A climate bill with fossil fuel victories

By Scott Waldman | 07/29/2022 06:42 AM EDT

People fish off Dauphin Island, Ala., with an oil rig in the background.

People fish from a pier on Dauphin Island, Ala., with an oil rig in the background. The Senate climate package would expand oil and gas leasing in the Gulf of Mexico and on public lands. Mario Tama/Getty Images

The new climate and energy bill shaped largely by Sen. Joe Manchin includes significant wins for the fossil fuel industry that could extend carbon emissions for decades to come.

The legislation seeks to expand domestic oil and gas production while, in some cases, making the development of clean energy resources contingent on meeting fossil fuel targets. It also proposes increased hydrogen production and offers renewable energy tax credits for both nuclear and carbon capture and storage. And some provisions are conditioned on Democrats’ backing another measure that would speed up permitting for pipelines, transmission lines and other energy infrastructure.

Yesterday, President Joe Biden praised the bill and said it would be a meaningful step toward his goal of cutting emissions 50 percent by 2030, without mentioning the benefits it would provide to long-term fossil fuel projects.

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“This bill would be the most significant legislation in history to tackle the climate crisis and improve our energy security right away,” Biden said. “And it’ll give us a tool to meet the climate goals that are set — that we’ve agreed to — by cutting emissions and accelerating clean energy. A huge step forward.”

Manchin offered a different description of the bill, which he introduced Wednesday with Senate Majority Leader Chuck Schumer (D-N.Y.). The conservative West Virginia Democrat said the legislation was designed to ensure that fossil fuel resources would not be eliminated in the next decade. His office said in a statement that the measure would “hold the Administration’s feet to the fire to ensure they continue substantial oil and gas leasing.”

“We’ve got to have a robust fossil energy that does it better than anywhere in the world until we transition with the new technology — and that will happen, so you have to invest robustly in that also,” Manchin told reporters yesterday.

The bill, if passed, stands to be the largest piece of climate legislation so far adopted in the United States, reversing years of political impasses over global warming. The measure is estimated to reduce carbon emissions 40 percent by 2030, putting Biden’s goal of halving U.S. greenhouse gas emissions within reach.

Yet Manchin, who has personally profited from his family business that supplies coal to one of the most carbon intensive power plants of its size in West Virginia, ensured that the legislation offered a number of victories to the fossil fuel industry.

The bill would make the development of wind and solar on federal lands, and in federal waters, contingent on the Interior Department leasing 2 million acres of public land, and 60 million acres of offshore areas, to the oil and gas industry annually for the next decade. It would also mandate lease sales in the Gulf of Mexico and off the coast of Alaska.

Republicans and conservative media accused Manchin and Biden yesterday for driving up inflation. But a trade group for the fossil fuel industry, the American Petroleum Institute, was less critical.

“While there are some improved provisions in the spending package released last night, we oppose policies that increase taxes and discourage investment in America’s oil and natural gas,” Amanda Eversole, API’s executive vice president, said in a statement.

The legislation includes a methane fee that would rise to $1,500 a ton in 2026, potentially forcing the industry to address a major contributor to climate change. In return, the bill would provide $1.5 billion to energy companies to help control methane emissions.

There is a $7,500 credit for people who buy clean vehicles, including electric and hydrogen-powered cars. Manchin has long pushed for hydrogen vehicles, and he wants the federal government to help build a hydrogen hub in West Virginia. The natural gas industry is promoting hydrogen as a climate solution; the fuel is mostly produced using a process that’s powered by gas. Hydrogen can also be made with renewable energy.

“Hydrogen is going to be a big one here because we believe that’s a good transition, a good clean fuel that we’re able to go to that’s going to help our states and that’s going to help other states,” Manchin said yesterday.

There are additional tax credits for carbon capture projects — a process that could prevent emissions from being released into the atmosphere — while potentially forestalling the closure of power plants powered by fossil fuels. That includes more funding for the 45Q tax credit for carbon capture and storage.

The bill is a “climate suicide pact,” said Brett Hartl, government affairs director at the Center for Biological Diversity.

“It’s self-defeating to handcuff renewable energy development to massive new oil and gas extraction,” he said in a statement. “The new leasing required in this bill will fan the flames of the climate disasters torching our country, and it’s a slap in the face to the communities fighting to protect themselves from filthy fossil fuels.”

Manchin, in an interview yesterday with Hoppy Kercheval of MetroNews, a West Virginia radio show, said he focused on including benefits for fossil fuels because most Democrats didn’t appreciate that their climate goals would only work if the United States was energy independent.

“It’s hard to get people to even think that way, because they were so aspirational — ‘Get rid of all fossil, get rid of all coal, get rid of all oil, get rid of all gas, get rid of everything,’” Manchin said. “Yeah, and it would go to hell in a handbasket.”

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