Robert F. Kennedy Jr. launches “Not In My Backyard” campaign against…cape wind. As it turns out, wind is good enough for the Hicks in West Virginia, but not arugula eating Bostonians Wall Street Journal (7/18/11) reports:  Someone needs to tell the politicians in Boston and Washington that Cape Wind, the long-stalled plan to cover 25 square miles of pristine Nantucket Sound with 130 massive steel windmill-turbine towers, is a rip-off. That someone is most likely to be the newly enlightened electricity ratepayers—and voters—of Massachusetts….In the past few months it has become clearer than ever how much this giveaway of public property is going to cost them if Cape Wind is ever built. The numbers are staggering…Vermont wants to take its nuclear plant off line and replace it with clean, green power from HydroQuebec—power available to Massachusetts utilities—at a cost of six cents per kilowatt hour (kwh). Cape Wind electricity, by a conservative estimate and based on figures they filed with the state, comes in at 25 cents per kwh…In Massachusetts, the utility company NSTAR has fought off intense political pressure to commit to buying Cape Wind’s power when and if it becomes available. CEO Tom May has repeatedly said such a contract would impose far too large a burden on his ratepayers…Instead, and to meet the state’s requirements that utilities purchase 3.5% of their power from “green” sources, NSTAR has contracted with several far less expensive land-based wind-power providers…According to NSTAR’s own filings to certify compliance with the green-power requirement, these contracts come in at $111 million below market averages over the standard contract period of 15 years. The price of Cape Wind power comes in at well over $1 billion above market averages, according to Cape Wind’s own regulatory filings about its contract with National Grid, the utility company that has agreed to buy half its power…If the sea-based wind farm off Nantucket did begin operating, it is safe to deduce that National Grid customers would be getting fleeced compared to their NSTAR neighbors. The land-based wind alternatives that have sprouted up over the last decade have given utilities far cheaper alternatives to the unbuilt Cape Wind.

Plant Food: new study out that shows forests love carbon dioxide New York Times (7/18/11) reports: The world’s forests are magnificent palaces of biodiversity, teeming with wacky and wonderful creatures and plants that seem otherworldly. But they’re also something far more mundane although useful: they’re giant sponges, soaking up vast amounts of carbon dioxide…According to a study published online on Thursday by the journal Science, the world’s forests absorb 2.4 billion tons of carbon dioxide each year, or about one-third of the carbon dioxide released through the burning of fossil fuels…The lead author, Yude Pam, a research forester at the Forest Service, describes the study as the most comprehensive analysis of the global carbon budget to date. It shows that forests are a far more significant carbon sink than previously thought. At the same time, the report emphasizes the devastating effects of tropical deforestation and the need to protect trees that perform an enormous global service…Of the three different types of forests studied — boreal, temperate and tropical — the paper shows that tropical forests are the most dynamic in capturing carbon dioxide. During the 17-year study period, from 1990 to 2007, an international team of researchers found that established tropical forests alone captured about 1.2 billion tons of carbon dioxide a year, accounting for 55 percent of the total established carbon sink in forests…At the same time, however, deforestation in the developing world, most notably in Indonesia and Brazil, is releasing about three billion tons of carbon into the atmosphere each year, the researchers write. While this is offset somewhat by forest regrowth, which annually absorbs about 1.6 billion tons of carbon, over all, shifts in tropical land use, like clearing land for agriculture, is still emitting 1.3 billion tons annually…In an interview, Richard Birdsey, program manager at the Forest Service and another lead author of the paper, emphasized that what happens in the tropical forests “can make or break the carbon budget.”

You want to really sell homes in this economy? Tell the buyer the home is powered with expensive energy, by which we mean green power Bloomberg (7/18/11) reports: In the 20 years Ron Betenbough’s company has been building homes in west Texas, he’s always been willing to compete on price. Now, in a market crowded with cheap properties, he’s also touting environmentally friendly construction and energy-saving features….Betenbough Homes has been promoting all its houses as “green” since November, after winning certification under an industry-run program, Betenbough said in a telephone interview. The company didn’t raise prices, absorbing added costs of less than $500 on each of its units, which list for as low as $110,000 in some subdivisions…“We chalked it up to marketing,” said Betenbough, 70, who founded the Lubbock, Texas-based company with his son, Rick…As the housing slump enters its sixth year, small companies such as Betenbough and giants such as PulteGroup Inc., the largest U.S. homebuilder by revenue, are using green marketing as a weapon in the battle for buyers who have their pick of low- priced existing properties, including foreclosures. Builders are touting a confusing array of potentially profit-pinching environmental standards that have yet to prove effective in swaying consumers…To label its homes green, Betenbough Homes added a few features, such as low-flow toilets, and paid for inspections, allowing it to get the “bronze” level of certification from the National Association of Home Builders, the lowest of the Washington-based group’s four green ratings. The company had previously adopted design elements including energy-efficient windows, to block out heat and dust, and prefabricated roof trusses, which save money and create less waste.

How do you like them apples, Mr. President? Speculators bet that the Obama Administration will maintain its campaign against affordable and reliable energy, compounding global demand Bloomberg (7/15/11) reports: Heating oil and gasoline gained on speculation that the economic recovery will accelerate and demand will improve if an agreement is reached to raise the U.S. debt ceiling…Heating oil futures rose as much as 1 percent as President Barack Obama pressed congressional leaders to give him options for a deficit-cutting deal that lawmakers could support as part of raising the nation’s $14.3 trillion debt limit by an Aug. 2 deadline…“Once we get past this debt-ceiling crisis, demand as we go into the fourth quarter, will provide some support for the oil markets and gasoline in particular,” Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut…Heating oil for August delivery gained 2 cents, or 0.7 percent, to $3.1049 a gallon at 10:46 a.m. on the New York Mercantile Exchange. Futures slipped as much as 0.9 percent earlier in electronic trading…The U.S. House of Representatives plans a vote next week on a measure that would raise the government’s debt limit by $2.4 trillion, cut spending, cap government expenditures and propose a balanced-budget constitutional amendment, Republican lawmakers Sean Duffy and Billy Long said…Gasoline for August delivery rose 1.21 cents, or 0.4 percent, to $3.1369 a gallon on the exchange.

