Blog

Earlier this week, I wrote about how Washington Post Wonkblog contributor Brad Plumer misread a report on which he blogged. Today, his colleague Ezra Klein devoted another Wonkblog post to an erroneous thesis—namely, that opposition to climate policies like cap-and-trade is a strictly partisan matter.

The impetus for Klein’s mistake was a New York Times column by David Brooks, titled “A Sad Green Story.” In the piece, Brooks argues that the prospects for a policy to mitigate climate change have effectively died for two reasons: (1) Al Gore is a highly partisan figure; and (2) a few high-profile taxpayer investments in green energy that failed (Solyndra, A123, et al.). Most of Brooks’ op-ed is given to the latter point, as is evident by his conclusion:

Global warming is still real. Green technology is still important. Personally, I’d support a carbon tax to give it a boost. But he who lives by the subsidy dies by the subsidy. Government planners should not be betting on what technologies will develop fastest. They should certainly not be betting on individual companies.

This is a story of overreach, misjudgments and disappointment.

Klein, however, took issue with Brooks’ “passivity.” According to his Wonkblog post:

This isn’t a story of overreach, misjudgements [sic], and disappointment. It’s a story of Republicans putting raw partisanship and a dislike for Al Gore in front of the planet’s best interests. It’s a story, though Brooks doesn’t mention this, of conservatives building an alternative reality in which the science is unsettled, and no one really knows whether the planet is warming and, even if it is, whether humans have anything to do with it. It’s a story of Democrats being forced into a second and third-best policies that Republicans then use to press their political advantage.

It’s a story, to put it simply, of Democrats doing everything they can to address a problem Brooks says is real in the way Brooks says is best, and Republicans doing everything they can to stop them. And it’s a story that ends with Democrats and Republicans receiving roughly equal blame from Brooks.

Klein has it wrong. Quite contrary to what he would have readers believe, opposition to climate policy is one of the very few areas of bipartisan agreement on Capitol Hill. On the one hand, the issue breaks down along geographic lines, rather than partisan ones, such that politicians from areas dependent on the production or use of fossil fuels tend to oppose climate policies, whether they are Republican and Democrat. On the other hand, politicians from both parties are always reluctant to enact policies, like a cap-and-trade, that engender economic hardship for their constituents. As a result, global warming is a low priority across the partisan divide. Consider:

• On June 6, 2008, in the immediate wake of the Senate’s rejection of the Lieberman-Warner cap-and-trade, which had been extensively reworked by Senator Barbara Boxer, 10 Senate Democrats—about 20 percent of the caucus at the time—sent Senator Boxer a letter explaining that they voted or would have voted against her cap-and-trade because it would cause “undue hardship” for their constituents.

• On June 26, 2009, 40 Democrats in the House of Representatives voted against the American Clean Energy and Security Act, a cap-and-trade bill.

• During the 2010 summer, Senate Democrats held weekly caucus meetings to build support for a Senate companion bill to the American Clean Energy and Security Act. But the caucus never rallied behind the measure, and it was put on ice, without ever reaching the Senate floor for a vote.

If, as Klein believes, Democrats are “doing everything they can to address” climate change, then the 111th Congress would have enacted a cap-and-trade, at a time when Democrats held both Chambers and the Presidency. Instead, 40 House Democrats voted against the measure, which was subsequently shelved by Senate leadership.

[click to continue…]

O…M…G! On energy policy, President Obama sounded better than Romney during the debate last night.

Of course, “sounded” is the operative word, as the President’s energy discourse wholly discounted reality. Here on planet earth, his administration is waging a war on energy. Oil and gas production is booming—but only on state and private lands unencumbered by the red tape and bureaucratic foot-dragging that has inhibited drilling on federal lands. In the last year, President Obama’s EPA promulgated two regulations that ban new coal-fired power plants (as if one wasn’t enough?). And when it’s not opposing energy that works, the Obama administration throws good money after bad trying to cultivate “green jobs” at companies that cannot compete without an everlasting inflow of taxpayer help.

That’s the real President Obama. Last night’s President Barack Obama was nothing like him. Debate Obama was an unabashed supporter of fossil fuel energy. ”Here’s a roundup of choice phrases:

On Oil, President Obama compared his record favorably to that of a Texas petroleum executive:

“We’re actually drilling more on public lands than in the previous administration and my — the previous president was an oil man.”

