NEPA changes leave disaster costs to taxpayers Presented by National Clean Energy Week

With help from Anthony Adragna and Annie Snider

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Quick Fix


— The Trump administration's anticipated changes to the landmark National Environmental Policy Act could upend financial considerations related to climate change and push the burden onto taxpayers.

— Iran retaliated with a missile strike on U.S. troops in Iraq, sending oil prices up modestly.

— The House Rules Committee teed up amendments for votes this week on a sweeping measure to regulate PFAS chemicals.

WELCOME TO WEDNESDAY! I'm your host, Kelsey Tamborrino. Check out the POLITICO Energy podcast — all the energy and environmental politics and policy news you need to start your day, in just five minutes. Listen and subscribe for free at politico.com/energy-podcast.

Duke Energy's Vicky Sullivan gets the trivia win for being the first to name Frances Folsom Cleveland as the youngest first lady. She married President Grover Cleveland at age 21 in the Blue Room of the White House. For today: Who was the first Cabinet official to leave the Trump administration? Send your tips, energy gossip and comments to [email protected].

Driving the Day

IRAN RETALIATES: Oil prices climbed 4 percent before retreating following the Iranian missile attack on U.S. troops at bases inside Iraq last night. Iran's Islamist government said the ballistic missiles were a "hard" retaliation for the Trump-ordered airstrike that killed Iranian military leader Qassem Soleimani, POLITICO's Nahal Toosi and Andrew Desiderio report. The White House put out a statement acknowledging the attack, and said President Donald Trump was briefed and monitoring the situation.

The attack raises concerns of a larger conflict in the Middle East, where U.S. citizens working for foreign oil companies have already begun exiting Iraq. Analysts have been closely watching the escalating tensions for days for whether it will disrupt oil production in the region.

NEPA CHANGES COULD PUSH BURDEN TO TAXPAYERS: The Trump administration is expected to soon announce changes to the National Environmental Policy Act that guides how federal agencies consider climate change in permitting for infrastructure projects. But those revisions to implementing the bedrock law on environmental permitting could end up sharply increasing the financial burden for taxpayers who foot the bill for major disasters, Pro's Zack Colman reports.

The White House Council on Environmental Quality is expected to announce the move on Thursday and the changes are likely to soften environmental benchmarks for projects like pipelines and export terminals. The NEPA revisions are expected to end the consideration of "cumulative" environmental effects, which include climate change.

That could also undermine rigorous reviews into whether infrastructure projects can withstand the floods, intense storms and other weather events that are becoming more severe because of climate change. "While developers argue reducing their permitting burden will lower costs, taxpayers face risks because insurers are likely to either hike their premiums to cover projects that may not be viewed as robust enough to withstand stronger weather events, or they may decline to cover them at all. And if damage does result from ill-prepared infrastructure, those costs may also fall to taxpayers," Zack writes this morning.

"At the end of the day this all falls back to the taxpayer," said Alex Kaplan, executive vice president for alternative risk at insurance brokerage firm AmWINS Group. "The bow will break. This is an unsustainable path we're on."

On the Hill

CRAMER A 'NO' ON DANLY: North Dakota Sen. Kevin Cramer intends to vote against James Danly, Trump's pick for an open Republican seat at FERC, over concerns that Danly won't try to save coal and nuclear plants from closure, Pro's Gavin Bade, Eric Wolff and Anthony Adragna report. "If it comes to the floor today, I'd have to be a 'no' vote," Cramer told POLITICO, "unless he can give me some other assurances."

FERC rejected a bailout proposal from former Energy Secretary Rick Perry in early 2018. And since then, Cramer, a former utility regulator, has repeatedly called for FERC to support so-called baseload power generators, but he said Danly has refused to commit to such an action, giving him only "vague" answers to questions about grid resilience and reliability.

In this April 11, 2019 file photo, Sen. Kevin Cramer (R-N.D.) speaks to reporters after final votes, at the Capitol in Washington. (AP Photo/J. Scott Applewhite, File)

It may be awhile: Though Danly has not been formally renominated, Senate committees won't likely be able to vote on executive branch nominees during the upcoming Trump impeachment trial, Anthony reports. Senate Energy Chairman Lisa Murkowski told reporters that Republican senators were advised Tuesday that committees won't be able to advance pending nominations without unanimous consent from the Senate allowing committees to meet during the trial.

MURKOWSKI SEES U.S. OIL STRENGTH: The modest bump up in oil prices since the U.S. killing of Soleimani is a sign of how domestic production has changed global market dynamics, according to Murkowski. "I do think that this is an indicator, again of the strength of the U.S. position in the global oil markets — that we haven't seen a more precipitous jump — but I don't think we can anticipate what's going to happen tomorrow," she said.

Possible look at Australia: Murkowski said she's aware of U.S. helicopters and other resources being used to help Australia combat its "astounding and frightening" wildfires and suggested she might hold a hearing at some point. "How do we as a country, as we deal with our own fire threats, how do we share with other nations in terms of being responsive? How do we share best practices with management and the like?" she said.

