NRI Standing Committee Newsletter | May 14, 2021

5/18/2021

ncsl newsletter

Below you will find some of the latest agriculture, energy, environment and transportation policy issues we are following in Washington, D.C. If you have questions about any of the stories below,  please reach out to either myself, Kristen Hildreth 

(kristen.hildreth@ncsl.org), or my colleague Ben Husch (ben.husch@ncsl.org) and we will point you in the right direction.

Additionally, NCSL's Natural Resources and Infrastructure Committee is pleased to present its annual Spring Webinar Series. This year, the committee will host five webinars, April 29 through June 24. The schedule is as follows:

  • April 29 | Energy You Can Count On: State and Federal Efforts to Enhance Energy Resilience
  • May 20 | Agriculture Workforce: Challenges and State and Federal Responses
  • May 27 | How Can Emerging Data and Technology Help Combat Distracted Driving?
  • June 10 | State Outdoor Recreation: Climbing to New Heights
  • June 24 | Energy Security: Planning for Every Threat

REGISTER FOR EACH WEBINAR HERE!

Top Stories

President Releases FY 2022 Budget Request 

President Joe Biden released the complete details of his fiscal 2022 budget proposal, requesting $6 trillion in spending and a $1.8 trillion annual deficit. The administration requested increases across most departments and agencies, including a 6.5% boost to nondefense discretionary spending, while proposing a 1.6% increase for the defense activities.  The House and Senate will resume what is expected to be a protracted and partisan appropriations process this week. Click here to read about NCSL’s analysis of the budget. 

Infrastructure Talks Continue between White House and Senate Lawmakers

The White House issued a counteroffer to Senate Republicans infrastructure plan, with the White House lowering its initial $2.25 trillion investment to $1.7 trillion. The counteroffer also agrees to a $65 billion investment for broadband, and reduces its transportation proposal for roads, bridges, and other major projects from $159 billion to $120 billion. Senate Republicans returned to the table with $928 billion, which allocates $506 billion for roads and bridges, $98 billion for public transit systems, $46 billion for passenger and freight trail, $21 billion for safety, $22 billion for ports and waterways, $56 billion for airports, among other features with Sen. Mitch McConnell (R-Ky.) indicating that the party is “open to spending some more.”

Conversations will continue as several questions remain including the total cost, the definition of infrastructure, and how to pay for it as the White House has indicated that they are not supportive of paying for any infrastructure investments via an increase in the gas tax, or other user-based fees. White House press secretary Jen Psaki has indicated the White House would like to see a bipartisan infrastructure plan, and is not intent on using reconciliation just yet.

Administration Unveils Several Climate-Related Actions Including EO, and Additional Spending

From the White House to various executive agencies, there has been significant climate-related actions within the past month. To start, the president issued an executive order (EO) on climate-related financial risk which aims to develop a comprehensive government-wide climate-risk strategy and identify and disclose climate-related financial risks, encourages the Treasury Department to assess climate-related risk to the stability of the U.S. financial system and directs a report on recommendations to reduce climate risks to financial stability. Additionally, the order directs the federal government to publish an annual assessment of its climate-related fiscal risk exposure. The EO also reinstates the Federal Flood Risk Management Standard to improve the resilience of American communities and federal assets against the impacts of flood damage. The standard requires federal agencies to consider current and future flood risk when taxpayer dollars are used to build or rebuild in floodplains.

Following that order, the White House has directed $1 billion for states and communities to increase their preparedness for extreme weather events and other disasters through the Federal Emergency Management Agency’s (FEMA) Pre-Disaster Building Resilient Infrastructure and Communities (BRIC) program, double the amount provided in 2020. FEMA will provide $1 billion in 2021 for the BRIC program, which supports states, local communities, tribes, and territories in undertaking pre-disaster hazard mitigation projects, reducing the risks they face from disasters and natural hazards. The program seeks to shift the federal focus away from reactive disaster spending and toward investment in community resilience to increase preparedness. A portion of BRIC funding will be targeted to disadvantaged communities.

