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Dan Byers smoke stackA smoke stack of a coal-fired power plant in Winfield, WV. Photographer: Photographer: Luke Sharrett/Bloomberg.

When EPA announced new carbon regulations to restructure America’s electric system in June, it emphasized that public outreach associated with the rule would be “unprecedented,” and involve heavy cooperation with states.  Upon unveiling the rule, Administrator Gina McCarthy said the rulemaking process would be “an absolute collaboration between the federal and state government…a partnership if there ever was one.”

In the 90+ days since the announcement, however, that cooperative spirit seems to have gone into hiding.  States are weighing in with major concerns and requests regarding the substance of EPA’s rule and the process through which it is being developed, and EPA has gone quiet.  Yesterday, the governors of 15 states (AL, AK, AZ, ID, IN, NM, MS, NC, ND, OK, PA, SC, UT, WI, and WY) wrote President Obama stating:

[T]he rule poses numerous practical problems for state compliance. These problems reflect your Administration’s decision to move forward with the proposed regulation without considering or understanding—among other crucial matters—our state energy markets and infrastructure needs. We request that your Administration provides informed plans to address these significant obstacles to state compliance and that it does so well in advance of the proposal’s comment deadline of October 16. If you cannot fulfill this obligation in time for states to incorporate the new information into their comments, your Administration should withdraw the proposal until it gives due consideration to these critical concerns.

 As Indiana governor Mike Pence said in describing the letter:

“We knew these rules were bad when the EPA first released them, and they keep getting worse the more we learn. The proposal is ill-conceived, poorly constructed, and will cause significant harm in the states. We should be focused on an energy policy that pursues affordable and reliable energy, rather than a climate agenda that will drive up electricity prices without any discernible impact on global carbon dioxide emissions.”

Governors aren’t the only ones raising concerns. Attorneys General, air regulators, and utility commissioners are all calling on EPA to make major changes to its proposal. At a minimum, these state officials are pleading with EPA to extend its rushed and arbitrary deadline for public comment, so sufficient time is provided to review and assess the agency’s complex and far-reaching rule.  Below is just a sampling of those raising substantive concerns and requesting that EPA extend its public comment deadlines:

Alaska Department of Environmental Conservation Commissioner Larry Harrig Arkansas Attorney General Dustin McDaniel Indiana Department of Environmental Management Commissioner Thomas Easterly Kansas Department of Health and Environment Director John Mitchell Kentucky Attorney General Jack Conway Montana Public Service Commissioner Travis Kavulla Texas Public Utility Commissioner Kenneth Anderson

EPA asked the states for feedback, and promised “absolute collaboration” in return. It is clearly now the agency’s chance to live up to that commitment by addressing states’ substantive concerns, and extending the rapidly approaching October comment deadline.

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Sean Hackbarth  Donn R. Nottage/City Club of Cleveland.Karen Harbert, President & CEO, Institute for 21st Century Energy. Photographer: Donn R. Nottage/City Club of Cleveland.

EPA’s proposed carbon regulations will mean less energy diversity, Karen Harbert, president and CEO of the U.S. Chamber of Commerce's Institute for 21st Century Energy, told the City Club of Cleveland last Friday.

"We don't want to be a one-trick pony, and 10 years from now, it [EPA’s plan] starts to penalize natural gas," she explained. Instead, "we need to be looking at what is technologically achievable," she advised.

EPA’s carbon regulations are a continuation of the agency’s policy of increasing energy costs, Harbert told audience members:

The policy right now is let's make fossil fuels more expensive so the more expensive sources, renewables, can compete with them. Instead, why don't we make these things more competitive, the renewable side. And those (prices of renewable power) are starting to come down.

Research on energy storage technology can make renewable resources less intermittent, which will also help them to be more competitive.

To understand the adverse effects of top-down energy mandates and reduced energy diversity, look at the experiment going on in Germany. They previously embarked upon a quest to use less coal and nuclear power but more solar and wind. The results have been costly to its economy, the London Telegraph reported earlier this year:

Energy prices are 40% more expensive than in France and the Netherlands, and the bills are 15% higher than the EU average. Even though Germany’s energy-intensive manufacturing sector is given a break with reduced levies, industries such as chemicals and steel are among the hardest hit, with energiewende [energy revolution] costs of up to €740m a year.

The Wall Street Journal added that a PriceWaterhouseCoopers poll found that “nearly 75% of Germany’s small- and medium-size industrial businesses say rising energy costs are a major risk.” As a result, Germany has been turning back to coal as a reliable source of affordable electricity.

A recent study from IHS found that we could see something similar happen if we reduce our energy diversity. It found that less diversity would mean 75% higher electricity prices on the wholesale level and 25% higher prices on the retail level. What's more, our current mix of energy sources to produce electricity saves us $93 billion annually.

There’s plenty holding down our sluggish economy. It doesn’t need to deal with higher electricity costs from a self-imposed reduction of energy diversity. Instead, we should retain a benefitical variety of electricity sources while at the same time promoting investments in future energy sources that can serve to enhance that resource mix.

Follow Sean Hackbarth on Twitter at @seanhackbarth and the U.S. Chamber at @uschamber.

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Sean Hackbarth Nebraska State Supreme Court. Nebraska Supreme Court. Photographer: Dave Williss. Licensed under a Creative Commons Attribution 2.0 Generic license.

The Nebraska Supreme Court heard arguments over what state body has the authority to approve the proposed Keystone XL pipeline. In 2012, Nebraska’s legislature gave that power to the Governor. Opponents of the pipeline who sued the state argue that the state constitution leaves that authority to the Public Service Commission (PSC).

