Energy

Ozone Education Campaign Continues With State Ad Campaign

By now, you may be familiar with the NAM’s efforts to bring attention to the severe economic impact that the EPA’s pending revisions to the National Ambient Air Quality Standards (NAAQS) for ground-level ozone would have not only on manufacturers, but on the overall economic health of our country as well.  As part of this effort, this week we launched radio and digital ads in a trio of critical states – Colorado, Kentucky, and North Carolina – to shed additional light on the economic impact these regulations could have and to ensure that policymakers are paying attention.

Our recent analysis of the pending revisions found that the U.S. stands to lose trillions of dollars and potentially millions of jobs at the hands of the new standard, making it potentially the most expensive regulation ever imposed on the American public. NAM President and CEO Jay Timmons put a finer point on the matter last week in the editorial pages of the Wall Street Journal, writing that “no single regulation has come close to rendering this level of self-inflicted and ultimately unnecessary economic pain.”

The national numbers are massive. And in the states, the economic toll is no less staggering – a point that our new advertising campaign hopes to illuminate. In Colorado, for instance, businesses could face $11 billion in compliance costs. North Carolina could see its economic output drop by $150 billion and could shed 150,000 job equivalents every year. And the study projects that Kentuckians could say goodbye to $32 billion in economic activity and more than 30,000 job equivalents.

The outlook is no better in other states, where pending revisions to the ozone standard threaten to similarly sap economic activity and drive away jobs.

Manufacturers are ready to keep providing the economic fuel that has helped to put our economy back on track. But we need a sound regulatory landscape in order to do that. This week’s ads underscore this fact. And the NAM will work throughout the coming months to make sure that policymakers understand what the EPA’s aggressive new ozone standards could mean for the American economy.

To see our new online ads, or to listen to the radio ads, click here. And be sure to keep tabs on our ongoing education campaign at www.NAM.org/ozone.

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Oregon Deals Blow to Exports by Denying Permit for Morrow Export Terminal Expansion

Yesterday, the Oregon Department of State Lands slapped a “closed for business” sign on future export projects along its coast. In what sadly comes as no surprise given Gov. Kitzhaber’s vocal opposition to the project, today the state agency responsible for issuing a state dock “fill” permit denied that permit for Ambre Energy’s Coyote Island coal export Terminal at the Port of Morrow.

For manufacturers, this is a disturbing precedent. Our goods are exported, and a great deal of them travel through ports in Oregon. Today, one state’s vendetta against coal may have inadvertently erected new barriers to the export of all manufactured products through the state. Moreover, it might be subjecting the nation to trade liability under WTO agreements, as set forth by a NAM report last December.

Manufacturers are obviously disappointed, and urge Oregon to work through whatever issues it needs to work through so that the Port of Morrow may be constructed.

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Time Will Tell If DOE Has Fixed The Problem

The Department of Energy (DOE), which has faced broad criticism over its slow handling of applications for a license to export liquefied natural gas (LNG), today finalized new procedures that it says will expedite the process. While we are glad that the DOE has responded to these criticisms proactively by taking steps to address the problem, only time will tell whether any of these procedural changes will actually work. We are disappointed that several of NAM’s proposed changes, which we believe would have strengthened the rule, were not accepted.

The bottom line for manufacturers is that this permitting process for energy exports should operate in a way that permits the market to function. If the DOE’s new procedures get us there, great. If not, then DOE should plan to hear a lot more from us.

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NAM in the Wall Street Journal: The EPA’s Latest Threat to Economic Growth

The clock continues to tick on EPA’s pending revisions to the National Ambient Air Quality Standards for ground-level ozone. The new rule, expected in December, could cost the economy at large $270 billion each year and put millions of jobs at risk, as noted in the analysis we recently released with NERA Economic Consulting. At these costs – which would total more than $2 trillion in lost GDP through 2040 – new ozone standards would be the most expensive rule ever imposed on the American public.

