Tag: "federal regulations"

Organics: Another Fine Government Mess

The Organic Foods Production Act (OFPA), as part of the 1990 Farm Bill, established the National Organic Program (NOP). The program, as administered by the United States Department of Agriculture (USDA), oversees uniform standards governing the marketing of organically produced products. The NOP’s mission is to assure consumers of consistent organic standards of production and to facilitate the interstate commerce of organically produced food.

At the time of the NOP’s inception, the organic market for farm products had an estimated annual value of $1 billion.  By 2012, U.S. certified organic sales were at $28.4 billion and according to the USDA’s Economic Research Service (ERS), the sales for 2014 are estimated at $35 billion. It is clear that organic sales are showing significant growth, but at what costs?

The current Chipotle E. coli outbreak offers an opportunity for shoppers to understand the true nature of the USDA’s organic certification program. Numerous studies and public opinion polls find consumers overwhelmingly believe the higher priced, organically certified food is a healthier, safer choice.  However, experts, consumer groups and scientific research does not support that view.

In one example, a 14-page letter dated October 8, 2015, by the Consumer Reports National Research Center details many of the failings of the NOP. The letter criticizes the National Organic Standards Board (NOSB) for approval of synthetic and non-organic nutrient additives and synthetic pesticide material, even in baby formulas. The letter states, “We support the proposal to remove nonylphenol ethoxylates (alkylphenol ethoxylates) or NPEs/APEs from the list of “inerts” allowed in organic production because of their toxic and endocrine-disrupting effects.”

The Consumer Reports letter demonstrates the discrepancy between what the NOP entails and what the public believes the program offers. The NOP outlines the rules and processes to create uniformity for organic labeling. Although there are restrictions and prohibitions of a variety of chemical applications, the program allows for many waivers and exemptions. Nowhere in the program does it suggest certification assures a safer or more nutritious food choice. In fact, Dr. Stuart Smyth, a food safety expert and agriculture biotechnology researcher calls the National Organic Standards, “an illusion of food safety.” As Smyth explains, “These organic standards pertain to seed, fertilizer, and chemicals that are allowed to be used to produce a crop that will be certifiably organic when it is ready to be harvested. These production standards have absolutely nothing to do with increasing food safety.”

Still, the organic industry, as a marketing ploy, perpetuates the myth to consumers that organic certification implies safer foods. Moreover, with the ever-growing market share, one would assume conscientious shoppers increasingly prefer organic foods. Do they or is that another false assumption? What has changed in the past 15 years to drive the annual market value of organic food products from $1 billion to $35 billion if not consumer preference? How about the huge increase in consumer prices for the organic products, the increased volume of the labeled products, and the massive increase in program funding? To explain, let’s consider just some of the taxpayer dollars pumped into the NOP by means of the most recent farm bill, the 2014 Farm Act.

  • $20,000,000 for each fiscal year 2014 through 2018 for program operation
  • $5,000,000 to the Secretary of Agriculture for data collection and distribution to National Agriculture Statistics Service (NASS) and Agricultural Marketing Service (AMS).
  • $15,000,000 for each fiscal year 2014 through 2018 for modernization and technology upgrade
  • $5,000,000 upgrade collaboration with Commodity Credit Corporation (CCC).
  • $11,500,000 for each fiscal year 2014 through 2018 for cost-share programs with CCC.
  • $7,000,000 for each of the fiscal years 2014 through 2018 for natural products research.

In the above designated funding commitments alone, the federal government will spend $277.5 million through the term of the current agriculture authorization bill. An astonishing amount, considering the original 1990 Organic Foods Production Act stipulated the program costs will be covered entirely by fees gleaned from the program’s participants.

