Energy Politics to Shift in House

Energy Politics to Shift in House
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

Nov 29, 2022 13:57
wall street jornal |

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