Note: A nearly identical version of this column appeared last week in Forbes Online. I am reposting it here with many additional hyperlinks so that readers may more easily access the evidence supporting my conclusions.

The November 2012 elections ensure that President Obama’s war on coal will continue for at least two more years. The administration’s preferred M.O. has been for the EPA to ‘enact’ anti-coal policies that Congress would reject if such measures were introduced as legislation and put to a vote. Had Gov. Romney won the presidential race and the GOP gained control of the Senate, affordable energy advocates could now go on offense and pursue a legislative strategy to roll back various EPA global warming regulations, air pollution regulations, and restrictions on mountaintop mining. But Romney lost and Democrats gained two Senate seats.

Consequently, defenders of free-market energy are stuck playing defense and their main weapon now is litigation. This is a hard slog because courts usually defer to agency interpretations of the statutes they administer. But sometimes petitioners win. In August, the U.S. Court of Appeals struck down the EPA’s Cross State Air Pollution Rule (CSAPR), a regulation chiefly targeting coal-fired power plants. The Court found that the CSAPR exceeded the agency’s statutory authority. Similarly, in March, the Court ruled that the EPA exceeded its authority when it revoked a Clean Water Act permit for Arch Coal’s Spruce Mine No. 1 in Logan County, West Virginia.

A key litigation target in 2013 is EPA’s proposal to establish greenhouse gas (GHG) “new source performance standards” (NSPS) for power plants. This so-called carbon pollution standard is not based on policy-neutral health or scientific criteria. Rather, the EPA contrived the standard so that commercially-viable coal plants cannot meet it. The rule effectively bans investment in new coal generation.

We Can Win This One

Prospects for overturning the rule are good for three main reasons.

(1) Banning new coal electric generation is a policy Congress has not authorized and would reject if proposed in legislation and put to a vote. Once again the EPA is acting beyond its authority.

The proposed “carbon pollution” standard requires new fossil-fuel electric generating units (EGUs) to emit no more than 1,000 lbs of carbon dioxide (CO2) per megawatt hour (MWh). About 95% of all natural gas combined cycle power plants already meet the standard, according to the EPA. No existing coal power plants come close; even the most efficient, on average, emit 1,800 lbs CO2/MWh.

A coal power plant equipped with carbon capture and storage (CCS) technology could meet the standard, but the levelized cost of new coal plants already exceeds that of new natural gas combined cycle plants, and “today’s CCS technologies would add around 80% to the cost of electricity for a new pulverized coal (PC) plant, and around 35% to the cost of electricity for a new advanced gasification-based (IGCC) plant,” the EPA acknowledges.

In short, the EPA has proposed a standard no economical coal plant can meet. Not surprising given President Obama’s longstanding ambition to “bankrupt” anyone who builds a new coal power plant and his vow to find other ways of “skinning the cat” after the 2010 election-day slaughter of 29 cap-and-trade Democrats. But the big picture is hard to miss: Congress never signed off on this policy.

The only time Congress even considered imposing GHG performance standards on power plants was during the debate on the Waxman-Markey cap-and-trade bill. Section 216 of Waxman-Markey would have established NSPS requiring new coal power plants to reduce CO2 emissions by 50% during 2009-2020 and by 65% after 2020 – roughly what the EPA is now proposing. Although Waxman-Markey narrowly passed in the House, it became so unpopular as “cap-and-tax” that Senate leaders pulled the plug on companion legislation.

Team Obama is attempting to accomplish through the regulatory backdoor what it could not achieve through the legislative front door. The “carbon pollution” rule is an affront to the separation of powers.

(2) The “carbon pollution” standard is regulation by misdirection – an underhanded ‘bait-and-fuel-switch.’

In Massachusetts v. EPA (April 2007), the Supreme Court held that GHGs are “air pollutants” for regulatory purposes. This spawned years of speculation about whether the EPA would define “best available control technology” (BACT) standards for “major” GHG emitters so stringently that utilities could not obtain pre-construction permits unless they built natural gas power plants instead of new coal power plants.

In March 2011, the EPA published a guidance document assuring stakeholders that BACT for CO2 would not require a permit applicant “to switch to a primary fuel type” different from the fuel type the applicant planned to use for its primary combustion process. The agency specifically disavowed plans to “redefine the source [category]” such that coal boilers are held to the same standard as gas turbines.

The EPA reiterated this assurance in a Q&A document accompanying the guidance. One question asks: “Does this guidance say that fuel switching (coal to natural gas) should be selected as BACT for a power plant?” The EPA gives a one-word response: “No.”

This bears directly on the legal propriety of the “carbon pollution” standard. In general, NSPS are less stringent than BACT. NSPS provide the “floor” or minimum emission control standard for determining an emitter’s BACT requirements. BACT is intended to push individual sources to make deeper emission cuts than the category-wide NSPS requires.

