Sen. Cruz and Rep. Bridenstine Introduce American Energy Renaissance Act

You know or suspect that the administration’s war on carbon energy is either a costly exercise in futility or a humanitarian disaster, depending on how aggressively they pursue it. You may also know or suspect that “all of the above” is Washington-speak for dispensing more corporate welfare to under-performing energy companies.

So what would a genuine pro-market energy agenda would look like? Sen. Ted Cruz (R-Texas) and Rep. John Bridenstine (R-Okla.) put it all together in a bill titled the American Energy Renaissance Act. The bill would “remove federal impediments to energy exploration, development, and trade.” It would increase U.S. GDP, economic opportunity, and geopolitical influence by reducing federal interference with market-driven energy investment.

Sen. Cruz’s press release presents the two lawmakers’ energy policy perspective and summarizes the bill’s key provisions. The policy summary is reproduced below.

The American Energy Renaissance Act proposes the following:

• Leave regulation of hydraulic fracturing in state hands. Hydraulic fracturing is driving the American Energy Renaissance. States have proven they can oversee hydraulic fracturing in a responsible, safe manner, and they should be allowed to continue. The American Energy Renaissance cannot thrive if the federal government disrupts this effective framework and impedes the jobs and economic growth hydraulic fracturing is already providing.
•  Streamline the permitting process for upgrading existing and building new refineries. The operating capacity of U.S. refineries has remained essentially stagnant for three decades. In order for the American Energy Renaissance to reach its full potential, barriers must be removed from expanding or constructing new refineries in the United States and the private sector jobs they will create.
• Phase out and repeal the Renewable Fuel Standard (RFS) over five years. The RFS has proven unworkable and costly. Its mandate that an increasing percentage of renewable biofuels be blended into gasoline and diesel each year ignores the reality there are insufficient amounts of some biofuels to meet the standard. It imposes significant costs, and offers few, if any, benefits. The RFS should be phased out so producers and refiners can focus on maximizing domestic resource potential.
• Immediately approve and allow the private sector to build the Keystone pipeline. According to the U.S. State Department, constructing the Keystone XL pipeline could result in 42,000 jobs. Keystone has undergone five environmental reviews since its initial application in 2008, and none has found a significant negative impact on the environment. President Obama’s former Energy Secretary admitted that the decision as whether to approve the Keystone XL oil pipeline is a political one, and not a decision founded in science.
  • Remove barriers to developing and approving additional national pipelines and cross-border energy infrastructure. The Keystone saga imposed by the federal government demonstrates the need to reform the process of approving oil and natural gas pipelines, as well as electric transmission lines, between the United States, Canada, and Mexico.
• Exclude greenhouse gases from regulation by the EPA and other federal agencies. Proposals to regulate greenhouse gases are very expensive and threaten hundreds of thousands of jobs. The authority to regulate such gases should only occur with explicit authority from Congress.
• Stop certain EPA regulations that will adversely impact coal and electric power plants. In 2008, President Obama promised to bankrupt coal. As of October 2014, there were already 381 coal units closed or closing in 36 states because of EPA policies. These 381 closures amount to a total of more than 60,100 megawatts of electricity generation no longer being available. Job losses as a result of coal units being affected by EPA regulations could amount to more than 50,000 direct jobs in the coal, utility, and rail industries, and an indirect job loss figure exceeding 250,000.
• Require Congress to approve and the President to sign EPA regulations that will have a negative job impact, rather than allowing them to hide behind bureaucrats who are assumed to be responsible for them now. Certain planned and proposed EPA regulations could cost more than 2 million jobs. Increasing regulatory restrictions more broadly could cost nearly 2.8 million jobs over the next decade.
• Expand energy development on federal lands by providing states the option of leasing, permitting and regulating energy resources (oil and gas, wind and solar) on federal lands within their borders. Onshore and offshore federal land lands have about 43 percent of America’s proven oil reserves and 25 percent of natural gas reserves, but not all of the land is available for energy development. Leasing and producing oil and natural gas on federal land could create more than 1 million jobs.
  • For those states opting not to self-regulate, federal leasing, permitting, and regulating must be reformed by:
    • Streamlining permitting and expanding development on federal lands by requiring decisions regarding drilling permit applications to be made within 30 days (which can be extended), requiring an explanation for any denial, and deeming applications to be approved if no decision has been made within 60 days, unless there are existing incomplete environmental reviews.
    • Improving certainty in the leasing and development process by instituting a presumption that certain land will be leased and by prohibiting the government from withdrawing a lease for any energy project, unless there is a violation of terms of the lease.
• Expand energy development in the National Petroleum Reserve in Alaska and on Indian Lands. The mean estimate for conventional oil in the National Petroleum Reserve in Alaska is 895 million barrels of oil and 52.8 trillion cubic feet of gas. West of the Mississippi River, Indian reservations contain almost 30 percent of the nation’s coal reserves, 50 percent of potential uranium reserves, and 20 percent of known oil and gas reserves.
• Open up the Coastal Plain of Alaska (ANWR) for development. ANWR consists of 19 million acres in northeast Alaska. Its 1.5-million-acre Coastal Plain is viewed as a promising onshore oil prospect with potentially 7 billion barrels of technically recoverable oil.
• Expand the offshore areas of the Outer Continental Shelf (OSC) available for development. Despite the potential for significant oil and gas development off the coasts of the United States, the Obama Administration has severely limited access to such resources by essentially prohibiting energy exploration and development off the Atlantic and Pacific coasts.
• Streamline the permitting process for additional offshore exploration. Regulatory barriers to obtain leases and permits to explore and develop offshore areas of the Outer Continental Shelf should be removed by requiring lease sales within 180 days of enactment of the legislation and every 270 days thereafter, and requiring approval or disapproval of drilling permits no later than 20 days after an application is submitted.
• Expand LNG exports by facilitating permits. As of March 3, 2015, the Dept. of Energy had approved only nine export permits to non-Free Trade Agreement countries. More than twenty applications are currently pending.
• End the crude oil export ban. Last year, U.S. crude oil production increased 27 percent but many American refineries cannot handle the additional crude for technical and capacity reasons. The United States is missing out on export opportunities that could produce good paying private sector jobs in the United States.
• Prevent excessively broad environmental review of coal export terminals. As the EPA makes it harder to use coal as a source of energy for electricity in the United States, there are opportunities to export coal to other nations. Removing excessive environmental reviews can help promote coal exports that will help keep coal jobs in the United States.
• Direct all additional revenues generated by exploration and drilling on federal lands (excluding the share allocated to the states) exclusively to national debt reduction. The U.S. national debt was approximately $18.2 trillion in December 2014. As we free the development of U.S. natural resources to spur economic and job growth, we should prevent revenues from being used to further expand government programs and instead use it to free taxpayers from the debt burden that hampers the nation’s incredible potential.

My only quibble — and it’s with the talking points, not the bill – is the lawmakers’ contention that current policies significantly constrain U.S. petroleum refining capacity. A recent report by the American Fuel and Petrochemical Manufacturers Association suggests that lack of delivery infrastructure, not refining capacity, which continues to expand, is the major bottleneck to increased production of petroleum products today.