Chris Prandoni

Mining Industry's Fate to be Determined by Anti-Mining EPA


Posted by Chris Prandoni on Friday, June 14th, 2013, 9:54 AM PERMALINK


Empowered by a recent court ruling, the Environmental Protection Agency is coopting arcane laws to inhibit economic development and kill thousands of jobs. In order for a mining operating to begin production, developers must apply for and receive a handful of permits. One such mandatory permit is the Section 404 permit required under the Clean Water Act. Production cannot begin without the Section 404 permit, effectively giving the EPA veto authority over any proposed mining project.

A few weeks ago, a federal appeals court upheld the EPA’s decision to retroactively revoke a 2007 Section 404 mining permit issued for the Spruce Mine in West Virginia.

Granting the EPA sweeping authority, Judge Karen LeCraft Henderson wrote that the Clean Water Act “empowers him [EPA Administrator] to prohibit, restrict or withdraw the specification 'whenever' he makes a determination that the statutory 'unacceptable adverse effect' will result."

Judge Henderson’s ruling may have granted the now blatantly partisan EPA the ability to kill any mining project “whenever” it sees fit. Given the EPA’s job killing regulations and attempts to scuttle the Keystone XL pipeline, it is easy to predict how the EPA will use its newly codified authority.

It is not surprising that President Obama’s EPA is pushing legal barriers to shut down a coal mine in West Virginia. What is surprising is that a federal judge endorsed such a move, especially after a district court argued that the EPA "exceeded its authority under section 404(c) of the Clean Water Act when it attempted to invalidate an existing permit by withdrawing the specification of certain areas as disposal sites."

Most mining projects require years of preparation. Before developers can even begin mining, they first must identify economically viable resources, either buy or lease land from the government or private individuals, and then apply for drilling permits from a handful of different agencies. Arch Coal received its first Spruce Mine permit in 1998 and received its Clean Water Act permit in 2007. All in all, this process requires millions of dollars, lawyers, and years of paperwork.

After the Spruce Mine ruling, job creators will have to go through this expensive, time-consuming process knowing that the EPA can pull the rug out from under them at any point during production.

Every mining investment just got a whole lot riskier.

But this is nothing new. With Congressional Republicans blocking Democrats’ anti-growth legislation, environmentalists have enlisted the EPA to inhibit domestic energy and mineral production.

For Full Article Click Here

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ATR endorses McConnell's Coal Jobs Protection Act


Posted by Chris Prandoni on Monday, April 29th, 2013, 11:15 AM PERMALINK


Americans for Tax Reform sent the following letter to the Senate:

26 April 2013

Dear Senator:

On behalf of Americans for Tax Reform and millions of taxpayers nationwide, I urge you to support Sen. McConnell’s Coal Jobs Protection Act, which looks to streamline the Environmental Protection Agency’s (EPA) broken permitting process.     
 
Since assuming office, President Obama has tasked the EPA with diminishing American coal production and consumption. After all, it was candidate Obama who, estimating his potential presidency, said “If somebody wants to build a coal fire plant… it will bankrupt them.”  

Sen. McConnell’s Coal Jobs Protection Act looks to rebuff this Administration’s attacks on an industry that is responsible for tens of thousands of jobs and supplies Americans with affordable, reliable energy.  

The consequences of candidate Obama’s threats are now evident: last year coal production in Kentucky dropped by over 16 percent and direct employment fell 22 percent, according to the Kentucky Department for Energy Development and Independence. In eastern Kentucky, over 4,000 miners lost their jobs and coal production is operating at its lowest level since 1965.

While the EPA is depressing American employment through a variety of procedures, Sen. McConnell’s legislation looks to streamline the agency’s broken permitting process. Sitting on permits that were submitted in 2008, the EPA is using the permitting process to effectively shut down Kentucky coal mines.

The Coal Jobs Protection Act reforms the EPA’s unreasonable permitting rules by requiring the agency to approve or veto 402 applications within 270 days.  If the EPA doesn’t act, the permit is automatically approved. Additionally, this legislation gives the EPA 90 days to begin the authorization process for 404 permits.

