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[Editor's note: A version of this story appears in the June 2021 issue of Oil and Gas Investor magazine. Subscribe to the magazine here.]

Will the U.S. be able to lead the world in oil and gas production and emissions reduction? That quest is being put to the test as the Biden administration pushes to prioritize climate change in its energy policy.

Anne Bradbury American Exploration & Production Council CEO
Anne Bradbury, CEO of the American Exploration & Production Council, sees a divided Congress as a blessing in disguise. ”I predict it’s going to be a lot harder to continue moving big legislative packages through the Congress because of the small margins that exist.”

Anne Bradbury, CEO of the American Exploration & Production Council (AXPC), whose membership is composed of 25 of America’s independent E&P companies, joined Cornerstone’s Jack Belcher for a segment of Hart Energy’s Energy Policy Watch video series to discuss the already busy energy policy landscape merely months into the Biden administration.

Bradbury has served as a top leadership aide for over a decade for some of the most important leaders in Congress. As floor director, she guided the House majority’s floor operations and advised the entire Republican leadership team on legislative strategy and policy development. She joined AXPC in 2019.

Belcher is a principal with Cornerstone Government Affairs Inc., a bipartisan public affairs and advisory firm.

Belcher: We all know that there’s a lot going on in Washington right now. We have a new Congress, a new administration, big policy changes and they all impact the oil and gas industry. Can you tell us a little bit about the specific policies that you’re watching right now?

Bradbury: We’re about three months into this administration and this new Congress and there’s been a lot that has been popping that affects the industry. Right off the bat we saw a very significant decision with regard to the Keystone Pipeline.

There were two sweeping executive orders out of the White House that contained a lot of provisions that affected the oil and gas industry. A lot of those policies were essentially directives to the agencies. And so right now we’re in the process of engaging with the agencies as they develop what those policies are going to look like. So there’s been a lot of talk about what the administration is doing, but it’s important to remember a lot of this is very much a work in progress.

So the details remain to be seen what the Department of Interior is doing with their federal lands review, the EPA is developing regulations around methane, the Hill is looking at moving the climate and infrastructure packages. These are all issues that we’re engaged with that we’re really concerned about.

What we’re trying to do is find areas where there is commonality. We want the U.S. to continue to lead the world in emissions reductions and to produce oil and gas at the highest environmental standards, but at the same time we want to make sure that policies ensure that we can continue to produce oil and gas here in America, and that we’re supporting good paying American jobs.

Belcher: You’re the former floor director for two speakers of the House of Representatives so you have a lot of inside knowledge of how the system works. Can you give us some insight from your experience as to what you think are going to be the pieces of legislation that move? What can we expect?

Bradbury: First of all, note the difference between where we are now and where we have been historically when you’ve had a president coming into office. The margins in the House and the Senate are effectively tied. The Senate is completely tied with Vice President Harris being the tie breaker, and the House has just the smallest of margins it has seen in decades and is essentially tied.

“There’s been a lot of talk about what the administration is doing, but it’s important to remember a lot of this is very much a work in progress. The details remain to be seen.”

While this Congress and administration saw great success in moving the first COVID-relief package through reconciliation, I predict it’s going to be a lot harder to continue moving big legislative packages through the Congress because of the small margins that exist.

Policies that can move through reconciliation are going to need the support of everyone from Sen. [Bernie] Sanders to Sen. [Joe] Manchin in the Senate, and Rep. Lizzie Fletcher to Rep. [Alexandria] Ocasio-Cortez in the House. And that’s a really challenging undertaking. I think they’re going to do what they can to move forward the infrastructure package and the Biden agenda, but I personally think that there are going to be significant limitations on what they’re able to accomplish. And at some point they’re going to have to pivot to looking at what can be done on a bipartisan basis.

Belcher: So what does that mean for specific pieces of legislation, for instance, the CLEAN [Climate Leadership and Environmental Action for our Nation’s] Future Act that we just saw come out, and this infrastructure plan? What do those margins mean in terms of the legislative process?

Bradbury: The infrastructure package unveiled by Biden, there are areas where I think you can find some bipartisan areas of support, particularly around the traditional definitions of infrastructure on roads and bridges, maybe even rural broadband. I think you’re going to have a lot more trouble finding bipartisan agreement on some of the more expansive definitions of infrastructure. Some of those provisions may be able to move separately, but I don’t know that they would be able to move under the rubric of an infrastructure package.

