.The Texas Energy Report

14 Years Bringing You News from the Energy Capital of the Planet
 
.The Texas Energy Report

President Biden Set to Sign Sweeping Infrastructure Bill That Impacts Texas, Energy Industries

After much pleading and cajoling by President Joe Biden, Democrats and a handful of Republicans early Saturday morning passed the “bipartisan infrastructure framework” bill, the biggest and most expensive upgrade of America’s roads, railways and other transportation infrastructure in decades.

The bill does not raise the federal excise tax on gasoline or diesel fuel, as some analysts expected, but it does include $14.7 billion to help pay for the plugging of oil and gas wells. which could make a small dent in the number of wells needing plugs.

The US Bureau of Land Management will need to set up programs to plug wells on federal land.

For Texas, District 40 state Rep. Terry Canales tweeted Saturday that he estimates the state’s “share of money would be at least $26.9 billion for highways, $537 million for bridge replacement, $3.3 billion for public transit improvements, $100 million for broadband access and $408 million over five years to expand electric vehicle charging infrastructure.”

And meanwhile, Congress is still on the hook — two bills need to be passed over the next few weeks, one to keep the US government going — and prevent an economic meltdown — and another that could include a “methane emissions tax,” as some are calling plans to charge a fee on O&G methane emissions.

A handful of House Republicans helped out Democrats Friday night by providing the decisive votes to pass a Senate-approved $1.2 trillion infrastructure bill after a day and night of liberal infighting that nearly sank President Biden’s agenda.

Mr. Biden has pledged to cut in half US greenhouse gas emissions from 2005 levels by the year 2030 at the UN climate conference in Glasgow, Scotland.

The bill includes the largest US investment to date in “preparation for climate change,” including $50 billion to help communities grapple with the devastating fires, floods, storms and droughts that a number of scientists have said are likely worsened by global warming.

To help pay for the bill, the reinstatement or extension of chemical and mining cleanup fees is included, and money is expected to be raised by the sale of 87 million barrels of crude from the US Strategic Petroleum Reserve during fiscal years 2028-2031.

 

Details

About $7.5 billion is to go for the nation’s first electric-vehicle charger network along highways, plus $5 billion for zero-emission buses, including electric school buses and $2.5 billion for ferries.

About $14.6 billion is earmarked for carbon capture technology, including some research, machinery and pipelines, and although a number of environmentalists object to such technology, the Intergovernmental Panel on Climate Change has said capture is essential to achieving “net-zero” goals.

And there is an additional $6 billion to support the nuclear power industry.

Money for EV adoption was cut by about 90% from the original bill, but the bill as passed Saturday is said to includea controversial bonus tax credit for union-built electric vehicles (EVs).

And the American Gas Association said on Saturday that there are a number of aspects of the bill that it supports, including:

  • Energy Efficiency Revolving Loan Fund Capitalization Grant Program: Includes funds to increase energy efficiency by leveraging high-efficient systems which use natural gas and hydrogen.
  • Cost-Effective Codes Implementation for Efficiency and Resilience: Directs that building codes take a holistic and equitable approach measuring building energy savings rather than just measuring the energy used on site.
  • Hydrogen Research and Development: Includes research and development related to hydrogen for end-use, including commercial and residential heating, transportation, storage, the safe and efficient delivery of hydrogen using pipelines, and hydrogen hubs
  • Grants for Charging and Fueling Infrastructure: Establishes a grant program to strategically deploy publicly accessible electric vehicle charging infrastructure, hydrogen fueling infrastructure, propane fueling infrastructure, and natural gas fueling infrastructure along designated alternative fuel corridors or in locations accessible to all drivers of electric, hydrogen, propane, and natural gas vehicles.
  • Energy Cyber Sense Program: Creates a voluntary U.S. Department of Energy (DOE) program to help examine cybersecurity technologies intended for use in the energy sector.
  • Enhanced Grid Security: Directs DOE to operate an energy sector cybersecurity research, development and deployment program and an advanced program to secure energy networks against natural and man-made hazards.
  • Low Income Home Energy Assistance (LIHEAP): Allocates an additional $500 million over 5 years to the LIHEAP program.

 

“Controversies” and “Payments”

Nationally, there is $1.4 billion for PROTECT grants, a climate change initiative, and $17 billion for ports and waterways and $8 billion for water infrastructure specifically in the Western US.

There has been some controversy over fees for use of roads by EVs; the bill is reported to include $75 million for a study on how to enact income-based road usage fees.

Also in the bill are billions for clean hydrogen hubs, manufacturing and recycling programs and an electrolysis project.

And it requires states to decide ways to promote the usage of EVs.

The US Congressional Budget Office projects that the bill will add about $256 billion to the federal budget deficit over 10 years.

Some analysts say it’s likely to be closer to $400 billion because it includes some offsets, specifically proposals to reallocate unused funds appropriated in various COVID-19 emergency spending bills.

