Politics: What to Expect from the Republicans on Energy Policy

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Brooks Kraft Corbis for TIME

At noon today, Republican John Boehner will be sworn in as the 61st Speaker of the House of Representatives, and the GOP will take over partial control of the government. (Apparently the outgoing Speaker, Nancy Pelosi, actually hands over the gavel to the new leader, a ceremony that certainly has more gravitas than the Internet method for shifting leadership—changing your Twitter handle.) Though the heated news coverage might make it seem as if the well-tanned Boehner is about to assume dictatorial control over the government—with perhaps Sarah Palin getting veto power—the Democrats still control the White House and the Senate, even with a smaller majority, which means the Republican power to push through wholesale change won’t be limitless. We should discover that after the House votes for and passes a repeal of the health care reform law in one of its first actions, as expected, only to see it die in the Senate by Majority Leader Harry Reid’s hands, who proved in the last term that he is perfectly capable of ignoring House bills passed by his own party, let alone the opposition.

But the Republicans in the House will be able to shape the country’s legislative agenda, and when it comes to energy at least, that agenda can be summed up in one word: deregulation. The GOP line is that renewed regulation under the Obama Administration—often with a green motivation, under the newly energetic Environmental Protection Agency (EPA)—handcuffed business and kept companies from hiring, contributing to the miserable unemployment rate. The Republicans in the House will focus on pushing back agencies like the EPA, which is already coming under fire for its proposed regulations on greenhouse gas emissions. According to the Associated Press, California Republican Darrell Issa—the incoming chairman of the powerful House Oversight and Government Reform Committee even sent out a letter last month to 150 companies, trade associations and think tanks asking them to identify regulations that needed to be changed:

“In fiscal year 2010, federal agencies promulgated 43 major new regulations,” the California congressman wrote. “As a trade organization comprised of members that must comply with the regulatory state, I ask for your assistance in identifying existing and proposed regulations that have negatively impacted job growth in your members’ industry.”

The energy industry—chiefly meaning the oil and gas industry—already has its wish list ready. Yesterday Jack Gerard, the president of the influential American Petroleum Institute (API), gave a speech yesterday at the National Press Club Newseum laying out industry’s agenda for 2011, and like the Republicans’, it can be summed up in one word: deregulation.

A policy environment that creates opportunity and certainty for all energy sources will help drive us to recovery. Anything else will idle it.

So the way I see it, our policymakers are at a crossroads.

They face two choices: One leads us forward and promotes jobs, investments, revenue and growth… or one that takes us backward, threatening the progress we’ve made and closing the door on future opportunities.

Gerard called on the government to increase access to oil and natural gas deposits onshore and off. That means lowering the barriers of regulation to potentially vast deposits of natural gas in the Marcellus Shale in the Northeast—even though there are still unanswered questions over the environmental impact of the hydrofracking processed needed to access that gas. That means smoothing access to offshore oil and gas deposits in Arctic Alaska—even though both environmentalists and native Alaskans are worried about the havoc a spill could cause in that unforgiving climate. And that means holding off on any tax increases on the oil and gas industry—although what Administration has proposed doing isn’t so much an actual tax increase as it is reducing the industry’s valuable subsidies and tax loopholes.

Gerard’s speech was accompanied by the release of a report by the API called “The State of American Energy” (download a PDF here), along with a study from the consulting group Wood Mackenzie making the case that increased access to offshore and onshore areas still closed to development—like the Pacific and Atlantic outer continental shelfs—could lead to billions of dollars of increased government revenue and hundreds of thousands of new jobs over the next few decades. “Closing the eastern Gulf and the Atlantic and Pacific coasts to offshore drilling and exploration—and delaying development in Alaska—sends job creation elsewhere … and it closes the door on economic growth,” Gerard said.

Republican Fred Upton, the new chairman of the House Energy and Commerce Committee, was in the front row of the audience for Gerard’s speech (as the lobbyist pointed out), and there’s little doubt that the GOP would like to see the API’s dreams become reality. But oil and gas regulation and natural resource policy is still largely in the White House’s control, and while the Obama Administration has sent some signals recently that indicate it be open to loosening development policy—allowing some deepwater projects in the Gulf of Mexico that had been halted to go forward again—we’re not likely to see the kind of wholesale changes the API and the GOP are calling for. Still, with gas prices on the rise again, the Republicans and industry will be able to put more political pressure on the White House and Democrats to bend on drilling. That strategy may not pay off until the 2012 elections, but that may be all the GOP really wants—at least for now.