Tax titles day 2September 15, 2021
With help from Zack Colman, Alex Guillén and Kelsey Tamborrino
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— Democrats on the House Ways and Means Committee beat back GOP efforts to alter sweeping energy tax provisions, but the committee isn't done yet with the reconciliation package, which also faces hurdles in the Senate and in some clean energy corners.
— The House Energy Committee sent through measures for a Clean Electricity Performance Program and methane fees for the oil and gas industry, crucial priorities for environmentalists.
— FERC issued an emergency authorization for a Spire pipeline in Missouri, but its operators are mulling appealing the matter to the Supreme Court.
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WHERE THE TAX BITS GO FROM HERE: The House Ways and Means Committee is continuing its mark up of tax measures under the reconciliation plan today after fending off a number of attempted Republican amendments to Democrats' green energy tax breaks on Tuesday.
"Climate change is one of the most catastrophically dangerous challenges confronting our nation. It's already causing increased wildfires, drought, flooding and severe storms," said Chair Richard Neal (D-Mass.) at the start of the markup Tuesday. "If we don't take bold action, these phenomena will only intensify in the coming years as the planet continues to warm."
Every GOP amendment to the green energy tax measures got shot down by Democrats, including an amendment from Rep. Drew Ferguson (R-Ga.) that would decrease the maximum income threshold for electric vehicle tax credits. Other Republican amendments included measures to eliminate the direct-pay option for green subsidies and to cut the eligibility for commercial EV tax credits for any business with income over $5 million; strike the green title in its entirety; and to suspend Superfund excise taxes when gas prices exceed $3 per gallon and when inflation exceeds 2.5 percent. The committee recessed late Tuesday until 9 this morning. Kelsey Tamborrino breaks it down for Pros.
Once the legislation is out of committee, House Democrats will still have to contend with Senate counterparts who have been eyeing other ways forward on the energy front. Senate Finance Chair Ron Wyden wants to consolidate more than 40 energy tax breaks into a handful of technology-neutral provisions. And Wyden and other Senate Democrats still have to keep their eyes out for how much progressive zeal will fly past moderates, namely Sens. Joe Manchin and Kyrsten Sinema. Pro’s Brian Faler has the 30,000-foot view of Democrats’ tax push.
And not everyone in the renewables space is thrilled with the tax titles. The National Hydropower Association was dismayed that the House legislation didn’t include bipartisan measures introduced this summer that would offer 30 percent investment tax credits to improve dam safety, environmental improvements and grid resiliency. Almost 50 hydropower asset owners and developers wrote to congressional leadership urging the inclusion of the investment tax credit. Still, the trade group noted hydropower could benefit from a 10-year extension to the hydropower production tax credit in the House plan, though at lower values than wind and solar.
The Carbon Capture Coalition also expressed its concerns with changes to the 45Q tax credit for carbon removal. The group contested new percentage requirements for captured carbon levied at entire facilities, saying doing so would hinder industrial facilities and power plants from benefiting from the tax credit and deploying carbon capture.
“Not only does this essentially re-write 45Q, the requirement runs fundamentally counter to how projects are developed and will block deployment of carbon capture technologies at both industrial and power generation facilities,” said Jessie Stolark, Carbon Capture Coalition public policy & member relations manager, in a statement. Stolark did however praise the committee’s extension and direct pay option for the 45Q tax credits.
CEPP AND METHANE FEES ADVANCE: The House Energy and Commerce Committee made it through the energy portions of its part of the reconciliation bill, advancing some of Democrats’ key climate provisions after a two-day markup marathon, Pro's Zack Colman and Alex Guillén report.
Among them were the Clean Electricity Performance Program, which uses incentives and penalties to entice a transition to renewable energy, and a fee on methane for the oil and gas industry, which got considerable resistance from the fossil fuel industry and Republicans. Rep. Kurt Schrader (D-Ore.), a centrist Democrat who was part of the cohort threatening to tank reconciliation unless there were commitments from leadership on the bipartisan infrastructure bill, joined Republicans in voting against the CEPP and methane portions. The committee also took on a number of health items that ME’s health care colleagues break down here.
AND ON THE CARBON FRONT: Major elements of Democrats’ $3.5 trillion budget plan could shave between 830 and 936 million tons of carbon dioxide equivalent emissions in 2030 compared with current policies, according to an analysis by climate modeling firm Rhodium Group. The firm tracked “big-ticket items” in the plan, such as tax credits for renewable energy and electric vehicles, the CEPP, rural cooperative decarbonization funding, an oil and gas methane emissions fee and soil conservation and reforestation programs. It found the power sector accounted for 583 to 715 million tons of those reductions, followed by 96 to 113 million tons from fossil fuel production, 65 to 97 tons from from transportation and 44 million tons from natural carbon removal.
EPW SCRUTINIZES EPA NOMS: The Senate Environment and Public Works Committee is scheduled to consider three EPA nominees this morning: David Uhlmann to run enforcement, Carlton Waterhouse to head the Office of Land and Emergency Management, and Amanda Howe to run the Office of Mission Support. Uhlmann may face questions about his experience in criminal environment enforcement when the bulk of EPA’s work is civil.
