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Sean Hackbarth An oil truck takes a load back to town in McKenzie County west of Watford City, North Dakota.An oil truck takes a load back to town in McKenzie County west of Watford City, North Dakota.Photographer: Tim Evanson/Flickr. Licensed under a Creative Commons Attribution-ShareAlike 2.0 Generic license.


This Bloomberg story shows that to sustain America’s energy boom, we need to ensure we’re investing enough in our roads:

With the U.S. projected to be energy self-sufficient by 2030, according to BP, crumbling highways may threaten billions of dollars of investment in the oil patch. Because more wells are being drilled using hydraulic fracturing, there’s greater need for truckloads of water, sand and chemicals, as well as steel structures used in the process in fields often miles from major roads.

“If you drive a cattle truck one or two times a year, you’re not affecting that road very much, but the first day you drive a 175,000-pound substructure of a drilling rig up that road you begin to destroy it,” Daryl Fowler, the county judge in DeWitt, Texas, said by phone May 20. “You’re looking at $2 billion of capital investment in our county alone that will be thwarted or curtailed completely if the road system is abandoned and they can’t get their product to market.”

DeWitt County is in southeast Texas, about halfway between San Antonio and the Gulf of Mexico, and in the heart of the Eagle Ford shale formation. About 87,000 barrels of oil a day were extracted within its borders last year, more than in 39 states and all but five other counties in Texas.

In North Dakota, where record-amounts of oil are being produced, there are similar highway concerns:

In North Dakota, nice weather may cause the biggest road problems. As the freezing winter thaws into spring, soil softens beneath roads and the state highway department restricts truck loads. The limits typically last from March through May or June, and for the past five years they’ve stayed on some highways in the Bakken area year-round.

Road issues, bad weather and exhausted wells have hampered crude production growth in North Dakota. Oil output from the state’s portion of the Bakken shale grew 24,000 barrels a day between December and April after growing 166,000 barrels a day from June through November last year.

Adequate transportation investment is critical. However, the Highway Trust Fund will soon become insolvent and throw state highway construction projects into chaos.

As Congress works to find short- and long-term solutions to the fund’s shortfall, here’s a reminder that a reliable transportation system is critical for every sector of the economy, including energy.

Read this explainer to learn more about the Highway Trust Fund.

Follow Sean Hackbarth on Twitter at @seanhackbarth and the U.S. Chamber at @uschamber.

Matt Letourneau  Andrew Harrer/Bloomberg.Environmental Protection Agency headquarters in Washington, DC. Photographer: Photographer: Andrew Harrer/Bloomberg.


One of the biggest shortcomings of the public discussion surrounding EPA’s proposed power plant rules is the complete lack of context given to the topic.   The arguments in favor of the rule are often centered around addressing the impacts of climate change, even though EPA’s proposed rules will have virtually no impact on the issue

So let’s put aside all of the other issues and spend a minute examining the actual effectiveness of what EPA is proposing.  EPA estimates that as a result of its rule on existing power plants, carbon emissions in 2030 would be reduced by 555 million metric tons below current projections.  Sounds like a lot, and indeed it represents about 10 percent of U.S. emissions.

The problem is that the climate is a global issue, not just a U.S. one.   The U.S. currently accounts for about 18% of global emissions, while non-U.S. global emissions have jumped about 22% and are projected to increase an additional by 41% by 2030.

So what does that mean?  It means that the reduction in emissions from EPA’s rule would actually only decrease global emissions by 1.3%.  Based on projections from the U.S. Department of Energy, the amount of carbon dioxide emissions that will be reduced from EPA’s power plant rule is equivalent to just 13.5 days of Chinese emissions in 2030!

Perhaps that’s why EPA Administrator Gina McCarthy admitted in a hearing last year that regulations are designed instead to “prompt and leverage international discussions and action.”

