The fossil fuel projects the White House may allow to win a climate deal

Source: By Jeff Stein, Washington Post • Posted: Wednesday, July 13, 2022

Biden promised to halt all new drilling on public lands and waters but is now entertaining this idea, in part to secure passage of his climate package through Congress

Sen. Joe Manchin III (D-W.Va.) after a private meeting with White House officials on Capitol Hill on Sept. 30. (Jabin Botsford/The Washington Post)

In the past week and a half, the White House has taken steps that would have been considered unimaginable when President Biden first took office, suggesting that it might greenlight drilling plans in Alaska and the Gulf of Mexico that would produce hundreds of millions more barrels of oil.

Despite violating the president’s climate pledges, officials have opened the door to these proposals as they wait to see if their approval could help finally secure Senate Energy and Natural Resources Committee Chairman Joe Manchin III’s (D-W.Va.) vote for a historic climate package stuck in Congress. Complicating their calculus is that White House aides do not even know if approving them — or Manchin’s other preferred energy projects, such as a pipeline in West Virginia — would bring the elusive senator on board.

The difficult balancing act, described by four administration officials who spoke on the condition of anonymity to avoid jeopardizing a potential deal, is part of the White House’s last-ditch effort to salvage the chances of meeting Biden’s carbon emissions reduction targets with just months until the 2022 midterm elections. The fossil fuel projects may also prove crucial to Democrats’ broader economic package focused on energy, prescription drugs and taxes, since Manchin has so far balked at only approving the new clean energy tax credits that form the core of the party’s climate legislation.

The uncertain fate of the climate bill — and Manchin’s vote — has driven the White House to postpone decisions on energy projects with significant environmental impacts, including the long-delayed Mountain Valley Pipeline and future drilling plans in the Gulf of Mexico and on Alaska’s North Slope.

Collectively, outside groups estimate these projects would generate anywhere between 680 million metric tons of carbon dioxide to up to six times that amount. Climate advocates argue that additional carbon pollution would undercut Biden’s pledge to reduce U.S. emissions by at least 50 percent below 2005 levels by 2030.

Yet experts said additional carbon pollution could likely be worth it in exchange for new climate policies that would allow the renewable energy industry to dramatically expand.

David Victor, an energy policy expert at the University of California at San Diego, said in an interview that if the deal could usher through those programs, “it’s going to send a much clearer signal to low-carbon industries about where and how they can build.”

White House spokesman Andrew Bates declined to comment on the administration’s strategy in a statement, saying, “We do not negotiate in public but are dealing with lawmakers in good faith to pass legislation that will cut costs like prescription drugs and energy, lower the deficit by having the wealthy pay their fair share, and fight inflation for the long haul.”

Manchin has taken a special interest in the Mountain Valley pipeline, which would transport Appalachian shale gas about 300 miles from West Virginia to Virginia if built. Designed to carry 2 billion cubic feet of gas a day, the project would impact hundreds of streams, wetlands and several miles of national forest land, and would increase the nation’s exports of liquefied natural gas, which the United States is sending to help Europe amid the war in Ukraine.

Though some energy analysts have said the pipeline is not needed to supply domestic or international markets, Manchin has championed the project. He has described it as “strategically important” for American energy security and the European Union’s goal of cutting its dependence on Russian gas, told administration officials the pipeline is one of his top priorities, and cited its many delays to argue that permitting hurdles are strangling U.S. oil and gas production.

The federal government’s five-year plan for oil and gas drilling in the country’s coastal waters has also become part of the administration’s efforts to court Manchin. Though Biden campaigned on a pledge to end federal leasing, the new plan put out by the Interior Department this month identified as many as 11 potential new lease sales. Biden officials proposed banning exploration off the Atlantic and Pacific coasts, while still leaving the possibility of new drilling in parts of the Gulf of Mexico and off the coast of Alaska.

Yet even as the administration entertains the idea of new leasing, Interior Secretary Deb Haaland has said that the plan is not final and that her department is considering holding no lease sales at all.

Biden officials have also raised the prospect of allowing a controversial oil project on Alaska’s North Slope to proceed. Known as Willow, ConocoPhillips’s multibillion-dollar venture faces stiff opposition from environmentalists and some Native Alaskans, who worry it will disrupt their subsistence lifestyle. Sen. Lisa Murkowski (R-Alaska), a close ally of Manchin, has said she wants to see construction begin this winter.

Typically, federal officials analyze a project’s environmental risks, then say which option they support. But in the case of both the Willow project and the five-year leasing plan, Interior did not indicate a preference. Adding to the confusion, Bureau of Land Management officials in Alaska initially published a different version of the Willow analysis that said the administration would probably approve the project.

An Interior Department spokesperson declined to comment.

