Tag: "federal government"

The Effect of President Obama’s Keystone XL Veto

President Obama officially vetoed the Keystone XL pipeline project after bipartisan votes by both the House and Senate landed the bill on his desk. Without the Senate to block legislation from getting to his desk, the president is now planning to veto many bills that pass both houses. Veto-proof coalitions are now needed to pass legislation that provides benefits like the Keystone XL project.

The entire Keystone pipeline system is almost complete, the fourth and final phase of the system is known as Keystone XL. The Keystone XL Pipeline is a proposed 1,179-mile (1,897 km), 36-inch-diameter crude oil pipeline beginning in Hardisty, Alberta and extending south to Steele City, Nebraska. This pipeline is a critical infrastructure project for the energy security of the United States and for strengthening the American economy. The Keystone XL pipeline would have the capacity to transport 830,000 barrels of oil per day to Gulf Coast and Midwest refineries.

Approving the estimated $5.3 billion Keystone XL project would create approximately 9,000 construction jobs. When combined with the southern portion of the Keystone pipeline (the Gulf Coast Project), it is estimated that the total $7 billion pipeline could:

  • Create 13,000 construction and 7,000 manufacturing jobs.
  • Add $20 billion to U.S. GDP.
  • Add $5 billion in taxes revenue to local counties.
  • Generate as much as $5.2 billion in property tax revenue for Montana, South Dakota, Kansas, Oklahoma, Nebraska, and Texas collectively.
  • Over 2.6 million miles of pipeline in the United States that deliver both liquid petroleum products and natural gas, while the Keystone XL portion of the Keystone pipeline is less than 1,200 miles long.
  • The Canadian Energy Pipeline Association predicts that pipeline projects are worth $1.298 trillion dollars to the Canadian economy and $15.52 billion dollars in additional salaries to its citizens.
  • The U.S. State Department reported an increase of 42,000 jobs during the construction process, and roughly 118,000 jobs to maintain the pipeline and the refineries.
  • 70 percent of petroleum and crude oil are currently shipped by pipeline, which in recent years has proven to be safer than shipping oil by rail.

A recent study by the Fraser Institute affirms their safety by reporting pipeline accidents are a staggering 30 times less harmful than by train. According to a study by Southern Methodist University’s Maguire Energy Institute, there are substantial economic benefits with the TransCanada Keystone Pipeline System.

The United States’ State Department issued a multi-thousand page report which took years of research, compilation and coordination to produce which concluded definitively that the Keystone pipeline would be safe ― it would have “no significant impacts.”

Feb 25, 2015 | 2 comments | by

GMO Apples: Coming to a Store Near You in 2017

A new strain of genetically modified apples that don’t bruise or brown when cut have been approved for planting and sale in the U.S., according to the Department of Agriculture. After evaluation, the Department of Agriculture has said that the apples are “unlikely to pose a plant pest risk or to have a significant impact on the human environment.”

The apples, which will be marketed as “Arctic Granny and Arctic Golden,” could hit shelves as early as 2017. The new fruits were designed to reduce food waste and expand the sliced fruit market, and are the latest in a new crop development trend: using genetic engineering to up customer appeal, rather than farmer benefits.

NCPA research has already outlined the benefits of biotech crops for combating global hunger. By targeting genetic modifications at consumers rather than just producers, genetically modified crops can gain a larger foothold in the market ― and move closer towards widespread public acceptance.

While GMOs have a fairly large presence in U.S. markets, they continue to struggle abroad. Heavy restrictions, lengthy authorization and risk assessment processes, and split public opinion all inhibit the progress of GMOs in other nations. Perhaps making modifications that benefit consumers will soothe both public and government concerns, and encourage nations to ease restrictions on GMOs and other forms of biotechnology.

Feb 18, 2015 | 1 comment | by

Transportation Budget from the White House – Deja Vu All Over Again

It is that time of year for a President Obama transportation tradition. Each of the past six years, the President has sent a transportation proposal, concept, or list of guidelines to Congress. And each year Congress, in a bipartisan manner, has rejected the President’s proposals as being completely unreasonable. Some hoped, with the prospect of corporate tax reform, that this year’s budget would be different. But while somewhat better than past years, this year’s budget is still an unrealistic document that is more focused on politics than policy.

The White House submitted a $95 billion budget request for USDOT for fiscal year 2016. The budget is a $22 billion or 31% increase, over 2015. And the Administration proposes to achieve this increase by removing Amtrak, transit new starts grants, TIGER grants, high speed rail funding, and a few other items controlled by the Appropriations committee. If this sounds familiar it is because the White House has submitted a variation of this proposal for the last several year; it has been rejected on all occasions in a bipartisan manner.

