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AEA Study: Removing Big Wind’s ‘Training Wheels’

October 31, 2012 by Benjamin Cole 6 Comments

New Study Finds Federal Wind Production Tax Credit (PTC) No Longer Needed to Drive Wind Generation Development
Mature Wind Industry Can Compete On Its Own; Taxpayer-funded Welfare-For-Wind Must End

WASHINGTON D.C. – A new report released today by the American Energy Alliance (AEA) concludes that wind energy is a mature industry whose growth has rendered the federal wind Production Tax Credit (PTC) an obsolete government hand-out that should be allowed to expire.

The AEA-commissioned study, “Removing Big Wind’s Training Wheels: The Case for Ending the Federal Production Tax Credit,” documents the explosive growth of wind generation as well as the favorable outlook for future wind generation development as a result of Renewable Portfolio Standards (RPS) – not the PTC. Conducted by David Dismukes, associate director and professor at the Louisiana State University Center for Energy Studies, the study finds that wind generation now comprises 50,000 megawatts (MW) of electricity capacity in the United States — a five-fold increase since 2006 — and will continue to grow even without the renewal of the PTC. The PTC therefore only serves to tip the scale in favor of a well-established industry, giving wind an politically-determined advantage over other types of generation.

Background

The PTC was first enacted in 1992 and currently provides wind producers a subsidy of $22 per megawatt-hour (MWh) of energy generated. It has been extended seven times and is scheduled to expire under current law on December 31, 2012. Congress is now debating another extension of the credit. The Joint Committee on Taxation estimates that a one-year extension would cost taxpayers $12.1 billion.

“When you strip away all the rhetoric, the real issue is that wind is a mature industry whose growth is being fueled by aggressive RPS standards and is no longer in need of training wheels,” said Dr. Dismukes. “The PTC is a costly and inefficient subsidy that is clearly no longer necessary.”

“The government needs to stop caving to powerful wind lobbyists and establishing policies that pick winners and losers in the energy marketplace. The wind PTC has run its course, and taxpayers must no longer be forced to subsidize a well-established wind industry that offers no substantive proposal for a phase-out of decades-old energy welfare,” said AEA President Thomas Pyle.

Findings

The Dismukes study finds that widespread adoption of state RPS mandates established a substantial guaranteed market for wind; one that did not exist when the PTC was enacted in 1992. Although a few states adopted RPS policies as early as the mid to late 1990s, most states enacted them between 2004 and 2007, which is when a substantial increase in wind energy capacity development occurred, as documented in the report. To date, wind generation accounts for 90% of all new renewable resources developed under these non-federal programs.

Additionally, RPS requirements are expected to grow from about 50,000 MW in 2010 to almost 200,000 MW by 2030, according to the report. If wind maintains the same 90% market share it holds in today’s renewable energy generation mix, merely fulfilling future RPS requirements guarantees wind producers a market for almost 130 GW of additional capacity through 2030. As such, even post-federal PTC expiration, the outlook for future wind generation development continues to be exceptionally favorable.

The report also highlights forecasts from the U.S. Energy Information Administration which find that even if the PTC and other incentives are eliminated, renewable generation will still be on track to rise from 500 billion kilowatt hours in 2011 to approximately 750 billion kilowatt hours by 2035, amounting to a 50% increase in wind generation.

Additional key findings include:

Standards & Poor’s recently estimated as much as $150 billion in new renewable energy investment opportunities over the next 10 years even if the PTC is not renewed, driven in large part by opportunities in wind energy development. Thus, offering billions of dollars in federal tax subsidies to wind generation, in addition to mandated state renewable subsidies, allows wind generators to “double dip,” and reflects a gross waste of limited fiscal resources.

Over 50% of wind capacity is located in only five states; over 75% is located in just 11 states. The federal PTC, however, unfairly shifts wind energy development costs from taxpayers in the RPS states to those with little or no wind development, forcing taxpayers across the country to support an industry concentrated in only a few states. In fact, under the PTC, taxpayers in the states without RPS mandates pay approximately 24% of the PTC funding, even though they receive no direct benefit.

The “one-size-fits-all” PTC is an inefficient and expensive means of supporting wind generation that fails to recognize the industry’s heterogeneity and operational differences, and grossly wastes limited fiscal resources by over-subsidizing many projects and driving over-development.

To download a copy of the full report, click here.

About The American Energy Alliance

Founded in May, 2008, The American Energy Alliance (AEA) 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.