Allowing the EPA to postpone thousands of jobs indefinitely, through inaction, is unacceptable. Sen. McConnell’s Coal Jobs Protection Act would give Kentuckians a reprieve from the Obama Administration’s crushing regulatory agencies.

It is for these reasons that I urge you to pass the Coal Jobs Protection Act.

Onward,
Grover Norquist

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Conservative groups to Gina McCarthy: EPA must be more transparent


Posted by Chris Prandoni on Monday, April 22nd, 2013, 2:41 PM PERMALINK


Dear Environment and Public Works Committee Member:

The below groups and the millions of activists we represent, strongly support Senate Republican calls for Environmental Protection Agency (EPA) transparency.

For too long the EPA has effectively evaded oversight from Congress and the American people.

The Windsor-gate scandal that precipitated Lisa Jackson's departure was only the latest example.  The agency has also refused to release the underlying data for benefit claims for rules that impose billions of dollars of economic costs, skirted FOIA requests, and evaded public participation by entering into secretly-negotiated settlement agreements with left-wing interest groups.

With the EPA now regularly making decisions that carry enormous consequences for energy consumers and the U.S. economy, we are seriously concerned that the agency continues to operate with a lack of adequate transparency.

President Obama has nominated current EPA Assistant Administrator Gina McCarthy to succeed Lisa Jackson as EPA Administrator. Serving in the EPA for the past four years, Ms. McCarthy has intimate knowledge of the EPA's procedures.

Before the Senate can begin considering Ms. McCarthy as a nominee for EPA Administrator, the American people must be assured that the agency she will run will be accountable to the people affected by its policies.

To this end, Senate Environment and Public Works Committee Republicans sent Ms. McCarthy a letter on April 10, 2013 requesting her to resolve five past instances of EPA obstruction or evasion (a copy of this letter can be found after the signature line).

We believe that the American people deserve answers to the five questions outlined in the April 10 letter.

We look forward to working with you to illuminate the EPA's precarious policies.

Sincerely

American Commitment
American Conservative Union
Americans for Tax Reform
Americans for Prosperity
Center for Individual Freedom
Citizens for Limited Taxation
Citizen Outreach
Competitive Enterprise Institute
Council for America
Freedom Action
Freedom Works
Frontiers of Freedom
Liberty Guard
National Center for Public Policy Research
Wyoming Liberty Group
60 Plus

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Obama proposes $94 billion energy tax hike in new budget


Posted by Chris Prandoni on Wednesday, April 10th, 2013, 1:24 PM PERMALINK


PDF copy of this document
Obama Energy Tax Proposals  
The President’s FY 2014 budget contains billions in tax increase on energy production and consumption. These taxes will result in higher prices at the pump, increased utility bills, and fewer American jobs as companies flee the U.S. and companies cannot recover their investments. Below is a breakdown of energy taxes Obama put forth in his 2014-2023 budget:

Tax Increase

FY 2014

FY 2014-2023

Industry Impact

Increase Amortization Period for G&G

$60 million

$1.4 billion

$1.4 billion

Double-taxing Dual-Capacity taxpayers

$550 million

$11 billion

$11 billion

Repeal Percentage Depletion:

  • Oil and Natural Gas
  • Hard Minerals

 

$1 billion

$113 million

 

$10.7 billion

$2 billion

 

$10.7 billion

$2 billion

Repeal Intangible Drilling & Expensing of Exploration Cost for Coal

  • Oil and Natural Gas
  • Hard Mineral

 

$1.7 billion

$25 million

 

$11 billion

$430 million

 

$11 billion

$430 million

Section 199

  • Oil and Natural Gas
  • Hard Mineral

 

$1.1 billion

$33 million

 

$17.4 billion

$400 million

 

$17.4 billion

$400 million

Repeal Tertiary Injectants

$8 million

$100 million

$100 million

Superfund

$1.4 billion

$20.2 billion

$10.1 billion

LIFO

$3.5 billion

$80 billion

$28.3 billion

Passive Loss

$7 million

$74 million

$74 million

Oil Spill Liability Trust Fund

$64 million

$1 billion

$1 billion

ATR Recommendation
Allow all employers to deduct all of their business expense in the year they are incurred. In the same budget President Obama argues for full business expensing for small businesses, he looks to lengthen – or eliminate entirely – cost recovery mechanisms for America’s energy producers. This sort of duplicity is not only inequitable, but hamstrings the American economy.

