This column by ACRU General Counsel Peter Ferrara was published on April 24, 2014 on Forbes.com.
On March 27, Senator Ted Cruz (R-TX) introduced the American Energy Renaissance Act, providing for comprehensive liberation of energy producers to maximize energy production, job creation and prosperity for America. A companion bill was introduced in the House by Rep. Jim Bridenstine (R-OK).
Despite the war-like hostility of the Obama Administration to the traditional carbon based energy that fueled the industrial revolution, the entrepreneurship and modern technology of America’s private economy is producing a boom in oil and gas production that is overwhelming President Obama. America has already surged to become the world’s number one natural gas producer. It is also now the world’s fastest growing oil producer, already third in the world. And America has the resources to be the world’s number one coal producer as well.
Not that President Obama did not try to stop this American success story, contrary to the grossly misleading rhetoric in his speeches taking credit for it. The Congressional Research Service recently reported that the portion of total natural gas production from federally controlled lands and offshore declined by 40% from Fiscal Year 2009 to Fiscal Year 2013. The portion of total oil production from such federally controlled areas declined by 32% over that period.
That was achieved by slowing permits for exploration and development of oil and gas in federally controlled areas, imposing moratoria on already granted permits (held to be contrary to federal law in federal court), and even withdrawing already granted permits. These policies have hurt federal revenues from oil and gas royalties, and taxes that would have been paid by oil and gas producers.
But the explosion of oil and gas production on private and state owned lands, so far outside of federal reach, has more than made up for the losses of possible production in federally controlled areas. That explosion of private oil and gas production has been due to the advances and development of the process of hydraulic fracking.
The practice of “fracking” has been in use in oil and gas production for almost 70 years. It involves high speed water injection underground, combined with less than 10% sand in volume, and 0.5% salts and other solvents, often commonly used by the general public. Though the practice more recently has excited the religious quality hysteria that might be expected from a demon sighting, no other negative effect of the practice has been documented in all these decades.
The more recent advances that have made the practice so much more effective have combined it with the 360 degree drilling techniques originally developed for deep water production of oil and gas, and modern computer technology that helps identify promising drilling targets. The resulting burgeoning supply of natural gas in the U.S. has produced sharp declines in natural gas prices in America, which has promoted a revival of American manufacturing, for which President Obama has also tried to take credit.
But the Obama Administration has repeatedly threatened private and state land oil and gas exploration and production with potentially crippling new federal regulation that could shut this blossoming boom down. State governments have regulated fracking effectively to protect the public all these years. The Cruz-Bridenstine bill would continue that state regulation, removing any federal authority to interfere and regulate fracking.
The bill would also immediately approve the Keystone Pipeline, freeing the private sector to build it entirely with its own funds. That would directly create 42,000 good paying, private sector jobs, according to Obama’s own State Department, and support many times that through the reliable, low cost energy it would provide to the American economy. The Obama Administration itself has already conducted five environmental reviews of the pipeline, all concluding it would have no significant, negative environmental effects.
President Obama repeatedly calls for more taxpayer funding of infrastructure to create jobs. But the private sector would be paying for the Keystone Pipeline infrastructure entirely with its own money, without taxpayer funds. So it should be a no brainer. Does the Democrat Party represent working people at all anymore?
The Cruz-Bridenstine bill would also remove any authority for EPA to regulate greenhouse gases to address supposed global warming concerns, until Congress acts to expressly authorize such regulation. Such proposed regulation under development by the EPA would be prohibitively expensive for the economy, causing skyrocketing energy costs for everybody, which would threaten the loss of millions of jobs. Such costly regulation should not be adopted by bureaucrats hiding from democratic accountability, unless expressly authorized by Congress to do so.
The Nongovernmental International Panel on Climate Change (NIPCC) documents in the thousands of pages of the multi-volume, peer-reviewed, Climate Change Reconsidered II, that the U.N.’s Intergovernmental Panel on Climate Change (IPCC), followed religiously by Obama’s EPA, leaves out consideration of hundreds of published, peer-reviewed, studies indicating that human emissions of greenhouse gases do not threaten catastrophic results. Indeed, those emissions have probably only benefitted plant and animal life on the planet so far, as increased carbon dioxide in the atmosphere promotes greater plant and agricultural growth, creating an actual greening of the Earth.
