A Seismic Shift in Washington?

American Association of Petroleum Geologists (AAPG)

Although most political pundits predicted that Republicans would likely take the Senate, the election results exceeded expectations. In the Senate, Republicans gained at least seven seats (this number could be as high as nine pending the result of an election in Alaska and a December runoff in Louisiana) which gives the Republicans at least 52 seats in the 114th Congress.

In the House, Republicans increased their majority to at least 243 seats, the largest majority they have had since 1929. Only three incumbent Republicans lost their seats. The unresolved results of another several races in Arizona and California could increase this margin for Republicans.

Most agree that the reason for this Republican wave was general dissatisfaction with both President Obama and gridlock in Washington. Although many of the Senate Democratic incumbents that lost viewed themselves as moderates and tried to distance themselves from President Obama and his agenda, the lack of legislative activity over the past two years did not allow them to build a legislative record to demonstrate their differences with the President’s policies.

Now that the election is over, all eyes are on Senator Mitch McConnell (R-KY), who will be the next Majority Leader. In his election night speech, he expressed his desire to break away from the way Harry Reid is currently running the Senate, where he seldom allows Republicans to offer amendments to legislation on the Senate floor, and has vowed to move the Senate back to “regular order”, which would include allowing legislation to go through the Committee process, passing budget and appropriations bills, and allowing Senators to offer amendments to legislation.

With majorities in both the House and Senate and a Presidential election looming in 2016, along with a Senate playing field much less favorable to Republicans, Congress has a large incentive to show that it can govern. A few weeks prior to the election, House Majority Leader Kevin McCarthy (R-CA), said that he believes Republicans need to demonstrate they can create some legislative achievements, or they will lose badly in the next election. However, this could be easier said than done. Over the past couple of years, Speaker John Boehner (R-OH) has had trouble keeping the Tea Party faction of his party in line and a larger caucus means that it may be even harder to keep people on the same page.

In the Senate, Senator McConnell will, in most instances, need to find 60 votes to pass bills but because many of the moderate Democrats were defeated in this election, it will be more difficult for Republicans to find the bipartisan support they will need to move things forward. Look for Senator Joe Manchin (D-WV) to be a key player in this area, especially with respect to energy and environmental legislation. Another possible roadblock could be Senators Ted Cruz (R-TX) and Rand Paul (R-KY), both of which have Presidential aspirations for 2016. They may put pressure on Republicans to significantly increase oversight of Executive branch activities, defund Obamacare, and create impasses on “must pass” budget and appropriations legislation that could lead to more federal government shutdowns.

The other major factor in what Congress can accomplish will be its relationship with President Obama. Prior to this election the President had demonstrated a reluctance to engage with Congress, which has been a major reason for the gridlock over the past two years. Although the President has made it clear that he will continue to attempt to move forward on his policy agenda, which is likely to continue to create conflicts with Congress, there are also areas where he may be able to find common ground. Topics could include energy (Keystone XL), immigration, trade authority, and tax reform.

Potential Energy and Environmental Agenda for 2014

In the 114th Congress, Senator Lisa Murkowski (R-AK) is expected to take the helm of the Senate Energy and Natural Resources Committee. She is very well prepared for this role - Murkowski has released an array of energy policy papers through her role as Ranking Member of the Committee, teeing up several issues for debate next year. Some of these topics include: expediting exports of liquefied natural gas (LNG), approval of Keystone XL and development of other pipeline infrastructure, and lifting the ban on crude oil exports (a pet issue for Murkowski). If Mary Landrieu (D-LA) manages to survive her December runoff, she would be a great partner for Murkowski in moving this agenda forward, but it is unclear how receptive Maria Cantwell (D-WA), who is next in line for the Ranking Member spot, would be to some of these agenda items since she is more focused on clean energy.

Senator Jim Inhofe (R-OK) is expected to take the helm of the Environment and Public Works Committee. He is known for his position as a climate change skeptic and can be expected to examine the Environmental Protection Agency’s rule makings on greenhouse gas emissions impacting the electric power sector as well as other topics such as proposed changes to the ozone standard, increased jurisdiction over waters regulated under the Clean Water Act, and regulation of methane emissions for the oil and gas sector. Republicans are expected to use the budget and appropriations processes as well as consider passing Resolutions of Disapproval to check President Obama’s executive authority in these areas and others where they believe that the President has overstepped his authority. The Resolution of Disapproval mechanism was created by the Congressional Review Act of 1996. It allows Congress 60 days of legislative session to overturn final rules issued by federal agencies after a rule has been submitted to Congress or published in the Federal Register. Because the President has the power to veto a Resolution of Disapproval, it has been rarely used in practice.

On the House side, the only major change on the energy policy front will be a new Chairman for the House Natural Resources Committee due to the retirement of Doc Hastings (R-WA). Although Rob Bishop (R-UT) seems to be the frontrunner for this role, other names that have floated around include Don Young (R-AK), Louis Goehmert (R-TX), Doug Lamborn (R-CO) and Cynthia Lummis (R-WY). Look for the House to continue to pass legislation that includes “all of the above” energy policies and work in coordination with the Senate leadership.

Lame Duck Session

Congress will be back on November 12 for a short Lame Duck session of Congress. Although the main focus of the Lame Duck will be the passage of an Omnibus Appropriations bill, which is expected to fund the government until September, 2015 (a short-term Continued Resolution is also possible, but not preferred). Other items that are likely to be addressed include expired tax extenders, Presidential and judicial nominations (potentially including a new Attorney General), and funding to address Ebola and ISIS related issues. The House and Senate will also hold leadership elections.

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