Marlo Lewis

Energy In Depth (EID), a project of the Independent Petroleum Association of America, has posted an informative Earth Day Video: U.S. Slashes CO2 Emissions, Thanks to Shale.

The video includes comments from EPA’s Gina McCarthy, the IPCC, the International Energy Agency, and other analysts and policymakers, all of whom credit fracking and shale gas for reducing U.S. carbon dioxide (CO2) emissions to a 20-year low.

Although eco-activists claim CO2-induced climate change is the greatest environmental peril facing humanity, they have only scorn for EID’s call to celebrate fracking on Earth Day.

The NRDC called the video “beyond offensive,” while the green blog EcoWatch said the video was “appalling.”

NRDC offers no argument, so their reaction is just name-calling. EcoWatch says the “remarks and data” from Gina McCarthy, IPCC, etc. are “out of context.” That’s an argument, sort of, but completely baseless. Watch the video and judge for yourself.

Post image for Keystone XL: Does Hatred Blind Peace Prize Winners?

Former President Jimmy Carter and nine other Nobel Peace Prize winners this week called upon President Barack Obama and Secretary of State John Kerry to “do the right thing” and “reject” the Keystone XL Pipeline. The Nobel Laureates’ open letter, published in Politico, is worth reading because it epitomizes the intellectual poverty of the anti-Keystone faction.

Asserting that Obama and Kerry’s stand on Keystone XL will “define” their “legacy” on climate change, the Nobels claim that rejection of the pipeline would (1) “have meaningful and significant impacts in reducing carbon pollution,” (2) “pivot our societies away from fossil fuels and towards smarter, safer and cleaner energy,” and (3) “signal a new course for the world’s largest economy.” Wrong on all counts.

As Cato Institute scientist Chip Knappenberger shows, using an EPA climate model, even under the totally unrealistic scenario that all Keystone crude is additional petroleum that would otherwise not be extracted from Canada’s oil sands, running the pipeline at full capacity for 1,000 years would add less than 1/10th of a degree Celsius to global warming. Climatologically, Keystone XL is irrelevant.

The Nobels might reply that the pipeline’s emissions are not the issue. According to them, Keystone XL is the “linchpin for tar sands [oil] expansion,” hence approving the pipeline would commit the world to a “dangerous” development path while rejecting it would move the world towards a new, cleaner path. Okay, time for a restatement of the obvious.

The U.S. economy is in the midst of a revolution in unconventional oil and gas, and the global appetite for oil and gas is growing by leaps and bounds. These trends are determined by basic economic and technological realities, not by a political decision about one infrastructure project. The Nobels’ conceit that Keystone XL is a “pivot” for the global economy and, thus, for the climate system is a reversion to the magical thinking of children.

The Nobels assert that, “The myth that tar sands development is inevitable and will find its way to market by rail if not pipeline is a red herring.” But alternate delivery via rail is not a myth, it’s a massive and growing reality. Maybe before writing to Secy. Kerry, the Nobels should read the State Department’s Final Supplemental Environmental Impact Statement (FSEIS) on Keystone XL, especially Chapter 4: Market Analysis.

As in the 2011 Final EIS and 2013 Draft Supplemental EIS, State again concludes that “the proposed Project is unlikely to significantly affect the rate of extraction in oil sands areas (based on expected oil prices, oil-sands supply costs, transport costs, and supply-demand scenario).” A big difference, though, is that whereas the 2011 and 2013 reports “discussed the transportation of Canadian crude by rail as a future possibility,” the FSEIS “notes that the transportation of Canadian crude by rail is already occurring in substantial volumes.” Indeed, from January 2011 through November 2013, rail transport of Canadian crude to U.S. refineries increased from practically zero barrels per day (bpd) to 180,000 bpd.

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The completed Keystone XL Pipeline is estimated to have a capacity to deliver 830,000 bpd of crude oil. According to the FSEIS, rail-loading facilities in the Western Canadian Sedimentary Basin (WCSB) are already “estimated to have a capacity of approximately 700,000 bpd of crude oil, and by the end of 2014, this will likely increase to more than 1.1 million bpd.”  [click to continue…]

Post image for Judge Kavanaugh’s Dissent in the EPA Mercury Rule Case: Will the Supreme Court Review EPA’s $9.6 Billion Reg?

