Environmental regulations pinch the U.S. economy, and Biden is making it worse | Opinion
Considering the sheer scale of complexity and obfuscation in our nation’s rules and regulations, perhaps no law rivals that of the National Environmental Policy Act, or NEPA, in its impact on everyday Americans. Federal regulation is estimated to cost the American economy as much as $1.9 trillion per year in direct costs, lost productivity and higher prices. The National Association of Manufacturers has issued a report showing that the average U.S. company pays $9,991 per employee per year to comply with federal regulations.
Although NEPA was created with good intent to preserve the rich quality of our nation’s natural environment, it has become a baroque web of compliance that has shifted from its original purpose with an outsized deleterious effect on communities of all types in various stages of economic development. About 38.5% of American adults — or 89.1 million people — faced difficulty in paying for usual home expenses between April 26 and May 8 of this year, according to a Census Bureau survey. That’s up from 34.4% a year ago and 26.7% during the same period in 2021. The consequences of regulatory complexity rest disproportionately on the most vulnerable, whether it be direct and indirect costs associated with higher energy bills or increased expenses associated with never-ending transportation projects. Our leaders should reconsider and reform the byzantine nature of regulatory approvals associated with NEPA.
Rapid U.S. industrialization in the 1950s motivated President Richard Nixon in 1969 to develop what would be referred to as the “Magna Carta” of federal environmental policy: the National Environmental Policy Act. Once NEPA was signed into law on Jan. 1, 1970, federal agencies were required to investigate potential environmental impacts prior to pursuing projects, called environmental assessments or environmental impact statements. An environmental assessment is a preliminary investigation that determines if a more extensive investigation, the impact statement, is required. These investigations involve determining whether proposed projects would impose a significant environmental impact and alerting the public of these potential outcomes. Such a process has been used to stymie industry necessary for our national security and wealth, namely energy and mineral resource industries. This, in conjunction with recent global events, is what has increased the costs of living for all Americans.
In August 2017, President Donald Trump issued an executive order directing the Council on Environmental Quality to streamline its regulations to allow for expedited reviews and approvals of projects. Although the council streamlined the process in July 2020, the Biden administration moved to reverse this decision in April 2022 with additional guidance indicating that greater detailed analysis in impact statements would be required for projects related to the emission of greenhouse gasses. This, of course, targets the energy sector; its extraction methods emit such gases, much more relative to other industries, and its end products additionally contribute to overall greenhouse-gas emissions.
This greater scrutiny over the energy sector, however, is disproportionate to other business and does not effectively weigh the value and necessity of energy production. For instance, even if the U.S. limits its domestic energy production this will not reduce the amount of energy products it imports. As of 2022, the U.S. on average consumes 20.28 million barrels of oil per day (7.4 billion barrels a year) of which 19.98 million barrels per day, or 98.5%, are domestically produced. It appears that the supposed concern for “environmental justice,” which focuses on lower socioeconomic groups susceptible to the impacts of environmental deterioration, is an issue that proponents of NEPA’s hardline regulations would like to export entirely to other countries. Ironically, based on climate activists’ arguments, overall global greenhouse-gas emissions would remain the same, netting the equivalent climate change outcome whether the U.S. imports energy or produces its own. As a result, American energy companies would suffer from a lack of projects to establish energy independence, and all Americans would pay higher costs across the economy.
Essentially, the world runs on these energy products, and the reduction of domestic production would not eliminate the effect of American consumption. Such obstinate reasoning led to the long, drawn-out battle over the strategic Keystone XL Pipeline that could have provided 830,000 barrels of oil per day to the U.S. from Canada. Although the project is now officially abandoned, the process that ran from 2008 to 2021 involved legal battles invoking NEPA, but not because of any environmental-impact findings. Rather, in 2015, the Obama administration was concerned more about the image the U.S. would foster in promoting energy production while negotiating its leadership role in the Paris Climate Accords.
Despite NEPA not being the nail in the coffin for the Keystone XL Pipeline project, it was one of a number of tools meant to slow down the construction process long enough for a supportive administration to revoke the permit necessary to halt construction altogether. During the Trump administration, the opposition argued that the low cost of oil and increased U.S. energy production made the project less economically attractive; however, the ripple effects of the COVID-19 pandemic and other global conditions have strained oil prices since then. What made sense in the pre-COVID age does not add up in today’s world since this project should be considered even more economically viable.
Since the implementation of NEPA in 1970, our nation has had five decades to evaluate both the merits and shortcomings of these environmental laws. Some argue that NEPA has evolved into an outdated system of environmental assessment that does not align with the realities of our current political, economic, social and environmental climates. The politicization of science and reliance on vague terms punish not only industries that do not align with particular environmental policies, but also those that are built to achieve those very policy goals.
Although meant to protect the environment, NEPA has affected the American people in a manner it was not intended for — increasing hardship on economically vulnerable groups. Overly cautious assessments of environmental impacts have undermined our nation’s security by restricting access to natural resources, which contributes to overall national growth. Regulation in and of itself is not counterproductive, but when left unchecked by Congress and the White House, rulemaking and the tremendous costs associated with compliance are corrosive to governments’ ability to foster modern economic growth.
The Biden administration’s decision to reverse Trump’s streamlining of NEPA has actually moved us backwards in terms of making positive progress overall. Furthermore, NEPA’s far-reaching consequences have resulted in our nation not completing necessary infrastructure projects to foster our growing populations and its needs.
We are not mitigating the climate crisis either, despite the image NEPA fosters of sound environmental policy. All that has been achieved by this decision is the undue delay or halting altogether of much-needed projects, along with encouraging judicial activism and politicized rulemaking that has interfered with supposed intended policy goals.
NEPA has and continues to be an impediment to progress for all Americans, and the current administration should reconsider its reversal of President Trump’s attempt to modernize it. Without such revisions, our nation will continue to disrupt its own ability to secure and protect the interests of its citizens.
George P. Bush served two terms as Texas land commissioner. David Winter is a graduate student at the Bush School of Government and Public Service at Texas A&M University. This piece is adapted from a longer version written for the Foundation for Research on Equal Opportunity , a nonprofit think tank based in Austin.
