Complexity and contradiction
By Nick Van Osdol
- Combining the IRA and the CHIPS Science Act, the U.S. gov will greenlight more spending on climate and climate technologies in 2022 alone than it did in past decades.
- Still, there’s lots to the IRA that isn’t necessarily a ‘win’ for climate. Examples include provisions that will open up new federal land to oil & gas drilling, other major oil & gas infrastructure projects that will get the go-ahead because of the bill, and investments in technologies with a questionable decarbonization track record, like CCUS.
- There’s no easy answer on what the costs of some of these tradeoffs are, especially when you zoom in and take a look at their impacts on local stakeholders.
- These questions also cut to the core of differing philosophies and approaches to mitigating climate change, some of which we’ll explore.
At this point, you’ve likely seen a lot of coverage of the IRA. Countless newsletters and climate tech Twitter personalities have spent more time than I breaking down the nitty-gritty of the bill itself. And I’ve spent time talking about implications and what else to look out for throughout the rest of 2022 (see our most recent newsletter).
At least for now, I didn’t think I’d pen many more words on the matter. That is until Molly Morabito, a climate organizer, kindly asked me to. Here’s what she shared:
I wonder if, as you continue to report on the IRA and its impacts, you could make your readers more aware of some of the compromises included in the legislation that allows for some major concessions to the fossil fuel industry. As a climate organizer who works closely with frontline communities, I think it’s important to hold the nuances of this bill as we explain it to the public. While it certainly represents a historic investment in clean energy technology, it came with a high cost – both to communities at the frontlines of fossil fuel extraction and to our overall emission reduction potential.
I’m consistently impressed by the suggestions, comments, and edits that readers like you respond to this newsletter with. This one, in particular, struck me as spot on.
In yesterday’s newsletter, I gave pretty short shrift to the fact that the IRA isn’t perfect, stating:
There are innumerable takes and articles on why (the IRA) [isn’t perfect], many of which I’m sure I’d cosign, but that’s OK – that’s how the sausage gets made in Congress.
That’s all well and good, but I agree with Molly that I should also discuss the bill’s imperfections before moving on to whatever else comes next in climate and climate tech news to draw our attention away again inevitably.
The good, the bad, and the ugly
To reiterate the good real quick, a flurry of legislative activity of late in the U.S. has greenlit more spending on climate technologies and energy in the last month than the U.S. government made available in previous decades (chart per Robinson Meyer in the Atlantic):
But, to (miraculously) align all 50 Senate Democrats to get these bills across the finish line, as anyone familiar with legislative processes in the U.S. can imagine, there were a lot of concessions. Here are a few examples that, while certainly not exhaustive, illustrate the give and take of passing bills like this.
A new lease on life?
Perhaps the most cited provision in the bill that has caused concern among climate folks and environmentalists is a requirement that establishes an odd quid pro quo. Specifically, every time the government makes federal land available for solar and wind projects, it must also auction off federal land and offshore areas for oil and gas leases.
On the surface, the numbers are big, to the tune of 2 million acres of federal land and 60 million acres of offshore areas for oil and gas leasing every year for the next decade.
On the surface, this looks like a big step backward for a bill that is purportedly all about reducing emissions and advancing clean tech. If oil & gas projects proliferate after the Biden admin spent its first two years blocking them, how much progress is being made?
I’m no expert on these matters. One counterpoint to folks’ concern about this provision is that even when land is auctioned off to oil & gas companies, it doesn’t mean any company will necessarily bid on or buy them, let alone develop projects and drill on the land. This doesn’t mean there won’t be any new projects due to this bill. It just makes it harder to say how much net new drilling and extraction will occur. For more on that line of reasoning, I recommend this piece in Grist.
On the flip side, however, as Molly wrote in her response to me:
Multiple analyses show climate pollution from the world’s already producing fossil fuel developments, if fully developed, will push warming past 1.5 degrees Celsius. Avoiding such warming requires ending new investment in fossil fuel projects and phasing out production to keep as much as 40% of already-developed fields in the ground.
Further, as we’ll see in the next section below, many of the costs of new oil and gas projects will be borne predominantly by local communities, from Alaska to the Gulf of Mexico. While the IRA also earmarks $60B to deal with pollution at the community level, affected communities and people will inevitably fall through the cracks.
