Comment Period Open for EPA’s Latest Carbon Regulation

Potentially devastating to our state. That’s how we view a new Environmental Protection Agency (EPA) regulation to strictly limit carbon emissions from the nation’s existing coal-fired power plants. This latest proposal comes on the heels of a plan to put in place greater pollution controls for any new power plants.

The President has left no doubt that he is mounting an all-out war against coal. Congress refused to bite on a climate change bill, so he’s spending his second term trying to legislate via the EPA. Smart, necessary regulations make sense, but that’s the opposite of what we have here; it’s entirely unreasonable given our nation’s energy needs.

These EPA regulations also will barely even move the needle toward reducing carbon emissions (not even by 2% according to the U.S. Chamber of Commerce’s Institute for 21st Century Energy), but they will deal a tangible blow to the national and state economies.

The Institute for 21st Century Energy predicts the regulations will result in a whopping $51 billion in annual economic losses through 2030. On top of that, some 224,000 Americans will lose their jobs and consumers will pay $289 billion more for electricity. Separately, the U.S. Department of Energy has estimated the electricity cost increase could be as much as 80%.

Most Hoosier businesses and families can’t afford to pay that, and they certainly can’t afford a slumping economy and job market.

The reality is that Indiana will be hit far harder than most states because it’s the number one per capita manufacturing state in the nation. Over 80% of Indiana’s electric power comes from coal, compared to only 45% for the country. Despite diversification efforts, coal remains Indiana’s primary energy source.

For decades, companies that have located in Indiana have often cited a reliable and affordable supply of electricity among the determining factors, according to site selectors and information gathered by state government. Losing that competitive advantage entirely is now a real possibility with coal coming under attack by the Obama administration.

We encourage you to let the EPA know your thoughts on this latest regulation by visiting www.indianachamber.com/EPA. Also, let your members of Congress know; they need to take action before irreparable damage is done to our economy.

Time is Now for Pres. Obama’s Overdue Support for Keystone XL Pipeline

The Indiana Chamber supports the construction of the Keystone XL Pipeline as a means to reduce our national dependence on unstable governments, improve our national security, strengthen ties with an important ally and promote the production of Canadian oil. Based on a recent ABC News/Washington Post Poll, most of the country agrees.

Here’s a recent summary of the Chamber’s position:

Indiana and our country are deeply dependent on foreign oil sources from countries that are typically not our friends. Canada has vast oil reserves and is presently our number one supplier of oil. It is critical that we continue to have a positive relationship with Canada by supporting their oil production and the pipeline that will carry this crude. Many Indiana companies supply various products and materials that will be used to refine this oil and move it through the pipeline.

Additionally, the Chamber agrees with Deroy Murdock’s recent column for National Review Online that President Obama needs to stop wavering and approve this project. Read the full article, but here’s an excerpt:

Five years and five months have passed since TransCanada first asked the State Department to bless KXL. Since the pipeline would cross America’s international border with Canada, it requires presidential approval, typically influenced by the State Department’s guidance. Since TransCanada filed its application on September 19, 2008, State has been very generous with its advice, offering at least five different assessments on KXL:

• On April 16, 2010, State found that KXL would have “limited adverse environmental impacts.”

• On August 26, 2011, State stated that “There would be no significant impacts to most resources along the proposed pipeline corridor.”

• On March 1, 2013, State virtually echoed its previous report when it ruled that “there would be no significant impacts to resources along the proposed Project route.”

• This past January 31, State concluded that “approval or denial of any one crude oil transport project, including the proposed project, remains unlikely to significantly impact the rate of extraction in the oil sands, or the continued demand for heavy crude oil at refineries in the U.S.”

• On February 26, State’s Office of Inspector General rejected charges that the department’s KXL review suffered ethical lapses: “OIG found that the department’s conflict of interest review was effective and that the review’s conclusions were reasonable.”

Obama’s 61-month-long navel-gaze on KXL (atop the four months that State pondered the pipeline late in G.W. Bush’s presidency) is pathetic when compared with American milestones that were achieved in less time:

• NASA needed four years, from 1979 to 1983, to build the Space Shuttle Discovery.

