Biden Infrastructure Plan Will Be Challenging To Implement

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Biden Infrastructure Plan Will Be Challenging To Implement

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Law360

Robert A.H. Middleton

President Joe Biden's sweeping infrastructure proposal, the American Jobs Plan, takes a broad view of what constitutes infrastructure, and tackles many of the issues Biden highlighted in his campaign, including climate change, the state of the country's traditional infrastructure and social inequality.

The massive $2 trillion plan creates incentives and opportunities for utilities and other entities in the energy sector to remediate legacy sites, and pivot toward a more resilient and greener energy infrastructure, which U.S. Environmental Protection Agency Administrator Michael Regan called "historic investments to tackle the climate crisis."

For years, advocacy groups have been sounding the alarm about the deteriorating state of the nation's infrastructure. The American Society of Civil Engineers gave the country a C- in its 2021 report card. Biden's plan purports to correct many of the infrastructure shortcomings identified by the ASCE and other groups, through a series of proposed congressional acts, administrative rulemakings and executive orders.

But as discussed below, complete implementation of the American Jobs Plan would take years, and necessitate close coordination between the White House, Congress and various federal agencies.

Improving Grid Resilience and Access

The ASCE has warned that severe weather events have threatened energy transmission resilience and left many of America's most vulnerable communities susceptible to outages and unreliable transmission. One of the primary goals of Biden's infrastructure plan is to increase the resilience of the country's electric transmission system. It proposes to do this by:

  • Implementing an investment tax credit to incentivize the construction of at least 20 gigawatts of high-voltage capacity power lines;
  • Creating a Grid Deployment Authority at the U.S. Department of Energy, which the administration says will be used to spur high-voltage transmission line installation through "creative financial tools";
  • Laying thousands of miles of transmission lines to provide more reliable electricity service to rural Americans without reliable electricity;
  • Expanding high-speed broadband infrastructure to provide 100% nationwide coverage;
  • Investing $45 billion to eliminate all lead pipes and service lines in the nation's drinking water system; and
  • Fixing aging pipelines and distribution systems to reduce leaks.

Resilience Through Green Technology

The ASCE has advocated for green technologies to enhance the resilience of the nation's infrastructure. Biden's plan introduces broad incentives for industry to rebuild the energy grid with greener technologies. The plan calls for:

  • Investing in green technologies to improve economic conditions in what the plan refers to as "distressed communities," including a production tax credit for decarbonized hydrogen demonstration projects; establishing carbon capture retrofits for steel, cement and chemical production factories; and expanding existing tax credits to encourage carbon capture use;
  • Providing a 10-year extension of investment tax credits and production tax credits for green energy generation and storage;
  • Offering clean energy block grants to state, local and tribal governments seeking to modernize green energy infrastructure and train employees to use the new technology;
  • Investing $46 billion in federal buying power focused on electric vehicles, charging ports and electric heat pumps;
  • Committing the federal government to purchasing 24/7 clean power for federal buildings, to push the market to develop a clean power infrastructure; and
  • Establishing an Energy Efficiency and Clean Electricity Standard to incentivize more efficient use of infrastructure, including leveraging existing nuclear and hydropower facilities and advancing new ones.

Remediation

The ASCE has previously warned that underfunding in hazardous waste cleanup poses a risk to human and environmental health — especially where hazardous waste remains in areas that are at risk from floods, storm surges or wildfires, or are within the zone of rising sea levels.

Biden's plan calls for tens of billions of dollars to be invested in remediating hazardous waste sites. Specifically, the plan proposes the following:

  • Investing $16 billion in plugging orphan oil and gas wells, and reclaiming former mines, to abate ongoing air and water contamination;
  • Investing $5 billion in remediating and redeveloping brownfield and Superfund sites, to turn decommissioned facilities and unused property into "new hubs of economic growth and job creation";
  • Restoring the requirement that the fossil fuel industry pay into the Superfund Trust Fund to pay for remediation of Superfund sites;
  • Investing in the Appalachian Regional Commission's POWER grant program, aimed at awarding grants to address pollution at legacy power sites; and
  • Eliminating tax subsidies and credits for the fossil fuel industry, to push the country toward a goal of net zero emissions by 2050.

Implementation

As noted above, the aggressive plan would take years, and require significant coordination among the White House, Congress and several executive agencies to fully implement.

Biden himself can enact a small number of items in his plan. He has, for instance, issued an executive order creating the Civilian Climate Corps, a modern version of the New Deal-era Civilian Conservation Corps, intended to "mobilize the next generation of conservation and resilience workers and maximize the creation of accessible training opportunities and good jobs."

But most of Biden's proposals cannot be accomplished without legislation. A primary hurdle here — and in any plan of such magnitude — is funding.

To that end, the rollout of the American Jobs Plan was coordinated with the Made in America Tax Plan, recently released by the U.S. Department of the Treasury. According to the department, the Made in America Tax Plan is aimed at "eliminating incentives to offshore investment, substantially reducing profit shifting, countering tax competition on corporate rates, and providing tax preferences for clean energy production."

The tax plan would require congressional action to raise the corporate tax rate to pay for many of the programs outlined in the American Jobs Plan. Congressional action would also be necessary to enact any of the tax credits, subsidies or other incentive shifts detailed in the American Jobs Plan.

Should Biden secure revenue necessary to fund his plan through the Made in America Tax Plan, Congress would still need to pass budgets to allocate funding to various agencies and programs. In addition to all of the investments outlined above, the plan calls for, in the aggregate, hundreds of billions of dollars invested into various programs:

  • A $174 billion investment in the electric vehicle market to develop electric vehicle technology, build a nationwide electric vehicle charging network and electrify the federal government's vehicle fleet;
  • A $100 billion investment in high-speed broadband infrastructure;
  • A $45 billion investment in the EPA's Drinking Water Revolving Fund; and
  • A $100 billion investment in upgrading public schools.

Even with funding and monetary allocations, Biden's plan requires stunning coordination among federal agencies. Some of the plan's key proposals — especially those related to efforts to lower emissions of greenhouse gases — would require administrative rulemakings at several agencies.

The EPA and the DOE will be required to develop programs to establish decarbonized hydrogen demonstration projects in economically distressed communities, and must establish 10 facilities to demonstrate carbon capture retrofits in steel, cement and chemical production.

The plan calls for an Advanced Research Projects Agency-Climate at the DOE to oversee development of new technologies to reduce emissions of greenhouse gases, build climate resilience and expand funding for climate research. It also proposes the Clean Buses for Kids Program at the EPA, to electrify at least 20% of the nation's school bus fleet.

Finally, many elements of the plan, such as installing new transmission lines and new renewable generation facilities, and building or rebuilding roads and bridges, ultimately require permits and approvals at state and local levels, which can be difficult to obtain.

The American Jobs Plan is so wide-ranging that even the implementation of discrete pieces could have profound impacts on key industries and the everyday lives of Americans. The plan asserts that now "is the moment to reimagine and rebuild a new economy." But at this point, it is largely up to Congress to decide whether Biden's reimagined and rebuilt economy — with a restructured energy industry and a fundamentally transformed infrastructure — will come to pass.

Originally published on Law360 (Subscription required)