“Nothing has come close to the positive impact Marcellus Shale has had on our local economy.” That’s what Vince Matteo, President & CEO of the Williamsport/Lycoming Chamber of Commerce and Dennis Martire, Vice President and Mid-Atlantic Regional Manager of the Laborers’ International Union of North America, wrote in May.
The economic benefits should continue unabated since, according to the Energy Information Administration, natural gas production hit a new milestone in July:
Natural gas production in the Marcellus Region exceeded 15 billion cubic feet per day (Bcf/d) through July, the first time ever recorded, according to EIA's latest Drilling Productivity Report. The Marcellus Region, mostly located in West Virginia and Pennsylvania, is the largest producing shale gas basin in the United States, accounting for almost 40% of U.S. shale gas production. Marcellus Region production has increased dramatically over the past four years, increasing from 2 Bcf/d in 2010 to its current level.
Bloomberg reports, “Marcellus gas accounts for about 16 percent of gross U.S. production, up from 2 percent in 2008.”
Companies working the Marcellus Shale plan to hire 2,000 more people this year. Matteo and Martire write, this has brought hope to their area:
Our neighbors’ entrepreneurial spirit has seen a resurgence. For the first time in recent memory, young people have a real opportunity to stay here and many who left the region -- or the country -- to find work have returned home because good-paying, family-sustaining jobs are now available again.
Jobs ranging from all educational levels are being created across a growing and robust supply chain, with many paying salaries twice that of the statewide average.
The economic benefits from natural gas development have spread across Pennsylvania, as the Manhattan Institute’s Mark Mills writes:
The Marcellus shale fields in Pennsylvania were responsible for enabling statewide double-digit job growth in 2010 and 2011 and now account for more than one-fifth of that state’s manufacturing jobs. For every $1 that the Marcellus industry spends in the state, $1.90 of total economic output is generated.
At the same time, Duke University researchers concluded that natural gas development via hydraulic fracturing has been a plus for local Pennsylvania governments.
Responsible development of Marcellus Shale natural gas is creating jobs and improving peoples' lives. If federal regulators refrain from slapping duplicative regulations on hydraulic fracturing, these communities will continue reaping the benefits.
[H/t Mark Perry]
The minority staff of the Senate Environment and Public Works (EPW) Committee released a report tracing how the anti-energy agenda is funded through private foundations to influential Washington, DC-based environmental organizations and to local activist groups. In particular the report looks at how a California-based foundation funded a local Nebraska group that opposes the Keystone XL pipeline:
Bold Nebraska projects itself as a Nebraska-based and progressively oriented organization, proclaiming on its website: “Nebraskans are bold. We are pioneers. We are reformers. We are independent. Bold Nebraska is setting out to change the political landscape and restore political balance. We are going back to our roots and we need your help to build a Bold Nebraska.” However, underlying Bold Nebraska’s homespun, grassroots facade is a significant, growing, well-funded and well-organized financial support network originating from wealthy far-left environmental interests thousands of miles away.
This funding network ensures that Bold Nebraska continues to protest the job-creating, energy infrastructure project:
In 2012, the San Francisco-based Tides Foundation gave it $50,000, and Tides’ San Francisco-based 501(c)(4) group, The Advocacy Fund, gave $15,000. These two donations equaled one-third of Bold Nebraska’s total contributions received in 2012. In 2013, Tides Foundation almost doubled its 2012 grant by giving $90,000.
This chart illustrates the connection between influencers and local organization.Funding of Keystone XL opposition group, Bold Nebraska.Source: Minority Staff of the Senate Environment and Public Works Committee.
Bold Nebraska is certaintly local, but it's also the product of anti-energy, foundation-funded activism.
In an interview with The Economist, President Obama claims that his administration’s policies have “generally been friendly towards business.”
I’ll grant him this: On the need for immigration reform and promoting trade, his administration has been on the right side. But here’s the flipside: On health care, energy, environmental regulations, financial regulations, and labor law, his administration has put up too many barriers that keep businesses from growing, investing, and hiring.Obamacare
Despite the promise to lower health care costs, recent surveys have found that employers expect costs to rise 8% - 9%. The biggest worry for business owners and executives remains rising health care costs.
There’s been little done to pull back the onerous employer mandate. Its definition of full-time work continues to be a perverse incentive to hire part-timers. Yet, the White House threatened to veto a House bill that would restore the 40-hour definition of full-time work. In addition, complying with its reporting requirements will be costly and complex.Energy
Oil and natural gas production on federal lands has decreased, while it’s increased on private and state lands.
Also, we’re still waiting for the administration to approve the Keystone XL pipeline. It’s found plenty of excuses to delay it and keep thousands of jobs from being created.EPA
EPA has proposed carbon regulations that will raise electricity prices and cost one million jobs.
