Energy bill dead as GOP looks for better deal under Trump

With Trump’s surprise victory, GOP lawmakers are moving away from their earlier efforts to pass the bill this year, now that they can push their agenda next year without having to compromise with Democrats.

The Energy Policy Modernization Act of 2016 has been lingering in conference committee all fall as House and Senate leaders hash out what they can and cannot live with in the sprawling bill, which looks to boost electric grid security, increase U.S. shale gas exports, relax regulations and improve the efficiency of commercial buildings and homes.

When the bill passed the Senate in April, Senate Majority Leader Mitch McConnell of Kentucky praised it, saying it “marks the first broad energy legislation to move through the Senate since the Bush administration.”

“It’s clear that this energy legislation is much-needed when it comes to bringing our aging infrastructure and policies in line with current — and future — demands.”

However, recent back-and-forth between House and Senate conferees suggest slow progress in reaching a deal before the end of the year, according to industry lobbyists tracking the bill. And McConnell has prioritized passing a clean short-term budget resolution by the end of the week, although he said last Tuesday there is “some hope” of passing the bill.

Leadership has set a get-in-and-get-out agenda, without the bells and whistles that would allow for legislation as potentially significant as a comprehensive energy bill in the last remaining weeks of the lame-duck session.

“They’re still talking, but I just don’t see the bandwidth for them to get something reasonably common-sense that would be willing to be put together and moved forward,” said Frank Maisano, a senior principal at the Bracewell law firm in Washington.

“I think what they’ve done is they’ve created an opportunity to have a conversation next year,” said Maisano, whose practice represents a number of companies tracking the bill.

Sen. Lisa Murkowski, R-Alaska, chairwoman of the Energy and Natural Resources Committee, and the top Democrat on the panel, Maria Cantwell of Washington, want the bill to get passed this year.

The two lawmakers, who were the architects of the Senate version, were hard at work over the Thanksgiving holiday, trying to hash out issues with their colleagues in the House, led by outgoing Energy and Commerce Committee Chairman Fred Upton, R-Mich., and Natural Resources Committee Chairman Rob Bishop, R-Utah.

A Nov. 25 joint statement by Murkowski and Cantwell described a process of offers and counter-offers, with potentially controversial items being added. The bill contains a number of provisions, from repealing Democratic-inspired sections of previous energy laws that the GOP had found unpalatable for fossil fuels to expediting the Energy Department’s review process for approving liquefied natural gas terminals.

The bill also has a number of energy-efficiency provisions that have met with bipartisan approval in the years leading up to the passage of the bill in both chambers.

The joint statement said the senators had received a “counter-offer” during the conference meetings from their House counterparts.

After reviewing it, they responded “with a new offer that restores a host of provisions that the House was prepared to drop,” which includes those related to LNG exports, sportsmen, the Land and Water Conservation Fund, hydropower, natural gas pipelines, manufacturing, innovation, carbon benefits of biomass and critical minerals.

“We also remain hopeful that an agreement can be reached on provisions to address California’s drought crisis, to remedy wildfire funding challenges and to improve forest management,” the statement said.

The senators said that even though neither “supports every provision in this proposal,” the work on it was done in “good faith” and in the spirit of bipartisan cooperation.

On the House side, Bishop said he is still willing to work on any outstanding issues, and his office said conversations are ongoing. But statements Bishop made earlier in the year suggest that addressing the California drought crisis in the bill, as well as the conservation fund, were non-starters for him.

Upton has been far more blunt. The House energy chief told reporters in November that with the election of Trump, all bets are off on passing the legislation. He said the negotiations were mostly the result of a Democratic president being in office who would likely veto the bill if a deal with Democrats wasn’t worked out.

Now that President Obama is leaving, the impetus to hash out a compromise is much less, Upton said.

Maisano and others tracking the energy bill said Upton, who is retiring at the end of the year, would much rather see the 21st Century Cures Act, a healthcare measure, get passed in the remaining weeks as his signature achievement.

Sen. John Thune of South Dakota, a top Republican in the Senate, told reporters before Thanksgiving that it’s “looking a little tough” for the bill. “If I was a betting man, I’d say the odds aren’t great.”

Most energy lobbyists have turned their attention instead to the short-term continuing resolution, which is a “must-pass” spending bill that must be agreed to by Dec. 9 or risk a government shutdown. The lobbyists represent a number of energy industries looking to secure tax credit extensions in the spending measure, despite a counter-push by conservative groups to keep the spending bill free from “green pork.”

The Energy Policy Modernization Act “seems like it’s not being pushed as a must-do for this year,” said former Senate Finance Committee staffer Curtis Beaulieu, who is now senior counsel at Bracewell. “I am not too optimistic that something will get finalized by the end of this year.”

Beaulieu is representing small wind turbine manufacturers, whose tax credits were left out of last December’s omnibus spending package. Last year’s spending bill secured a five-year extension for big, utility-scale wind projects, but not the smaller variety that can be attached to a building.

The industry says the credits need to be extended this year, or risk hurting a market for the small wind turbines and other clean energy products such as geothermal heat pumps and some solar technologies.

“So then does it get kicked into next year, where they look at a larger energy bill that is more slanted toward what Republicans want?” he said.

Billie Kaumaya, legislative affairs director for the National Association of Home Builders, said the most lawmakers could push out of conference this month is a small, narrow energy bill.

Republicans are looking to see if they can get a better deal on some of the more controversial issues next year, Kaumaya said.

“The House and Senate have been ping-ponging back and forth,” she said. “If they all agree to something, I can see something small moving.” But even if that occurs, it would be a struggle to get any legislation to the floor in time, Kaumaya said.

“Now it’s in the House’s court,” after the Senate sent back its counter-proposal the day after Thanksgiving, she said. “Are they going to still move forward, working on a compromise? Or, are they going to say, eh?” Kaumaya asked. She also sees Upton pushing for his healthcare bill in the last remaining weeks of the year and punting on energy.

“I think a lot of the members think they can get a better deal next year,” she said.