Finally, instead of putting our best minds and money behind switch grass biofuel, MIT says they want to study how to get more oil out of the ground Houston Chronicle (7/18/11) reports: The University of Texas and the Massachusetts Institute of Technology are seeking funding for a joint research center to study ways to produce oil and natural gas in challenging areas that may soon play a bigger role in the global energy mix…Representatives of the two schools met at MIT last week to hash out further details, but they have agreed on a broad framework for the proposed project, which they call the Research Center for Environmental Protection at Hydrocarbon Energy Production Frontiers, or REEF…The center, to be located at both UT’s campus in Austin and MIT’s in Cambridge, Mass., will tap experts from both schools in fields ranging from engineering and geosciences to law and public policy. The goal is to develop a series of guiding principles for responsible oil and gas exploration on frontiers such as ultradeep-water offshore areas, the Arctic and dense shale rock formations…”It builds on the undeniable and not-liked fact by some people that hydrocarbons are going to be with us for a long time, and to a large degree the increased supplies are going to come from risky environments,” said Chip Groat, director of the Center for International Energy and Environmental Policy at the University of Texas at Austin, who serves on a steering committee for the center…Once planning for the center is complete, the two schools will begin pitching oil companies and other potential sponsors, with the goal of having key portions of the center up and running by the end of the year, Groat said…The center, as it is envisioned, could require commitments of up to $100 million over five years, coming from multiple sponsors, he said…But its research would be independent…”We aren’t promising that everything we will find is exactly what they want to hear,” Groat said…The idea for the research center grew out of last year’s Gulf of Mexico disaster, which exposed risks of operating in the deep-water offshore areas. The blowout of BP’s Macondo well in mile-deep waters off Louisiana killed 11 workers and unleashed the nation’s worst oil spill.

The UK government in their infinite wisdom and knowledge of the economy has created an energy famine and poor people have been forced to make hard decisions AP (7/15/11) reports: One in five households in the UK were affected by fuel poverty in 2009 official figures showed on Friday with campaigners warning the situation will worsen as electricity and gas prices continue to rise…The number of UK households in fuel poverty rose from 4.5 million in 2008 to 5.5 million in 2009, the Department of Energy and Climate Change (Decc) figures showed…The department estimates that the figure was unchanged in 2010 but could rise by 1 million this year. In the UK fuel poverty is when a household spends more than 10 percent of income on fuel for heating, hot water, lights and appliances…But campaign groups warned that recent price hikes by energy companies will leave millions more people struggling to pay their bills and put vulnerable people at risk…The figures come a week after the UK’s biggest energy supplier announced rises in its gas and electricity prices from August…Centrica, which owns British Gas, said it was raising its domestic tariffs for gas by an average 18 percent and electricity by an average 16 percent, with some bills increasing by as much as 25 percent…The company blamed rising wholesale costs, which it said had increased 30 percent since last winter on higher global demand for gas and the impact on supply of unrest in the Arab world…That announcement comes in the wake of sharp prices rises outlined by Scottish Power, which plans to raise the cost of gas by 19 percent and electricity by 10 percent in August…It also comes on the back of increases last winter, when British Gas put its charges up by 7 percent in December, adding £1.50 to the average weekly dual fuel bill.

It’s a damn shame that the world’s two top bio engineers, Nancy Pelosi and Harry Reid, are too busy debating the debt ceiling and cannot help refineries understand their instructions for how to make biofuel practical Wall Street Journal (7/15/11) reports: Today’s pop quiz: What happens if the government mandates the consumption of a product that doesn’t exist? Naturally, the Environmental Protection Agency has decided to punish the gasoline refiners because they can’t buy a type of alternative fuel that no one is making. Consumers will be punished too…The 2007 energy bill vastly increased the volume of corn ethanol that must be blended into gasoline, though it also included mandates for cellulosic ethanol. These are the second-generation fuels made from stocks like switchgrass or the wood chips that George W. Bush invoked in his 2006 State of the Union. At the time, no such fuels were being produced on a commercial scale, but cellulosic producers and the green lobby assured Congress they were just about to turn the corner, and both the Bush and Obama Administration furnished handsome subsidies…The EPA set the 2011 standard at six million gallons. Reality hasn’t cooperated. Zero gallons have been produced in the last six months and the corner isn’t visible over the next six months either. The EPA has only approved a single plant to sell the stuff, operated by Range Fuels near Soperton, Georgia. The company used to be a press corps favorite and has been lauded by the last two Presidents, but it shut down its cellulosic operations earlier this year to work through technical snafus…In its wisdom, Congress decided that some companies should be penalized if the targets aren’t met. But they’re not the companies that importuned the government for mandates and corporate welfare. They’re the U.S. oil refiners that make gasoline, which will end up buying six million cellulosic waivers by year’s end at $1.13 a pop. That’s $6.78 million in higher costs at the pump, in return for nothing.

Unlike the Energizer Bunny, the lithium ion battery companies did not keep on going and going and going… Alt Energy Stocks (7/14/11) reports: I hate being wrong, but Mother always taught us, “if you have to eat crow don’t nibble.”…In February 2010 I wrote an article titled “Why I Don’t Expect A Lithium-Ion Battery Glut” that’s shaping up as one of the worst predictions in the history of my blog. This week Lux Research published a report titled “Using Partnerships to Stay Afloat in the Electric Vehicle Storm” that has me convinced that the capacity glut in lithium-ion batteries will be massive for at least a decade…I humbly and sincerely apologize to any readers who bought shares in lithium-ion battery developers based on my starry-eyed optimism for the EV battery market…As I expected, plug-in vehicles are drawing breathless reviews from the press and EVangelicals, and indifference or outright scorn from the car buying public. Automakers are toying with plug-in vehicle concepts that may go into production over the next few years if the plans aren’t scrapped due to customer apathy, but they’re all rushing to make new fuel efficiency technologies like stop-start idle elimination standard equipment. With the exception of Advanced Battery Technologies (ABAT) which makes both ebikes and the batteries that power them, E2W manufacturers are letting their customers decide and the overwhelming majority of E2W buyers are voting with their wallets and deciding that cheap and reliable lead acid batteries are better suited to their needs despite a little extra weight…Can you believe it? Cheap is beating cool. Who could have predicted such an outcome in the depths of the worst financial crisis since the 1930s?…In all seriousness, Lux forecasts a catastrophic supply and demand imbalance in the lithium-ion battery sector over the next decade. On the supply side it predicts that global manufacturing capacity will ramp to about 21,000 MWh by next year (875,000 Leaf-class BEVs) and climb to almost 30,000 MWh (1.25 million Leaf-class BEVs) by 2015. On the demand side, Lux’s optimistic case based on $200 oil predicts annual battery sales of about 6,000 MWh in 2015 (250,000 Leaf-class BEVs) ramping to 22,500 MWh (937,500 Leaf-class BEVs) by 2020. Under their more conservative $140 oil price scenario, demand won’t hit 6,000 MWh until 2020. The low oil price scenario is aggressively ugly. Is it any wonder that France has recently withdrawn €100 million of subsidized loans for a planned Renault battery plant?

