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Judge’s Reprimand Of Administration Is Good News For Economy

By Kathleen Sgamma, Director of Government and Public Affairs, Western Energy Alliance

With national unemployment stuck above 9% and dismal economic data indicating the possibility of a double-dip recession, it’s been a while since American businesses and working families have had any good news about their economic future.

With more and more families struggling to make ends meet, we continue to send money and jobs oversees while our government throws up a seemingly endless barrage of hurdles and red tape that make domestic energy development more and more difficult.

A recent legal victory for Western energy companies, however, is a bit of good news for employment and economic opportunity in the West.

Chief U.S. District Judge Nancy Freudenthal’s recent ruling overturning a federal policy that made domestic energy production more difficult is a significant victory for the vast majority of Americans who are baffled by our country’s continued reliance on foreign and unfriendly sources of energy when we have such a vast amount of oil and natural gas right here at home.

In Western Energy Alliance v. Interior Secretary Salazar, Freudenthal found that the Department of the Interior (DOI) had overstepped its authority in making Western energy development more difficult and constraining the Western economy.

In May of last year, DOI took it upon itself to re-write sections of the bipartisan Energy Policy Act passed by Congress in 2005 that reduced bureaucratic hurdles and redundant environmental analysis for companies permitting wells on public lands.

The judge in this case issued a nationwide injunction against DOI “categorical exclusions (CX)” policies, easing the way for an increase in responsible energy development on public lands.
Although the specific issue around which this case revolved may seem a bit obscure to the average American, CXs encourage domestic energy development while still protecting the environment.

By eliminating redundant environmental analysis in five limited circumstances where analysis already exists or when drilling from an existing well pad, CXs are a tool for creating jobs and economic growth by reducing some red tape.  CXs are not an exclusion from the myriad regulations that all producers must comply — just from redundant analysis.

This ruling is a huge victory for American energy independence as well as the Western economy, especially in light of a new study, which finds that by 2020 the West could produce as much oil and natural gas on a daily basis as the U.S. imports from Saudi Arabia, Iraq, Kuwait, Venezuela, Russia, Algeria, Nigeria, and Colombia combined.

The study, entitled Blueprint for Western Energy Prosperity, concludes that if Western producers are allowed to develop the vast domestic energy resources found on public lands, oil and gas investment in the region could double to $58 million annually by 2020, and jobs could increase by 16%, and government revenue by $3.5 billion.

The judge’s ruling is a step in the right direction for ensuring that government policies encourage economic growth. It’s also a victory for the rule of law and a reprimand to an administration seemingly determined to make it more difficult to develop domestic energy.

The judge in the case ruled soundly that the government couldn’t substantially change a law passed by Congress without so much as notifying the public and engaging in proper rulemaking. Western working families and small businesses should be pleased that — at least in this case — there were consequences for the administration’s closed-door deals with environmental groups designed to slow economic activity.

Western Energy Alliance v. Interior Secretary Salazar is a victory not only for American energy companies, but also for the 434,000 Westerners whose livelihoods are dependent on oil and natural gas development on public lands, and the local and state governments who rely on the billions of dollars in taxes that industry pays to fund public education, safety, infrastructure and conservation programs.

In the coming decade, our nation will be forced to choose — will we continue to rely on foreign and unfriendly sources of energy or will we allow American companies to help rebuild our economy by developing the vast natural resources found right here at home?

With new data showing investment and employment in the Western energy industry set to expand rapidly in coming years, we hope this legal victory will send a message to our leaders in Washington that they should focus on creating jobs while reducing foreign energy imports, instead of throwing up more red tape and redundant regulations that make developing American energy even more difficult and costly.


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