December 2010

Colorado State University: Going Green Costs Too Much! Who Knew?

by Marlo Lewis on December 30, 2010

in Blog

An internal Colorado State University (CSU) study concludes that the university can’t afford to become carbon-neutral by 2020, as planned. A news item about the study appeared in the Dec. 18 edition of Coloradoan.Com. Erick, a blogger on RedState, has a funny commentary on the story.

CSU had been planning to build what the Coloradoan describes as a “massive electricity-generating wind farm” on the university’s Maxwell campus. However, a few weeks ago the deal collapsed. Fort Collins campus President Tony Frank said the University can’t afford to achieve carbon-neutrality in the foreseeable future. How come?

Well, for one thing, CSU emissions have been going up in recent years: “In fiscal year 2006, CSU emitted 217,070 metric tons of carbon dioxide. Those emissions rose 7 per-cent by 2009.” Okay, but why? The Coloradoan reports:

The university counts emissions for everything from electrical power generation and faculty commuting to air travel by students studying abroad. And when it builds new buildings and admits additional students, the demand generally goes up.

“We could save a lot of energy by sending the students home, sending the researchers home. But that’s not what we do here,” said Carol Dollard, who helps coordinate CSU’s climate-action efforts. “We’re adding students, adding buildings.”

Erick comments: “An expanding business generates more emissions. Who knew?”

Still, why can’t MSU just cut emissions and lead by example? I mean after all, they’re not some greedy oil company. They’re a bastion of progressive thinking, they want to save the planet, and they don’t lack political will. What gives? The Coloradoan explains:

In order to significantly reduce emissions, CSU would have to dramatically shift where it gets its power and dramatically reduce the amount of power it uses. Most of the electricity in Colorado comes from coal-fired power plants and, increasingly, from burning natural gas. But making that shift is expensive because CSU uses so much electricity, not just for residence halls and classroom buildings, but laboratories filled with power-hungry computers and experimental equipment.

Oh, so ejumacation and “the science” depend on electricity, and affordable, fossil-based electricity supports learning and educational opportunity. Facts CSU students probably never encounter in the classroom.

As President Frank put it, “For us, you’d have to really jack up tuition [to run MSU on zero-carbon energy] and put it toward plans like that.” 

Erick of RedState comments: “Really? You mean mandating a huge reduction in emissions would require a business to pass on those costs to its customers?”

He concludes:

Colorado State University learned more about basic economics here than they ever could have from a government-funded study. While I’d love to believe that this knowledge will be passed on to the greater academic community, I just can’t imagine that it will. The irony of their own comments are completely lost on them.

Cooler Heads Digest 30 December 2010

by William Yeatman on December 30, 2010

in Blog, Cooler Heads Digest

In the News

The Mid-West Wind Tax
Wall Street Journal editorial, 30 December 2010

Ed Rendell Is a Wuss about Climate Change
Iain Murray, Washington Examiner, 29 December 2010

No Comfort and Joy over Holiday Gas Prices
Ben Lieberman, GlobalWarming.org, 29 December 2010

President Obama’s Never Ending Drilling Moratorium
Greg Pollowitz, Planet Gore, 29 December 2010

Jobs, Joblessness, and Obamanomics
Chris Horner, Daily Caller, 28 December 2010

Regs for Rigs
Marlo Lewis, MasterResource.org, 28 December 2010

The Mystery of Vanishing Snow
James Delingpole, Telegraph, 27 December 2010

Hot Sensations vs. Cold Facts
Larry Bell, Forbes, 27 December 2010

Pennsylvania Legislature Should Repeal Expensive Energy Mandate
Paul Chesser, Harrisburg Patriot-News, 26 December 2010

News You Can Use

Global Warming Science Jumps the Shark

Over the last decade, the “scientific consensus” has been that global warming would cause warmer winters and the absence of snow in the United Kingdom. Now that the U.K. is in the grip of the coldest winter in 1,000 years, the consensus has shifted. In an oped last Sunday in the New York Times, atmospheric scientist Judah Cohen explained how freezing temperatures in Europe are in fact due to global warming.

Inside the Beltway

Myron Ebell

EPA Issues Schedule for Greenhouse Gas Regulations

Just in time for Christmas, the Environmental Protection Agency released further plans for regulating greenhouse gas emissions using the Clean Air Act.  The EPA announced on December 23rd that it would release performance standards for power plants by July 26, 2011 and have the final rule adopted by May 26, 2012.  Performance standards for oil refineries would be released by December 10, 2011 and a final rule by November 10, 2012.  The new performance standards would cover about 40% of total U. S. greenhouse gas emissions-primarily carbon dioxide.