If the Supreme Court rules for the pipeline opponents, the PSC would evaluate that portion of the pipeline that will run through Nebraska and make a decision sometime next year. If the state wins, the focus goes back on the State Department which unwisely suspended its national interest determination pending the outcome of the Nebraska case.

In any case, this is about state permitting processes and not about the efficacy, safety, or value of the pipeline.

In fact, the Keystone XL pipeline will be a boon to the economy as Karen Harbert, president and CEO of the U.S. Chamber’s Institute for 21st Century Energy noted earlier this year in comments to Secretary of State John Kerry:

According to the FSEIS [the State Department’s environmental analysis], 42,100 Americans will be employed in direct, indirect, and induced jobs during construction of Keystone XL, generating $2.02 billion in earnings for workers.  In addition, the $3.3 billion project will generate $66 million in sales tax for goods and services during construction that will infuse economic vitality into local communities.  The FSEIS also states that $3.1 billion will be spent on construction contracts, materials, and other support for Keystone XL – much-needed revenue for companies still struggling to recover from a hard recession.  It will also provide $55.6 million in new property tax revenue in 17 counties with Keystone facilities…. Overall, the project will contribute $3.4 billion during construction to the U.S. Gross Domestic Product (GDP).

The Keystone XL pipeline has been analyzed for nearly six five years. Every time it’s been found to be good for jobs and the economy and safe for the environment. The State Department doesn’t have to wait for a ruling in the Nebraska case. It should approve the pipeline now.

A ruling is expected in October at the earliest.

Follow Sean Hackbarth on Twitter at @seanhackbarth and the U.S. Chamber at @uschamber.

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Sean Hackbarth Oil pump jack in North Dakota.An oil pump jack just outside of Watford City, North Dakota. Photographer: Matthew Staver/Bloomberg.

Tapping into domestic energy resources with hydraulic fracturing continues to improve America’s energy security by pushing net petroleum imports to their lowest level in 28 years. John Kingston at Platts reports on new Energy Information Administration data:

US petroleum import dependence in June dropped to 4.659 million b/d. That’s only the second time in the post-shale era that number had been less than 5 million b/d. And the last time the US recorded a number that low was back in 1986.

 Crude Oil and Petroleum ProductsU.S. Net Imports: Crude Oil and Petroleum Products

Energy security benefits look even better when you consider North America as a whole:

[T]he US certainly would view Canada or Mexico as a supplier less prone to disruption than many other countries. So once you take away US net import dependence with Canada, that number slips to 2.282 million b/d. Take away Mexico and you’re down to 1.962 million b/d. Those numbers are easily the lowest ever recorded by the EIA. So in essence, that 1.962 million b/d of net import dependence is the figure for the rest of the world outside North America. In 2005, that US net import dependence figure after Canada and Mexico were taken out regularly recorded numbers in excess of 9 million b/d.

Texas and North Dakota continue to see success in their shale oil development. Texas produced over 3 million barrels of oil per day again in June. “Oil production in the Lone Star State has more than doubled in less than three years,” notes Mark Perry at the American Enterprise Institute. Also, North Dakota set another record in June by producing 1.093 million barrels per day.

Unfortunately the good news didn’t extend to offshore production, Kingston writes:

Federal offshore production of 1.43 million b/d remains below the levels in place when the Macondo moratorium was put in place in April 2010. It was 1.531 million b/d in May of that year.

There’s much more to be done to improve energy security. The administration should speed up the permitting process (about 7.5 months) to increase development on federal lands, open up more of the outer continental shelf to oil and natural gas exploration, and approve the Keystone XL pipeline to transport more Canadian oil sands crude and Bakken oil to Gulf Coast refineries.

By developing America’s energy resources, we can continue this success.

Follow Sean Hackbarth on Twitter at @seanhackbarth and the U.S. Chamber at @uschamber.

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Sean Hackbarth Dolphin in water.Photographer: Don Rulo. Licensed under a Creative Commons Attribution 2.0 Generic license.

Before you can develop offshore oil and natural gas you have to know where it is. The available data for the Atlantic coast is over 30 years old. With seismic surveying, a more accurate picture can be developed of what energy lies below the ocean floor.

Video of Offshore Seismic Surveying

However, groups like Oceana and Greenpeace would have you believe that Flipper, Willy, Shamu’s cousins, and other marine life will be doomed.

This is scaremongering. The Bureau of Ocean Energy Management (BOEM) summarizes the science and gives us a different, more accurate picture [emphasis mine]:

To date, there has been no documented scientific evidence of noise from air guns used in geological and geophysical (G&G) seismic activities adversely affecting marine animal populations or coastal communities. This technology has been used for more than 30 years around the world. It is still used in U.S. waters off of the Gulf of Mexico with no known detrimental impact to marine animal populations or to commercial fishing.

If surveyors comply with BOEM requirements, “seismic surveys should not cause any deaths or injuries to the hearing of marine mammal or sea turtles.”

Groups that oppose searching for offshore oil and natural gas oppose offshore energy development period. Arguing against seismic surveying is just one of the many tactics they use to stop America from tapping into its offshore energy abundance and creating thousands of jobs.  These groups don’t want oil rigs in the Atlantic, and will say anything to stop it—even if it means ignoring science.

The fact of the matter is that there’s no evidence that seismic surveying will harm marine life. Flipper will be fine.

API’s Mark Green has more on the BOEM memo at Energy Tomorrow.

Follow Sean Hackbarth on Twitter at @seanhackbarth and the U.S. Chamber at @uschamber.

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