• As OilSandsFactCheck.org outlines in an excellent infographic, it took just two years (1941 to 1943) to build the Pentagon — the world’s largest office building, and home to 30,000 military and civilian employees.

• The Golden Gate Bridge linked San Francisco and Marin County, Calif., after just four years and four months of work over one of America’s most unforgiving waterways. Construction began on January 5, 1933. Pedestrians first crossed the bridge on May 27, 1937; cars followed the next day.

• Hoover Dam required five years of construction (1931 to 1936). It was finished two years ahead of schedule.

• It took one year, three months, and nine days to erect the Empire State Building. Between January 22, 1930, and May 1, 1931, a force of 3,439 men built what became — at 1,454 feet — Earth’s tallest skyscraper.

Obama’s endless “study” of Keystone is disgraceful. If he believes it should be built, he should approve it. TransCanada will invest $5.3 billion to build the pipeline. Taxpayer cost: $0.00. While some 10.2 million Americans officially are out of work, KXL will offer direct or indirect employment to an estimated 42,100 people.

“These jobs are really good-paying jobs,” says Union Business Manager magazine. “They provide not only a good living wage, they provide health care, and they also provide pensions.” Senate Republican leader Mitch McConnell of Kentucky calls KXL “the single largest shovel-ready project in America.”

Beyond the unemployed, all 315 million Americans would enjoy the steady flow of friendly oil from a NATO military ally. Every petrodollar exported to Canada is one less dollar shipped to overseas oil producers — such as terrorist-funding Saudi Arabia, gay-jailing Nigeria, and the Crimea-invading Russian Federation.

Chamber’s Top Legislative Priorities in 2014

Eliminating business personal property tax, allowing employers to screen prospective hires for tobacco use and establishing a work share program are among the top legislative priorities for the Indiana Chamber of Commerce in 2014.

“In many categories of commercial and industrial property tax, Indiana is among the very highest states in the country. That’s largely due to our taxing of machinery and equipment. It’s a remaining black mark on our tax climate – an area where we simply can’t compete,” declares Indiana Chamber President and CEO Kevin Brinegar.

“All of our surrounding states have done away with the tax except for Kentucky, which taxes personal property at a lower rate than Indiana. It’s past time to remove this burden that can greatly hinder business expansion and innovation.”

On the health care front, the Indiana Chamber is seeking to repeal what is termed the smokers’ bill of rights for prospective employees.

“This is an intrusion into the rights of employers in making hiring decisions. Holding smoking up to the same standards as we hold discrimination based upon race, gender, religion and ethnicity seems arbitrary and without justification,” Brinegar offers.

“There are other behaviors (such as substance abuse and having a criminal record) which are also personal choice and over which employers do have discretion in hiring decisions; this reinforces that the state’s protection for smokers is unnecessary and not well founded.”

One policy the Indiana Chamber believes would benefit employers, employees and the state is a work sharing initiative that would allow employers to maintain skilled, stable workforces during temporary economic downturns.

“Employers would be able to reduce hours without layoffs and provide unemployment compensation to partially compensate workers for their lost hours. Then when circumstances improve, employees could return to full-time work status for the company,” Brinegar explains.

“What’s more, a federal grant is available for three years to pay for the cost of the program. It’s a positive scenario for all parties.”

When it comes to K-12 education, Brinegar says the Indiana Chamber will continue to push for the absolute best academic standards for the state.

“That’s the bottom line. We need to improve student learning, meet the essential college- and career-ready requirement and have an appropriate student assessment system. Those elements all currently exist within the Common Core State Standards program, which we continue to fully support.”

Below are the Indiana Chamber’s top legislative priorities. The complete list is also available on the Indiana Chamber web site (www.indianachamber.com).

