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Ross Eisenberg

Manufacturers Hope Reason Will Prevail in Latest Pipeline Battle

By | Energy, Shopfloor Main, Shopfloor Policy | No Comments

A few months ago, I testified before the Senate Energy and Natural Resources Committee on the importance of pipeline infrastructure to manufacturers. What struck me the most about this hearing is that, on an issue that has been so filled with partisanship and vitriol in recent years—see Keystone XL—every single member of the committee that day rose above the talking points and had a thoughtful, productive conversation about the opportunities and challenges confronting new pipelines. There were different points of view on how best to balance economic growth, energy security and public health and safety. However, every member of that panel recognized that, yes, we are going to need more pipelines to meet changing domestic supply and demand for energy.

That’s why I’m shaking my head today as I watch the same tired script unfold over the latest pipeline to begin construction, the Dakota Access Pipeline. Dakota Access will bring crude oil developed in North Dakota through South Dakota and Iowa into Illinois. The project enjoys the support of a wide range of labor unions, chambers of commerce, agricultural groups and economic development authorities. The project’s sponsors ran the gauntlet and secured every federal, state and local permit needed to begin construction; however, just as construction commenced, the lawsuits began, protests got heated, and now we’re rapidly moving toward another round of political theater over a pipeline project.

Manufacturers support the Dakota Access Pipeline. Dakota Access ensures long-term access to competitively priced oil for industrial uses and as an input good for many manufactured goods, such as petrochemicals, to process gas and transportation fuels and to power operations. Manufacturers also make up the supply chain for the project: between 32 and 37 percent of the cost of constructing an oil pipeline is directly for manufacturing inputs. The major types of manufactured goods used include equipment, line pipe, fittings, coatings and booster stations, including pumps. A report written by IHS Economics for the National Association of Manufacturers in early 2016 estimates that at least 66 different manufacturing subsectors (out of 86 total) benefited from the construction of crude oil pipelines by $10 million or more in 2015. Overall, construction and operation of crude oil pipelines will have meant $7.6 billion to manufacturing in 2015 and 2016 and led to the creation of 28,438 manufacturing jobs in 2016.

 

CrudeInfo

There will always be protesters, and there will always be critics. It wouldn’t be America if there weren’t. Heck, I know a guy who once created a Twitter handle just so he could criticize the TV broadcast of the U.S. Open.

Ultimately, though, it’s the job of the regulators to listen to all the points in support and against and render a decision. That’s what happened here. North Dakota signed off. So did South Dakota. And Iowa. And Illinois. And the Army Corps of Engineers. The government got this one right; now it’s time to start building.

Delays in construction cause idled assembly lines, breached contracts and a domino effect that ripples up and down supply chains, injuring manufacturers every step of the way. We can’t let this happen. Here’s hoping that, much like that day in the Senate a few months ago, we can rise above the politics and let reason prevail.

DNC Energy Platform Long on Commands, Short on Hope

By | Energy, Shopfloor Main, Shopfloor Policy | No Comments

The most important sentence on energy in the Democratic National Committee (DNC) platform document is the one it took out: this version of the platform no longer supports an “all-of-the-above” energy strategy.

Coal is out. Nuclear energy and hydropower aren’t even mentioned once in the platform. This version seeks to pick winners and losers in the energy space and remake the energy mix the way the DNC platform committee sees fit, regardless of what the market wants.

You know why that’s a bad idea? Because just about every time the government tries to pick winners and losers in the energy space, the government gets it wrong—like really, really wrong.

Eight years ago, we were told that coal would be the dominant electricity source for the next 50 years, that we would hit peak oil and gas and need to build new natural gas import terminals, that a renaissance of new nuclear power plants was upon us and that the vehicle fleet would transition to biofuels. Policies were put into place to adjust to those projections. Fast-forward to today, and just about every one of those predictions has been proven wrong. The one thing the government just couldn’t predict was the pace of innovation. And innovate we did: hydraulic fracturing unlocked hundreds of years’ worth of oil and gas supplies right here in the United States, renewable energy and energy-efficient products and solutions are getting cheaper by the day, the vehicle fleet is getting more efficient and electric vehicles are gaining market share, we are about to become net exporters of oil and gas, and advanced coal and nuclear technologies are getting closer to market.

Point being: a commitment to letting the market decide what energy technologies win or lose got us where we are now. And where we are now is a position of energy strength.

Take natural gas. Manufacturers have historically had an outsized reliance on natural gas. Unlike residential consumers, whose main interactions with natural gas are at the power plant and through their stoves and furnaces, manufacturers rely on natural gas for a wide range of direct and indirect uses. Manufacturers use natural gas as a fuel for direct process uses, such as drying, melting, process cooling, machine drive and refrigeration; as a fuel for direct nonprocess uses in manufacturing establishments, such as heating, ventilation, HVAC and lighting; as a fuel for indirect purposes, such as boilers used to produce electricity and steam; and as a feedstock in refining, chemicals and primary metals sectors. Domestic natural gas has transformed the U.S. economy, made our companies more competitive, created jobs and put money back in the pockets of working Americans.

