Tag: "federal regulations"

Grant User-Friendly Tolling Flexibility for Highways

Today I want to offer the eighth and final recommendation for reforming U.S. surface transportation policy. Robert Poole and I implore Congress to grant user-friendly tolling flexibility for Interstate highway construction.

America’s Interstate highways are reaching the end of their 50-year design life, and will all need to be reconstructed over the next several decades. Many corridors — especially those that are primary truck routes — will need additional lanes. The estimated cost of reconstruction and prudent widening is nearly $1 trillion — and no funding source exists for this purpose. Urban Interstates experience chronic congestion that is not being systematically addressed.

The U.S. has a tolling pilot program, but all the slots are currently used. To allow other states to rebuild their Interstates through tolling, expand the three-state Interstate System Reconstruction and Rehabilitation Pilot Program to all 50 states and allow participating states to use it to reconstruct all Interstate highways in their states, not just one. To ensure the support of highway users, provide stronger protections to ensure that the tolls are pure user fees that can be used only for the capital and operating costs of the rebuilt rural and urban Interstates. These protections should include:

  • statutory limitation on use of the toll revenues to the rural and urban Interstates only
  • beginning tolling only after an Interstate segment has been rebuilt
  • requiring that tolling be all-electronic and interoperable nationwide
  • granting rebates of state fuel taxes to Interstate toll-payers for the miles driven on the newly tolled and rebuilt Interstates

The current three-state pilot program is deficient in that it allows a state to hold onto its slot without using it, precluding other states from going forward. And by limiting toll-financed reconstruction to a single corridor, it creates geographic inequity among highway users and precludes a responsible state DOT from offering a 20-year plan under which all of its Interstates will be reconstructed using toll financing. The highway user protections are critically important, given the well-justified skepticism of highway user groups based on a history of some states using toll road revenues for other transportation purposes and even “economic development.” All highway user groups endorse the users-pay/users-benefit principle, but they will only support toll-financed reconstruction if the tolls are guaranteed to be pure user fees, not a combination of user-fee and general transportation tax.

Since there is no identified source of funding for the $1 trillion cost of Interstate reconstruction, a major benefit of this change is to provide such a funding source, available to states that comply with the user-friendly provisions. Since a per-mile toll is a mileage-based user fee, if all 50 states opted in, that would convert 25% of all vehicle-miles of travel to mileage-based user fees, an important first step toward replacing per-gallon fuel taxes. If the toll rates were limited to covering the capital and operating costs of the rebuilt system, highway users would pay somewhat more than they do now to use the Interstates, but would receive much better services.

Apr 20, 2015 | 1 comment | by

American Energy Renaissance Act — Why Oil and Gas Matter

The American Energy Renaissance Act of 2014 — a bill proposed by Senator and now presidential candidate, Ted Cruz — proposes many drastic changes to the status quo surrounding energy and environmental regulations, some of which include:

  • Giving only states the right to regulate hydraulic fracturing
  • Preventing the Environmental Protection Agency (EPA) from regulating carbon dioxide (CO2), methane, water vapor and nitrous oxide emissions
  • Repealing regulations on crude oil exports

Passage of the bill would be lauded by energy proponents, and while as a whole it would be no victory for traditional environmentalists, one of its provisions stands out, as it seeks to phase out engine-damaging ethanol fuel and create a higher standard for fuel economy. One can only truly understand the magnitude of improving fuel economy across the board by first looking at CO2 emissions by source:

Greenhouse Gas Emission

Transportation, which is second only to the electric power sector in terms of carbon dioxide emissions, could see significant long-term reduction in emissions while creating a surplus in disposable income for Americans and business owners. Notably, passage of the bill does not imply that American oil companies would be at a significant disadvantage due to the simple fact that it would open a whole new niche for American crude in the international economy.

Energy CO2 Emissions

Also striking is coal’s share of carbon dioxide emissions in the electric power industry — for coal’s actual share in energy generation as seen below, it seems almost unwarranted:

Electric Power Generation

Natural gas, while still not yet as widespread as coal, is very cost competitive, with liquid natural gas (LNG) at less than $10 per British thermal unit (Btu) while normal gas flirts with numbers around and below $5. Furthermore, if natural gas cannibalized market share from the coal sector — as is likely given the amount of continuing regulations on coal — it would help both the economy and the environment. Indeed, the Energy Information Administration asserts that for every million Btu generated, coal can release between 214 and 228 pounds of CO2 while natural gas creates almost half at 117 pounds per million Btu. While opponents of natural gas could cite its past price volatility, the past 5 years have been quite stable and the fracking boom is no reason to believe that the energy will be subject to much variance, at least not besides cyclical winter-heating and summer-cooling fluctuations, which coal can also be subject to. On the contrary, the market for coal is either becoming too expensive due to relentless regulation or disappearing altogether, especially abroad in developed countries.

