Four automakers have reached a “framework agreement” with California officials on greenhouse gas emissions standards, Gov. Gavin Newsom announced July 25.
California’s deal with Ford, American Honda Motor Co., Volkswagen Group of America and BMW North America is an end run around the Trump administration’s proposed rollback that would freeze standards for six years and block California from setting its own rules to limit heat-trapping emissions from motor vehicles.
“We recognize the importance of compromise and we all agree that a framework maintaining a national solution is the preferred path forward,” the agreement says.
Automakers have raised concerns that the Trump administration’s proposal would result in years of litigation. The administration proposal would undo a 2012 agreement between California and the federal government that set harmonized standards for GHG emissions and fuel economy.
Automakers also are concerned about building for two markets—one for states following the administration’s proposed standards and the other for California and the 13 states that enforce California’s emissions limits, an option they have under Section 177 of the Clean Air Act. The 13 states include Colorado, Oregon and Washington.
The new agreement recognizes California’s authority to establish its own emissions rules and set requirements for marketing zero-emission vehicles, including electric cars, in the state.
“Participating companies are choosing to pursue a voluntary agreement in which California accepts these terms as compliance with its program, given its authority, rather than challenge California’s GHG and ZEV programs,” the agreement states.
Newsom urged other automakers and the administration to accept the agreement. “I now call on the rest of the auto industry to join us and for the Trump administration to adopt this pragmatic compromise instead of pursuing its aggressive rule change,” Newsom said in a statement.
Rep. Frank Pallone (D-N.J.), chairman of the House Energy and Commerce Committee, and Sen. Tom Carper (D-Del.), ranking Democrat on the Senate Environment and Public Works Committee, praised the agreement. Carper said the Trump administration’s proposal would “send the automotive sector into years of litigation and economic disarray.”
Rep. Debbie Dingell (D-Mich.), who last month chastised Trump administration officials at a House hearing for what she called their failure to negotiate in good faith with California, called the agreement a “positive development.” She added that the framework should be “a catalyst for all stakeholders to go back to the table.”
Mary Nichols, chair of the California Air Resources Board, said if the White House balks at accepting the new agreement, the state would “work with individual car makers to implement these principles.” She said if the administration proposal is finalized, the state would continue enforcing its rules and challenge the administration’s rule in court.
The Alliance of Automobile Manufacturers took a cautious stance on the agreement. In a statement, the group reiterated its support for “year-over-year increases in fuel-economy standards that align with the marketplace, while also advocating for one national program.”
However, the group also said that standards required under the 2012 program for model years 2022 to 2025 “are not attainable and need to be adjusted.”
“Individual companies may have different perspectives on how best to achieve greater certainty,” the statement said.
Under the deal, the four automakers’ “terms for a national program” include year-over-year increases in emissions limits at a nationwide annual average of 3.7 percent, for model years 2022 through 2026. Of the 3.7 percent, 1 percent of the annual improvement could be covered through credits earned by selling electric vehicles, including battery, hybrid, plug-in hybrid or fuel-cell drives.
The 3.7-percent annual improvement target over five years was a concession to automakers. Under the 2012 program, the automakers would have to achieve 4.7-percent annual improvements over four years.
Under the agreement, automakers also would receive incentives to adopt nondrive technologies for reducing GHG emissions, such as aerodynamic improvements.
The agreement would result in “at least 30 percent more greenhouse gas emissions reductions” compared with a market split between vehicles built to the Trump administration’s proposed standards and those following standards set by California and the 13 other states that enforce California’s rules, according to Newsom’s office.
Committee Advances Energy R&D Bills
Legislation authorizing funds for solar, wind and fossil-fuel energy research and development on July 24 passed out of the House Science, Space, and Technology Committee.
Rep. Eddie Bernice Johnson (D-Texas), chairwoman of the committee, said the bills would “directly address the growing issue of climate change by focusing the federal government’s energy research efforts toward cutting greenhouse gas emissions.”
