January 27, 2016

S. 2012 – Energy Policy Modernization Act

Noteworthy

Background: The Energy and Natural Resources Committee reported S. 2012, the Energy Policy Modernization Act, on September 9, 2015, by a bipartisan vote of 18 to 4. The House passed a related bill, H.R. 8, the North American Energy Security and Infrastructure Act, on December 3, 2015, by a vote of 249 to 174.

Floor Situation: On Tuesday, January 26 at 11:00 a.m., the Senate will begin consideration of S. 2012. A bipartisan amendment in the nature of a substitute that ensures the bill is not subject to budget-related points of order will be adopted. This manager’s amendment will serve as the base text for purposes of drafting all floor amendments.

Executive Summary: The bill, as amended by the manager’s amendment, provides for the comprehensive modernization of U.S. energy policies relating to efficiency, infrastructure, supply, accountability, and conservation.   

Overview of the Issue

Over the past decade, the U.S. has rapidly reemerged as a global energy superpower. Yet updates to federal energy policies have not kept pace. Washington’s outdated energy laws, regulations, and programs increasingly stand in the way of America’s wide-ranging opportunities to optimize the production, generation, transmission, marketing, consumption, and stewardship of its abundant energy and natural resources. The bill provides for the comprehensive modernization of U.S. energy policies to reflect new market realities. The bill aims to support affordable and reliable energy, generate jobs and economic growth, streamline inefficient regulatory processes, enhance energy security and geopolitical opportunity, and promote natural resource conservation and environmental stewardship.        

Considerations on the Bill

The bill, as amended by the manager’s amendment, consists of five titles:

  • Title I deals with energy efficiency in homes, buildings, vehicles and other products.
  • Title II deals with energy infrastructure, including cybersecurity, the Strategic Petroleum Reserve, and liquefied natural gas export facilities.
  • Title III deals with energy and natural resources supply, including renewable and fossil fuels, and critical minerals.
  • Title IV deals with accountability, including reforming the Department of Energy’s loan guarantee program, and reauthorizing the Advanced Research Projects Agency – Energy.
  • Title V deals with natural resource conservation, including establishing the National Park Service Critical Maintenance and Revitalization Conservation Fund and permanently reauthorizing the Land and Water Conservation Fund.   

Notable Bill Provisions

TITLE I – EFFICIENCY

Subtitle A – Buildings

Section 1001 – Greater energy efficiency in building codes

This section amends sections 303, 304, and 307 of the Energy Conservation and Production Act, relating to state building energy efficiency codes. Provides enhanced authorities and responsibilities for DOE with regard to energy codes. Does not mandate that states adopt energy codes. 

Directs DOE to encourage and support adoption of building energy codes by states, Indian tribes, and local governments that meet or exceed model building energy codes, and to support state efforts to fully comply with these codes. Requires states and tribes to certify they have reviewed and updated energy provisions of their building codes within two years after a model building energy code is updated.

Requires states and tribes to certify they have achieved, or made significant progress toward, full compliance with the applicable certified code. Requires states and tribes that do not achieve compliance by an applicable deadline to submit a report.

Requires DOE to establish aggregate energy savings targets for commercial and residential buildings to support the updating of model building energy codes. Allows DOE to establish separate targets for commercial and residential buildings. Requires DOE to subject the targets to a small business impact review and return-on-investment analysis.

Requires DOE to provide technical assistance for model building energy code organizations.

Authorizes appropriations of $200 million, to remain available until expended, for use by DOE to:

  • Provide technical assistance to states and tribes regarding updating and implementing residential and commercial building energy codes.
  • Provide incentive funding to states and tribes regarding updating and implementing residential and commercial building energy codes, including increasing and verifying compliance with the codes and training state, tribe, and local building code officials.
  • Provide technical and financial support for the development of “stretch codes” and advanced standards for residential and commercial buildings for use as an option for adoption as a building energy code and as guidelines for energy-efficient building design.

Section 1002 – Demonstration program for conservation improvements

Establishes a demonstration program during which the secretary of Housing and Urban Development may enter into budget-neutral, performance-based agreements that result in a reduction in energy or water costs. Projects shall be carried out at not more than 20,000 multifamily residential units participating in the project-based rental assistance program, the supportive housing for the elderly program, or the supportive housing for persons with disabilities program.

Section 1003 – Coordination of energy retrofitting assistance for schools

Tasks DOE’s Office of Energy Efficiency and Renewable Energy as the lead federal agency for coordinating and disseminating information on existing federal programs and assistance that may be used to help initiate, develop, and finance energy efficiency, renewable energy, and energy retrofitting projects for schools.

Section 1004 – Energy efficiency retrofit pilot program

Establishes a pilot program at DOE to award grants for the purpose of retrofitting nonprofit buildings – including hospitals, youth centers, and faith-based organizations – with energy-efficiency improvements. Limits the grant amount to 50 percent of the energy-efficiency improvement, and no more than $200,000. Requires non-federal cost-sharing of at least 50 percent. Authorizes appropriations of $10 million for each of fiscal years 2016 through 2020.

