Features

The Greenland Ice Melt: Should We Be Alarmed?

by Marlo Lewis on July 26, 2012

in Features

Post image for The Greenland Ice Melt: Should We Be Alarmed?

If you follow global warming news at all, you’ve probably seen the NASA satellite images (above) many times. The images show the extent of Greenland surface ice melt on July 8 (left) and July 12 (right). In just a few days, the area of the ice sheet with surface melting increased from about 40% to 97%, including Summit Station, Greenland’s highest and coldest spot.

NASA took a drubbing from Patrick Michaels and Chip Knappenberger at World Climate Report (“Illiteracy at NASA“) for describing the ice melt as “unprecedented” in the title of the agency’s press release. The word literally means without precedent, and properly refers to events that are unique and never happened before. In reality, as one of NASA’s experts points out in the press release, over the past 10,000 years, such events have occurred about once every 150 years:

“Ice cores from Summit show that melting events of this type occur about once every 150 years on average. With the last one happening in 1889, this event is right on time,” says Lora Koenig, a Goddard glaciologist and a member of the research team analyzing the satellite data.

Equating ’rare yet periodic’ with ‘unprecedented’ is incorrect and misleading. “But apparently,” comment Michaels and Knappenberger, “when it comes to hyping anthropogenic global warming (or at least the inference thereto), redefining English words in order to garner more attention is a perfectly acceptable practice.” New York Times blogger Andrew Revkin also chided NASA for an “inaccurate headline” and the associated “hyperventilating coverage,” but for a different reason: NASA provided “fodder for those whose passion or job is largely aimed at spreading doubt about science pointing to consequential greenhouse-driven warming.”

Enough on the spin. Let’s examine the real issues: (1) Did anthropogenic global warming cause the extraordinary increase in surface melting between July 8 and July 12? (2) How worried should we be about Greenland’s potential impact on sea-level rise? [click to continue…]

Is Today’s Climate Warmer than the Medieval and Roman Warm Periods?

by Marlo Lewis on July 26, 2012

in Blog, Features

Post image for Is Today’s Climate Warmer than the Medieval and Roman Warm Periods?

In 2001, the U.N. Intergovernmental Panel on Climate Change (IPCC) featured a graph of Northern Hemisphere temperature history from a 1999 study by Profs. Michael Mann, Raymond Bradley, and Malcolm Hughes. Because of its shape, the graph became known as the “hockey stick.” From A.D. 1,000 to about 1915, the graph depicts a gradual decline in Northern Hemisphere temperatures (the hockey stick handle) followed by an abrupt upturn in hemispheric temperatures during the remainder of the 20th century (the blade).

The graph appears in the IPCC 2001 report’s Summary for Policymakers, Technical Summary, and chapter 2 on Observed Climate Variability and Change. Based on the Mann-Bradley-Hughes (MBH) study, the IPCC famously concluded that, “The 1990s are likely to have been the warmest decade of the millennium in the Northern Hemisphere and 1998 is likely to have been the warmest year” (chapter 2, p. 102). The IPCC also asserted that, “Evidence does not support the existence of globally synchronous periods of cooling or warming associated with the ‘Little Ice Age’ and ‘Medieval Warm Period’.” The hockey stick instantly became the poster child for pro-Kyoto advocacy, touted as seeing-is-believing evidence that late 20th century warmth was unprecedented during the past 1,000 years, and that mankind’s fuelish ways must be to blame.

Soon after its PR boost from the IPCC, the hockey stick became embroiled in a controversy that persists to this day. Books both pro and con have been written on the subject. Two leading critics, mining consultant Steve McIntyre and economist Ross McKitrick, argued that MBH’s computer program generates hockey stick-shaped graphs from random data. As for the IPCC’s dismissal of the Medieval Warm Period as a European phenomenon, the Center for the Study of Carbon Dioxide and Global Change maintains a large and growing archive of studies indicating that the Medieval Warm Period was global and/or warmer than recent decades.

