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Just In | The Hill 

The 118th Congress begins. Meanwhile, Treasury issues a new guidance on electric vehicle tax credits and the EPA and Army Corps of Engineers finish new water regulations.  

Plus: An interview with Steven Donziger, an activist who rallies against Big Oil in Latin America. 

This is Overnight Energy & Environment, your source for the latest news focused on energy, the environment and beyond. For The Hill, we’re Rachel Frazin and Zack Budryk. Someone forward you this newsletter? Subscribe here. 

Oil reserve bills top initial GOP agenda

The 118th Congress kicked off today, though Republicans remain engaged in a lengthy battle over who will be House Speaker.  

Nevertheless, Rep. Steve Scalise (La.), a key Republican leader, put forward details on which bills Republicans are expected to take up first. Among the 11 initial bills are two related to the Strategic Petroleum Reserve (SPR): 

One would prohibit the release of oil from the reserve without a plan to increase oil and gas production on federal lands 

The other would prohibit the sale of SPR oil to entities owned, controlled or influenced by the Chinese Communist party 

These bills are unlikely to make it past a Democratic-led Senate and White House, but are important opening messages for the GOP.  

Read more about the opening Republican measures here, from The Hill’s Emily Brooks.  

ANOTHER LOOMING REPUBLICAN TARGET: ESG

Republicans are expected to crack down on environmental and socially conscious investing, known as ESG, with themselves now in the House majority this year.

Ok, but what is it? ESG, which stands for environmental, social and governance investing, is a broad term for attempts to invest ethically, and can include actions by the government, investment firms and banks or individuals.  

For example, the Biden administration recently put forward a regulation that enables money managers to consider “the economic effects of climate change” in investments that they oversee. Separately, the Securities and Exchange Commission (SEC) proposed requiring publicly traded companies to disclose how much they contribute to climate change. 

ESG can also include decisions by investment firms, banks or individuals to steer money away from companies whose practices or products they consider unethical or bad for the environment.  

Proponents of ESG see it as a way for people to help themselves do well financially by investing money into companies seen as having a positive impact, or that meet a set of environmental and social standards. 

Republicans argue that ESG could harm the fossil fuel industry, and that the government should not be providing incentives to foster it. The burning of fossil fuels is the main driver of climate change, so entities operating under this philosophy may not put as much money into this industry as they would have otherwise.  

Republicans have also raised concerns that money managers who take these factors into account may do so at the expense of profits for their clients.  

Rep. Patrick McHenry (N.C.), the top Republican on the House Financial Services Committee, told The Hill in a statement that committee Republicans will “work together to conduct appropriate oversight of activist regulators and market participants who have an outsized impact.”  

He specifically called out a proposed SEC regulation that would require companies to disclose their emissions and the risks that climate change poses to their business.   

House GOP lawmakers will have oversight authority through which they can request or in some cases subpoena documents and conduct hearings on a wide range of topics they hope to examine.   

Read more about the anti-ESG push forthcoming here. 

Treasury delays EV tax credit stipulations

The Treasury Department and IRS announced last week that they are delaying restrictions on which electric vehicles can be eligible for tax credits under Democrats’ climate and tax bill, in addition to other policies regarding the tax credit.  

Sen. Joe Manchin (D-W.Va.) slammed the guidance, marking his latest disagreement with the Biden administration.  

The legislation, known as the Inflation Reduction Act, removed caps on how many electric vehicles would be eligible for consumer tax credits, but added new stipulations regarding the manufacturing of and sourcing of minerals for electric vehicle batteries.  

The law says that these stipulations will take effect when the Treasury issues guidance for their implementation, which was supposed to happen “not later than December 31.” 

But the Treasury said on Thursday that the guidance will not be ready until March and that in the meantime it will continue to use prior battery capacity requirements to determine if a vehicle can meet the credits.  

The stipulations in the Inflation Reduction Act were expected to create some new hurdles, requiring that at least 50 percent of the value of the battery components be manufactured or assembled in North America in order to be eligible for a $3,750 credit.  

