October 2010

Sharing Isn’t Caring

by Marc Scribner on October 4, 2010

Late last month, Washington, D.C. launched its Capital Bikeshare (”CaBi” to its groupies) program to much acclaim from the usual suspects — New Urbanists and bicycle imperialists. For those uninitiated, contemporary bike-sharing programs involve the placement of controlled bicycle racks (usually by government or through large government-financed private operators) around a city so that residents, tourists, and commuters can rent bikes for a fixed period of time and then return them to other racks around the city. All for a nominal, generally subsidized fee.

New Urbanists and Greens love these programs because, for them, any government intervention that puts more people on bikes is a good one. After all, they’ve already spent a lot of political capital zoning out parking and narrowing car lanes to construct special bicycle lanes. They might as well try to get people to use their “livability” boondoggles — or at least provide the illusion thereof.

Oh, the hopes were high on September 20. On a blog run by MetroBike, a pro-bikeshare lobbying/consulting outfit, the owner declared the launch of CaBi to be “a dream come true.” He goes on to cite other programs in Copenhagen, Paris, and Amsterdam as great models for D.C. to emulate. Of course, these fawning portrayals rarely mention the costs. As someone who doesn’t own a car, rarely uses public transit, and who uses a bicycle for the vast majority of excursions in Washington, D.C., let me explain why I’m not thrilled with bike-sharing and why you shouldn’t be either.

First, every one of these systems operates at a loss. Just like transit fares, bike-share user fees do not generate enough revenue to maintain existing capital, let alone provide for expansion (or even cover the initial public investment). For example, Paris’ oft-lauded Vélib program experienced a stock loss rate of nearly 80 percent after launch. That is to say, of the initial 20,600 Vélib bikes — with an average cost of $3,500 per bike when initial investment and maintenance are included — 16,000 were either stolen or damaged beyond repair. Tourists love ‘em, but they’re not the ones subsidizing most of the cost to the public. Another example is Montreal’s BIXI program, which is currently more than $30 million in debt.

Second, proponents claim externalities from increased bike-share use — less congestion, less pollution — provide benefits not shown by simple fiscal accounting. This appears at first glance to be a valid point. However, when looking at experiences with similar programs in other cities, the positive externalities argument falls flat. Law professor and bike-share skeptic Steve Clowney points to this report on BIXI. Researchers at McGill University released a study with the following key findings:

Eighty-six percent of BIXI trips replaced rides on personal bikes (25 percent), walking (28 percent), or public transit (33 percent).
Eight percent of BIXI trips replaced cab rides.
Two percent of BIXI trips replaced private car rides.
Four percent of BIXI trips add trips that otherwise would not have been made.

So, assuming for a moment that transit, walking, and cycling (using your own bike) are all desired “green” forms of urban mobility, only 10 percent of BIXI trips replaced car trips. Even under the most alarmist global warming scenarios, the positive public health and environmental externalities cannot justify this fiscal black hole.

Third, bike-share programs are administrative nightmares. As some starry eyed proponents are starting to discover, land-use regulations, politically entrenched NIMBY interests, and odd government management regimes present big hurdles for new transportation models. D.C. transportation junkies are shocked to learn that the National Park Service, which manages a decent chunk of parkland in D.C., is an inept, opaque government bureaucracy. They’re also flabbergasted that politically connected resident groups might adamantly oppose this little scheme. Color me unsurprised by any of this. Land-use regulations have been twisted to benefit specific entrenched constituencies and the government is generally incompetent when it comes to any issue related to mobility (or virtually everything, for that matter).

Let me make it clear that I’m hardly anti-bicycle (although, I am strongly opposed to subsidized mass transit and highways). What I’m opposed to is misguided utopianism and spending taxpayer dollars on programs where there is significant risk of failure. We’ve already had one failed bike-share program in D.C., and it looks like we’re going to have two.

Washington’s New War on the West

by Ben Lieberman on October 4, 2010

in Blog

The economic track record of the current administration and Congress is not a good one. Unemployment remains stubbornly high at nearly 10 percent, and many believe federal missteps prolonged the recession and are weakening the recovery. While things like ill-advised spending, Obamacare, and looming tax hikes are doing damage nationwide, a number of other federal measures have particularly burdened the American West, the region suffering with the highest unemployment rate in the country. The Senate and House Western Caucuses’ recent study, “The War on Western Jobs,” documents the host of environmental policies that have targeted the sectors crucial to the economies of Western states — especially energy production but also mining, logging, farming, and ranching.

It is important to note that the federal government controls the economic fate of western states to a greater extent than any other part of the country. The lands comprising 12 western states (Montana, Wyoming, Colorado, New Mexico, Arizona, Utah, Nevada, Idaho, Washington, Oregon, California, and Alaska) are nearly half owned by the federal government. More so than other regions, job losses in the West can be traced to federal policies.

