Manchin Explores Possibility of Energy, Climate Package With GOP

(Bloomberg) -- Democratic Senator Joe Manchin is exploring an energy and climate package aimed at winning enough Republican support to skirt the partisan budget reconciliation process that has held hostage hundreds of billions of dollars in potential spending on related priorities.

“If I can find something bipartisan, we don’t need reconciliation,” Manchin, of West Virginia, said in an interview on Monday.

A bipartisan energy package, like the infrastructure bill passed last year, could undercut the broader Democratic agenda but give President Joe Biden an election-year victory on an issue voters care about.

Manchin met with other senators from both parties Monday to “gauge bipartisan interest in a path forward that addresses our nation’s climate and energy security needs head on,” said his spokeswoman, Sam Runyon. 

Manchin told reporters after the meeting that one area of common ground could be reform of the federal oil and gas leasing process. The administration, which has sought ways to increase domestic oil production, has called on Congress to make oil drillers pay penalties when they don’t use leases.

“You’re going to have to have a leasing program that works, O.K., and making sure that leases are fair, and people are not sitting on leases,” Manchin said. “We need to look at all that,” he said. “We haven’t done that.”

Manchin also said Congress could focus on increasing domestic production of energy in the near term and provide incentives for climate-related projects in the longer term.

Read More: Manchin Suggests He’s Ready to Start Talks on Climate, Tax Bill

The approach could revive some of the $550 billion in climate and energy spending in the Build Back Better Act, which stalled in December after Manchin declared he couldn’t support it. He has since talked about a possible reconciliation package that would include energy, tax and drug pricing pieces along with substantial deficit reduction.

In addition to reform on permitting, a potential package could include revisions to federal land policy, aid for domestic pipelines, efforts to bolster production of both liquefied natural gas at home and abroad and critical minerals, a person familiar with the matter said. It’s possible the changes could be paired with hundreds of billions of dollars in new and expanded tax credits for wind and solar power, nuclear plants, biofuels and advanced energy manufacturing sought by Democrats and the White House and included in earlier iterations of the Build Back Better spending bill, the person said. 

Runyon didn’t immediately respond to a request for comment about the possible elements of a deal.

The move could be a long-shot. An effort to side-step the budget reconciliation process would require at least 10 Republicans to reach the 60 votes needed for passage, while at the same time winning the support of progressive Democrats in the House.

A bipartisan deal could also provide a path forward for other energy priorities that Manchin has called for in recent weeks, including action on Equitrans Midstream Corp.’s Mountain Valley Pipeline, construction of which stalled in his home state after a federal court in January rejected its permit to cross a national forest.

Manchin last month publicly called on the administration to move forward with a litany of energy requests including increasing oil-and-gas production on both federal and private lands, a new five-year Gulf of Mexico oil-and-gas leasing plan from the Department of Interior to replace one expiring in June, and the construction of new natural-gas pipelines and export terminals. 

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