To our Canadian & U.S. marketers

Note from our Mid-Atlantic energy analyst guru: “…the market will not see a further meaningful increase in crude oil without some weakening of the dollar.   Also, natural gas will be hard pressed to move with conviction until the cost of capital (as indicated by the rate on the benchmark ten-year bond) rises.”


From our Southeast Alaska friend Denny DeWitt comes this letter requesting the Alaska Delegation to use the  Congressional Regulatory Review Act (CRA) to stop implementation of the new ROD for the Tongass Management Plan and the BLM Eastern Interior Alaska Land Management Plan.  (Could it be we may be entering a new era of good news for those seeking a prosperous future for their children?  -dh)


 

Note: With the BLM controlling so much of the federal government’s land holdings — especially in the Western states and Alaska — Congressional initiative combined with Presidential action is critical to the energy industry and, as well, to consumer energy prices throughout North America.  -dh

Feb. 9, 2017

Permission to republish original opeds and cartoons granted.

2007 to 2016: The lost decade of growth, worst ever
The past decade, the U.S. suffered an average annual economic growth rate of 1.3316 percent a year. This is the worst decade for economic growth measured in U.S. history, even worse than the Great Depression.

House brings land use regulations back to state and local level
State and local governments are regaining control over their land management. The House has once again used its power under the Congressional Review Act (CRA) to empower state and local governments after President Barack Obama implemented regulations stripping them of their involvement in land usage.


By Robert Romano

The past decade, the U.S. suffered the worst ever average annual economic growth rate of 1.3316 percent a year.

That was even worse than 1930 through 1939 if you can believe that at 1.3334 percent a year, according to data compiled by the Bureau of Economic Analysis.

“This is the worst decade for economic growth measured in U.S. history, even worse than the Great Depression,” Americans for Limited Government President Rick Manning noted in a statement after the data was made available on Jan. 27.

Adding to misery, the U.S. has not seen economic growth higher than 4 percent since 2000, and not higher than 3 percent since 2005. The 21st century so far has also shown a marked drop in labor participation among working age adults, accounting for some 9 million 16-64 year olds who have either left the labor force or not entered on a net basis.

That time has also been reflected in incomes, which have only grown nominally an average 2 percent a year from 2006 to 2015.

The period has also seen a very large drop in inflation, averaging 1.8 percent growth a year, and interest rates, with 10-year treasuries dropping from about 6 percent in 2000 to about 1.8 percent 2016.

So, the slowdown is real and is reflected in growth, the number of people working and looking for work, in wages and in prices. We’re becoming a society that basically works less.

They are trends President Donald Trump ran against on the campaign trail last year. Speaking to the Economic Club of New York on Sept. 15, 2016, Trump said, “it’s time to establish a national goal of reaching 4 percent of economic growth. And my great economists don’t want me to say this but I think we can do better than that.”

Americans for Limited Government’s Manning agrees we can do better, and thought that Trump’s ambitious goal probably helped him in the election., “Many economists believe we have entered in a new normal, and should not expect that the prosperity of the past will ever return. No one should be surprised that the American public changed captains of this slowly sinking ship in 2016 to someone who refuses to accept the premise that America’s best days are behind her.”

“But,” Manning added, “clearly President Trump will have his work cut out for him to reverse this catastrophic decline of stagnant growth.”

To get there, Trump has promised to incentivize doing business in the U.S. so as to employ more Americans to do jobs. That should boost labor participation and increase demand for labor, in turn lifting incomes. With more businesses producing and more people working, that should in principle lend itself to more growth.

But that will be easier said than done. Even with low inflation, the U.S. faces several cost disadvantages to competitors overseas in areas like manufacturing, on labor costs and on currency, something Trump has promised to address but so far has kept his powder dry. Then there is tax reform, which Congress has not gotten to yet, and a mountain of regulations waiting to be undone.

After looking at the past decade, the trend is less growth, which has played out in Europe, Japan and in other advanced economies. This leaves little room to maneuver. When the next major recession hits, we might find ourselves wishing there had been more expansion these past many years.

