My letter in today’s Wall Street Journal:

Cheap Gasoline and Human Rights

The notion of $2.50 gasoline would not only be a “veritable policy revolution” domestically (“Newt Is Right About Gas Prices” by Holman W. Jenkins, Jr., Business World, March 10), it would be a gutsy display of American exceptionalism for the rest of the world. This is not because Americans are divinely entitled to federally subsidized fuel (they’re not), but because they do have a right to gas prices that aren’t artificially jacked up by government drilling restrictions and taxes.

Americans aren’t the only ones. As booming car ownership in India and China demonstrates, automobility satisfies some pretty basic human needs and desires. Unfortunately for central planners around the world, there’s nothing worse than a technology that lets people go where they want to, when they want to. For an American leader of whatever party to take the lead in shedding gasoline’s sin-product status would be downright revolutionary.

In the early 1800s, as railroads spread across Britain, the Duke of Wellington supposedly sneered that trains would “only encourage the common people to move about needlessly.” Aristocrats could always move about; only when the rest of us were able to do so did this become a so-called problem. A decade ago our aristocrats looked down on SUVs; today they look down on affordable gas. Either way, their attitudes toward mobility are no different than the Duke’s views two centuries ago, and no less backward.

Sam Kazman
Competitive Enterprise Institute
Washington, D.C.

Post image for Who Are the Environmentalist Extremists?

Second of a three-part series of excerpts from Energy Freedom by Marita Noon

Originally published in the Washington Examiner

Part 1, “Big Green Wants To Repeal the Industrial Revolution,” is available here.

So who are all these evil-appearing “environmentalists?” Should all Birkenstock wearers be suspect? What about the lady at the grocery store with the canvas sack for her purchases?

There is a difference between those of us who care for the earth, want to use it wisely, and believe in recycling—and those who are in decision-making positions, setting policy and/or funding the programs. We are talking about something bigger, something organized, and something with plans greater than saving polar bears or spotted owls; something with plans to fundamentally transform the United States. There are hundreds of these groups influencing policy in America.

They want to move people into cities where they are easier to control and get rid of inefficient human patterns—which is what happens when people live in rural locations. Many of the ideas lauded by environmental groups only work in cities: electric cars, community gardens, and mass transit. Control is really the issue.

Columnist George Will states: “Today’s green left is the old red left revised. The left exists to enlarge the state’s supervision of life, narrowing individual choices in the name of collective good. Hence the left’s hostility to markets. And to automobiles—people going wherever they want whenever they want. … The green left understands that the direct route to government control of almost everything is to stigmatize, as a planetary menace, something involved in almost everything—carbon. Environmentalism is, as Lawson (author of An Appeal to Reason: a Cool Look at Global Warming) writes, an unlimited ‘license to intrude.’ ‘Eco-fundamentalism,’ which is ‘the quasi-religion of green alarmism’ promises ‘global salvationism.’”

For forty-plus years they have continued what, in the 70’s, was called “conducting this politics of consciousness.” They mostly do not hold political office. Without violence, they have attacked minds. They have transformed society—all while we were sleeping. The environmentalists dream of a new earth. They have visions of a utopia. They do not have any real plans as to how they will get there. But they are conducting politics of consciousness and have managed to transform much of society into believing with them.

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The title above was my boss’s (CEI President Fred Smith’s) funny reaction to the email solicitation below, for a conference call held by the biofuels lobby, on how the biofuels industry can help meet the Commander-in-Chief’s goal of powering the U.S. military with 25% renewables by 2025.

This Week in the Congress

by Myron Ebell on March 18, 2012

in Blog

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Senate Rejects Subsidies to Big Wind, Pickens Payout Plan

The Senate passed its version of the highway bill, S. 1813, this week on a 74 to 22 vote.  Following votes on amendments last week, several more energy-related amendments were defeated on Tuesday, March 13, before the final vote.  The vote tallies on these amendments, which were not germane to the underlying legislation and so required 60 (out of 100) votes to pass, were nonetheless quite interesting.

Senator Debbie Stabenow’s (D-Mich.) amendment to extend a number of tax subsidies for renewable energy, including the wind production tax credit, was defeated 49 to 49.  Forty-nine Democrats voted yes.  Forty-five Republicans and four Democrats—Joe Manchin (D-WV), Claire McCaskill (D-Mo.), Mark Warner (D-Va.), and James Webb (D-Va.)— voted no.  Two Republicans missed all three votes.  This is an encouraging result, but is by no means the end of the massive effort by the wind industry to get their subsidy extended beyond December 31st, as I detail in the item below.

