Analysis by Energy Workforce SVP Government Affairs & Counsel Tim Tarpley
House Speaker Nancy Pelosi is reversing course on her commitment to push through the Senate-passed bipartisan infrastructure package and the much larger $3.5 trillion reconciliation infrastructure bill at the same time.
Speaker Pelosi told Democrats in a rare Monday night meeting that it has become clear over the past few weeks they will need to scale back the $3.5 trillion dollar package to have a chance of passing the Senate. This will require an overhaul of the bill, as well as a pre-cleared deal with Senators Joe Manchin and Kyrsten Sinema.
The size and scope of the final reconciliation package (if it can come together at all) could have far-reaching impacts on our industry as the climate provisions, tax changes, methane fees and changes to the federal leasing program could be included. As the bill gets smaller and negotiations proceed, we expect some of these provisions to be dropped or moderated. Negotiations in the coming days will be important for our industry and the entire energy sector.
In addition, Congress needs to raise the federal debt ceiling in the coming weeks. While this process has become almost routine over the years, there are significant market implications for failure to take this procedural step.
While Pelosi and Democratic leadership hoped to pass a debt-ceiling measure this week, Senate Republicans blocked the bill and Democrats will likely will punt this provision until later next month. We can expect the ceiling will be raised but not before some drama.
Ford Betting Big on Electric Vehicles
U.S. automaker Ford announced this week they are investing $11.4 billion in new production facilities to build electric vehicles in Tennessee and Kentucky. Ford announced plans to create 11,000 new jobs.
The Blue Oval City campus in Stanton, TN would get 6,000 jobs producing an electric version of the F-150 pickup. The remaining 5,000 jobs will be heading to Glendale, KY at the BlueOvalSK Battery Park where Ford plans to manufacture batteries for its new fleet of electric vehicles starting in 2025.
Ford plans for 40% of its fleet to be electric by 2030. Reservations for the electric F-150 have topped 130,000 for the vehicle, which is expected to ship by mid-2022. In 2020, Ford sold 787,372 of the gasoline-powered version of the vehicle.
Perhaps the most important aspect of this announcement is that nearly half the financial investment is focused on battery production in the United States. This represents a realization by Ford that supply chains, especially for critical components, need to return to the U.S. for the automaker to achieve its bullish goals.
This is also a Biden Administration priority as government officials realize the Administration’s aggressive climate goals may not be possible if there are supply chain problems or shortages of critical components.
While battery production in the United States is one part of this puzzle, new manufacturing plants do not solve the critical minerals supply chain challenges. Discussion of these issues will remain in the forefront as the House and Senate debate the infrastructure and reconciliation packages in the coming weeks.
Sen. Joe Manchin, who has taken a central role in negotiations, has voiced grave concerns about the U.S. taking steps that undermine U.S. control of critical energy supply chains.
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.
