Energy policy gets a fresh start
Days of EPA’s overreach coming to an end
A cornerstone of the Obama administration’s energy policy was a very open war on fossil fuels. Coal was the most prominent target, but oil and natural gas were not far behind. While taking credit for declining oil and gas prices largely driven by increased supply resulting from hydraulic fracturing (“fracking”) and directional drilling, the administration did all in its power to hamstring these methods of extracting oil and gas. Its instrument of choice was the Environmental Protection Agency (EPA), which used rules of questionable legality to burden energy producers. The Obama administration also opposed the Keystone XL pipeline intended to transport oil from Canadian oil sands to refineries on the Gulf Coast as well as the Dakota Access Pipeline.
Things have certainly changed under President Trump. Shortly after his inauguration, the new president signed executive orders aimed at reviving both pipelines and expediting environmental reviews of other infrastructure projects. Claiming that “the regulatory process in this country has become a tangled-up mess,” he criticized the “incredibly cumbersome, long, horrible permitting process” for oil and gas.
The Obama administration’s justification for rejecting the Keystone XL pipeline was a masterpiece of dissembling and obfuscation. According to the administration, the decision was driven primarily by concerns about “global warming.” The administration also downplayed the number of jobs that Keystone would create.
These justifications for rejecting Keystone help to explain Trump’s electoral victory in 2016. The Democratic Party once claimed to be the party of the working class. Unions have traditionally been the party’s most important constituency. But with its Keystone decision, the Obama administration made it clear that the Democratic Party put the concerns of bi-coastal “environmentalists” over the interests of workers, many of whom defected to Trump, helping him to win such reliably Democratic states as Pennsylvania and even Michigan.
Perhaps even more significantly, President Trump nominated — and the Senate confirmed — a prominent critic of the EPA, Scott Pruitt, to head the agency. During the Obama presidency, no federal agency more clearly represented executive overreach than the EPA. When President Obama was unable to get his climatechange agenda through a Democratic Congress, he ordered the EPA to impose it on the 50 states by executive regulatory decree.
The bureaucrats of the EPA happily complied, radically reinterpreting the law and imposing on U.S. energy producers an abusive and extremist “green” agenda that lacked any sound statutory basis. The result: bureaucratic monstrosities such as the Clean Power Plan — essentially a mandate to put the coal industry out of business — and the “carbon endangerment rule.” As Oklahoma’s attorney general, Pruitt came to prominence by suing to block many of the EPA’s major environmental rules and as EPA administrator he is likely to reduce much of this lawless agency’s authority.
These developments are good news for Americans. Obama’s war on fossil fuels was in fact a war against American citizens, especially the poor, who spend a larger proportion of their income on basic expenses such as energy and food — the price of which is affected by the cost of energy. The Obama administration sought to increase the cost of energy produced by fossil fuels while subsidizing “green” energy sources such as wind and solar. The Obama approach constituted a transfer of wealth from poor and middle class consumers to wealthier purveyors of green energy, the very essence of crony capitalism.
Human life is all about trade-offs. Economic prosperity is a good. A clean environment is good. The Obama administration deferred to those who would assign an infinite value to the environment at the cost of economic prosperity. Thus the overreach of the EPA and the rejection of the Keystone XL pipeline. The incoming Trump administration appears to seek a balance between a clean environment and a prosperous American people. In the real world, this is the best possible outcome.