WHAT’S HAPPENING TODAY: Good afternoon and happy Friday, readers! We hope you had a good week. 

In today’s Daily on Energy, Callie and Maydeen cover oral arguments challenging the EPA’s power plant rule that aims to reduce emissions by requiring the use of carbon capture technology. 

We also cover Goldman Sachs leaving the top international green energy banking alliance, without any explanation. Then, keep reading to learn about a new bill aimed at blocking the Biden administration’s final rule on boosting and supporting domestic mining of critical minerals. 

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.

QUOTE OF THE WEEK: As President-elect Donald Trump prepares to walk back several clean energy tax credits from the Biden administration, incoming Republican Sen. Bernie Moreno of Ohio, a car dealership owner, is on-board with scrapping subsidies for electric vehicles. 

“At the end of the day, the $7,500 incentive is catastrophically stupid,” Moreno told CNBC on Wednesday, adding that the marketplace, not the government, should lead the way for any increased adoption of EVs or other changes within the industry. 

“There’s never been a case in time where consumers have been more clear about what they want and don’t want,” the Republican said. “There’s people who EVs are great for them, and good for you, that car works for you, you should go out and buy it … But for a lot of people, they don’t want it.”

ORAL ARGUMENTS IN POWER PLANT RULE CASE: Republican-led states and industry groups began oral arguments in federal court today against the Environmental Protection Agency’s power plant rule, which aims to reduce emissions by requiring the use of carbon capture technology. 

The details: The arguments were held before an appellate panel in the U.S. Court of Appeals for the District of Columbia Circuit in the case West Virginia v. EPA. 

The EPA’s rule requires new and existing power plants that plan to operate past 2039 to reduce 90% of their carbon pollution by 2032. In order to meet the EPA’s standards, power plants must install carbon capture and sequestration/storage technology. 

But petitioners argued that no power plant anywhere has successfully implemented carbon capture technology for 90% of a facility’s annual CO2 emissions. 

“EPA cannot name a single facility that has ever accomplished this rule’s mandate of a system of facility-wide, annual 90% carbon capture,” the petitioners’ lawyer, Scott Keller, said.

Agency attorney Chloe Kolman said the agency acted reasonably when implementing the rule as it relied on “extensive, direct and corroborating evidence” that this emission reduction has been demonstrated. She used the Petra Nova project in Texas, which uses CCS to reduce carbon emissions from a coal-fired power plant, as an example.

However, the rule faces risk of being overturned in the upcoming Trump administration, which has vowed to slash climate regulations. 

Read more by Maydeen here. 

GOLDMAN SACHS PULLS OUT OF GLOBAL CLIMATE COALITION: Goldman Sachs has left one of the top international green energy banking alliances without any explanation, a signal of diminishing interest on Wall Street in climate activism amid significant pushback from Republicans.

The details: The U.S. financial firm confirmed its departure from the United Nations-backed Net-Zero Banking Alliance on Friday, according to Reuters. Goldman Sachs did not explain why it would be leaving the coalition but said in a statement it would still be focusing on its sustainability goals in the future. 

“We have the capabilities to achieve our goals and to support the sustainability objectives of our clients,” the bank said, according to the outlet. “Goldman Sachs is also very focused on the increasingly elevated sustainability standards and reporting requirements imposed by regulators around the world.”

Goldman Sachs insisted it has made “significant progress” on its net-zero goals in recent years and plans to expand to additional sectors in those efforts in just a few short months. “Our priorities remain to help our clients achieve their sustainability goals and to measure and report on our progress,” the bank said. 

Some background: NZBA was launched in April 2021 in an effort to bring global banks and institutions on board with setting climate targets in alignment with the Paris Agreement. As a part of the coalition, the banks agreed to commit to an energy transition, putting them on a path to be net-zero by 2050 or sooner. It has long faced the ire of Republican lawmakers and politicians, who have accused the group of antitrust violations. 

Read more from Callie here.

REPUBLICANS INTRODUCE BILL TO BLOCK TAX CREDIT BOOSTING DOMESTIC CRITICAL MINERALS MINING: Republican Sens. Tom Cotton of Arkansas and Rick Scott of Florida have put forth a bill to reject the Biden administration’s finalized rule that seeks to boost and support domestic mining of critical minerals, reducing reliance on foreign materials. 

The details: The Republican lawmakers introduced the legislation today, claiming the Advanced Manufacturing Product Credit under section 45X of the Internal Revenue Code would in fact allow Chinese companies to “access billions of dollars in U.S. tax credits.” 

“The Chinese Communist Party has used every opportunity to exploit loopholes in our system for their personal gain. Our adversaries should not benefit from U.S. tax credits,” Cotton said in a statement. A similar bill has been introduced in the House by Republican Rep. John Moolenaar of Michigan and Democratic Rep. Jared Golden of Maine. 

What is the tax credit? The Biden administration issued finalized guidance on the rule toward the end of October, saying it would incentivize domestic manufacturing and mining of critical minerals. It primarily is geared toward manufacturers involved in the domestic production and sale of certain eligible solar and wind energy parts, qualifying battery components, and the critical minerals used in popular clean energy products such as solar panels and electric batteries. 

