Executive Orders Seek to Streamline Pipeline Delays, Encourage Affordable Energy
Supporters of American energy hope the executive orders that President Trump signed directing the Environmental Protection Agency to revise certain policies will prevent abuse by states like New York who have used the environmental review process to unnecessarily block pipeline projects at the request of Keep-It-In-the-Ground activists.
In a speech prior to signing the orders Trump alluded to this very issue:
“Too often badly needed energy infrastructure is being held back by special interest groups, entrenched bureaucracies and radical activists.”
IPAA Executive Vice President Lee Fuller issued the following statement in support of the orders:
“IPAA consistently has supported development of much needed infrastructure to transport America’s oil and natural gas resources to consumers. Therefore, it supports the efforts of President Trump in issuing his Executive Orders (EO) to encourage this development. In particular, IPAA supports the aspect of the EO that calls on EPA to update the interim 2010 guidance over permitting under Section 401 of the Clean Water Act (CWA). This guidance, overdue for updating, has allowed for implementation of the CWA in a manner inconsistent with the statute and to inhibit projects that are clearly in interstate commerce. IPAA is encouraged that, with the EO, the updated guidance will reinstate the cooperative federalism that allows for the distinct roles of federal and state governments in certifying federally-permitted or licensed activities. Sec. 401 governs vital stream crossing permits for interstate natural gas pipelines. IPAA believes that the updated guidance will prevent any future misuse by certain states in their reviews and unwarranted denials of Sec. 401 permits.” [emphasis added]
New York’s Rogue Pipeline Blockage
One of the orders could go a long way in addressing the pipeline shortage in the Northeast caused by New York, which is using Section 401 of the CWA to block the Constitution and Northern Access pipelines. If completed, the pipelines would carry much needed natural gas from Pennsylvania to Western New York, other areas in the Northeast and Canada.
Trump singled out the state’s actions and their consequences:
“…in New York they’re paying tremendous amounts of money more for energy to heat their homes because New York State blocked a permit to build the Constitution Pipeline.”
The White House said the order directs the EPA to issue new guidance for how to implement Section 401 to ensure interstate projects remain within the domain of the federal government and aren’t stymied by a single state.
A report released by the U.S. Chamber of Commerce’s Global Energy Institute estimates that the Constitution Pipeline would create more than 23,000 jobs and generate $930 million in tax revenue, and the Northern Access pipeline would create 10,113 jobs and generate $400 million in tax revenue.
Dennis L. Martire, Mid-Atlantic vice president and regional manager of the Laborers’ International Union of North America, praised the move to rein in rogue states:
“Too often the regulatory process at the state level is manipulated by zealots who are waging a project-by-project war against natural gas, throwing thousands of laborers out of work in the process.”
Trump signed the order one day after a group of senators introduced legislation also aimed at amending Section 401. Sen.Jim Inhofe (R-OK), a cosponsor of the bill, explained:
“When the United States leads the world in producing natural gas but states in the Northeast have to import Russian LNG, you know you have something wrong. For decades states have routinely certified pipeline and other infrastructure projects under the Clean Water Act without cause for concern, but lately we’ve seen the unfortunate trend of activist state governments blocking projects they deem politically unsavory.”
Broader New England Impacts
In addition to directing federal agencies to improve their permitting processes, Trump’s order will require the secretaries of Transportation and Energy to submit a report that assesses the delivery of natural gas and other domestic energy sources to New England, which will further expose some of the broader impacts of the pipeline blockages on the region. The Energy Information Administration has already warned:
“Energy delivery infrastructure constraints and outages can have a pronounced influence on New England’s wholesale energy prices, energy flows, and operations.”
As we have previously explained at EID, the Northeast paid some of the highest energy prices in the world this winter while the rest of the United States experienced record low electricity and natural gas costs. The artificial shortage of natural gas created by New York has resulted in unacceptable scenarios such the purchase of Russian LNG to keep the grid running.
Any action to get critical energy infrastructure built within a reasonable timeframe is in the public national interest to ensure energy security, as well as reliable and affordable energy. These executive orders should send a signal to states not to co-opt the federal permitting process to block projects for political reasons, and to return to a timely certification process. Thankfully for American consumers and workers, federal policies should soon be less amenable to state subversion.