Another $3,750 credit is available to electric vehicles if 40 percent of the value of the minerals contained in its battery are mined or processed in countries where the U.S. has a free trade agreement. In lieu of being mined or processed in such countries, the minerals could instead be recycled in North America to meet the second requirement.  

Industry stakeholders said that the minerals requirements was expected to be particularly difficult to meet and could hamper electric vehicle adoption in the short term.  

So what does Manchin have to say: Manchin, in a written statement on Thursday, slammed the Treasury’s announcement.  

“The Treasury Department has known since August that they needed to release proposed guidance on the battery material and components of the Clean Vehicle Credit that accurately follows the intent of the IRA by the end of this year. Instead, Treasury decided they will ignore this deadline and issue proposed guidance in March,” he said.  

“In the meantime, they have decided to move forward on implementing these credits without the necessary guidance to ensure taxpayer dollars are being responsibly used. This is an unacceptable outcome and I call on Treasury to pause the implementation of both commercial and new consumer EV tax credits until they have issued the appropriate guidance,” he added.  

Read more about the guidance here.  

Officials publish ‘middle-of-the-road’ water regs 

The Biden administration on Dec. 30, 2022, issued new regulations for the country’s wetlands and waterways. 

The regulations define which waters get federal protections that would require businesses to obtain a permit for activities like construction that could damage water quality — and which do not.  

The water regulations have been contentious, with proponents of strict rules arguing that protections are needed to protect the environment and to prevent pollution. Opponents of strict regulations argue that they are burdensome for industry. 

Radhika Fox, the EPA’s top water official, told The Hill that the new rule is a “balanced, middle-of-the-road rule.” 

“It is focused on balancing our essential job at the EPA to protect our nation’s water resources but to do it in a way that also provides clarity to all water users.” 

This may be it for WOTUS regs: 

When it announced its intention to revise the nation’s water regulations in July 2021, the EPA said it would take a two-step approach, beginning with a “foundational rule” that would restore pre-Obama regulations and ending with a second rule that would “refine this regulatory foundation” and provide an “updated” definition of which waters are regulated.  

However, it’s now unclear whether the EPA will move forward with a second rule. Fox said the agency may or may not do so eventually, but will focus immediately on implementing its existing rule.  

“Our focus right now is on implementation,” Fox said. “Certainly as we learn from implementation, as we continue to get feedback, we may make future refinements but right now we’re focused on implementation, not a new rulemaking.” 

Recent years have seen a significant back-and-forth over which waters should be regulated with the Obama administration rules seen as stringent while Trump-era rules were not.  

The EPA said that its new rule restores protections that were in place prior to the Obama administration and said that it will strengthen important protections for drinking water sources. 

Mark Ryan, a former EPA attorney who worked on the Obama administration rules said that he expected the Biden rules to be “somewhat similar” to regulations from 1986 that were largely in place already after both the Obama and Trump rules faced difficulty in court.  

When it first proposed the rule last year, the EPA also said that due to the court actions, agencies had already been “implementing the pre-2015 regulatory regime nationwide.” 

Nevertheless, Fox said that the new rule contains important updates that incorporate the latest science, streamline text and clarify certain categories of waters that are included and excluded from the regulations. 

Read more about the new water regulations here.  

THE HILL INTERVIEWS ACTIVIST STEVEN DONZIGER 

Steven Donziger says he has no regrets amid a lengthy legal battle with Chevron that has won him support from Democrats in Congress who have pushed for his release from detention.   

To supporters, Donziger is a folk hero who stood up to the power of oil companies in Latin America and has now suffered a personal cost. 

To opponents — and in the eyes of the law, as it stands now — he’s a fraud who allegedly ghostwrote an Ecuadorian judge’s ruling ordering Chevron to pay $9.5 billion to farmers and Indigenous groups in the country. Donziger denies all allegations of fraud or misconduct in connection with the Ecuador case.  

The vast majority of his detention — more than 800 days — has been pretrial house arrest, longer than the six-month maximum sentence he eventually received.       

Donziger, who was released from house arrest in April, spoke to The Hill in November, one of several interviews he’s given since his release to tell his side of the story.  

