Congressional Update

The House was in recess, but the Supreme Court, Senate, and Administration were hard at work.

Starting with the Judicial Branch, the Supreme Court announced it would hear a case that would bring into question the almost-forty-year-old precedent known as Chevron deference, whereby courts typically defer to federal agency interpretations of otherwise-ambiguous Congressional directives. In other words, judges typically let the agencies interpret the laws themselves barring anything completely antithetical to the will of Congress. Since Chevron deference became legal precedent, we’ve seen Presidents in both parties seek to use regulations to implement policies where Congress may not. If the Supreme Court rolls back this precedent, it will mean that the Biden Administration, and any future Administration, would have its hands full trying to enforce any regulation as opponents could (and likely would) litigate indefinitely. It would be a major shift in the federal government, and it would pull some policy-making power from the White House and give it back to Congress (and to activist judges).

Speaking of regulations and permitting, Sen. Joe Manchin (D-WV), who now has a formidable opponent in West Virginia Governor Jim Justice, announced he would be open to rolling back some of the provisions he had initially supported in last year’s Inflation Reduction Act (IRA), noting he didn’t feel the White House was implementing the programs in the manner he’d intended when he handed President Biden the deciding vote on the bill last Congress. In addition to that, he has suggested that one thing that must happen for the US to remain competitive with China and other countries. He said that “in the United States, it often takes between five and ten years — sometimes longer — to get critical energy infrastructure projects approved, putting us years behind allies like Canada, Australia, and more recently the EU, who each have policies designed to complete permitting in three years or less.” His proposal would help eliminate the legal hurdles faced by large projects, including the Mountain Valley Pipeline, which would be approved to bring natural gas from the Senator’s state to Southern Virginia.

In the same vein, reports have shown that the Administration is considering pressing pause on proposed regulations on Renewable Identification Numbers (RINs) generated from renewable electricity (eRINs), given concerns there may be significant legal hurdles to be cleared before EV makers start receiving tradable tax credits for their use of renewable electricity. It remains to be seen what they will do, but a postponement would be an interesting development.

On April 12, the EPA issued a Notice of Proposed Rulemaking (NPRM) that it would revise the Greenhouse Gas Emissions (GHG) standards for new heavy vehicles built from 2028-2032. In addition to the emissions component, the NPRM includes requirements for zero-emission vehicle warranties as well as monitoring requirements for the health of batteries in plug in hybrid and battery electric vehicles. The NPRM would also revise certain EPA regulations to align with the Clean Air Act more closely. This came about after the White House urged EPA to find a way to electrify 2/3rds of new heavy vehicles. Well, on May 3, the trucking industry took advantage of several EPA webinars to slam the proposal as, at best, half-baked. Many in the industry, both from operator and producer sides, said they supported broader electrification, but stressed that any rule requiring new EVs without investing in charging infrastructure was destined to fail.

Meanwhile, Senator Bernie Sanders (I-VT) introduced a new messaging bill that’s already dead-on arrival in the House and Senate that calls for a $17 hourly minimum wage which is an increase from the $15 previous bill. Furthermore, the 400,000-member United Auto Workers union has yet to endorse President Biden due to his Administration’s aggressive electric vehicle policies. “The federal government is pouring billions into the electric vehicle transition, with no strings attached and no commitment to workers. The EV transition is at serious risk of becoming a race to the bottom,” the group wrote.

In other news, 43 petroleum groups sent a letter to Senate Commerce Committee leaders urging them to oppose Ann Carlson’s nomination to lead National Highway Traffic and Safety Administration (NHTSA), arguing that she would “reorient the agency to force drivers into electric vehicles in the name of climate change” and that she also failed to disclose “conflicts of interest with dark money climate groups” — namely, the Sher Edling law firm that has brought climate lawsuits against oil and gas companies. EMA also opposes Carlson’s nomination because she does not support cleaner greener liquid fuels which will lower carbon emissions compared to EVs that rely on mining for critical minerals that are destroying the planet. Click here for more information.

And because you cannot escape a piece of policy-related news without discussing the debt limit, we learned this week that, because of (1) lower than expected tax receipts and (2) a more efficient IRS, the X date at which the U.S. Treasury would run out of money and default on our debt could come in early June. This was originally anticipated to come later in the year. At this time, there are two sets of discussions. One is the one about getting something done to resolve the debt limit for several years (Democrats are proposing December 2024, Republicans sometime earlier in the year), and another is about the potential for a short-term deal to give Congressional Leaders a few extra weeks to get the issue sorted out. At this point, both sides on both positions have supporters and detractors, but hopefully we will learn more when the President and Congressional leadership meets next week to discuss it.