Filed Under: Press Releases Tagged With: AWEA, crony capitalism, production tax credit, renewable mandates, wind energy, wind ptc, wind welfare

In the Pipeline: 10/31/12

October 31, 2012 by AEA Leave a Comment

You know what? The AEA Nation thinks Heather Wilson gets it, too. Folks, you must read this letter. And if you are lucky enough to live in New Mexico, you get to choose between two very distinct visions for the direction of our nation. That’s kind of cool. New Mexico Watch Dog (10/29/12) reports: “The Navajo Nation Council has declared its support for Heather Wilson for U.S. Senate. An October 17, 2012, letter signed by Johnny Naize, the Speaker of the Navajo Nation Council, while not explicitly calling upon tribal members to vote for Wilson, sends a clear message that the leaders of the largest Native American tribe in the country support her over Democratic opponent, Rep. Martin Heinrich. They left nothing to guess when they wrote to Wilson, “Our Nation and our Navajo people are in dire need of leaders such as you who can advocate for sensible solutions and sustainable economic development.””

You had to figure it was not going to take long for the vultures to descend and try to turn human tragedy into political gain. Politico(10/30/12) reports: “Environmental activist Bill McKibben says Sandy should be a “wake-up call” to elected officials about the effects of climate change… “This is an absolutely unprecedented storm,” he said Monday evening. And it comes during the warmest year in recorded history in the United States — dating back to the late 19th century — and one in which many areas were affected by a serious drought.”

We kind of dig this. GlobalWarming.org (10/29/12) reports: “In Wind Intermittency and the Production Tax Credit: A High Cost Subsidy for Low Value Power, economist Jonathan Lesser finds that “the vast majority of the Nation’s wind resources fail to produce any electricity when our customers need it most.””

We are moving to Denmark. Renewable Energy World (10/29/12) reports: “The Danish government won’t provide direct support to Vestas Wind Systems A/S should the world’s biggest maker of wind turbines need a bailout to stay afloat… Aarhus, Denmark-based Vestas, which has been hurt by higher-than-budgeted costs to develop its V112 turbine and cuts in green energy subsidies, said in July it agreed with its banks to defer a so-called test of financial covenants, delaying loan payments after losses eroded its cash flow. The government is now saying it won’t step in to bridge any periods of financial distress at the company to prevent it going bankrupt.”

Filed Under: Blog Tagged With: Green Energy, green subsidies, Heather Wilson, production tax credit

In the Pipeline: 10/30/12

October 30, 2012 by AEA Leave a Comment

Before you got out of bed this morning, these men stuck their heads between two rocks, 500 feet beneath the surface, to deliver the abundant, affordable, and reliable energy that powers our way of life. So thank a coal miner when you plunk down five bucks for your grande, skinny, half-caf, soy Frappuccino on your way to the office.

Last week we commented about this meeting. We intended to let it speak for itself, but AEI went and tried to have it both ways – yet again. If this is really “an academic meeting” and “not evidence that AEI supports a carbon tax,” then why are there no opponents of a carbon tax on the agenda? While it is increasingly clear that AEI has jumped the shark, we will not give up. We are holding a place for Arthur Brooks on our list of think tank heads who are opposed to a carbon tax. Come home, Arthur, come home. The Hill (10/26/12) reports: “A conservative think tank will host a forum next month on carbon tax proposals — and this time it’s on the record… The American Enterprise Institute is the venue for the Nov. 13 event on the economics of carbon taxes, which AEI is hosting with two other think tanks, the Brookings Institution and Resources for the Future, and the International Monetary Fund.”

We told you this would happen back in 1997 when Enron was celebrating the Kyoto Accord. Reuters (10/25/12) reports: “EU talks to agree tactics ahead of an international climate summit in Doha next month ended in disarray on Thursday, after coal-dependent Poland led opposition to more ambitious attempts to curb atmospheric pollution.”

Here’s what this article tells us: neither Glenn Hubbard nor Greg Mankiw should be allowed anywhere near public policy. And yet, they are going to be two of the most important people in a Romney Administration. Financial Times (10/29/12) reports: “Discussing the size of a carbon tax, rather than alternatives to it, would be a big step forward compared to where the public discussion is right now,” Hubbard wrote. “As judged on purely political terms, higher Pigovian taxes are a wacky idea. I have yet to see a major candidate for President endorse the concept….We can hope that in future elections the gap between the advice of the economic advisers and the advice of the political consultants will become a lot smaller.”

Of course the White House exerted pressure on DOE to sign off on these deals. This whole mania for expensive, unreliable energy was their creation. National Legal and Policy Center (10/29/12) reports: “The claim that the many beneficiaries (like Solyndra and Fisker Automotive) of President Obama’s green energy stimulus program received their millions of taxpayer dollars based on measurable metrics rather than political favoritism has always been undermined by the circumstantial evidence, but documents obtained by Complete Colorado indicate the White House applied direct pressure to its own Department of Energy to reward (another) one of its allies.”

