In The News
VIDEO: EPA Nominee Regina McCarthy Before EPW Committee
Thursday April 2, 2009
Hearing Sends Clear Message to EPA: Don’t Short-Circuit Process on Ethanol Blend Wall
Diverse Groups Urge Caution on Mid-level Ethanol Blends
Wednesday April 1, 2009
The Subcommittee on Clean Air and Nuclear Safety conducted an oversight hearing today where witnesses ranging from the American Lung Association to the National Resources Defense Council and the National Petrochemical & Refiners Association weighed-in with a similar theme: EPA should be cautious in implementing regulations.
Inhofe: Obama's policies detrimental to country (Inhofe Op-ed, Oklahoman, 04/01/09)
Wednesday April 1, 2009
Posted by Matt Dempsey matt_dempsey@epw.senate.gov
In Case You Missed It...
Congress must reject energy tax increases
POINT OF VIEW Obama's policies detrimental to country
BY U.S. SEN. JIM INHOFE
Published: April 1, 2009
As demonstrated by President Obama's budget, the administration has launched an onslaught of unprecedented policies to restrict access to natural resources and increase taxes on America's homegrown natural gas and oil industry.
The attack has drawn the ire of Democrats and Republicans from energy-producing states. One Senate Democrat recently said, "I'm going to ask the president how he thinks that increasing substantially taxes on the oil and gas industry helps us to achieve our goal of domestic energy independence of a more robust domestic drilling program. It's one of the areas where I take the strongest issue with the administration. ... But independent oil and gas producers, which are the backbone of the domestic industry, cannot bear the elimination of these tax credits."
I could not agree more.
Of the nearly 6 million Americans who are directly and indirectly employed as a result of natural gas and oil exploration, production and refining, all should be alarmed with the adverse consequences of President Obama's tax increases.
His $31 billion increase in oil and gas taxes would significantly curtail the operating budgets of all exploration and production companies, big and small.
Tens of thousands of land owners from Montana to New York and Alabama to New Mexico are the beneficiaries of monthly checks coming from the mineral royalties produced on their properties. Nearly every single one of these royalty owners would face tax increases under Obama's plan.
States annually receive billions of dollars in excise and severance taxes to support the critical funding of roads, schools and law enforcement. These revenues would significantly drop due to the forced cutbacks in exploration and production caused by these federal tax increases.
Furthermore, every marginal well operator in the country should be acutely aware that these proposals will force the premature plugging of potentially tens of thousands of low-production marginal wells.
Despite the rhetoric, America's oil companies are already paying taxes at the highest rates. Figures from the Energy Information Agency indicate that America's major oil producers already pay on average more than a 40 percent income tax rate.
After President Jimmy Carter imposed a similar windfall profits tax on the oil and gas industry back in 1980, the nonpartisan Congressional Research Service later determined that its results were hugely counterproductive: "The WPT reduced domestic oil production between 3 and 6 percent, and increased oil imports from between 8 and 16 percent. ... This made the U.S. more dependent upon imported oil."
For American jobs, for the international competitiveness of American companies and for the consumers at the pump, Congress must reject Obama's energy tax increases. These counterintuitive policies will undoubtedly make our nation more dependent on foreign oil, not less.
Inhofe, R-Tulsa, is ranking member of the Senate Environment and Public Works Committee.
Congress Must Reject Energy Tax Increases (Inhofe Op-Ed/ Oklahoman)
Obama's Policies Detrimental to Country
Wednesday April 1, 2009
In Case You Missed It...
Congress Must Reject Energy Tax Increases
Obama's Policies Detrimental to Country
By U.S. Senator James Inhofe
April 1, 2009
As demonstrated by President Obama's budget, the administration has launched an onslaught of unprecedented policies to restrict access to natural resources and increase taxes on America's homegrown natural gas and oil industry.
The attack has drawn the ire of Democrats and Republicans from energy-producing states. One Senate Democrat recently said, "I'm going to ask the president how he thinks that increasing substantially taxes on the oil and gas industry helps us to achieve our goal of domestic energy independence of a more robust domestic drilling program. It's one of the areas where I take the strongest issue with the administration. ... But independent oil and gas producers, which are the backbone of the domestic industry, cannot bear the elimination of these tax credits."
