Much of Washington’s focus this week will be about the content and implications of President Obama’s upcoming climate change announcement expected this Tuesday at Georgetown University (see story below). Please look for a further Sidley Update to be released later this week providing more detailed information regarding the President’s announcement and its potential implications.
On Capitol Hill this week, Congress will continue its work before departing at the end of the week for a one-week Independence Day work period. On the Senate side, immigration reform is also likely to remain in the headlines. The House is expected to consider two pieces of energy-related legislation that would expand off shore drilling: the Offshore Energy and Jobs Act, which would direct 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; and the Outer Continental Shelf Transboundary Hydrocarbon Agreements Authorization Act, which would approve a United States-Mexico oil and gas resource development agreement for a “transboundary” area located in the Gulf of Mexico.
On the fiscal front, appropriators on both sides of the Capitol continue to work on various spending bills. The House will, however, consider and vote on the Fiscal Year 2014 Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, which similar to other spending bills and consistent with House leadership allocations, includes $1.3 billion less in discretionary spending than the 2013-enacted levels.
Washington Anticipates President Obama’s Climate Change Announcement
As reported in previous Washington Energy Updates, the President is set to announce his climate action plan—centered around a “we can’t wait for Congress to act” theme—during a June 25th speech at Georgetown University. It’s widely expected that the President will announce an intention to limit greenhouse gas (GHG) emissions from both new and existing power plants. According to the President’s top energy and climate advisor, Heather Zichal, the climate change strategy will include references to Clean Air Act rules designed to curb GHG emissions and will focus on energy efficiency improvements. Emphasizing that Obama sees climate changes as a “legacy issue,” Ms. Zichal has emphasized that the Administration is poised to exploit “key opportunities” through executive action that would not require Congress to pass legislation or provide funding. Some sources report that Obama will discuss his climate agenda in the context of both domestic priorities and international responsibilities—a move that would be consistent with his recent efforts to obtain international agreements to reduce GHG emissions (e.g., pledging to address climate change in a June 18th communiqué with G8 leaders and recommitting to action on climate change during a June 19th speech in Berlin).
Key House Committee Developments: Discussion on Energy Exports and Impacts of Regulation on Energy Sector Investment
Last week, the Energy and Commerce (E&C) Subcommittee on Energy and Power reviewed regulatory processes concerning the export of liquefied natural gas (LNG) and coal. On the subject of LNG exports, there was some bipartisan agreement about the need for expedited approval of LNG export licenses. The panel’s members were divided along party lines on coal exports, with Democrats opposing and Republicans supporting the development of infrastructure to facilitate lasting commitments to export coal from America’s Northwest River Basin to Asia’s expanding energy markets. In related activity, two E&C Subcommittees also held a joint hearing entitled, “A Competitive Edge for American Manufacturing: Abundant American Energy.” Democrats concentrated on federal incentives for clean energy investments and Republicans focused on the potentially chilling effect of EPA actions and other federal regulations on energy sector investment. While the panel’s Democrats pushed for subsidizing clean energy technology to combat climate change, Republicans emphasized the tremendous costs associated with the EPA’s proposed New Source Performance Standards (NSPS) for new electric generating units.
Other Items of Interest:
- Bipartisan Renewable Fuel Standard Bill Introduced; House Begins Hearings: Senators John Barrasso (R-WY), Mark Pryor (D-AR) and Pat Toomey (R-PA) introduced the Renewable Fuel Standards Repeal Act (S. 1195), which would repeal both the statutory authorization for the Renewable Fuel Standard (RFS) and the regulations implementing the RFS. The Energy Independence and Security Act of 2007 (PL 110-140) (EISA) modified the RFS and required that 36 billion gallons of renewable fuels be produced and brought into the nation’s fuel mix by 2022. The RFS has been the subject of much controversy since EISA’s enactment. In related news, the E&C Energy and Power Subcommittee will hold a hearing this week entitled "Overview of the Renewable Fuel Standard: Government Perspectives” during which a panel of government witnesses will provide a review of the RFS’s implementation to date. Hearings to get stakeholders’ views are anticipated later next month.
- Another Carbon Tax Bill To Be Introduced: In other climate news, Sen. Dianne Feinstein (D-CA) announced she is working on legislation that would impose a $10-per-ton fee on carbon emissions from power plants. Feinstein told reporters that her bill would be narrower than others floated by Democrats because it would assess a “fee” on emissions “just for the utility industry.” She plans to release a draft in a couple of weeks. Her announcement comes after an Environment and Public Works (EPW) Committee climate change hearing was announced last week and scheduled for next month on the Climate Protection Act (S.332), which EPW Chair Boxer (D-CA) in conjunction with Senator Sanders (D-VT) introduced. This bill would require fossil fuel producers to pay a $20 per-ton carbon fee. Neither bill is likely to garner full Senate consideration.
- Energy Efficiency Remains a Topic of Discussion on the Senate Side: The Senate Energy Subcommittee of the Senate Energy and Natural Resources Committee will hold an oversight hearing on various energy efficiency bills, which could be included as part of S.761, the Energy Savings and Industrial Competitiveness Act of 2013. Among the bills that will be considered is S. 1205, a Senator Franken (D-MN)-sponsored measure that is designed to capture waste heat for use in heating, cooling, and power generation. The bill would establish a Department of Energy program to provide cost-shared funding for technical assistance for feasibility studies and engineering and would provide access to low-interest debt financing through the issuance of Treasury bonds to qualifying energy infrastructure projects.
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