ENERGY POLICY

House GOP holds off on crude exports -- for now

House Energy and Commerce Committee Republicans have decided against including a controversial repeal of the crude exports ban in the panel's comprehensive energy package that is set for an initial subcommittee markup tomorrow.

The 95-page bill, unveiled last night, sticks to the blueprint laid out by committee leaders earlier this year, with a heavy focus on modernizing the electric grid and energy workforce, promoting efficiency, as well as taking steps to factor the oil and gas boom into U.S. domestic and foreign policy considerations.

After pledging to work with Democrats on a bill that could advance with bipartisan support, Energy and Commerce Chairman Fred Upton (R-Mich.) steered clear of one politically charged issue -- ending the 40-year-old crude exports ban. Aides said the bill reflects the bipartisan agreement of the principal negotiators, although as a committee memo notes, amendments can be submitted up to two hours before being offered at markup.

Democrats expressed skepticism over repealing the ban during a hearing earlier this month, with one industry ally -- Texas' Gene Green -- saying he would withhold his support for the bill if a repeal was included (E&E Daily, July 10).

Instead, the bill's energy security and diplomacy title requires the Energy Department to develop "energy valuation" methods "to ensure that energy-related actions that significantly affect the supply, distribution, or use of energy are evaluated with respect to their potential impact on energy security, including their impact on consumers and the economy; energy supply, diversity and resiliency; well-functioning and competitive energy markets; United States trade balance; and national security objectives," according to a committee summary.

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The bill also directs DOE to submit a plan to Congress for improving planning with Canada and Mexico "to enhance energy integration, strengthen North American energy security, and promote efficiencies; and improve collaboration with Caribbean and Central American partners on energy security."

DOE is further directed to convene at least four forums -- two with Atlantic trade partners and two with Pacific nations -- to discuss the promotion of energy security.

The House language reflects compromises the committee made to win bipartisan support, both in what it contains and what was left out.

The bill, for example, does not contain language included in an earlier discussion draft that would have imposed a timeline for DOE to issue decisions on exports of natural gas. Nor does it include a proposal that Berkshire Hathaway Energy had floated to ease purchase requirements for utilities under a 1970s law aimed at boosting renewables and efficiency.

One provision included in the House package is for the Federal Energy Regulatory Commission to approve or reject natural gas pipelines within 90 days of completing an environmental review. Yet the language contains no penalties for failing to act, instead laying out a process through which agencies can resolve conflicts or delays.

The interstate pipeline industry said the final bill must include consequences for agencies contributing to FERC's environmental reviews that don't act in a timely manner. Without teeth, the Interstate Natural Gas Association of America (INGAA) has warned reviews of new projects will lag (E&E Daily, June 2).

Other provisions have and will continue to face stiff opposition among regulators.

The bill, for example, would set up an Office of Compliance within FERC to ensure consumers are protected and to inform Congress about FERC policy directions. But FERC officials have warned that such a set-up would build barriers between the enforcement staff and the commission. Critics have also noted that the House has included no new funding for the office (Greenwire, June 4).

But other portions of the bill have -- and will continue to draw -- support in the electric industry, including language that lays out a path of relief for utilities caught between Energy Department orders to continue operating and violating environmental regulations. The bill would ensure that power plants operating in compliance with an order under the Federal Power Act -- orders to operate to maintain reliability -- won't be found in violation of environmental laws.

The bill would also bolster communication between DOE and industry to protect oil and gas infrastructure during emergencies. Another provision would allow the secretary of Energy to take swift action -- without notice or hearings and facilitating information-sharing -- to protect the grid from rare solar flares, storms, physical or cyberattacks or an electromagnetic pulse.

Under the bill, the secretary would also have the authority to assemble a reserve of transformers to shore up the electric grid, as well as a voluntary program to identify and promote cyber-secure products.

In the efficiency title, the package would also change the definition of "energy savings" in energy savings performance contracts, or ESPCs, to include savings generated from renewable energy rebates and credits.

ESPCs allow federal agencies to enter into contracts with companies or utilities to install energy efficient systems and equipment at no upfront cost. The utilities or energy service companies hired to carry out the work are repaid through the savings generated from the efficiency upgrades.

Under the bill, DOE would be required to evaluate the savings value of existing ESPCs and report on past energy savings contracts that haven't been implemented.

The program and a similar one for utility energy service contracts have delivered billions of dollars of savings but remain mired in a budgetary battle over how the Congressional Budget Office scores long-term energy savings projects (Greenwire, March 18).

The title also includes language that would give stakeholders in the debate over energy savings standards for gas furnaces additional input before DOE puts out its final furnace rule next summer.

The bill would also require DOE to seek ways to improve energy efficiency at federal data centers and expand the agency's assistance to public schools that undertake energy retrofitting projects.

Tomorrow's markup comes as lawmakers are scrambling to wrap up an assortment of legislative business before heading home for the long August recess. A committee statement made no mention of a full committee markup, but should the bill receive the blessing of all panel members later this week, that should provide sufficient time to ready for a floor debate next week as planned.

In the statement, Energy and Power Subcommittee Chairman Ed Whitfield (R-Ky.) noted the "bipartisan collaboration that has gone into putting together this comprehensive bill."

Upton called the subcommittee vote "an important milestone" in meeting his "Architecture of Abundance" energy blueprint. "Wednesday's markup is the next step in ensuring we not only get this legislation done but get it done right," he said.

Twitter: @geofkossEmail: gkoss@eenews.net

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