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Obama’s Rough Week in Court

June 23, 2016 by AEA Leave a Comment

This week has been a bad week for President Obama’s policies in the courts. The Supreme Court handed a defeat to President Obama over his immigration plan and a district court struck down his administration’s unlawful attempt for the Bureau of Land Management to regulate hydraulic fracturing.

The court’s hydraulic fracturing opinion was straightforward and simple. The court explained to the Obama administration that they cannot do anything they want, but only what they have been delegated to do by the legislative branch. Here is the conclusion to the court’s order:

As this Court has previously noted, our system of government operates based upon the principle of limited and enumerated powers assigned to the three branches of government. In its simplest form, the legislative branch enacts laws, the executive branch enforces those laws, and the judicial branch ensures that the laws passed and enforced are Constitutional. See Marbury v. Madison, 5 U.S. 137, 176 (1803). A federal agency is a creature of statute and derives its existence, authority and powers from Congress alone. It has no constitutional or common law existence or authority outside that expressly conveyed to it by Congress. See Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 208 (1988); see also Michigan v. EPA, 268 F.3d 1075, 1081-82 (D.C. Cir. 2001). In the absence of a statute conferring authority, then, an administrative agency has none. See American Petroleum Inst. v. EPA, 52 F.3d 1113, 1119-20 (D.C. Cir. 1995). This Court “must be guided to a degree by common sense as to the manner in which Congress would likely delegate a policy decision of such economic and political magnitude to an administrative agency.” Brown & Williamson, 529 U.S. at 133. Given Congress’ enactment of the EP Act of 2005, to nonetheless conclude that Congress implicitly delegated BLM authority to regulate hydraulic fracturing lacks common sense. Congress’ inability or unwillingness to pass a law desired by the executive branch does not default authority to the executive branch to act independently, regardless of whether hydraulic fracturing is good or bad for the environment or the Citizens of the United States. “[The Supreme] Court consistently has given voice to, and has reaffirmed, the central judgment of the Framers of the Constitution that, within our political scheme, the separation of governmental powers into three coordinate Branches is essential to the preservation of liberty.” Mistretta v. United States, 488 U.S. 361, 380 (1989).

Congress has not delegated to the Department of Interior the authority to regulate hydraulic fracturing. The BLM’s effort to do so through the Fracking Rule is in excess of its statutory authority and contrary to law. As this finding is dispositive as to each of the Petitions for Review, the Court need not address the other points raised in support of setting aside the Fracking Rule. THEREFORE, the Court holds the Fracking Rule is unlawful, and it is

ORDERED that the BLM’s final rule related to hydraulic fracturing on federal and Indian lands, 80 Fed. Reg. 16,128 (Mar. 26, 2015), is hereby SET ASIDE.

Filed Under: Energy Development Tagged With: Bureau of Land Management, hydraulic fracturing, Interior Department, President Obama

Appropriations Bills Signal Step Forward

June 16, 2016 by AEA Leave a Comment

As the FY 2017 appropriations season rolls along, both Chambers have begun consideration of their respective Interior, Environment, and Related Agencies bills. These bills cover a range of agencies and funds, including the Department of Interior (and its various bureaus), the Environmental Protection Agency, the Land and Water Conservation Fund, and the Fish and Wildlife Service. Many of these agencies are responsible for regulations that govern various aspects of energy, natural resource development, and environmental policy that has a profound impact on an array of industries and American businesses. Thus, this appropriations bill holds significant import and carries the opportunity for pro-energy, pro-growth policies. The House Interior bill shows promise, reeling in several key regulations while also reducing overall funding levels. The Senate version also includes key spending cuts, but lacks policy riders that would cut red tape and block harmful regulations. Ideally, the Senate will address this deficiency at the full Committee level or during floor debate.

This year, the House FY2017 Interior Appropriations comes in at $32.095 billion, roughly $64 million less than FY2016 enacted levels. This includes $12.049 billion for the DOI and $7.976 billion for the EPA, a roughly $33 million increase and a $163 million decrease, respectively, from FY2016 enacted levels. Of note, the bill reduces funding for the Bureau of Land Management by roughly $10 million. The bill also appropriates $322 million for the Land and Water Conservation fund which, while above the traditional $300 million per year allocation, is a $128 million decrease for a program used to annex private and state lands.

