A major disagreement erupted this week in the British government over future onshore windmill installations.  The number two minister in the Department of Energy and Climate Change, John Hayes, MP, declared that “enough is enough,” and that no more wind farms needed to be built in the United Kingdom.  Hayes complained that wind turbines had been “peppered across the country” without regard for public opinion.

Hayes’s boss, Energy Minister Ed Davey, MP, quickly and angrily responded that Hayes’s views are not shared by the Cabinet and that there is no formal change in government policy towards renewable energy.

Davey is a member of the Liberal Democratic Party, which is the junior partner in the Conservative-Liberal Democratic coalition government.  Hayes, a member of the Conservative Party, clearly speaks for the majority of MPs in his party.

In response to a question by Ed Miliband, MP, leader of the Labour Party opposition, Prime Minister David Cameron insisted that government policy had not changed, thereby apparently backing Davey.  But then Cameron said that it was time for a debate about future policy on onshore wind installations.

Official British government policy aims for 13 gigawatts of wind capacity by 2020. Current capacity is 7.3 gigawatts, with hundreds of wind turbines currently under construction.

A new report published in Greenwatch by the Capital Research Center documents the significant financial backing that Canadian groups have received in order to garner opposition to development of the Canadian oil sands and the Keystone XL Pipeline. Brian Seasholes, an adjunct scholar at CEI, writes:

Media accounts and policy discussions of oil sands and Keystone XL usually portray the adversaries as David vs. Goliath: small, underfunded environmental pressure groups taking on big, wealthy corporations. In reality, the activists, especially in Canada, look less like grassroots groups than like subsidiaries of large U.S. institutional donors, many with billions of dollars of assets—organizations that have funneled colossal amounts of money to anti-oil sands groups over the past decade.

While the U.S. media have paid scant attention to this funding stream, a handful of Canadians have picked up the slack. The first to blow the whistle were left-wing Canadian activists, who feared funding from U.S. donors would make “green” pressure groups less confrontational and more likely to cut deals with governments and corporations. Then in the mid-2000s left-wing journalists in Canada blew the whistle, most notably Peter Cizek, Dru Oja Jay, and Macdonald Stainsby, with the Pew Charitable Trusts as their favorite target.

He includes this helpful table, documenting grants from 1999 to present:

As Seasholes discusses in the report, this evidence should put to bed the notion that Canadian opposition is a rising up of grassroots activists, but rather the work of wealthy American foundations.

Fortunately, their activism does not seem to have had much success. Public opinion in Canada is mixed, with Canadians supporting development of the Canadian oil-sands, with less support for allowing the oil to leave the Canadian border. This is presumably due to protectionist or energy independence sentiments, both of which are popular in the United States as well. Nonetheless, the development of the Canadian oil-sands is ongoing. Given that President Obama approved the southern portion of the Pipeline, the conventional wisdom is that the full pipeline will eventually be approved (though not all agree with this, clearly), regardless of who is the next President. As Seasholes argues, this is a good development, as there is very little refining capacity which can handle heavy crude oil.

While I’ll be the first to admit I would prefer Mitt Romney’s energy policies to those of President Obama, especially his appreciation for increased energy production on public lands and the OCS, I found his newly released energy policy white paper slightly humorous in parts.

On the top of page 19:

• Focus government investment on research across the full spectrum of energy-related technologies, not on picking winners in the market;

• Support increased market penetration and competition among energy sources by maintaining the RFS and eliminating regulatory barriers to a diversification of the electrical grid, fuel system, or vehicle fleet;

On the bottom of page 19:

Instead of distorting the playing field, the government should be ensuring that it remains level. The same policies that will open access to land for oil, gas, and coal development can also open access for the construction of wind, solar, and hydropower facilities. Strengthening and streamlining regulations and permitting processes will benefit the development of both traditional and alternative energy sources, and encourage the use of a diverse range of fuels including natural gas in transportation. Instead of defining success as providing enough subsidies for an uncompetitive technology to survive in the market, success should be defined as eliminating any barriers that might prevent the best technologies from succeeding on their own.

