Washington Energy Update
On the political front, Rep. Kevin McCarthy (R-23-CA) was elected to serve as House Majority Leader following Rep. Eric Cantor’s (R-7-VA) departure from the position at the end of July. Cantor announced his departure from the leadership slot after his recent primary loss. Rep. Steve Scalise (R-1-LA) was elected to replace McCarthy as Majority Whip.
On the legislative front, this past week the Senate and the House were both in session, with focus, as is typical for this period of the year, on spending bills. Election year politicking, however, does not augur for ultimate enactment of appropriations bills until after the election, as the prospect of controversial votes is stalling bill consideration. On the Senate side, for example, debate on HR 4660, the Fiscal Year (FY) 2015 Commerce, Justice, Science and Related Agencies Appropriations Act, was suspended after policy makers were unable to reach agreement on amendments. This came only days after the markup of the typically noncontroversial Energy and Water spending measure was pulled from full Appropriations Committee consideration amidst the threat of Sen. McConnell’s (R-KY) expected Clean Air Act–related amendment regarding the Environmental Protection Agency’s (EPA) proposed carbon reduction regulations from existing power plants. Notably, Senate Appropriations Committee leaders decided the previous week to delay consideration of the more controversial Labor – Health and Human Services spending bill. Insiders anticipate that further consideration of the measures will likely happen as part of an overall spending package after the mid-term elections.
Meanwhile, the House Appropriations Committee cleared its $34 billion Energy and Water spending bill, which funds fiscal year 2015 programs under the direction of the Department of Energy (DOE) and the Army Corps of Engineers. The bill increases DOE funding for research and development for coal, natural gas, oil and other fossil fuel technologies, totaling $593 million, while renewable energy programs would undergo a $113 million reduction from FY2014 levels. The measure also includes a number of environmental riders, including one directed at the EPA Waters of the U.S. proposed rulemaking, which detractors contend broadens Clean Water Act jurisdiction. Another mining waste related rider prevents the Army Corps of Engineers from working on a new rule for the waste left over from mining operations like mountain top removal called “fill material.”
This week the House will consider a number of bills during its Energy Week agenda including H.R.6, the Domestic Freedom Global Prosperity Act, which as reported in a previous Washington Energy Update, would provide expedited approval to exports of natural gas to World Trade Organization countries. The House is likely to pass the bills although ultimate Senate consideration is unlikely. The Senate is also in this week although consideration of energy related matters is unlikely. Notably, any Capitol Hill activity before the week long 4th of July break will be overshadowed by Monday’s Supreme Court’s decision to limit the Environmental Protection Agency’s authority over greenhouse gas emissions from stationary sources under the Clean Air Act Prevention of Significant Deterioration (PSD) program. Please see a Sidley Update regarding the decision here.
Other Items of Interest:
- Senate Energy and Natural Resources Committee Approves FERC Nominees: Last week, after a lengthy stalemate regarding the Federal Energy Regulatory Commission (FERC) leadership, negotiations between the White House and Senate policymakers resulted in the approval of President Obama’s FERC nominees through the Senate Energy and Natural Resources Committee. Pursuant to the agreement, current acting FERC Chairwoman Cheryl LaFleur will remain as head of the Agency for another nine months after she is reconfirmed by the full Senate. Obama’s other nominee, Norman Bay, the current FERC Director for Compliance, is expected, assuming the Senate approves his nomination, to become Chair sometime around mid-2015. Bay has faced probing questions regarding his policy positions on certain matters. Various policymakers, including Sen. Joe Manchin (D-W.Va.) advocated for this compromise amidst concerns surrounding Bay’s potential inexperience. At this juncture, it still remains unclear when a vote on the nominations will occur in the Senate, although some insiders have speculated it could occur as early as this week.
- House Republican Policymakers Continue Efforts to Highlight EPA’s Carbon Reduction Proposals. As reported in the previous Sidley update, the House Energy and Power Subcommittee held its hearing on EPA’s recently proposed carbon reduction regulations to cut carbon dioxide emission from existing power plants. Janet McCabe, the nominee to head the Office of Air and Radiation (OAR) and OAR’s acting head, was the lone witness. McCabe defended the Agency’s proposal, which was designed to reduce existing power plant carbon emissions by 30 percent by 2030 as compared to 2005 levels, and highlighted the flexibility the proposed guidelines offers for individual states. Predictably, Republicans and Democrats expressed skepticism regarding the proposal in the case of the former or praised the proposal in the case of the latter. Policymaker questions focused mostly on the proposal’s impacts to consumers and the Agency’s legal basis for the draft regulation.
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