Should the GOP Champion Climate Change as a National Security Issue?

by Marlo Lewis on September 19, 2012

in Features

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Yes, argues Daveed Gartenstein-Ross in The Atlantic (Sep. 17, 2012). Gartenstein-Ross is the author of Bin Laden’s Legacy: Why We’re Still Losing the War on Terror. I haven’t read the book, but judging from the favorable reviews, Gartenstein-Ross has the ear of defense hawks of both parties. Does he offer sound advice on global warming?

In his Atlantic article, Gartenstein-Ross chides Republicans for taking a “decidely unrealistic tack” on climate change. “The available evidence overwhelmingly suggests that climate change is real; that extreme weather events are increasing; and that this dynamic will have an impact on American national security, if it hasn’t already,” he avers. He goes on to blame this summer’s drought on global warming, citing NASA scientist James Hansen’s claim that the 2003 European heat wave, the 2010 Russian heat wave, and the 2011 Texas-Oklahoma drought have “virtually no explanation other than climate change.” (For an alternative assessment, see these posts.) 

Since 2010, notes Gartenstein-Ross, the Department of Defense has classified climate change as a conflict accelerant — a factor exacerbating tensions within and between nations. Well, sure, what else is Team Obama at DOD going to say in an era of tight budgets when no rival superpower endangers our survival? The concept of an ever-deepening, civilization-imperilling climate crisis is an ideal mission-creep accelerant. 

Gartenstein-Ross concludes by urging Republicans to face “reality” and take action on climate change. However, he offers no advice as to what policies they should adopt. Does he favor cap-and-trade, carbon taxes, the EPA’s greenhouse gas regulatory cascade, ’all of the above’? Gartenstein-Ross doesn’t say. He ducks the issue of what economic sacrifices he thinks Republicans should demand of the American people. 

Below is a lightly edited version of a comment I posted yesterday at The Atlantic on Gartenstein-Ross’s article: [click to continue…]

EPA Puts a Price on Nothingness in Montana: $82 Million

by William Yeatman on September 18, 2012

in Blog

Today, the Environmental Protection Agency imposed on Montana a Federal Implementation Plan under the Regional Haze Rule that will cost scores of millions of dollars, but achieve no discernible purpose.

Specifically, EPA is requiring $82 million in unnecessary capital expenditures at the Colstrip coal-fired power plant located east of Billings, Montana, in order to engender an ‘improvement’ in visibility that is imperceptible to the eye.

Don’t take my word for it! See the images directly below. They depict the visibility “benefits” wrought by EPA’s regulations. They were generated using WinHaze visibility modeling software, with inputs from EPA data.

Notably, these mandated controls are 500% more expensive than what EPA’s standing rules presume to be “cost-effective.” Given that the benefits are invisible, the severity of these Regional Haze requirements suggests that EPA’s motivations were political.

Remember, environmental special interests are a significant component of the President’s organizational base. And for them, coal is evil, because it is “dirty.” That’s why, way back in 2008, then-Senator Barack Obama told the San Francisco Chronicle editorial board that he would “bankrupt” the coal industry if elected President. Now, EPA is following through on the President’s promise. The powers of the presidency are the means by which he satisfies the environmentalists’ desired ends. To be sure, it’s an American outrage that the fate of an entire industry can thus be subjected to the capricious winds of presidential politics, but that’s a different blog post. For now, it suffices to say that this Administration is imposing billions of dollars of costs, in the midst of difficult economic times, in order to placate a political constituency, and for nothing else.

Another Study Debunks RFA/Vilsack Claim Ethanol Reduced Gas Prices by $1.09/Gal

by Marlo Lewis on September 17, 2012

in Features

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A new study by the Energy Research Policy Foundation, Inc. (EPRINC) further debunks the popular talking point of USDA Secretary Tom Vilsack and the Renewable Fuel Association (RFA) that ethanol reduced gasoline prices by $0.89/gal in 2010 and $1.09/gal in 2011.

As noted previously on this site (here and here), Vilsack and the RFA tout a study by Iowa State University’s Center for Agricultural Research and Development (CARD), which concluded that if ethanol production had remained at year 2000 levels, the U.S. motor fuel supply would have been billions of gallons smaller and, thus, significantly pricier in 2010 and 2011. Subsequent studies by FarmEcon, LLC and MIT/UC Davis spotlighted CARD’s unrealistic assumption that the refining industry would not have increased gasoline production to meet consumer demand in the absence of policies mandating and subsidizing the blending and sale of increasing quantities of ethanol as motor fuel.

