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Thursday, May 23, 2013

Energy and Water Development: FY2014 Appropriations, Preliminary Tables

Carl E. Behrens, Coordinator
Specialist in Energy Policy

The Energy and Water Development appropriations bill provides funding for civil works projects of the Army Corps of Engineers (Corps), for the Department of the Interior’s Bureau of Reclamation (Reclamation) and the Department of Energy (DOE), and for a number of independent agencies.

FY2013 Energy and Water Development appropriations were considered in the context of the Budget Control Act of 2011 (BCA, P.L. 112-25), which established discretionary spending limits for FY2012-FY2021. On March 26, 2013, the President signed H.R. 933, the FY2013 Defense and Military Construction, and Veterans Affairs, Full Year Continuing Appropriations Act (P.L. 113-6). The act funds Energy and Water Development accounts at the FY2012 enacted level for the rest of FY2013, with some exceptions. However, under BCA, an automatic spending reduction process, consisting of a combination of sequestration and lower discretionary spending caps, went into effect March 1, 2013. The effect of these reductions on the budgetary resources that will ultimately be available to an agency at the account level remains unclear until further guidance is provided by OMB as to how these reductions should be applied.

President Obama’s FY2014 budget request for Energy and Water Development was released in April 2013.

For FY2014, as in previous years, the level of overall spending will be a major issue. On March 21, 2013, the House passed H.Con.Res. 25, setting FY2014 spending at $2.77 trillion. On March 23, the Senate passed S.Con.Res. 8, with a spending level for FY2014 of $2.96 trillion. Allocations for individual appropriations bills have not yet been set by the Appropriations Committees.

In addition to overall funding levels, issues specific to Energy and Water Development programs include

  • the distribution of appropriations for Corps (Title I) and Reclamation (Title II) projects that have historically received congressional appropriations above Administration requests;
  • alternatives to the proposed national nuclear waste repository at Yucca Mountain, NV, which the Administration has abandoned (Title III: Nuclear Waste Disposal); and
  • proposed FY2014 spending levels for Energy Efficiency and Renewable Energy (EERE) programs (Title III) that are more than 50% higher in the Administration’s request than the amount appropriated for FY2012.
This report is a preliminary summary of funding levels requested by the Administration for FY2014. For detailed discussion of issues involved in individual programs, see CRS Report R42498, Energy and Water Development: FY2013 Appropriations.

Date of Report: May 9, 2013
Number of Pages: 10
Order Number: R43069
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Wednesday, May 22, 2013

Keystone XL Pipeline Project: Key Issues

Paul W. Parfomak
Specialist in Energy and Infrastructure Policy

Robert Pirog
Specialist in Energy Economics

Linda Luther
Analyst in Environmental Policy

Adam Vann
Legislative Attorney

TransCanada’s proposed Keystone XL Pipeline would transport oil sands crude from Canada and shale oil produced in North Dakota and Montana to a market hub in Nebraska for further delivery to Gulf Coast refineries. The pipeline would consist of 875 miles of 36-inch pipe with the capacity to transport 830,000 barrels per day. Because it would cross the Canadian-U.S. border, construction of Keystone XL requires a Presidential Permit from the State Department. A decision to issue or deny a Presidential Permit is based on a determination that a project would serve the national interest, considering potential impacts on the environment, the economy, energy security, foreign policy, and other factors. Environmental impacts are evaluated and documented in an Environmental Impact Statement (EIS) under the National Environmental Policy Act (NEPA).

TransCanada originally applied for a Presidential Permit for the Keystone XL Pipeline in 2008. The initial proposal included a southern segment from Oklahoma to the Gulf Coast. After a final EIS for the original project was released in August 2011, the State Department began a 90-day public review period to make its national interest determination. A key issue that arose during this review was concern over environmental impacts in the Sand Hills region of Nebraska. This concern led the Nebraska legislature to enact new state pipeline siting requirements that would alter the pipeline route through Nebraska. In January 2012, the State Department concluded that it would not have sufficient information to evaluate an altered pipeline route before a deadline imposed by Congress and denied the permit. The southern segment of the original Keystone XL proposal, now called the Gulf Coast Project, was subsequently separated from the original proposal because it did not require a Presidential Permit. It has been approved by the relevant states and is currently under construction.

