La Jolla: Anatomy of a Plot
La Jolla: Anatomy of a Plot, Part I. Five years ago, at an informal gathering in an exclusive seaside community in San Diego, a small but determined group of activists hatched an ambitious plan: they would bring down some of America’s largest energy manufacturers, which also happen to be some of America’s largest employers.
Operating on hunches and guesswork, the group, comprised of activist academics, wealthy trial lawyers and public relations experts, spun a disparaging narrative about energy companies.
To prove their claims, they needed to gain access to internal energy company documents and that would mean convincing the Justice Department and state attorneys general to begin investigations.
Since that 2012 meeting in La Jolla, California, a lot has changed. What began as a series of informal discussions has evolved into a highly coordinated, far-reaching and well-funded campaign to persuade government officials to embark on taxpayer-funded fishing expeditions.
In recent years, the campaign has attracted the support of billionaires and deep-pocketed family foundations. In the coming weeks and months, Full Disclosure will chronicle the growth of this extensive web of collusion.
We’ll uncover which figures are fueling this costly effort. We’ll document how journalists whose work is funded by an explicit anti-manufacturing agenda are working to create a hostile climate for energy manufacturers and the men and women who work for them.
And we’ll expose the trial attorneys who, motivated by the prospect of colossal contingency fees, are working overtime to put American energy producers out of business and employees out of work.
As the days get shorter and the months grow colder, we are fortunate to have energy that warms our homes and gives us light to read a favorite book.
What we may forget is that domestic energy is also fueling a manufacturing renaissance. New resource production made possible by technological innovation is supporting millions of jobs, increasing household incomes, boosting trade and contributing to a new increase in U.S. competitiveness around the world. Domestic energy allows us to be productive at home and work. Relying on one-third of the energy used in the United States, manufacturing contributed $2.18 trillion to the U.S. economy in 2016. Renewable sources are growing quickly and diversifying the nation’s energy portfolio; our fleet of nuclear power plants cleanly and efficiently produce a substantial portion of the nation’s electricity; we have abundant supplies of coal, natural gas and oil; and advances in energy efficiency continue to save money.
Unfortunately, some people try to use energy as an issue to divide Americans. But that’s shortsighted.
Rather than picking one energy source over another, we should harness American creativity and competitiveness to drive efficiency from all energy sources. By making use of all of the United States’ domestic energy sources, we can ensure the best environmental outcomes at the lowest costs. Nuclear and fossil energy complement renewables like hydro, solar and wind and help ensure we have a diverse mix of energy resources. While solar and wind can produce varying amounts of energy, other energy is available on demand immediately and provides critical support to our renewable resources. For example, natural gas complements renewables and diversifies our energy portfolio. We are stronger together; together, we can forge long-term energy solutions.
That’s why manufacturers are watching the House Natural Resources Committee. The committee is busy marking up broad bipartisan legislation to strengthen energy policy on federal lands. H.R. 4239, the Strengthening the Economy with Critical Untapped Resources to Expand American Energy Act, or the SECURE American Energy Act, reforms existing regulatory frameworks for energy development on America’s Outer Continental Shelf and the vast onshore acreage that is under federal ownership.
Although energy production has surged in recent years, the vast majority of this new activity has occurred on private lands, while exploration on federal lands has shrunk. As a result, energy production continues to be artificially limited, reducing manufacturers’ potential competitive advantage. The federal government owns approximately 640 million acres onshore, or roughly 28 percent of the land, in the United States. And with 86 percent of our offshore resources unavailable for development or analysis, America could be producing much more. To remain competitive in a global economy, we need access to all kinds of energy—and that includes sharing the riches under our seas and on federal lands.
The onshore provisions of H.R. 4239 would allow for more local control over energy plans on federal land. States that demonstrate they can effectively regulate would also receive the full 50 percent of mineral revenues, helping to fund schools and public services like local police and fire. H.R. 4239 would also stop instances of duplicative federal regulations when a state already has effective requirements. The SECURE America’s Energy Act also strengthens our access to offshore energy, opening new areas to offshore wind energy and giving more states and local communities a chance to reap the benefits of exploration.
Continuing to expand fair access to energy resources allows us to be less dependent on foreign oil and ensure America’s energy independence. Manufacturers will continue supporting measures that promote expanded access to U.S. energy resources that make manufacturers more energy secure, while driving job creation and growth. Energy is an issue that can bring us together.
