Biden’s permitting plan: Silver bullet or more red tape?

With six months to go until the election, President Biden has unveiled a far-reaching rules package that tackles everything from power plant emissions and air toxins, to boosting the EV industry and upgrading transmission lines. 

Despite their promise, many of these rules will face long rollouts and fierce legal challenges.

On this episode of Political Climate, hosts Julia Pyper, Brandon Hurlbut, and Emily Domenech explore and debate the pathways to implementing these policies.

Then they zero in on one rule in particular: an effort to streamline permitting for new clean energy projects. While the policy aims to cut down the enormous existing backlog – 2.6 terrawatts’ worth, twice the capacity of the entire U.S. grid today – critics argue it could actually slow down the permitting process for clean energy and other infrastructure projects alike.

The show wraps up with some rapid fire hot takes in our new segment “The Mark-up.” 

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Transcript

Julia Pyper: Did you know it can take 10 to 12 years to permit and build a transmission line in the US? So instead of measuring my life in decades, I was thinking maybe I switch to transmission lines. I'd only be like three and a bit transmission lines old. Emily, Brandon, how many transmission lines old are you?

Brandon Hurlbut: Older than both of you?

Emily Domenech: I was going to say I'm about to be four transmission lines old and I don't like that.

Julia Pyper: Hey, we need more transmission lines. That's a good thing. Welcome to Political Climate. I'm Julia Pyper. With six months to go until the election, President Biden has unveiled a far-reaching rules package, tackling everything from power plant emissions and air toxins to boosting the EV industry and upgrading transmission lines. But most of these rules will face long rollouts and fierce legal challenges. This week, what's the pathway to enacting them? We'll zero in on the effort to streamline permitting for new clean energy projects. The policy could cut down the enormous backlog, 2.6 terawatts worth twice the capacity of the entire US grid today, yet critics argue the rule could actually slow the permitting process. Then we'll wrap up with our rapid fire segment, The Markup. That's all coming up on Political Climate.

I'm joined by my co-host, Brandon Hurlbut and Emily Domenech. And if you're joining us for the first time, Brandon served as Chief of Staff in President Obama's Energy Department and went on to found Boundary Stone Partners and Overture VC. Emily served as a senior energy advisor to Speakers of the House, Kevin McCarthy and Mike Johnson, and is now a senior Vice President at Boundary Stone. Brandon and Emily, hello. Emily, I see you're on the road. Where are you at right now?

Emily Domenech: I am. I'm in Minneapolis, Minnesota for the American Clean Power Association's Clean Power Annual Conference. There's 9,000 different participants and clean energy companies from all over the country here getting together to figure out how we solve our big challenges.

Julia Pyper: Oh, you'll have it figured out by the end of the week, I reckon.

Emily Domenech: Super easy.

Brandon Hurlbut: How many Republicans are there with you, Emily?

Emily Domenech: Honestly, a lot. Way more than you think.

Brandon Hurlbut: Nice.

Julia Pyper: Brandon, how are you doing? What's been going on in your world this week?

Brandon Hurlbut: I had an awesome week. I was at the NREL Industry Growth Forum where I spoke. There was 800 startups, climate tech startups and investors there. So exciting, so inspiring. And then a bunch of the D.C. folks came to LA this week for Milken, so I was having some dinners with some of them, and it was great to see some old friends.

Julia Pyper: Great. Well, let's dive into Biden's rules package. There's a lot to cover here, but I think at least in this episode, we'll set the tone, look at the different pieces the Biden administration's looking to tackle, because altogether these new regulations could prevent billions of tons of greenhouse gas emissions from being emitted and will be critical for helping the president hit his goal of cutting US emissions by half by 2030. But a lot of these rules will face a long road to implementation. They'll face legal challenges. There's obviously a lot of political debate around them, and of course, we want to accurately assess the effectiveness of each of them. The power plant rule was recently announced for instance. It requires coal and gas plants to capture 90% of their carbon emissions or get shut down, but those power plants have until 2032 to do so.

The same timeline is in place to limit tailpipe emissions from new cars. As for the plan to upgrade a hundred thousand miles of transmission lines, well, that will unfold over the next five years, and of course, there'll be legal challenges along the way. GOP lawmakers from states including West Virginia and Kentucky, as well as industry groups like the American Fuel and Petrochemical Manufacturers have vowed to fight them in court.