We have discussed this before, but it is worth another visit. The long and short is that the State Department could not find resources or time to save American lives in Libya, but did manage to find time and resources to install charging stations for electric vehicles in Austria. So at least the parents of the dead can take solace in the idea that diplomats in Vienna can drive around in expensive, unreliable cars. Washington Times (10/10/12) reports: “In a May 3, 2012, email, the State Department denied a request by a group of Special Forces assigned to protect the U.S. embassy in Libya to continue their use of a DC- 3 airplane for security operations throughout the country… The subject line of the email, on which slain Ambassador Chris Stevens was copied, read: “Termination of Tripoli DC-3 Support.”… Four days later, on May 7, the State Department authorized the U.S. embassy in Vienna to purchase a $108,000 electric vehicle charging station for the embassy motor pool’s new Chevrolet Volts.”

Filed Under: Blog Tagged With: carbon tax, climate change, coal, coal miners, department of energy, DOE, electric cars, Obama

In the Pipeline: 10/29/12

October 29, 2012 by AEA Leave a Comment

What’s holding electric cars back is that they are inferior, expensive products. How many superior, affordable products need government support? National Journal (10/25/12) reports: “Consider auto sales. Instead of looking at the sales of electric and plug-in hybrid electric vehicles as a percentage of the total auto sales, the focus should be on the incredible growth in sales this year in this sector.”

$16 trillion in debt, and the government claims the private sector is recklessly abusing resources. How do these people sleep at night? IER (10/26/12) reports: “Markey, who is Ranking Member of the House Natural Resources Committee, argues that the “Use it or Lose It” report shows that new energy-rich areas like Alaska should not be opened for drilling, because oil and gas companies already have enough idle leases that are not being utilized. The report, however, fails to make a key distinction: that some leases are more valuable than others, and that the most valuable areas of the federal land estate all aren’t being offered for lease. An analysis of the report’s central claims is below.”

All these people want to do is control our lives. Once they have that control, it’s both amusing and frightening to realize they have nothing else on the to-do list. NY Post (10/26/12) reports: “Nationally, environmental activists push the expansion of renewable energy — solar, wind, etc. But when industries work to implement those initiatives at the community level, local greens scream at the impact on their community; they’d rather keep the land as it is.

This man should be President. Environment and Public Works (10/26/12) reports: “I am truly honored that yet another radical environmental group has given me an award for my efforts to put a stop to President Obama’s far-left global warming agenda,” Senator Inhofe said. “The Center for Biological Diversity should be pleased to know that my award will have a prominent place in my office, along with all the others I have been proud to receive over the years. As the top Republican on the Senate Committee on Environment and Public Works, I have worked every day to expose the radical left’s extremist agenda aimed at ending American production of oil, gas, and coal because of the devastating consequences it will have on the American people.

Hmmmm. E&ENews (10/26/12) reports: “But Vitter said in an interview yesterday that, while he’s not trying to get ahead of Election Day, he’s also not comfortable with the idea of Connaughton playing any major environmental or energy role in a Romney administration… “I would have very serious concerns with Jim Connaughton being named to any significant position,” Vitter said. “And if it were a Senate-confirmed position, I would expect to have to oppose his nomination.””

But apparently the wind production tax credit is still a really good idea. Energy & Commerce (10/26/12) reports: “Rep. Cory Gardner (R-CO) appeared on Fox News today to discuss the ongoing investigations into Colorado solar panel manufacturer Abound Solar – the now-bankrupt company that was awarded a $400 million loan guarantee from the Department of Energy. Abound Solar, which is located in Gardner’s congressional district, is now under investigation by the Weld County district attorney for financial misrepresentation and consumer fraud. Whistleblowers have come forward and exposed that the company was falsifying documents and failing to disclose product flaws to investors and customers. Describing the problems with Abound’s panels, Gardner quoted a whistleblower employee who stated, “The solar panels worked fine as long as you didn’t put them in the sun.””

Actually, Governor Romney was repeating what he has been saying for a while. Tax credits for mature industries (like wind that has been around for more than 100 years) should be phased out. Energy Guardian (10/16/12) reports: “In what was billed by his campaign as a major economic speech delivered in Ames, Iowa, Romney appeared to back away from his previous stance against tax incentives for the wind industry, which is lobbying to extend the Production Tax Credit. “We will support nuclear and renewables, but phase out subsidies once an industry is on its feet,” Romney said.”

Filed Under: Blog Tagged With: Abound Solar, gas, Inhofe, leases, oil, production tax credit, renewable energy

In the Pipeline: 10/26/12

October 26, 2012 by AEA Leave a Comment

Whether you’re a high school student, a union guy working at the refinery, or a United States Senator, the bus is a symbol of opportunity and a better energy future for us all.