The first problem with this approach is it takes power out of the Appropriations committee and gives it to the White House. Appropriations committee members like the power of the purse and are unlikely to give it up even if they and the President agree on transportation policy.

The second problem is this proposal changes the fundamental users-pay/users-benefit nature of the highway trust fund. Both roadway and transit interests have dedicated funding in the current system. While transit might receive more funding under the President’s proposal, the funding is not guaranteed so it is unclear they would support this change. Other than passenger rail interests, it is unclear who would support this change.

The final and biggest problem is finding the money to pay for this proposal. The President is proposing a 14% tax on repatriated profits. However, there is bipartisan consensus that 14% is too high. Senators Boxer and Paul have introduced a 6% rate which is far more likely to pass. But the 6% does not provide enough money to fund the proposal. And both taxes are short-term fixes that do not provide the long-term certainty the transportation community is seeking.

For the seventh year in a row, the White House has proposed an overtly political budget which has no chance of passing. It is déjà vu all over again.

Feb 18, 2015 | Leave a Comment | by

NASA and EPA Causing More Political Trouble

NASA released a new study that warns about severe weather, such as “megadroughts” that will plague the Southwest and Central Plains of the United States from 2050 to 2099. The study says that greenhouse gas emissions can increase the likelihood of this severe weather.

If greenhouse gas emissions continue to increase along current trajectories throughout the 21st century, there is an 80 percent likelihood of a decades-long megadrought in the Southwest and Central Plains between the years 2050 and 2099.

At the same time, the Environment Protection Agency’s (EPA) rules for mercury emissions from power plants (specifically targeting coal power plants) is going to be reviewed by the U.S. Supreme Court. The mercury emissions rules would help close down every coal power plant that provides close to 40 percent of the electricity in the United States. As the Supreme Court reviews these rules, the court should consider that:

  • There is more mercury in the air from natural sources ― such as volcanoes ― than from all human activity.
  • Mercury emitted from both volcanoes and coal-fired smokestacks resides for months in the air, usually until it is precipitated out by some rainstorm. In addition, a large amount of the mercury that falls in North America originated in highly polluted China.
  • All U.S. emissions are 2 percent of the global total.
  • U.S. power plants emit only half of that ― about 0.5 percent of the total ― and by 2016 will emit even less than that.

The climate is changing, always has and will continue to do so. However, the human impact to that change, especially in the United States, is minimal. Making this issue so politically incendiary distracts our leaders from doing their job, hurts our economy and weakens the U.S. position in the world.

Feb 16, 2015 | 2 comments | by

Alaskan Oil Put on Ice With New Proposal

Last week, the Interior Department’s Bureau of Ocean Energy Management issued a five-year strategy that would open offshore drilling from Virginia to Georgia, but put previously deferred areas off the Alaskan coast off-limits, reports Politico.

While possibly good news for the Atlantic coast ― as well as the oil and gas industry ― the Alaskan delegation is far from pleased. Just last week, the Obama administration announced its intention to close of 12.28 million acres of Alaskan land from oil and gas exploration in the name of wildlife preservation.

“This administration is determined to shut down oil and gas production in Alaska’s federal areas ― and this offshore plan is yet another example of their short-sighted thinking,” said Senator Lisa Murkowski, the chairman of the Senate Energy and Natural Resources Committee in a statement. “The president’s indefinite withdrawal of broad areas of the Beaufort and Chukchi seas is the same unilateral approach this administration is taking in placing restrictions on the vast energy resources in ANWR and the NPR-A.”

While the Interior’s proposed plan does included three proposed lease sales in Alaska’s federal waters, Murkowski says it’s not enough. “The proposed lease sales we’re talking about right now aren’t scheduled until after President Obama is out of office,” Murkowski said. “Forgive me for remaining skeptical about this administration’s commitment to our energy security.”

Obama’s recent give-and-take oil and gas policy is particularly confusing in the wake of his State of the Union address, where he lauded the U.S.’s growth in production and drop in oil prices over the past year.

Feb 04, 2015 | Leave a Comment | by

EPA Final Rule Revising Definition of Solid Waste

The Environmental Protection Agency’s (EPA) final rule on the definition of solid waste will become effective on July 13, 2015. Perhaps the biggest revision in the rule is EPA’s withdrawal of the transfer-based exclusion codified in the 2008 rule. In its place, EPA created the “verified recycler exclusion.” This new provision requires that all recyclers operating under this provision have RCRA permits or obtain variances prior to reclaiming hazardous secondary materials. Factors in the new provision:

  • hazardous secondary material must provide a useful contribution to the product or recycling process
  • recycling process must produce a valuable product or intermediate
  • hazardous secondary material must be managed as a valuable commodity
  • recycled product must be comparable to a legitimate product or intermediate

According to analysis conducted by Bergeson & Campbell, PC:

The rule retains the exclusion for hazardous secondary materials that are legitimately reclaimed under the control of the generator (generator-controlled exclusion), but adds several conditions to the exclusion, including notification and recordkeeping requirements and emergency preparedness and response conditions. EPA also modified the transfer-based exclusion by adding several conditions, including one that recyclers have financial assurance in place to manage the materials left behind when the facility closes. An addition to the rule is the remanufacturing exclusion, which exempts certain higher-value solvents transferred from one manufacturer to another for the purpose of extending the useful life of the solvent by remanufacturing the spent solvent back into commercial grade solvent.