I’m not sure what the Renewable Fuel Standard is other than a subsidy for an uncompetitive technology allowing it to survive in the market.

I guess you can’t win them all.

Yesterday The Hill‘s Energy Blog reported on a brief filed by the EPA in the U.S. Court of Appeals for the District of Columbia:

The documents filed Monday with the U.S. Court of Appeals for the District of Columbia reveal the reasoning behind EPA’s move to shoot down the American Petroleum Institute’s (API) challenge of the renewable fuel standard (RFS). EPA determined that enough advanced biofuels — generally understood to be made from non-food products — existed to meet that portion of the RFS for 2012.

“EPA reasonably considered the production capacity likely to be developed throughout the year, while API would have EPA rely narrowly and solely on proven past cellulosic biofuel production,” EPA said in its brief. “EPA reasoned that lowering the advanced biofuel volume in these circumstances would be inconsistent with EISA’s [the Energy Independence and Security Act of 2007] energy security and greenhouse gas reduction goals, and decided to leave the statutory advanced biofuel volume unchanged.”

The (main) question here is what the 2012 cellulosic biofuel requirements should be set at. The EPA is arguing that they took a reasonable look at capacity production and put out what they thought could be developed, while the American Petroleum Institute is only looking at historic cellulosic biofuel production. So who is being reasonable?

Bob Greco over at the Energy Tomorrow blog produced this graph:

The large blue bars indicate the original blending requirements under the Energy Independence and Security Act. To the EPA’s credit, they had nothing to do with the original blending requirements. The lighter turquiose-ish are the finalized numbers requested by the EPA, as they are allowed to adjust requirements to fit reality. The red number represents actual commercial cellulosic ethanol production, according to the EPA’s own numbers.

Until this April there was zero commercial production of cellulosic ethanol, when 20,000 gallons were produced.

So, again, we ask: who is being unreasonable? The EPA who somehow still maintains that 8.65 million gallons will be produced in 2012? Or the American Petroleum Institute? Even if the API requested that the blending requirement be reduced to zero, their final guess will be much closer to reality than the estimate of the EPA.

Graph courtesy of Roger Pielke Jr.

The EPA announced yesterday that it would open a 30 day commenting period as it weighs requests from multiple state governors to use provisions in the Clean Air Act to temporarily suspend the corn ethanol mandate under the Renewable Fuel Standard:

The EPA asked on Monday for public comment on the need for an ethanol waiver. The 30-day comment period will begin once the notice is published in the Federal Register.

“This notice is in keeping with EPA’s commitment to an open and transparent process to evaluate requests the agency receives under the Clean Air Act, and does not indicate any predisposition to a specific decision,” agency spokeswoman Alisha Johnson said in a statement.

By law the agency has until November 13 to make a decision on the waivers, meaning EPA could act on the requests after national elections on November 6.

Aimed at reducing U.S. reliance on foreign oil, the Renewable Fuels Standard, or RFS, would require 13.2 billion gallons of ethanol to be made from corn this year.

Recall in 2008 Texas Governor Rick Perry submitted a similar request to the EPA which the EPA denied by arguing that waiver requests must show that the mandate was “severely damaging” a region’s economy rather than just contributing to economic damage.

As noted, the EPA will not need to act on this until after the election. It’s possible at that point they would consider in some way reducing the blend level of corn ethanol, though it seems very unlikely as the Obama Administration — like the administrations before him — has repeatedly placed the interests of ethanol producers over the interests of consumers.  The popularity of ethanol has shifted slightly in recent years, though its hard to imagine it’s shifted enough such that the EPA would be willing to enrage the ethanol industry, and send a “chilling signal” to investors in order to alleviate the demand for corn created by the Renewable Fuel Standard. Perhaps things will change if the drought continues or intensifies.

