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Economic Benefits

How U.S. Infrastructure Investment Would Boost Jobs, Productivity, and the Economy

As the U.S. economy recovers, the Biden Administration is looking to further strengthen the recovery with an infrastructure funding bill. S&P Global Ratings has updated their projections on what impact a $1 trillion investment in infrastructure would have on the economy through 2030.

S&P Global Ratings estimates that, in real dollar terms, the project will create more in economic activity than it would cost. In particular, S&P Global Ratings estimates that a $1 trillion investment in infrastructure would add $1.4 trillion to the economy over an eight-year period--a fiscal multiplier of 1.4x.

In terms of jobs, S&P Global Ratings found that the infrastructure project would create 883,600 jobs by 2030–many middle-class jobs. And per capita income would be $100.50 (10.5%) larger than in the no infrastructure scenario.

Private-sector productivity would also get a boost from the infrastructure investment–by around 10 basis points, on average, each year. That productivity boost would likely lift average GDP growth on an annual basis to 2.1% from around 2.0% over the period.

A Bipartisan Infrastructure Framework Emerges to Address Social Disparities

The most significant spending is allocated for roads, highways, and bridges. S&P Global Ratings expects this to advance significant progress in addressing climate-resilience needs, although more investment will be needed. There's a renewed focus on community safety and reversing historical injustices and the underfunding of transit systems and other critical infrastructure in poor communities. Universal access to high-speed internet will help enable better access to economic and educational opportunities for poor urban and rural areas alike. Alongside this bill, there's a reconciliation that focuses more heavily on social infrastructure and climate change.

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Updated Activity Estimates for U.S. Transportation Infrastructure Show Recovery for Air Travel Demand Accelerating and Public Transit Lagging

The combination of federal stimulus aid, vaccine progress, easing mobility restrictions, strong economic growth, and pent-up demand is improving the recovery curves for S&P Global Ratings’ activity estimates among certain asset classes like air travel, while the prospect of a continued or permanent shift to remote or hybrid work and the growth of online shopping will limit the recovery in public transit ridership for the foreseeable future.

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Legislative Developments

U.S. Senate Passes Bipartisan Infrastructure Bill, Awaits House Action

The U.S. Senate passed a massive bipartisan infrastructure bill Aug. 10 partly aimed at supporting the country's transition to cleaner energy generation and vehicle electrification.

The Senate voted 69-30 to pass the $1.0 trillion Infrastructure Investment and Jobs Act, which would provide $550 billion in new government spending to rebuild roads, bridges and other infrastructure and fund climate and clean energy programs.

The roughly 2,700-page bill contains dozens of energy, critical minerals and climate provisions, with transmission policy being a particular focus.

U.S. Senate Passes Budget Resolution That Paves Way for Aggressive Climate Action

The resolution, which now heads to the U.S. House of Representatives, is the first step in the budget reconciliation process. If the House also passes the resolution, relevant committees in both chambers will work together to draft legislation to carry out the Senate Budget Committee's reconciliation instructions, which include creating sweeping new programs to curb climate-warming greenhouse gas emissions.

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U.S. Senators Reach $1 Trillion Infrastructure Deal That Could Aid Grid Expansion

A bipartisan group of U.S. senators reached a deal July 28 to move ahead on a more than $1 trillion infrastructure package that could ease the buildout of the nation's electric grid and provide funds for clean energy research.

The legislation, which includes $550 billion in new federal investment, follows a late June infrastructure agreement between U.S. President Joe Biden and a group of Republican and Democratic senators that sought $73 billion for power infrastructure.

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On the Path to Net Zero

DOE Insights Show Diverse Regional Paths to U.S. Hydrogen Economy Emerging

At the outset of an emerging hydrogen economy, regions across the U.S. are considering diverse pathways for producing low-carbon hydrogen and scaling demand, data from the U.S. Energy Department suggests.

The highly preliminary view into how the U.S. hydrogen landscape could develop over the next decade comes from responses to a recent DOE request for information from hydrogen stakeholders. The DOE conducted the request for information as part of the Hydrogen Shot, a program that aims to cut low-carbon hydrogen costs by 80% to $1 per kilogram within 10 years. The DOE shared insights from those responses during a two-day summit.

LA Green Hydrogen Hub Developers Map Out Role for Gas Pipelines, Storage

Both dedicated hydrogen lines and the existing natural gas pipeline grid will be critical to making a proposed Los Angeles green hydrogen hub viable, according to the Green Hydrogen Coalition, one of the project's chief developers.

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Building Gas Ban Debate Reaches Capitol Hill Amid Infrastructure, Spending Push

A national debate over building electrification that kicked off in Berkeley, Calif., is bubbling up to Capitol Hill as Democrats seek to advance President Joe Biden's agenda to tackle climate change.

A new development came Aug. 9 when Senate Democrats released their framework for a $3.5 trillion budget reconciliation measure. The plan included instructions to fund building decarbonization programs proposed in Biden's Build Back Better plan.

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Clean Energy Incentives

Utilities Eye Grid-Enhancing Technology Incentives Amid U.S. Infrastructure Push

A growing number of electric transmission and distribution companies are experimenting with grid-enhancing technologies as the U.S. Congress advances legislation that would offer billions of dollars in matching grants for those types of investments.

One of the latest companies to implement a grid-enhancing pilot project is Duquesne Light Co., or DLC, a utility with more than 600,000 customers in western Pennsylvania.

On Aug. 31, the DQE Holdings LLC subsidiary announced a new partnership with LineVision Inc., a company that manufactures no-contact sensors that give transmission operators the ability to implement dynamic line ratings.

Dynamic line ratings give transmission operators close to real-time visibility into a power line's potential operating capacity based on a variety of data inputs, including ambient temperatures and line sag.

