2012 Mid-Year Report

We wanted to provide an overview of the legislative and regulatory calendars in Washington, DC. Big-ticket bills that are being considered by Congress have energy and environmental provisions. Proposed rules are being vetted. The following is a brief look at some specific hot topics:

Key Legislation for the Remainder of 2012

• Highway Bill: Congress is operating on a temporary authorization for surface transportation programs and must either agree on an updated law or pass another temporary extension by the end of June. In April, House Republicans passed a short-term highway extension that included provisions to approve the Keystone Pipeline and halt the regulation of coal fly ash. The House and Senate are in formal negotiations trying to iron out their differences.  
• Farm Bill: The House and Senate Committees on Agriculture recently completed a series of hearings on reauthorization of the farm bill, which expires in the coming months. The Senate Committee passed a bill with strong bipartisan support and the full Senate is expected to act. The Senate legislation has an energy title that amends and reauthorizes several Department of Agriculture programs that promote the production of energy crops and fund research into biofuels and bio-based products. The House Committee is working on its own bill which is expected also to consider many of the same biomass-based energy initiatives. 
• Appropriations Bills:  Funding for federal government programs runs out in September. The House and Senate continue to disagree over funding for the programs run by the Environmental Protection Agency and the Department of Energy. 
• Extenders Legislation: Hundreds of tax provisions need to be extended. Among those, tax credits in jeopardy include the production tax credit, the cellulosic biofuel producer credit, the manufacturing tax credit and accelerated depreciation. The President has made some of these provisions a priority, but Congressional decisions on which tax breaks will be extended, for how long and at what rate are uncertain. Congress is expected to consider the extenders along with the expiring income tax cuts and other big ticket tax measures later this year. It should be an exciting fall and winter for legislation.

Hot Button Regulatory Issues to Watch:

• Hydraulic Fracturing: Multiple bills are circulating in both houses of Congress that would address how fracking is regulated at the federal level. At the executive branch level, the Bureau of Land Management recently proposed a rule to require companies to report the chemicals used when fracking on public lands. This rule is expected to be finalized by the end of the year. The EPA also recently released its draft permit-writing guidance for hydraulic fracturing practices that use diesel fuels in fracking fluid.   Hydraulic fracturing or fracking is likely to stay at the forefront of the energy debate. 
• Utilities: Utilities find themselves right in the middle of the debate over energy and environmental policies. The EPA has recently released a draft rule updating the New Source Performance Standards which seeks to regulate greenhouse gases. Utilities are also concerned about EPA initiatives to substantially reduce emissions of particulate matter and a slew of other proposed EPA rules and their impact on the reliability of our electricity grid.
• Pipelines: Pipelines and pipeline safety will continue to get attention from Congress and the federal government. The Pipeline and Hazardous Materials Safety Administration has informed stakeholders that it is considering the elimination of a clause that exempts older pipelines from new pressure requirements. In addition, pipeline integrity has become a safety and environmental concern as a result of several high-profile accidents over the past year.
• Mining: Considerable attention continues to be paid to the Obama administration's rewrite of the Stream Buffer Zone Rule, which regulates mining in proximity to streams. The Office of Surface Mining is considering changes to the regulation, and the House Committee on Natural Resources is conducting vigorous oversight of that process. The Committee has even issued subpoenas for more information from the Department of the Interior and has approved legislation intended to prohibit further action on the rule.  Meanwhile, the Mine Safety Health Administration has a hold on their proposed mine dust regulations until a GAO report is delivered in August per congressional directive.