Can the Nat Gas Act be a Political Panacea for rising crude oil prices?

Rising gasoline prices, often sparked by instability abroad, typically cause the issues of energy security and oil dependence to gain more attention among lawmakers. While our nation has long lacked a national energy policy, rising gasoline prices can sometimes result in Congressional action. Thus, today's rising gasoline prices would seem to make this current moment ripe for bipartisan action. Yet, a wide chasm exists between most Congressional Republicans and the Obama Administration on energy policy. Republicans are advocating for ratcheting up domestic production through authorizing more onshore and offshore exploration and production. These proposals include rehashing politically-charged proposals such as authorizing drilling in the Arctic National Wildlife Refuge and in the outer continental shelf. Some Democrats are urging that the Obama Administration release crude oil from the Strategic Petroleum Reserve. For its part, the Obama Administration is attempting to forge a middle path by approving more permits for offshore development in the Gulf of Mexico, while also arguing for increased investments in clean energy technologies. Given these differences between Republicans and Democrats, comprehensive energy legislation likely faces a very difficult path to passage. If gasoline prices continue to rise, pressure will, however, mount on the Republican-led House and the Obama Administration to pass some type of legislation. Currently most of the attention politically is focused on the effect rising gasoline prices are having on President Obama's approval ratings and how it might affect his reelection prospects in 2012. Republicans, though, also face political peril if they fail to act as the Obama Administration and Democrats are attempting to tie Republicans to major oil companies. Specifically, Republicans could face increased public backlash for their support for tax incentives for oil and gas development, particularly when many of the majors are expected to announce strong quarterly profits over the next several weeks. Given this political context, the Nat Gas Act could gain serious consideration as Democrats and Republicans attempt to find consensus on energy policy. This bipartisan legislation – introduced several weeks ago by Representative John Sullivan (R-OK), Representative Dan Boren (D-OK), Representative Kevin Brady (R-TX) and Representative John Larson (D-CT) — would provide tax incentives for the production of natural gas vehicles and for the installation of natural gas fuel pumps, among other provisions. Two of the bill's most vocal proponents include T. Boone Pickens and President Obama, who has touted it in several recent speeches on energy policy. The bill already has 178 cosponsors that are as diverse as members of the Republican Study Committee and Representative Diana DeGette (D-CO), who has advocated for enhanced federal oversight over hydraulic fracturing. Senator Robert Menendez (D-NJ) and Senator Orrin Hatch (R-UT) are reportedly working on introducing a companion bill. Despite the rosy forecasts for the bill's prospects some significant hurdles still remain. The bipartisan political support for the bill also existed in the previous Congress, yet disputes over how to offset the incentives resulted in the bill stalling. The current legislation does not provide for any offsets and reaching a compromise on either spending cuts or revenue raisers will be difficult. Another issue will be whether critics of hydraulic fracturing might attempt to use this bill as an opportunity to add provisions to increase the federal government's authority over the practice. Moreover, major accidents or incidents connected to new shale gas development could temper Democratic and Administration support for this legislation. Nonetheless, the existing political climate does seem to suggest that that Nat Gas Act could be that political panacea that could allow both Republicans and Democrats to claim to voters that they are addressing rising gasoline prices.

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