Energy

New NAM Video Explains Impact of Ozone Regulations

I have continued to underscore the importance of reducing regulatory burdens and regulatory uncertainty, particularly as our economy continues to recover. With that in mind, and after careful consideration, I have requested that Administrator Jackson withdraw the draft Ozone National Ambient Air Quality Standards at this time.” –President Obama, September 02, 2011

With the unemployment rate hovering above 9% and in the early stages of his reelection campaign, in September 2011, President Obama told the Environmental Protection Agency (EPA) to stop its work on a new ozone regulation – a regulation that by the administration’s own estimate would have cost industry and consumers as much as $90 billion per year. Now, just two and a half years later, the administration is once again considering a new ozone regulation, and again the costs to manufacturers and the economy could reach never-before-seen levels.

While we are still months away from the release of a proposed ozone rule, the rulemaking process is very much underway – EPA has developed its draft documents, its science advisors have met and environmental advocacy groups are in court seeking to expedite the whole process. Meanwhile, manufacturers are becoming uncomfortably reacquainted with the concept of the administration levying a regulation that makes expansion in many, if not most, parts of the country difficult at best and in some cases impossible.

With so much at stake for manufacturers, the NAM is committed to being involved at every stage of the ozone review and rulemaking process to ensure the administration gets it right. We will work with elected and appointed officials at all levels of government and educate the general public about the regulation, the steady and consistent air quality improvements that have been made over the last 30 years and the improvements that will continue to take place based on laws already on the books. But we will also work to ensure the public understands the consequences of the administration going too far by proposing unattainable standards and how with the right policies we can have both a clean environment and a strong manufacturing economy.

Below is a video the NAM developed that provides some background information on EPA’s review of a new ozone regulation and what’s at stake for manufacturers and the economy.

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Democrats Ask for Action on Keystone XL while White House Offers No Clear Deadline

Senate Energy and Natural Resources Committee Chairwoman Mary Landrieu (D-LA), joined by ten Democratic senators, sent a letter to President Obama on April 10 pleading with the Administration to commit to a timeline for a final decision on Keystone XL. At well over five years since the application was first received, the Administration has been criticized for repeatedly delaying the process. The 11 senators agreed with critics, calling the process “exhaustive in its time, breadth, and scope. It has already taken much longer than anyone can reasonably justify.”

Sen. Landrieu and her colleagues asked the President to require Secretary of State John Kerry to make a decision on Keystone XL. The project is currently subject to 90-days of public and inter-agency comment, which is set to expire in early May. The 11 senators asked the President set a deadline for the State Department to make its determination within 15 days of the end of the comment period, and for the President to commit to making a decision no later than May 31, 2014.

Given the final environmental impact statement came to effectively the same conclusion as all previous reviews of the project, these Senators urge the President to action. Yet the Administration refuses to commit to any firm timeline to make a decision on permit that is long overdue. The NAM has repeatedly called for approval of Keystone XL, a strong component of an “all of the above” energy strategy. Today we can add these 11 senators to the overwhelming majority of Americans who believe Keystone XL should be approved.

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NAM Member Testifies on Benefits of LNG Exports

LNG exports will create jobs and create a positive ripple effect throughout the manufacturing supply chain. That was the message today from Chart Industries Vice President and Secretary Matt Klaben at a House Ways and Means hearing focused on the trade implications of U.S. energy policy and the export of liquefied natural gas (LNG).

Klaben addressed the importance of free trade and open markets over market-distorting barriers to trade. He also highlighted Chart’s story of job creation and the type of advanced manufacturing that would take place across the country if these terminals are approved. Below are excerpts from Mr. Klaben’s testimony:

For manufacturers, natural gas is a critical component of an “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…

Chart’s participation in the LNG value chain has put us in a position to create many good-paying jobs in communities across the U.S. In recent years, we have invested tens of millions of dollars to expand our facilities in various American communities to be prepared for these opportunities…

If Chart is selected to supply equipment for just one average-sized export terminal, it would support hundreds of jobs at Chart facilities, and further hundreds of jobs with Chart suppliers in other communities around the U.S…

Chart and its suppliers are not alone—we represent just a small part of the LNG value chain and the total work needed. Each LNG export terminal costs roughly $10 billion to construct. Each project would create thousands (and in some cases tens of thousands) of jobs and generate billions of dollars in economic benefits. Manufacturers across the country would create jobs making compressors, heat exchangers, storage tanks, pipes, valves and other components of these state-of-the-art infrastructure projects.

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Pace of EPA Regulations Slows, But the Stakes Only Get higher

On March 19th the Congressional Research Service (CRS) issued a report saying that the pace of regulations being put out by the EPA “has slowed considerably” since 2011. The paper, titled “EPA Regulations: too Much, Too Little, or on Track?” says that this is in part because the agency has finally been able to address much of the backlog accrued during the Bush administration.

However, the report goes on to point out the host of major regulatory actions still under way that have drawn heavy criticism from industry groups as well as bipartisan concerns from Congress. This is because while the overall number of regulations has decreased, the scope of the current rules being considered is unprecedented.