We live in an era of lawsuits based more in emotion than fact. In the manufacturing sector, we see litigation costs continuously rising and often at the expense of a better wage for the American worker. The National Association of Manufacturers (NAM) will shine a light on this concerning trend, beginning with an opinion piece just published in Investor’s Business Daily.
Linda Kelly, NAM senior vice president and general counsel and leader of the Manufacturers’ Center for Legal Action, describes in Investor’s Business Daily how trial lawyers seek to extort American workers, consumers and shareholders purely for profit. The piece lays out the widespread ramifications that new lawsuits pose to manufacturers in America, including the 12 million men and women that the NAM proudly represents across the United States.
Since 2005, manufacturers in America have reduced carbon emissions by 10 percent, all the while growing the American economy by 19 percent. Despite this clear commitment to the environment and economic prosperity for the American people, trial lawyers have initiated a disingenuous campaign, backed by well-funded activists, to discredit manufacturers and reap financial benefits at the cost of American workers and their families.
“Manufacturers are committed to climate action and are actively crafting solutions to this complex global challenge.”
One lawyer in particular, Michael Pawa, is a repeat player in this arena. In 2008, he unsuccessfully argued that American manufacturers had created a “public nuisance” in an attempt to set precedent for future lucrative endeavors. U.S. courts resoundingly rejected Pawa’s claims, but his politically motivated legal efforts continue today in cities like San Francisco and Oakland.
“Manufacturers are confident the courts will once again dismiss these efforts and see these lawsuits for what they are—legal attacks aimed at punishing an industry they don’t like. But manufacturers continue to be harassed by politically motivated legal officers operating with impunity beyond the reach of the courts.”
As Kelly points out, “every dollar spent defending against meritless attacks is a dollar not spent on innovation and game-changing revolutions that make our world healthier and communities safer,” and American manufacturers can ill afford to sustain unnecessary costs to their businesses and reputations.
All Americans should be wary of this free-for-all targeting by trial lawyers against the lifeblood of our economy, especially given the remarkable achievements that manufacturers have made toward enriching our environment and economic prosperity. The NAM is proud to support its members facing these frivolous lawsuits and will continue to work on behalf of the millions of American workers, consumers and shareholders that bear the brunt of these misguided legal attacks.
Later today, I’ll join President Donald Trump, Energy Secretary Rick Perry, Interior Secretary Ryan Zinke and Environmental Protection Agency Administrator Scott Pruitt for an “Energy Week” event at the Department of Energy headquarters here in Washington, D.C.
President Trump is expected to give a speech on American energy independence and “dominance.” This is the kind of leadership manufacturers want to see.
Access to affordable, reliable and diverse energy sources is essential to growing manufacturing in the United States. It’s about more than keeping the lights on; it’s about powering the heart of the American economy.
Manufacturing accounts for roughly one-third of all the energy consumed in the United States. If you make energy more abundant, you make it easier for companies of all sizes to expand their operations in the United States—and to hire more workers. There is a direct line between American energy access—or “dominance,” as the president puts it—and creating new jobs for Americans.
Over the years, manufacturers have produced the innovative new technologies that have allowed us to harness new sources of energy—and to improve our sustainability and make our energy use more efficient. Today’s access to affordable and diverse energy was unthinkable 20 or even 10 years ago. Now it’s time to build on that success.
Across this country, voters and elected leaders want to see the growth of manufacturing in the United States. If you support manufacturing, then you should support the continued development of American energy. Manufacturers use all forms of energy—oil, natural gas, coal, nuclear and renewables. America should lead the world in the development and deployment of all these energy forms.
Learn more about manufacturers’ energy agenda here.
On June 28, the House Energy and Commerce Committee will mark up H.R. 806, the Ozone Standards Implementation Act of 2017. This bill would create a more flexible glide path for manufacturers to comply with the 2015 ozone standard, harmonizing the compliance process for the 2015 standard with the behind-schedule process for the 2008 standard. In doing so, it would allow real ozone reductions to continue through 2025 without the unnecessary economic pain of ozone nonattainment. H.R. 806 would change the five-year review cycle for new standards to a more reasonable 10-year cycle, which is the typical time the Environmental Protection Agency (EPA) needs to complete these reviews. The bill also takes positive steps to address manufacturers’ permitting challenges as they pertain to ozone standards and requires real examination of the impact of international air pollution on domestic ozone levels.