Section 1007 – Building training and assessment centers

Requires DOE to provide grants to higher education institutions to establish building training and assessment centers to promote energy efficiency and environmental performance in buildings; train engineers, architects, scientists, permitting, and enforcement officials in energy-efficient design and operation; and promote research and development for the use of alternative energy sources and distributed generation to supply heat and power to buildings. Authorizes appropriations of $10 million.

Section 1008 – Career skills training

Requires DOE to provide grants for career skills training programs to help students obtain industry-related certification to install energy efficient building technologies. Establishes the federal share at 50 percent. Authorizes appropriations of $10 million.  

Section 1009 – Energy-efficient and energy-saving information technologies

Requires each federal agency to collaborate with the Office of Management and Budget to develop an implementation strategy to employ energy efficiency through the use of information and communications technologies.

Section 1011 – Energy-efficient data centers

Requires DOE, in consultation with the General Services Administration, to update the Report to Congress on Server and Data Center Energy Efficiency published on August 2, 2007. Requires DOE, in consultation with OMB, to maintain a data center energy practitioner program that helps energy practitioners qualified to evaluate energy usage and efficiency opportunities in data centers to obtain certification, and that establishes an open data initiative for federal data center energy usage data with the purpose of encouraging further data center innovation, optimization and consolidation.  

Section 1012 – Weatherization Assistance Program

Reauthorizes the Weatherization Assistance Program. Authorizes appropriations of $350 million for each of fiscal years 2016 through 2020. Requires DOE to make grants to nonprofit organizations for the purpose of making energy-efficient retrofits to low-income homes. Requires DOE to ensure that each Weatherization Assistance Program retrofit meets minimum efficiency and quality of work standards.

Section 1013 – State energy program

Reauthorizes the state energy program. Authorizes appropriations of $90 million for each of fiscal years 2016 through 2020.

Section 1014 – Smart building acceleration

Requires DOE to establish the Federal Smart Building Program to implement smart building technology and to demonstrate the costs and benefits of smart buildings.

Section 1015 – Repeal of fossil phase-out

Repeals requirement that federal buildings and federal buildings undergoing major renovations phase-out fossil fuel generated energy consumption by 2030.

Section 1017 – Codification of executive order

Codifies executive order requiring each federal agency to reduce building energy intensity by 2.5 percent for each of fiscal years 2016 through 2025.

Section 1020 – Evaluation of potentially duplicative green building programs

Requires DOE to submit to Congress a report that describes federal green building programs, including annual administrative expenses; annual expenditures for services; number of clients served; beneficiaries who received services; number of full-time employees; types of services provided; types of recipients who are intended to benefit; and whether written program goals are available. Requires DOE to submit to Congress a report that includes recommendations on eliminating, consolidating, and preventing duplication of programs. Requires DOE to identify programs specifically authorized by Congress and those programs carried out solely under DOE’s discretionary authority.  

Section 1021 – Energy savings benefits of operational efficiency programs and services

Requires DOE to conduct a study and issue a report that quantifies the potential energy savings of operational efficiency programs and services for commercial, institutional, industrial, and government entities, including federal agencies.

Subtitle B – Appliances

Section 1101 – Extended product system rebate program

Requires DOE to establish a rebate program for expenditures made to replace energy inefficient motors. Limits aggregate rebates for a qualified entity to $25,000 per calendar year. Authorizes total appropriations of $10 million.

Section 1102 – Energy efficient transformer rebate program

Requires DOE to establish a rebate program for expenditures made to replace energy inefficient transformers. Authorizes appropriations of $5 million for each of fiscal years 2016 and 2017. Terminates program on December 31, 2017.

Section 1103 – Standards for certain furnaces

Prohibits DOE from prescribing a final rule amending efficiency standards for residential non-weatherized gas furnaces or mobile home furnaces until an advisory group of stakeholders convened by DOE determines that a nationwide requirement is technically feasible and economically justified.  

Section 1104 – Third-party certification under Energy Star program

Requires the Environmental Protection Agency to revise rules so that third-party certification of consumer, home, and office electronic products is not required for a product to be listed for Energy Star program partners who have complied with all program rules for a period of at least 18 months.

Section 1105 – Energy conservation standards for commercial refrigeration equipment

Postpones effective date of final rule establishing energy conservation standards for commercial refrigeration equipment until January 1, 2020, for equipment meeting certain criteria to allow manufacturers time to redesign their refrigerators to meet requirements from DOE and EPA. 

