America's Self-Imposed Energy Shortage

Many think America is suffering from an unavoidable energy shortage. In truth, we’re failing to harness the energy we have.

Standing between this energy and the public are brigades of environmental lawyers using federal statutes to block projects they dislike. These lawyers, and the laws that make their efforts possible, pose a serious challenge to a secure energy future, a challenge that Washington has yet to address.

Examples can be found nationwide: One environmental group recently announced a lawsuit to stop construction of a power plant in southern Illinois that would have used abundant local coal. Other groups are suing to block natural gas production throughout the Rocky Mountain region. Still others lost a case trying to restrict new oil wells in Alaska but have just launched a separate lawsuit to do the same.

Such lawsuits have become the norm. Almost every major energy project in the U.S. can expect a court battle before moving forward. And years of litigation usually come after years of administrative delays, sometimes initiated by the same parties who later file suit.

The environmental rationales for these lawsuits are often weak, but even when the activists lose, they already have succeeded in putting these energy projects on hold for an extended period. For endeavors that are only marginally profitable in the first place, these costly delays can induce the energy companies involved to give up trying — which is often the point. Many of these laws allow anyone to file suit, so environmental groups can go to court without demonstrating that they have a direct stake in the matter.

In addition, the courts have interpreted several broadly worded environmental laws in ways that are skewed against energy. For example, the Endangered Species Act is frequently invoked to stop economic activity, and is used even when there are no actual endangered species in the vicinity. The mere fact that there is a nearby habitat deemed suitable for an endangered species — should one ever show up — can be sufficient to create regulatory delays and litigation opportunities.

The problem is most acute in western states, where more than half of the land is federally controlled and thus subject to additional restrictions. This includes the National Environmental Policy Act, a 1969 law that requires a detailed Environmental Impact Statement (EIS) before any energy projects on federal land can go forward. Not only can it take years to develop an EIS, but once published, its sufficiency is likely to be challenged in court. As with the Endangered Species Act, the National Environmental Policy Act is used routinely as a delaying tactic.

The impact on energy supplies is becoming obvious. The cost of natural gas, for example, has hovered near record highs in the last few years, and not because we are running out of it. A recent study by the Department of Energy’s Argonne National Laboratory lists 11 different laws and regulations restricting access to natural gas in the U.S. and offshore. It also names nine provisions likely to produce delays and another 17 that increase costs in bringing natural gas to consumers. Consequently, when activists want to block a new natural gas well — and they often do — they can use any one or more of these provisions.

Regardless of this obstructionism, America’s energy needs continue to expand along with the economy. The federal Energy Information Administration’s Annual Energy Outlook 2005 forecasts that energy consumption will increase by 1.4 percent annually through 2025. Yet our energy infrastructure is barely able to keep up with current demand, much less deal with the additional energy needs brought on by continued economic growth.

Congress has renewed its debate over the energy bill. Currently, the legislation contains some provisions that untangle the web of anti-energy environmental measures. For example, it eliminates several redundant approval requirements for energy projects on federal land. But more needs to be done.

Meanwhile, Rep. Richard Pombo, R-Calif., and several other members of the House Resources Committee are considering more substantive changes to the Endangered Species Act and National Environmental Policy Act. They are currently holding a series of field hearings in areas of the country where these laws have had the biggest impact on economic activity, and they plan to have concrete proposals in the near future.

America’s current energy problems are partially self-imposed. Congress created numerous environmental laws over the past few decades, often with good intentions and strong public support. But then it sat idly by as activists used — and misused — these laws to stop the nation from expanding its domestic energy infrastructure. Congress now needs to seriously consider changing them if America is going to have affordable energy in the decades ahead.

Ben Lieberman is a senior policy analyst at The Heritage Foundation, a Washington-based public policy research institute.