The Hill has it on good authority that the GOP isn’t ready to sell out the American motorist with higher energy taxes, yet…. The Hill (7/14/11) reports: Declaring it “decision time,” President Obama is giving congressional leaders until the weekend to determine the size and scope of a package to reduce the deficit and increase the nation’s $14.3 trillion debt limit… At a meeting described by multiple officials as “polite” and “cordial,” negotiators finished scouring the potential elements of a deficit-reduction deal, and Obama instructed Republican and Democratic leaders to discuss with their caucuses what kind of measure could pass Congress by the Aug. 2 deadline set by the Treasury Department for raising the debt ceiling…“It’s decision time. We need concrete plans to move this forward,” Obama told the leaders, according to a Democratic official familiar with the meeting. He gave them 24 to 36 hours to consult with each party’s rank-and-file…The House Republican conference will meet Friday at 8 a.m., House Democrats will meet at 9 a.m., and the president has scheduled a press conference for 11 a.m…The president and congressional leaders will not meet on Friday, but will probably reconvene over the weekend, an official said.

IER’s Tom Pyle gives the White House a math lesson U.S. News In the current stalemate on raising the debt ceiling, President Obama has ratcheted up the rhetoric against the American oil and gas industry.  Big Oil, he insists, benefits from generous federal subsidies and enjoys favorable treatment from the current tax code.  The president maintains that increasing taxes on these companies will help close the federal deficit while avoiding any adverse economic consequences…Take a look at the numbers, however, and it becomes clear that raising taxes on the American oil and gas industry has nothing to do with the federal purse and everything to do with the president’s desire to see energy prices necessarily skyrocket…The president proposes forbidding American oil and gas companies from taking advantage of the Section 199 tax deduction and the Dual Capacity Taxpayer credit, both of which are available to a wide array of American companies. Section 199 allows American companies to deduct capital expenses for producing goods and creating jobs here at home from their pre-tax income.  While every other American manufacturing company may deduct up to 9 percent of their pre-tax income, the five major integrated oil and gas companies are already capped at 6 percent…The Dual Capacity rules prevent American companies from being taxed twice on income earned abroad.  Rules finalized over 25 years ago hold American firms to a strict standard as to how much they can deduct from their American income tax liability.  President Obama’s proposal would force American firms operating abroad to be subject to double taxation while their foreign competitors are able to avoid such harsh treatment.  Essentially, the plan puts American oil and gas companies at a competitive disadvantage to energy companies around the globe.

The source of Bromwich’s power is his beard. If we can only find a modern day Delilah…we will settle for House Appropriations Committee The Hill (7/14/11) reports: The Interior Department’s top offshore drilling regulator is eyeing wide changes to drilling safety rules that have already been beefed up in the wake of the BP oil spill…Michael Bromwich, director of the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE), told reporters Wednesday that an upcoming preliminary notice of new regulations will be “extremely broad.”…It will include rules governing subsea blowout preventers — the supposedly fail-safe device that could not stop BP’s runaway well — and many other aspects of drilling safety. “It will contemplate a large body of improvements and enhancements to our current regulations,” Bromwich said…Bromwich’s comments signal that regulators believe improved oversight remains a work in progress despite new policies and safeguards adopted after the Deepwater Horizon disaster last year…The bureau last year issued new standards for well design, casing, cementing, blowout preventers and other equipment…The bureau now is preparing a so-called advance notice of proposed rulemaking for the further revisions, a preliminary step in the rulemaking process that will solicit input on its plans…Bromwich said it would focus on “all the elements of drilling safety.” He spoke from New Orleans, where Interior’s offshore drilling safety advisory panel is meeting.

Yesterday Rep. Ron Paul asked Mr. Bernanke if he follows the price of gold or if he considers gold to be money — his answer was no. Crude is up on inflation fears Fuel Fix (7/14/11) reports:  An unexpected drop in U.S. crude supplies boosted oil prices Wednesday, and more government stimulus spending could help push oil even higher this year…Benchmark West Texas Intermediate crude for August delivery rose 62 cents to settle at $98.05 per barrel on the New York Mercantile Exchange. WTI got as high as $99.21 before easing back. Brent crude, which is used to price many foreign oil varieties, gained 91 cents to settle at $117.85 per barrel on the ICE Futures exchange in London…Retail gasoline prices rose a penny on Wednesday to a national average of $3.645 per gallon. In Houston, the average price rose a cent to $3.522 a gallon…Oil jumped after the Energy Information Administration said that the nation’s crude supplies fell by 3.1 million barrels last week, a million barrels more than the decline that analysts forecast in a survey by Platts, the energy-information arm of McGraw Hill Cos. The drop was due in large part to lower imports of foreign oil. The EIA also said that oil and gasoline demand fell…The price of oil got an extra boost from Federal Reserve Chairman Ben Bernanke, who said Wednesday that the central bank is looking for ways to reinvigorate the sluggish American economy. Bernanke said in his semi-annual report to Congress that the Fed is considering a few options, including another round of Treasury bond buying.