Senator Jim DeMint’s (R-SC)amendment to end all tax subsidies for conventional and renewable energy and for energy efficiency then failed on a 26 to 72 vote.  The twenty-six Republicans voting to go cold turkey on their subsidy addiction were Ayotte (NH), Blunt (Mo.), Burr (NC), Chambliss (Ga.), Coats (Ind.), Coburn (Okla.), Corker (Tenn.), Crapo (Id.), DeMint (SC), Graham (SC), Inhofe (Okla.), Johanns (Neb.), Johnson (Wisc.), Kyl (Az.), Lee (Ut.), McCain (Az.), McConnell (Ky.), Paul (Ky.), Portman (Ohio), Risch (Id.), Rubio (Fla.), Sessions (Ala.), Shelby (Ala.), Toomey (Penna.), Vitter (La.), and Wicker (Miss.).

Getting twenty-six votes to end all energy subsidies is quite a stunning result, but it’s not quite as impressive as it looks.  Senators Richard Burr (R-NC), Saxby Chambliss (R-Ga.), and Tom Coburn (R-Okla.) turned around and voted to create several new tax subsidies for heavy-duty trucks fueled by natural gas.

The vote on the amendment offered by Senators Robert Menendez (D-NJ) and Burr was 51 to 47 (with 60 votes required for passage).  Besides the three inconsistent Republicans, three other Republicans voted for the Pickens Payoff Plan, which is also known as the NAT GAS Act.  They were Senators Collins (R-Me.), Isakson (R-Ga.), and Snowe (R-Me.).  Thirty-nine Republicans and eight Democrats—Harkin (D-Ia.), Leahy (D-Vt.), Levin (D-Mich.), Nelson (D-Neb.), Pryor (D-Ark.), Sanders (Socialist-Vt.), Stabenow (D-Mich.), and Webb (D-Va.)—voted against the amendment.

I have been calling the NAT GAS Act, whose chief promoter is billionaire T. Boone Pickens, the Pickens Payoff Plan or the Pickens Your Pocket Plan since last spring.  One of my CEI colleagues calls it the Billionaires’ Bailout.  Any doubts that these pejorative characterizations are justified have been laid to rest this week by an article by Ryan Grim and Michael McAuliff in the Huffington Post.

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Post image for President Continues Frantic Response to High Gasoline Prices

After speeches the last three weeks (reported here, here, and here) on why he isn’t to blame for high gasoline prices, I thought President Barack Obama would be moving on to other issues.  But in a sign of how desperate the White House is becoming about the threat gas prices pose to the President’s re-election, the President on Thursday, 15th March, gave yet another speech on the topic.

At Prince George’s Community College in Largo, Maryland, a few miles east of Washington, D. C., Mr. Obama took credit (completely undeservedly) for increasing domestic oil production, but then argued that increasing oil production won’t solve the problem of high gasoline prices.  According to the President, the only lasting solution is to continue pouring taxpayer dollars into subsidizing alternatives to oil.  Once we replace gasoline and diesel with other fuels, then we will have solved the problem of recurring spikes in gasoline prices.

The problem with the President’s argument is that the alternatives are likely to cost more, not less, than the oil they are replacing.  That is certainly the case with ethanol.  And hybrid electric vehicles still take many years of gas savings to pay for their much higher prices.

President Obama lashed out at those who disagree with him: “If some of these folks were around when Columbus set sail, they must have been founding members of the Flat Earth Society.  They would not have believed that the world was round.”

His critics are simply stuck in the past and don’t see the new clean, green energy economy his policies are creating: “The point is, there will always be cynics and naysayers who just want to keep on doing things the same way that we’ve always done them….  But that’s not who we are as Americans.  See, America has always succeeded because we refuse to stand still.  We put faith in the future.  We are inventors.  We are builders.  We are makers of things.  We are Thomas Edison.  We are the Wright Brothers.  We are Bill Gates.  We are Steve Jobs.  That’s who we are.”  That sounds good, but in real life the President’s heroes are not inventors, builders, and makers of things; they are crony capitalists and subsidy suckers like Jeff Immelt, Warren Buffett, Vinod Khosla, George Soros, T. Boone Pickens, George Kaiser, James Rogers, and Lloyd Blankfein.

President Obama also reiterated his claim that producing more oil isn’t going to solve the problem because the United States consumes over 20% of the world’s oil, but has only 2% of the world’s oil reserves.  Even the Washington Post has had enough.  On 15th March, Glenn Kessler dissected this technically true, but utterly misleading claim in a long Fact Checker piece.

It doesn’t, according to this excellent blog by Heritage’s David Kreutzer, from which the graph below is excerpted.

 

Misleading Headline

by Myron Ebell on March 16, 2012

in Blog

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Above is a screenshot from Wednesday’s Bloomberg News. The headline suggests that green energy is a white knight poised to save the U.K. from rolling blackouts. However, the body of the article states nothing of the sort. Below is the story’s actual thesis:

[Government science advisor Sir David] King said power outages [in the United Kingdom] could occur as early as 2017 as old nuclear, oil and coal-fired power stations are closed because not enough is being done to replace them. The school’s study shows Britain can’t meet its goal of cutting carbon emissions 80 percent by 2050 without ramping up nuclear power and electrifying both transport and heating.

