Trends In Energy: What to expect in 2021

1. BIDEN ADMINISTRATION MAKEUP SIGNALS A WHOLE OF GOVERNMENT APPROACH TO CLIMATE

Greens Groups Look To Exert Influence In Biden Administration In Traditional Energy Positions And Beyond. As President-elect Biden began the process of selecting his senior White House staff and Cabinet nominees, environmental groups were assessing potential appointees across all parts of the government through green lenses. In October, we wrote about how pressure from environmentalists could pose challenges for a Biden Administration’s climate goals by blocking prospective appointees who have the knowledge and experience to achieve those goals over their corporate ties. Now, as some environmental groups push climate purity tests, division has arisen amongst the groups about how to best exercise their influence. Still, it is clear that expectations from environmentalists are playing a significant role in influencing the makeup of all parts of a Biden Administration. In November, the Stop The Money Pipeline Coalition wrote to the President-elect calling on him to “ensure that all financial-sector appointees to your administration are fully vetted regarding their commitment to shifting at full speed into economic principles and practices which completely support renewable energy and fully divest from fossil fuels.” Biden’s selection of Michael Regan as EPA Administrator-designate, instead of the presumed frontrunner Mary Nichols, shows how much influence environmental advocates are already wielding in Biden world. As Biden continues to fill out his government, expect that influence to extend throughout the incoming administration.

Biden’s Early Nominees Show “There Is Literally Something For Every Agency To Do” On Climate.  As Biden continues to look to environmental activists to build his government, even pulling from their ranks, it is increasingly clear Biden will take a whole of government approach to climate issues.  Biden’s recent appointment of former Secretary of State John Kerry as his climate envoy will add significant environmental focus to the State Department and National Security Council. Xavier Becerra, Biden’s choice for the Department of Health and Human Services, created the first “environmental justice bureau” within California’s Department of Justice and can be expected to be similarly environmentally engaged at HHS. Biden’s nominee for USDA, former Iowa Governor Tom Vilsack, is also expected to play a role in the administration’s climate policy, including in plans to ban new fracking permits on federal lands. Reportedly, the USDA’s role in climate policy made the job more appealing to Vilsack. Biden’s selection of Pete Buttigieg as Secretary of Transportation further cements that “the Transportation Department under Mr. Biden is expected to play a newly climate-centric role,” given Buttigieg’s campaign commitments on vehicle emission standards and reaching carbon neutrality by 2050. As Evergreen Action’s Sam Ricketts noted, on climate policy, “there is literally something for every agency to do” in a Biden administration. With Biden’s selection of NRDC president Gina McCarthy as domestic climate coordinator, the President-elect gets an ambitious climate regulator with expertise in the workings of the federal government, who has proven unafraid to push for aggressive regulatory action, with or without Congressional direction.

Biden’s Environmental Staffing Indicates Significant Access For Activists. Gina McCarthy, the President and CEO of NRDC, won’t be the only green activist staffing Biden’s Energy and Environmental posts. Biden’s EPA transition team is being led by Patrice Simms, an attorney with Earthjustice, “which has filed over 100 lawsuits against President Donald Trump’s administration.” Michael Regan previously led the Environmental Defense Fund’s climate and clean energy work, and Brenda Mallory, Biden’s pick to head the White House Council on Environmental Quality (CEQ), is currently the Director of Regulatory Policy at the Southern Environmental Law Center. As the President-elect continues to fill out the agencies most directly in charge of energy and environmental regulations, it is increasingly clear climate activists will have direct access to some of Biden’s most senior advisors and cabinet officials.

2. AIR POLLUTION AND FENCLINE ACTIVISM WILL TAKE ON AN INCREASINGLY PROMINENT ROLE IN INFRASTRUCTURE PERMITTING

Fenceline Opponents Of Infrastructure Are Increasingly Citing Environmental Justice Concerns When Opposing Air Permits. More and more, activists are referencing environmental justice (EJ) concerns when fighting air permits for infrastructure development. Local opponents of infrastructure development, often supported by large national environmental groups, have been publicly fighting air permits citing EJ concerns across the country. In Louisiana, a judge recently delayed a permit for construction of a plastics plant, telling the state Department of Environmental Quality and company lawyers that updated “air permits must have a complete EJ analysis.” In New Mexico, two attorneys with the New Mexico Environmental Law Center are opposing air quality permits for an asphalt plant citing EJ concerns. In New York, opponents of a power plant along the Hudson river are pointing to EJ provisions in the state’s recently passed Climate Leadership and Community Protection Act, and their efforts are being amplified by national organizations like Food & Water Watch.

With EJ Featuring More Prominently In Permitting Fights, Green Groups Look To Regulators And Legislators For Codification. As New York activists cite the EJ provisions in the state’s new climate law, across the country, green groups are lobbying for similar provisions to be included at the state and national level. In September, New Jersey Governor Phil Murphy signed legislation to “require mandatory permit denials if an environmental justice analysis determines a new facility will have a disproportionately negative impact on overburdened communities.” Highlighting the legislation, the Sierra Club New Jersey chapter criticized Governor Murphy for allowing two Newark industrial facilities to continue with the permitting process. At the national level, the NRDC recently called for the Biden EPA to address EJ concerns by “vigorously control[ing] air pollution from industrial facilities, freight, heavy-duty trucks, fleets, ocean going vessels and locomotives.”  NRDC’s advocacy comes with claims that the COVID-19 pandemic has most impacted “highly segregated and polluted communities.” Such health claims will likely be highlighted in upcoming calls for regulating emissions including methane and ethylene oxide, and, befitting the expected whole of government approach to climate issues, Transportation Secretary-designate Pete Buttigieg has pledged scrutiny on urban highways over EJ concerns, tweeting that the Administration “will make righting these wrongs an imperative.

3. NATURAL GAS’S FUTURE IS INCREASINGLY UNCLEAR, AT HOME AND ABROAD

As The Biden Administration Is Inaugurated, Natural Gas Opponents Have Growing Momentum. The fight over natural gas bans and electrification, which swept across the nation in 2020, is set to gain more ground in the new year. In Massachusetts, state lawmakers have passed legislation that could clear the path for local gas bans in the state. In Washington, legislation developed by Governor Jay Inslee “would require all new buildings in Washington to be zero-carbon by 2030 and seek to eliminate fossil fuel consumption in existing buildings by 2050.” Beyond local building electrification efforts, across the country opponents of natural gas have fought new infrastructure development, even when it would reduce existing emission levels. Among other places, such fights have arisen in Newburgh, New York, at Ohio State University, and in North and South Carolina, where Sierra Club has criticized Duke Energy plans to replace coal burning with gas. Opponents of gas infrastructure will have an ally in President Biden, who supports a 100% clean grid in 15 years, and during the campaign supported “direct cash rebates and low-cost financing to upgrade and electrify home appliances.” Biden’s Department of Energy could also expedite electrification efforts without Congress’s help by updating existing building and appliance efficiency standards.

As The EU Advances Its Green Deal, The Future Of LNG In Europe Is Clouded. As Europe continues to push for a Green Deal that will “impose wrenching change on the EU,” the future of American LNG exports to the continent is rapidly growing cloudier. In November, French power company Engie “halted negotiations on a multibillion dollar contract to import U.S. liquified natural gas.” Despite the State Department advocating for the deal, the French government ultimately walked away from the proposal due to “concerns that U.S. natural gas was too dirty.” The deals cancellation is cause for concern that Europe’s climate aspirations might hamper future exports of American LNG. These concerns are amplified by American green groups’ opposition to future LNG exports, and the opacity of the incoming Biden Administration’s views.

These Anti-Fossil Fuel Efforts Comes As More Businesses Are Beginning To Question The Path To Climate Goals As Global Economy Struggles To Recover From COVID-19. As local gas bans spread across California, the California Restaurant Association (CRA) continued its legal fight against the city of Berkeley’s gas ban, gaining support from national trade associations including the National Association of Homebuilders, the National Association of Manufacturers, the Air Conditioning, Heating and Refrigeration Institute, and the Hearth, Patio & Barbecue Association. Similarly, the local Golden Gate Restaurant Association (GGRA), which has previously supported surcharges meant to help fight climate change, in November, opposed a gas ban in San Francisco, citing the impact on small businesses. Outside of the US, two of the UK’s most famous architecture firms created a splash in December when they exited a pledge to reduce the architecture and construction industry’s emissions by nearly 40%. Foster + Partners and Zaha Hadid Architects both withdrew from Architects Declare, apparently over a disagreement about building lucrative airport projects and “their contribution to carbon-heavy international travel.” As the global economy works to recover from the COVID-19 pandemic, more businesses will begin to weigh the feasibility of both self-imposed and statutory climate goals, and the use of natural gas is likely to remain at the center of many of these conversations.

4. FINANCIAL REGULATORY FIGHTS OVER FOSSIL FUELS WILL TAKE CENTER STAGE IN 2021

Financial Regulators Continue Engaging On Climate Issue As Biden Administration Takes Shape. In October we wrote about the trend of increasing climate scrutiny from financial regulators and the potential for more financial regulation of the energy industry. In November, the Office of the Comptroller of the Currency (OCC) advanced a rule seemingly intended to discourage such efforts. The rule would prohibit large U.S. banks from refusing to lend to entire categories of lawful businesses, such as oil and gas, simply because they might be controversial or out of current public favor. Elsewhere, however, financial pressure on fossil fuels continued as New York Comptroller Tom DiNapoli announced in December a “target of getting the state’s $226 billion pension fund’s portfolio to net-zero emissions by 2040.” The Federal Reserve also made climate headlines in December with its decision to join a “three-year-old network of central banks working to manage climate-related risks to the financial system.” The decision signals the Fed “may get more active [on climate] in other ways, especially as incoming President Joe Biden makes nominations to the board.”

