The Energy Information Agency in March published the break down in sources of U.S. Electricity Generation, 2011. It showed 42 percent of all electricity in this country is generated by coal. Next is natural gas at 25 percent. Nuclear is 19 percent, followed by hydropower at 8 percent. Wind produces 3 percent of our electricity with biomass produces about 1 percent. While petroleum, geothermal and solar all produce less than 1 percent each. These are all valuable components of our energy strategy.

Earlier this week I noticed that on “all of the above” section of President Obama’s campaign website, coal and hydropower have been left out! Coal plays such a vital role in our nation’s energy supply at 42 percent. It has to be a part of the conversation about an “all of the above” energy strategy.

By taking clean coal completely off the table, you could see an increase in electricity prices which will directly harm manufacturers’ ability to compete and create jobs. Taking coal offline through the EPA regulations is already threatening our power grid and causing reliability problems.

Later in the week I heard that coal was back on the President’s “all of the above” list so I pulled up the webpage and sure enough coal was back “in” but where was still no hydropower.

Hydropower produces more electricity than all the other renewables combined. According to EIA over half of the hydropower generated in this country comes from three states: Washington, Oregon and California.  Hydropower is clean, renewable and affordable.

Manufacturers need energy to produce products. Without energy this country cannot produce anything. We need energy from all sources and we cannot afford to take one source out of the mix. So when you see the phrase “all-of –the-above” I guess you need to ask yourself the question, “that depends on how you define the word all?” 

Chip Yost is associate vice president of energy and resources policy, National Association of Manufacturers.

The Energy Information Agency (EIA) noted on its daily “Today In Energy” that wholesale electricity prices in Texas spiked on April 26^th due to warmer weather. I wonder if the Environmental Protection Agency (EPA) knows about this and is wondering what its efforts to close down coal powered utility generators will do to both supply and prices in states like Texas, Missouri, Ohio, Michigan as temperature climb during the summer months?

The EIA announcement states:  

“Warmer-than-normal temperatures across Texas drove the hourly, day-ahead wholesale electricity prices between 5:00 p.m. and 6:00 p.m. on April 26 and 27 above $500 per megawatt hour (MWh) in ERCOT, the electric system operator for most of Texas. Very high prices for just part of an upcoming day, especially during “super peaks”, can yield high average prices for the entire on-peak period. Prices for on-peak power in ERCOT were about four times higher than most other major power markets during that week.”

As the EPA promulgates the Utility MACT regulation, the Cross-State Air Pollution Rule (CSAPR), and the New Source Performance Standards for coal-fueled utilities, it does it the name of the environmental benefits. The fact is, however, that the incremental benefits compared to high costs placed on utilities will do far more harm than good. There will be substantial job losses in the utility and coals sectors. There will be a significant ripple effect as communities lose jobs and as electricity prices increase by double digits. (continue reading…)

The Nebraska State Legislature passed LB 1161 this afternoon on a 44-5 vote that brings TransCanada closer to finding a new route for the Keystone XL pipeline in Nebraska. This is positive news as it means TransCanada is that much closer to applying for another Presidential Permit to build the pipeline across our border with Canada. Approval of the pipeline means jobs and access to an affordable source of energy.

Gov. Heineman is expected to sign the legislation which will allow TransCanada to work with the Department of Environmental Quality (DEQ) to find a suitable route for the Keystone XL pipeline. The legislation also gives the governor 30 days to review the route and indicate whether or not they approve of the routes reviewed by DEQ

We cannot forget this project could have been well underway if the President had signed the permit last fall. This is the prime construction season and as many as 20,000 people would be working or gearing up to work on the project. The ripple effect through the economy, not only in the Midwest but throughout the country, would have been substantial – creating 118,000 jobs.

It’s unfortunate that the creation of these jobs will have to wait because the President put politics before policy and jobs. This only hurts our nation’s job creators who are struggling with high gas prices.

We need a common sense “all of the above” energy policy that provides us with greater stability and access to energy from domestic and friendly sources. A true “all of the above” strategy includes the Keystone XL pipeline and expanded domestic exploration and drilling. Manufacturers can’t afford to wait. This time around we hope the President approves Keystone XL as soon as possible. 