“Ultimately, I spent 993 days in detention, 45 days of that in federal prison and the rest was at home, and I was released [in] April,” Donziger said. 

Though he’s out of detention now, Donziger expressed concern that he was a test case for what he called the corporate capture of American civil institutions by energy giants like Chevron, with a goal of silencing opposition.  

Read more about the case here.   

WHAT WE’RE READING

Is a Dam in Rural Portugal a Key to Our Alternative Energy Future? (The New York Times) 

California’s endangered salmon population plummets amid new threat (The Los Angeles Times) 

German Facility, Built at Breakneck Speed, Accepts Gas Shipment From U.S. (The Wall Street Journal) 

MORE FROM THE HILL

Kentucky treasurer says 11 banks subject to divestment due to energy company ‘boycotts’ 

California, Nevada face flooding, power outages amid winter storm 

Alaska offshore oil lease sale nets just one bid after being revived by Inflation Reduction Act 

‘Bomb cyclone’ underscores vulnerabilities of nation’s electric grid 

Lighter click: Rachel’s take on the speakership drama. 

That’s it for today, thanks for reading. Check out The Hill’s Energy & Environment page for the latest news and coverage. We’ll see you tomorrow.  

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Politics, Policy, Political News Top Stories 

The FDA on Tuesday updated a rule allowing brick-and-mortar pharmacies to dispense the abortion pill mifepristone — expanding access to the drug amid a wave of state efforts last year to impose restrictions.

Pharmacies in more than a dozen states that have near-total abortion bans would not be able to participate and those in states without bans would have to go through a certification process to qualify.

The Biden administration took a major step to open up access in 2021, making permanent pandemic-era rules allowing people to access the pill within the first 10 weeks of pregnancy via telemedicine and mail delivery. But the FDA’s proposed rule opens new legal and regulatory fronts in the ongoing battle over abortion following the fall of Roe v. Wade, and is likely to draw lawsuits from anti-abortion groups and state officials.

What’s in the rule: The policy, once implemented, will allow chain and independent pharmacies to stock and dispense the drug to pregnant people with a prescription. It’s unclear, however, how many pharmacies will agree to do so, considering it requires a special certification process. Until now, pregnant people could either receive the pill directly from their doctor or have it prescribed via telemedicine and sent by mail, depending on their state’s laws.

CEO Evan Masingill of GenBioPro, the generic maker of the medication, called the FDA’s move “a step in the right direction that is especially needed to increase access to abortion care.”

“The FDA determined that removal of the in-person dispensing requirement and the addition of the requirement for certification for pharmacies were necessary to minimize the burden on the health care delivery system of complying with the [agency’s Risk Evaluation and Mitigation Strategy], while still ensuring that the benefits of mifepristone for medical abortion outweigh the risks,” he said.

He added, however, that the policy “will not provide equal access to all people” because many states have laws in place either banning abortion in most circumstances or mandating that patients only get the pills directly from their prescribing doctors.

Why it matters: The abortion pill recently became the most common method of terminating a pregnancy in the United States, and has been the focus of some of the most heated legal, political and regulatory fights since the Supreme Court overturned Roe v. Wade in June 2022.

Telemedicine and mail delivery of the pills has allowed patients to circumvent state bans, and anti-abortion groups are exploring new ways to impose restrictions on them. The Biden administration, meanwhile, has been under pressure from pro-abortion rights groups and progressive lawmakers to do more to protect access in the post-Roe era.

The new rule will improve access to the pills only in states that already allow their use, though many patients in states with bans could take advantage of it by crossing a state line and picking the drugs up from a pharmacy.

And while they had some access to the drugs already, many people in more progressive states are expected to benefit from the new pharmacy option, including those without a stable home address, those who do not want a parent or partner to see the pills delivered by mail and those without internet access.

How we got here: Anti-abortion and pro-abortion rights groups have fought over the FDA regulations around abortion pills since they were first approved more than 20 years ago. In medication abortion, mifepristone is taken with misoprostol, though the latter drug is subject to fewer restrictions because it’s commonly used for other purposes, like inducing labor and treating stomach ulcers. The new FDA rule lifts some restrictions on mifepristone, which was more strictly regulated.