EPA is going to begin regulating large stationary sources of emissions on January 2, 2011, but those regulations will only apply to permits for new or expanded facilities.  The performance standards for power plants and refineries will apply to existing facilities.  Few details were given in the announcement, but there has been speculation that EPA is thinking about devising a cap-and-trade program within the Clean Air Act and without any further involvement by Congress.  Further performance standards for other sources, such as cement kilns, may be on the way as well.

Robin Bravender in Politico provided a good overview of EPA’s announcement, which can be found here.  Gabriel Nelson’s more detailed story in Greenwire was picked up by the New York Times’s web site and can be found here.

Will Rep. Fred Upton Stand up to the EPA?

Representative Fred Upton (R-Mich.), the incoming Chairman of the House Energy and Commerce Committee, and Tim Phillips, president of Americans for Prosperity, published an op-ed in the Wall Street Journal on December 28 on “How Congress Can Stop the EPA’s Power Grab.”  They mention that, “The best solution is for Congress to overturn the EPA’s proposed greenhouse gas regulations outright.”  However, most of their article discusses two more limited alternatives.  Upton and Phillips favor delaying EPA until the court cases challenging EPA’s legal authority are decided over the proposal originally made by Senator Jay Rockefeller (D-WV) for a two-year delay.  They call a two-year delay arbitrary and express some confidence that the federal courts are going to find that EPA lacks legal authority to regulate greenhouse gas emissions.

I believe their confidence is misplaced.  There is a long history of federal courts deferring to the EPA as long as the EPA is asserting broader regulatory authority.  What worries me more is that Upton and Phillips seem to be implying that if the federal court tells EPA that they can go ahead and regulate, then Upton and Phillips will be happy and the Congress should be happy with that outcome.  It seems to me that a senior Member of Congress should be arguing that it is up to Congress to decide whether and how to regulate greenhouse gas emissions and therefore that the court’s decision is irrelevant.  Moreover, as a matter of political strategy, I think it is dangerous for the Congress to wait for a court decision before acting.  If the court allows regulation under the existing Clean Air Act, then environmental pressure groups will use that as an argument against any attempt in Congress to block or limit EPA.

Interior Issues Anti-Energy Regulations

Also just in time for Christmas, Secretary of the Interior Ken Salazar on December 23 ordered the Bureau of Land Management to manage millions of acres of federal lands as “Wild Lands” and thereby prevent such human uses as mining and oil and gas production.  Salazar’s action effectively overturns a 2003 deal between the Department of the Interior and the State of Utah that prevented the BLM from arbitrarily withdrawing land from management under the Multiple Use and Sustained Yield Act and putting it under de facto wilderness management.  The new “Wild Lands” category is an arbitrary bureaucratic classification that has no status in law and should not be confused with Wilderness Areas designated by Congress and managed under the Wilderness Act.

Utah Governor Gary Herbert reacted angrily, as did Rep. Rob Bishop (R-Utah), the incoming chairman of the House public lands subcommittee. Bishop told the Salt Lake Tribune, “Make no mistake about it, this decision will seriously hinder domestic energy development and further contributes to the uncertainty and economic distress that continues to prevent the creation of new jobs in a region that has unduly suffered from this administration’s radical policies.”  An editorial in the Washington Examiner asked, “Who’s doing the most to hobble the productive power of the U.S. economy, Environmental Protection Agency Administrator Lisa Jackson or Department of the Interior Secretary Ken Salazar?” The answer is that they’re both acting on behalf of President Barack Obama and that what they’re doing is part of his multi-front war against American energy and the large part of our economy that runs on that energy.

Across the States

Texas

The EPA last week seized partial control of Texas’s air quality permitting authority, after the state refused to regulate greenhouse gases. Texas is one of three states (the other two are Alabama and Virginia) to have filed a lawsuit against the EPA alleging that the agency doesn’t have the authority to regulate greenhouse gases under the Clean Air Act, but the federal courts have yet to rule on the case. In the meantime, the EPA’s climate regulations start on January 2, and Texas is the only state to refuse to implement them. As a result, the EPA will bypass Texas regulators, and directly issue greenhouse gas permits. Texas Governor Rick Perry (R) has vowed to fight the EPA.

