Last year, when Republicans gained a decisive edge in both houses of Congress, I made predictions as to the six energy-policy changes we could expect—as the two parties have very different views on energy issues. I closed that column with these words: “It is going to be an interesting two years. If the Republican policies turn the economy around—offering a sharp contrast to the stagnation of the past six years, they will pave the way for victory in 2016.”
We are now halfway through the “two years” in which I expected the changes to take place. Here’s where American energy policy now stands.
Keystone Pipeline—B grade As predicted, the GOP got right to work backing the Keystone pipeline. The House had already passed several bills aimed at getting the project built, but with a Republican Majority Leader in control in the Senate, Harry Reid (D-NV) could no longer prevent a vote. With strong bipartisan support, on February 11 Congress passed the bill approving construction. Though many Democrats—often from states with strong Union membership—crossed the aisle and voted with the Republicans, the Keystone XL Pipeline Approval Act fell a handful of votes short of making it veto-proof. As expected, two weeks later, President Obama vetoed the bill.
Having communicated with TransCanada representatives, the company behind the Keystone construction, and Union officials—and having oft addressed its benefits—I was optimistic that some late night arm twisting would bring the needed Democrats on board, but on March 4, the vote to override the veto failed.
While the bill ultimately failed, my projection was accurate: understanding the impact the Keystone pipeline would have had on job creation and energy security, Republicans made the Keystone pipeline a high priority. (Note: Obama’s claim that “The Keystone pipeline is for oil that bypasses the United States” qualified for the Washington Post’s list of “The biggest Pinocchios of 2015.” But, try discussing the pipeline with an opponent and you’ll repeatedly hear that claim.)
Oil Exports—A-grade Throughout the year, talk of lifting the decades-old oil export ban gained momentum. Rep. Joe Barton (R-TX) introduced H.R. 702, a bill to adapt to changing crude oil market conditions, in February. On September 17, the House Energy and Commerce Committee voted to send the legislation to the full House for final passage—which took place on October 9.
As with Keystone, the bill had bipartisan support, though many Democrats opposed it. Comments made in the House chambers before the vote reflected the partisan divide on energy issues. Opposing the bill, Democrats grandstanded saying it would put more money in the pockets of big oil. In contrast, Republicans understand that successful businesses hire people. With the current low-priced oil environment, tens of thousands of jobs have been lost in the oil industry. Lifting the ban helps by providing new markets for U.S. oil and eliminating the discount American producers have had to accept for their product.
Should the bill make it to Obama’s desk, the White House, as always, threatened a veto.
Despite passing another committee vote in early October, the Senate didn’t take up the bill. Lifting the ban, however, was included in the omnibus-spending package that Obama quickly signed on December 18.
With the ban now officially overturned, the spread between the global benchmark price, known as Brent, and the U.S. benchmark, known as WTI (for West Texas Intermediate), has virtually disappeared. Within a matter of days, the first shipment of U.S. crude will beheading overseas—to Switzerland.
Climate Change—B Grade Last year, I wrote: “The Environment and Public Works Committee (EPW) Chairmanship will change from one of the biggest supporters of Obama’s climate change agenda (Senator Barbara Boxer [D-CA]) to the biggest opponent of his policies (Senator Jim Inhofe [R-OK]).” With that change, we’ve heard a different tune coming from The Hill.
Days before the UN conference on climate change took place in Paris, the Senate held a hearing and passed resolutions designed to let the world know that Obama did not have the support of the U.S. Senate—which would be needed for any legally binding treaty. While Obama would surely veto any such legislation, the New York Times reported: “Proponents believe their defiance will have diplomatic repercussions.” In a statement following the vote, Senator Inhofe said: “The message could not be more clear that Republicans and Democrats in both the U.S. Senate and U.S. House do not support the President’s climate agenda and the international community should take note.”
The plan was successful; the “international community” took note. It is believed that the Republican drumbeat prompted the European Union to back off of its insistence that any carbon goals in the final agreement need to be legally binding. The agreement that was ultimately reached in Paris is, according to the New York Times, “essentially voluntary.”
Polls taken just days before the Paris conference indicate that only 3% of Americans believe that climate change is the most important issue facing the country and that a wide majority of voters “oppose the government investigating and prosecuting scientists and others including major corporations who question global warming.”
Environmental Protection Agency (EPA)—C grade The EPA didn’t get defunded in the December 18 spending bill, as many had hoped, but it didn’t get a budget increase while many other departments did. It is considered a “loser.” Funding levels for the EPA in 2016 are at a level lower than 2010, but on par with 2015.
The agency has received several smack downs in 2015 from federal courts—including putting its onerous Waters of the U.S. Rule on hold. Obama’s Clean Power Plan, the focus of the Senate’s resolutions, is facing numerous lawsuits, including one of thenewest from the Competitive Enterprise Institute, and may also be awarded a stay. This is surely an issue to watch in 2016.
The Endangered Species Act (ESA)—D grade One of the big concerns for anyone in the West who earns a living from the land—ranching, farming, mining and mineral extraction, or who benefits from the results (food, fuel, and fiber)—has been the potential listing of the greater sage grouse as an endangered species. While it did not get listed, and the omnibus deal blocks the U.S. Fish & Wildlife Service from putting it on the Endangered Species list, the Bureau of Land Management has enacted land use plans that that will likely have many of the same effects of listing under the Act. It is time for ESA reform.
Federal Lands—D grade This final issue saw little action in 2015, but with the anti-fossil fuel movement’s aggressive plans to keep resources in the ground, especially on federal lands, this one is ripe for attention from the GOP-controlled Congress—led by Rep. Bob Bishop (R-UT), Chairman of the House Resources Committee. Addressing the nearly one-third of the U.S. owned by the federal government, Bishop recently stated: “Whether they know it or not, every person is affected by the mammoth federal land ownership in this country.” Bishop has created a “Federal Footprint Map” that he hopes will “play a vital educational role as Congress evaluates and responds to executive actions and debates related policy reforms.”
For 2016, Congress will need to stay on top of Obama’s rules, regulations, and executive orders aimed at burnishing his legacy on climate change. It should also rein in the EPA, reform the ESA, and work to reduce the amount of land owned by the federal government.
Let’s hope for more positive movement in 2016—including a new resident in the White House, who understands the important role energy plays in making America great.