The Clean Air Act has successfully improved air quality across the United States over the past four decades, leading to major reductions of virtually every single air pollutant. Ozone levels have declined roughly one-third since 1980, and the precursors that contribute to ozone—nitrogen oxides and volatile organic compounds—have been cut in half. In fact, the Obama EPA projected that the United States would achieve nearly the same air quality by 2025 even if the 2015 ozone standard was never implemented.
However, incremental improvements in ozone are now coming at an exponential cost. Even though most states can meet the 2015 standard by 2025, they would be unnecessarily thrown into “nonattainment,” a sort of economic penalty box, if the 2015 standard’s deadlines were to stay in place. H.R. 806 solves this problem by phasing the 2015 ozone standard implementation to align with air quality improvements that the Obama EPA found will occur anyway by 2025.
The NAM supports H.R. 806 and looks forward to working with the committee to get this important legislation to the president’s desk.
The Earth is often called the “blue planet” because water covers nearly three-quarters of its surface area. And even more water resources are stored beneath the crust. Consequently, it is easy to take water for granted, but manufacturers understand the importance of responsibly managing water resources and have been working to protect clean water for decades. That’s why we have been asking for a clear rule from the Environmental Protection Agency (EPA) that empowers everyone to join in protecting our waters. Today’s proposal is a critical step toward fixing our nation’s water policy.
Manufacturers have demonstrated leadership by not only minimizing the environmental impacts to water supplies but also helping to ensure adequate water supplies through conservation efforts. But at the same time, the management of water resources has been fraught with conflict. U.S. federal government regulators have abused their power to regulate navigable waters and usurped the role of local communities and individual property owners. While these abusive policies have often been stopped by federal courts, the lack of fair rules creates even more uncertainty for manufacturers. Although Congress intended the Clean Water Act to protect “the primary responsibilities and rights of states to prevent, reduce and eliminate pollution,” the federal government has disrupted this local-first approach and exceeded constitutional limits.
Since manufacturers rely on water for everything from growing agricultural inputs to engineering green chemistry and providing renewable power—smart water policy is critical. Conflicts over the allocation of water resources leaves manufacturers caught between contentious federal versus state or state versus state battles. This makes it difficult and at times impossible for manufacturers to plan for day-to-day activities and make long-term investment decisions.
Furthermore, regulatory uncertainty and prolonged conflicts undermine access to justice, weaken individual property rights and fail to protect critical water resources. Given the importance of water resources, manufacturers need local, state and federal water policies of cooperation rather than conflict to achieve greater transparency, adaptation and continued ecological restoration. Policies that respect individual property rights take a multisectoral approach and drive technology solutions and innovation work to strengthen our stewardship of water resources.
Manufacturers have asked the EPA for a clear rule protecting our nation’s waterways for decades. Our country can’t protect its waters without a clear rule that gives everyone a fair chance. So today’s action is welcome news. It is an important step in process of creating commonsense policy, but there’s more work to do. Manufacturers will continue to advocate a new rule that conforms to the Clean Water Act, protects our nation’s waters and provides clarity for manufacturers and landowners around the country. This will take time and cooperation, but our blue planet deserves nothing less.
The White House is making this week “Energy Week” and is putting the focus on America’s diverse energy mix and benefits it provides. Manufacturers are seeing this firsthand, as U.S. energy dominance is making manufacturers more competitive.
A recent study sponsored by the National Association of Manufacturers found that as a result of the increase in domestic shale gas production, we saw real GDP increase by $190 billion and 1.4 million more jobs. Just the construction of new natural gas pipelines to transport all this new energy meant more than 347,000 jobs in 2015, with almost 60,000 in manufacturing. Downstream, the benefits are even more striking: our friends at the American Chemistry Council estimate that abundant natural gas and natural gas liquids from shale resources have driven the chemical industry to invest in 294 new projects representing $294 billion in new economic output and 462,000 new jobs.
