2010

Election Exegesis: BTU Tax Redux

by Chris Horner on November 3, 2010

in Blog

Reconciling the various, final pre-election surveys of voter sentiment indicates a that “it’s the spending, stupid.” It is remarkable how quickly public consciousness has developed to know that debt equals taxes.

Cap-and-trade is now dead, having proven, as we predicted serially, to be the 1993 BTU tax, redux. Members in the House voted on both measures on the assurance the Senate would not leave them hanging out to dry, isolated with that difficult vote, only to see their trust misplaced. As opposition grew more intense from the people-who were not at the table when their wealth was redistributed to various interests-the senators realized that they wanted to save jobs. Theirs.

We also see that cap-and-trade’s ugly Plan B cousin, “green jobs,” is not only sure to be an obsession very soon. The public will equally soon come to understand the bankrupting expense of “green jobs” programs: in President Obama’s erstwhile model, Spain, it cost them $750,000 per (temporary) “green job,” placing the nation’s energy infrastructure and economy in peril leading to an ongoing political crisis.

All over Europe Obama’s previously touted model states are struggling to rein in the subsidy schemes which threatened to expand the Greek contagion. These are economic black holes paying small fortunes for each job created, crowding out private sector growth, displacing real jobs responding to market forces with temporary jobs that disappear when the subsidy does, as it must (see: “census jobs”). All the while they necessitate higher energy costs as part of the plan. That makes them much worse than other make-work programs like ditch-digging-and-filling.

Still, just last week Obama’s Energy Department claimed in the Washington Post that its own stimulus version of the scheme was an “unqualified success”-at a half a million dollars per temporary job created! Moreover, all parties acknowledged in the article that the bubble has to be renewed annually or it bursts. Somehow this disastrous failure proved to the Obama administration that “clean-energy investments [sic] are ready for prime time.” Oh, dear.

The coming, attempted ‘green jobs’ binge is no more than WPA-style spending, which FDR confidantes admitted as a flop, and the debt to underwrite which delays the recovery further, just as the public seems to recognize the Obama agenda has already done.

There is the coming “energy” debate in a nutshell, and how, in a rational world, it will play out. Fortunately, ‘green shoots’ of rationality do seem to be popping up. The public realize “it’s the spending, stupid” and grasp the illusory nature of economic activity predicated on such “stimulus”-style debt-spending.

Smart Grid: The Biggest Rip-Off in Contemporary Energy Policy (Besides Ethanol)

by William Yeatman on November 2, 2010

in Blog

According to the AP, an administrative judge last week capped at $45 million the cost-overruns of Xcel’s “Smart Grid City” demonstration project in Boulder, Colorado. I haven’t been following this particular project, but I have been tracking similar cases in other cities, and I assure you, smart grid is the biggest rip-off in contemporary energy policy (after ethanol).

Ask anyone what a “smart grid” is, and you’ll get a different answer every time. In Boulder, it’s a fiber optical network. In Baltimore, it’s a “ZigBee” local area network. In Oklahoma City, it’s GE Smart Meters. They all were spawned of the stimulus, which showered more than $3 billion to utilities across the country to subsidize any boondoggle that called itself “smart grid.”

This is the sort of social policy that makes regulated utilities salivate. It’s ill-defined and capital intensive. Moreover, it promises to grow, like the blob. Today, it’s scores of millions of dollars of cost overruns in Boulder; tomorrow, it’s hundreds of millions of dollars in Denver.

And for what? Smart grid is a means to an end–namely, “demand side management.” The idea is to “manage” energy demand by, say, remotely adjusting thermostats in the homes of hundreds of thousands of utility customers , so as to draw down demand and avoid taxing the electricity grid. With smart grid technologies, your local utility can become your Big Brother.

There is, of course, a much easier way to “manage” demand: Price electricity what it costs.  Energy consumers would voluntarily reduce consumption during periods of high demand, because they would have an incentive (higher prices) to do so.

Unfortunately, local politicians have every incentive to maintain control over the price of electricity. After all, energy is the “master-resource,” so controlling its cost is a powerful political chip. Hence, the allure of “demand side management.” It affords local politicians control over the price of electricity AND control over demand. That way, they can avoid the inimical effects of price controls by controlling demand (that is, by controlling your thermostat). The losers, naturally, are the consumers, who must shoulder the added costs and inefficiencies inherent to a “managed” market.

Angela Logomasini On The Risk of BPA

by Marc Scribner on November 1, 2010

in Blog, videos

[youtube:http://www.youtube.com/watch?v=iGUlyLPSXAY 285 234]

Inside the Beltway

by Myron Ebell on November 1, 2010

in Blog

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.

