U.S. CHAMBER OF COMMERCE

Energy Blog

Energy Blog

US Chamber of Commerce Blog

Thomas J. Donohue Oil pump

America’s extraordinary supply of natural resources gives us an economic and strategic advantage that few other nations have. For years, however, overregulation and political posturing have prevented us from leveraging these resources to reach our full energy potential. That’s finally changing.

Since assuming office, President Trump has taken important steps toward capitalizing on America’s energy opportunities, including signing an executive order to accelerate the review of the Keystone XL and Dakota Access pipelines. These critical infrastructure projects will create tens of thousands of American jobs, support affordable energy for businesses and families, and generate significant economic growth. Since the order was signed, the Dakota Access pipeline was granted final approval and resumed construction after many months of unnecessary delay.

For other current and future energy infrastructure plans, the president also took much-needed action to streamline permitting and expedite environmental reviews. In the past, numerous other pipeline construction projects got trapped in a web of bureaucratic procedures and reviews, many of which take years to complete. The projects are also attacked with costly and frivolous lawsuits from opponents of energy development. This is unacceptable. We need thorough, but timely, decisions on these projects, which are capital intensive for the companies that spearhead them and crucial to the workers and consumers who benefit from their construction.

Canadian Prime Minister Justin Trudeau also realizes the importance of energy infrastructure. In their meeting last week, President Trump and Prime Minister Trudeau agreed on the need to cooperate on important pipeline development projects. The U.S. Chamber of Commerce applauds their shared commitment to job creation and energy development.

President Trump’s actions and executive orders regarding energy are welcome progress, but more remains to be done. The Chamber will push our leaders to continue prioritizing energy reforms and reverse Obama-era regulations designed to keep our energy in the ground. Our Institute for 21st Century Energy is working with Congress and administration officials to identify opportunities to responsibly develop more of our country’s resources, build energy infrastructure to move it around, and usher in the next generation of energy innovations.

It was Prime Minister Trudeau who said, “There isn’t a country in the world that would find billions of barrels of oil and leave it in the ground while there is a market for it.” Fortunately, our new leaders seem to agree. Our nation is equipped with vast resources—and it’s high time we put them to work on behalf of our businesses, our workers, and our economy. 

Sean Hackbarth Construction of the Dakota Access Pipeline in Iowa.Construction of the Dakota Access Pipeline in Iowa.Photo credit: Carl Wycoff. Licensed under a Creative Commons Attribution 2.0 Generic license.

The drama over the Dakota Access Pipeline could soon come to an end, Bloomberg reports:

The U.S. Army Corps of Engineers said in a court filing it will grant Energy Transfer Partners LP the easement it needs to finish the controversial Dakota Access oil pipeline.

The company needs the easement to complete work under Lake Oahe, following President Donald Trump’s memorandum that advised expediting review of the project. Trump took office promising to favor oil and natural gas developments as well as support new infrastructure, which has included reviving TransCanada Corp.’s Keystone XL pipeline.

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In January, the Department of the Army, withholding the final easement necessary for construction beneath the lake, initiated an Environmental Impact Statement, which Energy Transfer failed to block in court. Energy Transfer has argued it went through the full permitting process and has the necessary approvals.

The project was originally scheduled to be operational by the end of 2016. Now it’s expected to start operating June 1, assuming no new obstacles prevent it, a person familiar with the matter said Feb. 3. Lisa Dillinger, a spokeswoman for Energy Transfer, confirmed that the project would be in service in the second quarter.

The pipeline would provide a new path for transporting North Dakota crude oil to Midwest refineries.

This is a win for jobs, improved energy infrastructure, and the rule of law.

Karen Harbert, president and CEO of the U.S. Chamber’s Institute for 21st Century Energy, was pleased with the news:

Today’s news indicates a positive step forward for the Dakota Access Pipeline. It’s encouraging to see how seriously the Trump administration is taking the need to build energy infrastructure, which will create jobs, improve our security, and keep energy affordable for families and businesses around the country.

While the permitting situation is finally falling into place, clean-up crews are hard at work picking up the hundreds of truckloads of garbage from extreme, anti-energy, “keep it in the ground,” pipeline opponents left at their protest site:

Making a dent in the immense amount of trash being hauled out of the Oceti Sakowin protest camp is being hindered by the weather. All the garbage that was left behind is now frozen into massive chunks of junk.

In a month, all this trash could become toxic.

“Standing Rock Environmental Protection Agency and Dakota Sanitation are working together to try and advert an environmental tragedy,” says Tom Doering, Morton County Emergency Manager.

It’s estimated it will take 250 trucks filled with litter to clear the camp.

[H/t SayAnythingBlog.com’s Rob Port]

Sean Hackbarth A natural gas rig in Wyoming.Source: Devon Energy via Bloomberg.

Congress is rolling back some of the regulatory red tape created by the Obama administration.

Using the Congressional Review Act (CRA), Congress can disapprove of regulations that have been finalized in the last 60 days Congress has been in session. When the resolutions of disapproval are signed by the president, they’re taken off the books.

Early in this session Congress has jumped right in working to relieve some regulatory burdens on businesses.

