Democrats got a climate bill, Manchin got drilling

WASHINGTON – In a twist of fate, Congress is suddenly poised to pass the most ambitious climate bill in U.S. history, largely written by a senator from a coal state who became a millionaire from his family coal business and who has taken more campaign cash from the oil and gas industry than any of his colleagues have.

That senator, Joe Manchin, D-W.Va., managed to win several major concessions for the fossil fuel industry in the $369 billion climate and energy package, which was made public on Wednesday by Senate Democrats. Manchin’s vote is critical in the evenly divided chamber because no Republicans support the bill.

The measure requires the federal government to auction off more public lands and waters for oil drilling. It expands tax credits for carbon capture technology that could allow coal or gas-burning power plants to keep operating with lower emissions. Manchin also secured a promise from Democratic leaders to vote on a separate measure to speed up the process of issuing permits for energy infrastructure, potentially smoothing the way for projects like a natural gas pipeline in West Virginia.

Yet most environmental groups and Democrats were jubilant about the final bill, which would also pump hundreds of billions of dollars into low-carbon energy technologies – like wind turbines, solar panels and electric vehicles – and would put the United States on track to slash its greenhouse gas emissions to roughly 40% below 2005 levels by 2030.

“We just made a deal with Joe Manchin,” said Sen. Brian Schatz, D-Hawaii, who had pushed for more expansive climate provisions. “I don’t think anybody should have expected that this is the bill I would have written.” But even with the fossil fuel provisions, he said, the measure is “the most significant move in the right direction that the United States has ever taken.”

The legislation, if it passes, is expected to bring big benefits to West Virginia. It would make permanent a federal trust fund to support coal miners with black lung disease. It would offer new incentives for companies to build wind and solar farms in areas where coal mines or coal plants have recently closed. And it would provide generous tax credits for nascent technologies like carbon capture and storage and low-emissions hydrogen fuels, which Manchin has supported.

“Those are his pet projects,” James Van Nostrand, a law professor at West Virginia University, said. “I think he’s going to say, ‘I used my strategic position to bring back benefits for West Virginia.’ And he’ll probably do pretty well in the next election.”

Manchin has consistently said he is open to tackling climate change, despite representing a deeply conservative state where 69% of voters backed Donald Trump in 2020. But he has also insisted that the country cannot afford to turn its back on fossil fuels altogether.

“We must stop pretending that there is only one way to combat global climate change or achieve American energy independence,” Manchin said in a statement announcing the deal on Wednesday. “As the superpower of the world, it is vital we not undermine our superpower status by removing dependable and affordable fossil fuel energy before new technologies are ready to reliably carry the load.”

Some climate activists called the fossil fuel provisions a “poison pill” that would lock in oil and gas emissions. The bill would require the Interior Department to hold lease sales for oil and gas exploration in the Gulf of Mexico and the Cook Inlet in Alaska. It also requires the department to continue to hold auctions for fossil fuel leases if it plans to approve new wind or solar projects on federal lands.

Those provisions would make it impossible for President Joe Biden to uphold his campaign promise to end new federal oil and gas leasing.

Wenonah Hauter, executive director of Food & Water Action, an advocacy group, said in a statement that the deal “won’t solve the climate crisis, and may make it worse.”

But energy analysts and many of the country’s biggest environmental groups said that any additional emissions from fossil fuel leasing would be dwarfed by the clean-energy provisions in the bill.

Manish Bapna, president of the Natural Resources Defense Council, said his group’s internal modeling showed that the emissions cuts from the legislation would be as much as 10 times greater than the effects from the support it extends to fossil fuels. He called the fossil fuel provisions “pain points” but said overall the deal was “significantly positive.”

Most notably, experts said, Manchin signed on to a deal that would hasten the demise of coal plants in the United States.

West Virginia remains the nation’s second-largest producer of coal, but its mining industry has declined sharply over the past decade as electric utilities have closed hundreds of coal plants nationwide because of competition from inexpensive natural gas and renewable power. Industry leaders said they expected more coal plant closures with the passage of the bill.

