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Callie Patteson


NextImg:Daily on Energy: SCOTUS clips NEPA, Tesla advocates for IRA credits, and NY pipelines resurrected - Washington Examiner

WHAT’S HAPPENING TODAY: Good afternoon and Happy Thursday, readers! With some help from our editor Joe Lawler, today’s Daily on Energy dives headfirst into the Supreme Court’s decision today that narrowed the scope of federal environmental reviews. 

Discussions around the House-passed budget reconciliation bill continue, as many within the clean energy industry continue to call for softer phase-outs of the Inflation Reduction Act tax credits to avoid major market disruptions. Even Elon Musk and Tesla have begun to press the Senate to save many of the clean-energy incentives. 

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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.

SUPREME COURT NARROWS NEPA REVIEWS: The Supreme Court placed new limits this morning on the National Environmental Policy Act, which has, for decades, required federal agencies to study the environmental effects of energy and infrastructure projects such as pipelines, transmission lines, and highways. 

The details: In an 8-0 ruling, the high court ruled that courts should narrow the scope of reviews required under NEPA to just the environmental effects of projects, and not consider broader downstream effects. This ruling could help boost the Trump administration’s efforts to ease approvals for major infrastructure projects. 

The decision overturned a lower appeals court ruling that sided with environmentalists who accused federal regulators of failing to assess the risks to the broader environment by building an 88-mile rail line in Utah designed to transport crude oil to refineries along the Gulf Coast. 

“Simply stated, NEPA is a procedural cross-check, not a substantive roadblock,” Justice Brett Kavanaugh said in the opinion. “The goal of the law is to inform agency decision-making, not to paralyze it.” 

The opinion reads that, under the 55-year-old law, federal agencies are only required to focus on the environmental effects of projects — in this case, the rail line. 

Agreement across the aisle: All three liberal judges on the bench agreed with the final ruling, but offered different reasons. 

In a separate concurring opinion, Justice Sonia Sotomayor insisted that NEPA reviews conducted by federal agencies should be limited to the scope of their own sector. Therefore, in the case of the Surface Transportation Board, which has expertise in transportation, it would not be required to consider the effects of oil drilling and refining.

Read more from Callie here

CLEAN ENERGY DEPLOYMENTS UNDER THREAT BY HOUSE MEGA TAX BILL: The American Clean Power Association said a new report today that the amount of clean power capacity under construction or in advanced development has grown to roughly 184 gigawatts, much of which is threatened by the House-passed tax bill. 

The details: In the report, ACP estimated U.S. developers installed around 7.4 gigawatts of utility-scale solar, wind, and storage capacity during the first few months of the year. With 184 gigawatts of clean power primed for deployment on the national grid, the industry group said, this indicates clear market interest in renewable investments.

Since the end of the first quarter, however, uncertainty has spread throughout clean energy industries amid pressure from the Trump administration and Republicans in Congress. Most notably, the House of Representatives is moving to dramatically cut clean energy tax credits created or expanded by the Inflation Reduction Act through their budget reconciliation bill. 

If the legislative text remains unchanged as it is taken up in the Senate, ACP CEO Jason Grumet said, it will slow the deployment of clean energy ready to come online. “I think you would see a significant amount of it, kind of cast into uncertainty,” Grumet told Callie. 

“You’d probably slow down some of the projects, I think, because people would have to go back and kind of renegotiate contracts,” he said, warning that consumers would ultimately pay the price. “You would see unnecessary disruption in the economy for 12 to 18 months, while people kind of sort of throw a bunch of broken commitments.”

The immediate effect: It will take some time for the Senate to work through and pass its version of the reconciliation package, with some speculating the bill will be sent to the president’s desk in August. Until then, clean energy deployments and installations are expected to slow this year. 

“We just want economic sanity,” Grumet said. “And if we just have economic sanity, then again, I think you won’t see a precipitous drop…certainly this quarter, because people are just kind of holding on their decisions.”

TESLA LOBBIES FOR RETENTION OF CLEAN ENERGY CREDITS: Tesla Energy posted last night calling for a slower phase-out of clean energy tax credits in the GOP reconciliation bill, saying that “abruptly” withdrawing the subsidies would “threaten America’s energy independence and the reliability of our grid.” 

Notably, the post was retweeted by Elon Musk, who up until very recently was trying to cut federal spending through his role in DOGE and who also criticized the Republican megabill for not reducing spending further. 

Specifically, Tesla called for a “sensible” phase-out for the 25D credit for residential solar (and batteries) and the 48e clean electricity investment credit.

DEAD PIPELINE PROJECTS POISED TO BE REVIVED IN NEW YORK: Two natural gas pipeline projects are preparing to seek permission to start construction after both being abandoned within the last five years. 

The details: Sources familiar with the matter told the Wall Street Journal this week that pipeline developer Williams is preparing to file permitting paperwork with federal energy regulators to revive two projects: the controversial Constitution pipeline and the Northeast Supply Enhancement project. 

