Horse-trading, rumors persist with 5-day reprieve on tap

Source: Geof Koss, Hannah Hess and Manuel Quinones E&E reporters • Posted: Thursday, December 10, 2015

Both chambers of Congress are expected to pass a continuing resolution tomorrow to ward off a government shutdown as negotiations over an omnibus spending measure and tax extenders package continue.

The House Rules Committee will meet this afternoon to set the terms of debate for the five-day CR, which extends the current stopgap funding measure through Dec. 16. The House will not be in session this weekend.

Senate Majority Whip John Cornyn (R-Texas) told reporters yesterday that the House would go first on whatever year-end package materializes.

“The Senate’s waiting on the House so we’ll know something when the House posts some legislation and see if they can pass it, and then we’ll take it up over here,” Cornyn said.

While the omnibus and tax extender bills are expected to be joined for expediency’s sake, Rep. Tom Cole (R-Okla.), a senior appropriator, said the two are being negotiated separately.

“But I do think there’s some sense that if they can reach the extender agreement, it can be attached and can help the omnibus,” he told reporters. “I think an extender deal would be a big help.”

Tax writers are hoping to assemble a broader tax package that makes some tax cuts permanent, but the fallback plan is a two-year extenders package unveiled by House Ways and Means Chairman Kevin Brady (R-Texas) this week. “It’s still being discussed,” Cornyn said of the bigger deal.

A broader tax deal could bode well for supporters of lifting the crude export ban, given that Democrats have made clear they want long-term extensions of the renewable production and investment tax credits for wind and solar in exchange for repealing the export prohibition.

“I remain guardedly optimistic that we’re going to lift the antiquated ban, but that again would be part of the whole package,” Cornyn said.

Senate Minority Leader Harry Reid (D-Nev.) yesterday acknowledged discussions on lifting the export ban continue in the context of extenders.

“We’re in a lot of conversations,” Reid told reporters, declining to comment further.

Sen. Tom Carper (D-Del.) yesterday floated the notion of tacking fees on exports to assist small refineries that could be harmed by such shipments, although Senate sources later said the proposal is likely to propose tax credits to help such facilities recoup any losses that result from exports (Greenwire, Dec. 9).

In a statement to E&E Daily provided by his office, Carper reiterated “serious concerns” over the economic and security implications of lifting the ban.

“If there is an agreement to lift the ban, I believe we should do what we can to ensure it protects our refineries, keeps fuel costs low, and makes long-term investments in clean energy and conservation,” he said.

Sen. Dean Heller (R-Nev.) said yesterday a broader tax package would likely open the door to a change for the qualification terms of the investment tax credit that would enable facilities to qualify for the incentive after breaking ground — a tweak desperately sought by the solar industry and its congressional allies.

“If it’s a two-year deal, it’s going to be difficult to get it in,” he told E&E Daily. “If we have a bigger deal, it will be part of it.”

Heller acknowledged the change “may be a variable” with the exports horse-trading but noted that he’s not privy to the high-level talks.

The Bipartisan Policy Center weighed in with congressional leaders this week urging them to repeal the export ban, which it called a “a form of resource nationalism that undermines our nation’s fundamental commitment to efficient markets, affecting our ability to promote free and fair trade.”

The letter stops short of explicitly calling for a deal to boost renewables as Democrats have sought but suggested that more investment in clean energy would be welcome.

“The only effective strategy to reduce petroleum dependence is to reduce demand by increasing efficiency and developing alternative options,” BPC President Jason Grumet wrote. “The United States must capitalize on the economic strength provided by increased energy production to double down on clean energy research and development. However, the way forward will not be illuminated by perpetuating ineffective requirements from the past.”

Riders linger

Policy riders continue to be an issue in the omnibus discussions, although Cole suggested an agreement will eventually be struck.

Democrats “start on a position they don’t want any,” he told reporters. “We start on a position that we want them all. Someplace in the middle we’ll meet.”

Notably, he suggested that riders that enjoy support from members of both parties may be more viable.

“I would look at riders that had significant bipartisan support,” he said. “There are a lot of them.”

Another top appropriator — Energy and Water Development Subcommittee Chairman Mike Simpson (R-Idaho) — said he places a higher priority on a rider targeting Bureau of Land Management land-use plans for the sage grouse rather than the Waters of the U.S. rule — a top priority for many Republicans and some Democrats.

“I’d drop the WOTUS and put in sage grouse,” Simpson said, noting injunctions at the district court level have put a stay on the water rule.

“If they have sage grouse in there, I guarantee there’s 60 Republicans from Western states that would fight their rear ends off to make sure this bill passes,” Simpson said. “If it’s not, maybe they’re not too interested. I don’t know.”

Western lawmakers also hope the omnibus will overhaul how the nation budgets for wildfires (E&ENews PM, Dec. 4, 2015). Sen. Ron Wyden (D-Ore.) is “working very hard” to advance the issue on the other side of the Capitol, Simpson said.

“If you’re not from wildfire states — Western states — they kind of look at wildfires as different than natural disasters,” Simpson said.

On the oil export ban, Simpson said that Democrats are rumored to want increased funding for U.S. EPA or the Land and Water Conservation Fund. He was noncommittal about trading LWCF for exports.

“There’s probably 300 members of Congress that would vote for reauthorization of the LWCF. But does it have to be done this year? No, not really,” Simpson said, though he is among those pushing for full reauthorization.