In the Pipeline: 3/13/13

I suppose China, a nuclearized North Korea, and Islamic militants in the Philippines are largely trivial matters. I also assume this means that the Navy will start shelling powerplants, refineries, and automobile factories. Boston Globe (3/12/13) reports: “America’s top military officer in charge of monitoring hostile actions by North Korea, escalating tensions between China and Japan, and a spike in computer attacks traced to China provides an unexpected answer when asked what is the biggest long-term security threat in the Pacific region: climate change… Navy Admiral Samuel J. Locklear III, in an interview at a Cambridge hotel Friday after he met with scholars at Harvard and Tufts universities, said significant upheaval related to the warming planet ‘is probably the most likely thing that is going to happen . . . that will cripple the security environment, probably more likely than the other scenarios we all often talk about.’”

 

Fool me once, shame on you. Fool me twice, shame on me. Washington Times (3/12/13) reports: “Mr. Vitter also released some of Mr. Armendariz’s emails, obtained in a broader investigation of EPA emails, and released several portions Tuesday showing Mr. Armendariz was pleased with new rules and restrictions EPA was pursuing on power generation… ‘We have set things in motion, including empowering and shaming the states, to clean up the oil/gas sector,” Mr. Armendariz said in the email. “Further progress is inevitable. I am extremely proud of the work that we have done collectively. Gina’s new air rules will soon be the icing on the cake, on an issue I worked on years before my current job.’”

 

Let’s hope she does to the anti-technology crowd what she did to the Beatles. The Guardian (3/11/13) reports: “An eclectic group of celebrities including Yoko Ono, Maggie Gyllenhaal and Susan Sarandon have joined forces in a music video calling for New York state to ban hydraulic fracturing… Titled Don’t Frack My Mother, the song was written by Sean Lennon, with about 25 musicians, actors and comedians performing in the video.”

 

Our friend Bryan over at the Empire was kind enough to send this along.  The author is rude enough to point out that EPA doesn’t actually have the statutory authority to do what it is about to do. Like anyone cares about such things in the post-legal Republic. Federalist Society (March 2013) reports: “With the prospect of imminent action, and growing political pressure to coerce unwilling states into unprecedented greenhouse gas regulation, whether the EPA has the authority to take these actions must be explored. . . .  This paper concludes that it does not: In amending Section 111(d) in the Clean Air Act Amendments of 1990, Congress unambiguously provided that the subsection could not be used to set standards for industries that are also regulated under the Clean Air Act’s Section 112 air toxics program. Because existing power plants have been regulated under that program since the 2012 Utility maximum achievable control technology (“MACT”) Rule,  the EPA may not lawfully regulate them under Section 111(d).”

 

What does this have to do with energy? Plenty. The scarcity narrative has broken down everywhere.  It is being replaced by the paradigm of plenty. Which is bad news for folks, like many of our environmental brethren (yes, we mean you John Holdren), who do not like humans. CBS (3/11/13) reports: “For the first time in the history of the world, more people will die from overeating than undereating [starvation] this year. … It’s all happened in the last 20 years. … As long as you don’t ban Cheez-Its. Cheez-Its are OK. That’s my addiction.”

 

The Price of Green Energy: Is Germany Killing the Environment to Save It? Speigel Online (3/12/13) reports: “The German government is carrying out a rapid expansion of renewable energies like wind, solar and biogas, yet the process is taking a toll on nature conservation. The issue is causing a rift in the environmental movement, pitting “green energy” supporters against ecologists.”

 

We missed this yesterday, but in all fairness Brooks routinely misses things (like the surge in oil and gas production) by years. So we don’t feel too bad. NYTimes (3/11/13) reports: “People in China and elsewhere are wondering if the fracking revolution means that the 21st century will be another North American century, just like the last one… What are the names of the people who are leading this shift? Who is the Steve Jobs of shale? Magazine covers don’t provide the answers. Whoever they are, they don’t seem hungry for celebrity or good with the splashy project launch. They are strong economically, but they are culturally off the map.”

