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China Would Be Sole Beneficiary of Biden’s $2 Trillion Climate Plan

July 20, 2020 by 2 Comments

In a speech in Wilmington, Delaware, Democratic Party presidential candidate Joe Biden built on his plans for reviving the economy in the wake of the coronavirus pandemic with a focus on significantly cutting fossil fuel emissions. The proposal attempts to eliminate carbon dioxide emissions from the power grid by 2035. Such an attempt might be a renewables-only approach or a net-zero carbon dioxide emissions goal that would include nuclear energy and carbon-capture technology. But Biden’s $2 trillion proposal is not a policy to recover from the devastation of the COVID-19 recession because the time goals are not consistent and changing the energy portfolio of the nation is an extremely costly endeavor that requires reallocating labor, capital, and innovation. Those reallocation costs, especially retraining people for new jobs, will slow the recovery. With a debt of $26 trillion, the country cannot afford a “clean energy standard.”  

Instead, Biden should watch closely what China is doing, which will probably make China the only G20 country whose economy will grow in 2020. China’s imports and exports are indicative of this. Demand for China’s medical products has surged during the pandemic. China’s textile exports including masks increased by 32 percent during the first six months of this year, with medical devices jumping by almost 50 percent. 

China’s Coal Plant Construction

China is constructing coal-fired power plants to stimulate its economy, as it did after the global recession in 2009. China currently has 249.6 gigawatts of coal-fired capacity under development (97.8 gigawatts under construction and 151.8 gigawatts in planning)—a 21 percent increase over yearend-2019 (205.9 gigawatts). The amount of coal-fired generation under construction exceeds that of the U.S. entire coal fleet. Once built, China’s total coal-fired capacity will equal or be larger than the total generating capacity of all sources—natural gas, coal, nuclear and renewables including hydro—in the United States. Clearly, China is not worried about reducing its carbon dioxide emissions, which the Paris Agreement allows China to grow until 2030, when carbon dioxide emissions are supposed to peak in that country.  China already consumes over half the world’s coal annually. 

China’s plans for new coal plants have steadily increased since 2019, after the central government began relaxing restrictions on new coal plant development. Between January 1 and June 15, China permitted more coal plants (17.0 gigawatts) for construction than it permitted in all of 2018 and 2019 combined (12.0 gigawatts). Almost half (7.9 gigawatts) of the 17.0 gigawatts permitted in 2020 are to power long-distance transmission lines from coal plants in the West to demand centers on the coast. Three-fourths (12.7 gigawatts) of the 17.0 gigawatts are sponsored by local companies, and many are being fast-tracked: units 3–4 of the Hohhot Jinshan coal plant in Inner Mongolia went from announced to construction in just three months. 

Despite overcapacity of generation in China, coal remains a significant part of the country’s planning mix, led by local leaders eager to capitalize on the readily available credit and central government support for stimulus spending. Investment in utilities from January to May 2020 was 14 percent above the same period in 2019. State-owned banks lend to state-owned utilities with little review and increased local lending quotas and calls to boost spending to offset the economic impact from COVID-19 encourage even greater lending.

China’s Imports

China’s demand for iron ore and coal has also surged. China is importing commodities critical to its infrastructure: iron ore imports into China grew by 10 percent over the first half of the year, coal by 13 percent and liquefied natural gas (LNG) by 3 percent. Australia accounts for up to 60 percent of China’s annual iron ore imports and more than 30 percent of its coal imports. 

China’s crude oil imports surged 34.4 percent year on year to an all-time high of 12.99 million barrels per day in June as Chinese buyers who secured low-cost oil in late March received their deliveries in June. It was the first time China’s monthly crude imports surpassed 12 million barrels per day, and was 14.6 percent higher than the previous record high of 11.34 million barrels per day in May. The record June volume brought imports for the first half of 2020 to 10.82 million barrels per day—up 9.3 percent on the year, despite an eight-month low of 9.72 million barrels per day in March due to the coronavirus pandemic. China is fueling its economy with oil and filling its strategic stockpiles with low-cost crude.