Yet despite the EPA’s assurance that BACT, although tougher than NSPS, would not require fuel switching or redefine coal power plants into the same source category as natural gas power plants, the “carbon pollution” rule does exactly that.

In April 2011, the House passed H.R. 910, the Energy Tax Prevention Act, sponsored by Rep. Fred Upton (R-Mich.), by a vote of 255-172. H.R. 910 would overturn all of the EPA’s GHG regulations except for those the auto and trucking industries had already made investments to comply with. Sen. James Inhofe’s companion bill (McConnell Amdt. 183) failed by one vote. In June 2010, Sen. Lisa Murkowski’s (R-Alaska) Congressional Review Act resolution to strip the agency of its Mass v. EPA-awarded power to regulate GHGs failed by four votes. One or both of those measures might have passed had the EPA come clean about its agenda and stated in 2009 that it would eventually propose GHG performance standards no affordable coal power plant can meet.

(3) The “carbon pollution” rule is weirdly contorted, flouting basic standards of reasonableness and candor.

Under the Clean Air Act, an emission performance standard is supposed to reflect “the degree of emission limitation achievable through the application of best system of emission reduction” that has been “adequately demonstrated.” The EPA picked 1,000 lbs CO2/MWh as the NSPS for new fossil-fuel EGUs because that is the “degree of emission limitation achievable through natural gas combined cycle generation.”

But natural gas combined cycle is not a system of emission reduction. It is a type of power plant. The EPA is saying with a straight face that natural gas combined cycle is an emission reduction system that has been adequately demonstrated for coal power plants. By that ‘logic,’ zero-carbon nuclear-, hydro-, wind-, or solar-electric generation is an emission reduction system that has been adequately demonstrated for natural gas combined cycle.

A coal power plant could meet the standard by installing CCS, but, as the EPA acknowledges, CCS is too costly to qualify as “adequately demonstrated.” The only practical way for utilities to comply is to build new gas turbines instead of new coal boilers. This is the first time the EPA has defined a performance standard such that one type of facility can comply only by being something other than what it is.

The EPA sets performance standards for specific categories of industrial sources. A coal boiler is different from a gas turbine, and up to now the agency reasonably regulated them as different source categories, under different parts of the Code of Federal Regulations – Subpart Da for coal boilers, Subpart KKKK for gas turbines. The EPA now proposes to regulate coal boilers and gas turbines as a single source category — “fossil-fuel EGUs” — under a new subpart numbered TTTT. But only for CO2! Coal boilers and gas turbines will continue to be regulated as separate source categories for criteria and toxic pollutants under Subparts Da and KKKK.

Why hold coal boilers and gas turbines to different standards for those pollutants? The EPA’s answer: “This is because although coal-fired EGUs have an array of control options for criteria and toxic air pollutants to choose from, those controls generally do not reduce their criteria and air toxic emissions to the level of conventional emissions from natural gas-fired EGUs.”

The same reasoning argues even more strongly against imposing a single GHG standard on coal boilers and natural gas turbines. Coal boilers do not have an “array of control options” for CO2 emissions, and have no “adequately demonstrated” option for reducing CO2 emissions to the level of gas-fired EGUs. Subpart TTTT is an administrative contortion concocted to kill the future of coal generation.

Why Care Even If You Don’t Mine or Combust Coal for a Living

At this point you may be wondering why anyone outside the coal industry should care about this cockamamie rule. There are several reasons.

First and most obviously, banning new coal generation could increase electric rates and make prices more volatile. For generations, coal has supplied half or more of U.S. electricity, and still provides the single largest share. The “carbon pollution” standard is risky because coal’s chief competitor, natural gas, has a history of price volatility and a future clouded by the environmental movement’s hostility to hydraulic fracturing, the technology transforming gas from a costly shrinking resource to an affordable expanding resource.

The “carbon pollution” standard itself could put the kibosh on new gas-fired generation if the EPA concludes, as Cornell researchers contend, that fugitive methane emissions from hydraulic fracturing make gas as carbon-intensive as coal.

The EPA is also developing GHG performance standards for refineries. “Unconventional” oil production from shale and oil sands is booming in North America, creating thousands of jobs, generating billions of dollars in tax revenues, and reducing U.S. dependence on OPEC oil. But unconventional oil production is energy-intensive and therefore carbon-intensive. It is unknown whether or how the forthcoming GHG standard for refineries will address the carbon intensity of unconventional oil. What we do know is that the environmental groups who litigated the EPA into proposing these standards are arch foes of unconventional oil.

In any event, the “carbon pollution” standard for power plants is just the start of a regulatory trajectory, not its end point. The EPA’s settlement agreement with environmental groups and state attorneys general obligates the agency to extend the standard to “modified” coal power plants and establish emission “guidelines” for non-modified units.

