GlobalWarming.org

• House Minority Leader Nancy Pelosi this week unveiled the Democratic Party’s priorities for the first session of the 114^th Congress. Notably absent from her to-do list was the mitigation of climate change, the awfulest, most dire, apocalyptic threat ever.

• Gasoline prices are below $2 at 40 percent of U.S. stations, reads a CNN headline. Which raises an important policy question: If greedy oil speculators control the oil market, as is maintained by many prominent progressives, then don’t we owe them our gratitude? I think so. [click to continue…]

It was inevitable. As soon as consumers and the economy start to enjoy significant relief from a decade of pain at the pump, the political class clamors for higher gas taxes and new carbon taxes.

The recent reduction in energy costs is remarkable. The U.S. Energy Information Administration (EIA) reports a 43% decline in the energy component of the Goldman Sachs Commodity Index during 2014. According to EIA, the drop in fuel prices was not due to “strong underlying trends in global economic growth” but rather to “supply-side factors unique” to energy-related commodities.

Fuel prices are down because the revolution in unconventional hydrocarbon production increased crude oil and natural gas supplies, and Saudi Arabia has failed to persuade other OPEC members and Russia to behave like a cartel and cut output. Crude oil spot prices recently dipped below $54 per barrel.

As a result, regular gasoline is now selling for about $2.20 a gallon — roughly one-third less than in Jan. 2014.

Credible estimates of the direct and indirect consumer benefits vary, but they’re all substantial.

 AAA: Americans saved $14 billion on gasoline in 2014 compared to 2013, with many drivers saving $15-$30 every time they fill up, compared to a year ago. As of Dec. 31, 2014 gas prices declined a record-breaking 97 days in a row, with further decreases predicted “as retail prices catch up with the steep declines in the cost of crude oil.”

Bloomberg: “Plunging fuel prices will free up as much as $60 billion over the next year that the consumer can spend on a fall jacket, a movie ticket or just more groceries.” That was in October, when gas prices were still north of $3.00/gal.

WSJ: Falling gas prices will give consumers the equivalent of a $75 billion tax cut. The tax cut is progressive because low-income households pay a larger share of earnings on energy. “Households earning less than $50,000 annually spent around 21% of their after-tax income on energy in 2012, up from 12% in 2001, according to analysts at Bank of America Merrill Lynch.”

NPR: If current gas prices continue, the typical household will have an extra $1,500 to save or spend in 2015. Already, “The average American is seeing a much bigger boost from falling gas prices than from pay raises. Cheap energy could finally put the U.S. economic recovery over the top.”

So naturally, ‘progressives’ now claim that, more than ever, a carbon tax is an idea whose time has come. Harvard economist Lawrence Summers, for example, argues in the Washington Post that “Oil’s swoon creates the opening for a carbon tax.” Does it? More importantly, should it?  [click to continue…]

Ladies and gentlemen, without further ado, the comedic stylings of Sen. Joe Manchin and American Petroleum Institute CEO Jack Gerard:

According to the “race to the bottom” thesis, unless the federal government intervenes, States would compete with one another to lower environmental standards in order to better attract industry. This proposition took hold in the mid-1970s, and was a major intellectual influence of the 1977 and 1990 Clean Air Act Amendments.

In a previous post, I summarized the work of law professors who argue that there’s no evidence—neither empirical nor theoretical—supporting the existence of a “race to the bottom.” In a similar vein, with this post, I intend only to highlight current events that militate heavily against the “race to the bottom” theory. [click to continue…]

In a December 11^th blog, I noted how confused was the Obama administration regarding whether low oil prices benefited Americans. On the one hand, Secretary of State John Kerry intimated to a Peruvian audience that oil “[is] not cheaper,” despite its low price, due to the climate impacts of burning fossil fuels; on the other, Treasury Secretary Jack Lew that same day told a New York audience that low oil prices are “like a tax cut to the economy” and that increased U.S. oil and gas production is a “great success story.”

