US House Republican power shift could impact US energy, climate policy

Washington (Platts)--5Jan2011/549 pm EST/2249 GMT

Republicans took control of the US House of Representatives Wednesday and their dual goals of slashing federal spending and eliminating what they call "job-killing" government regulations could significantly alter US energy and climate-change policy.

Representative John Boehner, an Ohio Republican, is scheduled to make his first speech as speaker of the House at about 2 p.m. EST (1900 GMT). In excerpts released by his office Wednesday morning, Boehner said the American people "voted to end business as usual" in the November elections that swept his party into power, adding that "today, we begin carrying out their instructions."

"Our spending has caught up with us, and our debt will soon eclipse the size of our entire economy," Boehner will say, according to his office. "Hard work and tough decisions will be required of the 112th Congress. No longer can we kick the can down the road."

Boehner and his House Republican colleagues have vowed to cut federal spending on non-defense domestic programs by at least $100 billion this year, which would curb government outlays to roughly 2008 levels. Republicans have sidestepped reporters' questions about which programs they will seek to cut, but some experts believe they will target several US Department of Energy initiatives designed to boost energy efficiency and renewable energy projects such as wind farms and solar facilities.

"The federal government spending spree will stop with the new Republican Majority," Representative Eric Cantor, a Virginia Republican who will take over as House majority leader, said in a tweet Wednesday. "I hope federal agencies across the spectrum will ... find ways to cut their own budgets," Cantor added. "If not, we're happy to do it for them."

Cantor, speaking to reporters Tuesday, declined to specify any "big ticket items" that Republicans would seek to cut, saying only that the Republican-controlled House Budget Committee would unveil a spending plan after President Barack Obama delivers his State of the Union address January 25. REGULATIONS IN THE CROSSHAIRS House Republicans also have vowed to roll back "job killing" government regulations, such as the first-ever rules for greenhouse-gas emissions from coal-fired power plants and other smokestack industries that the Environmental Protection Agency put in effect this Sunday. Representative Fred Upton of Michigan, the new Republican chairman of the House Energy and Commerce Committee, Sunday said he would hold "early hearings" in an effort to derail EPA's regulations.

"This regulation process is not the way to proceed" on climate-change policy, Upton said on Fox News Sunday. "I don't think that we have to regulate carbon to the degree we have a carbon tax or you have a cap-and-trade system."

Another key player to watch on the government-regulations front is Representative Darrell Issa of California, the new Republican chairman of the House Oversight and Government Reform Committee. Over the course of the last several weeks, Issa sent 150 letters to trade groups representing oil and natural gas companies, electric utilities and other industries asking them to identify existing and proposed government regulations that harm job growth.

"As a trade organization comprised of members that must comply with the regulatory state, I ask for your assistance in identifying existing proposed regulations that have negatively impacted job growth in your members' industry," Issa said in the letters, which were first obtained by Politico.

Issa is not expected to focus on energy or climate-change issues in the first few weeks of his tenure, but he has made it clear that he will take on those topics eventually.

"We certainly can find that organizations like the EPA have been shortcutting the process to do work in some cases perhaps trying to get to cap and trade or cap and tax without allowing the law to be passed," he said Tuesday night on Fox News. "That's an area where the overreach can be undone."

--Brian Hansen, brian_hansen@platts.com

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