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Politico
03-07-2025
- Business
- Politico
Drill, Gavin, drill?
With help from Alex Nieves We'll be off Friday but will be back in your inboxes Monday. FLARE UP: Gov. Gavin Newsom, the erstwhile fighter of Big Oil, has cracked the door open to more in-state oil extraction — and California oil drillers are hoping to ride the political momentum. Newsom told reporters this week he was actively reviewing California Energy Commission Vice Chair Siva Gunda's recommendations to keep California's refineries operating profitably after two of them announced plans to close within the past year and triggered a cascade of concerns about fuel supply and prices. 'There's an imperative to move on this,' Newsom said Tuesday, adding he was weighing both legislative and administrative options. 'We're looking to move very quickly on some of those recommendations.' Among Gunda's recommendations is a call for lawmakers to statutorily approve new wells in Kern County's oilfields, effectively sidestepping litigation from environmental groups that has snarled the county's years-long effort to streamline permitting. Gunda, echoing longstanding industry complaints, pointed to the legal gridlock as slowing the in-state production that some refineries depend on because they're not built to process foreign crude. The recommendation has energized in-state oil producers, who've seen state permits for new wells plummeting in recent years as part of the Newsom administration's goal to phase out oil production by 2045. 'It's certainly a welcome development,' said Rock Zierman, the CEO of the California Independent Petroleum Association. 'We're now hoping to translate that into action.' They're also riding high on the Trump administration's agenda: The Bureau of Land Management is currently taking comments on updates to oil and gas leasing programs in south-central California. And the Interior Department killed a 2012 agreement with California's oil regulator over permitting, a largely symbolic move that was still celebrated by California Republicans this week. Catherine Reheis-Boyd, the president and CEO of the Western States Petroleum Association, said she's heartened by the prospect of more Kern County drilling. 'My hope is that that happens in the short term, not the midterm and not the long term,' she said. 'Otherwise we're going to find ourselves in another very difficult conversation.' The more than $15 million mailer and ad campaign by in-state oil producers to tie California's climate policies to high gas prices is bearing fruit. Reheis-Boyd said she's had more talks with lawmakers, administration officials and environmental groups in recent months. One of the 'ground rules' of the talks, Reheis-Boyd said, was that there would be no new drilling near homes or in environmentally sensitive areas. But the environmental and community groups fighting Kern County drilling are unconvinced. 'That is very alarming rhetoric about an in-state turnaround,' said Kassie Siegel, senior counsel and director of the Center for Biological Diversity's Climate Law Institute. She's kept Kern County's drilling effort in the courts, where it remains even after the Kern County Board of Supervisors approved a revised drilling ordinance last week in an attempt to meet a judge's demands for more mitigation measures. 'I don't believe we're going to have any big increase in production in California,' Siegel said. 'But the question is, how much damage is the industry going to do on its way out the door?' A spokesperson for Speaker Robert Rivas declined to comment on the record. Senate President Pro Tem Mike McGuire said in an email that state energy officials would brief Democratic senators on the oil recommendations 'soon.' 'The Senate is committed to energy affordability while continuing our nation-leading role combatting the climate crisis,' he said, citing legislative proposals to limit utility costs to ratepayers and overhaul the makeup of transportation fuels. 