Greenhouse gas rules. Auto mandates. Food safety requirements. Health care decrees.
Welcome to the new age of the super regulator where unelected bureaucrats churn out about 4,000 regulations a year telling you how to run your business.
Despite the regulatory review that President Obama ordered in January 2011, the administration has aggressively regulated, with small businesses bearing the brunt. The total number of small business regulations are rising under the president, as more than 800 rules directly affecting small firms have been in place each year since 2010 (854 at the end of 2012). Before that, the last time there had been more than 800 small business regulations was in 2003, as a result of the government’s response to 9/11.
The administration took a noticeable pause in issuing regulations in the months leading up to Obama’s reelection, but it is now making up for lost time. Regulations issued in January and February could add more than $25 billion to the costs of regulatory compliance for American businesses, reports the American Action Forum.
“In recent years, we have seen an unprecedented explosion of new regulatory activity. The resulting regulatory cascade poses, in our view, the single biggest challenge to jobs, our global competitiveness, and the future of American enterprise,” says Bill Kovacs, the U.S. Chamber’s senior vice president for Environment, Technology & Regulatory Affairs.
The mounting regulatory burden has small businesses worried. According to the Wells Fargo/Gallup Small Business Index, 72% of small businesses say that government regulations are hurting them, and 46% say that they are hurting them a lot.
Perhaps most worrisome is the rise in economically significant rules—those bearing a price tag of $100 million or more. In 2003, the number of economically significant rules was 127. That number has been steadily increasing since 2007. In 2012, a whopping 224 of these major regulations were in the pipeline.
There is also a troubling lack of transparency and public engagement. Federal law requires every president to release his regulatory plans twice a year so that individuals and businesses have a chance to plan for—or object to—the regulations before they take effect. After skipping both the spring and fall deadlines in 2012, the administration quietly published its regulatory agenda just days before the end of the year.
Once the regulations are out in the open, there isn’t always a chance for the public to offer input. The nonpartisan Government Accountability Office found that about 35% of major regulations are issued without a public comment period. In most of those cases, the regulators simply decide that there is “good cause” to issue the rule without public input. In too many other instances, public comment periods are too short to digest lengthy and complex rules, analyze their impact, and offer thoughtful responses.
For example, in December, the Department of Health and Human Services (HHS) gave the public only 22 days to read and respond to hundreds of pages of rules on how the expansion of Medicaid will work with state-based health care exchanges.
And even when agencies ask for comments and give the public a reasonable amount of time, in too many cases the agencies fail to respond. For example, in the case of defining what a
“preexisting condition” is, HHS received 4,627 comments but didn’t respond to any.
“By not asking for comments in the first place, not giving a reasonable time frame in which people can respond, and ignoring responses that are submitted, these agencies seem to suggest that they care more about churning out regulations, rather than getting public input to make the rules as good as possible,” says Katie Mahoney, executive director of health policy at the Chamber.
The currently broken process shows why the regulatory system must be modernized. If there is to be effective regulation, there must be an effective regulatory process in which the agencies issuing the new rules are responsible for ensuring that their rules meaningfully achieve the goals intended. This can be accomplished by requiring the use of sound science and data, proper agency oversight, cost-benefit analysis, and a transparent system that gives the public a meaningful voice in the formulation of regulations.
To learn more, go to uschamber.com/regulations.
It was also the last time that U.S. domestic crude production surpassed imports.
All that’s about to change. The gap between monthly U.S. crude oil production and imports is projected to be almost 2 million barrels per day (bbl/d) by the end of next year—according to the Energy Information Administration's March 2013 Short-Term Energy Outlook.
The agency also predicts that monthly crude oil production is forecast to top 8 million barrels per day in the fourth quarter of 2014, which would be the highest level since 1988. Net crude oil imports are expected to fall below 7 million barrels per day in the fourth quarter of 2014 for the first time since 1995.
To quote another movie from 1995 (The American President), “Well, I could explain it better, but I'd need charts, and graphs, and an easel.”
Actually, for news this good, you don’t need charts, graphs or easels.
