Myron Ebell

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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Post image for President Continues Frantic Response to High Gasoline Prices

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.

Post image for Strange Bedfellows Coalition (CEI and Greenpeace!) Urges Senate To Oppose NAT GAS Act (a.k.a., the Pickens Payout Plan)

Oppose Amendment 1782 to the Transportation Bill

March 13, 2012

Dear Senator:

Our groups have diverse missions and different ideas about the role of government. But we join together to urge you to oppose Senate Amendment 1782 to the Transportation bill currently being debated on the floor. This amendment would attach S. 1863, the New Alternative Transportation to Give Americans Solutions or NAT GAS Act to the bill.  By providing billions in tax subsidies, the NAT GAS Act interferes in the marketplace to favor natural gas over other transportation and energy technologies that may be more cost-effective or sustainable.

The NAT GAS Act provides significant subsidies for natural gas at all levels of production– from manufacturing and infrastructure to consumer tax credits– carrying an estimated $5 billion price tag.  It includes a tax credit for up to 80 percent of the marginal cost of buying a natural gas vehicle–up to $64,000 for the heaviest trucks, an infrastructure tax credit for 50 percent of the cost of a fueling station—up to $100,000, and a manufacturing tax credit for the production of natural gas vehicles. While a consumer fee would be used as an offset over the long-term, the fee does not even begin phase in until 2014, sticking taxpayers with the immediate fiscal impacts.

Again we urge you to prevent the siphoning of billions of dollars to the natural gas industry.  Oppose S.A. 1782 to the Transportation Bill.


Taxpayers for Common Sense
Freedom Action
Competitive Enterprise Institute
Americans for Prosperity
Friends of the Earth
The Heartland Institute
Food and Water Watch
Western Organization of Research Councils

This Week in the Congress

by Myron Ebell on March 11, 2012

in Blog

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Senate Takes Up Highway Bill; Pickens Payoff Plan Hangs in the Balance

A logjam on the highway bill broke loose Wednesday afternoon when a unanimous consent agreement was reached in the Senate. The agreement provided for votes on twenty germane amendments and ten non-germane amendments, equally divided between amendments offered by Democrats and Republicans.

Voting on the non-germane amendments, which require a sixty-vote supermajority to pass, commenced at just after 2 PM on Thursday, 8th March. A number of the amendments concern energy policies.

First up was Senator David Vitter’s (R-La.) amendment (#1535) to require more oil and gas drilling in federal offshore areas. It failed on a vote of 46 to 42. Senator Susan Collins’s (R-Me.) amendment (#1660) to delay the EPA’s job-killing Boiler MACT Rule was defeated on a 52 to 46 vote.

The major drama of the day was provided by two very different amendments on the Keystone XL Pipeline. Senator Ron Wyden (D-Oreg.) offered an amendment (#1817) that would further delay permitting the 1700-mile pipeline from Alberta’s oil sands to refineries in the Gulf States. It would also ban any oil moving through the pipeline from being exported. This is truly goofy, as my CEI colleague Marlo Lewis explains here. Wyden’s amendment was defeated overwhelmingly, 34 to 64.

Senator John Hoeven (R-ND) then offered amendment #1537 that would permit the Keystone XL pipeline upon enactment of the legislation. The amendment failed on a 56 to 42 vote.

Eleven Democrats voted yes on the Hoeven amendment. Two Republicans, Senators Mark Kirk (R-Ill.), who is recovering from a stroke, and John Thune (R-SD), missed all the votes.  Assuming they both would have voted yes on the Hoeven amendment, support in the Senate to approve the Keystone pipeline is getting close to the 60 votes needed to overcome procedural obstacles.

The amendment might even have passed without some last minute lobbying by President Barack Obama. Politico reported and the White House confirmed that the President called several Senators to urge them to vote no on Keystone.

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Post image for As Gas Prices Climb, President Obama Continues To Give Silly Energy Speeches

President Barack Obama’s slide into daffy irrelevance continued this week. In yet another speech on what he’s doing to lower gas prices, the President proposed raising the federal subsidy for buying an electric vehicle from $7,500 to $10,000.  And instead of a tax credit, the President wants to give electric vehicle buyers the $10,000 up front at time of purchase.

