What’s in, what’s out of sprawling Senate bill

Source: Geof Koss, Hannah Northey and Manuel Quiñones, E&E reporters • Posted: Thursday, July 23, 2015

After months of preparation, the Senate Energy and Natural Resources Committee began its drive yesterday toward getting major energy legislation signed into law for the first time since 2007.

Staffers for Chairwoman Lisa Murkowski (R-Alaska) and ranking member Maria Cantwell (D-Wash.) began meeting on the legislation in December, hoping to establish an open and honest working relationship.

“We decided early on to work constructively,” a Republican aide told reporters yesterday.

Murkowski and Cantwell agreed Congress needed to bring federal policies up to speed with paradigm-shifting changes in U.S. energy production and technology development.

“When you look across the changing landscape, what do we need to do next?” a Democratic aide said.

From those early talks, staffers began meeting with a broad range of stakeholders that included listening sessions in the senators’ home states. Months of “long and detailed” staff discussions eventually led to the bipartisan bill introduced yesterday (Greenwire, July 22).

While there were obvious policy differences between Murkowski and Cantwell, their staffers worked to find areas of agreement and encouraged other senators to come forward with their own ideas, an exercise a GOP aide called “shaking the tree.”

Falling from that tree were 114 bills. That and months of hearings gave the senators and staff plenty to think about.

A Murkowski spokesman said more than half the bills incorporated into the final product — about 30 — were based on Republican proposals, and more than 20 stemmed from Democratic ideas.

The 357-page package released yesterday includes long-sought Republican goals of gauging electric reliability; expediting natural gas exports; cementing hydropower as a “renewable” resource; and securing the supply and research associated with minerals necessary for energy development and economic growth, including rare earth elements.

The proposal also includes Democratic requests for permanent reauthorization of the Land and Water Conservation Fund and language aimed at advancing distributed generation and renewables. And there were many policies that touched on areas of bipartisan agreement.

One high-profile provision, for example, addressed the Strategic Petroleum Reserve, which has been in the headlines lately as lawmakers look to tap the fund to pay for unrelated legislation. The energy measure aims to tamp down enthusiasm for using the SPR as a “piggy bank,” as Murkowski puts it, by modernizing the aging reserve and reaffirming and expanding the use of occasional auctions. Specifically, the bill establishes criteria that require SPR sales to be used for energy security purposes.

The measure’s prescriptions “should be the lens” through which Congress views the SPR, a GOP aide said. Staff from both parties emphasized there’s “no daylight” between Murkowski and Cantwell on the SPR, and both have criticized the rush to tap the reserve as a budget offset in recent weeks.

Aides from both parties said additional changes to the bill are possible before the markups, saying time constraints caused by the sheer number of bills sent to the committee complicated efforts to resolve every issue.

The Congressional Budget Office does not score bills until after they begin to move through the legislative process, but aides said the measure was written with the intent of being deficit-neutral. That could change later, if a tax title is added on the floor or if there’s a decision to add mandatory funding for the Land and Water Conservation Fund, which is permanently authorized by the bill.

There were joint discussions with the Obama administration during the bill’s drafting, although they largely centered on specific issues.

“There have been plenty of instances where we’ve asked the relevant agencies for technical assistance,” a Democratic aide said, but the administration had not seen the bill before its release yesterday afternoon.

‘Bipartisan universe’

Despite the bill’s inclusion of proposals from both sides of the aisle, Murkowski spokesman Robert Dillon said he expects a robust amendment process.

“The bill represents the bipartisan universe where we could find agreement; there are outliers that remain priorities,” he said. “And that certainly goes for Democrats.”

On the Democratic side, an aide highlighted the bill’s measures to boost the security of the grid and other energy infrastructure from cyberattacks, which includes giving the Department of Energy explicit statutory emergency powers to respond to protect the bulk-power system. It was “time to plant the flag on cybersecurity,” the aide said.

A Republican staffer said discussions on cybersecurity were informed by years of debate among committees with a slice of the issue.

The long-standing and oft-debated point made during hearings on Capitol Hill is that no single federal entity is designated under the Energy Policy Act of 2005 to quickly respond to protect the grid during an emergency. Under the Senate bill, the DOE secretary would be required to coordinate with grid operators, other federal agencies, Canada and Mexico when exercising the new emergency authority.

The bill would also direct the Federal Energy Regulatory Commission to adopt regulations to permit entities subject to emergency orders to seek recovery of “prudently incurred costs” associated with implementing the order that can last for up to three months.

The measure directs DOE to conduct studies on energy storage and the interoperability of the grid and new communication networks. It would direct the department to spearhead a new grant program to demonstrate grid modernization and promote micro-grids. Under the bill, DOE would also be tasked with issuing guidance on criteria for net metering studies.

Murkowski’s proposal for cutting red tape and expanding transmission construction also appears in the legislation. The bill would establish an Interagency Rapid Response Team for Transmission and establish an Office of Transmission ombudsperson to manage delays and complaints related to transmission permitting.

Also notable is what the bill leaves out.

Out is New Mexico Democrat Martin Heinrich’s proposal to give FERC backstop authority to approve projects that face state-level delays, as well as Arkansas Republican John Boozman’s bill to limit federal eminent domain authority. Whereas Heinrich is from a state seeking to fast-track long-distance transmission to tap isolated pockets of wind and solar, Arkansas has shown a reluctance to accept the government blessing lines that don’t have state consent.

Similar cuts can be seen around liquefied natural gas exports.

The bill would require DOE to make final decisions on applications within 45 days of completion of National Environmental Policy Act reviews by FERC and the U.S. Maritime Administration.

The bill also grants the U.S. Court of Appeals for the District of Columbia Circuit or the circuit in which the LNG export facility is located exclusive jurisdiction over any civil action brought about by DOE’s failure to act on an export application. And under the bill, consideration of those civil actions would be expedited.

But not included are proposals from independent Sen. Angus King of Maine that would have imposed limits on DOE’s authority to approve certain LNG export projects and required FERC to consider regional supply constraints when evaluating LNG export applications (E&E Daily, May 11).

Coal, critical minerals

On coal, the Senate bill includes a section promoting DOE research and development on trapping and storing power plants’ carbon emissions.

Pro-coal Democratic Sens. Joe Manchin of West Virginia and Heidi Heitkamp of North Dakota introduced a series of bills on the issue this year, hoping at least some of the proposals made it into Murkowski’s draft (E&E Daily, May 13).

The coal industry has been focusing its lobbying efforts on fighting Obama administration regulations. But advocates of coal-related technology were hoping for inclusion.

The House energy bill doesn’t have a section promoting coal technology research and development, but some lawmakers during yesterday’s Energy and Commerce subcommittee vote voiced their desire to see provisions included (Greenwire, July 22).

The Senate legislation also includes another long-standing Murkowski priority: securing the supply and research associated with minerals necessary for energy development and economic growth, including rare earth elements.

Appearing to borrow heavily from Murkowski’s S. 883, the bill introduced yesterday would overhaul mineral policies. And it would create a system for the administration to designate materials as critical (E&E Daily, March 26).

The legislation would require the Interior Department to review U.S. mineral resources and includes measures to speed up the mine permitting process. It also aims to boost ongoing DOE research efforts into recycling and substitutes.

Democrats have supported efforts to address critical mineral supply and technology issues but have often balked at speeding up permits.