The U.S. Senate Energy and Natural Resources Committee on June 24 will consider the provisions of a discussion draft of a bill revealed June 18 that could be part of a federal bipartisan infrastructure proposal.
The 423-page draft Energy Infrastructure Act would help support the electricity grid buildout, domestic critical mineral development and cybersecurity improvements, among other provisions aimed at protecting the nation's energy infrastructure. The bill also contains various measures to reduce greenhouse gas emissions from the energy sector, seeking to curb methane emissions from orphaned oil and gas wells and support efforts to deploy carbon capture programs and technologies.
A spokesperson for committee Chairman Joe Manchin, D-W.Va., did not respond to a request for comment on the bill's part in infrastructure negotiations. But Manchin's role as a critical swing voter in the evenly divided Senate likely signals its importance. The committee included the proposal in a June 18 weekly hearing notice.
Grid expansion, resilience
The bill includes a full section on "grid infrastructure resilience and reliability," with multiple provisions covering the siting and development of interstate transmission lines needed to accommodate more renewable energy.
Under Section 216(a) of the Federal Power Act, the U.S. Department of Energy is already tasked with identifying national interest electric transmission corridors based on the results of periodical congestion studies. And Section 216(b) of the statute gives the Federal Energy Regulatory Commission backstop siting authority if state utility commissions "withheld" approval for transmission projects in those corridors for more than one year.
However, a federal appeals court in 2009 ruled that FERC impermissibly substituted the word "deny" for "withheld" in crafting rules to implement its backstop siting authority. That decision has prompted grid experts to call on Congress to clarify its intent for situations where state utility commissions have actually denied permits for projects sited in national interest electric transmission corridors.
The draft bill would heed those calls by clarifying that FERC has backstop siting authority in such cases where a state commission "has not approved or denied an application" or "has denied an application seeking approval pursuant to applicable law."
"The revisions to 216(b) would allow FERC to override a state denial or approve a project where a state has failed to make a timely decision on the permit application," Ari Peskoe, director of the Electricity Law Initiative at Harvard Law School, said in an email.
Peskoe also highlighted revisions to Section 216(a) that would authorize the U.S. energy secretary to consider renewable energy, electrification and decarbonization in making corridor designations.
Like other recently introduced climate legislation, the draft bill would also direct FERC to conduct a new rulemaking aimed at improving the interregional transmission planning process.
In addition, the bill would also establish a $2.5 billion "transmission facilitation program" authorizing the DOE secretary to enter into capacity contracts for new or upgraded transmission infrastructure sited on federal and/or private land. The DOE would then be required to terminate those contracts "as soon as practicable" after determining that the long-term financial viability of a transmission project has been secured through other private contracts.
The bill includes $3 billion for smart grid investments and $2 billion in borrowing authority for the Bonneville Power Administration to upgrade or replace sections of its sprawling transmission system. It also includes a section encouraging the expansion of demand response by directing state regulators to consider granting utilities a return on programs that enable customers to reduce demand in response to rising electricity prices.
Additionally, the bill contains various provisions aimed at improving the security of energy facilities. If passed, it would direct federal agencies to consult with state regulatory agencies and industry partners to create a voluntary program to assess and audit the physical security and cybersecurity of electric utilities. The program would help with threat assessments and offer cybersecurity training for electricity companies, including on ways to mitigate threats to supply chains.
Federal agencies would have to report back to Congress within a year, having assessed priorities and policies to help strengthen electricity distribution systems' physical and cybersecurity. The proposal contains incentives for entities that invest in their cybersecurity as well.
Addressing sector emissions
The bill includes various provisions aimed at reducing emissions from existing energy facilities. Should it pass, the federal government will create a program to "plug, remediate, and reclaim orphaned wells on federal lands," establishing a priority system in the process to plug the wells that pose the greatest environmental and health hazards first. Such a program would also require officials to measure and track methane emissions from these wells and any surface or groundwater contamination.
The federal government would also have to "periodically review all idled wells on federal land" and reduce that inventory.
The bill also calls for a carbon utilization program to help commercialize products and technologies by providing grants within one year of the bill's passage to entities creating products from captured carbon oxides and that "demonstrate significant net reductions in lifecycle greenhouse gas emissions compared to incumbent technologies, processes, and products." The proposal would appropriate hundreds of millions of dollars over five fiscal years to carry out the program.
The energy infrastructure bill would establish a "carbon dioxide transportation infrastructure finance and innovation program," offering federal assistance for eligible projects. The U.S. Environmental Protection Agency would be allowed to award grants to states that receive federal approval for a program to inject carbon dioxide into underground storage as well.
On the direct air capture front, the proposal would create four regional hubs to "demonstrably aid the achievement of capturing carbon dioxide directly from the atmosphere," with the capacity to sequester at least 1 million tonnes of carbon dioxide annually. The federal government would be required to start soliciting for proposals for such direct air capture hubs within six months of the bill's passage.
The proposal also contains language aimed at furthering hydrogen research, development, demonstration and deployment from "clean energy sources." It would develop "regional clean hydrogen hubs," creating a hydrogen supply chain and workforce by building demonstration projects in struggling shale gas regions, and establishing a "clean hydrogen strategy and roadmap" for the U.S.
Additionally, the legislation would direct agencies to set a greenhouse gas emissions standard for clean hydrogen produced from renewable energy sources, nuclear and fossil fuels "using any applicable production technology."
Emphasis on critical minerals
The proposal would amend the Energy Act of 2020 to establish a rare earth demonstration facility to examine the feasibility of a "full-scale integrated rare earth element concentrator and refinery." That facility would use acid mine drainage as a feedstock and seek to convert rare earth oxides into rare earth metals.
The measure would also direct the departments of Interior and Agriculture to improve the federal permitting process for projects involving critical mineral activities on federal lands, "providing demonstrable improvements in the performance of federal permitting and review processes, including lower costs and more timely decisions." Those departments would be required to report back to Congress on proposals to "increase the timeliness of permitting activities for the exploration and development of domestic critical minerals."
Within six months of the bill's passage, the DOE would have to establish a grant program for battery material processing within the Office of Fossil Energy. That program would provide grants to entities that work to build a domestic battery materials processing sector, reducing the nation's reliance on foreign nations for materials. The proposal seeks to allocate $3 billion over five years for the effort.