Democrat win in US Senate indicates new leader on energy policy

Washington (Platts)--7Nov2012/1222 pm EST/1722 GMT

Democrats retained control of the US Senate in Tuesday's election, paving the way for a potential opponent of natural gas exports and vocal critic of commodity market speculation to take over a key energy committee.

Senator Ron Wyden, an Oregon Democrat, is expected to take over as chairman of the Senate Energy and Natural Resources Committee when the 113th Congress convenes in January. Senator Jeff Bingaman, a New Mexico Democrat and the committee's current chairman, did not seek re-election this year.

The US House of Representatives remained in the hands of the Republican Party, suggesting differences will remain between the two chambers on energy, the environment and other issues.

In the Senate, Wyden, 62, has indicated he would be open to reconsidering revenue sharing for states in offshore gas and oil drilling, but he has also expressed concerns that large-scale LNG exports would raise domestic gas prices and hurt the US economy. This spring he said at a public event in Washington that the US government should impose a "timeout" on approving LNG exports until their effects can be better gauged

Last week, Wyden wrote to Energy Secretary Steven Chu asking him to explain the "decision-making criteria" that the Department of Energy will use in determining whether to approve all "pending and future applications" to export LNG.

Wyden has also become an outspoken critic of commodity market speculation, which, he said, has influenced energy prices and increased volatility in markets.

Wyden was part of a small, but vocal group of Senate Democrats who criticized the Commodity Futures Trading Commission's perceived delay in imposing federal limits on petroleum, natural gas and other commodity contracts.

"There's no sense of urgency [from the CFTC]," Wyden said last year following a Capitol Hill meeting with CFTC Chairman Gary Gensler. "We think this should have been addressed a long time ago."

The agency's position limits rule, which was scheduled to take effect last month, has been overturned by a federal judge following an industry lawsuit.

In a September report for clients, the Rapidan Group and Goldwyn Strategies said there would be "tonal," if not substantive, changes in energy policy coming to the Senate, due to Wyden taking over as chairman.

"Senator Wyden is more publicly critical of the oil and gas industry than outgoing Senator Bingaman, and his voting history on the Energy and Finance committees demonstrates this," the report said. "However, as a coastal-state member, Wyden may be more willing to make deals to expand offshore oil-and-gas access and include revenue-sharing measures than his predecessor."

Last month, Wyden introduced legislation aimed at protecting US clean-energy manufacturers from Chinese competition and last year he introduced a bill to sell part of the Strategic Petroleum Reserve to offset the costs of research on non-petroleum fuels and advanced vehicles.

In 2009, Wyden unveiled an alternative energy bill that was focused on expanding renewable resources, included a low-carbon fuel standard and offered new incentives to make alternative energy more competitive with traditional fossil fuels.

The Democrats' Senate win Tuesday also likely means that Senator Barbara Boxer, a California Democrat, will remain chairwoman of the Senate Environment and Public Works Committee.

--Brian Scheid, brian_scheid@platts.com
--Edited by E Shailaja Nair, shailaja_nair@platts.com