Administration to propose billions for infrastructure in QER release today

Source: Nick Juliano and Hannah Northey, E&E reporters • Posted: Tuesday, April 21, 2015

Vice President Joe Biden and Energy Secretary Ernest Moniz today will call on Congress to approve billions of dollars in new spending to repair leaky natural gas pipelines, upgrade the rickety electric grid, overhaul the nation’s emergency oil stockpile and improve the systems that move crude along railroads and highways.

The pair will appear in Philadelphia touting today’s release of theĀ Quadrennial Energy Review, the Obama administration’s overview of the current status of America’s energy infrastructure. Coming just months before U.S. EPA finalizes its Clean Power Plan, the QER effectively serves as the Department of Energy’s contribution to the administration’s overall effort to chart a course to a future of sharply reduced greenhouse gas emissions.

Biden, Moniz and White House science adviser John Holdren will appear this afternoon at the headquarters of PECO, the electric utility that serves Philadelphia, to tout the report and “the importance of investing in our nation’s energy infrastructure,” according to a fact sheet on the QER.

The QER proposes more than $15 billion in new spending programs or tax credits to support a variety of energy infrastructure, including oil and gas pipelines and the electric grid. Republicans have generally resisted administration calls for steep spending increases, but the pitch outlined in the QER fact sheet seems targeted toward GOP priorities such as the oil and natural gas industry.

For example, the administration is calling for $2.5 billion to $3.5 billion over 10 years for a natural gas pipeline maintenance program, and it says DOE should establish a $3 billion to $5 billion grant program for states to improve electric transmission systems to enhance “resilience and reliability.” Critics of EPA’s impending climate rules and aggressive crackdown on other pollutants frequently warn that the spate of coal plant shutdowns prompted by tougher rules and cheap natural gas threatens the reliability of the grid.

The fact sheet also highlights calls for improvements in infrastructure permitting requirements and improved coordination between the United States, Canada and Mexico — apparent olive branches to congressional Republicans who have long decried delays associated with environmental reviews and pressed President Obama to approve the Keystone XL pipeline from Alberta.

The QER also proposes $1.5 billion to $2 billion to improve the Strategic Petroleum Reserve to account for changing market conditions. It touts a crosscutting $3.5 billion grid modernization proposal that includes DOE and several other agencies. The strategy also calls on the Department of Transportation to establish a $2 billion program it dubs Actions to Support Shared Energy Transport Systems, or ASSETS, aimed at improving transportation infrastructure used by the industry.

The administration through the QER seeks to leverage existing programs and create new partnerships to modernize the electric grid and harden the system against physical attacks and cyberattacks, climate-driven storms and even rare solar storms and terrorist attacks.

The QER calls for a partnership between the DOE and 17 federal, municipal and investor-owned utilities, including the Tennessee Valley Authority, nuclear giant Exelon Corp. and renewables-rich NextEra Energy Inc.The utilities will meet with the agency on April 30.

The QER also attempts to use the government’s existing leverage within state and federal programs to bolster the development of renewables and transmission projects, including the Department of Agriculture’s provision of $72 million for solar deployment through transmission and smart grid projects in rural areas.

The administration is also moving to thwart rare, catastrophic events that can trigger cascading blackouts. The QER calls for DOE and the Department of Homeland Security to study the development of an emergency stockpile of mobile high-voltage power grid transformers that could replace units damaged by major storms, space weather or a terrorist attack. Those results will feed into a national strategy for safeguarding the entire bulk power grid, due in 2015.

Moniz is scheduled to testify on the QER before the Senate Energy and Natural Resources Committee on April 28. The hearing was originally scheduled to take place last month but was delayed after the QER failed to materialize (E&E Daily, March 23).

Melanie Kenderdine, DOE’s director of energy policy and systems analysis, in previous discussions of the report before its release said the report will focus on challenges that the United States’ power lines, railways, pipelines and power plants are facing from a surge of increasingly violent weather, age, competing interests and shifting trends with the discovery of shale gas (Greenwire, April 2).

DOE has held 14 stakeholder outreach meetings across the country, as well as a meeting in Canada and a conference call with officials in Mexico to discuss the QER.

Kenderdine has also said DOE is assembling an “implementation team” for the recommendations that will be led by Karen Wayland, DOE’s deputy director for state and local cooperation in the Office of Energy Policy and Systems Analysis. The Obama administration’s fiscal 2016 budget request also includes funding that would push the recommendations forward, she said, including funds for state reliability grants and $400 million to modernize the electric grid.

A hefty tab — and plenty of GOP criticism — could follow the release.

Moniz in December warned that the United States may need to invest tens of billions of dollars to upgrade its aging matrix of pipelines and wires. “I’m not going to go into detailed numbers, but let’s say the sticker shock is tens of billions of dollars that we need in terms of infrastructure development,” Moniz told attendees at the Western Governors’ Association’s winter meeting on the Las Vegas Strip (Greenwire, Dec. 8, 2014).

Last year, Republicans like then-House Oversight and Government Reform Chairman Darrell Issa (R-Calif.), and the Energy Policy Subcommittee chairman at the time, Rep. James Lankford (R-Okla.), who has since moved on to the Senate, warned in a letter that the QER could touch on “nearly every part of the federal government” and could cost millions of dollars (E&E Daily, May 16).