Biden redefining waters – again. Selling infrastructure deal amidst green angst.

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Democrats in Oil Country Worried by Party’s Natural-Gas Agenda
Siohban Hughes, Aaron Zitner, The Wall Street Journal, June 29, 2021

Democratic Party progressives are pushing President Biden to include in his infrastructure agenda stringent measures to address climate change, including policies designed to end the nation’s reliance on natural gas as a fuel source.

The more the progressives succeed, the more moderate Democrats in energy-producing states become vulnerable to losing seats that are crucial to the party’s hold on Congress, current and former House members say.

The White House announced a deal last week with centrist lawmakers in the Senate on a roughly $1 trillion package focused on traditional infrastructure such as roads and bridges. On a separate track, Democrats are advancing a second bill—without Republican input—that among other goals aims to eliminate greenhouse-gas emissions from electric power generation by 2035.

The Democrats have a similar target of 2050 for other emissions sources, including factories, trucks, automobiles and homes. That is a political headache for moderates such as Rep. Lizzie Fletcher (D., Texas), who in 2018 flipped a Republican-held House seat. Ms. Fletcher’s Houston-area House district ranks second in the nation for employment tied to the oil and gas industries, according to the American Petroleum Institute.

“Gas is a part of our energy mix, “said Ms. Fletcher. She has overcome Republican attack ads portraying her as a problem for the natural-gas industry with a message that contrasts with that of the rest of her party: “I think it will be a part of our energy mix well into the future.”

Energy policy is high on the list of issues creating strife among Democrats, along with other themes such as universal healthcare and police reform. Energy would be at the center of the second, all-Democrat infrastructure bill, which would require support from centrists—including Sen. Joe Manchin, who hails from West Virginia, a fracking state—given the Democrats’ narrow 220-211 majority in the House and the evenly divided Senate.

Some moderates are distancing themselves from the progressive push to increase regulation of natural gas extraction. In January, four Texas House Democrats wrote to Mr. Biden asking him to abandon an executive order suspending new oil and gas leases on federal public lands and waters.

Along with Ms. Fletcher, the letter was signed by Reps. Vicente Gonzalez, Henry Cuellar, and Marc Veasey, who said Mr. Biden’s policy “would have far-reaching negative consequences,’’ including the “near-term loss of potentially one million jobs.’’

Texas is the nation’s top producer of natural gas, according to U.S. government statistics, and gas production is a key economic driver in the country as a whole. A fracking boom in recent decades enabled the U.S. to tap into vast new sources of domestic energy. Gas displaced coal in 2016 as the biggest source of U.S. electricity and helped the U.S. become a net fuel exporter for the first time since the 1950s.

Natural gas not only fuels power grids but is used in factories and homes by businesses and consumers alike. Revenues from natural gas production contribute to federal, state and local government budgets. And gas industry jobs pay about twice as much as the U.S. average.

The oil and gas industries are big employers in several competitive House districts that Democrats won or lost by narrow margins in 2020. They include the Texas districts represented by Ms. Fletcher and Mr. Gonzalez, both of whom won re-election by about 3 percentage points.

Those districts rank among the top 15 of all congressional districts for employment tied either directly or indirectly to the oil and gas industries as of 2019, data from the American Petroleum Institute show. So do two House districts that Democrats picked up in 2018 only to lose in 2020, in New Mexico and Oklahoma.

“Texas voters get pretty anxious when they start thinking that their wages are going to go down,” said Rep. Filemon Vela (D., Texas), who isn’t running for re-election next year.

“There’s no guarantee,” Ms. Vela said. “Nobody’s told them, ‘We’ve got a new job for you. It’s going to pay as much as you’re making now.’”

For years, natural gas escaped the scrutiny directed at oil and coal because it released half as much carbon-dioxide as coal when burned for electricity. When investor T. Boone Pickens, a Republican, touted gas, his pitch resonated with Democrats. “I’ve been converted,” said former Senate Majority Leader Harry Reid (D., Nev.) in 2009. “I now belong to the Pickens church.”

Scientists later determined that pipeline leaks of methane, a large component of natural gas, wiped out much of its climate advantages, given that methane is more than 25 times as potent as carbon dioxide in trapping gas in the atmosphere. The Obama administration sought to make gas more climate-friendly through regulation aimed at controlling methane leaks. After the Trump administration reversed those efforts, the Senate and House reinstated the rules in a measure that Biden is soon expected to sign into law.

