Election Results’ Impact on Energy Policy

           US - Energy News

The country voted on November 4th in national congressional elections and on several local energy related referendums. The results could have a significant “go forward” impact on national energy policy. While politics is unpredictable, we will try and assess what some of the possible impacts to energy policy will be.

One ironic local referendum was an affirmative vote in Denton, Texas to ban hydraulic fracturing given the state of Texas’ reputation in the energy business. It should be noted that the day following the vote two lawsuits were filed against the ban ensuring that uncertainty around the issue will continue. Joining Denton in their opposition to fracturing were San Benito and Mendocino counties in California. However, in Ohio where fracturing has become a real contributor to the economy, proposed bans in several counties and towns were rejected while the college town of Athens, Ohio did in fact pass a fracturing ban. The results show some voter hesitance about the issue but it appears economic benefits will dictate that fracturing will continue in the short to intermediate term.

There are several national energy issues that will be influenced by Republican control of the Senate and House and we will focus on three of them. There will clearly be a heavy push back on all Environmental Protection Agency (EPA) proposals of which there are many. The one EPA action that may have the largest influence on long-term pricing is the June 2014 proposal to cut carbon emissions to 30% of 2005 levels by 2030. The final wording (due in June 2015) of the action if enacted can be expected to now be watered down. Also under threat are renewable energy subsidies that have not yet been extended for 2014 and beyond. The Solar energy industry is looking to allow projects under construction as opposed to operational by 2016 to qualify for the 30% investment credit. The wind energy production tax credit still needs to be extended for tax year 2014 and while it is expected this will happen, a failure to do so could have a surprise upward impact on the cost of both power and voluntary renewable energy credits (VRECs).

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