Cooler Heads Digest

by William Yeatman on September 12, 2008

in Cooler Heads Digest

In the News

The Lawnmower Police Are Coming
Chris Horner, Human Events, 9 September 2008

The Pickens Plan: Questions Unanswered
Reece A. Epstein and David A. Ridenour, National Center for Public Policy Research, September 2008

Drilling for Dollars
Wall Street Journal, 12 September 2008

Gas, Gas Everywhere
Christopher Palmeri, Business Week, 10 September 2008

Liquid Pork
The Editors, National Review Online, 10 September 2008

The Fallacy of Green Jobs

John Stossel,, 10 September 2008

Pumped and Primed
Joseph Lawler,, 9 September 2008

Drilling Bills Are Hot in Congress
David Ivanovitch, Houston Chronicle, 8 September 2008

News You Can Use

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Inside the Beltway

Smoke and Mirrors
CEI’s Myron Ebell

The House vote on energy legislation that Speaker Nancy Pelosi (D-Calif.) had said would occur on Friday the 12th has been postponed while the House Democratic leadership tries to figure out what to do. The Sierra Club endorsed the bill before it was written, even though the Speaker finally caved in and agreed to include offshore drilling provisions. That’s a sure sign that the drilling provision is phony—a fig leaf covering tens of billions of dollars of pork for special interests.

Pelosi’s fellow Democrats in the House have forced her to at least give the appearance that she now favors some offshore drilling because they are getting hammered at home with the election only two months away. Enough Democrats now say that they support more offshore oil and gas production that Pelosi has to give them some kind of vote that they can take home. On the other hand, she doesn’t want it to be a vote that would actually increase domestic oil production because, as she has said, she is determined to save the planet.   

Over on the Senate side, the situation seems even more confused. Majority Leader Harry Reid (D-Nev.) said that he wants to allow votes on at least three energy bills. But he wants to figure out how to do that without allowing any amendment to be offered that would repeal the congressional moratoria on oil and gas exploration and production in 85% of the waters surrounding the lower 48 States. 

Reid said that one of the bills would be the Gang of Ten’s compromise bill. The Gang has grown to 16 Senators, eight from each party, but the details of their plan are being worked out. I was sent a 233-page draft bill, but was told that most of the provisions were still subject to change. It has been rumored that the Gang are trying to get presidential candidates John McCain (R-Az.) and Barack Obama (D-Ill.) to join up.  If that happened, then it seems to me that it would be difficult for President George W. Bush to veto it if the Congress passed it.

What the Gang’s plan and Pelosi’s plan have in common is that both are intended to fool the public. Even though the details are still fuzzy, it’s clear that the packages being discussed would reduce investment in domestic oil and gas production by raising taxes on oil companies by approximately thirty billion dollars.  This money would be used to pay off all the special interests that make uncompetitive products, such as ethanol, windmills, and solar panels. 

The offshore drilling provisions that have been drafted in both the House and the Senate would open some limited areas beyond fifty miles of the coast to drilling. But the State with the coastline would have to agree to allow drilling between fifty and hundred miles.  (For production between one and two hundred miles out, the federal government wouldn’t have to get state approval.) It’s not likely that most State governments would agree, since no provision to share federal royalties with those States is in either plan.  Moreover, production within fifty miles would be permanently banned. Of course, that’s where most of the oil and natural gas is. And generally speaking, the closer to shore, the shallower the water and the lower the production costs.  Thus enacting Pelosi’s or the Gang’s plan would turn an annual provision included in the Interior Department appropriations bill into law for the offshore areas with the highest potential.  Thus the appearance of allowing a little drilling covers up the reality that it would lock up more securely trillions of dollars of oil and gas.

Around the World
Vandalizing the Economy
CEI’s Iain Murray, from Planet Gore

This is very big.  In Britain, a group of Greenpeace supporters trespassed on to a coal-fired power station and started vandalizing it, painting a message to UK Prime Minister Gordon Brown about global warming.  They were arrested and prosecuted.  Their defense strategy was to claim a "lawful excuse" on the grounds that their actions could help prevent significant damage to others' property that would result from global warming.  Their defense witnesses included James Hansen, Al Gore's adviser and head of NASA's Goddard Institute for Space Studies, and Zac Goldsmith, ultra-wealthy heir of Sir James Goldsmith and a conservative candidate for Parliament.  The strategy worked.  Yesterday, a jury returned a majority verdict, acquiting the so-called Kingsnorth Six.  As The Independent put it, the jury decided the "threat of global warming justifies breaking the law."

The ramifications are huge.  Operators of coal-fired power stations in the UK have just been stripped of legal protection from the criminal actions of the environmental lobby (to call them extremists would be wrong – this is the mainstream).  It is perfectly possible that a future jury will find differently, but the chances of that happening have fallen dramatically.  Investor confidence in coal energy will therefore be damaged.  There will be huge political risk in building a new coal plant.  Existing coal plants will come under literal attack.

The same people hate nuclear and will work to delay new nuclear plants.  Renewables are marginal, even according to the Renewable Energy Foundation.  North Sea Gas is running out, so the only solution to keep the lights on is kowtowing to Vladimir Putin and Gazprom.

The energy industry in the UK and the government have allowed the environmental groups free rein to delegitimize coal (and oil for that matter).  They have invested nothing in defending fossil fuels, legitimizing their product or in advancing strategies to combat global warming that do not involve getting rid of coal.  As a result, the jury was, in a literal sense, prejudiced against coal.  The benefits of affordable energy for the many must be championed, otherwise we will end up with expensive energy for the few.

Around the States
Minnesota, Florida, New Mexico

The Wonkroom this week reported that Minnesota Governor Tim Pawlenty (R), who has before publicized his administration’s policies to fight global warming, disparaged climate science and climate policy on the Glen Beck Show. According to the transcript provided, Governor Pawlenty said that humans have caused one-half a percent of observed global warming, and he implied that the leading “solution”—a cap-and-trade scheme—would “wreck the economy.”

James Taylor, in an article in Environment News, testifies to what will happen when States are forced to use renewable energies in their power mix: “Florida Power & Light (FPL) customers are being hit with a 16 percent hike in electricity prices as the utility company invests more heavily in solar power.” Florida has a law requiring that regulators establish a minimum renewable energy portfolio standard.

In New Mexico, energy policy is influencing the contest between Rep. Tom Udall (D) and Rep. Steve Pearce (R) for the seat of Sen. Pete Domenici (R-NM), who is retiring. Udall was a heavy favorite, but Pearce has been surging due largely to advertisements that attacked Udall’s record of voting against opening up federal land and waters to drilling for energy resources. Udall has since launched a “do it all” energy ad campaign to demonstrate his commitment to drilling and government support for alternative energy sources.

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