The House Energy and Commerce Committee has drafted legislation that treats gas as a clean energy so long as its emissions can be used, captured or sequestered. But the industry has struggled to commercialize the technology needed to capture them. Many Democrats now say the goal should be to switch away from natural gas entirely rather than invest new money in gas infrastructure that may propagate emissions for decades.

Senate Majority Leader Chuck Schumer (D., N.Y.) is pushing measures to provide incentives to reduce electricity emissions 80 percent by 2030. That is consistent with Mr. Biden’s jobs plan, which calls for 100% carbon-free electricity by 2035.

“You’re producing carbon dioxide, so you want to do everything you can to have as fast a transition as possible off of natural gas,” said Sen. Jeff Merkley (D., Ore.), who says he refuses to back any infrastructure package that lacks robust measures to respond to climate change.

Senate Minority Leader Mitch McConnell (R., Ky.) saw political opportunity in a similar dynamic a decade ago, when he and his Republican colleagues hammered Democrats for “waging a war” on coal, an industry Democratic administrations had targeted as uniquely dangerous to the environment. The attacks helped Republicans retake the Senate in 2014 and changed the U.S. political map.

In 2005, the heart of Appalachian coal country was dotted with Democratic-leaning districts. Now, those same areas, cutting through states like Pennsylvania or Ohio, have turned Republican as coal miners blamed job losses on Obama-era policies. More than a dozen House seats in the region that were held by Democrats in 2005 are held by Republicans today.

Former Democratic Rep. Nick Rahall of West Virginia lost his seat in 2010 when the industry blamed him for not fighting harder against legislation to combat climate change. “If we ignore these people,” Mr. Rahall said, “we will never win states in the future like Pennsylvania, West Virginia, Ohio, even Indiana, Illinois.”

The 2020 elections showed the vulnerability that some energy-state Democrats feel from the perception that their party isn’t supportive of the industry. House candidates in Texas, New Mexico, Oklahoma and Pennsylvania told voters that they were independent from their party on energy policy and would support energy extraction.

“If Washington or members of my own party try to ban fracking,” said Xochitl Torres Small, a Democrat from New Mexico, in a 2020 television ad seeking re-election, “they’ll have to come through me.’’

Ms. Torres Small lost her 2020 re-election bid after a single term.


Oil firms as demand hopes outweigh rise of COVID-19 variant
Noah Browning, Reuters, June 29, 2021

  • Market broadly expects COVID-19 vaccines to bolster oil demand
  • Delta variant prompts new travel curbs
  • OPEC+ to meet on July 1 to discuss output increase

MELBOURNE, June 29 (Reuters) – Oil prices rose on Tuesday as broad hopes for a demand recovery persisted despite new outbreaks of the highly contagious Delta variant of the coronavirus prompting fresh mobility curbs worldwide.

Brent crude futures were up 50 cents, or 0.7%, at $75.18 a barrel by 1400 GMT, having slumped by 2% on Monday.

U.S. West Texas Intermediate (WTI) crude futures rose 55 cents, or 0.8%, to $73.46 after a 1.5% retreat on Monday.

“From a global perspective, there are seemingly growing concerns over the increase in the COVID-19 Delta variant,” said StoneX analyst Kevin Solomon.

“The market has grown relatively immune to COVID-19 developments, but if lockdowns occur in larger demand centers in Asia, we may see the market’s nonchalance abate.”

Spain and Portugal, favorite summer holiday destinations for Europeans, imposed new restrictions on unvaccinated Britons on Monday, while Australians also faced tighter curbs owing to flare-ups of the virus across the country. read more

However, the market still expects the rollout of vaccination programs to brighten the demand outlook, analysts said.

“The narrative of the past few months has not changed: the war against the virus is being gradually won, the global economy and oil demand are recovering,” said PVM Oil analyst Tamas Varga.

“Oil supply is being effectively managed. Therefore, dips are probably viewed by ardent bulls as attractive buying opportunities.”

The virus flare-up comes as the Organization of the Petroleum Exporting Countries (OPEC), Russia and allies, together known as OPEC+, are set to meet on July 1 to discuss easing their supply curbs.

OPEC’s demand forecasts show that in the fourth quarter global oil supply will fall short of demand by 2.2 million barrels per day (bpd), giving the producers some room to agree to add output. read more

Analysts expect OPEC+ to step up supply in August because the market has tightened on strong growth in fuel demand in the United States and China, the world’s two biggest oil consumers.

