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Happy Anniversary Keystone: Marking Six years of Missed Opportunity

Today we mark the sixth anniversary of TransCanada’s first application seeking a Presidential permit to build the Keystone XL pipeline from Canada to the United States. For most of the past six years this project has been with the administration awaiting final approval, with five different environmental reviews conducted and thousands of pages of reports and public comments collected.

Much has happened since the initial permit application was filed in 2008: more than 10,000 miles of oil and natural gas pipeline has been built in the U.S.; Fidel Castro stepped down as President of Cuba; two new countries were created Kosovo and South Sudan; four Olympic games have been held (Vancouver, Beijing, London and Sochi); and Apple released the IPhone 3, 4, 5 and now 6.

For further context on how this delay stacks up in the history books, just look at the array of larger and more complex projects built in a shorter time frame. For example, the 800 mile long Trans Alaska pipeline took just over two years to build. The iconic Hoover Dam was erected in just five years, the Empire State Building in just over one year, and San Francisco’s Golden Gate Bridge in less than five years.

The debate over Keystone is not just about ensuring we have a steady source of energy from a reliable trading partner; it’s also about jobs and the economy. The State Department says the project will create 42,000 jobs and add $3.4 billion to the GDP, jobs and economic growth that manufacturers and other workers desperately need.

Although there’s not much to celebrate, the NAM is marking this occasion with the release of a new video highlighting the facts about Keystone:


 

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House Charts Common-Sense Course for EPA and States to Work Together on Clean Water

Yesterday evening, the House passed H.R. 5078, the Waters of the United States Regulatory Overreach Protection Act, introduced by Rep. Steve Southerland (FL-2), by a bipartisan majority vote of 262-152.

The legislation would put the breaks on the Environmental Protection Agency (EPA) and the Army Corps of Engineers’ (Corps) efforts to expand jurisdiction over water traditionally regulated by states and local governments. The bill directs the agencies to work more closely in a consensus-based approach to determine what waters fall under the federal government and which waters fall under the purview of the state and local governments.

The NAM and Water Advocacy Coalition (WAC) have spent the last several years communicating our concerns EPA and Corps. Among other things, we have expressed strong concerns for how the agencies re-defined “waters of the United States” so that virtually any and all water would come under federal control. In short, if you control the water use then you control the land use, thus land use would depend on decisions made not at the local level but at the federal level.

Water is integral to manufacturing process whether it is as an input, as a part of the cooling process, or whether it is a bi-product of the manufacturing process. Manufacturers cool water, settle water, and transport water away from one process while also looking for ways to reuse water. Manufacturers deal with storm water and storm water systems. We must deal with water when we perform operations, maintenance, repair, construction, expansion and infrastructure projects. If  forced to apply for and received a Corp permit every time we clean out a cooling pond, repair a transmission line, or expand machine shop, it won’t take long before we lose the ability to do what we do best…manufacture, compete and create jobs!

If passed by the Senate and signed by the President, H.R. 5078 would be an important step towards a productive federal-state relationship that provides manufacturers with the regulatory certainty need.

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Canada Boosting Export Infrastructure While U.S. Projects Mired in Politics

Canadian officials have given the green light to expand coal export facilities, securing increased  investment and opportunities for (pacific or western) Canadian ports.

Meanwhile, in the U.S., state officials in the Pacific Northwest continue to delay the valuable investments in area ports that come with exporting U.S. coal.

Over $1.5 billion in private infrastructure investment has been proposed in the Northwest for coal and other commodities. Approving the new terminals would strengthen area ports – our closest gateway to Asia – and help make American exports more competitive.

Port expansion at Westshore Terminal in British Columbia and a long term renewal to export coal at the Port of Long Beach, California underscore the growing demand from Asia for U.S. energy, and the benefits meeting that demand provide to our vital ports.

There’s no reason the Northwest shouldn’t benefit from the expansion of port facilities which will increase jobs, stimulate the economy and increase our ability to export a range of commodities, including coal.