The energy renaissance is not limited to oil and gas. More than 100,000 workers contribute to the energy production at the nation’s 99 nuclear power plants, including manufacturers providing on-site repair, operations and maintenance as well as replacement components, modifications and upgrades when necessary. Pending retirements are spurring the industry to hire another 25,000 employees over the next few years, and in anticipation of new nuclear plant construction, U.S. companies have created in excess of 15,000 new U.S. jobs since 2005, which include manufactured products like turbines, polar cranes, pumps, valves, piping and instrumentation and control systems. Renewable energy sources have also steadily grown—consumption from wind, solar and geothermal energy sources have increased more than 400 percent over the past decade—now accounting for about 10 percent of total U.S. energy consumption and about 13 percent of electricity generation. Overall energy intensity in manufacturing (i.e., energy consumed per each dollar of goods produced) has steadily improved as manufacturers have grown more energy efficient. And even though the coal industry has faced its share of headwinds in the electric power sector—and is receiving much-needed regulatory relief—coal use in the non-electric-generation manufacturing sector has remained relatively stable, at around 43 million short tons of coal per year.
Manufacturers use a tremendous amount of energy, accounting for roughly one-third of the energy consumed in the United States. For energy-intensive manufacturers like chemicals, paper, metals and refining, energy is one of the largest costs. Manufacturers also make up the supply chain for every single energy source and technology, from fossil fuels, to renewables, to energy efficiency. The bottom line: when the energy sector is competitive, manufacturers are competitive. And that’s certainly what we are experiencing today.
Manufacturers appreciate the Trump administration’s focus on energy and look forward to a great week.
The U.S. industrial sector has been a longtime heavy energy consumer, accounting for one-third of the energy usage in the country. What’s more, the U.S. industrial sector has an annual energy bill of about $200 billion. While both of these statistics may seem startling, at Saint-Gobain, one of the world’s largest building materials companies and manufacturer of innovative material solutions, we believe these numbers present the opportunity for businesses to step up to the challenge to improve the energy efficiency of their manufacturing plants and facilities.
Already, more than 200 industrial partners representing close to 2,600 facilities in all 50 states have committed to the U.S. Department of Energy’s Better Plants Program to improve energy savings by 20 percent or more over the next 10 years. Our new president and CEO, Tom Kinisky, recently signed Saint-Gobain’s renewed pledge, allowing our company to further its energy-savings goals, increase the sustainability of our operations and reduce the overall carbon footprint of our manufacturing facilities.
While these pledges are nice to have, what’s most important is to consider the on-the-ground initiatives companies need to implement to help these goals become a reality. At Saint-Gobain, we believe a sense of competition among manufacturing plants and colleagues truly helps to move these goals forward. In 2016, our company’s Environmental, Health and Safety Department established the company’s Water, Waste and Energy (WWE) Program, which was recently recognized with a U.S. Department of Energy Better Practice Award. This program encourages more than 130 Saint-Gobain manufacturing sites to compete against each other to see which facility can best reduce its environmental impact by highlighting practical and effective solutions for increasing the sustainability of sites. At the end of the program, five sites are recognized with 20-pound championship-style belts and given the titles of “Waste Champion,” “Water Champion,” “Energy Champion,” “CO2 Champion” and “Overall Champion” to recognize their commitment to on-the-ground, effective energy-reduction solutions.
Through this program and by competing against their peers, Saint-Gobain manufacturing facilities across the country have been able to achieve substantial energy consumption reduction results. The program’s 2017 Energy Champion, Saint-Gobain Performance Plastics in Bristol, Rhode Island, took a systems approach to energy management resulting in a 45 percent energy intensity reduction over the past two years. The 2016 and 2017 CO2 Champion, CertainTeed Roofing in Oxford, North Carolina, invigorated its commitment to reducing energy and carbon dioxide emissions by forming a special committee of 24 members focused on working directly to reduce the site’s emissions. Through the efforts to upgrade heating elements on three of its main production lines, the plant was able to achieve a substantial reduction in natural gas usage. In addition, this year’s Water Champion, Saint-Gobain Quartz in Riverport, Kentucky, implemented the use of a cooling tower to achieve water savings and sealed a well that had been in use for years. The well water withdrawal was reduced from 131 million gallons in 2012 to zero gallons in 2015 and 2016.
Based on these percentages and statistics, it is clear that a sense of competition helps to spur outside-the-box thinking and improvements that are able to result in an overall positive impact for the company and its facilities as well as the planet. Let’s use this learning to encourage our employees and colleagues to compete for the greater good of the planet.