Marlo Lewis

Last night’s State of the Union Address shows that President Obama learned only one lesson from the failure that was Copenhagen, the farce that was Cancun, the death of cap-and-trade, and the “slaughter” of House Democrats who voted for Waxman-Markey. Namely, dissemble, repackage Kyotoism in new verbiage, and press on with an agenda that voters rejected in November.

Anyone paying attention to Obama EPA’s campaign to ‘legislate’ climate policy through the regulatory backdoor would expect as much. But — true confession — I was surprised when Obama proposed to restructure the U.S. electric power sector along the lines contemplated by H.R. 2454, the American Clean Energy and Security Act of 2009 (ACESA), the infamous Waxman-Markey cap-and-trade bill.

In his SOTU speech, President Obama said:

Now, clean energy breakthroughs will only translate into clean energy jobs if businesses know there will be a market for what they’re selling. So tonight, I challenge you to join me in setting a new goal: By 2035, 80 percent of America’s electricity will come from clean energy sources. (Applause.)

Some folks want wind and solar. Others want nuclear, clean coal and natural gas. To meet this goal, we will need them all — and I urge Democrats and Republicans to work together to make it happen. (Applause.)

Upon hearing those words, I wondered: How does Obama’s 80% ‘clean energy’ target compare with the projected electric power sector fuel mix under Waxman-Markey?

The U.S. Energy Information (EIA) analyzed the energy market and economic impacts of H.R. 2454 under various “cases” based on different assumptions regarding the cost and performance of new technologies, the availability of “offsets” (credits for contributing to emission reductions abroad or in non-capped domestic industries), and the like.

Let’s stick with the “Basic Case,” which assumes (perhaps unrealistically) that low-emission technologies including nuclear, renewables, and carbon capture and storage (CCS) — a.k.a. “clean coal” — “are developed and deployed on a large scale in a timeframe consistent with the emissions reduction requirements of ACESA without encountering any major obstacles,” such as high cost. This procedure makes sense, because Obama’s proposal also assumes that nuclear, renewables, and CCS can be affordably scaled up over the next two decades.

Under EIA’s Basic Case (lines 1264-1272 of the Excel Spreadsheet), Waxman-Markey would change the mix of fuels used to generate U.S. electricity as follows:

The category “Other” is an assortment of ‘clean’ and ‘unclean’ fuel types, it’s tiny and doesn’t change much under Waxkey, so let’s ignore it. That leaves 4120 bkwh as total generation in 2010 and 4670 bkwh in 2030. The share of ‘clean’ fuels (natural gas, nuclear, renewable) is 51% in 2010, increasing to 70% in 2030.

EIA’s Basic Case also projects that coal with CCS will generate 513 bkwh by 2030 (p. 22). So electricity from all ‘clean’ sources is projected to reach 3786 bkwh in 2030, or 81% of total generation. Bingo!

Okay, Obama’s goal is 80% by 2035, not 81% by 2030, but it’s close enough for gomn’t work. In effect, Obama last night asked Congress to enact the Waxman-Markey emission-reduction target for the electric power sector.

When Obama was a presidential candidate, he acknowledged that under cap-and-trade, U.S. electric rates would “necessarily skyrocket.” He never said this again, but once the public understood that cap-and-trade would impose a stealth energy tax on the economy in the midst of a deep recession, they turned against it in droves.

Obama, however, never abandoned the big-government agenda of which cap-and-trade was an expression. The day after Election Day, he told the Washington press corps: “Cap and trade was just one way of skinning the cat; it was not the only way.  It was a means, not an end.  And I’m going to be looking for other means to address this problem.”

Well, now we know what other means besides EPA ‘lawmaking’ he intends to employ. The good news is this ploy is not going to work. As soon as Tea Party activists recognize the clean energy mandate for the de-facto energy tax/Waxman-Markey knockoff that it is, it’s toast.

Imagine if President Obama had said last night:  

I challenge you to join me in setting a new goal: By 2035, 80 percent of America’s electricity will come from clean energy sources. This will restructure the electric power sector the same way Waxman-Markey would have if Congress had passed it. It will also cause your electric rates to necessarily skyrocket. As I’ve said before, there’s more than one way to skin a cat.

Such candor would not have won applause.

In today’s New York Times (Jan. 25, 2011), reporter Tom Zeller, Jr. reviews Alternative Fuels for Military Applications, a study by the RAND Corporation. He doesn’t mince words:

The United States would derive no meaningful military benefit from increased use of alternative fuels to power its jets, ships and other weapons systems, according to a government-commissioned study by the RAND Corporation scheduled for release Tuesday.

