In the Pipeline: 2/15/11

So where are you gonna work after you follow in Jimmy Carter’s footsteps, Mr. President? Let me guess…the Center for American Progress. Obama’s budget the blueprint for his war on affordable and reliable energy Time (2/15/11) reports: It’s Budget Day in Washington, when policy wonks break out the calculators that have the “trillions” button and decide whether we’ll have six more weeks of winter, or six decades more of crippling budget deficits. Actually, today is the day President Obama released his proposed budget for fiscal year 2012, which you can explore in all its eye-glazing glory over here. Boring or not, though, it ‘s worth going through Obama’s proposals for the Environmental Protection Agency (EPA) and the Department of Energy (DOE), if only to see the areas the President really wants to save as he works to win the future…First the EPA—download a PDF of the budget here. Overall the EPA faces a 12.6% cut, with $9 billion allocated for fiscal 2012, down from the $10.3 billion that had been allocated for fiscal 2010, which represented the agency’s biggest ever budget. That means the White House is accepting some tough cuts, while allowing a few programs—including money for greenhouse gas monitoring and regulation—to rise.

American’s don’t need subsidized energy bills, what they need is affordable and reliable energy Wall Street Journal (2/15/11) reports: A proposed $2.5 billion cut to a program helping low-income Americans heat or cool their homes could leave some states out in the cold…The cuts would shrink spending on the main portion of the Low Income Home Energy Assistance Program to $1.98 billion, from about $4.5 billion in the current fiscal year. The proposed budget would set aside an additional $590 million in contingency funds to distribute as need arises, an amount unchanged from the last budget. But because of a quirk in the funding system, some states would see their fixed share of the funds fall by much more than half, while others are protected from steep declines. Arizona, Florida, Georgia, Nevada and Texas—states where some low-income residents depend on the money to cool their homes during scorching summers—all would lose more than 75% of funding, according to the Congressional Research Service, while funding for Iowa, New York and Wisconsin would drop by less than half.

Obama, this lesson is free: when you tax a company, that company transfers the tax to the consumer. In this case, a tax on the fossil fuel industry will result in higher monthly energy bills New York Times (2/14/11) reports: The president once again asks Congress to do away with billions in tax breaks for fossil fuel interests, over the outcries of the oil and gas industry…The request deals with policies that involve some of the sharpest disagreements between the administration and Congress, which will debate it line by line… Spending at the Department of Interior would remain at roughly the same level as past years, but with a major increase, to $358 million, for environmental and safety enforcement for offshore oil and gas drilling, to be offset largely with royalties and fees from oil companies…The budget request represents an increase of $119 million, or 50 percent, from 2010 and is intended to address weaknesses revealed after last year’s BP spill in the Gulf of Mexico. The additional money would be used to hire new oil and gas inspectors, to more vigorously oversee drilling activities and to process drilling permit applications more efficiently.

Hold your breath and hide your wallet: Employment Prevention Agency awarded $43 million to regulate GHG’s Bloomberg (2/14/11) reports: The president’s plan calls for about $43 million in new funding for the rules aimed at curbing carbon-dioxide emissions blamed for climate change, according to EPA Administrator Lisa Jackson…“We need to get started,” Jackson told reporters on a conference call today. “Businesses are waiting right now to make investments, and one of the things they need to know is how we will be addressing carbon pollution going forward.” ..The total EPA budget for the rules, which took effect last month, is about $190 million, including costs for state permit programs, according to Jackson. The EPA opposes any effort in Congress to bar or delay the regulations, she said.

Wyoming’s state motto is ‘equal rights’ but at the moment the governor is more concerned with states’ rights in a legal battle with the EPA Bloomberg (2/15/11) reports: Wyoming has filed a legal challenge to the U.S. Environmental Protection Agency’s regulation of greenhouse gas emissions in the state…State officials say the EPA gave Wyoming just nine days to come up with a state plan to regulate greenhouse gases before a Dec. 22 deadline, and that wasn’t enough time…Without state rules, the EPA stepped in Jan. 2 and has taken charge of issuing greenhouse gas permits in the state since then…A two-tiered, federal-state permitting process is now in effect for any large, new industrial facility, such as a coal-fired power plant, that emits large amounts of carbon dioxide or other greenhouse gas, said Renny MacKay, spokesman for Gov. Matt Mead…”If somebody wants to build a facility, they come to Wyoming and get permitting for everything but greenhouse gases. For greenhouse gases, they have to go to EPA,” MacKay said

Pelosi, who said natural gas was a “good alternative” to fossil fuels, apparently thinks we power our cars with switchgrass, too The Hill (2/15/11) reports: Obama’s FY 2012 budget request calls for eliminating a series of oil and gas industry tax breaks. The Department of Energy estimates that such a repeal will save $3.6 billion in fiscal year 2012 and a total of $46.2 billion during the next decade…But Obama’s proposal faces an uphill battle in Congress. Republicans argue that any effort to eliminate oil industry tax breaks would harm the economy and result in massive job losses…Capitol Hill Democrats have given repeal of oil industry tax breaks a starring role in their political messaging on the budget, arguing that Republicans should support cutting the incentives if they truly want to help reduce the deficit. Senate Majority Leader Harry Reid (D-Nev.) and House Minority Leader Nancy Pelosi (D-Calif.) have both made high-profile calls in recent days for Republicans to embrace the proposal.

February 15, 2011

Sowhere are you gonna work after you follow in Jimmy Carter’s footsteps, Mr.President? Let me guess…the Center for American Progress. Obama’s budget theblueprint for his war on affordable and reliable energy Time(2/15/11) reports: It’s Budget Day in Washington, when policy wonks break outthe calculators that have the “trillions” button and decide whetherwe’ll have six more weeks of winter, or six decades more of crippling budgetdeficits. Actually, today is the day President Obama released his proposedbudget for fiscal year 2012, which you can explore in all its eye-glazing gloryover here. Boring or not, though, it’s worth going through Obama’s proposalsfor the Environmental Protection Agency (EPA) and the Department of Energy(DOE), if only to see the areas the President really wants to save as he worksto win the future…First the EPA—download a PDF of the budget here.Overall the EPA faces a 12.6% cut, with $9 billion allocated for fiscal 2012,down from the $10.3 billion that had been allocated for fiscal 2010, whichrepresented the agency’s biggest ever budget. That means the White House isaccepting some tough cuts, while allowing a few programs—including moneyfor greenhouse gas monitoring and regulation—to rise.

 

 

American’sdon’t need subsidized energy bills, what they need is affordable and reliableenergy WallStreet Journal (2/15/11) reports: A proposed $2.5 billion cut to a programhelping low-income Americans heat or cool their homes could leave some statesout in the cold…The cuts would shrink spending onthe main portion of the Low Income Home Energy Assistance Program to $1.98billion, from about $4.5 billion in the current fiscal year. The proposedbudget would set aside an additional $590 million in contingency funds todistribute as need arises, an amount unchanged from the last budget. Butbecause of a quirk in the funding system, some states would see their fixedshare of the funds fall by much more than half, while others are protected fromsteep declines. Arizona, Florida, Georgia, Nevada and Texas—states wheresome low-income residents depend on the money to cool their homes duringscorching summers—all would lose more than 75% of funding, according tothe Congressional Research Service, while funding for Iowa, New York andWisconsin would drop by less than half.

