This week the Congressional Budget Office (CBO) released a report, Effects of a Carbon Tax on the Economy and the Environment, which explores the economic and environmental impacts of a carbon tax. The CBO concludes that a carbon tax could substantially increase federal revenues and that the negative economic impacts of a carbon tax would be reduced if the revenues were used to lower the federal deficit or decrease marginal tax rates (as opposed to using the revenues for other government programs). We agree. In fact, we’ve modeled it.

The NAM recently released an economic study conducted by nonpartisan NERA Economic Consulting, looking at two carbon tax scenarios: one levied at $20 per ton increasing at 4 percent, and the other designed to reduce carbon dioxide (CO2) emissions by 80 percent. Our study, which was actually cited in the CBO report, found that any revenue raised by the carbon tax would be far outweighed by the negative impacts to the overall economy – even if all of the revenue was used for either reducing the federal deficit or decreasing marginal tax rates (the two less bad options according to CBO). In fact, our study showed the higher the carbon tax the more severe the impacts to the economy.

A carbon tax designed to reduce CO2 levels by 80 percent could place tens of millions of jobs at risk and raise gasoline prices by over $10 per gallon, residential electricity prices by over 40 percent, and natural gas prices by almost 600 percent. Manufacturing output could drop by as much as 15.0 percent in energy-intensive sectors and 7.7 percent in non-energy-intensive sectors. The overall impact on jobs could be substantial, with a loss of worker income equivalent to as many as 1.5 million jobs in 2013 and 21 million by 2053. (continue reading…)

Yesterday we saw two very different takes on coal exports in a petition filed by environmental groups, and a study released by the National Mining Association.

Several environmental groups filed a petition with the Army Corps of Engineers (Corps) asking them “to evaluate the cumulative and related impacts of all proposed coal export terminals in Oregon and Washington in a single, comprehensive, area-wide environmental impact statement (“EIS”) under the National Environmental Policy Act (NEPA). Such a process will allow explicit consideration of the collective impacts of multiple distinct but related decisions.” Their message was clear, we don’t want you to do anything that involves fossil fuels.

The National Mining Association (NMA) released a report prepared by Ernst & Young LLP that explored the economic and jobs benefits of coal exports in 2011. The report estimated the economic value of related coal activity at $16.6 billion in 2011. They also estimated that 25,130 jobs or almost 19 percent of those working at coal mines were directly related to coal exports. The report sent an equally clear message, fossil fuels creates economic activity and jobs.

This petition by the environmental groups is an attempt to slow down the permitting process and to kill these export expansion efforts by delaying permits for years and by requiring huge expenditures by the private and public sectors. Expanding environmental review to include all of the Washington and Oregon proposals and their potential cumulative economic and environmental impacts across the region, the United States and the world, would be a drastic policy shift from current practices that would undermine national goals to boost exports.

A Programmatic EIS for coal export projects in the Pacific Northwest would create a major disincentive for manufacturers to export their products, impacting jobs and economic growth. This is exactly the effect these groups hope to have on these projects, and in fact most any other project that involves fossil fuels.

The NAM sent a letter to the Corps in June of 2012 urging them not to expand its NEPA analysis beyond the individual, project-specific review required under the statute. The NAM believes that by expanding this focus to include the environmental impact of the cargo, and all similar cargo transported through the region, the Corps could be laying the foundation for similar exercises for just about any port or rail expansion to transport any type of cargo. For instance, what if the cargo at issue was not coal but cars, or tractors, or even airplanes? Would the Corps need to perform a Programmatic EIS to determine the lifecycle environmental impact of that cargo? What if the cargo was an agricultural or animal product; should methane emissions be considered? The possibilities are endless and deeply troubling to manufacturers and their employees.

In this town, it’s a rare occurrence for a room full of lobbyists to be truly surprised.  This morning was one of those times.  In remarks to the American Alliance for Innovation, a coalition of industry trade groups of which the NAM is a member, Sen. David Vitter (R-LA) announced today that he was introducing his long-awaited Toxic Substances Control Act (TSCA) reform legislation . . . except that rather than introducing an “alternative” bill to legislation from Sen. Frank Lautenberg (D-NJ), he had instead drafted a brand new bill with Sen. Lautenberg that they were introducing along with over a dozen other Republicans and Democrats.

