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Biden’s War On Gas Appliances Is Just Beginning

February 10, 2023 by Leave a Comment

The hubbub about banning indoor gas stoves that Biden’s Commissioner of the Consumer Product Safety Commission (CPSC) suggested last month and which was poo-pooed by the White House, saying President Biden did not support the ban, continues. Now, Biden’s Department of Energy is setting energy efficiency standards for consumer cooking appliances that would ban most indoor gas stoves. In its current form, the Energy Department admits its proposal would effectively take half of gas stove models off the market, unless modifications were performed. The reality may be worse because one estimate suggests that 95 percent of the market would not meet the proposed levels. Since the Department of Energy has greater authority than the CPSC, this is a more serious threat to the use of gas stoves and may represent a “backdoor approach” to American kitchens that the Biden Administration’s war on gas stoves may prefer.

In a notice of proposed rulemaking, the Department of Energy (DOE) said it has “tentatively concluded” that new energy conservation standards for stove appliances would be technologically feasible and economically justified. The agency proposed new limitations on how much energy electric stove tops (both coil and smooth) and gas cooking tops may consume in a year. According to the DOE, every major manufacturer has products that meet or exceed the proposed requirements. On the one hand, it proposes to end the prohibition on constant burning pilot lights in gas stoves, but, on the other hand, it says a stove with a constantly burning pilot light would not meet the new efficiency standards. The DOE rulemaking would also impose regulations on electric and gas ovens for the first time, providing that they may not utilize a linear power supply, or one that produces unregulated as well as regulated power.

According to DOE’s rulemaking, the standards could enable energy savings of 3.4 percent relative to a baseline without the standards–“the equivalent of the electricity use of 19 million residential homes in one year.” DOE also estimated that manufacturers would incur conversion costs of $183.4 million to comply with the standards. The new standard would raise the upfront cost of stove products by $32.5 million per year, but are estimated to save $100.8 million annually in operating costs. DOE estimates that the efficiency standards will pay for themselves in an average of 1.5 to five years. The average lifespan of a gas range is about 15 to 20 years. The proposed standards would go into effect in 2027 and cumulatively save up to $1.7 billion, according to DOE.

Gas stoves are used in about 35 percent of households nationwide, or about 40 million homes. The household figure is closer to 70 percent in some states, such as California and New Jersey. Other states where many residents use gas stoves include Nevada, Illinois and New York.

The agency is asking for public comment on the proposed rule. If enacted, the standards would apply to products manufactured or imported into the United States three years after the rule is finalized.

DOE’s Testing Procedure

DOE analyzed the existing energy efficiency of standard cooktop units for three categories: Electric cooking tops that have raised coils, smooth electric cooktops (which includes but is not exclusive to induction cooktops, which use electromagnetism to heat the cooking element), and gas cooktops. It then tested different designs and energy conservation methods, as well as how much each of those cost, to determine the new efficiency standards.

For coil electric cooktops, DOE found there are no possible efficiencies to be gained, resulting in an efficiency standard for such cooktops at 199 kilowatt-hours per year with standard use–the same as the baseline testing. For smooth electric cooktops, DOE found induction more efficient than traditional smooth cooktops that employ a heating element. DOE found a 24 percent energy savings on average when switching from a traditional smooth electric cooktop to induction. The new efficiency standards propose a 17 percent reduction over the baseline, from 250 kilowatt hours per year to 207 kilowatt hours per year.

DOE is proposing efficiency standards that would make gas cooktops 32 percent more efficient than the agency’s baseline testing. DOE thinks this can be accomplished through cooktop design. “DOE’s testing showed that energy use was correlated to burner design and cooking top configuration (e.g., grate weight, flame angle, distance from burner ports to the cooking surface) and could be reduced by optimizing the design of the burner and grate system.” In other words, DOE thinks it can make gas cooktops 32 percent more efficient by forcing manufacturers to redesign them.

Conclusion

The Biden Energy Department has issued over 100 energy efficiency rules on appliances and household equipment, which they claim will fight climate change and save consumers money. If that were true, market forces would have resulted in the same goals without needing the federal government to enforce them. Historically, appliances that the Energy Department reviewed ended up performing worse and costing more. DOE rulemaking, combined with state and local efforts to ban natural gas hook-ups in new homes and buildings, is how the federal government and environmentalists plan to take gas stoves away from consumers.