Moreover, looking to President Obama’s objective to double exports by 2015, if we hope to meet this goal, it’s essential that we act soon to develop robust, cutting edge facilities where we can safely and efficiently export our goods overseas.

The National Association of Manufacturers will continue to call on Washington State and Oregon State to invest in its own future and work to develop, not delay, the growth of these much-needed export terminals.

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Shocking news! Production of fossil fuels from federal and Indian lands fell in 2013.

The U.S. Energy Information Administration (EIA) noted today in their daily “Today In Energy” that  “Sales volumes of fossil fuels from production on federal and Indian lands in fiscal year (FY) 2013 dropped 7% from FY 2012, according to EIA’s recently released annual report. Crude oil production on federal lands increased slightly in FY 2013, but that increase was more than offset by decreases in coal, natural gas, and natural gas plant liquids (NGPL) production. Sales of fossil fuels from federal and Indian lands accounted for about 26% of total fossil fuel sales volumes in the United States in 2013.”

The EIA went on to note that, “Since FY 2003, sales of fossil fuels produced on federal and Indian lands have fallen 21%, driven by declines in natural gas production and coal production. From FY 2003 to FY 2013, total U.S. fossil fuel production increased by 14%, with a 34% increase in production from nonfederal, non-Indian lands offsetting the decline from federal and Indian lands.”

“One of the main drivers in the decline in sales of fossil fuels from federal and Indian lands is the drop in offshore natural gas production, even as total U.S. natural gas production has grown rapidly because of rising production from onshore shale resources on private lands. Federal onshore natural gas sales volumes have generally increased over FY 2003-13, overtaking federal offshore production in FY 2007.”

There are a couple of things worth noting from this update. First, the percentage of our fossil fuels coming from federal lands continues to drop despite the United States’ abundance of resources. Second, the percentage of natural gas coming from federal lands offshore continues to decline despite improved extraction technology. Third, although federal onshore natural gas production has increased slightly it has been dwarfed by natural gas production from private lands.

This year the United States has become the largest producer in the world of natural gas and oil. Just last week Bank of America  announced that U.S. oil production has now exceeded both Saudi Arabia and Russia production. This is due to the fact that “Oil extraction is soaring at shale formations in Texas and North Dakota…” Most all of this is taking place on private lands using ever improving extraction methods.

If we want to continue to reduce the amount of oil we import from unfriendly parts of the world then we need to increase our energy production from federal lands and we need to finish the Keystone Pipeline so we can import oil from our friends to the north, Canada. We need federal energy policies that make sense and allow our country to increase our energy security and avoid relying on oil that comes from volatile regions of the world.

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FERC Approves of LNG Terminal = Jobs and Economic growth!

Earlier today the Federal Energy Regulatory Commission (FERC) authorized Sempra Energy Corp’s, Cameron LNG terminal expansion project. The authorization permits Sempra “to site, construct and operate facilities to liquefy and export domestically produced natural gas.” In addition, FERC authorized the construction and operation of a pipeline and compression facilities. This is the second terminal that FERC has authorized and the first facility since April 2012.

In reaching this decision, FERC completed a comprehensive environmental review of the project and determined that the project would not have a significant impact. As part of this review FERC required Sempra to agree to some 75 conditions to further mitigate any “potential environmental impacts.”

The only remaining regulatory piece is that the Department of Energy’s needs to provide final approval for Sempra to exports to non-Free Trade Agreement countries. The project received conditional approval to export to non-Free Trade Agreement countries in February of this year.

The Cameron LNG expansion will lead to 3,000 direct new jobs and tens of thousands of indirect new jobs. The project will invest almost $10 billion dollars which will generate hundreds of millions of additional economic development as well as millions of dollars in new tax revenues to local, county, state and federal governments.