We commend Sens. Vitter and Lautenberg for their leadership and for achieving a far too rare feat in Washington: coming together in bipartisan fashion to propose badly-needed reform to a federal law impacting human health, manufacturers in all sectors, and American innovation.

Manufacturers are committed to producing safe, innovative and sustainable products that provide essential benefits to consumers while protecting human health and the environment. To accomplish this, we believe Toxic Substance Control Act (TSCA), the primary statute regulating the manufacture and use of chemical substances in the United States, should be modernized. However, we worried that the debate over how to reform this outdated law would fall prey to partisan politics, much like the vast majority of other environmental and energy issues in recent memory.

Today at least, it appears that bipartisanship can prevail. We believed Senators needed to start from scratch; it appears that they did. We believed there needed to be broad stakeholder input; once again, there was. And there needed to be some way to bridge the substantive divide between Sen. Lautenberg’s Safe Chemicals Act, which industry opposed, and this new bill being drafted by Sen. Vitter.  The Senators made it happen. (continue reading…)

This afternoon President Obama toured the facility and spoke at of Ellicott Dredges in Maryland. During his visit the President spoke about the importance of infrastructure projects. He announced a Presidential Memorandum to modernize infrastructure review and permitting regulations, policies and procedures.

Our nation’s infrastructure is in need of investment and repair. Manufacturers rely on our rails, roads, ports and waterways to deliver billions worth of commodities annually. It is a positive step that President Obama is discussing the need for reforms but we need real action to speed up the review process of many infrastructure projects. The environmental streamlining reforms in the Water Resources Development Act, which passed the Senate this week, are the types of reforms that we would need to see for future projects.

Just yesterday Peter Bowe, President and CEO of Ellicott Dredge Enterprises, testified before the House Small Business Subcommittee on Agriculutre, Energy and Trade about the benefits of Keystone XL.

“So what does the Keystone pipeline have to do with us, and why do we care? For us, it’s all about jobs, not construction jobs for the pipeline itself, but ongoing jobs every year for decades to come, all related to the production of oil from the Alberta oil sands deposits. This oil needs the Keystone pipeline. The oil sands in Alberta are one of the largest markets worldwide for dredging equipment. Our dredges are used to rehandle the tailings generated by the mining process. Tailings are the wet waste which is a combination of clay, sand, and water after the oil- bearing bitumen has been removed. All the oil sands projects generate substantial amounts of tailings which are deposited into ponds. Oil sands producers have been criticized for water usage, but now, thanks to tailings reclamation, they recycle 85% to 90% of water used, and dredges are an integral part of the recycling process.”

Keystone XL will create thousands of jobs and is critical for the competitiveness of companies like Ellicott Dredges. Keystone XL has been pending for more than 5 years, the time has come to approve this important energy and infrastructure project.

Chip Yost is assistant vice president of energy and resources policy, National Association of Manufacturers.

Yesterday the House Committee on Small Business’s Subcommittee on Agriculture, Energy and Trade held a hearing on the Keystone XL and Small Business.  This hearing is that most recent in a number of hearings held by the House to talk about the importance of the Keystone XL pipeline project.

There were four witnesses, one of which was Mr. Peter Bowe, an NAM member, the President and CEO of Ellicott Dredge Enterprises, LCC. Ellicott Dredge makes dredging equipment that is used in the processing and the reclamation of tailing ponds at the mining site. President Obama is visiting the Ellicott Dredge facility in Maryland today to discuss infrastructure.

The other witnesses included Mr. Brent Booker, Secretary Treasurer, Building and Construction Trades Department, Department, AFL-CIO, ; Mr. Mat Brainerd, President, Brainerd Chemical Company, Tulsa, OK; and Mr. Christopher Knittel from the Center of Energy and Environmental Policy Research, Massachusetts Institute of Technology.

