Much has been written about the tremendous work President-elect Joe Biden has in front of him to undo the detrimental climate and environmental policies left by the outgoing Trump Administration. The list of policies to reverse is long and includes the Trump Administration’s methane rule, coal ash regulations, and fuel efficiency standards, among many others. This does not include the proactive policies needed to increase US climate ambition and regain global climate leadership. And, of course, the United States will rejoin the Paris Agreement on the first day of Biden’s presidency.
But amidst the Trump Administration’s empty talk of “energy dominance,” “freedom gas,” and “the cleanest air, the cleanest water,” the Administration developed a number of good policies that align with President-elect Biden’s climate, energy security, and foreign policy objectives. (It is worth noting that several of these policies were implemented in spite of the broader goals of the Trump Administration, not because of them). While it can be tempting to negate a previous administration’s efforts, we argue that these policies should be continued or expanded in a Biden-Harris Administration. Indeed, if the Senate remains in Republican hands, which seems likely, these areas might be some of the best opportunities President-elect Biden has to advance his climate and energy goals.
Randolph Bell is the director of the Global Energy Center and Morningstar chair for global energy security at the Atlantic Council.
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Expand carbon capture, utilization, and storage (CCUS) legislation
President-elect Biden has already called out carbon capture as a necessary innovation to reach net-zero emissions while creating regional economic opportunities and jobs. Fortunately, during the Trump Administration, Congress laid the foundation for scaling this climate technology by passing the 45Q tax credit. 45Q is essentially an inverted price on carbon—it offers $50 per ton of CO2 stored—and was backed by a broad coalition of energy industry players, labor unions, and environmentalists. Still not fully implemented and scheduled to sunset in 2024, the credit has led to the planning of some thirty carbon capture projects, including novel applications like cement production and direct air capture. Additionally, the US Department of Energy (DOE) has also provided several hundred million dollars for Front-End Engineering Design studies and pilots for a variety of projects, carbon capture applications, and technologies, helping to address barriers to entry and shoulder upfront cost, while accelerating technology development.
The Biden-Harris Administration should build on this success to expand bipartisan cooperation on climate action. A 45Q extension and expansion could unlock permanent industrial sector transformation and pave the way for negative emissions. Investment in CO2 transport and storage infrastructure is essential to establish a carbon management market. Production tax credits for low-carbon hydrogen could harness carbon capture to kick-start the hydrogen economy. All of this, combined with DOE-backed demonstration projects in hard-to-abate sectors such as steel and cement could catalyze US clean manufacturing and innovation leadership. It will be close to impossible to reach climate goals without carbon capture. The next four years will therefore be critical to charting the course to net-zero emissions.
Lee Beck is a nonresident senior fellow at the Atlantic Council Global Energy Center and the Clean Air Task Force’s Director for CCUS Policy Innovation.
Ensure environmental standards in US procurement of critical minerals that are necessary for the energy transition
The energy transition requires a robust strategy to ensure a secure and sustainable supply of critical minerals. From electric vehicle batteries to solar photovoltaics, access to minerals such as lithium, cobalt, indium, and tellurium will be critical to a thriving renewable energy economy. However, significant projected demand for these minerals and a highly siloed, opaque mineral supply chain make these renewable energy targets vulnerable to supply interruptions and unsound environmental practices.
Two Trump executive orders, one in 2017 and a second this past September, established an interagency effort led by the Departments of Interior and Commerce which identified thirty-five minerals for which the United States is dangerously reliant on foreign sources and is currently examining options to reduce supply risks. The DOE has announced $20 million in funding for research and innovation on domestic rare earth recovery and recycling. The Energy Resource Governance Initiative established by the Department of State has begun to build a coalition of countries committed to the transparent and sustainable development of mineral resources abroad.
