Is 2015 the year for comprehensive energy legislation?
Many in Congress are considering new, comprehensive energy legislation, which would be the first such measures since the 2005 Energy Policy Act and the 2007 Energy Independence and Security Act – laws that aimed to improve U.S. energy independence and security, assuring an affordable and reliable energy supply.
Those laws, you’ll recall, provided tax incentives, regulatory changes and research programs to stimulate production of all types of energy and energy efficiency – and there certainly seemed to be a need for such legislation eight to 10 years ago: oil and natural gas production was in decline, peak oil was the talk of the day and liquefied natural gas (LNG) imports were projected to provide 20 percent of demand by 2020.
The energy portfolio of the United States is radically different today – in 2005 the United States imported about 30 percent of its energy, but as a result of the shale boom, net imports are now 16 percent of our energy consumption.
Wind also has made spectacular progress, from supplying 0.1 percent of U.S. energy in 2004 to 1.6 percent today.
With this energy evolution, some of the 2005-07 legislation is out of date or ineffective.
For example:
♦ Renewables Fuel Standard (RFS) – the 2005 law helped ethanol replace methyl tertiary-butyl ether (MTBE), which was considered a dangerous pollutant when it leaked into aquifers. The 2007 law increased the ethanol and other biofuel usage requirements.
Today the RFS requirement to mix an increasing volume of renewable fuels with a declining volume of gasoline consumption is up against the 10 percent ethanol limit.
♦ The 2005 law streamlined aspects of the permitting process for LNG import terminals.
In the past year many have been calling for accelerated permitting for LNG export terminals.
Rep. Fred Upton (R-Mich.), chair of the House Energy and Commerce Committee, and Sen. Lisa Murkowski (R-Alaska), chair of the Senate Energy and Natural Resources Committee, are leading the effort to adopt comprehensive energy legislation.
Democratic legislators certainly also will be involved; although both the House and the Senate have Republican majorities, comprehensive energy legislation requires more than two influential committee chairs or even members of one party.
Previously introduced, bipartisan legislation also will be a part of any future comprehensive bill. A couple of likely candidates would be:
♦ In 2009, Sen. Cantwell and Sen. Susan Collins (R-Maine) introduced the Carbon Limits and Energy for America’s Renewal (CLEAR) Act that proposed a market-oriented approach, rather than Environmental Protection Agency regulations, for reducing carbon emissions.
♦ Several versions of the Energy Savings and Industrial Competitiveness Act has been introduced to broad bipartisan support over the past three years by Senators Jeanne Shaheen (D-N.H.) and Rob Portman (R-Ohio). The bill would improve energy efficiency in residential and commercial buildings and schools.
Murkowski’s planned legislation will focus on four areas – strengthening supply, modernizing infrastructure, supporting efficiency and ensuring federal accountability – and echoes her 2013 report, “Energy 20/20,” which included hundreds of recommendations for updating cumbersome regulations in order to stimulate production of renewable as well as fossil energies.
Murkowski has a particular interest in loosening the ban on crude oil exports and expediting the government approval process for LNG exports.
Upton’s legislative framework, titled the “Architecture of Abundance,” has four goals:
- Modernizing infrastructure (including reducing regulatory delays for new infrastructure).
- Expanding a technologically savvy workforce open to underrepresented minorities and low-income communities.
- Energy diplomacy, including facilitating energy exports and improving energy coordination among Canada, Mexico and the United States.
- Improving energy efficiency and accountability.
Upton plans to release discussion drafts on the four topics in the spring and introduce comprehensive legislation later in the year.
In addition, the Obama administration plans to recommend a suite of legislative actions to improve the nation’s energy infrastructure in its Quadrennial Energy Review (QER), which is expected in March – after this article was written but before you read it.
Energy Secretary Ernest Moniz recently described the infrastructure issues that will be addressed in the QER. They include:
- Modernizing the country’s Strategic Petroleum Reserve.
- Expanding energy storage and distributed microgrids to ease the country’s reliance on centralized power plants and to make the grid more resilient to attacks or disasters.
- Upgrading infrastructure that’s critical to the nation’s energy security.
- Improving infrastructure overall.
This report will focus on mid-stream infrastructure: transmission, distribution and storage. Next year QER 2 probably will look at generation and end-use infrastructure.
While the report is in review by the White House, a few hints about its contents have leaked out. For example, SPR can move oil to refineries along the Gulf Coast. However, there is now a glut of oil along the Gulf Coast, so SPR will require new facilities in order to move oil overseas to meet its official objective to protect the U.S. economy from oil disruptions.