Louisiana’s thriving energy economy is a testament to the state and federal regulatory environments that allow it to flourish, because both balance growth with ensuring that the highest safety and environmental standards are followed to the letter of the law.
This balance affords us both residential and industrial electricity rates that are significantly lower than national averages. Yet that is not enough for the European Union, which sought to impose statutes, signed an ocean away, on American businesses — including those in Louisiana. President Trump was right to sink these efforts.
It bears remembering that most of the restrictive energy policies that have been attempted in states like California and New York were inspired by European nations like Germany and the U.K, who learned the hard way by seeing their energy prices triple and their industries fall into decline as a result.
We know better in Louisiana because energy is more than just part of our economy — it’s a defining industry for our state. The United States led the world in natural gas exports last year, with Louisianans handling over 60% of it. We boast the third-highest production rate for marketed natural gas among the states, accounting for approximately 5% of the country’s total natural gas reserves. The energy industry employs thousands of families across the state while maintaining the highest environmental and labor standards.
This is why it’s imperative that Louisianans take note of the European Union adopting its Corporate Sustainability Due Diligence Directive. These standards would present no concern if they were only seeking to regulate inside Europe; the issue is that the Directive is an unwelcome export of those rules to the rest of the world.
Under its language, any company with an annual revenue from the European Union market exceeding 450 million euros, or about $486 million, is affected. This includes affiliates, with no connection to the European Union whatsoever, that fall under the Directive’s rules if their parent company operates in an European Union market. This overreach imposes new red tape and exposes American businesses that employ thousands of Louisianans to additional liabilities dictated by Brussels.
If this sounds familiar, the United Nations recently garnered headlines because of its International Maritime Organization’s plan to pass a “net-zero framework” that would levy a de facto carbon tax of up to $12 billion annually. This too would fall on one of our great Louisiana industries — shipping — and on everyday Louisianans because it would raise the cost of all goods moving by ships, which The Wall Street Journal called “the ultimate in taxation without representation.”
We should recognize the International Maritime Organization plan and the European Union directive for what they truly are: an attempt by other governments to force their broad restrictions on labor and environmental governance on more competitive, more sustainable American companies. If they are to succeed, we could see American growth throttled to the same degree as the Europeans, which is something we cannot risk in today’s hypercompetitive global climate, particularly in energy markets.
The stakes for Louisiana couldn’t be higher, especially with the Corporate Sustainability Due Diligence Directive. As one of America’s top exporters of liquefied natural gas and a provider of critical supply to Europe — which is reducing its own reliance on Russian gas — facing European mandates such as carbon neutrality and mandated “climate transition plans” risks undermining our role as a global energy leader. The consequences of this would reverberate throughout the energy economy and every sector connected to it in our state, putting jobs at risk.
We can’t afford to wait and see what the impact of these regulations will be. Just look at the difference in gross domestic product growth between the European Union and the U.S. over the last two decades or so. In that time, our economy grew nearly 90%. As for the European Union, it managed only 13.5% growth. As two international economic superpowers, that stark difference in growth can be primarily explained by the European Union’s onerous regulations.
While President Trump was right to punt these rules for a year at the International Maritime Organization, there’s a way to fix this once and for all, and legislation already stands on the House and Senate to block the European Union from this extraterritorial regulation. Knowing the stakes, I urge Louisiana’s House and Senate leaders to defend the freedom of America’s businesses from European regulations. Our families, workers and energy producers shouldn’t have their futures decided by foreign bureaucrats who have no business telling Louisiana how to work.