Other regulations are likely to affect gas stoves down the pike. Despite the White House saying they do not support a gas stove ban, they are not working to make gas stoves more affordable or widely available. The Biden Consumer Product Safety Commission (CPSC) could still ban them as indicated by its chairman that it was “researching gas emissions in stoves and exploring new ways to address health risks.” The Environmental Protection Agency (EPA) was also petitioned by a coalition of environmental groups to issue New Source Performance Standards on gas stoves and other gas appliances, making the claim that gas appliances carry “significant health impacts, from increasing the rates of asthma to causing thousands of premature deaths each year.” The asthma claim is a myth promoted by environmentalists whose real agenda is not to reduce asthma but to ban natural gas. The American Gas Association notes that neither the CPSC nor EPA has cited gas stoves as a significant contributor to adverse air quality or as a health hazard.

Further, the Interior Department’s restrictions on drilling will cause more pain to the natural gas industry as will the Inflation Reduction Act’s tax on methane emissions from natural gas operations, both of which will affect consumers’ pocketbooks. President Biden promised a “whole of government” approach to his battle against climate change and his promise to end fossil fuels. That apparently means that when one agency uses the front door of the kitchen to come after gas stoves and is stopped, another agency will use the back door to achieve the same ends.

*This article was adapted from content originally published by the Institute for Energy Research.

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Fact Check: Biden’s Outrageous SOTU Gas Prices Claim

February 9, 2023 by Leave a Comment

On February 7, 2023, in his state of the union address, President Joe Biden stated, “Here at home, gas prices are down $1.50 a gallon since their peak.” While the statement is true, he fails to indicate that they are still almost a dollar higher than when he took office on January 20, 2021. And according to Gas Buddy, which provides real-time prices and projections, gas at the pump is expected to rise back to $4 a gallon this year. Gasoline prices peaked in June of 2022 at over $5 a gallon due mainly to Biden’s anti-oil and gas policies and Russia’s invasion of Ukraine. Gas prices fell since then due mainly to Biden’s use of the Strategic Petroleum Reserve—our national emergency oil reserve–to lower gas prices before the mid-term election on November 8. He depleted the reserve by 260 million barrels, reducing it to a 40 year low, and promised to refill it this year. But, when the first bids came in, his administration rejected them supposedly because of price and quality concerns. Biden’s depletion of the reserve is putting U.S. energy security at risk.

Source: Energy Information Administration

Biden’s extreme anti-fossil fuel policy of blocking permits, canceling the Keystone XL pipeline, suspending leases in ANWR, restricting oil and gas leasing to the lowest level since WWII and generally waging war on our traditional energy resources is why America has gone from being energy independent to facing an energy crisis in just two short years.

However, in recognition of the true situation, President Biden went off-script during his state of the union address stating, “We’re still going to need oil and gas for a while.” This assessment from the president, not included in his prepared remarks, points out the conflict between his administration’s climate and economic goals. Biden has repeatedly pushed oil companies to invest in pumping more oil even as he and his administration openly advocate to end its use. Biden continues to blast oil companies for using record profits to buy back stock and reward their shareholders, instead of putting that money into more drilling to increase production and “keep gas prices down.” But, as oil executives told him: “We’re afraid you’re going to shut down all of the oil wells and all the oil refineries anyway so why should we invest in them?”

So, Tuesday night, Biden told them, “We’re going to need oil for at least another decade,” quickly adding, “and beyond that.” Biden, however, will need to walk the talk if he expects oil companies to spend more capital on investments that take decades to pay off. The oil industry needs more encouraging signals from Washington that they are not getting. Instead, Biden called on Congress to quadruple a new tax on corporate stock buybacks, saying that would encourage more long-term investments. The push dovetails with California Governor Gavin Newsom’s proposal to add a windfall-profits tax on refineries. By continuing to politicize market fundamentals and single out stock buyback programs, the president is ignoring how his own policies discourage the reinvestment of earnings back into the U.S. liquid fuel supply chain. It is counterproductive to explore new taxes at a time when more supply is needed.