In fact, there has been no global warming for more than 17 years now, which even the IPCC concedes, and that period will soon be longer than the period of actual global warming (which may not have been global) lasting only 20 years or so, from the late 1970s to the late 1990s, as I have shown in a previous column. So there is no real world justification for the imposition of such regulatory costs.
The U.N.’s IPCC and Obama’s EPA only represent the government’s interests in expanded governmental tax and regulatory powers. Indeed, the U.N. is an organization of governments, many if not most not democratically elected. So it is not representative of the interests of working people in jobs and improved standards of living.
President Obama campaigning in 2008 famously said he would bankrupt the coal industry. He is already well down that road, with 288 coal fired power plants in 32 states already closed or closing as of June, 2013 due to newly adopted EPA regulatory costs and burdens. Those closures are already eliminating 50,000 good paying jobs in the coal, utility and rail industries alone, with indirect effects eliminating another quarter million jobs.
You see why I say President Obama is at war with America’s own energy industries, and that the Democrat Party no longer represents working people? Senator Cruz’s bill would terminate the EPA regulations already shutting down the coal industry, and destroying good paying jobs for working people.
Moreover, prospectively, the Cruz-Bridenstine bill would require that before any EPA regulations eliminating any jobs could take effect, the regulations would have to be expressly approved by Congress and signed by the President. EPA regulations currently under development are estimated to eliminate 2 to 3 million jobs in the next decade. Again, today’s Democrats are not representing working people.
Senator Cruz’s bill would also grant states the power to lease, approve permits for, and regulate oil and gas exploration and development on federal lands within their borders, and adjacent offshore areas. Federally controlled onshore and offshore areas hold 43% of America’s proven oil reserves, and 28% of natural gas reserves. Reversing Obama’s perverse policies and leasing and producing oil and gas in these federally controlled areas could create more than 1 million additional good-paying jobs. The states would then gain their share of those lease royalties and payments. States can best represent the interests of their own people in balancing jobs and environmental protections.
The bill would also authorize further exploration and development of oil and gas production in the National Petroleum Reserve, by Indian tribes on tribal lands, on the coastal plain of Alaska (ANWR), and offshore on the Outer Continental Shelf. The National Petroleum Reserve is estimated to hold close to a trillion barrels of oil, and 53 trillion cubic feet of natural gas. This reserve is set aside for oil and gas production, yet President Obama is not allowing further exploration and development even there.
West of the Mississippi river alone, Indian reservations hold 30 percent of the nation’s coal reserves, 50 percent of potential uranium reserves, and 20 percent of known oil and gas reserves. Cruz’s bill would empower the tribes to develop and gain the revenues from these energy riches.
While President Obama has held Press Conferences announcing expanded offshore drilling, in reality he has effectively prohibited exploration and development off the Atlantic and Pacific coasts. Welcome to the world of Orwellian Progressivism. Senator Cruz’s bill would streamline the regulatory process for offshore oil and gas exploration and development by requiring lease auctions of federally controlled offshore areas within 6 months of enactment of the legislation, and every 9 months after that, and drilling permit applications to be approved or disapproved within 20 days after they are submitted. The bill would similarly streamline regulatory approvals for new refineries, with not one new one built in the past 30 years.
Finally, the Cruz-Bridenstine bill would phase out the federal Renewable Fuel Standard (RFS) requirements over 5 years. The RFS, a federal folly adopted during the Bush years by a Democrat Congress, requires increasing percentages of so-called “renewable” biofuels to be blended into gasoline and diesel every year. The law now requires more such biofuels to be blended than are produced, which has left refiners forced to pay fines for failing to comply with impossible requirements. That has only arbitrarily increased gas prices, which harms the poor most of all, who often lack the money even to fuel essential drives to school, the grocery store, the pharmacy, or even mandatory court appearances. For these costs, the RFS provides essentially no actual benefits.
This comprehensive American energy liberation is a very Reagan-like policy that shows Presidential vision and leadership. It shows that Cruz understands how to create jobs and rising wages and incomes, while Obama has shown he does not. Those Progressives out there who think they can laugh off Cruz should learn that in the late 1970s, Reagan was not socially acceptable among the elite Washington establishment. Within a few years, he had won two landslide national elections, including one over an incumbent Democrat President.