LEGISLATIVE UPDATE WHAT S AT STAKE IN 2016? AGA Risk Management Committee July 25, 2016 Josh Zive, Partner Policy Resolution Group at Bracewell, LLP
The 114 th Congress Control of the 114 th House (2014-2016) Control of the 114 th Senate (2014-2016) 187 247 44 54 AK Total Seats Democrats: 187 Republicans: 247 Vacancies: 1 Total Seats Democrats: 44 Republicans: 54 Independents: 2 2
Republicans Currently Hold the Five Senate Seats Most Likely to Flip in 2016 Hotline s 2016 Senate Rankings Seat Held by Republican Seat Held by Democrat 1. Illinois: Sen. Mark Kirk (R) is trailing in polls in a blue state, and is lacking in support from outside spending groups. Kirk has publicly disavowed Trump in a TV ad, seeking to distance himself from his party. NV AZ MO WI IL OH PA NC NH 2. Wisconsin: Former senator Russ Feingold (D) is running an aggressive campaign against Ron Johnson (R), but Johnson has ample support from outside spending groups. 3. New Hampshire: New Hampshire voted Democratic by 6 and 9 points in the last two presidential elections, so Kelly Ayotte (R) is likely to need a significant number of voters supporting both her and Hillary Clinton to win, which won t be easy against the state s current governor Maggie Hassan (D). 6. Nevada: Open (D) 7. Florida: Marco Rubio (R) 8. North Carolina: Richard Burr (R) 9. Missouri: Roy Blunt (R) 10. Arizona: John McCain (R) FL 4. Pennsylvania: National Democrats spent $5 million to get their chosen candidate, 2014 gubernatorial candidate Katie McGinty (D), through a messy nominating fight. Pat Toomey (R) has a lot of money to spend in his effort to brand himself as independent from his party. 5. Ohio: Rob Portman (R) sits on slightly safer ground than some colleagues, thanks to an incredible fundraising year and a proactive reelection campaign, but he still faces a former governor with near universal name recognition, Ted Strickland (D). 3
Which Senate Seats Are Most Likely to Flip? HOTLINE S 2016 SENATE RANKINGS State Incumbent Challenger Polling 1. Illinois Not enough polling Mark Kirk (R) Tammy Duckworth (D) 2. Wisconsin Ron Johnson (R) Russ Feingold (D) 3. New Hampshire Kelly Ayotte (R) Maggie Hassan (D) 4. Pennsylvania Pat Toomey (R) Katie McGinty (D) 5. Ohio Rob Portman (R) Ted Strickland (D) 4
3 of 5 GOP Senators May Have to Step Down From Leadership Positions Senate Majority Leadership Safe from term limits 1. Mitch McConnell (KY ) Majority Leader Potentially will have to step down (each assumed post in 2012) 3. John Thune (SD) GOP Conference Chair 4. John Barrasso (WY) Policy Committee Chair 2. John Cornyn (TX) Majority Whip Mike Lee (UT) seems poised to run for Barrasso s spot 5. Roy Blunt (MO) Conference Vice Chair GOP Senators Disagree Over Committee Rules: Some GOP legislators believe that Thune, Barrasso and Blunt will reach their term limits in 2016 at the end of the 114 th congress, while others say they will not reach their term limits until 2018. The GOP Senate Conference rules state that, apart from the Floor Leader, members of the leadership may not serve more than three congressional terms; Thune, Barrasso and Blunt all assumed their positions midway through the 112 th congress after Lamar Alexander (R-TN) resigned. If the three Senators are term-limited, Barasso and Blunt will likely compete with each other for Thune s position. Thune could either challenge Cornyn or McConnell or accept the demotion. 5
As Few as 36 House Races Could Be Close in 2016 Competitive* 2016 House Races, by Region Lean Democratic Toss Up Lean Republican Democrats chance of taking the House are slim-to-none AZ-02 CA-10 CA-21 CA-25 CO-03 UT-04 West CA-07 NV-04 AZ-01 CO-06 NV-03 AK WA OR NV CA HI ID AZ UT MT WY CO NM Midwest ND SD NE KS TX OK MN IA MO AR LA MN-08 NE-02 IA-01 WI IL MS IL-10 IA-03 MN-02 WI-08 IN TN AL MI KY OH GA MI-01 MI-07 MN-03 WV SC FL VA NC DC PA NY MD VT DE ME NH MA RI CT NJ Northeast NJ-05 NY-01 NY-23 ME-02 NH-01 NY-03 NY-19 NY-22 NY-24 PA-08 Southeast FL-18 FL-26 TX-23 FL-07 VA-10 *Competitive in this presentation refers to toss up and lean races 1 6
Issues Going Forward: Keep it in the Ground Movement In March 2015, the Keep it in the Ground movement was launched in opposition to the Keystone XL pipeline. The campaign s mission is to foster a complete transition to renewable energy by placing public pressure on politicians and investors. Keep it in the Ground will increasingly utilize a fairly diverse strategy which relies on political advocacy, pressuring fossil fuel investors, media outreach, and organizing protests. Litigation will likely also contribute to the campaign s strategy in the future. Activism at the state and regional level has been primarily grassroots in nature. It has included the purchasing of oil and gas leases for the purpose of nondevelopment and protests that directly challenge lease sales. 7