Our friends at Western Energy Alliance produced this video

No surprise here folks, our government has created an energy famine. We have it in our power to provide the world with affordable energy if only given permission from Washington Wall Street Journal (7/14/11) reports: Data from the International Energy Agency published Wednesday amply demonstrates the key problem with world oil supply today—we are running faster and faster just to stand still…In June, Saudi Arabia responded to rising oil demand, against the protests of fellow OPEC members, by pumping an extra 700,000 barrels a day of oil, according to IEA data. This is no mean feat—equivalent to more than half U.K. oil output—and takes Saudi oil production to its highest level in almost five-and-a-half years…So what effect did this major effort have on the crucial balance between oil supply and demand? Very little…The gap between how much oil the world needs for the third quarter and total OPEC production shrank from just 1.5 million barrels a day in May to 1.3 million barrels a day June. Oil prices are also close to the peaks they reached in early June, before the Saudis raised production and prior to the IEA’s release of 60 million barrels of emergency oil stocks over 30 days…Just how could two such dramatic actions deal merely glancing blows to the oil price? The answer lies in three long-standing problems: Oil supply from countries outside OPEC for 2011 was revised down by 0.2 million barrels a day because of “prolonged production outages” in a number of important oil producing regions, the IEA said. Such disappointment is an increasingly common occurrence as non-OPEC producers struggle with aging oil fields, complex technical problems and hard-to-access resources.

White House is getting sloppy with their money laundering scheme — House plans to subpoena OMB over Solyndra The Hill (7/14/11) reports: House Energy and Commerce Committee Republicans are playing hardball with the White House to obtain documents about a federal loan guarantee to a California company that manufactures cutting-edge solar panels but has faced financial problems…The committee’s oversight and investigations panel will vote Thursday on a motion to subpoena the White House Office of Management and Budget for documents about the Energy Department’s $535 million loan guarantee for Solyndra Inc…Committee Republicans have been investigating the aid, which was enabled by the 2009 stimulus law, and allege that the White House has not provided certain documents…“After two years of zero oversight of the Obama clean energy programs, our investigation has been an exercise in good government to ensure that billions of taxpayer dollars have been spent wisely. Yet OMB has sought to delay and put off this investigation at every step of the way. Subpoenas would not be necessary if OMB had lived up to its agreement and produced the documents as requested,” said Rep. Cliff Stearns (R-Fla.), who chairs the Oversight and Investigations Subcommittee, in a joint statement with full committee Chairman Fred Upton (R-Mich.)…But OMB says it is trying to work cooperatively with the subcommittee to provide information it is looking for, and has already provided substantial amounts of documents.

It’s no wonder everyone in CA is on medical marijuana — have you looked at the books recently? CA businesses are leaving 5x faster than last year and if you think that’s fast, just wait until Lt. Gov. Newsom unveils his economic plan next week CNN Money (7/12/11) reports: Buffeted by high taxes, strict regulations and uncertain state budgets, a growing number of California companies are seeking friendlier business environments outside of the Golden State…And governors around the country, smelling blood in the water, have stepped up their courtship of California companies. Officials in states like Florida, Texas, Arizona and Utah are telling California firms how business-friendly they are in comparison… Companies are “disinvesting” in California at a rate five times greater than just two years ago, said Joseph Vranich, a business relocation expert based in Irvine. This includes leaving altogether, establishing divisions elsewhere or opting not to set up shop in California…”There is a feeling that the state is not stable,” Vranich said. “Sacramento can’t get its act together…and that includes the governor, legislators and regulatory agencies that are running wild.”…The state has been ranked by Chief Executive magazine as the worst place to do business for seven years…”California, once a business friendly state, continues to conduct a war on its own economy,” the magazine wrote…That is about to change, at least if Lieutenant Governor Gavin Newsom has anything to say about it. Newsom is developing a plan to address the state’s economic Achilles heels, and build on its strengths. It will be unveiled at the end of July.

The LA Times must be smoking medical marijuana too because they think Obama is ‘tipping the scale’ in favor of building the Keystone Pipeline Los Angeles Times (7/13/11) reports: At a town hall meeting in Pennsylvania in early April, President Obama was asked about a bitter fight between industry and environmentalists over a proposed $7-billion, 2,000-mile pipeline to ship crude from Alberta’s oil sands to Gulf Coast refineries… Because the pipeline crosses the U.S.-Canadian border, a decision on a permit is pending at the State Department. Obama avowed neutrality: “If it looks like I’m putting my fingers on the scale before the science is done, then people may question the merits of the decision later on…But a 2009 cable from the U.S. Embassy in Ottawa suggests the scale may have already been tipped…The cable, obtained by WikiLeaks, describes the State Department’s then-energy envoy, David Goldwyn, as having “alleviated” Canadian officials’ concerns about getting their crude into the U.S. It also said he had instructed them in improving “oil sands messaging,” including “increasing visibility and accessibility of more positive news stories.”…Goldwyn now works on Canadian oil sands issues at Sutherland, a Washington lobbying firm, and recently testified before Congress in favor of building the 36-inch underground pipeline, Keystone XL…Environmentalists and industry experts say the cable is among several examples from unguarded moments and public documents that signal the administration’s willingness to push ahead with the controversial pipeline, even as its agencies conduct environmental and economic reviews.

Is Huntsman still working for Obama? Washington Examiner (7/12/11) reports: Former Utah Gov. Jon Huntsman isn’t really serious about seeking the 2012 Republican presidential nomination. If he was, the last thing he would do is appoint Mark McIntosh as his top policy advisor…According to Politico Pro, McIntosh will “will split his time between Huntsman’s Orlando headquarters and the GOP policy world in Washington coordinating expert advice on a range of issues, from the economy to energy, health care and foreign policy.”…So who the heck is Mark McIntosh, you ask? You’ve probably never heard of him because he is not an elected official, nor has he ever held a highly visible appointed position in a presidential administration. McIntosh’s GOP credentials consists of serving as deputy general counsel to the President’s Council on Environmental Quality during President George W. Bush’s tenure in the White House…Even so, MacIntosh is perhaps the Big Green environmental movement’s most powerful “Republican.” But don’t take my word for it. Here’s how Think Progress Green, a blog of the ultra-liberal Center for American Progress talk tank, describes Huntsman’s choice as his top policy advisor: “McIntosh has a long record of environmental activism, and is now an influential actor in the international movement to stop global warming.”