NAM President and CEO Jay Timmons took to the editorial pages of the Wall Street Journal this week to discuss the economic threat posed by new ozone standards in an OpEd titled “The EPA’s Latest Threat to Economic Growth.” In the piece, Mr. Timmons sheds light on the historic scale of this regulatory threat:

According to a new study for the National Association of Manufacturers by NERA Economic Consulting, the new ozone standard could cost Americans $270 billion annually, put millions of jobs at risk, and drastically increase energy prices for consumers and manufacturers. No single regulation has come close to rendering this level of self-inflicted and ultimately unnecessary economic pain. 

The piece goes on to note the troubling reality that – even among regulators at the EPA – it’s not clear how this new standard could even be met without widespread reduction in economic activity:

Remarkably, the EPA has only identified one-third of the controls and technologies that companies and state governments will need to implement to meet the new standard. The other two-thirds are what the agency refers to as “unknown controls.”

However, we do know that the new ozone standard could mean shutting down, scrapping, and modifying power plants, factories, heavy-duty vehicles, farm equipment, off-road vehicles and even passenger cars. Costs would be passed on to consumers, who would have thousands less to spend every year.

The manufacturing renaissance currently underway has helped bring thousands of jobs back to the United States and fuel our economic recovery. A new ozone rule at the levels EPA staff are currently recommending could undo this growth, slamming manufacturers and businesses of all stripes with a mandate so aggressive that even national parks will fail to comply. That’s why we’ll continue our effort throughout this fall to educate lawmakers and the public alike about the threat on the horizon, urging the EPA to allow the significant cuts made by the existing standard to be fully implemented before considering a tighter standard.

Read Mr. Timmons Op-Ed in the Wall Street Journal here, and check out our video describing ground-level ozone policies here.

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Shocking news! Production of fossil fuels from federal and Indian lands fell in 2013.

The U.S. Energy Information Administration (EIA) noted today in their daily “Today In Energy” that  “Sales volumes of fossil fuels from production on federal and Indian lands in fiscal year (FY) 2013 dropped 7% from FY 2012, according to EIA’s recently released annual report. Crude oil production on federal lands increased slightly in FY 2013, but that increase was more than offset by decreases in coal, natural gas, and natural gas plant liquids (NGPL) production. Sales of fossil fuels from federal and Indian lands accounted for about 26% of total fossil fuel sales volumes in the United States in 2013.”

The EIA went on to note that, “Since FY 2003, sales of fossil fuels produced on federal and Indian lands have fallen 21%, driven by declines in natural gas production and coal production. From FY 2003 to FY 2013, total U.S. fossil fuel production increased by 14%, with a 34% increase in production from nonfederal, non-Indian lands offsetting the decline from federal and Indian lands.”

“One of the main drivers in the decline in sales of fossil fuels from federal and Indian lands is the drop in offshore natural gas production, even as total U.S. natural gas production has grown rapidly because of rising production from onshore shale resources on private lands. Federal onshore natural gas sales volumes have generally increased over FY 2003-13, overtaking federal offshore production in FY 2007.”

There are a couple of things worth noting from this update. First, the percentage of our fossil fuels coming from federal lands continues to drop despite the United States’ abundance of resources. Second, the percentage of natural gas coming from federal lands offshore continues to decline despite improved extraction technology. Third, although federal onshore natural gas production has increased slightly it has been dwarfed by natural gas production from private lands.

This year the United States has become the largest producer in the world of natural gas and oil. Just last week Bank of America  announced that U.S. oil production has now exceeded both Saudi Arabia and Russia production. This is due to the fact that “Oil extraction is soaring at shale formations in Texas and North Dakota…” Most all of this is taking place on private lands using ever improving extraction methods.

If we want to continue to reduce the amount of oil we import from unfriendly parts of the world then we need to increase our energy production from federal lands and we need to finish the Keystone Pipeline so we can import oil from our friends to the north, Canada. We need federal energy policies that make sense and allow our country to increase our energy security and avoid relying on oil that comes from volatile regions of the world.

