• The Next Four Years in Energy and Environmental Policy
  • December 7, 2012
  • Law Firm: Faegre Baker Daniels - Minneapolis Office
  • It is very likely that President Obama's second term will feature energy and environmental policies that build on those of the last four years. Whether it is investments in clean energy technologies or regulatory efforts aimed at reducing greenhouse gas emissions and hazardous air pollutants, the president is expected to remain focused on reducing America's dependence on fossil-based sources of energy and, in their place, substantially increasing the amount of energy that we obtain from alternative and renewable sources.

    Key Pillars of a Second Term Energy Policy

    Some of the key areas of President Obama's second term energy and environmental policies will address climate change and carbon regulation, make further investments in alternative energy production and promote energy efficiency. Some examples are below:

    • Climate Change and Carbon Policy — The president could again try to limit carbon emissions through legislation, either by making another effort on cap and trade or by pursuing other policies, such as a carbon tax. The most likely policy in the short term, however, is continued regulation of carbon dioxide emissions through the Clean Air Act by the Environmental Protection Agency.
    • Incentives for Alternative Energy Production — Incentives for the deployment of alternative energy technologies and production were a key component of the president's first-term energy agenda. This is expected to continue although the budgetary and political environment will present the president with more challenges than in his first term. For example, look for the president to make a forceful push for an extension of the Wind Production Tax Credit as well as to advocate for an extension of the Advanced Manufacturing Tax Credit. In addition, the administration has continued its support for a Clean Energy Standard which would mandate the increasing use of renewable and "clean" technologies like natural gas and nuclear.
    • Efficiency Policy — The president has recently expressed an interest in focusing on energy efficiency from non-residential buildings in his second term. The president is specifically interested in increasing energy efficiency through retrofits at schools, hospitals and commercial buildings to reduce carbon emissions and potentially reduce these entities' electricity costs by up to 25 percent. In addition, a bipartisan congressional Energy Efficiency Caucus has now been established.

    Regulatory Agenda — The second Obama administration will also likely build upon its regulatory agenda of the first term via the Environmental Protection Agency. The most likely candidates for regulatory action are:

    • Implementation of pending new source performance standards for greenhouse gases at new coal and oil-fired power plants, as well as the promulgation of such standards for greenhouse gases at currently-existing plants and oil refineries.
    • Writing another rule to control the cross-state emissions of air pollutants from power plants and industrial facilities, as the administration's most recent rule — the Cross State Air Pollution Rule — was recently overturned by a federal appeals court.
    • Propose new standards for ground-level ozone (which were originally proposed during this presidential term but were set aside until 2013 or 2014).
    • Propose guidance for the usage of diesel fuels during hydraulic fracturing operations and, potentially, effluent limitation guidelines for shale gas extraction.

    It is very likely that the administration will address these and related issues due to judicial and statutory requirements, as well as pressure from environmental interests. For example, a legal settlement with environmental groups requires EPA to write new source performance standards for the current coal-burning fleet as well as refineries, and the Clean Air Act requires that EPA write a new rule to address both cross-state air emissions and update its National Ambient Air Quality Standards for Ozone.

    There have also been changes in Congress that will be of interest to those looking to influence energy and environmental policy in Washington, D.C. On the powerful House Committee on Energy and Commerce, Rep. Fred Upton (R- MI) will remain as chairman while Rep. Henry Waxman (D- CA) will stay on as ranking member. However, two key Energy and Commerce subcommittees will be under new leadership. The Subcommittee on Oversight will be led by Rep. Tim Murphy (R- PA) and Rep. Lee Terry (R- NE) will chair the Subcommittee on Commerce, Manufacturing and Trade. The Committee on Appropriations will see a big change, with Rep. Nita Lowey (D- NY) ascending to the position of ranking member. Rep. Hal Rogers (R- KY) will remain as chairman of that committee.

    The Committee on Transportation and Infrastructure is also undergoing a key change at the top, with Rep. Bill Schuster (R- PA) assuming the chairmanship of that committee while Rep. Nick Rahall (D- W. VA) will remain as the top Democrat. The Committee on Science, Space and Technology will also undergo a key personnel change with Rep. Lamar Smith (R- Texas) assuming the chairmanship of that committee. The Committee on Natural Resources' leadership will remain unchanged, with Rep. Doc Hastings (R- WA) continuing as chair and Rep. Ed. Markey (R- MA) staying on as ranking member.

    In the Senate, Senator Ron Wyden (D- OR) will become the new chairman of the Committee on Energy and Natural Resources, while Senator Lisa Murkowski (R- AK) will remain as ranking member. The Committee on Environment and Public Works will also experience a key change, with Senator David Vitter (R- LA) serving as the new ranking member, alongside Chairwoman Barbara Boxer (D- CA).

    While it is difficult to predict exactly what President Obama's energy and environmental policy will look like over the next four years, and how the new committee leaders in the House and Senate will influence that agenda and specific policy outcomes, it is safe to assume that a future Obama energy policy will be based on that of the last four. One should expect President Obama's second-term energy and environmental policies to remain focused on decreasing American reliance on fossil-based energy sources and increasing the amount of energy that is generated from renewable and alternative fuels. These will likely remain amongst the highest priorities of the Obama administration for the next four years.