA the power to open the summer season to E15 fuel sales. Fossil fuel refiners contend the plain language of the law does not, while biofuel backers argue the contrary, adding that opening up E15 sales would introduce cleaner options to the nation’s fuel mix.
Sen. Joni Ernst (R-Iowa), a vocal biofuel backer in the Senate, said she was “extremely disappointed” in the Supreme Court decision, adding in a tweet that she’d work as a member of the Senate Environment and Public Works Committee on permitting year-round E15 sales. Ernst had pushed the Supreme Court to take on the case Friday, saying in a statement that “Iowa farmers, biofuel producers, and American consumers need certainty, and they need it now.” Pro’s Kelsey Tamborrino has more.
CALIFORNIA’S CLIMATE SPENDING: California Gov. Gavin Newsom presented new spending plans for the state Monday that include $22.5 billion for climate over six years and $2 billion over two years going toward clean energy initiatives. State lawmakers have to release a blueprint before Newsom comes up with an updated plan in May. The Legislature faces a June 15 deadline for a final budget.
Newsom framed the proposals as a chance to highlight state leadership on the climate front while federal policy stalls in the Senate. His plans include funding for offshore wind, long-duration energy storage, building efficiency, zero-emissions vehicles and support for fossil fuel workers as Newsom pushes for an “oil-free future.” Pro’s Colby Bermel has more on the clean energy plans, and Debra Khan has more on the six-year climate budget.
PENNSYLVANIA’S CAP-AND-TRADE TUG-OF-WAR: Pennsylvania lawmakers trying to get out of joining a regional cap-and-trade program hit a major roadblock Monday when Democratic Gov. Tom Wolf vetoed a resolution that would ban the commonwealth from joining the Regional Greenhouse Gas Initiative, Pro’s Jordan Wolman reports. Lawmakers now have 30 calendar days or 10 legislative days (whichever is longer) to override Wolf’s veto.
That could be a challenging threshold to meet. The resolution barring RGGI membership was not passed with the supermajorities needed to overturn a veto, even though it was backed by nearly all Republicans and several Democrats.
Pennsylvania would be the first major fossil fuel state to join the regional cap-and-trade pact, which is sending jitters to lawmakers with the interests of unionized fossil fuel workers in mind. The pact includes all of New England and most of the Mid-Atlantic, though Virginia’s Republican Gov.-elect Glenn Youngkin said he plans to take his state out of the group.
— Marty Hall, staff director for Republicans on the House Select Committee on the Climate Crisis, is heading to Citizens for Responsible Energy Solutions as a senior fellow as well as the advisory board of ClearPath. Hall was previously an environmental aide to former President George W. Bush, a senior vice president at Business Roundtable, and an executive with utility FirstEnergy. Sarah Jorgenson, a veteran of the Trump Interior Department, replaced Hall as Republican staff director Monday.
— Max Frankel is joining bipartisan governmental relations and communications firm Invariant to advise on climate, energy and environmental issues. He comes from Rep. Mike Quigley’s (D-Ill.) office, where he was legislative director.
— Daniel Schrag is joining Climate Vault’s Technology Experts Chamber, filling the seat vacated by Sally Benson, who took a job at the White House Office of Science and Technology Policy. Schrag is a professor at Harvard and previously served on President Barack Obama’s Council of Advisors on Science and Technology.
— “LG Energy Solution readies IPO to take on Chinese EV battery rivals,” via The Financial Times.
— “Extinct? Ivory-billed woodpecker spurs dispute,” via E&E News.
— “Cryptocurrency Traders Move Into Carbon Markets,” via The Wall Street Journal.
— “White House environmental official, former campaign aide David Kieve leaving,” via NBC News.
THAT’S ALL FOR ME!