The Biden administration on Nov. 23 said 50 million barrels of oil will be released from the Strategic Petroleum Reserve in a bid to drive down fuel prices.

In a briefing, senior administration officials said 32 million barrels will be released through an exchange with oil companies, for later return under the expectation that prices will eventually slide lower. An additional 18 million barrels will be sold, according to administration officials who spoke under press-briefing ground rules that they would not be named.

Separately, President Joe Biden said India, Japan, South Korea and the United Kingdom agreed to release oil from their reserves. "And China may do more as well," he added.

"This coordinated action will help us deal with the lack of supply, which in turn helps ease prices," Biden said.

One of the unnamed officials said there is "an expectation among markets and others that oil prices will, in fact, be falling," which is in part "the reason why one of the tools being used here is an exchange."

Leaders of the Senate Energy and Natural Resources Committee called for increased domestic oil production. 

"Today's release from the Strategic Petroleum Reserve is an important policy Band-Aid for rising gas prices, but does not solve for the self-inflicted wound that shortsighted energy policy is having on our nation," Sen. Joe Manchin (D-W.Va.), the committee's chairman, said. "With an energy transition underway across the country, it is critical that Washington does not jeopardize America's energy security in the near term and leave consumers vulnerable to rising prices."

Sen. John Barrasso (R-Wyo.), the committee's ranking Republican, called the SPR action "desperate."

"President Biden has either eliminated or severely restricted access to America's oil and natural gas resources on federal lands and waters," Barrasso said.

Senate Next Stop for Budget Bill

The Senate will begin considering the House-passed 10-year budget bill as soon as the Senate parliamentarian completes procedural actions necessary for considering the legislation under filibuster-exempt reconciliation rules, Senate Majority Leader Charles Schumer (D-N.Y.) said Nov. 19.

"As soon as the necessary technical and procedural work with the Senate parliamentarian has been completed, the Senate will take up this legislation. We will act as quickly as possible to get this bill to President Biden's desk and deliver results for middle-class families," Schumer said.

The $1.75-trillion legislative package, which includes $555 billion in tax credits and spending aimed at reducing greenhouse gas emissions, faces an uncertain outlook in the 50-50 Senate. Sens. Joe Manchin (D-W.Va.) and Kyrsten Sinema (D-Ariz.) have not committed to supporting the bill as passed by the House.

White House press secretary Jen Psaki on Nov. 19 said the administration has "been in close touch, as you all know, with Sen. Manchin for several months now. That will continue. That can include answering questions he may have, hearing concerns he may have."

One issue that Manchin has raised is the structure of the bill's tax credit for electric-vehicle purchasers, which would rise from a base amount of $7,500 to $12,500 for cars assembled in the U.S. with union labor and using domestically manufactured batteries.

The domestic-manufacturing top-up has drawn opposition from Canadian Prime Minister Justin Trudeau, who raised the issue at meetings that he and Mexican President Andrés Manuel López Obrador held with Biden on Nov. 18.

Autos Drive Americas, a trade group of auto manufacturers based outside the U.S., has called the proposed EV credit structure "discriminatory."

"It also creates an overly complex analysis that consumers must work through to determine which vehicles are eligible, only to find that most EVs won't receive the full credit," Jennifer Safavian, the group's CEO, said.

Psaki said the administration is "happy to continue having a conversation."

"However, this is something the president is deeply committed to because he believes good-paying union jobs that will help us support clean-energy industries is in our economic and national security and national interest," she said.

Sen. John Barrasso (R-Wyo.), ranking Republican on the Senate Energy and Natural Resources Committee, said the legislation "will meet a buzz saw of resistance in the Senate." No Republican is expected to support the bill, meaning that passage depends on all 50 members of the Senate Democratic Caucus, including Manchin and Sinema, voting for it, allowing Vice President Kamala Harris to cast a tiebreaking vote for passage.

Bifacial PV Tariff Exclusion Reinstated

The U.S. Court of International Trade on Nov. 16 reinstated a tariff exclusion for bifacial solar modules.

