Brian McGraw

Post image for Union of Concerned Scientists Not Very Concerned With Accuracy

Ron Bailey of Reason took a closer look at one of the many reports out there written to discredit those organizations (and corporations) that remain skeptical of plans to dramatically scale back the world’s carbon dioxide emissions. What the report intended to insinuate was that corporations were hypocritical: they claimed to publicly support policies to combat climate change but privately gave money to those organizations whose aims were to undermine support for such policies. While I can certainly believe that some corporations will want to present a happy face to the public while also being more privately concerned with the impact new legislation has on their profitability, upon closer inspection the report wasn’t quite what it seemed:

In line with the findings of the UCS, the L.A. Times specifically declared, “General Electric has backed six environmental and non-partisan research groups that accept the scientific consensus on climate change, including the Brookings Institution and the Nature Conservancy. At the same time, it has funded four organizations that reject or question the consensus, including the Competitive Enterprise Institute and Heritage Foundation.” Based on the UCS report, The Guardian (U.K.) stated, “Some of America’s top companies are spending heavily to block action on climate change or discredit climate science, despite public commitments to sustainable and green values.” The Guardian specifically mentioned that UCS had identified General Electric as being two-faced about climate change. According to the UCS report, among the four GE-supported organizations that “misrepresent” climate-change science is the Reason Foundation, the nonprofit that publishes this website.

So what vast sums of money did the duplicitous executives at General Electric lavish on the Reason Foundation in 2008 and 2009 to support an implied campaign to traduce climate science? Exactly $325. How much did GE spend on matching and direct grants on the six think tanks identified by the UCS as being pro-climate consensus? That would be $497,744. At least with regard to General Electric’s contributions, it appears that the Union of Concerned Scientists has salted a follow-the-money trail with pieces of fool’s gold, which certain unwary news outlets obligingly picked up and reported as real bullion.

You can read the entire report here. It’s mostly documentation of various corporations and their perceived support or opposition towards climate change legislation. It separates groups into what seems to be “good” and “bad,” with most of the fossil fuel energy making the bad group.

The noteworthy part is the way in which the media swallowed the conclusions without doing any work of their own. Bailey points out that the only funding Reason received from General Electric was to the tune of roughly $300, and only because G.E. has a company wide policy that matches donations made by employees to groups like the Reason Foundation or the Competitive Enterprise Institute. The report didn’t mention that GE’s support was not actually corporate funding, but rather a very small match towards employee contributions. Keith Kloor offers sympathetic commentary.

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The Competitive Enterprise Institute attended the 7th International Conference on Climate Change, sponsored by the Heartland Institute and held in downtown Chicago on May 21-23. We at CEI are deeply indebted to the Heartland staff for all the hard work that went into putting on this event. The conference ran smoothly and I thought it was well attended despite the recent public kerfuffle over the incident with Peter Gleick and Heartland’s billboard campaign. CEI’s Myron Ebell and Chris Horner participated in a panel on the social and economic impacts of climate change and climate change policies. A videos of Myron’s panel is embedded below, and Chris Horner’s can be watched at this link.

There were a number of presentations which I found excellent, including (but not limited to) talks by Tom Harris of the International Climate Science Coalition, Patrick Michaels of the Cato Institute, Czech President Vaclav Klaus, Julian Morris of the Reason Foundation, and a convincing presentation by Sebastian Lüning, a German geologist and author of The Cold Sun, which will be available in English later this year. [click to continue…]

Post image for EPA Continues the Cellulosic Ethanol Folly

Last week the EPA dismissed a petition by the American Petroleum Institute seeking relief from the cellulosic ethanol mandate, which requires that oil refiners blend 8.65 million gallons of ethanol into the fuel supply by the end of 2012:

“In all cases, the objections raised in the petition either were or could have been raised during the comment period on the proposed rule, or are not of central relevance to the outcome of the rule because they do not provide substantial support for the argument that the Renewable Fuel Standard program should be revised as suggested by petitioners,” EPA told API, American Fuel & Petrochemical Manufacturers, Western States Petroleum Association, and Coffeyville (Kan.) Resources Refining & Marketing on May 22.

“EPA’s mandate is out of touch with reality and forces refiners to pay a penalty for not using imaginary biofuels,” Bob Greco, API’s downstream and industry operations director, said on May 25. “EPA’s unrealistic mandate is effectively an added tax on making gasoline.”

Greco said the Clean Air Act requires EPA to determine the mandated volume of cellulosic biofuels each year at “the projected volume available.” However, in 2011 EPA required refineries to use 6.6 million gal of cellulosic biofuels even though, according to EPA’s own records, none were commercially available, Greco said.