Its (along with the Army Corps of Engineers’) proposed “Waters of the U.S.” rule will subject farmers, ranchers, manufacturers, home builders—nearly any property owner—to new layers of reviews and permitting.
Under Dodd-Frank financial regulation law, regulators have to treat insurance companies like banks even though they have much different business models. As John Berlau points out in The Hill, this flawed regulatory approach will hurt the insurance industry and its customers:
Imposing bank capital standards on insurers would raise costs for life insurance consumers by $5 billion to $8 billion, according to the economic consulting firm Oliver Wyman. These costs could hit policy holders both through higher premiums and reduced benefits. And some policies simply could become unavailable as insurers “exit certain product lines,” the Oliver Wyman study found.NLRB
After the President filled it with pro-union commissioners, the National Labor Relations board wants to treat McDonald’s as a joint employer, which will change decades of labor law and upend the franchise business model, as Andrew Puzder, CEO of CKE Restaurants (owners of the Hardee’s and Carl’s Jr. brands) writes in the Wall Street Journal [subscription required] [h/t Tim Worstall]:
If the NLRB’s new interpretation of the rules—which McDonald’s has vowed to contest—becomes the law of the land, it will be tantamount to rewriting an existing contractual relationship by government fiat in ways the parties never contemplated and to their mutual detriment. Franchisers would inevitably pass the costs of jointly managing their franchisees’ employees on to their franchisees. Franchisees would find themselves unable to control their labor costs, a key controllable expense and an important element of their profitability.
These are just the issues at the top of my mind. In no way, have President Obama’s policies been “generally good for business.” More often than not, this administration has created policy roadblocks that keep businesses from investing and hiring. The tepid jobs recovery is proof of that.
Here are a few energy-related items you might have missed this week.
1. Take a look at your electrical bill. You are probably paying more, as CNSNews.com reports:
For the first time ever, the average price for a kilowatthour (KWH) of electricity in the United States has broken through the 14-cent mark, climbing to a record 14.3 cents in June, according to data released last week by the Bureau of Labor Statistics.
Before this June, the highest the average price for a KWH had ever gone was 13.7 cents, the level it hit in June, July, August and September of last year.
The 14.3-cents average price for a KWH recorded this June is about 4.4 percent higher than that previous record.
The story also notes, “In each of the first six months of this year, the average price for a KWH hour of electricity has hit a record for that month. In June, it hit the all-time record.”
EPA’s proposed carbon regulations will raise electricity prices even higher by reducing energy diversity.
2. Speaking of EPA’s proposed carbon regulations, thousands of union workers protested against them in Pittsburgh [subscription required]:
The United Mine Workers of America and other unions who organized the rally argue that the EPA rule to lower carbon emissions by 30% by 2030 based on 2005 levels would boost electricity prices and cost more than 65,000 jobs mostly across Appalachia, while doing little to address climate change globally.
“It’s going to be devastating if it goes through in its current form,” Cecil Roberts, president of the UMWA, said in an interview before the protest.
Unions opposing the proposed rule argue that U.S. workers will pay the price for lowering emissions domestically while other countries–most notably China, where coal usage has grown rapidly–will continue to burn coal and emit carbon dioxide.
3. Continuing on the theme of EPA’s proposed carbon rules, regulators in charge of power grid reliability told a House committee that EPA has had few discussions with them:
The role of FERC [Federal Energy Regulatory Commission] in the inter-agency consultation process at EPA remains unclear. FERC Chairman Cheryl LaFleur wrote in her written responses to the subcommittee’s questions that she met with EPA officials to discuss the draft Clean Power Plan proposal, but none of the other FERC Commissioners said they were involved in the process. Further, there was no formal partnership between EPA and FERC in coming up with EPA’s power grid reliability assessment for the proposed rule.
[T]he EPA left FERC out of its formal process to evaluate reliability problems despite FERC’s obvious expertise in electric reliability. Furthermore, EPA’s own reliability assessment should be treated as “more speculative than informative” for the reasons outlined in Chairman LaFleur’s written responses.
4. North Dakota's oil boom has resulted in a boom in air travel:
In Minot, N.D., a two-hour-plus drive from Williston, airport-passenger traffic has more than tripled in three years. Four airlines—Delta, United, Frontier and Allegiant—serve that small airport with up to 15 flights a day. Last year, Dickinson, N.D., saw its airport-passenger traffic skyrocket 76%. And here in Williston, Delta has four flights a day to Minneapolis, while United has four flights a day to Denver and will add a daily flight to Houston on Aug. 19. Planes are leaving with, on average, 85% of seats filled, the airport says.
