West Virginia needs the Biden energy agenda

As we speak, Democrats in Congress are hashing out the details of the budget reconciliation bill that will contain the vast bulk of President Joe Biden’s domestic agenda. It is meant to be passed alongside the recent bipartisan infrastructure package that came out of the Senate.

One of the unique features of this political moment is that virtually every individual Democrat has the power to sink the whole enterprise — there are zero Dem votes to spare in the Senate and only a handful in the House — but if any of them sink it, it all goes down. If progressive Dems kill the bipartisan infrastructure bill, conservative Dems will kill the reconciliation bill, and vice versa. (House Speaker Nancy Pelosi recently agreed to hold a vote on the bipartisan bill on Sep. 27, but progressives have pledged not to vote for it unless reconciliation also gets a vote.)

They either all succeed together or all fail together. And if they fail, the party will get crushed in 2022 and 2024. None of them will escape unscathed. They’ve got to make it work.

For obvious reasons, there’s an enormous amount of speculation about how various Democrats will play their hands in these negotiations. I can’t claim to understand the motivations of everyone involved. The recalcitrant House “moderates” are some mix of irrational and malicious. Sen. Kyrsten Sinema is utterly opaque.

But Sen. Joe Manchin makes sense to me, for the simple reason that I believe he has West Virginia’s best interests at heart. And that’s why I’m confident he’s going to find his way to supporting an ambitious reconciliation bill. He knows West Virginia needs it.

The simple fact is, West Virginia’s energy economy is not on a sustainable course. US coal is on the way out.

This is true across the country and it’s true in West Virginia. One of the state’s two big utilities, American Electric Power (AEP), will shut down 5,574 megawatts of WV coal generation by 2030, and the rest of it by 2040. The other, First Energy, has pledged carbon neutrality by 2050. The number of US coal mines continues to fall.

Many of the states biggest private sector employers, like Walmart, Kroger, Lowe’s, and Proctor & Gamble, have set aggressive emission-reduction goals and are looking for clean electricity (which they must currently purchase out of state).

The people of West Virginia largely understand that an inexorable energy transition is underway. They are scared it will leave them and their communities behind.

West Virginia needs new investment and new jobs. They need leadership. Passing some version of Joe Biden’s American Jobs Plan (AJP) would be an enormous boon to the state and a political win for Joe Manchin.

The American Jobs Plan would invest in West Virginia

Last week, the Center for Energy and Sustainable Development at the WVU law school released a new analysis showing what a few key provisions of AJP would do for West Virginia’s economy. (It builds on a previous analysis demonstrating the feasibility of rapid decarbonization in the state.)

Specifically, it models a “Clean Innovation Pathway” that would reduce carbon emissions from the state’s electricity system roughly 80 percent by 2030, taking into account two key policies from the AJP: extension/expansion of the clean-energy tax credits and the 48C Advanced Manufacturing Tax Credit, which invests in clean-energy manufacturing projects.

Through 2040, the Clean Innovation Pathway reduces the cost of electricity by $855 million and increases employment by the equivalent of 3,500 full-time jobs, while pulling in $20.9 billion in investment in new solar, wind, energy storage, and other clean-energy projects.

If Manchin’s American Jobs in Energy Manufacturing Act (which would expand 48C) were passed as part of the AJP, it would draw an additional $1.7 billion in manufacturing investments and create an additional 3,250-4,350 manufacturing jobs (plus 9,300-12,400 jobs created indirectly).

Importantly, these numbers capture only a fraction of the AJP’s benefits to West Virginia. There are other investments in Biden’s plan that would land in the state.

Carbon capture, utilization, and storage (CCUS) would get money for demonstration projects; money for a series of “pioneer projects” applying CCUS to steel, cement, and other heavy industrial plants; and a tax credit for carbon capture and storage.

There’s money for economic development in coal country, reclamation of mines and wells, weatherization of buildings, regional innovation hubs, and much else that would channel investment into the WV energy sector.

Perhaps most importantly: the analysis, done back in April, does not take into account the effects of a Clean Energy Payment Program (CEPP), which would offer federal payments to utilities that increase their deployment of clean energy — whether it’s solar, wind, geothermal, hydrogen fuels, or natural gas with carbon capture — and levy fines on those that fell short.

In effect, federal revenue would pay for West Virginia’s transition to clean energy, rather than the bill falling on state ratepayers. By doing so, it would generate vast in-state benefits —