Obama,this lesson is free: when you tax a company, that company transfers the tax tothe consumer. In this case, a tax on the fossil fuel industry will result inhigher monthly energy bills NewYork Times (2/14/11) reports: The president once again asks Congress to doaway with billions in tax breaks for fossil fuel interests, over the outcriesof the oil and gas industry…The request deals with policies that involve someof the sharpest disagreements between the administration and Congress, whichwill debate it line by line…Spending at theDepartment of Interior would remain at roughly the same level as past years,but with a major increase, to $358 million, for environmental and safetyenforcement for offshore oil and gas drilling, to be offset largely withroyalties and fees from oil companies…The budget request represents an increaseof $119 million, or 50 percent, from 2010 and is intended to address weaknessesrevealed after last year’s BP spill in the Gulf of Mexico. The additional moneywould be used to hire new oil and gas inspectors, to more vigorously overseedrilling activities and to process drilling permit applications more efficiently.

Hold your breath and hideyour wallet: EmploymentPrevention Agency awarded $43 million to regulate GHG’s Bloomberg(2/14/11) reports: The president’s plan calls for about $43 million in newfunding for the rules aimed at curbing carbon-dioxide emissions blamed forclimate change, according to EPA Administrator Lisa Jackson…“We need to getstarted,” Jackson told reporters on a conference call today. “Businesses arewaiting right now to make investments, and one of the things they need to knowis how we will be addressing carbon pollution going forward.” ..The total EPAbudget for the rules, which took effect last month, is about $190 million,including costs for state permit programs, according to Jackson. The EPAopposes any effort in Congress to bar or delay the regulations, she said.

Wyoming’s state motto is‘equal rights’ but at the moment the governor is more concerned with states’rights in a legal battle with the EPA Bloomberg(2/15/11) reports: Wyoming has filed a legal challenge to the U.S.Environmental Protection Agency’s regulation of greenhouse gas emissions in thestate…State officials say the EPA gave Wyoming just nine days to come up with astate plan to regulate greenhouse gases before a Dec. 22 deadline, and thatwasn’t enough time…Without state rules, the EPA stepped in Jan. 2 and has takencharge of issuing greenhouse gas permits in the state since then…A two-tiered,federal-state permitting process is now in effect for any large, new industrialfacility, such as a coal-fired power plant, that emits large amounts of carbondioxide or other greenhouse gas, said Renny MacKay, spokesman for Gov. MattMead…”If somebody wants to build a facility, they come to Wyoming and getpermitting for everything but greenhouse gases. For greenhouse gases, they haveto go to EPA,” MacKay said.

Pelosi, who said naturalgas was a “good alternative” to fossil fuels, apparently thinks we power ourcars with switchgrass, too TheHill (2/15/11) reports: Obama’s FY 2012 budget request calls foreliminating a series of oil and gas industry tax breaks. The Department ofEnergy estimates that such a repeal will save $3.6 billion in fiscal year 2012and a total of $46.2 billion during the next decade…But Obama’s proposal facesan uphill battle in Congress. Republicans argue that any effort to eliminateoil industry tax breaks would harm the economy and result in massive joblosses…Capitol Hill Democrats have given repeal of oil industry tax breaks astarring role in their political messaging on the budget, arguing thatRepublicans should support cutting the incentives if they truly want to helpreduce the deficit. Senate Majority Leader Harry Reid (D-Nev.) and HouseMinority Leader Nancy Pelosi (D-Calif.) have both made high-profile calls inrecent days for Republicans to embrace the proposal.

In the Pipeline: 2/14/11

Part One: Obama never let the Gulf crisis go to waste; despite lifting the moratorium, no permits have been issued, effectively shutting down oil and gas production in the Gulf The Hill (2/13/11) reports: Sen. Mary Landrieu (D-La.) slammed what she called a “de facto moratorium” on drilling in the Gulf of Mexico late Saturday night amid news that a major shallow-water driller filed for bankruptcy. Landrieu, an outspoken critic of the Obama administration’s offshore drilling policies, blamed the Interior Department’s “excruciatingly slow release of oil and gas permits” for the company’s hard times. “How many more rigs have to leave and how many more businesses have to close before it realizes the havoc the de facto moratorium is wrecking on the Gulf Coast? When these businesses close, people lose good paying jobs, our communities erode and our unique culture disappears,” Landrieu said in a statement…The Obama administration imposed a moratorium on deepwater drilling in the Gulf of Mexico in the aftermath of last year’s massive oil spill. The moratorium has since been lifted, but Landrieu and other drill-state lawmakers say drillers are operating under a “de facto moratorium” because no deepwater drilling permits have been issued.

Part Two: Obama’s war on affordable and reliable energy claims new casualty and along with it: tax revenue and jobs. Wall Street Journal (2/12/11) reports: Seahawk was “forced to seek strategic alternatives only after an unprecedented decline in the issuance of offshore drilling permits following the Macondo blowout,” Mr. Stilley said, referring to the BP well that blew out on April 20, killing 11 workers and triggering the worst offshore oil spill in U.S. history…Seahawk Drilling Inc., one of the largest operators of shallow-water rigs in the Gulf of Mexico, on Friday said it would seek bankruptcy protection and sell its assets to a competitor, blaming the Obama administration for a crippling regulatory environment in the aftermath of the BP PLC oil spill…Seahawk’s assets will be acquired by Hercules Offshore Inc., in a cash and stock deal worth about $100 million. The cash component will be $25 million but could be upped another $20 million if needed to pay Seahawk’s debt. Hercules will also provide the seller 22.3 million shares of common stock, valued at $3.36 per share. The number of shares would be reduced, however, if more cash is required…The deal is subject to bankruptcy court approval…The deal represents the second significant consolidation among U.S. rig contractors in a week, following Ensco PLC’s acquisition of Pride International on Feb. 7

It’s hard to be caustic when the subject matter is so somber — Oil companies look to other parts of the world for work Financial Times (2/11/11) reports: When Michael Bromwich, head of permitting for the Gulf of Mexico, comes to Texas oil country on Friday, the message the industry hopes to deliver is that deepwater drilling will continue – with or without the US…Last year Chevron, a lead investor in the Gulf, said it acquired acreage in nine major deepwater areas. This year it will drill in deepwater off China, Australia, West Africa, the UK, Brazil, and, if permitted, the Gulf. Bobby Ryan, Chevron’s vice president for Global Exploration, explains: “Deepwater is a major component of our exploration program. The only place we are not drilling is the Gulf of Mexico.”… Indeed, he says that every day he gets a drilling report from the Gulf. The email reports no exploration wells are being drilled and no development wells are being drilled. He deletes it: “I never thought I’d reach a point in my career when I’d see that for the Gulf of Mexico.”

Valentines Day: China will spend the next year trying to figure out how much love they can get from Europe in the form of solar subsidies Bloomberg (2/14/11) reports: China, the world’s biggest electricity consumer, is figuring out how to capture a larger share of the solar-energy market without losing money…The government will spend at least a year studying Europe’s system of paying above-market prices for solar power before deciding if there’s a better way to spur clean-energy plants across China, said Wu Dacheng, an adviser to national power regulators. The delay has stalled projects planned on Chinese soil by developers such as First Solar Inc. of the U.S.…“We need to learn from European countries like Germany” that pay subsidized rates to spark solar-panel installations, Wu, vice chairman of the Solar Photovoltaic Committee of China’s Renewable Energy Society, said in an interview….Europe, which attracted more than $65 billion in solar plant investment in 2010, is providing lessons for China. Germany, the largest panel market, together with Spain and France carried out four unscheduled subsidy cuts in 2010, trying to slow a torrent of projects by developers and speculators.

