September 2012

Post image for Polling Purple, Spinning Green

Polling these days is often a form a spin. Pollsters artfully phrase and sequence questions to elicit the answers the sponsor is paying for. The sponsor then uses the answers to influence the voter attitudes he pretends the poll merely reflects. The sponsor bets that more voters will support his agenda if they believe (however mistakenly) that most of their neighbors do too. It’s the old self-fulfilling prophesy trick.

Especially during the silly season, some organizations spend lots of cash trying to manufacture the appearance that their preferred candidate has already won. Their operative premise is that you can fool most of the people most of the time — or at least hoodwink enough people in swing (purple) states to make a difference at the ballot box.

What prompts this reflection is an article in today’s Greenwire about an opinion survey of swing state voters conducted by Public Policy Polling for the Natural Resources Defense Council (NRDC). The poll allegedly finds that voters in eight swing states prefer by 57% to 32% a presidential candidate who supports EPA regulation of mercury emissions from coal-fired power plants. That candidate, of course, is Barack Obama.

As discussed in previous posts on voter surveys conducted by Public Policy Polling, the trick is to frame the question so that most respondents give the sponsor’s preferred answer. Here’s the question as described in Greenwire:

Without specifying Obama’s or Romney’s position, the telephone survey asked voters: “One candidate for president supports EPA standards to reduce toxic mercury pollution from power plants; the other candidate says these limits would be bad for business and EPA should not reduce mercury pollution. Would you be more likely to vote for a candidate who supports EPA standards to reduce toxic mercury pollution or one who opposes them?”

In essence, do you want more or less “toxic mercury pollution” in the environment? Unless you happen to be a “toxic mercury polluter,” you are more likely to respond that you are “more likely” to vote for the guy who wants to reduce “toxic mercury pollution.” This framing abstracts from all the scientific, technical, and economic information that a presidential candidate would need to make a rational choice in the public interest

By the EPA’s own reckoning, the costs of the mercury reductions required by the agency’s Utility MACT Rule exceed the quantifiable health benefits by a ratio of 1,600 to one or even 19,200 to one. And in the 22 years since Congress tasked the EPA to study the health risks of mercury, the agency has not identified a single child whose learning or other disabilities can be traced to power-plant mercury emissions. 

Include those facts in the question along with the statement that the EPA policy would be “bad for business,” and the results would undoubtedly be very different from those NRDC is touting to the media.

On September 21, the Cooler Heads Coalition hosted a Capitol Hill briefing on “The Costs and Benefits of Green Jobs,” featuring Diana Furchtgott-Roth, Senior Fellow at the Manhattan Institute and author of a new book, Regulating to Disaster: How Green Jobs Policies Are Damaging America’s Economy.

Video of the briefing is below.

The Costs and Benefits of Green Jobs from CEI Video on Vimeo.


Post image for Cloud Computing and Kyotoism: An Update

Wouldn’t you know it, the day after I review Mark Mills’s analyses (in 1999 and 2011) of the digital economy as a key driver of demand growth for coal-fired electric power, I receive an EnergyFactsWeekly in my email box featuring new analysis by Mills on that very topic. It also contains links to two other related commentaries by Mills.

In The Efficiency Wall and the Future of the Internet’s Energy Cost, Mills reports that “the historic gains in computing energy efficiency started slowing down in 2005” due to the “inherent physics” of existing chip technology. During the same period, however, “the growth in global traffic on the Internet has continued rising at the same old staggering exponential rate.” The upshot? “This combination arithmetically guarantees a higher growth rate now in the total energy consumed by the Internet.”


Computing efficiency gains are rapidly approaching an “asymptotic wall” much as the power of jet engines and cruise speed of jet aircraft did in 1960.   

Jet engine power (measured in terms of the critical aviation metric, power per unit of weight) rose exponentially for the 20 years after invention, then hit a wall dictated by the inherent physics of the engines and materials. Consequently, the average cruise speed of jet aircraft also hit a wall.

“But,” notes Mills, “there is a critical difference between aviation and digital traffic: the former rises linearly with population and wealth, while the latter grows exponentially as new applications continue to explode for Big Data.”