Investors will be looking to the latest U.S. inventory data for cues on the demand outlook. Crude stocks are likely to have extended their fall for a sixth straight week while gasoline stocks are also expected to have declined, a preliminary Reuters poll showed.


FERC repeats it cannot assess gas project’s climate impact in expanded review
Corey Paul, S & P Global Platts, June 28, 2021

The US Federal Energy Regulatory Commission has released the draft version of an additional climate review of a pending Columbia Gulf Transmission pipeline project in Louisiana, finding once more that agency staff could not draw conclusions about the significance of natural gas projects’ contributions to climate change.

The pipeline developer’s eight-mile, 725 MMcf/d East Lateral XPress Project is one of five pending gas projects that received a May 27 notice from FERC, saying the regulator planned to perform additional environmental assessments of their potential contributions to climate change. The draft environmental impact statement issued by FERC on June 25 marked the third draft review issued for projects on track to receive the additional consideration of climate change impacts (CP20-527).

The conclusions reached by FERC staff are similar in the three draft reviews released so far, underscoring the uncertainty for developers of gas projects as the regulator develops its approach to assessing climate change impacts.

“Commission staff conclude that construction and operation of the project would not result in significant environmental impacts, with the exception of climate change impacts, where FERC staff is unable to determine significance,” the draft review for the East Lateral XPress Project said.

FERC Chairman Richard Glick has defended the added climate reviews, saying they will strengthen the legal durability of permitting decisions and that it remains up to commissioners to work out how to determine the significance of projects’ contributions to global warming. Glick has also said the commission would analyze climate impacts of pipeline projects on a case-by-case basis while it prepared a potential update to the agency’s decades-old policy for permitting pipelines.

“From my perspective, I do see the analyses that are going to come down from the environmental impact statements as potentially helping the commissioners, including myself, determine whether the emissions associated with those projects are significant,” Glick told reporters June 17. “In my opinion, we can make that analysis, we should make that analysis, and the courts have told us we have to do that analysis.”

Each of the five projects being subjected to the expanded reviews already received less-extensive environmental assessments from FERC. Each of the projects had also been protested.

The recommendations on assessing climate could evolve by the time final environmental impacts for the projects are finished, and Glick said he would be “comfortable going forward” with decisions on certificate applications once they are. FERC has said it plans to release final environmental impact statements in the fall and that the expanded reviews would build off the environmental assessments that had already been completed.

Columbia Gulf, a subsidiary of TC Energy, filed an application at FERC for the East Lateral Xpress Project in September 2020. The project would add 183,000 Dt/d of incremental gas transportation capacity and feed Venture Global LNG’s proposed Plaquemines LNG export terminal south of New Orleans. Combined with existing capacity, the project would allow for open access firm transportation service of up to 725,000 Dt/d on the East lateral. The Plaquemines LNG project has not yet been commercially sanctioned by Venture Global.

The previous two projects to receive the expanded climate reviews were Iroquois Gas Transmission System’s 125 MMcf/d Enhancement by Compression Project in Connecticut and New York (CP20-48) and Adelphia Gateway’s Marcus Hook Electric Compression Project, proposed under a blanket certificate in Pennsylvania (CP21-14).

The remaining two gas projects that received notices on May 27 that they should expect added environmental impact statements were TC Energy’s 495 MMcf/d North Baja XPress project in Arizona and California (CP20-27) and Tennessee Gas Pipeline’s 115 MMcf/d East 300 Upgrade Project in New Jersey and Pennsylvania (CP20-493). The FERC notices indicated that the draft environmental impact statements would be issued in June or July.


Biden seeks federal mining law overhaul
Shane Lasley, North of 60 Mining News, June 24,2 02

From reinstating the Roadless Rule in the Tongass Forest to replacing the General Mining Law of 1872, federal regulations being proposed by President Joe Biden threaten to rain on a parade of strong metals prices, growing demand for critical minerals, and robust investments into mineral exploration and mining across Alaska.

“We recommend Congress develop legislation to replace outdated mining laws including the General Mining Law (GML) of 1872 governing locatable minerals (including nickel) on federal lands, the Materials Disposal Act of 1947 to dispose of minerals found on federal lands, and the Mineral Land Leasing Act of 1920 among others,” the Biden administration penned in a June 8 statement on battery supply chains. “These should be updated to have stronger environmental standards, up-to-date fiscal reforms, better enforcement, inspection and bonding requirements, and clear reclamation planning requirements.”

