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Trump Administration Considering a Temporary Jones Act Waiver for Oil Producers

April 3, 2020 by 2 Comments

President Trump is reportedly meeting with the leaders of several U.S. oil producers today to discuss some sort of temporary relief for the industry from the sharp drop in oil prices caused by the drop in demand due to COVID-19 pandemic. Although it isn’t completely clear what the administration has in mind, there are rumors that one of the proposals under consideration is a temporary waiver of the Jones Act for transporting oil.

For those who are not familiar with it, the Jones Act is a maritime law that mandates that only vessels that are built, owned, crewed, and flagged in the United States can participate in maritime shipping between domestic ports. As I explained when I first wrote about the Jones Act in 2017:

“The obvious economic effect of the Jones Act is that it excludes foreign ships from participating in the domestic maritime shipping market. Limiting the supply of domestic shippers increases the costs of shipping goods between domestic ports relative to what they would be in a more competitive market; these costs are then passed on to consumers.  A combination of factors cause these increased costs including the cost of producing a ship in an American shipyard (which is four to five times higher than the cost of an imported ship) as well as the increased operating costs of employing an American crew. The Congressional Research Service has shown that operating costs of American vessels bound to the Jones Act can be more than twice as high per day to comparable foreign ships. In 1999, the U.S. International Trade Commission reported the Jones Act costs $1.32 billion annually to American consumers. Areas like Alaska, Hawaii, Puerto Rico, and Guam disproportionally feel the effects of these costs because their geographic locations limit their ability to use alternative forms of transportation such as rail or freight to move goods.  Excluding foreign competition in the domestic maritime shipping market also reduces competition for services and grants American shipping companies increased monopoly power in the market. This allows domestic companies to charge higher prices and prevents them from adapting to better meet consumer demand.”

The U.S. energy industry is particularly affected by the Jones Act as the higher shipping costs associated with the law have placed some parts of the country in the position where importing oil is frequently a cheaper option than consuming the oil produced here in the U.S. Writing over at the Cato Institute, Colin Grabow explains the impact of the Jones Act on the U.S. energy industry:

“Jones Act shipping rates are so high that shipping a barrel of oil from Alaska to the Gulf Coast has been shown to cost three times more than shipping the same oil on a foreign‐​flagged ship to the U.S. Virgin Islands (which are exempt from the law) despite the latter voyage taking twice as long. Jones Act-compliant ships are so expensive that oil can be shipped to East Coast refineries from Saudi Arabia for three times cheaper than sending it from the Gulf Coast.

As a result, Americans buy more Saudi oil and less U.S. oil, which must be instead sold to more distant customers. Last year California refineries even bought oil from as far away as Nigeria instead of Louisiana largely due to transportation costs. This is costly, inefficient, and hurts the bottom line of U.S. oil producers. “

I would add to this that the Jones Act also helps solve some of the industry’s supply chain problems that are the result of the restricted construction of new pipelines in the U.S. Additionally, because of the extremely low price of oil, a temporary waiver may make it easier and less costly for oil producers to transport their product to storage facilities as they await a rebound in the price of oil.

As Americans do their best to fight through the economic impacts of the COVID-19 pandemic, it would behoove the administration to adopt simple changes in policy that can help American consumers and producers alike. A temporary Jones Act waiver for oil and gas is the perfect example of such a policy as it wouldn’t present any harm to U.S. consumers and would help U.S. oil and gas producers bring their products to market.

Filed Under: Blog, Oil Exports Tagged With: , , , , , , , , , ,

Trump Administration Finalizes Rationalization of Fuel Economy Mandates

March 31, 2020 by Leave a Comment

Today the Trump administration finalized the second half of its proposed rule to correct the overreach of the Obama administration’s Corporate Average Fuel Economy (CAFE) regulations. The first half came last fall when the administration halted California’s ability to force fuel economy standards on the other 49 states. Today’s second half brings fuel economy mandates back to the real world of achievable improvements instead of the Obama administration’s backdoor electric vehicle mandate. This rationalizing is an important victory for consumers, providing more choice and more affordable vehicles, and a victory for automakers, who can focus on technological improvements rather than scrambling to meet overreaching bureaucratic mandates.

