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HOW MUCH CALIFORNIA IS SPENDING ON CLIMATE: Democrats in Congress have struggled to pass the climate measures envisioned in the Build Back Better Legislation, but California, with large Democratic majorities and a budget flush from tax revenues and federal aid, is set to spend a comparable amount.

The numbers: Gov. Gavin Newsom’s newly revised budget proposal now includes a whopping $32 billion to address climate initiatives.

The stalled Build Back Better Act would allocate roughly $47 billion, nationwide, for first-year costs of climate changing measures.

In other words, more than two-thirds of the total amount of the BBB climate spending, from just one state.

How this happened: The California governor detailed his plans for the revision at a nearly two-hour press conference in Sacramento yesterday; a $9.75 billion increase to his January proposal that he chalked up California’s record-breaking $100 billion in surplus funds.

The May revision brings the state budget proposal to a whopping $300 billion. On climate alone, the revised budget devotes an additional $9.5 billion to the original $22.5 billion request.

Newsom attributed the surging revenues in part to high tax revenues driven by levies on high-income earners. But the roughly $43 billion in federal COVID relief funds have also helped.

What California’s funding: The budget now allocates billions in drought response, resilience, and education; including investments in water recycling and cleanup, providing aid to small farmers, modernizing infrastructure, and building out water storage capacities in urban areas

Millions will also be dedicated to wildfires and forest resilience and fighting extreme heat events in the state. The budget calls for an increase in funding for the state’s updated Extreme Heat Action Plan, as well as effort to develop so-called “cooling communities” and resilience centers statewide, as well as funds to educate and protect vulnerable populations and ecosystems from the impacts of extreme heat.

Clean energy received another major chunk of the budget request, which calls for millions in long duration storage investments, green hydrogen production, offshore wind infrastructure, and industrial decarbonization.

Other major initiatives include emissions reduction efforts, including investments in zero-emissions vehicles, improving access to public transportation in low-income communities, and injecting funds into development projects for high-speed rail and transit efforts.

Large swaths of the budget are also devoted to expanding climate jobs, creating access to opportunities in climate-related fields, and expanding K-12 education to create career pathways for students to enter technology and climate-related fields.

The proposal “reflects the need for urgent and comprehensive action across government and our economy,” Newsom’s office said in a statement announcing the budget, citing “record-breaking heat waves, a vanishing Sierra snowpack and life-threatening historic wildfires demonstrate that climate emergencies,” that it said underscore the urgency to act immediately.

Since California’s legislature is overwhelmingly Democratic, Newsom will not need support from Republicans, who oppose his plan as wasteful.

Next steps: Now that Newsom has completed his revised plan, the budget bill heads to the respective budget committees in each house for a roughly month-long debate process.

Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Jeremy Beaman (@jeremywbeaman) and Breanne Deppisch (@breanne_dep). Email or 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.

GOVERNORS ASK FOR RESOLUTION TO COMMERCE SOLAR PROBE: Nineteen Republican and Democratic governors are weighing in on the Commerce Department’s anticircumvention investigation and requesting an expedited determination, saying the threat of new tariffs creates uncertainty in the market and threatens solar industry jobs.

The governors said in a letter to Biden yesterday that domestic solar manufacturing “is equally as critical and provides tremendous economic development opportunities in our states” compared with the industry writ large but that hundreds of thousands of jobs are at stake if the department levies new tariffs on solar product imports from Malaysia, Cambodia, Vietnam, and Thailand — products on which U.S. solar developers are overwhelmingly reliant for their projects.

The investigation is being undertaken at the request of domestic solar module manufacturer Auxin Solar Inc. and is supported by manufacturing interest groups, but industry groups like the Solar Energy Industries Association and American Clean Power Association have been lobbying hard against it.

CANADIAN OFFICIALS WARN AGAINST LINE 5 CLOSURE: Canadian officials appeared before the Senate Energy and Natural Resources Committee this morning for a hearing on energy and minerals trade between the U.S. and Canada, where some emphasized the importance of maintaining operations of Enbridge’s Line 5 pipeline.

