* Tighter rules expected for oil, gas drilling
* Solar, wind likely will get renewed focus
* Chemical producers fear stronger emissions rules
Nov 7 Energy companies likely will see more
regulation in President Barack Obama's second term, with less
access to federal lands and water even as the administration
promotes energy independence.
With a pledge to cut oil imports by half by 2020, Obama
during the campaign advocated what he called an "all of the
above" approach to developing a range of domestic energy
sources. He said, however, that he would roll back subsidies for
oil companies and reduce the nation's reliance on oil by
mandating production of more fuel-efficient vehicles.
"You are going to have less access to federal lands and
tougher government agencies," said Dan Pickering, chief
investment officer at TPH Asset Management in Houston.
Obama's energy strategy over the last four years has shifted
away from focusing on climate change after a bill establishing a
cap-and-trade system to curb carbon emissions died in the Senate
in 2010 after a bitter partisan fight. The president's green
policies also suffered a major setback when solar power company
Solyndra collapsed last year after receiving a $535 million loan
guarantee, unleashing a political firestorm.
Obama's team of energy advisers include Energy Secretary
Steven Chu, a Nobel prize- w inning scientist who specializes in
alternative and renewable energy technologies but who regularly
talks up the government's role in developing hydraulic
fracturing technology. His top White House energy adviser is
Heather Zichal, who has been an advocate for creating green jobs
and tackling climate change by reducing dependence on oil.
Obama has pledged more support for development of renewable
energy technologies like solar and wind, but he will need the
support of Congress to extend or renew tax breaks that have
underpinned the growth of those industries.
"Obama can love solar as much as he wants, but I don't know
that a whole lot more is going to happen in terms of new,
constructive policy," said Morningstar energy analyst Stephen
Perhaps most importantly, however, renewable energy faces
major obstacles unrelated to policy, such as stiff competition
from low-priced natural gas, a lack of infrastructure to connect
large projects to the grid, and a global glut of solar panels
that is putting their manufacturers out of business.
Here are more details on how companies in various energy
sectors will fare under President Obama's second term:
HEAT TO RISE ON OIL AND GAS
Obama is expected to tighten rules and regulations governing
energy exploration, actions that may add billions in costs for
oil and gas companies.
ClearView Energy Partners analysts, in Washington, expect
the president to "continue prosecuting energy policy through
regulation and administrative action, with only the courts as a
check on that agenda," according to a note sent to clients last
Tougher restrictions are expected for companies drilling on
federal lands as well as more rules governing water management
and methane emissions. Any new rules related to hydraulic
fracturing may drive up costs for active drillers including
Chesapeake Energy Corp and Exxon Mobil Corp.
Still, throughout the campaign and during the debates, Obama
has touted the benefits of increasing production of cleaner
burning natural gas, winning him praise from America's Natural
Gas Alliance, an industry lobby group.
Obama has also pledged to eliminate more than $46 billion in
subsidies for fossil fuel companies, a plan the industry has
While the Obama Administration has put approval of
TransCanada's Keystone XL pipeline on hold, eventual
approval is expected, an action that will increase the flow of
cheaper crude oil from Canada to refineries on the Gulf Coast at
Port Arthur, Texas.
Companies with refineries in Port Arthur or in nearby
Beaumont include Valero Energy Corp, Shell, France's
Total and Exxon Mobil Corp.
"WAR ON COAL" - PART II
Obama is deemed by opponents to have waged a "war on coal"
over the past four years, particularly through stricter
Environmental Protection Agency regulation.
Hal Quinn, president of the National Mining Association,
criticized Obama for not living up to a 2008 promise to develop
clean coal technology. "Current administration policies
virtually preclude the construction of new, cleaner coal-based
plants that are the necessary platform for the technology the
president advocated," Quinn said. "These same policies have
skewed the market against coal."
The U.S. Chamber of Commerce pointed to estimates of up to
33 gigawatts of coal-fired electricity generation due to be
retired - about 3 percent of total U.S. power capacity. While
tougher regulation has played a part, cheap natural gas as an
alternative power source is also driving that change.
CHEMICALS BRACE FOR HIT
Obama is likely to implement several long-delayed,
controversial emissions regulations for industrial boilers that
are commonly used by chemical producers.
The centerpiece provision, known as Boiler MACT (Maximum
Achievable Control Technology), had been first proposed in 2004
but was effectively shot down by courts before being revived by
the Environmental Protection Agency in 2011.
It has been winding its way through courts again, and the
EPA is due to issue new rules by December.
Obama's victory could embolden EPA Administrator Lisa
Jackson to further tighten Boiler MACT regulations next month on
limits for dioxin, mercury and carbon monoxide emissions. It is
not clear if Jackson will stay at the agency in Obama's second
"While we don't agree with some of the provisions (of Boiler
MACT), we think that it will be pushed through more readily than
if Romney had won," said Lawrence Sloan, president of the
Society of Chemical Manufacturers and Affiliates, an industry