The Keystone XL Pipeline saga continues with Indiana Sen. Richard Lugar leading the effort to revive the project. The Competitive Enterprise Institute looks at the union divide that was deepened by President Obama’s decision to kill the job-creating movement of oil from Canada to the Gulf Coast.

Terry O’Sullivan, head of the Laborers’ International Union of North America (LIUNA ), has called Obama’s action "politics at its worst," saying that "once again the President has sided with environmentalists instead of blue collar construction workers." O’Sullivan angrily vowed that "workers across the U.S. will not forget this."

The Keystone project has long pitted the two key Obama constituencies against one another. Green groups agitated against the pipeline over worries of water contamination and other (largely baseless) environmental fears, while many building and trade unions lusted after the thousands of construction jobs the pipeline would create in the United States.

Mark H. Ayers, president of the Building and Construction Trades Department, AFL-CIO has publicly hammered the jobs issue. In a January 18th press release, Ayers voiced the frustration of many union workers, saying "…with a national unemployment rate in construction at 16 percent nationally, it is beyond disappointing that President Obama placed a higher priority on politics rather than our nation’s number one challenge: jobs."

James T. Callahan, president of the International Union of Operating Engineers, agrees, complaining to the Washington Post  that Obama’s decision was "…a blow to America’s construction workers," who are struggling in "the sector hardest hit by the recession."

In his rejection of the pipeline, Obama blamed Republicans for forcing him to meet what the While House deemed an arbitrary deadline. This despite the fact that the State Department has had the application for Keystone since 2008, held 20 meetings on the subject, and produced a gargantuan 1,000 page Environmental Study to assess the possible consequences of the pipeline, which would bring oil from the tar sands of Alberta, Canada, to the Gulf Coast of the United States. As Rep. Joe Barton of Texas ruefully noted, the U.S. "fought and won World War II" in a shorter amount of time.

Besides causing a fissure between the President and some of his key union allies, the Keystone issue has also ruptured the once-strong Green/Labor alliance between environmental and union organizations, and has even pitted union against union. LUINA announced on January 20 that it left the so called "BlueGreen Alliance," citing "Job-killing attacks on the Keystone XL pipeline by some of the alliance’s labor and environmentalist members."

The Alliance describes itself as "a national, strategic partnership between labor unions and environmental organizations dedicated to expanding the number and quality of jobs in the green economy."

While LIUNA has left the Alliance, many unions remain committed to the partnership between the Democratic Party’s two most powerful special interests and staunchly oppose the pipeline. O’Sullivan has called this emerging divide "as deep and wide as the Grand Canyon."

To these unions, the LIUNA President said he was "repulsed by some of our supposed brothers and sisters lining up with job killers like the Sierra Club and the Natural Resources Defense Council to destroy the lives of working men and women."

Put "green" and "government" in the same sentence and the story is usually about funding fights in our nation’s capital. In this case, Washington, D.C. has been recognized as having the most LEED-certified green buildings per capita. More than 100 are used by the federal government. Colorado is the top state. Governing reports: 

The District of Columbia and Colorado have the most LEED-certified commercial and institutional green buildings per capita in the United States, according to a report released Thursday by the U.S. Green Building Council (USGBC).

D.C. easily led the nation with 31.5-square-feet of LEED-certified space per capita as of 2011, according to the report. The council highlighted the renovation of the U.S. Treasury Building, which became the oldest LEED-certified building in the country, as an example of the city’s work toward becoming a more sustainable community. More than 100 D.C. buildings used by the federal government are LEED-certified, according to a complete list of LEED projects in the United States provided by the USGBC, along with dozens of local government, private and non-profit buildings.

The city’s green-building efforts began in 2006, when the city council passed a bill requiring that all publicly-owned commercial projects be LEED-certified, according to a USGBC database of policies in all 50 states. D.C. also initiated an incentive program in 2009 for private and residential buildings to pursue LEED certification.

"This is a great accomplishment for the D.C. metropolitan region and a testament to the drive, commitment and leadership of all those who live, work and play in our community," Mike Babcock, board chair of the National Capital Region Chapter of USGBC, said in a statement. "We also realize there is still more to do and hope to effectively guide the effort by engaging, educating and encouraging the dialogue around the value of sustainability."

