Sticking Points for Congressional Energy Conferees.

Thursday revealed major sticking points on Energy legislation during the opening meeting of the conference committee to reconcile the House and Senate versions of the Energy Bill.

Those include: funding for infrastructure, drought and wildfire language, and the Land and Water Conservation Fund.

Senate Energy and Natural Resources Committee Chairwoman Lisa Murkowski (R-Alaska), who co-authored the Senate bill and serves as chair of the conference committee, urged conferees to “prove the skeptics wrong,” adding that her efforts to pass a bill had been “written off by every trade journal three or four times.”

The Senate passed its bill 85-12 in April, and the House passed an amended version 241-178. The House’s more partisan version included much of the House’s own language on energy efficiency, and it added provisions on contentious issues like the California drought and wildfire management.

The drought language would loosen some requirements of the Endangered Species Act, and the wildfire provision would expedite forest management projects. The provision on drought attracted a veto threat from the White House. The Obama administration also criticized the provision on wildfire but stopped short of a veto threat.

The Senate bill avoided those controversial topics because supporters knew that it would threaten their ability to pass the first update to the country’s energy policy since 2007.

Murkowski’s co-author, committee ranking member Sen. Maria Cantwell (D-Wash.), and House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) also gave optimistic opening statements, praising some of the less controversial provisions rather than pushing on the controversial ones.

But the meeting, which allowed most of the 47 conferees to give brief statements, quickly shifted toward a few key issues where members have dug in their heels.

Rep. Frank Pallone (D-N.J.), who had previously expressed his displeasure with both the House and Senate bills, reiterated that he wants to check off three boxes in the final conference report. Pallone wants the final legislation to invest in energy infrastructure, to focus on “direct benefits for consumers,” and to include action on climate change.

Pallone didn’t go into detail on the second and third demands, but he is already dissatisfied with the lack of infrastructure funds in both the House and Senate bills.

After the meeting, Murkowski made no promises, saying conferees would work through the infrastructure issues along with other disagreements.

A few natural resources and land management issues also present challenges. House Natural Resources Committee Chairman Rob Bishop (R-Utah) continued to call for measures addressing the California drought and wildfire management. Cantwell has said that those issues are important, but they should be left out of the energy bill because they’re too contentious to handle now.

The wildfire provision has some bipartisan support on the conference committee. Rep. Peter DeFazio (D-Ore.), who is a conferee, voted for the measure as a standalone bill, and he briefly praised it in his statement on Thursday. Sen. Ron Wyden (D-Ore.) also encouraged members to include language on wildfire management, but he did not mention the House’s measure specifically. Rep. Bruce Westerman (R-Ark.), the bill’s sponsor, is also a conferee.

The Land and Water Conservation Fund is also a sticking point. The Senate bill would permanently reauthorize the fund, but Bishop has said that’s a non-starter without some changes that shift control from the federal government to states. Rep. Cynthia Lummis (R-Wyo.) emphasized her support for similar changes to the conservation fund. Wyden, meanwhile, called permanent reauthorization “a particularly valuable part of the Senate bill.”

Upton has already said he doesn’t think lawmakers will reach a deal before the election. At Thursday’s meeting, Sen. John Barrasso (R-Wy.) accused some House and Senate Democrats, without naming anyone in particular, of dragging their feet.

After the meeting, Murkowski said Barrasso is simply warning members and stakeholders that a new Congress means there will be a full reset on the bill. It would be a waste of the past year’s efforts not to pass something by December.

 

 

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14 states sue EPA over EPA’s oil and gas rules

A coalition of 14 states has sued the Environmental Protection Agency on Tuesday over its far-reaching regulations for the oil and gas sector, calling the rules a “job-killing attack” on the nation’s oil and natural gas workers.

The lawsuit asks the D.C. Circuit Court of Appeals to review the EPA’s rule regulating methane emissions from new, reconstructed and modified oil and gas wells that use fracking, saying that the agency is exceeding its statutory authority.

The states argue that the regulations impose an “unnecessary and burdensome” standard on the oil and natural gas industry, “while setting the stage for further limits on existing oil and gas operations before President Obama leaves office.”

The states argue that the regulations “would raise production and distribution costs and, in turn, force an increase in consumer utility bills” by making fuel costs higher for power plants that are increasingly dependent on low-priced natural gas. “The EPA itself predicts its regulations will cost $530 million in 2025, while other studies project the annual price tag may hit $800 million.