Senator Jim DeMint signs the American Products and Power bus.

Why am I not surprised that EPA does not have a definition of “savings/cost avoidances?” Washington Examiner (10/24/12) reports: “Environmental Protection Agency officials will spend in excess of $8 billion this year, but they will apparently do so without a working definition of “savings/cost avoidances” or a way of calculating if they’ve achieved any,” according to the agency’s Inspector-General.”

Freedom. Opportunity. Enterprise. Carbon Taxes. At least now the meetings are out in the open. Let the moral case for the largest, most regressive tax increase in American history begin! AEI (October 2012) reports: “The pros and cons of introducing a carbon tax in the US are the topic of many spirited debates, yet discussion of the consequences from alternative tax designs remains largely confined to academia… In an effort to shed more light on this topic and its budgetary impact, AEI, the Climate and Energy Economics Project at the Brookings Institution, the International Monetary Fund, and Resources for the Future are cohosting a conference to discuss ideas for US carbon tax design and options for the potential use of carbon tax revenues.”

I don’t get it. Why isn’t Sachs headlining AEI’s big coming out of the closet carbon tax festival? The Australian (10/25/12) reports: “But Jeffrey Sachs, a professor at Columbia University and adviser to the United Nations Secretary General on its Millennium Development Goals, says Australia’s implementation of the tax has set a good example for the world… Sachs, Director of Columbia’s Earth Institute, warned on Thursday against calls for the tax to be replaced by a tradable permit system by carbon emitters.”

I wonder if GAO is going to think about which industry sectors are net taxpayers and which pay no taxes (net) to the federal government. The Hill (10/25/12) reports: “Waxman is asking congressional auditors to broaden a study requested by Committee Chairman Rep. Fred Upton (R-Mich.), arguing that Upton’s proposal would allow billions of dollars in taxpayer support for oil companies to escape review.”

Marlo Lewis is a stone cold killer. Forbes (10/25/12) reports: “The only thing Republicans would gain from destroying their bona fides as the anti-tax, pro-energy party is faint and fleeting praise from cocktail party ‘progressives’ and the liberal media. If Republicans consider that a good bargain, they deserve to be called the stupid party.”

We are informally keeping track of which think tank chiefs are opposed to a carbon tax. The list to date follows. If your guy is not on the list, it is because he either favors a carbon tax, wants to retain the option of favoring a carbon tax at some point in the future, or has yet to contact us.

Tom Pyle, American Energy Alliance / Institute for Energy Research
Myron Ebell, Freedom Action
Phil Kerpen, American Commitment
Fred Smith, 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

Filed Under: Blog Tagged With: carbon tax, Environmental Protection Agency, EPA, Jim Demint

McDermott’s Carbon Tax Bill Is Worst of All Possible Worlds

October 24, 2012 by AEA 2 Comments

An August analysis from Capital Alpha explores Rep. Jim McDermott’s carbon tax bill introduced late in the summer. The proposal calls for an initial $25 per ton tax on carbon, which quickly escalates to a capped fine of $525 (!) per ton by the year 2024. The Capital Alpha report is fairly evenhanded and speaks mostly of political trends, rather than endorsing or criticizing the proposal. Yet in so doing, the report fails to point out the numerous ways in which the McDermott bill would be economically devastating.

The Capital Alpha analysts summarize the most obvious harm upfront when they write:

McDermott’s bill establishes a fixed carbon price that escalates rapidly from a minimum of $25 per metric ton…in 2015 to…$525 per ton in 2024. At this price, the carbon tax on a gallon of gasoline would be $5.20…the tax on average residential use of gas-fired electricity for one year would be $1131.90, the tax on heating a home with oil for one winter would be $3262.38, and revenues raised for the federal government in 2024…would be $2.4 trillion.

The man on the street can understand that the above figures are scandalous, but it’s interesting to note that standard economic models of climate change also indicate that McDermott’s proposal is a cure worse than the disease. Indeed, perhaps the world’s expert on the subject—and a strong supporter of a carbon tax—William Nordhaus has argued (as of the 2007 runs of his computer models) that the “optimal” carbon tax should be a mere $53/ton in the year 2025. A carbon tax of $525 represents an incredible overkill—even if we stipulate the “consensus” physical science and mainstream economic modeling of climate change. McDermott’s proposal would cause literally many trillions of dollars of damage to the economy, in excess of the environmental gains that the mainstream scientists discuss. (See Tables 3 and 4 in this paper discussing Nordhaus’ respected model.)