There is a “Buy American” provision that Reason calls “a handout to politically powerful unions.”

“By mandating that materials used in road, bridge, and rail projects come primarily from the United States, Congress will effectively hike prices and engage in arbitrary protectionism. Just ask the currently hobbled Washington, D.C., metro system how well those laws work.

“To justify $42 billion in subsidies for building out unnecessary fiber-optic lines, the bill cleverly changes the definition of “broadband” to make it look like fewer American homes have access to high-speed internet.

“Other provisions in the proposal virtually guarantee that those subsidies flow to publicly owned networks rather than private ones. This seems to fulfill an ideological goal—making internet access more like a public utility rather than a private service is what many advocates of broadband spending seek—rather than a practical one.” — Reason

Clean energy tax credits were cut from the bill before passage.

Investments in US manufacturing; funding research on climate change and energy were also cut.

Money for utilities was cut by $466 billion from the original bill, including $363 billion in clean energy taxes, according to The New York Times, and water infrastructure repair allocations were cut from $111 billion to $55 billion.

About $66 billion is to be spent on passenger and freight rail, $47.2 billion for resiliency purposes and $21 billion for use in reducing pollution.

Another area with a large drop in funding: reconnecting communities that have been separated by or disconnected from major highways and bridges. Funding for reconnecting these communities — typically communities of color — fell to $1 billion from $24 billion,

The funding package, which passed 228 to 206 and relied on Republican votes to get across the finish line, will ramp up government spending on roads, bridges and airports, as well as funding for public transit, water and broadband.

The infrastructure bill, which passed the Senate in August with 19 Republican votes.

The Republicans backing the bill Saturday morning were: Don Bacon of Nebraska, Brian Fitzpatrick of Pennsylvania, Anthony Gonzalez of Ohio, Adam Kinzinger of Illinois, Fred Upton of Michigan, Jeff Van Drew of New Jersey, David McKinley of West Virginia, Don Young of Alaska and Chris Smith of New Jersey, along with four New Yorkers, Rep. John Katko, Rep. Tom Reed, Rep. Nicole Malliotakis and Rep. Andrew Garbarino.

A number of Democrats held out, voting against the infrastructure bill after plans to simultaneously pass a social spending bill, the Build Back Better act fell through.

 

Two Big Problems Remain

The fate of Build Back Better is far from certain, however, and much of Mr. Biden’s plans for a greener economy hinge on the bill, which would include billions for renewables, sustainable aviation fuels, biofuels and more carbon capture tech.

Moderates say they want an analysis from the Congressional Budget Office before going forward, with a group of centrists promising to vote on the bill by Nov. 20th.

And the CBO could find the spending bill would have more than the expected budget deficit impact.

Should that happen, some Democratic moderate say they may not vote for the bill, although most of them say they want to work toward passing it.

Their concerns are that these programs will increase the deficit and that the money to be raised included in the legislation won’t be enough to cover the costs.

House Majority Leader Steny Hoyer (D-Md.), however, told reporters on Friday that he expects a vote on the social spending bill the week of November 15th and he’s “absolutely convinced” it will pass.

The bill would be a broad expansion of the “social safety net” along with ambitious programs aimed at fighting climate change problems.

At a price of $1.75 trillion, Build Back Better (a phrase borrowed from the UN) would fund the biggest social expansion since the 1960s, but Democrats have had trouble agreeing on its content.

One problem is Congress will have to smooth out it’s difference very quickly to pass the bill — lawmakers go into recess for two weeks later this month and and will recess again in the second half of December.

Assuming the CBO analysis comes out in two weeks, Congress will receive it right before leaving Washington for Thanksgiving.

Following the recess, lawmakers would have roughly 10 legislative days left before their winter break to get the bill through the House and Senate.

Passage by the House sends the legislation to the Senate, where it would need all 50 Democrats to pass.

The $1.75 trillion bill did pass a procedural hurdle early Saturday by a vote of 221 to 213, which will allow Democratic leaders to schedule a final vote quickly when the time arrives.

The social bill also reportedly contains a $1 billion subsidy to journalists, mainly local newspapers.

And if the social spending bill passes the House it still faces a daunting journey through the Senate, going through the budget reconciliation process, allowing bills to pass the Senate with a simple majority.

Democrats have a one-vote majority, but reconciliation also mandates a bill’s provisions affect the budget, as Vox points out.

“The Senate parliamentarian, who rules on what is and isn’t allowed in a reconciliation bill, will need to make a decision on what can and can’t be included in the bill after Democrats finish their internal negotiations and the CBO score is released.

“After that, again, as part of the reconciliation process, the bill will also have to go through a step known as “vote-a-rama” in which senators can offer amendments to the legislation and potentially alter it even more,” Vox says.

And if it passes the Senate, the bill would head back to the House for approval of Senate changes.

Then there’s one more big problem — the US government will default on its debts on December 3rd, if Congress doesn’t take action, and that could trigger a worldwide economic crisis as well as shut down the US government.