Today rumors picked up speed that parties to the spending bill negotiations have reached some sort of deal, pursuant to which a relaxation of restrictions on oil exports would be traded for an extension of the wind energy industry’s primary subsidy, known as the production tax credit (“PTC”).
As the Brits say, this is a very sticky wicket indeed. For my part, I oppose trade restrictions and subsidies, so I’m pro-oil exports and anti-wind PTC. In a thoughtful post, my colleague Marlo Lewis suggests that the deal isn’t worth it, because the harm wrought by the wind PTC is amplified by its synergy with the Clean Power Plan. In his post, Marlo operated under the assumption that the alternative to the rumored deal is for nothing to happen. In this post, I want only to demonstrate that the alternative could be the worst of all worlds—that is, in the absence of a deal, we could end up with an extension of the wind PTC but without a loosening of oil export restrictions.
Here’s how it could happen. [click to continue…]
EPA Region 6 today announced that the agency would take over Texas’s Regional Haze program under the Clean Air Act.
This is the 54th such federal takeover, or “federal implementation plan” (“FIP”), imposed by the Obama Administration. For comparison’s sake, consider that the previous three presidential administrations imposed a total of 5 Clean Air Act federal takeovers. Moreover, the EPA promulgated a final agency action last summer that threatens another 36 state programs with Clean Air Act federal takeovers, if States do not radically alter their air quality strategies to control emissions due to malfunctions and other uncontrollable events.
All told, EPA has threatened or imposed 90 federal implementation plans—or 18 times the sum of the previous three administrations. And Obama still has a year left.
EPA’s 54th FIP is typically absurd. The rule was proposed on December 16, 2014, and would affect 14 power plants and cost more than $2 billion. These costs are senseless compared to the “benefits” which are literally invisible. The purpose of the rule, known as Regional Haze, is to improve the view at National Parks. After years and thousands of man hours of work, Texas officials submitted a Regional Haze compliance plan in March 2009. Texas’s plan met all of EPA’s then-current criteria for approval. Despite being required by the Clean Air Act to process Texas’s plan within two years of its submission, EPA Region 6 stalled for years, during which time it changed the criteria for approval. In this fashion, EPA ‘moved the goalposts’ on Texas. The agency sat on Texas’s submittal while it changed the rules of the game. Ultimately, EPA ruled on Texas’s plan almost three and a half years past its Clean Air Act deadline. [click to continue…]
The Sunday morning political talkies are thought to set the agenda for the news week, so it is perhaps enlightening to see what these shows said about the ongoing Paris climate talks to save the world from super-terrifying, catastrophic, runaway global warming.
- On Meet the Press, there were 7 mentions of “Paris,” but each one was a reference to the awful terrorist attacks.
- ABC This Week had 2 mentions of the Paris conference, but each one was only a set up to a segment on terrorism.
- There were 6 mentions of Paris on Fox News Sunday, and all were in reference to the terrorist attacks. Also, coming out of a commercial break, producers showed a shot of Buffalo, over which Chris Wallace noted that the area was free of snow this time of year for the first time since 1899 and said “let the climate debate begin.” Then he started an interview with Ben Carson that omitted any discussion of global warming.
- CBS Face the Nation featured 10 mentions of Paris, but all of them pertained to the terrorist attacks. Otherwise, host John Dickerson asked Bernie Sanders whether his support for a carbon tax would frighten voters*, and Trump denigrated Obama for treating global warming as America’s foremost national security threat.
Obviously, these Sunday morning talkies—whose business is to react to public opinion—did not give much attention to COP-21 in Paris. Indeed, other than providing a setup to talking about terrorism, the Paris climate confab received zero attention from all four of the network shows. Remember, earlier last week, heads of state from over 150 countries had gathered in Paris (a world record!). And, as I suggested at the outset, the earth supposedly hangs in the balance. So there was much to talk about, if you believe, like the president, that global warming is the most pressing issue of our time. But Paris was ignored. As was climate change in general. The absence of climate change/Paris segments on the Sunday morning talkies seemingly lends credence to all those polls about how Americans lend low priority to climate change. Perhaps the conference will garner attention next Sunday. We’ll see.
Even if other media outlets are ignoring Paris, you can still count on us to keep you up to speed. My colleagues Myron Ebell and Chris Horner are on the scene in the City of Lights, and they have been sending regular updates. Find their previous dispatches here; find their latest missives below.
Big Business and Big Government Hope They’ll Always Have Paris
Chris Horner, Daily Caller, 8 December 2015
Obama’s EPA Chief Dismisses Threats to Clean Power Plan
Myron Ebell, RealClearEnergy, 8 December 2015
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Columbia University Graduate School of Journalism recently published an investigative report alleging some sort of climate cover-up by ExxonMobil. For my part, I knew the report was not to be trusted the moment I understood that one of its underlying assumptions is the silly notion that Exxon was responsible for “manufacturing doubt” on climate change by funding “denier” groups. I know this is a misapprehension because I work for one such group, the Competitive Enterprise Institute. Accordingly, I’m well positioned to know that the claim is without merit, akin to arguing that the New York Times is in the pocket of Chevron for running the company’s ads in its paper, or claiming that Politico is a mouthpiece for the League of Conservation Voters because the LCV “sponsors” Politico Morning Energy. When an “investigative journalist” operates on the assumption that Exxon and the Koch brothers are pulling all the strings, he or she exposes both his/her preconceived ideas and lazy reporting technique.