The consumer free market response to any good or service in production is to demand quality proportional to whatever price level that consumer is willing and able to pay. With time, more countries are joining the ranks of developed nations who — like the U.S. — are characterizing themselves as more than willing to pay premiums on energy for better environmental quality. Additionally, natural gas has a history of matching or even beating domestic coal prices in the private sector, while mounting pressure on the public sector is slowly opening the international markets for both gas and oil.

Apr 08, 2015 | Leave a Comment | by

Eliminate Air Quality Standards for Regions that Meet Standard

Today, I want to offer the fifth of my recommendations to reform U.S. surface transportation policy. My colleague David Hartgen and I recommend that the Clean Air Act of 1990 be amended in two ways. First, eliminate the conformity requirement for regions meeting clean air standards. Second, review regions not in conformity every 10 years, after new census data has been released.

The Clean Air Act of 1990 (CAA) requires each region currently in non-attainment with air quality standards to submit plans demonstrating that it will be in compliance in the future. For transportation, each region must show that its’ Transportation Improvement Plan (TIP) “conforms” to the State Implementation Plan for air quality improvement. In the DOT Rules (40 CFR 93), this means that the region’s TIP projects will, as a whole, not increase future emissions above the no-build level or above budgeted emissions.

The present rule requires even very small regions to conduct extensive forecasting of air pollution if they were ever in non-attainment of air quality standards. But virtually all of the future reduction in regional air pollution will be caused by cleaner vehicles, not by local transportation actions. Recent reviews of the air quality plans of 48 regions found that every region predicted a 30-50% reduction in vehicle emissions over 20 years even as travel increased, and that the TIP would reduce emissions by only 0.25-0.5% — way too small to be significant. Further, the conformity rule requires reduction of emissions (measured in tons of pollutant) but the CAA standards are for concentrations (measured in parts per billion in air). Therefore, there is no direct connection between the rule’s emissions analysis and the CAA’s concentration requirements.

Very few regions have been cited for non-conforming plans from among the literally hundreds submitted. A 2003 GAO analysis found that only five regions out of 200+ revised their plans based on conformity, and that frequent updating was administratively burdensome. No region has actually lost federal funds as a result of non-conformity. For major projects environmental impact statement analysis already requires additional air quality analysis, so requiring regions to do it twice is duplicative and burdensome. In this way the rule has become an administrative hurdle that duplicates later needed work, does not improve local air quality, and requires huge administrative effort to ensure certification for federal funds.

Regions — particularly the 400+ smaller ones — will have significant relief of administrative burden. Assuming that the conformity analysis costs $20,000 per certification, administrative time, and administration costs, this change would save nearly $8M that could be better spent on effective transportation planning. Air quality would not degrade as a result of this change.

Apr 01, 2015 | Leave a Comment | by

National Ambient Air Quality Standards for Ozone response

Submitted comments to the Environmental Protection Agency on National Ambient Air Quality Standards for Ozone.

Mar 30, 2015 | Leave a Comment | by

Energy Giants Mull Over a Huge Discovery in Russia

In late September 2014, ExxonMobil and Rosneft — Russia’s largest state-owned oil company — announced the find of a huge oil and gas reserve in the Kara Sea between Russia and the Arctic. So large in fact, International Business Times says, “deposits are estimated to be worth $900 billion and comparable in size to Saudi Arabia’s vast onshore deposits.” The operation was headed by the Arctic Research and Design Center for Offshore Developments, an organization created jointly by ExxonMobil and Rosneft to handle the logistical steps for specialized ice-platform drilling, adherence to environmental regulations and further research on yields for Arctic exploration.

Apart from throwing another wrench into the peak oil argument, the claim is a sign that controversial Arctic exploration and drilling could be immensely profitable.

In the wake of immense possible gain, the two energy titans’ hands have been tied by politics and conflict. ExxonMobil was forced to abandon a $700 billion exploration project — of which they own 33 percent — due to the escalating tension amid the U.S. and Russian administrations. As a result, the Exxon-led project has come to a standstill, depriving Russia of possible buffer against its rapidly shrinking oil and gas fields. Is if this weren’t enough of a damper on public-private relations, ExxonMobil’s CEO, Rex Tillerson, returned to Russia to personally address the future of the wells and the company’s grievances against the Russian government, which include over-taxing Exxon during its discovery and drilling operations.

Rosneft had hoped to continue exploration activities and begin expanding into other sectors of the Arctic Ocean, as the potential to find reserves of unprecedented scale still remains very high. Sadly, it is becoming more and more apparent that for years to come, American participation and the profitability of these ventures, will remain largely dependent on Washington and Moscow’s relationship.

