Proposals for an environmental and economic “Green New Deal” began generating headlines and press coverage as soon as the Democratic Party secured control of the U.S. House of Representatives.
Some commentators across the aisle even painted it as a looming disaster for the U.S. oil and gas industry.
Which is awfully impressive, for a plan that doesn’t even exist yet.
“It’s still just a list of principles. There’s no legislative language to analyze,” said Kenny Stein. “To me, it’s more of a signaling exercise rather than a set of policy proposals.”
Stein is director of policy for the Institute for Energy Research in Washington, D.C., a nonprofit research organization that studies the operation and regulation of global energy markets, mostly from a free-market perspective.
While talk about a Green New Deal might signal some Democrats’ interest in environmental and climate-change issues, specific proposals so far have been short on viability, Stein said.
He cited a proposed plan to eliminate fossil fuels from the U.S. transportation and power sectors in the next 10 to 20 years.
“That’s technologically impossible at this point. We’d have to invent a number of new technologies to even consider doing that,” Stein said.
So far, proponents of a Green New Deal have focused on winning support for the concept of a broad U.S. economic stimulus plan that would address climate-change issues until specific policy proposals can be developed.
But, to date, legislative details have been lacking. Data for Progress, which describes itself as “the think tank for the future of progressivism,” lists several possible Green New Deal options and goals on its website, beginning with job creation.
“The goal is to create 10 million new jobs over the first 10 years through employment and training programs associated with Green New Deal grants and projects,” it states.
Other proposed goals include:
- 100-percent clean and renewable electricity by 2035
- 100-percent net-zero building energy standards by 2030
- 100-percent zero-emission passenger vehicles by 2030
- 100-percent fossil-free transportation by 2050
- Zero net emissions from energy by 2050
- Cut methane leakage 50 percent by 2025
Redundant Efforts
Cutting methane emissions is one of the few proposed goals that specifically mention the oil and gas industry.
“Methane, a greenhouse gas 28-36 times more potent than carbon dioxide, is the second-largest industrial source of climate pollution from the oil and gas industry. Methane leaks from oil and gas production and distribution cost the U.S. economy approximately $2 billion annually,’’ Data for Progress states.
Stein said the industry is already trying to minimize leaks of methane from natural gas, because that’s a product it sells. In some cases, operators are flaring gas until pipelines to markets can be completed, he noted.
“You don’t need to mandate methane capture because the industry already has an incentive to do that,” he said.
Efficiency Mandates
In Congress, support for a Green New Deal has come mainly from the “progressive” wing of the Democratic Party, most notably from recently elected House member Alexandria Ocasio-Cortez of New York.
An estimated 40-45 House members have expressed favor for some form of Green New Deal plan – about 10 percent of the 435-member House. The website for the Sunrise Movement, which promotes green issues, lists 45 members of Congress who support creating a House Select Committee for a Green New Deal.
House Democrats have already established a new Select Committee on the Climate Crisis. But with the Republican Party still in control of the Senate and the White House, Stein foresees little national movement on climate legislation.
“At the federal level, I don’t see much of anything changing, honestly,” he said.
“The only change the House being under the Democrats gets is that there’s going to be a lot more investigations. There’s going to be a lot of sound and fury,” he added.
Environmental legislative proposals most likely to be approved by Congress are those involving efficiency standards, according to Stein.
“I think the ones you’ll see that will have bipartisan support are things like energy efficiency mandates – efficiency mandates for buildings or appliances, things like that. I think those have a higher possibility of happening,” he said.
State-level ‘Green’ Policies
For the near future, at least, Stein expects green energy to be more of an issue in state legislatures than in Congress.
“The state level is where it’s going to matter more for the oil and gas industry,” he predicted.
In Colorado, the state legislature is controlled by the Democratic Party, and Democrat Jared Polis, a former member of the U.S. House, was sworn in as the state’s governor in January.
“Colorado is going to be the place to watch. You’ve got a governor who in the past has not been all that harsh on the oil and gas industry, but during the campaign there were a lot of pledges made,” Stein noted.
“If they choose to be aggressive, they could do a lot of harm to the oil and gas industry,” he said.
California is involved in a court battle with the U.S. Environmental Protection Agency over the state’s ability to set its own emissions and vehicle efficiency standards, in variance with federal rules.
“That’s going to be a big question, if the courts side with the EPA. That will change a lot of what California wants to do with vehicles,” Stein observed.
But “that process is just beginning, so we are probably years away from any resolution,” he said.
The National Conference of State Legislatures has identified 37 states that have passed renewable energy portfolio standards or some form of renewable energy targets.
Typically, a renewable portfolio standard requires utilities to achieve a specified percentage level or amount of energy from renewable sources by a given date. Stein said he expects some states to increase their renewable energy goals.
“I think you’ll see a ratcheting up of those. Those have been the main target of state politicians who want to establish their green bona fides,” he said.
One national-level issue to watch is the position of the federal government and state governments on offshore leasing and drilling activity, Stein said.
“That’s a place where the normal partisan dividing lines don’t match up so neatly,” he noted.
Currently, evolving offshore issues involve the U.S. East Coast, offshore Alaska and federal waters offshore Florida.
“It’s the eastern Gulf of Mexico that’s actually going to be the biggest one, because there are known reserves there that are in the moratorium area,” he said.
Changes in the federal permitting process should be of special interest to the oil and gas industry, Stein said, especially when energy rules become more restrictive.
“That’s how bureaucrats and folks at the federal level who want to restrict oil and gas operate. It’s basically death by a thousand cuts,” he said, noting the prolonged permitting process for the Keystone XL pipeline extension. “It’s become a way for them to interfere with or limit development.”