Roundtable Weekly -- January 10, 2020

Energy and Climate Policy

House Democrats Outline Climate Legislation, Address Buildings and Energy Efficiency

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House Democrats on Jan. 8 released a legislative framework on climate policy that addresses buildings and energy efficiency among its sector-specific proposals. The goal for the House Energy and Commerce Committee’s Climate Leadership and Environmental Action for Our Nation’s (CLEAN) Future Act is to achieve overall net-zero greenhouse gas emissions (GHG) for the United States by 2050.

  • The legislative text of the draft CLEAN Future Act will be released by the end of this month while hearings and stakeholder meetings continue throughout the year. (Committee news release, Jan. 8).

  • The proposal addresses the efficiency of new and existing buildings, as well as the equipment and appliances that operate within them.  The bill proposes national energy savings targets from continued stringency of model building energy codes (frequently adopted into law at the state and local level), with a requirement of “zero-energy-ready buildings” by 2030.

  • The legislative framework also proposes requirements on utilities and other retail electricity suppliers to de-carbonize the U.S. electric grid.  Under the proposal, they must provide an increasing supply of clean electricity to consumers starting in 2022, rising to 100 percent clean energy by 2050.

  • The legislative framework will also direct the Federal Energy Regulatory Commission (FERC) to facilitate the integration of localized distributed energy, energy storage, and renewable energy resources into the electric grid.

  • While the CLEAN Future Act proposal is not expected to garner support from Republicans, measures that would “clean” the electric grid and direct FERC to modernize energy markets could theoretically impact emerging obligations on building owners to comply with certain local-level carbon reduction mandates (such as New York City’s Local Law 97.)  (See Roundtable Weekly, April 19, 2019)

  • Meanwhile, the House Select Committee on the Climate Crisis is expected to issue legislative policy recommendations by March 31, 2020.  (See Roundtable Weekly, October 25, 2019)

  • The Real Estate Roundtable submitted detailed energy and climate policy recommendations to the House Select Committee on November 21, 2019.  The comments offer a suite of priorities developed by The Roundtable’s Sustainability Policy Advisory Committee (SPAC), including:

* Improve the model building energy codes process by enacting the Portman-Shaheen Energy Savings and Industrial Competitiveness (ESIC) Act. (Roundtable Weekly, September 27, 2019)
 

* Enhance EPA’s voluntary ENERGY STAR incentive programs for both commercial buildings and tenants.

* Create meaningful accelerated depreciation periods to encourage investments in high performance equipment to retrofit existing commercial and multifamily buildings. (Roundtable Weekly, May 10, 2019)

  • House Speaker Nancy Pelosi (D-CA) has stated the House will act on a climate bill in 2020 (Bloomberg Environment, Dec. 6, 2019).  Majority Leader Steny Hoyer (D-MD) also told reporters this week that climate policy would be a "huge issue" this year. (E&E News, Jan. 9)

  • In the Senate, a different approach to energy policy has evolved over the past year.  The Senate Energy and Natural Resources (ENR) Committee passed 52 bills in 2019 on a largely bipartisan basis.  Several of these bills address commercial and residential real estate, including the Energy Savings and Industrial Competitiveness Act (ESIC) Act (Portman-Shaheen), long-supported by The Real Estate Roundtable.

  • The ESIC Act “is exactly the kind of smart, forward-looking policy that will help building owners respond to our modern, evolving economy” Roundtable President and CEO Jeffrey DeBoer stated in a Senate news release upon the bill’s introduction this past summer.  (Roundtable Weekly, July 19) (Video of DeBoer’s statement)

Energy and climate legislation will be a focus of discussion during The Roundtable’s upcoming January 28 State of the Industry Meeting in Washington.  The Roundtable’s Sustainability Policy Advisory Committee (SPAC) will also meet on January 29.

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Infrastructure

Trump Administration Proposes Changes to Environmental Reviews to Speed Federal Infrastructure Projects

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The Trump Administration – in a continuing effort to streamline government approvals of major infrastructure projects such as highways, airports, tunnels and pipelines – yesterday proposed the most significant changes in over four decades to federal-level environmental review requirements.  (Watch White House news conference video) . 

  • The proposal by the White House’s Council on Environmental Quality (CEQ) would affect implementation of the National Environmental Policy Act (NEPA).  Comments on the proposal are due by March 10, 2020.

  • ”[W]e want to build new roads, bridges, tunnels, highways bigger, better, faster, and we want to build them at less cost.  That is why, for the first time in over 40 years, we are issuing a proposed new rule … completely overhaul the dysfunctional bureaucratic system that has created these massive obstructions,” President Trump said yesterday at a news conference unveiling the proposal.