EPA has denied API’s 2011 petition to reconsider the mandate and continues to require these nonexistent biofuels this year, he indicated. Greco called the action “regulatory absurdity and bad public policy.”

As regular readers of this blog will know, the whole problem with the EPA’s non-flexible mandate is that there is no commercially available cellulosic ethanol, thus making it impossible to meet the mandate. The EPA’s justification for this policy is that they need to maintain an incentive for companies to begin producing cellulosic ethanol, despite many past failures. The oil refiners are also required to purchase these cellulosic ethanol waivers, effectively giving the government money instead of purchasing the non-existent fuel. [click to continue…]

Post image for International News Roundup

Carbon Markets Work, Until They Don’t

Having added layers of bureaucracy and complexity to their energy markets, the United Kingdom is struggling with a number of different problems in their electricity markets: rising prices, lowered reliability, and record low prices on carbon emissions. The UK’s answer involves granting the government further power to intervene in electricity markets. Under a draft energy bill put forth by Edward Davey, the Secretary of State for Energy and Climate Change, the new legislation would ban new coal-fired power plants absent carbon capture and sequestration, set a price floor for carbon dioxide emissions, and provide guaranteed rates of return on new low-carbon energy sources to encourage the increased investment that has yet to materialize. Like many bureaucrats, Davey is confident his proposal is a blueprint for success: “If we don’t secure investment in our energy infrastructure, we could see the lights going out, consumers hit by spiraling energy prices and dangerous climate change. These reforms will ensure we can keep the lights on, bills down and the air clean.”

Airline Emissions Fight, Round XVII

It’s the song that will never end. This week, those who predicted that this dispute would end in a trade war will feel a twinge of gratification: India has threatened to ban European airlines from Indian airspace if the Europe Union begins to impose sanctions on Indian airlines. Last week, both the Chinese and Indian governments forbade their airlines from providing the EU with data on their carbon emissions, signaling that this situation is not going to be resolved amicably anytime soon. The EU now seems to have backed off, to some extent, from the tough talk and complete refusal to back down. A spokesman for Connie Hedegaard, the EU climate commissioner, stated that the UN’s International Civil Aviation Organization was hoping to reach a mutually agreeable solution prior to April of 2013. It remains unclear what this solution will involve, as India and China have shown little interest in international negotiations to limit their economic growth through carbon taxation.

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Post image for Fraudulent Renewable Fuel Credits Continue to Surface

When the government introduced the mandates for ethanol and related biofuels, they needed a way in which companies could verify that they were complying with the Energy Independence & Security Act of 2007. For whatever reason, the decided mechanism would require that companies purchase credits to demonstrate that they had complied with the mandate: a renewable identification number (RIN). Each RIN is theoretically tied to a gallon of ethanol, biodiesel, or similar renewable fuel. However, because the RINs can be sold and traded similar to stock, in practice the pairing of a RIN with a particular gallon of fuel is somewhat superficial.

Unfortunately, this government created market in RINs has created an opportunity for criminally-minded entrepreneurs to scam the companies who are attempting to comply with the law by creating fake RINs and selling them in the marketplace. Note that these oil companies are required by law to purchase these credits, and its often difficult to verify that they are genuine, leading oil companies to often completely bypass small producers and only purchase biofuels and credits from larger, recognizable producers, a somewhat unique barrier to entry for small firms (suspicion of fraud). The latest case in fraudulent RINs surfaced late last month involved the sale of 60 million credits worth roughly $84 million, the third big bust in recent years ($ub required):

According to the violation notice, EPA determined that the fake credits were generated between July 16, 2010, and July 15, 2011. The Clean Air Act allows the agency to assess a civil penalty of up to $37,500 a day for each violation.

“When fuel credits are generated or used that do not represent qualifying renewable fuel, it undermines Congress’ goals in creating the program, creates market uncertainty and is a violation of the standard,” EPA said in a statement emailed to Greenwire. “EPA enforcement of the standard deters fraud and abuse in the system, helps to restore certainty in the market and ensures that the goals of Congress are met.”

This is the third notice EPA has issued since November to companies allegedly producing fake credits, and it is likely not the last.

Last November, EPA accused a Maryland man of generating $9 million worth of fraudulent renewable identification numbers (RINs) on his computer. The 38-digit numbers represented 22 million gallons of biodiesel that was never produced at the man’s company, Clean Green Fuel LLC.

