Search anytime by typing below

Thanks for joining the AEA efforts to help combat rising energy prices. We don’t want to bug you that often, so let us know what energy issues interest you, and we’ll keep your inbox happy.

*Please fill in all items

Christmas Drag

December 5, 2014 by 1 Comment

Holiday Drag

It looks like Christmas came early this year. But instead of a lump of affordable, reliable coal, we’ve been inundated with regulations from the EPA. Their proposed rule for existing power plants is projected to cost $366 billion, with residents in 43 states expected to see double-digit percentage increases on average in their electricity bills from 2017 to 2031.

And the hits keep on coming. By their own estimates, EPA’s latest ozone proposal will be the costliest regulation in American history. Apparently the fact that ozone levels have dramatically fallen since the 1970s isn’t of their concern. With increasingly dubious justifications for these onerous regulations, one has to wonder if EPA simply enjoys taking the money of American taxpayers. Perhaps they’re trying to cancel Christmas this year, after all.

Filed Under: Blog, Cartoons

Energy Matters

December 4, 2014 by Leave a Comment

Energy matters because it enables us to do more. The unique mix of resources we’ve been blessed with gives us opportunities to create, innovate and strive for a better tomorrow. And by enlisting the help of a little robot with a penchant for skating, Amazon is doing just that.

Helping “pickers” fulfill 300 orders per hour, Amazon’s Kiva exemplifies how a high energy economy can create jobs while optimizing others, making processes more efficient and our work days a little easier. And all of this serves to make our lives better.

Screen Shot 2014-12-04 at 5.09.21 PM

Amazon recognizes that improving our methods of production remains a key part of ensuring that America’s energy boom continues. With recent estimates suggesting the “shale revolution could create as many as 1.7 million permanent U.S. jobs by 2020”, such innovation cannot be overvalued.

Filed Under: Blog Tagged With: , ,

Another Sweetheart Deal for Big Wind?

December 2, 2014 by 3 Comments

WASHINGTON — American Energy Alliance President Thomas Pyle issued the following statement about the House Republicans’ proposed tax extenders deal:

“The wind PTC was a bad idea yesterday, it’s a bad idea today, and it will be a bad idea tomorrow.

“Over twenty percent of this extenders deal, nearly $10 billion, is a handout to AWEA and its allies like the League of Conservation Voters who spent $75 million during the midterm elections in an effort to defeat Republicans. Now the House Republicans are prepared to reward them with a massive handout courtesy of the American taxpayer. This sweetheart deal will cost American families close to $100 per household, and will stick them with more expensive and less reliable electricity in the future.

“A vote for this deal is also an endorsement of President Obama’s climate agenda, as the PTC is integral to the administration’s costly climate action plan.

“At the very least, the House should revert back to the original ‘placed in service’ language rather than accepting the vague and expensive ‘under construction’ idea that the PTC should apply from the moment that a CEO of a wind company simply thinks about building a turbine.

“A one-year extension is an early Christmas present from the House Republicans to big wind manufacturers like GE and a number of foreign owned companies. Instead of trying to ‘clear the decks’ for next year, Congress should put an end to this lucrative handout once and for all.”

###

Filed Under: Blog, Press Releases Tagged With: , , , ,

White House Punts on RFS after Nearly a Year of Delay

November 25, 2014 by 3 Comments

After much anticipation, the Environmental Protection Agency (EPA) finally announced it would not set targets for 2014 under the Renewable Fuel Standard (RFS). Instead they will issue the final numbers for 2014 before or with the 2015 RFS proposed rule—over a year late.[1] In other words, the EPA is punting a final decision on the 2014 numbers and lumping them together with the 2015 numbers. Industry leaders are now calling on Congress to act and repeal or significantly reform the program. If it takes more than one year for EPA to set volume requirements under the RFS (when EIA sends EPA their estimates) then either EPA is too political to make a decisions or the RFS is flawed or both.