Energy and Manufacturing continues to lead the effort to get our economy back on track. This latest approval demonstrates the ripple effect a project of this magnitude has on local and the national economy. This project will impact the manufacturing supply chain and create new opportunities for manufacturers and create thousands of new jobs. There are a number of other LNG projects still waiting FERC approval to move forward with construction and operation. These other projects also promise to create jobs and economic growth.

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‘Waters of the U.S.’ Analysis Flawed, According to New Report

According to a new report released today, the EPA has significantly underestimated the economic impacts the proposed “Waters of the United States” rule will have on local communities and businesses. The analysis, authored by University of California-Berkeley faculty member and Brattle Group principal Dr. David Sunding, examines the U.S. Environmental Protection Agency’s (EPA) estimates of probable costs and benefits associated with the proposed rule, which includes a significant expansion of the term “Waters of the United States” to include previously unregulated waters such as fire and drainage ponds, certain streams and tributaries, storm water, roadside and other ditches.

Manufacturers continue to face an onslaught of overly burdensome rules, regulations, and guidance from the EPA. While appropriate regulations have clear benefits, Washington has developed a regulatory instinct that is holding back growth and harming our competitiveness. The rule will dramatically expand EPA’s regulatory reach and encourage the EPA to go back to the drawing board on this rule.

In the analysis, Dr. Sunding chronicles how EPA systematically excluded costs, underrepresented the acreage that will now become jurisdictional areas and used flawed methodologies to arrive at much lower economic impacts. Dr. Sunding concluded that the errors in the study are so extensive as to render it unusable for determining the true cost of the proposed rule. His report underscores the need for EPA to withdraw the rule and complete a comprehensive and transparent economic review.

The report was commissioned by the Waters Advocacy Coalition (WAC), which represents the nation’s manufacturing, construction, real estate, mining, agriculture, wildlife conservation, forestry and energy sectors. To learn more about the rule and its impact on manufacturers, click here.

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EPA Releases New Cooling Water Intake Rule

Late yesterday afternoon the Environmental Protection Agency (EPA) released their final rule on cooling water intakes at both power plants and manufacturing facilities. The EPA has been reconsidering this rule since May 2012 but this rule has been in process since June 2006. EPA was under a court order to publish the rule no later than May 16, 2014.

Section 316(b) of the Clean Water Act of the Clean Water Act “requires that the location, design, construction and capacity of cooling water intake structures reflect the best technology available for minimizing adverse environmental impact.” The regulations are estimated to impact over 1,065 manufacturing facilities, power plants, pulp and paper makers, refiners, chemical plants and metal manufactures. Almost half of the facilities impacted are manufacturing facilities.

Manufacturers have a number of concerns with this rule such as high compliance and mitigation costs and extensive endangered species reviews by the Fish and Wildlife Service.  This rule will impact numerous manufacturing facilities as operations will be required to mitigate the impact on aquatic life by using one of seven EPA approved options for meeting the “best technology available” requirements of the rule.

While a number of the newer plants and facilities may have already met these standards, numerous other facilities have not and will have to determine whether or not the economics of their operations will continue to make business sense. Manufacturers will need some time to better understand the implications of this rule on their operations and each facility will come to a different conclusion depending on location, operations, amount of water used and the cost of best available technology (BAT).

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Energy Efficiency Legislation Falls Victim to Politics

This week’s cloture vote on S.2262, “The Energy Savings and Industrial Competitiveness Act,” more commonly known as the Shaheen-Portman bill, failed on a near party-line vote of 55 yeas to 36 nays. Manufacturers are disappointed that this bi-partisan legislation was pulled for the second time this session from the Senate floor. The bill was pulled in despite of the fact that 78 Senators voted to bring the legislation to the Senate floor just last week.

Shaheen-Portman had incredible support across the political spectrum and included numerous provisions supported by both Democrats and Republicans. The bill helps to strength national building codes, establishes a Tenant Star program that encourages commercial tenants to be more energy efficient, establishes a pilot program, Supply Star, that would encourage the manufacturing supply chain become more energy efficient; encourages the federal government to be more energy efficient as they purchase new technology and requires the federal government to better measure energy performance and to be better designed to be more energy efficient.  Manufacturers think this bill makes a lot of sense and is good energy policy.

