June 2010

That’s the question I address today on the free-market energy blog, MasterResource.Org.

This morning, the  House Energy and Commerce Subcommittee on Energy and Environment is holding a hearing on the Blowout Prevention Act. The bill text says that the federal government “shall not” issue a permit for an offshore oil well unless the applicant can “demonstrate” that he has the “capacity to promptly stop a blowout in the event the blowout preventer and other well control measures fail.” However, as the ongoing disaster in the Gulf makes painfully clear, once “the blowout preventer and other well control measures fail,” there is no way to “promptly stop” oil from spilling into the ocean. At that point, physics (two fluids coming into contact) takes over.

In short, the Act sets a standard that no oil company can meet. As written, the bill would effectively prohibit all future offshore drilling. Logically, moreover, it implies that all existing permits to drill should be revoked.

Two points should be kept in mind.

First, although oil spills are bad, oil is good. Without oil, there would be no modern commerce and no mechanized agriculture. Life for most people would be nasty, poor, brutish, and short. Many of us would not even be alive.

Second, banning offshore drilling would increase consumers’ pain at the pump, destroy tens of thousands of high-paying jobs, cripple the economy of the gulf states, and make the United States more dependent on OPEC oil.

Back in February 2009, when everyone thought a deep depression was imminent, Keynesian economists and their political boosters demanded big government spending. According to their calculations, a “timely, targeted, and temporary” infusion of taxpayer money would defibrillate our moribund economy, the growth of which would make the trillion-dollar price tag seem like small potatoes. It was elementary!

So the White House pushed, and the Congress passed, a gigantic trillion-dollar stimulus, the American Recovery and Reinvestment Act. It was, however, anything but “targeted.” Instead, it was a grab bag of special interest handouts.

About $90 billion of those taxpayer funded giveaways went to “green” energy, which is about as trendy a cause as there is right now. Today, on the thirtieth of June, almost a year and half after the stimulus passed, the Department of Energy has awarded a scant 15% of its “green” energy stimulus funds. So much for “timely.”

Despite the fact that so little of the stimulus has yet been spent, House leadership already wants more. This week, powerful chairman of the House Ways and Means Committee, Michigan Representative Sandy Levin (D) is pushing a bill that would extend Stimulus green energy tax incentives, to the tune of $20 billion. So it seems that “temporary” was also a sham.

The custom-designed $600 toilet seat for P-3C Orion antisubmarine aircraft — often depicted as the epitome of government waste — is an urban legend.

The “seat” was actually a plastic molding that fitted over the entire seat, tank, and toilet assembly, for which the contractor charged the Navy $100 apiece.

However, in the subsidy-driven world of biofuels, government can flush lots of your tax dollars down the gurgler.

DOD’s Quadrenniel Defense Review Report (QDR) crows that in 2009, the Navy “tested an F/A-18  engine on camelina-based biofuel” (pp. 87-88). Camelina is a non-edible plant in the mustard family.

On Earth Day 2010, an F/A-18 taking off from the Warfare Center in Patuxent River, Maryland, became the first aircraft to ”demonstrate the performance of a 50-50 blend of camelina-based biojet fuel and traditional petroleum-based jet fuel at supersonic speeds,” enthuses Renewable Energy World.Com.

At the event, Secretary of the Navy Ray Mabus said: “It’s important to emphasize, especially on Earth Day, the Navy’s commitment to reducing dependence on foreign oil as well as safeguarding our environment. Our Navy, alongside industry, the other services and federal agency partners, will continue to be an early adopter of alternative energy sources.”

Renewable Energy World also reports that the Navy ordered 200,000 gallons of camelina-based jet fuel for 2009-2010 and has an option to purchase another 200,000 gallons during 2010-2012. Sounds impressive, but let’s put those numbers in perspective. In just three months in peacetime, the flight crew of a single vessel — the USS NASSAU, a multi-purpose amphibious assault ship – flew more than 2,800 hours and burned over 1 million gallons of jet fuel.

Neither Renewable Energy World nor the QDR mentions how much camelina-based jet fuel costs. Hold on to your (toilet) seat! According to today’s ClimateWire (subscription required), the price is $65.00 per gallon. That’s about 30 times more expensive than commercial jet fuel.

