Hints of potential compromise emerge in new energy bill drafts

By Nick Juliano, Hannah Northey | 05/07/2015 07:28 AM EDT

An energy bill is continuing to take shape on Capitol Hill as lawmakers on both sides of the aisle yesterday floated infrastructure and supply proposals they hope to see included in a comprehensive, bipartisan piece of legislation.

An energy bill is continuing to take shape on Capitol Hill as lawmakers on both sides of the aisle yesterday floated infrastructure and supply proposals they hope to see included in a comprehensive, bipartisan piece of legislation.

The House and Senate energy committees continue to solicit proposals for a bill to address energy supply, infrastructure, efficiency and regulatory reforms. Several senators introduced bills yesterday and more are expected today, as Energy and Natural Resources Chairwoman Lisa Murkowski (R-Alaska) has asked her colleagues to get their ideas in this week. The chairwoman is expected to announce more energy bill hearings today.

In the House, the Energy and Commerce Committee yesterday released two discussion drafts on hydropower and natural gas pipelines, ahead of the Energy and Power Subcommittee’s third energy bill hearing next week.


The pipeline draft — and a similar Senate bill — indicated an effort to find common ground on the issue of how to expand the nation’s network of natural gas pipelines. The new proposal sets a deadline on federal reviews but does not mandate automatic approval if the deadline is missed. It is seen as a toned-down version of legislation the House passed several times last year — and again in January — over sharp objections from the White House.

While the pipeline revision is a sign of possible compromise, a few other bills floated yesterday were straightforward reintroductions of ideas that have previously run into roadblocks across the aisle. Some members also offered new ideas they hope to become part of an energy bill.

Pipeline compromise

Pipeline proposals floated by Republicans in both chambers appeared to show the first signs of compromise.

Republicans on the House Energy and Commerce Committee appeared to take a step back from a controversial bill aimed at fast-tracking natural gas pipelines that drew Democratic opposition and a White House veto threat earlier this year.

Instead, they pivoted to draft language they hope will be more palatable and draw wider support.

The draft is most notable for what it does not include, compared to Kansas Republican Rep. Mike Pompeo’s "Natural Gas Pipeline Permitting Reform Act," H.R. 161, which passed in January over a White House veto threat.

Pompeo’s bill would have given the Federal Energy Regulatory Commission a year to review pipeline applications. Additional permitting or licensing agencies would have no more than four months after FERC’s review to approve or deny the project; otherwise, it would be allowed to go forward within 30 days.

The Energy and Commerce draft eliminates the automatic approval provision from Pompeo’s bill, instead opting for a conflict resolution process if agencies take too long.

The issue of infrastructure has drawn far-reaching bipartisan interest on Capitol Hill as production of shale gas grows — and with it, the need for pipeline infrastructure to move that gas from producing regions to hungry markets. The focus is squarely on FERC, the federal agency that sets the schedule for conducting environmental reviews of proposed natural gas interstate pipelines before granting permits. Under the current law, applicants can take the rare step of filing a lawsuit against any state or federal agency that doesn’t comply with the timelines FERC lays out.

Pompeo’s bill earlier this year drew a sharp back-and-forth debate between Republican proponents and Democrats who warned that the language would push dangerously short reviews of complex pipelines. The Obama administration warned that Pompeo’s bill would impose unworkable timelimes on FERC (E&ENews PM, Jan. 21).

The same sort of dealmaking could be seen in the Senate.

Republican Sen. Shelley Moore Capito of West Virginia, one of several states home to the Marcellus Shale play, unveiled the "Oil and Gas Production and Distribution Reform Act," a bill that would also lay out a conflict resolution process for agencies that don’t comply with FERC’s time frame. Sens. Heidi Heitkamp, a North Dakota Democrat, and Bill Cassidy, a Louisiana Republican, co-sponsored the bill.

The Senate bill also lays out a process for publicly tracking the review process and requiring federal agencies to report problems to FERC and Congress. It will likely be tweaked to clarify that it addresses interstate natural gas pipelines, according to a spokeswoman for Capito’s office.

Whether the draft language will succeed in drawing the support of the interstate pipeline industry is yet to be seen. Don Santa, CEO and president of natural gas advocacy group the Interstate Natural Gas Association of America Foundation, has said provisions in the Pompeo bill are critical to ensuring that FERC enforces deadlines for permitting agencies as it conducts environmental reviews of proposed gas pipelines.

Pompeo’s bill passed the House in January, with 14 Democrats joining all Republicans in supporting it, but a companion has not been introduced in the Senate. The White House threatened to veto it at the time, saying that while it recognized the need for additional infrastructure, the bill could force hasty decisions based on incomplete information and lead to denial of projects that otherwise would have been approved. In threatening the veto, the administration also noted that FERC has completed 91 percent of its pipeline reviews within a year since 2009.