'We look forward to our continued work with the Assembly and Administration on this critical matter that impacts millions of Californians.' Meanwhile, Reheis-Boyd is hoping to snag her first meeting with Newsom himself. She's pitched herself for his podcast, she said: 'I'm in line.' — CvK Did someone forward you this newsletter? Sign up here! MEGA PROBLEM: Trump's 'megabill' has finally cleared Congress, and that means clean energy advocates can start waving goodbye to federal incentives for electric vehicles, solar panels, wind projects and more. Republicans' budget package — which Trump plans to sign Friday — rolls back large swathes of former President Joe Biden's Inflation Reduction Act, the 2022 law aimed at stimulating domestic clean energy markets. The new law will eliminate a $7,500 tax credit for EV buyers that automakers had lobbied to protect. (The notable exception being Toyota, which has focused on its hybrid technology.) It will also phase out tax incentives for residential solar and battery storage projects, meaning home energy efficiency upgrades will get more expensive. Large wind and solar projects are also in a bind. Utility-scale projects can still qualify for tax credits under language negotiated by Senate Republicans, but they'd have to be operational by the end of 2027, a timeline that would leave many projects out in the cold. But hard-line House conservatives said Thursday they'd received assurances from Trump that he would further constrict the incentives. It's now up to California to pick up the slack. Newsom said last year that he wants to fund EV tax credits with cap-and-trade revenues if federal incentives disappear, but hasn't committed to that proposal as negotiations over extending the emissions trading program heat up. — AN GLIMMER OF HOPE: California officials got some good news on the EV front Thursday as Trump's Department of Justice declined to immediately appeal an injunction that will restart the flow of federal charging infrastructure to states, David Ferris reports for POLITICO's E&E News. The fight over the $2.7 billion that states are expecting through the National Electric Vehicle Infrastructure program isn't over. The Federal Highway Administration, which administers the program, said in a statement that it 'still can appeal the preliminary injunction and is currently coordinating its legal strategy with the Department of Justice.' But the fact it hasn't already means it missed a seven-day appeal window to stop the program from restarting. Judge Tana Lin ordered the administration last week to restore funding to 14 states that had sued. FHWA froze the program in February, saying that funding would be withheld until it created new rules to replace Biden's. Those rules have still not been published. California is still earmarked to receive $352 million in NEVI funds. While that figure is small compared to in-state and private resources, the program incentivizes building in less profitable rural areas that charger operators say are more difficult to finance. — AN CLEAN IT UP: Trump's EPA will have to issue a decision by next July on a plan to clean up Central Valley smog under a tentative legal settlement. The proposed deal comes after local community groups sued EPA in November, alleging that the agency had missed its statutory deadline to act on a plan developed by San Joaquin Valley air regulators that aims to bring the region into compliance with federal ozone standards, Sean Reilly reports for POLITICO's E&E News. The Central Valley consistently has among the worst air quality in the nation, linked to factors like the region's topography, agriculture and heavy shipping industries. Federal and state officials have faced numerous lawsuits over California's air quality plans since the Clean Air Act was enacted in 1971, and could be in store for more after Republicans killed the state's vehicle emissions standards — essentially guaranteeing that it won't meet ozone standards. — AN LEAVING THE RANCH: John Harris, founder of the Harris Ranch Beef Company and a major Republican donor, died at the age of 81, the Western Growers Association announced Thursday. Harris was one of the most influential figures in the California agriculture community and played a prominent role in backing conservative candidates, including his recent fundraisers for Trump and Vice President J.D. Vance at his Harris Ranch resort in Coalinga. — The Trump administration's hollowing out of National Park staff could lead to more lost hikers, reservation delays and weather monitoring programs falling by the wayside. — Voters aren't paying attention to climate, and that's letting Republicans dismantle clean energy projects they support, Sammy Roth writes for the Los Angeles Times. — Check out the state's harmful algal bloom map as you're planning your lakeside holiday.