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Don’t Let the Comeback Turn Into a Fallback

Abundant domestic oil and gas resources are fueling a manufacturing comeback in the United States. A recent report by IHS Global Insight found that increased oil and gas production is supporting millions of jobs, increasing household incomes, boosting trade and contributing to a new increase in U.S. competitiveness around the world. For manufacturers and other energy consumers, the development of shale oil and natural gas in the United States in particular has been a “game-changer” in terms of reduced energy costs, increased access to secure energy supplies and availability of a low-cost raw material.

The chemistry industry alone has generated billions of dollars of new investment thanks to this innovation. Manufacturers believe continued shale oil and gas development is a critical component of a successful ‘all-of-the-above’ energy strategy. So it’s no surprise that Manufacturers, both energy producers and energy consumers, support policies that will help advance—not slow down—domestic energy production.

Unfortunately, we’re disappointed to hear reports that policy makers in Pennsylvania are considering imposing a “severance” tax on energy companies based on the value of the gas extracted from wells in the state. The impact of a severance tax is easy to calculate: new taxes translate into higher costs, less production and another hurdle for a manufacturing comeback.

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Manufacturers Remain Concerned by GHG Rules After McCabe Testimony

 

Manufacturers remain concerned that the Administration’s proposed greenhouse (GHG) rule will limit fuel options, increase energy costs and threaten the reliability of our electric grid. Today, Janet McCabe, EPA’s Assistant Administrator for the Office of Air and Radiation, testified before the Energy and Power Subcommittee that the EPA’s rule would “drive economic growth” and “provide a role for wide range of fuels”. We are not convinced. In fact, the more we dive into the 645-page proposal, the more it is apparent that limiting fuel options and increasing energy costs is the goal and inevitable outcome of this regulation. The Administration has yet to adequately assess the impact this policy will have on energy costs; the impact higher energy costs will have on manufacturers’ competitiveness; and the impact a less competitive manufacturing sector will have on jobs and the economy at large.

Manufacturers appreciate the agency’s willingness to meet with stakeholders on these regulations, however until some of these fundamental concerns are addressed, we remain concerned. The NAM serves as the co-chair of the Partnership for a Better Energy Future (PBEF), which comprises more than 150 organizations representing more than 80 percent of the U.S. economy. PBEF is the leading voice in support of a unified strategy and message in response to the Obama Administration’s greenhouse gas regulatory agenda.

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FERC Approves of LNG Terminal = Jobs and Economic growth!

Earlier today the Federal Energy Regulatory Commission (FERC) authorized Sempra Energy Corp’s, Cameron LNG terminal expansion project. The authorization permits Sempra “to site, construct and operate facilities to liquefy and export domestically produced natural gas.” In addition, FERC authorized the construction and operation of a pipeline and compression facilities. This is the second terminal that FERC has authorized and the first facility since April 2012.

In reaching this decision, FERC completed a comprehensive environmental review of the project and determined that the project would not have a significant impact. As part of this review FERC required Sempra to agree to some 75 conditions to further mitigate any “potential environmental impacts.”

The only remaining regulatory piece is that the Department of Energy’s needs to provide final approval for Sempra to exports to non-Free Trade Agreement countries. The project received conditional approval to export to non-Free Trade Agreement countries in February of this year.

The Cameron LNG expansion will lead to 3,000 direct new jobs and tens of thousands of indirect new jobs. The project will invest almost $10 billion dollars which will generate hundreds of millions of additional economic development as well as millions of dollars in new tax revenues to local, county, state and federal governments.

Energy and Manufacturing continues to lead the effort to get our economy back on track. This latest approval demonstrates the ripple effect a project of this magnitude has on local and the national economy. This project will impact the manufacturing supply chain and create new opportunities for manufacturers and create thousands of new jobs. There are a number of other LNG projects still waiting FERC approval to move forward with construction and operation. These other projects also promise to create jobs and economic growth.

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Promoting New Manufacturing Act Language Passes Important Hurdle.

Yesterday the House Energy and Commerce Subcommittee on Energy and Power passed the discussion draft of the Promoting New Manufacturing Act on a bipartisan 14-8 vote. Chairman Whitfield stated:

“We need to create jobs, and one way to do this is by promoting manufacturing. I agree that we must have a ‘can do’ attitude as Obama said last week, but we must have ‘can do’ opportunities for the American people and the spirit of this country.”

