Energy Round Table with Senator Lisa Murkowski

Lisa Murkowski is the senior Republican member of the Senate Energy and Natural Resources Committee and also serves on the Senate Appropriations Committee, where she is the ranking Republican of the Interior and Environment Subcommittee. She is a third-generation Alaskan and only the sixth U.S. senator to serve her state.

In February, Senator Murkowski released Energy 20/20: A Vision for America’s Energy Future, a blueprint for America’s energy and natural resources policy over the next few years. It advocates, among other goals, achieving independence from OPEC oil imports and the critical need to continue supporting energy research.

The senator joined the Energy Round Table to discuss funding for weatherization and state energy programs, nuclear waste storage, and the reason why a piecemeal energy strategy could be the way forward.

PARTICIPANTS

Gene Therriault, Deputy Director, Statewide Energy Policy Development, Alaska Energy Office

Larry Dawson, Director, Illinois Office of Energy Assistance, Illinois Department of Commerce and Economic Development

Colette D. Honorable, First Vice President, National Association of Regulatory Utility Commissioners; Chairman, Arkansas Public Services Commission

Mark Sylvia, Commissioner, Massachusetts Department of Energy Resources

Brad Penney, General Counsel, National Association for State Community Services Programs

Gene Therriault: Senator, it was great to see you up in Fairbanks this weekend where we’re enjoying some unusually warm weather, but you and I both know that won’t last and cold weather is on its way. And that leads me to ask about the potential for the reauthorization of the Weatheriza­tion Assistance Program and the State Energy Program funding that is cur­rently pending as Amendment 1842 to the Shaheen-Portman legislation. What you can tell us about the pos­sibility of passage?

Murkowski: First of all, on the Weatherization Assistance Program, Senators Coons and Collins have done good work on this. They have worked to strengthen and reauthorize the pro­gram, so that is positive. I certainly recognize that we need to get them reauthorized. The path forward is probably less than certain at this point in time. We’re not working on com­prehensive energy legislation. We’re dealing right now with budget issues, trying to figure out how we wrestle with our national debt. We need time to talk about issues like weatherization. Sometimes these issues are important on the ground, but we haven’t been able to elevate them to a higher level. As far as the Shaheen-Portman bill, and it being kind of the vehicle for the Weatherization Assistance Program, I do have concern that Shaheen-Port­man could possibly topple under the weight of a multibillion-dollar pro­posal like we have with weatherization. I do think that we get back to consid­eration of Shaheen-Portman on the floor. I can’t give you an exact timing, but we had a conversation about it this morning with the bill’s sponsors, so that is certainly a consideration out there. If weatherization is attached to Shaheen-Portman, given that it is a pretty significant authorization, it will be difficult for some members to vote on that, but we are continuing to look for all openings as far as how we can advance the Weatherization Assistance Program and State Energy Program. We recognize in Alaska and so many other places that it is impor­tant to move this reauthorization; it’s just a question of where and when.

Larry Dawson: In light of the Energy Information Administration’s recent projections about higher winter heating costs, do you see any possibil­ity of restoring funding for LIHEAP as a part of the negotiations over the FY 2014 Continuing Resolution?

Murkowski: Again, that’s a tough one. We’ve got world oil prices that are still around $100 a barrel. We’re seeing extraordinarily high home heating oil costs this winter, particularly in Alaska where we have high prices that are locked in by early delivery. The last barge comes in September/Octo­ber, and you’re locked in at those high prices for the balance of the winter. And as you point out, Larry, we’re forecasting a colder-than-average winter in parts of the country. So it’s an imperative in my mind for more funding for LIHEAP. Unfortunately, in the president’s FY 2014 budget there was actually a call for a cut—a $490 million cut—in LIHEAP. In the Senate appropriations commit­tee, I worked with a group of others to win an increase of about $100 mil­lion above what was actually funded with sequestration for FY 2013. So it’s an increase to about $3.6 billion for LIHEAP. But in this budget environ­ment I would just suggest to you what we’ve been saying around here—that if we can even do level funding, it’s con­sidered a win given the budget climate. But I’m from a place like Alaska where we’ve got more than 16,000 households that depend on LIHEAP to really keep them from freezing. And I want us to get back to the theoretical full funding levels with about $5.1 billion. We reached that several years ago. So I’m going to be working with the state LIHEAP coalition to get the funding back to at least $4.7 billion. It’s a lot of money, yes, but we’ve got perhaps 45 million households that meet the LIHEAP eligibility threshold. And at the end of the day, we’re only aiding about 8 million of those households, and that’s a pro rated level of aid. So it is absolutely clear that there is more to be done, and know that I want to work with all of you to help address it. It’s just too critical a need, particularly as we approach the winter season.

