Unwrapping the 2021 Spending Package
by Jim Collura, NEFI Vice President & Director of Government Affairs
Omnibus bill includes numerous energy provisions of interest to heating fuel dealers
Before adjourning for 2020, Congress approved a fiscal year 2021 omnibus appropriations and coronavirus relief bill (H.R.133). The nearly 5,600-page bill funds the federal government through September 21, provides $900 billion in new coronavirus aid, renews expiring tax provisions, and includes a package of bipartisan energy and environmental reforms. Below is a summary outline of key energy provisions that might be of interest to NEFI members and supporters. For a more complete overview of H.R.133, including discussion of its COVID-19 relief measures and tax provisions, visit nefi.com/spending-bill.
Use of Rental Assistance for Home Energy Costs & Arrearages
The bill creates a new $25 billion program that offers rental assistance to certain eligible households through December 31, 2021. Notably, the bill also allows rental assistance benefits to be used to cover “utility and home energy costs” including arrearages. This program is separate from and not to be confused with the Low-Income Home Energy Assistance Program (LIHEAP). Funds will be administered by the U.S. Treasury Department and allocated to states and local governments in the form of grants. The wording is broad and likely to include heating oil, propane, and other non-utility fuels. Low-income advocates informed Congress that $25 billion is too little to support both rent and energy costs and arrearages. The National Council of State Housing Agencies had estimated past-due rent would reach $34 billion by January, and the National Energy Assistance Directors’ Association says utility arrearages could reach $40 billion. NEFI is reviewing this provision thoroughly and will follow its implementation closely.
Support for Biofuel Producers
Among COVID-19 relief provisions targeting specific industries is $26 billion in agriculture and nutrition funding, half of which will be used for direct payments to farmers who suffered losses due to the coronavirus. The bill includes language supported by the National Biodiesel Board and other renewable fuel associations that specifically authorizes payments to producers of advanced biofuel, including biodiesel and renewable diesel.
Pipeline Safety Improvements
The bill includes numerous pieces of legislation designed to enhance pipeline safety, including the requirement of new regulations to mandate operators of regulated non-rural gas gathering lines, new and existing gas transmission pipeline facilities, and new and existing gas distribution pipeline facilities to conduct leak detection and repair programs that meet the need for gas pipeline safety and protect the environment. These programs must include a schedule with deadlines for repairing and replacing each leaking pipe barring those that are determined not to pose a hazard. Pipeline operators are also required to revise inspection and maintenance plans to eliminate and minimize natural gas leaks and enhance public safety and environmental protection. Federal regulators must review these plans at least every five years. The bill also includes the Leonel Rondon Pipeline Safety Act, named after the18-year-old killed by the Merrimack Valley natural gas explosions. Offered by Sen. Ed Markey and Rep. Lori Trahan of Massachusetts, the bill imposes a broad set of new requirements and protocols on utilities and gas pipeline operators, which are designed to prevent a repeat of the Merrimack Valley disaster.
Promotion of Forest Biomass & Bioenergy
The bill supports inter-agency coordination on forest biomass and bioenergy and requires agencies to establish clear and simple policies for use of forest biomass as a carbon-neutral energy solution. This pivot in policy focus could enhance federal support for ethyl levulinate (EL) and other advanced biofuels produced from forest products, by-products, waste, and residues.
Support for Advanced Energy Research
The bill provides $427 million for Advanced Research Projects Agency-Energy (ARPA-E), an increase of $2 million. This program is based on the successful Defense Advanced Research Projects Agency (DARPA). ARPA-E supports research aimed at rapid development of energy technologies to help meet critical U.S. economic, environmental, and security challenges. APRA-E’s mission statement is also expanded to include development of technologies that reduce energy-related emissions, including greenhouse gas emissions.
Other Energy Provisions of Interest
- Directs the EPA to create a cap-and-trade program to phase-down production and consumption of hydrofluorocarbons (HFCs) by 85 percent over 15 years. HFCs are commonly used in refrigeration, air conditioning, and certain foam insulation.
- Reauthorizes grants under the Diesel Emissions Reduction Act through FY2024.
- Directs the EPA to establish a competitive prize program that awards funds to direct air capture research projects designed to reduce CO2 from stationary sources.
- Expands the scope of various federal research projects to include carbon capture, utilization, and sequestration (CCUS) projects and carbon dioxide pipelines.
- Authorizes the Weatherization Assistance Program through FY2025 and provides $330 million for FY2021 and $350 million for each year thereafter. Expands the definition of “weatherization materials” to include “renewable energy technologies.”
Other Relevant Funding Measures
- $3.8 billion for LIHEAP, a small increase of $10 million (note: coronavirus legislation enacted in March 2020 included $900 million in emergency funding that can be used in either fiscal year 2020 or 2021).
- $6.5 million to maintain the Northeast Home Heating Oil Reserve.
- $2.86 billion for research into energy efficiency and renewable energy programs at the Department of Energy (DOE), a 34 percent funding increase.
- $750 million in funding for fossil energy research and development at DOE, same as the last fiscal year.
- $9.24 billion for the Environmental Protection Agency (EPA), a 2 percent increase.
- $748 million for the Federal Motor Carrier Safety Administration, a 10 percent increase.
- $10 billion in emergency funding to support state departments of transportation and certain local transportation agencies during the coronavirus pandemic.
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