Cooler Heads Digest 29 October 2010

by William Yeatman on October 29, 2010

in Blog, Cooler Heads Digest

In the News

Prop 23 and the Green Jobs Myth
T. J. Rodgers, Wall Street Journal, 29 October 2010

Prop 23 Puts Jobs before Wishful Thinking
Debra Saunders, San Francisco Chronicle, 29 October 2010

Prop 23 Is All about Saving the California Economy
Ben Boychuck, Planet Gore, 29 October 2010

Should States Step up on Climate?
Myron Ebell, Politico Energy Arena, 28 October 2010

Robust Economy Needs Affordable Energy
David Kreutzer, The Foundry, 28 October 2010

Schwarzenegger Is a Climate Cuckoo, Not A Climate Hawk
William Yeatman, GlobalWarming.org, 28 October 2010

Climategate: Did Jones Delete Emails?
Stephen McIntyre, Climate Audit, 27 October 2010

Daniel Greenberg Meets the Climate Scientists
Roger Pielke Jr, Roger Pielke Jr.’s Blog, 27 October 2010

More “Green Jobs” Success for Obama’s Models
Chris Horner, American Spectator, 26 October 2010

Can the Endangered Species Act Force De-Industrialization?
Marlo Lewis, MasterResource.org, 25 October 2010

The Green Crusade against Cars
Clifford Atiyeh, Boston Globe, 24 October 2010

News You Can Use

According to a new North American Electric Reliability Corporation report released this week, the United States could lose 7 percent of its electric capacity due to pending EPA regulations on coal-fired power plants. The shutdowns could threaten grid reliability in the northeast.

Inside the Beltway

Myron Ebell

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.

Across the States

California Releases Cap-and-Trade Energy Rationing Plan

The California Air Resources Board this afternoon released a cap-and-trade regulation. The release begins a public comment period culminating in a December 16 public hearing in Sacramento, California, at which the Board will consider adopting the proposed program. Click here for a two-page summary of the plan.

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.

Schwarzenegger Is a Climate Cuckoo, Not a Climate Hawk

by William Yeatman on October 28, 2010

in Blog

Last week, David Roberts at Grist coined the phrase “Climate Hawk,” to describe “people who understand climate change and support clean energy but do not share the rest of the ideological and sociocultural commitments that define environmentalism as historically understood in the U.S.”

Of course, a “hawk” in political jargon has long referred to policymakers who are bullish on the use of military might to advance American interests. The national security overtones are meant to impart a seriousness to global warming alarmists otherwise conflated with hippy-dippy granola environmentalists. According to Andrew Leonard at Salon, Roberts’s term is “a brilliant jiujitsu move of rhetorical framing.”

Roberts’s new meme was adopted quickly by the green journo beat. Today, for example, both Joe Romm (of Climate Progress) and Brad Johnson (at the Center for American Progress) refer to California Governor Arnold Schwarzenegger as a Climate Hawk in the wake of a recent interview he did with Diane Sawyer, in which he said,

“We need to go to Washington and say, “Look what happened. You, because oil companies have spent money against you, they have threatened you, you backed off the energy policy and the environmental policy in Washington.” What wimps. No guts. I mean, here, you idolize and always celebrate the great warriors, our soldiers, our men and women who go to Iraq and Afghanistan, and they’re risking their lives to defend this country, and you’re not even willing to stand up against the oil companies?”

Those are tough words, but are they appropriate? After all, Schwarzenegger hasn’t actually implemented any difficult climate policies. Indeed, AB 32, California’s Global Warming Solutions Act, doesn’t kick in until after the Governor leaves office. Moreover, Schwarzenegger in 2007 actually tried to delay early action climate policies under AB 32, in order to protect the construction industry, which had been a big donor to his 2006 reelection campaign. What “guts” has the Governator evinced?

Rather than “climate hawk,” a more appropriate bird metaphor for Arnold Schwarzenegger is “Climate Cuckoo.” The Cuckoo is a parasitic bird that lays its eggs in other nests, in order to be reared by other birds. That’s a pretty good parallel for what the California Governor is doing with respect to climate policy. He helped birth a climate law full of sacrifice that his successor will have to shoulder.

Man Bites Dog Pushes Car in ‘Green’ Hyundai Ad

by Marlo Lewis on October 28, 2010

in Blog

 

Hyundai has released a “green” (carbon-neutral) commercial to market itself as a “green” company. The production set includes rain collectors, solar panels, a tiny wind turbine, and electric generators hooked up to bicyclists (evidently, the solar panels and wind turbine just don’t provide enough juice).

The “greenest” feature, though, is that the car shown in the commercial doesn’t use any gasoline at all. Not one drop. A miracle? An all-electric vehicle?

Not even close. The car emits no greenhouse gases because nobody actually drives it on the set. Instead of the car moving people, people move the car. Literally. Three guys give it a shove to get it moving long enough (a few seconds) for the cameras to create the illusion of auto-mobility.

