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On this episode of Unregulated Tom & Mike discuss Biden’s biggest gaffe thus far in the campaign, and what Trump’s first term meant for America.
Links:
• Trump and Biden debate on ‘clean energy’
• Biden accidentally tells the truth about his plans to outlaw oil
In his debate with President Trump on October 22, Democratic Party presidential candidate Joe Biden said he would rid the nation of oil and gas—“over time, over time”. Biden’s costly and radical energy transition from oil and natural gas to renewable energy would hurt the U.S. economy, put the United States on a path to third-world status, subject the nation to rolling blackouts as the nation saw in California this past summer, lose American jobs to offshore countries, and help China to prosper more than ever for the Chinese control the supply chain for the critical metals that the United States needs for solar, wind, and electric vehicles. Biden’s transition is reminiscent of Germany’s Energiewende, or energy transition to renewable energy, where Germans are already paying three times the amount for residential electricity as U.S. homeowners.
After admitting to a desire for the elimination of the oil industry, Biden tried to back-pedal by saying, “because it has to be replaced by renewable energy over time, over time, and I’d stopped giving to the oil industry, I’d stop giving them federal subsidies. You won’t get federal subsidies to the gas, oh, excuse me to solar and wind.”
Tax Deductions vs. Tax Credits (Subsidies)
The Institute for Energy Research has explained the difference between the tax deductions that the oil and gas industry gets and the subsidies that the wind and solar industry gets numerous times and most recently here. The tax credits that wind and solar receive were to spur the advent of young industries. The wind and solar industries are now decades old and should be able to advance without continued support from lawmakers.
The oil and gas industry receive tax deductions, not credits that are mainly targeted to small independent oil and natural gas producers, rather than the major integrated oil companies. One of the tax deductions is provided to all U.S. manufacturing firms, not just oil and gas producers, while the others are for typical business deductions in the tax code akin to research and development costs available to all industries.
Tax credits are something quite different. In the case of wind, producers are literally paid by taxpayers to produce energy, whether it is needed or not. For solar, taxpayers assume a percentage of the capital cost of the systems. These are dollar-for-dollar credits against taxes owed, rather than deductions, which allow for tax obligations to be reduced by whatever tax rate applies.
The advantages and disadvantages of these incentives vary greatly in terms of benefits—revenues to the government, employment, and energy contribution. The small tax benefits available to oil and gas producers pale in comparison to the vast sums of taxpayer money being handed to wind and solar generators, especially when compared to the relative amounts of energy they produce. After billions of dollars to the wind and solar industries, the U.S. economy gets less than 4 percent of its energy from wind and solar, compared to 69 percent from natural gas and oil. And, wood produces more than twice the energy solar does.
Biden on Fracking
At the debate, Biden said, “I do rule out banning fracking because the answer we need, we need other industries to transition, to get to ultimately a complete zero emissions by 2025. What I will do with fracking over time is make sure that we can capture the emissions from the fracking, capture the emissions from gas. We can do that and we can do that by investing money in doing it, but it’s a transition to that.”
Biden appears to have upped his zero emissions economy by 25 years from 2050 to 2025. It would be hard enough and extremely costly to achieve that goal by 2050, much less 25 years sooner.
But rather than dwell on his flub, let’s look at his continued confusion about fracking. In March 2020, in his debate with Bernie Sanders, Bidden said that he would ban new hydraulic fracturing, without qualifying it to federal lands, which he later tried to do. Biden back-tracked on the ban when campaigning in Pennsylvania because the state uses fracking mostly on private lands to produce natural gas. Pennsylvania’s economy runs on energy. The state is the nation’s second-largest producer of natural gas, third-largest producer of coal, 16th-largest producer of crude oil, and third-largest producer of electricity, according to the U.S. Energy Information Administration.
Biden added, for the first time, that he wants to capture the emissions from fracking. To do that he needs a technology called carbon capture and sequestration. A recent study showed that only 6 percent of existing coal and natural gas industrial and power plants could qualify for the current tax credit and economically retrofit to the carbon capture and sequestration technology. That is, only 418 U.S. facilities from over 6,500 could make the transition. Who is Biden trying to kid.
Solar and Wind Energy Jobs
Biden stated, “By the way, the fastest growing industry in America is the electric, excuse me, solar energy and wind…It’s the fastest growing jobs and they pay good prevailing wages, 45, 50 bucks an hour.”