Washington

In an excellent column today, George Will noted that Cowlitz County in Washington state recently approved the construction of a coal export terminal from which millions of tons of U.S. coal could be shipped to Asia annually. As the Cooler Heads Digest has reported in the past, the Obama administration’s crackdown on coal has forced U.S. coal companies to seek other markets, primarily China. As such, this President’s anti-energy policies are putting the U.S. on the path to a future whereby: (1) we export our affordable energy to China; (2) China uses this affordable energy to build energy-intensive renewable energy generation, like massive wind turbines and solar panels; (3) and then the U.S. buys these expensive, renewable energy goods from China, using money borrowed from China. What a deal!

Around the World

New Zealand Climate Skeptics Fight Back

The New Zealand Climate Science Coalition this week presented convincing evidence that the National Institute of Water and Atmospheric Research (NIWA) overstated the robustness of its alarmist climate data. In a recent paper, NIWA claimed that New Zealand temperatures rose 1 degree Celsius. Last week, NIWA issued a “peer review” of its paper by the Australian Bureau of Meteorologists, which, NIWA claimed, confirms its findings. The Climate Science Coalition this week noted that a true peer review is impossible, because NIWA has lost the underlying data. NIWA’s embarrassing inability to back up its temperature claims with raw data only became public after the Climate Science Coalition asked for it.

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

No Comfort and Joy Over Holiday Gas Prices

by Ben Lieberman on December 29, 2010

in Blog

 

It wasn’t a very merry Christmas for America’s motorists, as pump prices averaged $3.00 per gallon nationwide  for the first time since 2008.   And President Obama’s holiday gift to car and truck owners – new proposals to clamp down on domestic drilling and ratchet up refining costs – will only make matters worse in the years ahead.

The days before a big holiday weekend have become a busy time for Obama’s regulators, who take advantage of the chance to slip through unpopular measures with minimal attention.   Coming on the heels of a pre-Thanksgiving announcement that oil exploration and drilling in Alaska will be curtailed in order to create vast expanses of polar bear habitat, the Obama Department of Interior (DOI) made a pre-Christmas policy change that would further reduce domestic oil supplies by placing more energy rich lands out of reach.   

It is supposed to require an act of Congress to designate federal lands as wilderness areas – and for good reason as this designation places any such lands off limits to oil and gas leasing or any other economically beneficial use.   But thanks to the December 23rd announcement, DOI bureaucrats will essentially be able to make that determination on their own, reversing a Bush-era policy that had constrained this kind of unilateral agency action.  

At issue are millions of acres throughout the West.  Some of this land sits atop promising oil and natural gas deposits – indeed, wherever there’s energy below ground, environmental activists and bureaucrats hype whatever is above ground as some kind of treasure in need of being fenced off.  Utah is particularly hard hit, with up to 6 million acres now in jeopardy of getting locked up.   Rep. Rob Bishop (R-Utah) told the Salt Lake Tribune that “this decision will seriously hinder domestic energy development and further contribute to the uncertainty and economic distress that continues to prevent the creation of new jobs in a region that has unduly suffered from this administration’s radical policies.”     

On the same day as DOI’s anti-drilling announcement, the Environmental Protection Agency proposed another piece of its global warming agenda, this one targeting America’s refiners.   Though the details of the provisions placing limits on carbon dioxide emissions from refineries have yet to be determined, refiners fear it would increase the cost of turning oil into gasoline and thus raise retail prices.

It should be noted that these new measures do not explain the current spike to $3.00 per gallon, which appears to be the result of growing demand from a recovering global economy.    But these and other anti-energy policies are very likely to put upward pressure on pump prices once they take effect in the years ahead.   Arctic Power, an organization funded by Alaska to promote its energy industry, was sharply critical of the polar bear decision as well as other measures that have all but shut down oil exploration and drilling activities in the state.    Adrian Herrera, head of Arctic Power’s Washington office, calls such policies “taking away the farmer’s seeds,” because today’s exploration and drilling leads to tomorrow’s production.  Without new fields to replace the declining output from existing ones, future production will dwindle and prices will rise.

In sum, the administration gave us a Thursday-before-Christmas present of lower future supplies and thus higher prices for oil plus increased costs of refining that oil into gasoline, and did so at a time when pump prices have reached their highest level since Obama took office. Little wonder the feds made the announcement when so few were paying attention.

Energy Policy: Top 5 Worst Sitting Governors/Governors-elect

by William Yeatman on December 28, 2010

in Blog

In an earlier post, I listed the top five worst governors on energy policy. Alas, four of the five were lame ducks, which means that my original list had a very limited shelf life. With that in mind, I made a new list. This one is limited to sitting governors and governors-elect, so it should remain relevant for the foreseeable future.