Recently, Biden raged against U.S. oil company profits, even though it is Biden’s own policies that have helped cause oil prices to rise, creating large profits for oil companies. Major oil companies released their 2022 earnings, with Exxon and Chevron making $55.7 and $35.5 billion, respectively. Biden’s efforts to curb the use of fossil fuels and reduce emissions in pursuit of his climate pledges to the U.N. have led to higher fuel prices that have led to large oil company profits.  But, Biden’s SPR policy distorted those markets in order to lower oil and gasoline prices for short term political gain. Biden apparently does not want to accept that lowering emissions requires higher prices and the political and economic consequences that result from them.

Oil and gasoline prices are expected to rise this year as Gas Buddy indicates. The Biden administration’s Inflation Reduction Act raises royalty rates and imposes more regulations and various fees on fossil fuels that will continue to raise prices.  And, it is likely that his administration will continue with onerous regulation on the industry. Further, Biden’s regulation-heavy policies discouraged investors from supporting U.S. oil companies. With no reversals of his anti-oil and gas policies to match his rhetoric that he would like prices to go down for consumers, energy prices are likely to remain high and continue to rise.

Conclusion

President Biden wants his cake and wants to it eat too.  He campaigned on killing the oil and gas industry and is instituting onerous policies to do so, which raises prices for American consumers and increases inflation. But, he does not want to accept the political fallout from those policies. Americans have indicated that they do not want to pay much to reduce greenhouse gas emissions and that they see that goal as a low priority, while Biden continues with policies that make it his highest priority, hoping that Americans do not recognize that his policies are causing higher prices and inflation by hiding behind the Ukraine war and profits for oil companies, among other things. Hopefully, sometime soon, the American public will be able to see through his shenanigans and lies to protect themselves.

*This article was adapted from content originally published by the Institute for Energy Research.

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The Unregulated Podcast #119: Red Balloons

February 8, 2023 by Leave a Comment

On this episode of The Unregulated Podcast Tom Pyle and Mike McKenna discuss Joe Biden inflating currency and deflating a Chinese spy balloon (after it completed its mission).

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Biden’s EV Fantasy Crumbling As EV Costs Surpass Gas-Fueled Vehicles

February 7, 2023 by Leave a Comment

A recent study by the Anderson Economic Group found the cost to fuel certain electric vehicles to be higher than similar gasoline-powered cars for the first time in 18 months. In the fourth quarter of 2022, drivers fueling a typical mid-priced Internal Combustion Engine (ICE) car paid $11.29 to fuel their vehicle for 100 miles of driving. That cost was $0.31 cheaper than the amount paid by drivers in mid-priced electric vehicles charging mostly at home, and over $3 less than the cost borne by comparable EV drivers charging commercially. This occurred because gasoline prices were declining and electricity costs were increasing. It fundamentally undermines the Biden Administration’s “whole of government” push for the electrification of transportation in the United States, exemplified in this argument for electric vehicles by Energy Secretary Jennifer Granholm.

For luxury cars, the opposite is still true. During the fourth quarter of 2022, luxury EV owners paid $12.4 to drive every 100 miles on average if they charge their cars mostly at home or $15.95 if they charge their cars mostly at commercial charging stations. The fuel costs for luxury gasoline-powered cars totaled $19.96 per 100 miles on average. Assuming mostly home charging, the cost benefit to fuel a luxury EV vs. a luxury ICE car dropped from $11.20 per 100 miles to $7.56. The fuel costs are based on real-world driving conditions including the cost of underlying energy, state taxes charged for road maintenance, the cost of operating a pump or charger, and the cost to drive to a fueling station.

Source: Anderson Economic Group

The analysis calculates four categories of costs for fueling EVs and ICE vehicles across benchmarks representing real-world driving conditions, including:

  • The cost of the underlying fuel (gas, diesel, electric)
  • State excise taxes charged for road maintenance
  • The cost to operate a pump or charger
  • The cost to drive to a fueling station (deadhead miles)

All cases reflect 12,000 miles per year, with the cost of residential charging equipment amortized over five years. Calculations are based on energy prices and taxes in the state of Michigan. Benchmarks for ICE vehicle drivers assume the use of commercial gas stations. For EV drivers, there are two calculations: drivers who routinely charge at home and those who rely primarily on commercial chargers.

The information is depicted below by class of vehicle. There is insufficient market information for a comparison of electric trucks and of entry priced electric vehicles.