The pending major regulations highlighted in the report include the treatment of coal ash, the NAAQS for ozone, and of course the standards for new and existing power plants. These are all issues on which the NAM has urged the administration to take a moderate approach due to what will undoubtedly be a major impact on manufacturing and our nation’s economy.

Also presciently mentioned in the report was the “Waters of the United States” rulemaking, which was issued just a week after the CRS report came out. EPA’s attempt to expand their jurisdiction over various waters has been strongly opposed by the NAM. Under this newly proposed rule many seasonal and ephemeral water flows and artificial tributaries, including impoundments and wetlands, with even a remote connection to adjacent to or near downstream waters, will be subject to the Clean Water Act. Senator John Barrasso called the proposal “a massive federal power grab that will cost land owners, ranchers and small business owners thousands of dollars in permitting fees and compliance costs.”

While it may be true that the EPA is issuing fewer regulations, they are more than making up for it with the supersized rules sitting in the hopper. The EPA may not be coming up to the plate as often, but when they do they swing for the fence.

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White House Releases Methane Strategy Document

The benefit to manufacturing from the U.S. energy boom is undeniable. In September, the NAM participated in a study that found the unconventional oil and gas value chain could support 3.9 million jobs by 2025. The study cautioned that with the wrong policies in place, much of this economic potential could be lost.

Today, the White House released a strategy document that contemplates new “policy tools” for the oil and gas sector.

As the suppliers of goods to service this sector and the beneficiaries of the low-cost energy it produces, manufacturers encourage the administration to work with industry to build on the progress that has already been made in lowering emissions as opposed to issuing additional, inflexible regulations.

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Manufacturers Push for Regulatory Reform

NAM President and CEO Jay Timmons and Arizona Chamber of Commerce & Industry President and CEO Glenn Hamer recently co-authored an op-ed in the Arizona Daily Star, emphasizing the direct impact federal regulations have on local energy prices, consumers, and manufacturers.

Though these policy discussions take place on the national level, Timmons and Hamer note the implications are often most felt on the local level.  According to the authors, “Arizona manufacturing has rebounded to levels beyond pre-recession output. Thanks to hard work and smart investments, manufacturers in the state now employ almost 6 percent of Arizona’s workforce. But those gains could be put at risk by misguided federal energy policies.”

RegReform EventAs manufacturing continues to grow jobs and expand nationwide, the NAM has made a concerted effort, partnering with the National Federation of Independent Business (NFIB), to advance common sense regulatory reform. A month ago on Capitol Hill, the NAM co-sponsored a “State of U.S. Regulations” event with the NFIB, during which both groups announced they “will utilize the full weight of their grassroots networks in an effort to engage with Congress and the Administration on the need for regulatory improvements.”

Jay Timmons, president and CEO of the NAM, said of the partnership, “This will be a strong and effective partnership because manufacturers and small businesses face a disproportionate burden of all regulatory costs. While manufacturers recognize the need for regulation, the scope and complexity of rules have made it harder to do business and compete in recent years. This is a trend that simply cannot continue and is easily solved with common-sense reforms. We can achieve a streamlined regulatory process with increased accountability and transparency that will protect businesses, manufacturers and consumers.”

The event, which coincided with Congressional debate on regulatory reform, included a keynote address by U.S. Representative Kevin McCarthy (R-CA), House Majority Whip, and opening remarks from Jay Timmons, President and CEO of the NAM, and Dan Danner, President and CEO of NFIB. Following the opening remarks, a panel of policy experts, which included former Governor George Allen (R-VA) and former U.S. Senator Blanche Lincoln (D-AR), discussed the complications within the federal regulatory system, noting how complexities create unintended consequences for manufacturers and small business.

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Atlas Machine Unveils New Investment

Today, business leaders and local officials joined leadership from the National Association of Manufacturers (NAM) at the Atlas Machine and Supply’s Louisville, Kentucky facility to participate in the unveiling of the new ‘Welding Solutions Center.”

The center is showcased as the largest large-capacity welding machine in North America and represents a capital investment of over $1 million.

NAM President and CEO Jay Timmons hailed the expansion as another example of increased innovations from U.S. companies. “The ability to adapt, innovate and improve is at the foundation of the U.S. economy, and it shows up in abundance in manufacturing in America. Companies like Atlas Machine and Supply are a big reason why manufacturers.”

Atlas is a 107-year old business based in the Jefferson Riverport in Louisville, Kentucky. The fourth-generation, family-owned company designs, repairs, and manufactures complex equipment and components for industry and municipalities.

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LNG exports take center stage in House, Senate

Today, both the House and Senate will hold committee hearings relating to liquefied natural gas (LNG) exports. Both hearings will focus on not only the economic impact but also the increasingly-relevant geopolitical aspects of exporting energy. The House Energy and Commerce Committee hearing will focus on a specific piece of legislation: H.R. 6, the Domestic Prosperity and Global Freedom Act. H.R. 6 would provide expedited processing of all new LNG export applications to the Department of Energy (DOE), and would approve all applications pending in the DOE’s queue as of March 6, 2014.