Yesterday, the D.C. Circuit Court of Appeals ruled 2-1 to uphold the EPA’s nonsensical Mercury Air Toxics Standards (MATS) Rule. The MATS Rule requires electric utilities to install maximum achievable control technology (MACT) to reduce emissions of mercury and other hazardous air pollutants (HAPs) from coal-fired power plants.

The rule is nonsensical because, as explained below, although one of the most expensive regulations in history (officially estimated at $9.6 billion in 2016), its health benefits are illusory.

In the case, titled White Stallion Energy Center LLC et al. v. EPA et al., Judge Brett Kavanaugh wrote a powerful dissenting opinion, as my colleague William Yeatman noted yesterday. Kavanaugh agreed with industry petitioners that EPA unreasonably excluded cost considerations (economic impacts) when determining whether MACT regulation of power plant HAPs is “appropriate and necessary.”

The two-judge majority partly based their opinion on the Supreme Court’s ruling in Whitman v. American Trucking Ass’ns (2001) that EPA may not take costs into consideration when setting national ambient air quality standards (NAAQS).

Kavanaugh argues the majority ‘misreads’ or ‘over-reads’ Whitman by ignoring a key difference between the Clean Air Act provisions governing NAAQS rulemakings – §108(a) and §109(b) – and the provision addressing potential MACT regulation of power plant HAPs – §112(n)(1)(A).

The NAAQS provisions clearly allow no room for cost considerations. If an air pollutant is emitted by numerous or diverse mobile or stationary sources and the associated air pollution is reasonably anticipated to endanger public health or welfare, then, pursuant to §108(a), EPA must establish NAAQS for those pollutants, and, pursuant to §109(b), the standards must be requisite to protect public health with an adequate margin of safety. Period. End of story.

In contrast, §112(n)(1)(A) requires EPA to study and issue a report on the public health hazards anticipated to occur as a result of power plant HAP emissions, and then apply MACT regulation “if” the Administrator “finds such regulation is appropriate and necessary.” The provision does not define the terms “appropriate” and “necessary.” Common sense suggests that a regulation is “appropriate” if the benefits justify the costs.

Perhaps more importantly, §112 tasks EPA to determine whether MACT regulation of HAPs is “appropriate and necessary” only for “electric steam generating units.” For all other major sources of HAP emissions, EPA has no discretion and is simply required to promulgate MACT regulations. The statute thus seems to contemplate that, in the special case of coal power plants, MACT regulation may not be appropriate even if the associated HAP emissions pose public health hazards. In other words, a less stringent form of Clean Air Act regulation (such as new source performance standards) or state-level regulation might be “appropriate.”

Yeatman opines that Kavanaugh’s dissent may persuade the Supreme Court to review the case. If so, the Court might rule that EPA is allowed or even required to consider costs when determining what is “appropriate” when regulating HAP emissions from power plants. That, in turn, could set the stage for litigation on whether the MATS Rule is too costly to be “appropriate” within the meaning of the statute.

Of course, EPA contends the MATS Rule is a bargain at almost any price, delivering $33 billion to $89 billion in annual health benefits. Litigation reviving public debate on such claims could be a great teaching moment.

Our June 2012 study, All Pain and No Gain, provides a detailed critique of EPA’s MATS Rule health benefit estimates. Below is a summary of key points. [click to continue…]

Post image for Must Read: Walton Francis on the Social Cost of Carbon

Walton Francis, formerly director of regulatory analysis at the Department of Health and Human Services, submitted a sharply critical comment letter to the Office of Management and Budget (OMB) on the Obama administration’s social cost of carbon (SCC) estimates.

Yes, I realize, this isn’t breaking news, but the SCC debate will be with us for years, and, as explained previously on this site, SCC analysis has become a menace to society.

SCC analysis is computer-aided sophistry. By “sophistry,” I mean what Socrates meant by it in Plato’s dialogues. Sophistry is sham wisdom raised to the level of a τέχνη (technê), the Greek word for art, craft, or trade.

The leading rap against the sophists in classical literature is that they “make the weaker argument [defeat/appear to be] the stronger.” That is, sophists use specious arguments to win in courts and public assemblies regardless of the merits of the case or issue in dispute. Turning common sense upside down, they make wrong look right and base look noble.

