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Energy in the House-passed Budget

Representative Tom Price, chairman of the House Budget Committee in the 114th Congress, introduced the House Republicans’ Fiscal Year 2016 Budget, “A Balanced Budget for a Stronger America,” on March 20, 2015. 

This budget encourages further exploration of oil and natural gas both onshore and offshore on private and public lands.  Washington is too often standing in the way of our nation’s energy independence with needless regulations or with subsidies that distort the market.  And this budget asks that the committees of jurisdiction, the House Energy and Commerce Committee and the House Natural Resources Committee, pursue policies that ensure private sector capital investment is not crowded out by wasteful bureaucratic interference.  At the same time, it streamlines research and development activities under the Department of Energy, which would ultimately lead to reduced costs.

Additionally, it reforms or eliminates a number of programs within the federal government that produce few useful results or perform a task that can be better handled by the private sector.  As we have seen all too often in recent years, application and commercialization of new technologies is best left to the private sector.  And, this budget rescinds all unobligated balances from the President’s stimulus green energy program.  The government cannot recover taxpayer dollars from failed projects like Solyndra, but it can protect taxpayers from being on the hook for future boondoggles. 

This budget came before the House on March 26, 2015, and was passed with my support by a vote of 228 to 199. 

Keystone XL Pipeline Decision

In 2008, TransCanada, a Canadian pipeline company, filed an application to build the Keystone XL pipeline.  According to the Department of Energy and the Energy and Commerce Committee, which have jurisdiction over this issue, the pipeline will eventually be able to move up to 830,000 barrels of oil per day.  Additionally, the pipeline is projected to create 20,000 direct jobs.  Since the Keystone XL pipeline would travel across the border between the U.S. and Canada, the State Department must issue a "Presidential Permit" in order for the project to move forward.  In the years since the application was filed, the project has undergone a comprehensive study by the State Department.  In August of 2011, the State Department completed an exhaustive review of the environmental impact of the pipeline and found that it would have limited adverse environmental impact.  Additionally, on January 9, 2015, the Nebraska Supreme Court issued a ruling that Governor Dave Heineman had the authority to approve the pipeline's path through Nebraska, clearing any legal hurdles that the pipeline faced.  However, despite overcoming any environmental and legal concerns, the Administration continued to delay approval of this common-sense, job-creating project.

Given the delay, the House of Representatives has repeatedly taken steps to bypass the President's stonewalling and move the Keystone XL pipeline forward.  During the first week of the 114th Congress, the House of Representatives again took action on this important issue by considering H.R. 3, the Keystone XL Pipeline Act, which would authorize the construction, connection, operation, and maintenance of the Keystone XL Pipeline.  It was passed in the House—with my support—by a bipartisan vote of 266 to 153 on January 9, 2015.  On January 29, 2015, the Senate passed S. 1, a bill approving the Keystone XL Pipeline, by a vote of 62 to 36. 

However, on February 24, 2015, President Obama vetoed S.1, the Keystone XL Pipeline Approval Act.  The President's decision to veto a bill that would have created thousands of American jobs, lessened our dependence on foreign oil, improved national security, and caused minimal environmental impact is disappointing.  While I am frustrated with the President's decision to yet again place politics over sound economic policy, my colleagues and I in the House of Representatives remain committed to this project. 

A Long Term Solution for Energy Independence

I believe a national energy proposal must take a multi-pronged approach focused on increasing American-made energy, reforming outdated fuel regulations, building the infrastructure we need to transport domestic energy, and allowing alternative energy sources to compete in the market. 

Streamlining Regulations and Permitting Processes

The federal government has a clear role to play in preserving our natural resources and protecting the environment.  However, I have concerns with several regulatory initiatives coming from the Obama administration that increase the costs of energy and have a devastating effect on job creation.  Too many people are struggling to make ends meet, and increasing energy costs is not something American families can afford.  Furthermore, we have seen that Wisconsin manufacturers are facing stiff competition from overseas, and these businesses will be put at an even further disadvantage against countries that have no intention of inflicting similar regulations.

I support reforms to our regulatory and permitting processes to ensure that domestically produced energy is able to get to market—whether this means getting natural resources to energy intensive manufacturing regions or getting oil to the refineries that are best suited to process it.  In addition to creating numerous jobs, reforms like these would allow domestic manufacturers and refineries to take advantage of less costly American energy.  Over the past few years, multiple refineries that import oil from overseas have shuttered due to an inability to compete with refineries that have access to cheaper domestic oil.  Certain refineries are built to process light sweet crude oil, like those found in North Dakota, while others are built to process heavier oil, like what we import from Canada.  Streamlining regulations and permitting processes will create more competition in the market, which often leads to lower prices for the consumer.

