November 2010

More on Regs for Rigs: Did EPA Emission Standards Crowd Out Investment In Heavy Truck Fuel Economy?

by Marlo Lewis on November 15, 2010

in Blog

Recently on this site and at MasterResource.Org, I discussed the Obama Administration’s proposed rule to establish first-ever greenhouse gas (GHG) and fuel-economy standards for heavy duty (HD) vehicles. The rule, jointly proposed by the EPA and the National Highway Traffic Safety Administration (NHTSA), would set increasingly stringent GHG and fuel economy standards for HD vehicles manufactured during model years (MYs) 2014-2018. HD vehicles include “combination tractors” (semi-trucks), “vocational trucks” (dump trucks, delivery trucks, buses), large pickups and vans.

Do Consumers Undervalue Fuel Economy?

The agencies have long held that “consumers undervalue fuel economy,” as EPA puts it on p. 44413 of its July 2008 Advanced Notice of Proposed Rulemaking: Regulating Greenhouse Gases under the Clean Air Act).  Yes, EPA acknowledges, the addition of fuel saving technology increases the purchase price of a vehicle, but, the agency contends, “the lifetime discounted fuel savings will exceed the initial cost increase substantially” (ANPR, p. 44447).

EPA writes as if the only factors consumers need to weigh and balance when purchasing an automobile are the upfront purchase price and the lifetime fuel costs. Given that premise, consumers who do not spend more for a higher mpg-vehicle are short-sighted (“fuelish”). Like children, they either do not discern their own best interest or lack the self-discipline to pursue it. So the Nanny State must step in and restrict our choices for our own good. Such is the elistist pretension underpinning three-plus decades of fuel-economy regulation.

In reality, consumers are not two-dimensional beings trapped, like agency fuel-economy fetishists, within a two-factor decision framework. In addition to the tradeoff between upfront cost and long-term fuel expenditures, consumers also consider vehicle power, performance, utility, style, safety, comfort, and amenities. Some people, for example, are willing to pay more for gasoline in order to enjoy the panoramic views, cargo space, passenger space, off-road versatility, and towing capacity of a large SUV.

More importantly, when consumers purchase a car, they typically take into account costs that are completely unrelated to the vehicle itself. For example, Mrs. Smith may prefer a lower priced car because she needs more disposable income this year for new home-office equipment, for little Sallie’s music lessons, or for Bill Jr.’s orthodonture. Forcing her to spend more of her disposable income on a higher-mpg vehicle would not enhance her family’s welfare, even if she could recover the extra expense in five years. Each consumer’s welfare is subjective and involves a subtle weighing and balancing of many competing considerations. For EPA to claim that “consumers undervalue fuel economy” is tantamount to saying that Mrs. Smith “overvalues” music lessons.

Do Truckers Underinvest in Fuel Economy?

Okay, so the notion that consumers “undervalue” fuel economy is dubious. In their joint proposed rule, EPA and NHTSA do not claim that truckers undervalue fuel economy. That would not pass the laugh test. As the agencies acknowledge (p. 315), “Unlike in the light-duty vehicle market, the vast majority of vehicles in the medium- and heavy-duty truck market are purchased and operated by businesses with narrow profit margins, and for which fuel costs represent a substantial operating expense.” Indeed, for truckers, fuel is the single biggest operating expense.

 heavy-truck-operating-expenses

Source: EPA-NHTSA, Draft Regulatory Impact Analysis: Proposed Rulemaking to Establish Greenhouse Gas Emission Standards and Fuel Economy Standards for Medium- and Heavy-Duty Engines and Vehicles, Figure 9-1, p. 9-4

Clearly, nobody has a keener incentive to reduce fuel expenditures than people who haul freight for a living.

Yet the agencies claim that truckers “underinvest” in fuel saving technology. According to their calculations, the proposed rule will compel the trucking industry to invest $7.7 billion in fuel-saving technologies (p. 36), which will cut fuel consumption by 500 million barrels, which will save truckers $28 billion (assuming a 7% discount rate) or $42 billion (assuming a 3% discount rate). In the agencies’ words (p. 315), “the application of fuel-saving technologies in response to the proposed standards would, on average, yield private returns to truck owners of 140% to 420%.”