Additionally, USDA released a report as required by the Jan. 27 climate EO, about how the agency will promote climate-smart agriculture and forestry. The report indicated that nationwide goals and benchmarks for the adoption of certain climate-focused practices, including no-till farming and rotational grazing, would be paramount. While the report does not explicitly mention a carbon bank, USDA Secretary Tom Vilsack has indicated that as of the moment, only 2% of carbon offsets sold in the U.S. are generated by agriculture, while the sector “accounts for nearly 10% of the nation’s greenhouse gas emissions.” Relatedly, USDA also announced $10 million to support projects which measure the climate benefits of the Conservation Reserve Program (CRP) which pays farmers to take environmentally sensitive land out of production. The department estimates that the nearly 21 million acres enrolled in CRP prevents the emission of roughly 12 million tons of carbon dioxide. That announcement was in addition to USDA’s increase of CRP payments and shifting of the program to focus more on climate mitigation.

Agriculture

Mexico Extends USDA-Certified Organic Products Through December

Mexico has extended the deadline for U.S. organic exports to be certified under its Organic Products Law to Dec. 31, 2021. Mexico's Organic Products Law and regulations for organic production were implemented in April 2017. The regulations require all organic products sold in Mexico to be certified under the Mexican organic standards or to a standard that has been deemed equivalent under an organic equivalency arrangement.

Energy

First Major Offshore Wind Farm in Federal Waters gets Approval

Vineyard Wind, a $2.8 billion, 800-megawatt wind farm off the Massachusetts coast, was authorized by the Department of the Interior (DOI) and the Commerce Department. The project was repeatedly delayed under the previous administration, which then terminated its review of the project entirely. Its environmental review process was restarted in February. The approval comes following the recission of a legal opinion from the previous administration that set a stricter standard for the permitting of offshore projects, including wind, where they might “interfere” with fishermen and other ocean users. The approval is in line with the current administration’s plans to boost offshore wind and deploy 30 gigawatts of offshore wind power by 2030, in accordance with President Biden’s January 2020 executive order.

New Actions to Upgrade the Nation’s Power Infrastructure Announced

In support of the administration’s commitment to reach 100% clean electricity by 2035, the DOE announced the availability of $8.25 billion in loans from its Loan Programs Office (LPO) and the Western Area Power Administration for efforts to expand and improve the nation’s transmission grid. The LPO program supports innovative transmission projects and projects owned by federally recognized tribal nations, while the WAPA revolving loan program supports transmission and related infrastructure projects that facilitate the delivery of reliable, affordable, clean power in the Western United States. To accompany that, the Department of Transportation (DOT) issued new guidance providing clarification to Federal Highway Administration division offices working with state departments of transportation on certain uses of highway rights of way, which can be leveraged by state DOTs for pressing public needs relating to climate change, equitable communications access and energy reliability.

Interior Withdraws Proposal Easing Arctic Offshore Drilling Safety Rules

The DOI withdrew the 2020 proposal easing safety regulations for oil drilling off the Arctic coast following a February decision to open the proposal to 60 days of public comment. The proposal would have changed 29 of the 65 regulations in the current Arctic Exploratory Drilling Proposed Rule.

Bipartisan Senate Push for FERC Approval of Pipeline Projects Before Updates to Environmental Policies

A bipartisan group of 25 senators sent a letter to the Federal Energy Regulatory Commission (FERC) calling for the approval of pending natural gas pipeline projects using current FERC guidance, rather than waiting until the commission imposes new requirements. FERC recently initiated an effort to update its certification policy to encompass environmental justice and climate change concerns.

