News of the Day:
Breaking Down Bipartisan Efforts on Tariffs, Federal Land Leasing
Tim Tarpley, SVP Government Affairs, Energy Workforce and Technology Council
The Senate Energy & Natural Resources Committee held a hearing April 27 examining energy development on federal lands. The hearing focused on the status of the Department of Interior’s current moratorium onshore oil and gas leasing program. The hearing featured testimony from Nada Culver, Deputy Director of Policy and Programs at the U.S. Bureau of Land Management; Wyoming Governor Mark Gordon; Brian Vallo, Governor of the Pueblo of Acoma; Vicki Hollub, President and Chief Executive Officer of Occidental Petroleum; and Kathleen Sgamma, President of the Western Energy Alliance.
Western Energy Alliance partners with the Council on the federal lands issue, and Sgamma used her testimony to discuss the economic and employment implications of continuing the federal ban.
Witnesses on both the majority and minority sides expressed concern with maintaining a long-term leasing ban, including witnesses invited by Sen. Joe Manchin (D-WV) who leads the panel for the majority.
In his opening statement, ranking member Sen. John Barrasso (R-WY) highlighted the huge economic benefits of oil and gas leasing to the country and the states where the activity occurs.
“In 2019, oil and natural gas leasing and production on federal lands generated about $4.2 billion dollars,” Barrasso said. “Half of that money went to the federal treasury. Almost half the money went back to western states. More than a quarter of the money went to New Mexico alone. In contrast, wind and solar on federal lands have generated no more than $22 million in any given year. President Biden’s plan to end oil and gas leasing on federal lands will devastate the economies and communities of Wyoming, New Mexico, and many other states.”
The Council is continuing to meet with policymakers on both sides of the issue to urge a discontinuation of the moratorium on new leases on federal lands and waters.
Section 301 Tariffs
China’s foreign vice-minister Xie Feng met with Shanghai-based U.S. business leaders to request help pressuring the Biden Administration to remove tariffs on Chinese goods. Xie, appointed in February to his new role in charge of policy planning and U.S. affairs, met with Jeff Lehman, the American Chamber of Commerce in Shanghai’s chair, Commerce president Ker Gibbs, and representatives from major companies including General Motors, Ford, Disney, Delta, United Airlines and the United Parcel Service.
The tariffs issue is heating up in the U.S. as well. All Section 301 exclusions not related to COVID-19 expired on December 31, 2020. The Biden Administration extended pandemic-related exclusions to September 30, 2021. Included in the expired exclusions were those for products used by the OFS. The Council had successfully petitioned USTR to obtain the exclusions in 2019 and 2020.
Biden Administration officials have indicated that Section 301 duties would remain in place for the time being, but many in the business community and on the Hill are asking for the USTR to restart an exclusion process. Last week, a bipartisan group of 40 senators sent a letter to the USTR asking for a new process. Additionally, the senators asked the USTR to renew expired and expiring Section 301 exclusions.
OIL & GAS:
|EPA’s Regan Lays Out Vision of Collaboration With Industry|
Stephen Lee, Bloomberg Law, April 28, 2021 Climate change poses opportunity, Regan says. ‘Michael S. Regan is in charge,’ administrator adds EPA Administrator Michael Regan sketched out a vision of collaboration with industry to skeptical Republican lawmakers during a Wednesday Senate hearing. Regan’s moderate tone seemed intended to reassure lawmakers that the Environmental Protection Agency has no intention of sidelining ethanol from its biofuels agenda, plunging ahead on tailpipe emissions rules without considering automakers’ ability to produce electric vehicles, or deploying new lower-carbon and lower-methane policies without taking input from the power sector. Nevertheless, some Republicans on the Senate Environment and Public Works Committee voiced concerns that the Biden administration will impose a heavy-handed view of environmental extremism. Sen. Dan Sullivan (R-Alaska) said he worried that White House climate adviser Gina McCarthy—whom he accused of having “radical, activist-driven views, out of the mainstream”—will be dictating the EPA’s agenda. ‘Michael S. Regan is In Charge.’ But Regan said McCarthy’s role has been to bring together federal agencies as part of a whole-of-government strategy. “I can assure you that Michael S. Regan is in charge at EPA,” Regan said. Regan also told Sen. Jim Inhofe (R-Okla.) that the administration’s stance on renewable energy, and its matching shift away from fossil fuels, presents an “awesome opportunity” to create jobs and export new energy technologies overseas. The EPA will meet with industry to discuss “a number of technologies, timelines, and paths” to meet President Joe Biden’s goal of cutting U.S. greenhouse gas emissions by 50-52% by 2030, Regan said. Scientific Integrity Regan also said agency leaders under President Donald Trump made “poor decisions that lacked scientific integrity,” but declined to speculate on their motivations. The EPA is reviewing regulations issued under Trump to find whether scientific integrity was ignored, Regan said. “Where we see that lacking, we’re going to revise those regulations,” Regan said. In at least some cases, the Trump EPA “followed a process that was unlike any process of any previous administration, both Democrat and Republican,” Regan said. He pointed to Trump-era appointments to the EPA’s Science Advisory Board