May 21, 2024
🌮 Taco Tuesday's here! But have you ever seen "The Lego Movie"?
🎼 Today's last song is from Bracewell's Frank Maisano: "Sleep Now in the Fire" by Rage Against the Machine.
- And yes, he's aware of the irony: "I may be the exact political, corporate view (even on renewables) that Tom Morello rails against."
🚨 Situational awareness: Sen. Joe Manchin said this afternoon that he's presented a permitting proposal to Republicans — but he doesn't think it'll be ready for public release before recess. "The Republicans have it now, so they'll have this week to go over it," he told reporters.
1 big thing: Congress' anti-China energy counterplan
Illustration: Sarah Grillo/Axios
Congress is lurching toward unleashing financing for overseas energy projects, Jael writes.
Why it matters: Congress is hellbent to counter China's power in the energy transition by funding strategic projects abroad that bolster U.S. supply chains.
- But it may be challenging to accomplish without changes to existing laws and federal practices.
Driving the news: Lawmakers have begun discussing whether to reauthorize the BUILD Act, a law establishing the U.S.-backed overseas investment office known as the Development Finance Corporation.
- Senate Foreign Relations Chair Ben Cardin is working on reauthorizing the BUILD Act on a bipartisan basis before it expires next year, a Democratic aide told Jael.
- In hearings this month, DFC chair Scott Nathan called for a reauthorization that would unshackle its capacity to invest.
Catch up quick: As we've explained, the DFC can inject equity into infrastructure and energy projects overseas, along with other financial practices that can shore up a strategic commercial project in another country (for example, insurance).
- Officials and lawmakers see U.S. agencies as key to building alternate supply chains.
- "We're never going to outcompete China or anyone else on state dollars.… That's not how we do things," Secretary of State Antony Blinken told Foreign Relations today. "But we can use these instruments [like the DFC] to facilitate the private sector playing a role."
Between the lines: Nathan succeeded Andrew Herscowitz, who left the DFC and then began criticizing U.S. policies that he says hold back DFC activity.
- Herscowitz — whose critiques have been brought up by lawmakers — told Jael that he's consulting with top House and Senate members on a BUILD reauthorization.
- "I am trying to make sure they understand these restrictions," he said.
Zoom in: Lawmakers have discussed potential changes to the BUILD Act that would loosen requirements that the DFC not support projects in "high income" countries.
- Nathan has said this requirement has held back the DFC from potential strategic investments in Chile, a lithium chemicals hub.
- On a bipartisan basis, members also appear supportive — or at least curious — about what it would take to fix an OMB scoring issue holding back potential billions in investment.
- Cardin's effort will aim to do both of these things, per the Democratic aide Jael spoke with, as well as raise its "maximum contingent liability cap."
- Republicans have also raised the need for DFC to consider U.S. mining in its decisions, as well as overseas natural gas financing.
What we're watching: Whether the NDAA or the State Department's annual appropriations become avenues for lawmakers to push a BUILD reauthorization.
2. EPA's AI collision course
Illustration: Annelise Capossela/Axios
EPA's power plant rules are becoming a wedge in the debate about AI and increasing energy demand, Nick writes.
Why it matters: It's another example of how climate goals are running headlong into new realities on the grid brought on by electrification and AI's massive power use.
Driving the news: Energy executives said at today's Senate Energy and Natural Resources hearing that the EPA regs could lead to early retirements of fossil fuel power plants amid rising demand.
- "We absolutely need to hang on to what we have," said Benjamin Fowke, interim CEO of the American Electric Power Co. "The EPA rules, I believe, will hasten the retirement of the dispatchable generation we have on our grid today."
- The regs don't yet apply directly to existing gas power plants. Rather, they require carbon capture at coal and new gas facilities.
- But Joe Manchin and Republicans argue that the EPA rules, as Manchin said, "aim to kill coal completely and stop natural gas from replacing it."
Yes, but: There's a climate imperative to reduce power sector emissions.
- "We're like in a car on a railroad track with a train coming towards us, and we're talking about the cost of a tow truck," Sen. Angus King said. "The cost of not addressing climate change dwarfs the cost of addressing climate change."
Our thought bubble: The discussion today is a wrinkle in what's become a complex political picture.
- Industry folks want to keep some fossil generation online, but many also want transmission policy reforms that build off what FERC did last week.
- There's a partisan split between the two halves on that equation.
3. Carper lobbies for ADVANCE action
Carper last month. Photo: Andrew Harnik/Getty Images
Senate EPW Chair Tom Carper is in talks with leadership about getting his final nuclear licensing package across the finish line, Nick writes.
Why it matters: The bipartisan ADVANCE Act is as close as it's been to becoming law, but much depends on Senate floor time and possible unanimous consent objections.
Driving the news: Carper told Nick that he spoke with Senate Majority Leader Chuck Schumer last week about getting the bill through the Senate.
- ADVANCE passed the House by a wide margin this month, attached to an unrelated fire safety bill.
Between the lines: The easiest path here would be to pass it via a unanimous consent request. We could see that soon, but three progressive senators — Bernie Sanders, Ed Markey and Jeff Merkley — voted against the original bill in committee.
- Carper said he didn't know yet whether any of them would hold up a UC on the House-passed ADVANCE-fire safety combo.
- "We just have to get really serious about moving, and I'm trying to convey that sense of urgency," he said.
- Barring a UC, committee leaders will likely make another attempt at attaching ADVANCE to the annual defense authorization.
4. Catch me up: permitting, Huffman vs. BOEM
Illustration: Tiffany Herring/Axios
📫 1. Buyers beware: Clean Energy Buyers Association CEO Rich Powell wrote to Senate ENR leaders yesterday calling for "deeper, legislative reforms that are ultimately needed" to permit and build more transmission.
🚜 2. Farmer Chuck: Schumer took to the floor today to denounce the House GOP farm bill, saying that it "departs from the long-standing spirt of bipartisan cooperation."
💨 3. The wind-up: Rep. Jared Huffman yesterday called for the Bureau of Ocean Energy Management to appoint an official to ensure proper tribal consultation for offshore wind development off the California coastline.
- BOEM told Jael that it doesn't comment on "congressional correspondence" and did not say whether it'll do what Huffman wants, but that it is "committed to upholding its Tribal trust responsibilities."
✅ Thank you for reading Axios Pro Policy, and thanks to editors Chuck McCutcheon and David Nather and copy editor Brad Bonhall.
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