TRP Clean Energy Report

August 11, 2014

The House and Senate have adjourned for a five-week summer recess. Before departing, the House on August 1 approved a border security bill (H.R. 5230) in 223-189 vote. House members also passed a second measure (H.R.5272) by 216-192 that would limit the President’s power to shield undocumented immigrants from deportations. Passage in the House came a day after Senate Republicans blocked consideration of an emergency spending bill (S. 2648) that would have provided $2.7 billion in federal aid to the agencies tasked with addressing the border crisis. Senators also approved veterans’ reform legislation (H.R. 3230) 91-3, sending the package to President Obama. The House passed the veterans’ bill on July 30 in a 420-5 vote. The Senate also voted 81-13 to approve an $11 billion highway funding bill (H.R. 5021). Earlier in the week, the House voted 225-201 to authorize a lawsuit against President Obama (H.Res. 676) for delaying the Affordable Care Act's employer mandate. In the House, members debate a series of suspension bills before taking up legislation (H.R. 4315) that would make changes to the Endangered Species Act.

When Congress returns in September, lawmakers plan to take-up a series of issues, including a continuing resolution to fund the government past Sept. 30, a border security bill, reauthorization of the Export-Import Bank, extending the Internet Tax Freedom Act and consideration of a fiscal 2015 Defense Authorization bill. The Senate may also consider a constitutional amendment regarding campaign financing, legislation on the minimum wage, student loans and a bill to address the Supreme Court’s Hobby Lobby ruling. Senate leaders say the chamber will be in session straight through Sept. 23rd, when members will adjourn again until after the Nov. election. The House is scheduled to be in session from Sept. 8-19 and Sept. 29-Oct. 2nd.

Renewable Energy
Begich Introduces Bill to Establish NOAA Support for Renewable Ocean Projects
On July 30, Sen. Mark Begich (D-AK) sponsored legislation designed to spur renewable energy production in the ocean. The “Renewable Energy Environmental Research Act,” directs the National Oceanic and Atmospheric Administration (NOAA) to establish a research program that can identify environmental data to assist in the development of renewable energy, particularly related to ocean energy. The Chairman of the Senate Commerce Subcommittee on Oceans, Begich said his bill aims to make federal research more accessible to those interested in renewable energy projects. In touting his bill, Begich noted that tidal data collected by the government could then be used to select locations for wave energy infrastructure. (E&E News, Estepa, 7/30).
Climate Policy
Van Hollen Introduces Bill to Cap GHGs, Require Carbon Permits
On July 30, Rep. Chris Van Hollen (D-MD) introduced a bill that would cap greenhouse gas emissions by 80 percent by 2050 and require energy extractors to purchase carbon permits, with any revenue generated returned to American households. Van Hollen touted his bill as a simpler alternative to Democrats’ cap-and-trade legislation, which cleared the House in 2009 but stalled in the Senate. Van Hollen’s bill would apply only to companies that extract or import oil, gas and coal, as opposed to the economy-wide class of GHG emitters included in the 2009 bill.  Many larger-scope cap-and-trade bills would have directed revenue streams to renewable energy technologies and to assist coal-fired power plants adopt technology to capture and store carbon dioxide (BNA, Scott, 7/30).
President Announces Series of Resiliency Initiatives
On July 16, President Obama announced a series of programs aimed at improving the government’s response to climate change, from preserving drinking water during droughts to updating rural electrical grids. Among the proposals is a $10 million program to provide training in climate adaptation to American Indian tribes, a $13.1 million 3-D mapping effort to identify areas at risk of flooding and an initiative by the EPA to fund green infrastructure in 25 communities. The plan also expands on a $1 billion competition announced by Obama in June to help communities recently struck by disasters improve their resiliency. The first is a risk assessment period in which localities can receive funding for community-led approaches that increase preparedness for future disasters.