AEA Responds to ‘Ryan Budget’ Proposal

AEA OPTIMISTIC ABOUT HOUSE BUDGET PROPOSAL, CALLS FOR PERMANENT END TO ALL GREEN ENERGY SCHEMES

WASHINGTON D.C. — American Energy Alliance President Thomas Pyle released the following statement in response to today’s release of the House Budget Committee’s FY2014 Budget Resolution, entitled “A Path To Prosperity: A Responsible, Balanced Budget.”

“The House today offers a new direction for America’s energy future — one that ends a broken system of cronyism and opens taxpayer-owned lands and waters to responsible energy development. Chairman Ryan’s budget recognizes the inexorable link between affordable, reliable energy and a growing economy. Regrettably, this sensible approach to energy policy has eluded Washington for decades, despite the fact that the United States and North America are the most energy rich region in the world. Now that we know how tremendous our energy supplies are, it is time for policies that reflect this potential.”

“The ‘Ryan Budget’ is a blueprint to restore fairness in government by ending taxpayer-funded giveaways to Solyndra-style special interests that receive multi-million dollar grants, loans, and loan guarantees for renewable technologies that cannot survive in the free market. Additionally, it provides overdue permitting for major energy infrastructure projects like the Keystone XL Pipeline, which the White House continues to block at every turn.

“It remains to be seen if House Republicans will make good on the strong commitment of this budget and end the system of spoils and cronyism that continues to subvert a truly free energy market. We are hopeful that those members who offer full-throated support of today’s budget will also vow to end the huge subsidies for wind, corn-based ethanol, cellulosic biofuel, and other green energy schemes that pump borrowed dollars into their home districts for short-term political gain. A failure to end hypocrisy, in addition to cronyism, means that the ‘Ryan Budget’ will remain a distant dream of a fairer, more fiscally responsible government.”

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In the Pipeline: 3/12/13

Thanks for the hat tip to reality, EPA. Can we get back to work now?AFPM (3/11/13) reports: “American Fuel & Petrochemical Manufacturers (AFPM) President Charles T. Drevna issued the following statement following the withdrawal of its Petition for Waiver of the 2012 Cellulosic Biofuel Volumetric Requirements: ‘We appreciate the Environmental Protection Agency’s (EPA) prompt action to rescind the 2012 cellulosic renewable volume obligation (RVO) following a U.S. Court of Appeals’ decision to vacate the 2012 cellulosic RVO. As a result of EPA’s response, AFPM has withdrawn its waiver petition, since our members are no longer required to purchase credits for fuel that doesn’t exist.  We believe that EPA should reconsider proposed 2013 volumes, which suffer from the same shortcomings, and finalize a 2013 cellulosic biofuel RVO that reflects the Court’s directive to aim for accuracy.’”

 

How does Venice Beach look today? Bloomberg (3/10/13) reports: “The only thing California’s environmentally friendly Democratic legislators prefer to regulating private industry is spending public dollars. So it’s fascinating to watch them struggle with an unfolding dilemma… The state can tap into a gusher of new revenue only if legislators resist the muscular green lobby and allow oil companies to take advantage of vast petroleum reserves in the Monterey Shale geologic formation that runs south and east from San Francisco.”

Trust us, we are from the government and we are here to help you.E&ENews (3/11/13) reports: “A major natural gas producer is leaving a voluntary emissions-reduction program run by U.S. EPA amid an ongoing dispute over how the agency used data collected through the program to justify regulations for the sector, according to a letter obtained by Greenwire… The split comes amid ongoing concern from industry that EPA is exceeding its legal authority in an effort to limit greenhouse gas emissions and could lead to tough questions in the coming weeks as EPA’s air chief faces Senate confirmation hearings over her nomination to lead the agency.”

 

We know for sure that some electrons in DC are generated by massive egos. Otherwise, the government is kidding itself if it thinks all of its energy will be coming from wind. DCIST (3/6/13) reports: “The D.C. government’s agencies will be getting all of their electricity through wind power for at least a year, according to a news release from Washington Gas Energy Services. Under the terms of a new contract, the District will purchase all of its power needs from a Washington Gas-owned wind farm in Northern Virginia.”

