CONTACT: LAURA HENDERSON

AUGUST 25, 2010

202.621.2951

Spill Commission has Opportunity to “Make it Right”
Interior Department’s Gross Distortion of Facts Requires the Commission to Set the Record Straight

WASHINGTON – In an attempt to insert facts into the debate about the United States’ offshore drilling policies, the Institute for Energy Research (IER) today prepared testimony for the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling’s public hearing in Washington, D.C. IER President Thomas J. Pyle released the following statement about his testimony.

“The energy debates in Washington are riddled with misinformation at every level. Contrary to President Obama’s rhetoric, this nation is blessed with plentiful energy resources. In spite of Interior Secretary Salazar’s claims, the previous Administration did not implement a drill “anywhere, anyhow” policy. As long as President Obama and Secretary Salazar continue to do everything within their power to perpetuate these and other fallacies, our nation will continue to unnecessarily rely on unstable foreign regimes to meet our energy needs. The offshore moratorium is an affront to the men and women who used to wake up every morning and produce the much-needed energy resources we need to fuel our cars and cool our homes.

“I urge the Spill Commission to use today’s hearing as an opportunity to set the record straight. The Administration’s moratorium on deepwater drilling, and its de facto moratorium on shallow water drilling, is killing the already burdened Gulf Coast economy. President Obama, please let a serious crisis go to waste and put the American people back to work safely producing the energy that this nation so desperately needs to power our economy out of the wilderness.”

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Pyle: One job killed as a result of reactionary government policy is one job too many

WASHINGTON – In response to news reports detailing the Administration’s misguided approach to the economic and employment impacts its drilling moratorium has had on Gulf Coast communities, Institute for Energy Research President Thomas J. Pyle released the following statement.

“When we first learned that the Administration would halt all deepwater exploration in a misguided attempt to respond to the oil spill, we had to assume that they just didn’t understand the importance of the industry and the thousands of jobs it provides to the communities along the Gulf Coast. After all, what government would knowingly and purposely put thousands of its citizens out of work? But now we learn that it wasn’t a lack of knowledge about the consequences that led to the unwarranted policy, it was an outright lack of concern for the livelihoods of these hardworking Americans.

“Moreover, in addition to this premeditated destruction of jobs in the deepwater, the Administration is starving the workers in the shallower waters of the Gulf by slow-walking the permit process. It now appears that even if the Administration lifts the moratorium, their deliberate stonewalling in the shallow waters of the Gulf will kill any hope of jobs and American energy production.

“While one could reasonably assume that this should be self-evident, it appears the American people need to send a message to the President, his Interior Secretary Salazar, and his offshore regulator, Michael Bromwich: one job killed as a result of a reactionary government policy is one job too many. While you write memos and hold hearings, Gulf Coast residents are suffering. And they don’t want handouts, they want their jobs back. Now is the time to end this moratorium and let these men and women to get back to work providing the American people with affordable, reliable, domestic energy.”

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“The Administration continues its assault on US energy production, this time trying to convince us that a shortage of paperwork led to the Gulf spill.  No amount of Government Green Tape would have stopped the spill, and in fact, Americans saw that it actually made cleanup harder.

“The Administration continues to ship our energy security and our jobs overseas, and all this is just another example of their energy extremism.  And with this Administration, extremism in defense of dogma is putting the American economy in a vise.”

FOR IMMEDIATE RELEASE:
August 17, 2010
CONTACT:
Laura Henderson, 202.621.2951

“Over the last several years, Congress has repackaged, renamed and rebranded carbon capping legislation. Executives, lawmakers and lobbyists spent untold hours crafting backroom deals and special interest carve outs. Anti-energy activists protested, threatened and twisted arms. But still, the American people saw through their efforts and fought back. And despite the extreme makeovers–from cap-and-trade to carbon pricing to carbon caps—the national energy tax is finally dead…for now.

“Today’s announcement is proof positive that Congress does itself no favors if it underestimates the American people. We won’t be fooled by Capitol Hill spin or marketing schemes—especially when it comes to our families’ budgets, jobs or the health of the economy. Across the country, as Americans made their voices heard, Congress finally listened.”

“This moratorium is nothing but a kick in the face to the hardworking men and women who have lost—and will continue to lose—their jobs as a result of this Administration’s politically motivated actions. A federal court and an appeals court ruled the first moratorium was illegal, in large part because the Administration overrode the advice of engineers and experts with a political decision. In addition to politicizing science, the Obama Administration is putting the wishes of anti-energy special interest groups ahead of the American people. Americans will now undoubtedly face higher prices at the pump, more job losses and even more uncertainty each day energy exploration is banned in the Gulf of Mexico.

“In addition, this new moratorium will force Americans to purchase more oil from unfriendly nations—compounding an economic disaster with potential national security concerns—despite the fact that America has a plentiful supply of job-creating, energy stimulating energy resources right here at home. Unfortunately, these resources are now off limits as a result of this politically driven ban on domestic energy exploration. ”

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FOR IMMEDIATE RELEASE:
July 12, 2010
CONTACT:
Laura Henderson, 202.621.2951

IER President: “The American people are smarter than the political class in Washington think – they see this tragic accident playing out in the Gulf, and are overwhelmingly opposed to the Obama Administration’s plan to capitalize on it politically by pushing a national energy tax.”