Conclusion

While China is burning more coal, more oil, and more natural gas to fire its manufacturing and development, Biden’s approach is to unilaterally disarm the United States, which became self-sufficient in energy in 2019 for the first time in over 60 years. Expensive, complicated, pie-in-the-sky programs will only push the United States into more debt, and make us more dependent on others for our energy after successfully achieving energy independence after six decades of foreign energy dependence.  Biden should watch more closely what China is doing, and recognize that America’s hard-won energy dominance is an asset in the U.S. economy’s coronavirus recovery and future growth potential.

*This article was originally published by the Institute for Energy Research.

For more information on these issues check out AEA’s Vote Energy 2020 election hub.

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AEA Applauds NEPA Modernization Announcement

July 15, 2020 by Leave a Comment

Long overdue overhaul will get American infrastructure projects out of the courtroom and onto the construction site.

WASHINGTON DC (July 15, 2020) – Today, the American Energy Alliance voiced its support for the White House’s Council on Environmental Quality (CEQ) final rule updating regulations implementing the procedural provisions of the National Environmental Policy Act (NEPA).

When it was first signed into law in 1970, NEPA served as a way for federal agencies to consider the impacts of their actions, helping them to balance a range of interests. Today, NEPA is a massively expensive and time-consuming liability that threatens to derail crucial infrastructure and energy development projects. NEPA, as it currently operates, is the model of an outdated regulation that has been exploited beyond recognition from its original purpose.

After forty years, an overhaul was clearly overdue, and today’s announcement paves the way forward to de-politicize America’s permitting and infrastructure improvement process.

Thomas Pyle, President of the American Energy Alliance, issued the following statement in support of the announcement:

“The American Energy Alliance applauds the administration’s modernization of the National Environmental Policy Act (NEPA). NEPA is one of the most inefficient, growth-slowing, infrastructure-stopping laws we have in the U.S., desperately in need of this modernization. Americans need, and deserve, updated infrastructure to get them safely where they need to go and ensure affordable, reliable energy arrives to their cities, communities, businesses, and homes. Radical environmental groups have twisted the intent behind NEPA and leveraged the legal system to their advantage in a coordinated effort to slow and stop progress. This long overdue modernization will get American infrastructure projects out of the courtroom and onto the construction site.”

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MSC Responds to Pennsylvania Attorney General Report on Natural Gas Industry

July 15, 2020 by 1 Comment

The Office of the Attorney General of Pennsylvania recently put out a controversial Grand Jury Report on the practice of hydraulic fracturing in the Commonwealth. The report, which makes eight policy recommendations and admonishes both the natural gas industry and state regulators at the Department of Health and Safety (DHS) and the Department of Environmental Protection (DEP), fails to accurately characterize current state law on these issues and prescribes policy changes that would amount to a de facto ban on natural gas drilling by making it nearly impossible to site a well. All of this is done under the guise of consumer protection. 

The report describes an environment of lax regulation, unsafe practices, and poor oversight. This description defies reality. In a seven-page letter, Marcellus Shale Coalition President David Spigelmyer examined the recommendations within the context of current legislation, this blog post aims to characterize both the policy prescriptions offered in the report,  and their refutations from the MSC coalition letter. 

The eight policy prescriptions made in the report were:

  1. “Expand the no-drill zones”

The grand jury report asserts that the 500 foot minimum setback distance should be increased to 2,500 feet because “all the impacts of fracking activity are magnified by distance.” Spigelmyer on the other hand argues that Pennsylvania already has the second farthest setback rule in the country, and that a 2,500 foot setback would make a large portion of Pennsylvania natural gas effectively unreachable, and curtail the property rights of thousands of landowners in the state. 

  1. “Stop the chemical cover-up”

On this point, the report emphasizes the need for openness about what chemical compounds are used in fracking processes. “Let’s end this camouflage, provide transparency to the public, and mandate disclosure of all chemicals used in any aspect of unconventional drilling, so their possible hazards can be properly considered.” This is all well and good, transparency is important, and people should be able to find out what chemicals are being used in their direct vicinity. But, as Spigelmyer points out, it’s a moot point because, “Shale gas operators are already required to disclose all chemicals used in the drilling and hydraulic fracturing process.” This disclosure is already required by PA Act 13 of 2012. The grand jury report appears to have been written with a limited view of the existing law. 