More likely, if anything, as Roger Pielke Jr. points out the outcome will involve some sort of change to the Renewable Identification Number system allowing refiners increased flexibility to push blending obligations to future years when (presumably) drought conditions have alleviated. He also produced a nice graph (above) displaying modeled reductions in corn prices in response to theoretical changes to the RFS. The same study, oddly enough, has been touted by ethanol supporters to suggest that changes to the RFS would not have significant impacts. However, the study found corn price reductions in the range from 7.5-25%, depending on the severity of modifications to the RFS. I wouldn’t classify any of those as insignificant.

Via Kenneth Green and The Daily Caller, comes some research which suggests that ultraviolet rays from compact fluorescent bulbs may pose a risk to healthy skin cells.

From the studies abstract:

In this study, we studied the effects of exposure to CFL illumination on healthy human skin tissue cells (fibroblasts and keratinocytes). Cells exposed to CFLs exhibited a decrease in the proliferation rate, a significant increase in the production of reactive oxygen species, and a decrease in their ability to contract collagen. Measurements of UV emissions from these bulbs found significant levels of UVC and UVA (mercury [Hg] emission lines), which appeared to originate from cracks in the phosphor coatings, present in all bulbs studied.

I’d like to echo Ken’s reaction and snark:

…there are many good reasons to remove the ban (pardon me, “unattainable performance standard that will serve as a de-facto ban”) on incandescent light bulbs.

…

The “one-study never proves anything” rule still holds, of course.

Perhaps this won’t end up being a huge deal. But Congress acted to implement this legislation before this information was available, and it would have been nice to know that the government is encouraging consumers to switch to a new type of light bulb that may or may not be bad for our skin.

Finally, I posted recently about a Mercatus paper which criticized energy efficiency standards implemented by various government agencies (or Congress). The American Council for an Energy-Efficient Economy responded to the paper by denying that these regulations restrict consumer choice:

False claim #2:  Efficiency standards restrict consumer choice

Refrigerators are the most regulated appliance in America, having been subject to no fewer than six rounds of improved state and federal efficiency requirements over more than 30 years.  Think about it for a moment. Do you have fewer choices in refrigerators than you did 10 years ago? For those who can remember, than 30 years ago? How about for clothes washers? Or for light bulbs?

For each of these products, consumer choices have increased even as standards have eliminated energy-inefficient models from the market. Refrigerators come with a wider array of configurations (the latest rage is French doors—GE just added a second shift at its Louisville, Kentucky plant to keep up with demand), ice and water dispenser options, built-in designs, and other features than have ever existed. Clothes washer buyers have an array of energy- and water-efficient front-loading and top-loading designs covering price points from $400 and up to choose from, many with features like steam cleaning unheard of a decade ago. For light bulbs, manufacturers report that the standards spurred them to introduce a whole new generation of energy-efficient incandescent bulbs so that consumers can now choose among energy-efficient incandescent, compact fluorescent, and newly-introduced LED options. Consumers have more choice than ever.

Two years ago, if I wanted to, I could have gone into a grocery store and purchased one of those old school incandescent bulbs. In a few years, if the new efficiency standard for light bulb remains the law of the land, I will no longer be able to do so. The number of new light bulbs invented in the interim is irrelevant to the fact that I can no longer go and purchase that old bulb. These policies restrict consumer choice, regardless of the fact that consumer choices are constantly expanding due to a growing economy (or due to a misguided policy that mandates efficiency improvements).

