This is what Joe Biden should do to protect the US from a spiraling oil crisis | Meg Jacobs
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in US PoliticsThis is what Joe Biden should do to protect the US from a spiraling oil crisisM More
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in US PoliticsBig oil could bring US gas prices down but won’t – so hit it with a windfall taxRobert ReichIn the US, in times of crisis, the poor pay the price and the rich cash in. Democrats know it doesn’t have to be this way This morning I filled my car with gas, costing almost six dollars a gallon. My car is a Mini Cooper I bought years ago, partly because it wasn’t a gas-guzzler. Now it’s guzzling dollars.Putin and Trump have convinced me: I was wrong about the 21st century | Robert ReichRead moreWhen I consider what’s happening in Ukraine, I say what the hell. It’s a small sacrifice.Yet guess who’s making no sacrifice at all – in fact, who’s reaping a giant windfall from this crisis?Big oil has hit a gusher. Even before Vladimir Putin’s war, oil prices had begun to rise due to the recovery in global demand and tight inventories.Last year, when Americans were already struggling to pay their heating bills and fill up their gas tanks, the biggest oil companies (Shell, Chevron, BP, and Exxon) posted profits totaling $75bn. This year, courtesy of Putin, big oil is on the way to a far bigger bonanza.How are the oil companies using this windfall? I can assure you they’re not investing in renewables. They’re not even increasing oil production.As Chevron’s top executive, Mike Wirth, said in September, “We could afford to invest more” but “the equity market is not sending a signal that says they think we ought to be doing that.”Translated: Wall Street says the way to maximize profits is to limit supply and push up prices instead.So they’re buying back their own stock in order to give their stock prices even more of a boost. Last year they spent $38bn on stock buybacks – their biggest buyback spending spree since 2008. This year, thanks largely to Putin, the oil giants are planning to buy back at least $22bn more.Make no mistake. This is a direct redistribution from consumers who are paying through the nose at the gas pump to big oil’s investors and top executives (whose compensation packages are larded with shares of stock and stock options).Though it’s seldom discussed in the media, lower-income earners and their families bear the brunt of the burden of higher gas prices. Not only are lower-income people less likely to be able to work from home, they’re also more likely to commute for longer distances between work and home in order to afford less expensive housing.Big oil companies could absorb the higher costs of crude oil. The reason they’re not is because they’re so big they don’t have to. They don’t worry about losing market share to competitors. So they’re passing on the higher costs to consumers in the form of higher prices, and pocketing record profits.It’s the same old story in this country: when crisis strikes, the poor and working class are on the frontlines while the biggest corporations and their investors and top brass rake it in.What to do? Hit big oil with a windfall profits tax.The European Union recently advised its members to seek a windfall profits tax on oil companies taking advantage of this very grave emergency to raise their prices.Democrats just introduced similar legislation here in the US. The bill would tax the largest oil companies, which are recording their biggest profits in years, and use the money to provide quarterly checks to Americans facing sticker shock as inflation continues to soar.It would require oil companies producing or importing at least 300,000 barrels of oil per day to pay a per-barrel tax equal to half the difference between the current price of a barrel and the average price from the years 2015 to 2019.This is hardly confiscatory. Those were years when energy companies were already recording large profits. Quarterly rebates to consumers would phase out for individuals earning more than $75,000 or couples earning $150,000.Republicans will balk at any tax increase on big oil, of course. They and the coal-industry senator Joe Manchin even tanked the nomination of Sarah Bloom Raskin to the Fed because she had the temerity to speak out about the systemic risks that climate change poses to our economy.But a windfall profits tax on big oil is exactly what Democrats must do to help average working people through this fuel crisis. It’s good policy, it’s good politics and it’s the right thing to do.
