Home FinanceEnergy & Environment Did Joe Manchin Just Kill Biden’s Build Back Better Bill?

Did Joe Manchin Just Kill Biden’s Build Back Better Bill?

by YAR

Did Joe Manchin just put the final stake into the heart of Joe Biden’s $1.9 trillion “Build Back Better” bill? It sure seems like it, if we take what he said to Bret Baier on “Fox News Sunday” today literally:

“If I can’t go home and explain to the people of West Virginia, I can’t vote for it,” Manchin said. “And I cannot vote to continue with this piece of legislation. I just can’t. I’ve tried everything humanly possible. I can’t get there. This is a no on this piece of legislation. I have tried everything I know to do.”

Most of the news coverage of the BBB bill has focused on the provision that would continue and expand the current Child Tax Credit, along with other expansions of the country’s social safety net set of programs. But this bill also contains a second, larger tranche of funding for the Biden administration’s Green New Deal agenda – following a first tranche contained in the Infrastructure bill passed in November – including new and expanded subsidies for wind and solar power, as well as electric vehicles. The total Green New Deal-related funding in this bill is estimated to be as high as $555 billion.

The BBB bill had passed in the House of Representatives earlier this year, but has been stalled in the Senate for weeks as Democrat Senate Majority Leader Chuck Schumer and President Biden worked fruitlessly with Machin and Arizona Senator Kyrsten Sinema to try to resolve the two senators’ various objections to the legislation as it is currently constructed. Sen. Manchin staked out a position in mid-summer that he could not support any bill with a price tag of more than $1.5 trillion, and has held firm to that position since, grudgingly raising it to $1.75 in October as negotiations continued. But a new, revised estimate of the bill’s true cost from the Congressional Budget Office early this week indicating the bill would actually add as much as $3 trillion to federal deficits over the next 10 years made reaching an agreement even more difficult.

Congress adjourned this week for the remainder of this year, ending any hopes of a Senate vote on BBB before Christmas, the latest moving-target goal that Schumer had set in late November. Speculation during this week had centered on the likelihood that Schumer would put the bill on the Senate’s agenda once again when congress reconvenes in January. Manchin’s statement on Sunday appears to put an end to that prospect.

The killing of this bill would represent a significant setback for the prospects of dramatic expansion of renewables and EVs not just in the U.S., but globally given that America has been a pace-setter in the renewable space for the past 20 years. That in turn is likely to lessen the ongoing ability of states like Texas – whose grid has become increasingly unstable as managers at ERCOT attempt to manage rising loads of unpredictable, intermittent energy sources – to continue piling more and more wind and solar onto the grid at the expense of building adequate new baseload capacity fired by natural gas or nuclear.

The death of BBB and its major additional subsidization of renewables and EVs – which Biden recently bragged was a record high amount by any government – will also make the reaching of climate goals set by the International Energy Agency increasingly difficult. The IEA reported earlier this week that coal usage is rising to record levels in both India and China – the world’s two largest users of coal – and called on both countries to speed up application of recently-made climate pledges.

Keisuke Sadamori, director of energy markets and security, said: “The pledges to reach net zero emissions made by many countries, including China and India, should have very strong implications for coal – but these are not yet visible in our near-term forecast, reflecting the major gap between ambitions and action.”

Of course, the ongoing desire by countries to continue reliance on fossil fuels to generate reliable, scalable energy for their economies and security is not limited to China and India. That was evidenced this week by natural gas prices reaching new record levels in Europe as the UK, Germany and other EU nations scrambled to secure adequate natural gas supplies need to get their people through the coming winter. That potentially dire circumstance has been precipitated by the failure of the wind industry to perform as expected during the course of 2021.

Doug Sheridan, Managing Director and Founder at EnergyPoint Research, said on Friday that “Renewables’ inherent intermittency has been exposed as the Achilles heel of the energy transition. Proponents’ habit of conflating gross capacities of renewables installations with their net capacities has also contributed to the growing sense of underperformance. If only good story-telling kept the lights on.”

Sen. Manchin’s comments today also expose the heavy reliance on government subsidization by renewables and EVs as another Achilles heel in the energy equation. President Biden and congressional Democrats will no doubt scramble to resuscitate these Green New Deal provisions in some new form next year. But the prospect of their party’s miniscule congressional majorities passing them during an election year seem fairly dim from this vantage point.

Good story-telling doesn’t keep the lights on, as Sheridan implies, and as things are turning out, reliance on congressional funding to do it is a bad plan as well.

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