The shale-gas revolution in the United States has led to massive increases in natural gas production, increasing our domestic supply and reducing prices. While global trade in natural gas exists, the infrastructure and volume is low enough such that there isn’t much of a single global price for natural gas (unlike oil, where there are a few prices which tend to stick close to one another). You can look at spot prices for various countries here, note the large disparity.

The shale gas revolution in the U.S. has been so enormous that infrastructure that was built with the expectation of importing natural gas is now being switched to export natural gas to other countries. Congressman Ed Markey (D-Mass.) is apparently concerned that producers of natural gas in the U.S. would like to export some of the excess to take advantage of higher prices in other parts of the world. Yet as Markey so often likes to point out, America has in recent decades consumed more oil than we produced. If other countries had decided 40 years ago to shut off their oil exports to keep domestic prices as low as possible, America would be a much different place today (and much worse off).

Believe it or not, low energy prices are good for countries other than just the United States. Trade helps make this possible, so its odd that Markey would want to restrict natural gas exports:

I am worried that exporting America’s natural gas would raise energy costs for American consumers, reduce the global competitiveness of U.S. businesses, make us more dependent on foreign sources of energy, and slow our transition away from fossil fuels.

The rest of the letter can be read here. This simplistic — and incorrect — protectionist argument could be rattled off for hundreds of domestic industries. If the world listened, everyone would be much worse off. Markey argues that exporting natural gas might raise energy costs for America and reduce our competitiveness (presumably in manufacturing and related industries heavily reliant on the price of energy). This might be true, but as Markey notes later, the end result might not change significantly as domestic production can also increase (if Markey doesn’t shut down hydraulic fracturing).

Finally, Markey notes that natural gas is a “bridge fuel” on the way to a world which Markey envisions as running on only intermittent energy sources such as solar and wind power. He sees the low price of natural gas as responsible for the closure of numerous coal plants, which to some extent is true. However, even if you accept Markey’s premise that this is a good thing, exporting natural gas from the United States might very well displace coal powered generation in other countries. This wouldn’t make Markey and his band of guilt-ridden environmentalists feel good about the U.S. “doing its part,” but it would still wouldn’t increase carbon dioxide emissions on net while allowing for more efficient trade in global energy markets.

Oh, and exporting natural gas would help with our trade deficit, which Markey also yammers on about when talking to different interest groups.

The House today votes on H.R. 910, the Energy Tax Prevention Act, as amended. The bill would stop EPA from ’legislating’ climate policy under the guise of implementing the Clean Air Act (CAA), a statute enacted in 1970, years before global warming became a public policy issue.

Debate will last for one hour. The Rules Committee is allowing Democrats to offer twelve hostile amendments. Three Republican amendments to strengthen the bill (by, for example, prohibiting federal agencies from regulating greenhouse gases via the Endangered Species Act) were ruled out of order. As my colleague Myron Ebell notes, Democrats allowed Republicans to offer only one amendment on the Waxman-Markey cap-and-trade bill. The November 2010 elections notwithstanding, the House GOP still suffers from an acute case of  minority-itis.

The most mischievous of the Democratic amendments are:

• Jackson Lee (TX) – #36 “Would require an EPA study to determine the long term impact of a complete ban on their authority to regulate greenhouse gases.”
• Waxman (CA), DeGette (CO), Inslee (WA) - #5 “Would add a new section with respect to Congressional Acceptance of Scientific Findings: Congress accepts the scientific finding of the Environmental Protection Agency that climate change is occurring, is caused largely by human activities, and poses significant risks to public health and welfare.”
• Quigley (IL) – #6 “Would require GAO to report to Congress the results of a study of the health care costs in the U.S. as affected by the elimination of EPA regulation under this Act, as compared to health care costs in the U.S. as would be affected by the EPA proceeding under their regulatory authority as determined by Massachusetts v. EPA.”
• Markey (MA) – #12 “Would ensure that any prohibition on or limitation to EPA’s authority contained in the bill would not apply to any action EPA could take to reduce demand for oil.”
• Rush (IL) – #39 “Would prevent the provisions of this bill from going into effect until the EPA administrator, in consultation with the Secretary of Defense, certifies that the consequences of not regulating greenhouse gas emissions, and its subsequent impact on climate change, including the potential to create sustained natural and humanitarian disasters and the ability to likely foster political instability where societal demands exceed the capacity of governments to cope, do not jeopardize American security interests at home or abroad.”
• Kind (WI), Owens (NY) – #9 “Would codify the Environmental Protection Agency’s Tailoring Rule in order to protect farms, small businesses, and small- and medium-sized stationary sources from greenhouse gas regulation.”

These amendments have zero chance of passing, but that is not their purpose. The objective is to confuse the public by changing the subject and diverting attention from the real issue. Opponents know they cannot defend the indefensible thesis that EPA, an administrative agency, should dictate national policy on climate change. They know they cannot make a plausible case that Congress, in 1970, authorized EPA to implement a national de-carbonization program. So they offer hostile amendments in the hope of tricking Republicans into affirming controversial opinions that H.R. 910 neither presupposes nor implies. Above all, they want to create the false impression that a vote for H.R. 910 is a vote against science, public health, energy security, and national defense.