The growth of the organic market follows the growth in federal dollars pumped into the program. Food safety is not improved. Consumers have no assurance they are purchasing a more nutritious product. Third party certifiers charge upwards of $3,000 to farmers for label use creating an incentive for fraud. Foreign products are certified outside of the U.S. by foreign agents with no USDA oversite. Contemporary farmers are at a competitive disadvantage as a result of the marketing, promotion, and price difference of organically labeled product. Organic foods can potentially be less safe than their uncertified counterpart. And, in the end, the taxpayers are again burdened with an unproductive, fraud-laden, market manipulating program that offers no demonstrative benefit.

Nov 11, 2015 | 2 comments | by

USDA and States to Spend $210 Million on Fuel Pumps

On May 29th, the United States Department of Agriculture (USDA) announced $100 million in grants offered through their Biofuel Infrastructure Partnership (BIP) program. According to Secretary of Agriculture Tom Vilsack, the move is to make renewable fuel options more available to American consumers. The program is a 1:1 partnership with states to build fueling stations and purchase blender pumps for E15 and higher. The preliminary spending tally estimates $210 million for 5,000 pumps at 1,400 fueling stations in 21 states.

This latest money toss is yet another multi-million dollar outlay resulting from the Renewable Fuel Standard (RFS), as mandated by the 2007 Energy Independence and Security Act (EISA). The mandate requires gasoline to be blended with renewable fuel sources at incremental increasing levels.

The original RFS mandated level was 10% ethanol or E-10. The next mandated level, 15% ethanol or E-15, is a blend level the EPA labels to be used only in Flex-fuel passenger vehicles, model years 2001 and newer. The label goes on to state, “Do not use in other vehicles, boats, or gasoline-powered equipment. It may cause damage and is prohibited by Federal law”. Still, the EPA wants to make even higher blend levels available, even if that means taxpayers are to fund the necessary infrastructure.

Unlike the traditional pumps where a consumer makes the fuel choice of diesel, unleaded, or octane levels, the government has decided to fund blender pumps offering a choice between ethanol or even more ethanol. Even though the overwhelming preference of consumers, environmentalist, economists, most ag sectors and automakers is E-0, an option not found on the new pumps.

Though extensive studies with science-based evidence prove the damage ethanol contributes to the environment and engines, along with the real damage to a market-based economy, federal agencies continue to dig deeper into the ethanol quagmire. Even the Government Accountability Office (GAO) found the RFS costs outweighed its benefits and criticized the EPA’s economic analysis of the RFS as intentionally misleading. In a 2014 report to Congress, the GAO exposed the agency’s false reporting of the program’s costs stating, “EPA estimated net benefits of the mandated volumes ranging from $13 to $26 billion.” However, the EPA did not include the infrastructure costs (such as this latest $100 million) in their calculations. An expense the EPA estimates to total an astounding $90.5 billion.

 

Nov 04, 2015 | 4 comments | by

Clean Power Plan Opposition Grows

A coalition of 24 states and a power company are suing to stop the Obama administration’s Clean Power Plan (CPP), calling it an unlawful federal bid to control state power grids.

As part of the lawsuit, the states seek to place a hold on the Clean Power Plan’s deadlines for meeting its carbon emission goals, which supporters have described as necessary to improve air quality but foes have criticized as arbitrary and unrealistically strict.

In addition to the lawsuit by the states, pro-business groups have also joined the fight against the Clean power Plan that mandates a massive reduction in carbon emissions in the next 15 years, arguing that it will jack up energy costs and slash jobs without making a dent in greenhouse gases.

U.S. Chamber of Commerce and 14 other business groups filed a lawsuit against the Environmental Protection Agency. Their lawsuit:

  • Claims the EPA has overstepped its authority by attempting a takeover of state power plants.
  • Seeks a hold on the rule’s implementation pending the legal challenge.
  • Parallels the lawsuit filed same day by 24 states.

The Rule requires a fundamental restructuring of the power sector, compelling States, utilities and suppliers to adopt EPA’s preferred sources of power and fuel and to redesign their electricity infrastructure in the process.