Investment is essential to economic growth. The easiest and fairest way to ensure businesses spend money is to allow them to recoup their expenditures immediately, not depreciate or amortize expenses over arbitrary periods of time. Needlessly tying up capital in strange depreciation tables only exacerbates our current economic morass; yet, this is exactly what President Obama is advocating for.  

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EPA releases new regulation increasing the price of gasoline by 9 cents per gallon


Posted by Chris Prandoni on Monday, April 1st, 2013, 2:20 PM PERMALINK


Last Friday the Office of Management and Budget finalized the Environmental Protection Agency’s Tier 3 gasoline regulation. Even if you aren’t intimately familiar with the rulemaking process, that last sentence should sound some internal alarm bells:

1)    EPA – nothing good comes out of this EPA. Nothing.
2)    Regulation – how the Obama Administration implements policies Congress rejects
3)    Friday – the day politicians/governments/businesses announce bad things. If you are going to fire someone, you do it on a Friday. If the EPA is going to increase the cost of gasoline for every American…they do it on a Friday. Fridays are scary.

EPA just increased the price of gasoline by 9 cents
As you would imagine, gasoline is a heavily regulated fuel.

EPA determines much of the manufacturing process by requiring strict emissions standards for refiners. EPA also determines the makeup of gasoline by setting numerous blending requirements refiners must meet. For example, EPA makes refiners annually put over 13 billion gallons of corn-based ethanol in gasoline – this mandate, known as the Renewable Fuels Standard, means that about 10 percent of every gallon of gasoline is corn-based ethanol.

EPA also determines the emissions byproduct of gasoline, like how much sulfur can be released into the air. More formally, the sulfur emission regulations are called “Tier rulemakings” with the EPA just releasing its third installment titled, Tier III.

The previous – and recent – Tier II rulemaking reduced sulfur emissions by 90 percent from 300 ppm (parts per million) to 30 ppm. Now, with persistently high gasoline prices, the EPA has decided to once again ratchet down already low sulfur emissions from 30 ppm to 10 ppm.

The American Petroleum Institute has said that this new sulfur regulation will increase the cost of producing gasoline by 9 cents, costs which consumers will bear. A Baker and O’Brien analysis calculates that the regulation will force refiners to spend around $10 billion to comply with the rule and an additional $2.5 annually to maintain compliance. All of this means higher gasoline prices for drivers.

Additionally, the EPA writes that the regulation is “is expected to decrease employment in the vehicle manufacturing sector.” That doesn’t sound good, either.  

Next time you hear the EPA, or any other federal agency for that matter, is going to tell you something on a Friday, reach for your wallet.

 

 

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The Energy Production and Delivery Act of 2013 Hits All the Right Notes


Posted by Chris Prandoni, Tom Fletcher on Friday, March 1st, 2013, 11:59 AM PERMALINK


Senator David Vitter (R-La.) is putting the White House on notice. Looking to scale back inhibitive federal regulations, the Louisiana Republican is introducing new legislation to bolster American energy production and create hundreds of thousands of jobs. By amending Environmental Protection Agency and Department of the Interior abused policies, the Energy Production and Delivery Act of 2013 could create millions of jobs through the development of oil and natural gas reserves, save hundreds of thousands of jobs by turning off EPA’s job-killing regulations, and add trillions of dollars to our GDP through increased economic activity.  

Sen. Vitter’s legislation is as ambitious as it is expansive, so ATR highlighted some of our favorite parts of the bill below.

