US Chamber of Commerce Blog
Europe has so many historical and cultural wonders that even the reddest of red-blooded Americans can find something European to be envious of. After all, it was Europeans who gave us Led Zeppelin, pizza, and beer and personally, I think it’s high time we consider adopting the siesta as a national policy.
But what we don’t need to migrate across the pond are European energy prices.
Europe grew to be a manufacturing juggernaut in the 20th century utilizing technical acumen as well as the energy resources it had available. But manufacturing consumes massive quantities of energy, and while the continent was blessed with several Wonders of the World, it was not bestowed the greatest of energy resources, forcing it to increasingly rely on imports. Additionally, over the last two decades, the European Union and many of its members have stumbled down an experimental path of making energy less accessible and more expensive. By making energy use more expensive, these policies have strained Europe’s once mighty manufacturing sector.
Meanwhile, the energy revolution in the U.S. over the last decade has brought us some of the lowest energy prices in the world, and a subsequent manufacturing renaissance. We’ve already witnessed tens of billions of dollars invested in U.S. manufacturing with more on the way. But --and this is a big but--, this isn’t a fate accompli. In fact, it has become vogue in certain extremist circles for politicians and the special interests that support them to champion EU energy policies and prices and wish them upon America.
The latest installment in our Energy Accountability Series asks the question, What If…The United States Was Forced to Pay EU Energy Prices? In the spirit of Halloween, our analysis found the answer to be positively ghoulish. Importing EU energy prices to America would cost our economy about $700 billion and almost 8 million jobs. From a consumer standpoint, every household would be shelling out $4,800 more per year.
Some states in particular would be hit hard. With its high level of fixed income residents, Florida would shed almost $30 billion from its economy. Other states blessed with robust manufacturing sectors would really be hobbled. Ohio would lose almost 190,000 jobs and Michigan about 160,000. Michigan would shed $12 billion from its economy, Illinois more than $17 billion and Ohio almost $15 billion. Our analysis found major contractions in industries ranging from poultry to paper to food manufacturing.
The bottom line is EU energy prices would be disastrous. So let’s keep importing the scrumptious chocolate—but leave the bad policy across the Atlantic.ei_eu_energy_prices_states_900px.jpg What if the U.S. was forced to pay European Union energy prices? States pay the price.Source: Institute for 21st Century Energy.
Note: This originally appeared on the Institute for 21st Century Energy's blog.
Inspired by aggressive (and sometimes violent) protests in North Dakota over construction of the Dakota Access Pipeline, anti-energy, “Keep it in the ground” radicals launched a coordinated attack on five oil pipelines:
Activists in four states were arrested after they cut padlocks and chains and entered remote flow stations to turn off valves in an attempt to stop crude moving through lines that carry as much as 15 percent of daily U.S. oil consumption. The group posted videos online showing the early morning raids.
Protest group Climate Direct Action said the move was in support of the Standing Rock Sioux Tribe, which has protested the construction of a separate $3.7 billion pipeline carrying oil from North Dakota to the U.S. Gulf Coast over fears of potential damage to sacred land and water supplies.
It’s bad enough to oppose using oil and natural gas to power our economy, but cutting through fences, trampling on private property, and putting workers and citizens in danger is unacceptable.
What's more, tampering with high-pressure oil pipelines could damage the environment saboteurs claim they want to protect:
Several pipeline operators and safety experts said shutting off valves was extremely dangerous and that activists underestimated the risks.
Pipelines can be heavily pressurized depending on length and altitude variation, and shutting off a valve could cause ruptures that are "catastrophic" for the environment, Paul Tullis of Tullis Engineering Consultants said.
"It's like a freight train," he said of the momentum with which the oil moves. "If these people are hydraulic engineers, they might be able to do this safely."
Activists often do not fully know what they are doing, even if they think they do, Tullis said.
Protesters said they spent months studying how to safely shut the valves. The ability for them to access the proprietary information necessary to shut a line safely was questioned by experts.
Either way, pipeline specialists said it was lucky there were no leaks on Tuesday. Once the valves are shut, pressure can quickly build up inside pipelines that operate under as much as 1,000 pounds (450 kg) per square inch.
Protesters were taking a chance that a weak spot in a line would not explode, and that employees in operations hubs would spring into action after hearing alarms.
These attacks look similar to an attack on a Canadian oil pipeline in December 2015. To get a sense of how dangerous this was, here’s a portion of the eyewitness account of that attack [emphasis mine]:
6:45 a.m. Jean Leger calls Enbridge emergency number and tells them that he is closing the valve. This is filmed by a co-conspirator journalist. The whole valve and the ground starts vibrating. To avoid a potential explosion, the valve is opened slightly. The ground continues to vibrate, and sound of pressurized flow is audible.
Approx. 9:00 – Activists unlock and the valve is firmly closed. The vibration reaches a fever pitch, but once the valve is wrenched as far as humanly possible to the right, the vibration stops altogether. Activists lock back onto the valve.
At one point when law enforcement was “attempting to handcuff one of the activists locked to the valve, another valve that is part of the infrastructure sprays oils all over the place.”
