January 15, 2015
Capitol Update

In this issue:

 

KEYSTONE XL LEGISLATION MOVES FORWARD DESPITE ADMINISTRATION VETO THREAT

Senate Energy and Natural Resources Committee Chair Lisa Murkowski (R-AK) called a business meeting of the committee on January 8th to markup S.1, legislation that would approve the Keystone XL pipeline. The bill considered by the energy committee is identical to the bill reported favorably by the committee on June 18, 2014, and may be reviewed at: http://ppec.asme.org/key-issues/energy/

At the conclusion of the hearing, the Senate Energy Committee approved the measure on a 13-9 vote, sending it to the full Senate for consideration beginning next week. On the evening of January 12th, the full Senate voted by a margin of 63 to 32 to begin floor debate on the measure, S.1. Numerous amendments to S.1 are anticipated to be introduced over next several weeks, including those to:

  • Push the federal government to use natural gas for its vehicle fleet; and,
  • Protect power plants that burn waste coal from certain U.S. EPA rules.

The U.S. House of Representatives cast its 10th vote on the Keystone XL pipeline legislation on January 8th. The bill, H.R. 3, was approved by a vote of 266 to 153, which included 28 Democrats voting in favor of the measure. No amendments were appended to the legislation.

In a related development also on January 8th, Nebraska's Supreme Court, in a split decision, cleared the way for the controversial Keystone XL Pipeline's route.

Four of the seven judges ruled that landowners who challenged the state law giving Nebraska's governor authority to approve the pipeline's route have standing to challenge the constitutionality of the law. The same judges also found that a lower court correctly ruled the state law as unconstitutional. But Nebraska's Constitution requires a supermajority of five to strike down legislation as unconstitutional. And so, despite a majority of judges finding the law was unconstitutional, the lower court's decision was vacated, clearing the way for TransCanada's Keystone XL Pipeline.

On January 7th, the Office of Management and Budget (OMB) issued a Statement of Administration Policy (SAP) on H.R. 3, the House version of the Keystone XL pipeline bill which states, in part, “The Administration strongly opposes H.R. 3... H.R. 3 seeks to circumvent longstanding and proven processes for determining whether cross-border pipelines serve the national interest by authorizing the Keystone XL pipeline project prior to the completion of the Presidential Permitting process... if presented to the President, his senior advisors would recommend that he veto this bill.”

For daily coverage on developments relating to the Keystone XL pipeline and other energy issues in Congress, visit: http://ppec.asme.org/key-issues/energy/ under “Legislation.”

 

SECRETARY MONIZ ANNOUNCES $125 MILLION OPEN SOLICITATION FOR TRANSFORMATIONAL ENERGY PROJECTS

U.S. Energy Secretary Ernest Moniz has announced that the Department of Energy's (DOE) Advanced Research Projects Agency – Energy (ARPA-E) is issuing its third open funding opportunity announcement, OPEN 2015, for up to $125 million. OPEN 2015 will support energy research and development projects from America's top innovators for disruptive new technologies in transportation and stationary applications.

ARPA-E has issued previous OPEN solicitations in 2009 and 2012. Open solicitations ensure that ARPA-E can support transformational projects outside the scope of existing ARPA-E focused programs. The projects selected under OPEN 2015 will pursue novel approaches to energy innovation across the full spectrum of energy applications.

For more information on OPEN 2015, please visit: http://bit.ly/OPEN2015

 

HATCH INTRODUCES LEGISLATION TO LET STATES REGULATE HYDRAULIC FRACKING, STOP DUPLICATIVE FEDERAL REGULATIONS

Senator Orin Hatch (R-UT) has introduced legislation to require the Interior Department to defer to individual states for regulation of hydraulic fracturing on federal land.

S. 15, the "Protecting States' Rights to Promote American Energy Independence Act," filed January 6th, is similar to a measure by Rep. Bill Flores (R-TX) that passed the House in 2013. It would require the Interior secretary to recognize state regulations on any component of hydraulic fracturing, "regardless of whether the regulations, guidance, and permitting are duplicative, more or less restrictive, have different requirements, or do not meet Federal regulations, guidance, or permit requirements."

