Energy Policy Modernization Act of 2015

Floor Speech

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Mr. HOEVEN. Mr. President, I rise to speak about the Energy Policy Modernization Act of 2015--legislation that has been advanced by our Energy and Natural Resources Committee chairman, Senator Murkowski, along with the ranking member, Senator Cantwell. As a member of the committee, I appreciate their leadership on this important issue and this legislation we are now considering on the floor.

I think Chairwoman Murkowski is right when she speaks to the need to update our Nation's energy policy and, in that spirit, I filed several amendments designed to advance our Nation's energy policy in key areas. Today I wish to speak briefly about these three amendments. These amendments would help provide regulatory certainty for cross-border infrastructure projects, the regulation and recycling of coal ash, and reaffirm State primacy for energy development, particularly when it comes to hydraulic fracturing or fracking.

First, let me talk about the North American energy infrastructure amendment. One of the necessary components to leveraging our abundant energy resources and strengthening our energy security involves building the infrastructure to take energy from where it is produced to where it is consumed. Whether it is transporting crude oil or natural gas or modernizing and connecting our electric grid, these projects require long-term planning and investment, as well as a regulatory environment that promotes certainty and transparency, as well as impartial review.

That is why I have submitted an amendment which is identical to the North American Energy Infrastructure Act--S. 1228--that would modernize the existing Department of Energy Presidential permitting process for cross-border infrastructure projects.

This amendment, which is cosponsored by Senator Donnelly of Indiana-- it is a bipartisan measure--removes the need for a Presidential permit for the construction, operation or maintenance of a new oil or natural gas pipeline or electric transmission facility with Canada or Mexico and instead places the process in the proper Federal agencies.

While it does not alter the NEPA--again, I will repeat this. While it does not alter NEPA's--the National Environmental Policy Act-- environmental review process, our amendment sets time limits for Federal agencies to make a decision on projects once those necessary reviews are completed. This will add greater certainty to the permitting process, and that certainty will help attract the long-term investment necessary to help us build the energy infrastructure we need.

These projects are too important to our economy and to our national security to be dragged out virtually for years, such as in the case of the Keystone XL Pipeline--more than 7 years. We need a process that is fact-based, transparent, consistent, and nonpartisan, that will help support the important energy relationship between the United States and our closest friend and ally--Canada.

The Energy Department publicly states that it requires approximately 6 to 18 months to issue a Presidential permit. However, there are numerous examples of pipelines and electric transmission applications languishing far beyond that timeline. The many inconsistencies involving these applications speak to the need to update this permitting process.

So let's start with crude oil pipelines. Take, for example, the bureaucratic delays for the Plains All American Pipeline, which secured a Presidential permit from the U.S. State Department for its crude oil pipeline in 2007. In February of 2013, the company sought a name change permit from the State Department. However, it took until August of 2015--2\1/2\ years--before a name change was approved.

The State Department informed the company that its application for a name change required a new National Environmental Policy Act--or NEPA-- review because a separate pipeline, the Bakken North, based wholly within the United States, would connect to it. So to change the name, they had to do a NEPA review for 2\1/2\ years.

Electric transmission lines. There have also been many delays in siting electric transmission lines between the United States and Canada, and in a lot of cases that is for renewable energy. One example is the New England Clean Power Link, a 1,000-megawatt project delivering renewable energy spanning 154 miles between Vermont and Quebec. The company filed its application for a Presidential permit in May of 2014. Yet its application has been pending for over 20 months for a renewable energy electric transmission line.

Another example is the Great Northern Transmission Line, a 220-mile project that would connect Minnesota and Manitoba, bringing hydroelectricity and wind power across the border. The project's Presidential application was filed in April of 2014. While the review is ongoing and we hope an outcome will come soon, this application has been pending for almost 2 years.

The third example is the Champlain Hudson Power Express project, a 333-mile underground and underwater project. It will bring 1,000 megawatts of hydroelectric power from Quebec to the New York City area. The application for a Presidential permit was initially filed in January 2010; yet it took almost 5 years--until October 2014--for the Presidential permit to be issued.

