Senate panel OKs bipartisan package, lifts export ban

Source: Geof Koss and Hannah Northey, E&E reporters • Posted: Tuesday, September 22, 2015

The Senate Energy and Natural Resources Committee approved its comprehensive energy package today by a wide margin, while separately lifting the crude export ban on a party-line vote.

The bipartisan energy bill advanced on an 18-4 vote, with Sens. Mike Lee (R-Utah), Jeff Flake (R-Ariz.), Bernie Sanders (I-Vt.) and Debbie Stabenow (D-Mich.) opposing the measure.

The panel split, 12-10, along party lines to approve a separate package that increases coastal states’ share of federal revenues raised by drilling off their coasts. The package also would lift the long-standing ban on crude exports.

While Democrats opposed the measure en masse, New Mexico Democratic Sen. Martin Heinrich and independent Maine Sen. Angus King both signaled they would be willing to consider supporting lifting the export ban if it was accompanied by extensions of key renewable energy tax incentives.

Also advancing was S. 720, the efficiency package sponsored by Sens. Rob Portman (R-Ohio) and Jeanne Shaheen (D-N.H.), which moved by a 20-2 margin. An assortment of public lands bills was cleared en bloc by voice vote.

But most of the markup focused on the broader energy package, which both sides spent months negotiating.

The panel rejected by a 9-13 vote an amendment by Stabenow that she said would address a major concern of manufacturers over liquefied natural gas exports — the quantity of ethane that is added at terminals.

“My concern is we’re taking the most valuable part of LNG and upping it” at the point of export, she said.

Stabenow’s amendment would limit the amount of ethane in LNG exports by capping the maximum heating value at 1,110 British thermal units per standard cubic foot of dry gas, “which is consistent with the quality specifications of a majority of interstate pipelines.” Alaskan LNG exports would be exempt from the requirement.

But Republicans called the requirement unnecessary, with Sen. John Barrasso (R-Wyo.) arguing that Stabenow’s amendment “would rip to shreds existing contracts” for exports above its cap, threatening the development of export terminals.

The panel rejected, 9-13, an amendment by Sen. Al Franken (D-Minn.) that would establish a competitive DOE grant program to measure energy use in multi-tenant buildings. “Making buildings more efficient will save people a lot of money,” he said.

Chairwoman Lisa Murkowski (R-Alaska) said she supported the goal of the amendment but suggested that building owners, and not the federal government, should pay for such measurements.

Franken called the program — which would be authorized at $5 million annually for five years — a proper federal expenditure in light of the benefits.

“What we’re trying to do is encourage something that we know saves a tremendous amount of energy,” he said.

The panel also debated a second Franken amendment that would task the Energy Department with coordinating with relevant stakeholders to prevent fuel-supply shortages — such as the delayed coal deliveries that have threatened Midwestern power supplies in recent winters.

Murkowski opposed the amendment, noting that the president already has powers over coal supplies for emergencies. “That provision is already in law, so I … don’t really see why we need to have it,” she said.

Franken responded that DOE should have authority to improve coordination that doesn’t require the president to invoke emergency authority, but the amendment fell, 9-13.

The panel also adopted by voice vote an amendment by Sen. John Hoeven (R-N.D.) that would give energy producers some relief from the need to obtain Bureau of Land Management oil and gas permits when less than 50 percent of the minerals are owned by the federal government within a drilling or spacing unit. The exemption would also apply for units where the federal government does not own the surface rights.

Hoeven argued the amendment would eliminate the need for companies to obtain “duplicative” state and federal permits. A modification added before the vote gives BLM regional offices the discretion to waive the federal requirements, stopping short of the full exemption Hoeven had initially sought.

The committee adopted by voice vote a Barrasso amendment that directs federal agencies to prioritize environmental reviews associated with proposed helium sales.

Manager’s amendment

manager’s amendment adopted at the outset addresses permitting for natural gas pipelines and hydroelectric projects, open noncontiguous states and tribal lands to federal loan guarantee programs.

The amendment added West Virginia Republican Sen. Shelley Moore Capito’s language that would task the Federal Energy Regulatory Commission with granting all federal approvals for gas infrastructure projects — licenses and permits — within 90 days of the completion of the agency’s review of an application.

FERC currently sets the schedule for conducting environmental reviews of proposed natural gas interstate pipelines before granting permits, and applicants can take the rare step of filing a lawsuit against any state or federal agency that doesn’t comply with the timelines the commission lays out.

The amendment would lay out a conflict resolution process for agencies that don’t comply with FERC’s time frame, which Capito said would be a boon for untangling delayed gas projects in her home state and other states that are homes to the Marcellus Shale play. Seen as a compromise, the language falls short of interstate pipeline companies’ call for more penalties for federal and state agencies that don’t comply with FERC timelines (E&E Daily, May 7).

Also included is a Franken amendment that qualifies tribal entities for DOE grants that states can now apply for, as well as language by Democratic Sen. Mazie Hirono of Hawaii that would ensure U.S. territories and the District of Columbia can also partake in DOE’s loan guarantee program.

The package also includes language from Heinrich and Sen. Cory Gardner (R-Colo.) that would direct the DOE secretary to establish publicly accessible microlabs near existing national labs and authorize $50 million in appropriations for the effort in fiscal 2016.

The committee also advanced language pushed by ranking member Maria Cantwell (D-Wash.) to reform a section of the energy bill addressing hydropower. Murkowski said she reluctantly agreed to sign onto the top Democrat’s proposal to maintain the panel’s bipartisan progress but signaled pushback.

“But make no mistake, I will continue fighting for meaningful reforms to enable timely, reasonable and certain hydroelectric regulation,” Murkowski said. “We’re going to live to fight another day on this issue.”