A recent study published in Nature Climate Change further undermines the credibility of the hockey stick. The study, “Orbital forcing of tree-ring data,” by Jan Esper of Johannes Gutenberg University, in Germany, and colleagues from Germany, Switzerland, Finland, and Scotland, used X rays to measure changes in the cell-wall density of trees in Northern Finland over the past 2,000 years. The analysis examined both “living and subfossil pine (Pinus sylvestris) trees from 14 lakes and 3 lakeshore sites.” [click to continue…]

Historical Perspective on the Recent Heat Wave

by Marlo Lewis on July 23, 2012

in Blog, Features

Post image for Historical Perspective on the Recent Heat Wave

Over at World Climate Report, the indefatigable Pat Michaels and Chip Knappenberger review a new study updating National Climate Data Center (NCDC) data on U.S. State climate extremes. I’ll cut right to the chase. The paper, “Evaluating Statewide Climate Extremes for the United States,” published in the Journal of Applied Meteorology and Climatology, finds that far more State-wide all-time-high temperature records were set in the 1930s than in recent decades.

From Pat and Chip’s review:

Despite the 24/7 caterwauling, only two new state records—South Carolina and Georgia—are currently under investigation. And, looking carefully at Shein et al. dataset, there appears to be a remarkable lack of all-time records in recent years. This is particularly striking given the increasing urbanization of the U.S. and the consequent “non climatic” warming that creeps into previously pristine records. . . .

Notice that the vast majority of the all-time records were set more than half a century ago and that there are exceedingly few records set within the past few decades. This is not the picture that you would expect if global warming from greenhouse gas emissions were the dominant forcing of the characteristics of our daily weather. Instead, natural variability is still holding a strong hand.

The chart below shows the number of State heat records and the year in which they were set. (When the same all-time high occurs in two or more years in the same State, each of those years gets a fraction of one point.)

 

When Drought Strikes, Should U.S. Policy Endanger Hungry People?

by Marlo Lewis on July 20, 2012

in Features

Post image for When Drought Strikes, Should U.S. Policy Endanger Hungry People?

The question answers itself. Of course not. But that is the effect of the Renewable Fuel Standard (RFS), more commonly known as the ethanol mandate.

Under the RFS (Energy Independence and Security Act, p. 31), refiners must sell specified amounts of biofuel each year. The “volumetric targets” increase from 4.0 billion gallons in 2006 to 36 billion gallons in 2022. The amount of corn ethanol qualifying as “renewable” maxes out at 15 billion gallons in 2015. Already, ethanol production consumes about 40% of the annual U.S. corn crop.

By 2022, 21 billion gallons are to be “advanced” (low-carbon) biofuels, of which 16 billion gallons are to be made from plant cellulose. But with cellulosic ethanol proving to be a complete dud, corn growners and ethanol producers are lobbying to redefine corn ethanol as ”advanced.” If they succeed, mandatory sales of corn ethanol could significantly exceed 15 billion gallons annually.

In any event, the RFS sets aside a large and increasing quantity of the U.S. corn crop each year for ethanol production regardless of market demand for competing uses — and heedless of the potential impacts on food prices and world hunger. No matter how much of the U.S. corn crop is ruined by drought, no matter how high corn prices get, no matter how many people in developing countries are imperiled, the RFS requires that billions of bushels of corn be used to fuel cars rather than feed livestock and people. This is crazy. [click to continue…]

Ethanol Added $14.5 Billion to Consumer Motor Fuel Costs in 2011, Study Finds

by Marlo Lewis on July 19, 2012

in Features

Post image for Ethanol Added $14.5 Billion to Consumer Motor Fuel Costs in 2011, Study Finds

Today, FarmEcon LLC released RFS, Fuel and Food Prices, and the Need for Statutory Flexibility, a study of ethanol’s impact on food and fuel prices. FarmEcon prepared the study for the American Meat Institute, California Dairies Inc., Milk Producers Council, National Cattlemen’s Beef Association, National Chicken Council, National Pork Producers Council, and National Turkey Federation.