Unexamined Hypothesis: Opportunity Cost of EPA Emission Control Standards

The agencies propose five “potential hypotheses” to explain why firms with narrow profit margins in a competitive industry where fuel is the chief operating expense are not seizing an opportunity to make billions in easy money. As discsussed in my MasterResource column, none of these explanations demonstrates a “market failure.” In fact, two of the hypotheses suggest that truckers are simply acting like prudent buyers (although, naturally, the agencies don’t put it that way). Specifically, truckers want to make purchasing decisions based on road-tested information, not just agency speculation. Prior to actual deployment of the technologies, nobody knows whether they will yield the promised fuel savings and how they will affect engine reliability and maintenance costs.

The Oak Ridge Laboratory publishes an annual Transportation Energy Data Book. The chapter on heavy vehicles (p. 5-2) reports that the fuel-economy of “single unit” trucks improved 2% annually during 1998-2008. No “underinvestment” there. In contrast, “combination tractor” (semi-truck) fuel economy declined 1.2% annually over that period (p. 5-3). Yet these are the long-haul guys who, according to EPA and NHTSA, will save 18 times as much on fuel as owners of vocational trucks once they comply with the proposed rule (p. 337).

I don’t know if prudent- buyer behavior accounts for the alleged investment “gap” or “energy paradox” (p. 315) in the semi-truck category, but the agencies should have at least mentioned one other obvious “hypothesis”: the opportunity cost of EPA’s emission control mandates.

Back in the year 2000, EPA adopted tough new emission control standards for HD vehicles.  EPA’s Regulatory Impact Analysis (RIA) estimated that the industry’s 11 major diesel manufacturers would have to make substantial commitments of time, money, and personnel to comply with the new standards:

We have therefore estimated that each of the 11 major diesel engine manufacturers will invest approximately $7 million per year on research and development over a period of five years to adapt their engine technology to the advanced emission control technologies described here. Seven million dollars represents the approximate cost for a team of more than 21 engineers and 28 technicians to carry out advanced engine research, including the cost for engine test cell time and prototype system fabrication. [RIA, Chapter V: Economic Impacts, p. V-20]

“In total,” EPA’s RIA continues, “we have estimated that the engine manufacturers will spend approximately $385 million on R&D.” Three hundred and eighty-five million dollars. Presumably, that could crowd out significant R&D on fuel saving technology. Every year for five years, an estimated 21 engineers and 28 technicians at each of 11 major diesel manufacturers would be working on emission control technology. They would likely work less (or not at all) on fuel-saving technology.

The RIA also estimated that, in the “near term” (MY 2007), the average semi would incur fixed, variable, and operating costs of $280, $2,946, $3,785, respectively (p. V-7). So in the near term, owners would have about $7,000 a year less per vehicle to spend on fuel saving technology. For perspective, EPA and NHTSA estimate that their proposed GHG/fuel economy standards will increase the cost of a “combination tractor” by $5,896 in MY 2014 (p. 7-3). Presumably, some truckers who spent $7000-plus for mandated emission control technologies did not have $5,896 to spend for new fuel saving technology.
 
Finally, EPA’s year 2000 RIA says that the diesel particulate filter will “negatively impact fuel economy by approximately one percent” but that this will be “more than offset through optimization of the engine-PM trap-NOx adsorber system” (p. V-32). Whether this forecast turned out to be accurate or not, I do not know. 
 
What does seem clear is that EPA’s own rules may be responsible for the alleged “paradox” that the freight goods industry is not making cost-effective investments in fuel-saving technology.

Request for Information

Unfortunately, the latest information I have found on the industry-wide R&D costs and per-vehicle costs of EPA’s HD vehicle emission standards, and whether the associated technologies enhance or reduce HD vehicle fuel economy, is EPA’s year 2000 RIA, which offers projections rather than a retrospective, real-world, assessment. I would be grateful to anyone who can point me to later information.