Over the next decade, total demand for natural gas will increase by 40 percent. Key drivers will be power generation and manufacturing: the chemical industry alone plans to invest in 264 new projects representing $164 billion in capital investment in the United States thanks to natural gas. U.S. supply of natural gas will grow by 48 percent, more than enough to meet growing demand.

Yet, the DNC platform document wants to make it significantly harder to access this energy. It wants to stop energy exploration off the coasts, phase it down on public lands and send the Department of Justice after fossil fuel companies. All of that will make it substantially harder for manufacturers to access the energy that we need to stay competitive.

The DNC platform committee knows as much about the next eight years of our energy future as it did back in 2008. Case in point: the 2008 platform document claimed, “We know we can’t drill our way to energy independence.” Turns out we actually can, and for the most part, have.

The one thing the platform seems to ignore is innovation. Without innovation—without hope—we’re not going to solve any of our environmental challenges and take advantage of new energy opportunities.

Environmental Impact Statement Released for Washington State Export Terminal

By | Energy, Shopfloor Policy | No Comments

On Friday, Cowlitz County, Wash., and the Washington Department of Ecology (WDOE) released a draft environmental impact statement (EIS) for Millennium Bulk Terminals – Longview, a planned export terminal for coal and other bulk commodities along the Columbia River in Cowlitz County. Today’s EIS was produced by the state and county under the State Environmental Policy Act (SEPA), which is essentially Washington’s version of the National Environmental Policy Act (NEPA), the federal environmental policy statute that requires environmental impact analysis of major federal actions affecting the environment. Disputes over the scope of the EIS for this terminal among Cowlitz County, WDOE and the Army Corps of Engineers has led to the production of dual EIS analyses: one produced by the Army Corps, which analyzes site-specific impacts as is traditional practice, and today’s SEPA analysis, which broadens the scope dramatically to include cumulative, lifecycle impacts not only of the terminal but the commodities being shipped through that terminal. It’s an unusual practice to say the least and has had manufacturers concerned for a long time, given the potential precedent that could be set for all exports of manufactured goods.

We’re just now digging into the hundreds (thousands?) of pages making up the SEPA analysis. One area that immediately gives us concern is how the WDOE and Cowlitz County evaluate the greenhouse gas (GHG) footprint of the facility and the mitigation measures recommended. This is largely uncharted territory from both a legal and policy standpoint, and one that could have a significant impact on similar analyses in Washington and other states. Manufacturers depend heavily on exports, and conditions placed on one exported product could cascade to other products as well. If those conditions get in the way of trade or unduly delay exports, it could also violate U.S. international treaty obligations under World Trade Organization agreements.

A 45-day comment period is now underway for the Millennium Bulk EIS; comments can be submitted here.

Senate Ozone Implementation Bill Encouraging Development for Manufacturers

By | Energy, Shopfloor Policy | No Comments

Manufacturers were encouraged by today’s introduction by Sens. Shelley Moore Capito (R-WV) and Jeff Flake (R-AZ) of the Ozone Standards Implementation Act of 2016, a bill that would provide some much-needed relief and flexibility to the Environmental Protection Agency’s 2015 final ozone rule. The Capito-Flake Ozone Implementation Bill is similar to the NAM-supported H.R. 4775 in the House, introduced by Rep. Pete Olson (R-TX). Both bills offer a balanced approach that ensures continued air quality improvements, while giving states and manufacturers the flexibility necessary to limit some of the economic growth restrictions that exist under the current regulation.

Since 1980, ozone levels are down nationwide more than 30 percent—and down nearly 20 percent in just the past decade. With new investments coming online utilizing the best and cleanest technologies available, these trends will continue. Unfortunately, while modern manufacturing has evolved into a sleek, technology-driven industry, and air quality has improved vastly, many of our environmental policies, such as the ozone rule, have failed to keep pace. Read More

Manufacturers Encouraged by Ozone Implementation Bill

By | Shopfloor Main, Shopfloor Policy | No Comments

We often say that clean air and a strong economy can go hand-in-hand. Underlying that belief is a recognition that we need the right policies in place to ensure both goals are achieved. Just five months after the Environmental Protection Agency (EPA) issued its strictest ozone regulation ever, throwing hundreds of counties into noncompliance with the standard, manufacturers are encouraged to see leaders from the House Energy and Commerce Committee (E&C) offer legislation that would restore some much-needed flexibility to this policy.

Since 1980, ozone levels are down nationwide more than 30 percent—and down nearly 20 percent in just the past decade. With new investments coming online utilizing the best and cleanest technologies available, these trends will continue. Modern manufacturing has evolved into a sleek, technology-driven industry, and air quality has improved vastly as a result. But many of our environmental policies, such as the ozone rule, have failed to keep pace.

