The Cost of Red Tape: $1.1 Trillion & 2 Million Jobs
Further to Bill Kovacs’ and Kevin Ganster’s posts below, at today’s event to roll out the study of the economic impact of red tape delays on energy projects, there was a good press turnout, with a number of reporters in the room and over 50 reporters on the phone. Bill Kovacs set the table, giving the top-line findings of the study which he set out below: If regulatory red tape and permitting delays were removed from stalled energy projects, we could unleash $1.1 trillion in GDP and create 1.9 million jobs a year during the construction phase of these projects alone.
He then turned it over to Steve Pociask, President of TeleNomic Research, and co-author of the study. The report identified 351 projects in 49 states that are being held up by various stages of an interminable permitting process. Of these, there were 22 nuclear projects, 39 transmission projects, 111 coal and 140 renewable projects, the latter making up 45% of the energy-producing projects that are being delayed and including wind, wave, solar, biomass and geothermal. How ironic that environmentally-friendly projects are being held up by environmentalists through the permitting process. Pociask said that for the 351 projects, the initial investment was $577 billion, equaling $1.1 trillion in final output for the economy, with employment earnings of $351 billion. With unemployment stubbornly high, these would be welcome jobs and much-needed earnings across the country.
University of Maryland Professor Peter Morici, former Chief Economist for the International Trade Commission, reviewed the study for soundness and accuracy of its methodology and findings. He concluded, as he said at today’s event, that he was “very impressed” and “very satisfied” with the “thoroughness” of the study and added that there was “no political motivation” in how the study was conducted. This is unassailable data. He noted that if these project were able to move forward, it would drop the unemployment rate by a full half of one percent, a substantial drop.
In 2009, the Chamber sent a letter to Congress noting the abject lack of “shovel ready” projects due to regulatory delays. Two years later, there has been little to no progress on these projects, because, as Kovacs pointed out, the number of hurdles are substantial and seemingly endless, from zoning boards to local courts to various endangered species claims and other tactics. These projects are being stalled, stopped, or outright killed nationwide due to “Not In My Back Yard” (NIMBY) activism, a broken permitting process and a system that allows limitless challenges by opponents of development. The end result is that the economy continues to stagnate and jobs and growth are not created.
You can read the full study here, “Progress Denied: A Study on the Potential Impact of Permitting Challenges Facing Proposed Energy Projects” and the Executive Summary here. There’s also a great map which shows stalled projects by state.