In this town, it’s a rare occurrence for a room full of lobbyists to be truly surprised.  This morning was one of those times.  In remarks to the American Alliance for Innovation, a coalition of industry trade groups of which the NAM is a member, Sen. David Vitter (R-LA) announced today that he was introducing his long-awaited Toxic Substances Control Act (TSCA) reform legislation . . . except that rather than introducing an “alternative” bill to legislation from Sen. Frank Lautenberg (D-NJ), he had instead drafted a brand new bill with Sen. Lautenberg that they were introducing along with over a dozen other Republicans and Democrats.

We commend Sens. Vitter and Lautenberg for their leadership and for achieving a far too rare feat in Washington: coming together in bipartisan fashion to propose badly-needed reform to a federal law impacting human health, manufacturers in all sectors, and American innovation.

Manufacturers are committed to producing safe, innovative and sustainable products that provide essential benefits to consumers while protecting human health and the environment. To accomplish this, we believe Toxic Substance Control Act (TSCA), the primary statute regulating the manufacture and use of chemical substances in the United States, should be modernized. However, we worried that the debate over how to reform this outdated law would fall prey to partisan politics, much like the vast majority of other environmental and energy issues in recent memory.

Today at least, it appears that bipartisanship can prevail. We believed Senators needed to start from scratch; it appears that they did. We believed there needed to be broad stakeholder input; once again, there was. And there needed to be some way to bridge the substantive divide between Sen. Lautenberg’s Safe Chemicals Act, which industry opposed, and this new bill being drafted by Sen. Vitter.  The Senators made it happen. (continue reading…)

This morning, the Washington Post editorial board again called for a carbon tax with the piece “Carbon tax is the best option Congress has.”  It’s the second time in the last two months (and fourth in the past six months) the Post has called for this tax, which has the potential to hurt jobs and our economy. It’s a surprising amount of attention for a concept that has little to no political legs in Congress.

Congress isn’t talking about a carbon tax because when a cap-and-trade bill like Waxman-Markey is labeled a “job-killing energy tax” and can’t win support in the Senate, it’s hard to get behind a bill that would impose an actual energy tax.

Also, a carbon tax does not appear to be the economic or environmental panacea the Post is making it out to be.  A recent economic study for the NAM conducted by the nonpartisan NERA Economic Consulting looked at two carbon tax scenarios: one levied at $20 per ton increasing at 4 percent, and the other designed to reduce carbon dioxide (CO2) emissions by 80 percent. In both cases, any revenue raised by the carbon tax would be far outweighed by the negative impact to the overall economy.

Both cases would hurt families and businesses, resulting in higher prices for natural gas, electricity, gasoline and other energy commodities.  The $20/ton case reduces U.S. CO2 emissions by only about 30 percent, a much smaller amount than was called for in Waxman-Markey and by leading climate advocates.  To get to the levels they are seeking, 80 percent reductions by 2050, the economic costs skyrocket. (continue reading…)

Yesterday, during a House Energy and Commerce Subcommittee hearing, former Sens. J. Bennett Johnston (D-LA) and Byron Dorgan (D-ND) stated their case for allowing the United States to export its vast energy reserves.  The Department of Energy is currently reviewing applications to export natural gas, and we expect a decision on at least some of the applications soon.  At the same time, the Army Corps is in various stages of permitting for expanded coal export capacity in the Pacific Northwest.  Both sets of export projects have received significant attention and scrutiny in Washington, D.C.

Sen. Dorgan spoke on behalf of the Bipartisan Policy Center (BPC), a nonprofit that boasts both Republican and Democratic members of Congress among its staff, as well as leaders from industry and environmental groups on its board of directors.

According to Sen. Dorgan, the BPC’s Energy Board reviewed the recent studies on the impacts of LNG exports and “concluded that domestic gas prices are more likely to drive export levels than exports are likely to determine domestic prices . . . that LNG exports are likely to have at most a modest impact on domestic natural gas prices—LNG exports will adjust as U.S. prices rise or fall.”  Dorgan went considerably broader than just natural gas, though.  He stressed: “restricting international trade in fossil fuels is not an effective policy to reduce global greenhouse gas emissions or to advance domestic economic interests, and we recommend against any such restrictions.”

That is precisely where the NAM stands on energy exports. Manufacturers fundamentally believe in free trade and open markets—a policy that extends to energy exports. We oppose bans or similar market-distorting barriers to our energy exports. We are pleased to see the BPC take the same stance.

Sen. Johnston, a Louisiana Democrat who spent 25 years in the U.S. Senate, put it eloquently:

“The free market might not always lead to everyone’s definition of the sweet spot, but experience has shown that it is a better allocator and regulator than bureaucrats and politicians. We should heed the admonition of Adam Smith that demand begets supply: Allow the free market to allocate the nation’s newfound energy bounty.”

Manufacturers believe in a true “all-of-the-above” energy strategy that embraces all forms of domestic energy production, including oil, gas, coal, nuclear, energy efficiency, alternative fuels and renewable energy sources. We are a country built on exports—the National Association of Manufacturers was founded because our members wanted to export—and we must continue to let the principles of free trade and open markets govern in the area of energy exports.

