The year 2001 was a difficult one for those seeking US energy policy reforms. Distractions were many. The year began with the two major political parties at war with each over the presidential election. It ended with the war on terrorism, which continues here and abroad.
Against this backdrop, President George W. Bush will deliver his first State of the Union address to Congress Jan 29. He will likely call for more domestic production to reduce foreign oil dependence.
Bush's first year largely met industry expectations, although environmental groups also saw some victories.
Highs and lows
Industry sees as its biggest achievement a White House energy blueprint that calls on government agencies to better coordinate administration regulation, whether it affects a drillbit, pipeline, or burner tip.
Producers also expect to see expanded access to energy-rich public lands, although not much more has become available yet. Some areas, such as the coastal plain of the Arctic National Wildlife Refuge in northern Alaska, require congressional action that remains questionable.
Meanwhile, producers and pipeline operators are happy with a new Army Corps of Engineers decision to streamline wetlands permitting. Another high point for producers is a decision to help fill the Strategic Petroleum Reserve with oil from federal leases in the Gulf of Mexico. That action dramatically expands the Department of the Interior's royalty-in-kind program, a policy industry has sought for several years.
One low point of the year was the White House's decision to dramatically scale back the eastern Gulf of Mexico lease sale following concerns from the president's brother, Gov. Jeb Bush of Florida and environmentalists.
On downstream issues, the Environmental Protection Agency is making the first steps toward untangling the reformulated gasoline-oxygenated fuel mess, although it has abdicated to Congress the tough job of what to do with the RFG oxygen standard. Refinery plant expansions may also be treated differently under the New Source Review clean air rule, although the administration says it stands behind past settlements and legal action initiated by the administration of President Bill Clinton. A tough new diesel sulfur rule is still in place, although EPA has ordered an independent review that starts this May.
On foreign policy, some but not all oil and gas companies welcome a decision not to regulate the greenhouse gas carbon dioxide as a pollutant. But industry is largely in agreement the White House should consider removing investment bans on Iran and Libya.
Guilt by association
Industry is grateful to have a former oilman in office but see his resumé as a blessing and a curse.
The energy blueprint they so widely praised, for example, has proven to be a lightning rod for critics who see the document as proof the White House is letting industry shape energy policy.
And the Enron Corp. scandal will likely make it even harder for Bush to defend the energy business, although most companies meet the spirit and letter of US securities law daily.
