Analysis from PESA Vice President Government Affairs Tim Tarpley
Late Monday night, Congress finalized discussions on the year-end $1.4 trillion government spending package to keep the government funded until September along with a $900 billion COVID stimulus package. There is quite a bit in this package of note for the OFS sector, but one item of critical importance is what was left out. Congress could not come to a bipartisan agreement on the COVID liability shield language or a funding package for state and local jurisdictions so these provisions were separated out and removed from the final deal. Both sides will continue negotiations on these provisions and potentially work on another package in the new year. This could possibly be folded into a large infrastructure stimulus that is expected in the next year.
Provisions of note to OFS in the Omnibus Spending Package/COVID Relief:
- $600 for individuals making up to $75,000 per year, $1,200 for couples making up to $150,000 per year, as well as a $600 payment for each dependent child.
- Unemployment will be extended and workers will receive an additional $300 per week through March 14
- $284 billion in additional funding for the Paycheck Protection Program (PPP) allowing for continued payments and new applications
- Creates a new business deduction for expenses associated with forgiven PPP loans
- Expands employee retention credit
- Extends payroll tax subsidy for employers offering workers paid sick leave
There were also a variety of energy/sustainability riders tucked in the package worth noting:
- Offshore wind would get access to the full production tax credit for projects that started between 2017 and 2025
- Investment Tax Credit for Solar extending through 2022 at current 26% rate
- Two-year extension for credit for carbon capture and sequestration
- Five-year extension of 9 cent per barrel tax to fund the Oil Spill Liability Trust Fund
- Democrats were successful in including a policy rider to limit oil and gas development near Chaco Culture National Park in New Mexico but Republicans successfully added language to prohibit the Interior Department from further regulation of the greater sage grouse.
Tucked inside the package was also the largest energy bill in over 12 years authorizing $35 billion in new investments in a variety of forms of energy. This text was derived from a negotiated package worked on by Senators Manchin and Murkowski. This bipartisan deal will likely be followed by a larger stimulus package once the Biden Administration begins next year. Notable provisions that were included:
- Authorizes federally backed demonstration programs for geothermal, advanced nuclear, energy storage and direct carbon air capture projects. These new projects will be funded by DOE’s ARPA-E program which will get an additional $761 million through 2025. Of particular note is this program will pay direct cash payments for successful development of new carbon capture technologies by private companies.
- The bill sets a goal that federal lands produce 25 Gigawatts of electricity from wind, solar and geothermal by 2025.
- Requires new pipeline regulations within a year for methane leak detection and repair.
COVID Vaccine Distribution Update
Yesterday it was announced that the State of Texas has chosen to veer from the federal guidelines for COVID vaccine distribution. The CDC recommends beginning to vaccinate essential workers in the second tier of vaccinations, however the State has chosen to focus on those over 65 and with preexisting conditions. The State has chosen this path because 70% of the deaths in Texas so far have come from these groups. This is significant to OFS in that our workforce (in Texas) will likely have to wait a bit longer to begin vaccinations. There are roughly 8 million Texans in the “1 B” group so it may be into late February before this group is fully vaccinated. Vaccinations of “essential workers” will begin after this group is complete. It is worth noting that this timeline is still very fluid, as not all eligible members of this group may ultimately choose to get vaccinated, and supply could catch up with demand sooner than expected. PESA will continue to monitor this situation and update members as more details are released.
Texas Phase 1B COVID-19 Vaccine Priorities
- People 65 years of age and older
- People 16 years of age and older with at least one chronic medical condition that puts them at increased risk for severe illness from the virus that causes COVID-19, such as but not limited to:
- Chronic kidney disease
- COPD (chronic obstructive pulmonary disease)
- Heart conditions, such as heart failure, coronary artery disease or cardiomyopathies
- Solid-organ transplantation
- Obesity and severe obesity (body mass index of 30 kg/m2 or higher)
- Sickle cell disease
- Type 2 diabetes mellitus
For more information, please contact PESA Vice President Government Affairs Tim Tarpley.