COMMENTARY: House Takes Steps to Avert Government Shutdown, but Senate Future Uncertain – Tim Tarpley

On Sunday night, House Republicans released a draft CR funding bill that would prevent a partial government shutdown next month. In addition to the government funding, the package also included a number of border security measures sought by conservatives. These measures included language that would restrict asylum eligibility for migrants journeying to the U.S.-Mexico border, reinstate family detention, heighten penalties for visa overstays and restart border wall construction, among other things.

The draft CR would extend current funding through October 31, while cutting 8.1% from all nondefense accounts except for the Department of Veterans Affairs and disaster relief. That extension would give lawmakers an extra month to try to complete fiscal 2024 appropriations that are otherwise needed by September 30.

Equally as important as to what is included in the package is what is not. Notably, the bill doesn’t include additional Ukraine aid or disaster relief, which the Biden Administration has requested. Some members of the Republican caucus have been calling for a reevaluation of our support for Ukraine. Without that language included, it appears unlikely that the Senate will take the House measure as is, so additional negotiations are almost a given with only two days to go. Many hardline conservatives in the House are also expressing concerns with the package, saying it does not go far enough in cutting government spending or pushing back against the Biden Administration.

The bill is set for floor consideration this week, along with the fiscal 2024 Defense spending bill that stalled earlier this month due to objections from Republicans. What does this all mean for the energy sector? Well first, a potential protracted spending fight and the resulting government shutdown could further delay the already delayed OCS lease sales that are long overdue. Second, it may further delay the release of the SEC rule, which many believe could be released in late November.

A protracted government shutdown could also slow the dolling out of IRA grants and guidance and will certainly push back the implementation of the methane rule at EPA. It is too early to tell what the likelihood is of a shutdown at this point, however the next week or two will be critical to see if the impasse can be avoided and what the implications will be to our sector.

OIL PRICES REMAIN HIGH AS WILL ENERGY’S ROLE IN POLITICS

As of Wednesday, WTI was over $90 a barrel, which is the highest price we have seen all year. If these high prices remain in the coming months, they will guarantee that energy will remain high on the political radar for both parties. The issue will likely play front and center in the election season.

While inflation has cooled slightly, high energy costs represent a direct threat to the President and his party. High prices may cause some political reevaluation of many upcoming Biden Administration energy-related provisions. The SEC rule is being floated to be dropped in late November, however should these high prices continue, the administration may reevaluate. The same thing goes for the methane rule.

We can also expect Republican Presidential hopefuls to begin to message more on energy and how efforts to slow down leasing by the Biden Administration have raised prices for American consumers. In the first Republican presidential debate energy issues took somewhat of a backburner, but we can expect that to change should high prices continue.

Tim Tarpley, Energy Workforce President, analyzes federal policy for the Energy Workforce & Technology Council. Click here to subscribe to the Energy Workforce newsletter, which highlights sector-specific issues, best practices, activities and more.