Subtitle C – Manufacturing

Section 1201 – Manufacturing energy efficiency

Requires DOE to establish the Future of Industry Program requiring industrial research and assessment centers to: (A) coordinate with the National Institute of Standards and Technology’s Manufacturing Extension Partnership Centers; (B) coordinate with DOE’s Building Technologies Program to provide building assessment services to manufacturers; (C) increase partnerships with DOE’s national laboratories; (D) increase partnerships with energy service providers and technology providers; (E) identify opportunities for reducing greenhouse gas emissions; and (F) promote sustainable manufacturing practices for small and medium-sized manufacturers. Funds outreach and coordination activities by industrial research and assessment centers. Establishes a 50 percent federal cost-share for internship programs at businesses that implement industrial research and assessment center recommendations. Expedites applications from small businesses for loans under the Small Business Act to implement industrial research and assessment center recommendations.

Requires DOE to establish the Sustainable Manufacturing Initiative that provides manufacturers with onsite technical assessments to identify opportunities for: (1) maximizing the energy efficiency of industrial processes and cross-cutting systems; (2) preventing pollution and minimizing waste; (3) improving efficient use of water in manufacturing processes; (4) conserving natural resources; and (5) achieving such other goals as DOE deems appropriate.

Subtitle D – Vehicles

Sections 1301 through 1312 – Vehicle Innovation Act of 2015

Requires DOE to conduct research, development, engineering, demonstration, and commercial application activities to substantially reduce or eliminate petroleum use and the emissions of the nation’s passenger and commercial vehicles. The program includes activities in the areas of electric vehicles; batteries; hydrogen vehicles; and natural gas vehicles. When awarding grants under the program, it requires prioritization of technologies that provide the greatest aggregate fuel savings and the greatest increase in U.S. employment.

Requires DOE to conduct research, development, engineering, demonstration, and commercial application of advanced vehicle manufacturing technologies and practices.

Requires DOE to conduct a program of cooperative research, development, demonstration, and commercial application activities on advanced technologies for medium- to heavy-duty commercial, vocational, recreational, and transit vehicles.

Requires DOE to conduct a competitive grant program to demonstrate the integration of multiple advanced technologies on Class 8 truck and trailer platforms. 

Requires DOE to develop standard testing procedures and technologies for evaluating the performance of advanced heavy vehicle technologies. Authorizes DOE to construct heavy-duty truck and bus testing facilities.

Requires DOE to undertake a pilot program of research, development, demonstration, and commercial applications of technologies to improve total machine or system efficiency for non-road mobile equipment, including agricultural, construction, air, and sea port equipment.

Authorizes appropriations for research, development, engineering, demonstration, and commercial application of vehicles and related technologies in the U.S. of $313,567,000 for fiscal year 2016; $326,109,000 for fiscal year 2017; $339,154,000 for fiscal year 2018; $352,720,000 for fiscal year 2019; and $366,829,000 for fiscal year 2020.

Repeals existing authorities made duplicative by the Vehicle Innovation Act, including supporting commercialization of flex-fuel and hybrid vehicles; batteries and other rechargeable energy storage systems, power electronics, and hybrid systems integration; domestic production and sales of efficient hybrid and advanced diesel vehicles and components of those vehicles; and low-cost renewable hydrogen and infrastructure for vehicle propulsion.

TITLE II – INFRASTRUCTURE

Subtitle A – Cybersecurity

Section 2001 -- Cybersecurity

If the president makes a determination that immediate action is necessary to protect the bulk-power system from a cybersecurity threat, DOE is authorized to require, by order and with or without notice, any entity that is registered with the Electric Reliability Organization as an owner, operator, or user of the bulk-power system to take such actions as the secretary determines will best avert or mitigate the cybersecurity threat. Requires adoption of regulations that permit entities subject to an order to seek recovery of prudently incurred costs required to implement actions ordered by DOE. Requires adoption of regulations to protect critical electric infrastructure information.

Section 2002 – Enhanced grid security

Designates DOE as the lead sector-specific agency for cybersecurity for the energy sector. Duties include coordinating with federal agencies; collaborating with other stakeholders; prioritizing and coordinating sector-specific activities; carrying out incident management responsibilities; providing, supporting, or facilitating technical assistance and consultations for the energy sector to identify vulnerabilities and help mitigate incidents; and annually providing sector-specific critical infrastructure information that supports Department of Homeland Security reporting requirements.

Requires DOE to carry out a program to develop advanced cybersecurity applications and technologies for the energy sector to identify and mitigate vulnerabilities and to advance the security of field devices and third-party control systems. Authorizes appropriations of $65 million for each of fiscal years 2017 through 2025.

Requires DOE to carry out a program to establish a cyber testing and mitigation program to identify vulnerabilities of energy sector supply chain products to known threats. Authorizes appropriations of $15 million for each of fiscal years 2017 through 2025.

Authorizes DOE to carry out a program to enhance and periodically test emergency response capabilities and coordination with other federal agencies and private industry; to expand cooperation with intelligence communities for energy sector-related threat collection and analysis; to enhance tools for monitoring the status of the energy sector; to expand industry participation in the Electric Sector Information Sharing and Analysis Center; and to provide technical assistance to small electric utilities for purposes of assessing cyber maturity level. Authorizes appropriations of $10 million for each of fiscal years 2017 through 2025.

