January 2012

Post image for Did Cuba’s Plan to Drill Near Florida Prompt President’s Pivot on Offshore Oil and Gas?

While Republican Party candidates face a political drilling in the Florida primaries, Florida prepares for the offshore drilling by a Spanish company just miles away from its coastline, courtesy of our embargoed neighbor to the South.  Cuba has signed lease agreements for offshore drilling blocks with six nations in the North Cuba Basin, a body of water within the Cuban Exclusive Economic Zone (EEZ) that is believed to harbor at least 4.6 billion barrels of crude oil.  Five of the six companies are owned by foreign countries: India, Venezuela, Malaysia, Vietnam and Angola.  Spanish-based Repsol, the single private company, will drill one exploratory well in the North Cuba Basin, called the Jaguey Prospect, lying about 55 to 60 miles south of Key West, FL.  It owns a 40% share in the newest exploratory well, while India’s Oil and Natural Gas Corp. and Norway’s Statoil each hold a 30% stake.  Repsol has contracted the Italian-owned Scarabeo-9, a mobile offshore drilling unit (MODU), to drill the Jaguey well.

In March 2010, President Obama introduced a plan for drilling to take place 125 miles from Florida’s Gulf coastline. Only weeks later, the President’s offshore drilling proposal was shelved due to the Deepwater Horizon spill. Since then, the administration has been largely hostile to existing deep water drilling offshore in American waters—first, it imposed a de jure moratorium, and, after that, it imposed a de facto moratorium via bureaucratic foot dragging.

In a surprise move, the President seemed to pivot on offshore drilling policy in last Tuesday’s State of the Union Address. Specifically, he announced a plan to open 75 % of potential offshore oil and gas reserves. Details of the plan are still scarce, so we still don’t know what it entails exactly. One must wonder if the President’s wind of change was prompted by the fact that companies from five nations are drilling for oil and gas in such close proximity to Florida.

In The Best-Laid Plans: How Government Planning Harms Your Quality of Life, Your Pocketbook, and Your Future, Randal O’Toole (known as the Antiplanner over on his blog) defends the car against its environmental foes. He lists many benefits, most of which should go without saying unless you’re talking to an environmentalist, including mobility, increased incomes, lower transport costs, social freedom, and even health and safety. He concludes by defending the car against the accusation that it destroys the environment through urban sprawl.

Best Laid Plans was published in 2007

Automobiles are blamed for “wasting” land in the form of urban sprawl. Yet autos actually have produced significant land-use benefits. Consider first the land supposedly wasted by sprawl. According to the U.S. Department of Agriculture, urban land increased from 15 million acres in 1945 (the earliest year for which data are available) to 60 million acres today. During this time, urban populations increased by 160 percent, so if densities had remained the same as in 1945, urban areas would occupy only 39 million acres today. Thus, some 21 million acres of urbanizations might be attributed to postwar automobile-oriented sprawl.

Of course, whether this is waste depends on your point of view. Low-density development brought the American dream of owning a home with a yard to far more people than ever before. Large yards do not destroy open space so much as they convert one form of open space—farms and forests—to another—backyards. From the point of view of watersheds and certain kinds of wildlife, backyards may even be better than intensely managed croplands.

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Post image for What Is “Open” and “Transparent” Obama Administration Hiding on Stream Buffer Rule?

While environmentalists loathe coal in general, they hate especially coal produced via mountaintop removal mining. Unfortunately for them, the mining practice, which is essential to the economies of West Virginia and Kentucky, is sanctioned by state and federal law. In 1977, the Congress enacted the Surface Mining Control and Reclamation Act, legislation that created a regulatory regime for surface mining practices like mountaintop mining.

Now, thirty-five years after the Congress endorsed mountaintop mining, President Barack Obama is poised to radically reinterpret SMCRA—legislation that authorizes mountaintop mining—such that the law would ban it. This contortion of legal logic is an affront to Congressional intent. It has engendered a stern reaction from the majority party on the House Natural Resources Committee, which is threatening to subpoena the White House unless it starts explaining its bizarre reasoning.

