President Obama’s second term will be “onerous and difficult” for the oil and gas business, a consultant told industry insiders at the Petroleum Club.
A series of decisions that restrict fossil fuels and promote green energy will come down from the executive branch over the next four years, said John Kneiss, North America director for consulting and research firm Hart Energy. They’ll include stiffer environmental policies, limited access to federal lands and new regulations on hydraulic fracturing instituted by the U.S. Environmental Protection Agency.
“There will be, in my mind, a dramatic push by the agency to justify taking on a national regulatory scope for hydraulic fracturing,” Kneiss told the audience, during a presentation on what presidential election means for the energy industry.
The nationwide controversy swirling around hydraulic fracturing, or fracking, spurred Congress to call for an EPA study on the practice, which is used to extract natural gas from dense shale rock. In addition to public concerns about the impact of hydraulic fracturing on drinking water, environmentalists also have raised questions about methane leaks and air quality effects.
“There will be tightening regulations,” Kneiss said. “It will be onerous and difficult.”
Kneiss’ forecast wasn’t all bad news for the oil and natural gas industry. He predicted that the debate over the Keystone XL pipeline will end with a win for the business. Following Obama’s rejection earlier this year, the pipeline’s backers have recrafted its route around environmentally sensitive areas.
With the right timing, the new plan will be approved, Kneiss said.
“There’s really no technical or environmental reason for having a denial,” he said. “Let’s look at next summer, when gasoline prices are going up again.”
Meanwhile, climate change will become a larger part of the public conversation, he said. While fossil fuels will continue to fulfill most of the nation’s energy needs, Americans’ concerns about climate change will grow and the industry needs to prepared to address them, Kneiss said.
“Regardless of what you may personally believe about that issue, it’s not going to go away,” Kneiss said. “It’s diminished somewhat, but as economic progress occurs in this country, those kinds of issues rise.”
Following the presentation, an audience member asked what Kneiss’ outlook would have been if Romney won.
Kneiss responded with a lengthy pause. Then he cleared his throat and said:
“Happy days are here again.”