The court also reset to 15 percent the tariff on crystalline solar-photovoltaic products, throwing out the increase to 18 percent imposed in 2020 in a proclamation by then-President Donald Trump. In 2018, Trump imposed four-year tariffs on PV products that started at 30 percent and phased down to 15 percent in the fourth year.

The court said Trump's 2020 proclamation withdrawing the exclusion and boosting the tariff was "a clear misconstruction of the statute and outside the president's delegated authority."

In an opinion for the court, Judge Gary Katzmann ruled that "trade-restricting modifications are not permitted under the authority granted to the president" by the Trade Act of 1974.

Abigail Ross Hopper, CEO of the Solar Energy Industries Association, hailed the court's action, calling the 2020 proclamation "an unlawful attempt to harshen the Section 201 tariffs." SEIA sued to overturn the 2020 action, along with NextEra Energy, Invenergy and EDF Renewables.

The tariffs are due to expire Feb. 6.

Biden: Powell Will Make Climate 'Top Priority'

Federal Reserve Chairman Jerome Powell will make climate policy a "top priority," Biden said Nov. 22 in announcing plans to nominate Powell for a second four-year term as the Fed's chairman.

"He's made it clear to me: A top priority will be to accelerate the Fed's effort to address and mitigate the risks—the risk that climate change poses to our financial system and our economy," Biden said.

Powell has chaired the Fed's Board of Governors since 2018. He has been a board member since 2012.

Biden said he will nominate Lael Brainard as the Fed's vice chair. Brainard has served on the Fed's board since 2014.

Biden said Brainard has done "pioneering work on how the Fed should account for the emerging risk of climate change to our financial system."

The Federal Reserve has created a Supervision Climate Committee, which Brainard said in a March 23 speech will "strengthen our capacity to identify and assess financial risks from climate change and to develop an appropriate program to ensure the resilience of our supervised firms to those risks."

A July 24 report written by Michael Kiley, deputy director of the Fed's division of financial stability, says that climate change poses large economic risks. "Climate change may impact the entire distribution of economic activity over time—for example, making severe contractions in economic activity more likely with potentially sizable adverse welfare effects," the report says.

FERC Steps Up Enforcement

FERC increased enforcement activity in fiscal year 2021, opening 12 investigations and negotiating eight settlements totaling $6.4 million in fines and repayment orders, according to the commission's annual enforcement report, released Nov. 18.

In FY 2021, which ended Sept. 30, FERC's enforcement staff focused on fraud and market manipulation, "serious violations" of reliability standards, anticompetitive conduct, threats to energy infrastructure, and conduct threatening market transparency, the commission said.

FERC Chairman Richard Glick said enforcement of the commission's market regulations is one of his top priorities.

"I cannot stress this enough. We must deter market manipulation and protect consumers through vigorous enforcement of commission and market rules," Glick said.

As part of its market surveillance, FERC reviewed natural gas and electricity market activities during the February cold snap that struck Texas and other parts of the south-central U.S.

"After analyzing the additional data and information gathered during the inquiries, staff decided to close seven of the natural gas inquiries, refer two matters for investigation by [the Division of Investigations], and continue to analyze one matter," the commission said in the report.

For electricity during the cold snap, market surveillance staff opened four inquiries in the Southwest Power Pool and Midcontinent Independent System Operator markets. Three of the inquiries were closed and one, in the SPP, is still under review, the report says.

FERC's Division of Audits and Accounting audited 12 public utility, natural gas and oil pipeline companies on a range of issues, resulting in 64 "findings of noncompliance," 250 recommendations for corrective action, and $18.5 million in refunds and other recovery actions.

Technology Bill Headed for Conference Committee

House and Senate Democratic leaders agreed Nov. 17 to convene a conference committee to reconcile the two houses' versions of legislation aimed at boosting research into energy and other technologies.

The Senate on June 8 passed a $250 billion bill to increase research and development funding on advanced energy and other "focus areas." The Senate bill would authorize $16.9 billion for Department of Energy research into technologies such as energy storage, grid modernization and carbon capture.