To read S. 15, visit http://ppec.asme.org/key-issues/energy/ under “Legislation.”

 

EPA DELAYS CARBON RULES FOR POWER PLANTS

The U.S. Environmental Protection Agency (EPA) announced that it would be delaying implementation of rules aimed at curbing carbon emissions from power plants and would write a separate implementation plan for states that have threatened to refuse to submit their own. EPA will issue final rules under a combined process by “mid-summer,” said Janet McCabe, acting assistant administrator for the agency's Office of Air and Radiation.

According to an “EPA Fact Sheet: Clean Power Plan and Carbon Pollution Standards”, the following list provides key dates from EPA’s proposals and planned dates for proposing and finalizing Clean Air Act standards and actions to address carbon pollution from existing, new, modified and reconstructed power plants:

  • January 2015:
    • EPA to begin the regulatory process for proposing a federal plan to meet goals for cutting carbon pollution from existing power plants.
  • Summer 2015:  EPA to issue final rules on:
    • Clean Power Plan for Existing Power Plants in States, Indian Country and U.S. Territories.
    • Carbon Pollution Standards for New, Modified and Reconstructed Power Plants.
    • EPA plans to propose a federal plan for meeting Clean Power Plan goals for public review and comment.
  • Summer 2016:
    • Proposed due date for states to submit compliance plans to EPA – these can be complete plans or initial plans with requests for 1- or 2-year extensions.
    • EPA will be in a position to issue a final federal plan for meeting Clean Power Plan goals in areas that do not submit plans.
  •  Summer 2017:
    •  Proposed due date for compliance plans with 1-year extension.
  • Summer 2018:
    •  Proposed due date for multi-state compliance plans with 2-year  extension.
  • Summer 2020:
    • Proposed beginning of the Clean Power Plan compliance period

The complete two-page fact sheet may be reviewed at: http://ppec.asme.org/key-issues/energy/ under “Regulations and Announcements.”

 

ICFORECAST ENERGY OUTLOOK: REGULATORY AND FUEL PRODUCTION SURPRISES ADD TO UNCERTAINTY IN POWER MARKETS

ICF International, a leading provider of consulting services and technology solutions to government and commercial clients, has released its ICForecast Energy Outlook for the first quarter of 2015. This study highlights the near-, mid- and long-term future impacts of proposed U.S. federal environment regulations, including up-to-date analysis of U.S. Environmental Protection Agency's (EPA) rules and regulation activities; gas, coal and power market prices and coal production; and renewable energy development.

Among the outlook's findings are the following:

  • Regulatory Issues: In advance of the planned implementation date of EPA's Mercury and Air Toxics Standards (MATS) rule, ICF projects 62 GW of coal generating unit retirements, including already announced plans. With the U.S. Supreme Court set to hear arguments related to the rule in early 2015, it is not yet clear whether that implementation date will change. However, EPA's restart of the Cross-State Air Pollution Rule and the final Clean Power Plan will continue to put pressure on those coal units, especially with natural gas prices expected to remain low in the near term.
  • Natural Gas Market: The gas market is entering the new year with decidedly bearish price signals. Mild December weather and production growth that continues to outpace demand have kept prices low. Production from the Marcellus and Utica shale plays, concentrated in Pennsylvania and Ohio, now accounts for nearly one-quarter of all U.S. gas production. Assuming normal temperatures for the remainder of winter, ICF projects a slight seasonal rise in gas prices, followed by lower prices in 2015.
  • Coal Market: While coal stockpiles remain near 10-year lows, they have increased enough to avoid a shortage this winter—unless the winter proves colder than forecasted or rail delivery delays spike again. Over the next 10 years, coal consumption is expected to remain relatively flat. Many coal producers had hoped the export market would provide relief to the shrinking domestic demand, which has dropped nearly 200 million tons, or 20 percent, in the last four years. However, with both thermal and metallurgical coal prices at five-year lows, the export market is extremely competitive with most U.S. producers unable to compete with Colombian and South African coal into Europe.
  • Renewable Market: A small extension of the renewable electricity production tax credit was included in the December 2014 tax extenders package; however, it fell short of the two-year extension that wind advocates were hoping to secure. Renewable portfolio standards will continue to drive development opportunities in regions where wind energy is otherwise uneconomic. On the other hand, distributed solar continues to receive incremental support among ongoing evolution of that landscape.
  • Power Market: Gas units continue to dominate the build mix, while renewables pick up the slack. Wind and solar technologies will continue to dominate the renewable build mix, but low capacity factors will keep their share of total generation nearly constant through 2030, and then will slowly increase to approximately 20 percent by 2040. Coal generation will remain constant through 2020 at which point a downward trend will begin as coal loses its dominance in the generation mix. By 2030, the CO2 price will be high enough to force more coal out of the dispatch stack as gas dominates the generation mix.

