The Administrative State Moves to Show Who’s Boss on Energy Policy


Francis Menton

Last Thursday, June 30, the Supreme Court issued its decision in West Virginia v. EPA, holding that, absent a further explicit statute from the Congress, the EPA did not have the authority to orchestrate its planned fundamental restructuring of the electric power generation sector of the economy. More generally, the Supreme Court stated that in cases involving “major questions,” including regulations that affect large portions of the economy, the government must demonstrate “clear congressional authorization” to support a sweeping effort to regulate.

Do you think that such a Supreme Court decision might cause the various regulatory bureaucracies to slow down and reconsider a little before plowing ahead with other dubious plans for fundamental economic restructurings? That’s not how these bureaucracies work. And such is most particularly the case with regard to regulators of the energy sector, sometimes known as “climate change” arena, where the bureaucrats are burning with a righteous religious fervor that they believe entitles them to cast the evil sinners into the fires of hell.

And thus, contemporaneous with the Supreme Court’s decision, several agencies promptly doubled down on efforts to strangle the oil and gas industries with regulatory restrictions, essentially daring the courts or anyone else to stop them. Thousands of pages of statutes give them thousands of arguments to claim they have the “clear congressional authorization,” any one of which arguments might stick. They are now out to show who’s boss.

EPA Administrator Michael Regan wasted no time in getting a statement out on the afternoon of June 30. Excerpt:

[W]e are committed to using the full scope of EPA’s authorities to protect communities and reduce the pollution that is driving climate change. . . . EPA will move forward with lawfully setting and implementing environmental standards that meet our obligation to protect all people and all communities from environmental harm.

In other words, we will just have to find other ways to implement the restrictions that we want to implement. The very next day, July 1, David Blackmon at Forbes reported that “EPA Targets Permian Basin, Widening Biden’s War On Oil And Gas.” The Permian Basin is currently the most productive oil and gas region in the United States, providing about 40% of the oil production and 15% of the gas of the entire country. The Permian Basin is also the site of about 40% of the nation’s active drilling rigs. And so it seems that EPA is gearing up to declare the Permian Basin a so-called “non-attainment area” with respect to ozone. Blackmon:

[T]he Environmental Protection Agency (EPA) announced [this week that] it may soon issue a ruling declaring that vast parts of the Permian Basin are in “non-attainment” status under the agency’s ozone regulations. If such a declaration is made, it will constitute a direct governmental assault on what is by far America’s most active and productive oil-producing region and its second most-productive natural gas area.

What would be the effect of such a declaration on current and future U.S. domestic oil and gas production? Blackmon again:

Placing the Permian Basin in non-attainment status would force a significant reduction in the region’s rig count, severely limiting the domestic industry’s efforts to increase U.S. oil production at a time when the global oil market is already severely under-supplied.

Texas Governor Greg Abbott promptly called on the Biden Administration to back off, saying that an EPA “non-attainment declaration “could interfere in the production of oil in Texas which could lead to skyrocketing prices at the pump by reducing production, increase the cost of that production, or do both.” But Blackmon notes that the plan comes from an office headed by a Biden-appointed anti-fossil-fuel activist, and thus is likely a core element of the administration’s program:

Mr. Biden appointed Joe Goffman, another of the many anti-fossil fuel activists that now hold senior posts at his various agencies, to head up EPA’s Office of Air and Radiation on an acting basis. That appointment might have been made with this specific policy action in mind.

Meanwhile, over at the Interior Department, July 1 was also the day for issuance of a statutorily-mandated five-year off-shore oil and gas leasing plan. Nicholas Groom at Reuters has a summary here. The bottom line is, we’re going to completely shut down leasing off both the Atlantic and Pacific coasts, but maybe we’ll allow a little in the Gulf of Mexico or the Cook Inlet (Alaska). The number of auctions over the five-year period will be in the range of “zero to eleven,” and supposedly we’ll take public input as to which way to go. But Interior Secretary Deb Haaland in a statement left no doubt as to where she wants and expects this to come out:

“From Day One, President Biden and I have made clear our commitment to transition to a clean energy economy,” Haaland said in a statement. “Today, we put forward an opportunity for the American people to consider and provide input on the future of offshore oil and gas leasing. The time for the public to weigh in on our future is now.”

There is a 90 day period for public comment. You can be sure that environmental activist groups will flood the zone with thousands of comments to support the approach of the “zero” option of ceasing all further off-shore leases.

Other agencies were eerily silent in the aftermath of the Supreme Court’s June 30 decision. Notable among those were the SEC and the Federal Reserve, both of which have recently ventured into adding “climate change” to their missions with only the most questionable of statutory support. Neither has given any indication of an intention to slow down.

And then on July 2, President Biden issued his now-famous tweet blaming the rising price of gas at the pump on gas station owners:

My message to the companies running gas stations and setting prices at the pump is simple: this is a time of war and global peril. Bring down the price you are charging at the pump to reflect the cost you’re paying for the product. And do it now.

A bureaucracy-wide campaign is ongoing under this guy’s direction to suppress oil and gas production in any way they can think of, and yet he has the gall to blame high prices on “companies running gas stations,” the majority of which are small independent businesses.

Read the full article here.

via Watts Up With That?

July 9, 2022 at 04:17PM

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