Moreover, the standard sets a precedent for promulgating NSPS for other GHG source categories, and for contriving new source categories (e.g. “electric generating units”) to hammer natural gas. As indicated above, if gas can set the standard for coal, then wind and solar can set the standard for gas. And at some point the refinery standard could undermine the profitability of unconventional oil. Although initially directed against new coal, the standard puts all fossil-energy production in an ever-tightening regulatory noose.

Pandora’s NAAQS

Taking a longer view, the “carbon pollution” rule moves the U.S. economy one step closer to the ultimate environmental policy disaster: national ambient air quality standards (NAAQS) for GHGs.

In December 2009, the EPA issued a rule under Section 202 of the Clean Air Act declaring that GHG emissions from new motor vehicles endanger public health and welfare. The endangerment rule was both prerequisite and trigger for the agency’s adoption, in January 2011, of first-ever GHG motor vehicle standards. The agency now claims that it need not issue a new and separate endangerment finding under Section 211 to adopt first-ever GHG performance standards for power plants, because subsequent science confirms and strengthens its Section 202 finding.

An implication of this argument is that the EPA need not make a new endangerment finding to promulgate NAAQS for GHGs under Section 108, because the Section 202 finding would suffice for that as well.

Section 108 of the Clean Air Act requires the EPA to initiate a NAAQS rulemaking for “air pollution” from “numerous or diverse mobile or stationary sources” if such pollution “may reasonably be anticipated to endanger public health and welfare.” Carbon dioxide obviously comes from numerous and diverse mobile and stationary sources, and the EPA has already determined that the associated “air pollution” – the “elevated concentrations” of GHGs in the atmosphere – endangers public health and welfare. Logically, the EPA must establish NAAQS for GHGs set below current atmospheric concentrations.

Eco-litigants have already put this ball in play. The Center for Biological Diversity and 350.Org petitioned the EPA more than two years ago to establish NAAQS for CO2 at 350 parts per million (roughly 40 parts per million below current concentrations) and for other GHGs at pre-industrial levels.

The potential for mischief is hard to exaggerate. Not even a worldwide depression that permanently lowers global economic output and emissions to, say, 1970 levels, would stop CO2 concentrations from rising over the remainder of the century. Yet the Clean Air Act requires States to adopt implementation plans adequate to attain primary (health-based) NAAQS within five or at most 10 years. A CO2 NAAQS set at 350 parts per million would require a level of economic sacrifice vastly exceeding anything contemplated by the Waxman-Markey cap-and-trade bill or the Copenhagen climate treaty, which aimed to stabilize CO2-equivalent emissions at 450 parts per million by 2050.

The EPA has yet to decide on the CBD-350.Org petition. Perhaps this is another case of punting unpopular regulatory decisions until Obama’s second term. The one instance where the administration addressed the issue is not reassuring. In a brief submitted to the Supreme Court in American Electric Power v. Connecticut, the Obama Justice Department described Section 108 as one of the provisions making the Clean Air Act a “comprehensive regulatory framework” for climate change policy.

Ultimately, only the people’s representatives can protect coal generation, hydraulic fracturing, and unconventional oil from hostile regulation. But nixing the “carbon pollution” standard would be a big setback to both the EPA and the eco-litigation fraternity, and would help safeguard America’s energy options until a future Congress reins in the agency.

[* This column is a lightly edited version of my post earlier this week on National Journal's Energy Experts Blog.]

You know we’re deep into the silly season when ‘progressives’ champion reverse protectionism – banning exports – as a solution to America’s economic woes. Congress should reject proposals to ban exports of petroleum products and natural gas for at least six reasons.

(1) Export bans are confiscatory, a form of legal plunder.

As economist Richard Stroup has often pointed out, property rights achieve their full value only when they are “3-D”: defined, defendable, and divestible (transferable). A total ban on the sale (transfer) of property rights in petroleum products or natural gas would reduce the asset’s value to zero (assuming no black market and no prospect of the ban’s repeal). To the owner, the injury would be the same as outright confiscation. A ban on sales to foreign customers would be similarly injurious, albeit to a lesser degree.

The foregoing is so obvious one is entitled to assume that harming oil and gas companies is the point. I would simply remind ‘progressives’ that the politics of plunder endangers the social compact on which civil government depends. Why should others respect your rights when you seek to deprive them of theirs? Every act of legal pillage is precedent for further abuses of power. Do you really think your team will always hold the reins of power in Washington, DC?

(2) The proposed bans would violate U.S. treaty obligations under the General Agreement on Tariffs and Trade (GATT) and the North American Free Trade Agreement (NAFTA).

Let’s start with the proposals, sponsored by Rep. Ed Markey (D-Mass.) and Sen. Ron Wyden (D-Ore.), to prohibit the export of tar sands crude shipped via the Keystone XL Pipeline and petroleum products made from that oil. This policy violates the two most fundamental principles of the global trading system: national treatment (treat foreigners and locals equally) and most-favored-nation (treat all trading partners equally).