 

U.S. CAN MORE THAN TRIPLE SHARE OF RENEWABLE ENERGY BY 2030, NEW IRENA REPORT SAYS

The United States can increase the use of renewable energy in its energy mix from 7.5 percent in 2010 to 27 percent by 2030, according to a new report, Renewable Energy Prospects: United States of America, prepared by the International Renewable Energy Agency (IRENA).

The report is part of IRENA’s renewable energy roadmap, REmap 2030, which provides a plan to double the share of renewable energy in the world’s energy mix by 2030 and determines the potential for the U.S. and other countries to scale up renewable energy in the energy system, including power, industry, buildings, and the transport sector.

The report also says the U.S. can increase its use of renewable energy in power generation from 14 percent to almost 50 percent by 2030, making it the world’s second largest renewable energy user after China.

With current policies in place, the share of renewable energy in the U.S. energy mix will only reach 10 percent by 2030. REmap 2030, which is described below, estimates that an annual investment of USD 86 billion between now and 2030 is required to reach the 27 percent renewables mark – an increase of USD 38 billion annually beyond the current projection. The higher renewable share will result in an annual savings of $30 to $140 billion by 2030 when accounting for factors like human health and reduced emissions.

The full report is available at: http://ppec.asme.org/key-issues/energy/ under “Issue Reports.”

 

NIST GRANTS FOR UNDERGRADUATE RESEARCH ANNOUNCED

The National Institute of Standards and Technology (NIST) is accepting applications for its annual NIST Summer Undergraduate Research Fellowship (SURF) program.

First established in 1993, the NIST SURF program provides an opportunity for undergraduate students to spend a summer working with the internationally recognized NIST research staff on projects in a wide variety of disciplines at either the main NIST laboratories in Gaithersburg, Md., or its laboratories in Boulder, Colo. Through the SURF programs, undergraduate students tackle real research projects in disciplines ranging from advanced physics and materials science to chemistry and biochemistry, engineering, electronics and computer science.

Applications are made on behalf of the students by their academic institutions. Applications must be received by February 13, 2015. Full details of the program, rules and the application process are available at grants.gov under funding opportunity 2015-NIST-SURF-01, or visit: www.grants.gov/web/grants/view-opportunity.html?oppId=270408

More information on SURF and NIST's research programs is available from the NIST Gaithersburg (http://www.nist.gov/surfgaithersburg/welcome1.cfm) and NIST Boulder (http://www.nist.gov/surfboulder/index.cfm) web sites. General information on the program is available at: http://www.nist.gov/surf/

 

The articles contained in Capitol Update are not positions of ASME or any of its sub-entities, unless specifically noted as such. This publication is designed to inform ASME members about issues of concern being debated and discussed in the halls of congress, in the states and in the federal agencies.

 

ASME Government Relations
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Website: http://www.asme.org/about-asme/advocacy-government-relations

  • Melissa Carl covers public policy-related science, technology, engineering and mathematics (STEM) education and diversity issues for ASME. She can be reached at carlm@asme.org
  • Paul Fakes covers public policy-related energy, standards and environmental issues for ASME. He can be reached at fakesp@asme.org
  • Roy Chrobocinski covers public policy-related research and development (R&D) and manufacturing issues for ASME. He can be reached at chrobocinski@asme.org