Glance into the Pre-Conference U.S. Energy Bill
Back on April 20, I was shocked to hear the U.S. Senate had passed energy legislation (S.2012). This was just a few months following the U.S. House passing similar legislation (H.R. 8) back in December 3, 2015. I was so surprised because this meant the largely ineffective Congress was only a conference committee – the process of reconciling differences in legislation passed by each chamber – and presidential signature away from establishing broad new energy policy, a feat not accomplished since 2007 (excluding the Recovery Act).
In the months that followed, the probability of the bills making it to conference committee has waxed and waned. Most of the uncertainty is due to Senate concerns over amendments added when the House approved their version of the Senate bill on May 25; amendments that would attract presidential veto. Recently, an agreement was reached to jettison provisions that presented veto concern, potentially expediting a conference committee vote.
So, in case the bills move, I thought it would be beneficial to outline some of the more meaningful energy provisions (excluding the natural resources and environmental provisions that are mostly related to reauthorizing funds and programs, or reallocate revenues) addressed by both the House and Senate legislation.
Of course, much of this could change in the conference process, and many details and provisions have been left out for the sake of brevity. I’ve highlighted some of the more meaningful policies (ignoring much of the excess added on May 25), but as you will see, the legislation is far from ground-breaking.
Energy Bill Provisions Already Passed
- Eliminating the ban on U.S. oil exports – this provision of H.R. 8 was included in the FY 2016 Consolidated Appropriations Act (P.L. 114-113)
- Some grid security provisions that overlapped with H.R.8 or S.2012 were included in the Fixing American’s Surface Transportation Act (FAST, P.L. 114-94) passed on December 4, 2015, including:
- Requiring development of a strategic transformer reserve plan for the bulk power system to be submitted to Congress, and
- Providing new authorities to the U.S. Department of Energy Secretary to issue emergency orders to protect or restore the grid during a grid security emergency.
Major Common Energy Provisions in H.R. 8 and S. 2012
- Grid modernization and reliability – The bills would require a host of reviews pertaining to regional transmission organization (RTO) and independent system operator (ISO) market operations, performance, standards, and other factors to assess reliability, resilience, impacts from renewables dispatch, and fuel diversity. Also, the bills would require rules proposed by federal agencies that impact the bulk power system to undergo a reliability assessment by FERC. Both bills contain funding options for resiliency-based grid modernization. Each bill contains unique language on other grid modernization and reliability initiatives.
- Natural gas exports – Both bills would require the Secretary of Energy to expedite review of natural gas (LNG) export permits to a maximum of 30 (H.R.8) or 45 (S. 2012) days after completion of facility environmental (i.e. NEPA) reviews. Both bills would also require LNG exporters to publicly disclose the destination country for all deliveries.
- Carbon Capture and Storage – Both bills contain provisions to evaluate and make funding recommendations on current DOE-supported CCS projects and programs, while S. 2012 also has a broader set of coal-related research and development initiatives.
Significant Differences between H.R. 8 and S. 2012
- Efficiency and Renewable Energy – Efficiency and Renewable Energy Both bill contain fairly unique language on relatively modest efficiency and renewables measures.
- There is considerable bill overlap on buildings-related energy efficiency measures, but major differences in the treatment of model building energy codes. For example, the Senate bill would require DOE to update residential and commercial building energy codes and DOE can offer funding, technical assistance and compliance oversight for adopting jurisdictions. The House bill would change law pertaining to model energy codes to prevent codes that have payback periods over 10 years, would only require self-certification of compliance, and would eliminate DOE technical and funding assistance.
- Many of the renewables provisions involve federal lands policy. Only S. 2012 reauthorizes the Weatherization Assistance Program, State Energy Program and Vehicle Technologies Program.
- Both bills contain similar provisions to repeal efficiency and renewables studies, programs, and other activies under the justification of housekeeping (e.g. outdated requirements, conforming amendments). However, some of these repeals may be meaningful, including language that would repeal green building standards, fossil-fuel reduction requirements, and a solar commercialization program all applicable to federal buildings.
- Bioenergy Carbon Neutrality – Only S. 2012 has a provision that deems forest bioenergy to be carbon-neutral and that biomass is a renewable energy resources. This language has proved to be extremely controversial.
- Advanced Nuclear Energy – Only S.2012 has provisions that support research, testing, simulations, and regulatory funding to advance the development and licensing of advanced nuclear reactors.
- Critical Minerals – Only S. 2012 includes various policies to identify and designate critical minerals, promote critical mineral development on federal lands, research alternatives to critical minerals, promote recycling and issue related reports.
- Natural Gas Pipelines – Only H.R. 8 includes language that would allow natural gas pipeline rights-of-way through all federally owned lands.
- Cross-Border Infrastructure Projects – The House amendments to S. 2012 on May 25 also included language to expedite authorization of cross-border infrastructure projects for pipelines, water and electricity transmission.