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Obama Denies Keystone XL Pipeline, Choosing Politics Over Policy

Last Friday, President Obama announced his decision to deny TransCanada Corporation its permit to construct the Keystone XL pipeline.

Not only did the President disappoint manufacturers across the country, but he also made a historic mistake. After seven years of waiting for a decision on this permit application, this decision is a clear signal that the United States isn’t open for business for everyone. It also undermines the existing permitting process—one that is supposed to set clear rules of the road for companies to meet to secure approval. The Administration continually raised the bar for approval of Keystone XL, and every time TransCanada met (or exceeded) it, the Administration raised it again. (continue reading…)

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Clean Power Plan Poses Great Challenges for Manufacturers

Manufacturers have long demonstrated their commitment to environmental sustainability and reducing greenhouse gas (GHG) emissions. Since 2005, manufacturers’ annual GHG emissions have fallen by more than 10 percent while our value added to the economy has increased by 26 percent. We are producing more, while emitting less. In addition, manufacturers’ technological innovations and ingenuity have been integral in U.S. annual emissions falling by 700 million tons since 2005, which is a reduction greater than any other nation in the world. (continue reading…)

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Arctic Lease Cancellation a Cruel Blow to Innovation

Late Friday afternoon, a time particularly convenient for the announcement of unpopular decisions, the Department of the Interior announced it would cancel oil and gas lease sales in the Arctic and not renew existing leases to Shell or Statoil. The move effectively closes the door to oil and gas exploration in these resource-rich areas.

The immediate sting comes from broken promises, as the Administration has done a full 180 on its prior commitment to develop oil and gas on American soil. But the longer-term pain may come from the stifling impact these new barriers will have on innovation.

The Administration made development of Shell’s existing lease as difficult as humanly possible, and Shell stepped up and was able to drill its wells while keeping the environment safe. The new technologies, processes and techniques developed during the Arctic exploration will be used ‎throughout Shell’s operations around the world to make those wells safer.

That’s how innovation happens: you have to do it and learn from it. Yet, today, it became clear that the Administration would prefer oil and gas exploration not be done at all. It’s become an all-too-familiar theme across energy-producing sectors. And it’s the wrong decision every time.

Friday’s announcement spells danger for development promised by the President off the Atlantic coast and for the 2017-22 leasing plan. It could signal trouble for energy export terminals and that still-yet-to-be-approved pipeline from Canada to the United States you may have heard about once or twice.

Manufacturers hope this Administration or a future one wi‎ll come to see the error made today and reverse course. And we continue to call on this Administration to remove barriers to the development of energy, instead of erecting new ones.

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If National Parks Can’t Comply with New Ozone Rules, How Can Your Community?

Today, the National Association of Manufacturers launched a TV advertising campaign highlighting the costly and unworkable ozone mandates coming out of Washington, D.C.

Not even the nation’s pristine wilderness areas can comply, according to a TV spot hitting the airwaves today in the nation’s capital. Ask yourself: If iconic national parks like Yosemite, Grand Canyon and Zion are found in violation of federal ozone standards, what does that mean for cities and towns where people actually live and work?

(continue reading…)

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Senate Energy Package Advances LNG Exports, Energy Efficiency and Other Manufacturing Priorities

In a town where cooperation is often hard to come by, the Senate Energy and Natural Resources Committee has long been a place for where bipartisanship has thrived. Regardless of the party holding the gavel, members were always willing to put politics aside and work together to tackle the challenges and embrace the opportunities provided by our complex, ever-changing energy policy.

This week is no different. Today, the committee will hold a markup of the Energy Policy Modernization Act, a bipartisan measure introduced by Chairman Lisa Murkowski (R-AK) and Ranking Member Maria Cantwell (D-WA). The 357-page bill addresses a wide range of issues designed to promote an “all of the above” approach to energy. (continue reading…)

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House Testimony, Manufacturing Caucus Bookend Busy Week on Ozone

Despite the fact that it’s widely expected to be among the most costly regulations in our nation’s history – if not the most costly – the EPA’s proposal to tighten ozone standards has managed to stay somewhat below the radar in recent months.

