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Economy

Oil Lobby Working With Republicans Behind-The-Scenes To Push ‘Gateway’ To Carbon Tax

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From the Daily Caller News Foundation

By NICK POPE

 

America’s leading oil and gas trade group is working behind the scenes with moderate House Republicans to push support for a bill that critics say could lead to a domestic carbon tax, according to an email obtained by the Daily Caller News Foundation and sources familiar with the matter.

On May 14, Chris Boness, the director of federal relations for the American Petroleum Institute (API), sent an email to an API mailing list that named several House lawmakers intending to co-sponsor the PROVE IT Act alongside Republican Utah Rep. John Curtis. The trade group has also met with staffers to try to secure support for the bill, which API supports, according to sources familiar with the matter.

Assuming the House version is the same as the already-introduced Senate version, the bill would instruct the Department of Energy (DOE) to study the carbon intensity of goods — including aluminum, steel, plastic and crude oil — produced in the U.S. and the carbon intensity of products from other countries, according to E&E News.

Dozens of the PROVE IT Act’s critics have described the bill as a possible “gateway” to domestic carbon taxes because it would effectively instruct the federal government to calculate an implicit cost of carbon with few restrictions on how that official metric is used in the future.

“Thanks for those that joined today’s meeting,” Boness wrote in the email obtained by the DCNF. “Here is the list of current [Republican] cosponsors of the PROVE IT Act: Curtis, [Michigan Rep. Tim] Walburg (sic), [Ohio Rep. Bob] Latta, [New York Rep. Andrew] Garbarino, [Florida Rep. Maria Elvira] Salazar, [Michigan Rep. Mariannette] Miller-Meeks, [Indiana Rep. Larry] Bucshon, [Oregon Rep. Lori] Chavez-DeRemer. Additionally, [Georgia Rep. Buddy] Carter, [New York Rep. Mike] Lawler and [Pennsylvania Rep. Dan] Meuser seemed interested. Will keep you updated if others join and send updates on introduction.”

API representatives have had meetings addressing the PROVE IT Act with lawmakers’ offices, sources familiar with the matter told the DCNF. The offices of Curtis, Walberg, Latta, Garbarino, Salazar, Miller-Meeks, Bucshon and Chavez-DeRemer did not respond to questions about why they apparently support the bill.

Carbon pricing is broadly unpopular with Republicans, according to E&E News. Generally, polling indicates that Republicans do not consider climate change to be a problem in need of major government-led solutions and that energy affordability, for example, is a much stronger concern.

API Email re: PROVE IT Act by Nick Pope on Scribd

 

The bill’s proponents tout it as a measure to reward American companies for producing products more cleanly than foreign competitors, but opponents are strongly concerned that the bill instructs the federal government to effectively set a price on carbon with insufficient restrictions what the government can do in the future.

Notably, Republican West Virginia Sen. Shelley Moore Capito introduced an amendment to the Senate version that would prevent the data collected from being used as the basis for carbon taxes or tariffs, but Democrats killed that proposal while the bill sat in the Senate Environment and Public Works Committee.

Despite concerns from those opposed to the bill that it could be a first step to carbon taxes or tariffs, API supports the PROVE IT Act. Notably, API is in favor of carbon pricing.

“America’s oil and natural gas is produced under some of the highest environmental standards in the world,” a spokesperson for API told the DCNF. “Efforts like the PROVE IT Act are bipartisan opportunities to help study and quantify that advantage and demonstrate our industry’s commitment to producing cleaner, safer, and more affordable energy here at home while still supplying the energy our world needs.”

Some of the lawmakers API suggested could be interested in co-sponsoring the PROVE IT Act are wary, however.

Rep. Meuser, whose district includes energy-rich parts of Pennsylvania, is opposed to the bill as it stands, despite API’s suggestion that he is potentially interested in supporting it, a source familiar with Meuser’s thinking told the DCNF.

Rep. Carter is skeptical of policies that could lead to a carbon tax.

“Mr. Carter is reviewing the legislation,” a spokesperson for Carter told the DCNF. “He is absolutely opposed to anything that could lead to a carbon tax.”