Follow the money: Small wind rapidly expanded in 2009, but in 2008 Congress expanded tax credits for these bite-sized turbines MSNBC (2/11/11) reports: “Small wind” is getting big. The market for these pint-sized windmills grew 13 percent in the United States in 2009, the latest year for which figures are available, to $82.4 million. With that boost, the total capacity of small turbines in the U.S. now exceeds 100 megawatts. That accounts for 3 percent of wind energy here, which might not seem like much, but over half that capacity has been built in just the last three years….Small tower turbines have been stippling Midwest horizons for at least 80 years. Interchangeably called “small wind” and “residential wind,” the category covers tower- and roof-mounted turbines with the capacity to generate anywhere below 100 kilowatts of energy. They’re usually used to help power a home, a farm, or, in some cases, a corporate campus. The modern small-wind craze, however, traces back to October 2008, when Congress expanded tax credits for the turbines—first as part of the Emergency Economic Stabilization Act and later as part of the American Recovery and Reinvestment Act. The laws allow consumers to write off 30 percent of the total purchasing and installation costs of any small-wind turbine—tax credits that had been previously capped at $2,000

We love Mike Johanns, but at some point you have to wonder: what in the world is he thinking about? E&E News (2/11/11) reports: Thirty House members from both parties yesterday urged Secretary of State Hillary Rodham Clinton to sign off on a controversial $7 billion pipeline that is poised to nearly double U.S. imports of crude from the Canadian oil sands…The Keystone XL pipeline remains under review at the State Department amid intense lobbying efforts by both the oil industry, which touts the project’s job-creation value as well as its role in diminishing imports from the Middle East, and environmentalists who decry the increased emissions from the production of oil sands crude…Members of Congress on both sides of the aisle are choosing sides on the pipeline in growing numbers, with yesterday’s letter arriving as the latest volley from Capitol Hill…”As the price at the pump continues to climb, America needs to look to reliable oil producing countries that do not force us to compromise our ideals and national security,” the group of 30 wrote. “Canada is already our largest supplier of oil, a responsible and reliable partner in energy, and a friendly and democratic government that shares the values and ideals of the United States.”

In the Pipeline: 2/11/11

Someone as poetic as Oettinger deserves a round of applause or at least some free carbon credits Guardian (2/10/11) reports: He said the tougher target would force industries to move to Asia. “If we go alone to 30%, you will only have a faster process of de-industrialisation in Europe,” he said, citing the steel industry as one of the likely casualties. “I think we need industry in Europe, we need industry in the UK, and industry means CO2 emissions.” Moving to the higher target would cost about €81bn (£68.4bn) a year by 2020, or 0.54% of GDP, according to the European commission’s research, compared with a cost of €48bn for the 20% goal. But the move would quickly yield benefits including more green jobs, better health outcomes from less air pollution, and would make reducing emissions beyond 2020 much easier…”[It shows] the best thing for CO2 emissions is a crisis, so do we need longer and deeper crises?” he asked. “Look at our deficit – we need growth, and we need more industry.”

Take note: Author says there is a lot of excitement about EVs, but only lists governments and rent seekers. I wonder, how excited is the consumer? New York Times (2/10/11) reports: There sure is a lot of excitement percolating around plug-in hybrid and electric cars these days. Chevrolet’s Volt and Nissan’s Leaf are the talk of the car world, city governments are installing battery chargers, and the Obama administration has promoted them. Even the TV commercials for the battery chargers are cool…There are some skeptics, however. And on Thursday I caught up with one of them, William M. Colton, ExxonMobil’s vice president for corporate strategic planning, who is definitely not a fan. A reverse skeptic could say, sure, why would ExxonMobil say nice things about a car that would displace gasoline? That’s certainly true, although Exxon Mobil is getting more and more invested in natural gas, which would indirectly help fuel electric and hybrid cars because it is an important fuel stock for the electric utilities that ultimately charge the car batteries.

Bio-fuel is not only uneconomical, but also drives up food prices for the world’s poor as an unintended consequence (Part 1) Washington Post (2/11/10) reports: Each year, the world demands more grain, and this year the world’s farms will not produce it. World food prices have surged above the food crisis levels of 2008. Millions more people will be malnourished, and hundreds of millions who are already hungry will eat less or give up other necessities. Food riots have started again…Nearly all assessments of the 2008 food crisis assigned biofuels a meaningful role, but much of academia and the media ultimately agreed that the scale of the crisis resulted from a “perfect storm” of causes. Yet this “perfect storm” has re-formed not three years later. We should recognize the ways in which biofuels are driving it…Demand for biofuels is almost doubling the challenge of producing more food. Since 2004, for every additional ton of grain needed to feed a growing world population, rising government requirements for ethanol from grain have demanded a matching ton. Brazil’s reliance on sugar ethanol and Europe’s on biodiesel have comparably increased growth rates in the demand for sugar and driven up demand for vegetable oil.

Ethanol is the leading cause of increased food prices in the U.S. and it’s not even a net positive energy source (Part 2) New York Times (2/9/11) reports: Reserves of corn in the United States have hit their lowest level in more than 15 years, reflecting tighter supplies that will lead to higher food prices in 2011. Increasing demand for corn from the ethanol industry is a major reason for the decline, according to federal officials…The Department of Agriculture reported Wednesday that the ethanol industry’s projected orders this year rose 8.4 percent, to 13.01 billion bushels, after record-high production in December and January…That means the United States will have about 675 million bushels of corn left at the end of the year. That is about 5 percent of all corn that will be consumed, the lowest surplus level since 1996…Corn prices have already doubled in the last six months, rising from $3.50 a bushel to more than $7 a bushel.

History repeats: Remember Range Fuels from yesterday? Well, today Ineos Bio broke ground on a new cellulosic ethanol plant. New York Times (2/10/11) reports: There are myriad routes to making car fuel from waste, using mix-and-match technologies assembled in novel ways, but none has worked yet on a commercial scale. On Wednesday, Ineos Bio, the subsidiary of a major international chemical firm, broke ground on a plant that aims to use yet another combination…The Ineos concept has a leg up over some other approaches in that it anticipates three revenue streams. The factory will get paid for taking in plant waste or possibly household garbage and will produce electricity as well as ethanol at a huge savings in carbon dioxide output…The plant, near Vero Beach, Fla., adjacent to an Indian River County landfill, will begin with plant waste, including palm tree leaves, and will gasify it. This is a common technology that involves heating material in a chamber with a controlled amount of oxygen. It produces carbon monoxide and hydrogen, both fuel gases, and carbon dioxide.

Gaming the system: Government Electric’s wind farms taking advantage of small developer regulatory loopholes, Idaho moves to block amid higher electricity rates Idaho Statesman (2/10/11) reports: These utilities contend sophisticated, well-financed developers such as General Electric Co. are breaking up their large wind farms into small, 10-megawatt projects so they can qualify for the better prices. The utilities say the big developers essentially are gaming a system originally designed to help small, independent power producers…Idaho Power said it has been overwhelmed by these fragmented projects and says they are contributing to higher costs for its customers. The utility also estimates it could have 1,100 megawatts of wind power on its system within just a few years — more than it needs during low-usage days

Let’s compete with China and develop natural resources: PetroChina buys $5.4 billion stake in Canadian shale gas BBC (2/10/11) reports: The Cutbank Ridge deal marks a further step in a developing energy relationship between China and Canada…PetroChina has made other investments in Canadian natural resources…It took a 60% stake, costing $1.7bn, in two projects owned by Athabasca Oil Sands in 2009…Many in the oil and gas industry see so-called unconventional gases as an untapped energy resource with great potential…However, the exploration of shale rocks for energy is a controversial subject for many…Environmental groups say that the process used to extract the gas is new and untested, and that the potential health effects on those who live in areas where shale gas extraction takes place are unknown.

