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Reconciliation Package Negotiations Continue as Bill Gets Smaller

energy
Tim Tarpley, SVP Government Affairs & Counsel

Analysis by Energy Workforce SVP Government Affairs & Counsel Tim Tarpley

Congressional negotiations continue over President Biden’s domestic agenda, much of which is included in a reconciliation package facing a difficult pathway to final approval.

The bill is no closer to passage than it was earlier this month. The overall cost must be reduced, and Sen. Joe Manchin and other Senate moderates are driving negotiations. Clean energy language opposed by Manchin because of its long-term impact on coal-fired power generation will not stay in the bill.

The basics of the $150 billion clean energy plan was that government would financially reward power producers for using solar, wind and other renewable energy sources and would penalize producers using fossil fuels. The Council has worked with lawmakers to point out that a major flaw with this proposal is its failure to recognize that natural gas power generation is one of our best tools for lowering carbon emissions, especially when replacing older coal-fired power generation.

According to the U.S. Energy Information Administration (EIA), replacing coal power generation with natural gas has been the biggest contributor to the U.S. lowering carbon emissions since 2005. Manchin and others argue that the switch to cleaner power generation is already happening, and companies should be given incentives to make beneficial technological advancements but not penalized in a way that would raise energy costs.

Additionally, with the EIA estimating that worldwide energy demand will increase 50% by 2050, it’s clear that the world needs more energy, not less. Penalizing the use of natural gas domestically becomes a harder sell on Capitol Hill given that it makes up a significant portion of the power mix throughout the U.S. The energy crunch experienced in Europe and other parts of the world suggest that U.S. natural gas will be needed to get the nation and its allies through demand spikes in the coming years.

It’s unclear what provisions would replace the proposed clean energy measure. Sen. Ron Wyden may have suggested a carbon tax, although this prospect seems unlikely. Sen. Manchin’s opposition to clean power language would likely include a carbon tax provision.

The Council is urging policymakers to focus on measures that support creation of new lower carbon energy without penalizing domestically produced energy sources, especially natural gas, which can facilitate a lower carbon future.

The Council will continue to advocate for common sense solutions and for the energy solutions our Member Companies provide.

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.
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