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MAJOR HAPPENINGS IN CALIFORNIA: Governor Gavin Newsom and Democrats have undertaken three major changes and reversals this summer to protect California’s grid and stave off drought.

ONE – DIABLO CANYON: Most notable, of course, is Newsom’s proposal to extend the life of Diablo Canyon, the state’s last remaining nuclear power plant, through 2035.

Newsom as lieutenant governor had backed an effort to shutter the facility, but now seeks a reprieve for it in acknowledgement of the perilous situation California is currently facing as it struggles to keep lights on and protect against future blackouts.

Even some former opponents favor keeping Diablo online as the alternative to fossil fuels in the near-term. The abrupt closure of San Onofre, or SONGS, in 2012 forced reliance on natural gas and led to rising costs and soaring carbon emissions – the equivalent of adding 2 million additional gas-powered cars to the road in the following year, according to a 2016 study published in the American Economic Journal.

Closing Diablo in 2025 as previously planned “would probably increase the likelihood of relying on fossil fuel plants,” Andrew Campbell, the executive director of the Berkeley Haas Energy Institute, told Breanne.

TWO – THE REVISED DELTA CONVEYANCE PROJECT: Last month, California lawmakers dusted off plans to revive a scaled-down version of the Delta Conveyance Project—a 45-mile tunnel that would funnel water from the Sacramento River to Southern California in an effort to ensure viable water supply across the state.

Supporters say it’s a critical way to fill fast-depleting reservoirs and groundwater storage banks in Southern California, especially during periods of drought. They’ve also praised Newsom’s decision to scale down the Delta to just one tunnel instead of two, as proposed by his predecessor, Jerry Brown.

The revised plan “clearly shows that the project has been downsized, refined and redesigned to avoid and reduce local impacts and address environmental concerns,” said Jennifer Pierre, the general manager of the State Water Contractors association.

Opponents argue that the project risks drawing freshwater away from the Delta, and could further endanger local fish species, such as the Delta smelt, winter-run chinook salmon, and steelhead trout. It would also require between 1,500 and 3,000 acres of wetland to be restored to offset environmental damage.

Its construction would also require the removal of 71 buildings, including 15 homes and conversion of roughly 2,340 acres of farmland deemed to be of “statewide importance.”

THREE – THE BUDGET BILL’S ENERGY TRAILER: The step that has provoked the most ire is perhaps the energy trailer passed in June as part of California’s budget legislation that grants the Department of Water Resources authority to construct or revive fossil fuel-powered plants in the event of a supply emergency, and to reimburse utilities for purchasing additional power, including power provided by diesel generators or aging, gas-fired plants.

Environmental groups and some Democrats voiced opposition to the energy trailer, which they described as a massive shift that happened behind closed doors.

And while Newsom stressed that the bill “does not facilitate the renewal or extension of any permit for expiring power plants,” opponents noted that California has already delayed many of plant closures by three years—making this the latest in a string of decisions frustrating its climate goals.

California Environmental Voters’ political director Mike Young said the provision just “kicks the can down the road in the climate fight.”

Others saw it a bit differently: “It’s a lousy bill,” Hayward Democratic Assemblyman Bill Quirk also told the outlet in response, “but it’s the best hope we have for keeping the lights on.”

Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Jeremy Beaman (@jeremywbeaman) and Breanne Deppisch (@breanne_dep). Email [email protected] or [email protected] for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.

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JUDGE HANDS DOWN FRESH INJUNCTION AGAINST LEASING PAUSE: District Judge Terry Doughty issued a new, permanent injunction late yesterday against the Biden administration’s pause on federal new oil and gas leasing after the Fifth Circuit Court of Appeals vacated and remanded Doughty’s preliminary injunction on Wednesday.

The injunction covers the 13 plaintiff states that sued the administration over Biden’s Jan. 27, 2021, direction to pause all new leasing pending a review of the leasing programs.

Hooked on semantics: The Fifth Circuit ruled that Doughty preliminary injunction, which had enjoined the government “from implementing the Pause of new oil and natural gas leases on public lands or in offshore waters,” failed to adequately define the word “pause.”

Doughty addressed this deficiency by enjoining the government from "implementing a stop" on leasing on federal lands and in federal waters.

