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De Omnibus Dubitandum - Lux Veritas

Tuesday, January 20, 2015

U.S. light dimmed with Obama energy policy

Commentary by Marita Noon, Executive Director, Energy Makes America Great Inc.
January 19, 2015

The unity march, following the brutal attacks in Paris, reminded us all of America’s absence on the global stage.

I wondered: “How has the state of our Union gone from being the shining city on the hill, to a country whose light has dimmed?” I thought about the policies and initiatives President Obama—the leader of the free world—has put in place. I could think of none that have increased our international influence, but many that have minimized it by hurting America economically.

At Tuesday night’s State of the Union Address (SOTU), he will likely tick off a list of accomplishments designed to polish up his legacy and make us feel good, while distracting us from reality—a look-here-don’t-look-there tactic.

Within that list he will likely include, as he did last year, America’s growing energy independence—every president’s goal for the past several decades. He will address how America’s energy abundance has lowered gasoline and heating oil costs for consumers. Both are true—though no thanks to his policies, but rather in spite of them. We probably will not hear that while oil production under President Obama is up 61 percent on state and private lands, it is down 6 percent on the federal lands his policies influence.

Expect the SOTU to tout his environmental bona fides, but not to mention that he has committed the U.S. to extreme cuts in carbon dioxide emissions, while the world’s biggest offenders carry on increasing emissions—business as usual.

“The Indian government has launched a crackdown on Greenpeace and other U.S.-linked environmental groups after intelligence officials accused climate activists of harming the country’s economic security,” the Los Angeles Times reports. The story adds: “groups are being targeted for campaigning against India’s coal-based energy industry, the source of 80% of the country’s domestic power production and a linchpin of the government’s economic development plans.” And: “India rejects arguments by green activists that it must move away from coal energy, saying the alternative would be to keep its citizens in poverty.” India’s government has begun “to chip away at the regulations that domestic and foreign industries claim have stifled investment and economic growth.”

India obviously understands that abundant, available, and affordable energy forms the linchpin of economic growth. While India chips away at regulations, the Obama administration continues to pile them on—first against coal-fueled electricity generation, and now aimed at the oil-and-gas industry. His policies, such as the Clean Power Plan (CPP), and the new methane regulations announced on January 14 (just to name two) will kill jobs and raise energy costs. (Both the CPP and the new methane regulations aim to reduce so-called greenhouse gases that alarmists claim are the drivers of climate change. The CPP: carbon dioxide; the methane regulations: methane that leaks from oil and gas wells.)

The CPP, announced in June, will ultimately cause hundreds of coal-fueled power plants to shut down prematurely. These power plants supply America with reliable and cost-effective energy—and our comparatively low-priced electricity helps gives us a competitive advantage in the global marketplace.

In addition to job losses and higher rates, the CPP poses risks to electricity reliability. In November, the North American Electric Reliability Corporation (NERC) released a review of the CPP which, according to Reuters, states that “such a rapid transition will damage capacity margins, make it harder to maintain aspects of power quality and leave the grid vulnerable to extreme weather.” The review found that due to the planned transition, which would change coal from providing base-load power to a “load-following role,” the CPP “could actually raise emissions”—negating the supposed benefits the CPP claims to create. NERC concluded: the CPP “is pushing too far too fast and does not pay sufficient attention to the question of electricity reliability, pushing up costs and increasing the risk of power failures.”

Karen Lugo, Founding Director of Alliance of Resolute States, told me: “At its core, the Clean Power Plan transfers power over state energy priorities to the federal government and leaves states as mere branch offices. If this is finalized, the states will be subject to the tyranny of federal agency fads like the Social Cost of Carbon index, the pseudo-science that drives the Clean Power Plan.”

Regarding the newly announced methane rules, the Wall Street Journal (WSJ) states: “To regulate new oil and gas sources, the EPA is using the same part of the Clean Air Act it already uses to regulate carbon emissions from power plants.”

The new rules, scheduled to be finalized sometime next year, are “designed to help the administration meet a commitment it made in Beijing in November to reduce greenhouse gas emissions.” However, even the Energy Information Administration admits that, while domestic oil production has nearly doubled and natural-gas production is up by about 50 percent since 2005, “methane emissions from the sector have dropped roughly 15 percent over that period through 2012.” Because methane is a valuable commodity, innovations in the industry have successfully captured it and ongoing improvements will continue the emissions downward trend.

In response to the EPA’s announced methane rules, House Energy and Commerce Committee Chairman Fred Upton (R-MI) and Energy and Power Subcommittee Chairman Ed Whitfield (R-KY) issued the following statement:
“Studies show that while our energy production has significantly increased, methane emissions have continued to decline. This is something that should be celebrated, not bound by new red tape. Our success has been—and should continue to be—rooted in new efficiencies created through technology and innovation, a commitment to continued safety enhancements, and greater permitting certainty. Our goal should be to modernize our energy infrastructure for the 21st century and continue to welcome successes in reducing emissions and delivering new sources of affordable energy to consumers who need it. These should be the priorities that we focus on, not creating new layers of bureaucracy that could smother such promising innovation.”
Others “argue that the administration has created a solution in search of a problem.”

The Washington Times states: Obama is “once again placing himself firmly on the side of environmentalists and opposite the oil-and-gas industry.” It adds: “The announcement also sets up yet another political fight with Congressional Republicans, who, along with many in the energy industry, panned the proposal as another unnecessary federal overreach that will stunt economic growth and hamper fuel production.” USA Today’s reporting includes: “The oil-and-gas industry has objected to the new regulations, saying they would curb what have become record levels of energy production.” Yet, the EPA claims the new rules “wouldn’t hamper the growth of the oil-and-gas industry.”

The WSJ reports: “In addition to directly regulating methane, the EPA plans to expand a rule it imposed on the oil and gas industry in 2012 that focuses on reductions of traditional pollutants” and “the administration left the door open for more expansive regulation later on.”

It is expected that the SOTU will push for an increase in the minimum wage—though I doubt he’ll address the loss of quality jobs in the energy sector, as a result of his policies.

While the oil-and-gas industry sheds jobs as a result of the low price of oil (somewhat a victim of its own success), Obama could announce some initiatives that could help stem the losses. In the SOTU, President Obama could offer his support to Congress’ plans to lift the 4-decade-old oil export ban, which would provide additional customers for U.S. oil and give our allies a friendly source to meet their needs. Likewise, he could call on the Department of Energy to expedite approval of applications for liquefied natural gas export terminals—something a new Senate bill proposes.

The SOTU would be a perfect time to address drilling on federal lands. One of the reasons the oil industry is reeling, is that most of America’s new production is “nonconventional”—meaning that it requires expensive technologies, such as hydraulic fracturing and horizontal drilling to extract. But, easy-to-access, i.e. cheap, oil in off-limits federal lands awaits leasing and development. Opening up some of those sites could transfer production to lower-cost locales—saving jobs and increasing our energy security in the process.

Instead, we’re apt to hear about GM introducing new electric cars—despite the high cost and the public’s resistance. Expect to hear a touting of growing implementation of renewable energy, but not about wind energy projects going bankrupt once the government subsidies dry up.

The list of policies that have plunged America into darkness on the global stage could go on and on. I’ve addressed just a few impacting our energy status and security. Being a bright light in the world requires a strong economy—which, as India knows, needs energy.

I wish to thank Marita for allowing me to publish her work.  The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc. and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). She hosts a weekly radio program: America’s Voice for Energy—which expands on the content of her weekly column.

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