Energy Blog

Energy Blog

US Chamber of Commerce Blog

Sean Hackbarth A coal train leading away from the Gibson Station power plant in Owensville, Ind.A coal train leading away from the Gibson Station power plant in Owensville, Ind. Photo credit: Luke Sharrett/Bloomberg.

In pushing for EPA’s carbon regulations, proponents were encouraged to vilify opponents, because the public (rightly) thought that electricity prices would go up, newly-revealed documents show.

In 2014 just before the Obama administration issued its proposed version of the Clean Power Plan (CPP), a memo was emailed to staff of the Democratic Governors Association that included an interesting poll finding, reports The Washington Free Beacon’s Lachlan Markay [emphasis mine]:

The Democratic polling firm Hart Research Associates conducted research on voter attitudes about the regulation, which has faced intense criticism since the EPA unveiled its proposed rule last year. Hart found that voters generally shared the concerns of Republican critics of the regulation.

“Research indicates that many voters’ default belief is that electricity bills will go up” as a result of the regulation, according to a Hart talking points memo circulated by an employee of Advocacy Advisors, a political consulting firm that, emails indicate, worked closely with the Climate Action Campaign, an initiative pushing EPA regulations.

“Denying [electricity] rate increases strains credulity with many audiences,” according to the memo.

The final version of the Clean Power Plan, released in August, calls for a 32% cut in carbon emissions from power plants by 2030.

The public knows a bad deal when it sees one. "[T]he EPA has picked winners and losers by imposing a system that will drive up prices in low-cost electricity states and redistribute the revenues associated with those higher prices to select West Coast and Northeast states," writes, Heath Knakmuhs of the Institute for 21st Century Energy.

epa_clean_power_plan_winners_losers.jpg  Winners and losers from EPA's carbon regulations Map: Winners and losers from EPA's carbon regulations

Many also remember then-Senator Obama declaring that electricity prices would “skyrocket” if he were elected.

Instead of talking about the uncomfortable fact that the CPP would mean higher electricity prices, proponents were advised to “sow doubts about our opponents [sic] motives,” Markay reports:

“The key to success is a visible adversary,” the memo said. “In this case, that adversary is power companies, though this line of messaging easily could be adapted to encompass the coal industry or any other dirty energy advocate.”

The memo suggested blaming rate hikes on power companies themselves despite acknowledging the widespread view that EPA regulations would raise electricity rates. “Big power companies are using pollution limits as an excuse to raise rates—and we shouldn’t let them get away with it,” suggested one talking point.

Another talking points memo circulated a few days earlier expanded on Hart’s approach to undermining opposition to the EPA rule. “Big Polluters Put Profits Over People,” was one talking point suggestion. “Big Polluters Are Bad Corporate Citizens and Pollute Communities,” read another.

It also proposed attacking “polluters,” which it defined to include power companies and their “allies,” for “doing all they can to avoid paying their fair share” in taxes, and for “pay[ing] their CEOs millions of dollars each year.”

When you can’t argue on facts, you resort to vilification. When it comes to a forced reconfiguration of our power grid that will have a dramatic effect on businesses, consumers, and the economy, the public deserves a more honest debate.

U.S. Chamber Staff The Long Arm of the EPA The Long Arm of the EPA

The Environmental Protection Agency sure has a long arm. Want proof?

The agency has asserted unprecedented power over the private sector while turning a blind eye to both the federal rulemaking process and its directives from Congress. For starters, there's the Clean Power Plan's carbon emission standards, which did not take into account input from the business community and will consequently put a drain on the American economy.

What about the EPA's proposal to further tighten ozone standards across the country, lowering the acceptable threshold of surface-level ozone in the atmosphere from 75 parts per billion (an already strict limit set in 2008) to between 65 and 70 parts per billion? While that may sound like a minor tweak, it would result in more than 300 U.S. counties falling into the "nonattainment" category, with another 200 counties at risk of not meeting (as in, hovering dangerously close to) the new ozone standard.

And under a rule finalized earlier this year, the agency can claim jurisdiction over any "waters" that are deemed to be adjacent to streams, wetlands and creeks, essentially stripping away broad regulatory power from states  and local jurisdictions. In the process, the EPA has opened landowners and ranchers up to a host of new permitting requirements, as well as potentially devastating fines and lawsuits.


A Power Plant, Zapped by EPA Overreach A Steel Manufacturer, Hammered by New Ozone Rules A Cattle Rancher, Trampled by EPA's Regulatory Stampede
Sean Hackbarth Royal Dutch Shell logo. Photo credit: Simon Dawson/Bloomberg.

After drilling a single test well, Shell chose to stop oil exploration off Alaska's Arctic coast.  The company made this decision not only because it didn't find as much oil and natural gas as hoped but because it faces a "challenging and unpredictable federal regulatory environment in offshore Alaska."

Talk about an expensive missed opportunity. 

Regulatory delays and constraints drove Shell to spend $7 billion on a single exploratory well, instead of multiple wells to get a better idea of how much energy was below. Nevertheless, Shell proved the technology and capabilities exist to safely drill for oil and natural gas offshore in the Arctic. The "kayaktivists" were proven wrong.

With the long time spans needed to get an Arctic energy projects up and running--upwards of 10 years--and demand for oil and natural gas growing, Shell's decision doesn't mean we should give up on Arctic energy development. And it certainly doesn't mean we should take Sen. Jeff Merkley's (D-Ore.) advice and shut it down completely.

Despite the fantasies of anti-energy activists and Sen. Merkley, demand for oil and natural gas isn't going away either in the U.S. or especially in developing economies as their middle classes grow.

eia_internationalenergyoutlook2014_oilconsumption.png  1990-2040.EIA: OECD and Non-OECD petroleum and other liquid fuels consumption: 1990-2040.Source: Energy Information Administration.

New energy sources will have to be tapped to satisfy this future demand. With its estimated 34 billion barrels of oil, the United States' share of the Arctic Ocean could play a part.

npc_arctic_energy_potential_800px.jpg National Petroleum Council chart on Arctic energy resources.National Petroleum Council chart on Arctic energy resources.Source: National Petroleum Council.

Innovation in energy development doesn't stand still. Ten years ago, no one would've guessed that hydraulic fracturing would upend global oil markets. The same could happen to make Arctic oil production even safer and more competitive under current market conditions. Abandoning U.S. Arctic energy development would only worsen this missed opportunity. With an oil rig off Norway's coast is about go into production, the question isn't "if" but "when." 

Because of regulatory uncertainty, offshore Arctic energy development that would have helped the U.S. and Alaska's economies is off the table for now. Instead, the state is focused on a proposed natural gas pipeline to export liquefied natural gas to hungry Asian markets. But looking forward, even if natural gas exports play a bigger role in its economy, a variety of energy sources will be important, as Matt Koch, Vice President, Institute for 21st Century Energy, wrote after President Obama's recent trip to Alaska:

Rather than telling Alaskans his plan for helping them, it is obvious that the President's trip would have been more meaningful and productive if he would listen to the Alaska natives' plan for helping themselves.  More access to offshore and on-shore fossil energy resources in Alaska would be wise, and increased production can be done safely, to the benefit of all Alaska and the United States.

With the right set of regulatory, permitting, and leasing policies in place, there could have been a different outcome. U.S. Arctic development must continue to play an important role in powering America's economy.