The study argues that the Renewable Fuel Standard (RFS), commonly known as the ethanol mandate, is detrimental to both non-ethanol industry corn users and food and fuel consumers. The program should therefore be reformed. The RFS has “destabilized corn and ethanol prices by offering an almost risk-free demand volume guaranty to the corn-based ethanol industry.” Consequently, food producers who use corn as a feedstock “have been forced to bear a disproportionate share of market and price risk” when corn yields fall and prices rise. This has become painfully obvious in recent weeks as drought conditions in the Midwest depress yields and push corn prices to record highs.

Appropriate reform* would assure food producers ”automatic market access” to corn stocks “in the event of a natural disaster and a sharp reduction in corn production.” Ethanol producers should “bear the burden of market adjustments, along with domestic food producers and corn export customers.” The study also recommends that the RFS schedule ”be revised to reflect the ethanol industry’s inability to produce commercially viable cellulosic fuels.”

Pretty tame stuff. An argument for flexibility to avoid the RFS’s worst market distortions and the cellulosic farce rather than an abolitionist manifesto. Nonetheless, the study paints a fairly damning picture of the RFS as a whole:

  • Increases in ethanol production since 2007 have made little, or no, contribution to U.S. energy supplies, or dependence on foreign crude oil. Rather, those increases have pushed gasoline suplies into the export market.
  • Current ethanol policy has increased and destabilized corn and related commodity prices to the detriment of both food and fuel producers. Corn price volatility has more than doubled since 2007.
  • Following the late 2007 increase in the RFS, food price inflation relative to all other goods and services accelerated sharply to twice its 2005-2007 rate.
  • Post-2007 higher rates of food price inflation are associated with sharp increases in corn, soybean and wheat prices.
  • On an energy basis, ethanol has never been priced competitively with gasoline.
  • Ethanol production costs and prices have ruled out U.S. ethanol use at levels higher than E10. As a result, we exported 1.2 billion gallons of ethanol in 2011.
  • Due to its higher energy cost and negative effect on fuel mileage, ethanol adds to the overall cost of motor fuels. In 2011 the higher cost of ethanol energy compared to gasoline added approximately $14.5 billion, or about 10 cents per gallon, to the cost of U.S. gasoline consumption. Ethanol tax credits (since discontinued) added another 4 cents per gallon. [click to continue…]

MIT Study Debunks RFA/Vilsack Claims on Ethanol, Gas Prices

by Marlo Lewis on July 17, 2012

in Features

Post image for MIT Study Debunks RFA/Vilsack Claims on Ethanol, Gas Prices

Back in May, I discussed a study conducted for the Renewable Fuel Association (RFA) by Iowa State University’s Center for Rural and Agricultural Development (CARD). The study claims that from January 2000 to December 2011, “the growth in ethanol production reduced wholesale gasoline prices by $0.29 per gallon on average across all regions,” and reduced average gasoline prices by a whopping $0.89 per gallon in 2010 and $1.09 per gallon in 2011. Ethanol boosters like the RFA and USDA Secretary Tom Vilsack tout this study as proof that federal biofuel policies benefit consumers and should be expanded.

The CARD researchers, Xiaodong Du and Dermot Hayes, attempt to determine the consumer benefit of ethanol by inferring what motor fuel prices would have been over the past decade had there been no increase in ethanol production. Ethanol now constitutes roughly 10% of the motor fuel used by U.S. passenger vehicles. Du and Hayes conclude that without ethanol, U.S. motor fuel supply would be significantly smaller and pain at the pump significantly greater.

This procedure, I argued, is ridiculous. First, it assumes that refiners are like deer caught in the headlights and do not respond to incentives. Even if motor fuel prices increase by up to $1.09/gal nationwide over a 10-year period, we’re supposed to believe refiners would not increase output and take advantage of this opportunity to sell more of their product at higher prices. But that’s exactly what refiners would do. In the process, supply would come back into balance with demand, pushing fuel prices down.