Inconsistent delays in the Federal review timelines, which last longer than the Energy Department's 6- to 18-month target--the target is 6 to 18 months, not 5 to 7 years--inject uncertainty, risk, and costs into all of these vital projects.

Commonsense reforms are needed so the project proponents and consumers can benefit. This is exactly what this legislation does. Specifically, this amendment would eliminate the Presidential permit requirement for construction or modification of new oil and natural gas pipelines, as well as electric transmission facilities, that cross the national boundary of the United States. Instead, it places the process in the proper agencies.

It would require that the certificate of crossing will be issued by the Secretary of State for oil pipelines, the Energy Department for electric transmission lines, and FERC and the Energy Department for cross-border natural gas pipelines, as currently configured.

It requires the State Department to issue a certificate of crossing on a cross-border pipeline permit within 120 days upon completion of a NEPA environmental review process. There is the NEPA environmental review process, but then 120 days after that, they have to make a decision and they have to issue a certificate of crossing unless the agency finds that construction of the cross-border segment is not in the public interest of the United States.

It would retain the NEPA review of the potential environmental impacts of a new project at a border crossing and leaves unchanged all other environmental, land, or wildlife reviews currently applying to any other pipeline constructed in the country. In other words, the States would still oversee the NEPA and permitting processes, as they do now.

It would provide for an open and transparent rulemaking process to determine the definition of ``cross-border segment,'' which would be used to help determine the scope of the NEPA review process. That is because requiring a NEPA review for the entire pipeline project duplicates the multiple Federal, State, and local agencies' regulations, processes, and authorities already in place.

There are numerous existing State and Federal laws and regulations for the review and approval of siting, land acquisition, design, and construction of projects. Those remain unaffected by this amendment. For example--and this is important--State laws and regulations governing pipeline siting remain unchanged by this amendment. Federal laws and regulations governing design, construction, safety, and environmental review of the pipelines remain unchanged. State and local laws and regulations regarding land and rights-of-way acquisition for infrastructure projects, such as pipelines, would remain unchanged. Construction and operation of a pipeline in the United States must comply with the safety regulations of the Pipeline and Hazardous Materials Safety Administration. This is a separate process from the NEPA process and is also unchanged by this amendment.

The measure would provide appropriate authority and scope to the State Department for examination of border-crossing impacts of projects. Other reviews by the Department of Interior, Bureau of Land Management, U.S. Fish and Wildlife Service, and U.S. Army Corps of Engineers for issues such as environmental, land, and wildlife impacts are appropriate and remain unchanged.

The amendment would require FERC to approve natural gas cross-border pipelines consistent with current policy. It also requires the Energy Department to issue a permit within 30 days of the receipt of the FERC action. Again, these are rational timelines, so there is some consistency and dependability in the process.

Finally, the amendment also specifies that existing projects do not need further approvals for new or revised Presidential permits for certain modifications. These include alterations such as volume expansion, adjustments to maintain flow, or changes in ownership.

This is commonsense legislation that can help us build the vital energy infrastructure we need for this country.

At this point, Mr. President, I would ask how much time I have remaining.

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Mr. HOEVEN. Mr. President, the next amendment I would like to review that I will be offering is identical to a bill introduced by Senator Manchin and myself. It is the Improving Coal Combustion Residuals Regulation Act of 2016, S. 2446. This legislation, which builds on our past efforts to find a bicameral, bipartisan approach to coal ash, ensures that there is safe disposal of coal ash and provides greater certainty for its recycling. This is a win from the industry standpoint of more energy, it is more cost-effective, but it is also an environmental win in terms of recycling coal ash, as well as making sure that when it is disposed of, it is done safely.

Coal ash is a byproduct of coal-based electricity generation that has been safely recycled for buildings, roads, bridges, and other infrastructure for years. In fact, I think it is important to take note of the environmental and financial benefits of coal ash recycling. Over 60 million tons of coal ash were beneficially used in 2014, including over 14 million tons in concrete. It has been calculated that taxpayers save $5.2 billion dollars per year thanks to the use of coal ash in federally funded road and bridge construction. Products made with coal ash are often stronger and more durable, and coal ash reduces the need to manufacture cement, which resulted in greenhouse gas emission reductions of 13 million tons in 2014.

