In a surprising turnabout, Sen. Joe Manchin of West Virginia announced last week he has struck a deal with Senate Majority Leader Chuck Schumer on a package of tax hikes and energy subsidies. Unfortunately, this proposal, which appears to be designed to game the Senate’s reconciliation process to pass spending bills, departs from recent congressional successes that leveraged bipartisan compromise to produce meaningful progress on energy and regulatory reform.
The bill will also raise taxes on businesses already reeling from historically high costs on goods and materials, and vague promises that the bill will be followed by permit reform later this winter (when the Senate’s legislative agenda is already overcrowded) raise the question: Why not just work across the aisle now, given how many Republicans have energy and regulatory reform priorities of their own?
Over the past few years, Congress has quietly enacted some very significant energy and permit streamlining policies, thanks to buy-in like this from Republicans in the U.S. House and Senate. In 2020, the defense bill included major provisions to support American leadership in the nuclear industry, including support for the next generation of safe and effective advanced reactor designs.
A year-end spending bill also included support for carbon capture (which the U.S. Department of Energy has said must be part of the energy picture to achieve decarbonization goals) and a phasedown in the use of hydrofluorocarbons, a potent greenhouse gas.
Recently, President Biden signed into law the bipartisan infrastructure bill, which not only included billions for bridges, highways, clean water and broadband for Pennsylvania and other states, but codified significant permitting reforms to federal environmental reviews. These reforms to cut red tape were a Trump administration policy that have become law with the signature of a Democratic president.
Legislators on both sides of the aisle in Washington have recognized that addressing the challenges of fighting climate change while ensuring abundant, affordable energy will only happen when policy promotes innovation and building new projects in the United States. The non-partisan policy think tank Common Good estimates permitting delays on energy projects costs the nation trillions in public health costs, and the Property and Environment Research Center has pointed to slow federal reviews of forest management as a contributor to wildfires plaguing the Mountain West.
Meaningful, durable policy to facilitate continued progress on climate change and affordable energy will only come when Congress functions the way it should — with bargaining and accommodation that produces compromises. Environmental activist groups who champion energy policies that offer no concession to the interests of the party that controls half the seats in the Senate shouldn’t be surprised when none of them are interested in supporting a Green New Deal.
The Schumer-Manchin bill ignores the priorities of leaders like Pennsylvania’s Sen. Pat Toomey, who has been willing to partner with Manchin in the past and has openly supported reforms to ethanol mandates (which would lower costs at the pump and the grocery store). Republican senators from the Mountain West are championing streamlining domestic mining operations to bolster American production of critical minerals and to speed permitting for hydropower. Senators from the Gulf are on record advocating for faster licensing of oil and gas pipelines and the LNG export infrastructure needed to deliver the energy Ukraine and Europe are pleading for.
Ignoring the opportunity to include reforms like these in a bipartisan bill is a huge missed opportunity, especially when instead of meeting with these senators from key energy states like Pennsylvania, the president jetted off to Saudia Arabia to push for more oil production.
Here at home, our companies are leading the charge to meet the energy needs of the world, now and into the future. But our companies will need policies that support domestic production and transportation of fuels like oil and gas that will remain heavily in demand even in carbon-constrained scenarios, while also providing more certainty around building new energy projects, including solar, hydrogen and carbon capture. State policy must also ensure that facilities and homeowners have access to the energy resource that best suits their needs.
Even through a dramatic energy transition, one where since 2005 Pennsylvania reduced greenhouse gasses more than any state but Ohio, our state has remained the nation’s largest exporter of power thanks to energy choice and competitive markets. Our state’s energy leadership is a big reason why our grid is not facing blackout risks like much of the rest of the country. It’s imperative we ensure the regional electricity markets, headquartered in at PJM outside of Philadelphia, continue to function and reward power plants who can deliver power when it is needed most.
Despite a very polarized political environment, there has been quiet but major progress on permit reform and emissions reductions thanks to bipartisanship in Congress — so much so that the world is no longer on track for the worst climate change scenarios. Bipartisanship in Harrisburg also recently produced significant tax reform that will expand opportunity for working families and help combat inflation. Working across the aisle, leaders of both parties enacted the most significant improvement in improving Pennsylvania’s competitive position in a generation. Raising taxes at the federal level will erase this important progress.
As these recent policy wins illustrate, the best way to improve opportunity in Pennsylvania, meet the challenges of climate change, make it easier to build again, and provide durable energy policy is through bipartisan compromise that leverages private sector leadership. The legislation on offer — the promise of a slightly faster permit tomorrow for a barrel of pork today, not to mention higher taxes on business — is simply the wrong approach for our state and country.
Kevin Sunday is director of government affairs for the Pennsylvania Chamber of Business and Industry.Author: Kevin Sunday
Publication: Trib Live