Robert Reich, a former US secretary of labor, is professor of public policy at the University of California at Berkeley and the author of Saving Capitalism: For the Many, Not the Few and The Common Good. His new book, The System: Who Rigged It, How We Fix It, is out now. He is a Guardian US columnist. His newsletter is at robertreich.substack.com
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in US PoliticsAs Joe Biden gears up for his trip to Glasgow for the Cop26 summit, Senator Joe Manchin continues to try to water down the reconciliation bill, which as it stands includes transformational provisions to stem the adverse affects of the climate crisis. Joan Greve and Oliver Milman look at the potential fallout for the world if Manchin gets his way
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in US PoliticsUS CongressJoe Manchin leads opposition to Biden’s climate bill, backed by support from oil, gas and coal West Virginia senator objects to bill that would steadily retire the coal industry which continues to provide ample financial support to himOliver Milman@olliemilmanWed 20 Oct 2021 06.00 EDTLast modified on Wed 20 Oct 2021 13.28 EDTIn the tumult of negotiations over the most consequential climate legislation ever proposed in the US, there is growing scrutiny of the fossil fuel industry connections of the man poised to tear down the core of the bill – the West Virginia senator Joe Manchin.Manchin, a centrist Democrat, has objected to key provisions of a multitrillion-dollar reconciliation bill that would slash planet-heating emissions and help the US, and the world, to avert catastrophic climate breakdown. In a finely balanced Senate, Democrats need all 50 of their senators to vote for the bill, with no Republicans willing to vote for the climate measures.The legislation would steadily retire the coal industry that once formed the backbone of the West Virginia economy and continues to provide ample financial support to Manchin, who has spent the past four decades as a political heavyweight in his Appalachian home state, including acting as its secretary of state, governor and now US senator.Chart showing Joe Manchin has received the largest donations across multiple energy sectorsIn the current electoral cycle, Manchin has received more in political donations from the oil and gas industry than any other senator, more than double the second largest recipient. He is also the No 1 beneficiary of donations from the coal mining sector, leads the way in money accepted from gas pipeline operators, and is sixth in the ranking of senatorial donations from electricity utilities.This industry largesse has led to accusations that the senator has been unduly influenced by the companies that have helped stoke the climate crisis. Manchin’s office did not respond to a request for comment.But Manchin’s ties to the fossil fuel industry run deeper than political donations. After initially working in his family’s furniture and carpet business, Manchin set up a coal brokerage firm called Enersystems in 1988, running it until he became a full-time politician.The majority of Manchin’s assets are in a coal brokerage firm’s stockDespite handing control of Enersystems to his son Joseph, Manchin’s links to the business have proved fruitful to the senator. His shares in Enersystems are worth between $1m and $5m, according to his latest financial disclosure document, with the senator receiving more than $5m in dividend income from the company over the past decade. The coal brokerage represents 71% of Manchin’s investment income, and about a third of his total net worth.The reconciliation bill contains a huge expansion in tax support for clean energy and electric vehicles and new curbs on methane, a potent greenhouse gas, but the core of the climate measures is something called a Clean Electricity Performance Program (CEPP). The $150bn scheme would use payments and penalties to spur utilities to phase out fossil fuels from the US electricity system over the coming decade.The program, along with the clean energy tax credits, “are the best shot we’ve had in a generation to supercharge the clean energy transition and reduce fossil fuel pollution in marginalized communities”, said Patrick Drupp, deputy legislative director of the Sierra Club.Manchin has called the bill’s spending “reckless” and said it “makes no sense” to pay utilities to increase their share of renewable energy when they are doing so already. This is despite the fact that barely any utilities across the US are adding solar, wind and other sources of clean energy at the rate envisioned by the bill to force emissions down quickly enough to stave off climate disaster.