A lot of these rules were packaged as the Biden Administration's Earth Week endeavors, and of course, they're looking to the election, trying to drum up support from their environmental voter base. But I really want to unpack the details here. So for both of you, aside from permitting, and we'll get there soon in more detail, this is permitting pod after all, which of these rules do you think would be most impactful? We touched on them at a high level here, and Emily, I think I want to go to you first. I know you have a lot of familiarity with some of this. What do you think is most impactful? We will use that word, however you want to interpret it.

Emily Domenech: I was going to say impactful is a tough word for me when I think about this because I'm concerned about the impact of some of these rules on our long-term energy costs and whether or not they'll really be effective. If I had to pick one, I'd probably pick the power plant rule simply because I think the idea that we'd increase energy costs and take some real major energy sources offline when our electricity demands are about to skyrocket with putting more EVs on the grid, it seems crazy to me, but it's tough because when I look at the spectrum of the rules, I think the EV rule probably has a better chance of surviving a legal challenge and that really radically changes the way Americans buy cars and live their lives, all of which I think is a really tall order considering our major automakers are still running billions of dollars in losses on their EV businesses today.

Julia Pyper: Well, quickly on the power plant rule, so I think we'll remember this starting under Obama, the Trump administration put in, I think it was called the ACE Rule at the time. If I'm not mistaken, all these different rules that the EPAs had to act on by law to limit emissions from power plants, they've been stalled in the courts entirely. So what do we think the prognosis even is for a proposal like this?

Emily Domenech: This rule certainly has a better chance of survival than the Obama Clean Power Plan, and a lot of that is because they switched from this system-wide approach to a more individualized facility approach that's a little bit more reflective of what the Clean Air Act intended for noxious pollutants. Keep in mind we're talking about greenhouse gases, so that's a bit of a step from where the Clean Air Act has been and what Congress has done in the past, but it is the same fundamental approach. Much of what the court threw out in the Clean Power Plan under Obama was because they essentially established a cap and trade program through the regulatory process when Congress had voted over and over and over again not to do cap and trade. So I do think that this rule has a slightly better legal prognosis than the Clean Power Plan, but it's going to get challenged for things like reliability and viability and whether or not this, quote, unquote, "best system of emissions reduction," which is the standard that's under the Clean Air Act, is really accurately reflected in what's being required by the law.

When we're talking about carbon capture technology that hasn't really been deployed broadly and at scale for commercial power plants, can we say at this point, at this time that that's the best available system for emissions reduction? Maybe that's true in 2030, but we don't know that yet because we haven't really seen that level of technology improvement across the market, and that is something that Clean Air Act tells you, you have to consider. The EPA has a long history of being able to say, "Hey, we've identified something that we can look at through a cost benefit analysis." PM 2.5 is another pollutant, like an actual pollutant that has gotten recategorized over time that wasn't in that original Clean Air Act list. There's some flexibility there, but that's a little bit different than saying, "Oh, we actually have to set this standard for this time in this timeline."

All of that stuff is far more discretionary and there can be a legal challenge to whether or not it was under the congressional intent. I would say the one shift here, again, post Obama Clean Power Plan to this version of the rule is that there are some classifications that were included in the IRA that say we can include greenhouse gases in our estimation of pollutants. They don't quite classify them in the same way as they do with the noxious pollutants, which are again identified in that Clean Air Act statute, but it does give you, again, an added legal argument to make for keeping a rule online.

Julia Pyper: Super helpful context. Brandon, what's your read on, let's stick with power plants for a moment. The focus on coal plants and transitioning to cleaner energy has been core to our climate policy discussions for a long time. This power plant rule itself has been a core discussion. Have you had a look at the latest Biden proposal and what do you think?

Brandon Hurlbut: Yeah, none of this should be a surprise, Julia. This is what Joe Biden campaigned on, and all of these studies show that if we meet the Paris Agreement, we will save trillions of dollars in the global economy. Clean energy is cheaper, and there are lots of health benefits to these rules, both the tailpipe rule and the power plant rule. The tailpipe rule shows that we would save a hundred billion dollars per year, 13 billion in just healthcare costs. So these are sensible rules and going to get us to where we need to be sooner.

