Climate groups claim infrastructure bill’s green energy spend is a gift to oil companies

Leslie Kaufman August 09, 2021

(Bloomberg) --When negotiators released the more-than-2,700-page text of the infrastructure bill now inching its way forward in the Senate this week, they discussed it as a glass half full — the first, imperfect step toward greening U.S. energy and industry.

To many looking at it from outside the government, however, what’s in that glass has been polluted.

Many of the bill’s provisions are on the oil industry’s wish list. The proposed legislation has more than $10 billion for carbon capture, transport and storage, along with $8 billion for hydrogen — with no stipulation that the energy used to produce it comes from clean sources. A new liquid natural gas plant in Alaska won billions in loan guarantees, while other waivers in the bill will weaken environmental reviews of new construction projects, climate groups say.

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

The bill does address some major climate change priorities, with $7.5 billion for a network of electric-vehicle chargers, $21.5 billion to create an Office of Clean Energy Demonstrations and $16 billion for energy efficiency and renewable energy. There’s money for resiliency projects and combating wildfires. But that has done nothing to reassure the environmental lobby’s most progressive wing, which has grown increasingly concerned that the oil industry is co-opting the administration’s agenda.

Much of that anxiety has coalesced around support for carbon capture. Last month, hundreds of climate groups wrote an open letter calling on Biden to reject carbon capture as a “dangerous distraction” to eliminating fossil fuels entirely. While the scientific consensus holds that carbon capture will be crucial to slowing atmospheric warming, many environmentalists fear it will also prolong the life of the fossil fuel industry, particularly in the U.S.

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

Frank Macchiarola, a senior vice president with the American Petroleum Institute, which represents oil and natural gas interests, disagreed. He said in a statement that the group supports “the development of innovative technologies, like carbon capture and hydrogen, that will help achieve climate progress.”

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

Deich understands the skepticism from climate groups, but doesn’t think the technology needs to enable 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 be a really good foundation for cleaning up heavy industry,” he said.

It’s not just carbon capture that irks the infrastructure bill’s critics. While there’s $5 billion to fund the purchase of clean-running school buses, half of that can be used for vehicles powered by cleaner-burning fossil fuels; those might be better for the environment than diesel, but not as clean as electric buses with no carbon emissions. Even the funding for EV charging infrastructure includes $2.5 billion of that could go to support vehicles that burn natural gas and propane, both of which burn more cleanly than gasoline, but which still contribute to global warming.

“When you look at the energy provisions in this bill, they are they are a boon to the fossil fuel industry and a dismal failure from the perspective of the climate,” said Carroll Muffett, chief executive officer of the Center for International Environmental Law, a non-profit firm with offices in Washington. The group is still working on a full accounting, but Muffett estimates that 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 office promising a sweeping infrastructure bill that would create more environmentally friendly economy and power system while providing jobs. But it’s been a tough to get that agenda by a Senate that’s divided evenly between Democrats and Republicans. The bill could also face an uphill battle in the Democratic-controlled House of Representatives, where key players such as Transportation Committee Chair Peter DeFazio have already said it falls short on addressing the climate crisis.

Senate Democrats and the Biden administration have dealt with the discontent by saying they will use a separate budget bill that will require only 50 votes to enact more sweeping measures.

“While the bipartisan infrastructure package does not address the climate crisis at the scale and scope we need, I believe we will have an historic opportunity to meet this moment through the budget reconciliation process,” said Senator Ed Markey, a Democrat known as a climate progressive 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 ballot box.”

John Noel, a senior climate campaigner for Greenpeace, said the infrastructure bill’s shortfalls will spur advocates to focus on the companion measure.

“The reconciliation package needs to be the place where we challenge the power of the fossil fuel industry and all fossil fuel subsidies and, like, kick the industry into a managed decline,” he said. “The outrage at this bipartisan bill is our leverage to make it happen.”

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