  1. “Regulate the pipelines”

The report claims that gathering lines, the network of smaller pipes that bring gas into larger more central pipelines, are “almost completely unregulated.” But, as the letter asserts, their construction is heavily regulated in the state, and they are also subject to “rigorous onsite inspections by PA DEP and conservation district personnel.” This is a far cry from the “completely unregulated” pipelines that the grand jury report characterizes. 

  1. “Add up the air pollution sources”

The report suggests aggregating all sources of pollution in an area for purposes of air quality assessment. But, according to the letter, the standards established by the PA DEP exceed federal emissions standards, and are rigorous for both midstream facilities and well pads. 

  1. “Transport the toxic waste more safely”

The report claims that it is because of federal exemptions that wastewater from fracking is transported with the label of “residual waste” rather than “hazardous waste”, but Spigelmeyer argues that the reason these trucks are placarded as such is because that is exactly what they contain. 

  1. “Deliver a real public health response”

The report also seeks to respond to fracking as a public health crisis, and to “collect sophisticated data and conduct sophisticated analysis.” Spigelmyer’s response was that, “Employees of the natural gas industry live in the very communities in which we operate. They have every incentive to ensure that they, and their families, are healthy and that development is done safely.” Natural gas companies are bought into their communities. They create jobs, bring in economic activity, and provide necessary electricity. These are not distant operators divorced from the on the ground situation, rather they themselves are members of the communities in which they work. Because of this, the letter emphasizes that studies of health impacts are important to the natural gas industry as well. “The shale gas industry has already expressed its support for a broad-based, impartial approach to studying health impacts that properly takes into account all risk and environmental factors.” There is no disagreement on the need for studies and data, it appears that any disagreement that exists is rather a difference of interpretation of the results of those studies. 

  1. “End the revolving door”

The report says that, “DEP employees, once trained about fracking at government expense, are often poached away to much higher-paying jobs in the oil and gas industry.” It also says that, “A revolving door rule would reduce that potential conflict by requiring a period of delay before taking a new job in the regulated industry.” According to Spigelmyer, “the state Ethics Act already establishes appropriate ‘cooling off’ periods for former state employees.” He points out that many businesses try to hire experienced workers, and that this often means hiring them from government agencies, but that this does not inherently lead to unethical behavior. 

  1. “Use the criminal laws”

The report suggests that because DEP has been hesitant to use its prosecutorial powers against natural gas companies, jurisdiction over these issues should be extended to the state AG’s office. The letter on the other hand points out that jurisdiction to prosecute these cases falls to individual counties’ district attorneys, and that “there does not appear to be any rational justification to extend jurisdiction of one segment of one industry to the Attorney General.” It also points out that an agency that seeks additional jurisdiction should have a firm understanding of the subject matter, which the report itself shows is lacking at the AG’s office. 

Conclusion

Although media coverage of the Grand Jury Report makes it sound as though systemic corruption and dangerous practices in the industry were just discovered, this couldn’t be further from the truth. As Spigelmyer’s letter lays out in detail, the conclusions drawn by the report were often off base, out of touch with current law, and politically motivated.

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Democrats Officially Declare War on Affordable Energy

July 6, 2020 by 1 Comment

Last week the “climate crisis” committee released their majority staff report purporting to solve climate change.  The report is packed full of buzzwords, but the core message is clear: more expensive energy.  While the environmental movement has long been clear about their goals of increasing energy costs in order to force citizens to use less, the political drawbacks of such a message led most Democrats to keep that part under wraps.  With this climate report, though, the mask is off.

The policy report includes just about every expensive climate proposal you’ve ever heard of: net-zero CO2 emissions from electricity, all vehicles zero-emission by 2035, a carbon tax, massive spending on new transmission lines, more subsidies for wind, solar and electric vehicles (EVs), national renewables mandates, ending oil and gas production on federal lands, and on and on for hundreds of pages.  It is not so much a considered list of policy ideas as a laundry list of everything that came to mind.  No green legislation left behind.

