News You Can Use
Hedge Fund Wins Big Bet against Solar
In a quarterly newsletter, the hedge fund Greenlight Capital, Inc. announced that it has closed its short position in First Solar, “one of the most profitable shorts in the history” of its funds. Stock prices for First Solar, which received a $1.4 billion stimulus loan from the same program that propped up Solyndra, plummeted primarily because Germany rolled back solar power subsidies.
Inside the Beltway
Obama Punts on Keystone (again)
President Barack Obama on Wednesday, 18th January, announced that he would not approve the Keystone XL pipeline from Alberta’s oil sands to refineries in the Gulf States. A provision in the payroll tax cut extension legislation required the President to make a decision before 21st February based on the national interest. The President’s statement used the deadline to blame Congress for his decision:
“This announcement is not a judgment on the merits of the pipeline, but the arbitrary nature of a deadline that prevented the State Department from gathering the information necessary to approve the project and protect the American people.”
The New York Times was almost alone among major papers in supporting the President’s decision. The Washington Post noted that the President’s own Council on Jobs and Competitiveness had reported the day before that the United States needed to be building more energy infrastructure, including pipelines. Post columnist Robert Samuelson wrote that Obama’s decision was an “act of national insanity.”
The reactions from a number of private sector labor union leaders were also highly negative. On the other hand, environmental pressure groups were ecstatic. The leader of the opposition to Keystone, Bill McKibben, said that the President had made “the brave call” and had proved wrong the criticism that he was too conciliatory.
House Speaker John Boehner (R-Ohio) was one of many House and Senate Republicans who vowed that “this is not the end of the fight.” It is quite possible that the House will include a provision in the second payroll tax cut extension bill that must be enacted before the end of February that would take the decision out of the President’s hands and direct the Federal Energy Regulatory Agency to permit the 1700-mile pipeline.
That is what I urged the House to do in a CEI press release. My comment in the press release on the President’s decision was as follows: “President Barack Obama’s decision to block construction of the Keystone XL Pipeline should make clear to all Americans that when he says over and over again that ‘we can’t wait’ to create jobs and economic growth, it is merely hypocritical political posturing. Contrary to his phony rhetoric, President Obama’s real goals are to reduce energy supplies, raise energy prices for American consumers, and destroy jobs.” Another CEI reaction came from my colleague William Yeatman in this televised debate.
Across the States
Taxpayers in Oregon are on the hook for almost $20 million in bad loans issued by the state Energy Department’s green bank, according to an investigation by the Oregonian. The Small Scale Energy Loan Program started in 1980, primarily to finance relatively minor conservation projects. However, over the last few years, the program shifted to speculative green energy projects, including $18 million to a Clatskanie ethanol plant that quickly went bankrupt and $12.1 million to a Linn County solar company crippled by plunging global prices. Program officers made the program even riskier by allowing borrowers to use other state subsidies for green energy as collateral.
Around the World
E.U. Ignores U.S. Complaints on Airline Climate Tax
This week the European Union responded to a letter sent by U.S. Secretary of State Hillary Clinton at the end of 2011 regarding E.U.’s new policy of forcing international airlines to participate in a cap-and-trade scheme for greenhouse gas emissions. In the letter, Secretary of State Clinton urged the E.U. to exclude international airlines from the program, or else.
Not backing down, the E.U.’s response was effectively: “Or else what?” They did offer to remove the measures if the U.S. came up with a similar domestic cap-and-trade scheme for airline emissions or figured out a path towards global carbon trading for the airline industry. Both of these, obviously, would be non-starters in the current political climate even if they found support in the Obama Administration.
The late 2011 decision by the European Court of Justice cannot be appealed, so increased international pressure or retaliatory measures are the next options. International pressure is currently being applied by the U.S., China, India, and Russia. The United States is currently considering retaliatory measures, with the likely outcome being a similar surcharge placed on E.U. airlines that arrive or depart from U.S. airports.
In 2011, the House of Representatives passed a bill forbidding U.S. airlines from participating in the E.U.’s program. Despite support from the Obama Administration, it is unclear if the legislation will pass the Senate in 2012.
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.