Colette D. Honorable: In Arkan­sas we’re very proud of our nuclear generation, and as you probably know, the NARUC has been deeply involved in the long-running litigation and the saga related to the nation’s nuclear waste. What is the status of your bipartisan legislation, and how do you see Congress moving forward with it?

Murkowski: I thank you first for the question. It is something that I have jumped in with Chairman Wyden and Senators Feinstein and Alexander. I think we recognize our opportu­nity to deal with nuclear waste. If we can come together as authorizers and appropriators working with our col­leagues over in the House to make some advances here on the nuclear waste side, that is going to make a world of difference, really, when we’re talking about a resurgence of our nuclear port­folio. It’s key. It is my intention, and I know it’s Chairman Wyden’s, to mark up this legislation in the near future. Realistically, that’s probably not going to happen until the first part of next year. But keep in mind, as we’ve been working on the Senate side to build out support, we recognize that the House has taken a different approach on this, and with a very keen focus on Yucca. But we have had some very good discussions with our counter­parts on the House side with regard to the back end of the nuclear fuel cycle. And while we’re not initially talking from the same page, we are having ongoing discussions about it. Folks who, again, have a very directed inter­est in the success of Yucca are talking with the four of us who said, Okay, Yucca is not excluded with our legis­lation. It clearly has a purpose and a validity. We are not excluding it with ours. So I feel somewhat optimistic that with the level of input that we have had to this point in time—bipartisan, bicameral, and again from the authorizers’ and appropriators’ perspective—I’m feeling pretty good that we will see action on this proposal to deal with our nation’s nuclear waste.

Mark Sylvia: One issue that remains a challenge in the area of energy emergency response is liquid fuels (for example, gasoline and heat­ing oil). And certainly for those of us in the Northeast after Superstorm Sandy, it was a very real challenge for us. Do you have any policy sugges­tions for improving the ability of the petroleum industry, the states, and the federal government to enhance energy security in this area?

Murkowski: I think, Mark, that there are several commonsense poli­cies that we can look at as we manage our fuel supply, particularly in emer­gency situations. I understand that it is the one-year anniversary of Sandy today. But also recognizing, as we deal with things here at the federal level, that the industry, the respec­tive states, the federal government, we all have important roles to play. I did note that New York is looking to create a state gasoline reserve on Long Island. I’m not necessarily convinced that a product reserve makes economic or logistical sense at the federal level, but other states may want to take a look at what New York is consider­ing. At the federal level, I will tell you that I think it is important that we maintain a robust strategic petroleum reserve. We’ve done this for many years now. I think that the federal govern­ment should be doing everything it can to facilitate the timely construction of our infrastructure, particularly our pipelines. We recognize that we have aging infrastructure all over the coun­try. Here in the Senate, Senator Blunt has voiced some ideas for emergency fuel waivers. I think that might be something we can consider. And then, finally, we might want to be look­ing to further increase our domestic energy production, certainly in a vari­ety of states, because that then works to overcome a shortage from any one area. So making sure that as we access our energy domestically, it’s not all in one region specifically, but really look­ing to branch out. So those are a few of the areas that I think from a policy perspective we can work to build on and enhance energy security.