In addition to West Virginia, the lawsuit includes attorneys general from Alabama, Arizona, Kansas, Kentucky, Louisiana, Michigan, Montana, Ohio, Oklahoma, South Carolina and Wisconsin, along with the Kentucky Energy and Environment Cabinet and North Carolina Department of Environmental Quality.

New Jersey Legislation & Regulation Watch For 2016

New Jersey’s weakened gaming industry, workforce pressures and vulnerable environment have driven legislative developments in recent months, giving interested folks plenty of pending bills to watch in 2016.

Atlantic City, the state’s only constitutionally-allowed gaming revenue resource, has suffered  from casino bankruptcies, closures and competition, driving lawmakers to consider tax incentives that would boost the resort town, along with a proposal to geographically expand the market share of casinos.

Casino employees, some of whom have gone on strike in the past year, represent just one industry characterized by a labor pool that wants a better work-life balance. Lawmakers have heeded their calls with legislation that has drawn objections from a recession weary business sector still struggling to cope with ongoing economic uncertainty.

On the natural resources front, the New Jersey Department of Environmental Protection’s proposed changes to rules governing the state’s flood hazard areas have riled conservationists who fear the updates lessen protections and pander to developers.

Here’s a summary of critical legislation and regulation that could affect significant  New Jersey State changes in 2016:

Atlantic City Fiscal Recovery Package

Pinning their hopes on reviving Atlantic City, lawmakers are continuing to push a financial incentive package spearheaded by Senate President Stephen M. Sweeney and Sen. Jim Whalen, D-Atlantic.

Three of the bills have passed both houses of the Legislature as of the Assembly’s Dec. 17 voting session and are awaiting Gov. Chris Christie’s signature. The anchor of the proposal, A3981, calls for a payment-in-lieu-of-taxes plan to stabilize the town’s fiscal health.  A3984 would reallocate a casino tax that’s being used for redevelopment projects to help the city pay debt service on municipal bonds, and A3985 would drop a five-year obligation to use casino revenue for marketing purposes so those funds can be redirected to the city.

In November, Christie signed into law another part of the package, A3983, that would provide additional state money to the city’s struggling public schools, but implemented an  absolute veto to A3982, that would have required casinos to provide proof they are providing “suitable” health care and retirement benefits to employees.

Constitutional Amendment to Expand Gambling

Looking beyond Atlantic City, lawmakers are considering  advisiability of  casinos in the Meadowlands and the Monmouth Park racetrack.  Legislation would reverse the state’s constitutional restriction, and the topic could be left up to voters.

The Senate Budget and Appropriations Committee on Dec. 17 approved Sweeney’s SCR185, that would pose the question of non-Atlantic City gaming in a public referendum next November, while the Assembly passed a twin version of the bill on to that house’s Tourism, Gaming and the Arts Committee.

The legislation would make for a “potentially huge” expansion of the New Jersey’s gaming industry, although the passage of a constitutional amendment is difficult to predict given the expected high turnout due to the presidential election.

Supporting New Jersey Families Act

Casino employees and the state’s labor force in general also stand to get a boost from pending legislation aiming to improve work-life balance and increase paid time off. Along with legislation that would help displaced casino workers prepare to re-enter the workplace, lawmakers are also considering a family-geared legislation package that was unveiled in May by Senate Majority Leader Loretta Weinberg, D-Bergen. The Supporting New Jersey Families Act, which has yet to undergo committee review, would require employers in all industries to provide shift workers with predictable schedules and time off to attend school activities, expand state employee family leave privileges and establish a commission to do a gender pay disparity study. The bills have twin legislation in the Assembly.

The first prong of Weinberg’s package, the Schedules that Work Act, S2933, provides a private right of action for employees seeking to change their work schedules.

Paid Sick Leave

Among the most controversial legislatative actions are those advocating for employees is the proposed Paid Sick Leave Law, S785 and A2354, under which workers would get the better of five to nine sick days or more generous packages provided under local laws.

The Senate bill, also sponsored by Weinberg, got full approval in Dec. 17, while the Assembly version is poised for a second reading by the chamber. That bill counts Assembly members Pamela R. Lampitt, D-Camden, Shavonda E. Sumter, D-Passaic, Raj Mukherji, D-Hudson, Jerry Green, D-Passaic, and Benjie E. Wimberly, D-Bergen-Passaic as primary sponsors.