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Post image for T. Boone Pickens Promises to “Call Out Special Interests” That Oppose His Special Interest

It’s wholly untrue to claim that President Barack Obama is picking and choosing winners in the energy industry, because this administration seems to only pick losers…

…Like the Pickens Plan. Last week, in the immediate wake of a populist State of the Union address, President Barack Obama threw his weight behind H.R. 1380, the New Alternative Transportation to Give Americans Solutions Act (a.k.a., the NAT GAS Act, a.k.a., “The T. Boone Pickens Earmark Bill,” a.k.a., the “Pickens-Your-Pocket Boondoggle Bill,” a.k.a the “Billionaire’s Bailout.” This legislation was written by billionaire natural gas magnate T. Boone Pickens, in order to compel Americans to use more natural gas, and thereby further pad Pickens’s pockets.

The NATGAS Act would be an unprecedented special interest giveaway. I cannot recall legislation pitched by a billionaire for the benefit of that billionaire. So my jaw hit the floor when I read Pickens’s press release applauding the President’s decision to pick the Pickens Plan, in which “legendary energy executive T. Boone Pickens” says:

“While Washington appears to now understand the issue, make no mistake. I will continue to be outspoken on this subject, and continue to call out the special interests that are working to undermine this bold and important agenda.”

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Post image for Mr. President, You Are Building the Wrong Car

In a May 2007 speech before the Detroit Economic Club, Candidate Obama chastised American automakers for building the wrong cars—while they were building “bigger, faster cars,” “foreign competitors were investing in more fuel-efficient technology.”  He stated that “it’s not enough to only build cars that use less oil—we also have to move away from that dirty dwindling fuel altogether.” He noted that “the transformation of the cars we drive and the fuels we use would be the most ambitious energy project in decades.” He promised “generous tax incentives” and “more tax credits” to make this happen. He believed that the additional costs are “the price we pay as citizens committed to a cause bigger than ourselves.” He claimed to be a leader who could make this happen as he intoned, “Believe me, we can do it if we really try.”

While that speech did not mention the Chevy Volt, or even electric cars, it surely laid out his ideology. For the most part, these are campaign promises he has kept. He has driven Detroit to “move away from that dirty fuel altogether.” He has offered “generous tax incentives” and “more tax credits.” To see “the most ambitious energy project in decades” become a reality his administration has handed out loans to virtually every strata in the electric car’s foundation.

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In Gridlock: Why We’re Stuck in Traffic and What to Do About It, Randal O’Toole (known as the Antiplanner over on his blog) describes how government funds are wasted on public transportation projects built in the environment’s name.

Gridlock was published in 2009

Instead of efficiently serving the public by providing cost-effective transportation for those who cannot or do not want to drive, transit agencies have developed insatiable demands for more tax revenues. Is there an economic boom leading to higher ridership? Then transit agencies demand higher taxes to accommodate the new riders. Is there a recession reducing the tax revenues that support transit? Then transit agencies demand a larger share of taxes to make up the difference. Does a rise in gas prices lead to record ridership? Then transit agencies need more taxes because they too must pay higher fuel prices.

Transit systems that depend on taxes to cover three-fourths of their costs are not sustainable. Ironically, transit only seems to work at all because hardly anyone uses it. To operate transit systems carrying a much higher fraction of personal travel would bankrupt the nation.

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Post image for Why Is Rep. Markey Spurning American Manufacturing Jobs?

President Obama has vowed to double U.S. exports by 2014. Speaking last year about trade agreements last year, he said, “they’re powerful examples of how we can rebuild an economy that’s focused on what our country has always done best – making and selling products all over the world that are stamped with three proud words: ‘Made in America.’”

Yet some Democrats haven’t gotten the message. Thirty-three Democrats led by Rep. Ed Markey (D-Mass.) are arguing certain American energy companies should be prohibited from selling abroad. In a letter to Secretary of State Hillary Clinton, the coalition writes, “We write to urge the State Department, as part of its national interest determination for the Keystone XL pipeline, to ensure that any oil or refined petroleum products obtained from the pipeline remain available for sale within the United States.”

But—as normally goes without saying—American exports are good. Wealth created through sales to foreigners increases wages and jobs in the United States. Last year, for the first time ever, energy became America’s top export. In 2001, fuel wasn’t even in the top twenty-five U.S. exports, but new technologies created in the U.S. have revolutionized drilling, and new oil and gas fields discovered in North Dakota, Pennsylvania, and elsewhere have helped shoot the industry to the top of the charts.