Perhaps the bigger story of this vote was that as consideration for S. 2262 came to a grinding halt the opportunity for a clean vote on the Keystone XL pipeline became collateral damage.  Senator Hoeven’s legislation to approve the Keystone XL pipeline, S. 2280, was tentatively scheduled for a vote later this week but with the failure of the Shaheen-Portman legislation this vote will not take place.

The NAM will continue to support S. 2262 whether it comes up again this session or next Congress — we believe it is a bill that should and can pass the Senate. In addition, we continue to strongly support the approval of the Keystone XL pipeline and urge the Senate to schedule a vote on S. 2280. We believe Keystone XL continues to be in the national interest and that from an energy policy stand point we need to quickly approve this project and secure the oil that is will bring to our national. We need leadership in the Senate not gamesmanship.

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Feds Need to Stop Dragging Feet in Energy Permitting

Just last week, the Congressional Research Service issued a report on “U.S. Crude Oil and Natural Gas Production in Federal and Non-Federal Areas.” This thirteen page report looked at the question of how much oil and gas is produced on federal lands as opposed to non-federal (state and private) lands. The energy and manufacturing sectors have maintained for the last several years that the uptick in energy production has occurred primarily on private and state lands, while production on federal lands has dropped by almost 11 percent since 2009.

The CRS report identifies several reasons for this drop in production, but the energy sector will tell you that much of this can be attributed to moratoriums, de facto moratoriums, delays in obtaining permits, and the regulatory uncertainty created by this administration and the economy. According to the report, the Bureau of Land Management (BLM) took an average of 127 days to process an application for permit to drill (APD) in 2006…127 days!! On the other hand, state Permits on state and private lands can take a little as five days.

Despite the federal government dragging their feet on permitting and energy production, the shale gas revolution has continued to thrive on private lands, resulting in an significant uptick in production and causing many manufacturers to relocate or build facilities in the United States. The results have been an increase in jobs, lower dependence on foreign energy and a more globally competitive U.S. manufacturing sector. Further, growth in the energy and manufacturing sectors has helped reduce our trade deficit.

We need the federal government to be strong partners as we work to rebuild our economy and become more energy independent. Overregulation, moratoriums, and slow federal permitting processes only serve to stifle this important growth.

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Manufacturers Deeply Concerned about WOTUS Proposal

On Tuesday, March 25, the Environmental Protection Agency (EPA) and the Army Corps of Engineers (Corps) released a copy of the proposed Clean Water Act rule on the Waters of the United States (WOTUS). The rule’s intended purpose is to clarify current regulations on EPA and the Corps’ jurisdiction over “navigable waters” of the United States, but unfortunately it has only created more uncertainty.

The proposed rule expands their jurisdiction to further regulate things such as fire ponds, dry ditches, ephemeral or seasonal streams, cooling ponds, isolated mosaic wetlands, snowmelt and storm drainage ponds. In doing so, this will significantly impact manufacturers’ ability to build new or expand existing facilities, and in some cases it will impact the ability to conduct day to day operations.

There are hundreds of activities that currently do not require a clean water permit, but with this new rule many of these activities will now need a permission slip from the government; or at the very least require companies to inquire of the agencies to determine if a permit is necessary. Waiting for these agencies to respond could take anywhere from weeks to months.

Another troubling aspect of this proposed rule is that the EPA chose not to wait for a final peer review of their “Connectivity of Streams and Wetlands to Downstream Waters: A Review and Synthesis of the Scientific Evidence” study. This study has been touted as the basis of the rule, but has not been peer reviewed by the EPA’s own Science Advisory Board (SAB). Further, a number of members of that board raised concerns with deficiencies in the report at a recent meeting.

Manufacturers are concerned about the negatives impacts and uncertainty that this rule will create, and will continue to provide input to the EPA and Army Corps.

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