In May 2012, TransCanada reapplied to the State Department for a Presidential Permit to build the northern, cross-border segment of Keystone XL. The new permit application initiated a new NEPA process. The governor of Nebraska approved a new route through the state avoiding the Sand Hills on January 22, 2013. On March 6, 2013, notice was published in the Federal Register that the State Department draft EIS for the reconfigured Keystone XL Project was available for public comment until April 22, 2013. Public comments must be addressed by the State Department before a final EIS can be issued. After that, the 90-day public review period for the national interest determination begins.

Development of the Keystone XL Pipeline has been controversial. Proponents base their arguments supporting the pipeline primarily on increasing the diversity of the U.S. petroleum supply and economic benefits, especially jobs. Pipeline opposition stems in part from concern regarding the greenhouse gas emissions associated with the development of Canadian oil sands, continued U.S. dependency on fossil fuels, and the risk of a potential release of heavy crude. The Energy Production and Project Delivery Act of 2013 (S. 17), the Keystone for a Secure Tomorrow Act (H.R. 334), a bill to approve the Keystone XL Pipeline (S. 582), and the Northern Route Approval Act (H.R. 3) would all effectively approve the Keystone XL Pipeline. The Strategic Petroleum Supplies Act (S. 167) would suspend sales of petroleum products from the Strategic Petroleum Reserve until the pipeline is approved. On March 22, 2013, the Senate passed an amendment to the Fiscal 2014 Senate Budget Resolution (S.Con.Res. 8) that would provide for the approval and construction of the Keystone XL Pipeline (S.Amdt. 494). 

Date of Report: May 7, 2013
Number of Pages: 44
Order Number: R41668
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Friday, May 17, 2013

Nuclear Energy: Overview of Congressional Issues

Mark Holt
Specialist in Energy Policy

The policy debate over the role of nuclear power in the nation’s energy mix is rooted in the technology’s fundamental characteristics. Nuclear reactors can produce potentially vast amounts of energy with relatively low consumption of natural resources and emissions of greenhouse gases and other pollutants. However, facilities that produce nuclear fuel for civilian power reactors can also produce materials for nuclear weapons. The process of nuclear fission (splitting of atomic nuclei) to generate power also results in the production of radioactive material that must be contained in the reactor and can remain hazardous for thousands of years. How to manage the weapons proliferation and safety risks of nuclear power, or whether the benefits of nuclear power are worth those risks, are issues that have long been debated in Congress.

The 104 licensed nuclear power reactors at 65 sites in the United States generate about 20% of the nation’s electricity. Five new reactors are currently under construction. About a dozen more are planned, but whether they move forward will depend largely on their economic competitiveness with natural gas and coal plants. Throughout the world, 435 reactors are currently in service, and 67 more are under construction.

The March 2011 disaster at the Fukushima Dai-ichi nuclear power plant in Japan increased attention to nuclear safety throughout the world. The U.S. Nuclear Regulatory Commission (NRC), which issues and enforces nuclear safety requirements, established a task force to identify lessons from Fukushima applicable to U.S. reactors. The task force’s report led to NRC’s first Fukushima-related regulatory requirements on March 12, 2012. Several other countries, such as Germany and Japan, eliminated or reduced their planned future reliance on nuclear power after the accident.

Highly radioactive spent nuclear fuel that is regularly removed from nuclear power plants is currently stored at plant sites in the United States. Plans for a permanent underground repository at Yucca Mountain, NV, were abandoned by the Obama Administration, although that decision is being challenged in court. The Obama Administration appointed the Blue Ribbon Commission on America’s Nuclear Future to recommend an alternative nuclear waste policy. In response to the Commission’s recommendations, the Department of Energy (DOE) issued a new waste strategy in January 2013 that calls for the selection of new candidate sites for nuclear waste storage and disposal facilities through a “consent based” process and for a surface storage pilot facility to open by 2021.