  • He added, “In the past, many of America’s most critical infrastructure projects have been tied up and bogged down by an outrageously slow and burdensome federal approval process. The builders are not happy.  Nobody is happy.  These endless delays waste money, keep projects from breaking ground, and deny jobs to our nation’s incredible workers.”  (White House remarks, Jan. 9)

  • According to CEQ, U.S. federal agencies prepare approximately 170 Environmental Impact Statement per year, which average 600 pages in length and take 4.5 years to conclude.  (Reuters, Jan. 9)

  • White House Council on Environmental Quality Chairwoman ,Mary Neumayr, stated at yesterday’s event, “It’s important to note that the proposal would reform the process of gathering information on environmental effects, but would not change any substantive environmental law or regulation, such as the Clean Air Act, the Clean Water Act, and the Endangered Species Act.”

  • Transportation Secretary Elaine Chao also noted during the news conference, “We all care about the environment.  What we are talking about are cumbersome, unnecessary, overly burdensome, duplicative, and outdated regulations.  Many of these regulations have not been updated, modernized, in decades.  What we’re seeking is commonsense solutions.” (White House remarks, Jan. 9)

  • The Administration’s proposal to streamline the infrastructure approval process complements similar, bipartisan efforts passed by the Senate Public Works Committee in July to speed-up delivery for infrastructure projects.  (Roundtable Weekly, Aug. 2, 2019)

  • Secretary Chao has addressed the need to streamline the government approval process affecting infrastructure projects for years, including at The Roundtable’s Spring 2017 Meeting in Washington, DC.

  • The Roundtable has been a long-standing advocate of increased national infrastructure investment to benefit the economy, job creation and local communities.  In June 2017, Roundtable President and CEO Jeffrey D. DeBoer addressed the infrastructure permitting issue on CNBC’s Squawk Box.  “We need to streamline and make a lot more efficient the permitting process in a lot of these infrastructure projects.  That’s something the President wants to do and it’s hard to argue against it.”  DeBoer added, “Permitting is a key part of lowering the costs, lowering the timeframe and reducing the amount of money that is needed for these projects.”  (DeBoer on Squawk Box

It is unlikely that the Administration’s proposal will be finalized before the 2020 general election so that federal agencies can begin applying the updated review criteria.  A core issue regarding the proposed changes is whether the government must incorporate climate change concerns as it analyzes an infrastructure project for approval. 

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Homeland Security

Industry and Federal Agencies Share Threat Information Amid Recent International Tensions and Homeland Security Concerns

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During recent military actions between the United States and Iran, the real estate industry engaged in intensive information-sharing efforts with government agencies on a variety of homeland security concerns.

  • As international tensions increased, informational bulletins on the potential for homeland security threats were shared by federal homeland security officials through the Real Estate Information Sharing and Analysis Center (RE-ISAC) – a public-private information sharing partnership organized and managed by The Real Estate Roundtable.

  • The Roundtable’s Homeland Security Task Force (HSTF) – co-chaired by Roundtable members Dan Kennedy (URW) and Charlie McGonigal (Brookfield) – works closely with the REISAC and federal agency partners on protective measures that CRE businesses may consider as they implement infrastructure resistant to physical damage and cyber breaches. HSTF also addresses a variety of CRE homeland security issues, including the recently reauthorized Terrorism Risk Insurance Act (TRIA).

  • The REISAC sends a Daily Report to members to raise awareness on domestic concerns and cyber threats affecting the U.S. commercial facilities sector, while sharing guidance from the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency (CISA).

  • On Jan. 3, CISA conducted a situational update on Iranian-U.S. tensions with industry contacts. The conference call also addressed planning and preparedness efforts related to cyber, physical, and communications readiness – and coordinating information for reporting suspicious activity and/or events related to the events.

  • On Jan. 6, CISA released an alert on “Potential for Iranian Cyber Response to U.S. Military Strike in Baghdad.”  The same day, The New York Post reported that a senior adviser to Iran's president posted a tweet on Sunday with a link to a Forbes article listing all of The Trump Organization's significant properties, along with a quote from the late Ayatollah Khomeini threatening revenge against any enemies of Islam.

  • The Daily Beast reported on Jan. 7 that an anonymous senior member of the U.S. intelligence community said Trump Tower in Midtown Manhattan could be more effective a target than even the White House.

  • The RE-ISAC on Jan. 8 shared the retail-focused BMAP Special Advisory Bulletin which warned that, “individuals inspired to commit acts of terrorism may try to acquire or legally purchase common household items such as explosive precursor chemicals (EPCs), explosive powders, and IED components at retailers in your community to construct IEDs for use against infrastructure targets.”  The bulletin also provided a list of “Suspicious Activity and Purchasing Behavior: Recognize and Report.”

  • The RE-ISAC also recently distributed an announcement regarding a collaboration with the FBI and InfraGard National Capital Region to launch the Commercial Facilities Cyber Working Group (CCWG).  Those who work at the intersection of commercial facilities and information security are invited to join the new Working Group by registering at https://cf.epicplatform.com.  Additional ontact information for the REISAC is available here.

The next Homeland Security Task Force (HSTF) meeting is scheduled for Jan. 29, in conjunction with The Roundtable’s State of the Industry Meeting on Jan. 28 in Washington, DC.   

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