Requires DOE to develop an advanced energy security program to secure energy networks, including electric, natural gas, and oil. The program objective is to increase functional preservation of electric grid operations in the face of threats and hazards, including electric magnetic pulse and geomagnetic disturbances. The program includes activities to develop capabilities to identify vulnerabilities and critical components, provide national level modeling to predict impacts from natural or human-made events, conduct research on hardening solutions for critical components of the electric grid, and provide technical assistance to states and other entities for standards and risk analysis. Authorizes appropriations of $10 million for each of fiscal years 2017 through 2025.

Subtitle B – Strategic Petroleum Reserve

Section 2101 – Strategic Petroleum Reserve modernization

Reaffirms the importance of the Strategic Petroleum Reserve and restricts the use of funds raised from any drawdown to purposes directly related to the operation of the reserve or projects that enhance U.S. energy security. Amends definition of “related facility” to include terminals.

Subtitle C – Trade

Section 2201 – Action on applications to export liquefied natural gas

Requires DOE to issue a final decision approving or disapproving any application to export natural gas to countries that do not have free trade agreements with the U.S. no later than 45 days after the Federal Energy Regulatory Commission or the Maritime Administration concludes the required National Environmental Policy Act review of the proposed liquefied natural gas export facility that corresponds with an application to export natural gas.

In the event of civil action over such application, requires the court to order DOE to issue a final decision not later than 30 days after the order of the court if the court finds that DOE has failed to issue a final decision on the application.

Section 2202 – Public disclosure of liquefied natural gas export destinations

Requires DOE to require applicants who receive authorization to export liquefied natural gas to report to DOE the names of one or more countries of destination to which the exported liquefied natural gas is delivered.

Subtitle D – Electricity and Energy Storage

Section 2301 – Grid storage program

Requires DOE to conduct a program of research, development, and demonstration of electric grid energy storage. Authorizes appropriations of $50 million for each of fiscal years 2017 through 2026.

Section 2302 – Electric system grid architecture, scenario development, and modeling

Requires DOE to establish and facilitate a collaborative process to develop model grid architecture and a set of future scenarios for the electric system to examine the impacts of different combinations of resources, including different quantities of distributed energy resources and large-scale, central generation, on the electric grid, while accounting for differences in market structure.

Section 2303 – Technology demonstration on the distribution system

Requires DOE to establish a grant program to carry out projects related to the modernization of the electric grid, including projects that improve the performance and efficiency of the future electric grid; that ensure safe, secure, reliable, and affordable power; that demonstrate secure integration and management of two or more energy resources, including distributed energy generation, combined heat and power, micro-grids, energy storage, electric vehicles, energy efficiency, demand response, and intelligent loads; and that demonstrate secure integration and interoperability of communications and information technologies.

Section 2304 – Hybrid micro-grid systems for isolated and resilient communities

Requires DOE to establish a program to promote the development of hybrid micro-grid systems for isolated communities and micro-grid systems to increase the resilience of critical infrastructure.

Section 2305 – Voluntary pathways

Requires DOE to initiate the development of voluntary pathways for modernizing the electric grid through a collaborative, public-private effort that produces illustrative policy pathways that can be adapted for state and regional applications by regulators and lawmakers.

Section 2306 – Performance metrics for electricity infrastructure providers

Requires DOE to submit a report to Congress that includes an evaluation of the performance of the electric grid and a description of the quantified costs and benefits associated with the changes evaluated under the scenarios developed under section 2302.

Section 2307 – State and regional electricity distribution planning

Requires DOE to partner with states and regional organizations to facilitate the development of state and regional electricity distribution plans by conducting a resource assessment and analysis of future demand and distribution requirements and developing open source tools for state regional planning operations.

Section 2308 – Authorizations of appropriations

Authorizes appropriations to carry out sections 2302 through 2307 of $200 million for each of fiscal years 2017 through 2026.

Section 2309 – Electric transmission infrastructure permitting

Codifies the Interagency Rapid Response Team for Transmission to expedite and improve the permitting process for electric transmission infrastructure on federal land and non-federal land. Tasks the team with improving the timeliness and efficiency of electric transmission infrastructure permitting and facilitating the performance of maintenance and upgrades to electric transmission lines on federal land and non-federal land. Tasks the Council on Environmental Quality with providing a unified point of contact for resolving interagency or intra-agency issues or delays with respect to electric transmission infrastructure permits. Ensures continuity of existing use and occupancy right-of-ways granted across public lands or National Forest System land (including vegetation management agreements, where applicable) for the transmission of electric energy by any federal department or agency by providing for agreements between such federal entities and the secretaries of the interior or agriculture.