New materials and technologies are improving the energy efficiency of computing, but, says Mills, not enough to halt the growth in aggregate demand. He concludes with two predictions and a policy recommendation:

  • Digital energy consumption will rise, locked into the physics of supply and economics of demand, and
  • Energy costs will be increasingly dominated by factors external to the Internet, especially the cost of electricity. Cheap power will matter even more in the future.

We return to a familiar refrain? Dig more coal. [click to continue…]

Post image for Cloud Computing: Friend or Foe of Kyotoism?

As I sit here typing away, Amazon.Com’s Cloud Player serves up 320 tunes I’ve purchased over the past year and a half. I can play them anywhere, any time, on any computer with Internet access. I don’t have to lug around my laptop or even a flash drive. What’s not to like?

Our greener friends worry about all the power consumed by the data centers that deliver computer services over the Internet. Think of all the emissions!

A year-long New York Times investigation summarized in Saturday’s (Sep. 22) edition (“Pollution, Power, and the Internet“) spotlights the explosive growth of the data storage facilities supporting our PCs, cell phones, and iPods — and the associated surge in energy demand. According to The Times:

  • In early 2006, Facebook had 10 million or so users and one main server site. “Today, the information generated by nearly one billion people requires outsize versions of these facilities, called data centers, with rows and rows of servers spread over hundreds of thousands of square feet, and all with industrial cooling systems.”
  • “They [Facebook’s servers] are a mere fraction of the tens of thousands of data centers that now exist to support the overall explosion of digital information. Stupendous amounts of data are set in motion each day as, with an innocuous click or tap, people download movies on iTunes, check credit card balances through Visa’s Web site, send Yahoo e-mail with files attached, buy products on Amazon, post on Twitter or read newspapers online.”
  • “To support all that digital activity, there are now more than three million data centers of widely varying sizes worldwide, according to figures from the International Data Corporation.”
  • “Worldwide, the digital warehouses use about 30 billion watts of electricity, roughly equivalent to the output of 30 nuclear power plants, according to estimates industry experts compiled for The Times. Data centers in the United States account for one-quarter to one-third of that load, the estimates show.”
  • “Jeremy Burton, an expert in data storage, said that when he worked at a computer technology company 10 years ago, the most data-intensive customer he dealt with had about 50,000 gigabytes in its entire database. (Data storage is measured in bytes. The letter N, for example, takes 1 byte to store. A gigabyte is a billion bytes of information.)”
  • “Today, roughly a million gigabytes are processed and stored in a data center during the creation of a single 3-D animated movie, said Mr. Burton, now at EMC, a company focused on the management and storage of data.”
  • “Just one of the company’s clients, the New York Stock Exchange, produces up to 2,000 gigabytes of data per day that must be stored for years, he added.”

The impact of the Internet — or, more broadly, the proliferation of digital technology and networks — on energy consumption and greenhouse gas emissions has been a contentious topic since 1999, when technology analyst Mark P. Mills published a study provocatively titled “The Internet Begins with Coal” and co-authored with Peter Huber a Forbes column titled “Dig more coal: The PCs are coming.” [click to continue…]

Post image for Yes, America, There Is a War on Coal


I can understand why President Obama would deny that his administration is waging a war on coal. In the midst of difficult economic times, it would be politically risky if he told the bald truth, that his administration has launched a pincer attack on both coal production and consumption, for no discernible purpose other than to placate a political constituency.

I do not, however, understand why informed reporters (most recently, at Politico) and esteemed colleagues (Cato) mistakenly posit that the war on coal is an empty rhetorical device. The truth is so obvious; I can’t fathom how they miss it.

Consider: In 2012, the Environmental Protection Agency promulgated two regulations—the Utility MACT (final) and the Carbon Pollution Standard (proposed)—that effectively ban the construction of new coal-fired power plants. This is extraordinary. An Agency within the Presidency, without a Congressional mandate, has closed the future for an industry that provides 40 percent of the nation’s electricity. And for what? Not for any public health benefit, to be sure.

The regulatory justification for the Utility MACT is particularly risible. Its purpose is to protect a supposed population of pregnant, subsistence fisherwomen, who consume at least 225 pounds of self-caught fish from exclusively the 90th percentile most polluted fresh, inland water bodies. You can’t make this stuff up! Notably, EPA never identified a single member of this putative population. Rather, they are modeled to exist.