Julia Pyper: Well, let me ask you though on that front, my understanding is the tailpipe rule actually extends the timeline for automakers to adopt electric vehicles. So what does the climate world make of that? I mean, is that just realistic and there's an acceptance that that's what's necessary or is there a disappointment that it wasn't even more stringent?

Brandon Hurlbut: I think the EVs, it's 20% of the vehicles sold this year were electric across the world. These rules will help, but I think that what the Biden administration was trying to do was work with the manufacturers, the auto companies to see, "Okay, what can we that meets our climate agenda but also is realistic for you?"

Julia Pyper: And let's go back to you more so on the challenges that these rules would face. What are you hearing from the GOP and that side of the aisle?

Emily Domenech: I mean, I think you're going to see a pretty aggressive pushback, and I don't even need to start with Republicans because it got aggressive pushback from Joe Manchin. We're seeing it from moderate Democrats saying that we are politicizing essentially the safety and security of our grid by making promises we're not sure we can deliver on. And I think that is where we've seen this play before where we do a regulatory action that's designed to kick the pain out beyond the lifespan of the current administration.

We're looking at deadlines in 2032 and essentially in about that same timeframe, that eight to 10 year timeframe where we're going to take a massive amount of our electric grid offline because they won't be able to meet the standard in a cost-effective way, and we're going to drastically increase our electric needs by pushing the fleet towards EVs. You can make an argument on whether or not those are good goals, but we should be talking about our incremental progress in a way that we know we can achieve it as opposed to saying, "You know what, in 10 years somebody else is going to figure out this problem if we can't keep the lights on."

Brandon Hurlbut: We can keep the lights on with clean energy, Emily.

Emily Domenech: But I think we don't see the physics for that right now. We're going to increase our grid load to a drastic extent and maybe take a bunch of stuff offline. Now, I hope... I'm with you. I hope that we have carbon capture capabilities that keep most of our gas fleet online and we don't have this problem, but right now, natural gas is the thing that makes clean energy work, and if you take 90% of that fleet offline, we have a real problem. So we need to be thinking about how we do the innovation side of this as opposed to just the stick. We talk too much about the stick in my mind and a little too little about the carrot.

Julia Pyper: In my mind, this is the more of a stick approach, but it's to set the rules of the road that incentivize the investment, including from the private sector in large part into these decarbonization technologies is setting that marker, so we can get there, but we probably also need additional carrots on the other side to make sure it comes to fruition.

Emily Domenech: Well, and I'll push back on that too because I'll say the Clean Power Plan sit some pretty lofty goals and they had a whole system on cap and trade for how they were going to achieve it. We met those goals 10 years in advance of when they were supposed to be set because natural gas was more competitive on the market and it lowered our emissions by 25%. When the market drives that innovation, we often get better results in the long term. So my instinct is let's talk about how the market operates and figure out how to get these cleaner technologies to really truly be cheaper, and that has to include in my mind, carbon capture and nuclear, otherwise the whole grid starts to frankly fall apart.

Brandon Hurlbut: I don't think that's true. I mean, in the last decade it's been like 80% of all new generation has been renewables.

Emily Domenech: You're right. And all of that new generation is backed up by natural gas peaker plants that would all be taken offline by this rule. So that's why I say that innovation piece of it, to make compliance something that doesn't put the grid in jeopardy is really, really important, and it's part of why Republicans have a negative reaction to these rules that set a goal we don't know how to meet yet.

Brandon Hurlbut: Yeah, I mean we can replace those natural gas peakers with renewables and batteries, why not?

Julia Pyper: So building on that, in the past two decades, coal has fallen from providing roughly half of America's energy to about 16% today, and in fact, coal had a massive slump under the Trump presidency as well. So if coal's demise is inevitable, why is there so much opposition to the rules, Emily? Is it because it gets into the natural gas space in a more painful way, you think?

Emily Domenech: So I love this question because it offers an alternative, which is if coal's already dead, why do we need some huge sweeping regulation from the federal government because the market figured out this problem for us? I do think a lot of the opposition though is because it does extend to the natural gas fleet, which again has been the real driver of reducing our emissions over the last 10 to 15 years.

