Recent reports indicate that Sen. Joe Manchin, D-W.Va., is blocking some measures to restrict fossil fuel development in the Build Back Better bill under consideration in the Senate, but he appears to be accepting other measures that would reduce de facto subsidies to oil and gas drilling operations.
Democratic senators appear increasingly unable to unite behind the massive spending bill before the holiday recess, by which time they had hoped the legislation would already be signed into law.
Manchin, the key centrist senator from a state that relies on the coal and gas industry, has rejected a provision in the version of the bill passed by the House of Representatives that would ban offshore oil drilling near the East and West Coast, as well as in the eastern Gulf of Mexico, according to the Washington Post on Thursday, which cited three anonymous sources. (Manchin’s office did not respond to a request for comment from Yahoo News.)
During a press conference on Thursday afternoon, deputy White House national climate adviser Ali Zaidi avoided directly responding to a question about Manchin's opposition to the offshore drilling ban and how significant a loss it would be if the proposal was cut from the bill.
"Let me talk a little about what we've been doing," Zaidi said, before going on to list measures President Biden has taken thus far to protect ecologically sensitive areas from fossil fuel development, including restoring protections to Bears Ears and Grand Staircase-Escalante national monuments that were removed under former President Donald Trump.
"We've had incredibly productive dialogues, in the context of this bill and others, on how we take on the climate crisis in a way that marshals the power of nature-based solutions," he added. "So we're excited about that work and we're moving forward."
On the other hand, Politico reported late Thursday afternoon that Manchin supports reforms to the oil and gas leasing program on federal land that were included in the House-passed version of Build Back Better. Politico reporter Joshua Siegel, who broke the news, described it as “a mild surprise.”
The current program, according to a recently released Department of Interior report, subsidizes oil and gas producers by charging below-market rates for royalties, land rental and minimum auction bids. It also does not charge a premium for the costs of pollution caused by fossil fuel extraction and consumption that are borne by society, including conventional air and water pollution and the exacerbation of the effects of climate change.
The Senate Committee on Energy and Natural Resources, which Manchin chairs, is drafting its own text, which would raise the top royalty rate from 12.5 percent to 16.75 percent. The new, higher royalty rate, would be comparable to the rates charged by most states for drilling on state land. Offshore royalties would rise from 12.5 percent to 14 percent.
That news generated unusual praise for Manchin from some environmentalists. “While we’ll have to wait for final language to know for sure, it looks like Senator Manchin is on the right track when it comes to reforming the oil and gas leasing system,” Jesse Prentice-Dunn, director of the Center for Western Priorities policy, said in a statement. “For a century, oil companies have ripped off taxpayers. Raising royalty rates would be a big step toward making sure the American people get a fair return from publicly owned resources.”
Politico also reported on Thursday that Senate Democrats, led by Tom Carper of Delaware, who chairs the Senate Environment and Public Works Committee, have been working on negotiating compromises with Manchin to keep a fee for methane emissions in oil and gas drilling operations. Methane is a very powerful, short-term greenhouse gas, meaning that its emissions are especially bad for climate change. The House bill contains a fee for excessive leakage of methane in oil and gas wells. To assuage Manchin’s concerns, the Senate is considering lengthening the phase-in period, focusing penalties on wells that aren’t in compliance with EPA methane rules, and increasing $775 million in the House bill for subsidies that would assist well operators in adopting technology to stop methane leaks. It remains unclear, nonetheless, whether Manchin will ultimately support the methane fee if it incorporates all of those changes.
The environmental activist organization Friends of the Earth slammed Manchin for insisting on allowing offshore drilling and wavering on the methane fee. "If Manchin really cared about taxpayers, he would put our interests first, instead of borrowing industry talking points for his grandstanding,” Nicole Ghio, the group’s senior fossil fuels program manager, told Yahoo News in an email. “The commonsense leasing reforms in Build Back Better are the bare minimum to limit some of the ways Big Oil rips off taxpayers. And we desperately need methane reforms to shift the burden to the polluters.”
The reports in Politico and the Post diverge on one crucial point: The Post reported that Manchin also “expressed surprise” at the bill’s ban on drilling in Alaska’s Arctic National Wildlife Refuge, but has not taken a position on it, while Politico reported that Manchin’s draft language includes the ban.
Federal fossil fuel leasing policy has emerged as a key battlefront in the war on climate change. In 2019, more than 23 percent of U.S. oil production and more than 11 percent of gas production came from federal lands and waters. During his 2020 campaign, President Biden promised to end federal fossil fuel leasing, and he has paused leasing while reviewing the program. Congressional Republicans are uniformly in favor of continued fossil fuel extraction, which also sometimes wins the support of Democrats from states with large fossil fuel reserves. Republican-controlled states with fossil fuel reserves have also successfully sued the Biden administration to force it to complete previously scheduled offshore oil drilling lease auctions. Meanwhile, environmental activists allege that the administration isn’t pursuing every legal option it has to slow down and stop fossil fuel extraction offshore and on federal land.
Build Back Better is the core policy vehicle for the Biden administration’s agenda to fulfill its pledge to cut U.S. greenhouse gas emissions by half by 2030. Throughout the recent two-week United Nations Climate Change Conference in Glasgow, Scotland, White House officials and congressional Democrats touted the bill as if it had already passed.
But, in Washington, D.C. Manchin — who holds an effective veto over the legislation because the Senate is evenly split between the two parties — has forced a number of major concessions that weaken its climate change-combating provisions, such as removing a program that would have incentivized energy utilities to transition to clean energy sources.