The level of security that must be provided at nuclear power plants has been a high-profile issue since the 9/11 terrorist attacks on the United States in 2001. Since those attacks, NRC issued a series of orders and regulations that substantially increased nuclear plant security requirements, although industry critics contend that those measures are still insufficient.

Encouraging exports of U.S. civilian nuclear products, services, and technology while making sure they are not used for foreign nuclear weapons programs has long been a fundamental goal of U.S. nuclear energy policy. Recent proposals to build nuclear power plants in several countries in the less developed world, including the Middle East, have prompted concerns that international controls may prove inadequate.

Date of Report: April 29, 2013
Number of Pages: 14
Order Number: R42853
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Monday, May 6, 2013

The World Bank Group Energy Sector Strategy

Richard K. Lattanzio
Analyst in Environmental Policy

One in five people worldwide lack access to electricity. This is among the many challenges that financial institutions face when providing assistance to lower-income countries in order to promote economic and social development. Access to modern energy sources has the potential to substantially increase worldwide economic growth, creating markets in the developing world for products from the developed world, and vice versa. Filling this need may also result in environmental problems that could threaten development, including an increase in pollution that damages fisheries, reduces farm fertility, poses health risks, and contributes to climate change. In response to these risks, the World Bank Group (WBG) has reported its intentions to revise its strategy for energy and infrastructure lending to better address energy poverty alleviation and environmentally sustainable development. After releasing an Approach Paper in October 2009, and consulting with government and civil society stakeholders from January 2010 to July 2010, a strategy document, Energizing Sustainable Development: Energy Sector Strategy of the World Bank Group (ESS), was presented to the WBG Committee on Development Effectiveness (CODE) on April 11, 2011, for consent and subsequent delivery to the WBG Board of Executive Directors for a vote during the summer of 2011. The ESS, however, stalled during debate in CODE. With the appointment of Jim Yong Kim as the 12th President of the World Bank Group on July 1, 2012, the ESS process was discontinued. Efforts to revise energy and infrastructure lending have since been incorporated into the broader initiatives of the new administration.

The impetus for the World Bank Group’s revision of its energy strategy rests on many factors. Over the past several decades, sustainable energy and environmental issues have gained an increasing level of attention in international humanitarian and development assistance, as countries have tried to integrate poverty reduction and economic growth initiatives with a shared concern for the global environment. Further, lack of access to modern energy resources, recurrent supply disruptions, and increased exposure to the risks of global climate change have hindered social and economic development in many lower-income countries. The ESS comprises an initiative to support energy poverty alleviation and environmentally sustainable development with provisions that include deemphasizing coal-fired power generation, developing large-scale hydropower where appropriate, establishing greenhouse gas emissions programs, increasing lending for clean energy projects, promoting energy efficiency initiatives, expanding access to modern energy services, improving household fuel and distributed energy programs, encouraging local community engagement and empowerment, and supporting innovative energy policy.

While some observers of the WBG have applauded provisions in the revised strategy, many claim that the history of the WBG’s energy and infrastructure lending undermines its credibility as an institution committed to combating the impacts of environmental degradation and climate change. The United States—through its role as financial contributor to the WBG and as member on the WBG governing boards—has influence on WBG policy. This influence manifests itself through Board votes, general advocacy, reporting requirements, and financial leverage. While the U.S. Administration oversees the day-to-day participation in WBG operations, the U.S. Congress— through its role in WBG appointments, appropriations, and legislative guidance—retains significant input. U.S. guidance to the WBG has focused on the institution’s lending practices as a means to induce greater environmental sustainability in multilateral development assistance. The ESS thus becomes another potential vehicle for the U.S. Congress and the U.S. Administration to further address concerns regarding energy and infrastructure lending in lower-income countries.

Date of Report: April 16, 2013
Number of Pages: 24
Order Number: R41912
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