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Post image for Bipartisan Senate Majority Votes To Oppose a Carbon Tax

Senate Majority Leader Harry Reid (D-Nev.) seldom lets Senators vote on amendments to bills, but last week he agreed to a “vote-a-rama” on the budget bill.  Hundreds of amendments on all sorts of issues were offered and many of them are being voted on.  Senator Roy Blunt (R-Mo.) offered an amendment (#261) to put the Senate on record against any tax or fees on carbon dioxide emissions.  The Senate voted on this anti-carbon tax amendment on Friday, 22nd March.  Fifty-three Senators voted in favor, with 46 opposed. Sixty votes were required for passage under Senate rules.

All the no votes were from Democratic members.  The 45 Republican Senators were joined by eight Democrats in voting for Blunt’s amendment.  The Democrats were: Max Baucus of Montana, Joe Donnelly of Indiana, Heidi Heitkamp of North Dakota, Mary Landrieu of Louisiana, Joe Manchin of West Virginia, Claire McCaskill of Missouri, Mark Pryor of Arkansas, and Jay Rockefeller of West Virginia.

Post image for False Alarms: Dow Chemical’s Campaign against Natural Gas Exports

Last week on this blog, I explained how Dow Chemical’s chief rationale for restricting exports of liquefied natural gas (LNG) — the claim that gas used as a feed stock in domestic manufacturing adds more value to the economy than gas exported overseas — would also justify:

  • Curbing Dow’s exports of chemicals, plastics, and electronic components to help domestic manufacturers of paints, cosmetics, pharmaceuticals, cell phones, laptops, and other finished goods become more competitive in the global marketplace.
  • Empowering bureaucratic agencies to commandeer private property whenever they think the resource would add more value in the hands of some other firm or industry.

Dow CEO Andrew Liveris would no doubt cry bloody murder if Congress proposed to give Dow a dose of its own medicine and restrict the company’s exports in the “public interest.” Presumably, Mr. Liveris would also disavow any sympathy for confiscatory centralized economic planning, although that is in effect what he is advocating.

Other rationales Dow and its allies invoke to oppose “unfettered” gas exports include:

  1. “Unlimited” gas exports could dramatically reduce the domestic supply of the natural gas liquids (NGLs) on which manufacturers depend as key feed stocks.
  2. Long-term contracts to export liquefied natural gas (LNG) will “lock in” deliveries to foreign buyers, subjecting U.S. manufacturers to high risks of price shocks and supply disruptions.
  3. Approving all LNG export applications that have been submitted to the Department of Energy (DOE) could result in “half” of all U.S. gas produced being burned for the Btus in overseas power plants, pushing U.S. gas prices to Asian levels.

These are all false alarms. Let’s take them one at a time. [click to continue…]

Earth Hour Harms the Earth

by Hans Bader on March 20, 2013

in Blog

Earth Hour wastes energy and harms the planet.  Bjørn Lomborg, a Danish academic and environmental writer, recently lambasted Earth Hour, the annual tradition of turning off the lights, which falls on March 23:

In fact, Earth Hour will cause emissions to increase. As the United Kingdom’s National Grid operators have found, a small decline in electricity consumption does not translate into less energy being pumped into the grid, and therefore will not reduce emissions. Moreover, during Earth Hour, any significant drop in electricity demand will entail a reduction in CO2 emissions during the hour, but it will be offset by the surge from firing up coal or gas stations to restore electricity supplies afterwards.

And the cozy candles that many participants will light, which seem so natural and environmentally friendly, are still fossil fuels – and almost 100 times less efficient than incandescent light bulbs. Using one candle for each switched-off bulb cancels out even the theoretical CO2 reduction; using two candles means that you emit more CO2.

To some self-styled environmentalists and bureaucrats, symbolism is more important than reality.  The Environmental Protection Agency clings to ethanol mandates, imposing them despite growing evidence that they increase world hunger and mortality, and harm the environment.  As the Wall Street Journal noted, in October 2011,

the Competitive Enterprise Institute and Action Aid petitioned the EPA to review the so-called renewable fuel standard that mandates that 13.8 billion gallons of corn ethanol be blended into the gasoline supply next year. The free-market think tank and global hunger charity argued that the EPA’s technical regulations implementing the mandate did not meet “basic standards of quality” [since] EPA failed to consider multiple peer-reviewed studies documenting the link between ethanol and world hunger in its public health literature review, as required by law. That includes one paper that concludes that biofuel mandates are responsible for at least 192,000 premature deaths every year. Overall more people die from chronic hunger world-wide than malaria, tuberculosis and AIDS combined.

EPA disregarded this evidence, and denied the petition after a fourteenth-month delay.  (A request for reconsideration has been filed).

In 2008, a Washington Post editorial by two prominent environmentalists described how ethanol mandates have harmed the environment and spawned hunger across the world.   In “Ethanol’s Failed Promise,” Lester Pearson and Jonathan Lewis observed that “Turning one-fourth of our corn into fuel is affecting global food prices. U.S. food prices are rising at twice the rate of inflation, hitting the pocketbooks of lower-income Americans and people living on fixed incomes.  .  .Deadly food riots have broken out in dozens of nations in the past few months, most recently in Haiti and Egypt. World Bank President Robert Zoellick warns of a global food emergency.” [click to continue…]

Post image for Second Order Mission Creep: U.S. Military Gets into Investment Banking To Advance Green Energy

Last week, the Wall Street Journal reported that the U.S. military is exploring how to bundle renewable energy contracts into securities (à la subprime mortgages), in order to better leverage taxpayer dollars to pay for more green energy.

