December 2011

Post image for Cooler Heads Digest 30 December 2011

In the News

Obamacar for the 1 Percent
Henry Payne, Planet Gore, 30 December 2011

Should We Fear the Methane Time Bomb?
Marlo Lewis,, 29 December 2011

Bring on 2012!
Robert Bradley, Master Resource, 29 December 2011

Why “Beyond Petroleum” Gave up on Solar
Paul Chesser, National Legal and Policy Center, 28 December 2011

Don’t Miss the Energy “Technolution”
Kirk Spano, Market Watch, 28 December 2011

The Circular Logic of Energy Independence
Jonathan Thompson, High Country News, 27 December 2011

Dingell’s Volt Goof
Dan Calabrese, The Michigan View, 26 December 2011

News You Can Use

Chevy Volt Subsidy up to $250,000 Per Car

Marlo Lewis

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Post image for Should We Fear the Methane Time Bomb?

A favorite doomsday scenario of the anti-carbon crusade hypothesizes that global warming, by melting frozen Arctic soils on land and the seafloor, will release billions of tons of carbon locked up for thousands of years in permafrost. Climate havoc ensues: The newly exposed carbon oxidizes and becomes carbon dioxide (CO2), further enhancing the greenhouse effect. Worse, some of the organic carbon decomposes into methane, which, molecule for molecule, packs 21 times the global warming punch of CO2 over a 100-year time span and more than 100 times the CO2-warming effect over a 20-year period.

The fear, in short, is that mankind is fast approaching a “tipping point” whereby outgassing CO2 and methane cause more warming, which melts more permafrost, which releases even more CO2 and methane, which pushes global temperatures up to catastrophic levels.

In a popular Youtube video, scientists flare outgassing methane from a frozen pond in Fairbanks, Alaska. A photo of the pond, with methane bubbling up through holes in the ice, appears in the marquee for this post. Are we approaching the End of Days?

New York Times science blogger Andrew Revkin ain’t buying it (“Methane Time Bomb in Arctic Seas – Apocalyplse Not,” 14 Dec. 2011), nor does his colleague, science reporter Justin Gillis (“Artic Methane: Is Catastrophe Imminent?” 20 Dec. 2011).

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Randal O’Toole used to be a mainstream environmentalist until he saw how government operated. In Gridlock: Why We’re Stuck in Traffic and What to Do About It, O’Toole (known as the Antiplanner over on his blog) describes how “behavioral” solutions to environmental problems fail, and why technical solutions that get the government out of people’s behavioral choices is the way to go.

Gridlock was published in 2009

When I went to college at Oregon State University, Ralph Nader came to Oregon and inspired students to form the Oregon Student Public Interest Research Group to do research on social and environmental issues. In the summer of 1972, I was one of the group’s first student interns, and I worked on air pollution issues….

Because of traffic congestion, Portland’s worst pollution was downtown. So I proposed that Portland’s three-year-old transit agency, TriMet, contract with churches on the city’s periphery to use their parking lots as weekday park-and-ride stations. This would allow commuters to leave their cars well outside of downtown.

Once downtown, people still might need to get around, so I proposed that Trimet create a demand-responsive jitney bus system. Signal boxes on every street corner would allow people to call a bus. The nearest bus would pick them up and, after picking up or dropping off other people, drop them off at their downtown destination. The hardware and software for such a system was commercially available but had never been used in the U.S.

Portland’s traffic engineer had a very different solution to the city’s air pollution problems. Cars pollute the most at low speeds, he pointed out. So his idea was to install a traffic signal coordination system on downtown at faster speeds. According to his department’s calculations, this program, combined with the EPA’s stricter air pollution controls on new cars, would bring the city in compliance of EPA’s pollution standards by 1980. I worried speeding up downtown traffic would simply bring in more traffic, which would offset the clean-air benefits of higher speeds. But the city adopted the traffic engineer’s plan….

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Two nights ago, I was invited to speak on Fox Business Channel’s Cavuto show, about renewable energy subsidies. To find out whether I am for or against taxpayer handouts to politically favored industries, watch the video below.

Post image for Update on Fight against EPA’s Regional Haze Power Grab

I’ve spent much of the last five months following (and fighting) the Environmental Protection Agency’s power grab on visibility policy. As I explain here, EPA is hybridizing disparate provisions of the Clean Air Act in order to engineer greater regulatory authority for itself. The Agency is using this trumped up authority to run roughshod over state decision making on policy to improve visibility.

At issue is a provision amended to the Clean Air Act in 1977, known as Regional Haze, that requires measures to improve vistas at federal National Parks and Wilderness Areas. A hallmark of the program is state primacy over EPA. The Congressional Record for the 1977 Clean Air Act amendments explains that the House of Representatives and Senate passed markedly different Regional Haze provisions. The House’s version gave EPA primacy; the Senate version made states the lead decision-makers. The Conference Committee, whose duty it is to reconcile the differences between the bills passed by the two chambers of Congress, adopted the Senate language. In the seminal case American Corn Growers v. EPA, a federal court remanded EPA’s proposed Regional Haze rule, because it insufficiently accorded states the lead role in policymaking to improve visibility. EPA’s own rules recognize the Agency’s secondary role. According to the preamble of EPA’s 2005 Regional Haze Guidelines, “…the [Clean Air] Act and legislative history indicate that Congress evinced a special concern with ensuring that States would be the decision makers (70 FR 39137).”