A preliminary analysis of the Clean Power Plan issued in October, 2014 by the NERA economic consulting calculated that the CPP could boost retail electricity prices 12 percent to 17 percent.

The Clean Power Plan would effectively shut down coal-fired power plants, which provide inexpensive and reliable electricity but cannot reduce their emissions to the required levels using current technology.

Thousands of businesses will stop providing support services to coal-fired plants and coal mines. Many coal mines will have to reduce operations or close entirely, laying off numerous employees in the process.

Oct 28, 2015 | 1 comment | by

OIG announces probe of EPA’s Reporting Practices on Biofuels Impact

The Office of Inspector General (OIG) has announced a probe into the Environmental Protection Agency’s (EPA) adherence to reporting requirements regarding biofuel’s impact on air quality. Under the Renewable Fuel Standards (RFS), the EPA is to submit to Congress a science-based triennial report on the effect of the controversial program.

As a result of the Energy Independence and Security Act of 2007 (EISA), changes were made to the Renewable Fuel Standard program (RFS), the program that mandates the blending of ethanol with petroleum-based fuels for domestic use. The law directs the Environmental Protection Agency (EPA) to analyze lifecycle greenhouse gas (GHG) emissions from the increased use of renewable fuels in comparison with petroleum-based fuels.

The Clean Air Act (CAA), defines the term “lifecycle greenhouse gas emissions” as the GHG impact from all emissions including land use changes and other activities. The law requires EPA’s report to include,

“…all stages of production of fuel and feedstock and distribution, from feedstock generation or extraction through the distribution and delivery and use of the finished fuel to the ultimate consumer, where the mass values for all greenhouse gases are adjusted to account for their relative global warming potential.”

According to the OIG’s announcement, the goal of the review is to determine the following;

  1. Whether the EPA has complied with the law on reporting requirements of the Clean Air Act.
  2. If the EPA followed a mandate to amend its previous biofuel’s environmental impact reports to reflect the findings of a 2011 study by the National Academy of Sciences.
  3. If the EPA used the National Academy of Sciences data in subsequent reports.

In preparation for the review the OIG has asked EPA to provide:

  • Triennial Reports to Congress issued after the EPA’s first report in 2011, and any other reports to Congress on the environmental and resource conservation impacts of the RFS program.
  • RFS Antibacksliding Analysis required under Section 211(v) of the Clean Air Act.
  • Documentation of the EPA’s response to the 2011 National Academy of Sciences study and its recommendations.
  • Documented changes or planned future modifications to the RFS regulatory impact analysis or lifecycle analysis based on findings/recommendations from the 2011 National Academy of Sciences study, Triennial Reports to Congress and/or Antibacksliding Analysis (or documentation explaining why no changes were necessary).

The OIG’s investigation comes at a time when the call to cut corn-based ethanol is growing louder. Interestingly, the announcement came one day after the University of Tennessee released results of a comprehensive 10-year review which calls for a restructuring of the RFS program. The Tennessee study concludes, “We have had 10 years under the RFS and a commercially viable, next-generation biofuels technology has not emerged.”

Oct 26, 2015 | Leave a Comment | by

Congressional Request leads to Scathing Review of the EPA

Businesses, landowners and farmers know the feeling of dread that comes with hearing the words “not in compliance” from the U.S. Environmental Protection Agency (EPA). The EPA has earned the reputation of delivering heavy-handed enforcement actions and exorbitant punitive penalties. The agency’s authoritarian over-reach is near legendary, earning them the moniker “rogue agency”. Even the U.S. Supreme Court gave the EPA a dressing-down stating they commonly strong-arm regulated parties into “voluntary compliance” without the opportunity for judicial review. The EPA has taken a firm stance that the rules are published, and therefore, noncompliance is not excusable.