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Post image for EPA’s Big Mercury Lie Already Killing Jobs

Recently, I blogged about EPA’s big mercury lie. In a nutshell, the Agency claims that its ultra-expensive new Mercury and Air Toxics rule is appropriate and necessary in order to protect fetuses from developmental disorders. Yet, according to EPA’s own analysis, the new mercury regulation serves to protect America’s supposed population of pregnant, subsistence fisherwomen, who eat 300 pounds of self-caught fish reeled in exclusively from the most polluted bodies of water. To put it another way, this regulation, which costs $10 billion annually, safeguards a population that doesn’t exist.

Already, this ridiculous regulation is killing jobs. Ohio-based FirstEnergy Corp. last Thursday announced that it would retire six coal-fired power plants in Ohio, Pennsylvania and Maryland, in order to comply with the Environmental Protection Agency’s new Mercury and Air Toxics Standards rule. According to the company, 530 employees will be affected. While FirstEnergy stressed that some workers would be relocated, it is certain that many will lose their jobs.

In the proposed Mercury and Air Toxics rule, EPA has the gumption to claim that the regulation would be a net job creator (see 76 FR 25076). EPA acknowledges that the mercury rule would eliminate jobs at coal-fired power plants, but the Agency believes that more jobs would be created in the emissions control industry. In light of the purposelessness of the Mercury and Air Toxics rule, EPA’s claim that the regulation is a job creator is like saying that it is good economic policy to blow open a hole in the earth with dynamite and then pay people to fill it back in.

Post image for President Obama Wants to Help the Little Guys—Especially If They’re Named Boone Pickens and George Soros

President Barack Obama spoke up for the economic interests of the little guy in his State of the Union speech to Congress on January 24th.  On January 26th, the President spoke in Las Vegas about using taxpayer dollars to improve the economic well-being on one of those little guys in particular—Texas billionaire T. Boone Pickens.  He urged voters to support the Pickens Payoff Plan (officially titled the NAT GAS Act), a bipartisan bill sponsored in the Senate by Majority Leader Harry Reid of Nevada and in the House by Representative John Sullivan (R-Okla.).

The bill, H. R. 1380 in the House and S. 1863 in the Senate, would provide huge new subsidies to buyers and users of heavy duty trucks that use natural gas.  Pickens owns Clean Energy Fuels, which builds and runs natural gas service stations.  He also has major investments in a number of companies in the natural gas industry.  The value of these investments would probably increase by several billion dollars if the bill were enacted.

However, Pickens has been clear that he has spent $100 million “of his own money” to promote the Pickens Your Pocket legislation only out of love for his country.  “I’m sure not doing this for the money,” he told the New York Times last May.

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Post image for Perfect Timing, President Obama!

President Obama’s record proves that he understands how to use time effectively, solely to his advantage.  His craft of circumventing issues of critical national interest is an art form, and his State of the Union address is no exception.  “This country needs an all-out, all-of-the-above strategy that develops every available source of American energy, a strategy that’s cleaner, cheaper and full of new jobs.”  His hypocritical declaration was salt to the fresh wound inflicted by his dismissal of the $7 billion privately funded TransCanada Keystone XL Pipeline just prior to the SOTU.

The following day, it became clear at the Subcommittee on Energy and Power hearing on Rep. Lee Terry’s (R-NE) The North American Energy Access Act (H.R. 3548), that political “timing” was the basis for Obama’s pipeline rejection.  Kerri-Ann Jones, the Bureau of Oceans and International Environment Assistant Secretary of the State Department, was the witness who vouched for the State Dept’s recommendation that Obama kill the pipeline.  She said that the merit of the project did not cause the second rejection; it was the lack of time given to finish the reviewing process of a new route.  According to Jones, it normally takes 18-24 months to vet a project of this size; the KXL Pipeline, however, has now been under review for a total 40 months.

Solyndra, which disposed of $535 million of tax payer money, is the poster child of Obama’s hypocritical devotion to due diligence.  Before rushing Solyndra’s subsidy out the door, Obama’s DOE blatantly ignored countless red flags regarding the viability of their first green energy flagship of government funding.   When Solyndra went belly-up, laying off more than 1,100 workers, the Obama administration wanted to get the timing right.  Emails from the Argonaut Private Equity, an investment firm owned by Solyndra’s largest investor and Obama campaign donor George Kaiser, indicate that the DOE asked Solyndra to postpone the announcement of job layoffs until after the 2010 midterm elections.  How convenient.

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