Where is U.S. energy policy heading over the next two years?
To get a sense of where energy and environmental policy might be headed in the next Congress, The Wall Street Journal reached out to policy advocates on opposite sides of the political fence: Alison Cassady, director of domestic energy policy at the Center for American Progress and a former aide to House Energy and Commerce Committee ranking member Henry Waxman (D., Calif.); and George David Banks, senior fellow at the R Street Institute and former Republican deputy staff director for U.S. Senate Environment and Public Works Committee ranking member James Inhofe (R., Okla.). Here are edited excerpts…
…MR. BANKS: In Congress, the GOP will adopt messaging bills and Congressional Review Acts on key regulations that the president will veto. At the same time, Republicans will slow or chip away at the White House’s climate policies via focused appropriation plays attached to must-pass bills. Beijing’s agreement that it intends to cap emissions by 2030 will heighten “leakage” concerns that U.S. emissions (and jobs) will continue to be transferred to China, thus strengthening the argument that EPA action does not produce any real climate mitigation benefits.
China essentially “agreed” to do what it already intends to do. Thus, there was no real “deal.”
China remains on track to reach a greenhouse-gas emissions level by 2017 that is double the U.S. level. In fact, China is expected to add the equivalent of the entire current U.S. coal fleet over the next decade. That translates into a new 600-megawatt coal plant every 10 days. At the same time, the U.S. plans to shutter a large percentage of its coal fleet, reducing a key source of affordable and reliable electricity. If that were a deal, it would be a lousy one, and Republicans know that…
…MR. BANKS: With the president expressing little interest in working with Congress, we should not expect to see significant bipartisanship on most controversial issues. The president’s carbon plans, for example, rely solely on using existing executive-branch authority under the Clean Air Act to achieve emissions reductions. Republicans are counting on the courts to eventually reject related EPA proposals, in part or in their entirety.
One wild card on the climate-change front is the potential for extreme weather events this winter. We came dangerously close to a grid failure last January during the polar vortex. If part of the grid fails (i.e., millions of people go without electricity) because of the absence of coal plants that were shuttered because of EPA regulations, the president’s go-it-alone approach could face major criticism. Democrats who have often used extreme weather events to promote action on climate change may find the tables turned by Republican arguments that unreasonable climate and environmental policies resulted in actual harm to the American people…
…MR. BANKS: It’s unfortunate that Sen. Mary Landrieu ’s effort failed by only one vote. A recent Huffington Post poll indicated that 56% of Americans support the pipeline. Of course, Republicans will try again next year. Four of the Landrieu “no” votes will be replaced with Republicans, thus the GOP has a solid chance of reaching the 60-vote threshold, as long as no more than three Democrats abandon their “yes” position. We should not expect the magic [veto-proof] number of 67 to be reached, given the symbolism of the pipeline to climate alarmism. The president will therefore maintain leverage with the veto threat.
Regardless, the Congress may send a bill to the president as a stand-alone. Given the number of bills that he will feel forced to oppose—chiefly those aimed at stopping the climate agenda—the White House should choose when best to exercise the veto, particularly given the level of public support for the project. Most Americans do not view Keystone as an environmental threat, backed by a State Department assessment that the pipeline only produces negligible greenhouse-gas emissions. If the president does veto it, Congress will attach the pipeline approval to a must-pass bill that he cannot veto…
…WSJ: The oil industry is lobbying Congress to relax the decades-old ban on oil exports, while the White House studies the upshots of the U.S. oil boom. What do you think Congress will do on this issue? Do you think the Obama administration will change its policy?
MR. BANKS: It is highly likely that the ban on crude-oil exports will be lifted by this Congress with White House support. Our reduced dependence on oil imports—resulting from increased domestic oil production and transportation-fuel efficiency improvements—has made the ban much more difficult to defend. Moreover, the ban and its exceptions could very well be inconsistent with U.S. trade obligations, as pointed out by a number of studies.
WSJ: What do you think Congress and the president will do about the ban on oil exports?
MR. BANKS: It is highly likely that the ban on crude-oil exports will be lifted by this Congress with White House support. Our reduced dependence on oil imports—resulting from increased domestic oil production and transportation-fuel efficiency improvements—has made the ban much more difficult to defend. Of course, wild cards exist. An oil supply shock in the Middle East, for example, would complicate a shift in policy, despite the global market’s increased need for U.S. oil…