Peter’s business is a small business with about 200 employees in four locations, Maryland, Wisconsin and Europe. For Peter and the Ellicott Dredge organization, the Keystone XL is critical because it will move oil more quickly and result in additional demand. As oil demand increases so does the demand for his products and will result in $10s of millions of dollars being spend within his supply chain. These are small and large companies located throughout the United States. The ripple effect of spending within his supply chain is substantial and impacts a number of smaller communities throughout the country. (continue reading…)

Recently the Sierra Club and other environmental groups sent several coal companies and BNSF Railway notice that they intend to file a lawsuit over coal dust from railway cars in the Pacific Northwest. The threat of this frivolous lawsuit only harms our economy and jobs in the Northwest.

Yesterday, The Seattle Times ran an op-ed from Roger McClellan, past chairman of the Environmental Protection Agency’s (EPA) Clean Air Scientific Advisory Committee and an expert on toxicology and human health-risk analysis, disputing these baseless claims. In the piece McClellan points out that the anecdotal evidence and the opinions of just a handful of people should not be used to sway the public when it comes the transportation of coal, but these decisions should be based on scientific evidence and facts.

Excerpt from the piece:

For starters, claiming that finding a piece of coal on the ground or in the water leads in a direct line to a health or environmental risk violates one of the basic tenets of toxicology and risk assessment — the mere presence of a substance does not indicate harm. There are other factors that need to be taken into account, the main one being exposure.

Just because a piece of coal is found in the water or coal dust is found near a rail track does not mean humans are exposed to it. Coal is not a substance that breaks down easily. Coal is relatively innocuous. Simply moving it by trains or trucks or barges does not equate to a risk to the environment or human health.

Coal continues to play an important role in meeting energy needs around the world, with steady improvements made in its transport and use. Coal has been transported through the Northwest by rail for decades and there has never been any evidence of harm associated with this rail transport.

As McClellan notes coal has been transported for decades through the Northwest by rail and there has never been any evidence associated moving the coal on the railways. Only when debate heated up over the coal export terminals has this become a hot topic for environmental groups. Thousands of jobs are on the line and the decision on the coal export terminals should be based on facts. We must work to reduce our export barriers for valuable exports like coal, not create new ones.

This morning, the Washington Post editorial board again called for a carbon tax with the piece “Carbon tax is the best option Congress has.”  It’s the second time in the last two months (and fourth in the past six months) the Post has called for this tax, which has the potential to hurt jobs and our economy. It’s a surprising amount of attention for a concept that has little to no political legs in Congress.

Congress isn’t talking about a carbon tax because when a cap-and-trade bill like Waxman-Markey is labeled a “job-killing energy tax” and can’t win support in the Senate, it’s hard to get behind a bill that would impose an actual energy tax.

Also, a carbon tax does not appear to be the economic or environmental panacea the Post is making it out to be.  A recent economic study for the NAM conducted by the nonpartisan NERA Economic Consulting looked at two carbon tax scenarios: one levied at $20 per ton increasing at 4 percent, and the other designed to reduce carbon dioxide (CO2) emissions by 80 percent. In both cases, any revenue raised by the carbon tax would be far outweighed by the negative impact to the overall economy.

Both cases would hurt families and businesses, resulting in higher prices for natural gas, electricity, gasoline and other energy commodities.  The $20/ton case reduces U.S. CO2 emissions by only about 30 percent, a much smaller amount than was called for in Waxman-Markey and by leading climate advocates.  To get to the levels they are seeking, 80 percent reductions by 2050, the economic costs skyrocket. (continue reading…)

Early this afternoon the Senate Committee on Energy and Natural Resources passed S. 761, “The Energy Savings and Industrial Competitiveness Act,” more commonly known as the Shaheen-Portman  bill after its two authors, Sens. Jeanne Shaheen (D-NH) and Rob Portman (R-OH). The 22-member Committee passed the bill on a strong voice vote with only three Senators castings votes in opposition.

The only amendment that was offered (and agreed to) was a manager’s amendment from Sen. Portman. The bill’s sponsors received unified praise from Senators during the markup for their bipartisan efforts and their work to promoting energy efficiency. Chairman Ron Wyden (D-OR) requested that Senators hold their amendments until the legislation reached the floor of the Senate.

The Committee went on to discuss a number of possible amendments and issues that might be addressed on the floor. It was clear that there was great interest in expanding the scope of this legislation, with a number of Senators discussing the issues they would like addressed.  This is obviously a bit of a Pandora ’s Box but at least Senators are talking about floor action on energy, which hasn’t happened in a long time.