Cooler Heads Digest 12 November 2010

by William Yeatman on November 12, 2010

in Blog, Cooler Heads Digest

In the News

Green Jobs Hucksterism and the G-20
Chris Horner, AmSpecBlog, 12 November 2010

A Bad Week for Alarmists
Anthony Watts, WattsUpWithThat, 12 November 2010

How the EPA Could Destroy 7.3 Million Jobs
William F. Shugart, Washington Examiner, 12 November 2010

GE Buys Volts; Taxpayers Pick up the Tab
Henry Payne, Planet Gore, 12 November 2010

Global Warming Is Good for Rainforests
Lewis Page, The Register, 12 November 2010

Global Warming, Global Taxes
Thomas P. Kilgannon, American Spectator, 12 November 2010

EPA’s New Guidance: Does It Endanger Coal?
Marlo Lewis, GlobalWarming.org, 11 November 2010

High Speed Train Wreck
Iain Murray & Marc Scribner, Lexington Herald Leader, 11 November 2010

Retire the Stealth Tax on Carbon
Vincent Carroll, Denver Post, 10 November 2010

California’s AB 32 Is Still on the Hot Seat
Tom Tanton, MasterResource.org, 10 November 2010

Carbon Trading Grounds to a Halt in the U.S.
FoxNews.com, 9 November 2010

How an Enviro Advocacy Group Propped up Global Warming in the Media
Russell Cook, Big Journalism, 2 November 2010

Energy and Climate Wars
Bryan Weynand, American Thinker, 2 October 2010

News You Can Use

Ben Lieberman

Voters Want to Save Planet from Attempts To Save Planet

It is worth noting that the two biggest environmental scares of recent memory-global warming and the BP oil spill-both failed to sway voters on November 2.  Quite the contrary, it was the ill-advised attempts to address them that sparked voter anger.  The Waxman-Markey bill worried the electorate more than global warming itself (and quite rightly so), and contributed to the loss of more than two dozen of its supporters in the House of Representatives.

Similarly, the BP oil spill had virtually no adverse impact on pro-drilling politicians. If anything, it was Obama’s overreaction to the spill in the form of the drilling moratorium that proved highly unpopular in Louisiana and other impacted States. The moratorium didn’t cost any Congressional seats there only because both Democrats and Republicans strongly denounced it.

Inside the Beltway

Myron Ebell

EPA Releases Vague Guidance on Greenhouse Gas Regs

The Environmental Protection Agency this week released a Guidance Document on the Best Available Control Technology (BACT) that will be required in order to permit new projects under the Clean Air Act’s regulation of stationary sources of greenhouse gas emissions.  The regulations are scheduled to begin on January 2nd, 2011, so EPA has put off to the last minute informing regulated entities what they will have to do to receive a permit.  The short answer is that the EPA doesn’t know what to require in the way of BACT beyond advocating increased energy efficiency and so is granting extraordinary leeway to state environmental agencies (that consider and make the initial decisions on permit applications) to make up the rules as they go along.  This means that one state environmental agency may require something extremely expensive and complicated to limit greenhouse gas emissions while another may require something cheap and easy.  It should be fun, especially for the environmental pressure groups who are no doubt already planning how to litigate every permit application filed.  My CEI colleague Marlo Lewis explains some of the details here, but it will take awhile to decipher all of EPA’s little tricks and traps.

Browner Must Go

Dan Berman reported in Politico on Wednesday that: “The White House rewrote crucial sections of an Interior Department report to suggest an independent group of scientists and engineers supported a six-month ban on offshore oil drilling, the Interior inspector general says in a new report.  In the wee hours of the morning of May 27, a staff member to White House energy adviser Carol Browner sent two edited versions of the department report’s executive summary back to Interior. The language had been changed to insinuate the seven-member panel of outside experts – who reviewed a draft of various safety recommendations – endorsed the moratorium, according to the IG report.”  This is the most outrageous example yet of the Obama Administration’s improper manipulation of science to support its agenda.  I responded in a CEI press release by calling for the firing of President Obama’s Climate Czar, Carol Browner. Senator James M. Inhofe (R-Okla.), ranking Republican on the Environment and Public Works Committee, and two of his colleagues on the committee, John Barrasso (R-Wyo.) and David Vitter (R-La.), have requested that the committee hold a hearing on the Inspector General’s report.

Across the States

New Jersey Gov. Chris Christie “Skeptical” on AGW

The Philadelphia Inquirer this week reported on a town hall meeting during which New Jersey Governor Chris Christie (R) responded to a question about the science of global warming by saying that, “I’m skeptical.” That’s great to hear, but it would be even better if the Governor pulled New Jersey out of the cap-and-trade for northeastern states known as the Regional Greenhouse Gas Initiative.

Around the World

EU: Efficiency Goals Will Cost $1.4 Trillion through 2020

Environmentalists claim that energy efficiency is the ideal energy policy because it saves money and reduces the need for new energy generation. According to Greenpeace International, “energy efficiency is highly profitable.” The evidence suggests otherwise. This week, European Commission presented its energy efficiency strategy for the coming decade, calling for taxpayer investment of almost $1.4 trillion through 2020.

