President Barack Obama

This Week in the Congress

by Myron Ebell on May 14, 2011

in Blog, Features

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House Passes Offshore Drilling Bills

The House of Representatives this week and last passed three bills to force the Obama Administration to increase offshore oil and gas production.  H. R. 1229 passed by a vote of 263 to 163, with 28 Democrats voting Yes. H. R. 1230 passed last week by 266 to 149, with 33 Democrats in favor.  And H. R. 1231 passed the House 243 to 179, with the support of 21 Democrats.

All three bills were sponsored by Rep. Doc Hastings (R-Wash.), Chairman of the House Natural Resources Committee.  You can read brief committee summaries of what is in the bills here, here, and here.

Naturally, the White House opposes all three bills.  President Obama and his top energy and environmental officials support policies to raise gasoline and electricity prices for consumers.

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‘Fracking’ in Europe: Who’s in, Who’s out

by William Yeatman on May 12, 2011

in Blog, Features

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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.

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President Obama on High Gas Prices: Blame Anyone But Me

by Myron Ebell on April 30, 2011

in Blog, Features

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The White House has finally realized that there is a close correlation between rising gas prices and dropping presidential popularity ratings, and so President Barack Obama has begun flailing around to try to deflect the blame.  Normally, I would sympathize with the President’s predicament.  Oil prices go up and down as a result of global supply and demand.  But in this case, I think the President deserves all the blame he’s going to get from the American people.

President Obama and his Administration have done everything they can to reduce domestic oil and natural gas production.  The Department of the Interior has cancelled leases on federal land in the West, delayed and denied permits necessary to start drilling on leases (which, remember, are awarded by competitive bid and have already been paid for), restored an executive moratorium on leasing most federal offshore areas, denied a permit to a lease off the Alaska coast for which Shell paid $2.2 billion and has already invested $4 billion, and placed a moratorium on new drilling in deep and shallow waters in the western Gulf of Mexico (the only major offshore oil field in the U. S.).  Since lifting the western Gulf moratorium earlier this year, Interior has been slow-walking the approval of drilling permits.  The President also steadfastly opposes opening the coastal plain of the Arctic National Wildlife Refuge to oil and gas exploration.

Although President Obama said in a recent speech that the U. S. was going to have to produce more oil, the Department of Energy’s Energy Information Administration has projected that domestic oil production is going to decline significantly in the next few years as a result of Administration policies.  The dropoff would be much steeper were it not for the rapid expansion of production in the Bakken field in North Dakota and Montana.  The Obama Administration has not been able to slow production there because all the land is privately owned.

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The President’s Wacky Oil Plan, Part 2

by William Yeatman on April 29, 2011

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I’ve written before about Obama’s tortuous logic when it comes to rising gas prices, and, this week, he again laid out “solutions” that don’t make any sense. Consider,

  • Yesterday, the President implored Saudi Arabia to produce more oil. That is, he told the Saudis to “drill, baby, drill.” He did the same thing a month ago in Brazil. Meanwhile, U.S. production remains stunted by the Obama administration’s de facto moratorium on new oil and gas leases and permits. Why is “drill, baby, drill” appropriate for Saudi Arabia and Brazil, but not for the U.S.?
  • Last Saturday, the President called for an end to tax breaks for the oil industry. He said, “They’re making record profits and you’re paying near record prices at the pump. It has to stop.” So, the President wants to end oil “subsidies” in order to relieve Americans pain at the pump. This doesn’t make any sense, because the effect of oil industry “subsidies” is to lower the price of oil. It’s a market distortion meant to lower the cost of producing oil. By removing these “subsidies,” the price of oil would better reflect the forces of supply and demand, and it would increase.
    [N.B. To an extent, I agree with the President on this one—loopholes in the tax code are a form of corporate welfare that should be stopped. That said, these tax breaks aren’t unique to the oil industry, and singling it out only makes the tax code more complicated. A better way, as articulated by Rep. Paul Ryan, is eliminate ALL corporate welfare.]
  • The President wants to take away oil industry “subsidies,” and turn them into green energy giveaways, because, he says, this will “reduce our dependence on foreign oil.” For starters, it’s unclear how investments in unreliable, expensive electricity produced by wind and solar would “reduce our dependence on foreign oil.” Moreover, in the past, Obama’s has dismissed “drill, baby, drill” on the grounds that it would take years to impact the global oil market. The President claims that expanded oil production would take too long to have an effect on the price of gas, but that increased taxpayer handouts to wind and solar would somehow “reduce our dependence on foreign oil” in a more reasonable time frame.  This is nonsensical.

More on Energy Department’s Awful Green Bank

by William Yeatman on April 14, 2011

in Blog, Features

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Yesterday, I participated on a panel discussion about the Department of Energy’s Loan Guarantee Program for low carbon energy sources. I’ve long been a fierce opponent of the DOE’s green bank—see here, here, here, and here for my take.

In a nutshell, I argue that investment banking is well outside the core competency of Energy Department bureaucrats, so there is no reason to believe that they could start a successful green bank from scratch. Even if they could, political concerns would trump economic reasoning, such that loan authorizations would get funneled to the well-connected, instead of the deserving.

Regarding this last point, consider this recent report by the Center for Public Integrity and ABC News, on the remarkable correlation between the success of DOE Loan Guarantee applications and the amount of money that the applicant raised for Barack Obama’s campaign for the White House.