I could not agree more.
Of the nearly 6 million Americans who are directly and indirectly employed as a result of natural gas and oil exploration, production and refining, all should be alarmed with the adverse consequences of President Obama's tax increases.
His $31 billion increase in oil and gas taxes would significantly curtail the operating budgets of all exploration and production companies, big and small.
Tens of thousands of land owners from Montana to New York and Alabama to New Mexico are the beneficiaries of monthly checks coming from the mineral royalties produced on their properties. Nearly every single one of these royalty owners would face tax increases under Obama's plan.
States annually receive billions of dollars in excise and severance taxes to support the critical funding of roads, schools and law enforcement. These revenues would significantly drop due to the forced cutbacks in exploration and production caused by these federal tax increases.
Furthermore, every marginal well operator in the country should be acutely aware that these proposals will force the premature plugging of potentially tens of thousands of low-production marginal wells.
Despite the rhetoric, America's oil companies are already paying taxes at the highest rates. Figures from the Energy Information Agency indicate that America's major oil producers already pay on average more than a 40 percent income tax rate.
After President Jimmy Carter imposed a similar windfall profits tax on the oil and gas industry back in 1980, the nonpartisan Congressional Research Service later determined that its results were hugely counterproductive: "The WPT reduced domestic oil production between 3 and 6 percent, and increased oil imports from between 8 and 16 percent. ... This made the U.S. more dependent upon imported oil."
For American jobs, for the international competitiveness of American companies and for the consumers at the pump, Congress must reject Obama's energy tax increases. These counterintuitive policies will undoubtedly make our nation more dependent on foreign oil, not less.
These counterintuitive policies will undoubtedly make our nation more dependent on foreign oil, not less.
Related Links:
Oklahoman Editorial: All Americans will pay for oil and gas policies - The obama plan
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EPW Policy Beat: THE ACID RAIN MYTH
Tuesday March 31, 2009
Posted by:Matt Dempsey Matt_Dempsey@inhofe.senate.gov (202)224-9797
EPW Policy Beat: THE ACID RAIN MYTH
As the Senate debates the merits of using budget reconciliation to advance climate change legislation, EPW Policy Beat found an enlightening article discussing the frequently invoked, yet inapt, comparison between cap-and-trade for greenhouse gases and the 1990 cap-and-trade program to reduce acid rain. Authors Laurie Williams and Allen Zabel, career employees of the Environmental Protection Agency who support instituting a carbon fee to address climate change, examine what they call the “Acid Rain Myth.” As the authors explain, “those who champion using cap-and-trade to address climate change claim that it has been ‘proven’ to work in the U.S. Acid Rain program. However, this assertion ignores crucial distinctions between the challenges we faced in 1990 with Acid Rain and the challenges we face today with global warming.” The Williams and Zabel study on this apples-and-oranges comparison, and the flaws of applying cap and trade to address climate change, can be found here: Link
As the following highlights from the study make abundantly clear, the experience of the Acid Rain program simply cannot be compared to cap and trade for GHG:
- “Most importantly, the success of the Acid Rain program did not depend on replacing the vast majority of our existing energy infrastructure with new infrastructure in a relatively short time.”
- “Nor did it depend on spurring major innovation. Rather, the Acid Rain program was successful as a mechanism to guide existing facilities to undertake a fuel switch to a readily available substitute, the low sulfur coal in Wyoming’s Powder River Basin.”
- “Existing facilities needed only the addition of a few new railway lines, burner modifications to accommodate lower sulfur fuel, and, in some cases, new or more efficient scrubbers. Little new technology or infrastructure was needed and little was created.”
- “The goal of the Acid Rain program was to reduce sulfur dioxide emissions, while keeping the cost of energy from coal low. To be effective, climate change legislation must do the opposite; it must gradually increase the relative price of energy from coal and other fossil fuels to create the appropriate incentives for both conservation and the scale-up of clean energy.”
- “Further, the Acid Rain program did not allow any outside offsets and so provides no basis for the widespread assumption that an offset program will help with climate change. In addition, the success of the program was aided by the low, competitive price of low-sulfur coal.”