We have a $1 trillion budget deficit and the intelligentsia of DC are applauding a cut of a few billion for ethanol — we need to cut the whole Department of Energy National Journal (7/12/11) reports: When President Obama and congressional leaders finally get around to striking a deal to raise the debt ceiling, it will likely include measures repealing at least some ethanol subsidies and oil and gas tax breaks, according to a majority of National Journal Energy and Environment Insiders…Most insiders agree that renewable energy subsidies will get a reprieve this time around but will be front and center on the chopping block later this year. A whopping 70 percent said ethanol subsidies will be cut as part of a debt-ceiling deal. The experts cite two reasons: A 73-27 symbolic messaging Senate vote in June to repeal those subsidies and a deal announced last week by a trio of senators that puts most of the remaining ethanol subsidy to the deficit and keeps a sliver of it for biofuels and other renewable energy industries…“The recent Senate vote to eliminate ethanol tax subsidies shows that Congress is willing to consider eliminating subsidies previously considered sacrosanct if they have large revenue impacts and no legitimate public policy rationale, like ethanol policy,” one insider said…Essentially all energy subsidies except for oil and gas tax breaks ingrained in the tax code are set to expire at the end of this year anyway unless Congress renews them. Ethanol has triggered a political firestorm in the heat of the budget battles because of its hefty $5.4 billion to $6 billion annual price tag. Wind and solar subsidies, by contrast, have not garnered nearly the political opposition given the price tag is much smaller (about half the cost of ethanol subsidies, depending on what is included in the subsidy definition). That may bode well for the renewable industry now, but insiders warn those subsidies will probably not make it to 2012.

If you read this carefully, you’ll notice the subtle bias towards ‘green’ jobs — for example, ‘we know green jobs are important’ Time (7/12/11) reports: Supreme Court justice Potter Stewart famously said the phrase in 1964: “I know it when I see it.” It, in this case, was obscenity, and Stewart was making a point about the trickiness of properly defining the term. How do you have an argument about pornography if you can’t quite say what it is?…For the past several years, environmentalists have been having a version of the Stewart debate over the definition of a green job. We know green jobs are important, that they’re the key to a cleaner economy—and that they may be the best way to sell a sometimes skeptical American public on the pressing need for energy and climate legislation. But no one can agree on what a green job really is. A worker at a solar panel plant certainly qualifies—but what about a steel worker whose labor help makes wind turbines? A scientist working for an advanced biofuel startup definitely has a green job—but what about a roofer who sometimes works on green buildings? Without a meaningful reckoning of just how large the clean economy is, advocates on both sides of the issue can run wild—and for the average American, green jobs may seem more myth than reality… Good news—the numbers are in. The Brookings Institution—a progressive think tank in Washington—and the Battelle Technology Partnership Practice have collaborated on the first comprehensive accounting of the nation’s clean economy and green jobs on a city by city basis. They found that 2.7 million Americans are employed in the clean economy—more than the number who work in the fossil fuel industry and twice as many who work in biotech. And the clean energy sector in particular is growing very quickly: it grew by 8.3% between 2003 and 2010, nearly twice as fast as the overall economy during those years. “The pace of growth really is torrid in that sector,” says Mark Muro, a senior fellow at Brookings Metropolitan Program and a co-author of the report. “This confirms the intuition that these exciting industries really are growing as fast as we think they are.”

Top-Line Findings of “Budget Impasse Hinges on Confusion among Deficit Reduction, Tax Increase, and Tax Reform” Study

To read the full study as a PDF, click here.

With the August 2^nd deadline rapidly approaching, talk on Capitol Hill over the debt ceiling has become enmeshed in debate over repeal of tax deductions for U.S. oil firms. The marriage of these issues, however, confuses the similar but distinct concepts of deficit reduction, tax reform, and tax increases.

Increases in tax rates do not guarantee increased tax revenues.

Throughout the recent budget debate, President Obama has consistently proposed increasing the effective tax rates paid by the American oil and gas industry as a necessary condition for achieving a compromise; part of that proposal is the elimination of the Section 199 tax deduction for oil and gas companies and adding substantial additional restrictions to the foreign tax credit rules by changing the “Dual Capacity” taxpayer rules.

That policy has been motivated variously as a social agenda tax reform and as a deficit reduction measure. The important question to sort out, however, is whether it can be both.

Proponents boast proposed revisions to Section 199 and Dual Capacity would raise approximately $30 billion in Federal tax revenue over the next 10 years.  But the tax hike would come at the expense of industry cutbacks that can reasonably be expected to cost the economy:

o   $341 billion in economic output;

o   155,000 jobs;

o   $68 billion in wages; and

o   $83.5 billion in reduced tax revenues.

The net fiscal effect, a loss of $53.5 billion in tax revenues, suggests that the policy proposals exacerbate, rather than alleviate, the Federal deficit.

Deficit reduction policies are not limited to changes in the tax code. Economic growth could result from expanding oil and gas exploration and production on the Outer Continental Shelf (OCS) which could generate the following:

–          Benefits from short-run exploration phases of development include

o   $73 billion annually in economic activity;

o   $16 billion annually in wages;

o   $11 billion annually in Federal tax revenue;

o   $5 billion annually in state and local tax revenue; and

o   250,000 jobs.

–          Benefits from long-run production phases of development

o   $275 billion annually in economic activity;

o   $70 billion annually in wages;

o   $55 billion annually in Federal tax revenue;

o   another $14 billion annually in Federal royalty payments;

o   $19 billion annually in state and local tax revenue; and

o   1.2 million jobs.

