US-MIDTERMS 2022: IRA bill could be prime target of Republican oversight agenda


If Republicans win a majority in the US Congress in November’s midterm elections, the party could come under intense scrutiny for Democrats’ energy and climate policies — though obstacles remain to advancing key Republican goals in this area.

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Though Democratic President Joe Biden could veto any Republican-backed bill that threatens his agenda, the tight oversight of a Republican majority could target implementation of the Inflation Reduction Act, with its billions in energy and climate spending.

A Republican-led House or Senate could also step up scrutiny of federal agencies like the Environmental Protection Agency at a time when the Biden administration is trying to complete a set of regulations to meet its greenhouse gas reduction goals.

“From a practical point of view [aggressive congressional oversight] has historically caused agencies to slow down,” said Christopher Guith, senior vice president of the U.S. Chamber of Commerce’s Global Energy Institute [presidential election],” he said.

For months, the Republican Party has portrayed Democrat policies as driving inflation and discouraging fossil fuel production needed at a perilous moment of energy security.

The pace of approvals for natural gas infrastructure by the Federal Energy Regulatory Commission has already come under fire from Republican lawmakers and Senate Natural Resources Committee Chair Joe Manchin, a West Virginia Democrat. This barrage could intensify if Rep. Cathy McMorris Rodgers, a Washington Republican, takes the helm of the House Energy and Trade Committee, a body with a long history of persecuting the opposing government.

Rodgers and Sen. John Barrasso, Wyoming Republicans on the Senate Energy Panel, have already peppered the energy regulator with detailed investigations into gas and power policies that they claim could threaten energy security and reliability.

Jack Heretik, a spokesman for House Energy Republicans, confirmed in an email that those members would exercise “close oversight of FERC” if they retake the House.

More broadly, infrastructure approval and Biden’s reversal of reforms to the Trump administration’s National Environmental Policy Act are expected to attract overseer attention should the House of Representatives topple. Republicans could also push their own legislation to advocate for allowing bureaucracy.

Other targets could include the Home Department’s five-year oil and gas lease plan and the Securities and Exchange Commission’s climate disclosure rules for public companies.

Even an independent agency like the Commodity Futures Trading Commission has been examining how climate risk should affect its role in overseeing derivatives markets as the Biden administration takes a whole-of-government approach to combating climate.

Republicans are expected to take up a recent US Supreme Court ruling West Virginia vs. EPA to support their claim that the authorities lack an explicit mandate from Congress to pursue their climate policy goals.

Examine IRA spending

If Republicans control Congress, they also vow to scrutinize Democrats’ climate and energy policies over the past two years. Particular focus is expected on the Anti-Inflation Act and the bipartisan Infrastructure Act of 2021, two pieces of legislation that have seen huge federal investments in clean energy.

Republican leaders in the House of Representatives are expected to include a pledge to scrap “Build Back Better,” the name for an earlier version of the massive bill, as part of their agenda for the next Congress.

“Oversight of the billions of dollars in federal energy and environmental protection funds that have been distributed over the past two years should be a critical component of congressional energy oversight in the 118th Congress,” said Virginia Rep. Morgan Griffith, senior member Energy’s Subcommittee on Oversight and Investigations said in an email to S&P Global Commodity Insights.

“It has the potential to make Solyndra look like a chump,” said Thomas Pyle, president of the pro-fossil energy group Institute for Energy Research, citing the multimillion-dollar government-backed loan guarantees given to collapsed solar company Solyndra. He claimed there was opportunity for abuse in the IRA’s “vague descriptions” of certain new climate grant schemes.

The approximately $1.2 trillion Infrastructure Investment and Employment Act includes substantial funds to spur construction of new transmission lines and electric vehicle infrastructure. The bill also provides record Department of Energy funding for clean energy research, development, demonstration and deployment.

Some of this funding is dependent on recipients meeting certain labor, wage, and household standards that could be difficult to meet. If those hurdles prove too high to clear, Republican lawmakers could seek to reclaim unused funds from the legislature.

“I suspect in the coming months we’re going to find that there are tens of billions of dollars available out there that no one will ever really touch because the price of entry is just too high,” said Jim Barnette, a partner at Steptoe & Johnson, who previously served as General Counsel for House Energy. “So something has to give way – either that money should just be withdrawn, or you have to relax requirements to get that money out the door.”

Clean energy project developers and manufacturers must also meet certain labor and budgetary requirements to claim bonus tax credits included in the Inflation Mitigation Act, posing similar potential challenges for this new law. The IRA included about $369 billion worth of clean energy tax credits and other climate and energy spending.

Democratic control of the White House for at least the next two years will nullify any Republican attempt to reverse climate and energy spending approved by Congress. But Republican lawmakers would be better placed to do so if their party won the White House in 2024 while retaining a majority in Congress.

“Spending the last few years … has been pretty loose, so Republicans are going to look for payment for whatever they want to do,” Barnette said, adding that unused funds from the infrastructure bill “would become real prime territory for offsets.” .”

Matthew Davis, senior director, government affairs for League of Conservation voters, said Congressional scrutiny can determine whether there is cooperative and beneficial oversight of the IRA, as opposed to a more hostile and obstructive approach. It could also affect whether there is sufficient funding for agencies writing policies and guidelines to implement the law, allowing for some spending.

So far, the partisan divide has been stark. The law passed without Republican support, and party lawmakers accused Democrats of interfering with a “reckless tax and spending spree.”

Concerns about reliability

In addition to examining recently passed legislation, monitoring of domestic energy resources, grid and pipeline security, the future of the Strategic Petroleum Reserve and regulatory action from the Environmental Protection Agency “will be necessary,” Griffith said.

Grid reliability could get special attention as states like California have recently struggled to meet demand amid rising temperatures and a shift toward more intermittent renewable resources. These challenges could lead to a major review of the clean energy transition and the effectiveness of FERC-regulated wholesale electricity markets, former Commissioner Bernard McNamee said in an interview.

“Due to the changing resource mix, we see that the [regional grid operators] may not provide the reliability or economic value promised to customers, especially given that you have a growing number of subsidized resources such as wind and solar, which also have no fuel costs, and electricity prices are generally set at a clearing price that of natural gas and all resources are then paid for at price,” McNamee said. “As we get more subsidized resources, when will those economic benefits be passed on to customers?”

While the increased attention of Congress could put agencies on the defensive, LCV’s Davis says there are no guarantees that new regulation will slow down or derail when he reflects on past Republican efforts to stymie the Obama administration’s actions.

“Did it burn some resources from some agencies? Yes, probably,” he said. “But has it thrown the Obama administration as a whole?


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