The Biden-Harris Administration should build on this momentum and expand upon these initiatives by ensuring that mineral security and best-in-class environmental practices for mineral development underpin its net-zero plans. The new administration can use its planned re-engagement on international climate action to help strengthen efforts with allies and partners to ensure secure and sustainable mineral supply chains as they develop around the world, and leverage growing bipartisan interest in mineral access to its advantage.
Reed Blakemore is the deputy director at the Atlantic Council Global Energy Center.
Support FERC rulings to modernize the grid and distributed energy
One of the most effective energy policy changes of the Trump Administration came near its end. On September 17, 2020, the Federal Energy Regulatory Commission (FERC) approved Order 2222, enabling aggregated distributed energy resources (DERs) to participate in regional electricity markets.
DERs—such as rooftop solar units, residential batteries, and EV chargers—are small-scale generation or storage that typically operate at distribution level or behind the customer meter. Two-way metering allows consumers to sell electricity back to the grid, and these technologies have enabled a massive rise in so-called “prosumers.” When DERs are bundled together by aggregators, they can also compete in wholesale markets alongside utility-scale power plants. FERC Order 2222 opens up wholesale markets to any aggregated DERs, enabling them to act as virtual power plants and participate in demand management programs while potentially improving grid reliability.
The impacts of such an apparently technical change are potentially enormous. Modern grids must introduce flexibility to incorporate growing shares of variable renewable energy, and renewable DERs can offer more of that at lower emissions than marginal power plants. Perhaps more significantly, this new FERC order puts DERs at the center of a future energy system, and paves the way for a highly digitized, dynamic, and resilient electricity grid that leverages the hundreds of gigawatts of DERs expected on the market by 2025. Leading the way on democratized energy networks is also good foreign policy, as described here. FERC Order 2222 is a win for renewable energy, grid modernization, and consumers; however, the devil is in the complex details of implementation, and a Democrat-led FERC should not shy away from interpreting and expanding the rule such that it furthers ambitious zero-carbon grid targets.
Phil Cornell is a nonresident senior fellow at the Atlantic Council Global Energy Center.
Finalize FERC’s recent policy statement on carbon pricing
Recently, FERC issued a proposed policy statement that determined proposals for carbon pricing in wholesale energy markets brought forward by regional transmission organizations or independent system operators fall within the Commission’s jurisdiction. The bipartisan statement is the first of its kind by FERC and reflects the emergence of carbon pricing as an effective tool for greenhouse gas emissions reduction in the electricity sector.
If finalized, the rule would encourage grid operators to adopt a carbon price through mechanisms such as a carbon emission adder, which, by placing a penalty on carbon fuel price bids in the bidding process for the lowest clearing price, gives a competitive advantage to zero- or low-emission sources. This could enhance existing pricing efforts, such as the development of a carbon pricing system by the New York Independent System Operator, as well as encourage additional development and participation. The integration of carbon pricing into wholesale energy markets provides a market-based, transparent approach to emissions reduction. In the Biden-Harris Administration, FERC should finalize this policy and, furthermore, encourage independent system operators to explore and implement such pricing regimes.
Former FERC chairman Neil Chatterjee was demoted by the Trump Administration on November 5, 2020 in part, because of these two policies.
George Frampton is the senior fellow for the Transatlantic Climate Policy Program at the Atlantic Council Global Energy Center.
Kelsey Forren is an assistant director at the Atlantic Council Global Energy Center.
Support nuclear innovation and a strong US civil nuclear export program
The Trump Administration has provided nearly unprecedented support in recent decades to the nuclear energy industry, in recognition of a robust civil nuclear export program as a national security priority. Perhaps most notably, the last two years have seen the reauthorization of the US Export-Import Bank and the lifting of the nuclear finance ban at the US International Development Finance Corporation. Nuclear energy innovation has also received support—to the tune of $160 million in initial funding—from the DOE’s Advanced Reactor Demonstration Program, which aims to demonstrate selected advanced reactor designs in the second half of this decade, with the goal of commercialization in the 2030s. Moreover, legislation aimed at streamlining regulation and encouraging innovation has passed through Congress in recent years and been signed into law with significant bipartisan support. The Trump Administration has taken the right steps on nuclear energy policy, but DOE has had to walk a fine line between championing nuclear energy as a source of low-carbon power and the official climate-denial stance of the White House.