 

 

February 11, 2011

Someoneas poetic as Oettinger deserves a round of applause or at least some freecarbon creditsGuardian(2/10/11) reports: He said the tougher target would force industries to move toAsia. "If we go alone to 30%, you will only have a faster process ofde-industrialisation in Europe," he said, citing the steel industry as oneof the likely casualties. "I think we need industry in Europe, we needindustry in the UK, and industry means CO2 emissions." Moving to thehigher target would cost about €81bn (£68.4bn) a year by 2020, or 0.54% of GDP,according to the European commission’s research, compared with a cost of €48bnfor the 20% goal. But the move would quickly yield benefits including moregreen jobs, better health outcomes from less air pollution, and would makereducing emissions beyond 2020 much easier…"[It shows] the best thing forCO2 emissions is a crisis, so do we need longer and deeper crises?" heasked. "Look at our deficit – we need growth, and we need moreindustry."

 

Takenote: Author says there is a lot of excitement about EVs, but only listsgovernments and rent seekers. I wonder, how excited is the consumer? NewYork Times (2/10/11) reports: There sure is a lot of excitement percolatingaround plug-in hybrid and electric cars these days. Chevrolet’s Volt andNissan’s Leaf are the talk of the car world, city governments are installingbattery chargers, and the Obama administration has promoted them. Even the TVcommercials for the battery chargers are cool…There are some skeptics, however.And on Thursday I caught up with one of them, William M. Colton, ExxonMobil’svice president for corporate strategic planning, who is definitely not a fan. Areverse skeptic could say, sure, why would ExxonMobil say nice things about acar that would displace gasoline? That’s certainly true, although Exxon Mobilis getting more and more invested in natural gas, which would indirectly helpfuel electric and hybrid cars because it is an important fuel stock for theelectric utilities that ultimately charge the car batteries.

 

Bio-fuelis not only uneconomical, but also drives up food prices for the world’s pooras an unintended consequence (Part 1)WashingtonPost (2/11/10) reports: Each year, the world demands more grain, and thisyear the world’s farms will not produce it. World food prices have surged abovethe food crisis levels of 2008. Millions more people will be malnourished, andhundreds of millions who are already hungry will eat less or give up other necessities.Foodriots have started again…Nearly all assessments of the 2008 food crisisassigned biofuels a meaningful role, but much of academia and the mediaultimately agreed that the scale of the crisis resulted from a "perfectstorm" of causes. Yet this "perfect storm" has re-formed notthree years later. We should recognize the ways in which biofuels are driving it…Demandfor biofuels is almost doubling the challenge of producing more food. Since2004, for every additional ton of grain needed to feed a growing worldpopulation, rising government requirements for ethanol from grain have demandeda matching ton. Brazil’s reliance on sugar ethanol and Europe’s on biodieselhave comparably increased growth rates in the demand for sugar and driven updemand for vegetable oil.

 

Ethanolis the leading cause of increased food prices in the U.S. and it’s not even anet positive energy source (Part 2) NewYork Times (2/9/11) reports: Reserves of corn in the United States have hittheir lowest level in more than 15 years, reflecting tighter supplies that willlead to higher food prices in 2011. Increasing demand for corn from the ethanolindustry is a major reason for the decline, according to federal officials…TheDepartment of Agriculture reported Wednesday that the ethanol industry’sprojected orders this year rose 8.4 percent, to 13.01 billion bushels, afterrecord-high production in December and January…That means the United Stateswill have about 675 million bushels of corn left at the end of the year. Thatis about 5 percent of all corn that will be consumed, the lowest surplus levelsince 1996…Corn prices have already doubled in the last six months, rising from$3.50 a bushel to more than $7 a bushel.

 

Historyrepeats: Remember Range Fuels from yesterday? Well, today Ineos Bio brokeground on a new cellulosic ethanol plant. NewYork Times (2/10/11) reports: There are myriad routes to making car fuelfrom waste, using mix-and-match technologies assembled in novel ways, but nonehas worked yet on a commercial scale. On Wednesday, Ineos Bio, the subsidiaryof a major international chemical firm, broke ground on a plantthat aims to use yet another combination…The Ineos concept has a leg up oversome other approaches in that it anticipates three revenue streams. The factorywill get paid for taking in plant waste or possibly household garbage and willproduce electricity as well as ethanol at a huge savings in carbon dioxideoutput…The plant, near Vero Beach, Fla., adjacent to an Indian River Countylandfill, will begin with plant waste, including palm tree leaves, and willgasify it. This is a common technology that involves heating material in achamber with a controlled amount of oxygen. It produces carbon monoxide andhydrogen, both fuel gases, and carbon dioxide.

 

Gaming the system: Government Electric’swind farms taking advantage of small developer regulatory loopholes, Idahomoves to block amid higher electricity rates IdahoStatesman (2/10/11) reports: These utilities contend sophisticated,well-financed developers such as General Electric Co. are breaking up theirlarge wind farms into small, 10-megawatt projects so they can qualify for thebetter prices. The utilities say the big developers essentially are gaming asystem originally designed to help small, independent power producers…IdahoPower said it has been overwhelmed by these fragmented projects and says theyare contributing to higher costs for its customers. The utility also estimatesit could have 1,100 megawatts of wind power on its system within just a fewyears — more than it needs during low-usage days

 

Let’scompete with China and develop natural resources: PetroChina buys $5.4 billionstake in Canadian shale gasBBC (2/10/11) reports:The Cutbank Ridge deal marks a further step in a developing energy relationshipbetween China and Canada…PetroChina has made other investments in Canadiannatural resources…It took a 60% stake, costing $1.7bn, in two projects owned byAthabasca Oil Sands in 2009…Many in the oil and gas industry see so-calledunconventional gases as an untapped energy resource with greatpotential…However, the exploration of shale rocks for energy is a controversialsubject for many…Environmental groups say that the process used to extract thegas is new and untested, and that the potential health effects on those wholive in areas where shale gas extraction takes place are unknown.

 

In the Pipeline: 2/10/11

Case study on Range Fuels: American taxpayers invested $162 million in a biofuel company and all they have to show for it is 4 million gallons of bio fuel, a closed plant and 4 employees Wall Street Journal (2/9/11) reports: Vinod Khosla stepped in with his hand out. The political venture capitalist founded Range Fuels and in March 2007 it received a $76 million grant from the Department of Energy—one of six cellulosic projects the Bush Administration selected for $385 million in grants. Range said it would build the nation’s first commercial cellulosic plant, near Soperton, Georgia, using wood chips to produce 20 million gallons a year in 2008, with a goal of 100 million gallons. Estimated cost: $150 million…The result has not been another Google. By the end of 2008 with no operational plant in sight, Range installed a new CEO, David Aldous. In early 2009, the company said production was not expected until 2010. Undeterred, President Obama’s Department of Agriculture provided an $80 million loan. In May 2009, Range’s former CEO, Mitch Mandich, explained that the problem was that nobody had figured out how to produce cellulosic ethanol in commercial quantities. Whoops. Read IER’s Tom Pyle’s blog on Range Fuels.

We need to get William Shatner as the Priceline negotiator to call Republicans and start asking for more cuts Washington Post (2/10/11) reports: Top White House priorities would also come under the knife: Key Republicans are proposing to defund President Obama’s high-speed rail initiative, slash clean-energy programs and cut the Office of Science by 20 percent – trims that would deal a direct blow to Obama’s innovation agenda. They would also cut the Environmental Protection Agency by 17 percent…Programs traditionally favored by Republicans would not escape unscathed. The list includes significant reductions in agriculture programs, which benefit many GOP districts. All told, House leaders are aiming to cut programs unrelated to national security by more than $40 billion over the next several months, an unprecedented reduction.