 

Guess who?

In the Pipeline: 3/11/13

Sure, he was the spokesman for eco-terrorists until 2002, but he became disillusioned with the group. Or maybe it was that the group was designated the top Domestic Terror Group by the FBI in 2001. The Oregonian (3/3/13) reports: “The man once dubbed ‘The Face of Eco-Terrorism,’ who cheered tree-hugging arsonists and thwarted FBI efforts to catch them — stubbornly taking the Fifth before federal grand juries and an extremely annoyed congressional panel — is now a red-blooded American lawyer… Craig Rosebraugh, having spent his late 20s in Portland as the official spokesman for the Earth Liberation Front, earned his sheepskin at the Sandra Day O’Connor College of Law at Arizona State University in May 2011… But instead of taking the bar exam, he has continued his activism by finishing a movie about global warming, set for release this week.”

 

Lisa Jackson. Bob Perciasepe. James Martin. How many other people at the agency were conducting work on secret accounts? Or, like Carol Browner, how many have simply destroyed whatever evidence there may have been? Whatever the right number (10? 20?), I don’t think this is really the most transparent Administration in history. Free Beacon (3/8/13) reports: “A former Environmental Protection Agency administrator frequently used a private email account to conduct official business, contrary to previous claims by the agency and court affidavits… Emails released in Freedom of Information Act (FOIA) litigation between the EPA and the Competitive Enterprise Institute, a conservative think-tank, reveal former Region 8 administrator James Martin often used his personal email account to communicate with the Environmental Defense Fund.”

 

Let’s make it simple. Plentiful natural gas might mean that it dispatches before coal in the generation stack. But EPA regulations alone are causing coal-fired powerplants to retire prematurely, and only federal government tax policy is driving the installation of wind turbines. Both of those things are causing the grid to become more expensive and less reliable. Thank you, Gina McCarthy. Thank you, Senator Grassley. E&ENews(3/8/13) reports: “Grid operators in the mid-Atlantic and Midwest say major investments in the electric grid are needed to offset an unprecedented number of mostly coal-fired plant closures tied to stricter emissions limits and a surge of cheap gas, as well as the integration of new wind resources… Utilities in PJM Interconnection’s footprint last year asked to shutter almost 14,000 megawatts of mostly coal-fired generation, far outpacing the total number of megawatts — 11,086 — closed during the prior nine years, according to an analysis PJM released yesterday.”

 

You know, the last three times I have seen Tom Friedman he has been stepping off a plane, stepping out of a limo, and stepping into Capital Grille. Maybe he should take the first step towards a low carbon future and reduce his own lifestyle, including selling (giving away?) his 11,000 square foot house in the DC suburbs. NYTimes (3/9/13) reports: “I HOPE the president turns down the Keystone XL oil pipeline. (Who wants the U.S. to facilitate the dirtiest extraction of the dirtiest crude from tar sands in Canada’s far north?) But I don’t think he will. So I hope that Bill McKibben and his 350.org coalition go crazy. I’m talking chain-themselves-to-the-White-House-fence-stop-traffic-at-the-Capitol kind of crazy, because I think if we all make enough noise about this, we might be able to trade a lousy Keystone pipeline for some really good systemic responses to climate change.”

 

Must be pretty easy to cash in on pollution credits when the product (a car) can’t go anywhere. WSJ (3/8/13) reports: “Tesla Motors Co. TSLA +0.63% is racking up big bucks peddling pollution credits earned from sales of its $60,000 and up electric cars… Last year, the Palo Alto, Calif.-based maker of the Model S electric car collected $40.5 million—about 10% of its total revenue—selling credits earned from states to other auto makers, according to the company’s annual financial report.”

 

What the old codger really means is that a carbon tax would make all energy more expensive. But being a multi-millionaire, I suspect he is not really too concerned about that. CQ News (3/10/13) reports: “The idea of a carbon tax got an unlikely endorsement Friday from Ronald Reagan’s former secretary of State, who said a revenue-neutral levy on fossil fuels would allow all energy sources to compete based on their economic and pollution costs… George P. Shultz, who served in the Reagan and Nixon cabinets, said a well-designed carbon tax would “level the playing field” for fossil fuels and renewable resources without acting as a revenue stream for the Treasury.”