Today, I’m thrilled to report that the Obama administration has definitively determined that low oil prices are indeed a benefit to the average American. Here’s the breaking news, according to Brian Hughes at the Washington Examiner:

The White House on Monday said that plummeting oil prices are “good for the U.S. economy”… “As a general matter, the impact of falling energy prices has been good for the U.S. economy,” said White House press secretary Josh Earnest, as the price of U.S. oil Monday dropped below $50 a barrel for the first time since April 2009. [click to continue…]

Yesterday, the Wall Street Journal published a letter ($) from EPA General Counsel Avi Garbow, the purpose of which is to defend the legality of the Clean Power Plan—the Obama administration’s marquee climate initiative—from a recent influential op ed ($) to the contrary by Harvard law professor Laurence Tribe. According to Mr. Garbow,

For more than 40 years, the EPA has established an enduring track record of faithfully following the laws enacted by Congress and the dictates of sound science to achieve the twin goals of protecting public health and the environment … The proposed Clean Power Plan follows that same path to create a pragmatic approach to reducing greenhouse gases, in the form of carbon-dioxide emissions, from power plants.

Mr. Garbow is wrong to claim that EPA is “faithfully following the laws.” Below, I’ve enumerated the various laws and standards of statutory interpretation violated by the rule.

• The Clean Power Plan violates the plain terms of the Clean Air Act (as conceded by EPA and NRDC);

• The Clean Power Plan violates EPA’s Clean Air Act implementing regulations and thereby runs afoul of the Administrative Procedures Act;

• The Clean Power Plan violates the boundaries of federal authority as established by the Federal Power Act;

• The Clean Power Plan violates the Supreme Court’s “Congress doesn’t hide elephants in mouse holes” doctrine of statutory interpretation;

• The Clean Power Plan violates the Constitution.* [click to continue…]

surely, this is the Koch bros’ fault

As is almost always the case, the Sunday morning political talkies omitted mention of climate change, the greatest, most terrible, apocalyptic threat of all time. All four of the major shows did, however, give extensive mention to the Keystone XL Pipeline, either during direct interviews (e.g., with Sen. John Barrasso on NBC’s Meet the Press) or in group segments (a la ABC This Week’s Powerhouse Roundtable). Of all the Keystone mentions, the most perplexing was lent by Sen. Charles Schumer, on CBS’s Face the Nation. Below, I’ve punched up a transcript of the pertinent exchange. And at the bottom of this blog, I’ve reposted video of the entire interview.

Bob Schieffer: We understand the first thing the Republicans are going to do is pass Keystone XL legislation…what do you see happening there?

Sen. Schumer: well look, our republican colleagues say that this is a jobs bill, but that’s really not true at all. By most estimates, it would create several thousand temporary construction jobs, and on 35—35!— permanent jobs. Compare that to the number of jobs created in the economy last month 300,000. So democrats are dubious of this. But we’re going to introduce amendments that will make this more of a jobs bill. We’re going to introduce an amendment to say that the steel used in the pipeline, should be made in America, to make American jobs. We’re going to introduce an amendment that says that the oil that’s used in the pipeline will have to be used in America. Imagine building a pipeline that ships Canadian oil across America to be exported to other countries. Uhhh.. from Texas..that makes no sense at all in terms of the American working people’s interests. So we’re going to say that the oil should stay here. And finally, we’re going to add an amendment to introduce clean energy jobs…[Formatting added]

This is quite interesting. According to FedEx, Schumer’s New York is the #3 exporting State in the U.S. Its top two exports, per U.S. Census Bureau data, are gold and diamonds. Pursuant to Sen. Schumer’s logic, the “American working people’s interests” would be best served if the U.S. Congress banned exports of gold and diamonds from New York, right? Why can New York benefit from exporting a raw material (gold) and a processed raw material (cut diamonds), but North Dakota shouldn’t benefit from the export of a raw material (oil) nor Texas benefit from exporting a processed raw material (refined gasoline)? Sen. Schumer’s inconsistent position makes no sense, other than to serve himself a cake for having and consuming. [click to continue…]

For reasons of self-preservation, 2015 figures to be a very busy year for regulators in the Obama presidency. Under the Congressional Review Act (CRA), Congress has 60 business days from the promulgation of a major regulation to vote on a resolution that would vacate the rule. Due to the Presidential veto, however, the Congress’s CRA prerogative is usually toothless. Indeed, the only practical window for a successful CRA challenge occurs when the 60 day time limit (for Congress to act) overlaps with a new and like-minded presidential administration. And because the Congress only conducts, on average, about 10 business days a month, the Obama administration faces a deadline of about May 2016, by which it must promulgate all of its major regulations, in order to ensure that any one them cannot be subject to a successful Congressional Review Act resolution (under his successor President). As such, the clock is ticking, and most of this administration’s regulatory action will have to be wrapped up in the upcoming year. Below, I’ve listed what we can expect for 2015.