Overall, these funding levels are a good step towards greater financial accountability. The levels are consistent with the subcommittee’s commitment towards responsible environmental stewardship all while working to decrease the size of the federal government and roll back unnecessary red tape.

The House version goes a step further by including a number of provisions aimed at cutting burdensome regulations and rules promulgated by various agencies. While some might call these “poison pills,” these riders are fully within Congress’ prerogatives, consistent with Constitutional authority, and sound public policy.

These riders reel in several potentially disastrous regulations by prohibiting funds for: the regulation of greenhouse gases from new and existing sources under the Clean Air Act (collectively known as the so-called “Clean Power Plan”); expanding reach of federal bureaucrats with new definitions of what constitutes “navigable waters” under the Clean Water Act (known as “Waters of the United States”); driving up the cost of natural gas production through new methane emissions regulations; and continuing the use of the inherently-flawed social cost of carbon (SCC) metric. The bill also delays the implementation of the administration’s overzealous ozone regulation (similar to Rep. Olson’s ozone bill) and requires a report to Congress accounting for all federal funding being directed to programs dealing with climate change.

Including these policy provisions in the subcommittee draft indicates that Congress is keen on tackling these major issues and strongly disapproves of agency action in these areas. By exercising its power of the purse, the House Appropriations Committee can send a message that these regulations do more harm than good. This House Interior Appropriations bill, with its funding levels and policy riders, is a welcome change to the usual trend of do nothing appropriations legislation, and should be approved.

The Senate is also working on it’s own Interior Appropriations legislation. Their bill, as drafted by the Subcommittee, similarly complies with the 302(b) allocation levels and appropriates $32.034 billion, about $125 million less than FY2016 enacted levels. Funding for DOI checks in at $12.16 billion, roughly $144 million above FY2016 enacted levels. EPA funding sits at $8.1 billion, over $31 million below FY2016 enacted levels. The bill does include an increase for the BLM, about $6 million above FY2016 enacted levels to $1.24 billion.

While the Senate bill does cut overall funding and does make strides in instituting a more responsible fiscal track, the bill does not contain as strong policy riders as the House draft does. The bill blocks funds for implementing WOTUS, but fails to include many of the other significant House riders.

The Senate does operate under different processes than the House and Senators traditionally withhold many policy riders until full committee or floor consideration. However, inclusion of riders blocking funds for the “Clean Power Plan,” methane rule, and SCC in the base bill would have been a positive step for the upper chamber.

While much work remains, the proposed Interior Appropriations bills include important spending cuts and at least begin the process towards a more accountable and manageable federal government. Ideally, Congress will continue to debate these bills and work to implement policies that return power over America’s natural resources and energy policy back to states and individuals. After all, communities, not bureaucrats, best know how to meet their energy and environmental needs. Congress should use Interior Appropriations legislation as an opportunity to revert back to federalist principles and rein in the power of some of these bloated federal agencies.

Filed Under: Congress Tagged With: Appropriations, WOTUS

Paris Climate Deal: Forget the Media Hype, Only 0.04% of the World’s GHG Emissions Are On Board

June 15, 2016 by Daniel Simmons Leave a Comment

On April 11^th, Chris Mooney and Juliet Eilperin of the Washington Post wrote that the Paris Climate agreement could enter into effect earlier than many think. But now, more than two months after their article, only 17 countries which represent only 0.04 percent of global greenhouse gas (GHG) emissions have officially ratified the Paris agreement.

In the PR campaign for the run-up to the signing ceremony for the Paris agreement, it sounded like more countries would quickly move to ratify the agreement. Mooney and Eilperin wrote:

In late March, when the United States and China jointly declared that they’d be moving to immediately sign and then join the Paris climate agreement “as early as possible this year,” it was seen as the latest show of joint leadership by the two largest emitters.