In the eyes of those opposed to the bill, the PROVE IT Act would make it easier for a second-term Biden administration to pursue carbon taxes or tariffs that would hurt American consumers and certain types of energy producers.

“Our opposition to the PROVE IT Act is clear and concise. The latest attempt by some in Congress who are trying to create a structure that would lead to a domestic carbon tax will have price implications on our energy, particularly our fuel,” Tom Pyle, president of the American Energy Alliance, told the DCNF. “I do think that it is important to recognize that John Podesta made it clear that this is a second term agenda item for the Biden administration. And why would any Republican want to be the lead on helping President Biden further his war on affordable energy?”

Mike McKenna, a GOP strategist with extensive experience in the energy sector, expressed a similar view.

“The big problem with the bill is that it creates infrastructure to impose a carbon dioxide tax,” McKenna told the DCNF. “As everyone who has had more than ten seconds of exposure to the federal government knows, once that infrastructure can be put in place, it’s going to be used.”

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Alberta

Ford and Trudeau are playing checkers. Trump and Smith are playing chess

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By Dan McTeague

 

Ford’s calls for national unity – “We need to stand united as Canadians!” – in context feels like an endorsement of fellow Electric Vehicle fanatic Trudeau. And you do wonder if that issue has something to do with it. After all, the two have worked together to pump billions in taxpayer dollars into the EV industry.

There’s no doubt about it: Donald Trump’s threat of a blanket 25% tariff on Canadian goods (to be established if the Canadian government fails to take sufficient action to combat drug trafficking and illegal crossings over our southern border) would be catastrophic for our nation’s economy. More than $3 billion in goods move between the U.S. and Canada on a daily basis. If enacted, the Trump tariff would likely result in a full-blown recession.

It falls upon Canada’s leaders to prevent that from happening. That’s why Justin Trudeau flew to Florida two weeks ago to point out to the president-elect that the trade relationship between our countries is mutually beneficial.

This is true, but Trudeau isn’t the best person to make that case to Trump, since he has been trashing the once and future president, and his supporters, both in public and private, for years. He did so again at an appearance just the other day, in which he implied that American voters were sexist for once again failing to elect the nation’s first female president, and said that Trump’s election amounted to an assault on women’s rights.

Consequently, the meeting with Trump didn’t go well.

But Trudeau isn’t Canada’s only politician, and in recent days we’ve seen some contrasting approaches to this serious matter from our provincial leaders.

First up was Doug Ford, who followed up a phone call with Trudeau earlier this week by saying that Canadians have to prepare for a trade war. “Folks, this is coming, it’s not ‘if,’ it is — it’s coming… and we need to be prepared.”

Ford said that he’s working with Liberal Finance Minister Chrystia Freeland to put together a retaliatory tariff list. Spokesmen for his government floated the idea of banning the LCBO from buying American alcohol, and restricting the export of critical minerals needed for electric vehicle batteries (I’m sure Trump is terrified about that last one).

But Ford’s most dramatic threat was his announcement that Ontario is prepared to shut down energy exports to the U.S., specifically to Michigan, New York, Wisconsin, and Minnesota, if Trump follows through with his plan. “We’re sending a message to the U.S. You come and attack Ontario, you attack the livelihoods of Ontario and Canadians, we’re going to use every tool in our toolbox to defend Ontarians and Canadians across the border,” Ford said.

Now, unfortunately, all of this chest-thumping rings hollow. Ontario does almost $500 billion per year in trade with the U.S., and the province’s supply chains are highly integrated with America’s. The idea of just cutting off the power, as if you could just flip a switch, is actually impossible. It’s a bluff, and Trump has already called him on it. When told about Ford’s threat by a reporter this week, Trump replied “That’s okay if he does that. That’s fine.”

