Why Congress still matters

Feb. 3, 2014
Oil and gas industry leaders generally don't expect the US Congress to do much about energy in 2014. But they haven't necessarily written federal lawmakers off.

Oil and gas industry leaders generally don't expect the US Congress to do much about energy in 2014. But they haven't necessarily written federal lawmakers off.

Top trade association officials who spoke to OGJ for its annual US Political Outlook special report agreed that partisan gridlock between the US House and Senate isn't going to ease anytime soon. "In Congress, there's been a thirtyfold decrease in willingness to work with people you don't agree with," Natural Gas Supply Association Pres. Skip Horvath observed.

Announcements by senior House and Senate members that they won't run for reelection in 2014 add to the uncertainty. So does the traditional belief that many others will be busier campaigning than legislating.

One upcoming Senate change could be significant. When Finance Committee Chairman Max Baucus (D-Mont.), who already had said he planned to retire, accepted an appointment to be US Ambassador to Japan, it meant Ronald L. Wyden (D-Ore.), who now chairs the Energy and Natural Resources Committee, would replace Baucus as Finance chairman sooner than expected.

Mary L. Landrieu (D-La.) would then succeed Wyden and chair Energy and Natural Resources. Alongside Ranking Minority Member Lisa Murkowski (R-Alas.), that would put senators from oil and gas producing states in the committee's top spots.

Efforts by committee members Murkowski, Landrieu, and John Hoeven (R-ND) to show Wyden the US oil and gas renaissance's positive impacts first-hand soon after he became Energy and Natural Resources' chairman in early 2013 may have had an impact.

"He actually has been in and out of oil issues over the years," Independent Petroleum Association of America Vice-Pres. for Government Relations Lee O. Fuller said. "At one time, he expressed concern about impacts on domestic production if the enhanced oil recovery tax credit wasn't approved."

'The worst thing'

Wyden's new role as Finance chairman means he will inherit a tax reform discussion Baucus started later in 2013 with a proposal that included repeals of federal provisions independent producers and others consider essential. "The worst thing Congress could do would be to treat oil and gas in a punitive way," American Petroleum Institute Pres. Jack N. Gerard said.

No one expects comprehensive tax reform to move very far this year, however. "I think we're in the early stages of a process which historically has taken place over several Congresses," Fuller told OGJ. "One big question will be whether domestic capital investments will be encouraged in steel, mining, oil and gas, and other capital-intensive industries."

IPAA and other associations also expect congressional oversight to become more essential if regulators try to develop new rules under administrative authority. Capitol Hill contacts won't be neglected.