REMS is the program the agency created to manage Mifeprex and a few dozen drugs with serious safety risks, requiring specific monitoring or management techniques. Proponents of increased access to medication abortion have argued the drugs used in the process are safe and shouldn’t be subject to a REMS.

Until 2021, mifepristone could only be dispensed in person by a physician. Then the Biden administration, in response to a lawsuit by the ACLU and other groups, moved to allow telemedicine prescription and mail delivery just for the duration of the Covid-19 pandemic — rules that the agency later made permanent, citing new data about the pills’ safety and effectiveness.

GenBioPro and Danco Laboratories, which makes the pill under the brand name Mifeprex, submitted a joint response to the FDA in June 2022 requesting further changes to the drug’s REMS — specifically, the certification process for pharmacies dispensing the drugs.

Currently, mifepristone distributors must be certified by the drug’s manufacturers, and prescribing doctors must demonstrate they understand how the drug induces abortions and how to advise patients to use it. Patients also must sign a disclosure forum acknowledging they are taking the medication to end a pregnancy.

Now, pharmacies that become certified under the REMS may directly dispense mifepristone to patients with a prescription from a certified prescriber.

“At a time when people across the country are struggling to obtain abortion care services, this modification is critically important to expanding access to medication abortion services and will provide healthcare providers with an additional method for providing their patients with a safe and effective option for ending early pregnancy,” Danco Laboratories, which makes the branded drug Mifeprex, said in a statement.

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Politics, Policy, Political News Top Stories 

Twitter plans to lift its restrictions on political ads, saying it would immediately allow issue-based paid content on the platform while political advertisements will return “in the coming weeks.”

The announcement comes as advertisers have fled the platform in droves after Elon Musk’s takeover last October, which was followed by a spike in hate speech and the reinstatement of several previously-banned right-wing accounts. The move also puts Twitter in alignment with several of the other major social media companies, such as Meta’s Facebook and Google’s YouTube, which both allow paid political content. One notable exception is ByteDance’s TikTok, which still has a ban on political advertising.

Lifting bans on advertisements from politicians and issue-based groups — which have been in place since 2019 — could potentially lead to more revenue for Twitter.

Reversal of course: Twitter Safety’s account announced the changes in a tweet Tuesday evening, saying, “We believe that cause-based advertising can facilitate public conversation around important topics. Today, we’re relaxing our ads policy for cause-based ads in the US.”

The company also announced plans to expand political advertising, but didn’t set a specific time frame beyond “weeks.”

It’s the latest in a series of Musk moves that have reversed policies that were put in place under former CEO and co-founder Jack Dorsey. Dorsey banned all political ads in November 2019, saying in an October 2019 Twitter thread that paying for political reach “has significant ramifications that today’s democratic infrastructure may not be prepared to handle.”

Additionally, Twitter’s former Chief Financial Officer Ned Segal tweeted that political advertising accounted for less than $3 million in the 2018 midterm cycle. Twitter’s total revenue was $3 billion in 2018.

Twitter didn’t immediately respond to a request for comment on why it reversed the policies.

Issue-based ads are OK: Twitter reversed Dorsey’s restrictions on issue-based (or cause-based) ads — set in November 2019 — that banned the promotion of such ads and required advertiser certification for ads that “educate, raise awareness, and/or call for people to take action in connection with civic engagement, economic growth, environmental stewardship, or social equity causes.”

Musk has radically reshaped the platform since he bought it for $44 billion, laying off thousands of employees, overseeing a mass exodus of top executives and earning a sharp warning from the FTC.

Prior to Musk’s takeover, 90 percent of Twitter’s revenue came from advertising, but major advertisers have backed away following Musk’s free-wheeling approach to content moderation. Musk launched a revamped version of a $8 monthly Twitter Blue subscription service late last year, and lifting political and issue-based ad bans could be another source of revenue for the company.

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