Issues Going Forward: Clean Power Plan Oral arguments in the challenge to EPA's Clean Power Plan will occur before the full D.C. Circuit Court of Appeals. Oral argument before the assigned three-judge panel was expected to begin on June 2, 2016. Now it will not begin until September 27, effectively extending the stay almost four months and almost certainly placing the decision almost certainly after the November elections. If we have a Republican president on Jan. 21, 2017, the new administrator of EPA would revoke the Clean Power Plan, if it hasn't already been invalidated by the courts. There are some regulations that are very difficult for a new administration to revoke or even modify, for legal or scientific or practical reasons, but the Clean Power Plan is not one of those regulations. A new EPA administrator would have to go through some procedural hurdles, and explain his or her rationale for revoking the rule but in the end this would be quite easy to do. Much of the rationale the next administration uses to upend the plan would depend to some extent on where things stand in the litigation over the rule, but again, it would be quite easy for the next administration to simply undo the CPP entirely. 8
Issues Going Forward: Carbon Tax Congress is likely to continue to remain in lockstep opposition to a carbon tax. On June 10, the House passed a resolution introduced by Majority Whip Steve Scalise (R-LA) on a 237-163 vote that expressed a Sense of Congress that a carbon tax would be detrimental to the American economy. Donald Trump rejected the idea of a carbon tax. "I will not support or endorse a carbon tax!" Trump tweeted. A carbon tax was also excluded from the Democrats draft platform. Secretary Clinton has also not explicitly supported a carbon tax despite defending the necessity of action on climate change. A grand bargain that entails an elimination of carbon rules for power plants in favor of a carbon tax may be possible and less punishing for industry Momentum (e.g., Paris and Exxon Mobil) Exxon: The revenue-neutral carbon tax could be a workable policy framework for countries around the world. 9
General Election: Trump vs. Clinton Most polls show Clinton beating Trump by a substantial margin, but numerous issues could swing the election towards Trump. They include: lackluster economic performance; divisions among the Democrats; political moderation by Trump; and the historic difficulty of the same party winning for a third-straight term, among others. 10
Clinton s Stance on Natural Gas Moderately pro-gas --- She has argued for the climate change-related benefits of gas vis a vis coal. She has vowed to defend the Clean Power Plan in pursuit of these benefits and others. Accelerate the deployment of CCS --- She has defended the deployment of carbon capture and sequestration as well as future alternatives to gas. Control methane emissions --- She intends to fully implement President Obama s methane rules and to increase the stringency of regulations applied to gas pipelines. Adequate regulation --- She intends to eliminate the so-called O/G loophole in the Safe Drinking Water Act, while ensuring corporate chemical disclosure. 11
Democratic Party s Stance on Natural Gas Secretary Clinton s stance has been echoed strongly by the Democratic National Committee s 187-member Platform Committee. The Committee approved a compromise natural gas measure that does not include an outright ban on fracking even though many argued passionately for instituting a complete prohibition. The compromise echoed arguments offered last month by former U.S. EPA Administrator Carol Browner when she argued against a ban on drilling and instead supported regulatory measures such as closing the "Halliburton loophole. The amendment expressed that Democrats would ensure "tough safeguards" to govern the drilling practice, including safe drinking water provisions, as well as vows to reduce methane emissions tied to fracking and to replace "thousands of miles of leaky pipes." 12
Republican Party s Stance on Natural Gas Supports opening the Outer Continental Shelf (OCS) for energy exploration and development and ending the current Administration s moratorium on permitting; opening the coastal plain of the Arctic National Wildlife Refuge (ANWR) for exploration and production of oil and natural gas; and allowing for more oil and natural gas exploration on federally owned and controlled land. Supports approving the Keystone XL Pipeline and to streamlining permitting for the development of other oil and natural gas pipelines. 13
Trump s Stance on Natural Gas Vocal Supporter of Fracking --- In 2012, he tweeted: Fracking will lead to American energy independence. With price[s] of natural gas continuing to drop, we can be at a tremendous advantage. He previously pledged to convince New York Governor Andrew Cuomo to allow fracking statewide. A few months later, New York banned fracking outright. Natural gas as a bridge fuel--- Trump wrote in his book, Time to Get Tough, that the Marcellus Shale was "one of the largest mother lodes of natural gas" and should be used to buy "more time to innovate and develop newer, more efficient, cleaner, and cheaper forms of energy. In his energy speech to the 2016 Williston Basin Petroleum Conference Trump vowed to: Declare American energy dominance as a strategic and foreign policy goal of the U.S. Use revenues from increased energy production to rebuild roads and public infrastructure Pursue an all of the above energy policy that includes nuclear, wind and solar, but not to the exclusion of other forms of energy that, according to Trump, are working much better Lift the moratorium on oil and gas production on federal lands and lift restrictions on new drilling technologies 14