CIVIL JUSTICE
Support regulating the practice of lawsuit lending, in which a third party provides a plaintiff a cash advance loan while the legal case is pending. In turn, a plaintiff agrees to repay the advance (which is usually at a high interest rate) from the lawsuit proceeds. This practice complicates the legal process by forcing more cases to go to trial because the plaintiffs can’t afford to settle due to their repayment agreement with the lender. In turn, this causes more and more Indiana businesses to pay expensive legal fees. This lending practice is legal in most states, but regulation and transparency do not exist in Indiana.

ECONOMIC DEVELOPMENT
Support a voluntary vehicles miles travelled (VMT) pilot program as a potential replacement for existing fuel taxes. With Indiana’s already insufficient fuel tax revenues for roads/transportation trending down and more fuel efficient and electric/hybrid vehicles on the roads, a new funding mechanism for road maintenance needs to be found. Owners of alternative-fuel vehicles, including electrical vehicles, should pay for the roads they use just like other drivers. Voluntary VMT pilots in other states are currently taking place and Indiana cannot afford to ignore this potential road funding alternative.

Support expanding the patent-derived income tax exemption to the pre-patent phase. This incentive change would allow innovative, high-tech businesses that typically pay high wages to qualify during the earlier patent-pending phase of the (often long) patent application process, thus carrying forward any credit. Many emerging businesses would find this helpful in capitalizing their start-ups and expanding hiring. (Current law states you must have had a patent issued by the federal government before you can apply for the exemption.)

EDUCATION
Support maintaining high-achieving academic standards, such as the Common Core, and allowing the State Board of Education (SBOE) to determine student assessments. Indiana needs standards that improve student learning and meet the college- and career-ready requirement. The testing component of the standards can best be determined by the SBOE.
Support a framework for the future development of publicly-funded preschool initiatives for low-income families. There is critical need for improved preschool opportunities, especially for low-income children whose families may not have the means to provide a high-quality preschool experience or to provide needed learning opportunities in the home. The Indiana Chamber supports publicly-funded preschool programs that are: focused on those families in greatest need, limited to initiatives that maintain parental choice, focused on concrete learning outcomes and integrated with reforms at the elementary school level that will maintain and build upon the gains.

ENERGY/ENVIRONMENT
Support a water policy to stabilize our economic future and effectively compete with other states. A policy/plan is needed in order for the state to effectively manage its significant water resources, as well as to ensure delivery of an adequate, reliable and affordable supply of water.

HEALTH CARE
Support repealing the smokers’ bill of rights for prospective employees from the Indiana Code. The Indiana Chamber believes that all employers should have the right to choose whether or not to screen and/or hire prospective employees who use tobacco products. Since employers are footing most of the bill for health care costs for their employees, they should be able to have some discretion in determining whether new employees use tobacco products or not.

Support reinstating the wellness tax credit. The Indiana Chamber supports this incentive to start a wellness program, which can increase attendance, boost morale and productivity, as well as positively impact health care coverage costs.

LABOR RELATIONS
Support a work sharing program that will allow employers to maintain a skilled stable workforce during temporary downturns. Employers then could reduce hours without layoffs, enabling workers to keep their jobs – which hopefully could be returned to full-time status once economic circumstances improve. Also part of the equation: Unemployment compensation to partially compensate workers for their lost hours.

LOCAL GOVERNMENT    
Support common sense simplification and reforms to local government structures and practices. Creating the option for counties to have a single county commissioner and county councils with legislative and fiscal responsibilities is one that several Indiana counties desire. There should be incentives to reward local government efficiencies and performance in the delivery of services to taxpayers.

TAXATION
Support legislation to reduce the dependence on the taxation of business machinery and equipment. This tax discourages capital investment, places a disproportionate property tax burden on businesses and puts Indiana at a competitive disadvantage with surrounding states that have eliminated it or are moving to do so.

Americans Say ‘Yes’ to Keystone XL

If public sentiment is a factor in the Obama admistration's final decision on the Keystone XL pipeline, it's time to let the oil flow. The latest survey results are consistent with previous polls, except that the numbers in support continue to grow to even higher levels.