The national treatment principle prohibits importing nations from discriminating against a foreign commodity, service, or item of intellectual property once it has entered into domestic commerce. The moment Canadian crude crosses the border, whether via Keystone XL or any other mode of transport, it becomes part of U.S. commerce. Thus, under both GATT (Article III) and NAFTA (Articles 301, 606), it must be accorded national (equal) treatment. Since Congress does not ban petroleum product exports made from U.S. crude, the Markey-Wyden proposals are discriminatory and in conflict with U.S. treaty obligations.

The proposals also flout the most-favored-nation principle (GATT, Article I), which holds that if you grant a privilege to one trading partner, you must grant it to all. Markey and Wyden would not require OPEC crude and products made from it to “stay here.” The restriction would apply only to Canadian crude and the associated products. Wittingly or otherwise, Markey and Wyden would grant most-favored-nation status to OPEC but deny it to Canada! A more foolish way to treat our closest ally and biggest trading partner would be hard to imagine.

The rejoinder to this criticism is that Wyden and Markey don’t go far enough – Congress should ban all petroleum product exports (and natural gas exports, too). Democratic strategist John Podesta’s American Oil for American Soil proposal, for example, would ban exports of petroleum products made from oil produced on U.S. public lands and offshore.

Proposals of this sort would place domestic and national commerce and all trading partners on the same, non-discriminatory footing. Nonetheless, such policies would still be unlawful under GATT.

Article XI: 1 of the 1994 GATT states:

No prohibitions or restrictions other than duties, taxes or other charges, whether made effective through quotas, import or export licenses or other measures, shall be instituted or maintained by any contracting party . . . on the exportation or sale for export of any product destined for the territory of any other contracting party.

Although “duties, taxes or other charges” on exports are permissible, quantitative export restrictions such as quotas and bans are “prohibited,” argue Lode Van den Hende, Jennifer Paterson, and Herbert Smith in Bloomberg Law Reports.

There are exceptions. Under Article XI: 2, export “prohibitions or restrictions” may be “temporarily applied to prevent or relieve critical shortages of foodstuffs or other products essential to the exporting contracting party.” However, America is not facing “critical shortages” of finished petroleum products or natural gas. Natural gas is cheap today because it is plentiful, and gasoline is pricey not because it is in short supply but because crude oil prices are high.

Article XX(g) permits export restrictions “relating to conservation of exhaustible natural resources.” However, note Hende, Paterson, and Smith, “if there is evidence that an export restriction is designed to protect or promote a domestic processing industry, then Article XX(g) cannot be used as a justification.” Promoting domestic manufacturers who use petroleum as a feedstock is Rep. Markey’s leading rationale: “I make the amendment because I want a low price for the oil for toothbrushes, for steel, for pantyhose, for anyone that makes that product here in the United States.” Similarly, Markey argues that DOE should reject license applications to export natural gas so that feedstock prices will be lower and domestic manufacturers more competitive.

(3) Banning exports will discourage production, investment, and job creation. This is too obvious to require elaboration. The smaller the market U.S. companies are allowed to compete in, the smaller their potential sales volume, revenues, and profits. An industry crippled by exclusion from the global marketplace will attract less investment, create fewer jobs, and generate smaller tax receipts. Banning exports restricts wealth creation and undermines U.S. prosperity. Not good!

(4) Banning exports will increase the U.S. trade deficit. Indeed, how could it not? Petroleum products are now America’s leading export, with sales abroad reaching about $88 billion last year. Economists disagree on whether (or why) trade imbalances matter (see e.g., here, here, here, here, and here). Be that as it may, Wyden and Markey decry the U.S. trade deficit with China and urge policymakers to do more to ‘level the playing field.’ Yet they want to kneecap America’s biggest, fastest-growing export sector. The only ‘logic’ operating here appears to be political (that which harms oil and gas companies is good).

(5) Banning energy exports would expose America to charges of rank hypocrisy. Rep. Markey is a leading critic of Beijing’s export restrictions on rare-earth elements. Rare earths are used to manufacture the ‘clean tech’ products of which he is so fond, including hybrid and electric vehicles, solar panels and wind turbines. In March, the U.S., Japan, and EU launched a WTO case against China’s restrictions on rare-earth exports. We cannot flout the same treaty obligations and trade principles we invoke without looking ridiculous and duplicitous in the eyes of the candid world.

(6) Banning energy exports would backfire, harming those the policy supposedly aims to help. Proponents claim banning energy exports will increase domestic supply, which will lower price, which will then ease pain at the pump and make U.S. manufacturers more competitive. But if this is such a great idea, why don’t we do it for agricultural products, automobiles, or any other product made in the USA? Or, as in the anti-Keystone legislation, why don’t we insist that if U.S. products (e.g. computers, confections, pharmaceuticals) are made with imported parts or materials, those products must “stay here” for the benefit of U.S. consumers? It’s because if we banned exports from those other industries, it would bankrupt them.