Chip Yost is vice president of energy and resources policy, National Association of Manufacturers.

The NAM has been and will continue to be a vigorous supporter if an “all-of-the-above” energy strategy.  Renewable energy is an important component of this strategy.

Manufacturers use one-third of the energy consumed in the United States, so secure and affordable energy is critical to their efforts to expand and create jobs. The renewable energy sources today provide us with a source of clean energy and give us a glimpse of what the future holds. Our nation’s policies should encourage the development of all resources, but it should let the marketplace drive those choices and not pick winners or losers.

Two important renewable sources are wind and solar. As we harness the power of the wind and the sun more efficiently, we will find the demand will only increase. We need sound federal policies that support the development and deployment of technologies to harness these platforms. Such policies not only support more access to additional forms of energy—they also support jobs. According to a recent report from SEMI, the global solar industry has the potential to create 10 million jobs in the coming years.  Another report notes that Congress has the opportunity to boost employment in the wind manufacturing sector to 46,000 in the next few years.

One of the difficulties the industry faces is the uncertainty of the Production Tax Credit (PTC), which is set to expire at the end of the year. Companies must make production and business decisions now for next year. The clock is ticking for renewing the credit—and we all know how slowly Congress moves.  Companies are making key decisions now and the longer Congress waits to provide certainty and approve key tax incentives the more manufacturing jobs are put in jeopardy.

If we want an “all of the above” approach to our energy challenges then we need to show that we are truly committed to this concept and take appropriate action. The development of energy, whether renewables, coal, oil, nuclear or gas, takes time and a commitment. A stop and go approach does not serve our country or our economy very well.

Today the Nuclear Regulatory Commission (NRC)  approved two more nuclear reactors for SCANA’s V.C. Summer plant near Jenkinsville, South Carolina. These are the third and fourth reactors to be approved this year. The first two were the Southern Company’s Vogtle reactors in George which were approved in February.

This decision today by the NRC is another positive step forward in utilizing all sources of energy. Manufacturers are users of one third of the energy consumed in the United States and we are the largest manufacturing country in the world. This makes having access to affordable and reliable sources of energy paramount to our ability to remain competitive.

A true “all of the above” energy strategy must include the continued development of nuclear energy. We’re hopeful that the NRC will move forward with streamlining the licensing and permitting process to allow for the construction of additional facilities in the future.

The construction of new nuclear plants not only helps provide an affordable and secure source of energy but it will create 3,000 thousands long term construction jobs and furthermore, these projects will create as many as 800 career-long jobs for each of the four projects.

The economic impact on the state and local governments should not be under estimated.  These projects will employ thousands of manufactures and create economic activity all over this country. Manufacturers are leading the way in this recovery. We hope that Washington will work with us or get out of the way!

Chip Yost is vice president of energy and resources policy, National Association of Manufacturers.

Energy prices are continuing to climb higher and higher, putting more pressure on consumers and businesses. When gas prices increase it takes a toll on manufacturers as transportation costs increase throughout the supply chain. These increased costs will impede manufacturers’ ability to expand and create jobs.

Today House Republicans rolled out a plan to help lower gas prices which includes expanding domestic exploration and drilling as well as expediting permitting for energy production on federal lands. We are pleased the debate on this important issue to our nation’s competitiveness is moving forward in the halls of Congress.

Manufacturers support a real “all of the above” energy strategy to lower gas prices and improve our energy security. We understand there are many forces at play in the global markets that determine the cost of gasoline. We also know that for too long this country has refused to develop and fully utilize its energy resources.

It is time to get on a path towards energy independence and self-reliance. We may never have the ability to determine the price of a barrel of oil, but one day we could be in a position where we are producing more oil domestically and won’t have to worry about where our oil is coming from. In the meantime, let’s start preparing today for energy independence tomorrow.

At this critical time in our economic recovery we cannot afford to take options off the table when it comes to affordable energy. We need expanded domestic production, both on and off shore, and a plan in place to work with our North American allies on developing additional resources and approval of the Keystone XL pipeline. We are hopeful Congress will take serious steps in moving forward with policies to lower the energy costs to bolster manufacturers’ competitiveness and create good, high-paying jobs.