Yet, a congressionally requested federal review of the EPA found the agency regularly ignores rules that pertain to its own operating procedures as dictated by law. In fact, a Government Accountability Office (GAO) report says the EPA disregards the law in its reporting to congressional inquiries. According to the GAO, the EPA’s Science Advisory Board (SAB) is not in compliance with the long-standing Environmental Research, Development and Demonstration Authorization Act of 1978 (ERDDAA). As well, the agency’s Clean Air Scientific Advisory Committee (CASAC) fails to follow legal requirements of the Clean Air Act.

The GAO investigation revealed agency staffers routinely judge whether a congressional request is a policy driven question or requires a science-based response. As a result, answers to lawmaker’s queries often have no scientific basis in fact. Also, the agency failed to perform regular five-year impact reviews of national ambient air quality standards (NAAQS). Under the Clean Air Act, CASAC is to review and report “any adverse public health, welfare, social, economic, or energy effects” resulting from regulations and strategies of NAAQS. According to the GAO, the EPA “has never” instructed CASAC to comply with the federal requirement to review and report.

Members of Congress and the GAO have voiced similar concerns regarding EPA conduct and manner of operational performance.

  • Regularly ignores epidemiological evidence that dispels, counters, or invalidates their decisions.
  • Ignores their own scientific panels to format or propel false alarms.
  • Uses federal law, such as the Clean Water Act, to regulate private lands through regulatory “takings” of rights.
  • Consistently exceeds its legislative authority forcing businesses, municipalities, and citizens to challenge regulations through the court system.
  • Abuses authority in “policing” of private property activity through notoriously heavy fines.
  • Habitually practices “moving the goal” tactics to hamper businesses and industries efforts to remain operationally compliant.

The agency’s standard operating procedures often are in defiance of the law. Also, the arbitrary use of selected and contrived science to establish environmental regulation is a serious threat to our national wellbeing and jeopardizes public health, general welfare, socio-economic conditions and our environment.

Oct 21, 2015 | 1 comment | by

California’s Renewable Portfolio Standard

California’s 2002 Renewables Portfolio Standard (RPS), Senate Bill No. 1078 mandated that electric providers procure renewable power from eligible sources at 17% of customer sales by 2017. The bill also required the Public Utility Commission (PUC), being the regulatory agency for electricity providers, establish a certification and monitoring program through the state Energy Commission. Subsequently, Senate Bill No. 107, along with executive orders, accelerated the program to require a 20% renewable procurement by the end of 2010 and 33% by the end of 2020. Recently, Governor Jerry Brown announced his proposal to further increase the portfolio standard to 50% by 2030. According to the RPS Program Overview page, California’s goal is to be, “One of the most ambitious renewable energy standards in the country”. It appears the state may have succeeded in that effort.

Currently, federal funds nurse CA’s renewables mandate in the form of subsidies like the Production Tax Credits (PTC) and American Recovery and Reinvestment Act (ARRA). However, revenue from these federal programs are not expected to continue, and pressure is mounting for the renewable fuel industry to stand on its own. In fact, several states are reconsidering their programs’ viability.

So, how will proponents peddle the program to consumers when the federal subsidies end? The full cost associated with RPS programs are difficult to evaluate. A 2015 study by the National Renewable Energy Laboratory (NREL), and prepared for the U.S. Department of Energy (DOE), estimates an expected 10% increase in electrical energy costs to consumers as a result of the state’s RPS. This, to a state with consistently the highest electricity cost in the nation. Still, the consumer impact aspect of continuing, even expanding the mandate, does not appear to be the primary consideration. The report suggests the methodologies used to discover the true costs are demonstrably inappropriate. As well, outlays for integration, transmission, and administrative expenditures are not included in the cost analysis.

NREL suggests to policymakers that going forward, they should look beyond “simply a narrow consideration” of the costs of the program to ratepayers. Instead, the report promotes the development of a means to recognize program value based on “broader societal impacts”.