Manufacturers continue to urge Senator Reid to bring this bill to the floor as soon as possible. Energy efficiency is vital to manufacturers’ ability to compete, and this bill should be a no-brainer given its potential for job creation and energy savings. And it is a great way to start bridging some of the divides that have too long prevented the Senate from having a constructive legislative debate on energy policy.

Chip Yost is assistant vice president of energy and resources policy, National Association of Manufacturers.

Yesterday, during a House Energy and Commerce Subcommittee hearing, former Sens. J. Bennett Johnston (D-LA) and Byron Dorgan (D-ND) stated their case for allowing the United States to export its vast energy reserves.  The Department of Energy is currently reviewing applications to export natural gas, and we expect a decision on at least some of the applications soon.  At the same time, the Army Corps is in various stages of permitting for expanded coal export capacity in the Pacific Northwest.  Both sets of export projects have received significant attention and scrutiny in Washington, D.C.

Sen. Dorgan spoke on behalf of the Bipartisan Policy Center (BPC), a nonprofit that boasts both Republican and Democratic members of Congress among its staff, as well as leaders from industry and environmental groups on its board of directors.

According to Sen. Dorgan, the BPC’s Energy Board reviewed the recent studies on the impacts of LNG exports and “concluded that domestic gas prices are more likely to drive export levels than exports are likely to determine domestic prices . . . that LNG exports are likely to have at most a modest impact on domestic natural gas prices—LNG exports will adjust as U.S. prices rise or fall.”  Dorgan went considerably broader than just natural gas, though.  He stressed: “restricting international trade in fossil fuels is not an effective policy to reduce global greenhouse gas emissions or to advance domestic economic interests, and we recommend against any such restrictions.”

That is precisely where the NAM stands on energy exports. Manufacturers fundamentally believe in free trade and open markets—a policy that extends to energy exports. We oppose bans or similar market-distorting barriers to our energy exports. We are pleased to see the BPC take the same stance.

Sen. Johnston, a Louisiana Democrat who spent 25 years in the U.S. Senate, put it eloquently:

“The free market might not always lead to everyone’s definition of the sweet spot, but experience has shown that it is a better allocator and regulator than bureaucrats and politicians. We should heed the admonition of Adam Smith that demand begets supply: Allow the free market to allocate the nation’s newfound energy bounty.”

Manufacturers believe in a true “all-of-the-above” energy strategy that embraces all forms of domestic energy production, including oil, gas, coal, nuclear, energy efficiency, alternative fuels and renewable energy sources. We are a country built on exports—the National Association of Manufacturers was founded because our members wanted to export—and we must continue to let the principles of free trade and open markets govern in the area of energy exports.

Ross Eisenberg is vice president of energy and resources policy, National Association of Manufacturers.

Yesterday Senator McConnell and Rand introduced the “Coal Jobs Protection Act” in response to a number of regulatory actions taken by the Environmental Protection Agency (EPA). Rep. Capito introduced a companion bill in the House this afternoon as well. The focus of the McConnell bill is jobs and to slow the EPA’s efforts to regulate coal usage out of our energy mix.

The coal industry in Kentucky directly employs 14,000 workers and accounts for an additional 52,000 workers indirectly.  Over the last several years both coal production and employment have dropped significantly in the Bluegrass State. Coal production is down almost 28 percent and over 4,000 coal miners have lost their jobs.

Too often the EPA has dragged its feet on approving various water permits ranging for 402 to 404 by delaying action on these permits that are needed to begin work on coal related projects. EPA’s own web site they list almost 40 402 (national pollutant discharge elimination into navigable waters) permits that have been waiting for action since 2008. This legislation would require EPA to provide 402 applicants a yes or no within 270 days of the application.

It would also require EPA to begin the authorizations process on 404 permits (fill and dredge permits) within 90 days of receiving the application. EPA’s slow walking these permits costs communities, businesses and workers thousands of jobs and millions of dollars in economic benefit in addition to millions of dollars in lost coal severance money that would have gone to the state and local communities.

(continue reading…)