By Nicholas “Corky” DeMarco
West Virginia Oil and Natural Gas Association
CHARLESTON — Guiding Washington policy these days seems to be the philosophy of picking winners and losers, and it is an approach that is doing significant harm to West Virginia because of its effects on the state’s natural resource industries. One example is the Obama Administration’s recent upward recalculation of the “social cost of carbon.”
As reported by Politico, a newspaper covering Capitol Hill: “The Administration revealed the change in the quietest way possible, outlining the new cost estimate on Page 409 of Appendix 16A of a technical support document for an Energy Department regulation on microwave ovens.”
California Republican Duncan Hunter alleges that the calculation of cost was manipulated “to justify sprawling new regulations.”
Along with WV Rep. Nick Rahall Duncan is drafting legislation that would require changes in cost-benefit calculations done transparently and with notice to and input from the public.
West Virginia’s oil and gas industries, along with coal, are the targets of constant regulatory focus by the Obama Administration. We are seeing the impacts in the Mountain State of decisions by the president to push his global warming agenda through regulations because he cannot persuade Congress to enact laws that embody his political vision. Just recently the U.S. Court of Appeals for the District of Columbia struck down an EPA rule that exempted carbon dioxide emissions from paper and wood product industries and ethanol producers from regulations mandating curbs on greenhouse gas emissions. So while West Virginia’s extractive industries are under assault because of carbon dioxide emissions, certain favored industries should be exempt, according to the Administration. The court ruled otherwise.
One of the benefits of promoting and increasing oil and gas development in West Virginia is that it helps to decouple American energy requirements from OPEC. Even in its publications OPEC recognizes that advances in technologies for extracting oil and natural gas from shale is reducing our dependence on its producing countries.
Another benefit is the potential for significantly improving the state’s economy. While the fortunes of North Dakota are not directly translatable to West Virginia, it is instructive to consider what is happening in that state as a result of energy development.
In its July report, the U. S. Energy Information Administration reports significant gains in the state’s Gross Domestic Product per capita coinciding with development of the Bakken Shale. In 2012 the state’s GDP was 29 percent higher than the national average. The U. S. Bureau of Economic Analysis reports that North Dakota’s GDP in 2012 was 11 percent higher than the year before compared with the national growth rate of less than 2 percent. West Virginia’s GDP rose a shade over 3 percent. West Virginia energy holds the promise of a better Mountain State economy. We have the potential to supply more of our country’s energy requirements and to export a portion of our energy products. And this leads to the creation of jobs and increased economic activity at every level of our society.
But that requires that governmental actions have the goal of enhancing the development and use of our abundant resources — yes, in an environmentally responsible manner — rather than shutting them in. The government’s “social cost of carbon” calculations — done in a bureaucrat’s back room office without input from or examination by affected parties and hidden deep inside a technical report — are a hammer intended not to build but to knock down our energy resource industries.