On Natural Gas, President Obama can’t get enough!:

“We continue to make it a priority for us to go after natural gas. We’ve got potentially 600,000 jobs and 100 years worth of energy right beneath our feet with natural gas…

…. And natural gas isn’t just appearing magically. We’re encouraging it and working with the industry.”

On Coal, President Obama warned that his opponent was an enemy of coal (by comparison, presumably, Obama was a friend of coal):

“And when I hear Governor Romney say he’s a big coal guy, I mean, keep in mind, when — Governor, when you were governor of Massachusetts, you stood in front of a coal plant and pointed at it and said, “This plant kills,” and took great pride in shutting it down. And now suddenly you’re a big champion of coal.”

Notably, last night’s President Obama never once mentioned “global warming.” I kinda liked last night’s Obama! I wish he were the Obama that actually exists. Alas, real-life Obama is a far cry from Debate Obama.

Romney, on the other hand, used his dialogue on energy policy to trumpet two harmful energy shibboleths: “energy independence” and “all of the above.” The problem with the latter (“all of the above”) is that it draws no line to leave out the inane. It’s an inherently imprudent slogan. “Energy independence” is equally terrible. We participate in international oil markets because that’s the cheapest way to meet our aggregate demand for products we want. This is not a problem and it doesn’t warrant a national energy policy.

[click to continue…]

Last week, I blogged about how Grist’s David Roberts confused a recent study by the Brattle Group. This week, Washington Post Wonkblog’s Brad Plumer made the same mistake.

In the oft-misread study, Brattle Group analysts estimate how many coal-fired power plants will retire rather than install expensive-yet-pointless regulations imposed by the Environmental Protection Agency. A key determinant of how the market will respond to EPA regulations is the price of natural gas, a fuel that competes with coal. Simply put, the lower the price of gas, the more economical it would be for the owner of a coal-fired power plant to cease operations rather than pay for the EPA-mandated retrofits. Both Plumer and Roberts misunderstand the basic parameters of the study, such that they attribute coal power plant retirements solely to relatively low natural gas prices. In fact, these retirements are derivative of a decision faced by individual coal power plant operators across the country: Whether to install hundreds of millions–even billions–of unnecessary capital costs imposed by EPA, in an electricity market characterized by historically cheap gas.

Here’s Plumer:

Over the past few years, natural gas has become extraordinarily cheap, thanks to refined “fracking” techniques that allow companies to extract more gas from shale rock. What’s more, wind turbines have been sprouting up around the country and are getting steadily cheaper. The result? Both energy sources have been displacing coal. That would have occurred regardless of anything the EPA did.

And here’s Roberts:

The headline news: Brattle is substantially upping its projection of how many coal plants will retire, by about 25 GW. That’s huge. But it’s not happening because of EPA regulations.

I bolded and italicized the key sentences.

As I noted in my previous post, these power plant retirements likely would not have occurred absent EPA regulations. This is due to the simple fact that coal is less expensive than gas in most of the country, and it is projected to be significantly cheaper than gas in all regions. I know this because it says so on page 2 of the Brattle Group report.

[Update 3:14 P.M., 15 October 2012: Mr. Plumer has since rewritten the post. I can't tell exactly how so, because he did not track changes, but the piece is completely different. In a nutshell, he reworked it such that the post no longer makes the error I note above. Because that error is a fundamental misreading of his subject matter, the edits were significant. I tried to engage him in the comments section, but he did not respond.]

CEI Senior Fellow Chris Horner last week sat down with Media Research Center TV to discuss global warming alarmism. Below is video of the interview.

On Wednesday, the Commerce Department levied tariffs from 18 percent to 240 percent on solar panels imported from China. At best, this silly policy will increase the price of electricity in America; at worst, it could be the first salvo in a harmful trade war.

Renewable energy sources like solar and wind power are expensive and unreliable, so they cannot compete with conventional energy sources in the electricity market. Instead, demand for green energy is established by Soviet-style production quotas, known as renewable energy standards. More than 30 states have enacted such standards, which force consumers to use increasing amounts of green energy.