For the same reason, energy export bans would backfire, harming the very consumers and manufacturers such policies are ostensibly intended to help. In the short term, banning exports might lower prices by producing temporary gluts in domestic markets. But the policy’s adverse impacts would be severe and lasting.

Cut off from global demand for their products, producer and refiner profit margins would decline. Oil- and gas-related capital, production, and jobs would migrate to countries that do not wage political warfare on hydrocarbons. U.S.-based producers would drill and frack less; domestic refiners would idle capacity and invest less in efficiency upgrades. Domestic prices would rise as domestic output fell. Domestic prices would also rise because consumers would depend more on foreign suppliers who face less competition from U.S. producers.

Conclusion

Banning energy exports makes no sense except as a strategy to harm those who frack gas and refine oil for a living. The logic behind such policies is that of party and faction, not economics. Proponents seek to deprive fellow citizens of property rights essential to their survival and success in the global marketplace. It is a sign of how far America has strayed from the constitution of liberty envisioned by the founders that Congress is debating such policies today.

Arthur Brisbane of the NYT this weekend published an op-ed which reads a bit like a ‘mea culpa’ in response to repeated criticisms of reporter Ian Urbina’s jumbling attack on natural gas hydraulic fracturing published late last month:

I also asked why The Times didn’t include input from the energy giants, like Exxon Mobil, that have invested billions in natural gas recently. If shale gas is a Ponzi scheme, I wondered, why would the nation’s energy leader jump in?

Mr. Urbina and Adam Bryant, a deputy national editor, said the focus was not on the major companies but on the “independents” that focus on shale gas, because these firms have been the most vocal boosters of shale gas, have benefited most from federal rules changes regarding reserves and are most vulnerable to sharp financial swings. The independents, in industry parlance, are a diverse group that are smaller than major companies like Exxon Mobil and don’t operate major-brand gas stations.

This was lost on many readers, including me. Michael Levi, a senior fellow for energy and the environment at the Council on Foreign Relations, wrote that the article “repeatedly confuses the fortunes of various risk-hungry independents with the fortunes of the industry as a whole.”

He told me he hadn’t realized that the report was focused on independents and read it more broadly, adding, “If I didn’t know they were talking about certain independents, then Times readers — who don’t know what an independent is — they aren’t going to know what they are talking about either.”

This confusion stems from the language in the article, which near the top referred to “natural gas companies” and “energy companies.” The term “independent” appeared only once, inside a quoted e-mail.

The rest is here. His overall criticism is well founded. The original piece was quite one sided, with only a small section dedicated to those with confidence in the industry. It failed to differentiate between small and large producers, and used scare words such as ‘Enron’ and ‘ponzi scheme’ which were unwarranted. To readers unfamiliar with the natural gas industry, it might have been helpful to point out, as Brisbane notes, that natural gas production has increased from 2% of natural gas production to over 20% in the last 10 years, leading to a steep drop in the price of natural gas.

There is already enough mis-information in the media concerning natural gas, such as the widely touted Gasland, or Stephen Colbert’s recent attack (criticized here). The NYT does a disservice to its readers when misleading criticisms like this are published to support the narrative that hydraulic fracturing is not something Americans should support. Unfortunately, despite the very fair criticisms, the lead author and editor are standing behind their work.

Update 6/3/2011:

In a hastily written post, I erroneously conflated the difference between ‘oil shale’ and ‘shale oil’ and incorrectly thought that the report mentioned below was referring to ‘shale oil.’ Had I been more careful, I would have noticed the end of the report where the author meticulously differentiated between the two. As written, the post below is mostly useless now as I criticize claims that weren’t made. The phrases ‘laughably naive’ and ‘willfull ignorance’ would seem to be more appropriately directed towards my own writing in this case. I apologize to the authors, and thank them for politely pointing out my error in a personal e-mail. Mea culpa.

Unedited, original post below:

—

So says The Checks & Balances Project.

As evidence for a shale oil boom being science fiction, the report cites a bunch of newspaper articles in the past (seriously, some from the early 20th century) where oil shale is mentioned as a potential future energy source. So, because analysts or politicians (or journalists) thought shale oil would come around sooner than it did, present day shale oil production is apparently science fiction. How about a current newspaper article that actually shows companies using fracturing techniques to get shale oil out of the ground, wouldn’t that disprove the whole ‘science fiction’ notion? The New York Times, Oil in Shale Sets Off a Boom in Texas, from late May:

The oil rush is already transforming this impoverished area of Texas near the Mexican border, doubling real estate values in the last year and filling restaurants and hotels.

“That’s oil money,” said Bert Bell, a truck company manager, pointing to the new pickup truck he bought for his wife after making $525,000 leasing mineral rights around his family’s mobile home. “Oil money just makes life easier.”