Source: Anderson Economic Group

The Biden administration has been pushing hard for drivers to purchase electric vehicles supposedly in an effort to reduce emissions. However, since about 60 percent of the nation’s electricity comes from fossil fuels, the electricity sector is still emitting greenhouse gases and thus so do electric vehicles.

The Anderson Economic Group used data based on Michigan’s electricity and gasoline prices. Michigan has the eleventh highest electricity prices in the nation with residential electricity prices averaging 18.18 cents per kilowatt hour, which are 13 percent higher than the national average and 72 percent higher than the lowest residential state electricity price (based on October 2022 data).  Michigan is also the seventh largest producer of electricity in the nation and similar to the nation’s generation statistics, it gets about 60 percent of its generation from fossil fuels: coal, natural gas and petroleum coke. Below is the generation data for Michigan in November 2022.

Source: Energy Information Administration

In the fourth quarter of 2022, gasoline prices were decreasing as President Biden used the Strategic Petroleum Reserve to bring gasoline prices down before the mid-term election on November 8. Gasoline prices across the nation dropped from an average of $3.912 per gallon in early October 2022 to a low of $3.091 per gallon by the end of the year.

Other Issues with Electric Vehicles

Electricity prices have been increasing steadily over the past few years, especially in states such as California where utility companies are having trouble keeping up with demand. When states like California replace coal and natural gas generators with renewable energy and storage batteries, the costs are passed on to consumers. In states where electricity prices are high, driving an electric vehicle could cost more than driving a gasoline-powered car. Plus, the initial cost of an electric vehicle is much higher than an ICE vehicle due to higher manufacturing costs and battery technology. Since electric motors have fewer moving parts than traditional combustion engines, they require less regular maintenance but still do require repair. Also, some public charging stations may also charge additional fees which can add up quickly depending on how much those charging stations are used.

In fact, Tesla’s electric vehicles are so expensive to repair that insurers are writing off low-mileage Tesla Model Ys and sending them to salvage auctions after determining that many are too expensive to repair. Of more than 120 Model Ys that were totaled after collisions, then listed at auction in December and early January, the vast majority had fewer than 10,000 miles on the odometer. The retail prices of the cars ranged from about $60,000 to over $80,000. Insurance companies generally “total” a vehicle when the estimated cost of repair is deemed too high. The insurance companies include State Farm, GEICO, Progressive and Farmers.

For example, a 2022 Model Y Long Range involved in a front collision and listed at auction in early January had a retail price of $61,388 and estimated repair cost of $50,388. Another Model Y involved in a side collision had a retail price of $72,667 and estimated repair cost of $43,814. Chief Executive Elon Musk indicated that Tesla is making design and software changes to its vehicles to lower repair costs and insurance premiums.

Conclusion

The Anderson Economic Group found that for a certain class of vehicle, electric vehicles were more costly to operate than their gasoline vehicle counterparts because of decreasing gasoline prices and increasing electricity prices. However, the report notes that the costs of charging an electric vehicle vary considerably depending on whether the user must rely on more expensive commercial charging services or can rely upon a residential charger.

Because electric vehicles are more expensive to purchase than a corresponding gasoline vehicle, they currently are not a good buy for consumers, particularly when other factors are considered such as range and availability of charging stations. The Biden administration claims that electric vehicles are “cleaner” than gasoline vehicles, but electric vehicles still emit greenhouse gases since about 60 percent of the electricity produced in this country is generated by fossil fuels, mainly coal and natural gas. Despite much media attention, EVs face considerable hurdles penetrating the market, not the least of which is that even their energy costs in some cases are proving higher than their conventional counterparts.  Toyota is recognizing some of the shortcomings and is moving towards an approach they believe is more science-based.

*This article was adapted from content originally published by the Institute for Energy Research.

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Exposing Biden’s Lies On Gas Prices

February 6, 2023 by Leave a Comment

Joe Biden’s administration and certain elements in Congress have a plan for American energy: make it harder to produce and more expensive to purchase. Our friends at the Institute for Energy Research have shown the juxtaposition between the administration’s words and deeds on this topic in their latest video short.

Since Biden took office, his administration and allies in Congress have taken over 125 actions deliberately designed to make it harder to produce energy here in America. The full list can be found here. Share this with the next person who says the president’s actions don’t determine gas prices!