Biden Administration Set To Increase Financial Scrutiny On Fossil Fuels As Industry Promotes Stronger ESG Standards. As the Fed signals increased financial scrutiny of fossil fuels, the Biden Administration has indicated it is also likely to take regulatory action to add financial pressure to fossil fuels. During the campaign, Biden’s climate plan included a pledge to require “public companies to disclose climate risks and the greenhouse gas emissions in their operations and supply chains.” As the new Congress begins, Congressional Democrats will push for similar regulations on the banking industry with calls for the Biden Administration to force “lenders to abide by disclosure rules and stress tests to make sure they aren’t the source of a new crisis.” Congressional Democrats may have found their champion in Janet Yellen, Biden’s nominee for Treasury Secretary, who is a supporter of a carbon tax and seems set to bring Treasury’s clout into the climate debate. With federal and state governments set to take more aggressive action in the area, industry has already begun to show how it can engage productively on such issues. In December, the Energy Infrastructure Council (EIC), which represents companies that develop and operate energy infrastructure, “released the first-ever Midstream ESG Reporting Template,” setting an early example for how energy firms can proactively influence the conversation and inform investors regarding their sustainability initiatives.

5. WILL BEZOS SURPASS BLOOMBERG AS CLIMATE ACTIVISM’S BIGGEST BENEFACTOR IN 2021?

In 2020, Bezos Entered The Climate Philanthropy Mainstream, And 2021 Could Make Him Its Largest Benefactor, Fueling Energy Activism To Even More Aggressive Levels. In February 2020, Amazon founder Jeff Bezos announced the launch of a new group, Bezos Earth Fund, which he said would provide $10 billion for “scientists, activists, NGOs – any effort that offers a real possibility to help preserve and protect the natural world.” The announcement immediately places Bezos at the level of long-time climate activism funder Michael Bloomberg, whose funding for Beyond Coal, Beyond Carbon, and other such initiatives have totaled more than $150 million, with $500 million more pledged through 2022. In November 2020, Bezos revealed the first round of organizations receiving funding from Bezos Earth Fund. While The Atlantic noted, “The fund portended a revolution,” the first round of giving left critics are wondering if Bezos played it too safe, as the first round of Earth Fund disbursements largely went to the most established and well-funded environmental organizations, such as ClimateWorks, Energy Foundation, Environmental Defense Fund, Natural Resources Defense Council, and the Rocky Mountain Institute. In Bezos’ defense, Daniel Firger, who oversaw billionaire Mike Bloomberg’s climate philanthropy, noted, “It’s hard to write an eight-figure check to any but the biggest, most established grantees.” Given that reality, as Bezos looks to dole out the next round of Earth Fund donations in 2021, he could quickly surpass Michael Bloomberg as environmental activism’s leading benefactor, and the beneficiaries are likely to be the oil and gas industry’s already well-established detractors.

From WOTUS to POTUS: Environmental Uncertainty in the Next Administration

Over the past several weeks, we have dived deep into the increasingly permanent state of regulatory uncertainty in Washington. Besides perhaps trade policy, there is no arena in which this state is more prevalent than the various and sometimes obscure environmental rules that govern everything from energy to agriculture to transportation to infrastructure to manufacturing and beyond. No matter who wins in November, the litigation of these key rules – in courts of public opinion as well as law – will continue unabated.

Beyond what happens with the controversial Paris Climate Accord, public affairs professionals can expect continued debate on an alphabet soup of rules like WOTUS, NEPA, ACE, TSCA, and beyond. How these rules are written and implemented will determine how industries can operate and what it will cost the consumers they serve. To prepare for what comes next in these debates, and ensure you know which acronym to deploy when, here’s what you need to know:

The Next Administration’s Application Of The Clean Water Act Can Set Industries Back Or Move Them Forward. The Obama Administration 2015 “Waters of the United States” (WOTUS) update to the Clean Water Act angered farmers, developers, and other critics, who argued WOTUS created onerous bureaucracy surrounding land use and increased uncertainty. In 2020, the Trump Administration replaced WOTUS with the Navigable Waters Protection Rule to “streamline the definition so that it includes four simple categories of jurisdictional waters.” Environmental activists and their allies argue Trump’s “Dirty Water Rule” “significantly reduce[d] the range of protected wetlands” and turned to the courts to stall or prevent its implementation. Because Clean Water Act rules can be challenged in any of the nation’s nearly 100 federal courts, opponents intend to continue flooding the courts with challenges, while supporters, like agriculture advocates and homebuilding coalitions, are preparing to fight back.

  • What Happens Next? See You In Court. If President Trump wins a second term, opponents of his rule will double down on their legal challenges, leaving the EPA to fight a multifront war in the courts. If Vice President Biden is elected, public affairs professionals can anticipate more stringent regulations, leaving key industries in limbo as they try to figure out whether these rules will ebb or flow.

One Reason Infrastructure Week Feels More Like Groundhog Day: NEPA. Both Republicans and Democrats say they want more infrastructure, but the maze of federal regulations make such investments difficult, with time-consuming, labor-intensive, and expensive environmental rules slowing progress. The “Magna Carta” of these laws, the National Environmental Policy Act (NEPA), has for 50 years required federal agencies to produce “environmental impact statements” to determine the effects of proposed projects such as highways or energy projects and given community and outside stakeholders the ability to challenge or appeal these assessments. As we’ve noted in the past, the Trump Administration has advanced reforms of NEPA to “ensure that the Federal environmental review and permitting process for infrastructure projects is coordinated, predictable, and transparent.” Supporters say that this streamlining untangles a bureaucratic web that inhibits the construction of worthwhile projects. Opponents claim a weaker NEPA would “sell out our clean air, clean water, and safe climate” to corporations by lessening environmental and community activists’ ability to raise concerns.

  • What Happens Next? Building Projects Keeps Getting Harder. If President Trump is re-elected, his administration will likely be forced to defend his NEPA reforms in court for years to come. If Joe Biden is elected, the outcome of NEPA reform remains unclear. Biden will likely look to rollback President Trump’s NEPA reforms, while still attempting to follow-through on his commitment to spend $2 trillion in infrastructure. Without adjustments to NEPA’s rules, however, getting projects – even environmentally friendly ones like renewable energy generation – will prove more difficult for his administration.

The Never-Ending Power Emissions Debate. In 2018, the Trump Administration proposed the Affordable Clean Energy (ACE) Rule to “establish emission guidelines for states” regarding power plants. ACE replaced the Obama Administration’s Clean Power Plan, which the Trump EPA argued had exceeded EPA’s authority under the Clean Air Act. Democratic attorneys-general from states across the U.S. filed suit in August 2019 challenging ACE, insisting that the new rule only made modest emissions reductions, increased carbon emissions and pollutions in more than a dozen states, and greatly curtailed states’ abilities to create their own compliance requirements on energy companies.

  • Will It “Land at Some Point”? Court watchers say that the Trump Administration has an uphill battle in defending their regulation, and experts say that, should Biden win, ACE will never get a ruling. A Biden EPA will almost certainly replace ACE with a rule even more stringent than the Clean Power Plan. Should a Biden Administration enact these greater CO2 emission limitations, Politico’s Alex Guillen observes, “get ready for yet another day of marathon arguments over Biden’s replacement rule in another four years or so. (Though notably it’s been 13 years since the Supreme Court said EPA has greenhouse gas authority, so something’s gotta land at some point.).”

TSCA May Have More Drama Than La Tosca As Chemical Fights Compound Uncertainty For Regulators And Industries. Created in 1976, and amended in 2016, the Toxic Substances Control Act (TSCA) regulates new or already existing chemicals. Critics of the administration argue the Trump EPA is too “industry-friendly,” and is endangering the public by exposing them to chemicals that can’t be confirmed as harmless. In November 2019, the 9th Circuit Court of Appeals agreed, gearing up yet another fight for a Trump Administration in a second term – or for a prospective President Biden to ditch once he’s in office. Moreover, industry suspects a Biden Administration “could interpret TSCA, and the many legal, science and policy issues it invites,

  • But There’s More: Debate On This Chemical Could Upend Medical Supply Chains Amidst The Pandemic. Beyond the TSCA fights, under outside pressure EPA has indicated it will consider action on an increasingly high profile chemical in 2021: ethylene oxide (EtO). EtO is a common sterilizer used on medical devices, but it has also been deemed a carcinogen by the EPA. As EPA looks to regulate the gas in 2021, any closures of EtO plants could bring the United States to “the cusp of a major medical logistical failure,” all while the country tries to navigate the COVID-19 pandemic.

CAFE Standards Remain On The Menu… Arguing it would allow the auto industry to make cheaper, safer vehicles, the Trump Administration finalized a roll back of the Obama era Corporate Average Fuel Economy (CAFE) standards in March 2020. The administration also upped the CAFE standards fight by revoking California’s federal waiver on emissions, calling for a uniform national standard and denying California’s assertion that the state needs more stringent emissions standards.