H.R. 910 supporters will surely defeat these amendments, but it is possible to win the vote and still lose in the court of public opinion. Today’s vote could be a Pyrrhic victory if H.R. 910 supporters cede the moral high ground to EPA’s apologists.

Here’s why the hostile amendments deserve to go down in flames.

Jackson Lee #36: There is no need to require EPA to study the impacts of a ban on its power to regulate greenhouse gases, because EPA’s opinions on this subject are well known, and the agency needs no encouragement from Congress to preach the alleged dangers of anthropogenic climate change. The proposed study would simply repackage EPA’s Endangerment Rule. The amendment is designed to trick Republicans into debating climate science so that Jackson Lee and her comrades can falsely but plausibly claim that a vote for H.R. 910 is a vote against climate science.

Warning to H.R. 910 supporters: Don’t take this bait! Politely remind Rep. Jackson Lee that H.R. 910 takes no position whatsoever on the scientific content of EPA’s Endangerment Rule. What supporters object to is EPA using its self-interested interpretation of science to transform itself into a Super Legislature. Repeat over and over again: ”H.R. 910 does not overturn EPA’s scientific finding, it overturns the legal force and effect of the rulemaking in which EPA published its finding.” 

Much the same response applies to the Waxman, DeGette, Inslee (#5), Quigley (#6), and Rush (#39) amendments. Climate change may or may not pose significant risks to public health and welfare, increase U.S. health care costs, or endanger U.S. national security. That is irrelevant to the issue the House is debating today, namely, the constitutional impropriety of EPA regulating greenhouse gases without a plausible legislative mandate.

All the concerns raised by these amendments were raised last year — and have been raised for more than a decade — by supporters of cap-and-trade legislation. Cap-and-trade narrowly passed in the House in 2009 but died in the Senate in 2010 when the public figured out that cap-and-trade is a stealth energy tax. As presidential candidate Barack Obama acknowledged, cap-and-trade would “bankrupt” coal power plants and cause electric rates to “necessarily skyrocket.” Clearly, EPA’s greenhouse gas regulations are, in President Obama’s words, another way of “skinning the cat.” Obama administration officials said repeatedly last year that an EPA-run system would be less efficient than the Waxman-Markey bill Congress declined to pass. Congress could not possibly have authorized EPA to implement this less efficient de-carbonization program in 1970, before global warming was even a gleam in Al Gore’s eye. Congress has a constitutional duty to stop EPA’s end-run around the legislative process. That is the purpose of H.R. 910.

If Reps. Waxman, DeGette, Inslee, Quigley, and Rush really believe that EPA knows best, then they should introduce legislation authorizing EPA to implement its greenhouse regulations, try to persuade GOP chairmen to hold hearings on their legislation, and try to assemble a legislative majority in favor of their bill. They know such legislation has no chance of passing. That is why they want EPA to legislate instead of Congress. They seem to have forgotten that our constitutional system of separated powers and democratic accountability is more valuable than any policy result EPA might achieve by undermining it.

The Kind and Lee amendment (#9) would not merely codify EPA’s Tailoring Rule, it would also codify the entire ever-growing ensemble of EPA greenhouse gas regulations of which the Tailoring Rule is a part. It would put Congress’s legislative seal of approval on EPA’s seizure of legislative power. Passing this amendment would obviously defeat the constitutional purpose of H.R. 910.

Markey’s oil demand reduction amendment (#12) is perhaps the cleverest. After all, most Republicans are as alarmist about U.S. dependence on foreign oil as are most Democrats.

Here’s why Markey’s amendment deserves defeat. Congress gave the National Highway Traffic Safety Administration (NHTSA), not EPA, authority to set fuel economy standards for new motor vehicles. Moreover, Congress gave NHTSA that authority under the 1975 Energy Policy and Conservation Act (EPCA) and 2007 Energy Independence and Security Act (EISA). The Clean Air Act provides no authority to any agency to set fuel economy standards.

Yet EPA is effectively setting fuel economy standards by establishing greenhouse gas emission standards for new cars and trucks.  As EPA acknowledges, 94-95% of motor vehicle greenhouse gas emissions are carbon dioxide from motor fuel combustion. And as both EPA and NHTSA acknowledge, “there is a single pool of technologies for addressing these twin problems [climate change, oil dependence], i.e. those that reduce fuel consumption and thereby reduce CO2 emissions as well” (p. 25327).

In short, by setting greenhouse gas emission standards, EPA has hijacked fuel economy regulation. EPCA authorizes EPA to monitor automakers’ compliance with federal fuel economy standards, but it gives EPA no power to set those standards.

The Markey amendment would reward EPA’s power grab by dramatically expanding the agency’s power! The amendment would authorize EPA to reduce oil consumption throughout the economy — not just cars and trucks but also aircraft, marine vessels, non-road vehicles and engines, and industrial boilers. This exceeds any authority granted to any agency under any existing federal statute.