The CAFE program is a relic of the 1970’s oil crises. As domestic oil production declined, many people came to fear US dependency on foreign oil. Whatever the legitimacy of that justification 40 years ago, the world has changed substantially since then. The United States is now the largest oil producer in the world and a substantial exporter. In reality, the CAFE program should be repealed entirely as obsolete. But if we are to have it, it should do the least harm possible.

The Obama administration, in contrast, saw the CAFE program as an opportunity to impose its environmental agenda. The CAFE mandates proposed by the Obama administration in 2012 were set so high that they were in effect impossible to meet – at least with cars using internal combustion engines. The mandates were so excessive that compliance was impossible without special credits given for producing electric vehicles. The 2012 mandates were thus effectively a backdoor electric vehicle mandate, forcing automakers to produce electric vehicles regardless of consumer demand. And boy, do consumers not want them. Since 2012 consumers have only accelerated their transition to SUVs and light trucks. Today over 70% of cars sold are these larger vehicles.

The rule finalized today by the administration recognizes the overreach of the previous Obama mandates as well as the realities of the current car market. The rule calls for fleet-wide fuel efficiency to increase by 1.5% per year (in contrast to the Obama effective level of 5% per year). This increase is attainable by carmakers, while still allowing for consumer choice. More importantly, by right-sizing the mandates, this rule would reduce the cost of new cars during the next five years. Reducing the cost of new cars encourages fleet turnover, which increases safety and has environmental benefits. Instead of holding on to older, less safe, less efficient vehicles, consumers will be better able to upgrade. The average age of the US vehicle fleet is about 12 years, the highest it has even been.

Ultimately the rule finalized today reduces the cost of new vehicles, increases consumer choice, and will improve the overall safety of vehicles on the road. What it does not do it try to force consumers to purchase electric vehicles, which is why the environmental left and their allies in the media are on the attack. The administration’s rejection of social engineering should be applauded. The CAFE program is long past its sell-by date, but today’s rule at least minimizes the program’s regulatory damage.

Filed Under: Blog, CAFE Tagged With: , , , , , ,

President Trump’s Fuel Economy Rule a Win for Consumers and Automakers

March 31, 2020 by Leave a Comment

Announcement shows regulatory reform of the Corporate Average Fuel Economy (CAFE) rule can serve as additional relief when the economy needs it the most.

WASHINGTON DC (March 31, 2020) – The American Energy Alliance welcomed the final Safer Affordable Fuel Efficient (SAFE) Vehicles Rule released by the White House today noting that clear auto fuel efficiency standards can benefit a majority of consumers and automakers simultaneously. Contrary to claims that this final rule has been rushed out in a time of crisis, the rule is the culmination of a several years long joint process from the National Highway Traffic Safety Administration (NHTSA) and the Environmental Protection Agency (EPA), and it is required by the law.

Thomas Pyle, President of the American Energy Alliance, issued the following statement in reaction to today’s announcement:

“President Trump inherited a CAFE mandate from his predecessor that was impossible to achieve without dramatically altering the automobile market or making the cost of vehicles out of reach for most American families. This new CAFE rule will make cars more affordable for consumers at a time when they need it most. The rule puts power back into the hands of drivers, not bureaucrats and most importantly, it will save lives. This is a win all around.”

“The reset of the fuel economy mandate, combined with the waiver rule issued last fall, will reestablish the states’ and the federal government’s proper roles with respect to whom determines national fuel efficiency requirements.”

“Make no mistake, this rule is not a retreat from the regulation of fuel efficiency, it is a year over year increase. While we would prefer the CAFE program was eliminated entirely, we are pleased that the Trump Administration has followed the intent of the law and restored integrity into this process.”

In combination with the previously finalized rule reclaiming regulatory authority from California, this rule corrects the Obama Administration’s expensive, coercive mandates, leaving businesses and consumers in control of what kind of cars to buy and sell. Like consumers, businesses can excel when they are presented choices and confirmation the rules in front of them won’t keep changing.