While solar and wind energy, on a capacity basis, are the fastest growing industries in the electric sector, they only provided a combined 9 percent of generation in 2019 after decades of subsidies compared to coal and natural gas that provide 62 percent of generation. Wind and solar are intermittent technologies and generate electricity only when the wind is blowing or the sun is shining, regardless of whether electricity demand is high or low. This means that wind does not have much capacity value; it cannot be dispatched on an as-needed basis as coal, nuclear and natural gas technologies can. Thus, wind and solar get preferential treatment when they are available so that state mandates can be met and their industries can receive tax credits, which in the case of wind, literally pays them to generate electricity, regardless of whether the generation is needed at that time.
In reality, Biden’s proposed transition from oil and gas to renewable energy would result in lower pay for blue-collar workers and possibly lower benefits as well. According to data from the Bureau of Labor Statistics for 2019, the median annual pay for petroleum engineers was $137,210—three times that for solar panel installers ($44,890) and 2.6 times higher than the average salary for a wind turbine technician ($52,910). Even petroleum pump system operators and refinery operators ($72,570) made more than solar and wind technicians by 40 to 60 percent.
Assuming that solar and wind employees work 40 hour weeks over 52 weeks of the year and using the above salaries, solar installers would make $21.58 an hour and wind turbine technicians would make $25.44 an hour—twice what Biden is boasting his plan would produce. Plus, he would disrupt families, forcing them to move and the breadwinners to retrain for an entirely different work force.
Conclusion
Biden, if elected, would ruin America’s energy system, force the country toward third-world status, and hand China supremacy with its command of the critical elements needed for renewable energy technology, weapons, cell phones, and other technologies. Americans have a choice to keep the nation’s low cost and abundant energy resources fueling the U.S. economy or making a costly and radical transition to an energy future that some countries have tried only to see their follies.
*This article was adapted from content originally published by the Institute for Energy Research.
For more information on these issues check out AEA’s Vote Energy 2020
On this episode of Unregulated Tom & Mike postulate a path to president’s second term.
Links:
• Trump sees approval rating increase, majority expect him to beat Biden: poll
• Pebble Mine Could Reduce Dependence on China for Critical Metals: poll
• Democrats “gas lighting” themselves
• Joe Biden “shoot them in the leg” quote
• President Trump plays Biden and Kamala’s comments about banning fracking to the crowd
• Sen Lindsey Graham (R-SC) Closing Statement at Confirmation Hearing for Judge Amy Coney Barrett
• ACB “needed a glass of wine” clip
• “WE DRANK BEER. I LIKED BEER. BOYS AND GIRLS.” – Brett Kavanaugh fires back
• Pelosi: GOP still doesn’t recognize ‘gravity’ of pandemic
• Blitzer presses Pelosi on why she hasn’t taken Trump stimulus deal
The U.S. Senate, the only stronghold in Congress, must resist temptation to pass unnecessary handouts to special interests before – and after – the election.
WASHINGTON DC (October 22, 2020) – The American Energy Alliance (AEA), the country’s premier pro-consumer, pro-taxpayer, and free-market energy organization, issued a letter to Senate Leader Mitch McConnell and many of his Republican colleagues urging them to stand strong against the powerful wind lobby. AEA, along with forty co-signing organizations, are seeking a final end to the production tax credit (PTC) for intermittent electricity generated by windmills. Subsidized wind power increases electricity costs, harms taxpayers, and destabilizes the electric grid. It is most beneficial to wealthy wind developers – many of which are foreign owned – who are able to reduce their tax rate at the expense of the rest of the taxpayers and ratepayers.
The PTC has drained tens of billions of dollars while foisting unreliable energy onto the grid. It has now been extended a dozen times. Enough is enough. AEA fully supports legislative efforts like S. 4678 / H.R. 8359, the PTC Elimination Act, proposed by Senators Lankford (OK), Cramer (ND), Hoeven (ND), Capito (WV), and Representative Marchant (TX) to finally end this unnecessary tax credit. In a second letter, AEA informed Members of Congress it will score co-sponsorship of these important measures in its American Energy Scorecard.
Thomas Pyle, President of the American Energy Alliance, issued the following statement:
“While America works its way back to economic strength following the coronavirus pandemic, leave it to the wind lobby to add more drag. At a time when the fundamentals of value and low costs are at a premium, undermining both with a perpetuation of the PTC could not be more foolish. The wind industry claims it is no longer an infant and is now the least expensive source of new electricity generation. It’s time for them prove it by standing on their own two feet. American families, who are facing continued economic uncertainty, shouldn’t be forced to reach into their pockets to subsidize Big Wind.
