THE PLAYERS

The Administration

While it is unusual for a President to enjoy four years of service from his cabinet leaders that oversee the Environmental Protection Agency and the Departments of Energy, the Interior, and Transportation, there are no expected shakeups at the top of these agencies at this time.  

However, due to opposition from the GOP and Senate Energy & Natural Resources Chairman Joe Manchin (D-WV), Federal Energy Regulatory Commission (FERC) Chairman Richard Glick’s term expired without being reconfirmed. While President Biden can name one of the sitting commissioners to serve as Chair, the independent regulator will enter the new year with a makeup of two Democrats and two Republicans. This may lead FERC to deadlock on more controversial issues, allowing proposals to move forward without a formal decision and leading to legal ambiguity and additional litigation. The commission has proposed several rules to better plan electric transmission lines and lower barriers to connecting renewable power generation. It’s also weighing updates to a 1999 natural gas policy statement that has frustrated Chairman Manchin and many in the GOP.

Just before adjourning the 117th Congress, the Senate confirmed Richard Revesz to lead the White House’s Office of Information and Regulatory Affairs (OIRA), giving the office its first permanent leader under President Biden. With a divided Congress, Biden will need OIRA’s help to advance his agenda through regulation and carry out the laws he’s already signed—most notably the Inflation Reduction Act (IRA). An NYU law professor for more than 30 years, Revesz specializes in climate change and environmental litigation and regulation. Reconsideration of air quality rules for particulate matter (PM) and ozone are still pending, as well as potential greenhouse gas limits for power plants. Revesz has authored a number of works on the virtues of cost-benefit analysis.

Committee Leadership

The House Energy & Commerce (E&C) Committee will continue to be led by Cathy McMorris Rogers (R-WA) and Frank Pallone (D-NJ), but their roles will now be reversed with McMorris Rogers taking the gavel and Pallone serving as the ranking Democrat. The Senate Energy & Natural Resources Committee leadership will also remain stable, with Chairman Joe Manchin and Ranking Member John Borrasso (R-WY) retaining their positions in the 118th Congress.

With House Transportation & Infrastructure Chairman Pete DeFazio (D-OR) retiring, Sam Graves (R-MO) is set to lead the Committee as it gets set to reauthorize the Federal Aviation Administration (FAA) and oversee further implementation of the Investment in Infrastructure and Jobs Act (IIJA). Rep. Rick Larsen (D-WA) will serve as the top Democrat on the panel after previously chairing the FAA subcommittee.

Rep. Bruce Westerman (R-AR) is set to take the reins of the House Natural Resources Committee, with former Chairman Raul Grijalva (D-AZ) serving as Ranking Member.

None of the senators in line to lead the Commerce or Environment & Public Works Committees lost on Nov. 8th, though Sen. Ted Cruz (R-TX) is looking to move up to serve as the top Republican on Commerce, Science & Transportation, while Sen. Maria Cantwell (D-WA), will continue to wield the gavel. Sen. Jerry Moran (R-KS) is next in line to take Cruz’s spot atop the Aviation Subcommittee. And on the EPW Committee, leadership in both parties is expected to remain relatively similar in 2023, with Chairman Tom Carpet (D-DE) and Ranking Member Shelley Moore Capito (R-WV) enjoying a strong working relationship.

THE POLICIES 

Oversight & Investigations 

House Republicans are promising aggressive oversight of the Biden administration, with energy, environmental and infrastructure policies included among issues facing increased scrutiny.

Incoming House Oversight and Reform Committee Chairman James Comer (R-KY) specifically pointed to the administration’s cancellation of the Keystone XL pipeline and restrictions on oil and gas leasing on federal lands as two such policies for oversight. He also said that the panel will look into climate-related actions by the Securities and Exchange Commission (SEC) that would require publicly traded companies to disclose their climate risks and greenhouse gas emissions.

House Republicans have also indicated that they would monitor the Energy Department’s loan program, which historically has given money to high profile companies like Tesla and failures like Solyndra.  Republicans intend to comb through a host of infrastructure and clean energy projects set to receive funding by the Biden administration from the bipartisan infrastructure law and Inflation Reduction Act.  In total, the IRA included some $369 billion in climate- and clean-energy-related spending. The infrastructure package added nearly $100 billion more in energy and environment spending. That money is already in the initial phases of going out the door.

