Talk about change for energy and tax policy. On the heels of the release of Chairman Max Baucus (D-Mont.) tax reform draft proposal on energy, the White House announced that he has been nominated for ambassador to China. Last week the big news in the energy policy world was the return of John Podesta to the White House, bringing real firepower to the administration’s Climate Agenda.
When Baucus announced his retirement earlier this year, the speculation was that he would work with House Ways and Means Committee Chairman Camp (R-Mich.) to push tax reform forward as a legacy for both of them before the end of their terms in 2014. While doing tax reform was still considered a long shot, their passion was what was keeping the discussion alive. As recent as last Sunday, House Budget Committee Chairman Paul Ryan (R-Wis.) opined that the passage of a two-year budget made tax reform more possible next year.
With Baucus leaving early, it is likely that Sen. Ron Wyden (D-Ore.) would take over the Senate Finance Committee. This may doom the kind of comprehensive tax reform that the two tax-writing committee chairman were contemplating.
For the energy industry with permanent tax incentives this provides some comfort. For the renewable industry whose tax credits again expire at the end of this year, it may also provide relief as it may lend momentum to enacting a business extenders bill either stand-alone or as part of a larger package. This is supported by the action taken on Thursday by Majority Leader Harry Reid (D-Nev.) to bring the business extenders to the floor with a unanimous consent request to be voted on in the Senate.
As tax policy is our de facto energy policy in the U.S., the change in leadership of the Senate Finance Committee is a significant event. Wyden has said upon taking the helm at the Senate Energy and Natural Resources Committee that this is a unique time for our country, particularly on natural gas and a future of abundance. He said America can have it all—economic growth as well as affordable electric bills. Wyden supports tax incentives for renewables and utilizing the tax code to incentivize further development of clean energy technology.
Wyden’s departure for Finance Chairman would put Sen. Mary Landrieu (D-La.) in the leadership position of the Senate Energy and Natural Resources Committee. Unlike Wyden she is a strong advocate of oil and gas, supports LNG exports and opposes a national renewable portfolio standard. Interestingly, she recently cosponsored the bill proposed by Sens. Christopher Coons (D-Del.) and Jerry Moran (R-Kan.) that would expand the use of Master Limited Partnerships (MLP) to renewables. Her ascension to the chairmanship would be good news for the fossil fuel industry and for the Senate staying in democratic hands as she is reported to be in a tough reelection campaign.
Bode leads the energy practice at Cornerstone Government Affairs and has been a nationally recognized expert on energy policy for over 30 years. She served as an energy and tax advisor to Governor and then Senator David L. Boren of Oklahoma for nine years. She has served as President of the Independent Petroleum Association of America, the national trade association representing America’s oil and gas producers as well as CEO of the American Wind Energy Association, the national trade association representing every segment of the wind industry in the United States.