Senate shuffle could put oil industry ally at top of energy panel

WASHINGTON — President Barack Obama’s decision to nominate Sen. Max Baucus to be the next U.S. ambassador to China sets off a chain of events that could put an oil and gas industry ally in charge of the Senate energy committee.

If Sen. Mary Landrieu, D-La., takes the gavel of Energy and Natural Resources, it could hasten a looming debate over exporting American crude and ease congressional pressure on the Energy Department to move slowly in approving foreign sales of liquefied natural gas. But her ascendancy still wouldn’t mean a slam dunk for the oil and gas industry and its wish list on Capitol Hill.

If Baucus were nominated and confirmed for the post — both of which seem likely — it would open up the chairmanship of the Senate Finance Committee, which Baucus has held since 2007.

Although Sen. Jay Rockefeller, D-W.V., is next in line for the Finance Committee gavel, he is retiring and probably will stay in the top post at the Commerce Committee instead. If so, the Finance chairmanship would almost certainly end up going to the third-ranking Democratic senator on the panel, Ron Wyden, of Oregon, who has been chairman of the Energy and Natural Resources Committee.

Landrieu is next in line to take over that energy panel after retiring Sen. Tim Johnson, D-S.D., who is expected to take a pass on the job. The move would give Landrieu more stature and power heading into a tough re-election fight next year. And it would put her alongside a fellow oil state senator at the helm of the committee: ranking Republican Lisa Murkowski of Alaska.

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Kevin Book, managing director of Washington, D.C. analysis firm ClearView Energy, said Landrieu’s likely escalation could shake up energy policy debates on Capitol Hill, where lawmakers “tend to vote for what’s in the ground at home.” In the case of Landrieu, that’s oil and gas, and she has a long track record backing the industry.

“As an outspoken proponent of oil and gas production, Sen. Landrieu could provide a very different perspective as the nation rethinks its scarcity-based energy policy in age of adequacy, especially when it comes to energy exports,” Book said.

Natural gas exports

The biggest change could come on the issue of liquefied natural gas exports. Wyden has been a vocal critic of selling too much of the fossil fuel to overseas customers, insisting that the government needs to work to find a “sweet spot” that encourages more domestic production without throttling a domestic manufacturing renaissance driven by cheap natural gas. Wyden also extracted a pledge from Energy Secretary Ernest Moniz to examine new energy market data and prognostications as the Department of Energy considers LNG export applications.

Landrieu, however, is a fan of selling more LNG overseas, and her home state of Louisiana is home to several likely export facilities. She could leverage an energy committee chairmanship to push for a speedier export approval process.

She and Murkowski also could team up to propel a debate over relaxing a three-decades-old ban on most crude exports. Murkowski is set to release a major policy paper on the issue in January, amid a growing oil and gas industry clamor for greater freedom to sell U.S. crude harvests overseas.

Offshore royalties

Landrieu and Murkowski already have teamed up on legislation that would give states a greater share of royalties for offshore oil and gas production near their coastlines. Wyden held a hearing on the measure earlier this year, but the bill is controversial and has a relatively high price tag that could make it tough to navigate through the full Senate.

But it’s not clear that Landrieu could give much of a boost to her revenue sharing bill, even if she is the energy committee chairwoman. There are two big obstacles:

First, Landrieu doesn’t share Wyden’s reputation as a dealmaker willing to make tough compromises essential to advance legislation. In some ways, a more liberal Democrat who doesn’t represent the oil patch may have had an easier time winning support for the revenue sharing measure.

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Second, Senate Republicans who want to see Landrieu’s Louisiana seat in GOP hands will be none too eager to help her score legislative victories.

A third consideration is staffing. If Landrieu looks to clean office suites at the Energy and Natural Resources Committee — hiring new people to replace existing staffers — it could take a while to get up to speed.

Seeking compromise

Book notes that there are both traditional and pragmatic reasons for a Chairwoman Landrieu to seek compromise on the Senate energy committee, widely viewed as “one of the few remaining refuges for bipartisan cooperation on Capitol Hill.”

“Sen. Wyden’s views moderated considerably when he took over the panel, so it would not be unreasonable to imagine that Sen. Landrieu could continue the tradition,” he said. Plus, Landrieu knows that if she “comes out of the gate using her committee leadership to enable home-state economic gain, she could quickly lose her ability to bring home the bacon for Louisiana in the long game. In short, leadership tends to dampen — if not eliminate — bomb-throwing.”

In her race for re-election, Landrieu has drawn $393,500 in contributions from oil and gas industry employees and political action committees, according to the Center for Responsive Politics. That makes oil and gas interests the second-biggest industry donor to her campaign.

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