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.

Spotting the “Corporate Greed”

by Brian McGraw on November 11, 2010

in Blog, Politics

The Renewable Fuels Association posted a note today deploring the recent lawsuit by the American Petroleum Institute over the EPA decision to increase the maximum blend wall for ethanol in conventional gasoline by 50% from E10 to E15. They claim that it is motivated by “corporate greed.”

Oil companies are in the business of refining oil and selling gasoline to consumers. They aren’t in the business (well, some of them are at this point having bought ethanol plants) of producing and selling ethanol — they don’t make money from it. What would Coca-Cola say if the FDA began mandating that Coca-Cola begin blending increasing percentages of an off-brand cola into their product in order to give the off-brand a guaranteed market share? I suspect they wouldn’t be too happy with this and would fight to be allowed to sell their product as it is, without required additives.

Furthermore, there are still a number of issues the EPA hasn’t clarified with respect to liability for E15. E15 has been approved for newer vehicles, but it isn’t quite clear that it is okay to use in many of the older vehicles still on the road today. It also isn’t clear that E15 can be used in lawn mowers, outboard boating engines, etc. Will the oil refiners be responsible for damages by people who mis-fuel? Will the ethanol industry take responsibility for any problems? (No) Will engine warranties be valid if consumers use a fuel they aren’t supposed to?

Apparently, a portion of the Clean Air Act allows consumers to sue retailers if they put the wrong type of fuel in their vehicle. If stations are now offering E10 and E15 there will be mis-fuelings, and if these lead to damages then there are going to be lawsuits going everywhere. Aside from the obvious loss of profit, it isn’t surprising that the API wants to avoid this liability nightmare.

Are the oil companies displaying corporate greed here? Or is it the ethanol industry who has used government to obtain guaranteed access to a larger and larger portion of the fuel supply (as well as a tax credit on top of it)?

EPA’s Permitting Guidance for Greenhouse Gases – Does It Endanger Coal?

by Marlo Lewis on November 11, 2010

in Blog

Can environmental agencies use BACT determinations to require major emitting facilities to switch fuels?

This arcane-sounding question is of great practical importance to energy consumers and the economy. It is a question addressed in EPA’s long-awaited PSD and Title V Permitting Guidance for Greenhouse Gases, posted online yesterday in Politico.

EPA’s guidance document is intended to assist permit writers and permit applicants determine what constitutes “best available control technology” (BACT) for greenhouse gas (GHG) emitting facilities. On January 2, 2011, EPA’s motor vehicle GHG emission standards will go into effect, making GHGs air pollutants “subject to regulation” under the Clean Air Act’s Prevention of Significant Deterioration (PSD) pre-construction permitting program. Any firm planning to build or modify a large GHG-emitting facility (e.g. a coal-fired power plant, an oil refinery, a cement production facility) will first have to obtain a PSD permit from EPA or a State environmental agency.  To obtain a PSD permit, the applicant will have to demonstrate that the new or modified facility incorporates BACT by virtue of its combustion processes, work practices, technology controls, or some combination thereof.

A question that has come up time and again in discussions of EPA regulation of GHGs is whether BACT can be interpreted to require facilities to change the fuels they use. For example, could a permitting agency decide that an electric generating unit is not BACT-compliant unless the facility switches fuels from coal to natural gas, or from natural gas to a mixture of gas and wind?

Waxman-Markey died in the Senate when the public realized that cap-and-trade is a stealth energy tax.  Cap-and-trade functions as an energy tax in large part because it is designed to suppress and, ultimately, eliminate electricity production from coal, America’s most abundant and affordable electricity fuel.

If BACT can be interpreted to require fuel switching, then it can empower activist bureaucrats to implement the anti-coal agenda that the American people rejected on November 2.

Where does EPA’s guidance document stand on this critical issue? Here’s what it says:

While Step 1 [of the BACT determination process] is intended to capture a broad array of potential options for pollution control, this step of the process is not without limits. EPA has recognized that a Step 1 list of options need not necessarily include inherently lower polluting processes that would fundamentally redefine the nature of the source proposed by the permit applicant.* [p. 25]

* In re Prairie State Generating Company, 13 E.A.D. 1, 23 (EAB 2006).