…

White House senior adviser Brian Deese made a point of saying, on a March 31 press call, that the fact that China had indicated it wanted to join the accord “as soon as possible this year” was “significant.”

Based on the administration’s comments and the Post’s reporting, it sounded like the United States would quickly “ratify” the agreement (according to the U.N., to formally join the “agreement” countries need to “deposit their instrument of ratification.”) The article in the Post was more than two months ago and neither the U.S. nor China has ratified the agreement.

It is a little strange that the Obama administration has not deposited their instrument of ratification given that they are clamoring for the agreement to quickly enter into effect before they leave town. This is especially true because, unlike countries like Norway, France, and Fiji the Obama administration does not intend to have the people’s elected representatives vote on acceptance of the Paris climate agreement. They prefer executive fiat, without a whit of pesky representative government involved.

Just last week there seemed to be conflicting statements from the White House and India about India’s ratification of the agreement. According to the Washington Post, “The leaders of India and the United States vowed Tuesday to ratify the Paris climate accord this year…” The Indian media contradicted this claim. According to NDTV, “White House officials indicated that it is their understanding that India completes [the] process during this year, before President Barack Obama’s term expires in November. But top government officials have told NDTV that India is ‘unlikely to sign the agreement this year, or even the next.’”

The European Union has been very pro-Paris agreement, however, the EU is nowhere near ratifying the agreement. As E&E Publishing explained:

The union can’t ratify an agreement without giving all 28 member parliaments time to do their work. “Although the E.U. negotiates in the [Conference of the Parties] as a single entity, the ratification process requires actions in individual countries and their parliaments,” said Robert Stavins, director of the Harvard Project on Climate Agreements. “And Europe is heterogeneous.”

…

But for logistical reasons internal to the 28-nation compact, it is expected to do so in 2017 or 2018 — likely after other countries cause it to take effect.

One complicating factor for the EU is the possibility of the UK exiting the EU. The trend in the polling is that the UK will vote to leave the EU on June 23^rd. If that happens, it will embolden countries like Poland who are pushing back on GHG cuts.

In the last couple days, France has voted to ratify the agreement and Norway has too. However, France’s vote was symbolic because France’s GHG contribution is a part of the EU’s contribution and Norway has not officially deposited their articles of acceptance with the UN.

Conclusion

Despite all the hype, so far, the road to ratification of the Paris Climate agreement has not been super speedy, as only 0.04 percent of the world’s GHG emitters have officially signed up. The Obama administration, because they do not intend to have the Senate vote on it, could quickly accept the agreement, but to date, they have failed to do so. This is far from being a done deal, even though its Big Government supporters would like to convince the public otherwise through disinformation campaigns.

Which begs the question itself—why are some in the media, and governmental supporters – so intent on convincing everyone that this is a done deal that can’t be changed or altered in any way? Could it be that their greatest fear is that a new administration might change directions, and demand more transparency about the process and the science that has gone into this Public Relations gambit? It makes one wonder, doesn’t it?

For reference here is the UN’s official page on the Paris Agreement. And here are ratification trackers from the Potsdam Institute for Climate Impact Research and here is another from Climate Analytics.

Filed Under: Blog, Climate Tagged With: China, climate change, India, Obama, Paris climate deal, Washington Post

Debunking the Claim that Wind and Solar Don’t Get “without much in the way of incentives”

June 14, 2016 by Daniel Simmons Leave a Comment

Recently the Institute for Energy Research explained how Paul Krugman either does not understand climate science and economics or is deliberately misleading his readers. In that piece, Robert Murphy explains that studies encapsulating the consensus science from the Intergovernmental Panel on Climate Change contradict Krugman’s claims. In that piece we wanted to focus on the climate claims, but in doing so we failed to debunk a claim about energy. In that piece, Krugman wrote, “Solar and wind power are getting cheaper each year, and growing quickly even without much in the way of incentives to switch away from fossil fuels.” Like many of Krugman’s claims, this too is ridiculously wrong.

Incentives for Wind

Robert Bryce recently wrote an article explaining that the wind industry gets $176 billion in subsidies. That might not be a lot of “incentives” in Krugman’s mind, but to the rest of America, $176 billion is a lot of incentives.

