After years of tension, oil and clean energy find common ground in Washington

WASHINGTON — Since their emergence more than a decade ago, wind and solar energy developers have often acted at odds with oil and gas lobbyists here, as the two sides vied for tax credits and the research funding seen as key to determining the future of the energy sector.

But show up at a congressional hearing in 2022, and it’s not uncommon to see rival sectors championing the same policies, whether it’s accelerating the federal government’s years process to enable new infrastructure or in development a domestic hydrogen industry – with oil companies supplying natural gas, and wind and solar companies supplying electricity.

There are still a lot of things both sides disagree on. But as the wind and solar energy industries seek to expand rapidly in the decades to come to help achieve national climate goals and oil companies trying to reduce their carbon footprintthey find themselves increasingly on the same side of the political debates in Washington.

“The challenges these industries are currently facing are very similar to their peers on the other side,” said Steve Everley, managing director of consultancy FTI, which represents clients in both industries. “Renewable energy developers increasingly have to deal with land use conflicts, permitting issues, regulatory hurdles, just as oil companies have done for decades. We have a lot of things in common.

At the top of the list currently is the National Environmental Policy Act – better known as NEPA – a policy from the 1970s designed to ensure that infrastructure projects such as bridges, power lines and roads do not damage wilderness or areas of cultural or historical significance. With each passing decade, the standards have become stricter, to the point that a NEPA review spans almost 5 years on average.

The Trump administration ordered that the period be reduced to two yearsdrawing fire from environmental groups who argued there was not enough time to consider the implications of pipeline, transmission and other infrastructure projects that often stretch hundreds of miles.

When President Joe Biden took office last year, he promised to reverse the policy. He has already rolled back some Trump-era provisions, while his administration works on a broader NEPA review. But over the past 18 months, a coalition of interests ranging from farmers and manufacturers to railroads and oil companiesas well as members of his own party, have urged him not to reject Trump’s reforms entirely, arguing that if the nation is to achieve its clean energy goal, the administration must accelerate infrastructure clearance.

Joining them are wind and solar developers represented by the American Clean Power trade group, led by Heather Zichal, who served as the president’s deputy assistant for energy and climate change during the Obama administration.

“If you really want to meet clean energy goals and you need about two to three times the amount of transmission we have now by 2050, NEPA reviews may set back those goals.” , said Gene Grace, general counsel at American Clean Power. . “Our members don’t mind going through NEPA’s rigorous review. It’s the excessive time it takes that can kill projects that arrive on time.

Terrific industry

Over the past decade, wind and solar have grown into formidable industries, along with renewables representing more than 20% of the electricity produced last yearaccording to the Department of Energy.

But to keep growing, they need transmission lines, and lots of them. A 2020 Princeton University study predicted that the United States is expected to increase its electricity transmission network by 60% by 2030 and potentially by 300% by 2050.

This need has created common ground with the industry as a whole, especially oil and gas companies, who have long lobbied the federal government to relax regulations impeding the construction of oil and gas pipelines. , which have been regularly blocked by Democratic states along the Eastern Seaboard.

“What Biden is hearing more and more is that (Trump’s changes to the NEPA policy) have done a lot for us and are not going back to the 1970s,” said House Deputy Speaker Chad Whiteman. of Commerce Global Energy Institute. “NEPA impacts everything from forest management to oil and gas, to highways, broadband, bridges and ports.”

As the wind and solar energy industries grow, they also find their businesses more closely tied to oil and gas. In Texas, oil and gas companies are partnering with clean energy developers on a host of projects aimed at reducing emissions.

Along the Gulf Coast, oil companies are looking to develop a low-carbon hydrogen industry to tankers and other heavy industriesrequiring large amounts of renewable energy to control their carbon footprint.

In West Texas’ Permian Basin oilfield, where high electricity prices have become commonplace in recent years, oil and gas producers, including Exxon Mobil and Western Oil, are building solar farms and signing electricity deals with wind developers to both lock in electricity prices and reduce their carbon footprint.

“We want to be the power supplier to the oil and gas industry,” said Jeff Clark, president of the Austin-based Advanced Power Alliance, which represents wind and solar developers. “Anything we can do to reduce costs will be good for all of our industries.”

Yet even when both parties are generally in agreement, the relationship is not entirely harmonious.

How many?

In the debate around NEPA, the oil and clean energy sectors want accelerated approvals. But they disagree on the extent to which Trump’s policy should stand.

Asked why American Clean Power and other clean energy groups were not part of the Chamber of Commerce Infrastructure Coalition, Whiteman attributed it to “tension with environmental groups.” These groups are an important part of the Democratic base, which has insisted that Trump’s NEPA reforms be rolled back entirely.

And in Texas last year, legislation that would have changed state regulations to speed up power line construction — something Texas Industries supported — never passed in the state Senate at following complaints from some oil and gas companies that the policy favors the wind. and solar farms, Clark said.

“A few of them still think it’s beneficial to shut down renewables,” he said. “But the smart ones don’t.”

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