ǿմý

Biden regulatory plan set to shake up energy sector

By Miranda Willson, Heather Richards, Brian Dabbs | 12/07/2023 06:59 AM EST

The fall agenda signals which energy and climate policies may be put into place before the 2024 presidential election.

WASHINGTON, DC - NOVEMBER 21: U.S. President Joe Biden speaks during a meeting about countering the flow of fentanyl into the United States, in the Roosevelt Room of the White House November 21, 2023 in Washington, DC. Last week following meetings with Chinese leader Xi Jinping, Biden announced that he and Xi reached an understanding about reducing the flow of fentanyl from China to the U.S.

President Joe Biden speaks last month at the White House. Drew Angerer/Getty Images

The White House released a regulatory plan Wednesday that could shape President Joe Biden’s energy legacy — as well as influence greenhouse gas emissions and the electricity mix — amid partisan gridlock in Congress.

The lays out tentative timelines for new rules affecting pipelines, energy efficiency, oil drilling on public lands and other issues ahead of a contentious presidential election cycle. It would stall some electric grid policies.

Oil and gas agencies plan to push a handful of regulations across the finish line next year, from a previously proposed rule that would reshape drilling in the western Arctic to stiffer rules limiting venting and flaring of natural gas on public lands. Meanwhile, two of the Federal Energy Regulatory Commission’s most high-profile proposed transmission rules are listed on the agenda as “next action undetermined” for October 2024.

Advertisement

One of those FERC rules would change how large electric power lines are planned and paid for in an effort to ease delays holding back projects. The other lays out a new process for transmission developers to seek permits from FERC if they can’t get approval from state regulators, but only certain projects would qualify.

Finalizing both rules is a major priority for Senate Democrats and clean energy advocates.

The Department of Energy, by contrast, is expected to move ahead in the coming months with final efficiency regulations for a variety of appliances and equipment like gas stoves, distribution transformers and consumer water heaters.

DOE and FERC

A water heater standard at DOE, , could avoid more than 500 million metric tons of carbon dioxide over 30 years. That’s more than 20 times the carbon savings of the agency’s gas stove regulation, which amid aggressive political pushback.

DOE needs to finalize the gas stove regulation by the to comply with a consent decree approved by a court. But for the first time, the department signaled it will move ahead with compromise efficiency levels for gas stoves that were in September. A “direct final rule” to do so could come before the end of the year.

Meanwhile, DOE plans to finalize a regulation for distribution transformers . The proposal would cut 256 million metric tons of CO2 over 30 years. The department also plans to finalize efficiency regulations for dishwashers, clothes dryers and washers, ceiling fans, consumer boilers, vending machines, electric motors, commercial ice makers, and other appliances.

On top of that, a rulemaking to clarify the environmental review process for developers seeking federal approval for certain new electric transmission projects is .

At FERC, only a handful of proposed rules and policies received updated timelines under the agenda. FERC is an independent, bipartisan agency, so the White House does not control the pace at which rules are finalized or their content. Presidents appoint FERC members, who are confirmed by the Senate.

By next October, FERC is expected to finalize a rule affecting certain incentives that electric utilities currently receive for joining a regional transmission organization. The issue is being closely watched by consumer advocates, who say existing incentives in question are overly generous. FERC proposed curbing the financial incentives for utilities in 2021.

The commission is also set to finalize by the end of this year new standards to address the reliability of solar and wind power plants, according to the agenda. Solar projects in particular have experienced unplanned, brief outages in Texas and other states, prompting the commission to take action to improve their performance.

A flurry of oil and gas rules

The White House agenda includes finishing several consequential changes to oil and gas regulations on public lands and off the nation’s coasts that have already been publicly proposed.

New regulations are also in the works, including a standard judging “fitness to operate” for offshore oil companies that’s expected out next fall.

Biden officials have repeatedly committed to reshaping the nation’s oil and gas program amid broader attempts to rein in fossil fuel reliance in the country, a push that’s led to higher royalties and stiffer environmental rules for drillers — and a standoff with Republicans.

According to the agenda, the Bureau of Land Management aims to finish a previously proposed overhaul of oil and gas regulations by April. The rules would sync BLM’s regulations with mandates from last year’s Inflation Reduction Act, like increasing minimum royalties to 16.67 percent.

The proposal would also set a new floor for how much insurance companies have to secure to drill a federal lease, from the current $10,000 minimum to $150,000. The rules include several provisions to corral new leasing onto lands where the federal agency finds the most potential for oil and gas production, while shifting oil speculation away from areas it wants protected for recreation or wildlife.

Other previously announced rules near completion include the Bureau of Land Management’s proposed limits on venting and flaring natural gas from federal lands. The agenda has scheduled the Waste Prevention, Production Subject to Royalties and Resource Conservation rule for final action in January. That comes on the heels of a methane waste prevention rule from EPA that was published last week.

In the Arctic, BLM aims to decide on a framework for “maximum protections” in “special areas” of the National Petroleum Reserve in Alaska by March. The proposed rules would raise the bar on what industry must do to drill in parts of the reserve, but pro-oil Alaskans have said it could throttle development.

Offshore, the Bureau of Ocean Energy Management plans to complete a new set of financial assurances for drillers by April.

The proposed rule, released earlier this year, has stoked some criticism from oil and gas companies that say its potential $9.2 billion ask in new bonding from smaller companies is impossible to fill. But supporters of the rule say it would ensure that oil companies without the means to cover cleanup costs would be blocked from operating.

The Bureau of Safety and Environmental Enforcement, which handles safety regulations offshore, aims to ink the first updates to oil spill response regulations in 22 years, with a proposed rule scheduled to come out as soon as this month. Additionally, it is working on new offshore pipeline standards covering permitting, maintenance, installation and decommissioning.

That agency is also working to finish regulations for high-pressure, high-temperature drilling offshore and is proposing a rule clarifying the agency’s existing authority, requiring oil companies that are contesting civil penalties to first secure a bond covering the amount of the penalty or use their existing bonds to cover the amount.

Both BOEM and BSEE are also working on safety regulations for the rapidly growing offshore wind sector, according to the agenda.