EPA’s Carbon Pollution Standards (Due Date: Any Day Now)

On January 8, 2014, EPA proposed a Clean Air Act rule to control greenhouse gas emissions from new coal fired power plants, known as the Carbon Pollution Standards. In practice, the regulation would effectively ban the construction of new coal-fired power plants, by requiring them to use carbon capture and sequestration, a technology that is far from ready for prime time. Under the Clean Air Act, EPA has one year from proposal to finalize a rule; it is most certain that the agency will miss this deadline (i.e., January 8, 2015). Nonetheless, the regulation is definitively in the pipeline and should be issued in the upcoming days.

The rule’s statutory foundations are sketchy, as we explain in CEI comments to EPA. And here, I give the top six reasons why the regulation is illegal as proposed.

In fact, EPA is taking a big risk if it decides to stay the course, and push the limits of what it could achieve with this rule. If the rule is vacated by Article III courts, then EPA loses its legal basis for its marque climate policy (the Clean Power Plan), as my colleague Marlo Lewis explained yesterday.

EPA’s “Natural Gas Strategy” (Due Date: January)

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The integrated carbon capture and storage (ICCS) project at the Boundary Dam Power Station has scooped up its first major award, even though it has been fully operational for less than three months. — Estavan Lifestyles, Dec. 17, 2014

The economics only work at Boundary Dam in Saskatchewan for two reasons: a C$240 million government subsidy and a ready nearby customer for the carbon in Calgary-based Cenovus. . . .The CO2 is transported 66 kilometers (41 miles) to Cenovus Energy Inc. (CVE)’s oil fields where it is buried underground to coax additional crude from the reservoirs. — Bloomberg News, Dec. 4, 2014

The news items above point to one of the Clean Power Plan’s (CPP) fatal legal flaws.

The CPP requires states to adopt CO2 performance standards for existing fossil fuel power plants. As such, the CPP is unlawful if its legal prerequisite — EPA’s proposed CO2 performance standards for new power plants, the so-called Carbon Pollution Standards (CPS) rule — is unlawful.

The CPS rule proposes a performance standard of 1,100 lbs. CO2/MWh for new coal power plants. Coal power plants can meet the standard only by installing carbon capture and storage (CCS) technology. Under §111(a) of the Clean Air Act (CAA), performance standards are to reflect the “best system of emission reduction” (BSER) that has been “adequately demonstrated,” taking “cost” into account. EPA claims CCS is the adequately demonstrated BSER for new coal power plants. Applesauce!

CAA §111(a) requires that performance standards be “achievable.” The D.C. Circuit Court of Appeals interprets the term to mean achievable for the industry as a whole (National Lime Association v. EPA, 627 F. 2d 416 at 443). However, as Bloomberg points out, the Boundary Dam Power Station is the world’s only utility-scale CCS power plant in commercial operation, and the “economics only work” because of two favorable circumstances atypical for the industry as a whole: a generous subsidy and proximity to an enhanced oil recovery (EOR) operation.

With the federal deficit still near half-a-trillion dollars, Congress is not about to pony up lavish subsidies for CCS power plants, especially when natural gas combined cycle (NGCC) power plants easily meet a more stringent CO2 emission performance standard (79 FR 1486) at much less cost (EIA, Table 1, p. 6). EPA identifies only 12 states with significant EOR operations (79 FR 1474). Coal power plants not located near oil fields would not have a market for their captured CO2. Thus, on two separate counts, the proposed standard is not achievable.

CCS combined with EOR is not BSER for an even more fundamental reason, first noted by my colleague William Yeatman. On a lifecycle basis, CCS + EOR produces more CO2 emissions than a conventional coal power plant. Without EOR, CCS is too costly to qualify as “adequately demonstrated.” But with EOR, CCS cannot be a “best” system of emission reduction because it increases rather than reduces emissions.

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