With all this fresh in the mind, I chortled my cold coffee upon yesterday reading that the School of Journalism’s “Exxon Knew” investigation was funded by the Energy Foundation, the Rockefeller Brothers Fund, and the Rockefeller Family Fund. These benefactors all are avowed opponents of fossil fuel consumption, and they often cast their opposition in moral terms. They are, as such, extremely partial when it comes to the subject of the investigative report they paid for funded.
Suspiciously, the School of Journalism posted an acknowledgement of the funding only after the first of its stories appeared online. I wonder what led to that?
In a letter to Exxon, School of Journalism Dean Steve Coll addressed the matter, and his missive struck a chord with me. He wrote:
You … understand that the issue is not who provided funding for this or any other Columbia University project, but whether the work done is independent of the funders. In short, did the journalism fellows … follow the information uncovered by the reporting or did they follow the funder’s agenda? The fact is that this reporting was not subject to any influence or control by the funders …
What a sad joke. Coll and his “journalism fellows” take it for granted that think tanks and other policy organizations were mere passive conduits for Exxon’s supposed campaign to fool the American public. Coll et al.’s “evidence” for this allegation is that the funding existed. But when it comes to the anti-fossil fuel zealots that fund his brand of “investigative journalism,” he assures everyone that there is no connection between the money and the end product. He is not, he promises, an anti-fossil fuel shill. [click to continue…]
In order to survive judicial review, federal rules must be reasonable, per se, and also the product of a reasonable rulemaking process. EPA’s recent climate regulation for new power plants, known as the Carbon Pollution Standards, is neither.
- EPA’s Carbon Pollution Standards rule is irrational because its purpose is to decrease greenhouse gas emissions, but its effect it to increase greenhouse gas emissions
The purpose of the Carbon Pollution Standards rule is to reduce greenhouse gases from new coal-fired power plants. To this end, the agency based the regulation on the installation of emissions controls known as “carbon capture and sequestration.” These “CCS” systems work by capturing greenhouse gases emitted from a power plant’s smokestack and then piping them to empty underground reservoirs, where the emissions are injected for long term storage.
However, the technology is not yet market ready, and, as such, it is exorbitantly expensive. In order to mitigate the monumental costs of CCS, the EPA is relying on the oil industry. In some parts of the country, geological conditions exist that make it profitable for oil producers to buy carbon dioxide, inject it into wells, and thereby extract more oil. This process is known as “enhanced oil recovery,” or EOR. In the rulemaking for the Carbon Pollution Standards, EPA repeatedly explained that it expects power plant owners to defray the tremendous cost of CCS by selling captured carbon dioxide to oil producers for use in EOR. In fact, EPA’s expectation comports with mainstream analysis, as the International Energy Agency projects that 70% of new CCS projects worldwide will be linked with EOR.
So, the purpose of EPA’s Carbon Pollution Standards regulation is to decrease greenhouse gas emissions. And the rule would do so by boosting oil production. [click to continue…]
Early in 2015, SolarCity, a solar panel merchant, filed a whopper of a complaint in federal court alleging that it had suffered antitrust violations at the hands of the Salt River Project, an Arizona electricity provider. SolarCity’s complaint is rich in Alanis Morissettean irony, given that the company’s business plan, like that of all solar power retailers, is based primarily on political favoritism. Were it not for government tilting the market in their favor at the expense of conventional energy sources, SolarCity and its ilk would not exist. The company, as such, is a function of anti-competitive behavior. In this cosmic context, SolarCity’s antitrust lawsuit is like myriad spoons when you only need a knife.
Consider the case at hand. Thanks to a federal statute, the 2005 Energy Policy Act, public utilities akin to the Salt River Project are required to offer incentives, known as “net-metering,” for producers of electricity from rooftop solar panels. As I explain here, net-metering usually entails the overpayment to owners of rooftop solar panels for their electricity in a manner that redistributes wealth from those that don’t own solar panels, to those who do. In response to this legislative command to coddle an industry favored by Congress, the Salt River Project instituted a net-metering program that was very generous. And SolarCity took advantage of this generosity to grow its market share.
However, SRP’s net-metering ratepayer subsidies were too generous, such that they threatened to lead to the under capitalization of grid infrastructure. In practice, SolarCity and its customers benefited financially from the grid without having to invest commensurately in the grid. Thus, these beneficiaries were getting a “free ride.” Taken to its logical end, if all SRP ratepayers installed rooftop solar panels and thereby enjoyed the terms of the old deal, then there would be no capital to maintain the grid, and it would fall apart. [click to continue…]
There has been a flurry of reports of late about how President Obama has staked his “legacy” on the success of the ongoing UN climate confab in Paris. And no doubt these reports are true. This White House has been promoting the Paris talks in earnest since late August. Indeed, the putative threat of global warming has received more of the President’s public attention than any other foreign policy issue during his second term.