LineVision already has dozens of customers globally and counts National Grid USA, Xcel Energy Inc., Dominion Energy Inc. and the Sacramento Municipal Utility District among its top U.S. clients.

DLC is starting small with just 12 sensors on a single line, but the company has high hopes for the technology's potential going forward, said Josh Gould, the utility's director of innovation.

"We are very excited about the potential for using this technology on other transmission lines," Gould said in an interview. The director declined to share details of the deal for confidentiality reasons.

As Congress Drafts Budget Bill, Dozens of Climate Advocates Seek Clean Energy Incentives

Dozens of clean energy trade groups and conservation organizations appealed to the US House Ways and Means Committee to include several incentives for renewable energy and storage technologies in the forthcoming budget bill.

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Details Emerge on House Clean Electricity Performance Program

The House Energy and Commerce Committee is considering a proposal that would establish a new U.S. Department of Energy program to provide grants for power companies that increase their percentage of clean energy by certain margins each year and impose fees on those that do not.

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House Democrats Seek to Boost U.S. Tax Credits for Clean Energy, Climate Programs

Democrats on the U.S. House Committee on Ways and Means released a raft of proposed new and revised tax credits late Sept. 10 as part of a $3.5 trillion budget reconciliation package aimed in part at avoiding the worst effects of climate change.

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Transmission Advocates Hope for More After U.S. Senate Infrastructure Bill Rollout

A huge bipartisan infrastructure bill under consideration in the U.S. Senate was deemed by the White House to be the largest single investment in clean energy transmission in American history.

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U.S. Infrastructure Bill Chock-Full of Transmission Provisions, Disappoints on EVs

Days after announcing consensus on the proposal, the U.S. Senate released a 2,702-page bipartisan infrastructure bill that could help expand the country's electric grid and bolster existing and new clean energy technologies.

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Effects on Energy

Infrastructure Bill Could Allow Loan Guarantees for Struggling Alaska LNG project

The bipartisan infrastructure package being debated by Congress could make federal loan guarantees available to Alaska's long-struggling effort to develop a multi-billion dollar LNG export terminal. But even that may not significantly boost the chances of the project ever getting built.

The text of the 2,702-page bill as written does not call for direct funding to the Alaska LNG project. The legislation would, however, make several changes to the US Department of Energy's lending and loan guarantee authorities.The Infrastructure Investment and Jobs Act will provide $550 billion in new government spending to rebuild roads, bridges and other infrastructure in the US, as well as fund climate and clean energy programs.

Year in Pipelines: Growth in U.S. Natural Gas Pipeline Assets Slowed Again in 2020

The total value of U.S. interstate natural gas transportation and storage assets reported to the Federal Energy Regulatory Commission crept up in 2020, but year-over-year growth lost momentum, continuing a trend that showed up in 2019 after an active year in 2018.

Slowing growth could partly reflect the growing opposition to new natural gas infrastructure among environmental advocates and some regulators and policymakers.

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Metals in the Midst

Amplified by Tariffs, High U.S. Steel Prices May Collide with Infrastructure Plans

Steel prices in the U.S. are skyrocketing, at least partly because of dwindling domestic production and tariffs on steel imports enacted under former President Donald Trump. The trend could stifle any sweeping infrastructure stimulus effort.

Steel companies made significant production cuts in early 2020 as the lockdown caused by the global pandemic slashed demand from typical end users, such as automakers and suppliers of construction materials. Those sectors quickly regained their footing, and companies are now using more of their steel production capacity than before the pandemic, according to industry figures.

U.S. Steelmakers Applaud Senate Passage of Infrastructure Bill

U.S. steelmakers praised the Aug. 10 U.S. Senate passage of the Infrastructure Investment and Jobs Act, which – if also approved by the US House of Representatives – is expected to substantially boost steel demand.

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Despite Slashed EV Funding, U.S. Metals Sector Sees Win in Infrastructure Deal

Groups representing U.S. battery metals are calling the bipartisan infrastructure deal a win even though the Biden administration only got a small fraction of the electric vehicle support it wanted.

Senators on Aug. 2 revealed a bipartisan agreement on $1 trillion of infrastructure spending stuffed with potential demand drivers for producers of construction metals such as aluminum, copper and steel, including $110 billion of new funds for roads, bridges and work on other large structures.

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Digital Implications

The Senate’s Approval of the Infrastructure Bill and Its Effect on Cryptocurrency

On Aug. 10, 2021, the U.S. Senate approved the much-debated Infrastructure Bill, a cornerstone of President Joe Biden’s agenda. The bill overall is worth over $1 trillion. Yet the impact on the digital asset community, while small from a dollar perspective, may be equally outsized. It is estimated that the bill will increase tax revenue collected from digital asset investors by $28 billion, not by raising tax rates or creating new taxes but rather by applying new information reporting requirements on participants in the digital asset industry.

Generally, under Section 6045 rules, those falling under the definition of a “broker” are required to issue a Form 1099 to report gross proceeds on a transaction-by-transaction basis together with their customers’ names, social security numbers, and other relevant information. The bill expands the definition of a broker to include “any person… effectuating transfers of digital assets, including any decentralized exchange (DEX) or peer-to-peer marketplace.”

Infrastructure Bill Poses Opportunities, Challenges for Broadband Providers

The $1 trillion infrastructure bill moving through Congress stands to be a windfall for broadband providers, but how quickly the money is spent and by whom could hinge on the details, telecom attorneys said.

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Widening U.S. Digital Gap Illustrates Infrastructure Bill Rationale

The $65 billion earmarked for broadband within the proposed $1-trillion infrastructure bill will primarily aim at closing a U.S. digital divide that expanded during the COVID-19 pandemic, according to a Kagan analysis of the nation's broadband take rate across various household density areas.

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