Koch Network Pressures Manchin, Sinema as Advocates Praise ‘Game Changing’ Climate Deal

Koch-funded Americans for Prosperity turned up the heat on swing-vote senators Joe Manchin (D-WV) and Kyrsten Sinema (D-AZ), a wider network of business groups stepped up to defend the deal, and environmental justice campaigners decried the oil and gas concessions Manchin had extracted in last-minute negotiations, as advocates absorbed the details of the $369.75-billion climate and clean energy package announced last week by Manchin and Senate Majority Leader Charles Schumer.

Last week, surprised but elated climate advocates described the agreement as the “best kept secret in Washington,” with one industry lobbyist enthusing that it put the U.S. “inches away” the “biggest climate and clean energy investment in American history”. Since then, details of the 725-page legislative text have been trickling out, painting a picture of a massive win that still came with some devastating trade-offs.

“The legislation includes unprecedented tax incentives for renewable energy and electric vehicles but requires additional oil and gas leasing on millions of acres of federal land for a decade,” Inside Climate News writes. Media reports also identify accelerated permitting for energy infrastructure and completion of the long-delayed Mountain Valley Pipeline as the price Schumer had to pay for Manchin’s support in a Senate where Democrats and Republicans hold an equal number of seats, and every vote counts.

A ‘Game Changer’

Climate policy advocates and media described the deal as a game changer, just two weeks after Manchin had rejected a similar measure after many months of on-and-off negotiations.

“If Democrats pass the bill, which they can do with a simple majority, it would be the biggest and most consequential legislative step ever taken by Congress to address the climate crisis,” writes Politico Power Switch. “While the package’s projected climate benefits wouldn’t quite reach President Joe Biden’s goal of cutting carbon pollution in half by 2030, it would be a significant step. Without it, the country is on track to cut emissions only 24 to 35%—far less than scientists say is needed to avert the worst of catastrophic warming.”

“The tax credits and incentives in the bill cover wind and solar power, ‘clean’ hydrogen, direct air capture, new and used clean cars, including electric vehicles, and the domestic production of critical minerals needed for batteries and other clean technologies,” Climate Nexus reports. “As a concession to Manchin, the bill would also require the Department of the Interior to reinstate oil drilling in the Gulf of Mexico. The spending would be covered by changes to tax law that would raise US$739 billion over the next decade.”

In an alert to supporters, Environmental Entrepreneurs (E2) said the package includes:

• $27 billion for a clean energy technology accelerator program, also known as a green bank, to support clean energy innovation and development, especially in disadvantaged communities;

• $20 billion in loans for new clean vehicle manufacturing facilities;

• $20 billion for climate-smart farm practices like cover cropping and more effective fertilizer use;

• $10 billion in investment tax credits for solar, wind, electric vehicle, and other clean technology manufacturing;

• $9 billion in consumer rebates for home energy retrofits and electric appliances, with a focus on low-income communities;

• $7,500 in tax credits for consumers who buy new electric and other clean vehicles, and $4,000 credits for lower- and middle-income households that buy used clean vehicles.

Overall, the agreement sets out $60 billion in assorted grants “to help pollution-burdened disadvantaged communities achieve environmental justice,” extends investment tax credits to microgrids, energy storage, and nuclear plants, and creates a digital platform to help low-income households cut their energy bills with community solar.

A ‘Strong Dose of Industrial Policy’, Canada Included

The New York Times says the bill would “fight climate change and energize domestic manufacturing” with measures that could be “transformative” for the U.S. auto and energy industries. “For the most part, it would do so through tax breaks and other incentives—a carrot, rather than stick, approach that is likely to go down easier in corporate boardrooms and with voters,” the Times says.

“Filled with compromises, the proposal offers something to all sides of the energy industry,” the news story states, from the tax credit extension for renewables to generous tax supports for carbon capture and storage (CCS) technology. “The bill would introduce a new fee on methane emissions from oil and gas infrastructure while giving fossil fuel companies access to more leases on federal lands and waters.”

The legislation “also contains a strong dose of industrial policy,” the Times adds. “It favours companies that get their components and raw materials from the United States or its allies, while effectively excluding China.”

One small phrase in that description—“or its allies”—had Canadian diplomats taking a victory lap, after the final version of the deal added Canadian manufacturing and supply chains to a plan that originally called for all-U.S. sourcing.

“When a ‘buy American’ provision on electric vehicle tax credits turned into ‘buy North American’,” writes Toronto Star national columnist Susan Delacourt, “a collective cheer sounded throughout Justin Trudeau’s government.” The decision “was exactly what Canada had been seeking, through an intense lobbying effort at all levels in the United States.” Canada’s ambassador to the U.S., Kirsten Hillman, said her team’s efforts were “relentless”. International Trade Minister Mary Ng said the advocacy was “non-stop”.

