A Brand New Day?

Todd Ruger

Corporate Counsel

02-01-2013

Congress could make big moves on energy policy this year, thanks to the boom in natural gas and oil production from shale deposits across the country. The rapid expansion of hydraulic fracturing and horizontal drilling might spark the nation's first comprehensive energy law in five years, attorneys at Washington law firms say. New provisions could give a boost to energy production, while also including some of President Barack Obama's green-energy goals.

Lawmakers on Capitol Hill now have a reason to review and reshape America's domestic energy production, as well as the country's role in the global energy market, says Joshua Greene, a former congressional staff member and entrepreneur who now focuses on energy and environment as a partner at Patton Boggs in Washington. "I'm optimistic, I think others are optimistic of energy policy getting done," Greene says. "I think people are coming to the realization that as it comes to not only our national energy security but our own economy, we have to do some pretty heavy lifting on energy policy."

Among the issues that could gain traction on Capitol Hill: creating federal standards related to the environmental effects of fracturing to replace the patchwork of state regulation, as well as provisions that would increase demand for natural gas such as opening up exports and encouraging use among passenger vehicles or purchases by the federal government.

Vast deposits of natural gas and shale oil are located in traditionally more liberal states—such as Colorado, Pennsylvania, and New York—meaning that more Democratic legislators will have common ground with traditionally pro-production Republicans. The presence of these resources in several states where energy is suddenly a big industry, such as North Dakota, increases the number of senators who could support a bill boosting energy production in their states.

"Over time . . . energy will be an important component in many more communities' visions of themselves," says David Bernhardt, a former solicitor of the U.S. Department of the Interior who is now a partner in Brownstein Hyatt Farber Schreck's Washington office. "You have a potential to have some conciliation on energy and some progress made."

Added to the mix, the Senate Commit­tee on Energy and Natural Resources will have a new chairman, likely to be Senator Ron Wyden (D-Oregon). He appears ready to aggressively push energy legislation and has a reputation for working well with the ranking minority member of the committee, Senator Lisa Murkowski (R-Alaska).

Wyden has already foretold plans to reshape the country's energy policy, which he says needs updating. He said in a statement in November that the Natural Gas Act needs reconsideration because the free trade agreements included in it were adopted "before newly accessible shale gas became a strategic asset for the U.S." He also has a history of supporting green-energy initiatives.

"For somebody like me," says Bernhardt, "what's really going to be exciting is that there could be some new big ideas up there that are being discussed." Pulling out old templates for an energy bill, and updating old statutes, may not be enough, he says, adding: "Change presents opportunities, and challenges, for clients."

A version of this story appeared in The National Law Journal, a sibling publication of Corporate Counsel.