The comments contrast with findings by Bloomberg New Energy Finance, which last month concluded that growth in renewable energy will prevent the U.K. from suffering an electricity crisis. Britain will build more than 30 gigawatts of capacity by the end of 2016, two-thirds of it in solar, wind and biomass and the rest largely fired by natural gas, according to the researcher.

Despite the hundreds of millions of dollars lost in the Solyndra scandal, Energy Secretary Steven Chu gave himself “an A-” when he “testified before Congress after a series of bankruptcies from companies floated by green-tech stimulus loans” and was asked what “grade he would give himself as a steward of public funds.”  But it turns out that Chu’s Energy Department was much more reckless in its lending decisions than the private lenders that the Obama Administration has blamed for the financial crisis (even as the Administration has expanded the role of the government-sponsored mortgage giants and federal affordable-housing mandates that helped spawn the housing crisis), manifested in “an 85 percent failure rate on its process check.”  As Ed Morrissey notes, a recent report from the Government Accountability Office (GAO)

looked at the handling of $30 billion outstanding in loan guarantees and future commitments and discovered that the DOE rarely follows its own written procedures for vetting and auditing applications.  In fact, in many cases, the Loan Guarantee Program (LGP) couldn’t even find the data managers needed to administer the loans properly . .

In the case of Solyndra, the Obama administration ended up overriding the expressed concerns of DOE auditors to grant the solar-tech firm $535 million in taxpayer guarantees, all of which disappeared in the company’s collapse.  In almost every case study investigated by the GAO, important steps got skipped in the reviews that determined whether loan applications would be granted.  In other cases, the documentation was so poor that the GAO couldn’t figure out what the LGP did . . . the process had at least an 85 percent failure rate on its process check.  . .

With $30 billion in taxpayer money at risk, the DOE under Steven Chu didn’t bother to conduct the reviews it claimed it would on applications for loan guarantees, didn’t keep records of what reviews they did accomplish, and signed off on loans with incomplete documentation and inadequate oversight of the risk.  The result — perhaps $6.5 billion immediately at risk, according to CBS, and possibly most of the $30 billion. . . Political connections existed with Solyndra specifically, but the DOE may have felt political pressure to sign off on loans quickly in order to get Obama’s stimulus started. . . the DOE under Chu has been anything but a careful steward of taxpayer money.

As Morrissey notes, Obama has also fostered financial irresponsibility by expanding federal bailouts “to include the real-estate speculators that helped inflate the housing bubble.”  (The speculator bailouts are being done partly with taxpayer money, and partly at the expense of innocent mortgage investors who have never been accused of any wrongdoing). The Administration has also forced some banks to make risky loans to borrowers of certain races, potentially contributing to future bank failures and bailouts.

As The Washington Post noted earlier, energy programs have been “infused with politics at every level” during the Obama administration. It hastily approved subsidies for Solyndra, whose executives are now pleading the 5th Amendment, despite obvious danger signs and warnings about the company’s likely collapse. (Later, federal officials successfully pressured Solyndra to delay its announcement about upcoming layoffs until just after the 2010 election, to avoid embarrassing the Obama administration.)  CBS News reported that there were 11 more Solyndras in the Obama Administration’s green-energy programs.

The Obama Administration has used green-jobs money from the stimulus package to outsource American jobs to countries like China: “Despite all the talk of green jobs, the overwhelming majority of stimulus money spent on wind power has gone to foreign companies, according to a new report by the Investigative Reporting Workshop at the American University’s School of Communication in Washington, D.C.” As the Investigative Reporting Workshop noted, “79 percent” of all green-jobs funding “went to companies based overseas . . . In fact, the largest grant made under the program so far, a $178 million payment on Dec. 29, went to Babcock & Brown, a bankrupt Australian company.” This just one of many ways in which the Obama administration has used taxpayer money to outsource American jobs to foreign countries.

Post image for Big Green Wants To Repeal the Industrial Revolution

First of a three-part series of excerpts from Energy Freedom by Marita Noon

Originally published in the Washington Examiner

Environmentalists would have everyone believe that oil, gas, and coal—all fossil fuels—are at the base of much of the world’s ills. Nuclear is no better. They even oppose hydropower, wind energy, and commercial solar. Yet, they claim the high ground and position themselves as the moral authority. What would the world look like if they were setting truly setting energy policy rather than merely influencing it?

An in-depth study of environmental groups’ energy-related goals as posted on their websites’ shows that there is not an energy project they like. In short, they want to “kill,” “block,” and “deny.” The only thing they want to expand is moratoriums.