And so, without further ado, THE TOP FIVE WORST GOVERNORS ON ENERGY POLICY….[cue drum roll]…

5         Kansas Governor-elect Sam Brownback

Sam Brownback has yet to serve a day as Governor, but he earned a place on this list for a particularly egregious mistake he recently committed while representing Kansas in the U.S. Senate.  It happened late last July. At the time, with an election looming, Senate majority leader Harry Reid decided that to drop debate on a Soviet-style renewable energy production quota, known as a Renewable Electricity Standard. Cap-and-trade had already died in the Senate, and the Congressional calendar was nearing its end, so Reid’s decision to abandon a RES meant that the 111th Congress would avoid the worst ideas in energy policy. Then, Sen. Sam Brownback, in an apparent effort to snatch defeat from the jaws of victory, announced that he would introduce aRES. Thankfully, Brownback’s proposal was ignored.

4.       New Jersey Governor Chris Christie

Christie’s skepticism of global warming alarmism is great. What’s not so great is his continued participation in a regional cap-and-trade energy rationing scheme. For whatever reason, the climate skeptic sounding governor has yet to pull his state out of the Regional Greenhouse Gas Initiative, the aforementioned energy tax.

3.       Massachusetts Governor Deval Patrick

For Massachusetts Governor Deval Patrick, climate policy is all about style over substance. In one sense, that’s a good thing, because Patrick (like me) has no interest in expensive energy policies.  In 2008, for example, Gov. Patrick championed the Global Warming Solutions Act, which, according to the Governor’s press release, requires emissions reductions 25% below 1990 levels by 2020. That sounds like a big commitment, but when you read the fine print, it turns out that the legislation mandates emissions reductions of only 10% below 1990 levels. Moreover, the State’s business-as-usual future is projected to reduce emissions 3% below 1990 levels by 2020. And when you account for federal and state policies already in place, Massachusetts is on track to reduce emissions 18% below 1990 levels by 2020. The upshot is that the Governor’s climate plan is pointless, which is probably the reason why his website’s “key priorities” page makes no mention of global warming. While I appreciate the Massachusetts Governor’s aversion to expensive energy climate policies, by enacting  long term, legally binding emissions reductions targets, he created a powerful tool with which environmentalist lawyers can gum up economic activity.

2.       Maryland Governor Martin O Malley

Governor Martin O Malley wants his constituents to believe that they can have their cake and eat it, too, when it comes to climate change mitigation. In 2009, Governor O Malley sponsored the Greenhouse Gas Reductions Act, which requires emissions reductions 25% below 2006 levels by 2020. Yet the law requires that any emissions reductions strategy also, “produce a net economic benefit to the State’s economy and a net increase in jobs in the state.” Of course, these are mutually exclusive propositions. No matter how much politicians blather on about “green jobs,” the fact remains that the price of “doing something” about climate change is forsaken economic growth. To be sure, O Malley ensured that he wouldn’t be the one to square this circle. The law postpones any meaningful requirement until after the Governor is safely out of office.

1.       California Governor-elect Jerry Brown (the #1 worst by a landslide)

Californians will rue the day they elected Jerry Brown for a second stint in the Governor’s mansion. He is exactly the wrong person at the exact worst time. The start of Brown’s term coincides the implementation phase of the 2006 Global Warming Solutions Act, which grants the state executive virtually unlimited authority to reduce greenhouse gas emissions 20% below 1990 levels by 2020. Governor-elect Brown has given every indication he will use this unprecedented expansion of authority in an imprudent manner. In the 1970s, when he was last governor, Brown refused to allow new generation resources to be built in the State, claiming instead that energy efficiency regulations would so diminish energy demand that no new power plants would be needed. Of course, he was wrong, and the policies he put in place led directly to the California energy crisis in 2000/2001. During the Schwarzenegger Administration, Jerry Brown served as Attorney General, and in that capacity he sued California counties for failing to take climate change mitigation into account in their long term growth strategies. It is difficult to overstate what trouble lies ahead for California.

Market Failure or Government Failure? An Update on EPA’s Proposed Diesel Truck Fuel Economy Standards

by Marlo Lewis on December 28, 2010

in Blog

In two recent blog posts (here and here), I examined EPA’s and the National Highway Traffic Safety Administration’s (NHTSA’s) rationale for establishing first-ever fuel-economy standards for trucks.
 
Today on MasterResource.Org, I provide additional evidence that what the agencies are pleased to call the trucking industry’s “under-investment” in fuel-saving technology is an unintended (although not unforseen) consequence of EPA’s ever-tightening diesel-engine emission standards.
 
