U.S. CHAMBER OF COMMERCE

Energy Blog

Energy Blog

US Chamber of Commerce Blog

J.D. Harrison March Madness

It’s that time of year! It’s March, and there’s no telling what’s going to happen next. It’s a frenzied, fast-paced, full-court-press. It’s names you’ve never heard of suddenly bursting onto the scene and wreaking havoc. It’s pure madness!

No, no, not the NCAA. We’re talking OMB.

Under the Obama administration, the federal Office of Management and Budget has been busy this month reviewing five burdensome new regulations that threaten to slam businesses and hammer the economy. Several of the rules have recently been finalized, while others are expected to be set in stone in the coming weeks. In each case, the administration rushed through the rulemaking process, ignoring public comments and giving short shrift to its economic analysis responsibilities.

 

So let’s set aside for a moment the road to the Final Four. Here’s a look at what for employers may feel like regulators' Fatal Five and why each rule is drawing heavy boos from the business crowd.

DOL’s Fiduciary Rule

The Labor Department’s fiduciary rule threatens to hit small businesses with a trifecta of new hurdles related to retirement planning. One, it will restrict the advice that financial experts can share with small business owners and their employees. Two, it will severely limit the retirement plan options offered to those small businesses. Three, it will likely result in higher plan-related costs for small businesses from, well, coast to coast. Bottom line: The fiduciary rule will make it harder for many Americans to save for retirement, which runs counter to DOL’s stated objective. Like a losing coach at halftime, the agency should really consider going back to the drawing board.

DOL’s Overtime Rule

When it comes to the NCAA tournament, there’s nothing better than overtime. When it comes to new federal regulations, quite the opposite. In addition to the new retirement rule, the agency has proposed new “one-size-fits-all” regulations that will hammer small businesses and significantly limit employment opportunities. Basically, the rule raises costs for employers by more than doubling the salary limit under which employees qualify for overtime pay, thus decreasing the number of employees who are exempt from federal overtime pay rules. In the process, many reclassified employees will likely lose benefits, flexibility and – like 16 seeds – any real opportunity to advance.

DOL’s Persuader Rule

Completing the agency’s nightmarish 3-point play, the Labor Department this week finalized its “persuader” rules, which features new and complicated reporting mandates for attorneys, consultants and other professionals who advise companies about certain labor matters. The persuader rule’s purpose is to stifle employer speech and make it much more difficult for employers to discuss with employees the pros and cons of unionization – which seems like a pretty flagrant foul to us.

In turn, unions hope that they’ll see a boost in their membership rolls, which have been suffering a Michigan State-style vanishing act lately. And if it weren’t already clear who is behind the proposal, unions and their attorneys aren’t required to adhere to the new reporting requirements. If the rule is implemented as written, it would be a big fat L for businesses.

OSHA’s Injury and Illness Rule

The Occupational Safety and Health Administration (OSHA) isn’t sitting it out this March. For starters, the agency is finalizing a new rule that would require employers to submit injury and illness records to OSHA electronically, after which the agency would post them online. Problem is, OSHA has no statutory authority to publish or disseminate that information. Sharing the rock in basketball? Good. Sharing companies’ injury and illness records with the public? Not so good.

This regulation has been driven entirely by labor leaders. Unions will use these reports—many (if not most) of which have no bearing on the employer’s attention to or overall record on workplace safety—in their efforts to characterize an employer as having an unsafe workplace, resorting to what amounts to public shaming even when there’s no evidence of wrongdoing by an employer. In the words of Dicky V, it’s a dipsy-doo-trick-a-roo that the government simply shouldn’t allow.

OSHA’s Silica Rule

One and done? No way, that’s not OSHA’s style. On top of the injury and illness requirements, the agency this week finalized new rules dramatically cutting the exposure levels for respirable silica in an array of workplaces, such as foundries, glassmaking facilities, brick production plants and construction sites. All this despite the fact that government data shows illness and death rates have plummeted by more than 93 percent since 1968 under the existing limits. The rule will require every brick plant, most of which are small businesses, to spend nearly $1 million up front on new equipment, after which they will incur another $225,000 in added costs every year after that.

To make matters worse, the regulation requires employers to monitor exposures through air samples, and current laboratory technology is unable to reliably detect silica at OSHA’s new levels. Because OSHA is also specifying the most expensive methods of controlling exposure, instead of modern technology that is less costly and easier to use, this regulation will also be economically infeasible. 

While NCAA March Madness extends about a week into April, the Obama administration’s regulatory madness continues year-round, and it’s particularly clobbering the Cinderellas of our economy – small businesses. It’s time we stop stacking the odds against them with onerous regulations that threaten to do more than knock them out of some tournament; they threaten to knock them out of business, eliminating thousands of jobs in the process.

Thomas J. Donohue Thomas J. Donohue, U.S. Chamber of Commerce

In the hunt for primary election votes, the truth sometimes suffers. This election cycle the truth about hydraulic fracturing certainly has. The debate wasn’t helped recently by the administration, which will use its waning days to develop new methane emissions regulations, imposing further needless regulation on natural gas.

Here’s the truth about natural gas production: It’s safe, produces well-paying jobs, and saves consumers billions of dollars.

Safety. A University of Cincinnati study found no evidence that fracking contaminates water. The U.S. Environmental Protection Agency and Yale University reached the same conclusion, but the University of Cincinnati study is significant because natural gas opponents financed it. Additionally, methane emissions from hydraulically fractured natural gas wells are down 79% since 2005. Industry has strong financial incentives to reduce methane emissions, and it has. Fracking opponents can no longer deny science. Thanks to American innovation and ingenuity, natural gas exploration is environmentally safe.