In December of 2014, the EPA put forth new regulations for the management of coal ash. The regulations made clear--at least for the time being--that coal ash would continue to be treated and regulated as a nonhazardous waste consistent with EPA's earlier findings. However, the regulation has a major flaw: It relies solely on citizen lawsuits for enforcement. What this means is that neither the EPA nor the States can directly enforce the rules through a permit program with which owners and operators of coal ash disposal facilities must comply. Think about it. That means the regulation does not create the constructive regulatory guidance and oversight necessary to ensure the proper management of coal ash. Instead, the EPA regulation has created a situation whereby the only enforcement mechanism for the rule is that an operator of a coal ash site can be sued for not meeting the EPA's new Federal regulatory standards. Those subject to this regulation whose responsibility it is for keeping the lights on for our electricity consumers are themselves left in the dark about how the EPA standards will be defined in court cases across the Nation. Instead of direct oversight, we will have lawsuits brought by those who want to shut down coal production.

Imagine building an addition to your house and there being no building permit process to go through with your local government. Let's just take this as an analogy. You want to build a house, but there is no building permit process to go through with the local government. You call the city or the county, and they say: Well, you should just read the rules, and if you violate the rules, know that you can be sued at any time by anyone who thinks that maybe you didn't build that addition according to the law. This process would leave you without any sort of assurances that you actually built your addition in accordance with the law. Worse, you would have the threat of litigation hanging over your head. Does that make any sense?

Think about it. You build a house, a nice, beautiful house, in Phoenix, where it is nice and warm in the winter. You can't get a building permit. You build that house according to your interpretation of the regulations, but anybody--it might be your neighbor; it might be somebody who comes down from the great State of North Dakota to enjoy your lovely winter--anybody may decide to sue you, and they would be able to do it. That is how the regulation of coal ash is set up. Come on. It makes no sense at all. That is how it has been done, and that is why we need to fix it.

Our amendment will directly address this problem by taking the best parts of our EPA rule--the standards for coal ash disposal--and incorporating all of them in EPA-approved State permit programs for both recycling and disposal. The States will have direct oversight over disposal sites' design and operation, including inspections, air criteria, run-on and run-off control, closure and postclosure care, and financial assurance. Meanwhile, we offer State regulators the same flexibility for implementing the groundwater monitoring and corrective action standards that are currently provided under existing municipal solid waste and hazardous waste regulations, allowing State regulators to make tailored, site-specific adjustments.

We have been listening to the issues the EPA has brought up about our previous versions of this legislation. In fact, we changed the legislation to include a more traditional EPA application process for the State permit programs. If the EPA finds that a State permit program is deficient----
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Mr. HOEVEN. If the EPA finds a State permit program deficient, then the EPA can take direct control over the State's permit program in that State. If a State doesn't want to have its own permit program, the EPA runs the permit program for the State.

Mr. President, our amendment is about responsible regulation. It is about certainty for recyclers and for the American public, who will know that State and Federal regulators are actually working with energy producers to ensure safe disposal of coal ash.

I urge my colleagues to support this commonsense, bipartisan approach by voting for the Hoeven-Manchin amendment.

I do have another amendment to speak on, but at this time, due to time constraints, I will defer to the Senator from Massachusetts, and I thank him for his courtesy.
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Mr. HOEVEN. Mr. President, this morning I discussed two amendments that I have submitted in regard to the current energy legislation, the Energy Policy Modernization Act of 2015.

I would like to talk about a third amendment that I submitted as well. The amendment actually follows legislation that I introduced earlier entitled the ``empower States amendment.''

Essentially what the ``empower States'' legislation does is it ensures that States retain the right to manage oil and gas production in their respective State. It gives them the ability to develop hydraulic fracturing rules and to respond first to any violation that might occur, rather than having a Federal one-size-fits-all approach. This is very important, because how we produce oil and gas in States such as North Dakota is very different than how we might produce oil and gas in a State like Louisiana, for example, or some other State. So States have to have the flexibility to respond to their industry to provide regulatory certainty and to empower that investment that will help us produce more energy and do it with good environmental stewardship.