In short, I argue that the declining fuel economy of 18-wheelers over the past decade is a case of government failure, not market failure. Conveniently, EPA’s role in holding back heavy-truck fuel economy is never discussed in the agencies’ proposed rule.

To read my column, click here.

The Big Green Buy Is a Very Dumb Idea

by William Yeatman on December 27, 2010

in Blog

Mark Hertsgaard and Christian Parenti, two reporters from The Nation, a far-left periodical, have an oped in syndication about how the federal government’s huge buying power can alter the economics of green energy.

Here’s how it works, in the authors’ own words:

Federal spending is responsible for roughly 25% of the gross national product, giving Washington enormous power to influence marketplace behavior even if annual spending levels are trimmed…If the Pentagon, the Postal Service and other agencies shifted their buying wherever possible from dirty technologies to clean ones, it would give manufacturers…a huge influx of orders. These orders would yield economies of scale that would enable green manufacturers to substantially reduce prices.

As the prices of green technologies fall to near that of dirty technologies, consumers and private companies will begin buying green of their own accord. Their purchases will yield additional economies of scale, enabling green manufacturers to lower prices further and entice more buyers, thus hastening the displacement of dirty technologies.

Hertsgaard and Parenti call their plan the “Big Green Buy.” I call it a “Very Dumb Idea.”

Recent history supports my description over theirs. Evidently unbeknownst to these authors, the federal government already has attempted The Big Green Buy, and it was a disaster.

From 1999 to 2006, the Post Office became the world’s #1 buyer of “flex-fuel” cars capable of running on E-85, a fuel blend containing 85% ethanol, a then-voguish green fuel distilled from the starch in corn. The Post-Office’s 30,000 car buying spree was meant to achieve markets of scale for ethanol production and use.

Unfortunately for the feds, the flex fuel plan backfired. The problem was that E-85 fueling stations were only available in a handful of states; everywhere else, the new Post Office vehicles had to use regular unleaded. And because “flex-fuel” vehicles tended to be SUVs, and were therefore larger and less fuel-efficient than the vehicles they replaced, gasoline consumption increased by almost 1.5 million gallons.

Such are the unintended consequences of Best Laid Plans.

Headline 2000: “Snowfalls are now just a thing of the past”

by Marlo Lewis on December 27, 2010

in Blog

On March 20, 2000, The Independent, a British newspaper, reported that “Snowfalls are just a thing of the past.” Global warming was simply making the UK too warm for heavy snowfalls. The column quotes Dr. David Viner of the Climatic Research Unit (CRU) of the University of East Anglia — yes, the epicenter of what would become the Climategate scandal — as saying that within a few years snowfall will become “a very rare and exciting event.” Indeed, Viner opined, “Children just aren’t going to know what snow is.”

Similarly, David Parker, at the UK’s Hadley Centre for Climate Prediction and Research, said that eventually British children could have only “virtual” experience of snow via movies and the Internet.

Well, last week another British newspaper, the Daily Mail, reported “The Coldest December since records began as temperatures plummet to minus 10C bringing travel chaos across Britain.” Here’s a snippet from the article (also excerpted by Wesley J. Smith in First Things):

Swathes of Britain skidded to a halt today as the big freeze returned – grounding flights, closing rail links and leaving traffic at a standstill. And tonight the nation was braced for another 10 in of snow and yet more sub-zero temperatures – with no let-up in the bitterly cold weather for at least a month, forecasters have warned. The Arctic conditions are set to last through the Christmas and New Year bank holidays and beyond and as temperatures plummeted to -10c (14f) the Met Office said this December was ‘almost certain’ to become the coldest since records began in 1910.

Meanwhile, back in the USA, the lead item in Google News is a Bloomberg story, “Snow Blankets US East Coast, Stranding Travelers.”  Bloomberg reports that, “New York City’s Central Park had 20 inches (51 centimeters) of snow by 8 a.m., the most for the month in 62 years.” This was “the most snow in the park for any December since 1948, the agency’s website showed.”