Section 2310 – Distributed energy resources and micro-grid systems

Requires transmission organizations to submit to FERC a report that describes, evaluates operational potential of, and identifies barriers to deployment of distributed energy resources and micro-grid systems that are subject to dispatch by the transmission organization.

Section 2311 – Net metering study guidance

Requires DOE to conduct a study of net energy metering, including a cost-benefit assessment. 

Subtitle E – Computing

Section 2401 – Exascale computer research program

Requires DOE to conduct a research program to develop two or more exascale computing machine architectures to promote the mission of DOE. Authorizes appropriations of $272 million for fiscal year 2016; $340 million for fiscal year 2017; and $360 million for fiscal year 2018.

TITLE III – SUPPLY

Subtitle A – Renewables

Section 3001 - Hydropower regulatory improvements

Establishes sense of Congress that hydropower is a renewable resource for purposes of all federal programs and is an essential source of energy in the U.S. Amends definition of “renewable energy” for purposes of the Energy Policy Act of 2005 to include all hydropower, not just new hydroelectric generation capacity achieved from increased efficiency or additions of new capacity at an existing hydroelectric project. Increases minimum amount of electricity generated by renewable energy that the federal government must consume each fiscal year to 15 percent (up from 7.5 percent), which now includes all hydropower.  

Reforms permitting and licensing processes to facilitate hydropower projects. Designates FERC as the lead agency for purposes of coordinating all applicable federal authorizations. Establishes the sense of Congress that all applicable federal authorizations should be issued within three years after completion of an application. Authorizes FERC to refer interagency disputes that delay a federal authorization to the Council on Environmental Quality to ensure timely participation, to ensure a timely decision, to mediate the dispute, or to refer the matter to the president. Improves trial-type hearings regarding disputed issues of material fact with respect to applicable covered measures for license applicants by requiring FERC’s existing administrative law judges to preside. Requires FERC to maintain an official consolidated record of a licensing proceeding.

Requires FERC to establish a voluntary pilot program to study a region-wide approach to hydropower licensing.

Section 3002 - Hydroelectric production incentives and efficiency improvements

Reauthorizes 1.8 cents per kilowatt hour incentive payments for hydroelectric energy generation for ten years. Authorizes appropriations of $10 million for each of fiscal years 2016 through 2025. Authorizes appropriations of $10 million for each of fiscal years 2016 through 2025 for incentive payments up to 10 percent of the costs of capital improvements in hydroelectric facilities directly related to improving their efficiency by at least 3 percent.

Sections 3005 through 3011 – Geothermal energy

Establishes sense of Congress that the Department of Interior shall seek to approve a significant increase in new geothermal energy capacity on public land, and that DOI and the Geological Survey should identify sites capable of producing a total of 50,000 megawatts of geothermal power. Requires the Bureau of Land Management and other federal agencies to identify high-priority areas for new geothermal development and take any actions necessary to facilitate that development.

Facilitates the coproduction of geothermal energy on oil and gas leases. Facilitates the noncompetitive leasing of adjoining areas for the production of geothermal energy.

Establishes a program of research, development, and demonstration for geothermal heat pumps and the direct use of geothermal energy. Provides grants to state and local governments, higher education institutions, nonprofit entities, utilities, and for-profit companies to promote the development of geothermal heat pumps and the direct use of geothermal energy. Authorizes appropriations of $65 million for fiscal year 2017 and $75 million for each of fiscal years 2018 through 2021.

Section 3012 – Geothermal exploration test projects

Provides a categorical exclusion from the requirements of an environmental assessment or an environmental impact statement under the National Environmental Policy Act for eligible geothermal resource exploration operations.

Section 3016 – Marine and hydrokinetic renewable energy technologies

Authorizes appropriations for marine and hydrokinetic renewable energy technology research of $55 million for each of fiscal years 2017 and 2018 and $60 million for each of fiscal years 2019 through 2021.

Section 3017 – Bio-power

Requires the Department of Agriculture and DOE to establish a grant program to support innovation and market development in woody biomass heat and bio-power. Limits amount of a grant. Establishes a 50 percent federal cost share. Requires USDA to establish a low-interest loan program to support construction of residential, commercial, institutional, and industrial woody biomass heat and bio-power systems. Authorizes appropriations of $50 million.

Makes residential, commercial, institutional, and industrial woody biomass energy systems eligible to receive loans under the Energy Efficiency and Conservation Loan program of the Rural Electrification Act of 1936.

Subtitle B – Oil and Gas

Section 3101 – Amendments to the Methane Hydrate Research and Development Act of 2000

Authorizes DOE to award grants to, or enter into contracts or cooperative agreements with, institutions to, among other things, drill a test well and perform a long-term hydrate production test on land in the U.S. Arctic region within four years and in a marine environment within 10 years, and drill a full-scale production test well at a location to be determined by DOE. Requires DOE to conduct a long-term environmental monitoring and research program to study the effects of production from methane hydrate reservoirs. Authorizes appropriations of $35 million for each of fiscal years 2017 through 2021. 