The United Technologies/National Journal survey says:

While the Obama administration mulls whether to approve the controversial Keystone XL pipeline, Americans are already decided. They support the project by a wide margin, prioritizing potential economic benefits over possible environmental consequences.

The poll finds that more than two-thirds of respondents, 67 percent, support building the pipeline to carry Canadian oil to refineries on the U.S. Gulf Coast; that includes 56 percent of Democrats. Less than a quarter of Americans, 24 percent, oppose the project, the poll shows.

The State Department is evaluating the proposal, and President Obama said last month that the pipeline should not be permitted if it leads to a significant increase in greenhouse-gas emissions. There is no timeline for a decision, but the State Department says it is evaluating the project in "a rigorous, transparent, and efficient manner."

In the question posed by interviewers, poll respondents were told that Keystone supporters "say it will ease America's dependence on Mideast oil and create jobs," while opponents "fear the environmental impact" of building the pipeline.

Congressional Republicans have been prodding the administration to approve Keystone, with the GOP House holding a symbolic vote in support of the pipeline in May. (That measure won unanimous support from Republicans, save for one member who voted "present," while 19 Democrats also voted in favor.)

Mr. President, It’s Time to Approve Keystone Pipeline

It's Keystone Pipeline time again. The Obama administration rejected the original plan last year. A new route for the job-creating, energy-supplying pipeline has been proposed and supported this time by the Nebraska governor. Despite climate change discussion, here's why the President should not stand in the way, according to The American Conservative:

This should be a no-brainer at this point. The Obama administration’s refusal to approve the pipeline shadily cited a lack of time to review the proposal; a presidential statement last year noted that the delay was “not a judgment on the merits of the pipeline.” Well, time has passed. Environmental impact has been studied.

As the editors of the Washington Post observe:

TransCanada has reapplied with a new proposed route, and this week Nebraska Gov. Dave Heineman (R) signed off on the plan, following an analysis from the state’s Department of Environmental Quality. The regulators found that the new route would avoid the Sand Hills and other areas of concern. Though there is always some risk of spill, they said, “impacts on aquifers from a release should be localized, and Keystone would be responsible for any cleanup.” TransCanada will have to buy at least $200 million in insurance to cover any cleanup costs.

Adding to that, a letter signed by 53 senators, including nine Democrats, urged Obama to go ahead with the pipeline. “There is no reason to deny or further delay this long-studied project,” it said.

The decision to delay the pipeline reeked of election-year politics. Needless to say, the political calculus has changed. There’s a view that the rhetorical privileging of combating climate change in Obama’s second Inaugural Address will make it hard to throw environmentalists under the bus over Keystone. I think it makes it easier. Approving the pipeline offers Obama a small Nixon-to-China-like opportunity to say something like, We can safely fulfill our energy needs now while laying a foundation for a clean-energy future.

‘Smart’ Efforts Help Restore Power

Some East Coast communities have been able to rebound from Superstorm Sandy faster than others. Part of the reason can be attributed to smart grids and smart power meters. Stephen Goldsmith writes about their impact now and in the future in Governing:

Sandy’s claiming of the title as the second most costly hurricane in U.S. history shows us the advantages and limitations of rigorous planning. The slow and arduous recovery faced by some East Coast communities has been coupled with the impressive speed with which many other communities have been able to return to business as usual. New emergency procedures put in place at the local and state levels deserve a lot of the credit. These included shutting down infrastructure and battening the hatches to protect vital resources and prepare for recovery.

Yet the storm teaches us that the best way to plan for the truly unexpected will be by being prepared to to improvise and by understanding that resilience in times of disaster isn’t determined only by a static disaster plan but to a greater degree by being dynamic and responsive to change. Being dynamic requires real-time data. Recent technologies are beginning to provide more access to more data, allowing analytics to find the patterns fast enough to make it useful during a disaster.

Smart grids, and particularly smart electric meters, played a promising role in improving disaster response and the speed with which power could be restored after Sandy passed. That role was small-scale and local, since electric utilities’ conversion to smart-grid technology has been slower and spottier than desired, but the potential is there for the technology to have a much larger impact as these systems are rolled out more widely.