While a complete overhaul of these regulations could have wide-reaching effects on how mining companies explore for and produce minerals on federal lands, the Environmental Protection Agency’s plans to once again broaden the definition of “waters of the United States” could have much wider implications for domestic mining across the nation, and especially Alaska.

“For the Biden administration and the EPA to redefine waters is nothing more than a naked power grab for federal rule from Washington, D.C.,” Alaska Gov. Mike Dunleavy commented on EPA’s June 9 announcement of plans to redefine WOTUS.

The mining reform proposals come at a time when the U.S. is going to need much larger quantities of the copper, graphite, rare earths, and other raw materials that Alaska could feed into the reliable and secure electric vehicle and renewable energy supply chains being sought by the White House.

“With the global lithium battery market expected to grow by a factor of five to ten by 2030, it is imperative that the United States invests immediately in scaling up a secure, diversified supply chain for high-capacity batteries here at home,” the White House penned in a June 8 statement on battery supply chains. “That means seizing a critical opportunity to increase domestic battery manufacturing while investing to scale the full lithium battery supply chain, including the sustainable sourcing and processing of the critical minerals used in battery production all the way through to end-of-life battery collection and recycling.”

Redefining waters, again

The reason Dunleavy is concerned about a potentially new and expanded redefinition of WOTUS is that Alaska would be disproportionately affected.

“Nearly half the nation’s water is within Alaska, with over three million lakes, 365,000 miles of rivers, and countless unnavigable glaciers, permafrost, and wetlands,” the Alaska governor penned in a June 12 statement.

According to federal agency surveys, nearly 175 million acres, or more than 43% of the surface area of Alaska, are already considered wetlands.

With a broader definition of what is considered waters of the U.S., it is expected that much larger swaths of the state would fall under the federal Clean Water Act and the burdensome regulatory requirements that come with that. Mining, road construction, pipeline and utility installations, commercial, and even residential construction would be affected by an expanded WOTUS definition.

This has been a hot topic since the Obama administration set out to broaden the definition of U.S. waters in 2014.

Tributaries under a WOTUS rule finalized in 2015 would have included anything that remotely resembled a stream – a bed, bank, and ordinary high-water mark – even arroyos and other gullies where water only flows during infrequent heavy rainfall events. Nearby waters, including wetlands and other watery features within 1,500 feet of navigable waters and sometimes such features within 4,000 feet of high tide or high-water mark of a stream, also would have been covered under the rule.

Even if a small portion of one of these neighboring wet features falls within the guidelines, the entire body falls under the new WOTUS rule, regardless of its connection to downstream waters.

For Alaska – with by far America’s largest coastline and wetlands inventory, along with plentiful rivers, streams, and rivulets – this redefining of U.S. waters would have resulted in vast swaths of state-regulated lands falling under the federal Clean Water Act and the regulatory agencies that administer it.

This 2015 definition, however, was never fully implemented due to federal courts blocking it until a lawsuit brought by nearly 90 parties, including 32 states, was resolved.

Almost immediately after taking office, Trump signed a presidential order to undo Obama’s WOTUS rule.

“The EPA’s so-called ‘Waters of the United States’ rule is one of the worst examples of federal regulation, and it has truly run amok,” the former president said during the February 2017 signing of the order.

Trump’s order resulted in the Navigable Waters Protection Rule, which included a more traditional definition of waters of the U.S. – seas, lakes, rivers, ponds, and wetlands. The 2020 rule expressly excluded features that only contain water in direct response to rainfall, groundwater, many ditches, and prior converted cropland.

Now, the Biden administration has instructed the EPA and Department of the Army to again broaden the definition of WOTUS “to better protect our nation’s vital water resources.”

“We are committed to establishing a durable definition of ‘waters of the United States’ based on Supreme Court precedent and drawing from the lessons learned from the current and previous regulations, as well as input from a wide array of stakeholders, so we can better protect our nation’s waters, foster economic growth, and support thriving communities,” said EPA Administrator Michael Regan.

Upon review of the Navigable Waters Protection Rule, the EPA and Army identified 333 projects that would have previously been subjected to federal Clean Water Act Section 404 permitting but were reverted to state permitting under the Trump rule.