For the manufacturers that make up our membership, this is a big problem, because the administration’s proposal threatens to badly undermine the circumstances that have helped to spur our nation’s manufacturing comeback. The impacts would be no less profound for the public at large, which would face higher energy prices, the prospect of millions of lost jobs, and well over a hundred billion dollars each year in costs. Given the stakes, we are eager to raise the profile of this critical issue. This week, we hit Capitol Hill alongside hundreds of our members to help make sure that lawmakers are listening to their constituents, and that they recognize the danger that this new rule represents.

On Wednesday, NAM and several of its member companies participated in a briefing for the House Manufacturing Caucus aimed at illustrating for lawmakers the concerns harbored by businesses large and small about the new ozone standard. In that meeting, we heard from NAM members and policy experts, who told members, staff and stakeholders more about the struggles that ozone nonattainment will mean for their communities.

Also on Wednesday, the Senate Environment and Public Works Committee heard from local regulators, air quality managers, and more regarding the EPA’s proposal.

And finally, on Thursday, I testified before the House Committee on Science, Space, and Technology regarding the impact of EPA regulatory overreach on American competitiveness. In my testimony, I pointed to the drain that burdensome environmental regulations are causing for American businesses especially manufacturers.

“Why does this proposed ozone regulation matter? Because nonattainment is a significant barrier to growth. Nonattainment is a significant deterrent to manufacturers to build or expand in an area because the permits are so difficult to obtain compared to those in an attainment area. Companies building or expanding facilities in nonattainment areas are required to install specific technologies regardless of cost, and projects cannot move forward unless ozone is reduced from other sources.

These “offsets” are neither cheap nor easy to obtain. Currently, offset prices in the Houston-Galveston-Brazoria nonattainment area are close to $175,000 per ton of NOx and $275,000 per ton of VOC. Offset prices in southern California nonattainment areas are approaching $125,000 per ton of NOx. Rural areas, which could become new nonattainment areas under a tighter standard, may lack offsets altogether, making the offset requirement a total barrier to new projects.

“Even manufacturers not looking to expand will be subject to restrictive new regulations in nonattainment areas. For instance, in the Houston nonattainment area, existing facilities are subject to additional controls under the Highly Reactive VOC (HRVOC) rule, and combustion units, such as boilers and ethylene crackers, must install SCRs and low-NOx burners. In the most severe cases, states with nonattainment areas could lose federal highway and transit funding.”

The surge of attention paid to this issue over the course of the last few days is encouraging. It means that leaders and newsmakers inside the Beltway are picking up on the chorus of concern growing at the state and local level, not just from our members and others the business community, but from local regulators, mayors, and countless others that are staring down the barrel of this rule.

But despite a productive week, we have a long way to go. We’re less than four months out from the issuance of the costliest rule in the history of the United States – a regulation that threatens to stop the manufacturing comeback in its tracks. We – along with our members and countless other stakeholders concerned by this rule – will continue our work to highlight the importance a stable regulatory environment to our nation’s economic outlook.

The stakes, after all, have never been higher.

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Rep. Scalise, Sen. Capito introduce Legislation to Improve Air Permitting

Last week, Rep. Steve Scalise (R-LA) and Sen. Shelley Moore Capito (R-WV) introduced H.R. 2557/S. 1425, the “Promoting New Manufacturing Act,” in the House and Senate. The NAM has been a longtime supporter of this bill, on which we testified and supported with a Key Vote Letter in the 113th Congress.