The EPA’s case for the Carbon Pollution Standard is subtler, but no less pointless. In the proposed rule, EPA never even tried to tether the regulation to a specific benefit accruable to the American people. This makes sense, because there are no such benefits. U.S. policy on new electricity generation (like the Carbon Pollution Standard) is an insignificant driver of global greenhouse gas emissions relative to coal-fueled Asian economic growth. In fact, the Carbon Pollution Standard rested on a discretionary authority; there was no pressing concern. EPA merely exercised an option resulting from the Agency’s endangerment power grab.

Thus, neither the Utility MACT nor the Carbon Pollution Standard engenders a “real” public health benefit. On the other hand, the rules will cause expensive energy, which is a very real cost to be borne by all of society.

For existing coal-fired power plants, EPA’s strategy is to impose three types of expensive retrofits on every existing coal-fired power plant, regardless whether or not they would serve an actual purpose. The three controls are: selective catalytic reduction for nitrogen oxides; scrubbers for sulfur dioxide; and electrostatic filters for fine particulate matter. The aforementioned Utility MACT would require scrubbers and electrostatic filters. EPA is using the Regional Haze rule to compel selective catalytic reduction systems. Regional Haze is the archetype of all-pain, no-gain regulation. It’s an aesthetic regulation, whose benefits are literally invisible.

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Yesterday, by an 8-3 vote, the San Francisco Board of Supervisors approved CleanPowerSF, a municipal energy plan that would force about half the city’s ratepayers into using electricity that was generated entirely from renewable sources, like wind and solar power.

The cost? According to the San Francisco Chronicle, the measure would increase utility bills about 23 percent*.

And I thought renewable energy was supposed to be competitive! California already has the 13th most expensive electricity rates in the country, so this 23 percent green energy premium is on top of relatively high utility bills. [updated 10:23 AM, 9/20/2012: I completely forgot to mention that this renewable energy is 23 percent more expensive than conventional energy (in a market, California, whereby a state law forbids the consumption of coal, the most conventional electricity source) after accounting for federal, state, and municipal subsidies. Moreover, I don’t know the extent to which this “100 percent” renewable power is “real” rather than an artificial construct. The grid requires a reliable flow of power, but renewable energy is intermittent, and there’s no technology to store utility-scale electricity. Therefore, I presume CleanPowerSF entails a reliance on imported hydropower (the “real” source of power) while the city purchases renewable energy credits (which are basically the environmental attributes of renewable energy produced elsewhere) equal to the amount of hydropower consumed. This is necessary because Californians don’t consider hydropower to be “green” due to the fact that it harms some kinds of fish. Again, this is reasoned speculation on my part–I can’t imagine how CleanPowerSF would work otherwise. I’ll post again when I find out.]

In addition to being expensive, CleanPowerSF is also coercive. On the basis of already-conducted public surveys that purport to have identified those neighborhoods that are willing to pay more for green energy, the city has chosen 375,000 customers who will be automatically enrolled into CleanPowerSF. That’s about half the ratepayer base. It is incumbent upon these unfortunate residents to opt out of the program. By making participation a default option, the city is trying to take advantage of humankind’s innate aversion to dealing with minutiae, and thereby compel (dupe) as many citizens as possible into using 100 percent green, expensive energy. It’s an old sales trick.

Evidently, San Francisco Mayor Ed Lee’s support for CleanPowerSF is tepid. There’s no guarantee he’ll lend his approval, which is necessary for the project to move forward. I appreciate his reservations.

As I’ve argued here, here, and here: San Francisco could have achieved its green dreams, at zero cost, by freeing the city’s electricity market from the shackles of socialism. Instead, municipal leaders have opted to trade one government granted monopoly (PG&E) for another (Shell, the sole provider of electricity for CleanPowerSF).

*The Chronicle reports that the San Francisco Public Utilities Commission estimated that lower income customers, with utility bills of $40 per month, would see an increase of $9.55. For the average monthly utility bill, which the Energy Information Administration pegs at $81 in California, the San Francisco PUC estimated that the increase would be $18.53.