The Mercatus Center released a paper (PDF) this month co-authored by Ted Gayer (an economist at the Brooking Institution) and W. Kip Viscusi (an economics professor at Vanderbilt), titled “Overriding Consumer Preferences with Energy Regulations” which questions the economic justification for various government schemes implemented to force energy efficiency improvements in consumer household products, automobiles, lightbulbs, etc. The abstract is below:

This paper examines the economic justification for recent U.S. energy regulations proposed or enacted by the U.S. Department of Energy, the U.S. Department of Transportation, and the U.S. Environmental Protection Agency. The case studies include mileage requirements for motor vehicles and energy-efficiency standards for clothes dryers, room air conditioners, and light bulbs. The main findings are that the standards have a negligible effect on greenhouse gases and the preponderance of the estimated benefits stems from private benefits to consumers, based on the regulators’ presumption of consumer irrationality.

The paper walks through the basic economic understanding of consumer rationality, and explains why behavioral critiques of consumer rationality fail to undermine the general conclusion that consumers are overwhelmingly rational and tend to act in their own best interest, and that “in most contexts consumers are better equipped than analysts or policymakers to make market decisions that affect themselves.”

The authors state that benefit cost analysis (BCA) conducted by government agencies in support of these policies (fuel standards, consumer appliance efficiency, etc.) make unwarranted assumptions, including the assumption that the energy efficiency of the product should trump other considerations, such as the up front cost:

As our discussion in this paper indicates, government agencies do not properly assess the benefits from energy-efficiency standards. They assume consumers and, in some cases, firms are incapable of making rational decisions and that regulatory policy should be governed by the myopic objective of energy efficiency to the exclusion of other product attributes. Energy efficiency standards provide a valuable case study of how agencies can be blinded by parochial interests to assume not only that their mandate trumps all other concerns but also that economic actors outside of the agency are completely incapable of making sound decisions. The assumption that the world outside the agency is irrational is a direct consequence of the agencies’ view that energy efficiency is always the paramount product attribute and that choices made onany other basis must be fundamentally flawed.

This paper is important because there exists a general scorn from left leaning policy groups towards anyone who dares question the wisdom of energy efficiency programs, including the recently introduced CAFE standards which will require that automobiles meet previously unheard of fuel mileage standards by 2025. Libertarians and market oriented folks are dismissed as right-wing cranks by those who are more supportive of government intervention into the economy, and yet there remains a strong and sound argument against narrowly tailored regulations designed to nudge consumers towards making different choices.

From the Sunday talk show circuit, summary courtesy of Politico:

High energy costs, not the drought gripping more than half the country, may take a bite out of Americans’ grocery bills, Agriculture Secretary Tom Vilsack said Sunday.

With 26 states in drought conditions, CNN’s Candy Crowley repeatedly pressed Vilsack on “State of the Union: over a connection to jumps in the prices of some food items, but Vilsack resisted the connection.

“If [people] are using this drought to inappropriately raise prices, shame on them,” Vilsack said.

Typically, when it is discovered that in the future there will be much less of a certain commodity than previously expected, the price rises. While some energy prices have risen, they haven’t changed enough to warrant such a dramatic rise in the price of corn. The primary cause is lowered yields resulting from drought:

U.S. feed grain supplies for 2012/13 are projected sharply lower this month with lower production for corn on lower yields. Extremely hot weather and drought result in a 20- bushel-per-acre decline in the projected corn yield to 146 bushels per acre reducing projected production to 13.0 billion bushels, compared with 14.8 billion bushels last month. The June Acreage report increased planted acreage relative to March intentions but harvested acreage was reduced 249,000 acres. Corn supplies for 2012/13 are projected1.8 billion bushels lower. Forecast 2012/13 prices are increased for corn, sorghum, and barley and oats. With tighter supplies and higher price prospects, domestic corn use is projected down 755 million bushels as feed and residual and ethanol use prospects are lowered.

And the inevitable price increase:

One argument in support of policies that encourage the use of biofuels is that the price of oil is subject to wild swings, decreasing “economic security” etc. as prices are not guaranteed to follow a predictable path. Unfortunately, corn ethanol is also subject to wild volatility resulting from variations in rainfall.