In an effort to ease our nation’s ability to export natural gas, I cosponsored the American Job Creation and Strategic Alliances Liquefied Natural Gas (LNG) Act.  This legislation would expedite the permitting process to export U.S. natural gas to World Trade Organization (WTO) countries.  Currently, companies seeking to export natural gas must gain approval from the Department of Energy’s Office of Fossil Energy, which determines if such exports are in the public interest.  For countries that the U.S. has a free trade agreement (FTA), the approval is automatic.  For non-FTA countries, there is a regulatory process to determine if such exports are in the public interest.  This bill would treat WTO countries similar to FTA countries, making the public interest determination automatic.  

In another effort to ease our nation’s ability to export natural gas, the House considered H.R. 351, the LNG Permitting Certainty and Transparency Act, on January 28, 2015.  This legislation would place a 30-day deadline on the Department of Energy to issue a final decision on applications to export LNG, following the conclusion of the National Environmental Policy Act (NEPA) environmental review of the LNG facilities.  It would also provide for expedited judicial review by the United States Court of Appeals for the circuit in which the export facility will be located and require public disclosure of export destinations as a condition of approval of authorization to export LNG.  It was passed in the House—with my support—by a vote of 277 to 133 on January 28, 2015. 

Thanks to recent breakthroughs in technology, we are now the top natural-gas producer in the world, and we should do all we can to seize this opportunity.  The American Job Creation and Strategic Alliances LNG Act and the LNG Permitting Certainty and Transparency Act are two bills that recognize the importance of acting upon this opportunity, and take action to ensure America remains a top energy producer.

Additionally, Representative Mike Pompeo introduced H.R. 161, the Natural Gas Pipeline Permitting Reform Act, on January 6, 2015.  This legislation would expedite the federal review process for applications of natural gas pipeline certificates by directing the Federal Energy Regulatory Commission (FERC) to approve or deny an application for a pre-filed project within 12 months of receiving a complete application.  It would require that relevant agencies responsible for issuing approval do so within ninety days after FERC’s issuance of the final environmental document.  If the relevant agency does not approve or deny the request within the specified time, approval of the request will take effect.  H.R. 161 was passed in the House—with my support—by a vote of 253 to 169 on January 21, 2015. 

Fuel Requirements

Outdated gasoline blending policies have increased the price of gasoline and created uncertainty in the market.  Refiners are required to meet unrealistic mandates, some of which cannot be met because the fuels required do not exist yet, and others that pose a risk to vehicle engines or gasoline refueling infrastructure.  These mandates were put in place when the perception was that the United States would consume an ever-increasing amount of energy in future years, while simultaneously facing an energy shortage.  Both of these predictions have been proven inaccurate, making the fuel mandates very difficult to comply with.  Furthermore, areas like southeastern Wisconsin that are required to use different fuels during the winter and summer months experience price spikes when the transition between fuel types is made.

Domestic Production

America has an abundance of domestic resources – including natural gas and oil in the Outer Continental Shelf, Alaska, oil shale in the Central West, and a variety of alternative sources.  A top priority of the 114th Congress must be to unleash the potential of domestic production of American–made energy in an environmentally-conscious manner.  We can do this while simultaneously improving infrastructure and creating jobs by allowing the use of royalties paid by energy companies to repair roads and bridges.  Increasing supply at home will not only help lower fuel prices and create good paying jobs, but it will reduce our reliance on foreign oil from hostile nations such as Iran and Venezuela.  To this point, House Republicans are committed to advancing proposals to increase American–made energy.

Gasoline Tax

Increasing the gasoline tax remains a contentious issue in Congress.  The Highway Trust Fund (HTF), used to fund the federal government’s surface transportation programs, is primarily financed by the federal excise tax on gasoline and diesel sales.  However, since 2008, the financial obligations of the HTF have regularly been greater than trust fund balances.  This is a result of several factors, including improved fuel economy for vehicles, a decline in miles traveled by drivers, and the effect of inflation on the fixed gas tax.  As a result, tens of billions of dollars have been transferred from the Treasury's general fund to pay for these shortfalls.

Ultimately, we need a long-term solution for our transportation programs.  In the interim, the passage of the Highway Transportation Funding Act of the 113th Congress will ensure the solvency of the HTF through May 2015.  Although discussions continue that an increase of the gasoline tax is the only means to ensure the solvency of the HTF, I remain committed to pursuing options that prevent tax increases from hitting hardworking Americans.   

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