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Natural Gas Has a Big Week; 301 Tariffs; COVID Vaccine Mandate

SVP Government Affairs Tim Tarpley
Tim Tarpley, SVP Government Affairs & Counsel

Analysis by Energy Workforce SVP Government Affairs & Counsel Tim Tarpley

After months of uncertainty from the Biden Administration regarding the level of support natural gas should play in the energy transition, we are starting to see a realization by many that natural gas will, in fact, play a major role. Secretary John Kerry, who is responsible for driving much of the messaging on energy for the Administration, led the charge this week with a pro-gas statement during an event hosted by the U.S. Chamber of Commerce in Egypt.

At the event, Secretary Kerry said: “I’m for gas” as a “transitional” energy source; however he did add some significant caveats to the statement. “I hope somebody will come up with the technology that will affordably capture the emissions,” he said, and added that new natural gas infrastructure with investment payoff periods of 30 to 40 years would need “abatement” technology included. This statement appears to be in line with recent guidance from the Administration that natural gas projects could be supported if there was a “carbon abatement” element to the project.

The comments by Secretary Kerry come on the heels of a move by the European Commission to propose tweaking its green finance rules to allow some nuclear and natural gas projects to be called sustainable under its new green investment rules. Specifically, the Commission proposed a variety of compliance options for gas plants if they replace a coal-burning sites and set emissions thresholds from 270 grams of CO2 per kilowatt-hour to 550 grams, as long as the plant switches to clean gases like hydrogen by 2035.

In addition, the investment community has been warming to gas as well, with BlackRock’s Larry Fink releasing his 2022 letter to CEOs and highlighting that oil and natural gas will continue to play an important role in the world’s energy mix and should be investable. Fink specifically highlighted natural gas and its incredible importance as a bridge fuel to lead the energy transition.

All of these events are certainly not happening in a vacuum. The non-partisan Energy Information Administration (EIA) has stated that it expects worldwide energy demand to increase by nearly 50% by 2050, and oil prices in the U.S. are hovering around the mid 80’s with inflation at 40-year highs. It seems policymakers around the world are starting to see that while lowering carbon emissions is very important, it has to been done in a sensible and technology based approach. Natural gas has proven to be one of our best weapons in lowering carbon emissions in the United States, so scaling up its use in conjunction with new renewable technologies can certainly have dramatic carbon-lowering effects without losing American energy independence and keeping the economy rolling.

President Biden Sticks By China 301 Tariffs Despite Pressure from Hill, Business Community

During his press conference last week, President Biden acknowledged he was coming under increasing pressure from business groups, and from those concerned about gaps in the supply chain, to reverse course on the China section 301 tariffs. However, the President made it clear that a quick end was not on the table, saying “we’re not there yet” on being able to lift the tariffs.

A substantial 141 bipartisan House members wrote a letter to the U.S. Trade Representative (USTR) on January 20 calling for improvement and expansion of the 301 tariff exclusion process. “The lapse — and continued absence — of critical exclusions have deepened the challenges for businesses and their workers, hindering efforts to relocate supply chains in sectors ranging from new-energy vehicles to semiconductors by raising the costs of critical inputs, components and machinery.” A companion letter may come soon from the Senate as well.

Many of our Member Companies have asked what the long-term prospects for the continuation of the 301 tariffs will be. While the U.S. relationship with China is fluid and unpredictable, it certainly appears that for now it is a good bet to assume the tariffs will stay in place in the short term. Perhaps, we could see USTR grant additional exclusions to products in which alternative supply chains remain impossible or difficult. However, should the Chinese continue to escalate the situation with Taiwan or make aggressive moves against them or in the South China Sea, we could see a quick expansion of tariffs and sanctions against the country.

OSHA Vaccine EST Officially Withdrawn

As expected on Tuesday, the U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) said it will be withdrawing the vaccination and testing emergency temporary standard (ETS) for businesses with 100 or more employees, according to a statement on the agency’s website. OSHA also said that it plans to move forward with a larger COVID-19 healthcare standard.

While from a practical standpoint this doesn’t change much, given that the ETS was already stayed by the Supreme Court last week, it does indicate that the Administration is officially backing off efforts to push a vaccine mandate on large employers for now. 

If you would like to get involved with the Council’s advocacy efforts or the Government Affairs Committee, contact SVP Government Affairs Tim Tarpley.

Tim Tarpley, SVP Government Affairs & Counsel, analyzes federal policy for the Energy Workforce & Technology Council. Click here to subscribe to the Council’s newsletter, which highlights sector-specific issues, best practices, Council activities and more.


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