Few events will have a more profound influence on politics and policy in 2024 than the November Election.
With less than a year until the 2024 General Election, the country remains just as politically divided as it did the last time the nation elected a President. Inflation, multiple foreign policy crises and feelings of dissatisfaction and pessimism for the future puts voters in a position where their focus is less on voting for their preferred nominee and more on voting against the candidate they fear will put the country on the wrong path.
All of this will influence policies that affect the business community, including NATSO members.
In Congress, Republicans have an easier map to defend and are well positioned to retake the Senate. Vulnerable Democratic incumbents are running for reelection in Republican leaning states. In the House of Representatives, Democrats are slightly better positioned than Republicans to win a majority, but neither party is expected to win enough seats to easily govern a fractured chamber.
Regardless of who wins a majority in 2024, the departure of senior members -- 11 in November alone -- means the next Congress will have fewer experienced legislators and deal makers. Among them, was Former House Speaker Kevin McCarthy, who vacated his seat at the end of December 2023.
As the Presidential election cycle accelerates, the opportunities to enact thoughtful, bipartisan legislation will be narrow.
2024 KICKOFF
Senate passage of a continuing resolution (CR) (H.R.6363) in November 2023 temporarily funded the federal government through early 2024. The CR funded four appropriations bills through Jan. 19, 2024, and eight appropriations bills through Feb. 2, 2024.
Kicking off a new year under a CR generally has an overall limiting effect on Congressional and agency actions as Congress ultimately hasn’t made final funding determinations for the fiscal year.
The Senate is expected to continue negotiations on a package that would include aid for Israel and Ukraine in exchange for funds to secure the border. Meanwhile, the CR, combined with the Presidential election, is expected to have a trickle-down effect, hindering the advancement of certain NATSO policy priorities.
ISSUES OVERVIEW
In 2024, NATSO will advance market-oriented policies that can enhance the fuel supply while lowering fuel prices for consumers and improving the environmental attributes of transportation energy.
NATSO will continue to advocate for policy reforms ensuring that NATSO’s members can profitably invest in electric vehicle charging stations as well as work with industry allies to pursue more achievable timetables for the transition to electric trucks. Although the enactment of legislation that includes biofuel or energy tax provisions is unlikely before the election, NATSO continues to advocate for a robust biodiesel blenders’ tax credit and parity with other renewable fuels using the same feedstocks.
The early 2024 CR appropriations deadlines make it unlikely that biofuel or energy tax provisions will make their way into spending legislation in the near-term. Energy tax provisions generally ride on a year-end omnibus appropriations bill. The CR impedes the prospects of an energy tax package as the CR spending bill is generally not used for tax cut packages.
SMALL REFINERY EXEMPTIONS
The U.S. Court of Appeals for the 5th Circuit in November struck down a Biden Administration decision to deny small refinery exemptions.
Under the RFS, small refineries processing up to 75,000 barrels per day may request compliance waivers if they can demonstrate “disproportionate economic hardship.” During the Trump Administration, EPA came under fire for issuing a high volume of SREs and abusing the exemptions to undercut the RFS’s mandate to increase biofuel blending.
EPA reversed course during the Biden Administration, when the 10th Circuit found that the Trump EPA failed to explain its decision to discount earlier agency statements that refiners pass through their Renewable Identification Number (RIN) costs and are therefore unharmed by the RFS.
NATSO disagrees with the recent 5th Circuit decision, as small refinery exemptions fundamentally impact the entire intent of the RVO process by lowering demand for biofuels and diminishing the value of the investments the industry has made in response to Congressional policy.
NATSO has long advocated for a transparent process to guide EPAs assessment of small refinery waiver requests to ensure that such exemptions don’t undermine the intent of the Renewable Fuel Standard and decrease demand for biofuels.
While the immediate impact of the 5th Circuit ruling is limited, it is possible in 2024 that EPA could appeal the court’s decision, further delaying resolution of the small refinery exemptions and hindering industry’s ability to determine the extent to which these exemptions are undercutting the annual mandate.
SUSTAINABLE AVIATION FUEL
The Department of Treasury in December issued a guidance document governing the implementation of the new sustainable aviation fuel (SAF) blenders’ tax credit.
The SAF tax credit, originally enacted under the Inflation Reduction Act of 2022, would allow for up to a $1.75 per gallon credit for SAF blended into the jet fuel supply. To qualify for the incentive, SAF producers must certify that the fuel reduces carbon emissions by 50 percent compared with petroleum-based jet fuel. SAF, which uses the same feedstocks as biodiesel and renewable diesel, was afforded a higher tax credit beginning this year despite offering no additional environmental benefits.
Treasury has proposed to allow a new version of the Argonne GREET model, along with a model used under the Renewable Fuel Standard, to be used to calculate the value of the credit. Treasury also will allow the use of the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) model to calculate the value of the credit.
Treasury determined that the GREET model in its current form, “is not sufficient to calculate lifecycle greenhouse gas emissions,” but clarified that a new version of the GREET model, currently under development, will be eligible when finalized. The updated version of the GREET model is expected to be announced in March of next year, though details about the updates to the model were not included in the guidance.
NATSO continues to oppose special treatment for SAF, and advocates for parity between biodiesel and other alternative transportation fuels.
As the GREET model is updated in the coming months, NATSO will keep a close eye to ensure that the process is driven by science rather than politics. NATSO thinks that to survive judicial review the GREET model would have to be changed substantially if SAF producers want to utilize it to measure their emissions profiles.
ELECTRIC VEHICLE CHARGING
In 2024, the Administration will continue to implement the National Electric Vehicle Charging Infrastructure (NEVI) grants established under the Bipartisan Infrastructure bill.
The Biden Administration is facing increased scrutiny over the $7.5 billion program designed to kick start a nationwide network of electric vehicle charging stations. It has been two years since the program was created, and critics are calling the limited number of charging stations in the market as “a bitter economic pill to swallow.”
As of Oct. 1, 2023, five states had announced final or conditional awards for charging infrastructure grants, and eight more had opened their NEVI application process.
Pilot Travel Centers became the first refueling location in the United States to activate electric vehicle charging stations through the National Electric Vehicle Infrastructure (NEVI) Program. Underscoring the pivotal role that fuel retailers play in building out a safe and reliable nationwide network of DC fast-charging stations, NEVI grants have been awarded to many NATSO members, including BP, Love’s Travel Stops & Country Stores, Onvo, Pilot Flying J, Sheetz, Travel Centers of America, and Wawa.
NATSO anticipates legislative or regulatory activity in Arizona, Colorado, Ohio, Nebraska, South Carolina, Pennsylvania and Florida in 2024. Many of these represent states where legislative activity that began in 2023 didn’t ultimately make it over the finish line and is expected to resurface in 2024.
NATSO in 2024 will continue to engage with the Charge Ahead Partnership, which continues to raise public awareness about the need for market reforms that ensure a level playing field and the potential for returns on investments made in EV charging stations.
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