Myron Ebell

Buffett’s Support Signals Movement on Keystone Pipeline

by Myron Ebell on May 14, 2012

in Blog, Features

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The House and Senate conference committee on re-authorizing the highway bill met for the first time on Tuesday, 8th May.  One of the most contentious issues is House language that would require permitting of the 1700-mile Keystone XL pipeline from Alberta’s oil sands to Gulf refineries. Initial reactions were that the Keystone provision has little chance of being included in the final conference report.  However, there are signs that the ground is shifting.

Representative John Mica (R-Fla.), Chairman of the House Transportation and Infrastructure Committee, said last Thursday that he thought the Keystone provision was making great progress toward being included in the final bill. Mica noted that eleven Democratic Senators and 69 Democratic House members (out of 190) have recently voted for permitting the pipeline.

Perhaps more importantly, billionaire investor Warren Buffett told Fox Business News last week that he supports building the Keystone XL Pipeline. Buffett is a close supporter of President Barack Obama.  It has been speculated that Buffett was one of those advising Obama to deny the Keystone permit last fall out of self interest.  Buffett’s Berkshire Hathaway owns the Burlington Northern Santa Fe Railroad, which because of the lack of pipeline capacity has become a major shipper of crude oil from the Bakken Formation in North Dakota and Montana to refineries.  The Keystone XL would transport oil from the Bakken Formation as well as from Alberta’s oil sands.

Buffett may well have been offering his own opinion without consulting the White House first.  On the other hand, his comments may be a sign that the White House is maneuvering to save face and let the Keystone permit go through.  President Obama’s political advisers clearly understand that the President is on the wrong side of public opinion on Keystone.  Letting the Congress overrule the President this summer would largely take away a campaign issue in the fall.

Fossil Fuel Shill Sierra Club Bites the Hand That Fed It

by Myron Ebell on May 7, 2012

in Blog, Features

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National Journal’s Amy Harder reported last week that the Sierra Club is re-branding its anti-natural gas efforts as “Beyond Natural Gas.”  Beyond Natural Gas joins the Sierra Club’s other two anti-energy campaigns, Beyond Coal and Beyond Oil (Beyond Nuclear is a separate organization founded in 2007 and headquartered in Takoma Park, Maryland, which has been an official nuclear-free zone since 1983).

Here’s how the Sierra Club introduces its Beyond Natural Gas web page: “The natural gas industry is dirty, dangerous, and running amok. Government loopholes exempt natural gas drillers from the Clean Air Act, the Clean Water Act, and the Safe Drinking Water Act — and at the same time, don’t require them to disclose the frequently toxic chemicals they use in hydraulic fracturing, or “fracking,” the violent process they employ to dislodge gas deposits from shalerock formations. The closer we look at natural gas, the dirtier it appears; and the less of it we burn, the better off we will be.”

The Sierra Club’s timing, whether intentionally or not, kicks Aubrey McClendon, their former patron, when he is down.  Time Magazine reported earlier this year that McClendon gave the Sierra Club $26 million between 2007 and 2010 for their Beyond Coal campaign.  This week McClendon was relieved of his duties as chairman of one of the U. S.’s largest natural gas producers, Chesapeake Energy, although he remains CEO.  It also became public knowledge last week that the Securities and Exchange Commission has launched an investigation into McClendon and Chesapeake.

The SEC investigation and the decision by Chesapeake’s board to replace McClendon as chairman are the result of revelations by Reuters on 18th April that McClendon, the founder of Chesapeake, had a sweetheart deal with the company to borrow over $1 billion and use it to buy personal shares in Chesapeake gas wells.

White House Press Secretary Makes Bizarre, Jingoistic Comments about Keystone XL

by Myron Ebell on April 21, 2012

in Blog, Features

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The House of Representatives voted overwhelmingly this week for a bill, H. R. 4348, to extend the highway bill for another ninety days after the current extension expires at the end of June.  The final vote was 293 to 127, with 69 Democrats voting for passage.  The extension includes three energy and environmental riders, including Rep. Lee Terry’s (R-Neb.) provision to require permitting the Keystone XL pipeline.  Also included are Rep. David McKinley’s (R-WV) amendment to prevent EPA from regulating coal ash as a hazardous waste and Rep. Reid Ribble’s (R-Wisc.) amendment that would expedite environmental reviews of highway construction projects.

The House bill will now be conferenced with the highway bill passed earlier by the Senate.  White House press secretary Jay Carney made some extraordinary statements about the Keystone provision on Friday. According to the Hill, Carney said that permitting the 1700-mile pipeline from Alberta’s oil sands to refineries on the Gulf coast would be “preemptively sacrificing American sovereignty” and that it would be “a foreign pipeline built by a foreign company emanating from foreign territory to cross U. S. borders.”

