Congress debates how to help energy sector in coronavirus stimulus measure

Source: By Dino Grandoni, Washington Post • Posted: Tuesday, March 24, 2020

Senate Minority Leader Charles E. Schumer (D-N.Y.). (Sarah Silbiger/Bloomberg)

One of the biggest sticking points to emerge in the fight over the coronavirus stimulus package is how to prop up the nation’s energy sector, struggling from a glut of oil and plummeting prices during the spreading epidemic.

Democrats were seeking a litany of subsidies for clean energy businesses to help renewable energy projects facing new economic headwinds from the viral outbreak. Republicans want to help keep the U.S. oil and gas sector afloat by buying fuel to fill a massive government reserve.

“We’re here trying to fight for the man and woman on the street in our hometowns,” Sen. John Barrasso (R-Wyo.), chair of the Senate Environment and Public Works Committee, said on the Senate floor Monday, “and yet they’re fighting for the Green New Deal.”

Here is what the two sides are fighting over when it comes to energy policy:

  • Over the weekend, Senate Republicans told Democrats they want about $3 billion for refilling the Strategic Petroleum Reserve. The Trump administration has pushed for purchasing crude for the nation’s emergency oil supply, held in salt caverns near the Gulf of Mexico, while prices are low as a way of propping up struggling U.S. shale producers.
  • Senate Democrats, led by Minority Leader Charles E. Schumer (D-N.Y.), countered by asking for a litany of subsidies to help clean-energy businesses also rocked by the turmoil in financial markets, as well as for new fuel-efficiency standards for airlines, one of the difficult-to-tackle sources of climate-warming pollution.
  • But Mitch McConnell (R-Ky.) balked at the deal — and took to the Senate floor Monday to denounce it. “Are you kidding me?” the Senate majority leader said. “This is the moment to debate regulations that have nothing whatsoever to do with this crisis?”
  • And yes, President Trump had something to say too:

Republicans had a deal until Nancy Pelosi rode into town from her extended vacation. The Democrats want the Virus to win? They are asking for things that have nothing to do with our great workers or companies. They want Open Borders & Green New Deal. Republicans shouldn’t agree!

— Donald J. Trump (@realDonaldTrump) March 24, 2020

Yet environmentalists, scientists and others concerned about climate change say the stimulus package offers a rare chance to nudge the economy toward cleaner ways of producing power and transporting people and goods. Eight Democratic senators, led by Sheldon Whitehouse (D-R.I.), took up that call and urged congressional leaders in a letter last week to make sure major airlines address air pollution as part of an aid package.

“We have two curves we need to quickly bend downward,” Fatih Birol, executive director of the International Energy Agency, told Brady Dennis and Steven Mufson. “One is the coronavirus infections, and the second is global emissions — neither of them will be easy.”

But such environmental measures have few paths forward in the GOP-controlled Senate, where Republicans time and again have opposed including clean-energy tax breaks in larger legislative packages since Trump has taken office. Democratic leaders are not asking for measures included in the Green New Deal, such as a jobs guarantee and a complete transition to net-zero emissions in electricity generation — but that has not stopped Republicans from slapping that moniker on Democrats’ requests for the coronavirus response.

Still, there is precedent for an oil-for-renewables deal of this sort: In 2015, Democrats agreed to lift a decades-old moratorium on oil exports in exchange for a suite of tax breaks meant to kickstart solar, wind and other renewable energy projects.

Talks between Schumer and Treasury Secretary Steve Mnuchin went well into the evening Monday and wrapped up shortly before midnight. Both left the Capitol without a deal in hand, though they were “optimistic they could announce one Tuesday morning,” Erica Werner, Paul Kane, Rachael Bade and Mike DeBonis report — though it’s unclear what the energy-related provisions of such a deal would look like.

Complicating matters even further, however, is House Speaker Nancy Pelosi (D-Calif.), who offered her own $2.5 trillion proposal late Monday that would compel airlines to adhere to new emissions requirements in exchange for $37 billion in grants.

As lawmakers bickered, the destruction across the U.S. economy continued, with the Dow Jones industrial average shedding another 600 points.

The energy industry is not being spared from the bloodletting. The stock value of major fossil fuel firms, as tracked by Standard & Poor’s, is down more than 60 percent on the year as domestic oil and gas producers begin to struggle to compete with cheaper fuel from Saudi Arabia and Russia. “Oilfield services firms have this week been the first companies to feel the hit from the sharp drop in the price of petroleum,” Brittney Martin and Will Englund report.

And the renewable energy sector, though much smaller than the oil and gas industry, is bracing for its own workforce contraction. The wind sector is estimating the economic slowdown could lead to the loss of 35,000 wind turbine technicians and other jobs.