As in the UK, the record-breaking snowfall is disrupting transportation, keeping travelers snowbound and delaying Santa’s deliveries. It’s also downing power lines and turning off the Christmas lights. Some highlights:

  • “More than 6,000 flights were canceled in the region since yesterday as airports closed.”
  • “The day after Christmas is one of the five busiest shopping days of the year, and it may take retailers two weeks to capture sales lost yesterday,” an industry analyst told Bloomberg.
  • “NJ Transit, which transports about 170,000 commuters to and from New York City daily, suspended bus service as of 8:30 p.m. yesterday, according to a statement.”
  • “Four hundred subway passengers were aboard an A train that was stuck in Queens for more than six hours, until it could be pushed to a station by another train. The Coney Island area was without subway service.”  
  • “Consolidated Edison Inc. reported there were 6,167 customers in Queens, New York, and 1,811 in Westchester County without power. “
  • “National Grid Plc, which provides electricity in New York and Massachusetts, was reporting power outages at 14 sites throughout New York and Massachusetts affecting about 29,727 homes and businesses. The largest was in Norfolk, Massachusetts, where 10,902 customers were without power.”

As my colleague Heritage Foundation economist David Kreutzer observed at a panel discussion, winter is the biggest climate-related threat to public health and welfare!

Britain has had three snowy winters in a row, and this year’s Snowmageddon USA follows last year’s Snowpocalypse. Despite global warming, it seems, our children may never enjoy either Florida’s balmy weather in New York and Boston or Mediterranean “liveability” in the British isles.

Ethanol – Revolt Against King Corn Has Just Begun

by Marlo Lewis on December 23, 2010

in Blog

The corn lobby defeated bipartisan efforts this year to remove two of ethanol’s political privileges, the 45¢ per gallon blender’s tax credit and the 54¢ per gallon protective tariff against imported Brazilian sugarcane ethanol.

However, roughly 60 organizations from across the political spectrum joined forces to challenge King Corn, and many are resolved to work together to carry on the fight next year.

Perhaps even more important, ethanol-subsidy foes now occupy the moral high ground. The Washington Post, the New York Times, and the Chicago Tribune, left-leaning stalwarts that usually applaud every green fad and cheer every government intervention in the economy, all say it’s time to end to the blender’s credit. Politically-correct Time Magazine calls federal ethanol policy “the clean energy scam.” Even Al Gore acknowledges that his previous support for ethanol subsidies was a “mistake” undertaken to win the support of corn farmers in the Iowa presidential primary.

Aside from corn farmers, ethanol distillers, and their mouthpieces in Congress, hardly any informed person disputes that corn ethanol does squat for U.S. energy security, inflates grain prices, shortchanges consumers at the pump, contributes to air and water pollution, and (on a life-cycle basis) emits more carbon dioxide than the gasoline it replaces.

Among the “progressive” organs to turn a skeptical eye on ethanol is National Public Radio, which this week ran a three-part series on the topic. 

In the first segment, Prof. David Swenson at Iowa State University, in the heart of corn country, takes issue with industry ads claiming that ethanol has created “nearly 400,000 jobs.” The actual figure, Swenson says, is “in the neighborhood of 30,000-35,000 jobs.”  

But doesn’t ethanol help insulate us from the rollercoaster of global crude oil prices by providing an alternative to gasoline?

Quite the reverse, explains Iowa State University Prof. Bruce Babcock in NPR’s second segment. Precisely because ethanol competes with gasoline, “we’ve now hitched the price of corn, inextricably linked the price of corn to the price of crude oil.” And because corn competes for land and customers with other grains, is widely used in food processing, and is a key livestock feed, the price of food is now linked to the price of crude oil. NPR comments: “With corn prices more closely tied to oil prices, when the price of gas goes up, it raises the demand for ethanol. That means consumers will feel it in two places: at the pump and on the dinner table.”

EPA recently approved the sale of E-15 — motor fuel blended with 15% ethanol, which contains 50% more ethanol than the E-10 misleadingly sold at service stations as “regular gasoline.” Growth Energy, a leading ethanol industry group, claims that consumers should be happy to fill their tanks with E-15 because that’s what NASCAR drivers now use. An obvious non-sequiter. A diet that’s good for a professional football player or a professional marathon runner is not necessarily good for a couch potato or even a weekend warrior.

To cut through the hype, NPR’s third segment interviews Dan Edmunds, director of vehicle testing at the auto research Website Edmunds.Com. Edmunds drove a flexible-fueled vehicle from San Diego to Las Vegas and back, first using E-10 and then using E-85 (motor fuel blended with 85% ethanol). He made the round trip with 36.5 gallons of gasoline. On E-85 it took 50 gallons — 37% more fuel to go the same distance. 

Public policy change typically requires odd-couple (“Baptist-Bootlegger“) alliances — a convergence of ideologically-motivated activists with bottom line-motivated business interests. That’s why demoting or even dethroning King Corn is now a real possibility. Ethanol’s fall from ideological grace among green activists and the mainstream media occurs at a time when powerful industry groups are either in open revolt against the King or are resisting his demands for additional privileges.

