Analysis by Energy Workforce President Tim Tarpley
On Monday, Senator Manchin and Senator Barrasso, who chair the Senate Energy Committee, released the text of their long-awaited bipartisan permitting package. Although the passage is far from certain, the fact that the two parties have released bill text is incredibly significant. There is a distinct possibility that we could see something get over the finish line before the end of the year. The lame-duck period after the election and before the end of the year is the most likely opening for such a package. This time is often when last-minute compromises on critical bipartisan legislation are often finalized and dropped into must-pass packages like the end-of-year appropriations packages.
The bill results from over a year of bipartisan back and forth between the two leaders as they worked to find a compromise that could have a shot at passage, especially given that the two parties have very different goals and priorities in the overall permitting reform arena. Time is of the essence, as Senator Manchin is leaving the Senate at the end of his term, and Senator Barrasso is currently running unopposed for the #2 spot in Senate leadership and has agreed to leave his position in Senate energy should he be successful. Surely, both parties want to see this legislation pass so that it will be part of the historical legacy.
One area where a growing bipartisan consensus has formed is ending the Biden Administration’s “pause” on LNG permits for facilities that export to non-FTA countries. The draft language released on Monday would override this pause and mandate that DOE act on company requests within 90 days of the completion of environmental reviews. This provision would end DOE’s ability to “slow walk” permits for many months or even years in some cases.
The bill would also establish a 150-day statute of limitations for lawsuits against a project and require courts to expedite the review of legal challenges. This provision aims to end the strategic “spacing” and venue selection process for lawsuits designed to slow the project down instead of putting forward valid legal challenges against it.
It would require the federal government to conduct at least one offshore oil and gas sale and wind sale per year starting in 2025 through 2029, imposing minimum acreage requirements for both. This provision is key to preventing the Biden administration or other future administrations from slowing down new lease sales or holding ones that are so minimal they equate to nothing.
To solicit democratic support, the package would double the production targets for permitting renewable energy projects on federal lands to 50 gigawatts.
The bill also sets the stage for FERC to take action on improving power line ties between regions through interregional transmission planning, a key provision that many on the Democratic side have pushed for to facilitate large-scale renewable energy projects.
So what happens now? Well, next week, the first step will be a markup in Senate Energy to work through the compromise. This is a fast-track schedule for legislation. This markup will allow members of the committee to discuss the legislation, and we will get a better understanding of where the committee’s rank and file members are and what the prospects are for moving forward. If there is support in the Senate, the next step will be finding a vehicle to attempt passage, as it is very unlikely to pass as a stand-alone piece of legislation. The most likely scenario will be to attach the package to a lame-duck spending package before the end of the year or possibly if there is support as a part of the National Defense Authorization package.
The key to success with that strategy will be convincing House Republicans that getting a deal done is strategically better than waiting until after the election when their numbers and bargaining power may be improved. Currently, the generic Republican congressional polling is R +1.5, indicating Republicans have a decent shot at holding the House. Things could change before the election, but as long as this stays consistent, there may be a strong argument made by some in the House to wait until next year. We will get a better sense of where things are politically in the coming days and weeks once interested parties get adequate time to look at the draft.
President Biden Announces He Will Not Run in November
In a surprising but not completely unexpected move over the weekend, President Biden officially decided to withdraw from the Democratic primary and release his delegates to Vice President Kamala Harris. Since the announcement, support among Democrats (and delegates) has solidified, and it appears she is a lock to receive the nomination. No significant challenger has yet to emerge, and the House and Senate Democratic leadership appears to be fully behind her.
What does this news mean for the Presidential race and, more importantly, US energy policy? Well, first, as far as the race goes, it’s really too early to say. Initial polling averages look similar to Biden on the national polling; she is down on average about 1.5. However, many of the polls that make up this average were taken before Biden officially dropped out…. so we need to take them with a grain of salt. Realistically, we will not really know where we are on polling until another week or two, and voters have time to digest all of this.
How will Kamala Harris be on energy? We can probably expect her to mirror many of the Biden-era policies. However, it is important to note that in her short-lived run in the Democratic primary for President in 2020, she supported a full hydraulic fracturing ban. However, she did walk back that position once she joined the administration. It is reasonable to assume that long term, if she was running her own administration, she would be more receptive to a fracturing ban than Biden was. She also hails from California, where the Democratic party has been overtly hostile to oil and gas development in the state. During her time in the Senate, Harris supported a resolution that was supportive of the Green New Deal, a fact that will certainly be brought up by Republicans in the coming weeks and months as the debate moves on.
Of particular interest to us in energy will be who she ultimately picks as Vice President. Josh Shapiro, the current governor of Pennsylvania, is in the mix, and the state is probably a must-win for her candidacy. During his time in office, he has been open to working with industry and has not pushed forward significant curbs on hydraulic fracturing. Kentucky Governor Andy Beshear is also a leading contender, and he has been less aggressive on climate issues during his tenure than mainstream Democrats.
Tim Tarpley, Energy Workforce President, analyzes federal policy for the Energy Workforce & Technology Council. Click here to subscribe to the Energy Workforce newsletter, which highlights sector-specific issues, best practices, activities and more.