Colorado ranked as the top state with 2.74 square-feet of LEED space per resident. Former Gov. Bill Owens issued an executive order in 2005 requiring that all state buildings be LEED-certified, according to the USGBC. Former Gov. Bill Ritter signed legislation in 2007 that required any project receiving 25 percent or more of its funding from the state to be designed and built to high-performance green-building standards, such as LEED. Numerous municipalities, including Denver, have adopted their own green-building statutes.

Illinois (2.69 sq. ft. per capita), Virginia (2.42), Washington (2.18) and Maryland (2.07) rounded out the top five. Delaware (0.03), West Virginia (0.14) and Mississippi (0.21) sat at the bottom.

"Our local green building chapters from around the country have been instrumental in accelerating the adoption of green building policies and initiatives that drive construction locally," Rick Fedrizzi, president and CEO of the USGBC, said in a statement. "These states should be recognized for working to reinvent their local building landscapes with buildings that enliven and bolster the health of our environment, communities and local economies."

Considering my boss is a proud Ball State alum (actually, both of my bosses are) and he’s editor of BizVoice magazine, it’s no wonder I’ve gotten quite a few Cardinal-oriented story assignments in the last few years. However, the writing has really opened my eyes as to what an innovative institution the state has up in Muncie. While Ball State’s main claims to fame center around telecommunications and technology, their latest endeavor is in the field of on-campus energy production. Here’s text from a release from the school on its new geothermal program, and you can also read about its early stages in the July/August 2009 BizVoice:

In the shadow of two outdated smokestacks and four antiquated coal-fired boilers, Ball State has started the second and final phase of converting the university to a geothermal ground-source heat pump system – the largest project of its kind in the United States.

The conversion, started in 2009 to replace the coal boilers, now provides heating and cooling to nearly half the campus. This phase of the project will be dedicated in March.

When the system is complete, the shift from fossil fuels to a renewable energy source will reduce the university’s carbon footprint by nearly half while saving $2 million a year in operating costs.

Ball State is installing a vertical, closed-loop district system that uses only fresh water. The system uses the Earth’s ability to store heat in the ground and water thermal masses. A geothermal heat pump uses the Earth as either a heat source, when operating in heating mode, or a heat sink, when operating in cooling mode.

Under the direction of Jim Lowe, director of engineering, construction and operations, work has begun on Phase 2, which includes installation of 780 of the remaining 1,800 boreholes in a field on the south area of campus.

Construction will continue throughout 2013-2014 and will include a new District Energy Station South containing two 2,500-ton heat pump chillers and a hot water loop around the south portion of campus. The system will then connect to all buildings on campus – eventually providing heating and cooling to 5.5 million square feet.

"When costs began to escalate for the installation of a new fossil fuel burning boiler, the university began to evaluate other renewable energy options," Lowe says. "This led to the decision to convert the campus to a more efficient geothermal-based heating and cooling system."

The project has caught the attention of universities and communities across the nation. Lowe is sharing information about the university’s new operation with others who want learn how they too can benefit from a geothermal system.

In the last two issues of BizVoice magazine, we’ve touched on the fact that there are no nuclear power facilities operating in the state of Indiana. And that fact is true.

While we’ve stated that a nuclear plant in Michigan (the Donald C. Cook Nuclear Plant just north of Bridgman, Michigan or 25 miles north of the Hoosier border) supplies Northwest Indiana with a small portion of nuclear power, we didn’t tell the whole story. The Indiana Michigan Power facility actually sends 80% of its 2,200 megawatts to Indiana.

That 80% of the 2,200 MW (about a third of the company’s total generation in Indiana) "assists with our coal, hydro and wind facilities in providing power to our roughly 500,000 customers in Northeast Indiana, East Central Indiana and the South Bend/Mishawaka areas in addition to selling to wholesale customers throughout the state."

Thus, the nuclear facts are now in order. And, who knows, nuclear may one day become a bigger part of the energy mix in Indiana and beyond.