The bill seeks to improve the process of preconstruction air quality permits in the U.S. by addressing the need for expediting the process and providing greater transparency of the approval timeline by the Environmental Protection Agency (EPA).

NAM vice president of energy and resources Ross Eisenberg testified before the Subcommittee during a hearing on the bill on May 21. Eisenberg shared how NAM members are frequently discouraged by the New Source Review (NSR) program in the Clean Air Act from building new or modifying existing “major sources” as the attainment of the permit alone can take several years. Each permit is issued by the state air quality control agency, which means the process varies from state to state, and the best available control technology (BACT) they must install is selected on a case-by-case basis for each facility. The discussion draft proposed by the Subcommittee would require the EPA to publish data on the number of permits issued annually, and the length of time it takes to get a permit approved, to ensure that if there is an issue Congress and the EPA will be able to asses and improve the process. And it would require that any new guidance or regulation implementing a revised NAAQS, such as the ground-level Ozone revision expected in 2015, would be published concurrently with the new standard, or would not affect preconstruction permits currently in consideration until they are published.

“As a consequence of the 2009 Endangerment Finding for Greenhouse Gases (GHGs) and the ensuing Light-Duty Vehicle GHG Rule, the EPA extended the reach of NSR to GHGs. Sensing an immediate problem—PSD for GHGs at the statutorily required levels would expose six million buildings to preconstruction permitting—the agency issued the GHG Tailoring Rule, which raised the NSR/PSD thresholds for GHGs. The agency estimated that, even at the GHG Tailoring Rule levels, it would still need to issue 900 PSD permits per year for GHGs. However, recent information from the EPA shows that in the three-plus years since NSR/PSD was extended to GHGs, only 166 permits have been issued in total. That is a stunning drop-off in PSD permits, one for which the agency does not seem to have an easy answer. Manufacturers fear that PSD for GHGs may be acting as a deterrent to new construction.”

The manufacturing comeback is reliant on an Administration that understands the need for a streamlined and transparent permitting process to allow for them to apply for permits and build new, or renovate existing facilities, without an unknown length of time passing for their approval. In the time it may take for a permit to be approved, a new EPA standard could be put in place midstream, and with the project no longer being viable, force the company to abandon the project or face higher costs and longer timelines to make the adjustments. The NAM will continue to advocate for an NSR process that encourages new investment by manufacturers, while offering them a reliable and efficient permit process.

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Manufacturers Continue Fight Against Public Nuisance Suits

The Supreme Court meets today in closed conference to decide whether to hear a case that could set the stage for thousands of environmental suits against manufacturers who are in full compliance with their permits from the Environmental Protection Agency (EPA) and its state counterparts. Unless reversed, the appeals court decision in GenOn Power Midwest, L.P. v. Bell will open the courts for property owners and residents near manufacturing plants around the country to sue those companies for emitting anything from their plants.

An editorial in yesterday’s Wall Street Journal highlights the problem: “Failing to reverse the decision could expose U.S. industry to billion [sic] of dollars of liability and lead to a state-by-state chopped salad of pollution controls as judges make what are quintessentially political decisions.”

The Manufacturers’ Center for Legal Action is seeing this latest attempt to subject companies to so-called “public nuisance” litigation for activities already subject to permitting, equipment improvement requirements, monitoring, and public and private enforcement liability under the Clean Air Act. That law was supposed to provide a uniform system for environmental compliance and enforcement, but this lawsuit and others like it threaten to turn trial judges into EPA regulators, setting standards, monitoring compliance, and issuing penalties.  A similar case in Iowa is now awaiting a decision from that state’s Supreme Court.

We are harnessing the power of a broad range of manufacturing associations to help us tell our story in the courts.  Many groups, including the American Chemistry Council, the American Iron and Steel Institute, the Corn Refiners Association, and the Treated Wood Council, have joined in our effort to shine a light on this litigation problem.

In March, we asked the U.S. Supreme Court to review the GenOn Power case. We should find out on Monday whether the Court will hear the issue, and after full review, whether to end this nonsense once and for all.

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