It is 2023. On the national scene the New Congress is set to take center stage. The drama kings and queens there have vowed this is to be a time of the extreme factions holding the moderates continued hostage. Much will be exhorted and proclaimed, most of it tabloid fodder, with little significant legislation expected with everyone tuning into 2024 elections. Most likely what the House advances the Senate will tear asunder and visa-versa.
Depending on one’s view all of this posturing and exultation with little or no action from Congress truly impacts the energy sector. The legislative paralysis creates a vacuum that emboldens and allows President Joe Biden to act independently of congressional oversight. Biden, by the fiat of executive order can continue to advance his agenda favoring suspect expensive and extensively unproven renewables over proven reliable and readily available natural gas. Key issues of permitting, additional excessive regulation along with favoritism outside the legislative process will not be balanced. According to Hart Energy reporting on The American Petroleum Institute (API) Annual Meeting this past week indicated much concern on the Biden administrations next steps. API is advocating as in their State of American Energy Report, for a shift in policy priorities to support investment in the domestic oil and natural gas industry. Hart Energy (Source: Hart Energy; Shutterstock.com) goes on to report, no surprise when the API asked for guidance regarding the White House Council on Environmental Quality (CEQ) was that President Joe Biden’s administration is seeking to expand the reach of the National Environmental Policy Act (NEPA). “NEPA is one of the most important environmental statutes that, historically, started out as a very small statute that has grown, through the [environmental impact statement and environmental assessment] process, to impede critical energy infrastructure for years,” “Now, CEQ is seeking to expand the reach of NEPA when we should be limiting the expansion of NEPA and moving projects forward.”
Pushing back on expanding regulations is what API members expects from the trade group, Emily Easely, CEO of Novus Energy Advisors, told Hart Energy. But of greater importance is tracking how the rollout of legislation such as the Inflation Reduction Act (IRA) and the Bipartisan Infrastructure Law affects the industry and what about permitting reform.
“There’s no way that there will be one standardized package for infrastructure projects,” Easely said. “There are regional issues, so it can’t be a one-size-fits-all.”
For example, on the East Coast, delays in pipeline permitting have dogged the industry for years. Citing the problem in a report won’t push Congress to flip the switch in the year or so left to legislate before the 2024 campaigns kick in. “I think that’s why they were so hopeful about [Sen. Joe Manchin] bringing that pipeline [permitting reform] bill, but I don’t think Manchin has any political currency anymore,” she said.
API’s report did succeed in pointing out issues of concern to the oil and gas industry, even if doing so won’t move the legislative or regulatory needle immediately, according to Jack Belcher, principal at Cornerstone Government Affairs.
“They’ll pass bills in the House all day long, but they’re not going to go anywhere. So, what they’re doing is laying the groundwork here for a future bill.”
The process takes a long time, he said, but the report is part of the drumbeat that gets it moving. He is also optimistic about the chances for permitting reform.
“Some of it might influence the Senate to pass some kind of a bill later this year, which I think is possible under the context of Joe Manchin’s permitting deal [with Sen. Chuck Schumer],” Belcher said. “It doesn’t just address fossil energy. It helps enable a lot of these things that are part of the IRA.” (Like expansion and improvements of the electric grid.) The whole beltway world around Washington could be said to “bide one’s time to wait for the right moment to speak or take action”. In the meantime Biden delays critical development of our regions natural gas assets through multiple executive actions.
Though the API’s report offered numerous concrete suggestions to resolve issues, it would seem Biden is biding his time and moving in alternative directions. This may include advancing a no new gas cooking stove rule.
On the state level The Pittsburgh Business Times reports Gov.-Elect Shapiro has nominated Rich Negrin as Secretary of the Pennsylvania Department of Environmental Protection. Negrin will take over a DEP that is charged with regulating the oil and gas industry, and which has drawn fire from both sides in the past.
Gov.-Elect Shapiro has prioritized the importance of working together, and he can count on our industry to work collaboratively with him and his entire team toward common-sense policy solutions,” said David Callahan, president of the Marcellus Shale Coalition. “American energy security and affordability — enabled by clean and abundant Pennsylvania natural gas — represents an opportunity to safely advance shared economic and environmental progress for the entire Commonwealth as well as our most critical allies around the world.” This all sounds good, but it is important to note Negrin is currently an executive with Commonwealth Edison, as VP of regulatory policy and strategy. He may come charged with electricity. Now it’s our turn to bide our time watching for collaborative and cooperative energy on all fronts.