With demand rising for natural gas projects, Congress is teeing up a long-overdue reauthorization of the federal pipeline safety program.

Why it matters: Republicans and Democrats diverge on how aggressively to regulate pipeline operators, who are pressing the GOP-led Congress for a lighter touch on more than 3 million miles of regulated pipelines.

• A 2020 Princeton University study projected that 65,000 miles of carbon dioxide pipelines could be needed by 2050.

Driving the news: The Senate Commerce, Science, and Transportation Committee heard at a hearing today from three gas industry officials and the Pipeline Safety Trust, an independent industry watchdog.

• Committee Chair Ted Cruz attacked Democrats for failing to nominate a PHMSA director and to hold a hearing on pipeline safety in the last Congress.
• Cruz also railed against "extraneous requirements" on special pipeline permits and a Biden administration leak detection rule that regulated LNG facilities and underground gas storage.
• And aiming at environmental activists protesting pipeline projects, he called for passage of legislation to strengthen criminal penalties for vandalism.

Cruz said he plans to hold a confirmation hearing soon for Paul Roberti, a Rhode Island lawyer and utility regulator who's President Trump's nominee for PHMSA administrator.

The other side: The industry's record is at an historic "low point," said Bill Caram, the watchdog's executive director.

• He cited a lack of funding for PHSMA that he said has sapped state utility commissions and pipeline inspectors of resources.
• PHMSA's annual budget for pipeline safety stands at $218 million, which has gradually risen over the last decade.
• "Not only has the agency been chronically underfunded," he said, but the "potential buildout of carbon dioxide and hydrogen pipelines demand an increase in resources from Congress, both to the agency and just as significantly to state programs."

PHMSA has reported a 90% drop-off of enforcement cases since Trump took office, Caram said. Sen. Maria Cantwell told Caram she's sending a letter to PHMSA demanding answers on the issue.

Between the lines: Republicans and industry regard aspects of the pipeline safety program — last renewed in 2020 — as an impediment.

• The previous administration expanded PHMSA's purview "beyond the congressional mandate into environmental issues like climate change," said Robin Rorick, vice president of midstream policy at the American Petroleum Institute.

What we're watching: How PHMSA seeks to regulate carbon-dioxide pipelines — key linkages in carbon capture and storage efforts that came under scrutiny after a Mississippi pipeline leak sickened dozens of people.

• The Biden White House announced stronger standards for carbon-dioxide pipelines in January.

A few things we have our eyes on…

⚔️ IRA defense: 14 House Republicans issued a statement yesterday asking House Ways and Means to make "three thoughtful changes to the energy tax credits section" of its reconciliation text.

• Echoing clean-energy companies' concerns, they want less stringent "foreign entity of concern" requirements, preservation of tax credit transferability, and a return to the "start construction" standard for phasing out the credit.
• The House Budget Committee meets tomorrow morning to cobble together various pieces of the bill ahead of a floor vote.

What we're watching: Whether House leadership tries to make these changes on the floor — or whether the Senate overhauls the bill.

💵 More EPA pushback: The Trump administration's proposed 54% cut to EPA "may be a bridge too far," Rep. Mike Simpson, the agency's top House appropriator, said today.

• For the second straight day, Administrator Lee Zeldin faced bipartisan pushback on spending cuts.
• EPA could still get a haircut, but appropriators look likely to give Zeldin more than he's seeking.

🗣️ Speaking of EPA: The Senate confirmed Sean Donahue as the agency's general counsel 51–46 this afternoon.

• Democrats objected, with Sen. Sheldon Whitehouse calling him "likely the most flagrantly unqualified person" ever confirmed for an agency general counsel position during a floor speech today.

The U.S. should invest in energy dominance to beat China and set global standards to ensure leadership in AI, per a TechNet letter to the House AI and Energy working group shared exclusively with Axios.

Why it matters: TechNet's highly influential membership of tech CEOs usually has congressional leadership's ear on consequential tech bills.

What's inside: TechNet urges the House AI and Energy working group to focus on the following:

• Streamline NEPA requirements and fast-track permitting for energy projects, including data centers and other infrastructure.
• Reinstate permanent tax provisions that "reduce the capital burden for infrastructure developers" and develop "AI Economic Zones" with incentives for creating AI research hubs.
• Modernize grids via comprehensive permitting reform.
• Outpace China via heavy investment and low regulatory barriers in the U.S., set global standards and resist "harmful and overreaching regulations" abroad.

What they're saying: "The government and private sector must work together to advance a national policy agenda that secures American energy dominance and supports the construction of data and power infrastructure at a pace that allows U.S. innovation to move forward unimpeded," Linda Moore, CEO of TechNet, said in statement.

• "Speed and scale are the keys to maintaining America's technological advantage and positioning the U.S. to outcompete China and other authoritarian regimes in the AI era."