The heads of the U.S. Department of Energy and Department of Interior will appear before lawmakers this week on the Trump administration's budget request for fiscal year 2019. The hearings could shed light on the agency's regulatory and policy plans for energy.
Congress also is expected to release an omnibus spending bill for the rest of the 2018 fiscal year, which runs through September, as current funding for the federal government is set to expire after March 23.
Energy Secretary Rick Perry will testify March 15 before a U.S. House of Representatives' subcommittee on the administration's latest budget request for the DOE. President Donald Trump proposed steep cuts for the department's renewable energy office and renewed calls to both terminate the DOE's Title 17 loan guarantee program and discontinue funding for the Advanced Research Projects Agency-Energy, known as ARPA-E.
Energy Secretary Rick Perry Source: Associated Press |
Lawmakers, particularly in the U.S. Senate, have pushed back against some of Trump's more dramatic proposed DOE cuts, and they seem poised to do so again. Bloomberg reported that House and Senate appropriators will protect the DOE loan guarantee program. Congress also is expected to exclude from the omnibus funding for a long-term nuclear waste repository at the Yucca Mountain site in Nevada despite Trump's request for $120 million to develop the project, Bloomberg said.
Jennifer Hing, a spokesperson for the House Appropriations Committee, confirmed that the omnibus likely will be released this week but declined to provide other details of the upcoming bill.
"The committee does not comment or speculate on funding or policy items that may or may not be included in future bills," Hing said.
The Department of Interior's budget also will be under scrutiny this week.
Interior Secretary Ryan Zinke will testify March 13 before the Senate Energy and Natural Resources Committee and on March 15 before the House Natural Resources Committee. Zinke could discuss the agency's controversial five-year offshore drilling plan, which initially proposed opening nearly all U.S. coastal areas to oil and gas drilling. Other potential topics include Interior's efforts to roll back Obama-era methane regulations for oil and gas producers on public lands, possible changes to how the agency calculates royalty rates for coal production, and the Trump administration's goal to increase energy output in federal areas.
Energy may push for tariff exemptions
U.S. pipeline developers and LNG export terminal builders likely will seek waivers from the Trump administration's newly proclaimed tariffs on steel and aluminum imports. Oil and gas shippers fear the tariffs — set at 25% for steel and 10% for aluminum — could raise costs for a range of resource-intensive energy projects.
"We are deeply disappointed by the administration's plan to impose a 25% tariff on steel, which could endanger the same U.S. LNG exports that the administration seeks to expand across the globe," said Charlie Riedl, executive director of the Center for Liquefied Natural Gas. Riedl said the tariffs could jeopardize more than $100 billion of LNG investment and "kill jobs and damage valuable trade relationships with allies."
But the White House carved out some exemptions that could provide relief for U.S. industries relying on steel and aluminum imports; for instance, the tariffs initially would not apply to products from Canada and Mexico. The Trump administration also said it could provide relief from the tariff "for any steel article determined not to be produced in the United States in a sufficient and reasonably available amount or of a satisfactory quality."
U.S. pipeline developers could seek to use that exclusion if they rely on a particular type of steel not produced domestically.
FERC chair gives health update
Federal Energy Regulatory Commission Chairman Kevin McIntyre quietly released a statement March 11 that he was diagnosed with a small brain tumor last summer that doctors successfully removed. McIntyre said the surgery was followed by standard post-operative treatment and that he expected "to be able to maintain my usual active lifestyle, including working full time."
For privacy reasons, McIntyre said he would not provide further details on his health. The surgery occurred during McIntyre's nomination process and may have played a role in his delayed Senate confirmation, which did not occur until November 2017. The White House announced its intent to nominate McIntyre as chairman in July 2017 after months of speculation that Trump would pick him to lead the agency.
The update comes at a busy time for FERC. The commission will hold its monthly open meeting March 15. The agenda includes two new rulemaking proceedings addressing the impact of recent federal tax cuts on FERC-jurisdictional electric and natural gas rates. That move comes after FERC in January asked developers of interstate gas pipeline projects to revise their proposed rates and cost-of-service estimates.
