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CERAWeek: Building resilience into energy systems to be focus for US lawmakers

05 March 2021 Amena Saiyid

US lawmakers plan to focus on securing critical minerals to build lithium-ion batteries for storage and electric vehicles and on girding the nation's energy infrastructure against climate-fueled weather events, such as the sub-zero conditions Texas experienced in February or the summer 2020 wildfires that wreaked havoc in California.

"Resiliency" will be the heart of any actions going forward in implementing the climate action plan the US House of Representatives Select Committee on the Climate Crisis released in June 2020, Representative Kathy Castor, Democrat-Florida, who chairs the committee, said during a 5 March CERAWeek by IHS Markit panel discussion.

Castor told IHS Markit Vice President, Global Energy, Carlos Pascual she had found a willing partner in the Biden administration to address the climate crisis.

President Joe Biden's all-of-government approach, which was enshrined in a 27 January order, "mirrors many of our [climate] policy recommendations from last summer," she said.

Biden aims to have a carbon-free power sector by 2035 and a net-zero carbon economy by 2050, a goal aligned with the 2015 Paris Agreement to limit global warming below 2 degrees Celsius.

However, Republican lawmakers including US Senators Lisa Murkowski of Alaska, and John Cornyn of Texas, did not appear to be on board with all of Biden's climate policies.

In a chat with IHS Markit Vice Chairman Daniel Yergin the same day as Castor spoke, both Murkowski and Cornyn saw the Biden administration's focus on clean energy technology and a carbon-free power sector at the expense of impacts on their states as an attack on the US fossil fuel industry, and an incursion on state rights.

Murkowski in particular saw Biden's executive order pausing oil and natural gas leasing on federal lands as a direct hit on Alaska.

She said the Biden administration's focus on creating clean energy manufacturing jobs overlooks the fact that states like Alaska produce the resources that enable the manufacturing.

"In order for those manufacturing states to have something to manufacture … you have to have basic resources, which is what a state like Alaska provides," she said.

Senator Joe Manchin, Democrat-West Virginia, who took over the gavel of the US Senate Energy and Natural Resources from Murkowski in January, though supportive of Biden's clean energy policies, expressed concerns to conference attendees about the adverse impact on the coal mining communities of the state he represents.

Manchin, who had a separate conversation with Yergin 5 March, said the coal miners of his state feel like Vietnam Veterans who are finding themselves reviled for no fault of their own.

They provided the coal to allow the US to have affordable energy, but now they are "not clean enough, not green enough."

All the lawmakers, however, agreed on the need to make investments in clean energy technology, secure supply chains for critical minerals, and resiliency. Cornyn, though acknowledging that energy and climate was on his mind, said those who have made science into an ideology, or religion, made moving forward a challenge.

Moving forward, Castor said: "We have to make investments in clean energy technology and resiliency" as part of the Build-Back-Better legislative package, which is in the works as US Congress is holding hearings.

Castor and Manchin both agreed on the need to secure the supply chains for critical minerals, protecting critical energy and water systems against cyber hacking, providing environmental justice to low-income and minority communities unduly burdened by pollution, and securing help for communities that either relied on coal generation or mined this fossil fuel for revenue.

Securing mineral supply chains

Murkowski noted that the US is no longer dependent on foreign sources of oil.

"We are moving from a liquid dependency on oil to a solid dependency on minerals. Anyway you cut it, we don't want to have that vulnerability," said Murkowksi, who as chair of the Energy and Natural Resources Committee during the 116th Congress, which concluded at the end of 2020, shepherded comprehensive reforms to the nation's energy policy.

Manchin told IHS Markit's Yergin that the US can produce its own critical minerals instead of relying on countries that employ child labor to move as much as 500 pounds of dirt to build one car battery.

"Right now, we are totally dependent on China for these rare materials for things that we use every day," he said.

Manchin told Yergin the US will have to open new mines and update permitting regulations for hardrock mining that have not changed since the late 1800s.

If the US is serious about transitioning to a low-carbon economy that requires energy storage and electric vehicles then "we better be ready to produce the products for it and not depend on the rest of the world to give it to us," he said.

Energy diversity 'the right way'

Manchin also put in a plug for carbon capture and sequestration and utilization, saying it was necessary. However, he acknowledged that the technology is still extremely expensive.

Cornyn said energy diversity is "the right way to go," and not efforts to restrict the baseload generation that keeps the economy going. He cited Texas as an example where wind turbines froze, solar panels got covered in ice, and natural gas compressors couldn't work.

During her talk with IHS Markit's Pascual, Castor emphasized the need to avoid what happened in Texas.

One of the problems in Texas was that it is not connected to the rest of the US grid. "That is not going to carry the day in climate-fueled disasters," Castor said.

During CERAWeek discussions earlier in the week, newly confirmed US Secretary of Energy Jennifer Granholm, Federal Energy Regulatory Commission (FERC) Chairman Richard Glick, and numerous industry experts discussed and analyzed what went wrong in Texas.

'Not a one off'

"That's not a one off," Granholm told Yergin during her 3 March talk with the Pulitzer Prize-winning author and historian.

"There will be more events that occur like this, with even more frequency," she said.

Granholm said she hopes Texas will take its cue from FERC's 2011 report that said the state's electrical grid needs to be weatherized. She said she understands the ethos of going it alone, but added "there's also the ethos of helping your neighbor," alluding to the state's decision to operate a stand-alone grid that found itself without backup supplies.

Glick said the 2011 report recommended that generating facilities needed to weatherize to address extreme cold weather situations, but somehow those recommendations turned into guidance, and "unfortunately nothing happened."

Glick said FERC has an investigation underway and a report will be issued at the end of summer. "And if that report recommends action, we will take action," he warned.

Posted 05 March 2021 by Amena Saiyid, Senior Climate & Energy Research Analyst, IHS Markit

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