Chances for any sort of significant “energy policy” action from the current Congress went down the proverbial tubes last week with the death of the only energy-related vehicle Senate Majority Leader Harry Reid was at least temporarily willing to allow to come to a vote in that paralyzed body. The vehicle was nominally an “energy efficiency” bill, but members of both parties were anxious to try to add amendments on other key energy-related issues to it.
One such amendment was a bipartisan provision, sponsored by Louisiana Democratic Sen. Mary Landrieu and North Dakota Republican Sen. John Hoeven, that would force President Obama to do what should have legally been done at least three years ago, and approve the construction of the northern leg of the Keystone XL pipeline. The sponsors were unable to put together a filibuster-busting 60 vote majority for this bill, leading them to attempt to amend it to the energy efficiency bill. Sen. Reid insisted on a "clean" energy efficiency bill, the quickest, cleanest way to kill any piece of legislation in the Senate, and the bill died of its own weight when its "clean" version also failed to reach the magic 60 vote super majority number.
This episode should remind everyone inside the oil and gas industry and outside of it that reliance on congress to enact rational energy policy is a bit of a fool’s errand. Today's rigid polarization between the two parties has made it virtually impossible for any bill to break the filibuster threshold, rendering the Senate unable to act.
But even back in the days when the parties were not nearly so ideologically rigid, and it was possible to build bipartisan support for energy-related legislation, congress was hardly the place to go for rational policy choices. We have to remember that mindless “energy policy” actions such as the Windfall Profit Tax Act, the Fuel Use Act and the Natural Gas Policy Act in the 1970s had strong bipartisan support in congress.
So the inability to behave rationally where energy policy is concerned is certainly nothing new, and this latest failure by the current congress just proves what we all should have already known: the main thing any congress - and the federal government in general - is most capable of doing related to energy policy is messing things up. Anyone waiting for the senate to act timely on pressing energy-related issues or to correct the pathologies of the current presidential administration is destined to be disappointed.
If you want to really get anything done in a constructive, productive way where energy policy is concerned, the place to do it is in the states, not Washington. The states are where the issue surrounding well-by-well disclosure of hydraulic fracturing fluid content has been addressed over the last 3 years. The states are where constructive, fit-for-purpose regulation of hydraulic fracturing and well construction has been developed. The states are where policies surrounding water conservation, recycling, re-use and disposal have been and will continue to be implemented.
The oil and gas industry cannot rely on congress or the Obama Administration to efficiently address the growing mis-match between the grade and quality of domestic oil production and the capacity for oil refiners to handle it all by loosening current archaic restrictions on crude oil exports. But the industry can work with state governments to find innovative alternatives to keep the critical economic engine of the oil and gas industry moving forward while the Administration slowly analyzes the situation and congress awaits the November elections to see if the results might somehow relieve its chronic paralysis.
The industry cannot trust the Obama Administration to act as the law clearly requires and approve Keystone XL, but it can work with the states to develop alternative means of getting the Canadian Oil Sands production to U.S. refineries, and is in fact already doing so. Whether by train, by other pipelines that the Administration has no control over, or by trucks, the Canadian oil continues to make its way to market, proving the futility of the mindless, ideologically-motivated crusade of the anti-Keystone protesters.
Even with all the activity that is taking place in the states, some hold out hope that congress might still be able to get its collective act together and move some significant legislation to the President’s desk before the end of the year. Senator Hoeven appears to be one of them, as detailed by the Houston Chronicle:
“There are some other really pressing energy issues that there is strong bipartisan support for, so there may be a possibility to bring something back,” Hoeven said at a recent energy policy forum. “There's a lot of support for LNG exports on both sides of the aisle. The efficiency bill has strong bipartisan support. Obviously Keystone has strong bipartisan support.”
The question, Hoeven said, is “how do we pull some of these things together so you get enough people on board so that everybody says, 'OK, look, this is a big step forward, goal-oriented legislating that helps us with this great energy opportunity?'”
Of course, that skirts around the real issue, which is how do supporters of rational energy policy convince Sen. Reid that allowing an energy policy bill – any energy policy bill – to come to a vote is in his own partisan best political interests? One would be at great pains to point to a reason to hope that happy day might come about anytime soon.
In the meantime, what has been true for at least half a century remains true today: If one wants to get anything meaningful and rational done in the realm of energy policy, the states are where the action really is.
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