EPA issued another violation notice in February to Texas-based Absolute Fuels LLC for allegedly creating 48 million fake credits worth approximately $62 million. The agency said CEO Jeffrey Gunselman used the money to purchase an aircraft and a number of vehicles, including a 2010 Mercedes Benz and a 2011 Bentley.

Yes, creating markets that are easy to fraudulently manipulate would indeed seem to undercut the goal of the ethanol mandate. Thankfully, unlike in previous cases, the EPA is working constructively with the companies who have been subjected to these scams rather than fining them for getting caught up in a problem the government has created.

This is yet another reason why moving forward with increasing blends of ethanol is not a good idea. Freeze the mandate at 2012 levels if it can’t be scrapped completely. Yes, the short term capital losses from ethanol investments  will be realized, and this will hurt a lot, but the alternative is to continue investments into a fuel that is still more expensive than gasoline once you adjust for its lower energy content. Or we can continue pretending that whatever minute environmental benefits accrue from corn ethanol are worth the absurd push to encourage ethanol use beyond E10. We can also continue to pretend that cellulosic ethanol is around the corner, and won’t suffer from the same problems that have haunted corn ethanol: high prices and heavy land use.


Post image for Oil Speculators Are the New Boogeymen

President Obama and his obedient lap dogs are out in full force this week attempting to convince voters that those evil guys on Wall Street have moved on from destroying the value of their homes to artificially raising the price of gasoline. Soon they are coming for your first born. From one of Obama’s speeches this week:

So today, we’re announcing new steps to strengthen oversight of energy markets.  Things that we can do administratively, we are doing.  And I call on Congress to pass a package of measures to crack down on illegal activity and hold accountable those who manipulate the market for private gain at the expense of millions of working families.  And be specific.

First, Congress should provide immediate funding to put more cops on the beat to monitor activity in energy markets.  This funding would also upgrade technology so that our surveillance and enforcement officers aren’t hamstrung by older and less sophisticated tools than the ones that traders are using.  We should strengthen protections for American consumers, not gut them.  And these markets have expanded significantly.

Now the ability to place blame for rising gasoline prices on Wall Street (or Republicans) is good politics, but its not true. The Center for American Progress report linked to above, chillingly titled “Is Big Oil Rigging Gasoline Prices?” begins by alerting the reader to the fact that the American people, having been polled, believe that Wall Street must be behind the recent rise in gasoline prices. Apparently the average American’s opinion on financial speculation, oligopoly pricing, and their link to gasoline prices is sufficiently meaningful to include in an article not accusing Big Oil of manipulating oil prices, but just putting the question out there. I hastily blogged about that report here, as did the editors of RealClearEnergy.

Obama pulled the exact same stunt last year. He set up some sort of task force/executive agency/working group/etc. to make sure that there isn’t any illegal price manipulation going on. The agency never found anything, and its unclear if they even really did any investigating:

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49 former NASA astronauts and scientists sent a letter to NASA, requesting that they stick to using empirical data to evaluate the effects of carbon dioxide, and to back off the claims of catastrophic climate change. The text of the letter is pasted below:

Dear Charlie,

We, the undersigned, respectfully request that NASA and the Goddard Institute for Space Studies (GISS) refrain from including unproven remarks in public releases and websites. We believe the claims by NASA and GISS, that man-made carbon dioxide is having a catastrophic impact on global climate change are not substantiated, especially when considering thousands of years of empirical data. With hundreds of well-known climate scientists and tens of thousands of other scientists publicly declaring their disbelief in the catastrophic forecasts, coming particularly from the GISS leadership, it is clear that the science is NOT settled.

The unbridled advocacy of CO2 being the major cause of climate change is unbecoming of NASA’s history of making an objective assessment of all available scientific data prior to making decisions or public statements.

As former NASA employees, we feel that NASA’s advocacy of an extreme position, prior to a thorough study of the possible overwhelming impact of natural climate drivers is inappropriate. We request that NASA refrain from including unproven and unsupported remarks in its future releases and websites on this subject. At risk is damage to the exemplary reputation of NASA, NASA’s current or former scientists and employees, and even the reputation of science itself.

For additional information regarding the science behind our concern, we recommend that you contact Harrison Schmitt or Walter Cunningham, or others they can recommend to you.

Thank you for considering this request.

