We need tough questions on climate change

Obama’s climate agenda can be broken down into three parts: restricting oil and natural gas drilling on federal lands, imposing costly emission regulations to bankrupt coal-fired power plants, and forcing Americans to use more expensive electricity by socializing energy transmission costs. The administration is imposing each of these policies by regulatory fiat, without either the consent of Congress or the American people.

Since taking office in 2009, the Obama administration has pursued a deliberate policy of slow-walking drilling permits on federal lands. It takes more than 200 days, on average, for Obama’s Interior Department to approve a permit to drill for oil and natural gas on federal lands. In contrast, it takes between 20 and 30 days for North Dakota to approve similar permits to drill on state lands, and just 5 days to get a permit to drill in Texas—two days with expedited approval.

The results speak for themselves. Technological advances in hydraulic fracturing and horizontal drilling have unlocked previously inaccessible energy resources, leading to the greatest domestic energy boom in U.S. history. But due to federal rules, this boom is not occurring on federal lands, but instead on state and private lands. From 2007 to 2012, oil production fell 4 percent and natural gas production fell 33 percent on federal lands. Over the same period, oil production on state and private lands grew by 35 percent and natural gas production increased by 40 percent. The shale boom is thriving in the United States because the government has not been able to stop it on private and state lands. 

Restricting domestic energy development is just the first step in Obama’s climate agenda. The Environmental Protection Agency (EPA) is gearing up to regulate coal-fired power plants into bankruptcy. EPA’s proposed emissions standards for new power plants, which are set to be released this week, will require coal plants to “capture” most of their emissions with technology that is not yet commercially available. Barclays estimates that 60 to 90 gigawatts of coal-fired electrical capacity are set to retire due to EPA’s upcoming emissions rule—that could amount to a full quarter of U.S. coal-fired generating capacity.

To justify its costly emission rules, the Obama administration created an intentionally vague term: the “social cost of carbon” (SCC). The government invented the phrase to represent what it alleges are monetary damages associated with minute increases in carbon emissions each year, and it theoretically takes into account the value of damages avoided for a small emission reduction.

The SCC is the administration’s only economic defense for implementing otherwise expensive regulations.  If they make their imaginary number high enough, any costly regulation looks great on paper. But in practice, the SCC is not precise as government officials claim. According to M.I.T. economist Robert Pindyck, the SCC “suggests a level of knowledge and precision that is nonexistent, and allows the modeler to obtain almost any desired result because key inputs can be chosen arbitrarily.”

Finally, Obama is trying to force consumers to use more expensive electricity by socializing energy transmission costs at the expense of traditional sources and American consumers. Obama’s choice to head the Federal Energy Regulatory Commission (FERC), Ron Binz, is an environmental sectarian who believes that natural gas is a “dead end.” If confirmed as FERC chairman, Binz will be in charge of the independent commission responsible for regulating interstate electricity transmission. This will put Binz in a unique position to require integration of more wind and solar into the electric grid. Since wind and solar are more expensive and often located in more remote areas than coal and natural gas, Binz will just spread the costs around to all energy consumers. This will undoubtedly result in higher energy prices for all of us.

If Obama wants Americans to support his climate change agenda, one would think that his administration would welcome the opportunity to share with the public each agency’s ongoing activities related to climate change. Yet only two out of thirteen top administration officials—Energy Secretary Ernest Moniz and EPA Administrator Gina McCarthy—accepted Congress’ invitation to testify this week, which begs the question -- just what are they afraid of?

Despite indisputable evidence that the domestic energy boom on state and private is creating jobs and economic growth faster than any government program, the administration continues to throw support behind costly regulatory schemes. Requiring massive tax and consumer-funded “solutions” only delays our nation’s economic recovery. The administration talks a lot about “clean energy,” but is using dirty tricks to shove skyrocketing energy prices down Americans’ throats.  Let’s hope that Congress can get them to come clean for the benefit of the nation.

Pyle is the president of the American Energy Alliance, a right-leaning think tank.