But Krugman doesn’t need to take our word, or Bryce’s word for the importance of incentives for wind, but he should listen to Warren Buffet. A couple years ago Buffet, whose MidAmerican Energy owns more wind that any other rate-regulated utility in the U.S., explained that the only reason to build wind turbines is for tax credits. As Buffet stated, “For example, on wind energy, we get a tax credit if we build a lot of wind farms. That’s the only reason to build them. They don’t make sense without the tax credit.”

The following chart shows what Buffet is talking about. This chart, from the American Wind Energy Association (AWEA), shows that wind installations fall when the tax credit expires.

Much more about the PTC here.

The wind production tax credit was extended at the end of 2015. The Congressional Budget Office estimated that this extension would cost $14.5 billion. Again, to all Americans except Krugman, this is a lot of money and a lot in the way of incentives.

Incentives for Solar

As for solar, two of the major “incentives” for solar are the investment tax credit and net metering. The investment tax credit provides a 30 percent tax credit for solar installations. Apparently Krugman does not consider the federal government paying 30 percent of the cost of solar to be much of an “incentive,” but if 30 percent for the cost is not a major “incentive”, what is?

Besides the investment tax credit, another critical “incentive” for solar power is net metering. Net metering is where a utility provides a credit for home or business owners with solar panels on their roofs when the solar panels surpass the electricity needs of the home or business owner and provide excess electricity to the grid. The fact that net metering exists isn’t controversial. What is controversial is the rate utilities pay to the owner of the solar panels. When the net metering rate is the same as the retail rate for electricity, this amounts to a large subsidy. Paying solar panel owners the retail rate means they receive much more money for the electricity they producer than the wholesale electricity producers. Here an example from Arizona:

It isn’t at all clear why homeowners who have solar panels on their homes are paid the retail rate. After all the wholesale producers are much more reliable and their production is not dependent on the weather or where the sun is.

Earlier this year, Nevada revamped their net metering system and lowered the rates. As a result, SolarCity and other solar installers left the state. One Arizona utility is trying to reduce the rate they pay net metering customers from around 12.9 cents for kilowatt hour to 2.9 cents per kilowatt hour. According to an analyst from Credit Suisse, this would make rooftop solar “unequivocally uneconomical” in Arizona. The point is that net metering is a huge “incentive” for people to install solar panels on their homes.

Conclusion

When it comes to energy issues, Paul Krugman is at best ignorant of reality. As the data and the history show, wind and solar installations are driven by subsidies and special government favors.

Filed Under: Energy Subsidies Tagged With: debunking, solar, subsidies, wind

Is Ghostbusters Villain Walter Peck the EPA Blueprint?

June 13, 2016 by Travis Fisher 3 Comments

Truly great films have a way of transcending time and place, and certain characters and scenes have a way of popping up in our memories years after we see them. One such character is the warrant-wielding EPA lawyer Walter Peck from the 1984 film Ghostbusters, a character so despised that the actor playing him was allegedly harassed in public on more than one occasion.

Indeed, Peck shined with such a brilliant, bothersome presence that each new run-in I have with a pointy-headed bureaucrat reminds me of his face–a face most viewers would agree is one of the most punchable in movie history. Now, 32 years since the film’s release and amid media buzz about the Ghostbusters reboot, EPA officials are looking and sounding more and more like Peck every day.

Take for example the critical scene when Peck marches into the Ghostbusters’ headquarters and demands they shut down the high voltage containment grid holding all the ghosts they’ve captured.

This exchange between the EPA lawyer, “grid” experts, and the electric utility worker is eerily reminiscent of today’s disagreements over EPA’s power plant regulations. Peck clearly has no expertise in the machinery he’s trying to shut down, and he has no time to listen to the machine’s operators or the utility worker. To the electrician from ConEdison, he quips, “I’m not interested in your opinion, just shut it off.”

