Murkowski’s energy ‘blueprint’ calls for more drilling, fewer regulatory roadblocks

Source: Hannah Northey, E&E reporter • Posted: Tuesday, February 5, 2013

Sen. Lisa Murkowski of Alaska, the top Republican on the Senate Energy and Natural Resources Committee, unveiled a sweeping “energy blueprint” today that could serve as a starting point for a series of smaller, bipartisan energy bills this year.

The document, dubbed “Energy 2020,” lays out the senator’s platform, which includes opening more federal land and waters for oil and gas production, curbing carbon emissions, fast-tracking exports of domestic gas, and creating a “trust fund” for clean energy.

Murkowski unveiled the blueprint at the National Association of Regulatory Utility Commissioners’ winter committee meetings in Washington, D.C., today and plans to discuss the document with reporters later on Capitol Hill.

The senator acknowledged that her priorities touch on divisive issues — approving the Keystone XL pipeline, fast-tracking liquefied natural gas exports and opening the Arctic National Wildlife Refuge — but said her proposal serves as a conversation starter that balances the need to produce more energy while protecting the environment.

“There has to be a new conversation, a better conversation,” she said. “I intend to start that today.”

The package of 200 policy recommendations, she said, is not a “turn sheet” for a comprehensive energy bill but instead a source of ideas for discrete bills for a politically and geographically diverse set of members of Congress.

Congress has little appetite for a large energy bill or “full meal deal” and it’s more likely that smaller pieces of legislation will survive this year, Murkowski said. The senator said she’s already finding areas of bipartisan agreement with Sen. Ron Wyden of Oregon, the committee’s Democratic chairman, on public lands issues and nuclear waste.

“Let’s not get so focused on putting together the big, comprehensive reform bill,” she said. “We’ve seen those don’t work too well in the United States Senate.”

On the production side, the blueprint calls for easing federal oil and gas permitting — namely in newly discovered shale plays — and ramping up oil, biofuels and synthetic fuels production to ensure the country is independent of OPEC imports by 2020. The federal government should approve the Keystone XL pipeline, the Interior Department should outline plans for developing the outer continental shelf, and 2,000 acres in the nonwilderness portion of the Arctic National Wildlife Refuge coastal plain should be open to oil and gas exploration and production, according to the report.

“Our nation is too often hamstrung by burdensome regulations, delayed permits, and overzealous litigation,” Murkowski writes. “They can render projects uneconomic by attrition and prevent timely, efficient, and urgently-needed investments in energy supply and conservation.”

Murkowski’s blueprint also endorses a continued federal role supporting nascent clean energy technologies with research and development funding provided through the Advanced Projects Research Agency-Energy, a reformed loan guarantee program within the Department of Energy, and the extension to renewable energy companies of “master limited partnership” status, which makes it easier for them to attract investors.

The existing suite of subsidies for clean energy, such as tax credits, could be replaced by a “reverse auction” format in which companies bid for government support to identify the lowest-cost subsidy, Murkowski writes. Such a program would focus on the potential to “jump-start” a new technology with subsidies that would be designed to phase out over time, according to the paper.

“It is prudent to use public resources to support clean energy development, but only when our resources serve as a catalyst for nascent but potentially transformative technologies,” Murkowski says. “Perpetual subsidies are simply impossible in today’s fiscal environment.”

Regarding the tax treatment of oil and natural gas companies, Murkowski rebuts arguments from President Obama and congressional Democrats in favor of eliminating about $4 billion per year in tax benefits for the industry. Tax incentives available to the industry are not “subsidies,” Murkowski says, but akin to standard tax treatments that allow a variety of businesses to deduct expenses.

That said, Murkowski’s blueprint indicates some openness to eliminating those incentives in the context of broad-based tax reform but argues they should not be eliminated in isolation.

“The best approach would be to undertake comprehensive reform that begins to flatten the code in exchange for lower overall rates. In the meantime, it is simply not appropriate to punish a handful of companies in just one sector of our economy,” Murkowski writes. “To continue that would be the very definition of counterproductive — especially when it comes to energy.”

Murkowski also reiterated her support for small modular nuclear reactors in the document and called on the Office of Management and Budget to review each nuclear loan guarantee on a case-by-case basis to determine the credit subsidy cost, a point of contention now among consumer advocates.

The senator said her proposals wouldn’t increase costs for consumers or limit choices and said it’s up to her and the Senate committee to ensure ideas in her blueprint move forward.

“There is a lot that we can do; the question is whether or not we will actually do it,” she said.