Brandon Hurlbut: But Emily, don't we have the technologies right now that are cheaper and cleaner to get us most of the way to a clean grid. I mean the last 10%, maybe 20% can be hard and people are working on that with long duration storage or bringing nuclear back, but we do have the technologies today and they are cheaper.

Emily Domenech: We certainly don't have batteries or any of the technologies we would need for carbon capture deployed at scale, at a commercial scale anywhere in the country. We have small scale projects that I think give us lots of potential to scale up in the long term, but we don't have them operating at major plants. We just don't. We don't have that capacity yet, but I do think we have to be realistic about what is available today and what is operating at scale in a way that is not putting exorbitant costs on consumers. So we want to figure out a way to bring the cost curve down on all of that stuff so that it makes sense in the market. That's my take.

Brandon Hurlbut: I think it's already happening. We have so many states operating at over 50% renewables and the lights aren't going out.

Emily Domenech: And they all have natural gas operating to back it up.

Julia Pyper: Before we get into some of the permitting stuff because you know we can't resist it, let me just put out here for the broader framing as well. We talked about the courts. What about the Trump administration? If there's a second term, what does that do to implementation of any of these rules on power plants, autos, permitting, SEC, et cetera? What happens here, Emily?

Emily Domenech: Yeah, I mean I think it's not a secret, and this isn't even limited to just Trump or energy policy. Republicans don't like mandate driven federal top-down approaches, and we consistently question the legality of these rules that go beyond the scope of what we think Congress intended. But I would say at the end of the day, we want to look at things that matter in terms of the big global emissions picture. Do we want to send our jobs to China or do we want to end up outsourcing all of our emissions somewhere else? So I think you're going to still see a conversation about how do we reduce emissions? How do we increase our clean energy to meet growing energy demand? It's just going to be done from a different perspective.

Julia Pyper: Just to be clear, some of these are proposed rules, some of these are final rules. Is that right? So they all have different timelines?

Emily Domenech: That's correct, and I would also say that even when a rule is finalized, there are still plenty of ways for an incoming administration to come in and redo it.

Julia Pyper: Well, that is a perfect transition to our next segment and digging into the permitting rule in a little more detail. So this is one of the several rules we're talking about here that the Biden administration put out. It's been a busy spring for them. This one actually passed last year as part of the national debt ceiling deal, and what it does is modify the National Environmental Policy Act, NEPA, by cutting the emissions process for clean energy projects from a current average of 4.5 years to two years maximum, and that would arguably go a long way towards reducing the insane 2.6 terawatt scale backlog that's currently in the queue. It's part of the reason we can't get projects online to decarbonize our grid faster to Brandon's point.

So critics have argued though that the revised version of the rule that the White House announced on April 30th actually complicates the process by adding extra layers of environmental review. Senator Joe Manchin, one of the opponents of the Biden administration rule, recently said that the administration had abandoned the intent of the bipartisan deal, the debt ceiling deal, saying that the administration was, quote, "corrupting it with their own radical agenda." So Biden can veto any attempts to repeal this regulation, so does Manchin's resistance actually have any teeth? Emily, what do you think?

Emily Domenech: Sure. So first I'd love to clarify. I think like what you said earlier, this is technically a response to the law that was passed in the debt ceiling deal, but there's a lot of reasons to question that. I think number one, we saw the first draft rule of the NEPA II Proposal came out within weeks of the debt ceiling law being signed by President Biden, making it pretty clear that they'd already been working on this approach long before the law was negotiated or even signed. And second, I think if they wanted to really be responsive to the law that we passed this bipartisan agreement, they could have written a rule that reflected what's in the statute, but instead, this 400 plus page proposal adds layer after layer of new requirements to the bipartisan reforms we passed.

And I would agree with Senator Manchin that it diverts from both the spirit and the letter of the law. But back to your question, I think that the opposition here really does have teeth and will get both legislative and legal action challenging it, not to mention that much like the Biden administration tossed the Trump rules that streamlined NEPA in 2020, the next administration could toss it and start over on day one.

Julia Pyper: Talk to us about what is departing from you think the intent of the debt ceiling deal. What does this rule do in substance that you think is getting the pushback?

