PESA members know that the end of the year brings important deadlines. The same is true in Washington; however, partisan (and intra-party) squabbles have made the consequences of missing a deadline seemingly the only thing that can force legislators to act.
Below are the remaining “must-pass” items on Congress’ to-do list for 2015. While Congress must take some action on these issues in the coming weeks, the political difficulty presented by each means that arriving at a solution for each of them will certainly not follow the textbook path for a bill becoming a law:
- October 29 – must pass a highway bill or extension; if not, highway spending authority expires. There is a significant funding need for the highway program that Congress has found difficult to meet;
- November 5 – must pass an increase in the “debt limit;” if not, significant financial impacts. Of all of these, this is the one that could have the greatest negative impact for the U.S., but it also highlights significant gaps between Republicans and Democrats (and Republicans and Republicans); and
- December 11 – must pass an appropriations bill or an extension; if not, the government will shut down. Democrats are pressuring Republicans into agreeing to a budget deal that would increase spending, and Republicans are far from unified.
Add on to this the recently announced Trans-Pacific Partnership trade deal, a defense policy bill, tax changes (including provisions important to the service and supply sector such as Section 179 expensing, bonus depreciation, and the research and development tax credit), and a push to reauthorize the Export-Import Bank, and the to-do list is pretty long.
Yet at first glance, beyond those tax items above and a desire to avoid the additional uncertainty that failing to act would create, it does not seem that the oilfield service and supply sector has much of a stake in Congress’ to-do list. But a deeper look shows that opportunities exist.
When Congress gets to the end of the year and is working on big, must-pass legislative items, the pressure of time and the need to corral votes often provides opportunities to craft deals that add other legislative provisions to the larger bill. With its passage of a stand-alone bill to end our outdated prohibition on exporting U.S. crude oil on October 9, the U.S. House keyed up an important issue to PESA members and the entire energy industry for the end of the year legislative rush.
How might this work out? Here are a few potential scenarios:
- The need to raise the debt limit will likely be the major moving piece over the next few weeks. Look for a push to tie this deadline to the December 11 government funding deadline. Either way, it is not likely that either of these issues will be solved until the smell of Christmas Trees fills the air on Capitol Hill. Given the importance of coming to an agreement, other issues will likely join the conversation. Crude exports, while not part of the core discussion could easily become part of the debate, especially if GOP votes are coming up short.
- The highway bill is most likely to find a legislating partner with something tax related, both to find the $100 billion in new money needed to fully fund six years of road and bridge projects and to help the bill get support from lawmakers. Given the GOP’s history of wanting to link the highway program and domestic energy production, could the crude export bill find a home here?
- Finally, all of these issues could get merged together into one big bill at the end of the year. One up or down vote on all of these must do, but politically challenging, votes might be the only way for a divided Washington to arrive at a solution. Again, that solution could include crude exports or other important but unrelated policy priorities depending upon the vote count.
No matter how the rest of 2015 comes together, the next few months are sure to bring with them the kinds of drama that rival a Shakespearian play. With any luck, the oilfield service and supply sector can leave the play very happy with the performance.