Biden Agrees to Infrastructure Compromise

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US President Joe Biden on Thursday announced that he is backing a bipartisan $1.2 trillion infrastructure proposal that includes some energy funding but leaves out more aggressive climate actions such as a clean energy standard. Biden said the proposal, which reportedly includes $579 billion in new infrastructure spending, would mean “transformational and historic investments” in clean transportation and power infrastructure as well as improving climate change resiliency. The compromise plan, engineered by a group of Democratic and Republican senators, would include $7.5 billion in electric vehicle (EV) charging infrastructure and $73 billion for beefing up the nation's power sector and electric grid, according to a breakdown obtained by NBC News. The package will reportedly be funded by repurposing unused pandemic relief funds, reducing the tax gap, and other potential funding mechanisms, including a $6 billion sale of crude oil from the US Strategic Petroleum Reserve. Narrowing Window Biden's endorsement of the compromise proposal effectively leaves congressional Democrats with only the partisan budget reconciliation process to secure more ambitious clean energy measures such as a clean energy standard to facilitate 100% clean electricity by 2035, eliminating tax breaks long utilized by US oil and gas producers, and other Democratic clean energy infrastructure priorities. Biden has already stated the bipartisan compromise must be followed up by a larger package that incorporates more climate spending and other priorities outlined in his American Jobs plan earlier this year (OD Mar.31'21). But his endorsement of the slimmed down compromise could make progressing a more ambitious climate-focused package more difficult. The Senate Energy & Natural Resources Committee held a hearing to discuss a legislative draft bill offered by Sen. Joe Manchin (D-West Virginia) that includes a number of energy investments that could make their way into the larger bipartisan package (OD Jun.22'21). Those include a $5 billion federal program for plugging and remediating wells on federal land; bolstering natural gas transmission lines; more than $2.5 billion through 2025 for large-scale carbon capture demonstration projects; new investments for CO2 pipelines; and more than $500 million for bolstering the critical mineral supply chain for EVs and batteries. Bridget DiCosmo, Washington

Security Risk , Low-Carbon Policy, Policy and Regulation, Electric Vehicles, Fiscal Terms
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