Policymakers returned to Washington last week and chief on the agenda was the onset of appropriations work beginning in earnest. Environmental Protection Agency (EPA) Administrator Gina McCarthy appeared before the House Energy and Power Subcommittee of the Energy and Commerce Committee this week to defend the President’s Fiscal Year (FY) 2015 budget. Elsewhere on Capitol Hill this week, and included as part of the various appropriations hearings, Department of Energy Secretary Ernest J. Moniz testified before the House Appropriations Energy-Water Subcommittee and Department of Interior (DOI) Secretary Sally Jewell will appear before the House Natural Resources Committee. Last week, Jewell defended the Administration’s FY 2015 budget before the House and Senate Interior, Related Agencies Subcommittees. Her Senate appearance brought to light various parochial concerns focused on the Izembek road to King Cove (Alaska), the budget for wildfire suppression and the drought in the West. Shortly after the release of the Waters of the U.S. (WOTUS) controversial proposed rulemaking (see more information below) earlier in the week, McCarthy also appeared before the Environment and Public Works Committee, where she fielded numerous questions regarding former employee and convicted felon John Beale. The EPA Administrator defended the President’s Budget before the House Interior Appropriations Subcommittee.
On the budget front, House Budget Committee Chairman Paul Ryan (R-1-WI) released the House FY 2015 budget resolution, which the Budget Committee will consider this week and the House is likely to consider next week. Generally, the 10-year budget cuts more than $5.1 trillion in federal spending but in the short term is consistent with last year’s budget deal (Public Law 113-67), that includes $1.014 trillion in discretionary spending. As released, the Ryan Budget package later restructures federal government spending priorities. From an energy perspective, the proposal expands oil and gas drilling but makes cuts to renewable energy priorities. Because Congress already agreed to discretionary spending levels as part of last year’s budget agreement, the House version is intended to serve as a political document that frames Republican priorities as they go into the mid-term elections.
In addition to appropriations and budget work, Washington is watching activity in the Senate Finance Committee where new Finance Committee Chair Ron Wyden (D-OR) will hold a tax extenders mark-up on Thursday of this week. The Finance Committee released a bipartisan package on Tuesday, which included numerous energy extensions. Of note was the absence of the renewable production tax credit (PTC). Inclusion of the PTC is anticipated either as an amendment during the mark-up or as part of any modified Chairman’s draft that the Committee considers later in the week. Real action on tax extenders legislation that will eventually make its way to the President’s desk is not expected until after the election. Similar to other Finance Chairmen before him, Wyden has suggested that overall tax reform remains his priority. Retiring House Ways and Means Chair Dave Camp (R-4-MI) released his tax discussion draft earlier this year.
The House and Senate will be in session this week and next before departing for a two-week district work period.
Other Items of Interest:
- White House Releases Methane Strategy. Laying out its roadmap to regulate and control methane emissions across a host of industrial sectors, the multi-step plan targets methane emissions from landfills, coal mines, agriculture and oil and gas. As part of the strategy, the Bureau of Land Management (BLM) is anticipated to release in April an Advanced Notice of Proposed Rulemaking focused on a program to capture, sell or dispense with federal land waste mine methane. Further, later in 2014, BLM is expected to release a proposal that will update requirements to decrease venting and flaring from oil and gas production on federal lands. In addition, EPA will evaluate various sources of methane and other emissions from oil and gas operations. It will also seek comments on white papers it is developing on the topic. The outcome of this exercise could result in additional regulations that EPA will endeavor to finalize by 2016.
- Markey and Others Call on FERC to Review Recent Natural Gas Price Increase.Senator Ed Markey (D-MA), joined by Senators Jeanne Shaheen (D-NH), Jack Reed (D-RI), Sheldon Whitehouse (D-RI), Richard Blumenthal (D-CT) and Angus King (I-MA) called for a review of this winter’s natural gas prices to ensure that markets have been functioning properly and that speculation or manipulation have not resulted in price increases. In a letter addressed to the Federal Energy Regulatory Commission (FERC), the Senators iterated their concerns that “high energy prices during the prolonged and extremely cold winter have put a significant strain on families.” In the letter, the Senators noted that according to recent surveys, natural gas use for electricity generation in the New England region increased to more than 50 percent in 2012 (from 20 percent in 2001), while New England’s average spot price for natural gas for early 2014 was more than 50 percent higher than what it was during the same time in 2013. The Senators called on FERC to review natural gas prices and fluctuations that have “eroded end-users’ confidence in these markets” and asked for Commission recommendations.
- New England Senators Urge the White House to Re-nominate Cheryl LaFleur to Serve as FERC Commissioner. Joining the lead of Senator Shaheen (D-NH), six of her New England colleagues signed onto a letter sent to the White House this past week urging President Obama to re-nominate LaFleur to the FERC Commission. See the letter here.
- Obama Administration Releases Controversial Waters of the U.S. Rulemaking.Amidst support from environmental groups, the Administration released a long-awaited WOTUS rulemaking that EPA Administrator Gina McCarthy emphasized was not designed to augment the reach of the Clean Water Act. The proposal, issued jointly by the EPA and the Army Corps of Engineers, clarifies that wetlands near rivers, as well as seasonal waterways, are subject to the Clean Water Act, while streams with an uncertain nexus to downstream water would undergo a case-by-case evaluation. The proposal comes after much controversy surrounding the topic and most recently, a failed effort by the Administration to issue a guidance on the topic that was criticized for its overreach and uncertainty.