There are an impressive 49 signatories including well-known astronauts such as Walter Cunningham and Charles Duke. Check out the rest of the signatories here. While they don’t mention him by name, the letter signatories most likely take significant issue with the public actions of James Hansen, a well known global warming activist, who recently made the news for his insightful comparison of climate change to slavery.
Indeed, it isn’t at all hard to see the moral similarities between the burning of fossil fuels (which has made the lives of everyone in the world much better off throughout history) with the brutal practice of enslaving individuals, denying their right to life and liberty.
Post image for France Calls for Retreat in E.U. Aviation Emissions Fight

A surprising development from a country not known for backing down from a fight:

In a sign that Paris has little stomach for a fight over global warming, Francois Fillon, the Prime Minister, urged the European Union to retreat over plans to tax airlines for emitting greenhouse gases.

His letter to Jose Manuel Barroso, the European Commission President, undermined the EU’s claims to be united in its drive to impose ecological virtue on the aviation industry. The plan to force airlines to buy pollution permits when flying in European airspace has been denounced as illegal by other capitals, notably Beijing, Delhi and Washington.

The so-called coalition of the unwilling is pledging to retaliate unless Europe backtracks. Chinese and Indian airlines have been told by their governments to boycott the scheme.

Their American counterparts filed a lawsuit before withdrawing it last month and calling on the Obama Administration to take the lead in pressuring Europe to drop its aviation pollution package.

In France, concern has been fuelled by Airbus, the European aircraft maker, which said that China had shelved orders worth $US14 billion ($13.5 billion) because of the dispute.

The company said that officials in China, which represents 20 per cent of Airbus sales, were withholding their signature on contracts for 35 long-haul A330s and 10 A380 superjumbo planes. [click to continue…]

Post image for Environmentalist Infighting: Solar Panels in the Mojave Desert

The Los Angeles Times takes a look at some infighting going on in the environmental movement, with local chapters of large environmental organizations feeling ignored by the large national groups pushing renewable energy projects. This specific controversy concerns a large solar panel project in the Mojave desert in southeastern California. Needless to say, I don’t think a vast array of solar panels should be built in the Mojave desert either, but likely for different reasons than the local environmental groups. Here’s the introduction:

AMARGOSA VALLEY, Calif. — April Sall gazed out at the Mojave Desert flashing past the car window and unreeled a story of frustration and backroom dealings.

Her small California group, the Wildlands Conservancy, wanted to preserve 600,000 acres of the Mojave. The group raised $45 million, bought the land and deeded it to the federal government.

The conservancy intended that the land be protected forever. Instead, 12 years after accepting the largest land gift in American history, the federal government is on the verge of opening 50,000 acres of that bequest to solar development.

Even worse, in Sall’s view, the nation’s largest environmental organizations are scarcely voicing opposition. Their silence leaves the conservancy and a smattering of other small environmental organizations nearly alone in opposing energy development across 33,000 square miles of desert land.

“We got dragged into this because the big groups were standing on the sidelines and we were watching this big conservation legacy practically go under a bulldozer,” said Sall, the organization’s conservation director. “We said, ‘We can’t be silent anymore.’ ” [click to continue…]

Post image for Ethanol Still Not Lowering the Real Cost of Gasoline

In the wake of high gasoline prices, the ethanol industry is making the rounds in Washington, and they want you to believe that the Renewable Fuel Standard has lowered gasoline prices by up to $.89 per gallon. This would be remarkable, if it were true. The ethanol industry relies on a study produced by the Center for Agricultural and Rural Development at the University of Iowa. Here is the abstract:

This report updates the findings in Du and Hayes 2009 by extending the data to December 2010 and concludes that over the sample period from January 2000 to December 2010, the growth in ethanol production reduced wholesale gasoline prices by $0.25 per gallon on average. The Midwest region experienced the biggest impact, with a $0.39/gallon reduction, while the East Coast had the smallest impact at $0.16/gallon. Based on the data of 2010 only, the marginal impacts on gasoline prices are found to be substantially higher given the much higher ethanol production and crude oil prices. The average effect increases to $0.89/gallon and the regional impact ranges from $0.58/gallon in the East Coast to $1.37/gallon in the Midwest. In addition, we report on a related analysis that asks what would happen to US gasoline prices if ethanol production came to an immediate halt. Under a very wide range of parameters, the estimated gasoline price increase would be of historic proportions, ranging from 41% to 92%.

If we go to, we see that as of March 29, 2012 the average nationwide price-spread between E85 and E10 is 14.7%, with E85 costing an average of $3.31/gallon and E10 costing an average of $3.89/gallon. Ethanol has less energy content than gasoline, so a direct price comparison is not appropriate. The generally accepted metric is that E85 must be priced about 28% lower than E10 in order to break even, meaning that the cost per mile driven is equal between E85 and E10. [click to continue…]