Balancing Growth, Environment

U.S. Chamber's Competitiveness Agenda—A Series

Chamber Pushes Comprehensive Energy Policy

As part of our ongoing series, we examine the nation's need to grow and diversify its energy supply while taking steps to protect the environment in ways that don't curtail economic growth and eliminate jobs.

The Challenge—Business at Risk

Despite a recent decline in energy consumption because of the recession, demand for energy in the United States and around the world is projected to skyrocket in the coming years. 

An insufficient domestic energy supply creates an overdependence on foreign sources and causes wild price fluctuations, slowing economic growth and hurting the pocketbooks of businesses and households. Vast reservoirs of natural gas and oil that lie underneath U.S. land and off its shores remain untapped because of government restrictions. Renewable energy projects are being delayed by regulatory "green tape," lawsuits, and a Not In My Backyard (NIMBY) mentality.

Moreover, Washington policymakers are focusing on legislation to mandate reductions in greenhouse gases at great economic cost.

According to the American Council for Capital Formation, a climate change policy considered by Congress last year—the Lieberman—Warner bill—would result in the loss of between 1.2 million and 1.8 million jobs in 2020. In addition, a proposal to mandate that a certain percentage of electricity generation be satisfied by renewable sources in each state could also have severe economic consequences. The Energy Information Administration estimates that a 15% renewable portfolio standard would require electricity consumers to pay $21 billion more for electricity through 2030.

Meanwhile, the EPA is expected to issue a finding that would make carbon dioxide a dangerous pollutant to be regulated under the Clean Air Act. This distinction would require essentially every construction project to obtain a special permit, which would increase costs, expand the length of projects, and potentially mitigate the positive effects of the economic stimulus.

The Impact—A Chamber Member's Perspective

Dick Longo of Walker Magnetics says his company is not growing as fast as it could because of regulatory obstacles to renewable energy projects.

As part of our ongoing series, we examine the nation's need to grow and diversify its energy supply while taking steps to protect the environment in ways that don't curtail economic growth and eliminate jobs.

Nationwide, green energy products are being tangled up in regulatory knots, lawsuits, and local opposition, hampering the development of much-needed energy supplies and damaging the growth potential of companies like Walker Magnetics.

Worcester, Massachusetts-based Walker Magnetics manufactures the magnet systems that move the steel used to build the large columns in wind turbines. It also produces the rotary magnetic chucks that hold turbine gears in place during the machining process. Company President and Chief Operating Officer Dick Longo has seen countless wind turbine projects fail to get off the ground because of NIMBY attitudes toward the turbines themselves and the transmission lines necessary to transport wind-generated energy to users.

"The single biggest obstacle to our company's growth are the locals who don't want a wind turbine in their backyards," he says.

Walker Magnetics has, however, found a friendlier wind turbine market overseas. The company, which has 250 employees, has three plants in Europe and two strategic partnerships in China plus three North American plants. Opposition to renewable energy projects in its overseas markets is nearly nonexistent. "You'd be booed if you stood up at a meeting in Europe and said you didn't want a wind turbine," says Longo.

Currently, the wind turbine market makes up 5% to 7% of Walker Magnetics' revenues, but Longo anticipates that figure will grow to 20% to 25% within five years if regulatory obstacles are eliminated or scaled back.

The Solution—The Chamber's Plan of Action

The U.S. Chamber's message on energy policy is clear and simple: America's economic prosperity is closely tied to the availability of affordable, abundant, and clean energy supplies.

If the United States continues to restrict domestic production and refuses to build new energy infrastructure, jobs will be shipped overseas, costs will rise, and the nation's competitiveness will decline.

The Chamber believes that global climate change must be addressed, but the right solution calls for the cooperation of other carbon-emitting nations, promotes accelerated technology development and deployment, preserves U.S. jobs and the economy, reduces barriers for developing climate-friendly energy sources, and promotes efficiency.

The Chamber's Institute for 21st Century Energy (www.energyxxi.org/) is working across the country and around the world to educate consumers and policymakers and to reframe the debate on energy and climate change issues. "The time is right for the private sector and government to come together and transform our energy challenges into opportunities to drive economic recovery, create jobs, and secure our energy future," says Karen Harbert, Institute president and CEO.

A Chamber team of energy experts and lobbyists is fighting for a comprehensive energy policy on Capitol Hill and in the regulatory agencies every day. "We must remember that energy costs are borne by real families and businesses and are reflected in the prices we pay for almost everything," says Bill Kovacs, Chamber vice president for Environment, Technology, and Regulatory Affairs.