Will EPA’s Latest Failure Cause Congress to Reform the RFS?

It is amazing that it would take EPA more than a year to set the RFS volumes, especially when these decisions affect large investment decisions by the America’s refiners. Unsurprisingly the refiners are not happy. The President of the American Fuel and Petrochemical Manufacturers (AFPM) Charles T. Drevna stated that Congress needs to address this issue, “The fact that EPA proposed the 2014 standards over a year ago, and now 2014 is almost over, is another reason why Congress needs to step in and repeal or significantly reform this badly broken program.” The President of the American Petroleum Institute (API), Jack Gerard released a similar statement, “The only real solution is for Congress to scrap the program and let consumers, not the federal government, choose the best fuel to put in their tanks.”

In the meanwhile AFPM is suing EPA for failing to issue the renewable fuel mandate, citing the harm it has caused refiners who cannot adequately prepare for compliance unless the Agency meets their deadlines. (To find out more about EPA’s timeline for RFS and their recurring inability to meet deadlines click here.)

EPA Routinely Misses their Own Deadlines for RFS

This year was especially controversial because EPA’s proposed 2014 RFS lowered the amount of total biofuels that oil refiners were originally required to blend into gasoline under the Energy Independence and Security Act. This is the first time EPA had to lower the number of total biofuels required below what was required the previous year, because we have reached what is known as the “blend wall.” Most cars and trucks can only use fuel which is 10 percent ethanol. That limits the total amount of ethanol that can be blended with fuel.

As we have previously noted, EPA has routinely fallen behind on meeting their deadlines for implementing the RFS. In fact, EPA hasn’t met the statutory deadline in November since 2011.[2] This is not because it is immensely difficult for EPA to figure out how to set sensible limits below the “blend wall”. EPA would simply have to look at demand projections by the Energy Information Administration (EIA) and set targets low enough to not exceed 10 percent.

The continuous uncertainty surrounding the RFS is bad for anyone who buys fuel. Refiners need to be able to plan and consider biofuels mandates over multiple years in order to meet the RFS’s requirements. This is because RFS allows refiners to save a certain amount of renewable credits (known as RINS[3] –serial numbers assigned to biofuel for the purpose of tracking its production, use and trading, and can be purchased to fulfill part of the RFS requirement) to use to show compliance the next year.

Political Considerations delay 2014 RFS Numbers

Unfortunately, it appears that politics got in the way of setting sensible policy. Since 2014 was an election year, and the RFS was a political issue in a vulnerable Iowa Senate seat, EPA continued to delay a final decision. An article in POLITICO highlighted political issues surrounding this decision:

Several sources following the issue closely say that the White House hoped that boosting the overall volumes would be enough to act as a boon to (then Iowa Senate Democrat Bruce Braley). But renewable fuels advocates in the state aren’t happy with that compromise, so anything short of a clear victory for ethanol makers could hurt Braley’s campaign… ‘If they increase the number, but it’s till tied to the blend wall, in our view, they will have killed the program, and that will be seen as a huge loss for Braley, and they’ll wait until after the election,’ said one person in the biofuels industry. ‘If it’s good for Braley, it’ll be before the election. If it’s bad for Braley, it’ll be a punt. And people will see the punt.”[4]

In other words, since the White House had no options to act on the 2014 RFS numbers and make the Democratic Iowa Senate candidate look good, they made the decision to hold off on finalizing the requirements.

This all happened even though they knew the requirements set in legislation needed to be lowered for certain categories of renewable fuels in the program (cellulosic, advanced, and total renewable fuels) as of November 29, 2013, when they originally proposed lowering the standards.[5] Now refiners will have to continue waiting due to EPA’s inability to overcome political issues.