  • … And California Just Upped The Ante. The CAFE fight will certainly continue beyond election day, especially with California’s new mandate that all new passenger cars and trucks sold in the state much be emissions free by 2035, which now has found interest among Congressional Democrats as a national objective. While Biden is likely to restore California’s CAFÉ waiver and allow the state to move forward with such a ban, Trump’s EPA Administrator has indicated his agency would need to approve California’s ban on gas-powered vehicles.

Regardless Of Who Wins In November, Public Affairs Professionals Will Have A Daunting Task In These Environmental Debates. Energy and environmental issues are among the top concerns for any presidential administration, but the increasing contentious fights over how to address climate change means that each regulatory action becomes a knock-down, drag-out fight. Ever-changing rules combined with stalled implementation compound uncertainty for sectors that require reliable, stable policy direction to get things done. Their public affairs professionals always have their work cut out for them, but now more than ever, affecting policymaking remains a daunting task. With Delve in your corner, you can better anticipate what’s next.

Trends In Energy Infrastructure: October Update

Rockefeller Oil Heirs Add More Fuel To The Divestment Fire Amidst Increased Financial Activism Among Business Community

Rockefeller Family Founds BankFWD In Newest Divestment Push. The Rockefeller family and its associated funds have long been aggressive funders of environmentalism and supporters of the divestment movement. For years, the Rockefeller Brother’s Fund (RBF) funded 350.org, the campaign group which has become a champion of divestment. RBF divested itself from fossil fuels in 2014, and the Rockefeller Family Fund followed suit in 2016. In September 2014, Bill McKibben, founder of 350.org called RBF’s decision to begin divesting “one of the most important moments in the whole divestment campaign.” Now, the Rockefeller family is renewing its divestment activism with the formation of BankFWD, which is co-chaired by three members of the family, each of whom is on the board of different family trusts. BankFWD plans to pressure major banks to stop investing in fossil fuels by aiming to press wealthy individuals to “sign a pledge that they will press their banks to phase out fossil fuel investments.” While the group is still in its early stages, it is recruiting from the Rockefeller family’s wealthy network, and the group’s co-chairs have already directly met with some of the banks they plan to target. As BankFWD grows in size, expect these activists to publicly pressure financial institutions to reach Net Zero in investing, and call for more climate reporting, whether by government mandate, or shareholder initiative.

New CFTC Report A Harbinger Of Increased Climate Scrutiny From Financial Regulators. On September 9, 2020, a Commodity Futures Trading Commission subcommittee published a report recommending the U.S. establish a price on carbon, arguing “all relevant federal financial regulatory agencies should incorporate climate-related risks into their mandates,” and urging “financial supervisors” to “require banks and nonbank financial firms to address climate-related financial risks … in a way that is appropriately governed by corporate management,” among other recommendations. The report was approved by more than two dozen financial institutions, including Citi, JP Morgan, and Morgan Stanley, who supported “the overarching goal” of the report. CFTC’s report could be a sign of things to come for financial regulators, especially the SEC. In September, the Securities Exchange Commission (SEC) advanced a rule to make it more difficult for activist investors to press companies with ESG related shareholder investments. Despite the rule’s passage by a 3-2 vote, SEC Commissioner Allison Herren Lee’s op-ed in The New York Times days later, which cited the CFTC report, indicated the issue is far from settled. Should Democrats gain more control in Washington after next month’s election, this issue is likely to be at the top of their agenda with support from Senators like Elizabeth Warren (D-MA).

Growing Climate Consciousness Adds Pressure To Insurance And Legal Industries. September also saw nearly 60 climate conscious businesses, including Ben and Jerry’s and Patagonia, call for the U.S. insurance industry to “[limit] fossil fuel investments and underwriting.” Axios recently reported on the recent slew of corporate climate actions, and claimed the trend may be more serious than in the past, as businesses believe “young, dynamic, and intelligent job candidates want to work for a company that is leading on climate.” These businesses may be correct, as more than 600 law students recently pledged to boycott the law firm Paul, Weiss, Rifkind, Wharton & Garrison, unless it ceases providing legal services to Exxon. As the corporate world and those seeking to enter it continue to engage more seriously on climate issues, more scrutiny and demands to drop support for fossil fuel firms will increasingly becoming a norm, rather than an outlier.

While Focus Is On The Outcome Of The Presidential Election, State And Local Races May Have  A Greater Impact On Future Of Energy Infrastructure Development

Environmental Activists Now Targeting, And Winning, Down Ballot Races. As much of the nation’s attention is consumed by the presidential election, what happens down ballot could have a more direct and immediate impact on energy infrastructure development. Over the last several years, environmental groups have targeted lower profile races in order to elect “Green New Deal Champions” up and down ballot, and the impact is already being felt. For example, in 2017, the Sierra Club San Francisco Bay Chapter endorsed Kate Harrison for city council. Two years later, in July 2019, the Berkeley City Council passed legislation put forward by Councilwoman Harrison to become the first city in the nation to ban natural gas in new buildings, setting off a trend across the country. In 2019, Brookline, Massachusetts followed Berkeley’s lead, passing a ban on oil and gas infrastructure in new buildings. Lisa Cunningham, a co-petitioner for the bylaw, is a member of “Mothers Out Front,” an activist group with anti-natural fossil fuel ties to Sierra Club and Rocky Mountain Institute. In the 2020 election, the Sunrise Movement has gotten a lot of attention for its role in Senator Markey’s primary victory over Representative Joe Kennedy, but has gotten far less attention for its role in supporting progressives in state and local primaries in Colorado, New York, and Kentucky. In places like North Carolina and Pennsylvania, attorney general races have become a focal point for environmentalists. In Pennsylvania, incumbent AG Josh Shapiro won his 2016 election after threatening to “hold the Big Oil and Gas companies criminally liable,” and with the support of environmental activists in the state. In North Carolina, incumbent Attorney General Josh Stein, who has challenged both Duke Energy and the Trump Administration on environmental issues such as coal-ash and the Clean Water Act, boasts endorsements from the Sierra Club, North Carolina League of Conservation Voters, and Southern Alliance for Clean Energy.

Michigan Joins States To Commit To Carbon Neutrality On Aggressive Timelines, As States And Localities Pursue Climate Lawsuits. As down ballot races grow more environmentally focused, state and local policymakers are more able than ever to influence and disrupt environmental policymaking. In September, Michigan Governor Whitmer committed the state to carbon neutrality by 2050, joining eight other states with carbon neutrality pledges, and city and county governments across the country have jumped on the electrification trend. Over the past few years, states and localities have begun testing a new tactic in their battles against energy producers: lawsuits against oil and gas companies for allegedly misleading the public about the dangers their products caused related to global warming. In October, the Supreme Court announced it would soon put this trend in the spotlight. Next year, the high court will hear a case brought forth by Baltimore that could have major implications for whether similar cases would be considered in federal or state courts in the future. As former-President Obama observed, “elections have consequences.” Even if President Trump is reelected in November, state and local officials will continue to be able to obstruct efforts to promote infrastructure development.

How Pressure From The Left Could Make It Harder For  A Biden Administration To Achieve Climate Goals

Environmentalists Are Trying To Block Potential Nominees They View As Insufficiently Aggressive On Climate Change. As one high profile utility executive quipped last year, “you can legislate physics, but physics still follow their own rules.” Now, progressive groups may be trying to prove him wrong. Respected public policy observers like Washington Post’s David Ignatius believe “America’s next president must continue Obama’s progress on clean energy” and have highlighted the work of then-Energy Secretary Ernest Moniz as “arguably President Obama’s best Cabinet appointment.” Progressive groups, however, have targeted the former Energy Secretary and other Democratic leaning policy officials due to their lack of fealty to progressives’ desired steps on climate. For environmentalists, Moniz’s “fact-based, technology-respecting” approach to reducing carbon emissions is unacceptable. Rather, those pushing Biden’s transition team claim “an incumbency of old ideas (like ‘all of the above’ energy policy) must end.” This pressure comes amidst a broader effort to purge the Biden transition of corporate and industry experts with knowledge and experience in the policy areas for which Biden might hope to enlist them. The result may be a mismatch between policy demands and expectations, and the reality of what can be achieved by an administration made up of ideologues who lack the necessary experience to advance a president’s agenda. After years of suggesting an unqualified cabinet leads to ineffective governance, progressives may want to reconsider their opposition to the candidates who could effectively advance their desired goals.

Jockeying For Nominations Begins With Energy Industry Opponents Positioning Themselves For Environmental Posts. Despite people within Biden’s camp remaining tight-lipped about who might get  important cabinet and administration nominations should Biden win, (including potentially for a Climate Czar,) the jockeying has already begun for a number of environmental posts. Billionaire environmental activist and one time presidential candidate Tom Steyer has reportedly expressed interest in a position in a Biden administration. Politico recently reported that three New Mexican lawmakers, Rep. Deb Haaland and Sens. Tom Udall and Martin Heinrich, have positioned themselves as potential Interior Department leaders. Each of the three have opposed fossil fuels despite their state’s reliance on the oil and gas industry, with Haaland serving as the vice-chair of the House Natural Resources Committee and a member of the Biden campaign’s Climate Engagement Advisory Council amidst both of those bodies advancing initiatives within the framework of the Green New Deal and both Udall and Heinrich cosponsoring Senator Ed Markey’s Green New Deal legislation. While we likely will not know who a President Biden would nominate until sometime after the election, we do know environmentalists will be working to make any Biden cabinet as progressive as possible, and there will be a “rich talent pool” for Biden to pick from. As the old saying goes, in Washington, people are policy.