Kudos to the Wall Street Journal for this well-timed and well-written reaction to yesterday’s EPA announcement:

At an unusual gala ceremony on the release of a major new Environmental Protection Agency rule yesterday, chief Lisa Jackson called it "historic" and "a great victory." And she’s right: The rule may be the most expensive the agency has ever issued, and it represents the triumph of the Obama Administration’s green agenda over economic growth and job creation. Congratulations.

The so-called utility rule requires power plants to install "maximum achievable control technology" to reduce mercury emissions and other trace gases. But the true goal of the rule’s 1,117 pages is to harm coal-fired power plants and force large parts of the fleet—the U.S. power system workhorse—to shut down in the name of climate change. The EPA figures the rule will cost $9.6 billion, which is a gross, deliberate underestimate.

In return Ms. Jackson says the public will get billions of dollars of health benefits like less asthma if not a cure for cancer. Those credulous enough to believe her should understand that the total benefits of mercury reduction amount to all of $6 million. That’s total present value, not benefits per year—oh, and that’s an -illion with an "m," which is not normally how things work out in President Obama’s Washington.

The rest of the purported benefits—to be precise, 99.99%—come by double-counting pollution reductions like soot that the EPA regulates through separate programs and therefore most will happen anyway. Using such "co-benefits" is an abuse of the cost-benefit process and shows that Cass Sunstein’s team at the White House regulatory office—many of whom opposed the rule—got steamrolled.

As baseload coal power is retired or idled, the reliability of the electrical grid will be compromised, as every neutral analyst expects. Some utilities like Calpine Corp. and PSEG have claimed in these pages that the reliability concerns are overblown, but the Alfred E. Newman crowd has a vested interest in profiting from the higher wholesale electricity clearing prices that the EPA wants to cause.

Meanwhile, the Federal Energy Regulatory Commission, which is charged with protecting reliability, abnegated its statutory responsibilities as the rule was being written.

One FERC economist wrote in a March email that "I don’t think there is any value in continuing to engage EPA on the issues. EPA has indicated that these are their assumptions and have made it clear that are not changed [sic] anything on reliability . . . [EPA] does not directly answer anything associated with local reliability." The EPA repeatedly told Congress that it had "very frequent substantive contact and consultation with FERC."

The EPA also took the extraordinary step of issuing a pre-emptive "enforcement memorandum," which is typically issued only after the EPA determines its rules are being broken. The memo tells utilities that they must admit to violating clean air laws if they can’t retrofit their plants within the EPA’s timeframe at any cost or if shutting down a plant will lead to regional blackouts. Such legal admissions force companies into a de facto EPA receivership and expose them to lawsuits and other liabilities.

The economic harm here is vast, and the utility rule saga—from the EPA’s reckless endangerment to the White House’s failure to temper Ms. Jackson—has been a disgrace. 

Creating more jobs for Hoosiers by making Indiana the 23rd right-to-work state heads the list of the top 2012 legislative priorities for the Indiana Chamber of Commerce.  Eliminating the state’s inheritance tax, protecting the education reforms of last session and implementing a statewide smoking ban are also among the group’s key goals.

"Far too often, Indiana is not in the running for business growth and expansion plans, as site selection experts across the country repeatedly emphasize that companies won’t even consider non-right-to-work states for these opportunities. And, with these opportunities come thousands of jobs – none of which are currently coming to our state," offers Indiana Chamber President Kevin Brinegar.

He expects the right-to-work debate to be intense at the Statehouse, but says that should not be viewed as a deterrent to pursuing the policy – or used as an excuse to stay on the sidelines.

"The stakes are too high. With over a quarter million Hoosiers unemployed, ways to generate more jobs should be welcome and top of mind for everyone. We need to do everything possible to lower our state’s unemployment rate and improve our economic competitiveness," Brinegar stresses.

"Right-to-work is the most impactful way to tackle those two needs, plus it offers workers more freedom. Right-to-work protects employees from being forced to join a union and pay dues. It does not prohibit labor unions or collective bargaining; it lets employees decide."

The 10 pre-session objectives fall into seven public policy areas: economic development, education, energy, health care, labor relations, local government and taxation.

