US Government Shutdown Is Reducing the Flow of Energy

The longest federal government shutdown in US history will have ripple effects throughout the energy industry. The partial government shutdown has left approximately 800,000 federal workers furloughed and much of the country confused about who is and is not open for business. 

The US Department of Energy (DOE) remains relatively undisturbed by the shutdown, due to a separate, earlier receipt of funding through September 2019. However, the US shares federal energy regulation responsibilities across several departments and agencies. As many experts who operate in the field remain out-of-office, backlogs are developing that will have ripple effects throughout the entire energy industry. 

Five Energy Stops to Watch

Despite DOE’s open doors, energy activities—notably those at the Environmental Protection Agency (EPA) and Department of Commerce (DOC)—have slowed if not stopped entirely. As a result:

• ENERGY STAR is shut down. The ENERGY STAR program is a voluntary energy efficiency program launched by the US EPA and technically managed by both the EPA and DOE. Despite its position as a joint program, its funding was excluded in the earlier appropriations package funding DOE through September. Accordingly, all ENERGY STAR programs have been paused. Further, the ENERGY STAR website has been shut down, reducing consumer access to lists of ENERGY STAR products, providers, and other resources. 
  
• EPA power plant inspections have come to a halt. EPA oversees inspections at thousands of US facilities including power and recycling plants. These examinations fall under US federal regulations such as the Clean Air Act, Safe Drinking Water Act, and Toxic Substances Control Act. Once the EPA opens, a logjam of inspections will need to be cleared to ensure adequate facility operation and safety. 
• Delays in major offshore wind projects ensue. Projects like the wind farm development off Martha’s Vineyard require Department of Interior approvals. The Interior’s Bureau of Ocean Energy Management approval process for offshore energy developments requires a back-and-forth full of feedback for developers. These conversations can’t take place while staff are out of work.
• Permitting review by the DOC has stalled. Oil & gas companies rely on the DOC to review permits for tariff exemptions. While some DOC operations remain active, such permit reviews have come to a pause, troubling industry leads who seek tariff-relief from the on equipment such as steel used at drilling and generation sites. 
  
• No new Federal Energy Regulatory Commission (FERC) nominee. Former FERC Commissioner Kevin McIntyre passed away on January 2, 2019 leaving the US’s highest ranking energy regulator’s seat open. Despite a promised search for a new Commissioner, it appears the shutdown distraction has delayed the announcement of potential candidates for the seat. 
  

Impacts Beyond the Government

Many third-party vendors in the energy space work closely with programs like ENERGY STAR. Accordingly, the temporary absence of such programs could eventually put their business efforts in jeopardy. The impact dimensions spread past policy and regulation to include technologies, operations, customers, and business models. Whenever the government shutdown is resolved, the backlogs it has created will continue to serve as a barrier to developing solutions to the US and global energy needs across the entire value chain.