American Oil and Gas Reporter - December 2018 - 30

2018 Election

Voters Give Mixed Bag To Oil And Gas
By Bill Campbell
With Democrats winning a majority
in the U.S. House of Representatives in
November and Republicans strengthening
their majority in the Senate, the oil and
gas industry likely can anticipate less
progress on regulatory reform but little
in the way of negative legislation at the
federal level, political analysts indicate.
At the state level, meanwhile, voters in
Colorado, Arizona and Washington reaffirmed support for what the Independent
Petroleum Association of America terms
"reasonable energy development" by rejecting ballot initiatives to restrict drilling,
mandate wider use of renewables and place
a tax on carbon emissions, respectively.
But at the same time, Nevada voters
passed a constitutional amendment requiring
utilities to acquire 50 percent of their electricity from renewable sources by 2030,
and Florida voters approved a constitutional
prohibition against drilling in state waters.
Federal Election
With a handful of House races still
undecided in late November, the National
Ocean Industries Association reported
Democrats stood to gain 38-40 seats in
the lower chamber, where they were expected to emerge with a majority as wide
as 235-200.
And with incumbent Republican Senator Cindy Hyde-Smith's victory over
former Democratic U.S. Secretary of Agriculture Mike Espy in a Nov. 27 run-off in
Mississippi, NOIA says, Republicans finished with a two seat net gain in the U.S.
Senate, having picked up seats in Florida,
Missouri, Indiana and North Dakota against
losses in Nevada and Arizona.
Overall, in the words of political
analyst Charlie Cook, editor and publisher
of the Cook Political Report, and frequent
speaker at industry meetings, blue states
got bluer and red states got redder, which
likely translates to increased partisanship
and legislative stalemate.
Dan Naatz, IPAA's senior vice president
of government relations and political affairs, predicts the Republican Senate will
prioritize confirming President Trump's
political appointees. "We expect a Bureau
of Land Management director to be named
soon, as well as a director at the Fish &
Wildlife Service," he says.
The judiciary likely will receive lots of
attention as well, where one published
report points out that as of Election Day,
there were 111 vacancies at the U.S. district
30 THE AMERICAN OIL & GAS REPORTER

court level and 11 on U.S. courts of appeal.
Noting that since President Trump
took office, the Senate had confirmed 84
judges, including 29 appellate court judges
as well as Supreme Court Justices Neil
Gorsuch and Brett Kavanaugh, the report
observed, "Were he to fill all current vacancies on top of those (the Senate) has
confirmed already, nearly one out of four
judges in the federal judiciary will have
been appointed by Trump."
Democratic House
In the U.S. House, Naatz suggests, the
new Democratic majority has three options:
"It can try to legislate; it can investigate;
or it can try to impeach the president.
"I don't think Democrats are going to
have the energy to do all of them," he adds.
Naatz acknowledges "a significant
push" to try to impeach the president, especially among newly elected progressives
from the East and West Coasts. "If they
decide to pursue impeachment, that really
would take the air out of the room for a
lot of different activities," he opines.
At the same time, however, Naatz assesses, a number of Democrats who won
formerly Republican seats in suburban
districts "were elected to try to get something done, so they may try to legislate."
Two of the more likely areas of focus,
he calculates, are healthcare and infrastructure. "President Trump has been
willing to talk about infrastructure, and I
think even the Senate would be interested,"
Naatz reflects. "The question would be
the price tag because any kind of infrastructure bill would be very expensive."
But it also may be an area where the
oil and gas industry can push for positive
change. "If they do something on infrastructure, we certainly will try to make
sure pipelines are included," he promises.
Naatz adds that he is not overly concerned about two areas where the oil and
gas industry may be considered vulnerable
to the new Democratic majority: climate
and taxes.
Climate was a major campaign issue
for a number of Democrats, especially
younger and more progressive candidates,
and "there is no doubt climate will come
up," Naatz allows. But questions remain
regarding what form climate measures
will take and how seriously those initiatives
are pursued, he says.
Adam Higgins, a senior adviser in the
Washington office for national law firm
BakerHostetler, in an analysis posted a
week after the election states flatly,

"Sweeping climate change legislation
won't pass the Republican-controlled
Senate or be signed into law by Trump."
There even is disagreement among
Democrats, Naatz adds. He points to the
post-election disagreement over whether
the House Select Committee on Energy
Independence and Global Warming ought
to be reconstituted, which presumed
Speaker-elect Nancy Pelosi of California
was pushing at the behest of a number of
new members, but was being opposed by
more senior representatives such as Frank
Pallone of New Jersey, who was expected
to become chairman of the Energy and
Commerce Committee, and Raul Grijalva
of Arizona, who was expected to head
the Natural Resources Committee.
"Climate is going to be talked about
by the Democrats in the House, but
whether they make it a priority issue or
one among many is the struggle they are
having," Naatz concludes. "Ultimately, I
think it gets to the question of whether
they want to have climate front and center
as they head into the 2020 elections. I
don't know the answer to that."
Similar to major climate legislation,
Naatz says he sees no chance for a legislative roll-back of the 2017 Tax Cuts
and Jobs Act. "The Senate won't pass it
and the president certainly won't sign
it," he assures.
What Naatz does expect, he says, is a
lot of hearings by the House Ways and
Means Committee on whether corporations
have benefited at the expense of individual
taxpayers. "I think we will see a lot of
smoke, a lot of hearings, but little legislative action on taxes," he says.
Over My Shoulder
Ultimately, where IPAA expects the
greatest impact on oil and gas, Naatz says,
is oversight by House jurisdictional committees. "You are going to see (Interior
Secretary) Ryan Zinke called in; you are
going to see (Energy Secretary) Rick Perry
called in," he predicts. "They will call the
directors of the BLM and Bureau of Ocean
Energy Management, all trying to slow the
Trump administration's regulatory reforms."
Indeed, a Nov. 20 report in the Washington Examiner cites a letter from expected Energy Committee Chairman Pallone along with Representatives Diana
DeGette, D-Co., and Paul Tonko, D-N.Y.,
to Environmental Protection Agency acting-Director Andrew Wheeler, asking for
the agency's "rationale and analysis" for
revising the Clean Power Plan, lowering

American Oil and Gas Reporter - December 2018

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