President Obama's economic stimulus package, passed by the US House of Representatives on Wednesday, will likely result in substantial improvements in US energy infrastructure, according to most of the 340 respondents to a poll of Platts webinar participants representing the energy industry, government, and energy-focused consulting, law firms and media. The poll was taken just hours before Wednesday's House vote and days before the Senate is expected to act on a similar bill.
"The response suggests the enormous amounts of money and tax relief provided for energy projects in both the House and Senate bills, including electricity transmission, are creating high expectations," said Bill Loveless, Platts editorial director for US energy policy and a speaker at Wednesday's Platts webinar entitled US Energy Policy: President Obama's 1st 100 Days during which the poll was taken. "The House bill offers more than $60 billion for energy, including direct spending and tax benefits, while the Senate legislation provides more than $85 billion."
In a two-question poll, energy industry participants and observers were asked, "What level of confidence do you have that the stimulus package will lead to marked improvements in energy infrastructure?" As shown below, 192 respondents said they were "somewhat" to "very" confident. Thirty-three percent expressed more tempered optimism, whereas 6 percent or 18 respondents expressed pessimism.
Poll respondents were attendees of a policy and outlook webinar, which featured presentations and discussions by Bill Loveless, Joel Kirkland, associate editor of Platts Gas Daily and Inside FERC, and Alexander Duncan, associate editor Platts Inside Energy.
How will this money be spent? "Most of it will be distributed through competitive grants, loan guarantees and other forms of aid by the Energy Department, an agency whose primary obligation throughout its 30-year history has been maintaining the US nuclear weapons program and cleaning up the mess left behind at the weapons facilities, " said Loveless during the webinar. "Suddenly, the new energy secretary, Steven Chu, will see the Department of Energy's spending on energy programs -- now about $8 billion or so -- rise by tens of billions of dollars, just from the economic stimulus bill."
The second poll question, "Assuming some backlash from the oversight failures pegged to the financial meltdown, to what extent do you think federal regulation of energy industries and markets will intensify?" was met with 252 expressions of likelihood.
"More than 70% of our respondents said they expect regulators to flex some muscle to make sure energy markets don't suffer the same breakdowns we saw in financial markets," Loveless said. "Given complaints in Congress last year over futures trading, and continuing demands for reforms, this reaction helps show the expectations for regulatory actions that the public has."
In discussing a fix for the economy, Obama has repeatedly talked about the need to usher in sweeping regulatory reforms, noted Kirkland during the webinar. "Much of that will focus on the banking and housing sectors, but a component of that will focus on bringing off-exchange financial derivatives, particularly the credit default swaps that helped collapse the nation's financial system, under the regulatory tent. If derivatives of all kinds are swept under that tent, it is hard to imagine that financial products tied to oil and gas contracts won't also find themselves under increased scrutiny."
Platts Poll Results
Q: What level of confidence do you have that the stimulus package will lead to marked improvements in energy infrastructure?
Response Percent Total Responses
Very Confident 11.29% 35
Somewhat Confident 50.65% 157
Not Very Confident 32.26% 100
Not At All 5.81% 18
Q: Assuming some backlash from the oversight failures pegged to the financial meltdown, to what extent do you think federal regulation of energy industries and markets will intensify?
Response Percent Total Responses
Fully Expect 30.7% 105
Think There's a Good Chance 42.98% 147
Not Sure 19.01% 65
Do Not Expect 7.31% 25For more on the Platts webinar, which focused on the likely impact that the Obama administration and the new Congress will have on the nation's energy and environmental agenda, likely energy investments under the new economic stimulus plan, and regulation of energy infrastructure and commodities