EPA does not interpret the CAA to prohibit fundamentally redefining the source and has recognized that permitting authorities have the discretion to conduct a broader BACT analysis if they desire.**  The “redefining the source” issue is ultimately a question of degree that is within the discretion of the permitting authority. [p. 28]

** In re Knauf Fiber Glass, 8 E.A.D. at 136; In re Old Dominion Cooperative, 3 E.A.D. at 793.

So, although BACT options “need not necessarily include inherently lower polluting processes that would fundamentally redefine the nature of the source,” EPA “does not interpret” BACT “to prohibit fundamentally redefining the source,” leaving such decisions to the “discretion of the permitting authority.”

It would be prudent to suppose that anti-coal bureaucrats at EPA and State agencies will do whatever they think they can get away with.

Reaction to Obama’s Reaction to Shellacking

by Myron Ebell on November 10, 2010

in Blog

President Barack Obama left on Friday for a ten-day trip to Asia beginning in India.  Before he left, he held a press conference on the election results and gave an interview to Sixty Minutes, which has been released by CBS ahead of its broadcast on Sunday night.  In reply to two questions at his press conference, the President spoke at length about alternatives to cap-and-trade.  He said, “Cap-and-trade was just one way of skinning the cat; it was not the only way.  It was a means, not an end.  And I’m going to be looking for other means to address this problem.”

The President said that there were several areas where he might be able to find common ground with the Republicans in Congress.  These included natural gas, nuclear power, and electric vehicles.  He also said that, “The EPA is under a court order that says greenhouse gases are a pollutant that fall under their jurisdiction.”  This is a misunderstanding, but he then also seemed to express some openness to congressional intervention in EPA regulation of greenhouse gas emissions: “And I think EPA wants help from the legislature on this.  I don’t think that the desire is to somehow be protective of their powers here.”

White House Science Scandal Obfuscated with Creative Grammar

by Chris Horner on November 10, 2010

in Blog

In a blockbuster story soon to be swept under the carpet, Politico reports:

“The White House rewrote crucial sections of an Interior Department report to suggest an independent group of scientists and engineers supported a six-month ban on offshore oil drilling, the Interior inspector general says in a new report.

In the wee hours of the morning of May 27, a staff member to White House energy adviser Carol Browner sent two edited versions of the department report’s executive summary back to Interior. The language had been changed to insinuate the seven-member panel of outside experts – who reviewed a draft of various safety recommendations – endorsed the moratorium, according to the IG report obtained by POLITICO.”

In weasel words that even make this Washingtonian of twenty years blush, the Department of the Interior Inspector General writes:

“‘The White House edit of the original DOI draft executive summary led to the implication that the moratorium recommendation had been peer-reviewed by the experts,’ the IG report states, without judgment on whether the change was an intentional attempt to mislead the public.” (emphasis added)

One can certainly “lead to an inference“. But … “led to the implication”? Oh, right. You are trying not to say “implied“.

This is Exhibit A for why law schools drill into every first year’s head do not use the passive voice. It obscures meaning, begs questions, and diminishes confidence and credibility in the speaker. You come off as trying to weaselly avoid saying something. Like this guy.

And here is the, ahem, ‘implication’ placed in the administration’s twisted report before asserting the recommendations of engineers who in fact did not approve or recommend the moratorium. Prepare yourself to wade through the fog:

“the recommendations contained in this report have been peer reviewed by seven experts identified by the National Academy of Engineering”.

An implication that “led to”. A ‘lie’. Whatever. All good. (Except to the federal judge who caught…er, was led into… it, too; see p. 3).

So, the sexed up report implied something that wasn’t true — that ‘science’ and not ideology drove the numb-skulled left-wing fever dream of a drilling moratorium still effectively ravaging the Gulf Coast’s economy — an ‘implication’ which was nowhere to be found in the original report before the political and ideological spinmasters were called in late the night before the White House issued its sexed up document. They moved some language around…’implying’ a politically desirable conclusion that was patently untrue.

Contrast this with the allegedly scandalous toning down of unsupportable language in a legally meaningless climate report to the UN by former George W. Bush staffer Phil Cooney, who became the subject of a smear job in Al Gore’s silly sci-fi movie (treated in detail here). The Obama administration’s stunt entailed sexing up claims for political/ideological purposes. Where’s the outrage? (come to think of it…where’s Gore?)