The Promoting New Manufacturing Act would make a series of relatively simple enhancements to the air permitting process to enable manufacturers to get their permits quicker while allowing the EPA to continue to protect the environment. It would create a permitting dashboard, requiring EPA to publish information on the regarding the estimated number of permits issued annually and timelines for making final permit decisions; it would require that if the EPA Administrator establishes or revises a national ambient air quality standard (NAAQS), the agency publish implementing regulations and guidance at the same time, including information regarding the submittal and consideration of preconstruction permit applications; and it would require EPA to report annually to Congress on actions being undertaken by the agency to expedite the processing of permit applications. (continue reading…)

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President Signs Energy Efficiency Legislation into Law

Manufacturers use almost 30 percent of the energy consumed in the U.S., and in many instances it is our single largest expenditure. To continue to be competitive in a global economy we need to be more energy efficient. Yesterday the President signed into law S. 535, the Energy Efficiency Improvement Act of 2015, from Senators Jeanne Shaheen (D-NH) and Rob Portman (R-OH). The bill will loosen efficiency standards for grid-enabled water heaters, increase efficiency in government data centers and promote efficiency in commercial, residential and federal government–owned buildings. Previously in the 114th Congress, a version of the legislation, S. 128, was adopted as an amendment to a separate bill (S. 1, to approve the Keystone XL pipeline) but was vetoed by the president on February 24. The House passed a similar energy efficiency bill, H.R. 2126, in the 113th Congress by a vote of 375-36, but the Senate never acted on that measure.

The new law will establish a program called “Tenant Star” that will certify and recognize commercial building tenants for achieving high levels of energy efficiency, as well as require the General Services Administration to develop model commercial leasing provisions to encourage commercial building owners and tenants to invest in cost-effective energy and water efficiency measures. Energy efficiency and conservation offer immediate and cost-effective opportunities to reduce energy cost inputs both in the public and private sectors. Today’s commercial, public and residential buildings use almost 40 percent of the energy consumed in this country. The NAM has long supported this bi-partisan effort to strengthen the public/private partnership to support a more energy-efficient economy, while driving economic growth and private sector job creation. While this is a great first step for energy efficiency in this Congress, we hope it will not be the last.

Manufacturers are leading the way in the area of energy efficiency. Our facilities, shop floors, production, and transportation systems much more efficient than they were 10 or 20 years ago. And many of the products we make enable other sectors such as industrial, commercial, government, residential and retail to be more energy efficient as well through the use of advanced technologies and innovations pioneered by manufacturers and their supply chain. Everyone agrees that we need to be smarter about the way we use our energy resources. And manufacturers are pleased to see this Congress not allow politics to get in the way of sound energy efficiency policy.

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Timing is Everything: Why Changing the Ozone Standard Now is All Cost with Little Gain

Last week, I wrote an editorial on Inside Sources highlighting the EPA’s chronic underestimation of the economic costs of its largest regulations. The largest of these by far has been the EPA’s proposal to tighten the National Ambient Air Quality Standards (NAAQS) for ozone from the current level of 75 parts per billion (ppb) to a point somewhere between 65 and 70 ppb. Over the past year, the NAM modeled the costs of a potential standard at 65 ppb and 60 ppb, each time concluding that the regulation would be the “most expensive regulation ever.” Recently, EPA Administrator Gina McCarthy testified before Congress that only eight counties would fail to meet a new ozone standard of 70 ppb in 2025 in a business as usual scenario—in other words, if EPA simply let states and businesses comply with the 75 ppb standard set in 2008 and the dozens of other regulations on the books that will drive ozone levels lower. (continue reading…)

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Cost Estimates for EPA’s Greenhouse Gas Regulations Continue to Rise

Last week, the Obama Administration’s former regulatory gatekeeper, Cass Sunstein, penned what I thought was a very realistic article on climate change attitudes in the U.S. He noted, quite correctly, that it is a paradox: a majority of Americans believe we need to act, but they also refuse to pay anything in exchange for that action. This, as Sunstein notes, is not a new problem, but rather one that stretches as far back as the Kyoto Protocol in 1990.  We found this in a poll of our own just a few months ago: more than half of the respondents polled on the EPA’s greenhouse gas regulations were unwilling to pay a single dollar more for energy to accommodate the new requirements. (continue reading…)

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