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Aug 31, 2015 | Leave a Comment | by

The Golden-cheeked Warbler and Piecemeal Environmental Policy

A tiny, migratory songbird is causing a big ruckus in Texas. At issue is the Golden-cheeked warbler’s status according to the U.S. Fish and Wildlife Service (FWS). The bird caused a related stir in 1990 when it was the subject of a petition by members of the anarchist environmental group, Earth First! The petition moved the FWS to exercise its emergency authority to declare a species endangered under the 1973 Endangered Species Act (ESA). In December 1990, the agency issued its final rule designating the bird to be an endangered species.

However, a recent comprehensive study has motivated several groups to call for the removal of the golden-cheeked warbler from the list. The findings, as presented by Texas A&M, has been peer reviewed, published in respected journals, and judged as scientifically sound. It appears the golden-cheeked warbler is not endangered. Even more concerning, the species may not have been in peril in 1990, the year FWS declared an emergency protected status.

What does this mean to the hundreds of private property owners who have suffered land restrictions, substantial fines, and criminal prosecution as a result of the warbler’s status? For example, one such case saw a Texas rancher penalized for clearing Ashe Juniper (Cedar) from his property. An activity FWS deemed damaging to the protected bird’s breeding habitat. In a negotiated settlement, the landowner transferred 48 acres to a public preserve and paid $220,260 in land management fees.

Even if one were to believe the earlier, mostly anecdotal based evidence that the golden-cheeked warbler was threatened, the latest research supports its removal from the list of endangered species. Still, some ask since recovery efforts have been so successful, why should the warbler be delisted to face uncertainty?

Simple answer first, the endangered species listing is for species that are, in fact, endangered. To maintain a status that is not evidenced based, delegitimizes the significance of the entire list. Second, although there is no geographical designation of warbler habitat, Ashe Juniper (Cedar) trees are recognized as essential to warbler nesting. So, while the bird is a protected species, landowners are subject to restrictions, in what amounts to a regulatory taking of property rights in regards to Ashe junipers.

Finally, the listing of the warbler has caused a clash of agencies, pitting federal against state in a battle of species management. As well, the limited focus on warbler breeding habitat protection has contributed to serious health issues, particularly for children.

To explain, while the FWS strictly enforces habitat (a tree) protection, the Texas Parks and Wildlife Department (TPW) calls the golden-cheeked warbler issue, “A single-species approach to wildlife management“. As a result of federal restrictions, the invasive characteristics of Ashe juniper has negatively impacted the natural ecosystem. According to TPW, in areas where the tree has been left to survive, it has depleted groundwater, increased soil erosion, and impacted the diversity of other plant species. The rise of Ashe juniper, being of little food value, has disrupted the natural habitat of other animal species. In fact, TPW has worked to limit, even eradicate the Ashe juniper while the FWS punishes citizens for clearing the tree from their land.

The increase in Ashe Juniper has also resulted in an upsurge of illness during its pollination cycle. Termed “cedar fever” the effects of Ashe juniper allergies can range from itchy eyes to pneumonia and even trigger asthma attacks. The Ashe juniper tree has one of the most allergenic pollens. In fact, The Asthma and Allergy Foundation of America (AAFA) has named seven Texas cities in its 2015 list of the most challenging places to live in regards to annual pollen scores.

So here we have the question, should the golden-cheeked warbler be removed from the list of endangered species? Yes. If not merely for the logic the bird is not threatened, then for the impact the designation has to other sensitive areas. More consideration should be made to the causal sequence of government agency decisions prior to making rules. Consideration should be given to economic impact to private citizens, potential health issues, and an analysis of the possible harm to other plant and wildlife species. When pondering the importance of diverse species to a healthy environment, too often the human element is not represented in the equation. A more holistic approach would better assure a healthy, balanced ecosystem.

Aug 24, 2015 | Leave a Comment | by

Lifting Crude Oil Export Ban Benefits U.S. Economy

The Government Accountability Office (GAO) suggests that removing crude oil export restrictions could both reduce consumer fuel prices and increase the price of U.S. crude oil from ~$2 to ~$8 per barrel.