At best, phone calls and spotty service-outage reports can slowly piece together a hazy picture of the conditions of a power network. But smart meters, programmed to send out a "last call of distress" when power is lost, can automatically report service cuts. This gives a utility company instant access to regional maps of outages, allowing it to prioritize repair-crew mobilization and begin getting service back to customers without them even having to report an outage.

Smart meters also can help identify the locations of particularly tricky "nested" outages, when more than one break is affecting an area. Additionally, smart meters can automatically report getting back on line when power is restored, eliminating unnecessary calls between the utility company and customers or follow-up service-crew visits. Repair crews can move on to the next repair rather than spending time checking on their last one, increasing efficiency and reducing system repair time considerably.

Pepco, the electric utility serving Washington, D.C., and nearby parts of Maryland, is crediting its partially implemented smart-meter system with helping get the power back on for its 100,000 customers affected by outages in the wake of Sandy. The store of information generated by the smart meters not only is available to the company’s repair crews to inform their response but also is aggregated into a regional map available online to give customers a better idea of system conditions.

PPL Electric Utilities’ smart meters allowed the company’s Pennsylvania customers to check on the status of their power’s return online and from the safety and comfort of remote locations, without having to trek out to potentially powerless homes or using the precious resource of repair-crew hours to do so. And while Baltimore Gas and Electric’s smart-meter system is only 10 percent complete, the utility credits the program with facilitating much faster troubleshooting and with replacing phone calls to customers to check on service–calls that often go unanswered–with a quick and reliable stream of information.

The next time a major storm hits, there will be more examples of service-restoration improvements enabled by this technology. In the face of consumer suspicions and resistance to smart meters, utilities need to publicize these success stories to build support for continued smart-grid development. The more data government and utilities can tap, the faster they can act and the more resilient a community can become.
 

State Rep Leading Charge for Natural Gas

Did you see gasoline prices at the pump hit almost $4 recently? Earlier in the year experts projected that we’d see it go as high as $5 this summer – and summer is definitely not over.

Depending on how often you fill your gas tank, driving back and forth to work, the grocery store, daycare – just the basics – can add up quickly. (We budget at least $300 a month for gasoline in our household, with only one car and a small child keeping us at home most evenings.)

Imagine having a fleet of vehicles that have massive tanks to fill (dump trucks, ambulances, school buses, tractor trailers, snowplows). That would add up quickly – and does – for the state of Indiana and public and private businesses of all types here. 

The point is: gas is expensive; diesel is expensive. And, neither are the cleanest fuel options available. But, is there another legitimate option? Possibly.

State Rep. Randy Frye (R-Greensburg) is leading the charge for compressed natural gas as an alternative. During the recent Clean Energy Summit held at the Indiana Chamber of Commerce, Frye invited Greater Indiana Clean Cities Coalition Executive Director Kellie Walsh to present information to a group that included representatives from a number of utility and energy organizations.

Walsh’s presentation highlighted the fact that 80-90% of natural gas is produced domestically. 

Some other interesting facts:

  • Natural gas is not a threat to soil, surface water or groundwater; its nontoxic, noncorrosive and non-carcinogenic
  • It has lower ozone-forming emissions than gasoline
  • Most natural gas is drawn from wells or in conjunction with crude oil production and can come from subsurface porous rock and shale
  • Natural gas powers about 112,000 vehicles in the country and roughly 14.8 million worldwide and has been used as a transportation fuel for over 30 years
  • Compressed natural gas and liquefied natural gas are considered alternative fuels under the Energy Policy Act of 1992

Frye told Inside INdiana Business with Gerry Dick that the state could save around $200 million in fuel costs over a 10-year period by switching vehicles to compressed natural gas. He intends to work on legislation to incentivize the switch, he says.

While the natural gas seems to be there for the taking, there is not much infrastructure in place to support it: filling stations would have to be built; fleets would need to be retrofitted with natural gas engines (which Cummins makes already, by the way).