The EPRINC study (Ethanol’s Lost Promise: An Assessment of the Economic Consequences of the Renewable Fuel Mandate) shows, in addition, that if ethanol output had remained constant at the year 2000 level, refiners could have made up for the shortfall without importing or even refining “a single additional barrel of crude oil.” The Renewable Fuel Standard (RFS) has increased ethanol production by about 400,000 barrels per day (bbl/d) since 2000. A “remarkably small operational adjustment” in refineries’ product mix – a 1.8% increase in gasoline production — could have covered an ethanol shortfall of 400,000 bbl/d in 2011.

    [click to continue…]

Another Skewed Poll ‘Finds’ Voters Support Green Agenda

by Marlo Lewis on September 13, 2012

in Features

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An opinion survey commissioned by the Sierra Club supposedly shows that Oklahoma voters overwhelmingly favor the expansion of wind and solar power and the phase out of coal-fired power plants. An obvious implication is that Oklahoma Sen. James Inhofe, the Senate’s leading critic of the Obama administration’s anti-coal policies, is out of step with his constituents.

This is an old trick (see my post on a similar, NRDC-sponsored poll of Michigan voters in House Energy and Commerce Chairman Fred Upton’s district). When a pollster asks leading questions, he can usually elicit the answers his client is paying for.

In the Sierra Club-sponsored survey of 500 registered Oklahoma voters, 78% of those polled said they generally support expanded use of renewable energies like wind and solar power, and 62% said they would support phasing out some of the State’s coal-fired power plants.

The Sierra Club’s polling strategist waxed enthusiastic about the results, Greenwire reports:

“The results of this poll are remarkable,” Sierra Club polling strategist Grace McRae said in a statement.

“Across the nation, support for clean energy is high, but in Oklahoma, nearly 8 out of 10 voters support expanding use of clean energy resources like wind and solar. Oklahoma’s leaders and utilities should take note: Oklahomans want clean energy.”

Okay, let’s look at how the survey reaches those ”remarkable” results. [click to continue…]

EU Gropes — in Vain — for Carbon Price Sweet Spot

by Marlo Lewis on September 12, 2012

in Features

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Two stories reprinted in Climatewire today provide a funny reminder that politicians can’t set the ‘right’ price of a commodity even when the fate of the Earth supposedly hangs in the balance. 

On Tuesday, Norway decided to follow European Union (EU) policy and establish a carbon ‘compensation fund.’ The program will bribe pay some 80 energy-intensive firms $90 million not to move their operations overseas. The government contends that without such payments, the EU Emission Trading System (ETS), adopted to implement the Kyoto Protocol, will trigger (or accelerate) the flight of capital, jobs, and emissions abroad. Reuters reports:

“The purpose is to prevent the Norwegian manufacturing industry from moving their enterprises to countries with less strict climate regulations,” Prime Minister Jens Stoltenberg said.

Changes to the EU’s Emissions Trading Scheme (ETS) from next year allow member states to compensate big energy users, like aluminum or steel producers, for costs linked to carbon emissions. The plan is to prevent higher costs driving business out of Europe.

Although ETS carbon prices are high enough to make EU manufacturers uncompetitive, those prices are not high enough (according to critics) to spur technology innovation*:

“This shows some of the fundamental problems with emissions trading,” said Steffen Kalbekken, head of research at the Center for International Climate and Environmental Research in Oslo. “We are getting the worst of two worlds.

“The (carbon) prices are too low to produce the technological shift we need” to force big emitters to clean up, he said. “But they are still high enough to cause some problems for industry and international competition.”

EU carbon permit prices for December have fallen to 7.74 Euros ($9.98) per ton — lower than three of the U.S. Government’s four ‘social cost of carbon‘ estimates. The European Commission is now “pressing ahead with a plan to counter an oversupply of CO2 permits in the EU emissions trading market after a 37 percent drop in prices last year,” Bloomberg reports. The commission “is preparing a proposal to postpone sales of an as-yet unspecified number of allowances in 2013.”

Of course, if that plan goes through, and carbon permit prices rise, European countries may have to pony up even larger subsidies to keep manfacturers from moving to Asia and South America.

So are ETS carbon permit prices too low or too high? They’re high enough to spur innovative ways to get the heck out of Europe asap. [click to continue…]

Ethanol Mandate Waiver: Decks Stacked Against Petitioners

by Marlo Lewis on September 10, 2012

in Blog, Features

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The Governors of Georgia, Texas, Arkansas, Delaware, Maryland, New Mexico, and North Carolina have petitioned EPA Administrator Lisa Jackson to waive the mandatory ethanol blending requirements established by the Renewable Fuel Standard (RFS). The petitioners hope thereby to lower and stabilize corn prices, which recently hit record highs as the worst drought in 50 years destroyed one-sixth of the U.S. corn crop. Corn is the principal feedstock used in ethanol production.

