News: Welcome to the 117th Congress — The $40B awaiting Biden's DOE

Monday, January 4, 2021

Welcome to the 117th Congress — The $40B awaiting Biden's DOE — Biden prepares to freeze midnight rules

Jan 04, 2021

Presented by the Arctic Refuge Defense Campaign

With help from Annie Snider, Eric Wolff and Anthony Adragna

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Quick Fix

— Lawmakers were sworn in over the weekend to the new Congress, but the make-up of the Senate and Democrats' hopes of enacting a significant portion of President-elect Joe Biden's climate change plan remain uncertain.

— Biden unknowingly left himself a down-payment for the work ahead on his climate and infrastructure plan: $40 billion in unused Energy Department loan authority awarded under the 2009 stimulus.

— The Trump administration is racing to finalize its deregulatory agenda, including issuing EPA's sweeping scientific transparency rule.

WELCOME BACK! IT'S MONDAY and I'm your host, Kelsey Tamborrino. No one got last year's final trivia question. In 1961, first lady Jacqueline Kennedy began the tradition of selecting a theme for the official White House Christmas tree in the Blue Room, the first of which was modeled after the "Nutcracker Suite" ballet. Today's question: Which Cabinet department has had the most women confirmed as secretary? Send your tips and trivia answers to ktamborrino@politico.com.

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A message from the Arctic Refuge Defense Campaign:

President Trump is trying to sell the Arctic National Wildlife Refuge to Big Oil. It's hard to imagine a riskier investment: Every major U.S. and Canadian bank has refused to fund drilling there. Seven in ten Americans oppose it. And on Day One, President Biden will take bold action to protect it as part of his climate plan. We know what a waste of money looks like. You do, too. Protect the Arctic Refuge! https://www.arcticrefugedefense.org/act/take-action

Driving the Day

WELCOME TO THE 117TH CONGRESS: Lawmakers crowded into the Capitol over the weekend to swear in the 117th Congress and to re-elect Nancy Pelosi as speaker, all while Republicans continue to challenge Biden's victory and ahead of the looming Georgia runoffs, as POLITICO's Sarah Ferris, Heather Caygle and Olivia Beavers report.

House Speaker Nancy Pelosi (D-Calif.) walks back to her office after being in the house chamber in the Capitol on Jan. 3, 2021.

House Speaker Nancy Pelosi (D-Calif.) walks back to her office after being in the house chamber in the Capitol on Jan. 3, 2021. | Photo by Tasos Katopodis/Getty Images

Republicans flipped a dozen seats in November, and Pelosi won 216 votes on Sunday to secure the speakership. "We are just an extremely slim amount of votes away from risking the speakership to the Republican Party," said Rep. Alexandria Ocasio-Cortez (D-N.Y.), who in the past has been vocal about calling for new leadership but voted for Pelosi. "It's bigger than any one of us."

Now Pelosi must navigate one of the slimmest House majorities in decades through the final days of President Donald Trump's tenure, the trio reports. One of the final gasps of Trump's term will come Wednesday as Republicans in the House and Senate will make one last, doomed attempt to overturn Biden's victory results when Congress meets to certify the election results.

And in the Senate, the two Georgia runoff races set for Tuesday will determine whether Mitch McConnell or Chuck Schumer will be majority leader. Trump is set to campaign for GOP Sens. David Perdue and Kelly Loeffler today with a rally in Dalton, while Biden will travel to Atlanta to campaign on behalf of Jon Ossoff and Raphael Warnock.

But as Pro's Anthony Adragna previously reported , Democrats' hopes of enacting portions of Biden's $2 trillion climate change plan hinges on Tuesday's outcome. Biden has vowed to make climate change one of his top priorities, but much of his strategy will need the consent of Congress to help fund an energy transition and start the country on a path to net-zero emissions by mid-century. A narrow majority in the House for Democrats will likely allow aggressive measures to pass there, but without the approval of the Senate, the incoming administration may be stuck with executive actions and regulatory moves.

Transition 2020

THE $40B AWAITING BIDEN'S DOE: Biden, who oversaw the Obama administration's stimulus work as vice president, could utilize a pot of $40 billion in unused Energy Department loan authority awarded under the 2009 stimulus to kick start his climate and infrastructure plan, POLITICO's Zack Colman reports.

DOE's loan program helped a raft of clean energy companies deploy projects across the country during the early Obama years. But it became a political target after solar company Solyndra collapsed, defaulting on more than $500 million in federal loans — even though the overall program had a far better default rate than than private lenders typically experience, according to a Bipartisan Policy Center analysis . That loan capacity had been neglected by the Trump administration.

President-elect Joe Biden announces members of his climate and energy appointments at the Queen Theater on Dec. 19, 2020.