And Ford’s calls for national unity – “We need to stand united as Canadians!” – in context feels like an endorsement of fellow Electric Vehicle fanatic Trudeau. And you do wonder if that issue has something to do with it. After all, the two have worked together to pump billions in taxpayer dollars into the EV industry. Just over the past year Ford and Trudeau have been seen side by side announcing their $5 billion commitment to Honda, or their $28.2 billion in subsidies for new Stellantis and Volkswagen electric vehicle battery plants.

Their assumption was that the U.S. would be a major market for Canadian EVs. Remember that “vehicles are the second largest Canadian export by value, at $51 billion in 2023 of which 93% was exported to the U.S.,”according to the Canadian Vehicle Manufacturers Association, and “Auto is Ontario’s top export at 28.9% of all exports (2023).”

But Trump ran on abolishing the Biden administration’s de facto EV mandate. Now that he’s back in the White House, the market for those EVs that Trudeau and Ford invested in so heavily is going to be much softer. Perhaps they’d like to be able to blame Trump’s tariffs for the coming downturn rather than their own misjudgment.

In any event, Ford’s tactic stands in stark contrast to the response from Alberta, Canada’s true energy superpower. Premier Danielle Smith made it clear that her province “will not support cutting off our Alberta energy exports to the U.S., nor will we support a tariff war with our largest trading partner and closest ally.”

Smith spoke about this topic at length at an event announcing a new $29-million border patrol team charged with combatting drug trafficking, at which said that Trudeau’s criticisms of the president-elect were, “not helpful.” Her deputy premier Mike Ellis was quoted as saying, “The concerns that president-elect Trump has expressed regarding fentanyl are, quite frankly, the same concerns that I and the premier have had.” Smith and Ellis also criticized Ottawa’s progressively lenient approach to drug crimes.

(For what it’s worth, a recent Léger poll found that “Just 29 per cent of [Canadians] believe Trump’s concerns about illegal immigration and drug trafficking from Canada to the U.S. are unwarranted.” Perhaps that’s why some recent polls have found that Trudeau is currently less popular in Canada than Trump at the moment.)

Smith said that Trudeau’s criticisms of the president-elect were, “not helpful.” And on X/Twitter she said, “Now is the time to… reach out to our friends and allies in the U.S. to remind them just how much Americans and Canadians mutually benefit from our trade relationship – and what we can do to grow that partnership further,” adding, “Tariffs just hurt Americans and Canadians on both sides of the border. Let’s make sure they don’t happen.”

This is exactly the right approach. Smith knows there is a lot at stake in this fight, and is not willing to step into the ring in a fight that Canada simply can’t win, and will cause a great deal of hardship for all involved along the way.

While Trudeau indulges in virtue signaling and Ford in sabre rattling, Danielle Smith is engaging in true statesmanship. That’s something that is in short supply in our country these days.

As I’ve written before, Trump is playing chess while Justin Trudeau and Doug Ford are playing checkers. They should take note of Smith’s strategy. Honey will attract more than vinegar, and if the long history of our two countries tell us anything, it’s that diplomacy is more effective than idle threats.

Dan McTeague is President of Canadians for Affordable Energy.

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Business

Canada needs to get serious about securing its border

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From the Macdonald Laurier Institute

By Todd Hataley for Inside Policy

US President-elect Donald Trump has made clear his intention to call out Canada on weak enforcement on migration, money laundering, and the cross-border trafficking of narcotics, especially fentanyl.

Until just very recently, Canada has remained largely silent on these issues. Security agencies, such as the Royal Canadian Mounted Police (RCMP), Ontario Provincial Police (OPP), Sûreté du Québec (SQ) and the Canada Border Services Agency (CBSA), have tried to secure the border via memorandums of understanding, framework agreements, and legislated agreements that allow them to share information and even work together.

However, resources are limited for cross-border law enforcement co-operation. CBSA remains  understaffed and RCMP Integrated Border Enforcement Teams (which work with US security agencies) have limited geographic reach, leaving much of the enforcement between ports of entry left to police of jurisdiction, who already are hard pressed to provide services to the communities they serve.