Rebels include the beef, poultry, hog, and dairy industries. They advocate repeal of the ethanol tariff and tax credit because those policies raise the price of corn, their basic feedstock, making them less competitive.

Earlier this week, several major U.S. oil refiners — direct beneficiaries of the blender’s credit, BTW — said they would not distribute E-15 despite EPA’s authorization to sell the fuel. As reported in the Wall Street Journal, Valero Energy Corp., Marathon Oil Corp., and Tesoro Corp. contend that E-15  could harm older car and truck engines and void their warranties.

The Journal also noted that the Alliance of Automobile Manufacturers, which represents General Motors, Ford, Toyota, and other auto companies “filed a petition with a U.S. appellate court in Washington on Monday challenging the EPA’s approval for the sale of gasoline containing 15% ethanol.”

The lame duck Congress renewed the ethanol tariff and tax credit for another year. But if Congress had debated the issue in 2009, the extension likely would have been for five years. That reflects the growing strength of the bipartisan, left-right, industry-activist anti-subsidy coalition.

A factor that should strengthen rebel forces — the incoming Congress will include many more fiscal conservatives than the one that just adjourned.

Cooler Heads Digest 17 December 2010

by William Yeatman on December 17, 2010

in Blog, Cooler Heads Digest

In the News

The Congressional Research Service’s Dirty Little Big Green Secret
Ron Arnold, Washington Examiner, 17 December 2010

Duke Energy’s Bad Bet
Chris Horner, Planet Gore, 15 December 2010

Wikileaks Climate Cables Show Obama’s Desperation
John Rossomando, Daily Caller, 15 December 2010

Budget Hawks Oppose Nuclear Loan Guarantees
Jesse Emspak, International Business Times, 15 December 2010

7 Year Moratorium Is a Bad Idea
Phil Ciciora, Illinois News Bureau, 14 December 2010

Energy Policy: 5 Worst Governors
William Yeatman, GlobalWarming.org, 14 December 2010

Ethanol Idiocy Will Not Die
Rich Lowry, National Review, 14 December 2010

Deutsche Bank’s “Corporate Irresponsibility,” Part 1
David Henderson, Financial Post, 13 December 2010

Deutsche Bank’s “Corporate Irresponsibility,” Part 2
Terence Corcoran, Financial Post, 13 December 2010

News you Can Use

Offshore Wind = Ultra Expensive Energy

In a Master Resource post on the economics of offshore wind energy, Lisa Linowes notes that Massachusetts regulators recently approved a contract to buy offshore wind energy for 18.7 cents a kilowatt, “a price that’s three times the cost of in-region natural gas and at least double the cost of other renewable options.”

Inside the Beltway

Myron Ebell

Congress Passes and President Signs Tax Bill with Goodies for Renewables

The Senate and House overwhelmingly passed and President Barack Obama signed the bill to extend the Bush tax cuts of 2001 and 2003 for two years.  There were a lot of other provisions in the bill, including one-year extensions of the 45 cents per gallon taxpayer subsidy and 54 cents tariff for ethanol and the section 1603 up-front taxpayer cash grants of 30% for renewable energy projects.  So we will keep throwing money away on dead-end renewables for at least another year.

Rockefeller Plays Games with Two-Year EPA Delay Bill

Senator Jay Rockefeller (D-WV) suddenly started talking again this week about offering an amendment to delay implementation of Clean Air Act regulation of greenhouse gas emissions for two years.  Then he quickly blamed Republicans for thwarting his efforts by blocking consideration of the Omnibus Appropriations bill.  Having failed to pass any of the twelve appropriations bills for the various federal departments and programs this year, the Omnibus Appropriations bill is the Democratic majority’s last-ditch attempt to lock in colossal spending levels before the Republicans take over the House in January.

Senate Majority Leader Harry Reid (D-Nev.) promised Rockefeller a vote on his amendment last June during the debate on Senator Lisa Murkowski’s (R-Alaska) Resolution of Disapproval under the Congressional Review Act.  Reid peeled enough Democrats away with that promise to defeat the resolution that would have blocked EPA from regulating greenhouse emissions permanently.  But of course, a promise from Senator Reid is not what is sometimes understood by that term.  Everyone knew at the time that Reid was not promising anything.

Senator Rockefeller vowed that, “I will be back fighting hard for my two-year bill as my first order of business in the new Congress.”  That may be true, but events have passed beyond the Senator from West Virginia.  House Republicans will be looking to move a permanent suspension of EPA greenhouse gas regulations.