So I’ve been asking myself: would Obama be president today if he’d been forthcoming about climate change during his reelection campaign in 2012?
After all, it would have been impossible for voters three years ago to have expected that Obama would make climate change his top priority, as the president refused to reveal his true intentions. Consider the following headlines from October 2012:
- San Francisco Chronicle: “Obama, Romney Quiet on Climate”
- Guardian: “U.S. Presidential Debates: Abortion, Climate Change, and other Missing Issues”
- Associated Press: “Guns, Climate, Gays Missing in Presidential Race”
Far from making climate change a priority, Obama in 2012—the guy trying to get elected—was an avowed champion of all fossil fuels, which, of course, are the alleged cause of supposedly terrifying global warming. During the debates, for example, Obama tried to outflank Romney’s right on energy. That Obama—the guy trying to win over American voters—was pro-gas, pro-oil, and even pro-coal. It was only in the immediate wake of reelection, after which he no longer faced voter scrutiny, that Obama pivoted to legacy-making on the climate.
To recap: Obama in 2012 trumpeted his record on fossil fuel production and ignored climate change in order to get elected; then, once he was elected, he made climate change his number one priority. So he actively misled the American people. Such a naked bait and switch is unprecedented in modern presidential politics. It is also crassly cynical, and should put to shame any notion that Obama cares about “hope” or “change” or any of that jazz.
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William Pentland has a very interesting post over at Forbes Energy in which he notes that average nationwide retail electricity prices increased from 2013-2015, and also that the Energy Information Administration expects rates to continue to rise in 2016. If the EIA is correct, then electric rates in 2016 would have increased about 4.5 percent over the 2013 average. As Pentland explains, this trend doesn’t make much sense at first impression, in light of historically low natural gas prices and plummeting oil prices.
According to Pentland, increasing demand is unlikely to be the cause of rising electricity rates, due to the simple fact that “many if not most utilities are selling less—not more—electricity than they used to sell.” And he also rightly suggests that wholesale electricity rates are unlikely to blame, because these wholesale markets are largely dictated by the price of natural gas, which, again, has been stuck at historical lows. While Pentland identifies recent regional price spikes (due primarily to logistical clogs) as one possible culprit, he expresses uncertainty whether such localized impacts could explain a nationwide trend.
In this fashion, Pentland does not posit a definite explanation for the phenomenon he demonstrates. Rather, he ends his post with a question: What is causing electricity rates to increase, despite unusually low fuel costs and generally declining energy costs?
My guess is that the cause is EPA’s war on coal. [click to continue…]
Below, I’ve posted three planks of a presidential platform for EPA policy. I’ve even taken the time to formulate catchy slogans that capture the essence of my positive policy proposals.
Slogan #1: DO YOUR JOB!
In creating the EPA, Congress subjected the agency to thousands of deadlines, across virtually every regulatory regime it administers. As I explained in this 2013 article, statutory date-certain deadlines were a novel legislative feature in the early 1970s, when Congress endowed EPA with virtually of all of its current authority by passing various enabling statutes. These deadlines represent the Congress’s express directive for the agency to perform certain jobs.
The agency, however, has done a pitiful job achieving these congressional commands. Consider the Clean Air Act, which is undoubtedly the most important of the agency’s sources of power. From 1994 to 2013, the agency was subject to 200 deadlines for three core Clean Air Act programs (NAAQS, NSPS, and HAP Residual Risk Review). The agency missed 98% of these date certain duties, by an average of 5.5 years.
There are consequences to the agency’s failure to do its job. For starters, it creates the phenomenon known as “sue and settle,” whereby unelected environmental special interests seize the agency’s priority-making process.
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Have We Finally Reached Peak Lie on the Clean Power Plan?
EPA has marketed its Clean Power Plan on a number of untruths, including (but not limited to):
However, on October 7th, EPA told its biggest 111(d) whopper to date. On that day, during a hearing before the House Energy and Commerce Committee, EPA Office of Air and Radiation chief Janet McCabe said, “The Clean Power Plan does not set in place a cap-and-trade program.” This is a bald face lie. In fact, the administration has proposed to impose a cap-and-trade on any state that refuses to comply with the rule. Moreover, top EPA officials, including Administrator Gina McCarthy, have urged States to comply by participating in a cap-and-trade. For my part, I can understand why McCabe was reduced to such naked duplicity. The Congress has considered and ultimately demurred on a number of cap-and-trade schemes. Now, EPA is trying to impose one, without a legislative mandate. McCabe was before Congress, the institution that has been screwed thusly. So she lied. Heckuva Job, Janet!
Dem Climate Debate Demonstrates Emptiness of Dem Climate Debate
Last Tuesday’s debate featured extensive discussions about climate change policy, a first for a presidential candidate debate of any stripe. The resulting interaction among candidates was heavy on empty exaggeration and obvious fibs. [click to continue…]