The CLEAN Future Act is one of the bills that I don’t think Republicans view as infrastructure, and I do think Democrats view it as infrastructure.

But if you break that down, there are potentially some areas of agreement under the CLEAN Future Act, particularly provisions that support carbon capture research funding for innovation and new technologies. I think you see a lot of bipartisan support for that.

Then you also have the larger question of how are you going to pay for these things. The Biden administration has also put forward a plan on how to pay for it that included raising the corporate rate, getting rid of so-called subsidies for oil and gas as well as some other tax changes. We’ve even seen Democrats come out pretty early and criticize some provisions of that. So I think the question of how much of it is paid for and how it is paid for is, again, very much an open question that is going to take a lot of work to find consensus on, even if it moves on a partisan basis.

Belcher: We’ve had the executive orders that direct agencies to look at their actions through a climate lens and a lot of talk about how it impacts the oil and gas industry. Can you tell us a little bit about what those impacts are and what AXPC is doing to try to avoid some of the negative impacts?

Bradbury: One of the things that we saw from day one is this administration is very much taking a whole government approach to climate change. Because of that, we’re seeing regulations that affect the oil and gas industry in places that traditionally we haven’t seen. We would be very concerned with any policy that unfairly penalizes the domestic oil and gas industry and serves to essentially outsource production and outsource emissions, because emissions are a global issue.

By simply penalizing the domestic oil and gas industry, not only are you hurting jobs and families, but you’re potentially actually increasing emissions because you’re outsourcing it to places with higher, less stringent regulations. So we’re looking at a number of agencies, certainly EPA and DOI, the more traditional regulators of oil and gas, but also Treasury, the SEC, FERC and DOT. All of these agencies are now really engaged in climate policy in ways that directly affect our companies and ability to operate. So we are going to continue to engage and advocate for policies that ensure that we can continue producing, and we continue to have access to capital.

Belcher: Tell us about the importance of jobs in this debate, especially when you look at the razor thin margins.

Bradbury: So much of this comes down to how this is impacting American workers. This is something that both parties care about a lot. President Biden is very close to a lot of the unions. We know that this is an issue that Republicans are talking about as well.

The administration’s decision with Keystone [Pipeline] caused the immediate loss of jobs, unfortunately. It was an unfortunate outcome. A lot of the other policies that the administration is putting forward also potentially has that effect. It might take a little longer to be immediately obvious, but it certainly risks that particularly in areas like New Mexico, Texas, Colorado and across Appalachia where you have a lot of oil and gas operations.

It’s also important to remember that it’s not just areas where we employ oil and gas workers, but that domestic production supports jobs across the country both indirectly by (other job sectors) supporting our industry, but also simply through keeping energy prices low, energy supply stable, that’s critical to a strong manufacturing base. Raising costs on American families as we’re recovering from this pandemic is very concerning.

The worker angle is something that you’re going to continue to see both parties talk about because it is a top-of-mind concern. [Former Obama Secretary Of Energy Ernest Moniz] recently put out a study that shows very clearly that oil and gas jobs pay more, have better benefits, are longer term and have better opportunities for advancement than opportunities in the renewable sector. We don’t support picking and choosing. We’re very supportive of an allof-the-above energy strategy.

But it is just not credible to say that there’s a one-for-one change that can be made for an oil and gas worker that may lose their job, that they can simply start manufacturing solar panels. It’s not realistic. It’s not credible. Oil and gas workers are proud of what they do, and they want to continue doing what they do. And the fact is they can as we support the economy. We believe that these jobs and environmental progress are not mutually exclusive; you can have both.

Belcher: There are some financial regulations moving right now at SEC. Can you talk about those regulations and what their impacts are to the oil and gas industry?

Bradbury: This is sort of a newer area of regulation that is going to affect all public companies, certainly the oil and gas industry, but really any public company. The SEC has put out a notice for public comment—not an official rulemaking; we think it’s probably a precursor to that—that is seeking public input on a number of questions related to climate disclosure. That can give us a sense of what they’re thinking about and where they’re going.

So at a minimum, most people expect increased requirements around climate disclosure. But how far they intend to take this, I think, is an open question.