The Obama administration’s attack on Western energy jobs began within weeks of taking power when the Department of the Interior revoked 77 oil and gas leases in Utah and halted new oil shale projects in Colorado. By the end of 2009, the administration had issued fewer onshore energy leases than in any year under Bush or Clinton, and the pace thus far in 2010 is no better. Throughout the West, vast energy-containing federal lands are currently off-limits, and the administration and Congress have sought to restrict access to millions of additional acres. Even where energy leasing is not explicitly prohibited, Obama’s regulators have imposed red tape and bureaucratic delays that have substantially limited it.

Beyond oil and gas, the administration has all but declared war on coal mining, which is particularly vital to Wyoming and Montana. The Environmental Protection Agency’s global warming regulations as well as many other anti-coal measures (including Boiler MACT, combustion byproducts, new National Ambient Air Quality Standards, others) bode ill for the future of western coal.

The threat of new energy taxes has only added to the chilling effect on Western investment in energy projects.

In addition to the impact on energy production, the federal government’s excessive ownership of land — as well as intrusive measures like the Endangered Species Act that target private property — is posing growing problems for other industries. Despite the West’s mineral wealth, mining jobs continue to decline. The same is true of logging. Farmers and ranchers also face a host of costly hurdles.

Instead of providing regulatory relief that could turn the region’s economy around, Congress has proposed new constraints like the sweeping Clean Water Restoration Act. This bill would essentially federalize land-use decisions on any property containing wetlands, and compounds the threat by defining wetlands so expansively so as to include almost everywhere. And the Obama Department of the Interior and Department of Agriculture’s Forest Service have issued new agency guidance for federal lands, which under the name of addressing global warming would further restrict access.

Granted, Washington’s control over western lands and the misuse of that control to curtail economic activity is not a new phenomenon, but the current administration and Congress have taken it to a new level.

The West’s economic pain has not been justified by environmental gain. Quite the contrary, Uncle Sam turns out to be a lousy landlord. For example, the forest fires that have become common in Western lands in recent years have mostly originated on federal lands, and not on privately-held forests which tend to be better managed against such risks. A less-intrusive federal approach could deliver both economic and environmental benefits.

The next Congress should have a long list of reforms on its agenda. The Western Caucuses’ report spells out what needs to be addressed to get the American West back on the path to prosperity.

Cooler Heads Digest 1 October 2010

by William Yeatman on October 1, 2010

in Cooler Heads Digest

Announcements

Cambridge Energy Research Associates have just published an important study on the competitiveness of America’s petroleum industry titled “Fiscal Fitness.” You can find it here:

The Washington Examiner has been running a big series this week on “Big Green” featuring many articles on a wide variety of topics.

The Clapham Group and Roadside Attractions invite you to a private preview of the controversial new film, “Cool It” next Tuesday at 4 PM at the Heritage Foundation, 214 Massachusetts Avenue NE, Washington, DC 20002. Click here to RSVP

The Senate and House Western Caucuses have just released a report on “The War on Western Jobs.”

The Senate Environment and Public Works Committee’s Minority Staff this week issued a report on “The EPA’s Anti-Industrial Policy.”

In the News

Interior Department’s Other Drilling Moratorium
William Yeatman, Politico Energy Arena, 1 October 2010

Peanuts, Crackerjacks, and Elitist Transportation
Henry Payne, Planet Gore, 1 October 2010

Top Science Body Cools on Global Warming
Graham Lloyd & Matthew Franklin, The Australian, 1 October 2010

The Sorry Green Giant
Jonathan Adler, National Review Online, 1 October 2010

International Cap-and-Trade Taxation: US Beware!
Matthew Sinclair, MasterResource.org, 30 September 2010

UK Renewable Energy Production Falls for 2^nd Time
Juliette Jowit, Guardian, 30 September 2010

Where EPA is Public Enemy #1
Robert James Bidinotto, American Spectator, 30 September 2010

New EPA Rules Will Cost More than 800,000 Jobs
Hans Bader, GlobalWarming.org, 28 September 2010

Electric Cars Aren’t Going To Save Us
Walter Russell Mead, American Interest, 28 September 2010

News You Can Use

What We Are Up Against

In an apparent effort to be witty, the alarmist advocacy group 10:10, which describes itself as “a global campaign to cut carbon 10% a year starting in 2010,” produced and posted a revolting video that features blowing up anyone who disagrees, including school children. Although the disgusting video was soon replaced on the 10:10 website with an apology “to anybody we have offended,” the extremist message was clear: You don’t get with the program, you get exterminated. For more, click here and here.