Helping an energy association’s members navigate a constantly shifting operating landscape

Challenge: The energy industry has become increasingly volatile in recent years amid heightened political, reputational, and policy risk. To help their members anticipate these risks and identify new opportunities, a national trade association turned to Delve for timely and accurate public affairs intelligence.

Solution: Delve’s work began with a robust risk assessment of the policy environment on specific industry issues across the country. This research provided the  association and its member companies with a deeper understanding of where the current or potential level of policy activity is highest and which organizations and individuals were shaping the debate. Informed by this foundational research, Delve’s analysts stood up a custom monitoring and analysis program for the association and produce regular trend reports for its members, as well as in-person and virtual briefings on the risk assessment and how key trends that could impact their interests are developing.

Results: The risk assessment helped the association and its members understand how key policy debates were evolving and where risks to the industry could appear next. Our systematic monitoring and analysis helps the association anticipate and mitigate those risks before it is too late, while trend reports educate its members on the evolving political and reputational risks in their operating environment so they can engage the right stakeholders and policymakers to ensure their projects and initiatives are successful.

Trends In Energy: Mid-Year Update Part 2

At the start of 2020, Delve analysts identified the top six trends in energy infrastructure to watch over the year. While 2020 has brought unexpected challenges, we are looking back, now more than halfway through the year, on how some of our predictions have changed and how they still ring true in this “new normal.” In July, Part 1 of this mid-year update explored how COVID-19 has impacted the first three trends we identified for the year. This update examines the remaining trends, including how regulatory pressures have continued their shift to state and local levels, the mainstreaming of next generation, more disruptive energy activism, and the growing pressure facing financial institutions from both ends of the political spectrum.

4. Whether Democrats Take The White House Back Or Not, Policy And Regulatory Pressures Have Shifted To State And Local Officials – And The Courts.

With now over three years of the Trump Administration cutting regulatory red tape, state and local officials have taken up the environmental mantle to advance the climate issue on their own. Following efforts by the Sierra Club, by the end of 2019, seven states, plus D.C., and Puerto Rico had made commitments to 100% renewable energy on aggressive timelines. This year, states have continued that trend. In April, Virginia added its name to the list when Governor Northam launched Clean Energy Virginia, which includes requiring all carbon emitting sources of electricity in the state to be out of service by 2045. Lawmakers in Massachusetts could soon decide to add the commonwealth to the list as well, as they face mounting pressure from activist groups to pass an aggressive 100% renewable plan that would require all of the commonwealth’s electricity to be renewable by 2035 and all heating and transportation energy to be renewable by 2045.

City governments are joining these governors in taking aggressive climate actions. The Sierra Club’s “Ready for 100” pledge closed out its commitment drive with the support of 226 mayors from across the United States, and more than 400 mayors have joined the bi-partisan Climate Mayors, a network that is “working together to demonstrate leadership on climate change. Earlier this year, Miami and Phoenix added their names to a list of U.S. cities in C40 Cities, a global group of cities committed to achieving the goals of the Paris Climate Agreement, bringing the total count of U.S. cities in the group to 14.

State Attorneys General are also taking up the climate fight. Since the onset of the Trump Administration, AGs in a number of states have fought the Administration’s regulatory rollbacks, and the AGs from Washington, D.C. and Minnesota recently have reinvigorated the effort to take energy producers and production to court for “covering up climate change for decades.” The two AGs filed lawsuits against Exxon Mobil, Shell, BP, Chevron, and Koch Industries. In June, Massachusetts Attorney General Maura Healey furthered another line of attack on fossil fuels, petitioning the state Department of Public Utilities to investigate the future of natural gas in the state and to “work with stakeholders to develop a nation-leading regulatory and policy roadmap that protects customers during the necessary transition away from reliance on natural gas and other fossil fuels.” This move comes on the heels of Brookline, MA banning new natural gas hook ups last fall, with several other Bay State municipalities awaiting this guidance requested by Healey before moving forward with similar bans. Activist AGs have also seized on the COVID-19 pandemic as a means to push their environmental agenda. In May, 11 attorneys general called on FERC to “impose immediate moratorium on approving fossil-fuel projects until coronavirus crisis is over.”

To help aid in these various legal fights, former New York City Mayor, Michael Bloomberg, has directed funding toward the State Energy & Environmental Impact Center at the NYU School of Law to provide legal support to state attorneys general in “defending and promoting clean energy, climate and environmental laws and policies.” If Joe Biden is elected in November, his Administration may very well provide further backing to these legal efforts as well. However, regardless of who sits in the White House in 2021, state and local governments are rapidly picking up issues that have been traditionally handled by federal regulators. The new age of energy activism has already made local policymakers and regulators into standard bearers in the climate fight, and public affairs professionals need to recognize that traditional DC focused lobbying efforts and relationship building are no longer enough to protect their companies’ interests and advance their business objectives.

5. These Local And State Fights Are Being Driven By A Surge Of Next Generation, Disruptive Energy Activists That Heighten The Political And Reputational Risks Facing The Energy Industry This Year And Beyond.

In 2019, we saw a new generation of voices begin to reshape the environmental movement by tapping into young voters’ “existential anxiety,” to engage a more confrontational and disruptive activist. While organizations such as the Natural Resource Defense Center, Sierra Club, and other traditional, established groups remain, these groups are now the moderates in the fight against climate change. In 2020, this trend has continued with the rapid growth and acceptance of next generation environmental activism. Today, Extinction Rebellion, or XR, the radical UK-based climate group has grown to has more than 1,000 groups, from nearly 500 at the beginning of the year. Here in the United States, the Sunrise Movement’s organic and viral climate campaign has engaged and mobilized students and has been instrumental in promoting the Green New Deal and making climate change a critical issue for policymakers through untraditional tactics like a November 2018 sit-in at House Speaker Nancy Pelosi’s office that was joined by freshman Congresswoman Alexandria Ocasio Cortez (D-NY).

Despite the COVID-19 pandemic putting a halt on much of American life through the start of the new year, Sunrise has continued to engage young activists through their Sunrise School which has regular training sessions and connects activists around the country. These new activists have the ability to scale quickly, adapt to whatever their circumstances, and utilize tactics that used to be considered outside the mainstream, pandemic or not. More importantly, however, they are no longer just sitting outside the elected officials’ offices protesting, but being invited into the room with a seat at the table. For example, Democratic Presidential nominee Joe Biden included Varshini Prakash, co-founder of the Sunrise Movement, on his campaign’s climate task force, which is also co-chaired by Rep. Ocasio-Cortez. Beyond the White House, Sunrise is developing an effective political operation down ballot, endorsing “Green New Deal Champions” and getting their supporters to make calls for their preferred candidates. In many cases, they’re winning. In two years, Sunrise has gone from staging protests in Speaker Nancy Pelosi’s office, to helping shape the Democratic Party’s climate platform and helping pick the winners in Democratic primaries. As these next generation activists are able successfully elect more “Green New Deal Champions,” their impact will only grow following the 2020 election.

The increased disruptiveness of these next generation activists has also incorporated a broader set of progressive groups than previously focused on environmental issues. The Democratic Socialists of America, for example, have prioritized environmental justice and “Energy Democracy,” both as a national organization and by a number of their local affiliates. DSA chapters have led efforts to municipalize utilities in Chicago, Massachusetts, Rhode Island, and California, and have taken part in “Energy Democracy” coalitions in traditionally conservative states like Alabama. The group argues such municipalization is necessary to shut down fossil fuels and shift generation to 100% renewables, putting forth a set of guiding principles for what it calls an “Ecosocialist Green New Deal.” These principles include decarbonizing the economy fully by 2030 by nationalizing fossil fuel providers and phasing them out while establishing public ownership of all utilities and the electric grid. Much like the XR and Sunrise, DSA too has grown despite the pandemic, with The Atlantic reporting, “the Democratic Socialists of America have an estimated 10,000 new members … that organizers attribute, in part, to the coronavirus pandemic.” As these groups and their allies further advance into the mainstream of environmentalist efforts, industry public affairs professionals will have to adapt how they protect energy projects from these disruptive efforts to influence policy and regulatory decisions.

6. Financial Institutions Have Responded To Shifting Climate Opinion With Dramatic New Environmental Policies, But These Concessions Have Only Increased Pressure From Across The Political Spectrum.  

Despite Blackrock’s pledge early this year to make “sustainability” the firm’s “new standard for investing,” activists still targeted the firm. Meanwhile, the “Stop the Money Pipeline” campaign that launched in January has targeted specific banks, insurance companies, and asset managers that fund fossil fuel projects. JPMorgan Chase was one of the first targets of this initiative, with demands the bank divest from fossil fuels and calls for customers to close their accounts. In July, Morgan Stanley announced it would become the first major U.S. bank to publicly disclose how much its loans and investments contribute to climate change. The bank was quickly joined in this commitment by Bank of America and Citi.

These broader climate commitments follow announcements earlier this year to stop providing financing for Arctic drilling. Morgan Stanley, UBS, Wells Fargo, and Goldman Sachs all announced they will no longer invest in or support oil projects in the area. These announcements came after a group of Senate Democrats wrote a letter to a group of major financial institutions demanding they stop funding such projects. Following Morgan Stanley’s announcement, the Sierra Club noted Bank of America “is only remaining major us bank without a commitment not to fund arctic drilling.”

