Trump should be commended for trying to save the US energy industry

Editor's Note: (Dan K. Eberhart is CEO of Canary, an independent oilfield services company in the United States, and a frequent commentator on oil markets and US politics. The opinions expressed in this commentary are his own.)

For years, the US oil industry has had to compete for space with agriculture goods and other commodities on railways and public roads, raising energy prices and increasing congestion on the highways and smaller roads American travelers depend on every day.

Pipelines are by far the most efficient means of transporting oil and natural gas. Unfortunately, construction of new pipelines and other critical energy infrastructure is too often blocked by states, which have the power to reject pipelines under a little-understood provision of the federal Clean Water Act.

But now, President Trump is attempting to bring some much-needed relief to the process with two executive orders that could limit states' power to block pipelines, and grant federal officials more leeway to approve permits.

Trump should be commended for prioritizing the delivery of abundant and affordable energy. The US energy industry cannot continue to grow without relief from infrastructure constraints, many of which come from state leaders with the misguided belief that being pro-clean energy means they must also oppose any fossil fuel project.

Under the Clean Water Act, states must certify that projects, including pipelines, mines and bridges, comply with state water quality standards as well as federal. Unfortunately, this provision, known as Section 401, has too often been used by environmental activists and their political allies to block fossil fuel projects.

Several states have already done so, including New York and Washington. New York has blocked multiple natural gas pipelines by dragging out the permitting process for years, despite federal approvals and growing Northeast demand for gas. Officials in the state of Washington vetoed efforts to move coal from Wyoming to a proposed West Coast export facility that would have shipped coal to markets in Asia.

But blocking these projects denies consumers — even beyond their states' borders — access to more affordable energy. In the Northeast, where the dependency on home heating oil is high, blocking access to natural gas denies these homes of cheaper and cleaner natural gas.

Under Trump's first executive order, the Environmental Protection Agency will consult with tribes, states and relevant agencies and provide new guidance to states on complying with the Clean Water Act. The purpose is to reduce review times and remove unnecessary roadblocks.

Trump's order also directs the US Department of Transportation to propose a rule allowing liquefied natural gas to be shipped in approved rail tank cars. The move will increase the availability of natural gas in areas without existing pipeline infrastructure.

A second executive order is designed to ease the process for approving energy projects that cross international borders — a direct response to the president's frustration over the Keystone XL pipeline, which he first approved two years ago, but remains stalled more than a decade after it was first proposed.

The administration hopes the two measures will bring some rationality back to the permitting process, honoring states' rights to weigh in but also respecting the thoroughness of the federal process and the need for federal policymakers to set national energy policy.

Will the executive orders have the intended effect? Not completely.

Although the Clean Water Act wasn't meant to give states de facto veto power over energy projects, the law was written and passed by Congress, and it's ultimately up to Congress to address any shortcomings. What the president's orders can do is provide direction to federal agencies on how to implement the law in instances where the original intent of Congress is unclear.

With animosity high between liberal states and Trump — who pulled the United States out of the Paris climate accord — and with the 2020 elections fast approaching, we should expect legal challenges to both executive orders, delaying their effective implementation.

Even if Trump's executive orders do not have their full intended effect, let's hope they at least force policymakers and voters to think realistically about our national energy policy and the best ways to protect the environment and economy together. Trump's energy dominance strategy is paying real dividends in economic growth and maintaining low energy prices.