 

In these situations, we don’t feel too nerdy reminding you about the law of unintended consequences: “Green Cars Have a Dirty Little Secret”. WSJ (3/10/13) reports: “If a typical electric car is driven 50,000 miles over its lifetime, the huge initial emissions from its manufacture means the car will actually have put more carbon-dioxide in the atmosphere than a similar-size gasoline-powered car driven the same number of miles. Similarly, if the energy used to recharge the electric car comes mostly from coal-fired power plants, it will be responsible for the emission of almost 15 ounces of carbon-dioxide for every one of the 50,000 miles it is driven—three ounces more than a similar gas-powered car.”

In the Pipeline: 3/8/2013

It’s hard to believe how fast they grow up. One minute you’re dropping your subsidies off for their first day of kindergarten, and before you know it they’re taking victory laps in college. Politico (3/7/13) reports: “Just months after the wind power production tax credit won a last-minute renewal by Congress, opponents of the subsidy are circling the wagons to make sure it doesn’t happen again… The loose coalition of anti-PTC groups has just begun meeting to map out an advocacy and lobbying strategy. The credit will expire at the end of this year without congressional intervention… They’re seeking to attract like-minded members of Congress and the public, raise the issue’s profile and take aim at wind power jobs claims from the industry.”

 

Wait, what?  I thought all insurance companies recognized that the science was settled and the world was in fact ending. Now it turns out . . . not so much. Bloomberg (3/7/13) reports: “Almost 90 percent of insurance companies lack a comprehensive plan to address climate change and fewer than half of them view it as a likely source of financial losses, according to a report released today.”

 

These people have perfected the art of making the selfish look selfless. MasterResource (3/7/13) reports: “Just a few years ago, environmental leaders were saying that we faced a climate emergency, that emissions must start declining rapidly, and that enemy number one was coal. Now the same leaders are saying we have to stop shale fracking even though it is crushing coal and driving down American carbon emissions… Of course, the fractivism isn’t really about the fracing. Matt Damon’s anti-natural gas movie was originally an attack on wind farms. In 2005, Bobby Kennedy Jr. helped lead a campaign to stop the Cape Wind farm from being built because it will be visible from the Kennedy compound. Meanwhile, he was championing the construction of a massive solar farm in the Mojave Desert, 3,000 miles away — itself opposed by local environmentalists.”

 

The following think tank chiefs are opposed to a carbon tax. Please contact us at [email protected] if you wish to join our growing ranks. We are thinking about starting a new list – trade association heads. We fear, however, it will be pretty small.

Tom Pyle, American Energy Alliance / Institute for Energy Research
Myron Ebell, Freedom Action
Phil Kerpen, American Commitment
William O’Keefe, George C. Marshall Institute
Lawson Bader, Competitive Enterprise Institute
Andrew Quinlan, Center for Freedom and Prosperity
Tim Phillips, Americans for Prosperity
Joe Bast, Heartland Institute
David Ridenour, National Center for Public Policy Research
Michael Needham, Heritage Action for America
Tom Schatz, Citizens Against Government Waste
Grover Norquist, Americans for Tax Reform
Sabrina Schaeffer, Independent Women’s Forum
Barrett E. Kidner, Caesar Rodney Institute
George Landrith, Frontiers of Freedom
Thomas A. Schatz, Citizens Against Government Waste
Bill Wilson, Americans for Limited Government

Inflated Numbers; Erroneous Conclusions

Claims by the wind industry that another year-long extension of the Production Tax Credit (PTC) would create American jobs are based on “self-serving industry interviews and unsupported wind capacity forecasts that have no credibility,” according to a study by the American Energy Alliance (AEA) and the National Center for Public Policy Research (NCPPR). Additionally, the report finds that the analysis conducted for the wind industry by Chicago-based Navigant Consulting significantly overestimated the number of jobs that would be lost as a result of scheduled expiration of the PTC on Dec. 31, 2012.  Congress voted to extend the subsidy at a cost of over $12 billion during last year’s fiscal cliff negotiations.

