February 27, 2015
Capitol Update

In this issue:



As has been anticipated, President Obama vetoed legislation authorizing the construction of the Keystone XL pipeline, S. 1, the "Keystone XL Pipeline Approval Act."

In his message to Congress accompanying the returned legislation, the President again explained the rationale for his veto, but did not rule out ultimate approval of the Keystone XL project: “I am returning herewith without my approval S. 1, the "Keystone XL Pipeline Approval Act."  Through this bill, the United States Congress attempts to circumvent longstanding and proven processes for determining whether or not building and operating a cross-border pipeline serves the national interest… this act of Congress conflicts with established executive branch procedures and cuts short thorough consideration of issues that could bear on our national interest -- including our security, safety, and environment -- it has earned my veto.”

The regular Executive Branch approval process for the project continues, and with several agencies wrapping up internal environmental reviews this month, a decision could be coming soon.

After the veto, Senate Majority Leader Mitch McConnell (R-KY) responded, “It’s extremely disappointing that President Obama vetoed a bipartisan bill that would support thousands of good jobs and pump billions of dollars into the economy. It passed both houses of Congress with strong bipartisan support and it’s a priority for organized labor as well. Even the President’s own State Department says construction of this jobs and infrastructure project would result in only minimal environmental impact. Even though the President has yielded to powerful special interests, this veto doesn’t end the debate. Americans should know that the new Congress won’t stop pursuing good ideas, including this one.”

McConnell went on to note that the Senate would attempt to override the President’s veto, but chances are slim as currently tallies leave Republicans four votes shy of a veto-override threshold.



Hearings on the President’s Fiscal Year (FY) 2016 budget continued this week, focusing the funding for the Department of Energy (DOE), Environmental Protection Agency (EPA), and overall science funding.

DOE Secretary Ernest Moniz defended the department’s budget request before the House Committee on Science, Space and Technology. “In the last year, we have seen important accomplishments across the Department’s technology portfolio that highlight our all-of-the-above approach. We have geologically sequestered over 9 million metric tons of CO2 through DOE-supported projects. We have commissioned one of the world’s largest battery storage systems at the Tehachapi Wind Energy Storage Project. We have issued ten final appliance energy efficiency standards in calendar year 2014, which altogether will help reduce carbon dioxide emissions by over 435 million metric tons through 2030. Standards enacted since 2009 are projected to avoid a cumulative total of 2.2 billion metric tons of carbon emissions through 2030. The Office of Energy Efficiency and Renewable Energy (EERE) has achieved 70 percent of the SunShot goal of cost parity for utility scale solar energy. The Advanced Research Projects Agency—Energy’s (ARPA-E) grant program has attracted more than $850 million in private follow-on funding to 34 ARPA-E projects, with 30 ARPA-E teams forming new companies.”

His testimony, as well as background information prepared by committee staff, may be viewed at http://science.house.gov/hearing/full-committee-hearing-overview-department-energy-s-budget-proposal-fiscal-year-2016. Moniz also appeared before the House Appropriations Energy and Water Development, and Related Agencies Subcommittee. Additional information about the Appropriations hearing can be found at: http://appropriations.house.gov/calendar/eventsingle.aspx?EventID=393992.

EPA Administrator Gina McCarthy also spent time on Capitol Hill, defending her agency’s budget in a joint hearing before the House Commerce Energy and Power, Environment and the Economy Subcommittees.  “In building environmental policy, scientific research continues to be the foundation of EPA’s work. Environmental issues in the 21st century are complex because of the interplay between air quality, climate change, water quality, healthy communities, and chemical safety. Today’s complex issues require different thinking and different solutions than those used in the past. In FY 2016, we are requesting $528 million for research and development to evaluate and predict potential environmental and human health impacts, including impacts related to air pollution, water quality, climate change and biofuels. This will allow all decision makers at all levels of government to have the science needed to develop and implement environmental policies and strategies.”

For more information on this hearing, please visit: http://energycommerce.house.gov/hearing/fiscal-year-2016-epa-budget. Administrator McCarthy also spoke before the House Appropriations Subcommittee on Interior, Environment, and Related Agencies (see http://appropriations.house.gov/calendar/eventsingle.aspx?EventID=393995 for additional information).



Earlier this month, Secretary of State John Kerry and EPA Administrator Gina McCarthy signed a statement of intent to launch a new air quality partnership between the U.S. Department of State and the U.S. Environmental Protection Agency (EPA). The effort will provide U.S. citizens and government personnel with better information on air quality at select embassies and consulates around the world to reduce health risks from outdoor air pollution, and will offer greater opportunities for the United States to create partnerships on air quality with other nations.

Air pollution is a serious and growing health threat worldwide, yet in many areas, real-time air quality data is not available. The Department of State has a keen interest in providing sufficient air quality information to U.S. citizens and government personnel overseas to enable informed health decisions.

