Friday, August 2, 2024

Can Shapiro fix Harris’ fracking problem?

Your guide to the political forces shaping the energy transformation
Aug 02, 2024 View in browser
 
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By Mike Soraghan

Pennsylvania Gov. Josh Shapiro arrives at a presidential campaign event for Vice President Kamala Harris in Ambler, Pennsylvania.

Pennsylvania Gov. Josh Shapiro (D) arrives at a presidential campaign event for Vice President Kamala Harris in Ambler, Pennsylvania, on Monday. | Matt Rourke/AP

Countdown to Philadelphia. That's where Vice President Kamala Harris on Tuesday is expected to unveil her first major decision as the Democratic Party’s nominee for president: her running mate.

Her choice of cities has turned the spotlight on the state's first-term governor, Josh Shapiro, a former attorney general who’s navigated the tricky energy and environmental politics of this electoral battleground state.

As attorney general, Shapiro took on gas industry misdeeds, I wrote yesterday. As governor, he has poured money into plugging some of the state’s 350,000 abandoned oil and gas wells. To his fans, Shapiro is credited for using a mixed bag of approaches to address years of rancor over how far to go to police the wave of drilling that's washed across the state in recent years; and for threading tough climate policy needles such as the future of a carbon cap-and-trade program.

Barry Rabe, a public policy professor at the University of Michigan, told me, "Shapiro has found a way to play good cop and bad cop."

His critics, particularly environmentalists, would like to see a lot more "bad cop."

Harris has disavowed an old position that fracking should be banned. But Donald Trump isn't going to let her forget her past position. And the "drill, baby, drill" Republican is making sure voters know it, too.

That's where Shapiro comes in. He entered the 2022 election for governor as the attorney who took on the gas drilling industry with high-profile grand jury investigations that yielded criminal charges.

As governor he's become more friendly to drilling. He entered an alliance with CNX Resources, a major driller, to gather more information about pollution from several of the company’s drilling sites. CNX and Shapiro have promoted it as "radical transparency."

He has also turned away from his predecessor's support for a regional cap-and-trade program, the Regional Greenhouse Gas Initiative (RGGI), that was unpopular with unions. He wants to replace it with a legislative proposal for a new “cap-and-invest” program for reducing climate-damaging emissions from the power sector.

‘Nothing to lose’
Pennsylvania is an energy producing state, known for its coal mines, and it's the No. 2 producer of gas in the country. But it's not like deep-red Texas or West Virginia. It has big urban areas, liberal suburbs and a proud union tradition. That keeps the state's politics purple and makes it the big-man-on-campus of the electoral college.

Those who think he's cracked the code for Democrats on energy issues point to his ability to identify popular policies. For example, Ben Storrow reported today on the success of his efforts to leverage federal dollars to plug 200 of the state's oil and gas wells. Generally, it's a win-win all the way around.

It puts people to work — often the same people who'd otherwise be drilling gas wells —and cleans up pollution.

But his newfound friendship with industry has made him some enemies. What Shapiro and his allies might see as balance, some of his former supporters in the environmental community see as a bait and switch. For example, the 2,500 foot setback recommendation in his grand jury report became, in his partnership with CNX, a 600-foot buffer for one company's new wells.

“We had so much hope, and now we feel like we have nothing to lose, really, in terms of speaking out, because we don't have any kind of seat at the table,” said Shannon Smith, executive director of FracTracker Alliance, a Pennsylvania-based watchdog group.

 

It's Friday  thank you for tuning in to POLITICO's Power Switch. I'm your host, Mike Soraghan. Power Switch is brought to you by the journalists behind E&E News and POLITICO Energy. Send your tips, comments, questions to jkirkland@eenews.net.

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Today in POLITICO Energy’s podcast: A major permitting reform bill authored by Sens. Joe Manchin (I-W.Va.) and John Barrasso (R-Wyo.) cleared its first hurdle in a Senate committee. But the legislation still faces a difficult path forward during an election year. POLITICO’s Josh Siegel breaks down what’s in the bill and the challenges ahead.

 

Live briefings, policy trackers, and procedural, industry, and people intelligence from POLITICO Pro Analysis gives you the insights you need to focus your policy strategy this election cycle. Secure your seat

 
 
Power Centers

Rendering of a green hydrogen production facility

A rendering of a "green" hydrogen production facility is shown. | iStock

'Clean' hydrogen
The Biden administration’s push to build a “clean” hydrogen industry is entering a critical phase that could determine its trajectory as a viable zero-carbon energy source, Clare Fieseler and Brian Dabbs write.

Much of the industry — and Biden’s Democratic allies on Capitol Hill — are frustrated by the Treasury Department’s delay in finalizing guidance for clean hydrogen tax credits, known as 45V for its place in the tax code. The Department of Energy is still doling out $7 billion allocated for seven hydrogen hubs from the bipartisan infrastructure law.

What’s at stake is the buildout of a nascent sector that experts say is one of the few options to decarbonize some of America’s highest-emitting industries such as aviation, long-haul trucking, steel and concrete.

Clean hydrogen refers to fuel made with low-carbon energy like renewables, or with natural gas tied to carbon capture. Today, 99 percent of hydrogen is made from fossil fuels.

A GOP trifecta
Republican senators plan to enact a slew of energy and environmental priorities if they gain control of both chambers of Congress and the White House — a trifecta enabling them to pass a filibuster-proof budget reconciliation package, Garrett Downs reports.

Greenlighting troves of fossil fuel leases to create federal revenue, investing in hydropower and zeroing out the salaries of federal employees. Some top Republicans have already expressed a desire to scrap — or at least modify — tax credits created by the Inflation Reduction Act if they take a full majority.

A re-election fight in Ohio
Ohio Sen. Sherrod Brown has bucked President Joe Biden on energy issues from electric vehicle sourcing to power plant emissions as he fights for re-election, Timothy Cama writes.

It's new territory for Brown, who previously praised Biden's pause on liquefied natural gas export facilities.

In Other News

Meet the host country: The New York Times profiles Azerbaijan, host of the next global climate talks, and its relationship to climate change.

Who's up, who's down: Exxon Mobil had a great second quarter, while Chevron didn't fare as well.

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A showcase of some of our best subscriber content.

Chevron's Richmond oil refinery seen from Point Richmond, California.

Seen is the Chevron Richmond Refinery in this view from Point Richmond, Calif., Tuesday, Oct. 24, 2023. The San Ramon, California, company posted a third-quarter profit of $6.53 billion, or $3.48 per share. Earnings, adjusted for pretax gains, came to $3.05 per share. | Eric Risberg/AP

Chevron will move its corporate headquarters from California to Houston, Texas, "the epicenter of our industry," CEO Mike Wirth said in an interview on cable news network CNBC.

The White House repeated its support for permitting legislation, but has said it is still reviewing the bipartisan Senate bill that passed out of committee this week.

Minnesota Gov. Tim Walz, a possible vice presidential pick, has made bold climate moves in the Gopher State.


That's it for today, folks. Thanks for reading, and have a great weekend!

 

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