5. On a lighter note, Mother Nature gave the cold shoulder to former Vice President Al Gore’s global warming group:
The Climate Reality Project brought its “I’m Too Hot” trucks and offers of free ice cream to this week’s Environmental Protection Agency hearings on power-plant emissions, but the climate wasn’t cooperating.
The plan was to tout the EPA’s emissions proposal as a solution for hot weather brought on by global warming, but when the hearings began at 9 a.m. Wednesday in Denver, the temperature was a chilly 58 degrees. Plus, it was raining.
The other cities hosting the hearings Wednesday were also hit by cooler-than-usual temperatures. The high in Atlanta was forecast at 82 degrees, while it was a pleasant 70 degrees in Washington, D.C., when the hearings began at 9 a.m.
Weather has complicated Gore’s events so often that it has been dubbed the “Gore Effect.”
We’re into Day 2 of EPA’s public hearings on its proposed carbon regulations that are taking place across the country over the next few days—unless you live in one of the states most reliant on coal for electricity.
Yesterday, I noted three potent arguments for why the proposed regulations are bad policy. Here are four more based on President and CEO of the U.S. Chamber’s Institute for 21st Century Energy Karen Harbert’s testimony.1. The proposal is a significant threat to American jobs and the economy.
The proposed regulation will cost billions of dollars resulting in significant jobs losses:
EPA itself estimates that its rule will increase electricity prices between 6 and 7 percent nationally in 2020, and up to 12 percent in some locations. This is on top of the 13 percent increase already forecast by EIA over that time period. EPA estimates annual compliance costs between $5.4 and $7.4 billion in 2020, rising up to $8.8 billion in 2030.
It is important to note that these are power sector compliance costs only, and do not capture the subsequent spillover impacts of higher electricity rates on overall economic activity. Even if these costs were accurate, these increases will place an immense burden on U.S. businesses, and could eliminate the critical competitive advantage that affordable and reliable electricity provides to the American economy.
The United Mine Workers Association has estimated that this rule will result in 187,000 direct and indirect job losses in the utility, rail, and coal industries in 2020, and income losses from these sectors of $208 billion between 2015 and 2035.
An IHS study found that less energy diversity that will result from EPA's regulations will mean higher and more volatile electricity costs, lost jobs, and reduced family incomes.2. EPA’s proposal lacks flexibility.
EPA Administrator Gina McCarthy claims that EPA’s proposal is built on “flexibility.” She used that word eight times in her June speech announcing the regulations. Harbert explains that the actual proposal says otherwise:
[B]y incorporating reduction measures beyond affected sources, EPA was able to tighten individual state targets substantially. If the emissions reductions called for from one individual building block are not met, they must be made up for through even greater reductions in another building block. Because individual building block targets were set at aggressive levels, there is little to no “wiggle room” between options. As a result, and unless EPA incorporates true flexibility into the rule, we expect states will face major compliance challenges.3. There are transparency, process, and timeline problems.
EPA’s proposed carbon regulations run over 1,600 pages and establish carbon emissions targets for each state. However, the agency hasn’t offered the data or a rationale that justifies the different targets:
In order for states and stakeholders to fully evaluate the impacts of EPA’s proposal, EPA must better explain and disclose underlying assumptions and data that serve as the foundation for its binding emissions targets on states. EPA has to date failed to address these issues, provided little to no information regarding what authority it is relying upon to institute such an “outside the fence” [beyond a power plant] expansive regulatory regime, nor how it intends to proceed if it does not approve of individual state implementation plans.
In addition, more time is needed to examine this proposal that will force a redesign of America’s power system. Harbert advises that EPA should include an interactive component to public meetings “so impacted stakeholders can ask EPA direct questions and get answers regarding the proposed rule.”4. It won’t result in meaningful carbon emission reductions.
Even if you ignore the harm it will have on electricity prices, jobs, household incomes, and the economy, the proposed regulations will have a negligible global impact [emphasis hers]:
The EPA estimates that in 2030, its proposed rule would reduce CO2 emissions 555 million metric tons below current projections which represents only 1.3 percent reduction of projected global emissions in 2030. Because non-U.S. CO2 emissions are projected to grow by 41 percent between 2010 and 2030, EPA’s proposed rule will offset the equivalent of 13.5 days of Chinese emissions in 2030, based on U.S. Department of Energy projections.
Senior administration officials have publicly emphasized that absent similar actions by other major economies, U.S. regulations to reduce carbon emissions will not succeed. In fact would simply result in moving emissions to other countries that have not implemented similar restrictions.
Let’s review. EPA's proposed carbon regulations:Threaten American jobs and the economy. Aren't flexible. Lack transparency and are being rushed. Will have negligible effects on global carbon emissions.
In short, EPA’s proposed carbon regulations will be all pain with little gain.