The Wall Street Journal has a long piece today about the prospect of using the state to move part of the U.S. transportation fleet from oil to natural gas. It gives prominent voice to the massive public affairs campaign of T. Boone Pickens to add billions to his natural gas fortune as a swansong to a prosperous career.

This campaign takes the form of a bill embraced by ostensible fiscal hawks, causing an uproar from those conservatives who took umbrage at Members abandoning their pledges of fiscal sobriety at the drop of a billionaire’s phone call. This enabled the media to describe the Republicans’ ‘circular firing squad.’ Well played, gentlemen.

The vehicle was not Pickens’ first choice. His first choice was a windmill mandate, transparently pushed by a handful of gas interests, including Chesapeake Energy’s Aubrey McClendon, to put a green hat on their efforts to use the state to displace coal’s market. In this effort, they found natural allies in environmentalist special interests.

I happened to be in the room in 1997 with the American Gas Association, BP, and Enron as they worked with green pressure groups, as radical as the Union of Concerned Scientists as well as more mainstream, anti-coal activists like NRDC, to get a global warming treaty and a domestic cap-and-trade scheme. I couldn’t believe my ears and said so, which in a matter of weeks led to us parting ways.

When Pickens was pitching his Plan A in an off-the-record meting a few years ago, I congratulated him on discovering my old boss Ken Lay’s business plan: he had some gas interests, bought a bunch of windmills on the cheap because they aren’t economic investments, then set about to use his lobbying muscle to make them not economically viable, but rather, as President Obama is given to saying, “the profitable kind of energy.”

The windmill mandate flopped. So Pickens unloaded his windmills and reached up another sleeve. Now, the argument goes: (1) we have lots of natural gas, thanks to the hydraulic fracturing revolution in production; (2) oil is expensive; (3) therefore, we should move transportation onto natural gas, although this cannot happen without robbing taxpayer Peter to pay gassy Paul, according to anyone cited in the WSJ article.

Of course, we also have vast quantities of oil, likely all of it recoverable at a per-barrel price around half of where it stands today. So that’s not really much of an argument for such wrenching, expensive, uneconomic intervention, now is it?

But this is the sort of advocacy that bad ideas are forced to employ. As my CEI colleague Myron Ebell wrote:

Why are billions of dollars of taxpayer-funded subsidies needed?  According to T. Boone Pickens’s web site, it’s because natural gas vehicles are cheaper to operate than gasoline or diesel vehicles:  “Even with higher initial costs (which will disappear as manufacturing ramps up) the life-cycle costs of NGVs [natural gas vehicles] are significantly lower.  Fuel costs are at least 15 percent less using natural gas rather than gasoline or diesel.”

So people need to be paid in order to make them want to buy vehicles that will save them money.  Yes, that makes sense: I always prefer the more expensive product unless there is a government rebate for the cheaper one.

Given all of this, we have three takeaways from today’s Journal piece.

First, here is the chart of countries this idea seeks to have us be more like.

Message: be more like Third-World countries. But for Italy, which has long directed nearby North African gas into its economy, no other OECD country is big into this old idea. I know that history of saying “look at Spain” didn’t work out to well about the windmills, but countries without oil, like, say, über-green Germany, aren’t on the list. Why?

Second, the article acknowledges these countries have been doing this for a long time. Yet the Wall Street Journal’s pull-quote gives us the $5-$9 Billion Quote of the Day: “T. Boone Pickens on subsidies for natural-gas truckers: The government should provide five years of subsidies, ‘and then get the hell out of it.  It flies by then, or it’s a bad idea.’”

Yeah. Once you build a subsidy, and the constituencies dependent upon it, even if it doesn’t work Washington is pretty good about letting it expire. It hasn’t worked anywhere with decades of support. A clever man, Mr. Pickens.

Finally, the story admits that this very scheme was one of the ‘stimulus’ schemes. Mr. Pickens is calling for the ‘stimulus’ to continue, for his investments in the uneconomic, for 5 more years.

Stimulus. Subsidy. Can’t say it too many times. That’s what this is. Republicans, wise up.

♫ You don’t have to live like a refugee ♫

You’ve probably heard the dreary narrative many times. By increasing the frequency and severity of floods, storms, droughts, and famines, and by accelerating sea-level rise, anthropogenic global warming will drive millions of people from their homelands. Wave after wave of “environmental refugees” will inundate poor countries barely able to feed their own populations. Fragile governments will tumble. Regional conflicts will intensify. Moral of story: “Global warming is a national security threat – even the generals are worried.”

Google “climate change” and “environmental refugees,” and about 5 million sites  pop up. So you might be inclined to think, where there’s so much smoke, there’s bound to be some fire.

