Members Turn Focus on Midterm Elections

Members of the House and Senate have left Washington to devote themselves to campaigning and will not return until after the November 8 elections. Senate Majority Leader Chuck Schumer (D-NY) had originally scheduled a mid-October session to allow for consideration of the National Defense Authorization Act (NDAA) but changed the schedule. Technically, the Senate will meet in October to “officially” begin the consideration process of the National Defense Authorization Act (NDAA) on Oct. 11 but will punt voting on the bill until after the Senate returns for the lame-duck session on Nov. 14. Very few senators are expected to be in attendance. Instead, the House and Senate Armed Services Committees will spend October ironing out differences between their two versions of the bill.

The House and Senate passed a continuing resolution (CR) (H.R. 6833) extending government funding until December 16th. The CR passed the Senate after Sen. Joe Manchin (D-WV) agreed to drop his provisions to expedite approvals for energy-project permitting. Progressives and most Republicans had threatened to tank the bill if Manchin’s amendment wasn’t removed. Manchin vowed to try and pass the measure in the lame duck.

Upon their return on Nov. 14, lawmakers will have about a month to draft and pass a FY 2023 omnibus appropriations package when they reconvene after the midterm elections. The outcome of the midterm elections will heavily influence the December negotiations on the final appropriations bills and any extraneous legislation attached to it or the NDAA. Republicans remain well-positioned to win back the House of Representatives, albeit by narrow margins, which will continue the division in Washington for the 118th Congress. Control of the Senate is a bit harder to predict but will depend on the outcome of three key Senate races: Nevada, Georgia, and Pennsylvania. The party that wins two of those three races will likely have a majority in January.

Oil, Gas, and Energy Permitting Legislation Not Dead Yet

Although Senator Joe Manchin’s permitting bill was stripped from the stopgap bill last week, Wednesday’s OPEC + announcement that it cut oil production could breathe new life into Manchin and Sen. Shelley Moore Capito’s (R-WV) efforts to pass stalled permitting legislation to boost U.S. energy production.

On Wednesday, members of the Organization of Petroleum Exporting Countries (OPEC) said the oil cartel will cut production by 2 million barrels per day starting in November. The cuts come amid calls from President Biden for OPEC to cut increase production as Europe heads into winter facing reduced oil and gas supplies due to the war in Ukraine, and global oil and gas prices hit hard by inflation had recently begun to fall. An angered administration and members of Congress are showing they are willing to respond aggressively as they plan to begin consulting on “tools” that would reduce OPEC’s control over global oil prices. The White House has already announced plans to release 10 million barrels of oil from the Strategic Petroleum Reserve next month.

Members on both sides of the aisle are likely to offer a myriad of proposals, including legislation that could make OPEC members vulnerable to antitrust lawsuits, a ban on oil exports from the U.S., more sanctions against Russia, and calls for greater energy independence whether it be through those advocating for more investment in clean energy and the other side of the spectrum arguing the need to ease restrictive environmental procedures and increase drilling.

The American Petroleum Institute and the American Fuel & Petrochemical Manufacturers told the administration on Tuesday not to ban or restrict exports of refined petroleum products, saying that would likely reduce rather than increase supplies. They urged the administration to take this option “off the table” and work with them to strengthen U.S. energy security and consumer protection.

Manchin’s measure imposes a 150-day statute of limitations on court challenges and requires courts to give agencies 180 days to act on vacated permits. Most of the opposition focused on provisions that would have allowed Congress to direct federal agencies to approve all necessary permits for a natural gas pipeline from West Virginia to Virginia. Opponents argued that Congress should not make individual permitting decisions.

Other contentious provisions involved changes to Section 401 of the Clean Water Act, which governs how states and tribes review and decide on permits to fill or dredge federally protected waters. The proposed changes could affect a wide number of permitting decisions, including those for fossil fuel, such as pipelines from mines to export terminals. The proposal’s provisions would also prohibit states, tribes, EPA, or interstate agencies from denying or attaching conditions on certifications based on non-water quality impacts, including those related to air emissions.

Environmentalists and some Democratic lawmakers argue the legislation is nothing more than a “handout to fossil fuel companies.” Clean energy advocates, however, worry that failure to pass the measure would hinder the rapid expansion of renewable power needed to combat climate change. Clean energy experts say provisions in Manchin’s bill will accelerate large interstate transmission line projects.

The push to pass the legislation is further complicated by Republicans, who are less eager to reward Manchin with their votes after he struck a deal with Majority Leader Chuck Schumer, promising a vote on the permitting legislation in exchange for his support in passing the Inflation Reduction Act. Most Republicans say Manchin’s bill does not go far enough to ease permitting requirements. They prefer a version proposed by Shelley Moore Capito (R-WV), the top Republican on the Environment and Public Works Committee. Both Manchin and Capito remain optimistic that they can hammer out a bipartisan compromise that can be passed this year, although a tight legislative calendar casts doubt on that prospect. With that said, the political and energy consequences of the OPEC decision could reprioritize the lame-duck agenda regardless of the midterm election results.