The real-world EPA and its supporters strike the same tone when it comes to EPA’s plan to re-work the high voltage power grid–experts warn of danger ahead while EPA charges on with the “shut it off” approach. For example, EPA administrator Gina McCarthy has shrugged off reliability assessments that highlight potential problems with shutting down dozens of gigawatts of reliable generation capacity.

However, something important from this classic scene is missing from today’s scenario. In Ghostbusters, Peck has all the warrants he needs–he comes prepared with a “cease and desist all commerce order, seizure of premises and chattels, ban on use of public utilities for unauthorized waste handlers, and a federal entry and inspection order.” In other words, the court is on his side. McCarthy’s EPA, in contrast, has been snubbed twice by the Supreme Court in its efforts to shut down vast amounts of electricity production, mostly from coal-fired power plants.

First, the late Justice Scalia wrote a scathing opinion that found EPA unreasonably ignored cost in devising its “Mercury and Air Toxics Standard,” a rule that has already shuttered dozens of gigawatts of reliable coal-fired power plants and increased the risk of problems with grid reliability. Second, the Supreme Court issued a stay on EPA’s signature carbon rule, the so-called “Clean Power Plan.” And the two are related–the court likely issued the stay in order to avoid a repeat of its correct but too-late-to-matter opinion on the mercury rule.

McCarthy is eager to do her best impression of Peck and push forward with her “shut it off” carbon rule, with or without legal footing or consensus from experts. In fact, now she is asking states to implement the rule as if the Supreme Court had never issued the stay. (It’s worth noting that she never took legal challenges seriously in the first place.)

With each new round of regulations from EPA, I can’t help but wonder if the motto over there is “What Would Walter Peck Do?”

Filed Under: Blog Tagged With: clean power plan, coal, EPA, Ghostbusters, MATS rule, power grid, Walter Peck

AEA Applauds Passage of Anti-Carbon Tax Resolution

June 10, 2016 by AEA Leave a Comment

American Energy Alliance President Thomas Pyle issued the following statement on the passage of Majority Whip Steve Scalise’s anti-carbon tax resolution:

“We applaud Majority Whip Scalise, the House Leadership, and all those who voted in favor of this resolution for taking a stand against a national energy tax that would drive up energy costs for American families.

“We send our elected officials to Washington with the expectation that they will support policies that strengthen our economy and allow every American an equal opportunity to succeed. A national energy tax fails on both counts.

“A national energy tax will not only raise the cost of electricity and gasoline, but also the cost for goods and services across the board. These higher costs would have a disproportionate impact on the poor and middle class—hurting most those who can least afford it. On top of this, a carbon tax would have virtually no impact on global temperatures.

“The concept of a carbon tax swap—for a carbon tax to replace either carbon regulations or offset income taxes—is pure fantasy. The idea that the environmental left would bargain for some sort of swap and willingly dismantle every regulation focused on reducing CO2 emissions is not rooted in reality. They would never cede that control or take the task seriously.

“Fortunately, there is overwhelming support in the House for Mr. Scalise’s resolution. We’re encouraged by today’s vote and we urge lawmakers to continue to fight back against any and all carbon tax proposals.”

Filed Under: Press Releases

House Resolutions Push Back Against Energy Taxes

June 8, 2016 by AEA Leave a Comment

This week, the House will take up two resolutions pushing back on policies slated to increase the price of energy. H.Con.Res. 89, introduced by Rep. Scalise, expresses the sense of Congress that a federal carbon tax would be detrimental to the economy. H.Con.Res 112, sponsored by Rep. Boustany, similarly disapproves of the Obama administration’s plan to levy a $10.25 per barrel tax on oil.

Both resolutions mark an important opportunity for Congress to take a stand for affordable and reliable energy. It is key that Representatives vote yea on both H.Con.Res. 89 and H.Con.Res. 112. It is not enough to vote for one or the other. Both resolutions deserve support from those who believe in the importance of affordable, reliable energy.

