Energy and Environment Reporting for Texas

After Obama’s Re-Election, What’s Next for Energy and Environment Policy?

Photo by JEWEL SAMAD/AFP/Getty Images

US President Barack Obama addresses a crowd of supporters on stage on election night November 6, 2012 in Chicago, Illinois.

It’d be foolish to predict exactly what a second Obama term will mean for energy policy, but the issues at this point are pretty clear.

Reuters says that more energy regulations are likely in the second term. “Tougher restrictions are expected for companies drilling on federal lands, as well as more rules governing water management and methane emissions,” the news service writes. Scientific American takes another view, writing that the President’s policies will lead to more drilling and research and funding for alternative energy.

Some of these potential policies have big implications for the massive energy industry (and aging coal power plants) in Texas, but at this point it’s really anyone’s guess how exactly it will all play out. 

Here are some of the policies up in the air, from Politico’s Morning Energy Report:

What exactly are Obama’s priorities for a second term? Will the next Congress take up its first comprehensive energy bill in years? Without the pressure of an incoming Romney administration, how quickly will EPA move to finalize regulations on emissions from new power plants, soot standards and boiler and cement MACTs? When and how will Obama approve the Keystone XL pipeline? If Obama pushes on climate change, will he work to promote smaller initiatives or go for another widely encompassing piece of legislation?”

The Hill points out some energy winners and losers this election. On the winning team? Wind energy tax credits, people who want to see more action on climate change, and Democrats, who will keep control of the Senate, and hold on to the chairmanship of the Senate Energy and Natural Resources Committee as a result.

On the losing end? The Keystone XL pipeline, which they note is “far from dead, but a Romney win would have meant near-certain approval;” Oil companies, as Obama has said he intends to go after industry tax breaks; and Republican Senators Lisa Murkowski (Alaska) and James Inhofe (Oklahoma), who would have chaired committees on energy and environment policy.

Breath Deep and Count to Ten

In an interview with Forbes, the University of Texas at Austin’s Dr. Michael Webber, one of school’s leading energy professors, assures the oil and gas industry that Obama doesn’t have it in for them. “They hate him, but he hasn’t done a thing to hurt them. He [Obama] hasn’t stopped them,” Webber says, going on to refute many of the energy policy criticisms lobbed against the Obama administration during the election cycle.

Indeed, the current Texas drilling boom has taken place on Obama’s watch, and Webber doesn’t foresee a move towards federal regulation of hydraulic fracturing or “fracking,” which is now regulated by the states. Fuel exports from the U.S. are actually nearing historic levels as a result of the fracking-led boom. And in his acceptance speech Tuesday night, the President called for “freeing ourselves from foreign oil,” which will mean more drilling domestically (coupled with decreased consumption and increased efficiency and fossil fuel alternatives).

Keystone Continued?

But what of the Keystone XL pipeline? One Texas pundit has already weighed in on its fate.

“If Obama wins, Texas will be completely isolated,” Texas Monthly’s Paul Burka wrote shortly before the race was called Tuesday night. “You can forget the [Keystone] XL pipeline. We will get absolutely nothing from the Obama administration.”

Except the southern leg of the pipeline — the portion that runs through Texas — has already been approved (and promoted by Obama in March) and is currently under construction. That will tie into the existing pipeline, the Keystone, which already runs from Canada to Cushing, Oklahoma.

As this southern leg of the “XL” is completed, tar sands oil will soon flow from Canada to refineries on the Gulf Coast. (An additional spur through Nebraska to Canada will make up the Northern leg of the Keystone XL, and is expected to be approved sometime early next year, but as noted above, it isn’t a done deal.)

A New Political Climate

Perhaps the biggest question is what, if anything, the Obama administration will do to address climate change. “We want our children to live in an America … that isn’t threatened by the destructive power of a warming planet,” the President said in his victory speech Tuesday night.

How exactly his administration could set to work on that is examined by Andy Revkin at his Dot Earth blog at the New York Times:

“In addressing greenhouse gas emissions, the question will be how much focus Obama should put on legislative initiatives (probably not much, again given other priorities and structural blockades in the Senate), on diplomacy (the climate treaty process will mostly be “soft” diplomacy for years to come), on targeted spending and administrative moves (a lot of potential), and on basic leadership (vast untested potential).

He and Congress would do well to examine ways to cut vulnerability to climate-related hazards, whatever the mix of natural and human forces involved. A good first step would be a fresh look at perverse incentives (such as aspects of federal flood insurance policy) that end up prompting people to build in harm’s way in floodplains and coastal zones.”

In his first term, Obama passed huge vehicle efficiency standards that will result in the average car using half the amount of gasoline they do today by 2025. And the EPA proposed new greenhouse gas rules, which will put emissions limits on refineries and power plants. Last night’s speech isn’t the first time the President has mentioned climate change — the question is what more he can do in his second term.


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