Natural Resources, Energy and Environment Committee Newsletter | June 21, 2024

In our NREE Committee newsletter, you will find some of the latest agriculture, energy and environment policy issues NCSL is following in Washington, D.C. If you have questions about any of the stories below, please contact NCSL using the email icon on the left.

Top NREE Stories

FERC Issues Energy Transmission Planning and Siting Reforms

The Federal Energy Regulatory Commission has released two final rules to update electric transmission permitting and to build capacity for rising energy demand and the transition to clean energy. The first final rule, Order 1920, mandates consideration of future needs, technologies and benefits when undertaking planning and construction of transmission infrastructure. By looking 20 years into the future, the rule aims to ensure ample transmission capacity exists to meet rising demand. The rule also dictates how the cost for new transmission infrastructure can be allocated across customers. The second rule, Order 1977, updates permit authorities to allow the FERC to issue permits for the construction of multistate long-distance transmission infrastructure projects if states have not acted within a year of a developer's application. FERC commissioners passed Order 1920 by a 2-1 vote and passed Order 1977 unanimously. Legal challenges are expected.

National Environmental Policy Act 2.0

The Environmental Protection Agency (EPA) has issued the Bipartisan Permitting Reform Implementation Final Rule, the second phase of updates to the National Environmental Policy Act (NEPA). This rule builds upon the previous Biden administration revisions to the NEPA issued in 2022. Changes outlined in the final rule are intended to help improve permitting processes and approval times, while also protecting near-by communities from pollution. These NEPA revisions are intended to help achieve certain administration goals including energy transition efforts, the development of a domestic critical mineral supply chain, construction of energy manufacturing facilities and more.

Specifically, the revisions to the NEPA include mandating upper limits on the page length of final reports and the duration of federal environmental reviews. Additionally, the rule empowers a lead agency to handle evaluations, enables the establishment of broader categorical exclusions, calls for the assessment of climate change and environmental justice in reviews, improves community involvement in the review process, and removes the requirement for any environmental impact statement, the most stringent review level, for those projects with long lasting environmental benefits, to name a few. The final rule will go into effect for all projects beginning the environmental review process on or after July 1, 2024. Challenges are expected. Legal challenges were previously filed against the rule's proposed version. Congressional members, including Sen. Joe Manchin (I-W.Va.) and Senator John Barrasso (R-Wyo.), have indicated a desire to address permitting reform this year with draft legislation expected in the next few months. Industry spokespeople have also issued criticism of the rule.

GREET: Updating Sustainable Aviation Fuel Modeling

The Treasury Department has released a modified version of the Greenhouse Gases, Regulated Emissions and Energy Use in Transportation (GREET) model for use in the distribution of the Sustainable Aviation Fuel (SAF) tax credit. Specifically, this model is intended to help producers and manufacturers identify how feedstocks can be processed into SAF with reduced indirect emissions. The modeling is intended to incentivize climate smart agricultural practices by mandating at least three climate-smart conservation practices, like no-till and cover crop practices, and the use of enhanced efficiency fertilizer. The model also accommodates emission reduction strategies like carbon capture and storage. SAF produced under this model that is sold or used during the 2023 and 2024 calendar years will be eligible for a tax credit of up to $1.25 per gallon if its total greenhouse gas emissions are at least half of a traditional jet fuel's emissions and up to $1.75 if its emissions are less than half. This model is a part of the broader administration goal to eliminate all aviation sector carbon dioxide emissions by 2050. Critics note that only certain producers and manufacturers will be able to benefit immediately and in the short term due to the model's requirements. Additionally, critics cite the lack of flexibility needed to allow corn-based ethanol to qualify. A new GREET model for 2025 is expected.

SAF is a growing industry. Just prior to the Treasury Department's announcement, a Sustainable Aviation Fuel Coalition was announced. The coalition will bring together over 40 companies and organizations, including biofuel producers and member of the airline industry, to advocate on SAF policies.

Protecting Tribal Water Quality

The Environmental Protection Agency (EPA) has released its final rule Water Quality Standards Regulatory Revisions to Protect Tribal Reserved Rights. This regulation mandates that states must consider and protect tribal rights when establishing water quality standards under the Clean Water Act and when designating a water body's use. The state criteria must be stringent enough to ensure equitable water quality protections with the general public. The rule is intended to protect the health and well-being of tribes and their natural and cultural resources. Under the rule, the EPA will help states and tribes identify the scope of tribal rights and assist with tribal consultation processes. This rule does not impact tribal water quantity rights.

Short but Sweet, More News Below!

Agriculture

• The U.S. Department of Agriculture has released a rule revising school meal nutrition standards and encourages the inclusion of more indigenous foods. As a part of this effort the USDA is releasing $2.3 million to increase access to indigenous foods. Learn More. 

• In a recent final rule, for the first time the USDA has classified salmonella as an adulterant in raw, breaded or stuffed chicken products, which will allow USDA officials to stop these products with low levels of detected contamination from being sent to grocery stores or initiate recalls of contaminated products. Critics have cited potential food cost increases and litigation is expected. Read More. 

• $22 million is being made available through the USDA’s 2501 Program to assist and support farming operations of underserved and veteran farmers. Read More. 

Energy

• A Federal-State Modern Grid Deployment Initiative has been stood up by the Biden administration in partnership with 21 states. The initiative is tasked with assisting the modernization of the grid by evaluating grid adaption, cost and challenges and opportunities. Read More. 

• Funding to help build carbon dioxide transportation infrastructure has been made available by the Department of Energy under the Carbon Dioxide Transportation Infrastructure Finance and Innovation future growth grants. To receive the nearly half a billion dollars in funding, the projects, including pipelines, rail, trucks, barges and certain ships, would need to connect two or more CO2 emitting sites to sequestration sites. Read More. 

• The USDA has announced a $671 million dollar investment in projects to help lower rural electric bills and improve rural access to clean drinking water across 23 states. Learn More. 

Environment

• The Environmental Protection Agency has released a proposed rule that, if finalized, could lead to the restructuring of water systems that repeatedly fail to meet federal regulations and standards. The rule would require state regulators to devise plans, overseen by the EPA, to address repeated violator water systems, concerns have been raised that these plans may lead to increased consolidation in the industry. Learn More.  

• $300 million is being released by the EPA to clean up over 200 brownfield sites nationwide. Approximately half of the funding comes from the $1.5 billion allocated in the Bipartisan Infrastructure Law to address brownfields. Read More. 

• An additional $3 Billion is being released by the EPA in an effort to address lead drinking water pipes. This funding is being provided under the $15 billion laid out in the Bipartisan Infrastructure Lw to address lead in drinking water. The funding will now be distributed under a new formula to try to address communities with the biggest lead problems and account for specific lead needs. Learn More.