Section 3102 – Liquefied natural gas study

Requires DOE to conduct a study of the state, regional, and national implications of exporting liquefied natural gas with respect to consumers and the economy. The study shall include an analysis of the economic impact that exporting liquefied natural gas will have in regions that currently import liquefied natural gas; job creation in the manufacturing sector; and such other issues as DOE considers appropriate. The study shall be submitted to Congress within one year.

Section 3103 – FERC process coordination with respect to regulatory approval of gas projects

Designates FERC as the lead agency for purposes of coordinating all applicable federal authorizations and compliance with the National Environmental Policy Act with respect to an application for authorization or a certificate of public convenience and necessity relating to gas transportation. Establishes the sense of Congress that all federal authorizations required for a project or facility should be issued within 90 days after completion of an application. Authorizes FERC to refer interagency disputes that delay or unreasonably deny a federal authorization to the Council on Environmental Quality to ensure timely participation, to ensure a timely decision, to mediate the dispute, or to refer the matter to the president. Requires agency deference, to the maximum extent authorized by law, to the scope of environmental review that FERC determines to be appropriate.

Section 3104 – Pilot program

Requires the Department of the Interior to establish a pilot program to streamline the review and approval of applications for permits to drill in one state with at least 2,000 oil and gas drilling spacing units and in which the federal government does not own or hold in trust more than 25 percent of subsurface minerals or any surface land. Authorizes the secretary to fund up to 10 full-time equivalents at appropriate field offices.

Subtitle C – Helium

Section 3201 – Rights to helium

Requires expedited completion of applicable environmental reviews under the National Environmental Policy Act for helium-related projects. Repeals the federal government’s reservation of the ownership of and the right to extract helium from all gas produced from leased land. Provides the lessee with the right of first refusal to engage in exploration for, and development and production of, helium on leased land.

Subtitle D – Critical Minerals

Section 3301 through 3312 – Critical minerals

Requires the Department of the Interior to publish methodology for determining which minerals qualify as critical minerals based on an assessment of whether the minerals are: (1) subject to potential supply restrictions (including restrictions associated with foreign political risk, abrupt demand growth, military conflict, violent unrest, anti-competitive or protectionist behaviors, and other risks throughout the supply chain); and (2) important in use (including energy technology-, defense-, currency-, agriculture-, consumer electronics-, and health care-related applications). Requires DOI to publish an initial list of minerals and elements designated as critical pursuant to the methodology within one year. Requires DOI to update the methodology and designations at least every three years.

Requires DOI to complete within four years a comprehensive national assessment of each critical mineral that: (1) identifies and quantifies known critical mineral resources; and (2) provides a quantitative and qualitative assessment of undiscovered critical mineral resources throughout the U.S., including probability estimates of tonnage and grade.

Requires DOI to submit a report to Congress within two years describing the status of geological surveying of federal land for any mineral commodity: (1) for which the U.S. was dependent on a foreign country for more than 25 percent of the U.S. supply; but (2) that is not designated as a critical mineral.

Requires DOI and USDA to complete federal permitting and review processes with respect to critical mineral production on federal land with maximum efficiency and effectiveness, while supporting vital economic growth, by taking certain streamlining measures. Requires DOI and USDA to develop and publish a performance metric for evaluating progress made by the executive branch to expedite permitting of activities that will increase exploration for, and development of, domestic critical minerals, while maintaining environmental standards.

Requires the Small Business Administration to submit a report to Congress that assesses the performance of federal agencies with respect to: (1) complying with the Regulatory Flexibility Act in promulgating regulations applicable to the critical minerals industry; and (2) performing an analysis of regulations applicable to the critical minerals industry that may be outmoded, inefficient, duplicative, or excessively burdensome.

Requires DOE to conduct a program of research and development to promote the efficient production, use, and recycling of critical minerals throughout the supply chain, and to develop alternatives to critical minerals that do not occur in significant abundance in the U.S.

Requires the Department of Labor to submit to Congress a study of the domestic availability of technically trained personnel necessary for critical mineral exploration, development, assessment, production, manufacturing, recycling, analysis, forecasting, education, and research. Requires DOE and DOL to jointly conduct a competitive grant program to provide four-year grants to higher education institutions to support critical mineral-related education, training, workforce development, innovation, and research.

Authorizes appropriations of $5 million for each of fiscal years 2017 through 2026 for the National Geological and Geophysical Data Preservation Program. Authorizes appropriations of $50 million for each of fiscal years 2017 through 2026 to carry out this subtitle. 

Subtitle E – Coal

Section 3401 – Fossil energy

Includes improving the conversion, use, and storage of carbon dioxide produced from fossil fuels as an objective of DOE’s research, development, demonstration, and commercial application programs in fossil energy.

