Bipartisan energy talks are in full swing while reconciliation remains on hold, and the Biden administration is establishing a new efficiency rule for commercial water heaters.
This is Overnight Energy & Environment, your source for the latest news on energy, the environment and more. For The Hill we are Rachel Frazin and Zack Budryk. Someone forwarded this newsletter to you? Subscribe here.
Bipartisan talks are gaining momentum
Pushing for a bipartisan deal on climate change, a group of about a dozen lawmakers are meeting three times in two weeks to try to draft a deal that could win 60 votes in an evenly divided Senate.
The talks, led by Sens. Joe Manchin (DW.Va.) and Lisa Murkowski (R-Alaska), appear to have picked up steam as work on a separate reconciliation package that would have included climate provisions is on hold.
But lawmakers describe discussions of the bipartisan maneuver as still relatively early days, and it’s not clear if they’ll be able to reach an agreement that satisfies enough senators on both sides.
The latest talks, held Wednesday night, focused on tax credits, which were also a key part of Democrats’ failed Build Back Better bill.
Specifically, Build Back Better had built in tax credits that were expected to benefit energy sources like solar, wind and nuclear, as well as things like batteries and carbon capture.
Some Democrats had expressed hope that the bipartisan route could be a way to get some of those loans across the finish line and onto President Biden’s desk.
“There is a way to achieve real climate action. In other words, much of what was in the Reconciliation Act could be in this bipartisan bill,” Sen. John Hickenlooper (D-Colo.) told The Hill on Tuesday.
Irreconcilable differences? When asked why the Democrats are pursuing a bipartisan strategy rather than trying to negotiate among themselves, Hickenlooper said, “We don’t have 50 votes.”
Others, however, see a potential bipartisan package running concurrently with a reconciliation bill.
Sen. Tom Carper (D-Del.) described a “two-pronged process” that would include a bipartisan climate change bill that “builds on top” of the bipartisan infrastructure bill and another that “could go beyond.”
“We can do both at the same time,” he says.
Read more about how the talks have picked up from Rachel here.
WHILE SOME FEAR THAT IT IS A STILLING MANEUVER
Democratic senators fear the bipartisan energy talks are Manchin’s smokescreen to avoid negotiating a fiscal consolidation package that some believe needs to be outlined by Memorial Day to have any chance of passing.
“We’re running out of time. The calendar is staring us in the face, and I worry we don’t have time for wasted talk,” said one Democratic senator.
A second Senate Democrat also expressed concern that Manchin, the chair of the Senate Energy and Natural Resources Committee, could eat up several weeks of the Senate calendar trying to negotiate an energy deal with Republicans without reaching an outcome, and could stall any movement on Biden’s agenda.
“I share that concern,” the senator said.
Lawmakers added that Manchin appears to be fully focused on the bipartisan energy talks that took place this week.
“Chairman Manchin seems genuinely interested in the opinions of everyone at the table,” the source said.
At this point, several Democratic senators are on the verge of giving up hope that Manchin will support any fiscal consolidation package, given his often-voiced desire to work bipartisanly with Republicans.
“I’m the skeptic on the budget balance,” said Senate Majority Leader Dick Durbin (D-Ill.). “When I came back here in January, I announced that it was not on my agenda. I really wanted to focus on anything outside of reconciliation.”
He said it’s ultimately up to Manchin and his colleague Sen. Kyrsten Sinema (D-Ariz.) to move a budget ballot bill, but he doesn’t expect it.
Read more about fears it could be a delaying tactic here from The Hill’s Alexander Bolton.
Energy proposes regulations for water heaters
The Department of Energy on Thursday announced new proposed energy efficiency rules for commercial water heaters that would require the use of condensing technology.
The department estimates the proposed rules could save up to $140 million in energy costs per year and up to $2.4 billion over 30 years. They are also expected to reduce CO2 emissions by the equivalent of 4.8 million homes and cut methane emissions by the equivalent of 2.3 million cars.
Water heaters are a major driver of energy costs, and most are a model that hasn’t been meaningfully upgraded in about a century.
A 2021 report by the American Council for an Energy-Efficient Economy estimates that they are particularly energy inefficient in apartment buildings, where they use more energy than cooling, lights, or space heating.
The same analysis estimates that replacing these units with energy-efficient water heaters would reduce their greenhouse gas emissions by an estimated 58 percent.
In commercial buildings, on the other hand, the cost of heating with gas-fired appliances accounts for nearly 20 percent of commercial building natural gas consumption, according to the Energy Information Administration.
Read more about Zack’s proposal here.
SOME STAFF NEWS
- This was announced by the White House Environmental Quality Council on Thursday Jalonne White-Newsome would serve as Senior Director for Environmental Justice. White-Newsome founded a consulting firm focused on issues such as environmental justice and climate change. Her appointment follows the departure of her predecessor, Cecilia Martinez.
- The Senate also confirmed on Thursday Kathryn Huf to head the Department of Energy’s Nuclear Energy Office by a vote of 80 to 11. As of last year, Huff was the assistant secretary of the Office of Nuclear Energy and previously an assistant professor in the Department of Nuclear, Plasma and Radiological Engineering at the University of Illinois at Urbana-Champaign.
ON TAP NEXT WEEK
- White House Environmental Quality Council Chair Brenda Mallory will testify in a hearing before the Senate Environment and Public Works Committee
- The House Natural Resources Committee will hold a hearing on “Reform of the Mining Act of 1872.”
- The House Energy and Trade Committee will hold a hearing on hydropower
- The House Foreign Affairs Committee will hold a hearing on forest conservation and climate change
WHAT WE READ
- Oil giant Shell reports highest quarterly profit since 2008 amid rising commodity prices (CNBC)
- Louisiana state legislature introduces legislation that will benefit the oil and gas industry — and her husband (Floodlight)
- West Virginia Legislative Leaders Back State-Funded Hydrogen Hub Critics Say Is a Costly Gamble (The Charleston Gazette-Mail)
- The ocean’s largest garbage heap is teeming with floating life (The New York Times)
- A sun battle in sleepy Wareham, Mass., pits environmentalists against each other (The Boston Globe)
That’s it for today, thanks for reading. Visit The Hill’s energy and environment page for the latest news and reports. We meet next week.
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