“You can’t overstate how much of a win that is. For us, it’s just 100%,” a senior federal official told Delacourt last Thursday. “I don’t think we should underestimate just the effect of the sheer level of aggressiveness of the lobbying that we undertook.”

The provision could help “rev up” electric vehicle production in Canada, CBC reports, with the U.S. accounting for 85% of Canadian auto exports. “This couldn’t be a bigger vote of confidence in the North American auto sector,” said Flavio Volpe, CEO of the Automotive Parts Manufacturers’ Association. “All of these new investments in Canada now have an incredible runway to have this rebirth of Canada’s auto sector.”

Putting Climate Targets Within Reach

With all its flaws and compromises, the bill still earned wide praise from climate policy advocates. Even those who raised flags about the depths of the deal-making it required stopped short of calling for its defeat.

“I think it is absolutely a transformative bill,” climate specialist Leah Stokes, an associate professor of political science at the University of California, Santa Barbara, told the Times. “It will put us on track for meeting President Biden’s goals. It will reduce every American’s energy bills.”

Dan Lashof, U.S. director at the Washington-based World Resources Institute, agreed that the package “would put the U.S. within reach of achieving its 50% reduction target by 2030 and strengthen U.S. leadership internationally. Without it, we won’t meet that target or the goals of the Paris Climate Agreement.”

The bill “is not perfect,” Lashof wrote. “We simply don’t have the votes in Congress to pass a perfect bill (even if all climate advocates could agree on what that would be). But let’s be clear: Anyone who wants a livable climate should do all they can to help ensure it is signed into law.”

Lashof acknowledged that “our work won’t be done when this bill is enacted. There will be many gaps to fill and problems to fix. But for now, let’s stay focused on getting this across the finish line to make sure we snatch this victory from the jaws of defeat.”

“This is the ultimate clean energy comeback—the strongest climate action yet at the moment we need it most,” Manish Bapna, president and CEO of the Natural Resources Defense Council, said in a statement. “This is not the bill we would have written. It’s time to break, not deepen, our dependence on fossil fuels and all the damage and danger they bring. But this is a package we can’t afford to reject.”

“To limit the worst impacts of climate change, we must make rapid progress in transitioning to clean energy and transportation this decade,” stated Union of Concerned Scientists President Johanna Chao Kreilick. “With communities reeling from extreme heat, record drought, and wildfires right now, this announcement is more than welcome news. It’s a relief.”

Paying the Price

But this still isn’t the farther-reaching Build Back Better deal that Biden first proposed when he entered the White House in January, 2021. It was ultimately the deal Democrats had to do to win the support of the politician known as “Senator Coal Baron”. Manchin’s personal fortune comes from a family coal business, and his election campaigns have received more generous fossil fuel donations than any other member of Congress from either party.

“To seal their surprise climate deal with Sen. Joe Manchin of West Virginia, Senate Democrats conceded that their only hope for advancing a plan for a clean energy future in Congress was to bind it up in a lifeline for fossil fuels,” Inside Climate News writes. Alongside all that is transformative about the climate and energy package, it “also would invest in ensuring a future for U.S. fossil energy in a carbon-constrained world. The legislation hikes tax incentives for expensive carbon capture technology 70%. It also requires that, for the next decade, the federal government offer tens of millions of acres offshore for oil and gas drilling as a prerequisite to the expansion of offshore wind energy development.”

Inside Climate says the deal:

• Prohibits the U.S. Department of the Interior from approving new renewable energy development over the next decade unless it also opens up land for oil and gas;

• Requires Interior to lease at least two million acres of onshore oil and gas per year or half of what U.S. fossils request, whichever is smaller, before issuing rights-of-way for wind or solar;

• Makes offshore wind development contingent on opening up 60 million acres offshore for fossil development.

“It is truly all of the above, which means this bill does not arbitrarily shut off our abundant fossil fuels,” Manchin said in a statement. “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.”

“It’s self-defeating to handcuff renewable energy development to massive new oil and gas extraction,” countered Brett Hartl director of government affairs at the Center for Biological Diversity. “The new leasing required in this bill will fan the flames of the climate disasters torching our country, and it’s a slap in the face to the communities fighting to protect themselves from filthy fossil fuels.”

To secure Manchin’s all-important vote, Democratic leadership also agreed to “attempt to advance separate legislation on expediting energy projects,” the Washington Post writes. Those measures go beyond the bounds of a budget reconciliation bill that only needs 51 votes under the arcane rules of the U.S. Senate—so it would only pass with backing from Senate Republicans who’ve “supported similar measures in the past,” but have deeply ornery about the way the Schumer-Manchin deal came about.