Politico
28-01-2025
- Business
- Politico
The fire at Moss Landing is holding its charge
With help from Blanca Begert and Tyler Katzenberger FRIENDLY FIRE: A California Democrat is using the playbook she developed against oil and gas drilling on one of her party's own darlings — the energy storage industry. When the world's largest lithium-ion battery caught fire Jan. 17 at the Vistra-owned Moss Landing Power Plant in Monterey County, Assemblymember Dawn Addis looked up at the 100-foot flames, considered her constituents who were told to evacuate and close their windows in case of toxic smoke, as well as the sensitive marsh and prime farmland nearby, and thought: Never again. She introduced a bill Thursday to reverse a 2022 reform that bypassed local governments to speed up state permits for energy storage facilities. Her proposal would also ban energy storage facilities from environmentally sensitive areas or from within 3,200 feet of schools and homes. 'After seeing what I saw at Moss Landing, it is very hard for me to look at battery energy storage as a green solution,' Addis said. 'The whole purpose of climate action is to create a safer world. And so as we move into that, we have a responsibility to ask the core questions that our community is asking for their safety, for their health and for their well being.' Part of her inspiration for the proposal was AB 3233, a bill she passed last year giving local governments more authority to restrict oil and gas drilling, she said. Another inspiration was SB 1137, the 2022 law putting a 3,200-foot setback on new oil and gas wells that took effect last year after the California Independent Petroleum Association dropped its effort to repeal it. The proposal reflects broader nationwide safety concerns with fire-prone lithium-ion batteries that have sparked local moratoriums, including just down the coast from Moss Landing in Morro Bay, where Vistra has proposed another battery facility. But it also flies in the face of California's recent strategy regarding renewable energy development, which has focused on streamlining and incentives. The result? Some of the fastest growth in energy storage in the world, as Gov. Gavin Newsom has bragged. The burst in batteries also helped California avoid rolling blackouts last summer by storing solar and wind power into the evening hours when there's highest demand. That's why Sen. John Laird, another Democrat who represents the Central Coast area where the fire took place, is calling Addis' bill 'premature and half-cooked.' Laird and Addis have both called for an independent investigation into the fire's cause and its impact on local soil, water and air. So far: U.S. EPA monitoring of the air right after the fire suggested no harmful impact, but a preliminary San Jose State University analysis of the soil in nearby Elkhorn Slough in the days after the fire found a spike in nickel, manganese and cobalt, which are heavy metals found in batteries. State and local environmental health monitoring is also in the works. Laird said he's considering follow-up legislation to his SB 38, a 2023 law requiring battery energy storage facilities to develop emergency plans, but said Addis' proposal goes too far too soon. 'With oil and gas, there are emissions and potential hazards at the site,' Laird said. 'For battery storage, there are no emissions, and so using the setbacks from oil and gas for battery storage is apples and oranges.' He also pointed to the broad need for energy storage as California tries to rid the grid of fossil fuels. California projects it will need 52,000 megawatts of energy storage, three times what it has now, by 2045 to meet energy needs while reaching its net-zero emissions goal. 'We don't need to cut off or hamper every individual power source on the grid,' Laird said. 'We need to have a unified plan for how we're going to keep our climate leadership and how we're going to keep the lights on, because that's the key thing going forward.' Seven projects are already taking advantage of the opt-in sped-up state permit Addis wants to eliminate, according to a list kept by the California Energy Commission. (Not yet on the list: Vistra's Morro Bay project, though the company has said it intends to apply.) Vistra didn't respond to a request for comment by publication time. But Scott Murtishaw, executive director of the trade group California Energy Storage Alliance, of which Vistra is a member, said he's working with the California Public Utilities Commission to come up with a list of older facilities to inspect and potentially update (in energy storage terms, older is more than a couple years old.) He said he wants to see California adopt the latest international fire safety codes for battery storage facilities instead of limiting where batteries can be placed. 'The industry has learned a lot since the late 2010s and 2020 era,' Murtishaw said. 'The facilities that are constructed going forward will just be using newer, better technologies, and will be designed with better, more stringent standards.' The CPUC proposed Monday evening to increase its safety standards for energy storage facilities, in line with recent state laws. It's scheduled to vote on the proposal March 13. — CvK Did someone forward you this newsletter? Sign up here! FEMA FIRINGS: Right as President Donald Trump was pledging on Friday to give fire-scarred Los Angeles 'more than any president has ever given you, his Federal Emergency Management Agency was disbanding a Katrina-era advisory group intended to issue broad guidance on the agency's work. FEMA's National Advisory Council dismissed its 40 members in line with a Jan. 20 memo from the Department of Homeland Security cleaning house on all advisory committees in order to 'prioritize our national security.' The NAC had recently issued a slate of recommendations, including encouraging property insurers to incentivize climate-resilient infrastructure, issuing more preemptive emergency declarations for climate-driven events, and educating agency staff on 'victim-centered trauma-informed training.' One of the former committee members, UC Irvine assistant professor of environmental policy and urban planning Michael Mendez, said he would be taking his talents back to California. He cited two bills that state Sen. Steven Padilla (D-Chula Vista) passed last year: SB 990, requiring the Office of Emergency Services to incorporate best practices for serving LGBTQ+ people during emergencies and natural disasters; and SB 1105, granting paid sick leave protection to agricultural workers during smoke-, heat- or flooding-related emergencies. 