Congress again is embroiled in another hyper-partisan food fight that threatens to blow up into a fiscal crisis. And once again dividend-paying companies like utilities are caught in the crossfire...
Mitt Romney and You
Bold plan for independence, or more partisan overreach?
Just as we were going to press, the Romney-Ryan campaign released an energy plan that sets forth what purports to be a bold policy goal: to achieve North American energy independence in just eight years.
That goal is interesting in its own right. But it’s even more interesting against the current backdrop of economic and policy trends affecting energy and utility companies. And make no mistake, energy policy issues are heating up again. Just one day before the Romney plan was released, the U.S. Court of Appeals for the D.C. Circuit struck down the EPA’s Cross-State Air Pollution Rule (CSAPR). Two weeks earlier, the Senate Finance Committee approved legislation that would extend federal tax credits for wind energy. Meanwhile, debate is raging in policy circles over dividend taxes, which are set to increase to pre-2003 levels if Congress doesn’t act to extend the Bush-era tax cuts.
The November elections are set for just two months after this issue of Fortnightly hits readers’ mailboxes. Given the major energy policy issues now in play, Romney’s stated positions merit a closer look.
Dreaming of Independence
On the same day the Romney-Ryan campaign released its plan, it also distributed an infographic that declared: “Energy Independence: No Longer a Pipe Dream.” It asserted the goal of achieving North American energy independence by the year 2020 “by taking full advantage of all our oil, gas, coal, renewables, and nuclear power.”
That litany of resources notwithstanding, the plan focuses mostly on petroleum. In fact, it largely could be summed up with the 2008 Republican campaign slogan, “Drill, baby, drill!” However, it does throw a few bones to the natural gas and power industries. They’re found in last two sections of the plan, which focus on regulatory reform and innovation. These sections—taken together with Romney’s earlier public statements and a campaign document titled “ Believe in America: Mitt Romney’s Plan for Jobs and Economic Growth ”—outline the candidate’s power and gas policy priorities.
Reforming environmental regulation ranks high on those priorities. The issue of the day, CSAPR, isn’t specifically addressed in the Romney plan, although in earlier public statements he seemed to tacitly endorse the Clean Air Act’s “good neighbor” principle, which spawned the need for CSAPR and the Clean Air Interstate Rule (CAIR) that it was meant to replace. However, the Romney-Ryan plan emphasizes “allowing state reviews to satisfy federal requirements”—a key issue in the D.C. Circuit’s decision to strike down CSAPR. And Romney calls for agencies to give regulated industries “fair notice and a significant window” for complying with new standards—a clear nod to critics of the EPA “train wreck,” i.e., CSAPR and other new EPA rules that opponents say can’t be implemented in the time frame the agency specified.
Moreover, the campaign promises that as soon as Romney gets into the Oval Office he’ll launch a stem-to-stern review of all regulations from the Obama era, and will scuttle those that “unduly burden the economy