Yet it gets worse. McDermott and even the Capital Alpha analysts are touting the claim that because some of the new carbon tax’s revenue would be used to reduce the corporate income tax, that therefore it won’t “hurt the economy.” This claim is wrong for several reasons.

First, McDermott isn’t going to “recycle” all of the funds—he explicitly calls for 25% of the revenues to be used for “deficit reduction.” Think about what that means. The government is going to take in more money via a carbon tax, and some of it is going to be used to make the deficit smaller than it otherwise would be. Simply put, the government is going to spend 25% of the carbon tax on its various programs. It is a tax hike pure and simple, because the government has been spending more than it takes in through other taxes. Recall that by their own estimate, the Capital Alpha analysts think the government might take in some $2.4 trillion (using a static analysis which doesn’t account for the reduction in driving, home heating, etc. in response to the immense new tax). A quarter of that is $600 billion, just in the year 2024 alone. Even by McDermott’s own promises, that is a net tax increase. This will hardly promote economic growth or ease the burden on corporations.

Second, even of the remaining 75% of the funds, the McDermott plan doesn’t call for them all to be used to reduce other taxes. Instead, they would be sent directly to Americans in order to ease the burden of higher energy prices. Although this sounds equivalent to lowering taxes, it isn’t. The distortions caused by taxes on corporations and individuals go above and beyond the mere dollars extracted. By reducing the incentive to earn income in the first place, a punitive tax code discourages productive activity. By sending a lump-sum check to taxpayers, while keeping the marginal rates on other taxes the same, the supply-side boost to the economy is mitigated even further.

Finally, even if 100% of the carbon tax revenues were devoted dollar-for-dollar to reducing other taxes, the best economic analysis argues that there would be a net drag on the economy. Proponents could argue that the environmental benefits outweighed the loss in conventional economic growth, but McDermott and analysts of his proposal should stop claiming that it is a win-win for the environment and the economy. On the contrary, it is a clear lose for jobs, economic growth, and poorer households who suffer the brunt of higher energy prices.

In conclusion, Jim McDermott’s proposed carbon tax flies in the face of the standard results in the economics of climate change. Even supporters of a carbon tax—at least those familiar with the literature—would have a hard time justifying the incredibly aggressive tax rate in the bill. Technical issues aside, it would be very naïve to take the bill’s proponents seriously when they claim the funds will be used to reduce other taxes, or that the government won’t ramp up its spending because of the new money.

Filed Under: News, Products and Power Tagged With: cap and trade, Capital Alpha, carbon emissions, carbon tax, climate change, Energy prices, gas prices, government revenue, Jim McDermot, William Nordhaus

In the Pipeline: 10/24/12

October 24, 2012 by AEA Leave a Comment

We have been preaching this gospel for some time. So have the folks at House Energy and Commerce. Energy & Commerce (10/23/12) reports: “Unconventional oil and gas production could support up to 3.5 million jobs by 2035 according to a new study released today by IHS Global Insight. This new study, America’s New Energy Future: The Unconventional Oil and Gas Revolution and the Economy, complements previous IHS research on the economic impacts of unconventional oil and gas production made possible by hydraulic fracturing technology. In addition to its job creation potential, the report finds shale energy production will help boost government revenues, reduce chronic deficits, and help revive American manufacturing.”

Their carefully crafted myth of scarcity is about to completely unravel. Podesta, Browner, Gore, Pope, McKibbon, Weiss, Et. al. will certainly blow a gasket when the U.S. overtakes Saudi Arabia in oil production. And we’re not even drilling on federal lands at the moment. FuelFix (10/23/12) reports: “U.S. oil output is surging so fast that the United States could soon overtake Saudi Arabia as the world’s biggest producer.”

Let’s make it simple. The Obama crew, through regulation, is impairing assets in the coal industry – railroads, mines, power plants. The utility MACT has lots of costs, and just about no benefits associated with reducing mercury. So when the President tells you he loves the coal industry, take another look at the record. That is all. USAToday (10/24/12) reports: “Coal advocates say the Obama administration is pursuing costly new regulations on mines and on power plants that burn coal will be a devastating blow to the industry… “If there’s less coal being demanded, especially certain types of coal, that certain jobs are required for, then you are going to reduce” mine employment, said Dan Kish, senior vice president of the Institute for Energy Research.”

Think about this when we start talking about coal exports next year. We can either export our products or our people. It is just that simple. WSJ (10/23/12) reports: “Charles Stella has struck blue-collar gold: a mining-industry job in Western Australia… The 31-year-old boilermaker from Pittsburgh is one of the relatively few American workers who have been picked to pluck and process minerals in such remote regions and under such demanding conditions that wages for even driving a truck have climbed north of six figures.”