Arkansas Gov. Mike Bebe’s letter to Administrator Jackson concisely makes the case for regulatory relief:

Virtually all of Arkansas is suffering from severe, extreme, or exceptional drought conditions. The declining outlook for this year’s corn crop and accelerating prices for corn and other grains are having a severe economic impact on the State, particularly on our poultry and cattle sectors. While the drought may have triggered the price spike in corn, an underlying cause is the federal policy mandating ever-increasing amounts corn for fuel. Because of this policy, ethanol production now consumes approximately 40 percent of the U.S. corn crop, and the cost of corn for use in food production has increased by 193 percent since 2005 [the year before the RFS took effect]. Put simply, ethanol policies have created significantly higher corn prices, tighter supplies, and increased volatility.

Agriculture is the backbone of Arkansas’s economy, accounting for nearly one-quarter of our economic activity. Broilers, turkeys, and cattle — sectors particularly vulnerable to this corn crisis — represent nearly half of Arkansas’s farm marketing receipts. Arkansas poultry operators are trying to cope with grain cost increases and cattle familes are struggling to feed their herds.

Section 211(o)(7) of the Clean Air Act (CAA) authorizes the EPA to waive all or part of the RFS blending targets for one year if the Administrator determines, after public notice and an opportunity for public comment, that implementation of those requirements would “severely harm” the economy of a State, a region, or the United States. Only once before has a governor requested an RFS waiver. When corn prices soared in 2008, Gov. Rick Perry of Texas requested that the EPA waive 50% of the mandate for the production of corn ethanol. Perry, writing in April 2008, noted that corn prices were up 138% globally since 2005. He estimated that rising corn prices had imposed a net loss on the State’s economy of $1.17 billion in 2007 and potentially could impose a net loss of $3.59 billion in 2008. At particular risk were the family ranches that made up two-thirds of State’s 149,000 cattle producers. Bush EPA Administrator Stephen Johnson rejected Perry’s petition in August 2008.

In the EPA’s Request for Comment on the 2012 waiver petitions, the agency indicates it will use the same “analytical approach” and “legal interpretation” on the basis of which Johnson denied Perry’s request in 2008. This means the regulatory decks are stacked against the petitioners. As the EPA reads the statute, CAA Section 211(o)(7) establishes a burden of proof that is nearly impossible for petitioners to meet. No matter how high corn prices get, or how serious the associated economic harm, the EPA will have ready-made excuses not to waive the corn-ethanol blending requirements. [click to continue…]

64 Free Market Groups Announce Opposition to Wind PTC

by Myron Ebell on September 7, 2012

in Blog

Sixty-four non-profit groups sent a joint letter to the Hill this week that urges Representatives and Senators “to let the wasteful wind PTC expire as planned at the end of the year.”  The battle lines are now fully drawn between Big Wind and supporters of free markets and affordable energy. The letter was organized by Americans for Prosperity.

On the side of continuing massive tax subsidies to crony capitalist investors in wind farms are President Barack Obama, nearly all Democratic members of Congress, and a sizable number of Republican members from States that have enacted renewable portfolio standards for electric utilities.

The opponents of renewing the wind production tax credit include Republican presidential nominee Mitt Romney, Speaker of the House John Boehner (R-Ohio), and the leadership (but not all the members) of the conservative House Republican Study Committee.

The Senate Finance Committee voted 9 to 15 in early August against an amendment that would reduce by 20% the 2.2 cents per kilowatt hour subsidy that wind farms currently receive for ten years.  The Senate’s business tax extenders bill would renew (and actually expand and make more generous) the current credit for one year until 31st December 2013.  The CBO estimated that the cost of the extension would be approximately $12 billion over ten years.

It is unlikely that the business tax extenders bill or any other bill that includes extending the wind production tax credit will see any floor action in either the House or Senate before the election.  On the other hand, it is almost certain that there will be a big push in a lame duck session in November.

Stern Review Not Fit to Guide U.K. Climate Policy, Report Finds

by Marlo Lewis on September 4, 2012

in Features

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The Global Warming Policy Foundation (GWPF) has just published The Failings of the Stern Review of the Economics of Climate Change. The  2006 Stern Review — named for Sir Nicholas Stern, head of the UK Government’s Economic Service under Prime Minister Tony Blair – is arguably the most pessimistic official assessment ever of the economic damages of global warming. The Stern Review famously argued that the “costs of inaction” on climate change hugely outweigh the costs of greenhouse gas mitigation, claiming that, ”If we don’t act, the overall costs and risks of climate change will be equivalent to losing at least 5% of global GDP each year now and forever.”

Influenced by the Stern Review, the UK Government adopted a set of climate policies that cost £17,000 per household, according to the GWPF report, prepared by the Rt. Hon. Peter Lilley MP. Since the UK’s total annual carbon dioxide (CO2) emissions are less than the increase in China’s CO2 emissions in a single year, the UK Government’s climate program is all pain for no gain. It is time for the UK Government to review the Stern Review, Lilley contends.