Not toning hyperbole down. Sexing claims up unsupportably.

The former was scandalous — we were told. The other is being dismissed by the same crowd as, if anything, simply a result of people not reading the report objectively.

Which is where things get worse. Heads now really must roll.

“Steve Black, energy counselor to Interior Secretary Ken Salazar, was the department’s point man for the safety report…Black said he didn’t have any issues with the White House edit; he and his staffer both told the IG it never occurred to them that an objective reader would conclude that peer reviewers had supported the six-month moratorium.”

Ah. Interior thinks White House did nothing wrong in…rewriting outside parties’ work to fit the ideology and agenda of Interior and the White House. So I assume BP can indeed clear itself, too?

But the smear of others never ends with people who are never wrong. Guess who the unobjective parties alluded to here are? The scientists who wrote the report that was re-written in the wee hours by an uncomfirmed (because she is unconfirmable) anti-energy czar’s ideologues!

That’s right: The White House is blaming the scientists for not recognizing their own report after the ideologues got through with it. It was they who read their bastardized work and complained. Two of the peer reviewers, upset about the ‘implication’, sent letters to Louisiana Gov. Bobby Jindal. The DOI sent letters of apology for the misunderstanding.

Now, having been outed by one of their own, if with weasel-worded friendly fire, the administration blames the people they wronged, for not being objective in reading how people flagrantly mischaracterized their own conclusions.

Incredible. And to think, coming from Carol Browner’s office! Who knew? (well, I did, dedicating the better part of a chapter — “Van Jones Was No Accident:  The Obama Administration’s Radical ‘Green’ Activists” — to her and her M.O.). Orwell and Nixon both live on in the Obama administration.

“Dramatic Increase” in Climate Litigation – Deutsche Bank

by Marlo Lewis on November 10, 2010

in Blog

Deutsche Bank Climate Change Advisors (DBCCA) have just published Growth of U.S. Climate Change Litigation: Trends and Consequences.  My thanks to climate scientist Chip Knappenberger for spotlighting the DBCCA report in his column yesterday on MasterResource.Org.

DBCCA offer a bird’s eye view of the U.S. climate litigation landscape, provide data on the numbers and types of climate-related lawsuits, discuss their prospects for success and potential consequences, and emphasize that, absent congressional intervention, courts “will make the final decisions” about climate policy.

DBCCA summarize their findings as follows:

  • The number of climate change filings doubled between 2006 and 2007. They then reached a plateau for three years, but already in 2010 are on a path to triple over 2009 levels.
  • The largest increase in litigation has been in the area of challenges to federal action, specifically industry challenges to proposed EPA efforts to regulate greenhouse gas emissions.
  • From 2001 to date, 24% of total climate change-related cases were filed by environmental groups aiming to prevent or restrict the permitting of coal-fired power plants.
  • Approximately 37 states have joined, or have stated their intention to join, either side of the EPA litigation challenge.

 Especially useful are two charts on p. 5. The first chart breaks down by number and type climate cases filed through Oct. 8, 2010.

 types-of-climate-cases-filed

 Challenges to federal action (91 cases, 27%) make up the largest category of cases, followed by anti-coal litigation (74 cases, 22%).

The second chart shows the trend in climate-related filings since 1989:

 climate-litigation-filings-over-time

 The striking fact here is the upsurge in lawsuits filed by industry. During 2004-2008, industry filed between 1 and 4 climate-related lawsuits per year. In 2009, industry filed 9 such lawsuits, and in 2010, a whopping 82 lawsuits, about 76% of the total number.

DBCCA expect more industry litigation in the future: “EPA is now proceeding to issue technology standards on a sector-by-sector basis, and will continue unless Congress acts or the Court of Appeals issues a stay or annuls the tailoring rule. Every further move by EPA is likely to be challenged in court by industry.”

Gulf Oil Spill Doesn’t Spread To Voting Booths

by Ben Lieberman on November 9, 2010

in Blog

Call it the election-day dog that didn’t bark – or maybe the oiled bird that didn’t fly – the BP oil spill had virtually no impact at the polls on November 2nd.   The fact that the biggest ecological scare of the summer was nearly forgotten by fall says a lot about where the American people stand on energy and environmental issues.