Republicans may also train their fire on Waterhouse, who in addition to environmental justice experience has a long-standing expertise in critical race theory and reparations; Republicans attacked Office of Personnel Management nominee Kiran Ahuja earlier this year over her past support for CRT before she was narrowly confirmed. There have already been some stories about Waterhouse in the conservative press featuring pot-shots from Sen. Tom Cotton (R-Ark.), who is not on EPW. “Those kinds of distortions just misrepresent really what I've fought for and the kinds of things that I've been advocating for,” Waterhouse told BuzzFeed News.
Postponed: The committee had planned to vote this morning on other nominees — including Jeffrey Prieto to be EPA's general counsel, Michael Connor to run the Army Corps of Engineers and three picks for the Chemical Safety Board. But the vote has been bumped to Sept. 22.
LET OUR NOMS THROUGH: Secretary of State Antony Blinken pushed for senators to confirm post haste remaining diplomatic and national security nominees, including those stonewalled by Sen. Ted Cruz (R-Texas) over the administration's stance on the Nord Stream 2 pipeline. Cruz and Sen. Pat Toomey (R-Pa.) wrote to Banking Chair Sherrod Brown (D-Ohio) and Foreign Affairs Chair Bob Menendez (D-N.J.) on Monday saying they would stop resisting nominees if the administration imposes sanctions on the pipeline's operator.
"It is essential that we accelerate the process for national security appointments since a catastrophic attack could occur with little or no notice," Blinken said during a Senate Foreign Relations Committee hearing Tuesday on Afghanistan. Reuters has more on Blinken's remarks at the hearing. POLITICO's Andrew Desiderio has more on the rest of the hearing.
SPIRE LIVES ANOTHER DAY: FERC pushed off a potential shutdown of the Spire STL pipeline by issuing an emergency authorization for 90 days as the commission continues to consider whether shutting down the pipeline would jeopardize the St. Louis service region’s energy supplies. Spire has been pushing FERC to issue an emergency measure to keep the gas flowing after a June court order vacated the commission’s authorization for the pipeline. Though the Tuesday action buys Spire some more time, it isn’t ruling out taking the case to the Supreme Court.
“We would explore all legal and regulatory paths available to us to ensure the continued operation of this pipeline to serve customers in the St. Louis region. ... We need to still follow the path that gets us to permanent reissuance for this pipeline, because it has become such an integral critical energy infrastructure for the region,” Sean Jamieson, general counsel for the STL Pipeline, told Pro’s Catherine Morehouse. Catherine has more here.
VERMONT SUES OIL MAJORS OVER CLIMATE CHANGE: Vermont on Tuesday joined the fraternity of states and localities suing oil and gas companies over climate change. In a suit filed in state court, Attorney General T.J. Donovan alleged 11 oil and gas firms violated the prohibition on deceptive acts and unfair business practices of the Vermont Consumer Protection Act for selling fossil fuel products without describing their impact on climate change, echoing claims made by other states in recent years. “For years, these companies have misled the public about the real and significant impacts of fossil fuels on our environment and public health,” Donovan said.
SUNSETTING EXPORT CREDITS FOR UNABATED COAL: The Treasury Department announced the U.S. will join other industrialized countries in proposing to stop using export credits to finance coal plants without carbon capture technology. Others sponsoring the initiative include the EU, South Korea, Norway, Switzerland and the U.K., who will link up on the initiative today at an OECD committee meeting.
Japan, however, will be the sole G-7 nation standing on the sidelines of this effort. While the G-7 this summer agreed to end government support for unabated coal, the nations reportedly struggled to bring along Japan, whose government is a leading financier of overseas coal-fired power plants and technology. Approval of the policy requires unanimous consent from an Organization for Economic Cooperation and Development panel, the Treasury Department said. Japan is a member of that panel on export credits. Pro’s Zack Colman has more.
TAKING A TECH MODEL: OECD Secretary General Mathias Cormann feels global policy makers could take a page out of the global digital tax playbook in coming up with an international carbon pricing scheme. Cormann shared the vision with POLITICO Europe’s Bjarke Smith-Meyer, referring to a recent deal among 134 countries to tax the 100 biggest multinational companies and create a global minimum corporate tax race of 15 percent. “Without a sufficiently ambitious multilateral commitment, we will not get to global net zero,” Cormann wrote in a pitch to EU finance ministers. Read more from Bjarke.
CHEVRON’S LOW CARBON BOOST: Chevron is planning to spend $10 billion through 2028 on low carbon technology, increasing its previous commitment of about $3 billion, The Wall Street Journal reports. That means investments in biofuels, hydrogen production, carbon capture and other technologies. The investment would be about 10 percent of the company’s capital spending, eclipsed by its bread and butter investments in fossil fuels. The investment does not include forays into solar and wind, which Chief Executive Mike Wirth told the Journal were already mature industries with meager yields for the company. Read more from the Journal here.
— Doug Boren was named regional director for the Bureau of Ocean Energy Management’s Pacific Office in Camarillo, Calif. Boren previously served as the regional supervisor for BOEM’s Pacific Office of Strategic Resources.
— “Colonial Pipeline partially resumes as Nicholas brings rains, wind,” via Reuters.
— “Norway’s ‘Climate Election’ Puts Center-Left in Charge,” via The New York Times.
— "Colorado looks to be ahead of Biden’s called-for pace on renewable energy," via The Denver Post.
— “Spain to claw back €3bn from utility groups as energy prices soar,” via The Financial Times.
THAT’S ALL FOR ME!