BERKELEY GAS BAN NO MORE: The city of Berkeley is planning on halting the country’s first natural gas ban following a settlement agreement with the California Restaurant Association – prompting questions about the fate of similar efforts to reduce fossil fuel use.
What happened: On Friday, the association and the city of Berkeley entered into a legal agreement, with the city ceasing its enforcement of a ban on natural gas piping for new buildings. The settlement agreement was created in response to an April 2023 ruling from the Ninth Circuit that ruled the ban violated federal law – specifically the Energy Policy and Conservation Act, which allows the Energy Department to set efficiency standards and prohibits states from setting their own.
What this represents: A win for natural gas and fossil fuel groups, who have lauded the ban as costly to consumers. Jot Condie, the president and CEO of the CRA, implored for other cities and counties to follow in Berkeley’s lead, in a statement Friday.
The latest reaction: “This settlement has implications far beyond the City of Berkeley and is a significant step toward safeguarding energy choice for California consumers and helping our nation continue on a path to achieving our energy and environmental goals,” said Karen Harbert, President and CEO of the American Gas Association. “Natural gas has been one of the primary drivers for achieving environmental progress, and any ban on this foundation fuel will saddle consumers with significant costs for little environmental gain.”
Background on the ban: In 2019, the city became the first to adopt a ban of natural gas hookups in new homes and buildings. Since then, a number of California cities have followed suit and adopted their own versions of the effort – including San Diego, Encinitas, and Santa Barbara.
But last April, the U.S. Court of Appeals for the 9th Circuit ruled that the ban violated EPCA, and declined to rehear the case.
And following the April decision, cities such as Santa Cruz and Encinitas retracted their bans. Areas such as Sacramento decided not to enforce the regulations. The decision also seemed to have more wide-ranging effects, appearing to strike down gas bans across the 9th Circuit, which covers nine Western states.
But: Only time will tell how much of a precedent the court cases will have on natural gas bans across the country. New York City has also issued a similar mandate that’s facing legal challenges.
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SCOTUS REJECTS ANTIQUITIES ACT CASES: The Supreme Court has declined to take up cases that dove into the executive branch’s use of the Antiquities Act – foreclosing a chance to diminish the president’s ability to establish new monuments, E&E News reports.
Some background: Logging industry groups and a group of 15 Oregon counties requested a review of two lawsuits to overturn an Obama-era expansion of the Cascade-Siskiyou National Monument and its management plans.
The two court cases at hand, American Forest Resource Council v. United States and Murphy v. Biden, centered on whether the expansion misinterpreted the Antiquities Act of 1906, since it blocked sustained-yield timber harvests that were congressionally mandated.
However, the petitions had raised a larger question of whether the Supreme Court would curb the executive branch’s ability to label public lands as national monuments to protect natural or cultural elements, arguing that the Antiquities Act did not create “untethered presidential authority.”
Only Justices Brett Kavanaugh and Neil Gorsuch had indicated that they would hear arguments for the cases. However, it takes the vote of four justices to hear a case, with most petitions being rejected. Read more on that here.
ENBRIDGE VENTURE TO BRING NATURAL GAS SUPPLIES TO GULF COAST: Canadian crude oil pipeline operator Enbridge announced today it would form a joint venture with I Squared Capital and pipeline firms Whitewater and MPLX to help secure Permian supplies to the Gulf Coast in order to meet liquified natural gas export demands, Reuters reports.
The deal is expected to close in the second quarter, with Enbridge having a 19% stake, Whitewater and I Squared having a more than 50% stake, and MPLX holding a 30% stake in the venture.
The joint venture would include 100% interests in Enbridge’s Rio Bravo Pipeline, which connects to a Rio Grande LNG project in Texas, and the Whistler pipeline, which transports natural gas from the Permian to near the starting point of the Rio Bravo pipeline. More on that here.
EUROPE AND U.S. DIVIDE ON FOSSIL FUEL SUBSIDIES: The U.S. and the European Union are moving in different directions in talks over ending subsidies for oil and gas projects, the Financial Times reports.
Countries of the Organisation for Economic Co-operation and Development held another round of closed-door talks in Paris to discuss proposals by the E.U. and U.K. to reduce most export credit agency loans and guarantees for fossil fuel projects. This follows a 2021 agreement between countries that attended the United Nations’ COP26 summit to stop funding coal-fired power.
A source tells the FT that the U.S. was still looking over the EU’s proposals. Talks are expected to continue in June and November.
The EU’s proposal would only allow export credit agencies to back fossil fuel projects if individual OECD countries each came to the conclusion that the projects were consistent with the goals of the 2015 Paris climate accords.
However, this could affect the role of the Export-Import Bank, the U.S.’s credit export agency. Ex-Im relies on Congress for funding – which could open itself up to scrutiny from Republicans, who are adamantly opposed to reducing support for oil and gas, and liberal lawmakers that are critical of the bank’s climate record. More on that here.
LARRY FINK ENDORSES ‘ENERGY PRAGMATISM’ IN ANNUAL LETTER: BlackRock CEO Larry Fink spent some of his annual letter, released this morning, discussing “energy pragmatism,” meaning both investing in clean energy technologies to reduce emissions and funding traditional energy sources to protect energy security.
Fink highlighted several clean energy projects BlackRock has funded, and also noted that BlackRock has $300 billion invested in fossil fuels around the world.
“The point is: The energy transition is not proceeding in a straight line…. At BlackRock, our job is to help our clients navigate the big shifts in the energy market no matter where they are,” he concluded.
The background: Large asset managers, and Fink specifically, have come under fire from Republicans in recent years over their focus on environmental, social, and governance or ESG investing. Most recently, the state of Texas said earlier this month that it would withdraw $8.5 billion from BlackRock over ESG.
The financial industry has shifted some of its practices and its rhetoric in response. Fink’s latest letter is a contrast to the 2020 version, in which he said that climate change would be a “defining factor” in BlackRock’s assessment of companies.
…related – record number of climate-related shareholder proposals: A record 263 shareholder resolutions related to climate change have been proposed for this year for North American corporations, according to the nonprofit organization Ceres. The group also said that activist investors are becoming more strategic in wording resolutions to gain majority support, Reuters reported.
BlackRock, along with other major investment managers, plays a significant role in the process and has been seeking in recent years to extricate itself from being caught between climate activist shareholders and Republicans critical of ESG.
Fink noted those efforts in his letter, saying that investors are now more directly involved in voting on resolutions. “We are encouraged by their engagement and the continued transformation of the proxy voting ecosystem but continue to believe that the industry would benefit from additional proxy advisors,” he wrote.
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