There must be an emphasis on removing cost barriers to creating jobs in the U.S., wherever they may be found. Otherwise, the last ten years may be just the first of many lost decades of opportunity to come.

Robert Romano is the senior editor of Americans for Limited Government.

House brings land use regulations back to state and local level

By Natalia Castro

The House’s bold use of CRA disapprovals represents their desire to undo the regulations of the Obama era and maintain their promise to constituents, a desire the Senate should be prepared to echo.

The most recently passed H.J. Res. 44 functions like most CRAs; the House expressed disapproval over an executive agency regulation and files a joint resolutions with the senate to nullify the regulation with majority vote in both houses.

H.J.Res.44 opposes a regulation constructed by the Department of Interior which provides the Bureau of Land Management (BLM) the power to establish “the procedures used to prepare, revise, or amend land use plans pursuant to the Federal Land Policy and Management Act of 1976.”

The effort against the rule, also called Planning 2.0, has been led by the Congressional Western Caucus and Chairman Rep. Paul Gosar (R-Ariz.).

Gosar explained the imperative of removing the regulation in a Feb. 2017 press release, noting that “This new Obama rule opens the floodgates to special-interest groups by allowing them the same amount of input as those whose daily lives are impacted most by these decisions. Planning 2.0 is a significant departure from the planning process that has existed for more than three decades and allowed significant local government involvement. With the nullification of this tone-deaf regulation, state and local governments will, once again, be empowered to best manage their public lands to ensure optimal use and good stewardship.”

Vice Chairman Rep. Scott Tipton (R-Colo.) concurred, explaining that this regulation would devastate the West by silencing the farmers and western counties dependent on land use.

Republicans in the House are fighting for Americans that President Obama’s regulations have ignored for nearly a decade. With the implementation of CRA in full effect, the House is finally able to get the job done.

Using the power of the CRA, the House has also passed two other pieces of legislation disapproving of regulations the Obama Administration has imposed. H.J. Res. 57 establishes requirements for how States must implement an accountability system to ensure students meet the provision in former President Barack Obama’s national education plan. Similarly, H.J. Res. 58 would nullify the rules in Obama’s education policy which require annual accountability states on how states rate teacher performance and quality.

These resolutions, also passed in the House, directly combat the inefficient and intrusive growth of the Department of Education under the Obama Administration.

Now the House has passed eight CRA measures to undo the Obama era regulatory state, meanwhile the Senate has passed two. CRA measures need to be enacted within 60 legislative days of the regulations being enacted. To keep up with the House in following through on its mission to empower states, citizens, and communities by repealing harmful regulations, the Senate will need to put in extra time, over the weekends if necessary, to get it done.

Natalia Castro is a contributing editor at Americans for Limited Government.

Commentary: We appreciate Alaska State Senator Mike Dunleavy’s initiative to both control irresponsible state spending and to support increased access to federal OCS and adjacent lands

Alaska State Senator Mike Dunleavy. Northern Gas Pipelines file photo by Dave Harbour

SJR #2.  Dunleavy introduced this resolution last month as we more fully addressed in our January 30 post.  If passed, it would improve Alaska’s ineffective Constitutional amendment to limit government spending.   Government and civic leaders foresaw an unsustainable state budget developing without such a mechanism and much of their concern is reflected in this 30-year-old document.  But by the time their effective, recommended draft amendment was adopted by the Legislature in preparation for a plebiscite, they had watered it down so much as to be ineffective.  Hopefully, today’s legislature, facing a fiscal crisis, will finally see the wisdom of tightening up the earlier spending limit — for a state that is almost 90% dependent on revenue from volatile natural resource commodities. WE UNDERSTAND THE SENATOR WILL BE HOLDING A HEARING ON THIS MATTER NEXT TUESDAY AND WOULD URGE CITIZENS TO TESTIFY AND MAKE THEIR VIEWS KNOWN. 