The cheapest way to achieve these solar energy consumption mandates is to import Chinese solar panels, due to the simple fact that solar panels manufactured in China are cheaper than solar panels manufactured in America. By adding an import tax on Chinese solar panels, the Obama administration is making electricity more expensive for citizens subject to renewable energy quotas.

And that’s the best case! Invariably, trade tariffs are tit-for-tat measures. China is likely to respond in kind. This is the slippery slope to trade wars, the impact of which would be devastating to the fragile global economy.

Proponents of the import duties claim that they are necessary so that the U.S. can win a race with China to capture global market share for green energy manufacturing. This reasoning is ridiculous. As I explained above, the market for green energy is wholly a function of government favors. Unfortunately for the green energy industry, political winds are quick to change. As costs mount, politicians will rescind the government’s support, and markets will crash. It’s already happened elsewhere. Now, it’s happening here: The American wind industry claims that it will shed half its workforce if the Congress allows a single tax credit to expire.

Plainly, so-called “sustainable” energy is reliant on unsustainable government support. It should go without saying that this is a poor business model. When the renewable energy bubble bursts, the global industry leader will be the biggest loser. With that in mind, the supposed race with China for green technological supremacy is one the U.S. would be wise to forfeit.

[N.B. I made these points in an interview with Press TV, available below.]

Yesterday at Grist, David Roberts posted about a recent Christian Science Monitor article titled, “Study: EPA Regulations Squelch U.S. Coal Industry,” which he labeled “misleading dreck.” According to Roberts,

The story, from “guest blogger” Charles Kennedy, refers to a report [PDF] from the research consultancy Brattle Group. So I went and read the report. And it doesn’t say what Kennedy says it says. At all. In fact, it says something close to the opposite….

The report is an update of its brief from late 2010 on potential coal-plant retirements. The headline news: Brattle is substantially upping its projection of how many coal plants will retire, by about 25 GW. That’s huge. But it’s not happening because of EPA regulations. In fact, say the authors, the change is “primarily due to changing market conditions, not environmental rule revisions, which have trended towards more lenient requirements and schedules” (his emphasis).

Roberts is plainly confused when he writes that “it’s not happening because of EPA regulations.” The entire point of the Brattle Group’s 2010 and 2012 analyses is to forecast how the electricity market will respond to scores of billions of dollars in capital costs being imposed by the EPA on the coal industry. Thus, in a 2010 study, the Brattle Group concluded that 50 GW to 67 GW of coal-fired electricity would retire rather than install EPA-mandated retrofits, given 2010  market conditions (i.e., electricity demand and natural gas prices). And in a 2012 update of the 2010 report, the Brattle Group concluded that 59 GW to 77 GW of coal-fired electricity would retire rather than install EPA-mandated retrofits, given current market conditions (i.e., electricity demand and natural gas prices).

In each analysis, the direct impetus for the retirement of coal units is the cost of retrofits required by EPA regulations. And the cheaper the price of natural gas, the more utilities will opt to fuel switch or participate in the wholesale market, rather than pay for retrofits at their coal-fired power plants. This is why the updated 2012 Brattle Group report estimated a 25 GW increase in coal power plant retirements over the 2010 report–because gas prices are still depressed, so it is more economical for utilities to switch fuels than it is for them to comply with EPA requirements. Roberts, however, implies that utilities would choose to shutter coal power plants based on the price of natural gas alone; he fails to acknowledge that EPA regulations remain the underlying cause of the utilities’ choice to do so.

Given that the price of coal is projected to be significantly cheaper than the price of gas—as it states on page 2 of the 2012 Brattle Group report—it is likely that most, if not all, of these coal-fired power plants would continue operating, were their owners not forced to spend hundreds of millions, even billions of dollars, on EPA-mandated retrofits. To put it another way, natural gas can beat coal, but only with EPA’s help. For similar reasons, Chesapeake Energy (a natural gas company) gave $25 million to Sierra Club’s “Beyond Coal” campaign. Because a war on coal is great for gas!

Now, it would be one thing if these retrofits actually served a public health purpose. Alas, they don’t, which was the subject of a previous post. Instead, EPA is targeting the coal industry with costly, nonsensical regulations for no discernible reason other than to placate the environmentalist wing of the President’s political party. Of course, this is crummy policy making, especially in the midst of a difficult economy.