The overwhelming Republican takeover of the U.S. House of Representatives last week pasted happy faces on natural gas and oil industry execs and spurred President Obama to mention natural gas as a possible area of compromise with the new Congress. The president, however, appeared to be the only one talking compromise.
Capitol Hill watchers predicted that with Republicans running the House committees there would be a slew of oversight hearings calling the administration on the carpet for — among a whole host of other things — the pokey pace of permitting for drilling in the Gulf of Mexico and a variety of greenhouse gas initiatives from the Environmental Protection Agency (EPA), including its study of hydraulic fracturing.
Also, the Obama administration initiatives to draw more taxes from the oil and gas industry that didn’t make it through the current Democratic-controlled Congress, won’t get much attention in the new House, which has the exclusive authority to initiate tax and spending measures.
In fact, political watchers are expecting little more than sound and fury from the split 112th Congress. The new Congress, which still is missing some undecideds, basically adds up to 240 House Republicans and 185 House Democrats trotting up to Capitol Hill next year alongside 52 Democratic senators and 46 Republican senators. That, plus the determination of Rep. John Boehner (R-OH), expected to be the next House speaker, to make Obama a one term president, does not argue for much cooperative lawmaking.
Meanwhile, “I’m thrilled that our commander in chief [Wednesday] used the words ‘natural gas’ in a speech,” Range Resources CEO John Pinkerton told a Marcellus shale gathering in Pittsburgh. “It’s been a long time coming.”
The reference was to Obama’s post-election speech naming natural gas as an issue that both Republicans and Democrats could find common ground on in the 112th Congress.
“We’ve got, I think, broad agreement that we’ve got terrific natural gas resources in this county. Are we doing everything we can to develop those?” the president said.
“I think there are a lot of Republicans that ran against the energy [and climate] bill that passed in the House last year. And so it’s doubtful that you could get the votes to pass that through the House this year or next year or the year after. But that doesn’t mean there isn’t agreement that we should have a better energy policy. So let’s find those areas where we can agree,” Obama said. He also mentioned development of electric cars and restarting the nuclear industry.
As for measures to reduce GHG emissions, “I think it’s too early to say whether or not we can make some progress on that front. I think we can. Cap and trade was just one way of skinning the cat; it was not the only way. It was a means, not an end. And I’m going to be looking for other means to address this problem.
“I think the EPA wants help from the legislature on this. I don’t think that the desire is to somehow be protective of their powers here. I think what they want to do is make sure that the issue is being dealt with,” the president said.
“We had no forewarning” that Obama would say this about natural gas, said Lee Fuller, vice president of government relations for the Independent Petroleum Association of America. “It certainly was a positive signal that he shows interest in natural gas.” But, Obama’s statement was “very short and not very precise,” leaving a lot of room for interpretation, Fuller said.
“The question now will be whether their policies support that statement; so far they haven’t,” Fuller said. As examples, he cited the delay in approving drilling permits in the Gulf of Mexico, the drilling moratorium, the administration’s drive to increase taxes on industry, and the EPA’s study on regulation of hydraulic fracturing.
The Republican-led House will be looking for ways to take its projected 60-seat gain in Tuesday’s election out for a spin. It can be expected to “aggressively initiate oversight hearings on the EPA, particularly centering on its greenhouse gas regulatory structure,” said Fuller.
He pointed out that both the House Energy and Commerce Committee and the Transportation and Infrastructure Committee have jurisdiction over the EPA activities. Also, the House Oversight and Government Reform Committee can hold hearings on any subject, and very well could jump into the EPA fray.
The oversight investigations of EPA will garner support generally from business and power generation interests, not to mention coal producers. The agency has threatened to go forward with its own rulemakings on greenhouse gas emissions if Congress failed to pass serious emissions restrictions such as proposed cap-and-trade legislation.
“I would anticipate that a broad array of greenhouse gas issues would be among the areas they [the oversight committees] would pursue,” Fuller said. That could include the ‘tailoring’ rule or a rule regulating emissions from stationary sources, or the greenhouse gas inventory.
Questions about the EPA’s ongoing study of hydraulic fracturing also could come up. There could be some oversight aimed at “assuring that study is being done fairly and scientifically,” Fuller said. He pointed out that the study’s mandate is to determine if hydraulic fracturing is being effectively regulated. “If the study is done well, I believe it will show that fracturing is being effectively regulated in its current form. The states have been regulating it for over 50 years.” The EPA does not now have the authority to regulate drilling, but an adverse report could impact state activities and spark litigation.
Also, expect to see a whole slew of oversight committee hearings that likely will call on the Interior Department to explain the slow pace of well permitting in the Gulf of Mexico following the oil spill, which occurred last April.
As to what actions might make it through the legislative process, that is more problematic given the Republican-Democrat split in the Congress and the administration. “They can shine the light” on questionable items or question whether the EPA is following the law. “They can try to restructure EPA authority or restrict funding. Other avenues are possible,” Fuller said, “but they all require both houses to act and the president to sign legislation.”
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