Pressure from policymakers goes both ways, however. In response to this shift by financial institutions, a group of Congressional Republicans wrote a letter to President Trump arguing, “Wall Street’s big banks … should not be able to reap the benefits of participating in federally guaranteed loan programs laid out in the CARES Act … while simultaneously targeting American energy companies and workers.” In turn. the Trump Administration announced the Treasury Department will “take a serious look at these banks’ actions,” while “The OCC [Office of the Comptroller of the Currency] intends to seek additional information from the banks involved to understand the rationale for these decisions as well as their effect on our national economy and local communities.”

Separately, the Department of Labor took aim at the increasing investor focus on social impact with a regulatory proposal to add specific requirements for fiduciaries considering Environmental, Social, and Governance (ESG) oriented investments. The proposal “reiterates that fiduciaries are prohibited from disregarding pecuniary considerations to instead pursue ESG-related considerations.” This move by Labor was widely seen as a reaction to heightened pressure to place ESG concerns at the forefront of investing. The move comes as a “group of large investors,” including “more than three dozen pension plans, fund managers and other financial institutions,” called on regulators to “explicitly integrate climate change across your mandate.” In addition, a group of activists, including Amazon Watch, Greenpeace USA, League of Conservation Voters, Natural Resources Defense Council, and Oxfam, wrote a letter to Federal Reserve Chairman Jerome Powell and New York Fed  President John Williams urging the Fed to end its purchases of energy sector corporate bonds. The letter claims, “Through these purchases, the [Federal Reserve] Board is potentially exposing the public to financial losses through credit risk, market risk, and operational risk due to exacerbation of the climate crisis.”

Shareholder activism focused on climate risk has increased this year, with shareholder activist group As You Sow forcing votes by shareholders in several major oil firms on proposals to disclose climate change risks to petrochemical facilities. In May, a majority of Phillips 66 investors supported the proposal, but investors for both Chevron and Exxon Mobil rejected the proposals. While Chevron’s shareholders rejected the climate risk proposal, they did approve a proposal that requires additional climate-related lobbying disclosures, include “a [Board of Directors report within the next year describing how the company’s lobbying activities ‘align with the goal of limiting average global warming’ to a level prescribed by the Paris climate accord.”

The successful proposal won praise from sustainability group Ceres, which claimed the move “puts Chevron, and companies everywhere, on notice that investors view lobbying as a critical part of a company’s core climate strategy.” Indeed, the proposal is just one recent example of the increasing scrutiny by activists on how consistent companies’ lobbying and public affairs efforts are with the climate commitments they make. With the abundance of public information now available to hold firms accountable, press releases are no longer enough to satisfy activists, and companies will have to be deliberate and thoughtful on how their business objectives align with the principles and promises they adopt under activist pressure.

What’s In The Pipeline

Here’s what you need to know…

Over the past few weeks, big developments in the energy world have been cause for both concern and celebration among its advocates. Significant court victories have cleared the way for some key infrastructure projects, while other judicial losses serve as a powerful reminder of how traditional energy opponents have become professionalized, backed with substantial financial support and technical expertise that allows them to “run out the clock” by burying energy companies in administrative and legal compliance costs.

Despite this organized obstruction, getting energy infrastructure projects built with a minimum of delay and disruption is crucial for our economy, and an unexpected announcement this week by the Oracle of Omaha himself made clear traditional energy infrastructure is here to stay. With that in mind, here’s what public affairs professionals need to know to successfully navigate the new operating landscape and defend the significant investments their firms are making in communities before their opponents arrive.

Recent court and legal actions have Buffetted energy infrastructure projects across the country.

Atlantic Coast Cancelled. In mid-June, the U.S. Supreme Court handed down a 7-2 decision that the Trump Administration behaved lawfully in approving construction of the Atlantic Coast Pipeline. That left some observers surprised last weekend when project owners Dominion and Duke Energy announced that “legal uncertainty” has forced them to cancel construction of the long-sought project. The new reality of energy activism explains their decision, with the companies telling CNN, “ongoing delays, litigation, and an expected increase in costs” threatened the viability of their project, which had already cost well over a million dollars in unexpected lobbying and litigation costs over the past several years.

Dakota Access Ordered To Be Drained. News of Atlantic Coast’s cancellation was quickly followed by a U.S. District Court judge ordering the Dakota Access Pipeline to be emptied no later than August 5, 2020, as it awaits a new governmental review. The delay marks a major victory for a carefully crafted coalition of environmental activists and Native American groups who have long fought against the pipeline’s construction and use. While pipeline owner Energy Transfer has made clear it will appeal this ruling, the decision highlights how activists can continue to disrupt projects even after they go in service.

Michigan AG Targets Line 5 With New Strategy. Last week, a Michigan judge allowed Enbridge to resume pumping oil through its Line 5 pipeline following a brief shutdown after damage to a structure anchoring part of the line running through a Great Lakes channel. Despite this victory, state Attorney General Dana Nessel has adopted a new strategy against the pipeline: revoking a seven-decade old easement for the 540,000 barrel-per-day pipeline by “wrest[ing] questions about the safety of pipeline from the federal Pipeline and Hazardous Materials Safety Administration [PHMSA].” While Enbridge’s attorneys note, “Unlike the Attorney General, PHMSA has the expertise necessary” to determine the pipeline’s safety, Nessel’s office hopes the easement will be viewed as a private contract that does not need PHMSA’s input. As well-known pipeline activist Jane Kleeb noted to Politico, Nessel’s “strategy could create leverage for state governments against pipeline projects in the permitting process and already completed.”

But Hope Springs From Omaha… Despite these setbacks to the industry, earlier this week, Berkshire Hathaway announced that it will buy Dominion Energy’s gas pipeline network, giving Berkshire control of 18 percent of natural gas pipelines across the US. It was Warren Buffett’s first major purchase since the onset of the pandemic, making this move a significant indication that he believes natural gas has a long-term future despite activist cries to the contrary.

… And The Supreme Court’s Permit 12 Decision: In an April court case challenging the Keystone XL pipeline’s permitting, the U.S. District Court for Montana decided the U.S. Army Corp of Engineers (the Corps) wrongly issued the Nationwide Permit 12 (NWP 12). NWP 12 is an important permit because it is used to authorize “the construction, maintenance, repair and removal of utility lines and associated facilities in waters of the United States, provided the activity does not result in the loss of greater than 1/2-acre of waters of the United States.” When the Corps issued NWP12, it estimated that it would be used for “11,500 projects per year,” making it a crucial permit relied on by numerous developers. Earlier this week, the U.S. Supreme Court overruled the lower court and reinstated the permit. Although the Supreme Court’s decision did not renew the use of the permit for Keystone XL, the ruling is positive news for the oil and gas industry across the country.

Getting projects built has gotten harder because the opposition has become more strategic, and more prepared to take their fights to the courts.

NIMBY Has Become NIABY (Not In Anyone’s Back Yard). Today’s activists are mobile – willing and able to go wherever they need to fight energy infrastructure, and are taking their well-funded guerilla warfare across the globe. Canadian activist Ocean Hyland is symbolic of the young people driving the anti-pipeline movement, traveling from protect actions against the Trans Mountain Pipeline in British Columbia to a London protest against Barclay’s bank funding of pipelines. Likewise, numerous activists flooded into North Dakota from across the country during the 2016-2017 protests against the Dakota Access Pipeline.

Professionalized, Digitized, and Strategic. Today’s next generation activists have more professional backing and support, know how to leverage digital tools to spread their messages far and away, and strategically target projects and companies. In addition, groups like Extinction Rebellion and 350.org are far more willing to use disruptive tactics than the more tradition  environmental groups and are willing to wait out a project as long as needed to outlast developers.

Lawyered Up With Billionaire Backing. Just one example of the professionalization of protesting are efforts by well-funded environmentalist groups like the Environmental Defense Fund to back local environmentalists with expert attorneys dedicated solely to their cause. Another such organization, Earth Justice, employs 148 lawyers at 14 regional offices who are in the midst of 661 active legal proceedings on behalf of environmental interests. Aspiring lawyers wishing to pursue the environmental activism track have plenty of resources at their disposal as well, such as the NYU State Energy & Environmental Impact Center, which uses funding from Bloomberg Philanthropies to “provide legal, analytical, and communications support to state attorneys general offices across the country.” The Center even pays the salaries for law fellows placed in AG offices across the country. These groups ensure activists have the resources to continue fighting for years with sophisticated legal arguments as essential infrastructure remains mired in courtrooms and project costs balloon.

To succeed, energy companies must understand and engage each community – before the opposition mounts.

Understand the Landscape and Act Quickly to Engage The Right Stakeholders: In order to move forward with important projects, energy companies must understand the landscape of each community and mobilize long before their opponents can. This involves listening not only to the concerns of local leaders and residents but also tracking the tactics commonly used by opponents in similar situations. Companies and coalitions simply cannot wait until these professional activists have already influenced the communities they need to convince to support their project.

Define Your Own Brand: Companies must be in the communities they operate in before their opposition shows up. Companies need to tell their story and be constantly engaging with communities before they can be defined by those opposed to them, because as the old political adage says, “if you’re explaining, you’re losing.” Today, infrastructure builders have to consider their brand, and introduce it on their terms in a way that was not necessary in decades past. If a company is able to tell their story early and often, and secure a community’s trust, they can better control the narrative when the activists arrive.

Staying Prepared and Alert: In recent years, online interconnectivity has created a support network that allowed environmental activists to instruct and fund each other, organizing from the smallest towns to the biggest cities. As a result, each energy project faces unique opposition from opponents who both live locally and collaborate nationally. This new reality means energy companies must be prepared to adapt to localized fights that are informed by national tactics and funded by outside interests. A competitive intelligence advantage from Delve can help companies and coalitions understand the landscape of each individual fight, arming them with the information necessary to get projects built.