Post image for Is the EPA Listening? We Need a Waiver on Ethanol

Although harvesting season for corn is ongoing, there isn’t much hope from the Agriculture Department for a strong season. We know that production levels are already down 13 percent from 2011. Adding to the hurt caused by this year’s devastating drought on corn is the Renewable Fuel Standard (RFS). Under the Clean Air Act the RFS requires that in 2012, refiners sell 13.2 billion gallons of corn ethanol – this number equates to roughly 4.7 billion bushels of U.S. corn.  Corn estimates were down to 10.8 billion bushels last month; right now that means that at least 40 percent of corn production is being forced into the ethanol market.

The decline in corn production is already leading to rising prices in various farming sectors — cattle, swine, poultry — that use corn as feed. These economic effects will be intensified by the diversion of corn supply by ethanol requirements. This has prompted Congress, National Associations, and now individual state Governors to urge the EPA to permit a waiver for ethanol requirements in 2012-2013 under the Renewable Fuel Standard.

In Governor Deal’s August 20th letter to EPA Administrator Lisa Jackson describes the importance and scale of the livestock agriculture to the Georgia economy:

As Georgia’s largest industry, agriculture accounts for over 15.7 percent of the state’s economy in terms of sales and output and represents 11.2 percent of the state’s value added production. Georgia agriculture has an annual impact of $68.9 billion on the state’s economy and provides 380,000 jobs to citizens of the state.  Poultry and livestock are critically important components of the state’s economy, representing over 50 percent of Georgia’s farm gate value, while broilers alone account for over 40 percent of farm gate value. From a national perspective, Georgia ranks first in broiler production and third in value of eggs produced. For Georgia, the poultry industry alone accounts for over $20 billion in annual economic impact, and an estimated 98,000 jobs depend on poultry directly or indirectly.

He also points out the grueling effects the Renewable Fuel Standard will have on not only Georgia, but the whole country coupled with this drought:

According to the University of Georgia, the state’s poultry producers are spending $1.4 million extra per day on corn due to the drought and the upward pressure on corn prices caused by the demand created by the RFS for ethanol. This translates to over $516 million per year if these market conditions continue. These additional input costs are not sustainable, and I urge you to consider all options available to the agency to provide some relief in the coming year.

The ultimate impact on consumers in Georgia and throughout the United States in the form of higher food prices must also be fully considered. A recent analysis confirmed that food inflation, particularly for those food categories most impacted by grain costs, has risen much faster than overall inflation since 2005. The reality of this current crisis is that consumers will have to pay more for protein and other food items, or they will simply not be able to afford certain food items.

As I have outlined, Georgia is experiencing severe economic harm during this crisis, and important economic sectors in the state are in serious economic jeopardy. This harm is precisely of the type, character and extent that Congress envisioned when it granted EPA authority to waive RFS applicable volumes in both the original RFS enacted in 2005 and in the substantial revisions made to the law in 2007 by the Energy Independence and Security Act.

Other states such as; Arkansas, Texas, North Carolina, and others have also filled letter with Administrator Jackson.

On August 20th the EPA opened a 30 day comment period for the public on the waiver requests specifically from the Governors of Arkansas and North Carolina. This week, the comment period was extended another 30 days. After the comment period ends, EPA is afforded time to consider the public’s input. As a result, EPA won’t have to make a decision until after the election. How convenient.

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Post image for Should the GOP Champion Climate Change as a National Security Issue?

Yes, argues Daveed Gartenstein-Ross in The Atlantic (Sep. 17, 2012). Gartenstein-Ross is the author of Bin Laden’s Legacy: Why We’re Still Losing the War on Terror. I haven’t read the book, but judging from the favorable reviews, Gartenstein-Ross has the ear of defense hawks of both parties. Does he offer sound advice on global warming?

In his Atlantic article, Gartenstein-Ross chides Republicans for taking a “decidely unrealistic tack” on climate change. “The available evidence overwhelmingly suggests that climate change is real; that extreme weather events are increasing; and that this dynamic will have an impact on American national security, if it hasn’t already,” he avers. He goes on to blame this summer’s drought on global warming, citing NASA scientist James Hansen’s claim that the 2003 European heat wave, the 2010 Russian heat wave, and the 2011 Texas-Oklahoma drought have “virtually no explanation other than climate change.” (For an alternative assessment, see these posts.) 