Stream Rule

The first regulation on its way for repeal is the Interior Department’s stream protection rule. This duplicative regulation harmful to coal mining was finalized six weeks after Election Day. In a key vote letter to House members, the U.S. Chamber explained the rule:

exceeds the Department’s authority, will cause significant economic harm and job losses, and interferes with longstanding and successful state efforts to protect water quality.

In putting together the regulation, the Department acknowledged the rule would have adverse economic impacts as a result of reduced coal production. Yet, the agency may be underestimating the economic impact because it ignored permitting delays and litigation costs. These adverse impacts would increase production costs of U.S. coal relative to foreign competitors and likely reduce U.S. exports.

The U.S. Chamber also signed onto a letter with 30 state and local chambers of commerce asking Congress to repeal the stream protection rule:

It is a one-size-fits-all federal mandate that interferes with the longstanding federal-state balance in overseeing mining operations. It will place massive amounts of coal reserves—and the affordable energy they provide—off limits. The National Mining Association estimates that the SPR would eliminate up to 270,000 jobs, including 80,000 mining jobs.

The negative impacts of the regulation will be felt far beyond the coalfields, extending to railroads, utilities, and the companies that service and support mining communities, from restaurants to hotels to equipment suppliers. The rule will drive up energy costs for families and businesses, and it will reduce state and local tax revenues in areas of the country that have already been devastated in recent years. This means negative impacts to schools, roads, first responders and nearly all state and local government services in affected areas.

After the Senate voted to repeal the regulation, Karen Harbert, president and CEO of the U.S. Chamber’s Institute for 21st Century Energy said:

Today’s vote to block the Obama Administration’s unnecessary and costly stream rule is a victory for common sense and American energy production. This rule interfered with state authorities and would have placed massive amounts of coal resources off limits for production, costing us jobs and higher energy prices.

Resource Extraction

The second regulation sent to President Trump also involves energy.  Last summer, the Securities and Exchange Commission (SEC) finalized a regulation that requires American energy companies to release sensitive and detailed commercial information about foreign energy projects.

In a key vote letter to House members, the U.S. Chamber explained, “Similar rules from SEC have been killed by the courts because SEC violated the free speech protections of the First Amendment.”

The Chamber added, “In its own description of the rule, SEC recognized that the rule would result in a loss of competitive advantage by U.S. companies relative to some foreign firms.”

Methane Emissions

Ten days after Election Day, the Bureau of Land Management finalized a “venting and flaring” regulation to reduce methane emissions from wells on federal and tribal land.

The U.S. Chamber along with state and local chambers support nixing the rule:

Venting and flaring gasses from oil and natural gas wells is vital to manage pressure and maintain safety. While energy companies have every fiscal incentive to minimize venting and flaring, they sometimes must do so due to a lack of sufficient infrastructure to transport natural gas to market. This is especially true for wells in newly productive areas on federal lands. Nonetheless, through technological innovation, industry has successfully and voluntarily reduced methane emissions, even as natural gas production has grown significantly.

Unfortunately, under the guise of reducing methane emissions and increasing government royalties, BLM’s 11th hour regulatory action imposes costly and prescriptive requirements on oil and natural gas production that will make energy development uneconomical in many areas.

On February 3, 2017, the House voted to repeal the rule, and it awaits action in the Senate.

Blacklist for Federal Contractors

Last year, the FAR Council finalized regulations enacting President Obama’s Fair Pay and Safe Workplaces Executive Order. The rules require that “federal contractors must disclose mere allegations of federal labor violations, potentially locking them out of federal contracts without giving them a chance to challenge the charges,” writes Marc Freedman, U.S. Chamber executive director of labor law policy, thereby earning the E.O. and regulations the nickname of "blacklisting." What’s more, it would give unions leverage in labor negotiations with companies who have federal contracts by threatening to file federal labor violation allegations.

As Jack Howard, senior vice president of Congressional and Public Affairs states in the Chamber’s letter:

The Executive Order and the FAR Council’s rule, are seriously problematic, burdensome and unwarranted:

 Because of any contractor’s desire to remain eligible, enforcement agencies will have extraordinary leverage to extract agency-favorable “labor compliance agreements” from contractors to resolve violations, even before the contractors will have had a chance to present their defense. They contradict the Federal Arbitration Act that permits employers to use pre-dispute arbitration clauses in employment contracts to resolve employee complaints without the expense and burden of going to court. Arbitration is a simpler, fairer and faster way for all parties to resolve disputes that arise between them. Such use of these clauses have been upheld by the courts numerous times. The addition of contracting penalties and new levels of severity for violations usurps Congress’s exclusive authority to write labor and employment laws. They exceed the authority provided under the Procurement Act, which allows the president to change federal procurement only to increase “economy and efficiency.” The reporting requirements will likely spur massive delays for procurement, particularly for key Department of Defense items.

The U.S. Chamber joined a chorus of associations representing companies doing business with the federal government in opposing the Blacklisting rule. The House voted to repeal the rule February 2, prompting Randy Johnson, U.S. Chamber Senior Vice President for Labor, Immigration, and Employee Benefits to applaud:

If implemented this Executive Order would have resulted in contractors sacrificing their due process rights, massive reporting requirements that would have generated delays in critical procurement actions, and given enforcement agencies enormous leverage to settle violations on very agency favorable terms.

With a president willing to sign them, look for Congress to make repealing harmful regulations a regular part of its work this year.