Pay the pied ‘piper’
It’s no secret. Joe Manchin was one of the key players who needed some cajoling to get on board with spending significant sums on climate technologies. And cajoling inevitably meant concessions for his home state, too.
Perhaps the best example is the Mountain Valley Pipeline, a 300+ mile pipeline that will cut through the Appalachian mountains to deliver natural gas from West Virginia to Virginia. The shale gas revolution in the U.S. since the ’90s kickstarted a process that has resulted in new pipelines crisscrossing much of the country. The Appalachian regions of states like Pennsylvania, West Virginia, and Ohio are a hotspot for these pipelines.
To ensure Joe Manchin’s support for the IRA, he and Senate Majority Leader Chuck Schumer negotiated a separate agreement to ensure the pipeline’s completion and to fast-track other similar infrastructure projects for the oil & gas industry.
Again, these are consequential concessions locally. Natural gas pipelines can be a disaster for local communities, whether because of their environmental impact or their developers’ use of eminent domain. Even if you view natural gas as a critical bridge fuel to a cleaner future, there’s no skirting that local communities may well bear the brunt of the downside.
A new lease on life, pt. II
Another set of technologies that will receive significant funding from the IRA is carbon capture, utilization, and storage (CCUS). Sometimes CCUS and carbon removal are lumped together. In my opinion, the two are different disciplines: CCUS should refer to technologies that capture emissions on-site, at the point of emissions, whereas carbon removal technologies remove atmospheric greenhouse gasses that have already entered the atmosphere.
There are incentives for both sets of technologies in the bill. The IRA enhances a tax credit for geological sequestration of carbon, raising the value of the credit for geological sequestration of carbon to $85 per ton from $50. The credit is even higher at $180 per ton for direct air capture, a carbon removal technology. This tax credit increase should help industries like oil & gas integrate CCUS tech by increasing the amount of money they can recoup. The tech comes with upfront costs, and absent a penalty on emissions or other carbon pricing mechanisms, a tax credit for CCUS is the only financial incentive for emitters to integrate it.
However, CCUS is another central fault line in climate and climate tech debates. For one, CCUS technologies aren’t perfect; even the best systems don’t target 100% efficiency in scrubbing point-of-source emissions. And detractors question whether deploying the tech at scale will help reduce emissions or whether they’re ‘cover’ for emission-intensive industries to expand and conduct business as usual.
Asking questions here is valid, especially considering how much money oil & gas companies invest in CCUS and in advocating for it. Furthermore, carbon capture projects’ track record isn’t rosy. Cui bono?
At the same, there are critical sectors, such as steel and cement production, that will be incredibly difficult to decarbonize. Demand for steel and cement isn’t going anywhere – they’re all around us, all the time. CCUS proponents tout the tech as our best bet to making inroads in curbing emissions from these sectors.
In case you’re new to the big tent that is ‘climate’ and climate tech, the movement, and all its industries include (and welcome, I might add) a lot of different opinions and philosophies.
On the one hand, you have hardcore capitalists who frame fighting climate change as the biggest economic opportunity ever. On the other hand, some folks contend the only way to mitigate and ultimately reverse climate change is to dismantle capitalism entirely and pursue degrowth strategies.
Transparently, I don’t sit on a razor’s edge in the middle – I tilt more towards the former. But that doesn’t mean I don’t want to give voice to opinions from those who lean more towards the latter. Nor does it make mine the ‘right’ opinion.
Further, there are no easy answers to the question raised and investigations opened in this newsletter. They cut to the core of a question surrounding the clean energy transition, namely how quickly it’s even possible to phase out fossil fuels entirely.
The world has barely made a dent in moving off gas, coal, and oil: From 2000 to 2020, those resources’ share of primary energy generation grew. And dynamics in Europe and the U.K. currently, where a combination of heatwaves and gas shortages are sending electricity prices skyrocketing, offer a glimpse into what a world with insufficient energy generation could look like.
I’ll leave you all in that place of discomfort, grappling with these ideas alongside me. No tying a neat bow on things today. Thanks for pushing me to cover more viewpoints. And remember that even when I don’t, there are always other well-reasoned takes on the topics I cover.
P.S., if you’re interested in Molly’s work, check out the coalition she organizes with, People vs Fossil Fuels. It’s a group of 1,200+ organizations pressuring the Biden admin to declare a climate emergency and stop fossil fuel projects.