Energy Blog

Energy Blog

US Chamber of Commerce Blog

Sean Hackbarth Power lines near a coal power plant in Winfield, West Virginia.Power lines near a coal power plant in Winfield, West Virginia. Photo credit: Luke Sharrett/Bloomberg.

After President Obama announced in August that EPA would issue unprecedented carbon regulations that would restructure America’s electricity system, defenders of affordable and reliable electricity waited waited … and waited … and waited for the "Clean Power Plan" to be published in the Federal Register.

When those regulations were finally publish, the U.S. Chamber and others swung quickly into motion to block the Administration’s unlawful action.

Lawsuits Filed

First came the lawsuits.

So far, 26 states, several business associations, and several businesses, filed suits.

ICYMI: .@EPA's #CostlyPowerPlan BY THE NUMBERS = 26 states + 16 orgs (including @USChamber) say NO!!! pic.twitter.com/1cd5N5SEye

— Energy Institute (@Energy21) October 26, 2015

For instance, the U.S. Chamber of Commerce is leading a case that includes the National Association of Manufacturers, National Federation of Independent Business (NFIB), and more than a dozen trade associations. They challenged the EPA’s regulation for carbon emissions from existing power plants and have asked the D.C. Circuit to delay implementing them until the court rules on their ultimately legality.

In a statement, U.S. Chamber President and CEO Tom Donohue called the regulations “a massive executive power grab.” As the court filing explains:

The Executive Branch may be frustrated that Congress rebuffed attempts to enact laws authorizing the “cap-and-trade” regime that the Rule now seeks to replicate, but EPA cannot circumvent the political process by legislating through regulation.

On a press call, Karen Harbert, president and chief executive officer of the U.S. Chamber’s Institute for 21st Century Energy, said the carbon rules will “raise the cost of operations of every business that uses electricity” and “raise the price of electricity for American households.”

Harbert pointed out that EPA was “relying on 300 words” in the little-used Section 111(d) of the Clean Air Act to allow EPA to micromanage electricity choices across the country.

In its brief supporting the stay, the U.S. Chamber-led group warns that EPA’s carbon regulations for existing power plants “will cause immediate, irreparable harm.” For instance, EPA estimates that the rule will cause as much as 11,000 megawatts of coal-fired generation to be retired by 2016. When that happens, communities near these power plants as well as the coal mines that supply fuel to them will see job losses that will ripple to local schools, governments, and small businesses.

Unless the EPA's rules are stayed until the court determines their legality, business groups worry we’ll see a replay of what happened with EPA’s mercury regulations.

Earlier this year, the Supreme Court ruled that EPA improperly crafted mercury rules. However, the defeat didn’t bother EPA Administrator Gina McCarthy. Prior to the ruling, 166 coal facilities were retired. McCarthy bragged to HBO late night talk show host Bill Maher the damage had been done: “Most of [coal power plants] are already in compliance, investments have been made, and we’ll catch up. And we’re still going to get at the toxic pollution from these facilities.”

Congressional Review Act

Speaking of Congress, Members aren’t sitting still either.

Congress has the Congressional Review Act (CRA) to fight back against as unnecessary and costly regulations. Under the law, Congress can send resolutions of disapproval to the President for his signature or veto.

Will join @SenCapito to introduce resolution of disapproval to stop @EPA's over-reaching Clean Power Plan regulations (1/2)

— Sen. Heidi Heitkamp (@SenatorHeitkamp) October 23, 2015

In the Senate, two bipartisan sets of CRA resolutions of disapproval will be filed: one by Senate Majority Leader Mitch McConnell (R-Ky.) and Sen. Joe Manchin (D-W.V.); and one by Sens. Shelley Moore Capito (R-W.V.) Heidi Heitkamp (D-N.D.). In the House, Rep. Ed Whitfield (R-Ky.) has filed two resolutions of disapproval

Whether it's in the courtroom or in Congress, you can be sure opponents of EPA’s carbon regulations will fight tooth and nail to ensure that American businesses and communities continue to have affordable and reliable electricity.