AEA, along with 30 additional organizations have argued that free-market mechanisms and developing lower-emitting vehicles should be decisions made by car manufacturers to meet the demands of consumers, not dictated by the government, be it state or federal. Most recently, AEA cheered the administration’s decision in September to rescind California’s waiver from the 1970 Clean Air Act (CAA) to regulate its own vehicle tailpipe emissions – a privilege previously granted by the Obama administration.

For media inquiries please contact:
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Filed Under: CAFE, Press Releases Tagged With: , , , , ,

We’re in the Coronavirus Fight Together…Almost

March 26, 2020 by Leave a Comment

As of Thursday, March 26, 2020, the number of confirmed coronavirus cases in the U.S. is nearing 70,000 and the global tally is approaching half a million. In an effort to stop the rapid increase in new cases and to keep hospitals within their capacities we have put much of our economic activity on pause. Twenty-two thousand people have died from COVID-19 already, the stock market has lost a third of its value, and unemployment claims have skyrocketed to record levels.

In response to the crisis, the world’s 7.8 billion people are united against a common foe like never before. We’re collaborating to manufacture medical equipment, to find therapeutic cocktails that can lessen victims’ suffering, and to create a vaccine. But if you’re under the impression that we have unanimity on the importance of stopping this virus’s spread, you’re wrong. In the midst of this deadly and economically-crippling struggle against the pathogen, some environmentalists are pleased.

Incendiary though that accusation may sound, one need only look to the philosophy of deep ecology to see that it is valid. Deep ecology—or as I sometimes call it, the nature-for-nature’s-sake view—holds that the preservation of wild nature provides the ultimate measure by which we should judge human behavior. The nature-for-nature’s-sake view is that humans have overstepped our just bounds and that we deserve only to be cut down. The deep ecologists see homo sapiens and our penchant for re-shaping our environment as a pox.

Most people are reluctant to make such categorical claims, preferring to espouse a “balanced” view, but they take for granted that when push comes to shove human beings will rally together. And yet push is coming to shove before our very eyes, and a non-trivial segment of the environmentalist movement literally is wishing us ill. Many who self-describe as environmentalists are people of goodwill, who genuinely want human beings to live happily; other environmentalists want the human population to be decimated. 

Jason Crawford, the founder of The Roots of Progress, describes this environmentalist rift as a bright line between people who want to save the planet for human beings and those who want to save the planet from human beings. 

The coronavirus puts the divide into sharp relief and puts a coda on decades of anti-human rhetoric.

The three examples below show that the nature-for-nature’s-sake ethical premise is a force that must be acknowledged and countered. In these most dire of times, the distinction is obvious, but when a return to normalcy does eventually come, we mustn’t forget that there are people within the environmentalist movement who would hasten our decline. 

  1. In 1989, environmentalist Bill McKibben authored a book entitled The End of Nature which details what he calls “environmental cataclysm.” In a review of The End of Nature for the LA Times, National Parks Service research biologist David Graber presented the thesis to the general public in words more poetically malevolent than McKibben’s own. In a concluding paragraph that anthropocentrists should ensure lives in infamy, Graber wrote:

“It is cosmically unlikely that the developed world will choose to end its orgy of fossil-energy consumption, and the Third World its suicidal consumption of landscape. Until such time as Homo sapiens should decide to rejoin nature, some of us can only hope for the right virus to come along.”

  1. In a 2013 interview with Radio Times, popular broadcaster Sir David Attenborough declared humanity a plague. Though stopping short of welcoming it, he blithely foretold of impending doom, expressing regret not for our fate, but for our impact:

“We are a plague on the Earth. It’s coming home to roost over the next 50 years or so. It’s not just climate change; it’s sheer space, places to grow food for this enormous horde. Either we limit our population growth or the natural world will do it for us, and the natural world is doing it for us right now,”

  1. And in the current coronavirus crisis, the echoes of the nature-for-nature’s-sake environmentalists are sounding again. On March 17, with COVID-19 ravaging Italy and picking up its pace in the U.S., Thomas Schulz, a San Francisco start-up founder, posted the following message on Twitter, garnering more than 290,000 digital nods of approval:

As champions of human flourishing, we wish to see the coronavirus stopped in its tracks. Most environmentalists do, too. But a lurking anti-human, nature-for-nature’s-sake segment within the environmentalist movement just might have found the virus they’ve been hoping for.