Washington, DC – The Administration’s ongoing effort to use the unprecedented tragedy in the Gulf as “an opportunity” to restrict domestic energy production and push a national energy tax was dealt a major blow today, as new polling data released by the Institute for Energy Research (IER) finds that a vast majority of Americans oppose the underlying agenda that is currently costing thousands of jobs in the Gulf, and soon could be costing millions more across the country.

Some top-line findings in the attached report show that 70 percent of Americans oppose a new tax to address global warming. While consistent with historical trends, this number is somewhat surprising based given the president’s recent investment of time and political capital in support of “pricing carbon” in the wake of the BP oil spill. The same percentage of respondents (70%) said that such a tax would also have no discernable effect on global warming.

In contrast, voters are very much more interested in creating jobs (38%) and reining in profligate government spending (31%) – which ranked high above new regulations for the oil industry (4%) or global warming (3%).  Nearly every (99%) American is somewhat familiar with the BP oil spill.

“The American people are smarter than the political class in Washington think – they see this tragic accident playing out in the Gulf, and are overwhelmingly opposed to the Obama Administration’s plan to capitalize on it politically by pushing a national energy tax, ” said Thomas J. Pyle, president of the Institute for Energy Research. “And while some in Washington are focused on ways to increase tax revenue on the backs of hardworking Americans, this poll shows once again the massive disconnect between Pennsylvania Avenue in Washington, and Main Streets all across America.

Pyle continued, “The American people want Washington to focus on cleaning up the gulf, creating an environment that puts folks back to work and reducing our federal deficit. That’s it. There is no interest in pushing through a radical agenda in the name of global warming and there is no interest on the part of consumers to pay more at the pump for a gallon of gasoline.  It’s time for Washington, DC to get serious about its priorities, and start getting back in line with those of the American people.”

A majority of respondents believe things in this country are on the wrong track (59% wrong track, 34% right track) while two-thirds (68%) disapprove of the job being done by Congress. A slight majority (53%) approve of President Obama’s job performance overall.

To view the complete survey, click HERE.

NOTE: This survey of 1005 respondents was conducted between June 17 – June 22, 2010 and has a margin of error of +/- 3.1 percent with a confidence level of 95 percent.

To speak with Mark Blankenship, the pollster that conducted this survey, please contact Patrick Creighton at pcreighton@ierdc.org or 202.621.2947.

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In an effort to better understand the broad consequences of the Kerry-Lieberman American Power Act on the U.S. economy, the Institute for Energy Research commissioned Chamberlain Economics, L.L.C to perform an economic and distributional analysis of cap-and-trade portion of the proposal.

The following represent some of the study’s key findings:

• The American Power Act would reduce U.S. employment by roughly 522,000 jobs in 2015, rising to over 5.1 million jobs by 2050.
• Households would face a gross annual burden of $125.9 billion per year or $1,042 per household, with costs disproportionately borne by low-income households.
• On a net basis, the top income quintile will benefit financially, redistributing to these households roughly $12.3 billion per year from the bottom 80 percent of earners.
• Households over age 75 bear the largest burden at 2.3 percent of income, followed by households aged 65-74 and under age 25 at 2.1 percent. By contrast, the nation’s highest-earning households between age 45 and 54 years would bear the smallest percentage burden of just 1.5 percent.
• Contrary to the legislation’s stated goal of reducing price volatility by excluding petroleum refiners from quarterly auctions, the Kerry-Lieberman bill is likely to significantly increase allowance price volatility from quarter to quarter, compared to an ordinary auction in which all covered industries bid for allowances.

At its core, the report examines the impacts that the American Power Act would have on the U.S. economy, the method by which emission allowances are distributed to corporations and the distributional cost of the bill on households by income, age group, region and family type. The authors also explore two specific propositions: the first, the potential for shareholders, and not consumers, to benefit from the distribution of free emission allowances; and, second, the expected consequences of the bill’s creation of a separate pool of allowances for petroleum refiners, thus adding to the price volatility of those allowances.  Both conclusions are contrary to Kerry and Lieberman’s stated intent of the legislation.

“One of the most basic criticisms of climate policy is its regressive impact on low-income households,” said Andrew Chamberlain, a co-author of the report and chief economist at Chamberlain Economics L.L.C. “The Kerry-Lieberman bill holds true to this by distributing most allowances freely to companies and government agencies for the purpose of securing political support for the bill’s passage. Aside from the distributional impact of the bill, Kerry-Lieberman suffers from serious flaws in its policy design. The bill’s exclusion of petroleum refiners from quarterly auctions—a provision designed to shield refiners from price volatility—is instead likely to have the opposite effect, increasing volatility faced by covered entities with no obvious economic or environmental benefit.”