The legal and regulatory record is clear: States get to make visibility policy.

Fast forward to January 2009: President Barack Obama takes office, and launches a war on coal. On the supply-side, the administration moves to end surface coal mining in Appalachia. On the demand side, the administration is trying to force every existing coal fired power plant to install the most expensive controls—namely “selective catalytic reduction” systems for nitrogen oxides,  “scrubbers” for sulfur dioxide, and electrostatic filters for particulate matter—regardless whether these retrofits are warranted. For the average 500 megawatt coal fired power plant, costs of these controls range anywhere from $400 o $600 million. Presumably, EPA’s idea is to raise the price of generating electricity with coal, and thereby “bankrupt” the industry, to borrow a term turned by the President.

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Post image for EPA Sets 2012 Biofuel Requirements

Yesterday the EPA finalized the 2012 mandate for blending biofuels into our nation’s transportation fuel supply:

The U.S. Environmental Protection Agency (EPA) today finalized the 2012 percentage standards for four fuel categories that are part of the agency’s Renewable Fuel Standard program (RFS2). EPA continues to support greater use of renewable fuels within the transportation sector every year through the RFS2 program, which encourages innovation, strengthens American energy security, and decreases greenhouse gas pollution.

The Energy Independence and Security Act of 2007 (EISA) established the RFS2 program and the annual renewable fuel volume targets, which steadily increase to an overall level of 36 billion gallons in 2022. To achieve these volumes, EPA calculates a percentage-based standard for the following year. Based on the standard, each refiner and importer determines the minimum volume of renewable fuel that it must ensure is used in its transportation fuel.

The final 2012 overall volumes and standards are:

Biomass-based diesel (1.0 billion gallons; 0.91 percent)
Advanced biofuels (2.0 billion gallons; 1.21 percent)
Cellulosic biofuels (8.65 million gallons; 0.006 percent)
Total renewable fuels (15.2 billion gallons; 9.23 percent)

In a nod to how hard it is to predict the future, the EPA has lowered the cellulosic biofuel mandate from 500 billion gallons to a less ambitious 8.65 million gallons, which is 1.7% of the original planned requirement. Of course, they have done the same in previous years and as of October no qualifying cellulosic ethanol had been sold to refiners. Naturally, refiners are not pleased that in 2012 they will possibly be spending up to $8 million in credits depending upon actual production levels of cellulosic ethanol:

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Many people today believe that environmental conditions are worsening. In The Improving State of the World, Indur Goklany thoroughly refutes this idea. Nonetheless, environmentalists continue to perpetuate the view that increased wealth and prosperity mean a poorer environment, but as this excerpt from Goklany’s work shows, this is not the case.

The Improving State of the World was published in 2007

Clearly, technological change is one key to continued improvement in environmental and human well-being. At least two ingredients are necessary to bring about technological change. First, better technology must be brought into existence. With greater wealth, expenditures on research and development increase. Therefore, the likelihood of developing new or improved technology should rise with wealth, which helps maintain and enhance human capital. This, in turn, not only further enhances the possibility of devising better technologies but it also propagates knowledge about the existence and operation of existing and new technologies, which is a key element for the diffusion of technology.

But there is more to technological change than creating technology or being aware of its existence. Although poor countries (and their farmers) are cognizant of technologies that would improve agricultural productivity, they are unable to capitalize on that information, despite that many such technologies, for example, fertilizer and crop protection measures, are quite mundane. Thus, their agricultural yields are substantially lower as are their food supplies. As a result, hunger and malnourishment are higher, and pressures for deforestation are greater. Similarly, notwithstanding that nowadays authorities in even the poorest countries know how to extend access to safe water and sanitation to 100 percent of the population, they lack the wherewithal to do so. Consequently, 1.1 billion people worldwide still lack access to safe water and 2.4 billion to adequate sanitation, virtually all in the poorer countries.

The missing ingredient, of course, is wealth, without which not only it harder to invent, develop, perfect, and use new technologies, but even old technologies are often unaffordable. Greater wealth increases the likelihood of acquiring, operating, and maintaining new as well as existing technologies. That is, wealth not only helps create technology and conditions favorable for its diffusion but wealth also ensures that technology is, in fact, used to make technological change a reality. It is hardly surprising that in previous chapters, we saw repeatedly that virtually every indicator of human well-being or environmental impact sooner or later improves with wealth. Hence, wealth increases cereal yields, which helps reduce rates of deforestation. It boosts the ability to install air pollution controls and to substitute cleaner fuels for dirty ones. Wealth also increases access to safe water and sanitation, which then reduce mortality due to water-related diseases.

