By The Numbers
Next to the IRS, the U.S. Environmental Protection Agency might be the federal agency Oklahomans most love to hate. Ironically, it is also the federal agency that might make the most significant positive impact on the state economy in the coming years.
Last week the U.S. Supreme Court confirmed that the EPA has the authority to regulate greenhouse gas emissions from new or modified utility plants and factories. These greenhouse gas emissions are blamed by a vast majority of climate scientists for the growth in carbon dioxide in the atmosphere (to the highest levels in human history) and the subsequent warming of the earth’s climate in the past century.
Not surprisingly, the idea that the EPA will be able to more aggressively regulate the use and production of energy, has many Oklahomans concerned. However, there are two important reasons why such concerns are overblown. First, despite the protestations of some, history shows that the EPA is not a political cog pursuing a progressive agenda. In fact, the EPA was formed in 1970 under Republican former-President Richard Nixon. It was strengthened in 1990 under Republican former-President George H.W. Bush. And it first began regulating greenhouse gas emissions in 2007 under Republican former-President George W. Bush.
Second, and perhaps most important, is that more aggressive regulation of greenhouse gas emissions will actually benefit many in Oklahoma’s energy industry. It is true that any effort to reduce greenhouse gas emissions, whether through emissions limits or a carbon tax, will raise energy costs, and decrease employment. It also will decrease demand for energy, but not necessarily for all energy sources. In fact, energy economists generally expect that any new environmental regulation of greenhouse gas emissions will increase the demand for natural gas.
While natural gas also generates greenhouse gases when burned, and would therefore be subject to the enhanced regulations, natural gas is far cleaner than the coal we typically use to generate electricity. In fact, natural gas generates fewer than half the carbon dioxide that burning coal generates. So, the easiest way for firms to meet the new emissions requirements will be to use more natural gas. As we’ve seen here in Oklahoma in recent years, an increase in demand for natural gas boosts Oklahoma’s economy by enabling firms to create new jobs and invest more in the state. Not only is that a positive economic benefit, but relying more upon cleaner natural gas is a positive environmental benefit as well.
It’s no secret that Oklahoma’s economy depends heavily on a healthy natural gas industry and it is that natural gas industry that likely will be the greatest beneficiary of the new regulations on greenhouse gas emissions that the EPA is implementing. Not only will we share in the benefits of a cleaner environment, we also will do so without facing the economic costs likely to be borne by others.
MICKEY HEPNER is the dean of the College of Business Administration at the University of Central Oklahoma. Hepner serves on the Executive Committee of the Board of Directors for The Oklahoma Academy.