SCC analysis, similarly, uses sophisticated modeling to make renewable energy look like a bargain at any price and carbon energy look unaffordable no matter how cheap. OMB Circular A-4 on cost-benefit analysis admonishes agencies that “you cannot conduct a good regulatory analysis according to a formula.” SCC analysis is a license to regulate by formula. Grant the premise that carbon has a social cost, and presto, climate activists conclude that taxing and regulating away reliable, plentiful, affordable energy will make the economy more “efficient.” For further discussion, see the free market organizations’ comment letter to OMB on the social cost of carbon.

For those unfamiliar with this debate, the administration’s Interagency Working Group (IWG) has put out two technical support documents on the social cost of carbon (2010 TSD, 2013 TSD). The documents define the social cost of carbon as “an estimate of the monetized damages associated with an incremental increase in carbon dioxide [CO2] emissions in a given year.” Implicit in that definition is another one: The SCC “is the carbon tax that would be imposed by a benevolent social planner.”

The IWG’s 2013 SCC estimates stirred up controversy because they were roughly 60% higher than the 2010 estimates, yet nothing had happened either to the climate system or in climate science to warrant the revision. What did happen is the warming “pause” continued for another three years, the divergence between climate model projections and observed temperatures increased, and scientific research further discredited Al Gore’s doomsday scenarios.

With that as background, let’s review Francis’s comment letter.

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In which region of the world are plants most productive in photosynthesizing water and carbon dioxide into carbohydrates? If you guessed the tropical rain forest, you’d be wrong. The region with the highest gross primary production (GPP) from photosynthesis is the U.S. corn belt.

That is the finding of a new study (Guanter et al. 2014) published in Proceedings of the National Academy of Sciences (PNAS). The team of 20 researchers used satellite-based spectroscopy to monitor sun-induced chlorophyll fluorescence (SIF), an electromagnetic signal emitted as a byproduct of photosynthesis.

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Global map of maximum monthly sun-induced chlorophyll fluorescence (SIF) per 0.5° grid box for 2009.

The results of the study really shouldn’t be surprising. The U.S. leads the world in combined private-public R&D spending on agriculture and is the world’s top corn producer and agricultural exporter. Nonetheless — and this too is not surprising — the corn belt GPP reflected in satellite SIF data substantially exceeds the GPP estimated in carbon cycle models. The researchers report:

Our SIF-based crop GPP estimates are 50–75% higher than results from state-of-the-art carbon cycle models over, for example, the US Corn Belt and the Indo-Gangetic Plain, implying that current models severely underestimate the role of management.

Perhaps to appease the political-correctness guardians at PNAS, the study begins with a warning that “past advances” in agriculture are “threatened by climate change,” and the authors say their research is significant because it provides benchmark data for “more reliable projections of climate impact on crop yields.”

Clearly, though, the finding is also significant for another reason. It doesn’t fit into the fear narrative promoted by the recently-released IPCC Working Group II (WG2) report on climate impacts. Current models “severely underestimate the role of management.” That suggests current models underestimate farmers’ ability to adapt to climate change. [click to continue…]

A new climate study, “Global warming and 21st century drought,” is making waves through the blogosphere. It’s the latest in “worse than we thought” gloom and doom narratives. Authors Benjamin I. Cook and colleagues at the Lamont-Doherty Earth Observatory find that warming will not only decrease precipitation in dry regions but also increase evaporation from soils, causing more drought than previously predicted.

So although the IPCC Working Group I report concluded that, in the 21st century, Atlantic Ocean circulation collapse is “very unlikely,” ice sheet collapse is “exceptionally unlikely,” and catastrophic release of methane from melting permafrost is “very unlikely,” we’re still on eve of destruction.

As summarized in the study’s press release, by 2100 drought could afflict 30% of the Earth’s surface, “crops could wither in multiple regions simultaneously,” and “food price shocks could become far more common.” These results are “consistent with” the latest IPCC report, which “also predicts a strong chance of soil moisture drying in the Mediterranean, southwestern United States and southern African regions.”

The Cook team’s study is “one of the first to use the latest climate simulations to model the effects of both changing rainfall and evaporation rates on future drought.” Well, climate models haven’t exactly performed brilliantly in replicating global temperatures, have they? What do actual climate data and climate history tell us about the relationship between warming and drought?

