WHAT’S HAPPENING TODAY: Good afternoon and happy Wednesday, readers! We hope you weren’t looking forward to a quiet week before Christmas, as big news keeps coming. Today, Callie and Maydeen kick things off looking at the EPA’s greenlighting of California’s ban on new gasoline cars – a rule likely to be walked back in the next administration. 

This edition of Daily on Energy also dives into happenings on the Hill, as the Senate Budget Committee held its final climate change hearing today and Republican Sen. Josh Hawley’s radiation measure was notably left out of the continuing resolution text published last night. 

Welcome to Daily on Energy, written by Washington Examiner energy and environment writers Callie Patteson (@CalliePatteson) and Maydeen Merino (@MaydeenMerino). Email cpatteson@washingtonexaminer dot com or mmerino@washingtonexaminer dot com for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.

EPA APPROVES CALIFORNIA TO BAN GASOLINE CARS AFTER 2035: The Environmental Protection Agency is allowing California to ban new gasoline car sales after 2035. But the rule will likely face cancellation attempts by the incoming Trump administration, setting up a battle between the state and incoming administration. 

The details: The EPA approved California’s Advanced Clean Cars II rule, which requires all new car sales to be zero emissions by 2035. 

“California has long-standing authority to request waivers from EPA to protect its residents from dangerous air pollution coming from mobile sources like cars and trucks,” EPA Administrator Michael Regan said in a statement. “Today’s actions follow through on EPA’s commitment to partner with states to reduce emissions and act on the threat of climate change.”

The agency also approved California’s “Omnibus” low-NOx regulation to reduce nitrogen oxide emissions from heavy-duty highway and off-road vehicles and engines. Under the Clean Air Act, California must seek a waiver from the EPA to set new pollution standards. 

Future litigation battle: President-elect Donald Trump has promised to undo many of the Biden administration’s climate policies, including the California gas car ban. 

“California has imposed the most ridiculous car regulations anywhere in the world, with mandates to move to all electric cars,” Trump has said. “I will terminate that.”

But the state is expected to fight against any challenges brought by the Trump administration. In a statement, California Gov. Gavin Newsom said “Clean cars are here to stay.” 

He added “Naysayers like President-elect Trump would prefer to side with the oil industry over consumers and American automakers, but California will continue fostering new innovations in the market.” 

Read more from Maydeen here. 

CATCHING CHINA IN THE RACE FOR CRITICAL MINERALS: A new administration has handed the United States the chance to catch up in its ever-intensifying trade war with China over critical earth minerals such as lithium, graphite, and cobalt, which are foundational for the energy industry and national security.

Some history: China has long dominated control over processing these critical minerals for various products, such as batteries, electric vehicles, solar panels, semiconductors, and more. As geopolitical concerns have grown regarding China’s influence in these markets, many nations, including the U.S., have sought to reduce their reliance on China.

This comes in tandem with a large push for renewable energy sources, electrification, and technological advancements with artificial intelligence. Given the time restrictions brought on by permitting, environmental pushbacks, and other hurdles, industry experts have said the U.S. needs to turn its attention beyond its borders to secure dominance over critical minerals. 

What people are saying: “The bottom line is certainly that the U.S. will need to cooperate and partner with many international partners in order to sort of bolster supply chain security,” Seaver Wang, the co-director of the climate and energy team for the Breakthrough Institute, told Callie. “The U.S. certainly can’t go it alone just based on what’s in our borders.”

Diego von Vacano, a professor of political science at Texas A&M University and former adviser to Bolivian President Luis Arce, explained that the U.S. needs to rethink its policies toward Latin American countries rich in minerals like lithium. “I think it’s really an opportunity to really rethink and reshape the entire U.S. view toward Latin America in a way that’s going to be a little bit more of a partnership, rather than top-down,” he said. 

Read more from Callie in the Examiner’s latest Next Frontier series here. 

RECA BLOCKED: Sen. Josh Hawley’s signature radiation exposure bill was excluded from the long-awaited continuing resolution, likely killing efforts to get the legislation passed this Congress.

Sen. Mike Lee, part of the Utah delegation opposed to the bill’s scope, brokered a last-minute compromise that gave the legislation a chance for inclusion, as reported by the Examiner’s David Sivak, but it ultimately lacked the support of House GOP leadership.

The failed deal would have been a six-year reauthorization of the bill, which compensates victims of government nuclear weapons testing, and contained a $10 billion price cap.