Below are the Indiana Chamber’s top legislative priorities. The complete list is also available here.

ECONOMIC DEVELOPMENT
- Support the state adopting a right-to-work statute banning the practice of requiring union membership or financial support as a condition of employment.  Would remove a significant impediment to investment and job creation. Would help Indiana continue to distinguish itself from neighboring states and to build a national leadership position in economic development.

EDUCATION
- Support protecting the 2011 reforms involving charter school expansion, school choice, merit pay for teachers and teacher collective bargaining. These new laws are the most significant enhancements to the state’s education system in more than 20 years; they put the focus where it should be – on students and increasing their potential for academic achievement. We need to make sure these reforms stay intact and are executed as intended.

- Support expanding school accountability. Our system, while improving greatly under current state leadership, still offers far too many loopholes for perpetual failure.

ENERGY
- Oppose renewable energy mandates. Indiana already has significant renewable energy development without benefit of a mandate, which would present unreasonable costs to power consumers and utilities.

HEALTH CARE
- Support ban on smoking in the workplace. Smoking is detrimental to employee health and productivity, and contributes to higher premiums for businesses providing employee health benefits.

- Oppose any health care mandates or assignment of benefits (AOB) policy. Mandates and AOB both serve to increase the cost of health care premiums for employers and their employees.

LABOR RELATIONS
- Support work share component incorporated into state’s unemployment insurance system. Would allow employees to collect reduced wages and partial unemployment benefits – as opposed to losing their jobs; is a temporary and practical alternative to layoffs.

LOCAL GOVERNMENT        
- Support common sense simplification and reforms to local government structures and practices. Current local government system lacks high standards against nepotism and allows for too many conflicts of interest. This, coupled with the streamlining of duties and functions as appropriate in county and township government, will result in a more effective system and better use of taxpayer dollars.

TAXATION
- Support elimination of the state inheritance tax. Only 1% of the state’s revenue pool comes from this tax, but the consequences are much higher. Why? This tax serves as a big deterrent for high income individuals to remain in Indiana (and spend money), or keep their assets here. It’s more beneficial for the state and its residents to remove the tax.

- Support exempting the taxation of machinery and equipment. Indiana needs to be on a level playing field with surrounding states – some of which have already made this move or are considering it now. Exempting machinery and equipment from property tax would be another strategic step in our economic development efforts.
 

We’ve told you more than a few times in recent months that the proposed Keystone XL pipeline is an important project for Indiana and our country. Check out this two-minute video. After all, the $7 billion project will bring 700,000 barrels of oil a day from Canada to the U.S.

When the Obama administration recently delayed a final ruling (citing the need to reroute in Nebraska, but realistically putting off a politically tricky decision until after the 2012 election), many considered it a death knell for the proposal. But a group of energy and environmental insiders put together by the National Journal team in Washington differs with that assumption. Check out the latest.

“As long as there is substantial money to be made from developing the tar sands, they will be developed,” one Insider said.

Insiders predict (64% to 36%) that the economic and political reasons for the pipeline will eventually win out, arguing that the oil industry may hold out hope for a future Republican administration and GOP majorities in both chambers of Congress—under which the project would likely win swift approval.

Canadian pipeline developer TransCanada said that it will move the route out of Nebraska’s environmentally sensitive Sandhills area. The State Department last week proposed the rerouting to protect a massive aquifer there. Company officials, who had claimed that such a reroute wasn’t possible, said that the move will likely require adding 30 to 40 more miles of pipe to its 1,700-mile proposal.

President Obama was accused last week for making a political play with the pipeline, because the reroute would delay the decision past the 2012 election. For that same reason, though, most Energy Insiders believe the project will ultimately be approved. “Eventually, politics will be set aside,” said one.

In terms of politics, Insiders were split on whether the reroute decision and the consequent delay would benefit Obama. Just over half – 51 percent – said that the delay would help the president; 49 percent said it would not.

The delay until after the 2012 election “is a significant indicator of just how bad the Obama insiders think their election prospects are right now,“ one Insider said. In appeasing environmentalists but sacrificing some independent votes, the administration wanted to ensure it held onto its political base and contributions, Insiders said.