Based on the industry’s plans, shale and other “tight rock” fields that now produce about half a million barrels of oil a day will produce up to three million barrels daily by 2020, according to IHS CERA, an energy research firm. Oil companies are investing an estimated $25 billion this year to drill 5,000 new oil wells in tight rock fields, according to Raoul LeBlanc, a senior director at PFC Energy, a consulting firm.

“This is very big and it’s coming on very fast,” said Daniel Yergin, the chairman of IHS CERA. “This is like adding another Venezuela or Kuwait by 2020, except these tight oil fields are in the United States.”

Even if you assume the amount of recoverable oil is much less than projected, referring to shale oil as a ‘science fiction’ is laughably naive, to the point of willful ignorance. Did a number of politicians or industry execs hype its potential in the past? Sure, but that doesn’t mean its present day science fiction.

The irony here is overwhelming. I love the idea of bringing more light to the often pernicious collaboration between big business and government, but given that the ‘Recent News’ at the Checks & Balances Project consists mostly of different attacks on fossil fuels, I am skeptical that an equivalent effort will be made to bring to light historical (and present day) exaggerations made by renewable energy proponents, of which there are too many to count.

Finally, its worth asking: what’s the point of a report like this? It reads as just yet another silly dig on an industry that provides trillions of dollars in benefits to the world and has made our lives much better. No feasible alternative to oil has been developed to provide for the worlds transportation needs. Finally, shale oil drillers aren’t coming to Congress begging for dollars (like the renewable energy industries), they’re asking Congress to get out of the way. That fact, in and of itself, should be evidence that shale oil can make a significant contribution to domestic energy production.

In the worst Spitzerian tradition, New York Attorney General Eric Schneiderman (D) today announced that he is suing the federal government for failing to conduct an environmental analysis on the impacts to drinking water caused by ‘fracking,’ a.k.a. hydraulic fracturing, the American-made technological miracle in natural gas production that has roughly doubled known North American gas reserves in only the last 5 years.

New York could be a huge beneficiary of fracking, as much of the state is situated above the Marcellus Shale, an enormous gas deposit in the American Northeast that can be tapped only with this new technology. But environmentalist special interest groups oppose the practice, because it would expand America’s supply of hydrocarbon energy, and they have whipped up alarm among Manhattanites by making unfounded claims that fracking would pollute New York City’s water supply.

In fact, these allegations are bunk. Just ask the British Parliament, which recently concluded that fracking is safe for water supplies. Closer to home, AG Schneiderman could have sought counsel from New York State Geologist Dr. Taury Smith, a self-described liberal Democrat, who  told the Albany Times Union that the state’s natural gas deposits are “a huge gift.” Dr. Smith dismissed the environmentalists’ allegations about water contamination as being “exaggerated,” and “the worst spin.”

As I explained in a previous post,

“While there is some evidence that poorly built ‘fracking’ rigs could lead to the escape of methane into local groundwater wells, this isn’t as disturbing as it sounds. Methane (ie, natural gas) does not make water poisonous, and there is no evidence that the fluids used in the process, which could be toxic, have leaked into well water. Much more importantly, there is ZERO evidence that the process affects water tables used for utility scale water supply, although environmentalist special interests are quick to try to conflate well-water methane contamination with water table contamination. The upshot is that hydraulic fracturing has been used in this country for fifty years, without harming public health and environment.”

In any case, AG Schneiderman’s request ignores the fact that the Environmental Protection Agency already is conducting a high-profile, comprehensive study on fracking’s impact on water, due in 2012. As such, his demand is already being met, so there was no reason to litigate. Of course, he knows this, which is why it’s a safe bet that this silly lawsuit was launched just so the AG could have a press conference, à la Spitzer.

As readers of this blog are no doubt aware, I’m a big fan of ‘fracking,’ a.k.a. hydraulic fracturing, the American-made technological miracle in natural gas production that has roughly doubled known North American gas reserves in only the last five years. In previous posts, I’ve defended fracking from nonsensical attacks launched by ill-informed environmentalists. Quite contrary to what the alarmists would have you believe, we’re lucky for the fracking revolution. Not only has it dramatically increased our domestic supply of natural gas, but now it’s being used to extract oil, too, and it could prove just as revolutionary for that industry.

Fracking does, however, have one major drawback: it has caused rampant rent-seeking. While gas supply has exploded, American consumption increased only 9 percent from 2005 to 2010. The sagging economy has further increased this disparity between gas supply and demand. For consumers, this is great, as it should usher in a period of relatively stable, low prices in the historically volatile gas market. For gas producers, it could be great. The low prices should make their product more attractive relative to other forms of energy. In turn, this could lead to whole new sectors of demand.The problem is that a couple major players in the gas industry refuse to wait for market forces to work their magic.  Instead, these impatient industry titans are trying to convince politicians to enact policies that force Americans to use natural gas.