Like any major infrastructure project, LNG export terminals must run the gauntlet of a long, drawn-out permitting process. One of the earliest steps in the permitting process, a license from DOE, has become a regulatory choke point for LNG exports. Some applicants have been waiting years for a decision, with no end in sight. At DOE’s current pace, some of the applications in the queue could be waiting until 2016 or later before they can move to the next step in the process.  While the national interest determination requirement by DOE isn’t itself a problem–we support a process that is open, transparent and objective–the way it’s been carried out is creating a major barrier to free trade and open markets in the area of LNG exports. It also may be running afoul of our international obligations: a recent report by former World Trade Organization (WTO) Appellate Body Chairman James Bacchus, who is testifying before the House today, concluded that the delay by the DOE to issue licenses to export LNG to foreign countries likely constitutes, in and of itself, a violation of our international obligations under the WTO. (He reached the same conclusion for coal export permitting delays.) As the United States leads the world in enforcing global commitments to prevent export restrictions, such as those that China has placed on raw materials and rare earths to the detriment of U.S. industry and workers, we should not ourselves be in violation of those same commitments.

The NAM was founded over 100 years ago to promote open markets and free trade for American manufacturers. In the context of all exports, including those of energy, the NAM fundamentally supports open markets and promotes exports of all products. We believe the market, if allowed to work, will provide equilibrium.  For the past year, we’ve called on DOE to speed up its licensing process to provide applicants an up-or-down decision as expeditiously as possible. In recent weeks, the editorial boards of the Washington Post, Wall Street Journal, the New York Times and others have called for similar action.

As part of our commitment to exports and free trade, the NAM supports H.R. 6, the Domestic Prosperity and Global Freedom Act. H.R. 6 would put the United States in compliance with its own international obligations under the WTO, and would and help bolster U.S. efforts to eliminate other countries’ export restrictions. H.R. 6 does not impact the economic, environmental or safety studies that the Federal Energy Regulatory Commission (FERC) and other agencies are required to conduct, nor does it remove any other regulatory requirement. It would promote the development of infrastructure to allow the export of a product–a principle that manufacturers support.

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Time To Pick Up Pace On LNG Applications

This morning the Department of Energy (DOE) authorized the seventh export terminal, Jordan Cove Energy Project, L.P., to export domestically produced liquefied natural gas (LNG) to non-Free Trade Agreement (FTA) countries. Manufacturers are pleased with the approval of the Jordan Cove project but still believe these decisions should be coming much more quickly.

The law requires the Department of Energy to make an up-or-down national interest determination for each project on a case-by-case basis. Each project deserves the fairness of an up-or-down decision in a prompt fashion. In December 2013 the NAM released a report by James Bacchus, the former World Trade Organization (WTO) Appellate Body Chairman. Bacchus concluded in this report that the implementations of U.S. rules in ways that unnecessarily impede exports of LNG likely violate WTO trade rules.

This week the House and Senate Committees will hold hearings on the subject of LNG exports.  The House Energy and Commerce has asked Mr. Bacchus to testify on this topic along with other experts. The Senate Energy and Natural Resources Committee will hold a hearing that will include the Administrator of the U.S. Energy Information Administration, Adam Sieminski, the Minister of Energy of the Republic of Lithuania and a number of other energy experts.

The pressure will only increase on the Administration if these approvals continue to trickle out every six to eight weeks.  World events continue to demonstrate the demand for natural gas and illustrate the need for the U.S. to speed up their process and not run afoul of the WTO rules. In a Bloomberg interview Secretary Moniz recently acknowledged that perhaps the LNG approval process should take into account world events when he said, “maybe we will give some additional weight to the geopolitical criterion going forward.”  The U.S. doesn’t exist in a vacuum and we must pay attention to what is happening in the world around us. In this case we are getting strong signals from our allies that they are looking for our help. It’s time to get our heads in the game.

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CNBC Highlights Coal Ripple Effect on Manufacturers

Earlier this week, CNBC traveled to Decker, Montana to visit the Spring Creek Mine, a 9,000 acre site near the Wyoming-Montana state line owned by Cloud Peak Energy.

Dubbing it the ‘coal ripple effect,’ CNBC highlighted the enormous impact that coal production activities have on the manufacturing supply chain and the jobs that are supported by the industry.

For example, LNH Industrial of Gillette, Wyoming manufactures the 90 ton buckets at the end of the electric shovels. Thirty percent of LNH’s business is derived from coal-related activities and owner Joel Christophersen also highlighted the numerous ancillary businesses that depend on the industry.

While production is seeing a turnaround, CNBC also notes the numerous issues the industry experiences with regulation from the Environmental Protection Agency and delays in getting approval for export permits. Watch a segment below from CNBC on the ‘Coal Ripple Effect.’

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