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The Unregulated Podcast #118: February

February 6, 2023 by Leave a Comment

On this episode of The Unregulated Podcast Tom Pyle and Mike McKenna discuss the latest headlines from the first week of February.

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Key Vote H.R. 21 and Amendments

January 26, 2023 by Leave a Comment

The American Energy Alliance urges all members to support H.R. 21, The Strategic Production Response Act, which would require plans to increase leasing on federal lands in order to draw down the Strategic Petroleum Reserve during non-emergencies.

The SPR was meant to serve as an emergency reserve of oil in the event of major events like the Arab oil embargo or natural disasters. It was never meant for attempts to micromanage gas prices, and presidents of both parties have misused the SPR in this manner. The way to reduce gas prices in a sustainable way is by increasing domestic oil production, which not only provides additional supply to ease prices, it promotes American national security as well as increasing economic growth. This legislation recognizes that obvious fact and requires plans for sustainable long term production increases in exchange for allowing short term releases from the SPR.

While AEA objects to some of the amendments offered that would limit where production increases can occur, the ultimate goal of this legislation is correct. Reducing gas prices requires long term increases in production. By requiring that short term political uses of the SPR be matched by increased potential for longer term production increases, this legislation would ensure longer term stability in gas prices, as well as boosting domestic energy security and economic growth.

AEA will be scoring against amendments which seek to limit where production can be increased and other amendments which would harm domestic energy production or security.

The AEA urges all members to support free markets and affordable energy by voting YES on H.R.21.  AEA will include this vote and votes on select amendments in its American Energy Scorecard.

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The Unregulated Podcast #116: Extraterrestrial

January 20, 2023 by Leave a Comment

On this episode of The Unregulated Podcast Tom Pyle and Mike McKenna discuss the deliberations at Davos, the impending debt limit crisis, and more.

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Subsidy-Fueled EV Bubble Likely To Pop

January 19, 2023 by Leave a Comment

Electric car manufacturers in Europe are slowing down production because battery cars have proven too expensive for the middle class and the supply of lithium for their batteries is too uncertain. Production in Europe this year is expected to be 12 million cars—a million less than previous estimates. Tesla, for example, is cutting prices to boost demand. Of more than 900 auto executives surveyed internationally, 76 percent believe that inflation and high-interest rates will slow sales and that EV adoption will take longer. In the United States, that figure was 84 percent. The median expectation for EV sales by 2030 dropped to 35 percent in the United States, from 65 percent a year earlier. Longer-term impediments cited by the executives include the availability of raw materials for batteries, as well as stricter rules around federal incentives for buying electric vehicles. Also, consumers see touted fuel savings not materializing. Britain’s Daily Mail reports: Electric vehicles can be more expensive to fill up on the open road than their petrol and diesel equivalents as the cost of utilities continue to spiral.

Britain

It is now expected that the UK will produce 280,000 fully electric cars and vans in 2025, down from a previous estimate of 360,000. That forecast means only a quarter of car output will be electric within the next two years, lower than prior forecasts of more than a third. Declining production threatens to wreck a key government plan to cut greenhouse gas emissions by banning sales of new petrol and diesel cars by 2030. A recovery in EV sales by 2030 is ‘uncertain’ due to ongoing supply chain issues, particularly of lithium needed for electric car batteries, as well as political tensions across the globe.

BMW announced in October that it would stop production of the electric Mini at its plant in Oxford, England and transfer that operation to China. Jaguar, owned by India’s Tata Motors, has not produced further details on plans to become fully electric by 2025.

UK consumers are also concerned about operating costs with the average cost of charging an electric car increasing by 58 percent since last May. Also, UK councils are planning double-digit increases in parking fees. Charges will increase by around 10 percent from April in various areas. An all-day ticket in Dudley will shoot up by 43 percent to £5 and fees will rise by 29 percent at the most popular sites in Cornwall, to £2.20 an hour. Local authorities have defended the increases because they are under financial pressure, but others worry that higher parking fees will hurt town businesses.

Slowing U.S. Auto Market despite Rising EV Sales

U.S. auto sales fell about 8 percent last year to fewer than 14 million cars and trucks, the lowest level since 2011, due to shortages of computer chips and rising borrowing rates that made customer financing more expensive. While auto sales declined, sales of electric vehicles increased 66 percent to over 808,619, according to Kelley Blue Book.