“His statement on this is demonstrably false. Utilities aren’t growing renewables that quickly, certainly not in West Virginia,” said Robbie Orvis, senior director of energy policy design at Energy Innovation. “It’s not a secret he has ties to the coal industry. One would hope anyone elected to Congress would not hold significant financial holdings in industries they would consider regulating, but that’s the system we have, unfortunately.”Recent analysis by Energy Innovation found that the CEPP is the “carbon reduction lynchpin” of the legislation, representing around a third of the emissions cuts that would come from the bill. “It’s really unfortunate that the CEPP is not on the table anymore,” said Orvis. “But this bill would still result in a huge cut in greenhouse gas emissions, it does a lot. There may be a way to fill the gaps left by CEPP.”Projected emission reductions of Build Back Better programs by 2030Joe Biden has set a goal for the US to cut its planet-heating emissions in half this decade, before zeroing them out by 2050. America is currently on track for a 17% to 25% cut in emissions by 2030, an analysis released on Tuesday by Rhodium Group found, leaving up to 2.3bn tons of emissions left to eliminate in order to meet the goal. John Larsen, director of Rhodium Group, said that with further cuts from the federal government and states, “the US’s ambitious 2030 climate target is within reach, even with a more limited policy package from Congress”. But he added: “The US and the world have little time or room for error to avoid the worst impacts of climate change.”TopicsUS CongressOil and gas companiesCoalOilUS politicsFossil fuelsEnergy industrynewsReuse this content More
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in US PoliticsWhen a natural gas pipeline fire south-west of New Orleans killed one worker and burned three others, the Louisiana state police ordered Phillips 66 to pay a $22,000 fine for failing to immediately report the incident. The fire burned for four days before first responders could put it out.But the company ultimately didn’t pay any police fine, ending up with just a warning.That story is common, according to public records reviewed by the Louisiana Illuminator and Floodlight with the Guardian. The Louisiana state police – which oversees pipeline safety – issued 34 fines and five warning letters in the past five years. A quarter of those penalties were reduced: three were lowered, five were replaced with warning letters and two were dismissed. The fines that did stick were low, between $2,250 and $8,000.Aside from the obvious potential harms to workers, gas leaks pose fire risks and can cause respiratory problems for people in nearby communities.Phillips 66 declined to comment for this story. The company was separately fined $20,000 over the incident by the department of natural resources.Despite the record of lax enforcement by the state police, gas companies in the state say they are being treated unfairly and have lobbied for legislation to loosen requirements around reporting pipeline leaks. Louisiana has more gas pipelines than any other state except Texas, and more gas pipeline projects are planned in the state to support the growing demand for US natural gas exports.The proposal, House Bill 549 from Louisiana’s Republican representative Danny McCormick, was approved by Louisiana lawmakers and has been sent to the Democratic governor John Bel Edwards’ desk. It is one of many efforts by the influential oil and gas industry to avoid regulation and keep its tax rates low in the state. If signed into law, it would absolve companies from reporting natural gas leaks of less than 1,000 pounds, unless they cause hospitalization or death.Gene Dunegan, the program manager for Louisiana state police’s emergency services unit, defended the department’s record on fines, saying it had reduced them when pipeline companies present reasonable explanations for failing to report them within an hour. While Louisiana law requires pipeline companies to “immediately” report leaks, it does not define a deadline for doing so. The state police ask companies to report incidents within an hour.“Our goal is not to collect monies, but to keep the violation from recurring,” Dunegan said. “Most [companies] are proactive and implement needed changes and training prior to hearing from us, others not so much.”The state police issued few tickets over the past five years – less than 10 a year on average. One pipeline company’s name appears on the list more than any other: Centerpoint Energy. The company was ticketed seven times over the past three years, totaling $38,750.Trey Hill, a lobbyist representing Centerpoint, helped push McCormick’s bill through the Louisiana legislature. Centerpoint contested a ticket for failing to notify state police of one natural gas release, but state police dismissed the fine before a judge could decide on the case, Hill said in a legislative meeting in April. Atmos Energy, which was fined by Louisiana state police twice in 2020, also supported McCormick’s bill.Louisiana was among the first states to make trespassing on pipelines a felony, which pipeline companies have used to target environmental protesters and journalists. A federal judge recently allowed a challenge to Louisiana’s anti-protest pipeline law to move forward.Pipeline incidents are already underreported, said Anne Rolfes, the director of Louisiana Bucket Brigade, an environmental organization that opposed the Bayou Bridge pipeline. “These accidents are overlooked, business as usual,” she said.In other states, the leaks are often overseen by energy regulators. In Oklahoma, for example, violations are enforced by the state’s Corporation Commission, but the highway patrol can also file charges against companies.In Louisiana, the department of natural resources’ pipeline division regulates only much larger gas leaks in intrastate pipelines that carry toxic or flammable products. “Our role is to conduct an investigation after the fact,” Steven Giambrone, the pipeline division director, said in the April committee hearing. “We’re not a first responder.”John Porter, the commander of the emergency services unit of the Louisiana state police, warned lawmakers that looser reporting thresholds could trigger public health concerns when smaller leaks happen in populated areas.“If we have a gas leak at a major intersection, 1,000 pounds would be an extreme amount with vehicles traveling by, with pedestrians traveling by,” he said. “And all we’re asking is for notification for us so we can get the proper emergency services people out there to protect the public.” More