Ross Eisenberg is vice president of energy and resources policy, National Association of Manufacturers.

The National Association of Manufacturers (NAM) joined the Canadian Manufacturers & Exporters (CME) today to send joint comments on the State Department’s Draft Supplemental Environmental Impact Statement on the Keystone XL pipeline. In a letter to State Department NEPA Coordinator Genevieve Walker NAM President and CEO Jay Timmons and CME President and CEO Jayson Myers lay out the economic benefits of the pipeline for North American manufacturers.

Both leaders agree that Keystone XL is a critical part of a true “all of the above” energy strategy. From the letter:

“Our two countries enjoy the largest trade relationship in the world. Approximately forty percent of our cross-border trade is comprised of intra-company shipments. The vast energy resources contained in Canada’s oil sands play a vital strategic role for North American manufacturers and the millions of workers they employ. In our view, the approval and construction of Keystone XL is a critical part of the true “all of the above” energy strategy our national leaders have embraced—one that will fuel present and future generations of jobs and economic growth.”

On March 1 the State Department released the Draft Supplemental EIS which reached the same conclusion as previous assessments stating, “Keystone XL will have no significant impact on the environment.” The project will be constructed with state-of-the-art manufacturing and technology, exceeding what is required under current law.

The construction of Keystone XL will create manufacturing jobs to build the pipe and other equipment as well as jobs for welders, mechanics, electricians, pipefitters, laborers, safety coordinators and heavy equipment operators.

Another lost fact in the debate over Keystone XL is that the pipeline will be used to transport crude from the Bakken formation in North Dakota and Montana to domestic markets. This will further enhance America’s energy security. Keystone XL has been studied for 5 years, the average NEPA review is 3.4 years, and each review has reached the same conclusion. It’s now time for the Administration to complete the inter-agency review and approve the pipeline to keep America strong.

Ross Eisenberg is vice president of energy and resources policy, National Association of Manufacturers.

The President and his advisors have repeatedly stressed that they do not believe they have to choose between the environment and the economy. The governors of Oregon and Washington are not making it easy on him; in fact, that’s precisely the choice they’ve asked him to make on exports. In a letter sent today to the President’s Council on Environmental Quality, the two governors asked for a boundless, limitless, and to our knowledge unprecedented, life cycle impact analysis of five planned coal export terminals and the cargo being transported through them, all before issuing a permit for the first one.

The kind of review they are asking for is Keystone-on-steroids; they want the President to decide whether we should be exporting coal AT ALL before issuing a permit to expand the terminals. Never mind that the ports will ship other products besides coal. Never mind that thousands of high-paying construction jobs are at stake in a region where construction jobs are at their lowest point in a decade. And never mind that such a radical change in the law could be used to block exports of, well, everything.

This last point has manufacturers very concerned. Virtually every product we export, from cars to turbines to planes to grains, has an environmental impact. The already-too-long permitting process for new projects–a process that takes on average 3.4 years–would become completely unmanageable if the law were expanded to require the type of review the two governors are now seeking.

The NAM was created in 1895 because manufacturers needed to find opportunities to export their products. We will continue to fight efforts to erect unnecessary barriers beyond what is required by law.

Ross Eisenberg is vice president of energy and resources policy, National Association of Manufacturers.

The Senate budget amendment process known as Vote-A-Rama was, in many ways, an opportunity for Senators to test policy priorities to determine where consensus may lie.  Energy issues were no exception, and I’m encouraged to see that strong bipartisan support exists for many of manufacturers’ energy priorities.

The Senate passed by voice vote an amendment by Sen. Barrasso that protects exports from being bogged down by new layers of permitting and regulation, on the grounds that the exports would emit greenhouse gases after leaving the country. Sen. Barrasso’s amendment would prohibit Federal agencies from considering, under the National Environmental Policy Act (NEPA), greenhouse gas emissions produced outside the United States by any good exported from the United States. This drastic expansion of NEPA, which is being contemplated in the case of Keystone XL and for permits to export coal and natural gas, would create a precedent that could be used to block exports of all types, not just fossil fuels. Sen. Barasso’s amendment did not weaken NEPA in any way; it merely protects against efforts to expand permitting for exports further than what the law currently requires.

Two dueling amendments were voted on related to Keystone XL: one from Sen. Boxer that would preserve the regulatory status quo and one from Sen. Hoeven that would speed up the process and finally get the project approved and constructed. The Boxer amendment failed on a lopsided 66-33 vote. The Hoeven amendment passed, 62-37, the first time I can recall Keystone XL crossing the magical 60-vote threshold in the Senate.  This should put the administration on notice: both the House and Senate have now demonstrated they can get a bill to approve Keystone XL on the President’s desk. (continue reading…)

Today the Senate is holding votes on a series of amendments to the chamber’s first budget in four years. Several of the amendments on the floor address energy issues. Manufacturers use one-third of the energy consumed in the United States which makes access to affordable energy essential. Regulations and other policies which drive up costs are extremely concerning for manufacturers.

