McCarthy’s Concessions May Endanger Biden’s Energy Policy
Washington,
January 31, 2023
By Ariel Cohen
Kevin McCarthy's quest to become Speaker of the House ended after 15 votes with many concessions granted to the hardline, America first, Freedom Caucus within the GOP House delegation that prevented his unchallenged ascent. The extent of these concessions took weeks to emerge and drew controversy. Notably, Marjorie “Jewish space lasers” Taylor Greene received seats on the powerful Homeland Security and Oversight committees. Some of the extremists who prevented McCarthy's smooth election and embarrassed the GOP have now arrived at the House’s Energy and Commerce Committee and its subcommittees, and everyone should be worried. The Energy and Commerce Committee is at the forefront of all policy issues powering America’s economy including energy, technology, and Healthcare. The new 118th Congress also marks the change of the Subcommittee on Energy to the Subcommittee on Energy, Climate, and Grid Security (ECGS). This bipartisan name change was designed to showcase institutional recognition of the intrinsic relationship between climate and energy policy. The subcommittee recommends new policies, sets agendas, identifies and reports critical issues, and wields crucial influence over the US Department of Energy (DOE) and US Nuclear Regulatory Commission operations. The Republican victory in the House gave the party control of House committees and assignment discretion. The Energy and Commerce committee changed from a 32-26 Democrat majority led by Frank Pallone (D-NJ) to a 29-23 Republican majority led by former ranking member Cathy Rogers (R-WA). The fragile consensus, where the GOP was happy to table “green” bills if they involved tax cuts is now in danger. Not from the shift to GOP control, but from a few GOP outliers. Cathy Rogers (R-WA). The new nine arrivals to the committee include Randy Weber (R-TX), Rick Allen (R-GA), Troy Balderson (R-OH), Russ Fulcher (R-ID), August Pfluger (R-TX), Diana Harshbarger (R-TN), Mariannette Miller-Meeks (R-IA), Kat Cammack (R-FL), and Jay Obernolte (R-CA). Weber, Fulcher, and Harshbarger are new members of the "Freedom Caucus" joining Debbie Lesko (R-AZ), Jeff Duncan (R-SC), Morgan Griffith (R-VA), and Gary Palmer (R-AL) on the committee, bringing the total up to 7. The new wave of assignments has granted the faction greater recognition and influence than ever before. The mainstream GOP energy agenda is characterized by the "all of the above" approach, which prioritizes a diverse energy portfolio: oil, gas, nuclear, and renewables. The GOP views this as the best approach to achieve some of its campaign promises: energy independence (which has arrived) and reducing the cost of living through lower energy prices. The GOP is increasingly supportive of innovation across energy sectors and increasingly receptive to emission standards. However, representatives remain ideologically opposed to government involvement and preferential treatment towards renewables, advocating for market-based solutions. This is the main point of contention with the Democrats, who support focusing US energy policy on promoting renewables to mitigate the impact of climate change as an externality and are skeptical of the market’s ability to do this alone. At the same time, the issue of climate change is largely omitted from the agenda of the Republicans. While the mainstream GOP energy policy moderates, a faction in the GOP House Delegation, the Conservative Climate Caucus is lukewarm concerning manmade climate change and hostile to any changes in America’s energy status quo. They have courted controversy through outspoken members and a controversial embrace of “clean coal”. The increasing power of the Conservative Climate Caucus and Freedom Caucus within the ECGS sub-committees is worrying. While some new members have expressed support for encouraging alternative energy strategies, with Miller-Meeks (R-IA) highlighting the importance of nuclear and biofuel energy, and Fulcher’s (R-CA) support of geothermal, most members remain opposed to energy portfolio diversification. The increasingly fractious nature of the GOP means these two factions could exercise outsized power on energy policy through these committees. While Republicans are vowing to stop President Biden's "radical" energy policy (consisting mostly of loan programs, tax cuts, and some market-centric approaches), they are blaming IRA and Infrastructure bill's $700 billion price tag for runaway inflation. However, the House stands to face strong opposition from the White House and the Senate. Furthermore, the Republicans will be unable to reverse the $370B climate and clean energy investments approved under the Inflation Reduction Act. Despite the opposition to it, some moderate Republican members believe that much of the IRA aligns with core Republican values and reflects the emerging Congressional committee consensus. The bill stimulates renewable innovation through market-based mechanisms such as tax credits and rebates and is projected to reduce energy costs. The bill also promotes US-based manufacturing, deficit reduction, rare earth element (REE) supply security, and energy independence. It is unlikely that the Republican criticisms will amount to any significant alterations of existing legislation, especially as inflation continues to decrease below 6.5% from its 9.1% summer 2022 peak. The new committee is likely to bring changes to its oversight process. Republicans are unlikely to show much interest in tightening the enforcement of many laxly enforced EPA regulations. Instead, the committee can be expected to focus on audits for broad partisan gain. It is also expected to limit climate-related legislation and amendments, preventing it from being voted from the Committee and introduced on the floor. Republicans are likely to focus on achieving smaller-scale victories over Biden’s energy policy, such as exploring the reopening of the Keystone XL pipeline, which is unlikely to succeed as the Canadians lost interest after losing hundreds of millions of dollars on the project killed by the Obama and Biden Administrations, and expanding federal drilling leases. Growing environmental concerns, changing energy supply chains, and an emerging climate consensus gives the Energy and Commerce Committee growing importance. Simultaneously, that committee has never been more vulnerable to being neutralized – or worse - by a small group of radical climate pessimists and fossil fuel partisans. These new members will, to a limited extent, will attempt to slow unfolding energy policy transformations. It is unlikely that they will succeed.
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