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in US PoliticsThat we are living in science fiction was brought home to me last week when I put down Kim Stanley Robinson’s superb climate-futures novel The Ministry for the Future and picked up Bill McKibben’s New Yorker letter on climate, warning of the melting of the Thwaites Glacier, “already known as the ‘doomsday glacier’ because its collapse could raise global sea levels by as much as three feet”. Where we are now would have seemed like science fiction itself 20 years ago; where we need to be will take us deeper into that territory.Three things matter for climate chaos and our response to it – the science reporting on current and potential conditions, the technology offering solutions, and the organizing which is shifting perspectives and policy. Each is advancing rapidly. The science mostly gives us terrifying news of more melting, more storms, more droughts, more fires, more famines. But the technological solutions and the success of the organizing to address this largest of all crises have likewise grown by leaps and bounds. For example, ideas put forth in the Green New Deal in 2019, seen as radical at the time, are now the kind of stuff President Biden routinely proposes in his infrastructure and jobs plans.It’s not easy to see all the changes – you have to be a wonk to follow the details on new battery storage solutions or the growth of solar power in cheapness, proliferation, efficiency and possibility, or new understanding about agriculture and soil management to enhance carbon sequestration. You have to be a policy nerd to keep track of the countless new initiatives around the world. They include, recently, the UK committing to end overseas fossil fuel finance in December, the EU in January deciding to “discourage all further investments into fossil-fuel-based energy infrastructure projects in third countries”, and the US making a less comprehensive but meaningful effort this spring to curtail funding for overseas extraction. In April, oil-rich California made a commitment to end fossil fuel extraction altogether – if by a too-generous deadline. A lot of these policies have been deemed both good and not good enough. They do not get us to where we need to be, but they lay the foundation for further shifts, and like the Green New Deal many of them seemed unlikely a few years ago.We have crossed barriers that seemed insurmountable at the end of the last millenniumThe US itself has, of course, made a huge U-turn with a presidency that has begun by undoing much of what the previous administration did, reregulating what was deregulated, restarting support for research, and rejoining the Paris climate accords. The Biden administration is regularly doing things that would have been all but inconceivable in previous administrations, and while it deserves credit, more credit should go to the organizers who have redefined what is necessary, reasonable and possible. Both technologically and politically far more is possible. There are so many moving parts. The dire straits of the fossil fuel industry is one of them – as the climate journalist Antonia Juhasz put it recently: “The end of oil is near.”The organization Carbon Tracker, whose reports are usually somber reading, just put out a report so stunning the word encouraging is hardly adequate. In sum, current technology could produce a hundred times as much electricity from solar and wind as current global demand; prices on solar continue to drop rapidly and dramatically; and the land required to produce all this energy would take less than is currently given over to fossil fuels. It is a vision of a completely different planet, because if you change how we produce energy you change our geopolitics – for the better – and clean our air and renew our future. The report concludes: “The technical and economic barriers have been crossed and the only impediment to change is political.” Those barriers seemed insurmountable at the end of the last millennium.One of the things that’s long been curious about this crisis is that the amateurs and newcomers tend to be more alarmist and defeatist than the insiders and experts. What the climate journalist Emily Atkin calls “first-time climate dudes” put forth long, breathless magazine articles, bestselling books and films announcing that it’s too late and we’re doomed, which is another way to say we don’t have to do a damned thing, which is a way to undermine the people who are doing those things and those who might be moved to do them.The climate scientist Michael Mann takes these people on – he calls them inactivists and doomists – in his recent book The New Climate Wars, which describes the defeatism that has