Hoeven, Donnelly reintroduce cross-border pipeline bill

Sens. John Hoeven (R-N.D.) and Joe Donnelly (D-Ind.) today reintroduced legislation meant to make it easier to build pipelines and power lines between the United States and Canada or Mexico.

The "North American Energy Infrastructure Act" mirrors a cross-border bill they sponsored last year. The bill would replace an existing requirement for cross-border projects to obtain a presidential permit and impose a 120-day deadline for the State Department, in the case of oil pipelines, or the Department of Energy, for transmission, to complete National Environmental Policy Act reviews and approve or deny the projects. Natural gas pipelines would have to be approved by DOE within 30 days.

NEPA’s scope also would be curtailed by the bill, which directs federal agencies to consider only the part of the pipe or wire that physically crosses the border without taking into consideration environmental or climate change impacts associated with the project as a whole.

Bill supporters say it is meant to eliminate the types of delays that have plagued the Keystone XL pipeline, which has been awaiting a decision on its presidential permit for most of President Obama’s term.

"Energy infrastructure projects are too important to our economy and our national security to be dragged out, virtually for years in the case of the Keystone XL pipeline," Hoeven said in a statement. "We need a process that is fact-based, transparent and nonpartisan — a process that serves the interests of the American people now and into the future. Our bill achieves that goal."

Despite its bipartisan support, a previous version of the bill drew sharp objections from the Obama administration. A companion bill from Reps. Fred Upton (R-Mich.) and Gene Green (D-Texas) passed the House last year with 17 Democrats on board. But the White House said Obama would veto the bill if it ever reached his desk, saying it would "impose an unreasonable deadline" on permitting decisions and prevent full consideration of issues that "could result in serious security, safety, foreign policy, environmental, economic, and other ramifications."

Murkowski has said she is interested in working closely with the administration in developing the broader energy bill and has pointed to DOE’s recently released Quadrennial Energy Review (QER) as a potential template for parts of the legislation.

The QER includes a chapter on "Integrating North American Energy Markets," but its only discussion of presidential permits comes in a single reference to pending permit applications for transmission lines filed at DOE.

While the QER does not propose any fundamental reform to the existing process, it does call for the creation of partnerships among various government agencies, universities and nonprofits to study U.S. regulations "to identify gaps, best practices, and inconsistencies with regulations in Canada and/or Mexico with the goal of harmonization," according to a summary of its recommendations.

The flurry of bills being introduced from both sides of the aisle this week will serve as the basis for an upcoming hearing designed to craft the energy bill’s infrastructure title, but not all bills will make it into the final package.

Shaheen targets heat efficiency with new bill

Sen. Jeanne Shaheen (D-N.H.), one of the Senate’s leading efficiency advocates, yesterday introduced a new bill aimed at helping factories, hospitals and other large facilities more widely deploy heat-recovery technologies.

The bill would direct DOE and FERC to establish recommendations, which states would have the option to follow, to overcome regulatory barriers to combined heat and power (CHP) and waste heat to power (WHP) technology. It also would establish a voluntary $5 million U.S. EPA grant program to assist states that would like to update their air pollution regulations to use "output-based" emissions standards, which Shaheen says can encourage CHP and WHP.

"It’s important that rules regarding energy generation keep pace with new advancements in efficient technology," Shaheen said in a statement. "Combined heat power and waste heat to power have tremendous potential for facilities around the country and we should be doing everything we can to spur their use."

A Shaheen spokesman said she hopes to see the bill included with in the energy bill’s supply title.

Markey reintroduces pipeline repair bills

Sen. Ed Markey (D-Mass.) yesterday reintroduced a pair of bills aimed at repairing old natural gas pipelines, which leak methane, a potent greenhouse gas.

"When we fix old, leaking natural gas pipelines, we can help save lives and money and put people to work building new critical infrastructure," Markey said in a statement.

The "Pipeline Modernization and Consumer Protection Act" would require pipeline operators to accelerate repairs of leaky lines or those that are prone to leaking and to consider making the leakiest pipes a priority. The "Pipeline Revolving Fund and Job Creation Act" would establish a grant program at the Pipeline and Hazardous Materials Safety Administration to support state revolving funds aimed at repairing leak-prone pipelines. Sens. Sheldon Whitehouse (D-R.I.) and Brian Schatz (D-Hawaii) are co-sponsoring the bills.

Both bills were referred to the Commerce, Science and Transportation Committee — of which Markey is a member — not ENR. But a Markey spokeswoman said he introduced the bills yesterday to have them considered for inclusion in an energy bill. It remains to be seen how or whether additional committees get involved in the process. Neither bill was considered in committee last year.