As a result of these findings, EPA said the U.S. Department of Justice has filed a motion requesting the court to remand the Navigable Waters Protection Rule.

“Today’s action reflects the agencies’ intent to initiate a new rulemaking process that restores the protections in place prior to the 2015 WOTUS implementation and anticipates developing a new rule that defines WOTUS and is informed by a robust engagement process as well as the experience of implementing the pre-2015 rule, the Obama-era Clean Water Rule, and the Trump-era Navigable Waters Protection Rule,” EPA penned in its June 9 announcement.

Dunleavy sees the administration’s attempts to undo the Navigable Waters Protection Rule and reinstate WOTUS definitions similar to those established while Vice President Biden was in office as a move that would put vast swaths of Alaska off-limits.

“Make no mistake, the ability of Alaskans to harvest timber, develop oil and gas, mine the critical minerals needed for national security, and the ability to farm and hunt are in danger with this announcement, the Alaska governor wrote. “It would be less insulting to the State of Alaska if the Biden EPA came out transparently with its intent to turn our land into a national park under the management of rangers.”

Roadless rule revisited

While not as far-reaching in its scope, the Biden administration’s plans to “repeal or replace” a Trump-era decision that exempts the Tongass National Forest from the 2001 Roadless Rule has wide implications for mining and other development in Southeast Alaska.

Established by the Clinton administration in 2001, the roadless rule prohibited road building and logging on 58.5 million acres of national forest lands, including more than 9.2 million acres of the Tongass National Forest.

While primarily established to impede logging, the roadless nature of the rule also makes it difficult to carry out other activities.

Considering the 16.8-million-acre Tongass Forest extends for more than 500 miles and covers roughly 80% of the Southeast Alaska Panhandle, the 2001 ruling stifled economic opportunities in that part of the state.

“As Alaskans know well, the roadless rule hinders our ability to responsibly harvest timber, develop minerals, connect communities, or build energy projects to lower costs – including renewable energy projects like hydropower, all of which severely impedes the economy of Southeast,” Sen. Dan Sullivan, R-Alaska said in 2019.

Due to Southeast Alaska’s unique situation, the Bush administration exempted the Tongass from the Roadless Rule in 2003, only to have the conservation measure re-instated by U.S. District Judge John Sedwick in 2011.

Acting on a 2018 state of Alaska petition to establish a more permanent exemption, the Trump administration enacted the Alaska Roadless Rule in October of last year. While this lifted the roadless restrictions on large swaths of the forest, more than 7 million acres remain highly protected. This includes 5.8 million acres of Tongass Forest covered by 19 wilderness areas that are completely off-limits to development with the exemption of some subsistence uses of resources by Alaska Natives.

Stating that “the Trump administration’s decision on the Alaska roadless rule was controversial and did not align with the overwhelming majority of public opinion across the country and among Alaskans,” the U.S. Forest Service recently announced plans to once again reinstate 2001 Roadless Rule protections for the entire Tongass.

Much like WOTUS, Dunleavy sees this proposed move by the Biden administration as an affront to Alaska’s economic wellbeing.

“I am yet again disappointed in the Biden Administration’s latest suppression of Alaska’s economic opportunity,” the governor penned in a June 11 statement. “From tourism to timber, Alaska’s great Tongass National Forest holds much opportunity for Alaskans, but the federal government wishes to see Alaskans suffer at the lack of jobs and prosperity. North to the Future means North to Opportunity, and we will use every tool available to push back on the latest imposition.”

Mining law revamp

The Biden administration’s rule changes that could disproportionately affect mine permitting and development in Alaska comes at a time when the president is making a push to secure America’s supply chains that will require massive inputs of the minerals and metals the 49th State have to offer, especially for the EV and green energy transition envisioned by the White House.

The administration addressed the battery metals and other critical minerals needed in a June report that followed a 100-day assessment of the vulnerabilities to America’s supply chains.

In preparation for the “sustainable sourcing and processing of the critical minerals used in battery production all the way through to end-of-life battery collection and recycling,” the White House is assembling a working group of federal agencies led by the U.S. Department of Interior and supported by the White House Office of Science and Technology Policy to identify sites where critical minerals can be responsibly produced and processed in the U.S.

“This working group will collaborate with the private sector, states, Tribal Nations, and stakeholders – including representatives of labor, impacted communities, and environmental justice leaders – to expand sustainable, responsible critical minerals production and processing in the United States,” according to a statement outlining the administration’s strategy to strengthen supply chains.