This should get the cost-to-buyer of new Teslas and Fiskers below $100,000. Dozens or even scores of new electric cars will no doubt be zooming out of showrooms if the Congress enacts President Obama’s proposal.  And low-to-middle income Americans struggling to fill their tanks with $3.75 gas can take satisfaction knowing that their tax dollars are doing so much good.

Post image for President Obama: Rising Gasoline Prices Are Everyone Else’s Fault

President Barack Obama’s frantic efforts to deflect blame for rising gasoline prices continued this week and became even more incoherent and contradictory.  Following up his speech on energy policy last week at the University of Miami in Florida, on 1st March the President spoke at Nashua Community College in New Hampshire.

President Obama repeated some of the same points that he made in Miami, but dropped any mention of the promising research in using algae to produce biofuels.  He took credit for increasing domestic oil and gas production, but argued that “…anybody who tells you that we can just drill our way out of this problem does not know what they’re talking about or they’re not telling you the truth.  (Applause.) One or the other.”

According to the President, that’s because the United States consumes 20% of the world’s oil production, but has only 2% of the reserves.  “And no matter what we do, it’s not going to get much above 3 percent.”  This is a simple misunderstanding that anyone who knows anything about oil statistics could correct.  The U. S. has only 2% of the world’s proven reserves.  The U. S. also has more areas of high potential reserves that haven’t been explored than any other country.  Until those areas are explored, the oil that they possibly contain is not included in the estimate of proven economically recoverable reserves.

The President went so far in taking credit for recent increases in U. S. oil production that he had a chart handed out to those attending his Nashua speech.  As has been pointed out repeatedly, increasing domestic oil and natural gas production has come entirely from private lands.  Production from federal lands and Outer Continental Shelf areas has declined and is forecast to continue to decline as a result of Obama Administration policies.

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This Week in the Congress

by Myron Ebell on February 19, 2012

in Blog

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House Passes Energy Bill That Includes ANWR and Keystone Pipeline

The House of Representatives voted on Thursday evening, 16th February, for a package of four energy bills that if enacted will greatly expand U. S. oil and natural gas production on federal lands and the Outer Continental Shelf plus permit the Keystone XL pipeline. The omnibus energy bill, H. R. 3408, passed by a vote of 237 to 187.  Twenty-one Democrats voted yes, and twenty-one Republicans voted no.

The most significant provision would require the Department of the Interior to open a small portion of the coastal plain of the Arctic National Wildlife Refuge in Alaska’s North Slope to oil and gas exploration.  Producing oil in ANWR has been an issue since Congress enlarged the Refuge in 1980 and allowed oil production in the coastal plain subject to a report from the Department of the Interior that it could be done without compromising the Refuge’s purpose of protecting wildlife.  That report was issued in 1986.  The Congress passed legislation in 1995 to open ANWR, but President Bill Clinton vetoed it.  The House and Senate passed different bills opening ANWR in 2005, but couldn’t agree on the same bill.

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This Week in the Congress

by Myron Ebell on February 11, 2012

in Blog

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House Ratchets Up Probe of White House Involvement in Solyndra Scandal

Fourteen Republican members of the House Energy and Commerce Committee, led by Chairman Fred Upton (R-Mich.) and Oversight and Investigations Subcommittee Chairman Cliff Stearns (R-Fla.) sent a strongly-worded, five-page letter to the White House on 9th February setting a 21st February deadline for turning over documents related to the White House’s involvement in the Solyndra scandal.   The letter also demands that five officials be made available for interviews by 17th February.

The letter notes that the Committee requested the relevant documents five months ago and has made every effort to accommodate the White House’s concerns.  As to the reasons why the White House has refused to comply with the committee’s subpoena last fall, the letter notes that the White House has not claimed executive privilege for the withheld documents and demands that if executive privilege is going to be claimed the White House must let the committee know by 21st February.

The Department of Energy made the first renewable energy loan under the 2009 stimulus bill to solar panel maker Solyndra, which is based in Fremont, California.  The entire $527 million of taxpayer money was lost in August when Solyndra declared bankruptcy.  The largest private investor in Solyndra, George Kaiser, is a major Obama and Democratic Party donor and fundraiser and has been a frequent visitor to the White House during the Obama presidency.