Read On:
Greetings!
You know the Obama administration hides unpopular policy by introducing it at times when people are not paying attention—one such time is the Wednesday afternoon just before Thanksgiving. It is my job, our job, to get these important, though hidden, issues out there so people know about them and can respond.
You probably know that within the bundle of thousands of new regulation that the administration released on Thanksgiving eve was new ozone standards. But, like me, you may not know how onerous they are as there has been very little news coverage on the topic. When I did my research, I was shocked at the potential impact of this proposed rule—it hits virtually every energy source and manufacturing.
In Welcome to the O-zone—where economic development is a zero-sum game (attached and pasted-in-below) I explain the rule and lay out the impacts—connecting dots that I have not seen connected elsewhere. This new rule needs to be viewed as being laid on top of all of the other regulations and for its ability to thwart oil and gas development and economic growth through manufacturing.
Commentary by Marita Noon
Executive Director, Energy Makes America Great Inc.
Welcome to the O-zone—where economic development is a zero-sum game
Late in the day on Thanksgiving eve, when no one was paying attention, the Obama administration released its Unified Agenda—a regulatory roadmap of thousands of regulations being finalized in 2015. Within the bundle of more than 3000 regulations is a rule on ozone that President Obama himself, in 2011, “put on ice” in an effort to reduce “regulatory burdens and regulatory uncertainty, particularly as our economy continues to recover.” Regarding the 2011 decision that shocked environmental groups, the New York Times (NYT) recently stated: “At the time, Mr. Obama said the regulation would impose too severe a burden on industry and local governments at a time of economic distress.”
So, why has the rule that the National Association of Manufacturers (NAM) calls: “the most expensive ever imposed on industry in America,” come back? First, Obama isn’t facing an election—which, while the White House denied it, most believe to be the reason for the 2011 about-face. More importantly, however, is the fact that following the 2011 decision that struck down the proposed ozone rule, environmental groups sued the Obama administration. The resulting court order required the Environmental Protection Agency (EPA) to release the proposed rule by December 1, with finalization by October 2015.
Once again, environmental groups—who, on September 21, came out of the closet and revealed that their true intention is system change (“capitalism is the disease, socialism is the cure”)—are in charge of America’s energy, and, therefore, economic policy. They have systematically chipped away America’s sources of economic strength: cost-effective energy. And we’ve let them.
What they are doing is reminiscent of the classic poem, attributed to pastor Martin Niemöller, which is quoted at the United States Holocaust Memorial Museum:
First they came for the Socialists, and I did not speak out—Because I was not a Socialist.
Then they came for the Trade Unionists, and I did not speak out—Because I was not a Trade Unionist.
Then they came for the Jews, and I did not speak out—Because I was not a Jew.
Then they came for me—and there was no one left to speak for me.
First, they came after coal. It was at a time when natural gas was cheap and touted as the “bridge fuel” to the future. No one much spoke out. Some in the natural gas business even encouraged the war on coal, as it benefitted them. When I first heard that then-Chesapeake Energy CEO Aubrey McLendon gave the Sierra Club $25 million to fight coal (it is reported that the Sierra Club turned down an additional $30 million), I remember yelling at the TV. “You fool!” I shouted. “You will be next!”
Within months, the Sierra Club launched its “Beyond Natural Gas” campaign that claims: “Increasing reliance on natural gas displaces the market for clean energy and harms human health and the environment in places where production occurs.” A headline on the Beyond Natural Gas webpage states that natural gas is: “Dirty, dangerous, and run amok.” Shortly thereafter, McLendon “agreed to retire.”
The oil industry didn’t make much noise about the Sierra Club campaign—after all natural gas prices were low and oil, high. While environmental groups generally oppose all fossil fuels, the oil industry has been hurt the least. Jobs in the oil sector of the energy industry have continued as the lone bright spot in the economy and increased U.S. production has cut our reliance on Middle Eastern crude to the lowest levels in three decades. Even as recently as November 5, President Obama bragged about decreased dependence on imported oil.
While the Obama administration hasn’t been vocally anti-oil, it has not made development easy. The permitting process for a new well on federal lands takes twice as long as it did previously. Environmental groups, with whom Obama is philosophically aligned, have continued to push for tighter regulations on hydraulic fracturing—even an outright ban (which would virtually shut down America’s new energy abundance). The Democrat-controlled New York state has already acquiesced to environmentalists’ demands.