Section 3402 – Establishment of coal technology program

Repeals the Energy Policy Act of 2005’s coal and related technologies program; the carbon capture and sequestration research, development, and demonstration program; and the Clean Coal Power Initiative. Requires DOE to establish a coal technology program to ensure the continued use of America’s abundant, domestic coal resources through development of technologies that significantly improve the efficiency, effectiveness, costs, and environmental performance of coal use. Authorizes appropriations of $610 million for each of fiscal years 2017 through 2020; and $560 million for fiscal year 2021.

Subtitle F – Nuclear

Section 3501 – Report on fusion and fission reactor prototypes

Requires DOE to submit a report to Congress assessing the capability of DOE to host privately funded fusion and fission reactor prototypes up to 20 megawatts thermal output and related demonstration facilities at sites owned by DOE.

Subtitle G – Workforce Development

Section 3601 – 21st Century Energy Workforce Advisory Board

Requires DOE to establish the 21st Century Energy Workforce Advisory Board to develop a strategy for the support and development of a skilled energy workforce. Requires DOE to establish a clearinghouse to maintain and update information and resources on training and workforce development programs for energy and manufacturing jobs, and to act as a resource for schools and organizations that would like to develop and implement training programs. Sunsets the board on September 30, 2020.

Section 3602 – Energy workforce pilot grant program

Requires DOE to establish a pilot program to award grants on a competitive basis to eligible entities for job training programs that lead to an industry-recognized credential. Limits grant amount to $1 million for any one year. Limits federal cost share of a job training and education program using a grant to no more than 65 percent. Authorizes appropriations of $20 million for each of fiscal years 2017 through 2020.

Subtitle H – Recycling

Section 3701 – Recycled carbon fiber

Requires DOE to conduct a study on the technology of recycled carbon fiber and production waste carbon fiber, and the potential lifecycle energy savings and economic impact of recycled carbon fiber.  Requires DOE to develop a carbon fiber recycling demonstration project. Authorizes appropriations of $10 million.

Section 3702 – Recovery and conversion of non-recycled mixed plastics

Requires DOE to conduct a study to determine the manner in which the U.S. can make progress toward a cost-effective system through which pyrolysis, gasification, and other innovative technologies such as engineered fuels are used to convert plastics, alone or in combination with other municipal solid waste or secondary materials, into materials that can be used to generate electric energy or fuels or as chemical feedstocks. Authorizes use of unobligated funds of DOE to carry out the study.

TITLE IV – ACCOUNTABILITY

Subtitle A – Loan Programs

Section 4001 – Incentives for innovative technologies

Prohibits DOE from making a loan guarantee for an innovative technology that reduces air pollutants or anthropogenic emissions of greenhouse gases unless DOE has received from the borrower not less than 25 percent of the cost of the guarantee starting in fiscal year 2020. Clarifies that the borrower’s obligation to repay a loan that receives such a loan guarantee from DOE shall not at any time be subordinate to other financing, including after any reorganization, restructuring, or termination of the obligation.

Provides loan guarantee applicants with a mechanism to request and receive periodic updates on the status of a loan guarantee application under section 1703 of the Energy Policy Act of 2005, including a summary of any factors that are delaying a final decision and an estimate of when the review will be completed.

Repeals the temporary program for rapid deployment of renewable energy and electric power transmission projects under section 1705 of the Energy Policy Act of 2005. Rescinds unobligated amounts.

Section 4002 – State loan eligibility

Clarifies eligibility for state energy financing institutions and establishes terms and conditions for their participation in the Section 1703 loan guarantee program. Clarifies that DOE may not use amounts appropriated prior to enactment of this act for the cost of loan guarantees to state energy financing institutions.

Section 4003 – GAO study of fossil loan guarantee incentive program

Requires the comptroller general to conduct a study on the effectiveness of the advanced fossil loan guarantee incentive program and other incentive programs for advanced fossil energy at DOE. Among other things, the study must evaluate the impact and costs of implementing the recommendations described in the January 2015 National Coal Council report entitled “Fossil Forward: Revitalizing CCS, Bringing Scale and Speed to CCS Deployment.”

Subtitle B – Energy-Water Nexus

Section 4101 – Nexus of energy and water for sustainability

Requires DOE and the DOI to establish the joint Nexus of Energy and Water Sustainability Office at DOE and the Interagency Coordination Committee on the Nexus of Energy and Water for Sustainability to serve as a forum for developing common federal goals and plans on energy-water nexus research, development, and demonstration activities.

Section 4102 – Smart energy and water efficiency pilot program

Requires DOE to establish a smart energy and water efficiency pilot program to award between three and five grants to eligible utilities, municipalities, water districts, Indian tribes, and Alaska Native villages to demonstrate innovative technology-based solutions that increase energy efficiency of water, wastewater, and water reuse systems. Authorizes appropriations of $15 million.

