Energy battles set to rage into 2012

The investigation has not uncovered evidence that the loan guarantee approval was influenced by politics. But the probe has nonetheless been a political nightmare for the White House going into the 2012 elections.

Top Republicans on the House Energy and Commerce Committee say they will broaden their investigation in the coming months to include other green energy loan guarantees.

Nuclear safety: The March disaster at Japan’s Fukushima Daiichi power plant has prompted the country’s nuclear power regulators to re-evaluate existing safety regulations.

The Nuclear Regulatory Commission (NRC) is in the early stages of evaluating and implementing a series of more stringent safety standards recommended by a federal task force mandated by President Obama in the aftermath of the disaster.

NRC Chairman Gregory Jaczko has called on his commissioners to implement the new standards, which include rules to ensure that plants can deal with sustained power outages, within the next five years. That’s a speedy time frame for an agency that took a decade to impose new regulations after the Sept. 11 terrorist attacks.

The commission will make a series of key decisions next year that will lay the groundwork for its new safety standards.

NRC members will need to make the decisions amid major tensions at the agency. Four NRC commissioners launched a public revolt against Jaczko this week, arguing his “erratic” behavior could prevent the body from protecting public health and safety.

During back-to-back hearings, they alleged that Jaczko has overstepped his authority, withheld information from his colleagues and verbally abused staff members. Jaczko strongly denies the allegations.

Republicans attacked Jaczko over the allegations, with some even calling for his resignation. But many Democrats came to his defense, arguing that the commissioners are retaliating against Jaczko over his efforts to move forward quickly with new nuclear safety standards.

Keystone pipeline: The Keystone oil sands pipeline is also likely to remain a political battleground into 2012, regardless of the outcome of Capitol Hill talks on a compromise that could alter the timeline for a federal decision.

Environmental groups bitterly oppose TransCanada Corp.’s project to connect Canada’s oil sands projects with Gulf Coast refineries. Look for them to keep pressure on President Obama to personally reject the project.

But at the same time, major business groups, such as the U.S. Chamber of Commerce and the American Petroleum Institute, back the project. They’re casting it as a job-creation engine during a campaign season dominated by the economy.

Green-energy tax credits and funding: Look for renewable energy companies and their Capitol Hill allies to ensure preservation and extension of various incentives for renewable electricity projects.

A major priority will be protecting the production tax credit for wind power projects (and some other renewables) slated to expire at the end of 2012.

Historically, new wind power installations have plummeted when the credit has lapsed; the industry will put its lobbying muscle into an extension.

At the same time, the White House is pushing green energy research funding, a challenge amid efforts to cut federal spending.

EPA regulations:
EPA is vowing to continue crafting greenhouse-gas regulations for power plants and refineries. House Republicans have passed bills to scuttle the rules, but they haven’t advanced in the Senate. Don’t expect them to stop trying.

More broadly, EPA will be implementing other Clean Air Act rules that many Republicans and some Democrats — backed by powerful utilities with coal-fired generation — oppose and are seeking to soften.

Offshore drilling: The Interior Department is moving ahead with a 2012-2017 offshore oil-and-gas leasing plan that Republicans and oil industry groups call far too modest, while environmentalists remain dismayed over plans to sell leases in fragile Arctic seas in several years. Expect the legislative and political pressure to continue.