Incoming Energy & Commerce Subcommittee on Oversight Chair Morgan Griffith (R-VA) indicated he wants to investigate what he sees as an overemphasis on renewable energy research and development at the Department of Energy at the expense of fossil fuels.

With the Biden administration expected to ramp up climate rules to bolster infrastructure and clean energy laws enacted over the past two years, Republicans will attempt to slow climate-related rulemakings through oversight hearings and voluminous document requests.

Finally, national parks are another area about to receive some time in the oversight spotlight. Incoming Natural Resources Chairman Bruce Westerman has called for a closer look at the funding distribution used by Interior to fund deferred maintenance projects across the national parks, as outlined in the recently passed Great American Outdoors Act. Enacted under the Trump administration, the bill directs excess funds from energy production royalties on public lands to help improve public land project maintenance. Separately, Democrats and Republicans alike have said they’re concerned with implementation of the law, especially when it comes to bottlenecks in land acquisition. 

Fossil Fuels & Climate Change

A Republican energy and climate plan unveiled last summer focused on oil and gas development, despite those fuels’ significant contribution to climate change. This may include legislation that would require the President to develop a plan to encourage oil and natural gas production and approve pipelines to import Canadian oil. It also mentioned legislation requiring congressional approval before prohibiting or delaying new oil, gas, coal or mineral leases. The GOP plan also pointed to bills aimed at shortening the environmental review process for fossil fuel projects. Most of these proposals would face a steep uphill climb in the Democratically controlled Senate and from a Biden White House.

Other ideas include planting millions of trees and boosting energy efficiency, increasing hydropower, nuclear energy and carbon sequestration. Some of the ideas Republicans are considering overlap with those in the Democrats’ Inflation Reduction Act, including generous tax credits for nuclear, hydrogen and carbon capture, and funding for energy technology research and development as well as forestry conservation and new tree planting.

Bipartisanship?

While no one expects the 118th Congress to approve multiple sweeping pieces of legislation, several issues are ripe for bipartisan cooperation. Rep. Bob Latta (R-OH), a senior E&C Committee member, said he expects the panel to look at modernizing the country’s electrical grids, regulating self-driving vehicles and taking up a new wave of nuclear technology known as small modular reactors (SMRs).

Technologies to trap carbon emissions from power plants and suck carbon directly out of the atmosphere are also generally supported by both parties. Some lawmakers are convinced there will be an appetite to boost carbon removal startups in the next few years.

Some must-pass measures like the farm bill reauthorization could also offer room for bipartisan action, such as boosting clean energy in rural areas and climate-friendly forestry practices that could increase carbon sequestration.

Increasing access to outdoor recreation while protecting public lands and waters is another issue that enjoys bipartisan support. We anticipate action on America’s Outdoor Recreation Act and other initiatives to enhance infrastructure and the outdoor recreation economy.

Permitting reform will continue to be an issue receiving bipartisan attention. While President Biden endorsed Sen. Manchin’s permitting bill, there is a clear appetite for reforms even among climate hawks like Sens. Brian Schatz (D-HI) and Ron Wyden (D-OR). Fundamental disagreements among Democrats persist on how to put new constraints on environmental reviews and timelines.

Finally, there is growing consensus that the U.S. must avoid trading dependencies on foreign sources of fossil fuels, for one, on Chinese critical minerals. Addressing this challenge was a central focus of the IRA, with its domestic content provisions designed to fuel more demand for electric vehicles and other green technologies without relying on China as part of strategic supply chains. Sens. Mitt Romney (R-UT) and Dan Sullivan (R-AK) have also championed legislation to decrease Defense Department’s mineral reliance on China by establishing that it is U.S. policy that DOD achieve “critical mineral supply chain independence” by 2027. Thus far, President Biden has invoked the Defense Product Act to increase domestic production of critical minerals, fund feasibility studies and expand new and existing sites.

Implementation

Almost certainly, the most important actions coming out of Washington impacting environment and energy policy will involve implementing the IRA, and to a lesser degree, the IIJA. These are both monumental pieces of legislation that will have wide-ranging impacts for years to come. Multiple departments and agencies will continue to roll out and tweak rules and regulations to update America’s infrastructure and guide the nation’s energy transition.

Finally, with Congress divided for the last half of his term, President Biden will turn to what many of his predecessors have done—double down on executive action. For example, in 2022 the Department of Energy released over 100 proposals and rules to increase energy efficiency requirements for a host of products. All expectations are that actions like this will continue over the next two years.