Reality Checks on Biden’s Climate Agenda

Copyright © 2023 Energy Intelligence Group All rights reserved. Unauthorized access or electronic forwarding, even for internal use, is prohibited.

The Biden administration has framed its climate agenda as the most ambitious of any US president to date. Six months in, however, obstacles are starting to pile up as the administration tries to meet some of its topline policy goals. Political and legal question marks now arise with respect to two high-profile objectives: clean energy infrastructure spending to include a clean electricity standard with implications for future gas demand, and curbs on new oil and gas leasing. The administration set fresh targets for cutting emissions 50%-52% from 2005 levels by 2030, against the backstop of a growing level of Democratic skepticism around the length of gas’ role as bridge fuel (WGI Jun.9'21). Broadly, the administration has focused on casting a wide net on climate policy, going all-in on multiple policy and legislative tracks to bolster clean energy development and emissions reductions, including carving out a strong role for carbon capture. One of the few “sticks” the Biden administration has levied against the oil and gas sector, barring new oil and gas leases, has already come under legal rebuke. A federal court last month held that the action overstepped federal authority. While it dealt a blow to Joe Biden’s upstream curbs, the court ruling fell short of forcing fresh lease sales, however. That leaves the administration with some levers left to scale back federal drilling access. On the legislative front, Biden faces more challenges, with the more ambitious clean energy components of his infrastructure package now parsed from a bipartisan agreement and funneled into a larger budget reconciliation package. With a razor-thin 50-50 majority in the Senate, Biden is playing an extreme balancing act in the legislative process that leaves the fate of the more aggressive pieces of the package, like a clean electricity standard, somewhat up in the air. Most recently, Biden walked back a veto threat to the bipartisan infrastructure bill unless the Senate also moved on the broader, climate-heavy infrastructure package. And key swing vote Democrat Sen. Joe Manchin drew a line under his willingness to go along with a broader measure, saying he would only support a price tag of “$1 trillion or $1.5 trillion or maybe $2 trillion and what we can pay for.” That falls short of what Biden and left-leaning Democrats have outlined, and the political machinations are shifting quickly, meaning nothing is a guarantee. The past few months have yielded some marginal victories: the nixing of the Keystone XL Pipeline, a pledge to end fossil fuel financing for overseas projects, and modest strides toward stronger federal methane rules. To the latter, the House voted last week to restore Obama-era methane standards for oil and gas operations undone during the Trump administration, which saves the Biden administration some groundwork as it works to beef up federal methane controls and set first-time emissions targets for existing production. The more aggressive moves were always going to take time and political capital, but the Biden administration is also acutely aware of the dangers of letting the more ambitious parts of its agenda butt up against midterm elections next November.

Low-Carbon Policy
Wanda Ad #2 (article footer)
Some extra Russian piped volumes are expected into Europe, but trust in Moscow as a reliable supplier is gone, industry insiders say.
Tue, May 30, 2023
Mexico's overall LNG exports are expected to grow quickly as well, with the US supplying much of the gas.
Mon, Jun 5, 2023
The two weeks of talks in Bonn are meant to prepare the ground for the main COP28 climate negotiations in the UAE later this year.
Mon, Jun 5, 2023