The wind lobby has shamelessly attempted to capitalize on the pandemic to coax Congress into breaking their deal to phase out the PTC this year. The PTC has run its course. It’s time to move on.”
The full letter and list of signatories can be viewed here.
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According to Democratic Party presidential nominee Joseph Biden’s carbon plan, “he will demand that Congress enacts legislation in the first year of his presidency that: 1) establishes an enforcement mechanism that includes milestone targets no later than the end of his first term in 2025, 2) makes a historic investment in clean energy and climate research and innovation, 3) incentivizes the rapid deployment of clean energy innovations across the economy, especially in communities most impacted by climate change.”
The mechanism Biden refers to would most likely be a carbon tax, which Biden has said he would support, or a cap and trade program, which is implicitly a carbon tax. The latter was previously known as the “cap and tax” program when it was dismissed by Congress during the Obama Administration. In either case, a Biden tax on greenhouse gas emissions would significantly increase household costs such as cooling and heating, transportation, and even groceries as the United States gets 80 percent of its energy from fossil fuels—coal, oil, and natural gas. It would also raise the cost of manufacturing in the United States.
Canada’s Carbon Tax
Our Northern neighbor has some experience with a carbon tax as well as other mechanisms for reducing carbon dioxide emissions. In 2019, Canada implemented a carbon tax under the Greenhouse Gas Pollution Pricing Act supported by Prime Minister Justin Trudeau. The carbon tax started at $20 per metric ton in 2019, and is scheduled to increase at $10 per metric ton per year until reaching $50 per metric ton in 2022. The carbon tax will stay at that level unless the legislation is revisited and revised.
A $20 per metric ton carbon tax equates to a 16.6 cent per gallon surcharge on gasoline. In 2022, the $50 per ton carbon tax would increase Canadian gasoline prices by about 42 cents per gallon or about 8 percent. The price of coal in 2022 would more than double with a carbon tax surcharge of about $100 per metric ton. Natural gas prices would increase by about 10 cents per cubic meter in 2022 compared to current prices of around 13 cents per cubic meter—about a 75 percent increase.
Canada expects the carbon tax to increase the demand for carbon-free electricity. In 2019, however, Canada generated 58 percent of its electricity from hydroelectric power, 15 percent from nuclear, and 7 percent from renewable energy. Only 18 percent of its electricity came from fossil fuels—coal, oil, and natural gas. The majority of Canada’s carbon dioxide emissions are not from the generating sector, but from the industrial sector, which is subjected to an Output-Based Allocations system (similar to cap and trade).
Those carbon taxes, which at $50 per metric ton seem rather large, are insufficient for the country to meet its emission-reduction targets under the Paris climate accord. Canada’s parliamentary budget officer says the country’s carbon tax would have to increase over the coming years to meet emission-reduction targets. Canada’s budget officer, Yves Giroux, estimates the tax will have to increase to $117 per metric ton by 2030 if it is applied to all industries. And, if the government caps the tax at $50 per metric ton for large industrial emitters, households and other sectors of the economy would have to cover the difference, requiring a tax of $289 per metric ton in 2030.
Those are hefty tax increases.
Biden’s Commitment to the Paris Accord
If elected Biden will implement something similar, as his plans return the United States to the Paris Accord agreed to by the Obama Administration. The mechanism will be another tax imposed on American families, and just as Canada is finding, the carbon tax will have to increase to enormous numbers for the Obama-Biden Paris accord commitments to be met, which will hurt U.S. families and bog-down the economy that is trying to recover from the coronavirus pandemic. And, while the United States will have to buckle under to suffer severe cost increases in anything made from or consuming fossil fuels, China will continue emitting more carbon dioxide emissions as it builds 250 gigawatts of new coal-fired power plants, adding to the over 1,000 gigawatts of coal-fired capacity it already has. China is building coal-fired plants to get its economy rolling from the downturn caused by the coronavirus pandemic. Those coal plants could easily last half of a century.
A carbon tax would not be a one-time deal. It will continue and increase until the United States will no longer consume the fossil fuels currently supplying 80 percent of our energy. Yet that enormous change in the U.S. energy sector will result in only a miniscule change in temperature. According to Bjorn Lomborg, U.S. climate policies, in the most optimistic circumstances, fully achieved and adhered to throughout the century, will reduce global temperatures by just 0.031°C (0.057°F) by 2100. This is unnoticeable. Further, if all countries comply with their Paris accord commitments, he estimates the total temperature reduction to be 0.048°C (0.086°F) by 2100. It will be a lot of pain for very little gain, as the energy necessary for modern life becomes more and more expensive for those who have it and less available to those in the world who are striving to use energy to lift themselves from poverty.