The Senate bill is significantly different from legislation the House passed June 28, a package that included HR 3593, which would authorize $8.8 billion for DOE's Office of Science in fiscal year 2022, increasing to $11.1 billion by fiscal year 2026. The House bill would authorize funds for R&D in energy storage, solar, hydrogen, critical-materials, nuclear fusion, manufacturing, carbon-capture and bioenergy technologies.

Speed, Scale of Energy Transition Disputed

The timing of scaling up production systems to meet projected electric-vehicle and renewable-energy demand was in dispute Nov. 16 at a House hearing exploring changing energy supply chains.

Ethan Zindler, an analyst at Bloomberg NEF, testified that "how the world generates, delivers and consumes energy are all not only being transformed radically—but also rapidly." Zindler spoke at a hearing held jointly by the House Energy and Commerce Committee's subcommittees on Energy and on Environment and Climate Change.

Zindler said funding analysis in the recently enacted infrastructure legislation and the proposed 10-year budget bill "looks at this from a supply and demand side," and noted that manufacturing tax credits "help to ensure that as the market scales, more of the manufacturing takes place in the U.S. than it would elsewhere."

His written testimony said the U.S. is a "laggard" in production of batteries and battery components. "Achieving scale-up will require a holistic approach to policymaking and the recognition that many of the largest, most sophisticated manufacturing facilities will only come on line if there is sufficient confidence about local demand."

Lucian Pugliaresi, president of the Energy Policy Research Foundation, said there is little chance that domestic production of minerals needed to manufacture EVs and renewable-energy generating equipment could be scaled up sufficiently to meet the Biden administration's targets of reducing greenhouse gas emissions 50 to 52 percent below 2005 levels by 2030 and decarbonizing the power sector by 2035.

"No one who knows how we do permitting, how we go through development—[National Environmental Policy Act] reviews—believes that's even possible," Pugliaresi said in response to questions from Rep. David McKinley (R-W.Va.).

"The biggest concern with the power sector is, if you push it too fast, it's going to become very brittle," he added.

Pugliaresi's written testimony pointed to Germany, where he said government policies to increase use of renewables and phase out coal and nuclear generation resulted in increased dependence on natural gas.

He also testified that "we may end up with an energy transition which will see the U.S. move from our current position of energy independence to dependence on a broad set of critical minerals from insecure sources while at the same time experiencing a growing reliance on traditional oil and gas supplies from insecure and expensive sources."

Quoting International Energy Agency figures, Pugliaresi said electric cars require more than 100 kilograms of copper, lithium and nickel per vehicle.

Rep. Fred Upton (R-Mich.), ranking Republican on the energy subcommittee, said "the worldwide semiconductor chip shortage and the cascading impact across hundreds, thousands, of industries provides proof of what's at stake when we become overly dependent on China and overseas manufacturing."

Zindler pushed back against Republican lawmakers' argument that the U.S. is moving too fast in transitioning away from fossil energy. "Only in the U.S. is this viewed as a rush," he said in response to questions from Rep. Paul Tonko (D-N.Y.), chairman of the Environment and Climate Change Subcommittee. "If anything, we are well behind in the transition that is taking place."

Currently, Zindler said, U.S. investment in the energy transition totals about $500 billion per year. He suggested that twice that amount would be needed to meet net-zero emissions targets.

In response to questions from Rep. Scott Peters (D-Calif.), Zindler said "the reality is that the number of EVs that are being sold around the world has been surging. You can bury your head in the sand and say we just like internal-combustion engine vehicles, but eventually there will be a transition."

EVs' share of global vehicle sales rose from 2.6 to 7.2 percent between 2019 and the first half of 2021, Zindler's written testimony said, adding that Bloomberg NEF projects $600 billion will be spent over the next 20 years on EV charging infrastructure.

Study Spotlights Expanding Interconnection Ties

Expanding ties between the Western and Eastern interconnections would enable each region to support the other during peak demand, move wind- and solar-generated power across the U.S., and strengthen reliability and resilience, according to results of a DOE-funded "seam study" released Nov. 18.