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Post image for “The idea that climate change poses an existential threat to humankind is laughable” — Prof. Richard Tol

Climate economist Richard Toll has a provocative op-ed in today’s Financial Times titled “Bogus prophesies of doom will not fix the climate.” Last week, Tol accused the IPCC of being too alarmist about global warming and asked to have his name withdrawn from its recently-released Working Group II report (WG2) on climate change impacts.

Public discourse on climate change would be much improved if every discussion — for example, Secy. of State John Kerry’s climate speech in Jakarta, Indonesia — began with a reading of Tol’s opening paragraph:

Humans are a tough and adaptable species. People live on the equator and in the Arctic, in the desert and in the rainforest. We survived ice ages with primitive technologies. The idea that climate change poses an existential threat to humankind is laughable.

Even if one accepts WG2′s estimate that a “further warming of 2°C could cause loses equivalent to 0.2-2 per cent of world gross domestic product,” that is “about as bad as losing one year of economic growth” in half a century, Tol notes. In contrast, since the start of the Eurozone financial crisis, the income of the average Greek has fallen more than 20%. “Climate change is not, then, the biggest problem facing humankind.”

After noting that climate change is not even the biggest environmental problem (indoor air pollution has killed 260 million people — more than all the wars of the 20th century combined, Bjorn Lomborg estimates), Tol points out that the best protection from climate-related risk is economic growth and the institutions that facilitate it:

Climate change will make the disease [malaria] worse. Economic growth will make it go away.

In the worst case, climate change could cut crop yields in Africa in half. Yet yields would increase tenfold — in the same climate, on the same soil — if subsistence farmers started using crops and techniques pioneered on experimental farms. Climate change may be a big issue in Africa. But it is not nearly as important as lack of tenure, poor roads, roving warlords and so on.

Tol agrees with the IPCC that “We cannot let the planet grow warmer and warmer,” but solving that problem must wait until “carbon neutral technologies saturate the market,” which “will take decades at least.”

I don’t share Tol’s faith in the ability of government-directed “adaptation and development” to “improve lives.” But his contention that the IPCC’s “prophecies of doom” are false and divert public attention and resources from more urgent threats is spot on.

Post image for WTO Rules against China’s Export Restrictions: Implications for U.S. NatGas Export Debate

The World Trade Organization (WTO) confirmed Wednesday that China’s policies restricting exports of rare-earth minerals violate global trade rules. According to the Wall Street Journal:

The WTO said China’s export duties on rare-earth metals, molybdenum and tungsten are inconsistent with its obligations in the organization. It also ruled against Beijing’s export quotas on the materials and its move to restrict their trade.

China has said the restrictions are in place for reasons of environmental protection. The WTO ruling says those aren’t valid reasons for limiting exports.

The WTO ruling casts doubt on the legality of the current process for approving exports of liquefied natural gas (LNG). By compelling aspiring exporters to run a long and unpredictable bureaucratic and political gauntlet, the existing process informally but effectively constrains gas exports.

More importantly, in light of the WTO ruling, the quantitative restrictions on LNG exports advocated by Dow Chemical, America’s Energy Advantage (AEA), and the American Public Gas Association (APGA) are plainly illegal.

On Tuesday, the House Energy & Commerce Committee heard testimony on trade law and LNG exports from former congressman James Bacchus (D-Fla.), who now chairs the Global Practice at GreenbergTraurig.

The hearing was on H.R. 6, the Domestic Prosperity and Global Freedom Act, introduced by Rep. Cory Gardner (R-Colo.). H.R. 6 would amend the 1938 Natural Gas Act to provide that applications to export LNG to any WTO-member country be “granted without modification or delay.”

Witnesses debated whether H.R. 6 would help or harm U.S. manufacturers and consumers, and whether the legislation would undermine Russia’s monopoly power to coerce Ukraine and other countries dependent on Russia for most or all of their gas.

A future post may examine the back-and-forth on those issues. Here I’m going to excerpt passages from Bacchus’s testimony and offer some brief comments. Bacchus’s remarks are indented in blue.

Largely overlooked so far in the emerging Congressional debate about restricting exports of natural gas is the possibility that such restrictions are inconsistent with the obligations of the United States to other WTO Members under the WTO treaty. If our restrictive energy measures are inconsistent with our treaty obligations, the United States risks losing a case in the WTO. Such a loss could cause the WTO to authorize expensive economic sanctions against us through the loss of previously granted concessions in other sectors of our international trade.

