Climate groups say green energy spending in infrastructure bill is a giveaway for oil companies

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By Leslie Kaufman on 08/09/2021

(Bloomberg) – When negotiators released the more than 2,700-page text of the infrastructure bill that is progressively advancing through the Senate this week, they discussed it like a half-full glass – the flawed first step towards greening of US energy and industry.

However, for many watching it from outside of government, what’s in that glass has been polluted.

Many of the provisions of the bill are on the oil industry’s wish list. The bill provides more than $ 10 billion for carbon capture, transport and storage, as well as $ 8 billion for hydrogen, without specifying that the energy used to produce it comes from clean sources. A new liquid natural gas plant in Alaska has earned billions of dollars in loan guarantees, while other waivers in the bill will weaken environmental reviews of new construction projects, according to climate groups.

“This infrastructure proposal is not a down payment on actual climate action,” said Mitch Jones, director of Food & Water Watch Policy, a Washington accountability organization. “It doubles support for climate polluters. “

The bill addresses some key climate change priorities, with $ 7.5 billion for a network of electric vehicle chargers, $ 21.5 billion to create a clean energy demonstration office, and $ 16 billion for dollars for energy efficiency and renewable energy. There is money for resilience projects and fighting forest fires. But that did nothing to reassure the more progressive wing of the environmental lobby, which is increasingly concerned that the oil industry is co-opting the administration’s agenda.

Much of that anxiety has gathered around support for carbon capture. Last month, hundreds of climate groups wrote an open letter calling on Biden to dismiss carbon capture as a “dangerous distraction” to phasing out fossil fuels altogether. While the scientific consensus holds that carbon capture will be crucial in slowing atmospheric warming, many environmentalists fear that it will also extend the lifespan of the fossil fuel industry, especially in the United States.

Currently, some 40 million tonnes of carbon is captured globally, the vast majority by energy companies for a process known as enhanced oil recovery, in which gas is pumped into the ground to force crude oil out. to go back up to the surface. “The EOR is disastrous for the climate because it results in more oil extraction and more carbon emissions when that oil is burned,” the environmental groups wrote in their letter.

Frank Macchiarola, senior vice president of the American Petroleum Institute, which represents oil and gas interests, disagrees. He said in a statement that the group supports “the development of innovative technologies, such as carbon capture and hydrogen, which will help advance the climate.”

He has allies in the world of climate advocacy. Noah Deich, president and co-founder of Carbon 180, a group that advocates for carbon elimination, said capture will be key to decarbonizing heavy industries such as steel and cement.

Deich understands the skepticism of climate groups, but doesn’t think technology should allow oil production. “If done right, the bill could lead to a lot of carbon capture and recovery outside of the enhanced oil recovery space, and provide a very good basis for cleaning up heavy industry,” he said. he declared.

It is not just carbon capture that annoys critics of the infrastructure bill. Although there is $ 5 billion to fund the purchase of clean school buses, half of that amount can be used for vehicles powered by cleaner fossil fuels; these might be better for the environment than diesel, but not as clean as electric buses with no carbon emissions. Even funding for electric vehicle charging infrastructure includes $ 2.5 billion that could be used to support vehicles that burn natural gas and propane, both of which burn cleaner than gasoline, but still contribute. to global warming.

“When you look at the energy provisions of this bill, they are a boon to the fossil fuel industry and a dismal failure from a climate point of view,” said Carroll Muffett, chief executive of the Center for International Environmental Law, a non-profit company with offices in Washington. The group is still working on full accounting, but Muffett estimates the bill includes more than $ 25 billion for technologies that are either “promoted or directly beneficial” to the fossil fuel industry.

President Joe Biden came to power promising a sweeping infrastructure bill that would create a more environmentally friendly economy and electricity system while creating jobs. But it was difficult to get that agenda through a Senate divided equally between Democrats and Republicans. The bill could also face an uphill battle in the Democrat-controlled House of Representatives, where key players such as Transport Committee Chairman Peter DeFazio have previously said it fails to resolve. the climate crisis.

Senate Democrats and the Biden administration addressed the discontent by saying they would use a separate budget bill that will only require 50 votes to pass more drastic measures.

“Although the bipartite infrastructure package does not address the climate crisis on the scale and scope that we need, I believe we will have a historic opportunity to meet this moment through the process of budget reconciliation,” said Senator Ed Markey, a Democrat known as the Progressive Climate and Biden ally. “This will be a critical down payment on much more climate action in the months and years to come – both in Congress and at the polls.”

John Noel, a senior climate activist for Greenpeace, said loopholes in the infrastructure bill would prompt advocates to focus on the accompanying measure.

“The reconciliation package must be where we challenge the power of the fossil fuel industry and all fossil fuel subsidies and, like, throw the industry into a controlled decline,” he said. . “Outrage against this bipartisan bill is our lever to get there.”


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