House Passes Energy Legislation

December 4, 2015 Energy Update

On December 3, the House of Representatives approved the “North American Energy Security and Infrastructure Act of 2015” (H.R. 8) by a 249-174 vote.

The House Energy and Commerce Committee approved the legislation on September 30. As described in the Committee’s report (H.Rept. 114-347), the legislation includes provisions that would: . Enhance the Federal Energy Regulatory Commission’s (FERC) “role as the lead agency to coordinate concurrent [interstate natural gas pipeline] permit reviews, establish timelines, and require transparency in the process.” . Establish “an interagency task force to coordinate with Canada and Mexico on mutually- beneficial energy policy decisions affecting North America…” . Direct the Department of Energy (DOE) to “streamline the regulatory process for authorizing U.S. LNG exports by establishing a thirty day deadline for DOE to act on applications at the conclusion of the review required by the National Environmental Policy Act” (NEPA). . Direct “FERC to establish an Office of Compliance Assistance and Public Participation to be responsible for promoting improved compliance with Commission regulations, make recommendations on energy market behavior and enforcement, and perform outreach to the regulated community.”

The House passed a manager’s amendment, which stripped the bill of some of the provisions included in the version reported from the Energy and Commerce Committee, including language modernizing the Strategic Petroleum Reserve (SPR), which were enacted as part of the “Bipartisan Budget Act of 2014” (H.R. 1314, P.L. 114-74). The legislation passed by the House also incorporates bills approved by the House Natural Resources Committee: the “National Energy Security Corridors Act” (H.R. 2295); and the “Electricity Reliability and Forest Protection Act’’ (H.R. 2358).

Amendments:

During debate, the House adopted the following amendments: . Manager’s Amendment/Natural Gas Pipeline Corridors: House Energy and Commerce Committee Chairman Fred Upton’s (R-MI) manager’s amendment adds new provisions to the legislation, including the “National Energy Security Corridors Act”, which would establish a process for designating “National Energy Security Corridors on Federal Lands”. This section

______©2015 Williams & Jensen, PLLC 701 8th Street, N.W. Suite 500 Washington, D.C. 20001 Telephone: (202) 659-8201 Fax: (202) 659-5249 www.williamsandjensen.com would require the Secretary of Energy, “in evaluating Federal lands for designation as a National Energy Security Corridor”, to “seek input from other Federal counterparts, State, local, and tribal governments, and affected utility and pipeline industries to determine the best suitable, most cost-effective, and commercially viable acreage for natural gas transmission facilities”. The provision would also require the Secretary of Energy to “establish procedures to expedite and approve applications for rights-of-way for natural gas pipelines across National Energy Security Corridors”. The House approved this amendment by a 246-177 vote. . Energy Storage: Representative Scott Peters’ (D-CA) amendment would include “energy storage as a form of energy that DOE should consider to enhance emergency preparedness for energy supply disruptions during natural disasters.” The House approved the amendment by voice vote. . Protection of the Electric Grid: Representative Trent Franks’ (R-AZ) amendment would secure “the most critical components of America’s electrical infrastructure against the threat posed by a potentially catastrophic electromagnetic pulse.” The House approved the amendment by voice vote. . Reliability: Representative Bruce Poliquin’s (R-ME) amendment would specify “that electric plants can be considered reliable without having to enter into supply contracts that are greater than one year”. The House approved the amendment by voice vote. . Carbon Capture and Sequestration: Representative Marc Veasey’s (D-TX) amendment would direct “the Department of Energy to submit a report to Congress on the potential effects of commercial utilization of Carbon Capture and Sequestration could have on the economy, energy infrastructure and greenhouse gas goals.” The House adopted the amendment by voice vote. . Ethane Storage and Distribution Hub: Representative David McKinley’s (R-WV) amendment would direct “the Secretary of Energy and the Secretary of Commerce, in consultation with other relevant agencies and stakeholders, to conduct a study on the feasibility of establishing an ethane storage and distribution hub in the United States.” The House approved this amendment by voice vote. . Grid Modernization: Representative Renee Ellmers’ (R-NC) amendment would make a policy statement on grid modernization. The House approved the amendment by voice vote. . Grid Resilience: Representative Sheila Jackson Lee’s (D-TX) amendment would require the Secretary of Energy to submit to Congress “a report on methods to increase electric grid resilience with respect to all threats, including cyber attacks, vandalism, terrorism, and severe weather, no later than 120 days after the date of enactment of the Act.” The House adopted the amendment by voice vote. . National Response Center: Representative Dan Kildee’s (D-MI) amendment would require the Government Accountability Office (GAO) to study and report on ways to improve the National Response Center. The Coast Guard operates the National Response Center, which receives reports on oil and chemical spills. The House approved the amendment by voice vote. . Energy Transportation: Representative John Garamendi’s (D-CA) amendment would include “energy transportation in the list of considerations for the Energy Security Valuation report in Sec. 3002.” The House adopted the amendment by voice vote. . Coal Exports: Representative David McKinley’s (R-WV) amendment would require that “no permit for the construction, operation, or maintenance of an export facility can be denied until all ______