Conclusion

It is unsurprising that EPA is officially punting the final 2014 RFS numbers considering that 2014 is nearly over and now they are also behind on the 2015 RFS. This is not good for anyone who buys fuel because it forces additional costs on refiners who the RFS forces to blend biofuels into conventional fuels. However, EPA has continually made it difficult for refiners to comply with RFS requirements by missing their deadlines. Since EPA is subject to political control by the Administration, sensible policy falls by the wayside. It is time to repeal the RFS and get rid of the headache and political favors that go with it.

[1] Erica Martinson, EPA whiffs on ethanol, POLITICOPro, November 21, 2014, https://www.politicopro.com/energy/whiteboard/?wbid=44420.

[2] Christopher Doering, EPA’s ethanol mandate for 2014 behind schedule, The Des Moines Register, June 27, 2014, http://www.desmoinesregister.com/story/money/agriculture/2014/06/27/epa-ethanol-mandate-weeks-away-gas-supply-congress-renewable-fuel-standard/11447021/.

[3] Amanda Peterka, EPA extends compliance period for the 2013 blend requirement, E&E News, June 6, 2014, http://www.eenews.net/eenewspm/2014/06/06/stories/106000088585.

[4] Erica Martinson, White House may see no reason for pre-election biofuel move, POLITICOPro, October 7, 2014, https://www.politicopro.com/member/?webaction=viewAlerts.

[5] Environmental Protection Agency, 78 Fed. Reg. 238 (proposed November 29, 2013) (to be codified 40 CFR Part 80), http://www.gpo.gov/fdsys/pkg/FR-2013-11-29/pdf/2013-28155.pdf.

Filed Under: Blog, Products and Power Tagged With: , , , ,

Lies, Damned Lies, and “Conversations with AWEA”

November 21, 2014 by 13 Comments

In a desperate attempt to provide cover for the Environmental Protection Agency (EPA), the Natural Resources Defense Council (NRDC) made an embarrassing gaffe. It is no secret that the EPA and the NRDC have been bedfellows for a number of years. The NRDC draws up blueprints for new regulations, and the EPA puts those blueprints into action.

Earlier this year, this marriage-of-convenience has led to the birth of a new regulation mandating the reduction of carbon dioxide emissions from existing power plants. This week, the NRDC appears to be gearing up yet again to support the EPA in its effort to rid Americans of cheap and reliable energy.  The NRDC’s latest report claims that, rather than costing taxpayers money, the EPA’s new carbon dioxide regulations could actually save as much as $9 billion in 2030. Indeed, they insist that because it will save this large sum of money, the regulation itself should be more stringent.

Naturally, we were curious to find out how the NRDC had stumbled upon the fountain of youth, the magic formula that would show the EPA how to regulate the U.S. into utopia. However, upon closer examination we found their supporting evidence dubious and intentionally misleading.

Statistics are a funny thing—you can use them to support almost any argument that you’d like, provided that someone else has done the “research”. Statistics become even funnier when they are entirely made up.

One of the premises of the NRDC report is that the Energy Information Agency’s (EIA) Annual Energy Outlook is inaccurate, particularly in its estimation of the average capacity factor for onshore wind power. The NRDC argues that this average capacity factor is actually 10 percentage points higher than EIA estimates, boosting it from 35 to 45 percent. However, if we look at the evidence they provide (endnote 22), we find that they support this number based on “Discussions with American Wind Energy Association [AWEA] and updated industry data.”

They cite no source data, no report (with or without spurious reasoning)—nothing more than a conversation with the country’s largest wind energy lobbying group. Cue the fox to come and guard the hen house. Instead of doing real research and crunching the numbers on publicly available EIA data, the NRDC chose to rely on an organization whose very existence depends on the success of wind energy. Conflicts of interest aside, couldn’t AWEA at least write a misleading paper on the topic before it invents statistics? This is sheer laziness—we expected more from the well-funded and well-staffed lobbying group.

