Hearings - Statement
 
Statement of James M. Inhofe
Hearing: Full Committee Hearing
Oversight to review the permitting of Energy Projects
Wednesday, May 25, 2005

The nation needs an energy policy today more than ever. The lack of a comprehensive energy policy has detrimentally impacted this country in several ways, and ultimately slowed economic recovery. I have long said and I maintain that having a strong energy policy is a national security issue.

 

Environmental policies have had a significant and varying effect on many of the energy problems the country faces; unsustainably high natural gas prices, lack of refining capacity, and insufficient energy infrastructure to name just a few.

With great foresight, President Bush recognized the need for a comprehensive national energy plan some four years ago this month but implementation of many of his recommendations have been frustrated in Congress. Environmental concerns are among the principal reasons for Congress’ failure to address America’s energy needs.

Even Federal Reserve Board Chairman Alan Greenspan noted as much stating, “[w]e have been struggling to reach an agreeable tradeoff between environmental and energy concerns for decades…it is essential that our policies be consistent.” Chairman Greenspan delivered his warning two years ago before another Senate Committee. I would ask my friends to remember that the Senate has been trying unsuccessfully to move an energy bill since the 107th Congress. I am hopeful that we will be able to develop the needed consistency and send an energy bill to the President this year.

The purpose of today’s hearing is to review the permitting of energy projects, and to consider whether permitting has incorporated the consistent approach Chairman Greenspan referred to. As an Oklahoman and someone very familiar with the oil and gas industry, it might surprise my friends that this hearing is energy source neutral. We are not here to discuss the environmental merits of one type of energy over another.

Rather than focusing on any one energy source, I am concerned about the entire process. I think that the following quote from an energy interest summarizes the issues permit “review needs to be completed in a timely manner” and “slippage undermines the credibility of the process and drains the energy and resources of the members of the public; Indefinite delay harms not only the project proponent and those who see the benefits flowing from the project … but also damages stakeholders.”

The fact of the matter is that the country needs all forms of energy and requires a diverse fuel mix to maintain economic progress and ensure a clean environment.

Regardless of the type of energy, producers cannot find, harness, extract or transport energy unless they can secure the necessary environment-related permits. The collective energy industries consistently claim that the requisite federal permits and legal challenges from special interest opposition groups have prevented them from producing energy or delivering it to consumers and businesses.

President Bush recognized the complexities involved in the permitting process in issuing Executive Order 13212, which called for federal agencies to expedite permitting and established a White House Task Force on Energy Project Streamlining. And the federal agencies have improved their permitting but more can be done.

I am not a bird expert. I do not know how much bird research should be done before building electricity-generating wind turbines; is six months of state of the art radar research sufficient or is three years too much? I don’t know. However, I am confident that the project’s proponent would like to know with certainty the proper reasonable approach at the beginning not the end of the federal permitting process.

Environmental regulations have increased demand for natural gas. Several special interest environmental groups celebrated natural gas over other energy fuels. Indeed nearly all new electricity generation is fueled by gas over coal. Yet, today, some of these same groups have worked against building the necessary infrastructure to transport their clean-burning bridge fuel. For example, the California and Nevada chapters of the Sierra Club voted to oppose both on and offshore LNG facilities even though the Club favors gas over coal and nuclear energy.

Similarly, some of the states that have the greatest demand for gas have not increased the infrastructure to deliver it. California for example has opposed the permitting of Liquefied Natural Gas and pipeline infrastructure even though, according to California’s Energy Commission, local air quality regulations require natural-gas generation.

California certainly is not alone in contributing to or facing a regulatory paradox. According to a report from the New England ISO, the nonprofit operator of New England’s power grid, natural gas in the region was increasing from 16 percent in 1999 to a projected 45 percent in 2005, however the states lacked the needed infrastructure to transport and distribute the gas.

The ISO Chairman Berry stated that “the long and complicated federal permitting process for building new interstate pipelines is a greater obstacle than the technical construction work.”

Some special interest groups would like oil and gas companies to go above and beyond what are required by environmental regulations. They would also like for operators to monitor potential environmental impacts. Council on Environmental Quality Chairman Jim Connaughton has suggested incorporating adaptive management, which includes monitoring, to a wide variety of projects. These are fine goals in concept, but how do current permitting requirements provide for and encourage such a flexible approach?

Lastly, I would like to recall Chairman Greenspan’s warning – he framed the issue as a trade off between energy and the environment – it is unfortunate that anyone describes balancing these two critical interests in terms as a trade off. A trade off was not what the nation’s first environmental law considered; in fact one of the stated goals of the National Environmental Policy Act goal is “to create and maintain conditions under which man and nature can exist in productive harmony.” A trade off was never intended.

I look forward to hearing from the witnesses about the permitting challenges I described and other issues.

 

 

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