President Joe Biden finds himself beset by frustration on all sides of the energy policy debate. He’s juggling competing priorities to help relieve record fuel prices and make good on his longer-term green energy goals.
Demand for lower fuel prices at home and in Europe has forced Biden’s hand to support more oil and gas production, even while his administration holds the line on a climate change agenda envisioning a sooner-rather-than-later phaseout of fossil fuels.
At the same time, a U.S. solar manufacturer asked the administration to consider slapping new tariffs on solar cells and module imports from Asia, and the administration obliged by opening a trade investigation over the strong objections of solar developers, who say the whole thing threatens the health of an industry integral to Biden’s green agenda.
Here’s the latest on the problems three leading energy interest groups have with Biden.
Environmental groups
Green groups welcomed Biden’s election for his backing of policies to reduce greenhouse gas emissions and his stated promise to end the leasing of federal lands and waters for fossil fuel production.
For much of 2021, Biden, in many ways, stayed the course he laid out for himself during his campaign, pausing new oil and gas lease sales on federal lands, establishing national emissions reduction targets, and directing an end to funding of foreign fossil fuel projects.
At the same time, energy market volatility driven by inflation and the then-escalating conflict between Russia and Ukraine led Energy Secretary Jennifer Granholm to start encouraging more oil production in December, a line the administration only hardened after the war sparked another hike in prices.
Since Russia invaded Ukraine, Biden has announced a joint task force with Europe to help allies acquire more natural gas and committed to increasing liquefied natural gas exports to Europe by hundreds of billions of cubic feet through the end of the decade.
The White House’s announcement on the task force also provided for the construction of new LNG infrastructure to enable the increase in shipments, something green groups strongly oppose.
“The creation of the US-EU Joint Task Force for Energy Security is an excellent example of how not to conduct energy policy in a transparent and democratic manner during a climate emergency,” Basav Sen, climate policy director at the Institute for Policy Studies, said in April. “If the Biden administration took its own rhetoric on climate seriously, they wouldn’t propose a buildout of gas production and export infrastructure without a rigorous analysis of climate impacts and a promise to reject any project that’s inconsistent with 1.5 degrees of warming.”
The administration’s treatment of the oil and gas leasing program, which a federal judge ruled cannot be unilaterally paused, has been another source of frustration for environmental groups.
The Interior Department released a report the day after Thanksgiving recommending reforms to the program, including the charging of higher royalties and reductions to the amount of land available for leasing. Still, it was too light on the topic of climate change for environmental groups and even some Democratic lawmakers who want more aggressive reforms, up to and including termination of the leasing regime.
Environmental law group Friends of the Earth accused the White House of watering down the leasing report and sued the Council on Environmental Quality on April 25, asking a judge to deem CEQ to be in violation of its obligations under the Freedom of Information Act. FOE argued the CEQ hasn’t complied with FOIA requests for information about its interactions with the Interior on the leasing report.
“Our concern is that when the report went to the White House and CEQ … it looked much, much different than when it left the White House after being reviewed,” Hallie Templeton, Friends of the Earth’s legal director, told the Washington Examiner. “And we’re afraid that they removed climate discussion and watered down, for lack of a better term, in response to pressure from industry and oil-producing states.”
Templeton said Biden’s executive action pausing new leasing and ordering the leasing report proposed “the most sweeping climate action by any American president in history,” but that subsequent actions haven’t reflected it.
“What happened to that motivation, what happened to that gumption? It totally disappeared,” she said.
Besides the report, Interior’s moving forward with new lease sales, something officials insist is being done in conjunction with the court order enjoining Biden’s leasing pause, has also let down green allies like Templeton, who say the administration has the legal authority to continue delaying sales.
“This isn’t as I thought it would be with a Democratic administration, to say the least,” Templeton said, summing up Biden’s actions on energy policy.
Oil industry
Biden set the boundaries of his relationship with the oil and gas industry during his first week in office, canceling the U.S.-Canada Keystone XL pipeline and ordering the leasing pause.
Since then, high and record energy prices have proven to be a rapport-building instrument between Biden and the industry. However, he and Democrats are still keeping energy companies at arm’s length.
The oil and gas industry has welcomed Biden’s ask for more production and support for more LNG exports. Industry leaders also welcomed Interior’s recent announcement that it will hold new onshore lease sales in June, but the administration’s slow-walking of the leasing program, coupled with its raising of royalty rates and reducing the amount of acreage available, spawned new criticisms of Biden’s approach.
“While we’re glad to see BLM is finally going to announce a sale, the extreme reduction of acreage by 80%, after a year and a quarter without a single sale, is unwarranted and does nothing to show that the administration takes high energy prices seriously,” Kathleen Sgamma, president of the Western Energy Alliance, said after the new lease sales were publicized.
Sgamma protested the higher royalty rate of 18.75%, too, saying it “increases the costs of production on federal lands, which already carry a higher cost than nonfederal lands.”
Following the lease sale news, the White House Council on Environmental Quality announced its plans to roll back Trump-era reforms to the National Environmental Policy Act, which had been designed to speed up permitting of projects like oil pipelines.
CEQ Chairwoman Brenda Mallory said the Biden White House’s reforms will patch “holes in the environmental review process” and enable projects to be built faster.
The American Petroleum Institute demurred, saying the NEPA reforms “create new obstacles” for fossil fuel development and “even the construction of wind, solar, and electricity transmission projects,” all of which are green energy priorities of the Biden administration.
“Once again, the administration’s policy actions aren’t matching their rhetoric regarding the need for more American energy production,” said Frank Macchiarola, API’s senior vice president of policy.
Solar industry
The Commerce Department opened an investigation in April, at the behest of California-based manufacturer Auxin Solar, to determine whether Chinese companies are dumping solar cell and module products into third countries in Asia before the products are shipped to the United States to circumvent existing duties on imports from China.
Commerce initiated the circumvention inquiry despite heavy lobbying against it by renewable energy industry groups, which argued the investigation alone would decimate solar energy deployment by creating uncertainty about future tariffs.
The Solar Energy Industries Association, one of the groups leading opposition to Commerce’s investigation, maintains that new tariffs on imports from Cambodia, Thailand, Malaysia, and Vietnam would put 100,000 industry workers out of a job and, as SEIA President and CEO Abby Hopper said last month, “force a surrender on the President’s climate goals.”
John Smirnow, SEIA’s general counsel, has been making the case that the petition fell short of Commerce’s established threshold for opening a circumvention inquiry and suggested the department failed to consider precedent decisions on similar circumvention petitions.
“We’re having a lot of ongoing discussions letting the administration know the damage that this case is causing in the industry,” Smirnow told the Washington Examiner. “I think Commerce looked at this case in a vacuum. I think that was the problem.”
Several solar executives told the Washington Examiner during a recent sit-down that the threat of tariffs has forced their companies to put planning for future projects on hold.
Thomas Neyhart, CEO of Louisiana-based residential solar provider PosiGen, said his firm’s vendor canceled all pending solar product orders on April 1, the date Commerce opened up its inquiry.
Neyhart said PosiGen has been able to source products elsewhere but is paying more for them.
Commerce Secretary Gina Raimondo showed sympathy during a recent congressional hearing toward the concerns of solar business leaders and lawmakers who say the investigation is harmful to the industry, but she insisted unilaterally that dismissing the petition wasn’t a possible course of action for the department.
“My hands are very tied,” Raimondo said. “I’m required by statute to investigate the claim that companies operating in other countries are trying to circumvent the duties, and I’m required by statute to have a fulsome investigation.”