Opening up the Outer Continental Shelf (OCS)
Obama Policy: Upon being sworn in, Obama promptly killed the 5-year lease plan to auction oil and natural gas leases off the Pacific and Atlantic OCS. When Secretary of the Interior Ken Salazar finally released DOI’s 5 year OCS proposal, energy development was totally prohibited off America’s Eastern and Western coasts.

Vitter Proposal: Allow oil and natural gas producers to develop natural resources off our Outer Continental Shelf. Doing so could create 1.2 million well-paying jobs and increase America’s GDP by $8.2 trillion over the next 30 years.

Open up Alaska’s Arctic National Wildlife Refuge (ANWR)
Obama Policy:  Unnecessarily postponing hundreds of thousands of jobs and billions of dollars in economic activity, it is currently illegal to extract oil and natural gas in the Arctic National Wildlife Refuge (ANWR). Despite bipartisan calls to open ANWR, the President refuses to allow development of this desolate area.

Vitter Proposal: Create over 700,000 jobs and generate billions in new government revenue by allowing for safe and responsible development of this region.

Regulatory Burden
Obama Policy: President Obama has unleashed job-killing regulations that have severely hamstrung American energy production and endanger traditional sources of power generation. Through the EPA, this administration has used the Clean Air Act to enact policies they would never have passed both Congressional chambers, namely severe carbon constriction.

Vitter Proposal: Eliminate EPA’s newfound calling to regulate greenhouse gases (GHG). Preempting EPA’s ability to regulate CO2 and pulling back a handful of other regulations could save over 500,000 jobs and over $7 trillion in GDP over the next 20 years. This legislation would prohibit the regulation of CO2 until other large emitters, like China, India, and Russia, implement similar economically destructive policies.  

The Energy Production and Delivery Act of 2013 does lots of other lots of other great stuff, like approve the Keystone XL Pipeline (+ 20,000 jobs) and expedites the judicial review process for energy projects. Click here to learn more about this pivotal piece of legislation.
 

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Don't Raise Taxes To Avoid Sequester


Posted by Chris Prandoni on Thursday, February 21st, 2013, 10:41 AM PERMALINK


The below op-ed was originally posted at Townhall.com

President Obama has a new plan to avoid sequestration: kill private sector jobs. In 2011 Republicans required spending cuts to raise the debt ceiling. President Obama suggested that, in addition to freezing spending levels, broad-based spending cuts be implemented on March 1, 2013 via sequester.

Listening to Obama’s Press Secretary Jay Carney, you would never know that the sequester Obama is so eager to avoid, in fact, came from the White House. Citing estimates that 750,000 people could lose their jobs as a result of the sequester, Carney told reporters on Feb 20 that “the choice that Republicans are making is … throw these people out of work in order to protect these special tax breaks for corporate jet owners and oil and gas companies. It makes no sense and it’s bad policy.”

Republicans have passed legislation that would replace the sequester with targeted, equivalent spending cuts. Democrats and the White House are using the threat of sequestration as justification for tax hikes – surprise, surprise. Negative consequences associated with the mechanisms of sequestration, like job loss, are not caused by oil and natural gas companies’ expensing provisions, but result from an intransigent Democrat Party. According to this ideology, every problem, even the ones Democrats are responsible for, can only be solved one way: tax increases to fund more government spending.

Categorizing the oil and natural gas producers’ expensing provisions as tax breaks or subsidies makes it easier to justify raising taxes on this industry, which is why Democrats do it. Like every other industry, oil and natural gas producers are allowed to deduct some of their expenses. For example, one “subsidy” Obama wants to repeal is the Domestic Manufacturer’s Deduction known as Section 199. While all domestic manufacturers are eligible to employ Sec. 199 and deduct 9 percent of the income earned from manufacturing and extracting, oil and natural gas producers can only deduct 6 percent of the same expenses. Democrats would like to drag the already penalized 6 percent rate down to zero.

