Steven Chu

Post image for President Obama’s Inaugural Speech: New Heat on Warming?

President Obama’s second inaugural speech featured climate change more prominently than did his first inaugural address. As Greenwire (subscription required) observed:

Gone was Obama’s roundabout reference to climate change through “the specter of a warming planet” from four years ago. This time, the president put the issue front and center.

Will that make any difference legislatively? Probably not. In the House, Republicans opposed to cap-and-trade, EPA regulation of greenhouse gases (GHGs), and carbon taxes are still in charge.

Is the President’s renewed emphasis on climate change just a sop to his environmentalist base? Doubtful. As a second termer, Obama has less reason politically to restrain his ‘progressive’ impulses. Several regulatory options are now in play:

  • The Department of Interior could list more species as threatened or endangered based on climate change concerns.
  • The President could finally veto the Keystone XL pipeline — a key objective of the climate alarm movement.
  • The EPA could issue GHG performance standards for existing (as distinct from new or modified) coal power plants, as well as GHG performance standards for other industrial categories (refineries, cement production facilities, steel mills, paper mills, etc.).
  • The EPA could finally act on petitions pending from the Bush administration to set GHG emission standards for marine vessels, aircraft, and non-road vehicles.
  • The EPA could finally act on a December 2009 petition by the Center for Biological Diversity and 350.Org to establish national ambient air quality standards (NAAQS) for carbon dioxide (CO2) and other GHGs.

I’ll make one prediction: If Obama does not veto the Keystone XL Pipeline after talking the talk on climate change, green groups will go ballistic (even though, Cato Institute scholar Chip Knappenberger calculates, full-throttle operation of the Keystone XL Pipeline would add an inconsequential 0.0001°C/yr to global temperatures). My colleague Myron Ebell reasonably speculates that Obama’s tough talk on climate was a signal to green groups to organize the biggest anti-Keystone protest ever.

Now let’s examine the climate change segment of Obama’s inaugural speech: [click to continue…]

Post image for Why the GOP Will not Support Carbon Taxes (if it wants to survive)

Last week on National Journal’s Energy Experts Blog, 16 wonks addressed the question: ”Is Washington Ready for a Carbon Tax?” Your humble servant argued that Washington is not ready — unless Republicans are willing to commit political suicide. That’s no reason for complacency, because spendaholics have on occasion gulled the Dumb Party into providing bi-partisan cover for unpopular tax hikes. President G.H.W. Bush’s disastrous repudiation of his ‘read-my-lips, no-new-taxes’ campaign pledge is the best known example.

To help avoid such debacles in the future, I will recap the main points of my National Journal blog commentary. Later this week, I’ll excerpt insightful comments by other contributors.

Nearly all Republicans in Congress have signed the Taxpayer Protection Pledge, a promise not to increase the net tax burden on their constituents. Although a “revenue neutral” carbon tax is theoretically possible, the sudden interest in carbon taxes is due to their obvious potential to feed Washington’s spending addiction. If even one dollar of the revenues from a carbon tax is used for anything except cutting other taxes, the scheme is a net tax increase and a Pledge violation. Wholesale promise-breaking by GOP leaders would outrage party’s activist base. 

Even if the Taxpayer Protection Pledge did not exist, the GOP is currently the anti-tax, pro-energy alternative to a Democratic leadership that is aggressively anti-energy and pro-tax. Endorsing a massive new energy tax would damage the product differentiation that gives people a reason to vote Republican. Recognizing these realities, House GOP leaders recently signed a ‘no climate tax’ pledge.

That’s good news. But this is a season of fiscal panic and I was there (in 1990) when the strength of Republicans failed. Perhaps the best time to kick carbon taxes is when they are down. So let’s review additional reasons to oppose a carbon tax. [click to continue…]

Post image for Obama’s Green Albatross

Stimulus spending on environmentalist policy is a green albatross around the neck of President Barack Obama. Inspectors General are having a field day auditing stimulus-funded programs for so-called “green jobs,” and the media LOVES stories about wasted taxpayer money. What started as a sop to his environmentalist base, now threatens to become a slow-drip nightmare of negative press. The timing couldn’t be worse for the President. It takes time to disburse scores of billions of dollars, so we are only now starting to scrutinize stimulus spending. By November 2012, we’ll be able to account for most of the money, and unless the current trend changes radically, the Executive in Chief is going to look conspicuously incompetent.

Here’s the back-story: In early 2009, the Executive and Legislative branches of government had a popular mandate to defibrillate America’s moribund economy with a huge injection of taxpayer dollars. Instead of limiting this “stimulus” to state bailouts and infrastructure spending, the Obama administration (led by climate “czar” and former EPA administrator Carol Browner) and the Congressional majority (led by House Energy and Commerce Chair Henry Waxman (D-Beverly Hills)) also sought to advance environmentalist policy.  As a result, the American Recovery and Reinvestment Act, a.k.a. the stimulus, included almost $70 billion in spending for green jobs and renewable energy infrastructure.

Every single link along the green energy supply chain was showered with subsidies. There was funding for green jobs training, funding for factories to make green products, and funding to incentivize demand for green goods and services. It was as like a green Gosplan!

