June 03, 2013 Articles

The 2012 Election's Effect on the Energy Industry and Energy Litigation

Major new legislation is unlikely during President Obama's second term.

By James E. Smith – June 3, 2013

President Obama won reelection in 2012, garnering a smaller, but still decisive, percentage of the popular and Electoral College vote. The election also continued a Republican majority in the House of Representatives and a Democratic majority in the Senate.

The ongoing divided federal government means that new legislation will require significant bipartisan support to become law. Given the differing views between Republicans and Democrats on many energy and environmental issues, major new legislation is unlikely during President Obama’s second term.

In the regulatory area, the administration will continue to try to serve its many and often competing constituencies. A few of these include:

  • environmental and local activist groups, some of whom demand a complete ban on hydraulic fracturing, while others see the need to lower carbon dioxide emissions as the number-one environmental priority and thus are favorable to increased natural gas use (although they generally favor regulations from the Environmental Protection Agency (EPA) regarding greenhouse gas (GHG) emissions);
  • those whose number-one priority is domestic job growth, especially unions and others who want more domestic manufacturing jobs, and who see natural-gas availability as playing a key role in developing those jobs in the USA; and
  • those who see the foreign-policy advantages of increased domestic energy production, and the advantages of North America (United States, Mexico, and Canada) being essentially self-sufficient in energy.

Those environmentalists advocating an end to hydraulic fracturing appear unlikely to achieve this goal. For example, outgoing Department of Energy secretary Steven Chu made many positive comments about the increased natural gas development. Tudor Van Hampton, DOE’s Chu: Natural Gas is a “No-Brainer,” Engineering News Record (Mar. 12, 2012).

President Obama lauded natural gas in his 2012 State of the Union address and his administration has stated that he believes natural gas has a central role to play in our energy future.Jim Snyder, Ohio’s Gas-Fracking Boom Seen Aiding Obama in Swing State, Bloomberg (Sept. 4, 2012).

Given the positive economic, environmental and geo-political effects resulting from increased natural gas production, hydraulic fracturing will continue.

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