Rep. Randy Weber (R-Texas), ranking Republican on the panel’s Energy Subcommittee, said the fossil-energy bill (HR 3607) would result in “narrowing” the goals of the Department of Energy’s fossil-fuel energy research program to “focus almost entirely on emissions-control technologies.” The committee rejected Weber’s amendment to reduce authorized spending and to direct DOE to research a “broad range” of fossil-energy production and use technologies.
HR 3607 includes language directing DOE to give priority to technologies, including carbon capture, use and sequestration, with the “potential” to meet emissions-reduction goals in the 2015 Paris climate accord.
The bill also would direct DOE to study extraction of rare earths from coal and coal byproducts; advanced combustion and fuel-cell technologies; direct-air capture of carbon dioxide; and methane leak reduction.
Authorized spending in fiscal years 2020 through 2024 would total $4.56 billion.
The committee also reported out HR 3597, authorizing $1.49 billion for solar energy research projects over the next five fiscal years. The bill would direct DOE to undertake research into reusing and recycling solar-photovoltaic devices.
For wind energy R&D, the committee reported out HR 3609, authorizing nearly $573 million in spending in fiscal years 2020 through 2024. The bill includes direction for DOE to study technologies to reduce wind energy impacts on eagles, bats and marine wildlife.
House Passes Energy-Water Study Bill
The House on July 23 passed by voice vote a bill that would direct DOE to integrate water issues into its research and development programs.
Under the bill, HR 34, DOE would have one year to draft a plan for meeting the bill’s goals, which include advancing energy technologies that minimize freshwater withdrawals and consumption and increase water efficiency.
The plan would have to touch on developing advanced energy generation cooling technologies; treatment and use of produced waters and wastewater from oil and gas extraction; and energy-efficient technologies for water distribution, treatment, supply and collection systems.
Congress Urged to Boost Water Project Funding
Congress should consider allowing Reclamation Fund revenues to be spent on water projects without going through the appropriations process, a Western water official said at a July 24 House subcommittee hearing.
Tony Willardson, executive director of the Western States Water Council, told a hearing of the House Natural Resources Committee’s Oversight and Investigations Subcommittee that Congress should consider changing the Reclamation Fund into a fund in which receipts could be used for authorized expenses in the year they’re deposited without congressional appropriation. Under a 1914 statute, Reclamation Fund revenues must be appropriated by Congress before they can be spent.
Rep. T.J. Cox (D-Calif.), the panel’s chairman, said use of Reclamation Fund revenues is currently left to the “unpredictable whims of Congress.”
Speaking in opposition, Rep. Louie Gohmert (R-Texas), the subcommittee’s ranking Republican, said switching to a revolving fund would lessen congressional oversight.
Revenues are building up in the fund. Between fiscal years 2012 and 2018, the ending balance increased from $10.84 billion to $16.63 billion, according to testimony from Grayford Payne, the Bureau of Reclamation’s deputy commissioner for policy, administration and budget.
Willardson said in written testimony that Congress has used the unappropriated balances as an accounting maneuver to reduce overall federal borrowing.
“You could say that Congress has borrowed the ‘golden’ egg and left the goose sitting on a Treasury IOU,” his testimony said.
Reclamation Fund revenues could be used for deferred maintenance, dam safety repairs, fish recovery and water conservation projects, Willardson said. He noted that the estimated cost of “major rehabilitation and replacement needs” over the next five years totals $2.9 billion. An additional $1.6 billion is needed for new water and power projects for the Central Valley Project, the Yakima Integrated Plan and the Platte River, he said.
Payne estimated the cost of dam-safety needs for the next decade totals $1.3 billion.
Sources of Reclamation Fund revenues include power sales receipts and royalties from oil and gas leasing on federal lands.
House Dem Leaders Call for Net-Zero GHG by 2050
House leaders on July 23 rolled out a plan for the U.S. to lower greenhouse gas emissions to net zero by 2050.
The House Energy and Commerce Committee plans a series of hearings to begin drafting legislation. Hearings began July 24 with testimony on decarbonization heard by the panel’s Environment and Climate Change Subcommittee.