 

Trends In Energy: Mid-Year Update Part 1

At the start of 2020, Delve analysts identified six trends in energy infrastructure to watch over the year. While 2020 has brought unexpected challenges that no one anticipated, as we look back at those key trends six months later, it is clear that although some of these trends have accelerated and shifted, the challenges for the industry still ring true in this “new normal.” This month and next, we will explore COVID-19 and its impact on the industry and policy debate across these key trends.


1. The Rise In Nationally-Backed But Locally Coordinated Activism In Traditionally Fossil Fuel-Friendly Jurisdictions Along The Gulf Coast Against Both Midstream and Downstream Infrastructure Projects Continues Unabated By Pandemic Or Other Shifts In Public Debates.

At the beginning of the year, based on analysis of 2019 data, it was clear that activism targeting both midstream and downstream infrastructure projects in traditionally fossil-fuel friendly Texas and Louisiana was likely to increase in 2020. Through the first half of the year, that trend has continued unabated by the COVID-19 or other social unrest. Activists dedicated to the cause remain dedicated to the cause, and have found creative ways to continue their efforts against the industry.

In Texas, the Save RGV (Rio Grande Valley) from LNG coalition, which includes local Texan groups as well as national and international organizations such as the Sierra Club, Rainforest Action Network, and even Friends of the Earth France, has continued its efforts against  proposed LNG terminals in the state and associated pipeline projects. Last year, Save RGV from LNG wrote a report warning banks and investors of the reputational risks associated with investing in LNG projects in the Rio Grande Valley, and proudly proclaimed that pressure from activists convinced international bank BNP Paribas to divest from Texas LNG. The Sierra Club and other activists also asked the Federal Energy Regulatory Commission (FERC) to reconsider permitting approvals for some of the projects. This year, the Sierra Club joined local groups in filing lawsuits challenging permits issued by FERC. Activists in Texas are also receiving technical support from groups like the Environmental Defense Fund (EDF), which in April released a study with Harvard University, Georgia Tech and the SRON Netherlands Institute that claimed oil and gas operations in the Permian Basin “are releasing methane at twice the average rate found in previous studies of 11 other major U.S. oil and gas regions.”

In Louisiana, after failing to stop the Bayou Bridge Pipeline, activists last year shifted their focus to the state’s petrochemical industry, resurrecting the “Cancer Alley” rallying cry of decades past. Now they have seized on the COVID-19 pandemic to get their message out. Following the release of an early study from Harvard University linking air quality and the Coronavirus pandemic, activists in the state modified the “Cancer Alley” moniker to “Coronavirus Alley,” with national groups like the Sierra Club promoting the label. Activists have continued to promote the study, despite concerns raised over the studies lack of a peer review. In April of this year, Congressman Cedric Richmond responded to a letter from the Coalition Against Death Alley, an activist coalition opposing the state’s petrochemical industry, stating he had called on Congress to establish a select committee to investigate disparities linked to COVID-19 health outcomes, and stated he is working on legislation to provide “protection and direct funding for communities around facilities.”

Despite the pandemic causing lockdowns in large parts of the country, on the ground activism against the  petrochemical industry the state has not slowed; in many cases activists have simply been more creative about organizing. In April, the Louisiana Bucket Brigade, an organization opposed to the state’s petrochemical industry, hosted a socially distant protest in front of a facility. The organization livestreamed the event on Facebook to supporters who chose not to attend, highlighting these organizations’ ability to blend social media with on-the-ground activism. Activists have also gathered together to hand out facemasks and Mother’s Day lunches accompanied by protest yard signs to raise awareness of their opposition efforts. Similarly, across the country, activists have used in-car protests as a means to shut down traffic and bring attention to their causes. In addition to the continuing on the ground activism taking place, groups like the Sunrise Movement have created activism schools to help students learn how to “take action online and in-person while social distancing.” As the pandemic and societal unrest continues to influence the ongoing conversation in the country, activism is traditionally fossil fuel states continues, and in many cases does so more creatively in order to seize the moment.

2. Energy Activists Continue To Target The Last Mile For Natural Gas, But The Pandemic Has Broadened And Accelerated Activist Pressures On Utilities.

In 2019, “keep it in the ground,” and “stop the pipelines” efforts were joined by a new strategy to target end-users of natural gas by pushing for bans or other electrification initiatives at the municipal or state level to address “building emissions.” In July 2019, Berkeley, California became the first city to ban natural gas and started a nationwide trend. Since then, 30 cities in California have committed to going gas-free, and across the county the movement is picking up steam. In New York City, Mayor Bill De Blasio announced in February he would work with the city council to develop legislation prohibiting the use of natural gas and fuel oil in large buildings. Even in fossil fuel-producing states like Colorado have joined the effort. The city of Boulder is providing incentives for building electrification, and has instituted a mandate that new or reconstructed houses larger than 5,000 square feet be net-zero. Boulder’s “Energy manager for climate initiatives” claimed that “in 2020, our goal will be to lower the net-zero requirement to 3,000 square feet.”

Recently Rob Jackson, a professor at Stanford University who leads the Global Carbon Project said that “dozens for sure, likely hundreds” of jurisdictions would pass gas bans and pro-electric legislation this year. These efforts have been coordinated by national environmental organizations like The Rocky Mountain Institute, The Sierra Club, Physicians for Social Responsibility, and Mothers Out Front, who earlier this year published a new study on “health and air quality impacts and solutions” regarding gas stoves. Activists can be expected to connect such indoor air quality claims with concerns over respiratory infectious diseases like Coronavirus, as they are already expressing worry over the increased exposure due to lockdowns.

As the COVID-19 pandemic set off lockdowns across the country, activists have seized on utility shutoffs and public power as another opportunity to further their demands for green energy. Activists have begun to claim energy is a human right and bring scrutiny to bear on how utilities are treating customers impacted by the pandemic and ensuing lockdowns. Groups like the Energy and Policy Institute are maintaining a live tracker of utilities that have and have not suspended disconnects and advocacy groups across the county pushing Congress and state officials for a moratorium on shut-offs for low-income consumers.

While many of these calls have been matched by utilities taking responsible steps to provide forbearance and good will, that may not be sustainable as the economic challenges of the lockdowns continue, and a number of policymakers are listening to the activists. Activists are leveraging their claim of energy as a human right to call for “power for the people,” accelerating an already existing push for municipalizing electric utilities across the country. These municipalization efforts have frequently been led by progressive groups like the Democratic Socialists of America, and almost always, these cries for public power are framed as necessary to attain their aggressive renewable energy goals.

3. While 2020 May Not Be The Climate Change Election Democrats Were Hoping For, The Election Is Pointing A Spotlight At Environmental Justice As The Politics Of Climate Change Works Its Way Into The COVID-19 Debate.

Just five months ago, it seemed all but certain that the 2020 presidential campaign would dominate the news cycle through the November election. While “energy dominance” has brought positive policy opportunities for the industry, it has also furthered more aggressive opposition. In that vein, Democrats had hoped to make 2020 the climate change election. Though of course a number of other issues have, at least temporarily, refocused former Vice President Joe Biden’s and President Donald Trump’s campaigns, environmental activists and some of Joe Biden’s former primary competitors have continued to apply pressure to the Democratic nominee on environmental issues even as the pandemic took center stage. At a March debate, after taking jabs from Senator Bernie Sanders, Biden muttered “no new fracking” without additional context. The Biden campaign later attempted to walk back the comment, telling reporters after the debate that he was restating his existing policy pledge to block new oil and gas drilling on public lands. Since becoming the presumptive nominee, however, Biden has signaled a willingness to use “unfettered discretion” to reject infrastructure projects, and “hold polluters accountable for the damage they’ve caused.”

While Biden has tried to appear moderate on energy issues to appeal to rust belt voters, those helping him develop his policy positions and prepare for a potential administration do not match that perception. Biden has assembled what one environmental consultant has called the “Climate Dream Team for Democrats,” a Climate Task Force whose co-chairs include U.S. Rep. Alexandria Ocasio-Cortez (D-NY), the sponsor of Green New Deal legislation, and former Secretary of State John Kerry, an architect of the Paris Climate Accord. In addition, Biden added Sunrise Movement co-founder Varshini Prakash to his climate team. The people helping to drive policy in a campaign are often the same people ending up in the Administration, and in any administration, people are policy.

The climate change debate has also found its way into the presidential politics of pubic health in the age of COVID-19. On the Biden campaign website, a page devoted to the candidate’s plans to fight COVID-19 states the need to “fight climate change as a driver of health threats,” with the candidate claiming, “The link between climate change and health security is well-documented and will create a growing threat to Americans. A Biden Administration will recommit the United States to the Paris Agreement on day one and lead an effort to get every major country to ramp up the ambition of their domestic climate targets.”

While climate change may not be the headline wedge issue in the current campaign debate, if COVID-19 subsides in the fall, climate change could return to the forefront. Even if it does not, expect Democrats to weave climate change and related issues – air quality, water quality, and environmental justice – into the campaign discussion around public health and beyond. Industry will need proactive responses to this debate without become partisan.