Regulations implemented 40 years ago are being reviewed as technological advances in the extraction of crude oil from shale formations, commonly known as hydraulic fracturing or “fracking”, have contributed to increased U.S. oil production. In recent years U.S. crude oil prices have been lower than international prices but removing export restrictions could generate more revenue for oil companies and cause international crude oil prices to decrease.

If, as estimated, international crude oil prices do decrease, consumers could see anywhere from 1.5 to 13 cents per gallon drop for refined oil products such as gasoline and diesel. However, experts cautioned that estimates of the price implications of removing export restrictions are subject to uncertainties and there could be important regional differences.

Additionally, removing crude oil export restrictions could benefit in the following areas:

  • Economy: Removing export restrictions would lead to increased investment in crude oil production and increases in employment. This could result in additional positive effects for employment and government revenue.
  • Industry: Increased domestic production of crude oil will result from eliminating current export restrictions. Estimates range from an additional 130,000 to 3.3 million barrels on average per day until 2035.

After decades of generally calling U.S. crude oil production, from 2008 through 2014 production increased by about 74%. Perhaps, lifting the restrictions on crude oil could help both the economy of the U.S. and the average consumer.

Aug 12, 2015 | Leave a Comment | by

Wind Subsides Cost Taxpayers Big

Appears on Newsmax:

A draft package released by the Senate Finance Committee proposes to revive a 2.3 cent per kilowatt-hour production tax credit (PTC) incentive for wind energy, which lapsed last December. Congress had voted to terminate the PTC along with other tax breaks for wind projects at the end of 2013, only to have it retroactively extended through 2014 by the Obama cromnibus budget.

Previous “temporary helping hand” extensions have been granted seven times since PTC was first stablished in 1992 to “help the industry compete in the marketplace.” It was preceded by two other “temporary” federal subsidies dating back to 1978, which were advertised to accomplish the same elusive purpose.

Alas, despite lots of windy marketing claims there simply aren’t any free “renewable energy” lunches. According to the Energy Information Administration, 2013 PTC wind benefits alone topped $5.9 billion, while solar received $5.3 billion. The Senate Finance Committee now projects that a two-year PTC extension will heap on another $10.5 billion in lost federal tax revenues over the next 10 years.

Wind and solar combined provided less than 5 percent of total U.S. electricity in 2013. Yet according to the nonprofit Institute for Energy Research, federal subsidies and support on the basis of that per-unit electricity production, each of them received more than 50 times more subsidy support than coal and natural gas combined.

Added to this taxpayer pain are cost penalties borne by electricity consumers thanks to renewable energy mandates provided in 29 states and the District of Columbia that guarantee designated market shares regardless of extra production charges for wind and solar power. Escalating costs have prompted Ohio to freeze its mandates, and West Virginia to cancel them altogether.

Consider New York state, for example, which has been blowing billions of taxpayer green on wind, yet has some of the highest U.S. electricity rates. Despite this charity, a household there using 6,500 kwh of electricity annually will pay about $400 more than the national average. Statewide, this 53 percent extra cost over the national average amounts to approximately $3.2 billion each year. And after all, wasn’t the main idea to replace fossil-fueled plants with assuredly “cost-effective” renewables? A 2013 report by the New York Independent Systems Operator (NYISO) estimates that New York’s first 15 wind farms operating in 2010 produced about a 2.4 million megawatt-hour output.

That’s equivalent to a single 450 mwh gas-fired combined cycle generating unit operating only at 60 percent capacity which can be built at about one-fourth of the capital cost. Even worse, those wind turbines have a very short operating life, requiring a total infrastructure reinvestment about every 10-13 years, easily a $2 billion replacement for New York.

Add to this substantial infrastructure and transmission costs to deliver electricity from remote wind sites to the New York City area where greatest power demand exists. Such dislocations between locations of supply and high demand are typical throughout all regions of America, both for industrial scale wind and solar. The quality of that power isn’t any bargain either.

