Former EPA administrator Scott Pruitt’s resignation was a significant news event when it erupted last Thursday. According to reports, President Trump pressured Scott Pruitt to resign, which ended Pruitt’s tenure at the EPA. It is significant for many reasons, as Pruitt was focused on overturning many of the Obama-era changes brought to the EPA.
It is assumed that Pruitt's resignation came about due to scandals ranging from exuberant costs brought to the EPA by Pruitt using government funds to support his vain habits, to conflicts between Pruitt and his staff. Below is a partial list of alleged scandals. This list includes accusations made against Pruitt that were never proven in a court of law, but are "out there" circulating in the "general media:
With these allegations and the resignation of Scott Pruitt, the EPA is no longer lead by a man driven to overturn President Obama’s vision for the EPA. Most likely, President Trump will replace Scott Pruitt with someone who shares Scott Pruitt’s vision at the for reversing Obama-era environmental initiatives.
During his campaign in the year 2000, then Texas governor George W. Bush received the republican nomination for president and was set to square off against Vice President Al Gore. During a debate, a moderator asked the candidates about opening up the Arctic National Wildlife Refuge, or the ANWR, for oil drilling. Citing environmental concerns, Vice President Gore rejected the notion of oil drilling in the ANWR. Governor Bush countered that the ANWR should be opened to oil drilling that is implemented in an environmentally friendly manner.
The debate is an example of tension between economic and environmental concerns surrounding any regulatory impact on drilling. While it is imperative to have environmental protections, it must be balanced against economic concerns that the regulations may hamper the oil and gas industry.
However, environmental regulations impact more than just drilling. These regulations also affect the U.S. auto industry. For example, President Obama introduced the Corporate Average Fuel Economy (CAFE) to regulate fuel efficiency for American made cars. Under CAFE, automakers are to produce cars that attain an average of 54.5 miles per gallon, or mpg, by the year 2025. In response, car makers pushed back against this initiative, claiming that such a law would compel automakers to attempt to build cars that are financially out of reach for their clients. President Trump vowed to reverse CAFE, citing the auto industry's concern.
The idea of fuel efficiency via increased mpg allows for a better energy policy. In 1973, in the aftermath of the Yom Kippur war, Arab nations, angry at the United States for supporting Israel, introduced an oil embargo against the United States. This sent the price of gas soaring from 12 cents a gallon to 53 cents a gallon. The economy, as a whole, suffered from the surging oil prices.
At the time, the average car attained 6-8 mpg with highly-efficient cars attaining 17. Large trucks and the like would get 2 mpg. This meant that cars would have to fill up much more than they do today. As a result of the embargo, cars lined up around the block to get gas. Government regulations split odd and even days based on people’s license plate.
Since then, MPG improved. Today, cars are significantly more fuel efficient with cars averaging 35 mpg and one car claiming to be average 76 mpg.
In a speech before a group of auto workers in Detroit in March of 2017, president Trump declared that he would not let the CAFE rules harm the industry. He vowed to undo CAFE, thereby assuring that the EPA would review the CAFE rules. In fact, Ford CEO Mark Fields told President Trump that under the Obama standards the automotive industry would lose 1,000,000 jobs.
Fuel efficiency is very important, for both economic and environmental reasons. Economically, it makes fuel less of a factor because people do not need to fill up on gas as much. Less spending on gas means more spending in other sectors of the economy. Environmentally, reduced gas consumption means fewer toxins in the air. Clearly, we have come a long way since the 1970s when fuel efficiency was weak. While we need to develop technology that increases fuel efficiency standards, the question is where we strike the balance. President Trump believes that the Obama administration went too far. However, thus far Trump has offered few reassurances that he is willing to balance the industry's interests for profit with concern for the environment.
Starting in 1973 during the oil embargo, American presidential administrations have called for energy independence. While the Nixon, Ford, Carter, Reagan, Bush, Clinton, Bush, Obama, and Trump administrations all discussed energy independence, there has been a mixed response with respect to an actual move toward independence.
When President Trump ascended to the US presidency, he called for “energy dominance.” Whether it means energy independence in a creative way or is distinct from his predecessors, there is clearly a push toward developing an energy plan that is not reliant on Middle Eastern oil. Energy Secretary Rick Perry referred to President Obama’s efforts toward energy independence as “bureaucratic blockades” whereas the Trump administration’s efforts toward energy policy, according to Secretary Perry, is to achieve dominance.
Perhaps it is too soon to tell what exactly is meant by “energy dominance.” Nonetheless, there are signs that President Trump is succeeding in rolling back Obama-era restrictions. Only time will tell what this will mean for energy independence.
Whether Trump succeeds in making U.S. energy policy more "dominant" (whatever that means), this is a separate issue from how that policy is impacting the environment. While all sides of the debate appear to assert that the environment needs to be protected, words do not always meet the administration's actions. The question remains, where should the government strike the balance when regulating energy exploration? Does energy dominance mean forgoing a balance of interests in this regard? What type of regulation is necessary to achieve that balance? How important is the input of the energy sector in responding to this issue? How much influence is too much influence before the issue is foregone? These questions have long fueled debates and will likely continue for the foreseeable future. It remains very murky and unclear how the Trump administration intends to approach these questions except to say that the administration is clearly far more pro-industry than the Obama administration.
Under Obama’s EPA, there were significant regulations on drilling equipment to prevent and regulate leaks. The EPA under Obama named its policy openly and clearly: “Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources; Final Rule”, and was issued on June 3, 2016. The Obama administration claimed that these leaks released methane into the air, asserting that such leaks could lead to a buildup of greenhouse gases in Earth’s atmosphere.
Recently, EPA administrator Scott Pruitt announced a two-year halt on the rule to reconsider the matter. It seems that the Trump administration is questioning the Obama administration's assertion that methane leaking from drilling equipment could lead to a buildup of greenhouse gasses. Furthermore, the EPA wants to study whether there are alternative methods to halt emissions without burdensome regulations that harm the energy sector.
Comments and Criticism
Many construe this action by the EPA as Trump being aligned with Big Oil to the determinant of our environment. Many also view big oil and other large energy conglomerates as indifferent to environmental matters.
Regardless of whether such claims reflect the reality, the fact is that greater government regulation on oil companies hurts their bottom line. Government regulations increase corporate costs, thereby eating away at profits. To stay profitable, companies will then look to cut costs or increase prices. Any additional regulation upon oil companies will inevitably increase the costs that those companies will have to bear, which may be especially difficult for smaller companies. If alternative methods are available or if the harm is none or minimal, such legislation may be more political than practical. Nonetheless, whether a less costly alternative exists remains to be seen. Either way, Obama-era rules are clearly on their way out in the hands of this new administration.