The Senate Appropriations Committee passed a $35.4 billion spending bill for water and energy on Thursday, after Sen. John Hoeven (R-ND) introduced -- but then withdrew, at the urging of his colleagues -- a controversial amendment that would have blocked the Obama administration from modifying the Clean Water Act (CWA). The bill now heads to the Senate floor.

The bill includes $10.5 billion for energy programs, $610 million for energy research and development, $6 billion for environmental management activities at the Department of Energy (DOE), and $5.5 billion for the U.S. Army Corps of Engineers (USACE). It also allocates funds for nuclear and science programs.

Republicans and some supporters of the oil and natural gas industry believe efforts by USACE and the U.S. Environmental Protection Agency (EPA) to adopt a new Clean Water Rule (CWR) amount to an overreach by the federal government. They claim that the rule -- which is currently under review by the White House's Office of Management and Budget (OMB), with final authorization expected later this spring (see Shale Daily, April 7) -- would harm domestic oil and gas production, increase permitting delays for wells and increase drilling costs.

Hoeven introduced an amendment to the FY16 Energy & Water Development Appropriations Bill that called for defunding a proposal by USACE and the EPA to redefine the "Waters of the United States" (WOTUS) rule.

"For our farmers and ranchers, this is a huge problem," Hoeven said. "The EPA has gone beyond the statutory authority it has, and instead of limiting its regulation to navigable bodies of water, it now says that it can, in essence, regulate any water. They argue that under the legal theory of 'significant nexus' that they can go from navigable bodies of water to regulating any water.

"It's clear infringement of private property rights, creates tremendous uncertainty for our farmers and does exceed their authority and it is problematic not for just for agriculture but across virtually every industry sector."

Hoeven touched on S 1140, a separate bill that calls for USACE and EPA to issue a revised WOTUS rule and would limit the scope of federal oversight. Specifically, it would include traditional navigable waters, interstate waters and certain streams and wetlands, but it would exclude groundwater and isolated ponds, among other things.

"I think there's a good chance that we may be able to get 60 votes to de-authorize WOTUS on the Senate floor, but at the same time I think that we have to work to defund it," Hoeven said.

But Sen. Lamar Alexander (R-TN) said that while he also wants to block USACE and EPA from finalizing the rule -- quipping "I don't think we should be regulating mud puddles from Washington, DC," -- he urged Hoeven to "exercise some restraint." Alexander chairs the Senate Appropriations Subcommittee on Energy and Water Development, which passed the appropriations bill on Tuesday (see Shale Daily, May 20).

"There are other ways to deal with this issue," Alexander said. "The energy and water appropriations bill in the House contains the language that you're suggesting. The Interior appropriations bill might be able to contain that language. Or we may be deal with it in conference. So I wonder, even though I agree with the senator and will vote with him, if he might be willing to withdraw his amendment in the committee and either offer it on the floor or bring it up in any of these other forums where we might be able to act on it. That way we may be able to get a result on this very important bill."

Sen. Dianne Feinstein (D-CA) was ready to vote against the amendment. "This is an extraordinarily hot and difficult issue," she said. "The administration is trying to clarify the rule now [after] two court cases. The final rule should be out shortly, and I hope we can wait and give it a fair reading. But I can't support a provision that would permanently prevent clarity in determining which wetlands and water bodies to Clean Water Act [CWA] jurisdiction."

Sen. Lisa Murkowski (R-AK) added that the WOTUS rule "is probably the regulation that has generated the highest level of concern and paranoia. We have an opportunity to move forward this energy and water bill, and will have future opportunities [to address the rule]. Whether or not this is the exact spot to do it is obviously a question of discussion."

Hoeven relented and agreed to withdraw the amendment "on the basis that I believe we have strong support to bring it back and work further when we address the EPA budget. But I think it's very important that we do defund this rule.

"The reality is last year we were forced to defund it, and EPA came right back with it. So if they show us a solution, let's see the solution. But this needs to be addressed."

The House of Representatives passed its own version of the $35.4 billion spending bill on May 1 (see Shale Daily, May 1). That bill, HR 2028, includes a rider, Section 105, which prevents USACE from attempting to "develop, adopt, implement, administer or enforce any change to the regulations and guidance in effect on Oct. 1, 2012, pertaining to the definition of waters under the jurisdiction of the Federal Water Pollution Control Act..." (see Shale Daily, April 23; April 15). If the appropriations measure should make it through Senate passage without the amendment, the issue would have to be resolved in a House-Senate conference committee.

The White House has threatened to veto the entire House spending bill over the rider, and other issues (see Shale Daily, April 29).