Those who wonder why government can’t just mandate a transition to a ”beyond petroleum” future should contemplate those numbers.

In the News

EU Countries Slashing Green Budgets
Patrice Hill, Washington Times, 25 June 2010

Markets Should Drive Colorado Energy Industry
William Yeatman & Amy Oliver Cooke, Denver Business Journal, 25 June 2010

Can a Carbon Cap Pass?
Myron Ebell, Politico, 25 June 2010

Climate Policy Not as Simple as Gore Thinks
Jim Manzi, The New Republic, 24 June 2010

Paul McCartney Compares Climate Skeptics to Holocaust Deniers
Josh Miller, FoxNews.com, 24 June 2010

A New Low for Science-the Black List
Fran Smith, GlobalWarming.org, 23 June 2010

Obama’s BP Time
Michael Lynch, MasterResource.org, 23 June 2010

Anti-Climate Law Initiative Qualifies for November Ballot
Dennis Theriault, San Jose Mercury News, 23 June 2010

Crude Stereotypes
Matt Purple, Spectator, 21 June 2010

News You Can Use

EPA Exposes Energy Independence Myth

Senator John Kerry claims that his cap-and-trade bill, the American Power Act, would make the U.S. “energy independent,” but according to the EPA’s economic analysis, the bill would raise gasoline prices to $5.00 a gallon in 2050 yet would leave U.S. petroleum consumption about where it is today.

Inside the Beltway

Myron Ebell

President Cancels Climate Meeting with Senators

President Barack Obama had to cancel his Wednesday morning meeting with a bipartisan group of Senators to discuss the need to pass energy-rationing legislation because he had to talk with General Stanley McChrystal before firing him as head of our Afghan campaign.  The meeting has not yet been rescheduled.

Despite Cancellation, Democratic Senators “Inspired”

Senate Democrats did go ahead on Thursday with their third meeting in three weeks to discuss how to proceed to the floor in July with an energy-rationing package.  Reporters talking to Senators as they came out of the meeting were greeted with uniformly glowing accounts of what happened at the meeting.

Senator John Kerry (D-Mass.) told The Hill: “This was without doubt one of the most motivating, energized, and even inspirational caucuses that I’ve been part of since I’ve been here in the Senate in 26 years.”

Senator Joseph Lieberman (D-Conn.) chimed in that the meeting had been “absolutely thrilling.”  Majority Leader Harry Reid (D-Nev.) was also over the moon: “A number of senators said this was the best caucus they’ve ever attended.  It was really very, very powerful. It was inspirational, quite frankly.”

So what did Senate Democrats decide to do?  They decided to include energy-rationing provisions in a bill to punish BP and the oil industry for BP’s Gulf oil leak.  This would force Republicans opposed to energy rationing to take a very difficult vote against the BP spill bill.

This strategy was first reported by Politico three weeks ago (which I discussed in the Digest here), so I’m not sure what made the meeting so exciting.  Perhaps they finally agreed on what provisions to include in the package?  No, they reported no progress on deciding the actual contents of the legislation.

My suspicion is that Senate Democrats, with no substantive progress to show for their three meetings, decided that they had to make a public show of progress.  Describing the meeting as exciting, inspiring, and thrilling was the best they could come up with.  They can try to hide it, but the fact is that the Good Bus Cap-n-Tax has run out of gas and is slowing to a stop.

The question is whether the Democrats’ huge Senate majority (plus a few Republicans) will be able to pass some modest package of regulations and mandates that will raise energy prices and cripple the economy.

Across the States

Marlo Lewis, from GlobalWarming.org

Louisiana Judge Overturns Obama’s Drilling Ban

On Wednesday, Judge Martin Feldman of the Eastern Louisiana District Court lifted the Obama administration’s six-month moratorium on all oil and gas drilling in the Gulf of Mexico in waters over 500 feet in depth. Feldman held  that the moratorium was “arbitrary and capricious” and would do “irreparable harm” to businesses that own, operate, and service vessels used to support offshore drilling – an industry critical to the region’s economy. Department of Interior Secretary Ken Salazar imposed the moratorium on May 28 in response to the BP Deepwater Horizon blowout and oil spill.