and Clean Air Scientific Advisory Committee, which make scientific recommendations to leadership. Regan purged all the members of those committees in March. In a statement, he said the EPA would return to a “time-tested, fair, and transparent process” for appointing new members. Ousted members have been invited to reapply. ‘Disturbing’ Interference The newly minted EPA administrator also told Sen. Tammy Duckworth (D-Ill.) that he found it “so disturbing to see the level of political interference, and the lack of scientific integrity, that took place over the past couple years.” Duckworth had asked about a recent report from the EPA’s Office of Inspector General alleging the agency under Trump stalled the communication of ethylene oxide emission risks for multiple facilities in Illinois. Regan said he met with the OIG earlier this week to discuss the issue. “They rightfully are making sure, and holding EPA’s feet to the fire, that we do things the right way moving forward,” he said. But Regan declined to speculate on whether the Trump-era decisions were part of a coordinated plan by political leaders to favor industry interests over environmental concerns. “I urge you not to overlook the ‘why,’” said Sen. Sheldon Whitehouse (D-R.I.). “If, at the end of the day, nobody understands the cause of all of this, you haven’t done your jobs.” The White House has established a scientific integrity task force to find examples across the government of political meddling in agency decisions. ‘Recruit Back’ Regan further repeated his pledge to rebuild morale at the EPA, which many staffers say was badly eroded during the Trump years. The agency hopes to “recruit back” many of the employees who left under Trump, according to Regan. Biden’s budget blueprint of $11.2 billion for EPA includes $110 million to raise EPA staffing. It also carves out $1.8 billion for investments to tackle the climate crisis, including $100 million for air quality grants to states and tribes and $30 million to research the impacts of climate change. “EPA simply hasn’t been provided with the resources it needs to get the job done,” Environment and Public Works Chairman Tom Carper (D-Del.) said. “The agency has been largely flat-funded, a funding commitment that has undermined EPA’s mission.
Northern Dynasty releases ESG report for Pebble project
Cecilia Jamasmie, Mining.Com, April 28, 2021
Northern Dynasty Minerals (TSX:NDM) (NYSE:NAK), the company behind the controversial Pebble copper-gold-molybdenum-silver project in Alaska, has released an environmental, social and governance (ESG) report for the proposed mine, as it awaits the results of an appeal to the US government’s decision to block the development.
The Vancouver-based explorer, which early this year appealed the US Army Corps of Engineers’ (USACE’s) negative Record of Decision (ROD) for the proposed project in the Bristol Bay, said the ESG document would address some of the biases towards the stalled project.
The USACE had originally said, in July last year, that Pebble would “not have measurable effects” on fish populations or fisheries in southwest Alaska.
But the lead federal regulator published a ROD on November 25 denying the project a key permit under the Clean Water Act on the grounds that its “compensatory mitigation plan” was non-compliant and Pebble was not in the “public interest.”
“For many reasons, including the Pebble deposit’s size and significance, its location in a vast region that supports world-class fisheries, and the active campaigning of national environmental organizations, the Pebble project has been marked by public controversy and rhetoric,” Northern Dynasty president and chief executive Ron Thiessen said in a statement.
“It’s unfortunate because so much of the good work done to plan, permit, develop and operate a modern copper mine at Pebble that would, in many ways, set a new standard for responsible mineral development in the US has been obscured,” Thiessen noted.
The report summarizes the major ESG polices, planning and engineering approaches, contracting and business development, revenue sharing, as well as the social commitments the company has made since acquiring the project in 2001.
Supported by fundamentals
Investors reacted positively to the news, with the stock climbing 1.76% to 61 cents US in early trading in New York, still below the multi-year high of $1.94 it reached last July. While the company’s shares have encountered substantial volatility recently, they are up around 74% so far this year.
“Much of the drama and debate surrounding Northern Dynasty’s stock involves the company’s ability (or lack thereof) to develop this project,” InvestorPlace’s analyst Louis Navellier wrote in early April.
With skyrocketing demand and prices for copper, Northern Dynasty has a vested interest in exploring and developing the mine, which permitting process has been surrounded by controversy and delays.
If Northern Dynasty wins the battle and gets Pebble permitted it would be North America’s largest mine, capable of producing 70 million tonnes of gold, molybdenum, and copper ore a year.
The asset’s resource estimates talk of 6.5 billion tonnes in the measured and indicated categories containing 57 billion pounds of copper and 71 million ounces of gold, 3.4 billion pounds of molybdenum and 345 million silver ounces,
However, the mine would also create a pit 1,970 ft (600 m) deep in Alaska’s Bristol Bay watershed. Opponents said the project threatens a world-class sockeye salmon fishery, putting more than $1 billion of revenue and over 10,000 jobs at risk.
Biden’s Cradle-to-Grave Government
Editorial Board, The Wall Street Journal, April 29, 2021
His latest $1.8 trillion plan rejects the old social contract of work for benefits.