Filed Under: Blog Tagged With: , , , , , , , ,

Congressional Clarity Surfaces as Green New Deal Giveaways Cut from COVID-19 Stimulus Deal

March 25, 2020 by Leave a Comment

House and Senate Democrats cave, acknowledging unrelated renewable energy tax credits won’t stimulate the economy

WASHINGTON DC (March 25, 2020) – The American Energy Alliance (AEA) released the following statement after an announced deal between House and Senate leaders on a $2 trillion legislative package meant to protect our health and the economy as the nation navigates the COVID-19 pandemic. President Trump is expected to sign the soon-to-be-passed legislation.

Previous negotiations fell apart when Democratic leaders Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer, green advocacy groups, and renewable energy industry lobbyists attempted to insert unrelated and unnecessary tax extensions for electric vehicles, tax credits for wind, investment tax credits for solar and other clean technologies, and emission restrictions for distressed airlines.

Thomas Pyle, President of AEA, issued this statement:

“Three full days of dithering for a Green New Deal unnecessarily delayed the financial relief that American families and businesses so desperately need as we fight the coronavirus.”

“It is downright shameful that the Democratic Leadership put the priorities of the greens and the renewable lobby in front of health care providers, small business owners, and American families by holding up the relief bill in a failed effort to advance their unpopular progressive agenda.”

“The irony of holding up the economic relief package to push for a Green New Deal is not lost on American families. By design, the Green New Deal would eliminate or make prohibitively expensive the fuels vital to our economy and the products that we rely on for everyday living.”

“We commend Senate Majority Leader Mitch McConnell and President Trump for standing up for American families and businesses by refusing to let Speaker Pelosi hold the economic relief package hostage in exchange for an outrageous and harmful progressive wishlist.”

Additional Resources:

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Filed Under: Press Releases Tagged With: , , , , ,

Nancy Pelosi Holds Pandemic Relief Hostage for the Green New Deal

March 25, 2020 by 75 Comments

All last weekend, Democratic and Republican Senators huddled hour after hour hammering out a bipartisan deal to get financial relief to the individuals, companies and state and local governments affected by the widespread shutdowns in response to the spread of the Wuhan coronavirus.  By Sunday evening, a deal had been reached to send checks directly to American citizens, provide billions in funding to hospitals, make billions in loans available to businesses small and large. While not perfect, the deal provided an immediate injection of help to cratering American household budgets and the wider economy.

But Sunday night, returning from a weeklong recess, House Speaker Nancy Pelosi announced she was not satisfied with this bipartisan deal and would be introducing her own.  Suddenly, Democrats were demanding emissions limits for airlines, sweeping collective bargaining mandates, extensions of wind and solar tax credits, an extension of electric vehicle tax credits, federalizing state election rules, student loan cancellation, a bailout for the postal service, and on and on.  In fact, Pelosi’s demands looked a lot like the project of the left-wing of the Democratic Party known as the Green New Deal.

In 2009 the famous quote to accompany the bank bailouts and wasteful “stimulus” was “never let a crisis go to waste” from Barack Obama’s chief of staff Rahm Emmanuel.  In 2020, we get “a tremendous opportunity to restructure things to fit our vision” from Speaker Pelosi’s third in command, Rep. Jim Clyburn. The Democrats decided that an unprecedented global pandemic was the perfect opportunity to hold America hostage for their Green New Deal.

It is hard to understate the outrageousness and cynicism of Pelosi’s gambit.  Millions of Americans have already been laid off as businesses have been forced to close by state lockdowns.  Small businesses, like restaurants, face imminent bankruptcy as their revenues abruptly vanish. Hospitals, bracing for a flood of patients, are worried about making payroll.  The American people need immediate help, but at the last minute, Nancy Pelosi jeopardized everything for her Green New Deal.

Thankfully, such shamelessness was finally a bridge too far, even for a media that normally bends over backward to cover for the environmental left.  Under an avalanche of criticism, Pelosi backed down and finally today the Senate will pass the deal agreed to on Sunday with only a few minor tweaks (tweaks that Senate Republicans would have agreed to on Sunday).  