Across the States

California

By a 9 to 1 vote, the California Air Resources Board this week approved a state-wide cap-and-trade scheme. The adopted regulation is more than 3,000 pages long, but most of the details have yet to be worked out as the CARB rushed to meet a December 31 deadline set by the 2006 Global Warming Solutions Act, legislation that authorizes the CARB to reduce the State’s greenhouse gases to 1990 levels by 2020. In order to protect California businesses from out-of-state competition, the CARB will allocate emissions credits (a.k.a. energy-rationing coupons) for free. The European Union Emissions Trading Scheme is the only precedent for free allocation of carbon credits, and it resulted in windfall profits for politically-connected industries and higher electricity prices for consumers.

Kansas

In October 2007, Kansas Health and Environmental Secretary Roderick Bremby denied permits for two proposed 700 MW coal-fired power plants in western Kansas. In 2008 and 2009, the State Legislature passed four bills to allow Sunflower to build the plants, but then-Governor Kathleen Sebelius (currently the Secretary of the U.S. Department of Health and Human Services) vetoed them all. After she left office to join the Obama administration, her successor Mark Parkinson immediately brokered a deal to allow for a scaled-down version of the project. This week, John Mitchell, the state’s acting secretary of health and environment, issued an air-quality permit for an 895 megawatt plant. The permit was issued only weeks before the start of new EPA regulations for greenhouse gases. Environmentalists have promised to litigate.

Around the World

Cancun Wrap-up

Last week’s Cooler Heads Digest was published before the conclusion of the 16th Conference of the Parties to the United Nations Framework Convention on Climate Change in Cancun, Mexico; nonetheless, we predicted that the negotiators ultimately would “produce an agreement to meet again.” We were right. The “Cancun Agreement” achieved a near-consensus (Bolivia was the only country to object) by deferring all decisions to future negotiations. The parties agreed to meet in Durbin, South Africa for COP-17 in December 2011.

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

Energy Policy: Top Five Worst Governors in America

by William Yeatman on December 14, 2010

in Blog

5.       New Jersey Governor Chris Christie
Christie’s skepticism of global warming alarmism is great. What’s not so great is his continued participation in a regional cap-and-trade energy rationing scheme. For whatever reason, the climate skeptic sounding governor has yet to pull his state out of the Regional Greenhouse Gas Initiative, the aforementioned energy tax.

4.       Florida Governor Charlie Crist (lame duck)
In 2007, Crist signed a series of environmentalist executive orders, which, thankfully, never came to fruition because they were spurned by the State Legislature. Crist earned his spot on this list for his invertebrate take on offshore drilling. When he campaigned for Governor, he opposed offshore drilling; when gas prices spiked in the summer of 2008, he supported drilling; and after the Gulf oil spill this past summer, he reverted back to opposing the practice.

3.       California Governor Arnold Schwarzenegger (lame-duck)
As I’ve explained here, here, and here, the Governator’s environmentalist pandering is empty blathering. For all the talk about California going green, the fact of the matter is that California’s environmentalist energy policies have been ineffectual at achieving anything other than higher energy prices. Rather than environmentalist accomplishments, Schwarzenegger’s only lasting legacy will be the almost-unlimited power he has bequeathed to his successor, Governor-elect Jerry “Moonbeam” Brown. Starting in 2011, the law accords the Governor amorphous, yet absolute, authority to mitigate climate change.

2.       New Mexico Governor Bill Richardson (lame duck)
Using authority derived from 1978 state law, New Mexico Governor Bill Richardson (D) last month imposed a cap-and-trade energy rationing scheme. The lame-duck Governor enacted the energy-rationing scheme administratively on November 2, the same day that voters indicated their displeasure with expensive energy climate policies by electing Susana Martinez (R) to succeed Richardson. She had campaigned against cap-and-trade. To be sure, Richardson’s energy policy is largely toothless; nonetheless, the executive power grab is disconcerting.

1.       Colorado Governor Bill Ritter (lame duck)
It will take a generation for Coloradans to undo the harm inflicted by the Governor Bill Ritter’s much-ballyhooed “New Energy Economy.” At Ritter’s behest: the General Assembly changed the mission of state utilities from providing “least cost” electricity, to fighting climate change; the Public Utilities Commission allowed the nation’s first carbon tax; and Department of Public Health and Environment exaggerated the threat of federal air quality regulations in order to justify legislation that picks winners and losers in the electricity industry.

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