- “According to Professor Don Munton, author of ‘Dispelling the Myths of the Acid Rain Story’ the impact of the program has been overstated: The potential for a massive switch to low sulfur coal was no secret. Such coal was cheap and available, and it became cheaper and more available throughout the 1980s. Indeed, low-sulfur coal became very competitive with high-sulfur supplied well before the Clean Air Act became law.”
Another essential difference is the size of the two programs—for Acid Rain, cap-and-trade covered a limited number of sources only in the utility sector, while under a GHG cap, according to Bill Fang of EEI, “you are talking about literally millions of sources.” Link
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Roundtable: Understanding the Cost and Benefits of Auctioning Carbon Emission Rights
Monday March 30, 2009
Panelist Terry Dinan is Senior Analyst for Environmental Issues at the Congressional Budget. She testified March 12, 2009 before the House Ways and Means Subcommittee on Income Security and Family Support on "The Distributional Consequences of a Cap-and-Trade Program for Co2 Emissions."
EPW Policy Beat: Risky Legal Schemes
Friday March 27, 2009
EPW Policy Beat: Risky Legal Schemes
It’s a common refrain from environmental groups that, over the last eight years, the Bush Administration’s regulatory agenda was based on “legally risky” interpretations of the Clean Air Act. For these groups, any deviation from strict construction of the Act amounted to “legal sabotage,” according to a 2002 NRDC press release. One state attorney general, in filing a lawsuit against EPA over changes to improve the New Source Review program, explained that the “fight in court and elsewhere will be to uphold the letter and spirit of the Clean Air Act, endorsed by the first Bush Administration and now eviscerated by the second” [emphasis added]. Another such official said, “The Bush Administration is attacking the Clean Air Act, which has been a cornerstone of our national commitment to environmental cleanup for two generations.” Link
FACT: When it comes to regulating greenhouse gases under the Clean Air Act, these same groups, in hopes of avoiding a political backlash, have now conveniently dispensed strict construction, promoting instead interpretive “flexibility” and innovative “alternatives,” all of which violate the “letter and spirit” of the Act and contain significant legal risk. To wit: because hospitals, schools, farms, commercial buildings, and a host of other small sources emit more than 250 tons per year of CO2—a limit expressly mentioned in the statute—they will be required, once an endangerment finding is made and CO2 becomes a regulated pollutant, to obtain costly, burdensome pre-construction permits for their activities. But environmental groups dismiss legal concern about the clear 250 ton limit as “a smokescreen,” and propose “exemptions,” “deferrals,” “general permits,” and increases in the 250-ton limit by regulatory diktat. As the Clean Air Task Force put it in comments on the ANPR, these “options” to get around the 250 ton limit “are promising.” But as clean air attorney Peter Glaser has explained, “The [250 ton] threshold is statutory…What possible meaning could Congress have had for the number 250 other than 250?” Further, Glaser notes that “the statutory language is mandatory and does not leave any room for EPA to exercise discretion or create exceptions.” Link In short, unless Congress exempts them, there’s no way out for schools, assisted living facilities, and thousands upon thousands of small businesses.
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EPW Policy Beat: Endangering Farmers, the Elderly, and Construction Workers
Thursday March 26, 2009
EPW Policy Beat: Endangering Farmers, the Elderly, and Construction Workers
Once EPA makes a finding that greenhouse gases endanger public health and welfare under the Clean Air Act, who, specifically, would be affected? As EPA’s Advanced Notice of Proposed Rulemaking (ANPR) makes clear, an endangerment finding would lead to regulations covering nearly every facet of the American economy. In reading through comments filed in the regulatory docket, one is struck by how broadly the Clean Air Act would apply once an endangerment finding is made—especially to sources that have hitherto never come under the ambit of the Act. EPA received thousands of public comments from various industries and groups that expressed concern and outright opposition—on issues of cost, competitiveness, jobs, and administrative complexity—to greenhouse gas regulation under the CAA. The following excerpts, taken from comments filed on the ANPR, speak for themselves:
American Association of Housing Services for the Aging
“The members of AAHSA (www.aahsa.org) help millions of individuals and their families every day through mission-driven, not-for-profit organizations dedicated to providing the services that people need, when they need them, in the place they call home. Our 5,700 member organizations, many of which have served their communities for generations, offer the continuum of aging services: adult day services, home health, community services, senior housing, assisted living residences, continuing care retirement communities and nursing homes.
