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Budget Reconciliation and Infrastructure Package Update

SVP Government Affairs Tim Tarpley
Tim Tarpley, SVP Government Affairs & Counsel

Analysis by Energy Workforce SVP Government Affairs & Counsel Tim Tarpley

On Capitol Hill, the week has been dominated by continuing negotiations that set the stage for a path forward on the bipartisan infrastructure and reconciliation bills. After a significant rift opened among Democrats that threatened to derail Speaker Nancy Pelosi’s plans, negotiators struck a deal and the $3.5 trillion budget reconciliation bill passed the House along party lines.

The split among Democrats centered on Speaker Pelosi’s intent to pair passage of the reconciliation bill with $1 trillion bipartisan infrastructure measure. Pelosi feared not having sufficient votes because of her party’s slim three-vote majority, a tiny margin for error.

A group of nine Democratic moderates complicated the strategy by demanding a quick vote on the bipartisan infrastructure bill, which would give them a major victory to promote to constituents. The group worried that the infrastructure package could languish for months without a firm commitment for a vote.

This vote could be significant for our industry. The reconciliation package will likely include changes to tax treatment of oil and gas companies, and operations in foreign markets. These are on the table as measures to help pay for the package. These “pay-fors” will be finalized by the various committees of jurisdiction in both the House and Senate in the coming months.

Some Democrats are also attempting to change federal oil and gas leasing rules in this package. It’s unclear if there’s sufficient support for such a move, but this is a significant threat that must be monitored.

Passage of the reconciliation package is a major step because it can be passed in the Senate by a simple majority vote.

The Government Affairs team will continue to follow the process and advocate for a package that does not unfairly target the energy industry with significant tax increases.

Magistrate Recommends Leasing Moratorium Lawsuit Should Proceed

On Monday, a federal magistrate recommended that a lawsuit brought by Louisiana and other states against President Biden’s oil and gas leasing moratorium be allowed to advance. Judges typically follow such recommendations from magistrates, so the suit will likely move forward.

This comes after the Department of Interior issued a statement last week saying it would restart the leasing program. Interior failed to say specifically when and how this would occur.

The Biden Administration had filed a motion to dismiss the lawsuit in June. The parties now have 14 days to file objections with the court before Judge Doughty makes a final decision.

The Government Affairs Team will continue to use all resources available to encourage the Department of Interior to follow the law and restart the leasing program as soon as possible.

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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