But we can’t forget this incident.  Nancy Pelosi has delayed this much-needed disaster relief by three days.  The end of the month is less than a week away when millions of individuals and businesses must pay rent and mortgages.  Even with the deal on Sunday, it was going to be hard for the government to get assistance out in time. With Pelosi’s cynical delay, it will take that much longer for relief to reach the American people.  

For three days, Nancy Pelosi held up pandemic relief for her own selfish political payoffs.  Even by the standards of Washington, DC, Pelosi’s gambling with the lives and livelihoods of tens of millions of Americans is shocking.  When Americans were desperate and hurting, Pelosi saw only a chance to jam the Green New Deal down the country’s throat. Never forget it.

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House Dems use Coronavirus to push Green Agenda

March 18, 2020 by 5 Comments

A coalition of House Democrats, environmental advocacy groups, and renewable energy trade associations are looking to take advantage of the economic slowdown caused by the COVID-19 pandemic by sneaking several renewable energy tax credits into an economic stimulus bill.

Let’s set aside for a moment the question of whether or not such stimulus packages are actually effective. The idea that renewable energy tax credits have anything to do with responding to the COVID-19 situation is, on its face, ridiculous. The focus of public policy in the wake of an extreme economic shock should be on allowing price signals to properly convey information to energy producers and consumers and on eliminating regulatory barriers that might prevent economic actors from adjusting to the changing circumstances presented by COVID-19. 

But it appears that House Democrats will instead use this situation to once again hand out favors to the renewable energy industry. Unsurprisingly, House Democrats plan to provide this support by promoting several tax credit provisions that they, along with environmentalists and renewable energy industry groups, failed to codify during the 2019 end-of-year funding package. These tax credit provisions would likely:

  • Provide batteries and electricity storage systems the same investment tax credit currently offered to PV solar
  • Extend the investment tax credit for solar
  • Extend the current production tax credit for wind
  • Extend the investment tax credit for offshore wind
  • Increase the number of vehicles that are available the electric vehicle tax credit

Of course, the renewable energy industry has a long history of taking advantage of economic stimulus bills. In the wake of the financial crisis in 2009, the renewable energy industry lobbied hard for the introduction of new tax credits, most of which were eventually included in the 2009 stimulus bill.

It should be obvious to any outside observer what this pattern says about the nature of the renewable energy industry. Although people in the industry often claim that renewable energy does not need the support of the government, we continue to see the renewable energy industry take advantage of every opportunity to benefit from government handouts.

As IER has explained in the past, renewable energy tax credits distort energy markets in several ways that ultimately raise energy prices for consumers. Lawmakers should, therefore, reject the renewable energy industry’s attempt to take advantage of another economic downturn. 

Filed Under: Blog Tagged With: , , , , , , ,

As Pandemic Spreads, Democrats Prioritize Green Giveaways for Special Interests Over Citizens

March 18, 2020 by Leave a Comment

House and Senate Democrats maneuver to slide unrelated renewable energy tax credits, green new deal policies into economic stimulus package meant to protect our health and the economy.

WASHINGTON DC (March 18, 2020) – Today, the American Energy Alliance (AEA) raised concerns about the ballooning $1.2 trillion stimulus package Congress is currently considering and what misguided proposals it may carry.

AEA pointed to reports that some House and Senate Democrats, environmental advocacy groups, and renewable energy industry lobbyists have revealed their intent to never let a serious crisis go to waste. Efforts are underway by members of the House Sustainable Energy and Environment Coalition and Democratic Senators Ed Markey and Sheldon Whitehouse to slip extensions for expired tax giveaways and green new deal policies into the current funding package meant to stabilize the economy and aid Americans suffering from coronavirus. In addition to the extension of the consumer tax credit for electric vehicles, additional measures sought include the extension of tax credits for wind, investment tax credits for solar and other clean technologies, and tax incentives for energy storage. Additionally, Sens. Markey and Whitehouse want to tie aid for airlines to green new deal emissions policies.

