Hundreds of regulations impact the energy industry
August 24, 2012 | By
Barbara Vergetis Lundin
The face of energy and environmental regulations in the U.S. is changing. The pace and complexity of U.S. federal regulations is rapidly increasing and becoming more difficult to comply with. Just look at the increased scrutiny and difficulty of completing a merger in the energy industry, as well as recent developments in EPA regulations concerning carbon emissions, which can be an expensive proposition for utilities. This growth and change has big consequences for energy markets and the cost of energy for the manufacturing sector. The rising cost of complying with more and more regulations significantly impacts production costs in the energy-intensive sectors, leading to less demand for their output, according to research conducted by NERA Economic Consulting and commissioned by the Manufacturers Alliance for Productivity and Innovation (MAPI). The EPA imposes the largest number of regulations on the manufacturing sector with respect to the number of regulations (972 regulations in total, including 122 major regulations; imposed on the energy sector are 106 regulations in total, including 17 major regulations – although much less than environmental regulations, they are still significant. Cloud computing and virtualization are transforming the way in which IT is delivered and consumed. But as adoption continues to rise, organizations require a unified view of network, server and application performance across physical and virtual infrastructures to meet current SLAs and future demands. In 2012 alone, regulations may reduce manufacturing output by between $200 billion and $500 billion, and manufacturing exports may be 6.5 percent to 17 percent lower than they would be without the regulatory burden, the research contends. In particular, output in the chemicals and petroleum products sector could fall by 9 to 10 percent per year on average over the next decade, the research says. The most significant energy regulations impacting manufacturing in these sectors include energy-efficiency standards for durable goods and equipment; energy-efficiency standards for buildings; alternative fuel mandates for fleets; and renewable fuels standards, including ethanol requirements. These predictions are based on an analysis of more than 30 years of regulations. For more:
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