In other words—on their own, EPA’s incredibly complex, far-reaching and expensive regulations will have no impact on their actual underlying purpose.  The sentiment has also been acknowledged by Secretary of State John Kerry, who said:

[T]he United States cannot solve this problem or foot the bill alone….if we eliminated all of our domestic greenhouse gas emissions – guess what? That still wouldn’t be enough to counter the carbon pollution coming from the rest of the world. Because today, if even one or two economies neglects to respond to this threat, it can counter, erase all of the good work that the rest of the world has done. When I say we need a global solution, I mean we need a global solution.

The problem with that approach is that EPA’s proposed regulations, which will raise electricity rates and cost the economy billions—are not predicated upon any sort of international agreement or commitment to reduce emissions. The Obama Administration is set on implementing the rules regardless of the outcome of international negotiations.  And to date, China, India and other major emitters have shown no interest in reducing their emissions appreciably—even after “leadership” shown by Western nations, which have made strides.

That kind of strategy may allow the Administration to claim that its “doing something” about climate change, but it accomplishes nothing else except harm to the U.S. economy.

Sean Hackbarth  Scott Dalton/Bloomberg.A worker walks past pipe ready to be used to construct the Keystone XL pipeline. Photographer: Photographer: Scott Dalton/Bloomberg.


"If there is no pipeline, there is no future. End of conversation.”

Denny Hogan of Circle, Montana told NBC News’ Tony Dokoupil the start reality of this small rural town.

The pipeline is the Keystone XL, which will transport oil sands crude from Alberta along with Bakken crude oil to Nebraska then on to Gulf Coast refineries.

Circle’s economy used to rely on agriculture, but times have changed:

Since the 1960s, Circle has lost half of its population to moving vans and the mortuary, and Main Street looks like it’s missing a few teeth. From certain angles and when the light is right, the four-block thoroughfare gives off that old, mellow glow. But more often it feels as desolate and lonely as the suburbs on a weekday afternoon. The movie theater is closed. The bowling alley has no lanes. In the center of town, the Gladstone Hotel is a 99-year-old historical landmark with weeds growing through the floor.

People in Circle and surrounding McCone County wait with the rest of us for President Obama to approve the pipeline. For them, the pipeline is more than oil traveling south below their feet. Jobs and tax revenue generated by the pipeline mean hope for the community:

About 1,500 of those would [be] pipeline-related, mostly in construction, and probably lasting only a year or two. But another 2,200 jobs are expected to grow from those, giving McCone County the equivalent of several years of paydays and clanging cash registers in a single dose.

It’s expected that McCone County will get $18 million annually in property taxes.

Judging by the experience of Oklahoma and Texas where the southern leg of the Keystone XL pipeline--the Gulf Coast Project--was built, rural towns like Circle should be optimistic. A report from Southern Methodist University's Maguire Energy Institute found that construction of the Gulf Coast Project resulted in

Over $5.7 billion in new economic activity. Over 42,000 person years of new employment. Over $217 million in additional state and local taxes.

The U.S. Chamber of Commerce’s Institute for 21st Century Energy along with 43 associations sent a letter to Secretary John Kerry asking the State Department to finish its National Interest Determination (NID) process and approve the pipeline:

The Final Environmental Impact Statement released by the Department earlier this year found over 42,000 jobs would be created and $3.4 billion in additional revenue to GDP would result in the building of this project, yet we continue to wait. Our labor community continues to face a stubborn unemployment rate that by far outpaces the national average, yet we continue to wait. Over 70 percent of Americans, including a majority of both Republicans and Democrats, support the building of this project and yet we continue to wait. The facts and benefits are clear; this project is in our national interest.

The letter goes on to state that the Obama administration’s latest excuse for delay, a Nebraska state court decision under appeal is just that, an excuse:

There is no reason for the president to delay issuing the cross-border permit due to a state appellate court proceeding. Keystone XL enjoys the support of the Nebraska governor and policymakers. Nebraska conducted a thorough route assessment. Furthermore, the State Department has found in all five environmental reviews that the project would not significantly impact the environment, including the various route options through Nebraska. The issue of our national interest will not be affected or changed by the outcome of the Nebraska decision.

It’s been over five years since Keystone XL’s first permit application. Out-of-work construction workers are waiting, manufacturers are waiting, young people are waiting, and communities are waiting. It’s been long enough. This is the most-studied pipeline in U.S. history. It’s time for the President to end the delays and approve the Keystone XL pipeline. Towns like Circle need to know where its future lies.