PJM Interconnection Could Exempt Renewable Power from FERC’s Minimum Offer Price Rule

PJM Interconnection released a proposal calling for exemptions from FERC’s minimum offer price rule (MOPR) for the three types of power production: state-subsidized generation, “self-supply” utilities and certain two-party contracts. The proposal says that state policies will be considered “in good faith,” and as such, generation benefiting from them would be exempt from MOPR. This proposal would apply to member states with renewable portfolio standards. FERC Chair Rich Glick has signaled his support for changes to the previous administration’s MOPR, calling the rule "unsustainable.”

A week following this announcement, Virginia utility Dominion Energy indicated it would not participate in PJM’s 2022-23 capacity auction because FERC’s MOPR would undermine its efforts to meet the state’s clean energy requirements. Instead, Dominion will use PJM’s “fixed resource requirement,” which allows the utility to become responsible for ensuring it alone has enough power-generating capacity to meet customer needs.

Senate Passes Resolution to Undo Methane Rule Reversal

The Senate used the Congressional Review Act (CRA) to overturn, 52-42, the previous administration’s reversal of the 2016 methane rule on new oil and gas wells. Lawmakers had an April 4 deadline to introduce the CRA resolutions using a fast-track procedure to overturn recent regulatory actions, allowing the Senate to act with a simple, filibuster-proof majority. The joint resolution to disapprove of the rule—titled “Oil and Natural Gas Sector: Emission Standards for New, Reconstructed and Modified Sources Review”—will now go to the House, where it is expected to pass sometime in June. For more details on the CRA visit NCSL’s website here.

U.S. Energy Information Administration Estimates Coal Power Generation to Increase

In its May Short-Term Energy Outlook report, the U.S. Energy Information Administration found that coal is anticipated to make up 26% of U.S. power generation this summer, up from 22% last summer. The increased use stems from higher prices for natural gas, which fell to 37% of the sector from 42% a year ago. Renewables are estimated to rise to 12% of the power mix this summer, up from 10% last year, according to the agency's projections. Additionally, the outlook anticipates about 1.5% more electricity consumption this summer as compared with 2020.

Environment

‘America the Beautiful’ Conservation Initiative Report Unveiled

The U.S. Department of Agriculture, DOI and other agencies released a report on the “30x30 initiative,” which outlines how to reach President Biden’s goal to conserve 30% of U.S. land and water by 2030.

The report identified six priority areas for the administration: creating more parks and outdoor opportunities in underserved communities; supporting tribal-led consultation and restoration priorities; expanding conservation of fish and wildlife habitat corridors; increasing access for outdoor recreation; incentivizing and rewarding voluntary conservation efforts for fishers, ranchers, farmers and forest owners; and creating jobs by investing in restoration and resilience projects and initiatives such as the Civilian Climate Corps. The administration is already taking steps to reach the goal, including the expansion of the USDA’s Conservation Reserve Program, the expansion of hunting and sport fishing opportunities, an expansion of the Flower Garden Banks National Marine Sanctuary, and funding for the Outdoor Recreation Legacy Partnership Program, which helps build parks in underserved communities. The report is in line with Executive Order 14008, which directed the agencies to collaborate and develop the recommendations with consultation from state and local elected officials, tribal leaders, members of Congress and other stakeholders.

Listening Sessions Planned on Scope of WOTUS

The EPA has committed to conducting a stakeholder outreach process as the agency works to define which streams and wetlands fall under the scope of the Clean Water Act, per Radhika Fox at a Senate Environment and Public Work Committee hearing. The outreach will begin with listening sessions this summer, followed by regional roundtables with the U.S. Army Corps of Engineers this fall. As the administration reviews the Navigable Waters Protection Rule, the previous administration’s replacement to the Waters of the United States 2015 rule, litigation is continuing across the nation.

Internal EPA Memo Encourages Increase in Inspections and Enforcement

The EPA’s acting enforcement chief sent a memo directing agents to ramp up inspections in areas that have been overburdened by pollution, while also indicating that even though staff should continue to conduct joint planning with states and other co-regulators, "[I]f there is a situation where a community's health may be impacted by noncompliance and our co-regulator is not taking timely or appropriate action, we should not hesitate to step in and take necessary action.” The action is consistent with Executive Order 14008, which calls for the advancement of environmental justice goals and aid to communities that have been “marginalized and overburdened by pollution.”