Jobs and Economic Growth. Fracking is vital to our economy. According to the Harvard Business School, shale energy development created 2.7 million jobs and added $43 billion to the U.S. economy in 2014. The shale boom has saved consumers $780, enough to buy a new clothes dryer. While the industry faces strong headwinds, the current slump won’t last forever. Household consumer savings from natural gas are expected to increase to $1,070 by 2030. With the right policies in place, increased natural gas production could generate an additional $5.15 trillion in capital investment over the next two decades. And it could create or support an additional 3.5 million jobs, resulting in $2.52 trillion in new tax revenues for local, state, and federal governments.

Energy Security. The shale revolution has improved U.S. energy security. According to the U.S. Chamber of Commerce’s U.S. Energy Security Risk Index, our energy security has improved for three years running primarily because we import only 10% of our energy compared with 30% a decade ago. The U.S. Energy Information Administration announced that hydraulic fracturing now accounts for 51% of U.S. crude production. Fewer imports mean we’re less reliant on potentially unfriendly regimes. Perhaps that’s why more people support fracking than oppose it.

Our nation is in the midst of a true energy revolution. After decades of fear over potential energy scarcity, we’re in an era of energy abundance. Americans deserve to hear that story, and they deserve a policy based on facts. Next time you hear a candidate attack fracking, fight back with the truth. Doing so will be good for our economy, the environment, and energy security.

Sean Hackbarth Tug boats move a oil platform to the Gulf of Mexico.Tug boats move a oil platform to the Gulf of Mexico. Photo credit: Eddie Seal/Bloomberg.

President Barack Obama continues choosing cementing his legacy among anti-energy zealots rather than ensuring America’s energy security.

Instead of the all-of-the-above energy strategy he touted for most of his time in office, the president is going with the “Keep it in the ground” approach preached by radicals like Bill McKibbon.

The Interior Department flip-flopped on leasing portions of the Atlantic coast to oil and natural gas development, Bloomberg reports:

The proposed offshore leasing program being released Tuesday eliminates the administration’s initial plan to auction off drilling rights in as many as 104 million acres of the mid- and south-Atlantic in 2021, according to an Interior Department statement.

In 2015 Interior’s Bureau of Ocean Energy Management (BOEM) proposed leasing parts of the Atlantic coast to energy development. That’s now off the table.

bloomberg_atlantic_coast_development_map_032016.jpg  Obama reverses offshore drilling planBloomberg map: Obama reverses offshore drilling plan


The administration “once again put short term political interests ahead of our nation’s best interest,” Karen Harbert, president and CEO of the U.S. Chamber’s Institute for 21st Century Energy, said in a statement:

America’s job creators have become accustomed to the relentless drumbeat of anti-energy policies from the Obama administration. Today’s announcement that the waters off of our Atlantic coast will be excluded from the next offshore drilling plan is nevertheless remarkable for its catering to fringe constituencies at the expense of energy security and the American economy. The Outer Continental Shelf is the backbone of U.S. oil and gas production and the announced deviation from the proposed plan will cost us jobs and harm security for decades to come.

This isn’t the first time that the administration pulled a Lucy and yanked away the football just before Charlie Brown was about to kick it. The Interior Department pulled out from planned Atlantic coast oil and natural gas leases in 2010.

The New York Times reports, “The decision represents a reversal of President Obama’s previous offshore drilling plans, and comes as he is trying to build an ambitious environmental legacy.”

Interior’s action fits a recent pattern of President Obama abandoning abundant, affordable energy:

Attacking coal-fired power plants with EPA’s carbon regulations and putting a halt on coal leases on federal lands. EPA pushing for methane regulations on oil and natural gas operations when methane emissions have been falling. Vetoing the Keystone XL pipeline. Putting up regulatory barriers to make it harder for develop energy in the Gulf of Mexico and off California’s coast.

Interior estimates that 3 billion barrels of oil and more than 25 trillion cubic feet of natural gas lie below the mid and southern Atlantic costs.

Because it takes years to lease, explore, plan, and develop offshore projects, cancelling lease sales pushes back any energy development for a generation.

A 2013 study found that opening the Atlantic outer continental shelf to oil and natural gas exploration will create 280,000 jobs. That’s all put on hold.

Leaders in Atlantic coast states support safely developing energy. In 2015 before the House Natural Resources Committee, Governor Pat McCrory (R-N.C.) testified:

Harnessing America’s offshore energy reserves in an expeditious, environmentally safe and responsible manner will lead to greater independence and economic prosperity for North Carolina and the entire nation.

Polls show that those living in Atlantic coast states support energy development because of the jobs and economic growth that would be created. Among registered voters, Harris Poll found 65% support for offshore development in Virginia, 64% in North Carolina, and 67% in South Carolina.

Now, the president’s defenders may note that the Interior Department kept Alaska offshore Arctic drilling under consideration. However, they won’t point out how through excessive regulation, Interior has made it nearly impossible to explore and develop energy there. In addition, Interior could yank those planned leases just like it did off the Atlantic coast.

One thing is for sure, President Obama has decided that improving access to American energy isn’t in the cards for the rest of this presidency. The decision made today will have ramifications for 10-15 years to come, not just until Jan 20, 2017.