The partnership will use EPA's existing domestic AirNow system, which is an online platform that helps Americans understand how clean or polluted their outdoor air is. To build on this successful network, the Department of State plans to place air quality monitors at select American diplomatic posts where continuous fine particle pollution (PM 2.5) data is currently of limited availability, and to publicly share this data through EPA's AirNow website at: http://cfpub.epa.gov/airnow/index.cfm?action=topics.about_airnow

Additional information can be found at: http://www.state.gov/green



The Nuclear Regulatory Commission (NRC) has released its Project Aim 2020 report, detailing a staff- developed look at the agency’s future designed to improve the agency’s agility, effectiveness and efficiency while ensuring its ability to protect the public health and safety.

The Project Aim report identifies 17 recommended strategies under the themes of people, planning, and process to prepare the NRC for the future. The staff’s report concludes that the NRC needs to function more efficiently by: right-sizing the agency to retain appropriate skill sets needed to accomplish its mission; streamlining agency processes to use resources more wisely; improving timeliness in regulatory decision making and responding quickly to changing conditions; and, promoting unity of purpose with clearer agency-wide priorities.

In the coming weeks, the Commission will consider the recommendations of Project Aim and give direction to the staff on its implementation. The report proposes implementing the strategies during the next couple of years. The report projects that the NRC could be about 10 percent smaller in 2020 with a suggested workforce of about 3,400 employees (“full-time equivalents”), compared to 3,677 projected for fiscal year 2015 and 3,976 employees at the height of the agency’s expansion in FY 2010.

Further evaluation of the report by NAPA is expected in March. The Commission will provide a report to Congress in May.

The Project Aim 2020 report may be reviewed at: http://ppec.asme.org/key-issues/energy/



The Congressional Budget Office (CBO), at the request of the House Committee on Ways and Means, has released its analysis of H.R. 880, the American Research and Competitiveness Act of 2015.

H.R. 880 would amend the Internal Revenue Code to make permanent a modified version of the tax credit for qualified research expenses that expired at the end of 2014. The bill would not extend the traditional calculation method and its associated 20 percent credit. It would, however, make permanent the “alternative simplified method” for calculating the tax credit for qualified research expenses and generally increase the associated credit to 20 percent of those expenses that exceed 50 percent of the average qualified research expenses for the three preceding taxable years. Among other changes, the bill also would make permanent a tax credit for basic research and energy research and would change the base period for the basic research credit from a fixed period to a three-year rolling average.

The staff of the Joint Committee on Taxation (JCT) estimates that enacting H.R. 880 would reduce revenues, thus increasing federal deficits, by about $182 billion over the 2015-2025 period.

The Statutory Pay-As-You-Go Act of 2010 establishes budget-reporting and enforcement procedures for legislation affecting direct spending and revenues. Enacting H.R. 880 would result in revenue losses in each year beginning in 2015.

To read the entire analysis, please visit: http://www.cbo.gov/sites/default/files/cbofiles/attachments/hr880.pdf



Energy technology innovation is critical for expanding U.S. economic growth, enhancing energy security, and protecting our environment. However, critical federal investments in energy innovation have remained unchanged since 2010, as detailed by the American Energy Innovation Council (AEIC) in its third report, “Restoring American Energy Innovation Leadership: Report Card, Challenges, and Opportunities,” released earlier this week. The report finds that Congress and the Administration have a mixed record on implementing AEIC recommendations to promote energy innovation and urges greater federal investments critical to achieving the country’s economic, security, and environmental goals.

AEIC’s leaders—Bill Gates, Jeffrey Immelt, Chad Holliday, Tom Linebarger, Norm Augustine, and John Doerr—came together in 2010 because of a common concern over America’s insufficient commitment to energy innovation. In previous reports from 2010 and 2011, the AEIC recommended several federal policy actions to promote energy innovation. However, the federal government has a mixed record on these recommendations. Tangible progress has been made towards the development of a comprehensive national energy strategy through the release the Department of Energy’s (DOE) Quadrennial Technology Review and its follow-up Quadrennial Energy Review. Moreover, the Department’s Energy Innovation Hubs, Energy Frontier Research Centers, and Institutes for Manufacturing Innovation provide critical, collaborative forums for the pursuit of energy research, as well as for the development and accelerated commercialization of new manufacturing technologies.

Nevertheless, the report states stagnant government funding for energy RD&D over the last five years represents a major failure in U.S. energy policy. Public investment in energy RD&D remains less than one-half of one-percent of the annual nationwide energy bill. The scale of energy RD&D is still just one third of what AEIC recommends for the United States to compete effectively in global markets, diversify away from foreign oil, and mitigate environmental harms from energy production. Private energy innovation investments, which often build on federally-funded science and RD&D, are flat or declining as well.

To review the entire report, please visit: http://ppec.asme.org/key-issues/energy/


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