House Republicans Outline Proposal to Reduce Energy Regulations

Today, a task force of House Republicans released a regulatory policy agenda outlining what policies Congress should enact to help jumpstart the economy.

Entitled “A Better Way,” this task force agenda offers significant policy proposals that would improve our economy by empowering businesses to flourish and create jobs. But good ideas are not enough. Congress must take legitimate action to pass legislation.

Heritage Foundation Herbert and Joyce Morgan Fellow in energy and environmental policy, Nick Loris, takes an in-depth look at the energy regulations section of “A Better Way”:  

A key component of Ryan’s reform agenda is that affordable, reliable energy matters. And as the report highlights, in almost every step of the process, the federal government is standing in the way.

From resource extraction and transportation to controlling where a company can actually sell its energy, the federal government is obstructing free enterprise. Federal ownership keeps coal, oil, and natural gas in the ground and keeps people out of work. Overbearing regulations, such as the Obama administration’s global warming agenda, will shutter coal-fired power plants for little to no climate benefit.

Top-down government decisions that have no legitimate economic or environmental rationale, such as preventing the construction of the Keystone XL pipeline or where companies can well liquefied natural gas, control and distort energy markets. Borders shouldn’t prevent producers from selling their products to willing customers nor force consumers to pay artificially high prices, but the government is keen to restrict energy exports or slap tariffs on solar imports.

When the government obstructs energy production and the movement of energy and energy technology, American families and businesses are the ones who pay the price. A higher price than they otherwise should. Ryan’s regulatory reform agenda emphasizes the benefits reaped by all Americans as a result of energy free enterprise. Drivers are saving money at the pump but also through lower prices wherever they shop. Businesses are locating to the U.S. and citing the fracking boom as a reason why.

These developments are happening in spite of the federal government, certainly not because of it. The United States has an abundance of conventional resources like coal, oil, and natural gas but also uranium for nuclear power. But the federal government prohibits resource development in many parts of the country, including off the coasts of America’s states. Opening access would give companies more opportunity to develop America’s energy resources, be they conventional or unconventional, such as wind or solar.

When the government isn’t outright blocking energy extraction, it is virtually grinding it to a halt. As the report mentions, “On average, it currently takes the BLM [Bureau of Land Management] 227 days to approve or deny a permit to drill, while it takes states on average 33 days.”

Over the last few years, federal environmental regulations have become increasingly overbearing, with little to no benefit to show for it. Regulatory agencies commonly underestimate or ignore costs, exaggerate environmental benefits, and push constitutional boundaries.

A conservative energy agenda doesn’t mean freedom for businesses to pollute but recognizes that many of the federal government’s major environmental regulations are outdated and, increasingly, counterproductive—even to the point of stifling environmental improvements. For instance, a business may be reluctant to invest in a new technology or to upgrade a power plant to yield better environmental outcomes simply because of all the daunting regulatory obstacles to getting such a project underway.

As the Ryan agenda discusses, proper reform would not only eliminate burdensome federal regulations but also empower states to regulate energy and environmental activities without federal interference. State and local governments, working with private individuals, respond better to the unique interests and concerns of their communities.

One area of energy policy that deserves more discussion is federal interventionism by way of taxpayer-funded subsidies. Corporate welfare creates dependence on the taxpayer and reduces the incentive to innovate to be cost-competitive with other energy technologies. True economic reform should not pick winners and losers but instead allow natural market forces to drive technological development and prices absent government intervention. The federal government’s role should be limited to the basic functions of protecting property rights and enforcing the rule of law.

As the Ryan economic agenda outlines on energy, policies that operate under economic freedom will expand access to energy, stimulate economic growth, and improve the environment. Eliminating cronyism must also be a staple of any energy policy reform.

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