This past week, the Administration released significant portions of its $3.9 trillion proposed Fiscal Year 2015 budget. Generally, the budget is consistent with the discretionary spending caps outlined under the December 2013 budget deal (PL 113-67) that includes $1.014 trillion for next year in base discretionary accounts. Specifically, the budget includes a 4 percent cut for the Environmental Protection Agency (EPA), a more than 7 percent increase for the Federal Energy Regulatory Commission (FERC) and a 2.6 percent increase for the Department of Energy. The proposed budget, however, includes reductions to the Department of Energy’s fossil fuel programs. These proposed cuts were publicly criticized by Democratic Senator Joe Manchin (D-WV) who expressed concern at cuts in the program given the lack of commercial Carbon Capture and Sequestration technology availability and the Administration’s proposed carbon dioxide (CO2) rulemakings dependent on CCS technology. 

Washington buzz regarding the situation in Russia, and what action Congress should take related to natural gas exports, is likely to continue. The situation in the Ukraine sparked a bipartisan push for natural gas exports and conversely, legislation that would require the Department of Energy to consider other factors before the approval of liquefied natural gas (LNG) exports to overseas markets (S.2088, the American Natural Gas Security and Consumer Protection Act). Congress will continue to consider the issue but legislation to address LNG exports is unlikely to be included in an initial Ukrainian aid package the Senate Foreign Affairs committee is attempting to approve by Tuesday.

The House and Senate are in session this week. 

Other Items of Interest: 

Senate Democrats Convened All-Night Climate Change Session. With Senators Brian Schatz (D-HI) and Sheldon Whitehouse (D-RI), coordinating, 28 Senators took to the Senate floor on Monday and pursued all-night speeches in efforts to make their case regarding climate change effects. Whitehouse, as anticipated in Sidley’s Energy Update of February 18, 2014, has been named the new Chair of the Clean Air and Nuclear Safety Subcommittee of the Environment and Public Works (EPW) Committee, replacing Senator Tom Carper (D-DE) who will chair the EPW Transportation and Infrastructure Subcommittee. Senator Ed Markey (D-MA), a longstanding vocal proponent for climate change legislation, is also a new member of the EPW Committee. Bay Confirmation Hearing Date Still Unclear. Washington Energy insiders continue to await announcements regarding the timing for the upcoming confirmation hearing of Norman Bay, nominee to chair the FERC. Head of the FERC enforcement office, Bay’s nomination has raised some concerns in energy circles as his policy positions are very unclear. Sources indicate that Committee staff have finally received his confirmation papers and as the newly minted Energy and Natural Resources chair, Senator Mary Landrieu (D-LA), finalizes staff assignments, agenda and schedule for the Committee, a more definitive timeframe for consideration of his nomination will emerge. Rumors abound that despite Majority Leader Harry Reid’s request that Democrats support the nominee, some Democrats on the Senate Committee on Energy and Natural Resources (ENR) already appear to have concerns regarding Bay’s nomination. 

In other related ENR developments, sources indicate that Elizabeth Craddock, formerly Senator Landrieu’s personal office Legislative Director, will be named ENR staff director, making the Member and staff leadership of the Committee, on both sides, female. 

Environmental Protection Agency Extends Comment Period for New Source Performance Standard (NSPS) Rule for New Power Plants. EPA extended its public comment period for the greenhouse gas (GHG) rule for new power plants by 60 days making the new due date May 9, 2014. The extension is also applicable to the recent Notice of Data Availability signed February 5, which indicated that the Energy Policy Act of 2005 (EPACT) does not undermine the carbon capture and storage requirement contained in the NSPS proposal. The rule would require new coal plants to install partial carbon capture and sequestration (CCS) to achieve a CO2 emissions limit of 1,100 pounds per megawatt hour. EPACT 05 bars the use of certain projects funded by the act from being used to justify air rules. The Agency is soliciting comment in then notice of data availability (NODA) on its interpretation of the 2005 law. 

In other related NSPS news, the House, as part of its Energy Week, this past week passed H.R. 3826, also popularly known as the Whitfield-Manchin bill, that would effectively bar EPA from finalizing a rulemaking that requires CCS until it is more widely available, specifically that it is based on technology that has been in use for at least one year by six power plants. In a Statement of Administration Policy released Tuesday, the White House opposed the bill and threatened to veto the measure. The Senate is not expected to take up the measure. 

Race to Replace Energy and Commerce Ranking Member Henry Waxman Continues: Pelosi/Hoyer Rivalry in Play. With Waxman’s retirement announcement in late January, two senior Democrats on the House Energy and Commerce (E&C) Committee – Rep. Frank Pallone (D-06-NJ) and Rep. Anna Eshoo (D-18-CA), who have each announced their interest in taking over as ranking member of E&C – continue in their efforts to best position themselves to lead Democrats in the 114th Congress on the powerful Committee. In an unexpected development, House Minority Leader, Nancy Pelosi (D-12-CA) circulated a strongly worded letter to her Democratic colleagues as a public endorsement from Pelosi for Eshoo in the Committee leadership race. Steny Hoyer (D-5-MD), the House Minority Whip, recently came out in support of Pallone. Their announcements further demonstrate the long standing Pelosi/Hoyer rivalry as they have often sparred for the most influence among members of the House Democratic Caucus. 

Camp Discussion Draft Continues to Generate Buzz; Tax Extenders Markup Coming Up. Washington continued to buzz a week after Ways & Means Committee Chair, Dave Camp (R-4-MI), released a comprehensive tax discussion draft, the product of several years’ work. He is the sole sponsor, and this is his last year as chair of the tax writing committee. While the bill is unlikely to move this Congress, it does serve as a potential vehicle to spark dialogue that will ultimately shape legislation, if and when, tax reform moves forward. Insiders believe enactment of final legislation is at least three years away. In other tax related news, insiders indicate that newly minted Senate Finance Chair Ron Wyden (D-OR) will hold a Finance Committee mark-up regarding the extension of various tax provisions, also referred to as “tax extenders” the week of March 24, likely on March 26, 2014.