Brad Penney: The Weatherization Assistance Program, which we talked about earlier, is really underfunded right now in the Continuing Resolu­tion at $68 million in FY 2014. From your perspective as an appropriator on the Energy and Water subcommittee, how would you assess the prospects for getting back at least to level fund­ing of $139 million, which was the final appropriations for FY 2013, or even to get to the administration requested level, which had been $184 million. How would you assess the prospects for that happening in the next CR?

Murkowski: Well, I’m not con­vinced that my crystal ball is very accurate today. I think we recognize this is a difficult issue. All those on this call would certainly agree that weatherization is an excellent pro­gram. We’ve all seen the federal lab studies that show that it decreases our energy consumption, and the benefits from a cost perspective are clearly there. But we do have some issues that we face with the Weatherization Assistance Program. Prior to the stim­ulus bill, weatherization was funded to the tune of about $300 million a year, and then when ARRA came along, there was an additional $5 million that was dumped onto that program back in 2009. I think what happened with that was it distorted the program, result­ing in only $128 million for FY 2013, and I think part of that was they were saying that they were still working off the excess funding. But the FY 2014 budget did propose to return it to the $248 million funding level. But when we look to where the Senate appropria­tions budget is right now, it’s calling for $190 million for FY 2014. The House’s number is dramatically lower at $77.1 million. So if you say, Okay, let’s just go ahead and split the differ­ence in a final budget conference, that puts us at about $133 million, which is really just an incremental hike—a tiny hike—over what is currently being allowed by the CR and over these past years. So weatherization is really going to be driven by the out­come of these new budget conference talks. If the talks between Congress­man Ryan and Senator Murray make progress on rolling back some of the sequestration, then the level of fund­ing in the CR might be able to rise, but it’s hard to be optimistic that the fund­ing will be near the Senate’s number of $190 million, which of course is clearly preferable to the $133 million but way less than the administration’s fund­ing request of $240 million. So the numbers are all over the chart here. But, again, how things proceed in this budget conference, in these talks that are starting right now, I think is really going to drive what we will see out of the Weatherization Assistance Pro­gram.

Penny: Thank you, Senator, very much. I appreciate your perspective. We just want to see this continue as a national program in all the states and territories.

Murkowski: And I do, as well.

Therriault: Senator, you know in the state of Alaska we’re moving for­ward on the energy front with an “all of the above” strategy, with the real­ization that what might be a good solution to help deal with energy in southeast Alaska is radically differ­ent than western Alaska or out on the Aleutian chain. And most of the states are moving forward with that kind of a program. What is your perspective on a federal energy plan that would be similar to those being developed by the states, and could it be done in coordination with the states’ energy planning?

Murkowski: I think it’s so impor­tant to recognize that, particularly when we’re talking about energy, it is regional. You think about what energy resources and assets they have down in the south part of the country, for instance. It’s really kind of quiet down there. You look at the opportunities that afford themselves in Alaska, and we truly have an “all of the above” energy opportunity. I think you all have seen the energy blueprint that I put out earlier in the year. It really hopes to jumpstart this dialogue on an “all of the above” energy strategy, but I don’t think it’s possible that we’re going to see a comprehensive energy approach like we did back in 2005 and 2007. What we’ve been doing here is trying to move forward with some more discrete bills with bipartisan support. We saw that with the hydro­power legislation that was passed just before we went on the August break, and then of course with the helium bill that we just passed in September. But I think it is important to remember that when we talk about an “all of the above” energy policy, it doesn’t neces­sarily mean one size fits all. And that is key. We have to ensure that regional flexibility in the policies acknowledges and appreciates and really accounts for the various regional differences that we see around the country. While I support an individual state’s ability to select and utilize the energy resources that work best for them, I think we need to make sure that it’s what works best for them, because what works in Arizona or Arkansas is probably not going to be what works best for Alaska, and that’s just our reality.

Therriault: You mentioned pull­ing off separate little pieces and moving forward on a bipartisan front, and the success that has had just recently. Is there a sense among your congres­sional colleagues that this was really well received by the general public? It was certainly well received by the state energy offices. And is there maybe a little bit of growing momentum that you and your colleagues should look for those other opportunities to pick out the things that there’s general agreement on and move forward if there’s not the momentum to pass a big piece of legislation?

