Daily Energy Insider: NABTU, Pipeline project delays hurt economic growth

Investing in U.S. energy infrastructure is critical to driving energy independence and economic growth, but opposition to oil and natural gas pipeline projects has far-reaching consequences, a major union official recently told Daily Energy Insider.

“When projects are postponed or canceled or don’t get approval to go forward, that has a huge ripple effect on the suppliers, manufacturers and construction workers,” Sean McGarvey, president of North America’s Building Trades Unions (NABTU), which represents 3 million members across 15 unions in the United States and Canada, said. “And it adds to the local population’s cost of energy because they don’t have that free flow that creates competition and brings energy costs down for local homeowners.”

In a case that has garnered the most national interest in recent months, a battle has ensued over building the $3.7 billion Dakota Access pipeline, where Native Americans and activists argue that the project would threaten their drinking water and sacred lands.

A recent appeals court decision allowed construction to proceed, but hurdles remain. The ruling comes not long after the Obama administration intervened to halt the project.

NABTU said that the project will improve access to domestic fuel, inject $5 billion into the economies for communities from North Dakota to Illinois, and provide “family sustaining wages and benefits” for the men and women who will construct and maintain the pipeline.

The Northeast Energy Direct project in New England is another project that was suspended earlier this year due to political opposition, which could have a negative economic impact.

A new study by the New England Coalition for Affordable Energy found that the New England region is at a greater risk of higher energy costs and price volatility than a year ago due to recent delays and cancellations of energy projects.

The study assessed energy marketplace changes that occurred since Aug. 2015. At that time, Daymark Energy Advisors, which conducted the study, found that a failure to expand natural gas pipelines, electricity transmission lines and electricity generation could lead to $5.4 billion in higher energy costs to the New England region by 2020.

The abundance of natural resources in the United States has the potential to change the economic trajectory for tens of millions of people, McGarvey said, and is not unlike the major impact that the industrial revolution, the interstate highway system or the internet has had on the country.

The unpredictability of getting some critical pipeline projects and other types of energy infrastructure approved, however, has a direct impact on jobs, apprenticeships and workplace-based training programs.

“It is one more of these uncertainties particularly in energy infrastructure that gives people pause about how many people they can recruit and start to train when we don’t know if a project is going to go forward or stopped,” McGarvey said.

While Congress is continuing its work in a conference committee to finalize comprehensive energy legislation this year, McGarvey said that more needs to be done to develop energy infrastructure.

“We really need a serious conversation and a serious group to come together to put comprehensive energy legislation together that encompasses what the world looks like today and what it will look like 50 years from now,” McGarvey said.

The organization is also calling on the next president to develop a major infrastructure investment program. In addition, NABTU has urged the creation of innovative financing mechanisms for the construction of costly nuclear power plants.

The group has recommended strengthening the nation’s energy infrastructure through increased investment in nuclear power and the creation of an Energy Infrastructure Finance and Innovation program modeled after the Transportation Infrastructure Finance and Innovation Act, which provides federal loans to finance transportation projects.

“It makes sense with nuclear being greenhouse gas-emission free, that we should be finding ways to help finance that without putting taxpayers on the hook so that we can build more nuclear that is safe and an economic driver for communities,” McGarvey said.

NABTU’s unions and contractors operate more than 1,600 training centers in the United States. More than $1 billion in private investment is directed toward the organization’s joint apprentice training committee system each year. NABTU also runs more than 100 apprenticeship-readiness programs across the country.

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