Expanding hookups between the Western and Eastern interconnections would yield benefit-to-cost ratios of up to 2.5, "indicating significant value to increasing the transmission capacity between the interconnections under the cases considered, realized through sharing generation resources and flexibility across regions," the paper says.

James McCalley, an Iowa State University engineering professor who co-authored two papers as part of the study, estimated that building a "macrogrid" of transmission lines connecting Western and Midwestern power sources would cost $50 billion.

McCalley said the macrogrid would strengthen resilience by expanding the capacity to send power to a region experiencing a natural disaster.

The study says the macrogrid would enable transmission of wind and solar energy to distant load centers.

"The Midwest makes wind energy, but not as many people live in the Midwest. So we need to move that energy," McCalley said.

Currently, seven high-voltage DC lines with 1,320 MW of capacity link the Western and Eastern interconnections. The Western grid's generating capacity totals 250,000 MW and the Eastern grid's capacity is 700,000 MW, the study says.

FERC Opens Reactive-Power Compensation Inquiry

FERC opened an inquiry on Nov. 18 to explore issues in connection with compensation for reactive power capability.

FERC in 1999 approved a methodology proposed by American Electric Power for allocating costs of synchronous generating equipment between real and reactive power capability, a staff report says. The paper says production and consumption of reactive power is necessary for voltage support.

FERC is seeking comment on potential alternatives to the AEP methodology and whether resources connected to a distribution system and selling in wholesale markets should be eligible for reactive-power compensation.

When the commission adopted the AEP methodology, it did not require its uniform use, resulting in differing methods of paying for reactive power in organized wholesale markets, or no payment at all, the FERC staff report says. The California ISO and the Southwest Power Pool do not pay compensation for reactive power capability; resources in the PJM and MISO markets receive payments based on the AEP methodology; and payments in the ISO New England and New York ISO markets are based on a flat dollar amount per megavolt-ampere of reactive power capability, the report says.

Because of the market's shift in generation mixes toward nonsynchronous resources, such as variable renewables, and a move away from cost-of-service rates for generators selling into FERC-regulated markets, more filings for reactive-power compensation have been addressed through FERC hearing and settlement procedures.

In the past six years, the report says, FERC has set "at least" 95 reactive-power proceedings in the PJM for hearing and settlement.

"These factors have contributed to customers and the commission facing challenges in evaluating reactive power rate schedules" submitted under the Federal Power Act's Section 205, the report says.

Initial comments will be due 60 days after FERC publishes the inquiry notice in the Federal Register. Reply comments will be due 90 days after publication.

DOE Says No Change in Direct Heater Standards

The Department of Energy on Nov. 23 determined no change is necessary in energy-efficiency standards for direct heating equipment.

DOE said "technology options, product cost and energy use have not changed significantly," and the market for direct heating equipment has decreased.

Standards for vented heaters, including wall and floor heaters, were last updated in 2010 and affect equipment made after April 16, 2013. There are no standards in place for unvented direct heaters, such as electric baseboard and portable heaters, DOE said.

Becker Tapped to Head EPA Mountain Region

Biden plans to name KC Becker, a former speaker of Colorado's House, to direct the Environmental Protection Agency's Region 8, which covers six Western states, EPA Administrator Michael Regan said Nov. 18.

Becker served four terms in the Colorado House, including a stint as speaker.

Haaland at Vineyard Wind Groundbreaking

Interior Secretary Deb Haaland attended a groundbreaking on Nov. 18 for the 800 MW Vineyard Wind project, which is on track to be the largest offshore wind project in U.S. waters.

Interior's Bureau of Ocean Energy Management on July 15 approved construction of the project's first phase, 62 turbines in waters 15 miles south of the Massachusetts island of Martha's Vineyard. Two submarine cables will carry the project's output to shore.

"Vineyard Wind 1 represents a historic milestone for advancing our nation's clean-energy production," Haaland said.

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