Tesla’s Price Cut and Outlook

Tesla cut prices on most of its electric cars in the United States and Europe by as much as 20 percent to boost demand as stiff competition and rising interest rates have reduced the demand for electric vehicles. By cutting the prices of its current models, Tesla is conceding some profit in order to increase sales volume. The company typically shows gross profit margins of 26 percent — more than double that of some competitors. Tesla’s high-end Model 3 Performance compact is now selling in the United States for just under $54,000, down from $63,000, a price cut of 14 percent. The most affordable version of the Model 3 now sells for just under $44,000—a reduction of about $3,000 or 6 percent. The Model Y now starts at $53,000—a cut of 20 percent from the previous price of $66,000.

Tesla’s websites for Germany, France and other European nations showed similar price cuts. The base Model 3 is now listed at 44,000 euros—a reduction of about 12 percent from the previous price.

In the United States, Tesla’s price cuts will allow some of its lower-priced models, depending on optional features, to qualify for federal tax credits of $7,500 that were made available starting January 1 under the Inflation Reduction Act. The credit is available on electric cars priced under $55,000. In the past, Tesla’s sales were aided by a $7,500 tax credit provided by an earlier federal program. Despite those credits disappearing after Tesla sold 200,000 vehicles in the U.S. market, the company’s sales continued to grow, in some cases aided by state incentives.  Tesla expects its sales to grow about 50 percent a year for the next few years.

Tesla offers only four models—two are luxury models out of reach of most mainstream consumers. Tesla last introduced a car in 2020, when the Model Y went into production. Since 2019, Tesla has promised to introduce a pickup, called the Cybertruck, but has delayed its production several times. The company hopes to begin making it this year. The Cybertruck has an angular, futuristic design and is expected to be sold as a luxury vehicle, which could limit its appeal. At one time, Elon Musk indicated a desire to produce an electric car that can sell for around $25,000, but there are no formal plans available. In December, Tesla began delivering a small number of battery-powered semi trucks to PepsiCo, its first truck customer.

Tesla sold 1.3 million cars in 2022—a 40 percent increase from the year before but short of the 50 percent target. Tesla’s fourth-quarter production of 440,000 cars was 34,000 more than the company delivered. The company weathered the computer chip shortage early in the COVID pandemic better than most automakers because it rewrote software that could run on substitute chips that were in more plentiful supply. Other automakers temporarily idled plants because of shortages of certain electronic parts.

While Tesla dominates EV sales, several automakers are gaining ground. Ford, Volkswagen and several other automakers posted sizable increases in EV sales last year, offering many models that were significantly more affordable than Tesla’s. Hyundai and its affiliate Kia together sold more than 43,000 electric vehicles in the United States in 2022—up from a just few hundred in 2021. This year, General Motors is supposed to start making electric versions of its Chevrolet Silverado pickup and Chevrolet Blazer and Equinox sport utility vehicles.

Tesla also faces major competition in China, its largest market, where a local manufacturer, BYD, is now the number 1 electric vehicle brand. Tesla recently lowered prices in China and reported a global sales total for 2022 that was below analysts’ expectations.

Conclusion

The EV mania may be over or at least slowing as interest rates increase, inflation and supply chain shortages continue and restrictions remain on tax credits. While some politicians are following in California’s footsteps by banning gasoline-powered vehicles and President Biden has a goal for 50 percent of new car sales in 2030 to be electric, those feats may not be attainable due to problems in manufacturing and selling of electric vehicles. Range and performance problems still exist making consumers wary. And with escalating electric rates, operating costs may not be less than those for gasoline vehicles as Europe is seeing. Despite some manufacturers such as Tesla lowering purchase costs, competition from other manufacturers and consumer awareness may keep goals from reaching fruition.

*This article was adapted from content originally published by the Institute for Energy Research.

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Biden’s EPA Declares War on Farmers, Energy Producers, and Land Owners

January 18, 2023 by Leave a Comment

During the holidays, the U.S. Environmental Protection Agency (EPA) and the Department of the Army issued a proposed redefinition of the Waters of the United States (WOTUS) under Section 401 of the Clean Water Act (CWA).  The rule would expand the EPA and Army’s regulatory oversight to include traditionally navigable waters, territorial seas, interstate waters and, “upstream water resources that significantly affect those waters.”  According to the two agencies, the revised rule is based on definitions that were in place before 2015. Farming groups, oil and gas producers, and real estate developers criticized the regulations as overbearing and burdensome to business, and, in particular, the ruling has the potential to affect natural gas infrastructure projects. It also would exert federal control over lands not owned by the federal government.