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Post image for Global Government: The Third Ring in the Climate Change Circus

During his 2008 campaign, President Obama made his support of climate-change interventions clear, stating that his presidency would slow the rise of the oceans and begin to heal the planet. He promised that a cap-and-trade system would curb global warming.

He was elected, but the electorate hasn’t liked many of his policies. Cap and trade never passed Congress. To this day, President Obama has remained comparatively popular, but people believe he is taking the country in the wrong direction—toward a European system. Even his Secretary of Energy, Steven Chu, believes our gasoline prices should be higher, like Europe’s.

Two weeks ago, my column addressed China’s act (ring #1) in the climate-change circus. Last week, I looked at Europe’s staunch support for climate-change intervention when the majority of the industrialized countries have rejected or resisted a Kyoto-style deal (ring #2). Using Italy as an example, I suggested that the country’s lack of natural resources made expensive renewable energy a viable option for them—though an economic tightrope destined to failure.

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Even the liberal Washington Post, which hasn’t endorsed a Republican for President since 1952, seems to be souring on the Obama Administration’s failed energy programs, saying they were “infused with politics at every level.” As it noted in discussing the Solyndra scandal: “Obama’s green-technology program was infused with politics at every level, The Washington Post found in an analysis of thousands of memos, company records and internal ­e-mails. Political considerations were raised repeatedly by company investors, Energy Department bureaucrats and White House officials. The records, some previously unreported, show that when warned that financial disaster might lie ahead, the administration remained steadfast in its support for Solyndra,” which was owned by major Obama backers, like George Kaiser.

As law professor Glenn Harlan Reynolds notes, “all the ‘stimulus’ and ‘green energy’ stuff was never anything but a program to put taxpayer money into the hands of cronies and supporters.”

The Obama Administration hastily approved the  taxpayer subsidies for Solyndra despite obvious danger signs and warnings from accountants about the company’s likely collapse, the misgivings of agency officials, and the company’s mismanagement and lousy-quality products. (Solyndra executives are now pleading the 5th Amendment to avoid disclosing incriminating information.) The Obama administration was determined to shovel taxpayer money to its cronies as fast as it could. As an Obama fundraiser and Solyndra stakeholder exulted,  “there’s never been more money shoved out of the government’s door in world history and probably never will be again than in the last few months and the next 18 months. And our selfish parochial goal is to get as much of it . . . as we possibly can.”  “At the time Solyndra received its grant, Vice President Joe Biden declared that the Solyndra investment is ‘exactly what the [the stimulus package] is all about.’”

While diverting taxpayer money away from productive and efficient businesses to corporate-welfare recipients controlled by political cronies, the Obama Administration is busy wiping out jobs through thousands of pages of counterproductive regulations.  Some of these new regulations are designed to spawn lawsuits that will enrich trial lawyers at businesses’  and consumers’ expense.

Obama appointees at the EEOC are busy harassing businesses that hire and fire based on merit, thus discouraging employers from hiring or expanding operations, and the EEOC is bringing costly, unjustified lawsuits against businesses.  The 2010 healthcare law imposes financial burdens — some of them large, and others difficult to calculate — on the nation’s employers, resulting in some business owners deciding not to expand or hire new employees.

Many businesses are also suffering from the effects of the Dodd-Frank financial “reform” law, a 2,315 page monstrosity that makes it harder for small businesses to obtain credit, and also outsources and wipes out jobs in the financial sector. Even one-time Obama supporters in the business community have grown disenchanted: Democratic businessman Steve Wynn called Obama“the greatest wet blanket to business and progress and job creation in my lifetime,” saying that “the business community in this country is frightened to death of the weird political philosophy of the President of the United States. And until he’s gone, everybody’s going to be sitting on their thumbs.”

The Obama administration has sought to temporarily pump up the economy with stimulus spending paid for with massive deficits, but as the Congressional Budget Office has noted, the stimulus package will actually shrink the economy in the long run, so it will not be able to offset the economic drag resulting from all of the Obama administration’s new regulations and red tape.

Post image for Each Chevy Volt Sold Costs Taxpayers Up to $250K, Mackinac Analyst Estimates

James Hohman of Michigan’s Mackinac Center for Public Policy estimates that state and federal incentives for GM’s plug-in hybrid vehicle, the Chevy Volt, total $3 billion. That works out to between $50,000 and $250,000 in taxpayer support for each of 6,000 Volts sold so far, “depending on how many of the subsidy milestones are realized.”

The per vehicle subsidy cost is bound to decrease as more Volts are sold and as current subsidies expire.

Nonetheless, as GM acknowledges, the typical Volt purchaser earns $170,000 a year, so it’s hard to avoid the conclusion that the Volt program is a reverse-Robin Hood wealth tranfer from middle-income households to GM, other big corporations, and high-income auto buyers.

Hohman’s analysis appears below in full. [click to continue…]