The U.S Chamber of Commerce Institute for 21st Century Energy recently completed its annual review of each state’s average electricity retail prices (full results available here). The highest average rate in the continental United States belongs to Connecticut, where electricity costs nearly 16 cents per kilowatt hour, or nearly 60% higher than the national average of just under 10 cents.
Our review clearly shows that rates throughout the Northeast are high, and that’s a topic we’ll address in a future post. But amazingly, Connecticut appears to be poised to raise rates even higher.
In 2011, lawmakers in Connecticut enacted a $2.50 per megawatt tax on all electricity generation except electricity generated by wind and solar energy. At the time, Governor Dan Malloy promised that the tax would only be in place for two years. Because the tax was only temporary, the Millstone Power Station in Waterford, the largest nuclear power plant in New England, agreed not to pass the $43 million a year cost onto consumers.
But now, the governor has released a new budget proposal that keeps the tax in place, breaking his promise and angering local officials. Millstone can no longer afford to keep absorbing the costs of the tax. Instead, they’ll be passed onto consumers—the same consumers that are already paying the highest rates in the lower 48 states.
It is a clear example of how taxes on the energy industry end up hurting consumers. Hopefully Congress is paying attention.
The pundits were out in force this weekend talking about the Keystone XL pipeline. One went off the deep end while another used common sense.
For the New York Times’ Tom Friedman, Keystone XL opened up a pipeline of wackiness. He wants anti-energy activists to “go crazy.” We’re talking “chain-themselves-to-the-White-House-fence-stop-traffic-at-the-Capitol kind of crazy.”
Hmmm… didn’t 350.org’s Bill McKibbon, the Sierra Club’s Michael Brune, actress Daryll Hannah, and others do this a few weeks ago? It didn’t stop the State Department from issuing a draft report stating that the pipeline would not have a significant environmental impact. It’s funny, but I don’t recall hearing about Friedman chaining himself to the White House fence and getting arrested. I guess that's not in a pundit's job description.
Friedman figures that if the President approves the pipeline it should be so politically painful that he’ll have to impose more energy-crushing rules. The columnist wants to “cue up the protests, and pay no attention to people counseling rational and mature behavior” so regulators can “order reductions in CO2 emissions from existing coal power plants and refiners by, say, 25 percent.” Talk about crazy. This would wipe out an entire category of electricity production, making the grid less reliable.
Contrast Friedman to Fareed Zakaria. In TIME magazine, he backs the pipeline and counters the false claim that stopping Keystone XL will keep Canada’s oil sands in the ground:
The U.S. Department of State released an extremely thorough report that tries to answer this question. It concludes, basically, that the oil derived from Canadian tar sands will be developed at about the same pace whether or not there is a pipeline to the U.S. In other words, stopping Keystone might make us feel good, but it wouldn't really do anything about climate change.
On his CNN Sunday show, Zakaria confronted guest, Michael Brune, executive direct for the Sierra Club on this point: “You’re arguing against the State Department and you’re arguing against the history of capitalism that when there is so much demand for a product, supply finds its way.”
Calling Charlie Rose, if the Paul Krugman-Joe Scarborough clash was good television bring Friedman and Zakaria to duke it out over Keystone XL.
At the IHS CERAWeek conference in Houston, Bill Gates made a pitch for nuclear power:
"The only way to solve the climate challenge is have some source of energy that's economic," Gates told the gathering on Thursday evening.
Expanding the nuclear option, he said, outweighed any notion of wind or solar energy as large-scale storage systems for both remained unproven.
"You can site [a nuclear reactor] where the power is needed," Gates said. "Unless you think there is a miracle hidden in storage."
Gates is an investor in Terra Power which is developing a type of reactor fueled by non-fissile uranium and would produce less waste.
While this design is in the future, today, nuclear power can play a role in the electricity generation mix. However, this will require the federal government to live up to its legal obligation and establish a nuclear waste repository. And if it doesn't--the administration had stopped licensing and construction of the Yucca Mountain facility-- it should stop charging utilities (and ratepayers) for waste disposal.