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Friday, September 27, 2013

Energy Policy: 113th Congress Issues


Carl E. Behrens
Specialist in Energy Policy

Energy policy in the United States has focused on three major goals: assuring a secure supply of energy, keeping energy costs low, and protecting the environment. In pursuit of those goals, government programs have been developed to improve the efficiency with which energy is utilized, to promote the domestic production of conventional energy sources, and to develop new energy sources, particularly renewable sources.

Implementing these programs has been controversial because of varying importance given to different aspects of energy policy. For some, dependence on imports of foreign oil, particularly from the Persian Gulf, is the primary concern; for others, the indiscriminate use of fossil fuels, whatever their origin, is most important. The contribution of burning fossil fuels to global climate change is particularly controversial. Another dichotomy is between those who see government intervention as a positive force and those who view it as a necessary evil at best.

Energy policy was an important issue in the 2012 presidential campaign, and there were sharp differences between the positions of President Obama and Republican candidate Mitt Romney, and between most Republicans and Democrats in Congress. The Obama Administration has vigorously pushed energy efficiency and renewable energy initiatives, at the same time claiming to encourage development of oil and natural gas resources. President Obama has declared global climate change a major issue. The Romney campaign argued that the Obama Administration has blocked oil and gas development, and declared that so-called green technologies are too expensive to compete in the market. Alternative energy funding, according to Romney, should be concentrated on basic research. On global climate change, Romney acknowledged that human activity contributes to global warming, but claimed there is no consensus on its extent or severity. He opposed unilateral measures that do not include actions by developing countries.

The 112
th Congress did not take up comprehensive energy legislation, but numerous bills were considered on specific energy issues. The most significant action was extension of energy tax incentives, including the Production Tax Credit (PTC) for wind energy, to January 1, 2014, as part of P.L. 112-240, The American Taxpayer Relief Act of 2012. In the 113th Congress, a number of issues, some of which drew attention previously, have been taken up in proposed legislation. The Energy Savings and Industrial Competitiveness Act of 2013, S. 1392 and H.R. 1616, would promote energy efficiency in buildings and industry by encouraging adoption of uniform building codes and authorize a grant program for state energy efficiency programs. The bill was reported out by the Senate Energy and Natural Resources Committee on May 13, 2013.

H.R. 3, the Northern Route Approval Act, would declare that a presidential permit would not be required for construction of the Keystone XL pipeline from Canada to the Gulf of Mexico. The bill passed the House on May 22, 2013, by a vote of 241-175. The issue of approving the Keystone XL pipeline is deeply involved in the question of global climate change, since opponents argue that Canadian oil sands production contributes excessive amounts of greenhouse gas emissions. The issue of global climate change is due for hearings before the House Energy and Commerce Subcommittee on Energy and Power on September 18, 2013.


Date of Report: September 3, 2013
Number of Pages: 12
Order Number: R42756
Price: $29.95


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Tuesday, September 24, 2013

Federal Permitting and Oversight of Export of Fossil Fuels



Adam Vann
Legislative Attorney

Daniel T. Shedd
Legislative Attorney

Brandon J. Murrill
Legislative Attorney


Recent technological developments have led to an increase in the domestic supply of natural gas. As a result, there is interest among some parties in exporting liquefied natural gas (LNG) to take advantage of international markets. This has placed new attention on the laws and regulations governing the export of natural gas as well as other fossil fuels.
In most cases, export of fossil fuels requires federal authorization of both the act of exporting the fuel and the facility that will be employed to export the fuel. For example, the export of natural gas is permitted by the Department of Energy’s Office of Fossil Energy, while the construction and operation of the export facility must be authorized by the Federal Energy Regulatory Commission (FERC). Oil exports are generally forbidden, but an export that falls under one of several exemptions to the ban can be authorized by the Department of Commerce’s Bureau of Industry and Security, while oil pipelines that cross international borders must be permitted by the State Department. Coal exports do not require special authorization specific to the commodity; however, as with natural gas and crude oil, other generally applicable federal statutes and regulations may apply to the export of coal.

Restrictions on exports of fossil fuels could potentially have implications under international trade rules. They may possibly be inconsistent with the most favored nation requirement of Article I of the General Agreement on Tariffs and Trade 1994 (GATT 1994) if certain World Trade Organization (WTO) members are treated differently than others. Limits on exports could also potentially violate the prohibition on export restrictions contained in Article XI of the GATT 1994 if they prescribe vague and unspecified criteria for export licensing. However, an export licensing regime does not appear to constitute a “subsidy” to downstream users of fossil fuels under WTO rules.

Article XXI, the exception for essential security interests, may provide justification for potential violations of GATT Articles I and XI. The United States has traditionally considered this exception to be self-judging. However, it is possible that a panel or the Appellate Body might scrutinize the United States’ use of the exception.

Article XX of the GATT provides additional exceptions that a member country may invoke if it is found to be in violation of any GATT obligations. For example, WTO Members may maintain an otherwise GATT inconsistent measure if it is necessary to protect an exhaustible natural resource or necessary to protect human health or the environment. Article XIII requires that if an otherwise GATT inconsistent measure is permitted to remain in force due to an Article XX exception, the measure must be administered in a non-discriminatory manner. Export restrictions that treat WTO Members differently would appear not to satisfy the non-discriminatory requirements of Article XIII.


Date of Report: September 17, 2013
Number of Pages: 17
Order Number: R43231
Price: $29.95


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