Emily Domenech: We in our industry talk a lot about the energy impacts of NEPA, but NEPA applies to every project with a federal nexus, right? So it's broad impact on everything from highways to wetland recovery to wildfire management to energy projects. And while the rule includes some shortcuts that I think they can take advantage particularly for clean energy, like the use of what's called a categorical exclusion to apply an existing environmental rule to a different project that's similar in nature or scope, the new rule adds a bunch of things to make the process more cumbersome. So I'll give you an example. The statute, the new statute that we negotiated has timelines for both how long it can take a review to be completed and also restrictions on page limits and how many agencies can be involved and streamlining the process so there's a lead agency.

This rule gives opportunity to extend the timelines and extend the page limits, and add more agencies at every possible turn, even on things like these categorical exclusions, which I think will end up being used quite a bit for clean energy under this administration, the statute says use categorical exclusions to help speed projects. The rulemaking says, "We'll use them, but only if you've done an extra comment period, even though you already did a comment period on the first time around with the CE, let's do another one and let's do more engagement, and let's do more things that delay the process."

Julia Pyper: It isn't the whole goal to cut down that permitting timeline, isn't that?

Emily Domenech: Yes.

Julia Pyper: So you're saying the rule will not accomplish what it is intended to do?

Emily Domenech: Yes, that is absolutely what I think, and I think there has been this framing that it's going to be great for clean energy, but it's going to slow the process for everyone else. I actually am not even sure that's true from reading the rule myself, you can look through it and see there is opportunity for delays and additional requirements all the way through the rule, and I think that's bad, particularly for clean energy projects that aren't prepared to deal with the kind of litigation that often comes with these broader engagement strategies.

Julia Pyper: Brandon, permitting has been an area of common agreement. We want to speed up deployment, we want to speed up the permitting process in America. It is pretty insane just how bad that backlog is for a lot of clean energy projects. So what do you make of this approach from the Biden administration?

Brandon Hurlbut: Let's go back to what they're trying to do. We were talking about clean energy generation a few minutes ago. It is cheaper and healthier than operating fossil fuel plants. The issue is we have to get those clean electrons to where the people are, and this has been the big challenge, so that's what they're trying to solve for here. Number two, I think what they're trying to do is for these non-clean energy projects, they're trying to make sure that those could be possibly polluting communities or whatnot, big infrastructure projects, they want them to have a voice in that process. These are communities that have suffered first and worse, and I think that's okay. Now, these categorical exclusions that Emily talked about to get clean energy projects on the grid faster, I'm pretty excited about. One of them I want to talk about is reconductoring.

This is an exciting technology disruption that's happening. We basically have had the same technology on these wires that transmit these electrons for decades, but there has been a lot of innovation with composite materials, things like clean fiber that can get three, four times the amount of electricity out of the current system. So we're seeing a lot of innovation happening, and this categorical exclusion can help enable those technologies getting onto those poles because utilities aren't always incentivized for efficiency or innovation, so this is going to help get these new technologies out there that can use the existing system to generate even more clean electricity.

Emily Domenech: I could not agree with you more about a CE being a wonderful opportunity to get new technology out on the grid. The problem is, with this rule, there's all these layers of additional comment period, and it's going to really suck when you can't deploy that technology because you get sued by somebody who doesn't think you should be able to build new things, and unfortunately, this rulemaking doesn't do anything to help protect folks from the kinds of things that often delay projects.

Brandon Hurlbut: Emily, I think that's a fair point, and one of the things I can't stand is the bureaucratic soul sucking processes.

Emily Domenech: We agree on that a hundred percent.

Brandon Hurlbut: And one thing that they've done that I'm excited about that we used to discuss when I was at the Department of Energy and as part of this is the inter-agency processes where you have all of these agencies involved that can really slow things down. I witnessed that firsthand. And with Democrats, one of the challenges is they want to have consensus on everything, but what this rule does is it puts the DOE in charge of the inter-agency process. You have one agency that is wrangling all these other agencies and is in charge, and I think that's long overdue and I'm really glad that they did it.

Julia Pyper: I'm not sure America's going to get away from public input, right? It doesn't really matter what your politics are. People want public engagement.