Note the irony of an oil spill caused by people violently opposed to oil. This is what happens when people reading stuff on the internet think they can safely shut off a pipeline.
At this rate, someone will get hurt.
"On the wrong pipeline, in the wrong place (actions like this) could kill people,” pipeline expert, Richard Kuprewicz, cautioned Reuters.
What's more, these attacks (under the guise of protests) ignores the importance of pipelines and other pieces of energy infrastructure to a modern economy. We need to be able to move energy from where it’s produced to where families and businesses use it, as Matt Koch of the U.S. Chamber's Institute for 21st Century Energy explains:
Many areas in the U.S. are already missing out on the full benefits of our energy revolution because it has been difficult to move our energy from where it is produced to where it is needed.
The fierce resistance and abuse of the regulatory processes by those who want to “keep it in the ground” is incredibly shortsighted.
However, environmentalists continue to battle pipeline and transmission line construction, recently claiming victory as projects that would bring gas from Pennsylvania to the northeast (Constitution Pipeline; Northeast Energy Direct Pipeline) were abandoned after fierce opposition from environmentalists and long regulatory delays. Now, protests have become violent while trying to delay construction of the important Dakota Access oil pipeline project. Of course, there is also the infamous denial of Keystone XL by the Obama Administration.
America is blessed with tremendous supplies of all forms of energy, the ingenuity and ability to develop technology to utilize it more cleanly and efficiently, and the means to transport it safely and with little risk as possible. Still, if pipelines and transmission lines can’t get built to move energy supplies to where they are needed, disparities will continue to grow between regions - and all the benefits to consumers, communities, and our economy will be lost.
I'd add that without the ability to effectively transport energy, our economy will grind to a halt—which is what some of extremists want.
Just like the Dakota Access Pipeline protestors, the “Keep it in the ground” folks who took part in these attacks have shown that it's not about peaceful, reasonable debate or adequate public consultation; it’s about dictating the energy policy changes they demand by any means necessary.
Does America need an "All of the Above" energy strategy? Find out here. This Chamber Explainer will get you up to speed.
One point on this Manufacturing Day 2016 that shouldn’t be missed is how American’s fracking boom is helping American manufacturing.
To be competitive in international markets, manufacturers need access not only to affordable energy but to the raw materials that become the products we use daily. By unlocking immense amounts of natural gas, fracking has been a catalyst for new, job-creating manufacturing investment.acc_shalegas_cracker_endproducts.png Natural gas is a feedstock for the chemical industry.Natural gas is a main feedstock for chemical plants.Source: American Chemistry Council.
Chemical manufacturers have gained from the shale boom as illustrated in this FuelFix.com story on a new petrochemical plant being built near Houston, Texas that will produce ethylene, a plastics feedstock, and create jobs [emphasis mine]:
The idea for the U.S. project began in 2010, after Chevron Phillips had focused most of its growth in the Middle East with major projects in Qatar and Saudi Arabia, said Ron Corn, Chevron Phillips senior vice president of projects and supply chain,
“It was quite radical at the time,” Corn said of building massive petrochemical projects in Texas. “These are big, big projects — very complex.”
The effort is the continuation of the petrochemical boom primarily along the Gulf Coast to take advantage of cheap and ample ethane derived from natural gas through the ongoing shale revolution. The American Chemistry Council, a chemical industry trade group, estimates that more than 250 petrochemical projects are under construction or planned across the country through 2023, and they will create about 70,000 jobs. The combined cost is about $160 billion, including about $50 billion in Texas.
The growing demand for plastics is mostly coming in Asia, primarily China, but also India and Indonesia.
“They’re basically entering the consumer class,” Corn said, and demanding products like single-serve shampoo packets for the first time.
We see similar chemical investments in the Northeast where abundant natural gas from the Utica and Marcellus Shales are being developed:
Shell Chemical Appalachia’s long-awaited decision on a multibillion-dollar ethane cracker arrived early Tuesday and it’s a go. The company plans to build the petrochemical complex on the site of the former Horsehead zinc smelter in Potter and Center townships, Beaver County [northwest of Pittsburgh].
The site will house the cracker; three units that will convert ethylene into polyethylene pellets; a natural gas-fired power plant; a loading dock; and a wastewater plant. Main construction will start in about 18 months, with commercial production expected to begin early in the next decade, the company said in a statement.
Shell has said constructing the plant would employ 6,000 workers, giving way to 600 permanent operational positions when it opens. Shell had previously put the number of permanent jobs at 400 or 500, but spokesman Ray Fisher said Tuesday that those were just “speculation.”
Along with plastics, abundant natural gas is a boon for fertilizer makers, according to a Brookings Institution report:
[T]hey find that gas-intensive manufacturing has indeed experienced an expansion of activity as a result of the shale boom, with the most pronounced effect in fertilizer manufacturing – the most gas-intensive sector of all.
Being the world’s number one natural gas producer has it benefits. Policies that encourage and don’t hinder continued domestic energy development will be a hand up for American manufacturers.
Confused About Fracking? Learn more. Chamber Explainers will get you up to speed.