The U.S. energy industry is rapidly changing. There are innovations in energy efficiency, renewables, natural gas extraction, smart grid technology, and distributed energy systems; new threats to our energy grid, such as cyberattacks; and new risks and altered operating scenarios because of the impacts of climate change. Despite these swiftly changing circumstances, no comprehensive energy bill has passed Congress since the 2007 Energy Independence and Security Act. Senators Lisa Murkowski (R-AK) and Maria Cantwell (D-WA), respectively Chair and Ranking Member of the Senate Energy and Natural Resources Committee, are now attempting to end that hiatus with the introduction of their bipartisan energy package bill, The Energy Modernization Act of 2015. The legislation was reported out of committee on July 30 by a vote of 18-4, with the support of 10 Republicans and eight Democrats.

Last year, Murkowski called on members of Congress to submit energy-related bills that could be incorporated into a larger energy package. Many members of Congress heeded Murkowski's call, and over the past few months the Energy and Natural Resources Committee has held hearings on over 114 energy bills. Murkowski and Cantwell’s offices have negotiated extensively and met with many stakeholders to determine which points to include in The Energy Modernization Act. The Senators’ goal was to avoid the most controversial energy topics that have blocked progress in recent years in order to facilitate the bill’s passage. Thus, the bill includes no mention of climate change or two of Murkowski’s biggest energy goals, lifting the 40-year ban on crude oil exports and opening the Alaskan National Wildlife Refuge to oil drilling. Nevertheless, the 357-page bill with its five titles (Efficiency, Infrastructure, Supply, Accountability, and Conservation and Reauthorization) has plenty to sink one's teeth into, and still includes provisions that are sure to ruffle some feathers.

Efficiency: Energy efficiency not only avoids harmful greenhouse gas emissions but also saves money, making it desirable across party lines. The bill includes efforts to make it easier for schools and nonprofits to improve energy efficiency, provides grants to expand the energy efficiency workforce, revises federal building energy efficiency performance standards, and requires federal agencies to reduce their building energy intensity by 2.5 percent per year from 2016 to 2025. This title also reauthorizes the Weatherization Assistance Program, a DOE program to assist low income communities with energy efficiency, and the State Energy Program, a DOE program to help states maximize the benefits of renewables and energy efficiency. However, the bill would repeal the requirement for federal buildings to phase out fossil fuel use by 2030.

Infrastructure: This title gives the Secretary of Energy emergency authority to protect the bulk power system from cybersecurity threats. It also requires new research programs to enhance grid security against cybersecurity attacks, expands research for advanced grid storage technology, and promotes the use of hybrid micro-grid technologies to help electrify and increase the resilience of isolated communities. This title contains two of the bill’s more controversial provisions, requiring permitting decisions on liquefied natural gas (LNG) export facilities to be made within 45 days after completion of their environmental review, and calling for a reaffirmation of the Strategic Petroleum Reserve’s importance to American energy security by ensuring that it only be used in case of emergency.

Supply: Notably, the supply title includes subtitles for coal, oil and gas, biomass, geothermal, and hydroelectric power, but does not include a single statement related to wind or solar energy. In regards to renewables, the bill increases the federal government’s renewable energy mandate from 7.5 percent to 15 percent, reinstates hydropower as a renewable energy, extends hydropower incentives to the year 2025, removes barriers to hydropower permitting, establishes a goal of developing 50 GW of geothermal power within ten years, and supports bioenergy and bioheat research programs. Regarding nonrenewable resources, the bill allows for the development of methane hydrate (significant deposits of which have been found on the ocean's floors) as an energy source, calls for better management and study of the United States’ critical minerals, requests that DOE study carbon capture and storage, and requires a report on nuclear fusion and fission technologies.

Accountability: Most significantly, this title amends the Federal Power Act to allow the energy sector, including generation, delivery, interchange, and transmission industries, to disregard environmental regulations during war or emergency. Among the other notable provisions, the title establishes the Nexus of Energy and Water Sustainability office and a Smart Energy and Water Efficiency Pilot Program to increase water conservation efforts in the energy industry; requires a Reliability Impact Assessment to be written regarding agency rules that could affect electric grid reliability; and repeals the mandate for many outdated DOE studies. Additionally this title creates the E-Prize Competition to facilitate the development of energy solutions that use efficiency and conservation to reduce energy prices in high cost regions.

Conservation and Reauthorization: Touching on the non-energy related responsibilities of their committee, Murkowski and Cantwell also included a title dedicated to conserving and protecting the United States’ natural resources. The bill establishes a National Park Service Critical Maintenance and Revitalization Conservation Fund, and permanently reauthorizes the Land and Water Conservation Fund and the Historic Preservation Fund. Both funds are dedicated to preserving the United States’ natural resources and iconic landmarks, with the funding coming from taxes on oil and gas companies developing the outer continental shelf.

Unsurprisingly, the bill has drawn great praise from some and great ire from others. The American Natural Gas Association has applauded the bill’s efforts to expedite LNG exports and the Geothermal Energy Association has commended the bill’s establishment of a 50 GW geothermal goal, but environmental organizations like Friends of the Earth have asked, “How can you modernize energy policy without making a single mention of wind or solar?” Eleven major environmental organizations wrote a letter to Murkowski and Cantwell stating that they will oppose the bill unless certain concerns are addressed.

Throughout last week, the Energy and Natural Resources Committee considered 94 different amendments to the bill, passing 34. Staying true to the bill’s bipartisan nature, amendments were uncontroversial and many were technical. Notable approvals included Senator Warren’s (D-MA) amendment to require a study of the regional impacts of LNG exports, Senator Flake’s (R-AZ) amendment to protect critical energy infrastructure information, and Senator Manchin’s (D-WV) to reform DOE’s work on clean coal technologies.

While the Bill does not directly address the warnings of 99 percent of atmospheric scientists who say detrimental anthropogenic climate change is happening, it does include a number of provisions around which there is broad agreement and which needed to be addressed, making it a decent compromise. Both sides of the aisle are getting some, but not all, of what they want, while also reaching common ground over the basic needs of the changing energy sector.

The House Energy and Commerce Committee is preparing to introduce a similar bipartisan energy bill, with its Subcommittee on Energy and Power unanimously approving draft legislation on July 22.


Author: Ori Gutin