Emily Domenech: I would say, I don't think anybody wants to get away from community engagement. In fact, it was one of the major pieces that I wanted to close out in statute that I negotiated with the White House and we just couldn't quite get there. The problem is if we're going to mandate an additional very specific type of community engagement, because frankly, most of these projects do community engagement on their own anyway because they want to be successful, but if we're going to have a federally mandated process that takes a lot of time, then there needs to be something on the backend that says, "Look, if you do all of this stuff and you participate with the community and you answer all of the comments and you do all the work, then you can't immediately get sued by those people who participated in that process who you spent months and months and months working with, and we just could not reach an agreement where we could make that trade.

I think Republicans are really, really ready to make a good solid statutory trade for judicial review limitations for really structured community engagement. I pitched it to Ali Zaidi myself over and over and over again and we just couldn't get there because there was too much concern about the litigation reform being something that Democrats couldn't take. I think that's, to me, the next big issue and the kind of thing that we'll have to solve before we do some of the transmission permitting that Brandon really wants to see happen, and this rule unfortunately poisoned the well in terms of the trust factor that the things we put in the statute are really going to get implemented. That's my big worry is that this rulemaking will make it less likely that we get the next big permitting deal.

Brandon Hurlbut: Emily, you're deeper on this than I am. Let me ask a question to clarify. My understanding is with these inputs that are required, at least that there is a timeline, these things can't go on forever. Is that true?

Emily Domenech: Sort of. So there's a statutory timeline that does exist of one year for a smaller review and two years for a larger review. However, the rulemaking gives a lot of deference to the lead agency for ways to extend that timeline, and I think that's where we're going to end up with project developers frankly, filing lawsuits against the federal government saying, "Hey, you're not meeting the statutory deadline." I would expect us to see, and we're about a year out from the debt limit deal, I would expect next year we start to see energy projects filing those lawsuits because they were given this right of action in the statute to say, "Hey, if you're not meeting your deadline, I get to file a lawsuit that makes you do it. I'm really curious to see how all of that litigation works out.

Julia Pyper: So to level set on timeline, this is a final rule. What happens from here, Emily, what do you foresee the next steps in the process being?

Emily Domenech: I can confirm this because I've had conversations with lawmakers about it. I think the first thing we'll see is a formal announcement that they're going to file what's called a Congressional Review Act action to pull back this rule. I expect that will be a bipartisan bicameral effort. I've heard it'll be led by Joe Manchin on the senate side and Garrett Graves who was the lead negotiator for house Republicans and is a long time NEPA expert that they'll be leading that CRA effort in Congress. I suspect that CRA, it could pass, but the president will veto it. That's I think the first step, and then I think we'll start to see, to our earlier conversation, we'll start to see project developers filing lawsuits to say that this rule is in compliance with the statute in ways when it slows them down. It's actually one of, I mentioned at the top of the show that I'm at this Clean Power Conference with a CP, and one of the number one things I'm hearing from renewable developers is concern about permitting.

Julia Pyper: What do you think the solution is then?

Emily Domenech: I think the solution is going back to the drawing board and trying to figure out ways to streamline the process both through the law and the rulemaking. There's more for us. I won't pretend at all that Congress has finished its job here. There's a lot more to be done in the statutory reforms, and I hope we're able to get to a point where we can come back to the table, but it's not good news for that when somebody like Garrett Graves who spent his whole career working on trying to get bipartisan NEPA reform done says, "Well, now I don't trust you guys because it feels like you're going back your word."

My initial reaction was like, how am I going to convince Republicans to come back to the table for another round of negotiations if it can just be backdoor undone through the regulatory process? I want to see those bipartisan discussions continue to happen, and frankly, I would say Senator Manchin leaving the Senate is going to be a huge loss to this effort, but there are people who care about it coming up in the ranks who have been talking about this issue more.

Julia Pyper: Brandon, let me ask you, I feel like the elephant in the room, and maybe I'm misreading this, but the legal contorting and provisions and caveats, and rules and all this stuff is really trying to get at a core issue, I think, of among Democrats of how do we speed up the clean energy projects they want to see, but not speed up the dirtier projects that they aren't as supportive of. And I think, aren't as supportive because I think there's a range of views on what to do with fossil fuel resources on the Democrat side. But is that the fundamental tension here and is that why they're contorting themselves to try to make these rules work? Maybe another way to put it is, do you think if it sped up clean energy projects, Democrats could live with speeding up fossil fuel projects as well, or do you think that's just a no go.