Around the World

Chris Horner, from Pajamas Media

Spanish Green Jobs Critic Receives Bomb Threat

Spain’s Dr. Gabriel Calzada-the author of a damning study concluding that Spain’s “green jobs” energy program has been a catastrophic economic failure-was mailed a dismantled bomb on Tuesday by solar energy company Thermotechnic. The bomb threat is just the latest intimidation Dr. Calzada has faced since releasing his report and following up with articles in Expansion. A minister from Spain’s Socialist government called the rector of King Juan Carlos University-Dr. Calzada’s employer-seeking Calzada’s ouster. Calzada was not fired, but he was stripped of half of his classes at the university. My book, Power Grab: How Obama’s Green Policies Will Steal Your Freedom and Bankrupt America,  details the Spanish “green jobs” disaster uncovered by Dr. Calzada, plus similar “green” economic calamities occurring in Germany and Denmark-also programs Obama has praised-as well as in Italy and elsewhere.

The Cooler Heads Digest is the weekly e-mail publication of the Cooler Heads Coalition. For the latest news and commentary, check out the Coalition’s website, www.globalwarming.org.

The Politico reports that Sen. Harry Reid (D.-NV) has hit on a new scheme for passing the chronically unpopular climate legislation that has been languishing since the House passed the Waxman-Markey bill over a year ago.  He’s going to attach it to a bill to impose restrictions on drilling:

The Democratic leader’s floor plan addresses a growing desire by the Obama administration to take swift action on any legislation that could prevent a future disaster like the Gulf Coast oil spill. Republicans who once would have resisted legislation that would impose new safety and environmental restrictions on the oil industry are now lining up in favor of such measures, in part to avoid being seen in the same light as Rep. Joe Barton, the Texas Republican who drew intense pressure from his own caucus after publicly apologizing to BP.

But Reid may also be playing with fire by pushing climate change provisions that nearly all Republicans have painted as an expensive new taxes and moderate Democrats see as an unpopular vote they’d rather avoid.

How could this go wrong?  I cannot help but be reminded of the Simpsons episode ‘Bart’s Comet”:

Kent: With our utter annihilation imminent, our federal government has snapped into action.  We go live now via  satellite to the floor of the United States congress.

Speaker: Then it is unanimous, we are going to approve the bill to evacuate the town of Springfield in the great state of –

Congressman: Wait a minute, I want to tack on a rider to that bill: $30 million of taxpayer money to support the perverted arts.

Speaker: All in favor of the amended Springfield-slash-pervert bill?

[everyone boos]

Speaker: Bill defeated.  [bangs gavel]

Kent: I’ve said it before and I’ll say it again: democracy simply doesn’t work.

Senator Reid could go down in history as the man who couldn’t get drilling restrictions passed following a massive oil spill.  If he does, it will be his own fault.  The irony is that the Gulf Coast economies will have to thank him for it.

Japan’s Environment Ministry is encouraging its citizens to go to bed an hour earlier at night, and get up an hour earlier in the morning.

There is much wisdom in the old “early to bed, early to rise” adage. But that’s not what the Environment Ministry has in mind. They see going to bed early as a way to fight global warming.

By saving an hour’s worth of lighting and other electricity use every day, the Morning Challenge campaign says the average household can emit 85 fewer kilograms of carbon per year. Staying up late ensures mankind’s doom.

It is astounding that the Japanese regulators think that your bedtime is government business. Then again, this is the same country that has a legally allowable maximum waistline.

In what has to be one of the most disgraceful examples of political, unscientific attacks, the Proceedings of the National Academy of Sciences published a report, “Expert credibility in climate change,” alleging to show that climate change “deniers” have less impressive credentials and haven’t published as much as those promoting anthropogenic climate change. With the billions in research money given to climate change advocates over the past 15 years, and the recent ClimateGate email disclosures about shutting skeptics out of key scientific journals, it’s no wonder there is a discrepancy. But, of course, neither of those issues is mentioned.