The next time you debate the debt, we got your back — Dr. Joseph Mason authored a new study that explains how a tax increase will destroy energy jobs American Energy Alliance (7/12/11) reports:   As the deadline for approving an increase in the Federal debt ceiling approaches, the tax treatment of oil and gas companies’ revenues has become enmeshed in the policy debate over debt reduction and tax reform. That debate, however, is presently confusing three concepts: deficit reduction, tax reform, and tax increases. While sometimes related, those three concepts are not guaranteed to be equivalent. It is crucially important, therefore, that policymakers maintain the distinction between the three in the highly charged budget debates in order to enact meaningful deficit reduction policies…The stated goal of all participants in the budget debates has been deficit reduction. Reduced deficits are crucial to eventually reducing the debt burden to a sustainable level. The simplest deficit reductions can be attained by decreasing spending or increasing government revenues. But there are other policy options to alter regulatory and public goods policies in ways that promote economic growth without raising tax rates…That is important because even increased tax rates, in and of themselves, do not guarantee increased tax revenues. One need only look at the famous Laffer curve hypothesis, combined with the type of economic theory and empirical tests carried out by Gary Becker (of the University of Chicago) and subsequent work to see the logic that taxpayers rationally choose to pay the lower of the costs of tax avoidance or tax liabilities. Indeed, the problems currently unwinding in Greece and other European countries are to a large extent caused by tax avoidance behavior in an environment of very high marginal income taxes. Hence, it should not be taken as a foregone conclusion that increased tax rates result in increased tax revenues. Moreover, when increased tax rates actually do increase tax revenues, they create a drag on economic growth. Hence, it is not clear that tax rate increases are sensible in the current economic situation.

The best thing to come out of Detroit since the Mustang — GM unveils new diesel Chevy Cruze that gets 50 MPG Fuel Fix(7/12/11)  reports: The Chevrolet Cruze, the most popular car in the U.S. last month, will come in a diesel version that could boost gas mileage to around 50 mpg, two people briefed on General Motors Co. product plans said today…A diesel Cruze would help GM meet more stringent government gas mileage requirements. It also would rival the efficiency of the popular Toyota Prius gas-electric hybrid, which gets 51 mpg in the city and 48 on the highway, according to estimates from the Environmental Protection Agency…The diesel Cruze won’t hit showrooms until at least 2013, according to one of the people, both of whom asked not to be identified because the company hasn’t made a formal announcement…The people didn’t know the price of the Cruze. Cars with diesel engines generally cost more than those with gasoline engines because they are more expensive to produce. The base version of the Cruze now starts at $16,525. The diesel Cruze would be built at GM’s factory in Lordstown, Ohio, southeast of Cleveland…GM spokesman Tom Wilkinson would not comment on the diesel engine…GM sold about 25,000 Cruzes last month, vaulting the model past perennial leaders such as the Toyota Camry and Honda Accord to become the best-selling car in the U.S. Both Toyota and Honda had fewer models to sell because of parts shortages caused by the March 11 earthquake and tsunami in Japan.

Rep. Waxman knows as much about coal energy production as I know about ice fishing — the main difference is that I know not to run my mouth about ice fishing E&E News (7/12/11) reports: House Energy and Commerce Committee Republicans are touting new legislative language to regulate the disposal of coal ash and pre-empt ongoing regulatory efforts by U.S. EPA…Panel members will reconvene this morning after opening statements last night to consider a substitute amendment to legislation (H.R. 2273) that Republicans had already passed in the Environment and Economy Subcommittee. The new language is the latest version of a measure that has morphed several times, partly in search of more bipartisanship…”The substitute says coal ash waste will be managed in the same manner as municipal solid waste: by the state environmental protection authorities applying stringent federal standards,” said Chairman Fred Upton (R-Mich.) “Even EPA says that using the [municipal solid waste] standards would work well for managing coal ash.”…Texas Rep. Gene Green, a moderate Democrat who may join Republicans in supporting the legislation, said he believes the substitute bill needs some minor tweaking and hopes negotiations will continue to address his remaining concerns. Still, he said it “does represent a vast improvement” over the original legislation…Many committee liberals, led by ranking member Henry Waxman (D-Calif.), are unlikely to be swayed by Green’s efforts at compromise. Waxman, who in an interview least week appeared out of the loop in the negotiations, defended EPA’s regulatory attempts to prevent another coal ash disaster like the 2008 Kingston, Tenn., spill, when the retaining wall of an ash pond outside a coal plant gave way…”The legislation we will consider will not yet accomplish any of this,” Waxman said last night. “It will establish a weak federal program designed to maintain the status quo.”…Under the latest proposal, EPA retains its “imminent hazard” authority to intervene with the purpose of protecting public health. However, the legislation limits EPA’s involvement to overseeing state enforcement of coal ash rules under minimum federal standards. Only states would have inspection and enforcement authority, with EPA stepping in for states that fail to create coal ash programs.

We’ve heard everything in Texas is bigger, but Gov. Perry wants the state to be brighter too — orders that manufactures continue to produce incandescent light bulbs KHouston (7/12/11) reports: A battle of the bulbs is erupting as Texas challenges energy regulations that would phase out incandescent light bulbs in favor of newer, more energy-efficient ones…The 2007 energy bill was meant to help the environment, but critics say the new bulbs are way too expensive and some are more difficult to dispose of safely because they contain mercury…Texas Republicans are using the issue to challenge Washington and fight for states’ rights…The Texas legislature recently passed a bill declaring that incandescent bulbs—if they are made and sold only in the Lone Star State—would be exempt from the federal law since they don’t involve interstate commerce…H.B. 2510 was sponsored by State Rep. George Lavender, R-Texarkana…”This is a jobs bill and a consumer choice bill that benefits all Texans,” Lavender said in a written statement. “The last thing we need in this economy is to send American jobs overseas and raise costs to consumers based on dubious claims of increased energy efficiency.”…Gov. Rick Perry is now encouraging Texas businesses to step up and start making the bulbs Washington has essentially banned…”The federal government has no business telling people what kind of light bulbs they can run in their house,” said Bob Price, a spokesperson for Texas GOP Vote. “Washington has been thumbing its nose at Texas for many years. It’s time for us to stand up.”…Interestingly, it was President George W. Bush – a former Texas governor – who originally signed the energy regulations into law…Price said Bush’s record on states’ rights when it came to energy regulations “wasn’t much better than President Obama’s.”