©2015 Williams & Jensen, PLLC 701 8th Street, N.W. Suite 500 Washington, D.C. 20001 Telephone: (202) 659-8201 Fax: (202) 659-5249 www.williamsandjensen.com reviews required under the National Environmental Policy Act of 1969 are complete.” The House approved the amendment by voice vote. . Battery Storage: Representative Mark Takano’s (D-CA) amendment would require the GAO to report to Congress on the “potential of battery energy storage”. . Methane to Energy: Representative Scott Peters’ (D-CA) amendment would direct “the Secretary of Energy to report on energy savings and greenhouse gas emissions reduction from conversion of captured methane to energy.” The House approved the amendment by voice vote. . Re-Refined Oil: Representative Susan Brooks’ (R-IN) amendment would require “the Department of Energy to review and update the data used for a 9 year old federal study on re- refined oil, and require[] the development of a strategy to increase its collections and sustainability.” The House approved the amendment by voice vote. . External Power Supply Rule: Representative Renee Ellmers’ (R-NC) amendment would make “a technical fix to DOE’s External Power Supply Rule.” . Cross-Border Energy Infrastructure: Representative Gene Green’s (D-TX) amendment would replace the existing Presidential Permit process for cross-border energy infrastructure with a “certificate of crossing.” The amendment would set a 120-day time limit for consideration following completion of the NEPA review. The House approved the amendment by a 263–158 vote. . Crude Oil Exports: Representative Joe Barton’s (R-TX) amendment would repeal the ban on crude oil exports. The House approved this amendment by a 255–168 vote. . Regulatory Planning: Representative Sean Duffy’s (R-WI) amendment would require “the EPA to satisfy regulatory planning and review requirements established by the Clinton and Obama Administrations.” The House approved the amendment by voice vote. . Legal Challenges to Energy Projects on Federal Lands: Representative Paul Gosar’s (R-AZ) amendment would provide for “timely review for legal challenges of energy projects on federal land and limit[] attorney fees in order to discourage frivolous lawsuits and foster energy production.” The House approved the amendment by voice vote. . Energy Exports: Representative Evan Jenkins’ (R-WV) amendment would direct “the Department of Energy and Department of Commerce to conduct a study regarding the legal and regulatory barriers that delay, prohibit, or impede the export of natural energy resources.” The House approved the amendment by voice vote. . Community Solar Projects: Representative Kathy Castor’s (D-FL) amendment would allow “community solar projects to be connected to their power distribution system and allow[] the electricity produced by the community solar facility to be credited directly to each of the consumers that owns a share of the system.” . Crude Oil Volatility and Transportation: Representative Mark DeSaulnier’s (D-CA) amendment would require “the Department of Energy to study the maximum level of volatility that is consistent with the safest practicable shipment of crude oil.” The House approved the amendment by voice vote. . Marine Hydrokinetic Energy: Representative Ted Deutch’s (D-FK) amendment would promote “the research, development, and demonstration of marine hydrokinetic energy technologies and improve[] the regulatory process for such programs.” The House approved the amendment by voice vote. ______

©2015 Williams & Jensen, PLLC 701 8th Street, N.W. Suite 500 Washington, D.C. 20001 Telephone: (202) 659-8201 Fax: (202) 659-5249 www.williamsandjensen.com . Smart Meter Privacy Standards: Representative Alan Grayson’s (D-FL) amendment would set “minimum privacy standards for ‘Smart Meters’ and their use in the smart grid.” The House approved the amendment by voice vote. . Youth Energy Competition: Representative Sheila Jackson Lee’s (D-TX) amendment would direct the “Secretaries of Energy and Commerce to jointly establish an energy enterprise competition to encourage youth to propose solutions to the energy challenges of the United States and to promote youth interest in careers in science, technology, engineering, and math, especially as those fields relate to energy.” The House approved the amendment by voice vote. . Updated Terminology: Representative Grace Meng’s (D-NY) amendment would eliminate outdated terms in the U.S. Code and replace “them with culturally appropriate terms.” The House approved the amendment by voice vote. . Smart Meter Security: Representative Don Norcross’ (D-NJ) amendment would require “the Secretary of Energy to study weaknesses in the security architecture of certain smart meters currently available.” The House approved the amendment by voice vote. . Wood Heater Regulations: Representative David Rouzer’s (R-NC) amendment would “repeal the March 2015 EPA final rule establishing federal standards for residential wood heaters.” The House approved the amendment by a 247-177 vote. . Vegetation Management along Electric Transmission Right-of-Ways: Representative Kevin Cramer’s (R-ND) amendment would authorize voluntary vegetation management along right-of- ways for electric transmission infrastructure on federal lands. The House approved the amendment by a 252–170 vote.

Next Steps:

On July 30, the Senate Energy and Natural Resources Committee voted to report the “Energy Policy Modernization Act” (S. 2012). This bill is similar in scope to the House-passed legislation. It is unclear when the full Senate may debate S. 2012. Assuming the Senate passed its energy bill, the House and Senate would then need to reconcile the two to send a final version to the President. This week the Obama Administration issued a Statement of Administration Policy (SAP) threatening a veto of H.R. 8. The SAP cited a number of objections to the legislation, including the provisions intended to expedite permitting of interstate natural gas pipelines. The SAP also asserted that H.R. 8 “would unnecessarily curtail DOE’s ability to fully consider whether natural gas export projects are consistent with the public interest.”

By: Frank Vlossak

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