Cooler Heads Digest 11 November 2011

by William Yeatman on November 11, 2011

in Blog

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News You Can Use

Oil and Gas Sector Is Driving Job Growth

According to a recent report by economics consulting firm EMSI, nine of the top eleven fast-growing jobs in the nation are in the oil and gas sector. The cause of the job growth is high demand for hydrocarbon energy and also technological breakthroughs in drilling (primarily hydraulic fracturing, also known as “fracking”).

Inside the Beltway

Myron Ebell

Obama Punts on Pipeline

After the huge demonstration that circled the White House last Sunday, November 6, the Obama administration on November 10 announced that they would delay a decision on the Keystone XL pipeline until after the 2012 election. This gets President Obama out of a very tough spot between his labor union supporters and his environmental pressure group supporters.

Keystone XL would send around 750,000 barrels a day from the Alberta oil sands to refineries in the Gulf. Delaying the pipeline further risks killing it in favor of an alternative to Canada’s Pacific coast, where the oil would be shipped to Asian refineries.

This appears to me to be just another example of President Obama’s hostility to economic growth and prosperity. He wants to increase the size and scope of government, but seems not to have a clue that a stagnant or shrinking private sector cannot support more government.

Senate Defeats Resolution to Rein in EPA

The Senate defeated Senator Rand Paul’s resolution of disapproval of the Cross-State Air Pollution Rule (CSAPR) on Thursday, November 10. The vote on S. J. Res. 27 was 41 to 56.

Under the Congressional Review Act, the resolution required only a simple majority. Forty-one votes was a disappointing result. It can largely be blamed on four senators, who introduced two competing bills to delay rather than block the rule. S. 1833 was introduced by Senators Dan Coats (R-Ind.) and Joe Manchin (D-W.V.). S. 1815 was introduced by Senators Lamar Alexander (R-Tenn.) and Mark Pryor (D-Ark.).

These bills allowed several Senators to vote against the resolution, while claiming that they support doing something. Since neither of these bills has any chance of getting the sixty votes necessary, this claim is entirely hypocritical.

The odd thing is that the four senators introducing these two bills represent states covered by the CSAPR, which may do serious economic damage to their economies. Perhaps they don’t care.

Solyndra Update

This week in the Solyndra saga, the House Energy and Commerce Committee released e-mails that reveal a lot of lobbying of the White House by Solyndra and its principal investors. The e-mails cast doubt on the claims by everyone involved that George Kaiser’s frequent visits to the White House were only to talk about his charitable causes.

The funniest e-mail was from Ken Levit to Steve Mitchell, two major Solyndra investors, on February 27, in which Mr. Levit wrote that, “They about had an orgasm in Biden’s office when we mentioned Solyndra” A follow-up email from Mitchell to Levit later that day responded, “That’s awesome! Get us a [Department of Energy] loan.”

Across the States

William Yeatman

California’s Lame Justification for Expensive Energy

By a four to one vote, the California Public Utilities Commission yesterday approved a 25-year contract for Pacific Gas and Electric to buy electricity generated by the Mojave Solar project, a 250-megawatt solar power plant that will soon break ground in San Bernardino County. Mojave Solar received both a $1.2 billion stimulus-funded loan guarantee (from the same Department of Energy office that gambled away $500 million on Solyndra) and a stimulus-funded investment tax credit that covers 30 percent of the construction costs. Despite benefitting from two generous federal subsidy programs, the PUC staff and the Division of Ratepayer Advocates opposed the project due to its “extremely high cost” relative to other renewable energy projects. Moreover, the PUC itself concluded that, “PG&E has not clearly demonstrated a need for the Mojave Solar PPA.” Nonetheless, the PUC approved the project, despite the fact that it is expensive and unnecessary. The PUC reasoned that since most contracts between renewable energy generators and utilities fall through, the high probability that the Mojave Solar project would be completed made it a worthwhile investment. That’s a low bar for approval.

According to Forbes, Commissioner Mike Florio, the lone dissenting vote, said that “The [contract] unnecessarily saddles ratepayers with extraordinary above-market costs–$1.25 billion” and that “We could probably get almost 500 megawatts of renewable energy for the price we’re paying for this 250 megawatts.”

Around the World

Brian McGraw

It Could Happen Here

The Australian Senate this week passed a contentious carbon tax that will place a price of $23 per ton of carbon by major emitters, going into effect on July 1, 2012.The carbon tax will transform into a country wide cap-and-trade program in 2015. Until then, the price on carbon will be double the roughly AUS$10 that European emitters have to pay per ton of carbon, making Australian manufacturing less competitive worldwide through higher electricity prices. The tax is widely unpopular and the opposition party has promised to repeal it if they regain the majority.

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,



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