The GWPF report is 100 pages long, but there is a helpful executive summary and a hard-hitting foreword by leading climate economist Richard Toll. The following excerpts from Toll’s contribution should be sufficient to entice even the most jaded climate wonk to read the report:

The publication of the Stern Review of the Economics of Climate Change was a PR exercise that was unprecedented in economics. Sir Nicholas, now Lord Stern, was portrayed as an expert even though he had never published before on the economics of energy, environment or climate.

Honest policy analysts show results for a range of alternative discount rates. The Stern Review uses a single discount rate. It corresponds to an extreme position in the literature and it deviates from the official discount rate of HM Treasury. Nick Stern is, of course, free to use whatever discount rate he wants in his private life. Professor Sir Partha Dasgupta of Cambridge University has found that Stern should save 97.5% of his income, were Stern to follow the advice in the Stern Review. Taking such an extreme position in public policy is odd.

Most economic studies conclude that it is best to start with modest emission reduction, and accelerate the stringency of climate policy over time. For that, public policy will need to pull into the same direction over 20 or more electoral cycles. If the case for climate policy is exaggerated, the backlash will come, sooner or later. The Stern Review was a tactical masterstroke, but it will likely prove to be a strategic blunder. Its academic value is zero.

In a related post, Lilley provides a condensed summary of his report. “Stern,” he writes, ”reaches conclusions far removed from those of most environmental economists by combining statistical sophistry and verbal virtuosity. For example:” [click to continue…]

Should We Fear the Methane Time Bomb (Part Deux)?

by Marlo Lewis on August 31, 2012

in Blog, Features

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Climate alarmists have long warned that warming of the Arctic could melt frozen marine and permafrost sediments, releasing methane trapped in peat bogs and ice crystals (clathrate hydrates, see photo above). Methane is a potent greenhouse gas that packs 21 times the global warming punch as CO2 over a 100-year time span and more than 100 times the CO2-warming effect over a 20-year period.

So the fear is that methane emissions from the thawing Arctic will accelerate global warming, which in turn will melt more clathrates and methane-bearing sediments, which will produce still more warming, in a vicious circle of climate destabilization. In a previous post, I offered a skeptical perspective on this doomsday scenario.

This week the journal Nature published a study raising similar concerns about the potential for significant releases of methane from the Antarctic ice sheets. The study’s 14 authors, led by Jemma Wadham of the University of Bristol in the UK, estimate that about 21,000 petagrams (gigatons) of organic carbon (OC) are buried in sedimentary basins under the East and West Antarctic ice sheets – more than 10 times the estimated magnitude of OC stocks in northern permafrost regions. Microbial production of methane from OC (a process known as methanogenesis) is common across many cold subsurface environments, and may have been at work for millions of years beneath the Antarctic Ice Sheets.  [click to continue…]

PolitiFact Repeals the Laws of Supply and Demand

by Hans Bader on August 31, 2012

in Blog, Politics

If you restrict the supply of something, the price will go up.  It’s one of the laws of supply and demand.  Thus, cap-and-trade energy rationing schemes drive the price of energy up, by capping the supply.  President Obama has conceded that in his unguarded moments.  In a January 17, 2008 interview with the San Francisco Chronicle, Obama said that “electricity rates would necessarily skyrocket” under his cap-and-trade plan to fight global warming.  He also said that under his plan, “if somebody wants to build a coal-powered plant, they can; it’s just that it will bankrupt them.”

But journalists are not economists, and often have difficulty understanding the most basic principles of economics.  (Some cannot even do basic math).  What is clear to any economist or any college graduate who has taken Econ 101 seems disputed or unclear to many journalists, who are more familiar with trendy fads in college English Departments, and left-wing critical race theory, than they are with basic economic truths.

So it is that PolitiFact Virginia erroneously rated as “mostly false” the claim that cap-and-trade would naturally lead to “higher” energy bills for Virginia households.  It admitted that “analyses of two measures that have been before in Congress in recent years concluded that cap-and-trade carries a cost for most consumers,” but then claimed that such costs could somehow be offset, even while capping energy use, and result in “an average lower cost for consumers.”  While their effects on the environment may be disputed, it is clear that they raise energy costs for consumers by reducing the supply of energy.  (As a CBS analyst once noted, a Treasury Department analysis pegged the cost of the Obama Administration’s cap-and-trade plan at $1761 per year per American household).

Whatever their theoretical merits, cap-and-trade schemes tend to become vehicles for vast amounts of corporate welfare and special-interest pork by the politicians who craft them, like the Congressional cap-and-trade energy bill backed by the Obama Administration.  That Obama-backed bill contained so many special-interest giveaways that it would have fleeced American consumers without helping the environment, as I explained earlier (it contained environmentally-harmful ethanol subsidies and could have driven industry overseas to countries with less environmental protections).

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