QER could help lawmakers aiming to pass broad bill 

Source: Nick Juliano, E&E reporter • Posted: Wednesday, April 22, 2015

If bookies set odds on legislative prospects, a bipartisan, comprehensive energy bill would still be a definite long shot this year, but the reactions from Capitol Hill to a suite of proposals rolled out by the Obama administration yesterday may have improved its odds — at least slightly.

The multibillion-dollar price tag carried by the proposals in the administration’s Quadrennial Energy Review (QER) may cause some sticker shock in an era of tight budgets. But its overarching focus on energy infrastructure needs — to capitalize on domestic production; secure a reliable electric grid; and ensure safe transport of oil, gas and coal, among other goals — dovetails with some of the priorities being addressed by lawmakers assembling an energy bill this year.

Republican energy leaders in both the House and Senate yesterday welcomed the QER as an important contribution to the broader energy policy debate and said they are eager to keep working with the administration.

House Energy and Commerce Chairman Fred Upton (R-Mich.) and Energy and Power Subcommittee Chairman Ed Whitfield (R-Ky.) said in a joint statement that the QER underscores the need for a long-overdue update to domestic energy policies to account for newly abundant resources.

“While we share our differences with this administration regarding energy policy, when it comes to the transmission, storage, and distribution of our resources, we can all agree that targeted changes to our laws and policies are necessary. We need a modern and resilient energy infrastructure that will meet tomorrow’s energy challenges,” Upton and Whitfield said.

“We are reviewing the administration’s full recommendations, but we have already found areas of common ground where we will work together,” they added. “We are setting out to build the Architecture of Abundance, and we welcome any willing partners to join us.”

E&C ranking member Frank Pallone (D-N.J.) similarly welcomed the road map’s release.

“We need to look at all sides of the equation — demand and supply, consumers and producers, and, most importantly, the impacts of a changing climate — to help us construct an energy future that is both economically and environmentally sustainable,” Pallone said in a statement. “And we need the resources of both sides of the aisle, both chambers of Congress, and all branches of government in order to get there.”

To be sure, there are ample details still to be combed through in the hundreds of pages of documents and supporting information that constitute the QER, but the measured reception was a welcome sign for energy bill watchers. Still, not all Republicans were quick to embrace the plan.

“If the Administration is serious about securing our energy future, a good start might be with the bipartisan bills passing out of the House,” Matt Sparks, a spokesman for House Majority Leader Kevin McCarthy (R-Calif.), wrote in an email to reporters this morning, pointing to bills on the Keystone XL pipeline, liquefied natural gas exports and permitting streamlining for gas pipelines.

The Energy and Power Subcommittee tomorrow will hold a hearing on the first of four titles of the “Architecture of Abundance” that energy bill committee leaders hope to advance this year (E&ENews PM, April 21). The first piece focuses on workforce development, based on legislation introduced last year by Illinois Democratic Rep. Bobby Rush, an indication of the committee’s commitment to assembling a bipartisan package and effort to offer an olive branch to Democrats.

The White House is touting the QER as a road map to a future in which energy comes mostly from cleaner sources such as natural gas, wind and solar electricity, or biofuels, and its recommendations are targeted toward transitioning existing infrastructure toward those goals (Greenwire, April 21).

The recommendations also address concerns that have been raised in response to U.S. EPA’s impending Clean Power Plan, which will regulate greenhouse gas emissions from the power sector for the first time and is driving a broader transition in the energy industry. For example, it proposes up to $5 billion worth of state grants to modernize the electric grid, which critics worry would be overly stressed when coal plants shut down and are replaced by intermittent renewables, and calls for up to $3.5 billion to improve aging natural gas pipelines, which will be needed to meet anticipated increased natural gas demand.

Sen. Lisa Murkowski (R-Alaska), who is assembling her own energy bill this year, said in a brief interview yesterday that she had not yet studied the QER in detail but was encouraged by earlier conversations with Energy Secretary Ernest Moniz, who had suggested the road map could help serve as a template for an energy bill.

In particular, Murkowski said she wanted additional guidance on addressing permitting and siting constraints that the industry has said inhibit infrastructure development, but she was encouraged to hear that one of the chapters was focused on those issues.

“I’ve never been to an Alcoholics Anonymous meeting, but what I’m told is that in order for the 12-step plan to work, the first thing you have to admit is that you’re an alcoholic,” Murkowski said. “So we’ve got to admit that we’ve got a system that is inefficient, that needs to be reviewed — some would say overhauled, some would say tweaked — but if we can at least agree that we’ve got some work to do here, maybe we can find a starting place.”

Upton and Whitfield’s statement does not mention the EPA rules, but that is likely by design. The committee tomorrow plans to mark up a Whitfield bill that would undercut the Clean Power Plan, but it has been apparent all year that effort likely will remain separate from the bipartisan energy bill Upton hopes to deliver (E&E Daily, Feb. 13).

Still, the measured reaction from Upton and Whitfield to the QER caught some off-guard, especially in light of the administration’s broader agenda.

“No one doubts that investments in energy infrastructure and permitting reforms make sense, but how do either square with an administration that also creates regulatory roadblocks to either?” asked Stephen Brown, vice president for federal government affairs at Tesoro Corp., a large oil refiner.

Brown also noted that most companies already are investing in infrastructure upgrades and would benefit more from permitting reforms than additional federal spending.

American Gas Association President Dave McCurdy touted ongoing work to upgrade pipelines and pointed to rate mechanisms in place in 38 states to help the process.

“This is an ongoing priority for natural gas utilities, and there is significant proactive work already underway by the natural gas industry, work that is benefiting customers, the overall economy, our nation’s energy security and the environment,” he said.

Louis Finkel, an executive vice president at the American Petroleum Institute, welcomed the QER as an acknowledgement that oil and gas will remain important features of the U.S. energy mix and touted the job-creation potential of infrastructure upgrades.

“If the president wants to achieve our nation’s full energy potential and play a key role in this equation, he should put this industry to work,” Finkel said in a statement yesterday. “Essential infrastructure improvements in just the oil and natural gas area could, over the next decade, attract as much as $1.15 trillion in new private capital investment, support 1.15 million new jobs, and add $120 billion on average per year to our nation’s [gross domestic product].”