Energy and Regulatory Roadblocks
Posted July 21, 2016
Reducing government regulation found its way into a number of the speeches at the Republican Convention in Cleveland -- an issue that's especially important to the future of America’s energy renaissance.
Along with cutting government red tape in leasing and permitting of energy projects, establishing a common-sense approach to energy regulation will help encourage the private investment and innovation that are driving the surge in domestic oil and natural gas production.
More on that below. First, remember that as the U.S. continues to lead the world in oil and gas production, we’ve seen economic benefits, cost savings for consumers, lower crude oil imports that have helped make America more energy secure and carbon emissions reductions that lead the globe.
Indeed, the U.S. Energy Information Administration says that last year natural gas use increased more than any other energy source, accounting for 29 percent of total primary consumption:
That’s a big deal. As mentioned above, abundant, affordable natural gas is a major reason for reduced household energy costs, lowering Americans’ overall cost of living. Increased use of natural gas also is playing a significant role in power generation. Below, we see increased natural gas production and an increased role in the power sector since 2005 – even as methane emissions from natural gas systems declined.
We say all of this to underscore the importance of choosing the right regulatory and oversight policies, because the wrong approaches could needlessly hinder safe energy development.
Take access to oil and natural gas reserves. Industry is terrific at finding oil and natural gas where it has the opportunity to look for it. Thus, a new federal offshore leasing program that’s currently being assembled should be as robust and forward-looking as possible, not a unilateral brake applied to exploration and development. At the same time, federal permitting processes for drilling wells and building infrastructure need to be more efficient and predictable so that reasonable investment decisions can be made. For example, needed natural gas infrastructure in New England faces regulatory and process hurdles, and the lack of sufficient natural gas supply during winter months is penalizing the region’s residential and business consumers. Stanley Chapman III, general manager for U.S. natural gas pipelines for TransCanada, at a GOP convention-related energy and jobs forum in Cleveland:
“Natural gas is on the forefront of leading economic growth, lowering energy costs for consumers and driving energy independence in the United States. Today, to stay on this path, what we would ask of our legislators … is that we create and maintain a regulatory climate that provides for a stable, predictable regulation policy at all levels of government that allows for timely review and approval of construction of new energy infrastructure in a responsible manner.”
At the same event API President and CEO Jack Gerard said the oil and natural gas industry today faces more than 100 pending regulations. U.S. Rep. Bill Johnson of Ohio:
“[T]he policies and the rules coming out of the EPA are not only irresponsible, they’re un-American. … Big government is squeezing the lifeblood out of businesses. … [G]overnment regulations are coming out at a rate of 10 per day. … It costs almost $2 trillion out of our economy. It’s the cost of a permission slip to do business in America. It doesn’t produce a product, it doesn’t hire an employee, it doesn’t build a building. It is like going to the movie theater, literally, buying a ticket, you get inside you don’t popcorn, you don’t get the Diet Coke and the projector doesn’t work.”
Duplicative and unnecessary regulatory initiatives include trying to add new rules on methane emissions from energy production – despite EPA data showing that since 2005, thanks to reduced emissions completion technology used by industry, emissions from hydraulic fracturing have declined more than 80 percent.
Similarly, while the U.S. continues to enjoy cleaner and cleaner air – EPA data show that aggregation national emissions of six common air pollutants have fallen an average of 63 percent since 1980 – the administration’s push for more stringent air quality standards could put at risk future energy development and general economic growth. From API’s energy issues blueprint crafted for the two political parties’ platform committees:
Many municipalities need more time to implement current national ambient air quality standards (NAAQS), and yet the agency continues its heedless rush to lower them further for little or no improvement to public health. For example, unnecessary revisions to the ozone standard could significantly chill economic investment and activity across the nation. Businesses of all sizes could be forced to navigate additional layers of bureaucracy and red tape to satisfy added permitting requirements. This could even prevent communities from improving aging infrastructure such as highways or waste treatment facilities. Communities and businesses must be allowed to continue the progress they have made without the uncertainty and unnecessary cost for all Americans created by shifting standards to levels that achieve no demonstrable health benefit.
“America needs a true all-of-the-above energy policy. We need everything. But we also shouldn’t penalize or take punitive public policy approaches to some forms of energy … because it hurts the American people.”
About The Author
Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Previously, Mark was a reporter, copy editor and sports editor at an assortment of newspapers. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela have two grown children and six grandchildren.
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