Energy & Sustainability Washington Updates – October 2018

Congress

The House of Representatives will hold no votes the week of October 1 or October 8 and is scheduled to be out of session the weeks of October 22 and October 29 in the lead up to the November 6 mid-term elections. The Senate is officially scheduled to be in session for the entire month of October, although we expect that they too will adjourn mid-month to allow Senators the ability to return home to campaign ahead of the elections.

President Signs Energy Legislation

On September 28 President Trump signed into law three energy-related bills.

• H.R. 589, the Department of Energy Research and Innovation Act, establishes policy for Department of Energy science and energy research and development programs and reforms National Laboratory management and technology transfer programs.
• H.R. 1109 amends the Federal Power Act to clarify the authority of the Federal Energy Regulatory Commission over mergers or consolidations by a public utility.
• S. 97, the Nuclear Energy Innovation Capabilities Act, amends the Energy Policy Act to update the mission and objectives of the Department of Energy’s civilian nuclear energy research, development, demonstration (RD&D), and commercial application programs.

New Energy Legislation

• S.Res.664 was introduced by Sen. Graham (R-SC) designating October 8, 2018 as “National Hydrogen and Fuel Cell Day” with the resolution approved on October 1, 2018. The resolution was cosponsored by Sens. Coons (D-DE), Blumenthal (D-CT), Gardner (R-CO), Portman (R-OH), and Murphy (D-CT).
• S. 3485, the LNG Permitting Certainty and Transparency Act, was introduced on September 25 by Sen. Barrasso (R-WY), with no cosponsors. The bill is intended to provide certainty with respect to the timing of Department of Energy decisions to approve or deny applications to export natural gas.
• H.R. 6814, the Troubled Nuclear Plants Communities Assistance Act, was introduced by Rep. Kaptur (D-OH) on September 13 with Rep. Welch (D-VT) cosponsoring. The bill would require the Secretary of Energy to establish and carry out a program to provide financial assistance to units of local government impacted by the reduction in tax revenue from nuclear power plants.
• H.R. 6807, the Coal Royalty Fairness and Communities Investment Act, was introduced by Rep. Cartwright (D-PA) on September 21 with Reps. Lowenthal (D-CA), Huffman (D-CA), Ryan (D-OH), and Tsongas (D-MA) cosponsoring. The bill would amend the Mineral Leasing Act to make improvements in laws relating to coal royalties.
• H.R. 6763, the Domestic Offshore Energy Reinvestment Act, was introduced by Rep. Graves (R-LA) on September 17 with no cosponsors. The bill would amend the Gulf of Mexico Security Act of 2006 with the aim of increasing the share of offshore energy revenues for Gulf Coast states, while providing an increase in funding for coastal restoration and flood protection projects.

Executive Branch

Administration Announces Agreement on NAFTA Reform and Update

Meeting a self-imposed deadline, the White House announced late on September 30 that the United States has reached an agreement with Canada on revamping NAFTA. Mexico and the US reached agreement in August and ultimate success in this effort was contingent on Canada coming aboard in time for Mexico to approve the agreement under its current administration before the new president-elect takes office. Revamping NAFTA was a major campaign promise for President Trump. The economies of the United States, Mexico, and Canada make up more than $1.2 trillion worth of trade and the new agreement has 34 chapters – 12 more than the current NAFTA – representing changes in the economy in the two decades-plus since NAFTA was first negotiated.

The text of the new United States-Mexico-Canada Agreement (USMCA) can be found here.

The new trade agreement will now go to Congress for consideration, although a final vote is not expected until next year. The USMCA will be submitted for congressional approval under Trade Promotion Authority (TPA) which allows for “fast track” passage of free trade agreements through an up-or-down vote without amendments.

Obviously, the outcome of the November elections could play an outsized role in the outlook for the new USMCA, with Democrats, should they win control of Congress, having significant leverage. We’re hearing that one White House / GOP tactic under consideration is for the President to withdraw from NAFTA in order to force congressional approval of the USMCA.

Chapter 24 of the USMCA is focused on Environment and addresses a number of topics including levels of environmental protection, enforcement of environmental laws, environmental impact assessment, multilateral environmental agreements, protection of the ozone layer, air quality, responsible business conduct and corporate social responsibility, voluntary mechanisms to enhance environmental performance, trade and biodiversity, and environmental goods and services, among others.

The USMCA also includes a number of Sector Annexes, including Annex 12-D on Energy Performance Standards, which includes agreements on enhancing regulatory compatibility and voluntary approaches to promote energy efficiency.

DOE Announces New Projects to Extend Grid Energy Storage

The Department of Energy has announced the selection of 10 projects as part of a new Advanced Research Projects Agency-Energy (ARPA-E) program known as Duration Addition to electricity Storage (DAYS). Awardees will develop energy storage systems to provide reliable, affordable power to the electric grid for up to 100 hours, enhancing grid resilience and performance. More on the DAYS project can be found here.

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