Conclusion
Biden has plans for a lot of tax increases, some of which are documented on his website, but others are not as obvious when he uses words such as a “mechanism” that requires legislation. Do not be fooled by the language, which disguises the means by which he seeks to fundamentally transform the entire United States energy system. There is a reason why he needs Congress to pass it. He cannot implement a tax by himself.
*This article was adapted from content originally published by the Institute for Energy Research.
For more information on these issues check out AEA’s Vote Energy 2020 election hub.
Last month the American Energy Alliance released its 2020 American Energy Scorecard results for the House of Representatives. The AEA scorecard scores voting and co-sponsorship decisions on legislation affecting energy and environmental policy, educating voters on how their representatives vote and holding members accountable for those decisions.
The scorecard is guided by principles such as:
This year’s scorecard compiled 19 votes and 2 co-sponsorship decisions from the 116th Congress. 74 House members achieved a 100% score.
While many members failed to achieve a perfect score for various reasons, the most concerning scores came from those representing districts where the energy industry is a major economic driver and job creator. One of these members is Rep. Kendra Horn, whose Oklahoma 5th Congressional District covers most of Oklahoma City and some nearby counties. Oklahoma City is one of the energy capitals of the United States, home to numerous energy companies, including several Fortune 500 firms, supporting tens of thousands of high paying jobs in the city. According to the Greater Oklahoma City Chamber of Commerce, more than a quarter of Oklahoma City GDP comes from the oil and gas industry.
Rep. Horn did not just score poorly. Her 5% score placed her at the bottom of the body along with extreme anti-energy members like Green New Deal creator Rep. Alexandria Ocasio-Cortez. Rep. Horn is clearly out of step with her constituents in the 5th district. That might pass in New York City, but it’s not OK in the Sooner State.
It also cannot be considered an accident. AEA notifies all members in advance of votes that will be scored. A member disagreeing with AEA’s position on one or two votes might be understandable, but Rep. Horn shows a consistent record of votes harming the American energy industry and consumers alike. Her record of voting against the interests of her constituents should be on the mind of every voter in 2020 as ballots begin to arrive in mailboxes in the coming days.
Last month the American Energy Alliance released its 2020 American Energy Scorecard results for the House of Representatives. The AEA scorecard scores voting and co-sponsorship decisions on legislation affecting energy and environmental policy, educating voters on how their representatives vote and holding members accountable for those decisions.
The scorecard is guided by principles such as:
This year’s scorecard compiled 19 votes and 2 co-sponsorship decisions from the 116th Congress. 74 House members achieved a 100% score.
While many members failed to achieve a perfect score for various reasons, the most concerning scores came from those representing districts where the energy industry is a major economic driver and job creator. One of these members is Rep. Conor Lamb, whose Pennsylvania 17th Congressional District covers a swath of northwestern Pennsylvania outside Pittsburgh. The district lies in the heart of the Marcellus shale basin, where natural gas production has exploded over the last decade. In 2019, Pennsylvania produced a record 6.8 trillion cubic feet of natural gas, making the state the second largest gas producer in the country.
Rep. Lamb did not just score poorly. His 5% score placed him near the bottom of the body along with extreme anti-energy members like Green New Deal creator Rep. Alexandria Ocasio-Cortez. Rep. Lamb is clearly out of step with his constituents in the 17th district. His voting record might pass in New York City, but it’s not acceptable for his energy-producing district.
It also cannot be considered an accident. AEA notifies all members in advance of votes that will be scored. A member disagreeing with AEA’s position on one or two votes might be understandable, but Rep. Lamb shows a consistent record of votes harming the American energy industry and consumers alike. His record of voting against the interests of his constituents should be on the mind of every voter in 2020.
Last month the American Energy Alliance released its 2020 American Energy Scorecard results for the House of Representatives. The AEA scorecard scores voting and co-sponsorship decisions on legislation affecting energy and environmental policy, educating voters on how their representatives vote and holding members accountable for those decisions.
The scorecard is guided by principles such as:
This year’s scorecard compiled 19 votes and 2 co-sponsorship decisions from the 116th Congress. 74 House members achieved a 100% score.