A smaller number of those communities will continue on to the second phase, in which they'll receive federal funding to implement their resiliency plans. The third program awards $236.3 million to eight states for improved electric infrastructure in rural areas. The White House indicated that the funding from the Department of Agriculture would be used to install smart grid technologies. The plan also says that the Federal Emergency Management Agency will release new guidelines requiring states to consider climate change in their state hazard mitigation plans. (E&E News, Chemnick, 7/16).
Energy Policy
Manchin Removes Coal Provision from Ex-Im Bank Bill
On July 31, Sen. Joe Manchin (D-WV) introduced his bill to re-authorize the Export-Import Bank without a controversial provision to roll back the bank's restrictions on financing overseas coal plants. Manchin initially pushed for the provision, which blocks guidelines that prohibit Ex-Im funding of coal plants abroad unless they adopt carbon capture technology. Manchin will push the provisions as an amendment to the Ex-Im reauthorization bill when the measure comes to the Senate floor. He had pushed to include it in the text of the bill, but those efforts were opposed by Democrats and environmental groups that threatened to oppose the bill if the language were included. Rather than mandating overseas coal plants adopt carbon capture, Manchin’s amendment requires that applicable Ex-Im projects use the “best commercially available clean coal technology” available. The amendment is expected to face strong opposition from liberal Democrats who otherwise support re-authorizing the Ex-Im Bank. Manchin’s coal proposal has been floated in the House, but its path forward remains unclear due to GOP opposition to the Ex-Im Bank (The Hill, Barron-Lopez, 7/30; BNA, Natter, 7/31).
Revenue Sharing Bill Stalls in Senate
In July, Senator Mary Landrieu (D-LA) cancelled a mark-up on her bill (S. 1273) to ship more oil and gas revenues to coastal states. Little activity is expected on the bill prior to the November midterm elections. Landrieu introduced the “FAIR Act” last year, with ENR Committee ranking member Lisa Murkowski (R-AK) as lead cosponsor. Their bill would authorize 37.5 percent of royalties from offshore oil and gas production in federal waters to go all coastal states that support energy exploration. Currently, only Texas, Louisiana, Mississippi and Alabama are authorized to share directly in royalties from energy production in federal waters. Last week, Landrieu downplayed the GOP assertions, saying the bill remained a “work in progress.”
On July 23, the ENR panel held a hearing to review revenue raised from resource extraction, including oil and natural gas drilling and coal mining. Landrieu said the hearing was a means to generate support for her legislation.  Landrieu later said that action on revenue sharing would need a broader coalition of support, and would likely need to address separate issues, including payments in lieu of taxes (‘PILT’), the Land and Water Conservation Fund and Secure Rural Schools. Landrieu and other advocates hope that moving the four items together will generate bipartisan support because it would impact a broad group of geographic concerns. (E&E News, Juliano, 7/23).
Energy Efficiency
Action on Energy Star Bill Unlikely in House Committee
In July, House Energy and Commerce Committee aides said the panel is unlikely to consider legislation to ban class-action lawsuits over products that wrongly carry the Energy Star label.  Aides said the legislation, sponsored by Reps. Bob Latta (R-OH) and Peter Welch (D-VT), lacks the bipartisan support necessary to advance. Also at issue are connections between corporate supporters of the bill and Committee Chairman Fred Upton (R-MI).  While there are no House rules requiring lawmakers to divest private assets, questions have arisen over Upton’s personal holdings in Michigan-based Whirlpool, which stands to benefit if the legislation advances. E&C committee staffers have not said if Upton would ultimately recuse himself from any votes on the Whirlpool-backed measure. (E&E News, Yachnin, 7/23).
