Analysis by Energy Workforce SVP Government Affairs & Counsel Tim Tarpley
Over the weekend, House Speaker Nancy Pelosi wrote a letter to her caucus suggesting that a rule for both the budget reconciliation process, as well as the Senate-passed bipartisan infrastructure bill could come to the House floor as soon as the week of August 23.
Packaging the bills is an attempt to balance the competing positions of different flanks of her caucus. On one hand, many moderate Democrats have called for an immediate vote on the Senate’s bipartisan infrastructure package and rejected calls to tie this vote to the larger budget reconciliation package, which will likely be used to pass the remainder of the Biden Administration’s “Build Back Better” priorities.
On the other hand, some liberals within the caucus don’t want to vote for the infrastructure bill unless it’s tied to the reconciliation measure for fear that the reconciliation could fail to pass. That would effectively eliminate the chance to pass the Administration’s other priorities.
This is a challenging situation for the Speaker and comes at a difficult time with midterms on the horizon. In addition, the Biden Administration faces tremendous challenges in foreign policy and a COVID-19 resurgence.
Speaker Pelosi has given committee chairs until September 15 to finalize their individual portions of the reconciliation package. Moderate Democrats are under increasing pressure to support whatever is in the package because the vote margin will be so small that any defections could quickly shut down the entire process.
While Pelosi’s strategy doesn’t guarantee the infrastructure package comes to an immediate vote, the rule could allow enough time to give her additional strategic options.
Treasury Department Halts Support for Fossil Fuels Through Development Banks
The Treasury Department issued new guidelines on Monday that direct voting representatives at multilateral development banks to block financing for coal and oil projects. There is a narrow exception for natural gas projects, but many natural gas projects would not meet the criteria for this exception.
The language supports financing for new carbon capture use and storage projects, as well as methane abatement for existing fossil fuel-fired gathering units (assuming that the abatement programs do not extend the power plant’s useful life).
The narrow exception states that for the U.S. to continue supporting natural gas projects, the countries receiving financing must be either low income, facing violence and civil strife, or a developing island state. There must also be no “feasible, existing clean energy alternative” and the investment must improve energy security and energy access.
The guidelines also say that investments must be aligned with and supportive of the Paris Agreement. This policy is important, not only because of implications for project development abroad, but because it may signal a government-wide policy that could include the State Department, Department of Energy and other agencies.
Further developments and similar announcements from other agencies can be expected in the coming weeks and months as the Administration continues to formulate its “whole of government” approach to climate change and energy policy.
Federal Land Leases
On Monday, the U.S. Department of Interior released a statement saying it would end the six-month pause on oil and gas leasing that has been ruled illegal by a Louisiana federal judge.
In an official statement, the Department said: “Federal onshore and offshore oil and gas leasing will continue as required by the district court while the government’s appeal is pending. In complying with the district court’s mandate, Interior will continue to exercise the authority and secretion provided under the law to conduct leasing in a manner that takes into account the program’s many deficiencies.”
We will likely have to wait for additional actions by Interior to clarify what this statement will mean in the field. The Department has been promising to release a full report on the leasing program for much of the summer, but we have yet to see this report, which continues to be delayed.
The Council will continue to advocate for a full resumption of leasing on federal lands both offshore and onshore, as is required by law.
For more information on the Council’s advocacy efforts or to get involved, contact SVP Government Affairs & Counsel Tim Tarpley.
Tim Tarpley, SVP Government Affairs & Counsel, analyzes federal policy for the Energy Workforce & Technology Council. Click here to subscribe to the Council’s newsletter, which highlights sector-specific issues, best practices, Council activities and more.