Think tank: Obama victory raises energy concerns

17 November 2008 00:00  [Source: ICB]

US business and industry officials were quick to hail and welcome President-elect Barack Obama's election victory, but there were a lot of ifs, caveats and cautions buried in their best wishes, especially on the energy front.

Typical of election reactions among US trade and industry groups was that of the Natural Gas Council (NGC), which welcomed Obama's victory and promised to work with his new administration toward the President-elect's cleaner and greener energy goals.

"We will work with his administration to ensure new supplies of clean-burning, American natural gas," the council said.

But it also noted that during his campaign, Obama called for a windfall profit tax on energy companies in order to provide many American households with a $1,000 (€770) energy rebate - a policy that could burden oil and natural gas exploration and development companies with a special tax liability of $50bn or more.

"If enacted, those costs will be passed along to American consumers and negatively impact investors," the NGC's welcoming message noted.

Democratic leaders in Congress, which will now have an even stronger Democratic majority in both the House and Senate, have already vowed to reinstate the offshore drilling ban that expired at the end of September this year.

In an open letter to Obama on the morning after his victory, John Engler, president of the National Association of Manufacturers (NAM), cautioned that US industry's access to those offshore oil and gas resources must be supported by the new administration.

NAM said manufacturers and others need assurances from the Obama administration that the expired offshore drilling ban, which represents a major change from a 27-year-old congressional policy, will remain expired.

"We need certainty that this change, which is critical to the long-term ability of the US to grow and retain jobs, is expanded and not reversed," NAM said.

Obama has expressed support for "limited" offshore energy development, but he may be unable or unwilling to maintain that promise in the face of strong opposition among Democratic leaders in Congress.

After every US presidential election, it is customary that business and trade groups welcome the new administration and promise cooperation, even if they opposed the winning candidate. After all, like it or not, industry is going to have to work with the incoming administration.

As the age-old lobbyist's maxim goes: "If you're not at the table, you're going to be on the menu."

At the very least, if you can't say anything nice, it is best to remain silent. Notably, two major US chemical trade groups - the American Chemistry Council (ACC) and the National Petrochemical and Refiners Association (NPRA) - had no immediate comment on the Obama victory.

Nevertheless, the National Association of Chemical Distributors (NACD) pulled no punches.

"I think we are looking at what will be the most antibusiness federal government in many years," said Chris Jahn, president of the NACD.

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By: Joe Kamalick
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