If environmentalists are in charge, expect these changes to American life:

Transportation

Most Americans have the freedom to come and go in their individual cars as they choose. A survey found that 91% of Americans consider their cars to be a necessity, not a luxury. Yet environmental extremists are actively working to stop or prevent drilling for oil and gas. They also aim to shut down coal-fueled power plants and oppose nuclear energy. With a reduced capacity for electricity and transportation, our lifestyle, as we know it, ceases to exist.

Modern Conveniences

The same survey found that most Americans consider things like microwaves, air conditioning and heating, computers, and cell phones to be a necessity. However, in a limited-fuel, environmentally controlled society, these items would have to go. They all require electricity—as do electric cars. Additionally, each of these “necessities” is made from plastic and plastic is typically made from hydrocarbons.

Health

Like modern conveniences, our health is heavily dependent on both energy and plastics. If you have been in a doctor’s office or hospital lately, you know that even taking your temperature requires electricity and plastics. Today’s extreme regulations could have an adverse impact on our health.

Housing

Without abundant electricity to purify water and pump it into your home and remove and process waste matter, you couldn’t live there. You’d need to move to a location near a fresh water source. Additionally, many environmental groups want to block the cutting of trees—making the construction of new homes near a potential fresh water source virtually impossible.

We all want clean air, fresh water, and a safe food supply, but stopping, opposing, denying, and blocking are not the ways to get it.

Huge strides have been made since the dawn of the industrial revolution. Despite increases in the typical activities that produce pollution, America is much cleaner now than it was twenty years ago. Since 1970, our population has increased and our energy consumption has gone up. We drive more miles each year. At the same time, our American ingenuity has been at work generating an increase in our Gross National Product. Environmentalists want you to believe that pollution has also increased. However, the truth is that, despite this growth, our aggregate emissions are approximately half of what they were.

Michael Economides, author of Energy and Climate Wars says, “The US is certainly one of the cleanest, more environmentally responsible nations in the world. Virtually no European country can boast cleaner waters, more pristine rural landscapes or air quality.”

We need exploration and innovation in America. We need to tap into energy sources currently—or in the process of being made—off limits in America by the Endangered Species Act or by plans to lock up resources under the guise of a national monument. When you think about it, energy makes America great—and we do it in a manner cleaner and safer than anywhere else on the planet.

Post image for Coalition Letter to the Senate: Reject Subsidies to Big Wind, T. Boone Pickens!

March 13, 2012

Dear Senator:

The Senate is scheduled to finish voting on amendments to the highway bill, S. 1813, on Tuesday. We are writing to urge you to:

  • Vote Yes on amendment #1589 (DeMint) to end all special-interest tax preferences for renewable energy, conventional energy, and alternative fuel vehicles;
  • Vote No on amendment #1812 (Stabenow) to extend tax credits for wind, solar power, a variety of biofuels, coal, oil and gas, energy efficient buildings and appliances, and plug-in electric vehicles; and,
  • Vote No on amendment #1782 (Burr/Menendez) to create massive new tax preferences for natural gas vehicles, fueling stations, and motor fuel.

The American people are fed up with corporate welfare. They view the Solyndra debacle as an object lesson in the folly of government trying to pick energy-market winners. Above all, they want Congress to put the nation’s fiscal house in order.

How you vote on the aforementioned amendments will determine whether or not you are serious about curbing political influence in energy markets, ending crony capitalism, and halting the nation’s slide towards bankruptcy.

The wind energy production tax credit (PTC) is a wealth transfer from States that do not establish renewable electricity mandates to States that do. The PTC props up these Soviet-style production quotas by masking their full cost from ratepayers. Congress should pull the plug on this deception: Vote No on amendment #1812, and let the PTC expire.

Amendment #1782, which proposes tax credits up to $64,000 for purchases of natural gas-fueled 18-wheelers, could add billions of dollars to the national debt. With natural gas industry profits soaring and prices at historic lows, there is no justification for Congress to rig the market in favor of natural gas producers, purchasers of natural gas vehicles, or investors in natural gas infrastructure.

The best energy policy is one under which consumers decide winners and losers and politicians can’t stick taxpayers with the bill when an energy company fails. The DeMint amendment (#1589) would eliminate tax favoritism in the energy sector. Equally important, it would not raise the overall tax burden, because it would use the savings from rescinded tax credits to lower general tax rates.

Sincerely,

Freedom Action
Americans for Tax Reform
Council for Citizens Against Government Waste
Club for Growth
Taxpayers for Common Sense Action
60 Plus Association
Americans for Prosperity
American Energy Alliance
Competitive Enterprise Institute
National Center for Public Policy Research
Energy Integrity Project (Idaho)
Citizen Power Alliance (New York)