Alternative Fuels
Upton to Push for RFS Reform in Next Congress
House Energy and Commerce Chairman Rep. Fred Upton (R-MI), is looking to advance a renewable fuel standards bill next year, according to several senior aides. The RFS was included in a 2007 energy law, and mandates that refiners blend ethanol and other renewable fuels into the nation's fuel supply. The 2014 blending requirements called for reductions in advanced biofuels and renewable fuels – a move likely to trigger litigation from pro-renewable fuel groups.  Upton led a 2013 effort to makes changes to the RFS, but the effort stalled after oil companies and ethanol producers failed to find middle ground. With lawsuits expected over the EPA’s blending requirements for 2014, Upton is hoping that stakeholders will be motivated to work together on approach that ultimately gains greater consensus. Even if a RFS reform bill passes the House, it may face tougher odds in 2015 if Democrats retain control of the upper chamber.  Sen. Barbara Boxer (D-CA), chairwoman of the Senate Environment and Public Works Committee, has expressed opposition to altering the RFS mandate (BNA, Natter, 7/24).
EPA Extends 2013 Biofuel Compliance Deadline for Third Time
On July 31, the EPA extended the deadline for refiners to comply with 2013 federal biofuel use targets.  The move marked the third extension of the 2013 Renewable Fuel Standard (RFS) compliance deadline, which was originally to have been Feb. 28 and was delayed until June and then September. Agency officials said the extension was necessary because refiners need to know their 2014 requirements before they can determine how many biofuel credits they may need to carry over from 2013. Final targets for 2014 are expected to be sent to the White House in the coming weeks, at which point the long-delayed rule will enter its final review before public release. Consideration of the proposal at the White House's Office of Management and Budget could also take several weeks. (BNA, Childers, 7/31).
With Appropriations Process Stalled, Continuing Resolution Looms
When Congress returns from the August recess, lawmakers will have only eight working days before the end of the fiscal year on September 30.  While the House was able to move 7 of its 12 annual appropriations bill through the House floor to passage, the Senate has not considered any appropriations legislation on the floor. Congress will likely take up a continuing resolution (CR) after returning in September in order to continue funding for federal programs into the new fiscal year, which begins October 1.
Other news
Critical Mineral Bill Falls Short of Passage in House
On July 23, a bill to secure the domestic supply of rare earth elements failed to pass the House following widespread Republican opposition. House leaders allowed a vote on the legislation (H.R. 1022), but it failed 260-143, falling short of the two-thirds margin needed to win fast-track approval in the House. The bill called on the DOE to research methods of extracting and processing critical minerals, and allowed the agency to coordinate efforts through the Critical Materials Energy Innovation Hub, which provides periodic reporting to Congress.  While the bill garnered bipartisan support, it met with opposition from conservative groups, who opposed the creation of a new government program. Supporters of the bill stripped provisions to make the bill more palatable to Republicans, including new loan guarantees.  In 2013, the House approved similar legislation (H.R. 761) to address critical mineral supply issues, but that bill was more focused on streamlining permits. In the Senate, Energy and Natural Resources Committee ranking member Lisa Murkowski (R-AK) is pushing for consideration of a broader bill (S. 1600) to reform the critical minerals supply chain (E&E News, Quiñones, 7/23).
House Approves Lab-Reform Measure
On July 22, the House unanimously approved legislation (H.R. 5120) that aims to modernize the DOE’s laboratory system. The bill would streamline agency stewardship of the laboratories, smooth the transfer of lab technology to market and enhance public-private partnerships. The legislation was introduced by Reps. Randy Hultgren (R-IL) and Derek Kilmer (D-WA) and won bipartisan support from leadership of the House Science Committee.  A companion bill (S. 1793) was introduced by Sens. Chris Coons (D-DE.) and Marco Rubio (R-FL) earlier this year.
House passage of the bill comes amid growing interest in reforming the DOE lab system. Last year, a private study found that lab management and goals were in need of reform, especially in providing greater flexibility for labs to partner with the private sector. The Administration’s fiscal 2014 budget proposal included the creation of the Commission to Review the Effectiveness of the National Energy Laboratories, which held its first meeting on July 18. (E&E News, Ling, 7/23).