In a previous post, I compared renewable energy spending in the 2009 Stimulus to a green albatross burdening the President. I argued that Stimulus spending was inherently wasteful, because politics invariably corrupts government’s investment decisions. The result is taxpayers losses on bankrupt companies that existed only by the grace of political favoritism, a la Solyndra. I predicted the green stimulus would haunt the President, in the form of a slow drip public relations nightmare, as a litany of bad investments go belly-up in the run up to the 2012 elections.
Earlier in the week, Stimulus beneficiary Evergreen Energy bit the dust. Today, Ener1, a manufacturer of batteries for electric vehicles and recipient of Stimulus largesse, filed for bankruptcy. As is noted by the Heritage Foundation’s Robert Bluey at The Foundry, the Obama Administration mistakenly deemed Ener1 a success a year ago.
Mr. President, are you still sure you want to “double down” on renewable energy giveaways?
During Tuesday night’s State of the Union address, President Barack Obama called for an “all of the above” energy policy. My colleague Dr. David Kreutzer, Research Fellow in Energy Economics and Climate Change at the Heritage Foundation, offers the following observation regarding the President’s pitch:
Obama’s version of “all of the above.”
Which energy policy is best?
a. Subsidize solar energy, wind energy, and biofuels
b. Mandate the consumption of solar energy, wind energy, and biofuel
c. All of the above
d. Allow markets to produce petroleum, natural gas, and coal at affordable prices
In Capitalism at Work: Business, Government, and Energy, Institute for Energy Research’s Robert Bradley points out that the global warming scare is really a response to long-forgotten scares of old. The Malthusian theory that mankind would exhaust their resources was debunked repeatedly, energy prices fell and production increased dramatically, outpacing all projections. Those who demanded the U.S. leave fossil fuels behind needed a new argument, and they found it with the theory of anthropogenic global warming.
Capitalism at Work was released in 2009
Measurements in 1957/58 first documented the increasing concentration of (CO2) in the atmosphere, portending a warming of the Earth’s surface by an enhanced greenhouse effect. This was a theoretical concern only. The worry of the 1970s was anthropogenic global cooling, a phenomenon linked to increasing sulfur dioxide (SO2) emissions from coal and oil combustion. Mankind’s energy emissions were culpable in either direction.
The global cooling trend that had begun in the 1940s changed into a warming trend by the late 1970s. As early as 1979, the Carter administration debated whether its proposed synthetic fuels program would increase global warming. Synfuel production and combustion was estimated to emit 40 percent more CO2 than directly burning coal to generate the same energy. Gus Speth, acting chairman of the President’s Council on Environmental Quality, and soon-to-be co-founder of the Natural Resources Defense Council (NRDC), warned Carter personally about the “very important and perhaps historic” scientific development.
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Earlier today, a woman from South California found her Toyota Prius vandalized. A classic case of ‘who done it’? – more like what done it. Heather Patron claims that the energy efficient window installed in a neighbor’s condominium is melting the plastic parts of her car and other cars in her carport.
“I just don’t feel like it’s fair,” says Patron. “I feel like it needs to be known that this is happening. And a lot of people probably have damage out there, that they aren’t aware that it’s the windows that are causing this.”
What brought her to this cathartic conclusion? After Toyota assured her that there was nothing wrong with her Prius, Patron apparently observed a “powerful beam of light” that was reflecting off of the said window, emitting a beam on her carport.
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This coming Monday, January 30, CEI will hold a Capitol Hill briefing regarding recent congressional proposals to fund federal surface transportation investments by directing into the Highway Trust Fund revenue raised from expanded energy production. This is widely known as “drilling for roads.” While we certainly support expanding domestic oil and gas drilling, there are major problems with such a proposal. I previously blogged on this topic here and here.
If the federal government is going to continue funding highways at the level that it currently does, it will need additional revenue. The current program faces several major challenges:
- Much of the Interstate system is nearly 50 years old, the intended life of the infrastructure. This means that much of it will need to be completely reconstructed — not just resurfaced — in the near future.
