The US oil and gas industry faces an unchanged federal policy situation but higher visibility following the Nov. 6 elections, experts said during the 2012 IHS Forum in Washington, DC.
“Congress remains gridlocked, the administration hasn’t changed, and the same issues are in play,” said Lee O. Fuller, vice-president for government relations at the Independent Petroleum Association of America.
A gridlocked Congress potentially could embolden the US Environmental Protection Agency and other parts of the Obama administration to impose new federal regulations, he suggested during a Nov. 13 session at IHS Herold’s 21st Annual Pacesetters Energy Conference, which was part of the 2-day forum.
“The question now is whether this reelected president’s path now will move toward more federalization,” Fuller said. “If it does, we may see a substantial increase in litigation by industry in response to heavier regulation, and by environmental groups believing there’s not enough.”
Don R. McClure, vice-president of government and stakeholder relations at Encana Oil & Gas (USA) Inc., said the two major parties’ presidential nominees frequently mentioned oil and gas during their campaigns’ final weeks.
Low natural gas prices present a historic opportunity for US manufacturers, McClure observed. “When you think about EPA and other federal agencies possibly laying new regulations on what the states already are doing, there’s real risk,” he said.
Climate bill chances
Robbie Diamond, president of Securing America’s Future Energy (SAFE), said talk of reviving climate legislation immediately after the election probably was congressional Democrats’ attempts to placate their environmental constituencies.
“I think an energy bill is more likely, especially if Iranian-Israeli tensions come to a head,” he continued. “I’ve been struck by some key people’s determination to get something done, and an energy bill is a good place to start. It will be promoted as an all-of-the-above approach.”
Scott Noble, president of Noble Royalties Inc., said political progressives may have prevailed in the latest elections, but they’ll need to move financially right if they expect to get anything done. “If we were serious about managing our public resources, there’s $800 billion of new revenue waiting under the right policies,” he maintained.
McClure said he hopes the US Senate Energy and Natural Resources Committee remains bipartisan as Ronald L. Wyden (D-Ore.) becomes chairman and starts working with Ranking Minority Member Lisa Murkowski (R-Alas.). “A carbon tax to raise revenue might be proposed, but I don’t think the Republicans as a party believe in taxes and will refuse to pass it,” he added.
Fuller said following the session that he also thinks congressional enactment of a carbon tax is unlikely, especially during the lame-duck session. “It would be difficult to set up, it would need to be free of politics, and it would be hard to keep free of politics,” he told reporters.
“This Congress wouldn’t even increase taxes for the highway trust fund, where revenue for infrastructure replacement has been falling as cars become more efficient, ethanol displaces 10% of the gasoline volumes, and demand continues to drop,” the IPAA official observed.
Contact Nick Snow at firstname.lastname@example.org.