One thing you won’t find mention of in this report is cost.  These are all very expensive proposals.  A University of Chicago study last year estimated that state renewable electricity mandates increased electricity rates by about 17%, this report would impose a national mandate more stringent than current state mandates.  A recent estimate is $125 billion in investment needed by 2030 for utilities to cope with current anticipated EV demand growth, this report would mandate far more EVs than that estimate contemplates.  Solar and wind tax credits already cost taxpayers billions of dollars a year, this report would extend and expand subsidies.  A carbon tax would make every single good more expensive.  The costs are almost incalculable: between higher energy costs, higher costs for goods, and higher government spending, there are many trillions of dollars in costs in this policy report.  Probably why the report does not even make a pretend effort to calculate them.

These costs are not paid for by “the rich” or by “corporations.”  Ultimately individual taxpayers and consumers pay these costs.  The costs of renewable mandates and building new transmission lines are not paid by the utilities, all those costs are passed through to ratepayers.  EV mandates don’t come out of the auto companies’ pockets, every car is made more expensive.  A carbon tax is not paid by big companies, they pass the cost on to their customers by raising prices.  Government spending and subsidies ultimately have to come from taxpayer wallets, or be borrowed from their children’s future.  The cumulative proposals in this policy report would impoverish Americans even as they damage the economy.

This policy report was written without input from the Republicans on the committee, and it shows.  None of these proposals are bipartisan, nor is any of this going to pass a Republican directed Senate.  But this partisanship does set up a very clear divide for voters concerned about energy.  This climate report is the Democratic Party road map for energy policy when they next take power.  Democrats in moderate districts or representing energy-producing States may talk out of one side of their mouth to sound reasonable and pragmatic, but fundamentally this climate policy report is what you are supporting when you vote for a Democrat for Congress.  

Reps. Conor Lamb, Lizzie Fletcher and others may represent traditional energy-producing districts, but they support Nancy Pelosi in Washington, and this policy report is Nancy Pelosi’s road map.  When voting in November, this radical and wildly expensive policy report cannot be ignored.

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Key Vote NO on H.R. 2

June 30, 2020 by Leave a Comment

The American Energy Alliance urges all members to opposed H.R. 2 the Moving Forward Act.

This legislation is not good faith effort to advance transportation policy.  Rather the legislation seeks to hijack the required surface transportation reauthorization process to attach a slew of extraneous green provisions drawn from the unworkable Green New Deal.  This mirrors the equally shameless effort from earlier this year to hijack the coronavirus relief legislation to advance many of the same green provisions that have been attached to H.R. 2.

The various wasteful subsidies and handouts packed into this $1.5 trillion legislation are bad policy in of themselves, but jeopardizing the passage of a transportation reauthorization in an attempt to spread these special interest handouts around is irresponsible.  This legislation cannot pass the Senate, which makes it merely a signaling exercise, hardly what is needed during the uncertain economic times the country is facing.

The House should return to the drawing board and work through the normal bipartisan transportation reauthorization process.  Perhaps that can happen once this signaling bill goes nowhere.

The AEA urges all members to support free markets and affordable energy by voting NO on H.R. 2.  AEA will include this vote in its American Energy Scorecard.

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Key Vote NO on H.R. 2

June 30, 2020 by Leave a Comment

The American Energy Alliance urges all members to opposed H.R. 2 the Moving Forward Act.

This legislation is not good faith effort to advance transportation policy.  Rather the legislation seeks to hijack the required surface transportation reauthorization process to attach a slew of extraneous green provisions drawn from the unworkable Green New Deal.  This mirrors the equally shameless effort from earlier this year to hijack the coronavirus relief legislation to advance many of the same green provisions that have been attached to H.R. 2.

The various wasteful subsidies and handouts packed into this $1.5 trillion legislation are bad policy in of themselves, but jeopardizing the passage of a transportation reauthorization in an attempt to spread these special interest handouts around is irresponsible.  This legislation cannot pass the Senate, which makes it merely a signaling exercise, hardly what is needed during the uncertain economic times the country is facing.

The House should return to the drawing board and work through the normal bipartisan transportation reauthorization process.  Perhaps that can happen once this signaling bill goes nowhere.

The AEA urges all members to support free markets and affordable energy by voting NO on H.R. 2.  AEA will include this vote in its American Energy Scorecard.

