American Gas - February 2013 - (Page 23)

Policies, rules, regulations, and legislative issues that will affect the natural gas industry in 2013 By Eric Schoeniger for ecast on the docket W ill the Obama administration get behind LNG exports in 2013? Will the Environmental Protection Agency tap the brakes on hydraulic fracturing? Will Congress move forward on a comprehensive energy bill? The natural gas industry looks quite a bit different today than it did just five years ago. Production of shale gas leapt 50 percent a year and now comprises 10 percent of the overall U.S. energy supply. Prices plummeted from more than $12 per million BTUs in 2008 to under $2 in 2012. The United States regained its position as the world’s largest producer, with reserves that could last up to 100 years. But how will the industry fare going forward? Here’s a look at some of the key regulatory and legislative decisions looming in 2013, as well as the government entities that will make them. policy at the U.S. Department of Energy, told American Gas. “It will continue to think it’s a fuel that provides a lot of benefits, especially for energy security and as an affordable supply to manufacturing that can bring jobs back home.” But some presidential advisors will argue that increased reliance on natural gas commits the nation to fossil fuels in place of renewables. “This will become a battle royal,” argues Charles Ebinger, director of the Energy Security Initiative at the Brookings Institution. “Who wins will depend in part on who’s in charge at EPA and DOE.” In the absence of a new energy bill from Congress, however, the administration will continue to drive energy policy. Look for the administration to defend air regulations such as the Cross-State Air Pollution Rule, finalize greenhouse-gas emissions rules for power plants, and possibly issue new rules on methane emissions from oil and gas production. The White House Congress Opinions still differ on how strongly the Obama administration supports the industry. Despite early rhetoric about renewable energy, “the administration came in four years ago with strong support for natural gas production,” Susan Tierney, managing principal for the Analysis Group and former assistant secretary for The Senate will likely hold hearings on clean-energy standards, LNG exports, and industry subsidies in the context of tax reform. The House will continue its strong pro-coal stance, though it may increasingly support energy efficiency. But the expert consensus is that there will be no bills on any of these issues, and certainly no comprehensive energy legislation. The administration and Congress are also unlikely to take significant action on climate change. “The administration will pursue this only if it can be made part of a larger budgetary deal,” Ebinger says. A remote possibility is a small carbon tax in exchange for cuts in corporate income tax rates. In general, though, as more states become involved in gas production, the Senate should lean pro-development. It’s possible that a bill combining pro-development and pro-conservation provisions could emerge in the Senate by the end of 2014, says Jeffrey Turner, a partner at law firm Patton Boggs, whose practice focuses on energy. EPA The government entity that will have the greatest impact on the industry in 2013 is EPA. Two key areas of focus are EPA’s annual inventory of methane emissions and new standards for power plants. Methane emissions: In 2011 and 2012, EPA essentially doubled its estimates of methane emissions from natural gas production. AGA identified several problems with EPA’s methodologies, notes Pam Lacey, senior environmental lawyer for AGA. The most egregious pertains to “liquid unloading” processes used to remove water from older wells. Emissions from hydraulically fractured well completions illustration by randy lyhus february 2013 American Gas 23

Table of Contents for the Digital Edition of American Gas - February 2013

American Gas - February 2013
Table of Contents
President’s Message
Subject Index
Supplanting Coal, Creating Jobs
Digest
Issues
Updates
Need to Know
By the Numbers
People and Places
Fill ‘er Up—in the Driveway
Europe
State House
City Hall
Wall Street
Elm Street
On the Docket
Profile: Philip B. Jones
Law
Jobs
Buyer’s Guide: Meters
Marketplace
Headway

American Gas - February 2013