The Canadian government’s apparent strategy of largely ignoring the problem is becoming more difficult to maintain. With the United States Border Patrol intercepting increasing numbers of illegal migrants crossing into that country from Canada, it’s clear the porous border is a concern. Exacerbating the situation is the recent discovery of illegal narcotic super labs in Canada – where production far outstrips the market – and Canada’s unfortunate, albeit well-deserved reputation as a haven for global money launderers.

Thanks to Trump’s 25 per cent tariff threat, the crisis is now endangering Canada’s relationship with its largest and most-important trading partner. This announcement sent all sectors of government and the private sector into a frenzy, prompting Prime Minister Justin Trudeau to fly to Florida to seek out an early audience with Trump at his Mar-a-lago resort home. Trudeau’s team spun the trip as proof that the federal government is serious about working with the US to address its border security and public safety concerns.

But with political crises piling up, it will be difficult for Trudeau to also manage the political optics of kowtowing to Trump, who is widely unpopular among Canadians. Spending extra money to appease Trump during the ongoing housing, immigration, and health care crises could make the Trudeau’s popularity nosedive even further. Adding insult to injury, Trump is essentially demanding that Canada do America’s work by stopping illicit goods and people from entering the United States: customs and border security officials generally work on the principle of stopping goods from entering their country.

Trudeau faces many practical challenges, including the need to ramp up the number of border and law enforcement agents who have the skill sets and training required to police offences such as drug production, money laundering, and the cross-border smuggling of goods and humans. Purchasing helicopters and drones to conduct surveillance will do little to aid enforcement, since most goods smuggled across the border pass through legitimate border crossings. RCMP Commissioner Mike Duheme even suggested putting RCMP cadets along the border – a challenging proposition since vast swathes of the border are either wilderness or water. Surveillance is one thing, but the act of enforcement takes skilled people with the capacity to investigate, gather evidence, and articulate that evidence into something that can be used by the courts for convictions. These concerns are not being addressed in this current frenzy to spend money on border security.

There is also good evidence that fortifying the border, or what has become known as forward deployment along the border, does nothing to stop the cross-border transit of contraband goods and people. One need only look as far as the United States-Mexico border to see the failure of forward deployment.

As authorities increase border enforcement activities, the costs of smuggling goods and people mounts for criminals. Eventually, it drives out amateurs, leaving only the professional, skilled, and well-equipped criminal groups. This, in turn, often leads to increasing levels of violence along the border, making interdiction and disruption far more difficult for law enforcement agencies.

Canada has several clear options to address Trump’s border concerns. It can increase the staffing of frontline CBSA officers, including border agents, inland enforcement units that actively investigate and remove individuals from Canada, international liaison officers, and customs processing staff. It can also create a plan for CBSA to take over enforcement between ports of entry. Currently, CBSA enforces entry into Canada at the ports of entry and the RCMP are responsible for the areas in between. Having a single agency manage the border builds capacity and expertise, avoiding inter-bureaucracy competition and confusion.

Canada can also work to better integrate law enforcement, intelligence units, and border services at all levels of government and across international boundaries. Cross-border crime operations are often planned and execute far from the border.

Some of this already takes place, as noted above, but it needs to go much deeper and be more supportive at both institutional and individual levels. This process must also include private sector stakeholders: companies such as FedEx, UPS, and Amazon, as well as freight forwarders, trucking companies, and customs brokers, are all involved in cross-border trade. Their participation as partners in reducing cross-border criminal activity is essential.

Finally, the government needs to designate laws specific to cross-border crime and include meaningful penalties as a means of deterrence.

Hyper-focusing on the border while ignoring other aspects of cross-border crime may be good political optics, but it is a bad strategy. What we really need is functional enforcement – including an integrated process extended vertically and horizontally across all sectors of border stakeholders, at and away from the border, supported by strong policy and legislation. This is the path forward to better cross-border crime enforcement.


Dr. Todd Hataley is a professor in the School of Justice and Community Development at Fleming College. A retired member of the Royal Canadian Mounted Police, he worked as an investigator in organized crime, national security, cross-border crime, and extra-territorial torture. He is a contributor to the Macdonald-Laurier Institute.

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