Energy industry wants its share
WASHINGTON – With President Donald Trump pushing Congress to fund a national infrastructure overhaul, lobbyists for energy companies are pressing the administration to look beyond highways and airports to the future of U.S. energy needs.
From pipelines, to high-voltage power lines, to the waterways on which barges full of coal and oil products travel, companies are looking not just for federal funding, but also a rewriting of some regulations that govern how that energy infrastructure is built and operated.
“We need to continue to be vigilant in talking about the need for energy infrastructure ... so we don’t immediately migrate to roads, bridges, etc.,” said Jack Gerard, president of the American Petroleum Institute, the oil industry’s chief lobbying arm.
During his State of the Union speech Tuesday night, Trump called on Congress to produce legislation that will provide $1.5 trillion for public works projects using federal funding to leverage investment from state and local governments as well as the private sector. Trump also called on streamlining permitting to dramatically reduce the time it takes to break ground.
“Together, we can reclaim our building heritage,” Trump said. “We will build gleaming new roads, bridges, highways, railways, and waterways across
our land. And we will do it with American heart.” A super power grid
Within the power sector, the hope is that federal largesse will also extend to the nation’s electric grid, much of which is close to a century-old and in need of upgrades to handle not only the recent surge in wind and solar power, but also the growing threat from hackers.
And with more change ahead — from electric cars to grid-scale batteries — there is a need for more long-distance power lines and upgraded, digital equipment capable of moving electricity greater distances, said Guido Jouret, chief digital officer at the Swiss infrastructure giant ABB.
“The way (former President Dwight) Eisenhower invested in the interstate highway system, we could be building energy freeways across this country,” he said. “One of the main concerns for the U.S. is the grid itself is aging. The average age of a transformer is 40 years, and that’s just about its usual life.”
But federal funding could be hard to come by. Lawmakers within the Republican Party’s conservative wing are expected to fight anything that increases the federal budget.
While the White House might be seeking $1.5 trillion worth of infrastructure spending, only a fraction of that — a reported $200 billion — is expected to be funded by the federal government.
“There was some early hope by governors and mayors there would be federal investment,” said Steve Hauser, CEO of the trade group Gridwise Alliance, which advocates for modernizing the U.S. power grid. “In this current environment, I just don’t see it happening.” Down with regulation
Where infrastructure legislation might offer greater reward is in the regulatory process.
Energy companies have complained for years about the wait times for getting state and federal agencies to sign off on their projects, whether it’s a new pipeline or a petrochemical plant.
Now, the oil and gas industry is leading the charge to speed things up, lobbying to give the Federal Energy Regulatory Commission more authority over other agencies and curtailing states’ ability to hold up projects through environmental review.
Gerard points to the situation in New York, where state regulators have denied pipeline permits over concern they would contribute to climate change.
“If you get an individual state trying to thwart the purposes of an interstate decision then, yes, we need to look at that and see if that process is being abused,” Gerard said. “There’s a variety of fixes that can come into play, from legislation to regulation to direction or mandate. We need to look at all of the above.”
The question will be whether Republicans, traditionally proponents of states’ rights, and Democrats, likely to come under pressure from environmentalists not to do anything to support fossil fuels, will go along.
“I think we probably ought to talk about it,” said Rep. Gene Green, DHouston. “I don’t know if Congress would go so far as to federalize pipeline (permitting). That’s a big step. Most of my Republican colleagues are of the opinion that whatever’s local is right.” Oil has to get there
Less controversial is the energy sector push to upgrade U.S. transportation infrastructure.
Like all industries, the U.S. energy sector relies on highways, rail, waterways and airports to function.
A case in point is the network of rivers, canals and lakes that allows refineries and petrochemical plants along the Gulf Coast to get their products to markets in the Midwest. Barges travel along the Intracoastal Waterway to the Mississippi River, from where they can connect to cities as far afield as St. Louis, Chicago and Pittsburgh.
But the system of locks and floodgates that allows barges to move upriver is aging, with some structures in desperate need of repair. A series of projects have been identified by the U.S. Army Corps of Engineers, but federal funding has yet to be finalized, said Matt Woodruff, vice president of public and government affairs at the Houston-based barge operator Kirby Corp.
“We’ve inherited that system from our grandparents, and it is an aging system,” Woodruff said. “If we want to maintain a safe, reliable system into the future, we need to reinvest in it.”
At the same time ports are looking to upgrade their facilities to allow larger ships and tankers, including the Houston Ship Channel where petrochemical companies are urging Congress to fund the deepening of the main channel to 50 feet, Green said.
Already the concept is drawing bipartisan backing in Congress, with 36 House members sending a letter of support to party leaders on Wednesday.
“Any infrastructure package presented by the administration should include necessary funding to maintain and improve our national freight network,” said Rep. Ted Poe, R-Humble. “Our nation’s ports are critical to the growth of our economy and our national supply chain.”