As trends in energy infrastructure continue to evolve in response to the COVID-19 pandemic, the 2020  election, and other shifts in public debate, activism has shifted. Much of this shift has been led by a next generation, disruptive energy activism, pushing policy and regulatory pressures to the state and local levels and to the financial industry. Next month we will explore how COVID and societal unrest has accelerated and impacted the push to fight energy infrastructure at the local level and how today’s energy activists include a broad range of groups that might not have previously engaged in energy infrastructure fights.

It’s Not Easy Being Green

Here’s what you need to know…

For decades, alternative energy resources had been criticized as impractical and costly. That’s all changed. Major scientific improvements have driven down the costs and expanded access to renewable energy resources, which should be a cause for celebration by consumers, policymakers, and environmentalists. Yet the industry’s growth has been met with opposition that is all too familiar to traditional energy companies.

As renewables’ share of the energy market has grown, so, too, have their risks and challenges. In recent months, they haven’t been immune to widespread job losses plaguing the energy sector, while in the past several years the same activists who once advocated vociferously for more renewables now frequently mobilize opposition to the kind of utility-scale renewable projects necessary to meet the activists’ net zero carbon demands. Even as the economy recovers from the pandemic and power demand returns, legal and regulatory hurdles to getting renewable projects built will persist.

Here’s what public affairs professionals representing these companies need to know to prepare for these policy, regulatory, and reputational challenges.

The renewable industry is hurting, but federal help may be on the way.

Pandemic Pains: In March and April 2020, the renewable energy industry lost nearly 600,000 jobs. The collapse of the worldwide energy market in the midst of a global pandemic shutting down the world economy meant that vital construction projects were put on hold or cancelled all-together, leaving experts worried that upwards of 850,000 jobs renewable energy jobs could be gone by the end of June. According to a BW Research report released in mid-May, the overall damage to the energy workforce is already 1.3 million, with renewable energy accounting for nearly half of all job losses. To make matters worse, BW Research anticipates that the trouble isn’t over, and there could be nearly half a million more layoffs across the sector still to come.

Congressional Democrats Want Money for Green Energy: A longtime ally of the green energy lobby, Congressional Democrats say that after three stimulus packages without aid for renewables, the next relief legislation should include subsidies for renewable energy. According to Rep. Paul Tonko (D-NY) and Rep. Dan Kildee (D-Mich.), this support will take the form of new and extended energy tax credits. Sens. Bernie Sanders (D-Vt.), Elizabeth Warren (D-Mass.), Amy Klobuchar (D-Minn.), and Kamala Harris (D-Calif.) have all indicated support for a similar measure in the Senate.

Trump Administration Removing Barriers: On the executive side, President Donald Trump is clearing barriers to important energy construction projects, a move that benefits renewable energy as much as it does traditional energy. In a recent executive order, The White House allowed federal agencies to, according to Energy & Environment Leader, “waive environmental reviews for approval of major energy construction projects required by the National Environmental Protection Act (NEPA).” In an op-ed, Energy Fairness Executive Director Paul Griffin said that these NEPA reforms are a “winning move not just for industry and jobs, but for integrating renewables into the grid and ensuring that affordable and reliable energy is available when customers need it.” Meanwhile, the Trump Administration has helped wind and solar projects delayed by the pandemic by giving them more time to qualify for federal tax credits, permitting organizations whose projects began in 2016 or 2017 to have until the end of 2021 to bring their projects online. Yet it is these very reforms that could aid renewable energy that highlight the longer-term challenge facing the industry.

Now that renewables are growing up, support is shifting to scrutiny.

NEPA So Fast: There is a growing bipartisan chorus of policymakers frustrated that the approval time for constructing new energy projects is too long. “We have to do it faster. It currently takes five to 10 years to begin constructing a new energy project,” Gov. Andrew Cuomo (D-NY) has said. “You can’t have the goals we have and then have a system of bureaucracy that takes five to 10 years to start a new energy project. It just does not work.”

In efforts to remove barriers to doing business, earlier this year the Trump Administration proposed expediting the environmental impact statement process required for approval of critical energy infrastructure projects. These reforms to NEPA benefit the energy sector broadly, and green energy projects are among those who will see shorter wait times for approvals. This proposal is good news for those seeking more alternative energy options. However, some environmental activists are angry that these changes would help fossil fuel energy projects as well, so they are gearing up to fight this reform effort, even though the status quo is an antiquated, burdensome process that slows the construction of all energy projects, even the ones they ostensibly support.   

Against the Wind: Environmentalists have long called for replacing fossil fuels with renewable resources, but building the infrastructure necessary to achieve green energy goals is often met with opposition by the very activists and policymakers who voice support for their use. For example, Sen. Sheldon Whitehouse (D-RI) has, according to E&E News, “emerged as a leading critic of Vineyard Wind, an 84-turbine offshore wind project proposed in federal waters 15 miles south of Martha’s Vineyard. Whitehouse has questioned the federal government’s review of the project, the first large-scale development of its kind in the United States, and criticized Vineyard Wind for failing to adequately consult fishermen.”

E&E points out that his opposition is emblematic of larger issues facing the green energy movement as it pushes for deep emission reductions, with lawmakers, activists, and the fishing community worrying about offshore wind’s “impacts on the marine ecosystem and [the fishing] industry.” While the Trump Administration’s Bureau of Ocean Energy Management took steps this week to move Vineyard Wind forward after a yearlong delay, some environmentalists say they are preparing to issue additional comments on the project’s supplemental environmental impact statement in hopes of influencing the approval process. It is likely that any comments they make are intended as markers for future litigation if the final environmental impact statement does not meet their demands, which means their delay strategy could keep this project in limbo for years to come.

Concerns about potential threats to wildlife continue to mount off and on shore, with activists and lawmakers sounding the alarm about the risks of wind energy construction to endangered species. “Environmentalists, including the Natural Resources Defense Council, have outlined a suite of measures necessary to protect the endangered North American right whale, which migrates through planned offshore wind fields,” Bloomberg Businessweek reports. “And lawmakers in Congress recently advanced proposals to block wind projects in coastal transportation corridors that threaten to intrude on existing leases and mandate yearlong U.S. Department of Defense studies of how offshore wind could affect military sonar.” Meanwhile, onshore wind also faces ongoing criticism for the dangers it poses to birds, including endangered species, as well as the noise it can impose on residential communities.

Throwing Shade at the Sun: The Gemini Project, the largest U.S. solar power plant to date, is slated to be built on public land, and environmentalists are already expressing concern that its construction could endanger “hundreds of desert tortoises, a species that is fighting back from near extinction.” Some heavy-hitting environmental and conservation groups, including the Sierra Club and the National Parks Conservation Association, sent a letter to the Bureau of Land Management decrying the danger to animals, saying, “There is no justification for this project that outweighs the importance of the desert tortoise, its habitat and BLM’s obligations to use its full authority to take actions that will contribute to the recovery of this threatened species.” Opponents argue that “rooftop solar systems spread across Las Vegas and solar power plants on degraded lands” is their preferred option to building a massive array in the desert. However, such distributed alternatives are unlikely to generate as much power as Gemini and could overtax and complicate the electric transmission grid.

New Scrutiny from Unexpected Sources: Prominent progressive activists, long seen as allies of the environmental activism community, are now raising questions about how green energy is sourced, ironically echoing concerns raised by conservatives for some time.These activists includefilmmaker and progressive provocateur Michael Moore, who is out with a new documentary, “Planet of the Humans,” which according to The Guardian, “weaves a disjointed narrative that renewable energy is just as bad as fossil fuels, high-profile environmentalists are corrupted by capitalism, and population growth is the unspoken enemy.” Moore’s 102-minute documentary directs much of its criticism at solar and wind companies, arguing that they’re inefficient in delivering energy because varying amounts of materials, energy, and metals are necessary to construct them. The documentary underscores a common refrain among conservationists and green energy skeptics alike: the extraction and production of materials can have negative environmental consequences, especially given the importance of battery-driven storage to address renewables’ intermittency.

Advancing the clean energy revolution amidst vocal opposition.

A Variety of Resources is Still Essential: While renewable energy is indeed on the rise, it is extremely unlikely, if not impossible, that Americans will abandon traditional sources all-together for decades to come. Fossil fuels have long been and will continue to be a vital source for fuel and energy well into the future. As Brookings Institute fellow Samantha Gross notes, “We haven’t found a good substitute for oil, in terms of its availability and fitness for purpose. … The same is also largely true for natural gas.” Vox agrees with this analysis, arguing, “Whereas fossil fuel power plants can be turned up or down to meet demand … the big sources of renewable energy — sun, wind, and water (hydropower) — cannot. They come and go on nature’s schedule. Sun disappears each night and on cloudy days. Wind and precipitation vary daily and seasonally. All three show longer-term variations over years and decades.”

That means renewables are just one part of a comprehensive American energy plan, and activists must accept that it will take a balancing act with a variety of resources to expand energy access in ways that are accessible for people and healthy for the planet. Yet, thus far, these activists have a track record of limiting what types of clean energy sources are acceptable – be it carbon-free nuclear energy, clean burning natural gas, or abundant and reliable hydropower – rather than embracing balance.

Companies Must Be Prepared to Prevail. Thanks to greater affordability and access, the renewable energy industry now plays an important role in America’s energy future. That means public affairs professionals representing these companies must be prepared to face the same risks and challenges that traditional energy has for some time. Chief among these is a savvy coalition of environmental activists who have developed a multifront strategy to combat their opponents with public pressure, the regulatory process, and the courts. They have honed these tactics in their decades-long battle against fossil fuels, and now they have turned their attention to alternative energy providers.