During a Senate committee hearing in June, the legislation was hailed by unions, think tanks and groups such as the New Jersey Working Families Alliance. Business-centered organizations, such as the New Jersey Farm Bureau and the New Jersey State Chamber of Commerce, criticized  the administrative and expense ramifications.

Given New Jersey Governor Chris Christie’s previous opposition to mandated sick leave, the future of the legislation remains uncertain, since in the aggregate, the  legislative proposals would create new administrative burdens on employers, including smaller businesses and start-ups, and increase the risk of litigation as traditional employer prerogatives are legislatively  prescribed.

Flood Hazard Area Rules

The New Jersey Department of Environmental Protection’s planned changes to flood hazard area rules, announced in June drew not only a backlash from environmentalists but twin bills proposed explicitly to overturn the changes. They are presently pending public comment.

Among the biggest changes in store is the increase in the amount of vegetation in riparian zones — where regulated water meets land — that can be disturbed for construction, and the extension of that allowed disturbance to building projects that would normally require a hardship exemption.

Sen. Raymond J. Lesniak, D-Union, served as a primary sponsor of SCR180 that received full Senate approval in October and is pending before the Assembly. Identical legislation, ACR249, was introduced in November by Assemblyman John F. McKeon, D-Morris, and Assemblywoman L. Grace Spencer, D-Essex. Both bills have been advanced by the Assembly Environment and Solid Waste Committee.

These rules affect virtually all development in all sectors across the state, and also serve as one of the state’s few points of leverage over federally authorized projects, like pipelines and utility facilitiesThese rules also dictate rebuilding and resiliency policy in and near flood prone areas. The impact would reach beyond the shore to industrial sites, many in low-lying areas along New Jersey Rivers.

Where the state goes on these issue affects not only environmental quality but also the value of properties, and the costs and likelihood of future business expansion.

House Considers Sweeping Energy Bill

Republicans on the House Energy and Commerce Committee released a long-awaited comprehensive energy bill late Monday that implicates pipelines, the electric grid and energy efficiency.

The panel’s Energy and Power subcommittee on Wednesday will mark up the 95-page bill that is designed to mirror a similar effort in the Senate.

Republicans and Democrats have thus far avoided loading the bill with partisan provisions that risk derailing the legislation- it steers clear, for example, of calling for an end to the 40-year-old ban on exporting crude oil, language that might lead many Democrats to reject the bill if it were included.

A committee aide expected broad bipartisan support for the bill when the subcommittee votes. (Credit AP).

Still, the legislation addresses a number of policy areas that have long been simmering on Capitol Hill.

The bill seeks to streamline permitting decisions for interstate natural gas pipelines, a move that proponents say is necessary to ramp up infrastructure that’s failed to keep pace with the boom in shale gas production.

On electric reliability, the bill would give broad discretion to power plants to relax environmental rules “to meet the emergency and serve the public interest” if federal regulators deem electric reliability is severely threatened.

The bill also amends a 1978 federal law by directing electric utilities to develop a plan to withstand power outages, using as smart grid technology to remotely locate and repair problems, distribute power systems and self-sustaining “microgrids,” that exist largely apart from the traditional electric grid, by linking disparate energy sources. The change also implores state regulators to consider approving rate increases so utilities can pass costs onto customers to pay for those investments.

Another provision would give the Energy secretary authority to step in to declare emergency measures when the electric grid is under cyberattack. The move has been long sought by federal regulators and lawmakers on both sides of the aisle to clear up confusion the locus of authority of the nation’s electric grid infrastructure in such situations.

The nation’s emergency energy supplies and how they’re distributed also would get a revamp, as natural disasters such as Hurricane Sandy in 2012 exposed shortcomings. The bill  calls for submitting a plan to create a “Strategic Transformer Reserve” to place backup electric infrastructure in various locations in case major electric grid assets are damaged, a concern that’s mounted following an armed attack at a San Jose electric substation in 2013.

Lastly, the bill calls for studying regional electricity systems that might inform how best to build new energy infrastructure such as natural gas pipelines and transmission lines to connect renewable power to the grid.

—By Martin J. Milita, Jr., Esq. Senior Director

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About Duane Morris Government Strategies, LLC (DMGS):

Comprised of 19 experienced professionals representing U.S. and foreign clients at the federal, state and local levels, DMGS is as an ancillary business of international law firm Duane Morris LLP, one of the 100 largest law firms with more than 700 attorneys in the U.S. as well as in the UK and Asia. The firm operates in eight offices including Newark, NJ; Trenton, NJ; Albany, NY; Harrisburg, PA; Philadelphia, PA; Pittsburgh, PA; Columbus, OH; and Washington, DC.