The ruling comes as a surprise since the U.S. Supreme Court is to decide on a case this session called Sackett v. Environmental Protection Agency that challenges the government’s determination that a wetland on private land in Idaho is protected under the Clean Water Act.  The case involves an Idaho couple, Michael and Chantell Sackett, who sought to build a house in the state’s panhandle. After they began preparing for construction in 2007, the Sacketts were stopped by the EPA, which said the property included a federally protected wetland. EPA ordered them to return the property to its original state or face fines. The couple sued the agency and the Supreme Court heard oral arguments last fall.

The EPA began the rulemaking process on updating the definition last June. That preliminary ruling is available for public comment until February 7. The proposal, once approved, would come into effect 60 days following its publication in the Federal Register. A final decision from the EPA is expected this June, with the Army’s decision on issuance of Nationwide Permit (NWP) 12 under Section 404 of the CWA expected this August.

Background

In 2015, the Obama administration supplied a definitional amendment to “provide critical context and guidance in determining the appropriate scope” of WOTUS that is covered by the CWA.  It was heavily criticized at the time as an example of government overreach and an infringement of private property, as it included any place regulators could argue was wet, even in such cases as an area immediately after an uncommonly heavy rain, such as a temporary mud puddle. The Government Accountability Office found the EPA at the time engaged in a ”covert propaganda” program using social media to convince the public of their actions’ worthiness.

In April 2019, President Trump targeted the definition with Executive Order 13868, which took aim at state authority over water quality certifications to gain approvals for natural gas infrastructure. The Executive Order in 2020 was further ensconced following a rulemaking by the EPA under the Trump administration, known as the Navigable Waters Protection Rule (NWPR). Oil and gas organizations at the time voiced their support for the NWPR after years of complaints that state governments opposed to energy infrastructure improperly relied on the scope of the CWA to obstruct the pipeline permitting process.  This was part of President Trump’s “energy dominance” program of making the United States more energy self-sufficient.

On his first day in office, President Biden signed Executive Order 13990, Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis, granting the EPA and Army the authority to once again review and rescind the NWPR.

Court Cases

Clean Water Act jurisdiction has been a muddy area, particularly when it comes to wetlands that do not have direct surface water connections to larger waterways like rivers and streams. For the past 15 years, questions of which wetlands have enough of an impact on downstream waters to merit federal protections have all come down to how EPA and the Army Corps of Engineers interpret the Supreme Court’s decision in Rapanos v. U.S. 

That 2006 case splintered the justices 4-1-4 and resulted in two competing tests to determine if property must meet the Clean Water Act permitting requirements. In one case, wetlands would be federally protected if they have a hydrologic, biological or chemical impact on downstream waterways—a test that has been largely adopted by federal courts. In another case, only wetlands with relatively permanent surface water connections to larger waterways would merit protection. The terminology involves “navigable waters,” and what that is intended to mean.

The Supreme Court again dealt with questions of Clean Water Act jurisdiction in the case Sackett v. EPA. During oral arguments last fall, the justices homed in on the question of whether federal protections applied to a wetland located about 300 feet away from a regulated lake but separated from it by a human-made road. Several justices inquired whether a new test is needed to best identify federally protected waters. It is unclear how the new rule will affect the Supreme Court’s decision this year and, in turn, how the Supreme Court could impact the new rule.

Conclusion

Permitting reform is needed for infrastructure, transportation and energy projects to end the endless costs occurred from needless regulation and lawsuits by environmentalists. And, certainty is necessary to ensure agriculture is not unduly burdened by an expansive definition of navigable waters. This rule does not provide that reform. Rather, it moves the process backwards by making more projects subject to federal permitting requirements and adding more bureaucratic red tape. The rule makes it more difficult for Americans to get the energy they need at affordable costs. Further, the Supreme Court case now being considered will most likely have an impact on the ruling.

*This article was adapted from content originally published by the Institute for Energy Research.

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