The study, “Inflated Numbers; Erroneous Conclusions: The Navigant Wind Jobs Report,” was conducted by Charles Cicchetti, Ph.D, a senior advisor to the Pacific Economics Group and Navigant. The study lays bare the macroeconomic distortions and faulty modeling that the wind industry used to justify continued payments of its taxpayer-funded corporate welfare.

The study’s key findings include:

  • Navigant-Wind-Jobs-ReportWhen calculating potential job losses, Navigant used the wind industry’s self-serving, inflated forecasts for wind capacity “lost” without the PTC, which exceeded the federal government’s non-biased forecasts by as much as 55%.
  • Navigant’s analysis also incorrectly applied one model to determine direct job losses in key states, inflating them by at least 100%. Incorrectly applying another model resulted in questionable multipliers that inflated job loss estimates by at least another 72%.
  • The Navigant report narrowly focuses on supposed jobs lost in the wind industry if the PTC isn’t extended but completely ignores the U.S. economy as a whole. If new generating capacity is needed and jobs are the measure, other sources of electricity, such as coal, nuclear power or atural gas, would create more direct jobs than wind power for an equal amount of new generating capacity. In a separate May 2010 report, Navigant actually acknowledged that wind power produces fewer jobs, direct and indirect, than other sources of electricity for an equivalent amount of capacity.
  • Subsidizing wind is very costly per job created. A one-year PTC extension could cost as much as a staggering $4.8 million for each direct wind manufacturing and construction job added.

The Navigant study claimed that the U.S. economy stood to lose 37,000 jobs in 2013 if the PTC were to have expired. Yet Dr. Cicchetti’s analysis demonstrates that Navigant misapplied models used to substantiate this claim, with the result that potential direct job losses were inflated by at least 100 percent in the key states that were reviewed. As a result, lawmakers and the general public were misled to believe that an extension of the PTC would strengthen the U.S. economy. Regarding the Navigant study, Dr. Cicchetti concludes, “The Report’s resulting job loss numbers are meaningless and should not be used to justify spending billions of dollars in taxpayer money to extend an unneeded subsidy for the wind industry.”

“This study confirms what we have known all along: the PTC is bad policy built on faulty economic analysis that results in a net loss for the U.S. economy,” said AEA President Thomas Pyle. “A sounder approach would be to let the free market determine winners and losers among energy sources, instead of Washington doling out billions of dollars to prop up Big Wind at great loss to the federal treasury and the U.S. jobs market.”

To read the entire study, click here.

To view the appendix to the study, click here.

REPORT: Big Wind’s Bogus Jobs Numbers

Industry’s ‘Inflated Numbers’ and ‘Erroneous Conclusions’ Misled Washington Lawmakers to Gain Extension of Production Tax Credit

WASHINGTON, D.C. – Claims by the wind industry that another year-long extension of the Production Tax Credit (PTC) would create American jobs are based on “self-serving industry interviews and unsupported wind capacity forecasts that have no credibility,” according to a study released today by the American Energy Alliance (AEA) and the National Center for Public Policy Research (NCPPR). Additionally, the report finds that the analysis conducted for the wind industry by Chicago-based Navigant Consulting significantly overestimated the number of jobs that would be lost as a result of scheduled expiration of the PTC on Dec. 31, 2012.  Congress voted to extend the subsidy at a cost of over $12 billion during last year’s fiscal cliff negotiations.

The study, “Inflated Numbers; Erroneous Conclusions: The Navigant Wind Jobs Report,” was conducted by Charles Cicchetti, Ph.D, a senior advisor to the Pacific Economics Group and Navigant. The study lays bare the macroeconomic distortions and faulty modeling that the wind industry used to justify continued payments of its taxpayer-funded corporate welfare.