Murkowski: There really is, Gene, and I think that’s important to recog­nize. Senator Wyden and I have been working together in a very concerted way to make sure that the commit­tee process works, that it really is bipartisan; and that with every piece of legislation, no matter how small it is or seemingly noncontroversial, we recognize that you’ve got to have that bipartisan cooperation and engage­ment, and that’s how we’re going to move things forward. A perfect exam­ple of this is a bill we dropped on the floor today. We introduced a critical minerals bill, and Senator Wyden is on as one of the prime cosponsors. It’s bipartisan—I think we’re up to nine­teen cosponsors, and it’s evenly divided between Republicans and Democrats. We’re also working to develop a bill to advance the development of geo­thermal resources. I’ve got another one out there, a marine and hydrokinetic bill that Senator Wyden is sponsoring with me. These are smaller, more dis­crete pieces, but when you put them all together—think about it: we’ve passed the helium, we’ve passed the hydro, if we can move on geothermal, if we can move on critical minerals, if we can move on marine hydrokinetic—after a point, you have cobbled yourself some real, serious advances in energy policy, and I will suggest to you that these are not happening by accident. There’s a real concerted effort to work together collaboratively, moving things through. We’re not making the front page of the New York Times or the Washing­ton Post, and I kind of like it that way because what we’re doing is we’re actu­ally getting things enacted into law. I don’t know if folks noticed it, but even during the government shutdown, Sen­ator Wyden and I moved through a bill on the Senate floor unanimously—this was the U.S.-Mexico Transboundary Hydrocarbons Agreement—and passed an energy bill through the Senate while we’re in the midst of a shutdown. So not everything is broken back here. I think that’s a good thing to keep in mind.

Honorable: Senator, you unveiled your Vision 20/20 plan at the NARUC Winter Committee Meetings this past February, which was very well received, very comprehensive, and very thoughtful. I’d like to ask you to dis­cuss the progress your plan has made, in light of your explanation regard­ing moving piecemeal and cobbling together a plan bit by bit.

Murkowski: Sure, I appreciate it, and I hope folks have had an oppor­tunity to see the plan. You should know that we are doing addendums or supplements to it by way of white papers that we’re putting out—just more thoughtful, in-depth analysis in certain areas. We did one on natural gas exports. We’re working on one on reliability, so we’ve got more to come. But I am glad that folks are continuing to think about the Energy 20/20 proposal. That was my hope when I released it, that it was going to be a conversation starter, not necessarily a legislative blueprint. But unlike some of the other reports that are released around here and immediately put up on a shelf, I have gotten a far better reception than perhaps I might have expected. We’re starting to see some consensus grow around many of the recommendations. I mentioned the critical minerals supply chain bill that, again, we are introducing today. I’ve got another bill that is still in the drafting process relating to the establishment of an energy trust fund, with a portion of the revenues from new energy pro­duction going to new energy research, and I’m looking forward to having that out on the street for review. I mentioned the two hydro bills that were largely in line with my 20/20 recommendations. Those have already been signed into law. I joke around here that Energy 20/20 was a Capitol Hill best seller for those energy wonks. While I’m not planning on doing a sequel, these white papers that we are working on, to really go a little deeper into detail, I hope will be equally well received. If you haven’t seen the white paper on the more narrow window for LNG exports, you might want to take a look at that. It’s on the committee website. And, again, we’re going to be releasing one soon on electric grid reliability, and we’ve got at least one more in the works as we speak. We are not interested in just putting 115 pages of paper out there and not seeing good work coming from it. I appreciate the input that we get from so many around the coun­try, from the folks there at NARUC and so many of the state energy offi­cials. Your input as we advance these initiatives is greatly appreciated, so thank you for doing that. I know it can be time-consuming, but the con­tributions from around the country are greatly appreciated.