If the NRDC wants to successfully challenge EIA numbers, it has to provide real numbers taken from documented, on-the-ground sources. It can’t just make assumptions based on some obscure conversation it had with wind energy lobbyists. Essentially, the NRDC took the facts, discounted the ones that did not support its position, added ones it thought would be beneficial, and ended up with arbitrary numbers like this:

 

Average Capacity Factor for Onshore Wind

We can’t help but wonder how their report would turn out had they accounted for the environmental impacts of renewable energy sources, transmission costs, and the strain wind and solar power place on the grid.

But it’s not just us.

The findings of NRDC’s report run counter not only to EIA’s estimates, but also those provided by the U.S. Chamber of Commerce. The Chamber estimates that this new regulation will cost consumers $289 billion in additional cumulative electricity payments, and erase 224,000 jobs annually through 2030. Given these estimates,  it makes sense that the NRDC might want to make up its own numbers.

It seems that the NRDC didn’t expect anyone to think critically about its numbers. A report this blatantly misleading requires either a special kind of arrogance or genuine disdain for NRDC’s readership. We can only hope that the EPA will one day be decoupled from the NRDC so that pragmatic, effective policy can become the norm.

 

 

Filed Under: Blog Tagged With: , , , , ,

Europe’s “Green Energy” Dream has Become a Nightmare

November 21, 2014 by 1 Comment

The U.S. Energy Information Administration’s “Today in Energy” chart on November 18 illustrates a huge problem with Europe’s aggressive renewable energy subsidies and mandates — European electricity prices have risen at an astonishing rate, compared to American prices:

European Electricity Prices

EIA attributes much of the problem to Europe’s regulatory policies, noting,

“In 2013, average residential electricity rates in European Union (EU) countries were more than double rates in the United States. Regulatory structures—including taxes and other user fees, investment in renewable energy technologies, and the mix and cost of fuels—all influence electricity prices…Taxes and levies explain high prices in some European countries. EU countries taxed residential electricity rates at an average of 31% in 2013, up from an average of 23% in 2006.”

The Institute for Energy Research has repeatedly pointed out the follies of European countries’ energy policies in case studies on Germany, Spain, and Denmark. Residents of each of these countries pay far more in the electricity bills than Americans do, in part because of aggressive renewable energy subsidies and mandates.

In Spain, for example, electricity prices have risen by 92 percent from 2005 to 2011. Consider one Spaniard, Juan Luis Presa, whose story appeared in the Spanish newspaper El País. Presa is 62 years-old and lost his job. Neither of his two children is currently employed. Out of the check from the government the family receives for $582.2 per year, they must spend $109.3 on electricity.

During the winter of early 2014, his electric radiator remained turned off. Instead of using electricity to make their home warmer, Presa and his family coped with the cold temperatures by using more blankets and wearing heavier clothing. Theirs is a story of energy poverty that is now all too common in Europe.

It’s time to wise up–Europe’s failed “green energy” policies are not a model for the U.S. to follow. We would do well to learn from Europe’s mistakes.

 

Filed Under: Blog Tagged With: , , , ,

ICYMI: It’s Time for the Wind PTC to Blow Away

November 21, 2014 by Leave a Comment

American Energy Alliance President Thomas Pyle published an op-ed today for the Las Vegas Review-Journal titled “It’s time for wind tax credit to get blown away.” The text of the op-ed follows:

Lame-duck Senate Majority Leader Harry Reid soon will lose control of a chamber he has helmed for eight years. As the sun sets on his reign, one question remains: will Reid, D-Nev., go out with bang or a whimper?

The answer to that question could depend on what Congress decides to do about one of Reid’s favorite corporate subsidies: the wind production tax credit.

First, the backstory: Congress enacted the wind tax credit in 1992 as a temporary kick-start for the renewable energy industry, especially wind power. Since its inception, however, the credit has been extended seven times, costing Nevada taxpayers more than $12 million in 2012 alone.

The wind tax credit is one of the most contentious issues on the legislative agenda during the lame-duck session. And for good reason: it is integral to President Barack Obama’s climate change agenda, which will destroy jobs and raise energy prices on Nevada families.