- The federal fuel excise tax rates have not been raised since 1993, and are currently set at 18.4 cents per gallon of gasoline and 24.4 cents per gallon of diesel. Inflation has reduced the buying power of those taxes by well over one-third, and federal fuel taxes raise the vast majority of Highway Trust Fund revenue. Furthermore, a fifth of Highway Trust Fund revenue is now diverted to mass transit projects.
- It is quite likely that passenger vehicle-miles traveled are plateauing, or at least the rate of increase of passenger VMT will be significantly lower in the future than it has been in the past. Freight VMT, however, will continue to increase, which will put more wear-and-tear on our highways per vehicle-mile traveled.
- Finally, the U.S. vehicle fleet is expected to become significantly more fuel efficient in the coming decades [PDF, see p. 30; or PDF, see p. 13], which will reduce the user taxes collected per vehicle-mile traveled. Due to this reality, there are also major equity concerns, as it is the upper-income drivers who can afford to purchase the most fuel efficient vehicles, such as hybrids. This means that the fuel tax burden will further shift to lower-income drivers.
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Last night, President Barack Obama said that it’s time “to double-down on a clean energy industry that never has been more promising.”
Below, I reprint an excellent response to the President’s green energy nonsense, by Dr. David Kreutzer, Research Fellow in Energy Economics and Climate Change at the Heritage Foundation.
Saying the clean energy industry has never been more promising is damning with faint praise. The following have also never been more promising than they are right now:
- Time travel
- Anti-gravity boots
- Teleportation
- Smart pills
- Everything-proof force fields
- Flying cars and
- High-speed rail
Why does Obama want to double down on just clean energy and high-speed rail?
President Obama did what some of us have counseled one should expect when the Republicans wedded themselves to the inane “all of the above” slogan to characterize or, alternately, substitute for an argument for fixing the woes caused by misguided government energy policies, programs and schemes: Namely, he used it to argue for more handouts to the welfare-case black holes like wind and solar which have been around since the ’60s—the 1860’s—and have received government supports for the past five decades.
That’s the problem with such slogans in lieu of educating and principle: “All of the above” is intended to be a blank slate on which voters can cast their own notions, yet it draws no line to exclude the inane, wasteful or outright economically destructive.
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During last night’s State of the Union address, President Barack Obama made the eye-catching claim that, “Right now—right now—American oil production is the highest that it’s been in eight years.” In fact, this is malarkey, because the increase in oil production has nothing to do with the President’s policies. Indeed, the increase occurred in spite of this administration’s actions. As is explained by our friends at the Institute for Energy Research:
The reality is that oil production on federal lands is falling, while production on private and state lands is rising.[2] There is a long term trend of decreasing oil production on federal lands. In fact, oil production on federal lands has fallen by 43 percent over the past 9 years according to the Obama administration’s Energy Information Administration.[3] And it has dropped rapidly on President Obama’s watch.
IER provides this handy graph in order to help make its point:
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During last night’s State of the Union Address, President Barack Obama drew a parallel between government support for fracking and green energy:
And by the way, it was public research dollars, over the course of 30 years, that helped develop the technologies to extract all this natural gas out of shale rock –- reminding us that government support is critical in helping businesses get new energy ideas off the ground. (Applause.)
Now, what’s true for natural gas is just as true for clean energy….Because of federal investments, renewable energy use has nearly doubled, and thousands of Americans have jobs because of it.
This comparison is grossly inapt.
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Ironically, in his State of the Union Address tonight, President Obama railed against “outsourcing.” That was funny, because he has spent billions of tax dollars on subsidizing the outsourcing of American jobs to foreign countries.
“79 percent” of all green-jobs funding in Obama’s $800 billion stimulus package went to foreign companies, with the largest payment going to a bankrupt Australian company. For example, the Obama Administration
spent $1.6 billion on Chinese and other foreign wind power. The practical effect of those subsidies was to
outsource American jobs. ABC News reported on the
subsidies for Chinese wind turbines contained in the stimulus package:
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