Specifically, the regulations allow taxpayers to claim the credit for material and extraction costs for producing critical minerals and electrode active materials. In October, the administration said this will allow for more investments in domestic mining for critical minerals, thereby strengthening national energy security and boosting the supply chain – particularly as the industry is so heavily dominated by China. Per the finalized guidance, only U.S. taxpayers are able to claim the tax credit and must have done most of the production or extraction within the U.S. to receive any of the benefits.

The final rule is currently effective as of Dec. 27.

BIDEN CLEAN ENERGY LOANS PROGRAM RACING TO FINALIZE $40.5B IN DEALS: With the incoming Trump administration expected to claw back unspent funding for green projects and climate-related measures, the Biden administration is rushing to finalize $40.5 billion worth of loans before the end of the term, according to a new report. 

The details: Through the Department of Energy’s Loan Programs Office (LPO), the Biden administration has announced around $54 billion in loans or loan guarantees for clean energy projects, such as EV factories, sustainable aviation fuel plants, or batteries. However, the office has only finalized around $13.5 billion worth of deals as of Friday, according to the New York Times. This means roughly $40.5 billion remains up in the air. 

While many of these companies that have been offered loans are working to finalize the funds before Trump takes office, some are confident that many of the projects will still receive similar loans in the next administration. For example, Indiana-based Wabash Valley Resources, which makes low-carbon fertilizer, has said their product has bipartisan value, by lowering Chinese imports and supporting rural economic development. The company is looking to finalize a $1.5 billion loan guarantee. 

“I can see why some people worry, but we don’t worry,” founder Nalin Gupta told the New York Times. “We think this project will sell itself.” 

About LPO: The LPO was first established in 2005 and has a history of supporting green technologies such as solar energy and EV giants like Tesla. The Biden administration dramatically expanded its authorities through the Democratic-passed Inflation Reduction Act, allowing the office to hand out over $400 billion, compared to the previous $40 billion. While the office has experienced some high profile failures, it has an overarching success rate. Per the New York Times, the LPO only has around 3% in losses.

BP SELLING STAKE IN U.S. GAS PIPELINES: British oil and gas giant BP is reportedly looking to sell its stake in the U.S. natural gas pipeline system. 

The details: Four people with knowledge of the matter confirmed plans to sell to Reuters, saying BP expected to raise up to $3 billion through the sale. At least one source claimed BP is considering selling up to a whopping 49% stake in U.S. natural gas pipelines. 

The move is reportedly a part of the company’s efforts to reduce debt as well as support profits and BP’s transition toward green energy. Some green investments are also at risk, though. The British company is also reportedly preparing to sell stakes in solar, particularly in its Lightsource BP venture. Stakes in U.S. based onshore and offshore wind operations are also expected to be sold, per Reuters. 

BP CEO Murray Auchincloss is expected to formally update the company’s strategy in February. 

Timing matters: It is important to note that the timing of the decision to sell comes just weeks before Trump is set to once again take office. The Republican president-elect has vowed to support the oil and gas industry, promising to “Drill, Baby, Drill” during his next administration. Trump is also anticipated to approve the controversial Keystone Pipeline, despite no push to restart construction on the pipeline.

CONSIDERING CLIMATE CHANGE’S IMPACT ON MIGRATION TO EUROPE: Executives with the European Environment Agency are warning that the effects of climate change, such as flooding, forest fires, and other extreme weather, is going to cause increased migration to Europe in the coming years – and the bloc needs to prepare. 

The details: EEA executive director Leena Ylä-Mononen recently told the Financial Times that while European leaders are considering how to handle increased migration, they must simultaneously consider climate risks. For example, climate migration strain resources, such as clean water, housing, and more. 

“It is among these overall risks that we have to take into account when we look beyond the immediate five years,” Ylä-Mononen told the outlet, adding. “Do we also regard this as a long term risk for European security and for overall wellbeing if we see that the continent is drying out and [water] will be depleted?”

The EEA released its first climate risk assessment for the EU in March, but failed to address migration issues in the report. The agency plans to include it in future evaluations. The EEA is expected to release its second climate risk assessment sometime in 2028. 

ICYMI – GRIJALVA ENDORSES STANSBURY FOR NATURAL RESOURCES TOP SPOT: Arizona Rep. Raúl Grijalva said yesterday he would endorse New Mexico Rep. Melanie Stansbury to replace him as ranking member on the Natural Resources Committee, over California Rep. Jared Huffman.

The endorsement comes as Grijalva recently announced he would drop out of the ranking member race. In a statement, he said “Rep. Stansbury has the experience, visions, policy acuity, and resolve we need to defend and further the historic progress Committee Democrats have made in charting a cleaner, safer, more just future for every American.”

Stansbury was elected to Congress in 2021. Huffman who has served in Congress and the committee since 2013 said his first action as ranking member will be to name Grijalva as “Ranking Member Emeritus.”

In a statement to The Hill, Huffman said “I’m going to stay focused on making my case to my colleagues in the 119th Congress and I am encouraged and humbled by the incredible response we’ve gotten so far.”

“My whip count is already over 150 and climbing, and that’s going to be my singular focus in the days ahead,” he added. 

RUNDOWN 

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