PFAS BILL HITS THE FLOOR: The House Rules Committee teed up 22 amendments for votes this week as the chamber considers a sweeping measure, H.R. 535 (116), to regulate toxic "forever chemicals." Among those are amendments to require Clean Water Act limits for discharges of PFAS into waterways and create a labeling programs fo PFAS-free carpets, clothing and furniture.

A play for Republicans: The committee also cleared the way for a vote on a bipartisan amendment that would tone down one of the provisions that Republicans criticized most fiercely during committee markup in November. That provision would require EPA to designate all PFAS as hazardous air pollutants under the Clean Air Act, but the amendment would limit that to just PFOA and PFOS, with the agency required to make a decision on whether to designate the rest of the class within five years. If adopted, some Democrats hope the amendment could clear the way for a number of moderate Republicans to support the measure.

But the White House made clear it has no intention of signing the measure into law. In a Statement of Administration Policy issued Tuesday, the president's advisers said they would recommend the veto the measure, arguing it short circuits the scientific and technical processes for setting regulations and would place "substantial and unwarranted costs" on state and local governments.

RENEWED PUSH ON 'TECHNOLOGY NEUTRAL' CREDIT: Rep. Tom Reed (R-N.Y.), a senior member of the Ways and Means Committee, today will reintroduce legislation creating a technology-neutral tax credit to "encourage innovative and cleaner technology to come to market." The credit would only apply to energy once sold and would automatically phase out over time. Reed says he's "eyes wide open" about the path this Congress, but has three Democratic co-sponsors already on board — Reps. Tom Suozzi, Jimmy Panetta and Josh Gottheimer. Technologies already making use of other credits, like the production tax credit, would not be allowed to use both.

He adds the measure promotes energy innovation as a critical area of common ground in how to confront climate change. "The time is right," Reed told ME. "Hopefully we can agree we need to innovate on American technology, and especially American energy technology, to make progress" on climate. Supporters of the effort include the Bipartisan Policy Center, American Public Power Association, Clearpath Action, Southern Company, Citizens for Responsible Energy Solutions, Clean Air Task Force and the Energy Storage Association. Read the one page explanation and the text of the legislation.

E&C DEMS TO UNVEIL CLIMATE FRAMEWORK: Democratic leaders on the House Energy and Commerce Committee will today unveil the legislative framework for their climate plan for an 100 percent clean economy by 2050. Watch today's livestream.

MOVEMENT ON HFCs: Sen. John Neely Kennedy said he hopes to sit down with Trump after impeachment to attempt and convince him to support legislation, S. 2754 (116), phasing out hydrofluorocarbons, potent greenhouse gases. "That's on my to do list, but now is not the right time," Kennedy said. "I want to try to make the White House understand that this is a bill that's good for business and good for the environment."

His counterpart on that bill, Sen. Tom Carper, has said he plans to meet with Environment and Public Works Chairman John Barrasso early next week in hopes of convincing him to schedule a hearing on the measure. That comes as a bipartisan group of House lawmakers introduced similar legislation, H.R. 5544, on Tuesday and set a hearing on the bill next week.

BAY BATTLE COMING? A brewing battle over the landmark Chesapeake Bay cleanup plan will be in the spotlight this morning as the Senate EPW Committee holds a hearing on runoff pollution. Last week the head of EPA's bay program office invited controversy when he said during a meeting of regional players that the goals laid out in a cleanup plan were “aspirational” rather than enforceable.

Republican Maryland Gov. Larry Hogan's environment secretary, Ben Grumbles, is due to testify before the committee, and the state's Democratic senators have signaled they’ll have some questions for him on the topic. Some environmental groups, and The Baltimore Sun's editorial board are already calling for the Old Line state to sue either EPA or its upstream neighbor, Pennsylvania — or both.

Around the Agencies

TECH AND STORING IN LAS VEGAS: Energy Secretary Dan Brouillette is in Vegas today to deliver remarks on innovation in U.S. science and technology at the CES. Brouillette is expected to discuss progress at DOE's national labs and will announce upcoming work at the department relating to energy storage, according to the Energy Department.

Movers and Shakers

— Kyle Isakower, former vice president for regulatory and economic policy at the American Petroleum Institute, joins the American Council for Capital Formation as senior vice president of energy policy. V. Bruce Thompson, former president of the American Exploration & Production Council, also joins the ACCF as resident senior fellow for energy policy.

— Christian Rodrick joined DC-based competitive intelligence firm Delve as research manager for the energy and environmental issues team. Rodrick most recently served as director of House relations at EPA.

— Jackie Toth joins ThirdWay's Climate and Energy Program. She previously was a reporter at Morning Consult and CQ Roll Call.

The Grid

— "Trump says discussed oil prices, Middle East stability with Saudi minister," via Reuters.

— "Marine labs on the water's edge are threatened by climate change," via The New York Times.

— "Two sides of Paul Gosar: 'Smart guy' and 'enigma,'" via E&E News.

— "Iraq oil industry's progress is threatened by tensions," via The Wall Street Journal.

— "EPA employees push 'bill of rights' to protect scientific integrity," via The Hill.

THAT'S ALL FOR ME!

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