Both Sens. Joe Manchin (D) and Charles Schumer (D) say an upcoming stopgap bill will feature permitting reform, Treasury Secretary Janet Yellen is set to make a big promise on fossil fuels and the Federal Reserve will pilot climate risk analysis.
Manchin: Permitting reform promised for funding bill
Sen. Joe Manchin (D-W.Va.) said Wednesday that Democratic leadership told him the permitting reform he has pushed for will be included in a government funding measure known as a continuing resolution.
“Permitting is in,” he said.
Asked Wednesday whether he was told by leadership that the reforms would be included in the funding measure, he answered affirmatively.
The story so far: Manchin, the Senate’s most conservative member and a key swing vote, has pushed for legislation that would speed up the process for approving energy and infrastructure projects.
When Manchin announced his support for the Democrats’ climate, tax and health care bill this summer, he and Senate Majority Leader Charles Schumer (D-N.Y.) said in a joint statement that they would separately pass a deal to reform the permitting process for these projects as part of the deal.
But the push has come under fire from progressives, led by Rep. Raúl Grijalva (D-Ariz.), who have raised concerns about the potential for undermining environmental reviews and helping the fossil fuel industry.
Grijalva, who chairs the House Natural Resources Committee, has circulated a letter asking leadership to separate the Manchin deal out of the continuing resolution.
His office told The Hill last week that they had more than 40 signatories so far and were still circulating at that time.
He has argued that these measures are largely ones that are supported by Republicans and shared concerns with environmentalists that expedited reviews could harm vulnerable groups.
Senate Majority Leader Charles Schumer (D-N.Y.) promised on Wednesday to pass a side deal on permitting reform with Manchin despite growing opposition from progressive House Democrats.
Schumer said he will put permitting reform legislation that would speed the development of fossil fuel and other energy projects in the stopgap spending measure Congress needs to pass to keep the federal government funded beyond Sept. 30.
“Our intention is to add it to the CR,” Schumer told reporters Wednesday, referring to the short-term continuing resolution to fund the government, which he said must get passed this month.
The decision will make it tougher for House progressives, who feel little obligation to help Manchin pass one of his top energy development priorities, to block it.
Yellen: US to ‘rid’ itself from fossil fuel dependence
Treasury Secretary Janet Yellen is set to call out the fossil fuel industry in a Thursday speech on the Biden administration’s economic agenda to be delivered in Detroit, Mich., where oil and gas companies have long held influence in the U.S. auto manufacturing sector.
The visit to Detroit comes on the heels of the Democrats’ passage of the Inflation Reduction Act (IRA), which includes $14.2 billion worth of subsidies for electric vehicles meant to wean the auto industry off of gasoline in an effort to reduce U.S. transportation emissions that are contributing to a rise in global temperatures.
- “We will rid ourselves from our current dependence on fossil fuels,” Yellen’s prepared remarks say.
- “Our plan — powered by the Inflation Reduction Act — represents the largest investment in fighting climate change in our country’s history. It will put us well on our way toward a future where we depend on the wind, sun, and other clean sources for our energy,” her remarks continue.
Yellen’s speech will also emphasize the role that private capital can play in addressing climate change, putting her generally in line with the economic, social and corporate governance (ESG) movement.
- The ESG movement in the financial sector pursues environmental and social equality objectives through divestment practices and getting board members with particular political views elected to company boards.
- “By mobilizing private capital, the clean energy tax credits implemented by Treasury will propel our economy and workers to a leadership position in the fastest growing markets and technologies of today and the future, with positive spillovers to the rest of the world. And in the process of boosting domestic clean energy production, the law will support our energy security and insulate us from the type of fossil fuel-driven energy volatility that we’ve seen in the past year,” her remarks say.
From the other side: Republicans at the state level have been mobilizing to block ESG practices, which they view as harmful to their economies, with various initiatives in states like West Virginia and Texas that include a blacklist of financial firms that “[boycott] energy companies” and a request for documents from certain institutional investors on Wall Street.
Texas state Sen. Bryan Hughes (R), whose State Affairs Committee sent letters to asset management giant BlackRock and three other firms asking for information on ESG practices, said in an interview with The Hill that he is concerned about corporate power advancing a “left-wing agenda.”
“You know how it goes. BlackRock comes to Company X and says we own however many million shares in your company, and if you want us to vote for your directors and your compensation, then you better do what we say,” Hughes said.
“It’s one thing for that power to exist, but when we see a handful of firms control this amount of the stock market and we see them moving in lockstep using that power for this left-wing agenda, it’s just something we’ve never seen in America,” he said.
BlackRock previously stated it does not boycott fossil fuel companies, but CEO Larry Fink has said that he believes capitalism can change the way societies operate.
“Capitalism has the power to shape society and act as a powerful catalyst for change,” he wrote in a 2022 open letter to CEOs, adding that “companies perform better when they are deliberate about their role in society” and that “the relationship between a company, its employees, and society is being redefined.”
FED VICE CHAIR: BANK TO LAUNCH PILOT CLIMATE RISK ANALYSIS IN 2023
The Federal Reserve’s top regulatory watchdog said Wednesday the bank will test out ways next year to help financial firms figure out the risks they face from climate change and climate-related events.
Fed Vice Chair of Supervision Michael Barr said in a Wednesday speech the bank will launch a pilot exercise next year for the major banks it supervises to help get a better sense of the risks climate change poses to the financial system. The exercise would likely require firms to explain how several different climate-related financial shocks would affect their books and ability to serve customers.
“The Federal Reserve is working to understand how climate change may pose risks to individual banks and to the financial system,” Barr said in a Wednesday speech at the Brookings Institution, a nonpartisan think tank.
Barr’s remarks were his first since being confirmed to the Fed in July as the bank’s top regulatory official. As vice chair of supervision, Barr spearheads the Fed’s oversight of major financial firms, including the Fed’s annual stress testing of the largest U.S. banks.
“The Federal Reserve’s mandate in this area is important, but narrow, focused on our supervisory responsibilities and our role in promoting a safe and stable financial system,” Barr said.
Since President Biden’s election in 2020, the Fed has moved toward studying the various ways climate change and a global shift away from fossil fuel energy could affect the financial system.
Financial experts say banks and financial firms could face steep losses as the pace and intensity of natural disasters increase, causing massive insurance payouts and reducing the value of properties in areas prone to extreme weather. A steep, steady reduction in fossil fuel usage and uptake of renewable energy sources could also trigger shockwaves through the financial system.
While central banks and financial watchdogs around the world have largely agreed on the need to assess climate-related financial risks, the issue is politically divisive in the U.S.
WHAT WE’RE READING
- Europe Is Sacrificing Its Ancient Forests for Energy (The New York Times)
- America’s electric utilities spent decades spreading climate misinformation (Grist)
- California heat wave nearly broke the power grid (Los Angeles Times)
- Utah’s Great Salt Lake Is Disappearing, With Mounting Economic Costs (The Wall Street Journal)
📖 Lighter click: New word on the block
That’s it for today, thanks for reading. Check out The Hill’s Energy & Environment page for the latest news and coverage. We’ll see you tomorrow.