“AAHSA opposes regulation of greenhouse gases under the Clean Air Act. The Clean Air Act is not suited to regulate greenhouse gases, as the EPA administrator and several other federal agencies have opined. In addition, if the EPA regulates greenhouse gases under the Clean Air Act, many AAHSA members could be subject to costly and burdensome Clean Air Act programs. For example, health care facilities with 51,000 square feet or greater would be subject to the Prevention of Significant Deterioration (PSD) permitting requirements. This would require such facilities to get a PSD permit prior to new construction or modifications... Finally, there is also the possibility that health care facilities would need to obtain Title V operating permits from the EPA one year from when greenhouse gases become regulated, which would add to the already stressed budgets of nonprofit health care facilities.”
Family Dairies USA
“Family Dairies USA is a dairy cooperative with 3600 members located in a six state area in the Upper Midwest of the United, States. Our members are involved in production Agriculture meaning that a majority of them produce the crops that feed the cows that produce the milk which feeds the nation…We are opposed to the current regulations relating to greenhouse gases under the Clean Air Act as it relates to production agriculture.
“Title V requires that any entity emitting more than 100 tons per year of regulated pollutant must obtain a permit in order to continue to operate. EPA has no choice but to require these permits once an endangerment finding is made. USDA has stated that any operation with more than 25 dairy cows emits more than 100 tons of carbon and would have to obtain permits under Title V in order to continue to operate if GHG are regulated. Title V is administered by the states, and permit fees (tax) varies from state to state. EPA sets a "presumptive minimum rate" for permits, and that rate is $43.75 per ton for 2008-2009. For states charging the $43 .75 per ton rate, the cow fee (tax) for dairy would be $175 per cow.
“The cow tax would impose a significant added cost for our dairy farmers that cannot easily be absorbed…Imposition of the tax will cause many operators to go out of business and would likely raise prices for the products they produce.”
Mark Magney, President, Magney Construction
“We are a mid-sized construction firm…We employee 30 full time staff and have been in business since 1994. We primarily engage in the construction of Water and Wastewater Treatment Facilities throughout the upper Midwest We believe that the CAA is ill-suited for regulating greenhouse gas emissions, and that EPA should not move forward with a proposed rule or other regulation of greenhouse gas emissions under the CAA. Doing so could easily delay, if not halt, all future building and highway construction. New construction and renovation are vital to our economy and to future improvement of the environmental performance of our nation's infrastructure, and must be allowed to continue.”
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Temperature Control
Wednesday March 25, 2009
Posted by Matt Dempsey (202) 224-9797 Matt_Dempsey@Inhofe.senate.gov
The history behind EPA’s proposed endangerment finding dates back to 1999, when the International Center for Technology Assessment, joined by Greenpeace, the Green Party of Rhode Island, the Earth Day Network, and 15 other organizations, filed a petition with EPA demanding that it regulate greenhouse gas emissions from “new motor vehicles.” (The petition was inspired, we should note, by the “Cannon” memo that said CO2 is a pollutant under the Clean Air Act, and EPA could regulate it.) These groups urged the “[EPA] Administrator to reduce the effects of global warming by regulating the emission of greenhouse gases from new motor vehicles.” In the landmark Supreme Court case of Massachusetts v. EPA, they successfully argued that auto emissions were causing global warming, which, in turn, was eroding Massachusetts coastline. The remedy, they said, was to control greenhouse gas emissions from cars. All of this begs an obvious question: what effect would EPA regulation of tailpipe emissions actually have on global temperature?
FACT: In recent testimony before the House Ways and Means Committee on the climate impacts of regulating carbon emissions, Dr. John Christy of the University of Alabama-Huntsville found that such regulations would be “an undoubtedly expensive proposition” and would have “virtually no climate impact.” As Christy said, “I calculated, using IPCC climate models, that even if the entire country adopts these rules, the net impact would be at most one hundredth of a degree by 2100. Further, he said, “even if the entire world did the same, the effect would be less than four hundredths of a degree by 2100, an amount so tiny we cannot even measure it with instruments, let alone notice it in any way.”
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