Regulatory Reform

Several Pro-Growth Regulatory Reform and Energy Policy Proposals included in Speaker Ryan’s “A Better Way” Campaign

Since the inauguration of President Barack Obama in 2009, Republicans in Congress have been accused by some of being the “Party of No.” Rather than proactively proposing solutions to the nation’s various problems, as the school of thought goes, the GOP has done little more than to obstruct an earnest president’s ambitious agenda.

Nearly eight years later, Speaker Paul Ryan is trying to correct that perception. During the month of June, the speaker is planning to release a series of whitepapers, titled “A Better Way,” that will collectively detail an ambitious, pro-growth reform agenda. As Ryan suggests in a video posted on his website, these proposals will show the American public what congressional Republicans are actually for rather than what they are against.

Earlier this week, the whitepaper addressing economic concerns was released. Included in the nearly 60-page long document are several regulatory reform and energy policy proposals worth highlighting.

Modernizing Regulatory Programs

 The process by which federal departments and agencies develop and enact new regulations is outlined in a 70-year-old law called the Administrative Procedure Act. Given the inconceivably large numbers of societal changes over the past seven decades, the entire regulatory making process should be reexamined, from the initial determination to regulate a particular activity to the subsequent review of those regulations.

Lately, there has been a tendency for federal departments and agencies to unnecessarily promulgate regulations that are either duplicative in nature or seek to address problems that do not exist. For instance, in May of this year, the U.S. Environmental Protection Agency (EPA) finalized a rule targeting methane emissions in the upstream sector of the oil and gas industry. However, through voluntary industry action and technological advances, methane emissions from hydraulically fractured natural gas wells have fallen by 79 percent since 2005. Situations such as this one where industry is self-correcting independent of government action should not warrant additional regulation.

Another problem that currently exists in the regulatory making process is the tendency for federal departments and agencies to regulate beyond what Congress has statutorily authorized. Through the Clean Power Plan, EPA is currently seeking to regulate greenhouse gas emissions from existing fossil fuel-fired power plants under the Clean Air Act. However, there is zero evidence to suggest that Congress intended for EPA to regulate greenhouse gas emissions under this law. Rather, the Clean Air Act directs EPA to regulate “criteria pollutants” such as sulfur dioxide, nitrogen dioxide and lead. A periodic reauthorization process can be used to rein in out of control regulatory bodies. Congress can also seek to limit the amount of deference that is afforded to regulators by the courts when questions about statutory interpretation arise.

 A More Aggressive Role for Congress in the Regulatory Process

 Since 1993, almost 95,000 new regulations have been enacted by the federal government with virtually all remaining on the books. There are few incentives for regulatory departments and agencies to periodically reevaluate existing regulations and to amend or even eliminate ineffective, duplicative, or outdated regulations. Legislation has been proposed that would establish an independent commission to assess existing regulations and to make recommendations to Congress regarding which regulations should be eliminated.

Congress can also take a more proactive approach by affirmatively approving new regulations before they go into effect. The Regulations from Executive in Need of Scrutiny (REINS) Act, which Congress passed in 2015, would allow for this to happen. In order for a major regulation to be implemented, Congress would need to pass a joint resolution that the president would also have to sign. This would easily increase the amount of much-needed oversight and democratic accountability in the regulatory making process and was endorsed by ALEC in 2012.

Also explicitly mentioned is EPA and the Army Corps of Engineer’s new rule that redefines “Waters of the United States,” thereby greatly expanding the two agencies’ regulatory authority over the nation’s water resources. The rule came after the Supreme Court already twice checked the agencies’ overly broad interpretation of the Clean Water Act and is still currently being litigated. In both the 113th and 114th Congress, the House of Representatives passed legislation requiring EPA and the Corps of Engineers to withdraw the rule and to develop a new version that is consistent with the law. A resolution adopted by ALEC in 2014 supports this approach.

A Regulatory Approach that Enhances America’s Energy Abundance

Perhaps no other industry has been forced to navigate as complicated and burdensome of a regulatory regime quite like the energy industry. Despite providing a multitude of jobs, significant tax revenue, and economic investment, the industry is having an increasingly difficult time producing energy at a reasonable cost and building routine infrastructure.

The permitting process for pipelines and other energy infrastructure desperately needs to be streamlined and shortened. That the Keystone XL pipeline was under review for six years by the Obama administration (and ultimately rejected despite having what would be a minimal impact on climate) defies any semblance of logic. Hundreds of other routine energy infrastructure projects that would, by some measures, provide over 1 million new jobs and $1 trillion in economic activity are currently being delayed needlessly. In line with a 2012 ALEC resolution, Congress has passed project-specific approvals for various energy infrastructure projects, including Keystone XL. Legislation that would prevent any pipelines from being tied up solely because they cross the U.S.-Canada border has also been introduced, as has legislation placing a firm deadline on approval for natural gas pipelines.

Initiatives to also make it easier to produce energy on federal lands and on the Outer Continental Shelf (OCS) have also been proposed. To illustrate just how difficult it has become to drill or mine on federal lands, the Bureau of Land Management (BLM) had roughly 64 million acres of land under almost 80,000 leases as recently as 1990. In 2015, these figures have almost been cut in half with just 36 million acres under lease with just over 44,000 leases.

While divided government will make it challenging for very many of the policy proposals herein to be implemented, Speaker Ryan and his colleagues deserve credit for offering a robust package of meaningful pro-growth energy and regulatory reforms that will only help to jumpstart the economy and provide jobs to millions of Americans. However, after eight years of an out-of-control federal bureaucracy and a barely-growing economy, it might just make some sense to try a new approach.


In Depth: Regulatory Reform

In his first inaugural address, Thomas Jefferson said that “the sum of good government” was one “which shall restrain men from injuring one another” and “shall leave them otherwise free to regulate their own pursuits of industry.” Sadly, governments – both federal and state – have ignored this axiom and …

+ Regulatory Reform In Depth