Well, that’s actually pretty obvious. Nobody argues that jets run better on fuel blended with liquids derived from animal waste, seed plants, or algae. Nor do defense planners worry that oil supply disruptions would force the U.S. military to mothball aircraft, ships, or other weapons platforms for lack of home-grown biofuel.

The RAND study [p. 12] goes further:

Ethanol and biodiesel are unsuitable for use in weapon systems. They pose a severe safety risk, reduce performance, unduly complicate fuel delivery and storage, and generate maintenance problems.

The bigger problem, though, as Zeller puts it, is that “most alternative-fuel technologies [are] unproven, too expensive or too far from commercial scale to meet the military’s needs over the next decade.”

This is not exactly the message one hears from top military brass. For example, on Earth Day 2010, Navy Secretary Ray Mablus crowed about the Navy’s experimentation with jet fuel blended from petroleum and camelina (a non-edible plant). Mablus neglected to mention the cost: $65 per gallon — about 30 times more expensive than commercial aviation fuel. (For more details, see “Bio Jet Fuel: the Real $600 Toilet Seat?“) 

The U.S. Armed Forces, or at least the Navy and Air Force, may be too bullish on biofuels to give the RAND report a fair shake. Too bad for us taxpayers. The Air Force, says RAND, “aims to be prepared by 2016 to acquire amounts of alternative fuel blends sufficient to meet 50 percent of its domestic requirements for aviation fuel. Air Force policy clearly specifies that this must be done in a manner that is cost-competitive and emits fewer greenhouse gases than fuels produced from conventional petroleum. Moreover, the alternative fuel component of the blend must be derived from domestic sources.”

Similarly, RAND reports, “In October 2009, Navy Secretary Ray Mabus committed the Navy and Marine Corps to “creating a Green Strike Group composed of nuclear vessels and ships powered by biofuels” by 2012 and deploying it by 2016. By 2020, at least 50 percent of the energy the Navy consumes is to come from alternative sources.”

These goals probably won’t be met, and can’t be met at reasonable cost: “It is highly uncertain whether appreciable amounts of hydrotreated renewable oils [alternative fuels derived from animal fats, waste, and vegetable matter] can be affordably and cleanly produced within the United States or abroad.” RAND estimates [p. xii] that the “available supply” of animal fats and waste oils “will likely limit production to no more than 30,000 barrels per day.” For perspective, the Department of Defense consumes about 337,000 barrels per day (bpd) of petroleum-based fuel [p. 6]; the U.S. economy consumes about 19 million bpd of petroleum-based fuel.

Similarly, “uncertainties remain” regarding the “commercial viability” of military fuels derived from seed plants:

Jatropha and camelina are often mentioned as ideal plants to meet these requirements, but there exists little evidence to back these claims. Even if low-greenhouse-gas approaches can be established and verified, total fuel production is likely to be limited. Producing just 200,000 barrels per day (about 1 percent of U.S. petroleum consumption) would require an area equal to about 10 percent of the croplands currently under cultivation in the United States. [p. xii]

Many tout algae-based biofuel as the next big thing. However, “Because all methods for liquid fuel production from algae are at early stages of development, lifecycle greenhouse gas emissions for commercially produced algae-derived fuels remain uncertain.” [p. 30] In addition, “the commercial prospects of this approach remain highly uncertain.” [p. 78]

The RAND study concludes:

Considering (1) the very limited production potential for fuels derived from animal fats and waste oils, (2) the highly uncertain prospects for affordable, lowgreenhouse-
gas fuels derived from seed crops, and (3) the early development status of algae-based concepts, hydrotreated renewable oils do not constitute a credible, climatefriendly
option for meeting an appreciable fraction of military fuel needs over the next decade. Because of limited production potential, fuels derived from animal fats, waste
oils, and seed oils will never have a significant role in the larger domestic commercial marketplace. Algae-derived fuels might, but technology development challenges suggest
that algae-derived fuels will not constitute an important fraction of the commercial fuel market until well beyond the next decade.

On December 23, 2010, one day before the Yuletide season when Members of Congress, the media, and Tea Party activists are least likely to watchdog the federal bureaucracy, the U.S. Environmental Protection Agency (EPA) announced rulemakings to establish New Source Performance Standards (NSPS) for greenhouse gas (GHG) emissions from power plants and refineries. Or maybe “whispered” would be more accurate.