One of the most difficult concepts for greenies to grasp: opportunity cost. Ronald Bailey does a good job laying it out and using CA as an example Reason (2/9/11) reports: Specifically, the Next 10 report finds that the number of jobs in California’s green core economy rose between 2008 and 2009 from 169,000 to 174,000—an additional 5,000 jobs. Green jobs account for just 0.9 percent of California’s overall 18.8 million jobs. Note that California’s unemployment rate is 12.5 percent, which means that 2,270,000 Californians are without work…Unfortunately, when it comes to green jobs both the president and the Next 10 report are focusing on the seen while ignoring the unseen. In his brilliant essay, “What is Seen and What is Unseen,” 19th century French economist Frederic Bastiat pointed out that the favorable “seen” effects of any policy often produce many disastrous “unseen” later consequences. Bastiat urges us “not to judge things solely by what is seen, but rather by what is not seen.”

All hat and no brains: Sec. Salazar argues that solar industry will collapse without continued government support. New York Times (2/9/11) reports: The Obama administration today said accelerated permitting and financial incentives have helped fuel a booming interest in developing wind, solar and geothermal power on public lands but warned that future development will depend on a strong commitment from Congress…At a renewable energy forum hosted by the Interior Department, Secretary Ken Salazar joined officials of major solar companies to tout the success of a Treasury Department grant program and loan guarantees from the Energy Department in spurring 12 renewable energy and transmission projects on public lands in 2010…But Salazar warned lawmakers that investors will need dependable incentives and regulations to continue building. The Treasury grants were extended by Congress in December but expire at the end of the year…Equally important, Salazar said, is Congress’ passage of an 80 percent clean energy standard as outlined by President Obama in his State of the Union address last month…”It’s very difficult for anybody to make a long-term plan when you essentially have a policy framework that’s at risk and changes from day to day, ” Salazar said. “If we can get there with this Congress, we can achieve the clean energy future.”

Waxman parades around a letter from Bush’s EPA administrator that called for carbon caps in 2007. Remember folks, the Bush Administration ‘betrayed capitalism in order to save it’ and also funded woodchip energy New York Times (2/9/1) reports: As a committee of the Republican-controlled House settled in to interrogate the Environmental Protection Agency’s administrator, Lisa P. Jackson, about her agency’s efforts to regulate greenhouse gases like carbon dioxide, a senior House Democrat released three-year old documents showing that the Bush administration’s E.P.A. sought to follow exactly the same course…The documents, including a January 2008 letter to President George W. Bush from Stephen L. Johnson, then the E.P.A. administrator, show that Mr. Johnson had determined that carbon dioxide posed a danger to the country under provisions of the Clean Air Act. He also believed that the president’s cabinet had concurred with such action during a November 2007 meeting, according to the documents, which were released late Tuesday by Representative Henry A. Waxman, Democrat of California…The documents recall a slightly surreal bureaucratic back and forth in late 2007 in which Mr. Johnson sent a proposed endangerment finding to the Office of Management and Budget, where officials refused to open the e-mail with the attachment.

Focus groups must still be saying public health is good branding for the EPA; we should note that all major air pollutants are down over the past 40 years. Los Angeles Times (2/9/11) reports: Republicans on the House energy committee have drafted a bill that would take away the agency’s ability to curb such emissions. EPA Administrator Lisa Jackson says such a move is a threat to public health…The head of the Environmental Protection Agency on Wednesday criticized a bill drafted by Republicans on the House Energy and Commerce Committee, saying it would strip the agency of its ability to curb greenhouse gas emissions…The committee’s proposed Energy Tax Prevention Act of 2011 would “eliminate portions of the Clean Air Act, the landmark law that all American children and adults rely on to protect them from harmful air pollution,” EPA Administrator Lisa P. Jackson told a packed committee hearing…Jackson ‘s aggressive defense of the EPA’s role in dealing with greenhouse gas emissions, which most scientists link to global warming, seemed for the moment to allay concern among environmentalists and many Democrats that the Obama administration would seek compromises on pollution regulation in order to win over a disgruntled business community.

I’d rather see GM spend $9 million on Super Bowl ads than see them waste our tax dollars down the green energy hole USA Today (2/9/11) reports: “We’re keeping all the doors open or ajar,” said Akerson, who took over as CEO in September. “I really do think what is good for this country is good for GM.”…Because other alternative-fuel vehicles won’t come easy or fast, GM also is trying to make the most of what it has on the road. That means finding ways to cut the cost of its electric car technology. The new plug-in Volt, on sale since December, costs $41,000 before government incentives…Akerson said he hopes weight reduction, strides in battery technology and greater production volumes will reduce costs for the next generation without sacrificing quality. “We’re working hard to get cost out of the Volt.”…This year, GM will build 10,000 Volts, which can run more than 25 miles on electricity alone before a gas engine generator kicks in. It’s shooting for 40,000 cars next year, says Mark Reuss, GM’s North American president.

 

February 10, 2011

Case study on RangeFuels: Americantaxpayers invested $162 million in a biofuel company and all they have to showfor it is 4 million gallons of bio fuel, a closed plant and 4 employees WallStreet Journal (2/9/11) reports: Vinod Khosla stepped in with his hand out.The political venture capitalist founded Range Fuels and in March 2007 itreceived a $76 million grant from the Department of Energy—one of sixcellulosic projects the Bush Administration selected for $385 million ingrants. Range said it would build the nation’s first commercial cellulosicplant, near Soperton, Georgia, using wood chips to produce 20 million gallons ayear in 2008, with a goal of 100 million gallons. Estimated cost: $150million…The result has not been another Google. By the end of 2008 with nooperational plant in sight, Range installed a new CEO, David Aldous. In early2009, the company said production was not expected until 2010. Undeterred,President Obama’s Department of Agriculture provided an $80 million loan. InMay 2009, Range’s former CEO, Mitch Mandich, explained that the problem wasthat nobody had figured out how to produce cellulosic ethanol in commercialquantities. Whoops. Read IER’s Tom Pyle’s blogon Range Fuels.

 

We need to get WilliamShatner as the Priceline negotiator to call Republicans and start asking formore cuts WashingtonPost (2/10/11) reports: Top White House priorities would also come underthe knife: Key Republicans are proposing to defund President Obama’s high-speedrail initiative, slash clean-energy programs and cut the Office of Science by20 percent – trims that would deal a direct blow to Obama’s innovation agenda.They would also cut the Environmental Protection Agency by 17 percent…Programstraditionally favored by Republicans would not escape unscathed. The listincludes significant reductions in agriculture programs, which benefit many GOPdistricts. All told, House leaders are aiming to cut programs unrelated tonational security by more than $40 billion over the next several months, anunprecedented reduction.

 

One of the most difficultconcepts for greenies to grasp: opportunity cost. Ronald Bailey does a good joblaying it out and using CA as an example Reason(2/9/11) reports: Specifically, the Next 10 report finds that the number ofjobs in California’s green core economy rose between 2008 and 2009 from 169,000to 174,000—an additional 5,000 jobs. Green jobs account for just 0.9percent of California’s overall 18.8 million jobs. Note that California’sunemployment rate is 12.5 percent, which means that 2,270,000 Californians arewithout work…Unfortunately, when it comes to green jobs both the president andthe Next 10 report are focusing on the seenwhile ignoring the unseen. In hisbrilliant essay, “What is Seen and What is Unseen,” 19th century Frencheconomist Frederic Bastiat pointed out that the favorable “seen” effects of anypolicy often produce many disastrous “unseen” later consequences. Bastiat urgesus “not to judge things solely by what isseen, but rather by what is notseen.”