Feb 02, 2015 | 1 comment | by

Obama Starts Tug-Of-War over 12 Million Acres

The Obama administration’s proposal to expand federally protected lands in Alaska has sparked huge controversy with the state’s entire government.

Alaska’s Arctic National Wildlife Refuge (ANWR) currently protects about seven million acres from oil and gas exploration. Obama’s new proposal would close off another 12.28 million acres. Closing off this land “is a stunning attack on our sovereignty and our ability to develop a strong economy,” said Senate Energy and Natural Resources Committee Chairwoman Lisa Murkowski, a Republican from Alaska:

It’s clear this administration does not care about us, and sees us as nothing but a territory. The promises made to us at statehood, and since then, mean absolutely nothing to them. I cannot understand why this administration is willing to negotiate with Iran, but not Alaska. But we will not be run over like this. We will fight back with every resource at our disposal.

Alaska’s Governor Bill Walker also expressed displeasure with the proposal, and is considering increasing oil development on state-owned lands in response to the proposal:

Having just given to Alaskans the State of the State and State of the Budget addresses, it’s clear that our fiscal challenges in both the short and long term would benefit significantly from increased oil production. This action by the federal government is a major setback toward reaching that goal. Therefore, I will consider accelerating the options available to us to increase oil exploration and production on state-owned lands.

The Obama administration says that Murkowski’s reaction to the announcement was “unwarranted.” However, this is not the first time Alaska and the Obama administration have butted heads. In 2013, Secretary of the Interior Sally Jewell rejected the construction of a gravel emergency road across Izembek National Wildlife Refuge, to the ire of Alaska lawmakers.

While the proposal requires congressional approval, the Interior can still create extra protections on the region. This proposal is already being heralded as one more example of the Obama administration’s federal overreach, and could continue to incite major discontent from Alaskan legislators.

 

Jan 28, 2015 | Leave a Comment | by

SOTU NCPA: The Invisible Hand and Unabated Oil Production

In OPEC’s 2014 World Oil Outlook (WOO), the energy giant projects sustained oil prices of over $100 per barrel for 2015 with slight drops in future oil prices as low as $95 per barrel…

Recent events have proven their short-run projections to be dead wrong.

In his State of The Union (SOTU) Address, President Obama came well-stocked (though certainly not well-received in the new Republican House and Senate) with good economic news which he readily used as ammunition to suppress critics. However, some of these developments, such as descending oil prices, are difficult to assign responsibility to.

What can easily be correlated is oil prices and popularity.

Throughout the night, the President acted triumphant and suave — touting what CNN claims to be above a 50% approval rating — it was as if President Obama came into Congress surfing on America’s wave of cheap oil. However, a sobering realization is that this same wave is what crashed down on President Jimmy Carter’s political career in 1979, as oil prices rose by approximately $60 a barrel, Carter’s approval rating subsequently sank to new depths below 30%.

Though the President is a fundamental player with substantial power in the private arena as well as the public, history has made it clear that the global forces determining supply and demand still reign supreme.

With respect to the agents of supply and demand: Citi’s New York-based investment bank is sounding the alarm that these oil prices may be here to stay, and in an increasing scramble to create economies of scale, there are increasing murmurs of mergers in the American oil and gas industry. Citi’s claims champion innovations such as hydraulic fracturing and horizontal drilling as being the reasons we can expect full oil and gas independence by 2020, if not sooner.

However, these claims are not without skepticism, after the beginning of the U.S. oil and fracking boom, the U.S. Energy Information Administration (EIA) published a more conservative timeline of U.S. oil import balances. Without omission of data and with proper considerations below, the NCPA has juxtaposed the two forecasts for your own judgment:

Oil Deficit and Surplus

Important Disclaimers:

  • Citigroup’s oil balances study “Energy 2020: Out of America,” was conducted more recently than the EIA’s study, “AEO2014 Early Release Overview.” It is possible that newly available data on the oil and fracking boom made their study more accurate
  • Citigroup undoubtedly holds financial claims with its affiliates in the crude oil and natural gas sectors, affiliates who may be looking to repeal the 1975 Energy Policy and Conservation Act, an antiquated government policy barring the export of oil from the U.S. If so, Citigroup has both political and financial motives to overstate growth in domestic oil and gas production
  • Likewise, the U.S. Energy Information Administration (EIA) may have strong political pressures to underestimate future domestic production