Since 2010, notes Gartenstein-Ross, the Department of Defense has classified climate change as a conflict accelerant — a factor exacerbating tensions within and between nations. Well, sure, what else is Team Obama at DOD going to say in an era of tight budgets when no rival superpower endangers our survival? The concept of an ever-deepening, civilization-imperilling climate crisis is an ideal mission-creep accelerant

Gartenstein-Ross concludes by urging Republicans to face “reality” and take action on climate change. However, he offers no advice as to what policies they should adopt. Does he favor cap-and-trade, carbon taxes, the EPA’s greenhouse gas regulatory cascade, ‘all of the above’? Gartenstein-Ross doesn’t say. He ducks the issue of what economic sacrifices he thinks Republicans should demand of the American people. 

Below is a lightly edited version of a comment I posted yesterday at The Atlantic on Gartenstein-Ross’s article: [click to continue…]

Today, the Environmental Protection Agency imposed on Montana a Federal Implementation Plan under the Regional Haze Rule that will cost scores of millions of dollars, but achieve no discernible purpose.

Specifically, EPA is requiring $82 million in unnecessary capital expenditures at the Colstrip coal-fired power plant located east of Billings, Montana, in order to engender an ‘improvement’ in visibility that is imperceptible to the eye.

Don’t take my word for it! See the images directly below. They depict the visibility “benefits” wrought by EPA’s regulations. They were generated using WinHaze visibility modeling software, with inputs from EPA data.

Notably, these mandated controls are 500% more expensive than what EPA’s standing rules presume to be “cost-effective.” Given that the benefits are invisible, the severity of these Regional Haze requirements suggests that EPA’s motivations were political.

Remember, environmental special interests are a significant component of the President’s organizational base. And for them, coal is evil, because it is “dirty.” That’s why, way back in 2008, then-Senator Barack Obama told the San Francisco Chronicle editorial board that he would “bankrupt” the coal industry if elected President. Now, EPA is following through on the President’s promise. The powers of the presidency are the means by which he satisfies the environmentalists’ desired ends. To be sure, it’s an American outrage that the fate of an entire industry can thus be subjected to the capricious winds of presidential politics, but that’s a different blog post. For now, it suffices to say that this Administration is imposing billions of dollars of costs, in the midst of difficult economic times, in order to placate a political constituency, and for nothing else.

Post image for Another Study Debunks RFA/Vilsack Claim Ethanol Reduced Gas Prices by $1.09/Gal

A new study by the Energy Research Policy Foundation, Inc. (EPRINC) further debunks the popular talking point of USDA Secretary Tom Vilsack and the Renewable Fuel Association (RFA) that ethanol reduced gasoline prices by $0.89/gal in 2010 and $1.09/gal in 2011.

As noted previously on this site (here and here), Vilsack and the RFA tout a study by Iowa State University’s Center for Agricultural Research and Development (CARD), which concluded that if ethanol production had remained at year 2000 levels, the U.S. motor fuel supply would have been billions of gallons smaller and, thus, significantly pricier in 2010 and 2011. Subsequent studies by FarmEcon, LLC and MIT/UC Davis spotlighted CARD’s unrealistic assumption that the refining industry would not have increased gasoline production to meet consumer demand in the absence of policies mandating and subsidizing the blending and sale of increasing quantities of ethanol as motor fuel.

The EPRINC study (Ethanol’s Lost Promise: An Assessment of the Economic Consequences of the Renewable Fuel Mandate) shows, in addition, that if ethanol output had remained constant at the year 2000 level, refiners could have made up for the shortfall without importing or even refining “a single additional barrel of crude oil.” The Renewable Fuel Standard (RFS) has increased ethanol production by about 400,000 barrels per day (bbl/d) since 2000. A “remarkably small operational adjustment” in refineries’ product mix — a 1.8% increase in gasoline production — could have covered an ethanol shortfall of 400,000 bbl/d in 2011.

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