We offer this because it is difficult to keep track of the failures. Green Corruption (10/20/12) reports: “UPDATE: New calculations, October 23, 2012: 23 bankrupt, 27 troubled, equals a new “Obama green-energy failure” list total of 50. At least $15 billion of “green” taxpayer money is either gone or still at risk, and the majority was funneled to Obama and Democrat cronies –– percentage of cronyism is hovering around 60% (29 of the 50), until I have time to dig further.”

We missed this last week. That is okay, because the writer missed the number one reason why people with a brain might oppose a carbon tax – it solves nothing. National Review (10/19/12) reports: “Jim’s arguments persuaded me that a carbon tax is not as attractive an idea as environmentalists tend to think, particularly in light of the compromises that would be involved in practice. Like David, however, I wouldn’t rule out a domestic carbon tax, though not for the reason he offers (i.e., to give a boost to green technology). Rather, I think a small carbon tax could be justified on public health grounds.”

Seriously? We can hardly wait for the depositions to start. Watts Up With That (10/23/12) reports: “Today, the case of Dr. Michael E. Mann vs. The National Review and The Competitive Enterprise Institute was filed in the Superior Court of the District of Columbia. Dr. Mann, a Professor and Director of the Earth System Science Center at Pennsylvania State University, has instituted this lawsuit against the two organizations, along with two of their authors, based upon their false and defamatory statements accusing him of academic fraud and comparing him to a convicted child molester, Jerry Sandusky.”

Filed Under: Blog Tagged With: carbon tax, coal, Cronyism, gas, Green Energy, Obama, oil, Unconventional oil and gas, Utility MACT

In the Pipeline: 10/23/12

October 23, 2012 by AEA Leave a Comment

It is very rare indeed when AEA thinks the Denver Post gets it right. Please read carefully, because it may never happen again. Denver Post(10/22/12) reports: “We can think of at least four major reasons why Longmont voters should reject Question 300, a ban on hydraulic fracturing within city limits… 1. The courts will almost certainly overrule it. As recently as 1992, the state high court said Greeley could not impose a “total ban on the drilling of any oil, gas, or hydrocarbon wells within the city limits.” Yet given modern practices, a ban on fracking is nearly equivalent to a total drilling ban.”

Speaking of Longmont, Colorado, it turns out it was founded by a bunch of rich guys from Chicago. And we thought it was just the proximity to Boulder that made them crazy. TimesCall.com (10/20/12) reports: “Opponents of Ballot Question 300, which asks Longmont voters to ban hydraulic fracturing and storage of waste in city limits, have a host of reasons for not supporting a fracking ban, including protecting the rights of mineral rights owners, the threat of multiple lawsuits and the costs to the city associated with them, the strength of protections provided by the city’s agreement with TOP Operating and that the city’s charter is not the place for such a ban.”

Guys like Rob probably make the guys over at a place like AWEA very nervous. Huffington Post (10/22/12) reports: “Just about everyone talks about energy efficiency. Well, energy-versus-energy dueling in Washington, D.C. is energy inefficiency on stilts. How about some political conservation instead? With government more restrained, voluntary consumer decisions would pick winners and losers. The massive D.C. energy money game would shut down. Surely this is a win-win for the 99 percent.”

This is the type of change we believe in.

For everyone who is worried about China, don’t be. They can be every bit as corrupt, ridiculous, and non-sensical as our government. Reuters (10/20/12) reports: “China is working on policies, including subsidies and easier access to the grid, to help its ailing solar power producers expand in the domestic market, the China Daily reported on Saturday, citing industry officials and government sources… The State Grid Corp, China’s largest state-owned utility, is considering giving its subsidiaries at city level the authority to approve solar power plants with less than 10,000 kilowatts of installed capacity to be connected to the grid, said deputy director Meng Xiangan.”

We offer this with no comment. Toronto Sun (10/21/12) reports: “The idea that windmills will save the Ontario economy is the kind of wisdom you might pick up down at the local hemp shop. But wherever the idea came from, it has yet to power Ontario forward. Unemployment in too many cities sits in double digits even as turbines spin in that wayward wind. But even if subsidized wind energy hasn’t powered the mighty Ontario job creation machine, it has been jet fuel for Ontario deficits. According to the McGuinty government’s own projections, Ontario’s debt will eclipse $300 billion sometime in the next three years.”

Well, this can’t be good news. Manufacturing.net (10//12) reports: “Siemens AG says it plans to give up its solar business and concentrate its renewable energy business on wind and hydroelectric power… The German industrial conglomerate said Monday that it’s in talks with possible buyers, but offered no details. It said the move is part of a wider effort to increase its productivity and efficiency.”