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Democrats $1.5 Trillion Infrastructure Plan Kicks Bipartisanship and Common Sense to the Curb

June 30, 2020 by 1 Comment

H.R. 2 has lost its way becoming the latest vehicle for Green New Deal policies

WASHINGTON DC (June 30, 2020) – Today, the American Energy Alliance (AEA) voiced its opposition to H.R. 2, the “Moving Forward Act”, a $1.5 trillion infrastructure package currently under consideration before the U.S. House of Representatives. What traditionally serves as a bipartisan effort for highway funding has taken a wrong turn and morphed into a limousine of green goodies focused more on moving special interests forward than improving America’s infrastructure.

AEA pointed to public opinion polling confirming that climate change remains at the bottom with voters in respect to both priority, and willingness to pay, voicing concern for the economy over everything else – especially during uncertain times created by the spread of COVID-19. Yet efforts to prop up expensive, failing products and energy sources with subsidies for electric vehicles (EV), windmills and solar panels, continue to be added in. It is clear that Democrats will look to whatever vehicle is before them to push Green New Deal proposals.

AEA continues to oppose EV and renewable energy tax extender and expansions which only benefit the wealthiest and the rent-seeking industries who swear they’re economic while continuing to demand access to taxpayers’ and ratepayers’ wallets. The organization has repeatedly reminded lawmakers that 78.7 percent of the EV tax credits went to households with an adjusted gross income of $100,000 or higher, and more than half went to households with an adjusted gross income of more than $200,000. Additional polling shows that a majority of Americans don’t believe taxpayer money should go towards paying for other peoples’ cars. Voters’ sentiments against paying for other’s electric vehicles especially sharpen when they learn nearly 50 percent of all subsidies are going to California.

Democrats have also shared no mechanism (or explanation) as to how to pay for the $1.5 trillion bill.

AEA will use its Energy Scorecard to highlight those that vote for this misguided plan, and if ever passed by the U.S. Senate, recommends a veto from President Trump.

Kenny Stein, Director of Policy and Federal Affairs for the American Energy Alliance, released the following statement against H.R. 2:

“With the spread of COVID-19, is now the time for $100 billion in mass transit? Or $75 billion for the first phase of the Green New Deal? Or unnecessary tax extenders for failed products and inadequate energy sources? Once again, Democrats have signaled how desperate they are to reward the extreme green left for their loyalty by prioritizing giveaways for special interest over citizen’s needs.”

“American voters are concerned with the economy right now, not the Green New Deal. H.R. 2 lost its way from the beginning when it shut out one side from contributing recommendations on how to support and improve America’s infrastructure and shows that Democrats are out of touch with working people and the economy.”

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Pushing the Green New Deal (Fox News Alert!)

June 22, 2020 by 1 Comment

“To fully address the threat of climate change and move towards the goal of global net-zero carbon emissions by 2050, the United States should advance specific policies and champion collaborative initiatives….” American Conservation Coalition—Campus

Fox News viewers are being subjected to a slick advertising campaign by the American Conservation Coalition–Campus (ACCC), a group “giving conservatives on campus a voice on the environment.” 

“We work with existing groups on campus to promote a free-market approach to clean energy and conservation,” their pitch goes. “By working with elected officials and activists, our student leaders are working to change the narrative on conservative environmentalism and facilitating important dialogue on critical environmental issues.”

Conservative? As in rejecting climate alarmism and Malthusianism in favor of sound science, humanism, and policy realism?

Conservation? As in market conservation—or government conservationism via energy taxes and mandates?

Free market? As in rejecting carbon taxes and special subsidies to politically correct energies? In reducing, not expanding, existing government intervention?

Clean energy? As in natural gas, reformulated gasoline, and clean coal? As in infrastructure minimalism from dense, storable, portable mineral energies—not infrastructure maximalism from industrial wind turbines, solar arrays, EV batteries, and biofuels?

Exactly not. The whole idea of ACCC is to assume, not debate, climate alarmism and the need to phase down-and-out carbon-based energies. Yet natural gas, oil, and coal are the very energies that consumers naturally choose—and taxpayers do not need to subsidize.

