After a busy month and its longest uninterrupted work period in Washington since the onset of the 113th Congress, Congress has left for a one-week Fourth of July district work period. When Congress returns, it will resume much of the undone fiscal work before the month long August recess. Given the party differences on sequester-related funding, it is still widely expected that Congress will need to negotiate and pass stop-gap legislation to fund the government before the 2014 fiscal year begins on October 1, 2013.
As anticipated in last week’s Washington Energy Update, energy/environment activity this past week hit a high point with the President’s formal announcement of his Climate Action Plan during a speech at Georgetown University. As we reported last week in our Update, the Climate Action Plan (CAP) focused on a number of initiatives that are designed to reduce U.S. carbon emissions and also have the United States take a leadership role in international climate change efforts. Following the President’s announcement, Washington insiders spent the rest of the week understanding the implications of the CAP and the Memorandum that the President signed, shortly after his speech, regarding the regulation of power plants.
One open question is the CAP’s implication for EPA Administrator nominee, Gina McCarthy, despite the President’s pleas that she be confirmed. Washington insiders are generally of the view that while McCarthy’s nomination could become further complicated as a result of the President’s announcement and its focus on the regulation of new and existing power plants, her confirmation is still possible. Her prospects for confirmation could diminish, however, should her nomination remain pending when the Agency issues its re-proposal for the regulation of carbon emission standards for new power plants, which the President indicated would come by September 30, 2013. Should she not be confirmed, she will likely remain at the Agency as the head of the Office of Air and Radiation, which has primary jurisdiction over air-related issues and is the office she has held since the onset of Obama’s first term. Senator Blunt (R-MO) continues to keep his hold on McCarthy’s nomination pending the release sometime this summer of the St. John’s Bayou-New Madrid Floodway Project draft environmental impact statement (EIS) that has been at the center of Blunt’s hold on McCarthy’s nomination. It is still unclear whether the release of the EIS would be sufficient to break the impasse, as EPA could still veto the project under its Clean Water Act (CWA) authority.
In other nominee-related news this past week, the Senate re-confirmed Nuclear Regulatory Commission Chair Alison McFarlane to serve a five-year term. Howard Shelanski, nominee for Administrator of the Office of Information and Regulatory Affairs, was also confirmed this past week. OIRA, part of the White House Office of Management and Budget, is charged with the review of proposed federal agency rules to ensure, among other things, consideration of alternatives and the proper assessment of costs and benefits. Shelanski had been the head of the Federal Trade Commission’s Bureau of Economics. The President also nominated former Colorado Public Utilities Commission Chairman, Ron Binz, to serve as Chair of the Federal Energy Regulatory Commission (FERC). Binz, most recently a senior policy adviser at the Center for New Energy Economy at Colorado State University, is, like outgoing FERC chairman Jon Wellinghoff, a strong renewable energy proponent. Binz could face some trouble in his confirmation, especially as nominees for FERC chairs are typically paired with a Republican nominee.
Other Items of Interest:
- House Anticipated to Consider Coal Ash Legislation in July: The House could consider the Coal Residuals Reuse and Management Act (H.R. 2218), as early as the week of July 15, 2013. The bill, approved by the House Energy and Commerce Committee last month with the support of four Committee Democrats, maintains the non-hazardous designation of coal ash and is designed to pre-empt EPA’s coal ash regulatory authority. It sets minimum federal standards and allowing states to develop a permit program. The bill is largely expected eventually to clear the House when it is considered by the full chamber. Passage of a similar bill in the Democratic-controlled Senate, however, remains an open question. Senators Baucus (D-MT) and Hoeven (R-ND) are still expected to introduce similar Senate legislation.
- Baucus/Hatch Indicate All Incentives on the Table for Tax Reform; Set Deadline for Submissions: In an effort to launch a tax reform legislative effort, Finance Committee Chair Baucus (D-MT) and Ranking Member Hatch (R-UT) last week sent a letter to their Senate colleagues indicating that they will begin the dialogue on reform by presuming that almost all tax preferences will be repealed. Members were asked to submit legislative language and/or proposals for tax preferences that could potentially restore preferences if they meet one of the following three tests: “(1) They help grow the economy, (2) make the tax code fairer, or (3) effectively promote other policy objectives.” A submission deadline of July 26, 2013 was given, ensuring that tax advocates will have a busy July.
- House Offshore Drilling Bills Pass; Consideration in Senate Unlikely: The House last week passed two pieces of energy-related legislation that would expand offshore drilling if signed into law. The Offshore Energy and Jobs Act (H.R. 2231), which passed 235-186 along generally a party line vote, directs the Department of Interior to take on a new offshore lease plan for 2015 through 2020 and also calls for lease auctions off the Atlantic and Pacific coasts. The bill, which received a White House veto threat, is unlikely to make any forward progress in the Senate. A separate bill, the Outer Continental Shelf Transboundary Hydrocarbon Agreements Authorization Act (H.R. 1613), would approve a United States-Mexico oil and gas resource development agreement for a “transboundary” area located in the Gulf of Mexico, and had the potential to have a more successful fate. A companion bill to H.R. 1613, (S.812) was introduced by Senate Energy and Natural Resources Chairman Wyden (D-OR) and Ranking Member Murkowski (R-AK). The House-passed version, however, includes language that precludes public companies from Dodd-Frank and SEC requirements that call for payment disclosure to foreign governments as part of transboundary oil and gas agreements. The inclusion of this controversial language makes the bill’s enactment, at least as passed by the House, highly unlikely. The Senate version does not include the Dodd-Frank related language.
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