'I'm going to focus my efforts on state and local-level disaster and equity planning,' he said. — DK FIREHOSE OF ORDERS: In case it wasn't already clear, Trump really, really cares about California's water supply. His White House on Sunday published its second executive order on California water so far, this time telling federal agencies to find ways to deliver more water to Southern California and the Central Valley including by setting aside endangered species protections and overriding California rules. The order partly justifies the demands by the devastation wrought by fires in Los Angeles. How much water Trump can actually deliver will depend on what exactly the agencies decide to do, as well as California's reaction. The Newsom administration is responding by saying that the state's water delivery system isn't to blame for the Los Angeles wildfires because state reservoirs were full. California officials are also pointing out that Trump's water policies from his first term wouldn't necessarily result in more water than the current status quo finalized late last year by the Newsom and Biden administrations. 'To abandon these new frameworks would harm California water users and protection of native fish species,' said Department of Water Resources director Karla Nemeth. — CvK MAKE POLLUTERS PAY INSURANCE: Suing Big Oil is back —– this time with an insurance twist. Sens. Scott Wiener and Sasha Renée Pérez introduced a first-in-the-nation bill today to create a clear legal pathway for individuals and insurance companies to seek damages from oil companies after climate-fueled fires like the ones that burned through Los Angeles this month. The Affordable Insurance and Climate Recovery Act, SB 222, would also require that the FAIR Plan, the state's insurer of last resort, sue fossil fuel companies on behalf of policyholders if an independent expert assessment finds the benefits of doing so outweigh the costs. 'By forcing the fossil fuel companies driving the climate crisis to pay their fair share, we can help stabilize our insurance market and make the victims of climate disasters whole,' said Wiener in a statement. The Western States Petroleum Association isn't into it. 'The announcement of today's proposal is the latest installment of an ongoing effort to scapegoat our industry — and the thousands of hardworking women and men who keep California running — for political gain,' CEO Catherine Reheis-Boyd said in a statement. — BB EXCEPTION EFFORT: Assemblymember Joaquin Arambula wants California to try new nuclear — but only in small bites. The Fresno Democrat introduced a bill late last week, AB 305, that would exempt small modular reactors from California's existing nuclear energy moratorium, which bars the construction of new nuclear reactors until the state is able to safely dispose of high-level nuclear waste. Arambula staffer Jacob Moss told POLITICO in a statement today that the Assemblymember was inspired to introduce the bill after visiting France, where he 'was impressed by their use of safe, modular nuclear power' and felt the technology could 'move the state to more affordable carbon-free electricity.' Unlike traditional nuclear power plants, small modular reactors, or SMRs, are built in factories and used to power buildings and other small-scale demands. Arambula's not the first to vouch for SMRs: A similar effort from former Assemblymember Devon Mathis died in the Assembly's Natural Resources Committee last year. — TK A TOUGH GIG: Ride-hailing companies like Uber and Lyft are now part of America's disaster response. But their drivers, classified as gig workers, are unprotected by state rules that safeguard other workers from wildfire smoke, reports Ariel Wittenberg for POLITICO's E&E News. Both apps offered Los Angeles residents free rides to evacuation shelters during the deadly wildfires that torched large areas of the city — about 10,000 rides each. But the drivers who venture into harm's way often have little gear — like masks — or training to protect themselves or their riders. The rights of gig workers were also weakened by a California ballot initiative that was upheld by the state Supreme Court last year. The result: Uber and Lyft are exempted from state wildfire smoke protections for workers — and the companies don't have to provide drivers with sick leave if they fall ill from inhaling wildfire smoke. Drivers also can't claim workers compensation if their lungs are irreparably harmed. A spokesperson for Uber said it was 'having ongoing conversations with drivers, couriers and merchants to listen to their needs to find the best way to support them.' Lyft did not respond to requests for comment. — AW, BB — Newsom told the California Coastal Commission to back off again today, three days after Trump was in Los Angeles railing against the agency. — Power stocks that had been boosted by the hype of artificial-intelligence are tumbling after the unveiling of the uber-competitive DeepSeek system. — Blanca went on AirTalk with Larry Mantle to talk about what Trump's executive orders mean for California's climate goals.