The incoming Biden-Harris Administration should expand upon Trump-era successes in nuclear energy policy, primarily by highlighting the role of nuclear energy in global decarbonization. In addition to bolstering the domestic nuclear reactor fleet—which provides about 20 percent of US electricity and more than half of low-carbon power—and continuing the Trump Administration’s efforts to fund nuclear innovation, the Biden-Harris Administration should proactively seek civil nuclear agreements with countries that wish to acquire nuclear energy technologies. Not only will this approach establish century-long diplomatic relationships between the United States and countries that might otherwise purchase nuclear energy from Russia or China, but it will also ensure that more countries are able to decarbonize their power sectors.
Dr. Jennifer T. Gordon is the managing editor and senior fellow for nuclear energy at the Atlantic Council Global Energy Center.
Increase US economic investment in the Indo-Pacific, especially energy infrastructure
The Trump Administration’s National Security Strategy called for more robust economic measures to compete with China’s growing influence through its Belt and Road Initiative, through which Chinese policy banks have emerged as forerunners in overseas energy finance. The whole-of-government program Asia Enhancing Development through Energy (Asia EDGE) and the passing of the Better Utilization of Investments Leading to Development (BUILD) Act with bipartisan support were both important steps to improving US economic leverage in the Indo-Pacific. Further, the administration pursued bilateral and multilateral cooperation with allies in the region—specifically, Australia and Japan—to streamline overseas development finance. However, Asia EDGE made little progress generating new projects in the Indo-Pacific and the newly formed US International Development Finance Corporation, while boasting double the former Overseas Private Investment Corporation budget, has a diminutive $60 billion spending cap.
The need for overseas investment in Asia’s power sector is clear: the region requires $14.7 billion between 2016 and 2030 to keep up with economic growth trends and to provide sufficient climate mitigation and adaptation measures. Initiatives such as Asia EDGE and bilateral Strategic Energy Partnerships are crucial to strengthening relationships in the Indo-Pacific region and providing market opportunities for US companies, yet they remain at a nascent stage. The Biden-Harris Administration should improve upon these initiatives and transform them from a somewhat hollow branding effort into action-oriented platforms.
Margaret Jackson is the deputy director for climate and advanced energy at the Atlantic Council Global Energy Center.
Enhance transatlantic cooperation on energy investments, tech innovation, and coal-to-gas switching
Efforts to bolster European energy security have garnered bipartisan support in the United States for decades. The Trump Administration supported European energy diversification through engagement in the Three Seas Initiative (3SI), which invests in infrastructure projects throughout twelve European Union (EU) member states in Central and Eastern Europe. Under the Trump Administration, DOE launched the Partnership for Transatlantic Energy Cooperation (P-TEC), which supports the development of cyber security, infrastructure, and clean energy technologies in Central and Eastern Europe and complements 3SI’s mission to improve energy, transportation, and digital connectivity in the region.
The Biden-Harris Administration should continue these efforts in coordination with Brussels and all relevant member states, and it should enhance this support with a new focus on closer US-EU cooperation and coordinated efforts on carbon emissions reduction. This coordination can happen through the US-EU Energy Council, which was downplayed during the Trump Administration.
Natural gas will continue to play a key role in the European energy mix and can contribute to helping the EU meet its climate targets. The Biden-Harris Administration can embrace the United States’ role as a reliable supplier of liquefied natural gas to European consumers, while at the same time working with the EU to reduce greenhouse gas emissions associated with the production, transportation, and use of natural gas through methane emissions reductions; deployment of blue hydrogen technologies; and carbon capture, utilization, and storage. Complementary to supply security, the United States should continue its support for competitive and transparent energy markets through regulatory implementation across European energy markets and technical training and capacity building in Southeast, Central, and Eastern Europe.