This just scratches the surface of the positives and negatives of natural gas; most likely it will be a story that we follow in the near future.  

Keystone XL Pipeline Wins on Capitol Hill Not Enough

The Congressional scoreboard reads 5-2 in favor of the Keystone XL pipeline. But few believe the job-creating project to transport oil from Canada to the U.S. Gulf Coast is any closer to its needed U.S. approval.

The House passed (293-127) a federal transportation bill Wednesday that will now go to conference committee. A provision in that legislation would force the administration to approve the pipeline.

It is the fourth time the House has given its approval on the project, expected to create thousands of jobs during the construction phase and help increase energy security in the long term. The Senate has taken three votes, passing it once as part of the payroll tax deal late last year and defeating it twice.

Not to be forgotten is the importance of the transportation bill. The Senate passed a two-year, $109 billion program two weeks ago. It is expected to be the basis for the conference committee negotiations.

The White House has already threatened to veto the highway bill if the Keystone language remains. Both, however, are critical to funding ongoing infrastructure needs and putting people back to work.

In the upcoming BizVoice magazine (available May 3 in print and online), I’ll have a one-on-one interview with Canadian Consul General Roy Norton, who talks about the importance of this project, the critical Ambassador Bridge between Detroit and Windsor, and other opportunities between the two North American neighbors.

Canadian Bankin’

Pardon the title, but Canada is in a position to make some serious bank off of its natural resources — namely oil. In our upcoming May/June edition of BizVoice magazine, Communications VP Tom Schuman has an interesting interview with Roy Norton, Consul General of Canada, about how Canada plans to move forward after President Obama’s rejection of the Keystone XL Pipeline. Although, Obama contends the rejection was pending more environmental review and may not be permanent. (If you have a few minutes, read Norton’s remarks when he spoke to a group at the Greater Fort Wayne Chamber of Commerce in February.)

At any rate, I just perused the article in the editing process and I think our readers will be intrigued by our northern neighbor’s concerns and ambitions. It also includes a quote from Norton that reinforces why the Indiana Chamber endorsed Sen. Richard Lugar in the 2012 GOP primary and general election:

"You can safely say that if there is one person in the United States Congress who gets the geopolitical importance and relevance of achieving North American energy self-sufficiency and what that could mean for North America in unburdening us, making us less susceptible to Iranian adventurism and Venezuelan adventurism, it’s your senior senator from Indiana." – Norton

Fewer Voters Blame Pres. Obama for Gas Prices

Personally, when I see a hyperpartisan political opponent of a sitting president prattle on about how he’s responsible for high gas prices, I generally roll my eyes. (Truth be told, I generally roll my eyes when hyperpartisan people say anything.) It just seems like there are a lot of factors — OPEC-related and the like — that are out of America’s hands (although President Obama’s rejection of the Keystone XL Pipeline likely won’t help matters). But according to a recent Washington Post article, fewer voters appear to be blaming the President for lofty costs at the pump:

Back in September 2005, gas prices surged to $2.90 per gallon across the country ($3.50 in today’s dollars), largely because Hurricane Katrina had shut down production across the Gulf of Mexico — an event that couldn’t plausibly be blamed on Bush. Yet 28 percent of Americans still blamed the president anyway. (Of course, one explanation is that voters were expressing discontent with the way the Bush administration handled the aftermath of Katrina.)

This time around, meanwhile, gas prices are even higher — the national average is now $3.74 per gallon — largely due to tight supplies and tensions between the United States and Iran (and the latter situation is something the White House actually is heavily involved with). Yet only 18 percent of Americans say the president’s responsible for pump prices. The number of Americans who are refusing to assign blame has jumped. Who knows? Perhaps after years of high gas prices a sense of fatalism has set in.

This jibes with political science research finding that, for the most part, a president’s re-election doesn’t hinge on the price of gasoline. Of course, that doesn’t mean that gas prices are meaningless — or that Obama can breathe easy about the situation. If spiking oil prices end up biting into economic growth, then the president’s prospects for re-election really would start sinking. As always, the economy matters a lot.