Reconciliation: Natural Resources plows ahead, other bills stall

Lawmakers are preparing for a tense markup in the House Natural Resources Committee on legislation to expand mining and drilling.

May 05, 2025

One committee is moving ahead swiftly to advance its piece of the Republicans’ sprawling budget package, while other panels with power over energy and environment policy get bogged down.

The House Natural Resources Committee will begin marking up its language for the Republicans’ tax, energy and national security megabill on Tuesday, which would mandate swaths of new oil and gas leasing, lower royalties and change the environmental permitting process.

Chair Bruce Westerman (R-Ark.) — who is preparing for the possibility of a two day markup — is projecting the bill would slash $15 billion from the federal deficit, mostly from oil, gas and mineral revenues.

That figure appears sizeable, but it’s a fraction of what Republicans need to pay for an extension of the 2017 tax cuts and new spending on security and the border.

Other offsets are likely to come from cuts to energy and environmental programs and tax credits, but Republicans have struggled to make the numbers add up and also please lawmaker demands.

The Energy and Commerce, Ways and Means, and Agriculture panels delayed markups that were tentatively set for next week. Legislation from all three will include significant energy and environment provisions.

Rep. Don Bacon (R-Neb.), a moderate who drew a red line on Medicaid cuts last week, said he expected certain Inflation Reduction Act incentives to survive.

Republicans are using budget reconciliation to muscle the bill through. That process allows the majority party to clear legislation on fiscal matters by simple majority while avoiding the Senate filibuster, but tight margins mean the GOP has almost no room for error.

“I think they realize that you are going to be precision on the IRA. If you take stuff out — you can’t just abolish — there’s some things you got to keep,” Bacon said. “You can’t just [get rid of the whole thing] you need to do it surgical,” Bacon said.

Natural Resources

The Natural Resources Committee will be the first of the major energy and environment panels to mark up its part of the reconciliation bill when it convenes on Tuesday.

The bill would aim to drastically ramp up energy production by mandating quarterly onshore oil and gas leases while offering new offshore leases in the Western Gulf of Mexico and Alaska’s Cook Inlet. The bill also offers four new leases in the Arctic National Wildlife Refuge, a risky gambit after an initial attempt to open the preserve flopped.

The bill would return oil and gas royalties to pre-Inflation Reduction Act rates. That law, which Democrats passed using reconciliation in 2022, raised onshore and offshore royalty rates to 16.67 percent from 12.5 percent for 10 years. Offshore royalties were capped at 18.75 percent.

Committee aides believe the lowered royalties will produce increased interest and investment in the new lease sales being offered and, eventually, a boom in production. However, the U.S. consistently rakes in more federal revenues from royalties than leases.

The bill also makes significant changes to the environmental review and permitting process. Specifically, it would create a new fee that project sponsors can pay to accelerate reviews and limit litigation.

Green groups and Democrats are erupting at the provisions, which they are framing as a pay-to-play permitting scheme that would allow fossil fuel companies to buy their way out of tough scrutiny.

“Worst of all, it allows fossil fuel companies and other big polluters to buy their way out of meaningful review or public input into their projects,” said Kyle Jones, director of federal affairs at Natural Resources Defense Council. “So, that would mean one set of rules for the fossil fuel and logging barons, and another for the rest of us.”

House Republicans also moving to lower federal coal royalties, boost leasing and reverse Biden-era policies that halted non-coal mining in states like Alaska and Minnesota in the bill.

Democrats are expected to launch an all-out assault on the measure at the committee’s markup on Tuesday. They’re also likely to draft a number of amendments that force the committee’s Republicans to take uncomfortable votes.

Ranking member Jared Huffman (D-Calif.) told POLITICO’s E&E News that the bill is “worse than anything I could have imagined.”

“Without hyperbole, this is surely the most aggressive attack on the environment, public lands and clean energy that Congress has ever seen,” Huffman said. “It is just breathtaking what they are doing, and all of it to enable giveaways to Big Oil and tax cuts for billionaires. It’s just shameful.”

The bill would also zero out several unobligated IRA funds for climate causes, require more timber harvests and create a new revenue-sharing mechanism for renewable energy on public lands. While once discussed, outright public land selloffs do not appear in the bill, at least for now.

Tax credits, climate cuts

The Transportation and Infrastructure Committee was one of the first to approve its budget reconciliation language. Not only did the panel cut IRA spending, it also moved to enact a new fee on hybrid and electric vehicles.

The committees with jurisdiction over the IRA’s clean energy tax credits and other climate spending, however, still seem a ways away from reaching an agreement.

Lawmakers for and against keeping at least some incentives from the climate law have been pelting Ways and Means Chair Jason Smith (R-Mo.) with letters.

Bacon said, “Ethanol and biofuels are important to the Midwest. So I think almost all the GOP in the Midwest would say we want to keep biofuels, aviation fuel [credits]. And 40 percent of our energy in Omaha comes from wind. People have invested millions and millions of dollars for these tax credits. So at least you got to grandfather them.”

When it comes to Energy and Commerce, which may cut appropriated EPA and Department of Energy funding related to climate action, the reconciliation bill is also far from complete.

“This all still needs to get hashed out, and what I can tell you is that there’s nothing written yet from our committee,” said Rep. Bob Latta (R-Ohio), chair of the Energy and Commerce Subcommittee on Energy.


By:  Garrett Downs
Source: E&E Daily