It is amazing that Markey would propose to make such a sweeping change in national policy in a one-sentence amendment based on 10 minutes of debate. Congress typically spends many years debating changes in fuel economy policy before enacting them because so many competing interests come into play even when the changes affect just one subset of one sector of the economy — passenger vehicles and light duty trucks. Yes, fuel economy standards may reduce oil consumption somewhat. However, fuel economy standards also increase the cost of motor vehicles and restrict consumer choice. More importantly, by encouraging automakers to produce lighter, smaller vehicles that provide less protection in collisions, fuel economy standards increase traffic fatalities and serious injuries.

What unintended consequences would ensue from applying fuel economy standards to planes, boats, boilers, etc.? Nobody knows. Congress has never held a hearing to find out. If Markey really wants EPA to control oil consumption throughout the economy, then he should draft a bill, try to find co-sponsors, try to persuade the majority to hold hearings, and try to persuade colleagues and the public to support it. Instead, he attempts through a one-sentence provision not only to legalize EPA’s hijacking of fuel economy regulation but expand it across the board to all oil-using machines! This sets a new standard for chutzpah.

Elections: Running from Cap-and-Trade

Campaigns often become annoying as election day approaches, but they do have the benefit of sucking all the energy out of Washington.  Congress has been out for a month to allow Members to campaign, and even the agencies tend to go silent just before an election for fear that announcing some new rule or policy could become a damaging campaign issue.

But when Washington springs alive again after next Tuesday, it will be a city transformed by the election results.  Even if the rout of House and Senate Democrats occurs precisely as predicted (minus 50 House seats and 7 Senate seats is the average guess; here is a typical forecast), it will all look and feel different after it has happened than in anticipating it.

While the reactions to big election swings are often surprising, one thing that is absolutely clear already is that cap-and-trade has been a significant issue in the campaign and that cap-and-trade will be totally dead after November 2nd.  Every Republican incumbent and challenger is running against cap-and-trade.  Most are running against global warming alarmism.  House Democrats who voted against the Waxman-Markey bill are featuring that vote in their campaigns.  Only a handful of the more than 200 Democrats who voted to pass Waxman-Markey in 2009 are even mentioning it in their campaigns.

Cap-and-trade is especially potent as an issue in coal country.  In West Virginia, it has become so toxic that Governor Joe Manchin (D) revived his Senate campaign against John Raese by running a television ad in which he shoots a copy of one of the Senate cap-and-trade bills.   Rep. Nick Joe Rahall (D-WV)), the Chairman of the House Natural Resources Committee, voted against Waxman-Markey, but is now in the race of his life against a challenger, Elliott Maynard, who is scoring points with voters by arguing that Rahall’s opposition was weak and that he in effect supports cap-and-trade because he voted for Rep. Nancy Pelosi (D-Calif.) for Speaker.

Rep. Rick Boucher (D-Va.) is in even worse shape in his nearby district in Virginia.  Boucher put the interests of his party ahead of the interests of his coal-mining district when he made a deal and rounded up the votes necessary to pass Waxman-Markey on June 26, 2009.  In 2008, Boucher didn’t have a Republican opponent.  This year Morgan Griffith appears to be running a very close race. Boucher’s loss would send an unmistakable signal to congressional candidates in energy-producing and energy-using manufacturing districts for many elections to come.

The chance that the Senate will pass a comprehensive energy-rationing (a k a climate) bill this year remains close to zero.  BP’s big oil spill in the Gulf changes very little.

The global warming movement peaked last June 26 when the House passed the Waxman-Markey bill.  When members went home for the Fourth of July, many who voted for it discovered that their constituents were angry and mobilized.

Seeing the public reaction, Senator Majority Leader Harry Reid (D-Nev.) dropped plans to move a cap-and-trade bill before the August recess and turned to health care reform.  It’s been all downhill since then.

The Kerry-Boxer bill, which is very similar to Waxman-Markey, passed the Environment and Public Works Committee last fall, but it was clear that it couldn’t get 51 votes, let alone 60, on the floor.  That’s when Senator John Kerry (D-Mass.) began working on a “middle-of-the-road” package with Senators Lindsey Graham (R-SC) and Joseph Lieberman (I-Conn.).

Even if he does finally release a draft of the measure this week, it’s still not going anywhere.  Whether Graham is on board doesn’t matter because he doesn’t bring any other Republicans with him.

Kerry’s draft has restricted cap-and trade to electric utilities only.  And he’s stopped calling it cap-and-trade because the American people have figured out that it is an indirect tax on them.  Now it’s “pollution reduction and investment.”  Similarly, a gasoline tax has been renamed “linked fee.”  Call it whatever you want, it’s still a tax that consumers will have to pay.  Adding some offshore oil or nuclear incentives or clean coal research can’t hide the fact that prices will go up when energy is rationed.

What’s become increasingly apparent is that this legislation no longer has much to do with reducing greenhouse gas emissions.  It’s a monstrous collection of payoffs to big business special interests, ranging from Goldman Sachs to Duke Energy to General Electric.

(This piece originally appeared on the New York Times’s Room for Debate web site. )