Overnight Energy & Environment

Overnight Energy & Environment — Virginia panel votes down Wheeler

by Rachel Frazin and Zack Budryk 02/01/22 06:37 PM ET

Welcome to Tuesday’s Overnight Energy & Environment, your source for the latest news focused on energy, the environment and beyond. Subscribe here: digital-staging.thehill.com/newsletter-signup.

Today we’re looking at the latest in ex-EPA chief Andrew Wheeler’s battle to become Virginia’s natural resources secretary, a fee hike that could be in store for upcoming lease sales and how climate change could impact future flood costs.

For The Hill, we’re Rachel Frazin and Zack Budryk. Write to us with tips: rfrazin@digital-staging.thehill.com and zbudryk@digital-staging.thehill.com. Follow us on Twitter: @RachelFrazin and @BudrykZack.

Let’s jump in.

Wheeler voted down, but not out

A key committee in Virginia’s Democratic-majority state Senate has removed former Environmental Protection Agency chief Andrew Wheeler, GOP Gov. Glenn Youngkin’s nominee for Secretary of Natural Resources, from a list of Cabinet nominees, signaling the legislature may reject a state Cabinet nominee for the first time in 16 years.

The state Senate’s Committee on Privileges and Elections voted in a party-line 9-6 vote to remove Wheeler from the list of nominees, Sen. Ghazala Hashmi (D) confirmed on Twitter. “Virginia needs a [Secretary of Natural and Historic Resources] dedicated to addressing the very serious issues of environmental protection and climate change.”

Wheeler’s nomination raised the ire of environmental activists, who noted his history of rolling back environmental regulations under the Trump administration. Democrats, who hold a two-seat majority in the state Senate, suggested they would block his nomination soon after the news broke.

This would make Wheeler the first Cabinet pick rejected in the state since 2006, when the legislature rejected Daniel LeBlanc, then-Gov. Tim Kaine’s (D) nominee for secretary of the commonwealth.

But, don’t count him out yet…The removal of Wheeler’s name does not by itself defeat the nomination. The one-time EPA chief could still be re-added to the list via a floor amendment during a full Senate vote. However, the vote suggests that Wheeler did not win state Democrats over last week in a largely cordial hearing, during which he emphasized his belief in climate change and said his environmental record has been distorted by the press.

If Wheeler receives a single Democratic vote, Lt. Gov. Winsome Sears (R) would have the power to break the tie in his favor. State Sen. Joe Morrissey (D) on Friday told The Hill that he felt Wheeler “acquitted himself well” during questioning. Morrissey, who has broken with the majority in the past, said he would consult with experts in the weeks ahead before making a decision.

VA’S NEW GOVERNOR ANGERING ENVIRONMENTALISTS

Virginia Gov. Glenn Youngkin (R) has teed up a series of battles with activists and the state senate’s Democratic majority over environmental policy in his first month in office.

Youngkin placed little emphasis on energy and environmental policy on the campaign trail, focusing largely on educational issues and COVID-19 restrictions.

But even before his inauguration, Youngkin raised eyebrows among environmentalists.

Most notably: He announced plans on Dec. 8 to withdraw Virginia from the Regional Greenhouse Gas Initiative (RGGI), an 11-state compact that requires power plants to buy credits to offset carbon emissions. Virginia had entered the group in 2021.

Youngkin has decried RGGI as a carbon tax passed on to consumers and vowed to unilaterally exit the agreement.

“Simply stated, the benefits of RGGI have not materialized, while the costs have skyrocketed,” Youngkin’s order states.

Youngkin’s nomination of former Wheeler as the state’s secretary of natural resources also raised hackles.

On the campaign trail, the first-time candidate emphasized his business experience and, despite accepting former President Trump’s endorsement, kept him at arm’s length.

Youngkin “didn’t talk about the environment much at all for most of the campaign and I think there was hope … that maybe he was going to take more of a moderate approach in a fairly moderate state,” said Mike Town, executive director at the Virginia League of Conservation Voters.

Kristin Davison, a vice president at the GOP consulting firm Axiom Strategies who served as an adviser to the Youngkin campaign, told The Hill his early moves are in keeping with his vows on the campaign trail.

“Lowering the cost of living was a critical component of Governor Youngkin’s campaign and Day One Game Plan.” Davison told The Hill in an email.

Interior weighs fee hike for lease sales

The Interior Department is apparently considering increasing the fees that companies pay to drill for oil and gas on public lands by 50 percent.

News outlets including Reuters spotted a webpage on the Bureau of Land Management’s website which said that rates for leases offered this quarter would increase to 18.75 percent.

The current minimum royalty rate set by law is 12.5 percent.

Reuters reported that the post has since been removed.

Interior spokesperson Melissa Schwartz confirmed to The Hill that the Bureau, which is overseen by Interior, “accidentally posted some pre-decisional draft language on their website.”

This is not the first time the department has indicated a desire to increase the amount that companies pay to drill on federal lands.

In a November report, the department recommended increased fees for drilling on public lands, saying that it should increase not only royalties but also other fees like minimum bids that companies can make.