Carney also said that Rep. Terry’s amendment had been added to the highway bill in a “highly politicized, highly partisan way.” That is odd, considering that increasing numbers of Democrats in the House support overriding President Obama’s opposition to permitting the pipeline.  One supporter is Rep. Steny Hoyer (D-Md.), the Democratic Whip.  The Senate narrowly defeated an amendment to permit the pipeline last month on a 56 to 42 vote (with 60 required for passage).  Eleven Democrats voted for the amendment.  That’s about as bi-partisan as the Senate gets these days.

Senate Majority Leader Harry Reid (D-Nev.) reacted to the House vote by saying that the Senate had clearly rejected permitting the Keystone pipeline and would not agree to the House language in conference committee.  But the New York Times noticed in a news article that Democratic support for President Obama’s obstructionism was clearly crumbling in the face of public support for the pipeline and the November elections.

This Week in the Congress

by Myron Ebell on April 1, 2012

in Blog

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Senate Again Votes Against Renewing Wind Subsidies

The Senate voted this week not to invoke cloture and proceed to a final vote on Senator Robert Menendez’s bill, S. 2204, that would repeal tax subsidies (of around $4 billion per year) and standard business deductions (of around $20 billion a year) for the five biggest oil companies and extend tax subsidies for a variety of renewable energy sources and energy efficiency technologies, including the production tax credit for wind power.

The vote was 51 to 47, with 60 votes required to invoke cloture. Forty-nine Democrats and two Republicans—Senators Olympia Snowe (R-Me.) and Susan Collins (R-Me.)—voted for cloture. Forty-five Republicans and four Democrats—Senators James Webb (D-Va.), Mary Landrieu (D-La.), Mark Begich (D-Alaska), and Ben Nelson (D-Neb.)—voted against cloture.

Obama’s EPA Takes First Big Steps To Kill Coal

by Myron Ebell on March 30, 2012

in Blog

The Environmental Protection Agency on Tuesday, 27th March, released proposed New Source Performance Standards (or NSPS) to limit greenhouse gas emissions from coal and gas fired power plants. The rule will effectively ban the construction of new coal-fired power plants unless they include carbon capture and storage technology that is not commercially available and has poor prospects of ever becoming economically feasible.  This is one of several rules EPA is writing in order to implement their 2009 finding that greenhouse gas emissions endanger public health and welfare and therefore must be regulated under the Clean Air Act.

The proposed new rule does not apply to existing power plants fueled by coal or natural gas or to plants that are under construction or have been permitted.  However, the Clean Air Act’s section 111d requires that existing sources be regulated as well as new sources.

When asked during a press teleconference on Tuesday when rules for existing power plants might be issued, EPA Administrator Lisa Jackson replied, “We have no plans to address existing plants….”  What she should have been asked by reporters was how her agency would respond when environmental pressure groups file suit in federal court to compel the agency to issue NSPS rules for existing power plants.  A good follow-up question would be to ask whether anyone in her agency is talking to environmental pressure groups about filing a friendly suit that EPA could then settle in a friendly way.

Senator James M. Inhofe (R-Okla.) immediately announced that he would do everything he could to block or overturn the rule. The most likely route is to introduce a resolution of disapproval using the Congressional Review Act.  However, that cannot be done until the rule becomes final, which is not likely to happen until next year.

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Obama’s Malaise

by Myron Ebell on March 26, 2012

in Features

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There was a point in the latter half of President Jimmy Carter’s one term in office when he had become so ineffectual and clueless that I found it painfully embarrassing to watch him on television.  Luckily, I lived in England for most of the Carter presidency and didn’t own a television, so I didn’t have to cringe that often during the last year or so he was in office.

I remembered these feelings of embarrassment for our President and our country when I watched clips of President Barack Obama’s speech on energy policy in Cushing Oklahoma on Thursday, 22nd March, and saw the AP photos of the President walking and speaking in front of a large stack of what look to be three-foot diameter pipes used for building oil pipelines.  It seems to me that our President is on the verge of becoming ridiculous and irrelevant in much the same way that Jimmy Carter did in 1979 and 1980.

President Obama keeps repeating the same misleading and inadequate defenses of his energy policies.  The only difference this week compared to the weekly speeches he gave over the past four weeks is that he gave four in one week this week—in Nevada, New Mexico, Oklahoma, and Ohio.  He continues to insist that he has approved new pipelines everywhere.  This is simply false. Those decisions have been made without any involvement by the President.

