The Politics of U.S. Energy Policy: Revolution or Status Quo?

The energy policy discussion has changed significantly since the 2008 election. Two major points of discussion that year – promoting nuclear energy and climate change legislation – fell victim to a major natural disaster and the lingering economic pain caused by the financial crisis.

In place of those policy options, the landscape has been remade by the domestic energy revolution. When Barack Obama was elected four years ago, the rapid development of shale gas was underway. It wasn’t until 2009 and 2010, however, that the trend toward shale really became the defining story, the thread tying together media coverage of energy issues.

Looking ahead, shale will continue to shape the energy industry and how the media covers it. Election Day fast approaches, here are trends to keep in mind in addition to shale when considering how the administration (whether Obama or Romney) might deal with energy issues and how policy changes might affect our clients and potential clients:

On domestic energy sources, it’s a question of “when,” not “if”: Both presidential candidates favor developing the natural gas and oil deposits that have already remade almost every energy-related market – from residential electricity to manufacturing – in the country. That said, a Romney administration paired with a Republican House of Representatives and a Republican Senate might push more regulatory authority down to the states and move ahead more aggressively on exports of liquefied natural gas than a second Obama administration and a Congress controlled by Democrats.

Tomorrow’s energy brought to you by Tuesday’s election results: President Obama and Governor Romney both talk about innovation and advanced energy technology on the campaign trail. While they may use similar language, each side has a different vision for the role government should play in encouraging markets for new technologies. Romney said late last week that his administration would “invest in energy science and research to make discoveries that can actually change our energy world,” pointing back to an older understanding of the Department of Energy’s purely scientific mission.

Obama, on the other hand, has been clear that he would continue the more recent approach of using the loan-guarantee program to help improve access to capital for companies otherwise shut out of the market. Ironically, the loan-guarantee approach now derided by some Republicans actually has its origins in the energy package passed in 2005, championed by George W. Bush and many congressional Republicans. Whatever the merits of either approach, redirecting the Energy Department will have significant consequences for energy companies, manufacturers and any business large or small that counts energy as a major concern for its bottom line.

The United States is far from the only market that matters: We have a big economy and we use a lot of energy, so the United States is still an important energy market. But for all their bluster on the campaign trail, both Obama and Romney face the reality that we may no longer be the important energy market. The next president will contend with a global economy and energy market even more immune to U.S. influence than when Obama took office. What neither candidate has discussed often – in part, because there just isn’t much they can do about it – is the coming tidal wave of energy demand from the emerging markets.

Billions of people are projected to join the middle class in India, China and other markets in the decades ahead. They will want what the American middle class wants: cars, iPads and other consumer goods powered by cheap, reliable, rarely clean energy. National Journal’s Coral Davenport (firewalled) recently called that “the biggest reality check of all.” She summarized what other energy experts have said, the fact that “Without major changes in the world’s energy policies, China’s and India’s insatiable new appetites will be fed almost entirely by oil and coal, leading to a surge in fossil-fuel emissions.”

As with many issues, changing energy policy dynamics in Washington bring with them opportunities for a variety of companies and experts to seize the spotlight on a global issue. Be on the lookout for these opportunities and the chance to work with a pool of business leaders, reporters and third-party experts in a field where we can add our clients’ voices to a critically important national debate.

Matt Simmons specializes in helping trade association and corporate clients present credible and influential messages to key audiences. His experience includes strategic communications and consultations with executives on issues such as utility rate requests, customer service and emergency planning. Matt has deep experience in the energy industry, having conducted multiple communications audits and consulted with clients on a range of technologies, from fossil fuels to nuclear power. Matt is a VP, Account Supervisor, in Ketchum’s Washington DC office.