Washington Insider -- Tuesday

Focus on Infrastructure, Again

Here’s a quick monitor of Washington farm and trade policy issues from DTN’s well-placed observer.

Court Sends Some Small Refinery Exemptions Back To EPA

EPA has to reconsider small refinery exemptions (SREs) issued for the 2016 compliance under the Renewable Fuel Standard (RFS), according to a decision from the U.S. Court of Appeals for the 10th Circuit.

The court ruled that exemptions granted to Holly Frontier’s Woods Cross and Cheyenne refineries and CVR Energy’s Wynewood refinery were improper, stating the agency overstepped its authority as the refiners had not previously been granted SREs. The court said the statute states that any SRE granted to a refinery has to be in the form of an “extension” after 2010, yet the three refineries were given exemptions for the first time in the 2016 compliance year.

"Because an 'extension' requires a small refinery exemption in prior years to prolong, enlarge or add to, the three refinery petitions in this case were improvidently granted," the court said. "We remand these matters to the EPA for further proceedings consistent with this opinion."

EPA approved 19 of the 20 SRE requests received for the 2016 compliance year and it rejected only one of the requests.

There are currently 21 SRE requests pending at EPA for the 2019 compliance year, already at half the level that were requested for the 2018 compliance year.

Extension Of Comment Period On NEPA Reforms Urged

A 180-day extension of the 60-day comment period on the Trump administration’s notice of proposed rulemaking (NPRM) on the National Environmental Policy Act (NEPA) reforms has been requested by the Council on Environmental Quality.

Given that the proposed rule would impact how “every single agency in the federal government considers the health and environmental impacts federal decisions,” the group said the 60-day comment period and two public meetings scheduled by EPA are “woefully inadequate” for the plan the group says would impact more than 50,000 decisions made each year by the federal government.

They called for additional public meetings to be held in both rural and urban areas versus the two proposed by EPA to be held in Denver, Colorado, and Washington, D.C.

Washington Insider: Focus on Infrastructure, Again

There is considerable media attention this week on the nation’s infrastructure needs and Bloomberg is reporting that as House lawmakers return to Washington after a recess week there are new plans “to roll out a draft infrastructure package.”

The House Ways and Means Committee will be tasked with the responsibility of finding ways to fund new legislation. It plans to meet Wednesday to discuss funding and financing proposed projects.

Any effort to pass a comprehensive infrastructure package in an election year would face some roadblocks, Bloomberg thinks, including the need for the president to find common ground with House Democratic lawmakers.

The administration itself has called for a big infrastructure package, but it may have problems persuading congressional Republicans to support that type of legislation.

The 2017 tax law, which received no Democratic votes in either chamber, imposed new limits on advanced refund bonds, which cities and counties use as a way to finance infrastructure projects. “To do something really big on infrastructure is going to take a significant hand-holding exercise, obviously, it’s going to have to be a bipartisan effort,” said Andrew Grossman, chief tax counsel for Ways and Means Chairman Richard Neal, D-Mass. “Whether or not we can get there in an election year remains to be seen but we’re still optimistic.”

The New York Times also focused on infrastructure last week, noting that state voters approved $7.7 billion in transportation spending last year, but the federal government needs to do much more to fix the nation’s ragged roadways.

Drivers in America topped 3.2 trillion miles in 2018, much of that on the countless roads and bridges in dire need of repair and improvement. The Times cited the American Society of Civil Engineers’ bleak picture of the country’s byways in its Infrastructure Report Card in the spring of 2017, the most recent of its every-four-years editions. The organization’s assessment resulted in an overall D-plus grade. Road conditions earned an underwhelming D, while bridges slid by with a C-plus. In all, 45% of the nation’s roads were deemed in poor condition.

Since then, the group estimates that vehicle travel has increased 17% alongside an unequal 5% increase in new roadways. The result has been 6.9 billion hours a year of traffic delays, which cost motorists roughly $616 each in 2017 — the last year tracked.

Federal spending on road infrastructure is struggling to keep up, the Times says. It notes that federal lawmakers staved off a cut to the national Highway Trust Fund last year that would have pulled $7.6 billion away from state highway budgets. This has left the states to fill in some of the gaps and voters around the country last year approved major transportation investments via ballot measures.

“The ballot results are a great reminder infrastructure investment remains one of the few areas where red states, blue states, Republicans and Democrats can all come together,” Dave Bauer, president of the American Road & Transportation Builders Association, said. “It should also demonstrate to lawmakers on Capitol Hill that the public will be on board for the passage of a long-term bill that significantly boosts highway and transit investment at the federal level.”

Jim Tymon, executive director of the American Association of State Highway and Transportation Officials, said that “States and localities are doing their part and this is a great opportunity for the federal government to do its part.” The American Society of Civil Engineers says there is a huge backlog of federal highway projects that need funding, to the tune of $836 billion.

The Transportation Investment Advocacy Center at the road builders group said that most of the ballot measures involved property tax increases to pay for road repairs. The road builders group reported that 57 ballot initiatives across 12 states had the potential to raise $20 million in revenue each.

All told, voters approved $7.7 billion worth of investment into transportation projects and $1.9 billion in continued funding over the next quarter-century. Washington State and Colorado were among the few to vote for tax cuts that are likely to squeeze highway budgets.

The issue is important at the local level, too. The United States Conference of Mayors published a campaign agenda wish list in December that called on 2020 presidential candidates to say what they would do to stabilize the Highway Trust Fund, regulate new transportation technology and strengthen public transportation.

President Trump’s initial infrastructure plan — coming in widely mocked “infrastructure week” presentations stalled several times before resurfacing again last spring. A $2 trillion infrastructure package seemed politically plausible but appears sidelined by the impeachment issue.

So, we will see. State and local governments are working hard to get things done, but we need the federal government to step up with a bill, the Times said. Whether a bi-partisan effort, even for a widely supported investment, can be defined in the current toxic political environment remains to be seen and should be watched closely by producers as options are considered, Washington Insider believes.

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