Experts React: Energy and the 2018 Midterms
November 9, 2018
Senior Associate (Non-Resident), Energy and National Security Program
The Trump administration’s energy policy agenda has focused on reducing unnecessary, outdated, and burdensome regulations on the energy industry. But that could change with the Democrats in control of the House.
Last March, President Trump signed Executive Order 13783, “Pursuing Energy Independence and Economic Growth,” which stated, among other things, that it is “in the national interest to promote clean and safe development of our Nation's vast energy resources, while at the same time avoiding regulatory burdens that unnecessarily encumber energy production [. . .]” The administration has moved aggressively to rescind and, in some cases, revise regulations. Examples include changes to methane regulations on new and modified oil and gas facilities, revamping the Obama Clean Power Plan, and scrapping federal rules governing hydraulic fracturing on federal lands.
Come January 3, 2019, and backed by subpoena threats, the new House majority will assuredly conduct vigorous oversight of the administration’s policies. Faced with a barrage of investigations, document demands, and hearings, Trump officials will inevitably be forced to respond, which means less time and resources devoted to fulfilling the president’s agenda.
Moreover, expect the Democrats to utilize the Congressional Review Act (CRA), a statute that established fast-track procedures for Congress to overturn regulations. Watch out especially for rules from the Environmental Protection Agency, the Department of Interior, and the Department of Transportation. In the Senate, Democrats can discharge CRAs from committees, forcing a floor vote. CRAs are not subject to amendments and filibusters. Only a simple majority is required for passage. Of course, CRAs will not get past President Trump’s vetoes—neither chamber has the two-thirds majority required to override them. But the administration will nonetheless be on defense, devoting time away from executing its priorities.
Senior Vice President; Director and Senior Fellow, Energy and National Security Program
Energy was not a major issue in the 2018 midterm elections, but, as Kevin Book and I discussed on our recent podcast, the energy issues were impacted by the midterm election results on multiple levels through a change of party leadership in the House, gubernatorial elections, and several ballot initiatives. The election results will also inform strategies for the 2020 election cycle (yes, it begins already). In that regard, the 2018 midterm elections confirmed what we already know: the country is divided. On the energy side, it also seemed to confirm something else we already know: Americans are, by and large, middle-of-the-road on energy issues, except for places where they are not—like in California, where they voted to maintain a gasoline tax increase.
The rest of the energy-related ballot initiatives were mostly defeated. (The notable exceptions to this were in Florida where a constitutional ban on offshore drilling passed and in Nevada where a 50 percent renewable portfolio standard passed as well.) Some may view this as a sweeping defeat for environmental groups that lost bids for a carbon tax in Washington state, oil and gas development setbacks in Colorado, a renewable energy mandate in Arizona, and an already-once-approved change to the electric power markets in Nevada.
Each state is very different from one another, so it is hard to generalize what these outcomes together could mean. But it seems U.S. voters are (1) still wary of initiatives that get characterized as a big change to the energy system and (2) motivated to oppose those changes when they are told the measures will inflict economic harm. The argument against the Colorado ballot initiative was that it would destroy jobs and harm state revenue. The argument against the Washington state carbon tax initiative was that it would cost households $440 in the first year. While each of these measures might have had flaws, this line of attack is discouraging, because many of the best things we can do to improve the nation’s energy future require upfront costs for longer-term gains.
Opponents of several of these measures said that they were fighting against the way the initiative was structured and not the ultimate goal (i.e., not against a carbon tax, not against renewable energy mandates, not against better regulation of oil and gas development, and so forth). If that is true, today would be a good day to start advocating for the type of plan they can support.
Senior Vice President and Trustee Fellow, Energy and National Security Program
While the results and recounts from the midterm elections continue to be finalized, a number of potential implications are beginning to come into clearer focus. Not surprisingly, some suggest directional change with local, regional, and national impacts. Others portend continued gridlock, a lack of a unified national agenda, and a prospective glimpse of 2020 battle lines in the energy, economic, and climate debate.
Democratic control of the U.S. House of Representatives will likely serve as a brake on the Trump administration’s policy ambitions (at least insofar as legislation is concerned) and also provide appropriations and oversight restraints. Coupled with a strengthened Republican majority in the U.S. Senate, the divided Congress affords both parties the opportunity to advance issues and approaches likely to resurface in 2020. For the Democrats, the change provides a heightened platform from which to promote a more environmentally-focused (e.g., clean energy economy and climate change) agenda. Sadly, but not surprisingly, beyond promotion of a possible infrastructure bill, the divided Congress affords the president the perfect foil or scapegoat for any economic deterioration between now and the presidential election in two years. Absent a stunning reversal of recent divisive political partisanship, fertile ground for the Congress and the administration to work together to address the nation’s problems seems limited to be sure.
Outside of Washington, the elections were also significant in terms of elevating and in some cases, at least temporarily, resolving key questions raised as ballot initiatives in several states. The use of referenda is likely to be a continued and growing trend, injecting additional uncertainty in planning and investment decisions but clearly reflecting the mood of a changing electorate.
For the oil and gas industry, a number of initiatives carried significant consequences. The most immediately relevant occurred in Colorado, where voters rejected Proposition 112, which would have prohibited oil and gas drilling within 2,500 feet of occupied buildings or sensitive areas. Given population density and the proliferation of drilling opportunities, the half-mile offset requirement seemed a bridge too far. (The current regulation requirement is 500 feet for individual homes/buildings and 1,000 feet for hospitals, schools, and neighborhoods.) That said, the politics and concerns around this issue are unlikely to fade. Industry needs to be increasingly cognizant of local community priorities and needs with respect to health and safety, and “prudent and responsible development” plans will need to continually evolve to adjust to those realities.
Mike Catanzaro is a senior associate (non-resident) with the Energy and National Security Program at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Sarah Ladislaw is senior vice president and director and senior fellow with the CSIS Energy and National Security Program. Frank Verrastro is senior vice president and trustee fellow with the CSIS Energy and National Security Program.
Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).
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