Sounds like a good business call to me — Georgia Power said they will only purchase or invest in renewable energy sources if they are cost competitive in the market Forbes (7/12/11) reports: Renewable energy must cost about the same as traditional power sources such as natural gas or coal-fired power plants before Georgia Power will buy green energy on a large scale, company executives said Monday…Officials from the Southern Co. subsidiary said at a Statehouse conference that it wants to increase its usage of solar power from just over four megawatts now to more than 55 megawatts by 2015. That’s still a relatively small amount of electricity, or roughly 5 percent of the energy produced by just one of the nuclear reactors that the utility hopes to build in eastern Georgia… Georgia Power (            GPB – news – people ) Vice President Greg Roberts, who handles planning and pricing, said the utility will buy energy from green power sources so long as the cost is comparable to traditional power plants. Roberts said the firm is willing to both buy green energy and pay for some of the costs of building alternative energy projects…”But we’re really not willing to pay above that cost because we will drive up the cost for all customers if we do that beyond what we would be able to purchase in the market or build ourselves,” Roberts said…Doug Beebe, chairman of the Georgia Solar Energy Association, said the remarks from Georgia Power executives showed the utility has become more willing to at least discuss a broader use of alternative energy.

Japan needs some good news so I hope this works out, but at the end of the day we need to ask these three questions regarding the Leaf — Compared to what? At what cost? What hard evidence do we have? Reuters (7/11/11) reports: Nissan Motor Co on Monday unveiled a new charging system that gets electricity from solar power that can also be stored in the lithium-ion batteries used in its Leaf electric car…The 488 newly installed solar panels at Nissan’s global headquarters will produce enough electricity to charge 1,800 Leafs a year, allowing drivers plugging into one of its seven charging spots to travel on carbon-free energy…Nissan’s announcement comes just days after Mitsubishi Motors Corp said it would develop and market this business year a portable converter with enough capacity to allow its electric vehicles (EVs) to power household electronics such as rice cookers and washing machines…Japanese automakers have been working on clean-energy initiatives for years, but the earthquake and tsunami on March 11 have made electricity supply and sourcing an immediate concern…”Setsuden”, or power-saving, has become a buzzword in Japan, where the disasters crippled a nuclear reactor and triggered the worst radiation crisis since Chernobyl. Starting this month, big-lot electricity users in eastern Japan are required to cut peak consumption by 15 percent during the hot summer months, and utilities have also appealed to households to do their part.

Arnold isn’t the only who said “I’ll be back” — oil is up above the pre Sagging Poll Reserve release Wall Street Journal (7/11/11) reports: Oil is back on the upswing, flying in the face of international efforts to keep prices low…After an initial drop, crude-oil futures are back above the levels seen before the International Energy Agency in late June announced a plan to release 60 million barrels of oil from emergency stockpiles, ending Friday at $96.20 a barrel on the New York Mercantile Exchange. The U.S. will release 30.6 million barrels toward that total…That futures contract is up more than 6% from the lows hit after the announcement. U.S. gasoline futures prices are up 11%, suggesting more pain at the pump in the weeks ahead…The rebound in Brent crude, a European benchmark, has been even steeper. Brent futures are up 13% from the lows. Last week alone, they surged almost 6%… Investors have overlooked the added oil and focused instead on expectations that relentless demand for oil, especially from consumers such as China, will continue to drive prices higher as the global economy recovers. Several Wall Street banks have raised their price targets for oil, arguing the IEA move won’t alleviate long-term supply worries. The gains underscore how little control governments have over oil prices, and financial markets in general…This is the third time the IEA has coordinated the release of strategic reserves among its member nations. The move was widely viewed by analysts as an alternative form of “quantitative easing,” aiming to drive down oil prices and prop up the economy, although the Paris-based energy watchdog for industrialized nations said the decision was mainly driven by the loss of Libyan production and an anticipated uptick in seasonal demand from refiners.

There are two things America got right: freedom and cars. Now, Obama is destroying both in record time The American Spectator (7/7/11) reports: Now Obama’s decided to ban cars outright…Not in so many words, perhaps, but his just-announced proposal that new cars be required by law to average 56.2 miles per gallon by 2025 will effectively do just that…Not one car sold in the United States currently averages 56 MPG — not even on the highway. Not even hybrids like the Toyota Prius, the best of the lot — which maxes out at 51 on the highway and 48 in city driving. The maximum highway mileage achieved by a current non-hybrid car (the 2012 Honda Civic HF) is 41 MPG. Its average mileage is 33 MPG…To achieve an average of 56 MPG, one or more of the following would be necessary:* Massive reduction in vehicle weight…It is easier – more efficient – to move a lighter car than a heavier car. A 2,000 lb. car will use less gas, all else being equal, than a 2,800 lb. car because a smaller, more fuel-efficient engine can do equivalent work in terms of accelerating the vehicle and maintaining speed…The problem is the engineering/economic conflict between weight and safety…For decades, the federal government has been passing one safety-minded mandate after another, each of which has had the effect of making newer cars heavier than their equivalents of the past. A current-year subcompact like the 2012 Fiat 500 weighs 2,363 lbs. — a porker in comparison to an equivalent subcompact from the ’70s such as an original model VW Super Beetle, which weighed about 1,900 lbs. That 400-plus pound weight difference is the main reason why, despite the Fiat’s 40-year advantage in technology — including computer-controlled fuel injection and overdrive transmissions — its gas mileage (30 city, 38 highway , 33 average) is only slightly better than the Beetle’s high 20s, low 30s.

The green movement is about money, population control and political power — don’t let anyone tell you different Daily Mail (7/11/11) reports: Energy bills are likely to double within five years as the Government drives a move to green power and building nuclear power stations, it is claimed…Energy Secretary Chris Huhne will outline plans this week for a major shift in power generation away from fossil fuels such as gas, coal and oil…The transformation is predicted to cost the nation £200billion, which will be passed on to consumers in the form of higher bills…The Government will put in place minimum price guarantees, higher than  the normal market price, for the electricity generated by new wind farms and nuclear power stations…This will guarantee it is profitable to build and operate the expensive and controversial facilities. However, it will also mean the  price paid by families for their electricity will also have to rise…Conservative estimates suggest energy bills will soar by 50 per cent over the next  20 years to fund the proposals – taking  the annual average bill up by £500, to  £1,500 a year. But City experts believe the real figure will be considerably higher.

