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“Government never furthered any enterprise but by the alacrity with which it got out of its way.”
— Henry David Thoreau.
Thoreau was prescient. If the U.S. government doesn’t get out of the way of the energy and manufacturing industries, or at least make less onerous the proposed rules and regulations that could strangle the industry, we will suffer a self-inflicted wound to American prosperity, a wound that will affect current and future generations.
Here’s what’s at stake.
America’s energy sector is booming and spearheading an economic rebound. Analysts at IHS Global Insight predict that during the next two decades, the energy industry is expected to make more than $5 trillion in new capital investments and create more than 3.5 million jobs.
Investors are excited as well. A recent headline on the financial website The Street read, “U.S. Energy Boom Will Lift Economy and Stocks.” This was the case last year, when the energy industry contributed $283 billion to the nation’s gross domestic product and boosted household incomes by $1,200 per capita, according to IHS.
The benefits of increased oil and natural gas production will flow downstream to chemical manufacturers, the construction industry and the myriad manufacturers that use petrochemicals in their products. Chemical manufacturers are already planning dramatic investments in the Gulf Coast region. More than $80 billion in petrochemical infrastructure and related projects have already been announced. Railroads are shipping more and more oil (partly due to lack of pipeline expansion).
No one thing will destroy our energy future, but combined, various proposed rules and regulations will increase costs to the point that natural resource development will have to slow.
What are the rules and regulations?
New Source Performance Standards. The EPA is seeking to regulate greenhouse gas emissions by electric utilities and refineries under NSPS provisions in the Clean Air Act. This is problematic, as the Clean Air Act was intended to reduce pollutants, not carbon emissions. Such a move could create significant electricity cost and reliability issues for domestic manufacturers. The EPA also plans to start regulating fuel, and possibly petrochemical manufacturers, after it has completed its utility rules. The EPA’s attempt to find any sliver of regulatory power available will certainly help derail America’s energy boom and manufacturing renaissance.
Revised ozone national ambient air quality standards. Current air quality standards, most recently revised by the EPA in 2008, are already quite strict and difficult to meet. But the EPA may further tighten standards by as much as 20 percent, creating an impossible regulatory framework for energy providers. This unreasonable burden, potentially so strict that virtually the entire United States would be in violation, could lead to the loss of millions of jobs and cost the American economy trillions of dollars while slamming the brakes on the country’s energy renaissance.