Congressional Update

This past week, President Biden released his annual budget. This document, while largely dismissed by Congress, is very indicative of the policies that the Administration will focus on for the next year and, with a divided Congress, where they may focus regulatory actions. The White House is requesting a $1.9 billion, or 19 percent, increase in funding for the EPA and a $6.2 billion, or 13.6 percent, increase in funding for the Department of Energy. In both cases, the Administration has emphasized programs focused on advancing “critical climate goals” and “clean energy infrastructure” while reducing “industrial emissions.” While the President’s Budget is largely a messaging document that will not have a major impact on federal spending, its release is also the first official step in the annual appropriations process, and House Budget Committee Chairman Jodey Arrington (R-TX) has said House Republicans will release their own budget in May.

While House Republicans will largely ignore the President’s Budget, Speaker McCarthy has announced his first major priority for the 118th Congress, H.R. 1, the Lower Energy Costs Act. The bill, which will be introduced by Majority Leader Steve Scalise (R-LA) will focus on two main priorities – “increasing the production and export of American energy and reducing the regulatory burdens that make it harder to build American infrastructure and grow our economy.” In a statement issued with the announcement, Speaker McCarthy noted “The Biden administration has kneecapped American energy production, and endlessly delayed critical infrastructure projects. Democrats’ misguided policies increased costs for every American and jeopardized our national security – and they’ve made the rest of the world more reliant on dirtier energy from Russia and China. To lower costs for Americans and grow our economy, we need to get the federal government out of the way. The Lower Energy Costs Act will fast-track American energy production and includes comprehensive permitting reforms that will speed construction for everything from pipelines to transmission to water infrastructure. And it ensures that the critical minerals needed for advanced technologies come from America – not China. This bill will be critical to growing our economy, lifting communities out of energy poverty, and ensuring American leadership long into the future.”

In addition, following last week’s action in the Transportation and Infrastructure Committee, the House has now voted to overturn the Biden Administration’s Waters of the United States (WOTUS) rule under the Congressional Review Act (CRA), a law that allows Congress to roll back certain regulatory action. As we noted in our previous coverage, a rulemaking that is rolled back under CRA cannot be reintroduced in a similar form. Still, while it has now passed the House, a path forward in the Senate remains less clear.

On the other side of the Capitol, Sen. Cynthia Lummis (R-WY) and nine Senate colleagues drafted a letter to the Secretary of Energy asking for clarity regarding small refinery exemptions as a follow up to a Government Accountability Office (GAO) Report titled “Renewable Fuel Standard: Actions Needed to Improve Decision-Making in the Small Refinery Exemption Program.” The GAO found that many of the Department of Energy’s metrics for determining small refinery exemption petitions were incomplete and required a significant regulatory burden for small refiners to overcome to receive the exemption. The Senators have asked why this is so burdensome and have urged Energy to clarify what steps must be taken to help small refineries receive exemptions to the Department’s renewable fuel standard.

Also, as another follow up to last week’s report, Iowa and Nebraska’s Attorneys General have warned that they may file a lawsuit against the EPA if it doesn’t take action to allow E15 sales over the summer in eight Midwest states. This follows an EPA decision proposing year-round sale of E15 in eight states, but not until 2024.

Finally, several U.S. Senators reintroduced legislation to pressure the OPEC oil production group to stop making output cuts. The so-called No Oil Producing and Exporting Cartels, or NOPEC, bill was reintroduced by senators Chuck Grassley, a Republican, and Amy Klobuchar, a Democrat, and others on the Judiciary Committee.