 

Allhat and no brains: Sec. Salazar argues that solar industry will collapsewithout continued government support. NewYork Times (2/9/11) reports: The Obama administration today saidaccelerated permitting and financial incentives have helped fuel a boominginterest in developing wind, solar and geothermal power on public lands butwarned that future development will depend on a strong commitment fromCongress…At a renewable energy forum hosted by the Interior Department,Secretary Ken Salazar joined officials of major solar companies to tout thesuccess of a Treasury Department grant program and loan guarantees from theEnergy Department in spurring 12 renewable energy and transmission projects onpublic lands in 2010…But Salazar warned lawmakers that investors will needdependable incentives and regulations to continue building. The Treasury grantswere extended by Congress in December but expire at the end of the year…Equallyimportant, Salazar said, is Congress’ passage of an 80 percent clean energystandard as outlined by President Obama in his State of the Union address lastmonth…"It’s very difficult for anybody to make a long-term plan when youessentially have a policy framework that’s at risk and changes from day today," Salazar said. "If we can get there with this Congress, we canachieve the clean energy future."

 

Waxmanparades around a letter from Bush’s EPA administrator that called for carboncaps in 2007. Remember folks, the Bush Administration ‘betrayed capitalism inorder to save it’ and also funded woodchip energy NewYork Times (2/9/1) reports: As a committee of the Republican-controlledHouse settled in to interrogate the Environmental Protection Agency’sadministrator, Lisa P. Jackson, about her agency’s efforts to regulategreenhouse gases like carbon dioxide, a senior House Democrat releasedthree-year old documents showing that the Bush administration’s E.P.A. soughtto follow exactly the same course…The documents, including a January 2008letter to President George W. Bush from Stephen L. Johnson, then the E.P.A.administrator, show that Mr. Johnson had determined that carbon dioxide posed adanger to the country under provisions of the Clean Air Act. He also believedthat the president’s cabinet had concurred with such action during a November2007 meeting, according to the documents, which were released late Tuesday byRepresentative Henry A. Waxman, Democrat of California…The documents recall aslightly surreal bureaucratic back and forth in late 2007 in which Mr. Johnsonsent a proposed endangerment finding to the Office of Management and Budget,where officials refused to open the e-mail with the attachment.

 

Focusgroups must still be saying public health is good branding for the EPA; weshould note that all major air pollutants are down over the past 40 years. LosAngeles Times (2/9/11) reports: Republicans on the House energy committeehave drafted a bill that would take away the agency’s ability to curb suchemissions. EPA Administrator Lisa Jackson says such a move is a threat topublic health…The head of the Environmental Protection Agency on Wednesdaycriticized a bill drafted by Republicans on the House Energy and CommerceCommittee, saying it would strip the agency of its ability to curb greenhousegas emissions…The committee’s proposed Energy Tax Prevention Act of 2011 would"eliminate portions of the Clean Air Act, the landmark law that allAmerican children and adults rely on to protect them from harmful airpollution," EPA Administrator Lisa P. Jackson told a packed committeehearing…Jackson’s aggressive defense of the EPA’s role in dealing withgreenhouse gas emissions, which most scientists link to global warming, seemedfor the moment to allay concern among environmentalists and many Democrats thatthe Obama administration would seek compromises on pollution regulation inorder to win over a disgruntled business community.

 

I’drather see GM spend $9 million on Super Bowl ads than see them waste our taxdollars down the green energy hole USAToday (2/9/11) reports: "We’re keeping all the doors open orajar," said Akerson, who took over as CEO in September. "I really dothink what is good for this country is good for GM."…Because otheralternative-fuel vehicles won’t come easy or fast, GM also is trying to makethe most of what it has on the road. That means finding ways to cut the cost ofits electric car technology. The new plug-in Volt, on sale since December,costs $41,000 before government incentives…Akerson said he hopes weightreduction, strides in battery technology and greater production volumes willreduce costs for the next generation without sacrificing quality. "We’reworking hard to get cost out of the Volt."…This year, GM will build 10,000Volts, which can run more than 25 miles on electricity alone before a gasengine generator kicks in. It’s shooting for 40,000 cars next year, says MarkReuss, GM’s North American president.

In the Pipeline: 2/9/11

IER’s Renewable Mandate Map is catching on; MT, CO, MN and MO all consider removing or weakening their energy and job killing mandates Reuters (2/9/11) reports: Republican legislators in Montana, Colorado, Minnesota and Missouri are separately trying to weaken or dismantle the renewable portfolio standards in their states, which are seen as crucial to U.S. efforts to reduce greenhouse gas emissions and develop a globally competitive clean economy…Officials pushing the bills say that energy prices soar and consumers suffer when utilities are required to allocate a certain percentage of electricity from renewable sources like wind and solar. Clean energy groups counter that lowering the bar on state renewable energy policies would stifle new investment and kill jobs…If passed, the bills would go against the trend among most states to strengthen standards and attract clean energy developers by creating a market for renewables, said Jessica Shipley, a fellow at the Washington-based Pew Center on Global Climate Change.

What more do solar companies want? Despite free money and government mandated market share, First Energy cannot fulfill solar energy quotas WKSU (2/9/11) reports: The mandate to increase the number of solar panels in Ohio is generating some gloom among at least one Ohio utility…For the second time in the two years since the state implemented a requirement that Ohio utilities make use ofsolar and other renewable energy, FirstEnergy has asked for an exemption.   Solar power is sold as solar credits, and FirstEnergy spokeswoman Ellen Raines says there are just not enough to go around –..“We worked hard to purchase every credit that was offered to us, but there were simply not enough available for us to meet our goal.”…Ohio is one of 36 states that have some type of renewable energy mandate. The 2008 law requires one-fourth of the energy used in Ohio come from alternative energy sources by 2025, and half that amount, or 12.5 % be generated within the state.

Who you calling old? President Obama labeled oil and gas companies the energy of yesterday. EV’s were invented in 1830, solar cells were patented in 1888 and wind was commercialized in 1891 The Hill (2/9/11) reports: After recently being branded “yesterday’s energy” by President Obama, the oil-and-gas industry is pushing back at Democratic efforts to roll back tax credits and deductions used by energy companies…Top officials at the American Petroleum Institute (API) on Tuesday said the oil-and-gas industry does not receive favorable tax treatment and called on the administration and Congress to work with the sector to create jobs…“We really believe we are the low-hanging fruit,” said Marty Durbin, the institute’s executive vice president for government affairs. “If the opportunity is provided for us to safely and reliably produce our domestic resources here at home, you’d see enormous benefits to the government in terms of revenue, enormous benefits in terms of jobs.”…He added that it was unfair to tag oil-and-gas companies as an industry of the past, declaring that companies in the field had poured billions of dollars into low- and no-carbon technologies.

Employment Prevention Agency: Rep. Issa has drawn the battle lines in the fight against Obama’s war on affordable energy Politico (2/9/11) reports: Thirty respondents targeted EPA’s so-called “tailoring rule” targeting large emitters of greenhouse gas emissions, such as power plants and refiners. Twenty-three respondents referred to EPA’s overall ability to target greenhouse gas emissions, including from tailpipes. Another 23 targeted EPA’s proposed rules for smog; 20 mentioned EPA lead restrictions; eight targeted EPA nitrogen oxide controls and six went after EPA sulfur dioxide regulations…The U.S. Chamber of Commerce was particularly active in citing EPA regulations, including the tailoring rule, the agency’s overall ability to regulate under the Clean Air Act, proposed particulate matter controls, as well as its lead restrictions and proposed interstate transport rule. The chamber also joined the National Automobile Dealers Association in referring to EPA’s granting California of a waiver from federal rules in light of the state’s stricter standards…Issa issued a statement saying the responses from industry and the overall Republican oversight efforts on regulations “should complement what President Obama has already called on his Administration to do and in concert, lead to a robust and expansive discussion about what the best way forward is to stimulate our economy.”