Ozone 70 Infographics (700x350) Read More

Manufacturers Hopeful Senate Energy Bill Will Move Again Soon

By | Shopfloor Main, Shopfloor Policy | No Comments

The Senate’s consideration of S. 2012, the Energy Policy Modernization Act, has been stalled for weeks over how best to address the ongoing water challenge in Flint, Mich. Early this week, it appeared an agreement on Flint aid had been reached that would allow S. 2012 to move forward. Unfortunately, just a few hours later, the story broke that the bill is now being held up over an amendment that allows revenues from oil and gas exploration off the Atlantic coast to be shared by the federal government and the states where the exploration would occur. The NAM supports this amendment and would like to see it get a vote.

infographics-03 Read More

Oil Fee Proposal a Bad Deal for Manufacturers

By | Energy, Shopfloor Policy | No Comments

Today, the Obama administration announced the details of a request in its upcoming 2017 budget proposal for a $10 fee on every barrel of oil to fund what the administration describes as “a more sustainable transportation system.” The administration is calling it a fee, but let’s be clear about what this really is: a wealth transfer that will ultimately be paid for by manufacturers at their plants and consumers at the pump.

In today’s global economy, U.S. manufacturers must be assured of an adequate supply of competitively priced oil for industrial and commercial use and for transportation fuels. We are, therefore, very concerned with yet another new policy that increases prices—and particularly a fee of this size, which would increase the price of each barrel of oil by more than 30 percent at today’s prices.‎ The American Petroleum Institute estimates that the president’s fee would cost consumers as much as 25 cents per gallon of gasoline.

Manufacturers support improvements to our nation’s crumbling infrastructure and fought hard to get the $305 billion long-term highway reauthorization successfully signed into law this past December. But the president’s oil fee budget proposal would make manufacturers less competitive.

Energy Bill, TSCA Reform Show Momentum Building for Congressional Solutions on Energy, Environment

By | Energy, Policy Experts, Shopfloor Policy | No Comments

This week, the Senate is debating S. 2012, the Energy Policy Modernization Act, on the floor. The bill, introduced by Senate Energy Committee Chairman Lisa Murkowski (R-AK) and Ranking Member Maria Cantwell (D-WA) and passed by the committee on a decisive 18-4 vote, is expected gain broad support from both sides of the aisle. There is a lot to like in the bill, including a wide range of measures on energy efficiency and improvements to the licensing process for liquefied natural gas (LNG) exports. The debate on S. 2012 comes on the heels of successful passage of legislation to reform the Toxic Substances Control Act (TSCA) by the Senate at the end of 2015. (The House passed a similar TSCA reform bill earlier in the year by a 398-1 vote, and the two bills await a conference.)

For years, Washington earned a well-deserved reputation for gridlock and an inability to solve problems. But these two bills, much like the recent successes on tax, infrastructure and trade, are a sign that the gridlock may be starting to ease. And if that’s the case, there are no shortage of energy and environmental issues that manufacturers would like some real, bipartisan solutions on. We talk about a lot of these in the our “Competing to Win” platform document, unveiled today by NAM President and CEO Jay Timmons as he kicked off this year’s State of Manufacturing Tour. Read More

Interior Reviews Coal Lease Program Leaving Manufacturers in Dust

By | Energy, General, Shopfloor Main, Shopfloor Policy | No Comments

Friday, the Department of Interior announced it would develop new guidelines for development of coal resources on federal lands. Included in the announcement was a moratorium on new leases of coal on these federal lands until a new environmental impact study is completed. These studies take years, and Secretary Sally Jewell said the moratorium on new leases will be in place until the study is complete.

“Manufacturers need reliable energy sources and a robust energy mix, and this new plan from the president erodes our energy future. As the leading industry in cutting climate-related emissions, we understand and face the challenge, but manufacturers need to remain competitive in today’s global economy. The American energy boom has been beneficial to manufacturers, but this action by the administration will diminish that advantage.” – Ross Eisenberg, vice president of energy and resources policy, National Association of Manufacturers

As users of one-third of the nation’s energy, manufacturers need a robust energy strategy that looks at all forms of energy, conventional and unconventional, to ensure an affordable and reliable supply. A key to our increasing global competitiveness, in addition to continuing growth in productivity, is reliable and affordable energy. Coal still provides nearly 40 percent of our electricity and gives manufacturers an advantage in a local economy. Also concerning in this announcement is the failure to examine the costs to manufacturing and the millions of supply-chain jobs directly and indirectly impacted by such a sweeping action. Read More

Obama Denies Keystone XL Pipeline, Choosing Politics Over Policy

By | Energy, Shopfloor Main, Shopfloor Policy | No Comments

Screen Shot 2015-11-12 at 1.31.44 PMLast 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. Read More