Between the time this is written and the time you read it, gas prices will have undoubtedly risen again. They have been on an upward spiral for months and not likely to drop long term without some bold, decisive action as was taken on July 14, 2008. Instead of encouraging the development of our own natural resources, politicians of both parties are once again betting that we will not notice if they play the antibusiness card—but 2011 is not a year for politics as usual and the rules have changed. This is no longer a back-room game. It is the poker channel. People are watching.
With their cards close to the vest, Max Baucus (D-Mont.) and Harry Reid (D-Nev.) are bluffing. They want America’s citizens to believe their hand is filled with spending cuts—cut subsidies from big oil companies. Somehow we are supposed to think this will lower gas prices?
Part of their bluff is to use the term “subsidy”—which in the house-of-cards economy/debt crisis they’ve built translates to spending. Concerned Americans do not want more spending, they want cuts. We’ve anted up all we can. Politicians are betting we’ll fall for the deception.
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Republicans in the New Hampshire Senate continue to dither like a eunuch in a brothel lobby, more than two months after the State House of Representatives enacted HB 519, legislation that would withdraw New Hampshire from a regional energy-rationing scheme known as the Regional Greenhouse Gas Initiative, by a 246 to 104 vote. In late February, after the Republican-controlled House acted, it was widely thought that the Senate would quickly follow suit, as Republicans hold a 2 to 1 majority in the upper chamber. However, the environmentalist lobby mobilized and frightened many Members of the Legislature. Last week, the Senate Natural Resources Committee voted against HB 519 companion legislation. Nonetheless, the full Senate is expected to enact the measure this week, although it is unclear that there will be enough votes to override a promised veto from Governor John Lynch (D), even though Republicans have a veto-proof majority.
Corn Ethanol: Who Pays and Who Benefits?
Ken Glozer, MasterResource.org, 9 May 2011
Losing Indicators
Lawrence Solomon, National Post, 9 May 2011
Death of Climate Nut Osama To Revive Obama Climate Agenda?
Chris Horner, AmSpecBlog, 5 May 2011
April Auto Sales and Washington’s Fuelish Failure
Henry Payne, Planet Gore, 5 May 2011
Obama’s Anti-Energy Policies Are Bankrupting America
Rob Bluey, The Foundry, 5 May 2011
Alarmists Offer a Perfect Global Warming Challenge
James Taylor, Forbes, 4 May 2011
For years, I’ve been arguing that a multilateral response to global warming is a pipe dream. According to the International Energy Agency, the “solution” to this supposed problem would cost $45 trillion through 2050. Yet there is ZERO historical precedent for burden sharing of this magnitude, short of war, and the specter of warmer winters simply doesn’t engender the sort of desperate international cooperation as does a threat like the Nazis. (See here, here, here, and here for my take on the fecklessness of climate diplomacy)
So it was with no surprise that I saw this Reuters headline last Friday: Rich Nations Miss Climate Finance Deadline.
By way of background, the December 2009 United Nations Copenhagen Climate Conference was supposed to have been the deadline for a legally binding, multilateral treaty to reduce global greenhouse gas emissions. Of course, the Conference was a complete and total bust, for the reason explained above. Instead of a concrete pledge, the Copenhagen Conference ended with nations agreeing to commit $100 billion to a global warming adaptation fund for poor countries. The deadline for contributions was May 1, 2011. Only two countries, Russia and the Ukraine, bothered to acknowledge the deadline, and they did so by sending a letter to the United Nations Framework Convention on Climate Change, informing it that they would not be donating any money.
In response to my criticism of conservative Members of Congress for supporting H. R. 1380, which I have nicknamed the T. Boone Pickens Earmark Bill, some conservatives (in which broad category I include libertarians and advocates of free markets) have defended tax credits, even those that benefit only narrow interests. They do, after all, reduce some people’s taxes, and reducing taxes is a good thing. Some even go further and define ending tax credits as raising taxes. Some anti-tax groups thus demand that elimination of any tax credits be matched with tax cuts somewhere else.
The conservatives who make these arguments do so because they have unknowingly accepted the world view of the left. They have forgotten that the Constitution was designed to maintain a nation of citizens rather than to create a government with subjects. They ignore the essential role that the equal protection of the laws fulfils in maintaining the rights of citizens against the encroachments of government.
Tax credits (also known as “tax expenditures”) for buying or producing certain goods and services rather than other goods and services are a species of wealth re-distribution. Tax credits are a particularly obnoxious type of wealth re-distribution because the re-distribution generally flows from the politically less powerful to the politically more powerful.
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On Thursday, the Water Resources and Environment Subcommittee of the House Transportation Committee held a hearing on “Environmental Protection Agency Mining Policies: Assault on Appalachia.” Video and written testimony are available here. For detailed descriptions of the EPA’s outrageous war on Appalachian coal production, click here, here, or here. Suffice it to say, EPA has subverted the Administrative Procedures Act to enact a de facto moratorium on mining. It engineered a new Clean Water Act “pollutant,” saline effluent, which the EPA claims degrades water quality downstream from mines by harming a short lived insect that isn’t an endangered species. The hearing yesterday was part 1; next Wednesday, the subcommittee is scheduled to hear from EPA administrator Lisa Jackson.
It was a bipartisan bashing. The only Democrat to show up was Ranking Member Rep. Nick Rahall (WV), whose opposition to the EPA exceeds that of Republicans, due to the fact that his State is the largest coal producer in Appalachia, and is, therefore, harmed most.
