The battle over a Key(stone) climate fix

Presented by ExxonMobil: Your guide to the political forces shaping the energy transformation

Jul 14, 2022 View in browser   By Arianna Skibell Presented by ExxonMobil Illustration by Claudine Hellmuth/E&E News A legal battle is unfolding in Pennsylvania that could have major implications for slashing heat-trapping pollution from the Northeast's electricity system. The fight is also a test case for using market-based approaches to tackle climate change. It's centered on the Regional Greenhouse Gas Initiative — the nation's only multistate carbon-trading program, which requires power plants to buy an increasingly limited number of pollution permits. Pennsylvania's participation is key to making the scheme more effective. That's because the state supplies the region with a huge chunk of its electricity, produced largely from fossil fuels. Cleaning up Pennsylvania's power could clean up the region overall. The fate of Pennsylvania's membership now rests with the state's high court after a group of labor unions, energy companies and Republican state senators challenged Democratic Gov. Tom Wolf's decision to join the program through an executive order. Regardless of the court's decision, the results of the upcoming gubernatorial race could still doom the effort. Wolf is term limited and both Democratic and Republican candidates have expressed reservations. Is cap and trade effective?  It can be. But it highly depends on the program. For RGGI, pronounced Reggie, the program has meaningfully decreased coal and natural gas consumption in participating states and cut planet-warming emissions by 1.3 million tons per year. It has also generated billions of dollars in revenue. In a global context, 68 countries have some sort of cap-and-trade scheme, and many are modeled after RGGI. While most are modest in scope, some — like in Europe and Canada — are not, says Barry Rabe, a professor who studies state climate action at the University of Michigan. "As the cap gets tighter, those emission reductions do appear deeper," he said. Only game in town  California operates a cap-and-trade program with Quebec, Canada. And Washington state and Oregon recently enacted their own statewide schemes. But RGGI is by far the nation's largest and longest operating multistate system, which matters in a country that has failed to enact sweeping federal climate policies. "In the absence of a comprehensive federal climate policy, [these programs] are pretty much the only game in town," said Maya Domeshek, a senior research analyst at Resources for the Future.   It's Thursday— thank you for tuning in to POLITICO's Power Switch. I'm your host, Arianna Skibell.  Power Switch is brought to you by the journalists behind E&E News and POLITICO Energy. Send your tips, comments, questions to askibell@eenews.net. Trends Greenhouse gas emissions in the United States will drop but not by enough to meet the country's commitments under the Paris climate agreement, according to a new analysis from the Rhodium Group. The decrease is largely attributable to slower economic growth projections and higher fossil fuel prices from Russia's war in Ukraine — not large policy changes, the study found. President Joe Biden pledged to slash planet-warming pollution in half by decade's end compared with 2005 levels. Under current federal and state policy conditions, the country will reduce emissions 24 to 35 percent by 2030, the study found.   A message from ExxonMobil: Producing for today. Investing in tomorrow. We're doing both. At ExxonMobil, we're investing to increase supplies of oil and gas to help meet today's demand. We're producing more oil and gas than any other American company and adding capacity to refine U.S. crude oil by 250,000 barrels per day. We're also investing over $15 billion in lower-emission initiatives through 2027 to support society's net-zero future. Learn more at ExxonMobil.com/supply   Power Centers Varistor60/Wikipedia, Rawpixel Supersized transmission With federal authority to regulate carbon limited by the recent Supreme Court decision, an $8 billion transmission project just got a whole lot more important, writes Peter Behr. The planned 2,000-mile network of electric lines called Energy Gateway will be used to transport massive amounts of wind and solar power, but much of the project remains to be developed. Read the story here. If you build it, they will come Japan's Panasonic Energy, a battery supplier for Tesla, is planning to build a $4 billion electric vehicle battery plant in Kansas, writes Jeffrey Tomich.   The project represents the largest economic development project in the state's history and is expected to result in 4,000 direct jobs. Here's the story. A time to mourn The EU's green chief, Frans Timmermans, has called for a day to memorialize the victims of climate change on the one-year anniversary of deadly floods in Germany and Belgium, writes Karl Mathiesen. "It is clear, these erratic weather patterns are a consequence of the climate crisis. And I think it's time we paid a bit more attention to those victims," said Timmermans. Read the story here. In Other News It's for science! A new project in rural Oregon is letting farmers test drive electric tractors in the name of research. Injustice: A new study shows how climate change could drive an increase in gender-based violence. Today in POLITICO Energy's podcast: Ben Lefebvre explains why a hard push by the president would probably fail to get Saudi leaders to pump new crude supplies into the world oil market. Question Corner The science, policy and politics driving the energy transition can feel miles away. But we're all affected on an individual and communal level — from hotter days and higher gas prices to home insurance rates and food supply. Want to know more? Send me your questions and I'll get you answers.   A message from ExxonMobil:   Subscriber Zone A showcase of some of our best subscriber content. A Tesla Powerwall attached to a home. | Tesla PG&E enrolled more than 1,500 customers in a virtual power plant, laying the groundwork for a valuable network of distributed resources on the shaky California grid. Toxic or magic? The battery industry is panicking over an EU proposal to classify lithium as a toxin. The nation's top 29 oil and gas producers are responsible for half of the onshore industry's total greenhouse gas emissions, a new study found. That's it for today, folks! Thanks for reading.   A message from ExxonMobil: Investing in energy and the world. At ExxonMobil, we're working to supply the reliable energy the world needs. We're investing and producing, more than any other American company, to increase supplies of oil and gas today. In fact, we are adding capacity to refine U.S. crude oil by 250,000 barrels per day—the equivalent of adding a new, medium-sized refinery. And we are investing more than $15 billion in lower greenhouse gas emissions initiatives through 2027. Increasing supplies of reliable energy and decreasing greenhouse gas emissions is not an "either/or" proposition. We can strengthen energy security and help advance the energy transition. Producing for today. Investing in tomorrow. We're doing both. Learn more about what we are doing to strengthen energy security at ExxonMobil.com/supply     Follow us on Twitter Arianna Skibell @ariannaskibell   Follow us

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