Consider, for example, Chesapeake Energy CEO Aubrey McClendon, who is leading a nationwide charge to force Americans to use more gas for electricity. As I’ve explained, McClendon has been traveling around the country trying to convince eco-friendly governors to switch from “dirty” coal to “clean” gas. So far, he’s scored one major success. In Colorado, Governor Bill Ritter pushed through a law requiring fuel switching from coal to gas for almost 1,000 megawatts of electricity. If McClendon gets his druthers, other states will follow suit. As I understand it, McClendon’s next targets are Texas and Arkansas.

Then there’s natural gas mogul T. Boone Pickens. He’s trying to get the Congress to enact H.R. 1380, a.k.a. the “Pickens Your Pocket Boondoggle Bill” or the “T. Boone Pickens Earmark Plan,” which would have taxpayers finance the use of natural gas as a transportation fuel, in particular for the trucking industry.

At the very least, these policies are special interest rip-offs. But they could be much, much worse, due to unintended consequences typically wrought by such massive market manipulations.

It’s a welcome development that fracking has increased gas supply; it’s an equally unwelcome development that it has also increased rent-seeking.

British columnist Johann Hari recently took to the Huffington Post to try to whip up alarm about the supposed dangers posed to drinking water by ‘fracking,’ a.k.a hydraulic fracturing, an American-made technological miracle in natural gas production that has roughly doubled known North American gas reserves in only the last five years. I rebutted Hari’s baseless environmentalist talking points in a previous post, and I am much pleased to report this morning that the British Parliament agrees with my debunking of his nonsensical claims.

According to Public Service Europe (by way of the Global Warming Policy Foundation),

“Shale gas drilling has been given the go-ahead by members of the UK parliament who have insisted that the process is safe. An inquiry by the Energy and Climate Change committee concluded that fracking, the process by which gas is extracted from shale rock, poses no risk to underground water supplies as long as drilling wells are properly constructed.”

Dow Jones NewsWire’s writeup includes this money quote from Tim Yeo, the Conservative member of Parliament who chairs the bipartisan committee,

“There has been a lot of hot air recently about the dangers of shale gas drilling, but our inquiry found no evidence to support the main concern–that UK water supplies would be put at risk. There appears to be nothing inherently dangerous about the process of ‘fracking’ itself and as long as the integrity of the well is maintained shale gas extraction should be safe.”

Hear, hear! Is Hari listening?

London Independent columnist Johann Hari feels betrayed by British Prime Minister David Cameron’s decision to embrace the American-made revolution in natural gas production, known as hydraulic fracturing (a.k.a., ‘fracking’). Recently, he wrote in the Huffington Post,

“When the British Prime Minister David Cameron gazed into the dewy eyes of a husky and promised to lead “the greenest government ever,” what did you think that would involve?… you certainly wouldn’t have expected David Cameron’s latest plan. He has decided to convert us to a new energy source [fracking] that seems, in the US, to have released cancer-causing chemicals and radiation into the water supply…”

“Cancer-causing chemicals” AND “radiation” have been released “into the water supply”….that sounds really scary! Fortunately for this American tap-water enthusiast, Hari is full of it. As I explain here,

“While there is some evidence that poorly built “fracking” rigs could lead to the escape of methane into local groundwater wells, this isn’t as disturbing as it sounds. Methane (ie, natural gas) does not make water poisonous, and there is no evidence that the fluids used in the process, which could be toxic, have leaked into well water. Much more importantly, there is ZERO evidence that the process affects water tables used for utility scale water supply, although environmentalist special interests are quick to try to conflate well-water methane contamination with water table contamination. The upshot is that hydraulic fracturing has been used in this country for fifty years, without harming public health and environment.”

Hari hits a wrongness exacta. His claim that hydraulic fracturing has released “cancer causing chemicals and radiation into the water supply” is bogus, and he also incorrectly conflates methane seepage into local wells and the contamination of utility scale water supply with toxic fluids.

At first I thought Hari was making stuff up, but then I learned he was simply borrowing from someone else who made this stuff up. To lend evidence to his baseless claims, Hari links here, to the Amazon page for “Gasland,” a thoroughly debunked agitprop documentary on the supposed evils of fracking.

Two days ago, the New York Times reported that the French Parliament is “leaning” towards a ban on hydraulic fracturing, the American-made technological revolution in production that has vastly increased the known economically recoverable global reserves of natural gas. According to the article,

French lawmakers opened debate on Tuesday on proposals to ban a method for extracting oil and gas deposits from shale because of environmental concerns, throwing up the first serious stumbling block to firms that want to use the practice.

Looking with alarm at the experience in the United States, where shale gas is booming, even members of President Nicolas Sarkozy’s governing conservative party have come out against the practice, known as hydraulic fracturing, in which water, sand and chemicals are pumped deep underground under high pressure to free scattered pockets of oil and gas from dense rock formations.