succeeded outright climate denial as the great obstacle to addressing the crisis. He echoes what Carbon Tracker asserted, writing: “The solution is already here. We just need to deploy it rapidly and at a massive scale. It all comes down to political will and economic incentives.” The climate scientist Diana Liverman shares Mann’s frustration. She was part of the international team of scientists who authored the 2018 “hothouse Earth” study whose conclusions were boiled down, by the media, into “we have 12 years”.The report, she regularly points out, also described what we can and must do “to steer the Earth System away from a potential threshold and stabilize it in a habitable interglacial-like state. Such action entails stewardship of the entire Earth System – biosphere, climate, and societies – and could include decarbonization of the global economy, enhancement of biosphere carbon sinks, behavioral changes, technological innovations, new governance arrangements, and transformed social values.” It was a warning but also a promise that if we did what science tells us we must, we would not preserve the current order but form a better one.Another expert voice for hope is Christiana Figueres, who as executive secretary of the United Nations framework convention on climate change negotiated the Paris climate accords in 2015. As she recently declared: “This decade is a moment of choice unlike any we have ever lived. All of us alive right now share that responsibility and that opportunity. The optimism I’m speaking of is not the result of an achievement, it is the necessary input to meeting a challenge. Many now believe it is impossible to cut global emissions in half in this decade. I say, we don’t have the right to give up or let up.” She speaks of how impossible a treaty like the one she negotiated seemed after the shambles at the end of the 2009 Copenhagen meeting.Each shift makes more shifts possible. But only if we go actively toward the possibilities rather than passively into the collapseThe visionary organizer adrienne maree brown wrote not long ago: “I believe that all organizing is science fiction – that we are shaping the future we long for and have not yet experienced. I believe that we are in an imagination battle …” All these voices have taken the side of hope in the imagination battle, offering choices and possibilities and the responsibilities that come with those things, as does the actual science fiction in The Ministry for the Future, which takes a turn for the utopian by the end. When I began reading it, apocalyptic news seemed to chime in with the novel. But as I finished it I ran across stories about Scotland’s plans to rewild much of its land, which could have come from the book. And I saw the astonishing news that on the afternoon of Saturday 24 April, California got more than 90% of its energy from renewables.That we cannot see all the way to the transformed society we need does not mean it is impossible. We will reach it by not one great leap but a long journey, step by step. If we see how impossible our current reality might have seemed 20 years ago – that solar would be so cheap, that Scotland would get 97% of its electricity from renewables, that fossil fuel corporations would be in freefall – we can trust that we could be moving toward an even more transformed and transformative future, and that it is not a set destination but, for better or worse, what we are making up as we go. Each shift makes more shifts possible. But only if we go actively toward the possibilities rather than passively into the collapse. More
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in US PoliticsMillions of people in Texas have spent days in below-freezing temperatures without power in what officials have called a “total failure” of the state’s electricity infrastructure. How did oil- and gas-rich Texas – the biggest producer of energy in the US – get here?While there are many factors that led to the power outages in Texas, the state’s power grid has come under intense scrutiny in light of the storm. Here’s what we know so far about Texas’s power grid and the role it played in the state’s winter disaster.Who controls Texas’s power grid?The “Lone Star” statelikes to go it alone when it comes to delivering power to its residents. Texas is unique among the 48 contiguous US states in that it relies on its own power grid. The other 47 states are all part of the two power grids that service the eastern and western halves of the country.The Electric Reliability Council of Texas, known as Ercot, manages the state’s power grid. Ercot is technically a non-profit corporation, and while it functions independently from the state’s government, the corporation is overseen by a state agency called the Public Utility Commission of Texas. Members of the commission are appointed by the state’s governor.Texas is the only state in the country, besides Alaska and Hawaii, that is not part of either the Eastern Interconnection or Western Interconnection, the two main power grids in the US. This means that Texas is not regulated by the Federal Energy Regulatory Commission (Ferc), the agency that oversees interstate electric transmission. Instead, Texas is basically “an electrical island in the United States”, as described by Bill Magness, CEO of Ercot. While this means that Texas has more control