.@SenateMajLdr Mitch McConnell Introduces Measure to Overturn EPA’s Regulation on New #Coal-Fired Plants https://t.co/xgLlACHysb

— Sen. McConnell Press (@McConnellPress) October 27, 2015

U.S. Chamber Staff BHP Billiton CEO Andrew Mackenzie.BHP Billiton CEO & Executive Director Andrew Mackenzie.

Free trade is good because it connects the world. The whole world is able to compete with itself, and as a result you raise your standards.” -- BHP Billiton CEO and Executive Director Andrew Mackenzie

Mackenzie, who heads a global resources company, was recently in D.C. as part of the CEO Leadership Series, hosted by the U.S. Chamber of Commerce Foundation and the Institute for 21st Century Energy. He encouraged attendees to not fear global trade. Instead, we should embrace it so we can “a world where there are opportunities for all and scarcity for none with a better quality of life fairly shared now and in the future.”

He went on to explain the good free trade has done for Americans:

In total, trade liberalization has added $1.5 trillion to the U.S. economy, since the Second World War, and made the average American almost 10% better off, so today middle class Americans gain more than a quarter of their purchasing power from trade.

We had a chance to sit down with Mackenzie and talk about reducing barriers to imports and exports like the antiquated 40-year-old ban on U.S. oil exports. “I personally believe the oil export ban is a bit of an enigma--that it still exists when it was introduced as a result of an oil price shock in the 70s,” he said. Studies have shown that lifting the ban will spur billions of dollars in investment and create millions of jobs.

Watch the video.

BHP Billiton CEO & Executive Director Andrew Mackenzie
Sean Hackbarth Russian oil platform in the Arctic Ocean.Russian oil platform in the Arctic Ocean.Photo credit: Krichevsky. Licensed under a Creative Commons Attribution-Share Alike 4.0 International license.

In the wake of Shell choosing to stop exploring for oil and natural gas off Alaska’s Arctic coast, the Interior Department cancelled lease auctions through 2017.

“In light of Shell’s announcement, the amount of acreage already under lease and current market conditions, it does not make sense to prepare for lease sales in the Arctic in the next year and a half,” Interior Secretary Sally Jewell said.

What Secretary Jewell doesn’t want to acknowledge is a big reason no one wants to drill in the Arctic right now is because the federal government has made it too difficult.

Here are some of the federal government’s regulatory obstacles Shell had to navigate around to drill just one well:

Restrictions on Drilling Activities. Multiple layers of environmental laws and regulations limit the type and amount of actively that can take place in the Arctic.  For example, Shell sought permits to drill two exploratory wells during the 2015 season.  While the Administration gave conditional approval to Shell’s exploration plan (which included the two wells) it was later determined that the plan  violated a U.S. Fish and Wildlife Service regulation from 2013 regarding marine mammal disturbance.  The regulation requires a 15 mile buffer zone around active drilling rigs due to assumed impacts of noise; an assumption not corroborated by science.  Since Shell’s wells are nine miles apart, the wells could not be drilled simultaneously – creating additional restrictions and adding delay to their operations. Requirements for Additional Equipment. Regulations also require that an additional redundant rig be on site. This adds additional costs and resources, and also fails to take into account other containment strategies. Capping stacks, blowout preventers and relief domes could be better suited to address potential spill response in the shallow-waters of the Arctic. Litigation. At seemingly every turn, energy exploration in the Arctic has faced an onslaught of lawsuits from activist groups.  In one instance in 2008, there was a legal challenge to the original lease sale and the federal court ruled that there needed to be a revised EIS.  The Department submitted a supplemental EIS and the 2008 lease sale was officially reaffirmed in March 2015. 

Shell said clearly it faces a “challenging and unpredictable federal regulatory environment in offshore Alaska.” It’s no surprise no other companies want to jump into these chilly regulatory waters. 

But the company also pointed out, “The area is likely to ultimately be of strategic importance to Alaska and the US.” One estimate puts 34 billion barrels of oil off Alaska’s Arctic coast.

Other nations aren’t stopping Arctic exploration; neither should the U.S.

Demand for oil and natural gas isn’t going away, so energy domestic exploration must continue in the Arctic and elsewhere. But as we’ve seen, by putting up unnecessary regulatory hurdles, regulators can cause job and economic growth opportunities to be missed.