At the hearing, witnesses said meeting a net-zero goal would require a broad range of energy-efficiency, renewables, storage and carbon-capture technologies, along with zero-carbon fuels for transportation and heat-dependent industrial uses.
“Just like you’re in Vegas, don’t put all your chips on one or two slots,” Karl Hausker, senior fellow at the World Resources Institute’s climate program, said.
Armond Cohen, executive director of the Clean Air Task Force, said a power generation system dominated by wind and solar would be impractical because of the large amount of storage needed to accommodate seasonal variability.
In a California system with 100 percent wind and solar generation, the result of seasonal variability is that “roughly 27 percent of hours of the year cannot be served by wind and sun,” Cohen said in written testimony.
“In theory, we could use battery storage to harvest surpluses and use them in deficit periods. But this is where cost comes in. The sheer amount of storage that must be built to capture maximum surplus, and then [is] utilized infrequently, becomes cost-prohibitive, even at very low storage costs,” he added.
Cohen estimated the costs of building such a storage system at $2.9 trillion, assuming low storage costs of $80 per kWh. In addition, he said, “Only a small amount of the storage capacity would be used regularly to balance daily variations in solar and wind output. Most of the storage capacity would need to be built to store peak seasonal surplus and thus only cycle seasonally,” he added.
Upcoming committee hearings will focus on grid modernization and reducing industrial and transportation emissions.
“Much has changed in the decade since Congress last considered a comprehensive climate plan, including transformative advances in clean-energy technology and a far deeper understanding of climate science and the cost of continued inaction,” Rep. Frank Pallone (D-N.J.), committee chairman, said in announcing the net-zero-by-2050 plan.
At the subcommittee hearing, Rep. Greg Walden (R-Ore.), the full committee’s ranking Republican, spoke against what he called “top-down policies that have been shown to be costly and harmful to consumer and worker interests.”
Rep. John Shimkus (R-Ill.), the subcommittee’s ranking Republican, called for exporting U.S.-made carbon-capture technology to developing countries expanding their dependence on coal-fired generation.
Battery Experts Say Recycling Is Supply Key
Greater recycling of lithium-ion batteries from electric vehicles would increase the domestic supply of battery raw materials, spur domestic battery manufacturing, and reduce sourcing from countries with lax labor and environmental standards, industry witnesses told a July 17 Senate hearing.
The witnesses testified at a Senate Environment and Public Works Committee hearing on battery production and waste management.
Recycling is “low-hanging fruit” for boosting domestic supplies of battery raw materials, Sen. Ben Cardin (D-Md.) said.
James Greenberger, executive director of the trade group NAATBatt International, said in written testimony that 65 percent of cobalt needed for EV demand in the U.S. by 2040 could be supplied by recycling, according to a National Renewable Energy Laboratory study.
Greenberger urged U.S. policymakers to match China in boosting demand for domestic battery manufacturing by simplifying collection of used batteries and keeping recycling costs down. Currently, he said, the costs of recycling exceed the value of materials that could be recovered and sold.
Michael Sanders, senior advisor to the rechargeable-battery consulting firm Avicenne Energy, said it costs roughly $5,000 to recycle an EV battery. About $3,500 of the cost is recoverable by extracting and reselling the battery’s materials, he estimated.
Sanders also testified that establishing battery-collection facilities, as China did, would simplify recycling.
EVs have come under fire from Republican lawmakers because of the labor and environmental impacts of battery production and mining of raw materials. Sen. John Barrasso (R-Wyo.) said 60 percent of global cobalt supply is mined in Congo, and Chinese plants processing cobalt for battery manufacturing cause “significant environmental impacts.”
According to Greenberger, more than 80 percent of cobalt sulfate used in batteries is processed in China, which makes 75 percent of all lithium-ion batteries worldwide.
Sen. James Inhofe (R-Okla.) referenced child labor used in Congolese cobalt mines.
Sanders said child labor concerns involve 20 percent of Congo’s cobalt mining. For the rest, he added, producers and original equipment manufacturers have instituted “traceability” programs to avoid purchase from mines employing children.