What is certain however, is that the collateral effects of a sustained increase in American supply would redefine the global environment for businesses and governments:

  • Business Insider notes, these low prices make way for the perfect time in which price-distorting subsidies worth billions of dollars could be erased without a major blow to the U.S. economy
  • Goldman Sachs and Slate.com assert that a decrease in overall drilling activity, while an increase in its efficiency has already amounted to a $75 billion tax-cut for Americans, a growing figure which they believe will become more valuable in the hands of middle-class Americans rather than in oil companies where much of the revenue may be redirected into the pockets of foreign investors. Similarly, during the SOTU Address, President Obama stated “the typical family this year should save $750 at the pump,” which amounts to a little over $80 billion in savings
  • Reuters proclaimed that new permits issued for oil drilling fell by 40% in 2014, a reflection of oil prices… this is a statistic that also represents the trend of unprofitable prospects in exploration, one which may slow the discovery of large oil reserves and distort “peak oil” claims
  • During the SOTU Address, President Obama touched upon perhaps the most important point, “we are as free from the grip of foreign oil as we’ve been in almost 30 years.” Indeed, and if Ted Cruz successfully repeals the Energy Policy and Conservation Act, the geopolitical leverage of groups such as OPEC and countries such as Russia would begin to erode in a way we have yet to see, and perhaps permanently
Jan 21, 2015 | 2 comments | by

Senators Plan to Raise the Gas Tax

The American public may be cheering falling gas prices, but they have Congress talking. Democrats and Republicans alike have started tossing around the idea of increasing the gas tax. This controversial proposal, while not exactly new, is gaining attention on Capitol Hill.

How much money are we talking?

According to the U.S. Energy Information Administration, household gasoline expenditures are set to be the lowest in 11 years, with the average family spending around $550 less in 2015 than in 2014.

The current gas tax sits at 18.4 cents per gallon for gasoline and 24.4 cents per gallon on diesel. Proposals have been floated by congressman and economists alike to raise the tax by around 12 cents per gallon, bringing the tax up to 30 cents per gallon for gasoline.

Who supports the tax, and why?

While much of the support for raising the gas tax comes from the left side of the aisle, it’s gaining support on the right as well. In June, Senators Bob Corker (R-TN) and Chris Murphy (D-CT) proposed raising the gas tax by 12 cents per gallon. Back in 2011, Senator Lamar Alexander discussed raising the gas tax to fill transit fund gaps.

Additionally, Senate Environment and Public Works Chairman James Inhofe, Senate Finance Chairman Orrin Hatch, and Senate Commerce Chairman John Thune have all expressed openness to discussing increasing the tax.

Most supporters of raising the tax suggest that the extra income should be used to compensate for the dwindling Highway Trust Fund to pay for much needed road and bridge work around the country. Supporters argue that the gas tax is less of a “tax” and more of a “user fee,” shifting the cost of road repairs to the people who use the roads.

Yet opponents to raising the tax argue that while it may seem fair, innovations like increasing miles-per-gallon and fuel efficiency reduce the uses for the tax. Senator Roy Blunt at a business roundtable:

They thought the people using the roads were paying for the roads, and everybody that’s trying to keep this transportation network in place is concerned about more miles per-gallon, more fuel efficiency standards, all actually put the same amount of traffic and weight on the road, but they reduce the amount of money you have to do anything about it. It’s a concern at all levels.

Jan 14, 2015 | 2 comments | by

Endangered Listing for Monarch Butterfly = Wrong Direction

While the federal government has already been involved and helping the monarch butterfly populations in the United States, recently, the U.S. Fish and Wildlife Service announced that it is going to protect the butterfly under the Endangered Species Act (ESA). The act has been used to save a number of species in the past. However, more and more evidence is showing that the ESA is also being used for other purposes. By placing species on the list, land use by the species can be turned over to the federal government. Recently, the prairie chicken was put on the list along with the infamous spotted owl standoff.

The butterflies mate, lay eggs and feed on milkweed plants while they are temporarily in the United States. Potentially, the federal government could gain control over all of the milkweed plant land.

Even a well-respected monarch butterfly expert (Chip Taylor) said that he does not welcome this form of protection of the butterfly. Taylor, an insect ecologist at Kansas University said:

Nobody wants the government to tell them what to do with their property. The real challenge is to get the message out and get the public involved. This really is the way to go.

The federal government can continue to grow its size and power through many actions including using the Endangered Species Act. As Taylor pointed out, there are other ways to protect a species. Public response and efforts to endangered species around the globe is really having great success. Federal government intervention is the wrong direction.

Jan 07, 2015 | 2 comments | by
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