Subtitle C – Innovation

Section 4201 – America Competes programs

Authorizes appropriations for DOE’s Office of Science to carry out research, development, demonstration, and commercial application activities, including basic energy sciences, advanced scientific and computing research, biological and environmental research, fusion energy sciences, high energy physics, nuclear physics, research analysis, and infrastructure support. Authorizations are: $5.271 billion for fiscal year 2016; $5.485 billion for fiscal year 2017; $5.704 billion for fiscal year 2018; $5.932 billion for fiscal year 2019; and $6.178 billion for fiscal year 2020.

Authorizes appropriations for DOE’s Advanced Research Projects Agency – Energy of: $291.2 million for fiscal year 2016; $303.6 million for fiscal year 2017; $314.7 million for fiscal year 2018; $327.3 million for fiscal year 2019; and $340.6 million for fiscal year 2020.

Subtitle D – Grid Reliability

Section 4301 – Bulk-power system reliability impact statement

Requires regional entities to submit a report to Congress every three years that describes the state of and prospects for the reliability of electricity within the geographic area covered by the regional entity, and the most significant risks to the reliability of the bulk-power system that might arise or need to be monitored within the geographic area covered by the regional entity, including risks from proposed or final federal regulations.

Requires FERC to solicit from any applicable regional entity a reliability impact statement for any proposed major federal rule that may significantly affect the reliable operation of the bulk-power system. Authorizes regional entities to voluntarily prepare a reliability impact statement for any proposed major federal rule that the regional entity determines would significantly affect the reliable operation of the bulk-power system.

Section 4302 – Report by transmission organizations on diversity of supply

Requires a transmission organization to file with FERC a report that describes available electric generating capacity resources; identifies operational and economic risks of, and projected future needs for, available electric capacity resources; and assesses whether market rules of the transmission organization produce meaningful price signals, reduce uncertainty or instability, promote transparency and communication, and support a diverse generation portfolio.

Subtitle E – Management

Section 4401 – Federal land management

Authorizes DOI to establish a “cadastre,” or computerized inventory, of buildings, land, and other real property, including associated infrastructure like roads, utility systems, and pipelines, collected from surveys, maps, charts, and inventories, that will be stored as digital data. Authorizes the secretary to enter into discussions with other federal agencies to utilize the data inventory system to track their holdings. Authorizes development of cost-sharing agreements so that states, local governments, and Indian tribes may also utilize the inventory system. Clarifies that the provision does not require any new appraisals or assessments of federal assets for any purpose.  

Section 4403 – State oversight of oil and gas programs

Requires DOI to establish a program through which BLM and a state, upon the request of the governor, can enter into a memorandum of understanding to consider the costs and benefits of creating consistent rules and processes governing oil and gas production activities on federal lands in the state.  

Subtitle G – Affordability

Section 4601 – E-prize competition pilot program

Establishes an e-prize competition or challenge pilot program to broadly implement sustainable community and regional energy solutions that seek to reduce energy costs through increased efficiency, conservation, and technology innovation in high-cost regions. Authorizes appropriations of $10 million.

Subtitle H – Code maintenance

Section 4701 through 4739 – Code maintenance

Repeals outdated, redundant, and unnecessary existing DOE authorities.

TITLE V – CONSERVATION REAUTHORIZATION

Section 5001 – National Park Service Maintenance and Revitalization Conservation Fund

Establishes the National Park Service Critical Maintenance and Revitalization Conservation Fund for high-priority deferred maintenance needs of the National Park Service that support critical infrastructure and visitor services. Prohibits use of funds for land acquisition. Directs deposits of $150 million each fiscal year into the fund from revenues due and payable to the U.S. from rentals, royalties, and other sums flowing from oil and gas leases on the outer Continental Shelf.

Section 5002 – Land and Water Conservation Fund

Permanently reauthorizes the Land and Water Conservation Fund. Of the appropriations from the fund, allocates not less than 40 percent collectively for federal purposes; not less than 40 percent collectively for financial assistance to the states, the Forest Legacy Program, cooperative endangered species grants, and the American Battlefield Protection Program; and not less than 1.5 percent or $10 million, whichever is greater, for projects that secure recreational public access to federal public land for hunting, fishing, or other recreational purposes. Requires the DOI and USDA to consider using the fund for the acquisition of conservation easements and other similar interests in land.

Section 5002 – Historic Preservation Fund

Permanently reauthorizes the Historic Preservation Fund. Directs deposits of $150 million each fiscal year into the fund from revenues due and payable to the U.S. from rentals, royalties, and other sums flowing from oil and gas leases on the outer Continental Shelf.

Administration Position

The administration has not issued a Statement of Administration Policy at this time.

Cost

CBO has not issued a cost estimate at this time. The Energy and Natural Resources Committee has been advised that the amendment in the nature of a substitute to S. 2012 would not be subject to any budget-related points of order. 

Amendments

The amendment situation is unclear at this time. The manager’s amendment will serve as the base text for purposes of drafting all floor amendments. Members are advised to file their amendments as soon as possible.