Impact of Regulation on Industry
According to sources such as The Heritage Foundation & The Wall Street Journal, the negative impact of environmental regulation on industry will be more extensive then global warming alarmists will ever admit.
The Heritage Foundation did an assessment of the impact on industry if the following regulations were applied:
Requiring oil and gas exploration and production (E&P) operations to report to the Toxic Release Inventory (TRI).
Subjecting hydraulic fracturing of oil and gas wells by the E&P industry to Underground Injection Control (UIC) program requirements, despite language excluding this in the Energy Policy Act of 2005.
Requiring that all wastes associated with oil and gas exploration and production be addressed under Resource Conservation and Recovery Act (RCRA) cradle-to-grave hazardous waste provisions. This includes requiring that the underground injection of produced water and other materials associated with enhancing oil and gas production meet the standards of Class I injection.
Requiring storm water permits for all oil and gas E&P operations, rescinding Section 323 of the Energy Policy Act of 2005.
Requiring aggregation of the emissions of oil and gas E&P activities under the National Emission Standards for Hazardous Air Pollutants (NESHAP) program, and requiring the U.S. Environmental Protection Agency (EPA) to review and update clean air regulations related to oil and gas E&P.
The implementation of new Spill Prevention, Control, and Countermeasure (SPCC) requirements issued by EPA to “provide increased clarity,” as well as to better “tailor” requirements to oil and gas industry operations.
It discovered the following effects:
183,000 barrels per day lost, or 7 percent of U.S. lower-48 onshore oil production in the first year alone.
245 billion cubic feet of natural gas shut in the first year.
57 percent of producing onshore oil wells in the United States could be shut in, as could 35% of producing onshore gas wells.
Overall well drilling for unconventional gas could be reduced by half.
Compliance costs: $10 billion first year, up to $75 billion over 25 years.
Also worth noting is the amount of forgone royalties and tax revenues that would result from these regulations.
Additionally, according to Sen. Sam Brownback (R., Kan.) as reported by Ian Talley of The Wall Street Journal," regulation will result in lost jobs:
"You're talking about a massive market manipulation here on a grand scale that has significant impacts on the Midwest and the South … [including] the likelihood of us to lose a lot of jobs, a lot of businesses," he said.
The CBO also estimates that climate legislation..."would reduce gross domestic product by up to 0.75% by 2020 and 3.5% by 2050."
Also, senior government experts said the impact to the economy could easily impact different sections of the population disproportionately. The lowest-income could see a positive benefit in their energy bills, while the middle to upper classes and industrial and commercial consumers will face higher costs.
William Kovacs of The Heartland Institute shares similar sentiments and alternative decisions to regulation stating:
"For more than a decade, the environmental community has increasingly used the climate change issue to criticize the way we have achieved our quality of life in the United States and has advocated severe restrictions on energy use. Their attack, if successful, will lead to a diminished standard of living by lessening our means of producing goods, energy, homes, roads, and all the necessary infrastructure that protect us from forces that could otherwise cause us harm.
The business community typically has responded by talking about the lack of sufficient science in the climate change debate and about the adverse effect current proposals to address climate change will have on jobs and our gross domestic product. While all these arguments are correct, they are also defensive--one might further characterize them as weakly made, given the dramatic claims of environmentalists that if we do not mend our ways our wonderful world will come to a terrible end.
What is needed instead is a constructive dialog, and this means being honest with ourselves about the inevitable, growing need for energy and an understanding that if we choose to limit greenhouse gas emissions (GHG), we will have to begin developing vast amounts of non-carbon-based energy resources.
Such an undertaking will require massive technological innovation, and this will require an enormous commitment of funds, labor, and human ingenuity, possibly costing trillions of dollars over the long term. This is a worthwhile pursuit, however, for even if serious climate impacts caused by human activity do not arise, we will be developing new products; realizing revolutions in science and engineering; ensuring the availability of many new, clean energy technologies needed throughout the world; and producing additional wealth for our citizens.
In this forward-looking vision, the United States and its global partners need to undertake this equivalent of an Energy Marshall Plan because the global economy is expanding, energy consumption is growing by leaps and bounds, and emissions of GHGs such as CO2 are on the rise. By 2010, GHG emissions produced by transitional economies such as India and China will surpass those of Europe and the United States combined.
Kyoto a Failure:
Currently available fixes cannot solve this problem. The Kyoto Protocol, which imposes targeted constraints on allowable emissions and has been hailed as a major international policymaking development, is in fact a failure. GHG emissions will continue rising. Unfortunately, there is little agreement on what to do about this trend of growing energy use and increasing GHG emissions. Some believe revising the protocol to create more stringent control requirements will increase progress toward GHG emission reductions. There is little likelihood, however, that a more restrictive treaty can be ratified. Under the protocol, many nations have failed to achieve their reduction targets, and what little has been achieved has been economically costly.
Even if tighter targets were agreed upon, the technology needed to make a serious dent in global emissions while providing for growing energy needs and expanding national economies is largely unavailable. In addition, the infrastructure and financing needed for truly massive global innovation and deployment of clean energy technologies does not yet exist, nor are there adequate governance structures in many developing nations to grow and protect the markets into which these technologies must be placed.
Frankness, Pragmatism Needed:
To address these issues, debate about climate change must be integrated into a more encompassing global dialogue--one that concurrently considers global energy and security needs, allows for world economic expansion, and provides for manifold other societal needs such as poverty reduction, sanitation, and overall environmental protection.
What is needed now is a frank discussion with our international partners about how, over the long term, to produce massive amounts of new, carbon-free energy. The good news is that, acting both independently and in public-private partnerships with government and academia, business and industry throughout the world are working to create markets for clean energy technologies and realize innovative energy technology concepts. Business and industry already have spent hundreds of billions of dollars toward this end, and where realistic global marketplace opportunities arise, they will commit many billions more.
The recently established Asia-Pacific Partnership on Clean Development affords one pathway toward such development. A pragmatic, global, long-term commitment to develop clean and innovative technologies will have to pursue many possible avenues of opportunity. Should one or even several fail, others are sure to succeed, as the history of technological innovation proves.
It is unlikely that a person who lived a century ago would have imagined that today most Americans would have electricity, that we would all be driving cars, and that global energy expansion would allow us to rely on factories in China and India to supply consumer goods. Instead of embracing fear-mongering and a climate of mistrust, demands for energy limitations, and a poorer future for us and the rest of the world, we should view the current time as a chance to create a better future powered by new, clean energy resources and technologies developed and globally deployed by the United States and its partners."