Thomas Pyle, President of AEA, issued this statement:

“Some Democrats in Congress are showing their true colors today. Determined to never let a good crisis go to waste, they are seizing the coronavirus pandemic as an opportunity to slip failed green policies into legislation designed to protect the American economy and stop the spread of this deadly virus.”

“The proposed inclusion of seven expired renewable energy tax credits will do nothing to stimulate the economy or help anyone’s general health, and will only line the pockets of renewable energy companies, the wind and solar lobby, General Motors, and Tesla. For industries that claim they no longer need the support of the government, we continue to see them try and capitalize on the suffering of everyday Americans in their pursuit of a seemingly never ending stream of government handouts.”

From the presidential primary, to the response to this unprecedented global pandemic, it appears that the green lobby is a growing and disturbing force within the Democratic party, driving them to an extreme, radical, out-of-touch agenda that is now literally bargaining with people’s lives. The Democratic leadership should immediately admonish those in their party who are attempting to use this crisis to reward their green cronies. It is the height if irresponsibility and an insult to each and every American.”


The renewable energy industry has a long history of taking advantage of a crisis. In the wake of the financial crises in 2009, the renewable energy industry lobbied hard for the introduction of new tax credits, most of which were eventually included in the 2009 stimulus bill.

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AEA Launches Initiative to Stop Special Interest Tax Giveaways

March 5, 2020 by 2 Comments

GOP Senators Should Reject Effort to Give Tax Breaks to Big Companies and Wealthy Coastal Elites

WASHINGTON DC (March 5, 2020) – The American Energy Alliance (AEA) turned their attention to the United States Senate today via an online advocacy campaign. In a series of digital ads, AEA called on all senators to block proposed amendments to the American Energy Innovation Act that would expand the unnecessary, inefficient, costly and unfair electric vehicle (EV) tax credit.:

Thomas Pyle, AEA President issued the following statement

“Some Senate Democrats are once again focused on expanding the EV tax credit despite its gross inequities. They are using the American Energy Innovation Act as a tool to enrich two auto companies, GM and Tesla, along with wealthy coastal elites, mainly from California and New York. It’s now time for all Senators, especially Republicans, to stand up for their constituents and stop this obvious handout. No amendments, no deals, and no extensions of the tax credit.”


AEA has repeatedly reminded lawmakers that 78.7 percent of the EV tax credits went to households with an adjusted gross income of $100,000 or higher, and more than half went to households with an adjusted gross income of more than $200,000. AEA has also done extensive public polling on EV subsidies and identified a clear theme – a majority of Americans don’t believe taxpayers’ money should go towards paying for other peoples’ cars. Voters’ sentiments against paying for other’s electric vehicles especially sharpen when they learn nearly 50 percent of all subsidies are going to California.

AEA has promised to score any votes on amendments to the American Energy Innovation Act that would have detrimental impacts to consumers and taxpayers. AEA regularly scores Congressional votes concerning significant energy and environmental policy issues via its Energy Scorecard, designed to educate lawmakers about the most important energy votes of the year and empowers the American people to hold their elected officials accountable for the decisions they make in Washington.

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Key Vote: Energy Bill Amendments

March 4, 2020 by Leave a Comment

The American Energy Alliance urges all Senators to reject harmful amendments to the introduced American Energy Innovation Act. Numerous proposed and filed amendments have no place in this legislation. Legislative action in such areas as the Kigali Amendment limiting HFCs, the Land and Water Conservation Fund, and electric vehicle and other tax credits, among others should be debated on their own merits, not attached to this larger bill in an attempt to sneak them to passage. An egregious example of this is Wyden amendment #1397, which seeks to revive or create every conceivable special interest tax credit.

The AEA will score any harmful amendments which are brought to a vote with additional vote alerts as amendment slates are agreed upon. Further, although AEA does not currently expect to score the final vote on this legislation, should any harmful amendments be successfully attached to the current legislative language, AEA reserves the right to score the final legislative vote.

The AEA urges all Senators to oppose extraneous amendments to the energy bill. Any amendments which are voted on will be included in the American Energy Scorecard.

Filed Under: Scorecard Tagged With: , , , , , ,
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