The White House, however, wants to ensure that any such critical mineral projects are developed at the highest standards for environmental protections.

To identify gaps in mining-related statutes and regulations that may need to be updated by Congress, the White House is assembling a second federal interagency team composed of staff from DOI, USDA, EPA, and others with expertise in mine permitting and environmental law.

Information collected by this group will be used for an expected push for U.S. lawmakers to establish a whole new mining regulatory framework with strong environmental standards throughout the entire mine life, from development to reclamation.

“We recommend Congress develop legislation to replace outdated mining laws including the General Mining Law (GML) of 1872 governing locatable minerals (including nickel) on federal lands, the Materials Disposal Act of 1947 to dispose of minerals found on federal lands, and the Mineral Land Leasing Act of 1920 among others,” the Biden administration wrote. “These should be updated to have stronger environmental standards, up-to-date fiscal reforms, better enforcement, inspection and bonding requirements, and clear reclamation planning requirements.”

The three laws cited by the White House, however, are not related to the environmental regulations governing mining in the U.S. Instead, they detail how federal lands are prospected and staked (Mining Law of 1872); how minerals on federal lands are sold or leased (Materials Disposal Act of 1947); and royalties on mineral products on federal lands (Mineral Land Leasing Act of 1920).

Much of the federal regulations relating to environmental standards and permitting process for mining projects in the U.S. are found within the Clean Water Act and National Environmental Policy Act.

The NEPA process is both renowned for its strong environmental protections and infamous for the nearly a decade it takes for a large domestic mine in the U.S. to gain permits under its process.

“Mine permitting in the U.S. takes on average seven to 10 years, and often longer,” National Mining Association President and CEO Rich Nolan wrote in a February column for RealClearEnergy. “In Canada and Australia, nations with comparably robust environmental standards, permitting is achieved in just two to three years.”

Earlier this year, the Biden administration indicated that it would look to these jurisdictions with more efficient mine permitting processes to feed much of the needed minerals and metals into American supply chains.

A March 18 Reuters article said, “Washington is increasingly viewing Canada as a kind of ’51st State’ for mineral supply purposes and plans to deepen financial and logistical partnerships with the country’s mining sector over time, according to a U.S. government source.”

Dunleavy questions the logic of this when the administration could further spur America’s economy by focusing on the mineral wealth in the 49th State.

“Alaska has nearly all the minerals & rare earths needed to provide a domestic supply for electric vehicle manufacturers,” the Alaska governor posted on Facebook following the Reuters article. “President Joe Biden, why would you send jobs & investments to Canada, when we can do this in the USA?”

The Biden administration has signaled that despite efforts to redefine WOTUS and prompt Congress to undertake a massive overhaul of U.S. mining law, it would like to see the process for permitting domestic mines feeding minerals and metals into U.S. supply chains streamlined.

As such, the White House is directing the federal mining regulation working group to fully explore “opportunities to reduce time, cost, and risk of permitting without compromising strong environmental and consultation benchmarks.”

This echoes legislation recently introduced by Sen. Lisa Murkowski, R-Alaska – S.1352: A bill to improve the quality and timeliness of federal permitting and review processes with respect to critical mineral production on federal land, and for other purposes.

The legislation introduced by Murkowski in April and cosponsored by ten senators aims to improve the efficiency and effectiveness of the U.S. permitting process by requiring federal agencies to:

• Establish clear timelines for decisions regarding applications, operating plans, leases, licenses, permits, and other use authorizations for critical mineral-related activities on federal land.

• Create clear, quantifiable permitting performance goals and to track progress toward those goals.

• Engage in early collaboration with agencies, stakeholders, project sponsors, and consult with state, local, and tribal governments to resolve concerns.

• Provide clear and logical ways to make the process cost-effective and timely.

“America’s reliance on foreign countries for the production and recycling of our critical minerals is a vulnerability to our national security, a disadvantage to our economy, and a hindrance to our global competitiveness,” Murkowski said. “By improving the permitting processes, we have in place, we are creating greater opportunity for America to rebuild a robust domestic critical minerals supply chain.”

The White House seems to agree that the federal mine permitting proposal introduced by Murkowski is in the best interest of strengthening America’s supply chains. The administration, however, will likely also want to see federal jurisdiction of domestic mine permitting expanded.