SJR #5.  Yesterday, Senator Dunleavy introduced this resolution urging the Trump administration to roll back many of the OCS access constraints the Obama administration put in place before leaving office.  (Everyone recalls the improper barricades that administration used to  delay and then finally kill $6 billion in Shell’s OCS efforts during the last decade.  (Scroll down for one of many examples.)  While serving as vice-chairman of the NARUC gas committee, your publisher supported effort by Southern states to both gain more access to OCS energy resources and to require that over a third (i.e. 37.5%) of such resources be shared with adjacent states.  While the resulting action provided those states with revenue sharing it did not include Alaska.  We supported their effort anyway, knowing that 1) Congress would not approve revenue sharing for Alaska at that time, and 2) that setting a precedent for adjacent state revenue sharing would accrue to the benefit of Alaska when the time was ripe.  

We believe the time is now ripe.  

However, we offer cautions.  First, Alaska should oppose efforts to funnel federal OCS revenue sharing funds (e.g. “rents, royalties and bonuses”) to specific Alaska coastal communities.  Any federal revenue sharing funds should flow to the state for disposition by the Legislature.  Second, the state should pass an effective Constitutional Spending limit now, before future elected officials become so mesmerized by a new stream of wealth that, like their predecessors, they are tempted to spend it all on new or expanded bureaucracies and programs.  Third, the enviro-activists and certain coastal communities will seize on any OCS access effort that seems real to reignite the idea of a new bureaucracy, the Arctic Citizens Advisory Council.   Any new or expanded state or federal bureaucracies should be avoided lest the Obama restrictions reappear in another form.

We would note for our readers a few benefits flowing from a Trump administration rejection of the previous administration’s OCS blockade, including: 1) hundreds of thousands of jobs throughout the United States as well as Alaska; and 2) sustaining a longer life for the Trans Alaska Pipeline System (TAPS), currently operating at only 1/4 capacity; and 3) enhancing America’s Arctic sovereignty at a time when Russia is rapidly building its oil and gas — and military — assets, and, in an area thought to contain the largest single increment of the world’s future oil and gas reserves; and (4) Atlantic coast and other citizens could directly benefit from an improved, Trump administration policy such as the one this resolution addresses.  Alaska, however, would do well to coordinate this resolution with other like-minded states to best assure action in Washington D.C.

-dh


Example of Obama Administration federal overreach that corrupted the rule of law by using permitting powers to constantly delay and then kill Shell Oil’s $6 billion commitment to explore Alaska’s Arctic OCS.

EPA Region 10
1200 6th Ave, Ste. 900
Mail Stop: AWT-107
Seattle, Washington 98101
Fax: 206-553-0110
R10ocsairpermits@epa.gov
 
Dear Ms. Nair:
 
With this letter I urge the EPA to timely approve and not further delay issuance of Shell’s air permit for operation of the Frontier Discoverer as soon as this Winter in the Chukchi Sea.
 
The oil industry has demonstrated that it can operate in our Northern climates safely and does so as well as or better than it is required to do in any other region of the world.  Alaskan and U.S. regulatory safeguards are already responsible and effective, if not extreme.  If this permit is not issued, a $2.3 billion investment in Alaska’s Federal OCS could be in jeopardy.  The oil and gas we could have obtained there, will be imported from areas with less rigorous environmental regulation at a cost of up to 35,000 jobs per year with massive negative impact on Alaska’s economy, our balance of trade and our Nation’s security.
 
Accordingly, I urge that you promptly issue the appropriate air quality permits to Shell.  I urge you to be mindful of the value most Alaskans and Americans place on the energy industry having full access to the national waters surrounding our country, including Alaska.  We are confident that existing regulatory regimes will assure the proper exploration and development of oil and gas off Northwestern Alaska, both within Federal and State jurisdictions.
 
To disallow or impede energy development through delay or denial of these air quality permits would be to threaten the well being of Northerners, to cause the withering of Alaska’s economy and to adversely affect the entire American economy at a time when a robust, healthy economic recovery should be encouraged by the Obama administration.