“Our preliminary estimates indicate that West Virginia would be one of the states with the largest number of coal retirements due to the wind and solar tax credits,” Michelle Bloodworth, chief executive of America’s Power, an industry trade group, said in a statement.

But these days, there are more former coal miners in West Virginia than current coal miners, and the bill will undoubtedly help them, said Phil Smith, the top lobbyist for the United Mine Workers of America. He praised the permanent funding for the Black Lung Disability Trust Fund as well as the tax credits for carbon capture, a technology that Manchin has called “critical” but that has so far struggled to gain traction because of high costs.

“If we’re going to have coal industry 15, 20, 30 years from now, it is because we have developed carbon capture and deployed it, that’s just the truth,” Smith said. “Folks out in the coal fields understand that. And the coal companies understand that.”

Smith said the bill’s $4 billion in tax incentives for renewable energy manufacturers to build their factories in former coal fields would directly help the approximately 45,000 miners nationwide who have lost their jobs in the past decade.

He said the impact of those closures had been “devastating” to coal communities. “To bring good jobs back into the coal fields is good,” he said.

Asked for comment, Manchin’s spokeswoman, Sam Runyon, pointed to those provisions as well as another $5 billion in the package that would allow existing coal-fired power plants to improve their efficiency and adopt environmental controls like scrubbers, which remove pollutants from smokestacks. Those measures to help the coal industry, she noted, come on top of $8.5 billion for carbon capture and storage that Manchin secured as part of a bipartisan infrastructure bill last year.

Over a decade ago, Manchin ran a campaign ad in which he shot a bullet through President Barack Obama’s climate plan, which ultimately failed. So when Biden took office, he knew that Manchin would be his biggest obstacle to passing an ambitious climate change bill.

At every step of the way, Manchin shaped the legislation.

Many Democrats wanted a clean energy standard that would pay electric utilities to replace coal- and gas-fired power plants with renewable power and that would penalize those that didn’t. But Manchin opposed the measure, so it was scrapped. He vetoed a plan to provide bigger tax credits for consumers who bought union-made electric vehicles, a measure that was opposed by Toyota Motor, which operates a nonunion plant in West Virginia. And he ensured that the tax credits for electric vehicles could not be used by the wealthiest Americans.

Manchin scaled back but did not eliminate a fee imposed on oil and gas operators for leaks of methane, a powerful greenhouse gas, from wells, pipelines and other infrastructure. He rejected an early plan by Democrats to permanently ban oil drilling in the Atlantic and the Pacific and he ensured that long-standing tax breaks for the fossil fuel industry, which many Democrats wanted to repeal, went untouched.

As negotiations continued and war broke out in Ukraine, causing oil prices to skyrocket worldwide, Manchin talked about the need to increase drilling to bring down gasoline prices and cut government spending. The price tag of what was once a $2.2 trillion bill plummeted and more than $200 billion worth of spending on climate provisions was thrown out.

In the end, Sen. Chuck Schumer of New York, the Democratic majority leader, was willing to include several provisions that would require the federal government to open more public lands to drilling. At the same time, the bill would increase the royalty rates that energy companies have to pay for extracting fossil fuels in those areas.

By Wednesday, Manchin pronounced himself satisfied. “I think that we have a balance,” he said in a news conference. “This is a bill that keeps the fossil industry and keeps the country in a very strong position” until cleaner technologies “kick in.”

The climate bill still faces hurdles to passage. It needs approval from all 50 Democratic senators as well as from the House, which has a significant bloc of progressive Democrats who have sharply opposed efforts to expand fossil fuel drilling. But even many of them seemed willing to take the deal.

Rep. Pramila Jayapal, D-Wash., who leads the House progressive caucus, said on Thursday that she was “not ready” to commit to voting for the bill. But she praised it for pouring billions into environmental justice, speeding the clean energy transition and significantly cutting greenhouse gases.

“Does it have a couple of bad provisions? Yes,” she said. But, Jayapal added, “I think at the end of the day we’re going to look at this and say that it’s a big step forward.”