Comment: It’s not surprising proponents of LNG export restrictions ignore the incompatibility of their agenda with global trade rules. They also ignore the incompatibility of their agenda with property rights and the constitutional principle of equality under law. Even though Dow, AEA, and APGA didn’t invest a dime to find and produce the gas, they fancy themselves entitled to determine who gets to buy the gas and at what price. [click to continue…]

Post image for Do Skeptics ‘Reposition’ Warming as ‘Theory’ or Do Alarmists ‘Reposition’ Fear as ‘Fact’? Revisiting an Urban Legend

How many times have you heard climate activists claim skeptics are just latter-day “tobacco scientists?” Google “tobacco scientists” and “global warming,” and you’ll get about 1,110,000 results. With so much (ahem) smoke, surely there must be some fire, right?

Al Gore helped popularize this endlessly repeated allegation. In An Inconvenient Truth (p. 263), he contends that just as tobacco companies cynically funded corrupt scientists to cast doubt on the Surgeon General’s report linking cigarette smoking to cancer, so fossil fuel companies fund “skeptics” to create the appearance of scientific controversy where none exists.

Here’s the pertinent passage:

The misconception that there is serious disagreement among scientists about global warming is actually an illusion that has been deliberately fostered by a relatively small but extremely well-funded cadre of special interests, including Exxon Mobil and a few other oil, coal, and utilities companies. These companies want to prevent any new policies that would interfere with their current business plans that rely on the massive unrestrained dumping of global warming pollution into the Earth’s atmosphere every hour of every day.

One of the internal memos prepared by this group to guide the employees they hired to run their disinformation campaign was discovered by the Pulitzer Prize-winning reporter Ross Gelbspan. Here was the group’s stated objective: to “reposition global warming as theory, rather than fact.”

This technique has been used before. The tobacco industry, 40 years ago, reacted to the historic Surgeon General’s report linking cigarette smoking to lung cancer and other lung diseases by organizing a similar disinformation campaign. 

One of their memos, prepared in the 1960s, was recently uncovered during one of the lawsuits against the tobacco companies in behalf of the millions of people who have been killed by their product. It is interesting to read it 40 years later in the context of the global warming campaign:

“Doubt is our product, since it is the best means of competing with the ‘body of fact’ that exists in the mind of the general public. It is also the means of establishing controversy.” Brown and Williamson Tobacco Company memo, 1960s

There’s just one problem with this tale of corruption and intrigue — much of it is false and all of it is misleading. Let’s examine the flaws in this urban legend, going from minor to major.

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Post image for Would Keystone XL Serve the U.S. National Interest?

Would the Keystone XL Pipeline (KXL) serve the U.S. national interest? If the State Department answers that question in the affirmative, TransCanada Corporation can finally begin building the pipeline, more than five and a half years after originally applying for a construction permit.

TransCanada recently submitted comments to State making the case for an affirmative “national interest determination” (NID). The comments are clear, comprehensive, accurate, and, in my opinion, compelling.

Inspired by those comments, I will attempt here to state the common sense of the issue in my own words.

The interminable controversy over the KXL is stunningly pointless. Do modern commerce and transport chiefly run on petroleum-based products? Yes. Are pipelines the most economic, efficient, and safe way to transport large volumes of petroleum? Yes. Is Canada our closest ally and biggest trading partner? Yes. Is Canada already the largest single source of U.S. petroleum imports? Yes. Would building the KXL enhance the efficiency of oil transport from Canada to U.S. markets? Yes. Would building the KXL support tens of thousands of American jobs and add billions to the GDP during the construction period? Yes. Would all the financing be private and not cost taxpayers a dime? Yes.

So how could building the KXL not be in U.S. national interest?

In 2012, TransCanada sought permission to build the “Gulf Coast Project” (the green line in the map below), the southern leg of the 1,700 mile pipeline it originally proposed to build from Hardisty, Canada to Port Arthur, Texas. State environmental agencies and the U.S. Army Corps of Engineers granted all necessary permits for the Gulf Coast Project by August 2012.

Keystone XL Pipeline Gulf Coast Route, State Department Final EIS 2014

Construction began in August 2012 and the project commenced commercial service in January 2014. The earth did not shake, the sky didn’t fall, no one felt a “disturbance in the Force . . . as if millions of voices suddenly cried out in terror and were suddenly silenced.” [click to continue…]