Michigan has sought to terminate easement for the decades-old pipeline and is litigating against it because officials worry a section that runs under Lakes Michigan and Huron threatens to pollute the region.

Jonathan Wilkinson, Canadian minister of natural resources, told the committee Canada is seeking a solution to appease all parties and said the pipeline is critical for supplying petroleum products to Ohio, Pennsylvania, and Michigan.

Jason Kenney, premier of oil-rich Alberta, said “to stop the current operation would jeopardize energy security for the upper midwest.”

Connecting some dots: The U.S.-Canada energy trade runs deep. Canada is by far the nation’s top foreign supplier of oil and associated petroleum products, and representatives of both sides said during the hearing that they support increasing the energy and minerals trade between the two countries.

The now-canceled U.S-Canada Keystone XL pipeline also got a few honorable mentions during the hearing, including from Chairman Joe Manchin, who visited Premier Kenney in Alberta last month and subsequently said the Biden administration ought to support resurrecting and rebranding the pipeline now that the U.S. is shunning Russian imports.

“In light of Putin’s war in Ukraine and the global energy price surge, I think a lot of us wish that project had moved forward,” Manchin said of the pipeline in his opening statement.

RIGS ARE UP BUT RISE IS HISTORICALLY SLOW: The current U.S. oil rig count is up 60% from a year ago, while natural gas rigs are up 49%, but the rate of increase has been slower than previous periods of high commodity prices, according to a new market report from the American Gas Association.

AGA noted there is commonly a lag between a sustained increase in commodity prices and an increase in operating rigs but said a mix of supply chain issues, investor restraint, and labor shortages may be responsible for the slower pace in this case.

Some energy companies have said publicly they are spending or prepared to spend on additional production with fuel prices in record territory, but others have emphasized they’re taking a more disciplined approach.

Diamondback Energy said the company is “committed to maintaining our current production levels,” pointing to volatility in the market, in its recent earnings report.

Where the markets stand: Natural gas futures are trading around $8.30 per mmbtu this morning after closing below $8 yesterday.

Both Brent crude and WTI are trading around $115 per barrel.

IOWA’S REYNOLDS SIGNS BILL EXPANDING E15: Gov. Kim Reynolds signed legislation this morning that will subsidize and expand sales of E15 gasoline and other renewable fuels.

The “Biofuels Access” bill requires retailers “with compatible infrastructure” to offer E15 by Jan 1, 2026 from at least one dispenser, while newer retailers and those that install new tank designs must offer E15 from at least 50% of dispensers after Jan. 1, 2023. The bill provides for some waivers, including for small retail locations.

The bill also funds grants for upgrades to help businesses meet the requirements and establishes new tax credits for B20 and B30 biodiesel.

Iowa Renewable Fuels Association Executive Director Monte Shaw called the bill a “nation-leading policy that will greatly expand consumers’ ability to find lower-cost biofuels at pumps across the state.”

Iowa, the nation’s leading corn-producing state, is where Biden elected to announce his administration’s plan to lift restrictions on E15 as a way to reduce fuel prices.

Opponents argued the move would do little to affect prices because E15 is sold at fewer than 3,000 retail stations nationwide.

WHAT’S HOLDING UP THE FIVE-YEAR PLAN? On this week’s "Plugged In" podcast, former FERC chairman Neil Chatterjee and Washington Examiner energy reporter Breanne Deppisch broke down the Interior Department's recent decision to cancel offshore lease sales in the Gulf of Mexico and Alaska, and what that decision— as well as the fast-approaching deadline for Interior to submit its five-year lease offshore proposal— could mean for the future of offshore production. Listen to the full episode here.

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12:00 p.m. The Environmental Law Institute will host a remote webinar event where experts will break down the SEC’s climate-related risk disclosure rule.