Overnight Energy: EPA declines to regulate chemical tied to developmental damage | Democrats unveil $1.5T infrastructure plan | Land management bureau eases requirements for oil, gas royalty cut requests

HAPPY THURSDAY!  Welcome to Overnight Energy, The Hill’s roundup of the latest energy and environment news. Please send tips and comments to Rebecca Beitsch at rbeitsch@digital-staging.thehill.com. Follow her on Twitter: @rebeccabeitsch. Reach Rachel Frazin at rfrazin@digital-staging.thehill.com or follow her on Twitter: @RachelFrazin.

CLICK HERE to subscribe to our newsletter.

PASSING ON PERCHLORATE REGS: The Environmental Protection Agency (EPA) announced Thursday that it will not regulate a chemical used in rocket fuel that has been linked to developmental damage. 

The agency said in a statement that the chemical, perchlorate, “does not meet the criteria for regulation as a drinking water contaminant” under the Safe Drinking Water Act. 

The EPA has found that up to 620,000 people might be consuming water that has a perchlorate concentration higher than “levels of concern.”

It said in a draft final action that this number was too small to present a “meaningful opportunity for health risk reduction.”

Critics blast move: “Today’s decision is built on science and local success stories and fulfills President Trump’s promise to pare back burdensome ‘one-size-fits-all’ overregulation for the American people,” EPA administrator Andrew Wheeler said in a statement. 

“State and local water systems are effectively and efficiently managing levels of perchlorate. Our state partners deserve credit for their leadership on protecting public health in their communities, not unnecessary federal intervention,” he added. 

Agency documents have stated that exposure to perchlorate can cause issues with the thyroid gland, which is critical for growth and development of fetuses, babies and children. 

“Today’s decision is illegal, unscientific, and unconscionable,” said Erik Olson, senior strategic director for health at the Natural Resources Defense Council, in a statement.

“The Environmental Protection Agency is threatening the health of pregnant moms and young children with toxic chemicals in their drinking water at levels that literally can cause loss of IQ points. Is this what the Environmental Protection Agency has come to?” Olson added.

Read more about the agency’s decision here. 

ANOTHER SHOT AT INFRASTRUCTURE: House Democrats unveiled a $1.5 trillion infrastructure plan Thursday that calls for a huge increase in funding to repair roads and bridges while expanding broadband access in rural areas.

Democrats described the bill as the biggest legislative effort to fight climate change, with Speaker Nancy Pelosi (D-Calif.) saying the package would “make real the promise of building infrastructure in a green and resilient way.”

“It’s job-creating in its essence, but it’s also commerce-promoting. So it grows the economy of our country,” she said.

The legislation is the latest attempt to advance an infrastructure package that has been discussed since the early days of the Trump administration but continuously fails to gain traction.

But lawmakers are more optimistic this time around as Congress considers more spending to help stabilize the economy amid fallout from the coronavirus.

The infrastructure bill, known as the Moving Forward Act, includes $25 billion for drinking water, $100 billion for broadband, $70 billion for clean energy projects, $100 billion in funding for public housing and $25 billion for the postal service. But its largest component is a $500 billion Democrat-led bill from the House Transportation Committee that has sparked Republican complaints of exclusion.

Expected vote comes amid tensions: Tensions on the Transportation Committee have flared largely over the green measures included in the bill, which factors in climate change before undertaking projects and also requires states to meet certain greenhouse gas emission goals when they receive funding.

“Those who don’t believe in climate change, tough luck. We’re going to deal with it,” Committee Chairman Peter DeFazio (D-Ore.) said.

Republicans on the committee have nicknamed the legislation the “my way or the highway bill,” airing frustrations that they were excluded from its crafting.

“We were not given the opportunity to address any of our priorities in this legislation,” Rep. Sam Graves (R-Mo.), the ranking member on the committee, said when the bill was first introduced, arguing it “will leave rural America even further behind, and numerous new green mandates and extreme progressive goals are woven throughout.”

Democrats have yet to outline how they will pay for the bill, but Pelosi said “with the interest rates where they are now there’s never been a better time for us to go big.”

A vote on the legislation is expected before the Fourth of July recess. While the bill is likely to pass the Democrat-led House, it will face greater resistance in the GOP-led Senate.

“As you know, the Grim Reaper said nothing is ever going any place in the Senate,” Pelosi said, referring to Senate Majority Leader Mitch McConnell (R-Ky.).

Read more about the legislation here. 

ROYAL TEA: The Bureau of Land Management (BLM) has changed its guidance for companies that want to see their royalty payments for oil and gas leases reduced, lessening the requirements for what companies need to prove in order to get the rate cuts. 

The bureau’s prior guidance, issued in April, stated that companies applying for royalty relief on leased federal lands had to show that leases are “uneconomic at the current royalty rate, but would be economic with a royalty rate reduction.”

The new guidance, however, requires only that the leases are “uneconomic at the current royalty rate.”

Democrats, in a letter to the Interior Department, which oversees the bureau, argue that this change puts the bureau in violation of the Mineral Leasing Act, which gives the department the authority to grant royalty relief if applicants show “that a reduction of that rate is necessary to promote development of the lease.”

“By removing the requirement that companies show that royalty reduction is necessary to develop the lease, BLM is not subjecting applicants to the standard needed to comply with the Mineral Leasing Act,” said the letter from Democratic Reps. Raúl Grijalva (Ariz.), Alan Lowenthal (Calif.) and Mike Levin (Calif.). 

“This subverts one of the sole arguments for the public benefit of reducing royalties: that the royalty reduction is necessary to enable the lease to continue producing,” they wrote. “This is a ludicrous outcome that provides an extremely generous subsidy to the oil and gas industry while robbing taxpayers and states of valuable revenue.”

Administration pushes back on criticism: The BLM, in a statement to The Hill, disagreed with the lawmakers’ interpretation of the Mineral Leasing Act. 

“Neither the MLA nor the regulations require a BLM determination that a royalty reduction renders a lease to be economic,” the agency said, adding that the new guidance “clarifies and more closely aligns with the statutory and regulatory standards.”

“Career experts at the Bureau approving of some of these applications for only up to 60 days has been in the best interest of conservation and encourages the greatest ultimate recovery of our natural resources,” the agency said. 

The original guidance was issued in April after some in the oil and gas industry asked the administration to reduce the rates they were paying to lease land from the federal government for oil and gas development amid low prices related to the coronavirus pandemic.

The Interior Department declined to issue a wholesale royalty cut, but instead said that companies who wanted royalty rates should apply for them. 

The agency has granted 144 requests for royalty relief and denied 66 requests since April 1, according to data available on the BLM website. It has only posted data from three of its 11 state offices.

Read more about the guidance here. 

OUTSIDE THE BELTWAY:

The Gas Industry Is Paying Instagram Influencers to Gush Over Gas Stoves, Mother Jones reports

Vectren bucks Indiana legislature with plan to reduce coal mix 78% to 12% by 2025, Utility Dive reports

Slip-up reveals Chevron ties to architect of climate attack, E&E News reports 

IEA outlines $3 trillion green recovery plan for world leaders to help fix the global economy, CNBC reports

ICYMI: Stories from Tuesday…

Petroleum industry says demand grew 14 percent last month amid economic reopening

Research links climate change to premature, underweight or stillborn babies

Democrats unveil $1.5 trillion infrastructure plan

Land management bureau lessens requirements for oil and gas royalty cut requests

EPA declines to regulate rocket fuel chemical tied to developmental damage

FROM THE HILL’S OPINION PAGES:

We still need coal to ensure power grid reliability, argues Bernard L. Weinstein, associate director of the Maguire Energy Institute