DMGS offers a full range of government relations and public affairs services, including lobbying, grant identification/writing/administration, development finance consulting, procurement, grassroots campaigning, public relations, and crisis planning/crisis management needs.

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NJ Lawmakers Pass Resolution Against $1B Pipeline Project

The New Jersey Senate on Monday passed a resolution in opposition to the proposed $1 billion, 178-mile Pilgrim Pipeline set to carry oil from the Bakken Shale through New Jersey and New York, urging permitting agencies to reject the project as currently proposed.

The resolution, proposed by Sens. Richard J. Codey, D-Essex, and Tom Kean Jr., R-Morris, calls on the U.S. Army Corps of Engineers, the New Jersey Highlands Water Protection and Planning Council, and other federal, state and local commissions reviewing the pipeline to reject it as currently proposed, positioning the pipeline as a threat to communities and water sources along its route.

“As proposed, the pipeline passes through densely populated, environmentally sensitive, and preserved lands, and any spill or incident involving this highly explosive fuel would have disastrous consequences to the New Jersey and New York residents, communities and the environment along that route,” Codey said in a statement.

The proposed pipeline, which will cost an estimated $900 million to $1 billion dollars to build, would run two parallel pipelines from Albany, New York, to Linden, New Jersey, according to Pilgrim Pipeline Holdings LLC’s website.

At least part of the 178-mile route would pass through the New Jersey Highlands Region, considered “an exceptionally valuable” area that is protected by the New Jersey Highlands Water Protection and Planning Act and the Highlands Conservation Act, the senators said in a press release.

The resolution will be passed on to the state assembly, according the news release. There, and in the state senate, another bill concerning the Pilgrim Pipeline is still in committee, according to the chief of staff for Assemblyman John F. McKeon, D-Essex. (Credit AP).

McKeon and assembly member Mila Jasey, D-Essex, proposed the bill in February. The bill would make companies like Pilgrim show the New Jersey Board of Public Utilities that pipeline projects are in the public interest before they could exercise eminent domain against a private property.

Current law doesn’t expose private pipeline companies to the same BPU scrutiny as public utility pipelines when they want to access property for its use, according to the lawmakers.

By: Martin J. Milita, Jr. Esq., Sr. Director.

Please feel free to contact the author or your other Duane Morris Government Strategies LLC contact to learn more about this article and what it may mean to you.

About Duane Morris Government Strategies, LLC (DMGS):

Comprised of 19 experienced professionals representing U.S. and foreign clients at the federal, state and local levels, DMGS is as an ancillary business of international law firm Duane Morris LLP, one of the 100 largest law firms with more than 700 attorneys in the U.S. as well as in the UK and Asia. The firm operates in eight offices including Newark, NJ; Trenton, NJ; Albany, NY; Harrisburg, PA; Philadelphia, PA; Pittsburgh, PA; Columbus, OH; and Washington, DC.

DMGS offers a full range of government relations and public affairs services, including lobbying, grant identification/writing/administration, development finance consulting, procurement, grassroots campaigning, public relations, and crisis planning/crisis management needs.

NJ Assembly Publicly Rejects $225M ExxonMobil Deal

The New Jersey Assembly on Thursday passed a resolution rejecting the state’s $225 million settlement with Exxon Mobile Corp., over refinery pollution.

The Assembly voted 45-16-9 to give approval to a resolution by Assemblyman John McKeon, D- Essex/Morris, denouncing Republican Gov. Chris Christie’s April proposal to resolve claims over hazardous discharges from Exxon refinery sites in Linden and Bayonne that impacted 1,500 acres of wetlands.

“About $50 million is going to go to attorney fees, but $175 million won’t even go to try to restore the ecological treasures that were destroyed,” McKeon said while testifying at a quorum meeting.

The proposed agreement, first publicly announced in March, would resolve the oil giant’s liability for alleged natural resource damages at refinery sites, with the exception of surface water claims. It also covers 16 other Exxon sites, including terminals and small airports, as well as Exxon retail gas stations in the state that had been cited in other natural resource damages claims.

The agreement is currently undergoing a 60-day public comment period.

McKeon’s resolution, AR-242, opposes the settlement and demands that the governor “obtain the maximum compensation possible for the devastating environmental damage incurred by Exxon.”

