The GOP tax bill working its way through Congress contains provisions that have huge ramifications for the energy industry, but legislators in Washington may not be done yet.
A top Republican on energy issues, Senator Lisa Murkowski, is eyeing a sweeping piece of energy legislation for 2018. With her long-sought goal of opening up the Arctic National Wildlife Refuge (ANWR) nearly a done deal, Murkowski has plans to tee up a bipartisan energy bill that could potentially break through the usual Washington logjam.
The Alaska Republican, according to Platts, is trying to pitch the energy bill as a way to spark momentum in the oft-cited but vague $1 trillion infrastructure plan supported by President Trump. In fact, the White House just said that President Trump would unveil “detailed legislative principles” for the massive infrastructure proposal in January. That would likely “serve as the building block” for the GOP bill, according to The Hill.
Moving such a monumental piece of legislation is much less likely with the GOP tax bill blowing a trillion-dollar hole in the budget deficit. But Senator Murkowski says she has the vehicle to get the bill moving, and wants to White House to look at it because it is “ready to go” and it is “already pre-vetted,” according to Platts.
What she is referring to is a bill that nearly got signed into law in 2016. Sen. Murkowski and her colleagues on the Senate Energy & Natural Resources Committee have worked on it for more than two years – in fact they have introduced the legislation for three years running. Related: Oil Price Boom Keeps Lid On Natural Gas Prices
It passed both chambers of Congress in 2016 and nearly became law, but the unexpected election of Donald Trump meant that some powerful Republicans in Congress decided to shelve the legislation in a gamble to get more out of it with a Republican president. Sen. Murkowski introduced the bill again this past summer, but it got buried as Congress focused on healthcare.
The proposal, which passed the Senate with a large majority in 2016, would streamline permitting for natural gas and hydro power projects, ease restrictions on LNG exports, modernize the electricity grid, and boost energy efficiency in buildings, according to Sen. Murkowski. It would also beef up cybersecurity, addressing a problem that has grown worse since the proposal was originally pushed two years ago.
The bill would have a lot of things that President Trump would like – it would help put steel in the ground for pipelines and transmission lines, the sort of high-profile projects that often seem to catch his attention.
But there are also elements that attract Democrats, including fully funding the Advanced Research Projects Agency-Energy “at levels that put us back on track to double funding for energy research and development,” Sen. Murkowski said in a keynote address at the GridConnext conference held by Clean Edge and the GridWise Alliance. There would also be provisions to promote energy efficiency and renewable energy. Related: Oil Investors Are Growing Impatient
"It's been a full year now since we were really aggressively talking about [the energy bill]," Murkowski said. "In fact, it was just this time last year that we were saying, 'We are this close to finally being able to seal the deal.'"
Still, it is unclear how the energy bill will fare in this climate. It seems that hitching it to a massive infrastructure package, while having the virtue of tying it to one of the President’s priorities, would make it harder to pass. One staffer on Sen. Murkowksi’s Senate Energy and Natural Resources Committee doubted the bill’s chances, saying he was "a little skeptical that we will suddenly shift as a body from passing a potentially huge increase in the debt through this tax reconciliation bill and then turn around and spend a bunch of federal funds on infrastructure. That just seems like too fast a pivot to me,” according to Platts.
Of course, in the unlikely scenario that the tax bill falls apart at the eleventh hour, that could radically change the forecast for 2018. In that scenario, Congress would be even more desperate to pass something next year, putting the infrastructure bill front and center and much more likely to pass.
Still, that seems like an unlikely outcome. Even with time short, the Republicans are holding the ball at the 1-yard line, and just need one last push to get the tax bill into the end zone. When they do, there will be little room left for an expensive energy bill in 2018.
By Nick Cunningham of Oilprice.com
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