Filed Under: Blog Tagged With: fracking, hydraulic fracturing, solar, wind energy, windmills

PREBUTTAL: AEA FACT CHECKS 3RD PRESIDENTIAL DEBATE

October 22, 2012 by Johnny Russell Leave a Comment

WASHINGTON D.C. — The American Energy Alliance released today its first-ever prebuttal of a presidential debate, complete with analysis to arm American viewers with the facts necessary to sort through the rhetoric of tonight’s exchange between President Barack Obama and Governor Mitt Romney. Tonight’s debate — which focuses on foreign policy — is scheduled for 9PM EST, and will take place in Boca Raton, FL. Legendary CBS correspondent Bob Schieffer will moderate this third, and final presidential debate of the 2012 cycle.

Prebuttal Debate Facts:

Under Vladimir Putin, Russia is increasing its oil production to record levels due, in large part, to that country’s aggressive use of multi-zone hydraulic fracturing technologies to boost recovery rates in mature oil fields in Western Siberia. While Russian oil companies are using hydraulic fracturing to increase oil production, the United States — which pioneered the technological breakthroughs that led to this practice — is looking to lower oil and gas production and increase costs through new regulations on hydraulic fracturing. Click here to read more.

The United States imported an average of 869 thousand barrels of oil per day from Venezuela during the first 6 months of this year. Venezuela currently ranks fourth as supplier of U.S. oil imports. Revenues from Venezuelan exports are widely credited for Hugo Chavez’s recent re-election and low energy prices in that country. Meanwhile, President Obama has denied the Keystone XL pipeline, which could bring as much as 830 thousand barrels of oil to U.S. refineries along the Gulf Coast that currently service Venezuelan crude brought by tanker. Is America’s national interest better served by increased trade with Venezuela or Canada? Click here to read more.

The United States increased its dependence on oil imports from the Persian Gulf during the first five months of this year. In that time, U.S oil imports from the Persian Gulf increased by 33 percent compared with the same period in 2011. Oil imports from Saudi Arabia increased by 29 percent. The Persian Gulf’s share of U.S. oil imports is up 6 percentage points — from 15 percent for the first 5 months of last year to 21 percent for the first 5 months of this year. The U.S. could be almost independent of overseas oil within 15 years if positive steps were taken to utilize North American energy resources. Click here to read more.

As a way to reduce greenhouse gas (GHG) emissions at lower cost, the creators of the Kyoto Protocol devised the Clean Development Mechanism (CDM), which allows net GHG emissions to be reduced at a lower global cost by financing emissions reduction projects in developing countries. China has been the major beneficiary of the program, having received funding for projects that represent almost 64 percent of the registered Certified Emissions Reductions, totaling 619,078,094 metric tons of carbon dioxide annually. These CDM projects will help China towards its goal of producing 15 percent of its energy from “clean energy” by 2020. However, the CDM designers are not getting the reductions they have paid for because many of China’s wind units are not connected to the electricity grid. Click here to read more.

Coal consumption in the United States is contracting rapidly while growing as the fuel of choice in the global economy. The decline in U.S. coal consumption is offset by a large increase in Asia’s coal consumption, which accounted for all the net growth in 2011. China’s coal consumption grew 9.7 percent between 2010 and 2011, and India’s coal consumption increased 9.2 percent. China consumed 49 percent of the world’s coal supply in 2011. Coal has been used in the United States since 1850 and has been the work horse of the electric power sector for decades, generating about half of our nation’s electricity. But onerous regulations are harming the coal industry and shuttering coal-fired power plants across the country. Click here to read more.

Canadian production of oil sands in northern Alberta is expected to reach 4.1 million barrels a day by 2020, up from last year’s production level of 1.6 million barrels per day. The Canadian government understands that the regulatory review process is too convoluted, too long, and too expensive. Canada’s provincial governments, led by Alberta in the 1990s, cut taxes, slimmed government, and created a stable investment climate in order to encourage energy development. The United States is headed in the opposite direction. Click here to read more.

A key ingredient for windmills and battery-powered cars is rare earth elements. Currently, 97 percent of these essential resources are supplied by the Chinese. Two rare earths, dysprosium and neodymium, are needed for the generators and motors of electric vehicles and wind turbines. They have configurations of electrons orbiting their nuclei that result in very powerful magnetic properties, but the U.S. does not mine rare earth minerals despite having large deposits. Environmental regulations closed down the last rare of the United States’ rare earth mines. By 1999, 90 percent of rare earth elements needed by U.S. industry came from Chinese sources. Policy decisions in Washington that promote the use of these “green energy” sources without opening up domestic sources of rare earths necessary to make them only serve to make the U.S. more dependent on China. Click here to read more.

