*Part three of four. From east to west, this series previews the Nov. 6 midterm elections and their implications for the oil and natural gas industry. It offers a glimpse of candidates running for state and federal offices, the prominent energy-related issues factoring into campaigns, ballot initiatives and the fight for control of the U.S. House and Senate, which could have implications for key energy committees. Part 1 reviewed Appalachian issues; Part 2 looked at the major issues at stake across the West; and Part 4 focused on implications of a possible Democratic takeover of the House.
Despite predictions of a Democratic “blue wave” in the midterm elections, the GOP appears poised to maintain its slight edge in the Senate, giving Republicans continued control of some aspects of the nation’s energy policies, especially through the appointment process to various federal posts and leadership of the Senate Committee on Energy & Natural Resources.
Republicans outnumber Democrats and their independent allies 12-11 on the committee, but only one Republican, Sen. John Barrasso of Wyoming, is running for reelection. By contrast, six Democrats and two independents that caucus with them are up for reelection. Separate analysis by the websites Ballotpedia, FiveThirtyEight and RealClearPolitics is forecasting most of the incumbents should be reelected easily.
Democrats Gunning For Upset
FiveThirtyEight was projecting a 5-in-6 chance that Republicans will retain control of the Senate, while Democrats have 1-in-6 odds of flipping it to their side. The most likely scenarios are for the GOP to maintain a 51-49 edge (17.9% chance) in the Senate, followed by the Republicans picking up one seat for a 52-48 advantage (16.7%). Vice President Mike Pence would be the tiebreaker in the event the GOP loses one seat and the Senate is divided 50-50 (15.2%) along party lines.
The Independent Petroleum Association of America (IPAA), which supports candidates financially through its Wildcatters Political Action Committee, said Democratic control of the Senate may not bode well for the oil and gas industry.
“Minority Leader Chuck Schumer (D-NY) has a 10% voting record on IPAA’s priority legislation,” spokesman Jeff Eshelman told NGI. “That’s a stark contrast to the priorities of the current GOP leadership.
“The workload of a Democratic House and Senate majority would focus less on producing good energy policies, but more so on investigations and oversight — not only on the oil and gas industry, but also most affiliated industries up and down the supply chain, from power plants, to utilities to manufacturing.”
The Republican-led Senate has had quite a remarkable two years since President Trump took office in January 2017.
After decades of unsuccessful attempts to lobby their colleagues in Congress to open a portion of the Arctic National Wildlife Refuge (ANWR), aka the 1002 Area, to oil and gas development, Trump and the GOP attached a controversial policy rider authorizing drilling to last December’s $1.5 trillion comprehensive tax reform bill.
The ANWR provision has been a longtime priority for Republican Sen. Lisa Murkowski, who chairs the Energy & Natural Resources Committee. Even though Murkowski voted against the confirmation of Brett Kavanaugh to the Supreme Court last month, political analysts predicted the ANWR provision should boost her profile if she runs for reelection in 2022.
Trump Appointments Better Secured With GOP Control
Should the GOP maintain its grip on the Senate, Trump would have a far easier time getting nominees to various federal posts approved — including to FERC, the Interior Department and the U.S. Environmental Protection Agency (EPA).
Earlier this month, Trump announced his intention to nominate Republican Bernard McNamee to fill a vacant seat at the Federal Energy Regulatory Commission. Since then, however, speculation has risen that Republican Chairman Kevin McIntyre may step down or leave the Commission because of health issues.
Last July, Interior’s Office of Inspector General (IG) opened an investigation into whether Secretary Ryan Zinke violated conflict of interest laws. If Zinke were forced to resign in the wake of the IG probe, the Senate would need to approve a successor.
Both chambers of Congress would also need to sign off on an Interior proposal to reorganize into 12 “unified regions,” a move that is backed by the oil and gas industry, which is eyeing faster permitting and more efficient regulatory oversight.
At EPA, Andrew Wheeler has been serving as acting administrator since Scott Pruitt resigned in July. Although it’s unclear if Wheeler, a former coal industry lobbyist, is interested in the top job at EPA, five GOP senators urged him earlier this month to clarify the agency’s position on Section 401 of the Clean Water Act, citing alleged abuses by states to block or delay infrastructure projects, including interstate oil and gas pipelines.
Although Barrasso is heavily favored to win in Wyoming, a tight race is underway in Arizona between Democrat Kyrsten Sinema and GOP candidate Martha McSally. Both hope to succeed Republican Sen. Jeff Flake, who is retiring.
Six GOP senators — James Risch of Idaho, Steve Daines of Montana, Cory Gardner of Colorado, Lamar Alexander of Tennessee, Bill Cassidy of Louisiana and Shelley Moore Capito of West Virginia — are not up for reelection until 2020. The remaining three Republicans — Murkowski, John Hoeven of North Dakota and Rob Portman of Ohio — won’t be on the ballot until 2022.
Eyes On North Dakota, Texas, West Virginia
For the Democrats, the calculus of capturing the Senate majority includes winning seats in three major oil and gas producing states: North Dakota, Texas and West Virginia.
Sen. Joe Manchin of West Virginia is a longtime backer of the oil and gas industry. In 2007, when he was governor of West Virginia, he called the state legislature into special session to consider several energy bills, including one to add more consistency and certainty to the oil and natural gas royalty and tax systems. After his election to the Senate in 2010, he urged EPA to abandon national standards for pretreatment of wastewater and air emissions from shale gas operations, among other things.
Manchin crossed party lines to support ANWR drilling, small-scale liquefied natural gas exports and the Keystone XL crude oil pipeline. He also voted to block the controversial Clean Water Rule (CWR) from taking effect. But he stuck with his Democratic colleagues and voted against lifting a ban on U.S. crude oil exports.
Manchin is in a tough race against his GOP opponent, West Virginia Attorney General Patrick Morrisey.
In Texas, Republican Sen. Ted Cruz, first elected in 2012 during the second Tea Party wave, was leading Democratic challenger Rep. Beto O’Rourke in a race that has attracted national attention. The last time Texas elected a Democrat to the Senate was 1988, when Lloyd Bentsen won a fourth term.
Last August, Cruz was one of six GOP senators to oppose a $154.2 billion “minibus” spending bill for fiscal year 2019, which included funding for the Department of Interior and the EPA. In 2016, Cruz joined four Republican colleagues in opposing a possible Justice Department probe into private entities’ views on climate change.
Democrats face an even tougher challenge in North Dakota, where incumbent Sen. Heidi Heitkamp has been trailing GOP Rep. Kevin Cramer. Heitkamp has been a supporter of the oil and gas industry, and voted in favor of lifting the crude oil export ban. She also voted with Manchin to support Keystone XL and to block the CWR from taking effect.
Democratic Sen. Maria Cantwell of Washington, ranking member of the Committee on Energy & Natural Resources, is expected to easily win reelection. So too are Independent Sens. Bernie Sanders of Vermont and Angus King of Maine, who both caucus with the Democrats, along with Debbie Stabenow of Michigan, Martin Heinrich of New Mexico, Mazie Hirono of Hawaii and Tina Smith of Minnesota. Sens. Ron Wyden of Oregon, Tammy Duckworth of Illinois and Catherine Cortez Masto of Nevada are up for reelection in 2022.
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