Many have speculated that the administration came to a deal with New York Gov. Kathy Hochul last week, allowing the two left-for-dead gas projects to restart in exchange for Trump allowing the massive offshore Empire Wind project off the coast of Long Island to continue construction. 

People familiar with the matter told the WSJ that Interior Secretary Doug Burgum has been a key figure in the efforts to revive the two pipelines. Approval of both pipelines would be a critical milestone in the administration’s plans to prop up the oil and gas industries, particularly as Trump has set his sights on the Constitution pipeline since his first time in office. 

Some background: The Constitution pipeline was set to be a 125-mile natural gas pipeline that would deliver natural gas from Pennsylvania to New York and New England. It first received federal approval in 2024 and was later blocked by former Gov. Andrew Cuomo through the Clean Water Act. The project was scrapped in 2020, and Trump has repeatedly called for its restart ever since. 

The second project, the Northeast Supply Enhancement pipeline, was axed in May of last year after receiving its federal approval in 2019. The project sought to expand Williams’ existing transcontinental gas pipeline system in Pennsylvania, New Jersey, and New York.

USDA NOMINEE ALREADY CLASHING WITH FOREST SERVICE: One of Trump’s picks to lead the Agriculture Department is already clashing with the department’s Forest Service over his management of federal lands.

The details: Michael Boren has been nominated to serve at undersecretary for natural resources and environment at USDA. His nomination hearing has been scheduled for next Tuesday with the Senate Agriculture, Nutrition and Forestry Committee, but drama around his leadership has already begun within the agency he would oversee. 

People familiar with the situation have told E&E News that Boren is disputing with Forest Service officials over the construction of a cabin and the clearing of land in the Sawtooth National Forest near Stanley, Idaho.

The dispute dates back to months before Boren was nominated, when the Forest Service sent a letter to one of his companies, Galena Mines. The letter, sent on Nov. 13, claimed that a cabin had been built on forest land without prior authorization and must be removed by July and the land returned to its past condition. 

The agency gave Boren’s company 45 days – a deadline which passed in January – to submit a restoration plan. It also ordered the company to have that plan completed by the start of August. 

As of this week, the issue remains unresolved. One former Forest Service employee familiar with the situation told E&E News that the agency had attempted to work with Boren in finding a solution. However, it has brought up more conflict, including where Galena Mines’ mining claims exist in the region. 

The conflict will likely be a focus on his nomination confirmation next week. 

SAUDI FINANCE MINISTER SAYS ‘CRISIS’ OF OIL PRICES WON’T BE WASTED: Saudi Arabian finance minister Mohammed al-Jadaan said that the kingdom will maintain public spending during this period of low prices to try to capitalize on any opportunities and further diversify the economy away from fossil fuels. 

“We’re not going to waste the crisis. People think that what’s happening in the world is a crisis, but our economy is doing very well,” Jadaan told the Financial Times. “It’s a chance to look at things — if there’s an opportunity to do something bold, do it.”

He added that the goal was to avoid a cycle of booms and busts associated with the oil market. Saudi Arabia has been hit by low prices and lower production.

Of note, the government is reviewing its Neom project, the ambitious project to build a line-shaped megastructure in the desert. 

Related – Kazakhstan says it cannot cut oil production: Kazakh Energy Minister Yerlan Akkenzhenov said today that his nation cannot cut oil production, as called for by OPEC+. He said that the majority of production in the country is carried out by multinational companies that cannot be instructed to pump less. 

The comments raise speculation about the outcome of the OPEC+ meeting for this weekend. Some analysts thought that the group would sign off on further production increases as a way to discipline nations that were outproducing their quotas, but Kazakhstan’s stance suggests that approach might not work. 

EUROPEAN UNION SET TO PROPOSE SOFTENED EMISSIONS GOALS: The European Union is reportedly planning to soften its emissions reduction targets for 2040 in the coming months, according to Bloomberg

The details: Diplomats with knowledge of the matter revealed to the outlet that the European Commission has told member states they will propose new climate goals for 2040 on July 2, four months after the bloc initially intended to release the targets. 

The EU is specifically considering allowing member countries to purchase international carbon credits to meet the new emission targets. The new proposal is also expected to remove sub-targets for various sectors and include provisions related to carbon removal activities. 

The bloc is expected to propose cutting emissions by 90% by 2040, a lofty goal opposed by some member countries like Poland. International carbon offsets may make that target more achievable, but these credits have also been long criticized for lack of transparency and even fraud. The EU previously banned the use of these credits in its emissions trading system over such concerns and their impact on carbon prices. 

Some background: The EU, and all other members of the U.N. Framework Convention on Climate Change, had been facing a deadline of Feb. 10 to submit 2035 targets for cutting emissions. At the time of the deadline, the EU said the bloc’s cycle of policy making did not directly line up and it planned to submit the targets in March. 


RUNDOWN

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