If you didn’t read the text of EPA’s press release and just skimmed the headline, you would not know the agency had just launched the next phase of its greenhouse gas regulatory program. The release carried this bland and uninformative title:  “EPA to Set Modest Pace for Greenhouse Gas Standards/Agency stresses flexibility and public input in developing cost-effective and protective GHG standards for largest emitters.”

Then on Dec. 30, with public attention still diverted by holiday celebration, EPA published two proposed settlement agreements in the Federal Register outlining the agency’s plans to establish GHG performance standards for utility steam electric generating units and petroleum refineries. The proposed agreements are between EPA and a gaggle of State, municipal, and environmental litigants.

In a recent (Jan. 19, 2011) Alert, VanNess Feldman, a law firm specializing in environmental issues, explains the significance of this under-reported development:

These new regulations have potentially broader reach and impact than the New Source Review (NSR) greenhouse gas rules that became effective on January 2, 2011 under the “Tailoring Rule” timetable. Most notably, the NSPS, notwithstanding their name, can reach not only new and modified facilities but also existing facilities.

Unlike NSR “best available control technology” (BACT) standards, which are determined on a case-by-case basis for each new or modified “major emitting facility,” NSPS standards apply in advance to all new or modified major emitters within specific industrial categories. What’s more, as the Alert explains, EPA working with State environmental agencies can apply NSPS to existing, non-modified sources.

The Clean Air Act’s NSPS provisions—which require EPA to set industry-specific performance standards for facilities that emit significant quantities of certain air pollutants—include separate tracks for new and modified facilities (section 111(b)) and existing facilities (section 111(d)). Under section 111(b), EPA directly establishes NSPS for new and modified facilities. Section 111(d), by contrast, establishes a cooperative federal-state process under which EPA first establishes “emissions guidelines” for facilities in the relevant category.

These guidelines are then translated by states into enforceable performance standards for facilities within their boundaries. States may apply less stringent standards or longer compliance schedules if they demonstrate that following the federal guidelines is unreasonably cost-prohibitive, physically impossible, or that there are other factors that reasonably preclude meeting the guidelines. States may also impose more stringent standards or shorter compliance schedules in appropriate cases.

EPA, in cahoots with the usual pro-Kyoto State attorneys general and eco-litigation groups, is engaged in an end-run around democracy. The Clean Air Act was enacted in 1970, years before global warming was even a gleam in Al Gore’s eye. The statute does not even mention “greenhouse gases” or the “greenhouse effect.” The Act as amended in 1990 does include the terms “carbon dioxide” and “global warming potential” — but only in the context of non-regulatory provisions, and in each instance followed by a caveat instructing EPA not to jump to regulatory conclusions. That admonitory language would have no legal effect, and would have been pointless for Congress to include, if, as the Supreme Court mistakenly opined in Massachusetts v. EPA, the agency has separate authority under other provisions to ‘enact’ regulatory global warming policy.

The longer Congress tolerates this usurpation of legislative power, the harder it will be to stop, because firms that spend millions of dollars to comply with a regulation may gain little from its repeal. They may even acquire a vested interest in preserving the rule as a barrier to entry if it hobbles upstarts less able to bear the expense. Moreover, the proposed rulemakings are just step one of a broader campaign to establish GHG performance standards for numerous industrial categories such as steel plants, cement production facilities, and paper mills.

Things are moving swiftly. Under the proposed settlement agreements, EPA will propose NSPS rules for power plants by July 26, 2011 and finalize them by May 26, 2012, and propose NSPS rules for refineries by December 10, 2011, and finalize them by November 10, 2012. If the Tea Party Congress means to stop EPA from Kyotoizing America, it must do so in the very near future.

During the past two millennia and more, Europe suffered during cooler, drier periods and flourished during warmer, wetter periods. That’s what any attentive reader will infer from “2500 Years of European Climate Variability and Human Susceptibility,” a study published in ScienceExpress by Swiss researcher Ulf Büntgen and 11 U.S. and European colleagues.

The study, based on the most extensive collection of proxy data from European tree ring samples ever assembled, confirms what Thomas Gale Moore of the Hoover Institution concluded in his 1998 book, Climate of Fear, namely, “happiness is a warm planet.” However, the Büntgen team leave that at the level of implication.

Indeed, the study includes politically-correct statements that are either gratuitous or intended to placate the Gorethodox. The study’s Abstract, for example, states that “Recent warming is unprecedented.” There’s no discussion of this point in the text, and the authors certainly do not attempt to derive it from or validate it with their proxy data. The study ends with what can only be described as political sermonizing:

Linking palaeo-demographic to climate proxy data challenges recent political and fiscal reluctance to mitigate projected global climate change, which reflects the common societal belief that civilizations are insulated from variations in the natural environment. The historical association between European precipitation and temperature variation, population migration and settlement desertion, however, questions the wisdom of this attitude.