Second, the CARD study ignores the opportunity costs of ethanol policy. Capital is a finite resource. Dollars that refiners are mandated or bribed to invest in ethanol production are dollars they cannot invest in gasoline production. The CARD study implausibly assumes that all the refining capacity diverted by federal policy into ethanol production would have been left idle in a free market and not used to produce gasoline instead.

Admittedly, the CARD study is full of math I don’t understand. But two experts in the field – MIT energy economics professor Christopher Knittel and UC Davis agricultural economics professor Aaron Smith – have just produced a technical critique of the CARD study. Titled “Ethanol Production and Gasoline Prices: A Spurious Correlation,” the researchers make several telling points, some of which are funnier than the standard fare found in the ‘dismal science.’   [click to continue…]

George Shultz Endorses Carbon Tax – You Were Surprised?

by Marlo Lewis on July 13, 2012

in Features

Post image for George Shultz Endorses Carbon Tax – You Were Surprised?

Yes, that George Shultz, President Ronald Reagan’s Secretary of State. But not everyone who served with Reagan was a Reaganite. Reagan’s VP, G.H.W. Bush, famously campaigned on a platform of “Read my lips: No New Taxes.” Not two years later he raised taxes in a 1990 budget deal that torpedoed the economy and sank his presidency.

Yesterday, in an interview puff piece penned by two associates, Shultz, a distinguished fellow at Stanford University’s Hoover Institution, called for a ‘revenue-neutral’ carbon tax. This is unsurprising. As the article reminds us, in 2010, Shulz, partnering with Tom Steyer, a Democrat, “led the successful campaign to defeat Proposition 23, a California ballot initiative to suspend the state’s ambitious law to curb greenhouse gases.”

Nothing in the article indicates that Shultz thinks a carbon tax should replace California’s cap-and-trade regime established by AB 32. Nor is there any hint that Shultz would condition the enactment of carbon taxes on repeal of the EPA’s court-awarded power to regulate greenhouse gases via the Clean Air Act.

This pattern is becoming boringly familiar. [click to continue…]

More on the Carbon Tax Cabal

by Marlo Lewis on July 12, 2012

in Features

Post image for More on the Carbon Tax Cabal

Concerning the “Price Carbon Campaign/Lame Duck Initiative” meeting of center-right and ‘progressive’ pols, wonks, and activists yesterday at the American Enterprise Institute (AEI), herewith a few additional thoughts.

Today’s Greenwire quotes AEI economic policy director Kevin Hassett saying that AEI was just playing host and the meeting was just information sharing. Well, okay, let’s assume he experienced it that way, but what about the ‘progressives’ who set the agenda? They must really be into sharing, because this was their fifth meeting. Whatever the AEI folks thought the event was about, the agenda clearly outlines a strategy meeting to develop the PR/legislative campaign to promote and enact carbon taxes.

During the cap-and-trade debate in the last Congress, there was something of a consensus among economists that EPA regulation of greenhouse gases (GHGs) is the worst option, a ‘comprehensive legislative solution’ (i.e. cap-and-trade) has less economic risk, and a carbon tax is the most efficient option. But the ‘progressives’ in the “Price Carbon Campaign” are pushing for carbon taxes on top of EPA regulation.

Because the meeting was non-public and hush-hush, we may never know who said what. Here are some points the ‘conservative’ economists  should have made: [click to continue…]

AEI Hosts Fifth Secret Meeting to Promote Carbon Tax

by Marlo Lewis on July 11, 2012

in Features

Post image for AEI Hosts Fifth Secret Meeting to Promote Carbon Tax

Today, the American Enterprise Institute (AEI), a prominent conservative think tank, hosted a secret, four-and-a-half hour meeting of pols, wonks, and activists, including several self-identified ’progressives,’ to develop a PR/legislative strategy to promote and enact a carbon tax. This was the fifth such meeting to advance the ”Price Carbon Campaign/Lame Duck Initiative: A Carbon Pollution Tax in Fiscal and Tax Reform.” An annoted copy of the meeting agenda appears at the bottom of this post.