Over the last eight years, the Obama administration has worked to implement a policy agenda squarely aimed at suppressing the domestic production of oil, natural gas, and coal, in favor of more expensive and less reliable energy sources. This “keep it in the ground” campaign advocates for economically damaging policies that ignore the significant and very real costs of cutting off access to our most abundant and affordable energy resources. Fortunately, Congress has met this campaign with opposition, as evidenced by the defeat of cap-and-trade legislation in 2009 and the lifting of the oil export ban in the 2015 omnibus spending package.

However, regulatory threats to accessible and abundant energy continue to mount. Carbon tax advocates continue to try to drive up energy prices for American families. So far in this session of Congress, at least four bills have been introduced that include some form of pricing carbon dioxide emissions. However, carbon tax proposals continue to fail to gain significant Congressional support, at least in part due to the high costs associated with such a policy. Sixty-six percent of American electricity is generated by natural gas and coal. A carbon tax will jack up electricity rate by requiring utilities to pay for the emissions associated with power production. These costs will be passed onto consumers in the form of higher power bills. Further cost increases will come at the pump, as gasoline and diesel prices will go up. In 2013 the Congressional Budget Office determined that a carbon tax “would have a negative effect on the economy” by damaging purchasing power, reducing employment and overall economic output.

A carbon tax is also a naturally regressive tax, meaning the hardest hit would be low income families. According to census data, families making less than $10 thousand per year spend nearly 70 percent of their after-tax income on energy, while those between $10 thousand and $30 thousand per year spend over 20 percent on energy. Conversely, those making over $50 thousand per year only spend 8 percent of their after-tax income on energy. A carbon tax disproportionately hurts those who can least afford it.

Even if implemented, a carbon tax would do essentially nothing to accomplish its stated goal of combating a global temperature rise. A study by the Cato Institute found that even if the U.S. were to reduce all carbon emissions linearly by 2050, the average global temperature would be reduced by a mere 0.1 degree Celsius by 2100.

Closely related to a carbon tax is the Obama administration’s idea of placing a $10 per barrel tax on oil. While many of the logistics of the plan remain vague, such as where in the production chain the tax is levied, revenues of this tax are meant to be spent on energy subsidies for wind, solar, and other expensive sources. Aside from being a pure wealth transfer, this policy would significantly strain on domestic oil producers, put the American economy at a severe disadvantage, and hurt American families, all to line the pockets of renewable energy investors and developers who already receive significant federal funding. The tax is slated to raise the price of gasoline by $0.24, as well as impact other petroleum products and goods and services reliant on transportation fuels (read: almost everything). The Congressional Research Service determined this tax “would likely result in decreased discretionary consumer purchasing power which may translate into lower expected economic growth.” While the proposal itself is a nonstarter for Congress, the fact that it has been floated is concerning and dangerous. This policy will not be implemented by the end of President Obama’s tenure, but could easily be revived in subsequent administrations.

The mere prospect of these policies being put in place necessitates a strong rebuttal from Congress. Fortunately, Rep. Scalise and Rep. Boustany have taken the lead on fighting back against policies that drive up energy costs. These sense of Congress resolutions provide a key marker for Representatives to vocally oppose such taxes. This is an exercise in accountability, and Representatives who value affordable and reliable energy should be encouraged by those opportunity to put their name behind these resolutions.

It is imperative that Representatives not bifurcate their vote on these two resolutions. Simply put, it is not enough to vote on either the Scalise or Boustany resolution and not the other. Both resolutions deserve a strong showing and are intrinsically linked. There is absolutely no reason to vote yes on one and not the other. Splitting votes between these two resolutions is a disservice to the American people, who deserve to know where their elected Representatives stand on these important issues.

By opposing any new energy taxes, lawmakers can send a clear message to their constituents that they’re against burdensome and damaging policies designed to increase the cost of energy. We applaud Rep. Scalise and Rep. Boustany for spearheading these initiatives and strongly encourage all Members of Congress vote yes on H.Con.Res. 89 and H.Con.Res. 112.

Filed Under: Carbon Tax

Why Congress should reject new energy taxes

June 6, 2016 by AEA Leave a Comment

This letter originally appeared in The Hill’s Congress Blog.

