NICK EICHER, HOST: It’s Wednesday, the 9th of December, 2020.
Glad to have you along for today’s edition of The World and Everything in It. Good morning, I’m Nick Eicher.
MARY REICHARD, HOST: And I’m Mary Reichard. It’s time for Washington Wednesday.
When President Trump moved into the Oval Office in 2017, his team immediately went to work dismantling a laundry list of Obama era regulations. Many of those changes occurred at the Environmental Protection Agency.
By the time he leaves the White House, the Trump administration will likely have rolled back more than 100 environmental regulations.
EICHER: Republicans say cutting red tape and scaling back government power is good for the country, especially for the economy.
But it’s likely that a Biden Administration will handle things very differently. This is how Joe Biden described his environmental plan on a left-wing podcast:
BIDEN: It’s a vehicle by which we can not only save the planet, but we can generate such economic growth and lead the world.
He calls it his Plan for a Clean Energy Revolution and Environmental Justice.
REICHARD: Joining us now to preview that plan is Nick Loris. He is an economist and policy analyst at the Heritage Foundation.
Nick, thanks so much for joining us!
NICK LORIS, GUEST: Thanks for having me! Glad to be here.
REICHARD: Let’s start with what Biden is actually proposing. Give us the Biden elevator pitch, if you would. In a nutshell, what does Biden want to do here and what are the benefits as he sees it?
LORIS: Yeah, a big part of President-elect Joe Biden’s plan is to use federal agencies and use federal regulations to reverse course in terms of what the previous administration has done to roll back regulations that have had high compliance costs for negligible environmental benefit. And so President-elect Biden’s plan is really focused on three fundamental goals. One is increasing regulations from everything from the oil and gas industry to the coal industry to prohibiting oil and gas leases on federal lands, which is a big issue for those states out West where the federal government owns a lot of land. And the other big part is really focusing on trying to subsidize different clean energy technologies. So, that’s really the focus of President Joe Biden’s policy is regulate the energy sources he’s not too fond of, and subsidize the ones that may need help from the taxpayer.
REICHARD: You say a core part of his plan is for Uncle Sam to have a much bigger hand in energy and transportation markets. What does that mean, in practical terms for each person listening right now?
LORIS: Yeah. It means higher prices, forcing costlier energy technologies into the marketplace as well as huge taxpayer expenses. I think the reality is when you let energy markets work, they work quite well. They deliver affordable, reliable power to American families and businesses. We’ve seen significant environmental improvements over the years in terms of particulate matter and criteria in air pollution coming down as we continue to innovate and compete. And we’ve seen greenhouse gas emissions from the power sector come down as well as a lot of natural gas that’s displaced coal. So, we’re seeing a lot of economic and environmental benefits when the market is allowed to work in the energy sector.
Conversely, when you have the government intervening in the energy sector, you see a lot of picking winners and losers using taxpayer dollars to steer investment. So, there’s not only higher costs to Americans in forms of a higher tax burden, more national debt, forced higher energy prices that ripple throughout the economy, but really through the government picking winners and losers, a lot of investment opportunities are lost because it’s the government choosing which energy projects get to move forward. And so the fact that the government continues to play a role and try to be some sort of investment banker in all of these decisions really has long-term, adverse effects on how investment decisions are made.
REICHARD: Nick, you say that Biden’s plans have a whole lot in common with the Obama administration’s environmental policies. What lessons can we take from the eight years of the Obama presidency in this realm?
LORIS: Yeah, we’re going to see a lot more regulations. I think one of the problems that we’ve seen—and I think this is frustrations voiced by both the left and the right—is that Congress has really ceded a lot of authority to unelected bureaucrats at agencies, whether it’s the Environmental Protection Agency or the Department of Interior or the Department of Energy. And it’s going to be that see-saw back and forth now with a Biden administration focusing on how do we reverse course from what the Trump administration did, who reversed course from what the Obama administration did. And so it’s really unfortunate because that provides a lot of economic uncertainty for all sorts of energy technologies and companies, not just your conventional oil and gas and coal, but also for renewable and nuclear technologies if you really have a lot of regulatory uncertainty coming down the pipeline.
