GOP control improves
prospects for oil, gas,
while slowdown seen
for green transition
Oil-and-gas companies are anticipating
a friendlier environment in Washington as the House comes under Republican rule
next year, while the cleanenergy sector is bracing for a slowdown in the Biden
administration’s aggressive push away from fossil fuels. House Republicans, who
gained a slim majority in the midterm elections, are expected to support
measures aimed at boosting domestic oil-and-gas production, which they have
framed as a matter of national security following supply strains triggered by
Russia’s invasion of Ukraine. Democrats still control the Senate, and
Republicans aren’t expected to pass sweeping energy legislation. But they could
make President Biden’s rollout of green-energy policies more difficult,
including by using committee chairs to subject federal agencies to scrutiny on
energy policy. Oil-and-gas companies could also be getting a warmer reception
from Democrats, some in the energy industry believe, given that high fuel
prices cut across party lines and a transition away from fossil fuels is still
years away. “Can we start to move to a more balanced conversation about how
we’re utilizing fossil fuels, how we’re utilizing renewables?” asks Jason Churchill, chief executive of PetroLegacy Energy, a small
independent oil-and-gas producer based in Texas. “Make it a conversation and
less of a fight between the two agendas.” Democrats said they would continue to
push for energy transition measures that lower the country’s emissions of
planet-warming greenhouse gases. Rep. Kathy Castor (D., Fla.), who leads the
House Select Committee on the Climate Crisis, accused Republicans of ignoring
climate issues as they ascend to power. “Their inaction and lockstep alliance
with polluters are exacting a toll on everyday Americans, farmers, and
communities alike, making it harder to afford basics like water, electricity
and energy,” she said in a recent statement. The Biden administration’s rollout
of green-energy programs could slow as Republicans take over committee
chairmanships and step up scrutiny of programs including loans to
solar-component manufacturers and heat-pump rebates. Republicans are likely to
challenge federal agencies they think have overstepped their rule-making
authority, and create committees to look for waste, fraud or abuse in
cleanenergy programs, said Joseph Brazauskas, a specialist in congressional
oversight processes at law firm Bracewell LLP. One big target is likely to be
the Energy Department’s Loan Programs Office, which finances clean-energy
technology projects, he said. “It slows down the policy making,” Mr. Brazauskas
said of congressional oversight. “It’s kind of like walking in the mud.” That
could drain resources from the Environmental Protection Agency and other
agencies that could use the time instead to hone the details of new
clean-energy programs, said Lisa Jacobson, president of the Business Council
for Sustainable Energy, a clean-energy trade group. “There’s a concern that it will
just create uncertainty in the market,” she said. “It’s a fragile time.” Some
in the energy industry believe those fears are overblown, noting that
Republicans don’t have the clout to unwind the tax incentives and other
clean-energy programs the Biden administration has enshrined in law, including
the Inflation Reduction Act and the bipartisan Infrastructure Investment and
Jobs Act. What’s more, some of the states that stand to reap the most economic
benefits from wind, solar and electric-vehicle development are
Republicanleaning, meaning politicians on the ground will want those projects
to move forward, clean-energy executives say. “A lot of these investments are
going to be made in red [Republican] states, and a lot of good-paying jobs are
going to be created,” said Reagan Farr, chief executive of Nashville,
Tenn.-based solar developer Silicon Ranch. Many oil-and-gas companies back
clean-energy technologies, such as hydrogen production or the capture and
storage of carbon dioxide, which also are getting tax incentives from a $370
billion climate-policy bill that passed without one Republican vote this year.
“There are a lot of companies that will be able to benefit from the provisions
that were in those laws,” said Martin Durbin, senior vice president for policy
at the U.S. Chamber of Commerce, a broad business lobby. On the legislative
front, Republican control of the House could propel bipartisan negotiations on
changing the laws that govern the U.S. permitting process for major energy
infrastructure projects, an initiative being led by Sen. Joe Manchin (D.,
W.Va.) and embraced by fossil-fuel and cleanenergy companies alike. Republicans
say that would speed up new oil-and-gas production and eventually bring down
energy prices for consumers. Some Democrats may be willing to clear hurdles to
building electricity lines that connect cities to solar or wind developments,
even if it means compromising by also allowing natural-gas pipeline development
that is opposed by environmentalists and some progressive Democrats. O