What to Watch in the 114th Congress: Murkowski to Push Energy Revamp

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By Erik Wasson

Jan. 2 — Sen. Lisa Murkowski (R-Alaska) has spent years developing detailed plans to revamp U.S. energy policy with the goal of making the U.S. independent from oil-cartel imports by 2020.

The Alaskan is well-situated in the 114th Congress to push those plans as she takes the helm of both the Energy and Natural Resources Committee and the Appropriations Interior-Environment Subcommittee.

There’s a hitch: Oil prices hit a five-year low in late December, and the commodity is trading at rock-bottom levels not seen in years.

Cheap energy could sap public pressure on the White House to accept Murkowski’s vision of eased regulation, expanded drilling and fossil-fuel research. The effect of low prices also stands to complicate Murkowski’s push to end the 40-year ban on exports of U.S. crude.

Murkowski’s February 2014 research paper “Energy 20/20” lays out a blueprint for what to watch in her Energy Committee.

Keystone Vote to Come

Murkowski has long advocated completion of the stalled Keystone XL pipeline, and on this issue she has the ear of Republican leadership.

Sen. Mitch McConnell (R-Ky.), the Senate’s new majority leader, has said a bill approving Keystone would be the first order of business.

The Senate in November failed to pass a Keystone bill sponsored by Sen. John Hoeven (R-N.D.) by a 59-41 vote. The effort is expected to have enough support to clear Congress in January, setting up a confrontation with President Barack Obama, whose comments on Keystone so far have signaled a potential veto.

Republican gains in the midterm elections didn't necessarily add up to majorities in Congress large enough to overcome a presidential veto.

Just having a vote on Keystone, though, should help Murkowski quickly move a version of Sens. Rob Portman (R-Ohio) and Jeanne Shaheen’s (R-N.H.) energy efficiency bill. Republicans have blocked the bill, which would expand voluntary energy efficiency ratings while changing requirements for water heaters, in part because of efforts to attach a Keystone amendment to the bill.

“I am certainly committed to working with my colleagues in the new year to advance what again is just simple common sense,” Murkowski said on the floor Dec. 16.

Export Ban 

Murkowski shows no sign of giving up her fight to end the ban on crude exports, even though her party is divided over the issue.

The senator argues the ban pushes prices below world market levels, hurting U.S. producers exploring new areas, such as North Dakota’s Bakken shale field, and discourages innovation. Producers, struggling in the new price environment, could intensify their lobbying push against the ban to give even a modest boost to their declining margins. Independent refiners historically have fought to maintain the ban and appear no less motivated in their effort in the face of falling gasoline and diesel prices.

According to Bloomberg Intelligence, a compromise could be found in legislation expanding current exceptions case by case, expanding a national-interest waiver in the existing ban or changing the definition of crude oil to allow exports of lighter varietals.

Electric Grid

The reliability of the electric grid remains a top concern for Murkowski, according to a staff member.

Her 2014 white paper “Powering the Future” argues for greater focus from the Federal Energy Regulatory Commission and Environmental Protection Agency on reliability and a paring back of some EPA regulations that she views as creating barriers for maintaining and expanding the grid.

“It may also be time to consider regulatory and even legislative reforms that will ensure a more robust role for electric reliability professionals in evaluating environmental rules,” Murkowski’s paper said.

Long-Term Vision

As energy prices were soaring, Murkowski laid out dozens of actions she wanted Congress and the administration to take to expand the exploitation of U.S. fossil fuels resources while also encouraging renewable energy development such as solar and wind power.

Her plans remain largely the same, according to a Senate Republican aide who spoke on condition of anonymity because Murkowski hasn’t issued a formal priority list in her new capacity.

Major objectives in her February 2014 “Energy 20/20” document include opening up 2,000 acres in Arctic National Wildlife Refuge, easing exploration on tribal lands and transferring the U.S. Forest Service from the Agriculture to the Interior departments.

Murkowski wants expedited federal permitting and review decisions for drilling, requiring the executive branch to produce a plan for exploiting the Outer Continental Shelf, setting up a consolidated offshore regulator and an updated liability regime to compensate victims of a spill.

For clean energy, Murkowski has advocated changing the renewable fuel standard, so it provides a “more equitable treatment” of feedstocks. She argues alternative energy needs to be freed from an artificial boom-and-bust cycle of government funding by phasing out government subsidies by 2020. To compensate, the government would ease the process of leasing land for use in energy projects and easy access to financing.

In the meantime, the senator wants to terminate the Advanced Technology Vehicles Manufacturing incentive program and consolidate 39 programs involved in battery technology and research, while allowing wider range of technology to qualify for Title 17 loan guarantees from the Energy Department.

Look for the committee also to spend time examining how to increase cybersecurity to protect the energy grid, how to integrate water and energy policies given the interdependence of the two and how to address the dependence of the U.S. on rare-earth minerals from China.

To contact the reporter on this story: Erik Wasson in Washington at ewasson@bloomberg.net

To contact the editor responsible for this story: Katherine Rizzo at krizzo5@bloomberg.net

 ©2015 Bloomberg L.P. All rights reserved. Used with permission.

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