The Mineral Leasing Act’s requirements that sales be held "where eligible lands are available" and "at least quarterly,” as well as the Outer Continental Shelf Lands Act requirement for offshore acreage to be made available for expeditious development, mean there can be no legal stop to leasing as ordered by Biden, Doughty said.

“The discretion to stop the lease process for eligible lands is not within the discretion of the agencies by law under either the OCSLA or the MLA,” the order said.

The Biden administration has argued that it has such discretion, while it has performed lease sales in compliance with Doughty’s original preliminary injunction, which he handed down in June of 2021.

Environmental groups have urged the Biden administration to exercise its discretion more aggressively and are foreshadowing new legal battles over the leasing provisions in the Inflation Reduction Act.

Checking facts: Doughty’s decision does contain a factual error where he is reasoning through whether or not the administration oversaw a complete stop to leasing in violation of law. He said Lease Sale 257, the lone offshore lease sale to be carried out last year, was “the only onshore or offshore lease sale that took place” in the 19 months since Biden ordered the “pause.”

In addition to 257, the Bureau of Land Management carried out onshore lease sales in multiple western states in June.

Kathleen Sgamma, who heads up the Western Energy Alliance (lead plaintiff in a separate suit challenging Biden’s leasing order), insisted the error “doesn’t change the overall point he was making.”

Where lease sales were held since Biden took office, “they only occurred because of [Doughty’s] preliminary injunction and therefore, the government had stopped leasing, not just paused it,” Sgamma told Jeremy.

“Further they have taken no actions to hold further sales, which is why his decision yesterday is very important,” she said.

GREEN ACTIVISTS TAKE PERMITTING FIGHT TO SCHUMER: Green activists are taking the fight over permitting reform to Majority Leader Chuck Schumer’s doorstep.

Some 100 activists protested at Schumer’s Manhattan office yesterday, 10 of whom were arrested for performing a sit-in, according to Food & Water Watch.

Schumer’s agreement with Sen. Joe Manchin provides for “comprehensive” permitting reform which, according to Manchin’s office, would aim to speed up environmental review and permitting of both green energy and fossil fuel projects. Manchin said Biden, Schumer, and House Speaker Nancy Pelosi are all on board.

Green groups have expressed anger over the permitting “side deal,” arguing that it will undercut any benefits to greenhouse gas mitigation enabled by the Democrats’ Inflation Reduction Act.

Schumer “is sacrificing frontline communities and our clean energy future, all to placate a coal baron,” Food & Water Watch Senior New York Organizer Laura Shindell said in a statement after the demonstration yesterday.

House Natural Resources Chairman Raul Grijalva has made his wariness of the permitting deal known, too, saying he wants a standalone vote on permitting rather than for reform legislation to be tacked onto a larger, must-pass bill.

Before the reconciliation bill passed the Senate, Republican Sen. Lindsey Graham also warned Manchin that he couldn’t count on his vote — despite Republicans overwhelming support for faster permitting — and slammed the permitting deal as a “payback scheme.”

LINE 5 SUIT MUST STAY IN FEDERAL COURT: A federal judge rejected Michigan’s request that its lawsuit against Enbridge’s Line 5 pipeline be remanded to state court, ruling yesterday that the case must continue to be litigated in the U.S. District Court for the Western District of Michigan.

The state filed its suit, which seeks to stop operation of the Straits of Mackinac-traversing crude oil and natural gas liquids pipeline, in a county circuit court in July 2019, but Enbridge successfully got the case moved to federal court.

Judge Janet Neff ruled that multiple provisions of federal law, including the Interstate Commerce Clause and the Pipeline Safety Act, are implicated in the case and that it therefore belongs in her court.

The case has caused a diplomatic flare-up with Canada. The pipeline carries product across the U.S.-Canada border, and the Canadian government invoked the dispute resolution provision under the 1977 Pipeline Treaty in response to Michigan’s actions against Line 5.

INTERIOR AWARDS NEW DROUGHT FUNDING: The Interior Department announced yesterday the distribution of $300 million in new funding from the bipartisan infrastructure law for a series of drought resilience projects across the West.

California will receive most of the funding, which will be used for advanced wastewater treatment projects and others that “stretch their current drinking supplies.” Municipalities and water agencies in Hawaii, Idaho, Washington, Utah, and Texas were also awarded funding.

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Calendar

MONDAY | SEPTEMBER 26

The 6th annual, five-day National Clean Energy Week kicks off in Washington, D.C.