SEC not as easy as 1,2,3?
“Common Sense“ Energy News
The Empowerment Alliance
April 15th, 2022
The SEC recently published a new set of rules for companies to disclose their impact on the environment as well as the risks to the company from climate change. The inclusion of scopes 1, 2, and 3 emissions in the disclosure will put additional burden on just about every company in the U.S. and especially those tasked with providing inexpensive fuel and energy to American households.
Congressman Dave Joyce (R-OH) took the lead in introducing a resolution to push back against this burdensome disclosure and cites the significant impact it would have on American energy companies. From his press release, “[The new rules] will only serve to discourage investment in our nation’s energy sector and hinder our ability to restore America’s energy independence at a time when gas prices are skyrocketing and the world is seeking to eliminate the need for Russian oil and gas.”
It is critical that America remains a leader in global energy production. To be the leader that the world needs means supporting American industry not burdening it with more paperwork. Then, by securing America’s energy independence with natural gas the world will be safer and more secure.
Bottom Line: The new SEC rules adds insult to injury, further inhibiting the domestic oil and gas industry and discouraging investment. To bring down global energy prices and ease inflation, we need to do the opposite.
A Federal gas tax holiday sounds like a good idea but ultimately it is not going to solve the problem created by a year of antagonistic policies. One of the ideas being discussed in DC is to create a short term Federal gas tax holiday to relieve some of the sticker shock that Americans are facing.
One issue is that the portion of the cost of each gallon due to Federal taxes is fairly limited. AAA spokesman, Andrew Gross said, “The biggest factor of what accounts for the price of the gas … is the cost of oil,” at about 56%. The rest includes about 14% for refining, 15% for distribution and marketing and the remaining 15% for federal and state taxes.
Kent Smetters, a professor at the University of Pennsylvania’s Wharton School, said that with gas at around $4.20, the savings per person over that time would be around $50 this year.
$50 isn’t insignificant but the real culprit isn’t the Federal gas tax. The actual problem that needs to be resolved is to reverse course on over a year of policies that make doing business (like providing inexpensive fuel) more challenging.
Bottom Line: A gas tax holiday sounds like a no-brainer, but it won’t solve our problem in the long run. The oil and gas industry needs assurance that policymakers will end their efforts to make business unprofitable.
A welcome development for Americans living in the Appalachian region of West Virginia, Virginia and North Carolina, is that FERC quietly approved the next step on the Mountain Valley Pipeline project. On April 8, “FERC unanimously approved Mountain Valley’s alternative water crossing method” which was proposed in February 2021. While there are hurdles to clear before the pipeline begins filling and fueling homes and businesses, this is a significant step.
MVP spokesperson, Natalie Cox wrote, “This is another important step forward in MVP’s project completion and, as a critical infrastructure project, is essential for our nation’s energy security, reliability, and ability to transition to a lower-carbon future.”
Americans are dependent on the natural gas pipeline infrastructure for an affordable energy source. Our country should be building more natural gas and energy pipelines to give more people access to clean inexpensive energy.
Bottom Line: Even if oil production increases, we need the infrastructure to get the product to market. Pipelines are key, which is why the Mountain Valley pipeline approval is welcome news.
Are the worst of the gas price pains behind us? There are some positive signals that this may be the case.
For the second week in a row, gas prices dipped across the country, with the national average closing in on the sub-3 dollar threshold. As of today, the national average for a gallon of gasoline is $4.07.
However, the Biden administration shouldn’t start celebrating just yet (they’ve been more disciplined since doing a victory lap over the 2 cent price decrease in December). Crude prices jumped back up over $100/barrel on news that China would relax their lockdown and OPEC slashing its forecast for Russian oil production. Unless the global market is able to replace the dent created by the Russian sanctions, supply will continue to lag and prices will struggle to stabilize.
? NEW PODCAST ALERT ?
This month, TEA Executive Director Matt Hammond sat down with Governor Kim Reynolds (R-Iowa) for Ep 9 of The Empowering America Podcast.
Gov. Reynolds and Hammond discuss a wide range of topics including what makes the Iowa energy industry unique, Reynold’s opportunity to give the GOP rebuttal to President Biden’s SOTU, and the stark differences between Republican and Democratic leadership and the national and state level. Listen on Apple podcasts and Spotify today!
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