ACCC, which intends to “move towards the goal of global net-zero carbon emissions by 2050,” is promoting the message of the Democratic Left, the climate platform of Joe Biden and the yet-to-be-selected Green Party candidate, as opposed to the freedom-forward platforms of Donald Trump and of Libertarian Party candidate Jo Jorgensen. It is energy statism versus energy freedom. 

True conservatives, including students involved in this organization, should check their premises and debate these questions.

  1. What are the areas of unsettled climate science and exaggerated climate alarm?
  2. What are the benefits of carbon dioxide for the ecosystem, as documented by the CO2 Coalition?
  3. What is the temperature (and sea level) effect of a given level of a U.S. carbon tax?
  4. What are the environmental problems of industrial wind turbines, solar arrays, biomass, biofuels, and large-scale battery production?
  5. How does “government failure” and “analytic failure” compare to the alleged “market failure” of free-market energy decision-making?
  6. Will the climate/energy crusade end in eco-fascism?

To ask these questions is to turn the whole mission of the American Conservative Coalition–Campus on its head. One can only hope for open student inquiry and activism of a different kind.

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Key Vote NO on H.R. 1957

June 15, 2020 by Leave a Comment

The American Energy Alliance urges all Senators to vote NO on H.R. 1957 as amended with the text of the Great American Outdoors Act.  The federal government already owns far more land than it can adequately manage, which is part of the reason for the large maintenance backlog this bill tries to address.  However, the Land and Water Conservation Fund is simply a vehicle for buying up even more land for the federal government to mismanage.

By buying up land, the federal government hems in and impoverishes local rural communities by removing taxable land and limiting space for economic activity.  Land procured through the LWCF that is later placed off limits to development further harms the local communities as well as harming the larger economy.  While the LWCF itself is questionable policy, at least the current structure of the fund allows for congressional input into the land acquisition process through appropriations.  Making LWCF funding permanent removes this last Congressional check on federal land acquisition.  Permanent funding of the LWCF should be opposed.

The AEA urges all members to support free markets and affordable energy by voting NO on H.R. 1957 as amended with the Great American Outdoors Act.  AEA will include this vote in its American Energy Scorecard.

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AEA Joins Coalition to Stop the Federal Land Grab

June 9, 2020 by Leave a Comment

Senators are holding our national parks hostage for an unpopular federal land grab. President Trump should insist that the LWCF not be made permanent.

WASHINGTON DC (June 9, 2020) – Today, the American Energy Alliance joined a diverse coalition in opposition to Title II of the Great American Outdoors Act (S. 3422) which would make permanent the Land and Water Conservation Fund (LWCF.) The Senate voted to proceed with debate last night on the measure, which would – in part – divert revenues from oil and gas production on federal lands to address the maintenance backlog of our national parks.

It should stop there.

AEA objects to Title II of this measure, which would create in law a permanent diversion of $900 million per year of even more federal oil and gas revenues towards the purchase of new lands to be added to the federal estate. AEA urges Senators to fix the bill before final passage and will use it’s Energy Scorecard to highlight those that voted for this bill in its current, flawed form.

Since its original passage in 1965, four federal land agencies have spent $11.4 billion to acquire over 5 million acres of private land, and state and local governments have acquired over 2.6 million acres. S. 3422 would roughly triple spending on land acquisition over average historic appropriation levels. The fact is that the federal government already owns far too much land – approximately 640 million acres or 28% of total U.S. acreage. The federal government owns more than half the land in the eleven western states and Alaska. More than 90% of the land in a number of Western counties is federally owned and more than 75% in many more counties.

Thomas Pyle, President of the American Energy Alliance, released the following statement:

“Our national parks are indeed a treasure, but they shouldn’t be used as trade bait by Democrats and Republicans who seek to take even more land out of private ownership. The federal government already owns too much land. Making permanent a diversion of nearly a billion dollars per year of federal oil and gas revenues towards the purchase of even more land will only make at harder to manage the lands the government already owns. And it will make it easier for special interests – like the green left – to lock them up from multiple uses including ranching, mining, pipelines, transmission rights of way, and other forms of energy production.”

“My message to Senators is this: start by taking care of the lands already in your control. This flawed legislation must be amended to protect taxpayers from an ever expanding federal estate. We will score against final passage of the Great American Outdoors Act should it pass the Senate in its current form.”

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