Migratory Bird Treaty Act Incidental Take Rule Revocation Proposed

The DOI proposed to revoke the previous administration’s Migratory Bird Treaty Act rule, which lifted penalties for accidentally killing birds due to industrial activity. As background, the previous administration issued a policy memo in 2017 arguing that the Migratory Bird Treaty Act of 1918 did not allow for the prosecution of companies or individuals who accidentally harm the birds during lawful activities. The memo was struck down in 2020 by the U.S. District Court for the Southern District of New York, but the previous administration moved forward with a regulation codifying the guidance in January 2021. DOI’s action to revoke the rule follows the decision last month to withdraw the 2017 memo.

Rule Phasing Down Use of Hydrofluorocarbons Proposed

EPA proposed a rule to phase down the use of hydrofluorocarbons, a large contributor to global warming. The rule aims to eliminate 85% of hydrofluorocarbons by 2036. In the omnibus appropriations bill passed in December, Congress included the American Innovation and Manufacturing Act, which requires the EPA to finalize by Sept. 23, 2021 a regulation to reduce HFCs, which are commonly used as refrigerants by 85% by 2036. 

EPA Requesting the Vacatur of Three Small Refinery Exemptions

The EPA asked the 10th U.S. Circuit Court of Appeals to vacate and remand three extensions of small refinery exemptions made under the Renewable Fuel Standard, arguing they were “outside of the scope of EPA’s statutory authority.” The motion follows a 2020 decision out of the 10th Circuit that said only small refineries that had received the exemptions continuously since 2011 qualify for new waivers. EPA argued before the Supreme Court in late April in support of the earlier 10th Circuit decision.

Court Rules that EPA Must Ban or Reduce Chemical Residue in Food

The 9th U.S. Circuit Court of Appeals ruled that the EPA must either modify or cancel its chlorpyrifos registrations for food use under the Federal Insecticide, Fungicide, and Rodenticide Act, while also determining, within 60 days, what if any amount of the chemical is safe. In 2007, environmental groups asked the agency to prohibit foods with chlorpyrifos residue because of the chemical’s health effects. In 2017, the agency denied the groups’ petition and subsequent objections. Chlorpyrifos is an organophosphate pesticide used on U.S. food crops that is associated with neurodevelopmental issues in children.

NOAA Altered Baselines for Measuring Temperatures and Precipitation

The National Oceanic and Atmospheric Administration (NOAA) released its decadal update of temperature observations, showing a warmer planet during 1991 to 2020 compared with the previous period of 1981 to 2010. NOAA uses the baseline for comparing recent or daily temperatures to a longer-term period of observation.

Transportation

CBO Finds that EV Fees Would Offset Less than 2% of Transportation Funding

The Congressional Budget Office (CBO) indicated that a $100 annual fee on electric vehicles would make up just 1.6% of the Highway Trust Fund’s estimated cumulative shortfall from fiscal years 2022 through 2026. The CBO calculated that figure by assuming that the annual fee on EVs would be equivalent to the average amount per year that a consumer pays in gasoline taxes for a light-duty vehicle, about $100. The CBO made its calculations in response to a question posed by Senate Environment and Public Works Chair Tom Carper at a committee hearing. NCSL Transportation Program Director Doug Shinkle testified at the hearing about the important issue of transportation funding and financing, with a focus on how states have addressed funding shortfalls. NCSL supports a user-fee, formula-based national transportation funding stream, and encourages continued outreach to and consultation with states to develop a shared, long-term vision for funding and financing surface transportation systems that will enhance the nation’s prosperity and quality of life for all Americans. Read what Doug had to say in NCSL’s blog

Thanks for reading! We will be back later this month to fill you in on other federal happenings.

Best,

Kristen

Additional Resources