Congressional Update: Suing OPEC; Not Build Back Better; Gasoline Prices
Last week, the U.S. Senate Judiciary Committee approved bipartisan legislation led by Senators Chuck Grassley (R-IA) and Amy Klobuchar (D-MN) that would allow the US to sue the Organization of Petroleum Exporting Countries (OPEC) for manipulating energy markets.
The legislation – referred to as “NOPEC” – has also been approved by the House Judiciary Committee.
The White House expressed caution, however, referencing unintended consequences in international energy supply chains.
Many believe the bill could subject the US to retaliatory action and could lead to further price disruptions.
The NOPEC initiative has been tried many times in the past, getting the furthest in 2007, when it passed Congress, only to be vetoed by President George Bush.
Not Build Back Better
Senate Energy and Natural Resources Committee Chairman Joe Manchin (D-WV) has continued discussions over a bipartisan energy package that was first reported last week.
Senator Manchin says he wants to try to get a bipartisan package that includes clean energy tax incentives without harming traditional forms of energy.
Other members of the Senate group include Senators Kevin Cramer (R-ND), Lisa Murkowski (R-AK), Mitt Romney (R-UT), Tom Carper (D-DE), Bill Cassidy (R-LA), and Mike Warner (D-VA).
They have reportedly discussed the following ideas:
— Clean energy tax incentives (likely including nuclear, offshore wind, and carbon capture, but likely not increased EV credits)
— Methane fees, but only for pipelines that have the technology to remove methane
— Permitting reforms
— Carbon import tax that would impose a fee on carbon-intensive goods imported from countries with weaker climate policies
Democratic Senators have emphasized that these negotiations should not be a substitute for Build Back Better (BBB) discussions.
Senator Tom Carper (D-DE) said that Democrats should try to get as much as they can on the energy side through bipartisan discussions, and then try to accomplish other goals (tax reform, drug pricing, etc.) through reconciliation.
It still remains unknown what type of reconciliation package could be supported by both Senators Manchin and Kyrsten Sinema (D-AZ). Moreover, the legislative calendar does not work in Democrats’ favor, given a multitude of priorities before the August recess (China competition legislation, government funding, and the National Defense Authorization Act).
Democratic lawmakers continue looking for ways to reduce gas prices. Though many lawmakers have acknowledged that there is virtually no chance of Congress passing a “windfall profit tax” on energy companies, Majority Leader Chuck Schumer (D-NY) said he was still focused on increasing Federal Trade Commission enforcement of anticompetitive behavior in the oil and gas industry.
Senate Republicans continued blaming the Biden Administration for high energy prices this week, though Secretary of Energy Jennifer Granholm reiterated that the Biden Administration supports increased oil and gas production and has also authorized new LNG terminals.