Strengthened and expanded cooperation will enhance current transatlantic work on research, development, and deployment of innovative energy technologies. These efforts should be led by a reinvigorated US-EU Energy Council. Coordinated US-EU support for new clean tech deployment can also expedite the economic recovery from the COVID-19 pandemic on both sides of the Atlantic and contribute to greenhouse gas emissions reduction. The Biden-Harris Administration will also be well-positioned to expand existing US-EU collaboration on scaling up new battery technologies, wind energy, grid resilience, and cyber security technologies.
Ambassador Richard Morningstar is the founding chairman of the Atlantic Council Global Energy Center.
Olga Khakova is the associate director for European energy security at the Atlantic Council Global Energy Center.
Support DOE efforts to invest in geothermal energy
Over the past four years, the Department of Energy (DOE) quietly advocated for US geothermal energy development. In 2019, the DOE Geothermal Technologies Office published an in-depth report that details the vast untapped potential for geothermal resources in the United States and outlines a constellation of policies necessary to improve access to unexploited reservoirs, reduce project costs, and raise public awareness. Additionally, under Assistant Secretary Simmons’ direction, the DOE has supported a number of geothermal programs and projects, notably the Frontier Observatory for Research in Geothermal Energy (FORGE), an Obama-era initiative with the goal of establishing a central lab for enhanced geothermal systems research and development.
As the need for clean baseload energy grows and state and local governments push to meet renewable energy goals, the Biden-Harris Administration—in collaboration with states and private industry—must take the baton and invest human, policy, and financial capital to expand and scale geothermal energy across the United States. Specifically, oil and gas companies can leverage their technical expertise and financial resources to play a role in developing the geothermal industry in the United States, thereby providing employment opportunities for segments of the oil and gas workforce as the world transitions away from carbon-intensive fuels. The DOE estimates that geothermal heat could generate nearly 10 percent of total national electricity by 2050 and further cut emissions and fossil fuel use in heating and cooling.
Zachary Strauss is an assistant director at the Atlantic Council Global Energy Center.
Increase the scale of hydrogen investments and deployment
Clean hydrogen can help to decarbonize the hard-to-abate sectors of transportation, heavy industry, and buildings that President-elect Biden has prioritized, which together account for 62 percent of US annual emissions. These are sectors that electrification cannot address at scale (excepting light-duty vehicles), and that hydrogen is well-suited to decarbonize because of its high energy density and compatibility with natural gas infrastructure. Over the past four years, the Trump Administration’s DOE has built new programs and partnerships in hydrogen and fuel cell technologies, despite repeated attempts in DOE budget requests to slash funding throughout the Energy Efficiency and Renewable Energy Office, which Congress has rebuffed. The incoming Biden-Harris Administration should use these efforts as the foundation for a much more robust hydrogen policy framework.
Trump Administration highlights include: “[email protected],” a vision of broad hydrogen adoption to enhance resilience; two consortia led by the National Renewable Energy Laboratory with $100 million in funding over five years; and a new research partnership with the Netherlands. Each of these projects—and the broader progress made by DOE—has advanced hydrogen technology development.
But these programs are far from sufficient to establish a hydrogen economy in the United States; in contrast, the EU has planned to spend hundreds of billions of euros by 2050 on hydrogen production capacity and deployment. It is a welcome sign that President-elect Biden has named renewable hydrogen as an innovation priority in his transition website’s climate change plan. The Biden-Harris Administration should dedicate more funding, not only to hydrogen technology innovation—which is certainly essential—but also to demonstration and deployment in order to spur decarbonization in the shorter term and keep up with progress abroad.
David Yellen is a program assistant at the Atlantic Council Global Energy Center.
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