provided by the American Public Gas Association (APGA)
Congress is scheduled to return to session the second week of September after the August recess and at the top of the list for both chambers are the Iran Nuclear Deal, Planned Parenthood, government funding, and the debt ceiling. These issues seem poised to dominate headlines if not the floor time of both houses. Despite these high profile issues, which are magnified by the presidential campaign, there are a number of energy issues that may be considered including comprehensive energy legislation, pipeline safety, the highway bill, and various energy issues on the regulatory front.
Foremost among them, are the comprehensive energy bills in the Senate and the House, which both remain bipartisan. The Senate bill was passed out of committee, while the House bill is still under committee consideration. Both House and Senate Republicans would like to include prohibitions on President Obama’s Clean Power Plan and approve the Keystone XL pipeline—a non-starter for the President and Democrats. Less high profile issues, but controversial ones such as allowing the export of crude oil and blocking the Water of the United States (WOTUS) rule, are also on Republicans’ wish list. These are unlikely to be approved by Democrats in Congress or the President, though.
In terms of natural gas issues, both bills contain provisions of interest. The House energy bill contains language that would require the Department of Energy (DOE) to consider separate product classes based on BTU input and would prevent DOE from promulgating a final regulation before July 1, 2016. However, the approved language does not include the major issues APGA has been advocating for including repeal of section 433 or the building energy codes language from H.R.1273. These provisions were included in previous versions of the legislation and were supported by numerous organizations.
Meanwhile, the Senate Committee on Energy and Natural Resources approved their comprehensive energy bill on July 30. The bill contains provisions that would delay the final rule to eliminate non-condensing furnaces. The language would suspend the DOE proposed rule, require a study on a nationwide condensing standard, and then require a negotiated rulemaking.
Another key provision is one that would repeal the ban on fossil fuel-generated energy use in federal buildings and replace it with stakeholder-negotiated energy efficiency measures for those buildings. A third provision in the bill includes language to further identify, explore, assess, and develop methane hydrates as a commercially viable source of energy.
The fourth provision of note is Senator Alexander’s (R-Tenn.) Vehicle Innovation Technologies amendment language included during the mark-up debate. This language will direct more funding for the research and commercialization of new vehicle technologies. The natural gas vehicle market is specifically mentioned in the language.
In addition to the Murkowski-Cantwell energy bill, the Portman-Shaheen energy bill was voted out of committee. The Portman-Shaheen energy bill is considered uncontroversial and has also been incorporated into the Murkowski-Cantwell energy bill. However, because the Murkowski-Cantwell energy bill is considerably larger and includes a wide range of energy titles, Chairman Murkowski agreed to let the Portman-Shaheen energy bill be considered concurrently by the full Senate. This is important because the repeal of section 433 is written into both bills. If the larger Murkowski-Cantwell energy bill gets stalled in debate, there will still be a second legislative opportunity with the Portman-Shaheen energy bill.
One other important item for APGA members is pipeline safety, which is scheduled to expire in September. Pipeline Safety has largely been on the back burner in both chambers which have been preoccupied with other matters despite the looming deadline. However, the House Energy and Power Subcommittee did hold a hearing on pipeline safety in July. During the hearing, the Interstate Natural Gas Association of America (INGAA) which represents interstate pipelines testified in writing and orally during the hearing that user fees are not being paid by pipeline customers and therefore Congress should change the user fee system. Most likely, INGAA envisions a system in which their fewer than 50 members no longer collect user fees and instead the thousands of LDCs collect them and send them to the federal government which would be inefficient. APGA has pushed back hard on INGAA’s assertion holding a number of meetings with House Energy and Power Subcommittee and full committee staff and sending a letter on July 21 detailing our concerns. APGA will continue to work with the relevant committees to maintain the current efficient and effective user fee system.
The Surface Transportation Reauthorization, also known as the Highway Bill, will undoubtedly receive congressional attention. The Highway Bill provides funding for roads, bridges, mass transit, and other programs. Just before the August recess, Congress passed a three-month extension of funding of these programs giving it viability through the end of October. Within this legislation, the liquefied natural gas (LNG) excise tax inequality was finally remedied. Prior to passage of this legislation, LNG was taxed on a per gallon basis. This means that it was taxed 70 percent more than diesel due to the energy content difference between the fuels. The Highway Bill provision changed how the tax was levied to be on an energy equivalent basis, thereby bringing parity in taxation between diesel and LNG. Moving forward, the Highway Bill will likely be sorted out given the high profile issues of government spending and the debt ceiling that will have Congress’ attention in late 2015.
Lastly, on August 6, APGA and several Kentucky public natural gas systems sent a letter to Chairman Rogers (R-Ky.) of the House Appropriations Committee urging opposition to what was included within the fiscal year 2016 Transportation Appropriations Bill passed by the Senate that directs the Pipeline and Hazardous Materials Safety Administration (PHMSA) to re-evaluate its pipeline safety user fee collection allocation system.
In the letter, APGA and the Kentucky public natural gas systems state that “pushing the user fee collections from few pipeline companies onto thousands of LDCs and industrial customers would be wildly inefficient and would create a bureaucratic nightmare.” The letter also communicates that if pipelines need to increase their rates because of escalating user fees, there is already a mechanism to address this potential issue as they can file under Section 4 of the Natural Gas Act at FERC to ask for a rate increase. Historically, pipeline rate increases to accommodate an increase in user fees have not been turned down by FERC.
Both the House and Senate have versions of the fiscal year 2016 Transportation Appropriations Bill and the legislation will now go to a conference committee to resolve differences between the two bills. The bill passed by the House did not contain language directing a re-evaluation of the pipeline safety user fee allocation and collection.
For questions on this article, please contact Dave Schryver of APGA staff by phone at 202-464-2742 or by email at email@example.com.