Less than five months after President Obama gave a primetime address hyping the Deepwater Horizon spill as “the worst environmental disaster America has ever faced,” there is scant evidence that even a single Congressional race was affected by it.  This was not for lack of trying.  In the first few months after the April 20th spill, many Congressional Democrats joined environmental activists and some in the media in blaming pro-drilling Republicans for their complicity in the so-called Gulf disaster. 

For a while, it was fashionable to ridicule those who had chanted “drill baby drill” during the 2008 race.   Opponents of domestic drilling thought they had a defining issue heading into the midterms.

But rather than having to eat their words and go home in defeat, the “drill baby drill” crowd is back – and they’ll be returning to Washington with quite a few new allies. 

Ironically, it was not the spill itself but Obama’s overreaction to it in the form of a job-killing moratorium on offshore drilling that really angered voters in Louisiana and other impacted states.  The only reason the Obamatorium didn’t hurt Democratic candidates there was that they were just as vocal as Republicans in their opposition to it.

 So what does all of this say about voters?  For one thing, it shows that they are getting wise to environmentalist alarmism and exaggeration.   Just as the drumbeat of doom and gloom predictions about global warming didn’t generate public support for cap and trade, neither did the equally-overblown claims of spill–induced ecological devastation create a backlash against offshore drilling.     And, given the still-struggling economy and stubbornly-high unemployment, the electorate is not going to accept costly solutions to overstated threats.   The drilling ban, like cap and trade, would have raised energy costs and destroyed jobs.  As such, it is a nonstarter with the American people and their newly-elected representatives.  

 But has the Obama administration gotten the message?  Not yet.  While admitting that cap and trade legislation is dead, the President coyly describes it as “just one way of skinning the cat,” and added that “I am going to be looking for other means to address this problem,” including EPA regulations that seek to achieve the same ends.   Similarly, the President announced with great fanfare – shortly before the elections – that he is lifting the drilling moratorium.   But this policy change has thus far made no difference as the administration continues to bottle up all new drilling with regulatory red tape and indefinite delays.   

In other words, the same energy and environmental policies that the public rejected when the administration and Congress tried to push them through the front door will be making a return via the back door.   The incoming Congress has been elected to stop this from happening.

Chris Horner on Overestimation of Emissions

by Marc Scribner on November 8, 2010

in Blog, videos

[youtube:http://www.youtube.com/watch?v=puNJKW5HYkA 285 234]

What Is the President Thinking When It Comes to Fracking?

by William Yeatman on November 8, 2010

in Blog

There has been a technological revolution in the natural gas industry over the last decade. In that time, a drilling process known as hydraulic fracturing, or “fracking,” has become economically viable, thereby allowing for the exploitation of huge natural gas reserves that had been too expensive to recover. As a result, America’s natural gas supply has roughly doubled.

In his post-election address last Wednesday, President Barack Obama indicated support for the fracking revolution. His administration’s record, however, is decidedly mixed on the issue.

On the one hand, the State Department is a big proponent of the technology, which it sees as a long term deterrent for Russia. As I’ve noted elsewhere, environmentalist policies in some European countries-but especially Germany-have rendered them increasingly reliant on Russian natural gas, even as Russia has proven willing to use its energy resources as a geopolitical bargaining chip. By exporting the fracking revolution to continental Europe, the State Department hopes to weaken Russia’s influence.

Moreover, Obama’s EPA has kept away from regulating fracking, although it easily could. Indeed, with the Clean Water Act precedent set by the its assault on mountain top removal mining, the EPA could shut down whatever industry it wants to in all of Appalachia, which is home to the largest and most promising natural gas resources made available by fracking-the Marcelus Shale in Pennsylvania and New York.

On the other hand, different agencies within the Obama administration are cracking down on fracking. The Bureau for Land Management (within the Department of the Interior), for example, refuses to grant leases to drill natural gas along the Rocky Mountains. Under a new Interior Department instruction memo for implementing the 1987 Federal Onshore Oil and Gas Leasing Act, the BLM can (and is) withholding scores of millions of dollars of leases, pending completion of National Environmental Protection Act litigation. Contemporaneously, the Council of Environmental Quality is making NEPA challenges even easier.

So what to make of these conflicting signals? At first I thought that Obama saw himself as a visionary problem solver, and that his vision was to address supposed global warming by embracing gas at the expense of coal. Now, I’m not so sure. It looks like he’s being jerked around by people who know better how the executive branch works.

← Previous Entries

Next Entries →