The foundation of the president’s climate plan is the Environmental Protection Agency’s greenhouse gas emissions rule for existing power plants — the president’s attempt to shut down America’s coal industry. A recent analysis finds that residents in 43 states, including Nevada, will face double-digit power bill increases under the rule. For all that pain, the rule would reduce global carbon dioxide emissions by just 1.5 percent by 2050.

One of the central building blocks of the EPA’s power plant rule is increased use of wind and solar for electricity generation. But wind and solar are uncompetitive without massive taxpayer subsidies and mandated renewable portfolio standards. For wind, that takes the form of the production tax credit.

Thus, a vote for the tax credit is a vote for Obama’s climate change agend

But there’s another important reason to reject the wind production tax credit: America’s largest and wealthiest corporations exploit the subsidy at taxpayers’ expense.

In recent years, the credit has become one of Wall Street’s favorite tax loopholes. Take billionaire investor Warren Buffett. His company, Berkshire Hathaway, has heavily invested in wind power in recent years, including the purchase of Nevada’s dominant power company, NV Energy. However, Buffett admits he never would have invested in wind if taxpayers weren’t picking up the tab. According to Buffet, the production tax credit is “the only reason to build” wind facilities.

His isn’t the only company to figure out that taxpayers can fund a corporate windfall. GE, one of the largest companies in the country and with deep ties to the Obama administration, is a major wind turbine manufacturer. And T. Boone Pickens, who made his billions in the oil patch, peddled wind energy as part of his “Pickens Plan” before losing $150 million on failed wind projects.

It’s no wonder the production tax credit is a prized subsidy for Wall Street. The credit can be so lucrative that wind producers often turn a profit while paying utilities to take their electricity.

These perverse financial incentives explain why corporate America is flocking to the wind industry, Pickens’ failures notwithstanding. Such abuse has drastically spiked the cost of the production tax credit to taxpayers. In the past seven years, taxpayers have forked over more than $7 billion, including nearly $3 billion alone in 2012, according to government estimates.

Congress should reject any attempt by Reid to revive the wind production tax credit in the lame-duck session. It’s clearly a bad deal for Nevadans, enriching out-of-state billionaires at the expense of working families.

When Reid rides off into the sunset, he should take the wind production tax credit with him.

Click here to read the original post.

Filed Under: Blog Tagged With: , , , , , , ,

Stupid voters

November 21, 2014 by Leave a Comment

APEC China

Filed Under: Cartoons Tagged With: , , , ,

STUDY: EPA Regs. Will Send Energy Prices Soaring

November 20, 2014 by 4 Comments

Americans are facing an onslaught of costly regulations under President Obama’s radical energy agenda. A new study sheds further light on the extent of the carnage.

The study, conducted by Energy Ventures Analysis, finds that a suite of proposed EPA air rules will drive up energy prices for American families. By 2020, households can expect to pay 27 percent more for electricity and 50 percent more for gas for heating and cooking. Regulations included in the analysis include the carbon dioxide emission rule for existing power plants, the Mercury Air Toxics Standards (MATS), and Regional Haze.

Naturally, some states are hit harder than others. Texas households will see 48 percent higher electric bills and 75 percent higher gas bills. Illinoisans will be forced to endure cold Midwest winters with 82 percent higher heating bills. Click here to see how your state fares.

The Energy Venture Analysis study adds to a growing body of research that shows the disastrous impacts of EPA’s regulatory agenda. A recent study by NERA Economic Consulting, for instance, finds that Americans in 43 states will see double-digit electricity rate increases under EPA’s CO2 rule for existing power plants. And an IER analysis shows that EPA rules will shutter more than 72 gigawatts of electrical generating capacity—mostly coal-fired power plants—which is equivalent to shutting off the capacity to power every home in 20 states.