President-elect Joe Biden announces members of his climate and energy appointments at the Queen Theater on Dec. 19, 2020. | Photo by Joshua Roberts/Getty Images

Now, advocates say the incoming Biden administration could simply tweak the loan program's language to make it the backbone of a government-wide clean lending bank that enables the rapid deployment of new innovations, like the installation of batteries and other energy storage technology to support the growth of renewable power. "There's a lot that you can do with the money that's sitting at DOE," said Dan Reicher, who ran DOE's energy efficiency and renewable energy office under President Bill Clinton.

Around the Agencies

CONSENT DECREE THROWS RFS REFINERY EXEMPTION DECISIONS INTO BIDEN'S LAP: A consent decree published today in the Federal Register gives EPA until Feb. 19 to decide whether to exempt a refinery owned by United Refining Co. in Pennsylvania from the 2019 Renewable Fuel Standard requirements. EPA hasn't made a decision on any of the 32 exemption requests for 2019 or 2020, and by this agreement Administrator Andrew Wheeler won't have to. Whoever is running EPA for Biden will have to make a decision less than a month from Inauguration Day.

BIDEN PREPARES TO FREEZE MIDNIGHT RULES: Biden transition spokesperson Jen Psaki, the incoming White House press secretary, announced at a news briefing last week that Biden — "like other incoming administrations have done before" — would issue a "regulatory freeze memo" set to take effect immediately after he is sworn in later this month, POLITICO's Quint Forgey reports. The directive "will halt or delay midnight regulations" ordered by the Trump administration that will not have taken effect by Inauguration Day, Psaki told reporters.

"The Biden administration will take swift and bold action across the federal government to roll back harmful Trump administration policies as quickly as possible on Jan. 20 and start tackling the crises the country is facing," she said.

The Trump administration has been racing a ticking clock to lock in its deregulatory efforts — meaning rules have to be not just signed, but also published in the Federal Register — before the incoming administration gets a chance to stop them. In recent weeks the Trump EPA has scrambled to issue a controversial rule rejiggering how the agency calculates the costs and benefits of air regulations out the door, as well as an update to the three-decade-old Lead and Copper Rule.

And the administration appears poised to finalize one of its biggest goals this week, with EPA's sweeping scientific transparency rule clearing review at the Office of Management and Budget last week. If the speed with which recent rules have made it into the Federal Register holds, it will be outside of the Biden administration's reach for easy reversal.

But the rule, which would limit the research the agency can rely on in policymaking, has been met with intense opposition not just from Democrats, but also public health experts and the scientific community, and could be one of the few candidates for swift repeal under the Congressional Review Act's expedited procedures, even if Republicans hold the Senate.

TREASURY EXTENDS SAFE HARBOR FOR RENEWABLE CREDITS: The Treasury Department and IRS issued guidance last week extending the safe harbor window for taxpayers developing renewable energy projects offshore or on federal land and seeking to claim the production or investment tax credits. The guidance extends the safe harbor period for eligible projects to up to 10 calendar years after the year in which construction of the project began.

GET THE BIG PRE-INAUGURATION SCOOPS IN TRANSITION PLAYBOOK: Inauguration Day is quickly approaching. Is the Biden administration ready? Transition Playbook brings you inside the transition and newly forming administration, tracking the latest from Biden world and the transition of power. Written for political insiders, this scoop-filled newsletter breaks big news and analyzes the appointments, people and emerging power centers of the new administration. Track the transition and the first 100 days of the incoming Biden administration. Subscribe today.

On the Hill

CLIMATE CRISIS PANEL RETURNS: The House rules unveiled over the weekend formally revive the Climate Crisis Committee again with jurisdiction over "policies, strategies, and innovations to achieve substantial and permanent reductions in pollution" and other contributors to climate change. It still won't have unilateral subpoena power but will be able to obtain records gathered by other committees, if they issue subpoenas. Under the rules, the panel will submit policy recommendations by the end of 2021 and issue any reports by the end of 2022. Read a section-by-section summary of the rules.

ICYMI: DEFENSE, ENERGY PACKAGE ENACTED: The Senate on Friday overrode Trump's veto of a $741 billion defense policy bill, H.R. 6395 (116), delivering a rare bipartisan rebuke to the president, POLITICO's Connor O'Brien reports. Also last week, Trump signed into law a major coronavirus stimulus package along with an annual spending bill, avoiding a government shutdown and delivering the most significant energy legislation in more than a dozen years.