Now, they are coming for oil-and-gas development and manufacturing through the just-announced 626-page ozone regulation, which will require states to dramatically reduce ozone emissions from the current 75 parts per billion (ppb) to a range of 65 to 70ppb—though environmental groups want a 60ppb standard which may be the final rule. While a 5-15ppb reduction doesn’t sound like much, it is important to realize that many areas of the U.S. are already out of compliance—including most of California—with the 75ppb level. The new regulations will mean that, depending on the final rule, 76-96 percent of the country—including some national parks where the natural background levels are 65-67ppb—will be out of compliance.
According to Howard Feldman, the American Petroleum Institute’s director of regulatory and scientific affairs, “earlier EPA analyses acknowledge the technology needed to achieve more stringent standards doesn’t exist.” Likewise, a NAM report, titled “Potential Economic Impacts of a Stricter Ozone Standard,” states that a majority of new reductions would have to come from “unknown controls.”
Ozone is an odorless gas that is not directly emitted into the air but is created by chemical reactions between nitrogen oxides (NOx) and volatile organic compounds (VOC)—which occur naturally but are also produced from the burning of fossil fuels and are released in the process of drilling for oil and natural gas. For example, even before the new proposed levels were announced, Colorado’s Front Range region is out of compliance with the current rules, “driven largely by emissions from fossil fuel processing.” A report in the Colorado Independent states: “The increase in ozone violations is primarily due to emissions from oil and gas drilling.” Electric utilities and chemical solvents are also sources of NOx and VOC.
“To meet the new standards,” the National Journal says: “states will have to form plans that will limit emissions of ozone-forming pollutants from two major sources: stationary sources such as power plants and factories, and transportation”—which will reduce energy intensive economic activity. The NYT reports: “The ozone rules are expected to force the owners of power plants and factories to install expensive technology to clean pollutants from their smoke stacks”—which will raise costs to families and business. Under the current rule, ozone levels, according to the EPA, have fallen in the U.S. 33 percent since 1980 and 18 percent since 2000.
The American Legislative Exchange Council explains the impact of the new ozone proposal this way: “Virtually every state’s ability to develop industry would be seriously jeopardized because emissions from each new stationary source would have to be ‘offset’ with emissions reductions elsewhere in the nonattainment area. In practice, this means that industrial development becomes a zero-sum game, whereby every new business requires the closure of existing business.”
No wonder NAM’s response is antagonistic: “Manufacturing in the United States is making a comeback,” Jay Timmons, CEO and President, said in a press release. “We’re reducing emissions at the same time, but tightening the current ozone standard to near unachievable levels would serve as a self-inflicted wound to the U.S. economy at the worst possible time. This rule would undermine our work to expand manufacturing in the United States, making it almost impossible to increase operations, create new jobs or keep pace internationally.”
Despite the negative economic impact of the expensive rule—with figures ranging from $19 billion to $270 billion—environmental groups believe Obama will follow through this time because, as National Journal states: “the rule fits with the rest of Obama’s climate change agenda and they’d expect it to move forward even on the tighter end.” The Sierra Club’s Washington representative on smog pollution, Terry McGuire, believes: “The administration is emboldened to do that.”
While environmental groups and the Obama administration maybe feel “emboldened,” more regulation—especially that which “would impose too severe a burden on industry and local governments”—is not what the American people want or need.
“The president said his policies were on the ballot, and the American people spoke up against them,” said incoming Senate Majority Leader Mitch McConnell (R-KY). “It’s time for more listening, and less job-destroying red tape. Easing the burden already created by EPA regulations will continue to be a priority for me in the new Congress.”
“Republicans,” according to National Journal, “have vowed to target the ozone standard as a part of their early energy agenda.”
Current Minority Leader of the Senate Environment and Public Works Committee, Senator Vitter (R-LA) and incoming Chairman, Senator Inhofe (R-OK) called the rule: “one of the most devastating regulations in a series of over-reaching regulatory actions.” In response to the November 26 announcement, House Majority Leader Kevin McCarthy promised: “The House will conduct aggressive oversight and use the proper legislative approach to continue to promote cleaning the air we breathe while ensuring our communities are not burdened with unrealistic regulations.”
With the Obama administration willing to sacrifice jobs and economic development for some perceived environmental legacy, it is time for unions to abandon the historic allegiance to the Democrat Party and realize that it is the Republicans who advocate for policies that protect the jobs in construction, manufacturing, mining, and energy—all well-paying positions that are often filled by union members.
It is time for capitalist, free-marketers to speak out.
It is time for trade unionists to speak out.
It is time for families, workers, and businesses to speak out.
It is time for the all of the energy producers—coal, natural gas, and oil—to speak out with one voice.
Because, if we don’t, there will be no one left to speak for us.
The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc. and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). She hosts a weekly radio program: America’s Voice for Energy—which expands on the content of her weekly column.