Alaska House votes to avert government shutdown, send budget to Gov. DunleavyJ
James Brooks, Anchorage Daily News, June 29, 2021

The Alaska House of Representatives has approved a state budget that will avert a government shutdown, and Gov. Mike Dunleavy said he will sign it.

In a 28-10 vote on Monday, the House approved the “effective date clause,” which allows the budget to take effect July 1, the start of the state’s fiscal year.

“Once I receive the budget, and review individual items, I will make a decision on possible line-item vetoes and prepare the budget for implementation on July 1,” Dunleavy said in a brief written statement. “This action will avert a government shutdown.”

The vote ended almost two weeks of uncertainty caused when House Republicans voted against the clause.

Other legislators urged Dunleavy to sign the budget without the start date, but Dunleavy said doing so would be unconstitutional. The Alaska Department of Law said that without the clause, Alaska would have no budget until September. That would have caused a government shutdown starting July 1. Thousands of state workers would have been laid off, many state services would have been suspended and many state-paid contractors would have been forced to stop work.

“We’ve got a lot of Alaskans that are probably jumping for joy about now thinking that their paychecks are going to continue on coming,” said Speaker of the House Louise Stutes, R-Kodiak.

The House and Senate adjourned an ongoing special session immediately after the House approved the effective date clause.

That clause required two-thirds of the House and two-thirds of the Senate to agree. Fully funding the budget as written requires three-quarters of the 40-member House and three-quarters of the 20-member Senate. Neither the House nor Senate have passed the budget by the needed margin.

As a result, the Permanent Fund dividend in the budget is cut to $525, and there will not be enough moneyfor programs that subsidize the cost of rural home electricity and pay college scholarships to Alaska high school students. Some construction projects in the Matanuska-Susitna Borough are also defunded.

But lawmakers believe those issues will be resolved later this summer or in the fall, during an upcoming special session of the Legislature. Dunleavy could intensify the need for a fix by vetoing affected items

Those problems have been secondary to the prospect of a total government shutdown.

“We’ve been so focused on not shutting down this state that I haven’t taken that next step,” Stutes said.

Failed leverage led Alaska to the brink of a shutdown

Alaska’s House of Representatives is divided between an 18-member Republican minority and a 21-member majority coalition that includes Democrats, Republicans and independents. Rep. Sara Rasmussen, R-Anchorage, is not a member of either group.

For weeks, members of the minority have asked for action on a long-term state fiscal plan. The specific requests have varied. Kenai Republican Rep. Ron Gillham asked for a lengthy list of things including changes to the state’s constitutional spending cap and “a 15% cut across the board from all departments.”

One of his requests — and one repeated by many minority Republicans — is a constitutional amendment proposed by Dunleavy. That amendment would increase the dividend to about $2,350 per person if approved by voters next year.

But the proposal has been opposed by legislators in the House and Senate who say it is unaffordable without major new taxes. The Dunleavy administration’s projections call for $500 million in new taxes or spending cuts, plus spending from the Permanent Fund beyond a limit set by the Legislature in 2018.

Republicans sought to use the vote on the effective date — and the vote on fully funding the budget — as levers to move the majority, but neither side was willing to budge.

That led the state to the brink of a shutdown.

Members of the majority suggested Dunleavy could sign the budget without the effective date clause, but the governor said he believes that would be an unconstitutional act.

Attorney General Treg Taylor has sued a legislative agency in an attempt to force a legal decision on the matter.

Taylor said Monday that he intends to continue with the lawsuit. Courtroom arguments are scheduled for Tuesday, with an initial verdict afterward.

In addition to the legal maneuvering, the House majority and minority had been talking behind closed doors for days about a deal to end the deadlock in the House.

The details of that deal were revealed Monday: The House and Senate will create a “bicameral nonpartisan working group” that will try to create a comprehensive state fiscal plan before the Legislature’s next special session. The Republican minority will appoint its own members to the working group, as will the House’s coalition majority, the Senate’s Republican majority and the Senate’s Democratic minority.

Miscommunications cause a tense final day

After a weekend of offers and counteroffers, Stutes and Tilton had one final meeting about the deal Monday morning. Because of miscommunications, Stutes said she left that meeting thinking the minority was unwilling to make a deal. Tilton said she believed negotiations were continuing and that a tentative schedule was in place.

“There was definitely some communication challenges there,” Tilton said.

Despite believing there was no deal, Stutes called for a vote anyway.

” I felt it was time that people knew where they stood, whether there was an effective date or there wasn’t,” Stutes said.

