December 2015

o as leviathanPresident Barack Obama confirmed in a press conference in Paris on 1st December that he intends for the Paris Climate Treaty to bind politically the next President, even if he is succeeded by a Republican who opposes the treaty and even if it’s not ratified by the Senate.

Here is what the President said in response to a question:

But even if somebody from a different party succeeded me, one of the things that you find is when you’re in this job, you think about it differently than when you’re just running for the job.  And what you realize is what I mentioned earlier, that American leadership involves not just playing to a narrow constituency back home, but you now are, in fact, at the center of what happens around the world, and that your credibility and America’s ability to influence events depends on taking seriously what other countries care about.

Now, the fact of the matter is there’s a reason why you have the largest gathering of world leaders probably in human history here in Paris.  Everybody else is taking climate change really seriously.  They think it’s a really big problem.  It spans political parties.  You travel around Europe, and you talk to leaders of governments and the opposition, and they are arguing about a whole bunch of things — one thing they’re not arguing about is whether the science of climate change is real and whether or not we have to do something about it.

So whoever is the next President of the United States, if they come in and they suggest somehow that that global consensus — not just 99.5 percent of scientists and experts, but 99 percent of world leaders — think this is really important, I think the President of the United States is going to need to think this is really important.  And that’s why it’s important for us to not project what’s being said on a campaign trail, but to do what’s right, and make the case. 

In short, President Obama thinks his successor will lead—as he does—from behind.

Columbia University Graduate School of Journalism recently published an investigative report alleging some sort of climate cover-up by ExxonMobil. For my part, I knew the report was not to be trusted the moment I understood that one of its underlying assumptions is the silly notion that Exxon was responsible for “manufacturing doubt” on climate change by funding “denier” groups. I know this is a misapprehension because I work for one such group, the Competitive Enterprise Institute. Accordingly, I’m well positioned to know that the claim is without merit, akin to arguing that the New York Times is in the pocket of Chevron for running the company’s ads in its paper, or claiming that Politico is a mouthpiece for the League of Conservation Voters because the LCV “sponsors” Politico Morning Energy. When an “investigative journalist” operates on the assumption that Exxon and the Koch brothers are pulling all the strings, he or she exposes both his/her preconceived ideas and lazy reporting technique.

With all this fresh in the mind, I chortled my cold coffee upon yesterday reading that the School of Journalism’s “Exxon Knew” investigation was funded by the Energy Foundation, the Rockefeller Brothers Fund, and the Rockefeller Family Fund. These benefactors all are avowed opponents of fossil fuel consumption, and they often cast their opposition in moral terms. They are, as such, extremely partial when it comes to the subject of the investigative report they paid for funded.

Suspiciously, the School of Journalism posted an acknowledgement of the funding only after the first of its stories appeared online. I wonder what led to that?

In a letter to Exxon, School of Journalism Dean Steve Coll addressed the matter, and his missive struck a chord with me. He wrote:

You … understand that the issue is not who provided funding for this or any other Columbia University project, but whether the work done is independent of the funders. In short, did the journalism fellows … follow the information uncovered by the reporting or did they follow the funder’s agenda? The fact is that this reporting was not subject to any influence or control by the funders …

What a sad joke. Coll and his “journalism fellows” take it for granted that think tanks and other policy organizations were mere passive conduits for Exxon’s supposed campaign to fool the American public. Coll et al.’s “evidence” for this allegation is that the funding existed. But when it comes to the anti-fossil fuel zealots that fund his brand of “investigative journalism,” he assures everyone that there is no connection between the money and the end product. He is not, he promises, an anti-fossil fuel shill. [click to continue…]

In order to survive judicial review, federal rules must be reasonable, per se, and also the product of a reasonable rulemaking process. EPA’s recent climate regulation for new power plants, known as the Carbon Pollution Standards, is neither.

  1. EPA’s Carbon Pollution Standards rule is irrational because its purpose is to decrease greenhouse gas emissions, but its effect it to increase greenhouse gas emissions

The purpose of the Carbon Pollution Standards rule is to reduce greenhouse gases from new coal-fired power plants. To this end, the agency based the regulation on the installation of emissions controls known as “carbon capture and sequestration.” These “CCS” systems work by capturing greenhouse gases emitted from a power plant’s smokestack and then piping them to empty underground reservoirs, where the emissions are injected for long term storage.

