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Political polarity could threaten Senate energy committee despite common goals

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Six trends shaping the industries and sectors we cover in 2021

Six trends shaping the industries and sectors we cover in 2021

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Essential Energy Insights - January 2021


Political polarity could threaten Senate energy committee despite common goals

SNL Image

U.S. Sen. Lisa Murkowski, R-Alaska, and U.S. Sen. John Barrasso, R-Wyo., talk during a hearing in 2017. Barrasso said he plans to lead Republicans on the Senate Energy and Natural Resources Committee, succeeding Murkowski, the committee's term-limited chairman.
Source: Chip Somodevilla/Getty Images News via Getty Images

Two coal-state lawmakers are poised to lead the U.S. Senate Energy and Natural Resources Committee, but it remains to be seen how much common ground they can find given the polarity in the Capitol.

U.S. Sen John Barrasso, R-Wyo., who currently serves as the chairman of the Senate Environment and Public Works Committee, announced his intent to lead Republicans on the Senate Energy and Natural Resources Committee during the 117th Congress. The nation's two largest coal-producing states will be well represented on the energy committee between Barrasso and U.S. Sen. Joe Manchin, D-W.Va., who leads committee Democrats.

In January, two runoff races to represent Georgia in the U.S. Senate will decide party control of the upper chamber and determine whether Barrasso or Manchin will wield the committee's gavel.

The duo is poised to be "even more fossil-levered" than the current team of Manchin and U.S. Sen. Lisa Murkowski, R-Alaska, said Kevin Book, managing director of the independent research firm ClearView Energy Partners LLC. Murkowski's term leading the energy committee is about to expire.

"The committee may not be that relevant in the end, because Congress could be sidelined by its own divisions, but it's a committee with a history of making deals," Book said. "The fact that you have two members who stand on similar soil in a place where deals have gotten made suggests that if there's legislation to be done, they could probably find a way to do it."

"What we've been basically concerned about, highlighting as a risk for energy policy, is that energy policy has been getting more partisan for years, and in this context there may not be a center to meet in," Book said.

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Opportunities for carbon capture

Both Barrasso and Manchin are strong supporters of carbon capture and storage. They hail from coal states facing "severe economic challenges because of the loss of revenues associated with their natural resources' development," said Kelly Johnson, a partner with the law firm Holland and Hart.

The domestic thermal coal mining industry has suffered considerably due to low natural gas prices that drove some coal plants out of the market, leading to significant consolidation in recent years. Wyoming, the nation's largest coal-producing state by far, has been decimated by the sector's decline, something Barrasso would surely seek to address on the committee, Johnson said.

"He'll be interested in anything he can do that will help stabilize those industries, and I think Manchin is similarly aligned," Johnson said.

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U.S. Sen. Joe Manchin, D-W.Va., speaks during a Senate Appropriations subcommittee hearing on June 16. Manchin is expected to continue leading Democrats on the Senate Energy and Natural Resources Committee in 2021.
Source: Chip Somodevilla/Getty Images News via Getty Image

Barrasso has touted his state's expertise in carbon capture and storage, a technology that could potentially help keep coal and gas plants running while releasing fewer carbon dioxide emissions. Should Republicans maintain control of the Senate, carbon capture may be one of the few spaces for compromise in a divided Congress, observers said.

"Senator Barrasso's decision ensures that we will have two strong champions of carbon capture technologies at the helm of a committee that has a critical role to play in advancing economywide innovation and deployment of carbon capture, removal, use and storage by retooling and expanding federal research, development and commercial demonstration programs," according to Brad Crabtree, director of the Carbon Capture Coalition.

Barrasso and Manchin have also cosponsored legislation aimed at creating a new U.S. Department of Energy program focused on research and development of coal-derived carbon products. Given Barrasso's and Manchin's fossil energy priorities, they may be positioned to advance legislation to aid these sectors in the energy transition, said Sasha Mackler, director of the Energy Project at the Bipartisan Policy Center.

"I think coal, and to some extent natural gas and the oil sector, needs to be thinking about how they are positioned to transition to a net-zero or a low-carbon economy over the next several decades," Mackler said. "Having these two senators at the leadership of Senate Energy could be good news for this industry if they engage the moment and start to work towards putting in place the policies that support their transition."

Energy sectors expect bipartisan efforts

The National Mining Association, American Wind Energy Association and Solar Energy Industries Association will work with committee leadership to advance their priorities.

"It's always beneficial to have leadership from mineralized states — leadership that understands the importance of coal to underpinning affordable, reliable power as well as the opportunity and necessity to increase domestic mineral production and reshore critical mineral supply chains," NMA spokesman Conor Bernstein said. "Both Senators Barrasso and Manchin have been leaders who have focused on energy innovation, and we expect them to double down on advancing carbon capture technology."

Wind energy companies plan to work with Barrasso on "important issues like permitting obstacles for energy projects," especially given Wyoming's significant wind resources, said Bree Raum, vice president of federal affairs for the American Wind Energy Association.

Barrasso has not always backed the renewable energy sector. In April, Barrasso joined a handful of his Republican colleagues in rejecting the addition of renewable energy tax credit extensions to coronavirus response legislation.

The coal-state senator has also pushed for legislation to amend Section 401 of the Clean Water Act, narrowing its scope to water quality impacts, as blue states continue to use regulatory reviews to block fossil fuel projects. Such projects include coal export terminals and natural gas pipeline projects.

Murkowski's tenure

Murkowski has served as chairman of the committee since the start of the 114th Congress in January 2015. She has struggled to pass major energy legislation, though observers called her a strong leader who maintained bipartisanship even as other committees became increasingly polarized.

The Alaska lawmaker helped shepherd the creation of the Energy Policy Modernization Act of 2016, which sought to speed permitting of LNG exports and natural gas pipelines and promote research and development on energy efficiency, among other things. The Senate passed the bill with strong bipartisan support, but the package hit resistance in the U.S. House of Representatives due to disagreements over the bill's natural resource-related provisions, ultimately stalling the legislation.

Murkowski and former committee ranking member Maria Cantwell, D-Wash., released a similar bill in 2017 that also failed to become law before the end of that Congress.

The Senate energy panel put together a broad energy bill in February, entitled the American Energy Innovation Act, that focused on clean energy research and energy infrastructure and mineral supply chain security. But a fight over including language to reduce hydrofluorocarbons delayed the bill's progress. Although Senate lawmakers managed to reach a deal on hydrofluorocarbons, the energy bill has yet to come back before the full chamber for a vote. Time is running out to pass major legislation before the end of the current Congress.