Brandon Hurlbut: That's a great question, Julia. Personally, when this has come up in the past where we've had to make trades on oil exports and whatnot for clean energy generation, I am always willing to make the trade if we have to because I believe that we will win, and I believe that these technologies will be deployed faster, and politically if we have to make that trade to enable them. I think ultimately we'll win out.

Emily Domenech: Yeah. And if Brandon and I could just negotiate this, we'd make a pipelines for transmission lines trade right now and we'd be ready to go.

Brandon Hurlbut: I'd love that.

Julia Pyper: Excellent. We'll look forward to the follow-up when you get that all linked. I think now's a great time to transition to our final segment of the show. Let's wrap up with The Markup. For anyone tuning in for the first time, at the end of each episode, Emily, Brandon and I each bring a story, anecdote or observation to discuss and debate. Let's see what we've got this time. Emily, we've been starting with you a lot, but let's continue with that trend over to you.

Emily Domenech: Okay, so for my markup, I have how it seems like everyone is a little unhappy with the Biden administration's proposed EV rules and how they impact our China supply chain discussion. When we looked at implementing the tax credits for EVs, we ended up being concerned that the requirements for getting China out of the supply chain would take a lot of people out of... They would be ineligible for the tax credit, and I think one of the things we've seen in the response to the rulemaking is that we have folks who are mad that it's not strong enough on China and folks who are mad that it's too strong on China and might keep too many EV producers out of the supply chain.

I'll note once again, Joe Manchin, the man who made the IRA possible is big mad about allowing China to stay in the supply chain for... They implemented what's essentially being phrased as a two-year delay on complying with some of these rules to get more of your raw materials from a non-Chinese source. My big question here is, with this two year delay, it's designed to let the automakers get more time to right shore their supply chain, but do we actually think we're going to see enough movement in two years to change this or are we just going to be looking the other way while we build an EV market that's powered by China?

Brandon Hurlbut: It is a hot topic, Emily. You've picked a good one. When I was at NREL, as I mentioned at the top, meeting with all these startups, many of them were taking some sort of feed stock, putting it in like a magic machine that they've built and outcomes' a rare earth mineral that we need for EVs, so this is coming. I'm seeing these amazing entrepreneurs are building this out. Can they do it in two years? I don't know. But China has a huge lead on us. They thought about this a long time ago. They really cornered the market on critical minerals and we're going to have to figure out how to mine this stuff here. We're going to have to figure out how to do it sustainably, and we're going to have to figure out how to support these entrepreneurs that have these amazing technologies where they can build these magic machines.

Julia Pyper: Yeah. I think it's interesting. China, in my understanding, has not really made money in a lot of these endeavors yet, right? They're viewing it as an industrial policy, it's an investment. I think it's going to be interesting for America, can we both accomplish our goals and prove that it's profitable and prove that there's an economy to be generated and technology to be exported. I think we only get there by getting into doing the hard work. So I think it's going to be interesting to see whether or not the rule is the driver here, that remains to be seen. All right, I'll jump in with mine. What I've got this week is a look at the Biden administration's revisiting of whether to declare a climate emergency in the US today. Bloomberg reported that White House officials have renewed discussions on potentially declaring this national climate emergency. It's really an unprecedented step that would unlock new federal powers to largely stifle oil development.

While they're re-exploring this under pressure from climate activists and youth voters, there's really some question around the merits of this move whether it would actually be effective, say curtailing crude exports. Also, there's, I think, precedent matters of whether this is a good move to do politically, frankly, and I think that's really what we're going to see play out here. From the right you see the commentary talking about the Biden administration appealing to its, quote, "extremist environmentalist donor base" that was in the National Review. On the flip side, you see youth climate activists saying, "Hey, our pressure's working." They're revisiting this concept. So we're seeing very different reactions to this. What the Biden administration ultimately does, I think is to be determined.