However, the technology is not yet market ready, and, as such, it is exorbitantly expensive. In order to mitigate the monumental costs of CCS, the EPA is relying on the oil industry. In some parts of the country, geological conditions exist that make it profitable for oil producers to buy carbon dioxide, inject it into wells, and thereby extract more oil. This process is known as “enhanced oil recovery,” or EOR. In the rulemaking for the Carbon Pollution Standards, EPA repeatedly explained that it expects power plant owners to defray the tremendous cost of CCS by selling captured carbon dioxide to oil producers for use in EOR. In fact, EPA’s expectation comports with mainstream analysis, as the International Energy Agency projects that 70% of new CCS projects worldwide will be linked with EOR.

So, the purpose of EPA’s Carbon Pollution Standards regulation is to decrease greenhouse gas emissions. And the rule would do so by boosting oil production. [click to continue…]

Early in 2015, SolarCity, a solar panel merchant, filed a whopper of a complaint in federal court alleging that it had suffered antitrust violations at the hands of the Salt River Project, an Arizona electricity provider. SolarCity’s complaint is rich in Alanis Morissettean irony, given that the company’s business plan, like that of all solar power retailers, is based primarily on political favoritism. Were it not for government tilting the market in their favor at the expense of conventional energy sources, SolarCity and its ilk would not exist. The company, as such, is a function of anti-competitive behavior. In this cosmic context, SolarCity’s antitrust lawsuit is like myriad spoons when you only need a knife.

Consider the case at hand. Thanks to a federal statute, the 2005 Energy Policy Act, public utilities akin to the Salt River Project are required to offer incentives, known as “net-metering,” for producers of electricity from rooftop solar panels. As I explain here, net-metering usually entails the overpayment to owners of rooftop solar panels for their electricity in a manner that redistributes wealth from those that don’t own solar panels, to those who do. In response to this legislative command to coddle an industry favored by Congress, the Salt River Project instituted a net-metering program that was very generous. And SolarCity took advantage of this generosity to grow its market share.

However, SRP’s net-metering ratepayer subsidies were too generous, such that they threatened to lead to the under capitalization of grid infrastructure. In practice, SolarCity and its customers benefited financially from the grid without having to invest commensurately in the grid. Thus, these beneficiaries were getting a “free ride.” Taken to its logical end, if all SRP ratepayers installed rooftop solar panels and thereby enjoyed the terms of the old deal, then there would be no capital to maintain the grid, and it would fall apart. [click to continue…]

Post image for EPA Increases Renewable Fuel Blending Targets: Corporate Welfare Clients Demand More

Overview: EPA for the first time has set an overall Renewable Fuel Standard (RFS) blending target below the statutory target. The biofuel lobby threatens to sue. If they win and courts rule EPA may not consider market constraints (a.k.a. the blend wall) when setting RFS blending requirements, harsh consequences could ensue for consumers, the economy, and, ironically, biofuel manufacturers themselves.

EPA yesterday announced final volume obligations (RVOs) under the Renewable Fuel Standard (RFS) program for the years 2014, 2015 and 2016, and final volume requirements for biomass-based diesel for 2014 to 2017. EPA was two years late setting RVOs for 2014 and one year late setting RVOs for 2015.

RFS Final RVOs 2014-2017





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There has been a flurry of reports of late about how President Obama has staked his “legacy” on the success of the ongoing UN climate confab in Paris. And no doubt these reports are true. This White House has been promoting the Paris talks in earnest since late August. Indeed, the putative threat of global warming has received more of the President’s public attention than any other foreign policy issue during his second term.

So I’ve been asking myself: would Obama be president today if he’d been forthcoming about climate change during his reelection campaign in 2012?

After all, it would have been impossible for voters three years ago to have expected that Obama would make climate change his top priority, as the president refused to reveal his true intentions. Consider the following headlines from October 2012:

  • San Francisco Chronicle: “Obama, Romney Quiet on Climate”
  • Guardian: “U.S. Presidential Debates: Abortion, Climate Change, and other Missing Issues”
  • Associated Press: “Guns, Climate, Gays Missing in Presidential Race”

Far from making climate change a priority, Obama in 2012—the guy trying to get elected—was an avowed champion of all fossil fuels, which, of course, are the alleged cause of supposedly terrifying global warming. During the debates, for example, Obama tried to outflank Romney’s right on energy. That Obama—the guy trying to win over American voters—was pro-gas, pro-oil, and even pro-coal. It was only in the immediate wake of reelection, after which he no longer faced voter scrutiny, that Obama pivoted to legacy-making on the climate.

To recap: Obama in 2012 trumpeted his record on fossil fuel production and ignored climate change in order to get elected; then, once he was elected, he made climate change his number one priority. So he actively misled the American people. Such a naked bait and switch is unprecedented in modern presidential politics. It is also crassly cynical, and should put to shame any notion that Obama cares about “hope” or “change” or any of that jazz.

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