“It is better to stop a bad law than pass a good one.” Calvin Coolidge.
Is anybody in Washington listening to Silent Cal?
What can the energy industry (oil and gas in particular) expect from the Administration in its second term? Let’s gaze into the crystal ball:
The National Center for Policy Analysis predicts a carbon tax. In what is really a position statement on the perils of such a tax, Sterling Burnett acknowledges that there are some benefits that are a preferable to cap and trade. A carbon tax is transparent and that it would be clear to everyone that it is money paid directly to the government, whereas a cap and trade scheme would not.
He concludes that a carbon tax is a bad idea because “there is never a good time for a bad tax.” (There is a position we can believe in) In the sense that a tax on something as important as energy which he called the “foundation of modern society” would affect everyone in virtually every activity they undertake. Further, he considers carbon taxes to be highly regressive and hence a disportionate burden on the poor.
The good news, if it can be believed, is that President Obama says he would never propose such a tax.
The Wall Street Journal reports that as the Department of Energy reviews the pros and cons of exporting US natural gas, large chemical companies who burn lots of natural gas oppose exporting energy. This would, of course, keep natural gas cheap. Oil and gas producers argue that exports are positive for the economy, good for the balance of trade, and have other benefits.
Chemical companies are building new plants in the US to capitalize on our cheap energy which in itself is a job creator. They say no one knows what demand may eventually be and exports may hinder economic growth in that way.
Daniel Yergin for one, believes that there are shale fields yet to be tapped and those concludes that exports would be a good thing. The Wall Street Journal says let the market decide.
The Natural Resources Defense Council thinks the Keystone XL pipeline is a bad idea, arguing that the pipeline would kill more jobs than it creates by reducing investment in “the clean energy economy” and that the pipeline would transport dirty, low high sulfur tar sands oil, which itself uses large amounts of energy and water to produce and clean up. In short, they believe we need to do everything we can to avoid importing tar sands oil to the United States (The link to the NRDC offers more reports and analysis from theri point of view if you are interested, just so you know).
Business Insider believes that the pipeline will be approved, with a few tweaks in the route to avoid environmentally sensitive areas.
The Role of Fossil Fuels in the Obama Energy Policy
From Platts: Jack Gerard, president of the American Petroleum Institute professes to be encouraged that about President Obama’s commitment to oil and gas development in campaign statements leading up to the election. Huh?
According to Inside Climate News, the congressional lineup has changed with the defeat of several congressmen characterized by this group as opposed to clean energy. This is an indicator of continued pressure to be placed on the president to favor alternative energy sources. (Notice how the Heritage Foundation is “Right Wing” while the environmental groups are not “left wing”).
According to Reuters the IPAA and others expect a rough four years, from potential elimination of the intangible drilling cost deduction to increased regulation of carbon dioxide emissions, which will affect coal and oil and gas producers. And they don’t mention potential regulations on fracking, which is on the agenda.
Looking to 2016
I conclude with an exclusive look at the early front-runner for the 2016 Republican nomination .
Regardless of your point of view, here is some wise musical advice.