The House Judiciary Committee did not object to its inclusion in the CR before it went to Speaker Mike Johnson’s desk on Monday night.

Read more from David here.

SENATE BUDGET COMMITTEE HOLDS FINAL CLIMATE HEARING: The Senate Budget Committee held its final hearing on climate change today, highlighting findings from its yearlong investigation into rising insurance premiums in at-risk regions. 

The details: Democratic Chairman Sheldon Whitehouse of Rhode Island kicked off his final hearing leading the committee Wednesday morning, claiming the committee had found that areas prone to higher risks of climate changes (such as flooding, extreme weather, and fires) saw a correlation with higher non-renewal rates from insurance providers. 

The report alleged that climate change is primarily driving an increase of non-renewal rates, despite Republican assertions that there are a variety of factors. Witness Robert Hartwig, a clinical associate professor of finance at the Darla Moore School of Business with the University of South Carolina, insisted to the committee that population growth, inflation, litigation and fraud all had more of an impact on insured loss than climate change. While he did affirm climate change plays a factor, Hartwig said these demographic pressures are carrying more of the weight. 

Towards the end of the hearing, Whitehouse hit back against Hartwig’s blame on litigation, claiming “a great deal of litigation has to do with the way the insurance industry treats its customers.” 

“If you want less litigation, pay the damn claims,” the Democrat said. “Be solvent, pay the claims, pay them quickly, pay them fully and then the litigation abates.” 

Market reaction: Key industry players, like the American Property Casualty Insurance Association have also spoken out against the assertion that climate change is the prime driver of non-renewals and higher rates. The trade association has also pointed to various state regulations that can interfere with affordable consumer rates. 

INSPECTOR GENERAL CALLS ON ADMINISTRATION TO PAUSE DOE LOAN PROGRAM: In an unprecedented move, the Office of Inspector General is calling on the Biden administration to pause the Department of Energy’s loan program – as the administration has been rushing to finalize loans in its final weeks. 

The details: Yesterday, the same day the Loan Programs Office announced a conditional commitment for a loan guarantee of $15 billion, the DOE’s independent watchdog recommended pausing all work on loans and loan guarantee packages over conflict of interest concerns. 

Teri Donaldson, the Inspector General, wrote in interim findings that the LPO failed to ensure “a regulatory and contractually compliant and effective system to manage organization conflicts of interest” when handing out loans. The OIG indicated that this opened the door for potential risk of fraud, waste, and abuse of the loan program’s authority. 

The interim findings accuse the LPO of failing to track contractors who may be serving in the loan programs office as well as potential borrowers, as well as conflict of interest disclosures or waiver requests for loans. 

While the OIG has yet to issue a full report with official recommendations for the LPO, the inspector general is still asking the DOE to “put into abeyance” all packages for loans or loan guarantees. 

The response: Officials with the LPO have denied any wrongdoing, responding to the inspector general in a letter last week saying the office is in compliance with the DOE’s conflict of interest rules and the Federal Acquisition Regulation. 

“LPO has a robust system in place for identifying and mitigating organizational conflicts of interest through active communication with its partners and by holding them contractually accountable and financially liable for compliance. This approach has worked for the last 15 years and continues to work,” LPO director Jigar Shah said, later adding that the interim findings were based on “mistaken facts and a misunderstanding of the law.” 

CHAIRMAN WESTERMAN ON THE FUTURE OF PERMITTING REFORM: House Natural Resources Committee Chairman Bruce Westerman said lawmakers failed to reach a deal on permitting reform because senators would not agree on his bill that he said would have “fixed the broken process” of the National Environmental Policy Act (NEPA). 

Earlier this week, a bipartisan group of lawmakers were unable to reach a deal on permitting reform. One of the main concerns Democrat lawmakers had was Westerman’s legislation that they say would gut NEPA, a law that requires environmental reviews of federal projects. Republicans claim that the current process slows down many essential energy projects. 

In a statement today, Westerman said: “House Republicans have worked on permitting reform for years because we know the detrimental impact the broken and litigious permitting process has on our country. Senators Manchin and Barrasso’s bill, which only passed out of committee and not the full Senate, addressed some reforms but needed the House NEPA provisions to strengthen it.” 

Senators like Environment and Public Works Committee Chairman Tom Carper refused to include all of Westerman’s NEPA reforms into the deal. Carper said Democrats provided Republicans with “meaningful” NEPA reform that would help quicken project timelines. 

Now, Republican lawmakers next year will attempt to enact their own permitting reform bill. 