To finish the post, please visit Townhall.com
 

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Repeal the Jones Act, Reduce the Price of Gasoline


Posted by Chris Prandoni on Monday, February 18th, 2013, 2:40 PM PERMALINK


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While the United States is on the verge of an energy revolution, an obsolete law threatens to stall oil production and already inflates the price of gasoline. Passed over ninety years ago, the Merchant Marine Act of 1920 – commonly referred to as the Jones Act – requires all vessels carrying goods between domestic ports to have been built in the U.S. and crewed/owned by Americans.

In the energy industry, the Jones Act raises the cost of gasoline at all points in the supply chain. We’ll look at two examples that show how the protectionist Jones Act increases the price of gasoline and inhibits the flow of crude oil.

Refiners to consumers
Due to the limited pipeline infrastructure in the North East, consumers from this region rely heavily on ships to deliver the large amounts of gasoline they require. Since the two major Pennsylvania refineries are closing, the East Coast will depend almost entirely on gasoline manufactured in the Gulf. An EIA report describes a “major logistical hurdle” that must be overcome to transport gasoline from the Gulf to the North East:

The pipeline that delivers products from the Gulf Coast to the Northeast is at or near capacity. As a result, additional volumes will need to move from the Gulf Coast to the Northeast by water. Shipments between two U.S. ports require vessels that meet Jones Act requirements. Generally, Jones Act ships are chartered months in advance, limiting their short-term availability.

Only a small number of American ships meet strict Jones Act requirements driving up transportation costs and removes nearly all flexibility from the shipping market. The EIA report warns that:

In 2012, close to 40 tankers and perhaps as many as 270 barges are used to move petroleum products and crude oil in coastal waters. But not all of these vessels are capable of or available to move product from the Gulf Coast to the Northeast due to size and other factors.

Since this Administration has shown a reluctance to support new pipelines, they should at least mitigate nation-high gasoline prices by suspending or repealing the Jones Act. According to the Wall Street Journal, John Demopoulos of Argus Media, which tracks shipping pricing, estimates that foreign-flagged carriers could move oil from the Gulf Coast to the Northeast for about $1.20 a barrel, compared with $4 a barrel on U.S. ships.

Oil producers to refiners
North Dakota has passed Alaska and California and now ranks as the second highest oil producing state in the U.S. Owing much of the new development to the pervasive practice of hydraulic fracturing on private lands, North Dakota’s oil production ascendency happened, what seems like, overnight. While the welcomed oil renaissance has turned sleepy towns to vibrant economic centers, the influx of activity has increased roadway traffic. Missing adequate pipeline infrastructure and with the Keystone XL pipeline in limbo, North Dakota oil producers are forced to transport substantial amounts of crude oil mostly by road and train, hence the congestion.

If the Jones Act were repealed, it would give oil producers another medium to transport oil, by boat. Platts reports that:

“Among the obstacles for moving crude by ship in the Great Lakes region are vying regional crude pipelines and a US-flagged vessel shortage, sources say. A Jones Act (US-flagged) vessel is needed to ship from one US port to another.”

With the Jones Act in place, it doesn’t usually make economic sense to transport oil to regional ports – but it could. Repealing the Jones Act would lift this unnecessary shortage, reducing road congestion and injecting competition into the shipping market.

EIA Jones Act PDF download

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Three executive actions the Obama Administration can take to lower gasoline prices


Posted by Chris Prandoni on Tuesday, February 12th, 2013, 3:01 PM PERMALINK


Since Obama was sworn in, the price of gasoline has risen from $1.84 to $3.60. Much like perpetual high unemployment rates, expensive gasoline might be one of the lasting legacies of the Obama presidency.

But this doesn’t have to be so. Blaming Republicans for Congressional gridlock, President Obama has not shied away from using his “privileges” as executive of the United States: from the illegal drilling moratorium after the Macondo disaster to unconstitutionally appointing members to the NLRB, Obama flexes his muscles with some regularity.

While the below suggestions would likely upset blocks of Obama’s base, his reelection should allow the president to put policy before politics, and alleviate Americans’ pain at the pump.