Representative John Sullivan (R-OK) lost a Republican primary last night to Jim Bridenstine, who is likely to win Sullivan’s seat in November. Sullivan was the main sponsor of the T. Boone Pickens NAT-GAS Act, which would have funneled money into subsidies for building out infrastructure for natural gas vehicles, specifically fueling stations throughout the country and providing tax credits for large truck fleets that converted to natural gas. While the past few years have seen significant anti-incumbent sentiments, one notable difference between Sullivan and Bridenstine was their stance on subsidizing natural gas:

On only one issue, energy policy, did Sullivan and Bridenstine substantially disagree. Sullivan touted his bill to promote natural gas vehicle fuels, while Bridenstine supports an alternative proposal.

“Let’s get cars, trucks and buses running on natural gas,” Sullivan said. “We have an abundance of it here in the United States. It’s cheap and abundant and … it also addresses a national security issue by lessening our dependence on foreign oil.”

Bridenstine calls Sullivan’s NatGas Act a “big-government” boondoggle because it creates a short-term subsidy to convert vehicles to natural gas.

“We ought not let Washington, D.C., control free markets with tax subsidies,” he said.

Bridenstine said he supports the Domestic Jobs, Domestic Energy, and Deficit Reduction Act, which is backed by Oklahoma’s U.S. Sens. Jim Inhofe and Tom Coburn. That measure is intended to more directly stimulate oil and gas exploration in the United States.

Neither bill, as it turns out, is expected to win approval in Congress.

Now, this was only one “town-hall” type meeting, but perhaps voters in Oklahoma are tired of crony capitalism. It will certainly make the legislation harder to pass, as Sullivan was the primary sponsor, and was on the Energy & Commerce committee.

CEI’s Myron Ebell appeared on E&E-TV this morning to discuss the upcoming vote on Senator Inhofe’s (R-OK) CRA vote to end the EPA’s mercury and air toxic’s rule. You can watch the video here. Here is a snippet of the conversation:

Monica Trauzzi: Myron, the Senate is expected to take up a measure this month that would change the future of EPA’s mercury and air toxics rule. There are two proposals that are actually being discussed on the Hill right now and the first is by Senator Inhofe and that would scrap the rule entirely. The second is by Senators Alexander and Pryor, and that would give utilities a little extra time to comply with the rule. What’s your take on the proposals and the overall impact on industry?

Myron Ebell: Well, first, the House has already passed legislation with a quite significant majority to block the utility MACT rule. Senator Inhofe’s resolution is brought under the Congressional Review Act and, therefore, it only requires a majority of those voting and it cannot be blocked by the Majority Leader or require a 60 vote, procedural vote. So, his is actually doable in the Senate. The Alexander Pryor legislation, I think Senator Alexander, who we might think of as the next Dick Lugar, is trying to provide cover for Democrats in tough election races to say that they’re voting for something that has absolutely no chance of passage, because their bill would take 60 votes, whereas Senator Inhofe’s much better resolution, which would block the rule entirely, only takes 50. The Alexander-Pryor legislation would only delay the implementation by a couple of years. So, instead of giving utilities four years, they would have six years in order to shut down their coal-fired power plants essentially.

Monica Trauzzi: But isn’t that a good thing? I mean couldn’t that help industry if they had a little extra time to comply and apply some of these technologies?

Myron Ebell: Sure, it could, but the fact is that there is no technology that will help these coal-fired power plants comply. So, we’re just essentially extending the killing off of coal-fired power plants. This bill has no chance of passage. That’s the key thing. It’s only being introduced to try to peel votes off of the Inhofe resolution.

Monica Trauzzi: So, you’re talking about the Alexander-Pryor bill?

Myron Ebell: Yes, it has, it would require 60 votes and there aren’t, if there aren’t 50 votes for the Inhofe resolution, there certainly aren’t going to be 60 for the Alexander bill.

Watch the rest here, or read the entire transcript here.