It's going to come down to, I think, whether they think they're going to lose more moderate voters by enacting something like a climate emergency and really declaring that they're going to curtail the fossil fuel industry further, or whether they really need to take that step to energize the youth base and get them to show up in November. I will note that President Biden says he's already practically speaking, declared a climate emergency because of other actions he's taken that includes a recent pause on liquid fired natural gas exports, but whether that's enough to get campaigners satisfied remains to be seen.

Emily Domenech: I think anyone who thinks that declaring a national climate emergency is going to somehow radically change all of our energy policies is probably reaching, and that I think it's unlikely that the Biden administration actually does it, but if they do, I suspect the activists who are pushing for it will end up being disappointed that it doesn't end up looking the way they imagine it will look because it's all in the eye of the beholder here. I would be shocked, in fact, when I was at San Francisco Climate Week with Brandon a couple of weeks ago, somebody proposed, "Well, why don't we have a national climate emergency that tells the Pentagon that they need to build new nuclear power plants in every state in the country?"

And I just laughed because the Pentagon doesn't have the expertise in any way, shape or form to build nuclear reactors all across the country. But those are the kind of ideas that people have in their head when they say a climate emergency, these kind of pie in the sky ideas. The federal government can come in and do whatever it needs to do to get the job done. It doesn't really work that way. The Pentagon's not great at building new weapons, much less building nuclear power plants. It's not going to work out that way.

Julia Pyper: All right, Brandon, you close this out here.

Brandon Hurlbut: Well, I just want to add on the climate emergency that one thing I like about Democrats is in my experience, we tend to come up with the substance, the right policy first and then think about the politics of it. So I think that there's going to be a lot of discussions around whether substantively it can do what we're trying to do. But what I like about Republicans is they often use every tool available to them to achieve what they're trying to do, and they don't care about the optics, and in this case, the president has the authority to do this. It is an emergency, and so why wouldn't we use every tool possible available to us to advance our agenda? Because in 10, 15 years, when we look back at this time frame, if we were not treating it like an emergency, it's really going to be embarrassing.

Julia Pyper: What will my son, Finn, say?

Brandon Hurlbut: Yeah, what will he say, right? Exactly. So for my markup, the article that caught my attention was an op-ed in the New York Times by Benji Backer, and the title was, "I'm a young conservative and I want my party to lead the fight against climate change." He says, "As a member of Gen Z, I believe it's time for my generation to mobilize around climate solutions that bring both sides to the table and demand our leaders to do the same." So Emily, this is pretty cool. What say you, how do we get more Benjis? How do we get more Republicans?

Julia Pyper: We should note he's been on the podcast and got quite a grilling from you, Brandon, at the time.

Brandon Hurlbut: That is true. That is true.

Emily Domenech: So I recently joined Benji's organization, ACC, as a member of their advisory board. I've worked with these guys for a long time. They're really passionate, they're excited, but they also frankly take a free market approach that's really similar to the approach that I take when it comes to climate. This is one of the things this movement, I think, we missed the mark on, because there's all kinds of opportunities for us to work together on things that fall in the middle of that Venn diagram where we agree on the problems. I think permitting is one of those areas.

But a lot of times we say, "Well, if you don't want to do it the way that I want to do it, if you don't want a national climate emergency, you're not serious about climate." And that's something that I think I reject, and I think these young voters who are part of ACCs really massive national network that they would reject too, that we can have a conservative market driven solution to climate that fits within the broader ideology of the Republican Party in a really, really good and reasonable way that might not look the way that a youth activist on the left thinks about what we should do on climate, but it doesn't mean we shouldn't be having these discussions and figuring out ways we can work together in the future.

Julia Pyper: I'll note that Benji has a new book out called The Conservative Environmentalist, and maybe that's a good prompt to have him back on the show if he'll join us so we can look at that. We'll leave the show there. For now though, Political Climate is a co-production of Latitude Media and Boundary Stone Partners. Max Savage-Levenson is our producer. Sean Marquand is our technical director. Steven Lacey is our executive editor. You can get all of our show notes and transcripts at latitudemedia.com, and if you want us to talk about a specific topic, please email us at politicalclimatepodcast@gmail.com. It's been great to see some pitches come in. We are getting to them. Thank you, thank you for reaching out. Please feel free to help spread the word about Political Climate on LinkedIn, X, Facebook and beyond. I'm Julia Pyper. We will catch you again in two weeks.

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