The U.S. is Energized About Energy and the Environment as we Move into 2014
- February 12, 2014
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Whenever we enter a new year, it's always all about getting in shape.
Turning the page on the calendar is about new beginnings and it's no different when it comes to this country's energy and environment outlook.
With Congress unable to move much legislation, the Administration's energy and environment agenda is the most likely to move in 2014. And with the Congress unable to get together on oversight, that is advantage Obama regarding the climate agenda.
Here are some resolutions for the New Year that are likely to come to pass:
EPA--At the top of the list is the EPA action on climate regulation. EPA is supposed to finalize its greenhouse gas emissions rule for new electric power plants by June. When that is finalized the President as directed that it release its draft regulation for emissions from existing power plants.
Other issues to watch at EPA impacting power plants are new technology standards for cooling water towers at existing power plants as well as proposed waste regulations governing coal-ash - the byproduct of burning coal at power plants. Both are due in January under court- imposed deadlines.
The oil and gas industry needs to watch EPA as it considers disclosure rules for fraccing fluids.
In other court action, the Supreme Court heard a challenge to the Cross-State Air Pollution Rule, and coming up is a hearing on a limited challenge to EPA's authority to regulate greenhouse gases.
DOS--Other key Administration actions to watch in 2014 are at the State Department with dozens of applications pending, some since the beginning of the Obama administration ranging from technical changes to existing Presidential Permits for Border Crossing to new permit requests for pipelines including the Keystone XL pipeline. There has been such a bottleneck here, that a bipartisan bill to provide a legislated process for granting such changes has been authored by the Chairman of the Energy and Commerce Committee Upton (R-6th MI) and his colleague on the committee, Congressman Green (D-29th TX). A similar move may occur in the Senate as Senator Murkowski (R-AK), Ranking Republican on the Senate Energy and Natural Resources Committee has hinted of her interest. Right now under the President's Executive Order, the process is entirely subjective with no rules of the road providing a proper process with a timeline for action. This bottleneck is clearly adding to more product being moved by rail and by trucks.
DHS, DOL, EPA--Another Administration action to watch is the work of an interagency task force established by the President on August 1st, created to weigh new chemical safety regulations in response to the deadly explosion in Texas. It is considering a major overhaul of the way volatile substances are handled and stored. The Chemical Facility Safety and Security Working Group, a taskforce led by the secretaries of Homeland Security and Labor, along with the administrator of the Environmental Protection Agency (EPA), offer nine sets of options across several categories, including mandatory - rather than voluntary - new safeguards. The regulations could include a shift to inherently safer technologies and the creation of a third-party audit system. There is a 90 day comment period.
Included in the proposal are measures to tighten regulations for the storage and handling of ammonium nitrate, the chemical involved in last April's fertilizer plant in West, Texas, which killed 15 people and injured more than 200. The agencies are seeking information about the costs associated with implementing the measures under consideration. The proposal raised red flags within the industry, where businesses fear the working group will pursue actions that will further complicate an overly complex regulatory system. The agencies are considering a regulatory model that would add new regulatory authority instead of focusing on how to improve current programs. Supporting the efforts of the taskforce are more than 100 groups comprising the Coalition to Prevent Chemical Disasters, including Greenpeace, that praises the proposal as looking at regulatory gaps.
DOE, DOC--Another major area to watch Administration action on is natural gas and oil exports. DOE has been steadily making its way through applications to export liquefied natural gas to non-FTA countries. But the push for more LNG exports amid the U.S.'s production boom has plenty of backers - including President Barack Obama himself. And Energy Secretary Ernest Moniz stirred things up last month when he suggested revisiting the ban on almost all oil exports, something controlled by the Commerce Department. The lifting of the oil export ban is being touted by the industry from Continental CEO Harold Hamm to API CEO Jack Gerard. And with the announced support of Senator Lisa Murkowski for the ban being repealed the oil export ban may get revisited.
CONGRESS--Looking at the Congress, it is always difficult in an election year to pass much legislation. But wait a minute, with the biggest political question being what the makeup of the Senate will be, the recent announcement by Chairman Baucus that he is leaving the Senate early to be ambassador to China may change and energize the energy agenda for 2014. We will likely see Senator Ron Wyden. a big renewable supporter, move to head the Finance Committee which could change the tax agenda for renewables and impact the likelihood of tax reform. That would leave Mary Landrieu to take the Energy and Natural Resources Committee's gavel. If she demonstrates action and leadership on energy issues as Chairman by moving oil and gas friendly legislation, that could help her reelection efforts in oil-and-gas-dependent Louisiana. And with Senator Murkowski a kindred spirit on oil and gas, this could mean new support for speeding up LNG exports as well as lifting the oil export ban.
And speaking of tax reform, the changing of the guard at Finance Committee could impact the timing of legislation moving as Chairman Baucus was the impetus in the Senate for quicker action. This may mean a less ambitious bill or no bill this year, which could provide momentum for a big push for a business extenders bill instead of wrapping that up in tax reform as Baucus and House Ways and Means Committee Chairman Camp have advocated. Senate Democrats made a quick attempt to do tax extenders before the break, but a serious effort will likely have to come within the next few months. That leaves lawmakers searching for a must-pass vehicle to latch onto, since stand-along tax extenders have little chance of clearing the House.
Other energy issues to watch in Congress are whether the bipartisan energy efficiency legislation by Senators Shaheen (D-NH) and Portman (R-OH) will get floor time again this year.
Finally, major changes to the Renewable Fuels Standard may still be considered in 2014. Although EPA scaled back on the blending requirement, there is still a bipartisan push on both sides of the hill to make changes here. Chairman Boxer's lack of interest in doing so may tip the scale against action, but it is an issue to keep an eye on.
We're all familiar with the usual New Year's resolutions: lose weight, stop smoking, join a health club, be a better person, yadda, yadda, yadda. We all want to do the right thing, which is why we resolve to do better. But frankly, it's not very realistic. Hopefully, the aforementioned items have a realistic chance of coming to pass.