The shale-gas revolution in the United States has led to massive increases in natural gas production, increasing our domestic supply and reducing prices. While global trade in natural gas exists, the infrastructure and volume is low enough such that there isn’t much of a single global price for natural gas (unlike oil, where there are a few prices which tend to stick close to one another). You can look at spot prices for various countries here, note the large disparity.
The shale gas revolution in the U.S. has been so enormous that infrastructure that was built with the expectation of importing natural gas is now being switched to export natural gas to other countries. Congressman Ed Markey (D-Mass.) is apparently concerned that producers of natural gas in the U.S. would like to export some of the excess to take advantage of higher prices in other parts of the world. Yet as Markey so often likes to point out, America has in recent decades consumed more oil than we produced. If other countries had decided 40 years ago to shut off their oil exports to keep domestic prices as low as possible, America would be a much different place today (and much worse off).
Believe it or not, low energy prices are good for countries other than just the United States. Trade helps make this possible, so its odd that Markey would want to restrict natural gas exports: [click to continue…]
The House today votes on H.R. 910, the Energy Tax Prevention Act, as amended. The bill would stop EPA from ‘legislating’ climate policy under the guise of implementing the Clean Air Act (CAA), a statute enacted in 1970, years before global warming became a public policy issue.
Debate will last for one hour. The Rules Committee is allowing Democrats to offer twelve hostile amendments. Three Republican amendments to strengthen the bill (by, for example, prohibiting federal agencies from regulating greenhouse gases via the Endangered Species Act) were ruled out of order. As my colleague Myron Ebell notes, Democrats allowed Republicans to offer only one amendment on the Waxman-Markey cap-and-trade bill. The November 2010 elections notwithstanding, the House GOP still suffers from an acute case of minority-itis.
The most mischievous of the Democratic amendments are: [click to continue…]
Elections: Running from Cap-and-Trade
Campaigns often become annoying as election day approaches, but they do have the benefit of sucking all the energy out of Washington. Congress has been out for a month to allow Members to campaign, and even the agencies tend to go silent just before an election for fear that announcing some new rule or policy could become a damaging campaign issue.
But when Washington springs alive again after next Tuesday, it will be a city transformed by the election results. Even if the rout of House and Senate Democrats occurs precisely as predicted (minus 50 House seats and 7 Senate seats is the average guess; here is a typical forecast), it will all look and feel different after it has happened than in anticipating it.
While the reactions to big election swings are often surprising, one thing that is absolutely clear already is that cap-and-trade has been a significant issue in the campaign and that cap-and-trade will be totally dead after November 2nd. Every Republican incumbent and challenger is running against cap-and-trade. Most are running against global warming alarmism. House Democrats who voted against the Waxman-Markey bill are featuring that vote in their campaigns. Only a handful of the more than 200 Democrats who voted to pass Waxman-Markey in 2009 are even mentioning it in their campaigns.
Cap-and-trade is especially potent as an issue in coal country. In West Virginia, it has become so toxic that Governor Joe Manchin (D) revived his Senate campaign against John Raese by running a television ad in which he shoots a copy of one of the Senate cap-and-trade bills. Rep. Nick Joe Rahall (D-WV)), the Chairman of the House Natural Resources Committee, voted against Waxman-Markey, but is now in the race of his life against a challenger, Elliott Maynard, who is scoring points with voters by arguing that Rahall’s opposition was weak and that he in effect supports cap-and-trade because he voted for Rep. Nancy Pelosi (D-Calif.) for Speaker.
Rep. Rick Boucher (D-Va.) is in even worse shape in his nearby district in Virginia. Boucher put the interests of his party ahead of the interests of his coal-mining district when he made a deal and rounded up the votes necessary to pass Waxman-Markey on June 26, 2009. In 2008, Boucher didn’t have a Republican opponent. This year Morgan Griffith appears to be running a very close race. Boucher’s loss would send an unmistakable signal to congressional candidates in energy-producing and energy-using manufacturing districts for many elections to come.
The chance that the Senate will pass a comprehensive energy-rationing (a k a climate) bill this year remains close to zero. BP’s big oil spill in the Gulf changes very little.
The global warming movement peaked last June 26 when the House passed the Waxman-Markey bill. When members went home for the Fourth of July, many who voted for it discovered that their constituents were angry and mobilized.
Seeing the public reaction, Senator Majority Leader Harry Reid (D-Nev.) dropped plans to move a cap-and-trade bill before the August recess and turned to health care reform. It’s been all downhill since then.
The Kerry-Boxer bill, which is very similar to Waxman-Markey, passed the Environment and Public Works Committee last fall, but it was clear that it couldn’t get 51 votes, let alone 60, on the floor. That’s when Senator John Kerry (D-Mass.) began working on a “middle-of-the-road” package with Senators Lindsey Graham (R-SC) and Joseph Lieberman (I-Conn.).
Even if he does finally release a draft of the measure this week, it’s still not going anywhere. Whether Graham is on board doesn’t matter because he doesn’t bring any other Republicans with him.
Kerry’s draft has restricted cap-and trade to electric utilities only. And he’s stopped calling it cap-and-trade because the American people have figured out that it is an indirect tax on them. Now it’s “pollution reduction and investment.” Similarly, a gasoline tax has been renamed “linked fee.” Call it whatever you want, it’s still a tax that consumers will have to pay. Adding some offshore oil or nuclear incentives or clean coal research can’t hide the fact that prices will go up when energy is rationed.
What’s become increasingly apparent is that this legislation no longer has much to do with reducing greenhouse gas emissions. It’s a monstrous collection of payoffs to big business special interests, ranging from Goldman Sachs to Duke Energy to General Electric.
(This piece originally appeared on the New York Times’s Room for Debate web site. )