Energy & Entrepreneurs

The Anti-Energy Crusade

by Raymond J. Keating

When the U.S. business community recently responded to the request from U.S. Rep. Darrell Issa, chairman of the House Oversight and Government Reform Committee, to identify which regulations harm the economy and job creation, the federal agency at the top of the list was the Environmental Protection Agency (EPA).

As noted by Bloomberg News, for example, of the 111 regulations cited, 57 came from the EPA. For example, the report noted: "More than 50 of those responding, mostly trade groups and companies like Toyota Motor North America and ConocoPhillips, cited concerns about rules to limit greenhouse-gas emissions. EPA rules limiting carbon emissions from power plants and oil refineries took effect Jan. 2 after Congress failed to agree on a plan to cap greenhouse gases blamed for climate change."

Indeed, the EPA is at the leading edge of anti-energy crusade being led by assorted activists, and joined by a wide array of elected officials, including, unfortunately, President Barack Obama.

After all, the President has been a strong advocate for legislation that would impose CO2 emissions limits on the economy. While the recent change in the make-up of Congress means that such legislation has been pushed to the backburner, the President has done nothing to rein in his own EPA's power grab to impose emissions regulations without real authority from Congress.

The clearest outcome from such an endeavor would be in terms of the economy. The cost of energy would push higher, U.S. competitiveness would suffer in global markets, capital and jobs would move elsewhere, and economic growth would be restrained.

An analysis of the economic fallout under the Heritage Foundation-Global Insight model estimated that real GDP losses (in 2008 dollars) would tally up to $7 trillion by 2029, single-year GDP losses top $600 billion, and annual jobs losses would exceed 800,000 for several years.

But it's not just misguided policies at the federal level that exhibit a complete disregard for the economy and jobs by those leading the charge against fossil fuels. There also are instances in which local opposition to energy production and delivery can have international implications.

The Wall Street Journal ran a story ("Coal Foes Play China Card") on February 4 about local anti-energy activists who are leading opposition to a coal export terminal in the state of Washington. The terminal would allow for more efficient and affordable means for exporting coal from Wyoming and Montana to China.

According to the report, Millennium Bulk Terminals purchased the site and plans to invest $100 million on the terminal, with construction and permanent jobs being created. While the local county has approved the project, others in government stand opposed: "Following Cowlitz County's approval for the terminal, the next step is the state's Shoreline Hearings Board, where a rejection is being sought by a coalition of environmental groups, including Climate Solutions, Earthjustice, the Sierra Club and the Washington Environmental Council. In late December the Washington state attorney general intervened on the side of the environmentalists, joining the state's Department of Ecology in challenging the county's development plans. The Shoreline Hearings Board will take up the matter April 11."

According to a MountainLive.com report, the plaintiffs actually are arguing that the county should have considered the environmental implications of burning coal in Asia. As reported: "It argues that county officials should have better evaluated the environmental consequences of coal export, including the impact of burning coal in Asia, potentially increasing coal mining, and transporting coal by train to Longview and by ship to Asia."

Others are looking to invest as well, with "Peabody Energy Corp., the biggest U.S. coal producer, ... trying to secure a West Coast facility to ship 20-25 million tons of coal to Asia."

So, here is an opportunity to invest, grow the U.S. economy, expand exports to China and other parts of Asia, and create jobs. Yet, assorted activists and their friends in government are looking to stop the process, and see no bounds as to their reach or the reach of the policies they advocate.

Of course, not all in government have joined this misguided crusade. In Congress, Chairman Issa is looking to inject some economic sanity into the issue. In addition, Montana Gov. Brian Schweitzer, a Democrat, declared his disagreement with environment groups opposing coal exports, and noted, as the Journal report, that Montana sends coal to Washington for electricity generation in that state.

In early January, Schweitzer met with Washington Governor Chris Gregoire about the coal terminal. The Associated Press reported: "Schweitzer supports the project as a way to boost his state's coal-mining industry. Both Montana and Washington should be behind the project, which would improve the economy and create jobs in both states, he said... Gregoire's position is that she doesn't want to stand in the way of progress, but wants to make sure the proper environmental and regulatory processes are followed, said spokesman J. Cory Curtis."

The anti-energy crusade pushes for an end to domestic energy exploration and development, a reduction in domestic carbon emissions, and stopping U.S. exports of coal. The movement knows no bounds because this truly is a crusade. Unfortunately, if they succeed, it will be U.S. consumers, entrepreneurs, businesses, competitiveness, investment, jobs, and economy that will suffer dearly.

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Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.