To read AEA’s 2012 Candidate Comparison Chart, click here.

Filed Under: Press Releases Tagged With: coal, debate, Energy Debate, Obama, Oil imports, oil sands, persian gulf, Romney, Saudi Arabia, windmills

Do Voters Want to Pay More For Energy?

October 22, 2012 by AEA Leave a Comment

A recent Grist article was elated over the apparent lack of voter knowledge on the Solyndra issue, and celebrates poll results showing Americans support “clean energy” initiatives. But ironically, the writer who is complaining about dishonesty himself quotes a Solyndra critic out of context to utterly change the meaning of his statement. Furthermore, the Grist article ignores all of the much stronger poll results showing that Americans aren’t willing to pay more for any of these pet projects.

First let’s see how the Grist writer distorts the words of a Solyndra critic:

When the solar manufacturing company Solyndra went bankrupt last September after receiving a $527 million loan guarantee, it sparked a politically motivated congressional investigation into the White House’s handling of the program — an “investigation” that critics admitted would “stop on election day.”

Now doesn’t that seem odd? A critic of the DOE loan program openly admits that the investigations into Solyndra would “stop on election day”? Even if this were merely a political issue, why would the politicians involved be so dumb as to say it openly?

In fairness, the Grist writer is simply repeating the inaccurate summary given by the E&E reporter on those fateful words. Here is the full context of the four-word phrase, taken from the E&E story linked by Grist:

In an interview after as he left yet another hearing in which Energy Secretary Steven Chu testified about the controversial loan program for clean energy companies, Rep. Jim Jordan of Ohio said that — smoking gun or not — Republicans are finding value in drawing attention to the more controversial aspects of the loan guarantee program.

“Our staff will continue to dig into it and see,” Jordan said. “But what I hope happens is we stop doing these kind of things … this whole cronyism approach to the marketplace.

“Ultimately, we’ll stop it on Election Day, hopefully. And bringing attention to these things helps the voters and citizens of the country make the kind of decision that I hope helps them as they evaluate who they are going to vote for in November.”

So although the E&E reporter (and the Grist writer) see Jim Jordan here “admitting” that the Solyndra hearings are merely an election ploy, in fact what he’s hoping will “stop” is “this whole cronyism approach to the marketplace.” In other words, Jordan was hoping that the voters would reject candidates who favored Solyndra-type programs. If Jordan were referring to the Republican-led investigation, he wouldn’t have said “hopefully”; he and his colleagues had the power to stop the investigation after Election Day for sure (no hoping involved), if it were merely a political stunt. So here the E&E reporter and Grist writer are inventing an unflattering interpretation of Jordan’s statements when that’s obviously not what he was saying.

But now on to the Grist writer’s enthusiasm for polls:

Despite the millions of dollars spent on Solyndra-related television spots over the last five months, polls show that a majority of American voters still don’t know about the company or are indifferent.

An NBC News/Wall Street Journal poll from early October showed that 58 percent of registered voters are unaware of Solyndra…

A day earlier, Hart Research released a poll…showing that 67 percent of registered voters are either indifferent about Solyndra or have heard nothing recently about the company. At the same time, 70 percent of voters said they would support more government incentives to help develop the solar industry.

In addition, an April poll from the Pew Research Center found that 52 percent of Americans believe that “alternatives” to fossil fuels are the most important energy priority for the country…

For starters, it is hardly news that many Americans don’t know about Solyndra; in a 2006 survey, 43% of young adults couldn’t find New York State on a map. If they were first given a brief outline of all the corruption and inefficiency in the Solyndra debacle, many more of them would surely object to the program.

Yet the fundamental problem with the Grist approach is that Americans famously support all sorts of feel-good government programs yet don’t want to actually pay for them. Consider a Washington Post / Stanford University poll [.pdf] conducted in June 2012. It found:

74% opposed “the federal government increasing taxes on electricity so people use less of it.”
71% opposed “the federal government increasing taxes on gasoline so people either drive less or buy cars that use less gas.”

Thus, it is clear that Americans are not willing to actually pay more for energy, even though this is what just about everybody recognizes will be necessary, in order to reduce the U.S. “carbon footprint” significantly in the near-future.

Americans need much more education on energy issues, it’s true. But the more they understand the waste of the DOE loan program, and the more they recognize that “alternative energy solutions” actually mean higher electricity and gas prices in practice, large majorities of them will reject government intervention and let the market choose.

Filed Under: News, Products and Power, Renewable Fuel Standard Tagged With: Cronyism, E&E News, Energy prices, Grist, political advertising, Solyndra, taxes on electricity, willingness to pay more for energy