“Manchin holds all the cards here, and this is his ante,” said Republican strategist Liam Donovan. “Democrats can only do so much under the reconciliation rules, so they inevitably have to look beyond the scope of the bill to seal the deal.”

The side deal “would set new two-year limits, or maximum timelines, for environmental reviews for ‘major’ projects,” the Post says, citing a summary of the agreement. “It would also aim to streamline the government processes for deciding approvals for energy projects by centralizing decision-making with one lead agency.”

That provision would “limit legal challenges to energy projects,” give the U.S. Department of Energy more power to approve grid transmission projects considered to be in the national interest, and make it harder for the government to deny projects based on indirect environmental impacts, the Post writes.

“This is a pretty vague outline, but if you had this kind of efficient streamlining it could lead to the necessary build-out of energy infrastructure not just for fossil fuels, but for all types of energy that are necessary for reliability and decarbonization,” said Neil Chatterjee, former chair of the U.S. Federal Energy Regulatory Commission (FERC).

Running Roughshod Over Communities

Democrats will also “attempt to clear the way for the approval of the Mountain Valley Pipeline, which would transport Appalachian shale gas about 300 miles from West Virginia to Virginia,” the Post says. “This pipeline is a key priority of Manchin’s.”

The New York Times says the pipeline from the Marcellus shale fields would cross nearly 1,000 streams and wetlands, and “has been opposed for years by environmentalists, civil rights activists, and many Democratic state lawmakers in Virginia.” Construction was originally meant to conclude in 2018, but legal challenges to various permits have delayed it for so long that its FERC certification is due to expire in October—for the second time.

“Some Democrats like Raúl Grijalva, the chair of the House Committee on Natural Resources, have said they will not support any measures that fast-track pipelines or other energy projects,” the Times writes. “But three people familiar with Mr. Manchin’s agreement said Democratic leaders were likely to insert the Mountain Valley Pipeline and permitting provisions into a must-pass piece of legislation, such as the bill that funds the federal government, to maximize its chances.”

Earthjustice President Abigail Dillen said the two-year limit on permitting could allow fossils to “run roughshod over communities,” adding that “the implications of this side deal are very significant, especially as Congress is poised to accelerate the development of energy projects.”

UPROSE Executive Director Elizabeth Yeampierre, board co-chair with the Climate Justice Alliance, warned that the concessions to Manchin would encourage new infrastructure in low-income neighbourhoods and communities of colour that already bear the burden of fossil development. “You can’t give with one hand and take away with the other,” she told Inside Climate. “While it is great that resources have been allocated for front-line communities, there’s also a lot in there that turns our communities into sacrifice zones.”

“This Act is more of the same climate false solutions we have seen previously from this Administration,” agreed Tom BK Goldtooth, executive director of the Indigenous Environmental Network. “But it goes further with a quid pro quo guaranteeing offshore oil leases in exchange for renewable energy. From agriculture, soils, and forests pushed into the voluntary carbon markets to aviation biofuels as offsets, to the expansion of carbon capture and storage (CCS) technologies and CO2 pipelines, this administration locks in the violence of the climate crisis and consequences to Indigenous peoples, Indigenous nations, and front-line communities for decades to come. The Act does not provide climate nor energy security and will not cut emissions at source at the level that is needed to address this climate emergency.”

The Koch Network Gears Up

But none of that was nearly enough to mollify libertarian fossil billionaire Charles Koch. By Saturday, CNBC reports, Americans for Prosperity had launched two ads on its Facebook, Twitter, and YouTube channels, aiming to persuade Manchin or Sinema to block the deal.

The ads mischaracterize the package as a “$739 billion tax hike that will raise prices & make American energy more expensive,” the TV network says. Multiple independent analyses have shown that the plan actually reduces consumer energy costs, and pays for itself with taxes on corporations over $1 billion and the wealthiest people in the U.S., like…Charles Koch.

“The ad campaign targeting the reconciliation bill is a six-figure buy on digital platforms and connected TV,” CNBC writes, citing Americans for Prosperity spokesperson Bill Riggs. “He said the group is planning to expand this week to calling out Democrat Senators Raphael Warnock (D-GA), Catherine Cortez Masto (D-NV), and Maggie Hassan (D-NH). All three are up for re-election in November in states that are expected to be competitive.”

But Americans for Prosperity and Koch Industries may not have the field to themselves. The Ceres sustainable investment network praised the deal as a “mammoth investment in confronting the climate crisis” The 26-member CEO Climate Dialogue called it a “historic investment in reducing carbon emissions and accelerating the U.S. transition to a stronger, low-carbon economy” and urged Congress to pass it as soon as possible. And Environmental Entrepreneurs immediately began mobilizing its members to support the plan.