House Majority Leader Steve Scalise, R-La., is flanked by Speaker of the House Kevin McCarthy, R-Calif., left, and Rep. Virginia Foxx, R-N.C., as he talks to reporters at the Capitol in Washington, March 24, 2023. House Republicans are set to approve a sprawling energy package that counters virtually all of President Joe Biden’s agenda to address climate change. (AP Photo/J. Scott Applewhite, File)

By Matthew Daly in Washington

WASHINGTON (AP) — House Republicans on Thursday approved a sprawling energy package that seeks to undo virtually all of President Joe Biden’s agenda to address climate change.

The legislation would sharply increase domestic production of oil, natural gas and coal, and ease permitting restrictions that delay pipelines, refineries and other projects. It would boost production of critical minerals such as lithium, nickel and cobalt that are used in electric vehicles, computers, cellphones and other products.

By a 225-204 vote, the House sent the measure to the Senate, where Majority Leader Chuck Schumer, D-N.Y., called it “dead on arrival.” Four Democrats joined with all but one Republican to support the bill.

Biden has threatened to veto the bill, saying it would replace “pro-consumer policies” adopted in the landmark climate law approved last year “with a thinly veiled license to pollute.” The bill would roll back Democratic investments in clean energy and ”pad oil and gas company profits,” the White House said.

Republicans call the bill the “Lower Energy Costs Act” and gave it the symbolic label H.R. 1 — the top legislative priority of the new GOP majority, which took control of the House in January.

The measure combines dozens of separate proposals and represents more than two years of work by Republicans who have chafed at Biden’s environmental agenda. They say Biden’s efforts have thwarted U.S. energy production and increased costs at the gas pump and grocery store.

“Families are struggling because of President Biden’s war on American energy,” said House Majority Leader Steve Scalise, R-La., one of the bill’s main authors.

The GOP bill will “unleash” abundant U.S. natural resources “so we can produce energy in America,” Scalise said. “We don’t have to be addicted to foreign countries that don’t like us.”

Democrats called the bill a giveaway to big oil companies.

“Republicans refuse to hold polluters accountable for the damage they cause to our air, our water, our communities and our climate,” said New Jersey Rep. Frank Pallone, the top Democrat on the House Energy and Commerce Committee.

“While Democrats delivered historic wins for the American people by passing historic climate legislation, Republicans are actively working to undermine that progress and do the bidding of their polluter friends,″ Pallone said.

House Speaker Kevin McCarthy, R-Calif., said the bill “restores American energy leadership by repealing unnecessary taxes and overregulation on American energy producers,” and “makes it easier to build things in America” by placing a two-year time limit on environmental reviews that now take an average of seven years.

“Every time we need a pipeline, a road or a dam, it gets held up five to seven years and adds millions of dollars in costs for the project to comply with Washington’s permitting process,” McCarthy said in speech on the House floor. “It’s too long, it’s unaffordable, it’s not based on science and it’s holding us back.”

He pointed to a project to modify and improve Lake Isabella Dam in his central California district that has lasted 18 years and still is not completed.

“Permitting reform isn’t for everyone,” McCarthy added. “If you like paying more at the pump, you don’t want to make it faster for American workers to build more pipelines. If you’re China, you’d rather America sit back and let others lead. And if you’re a bureaucrat, maybe you really do enjoy reading the 600-page environmental impact studies.”

Most Americans want lower prices and more U.S. energy production, McCarthy said — results he said the bill will deliver.

Democrats called that misleading and said the GOP plan was a thinly disguised effort to reward oil companies and other energy producers that have contributed millions of dollars to GOP campaigns.

Arizona Rep. Raul Grijalva, the top Democrat on the House Natural Resources Committee, derided the bill as the “Polluters Over People Act” and “a nearly 200-page love letter to polluting industries.”

Instead of reining in “Big Oil” companies that have reported record profits while “hoarding thousands of unused leases” on public lands and waters, the GOP bill lowers royalty rates paid by energy producers and reinstates noncompetitive leasing of public lands, Grijalva said.

The bill also gives mining companies “a veritable free-for-all on our public lands” and “makes mockery of tribal consultation” required under federal law, he said.

Under the GOP plan, mining companies will “destroy sacred and special places” throughout the West, “ruin the landscape and leave behind a toxic mess that pollutes our water and hurts our health — all without paying a cent to the American people,” Grijalva said.

Schumer called the measure “a giveaway to Big Oil pretending to be an energy package.”

The House energy package “would gut important environmental safeguards on fossil fuel projects,” locking America “into expensive, erratic and dirty energy sources while setting us back more than a decade on our transition to clean energy,” Schumer said.

Schumer said he supports streamlining the nation’s cumbersome permitting process for energy projects, especially those that will deliver “clean energy” such as wind, solar and geothermal power. “But the Republican plan falls woefully short on this front as well,” he said, calling on Republicans to back reforms that would help ease the transition to renewable energy and accelerate construction of transmission lines to bolster the nation’s aging power grid.

