If Republicans win the White House and both chambers of Congress, the sweep would almost certainly signal the end of the 2004-era climate- and clean-energy-friendly Romney. “It wouldn’t matter if Romney still had those same views,” said Michael McKenna, a GOP lobbyist for the energy industry. “He’d be there to sign the bills that the Republican Congress sent him.”
A few pieces of the post-2012 energy landscape are starting to emerge even now. One is the Keystone XL pipeline. When Obama bowed to pressure from environmentalists to reject the pipeline’s proposed path, he gave Republicans a campaign gift that has kept on giving. The pipeline, which could offset U.S. oil imports from the Middle East with oil from Canada while creating thousands of jobs, has broad public support—even within many quarters of the Obama administration. Republicans have turned the pipeline against Obama in campaign ads, and a President Romney would certainly approve its construction. But Obama may well approve it first. Before environmentalists turned the issue into a lightning rod, the State Department was very close to giving final approval for the project. For now, the president has simply delayed the decision pending a fresh permitting and siting review, and there is reason to think that the administration will grant final approval after the election, when Obama is no longer beholden to the environmental groups.
Looking to the next Congress, even if lawmakers agree on no major energy bills, another legislative vehicle may yet alter the energy landscape. Congress is likely to take up a sweeping tax-reform effort in 2013, which is certain to include changes to the energy-tax code. On the campaign trail, Obama has kept up a steady, populist refrain about big oil’s corporate tax breaks. For years, oil companies have managed to protect their $4 billion in annual tax benefits, but those subsidies will definitely be on the table when members of Congress sit down to hash out corporate tax reform, as will all the tax incentives that the renewable-energy industry enjoys. Depending on which party controls the Senate, a discussion of the ultimate energy tax—a tax on carbon emissions, endorsed by environmentalists as well as Mankiw and many other economists—could make it into the mix. For now, advocates say that a carbon tax is only a long-shot possibility. But the tax-reform debate may offer the only real chance of enacting major energy or climate-change legislation under either President Obama or President Romney.
This is the second in a series of stories examining the policy positions of President Obama and Mitt Romney. Next: Health Care.
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