Global Warming Policy Reaches America’s Kitchens

Ben Lieberman

On September 27th, the Department of Energy issued its proposed new energy efficiency standard for refrigerators. Buried in the agency’s analysis is its prediction that the stringent new rule will be a money loser for a majority of consumers-that is, the higher purchase price of refrigerators meeting the new energy use limits won’t be earned back by the reduction in electric bills. DOE nonetheless justifies this anti-consumer regulation by including “the social cost of carbon” and calculating that “the estimated value of the CO2 emissions reductions” makes it all worth it.

Inside the Beltway

Myron Ebell

Senate and House Adjourn until after the Election

Having passed almost nothing since returning from the August recess, the House and Senate adjourned this week after agreeing to a continuing resolution to fund the federal government through 3rd December. The Congress has not sent a single appropriations bill to the President so far this year for Fiscal Year 2011, which begins today, 1st October. The Senate and House plan to return the week of 15th November to take up the appropriations bills and possibly a number of other bills on a wide variety of topics. One bill that could reach the Senate floor in a lame-duck session is the Bingaman-Brownback renewable electricity standard bill, S. 3813. Four Republicans and 28 Democrats are now co-sponsoring the bill, which would require that electric utilities provide at least 15% of their electricity from renewable sources by 2021.

Salazar Announces Tough New Rules for Offshore Deepwater Drilling

Interior Secretary Ken Salazar on Thursday announced that there would be tough new safety rules on offshore drilling that would have to be complied with fully by existing operations before new drilling permits would be issued. In a dull speech at the Smithsonian Institution’s Woodrow Wilson International Center for Scholars, Salazar hit the standard Obama Administration themes, including the pledge to win the race with China for clean energy technologies. It amazes me that the idea that there is such a race has been repeated so often that it is now accepted as given. It would be news to the Chinese. China is in a race with the U. S., and they are winning it. It is the race for abundant and affordable conventional energy.

While China is now installing nearly as many windmills every year as the U. S., they are constructing at least twenty times’ as many coal-fired power plants. About 80% of China’s electricity comes from burning coal, which is why the wind turbine and solar panel manufacturers are closing factories here and in the EU and building new ones in China. The cost of manufacturing anything depends primarily on the costs of capital, labor, and natural resources-and usually the most important natural resource component is energy. Assuming comparable capital costs, China has lower energy costs as well as lower labor costs than the U. S. If the U. S. wishes to remain competitive with China and insists on using higher-cost energy, then the only way to do it is to lower labor costs dramatically. The future that the Obama Administration is promoting will require low wages in this country-that is, if there are any manufacturing jobs left.

Landrieu Takes on the White House over Gulf Drilling Moratorium

Senator Mary Landrieu, Democrat of Louisiana, is doing everything she can to fight the Interior Department’s continuing moratorium on new drilling permits in the Gulf. She placed a hold last week on the nomination of Jacob Lew to be Director of the White House Office of Management and Budget and announced this week that she will block a vote on the Senate floor to confirm Lew until the Obama Administration starts issuing drilling permits again.

White House press secretary Robert Gibbs called Landrieu’s action “sad” and “outrageous.” Landrieu responded that it was outrageous that the Administration didn’t care about the thousands of people in the Gulf who were losing their jobs, whom she called hostages. Michael R. Bromwich, the director of the Interior Department’s new Bureau of Ocean Energy Management, Regulation, and Enforcement, said, “There’s no chance that we’ll lift it sooner because of political pressure of any sort.”

Used Car Prices are Going Up

Recently, some environmental pressure groups suggested that the next round of increases in Corporate Average Fuel Economy Standards for cars and light trucks should be 60 miles per gallon by 2025. Today, the Obama Administration’s Environmental Protection Agency and Department of Transportation told the press that they were considering requiring increases of between 3 and 6 percent per year in fuel economy after the 35.5 miles per gallon average for cars and light trucks goes into effect in 2016. Six percent per year between 2017 and 2025 would get to 62 miles per gallon by 2025.

The 35.5 miles per gallon standard by 2016 is going to cause a major car crash. If the manufacturers somehow manage to produce a lot of cars that meet the target, it is unlikely that many consumers are going to want to buy them. The automakers will be forced to sell their tiny cars very cheaply and to raise prices on larger cars dramatically in order to meet the 35.5 mpg average. This is a recipe for bankrupting all the automakers and for a second bailout that will makes the taxpayer bailout of GM and Chrysler look cheap. To then raise the standard to 60 miles per gallon by 2025 is sheer fantasy.

The Cooler Heads Digest is the weekly e-mail publication of the Cooler Heads Coalition. For the latest news and commentary, check out the Coalition’s website, www.globalwarming.org.

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