“These numbers speak for themselves: 522,000 lost jobs in 2015, up to 5.1 million in 2050,” said Thomas J. Pyle, president of the Institute for Energy Research. “Promoting a policy that guarantees job loss and disproportionately impacts older Americans and those earning the least will have devastating consequences. Senators Graham, Lieberman and Kerry stated from the very beginning that their goal was to bring a coalition of big oil executives, Wall Street titans and environmental groups to the table – and that’s exactly what they did. Unfortunately, as this analysis shows, the one person that wasn’t at the table ends up footing the bill: the American consumer.”

To view the entire analysis, click here.

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“This moratorium, wisely overturned, was never about safety – it was about politics, and politics at its worst. And while the Obama Administration has chosen, once again, to be directed by anti-energy special interests and appeal this decision, today’s ruling is at least a step in the right direction.

“The Administration’s decision to appeal this order means that today’s ruling will amount to little more than a morale boost to the hardworking men and women along the Gulf Coast who received pink slips as a result of this politically motivated drilling moratorium.”

Following are selected excerpts of Judge Feldman’s opinion:

If some drilling equipment parts are flawed, is it rational to say all are? Are all airplanes a danger because one was? All oil tankers like Exxon Valdez? All trains? All mines? That sort of thinking seems heavy handed, and rather overbearing. (pg. 19)

Nonetheless, the Secretary’s determination that a six-month moratorium on issuance of new permits and on drilling by the thirty-three rigs is necessary does not seem to be fact-specific and refuses to take into measure the safety records of those others in the Gulf. There is no evidence presented indicating that the Secretary balanced the concern for environmental safety with the policy of making leases available for development. There is no suggestion that the Secretary considered any alternatives… (pgs. 19-20)

An invalid agency decision to suspend drilling of wells in depths of over 500 feet simply cannot justify the immeasurable effect on the plaintiffs, the local economy, the Gulf region, and the critical present-day aspect of the availability of domestic energy in this country. (pg. 22)

More on the deepwater drilling ban:

• Gulf Oil Spill Moratorium Decision: Hornbeck v. Salazar CA 10-1663
• Deepwater-Gate: Administration Modifies “Peer-Reviewed” Report After it was Reviewed by Scientists
• IER Press Release: Mr. President, Focus on Capping, Containing and Cleaning Up the Oil – Not Politics

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Washington, DC – In response to President Obama’s address to the nation, Thomas J. Pyle, president of the Institute for Energy Research issued the following statement:

“There is not one thing in the President’s stated plans from the address this evening that will cap, contain or expedite the cleanup of oil along the Gulf Coast. Unfortunately, this President and his allies on Capitol Hill are using a rare and tragic accident as a means to advance their political and anti-energy agenda on behalf of their special interest friends.

“Rushing to place blame, point fingers and threaten new regulations is not constructive – regardless of the crisis. It is also not new or original. Following the Exxon-Valdez tanker accident in 1989, Congress responded with the Oil Pollution Act. And while the outrage was warranted then, as it is now, Congress deliberated for fifteen months on that piece of legislation. In fact, OPA 1990 was actually introduced prior to the accident in Prince William Sound.

“Using this accident to advance a national energy tax in the form of cap-and-trade – as President Obama made clear is his intent – shows that this administration is living up to the motto of White House Chief of Staff Rahm Emanuel, “never allow a crisis to go to waste… they are opportunities to do big things.” We know from day one that this Administration has declared war on affordable energy, particularly coal and oil. That they have chosen this incident to halt energy production in this country and take yet another run at a national energy tax is unfortunate and politics at its worst.”

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FOR IMMEDIATE RELEASE:
June 15, 2010
CONTACT:
Patrick Creighton: 202.621.2947
Laura Henderson: 202.621.2951

And while proponents of this legislation tout the “minimal costs” such a policy would have on household budgets, it’s important to note that the EPA has a history of systematically underestimating the costs of cap-and-trade legislation. Today’s analysis is no different.

Thomas J. Pyle, president of the Institute for Energy Research issued this statement on the economic analysis released today on the American Power Act:

“The American people overwhelming oppose an increase in the gas tax – yet, it’s included in this legislation. Cap-and-trade, which will cause electricity prices to “necessarily skyrocket,” has also been soundly rejected by the American people – yet, it is also included in this proposal. We can argue about how high the costs of this legislation will be, but no one denies that the consumer will end up with less money in their pockets after this legislation is signed into law.

“Bottom line: the more expensive it is to do business in this country, the less productive and competitive our economy will be. Mandating the use of expensive energy and artificially increasing the price of coal, oil and natural gas will only further harm our already struggling economy. It is clear that the American Power Act will do just that, so one has to ask: What are policymakers and Wall Street trying to accomplish with this legislation?”

Note: EPA’s analysis is not a cost-benefit analysis. According to EPA models, the global temperature savings of the Kerry-Lieberman bill is astoundingly small—0.043°C (0.077°F) by 2050 and 0.111°C (0.200°F) by 2100. In other words, by century’s end, reducing U.S. greenhouse gas emissions by 83% will only result in global temperatures being one-fifth of one degree Fahrenheit less than they would otherwise be. That is a scientifically meaningless reduction.