On its own, the Willow project is expected to produce 629 million barrels of oil over its three-decade life span. Early federal estimates said the project would generate about 260 million metric tons of carbon dioxide, the rough equivalent of 66 coal plants, but recent figures are even higher.

A 2017 analysis by Oil Change International, an environmental advocacy group, found that the greenhouse gas emissions from the Mountain Valley pipeline would approximate 26 coal plants or 19 million passenger cars.

From the perspective of many administration officials, such a deal would be worth making if the billions of dollars in tax incentives for renewable energy could curb rising emissions that are fueling planetary warming.

But as they weigh this trade-off, Biden officials are wary of approving these projects only to then lose Manchin’s vote on the climate and energy deal anyway. Manchin is known for refusing to be pinned down, leaving administration officials wondering what he wants, and he has used his power in an evenly divided Senate to block his party’s goals. Negotiations between Biden and the West Virginia senator have repeatedly broken down over the past year.

Manchin has said boosting clean energy — without also increasing U.S. production of oil and gas — could hurt the nation by making it more dependent on authoritarian petrostates such as Saudi Arabia, which Biden is visiting in part because the United States needs its oil. Manchin has also voiced concerns about approving hundreds of billions in government subsidies for fossil fuel projects that could be defeated by red tape or climate lawsuits, the people said.

“It’s no secret that Senator Manchin — and many others on both sides of the aisle — believes that permitting reform is essential to American energy security and our ability to decarbonize,” Manchin spokeswoman Sam Runyon said in an email.

Climate advocacy groups have called on Biden to stay true to his pledge to rein in the production of fossil fuels.

“We believe expanding leasing, onshore or offshore, would fly in the face of meeting the Biden administration’s climate commitments,” said Alex Taurel, conservation program director for the League of Conservation Voters.

But after watching Manchin abruptly pull his support from Democrats’ social safety net, climate and tax bill last year, some activists said they have reconciled themselves to limiting the new oil and gas infrastructure projects the senator wants rather than blocking them altogether. If Manchin has his price, advocates say, it may be worth paying to reach a compromise on the bill’s major climate change provisions.

Oil industry officials have welcomed the administration’s recent ambiguous announcements as a positive sign. Industry groups have accused Biden of slowing fossil fuel production and blamed him for record high gas prices, though energy experts say these changes are mainly driven up by pandemic supply chain disruptions and Russia’s invasion of Ukraine.

“They’ve certainly taken a step forward, but we are disappointed, particularly in the five-year program announcement, that they left a lot of room for the potential for no lease sales,” said Frank Macchiarola, the American Petroleum Institute’s senior vice president of policy, economics and regulatory affairs.

“The question of whether to hold lease sales on the outer continental shelf is not a bargaining chip — it’s a statutory requirement,” he said, noting that the Interior Department is required to issue a plan for new offshore lease sales every five years.

As the White House courts Manchin, those familiar with the process said in interviews that administration officials have not tried to influence or alter the scientific analysis of fossil fuel projects, as Trump officials sometimes did when their energy policies clashed with established science.

Instead, White House officials have taken control of the messaging strategy. The change has led to hasty rollouts that try to placate both the fossil fuel industry and environmentalists, but risk angering both. The administration released both of its recent drilling announcements on Friday evenings, when fewer people are paying attention to the news.

For career employees at Interior, the White House’s involvement has been chaotic. In the days following the announcement of the offshore drilling plan, Haaland convened several dozen employees on Zoom to thank them for their work, saying, “This was quite the roller coaster.”

While Manchin has considerable leverage in Washington — some call Democrats’ attempts to salvage pieces of the now-defunct Build Back Better bill “Build Back Manchin” — there may be limits to what Democrats can offer him. Approval for these fossil fuel projects falls outside the bounds of the Senate budget procedure the party is using to pass its budget bill, making it impossible for Democrats to codify approval for the West Virginia pipeline, or enact permitting reform, in that package.

If talks with Democratic leaders fail, it’s unlikely that Manchin could work with Republicans to expedite fossil fuel projects. But the impasse suggests that a deal between the White House and Manchin could continue to prove elusive, even if both sides can find common ground.

Michael Wara, an energy and climate policy expert at Stanford University, said that while the war in Ukraine and soaring gas prices have made the politics of combating climate change more challenging, the United States is already headed for a “wholesale change” in how it generates energy.

“In a world where transportation is electrifying at a pace that we really didn’t expect, in a world where the auto manufacturers are laying off their internal combustion design teams,” he said, decisions by the federal government to approve more fossil fuel infrastructure are not necessarily a done deal.

“Just because you give someone permission to do something doesn’t mean they’ll do it, if they can’t make money,” Wara said. “And the world is evolving.”