Listen, do you want to know a secret? Do you promise not to tell, whoa, oh…Closer, let me whisper in your ear…wind energy is horrible for the environment Forbes (7/6/11) reports: The amount of energy available in the Earth system to be extracted by wind turbines is limited, and if sufficient energy is removed the world climate will be affected. These striking conclusions follow from a recent analysis by researchers at Germany’s Max Planck Institute for Biogeochemistry. Humans use energy in total at a rate of 17 TW (terawatts), 87% of which is provided by fossil fuels. In the effort to mitigate carbon emissions and climate change, sources of carbon-free renewable energy are sought, particularly wind power. From a simple engineering perspective, the more wind turbines are placed around the globe, the more energy can be extracted, with no particular effect on the overall energy of the atmospheric flow…From the various simulations used it was inferred that between 18 – 68 TW of mechanical wind power can be extracted from the atmospheric boundary layer, taken over all non-glaciated land surfaces. While a single wind-turbine does not affect the global atmosphere, the installation of a large number of such devices will interfere with the atmospheric circulation and diminish the extraction efficiency on the large scale, since any extraction of momentum will act in competition with natural wind-power energy dissipation by turbulence in the boundary layer.

America’s largest trading partner and ally has an energy “Picasso in the attic” called oil sands, but the usual anti-energy suspects prefer we use Venezuelan, Middle Eastern or Brazilian oil.  Why?  Do you remember the Buddhas of Bamiyan? Wall Street Journal (7/8/11) reports: In a 21st-century oil boom, this sparsely populated Canadian province has become one of the world’s newest petroleum powerhouses. Foreign investors are piling in, and Alberta plans to double production over the next decade…The problem is that the U.S.—the biggest consumer of Alberta petroleum—may not want the additional oil…Most of Alberta’s 1.5 million barrels of daily exports are extracted from oil sands, or bitumen. Turning this tar-like substance into oil is an energy-intensive process that generates lots of carbon dioxide, a gas suspected to contribute to global warming. Almost all the oil produced ends up in the U.S., where environmentalists and some powerful Democrats have lined up against importing any more of the stuff… Washington remains ambivalent about a proposed expansion of a pipeline that could nearly double exports from Alberta to the U.S. Another line—proposed to pipe Alberta oil to the Pacific, where it could be shipped to Asian markets—is opposed by native Canadian groups…”Alberta will be in a very difficult position” if either one of the two pipelines don’t go forward, Alberta’s Energy Minister Ron Liepert said. “By 2020, we’ll be landlocked in bitumen. We have to get it to market, and right now we don’t have the infrastructure in place.”..Canada’s constitution cedes ownership of its energy reserves to its provinces. That essentially makes Alberta its own petrostate. And Edmonton is mounting a public-relations war to find new markets for its oil.

Meanwhile, it looks like China could use the Picasso in the attic

China is Winning the Future

True courage — politicians are beating their chest for slimming down big corn, but no one likes ethanol except for corporate farmers and elitists who hate poor people New York Times (7/8/11) reports: Federal subsidies for corn ethanol have long been considered untouchable in Washington — not least because politicians want the votes of Iowans, who have traditionally held the first nominating caucuses in the contest for the presidency…But this year, cutting the budget deficit holds more allure than courting corn farmers, making a turning point in ethanol politics…In Washington, there is growing consensus that the ethanol industry has reached financial stability, making much government assistance unnecessary. A strong majority of the Senate recently voted to end most of the subsidies…The pressure prompted three influential senators to announce a compromise on Thursday that would drastically cut the financial support and end a tariff on foreign ethanol entirely by the end of July. The White House, which has supported a reduction of the subsidies, said it was encouraged by the latest proposal…Three Republican presidential candidates — Tim Pawlenty, Ron Paul and Rick Santorum — are also seeking to eliminate or phase out subsidies for the industry even if that hurts them in Iowa. Jon Huntsman has decided he will not even participate in the caucuses, in large part because of his antisubsidy record…No one is seeking to end the most important government support for ethanol — a federal mandate that gasoline blenders mix increasing amounts of ethanol into gasoline. But at a time when many tax breaks are under scrutiny, there seems to be little political will to continue giving $6 billion a year in federal tax credits to fuel blenders that must buy the ethanol anyway.

Just how China was smart enough to sell opium to the world, they are smart enough to sell renewable energy….and it looks like we’re chasing the dragon USA Today (7/8/11) reports: Overall, the $211 billion in 2010 investments in renewable energy — wind, solar, geothermal and related technologies — was driven by policies in nations that increasingly require such power worldwide. The United Nations Environment Programme report finds that Chinese wind farms and German solar rooftops led investments but, surprisingly, developing nations spent more on renewable energy utility projects, $72 billion, than developed ones, at $70 billion…”Quite a jump, considering the economic headwinds, a surprisingly positive result,” says UNEP’s Virginia Sonntag-O’Brien. The “Global Trends in Renewable Energy Investment 2011” report, the fifth in an annual series, analyzed 26,300 renewable power projects recorded for the year by the London-based Bloomberg New Energy Finance firm…Among the findings: •China led all nations with about $49.8 billion in investments, ahead of German spending of $41 billion and U.S. spending of $29.6 billion…•Big gains came in small-scale projects such as rooftop solar panels, up 91% to $60 billion, tied to stimulus spending by nations in 2010, and government research, up 121% to $5.3 billion.

I’d hate to be a Quebecer in the winter — the government is making people decide between bacon or heat as their cap and tax scheme is bound to make energy prices skyrocket CBC News (7/8/11) reports: Quebecers face higher fuel costs as the province prepares to launch a cap-and-trade system to regulate greenhouse gas emissions beginning in 2013, Environment Minister Pierre Arcand acknowledged Wednesday…While the size of the increases remain unclear, he said the new system will prevent wild tax increases by encouraging businesses to innovate to reduce their emissions…”It’s clear that over the coming years there will certainly be increases and consumers need to be ready,” Arcand said at a news conference after unveiling a 60-day consultation period…The program is designed to reduce Quebec’s emissions by 20 per cent from 1990 levels by 2020. It will primarily affect about 100 Quebec companies that are responsible for 85 per cent of the province’s emissions…The transportation sector will be added to the system in 2015, but agriculture, forestry and garbage won’t be affected…Quebec is part of a co-ordinated regional effort of the Western Climate Initiative, which also includes Ontario, British Columbia and Manitoba representing three-quarters of the Canadian population and economic activity.