American Oil and Gas Reporter - December 2015 - 28

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Federal Legislation

Congress Turns To SPR For Revenue
WASHINGTON-During a congressional panel at the Kansas Independent Oil
& Gas Association's 2015 annual convention, Representative Mike Pompeo, R-Ks.,
cautioned about the long-term implications
likely to follow from Congressional moves
to raise revenue by selling oil from the
country's Strategic Petroleum Reserve, especially at a time when the market was
flush already.
"I am afraid it is going to become far
too easy for every committee to say it is
going to pay for something by selling a little oil," Pompeo warned in early August
(AOGR, September 2015, pg. 151). "You
should know Congress thinks the bank is
open."
Pompeo's prediction rang true in early November when, with the president's
signature barely dry on one bill allowing
two SPR sales, the Senate approved another dip into the reserve. Press accounts note
that the first such authorizations were part
of the two-year budget deal, which the
Senate passed 64-35 at the end of October. One of that package's provisions directs the Department of Energy to raise
general revenue by selling 58 million barrels of crude oil over eight years, beginning in October 2017. Another provision
in the budget deal, published reports indicate, allows DOE to sell $2 billion
worth of crude from October 2016 through
October 2020-which at a price of $50 a
barrel, equals 40 million barrels-to fund
SPR maintenance.
Then, in early November, the Senate's
vote on HR 22, a highway funding bill, approved the sale of another 101 million barrels from the SPR during the course of
eight years, press accounts say, although
the legislation's assumption that the sale
would raise $9 billion requires an average
oil price of $89.11. DOE's website indicated in mid-November that the SPR
contained 695.1 million barrels of oil.
HR 22 did not include any provisions
to loosen the United States' restrictions on
crude oil exports, however, despite earlier public murmurings that the highway bill
could prove an apt vehicle for a crude exports amendment (AOGR, November
2015, pg. 32).

Block WOTUS Definition
In another Capitol Hill development in
November, the Senate voted 54-33 to approve a Congressional Review Act resolution to halt a proposal by the Environmental Protection Agency and the U.S.
Army Corps of Engineers that would re-

28 THE AMERICAN OIL & GAS REPORTER

define "waters of the United States"
(WOTUS) under the Clean Water Act.
According to an announcement from
Senator Lamar Alexander, R-Tn., the
CRA allows Congress to vote on a joint
resolution of approval to stop, with the full
force of law, a federal agency from implementing a rule or regulation, or issuing a
substantially similar regulation without
congressional authorization. Press accounts note that a CRA resolution is not
subject to filibuster, but is subject to
presidential veto.
Senator Joni Ernst, R-Ia., sponsored the
WOTUS resolution, which garnered votes
from three Democrats and every Republican except Senator Susan Collins, R-Me,
media reports say.
The Congressional Record quotes Senate Majority Leader Mitch McConnell, RKy., telling the chamber on the day of the
vote that the WOTUS proposal will allow
federal regulators to oversee every piece
of land that ever has been adjacent to a pothole, ditch or puddle.
"It would force the Americans who live
there to ask federal bureaucrats for permission to do just about anything on their own
property," McConnell described. "We
are not talking about just a few acres
falling under bureaucratic control here and
there. According to analysis by the American Farm Bureau, we are talking about
centralized federal control extending to
nearly 92 percent of Wisconsin, 95 percent
of California, 98 percent of New York, 99
percent of Pennsylvania, and, if you can
believe this, 100 percent of Virginia.
This is not some clean water regulation.
It is an unprecedented federal power grab
that clumsily and poorly pretends to masquerade as one."
The WOTUS proposal's status is pending in litigation. A federal court in October issued a national stay on the rule's implementation (AOGR, November 2015, pg.
34).
Clean Power Plan
A couple weeks later, press accounts
note, the Senate voted to approve two more
CRA resolutions that expressed Congress' disapproval of EPA's Clean Power Plan (CPP). The first resolution, by senators Shelly Moore Capito, R-W.V., and
Heidi Heitkamp, D-N.D., aims to halt the
CPP requirements on existing coal-fired
plants. A second resolution, sponsored by
Senators McConnell and Joe Manchin, DW.V., seeks to block the proposed rules
for new coal-fired plants.

The CPP seeks to reduce greenhouse
gas emissions from power generation 32
percent below 2005 levels by 2030
(AOGR, September 2015, pg. 158). Senator Alexander contends it would force
some power producers to cut their carbon
dioxide emissions by installing expensive
equipment that is not commercially viable.
"Instead of imposing completely unrealistic new federal mandates for what we
don't want, we should be doubling federal funding for basic energy research for
what we do want, which is large amounts
of cheap, clean, reliable energy," Alexander argues.
Senator John Cornyn, R-Tx., also voted to approve the CRA resolutions. "Make
no mistake: If the EPA is able to fully implement the president's plan, Texas will see
higher costs at the pump, at the supermarket, and on their utility bills," he warns.
Published reports indicated in mid-November that the House of Representatives
was likely to take up the resolutions soon,
but media accounts also suggest that President Obama almost certainly would veto
them. In light of that eventuality, a number
of Senate Democrats panned the undertaking, with press reports quoting Senator Brian Scatz, D-Hawaii, asking the chamber's
leadership why it wanted to "chew up valuable floor time on something that has zero
chance of being enacted into law."

Stop Federal Leasing
Another item with pertinence to the oil
and gas industry is the Keep it in the
Ground Act, introduced by Senators
Bernie Sanders, I-Vt., Jeff Merkley, D-Or.,
and Patrick Leahy, D-Vt. According to the
Texas Independent Producers & Royalty
Owners Association, the proposed resolution seeks to fight global climate change
by banning any new federal leases for fossil fuel extraction.
"Climate change already is impacting
our world through greater forest fires
and droughts, with serious effects on our
farming, fishing and forest economies,"
TIPRO quotes Merkley. "The main cause
is carbon pollution, and the impacts will
only get worse in the coming decades if
we keep burning fossil fuels unchecked.
One key part of the solution is lying literally beneath our feet. A major contribution to this challenge would be stopping
new fossil fuel leases on our public lands
that lock in oil, gas and coal extraction for
decades into the future. Our public lands
must be managed for the public good, not
for private profit."
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American Oil and Gas Reporter - December 2015

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