As a result, renewable energy companies must be ready to make their case to lawmakers that they’re integral to creating a balanced, comprehensive energy plan for the country. They must also be skilled enough to navigate their projects through ever-changing approvals, permitting, and construction processes amid increasingly savvy opposition. Delve knows the best practices for doing so, and we’re here to help.

Major chemical manufacturer facing an onslaught of activists

Challenge

For companies with multiple product lines, retail outlets, and business partners, knowing your network is vital. Facing a network of opposition, a major chemical manufacturer needed to identify and monitor the actors related to their issue set.

Solution

To understand and anticipate actions from within this network, we built a monitoring platform that serves as an “early warning system” for events, actions, and tactics that may be used against the interests of the manufacturer and other stakeholders. The anticipatory model was built using thorough background research we conducted on the frontline and behind-the-scenes activists and organizations, scientists, foundations, lobbyists/lawyers, and public relations consultants that make up this network of opposition.

The research started with a list of 21 groups to be examined which led us to an additional 15 groups that were assessed in a second wave of reports. This information was then used to produce an overview report providing the taxonomy of the network, its scope of influence, interactions between and among the various groups, and the inferred strategy and observed tactics utilized by the activists and organizations within. With the network mapped out, we created a monitoring platform to watch the network in action and report on its efforts and activities on a weekly basis.

Results

Through our ongoing monitoring, we were able to identify items of an urgent nature, such as when hackers used the March Against Monsanto to breach several chemical companies’ email servers, and send out timely alerts. We enabled this chemical manufacturer to be proactive rather than simply reactive to the actions of their opponents.

The Transformation of Activism

Here’s what you need to know…

Coronavirus has changed a lot about the way we live our lives. What hasn’t changed is the desire to organize ourselves to advocate for the things that matter to us.

While you may think coronavirus has quashed traditional in-person protests and picket lines, activists are still making their cases for their causes online or in person with creative social distancing. Their campaigns, whether six feet apart or virtual, are as vociferous as ever, rallying their troops, many of whom, thanks to widespread lockdowns, have found themselves with more time on their hands than ever. Unfortunately, some are spending that bountiful time disseminating message-tested tropes and unfounded conspiracy theories, often aimed at destroying their targets at a time when organizations and industries feel most vulnerable due to the global pandemic and the economic destruction it has wrought.

The team of analysts here at Delve are monitoring many of these efforts every day, and we are seeing key strategies, themes, and messages emerge as activism in the new normal takes shape – all of which will have consequences for companies and industries navigating toward recovery. Here are some ways that activists have exploited the coronavirus, adapted their tactics in pursuit of their agenda, and recalibrated for the fights that lie ahead.

Activists haven’t stopped advocating, they’ve just gotten creative…

  • Earth Day Goes Online: Environmental activists had long relied upon large-scale demonstrations boosted by star power and grants from big foundation to draw attention to their cause. With Earth Day gatherings canceled due to coronavirus lockdowns, activists were forced to turn to online alternatives like digital presentations, film screenings, and “teach-ins.” They coordinated social media messaging, urging fans to share digital posters and collaborate virtually to “demand #climateaction,” while celebrities like Joaquim Phoenix and Mark Ruffalo lectured the world on video chat panels. Predictably, the media fawned over their campaign and its ability to adapt to coronavirus lockdowns. However, supporters lamented that 2020 Earth Day celebrations, which were meant to organize hundreds of thousands of protesters in honor of the movement’s 50th anniversary, attracted less interest in the midst of the pandemic.
     
  • Virtual Campaigning and Campaign Schools: While many of us are on lockdown, campaigning continues from inside the house. The Verge reports that activists are once again embracing the long-dreaded phone banking system of outreach to complement their online efforts to elect their preferred candidates and promote their favorite causes. Meanwhile, virtual rallies are being held to “fix our health system,” targeting Secretary of Health and Human Services Alex Azar to “demand tests and immediate production of ventilators and universal access to healthcare” through “Twitter live protesting” and speeches from activists. Over at the Sunrise School, the online activity academy of the environmentalist organization Sunrise Movement, activists are “seizing this moment to become the leaders [the green energy movement] needs,” hosting online courses to “build connections with other young people who are freaked out about climate change, the coronavirus, and the state of our world” and teaching activists how to confront “crises gripping our society.”
     
  • Social Distancing for a Cause: Even as most activism has moved online, Americans have gotten creative about how they can express themselves without breaking social distancing regulations. In Pennsylvania, criminal justice advocates held a “drive-by-protest” to demand a mass release of inmates, while their Mississippi counterparts held a “Care-a-Van” in Jackson.  Angry Michiganders attracted international media attention when they descended upon Lansing to plea with the Democratic governor to ease what they felt was a draconian stay-at-home order. The Louisiana Bucket Brigade, which opposes the state’s petrochemical industry, hosted a socially distant protest in front of a Denka/DuPont facility they livestreamed on Facebook and held its “Stop the Money Pipeline” demonstration standing six feet apart in COVID-19 hotspot of New Orleans.
     
  • The New Advocacy Frontier: Video Games There is already evidence that these changes are not just temporary solutions for this unusual period of time. Newsweek reports that beyond social media, activists are now looking at less traditional platforms, like gaming, as sustainable, permanent organizing tools. They point out that Hong Kong’s freedom-fighting efforts, which had been all-but-eliminated due to China’s public health catastrophe, had moved to Nintendo, where advocates used the game “Animal Crossing: New Horizons” to speak freely without the communist party’s censorship.

… And they are using COVID-19 as an opportunity to promote their long-term policy goals.

  • Never Let a Crisis Go to Waste: Progressive activists have apparently learned from Rahm Emanuel’s famous quote and Majority Whip Jim Clyburn’s (D-SC) call to revive it: now is the time for big change. In POLITICO Magazine, senior writer Michael Grunwald argues that while it is “horrible” the economy has collapsed due to the coronavirus, there is value in how it has shown that human beings’ day-to-day living – eating beef, flying in airplanes, driving to work – can harm the Earth. Greta Thunberg, who commands an army of young activists and who enjoys legitimacy from admiring world leaders and celebrities, says the shutdowns prove that when science calls for it, we can make major lifestyle changes – like those required for her green agenda. Meanwhile, social justice activists claims the virus proves the dangers of income inequality and racial disparities. UNAIDS, meant to eliminate “AIDS as a public health threat by 2030” as a part of the United Nations’ Sustainable Development Goals, is demanding an “increase in health spending and social protection” become an “essential part of the economic response to COVID-19,” claiming the pandemic’s consequences are the “man-made” impacts of “extreme inequality that is hardwired into our global economy.”
     
  • ‘Keep It In The Ground’ Becomes ‘Put Them In The Ground’: Green activists are pushing for stimulus bills to provide financial backing for their preferred products while pressuring policymakers to divest from fossil fuels. 350.org founder Bill McKibben writes in The New Yorker that lawmakers should use coronavirus as an excuse to “distance ourselves” from fossil fuels all together, arguing they must do so immediately to take advantage of the crisis to achieve lasting policy changes. He points to Congress passing financial relief bills as the perfect opportunity to use “corporate bailouts to advance green energy.” Activists in academia agree, with Ivy League students and boards of trustees candidates demanding divestment from fossil fuels, as others muse about a potential government takeover of the oil industry and “wind down their operations.”
     
  • Criminal Justice Reform as Public Health Concern: Bipartisan criminal justice reform proponents claim the highly virulent COVID-19 shows just how dangerous overcrowding in prisons can be. Josh Spickler of Right on Crime, a national initiative affiliated with the free market-oriented Texas Public Policy Foundation, told The Tennessean that coronavirus brought about the “hyper-acceleration” of long-term policy goals, as lawmakers across the country released inmates due to fears of infection spread. If they can demonstrate that released inmates posed few or no problems to society, they may be able to bolster their case for future systemic reforms. Meanwhile, the American Civil Liberties Union has demanded prisoner releases from prisons in several jurisdictions the group has long fought against to protect inmates from the disease.
     
  • Punishing or Rewarding Corporate Behavior: As Morgan Stanley’s Head of Sustainability Research warns, “Corporate behavior in a time of crisis … can have lasting implications, both positive and negative … These factors can be linked to long-term performance and returns.” Activists are building on their success connecting such environmental, social, and governance (ESG) factors with market expectations and ramping up efforts to hold corporations responsible for the way they (are perceived to) conduct business in the current crisis. A new study by Nuveen anticipates an uptick in ESG scrutiny by protestors, the media, and investors, and we are already seeing evidence of such pressures. In the health care sector, for example, British activists want the government to guarantee that “any COVID-19 medicines or technologies created with public funds are available to all, patent-free,” while in America, activists are tracking which utility companies suspend customers’ service over unpaid bills. Companies need to consider their risks from this scrutiny, but also the opportunities. A recent Harvard Business Review article details ways they can turn their talk of “social purpose and … values” into action during the COVID-19 crisis, noting the effects of how well they do so will be felt long after the pandemic concludes.

So be prepared to defend your brand and reputation.

Coronavirus might have caused activism to change, but it certainly hasn’t stopped it. In spite of the realignments necessary to successfully employ new tactics, activism has in some ways intensified, in large part due to an abundance of time and energy on the part of those who might otherwise by occupied by work or social engagements.

Corporations and industries must not mistake social distancing as a lack of disturbance for their industries. Instead, they must be prepared to confront new forms of activism that brings consequences with staying power. If you need help understanding the challenges, we are happy to chat.