Many of these sites — for example, National Geographic News – reference a November 2005 United Nations Environment Program (UNEP) report predicting there would be as many as 50 million climate refugees in 2010. What actually happened?

Today’s (pre-Earth Day) edition of the Wall Street Journal reports that the 50 million climate refugees did not materialize. In fact, many of the places UNEP supposed would be hardest hit by global warming are rapidly gaining population!

From the article:

In 2005, the U.N. Environment Program (UNEP) published a color-coded map under the headline “Fifty million climate refugees by 2010.” The primary source for the prediction was a 2005 paper by environmental scientist Norman Myers.

Six years later, this flood of refugees is nowhere to be found, global average temperatures are about where they were when the prediction was made—and the U.N. has done a vanishing act of its own, wiping the inconvenient map from its servers.

The map, which can still be found elsewhere on the Web, disappeared from the program’s site sometime after April 11, when Gavin Atkins asked on AsianCorrespondent.com: “What happened to the climate refugees?” It’s now 2011 and, as Mr. Atkins points out, many of the locales that the map identified as likely sources of climate refugees are “not only not losing people, they are actually among the fastest growing regions in the world.”

Some specifics. Atkins observes that “far from being places where people are fleeing, no fewer than six of the very fastest growing cities in China, Shenzzen, Dongguan, Foshan, Zhuhai, Puning and Jinjiang, are absolutely smack bang within the shaded areas identified as being likely sources of climate refugees.” He further notes that “many of the fastest growing cities in the United States also appear within or close to the areas identified by the UNEP as at risk of having climate refugees.”

Climatologist Patrick Michaels offers some relevant numbers:

Folks were supposed to be streaming away from low-lying tropical islands because of worse and more frequent hurricanes.  The population of the Bahamas, which catches about as many tropical cyclones as any place on earth, is up 14% since 2000.  The Solomons, up 20%.  Seychelles: 9%.

So enjoy Earth Day because “you don’t have to live like a refugee” — or at least you don’t because of global warming.

There is an ongoing ethanol spat between Senator Coburn (R-OK) and Grover Norquist, President of Americans for Tax Reform. The dispute is over conservative support for a bill that would repeal the ethanol tax credit, which has the effect of raising an industry specific tax. Americans for Tax Reform comes down hard on any effort to increase taxes. The Wall Street Journal added their two cents in favor of Senator Coburn:

Our readers know Mr. Norquist as the plucky author of the no-new-taxes pledge, which has helped to make tax increases a red line in Republican politics. In a letter to Mr. Coburn, a deputy of Mr. Norquist writes: “Repealing the ethanol credit is the right thing to do, but other taxes must be reduced in the same legislation by at least this much to prevent a net tax increase.”

We understand the larger principle that Americans for Tax Reform is trying to defend. Axing every credit, exemption and deduction in the tax code, while leaving tax rates high, would result in a higher general tax burden and more money for Washington to spend. A true tax reform would trade such tax loopholes and subsidies for lower rates.

Coburn’s amendment (which would have been attached to a larger bill) is dead, so the fight is in recess and will reappear before the end of the year. It seems that it would be much harder to pass legislation that would kill the VEETC and also lower taxes, rather than solely ending the VEETC. It also raises the question of which other taxes should be lowered. The VEETC goes back to oil refiners, though some of the savings are passed onto consumers.

This issue came up in 2010. Americans for Tax Reform clearly articulated their position here:

In recent days, Americans for Tax Reform’s opinion on extending the Volumetric Ethanol Excise Tax Credit (“VEETC”)has come into question.  Below is our position on the issue:

1. VEETC is poor energy policy. Encouraging inefficient fuels which accomplishes neither reductions in carbon—its purported impetus— nor monetary gains for American families is bad energy policy.
2. The VEETC is a tax credit which expires at the end of 2010.  There is no obligation on the part of pro-taxpayer elected officials to vote to extend an expiring tax credit which they believe is bad policy.  In the past, the question has been the elimination of the VEETC while it was still in force.  This affirmative tax hike would have been a violation of the Taxpayer Protection Pledge, but that issue is not applicable to this debate.
3. Therefore, Americans for Tax Reform neither supports nor opposes extending the Volumetric Ethanol Excise Tax Credit.

Not every State is suffering economically.  According to a recent Wall Street Journal op-ed by Joel Kotkin,  unemployment in North Dakota is 3.8 percent (nation-wide, it’s about 9 percent), due primarily to increasing production of oil and gas. And, as noted by Bonner Cohen in a letter to the Journal, North Dakota’s energy boom was made possible primarily because almost all of North Dakota’s rich deposits of oil and natural gas lie beneath privately-owned land. Otherwise, it would have been locked up by the Obama administration.