Gas group sees lower-carbon LNG projects key for North America supply role

By Nick Loris

The Hill, Jul 7, 2022


Many progressive climate activists view the Supreme Court’s recent ruling on West Virginia vs. EPA as a major setback for climate progress. The true setback, however, is an overreliance on the executive branch to set energy and climate policy. What’s needed is congressional leadership to enable the private sector to meet the energy and environmental needs of the American people.


For most Americans, high gas prices and energy bills are on the forefront of their minds. Driven largely by higher oil prices, energy costs are up nearly 35 percent from a year ago. That squeezes the budgets for many families, particularly low-income ones. About one in six Americans struggled to pay their energy bill at least once in the past, while almost 24 percent went without paying for necessities such as food and medicine to pay an energy bill.


To be clear, the energy crisis isn’t solely the result of President Biden’s policies. The pandemic created massive energy supply and demand imbalances that caused price swings much faster than the market could respond. Further, the price premium resulting from Russian President Vladimir Putin’s invasion of Ukraine is real. But by canceling the Keystone XL pipeline, temporarily prohibiting oil and gas lease sales on federal lands and promulgating climate regulations at the Securities and Exchange Commission (SEC), Biden threw fuel on the fire rather than calling the fire department.


What’s more, the Biden administration’s actions represent a larger, systemic reason for why America’s energy and climate policy is broken. Our elected officials have delegated far too much authority to unaccountable, unelected agency officials. Major actions that affect energy investment for all types of resources and technologies have been subjected to regulatory ping-pong.


For either party, the pen and phone approach to energy and environment policy has not been terribly effective. The swings in direction of the administrative state every four or eight years keeps lawyers and lobbyists busy, but companies find it difficult to plan, invest, and build.


Not only has overreliance on the executive branch been unproductive, well-intentioned delegation of authority with relatively loose parameters and everchanging guidance has often impeded economic and environmental progress.


An overburdensome regulatory state has often worked to the detriment of energy affordability, emissions reduction and climate resiliency. Regulatory paralysis, NIMBYism (the “not in my back yard” crowd) as well as protracted lawsuits delay or outright block resource extraction, energy infrastructure and renewable energy projects. Relicensing a hydropower plant takes on average 7.6 years, according to the Department of Energy. That’s longer than it takes to receive a new hydro license or relicense a nuclear plant.


A June 2022 study in Energy Policy reviewed the project development of 53 utility-scale wind, solar and geothermal projects from 2008 to 2021. The study showed 79 percent of the projects had at least two sources of opposition and “34 [percent] faced significant delays and difficulties securing permits, 49 [percent] were cancelled permanently, and 26 [percent] resumed after being stopped for several months or years.”


Moreover, it’s challenging to adapt to changing conditions when regulators resist change. Take Offutt Air Force Base in Nebraska, for example. A report covered the flooding at the base in March 2019. Even though the base knew flooding was a risk when water came close to the base’s runway eight years earlier, “approval for the levee construction was complicated by myriad requirements from the Army Corps of Engineers that took six years to navigate.”


How do you build back better when you can’t build?


Obstacles to energy investment and development should frustrate consumers and climate activists alike. Meaningful climate action necessitates that we build cleaner and faster. Empowering innovators instead of regulators will continue to drive down costs and speed up deployment of emissions-free technologies. With most current and future emissions coming from developing countries, America’s comparative advantage should be how to best innovate and provide cleaner choices at lower prices.


Changing the status quo will take some resolve from Congress. Instead of outsourcing decisions to agencies, Congress should rediscover its own sense of agency. Modernizing permitting should maintain environmental safeguards and public participation but establish a more predictable, efficient process to manage our forests, to build a solar array and to build more climate-resilient infrastructure. Importantly, legislative reform that opens markets and modernizes antiquated regulations will provide more affordable, dependable power to families and businesses.


Reimagining energy and climate policy isn’t “anti-government” as some critics imply. Instead, it means putting less faith in regulators and more faith in innovators while ensuring that the huge sum of money the Department of Energy already invests in research, development and deployment is well spent. West Virginia vs. EPA should signal a time for Congress to reassert its authority and provide the policy foundation for innovators to meet our energy needs and mitigate the risk of global climate change.


Originally posted on The Hill.

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