TRUMP VETOES FISHERY BILL: Trump also vetoed a bipartisan bill, S. 906 (116), on Friday that would phase out large-scale driftnet fishing in federal waters off the coast of California. Trump argued the bill ignores that the regional fishery management process has had "strong, bipartisan support since its creation," and wrote that by "forcing the West Coast drift gillnet fishery to use alternative gear that has not been proven to be an economically viable substitute for gillnets, the Congress is effectively terminating the fishery." In response, California Sen. Dianne Feinstein, who sponsored the measure, said the veto ensures "more whales, dolphins, sea turtles and other marine species will be needlessly killed, even as we have a proven alternative available."

A NEW YEAR MEANS A NEW HUDDLE IS HERE: Huddle, our daily congressional must-read, has a new author! Olivia Beavers took the reins this week, and she has the latest news and whispers from the Speakers' Lobby. Don't miss out, subscribe to our Huddle newsletter, the essential guide to all things Capitol Hill. Subscribe today.

Beyond the Beltway

THE NORD STREAM 2 LATEST: The Russia-backed Nord Stream 2 pipeline is nearly complete. All that remains are two sections — one in German territorial waters and one near Denmark — but getting the final 75 kilometers (46 miles) finished this year won't be easy due to U.S. sanctions and environmental lawsuits, Pro's America Hernandez reports.

Congress' move to override Trump and pass the fiscal 2021 National Defense Authorization Act also expanded a set of sanctions targeting any company willing to certify the pipeline or provide facilities, equipment upgrades, insurance, or inspection of pipe-laying vessels involved. The law triggers a 30-day period for companies to wind down participation in the project, but also allows the U.S. president to issue waivers on a case-by-case basis if deemed in the national interest. On Sunday, Norwegian certification company DNV GL said in an email to POLITICO that it "will cease all verification activities for the Nord Stream 2 pipeline system in line with sanctions and while sanctions are in place."

The fight is now over a new German permit Nord Stream 2 will need this year, America reports. No approval for a permit to use anchor-based ships from January to May has been publicly notified so far. "The approval they are using now is only valid for December," said Constantin Zerger, head of energy and climate protection at DUH. "If there is a new permit for the new period [of January to May], we are prepared to go to court immediately."

SURVEY SAYS: The Federal Reserve Bank of Dallas' survey of oil and gas companies in the region showed its business activity index jumped back into positive territory in the fourth quarter at 18.5 from a negative 6.6 in the third quarter. It was the first positive reading since the first quarter 2019, according to quarterly survey results released last week.

Capital spending continued to decline , according to the survey, but the pace of that decline slowed in Q4. The index for capital expenditures by exploration and production firms moved into positive territory at 12.5, up from negative 16.4 in the third quarter, according to the survey. Thirty-five percent of executives said they expect capital spending will slightly increase, while 14 percent anticipated a significant increase.

The six-month outlook improved. The company outlook index rose from 1.9 last quarter to 21.6. The aggregate uncertainty index also fell 31 points to negative 13.8 — the lowest reading for the uncertainty index since its beginning in the first quarter of 2017.

For the larger exploration and production firms surveyed, 50 percent of executives said their firm plans to reduce CO2 and methane emissions, 63 percent plan to reduce flaring and 67 percent plan to recycle/reuse water. Among the smaller firms, 10 percent of executives said their firm plans to reduce CO2 emissions, 30 percent plan to reduce methane emissions, 27 percent plan to reduce flaring and 21 percent plan to recycle/reuse water. Separately, slightly more than half of executives from oil and gas support services firms said they expect their firm to generate none of its revenue from alternative energy services at year-end 2025.

A message from the Arctic Refuge Defense Campaign:

The Arctic National Wildlife Refuge is one of our nation's most majestic places. It is home to the Porcupine Caribou Herd, polar bears, musk oxen, wolves, and nearly 200 species of migratory birds. The Gwich'in people call the Arctic Refuge's coastal plain "The Sacred Place Where Life Begins." It is no place for oil and gas development. Exploiting the Arctic Refuge would trample Indigenous rights, put polar bears and other wildlife in danger, scar the land, and contribute to our climate emergency. Yet the lame duck Trump administration is barreling forward with plans for destructive oil and gas exploration and drilling. Any company willing to participate in this desperate last-minute sham will face a Biden administration that is making protection of the Arctic Refuge a top priority. Join us. https://www.arcticrefugedefense.org/act/take-action

Movers and Shakers

— Andres Hoyos was named vice president of the Zero Emission Transportation Association. Most recently, he was a policy adviser to Sen. Maggie Hassan (D-N.H.).

— Rep. Cathy McMorris Rodgers (R-Wash.), the incoming ranking member of the House Energy and Commerce Committee, announced Sarah Rogers Burke will serve as her deputy staff director; Michael Taggart as her policy director; Olivia Hnat as communications director; Emily King as director of member services; Peter Kielty as general counsel; and BJ Koohmaraie as chief counsel.