Effects of the Midterms on the Oil & Gas Industry

Effects of the Midterms on the Oil & Gas Industry

As the dust settled on election night 2018, we now begin to evaluate the consequences that the election’s results may carry with them. Specifically, how could the election and the changes it brings impact the oil and gas industry?

First, the good news: In Colorado, Proposition 112 was handedly defeated, failing 57 percent to 43 percent. Proposition 112 had been the subject of much debate since it was added to the state’s ballot earlier this year. The proposition stated that new wells could not be constructed within 2,500 feet of any structure intended for human occupancy, such as a home, school, hospital or office building. Currently, oil and gas wells may not lie within 500 feet of most structures and in some cases, 1,000 feet.

The proposition caused much concern within the state’s oil and gas industry and in the state’s political sphere. The current governor, as well as both the Republican and Democratic nominees for governor, all opposed the proposition. The Democratic nominee for Governor, Rep. Jared Polis, went on to win the nomination.

While Polis was a vocal opponent of Proposition 112, he has supported limitations on oil and gas drilling in the past, so it is possible that the fight in Colorado is not entirely over.

One state over in New Mexico, voters saw Democrat Rep. Michelle Lujan Grisham win the governorship over fellow Congressman Steve Pearce. Although Lujan Grisham has said she wants to work with industry, she promised during the campaign that she will undertake a methane mitigation policy as governor. She has also been critical of President Trump’s suspension of rules enacted by the EPA and BLM during the Obama administration to curb methane emissions. A staunch supporter of renewables, Lujan Grisham believes that by recovering methane that is flared or lost to infrastructure leaks, the Land of Enchantment could recoup tax dollars that could be better spent on education.

In other statewide ballot measure news, Florida voters passed Amendment 9 comfortably, which prohibits offshore oil and gas drilling in state waters. It does not, however, interrupt the transportation of oil or gas products within this area. Florida’s state water boundary extends out three nautical miles from its shore in the Atlantic and nine nautical miles from its shore in the Gulf.

Meanwhile, Republicans were able to keep their majority in the Senate, meaning that certain pro-business legislative priorities — such as tax reform and cutting back on costly regulations via the REINS Act — will likely remain in place.

On the other hand, the most significant challenges to our industry could come from the Democrat controlled House of Representatives. The Democrats secured a big win in the House, flipping several Republican-held seats by the end of the night and regaining the majority in the House for the first time since 2010. The House will likely not be successful in passing much legislation due to the senate and presidential veto acting as a check. However, during the Obama administration, House Republicans passed a rule change in the House to allow for most committees to obtain legally enforceable subpoenas. This tool will surely be used by the new House majority to launch widespread investigations of the administration and policies important to the oil and gas industry. Committee investigations into climate change, fracking, crude oil exports, and LNG permitting should be expected. On the bright side, the House may serve as a check on the administration’s tariff policy which will be welcome news to many in our industry.

Elections always have consequences, and the ramifications of the 2018 elections will be felt for years to come.

For more information: Visit pesa.org About the author: Tim Tarpley, Vice President Government Affairs, oversees PESA’s Public Policy committees and programs. Tarpley most recently served as Chief of Staff to Congressman Ted Poe (R-TX) and began his legislative career as an aide to Congressman Thornberry (R-TX). Tarpley holds a juris doctor from Creighton University School of Law and a master of laws from American University Washington College of Law.

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