This amendment also allows States to regulate oil and gas development on Bureau of Land Management lands if the State has laws and regulations in place to protect both public health and the environment.

As I said, it takes a States-first approach because individual States are the first and best responders to oil and gas issues. They know their land, their geology, their water resources, and they have a primary stake in protecting their environment and their citizens.

States such as North Dakota have been successful in developing oil and gas production with good environmental stewardship. Right now our State produces about 1.2 million barrels of oil a day, second only to the State of Texas.

With that growth in development, our industry has had to work very closely with the State of North Dakota on a whole gamut of issues that are vitally important--not only, as I said a minute ago, in terms of producing more energy but doing it with good environmental stewardship. So that is what this legislation is all about.

At the same time, this amendment provides a safety net that allows the Environmental Protection Agency, or the EPA, to step in if there is a danger to health or the environment. Again, it is about making sure that States have the primary role, but it still recognizes the EPA's role as well in terms of protecting the environment and good stewardship.

States would still be subject to the Safe Drinking Water Act and the Clean Water Act. These Federal laws have minimum standards for all States, and those minimum standards ensure consistent protection between and among the States for both the public and the environment.

Surface water is protected under the EPA's Clean Water Act surface water quality standards. Drinking water is protected by the Safe Drinking Water Act, which allows the EPA to act if a contaminant is present or likely will enter an underground drinking water source.

Hydraulic fracturing wastewater is regulated by the EPA's underground injection program, which is designated to the States to implement and enforce. That is what we are talking about, again--the State having the primary role in regulation of hydraulic fracturing.

The EPA requires a State to have a minimum requirement in terms of protecting underground injection from endangering drinking water sources. This concludes inspection, monitoring, recordkeeping, and reporting requirements. None of those requirements would change under this amendment.

Instead, this amendment gives the States and tribes more certainty about under what circumstances the EPA may withdraw or amend a State's regulation. Again, it is about making sure we have the regulatory certainty out there that actually empowers the very investment that helps us produce more energy and do it with good environmental stewardship. It ensures that if the EPA does decide to intervene, it must show that its action is necessary and that the decision takes into account factors such as job loss and energy supplies.

It will help States retain the right to regulate hydraulic fracturing within their borders. That makes sense, as I say, because States are the first and best responders to oil and gas issues and have been successful in developing oil and gas production regulations.

It would also allow a State to regulate hydraulic fracturing on Federal lands, such as BLM lands, as I mentioned earlier. In addition, though, the amendment would prohibit new burdensome Federal rules if a State or tribe already has those rules in place.

Again, the effort here is to make sure that we are empowering States to work with their industry and then, in turn, empowering those industries, through regulatory certainty, to help develop our energy future in this country and do it with good, consistent, commonsense regulation that empowers the kind of investment that we want to see for job creation and economic growth.

Finally, the amendment allows for judicial review. It allows a State or tribe to seek redress for an agency's actions in a Federal court located within the State or the District of Columbia. Judicial review is very important in case there is a dispute in terms of what the EPA may require, what the State may require or what the industry feels is fair treatment.

In conclusion, the legislation recognizes that States have a long record of effectively regulating oil and gas development, including hydraulic fracturing, with good environmental stewardship. The measure works to ensure that the rules for hydraulic fracturing are certain, fair, effective, and environmentally sound. These are qualities we expect in good regulation.

As I said at the outset this morning in introducing a number of these amendments, to build the kind of energy plan for the future that we need we have to reduce the regulatory burden and at the same time empower the investment that will help us build the energy infrastructure we need to move energy safely and cost-effectively from where it is produced to where it is consumed in this country.

With that, I look forward to working with both the chairman of our Energy and Natural Resources Committee, who is bringing this legislation forward, and the ranking member in offering these amendments, voting on these and other amendments, and trying to get to the best product we can in terms of strengthening the energy plan for this country.

With that,

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