News - American Energy Alliance

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

Free-Market Coalition Supports Anti-Carbon Tax Resolution

May 24, 2016 by AEA Leave a Comment

Today a 25-member coalition of free-market groups led by the American Energy Alliance sent a letter to Senator Roy Blunt in support of his resolution opposing a carbon tax. Below is an excerpt from the letter:

We write today in support of your resolution expressing the sense of the Senate that a carbon tax would be detrimental to the United States economy.

While our organizations represent a diversity of interests and viewpoints, we share the belief that a free market empowers American families to achieve economic success, greater prosperity, and a higher quality of life. Conversely, policies that inhibit or distort the marketplace – like a carbon tax – act as an economic anchor, reducing prosperity and lowering the standard of living that American families have worked hard to attain.

A carbon tax will inflict economic punishment on our nation’s families and businesses by deliberately making the energy they rely on every day – electricity, gasoline, diesel, and natural gas – more expensive. And not only would consumers’ energy bills and prices at the pump be driven upward, but as the nonpartisan Congressional Budget Office (CBO) states, those higher fuel prices “would raise production costs and ultimately drive up prices for goods and services throughout the economy.”

Click here to read the full coalition letter.

Click here to read Senator Blunt’s press release on the resolution.

Click here to read AEA’s “Ten Reasons to Oppose a Carbon Tax.”

Filed Under: Carbon Tax, Press Releases Tagged With: carbon tax, resolution, Senator Roy Blunt

Do Not Take a Finance Class (or an English Class) from the College of Marin

May 20, 2016 by Daniel Simmons 6 Comments

At the College of Marin, located a few miles north of San Francisco, it would be foolish to take a class in finance. Tesla is receiving $5.3 million in state and utility incentives to install a battery array on campus to save at most $150,000 a year. The Marin Independent Journal explains:

Tesla will get $5.3 million in state and utility incentives and rebates covering site preparation, installation of lithium-ion battery packs, a liquid thermal control system, and software commanded by a solar inverter.

“It won’t cost us a dime and we’ll save $100,000 to $150,000 on our power bills,” college president David Wain Coon said. “It’s very exciting.”

Coon added that “as a college committed to innovation and sustainable practices, we are thrilled to be partnering with a company that is on the forefront of advancing energy alternatives.”

At zero percent interest, it would take more than 35 years to payback $5.3 million with $150,000 a year. At a mere 3 percent interest, the payback period is over 50 years. Worse, the Tesla batteries will certainly not last anywhere near that long because Tesla’s Powerwall battery is only warrantied to last 10 years.

English classes from Marin are also likely suspect due to Marin College’s torturing of English. The College claims to be “committed to innovation and sustainable practices” and this battery array is not at all financially sustainable without government and utility subsidies.

P.S. You really shouldn’t take an ethics class at Marin College either. This battery array is paid for by taxpayer and ratepayers. Hard working people paid their taxes and their electricity bills only to have the government and the utility give that money to a billionaire to install a product which makes no financial sense. Also troubling is that David Wain Coon, the college president, is “excited” (in his words) for the government and utility to pass the taxpayer and ratepayer money on Elon Musk because Coon’s College saves some money. Coon should be embarrassed, not excited.

Filed Under: Blog, Electric Vehicles, Energy Subsidies Tagged With: Battery storage, College of Marin, Powerwall, Tesla

Court’s Decision Reaffirms that States Should Stop Work on Carbon Rule

May 19, 2016 by AEA Leave a Comment

In an unexpected turn of events, the DC Circuit independently decided that the entire circuit court panel (11 judges) should hear the challenge to Obama’s carbon rule. The practical effect is that oral argument will delayed from June 2 until late September. For all intents and purposes, this is positive news for the challengers and should encourage states to safely put their pencils down if they haven’t already.

Initially, both sides had viewed expedited review of the case positively. The petitioners saw it as a backup in the event they did not receive the stay, effectively trying to minimize any harm done while the courts were reviewing the regulation. The EPA likely viewed the expedited process as a “free consolation prize” to the states in exchange for the court denying the stay request. Once the Supreme Court granted the stay, however, the challengers’ reason for seeking expedited review no longer existed.

Of course proponents of the rule argue that this “streamlines the path to the Supreme Court” since there was the potential for en banc review in addition to the three judge panel. Given the heavily Democratic composition of the DC Circuit and favorable panel EPA drew with the three-judge panel, it is just as likely that the case would have been appealed straight to the Supreme Court anyway.

EPA might have lost six months or more

The new timeline for resolution is likely slowed down by a few months and potentially even six or more months depending on the losing party’s appeals strategy. Instead of a likely petition for Supreme Court review in the Fall with oral arguments and decision in the late Spring, the request for Supreme Court review may not arrive until Spring 2017. This could easily push oral arguments to the Fall 2017 with a decision not issued until 2018.

DC Circuit presents more opportunity for dispute

The road also got more difficult for the EPA. No one doubted the favorability of the three-judge panel to EPA’s position. Now, it must convince five DC Circuit judges of their regulation’s legal merits, rather than two. True, both panels would possess a majority of Democratic appointees. The larger panel, however, will not be as favorable to EPA as they might have hoped with two liberal judges recusing themselves – one of which is currently nominated by the President to fill Justice Scalia’s vacancy (EPA proponent Merrick Garland). This leaves a delicate 5-4 balance of Democratic and Republican appointees hearing the full court challenge.

More than a case of agency deference

The court’s sua sponte decision to move immediately to en banc review also indicates the court’s assessment that the case is not a simple matter of agency deference. As the court of first appeal for Clean Air Act challenges, the DC Circuit is traditionally keen on adherence to established administrative procedure. Yet, the EPA’s unusual (and last-minute) revised interpretation of a key Clean Air Act provision – whether their mercury rule under Section 112 prevents them from regulating the same power plants under Section 111 – is an obvious vulnerability for the agency. The abnormal litigation strategy raises questions of arbitrary and capricious agency action and outcome-oriented interpretation.

Signal to states: Wait and see

The takeaway for states is even clearer than before. Resolution of this case will not occur until later 2017 at the earliest, when a full Supreme Court is able to hear the case. The November election will certainly influence the Court’s composition but even assuming the rule is upheld by a Clinton Supreme Court, states will not face any obligations until well into 2018. Additionally, as is customary with litigation on complex regulations, further agency action on the rule such as revising timelines, updating underlying assumptions, and even modifying state requirements is quite likely even if upheld. This means states continuing work now face tremendous uncertainty. The wise course of action would be to stop work until more clarity is provided. Perhaps they could even focus on prioritizing affordable energy in the meantime.

Filed Under: Blog, EPA Power Plan Tagged With: 111d, clean power plan, CPP, EPA

RFS Levels Are Detached From Reality

May 18, 2016 by AEA Leave a Comment

WASHINGTON – American Energy Alliance President Thomas Pyle issued the following statement on the proposed 2017 volume requirements for the Renewable Fuel Standard (RFS):

“The EPA’s RFS proposal is once again detached from reality. The agency is forcing unsafe levels of biofuel into our nation’s fuel supply.

“The RFS is a broken program. It was based off false assumptions and as a result, Americans are stuck with a program that doesn’t line up with the world we live in today. The RFS is not a ‘success story’, as EPA official Janet McCabe puts it. Rather, it is a lesson on why the federal government should get out of the energy business and let the markets work the way they’re supposed to.

“This program can’t be fixed by tinkering with the blending levels or reforming parts of the mandate. The only way to truly fix the RFS is to dismantle it entirely.”

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Filed Under: Press Releases Tagged With: energy, EPA, Renewable Fuel Standard, rfs