McKeon, citing decades of contamination, accuses Exxon of improperly disposing of “millions of gallons of crude oil and refined products, seven to 17 feet thick in some cases, and containing hazardous substances such as polycyclic aromatic hydrocarbons, chromium and arsenic” at Linden and Bayonne facilities since the 19th century.

The resolution was borne of hearings, consultations with environmental scientists and other experts and perusal of 56 days of trial transcripts, McKeon said.

“We used to think of what was destroyed there, the wetlands, as things that just supported biology. But we now know how important they are as a barrier against storm surges after Superstorm Sandy,” he said, calling the state’s de facto forfeit of the surface water claims “unacceptable.”

The Christie administration, according to McKeon’s resolution, hasn’t justified settling the case for approximately 3 percent of the $8.9 billion calculated by the Department of Environmental Protection as the value of the natural resource damages, and offered “no verifiable rationale” for including the 16 Exxon sites and the approximately 1,700 retail service stations unrelated to the litigation in the settlement.

The $225 million figure doesn’t cover the cleanup, and though the area can be “cleaned on some level, it can never be restored,” McKeon told the Assembly.

The resolution also blasts Christie in its historical account of the state DEP’s efforts to address more than 4,000 potential natural resource damages claims since 2001. Since Christie took office in 2010, only one such claim has been made, the resolution said.

A Christie spokesman reached on Thursday said to refer to the governor’s previous statements on the issue. The governor said in a March town hall meeting that the settlement has been misrepresented to the public and that Exxon would have to pay whatever price was necessary to “fix everything that they polluted up to state standards.”

The resolution drew opposition from Assemblywoman Holly T. Schepisi, R-Bergen, who questioned the appropriateness of lawmakers’ interventions and warned that legislators weren’t “part and parcel” to all the nuances of the settlement.

“We have never once won a case similar to this. The fact is, this could go on for another 10 years. We could potentially see zero dollars at the end of it,” Schepisi said.

“The administration was trying to defend the indefensible, which is this dirty deal,” club President Jeff Tittel said in a statement released after the vote.

The Senate passed a similar resoluion in March.

Congress to seek changes in Fracking Rules

But the Obama administration has maintained that the current rules are outdated after technological innovations that have greatly improved the drilling method’s success and expanded its use. It also maintained that 19 of the 32 states in which the rule would apply lack fracking-specific rules.

“It has been very important to the United States in terms of energy independence and also bringing down the price of oil because of increased supplies. So it has been very important, but it also is out ahead of where regulations have been, and that is why we have chosen to put these regulations in place … where fracking has gone — the pressures, the horizontal drilling — all of that is new and our regulations have not kept pace,” Jewell said.

Litigation is typical for new energy and environmental regulations. But while some rules have questionable legal authority — the section of the Clean Air Act on which the proposed Environmental Protection Agency emissions rule for existing power plants relies, for example, has little case law under it — the fracking regulation is less ambiguous.

“I would agree on that,” Kathleen Sgamma, vice president of government and public affairs with the Western Energy Alliance, told the Washington Examiner. “It is hard to challenge regulation.”

Still, Sgamma said the Interior Department’s case is far from ironclad. Aside from the potential flouting of the Administrative Procedure Act, she noted Indian tribes have found fault with how the Obama administration consulted them during the rule-making process.

The rule would apply to energy development on tribal land as well as federal land. Oil and gas resources are a significant revenue source for tribes, accounting for $1.1 billion in federal royalty disbursements in fiscal 2014, according to Interior. That’s more than double the $534 million tribes received in fiscal 2008, before the U.S. drilling boom took off.

Janice Schneider, Interior’s assistant secretary for land and minerals management, said tribes were very much involved in the process.

“We held two sets of regional meetings [in 2012], which yielded substantive discussions on topics that included the applicability of tribal law, validating water sources, inspection and enforcement, well bore integrity and water management,” Schneider said. “Additional individual consultations and larger meetings with tribal representatives have taken place since that time.”

But Republicans on the House Natural Resources Committee said some tribes have told them that wasn’t the case. Committee staff said they’re reaching out to tribes to see if they have concerns about the final rule.

“Tribes with mineral resources were very unhappy when it was first proposed — especially because they were not consulted and since then they have weighed in. The tribes were also unhappy with the substance of the rule. Probably more than anything, what upsets them is that lands held in trust for Indians were being treated under the rule as if they were publicly owned lands,” committee spokeswoman Julia Bell told the Examiner.