While many members failed to achieve a perfect score for various reasons, the most concerning scores came from those representing districts where the energy industry is a major economic driver and job creator. One of these members is Rep. TJ Cox, whose California 21st Congressional District covers much of the San Joaquin Valley in the center of the state. Despite the PR efforts of environmentalists, California remains a major oil and gas producing state. The state’s production is concentrated in the San Joaquin Valley, where the industry supports tens of thousands of jobs and contributes over $12 billion in GDP.
Rep. Cox did not just score poorly. His 0% score placed him at the bottom of the body along with extreme anti-energy members like Green New Deal creator Rep. Alexandria Ocasio-Cortez. Rep. Cox is clearly out of step with his constituents in the 21st district. This kind of voting record might pass in New York City or San Francisco, but not in the Central Valley.
It also cannot be considered an accident. AEA notifies all members in advance of votes that will be scored. A member disagreeing with AEA’s position on one or two votes might be understandable, but Rep. Cox shows a consistent record of votes harming the American energy industry and consumers alike. His record of voting against the interests of his constituents should be on the mind of every voter in 2020.
Last month the American Energy Alliance released its 2020 American Energy Scorecard results for the House of Representatives. The AEA scorecard scores voting and co-sponsorship decisions on legislation affecting energy and environmental policy, educating voters on how their representatives vote and holding members accountable for those decisions.
The scorecard is guided by principles such as:
This year’s scorecard compiled 19 votes and 2 co-sponsorship decisions from the 116th Congress. 74 House members achieved a 100% score.
While many members failed to achieve a perfect score for various reasons, the most concerning scores came from those representing districts where the energy industry is a major economic driver and job creator. One of these members is Rep. Xochitl Torres Small, whose New Mexico 2nd Congressional District covers the southern half of New Mexico. The district includes New Mexico’s portion of the Permian Basin, which has seen a boom in oil and gas production over the last several years. Since 2012, New Mexico oil production has increased 250%, with New Mexico now the third largest oil producing state. The production increase has resulted in about $800 million in new revenue for the state because of Permian oil production on state lands. A recent report found oil and gas supports 134,000 jobs in New Mexico, 12% of all jobs in the state, and the industry represents almost 16% of the state’s economy.
Given the importance of energy to her state, Rep. Torres Small’s score is shocking. She did not just score poorly. Her 0% score placed her at the bottom of the body along with extreme anti-energy members like Green New Deal creator Rep. Alexandria Ocasio-Cortez. Rep. Torres Small is clearly out of step with her constituents in the 2th district. That might pass in New York City, but in an energy state like New Mexico this record is unacceptable.
It also cannot be considered an accident. AEA notifies all members in advance of votes that will be scored. A member disagreeing with AEA’s position on one or two votes might be understandable, but Rep. Torres Small shows a consistent record of votes harming the American energy industry and consumers alike. Her record of voting against the interests of her constituents should be on the mind of every voter in 2020.
Last month the American Energy Alliance released its 2020 American Energy Scorecard results for the House of Representatives. The AEA scorecard scores voting and co-sponsorship decisions on legislation affecting energy and environmental policy, educating voters on how their representatives vote and holding members accountable for those decisions.
The scorecard is guided by principles such as:
This year’s scorecard compiled 19 votes and 2 co-sponsorship decisions from the 116th Congress. 74 House members achieved a 100% score.
While many members failed to achieve a perfect score for various reasons, the most concerning scores came from those representing districts where the energy industry is a major economic driver and job creator. One of these members is Rep. Colin Allred, whose Texas 32nd Congressional District covers the northern suburbs of Dallas. The energy industry is a major employer in the Dallas area and the metroplex is home to the headquarters of many energy firms, including several Fortune 500 firms, supporting tens of thousands of high paying jobs in the metroplex.
Rep. Allred did not just score poorly. His 11% score placed him near the bottom of the body along with extreme anti-energy members like Green New Deal creator Rep. Alexandria Ocasio-Cortez. Rep. Allred is clearly out of step with his constituents in the 32nd district. That might pass in New York City, but it’s not acceptable in Texas.
It also cannot be considered an accident. AEA notifies all members in advance of votes that will be scored. A member disagreeing with AEA’s position on one or two votes might be understandable, but Rep. Allred shows a consistent record of votes harming the American energy industry and consumers alike. His record of voting against the interests of his constituents should be on the mind of every voter in 2020.
American Energy Alliance is a registered trademark of The American Energy Alliance.
