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Election has energy ramifications Lawyer says Obama’s strong position will likely lead to more climate change related regulation, but US economy is priority Alan Bailey Petroleum News
The failure of the Republican Party to capture a majority in the U.S. Senate was the biggest surprise in the recent election, Craig Gannett, a partner with Davis Wright Tremaine, told Law Seminars International’s Energy in Alaska conference on Dec. 4. Gannett is a lawyer with extensive experience in issues relating to climate change and energy.
“That surprise ripples through everything else that’s going to go on in D.C. for at least the next two years,” Gannett said.
Strong position The Senate, under Democratic control, can kill any legislation that the Republican House of Representatives sends it. As a consequence, no legislation will reach President Obama that the president doesn’t essentially support, thus placing the president in a relatively strong position, Gannett said.
“My sense is that Obama’s second term is going to be relatively energetic and relatively effective,” he said.
Having achieved two of his three prime objectives for his first term in office — the enactment of legislation relating to financial reform and health care — the president still has climate change, his third objective, in view, even although this topic saw no mention during the presidential campaign, Gannett said. Federal energy policy is likely to increasingly become synonymous with climate change policy, with climate change concerns suffusing and undergirding many policy initiatives, he said. The impact of Hurricane Sandy and predictions by scientists of an increasing frequency of extreme storms is re-enforcing those concerns.
But people should not anticipate the president introducing any major new bills during his second term.
“He has plenty of existing law to implement in the next four years without any need for significant change,” Gannett said.
Policy through regulation Instead, having that Senate protection from any challenge on the legislative front, the president will likely implement climate change policies by regulation through existing laws, Gannett said. Gannett cited new emissions controls for ships operating within 200 miles of the U.S. coastline as an example of the type of highly technical regulatory initiative that federal agencies could introduce.
However, with the nation’s economic challenges taking top position in the government’s priority list, there is unlikely to be a flood of new agency regulations in the near future.
“The economy will remain the focus until it returns to something more robust and that may well take the entire four years,” Gannett said.
On the other hand, with the Supreme Court having ruled that the administration can regulate greenhouse gases as pollutants, the Environmental Protection Agency is in a strong position to, for example, require best available control technology for power plants, thus creating difficulties for coal-fired plants and placing any form of greenhouse-gas-free energy at a premium.
“All renewables are well positioned in this environment,” Gannett said.
No easy answers Asked how he though the Obama administration might reconcile the need for economic growth with the likely increase in energy prices as a consequence of climate-change-related measures, Gannett responded that climate change is a complex and emotive issue with no easy answers.
“It may cause higher prices, but you have to offset that against the long-term environmental impacts that the vast majority of scientists seem to think that we’re facing,” Gannett said. “That’s a causal connection that I think the administration largely accepts.”
And renewable energy technologies, which some people think provide new job creation opportunities, were closing the energy cost gap before the emergence of fracking technologies for oil and gas production had “thrown the cards up in the air,” he said.
One outcome of Hurricane Sandy has been a new awareness of the vulnerability of the U.S. energy infrastructure, in particular the energy transportation infrastructure such as pipelines, Gannett said. This is a trillion dollar issue that the administration will need to face, he said.
Action to watch From the perspective of Alaska, the action to watch will be in the Senate Energy and Natural Resources Committee, where Sen. Ron Wyden, D-Ore., will be the new chair and Sen. Lisa Murkowski, R-Alaska, will be ranking member, Gannett said.
“The working relationship between Wyden and Murkowski is going to be critical and I have every reason to think it’s going to be a good working relationship,” he said. One issue that this committee will need to address is the question of exporting liquefied natural gas from the United States, with Wyden and Murkowski having radically different perspectives on this question.
One person to keep an eye on is Sen. Patty Murray, D-Wash., a “rock star” in the Democratic caucus who will chair the Budget Committee, Gannett said. Hopefully there will be a strong relationship between Murray and the Alaska delegation over a wide range of issues, he said.
In the administration, there may be some cabinet changes of particular interest to Alaska. It is not clear whether Secretary of the Interior Ken Salazar will remain in office, but Energy Secretary Steven Chu is a more likely departure. Gannett said that he had heard that Jane Lubchenco, the administrator of the National Oceanic and Atmospheric Administration, is likely to leave.
The current term of Chairman Wellinghoff of the Federal Energy Regulatory Agency ends in June, but with the possibility of Wellinghoff remaining in office until the end of 2013.
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