Freudenthal urges Obama, Romney to supply energy policy details

Former Wyoming Gov. Dave Freduenthal (D) urged the two major parties’ presidential nominees to more specifically outline their energy policy plans if they win the 2012 election. US President Barack Obama, the Democrat, and former Massachusetts Gov. Mitt Romney, the Republican, have not addressed the major questions, he charged in a Sept. 24 midday address to a 2-day conference on shale gas issues hosted by the Howard Baker Forum and Lawrence Livermore National Laboratory.

“Neither has addressed how to balance allowing energy development with influencing markets to influence broader policies,” said Freudenthal, who became senior counsel at Crowell & Moring LLP’s Cheyenne office in early 2011 after serving two terms as governor.

“Neither has said how [he] would deal with energy exports across the board,” he continued. “Nobody is really talking about climate change any more. This is a top issue for anyone under 40, and they’re going to become increasingly influential voters. That suggests that future policies will increasingly contain steps to influence markets.”

Freudenthal said he also would be interested in where Obama and Romney stand on federal courts’ proper role in energy disputes, “where you end up with either sue-and-settle strategies, or fits and starts.” Environmental and other nongovernmental organizations want to see more federal energy regulations because it would let them sue more often in the District of Columbia circuit, and Congress is easier to influence than 50 state legislatures, he said.

But two major figures in Washington’s energy communities, serving as surrogates for the two campaigns, said there are big differences between the candidates’ underlying policies.

Federal fracing rules

Linda G. Stuntz, a principal in the law firm Stuntz, Davis & Staffier who represented Romney, said the Republican wants the US Bureau of Land Management to withdraw its proposed hydraulic fracturing regulations and let the states do the job instead. “The reality is that the industry has moved away from federal to state and private lands because it takes producers 300 days to get a federal drilling permit,” she said.

Elgie Holstein, the senior director for strategic planning at the Environmental Defense Fund who represented Obama, suggested that producers might prefer uniform federal requirements to a patchwork of state regulations in some cases. “The fact is it’s the industry which is deciding where to drill, and finding ways to move the oil to refineries which need it,” he said.

Freudenthal said BLM’s proposed fracing regulations would create problems once they take effect. “I can guarantee no one in the field offices there knows how to read a cement log,” he said. “Wyoming’s oil and gas division employees can. The 13 people in BLM’s Wyoming field offices would have a lot to learn by 2015.”

Holstein said a looming federal fiscal crisis could force energy issues into the campaign background, even though both nominees recognized its potential contributions to a domestic economic recovery. Stuntz said that federal policies need to be more predictable so investors can feel confident committing capital to major energy projects.

Asked about the nominees’ climate change positions, Holstein said that tougher motor vehicle fuel efficiency requirements and many Obama administration policies do double-duty by addressing environment as well as energy issues.

“One thing that lies beneath the rhetoric is optimism—whether you believe US entrepreneurs have the ability to make dramatic changes with modest [research and development] support from the government, or if this country is going to continue relying on traditional technologies,” he said.

‘Tough decisions’

Stuntz said Romney supports the idea of federal support for basic energy R&D, but also realize the nation faces a multitrillion dollar budget deficit. “There will be tough decisions,” she predicted, adding that the GOP nominee opposes extending the wind power tax credit because he believes it has accomplished its purpose after 20 years.

“Basic research is absolutely critical,” Holstein said. “But sometimes you need a government partnership for demonstration projects. There’s nothing wrong with asking industry to step forward and pay some of the costs in those cases.”

After he suggested that Romney is not being consistent calling for a wind energy tax incentive phase-out while opposing elimination of similar oil tax incentives as Obama has proposed, Stuntz said that the Republican would support an examination of the oil and gas provisions as part of full federal tax reform.

“If you’re really going to say the oil industry shouldn’t get tax benefits, which are common for all businesses, you really shouldn’t extend a $12 billion program which gives benefits to the wind industry,” she said.

“If you get rid of the politics, I think most people want jobs so they can support their families, and protection of the environment and social structure where they live,” said Freudenthal. “That’s where governors usually start when dealing with energy questions.”

Contact Nick Snow at nicks@pennwell.com.

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