The Senate Energy and Natural Resources Committee might be a surprising hub for bipartisanship on geothermal and permitting issues next year, Nick and Daniel write.

Why it matters: Incoming Chair Mike Lee and ranking Democrat Martin Heinrich both bring a harder ideological edge to the committee, but their shared Western background could keep ENR legislatively active.

• "Mike and I have traveled together, so we've always had a very friendly relationship," Heinrich told Nick. "We have very different ideas, but it's been incredibly cordial."

Zoom in: Lee, who didn't respond to requests for comment, is a staunch conservative on public lands issues and has a reputation for blocking legislation on the Senate floor.

• He's drafted legislation that would give Congress more authority over Antiquities Act designations, a longtime point of contention for Western conservatives.
• As chair, he would mark a sharp stylistic departure from moderates Joe Manchin and Lisa Murkowski before him.

Between the lines: Still, lobbyists and committee observers we talked to said Lee has a solid staff and takes a thoughtful approach to legislation.

• Lee recently hired Wendy Baig, a longtime staffer who worked for him on the Judiciary Committee, to be his ENR chief of staff.
• "He's known to have a pretty smart staff that knows how to ask the right questions," said Scott Segal, cochair of Bracewell's Policy Resolution Group.
• "I believe that the bipartisanship on the committee will continue."

Heinrich pointed to geothermal as an area of possible collaboration.

• "We both have oil and gas industries in our state that are going to be able to use existing workforce, existing engineering, existing technology, to shift from producing hydrocarbons to producing heat," Heinrich said.
• Lee cosponsored Heinrich's Geothermal Energy Optimization Act, which would speed permitting and require more frequent leasing for geothermal projects on public lands.
• Lee also voted for the Manchin-Barrasso permitting proposal in committee, and he's on Heinrich's Good Samaritan mine cleanup bill (more on that below).

Friction point: Manchin and outgoing Ranking Member John Barrasso worked closely together and were generally aligned on supporting fossil fuels as part of the U.S. energy mix. 

• That's likely to emerge as an area of disagreement next year, particularly as Republicans pursue a reconciliation bill that could bolster oil and gas leasing and peel back parts of the IRA.
• "We won't have as much help or cooperation on the Democrat side this go-around, so that may be more of a factor that makes us a little more pessimistic about what that committee can get through," said Kathleen Sgamma, president of the Western Energy Alliance.

A few notes on policy developments we've been tracking …

💵 Reconciliation dreams: Senate Republicans discussed doing multiple bills during a policy retreat yesterday.

• Incoming Senate Majority Whip John Barrasso said, "There's the potential for three reconciliation bills."
• "Everything that's achievable within the rules of reconciliation, we're talking about," Lisa Murkowski told reporters. "We're in the dreaming stage."

⛏️ Good Sam news: The Good Samaritan Remediation of Abandoned Hardrock Mines Act is scheduled for a vote under fast-track procedure on the House floor next week.

• That would send it to President Biden after years of pushing to get it passed by the conservation community (the bill passed the Senate this summer).
• It's also been in the mix to get added to the NDAA, but Senate sponsor Heinrich told Nick he wasn't sure whether it'd be in the final bill.

🦆 Lame duck moves: Sen. Sheldon Whitehouse told Nick his offshore wind revenue sharing bill, the RISEE Act, is "one of the things that's in play as the discussions on the spending and NDAA bills go into their final iteration with the big four."

• It moved through committee last month, but negotiators will likely want to find a way to pay for its impact on federal revenue, something Whitehouse said is "not a call that I make."
• On permitting, Sen. Joe Manchin told reporters yesterday that negotiations are "very close."

Biden officials are trying to reassure nervous loan applicants and investors that its energy and climate priorities will endure in the second Trump administration, Daniel writes.

Why it matters: The administration has awarded 90% of IRA funds available to spend — more than $100 billion, White House climate adviser John Podesta said today at a DOE-hosted conference.

• President-elect Trump has pledged to halt unspent funds and roll back Biden's climate agenda, which could tie up the DOE's Loan Program Office.

What they're saying: "We know that the next four years will bring a lot more uncertainty to federal clean energy policy," Podesta said. 

• "But this is not the end of our fight for a cleaner, safer planet" because the private sector recognizes the importance of meeting the moment, he said.
• But Podesta nodded to potential LPO changes: "We need Jigar [Shah, LPO's chief] to keep shoveling money out the door right up until Jan. 20."

🍿 1. Nat Res drama: Rep. Melanie Stansbury is "taking a serious look" at running for House Natural Resources ranking member, per Axios' Andrew Solender.

• But Rep. Jared Huffman appears to have the inside track: He has commitments from over 140 colleagues, according to a source familiar with the matter who spoke on condition of anonymity.

🤝 2. Heard on WRDA: House and Senate committee leaders have reached a final deal on this year's Water Resources Development Act.

• In addition to authorizing U.S. Army Corps water projects, the bill includes legislation that would reauthorize the Economic Development Administration for the first time in 20 years.

❌ 3. In denial: The Biden administration denied a news report yesterday that it would not finalize the 45Z clean fuel production credit. The report had generated criticism from Sen. Chuck Grassley.

• "Treasury anticipates issuing guidance before the end of the administration that will enable eligible producers to claim the 45Z credit for 2025," said Mike Martinez, an agency spokesperson.

☢️ 4. Helping nukes: Sen. Jim Risch is out with legislation that would backstop nuclear reactor projects with billions in federal funding for cost overruns.

• The nuclear industry has long called for Congress to provide such a backstop for first-of-a-kind reactors.