Follow Sean Hackbarth on Twitter at @seanhackbarth and the U.S. Chamber at @uschamber.

Sean Hackbarth EPA Administrator Gina McCarthyEPA Administrator Gina McCarthy. Photographer: Andrew Harrer/Bloomberg.


Last year, when EPA held public hearings about potential carbon regulations for existing power plants it avoided states where coal use is most-important.

After releasing its proposed carbon regulations you would have thought the agency had learned its lesson on where it would hold public hearings.

Nope:

Facing higher-than-expected response to its proposed carbon dioxide regulations for power plants, the Environmental Protection Agency is doubling the number of public hearings it will host to gather input on the rules.

The EPA announced in a notice due to be published Thursday in the Federal Register it has added a day to the hearings it scheduled in Atlanta, Denver, Pittsburgh and Washington, D.C. at the end of July.

While more time for public hearings is welcome, EPA again avoids areas of the country that will be heavily affected by EPA’s proposed regulations. For instance, once again, no hearings are scheduled in any of the ten states most reliant on coal for electricity, such as Wyoming (88%), West Virginia (95%), or Missouri (83%). The agency is also avoiding many other states that will be hit extremely hard by the rules, such as Arizona (EPA-proposed emissions rate reduction of 52%), Arkansas (44%), Minnesota (41%), Louisiana (39%), Florida (38%). Those living in each of those states will have to travel hundreds of miles for an opportunity to voice their concerns.

And like last year, it appears that this is inconsistent with EPA’s policy of where it holds public hearings:

When the subject of a public hearing, meeting or other information exchange process relates to conditions or facilities in a specific geographic area, EPA should hold the public hearing or meeting in that general geographic area.

EPA’s proposed carbon regulations may be unpopular in many states, but it’s critical that EPA make sure those states most-affected are heard. As a first step, EPA Administrator Gina McCarthy should follow through on her commitment to ensure that the rulemaking process be “an absolute collaboration between the federal and state government…a partnership if there ever was one” by scheduling additional public hearings that enable states, citizens, and other interested parties an opportunity to provide feedback on the potential effects of its regulatory agenda.

Follow Sean Hackbarth on Twitter at @seanhackbarth and the U.S. Chamber at @uschamber.

Sean Hackbarth Oil rigs off Alabama's coast.Oil rigs off Alabama's coast.Photographer: kris krüg/Flickr. Licensed under a Creative Commons Attribution-ShareAlike 2.0 Generic license.

We’re witnessing a strange dichotomy during America’s energy boom. While oil and natural gas production has been increasing on private and state lands, it’s been falling on federal lands, as these two charts from the Institute for 21st Century Energy show. 

Between 2009 and 2013, oil production on private and state lands has increased by 61% while decreasing by 6% on federal lands. 

 Oil production on federal lands is declining.Chart: Oil production on federal lands is declining.

In that same time, natural gas production on private and state lands has increased by 33% but decreased by 28% on federal lands.

 Natural gas production on federal lands is declining.Chart: Natural gas production on federal lands is declining.

This Congressional Research Service report gets into the details.

Much of the blame stems from permitting delays by the Bureau of Land Management (BLM).  A Department of Interior Inspector General report finds that while state regulators take only 80 days to approve permits, their federal counterparts at BLM take about 7.5 months. What's more BLM’s permitting process also involves a lot of uncertainty:

We found that neither BLM nor the operator can predict when the permit will be approved. Target dates for completion of individual [applications for permits to drill] are rarely set and enforced, and consequently, the review may continue indefinitely.

This “adversely affects developing the Nation’s domestic energy resources," the report states.

Federal authorities can reverse this trend by improving the permitting process for federal lands and opening more offshore areas to energy exploration.

Read the Institute for 21st Century Energy’s Energy Works for US for more policy recommendations to unleash America’s energy abundance. 

Follow Sean Hackbarth on Twitter at @seanhackbarth and the U.S. Chamber at @uschamber.

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