The writing is on the wall (part 1): Shell and BP close down oil refining operations Bloomberg (2/9/11) reports: Royal Dutch Shell Plc and BP Plc, Europe’s largest oil companies, plan to close and sell refineries in the U.S. and Germany on declining demand for fuels such as gasoline in developed nations…BP plans to sell its 475,000 barrel-a-day Texas City refinery in Texas and its 266,000 barrel-a-day Carson plant in California, the London-based company said on Feb. 1…Shell plans to stop oil-processing at its 110,000 barrel-a- day Hamburg facility in 2012 after failing to find a buyer, the company based in The Hague said on Jan. 12.

The writing is on the wall (part 2): drilling companies are ramping up, but lack of permits in U.S. have them looking elsewhere New York Times (2/9/11) reports: The moratorium is technically over in the gulf, but permitting continues to advance slowly. Six of the 33 rigs idled by the moratorium after the BP spill have left United States waters to drill elsewhere. The rest are sitting in water, with the crews biding their time. Its “Drill baby, drill” — just not in this country, at least not yet…There are other signs of booming business, or at least an industrywide anticipation of booming business. As Eurasia Group noted in a recent research note, drilling companies since November have ordered or are preparing to contract for construction of 18 rigs capable of operating in deep waters. That is the fastest buildup since 2007, when oil prices were galloping and few in the industry were anticipating the virtual collapse in energy demand in 2009.

How many Congressmen does it take to screw up a light bulb market? Rep. Joe Barton begins effort to undo bulb ban with H.R. 91: At least someone is willing to admit when they’ve made a mistake Freedom Action (2/8/11) petition: The ban on standard incandescent bulbs was included in comprehensive legislation passed by a Democratic-controlled Congress and signed into law by Republican George W. Bush in 2007. The ban will go into effect next year, but the legislation can still be stopped. Congressman Joe Barton (R-TX) has recently introduced H.R. 91, the Better Use of Light Bulbs (BULB) Act to amend the original bill, removing the anti-light bulb provisions. Your signatures will be compiled and sent to the Congressmen in your state.

February 8, 2011

AsCape Wind searches for buyers of its expensive energy, the Obama Administrationfast tracks more wind projects USAToday (2/7/11) reports: The Obama administration announced plans Monday tospend $50 million to speed the development of offshore wind farms, aiming tolease wind farms off four Mid-Atlantic states by the end of this year…TheInterior Department said it will expedite environmental reviews for four windprojects off the coasts of Virginia, Maryland, Delaware and New Jersey. Thisspring, it expects to identify other wind energy areas off Massachusetts, RhodeIsland and the South Atlantic region, notably North Carolina…"This initiativewill spur the type of innovation that will help us create new jobs, build aclean energy future and compete and win in the technologies of the 21stcentury," Interior Secretary Ken Salazar said in the announcement, whichnotes President Obama’s goal of generating 80% of U.S. electricity from cleanenergy sources by 2035.

 

Docprescribes moderation for Obama Administration’s wind obsession; argues windshould only be one of many fuel sources, including oil and natural gas FuelFix (2/7/11) reports: A key Republican lawmaker today took aim at the Obamaadministration’s plan to speed up wind projects in the Atlantic Ocean, sayingthe White House is giving short shrift to important offshore oil and gasresources…“Offshore wind is an important part of a robustall-of-the-above-energy plan,” said House Natural Resources Committee ChairmanDoc Hastings, R-Wash. “However it’s unwise for the Obama administration toexclusively focus on developing offshore wind in the Atlantic while ignoringthe need for expanded oil and natural gas production.”..Interior Secretary KenSalazar and Energy Secretary Steven Chu today announced plans to fast trackenvironmental reviews of potential offshore wind development in four areasalong the Atlantic Coast, possibly paving the way to issue wind leases forthose regions later this year. Salazar telegraphed his plan to fast-trackoffshore renewable energy projects in November.

 

HeyObama, why don’t you ‘invest’ your own money in renewable energy? The markethas spoken ­— venture capitalists exit green energyWallStreet Journal (2/7/11) reports: The decline in energy efficiencyinvestments is especially surprising because the total clean-technology ventureinvestments were up. Both the amount invested and deal volume in all ofclean-tech companies rose about 8% last year over 2009, to a total of $3.98billion invested in 278 deals…But investors say that the figures aren’t anindication that people have lost faith in this sector…“Investors have short attentionspans and lots of bets were made in the space in 2007-09,” Steve Foster, apartner at venture firm Altira Group, said in an email. “I expect it to reboundin 2011.”…The energy efficiency category is broad and includes companies thatsupply products and services to utilities to make the electric grid moreefficient, those supplying commercial and residential customers with items suchas energy monitoring or efficient appliances. Efficient lighting, such aslight-emitting-diode products, also falls under the category. Informationtechnology plays, represented the majority of energy efficiency deals in both2009 and 2010

 

Translation: SecretaryLocke is upset that India’s rent seekers are out-maneuvering America’s rentseekers.WallStreet Journal (2/7/11) reports: U.S. Commerce Secretary Gary Locke said he conveyed a"message of great concern" to Indian officials Monday about thecountry’s restrictions on imports of solar-power technology, rules that aremaking it difficult for U.S. firms to enter one of the world’s fastest-growingsolar-energy markets…The complaint highlights how an area targeted forcooperation between the two countries has instead turned into a source ofcontinuing frustration for the U.S…India is planning to add 20,000 megawatts ofsolar power to its grid by 2020 as it seeks to step up electricity capacity tomeet the demands of a growing economy while developing clean-energy sources.The program will disburse about $20 billion in subsidies to power plantdevelopers in coming years. But an Indian regulation that goes into effect inApril will bar those firms from importing any foreign-made solarpanels—the technology that converts sunlight into electricity.

More bad (read: good for free market) news for renewables;UK plans to cut money paid out to renewable sources and intends to review theirfeed-in tariff Bloomberg(2/7/11) reports: The U.K. government signaled today it may cut the prices paidfor electricity from renewable sources, saying it began a “comprehensivereview” of feed-in tariffs introduced last year…Evidence thatlarger-scale solar farms may “soak up” money meant for roof-top panels, smallwind turbines and smaller hydropower facilities prompted the study, theDepartment of Energy and Climate Change said in a statement. The move willallow officials to change above-market fees paid for renewable power by morethan what was already planned in April 2012…The department said it will speedup an analysis of solar projects bigger than 50 kilowatts, with new tariffsmandated “as soon as practical.” That threshold, which includes panels onbuildings, is a “huge step back” for the industry, which expected onlyinstallations in fields to be reviewed early, said Jeremy Leggett, chairman ofSolarcentury Holdings Ltd.

Bjorn Lomborg publishednew study saying green jobs: (pick one) crowd out private investment,misallocate capital, opportunity cost, etc… Reuters(2/7/11) reports: Investments to create new jobs in clean energies riskbackfiring by curbing employment in other parts of the economy, a studycommissioned by Danish "Skeptical Environmentalist" Bjorn Lomborgsaid on Monday…The report also said that jobs in green energies were oftenbased on over-optimistic projections of a fast shift from fossil fuels incoming decades toward cleaner sources such as wind, solar or hydropower…"You can create jobs in clean energies but unfortunately it ends upat the cost of competitiveness elsewhere," Lomborg, head of the CopenhagenConsensus Center, told Reuters of a 33-page study about "defining,measuring and predicting green jobs…The author of 1998 book "The SkepticalEnvironmentalist," Lomborg said many governments had stopped stressingthat climate change was a looming threat to the planet since a 2009 U.N. summitfailed to agree a treaty to cut greenhouse gas emissions.

