Mid Term Elections
Rarely are US political events very important within the Energy Geopolitik, but this week’s mid-term elections have clear implications for several energy matters. With the Republican takeover of the US House of Representatives, several evolving trends are under attack
1) National ‘frac-regulation’ is probably dead. Unless groundwater or other damage increases meaningfully, the branch is unlikely to fund studies or consider new controls over the procedure. With the demotion of Congressmen/women Waxman and Pelosi to the back bench, headline risk is muted.
2) Likewise, no surprise, cap and trade is even dead-er than nit was when the House passed Waxman-Markey in 2009. That bill, which barely passed a heavily Democratic House by a single vote, is unlikely to see the light of day. In this economy, a carbon tax, which might be easier to implement, is also out of the question. My bet is that any greenhouse gas/climate change progress will focus on efficiency, conservation, and promoting demand for newly robust natural gas supplies. This could include transportation but will probably emphasize electric power. .
3) Environmental and renewable power interests are turning their attention to more regional opportunities, where specific opportunities (solar in the southwest, wind in the Midwest, and gas-solar/wind in some markets) face less resistance and can make the jobs argument more convincingly. While efforts to roll back California’s renewable portfolio program failed, the event highlighted the very regional nature of energy/power issues in the US, especially given the absence of momentum on a national level.