The article, while interesting, misses the big picture. For starters, it’s unclear why French lawmakers would look “with alarm” at the U.S. experience. While there is some evidence that poorly built “fracking” rigs could lead to the escape of methane into local groundwater wells, this isn’t as disturbing as it sounds. Methane (ie, natural gas) does not make water poisonous, and there is no evidence that the fluids used in the process, which could be toxic, have leaked into well water. Much more importantly, there is ZERO evidence that the process affects water tables used for utility scale water supply, although environmentalist special interests are quick to try to conflate well-water methane contamination with water table contamination. The upshot is that hydraulic fracturing has been used in this country for fifty years, without harming public health and environment.

The article also omits mention of why France might be inclined to dismiss fracking: namely, because it isn’t needed. Since 1980, the French government has made nuclear electricity generation a policy priority, and, as a result, the country gets more than 75 percent of its juice from atomic power. That’s the most in the world—by far. For comparison, the U.S. generates about 20 percent of its electricity with nuclear, and Japan gets about a quarter of electricity generation from nuclear. In light of the government’s singular promotion of nuclear, France has a much lower incentive for other forms of electricity generation, like gas. It can afford to pass on the fracking revolution.

The situation is very much different in the rest of Europe. Spain, for example, uses much imported liquid natural gas for electricity generation, so it is more amenable to domestic hydraulic fracturing. About seven months ago, I had breakfast with a representative from an American gas company that was working closely with Spanish energy companies to develop the technology there.

Then there’s Germany. In that country, the Green Party is anomalously powerful, and their influence renders new nuclear and coal verboten. That’s a problem, because the only alternative to coal and nuclear is Russian natural gas. I won’t review 150 years of European history, but suffice it to say, many Germans aren’t keen on being increasingly dependent on the Russian Bear. The two countries have quite a past.

This applies to much of Central and Eastern Europe. Thanks to the European Union’s climate policies, new coal power is difficult. And thanks to the Japanese nuclear crisis, nuclear is out of favor, too. But for these countries, for whom the Russian yoke is all too fresh on the mind, dependence on Gazprom is out of the question. They are very much amenable to hydraulic fracturing technology.

I rarely sing the Obama Administration’s praises on energy policy, but I must give the President props for identifying the geopolitical opportunity inherent to fracking. The State Department has been actively promoting the technology in Europe, no doubt as a counter to the prospect of European reliance on Russian gas.

To be sure, I hate the way politicians in this country use “energy independence” to justify myriad stupid energy policies, but the gas market is very different from the oil market. Whereas the latter is a global market, the former is bound by the logistical infrastructure (ie, pipes). As a result, it’s relatively easy for Russia to play hardball and use gas deliveries as a diplomatic bargaining chip. It has done so with the Ukraine and Belarus.

France doesn’t need fracking; the rest of Europe does, because it’s much more attractive an option than the alternative, reliance on Gazprom or imported LNG. These geopolitical concerns will drive a European turn to the practice.

The New York Times has a story on the front page of its business section headlined, “Natural Gas Now Viewed as Safer Bet.”  Politico’s Morning Energy reports that Van Jones tweeted a response: “At least until the public learns that fracking poisons H2O.”

Van Jones appears to be a serious person.  He is certainly highly respected in the liberal academic and political establishment.  He earned a law degree at Yale University, founded three leftist activist organizations, and wrote a book, the Green Collar Economy.  Time magazine named him a Hero of the Environment.

President Barack Obama appointed Jones in March 2009 to the new position of Special Advisor for Green Jobs, Enterprise, and Innovation at the White House Council on Environmental Quality.  Jones resigned in September 2009 after controversies arose about several of his past statements and associations.

Van Jones is now a senior fellow at the Center for American Progress and a distinguished visiting fellow at Princeton University’s Woodrow Wilson Center.

Van Jones feels comfortable broadcasting his opinion that fracking (that is, hydraulic fracturing of shale formations to produce natural gas) poisons the water.  He feels comfortable because it has been repeated over and over again by environmental pressure groups, in the film Gasland, and recently in a silly front page article in the New York Times.

That’s how the left operates.  Keep repeating some claim, no matter how poorly substantiated, over and over again, and then get the establishment media to amplify it.

It’s rubbish, of course.  Hydraulic fracturing has been used 2.5 million times since 1949 to extract oil and gas.  There have been some minor problems reported over the years.  In most cases, these have been investigated and the causes determined.  Learning from experience, monitoring, and technological improvements should make fracking even safer and cleaner in the future than it has been in the past.

But Van Jones is not interested in improving a well-established technology.  He’s part of a crowd that wants to create a  public stampede against fracking.

Appearances can be deceiving.  Despite his establishment credentials, Van Jones is not a serious person.