The Trump administration hopes to finalize an infrastructure plan in the coming weeks that could provide some upside for the energy sector, but disagreements over funding and potential permitting reforms could delay the plan's release.
The proposal would generate at least $1.5 trillion in infrastructure investment over the next decade, part of which will go toward providing "reliable power" in rural America, the White House said Jan. 30 in providing details of the upcoming plan. The White House did not specify how much of the $1.5 trillion will come from the federal government versus private, state and local sources but said a quarter of federal funds for the plan will address rural infrastructure needs, including "supplying affordable, reliable power."
President Donald Trump initially called for a $1.0 trillion infrastructure build-out spurred by $200 billion in federal support. That share of federal assistance is smaller than what the federal government has contributed for major infrastructure projects such as highways, stoking criticism from Democratic lawmakers and others who want the U.S. government to play a bigger role in bankrolling those initiatives.
But more fiscally conservative GOP lawmakers are hesitant to spend huge amounts of federal money in infrastructure on the heels of a new tax reform law that could cut federal revenues and as Congress weighs further aid for Puerto Rico and other parts of the U.S. hit by wildfires and hurricanes in 2017. The U.S. Chamber of Commerce has advocated raising the gasoline tax to fund highway projects, but the proposal would likely encounter opposition from Republican lawmakers who just approved broad tax cuts in 2017.
A looming government shutdown may also slow the release of an infrastructure plan. Congress has until Feb. 8 to pass another measure to fund the federal government, after agreeing to a short-term continuing resolution, or CR, on Jan. 22 that ended a brief shutdown. Lawmakers could pass another CR, but some factions in Congress, including the conservative House Freedom Caucus, are opposed to another short-term measure.
What's in it (maybe) for energy
The energy sector is less interested in direct federal money for infrastructure than in changes to the permitting process, a key priority for Republicans.
In a draft document obtained by The Washington Post, the White House called for limiting the National Environmental Policy Act permitting process to two years and designating a lead federal agency to oversee authorizations of new projects. The proposed changes are aimed at avoiding duplication among various agencies and shortening review times.
The document also included big changes to bedrock environmental laws, including the Clean Water Act, Clean Air Act and Endangered Species Act.
The proposal would restrict the U.S. Environmental Protection Agency's involvement in environmental impact statements for infrastructure projects and prevent the EPA from vetoing Section 404 Clean Water Act permits issued by the U.S. Army Corps of Engineers. Section 404 permits authorize the discharge of dredge or fill material into federally protected waters.
The draft document also included items that could benefit oil and gas producers. Pipeline and other project developers would be able to appeal to the federal lead agency if a state denies or fails to decide whether to authorize a project's Section 401 state water quality certification. Gas industry groups claim pipeline opponents have used the Section 401 process to stall proposed projects. The draft plan also would allow the Secretary of Interior to authorize pipeline crossings on National Park Service lands without obtaining approval from Congress.
Despite enthusiasm for the reforms among energy industry members, the funding disagreements and resistance from Democrats and environmental groups to the permit proposals mean "nobody is holding their breath" on the White House's final infrastructure plan, said Melinda Pierce, legislative director for the Sierra Club.
Lawmakers are still gathering input on what could go into an eventual infrastructure bill, with Congress needed to sign off on much of Trump's pending plan. To that end, the U.S. Senate Energy and Natural Resources Committee has scheduled a Feb. 8 hearing on energy infrastructure. The Senate Environment and Public Works Committee and the U.S. House of Representatives' Energy and Commerce Committee have also held several hearings in the past year exploring infrastructure development challenges.
Almost budget time
Along with avoiding a shutdown and forming an infrastructure plan, the White House is working on its fiscal-year 2019 budget request. The proposal will likely repeat Trump's calls for the 2018 fiscal year to cut nonmilitary spending and decrease funding for agencies handling regulations and research for the energy sector.
The Washington Post reported the White House wants to slash spending by 72% for the U.S. Department of Energy's Office of Energy Efficiency and Renewable Energy, based on a draft budget document. The proposal would lower the office's funding to $575.5 million for fiscal year 2019, down from enacted levels of $2.04 billion for the current fiscal year.
Trump's final proposal may be different, but the potential cuts would extend a series of actions from his administration that could undermine the renewable sector. The president recently approved new tariffs for imported solar cells and panels, and a provision of the GOP's new tax law that could make financing of wind and solar projects more difficult.
But both the House and Senate pushed back on Trump's proposed DOE funding cuts in their respective appropriations bills for fiscal year 2018 and will likely do the same for 2019. And Congress' inability recently to pass regular appropriations bills could mean more CRs that would keep funding in line with the prior year.
Also in Congress this week, the Senate Environment and Public Works Committee will vote on Andrew Wheeler's nomination as Deputy Administrator of the the EPA, after the White House decided to withdraw the controversial nomination of Kathleen Hartnett White to head the Council on Environmental Quality.
The House will vote on a bill to increase transparency for customers of the Western Area Power Administration, a federal entity that markets and transmits power to electric cooperatives, cities, towns and millions of consumers in the West. The bill, H.R. 2371, would establish a pilot program to raise transparency and direct Western Area Power Administration to publicly display information on its website on power and transmission rates, energy sales and capitol costs and expenditures going back to fiscal year 2008.
Sponsors of the bill, including U.S. Rep. Paul Gosar, R-Ariz., introduced the legislation in response to concerns about "millions of dollars of waste and fraudulent activity" by Western Area Power Administration, Gosar said.
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| Congress | ||
| Feb. 5 | House Homeland Security Committee Chairman Michael McCaul will delivery the "State of National Security Address" at the George Washington University Center for Cyber and Homeland Security. | |
| Feb. 6 | The House Energy and Commerce Committee's Subcommittee on Energy will hold another hearing on modernization of the U.S. Department of Energy, this one focused on "Advancing the Economic and National Security Benefits of America's Nuclear Infrastructure." | |
| Feb. 7 | The Senate Environment and Public Works Committee will hold a business meeting on the nomination of Andrew Wheeler as Deputy Administrator of the EPA. | |
Feb. 8 | The Senate Energy and Natural Resources Committee will hold a hearing on energy infrastructure. | |
| Industry events | ||
| Feb. 6-9 | The National Association of State Energy Officials will hold its 2018 energy policy outlook conference at the Fairmont Hotel in Washington, D.C. | |
| Feb. 6 | U.S. Energy Information Administration Administrator Linda Capuano will present the EIA's Annual Energy Outlook 2018 at Johns Hopkins University's School of Advanced International Studies in Washington, D.C. | |
| Feb. 9 | The National Capitol Area Chapter of the U.S. Association for Energy Economics will host a lunch presentation on natural gas liquids production and its impact on manufacturing with Anne Keller, research director for NGLs at Wood MacKenzie Inc. | |
| Feb. 6 and Feb. 8 | The Atlantic Council will bring together experts and policymakers to discuss "Russia's Cyber Operations in Ukraine and Beyond," including cyberattacks on the power grid. | |
| Feb. 8-9 | The Environmental Law Institute will cosponsor the Environmental Law 2018 conference in Washington, D.C. | |
Notable stories from last week
Energy department adviser assures US coal industry he's 'here to help'
After initial setbacks, Nuclear Energy Institute sees advances in 2018
Pruitt talks decentralizing EPA operations, can't recall harsh Trump comments
After praise and panic, US offshore oil, gas plan to face tough market test
EPA, Army Corps finalize delay of Clean Water Rule