President Obama also said that the strong bipartisan majorities in the House and the Senate that have voted to permit the 1700-mile Keystone XL Pipeline from Alberta’s oil sands to refineries in Texas and Louisiana “…decided that this might be a fun political issue, decided to try to intervene and make it impossible for us to make an informed decision.”  This is truly pathetic.  The President decided to make it a political issue when he over-rode the recommendations of the State Department and the EPA (after reviewing the application for three years) to permit the pipeline in order to placate his environmental pressure group allies.

The President also discussed in his speech at TransCanada’s pipe yard in Cushing, Oklahoma, TransCanada’s plan to go ahead and build the 485-mile section of the Keystone XL Pipeline from the hub at Cushing to the Gulf.  He then claimed: “And today, I’m directing my administration to cut through the red tape, break through the bureaucratic hurdles, and make this project a priority, to go ahead and get it done.”

The reason that TransCanada has gone ahead with this southern section of the pipeline is because it doesn’t cross an international boundary and therefore doesn’t require approval by the President.  Any red tape and bureaucratic hurdles that may exist within the federal government to building the southern section of the pipeline have been created by the Obama Administration.

President Obama has thus blamed someone else for his decision to block the Keystone XL permit and taken credit for approving a short section of it within the U. S. that is being built without his approval. His words have lost all relation to his deeds.

Chu Has No Clue

by Myron Ebell on March 26, 2012

in Blog

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Energy Secretary Steven Chu has appeared somewhat out of touch with reality since his first day on the job in 2009, but in the past two weeks he has moved entirely into a fantasy world of his own creation.   Earlier this month, the Nobel prize-winning Dr. Chu testified before the House Oversight and Government Affairs Committee and gave himself a grade of A-minus for his first three years as Secretary of Energy.  Last week at another House hearing he gave himself a little higher grade for his handling of gasoline prices.

Secretary Chu told Committee Chairman Rep. Darrell Issa (R-Calif.):  “The tools we have at our disposal are limited, but I would say I would give myself a little higher in that since I became secretary of energy, I’ve been doing everything I can to get long-term solutions.”

In the real world, Secretary Chu and his merry band at the Energy Department have pursued polices designed to raise gasoline and other energy prices.  This is intentional and not the result of their incompetence.  Dr. Chu said in 2008 before President Obama nominated him that gas prices needed to rise gradually to European levels.  That is, seven to ten dollars a gallon, most of which is tax.  One reason for much higher gas taxes is that is the only way to make the alternative fuels and technologies that Secretary Chu has been promoting cheaper than gasoline.

Secretary Chu defended his 2008 statement until two weeks ago, when he grudgingly conceded that it is no longer operative.  Testifying before the Senate Energy and Natural Resources Committee on 13th March, Chu said, “I no longer share that view.  Of course we don’t want the price of gasoline to go up. We want it to go down.”

His locution that he no longer shares that view is odd.  He didn’t share that view; that was his view.

Of course, Secretary Chu may have been implying that he and President Obama share the view that the gas tax would ideally be at least five dollars a gallon.  They both want gas prices to go down now because President Obama wants to be re-elected.

This Week in the Congress

by Myron Ebell on March 18, 2012

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Senate Rejects Subsidies to Big Wind, Pickens Payout Plan

The Senate passed its version of the highway bill, S. 1813, this week on a 74 to 22 vote.  Following votes on amendments last week, several more energy-related amendments were defeated on Tuesday, March 13, before the final vote.  The vote tallies on these amendments, which were not germane to the underlying legislation and so required 60 (out of 100) votes to pass, were nonetheless quite interesting.

Senator Debbie Stabenow’s (D-Mich.) amendment to extend a number of tax subsidies for renewable energy, including the wind production tax credit, was defeated 49 to 49.  Forty-nine Democrats voted yes.  Forty-five Republicans and four Democrats—Joe Manchin (D-WV), Claire McCaskill (D-Mo.), Mark Warner (D-Va.), and James Webb (D-Va.)— voted no.  Two Republicans missed all three votes.  This is an encouraging result, but is by no means the end of the massive effort by the wind industry to get their subsidy extended beyond December 31st, as I detail in the item below.

Senator Jim DeMint’s (R-SC)amendment to end all tax subsidies for conventional and renewable energy and for energy efficiency then failed on a 26 to 72 vote.  The twenty-six Republicans voting to go cold turkey on their subsidy addiction were Ayotte (NH), Blunt (Mo.), Burr (NC), Chambliss (Ga.), Coats (Ind.), Coburn (Okla.), Corker (Tenn.), Crapo (Id.), DeMint (SC), Graham (SC), Inhofe (Okla.), Johanns (Neb.), Johnson (Wisc.), Kyl (Az.), Lee (Ut.), McCain (Az.), McConnell (Ky.), Paul (Ky.), Portman (Ohio), Risch (Id.), Rubio (Fla.), Sessions (Ala.), Shelby (Ala.), Toomey (Penna.), Vitter (La.), and Wicker (Miss.).

