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Congressman Garret Graves

Representing the 6th District of Louisiana

How Current Federal Energy Policy Hurts Louisiana

April 1, 2016
Blog Post

George Orwell famously critiqued how politicians use language “to make lies sound truthful” and “to give an appearance of solidity to pure wind.” The Obama Administration’s claimed support of an “all of the above” energy strategy is as Orwellian as it is disingenuous. In its description of the strategy, the White House cites economic growth, job creation and energy security as pillars of the president’s plan, but the 11,700 energy workers in Louisiana who have lost their job in the last 12 months know that the facts tell a different story. A sample of the Administration’s recent initiatives demonstrates how current federal energy policies compound the historic slump in our energy economy.

The Bureau of Safety and Environmental Enforcement (BSEE) intends to move forward with its proposed well control rule despite repeated efforts by industry, advocacy groups and Members of Congress to initiate a rewriting of the regulation to better incorporate technical expertise associated with offshore energy operations.   As I first noted in last quarter’s report, the rule is a response to the 2011 Deepwater Horizon (DH) disaster, but it is largely a solution in search of a problem. The new regulations carries a stated goal of ensuring safe operations in the Gulf of Mexico – an objective I fully support – but the way it was produced ignores the root causes of DH, the track record of safety in the Gulf of Mexico and regulatory advancements since 2010. It is another example of how uninformed bureaucrats attempt to write highly-technical rules and entirely miss the mark on how the real world works.  Government and private estimates put compliance between $880 million and $95 billion – a drastic range that underscores the widespread uncertainty about the rule’s implications.  The total cost may be open to debate, but a de facto drilling moratorium in the Gulf and a devastating loss of future energy jobs are certain consequences. Implementing this misguided regulation will bring additional economic hardship and add insult to injury for the thousands of families impacted by the 2011 tragedy.

The White House also undermines our national energy security through its foreign policy. Consider this: Iran holds the world’s largest reserves of natural gas and the fourth largest oil reserve in the world. Because of last year’s agreement between the United States and Iran – which I opposed – Iran is ramping up production and export activities. Iran is already slowly increasing its market share and will become a considerable world trading partner at a time when oversupply continues to suppress prices in the global market. (Recall that the White House adamantly opposed lifting America’s self-imposed ban on crude oil exports before reluctantly capitulating during negotiations of the omnibus spending bill at the end 2015.) Why would our president champion a policy that encourages job growth in a country that doesn’t share American values while pursuing policies that discourage job growth here? I’ve been outspoken about my belief that we should not allow Iran – the world’s largest state sponsor of terrorist organizations – to cash in on this opportunity. 

Finally, the president’s budget proposal submitted to Congress earlier this year further exposes intent to discourage the growth of our energy sector. In addition to hundreds of millions of dollars in new industry taxes and compliance costs, the proposal included a new tax of $10.25 per barrel of oil produced in the U.S. Such a tax would fundamentally increase the cost of domestic production, translate to higher prices at the pump for consumers and erode America’s price competiveness in the global marketplace. No one buys Louisiana’s oil if the president’s tax makes it 30% more expensive than our competitors’.

When the impacts of these policies are in plain view, it’s easy to understand why people are frustrated with government. Energy is critical to our state’s economy and budget, but executive decisions out of Washington kill jobs, exacerbate the state budget crisis and jeopardize our otherwise promising future in exploration, production and exporting. Flawed federal energy policies multiply the economic consequences of depressed energy prices and ultimately translate to higher state taxes for you and me. I’d like the president to explain his “all of the above” energy strategy to the thousands of Louisiana families struggling to make ends meet.

The good news is that much can be done to prevent full implementation of many of these damaging policies – specifically with respect to ill-advised, unilateral regulations. We are vigilant and unified with other leaders in Congress in an unwavering commitment to push the White House to change course. Industry, policymakers and ordinary people must continue to engage and work together to ensure America’s long-term economic and energy security. Visit garretgraves.house.gov/issues/energy to learn more about our efforts on this front.

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