Congress Rolls Back Energy and Federal Contractor Regulations | U.S. Chamber of Commerce
Feb 06, 2017 - 8:15am

Congress Rolls Back Energy and Federal Contractor Regulations


Senior Editor, Digital Content

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A natural gas rig in Wyoming.

Congress is rolling back some of the regulatory red tape created by the Obama administration.

Using the Congressional Review Act (CRA), Congress can disapprove of regulations that have been finalized in the last 60 days Congress has been in session. When the resolutions of disapproval are signed by the president, they’re taken off the books.

Early in this session Congress has jumped right in working to relieve some regulatory burdens on businesses.

Stream Rule

The first regulation on its way for repeal is the Interior Department’s stream protection rule. This duplicative regulation harmful to coal mining was finalized six weeks after Election Day. In a key vote letter to House members, the U.S. Chamber explained the rule:

exceeds the Department’s authority, will cause significant economic harm and job losses, and interferes with longstanding and successful state efforts to protect water quality.

In putting together the regulation, the Department acknowledged the rule would have adverse economic impacts as a result of reduced coal production. Yet, the agency may be underestimating the economic impact because it ignored permitting delays and litigation costs. These adverse impacts would increase production costs of U.S. coal relative to foreign competitors and likely reduce U.S. exports.

The U.S. Chamber also signed onto a letter with 30 state and local chambers of commerce asking Congress to repeal the stream protection rule:

It is a one-size-fits-all federal mandate that interferes with the longstanding federal-state balance in overseeing mining operations. It will place massive amounts of coal reserves—and the affordable energy they provide—off limits. The National Mining Association estimates that the SPR would eliminate up to 270,000 jobs, including 80,000 mining jobs.

The negative impacts of the regulation will be felt far beyond the coalfields, extending to railroads, utilities, and the companies that service and support mining communities, from restaurants to hotels to equipment suppliers. The rule will drive up energy costs for families and businesses, and it will reduce state and local tax revenues in areas of the country that have already been devastated in recent years. This means negative impacts to schools, roads, first responders and nearly all state and local government services in affected areas.

After the Senate voted to repeal the regulation, Karen Harbert, president and CEO of the U.S. Chamber’s Institute for 21st Century Energy said:

Today’s vote to block the Obama Administration’s unnecessary and costly stream rule is a victory for common sense and American energy production. This rule interfered with state authorities and would have placed massive amounts of coal resources off limits for production, costing us jobs and higher energy prices.

Resource Extraction

The second regulation sent to President Trump also involves energy.  Last summer, the Securities and Exchange Commission (SEC) finalized a regulation that requires American energy companies to release sensitive and detailed commercial information about foreign energy projects.

In a key vote letter to House members, the U.S. Chamber explained, “Similar rules from SEC have been killed by the courts because SEC violated the free speech protections of the First Amendment.”

The Chamber added, “In its own description of the rule, SEC recognized that the rule would result in a loss of competitive advantage by U.S. companies relative to some foreign firms.”

Methane Emissions

Ten days after Election Day, the Bureau of Land Management finalized a “venting and flaring” regulation to reduce methane emissions from wells on federal and tribal land.

The U.S. Chamber along with state and local chambers support nixing the rule:

Venting and flaring gasses from oil and natural gas wells is vital to manage pressure and maintain safety. While energy companies have every fiscal incentive to minimize venting and flaring, they sometimes must do so due to a lack of sufficient infrastructure to transport natural gas to market. This is especially true for wells in newly productive areas on federal lands. Nonetheless, through technological innovation, industry has successfully and voluntarily reduced methane emissions, even as natural gas production has grown significantly.

Unfortunately, under the guise of reducing methane emissions and increasing government royalties, BLM’s 11th hour regulatory action imposes costly and prescriptive requirements on oil and natural gas production that will make energy development uneconomical in many areas.

On February 3, 2017, the House voted to repeal the rule, and it awaits action in the Senate.

Blacklist for Federal Contractors

Last year, the FAR Council finalized regulations enacting President Obama’s Fair Pay and Safe Workplaces Executive Order. The rules require that “federal contractors must disclose mere allegations of federal labor violations, potentially locking them out of federal contracts without giving them a chance to challenge the charges,” writes Marc Freedman, U.S. Chamber executive director of labor law policy, thereby earning the E.O. and regulations the nickname of "blacklisting." What’s more, it would give unions leverage in labor negotiations with companies who have federal contracts by threatening to file federal labor violation allegations.

As Jack Howard, senior vice president of Congressional and Public Affairs states in the Chamber’s letter:

The Executive Order and the FAR Council’s rule, are seriously problematic, burdensome and unwarranted:

  •  Because of any contractor’s desire to remain eligible, enforcement agencies will have extraordinary leverage to extract agency-favorable “labor compliance agreements” from contractors to resolve violations, even before the contractors will have had a chance to present their defense.
  • They contradict the Federal Arbitration Act that permits employers to use pre-dispute arbitration clauses in employment contracts to resolve employee complaints without the expense and burden of going to court. Arbitration is a simpler, fairer and faster way for all parties to resolve disputes that arise between them. Such use of these clauses have been upheld by the courts numerous times.
  • The addition of contracting penalties and new levels of severity for violations usurps Congress’s exclusive authority to write labor and employment laws.
  • They exceed the authority provided under the Procurement Act, which allows the president to change federal procurement only to increase “economy and efficiency.” The reporting requirements will likely spur massive delays for procurement, particularly for key Department of Defense items.

The U.S. Chamber joined a chorus of associations representing companies doing business with the federal government in opposing the Blacklisting rule. The House voted to repeal the rule February 2, prompting Randy Johnson, U.S. Chamber Senior Vice President for Labor, Immigration, and Employee Benefits to applaud:

If implemented this Executive Order would have resulted in contractors sacrificing their due process rights, massive reporting requirements that would have generated delays in critical procurement actions, and given enforcement agencies enormous leverage to settle violations on very agency favorable terms.

With a president willing to sign them, look for Congress to make repealing harmful regulations a regular part of its work this year.

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About the Author

About the Author

Sean Hackbarth
Senior Editor, Digital Content

Sean has written for various Chamber properties since 2011. In 1999, Sean launched a “weblog” and never looked back, becoming a self-proclaimed pioneer of the medium.