Chip Yost is vice president for energy and resources policy, National Association of Manufacturers.

Late Friday afternoon the U.S. District Court for the District of Columbia issued a ruling on the Mingo Logan Coal Company case.  This case was important because the question at hand was could the Environmental Protection Agency (EPA) withdraw a permit issued by the Army Corps of Engineers (Corps). 

The EPA withdrew its approval of certain creeks as disposal sites for a mine four years after it had given its assent to a permit issued by the Corps. The Mingo permit had always been in compliance and there was no question in that regards. EPA had simply changed their mind and revoked the approval of the disposal sites.

Arch Coal, owner of the Mingo Logan Coal Company, sued EPA and challenged their authority to veto the permit after the fact. The District Court agreed with Arch Coal that EPA exceeded their authority under the Clean Water Act when they attempted to invalidate an existing permit.  The court concluded that Clean Water Act does not give EPA the power to render a permit invalid once it is issued by the Corps.

What does this all mean? First, that the EPA has finally reached a point where even the U.S. District Court for the District of Columbia had to say no and slap their hands. Second, it means that EPA actually has to follow the law and can’t do whatever they darn please. Third, it means that businesses can rely on federal permits. Although it may cost them hundreds of thousands of dollars and years of effort to obtain a permit, once they make the investment and get the permit, the EPA can’t simply change their mind and veto it.

The court described the EPA’s actions, “It posit[ed] a scenario involving the automatic self-destruction of a written permit issued by an entirely separate federal agency after years of study and consideration. Poof!” Judge Amy Berman Jackson went on to say that “EPA resorts to magical thinking” when coming up with a reason to  try to nullify the permit.

Even if the agency were accorded some deference under administrative law procedures, the agency’s interpretation was unreasonable and could not stand. The judge also cited the NAM’s amicus brief to show that eliminating finality from the permitting process would have a significant economic impact on industry, in turn making EPA’s assertion of power less reasonable. This was a significant victory for manufacturers and the rule of law.

If this were not enough, the Supreme Court ruled 9-0 against the EPA in the Sackett case, which involved two landowners in Idaho who attempted to build a home on their property. After they got local building permits and started work, the EPA ordered them to stop and turn the land to its previous condition, or face huge daily fines. They sued to challenge the EPA’s order.

The EPA maintained that the owners had no right to take them to court to contest whether or not there had been a violation of the law. The Supreme Court ruled that the EPA can’t deny landowners their day in court.

These are rulings that send a clear message to the EPA that it is no longer business as usual. It’s important for the EPA to work with land owners and businesses, instead of trying to veto existing permits or imposing fines and other penalties that will cost jobs and harm the economy.

Chip Yost is vice president of energy and resources policy, National Association of Manufacturers.

Today the White House announced that they would press the World Trade Organization to open talks with China over their export policies of rare-earth minerals.   The NAM applauds this initiative, and particularly the fact that it is being done in conjunction with the European Union and Japan. Having the three economies do this together keeps this from being a bilateral tit-for-tat situation and increases the pressure on China.  The U.S. recently won a WTO case against China’s export restrictions on nine other industrial inputs, and China should get the message this case will be won as well – and they are better off by ceasing this trade-distorting practice rather than having to go through the WTO procedures.  China is now the world’s largest exporter, and needs to adhere to its global WTO obligations.

Also today, Senator Lisa Murkowski (AK-R) spoke to the Tech and Rare Earth Metals Forum about the importance of rare-earths. Politico reported that she said, “It’s one thing for the President to recognize these minerals are critical, it’s another thing to recognize we have opportunities in this country and we should be doing more to try to access them.”

Rare-earths consist of 17 elements that are important for numerous manufacturing applications, such as: renewable energy products, chemicals, catalysts for petroleum refinery, defense applications, consumer electronics, wind turbines, and hybrid car batteries to name just a few uses.

Although these minerals are called “rare,” they are abundant and can be widely found in many countries. In comparison to other minerals, however, a rare earth mineral is hardly ever found in one concentrated form. These elements are found in the earth crust but must be extracted and processed at great expense.  Until a decade ago, the United States was 100 percent self-reliant, with domestic companies producing enough to supply U.S. manufacturers.  Over time, however, U.S. production was halted, as it became economically and environmentally cost prohibitive and as Chinese mining and production came on line. While a few nations produce rare earth minerals, China currently produces 97 percent of the world’s supply. China is also a major user, consuming roughly 60 percent of what it produces.