Getting twenty-six votes to end all energy subsidies is quite a stunning result, but it’s not quite as impressive as it looks.  Senators Richard Burr (R-NC), Saxby Chambliss (R-Ga.), and Tom Coburn (R-Okla.) turned around and voted to create several new tax subsidies for heavy-duty trucks fueled by natural gas.

The vote on the amendment offered by Senators Robert Menendez (D-NJ) and Burr was 51 to 47 (with 60 votes required for passage).  Besides the three inconsistent Republicans, three other Republicans voted for the Pickens Payoff Plan, which is also known as the NAT GAS Act.  They were Senators Collins (R-Me.), Isakson (R-Ga.), and Snowe (R-Me.).  Thirty-nine Republicans and eight Democrats—Harkin (D-Ia.), Leahy (D-Vt.), Levin (D-Mich.), Nelson (D-Neb.), Pryor (D-Ark.), Sanders (Socialist-Vt.), Stabenow (D-Mich.), and Webb (D-Va.)—voted against the amendment.

I have been calling the NAT GAS Act, whose chief promoter is billionaire T. Boone Pickens, the Pickens Payoff Plan or the Pickens Your Pocket Plan since last spring.  One of my CEI colleagues calls it the Billionaires’ Bailout.  Any doubts that these pejorative characterizations are justified have been laid to rest this week by an article by Ryan Grim and Michael McAuliff in the Huffington Post.

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President Continues Frantic Response to High Gasoline Prices

by Myron Ebell on March 16, 2012

in Blog, Features

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After speeches the last three weeks (reported here, here, and here) on why he isn’t to blame for high gasoline prices, I thought President Barack Obama would be moving on to other issues.  But in a sign of how desperate the White House is becoming about the threat gas prices pose to the President’s re-election, the President on Thursday, 15th March, gave yet another speech on the topic.

At Prince George’s Community College in Largo, Maryland, a few miles east of Washington, D. C., Mr. Obama took credit (completely undeservedly) for increasing domestic oil production, but then argued that increasing oil production won’t solve the problem of high gasoline prices.  According to the President, the only lasting solution is to continue pouring taxpayer dollars into subsidizing alternatives to oil.  Once we replace gasoline and diesel with other fuels, then we will have solved the problem of recurring spikes in gasoline prices.

The problem with the President’s argument is that the alternatives are likely to cost more, not less, than the oil they are replacing.  That is certainly the case with ethanol.  And hybrid electric vehicles still take many years of gas savings to pay for their much higher prices.

President Obama lashed out at those who disagree with him: “If some of these folks were around when Columbus set sail, they must have been founding members of the Flat Earth Society.  They would not have believed that the world was round.”

His critics are simply stuck in the past and don’t see the new clean, green energy economy his policies are creating: “The point is, there will always be cynics and naysayers who just want to keep on doing things the same way that we’ve always done them….  But that’s not who we are as Americans.  See, America has always succeeded because we refuse to stand still.  We put faith in the future.  We are inventors.  We are builders.  We are makers of things.  We are Thomas Edison.  We are the Wright Brothers.  We are Bill Gates.  We are Steve Jobs.  That’s who we are.”  That sounds good, but in real life the President’s heroes are not inventors, builders, and makers of things; they are crony capitalists and subsidy suckers like Jeff Immelt, Warren Buffett, Vinod Khosla, George Soros, T. Boone Pickens, George Kaiser, James Rogers, and Lloyd Blankfein.

President Obama also reiterated his claim that producing more oil isn’t going to solve the problem because the United States consumes over 20% of the world’s oil, but has only 2% of the world’s oil reserves.  Even the Washington Post has had enough.  On 15th March, Glenn Kessler dissected this technically true, but utterly misleading claim in a long Fact Checker piece.

Misleading Headline

by Myron Ebell on March 16, 2012

in Blog

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Above is a screenshot from Wednesday’s Bloomberg News. The headline suggests that green energy is a white knight poised to save the U.K. from rolling blackouts. However, the body of the article states nothing of the sort. Below is the story’s actual thesis:

[Government science advisor Sir David] King said power outages [in the United Kingdom] could occur as early as 2017 as old nuclear, oil and coal-fired power stations are closed because not enough is being done to replace them. The school’s study shows Britain can’t meet its goal of cutting carbon emissions 80 percent by 2050 without ramping up nuclear power and electrifying both transport and heating.

The comments contrast with findings by Bloomberg New Energy Finance, which last month concluded that growth in renewable energy will prevent the U.K. from suffering an electricity crisis. Britain will build more than 30 gigawatts of capacity by the end of 2016, two-thirds of it in solar, wind and biomass and the rest largely fired by natural gas, according to the researcher.

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