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Washington Outlook on Politics for 2014 -Congress’ Response to RFS-

Washington Outlook on Politics for 2014 -Congress’ Response to RFS-. PRX Annual Seminar, March 11-12, 2014 Kendell W. Keith, TRC Consulting. Snapshot of 2014 Politics. 2014 Mid-term Elections Will Dominate Congress and the President Don’t expect enactment of many bills

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Washington Outlook on Politics for 2014 -Congress’ Response to RFS-

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  1. Washington Outlook on Politics for 2014-Congress’ Response to RFS- PRX Annual Seminar, March 11-12, 2014 Kendell W. Keith, TRC Consulting

  2. Snapshot of 2014 Politics • 2014 Mid-term Elections Will Dominate Congress and the President • Don’t expect enactment of many bills • Legislative defenses will be dominant • Decline in D.C. lobby income; REALLY? • Future of RFS & Farm Bill Redux

  3. Energy Policy Act of 2005 • Energy Security through greater production • Encouraged biofuels, nuclear, fossil, geo, etc • Most negative votes came from Democrats • Energy Independence and Security Act 2007 • Biofuels expansion and energy conservation • Most negative votes came from Republicans Retracing the Legislative Steps to the RFS

  4. EPA’s Management of RFS

  5. EPA’s Management of RFS Why does EPA behave this way? Answer: They do what they want to do (or are told to do by W. House). Their lawyers find the legal authority.

  6. White House OMB/OIRA Congress Private Sector Industry Other Federal Agencies EPA Congress and Private Sector Input on Federal Decisions

  7. Does EPA fear lawsuit threats? Not Much • Do trade organizations hurt relations with agencies by suing? Modest Risk • Why file suit if “victory” is a long shot? Send a message to agency; or favorably tweak decision Lawsuits Over Final Rule: Q/A

  8. Congress needs to “do something” to appeal to voters butdelays benefit Republicans • Republicans: Avoid blame for delays! • President: Declining polls; Need Econ Growth • President: Save Obamacare; Avoid full implementation 2014 Election Will Affect Behavior

  9. 2014 Elections: Senate and House U.S. Senate and House Majorities, 2014 Seat Changes toRepubDemOtherSwitch Majority House 231 200 417 Senate 45 53 26 *Democrats have 21 Senate seats at risk; Republicans have 14 Senate seats at risk.

  10. Net Pos/Neg President Obama Job Approval 2009-2013

  11. Net Positive or Negative , Average of Major Polls (RCP)* Peak forPeakFeb 2014Last YearLast 5 Yrs USA Going Right Direction? -34% -10% +1% Congressional Approval -69% -50% -14% President Job Approval -8% +12% +41% Pres. Approval—Economy -16% *Real Clear Politics Polls: Down Sharply for Congress and the President

  12. 2014 Senate Election Map---35 Seats are Up for Grabs • Republicans need to add 6 seats for majority • 5 Dems retiring: MI, MT, IA, SD, WV • Dems running for re-election in states won by Romney: AK, AR, LA, NC • Republican Leader McConnell in trouble?

  13. Immigration Reform • Trade Promotion Authority • Tax Bill or Tax Extender Package • Transportation Bill (MAP 21 expires; fuel tax change?) • Income Inequality Issues • WRDA Bill Conferenced • How much will President Obama use Executive Authority? 2014 Congress: Don’t Expect Many Bills to Pass

  14. 2014: Minimal Risk • 2015-2016: Risk Elevates with Republican Majority in Senate • 2017-forward: Who knows? But risk likely increasing over time Timing of Risk for RFS Change

  15. Bipartisan Policy Center reform recommendation, Fall 2014 Deep U.S. recession Any global conflict affecting energy trade Conservative groups (AFP, Heritage) push for no “mandates” Another significant U.S. drought Parallel price escalation for RINs and gasoline Financial success of the biofuels sector? Political Momentum Changers for Possible RFS Amendments

  16. Pro (biofuels, crop production) $38m Anti (oil, livestock, food)* $84m *Does not include natural gas industry Political Expenditures,2011-12Pro-RFS vs Anti-RFS

  17. Established interests in Washington are for Defense, to protect investments. Many ways to kill bills: filibuster, Senate “holds”, open rules, procedural, leadership doesn’t permit floor votes. Legislative “stoppers”: powerful people willing to spend political chits (e.g.: Jamie Whitten, Robert Byrd). Legislative Defenses are Powerful in Washington, D.C.

  18. RFS: Farm Bill:______ Increase demand, Raise price of grain, Raise price of grain, farm income, conservation Energy security Other supporters: carbon Other supporters: reduction, renewables, food subsidy advocates sustainability Can financial success Can financial success create political risk? create political risk? Is RFS an Environmental Law or an Ag Law?

  19. “Top-Down” politics weakens Congressional committees and makes politics more difficult. • Farm Bill became a political pawn in leadership battles; Will the same problem confront the RFS? • Who are the legislative stoppers for RFS? • Is promotion of mankind’s contribution to global warming in the long-term interest of U.S. ag? • Is there a “sustainable” path for biofuels in DC politics or in commercial markets? Political Challenges Ahead

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