The Republican bill would repeal a new $27 billion Greenhouse Gas Reduction Fund and other parts of the climate and health care law passed by Democrats last year. The fund, also known as a “green bank,” is set to provide low-cost financing for projects intended to cut planet-warming greenhouse gas emissions.

The House bill also would eliminate a new tax on methane pollution that would charge companies for methane leaks from oil and gas wells.

Four Democrats voted in favor of the bill: Reps. Henry Cuellar and Vicente Gonzales of Texas, Jared Golden of Maine and Marie Gluesenkamp Perez of Washington state. Rep. Brian Fitzpatrick, R-Pa., opposed the bill.

Deputy Prime Minister and Minister of Finance Chrystia Freeland delivers the federal budget in the House of Commons on Parliament Hill in Ottawa, Tuesday, March 28, 2023. Industry watchers say Tuesday’s federal budget likely won’t be enough to convince Canadian oil and gas companies to pull the trigger on expensive, emissions-reducing carbon capture and storage projects. THE CANADIAN PRESS/Sean Kilpatrick

By Amanda Stephenson in Calgary

A question mark continues to hang over the future of carbon capture and storage projects in Canada, in spite of a pledge in Tuesday’s federal budget to deliver more investment certainty for major emissions-reducing projects.

“Look, we have set some very aggressive climate targets in Canada. You can’t kick the can down the road,” said carbon capture advocate James Millar, arguing that’s exactly what the federal government did Tuesday when it provided no additional details around its previously stated intention to reduce the risk of investing in pricey emissions-reduction projects by essentially guaranteeing the future price of carbon.

“The difference comes down to investment certainty in the U.S., versus the promise of investment certainty in Canada.”

As president and CEO of the International CCS (carbon capture and storage) Knowledge Centre, a non-profit organization based in Regina, Millar had been closely watching Tuesday’s budget in hopes of obtaining more federal support for the expensive technology that can be used to trap harmful greenhouse gas emissions from industrial processes and store them safely underground.

Heavy emitters — in particular, the oil and gas sector — have identified carbon capture and storage technology as key to helping the sector meet its emissions reduction targets and have been looking for government incentives akin to what is being offered south of the border, where the U.S. Inflation Reduction Act promises to pay companies a guaranteed US$85 price for each tonne of injected carbon.

While Canada has already announced an investment tax credit that will help to offset some of the up-front capital costs of carbon capture projects, companies have so far been hesitant to pull the trigger and go ahead with proposed large-scale projects.

The Pathways Alliance, for example, a consortium of oilsands companies, has proposed building a $16.5-billion carbon capture and storage transportation line to combat emissions from existing oilsands infrastructure in northern Alberta.

But the group has not yet made a final investment decision, saying it needs to know its project will be competitive with those in the U.S. before proceeding.

One thing the oil and gas sector has said will help with that is some kind of mechanism that would reduce the risk to companies that the federal price on carbon could be lowered or eliminated. If a new government were to be elected and remove or change Canada’s carbon pricing system, investing in expensive carbon-reducing technology could suddenly become uneconomical.

On Tuesday, the federal government reiterated that it intends to create such a mechanism through a so-called carbon contracts for difference system — but disappointed many who were hoping for details. Instead, the government announced it plans to begin consultations around the development of such a program.

Millar said while he doesn’t doubt the government’s good intentions, companies that have proposed large-scale projects need to get moving now if they have any hope of meeting Canada’s goal to reduce this country’s overall emissions by 40 per cent below 2005 levels by 2030 looms.

“We’re already in 2023, we’re seven years out. The consultations that were announced yesterday will take months,” he said. “I think it will take at least a year because it’s going to take time to set up the process.”

The Pathways Alliance itself took a diplomatic tone Tuesday, issuing a statement after the tabling of the budget saying it was “encouraged” by the signal that more policy certainty is coming, and adding it looks forward to a “better understanding” of the government’s intentions.

But Greg Pardy of RBC Capital said in a research note that in spite of some enhancements to the previously announced investment tax credit, budgetary support for carbon capture and storage was “somewhat limited  — perhaps even disappointing.”

“In our view, Canada’s federal government needs to shift into much higher gear when it comes to incentivizing decarbonization investment if it is to achieve its bold climate change ambitions,” Pardy said.

A report from BMO Capital Markets published just before the release of Tuesday’s budget said Canada’s policy framework for large-scale deployment of carbon capture and storage disadvantages producers here compared to the U.S., “despite claims to the contrary from some proponents of the environmental lobby.”

Environmentalists have been critical of any additional federal support for carbon capture, calling it akin to a subsidy for oil and gas companies that enables them to increase production when the world should be scaling down fossil fuel usage.

But the BMO report said carbon capture is an essential part of the energy transition, and without offering improved incentives to keep up with the U.S., Canada risks not meeting its 2030 emissions reduction targets.

“Canada’s market-based carbon price systems are much too uncertain to act as ‘incentive’ for industry to invest in major decarbonization projects,” the BMO report stated.

“Emitters need financial supports that are tangible and recognized by financial institutions to underwrite bank financing.”

This report by The Canadian Press was first published March 29, 2023.