The progressive hits keep coming from the Biden Administration, and the latest is the $1.8 trillion American Families Plan introduced in broad strokes on Wednesday. It’s more accurate to call this the plan to make the middle class dependent on government from cradle to grave. The government will tell you sometime later, after you’re hooked to the state, how it will force you to pay for it.
We’d call the price tag breathtaking, but by now what’s another $2 trillion? Add $2 trillion or so each for the Covid and green energy (“infrastructure”) bills, and that’s $6 trillion of new spending in 100 days. That doesn’t include the regular federal budget of more than $4 trillion a year. No worries, mate, the Federal Reserve will monetize the debt.
But the cost, while staggering, isn’t the only or even the biggest problem. The destructive part is the way the plan seeks to insinuate government cash and the rules that go with it into all of the major decisions of family life. The goal is to expand the entitlement state to make Americans rely on government and the political class for everything they don’t already provide.
The White House talking points pitch this in the smothering love of the welfare state: “making care affordable”; free medical and family leave; “free education”; two years of “universal pre-school”; “invest in the care workforce.” Subsidies and millions of new care givers, all licensed and unionized, will nurture you through the challenge of earning a living and raising a family.
One question to ask is: Haven’t we tried this before? What is Head Start if not government pre-school education and childcare? Weren’t school lunches and the Women, Infants and Children program supposed to prevent child hunger? Food stamps, welfare checks, child-care subsidies and a supplement to earned income, plus public housing. Weren’t all of these programs and more from previous decades supposed to end poverty?
Why did the trillions of dollars spent on those programs fail? And if they didn’t work, why do we need more?
For the candid answer, listen to Rahm Emanuel, the Chicago Democrat who explained the political calculation this week to the Washington Post: “Once everyone’s in, all the parents want in. Then it’s not a poor person’s program or a poverty program. It’s an education program. . .. That to me, that is essential. It changes the center of gravity once it’s for everybody.”
So much for the “safety net” to prevent poverty. This is now about mainlining benefits to middle-class families, so they become addicted to government—and to the Democratic Party that has become the promoting agent of government.
Democrats are enamored of this principle of “universality” because it has worked to sustain the popularity of Social Security and Medicare, despite their failing finances. But those programs promise benefits in return for work across a lifetime. The Biden New Deal isn’t a deal at all. Most of its programs are free handouts on the model of the 1960s Great Society.
The new pre-school entitlement will go to all families, as would free community college. The tax-credit expansion to $3,600 per child in the Covid bill, which Mr. Biden wants to make permanent, is on top of the other welfare subsidies. The Biden plan also makes permanent an expansion of ObamaCare subsidies for more affluent adults, eliminating the subsidy cap that was 400% of poverty. A new paid family leave entitlement will be an incentive for companies to drop leave benefits that already cover most workers.
All of this adds up to healthy guaranteed annual income largely untied to the social contract that requires work, which is the real path to independence and self-respect.
The White House is also less than honest about how it will pay for all this. Its short answer is that more taxes on the wealthy and more IRS audits are enough. But that doesn’t come close.
The permanent child-tax credit expansion would cost $1.6 trillion over 10 years, according to our friends at Cornerstone Macro. The White House says it only costs $420 billion, but that’s because it only includes four years through 2025. The new entitlements ramp up slowly but explode in the later years, while the tax increases are immediate and won’t raise the revenue they expect.
That’s especially true of the increase in the top tax rate on capital gains to 43.4%, which would lose money by all historical experience. The White House tries to get around this by eliminating the step-up basis for paying capital gains at death, meaning an heir would pay the tax based on accrued value over a lifetime. This is a back door addition to the current death tax rate of 40%.
The White House also predicts that unleashing thousands of new IRS agents will find $700 billion in unpaid tax bills. But this prediction is based in part on old IRS data, before the 2017 tax reform that removed many tax loopholes, especially in the corporate tax code. The only benefit of the IRS audit army is that its $700 billion bogey replaces what would be another tax increase.
The new taxes are destructive, but their impact will take time to be felt as the post-pandemic economy soars. The GOP shouldn’t ignore the taxes and spending. But a more potent political target may be the bill’s tripling down on a welfare state that disdains the dignity of work and seeks to make Americans the wards of government.
Hawaii to become the first state to declare climate emergency
Alexandra Kelley, The Hill, April 29, 2021
Story at a glance
- The Hawaii state legislature will pass a resolution Thursday to declare a climate emergency.
- It establishes a partnership between environmental organizations and the state government.
- More than 1,900 jurisdictions across the world have taken similar steps.
Hawaii will make history on Thursday as the first state legislature to declare a climate emergency.
The state legislature is set to pass a Senate Resolution, SCR44, that openly states that climate change threatens both humankind and the environment. It requests state collaboration with organizations devoted to alleviating the adverse impacts of climate change to halt the increase of global temperatures.
“I’m very pleased that the Legislature has taken this step by declaring a climate emergency,” said Sen. Mike Gabbard (D), the primary sponsor of the resolution. “We must take strong action to address climate change related challenges, such as sea level rise, coastal erosion, and the protection of our critical infrastructure.”