After KXL, attention to turn to comprehensive energy bill

By Nick Juliano | 01/09/2015 07:46 AM EST

Consideration of the Keystone XL pipeline will bring plenty of drama to the Senate over the next two weeks, but that will be just the opening act for energy policymaking in the 114th Congress.

The main event will come later this year, when majority Republicans set about the delicate task of balancing the needs of traditional and alternative energy sources and between environmental protection and economic growth, to come up with the type of comprehensive energy bill that has not succeeded for the last eight years. The question is whether there is a bill that can satisfy the majority of Republicans and bring along enough Democrats to pass both chambers and secure the president’s signature.

"Energy packages are always a combination," said Sen. Debbie Stabenow (D-Mich.), a member of the Energy and Natural Resources Committee, citing an auto retooling loan provision she secured in the 2007 energy law to boost hybrid and electric vehicles. "But that was also part of a bill that had more traditional things, so it’s always a balance. But it needs to be tilted to the future, not the past."

The Energy and Natural Resources Committee yesterday advanced legislation to approve KXL, and a procedural vote is scheduled for Monday evening (E&ENews PM, Jan. 8). The Senate is expected to spend at least the next two weeks on the bill, working through a lengthy amendment process Republicans promised as part of their return to "regular order" in their campaign to retake the majority. Democrats are preparing amendments on climate change science, clean energy and oil exports, among other hot-button issues, and the amendment debate will include consideration of more broadly popular measures such as energy efficiency.

"I’m sure Senator McConnell and Senator Reid will have their hands full" negotiating amendment agreements, said ENR Committee ranking member Maria Cantwell (D-Wash.), referring to Majority Leader Mitch McConnell (R-Ky.) and Minority Leader Harry Reid (D-Nev.).

The amendments will partially be an exercise in political point-scoring, but they also will offer senators from both parties an opportunity to test the waters on a variety of issues that could come up later this year ahead of a more robust debate on comprehensive energy legislation.

Sen. Martin Heinrich (D-N.M.), an Energy Committee member who opposes KXL but this week co-sponsored a bill to promote liquefied natural gas (LNG) exports, said he hoped the amendments would clarify both party’s positions ahead of a broader energy debate.

"My hope is that … we are the party of a forward-thinking energy policy, where we think about how we produce more domestically and how do we move our fuel sources from dirty to clean at the same time. And [KXL] is exactly the opposite," he said in a brief interview this week. "I hope that our amendments will reflect that contrast between the two sides."

Still, he said, this week’s debate should not preclude the two sides from working together on a more broadly focused energy bill.

"This is a symbolic battle more than anything else," he said. "Hopefully, we’ll get to a point where we’re having more of a substantive fight in the committee — fight might not even be the right word — substantive discussion in the committee to get to a comprehensive energy policy that takes us forward at least incrementally."

ENR Chairwoman Lisa Murkowski (R-Alaska) opened yesterday’s KXL markup promising to begin work later this year on a comprehensive energy bill drawing from ideas outlined in a blueprint she released at the beginning of the previous session. The bill will focus on four key areas, she said: "further strengthening supply, modernizing infrastructure, supporting efficiency, and ensuring federal accountability."

Lawmakers from both parties have priorities related to all of those areas — especially when it comes to energy efficiency, which generally has overwhelming bipartisan support — but there are some clear fault lines that would have to be addressed. For example, Democrats tend to be more supportive of policies to produce more from renewable sources like wind and solar while modernizing the electric grid and building new power lines to bring them to market, while Republicans tend to view oil and gas production and construction of the pipelines they need as higher priorities.

Murkowski’s reference to "accountability" was to programs over which her committee has jurisdiction, such as research and development at national energy laboratories or the loan guarantee program, a spokesman said. But Republicans are more broadly interested in reforming a variety of Obama administration environmental regulations, such as U.S. EPA’s climate rules, and those proposals could eventually become part of an energy bill as it moves through Congress. The key there will be not to go so far in limiting the agency’s authority as to provoke a veto from President Obama.

"I don’t know how many pieces of legislation they want to pass that have no chance of getting the president’s signature, or how many things they really want to produce results on," Cantwell said of the Republicans. "I guess we’ll have to wait and see from them."

At the same time, congressional Democrats or the administration would have to give some ground on the regulatory front, although that could come through administrative actions as well as provisions in an energy bill, aides tracking the process said.

Murkowski is expected to work closely with House Energy and Commerce Chairman Fred Upton (R-Mich.), whose committee, unlike ENR, has jurisdiction over EPA rules that have emerged as top Republican targets. Upton said earlier this week that he would more fully flesh out his agenda after the committee formally organizes, but a GOP aide previously said the focus would be on bills that passed the House last year related to pipelines and efficiency along with measures related to the power grid and that "rein in" EPA (E&E Daily, Jan. 6).

Sen. Lindsey Graham (R-S.C.), who briefly worked on comprehensive climate legislation in 2009 and 2010, said he would vote to overturn EPA’s rules regulating greenhouse gas emissions from new and existing power plants. But he predicted that the effort would ultimately be unsuccessful, and that would open the door to business pressure for a legislative approach to regulating emissions.

"Power companies have come to me; I’ve had other people come to me talking about, is there some compromise here?" Graham said in a brief interview this week. "I think we should try to repeal the EPA regulation because it’s heavy-handed and it’s going to hurt the economy. If that endeavor fails, I think business ought to sit down with consensus-seeking senators and some reasonable environmentalists to see if you could find a substitute."

Of course, a middle ground is never easy, and finding it will become even tougher with the approach of the 2016 elections, in which a handful of senators are contemplating running for president and Senate Republicans will have twice as many seats to defend as Democrats.