Federal government over-regulates industry

Rep. John Adams Majority Whip Published:

Ohio is at the center of a very transformative revolution. Our newly accessible oil and natural gas resources have the potential to revitalize our economy and rejuvenate a once-struggling manufacturing sector. While the State of Ohio encourages energy development, outside of Ohio many energy projects have been blocked or delayed by stifling over-regulation from Washington. 

Energy development and infrastructure projects across the country increasingly face significant delays, regulatory hurdles, and litigation by opposition groups. Two recent examples of delayed projects - the Keystone XL pipeline and Shell's plans for drilling off Alaska - should remind Ohio that, now more than ever, we must demand a balanced U.S. energy policy predicated on sound, efficient regulation.

Both Keystone XL and Shell's Alaska venture illustrate the truly mind-boggling labyrinth of regulatory delays that energy producers must endure nowadays.  For TransCanada, the company proposing to build the Alberta-to-Texas oil pipeline, delays and a mandated route-change through Nebraska have added more than a billion dollars to the cost of the project, suspended tens of thousands of high-paying jobs, and delayed the investment of more than $20 billion into the U.S. economy.

Similarly, Shell has invested over $4 billion to explore its leases in the Chukchi and Beaufort Seas north of Alaska.  After five years of planning, the company has yet to complete a single well due to ongoing regulatory delays. Recently, the Obama Administration glibly stated that ongoing delays were simply Shell's fault.  In response, Alaska Governor Parnell sent a letter to Congressional leaders refuting the comment and outlining the "pattern of federal obstruction designed to prevent development of Alaska's abundant resources base."    

What should we draw from these examples? Principally, I would argue that no energy project is safe from government interference. Right now, the U.S. Environmental Protection Agency and a host of other federal agencies are examining ways to limit or ban hydraulic fracturing - a technology central to Ohio's shale boom.  Such measures would stifle our energy revolution and upend our hopes for significant job creation and economic growth.  We must acknowledge and respond proactively to attempts of government over-reach from Washington.

Second, energy production across America will be vital to growing our economy and stabilizing energy costs. Last year, I co-sponsored a House resolution (H.R. No. 305) that urged the Obama Administration to allow for oil and natural gas production off Alaska and in the Gulf of Mexico as well as permit the Keystone XL pipeline.  I supported the resolution because I understand how my constituents benefit from these projects: U.S. energy development creates jobs, generates tax revenue, lowers energy costs, and bolsters our nation's independence from overseas oil.

The Utica and Marcellus Shale could be a windfall for Ohio consumers, laborers and taxpayers.  Already, lower natural gas prices as a result of increased supplies have saved Ohio homeowners over $200 in 2010. If the shale revolution proceeds, we can expect to see the creation of over 80,000 jobs and the generation of over $1 billion in government revenues for the state in the next few decades. Many in Eastern Ohio may not be surprised by these statistics; they are direct beneficiaries of this transformation.

Buckeyes should rejoice in our newfound energy prosperity. But, we must remain vigilant to protect our rights to develop our resources. Given what we've seen across the United States, we can no longer blithely assume that the Shell Alaska and TransCanada examples are merely outliers. In fact, they may be the new standard of regulatory overreach. If we allow the federal government to continue this pattern of delay, Ohio energy consumers, workers and taxpayers will ultimately pay the price.

Representative John Adams is the House Majority Whip of the Ohio House of Representatives, representing District 78.

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