Providing coverage of Alaska and northern Canada's oil and gas industry
January 2021

Vol. 26, No.2 Week of January 10, 2021

Murkowski, Machin lead on energy act

Allocates $850M for geothermal technology development, $6.6B for modernizing nuclear plants and developing advanced reactors

Kay Cashman

Petroleum News

The Energy Policy Act of 2020 signed into law as part of the omnibus package by President Donald Trump in December combines consensus provisions from the Senate’s American Energy Innovation Act (S. 2657) and the House’s Clean Economy Innovation and Jobs Act (H.R. 4447). It’s the first comprehensive modernization of the nation’s energy policies in 13 years and represents several years of hard work by the Senate Energy and Natural Resources Committee and the House’s Committees on Energy and Commerce and Science, Space, and Technology.

U.S. Sens. Lisa Murkowski, R-Alaska, and Joe Manchin, D-West Virginia, chairman and ranking member of the Senate Committee on Energy and Natural Resources respectively, led the multi-year effort to draft the legislation.

While the Alaska oil and gas industry came up short on gains from the act, renewable energy proponents and climate change activists benefited greatly from the $35 billion legislation.

Democrats are calling the package a “down payment” on climate change action that will bolster the incoming Biden administration's plans for aggressive efforts over the next four years, while Republicans see it as an investment in the next generation of energy technologies crucial to emissions reductions - but without government mandates, the Washington Examiner reported.

Breakdown of allocations

TecCrunch.com broke out the allocations in the spending package as follows:

* More than $4.1 billion for new technology initiatives with the front-runners being photovoltaics, new transportation technologies and energy-efficiency technologies.

* $1.5 billion set aside for new solar technologies and initiatives to expand solar manufacturing and recycling technologies.

* $2.6 billion for transportation technologies.

* $1.7 billion for reauthorization of the Weatherization Assistance Program.

*$3.44 billion earmarked for energy-grid technologies with $1.08 billion for short-term, long-term, seasonal and transportation energy storage technologies and $2.36 billion tagged for smart utility and energy distribution technologies.

* $625 million for new research, development and commercialization of onshore and offshore wind technologies.

* $850 million dedicated to geothermal technology development.

* $933 million for marine energy and hydropower technology.

* $160 million for hydropower generator upgrades, and upgrades to existing federal infrastructure through $180 million tagged for the Federal Energy Management Program.

* $6.2 billion earmarked for carbon capture utilization and storage technologies at industrial and energy sites.

* $447 million program for research and development for large-scale commercial carbon dioxide removal - with a $100 million grant for direct air capture competition at facilities that annually capture at least 50,000 metric tons of carbon dioxide.

* $6.6 billion for modernizing existing nuclear power plants and the development of advanced reactors.

* $4.7 billion for basic and applied research investments in the emerging fusion industry.

* $2.9 billion for Advanced Research Projects Agency-Energy, or ARPA-E, the energy advanced research arm of the government that was modeled after the U.S. military’s Defense Advanced Research Projects Agency, or DARPA, which helped create the internet. And “taking a page from the NASA playbook” which commercialized several technologies, the Office of Technology Transitions, or OTT, which serves as the central hub for technology transfer activities across the Department of Energy, is “being codified and supporting the kind of milestone-based projects that have been effectively used by the Air Force and the Department of Defense broadly,” TecCrunch.com reported.

“To cap it off, the new energy bill includes a directive to the Department of the Interior to target the generation of 25 gigawatts of solar, wind and geothermal production on public lands by 2025,” TecCrunch.com said.

* $500 million set aside for stakeholders in industries such as iron, steel, aluminum, cement and chemicals as well as transportation businesses that want to decarbonize.

“By making these critical investments now, the Energy Act of 2020 will help reduce our nation’s greenhouse gas emissions, bring good-paying jobs back to the United States, and allow us to export these technologies to growing markets abroad for years to come,” a summary posted by Murkowski said.

Months in final negotiations

Murkowski and Manchin’s joint Dec. 21 press release about the Energy Policy Act said they had spent months negotiating with Rep. Frank Pallone, D-New Jersey, chairman of the House Energy and Commerce Committee, and Ranking Member Greg Walden, R-Oregon of the House Committee on Energy and Commerce, as well as with Chairwoman Eddie Bernice Johnson, D-Texas, and Ranking Member Frank Lucas, R-Oklahoma of the House Committee on Science, Space, and Technology, to reach a “six-corner” agreement on the final package.

“The Energy Act … bipartisan package will foster innovation across the board on a range of technologies that are critical to our energy and national security, our long-term economic competitiveness, and the protection of our environment,” Murkowski said.

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