As early as this week, Members of the House of Representatives will face a very simple choice: support a tax that will make everyday life harder for their constituents, or take a stand for the American people and reject any new energy taxes.

That’s the choice offered by a resolution from Majority Whip Steve Scalise, which opposes any carbon tax proposals and expresses the sense of Congress that a carbon tax would be detrimental to the United States economy.

There should be no doubt a carbon tax would be devastating for American families and businesses.

A carbon tax is essentially a tax on the use of natural gas, oil, and coal, which make up over 80 percent of the energy we use here in America. These energy sources power our homes and factories, keep our cars and public transportation moving, and provide Americans with countless products that make modern life possible. But a carbon tax would make using these resources much more expensive.

First, a carbon tax would saddle Americans with higher utility bills and higher gasoline prices at the pump. While this will hurt all Americans, it will have the harshest impact on the poor and those on fixed incomes. That’s because the poor spend a higher percentage of their income on energy costs.

A study by the Heritage Foundation shows that a $25 per ton carbon tax would cost the average American family of four $1,400 dollars per year through the year 2035. For families saving for retirement, their children’s college funds, or even just trying to make ends meet, $1,400 per year would make a huge difference.

But the consequences of a carbon tax aren’t just limited to rising energy costs. Energy is an integral part to every aspect of our lives, so when the price of energy goes up, the ramifications are felt everywhere.

For example, when a manufacturer has to pay more for the electricity to keep their factories up and running, that means they’re forced into either laying off employees or increasing the cost of their product, or both. And while natural gas, oil, and coal are typically only thought of as energy sources, they’re also key components to many of the products we use every day. Whether it’s petroleum-based plastics used to make life-saving devices for hospitals, or coal used for steel to build our nation’s infrastructure, these resources are essential to modern life.

The standard retort from carbon tax advocates is that the costs of such a tax are necessary to combat the threat of global warming. But even if we take them at their word on the issue of global warming, nearly every carbon tax proposal out there would have virtually no impact on global temperatures.

Don’t just take my word for it. According to the Environmental Protection Agency’s (EPA) models, even if the U.S. were to stop emitting carbon dioxide altogether by the year 2050, it would reduce global temperature rise by just 0.1 degrees Celsius by the year 2100.

In fact, as a recent article in The Wall Street Journal shows, it would take a carbon tax of $425 per ton of carbon dioxide to achieve the Obama administration’s previously stated goal of cutting carbon dioxide emissions by 80 percent by the year 2050. That would amount to a $3.75 per gallon tax on gasoline alone!

Lawmakers should be skeptical of any calls for a so-called “moderate” carbon tax, as it is undoubtedly a stepping-stone for carbon tax advocates to call for a much higher and more painful carbon tax.

The debate over a carbon tax is not a nuanced one. It’s clear that a tax on our most abundant, affordable, and reliable energy sources would be a bad deal for the American people. It would raise the cost of energy and everyday products—hitting hardest those who can least afford it. And for all the economic pain, a carbon tax would do nothing to impact global temperatures.

When lawmakers head to the floor to vote on the Scalise resolution they will face a simple choice. They can vote against the resolution, leaving the American people more susceptible to higher energy costs, or they can vote in favor of it and protect their constituents from the devastating impacts of a carbon tax. The choice is theirs.

Filed Under: Blog, Carbon Tax Tagged With: carbon tax, congress, energy taxes, Scalise, The Hill

Wind Lobby’s Incoming Chairman Spins the Facts

June 2, 2016 by AEA 1 Comment

A recent Utility Dive article examines how the wind industry might cope without the wind Production Tax Credit (PTC), which is designated to expire in five years. The wind PTC is a subsidy that pays wind producers a significant sum just for producing wind energy. The Institute for Energy Research (IER) has outlined the ill effects of this subsidy here.

In the Utility Dive Article, incoming American Wind Energy Association (AWEA) board chair and current president of Vestas Americas, Chris Brown, made a couple of mind-boggling statements about the state of energy in America. For example, Brown said the industry must find a way “to keep politics out of the way of business and consumers.”

