Energy and Natural Resources Chair Joe Manchin and ranking member John Barrasso are poised to clear a major hurdle in their quest to revamp the nation’s energy permitting system and bolster the electric grid.
The committee will vote this week on legislation the two senators have worked on for years, and both have expressed confidence the bill will have a successful markup.
Compromise on permitting and the grid has been elusive, but advocates and many lawmakers say the momentum from the Manchin-Barrasso bill is real despite election-year political headwinds.
“The Senate ENR Democrats know there needs to be ‘pipes and wires,'” said Devin Hartman, director of energy and environment policy at the free market R Street Institute. “I think Republicans are starting to warm up to transmission.”
The legislation, S. 4753, includes provisions to expand the electric grid so that it can carry more renewable energy across the country. It also has language on streamlined permitting for certain projects.
And important to Manchin and Republicans, the bill includes mandates on oil and gas leases, and liquefied natural gas export permits. That’s already angering many lawmakers on the left.
Still, Sen. Martin Heinrich (D-N.M.), who may become the top Democrat on the Energy and Natural Resources next year once Manchin retires, seems the bill’s grid language as complementing the 2022 climate law. He thinks most of the committee’s Democrats will support the package this week.
“I think it’s going to deal with some of these friction points to be able to get the full benefit of the Inflation Reduction Act,” said Heinrich. “In particular, transmission is a limiting factor for how quickly we transition the overall grid.”
The odds are against passage of contentious legislation in a divided Congress during an election year, and Barrasso has been focusing on moving up the Senate GOP leadership ladder.
At the same time, Manchin sees the issue as important to his legacy, and the bill allows both sides to hedge against the possibility their party loses in November.
Senate Finance Chair Ron Wyden (D-Ore.), a senior member of the Energy Committee, called it “an important time” to boost renewable energy — particularly because IRA tax credits “generated more private investment that we even anticipated.”
Republicans have complained about a Federal Energy Regulatory Commission rule on transmission planning and cost allocation, claiming people in red states were paying for power lines designed to help blue states. The bill includes language on economic benefits to address such concerns.
Sen. Lisa Murkowski (R-Alaska), talking about Manchin and Barrasso, said she’s excited “about what they’ve been working on and how optimistic they feel about the process.” Murkowski is already mulling amendments.
“I’d like to see more on the hydro front,” she said. “I’d like to make sure we have some recognition of some of our transmission issues which are different than everybody in the Lower 48.”
Sen. John Hoeven (R-N.D.) said about the legislation, “I think it’s something that we can work on and try to advance.” He said the bill includes provisions he championed on land and mineral ownership.
Greens divided
Even if the bill clears committee this week, it remains problematic to many member of both parties, which could hurt efforts to attach the package to another must-pass vehicle.
Sen. Angus King (I-Maine) said he spent last week thinking through the bill’s reversal of the Biden administration’s pause on natural gas export approvals. The bill would institute a 90-day deadline for the Department of Energy to make a national interest determination.
Matthew Davis, a vice president for the League of Conservation Voters, objected to the LNG provisions, oil and gas leasing requirements and language he said would limit EPA’s ability to reduce carbon pollution from power plants.
“These environmentally damaging provisions are dangerous to communities and consumers and must be rejected,” Davis said.
Earthjustice and the Natural Resources Defense Council issued similar rebukes, but the environmental community is not a monolith.
Climate hawks hyperfocused on cutting carbon emissions can diverge from old school environmentalists worried about pollution of all kinds.
The Environmental Defense Fund came out in support of the bill’s clean energy and transmission benefits while noting “serious concerns” with the oil and gas leasing components.
“We look forward to working with Members of Congress to make improvements to this bill and ultimately pass permitting and transmission reform legislation that supports clean energy development and safeguards communities from pollution,” Amanda Leland, EDF’s executive director, said.
Rep. Jared Huffman (D-Calif.), who hopes to someday take the House Natural Resources Committee gavel, said simply, “We don’t need this.”
Xan Fishman, an analyst with the Bipartisan Policy Center, said the legislation is beneficial in addressing the climate crisis. “Based on all my conversations, it is very quite clearly a net emissions reduction,” he said.
Fishman added the bill also tackles affordability and reliability. “This is why it’s so clearly bipartisan,” he said.
Rep. Sean Casten (D-Ill.) told POLITICO’s E&E News the bill “really moves the ball forward” on grid planning. He’s hoping for more language on the economics of grid approvals, as spelled out in his legislation with Rep. Mike Levin (D-Calif.). It’s one of a flurry of Democratic permitting and grid plans.
“We still have these problems in the transmission system that the people who have the authority to approve a transmission have an economic disincentive not to do so,” Casten said. “Because I fear that even if the bill is perfect, you’re still dependent on an enforcement mechanism trying to get people to act against their economic interests.”
Chevron concerns
The Supreme Courts ruling scrapping the Chevron doctrine, which gave agencies deference in interpreting ambiguous laws, is weighing on the minds of lawmakers and advocates as Congress considers permitting legislation.
“You kill two birds with one stone if you properly address permitting reform now and do it in a little bit more careful way,” said Sen. John Hickenlooper (D-Colo.). “Recognizing that there is gonna be the possibility of legal challenges, so we have to create something more durable.”
Barrasso said about the issue in recent week, “No. 1 is I support the Supreme Court. I think they’ve got it right. But clearly now, you’re going to make sure that legislation is written in a way that there is no ambiguity.”
Republican FERC Commissioner Mark Christie expressed his concern about the grid order in the Supreme Court ruling’s wake. He said it was built on a “dubious legal foundation” that became more vulnerable afterChevron disappeared.
FERC Chair Willie Phillips said in response that the agency’s authority to regulate regional transmission planning and cost allocation has “long been recognized” by both Congress and the courts.
Ari Peskoe, director of the Harvard Electricity Law Initiative, said FERC — like other agencies — has shied away from relying on the Chevron doctrine as the Supreme Court became more conservative and justices signaled their intention to revisit Chevron.
Even so, Peskoe said that legal challenges could become an issue if the case ends up in less-friendly circuit courts, which will be determined by an upcoming judicial lottery.
Despite all the political and technical difficulties, many lawmakers see a path for the Manchin-Barrasso bill. Rep. Garrett Graves (R-La.), who secured National Environmental Policy Act changes in last year’s debt ceiling bill, expressed tepid optimism a bipartisan package could get across the finish line in the lame duck. Lawmakers in both the House and Senate are looking for more NEPA changes.
“Maybe we can get some things done,” he said. “Right now, we’re scheduled to at least be here. You can only name so many post offices.”
Reporter Corbin Hiar contributed.