Perhaps not coincidentally, earlier this week former GOP Congressman Bob Inglis of South Carolina launched the Energy and Enterprise Initiative, an organization promoting carbon taxes. Inglis obtained funding for the project from the Rockefeller Family Fund and the Energy Foundation, both left-leaning foundations.

Left-right coalitions can be principled and desirable. For example, I worked with environmental groups to help end the ethanol tax credit, and I work with them now to develop the case for eliminating the ethanol mandate. We collaborate because we share the same policy objective, even if not always for the same reasons. The free marketers want to end political meddling in the motor fuel market and the environmentalists want to end federal support for a fuel they regard as more polluting than gasoline. The common objective is consistent with each partner’s core principles.

But such cases are the exception rather than the rule. In general, when left and right join forces, the appropriate question is: Who is duping whom?

My colleague Myron Ebell sent out an alert about the AEI-hosted carbon tax cabal earlier today. It appears immediately below: [click to continue…]

Stop Whining about Pepco (because it’s your fault)

by William Yeatman on July 9, 2012

in Blog, Features

Post image for Stop Whining about Pepco (because it’s your fault)

Pepco has been getting a bum rap for its supposedly poor response to recent power outages. To be sure, I sympathize with anyone bereft of climate control for prolonged periods during a Mid-Atlantic summer, but this sticky situation is not the utility’s fault. If Pepco customers seek someone to blame, they should look in the mirror.

The cause of the controversial power outages was a rare “land hurricane” storm, which felled trees into power lines. Pepco’s critics claim that those trees shouldn’t have been there to begin with. In particular, they allege that Pepco for years has neglected its responsibilities to manage tree growth adjacent to its electricity distribution system. Pepco’s motive, according to the scapegoat-seekers, was to minimize costs, and thereby fatten its bottom line.

There are two big problems with this tidy narrative.

First, while it’s true that Pepco had every incentive to suppress expenditures on tree clearing, this is precisely what Maryland’s elected officials intended.

Allow me to explain. About 100 years ago, Progressive Party local politicians convinced themselves that electric utilities invariably consolidate into predatory “natural” monopolies. These progressives came to this conclusion despite the fact that electric utilities were competing furiously at the time in many municipalities. The ironic progressive solution to natural monopolies was…(wait for it)….a government-granted monopoly. In exchange for a state-certified monopoly “franchise” over a given service territory, utilities allowed state officials to set electricity rates. Thus, the electric industry for a century has operated under the thumb of the state. Not coincidentally, the electric industry hasn’t advanced technologically since the Progressive Era.

All 50 States eventually adopted this progressive arrangement. Moreover, they all adopted identical rate-setting mechanisms. Here’s how it works: For capital expenditures, like power plants or electric transformers, utilities are awarded a rate of return (i.e., a state-dictated profit), in addition to reimbursement of the original investment. For operations and maintenance (O&M) costs, however, state officials have taken a more jaundiced eye. Invariably, rate-setting for O&M costs are contentious—much more so than rate-setting procedures for capital costs. This is because O&M costs are much more ambiguous than large capital outlays, so there is more grey area over which to dispute. It’s easier for state regulators to object to O&M costs, and thereby “save” ratepayers money (and appease political masters), then it is for them to dispute capital costs.

So what does any rational utility do? It skimps on O&M costs, like tree clearing. Pepco shouldn’t be blamed for acting rationally in the face of Maryland’s backwards compensation system. To put it another way, don’t hate the player, hate the game. Or, better yet, change the game, by freeing the electricity market from the chains of socialism.

[click to continue…]

← Previous Entries

Next Entries →