Sanders said research is underway to reduce cobalt need for lithium-ion batteries. “The percentage of cobalt per battery is likely to go down substantially,” he said.
Ajay Chawan, associate director of Navigant Consulting, said Toyota has announced plans to roll out a solid-state lithium-ion battery by 2022. Compared to batteries with liquid electrolytes, solid-state batteries would need less cobalt and, in addition, would have greater energy density, Chawan said.
Lawmakers Urged to Create Grid Resilience Metrics
Metrics quantifying the value of grid resilience would speed deployment of energy storage resources by making a stronger case for their cost-effectiveness, the head of the Energy Storage Association told a House subcommittee hearing July 17.
Kelly Speakes-Backman, CEO of the trade group, said, “The major delay in having [storage] deployed on a major scale is really how it fits within the regulatory construct and how it fits within the energy grid, integration itself. It’s really more of a commercial question that’s happening more than a technology question. I think the technology is ready,” she told a hearing of the House Science, Space, and Technology Committee’s Energy Subcommittee.
The subcommittee held a hearing exploring legislation to boost grid and storage research, the Grid Modernization Research and Development Act, and two bills focused on storage—HR 2909, the Promoting Grid Storage Act, and HR 2986, the Better Energy Storage Technology Act.
HR 2986, co-sponsored by Rep. Jaime Herrera Beutler (R-Wash.), would direct DOE to set up a research and development program for grid-scale storage research and development, including cost targets and a mandate for at least five demonstration projects.
In her written testimony, Speakes-Backman said that “without a well-defined and broadly accepted valuation model, resilience will remain challenging to fit into the cost-benefit analysis and program designs” that grid operators, utilities and regulatory commissions use to weigh cost-effectiveness.
She urged the subcommittee to consider mandating DOE to work with “government and industry stakeholders” to develop resilience quantification methods.
Also at the hearing, the head of the Advanced Energy Management Alliance, a trade group for distributed resources, called for helping private-sector technology developers validate their innovations through research programs run by DOE and its national laboratories.
Katherine Hamilton, the group’s executive director, said it is important to “bring entrepreneurs to test and make sure that we have proof of concept, because no utility is going to purchase a piece of equipment that was designed in somebody’s basement. They need to know DOE and the national labs have given it the seal of approval and have shown credibility by testing it and making sure this all works.”
DOE Funds Tribal Energy Projects
The Department of Energy on July 23 announced $16 million in funding for 14 tribal energy projects, including six in the West.
The tribes will put up $23 million to fund the cost-shared projects, DOE said.
DOE grants include:
$2 million for the Colusa Indian Community Council in Colusa, California, to expand electrical distribution and battery storage systems. The council also was awarded nearly $1.15 million to build a 448-kW parking-canopy solar PV system.
$2 million for the Rincon Band of Luiseño Indians in Valley Center, California, to develop two microgrids integrating about 3,100 kW of solar PV capacity with 2,450 kW of standby battery storage and 2,920 kW of diesel-fueled capacity.
$2 million for Aha Macav Power Service to develop a 2.3-MW solar PV array for the Fort Mojave Indian Tribe, whose 42,000-acre reservation is located where California, Nevada and Arizona meet along the Colorado River.
$2 million for the Northern Cheyenne Tribe in Lame Deer, Montana, to install a 2.6-MW solar PV array and 400 kW of behind-the-meter solar for tribal facilities.
$313,406 for the Fort Peck Assiniboine and Sioux Tribes in Montana to install a 72- to 78-kW rooftop solar PV system and integrate efficiency measures into a 50,039-square-foot wellness center.
FERC Opens Houston Office for LNG
The Federal Energy Regulatory Commission is opening a regional office in Houston to handle permitting for liquefied natural gas export terminals.
FERC Chairman Neil Chatterjee said the commission is opening an LNG review and inspection division, with 20 employees in Washington, D.C., and an additional eight employees to be hired for the new office.
Chatterjee said the growth in number and complexity of proposed LNG projects necessitated establishing a commission office in Houston.
“Much of the work related to those LNG projects, and the expertise it requires, is based in and around Houston,” he said.