The article was researched and/or written by a biology professor, an engineer, a foundation executive, and the infamous Stephen H. Schneider, known for his advocacy of catastrophic global warming and his endorsement of duplicity and hyperbole in pushing the climate change agenda:

“. . . we need to get some broad based support, to capture the public’s imagination. That, of course, means getting loads of media coverage. So we have to offer up scary scenarios, make simplified, dramatic statements, and make little mention of any doubts we might have.”  (Discover magazine pp. 45-48, Oct. 1989)

What might be the purpose of this exercise?  One gets a clue in the conclusion of the article – that media coverage is contributing to public misunderstanding by giving an undeserved platform to climate skeptics:

“This extensive analysis of the mainstream versus skeptical/contrarian researchers suggests a strong role for considering expert credibility in the relative weight of and attention to these groups of researchers in future discussions in media, policy, and public forums regarding anthropogenic climate change.”

Dr. Roy Spencer has a good article discussing what’s now known among skeptics as the “Black List.”  The Examiner’s Thomas Fuller writes an open letter to Schneider deploring the article:

Is this science you are proud of? Does damaging the reputation of some scientists by mistakenly (or vindictively) including them on a blacklist serve science well? Does establishing a climate of fear that will dissuade scientists from expressing their true opinion?

Sen. James Inhofe’s daily Environment & Public Works Press Blog is a source I check early and often. The posts, which are more like essays than press releases, are incisive, rigorous, and witty.

In today’s post, Sen. Inhofe explains, by the numbers, why the claim that cap-and-trade will help us get “beyond petroleum” is horse feathers. Cap-and-trade will significantly increase our pain at the pump, yet will hardly make a dent in U.S. dependence on petroleum and oil imports.

In EPA’s analysis, the Kerry-Lieberman bill would raise gasoline prices to $5.00 a gallon in 2050 yet would leave U.S. petroleum consumption about where it is today. EPA’s analysis last year of the Waxman-Markey bill came to much the same conclusion, observing that it “creates little incentive for the introduction of low-GHG [greenhouse gas] automotive technology.” Similarly, the Energy Information Administration estimated that Waxman-Markey would reduce U.S. petroleum consumption in 2030 a mere 5% relative to the baseline projection.

And, as Sen. Inhofe notes, there is no provision in either bill to refund the extra bucks consumers would have to shell out at the pump.

A TV station in New Orleans reports that “the federal government is shutting down the dredging that was being done to create protective sand berms in the Gulf of Mexico.”   Louisiana planned to create the sand berms to prevent the massive BP oil spill from polluting its coastline.

Earlier, a federal judge blocked Obama’s drilling ban on offshore drilling, citing deception by Obama administration officials.  The ban applied mostly to oil companies with radically better safety records than BP.  (BP’s executives gave lots of money to Obama and lobbied for his legislation.)

Obama delayed the clean-up of the Gulf of Mexico by blocking foreign crews from operating sophisticated clean-up vessels.  The Jones Act bans foreign vessels and crews from working in U.S. waters, but it gives the President the authority to completely waive that ban if he wishes.  Obama refused to lift the ban, even though American shippers who generally support the ban said they wouldn’t object to lifting it to fight the spill.  As a result of the ban, the U.S. rejected a lot of foreign aid from counties with expertise in fighting oil spills, and accepted only a small amount of foreign equipment to fight the spill.

The federal government has routinely been a thorn in the side of Louisiana as it seeks to fight the huge oil spill.  It recently used red tape to force Louisiana to stop using 16 barges that were cleaning up the Gulf of Mexico by sucking thousands of gallons of oil out of Louisiana’s oil-soaked waters.  Earlier, four oil skimmers needed to clean the Gulf were blocked by EPA officials.

The oil spill has been called “Obama’s Katrina,” but Gulf Coast resident Paul Rubin says this is unfair to George Bush, who was not nearly as incompetent as Obama has been in dealing with the spill at BP’s Deepwater Horizon.  In the Wall Street Journal, Rubin notes that the oil spill occurred in federal waters and thus was a federal responsibility, while Hurricane Katrina occurred mostly on state land and thus was largely a state, not federal, responsibility, enabling incompetent local officials in cities like New Orleans to “interfere” with federal relief efforts:

In many respects, the Deepwater Horizon disaster and Katrina are mirror images of each other. The harm from Katrina was on state land—mainly Louisiana, but also Florida, Alabama and Mississippi. As a result, President George W. Bush and the federal government were limited in what they could do. For example, Homeland Security Secretary Michael Chertoff wanted to take command of disaster relief on the day before landfall, but Louisiana Gov. Kathleen Blanco refused. Federal response was hindered because the law gave first authority to state and local authorities.  State and local efforts—particularly in New Orleans, and Louisiana more broadly—interfered with what actions the federal government could actually take. New Orleans Mayor Ray Nagin was late in ordering an evacuation and did not allow the use of school buses for evacuation, which could have saved hundreds of lives. President Bush had no power to change that decision.  The Deepwater Horizon oil spill is on federal offshore territory. The federal government has primary responsibility for handling the situation, while state and local governments remain limited in what they can do. For example, the Environmental Protection Agency has repeatedly changed its mind regarding the chemical dispersants that Louisiana is allowed to use. . . .As opposed to Katrina, state and local attempts to address the oil spill have been hindered by an ineffectual and chaotic federal response.

Obama is now using the BP oil spill to push a corporate-welfare-filled global-warming bill crafted partly by BP’s lobbyists.  Obama’s global warming legislation expands ethanol subsidies, which cause famine, starvation, and food riots in poor countries by shrinking the food supply, and also result in deforestation, soil erosion, and water pollution. Subsidies for biofuels like ethanol are a big source of corporate welfare: “BP has lobbied for and profited from subsidies for biofuels . . . that cannot break even without government support.”

The $800 billion stimulus package is using taxpayer subsidies to replace U.S. jobs with foreign green jobs. It is also destroying jobs in America’s export sector.

Yesterday, Judge Martin Feldman of the Eastern Louisiana District Court lifted the Obama administration’s six-month moratorium on all oil and gas drilling in the Gulf of Mexico in waters over 500 feet in depth.

Feldman held that the moratorium was ”arbitrary and capricious” and would do “irreparable harm” to businesses that own, operate, and service vessels used to support offshore drilling — an industry critical to the region’s economy.

Department of Interior Secretary Ken Salazar imposed the moratorium on May 28 in response to the BP Deepwater Horizon blowout and oil spill. Judge Feldman found the moratorium to be “arbitrary and capricious” on several grounds.

First, it was based on “misrepresentation.” In a Report issued the day before imposing the moratorium, Salazar claimed his policy had been “peer-reviewed by seven experts identified by the National Academy of Engineering.” Not so, says Feldman:

As the plaintiffs, and the experts themselves, pointed observe, this statement was misleading. The experts charge it was a “misrepresentation.” It was factually incorrect. Although the experts agreed with the safety recommendations contained in the body of the main Report, five of the National Academy experts and three of the other experts have publicly stated that they “do not agree with the six month blanket moratorium” on floating drilling. They envisioned a more limited kind of moratorium, but a blanket moratorium was added after their final review, they complain, and was never agreed to by them.

Second, the agency’s decision is not supported by the evidence on which it was ostensibly based. The Report notes that “the risks associated with operating in water depths of 1,000 feet are significantly more complex than in shallow water,”  yet the moratorium would apply to all floating rigs – i.e. all rigs operating at depths greater than 500 feet. The agency makes no effort to explain why it set the cutoff at 500 feet rather than 1000 feet.

Third, “There is no suggestion that the Secretary considered any alternatives: for example, an individualized suspension of activities on target rigs until they reached compliance with the new federal regulations said to be recommended for immediate implementation.”

Fourth, the agency provided no “analysis of the asserted” hazards posed by the 33 deepwater rigs already permitted and operating in the Gulf. Rather, Interior “seems to assume that because one rig failed and although no one yet fully knows why, all companies and rigs drilling new wells over 500 feet also universally present an imminent danger.” This is like assuming that all oil tankers are like the Exxon Valdez. “That sort of thinking seems heavy-handed, and rather overbearing.”

Feldman’s ruling is unlikely to go unchallenged. According to Greenwire, David Guest, an attorney with EarthJustice who represented environmental groups in the case, opined that, “the Department of Justice will file an immediate motion for a stay and seek expedited review in the 5th Circuit Court of Appeals.”