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Post image for Blame China for Solyndra’s Downfall?

Tomorrow, the House Energy and Commerce Committee will hold its second hearing on Solyndra, the manufacturer of innovative non-silicon-based solar panels that borrowed $527 million only to file for bankruptcy, shutter its brand new Freemont, Calif. factory, and lay off 1,100 employees on September 6. Expect Committee Democrats to blame China and the allegedly unforeseen fall in the price of conventional silicon-based solar panels for the debacle.

That’s the line the Department of Energy’s (DOE) witness, Jonathan Silver, took at the Committee’s first (September 14) Solyndra hearing, noting China’s provision of more than $30 billion in subsidized financing to its solar manufacturers, which rapidly dropped silicon prices, “taking Solyndra, and many industry analysts, by surprise.” DOE’s blog, Energy.Gov, had already adopted this explanation on August 31, the day Solyndra announced it would file for bankruptcy.

Similarly, Solyndra’s August 31 announcement coyly cited the “resources of larger foreign [i.e. Chinese] manufacturers” and a “global oversupply of [mainly Chinese] solar panels” as factors foiling the company’s business plan. Solyndra’s ex-employees have applied to the Department of Labor (DOL) for aid under the Trade Adjustment Assistance (TAA) program, claiming that China put them out of work. If DOL approves the application, Solyndra’s former workers will receive allowances for job retraining, job searching, and health care for up to 130 weeks, or about $13,000 per employee. Blogger Scott Linicom decries such double dipping:

So to recap: massive government subsidies created 1,100 “green jobs” that never would’ve existed but for those massive government subsidies.  And when those fake jobs disappeared because the subsidized employer-company inevitably couldn’t compete in the market, the dislocated workers blamed China (instead of what’s easily one of the worst business plans ever drafted) in order to receive . . . wait for it . . . more government subsidies. Behold, the Circle of Government Life.

Whether it’s Solyndra execs and DOE officials trying to save face, ”progressives” defending the honor of green industrial policy, or former employees looking for more taxpayer freebies, they all would have us believe that Solyndra’s $535 million loan guarantee was a good bet at the time it was made. They need a scapegoat for Solyndra’s crash, so they blame China. Indeed, some (e.g. Grist) claim Solyndra’s collapse shows that the U.S. government isn’t doing enough to help our “clean tech” companies “compete.” Balderdash.     [click to continue…]

Post image for President Obama Endorses More Oil Production—in Brazil

The most astonishing event this week was President Barack Obama endorsement of more oil production—in Brazil.  In a speech to a CEO Business Summit in Brasilia, the President said:

By some estimates, the oil you recently discovered off the shores of Brazil could amount to twice the reserves we have in the United States.  We want to work with you.  We want to help with technology and support to develop these oil reserves safely, and when you’re ready to start selling, we want to be one of your best customers.  At a time when we’ve been reminded how easily instability in other parts of the world can affect the price of oil, the United States could not be happier with the potential for a new, stable source of energy.

This is the same President who has spent the last two years doing everything he can to reduce oil production in the United States.  Cancelled and delayed exploration leases on federal lands in the Rocky Mountains; the re-institution of the executive moratorium on offshore exploration in the Atlantic, the Pacific, most Alaskan waters, and the eastern Gulf of Mexico; the deepwater permitting moratorium and the de facto moratorium in the western Gulf.  The result is that domestic oil production is about to start a steep decline.  An article on Red State by Steve Maley summarizes the future effects of the Obama Administration’s war against oil.

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Post image for Iain Murray on Japan’s Nuclear Crisis

CEI’s Iain Murray has an op-ed in The Washington Times today explaining what can be learned from the ongoing nuclear crisis in Japan.

Here’s an excerpt:

Without this vigorous defense of nuclear, the Obama energy plan will have a massive hole at its core – one that cannot be filled by wind and solar power any more than it can be filled by fairy dust. The obvious answer is for the administration to stop its war on coal, but that is unlikely. The only other plausible choice is natural gas, derived by hydraulic fracturing – a procedure that environmentalists are already trying to ban. If they want to keep their plan going in any workable form, the president and Mr. Chu need to tell Americans unequivocally where their future power is going to come from, and push back against ideological environmentalists who are trying to ban practical sources of energy.

Read the rest here.

Post image for Senator Al Franken’s Shakedown Undermined Energy Secretary Chu’s Defense

Energy Secretary Steven Chu today testified before the Senate Energy and Natural Resources Committee on the Obama administration’s  budget for the Department of Energy (DOE). Despite the fact that the DOE has yet to spend $21 billion in stimulus money (about 60% of its 2010 budget), the White House proposed a 12% budget increase.

Minnesota Senator Al Franken was unconcerned with the deficit implications of giving billions more taxpayer dollars to a bureaucracy that has yet to spend the billions of taxpayer dollars it already has. Instead, he had a much more parochial matter in mind.

His line of questioning for the Energy Secretary focused on Sage Electrochromic, a Minnesota-based window manufacturer. Senator Franken explained that the window company had received a $70 million loan guarantee from the Department of Energy, which you’d think would be  pleasing to the Senator. After all, a federally backed loan is a taxpayer subsidy that allows recipients to obtain better financing.

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