Mar 23, 2015 | Leave a Comment | by

The Case for Lifting the Crude Oil Export Ban

The United States is running out of room in its crude oil storage facilities and the question is ― where does the crude go now? As domestic crude oil production continues to rise, it has no place to go due to an obsolete ban on the exportation of crude oil in the U.S.

The International Energy Agency said in its monthly oil market report that U.S. supply shows no signs of slowing down, an assessment that pushed the price of crude below $57 a barrel and lowered gas prices at the pump. Low gas prices led to record amounts of driving in 2014, culminating in a record-breaking December, new federal data shows.

With the U.S. now producing more oil and natural gas than Russian and Saudi Arabia, over 11 million barrels a day (55 percent increase from five years ago), lifting the U.S. oil export ban would:

  • Add over $1 trillion in government revenues by 2030.
  • Create 300,000 more jobs a year.
  • Increase current U.S. production from 8.2 million B/D currently to 11.2 million B/D.
  • Cut the U.S. oil import bill by an average of $67 billion per year.
  • Lower gasoline prices by an annual average of 8 cents per gallon.
  • Save U.S. motorists $265 billion for during the 2016-2030 period.

Despite the fact that oil imports are at the lowest level since 1985, the U.S. still imports 33 percent of its oil from foreign sources. A broad view by the public is that U.S. oil should stay at home will test export proponents. A majority of voters, 53 percent, opposed exporting oil. At present, the current policy is discouraging additional crude oil supplies from being brought to market, which actually makes gasoline prices higher than they otherwise would be. The increased economic activity resulting from the rise in crude production would support an average of 394,000 additional U.S. jobs over the 2016-2030 period, with a peak of 964,000 jobs in 2018.

Doing away with exports restrictions would also generate added benefits to U.S. household income, gross domestic product (GDP) and government revenues. The average disposable income per household would increase by an additional $391 in 2018 as benefits from increased investment.

The current hydraulic fracturing and American energy boom is reducing oil imports by 22 percent next year. Lifting the crude oil export ban would increase the energy boom. This boom could also reduce the oil imports of European countries. The United States could replace Russia title as “Europe’s gas station” and provide all of Europe’s energy needs.

Mar 18, 2015 | 3 comments | by

Federal Land Regulation Continues to Strangle Energy Production…

Federal land ownership in the United States continues to grow despite the federal government already owning more than half of most of the western states. While some have been advocating for the return of this land to the states or protect it from being closed off from oil and gas operations, the Obama Administration has worked just as hard to increase the federal government’s land grab. Contrast:  As President Bush’s second term as president was coming to an end, 4 million acres of land in Alaska was released by the Bureau of Land Management (BLM) for drilling and exploration. Seven years later, President Obama has proposed to set aside 12 million acres in Alaska, designating it as “wilderness” and off-limits to up to 42 billion barrels of oil.

Most recently, the Obama administration has proposed the largest critical habitat designation ever, setting aside 226 million acres of ocean off Alaska’s coastline (an area twice the size of California) to protect the Arctic ringed seals who were listed as “threatened” under the Endangered Species Act in 2012 after environmental activists petitioned the Obama administration.

Even though NOAA says that oil and gas activities have occurred in areas with protected species in the past, designating these Alaskan waters as a critical habitat would mean that all oil and gas activity would have to be evaluated based on how much it would impact ringed seals. Alaska’s outer continental shelf is considered to be one of the world’s largest untapped oil and gas reserves boasting as much as 27 billion barrels of oil and 132 trillion cubic feet of natural gas.

Other federal lands expansion that slipped into the National Defense Authorization Act (NDAA) would add 250,000 acres of new wilderness in western states and put thousands more acres off limits to drilling and mining in states.

In 2011, the U.S. Forest Service originally tried to ban fracking in the 1 million acre George Washington National Forest, but failed. It would have been the first outright ban on the practice in a national forest.

Much of the land targeted for government takeover holds great oil and natural gas resources which could provide jobs in the energy industry and a flow of resources from our own American supply. Once those lands become “monuments,” access to those natural resources is limited and in the hands of the federal government. The government currently owns 650 million acres, or 29 percent of the nation’s total land.

The Omnibus Public Land Management Act of 2009 and the Northern Rockies Ecosystem Protection Act (NREPA). The Omnibus bill was passed with over 100 land grab measures. The NREPA included federal takeover of nearly 24 million acres of land in the American west and northwest; however, NREPA never made it out of the House subcommittee.

The ability of the White House to simply snatch land from under the feet of the American people comes from the Antiquities Act of 1906. The Act was initially intended to set aside small portions of land for monuments and national parks, but has since been abused by lawmakers to control large quantities of property. Federal government land control and land acquisition takes away opportunities for development, particularly when it comes to much needed energy resources. The land designated as “monument” space could have created jobs, boosted the economy and enhanced our energy security.

Mar 16, 2015 | 2 comments | 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
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