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If election history proves true, then midterm election madness could be coming to us this November. Right now the Republican Party controls the White House and both chambers of Congress and has a majority on the Supreme Court.
Historically speaking, when a Democrat or Republican administration has been in the same position of controlling all three branches, it usually loses control of Congress during the midterm elections. These elections are held two years into a four-year presidential term. So the big question this November is, Will history once again repeat and the Democrats take over one or both chambers of Congress, or will the Trump administration buck history and preserve its majority over both chambers of Congress?
I’ll share my thoughts on what could happen this November and also share some changes that are already occurring at some of the federal agencies that are important to the midstream sector.
Starting with the Senate, Republicans hold 51 seats, Democrats hold 49 seats, and 35 seats are up during the November midterms. Twenty-six of these are Democrat-held, while only nine are Republican-held. So, right out of the gate, the Democrats are in an uphill battle with the numbers against them.
However, on the money front, Democrats have been much better at raising cash than the Republicans. With 10 of the 26 Democrat seats up for re-election in states that were won by President Trump in 2016, a Democratic takeover of the Senate is highly unlikely. Republicans will likely hold on to their Senate majority and could increase it by a few seats. I think the President still has long coattails, and that will help Republicans hold the Senate.
If one of the chambers flips in November, it’s more likely to be the House, which has all 435 seats. The current split in the House has Republicans holding 236, Democrats holding 193, and six vacancies. A 218-seat majority is necessary to control the House, and Democrats are likely to cut into the Republican majority.
By how much is the golden question.
At the beginning of August, political news and polling monitor Real Clear Politics predicted about 35 House seats as toss-ups. Democrats held two of those while Republicans held 33. The Democrats have a pick-up friendly playing field.
It’s important to note that Republicans have a large number of retirements, leaving many of these seats undefended. At this point the Democrats have seen a significant boost in their cash raising efforts, which could give them the advantage they need to close the gap.
This will be a close one. I think the Democrats will make significant gains but fall short of taking the House.
As for the latest on the Trump administration, in July, then-Environmental Protection Agency (EPA) Administrator Scott Pruitt from Oklahoma resigned. That same day, President Trump appointed Deputy Administrator Andrew Wheeler to serve as acting EPA administrator. Full disclosure: I previously worked for Wheeler and consider him a close friend. That bias aside, and judging him on his merits and achievements, I do think Wheeler will be a fantastic fit at the agency and an ally to the midstream industry.
A mid-July interview he did with the Washington Examiner provided key insight into Wheeler’s vision for the agency.“ I think ‘’
“‘I think we can protect the air, we can protect the water and still deregulate at the same time,’” Wheeler said in the interview. “‘We have to transform to the 21st century and a lot of the apparatus we are using is still in the 20th century. I don’t expect to change everything in the brief tenure that I will have here, but I hope to put the agency on the path to looking at things differently …’”
Gas Mega Rule
The midstream industry will see a lot of change this year at the U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA). PHMSA is trying to make progress on the Gas Mega Rule, which it recently separated into three separate sections. In addition to that, PHMSA experienced significant congressional pressure to accelerate completion of congressional mandates from the last two pipeline safety reauthorization bills.
The next pipeline safety reauthorization will get underway next year, but PHMSA needs to make significant progress to avoid the wrath of Congress due to its slow implementation of these mandates.
At the U.S. Department of Commerce (DOC), we hope to see an increase in its ability to process more exemptions from trade tariffs. DOC has been overwhelmed by the sheer number of requests from companies seeking exemptions from President Trump’s tariffs on the import of foreign-made steel and aluminum.
Business Insider explained in an article published in June, “Under Section 232 of the Trade Expansion Act, the law the Trump administration is using to impose the tariffs, companies can request exemptions if there is no way for them to get the goods they need from a domestic metals producer. But the Commerce Department, which is tasked with handling these requests, is struggling to keep up.”
The article went on to say that at a June hearing, Wilbur Ross, secretary of commerce, said more than 20,000 requests for product exemptions had been filed.
“Ross blamed the snail’s pace on the lack of funding for the department. A report from The Washington Post’s David Lynch paints the issues as much deeper. Officials in the department say there are not enough employees to handle the sudden influx of requests. And employees in the department do not have the expertise to handle such requests, the Post reported,” the article continued.
Another change we are already seeing in D.C. is the amount of environmental activist scrutiny that has been placed on U.S. Department of the Interior (DOI) Secretary Ryan Zinke. These groups, originally so fixated on former EPA Administrator Scott Pruitt, seem to have refocused their attention on Zinke. As a result of this new focus, Zinke has faced numerous inquiries from independent investigators within his department.
GPA Midstream Association has lobbied—and will continue to lobby—DOI on a variety of issues and regulations. Keeping Zinke in place at DOI is of utmost importance to the midstream industry, and the energy industry as a whole.
November will bring a fascinating midterm election. A lot is on the line for both Democrats and Republicans. The midstream industry also has a lot going on at EPA, DOC, PHMSA and DOI with the various changes and issues mentioned here.
It will not be a quiet fall in D.C. for the midstream industry.
Matthew Hite is vice president of government affairs for the GPA Midstream Association, based in Washington, D.C.
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