According to the Navigant study, the U.S. economy stood to lose 37,000 jobs in 2013 if the PTC were to have expired. Yet Dr. Cicchetti’s analysis demonstrates that Navigant misapplied models used to substantiate this claim, with the result that potential direct job losses were inflated by at least 100 percent in the key states that were reviewed. As a result, lawmakers and the general public were misled to believe that an extension of the PTC would strengthen the U.S. economy. Regarding the Navigant study, Dr. Cicchetti concludes, “The Report’s resulting job loss numbers are meaningless and should not be used to justify spending billions of dollars in taxpayer money to extend an unneeded subsidy for the wind industry.”

“This study confirms what we have known all along: the PTC is bad policy built on faulty economic analysis that results in a net loss for the U.S. economy,” said AEA President Thomas Pyle. “A sounder approach would be to let the free market determine winners and losers among energy sources, instead of Washington doling out billions of dollars to prop up Big Wind at great loss to the federal treasury and the U.S. jobs market.”

“Congress blundered badly when, in the deal to avoid the so-called ‘fiscal cliff,’ it caved to special interests and pressure from the wind industry for another extension of the PTC,” noted NCPPR Senior Fellow Bonner Cohen. “No amount of subsidies over whatever period of time will every make wind power competitive against affordable, reliable, and plentiful sources of electricity generation. The PTC leads to a gross misallocation of resources in the public and private sectors. In the end, taxpayers lose. Workers lose. The economy as a whole loses.”

The study’s key findings include:

  • When calculating potential job losses, Navigant used the wind industry’s self-serving, inflated forecasts for wind capacity “lost” without the PTC, which exceeded the federal government’s non-biased forecasts by as much as 55%.
  • Navigant’s analysis also incorrectly applied one model to determine direct job losses in key states, inflating them by at least 100%. Incorrectly applying another model resulted in questionable multipliers that inflated job loss estimates by at least another 72%.
  • The Navigant report narrowly focuses on supposed jobs lost in the wind industry if the PTC isn’t extended but completely ignores the U.S. economy as a whole. If new generating capacity is needed and jobs are the measure, other sources of electricity, such as coal, nuclear power or natural gas, would create more direct jobs than wind power for an equal amount of new generating capacity. In a separate May 2010 report, Navigant actually acknowledged that wind power produces fewer jobs, direct and indirect, than other sources of electricity for an equivalent amount of capacity.
  • Subsidizing wind is very costly per job created. A one-year PTC extension could cost as much as a staggering $4.8 million for each direct wind manufacturing and construction job added.

To read the entire study, click here.

About the Wind Production Tax Credit:

The PTC was first enacted in 1992 to jumpstart a nascent wind industry and it currently provides wind producers a subsidy of $22 per megawatt-hour (MWh) of energy generated.  It was temporarily extended early this year as part of the fiscal cliff deal with a new provision that allows wind energy projects that begin construction in 2013 to qualify for the credit.  Extending the PTC cost American taxpayers more than $12 billion dollars, according to the Congressional Joint Committee on Taxation.

About The American Energy Alliance
Founded in May 2008, the American Energy Alliance is a not-for-profit organization that engages in grassroots public policy advocacy and debate concerning energy and environmental policies. AEA believes that freely-functioning energy markets provide the most efficient and effective solutions to today’s global energy and environmental challenges and, as such, are critical to the well-being of individuals and society. AEA believes that government policies should be predictable, simple and technology neutral.

About The National Center for Public Policy Research
The National Center for Public Policy Research is a not-for-profit communications and research foundation supportive of a strong national defense and dedicated to providing free market solutions to today’s many public policy problems. Founded in 1982, NCPPR has provided top-flight research and communications operations for more than three decades, earning a solid reputation for its defense of private land ownership, sound energy and economic policies, and conservative approaches to regulatory reform. The National Center has never requested nor received funding from the federal government nor any state nor foreign government.

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In the Pipeline: 3/6/13

Nooooooooooooo!!!!!!!!!

 

The wind crew is bitterly clinging to its tax credits. They probably don’t have religion or guns. Politico (3/5/13) reports: “Two months after Congress rescued it, the wind industry’s crucial tax credit is back on the countdown to extinction. The fiscal cliff deal revived the wind-production tax credit on New Year’s Day just hours after it legally expired. Industry leaders say the extension saved thousands of jobs and will support the installation of thousands of megawatts of power this year… But the credit is due to expire again Dec. 31, and opponents are just as eager as before to see it die. The industry wants a long-term extension, but that has near zero odds with the Capitol consumed with talk of budget pain.”