Filed Under: Blog Tagged With: , , ,

NYC’s Climate Goal: Symbolism Over Science

November 20, 2014 by 2 Comments

The City Council of New York recently approved—unanimously—the bill introduced in September to reduce NYC’s carbon dioxide emissions 80 percent by the year 2050. The vote and accompanying commentary from political officials showcases just how much symbolism has triumphed over science in the climate policy debates. Even if every word Al Gore had ever uttered about climate change were true—which they’re not—the following news story would still be utterly nonsensical:

The City Council overwhelmingly passed a bill today mandating that New York City slash its greenhouse gas emissions 80 percent by 2050…

“While rising sea levels and extreme weather events are likely to be a part of the city’s future, we can still prevent the worst outcomes,” [Council Speaker] Ms. Mark-Viverito told reporters before the vote.…

In 2006, under former Mayor Michael Bloomberg, the City Council passed a law requiring a 30 percent reduction of greenhouse gas emissions by 2030. [District 22 Council member and author of the new bill] Mr. Constantinides, however, said the projected rising sea levels and more unpredictable storms resulting from climate change meant the Council and Mr. de Blasio needed to take more dramatic action….

“There’s probably no greater threat to our global civilization than climate change,” Mr. Constantinides said. “There is undisputable links between our carbon emissions and reducing ice sheets, extreme sea rise and overall warming climates worldwide.”

“If we don’t act now, future generations of New Yorkers will be condemned to a future of blistering summers, mass extinctions and seas that threaten to engulf low-lying areas around the globe,” he added.

A spokeswoman for Mr. de Blasio praised the Council for passing the legislation.

“We are very pleased to partner with the Council as we work to dramatically reduce our contributions to climate change, and the Mayor looks forward to signing this legislation,” said the spokeswoman, Amy Spitalnick. “The city will lead by example by retrofitting every public building with any real energy use within the next ten years, while partnering with the private sector to further reduce emissions and improve efficiency–generating billions in savings and creating thousands of jobs.”

To repeat, even if one took the most alarmist projections of human-caused climate change at face value, the above commentary is sheer nonsense. New York City’s emissions are utterly insignificant when it comes to the issue of global climate change. When Council member Constantinides warns what will happen “if we don’t act now,” that statement only makes sense if by “we” he means “the entire United States, Europe, China, and India.” If instead, by “we” he means “the people of New York City”—which in context he clearly does mean—then his statement is absurd.

Even if the entire United States and Europe agreed to a significant reduction in emissions, this would be largely symbolic without reciprocal action from China and India. Indeed, using a standard climate model and estimates of key parameters, even if the United States stopped all carbon dioxide emissions immediately and forever, the global temperature in the year 2100 would be a mere 0.2 degrees Celsius cooler than under the status quo baseline. If that’s true for the United States collectively, it should be clear that the efforts of New York City to merely reduce emissions by mid-century are completely irrelevant.

Finally, the commentary about “job creation” is likewise absurd. Even if we thought that New York City’s carbon dioxide emissions had a measurable impact on climate change—which they don’t—it still wouldn’t make sense to laud the crackdown on emissions for “creating jobs.” If that made sense, then New York City could likewise pass a mandate cutting down on the use of bricks or steel or asphalt 80 percent by 2050. As businesses scrambled to change their operations in light of the arbitrary regulation, we could see “job creation” in certain areas that were now artificially favored. Of course, the economy as a whole would suffer, because you don’t make society richer by taking away options from businesses. At best we would see an equal number of jobs “destroyed” by the new regulations, with consumers being made poorer on average.

In conclusion, when it comes to New York City’s bill to cut emissions, we don’t need to get into the details of the climate models to assess the plausibility of their assumptions. Even if the apocalyptic vision painted by Al Gore and others is perfectly true—which it’s not—measures limiting the emissions from individual cities are utterly absurd. They epitomize the prevalence of symbolism over science in our climate change policy debates.

Filed Under: Blog Tagged With: , , ,
Previous
Next