“Ultimately, progress stalled because of a failure to agree on legislative text that would have fixed the broken process. Compromise can’t be one sided and House priorities were watered down or ignored, which would have resulted in a permitting reform bill in name only. America still desperately needs commonsense reforms that allow our industries to build and our workers to compete,” Westerman said. 

“I look forward to working in the next Congress with President Trump and a Republican House and Senate along with those across the aisle who desire meaningful permitting reform,” he added. 

BILL GATES TO GIVE $40 MILLION TO CANADIAN CARBON REMOVAL COMPANY: Bill Gates’s Breakthrough Energy firm will give $40 million to the Canadian company Deep Sky to build a large scale carbon removal research and testing center. 

The funding will help to build the “Deep Sky Alpha” facility to research and test direct air capture technologies (DAC) to help lower the cost of large-scale commercial carbon removal, according to the press release. The facility is expected to be operational by the Spring of 2025. 

“Securing support from Breakthrough Energy Catalyst marks another milestone for our company and for the DAC industry,” Deep Sky CEO Damien Steel said. 

Steel said that “the partnership with Breakthrough Energy Catalyst and their expertise into what it takes to build projects at scale has already been transformative to Deep Sky.”

GLOBAL COAL DEMAND SET TO REACH NEW HIGH IN 2024: Global coal demand is expected to reach a record of 8.77 billion tonnes in 2024, according to a new report by the International Energy Agency (IEA). 

IEA’s report said “the power sector has been the main driver of coal demand growth, with electricity generation from coal set to reach an all-time high of 10 700 terawatt-hours (TWh) in 2024.” 

China’s coal demand this year is expected to grow 1%, reaching a record level of 4.9 billion tonnes of coal. India is also expected to see demand growth of over 5%, reaching a level of 1.3 billion tonnes of coal. Meanwhile, coal demand in the European Union and the U.S. continues to slowly fall. It is on track to decline by 12% and 5% this year, compared with 23% and 17% in 2023, the report said. 

The report added that coal demand is expected to plateau in 2027, at about 8.87 billion tonnes. Although many nations are reducing their use of coal, the report noted that countries like India, Indonesia and Vietnam are expected to increase coal demand, which will offset the decline. Coal demand trends will also depend on China, which is the largest consumer of coal. 

“The rapid deployment of clean energy technologies is reshaping the global electricity sector, which accounts for two-thirds of the world’s coal use. As a result, our models show global demand for coal plateauing through 2027 even as electricity consumption rises sharply,” said IEA Director of Energy Markets and Security Keisuke Sadamori. 

“However, weather factors – particularly in China, the world’s largest coal consumer – will have a major impact on short-term trends for coal demand. The speed at which electricity demand grows will also be very important over the medium term,” Sadamori added. 

SAM ALTMAN’S NUCLEAR VENTURE ANNOUNCES 20-YEAR DEAL TO POWER AI: Nuclear startup Oklo has announced its plans to enter a massive power agreement to support artificial intelligence advancements and the growth of data centers over the next two decades. 

The details: Oklo, backed by OpenAI’s Sam Altman, revealed today an agreement with data center operator Switch to deploy 12 gigawatts of power via small modular reactors (SMRs) through 2044. The nuclear start up has said it plans to develop, construct, and operate these smaller nuclear facilities to support Switch’s datacenters. 

Compared to large nuclear facilities, SMRs are known to have a smaller physical footprint and historically take less time to build, allowing the facilities to come online and supply energy sooner. It remains unclear how many SMRs Oklo plans to build, though each reactor traditionally generates upward of 300 megawatts of power. There are currently no SMRs operational within the U.S., and only three are operational worldwide.

Important to note: Oklo has claimed the agreement is one of the largest corporate power agreements in history. There is a chance, though, it may not come to fruition, as the 12-gigawatt deal is non-binding. Some industry experts have cast doubt on the likelihood Oklo will be able to deliver the power. 

“These agreements do not appear to be the kinds of serious, substantial, and sustained financial commitments — on the order of many billions of dollars over decades — that would be necessary to fully realise these speculative nuclear projects,” Edwin Lyman, the nuclear power safety director for the Union of Concerned Scientists, told the Financial Times. 

RUNDOWN 

Associated Press  Global demand spurring Indonesia’s mining boom comes at a cost for many communities

The Guardian  Dear Santa, please bring back the plastic lids on yoghurt pots

The New York Times Insurers Are Deserting Homeowners as Climate Shocks Worsen