Unlike coal- and natural-gas-fired plants that provide reliable power when needed — including peak demand times — wind turbines only produce electricity intermittently as variable daily and seasonal weather conditions permit regardless of demand. That fickle output trend favors colder night-time periods rather than hot summer late afternoons when needed most.

The real kicker here is that wind has no real capacity value. Intermittent outputs require access to a “shadow capacity,” which enables utilities to balance power grids when wind conditions aren’t optimum . . . which is most of the time. What we don’t tend hear about is that those “spinning reserves” which equal total wind capacity are likely fueled by coal or natural gas which anti-fossil activists love to hate and wind was touted to replace. But then again, self-proclaimed environmentalists aren’t all keen on wind turbines either.

A Sierra Club official described them as giant “Cuisinarts in the sky” for bird and bat slaughters. In some cases “not in my backyard” resistance arises from an aesthetic perspective as evidenced, for example, by strong public opposition to the proposed 130-turbine offshore Cape Wind development stretching across 24 square miles of Nantucket Sound’s pristine Horseshoe Shoal. Other wind critics also have legitimate health concerns about land-based installations. Common symptoms include headaches, nausea, sleeplessness, and ringing in ears resulting from prolonged exposure to inaudibly low “infrasound” frequencies that penetrate walls.

So long as this industry’s survival depends upon preferential government handouts and regulatory mandates, two things are clear. Wind is not a free, or a competitive free market source of energy. It is also not a charity we can continue to afford blow money into. It’s time to finally pull the plug and permanently cut off the taxpayer and rate-payer juice.

Aug 03, 2015 | 4 comments | by

The Arctic — Our Last Energy Frontier

As the Arctic Ocean ice thaws, countries prepare to tap into the vast energy resources currently trapped beneath the Arctic Ocean. The U.S. Geological Survey (USGS) estimates that the Arctic could hold as much as 12 percent of the world’s undiscovered oil and 30 percent of its undiscovered gas, not including unconventional oil and gas deposits. Of that, the portion of the Arctic belonging to the United States could hold 33 percent of total oil and 18 percent of total natural gas in the Arctic.

The United States, though, is limited in its reach into the Arctic since it has not signed onto the United Nations Convention on the Law of the Seas (UNCLOS) treaty. Without that ratification, the United States, unlike the other four Arctic nations of Russia, Canada, Norway and Denmark, is constrained to an Exclusive Economic Zone (EEZ) of 200 nautical miles off their coasts. The other four Arctic nations, however, have asked to secure international legal titles to sites up to 350 miles off their coasts. Russia and Canada have even submitted claims that reach the North Pole.

Drilling in the Arctic could also be further complicated by harsh storms, drifting sea ice, poor infrastructure and a lack of available crisis response centers. On the other hand, Arctic drilling would take place at shallower depths than drilling in the Gulf of Mexico. In a positive push for Arctic drilling, President Obama signed Executive Order 13580 in 2011 to establish a coordinate efforts among federal agencies to develop energy in the Arctic. The order was intended to expedite future permit issuance and improve information sharing.

Shell Gulf of Mexico has made moves to be at the forefront of oil exploration in the U.S. Arctic region, specifically in the Chukchi Sea and the Beaufort Sea. The company also produced an extensive Oil Spill Response Plan to assure the government of their preparedness in case of an oil spill in the region. Fears regarding oil spill response in the Arctic continue as the Coast Guard admits to having no offshore response capability in Northern and Western Alaska. Due to harsh regional realities, Shell has currently only been granted legal permission for drilling between July and October.

While Arctic drilling may still seem like a dangerous opportunity, future technological innovations and improved Arctic preparedness and infrastructure will make such drilling a reality in the near future. The massive quantities of energy stored in the U.S. Arctic will stay there until we decide to take advantage of this opportunity.

Jul 15, 2015 | 3 comments | by
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