The Tax Cuts and Jobs Act lowered the corporate tax rate to 21% from 35% and affected numerous other tax deductions and incentives. Regulated utilities must pass those savings to customers and otherwise account for the law's impacts on rates, setting off a wave of state and federal regulatory proceedings.
In addition to tax reform issues, FERC is moving ahead on its recently launched grid resilience proceeding. Regional transmission organizations and independent system operators had a March 9 deadline to file comments with FERC on the matter, including possible resilience concerns tied to coal and nuclear plants retirements, cybersecurity threats, and states' growing reliance on advanced or emerging technologies such as distributed generation and battery storage.
FERC started the review after rejecting the DOE's request for a rule that would ensure full cost recovery for certain coal and nuclear plants in wholesale markets as long as those facilities kept at least 90 days of fuel on-site. Although FERC found the approach endorsed by the DOE to be legally deficient, the commission still looks likely to take further steps to ensure a stable, reliable bulk power system.
"I would be surprised if we go through all that process and take no action," FERC Chairman Kevin McIntyre said March 8 at the CERAWeek by IHS Markit conference in Houston.
Another thorny issue FERC must address is the impact of state energy policies on regional wholesale markets. On March 9, a divided FERC approved a plan from ISO New England to create a two-part power capacity auction to facilitate the retirement of older generating units and accommodate state goals to add more renewable energy. In approving the proposal, FERC said ISO New England's plan would avoid undermining investor confidence in building new capacity.
But in a dissenting opinion, FERC Commissioner Robert Powelson worried the plan would threaten the viability of the region's wholesale capacity market and send the signal that a particular energy resource cannot compete without state support. He blamed states in New England for joining an organized market and making ISO New England responsible for ensuring resource adequacy while seeking to procure energy resources of their own choosing.
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|---|---|---|
| | Congress | |
| March 13 | The U.S. Senate Energy and Natural Resources Committee will examine the U.S. Department of Interior's budget request for fiscal year 2019, with Interior Secretary Ryan Zinke testifying. | |
| March 14 | The U.S. House Appropriations Committee's Subcommittee on Energy and Water Development and Related Agencies will hold a hearing on the fiscal year 2019 budget request for the U.S. Army Corps of Engineers and Bureau of Reclamation. | |
| March 14 | The House Committee on Science, Space and Technology will hold a hearing on the objectives and programs carried about by the U.S. Department of Energy's national laboratories. | |
| March 15 | The House Appropriations Committee's Subcommittee on Energy and Water Development and Related Agencies will review the DOE's fiscal year 2019 budget request, with Energy Secretary Rick Perry testifying. | |
| March 15 | Interior Secretary Ryan Zinke will appear before the House Natural Resources Committee on Interior's priorities and the White House's fiscal year 2019 budget proposal. | |
| March 15 | The Senate Energy and Natural Resources Committee will consider the nominations of Theodore Garrish as Assistant Secretary of Energy for International Affairs and James Edward Campos as Director of the Office of Minority Economic Impact at the DOE. | |
| Federal Agencies | ||
| March 15 | FERC will hold its regular monthly meeting in Washington, D.C. | |
| | Industry events | |
| March 13-15 | The Advanced Research Projects Agency-Energy (ARPA-E) will hold its 2018 Energy Innovation Summit at the Gaylord National Convention Center in National Harbor, Md. | |
| | March 13 | The Global CCS Institute will hold its annual DC Forum on CCS at the Ronald Reagan Building in Washington, D.C. |
| March 13 | The Atlantic Council's Eurasia Center and Global Energy Center will host a debate on the Nord Stream 2 pipeline and its potential implications for the U.S. and Europe. | |
| | March 14 | The American Council on Renewable Energy will host its Renewable Energy Policy Forum in Washington, D.C. |
| March 14 | Faegre Baker Daniels will host its fifth annual Energy & Environmental Symposium at the National Press Club in Washington, D.C. | |
Other notable stories from last week
Feds' small coal plant plan puzzles some, but hits on a coal company priority
Despite deep budget cuts, Trump administration says it supports advanced nuclear
Diverse group pushes FERC to re-examine role of wholesale markets
Carbon capture credits could create tax equity market that spurs new projects
US metallurgical coal companies may benefit if 'trade war' talk depresses dollar