One of the glories of modern civilization is that it progressively substitutes machine labor for the muscular labor of human backs and limbs. The Hyundai ad implies that reversing this process, working our way back to a handicraft economy based on physical labor and low-density energy from wind, rain, and Sun, is the path of virtue.

Well, humanity has been there, done that. It’s called the Middle Ages. 

An exercise in post-modernist reflexivity, the Hyundai commercial is actually about the making of the commercial, rather than about the car shown in the commerical.  In fact, the vehicle is never mentioned by name, which is strangely fitting, since we never actually get to see it in operation. There is no way to tell from the commercial whether the car as an auto-mobile (a self-moving vehicle) is any good!

Even as an attempt to brand Hyundai as a green company, the ad is a flop. Yes, the film set is crunchy granola, but who says Hyundai had to build a set in the first place, transport a large tech crew to and from the set, buy or rent tons of equipment, and hire real actors? Hyundai could have avoided even more carbon emissions by making the commercial with a laptop and CGI software.

Alarmist PR Campaign Disguised as Art Exhibit in London

by William Yeatman on October 28, 2010

in Blog

Global warming alarmism long has marred energy politics; now, it is blemishing the art world.

According to a story in today’s Guardian,

Wind turbines lining the Mall; a shanty town at the foot of Nelson’s column; the Thames frozen under Tower Bridge; and a nuclear power station in Kew gardens. These are some of the artistic visions of a future London loosely inspired by the predictions of climate science.

The provocative images are part of the Museum of London’s London Futures show, a series of 14 photomotage pictures exploring how the capital might be affected by global warming.

This “art” is the work of Robert Graves and Didier Madoc-Jones, who work at London-based communications company GMJ. That is, it was created by a PR company, no doubt funded by deep-pocketed environmentalist organizations. Which begs the question: Why is the prestigious Museum of London presenting an alarmist PR-campaign as art?

My Subsidy Good, Your Subsidy Bad

by Marlo Lewis on October 27, 2010

in Blog

In discussions of trade and economic policy, China increasingly plays the role that Japan once did — simultaneously vilified and lionized as both threat and model.

In the 1980s, “trade hawks” warned that Japan would “hollow out” our economy unless we adopted Japanese-style industrial policy to counter Japan’s “unfair” trade practices. Today, “progressives” warn that China will “eat our lunch” in the “clean tech race” unless we aggressively subsidize domestic manufacturers of wind turbines, solar panels, and the like, to counter China’s clean-tech subsidies, which, we are told, constitute “unfair” trade practices.

If there is any consistency in these discussions, it is that subsidies are always either good or bad, fair or unfair, depending on whether they rig the market for “our” companies or “their” companies.

Oh yes, there is one other point of consistency — everybody agrees “clean tech” can’t compete without subsidies. This came out during a conference earlier in the week at the Center for Strategic and International Studies. Sun Guoshun, first secretary of the Chinese embassy in Washington, D.C., defended his government’s use of subsidies as necessary to having a clean-tech sector. 

As reported today in Climatewire (subscription required), Mr. Sun said: “It is the consensus of the international community that renewable energy is not in a position to compete with fossil fuel energy. So if you’re not going to subsidize renewable energy, there will be no renewable energy.”

Will EPA Regulators Leave America In The Dark?

by Ben Lieberman on October 27, 2010

in Blog, Features

Post image for Will EPA Regulators Leave America In The Dark?

There’s no doubt that federal regulations lead to economic harm, but could the wave of Obama regulations affecting electric power plants lead to electricity shortages as well? A new study from the North American Electric Reliability Corporation (NERC) finds reason for concern.

Resource Adequacy Impacts of Potential U.S. Environmental Regulations looks at four pending Environmental Protection Agency rules – the Cooling Tower Rule, the MACT Rule, the Clean Air Transport Rule, and the Coal Combustion Residuals Rule – that would impact coal-fired electric generating units. These power plants currently provide half of America’s electricity. It should be noted that there are several other proposed or recently finalized rules that also affect these units – including the EPA’s massive global warming regulatory agenda – that are not considered in this study. Nonetheless, NERC concludes that these four rules raise issues about electric reliability in the years ahead.

The study concedes considerable uncertainties regarding how strict the final version of these proposed rules will be as well as their ultimate compliance costs. For example, multiple rules with fairly urgent and overlapping timetables place great constraints on the existing supply of skilled labor and equipment needed to comply, while a more sequential rollout would be less onerous. In any event, NERC fears enough premature retirements of older coal-fired plants, along with significant downtime for units undergoing retrofits, to raise the possibility of reliability shortfalls.

This much is certain – the billions in compliance costs from EPA’s rules will boost electric bills. But whether there will be enough electricity to meet the nation’s growing demand while avoiding brownouts or blackouts is just one more piece of regulatory uncertainty to be piled onto the economy in the years ahead.

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