August 2013

Platts Energy Week with Bill Loveless is a weekly treat. In most markets, it comes on early Sunday mornings, but if you sleep through its first broadcast, you can still access the show through its website.

This morning’s show featured a wonderful interview with Larry Nichols, executive chairman of Devon Energy, about the legacy of George Mitchell, the relentless entrepreneur who perfected the technology—known as hydraulic fracturing—that made possible the recovery of vast reserves of oil and natural gas from previously inaccessible (i.e., uneconomic to extract from) geologic formations. Thanks in large part to Mitchell’s work, there’s been a much-reported rebound in American energy production. Mitchell died on July 26^th.

Mr. Nichols is well qualified to comment on Mitchell’s lasting impact. Devon Energy was an innovator in horizontal drilling, which, when coupled with hydraulic fracturing, precipitated the oil and gas boom. Indeed, in the early aughts, Devon invested in Mitchell, and together they pioneered the new technologies.

Highlights of the interview include: Mr. Nichols putting the lie to the mistaken contention that the federal government’s role was instrumental in the development of the technologies that led to the oil and gas boom; and, his belief that it would have been impossible for George Mitchell to have perfected hydraulic fracturing in today’s overbearing regulatory environment.

I highly recommend watching the whole interview here:

The House of Representatives on Friday, 2nd August, passed H. R. 367, the REINS Act, which would require House and Senate votes to approve proposed major regulations, by a vote of 232 to 183.  Six Democrats and 225 Republicans voted Yes, while all the No votes came from Democrats.  Eighteen Members did not vote.  The REINS Act isn’t going anywhere in the Senate.

Earlier in the day, the House voted on an amendment offered by Representative Steve Scalise (R-La.) that would require congressional approval before the executive branch could implement a tax on carbon dioxide emissions using regulatory authority.  That amendment was adopted by a vote of 237 to 176. Again, 225 Republicans voted Yes.  They were joined by twelve Democrats.  All 176 No votes came from Democratic Members.  Eighteen Members did not vote.

Rep. Scalise is chairman of the conservative House Republican Study Committee, which has made a vote on a resolution opposing a carbon tax one of its top priorities.  The amendment is somewhat narrower than H. Con. Res. 24, but the vote does put Members on the record on a carbon tax.  The vote reveals that 176 Democratic Members of the House are not opposed to raising taxes.  That vote could play a role in some districts in the 2014 congressional elections.  A number of House Democrats lost their seats in 2010 because they had voted for the Waxman-Markey cap-and-trade bill.

The twelve Democrats who voted for the anti-carbon tax amendment are: Ron Barber and Kyrsten Sinema of Arizona, John Barrow and Sanford Bishop of Georgia, Henry Cuellar and Filemon Vela of Texas, William Enyart of Illinois, Jim Matheson of Utah, Mike McIntyre of North Carolina, Collin Peterson and Tim Walz of Minnesota, and Nick Joe Rahall of West Virginia.

Whether the executive branch has authority to implement a carbon tax under the regulatory authority of the Clean Air Act or any other statute is highly dubious.  However, several environmental pressure groups have been pushing the idea, and the Obama Administration has proved that it has little regard for the law.

On 1st August, the House also passed the Energy Consumers Relief Act by a vote of 232 to 181.  Again, no Republicans voted against the bill.  Nine Democrats voted for it.  H. R. 1582 tries to set some limits on the Environmental Protection Agency’s authority to promulgate expensive new regulations.  Again, the bill is not going anywhere in the Democratic-controlled Senate.

Today 19 free market organizations released a coalition letter in support of Rep. Steve Scalise’s (R-La.) amendment to H.R. 367, the Regulations From the Executive in Need of Scrutiny Act of 2013. Read the letter below.

[Update: The House passed the anti carbon tax amendment 238-176]

Letter to Congressman Scalise on HR 367 by Competitive Enterprise Institute

Under both the Clean Air Act and Clean Water Act, the EPA has the authority to “disapprove” a state’s strategy to meet national environmental standards. A regulatory disapproval is no small matter as state officials spend countless hours and taxpayer resources crafting plans to comply with a newly finalized EPA regulation. When the EPA issues a regulatory disapproval, the agency effectively throws all of this work out the window.

Since President Obama took office, the number of regulatory disapprovals has skyrocketed. Previously, the EPA issued 44 disapprovals during President Clinton’s second term, 42 during President George W. Bush’s first term and 12 during Bush’s second term. But during President Obama’s first term, the EPA issued an unprecedented 95 disapprovals — more than a 190 percent increase from the average number of disapprovals during the previous three four-year presidential terms.

Even more alarming is the precipitous increase in the number of EPA takeovers of state regulatory programs. “Federal implementation plans,” or FIPs, are the EPA’s most aggressive action, as a FIP entails the complete usurpation of a state’s regulatory authority. From 1997 through 2009, the EPA imposed only two FIPs. But since Obama’s first inauguration in 2009, the EPA has imposed 19 FIPs, representing a 2,750 percent increase in the number of FIPs from the average number of FIPs rate during the previous three four-year presidential terms.

Both the data and the chart comes from a report I recently wrote for the American Legislative Exchange Council, titled “The U.S. Environmental Protection Agency’s Assault on State Sovereignty.”