 

Obama taking credit for the increase in domestic oil and gas production in like Ike Turner taking credit for Tina’s success. Energy & Commerce (3/5/13) reports: “The nonpartisan Congressional Research Services has issued a new report showing the effects of the Obama administration’s “all-of-the-above but nothing-from-below” energy policy on oil and gas production on federal lands. While U.S oil production is at its highest levels in two decades, evidence suggests this increase is largely a result of production on state and private lands where the federal government plays little or no role. CRS found that ALL the increases in production since 2007 have taken place on non-federal lands. The report reveals a similar story for natural gas. Since 2007, natural gas production on federal lands fell by 33 percent while production on state and private lands grew by 40 percent.”

 

The energy debate isn’t just about science and engineering, it’s about who has the right to control your life. Commentary (3/5/13) reports: “It doesn’t matter whether you are in full agreement with the president on this issue or buy into only a part of it or none at all. The question before the nation here is whether the executive branch can or should give itself the power to run roughshod over Congress and unilaterally implement new regulations that will give the force of law to the president’s climate beliefs. If McCarthy and Moniz intend to use their regulating power to redraw the laws concerning fossil fuel emissions or the ability to explore or drill for new energy sources, then the result will be as much of a Constitutional crisis as anything else.”

 

Peak oil is so old, she knew Burger King when he was still a Prince. CNN (3/5/13) reports: “Predictions that the world would imminently ‘run out of oil’ have been worrying oil consumers since at least the 1920s. They always prove wrong, for reasons explained by the great oil economist M. A. Adelman after the last ‘oil shortage’ in the 1970s. Oil reserves, Adelman writes, ‘are no gift of nature. They (are) a growth of knowledge, paid for by heavy investment’.”

Everybody Agrees that CAFE Standards Are Inefficient

Often in the policy debates on government regulations, you will have free-market people decrying inefficient impediments to business, while the other side will tout the (alleged) benefits to the environment or whatever the social goal happens to be. Yet a new MIT study—from a group that is very sympathetic to carbon regulatory policies—documents how inefficient vehicle fuel efficiency (CAFE) standards are. Even if one buys into the premise that the government should be forcing businesses and consumers to alter their behavior in the name of fighting climate change (or “oil dependency”), it is still an unavoidable conclusion that CAFE standards are absurd. There are far cheaper ways to achieve their alleged objective.

The MIT study is titled, “Should a vehicle fuel economy standard be combined with an economy-wide greenhouse gas emissions constraint? Implications for energy and climate policy in the United States.” It is part of the MIT Joint Program on the Science and Policy of Global Change, which is not exactly a bastion of rabid right-wingers. Even so, check out their paper’s abstract:

The United States has adopted fuel economy standards that require increases in the on-road efficiency of new passenger vehicles, with the goal of reducing petroleum use and (more recently) greenhouse gas (GHG) emissions. Understanding the cost and effectiveness of fuel economy standards, alone and in combination with economy-wide policies that constrain GHG emissions, is essential to inform coordinated design of future climate and energy policy. We use a computable general equilibrium model…to investigate the effect of combining a fuel economy standard with an economy-wide GHG emissions constraint in the United States. First, a fuel economy standard is shown to be at least six to fourteen times less cost effective than a price instrument (fuel tax) when targeting an identical reduction in cumulative gasoline use. Second, when combined with a cap-and-trade (CAT) policy, a binding fuel economy standard increases the cost of meeting the GHG emissions constraint by forcing expensive reductions in passenger vehicle gasoline use, displacing more cost-effective abatement opportunities. …This analysis underscores the potentially large costs of a fuel economy standard relative to alternative policies aimed at reducing petroleum use and GHG emissions. It further emphasizes the need to consider sensitivity to vehicle technology and alternative fuel availability and costs as well as economy-wide responses when forecasting the energy, environmental, and economic outcomes of policy combinations. [Bold added.]

