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Energy Update: April 17, 2020

In the States

Governors Greg Abbott of Texas, Gary Herbert of Utah, Kevin Stitt of Oklahoma, Mark Gordon of Wyoming, and John Bel Edwards of Louisiana wrote EPA Administrator Andrew Wheeler requesting a general waiver of renewable fuel standard compliance. The Governors are seeking this waiver to exempt their states from the Renewable Volume Obligation (RVO), a requirement on states’ refiners to have a set amount of renewable fuel (i.e. ethanol) mixed with their fuel supply or purchase equivalent credits. The Governors argue that the RVO adds to the economic burden their states’ refining sectors face as a result of the COVID-19 pandemic, and should be temporarily waived in the interest of their states’ economic health. “As our country comes to grips with this national emergency, continuing to implement the current RVO imposes an added obligation that would 'severely' harm [the refining sector], and consequently harm the economy of the states and the nation," said the request from the Governors. Opponents of the Governors’ proposal, however, argue that reducing the RVO would pit biofuel-producing states against fossil-fuel-producing states and harm job growth in some areas of rural America. 5 States Ask EPA to Loosen Renewable Fuel ObligationsLaw360

 

OR: A new law in Oregon incentivizes the production of biogas, a renewable form of natural gas produced by scrubbing impurities from the by-products of landfills, wastewater treatment plants, dairies, and farms. Under the law, utilities will be permitted to reinvest five percent of their revenue in the upfront equipment costs of biogas production and will be allowed to recoup the cost of those investments from ratepayers. Oregon’s largest gas utility, NW Natural Gas, announced its plan to invest $30 million per year in biogas production with the goal of replacing five percent of all fossil fuels with biogas by 2024. While the up-front costs of production are high, proponents of the law hope that supporting biogas investments will “tip the market” to biogas production in the long-term. Experts within the state’s Department of Energy estimate that new biogas production could offset 10% to 20% of the state’s current natural gas use. Under new law, Oregon utilities hope to prove potential of renewable natural gasEnergy News Network

 

VA: Governor Ralph Northam signed the Virginia Clean Economy Act, a bill containing several new standards and requirements intended to advance the Commonwealth’s clean energy goals. The law establishes renewable portfolio standards for two large electricity producers, Dominion Energy Virginia and Appalachian power, requiring them to be 100% carbon-free by 2045 and 2050, respectively. The law also mandates the closure of almost every coal-fired plant in the Commonwealth by the end of 2024. If they are not compliant with the new measure, penalties will be imposed, and a portion of those penalties will fund job training and renewable energy projects in poorer communities. The law also aims to improve energy efficiency, creating a new pilot program intended to reduce energy costs for low-income customers. "These new clean energy laws propel Virginia to leadership among the states in fighting climate change,” Governor Northam said. “They advance environmental justice and help create clean energy jobs. In Virginia, we are proving that a clean environment and a strong economy go hand-in-hand.” Governor Enacts Legislation for Clean EnergyWDBJ 7 News

 

WY: In response to recent volatility in the fossil fuel markets, Governor Mark Gordon signed HB 243, a bill temporarily reducing state mineral taxes, also known as a severance tax, under certain market conditions. Under the law, Wyoming’s mineral tax will automatically fall by two percent when the 12-month rolling average price of oil falls below $50 per barrel and the 12-month rolling average price of natural gas falls below $2.95 per thousand cubic feet. However, the law is effective July 1, and eligible producers can only benefit from the two percent reduction for six months of production, followed by a one percent reduction for the next six months. “House Bill 243 is the least we can do in the worst of times,” said Randall Luthi, the chief energy advisor to Governor Gordon. Some energy industry advocates hope the federal and state governments will take more steps to ease the ongoing economic pain energy producers are experiencing. Governor Approves Mineral Tax Break for Oil and Gas IndustryCasper Star Tribune

 

National

The clean energy sector is experiencing heavy jobs losses due to the COVID-19 pandemic. According to a new analysis by the BW Research Partnership for E2, a national nonpartisan group of business leaders interested in clean energy, more than 106,000 clean energy jobs were lost in March as a result of the economic downturn caused by the pandemic. These job losses amount to a three percent contraction for the sector, all but erasing the clean energy industry’s growth in 2019. “What these numbers tell us is that clean energy workers are a huge and important part of America’s workforce – and they are hurting badly,” the E2 advocacy group’s executive director Bob Keefe said in a statement. In light of these heavy losses, environmental advocates and renewable energy stakeholders wrote to Congress to ask for additional economic support, calling for the extension of critical tax incentives and for a directly paid tax credit to be introduced for standalone energy storage. 106K Clean Energy Jobs Lost in March: AnalysisThe Hill, US Clean Energy Groups Call on Congress for Help during COVID-19 PandemicEnergy Storage News

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