Approve the Keystone pipeline
If Republicans and Midwest Democrats sound like a broken record, it’s because TransCanada filed the Keystone XL pipeline paperwork over 1600 days ago. Even after Environmental Impact Statements found that the pipeline was totally safe, Obama refuses to approve the project. Apart from the immediate 20,000 jobs the $9 billion project would create, the Keystone pipeline would also be a boon to American refiners which currently import heavy crude from Venezuela.

Refining gasoline is a lot like making a fancy cocktail – it is a multistep process that requires many different ingredients. One such ingredient is heavy, dense crude – the same oil that would be transported by the Keystone pipeline or imported from Venezuela.  Not only is it cheaper to ship oil from our northern NAFTA ally – boats and the requisite insurance isn’t free – it is also safer.

Obama should approve the Keystone pipeline which will deliver 830,000 barrels of oil to refiners in Texas and Oklahoma every single day.

Suspend the Jones Act
The cheaper it is to get American oil to refiners, the cheaper manufactured gasoline will be. While pipelines represent one way for oil producers to transport oil, another means is to ship the oil by boat. Unfortunately for American consumers, an arcane union subsidy referred to as the Jones Act requires that all shippers transporting goods between two points in the United States to use vessels built in the U.S., owned by U.S. companies, and manned by American crews. This strange protectionist policy is a holdover from the 1920s and is inflating the cost of shipping oil by over 300 percent per barrel. From the WSJ:

John Demopoulos of Argus Media, which tracks pricing, estimates that foreign-flagged carriers could move oil from the Gulf Coast to the Northeast for about $1.20 a barrel, compared with $4 a barrel on U.S. ships.

Mr. Kunkel said the ships cost about $35 million to $50 million to build in Europe. But under the Jones Act, he'd need to buy American. The U.S. price: more than $100 million per ship. He shelved his business plans.

Since the Administration is dragging their feet on Keystone approval, temporarily suspending the Jones Act so oil producers can ship North Dakota oil through the great lakes, for a reasonable price, makes sense. This move would not be unprecedented – President George W. Bush waived the Jones Act immediately following Hurricane Katrina. Of course, full repeal of the Jones Act is preferable but suspension as a bridge to Keystone pipeline completion is a good place to start.   

Scrap EPA’s Tier 3 sulfur rule
Last spring the EPA delayed Tier III sulfur rules – apparently only until after the election –since on January 29, 2013, the EPA submitted the rulemaking to the Office of Management and Budget. Presumably, the EPA would not have delayed the Tier III regulation if it was something consumers wanted.

Tier III is a discretionary rule meaning that it is not mandated by the EPA. It is entirely legal and appropriate to scuttle the rulemaking, especially given that a recent analysis of the regulation could impose capital costs on the refining industry for as much as $10 billion. Refiners will not pay the cost of this regulation – consumers will in the form of higher gasoline prices. And all for little to no benefit, the prior Tier II rulemaking reduced gasoline sulfur emissions by 90 percent.

 

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ATR Launches New EPA-inspired website


Posted by Chris Prandoni on Friday, January 25th, 2013, 11:44 AM PERMALINK


Today Americans for Tax Reform launched http://epafakeidentitycreator.com/, a website which allows users to create EPA aliases, just like Lisa Jackson created the persona Richard Windsor.  

In early 2012, an EPA whistleblower told the Competitive Enterprise Institute (CEI) that Administrator Jackson was using the name alias Richard Windsor to hide communications she did not want to come to light.

After learning about the fake alias, CEI's Chris Horner filed suit with the EPA to access Jackson's Richard Windsor emails. The Department of Justice reluctantly agreed to produce 12,000 Richard Windsor emails in four 3,000 email tranches, the first of which was delivered on Monday, January 14. Although the EPA was ordered to deliver 3,000 emails, they only delivered 2,100, nearly all of which were news clippings and Google alerts.
 
Skirting or ignoring inquiries from Congressional Leaders, Energy and Commerce Chairman Rep. Fred Upton (R-Mich.), Science, Space and Technology Chairman Rep. Lamar Smith (R-Texas), and Environment and Public Works Ranking Member Sen. David Vitter (R-La.), the EPA’s reticence begs the question, “what are they hiding?”
 

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