Are they going to try to force some sort of disclosure framework on industries? Will it be one size fits all or will it be unique to different industries? It’s important to remember that the SEC is not an energy or climate policy expert. They’re financial regulators, so it’s a new area that they’re exploring and one that I think a lot of folks do have some concerns about.

Our industry is really leading the way in terms of public disclosures around their ESG frameworks and metrics. One thing that we’ve been working on last year is developing a new framework for the upstream oil and gas industry to utilize when doing their reporting. It’s now publicly available on our website. And so a lot of our companies will be utilizing this new, consistent, transparent framework for some of the key ESG metrics that our stakeholders care about. Industry is really leading the way here, and hopefully the regulators have a lot to learn on what industry is already doing here.

Watch Anne Bradbury discuss what’s ahead for independent oil and gas producers with Jack Belcher on Energy Policy Watch.

Energy Policy Watch: What’s Ahead for Independent Oil and Gas Producers

Belcher: ESG is something that a couple of years ago a lot of oil and gas producers wouldn’t know about, but now everybody’s talking about ESG. Are your members moving quickly more in terms of disclosures?

Bradbury: Our members are moving very quickly in the areas of disclosure. And you’re exactly right that this area has evolved really rapidly over the past couple of years. And whether it’s through the AXPC framework in addition to their sustainability reports they already do, our companies are responding to their stakeholders and their investors that want this transparent and consistent disclosure of information around ESG metrics. Some companies are ahead of others, but the entire industry is moving rapidly in that direction.

Belcher: Looking at a lot of the regulatory actions that have taken place over the past few years—the methane rule, for instance, which has gone back and forth—ultimately these things end up in the courts. Can you tell us about the courts and how they’re playing into some of the policies we’re discussing today?

Bradbury: There’s just been so much regulatory back and forth of the pendulum, from the change of administrations, but also from what we have seen in the courts. And what we understand is that this administration is looking to push, they’re exploring, what their legal authority is in a way that I think maybe goes beyond what some previous administrations have done. I do think this administration is going to play with the edges of what is legally justifiable. And if that is the course that they take, you’re going to see this play out in the courts for potentially years to come.

“Most people expect increased requirements around climate disclosure. But how far they intend to take this, I think, is an open question.”

Alternatively, perhaps taking a more collaborative approach and seeking more durable regulation that maybe isn’t so questionable and stands on solid legal ground is another potential approach, because I know this administration also doesn’t want to see its policies be unwound. We know that Sen. [Mitch] McConnell has made the appointment of Republican judges one of his big priorities over the past four years, and the Supreme Court has some new judges and is more conservative than it has been in the past.

A lot of these policies, if they are pushing the limits of what might be legally defensible, are going to end up before the Supreme Court, which might have a different view of how expansive their authority is under the law. That’s something to think about, and to keep in mind that this administration is not necessarily the last word on regulatory policy.

Belcher: How do you think some of these things are going to play out?

Bradbury: For one, we know that [in] this administration there’s a lot of cooks in the climate kitchen. Right off the bat, it seems like the center of gravity has been around the White House officials, particularly [U.S. Special Presidential Envoy for Climate John] Kerry, [National Climate Advisor] Gina McCarthy, because they didn’t have to go through a Senate confirmation process. So they’ve been running the show for the most part in terms of climate and energy policy to date.

But now that [Interior Secretary Deb] Haaland and [Environmental Protection Agency administrator Michael] Regan are in place, it’s going to be interesting to see if that center of gravity in decision-making shifts back to the agencies where it traditionally has existed, or whether or not the White House continues to try to drive all climate policy.

And then there are a lot of interesting members of Congress to keep an eye on, some young, fresh voices both on the Republican side and on the Democrat side. We all know Joe Manchin is somebody to keep an eye on, for sure, but some of your Texas colleagues, from Rep. Lizzie Fletcher and Dan Crenshaw, are interesting, new, younger voices that have a lot to say here and are up and comers in their party.

There’s a lot to watch play out over the next six months, both on the congressional side and on the agency side.

Energy Policy Watch is a partnership between Hart Energy and Cornerstone to bring regular video updates on legislative and regulatory actions affecting the energy industry. Guests range from key representatives or congressional staff to relevant cabinet-level officials and executive branch personnel. View More Energy Policy Watch Episodes Here.