For the “Part 1” hearing on Thursday, the primary topic was the EPA’s procedural shenanigans. For part two next week, with Administrator Lisa Jackson, I very much hope they address the EPA’s shoddy science on the ecological impact of mountaintop mining.
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Until today, my favorite critics of hybrid cars were pundits. In particular, I like The Detroit News’s Henry Payne, who posts frequently about the futility of government trying to incent Americans to buy cars that they don’t want to buy (see here or here), and I also like the Washington Post’s Charles Lane, who argues that tax credits for hybrids are regressive, in that they are paid for by all Americans, but are enjoyed only by the upper middle class, for whom a Prius is a green badge of honor (see here or here).
While I still enjoy the work of Payne and Lane, wrestling superstar Dwayne Johnson, a.k.a. “The Rock” or “The People’s Champion,” is now my favorite critic of hybrids, due to his wonderfully offensive response when a reporter asked him for his thoughts about the Toyota Prius.
“You can drive a Prius, sure,” Mr. Johnson told FOX411’s Pop Tarts column. “But you should also grow testicles before that.”
For the record, The Rock drives a black Ford F150. God bless The People’s Champion
Republicans in the House of Representatives are flocking to support a bill to extend and create a number of taxpayer-funded subsidies for manufacturers and buyers of vehicles powered by natural gas. Nearly eighty House Republicans (and a hundred Democrats) have signed up as sponsors of H. R. 1380, the New Alternative Transportation to Give Americans Solutions Act (or NAT GAS Act). Just call it the T. Boone Pickens Earmark Bill.
Many conservative Republicans in the House, particularly a number of new Members with Tea Party connections, have sworn that the fiscal and economic crisis confronting America requires a radical change in federal policies. Out-of-control spending must be stopped; spending earmarks must be abolished; crony capitalists on the prowl for corporate welfare must be sent packing; subsidies for special interests must be abolished; government must stop interfering in the economy and let free markets work.
That big talk doesn’t seem to apply when the spending is being earmarked for a crony capitalist who is one of the biggest contributors to Republican candidates in history–billionaire T. Boone Pickens. Apparently, some subsidies are good if they benefit the right special interests. And government interference in the economy is wonderful if it is done in the name of reducing oil imports.
H. R. 1380 would extend the tax credit of 50 cents per gallon of liquid natural gas (or its equivalent of compressed natural gas) when used for fueling vehicles and provide purchasers of natural gas vehicles with credits ranging from $7,500 to $64,000. The lower end is for passenger cars and the upper end for big trucks. There are also credits for natural gas vehicle manufacturers and for installing natural gas fueling stations.
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Last Friday, April 29th, a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit dismissed a challenge to EPA’s “California waiver”. That waiver permitted California to set its own greenhouse-gas emissions for new vehicles. Because CO2 was the major gas that California was seeking to control, its rules amounted to a new, more stringent automotive fuel-economy standard. And because at least 14 other states had adopted California’s standard, its actions may well have effectively replaced the federal CAFE standard with a higher one set in Sacramento.
The California waiver has a complicated history. CARB (the California Air Resources Board) originally filed its waiver request with EPA in late 2005, claiming that the state had a uniquely compelling need to control atmospheric CO2 levels. (The fact that the alleged problem at issue is global warming, not California warming, apparently didn’t faze CARB.) After deliberating for more than two years, EPA denied CARB’s request, finding that it hadn’t demonstrated any extraordinary conditions to justify the waiver.
But in January 2009, one day after President Obama was sworn in, CARB resubmitted its request, and EPA granted the waiver several months later. Then, in April 2010, the Administration, California and the auto industry struck a deal which imposed a higher set of federal fuel economy standards through model year 2016. During that time, California agreed to merge its own newly-approved standards into the federal program, giving the auto industry the national uniformity in standards that it dearly wanted.
As part of the deal, the automakers agreed not to litigate the California waiver. The Chamber of Commerce and NADA (the National Auto Dealers Association), however, filed their own lawsuit, and it was this case that the D.C. Circuit dismissed last week. The court did not reach the merits of the case, ruling instead that neither party had standing to bring the action because they had not shown injury to their members.
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With the current partisan fighting over oil subsidies (and energy policy more generally), its worthwhile to look at energy legislation that has found bipartisan support: the New Alternative Transportation to Give Americans Solutions Act of 2011 (the NAT GAS Act, often called the Boone Pickens bill). It currently has 180 cosponsors, split roughly even between Republicans and Democrats. Joe Nocera likes it.
True fiscal/small government conservatives understand the danger of using the tax code to steer the economy. It has brought us ethanol, subsidized home ownership for the wealthy, etc. Populist conservatives-in-name-only don’t actually care about applying consistent principles, or often let their concern be overshadowed by campaign donations.
Which is why I was surprised to see Representative Ron Paul, principled libertarian/free-market extraordinaire, as a cosponsor. I spoke to someone in Ron Paul’s office, and they explained (roughly) that support for tax credits (i.e., industries paying less in income tax relative to the status quo) is consistent with Ron Paul’s support for lower taxes.
This YouTube clip seems to explain Paul’s position (he was asked about a bill to end tax credits for the oil industry):
PAUL: Well, how do you define a subsidy? I don’t consider any tax break as a subsidy. That was not a spending bill, that was not a grant.
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I never vote to increase any taxes. I vote to always give tax credits, and I always cut spending. I’ve never voted for a real spending bill, so, I don’t think that is in the category of something I’d consider a spending bill.
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