Nexus: Chapman's Journal of Law and Public Policy

Energy is the lifeblood of any industrialized economy, and maintaining an adequate supply in the United States is going to become increasingly costly in the coming decades. In the United States alone, energy demand is expected to be 35 percent higher in 2030 than 2005. The good news is that the situation is not going unnoticed. In his 2010 State of the Union Address, President Obama acknowledged the need for innovations and improvements in the nation’s energy production and efficiency. But the question remains – how likely will the rhetoric turn into reality?

To meet the energy demands of the near future, President Obama acknowledged the need to invest in nuclear power, oil, and natural gas. These types of power still represent the most cost-effective sources of energy. However, tapping into these traditional sources of power cannot occur without overcoming significant hurdles. Building new nuclear power plants in the United States has become incredibly difficult. The last nuclear power plant to be completed in the US went online in 1996. Construction of plants has become incredibly costly, ranging between $3 billion to $5 billion. Regulations increase the costs not only to construct new plants but also maintain existing ones. Several nuclear plants in the United States have closed prior to their planned shutdown dates because such regulations have increased the cost such that they are no longer cost-effective.

The oil and natural gas industries are suffering as well. No new oil refineries have been constructed in the United States since the Carter Administration. Many refineries have closed, and it takes almost 20 years to construct a new facility to replace the old one. Emissions mandates, alternative fuel requirements, and gasoline blend requirements have prevented any new construction. Only through expansion and improvements in current refineries has kept the industry from massive shortage in output. The United States cannot even refine all of its domestic supply of oil. Construction of natural gas terminals is not faring much better. Of the 29 proposed terminals approved by federal regulators, only 8 have been built. Local groups have been using environmental regulations to kill such projects.

The greatest threat to such projects has been redundant regulations at both the federal and state levels. Furthermore, environmental regulations like the Endangered Species Act and the NEPA process have given opposition forces plenty of ammunition with which to not only halt energy construction but kill such projects altogether. The numerous and never-ending appeals for these regulations provide overwhelming leverage for any and all opposition.

The solution must lie in increasing the efficiency not only of the scientific technology, but also the bureaucratic process. Given the political forces at play, fixing the bureaucracy could prove quite difficult. The goal for environmental groups has not been to amend projects to be environmentally friendly, but rather to kill such projects outright. Meanwhile, political forces on the right have been clamoring for the necessary expansion of energy facilities. In the near term it is hard to argue against the need for such an investment in our traditional sources of energy, and even the President acknowledges this fact. But if President Obama is serious about enacting such reform, not only would it represent a huge success for the American economy, but it could also be the President’s first bipartisan achievement.