Commentary Magazine


Topic: EPA

Crucifying the Oil and Gas Industry

It is often said that the definition of the word gaffe in Washington-speak is when someone accidentally tells the truth. Al Armendariz, the EPA administrator for Texas and surrounding states, certainly made a gaffe when he said in a speech in 2010, that the best way to enforce environmental laws was to crucify a few oil companies so that the rest will fall in line. He noted that the Romans used this technique when they conquered a new town, crucifying the first five people they could get their hands on so that the place would be very easy to manage for the next few years. (I expect that that is actually a slander against the Romans, although they had no scruples against selling whole populations into slavery.)

Armendariz was, let us hope, using a metaphor. But his actions indicate that he is all too willing to act first and get, well, evidence of wrong doing, later. The New York Times reported on December 8th, 2010, that he had signed an emergency order:

Dallas-based EPA Regional Director Al Armendariz issued an emergency order yesterday against Range Resources Corp., charging that its drilling in the Barnett Shale contaminated at least two water wells with methane and benzene. The order gave Range 48 hours to provide clean drinking water to affected residents and begin taking steps to resolve the problem.

Armendariz’s order is not simply an action against the company, but a slap at regulators at the Texas Railroad Commission, whom he accused of not doing enough to help the people living near the drilling operations in the Fort Worth area.

Read More

It is often said that the definition of the word gaffe in Washington-speak is when someone accidentally tells the truth. Al Armendariz, the EPA administrator for Texas and surrounding states, certainly made a gaffe when he said in a speech in 2010, that the best way to enforce environmental laws was to crucify a few oil companies so that the rest will fall in line. He noted that the Romans used this technique when they conquered a new town, crucifying the first five people they could get their hands on so that the place would be very easy to manage for the next few years. (I expect that that is actually a slander against the Romans, although they had no scruples against selling whole populations into slavery.)

Armendariz was, let us hope, using a metaphor. But his actions indicate that he is all too willing to act first and get, well, evidence of wrong doing, later. The New York Times reported on December 8th, 2010, that he had signed an emergency order:

Dallas-based EPA Regional Director Al Armendariz issued an emergency order yesterday against Range Resources Corp., charging that its drilling in the Barnett Shale contaminated at least two water wells with methane and benzene. The order gave Range 48 hours to provide clean drinking water to affected residents and begin taking steps to resolve the problem.

Armendariz’s order is not simply an action against the company, but a slap at regulators at the Texas Railroad Commission, whom he accused of not doing enough to help the people living near the drilling operations in the Fort Worth area.

Earlier this month, the EPA finally withdrew the order, having been able to produce no evidence whatever that Range Resources was in any way responsible.  (It might be noted in passing that while the emergency order was a major story in the Times, its withdrawal was not news fit to print. Nor is the news of  Armendariz’s recently revealed remarks.)

The United States, which invented both the petroleum industry, in 1859, and the transportation of natural gas over long distances by pipeline, in 1891, is on the cusp of what could be the greatest boom in energy production in its history, a boom that would not only reduce the price of energy—a major input into the struggling economy–but would greatly improve the country’s trade balance, help the dollar, and improve America’s foreign policy options.

The Obama administration, in thrall to the anti-capitalist environmental lobby, is doing everything possible to prevent it.

Read Less

Weighing the Costs and Benefits of EPA Regulations

While Secretary of Energy Stephen Chu was giving himself an A- grade on gas prices, the White House was rolling out a new rule that would ostensibly require federal agencies to weigh the cumulative effects of energy regulations. It’s a laudable idea in theory, but then again, so was President Obama’s executive order to cut down on regulatory red tape last year. And apparently that was such a runaway success that the White House needed to announce another rule a year later intended to do basically the same thing:

Agencies now will consult stakeholders and the public on how a new rule might interact with existing rules — and whether, for example, a string of upcoming rules on one industry would create an undue burden. Officials will also consider the cumulative effects of rules in their cost-and-benefit analysis, a process that currently weighs the costs against the benefits of each individual rule.

Read More

While Secretary of Energy Stephen Chu was giving himself an A- grade on gas prices, the White House was rolling out a new rule that would ostensibly require federal agencies to weigh the cumulative effects of energy regulations. It’s a laudable idea in theory, but then again, so was President Obama’s executive order to cut down on regulatory red tape last year. And apparently that was such a runaway success that the White House needed to announce another rule a year later intended to do basically the same thing:

Agencies now will consult stakeholders and the public on how a new rule might interact with existing rules — and whether, for example, a string of upcoming rules on one industry would create an undue burden. Officials will also consider the cumulative effects of rules in their cost-and-benefit analysis, a process that currently weighs the costs against the benefits of each individual rule.

If the White House was serious about weighing the cost-benefit of its energy regulations, it might want to take a look at some of the ways its EPA policies have impacted businesses during the past year. Take GenOn Energy, Inc., a company that was reportedly forced to shut down its energy plant in Ohio due to the financial burden of EPA regulations. Its dilemma was highlighted yesterday at a Senate hearing on the impact of Utility MACT, a new and exceptionally expensive regulation on coal plant emissions:

On February 29th of this year, GenOn Energy, Inc. announced that it would close the coal and fuel-oil fired electric generating plant in Avon Lake in 2015.  The Avon Lake Generating Station is capable of generating 734 megawatts,  providing baseload electric capacity and load-following capability to the grid, as well as essential peaking capacity and black start capability. This facility plays an important role in providing a reliable and affordable supply of electricity.

The reasons behind the closure are clear.  GenOn stated that the closure was a result of the rising costs associated with EPA’s regulations, and the fact that the overwhelming costs associated with complying with the rules could not be recovered by continuing to operate the facility.

It’s not just the closure of the facility that’s the problem. It’s also the loss of jobs, income taxes, property taxes, and energy generation along with it. This isn’t meant to diminish the real concerns over the environmental impacts of coal-fueled power plant emissions. But if the White House claims the benefit of these rules has to be weighed against the costs to communities, businesses and the economy, then it should explicitly address why it believes Utility MACT is worth these job losses and plant closures.

Read Less




Welcome to Commentary Magazine.
We hope you enjoy your visit.
As a visitor to our site, you are allowed 8 free articles this month.
This is your first of 8 free articles.

If you are already a digital subscriber, log in here »

Print subscriber? For free access to the website and iPad, register here »

To subscribe, click here to see our subscription offers »

Please note this is an advertisement skip this ad
Clearly, you have a passion for ideas.
Subscribe today for unlimited digital access to the publication that shapes the minds of the people who shape our world.
Get for just
YOU HAVE READ OF 8 FREE ARTICLES THIS MONTH.
FOR JUST
YOU HAVE READ OF 8 FREE ARTICLES THIS MONTH.
FOR JUST
Welcome to Commentary Magazine.
We hope you enjoy your visit.
As a visitor, you are allowed 8 free articles.
This is your first article.
You have read of 8 free articles this month.
YOU HAVE READ 8 OF 8
FREE ARTICLES THIS MONTH.
for full access to
CommentaryMagazine.com
INCLUDES FULL ACCESS TO:
Digital subscriber?
Print subscriber? Get free access »
Call to subscribe: 1-800-829-6270
You can also subscribe
on your computer at
CommentaryMagazine.com.
LOG IN WITH YOUR
COMMENTARY MAGAZINE ID
Don't have a CommentaryMagazine.com log in?
CREATE A COMMENTARY
LOG IN ID
Enter you email address and password below. A confirmation email will be sent to the email address that you provide.