 

 

February 7, 2011

You can’tsqueeze blood out of a turnip or energy from woodchips, but you can squeezemoney out of a taxpayer WashingtonExaminer (2/6/11) reports: To turn wood chipsinto ethanol fuel, George W. Bush’s Department of Energy in February 2007announced a $76 million grant to Range Fuels for a cutting-edge refinery. A fewmonths later, the refinery opened in the piney woods of Treutlen County, Ga.,as the taxpayers of Georgia piled on another $6 million. In 2008, the ethanolplant was the first beneficiary of the Biorefinery Assistance Program,pocketing a loan for $80 million guaranteed by the U.S. taxpayers…Last month,the refinery closed down, having failed to squeeze even a drop of ethanol outof its pine chips…The Soperton, Ga., ethanol plant is another blemish onethanol’s already tarnished image, but more broadly, it is cautionary taleabout the elusive nature of "green jobs" and the folly of thegovernment’s efforts at "investing" — as President Obama puts it –in new technologies…Late in the Bush administration, corn-based ethanol startedto get a bad rap. Corn for ethanol was crowding out other crops, and food priceswere soaring. Mexicans rioted as tortilla prices spiked. So Bush startedtalking up "advanced biofuels" including "cellulosicethanol": roughly, ethanol distilled from plants that were not also foodproducts. Bush mentioned wood chips and switchgrass in two consecutive State ofthe Union addresses.

Battle toDefine EPA – Greenies say EPA is good for your health, but businessowners say EPA is bad for the economy. We prefer subtle branding: EmploymentPrevention Agency WallStreet Journal (2/7/11) reports: TheEnvironmental Protection Agency, which enforces rules that affect the U.S.economy from factories to farms, is the No. 1 target of complaints frombusiness groups collected by House Republican leaders…EPA rules were cited morethan those from any other agency in more than 100 letters sent by tradeassociations, businesses and some conservative groups to House oversightcommittee chairman Darrell Issa (R., Calif.) in response to his call forbusinesses to identify regulations they deemed burdensome, according todocuments reviewed by the Wall Street Journal. The letters are scheduled forrelease today…the letters will become fuel for a running debate betweenRepublican lawmakers and the Obama Administration over what role, if any,increased federal regulation is playing in the sluggish pace of job creation.The Labor Department reported Friday that non-farm employers added just 36,000jobs in January, far lower than most economists had expected.

Big Laborfights with Big Green over Mojave solar project – meanwhile unemploymentis at 12.3 percent and energy prices remain high; hey, at least they have goodweather LosAngeles Times (2/6/11) reports: Do Californiaconstruction unions raise concerns about building massive solar plants in theMojave Desert because they care about wildlife, water shortages and delicatevegetation? Or is it, as some fellow labor unions charge, a way to extortexpensive contracts from renewable-energy builders?..In the last decade, acoalition calling itself California Unions for Reliable Energy (CURE),organized by the State Building & Construction Trades Council ofCalifornia, has filed more than 1,300 requests for information about endangeredspecies, air pollution and groundwater effects as a part of government permitproceedings for all 12 renewable energy projects planned for the SouthernCalifornia desert…But when the developers of eight of those projects — onegeothermal plant and seven solar plants — agreed to sign expensive contractswith the building trades unions to supply workers, CURE dropped its objectionsto those plants…The contracts give CURE unions — which represent plumbers,pipe-fitters, electrical workers and boilermakers — control over work rules,including hiring. CURE also taps developers for payments as high as $400,000 toa CURE fund promoting the industry.

Betting onthe wrong horse – Oil surges 20 percent while renewables plunge 27percent. What are the odds President Obama doubles down? Boston (2/6/11) reports: A less obvious question is whethermutual fund investors will have the patience to stick with green investingprinciples that have recently left them in the red…The stocks of renewableenergy companies, such as wind and solar power providers, have been big losers.The Clean Edge Global Wind Energy Index, which tracks wind energy stocks, isdown about 27 percent over the last 12 months…That disappointment came as oilcompany stocks and the Standard & Poor’s 500 stock index both surged about20 percent…If his goal is to be realized, Obama and his successors will have tostick with the programs he embraced early in his presidency to support wind andsolar power. The government may even have to raise its commitment, likelythrough new subsidies that could create further opportunities for greeninvestors…Either way, Obama’s speech offered comfort to investors leftwondering how long to stick with it…“The sector is not much loved at themoment,’’ concedes Edward Guinness, co-manager of the Guinness AtkinsonAlternative Energy Fund.

Those oddsare pretty good – Secretary Chu has a mad scientist ‘sunshot’ moment anddemands solar energy be cost competitive by end of the decade NewYork Times (2/4/11) reports: The energysecretary, Steven Chu, was publicly using the phrase “Sputnik moment” twomonths before President Obama picked it up in the State of the Union speech todescribe the need for a national effort to improve competitiveness in atechnical field. Now he has moved on to a new space-challenge term:SunShot…Just as President Kennedy pledged in 1961 that the United States wouldland an astronaut on the moon by the end of that decade — a moonshot— Dr. Chu said the United States should attempt a “sunshot” by aiming tocut the cost of solar power by about three-quarters by the end of this decade,to $1 a watt for utility-scale projects. That would translate to an end-userprice of about 6 cents per kilowatt-hour, he said. “That would make solarenergy cost competitive with other forms of energy without subsidies of anykind,’’ he said in a conference call with reporters on Friday…(The averageretail price of a kilowatt-hour today is about 10 cents. The wholesale price,for electricity generated on a utility scale, varies widely over the course ofthe day and the year.)

Rockefellerwarns that “EPA-bashing” won’t work. But apparently he thinks wandering aroundpretending to stop EPA will Greenwire (2/6/11) reports: "I’m fighting hard to suspend EPAregulations on greenhouse gas emissions for two years, not for the sake ofEPA-bashing, but specifically because we need time to move forward with a majornew program on [carbon capture and sequestration], and we need a serious seatat the table for any other proposals on climate change," he said…Two moredraconian proposals floated by congressional Republicans, moving to shutter EPAor revoke its authority to address greenhouse gases, "simply won’twork," Rockefeller added. "And I promise you that most of the peoplein Washington who are pressing those ideas want a fight more than they want asolution."

Shock: New report finds that 20%of plug-in tax credits for EV’s were filed in error by inmates and Hyundaiowners. Bloomberg (2/6/11) reports: About 20 percent of U.S. tax credits forplug-in electric vehicles and alternative-fuel vehicles were filed in error,according to a government audit…The credits are important to companies such as General Motors Co. and Nissan Motor Co., which have entered the plug-inmarket with the $41,000 Chevrolet Volt and the $32,780 Nissan Leaf,respectively. Buyers of those vehicles can claim up to $7,500 from the federalgovernment, and the companies are relying on the credits to be competitive onprice with gasoline- based models…Most of the erroneous credits, according tothe audit, went to taxpayers who sought benefits for vehicles such as Hyundai Motor Co.’s Sonata and GM’s Buick Enclave that didn’t qualify fortax breaks. Prisoners and IRS employees were among those who erroneouslyclaimed credits…The 20 percent error rate means that about $33 million incredits were claimed in the first seven months of 2010 by taxpayers whoshouldn’t have received the money from the Internal Revenue Service, according to the Treasury Inspector General forTax Administration, which released thereport…“While IRS management did take corrective actions to reduce erroneousclaims when TIGTA brought these process weaknesses to its attention, moreclearly needs to be done,” said J. Russell George, the inspector general.