White House Climate Goals: The Great Disconnect
Self-Inflicted Agenda Wounds: Rolling into 2023, we thought it would be GOP attempts to roll back the Inflation Reduction Act (IRA) that kept us on our heels. To be sure, Republicans have repeatedly delivered on their pledges to attack the law, with wholesale IRA repeals passing the House (only to go nowhere in the Democratic-controlled Senate). But those repeal efforts appear somewhat half-hearted compared to the intensity of the years-long GOP campaign to repeal Obamacare or the party's efforts to undo the Massachusetts vs. EPA Supreme Court decision and attempts to regulate greenhouse gas (GHG) emissions under the Clean Air Act that followed (including everything from a congressional vote to disapprove of the so-called 'endangerment finding' to 28(!) states successfully challenging in court the Clean Power Plan that it was supposed to have enabled).
The apparent rationale for GOP attempts to repeal the IRA has been much more mundane: they needed a pay-for to help offset a $1.5 trillion increase in the debt ceiling or, in a later bill, to offset the cost of extending expiring breaks from the 2017 tax overhaul.
Less apparent but equally challenging is a series of unforced errors by Democrats on several fronts that threaten to serve as a drag on the Biden administration’s clean energy goals:
Joe Manchin, again – Last week saw a real scare as the man who pretty much wrote the IRA prepared several amendments to the Financial Services and General Government appropriations bill, which funds the Treasury Department and IRS, that would have dramatically limited the ability to claim IRA tax credits for everything from offshore wind development to electric vehicle purchases.
Federal Land – You would think that the Bureau of Land Management (BLM), which serves as the landlord for nearly 40 percent of the 640 million acres owned by the federal government and has a statutory directive from Congress to permit 25 gigawatts of renewables on public lands by 2025 (we currently have about half that amount) would be, well, helpful. But the clean energy industry’s experience with BLM has been a mixed bag, at best. On the one hand, renewables are poised to get some relief from rental and megawatt capacity fees, On the other hand, we also have the proposed BLM Public Land Use Planning Rule, which poses a major threat to all development on federal lands, including renewables, as currently written. The opposition is uniting unlikely allies as criticisms have been levied from groups representing renewables, oil and gas, mining and grazing interests, and the proposed changes are already causing a Capitol Hill stir. House Republicans advanced a bill (H.R. 3397) out of the Natural Resources Committee in June that would prevent the Department of Interior from finalizing the rule, and similar language is expected to be attached to their Interior-Environment spending bill. Moderate Senate Democrats – as many as six senators in Western swing states – expressed similar unease, making a Congressional Review Act (CRA) disapproval resolution almost certain to make it to the White House if it becomes final.
Domestic Content – Recent guidance on the ability to claim this IRA adder was so stringent it rendered the credit mostly unusable. Compounding matters are the serious headwinds facing nearly every project in America that has been even remotely close to producing the commodities needed for domestic manufacturing of any kind, including clean energy technologies. While acknowledging the importance of critical minerals for the energy transition, the Biden administration has repeatedly made it more difficult to produce them domestically. Just a few recent examples:
The administration’s decision NOT to appeal the existential threat of the 9th Circuit’s Rosemont Copper decision last year;
The May decision to hit pause on Resolution Copper’s development plans in Arizona;
Canceling Twin Metals Minnesota’s mineral leases in the Superior National Forest in January;
Reversing its earlier approval of the Ambler Access Road in northwestern Alaska (and later sending mixed signals on the timeline for revisiting the decision); and
Revoking a Clean Water Act permit for the NewRange Copper Nickel mine in northeastern Minnesota.
Trade Policy – President Biden extended Trump's Sec. 201 safeguard measure on imported solar panels by four years (though the bifacial exclusion was made permanent). But even more problematic was the administration’s decision to initiate an AD/CVD circumvention investigation sought by these guys and – only because they changed the standard during the course of that investigation – found that circumvention was occurring. Luckily, the industry managed to avoid tariffs as high as 254 percent, retroactive to April 1, 2022, and totaling an estimated $2.3 billion in costs, only because the president decided to provide two years of relief from expanded duties.
Summing Up: To be sure, the Biden administration has brought renewed focus and vigor to clean energy development, and deserves applause for other actions in this arena. But there’s a growing disconnect between the White House’s lofty climate goals and the sprawling federal apparatus that is supposed to help make it happen. The private sector is doing its utmost to utilize the IRA and achieve Biden’s decarbonization goals. It would behoove the bureaucracy to pay attention to what ALL of the administration is doing and consider whether policies are helping or hindering the president’s climate goals.