We at the American Energy Alliance agree with this sentiment. Less political meddling in the energy business means more affordable energy for the American people. However, while Brown feigns concern over the role of politics, the actions of his company tell a different story. Since Brown joined Vestas in late 2012 through the first quarter of this year, Vestas has spent $990,000 lobbying Congress on the PTC and a handful of other issues designed to subsidize the wind industry. As the second largest wind developer in the country (the company makes up about 1/5 of the market), Vestas and its leadership have benefitted greatly from the lavish PTC and other handouts from the government.

Later in the article, Brown gives us another laughable quote when he says, “natural gas is a heavily subsidized transitional fuel, not a solution.”

The claim that natural gas is heavily subsidized, especially when compared to wind energy, is absurd to put it lightly. As we’ve explained before, data from the Energy Information Administration (EIA) show that wind energy, along with solar power, are by far the most subsidized sources of energy.

According to EIA, wind subsidies totaled $5.9 billion in FY2013 alone. That’s nearly twice as much as coal, natural gas, and nuclear combined.

In a previous post, AEA showed that the gap widens even further when you look at subsidies per unit of electrical energy produced. In FY2013, federal electric subsidies for wind energy clocked in at $35.33 per megawatt hour, compared to $0.67 for natural gas and oil.

Finally, from 1950 to 2010, wind and solar power have received 115 times more subsidies per million British Thermal Units (MMBTU) of energy produced than natural gas.

It’s clear that wind, not natural gas, is a heavily subsidized fuel. And if we truly want to get politics out of the way of consumers and businesses, as Brown says he wants to do, we should get rid of all subsidies and allow energy sources to compete in the marketplace rather than in the halls of Congress.

Another wrinkle in Brown’s argument against natural gas is that wind energy is heavily dependent on natural gas. Other than being an extremely expensive source of electricity, wind energy is also intermittent. On average, wind energy operates at just 1/3 of its capacity and even then, wind often generates electricity when we need it least, as IER explains here. As a result, there must always be another source ready to ramp up its generation when the wind isn’t blowing (or ramp down when wind output is high). That source is typically a natural gas plant, which can ramp up and down much easier than baseload pants like nuclear or coal. In other words, if natural gas is just a transition fuel to get us to the wind-powered grid of the future, what will keep the lights on when the wind stops blowing?

Conclusion

It has become common practice for the wind industry to complain that they receive far less federal handouts than other energy sources, such as natural gas. However, the reality is much different. Through well-financed lobbying and political efforts, the wind industry has managed bilk the American taxpayer for tens of billions of dollars in subsidies over the past two decades. It’s disingenuous for Mr. Brown to claim otherwise or to pretend he’s above politicizing the power grid. AWEA’s very mission is to ensure the wind industry gets as much federal welfare as possible.

Filed Under: Blog, Wind Tagged With: AWEA, natural gas, Utility Dive, Vestas, wind energy, wind production tax credit

States Should Reject NACAA’s Calls to Implement Carbon Regulation

June 1, 2016 by AEA Leave a Comment

Today, the National Association of Clean Air Agencies (NACAA) held a press call to discuss a new document that attempts to pressure and mislead states into implementing the EPA’s carbon regulation, or “clean power plan.” AEA President Thomas Pyle issued the following statement on NACAA’s efforts:

“The NACAA, which has received millions of dollars in grants from the EPA, is clearly acting as a proxy for the agency. Following the Supreme Court’s stay, the EPA is barred from enforcing the regulation, yet groups like NACAA are attempting to mislead states into implementing it anyway.

“State leaders have an obligation to protect their citizens from the EPA’s carbon regulation—a rule that would significantly raise electricity rates and disproportionately hurt low-income families. Moving forward with implementing the regulation is a waste of states’ time and resources, as the rule could eventually be thrown out, or at the very least be significantly changed. State leaders should reject any calls by the EPA, or its surrogates, to continue working on this legally dubious regulation.”

Click here to read ten reasons why states should stop work on EPA’s carbon regulation.

Filed Under: Carbon Tax, EPA Power Plan, Press Releases Tagged With: carbon, clean air, NACAA, Regulation