Three votes, each requiring approval from 27 House members, were necessary.

After two of the three votes, members of the minority asked for a break in order to vote on a “sense of the House,” a nonbinding statement that called for the creation of the budget working group.

The House took an extended break to finalize the wording of that document, allow legislators to read it, then vote upon it.

” It was a very, very heated discussion on how we were going to move forward,” Tilton said.

After legislators approved the creation of the working group, they voted to avert the shutdown.

Republican Reps. James Kaufman of Anchorage, Ken McCarty of Eagle River, Tom McKay of Anchorage, Laddie Shaw of Anchorage and Cathy Tilton of Wasilla switched and voted in favor of the effective date clause and against the shutdown.

Also voting yes was Rep. Sara Rasmussen, R-Anchorage, who was absent from the first vote and is not a member of either the majority or minority. All members of the majority voted in favor of the clause.

Voting no were Republican Reps. Ben Carpenter of Nikiski; Mike Cronk of Tok; David Eastman of Wasilla; Ron Gillham of Kenai; DeLena Johnson of Palmer; Christopher Kurka of Wasilla; Kevin McCabe of Big Lake; Mike Prax of North Pole; George Rauscher of Sutton; and Sarah Vance of Homer.

Excused absent from the votes were Reps. Tiffany Zulkosky, D-Bethel, and David Nelson, R-Anchorage. Nelson said he was at National Guard training that had been postponed from April. Zulkosky did not respond to a text message asking why she was absent.

Tilton said she isn’t completely satisfied with the outcome, though she voted against the shutdown. Members of the minority disagree with the idea of funding the dividend and some Mat-Su construction projects from special accounts, and that didn’t change in the final budget.

They also didn’t get a firm commitment on fiscal action in the next special session.

Two years ago, the House and Senate created a similar working group to advise the Legislature on the future of the Permanent Fund. That group’s recommendations were never implemented.

” That is a cause for concern,” Tilton said, “and especially — I think our members have said it on record — what does it take to make change happen?”


White House sells infrastructure deal amid green angst
Ben Geman, Axios, June 29, 2021

The White House is trying to build support for clean energy and climate pieces of the $1.2 trillion bipartisan infrastructure outline at a time when activists are calling the plan far too modest.

Why it matters: The White House faces growing urgency to corral progressive lawmakers now that President Biden has abandoned threats to veto the plan unless a much larger, Democrats-only package moves too.

Driving the news: The sales pitch ramped up on several fronts Monday.

  • Biden wrote an op-ed touting clean energy and climate provisions while acknowledging it’s missing some “critical” climate pieces that he “intends” to pass under the Democrats’ separate reconciliation plan.
  • Two top White House aides, in a public memo, highlight the plan’s $49 billion for public transit, $15 billion for electric vehicle infrastructure and buses, and $73 billion in grid investments, among various other provisions.
  • White House press secretary Jen Psaki opened her briefing by claiming the plan would make “unprecedented strides in climate and clean energy leadership” — while also emphasizing that Biden wants to go further.

The big picture: The efforts aim to promote much more than environmental provisions. Biden and his aides are talking up the measure’s spending on road, broadband, ports and more.

  • But Democrats who prioritize global warming are among Biden’s needed constituencies in the fraught climb to get a deal through both chambers of Congress.
  • On Monday activists with the Sunrise Movement, joined by progressive lawmakers including Alexandria Ocasio-Cortez and Jamaal Bowman, rallied near the White House under the banner of “no climate, no deal.”
  • Even beyond Sunrise, which is on the green movement’s left flank, more Democratic-aligned groups like the League of Conservation Voters and Evergreen Action are pushing for big measures in a reconciliation plan.

Yes, but: White House officials are trying to navigate all kinds of political crosscurrents.

  • The infrastructure bill and the reconciliation package both face huge political hurdles (and neither bill even exists yet). Senate Minority Leader Mitch McConnell has powerful leverage over the bipartisan framework, Axios’ Alayna Treene reports.
  • The White House and Capitol Hill Democratic leaders face a thicket of competing interests — on both spending levels and policy — even within their party’s ranks as they craft a separate reconciliation package.
  • A Wall Street Journal story last night explored concerns among Democratic lawmakers in natural gas-producing states about proposals to curb reliance on natural gas.

What’s next: Biden will pitch the infrastructure plan in a Wisconsin speech later today.