Senator Roy Blunt has filed an amendment that opposes a carbon tax. Last month the NAM released a study by NERA economic consulting that showed a carbon tax could have a devastating impact on our economy and jobs. Placing unilateral restrictions or prices on U.S. GHG emissions, without similar regulations in operation on other major emitting nations, would disadvantage U.S. manufacturers, impact millions of jobs, and result in higher prices for natural gas, electricity, gasoline and other energy commodities.

Senator Inhofe has filed an amendment that would prevent EPA from implementing costly greenhouse gas regulations for power plants, refineries and other industrial facilities.

Senator Barrasso has an amendment that would protect exports from being blocked by unnecessarily broad environmental reviews under the National Environmental Policy Act (NEPA). Expanding NEPA to consider the environmental impact of the cargo could hamper exports of many products, such as cars, tractors, agricultural products, electronics, toys, steel, chemicals, pumps, air conditioners, elevators and airplanes.

Also, Senator Hoeven has an amendment on the floor to approve the Keystone XL pipeline. Keystone XL would create tens of thousands of manufacturing and construction jobs and provide manufacturers with an affordable source of energy. We have continued to urge the Administration to approve the pipeline as soon as possible.

Today, Representatives Henry Waxman and Earl Blumenauer and Senators Sheldon Whitehouse and Brian Schatz released a discussion draft of legislation that proposed to place a carbon tax on greenhouse gas emissions.  The lawmakers are seeking input on various aspects of their legislation, including the tax rate and how revenues will be spent.  The discussion draft and related background materials can be found here.

Late last month, the National Association of Manufacturers released the results of a study looking at the economic consequences of a carbon tax. The study, conducted by NERA Economic Consulting, examined two carbon tax scenarios: one levied at $20 per ton increasing at 4 percent and the other designed to reduce carbon dioxide (CO2) emissions by 80 percent. Revenues were recycled into deficit reduction and reduction of income tax rates.  Both scenarios modeled ($20 a ton and 80% reductions) had a devastating impact on the economy and manufacturers.

NERA concluded that the increased costs of coal, natural gas and petroleum products due to a carbon tax would ripple through the economy, resulting in higher production costs, less spending on non-energy goods, fewer jobs and slower economic growth. Nationally, a carbon tax designed to reduce CO₂ levels by 80 percent could place tens of millions of jobs at risk and raise gasoline prices by over $10 a gallon, natural gas prices by almost $60 per MMBtu, and residential electricity prices by over 40 percent.

Our study also found that a carbon tax would have a negative impact on manufacturing output. In energy-intensive sectors manufacturing output could drop by as much as 15.0 percent and in non-energy-intensive sectors by as much as 7.7 percent. The impact on jobs would be substantial, with a loss of worker income equivalent to between 1.3 million and 1.5 million jobs in 2013 and between 3.8 million and 21 million by 2053.

A carbon tax resembling the one in our study would drive up energy prices, make it more expensive to manufacture in the United States, and harm our ability to compete with other nations. The NAM believes that any benefits of a carbon tax—under both carbon tax cases—would be far outweighed by the negative impacts to the overall economy.

Ross Eisenberg is vice president of energy and resources policy, National Association of Manufacturers.

This afternoon, in a victory for manufacturers and energy producers the U.S. Department of Interior’s Bureau of Land Management (BLM) announced it would redraft a proposed hydraulic fracturing regulation for wells operated on federal and Indian lands.  The original rule sought to make radical changes to the chemical disclosure and well construction procedures oil and gas drillers must follow before they can receive their permits to drill. 

As originally drafted, BLM’s rule duplicated existing state regulations, its costs significantly outweighed its benefits, and it would almost certainly result in delays to drilling activities. The NAM explicitly asked BLM to withdraw the proposal and better harmonize its efforts with ongoing state regulations.

Manufacturers are encouraged by this afternoon’s announcement by BLM. The NAM believes the states should be the primary regulators of hydraulic fracturing and that the federal government should not be regulating until and unless it can prove that a compelling need exists for federal intervention.

Ross Eisenberg is vice president of energy and resources policy, National Association of Manufacturers.

Natural gas is vitally important to manufacturers and job creation, as well as achieving affordable energy in this country. Through the NAM’s Affordable Energy Campaign, we are focused on ways to increase our vast domestic onshore and offshore energy resources with balanced and sensible regulation.

Regarding Liquefied Natural Gas (LNG), the NAM’s official policy position is as follows:

The dramatic increase in the domestic natural gas resource base has reduced the likelihood of the need for significant LNG imports. Some now believe the United States could eventually become a net exporter of natural gas. An adequate supply of natural gas is needed to meet the growing demand of the U.S. manufacturing sector in a recovering economy. The NAM strongly supports federal and state policies to accommodate growth in domestic natural gas production. We further believe abundant domestic natural gas resources can fuel a manufacturing renaissance in the United States. The NAM fundamentally supports free trade and open markets. We support a natural gas policy process that is open, transparent and objective.

Ross Eisenberg is vice president of energy and resources policy, National Association of Manufacturers.