Maybe mouthing pious platitudes is what scientists have to do these days to get published in prestige journals like ScienceExpress. No matter. The results of the study speak for themselves.

In a nutshell, periods of warmer temperatures and greater precipitation (the Roman Empire up to 250 A.D., aka the Roman Warm Period; Europe during 800-1200 A.D., aka the Medieval Warm Period) were also periods improved human health, prosperity, and political stability. Conversely, periods of colder temperatures and less precipitation (Europe during 250-550 A.D., aka the Dark Ages Cold Period; Europe during 1300-1700 A.D., aka the Little Ice Age) were marked by famine, plague, population displacement, and political instability.

The BP oil spill may well be the worst environmental disaster in history. Yet it was not the planetary catastrophe some predicted it would be.

In May 2010, experts warned that the Deep Water Horizon rig blowout would cause “irreversible damage to the marine eco-systems of the Gulf of Mexico, north Atlantic Ocean, and beyond.”

 But a surprising thing happened on the way to the apocalypse. Bacteria gobbled up the oil so fast that by August, the underwater oil plume became “undetectable.”

A study published last week in ScienceExpress reports that bacteria also made short work of the massive volumes of methane (natural gas) released when the BP well exploded. This is good news not only for Gulf Coast eco-systems. It also further undercuts the credibility of a popular global warming doomsday scenario.

Some warmists warn that rising ocean temperatures will melt frozon methane crystals (known as “clathrates”) on the deep ocean floor.

Methane is a potent greenhouse gas. So the fear is that warming will cause even more warming, leading to a runaway greenhouse effect. However, if this scenario were realistic, we would expect ice core data to indicate higher-than-present atmosopheric methane concentrations during the Last Interglacial Period, when the Arctic region, for centuries to thousands of years, was substantially warmer than it is today. Instead, the data indicate that current methane concentrations are 130% higher (due to man-made emissions, not clathrate melting) than at any time during the past 650,000 years.

Apparently, then, clathrates were not much affected by the greater warmth of the Last Interglacial. Or maybe they were but, as in the case of the BP blowout, the sea bugs digested the methane before it reached the surface.

Our resilient Earth — is this a great planet, or what?

The end of the month (Jan. 31) is the deadline for submitting comments on EPA and the National Highway Traffic Safety Administration’s (NHTSA’s) joint proposed rule to establish first-ever greenhouse gas/fuel economy standards for diesel trucks and other heavy-duty (HD) vehicles. When finalized, the rule will substantially increase both agencies’ power over the freight goods industry.

The agencies’ chief rationale for the proposal is that the fuel economy of HD vehicles, especially “combination tractors,” the semi-trucks used in long-haul freight, has not improved in recent years or even declined. This is paradoxical, because nobody has a greater incentive to demand cost-effective improvements in fuel economy than people who haul freight for a living.

EPA and NHSTA offer five “potential hypotheses” to explain the “paradox” of “under-investment” in HD vehicle fuel economy. As I explain here, none of the hypotheses demonstrates a market failure and two suggest that truckers are just behaving like prudent buyers. In two other posts (here and here), I develop an alternate hypothesis: EPA’s diesel-engine emission standards, via their impacts on engine performance and the HD vehicle market, caused the very problem the agencies now propose to solve with more regulation.

I am now pleased to share additional evidence supporting my hypothesis.

In March 2010, Kevin Jones, a reporter for The Trucker magazine, interviewed Daimler Trucks North America President and CEO Martin Daum at the Louisville, Ky. Mid-America Trucking Show.  Daum told Jones that EPA’s emission standards added $20,000 to the cost of an 18-wheeler over the previous six years. That’s a substantial chunk of change truckers don’t have to spend on vehicles with better fuel economy.

Daum draws a distinction between “push innovations” (changes compelled by regulation) and “pull innovations” (changes driven by market demand). This too speaks to a point made in the earlier posts. To comply with EPA rules, engine manufacturers had to spend hundreds of millions of dollars and deploy hundreds of engineers to develop emission-control technologies rather than fuel-saving technologies. “Push innovations” crowded out “pull innovations.”

ECON 101 also tells us that as price increases, demand falls (other things being equal). Consequently, even if newer trucks were more fuel efficient, the $20k cost increase imposed by EPA’s emission standards would discourage truckers from buying those vehicles.