And then I think what we’re going to see is really using any opportunity—whether it’s a pandemic relief bill or a highway reauthorization bill or some sort of other stimulus bill—to really focus on a green stimulus style spending. And, again, we saw something like Solyndra that happened during the Obama administration years where half a billion dollars of taxpayer dollars was pumped into one company and it still couldn’t compete in the marketplace because it was a bad technology. And so that’s not to really dunk on renewables. I think renewables, the declining costs of renewables is great and we want more competition in the marketplace. We just don’t want the government footing the bill for it, which means the taxpayers are ultimately footing the bill for it.
REICHARD: To be fair, you also say that there are some elements of Biden’s plan that could accomplish some positive things. You say they could open the door for more innovation and competition in energy markets. What are those positive elements?
LORIS: For sure. I think one thing about President-elect Joe Biden is he’s been a big proponent of natural gas. I imagine that we’ll still see liquified natural gas exports continue under a Biden administration. He’s not going to full stop ban fracking or restrict oil and gas to the point where it no longer becomes economically viable. They will face more regulations, but it’s not going to be a full stop. And I think someone like Joe Biden understands the economic and environmental and the geopolitical benefits that the U.S. has reaped because of its energy dominance, that we are supplying jobs, we’re supplying affordable, reliable energy. We’ve seen the environment improve and we are providing more energy choice to our allies abroad, so it’s not Russia who is using their natural gas to manipulate markets for political purposes. By providing other countries, especially our NATO allies, but also places like Southeast Asia with more energy choice, that is breaking up that type of monopoly over some of these energy markets. And so I think a lot of those things will continue under a Biden administration.
REICHARD: Now, we have a pair of January Senate runoffs in Georgia that will decide control of the Senate. No matter what happens, Democrats won’t have a veto-proof majority. So how much of his environmental agenda can Biden push through without passing new legislation?
LORIS: A fair amount on the regulatory side. One of the biggest potential obstacles to President Biden undoing some of what the Trump administration has done over the past four years is what’s known as the Congressional Review Act, which can undo some of these final regulations coming down the pipeline during the last days of the Trump administration. And if Republicans win one or both of these seats, it’s likely that the Congressional Review Act is no longer on the table. So, that prevents some of what President Biden’s administration could do in terms of undoing the Trump administration’s regulations. But you will see a lot of new regulations coming down the pipeline. Probably new regulations on fuel economy standards for vehicles, methane regulations on oil and gas operations. I think the biggest one, again, is probably going to be the prohibition of new oil and gas leases on federal land. No one is really sure what that means yet and whether it’s actually legal, because right now the mineral leasing act requires that the Department of Interior conduct lease sales on a quarterly basis. And so that’s going to be a big challenge moving forward and a really big question mark legally.
REICHARD: Do you see Biden perhaps holding off on certain regulations until the economy recovers? How do you imagine this playing out at the start of his presidency?
LORIS: Yeah, I think it’s going to be a slow drip type of mentality. One of the things that benefits a Biden administration is these regulations take time to promulgate and actually release. So, I think they’re going to get cranking on them almost immediately, but it goes through a long regulatory process where they have to write the rule, they have to release a draft rule, it has to go through a public comment period, and then the rule has to be finalized. If there’s a pandemic relief bill, you may see an extension of a lot of energy subsidies and a lot of stimulus style spending because that’s usually the left’s approach to get the economy going again is to spend more taxpayer dollars. And so last time the Department of Energy got a huge plus-up when the Obama administration passed and signed into law their stimulus bill. And I can imagine something like that happening again.
REICHARD: Nick Loris is with the Heritage Foundation. Nick, thanks so much!
LORIS: Anytime. Thanks again for having me.