White House and Congressional negotiators have announced the outlines of a bipartisan debt ceiling compromise meant to stave off a US default and potential economic crisis.
The compromise would lift the $31.4 trillion US debt cap for two years while cutting discretionary spending from earlier White House proposals. Some give-and-take is included around energy permitting and approvals.
The passage of the Fiscal Responsibility Act is generally seen as needed before Jun. 5, the so-called “X-date” by which the US Treasury could begin to struggle to cover some financial obligations. But factions on both sides of the aisle have begun to balk, making the bill's success less than a sure thing.
The House of Representatives is eyeing a vote as early as Wednesday.
Below, Energy Intelligenceexamines some of the key energy flashpoints in the bill.
Energy Permitting Streamlining: The Fiscal Responsibility Act includes several revisions to the environmental review process for energy projects. Included is a 1-2 year time limit for reviews under the National Environmental Policy Act (Nepa) — a reform sought by nearly every energy lobby group, including midstream operators. A lead agency would also be designated for projects seeking Nepa approval to help streamline the review process. Full environmental impact statements would carry page limits for the first time to support shorter processing, with the longer analyses typically reserved for large pipelines or other traditional oil and gas developments now limited to 300 pages. Wendy Kirchoff, vice president of regulatory policy at the Washington-based American Exploration and Production Council, previously told Energy Intelligence that such impact statements had swelled over the years: “The reviews just keep getting bigger and bigger, such as 3,000 pages per document when you include the supporting appendices.”
Scope of Permitting Review: The bill includes a number of sought-after changes to environmental reviews sought by oil and gas lobbies, including instituting page counts. But the bill stops short of limiting the scope of Nepa reviews to exclude broad greenhouse gas emissions analysis and avoids setting new restrictions around courtroom challenges to Nepa reviews. White House officials on Tuesday pitched the included Nepa revisions as an overall win, with streamlined processes benefitting all energy projects, including clean energy, while avoiding the deeper cuts to Nepa sought by Republican lawmakers. For one, the bill's language would allow smaller-scale clean energy projects, such as electric vehicle charging infrastructure, to bypass longer Nepa reviews, White House Deputy National Climate Advisor Mary Frances Repko told reporters Tuesday.
Mountain Valley Pipeline: As with a previously failed Senate bill, the Fiscal Responsibility Act looks to force all lingering authorizations regarding the remaining 6% of the Mountain Valley (MVP) gas pipeline spanning parts of Virginia and West Virginia. The US 4th Circuit Court of Appeals has vacated the pipeline's water quality permits several times, but the bill's language would automatically authorize federal approvals and shield them from judicial review — as least until the 303-mile Equitrans-led project is complete and on line. Equitrans’ stock price soared on Tuesday as the details were released, in anticipation that developers could meet their timeline for starting up the line this year. Left-leaning Democrats and climate activists have been especially vocal in their opposition of the bill's MVP provisions.
Inflation Reduction Act (IRA) Provisions: The bill stops short of clawing back billions in clean energy tax incentives found in the landmark IRA — a key feature of a previous House bill to extend the debt ceiling, but a nonstarter for the White House. White House officials have pitched the retained IRA tax credits and other provisions, including its methane fee program, as a climate victory.