In fact, however, as earlier posts discuss, newer vehicles typically get fewer miles per gallon, because emission-control technologies decrease the fuel efficiency of diesel engines. A Wall Street Journal article from April 2007,  by Robert Guy Matthews, sheds light on this point:

A requirement that newly manufactured diesel trucks spew out less soot starting this year is posing a paradox for truck fleets: These new-generation trucks are cleaner than older-generation vehicles, but they get worse mileage.

With emission standards to get even tougher in 2010, truck-fleet owners are seeking changes to other rules, to help improve efficiency. Some are lobbying for the go-ahead to hitch up longer trailers, while others are pushing requirements for manufacturers to make engines offering a certain minimum mileage.

Previous-generation trucks average about nine or 10 miles to each gallon of diesel fuel. New engines designed to meet the more-stringent federal mandate on truck exhaust get about one mile less to the gallon. That may not seem like much, but it all adds up for large fleet owners that operate trucks crisscrossing the country.

“For every additional mile-per-gallon lost, it costs us about $10 million in [total annual] fuel costs” said YRC Worldwide Chief Executive Bill Zollars. YRC is one of the largest transportation providers in the country, operating a fleet of 20,000 trucks. . . .

Freightliner LLC, the largest heavy-duty truck maker in North America, confirmed that some loss of fuel economy was inevitable for engines to comply with the new standards. Certain parts of the engine must run at a higher temperature to burn off pollutants, and that requires more fuel.

A few pieces of this puzzle still elude me. How much did engine manufacturers actually spend since 2000 to comply with EPA’s emission standards? A March 2004 Government Accountability Office report (p. 12 ) indicates that the total could easily exceed $1 billion. What was the actual cost? More importantly perhaps, what was the actual expenditure as a percentage of total diesel-engine manufacturer R&D? Any information, tips, or leads regarding these matters would be greatly appreciated.

In his 2006 State of the Union Address, President George W. Bush joined the chorus of environmental scolds in disparaging America’s spaciously mobile civilization as being “addicted to oil” and called for various R&D programs to move us beyond petroleum. A key objective was to commercialize so-called cellulosic ethanol made from prairie grasses, wood waste, and other fibrous plant materials. Bush proclaimed:

We will also fund additional research in cutting-edge methods of producing ethanol, not just from corn but from wood chips and stalks or switch grass. Our goal is to make this new kind of ethanol practical and competitive within six years.

Responding to this presidential initiative, Congress, in 2007, enacted a Soviet-style production quota for renewable fuels, commonly known as the ethanol mandate. It required refiners to blend and sell 100 million gallons of cellulosic ethanol in 2010 and 250 million gallons in 2011.

Commercial output was so anemic, however, that last year EPA watered down the 2010 cellulosic target to 5 million gallons and the 2011 target to 6.6 million gallons. And even those essentially symbolic targets are too ambitious.

Today’s Climatewire (subscription required) reports that commercial blending of cellulosic biofuel likely did not exceed 1 million gallons in 2010. And what about 2011 — six years after President Bush announced his goal to make cellulosic fuel “practical and competitive within six years”? The Energy Information Administration’s most optimistic scenario projects the sale of less than 4 million gallons this year.

Although a world beyond petroleum may emerge some day, it is today still a pipedream.

Jonathan Pershing, State Department deputy special envoy for climate change and top U.S. negotiator at the Copenhagen (2009) and Cancun (2010) climate conferences, says the Kyoto Protocol “didn’t work,”  Politico reports. Pershing explained:

Under Kyoto, which is the old model, emissions between 1990 and 2007, from [carbon dioxide], climbed on the order of 40 percent. So, if you think that that was a successful model, then you should think again. It didn’t work.

The Politico article continues:

Noting that the Kyoto Protocol was never ratified in the U.S., Pershing said that despite its popularity abroad, “it is equally clear that the structures of Kyoto would not work for us.

“It is clear that it would not work politically; we couldn’t move forward under that framework,” he added. “We need a different process.”

Agreed. But what does that tell us about the Obama administration’s core approach — impose CO2 controls via EPA regulation under the aegis of the Clean Air Act? The only reason that “works” politically, or seems to, is that it bypasses Congress and the legislative process entirely.

U.S. rejection of the failed Kyoto “model” doesn’t have much point if EPA can ignore the people’s representatives and ‘enact’ an even riskier regulatory scheme. Republicans and centrist Democrats in the 112th Congress should take courage from the defeat of Kyoto and Waxman-Markey and stand up to EPA’s attempt to ‘legislate’ climate policy.