In addition to the panel, we also organized a coalition letter to the House Appropriations Committee, on the need to excise the DOE’s green bank from the budget. Signatories included CEI, Taxpayers for Common Sense, George Marshall Institute, National Taxpayers Union, and the Nonproliferation Policy Education Center. Click here for a copy of the letter.

The President’s Wacky Oil Plan

by William Yeatman on March 31, 2011

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I’m still trying to wrap my head around the President’s energy speech yesterday. I get the goal: Reduce oil imports 30 percent in a decade. But what I don’t get, at all, is the plan to achieve that goal. The President’s “Blueprint for a Secure Energy Future” doesn’t make any sense.

Consider, for example, his “Blueprint” for oil. It’s all over the place.

In the beginning of the speech, the President mocked the idea of “drill, baby, drill.” He said,

“We’ve been down this road before. Remember, it was just three years ago that gas prices topped $4 a gallon…It hit a lot of people pretty hard. But it was at the height of the political season, so you had a lot of slogans and gimmicks and outraged politicians waving three point plans for two dollar gas—you remember ‘drill, baby, drill?’—when none of it would really do anything to solve the problem. Imagine that in Washington.”

So, the President believes that “drill, baby, drill” would not “do anything to solve the problem.” Yet only moments later, he seemed to change his mind. He told the audience,

“Meeting this new goal of cutting our oil dependence depends largely on two things: finding and producing more oil at home, and reducing our dependence on oil with cleaner alternative fuels and greater efficiency.”

So, the President believes that “meeting this new goal…depends largely on…finding more oil at home.” But “finding more oil” necessarily requires more drilling. How is this different from “drill, baby, drill,” which the President only moments before had denigrated?

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Will President Obama Reconsider Yucca Mountain?

by Myron Ebell on March 18, 2011

in Blog, Features

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Keith Bradsher and Hiroko Tabuchi report in the New York Times today:

Years of procrastination in deciding on long-term disposal of highly radioactive fuel rods from nuclear reactors are now coming back to haunt Japanese authorities as they try to control fires and explosions at the stricken Fukushima Daiichi Nuclear Power Station.

Some countries have tried to limit the number of spent fuel rods that accumulate at nuclear power plants: Germany stores them in costly casks, for example, while China sends them to a desert storage compound in the western province of Gansu. But Japan, like the United States, has kept ever-larger numbers of spent fuel rods in temporary storage pools at the power plants, where they can be guarded with the same security provided for the plants.

Now those temporary pools are proving the power plant’s Achilles’ heel, with the water in the pools either boiling away or leaking out of their containments, and efforts to add more water having gone awry. While spent fuel rods generate significantly less heat than newer ones do, there are strong indications that some fuel rods have begun to melt and release extremely high levels of radiation.

The reason why the United States stores spent fuel rods on site is because Senate Majority Leader Harry Reid (D-Nev.) has been able to block building the Yucca Mountain nuclear depository in Nevada for years.  In 2009, President Barack Obama cancelled Yucca Mountain entirely.

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Primer: EPA’s Power Plant MACT for Hazardous Air Pollutants

by William Yeatman on March 16, 2011

in Blog, Features

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Today, the Environmental Protection Agency proposed a major rule to regulate power plants under the Hazardous Air Pollutants (HAP) Section 112 of the Clean Air Act.

This post is a primer on this consequential and controversial decision.

Section 112 of the Clean Air Act

  • In 1970, the Congress added Section 112 to the Clean Air Act, requiring that the EPA list and regulate Hazardous Air Pollutants (HAPs) that could “cause, or contribute to, an increase in mortality or an increase in serious irreversible or incapacitating reversible illness.” The Congress ordered the EPA to establish standards for HAPs that provided “an ample margin of safety to protect public health.”
  • Due to difficulties interpreting what should constitute “an ample margin of safety,” the EPA largely ignored Section 112 for two decades.
  • In 1990, the Congress, frustrated with the slow pace of HAP regulation, amended the Clean Air Act to remove much of EPA’s discretion over the implementation of Section 112. Lawmakers listed 189 pollutants for regulation. They also legislated HAP pollution controls, known as Maximum Achievable Control Technology (MACT) standards. The Clean Air Act amendments set a “MACT floor” (i.e., a minimum HAP pollution control) at “the average emission limitation achieved by the best performing 12 percent of the existing sources.”
  • Section 112 MACT standards apply to both new and existing stationary sources.
  • Notably, the Congress required the EPA to proceed with caution before it regulated Electricity Generating Units (“EGUs,” or power plants). The 1990 Clean Air Amendments mandated a study on the public health threats posed by EGU HAP emissions, and the EPA Administrator was authorized to proceed with the regulation of HAPs from EGUs only after evaluating the results of this study, and concluding that “such regulation is appropriate and necessary.”

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President Obama’s War on Western Coal Demand

by William Yeatman on March 15, 2011

in Blog, Features

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The Environmental Protection Agency is using an obscure aesthetic regulation in the Clean Air Act to run roughshod over western states.

East of the Mississippi, President Barack Obama’s regulatory crackdown on coal threatens to shutter up to 40 gigawatts of electricity generation. Yet due to a variety of factors (the low sulfur content of western coal, low population density, and newer plant stock), coal-fired plants west of the Mississippi are in a much better position to withstand the regulatory onslaught .

In order to target western coal, the Environmental Protection Agency is leveraging a long ignored provision of the Clean Air Act designed to improve visibility, known as the Regional Haze rule. Notably, this is an aesthetic regulation, not a health-based regulation. In practice, eastern states are exempt from Regional Haze requirements, because the EPA allows states to meet this aesthetic regulation in the course of complying with health-based regulations.

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