Stripped of the jargon, the paper uses an MIT model, with all the bells and whistles, to conclude that vehicle fuel efficiency standards are an arbitrary, blunt instrument that harm consumers far more than is necessary to achieve a given environmental objective.

Now to be sure, the MIT authors aren’t recommending laissez-faire. They think they’ve got a different policy mix of nudges and sharp elbows from the federal government, to make the energy sector juuuuuust right.

Even so, it’s useful to point out that in the real world, the government implements incredibly inefficient and costly regulations, even according to the proponents of top-down regulation. Put in different words, CAFE regulations are so awful on a cost/benefit test, that not even the fans of anti-carbon policies are willing to defend them.

In the Pipeline: 3/5/13

I wonder if they are going to mention the years that she has spent not responding to document and other requests from Senators and Congressmen. Or the data that she promised to provide (but did not) on the utility MACT or CSAPR. Or her role in the creation of RGGI. Or her involvement in NESCAUM and the low carbon fuel standard. I bet not. But the quote from Jeff Holmstead is awesome all by itself. Standwithgina.com (3/13) reports: “‘[McCarthy] is willing to sit down and listen and understand the issues people have with EPA’s regulations.’ Jeffrey Holmstead, Former Bush-Appointed EPA Assistant Administrator”

 

Let’s review. For the carbon tax, pretty much everyone on the left side of the political spectrum along with some fellow traveling companies, a former free market think tank, and a handful of former Bush appointees. Against?  The Institute for Energy Research and some of our very tough friends (whose names we publish every Friday. Unwilling to say (one way or the other)? API. AGA. The Chamber of Commerce. Washington Post (3/4/13) reports: “Instead of indulging in distractions, Mr. Obama and his friends in the environmental movement should push for policies that could make a significant difference by cutting demand for carbon-intensive fuels. As we argued Sunday, a carbon tax is a cause that really is worth fighting for.”

 

Darren is a solid reporter. Did he just acknowledge that Obama has centralized more power in the White House and taken away decision-making authority from the agencies? Wonder how that made it past the editors. Politico (3/5/13) reports: “Environmentalists had high hopes four years ago when President Barack Obama loaded his administration’s top ranks with Clinton-era energy experts, green-job gurus and even a Nobel laureate… But that ‘Green Dream Team’ — which struggled to sculpt new policies on air and water pollution, clean energy and climate change — has turned over the keys to what is more of a B team in the second term.”

 

Just sayin’: Each 10x increase in CO2 emissions correlates to 10-year increase in life expectancy. Coyote Blog (3/4/13) reports: “The ultimate argument I get to my climate talk, when all other opposition fails, is that the precautionary principle should rule for CO2.  By their interpretation, this means that we should do everything possible to abate CO2 even if the risk of catastrophe is minor since the magnitude of the potential catastrophe is so great… The problem is that this presupposes there are no harms, or opportunity costs, on the other end of the scale.  In fact, while CO2 may have only a small chance of catastrophe, Bill McKibben’s desire to reduce fossil fuel use by 95% has a near certain probability of gutting the world economy and locking billions into poverty.  Here is one illustration I just crafted for my new presentation.”

 

They’ve been circling Kish in the ring for years, but when you’re cut from his kind of cloth, you don’t put up with no Tonya Harding funny business. Forbes (3/3/13) reports: “This interview with Dan Kish, Senior Vice President of the Institute for Energy Research in Washington, D.C., reveals that regardless of abundance and necessity, the Obama administration continues to justify new regulations that restrict access to America’s oil and gas reserves… ‘It’s very apparent that the real intent is to make oil and gas more expensive in order to make the heavily subsidized, unreliable and costly  ”renewable” energy programs they are pushing more cost-competitive. This is the Tonya Harding approach to energy… break your opponent’s kneecap if you can’t win fair and square… This blatant playing-field-tipping strategy, where government picks winners and losers, permeates virtually all aspects of the Obama administration’s energy policy. We don’t have an energy problem, Larry.  We have a government problem…’”

 

Speaking of no funny business, this is happening on NPR at 2pm ET today: To the Point with Warren Olney.