over electricity in the state, it also means there are fewer power plants the state can rely on for power.Parts of Texas are not serviced by Ercot. El Paso at the western tip of the state gets power from the Western Interconnection, which is why the city has been saved from the most brutal effects of the power outages.Why are so many people without power?Ercot turned off power for millions of customers after several power plants shut down due to the below-freezing temperatures the state is experiencing. Officials at Ercot said the equipment at the plants could not handle the extreme, low temperatures. The choice was either shutting down power for customers or risking a collapse of the grid altogether.Why is Texas on its own power grid?For as long as electricity has existed in Texas, the state, which prides itself on its independence has relied on itself for power. Officials in the state have long had a stubborn will to stay out of the hands of federal regulators.While Magness, Ercot’s CEO, said that the shutdown was due primarily to “reasons that have to do with the weather”, critics have said Texas’s energy market incentivizes cheap prices at the cost of delaying maintenance and improving power plants. In 2011, the state experienced similar blackouts, though for a shorter period of time compared with what has been seen this week.Following those blackouts, the Ferc gave a series of recommendations to Ercot to prevent future blackouts, including increasing reserve levels and weatherizing facilities to protect them from cold weather.Ed Hirs, an energy fellow at the University of Houston, told the Washington Post that Ercot “limped along on underinvestment and neglect until it finally broke under predictable circumstances”.Did renewable energy play a role in the grid’s malfunction?While Republicans have been blaming frozen wind turbines for the state’s blackouts, officials and experts say that malfunctions in natural gas operations played the largest role in the power crisis.Ercot said all of its sources of power, including those from renewable sources, were affected by the freezing temperatures. The state largely relies on natural gas for its power supply, though some comes from wind turbines and less from coal and nuclear sources.Natural gas can handle the state’s high temperatures in the summer, but extreme cold weather makes it difficult for the gas to flow to power plants and heat homes. Michael Webber, an energy resources professor at the University of Texas Austin, told the Texas Tribune that “gas is failing in the most spectacular fashion right now”.With the climate crisis likely to trigger more freak weather events like the one Texas is suffering it is noteworthy that there are places that experience frigidly cold weather that rely heavily on wind turbines and manage to have electricity in the winter. In Iowa, a state which sees freezing temperatures more often than Texas, nearly 40% of electricity is generated by wind turbines.What are officials doing to prevent future blackouts?With millions still without power as of late Wednesday, officials in Texas remain focused on getting power back to residents and remedying the damage from the storm. Politicians from both major parties have criticized Ercot for its handling of the storm, but officials have steered clear of providing examples of specific fixes. Texas’s governor, Greg Abbott, has called for an investigation into Ercot, declaring it an emergency item for the state’s legislative session.But some Texas leaders have made it clear that they believe Texas should remain independent from the national power grids. Rick Perry, a former governor of the state who also served as Donald Trump’s energy secretary until 2019, said: “Texans would be without electricity for longer than three days to keep the federal government out of their business.” More
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in US PoliticsDonald Trump’s acquittal in the US Senate (Report, 14 February) surely provides the best possible evidence for never allowing politicians to get involved in judicial decision-making. Their priorities lie in other directions. Les Baker Fordingbridge, Hampshire• The Queen gets £220m a year for seabed lease options for windfarms (Queen’s property chief delays sale of Scottish seabed windfarm plots, 12 February). Really? Perhaps she could give the country her cut given the future costs of the climate crisis, Covid and the expected hardships to come? Stephen King London• While I can empathise with Elizabeth Kerr (Letters, 11 February) my own travel aspirations are more mundane. I would just like to be able to visit Scotland to hand-deliver the teddy bear I have bought for my first grandchild, born six weeks ago. Nick Denton Buxton, Derbyshire• I assume that the original site in Wales was the manufacturer’s showroom (Dramatic discovery links Stonehenge to its original site – in Wales, 12 February). After all, you wouldn’t buy a circle of standing stones unless you’d seen it standing up and circular, would you? Katy JennisonWitney, Oxfordshire• If the people of Wales call – quite rightly – for the return of the “Preseli marbles” (Letters, 12 February) please can the stones go home by the same route and method so that we can all enjoy the spectacle? Sue BallBrighton More
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