Generally, there are no alternatives for these minerals.  Manufacturers are facing some supply chain shortage of these minerals and they have experience significant cost increases over the last 18 months. Companies in various countries are looking at reopening closed mines (especially in the U.S. and Australia) and developing new deposits, but these efforts will take a number of years to fully come on line. There are several companies in the U.S. that are looking to restart rare-earth operations but these companies face considerable regulatory and financial hurdles. 

For the time being we can get most of what we need from China but at some point we need to be more self-sufficient and not rely on others for materials that are so critical to so many different aspects of our lives. Our current situation is not unlike our situation with oil. Yes we can purchase it from foreign sources but wouldn’t we all feel better if we could meet our own needs or at least a portion of our needs? We need our leaders in government to take a long term view of our natural resources needs. It is not a spigot that we can easily turn on and off.  We must make a commitment to utilize our resources in a way that protects the environment and provides manufactures with the raw materials they need. The time for talking is past. It is time to do something about this critical need. If manufacturers are going to continue to creates jobs and be a leading force in the economy we need to have access to raw materials and have a government that works with us and takes a longer term view of the economy.

It’s extremely disappointing the Senate failed today to take a stand for jobs and manufacturers by voting down important amendments to the transportation bill that would delay the harmful Boiler MACT regulations, expand exploration of the Outer Continental Shelf and approve the Keystone XL pipeline project. Senators failed to pass these amendments which would have saved jobs, created jobs and injected the economy with new life. 

There were 52 votes in support of the Collins amendment. Lisa Jackson, the Administrator of the Environmental Protection Agency (EPA), has spent much of the past eight days up in the Senate meeting with Democratic Senators trying to convince them that there was really no need for the Senate to pass legislation. The standards the EPA has put forward are not achievable with our current technology, and the EPA knows this.

Manufacturers want reasonable and achievable regulations. They want some degree of certainty. They want government to quit trying to pick winners or favorites.

The Vitter amendment to expand drilling in the Outer Continental Shelf (OCS) was rejected on a 46-52 vote. Senators need to realize that every barrel of oil produced in North America is another barrel that we don’t have to pull from somewhere else in the world. The more sources of oil and the more supply of oil means energy will be more affordable for manufacturers and that means more jobs. The Vitter amendment would open up vast tracks of the OCS to oil exploration and make the country more self-reliant.  (continue reading…)

This week the Secretary Salazar, Department of Interior (DOI), sent proposed draft regulations to the White House on hydraulic fracturing activity on federal lands. Typically the regulation of oil and gas development has been the domain of the states. However, in this case Secretary Salazar felt compelled to provide the states with model regulations.

Deputy Interior Secretary David Hayes explained that these new regulations would be compatible with existing regulations in Texas, Wyoming and other states. This statement begs the question, if Interior’s proposed regulations are going to be compatible with current state regulations why do they feel the need to draft these regulations in the first place?

The regulations in Texas, Wyoming, Colorado and Pennsylvania are all fine blue prints that other states can follow – they don’t need the DOI to create new federal regulations! The proposed draft regulations are reported to require disclosure of the chemicals used in the fracturing process and likely do not provide companies with adequate protection of confidential business information (CBI).

President Obama said in his State of the Union Address that he wanted to pursue an “all-of-the-above” energy strategy. That strategy needs to include the development of natural gas and fracking. According to a study by PwC and the NAM shale gas development can create more than a million manufacturing jobs in the next ten years.

The shale gas revolution has already created thousands of new jobs and revitalized a number of communities across the United States. The supply of natural gas has been a boon to manufacturers that use natural gas as a feed stock and as a fuel, but this Administration appears set on slowing domestic natural gas production. Three agencies are looking for ways to regulate shale gas: EPA, DOE and DOI. If this Administration is allowed to regulate hydraulic fracturing in the manner they desire, you can be sure that our abundant domestic supply of natural gas will greatly diminish.

Chip Yost is vice president of energy and resources policy, National Association of Manufacturers.