This blog posting is the second of a series of five postings from the 2014 year-end energy briefing.
This article was first published in The Metropolitan Corporate Counsel, January 2015 issue.
Burdick: Continuing with the political theme, our next presenters are Jamie Tucker, a partner in the Public Law and Policy practice, and Charlie Johnson, a partner in the Public Law and Policy practice. Jamie and Charlie will present a point/counterpoint discussion on the impact of the election on U.S. energy policy.
Tucker: The prospects for energy legislation in 2015 improved dramatically as result of the November elections, in which Republicans essentially ran the table.
Johnson: For Democrats, it was worse than expected with the significant flip on the Senate side. The 114th Congress will more likely be an exercise in moving smaller pieces of legislation, rather than larger pieces, especially if the latter are opposed by the White House and Senate Democrats. Not having a filibuster-proof majority for the Republicans in the Senate will make it very difficult to move anything that doesn’t have bipartisan traction, particularly if they are trying to undo administrative action or move through Republican-only issues.
Tucker: The Republican majority coming into the House is the largest in modern times, and they picked up a number of swing districts in New England and the Midwest. As a result, Speaker Boehner has a lot of wiggle room given the more diverse ideological caucus from which to navigate issues.
Johnson: On the Democratic side in the House, diminished overall numbers include fewer moderates, especially in the centrist Blue Dog coalition, suggesting a corresponding push to the left. Less moderation will be a characteristic heading into the next Congress.
Tucker: Looking at the characteristics of the Senate, the flip of the majority means that the parties are trading roles. Instead of Mitch McConnell acting as a roadblock to the Democratic agenda, Harry Reid will be trying to stop the Republican agenda. The House of Representatives was fairly active this Congress, but not many of the House-passed bills received any attention in the Democratic-controlled Senate. Now the House will have a willing partner under a Republican Senate.
Johnson: The area of energy policy has provided ground for agreement and compromise, and, again, we see opportunities for legislative traction with smaller issues – such as energy efficiency proposals – rather than comprehensive issues. Whether there will be a political will to move such proposals forward in both chambers and the White House remains to be seen. The Keystone XL Pipeline, for example, has resonated with Republicans in both chambers and will top their agenda, though it’s unclear whether President Obama would enact it in the event Congress passed it.
Tucker: It’s worth pointing out that the incoming chairs of the House and Senate energy committees – Representative Fred Upton and Senator Lisa Murkowski – have already laid out comprehensive proposals for energy policy, and both have a track record of working in a bipartisan manner and are already working with their Democratic counterparts to see where common ground might exist on certain energy policy issues such as infrastructure and energy efficiency.
Other issues, such as LNG and crude exports, are also likely to receive focus given the change in the political landscape as well as the drastic change in the marketplace and the price of oil this fall.
Johnson: In a hearing earlier this month before the House Energy and Power Subcommittee, members and hearing witnesses expressed an increasing openness to eliminating the crude oil export ban. However, both full Committee Chairman Fred Upton and Subcommittee Chairman Ed Whitfield cautioned that thorough analysis and debate of the issue would be necessary before legislation lifting the ban is considered.
Tucker: Another key issue is offshore exploration, a longtime central tenet of the Republican platform. While the House has promoted bills over the last several Congresses, it hasn't had a dance partner, so to speak, in the Senate. Chairman Upton on the House side has his policy proposal, what he calls the Architecture of Abundance, and incoming Chairwoman Lisa Murkowski on the Senate side released her energy policy plan entitled Energy 2020, both of which call for expanded offshore drilling. In addition to the underlying policy rationale of increased domestic production, the ability for the government to generate additional revenues from increased royalties further enhances the prospect of this being a very attractive piece of legislation in Congress.
Johnson: The departure of Mary Landrieu as the top Democratic advocate for offshore exploration is a significant dynamic in the Senate because there are no champions like her in the Democratic caucus at this point, and it will be difficult to move expanded drilling in the Senate without meaningful Democratic support. In sum, we’re unlikely to see significant offshore exploration legislation move through to enactment over the next couple of years.
Tucker: One of the more contentious issues for Congress and the White House is greenhouse gas emissions. Senator McConnell ran an energy-centered campaign in his reelection in Kentucky, with views that directly oppose the White House agenda and the president’s commitment to an aggressive greenhouse gas policy.
Johnson: That issue reflects how the administration will head into the next couple of years, namely, in pursuing administrative action and using its executive authority to deal with a range of issues related to climate and energy. The administration already has its plan to reduce carbon emissions from power plants by 30 percent, and the extent to which the issue of carbon emissions and greenhouse gas emissions becomes a politically divisive issue early on will be a bellwether of wider trends. It could set the tone for the ability of both parties to work together on other issues with bipartisan support.
Tucker: Without a doubt, the administration’s environmental regulatory actions will be the focus of significant contention with a Republican-led Congress. However, pent-up demand exists for legislation on a wide range of other issues that present an opportunity for policymakers to work together. In either case, energy policy will come to the forefront of the new Congress in 2015.
Burdick: Thank you for this constructive debate. I have to say that, while the political system in Washington may be broken, it still works at Akin Gump.