Is anyone else discomfited by this second order mission creep? The military is supposed to be fighting wars. Now, it’s getting into complex, risky investment banking. So that it can generate more green energy.

Surely General Patton is rolling in his grave.

Post image for Obama Administration Casts a Shadow on Sunshine Week

The newspaper industry has named this week Sunshine Week to focus attention on the importance of open government and public access to information.  The Obama Administration has gotten into the spirit of Sunshine Week with daily posts on the White House blog and the Department of Justice blog, which talk about the importance of transparency and trumpet the Administration’s achievements.  President Obama after all promised in the 2008 presidential campaign that his administration would be the most transparent in history.

It hasn’t quite worked out that way.  For example, CEI’s Chris Horner has filed multiple ongoing lawsuits to try to force the Administration to comply with Freedom of Information Act requests.  The Republican minority staff of the Senate Environment and Public Works Committee have been having fun with daily posts that chronicle example after example of Obama Administration stonewalling and failures to comply with federal open government laws.

But it’s no longer just a partisan complaint.  Glenn Greenwald published a column in London’s Guardian this week headlined, “Obama’s secrecy fixation causing Sunshine Week implosion.”  The sub-headline reads, “Even the most loyal establishment Democrats are now harshly denouncing the president for his war on transparency.”

Post image for On Fracking, NY Gov. Spurns the Experts

The Associated Press last week reported that New York Governor Andrew Cuomo was set to partially lift a statewide moratorium on hydraulic fracturing, a gas drilling technology also known as fracking, but he was persuaded to hold off on doing so by his former brother-in-law Robert Kennedy, Jr., a famous environmentalist. According to the AP, Kennedy impressed on Gov. Cuomo the “health problems” associated with fracking. Contrary to what Kennedy told the Governor, there are no such “health problems.” The truth is that environmentalist agitators like Kennedy and documentarian Josh Fox don’t have any evidence to back up their claims. If I was an upstate New Yorker whose property lay above the Marcellus Shale, a gas rich geological formation underneath much of the State, I’d question why my Governor is listening to his former brother-in-law, instead of the New York state geologist, Dr. Taury Smith, a fracking supporter who dismisses environmentalist alarmism about the drilling technique as being the “worst kind of spin.”

Post image for House Republicans Introduce Anti-Carbon Tax Resolution

Representatives Steve Scalise (R-La.), Joe Barton (R-Tex.), and 103 other original co-sponsors introduced a resolution expressing the sense of Congress that a tax on carbon dioxide emissions would harm the U. S. economy.    Scalise is chairman of the conservative Republican Study Committee and Barton is former chairman of the Energy and Commerce Committee.  H. Con. Res. 24 would not forbid the House from passing a carbon tax bill in the future simply because Congress cannot bind itself in that way.

The purpose of the resolution rather is to build congressional and public opposition to a carbon tax.  Some observers have said this is unnecessary because neither the House nor the Senate would vote for a big new tax on energy use.  That is true.  Moreover, the White House has said repeatedly that they have not and will not propose a carbon tax.  That is also true.  However, the White House’s denials are carefully worded not to rule out supporting a carbon tax proposal that was part of a comprehensive and bipartisan budget or tax reform deal.  The White House really wants Republicans to propose a carbon tax.

The attraction for including a carbon tax in any big budget or tax deal is considerable for the big spenders in Congress because it’s the only thing on the table that would raise a lot of new revenue.  A tax of twenty dollars per ton of carbon dioxide emitted would raise over $100 billion in its first year.  By burying it in a package, no Member of Congress would have to take an up or down vote on a stand-alone carbon tax and could still protest in public that he was against the carbon tax but had to accept it in order to pass the whole package.  A further problem is that these big budget and tax deals are negotiated in secret by House and Senate leaders, chairmen and senior members of the relevant committees, and the White House.

As it happens, the day before Scalise and Barton introduced their resolution, Representative Henry Waxman (D-Beverly Hills) released a discussion draft of “carbon-pricing” legislation. “Putting a price on carbon could help solve two of the nation’s biggest challenges at once:  preventing climate change and reducing the budget deficit,” Waxman said in a press release.

Post image for A Modest Proposal on Exports: Give Dow Chemical a Dose of its own Medicine

Dow Chemical CEO Andrew Liveris has been making waves of late with congressional testimony and a Wall Street Journal oped advocating restrictions on U.S. exports of liquefied natural gas (LNG).

To oppose “unfettered,” “unlimited,” or “unchecked” LNG exports — in other words, to fetter, limit, and check the freedom of gas producers to sell their own products — Dow formed a business group called America’s Energy Advantage (AEA). Other members include Alcoa, Eastman, Huntsman, and Nucor.

AEA’s rationale for restricting gas exports (to quote Liveris’s oral testimony) is that when gas is not exported but instead is used to manufacture products, it creates “eight times the value” across the entire economy. That claim derives from a Charles River Associates (CRA) study sponsored by — drum roll, please — Dow. According to CRA, using gas as a manufacturing input trounces gas exports in terms of job creation, GDP growth, and trade-deficit reduction. Therefore, AEA argues, Congress and/or the Department of Energy (DOE) should constrain LNG exports in the “public interest.” AEA also warns that higher gas prices from increased overseas demand could destroy tens of thousands of manufacturing jobs and kill the U.S. manufacturing renaissance. AEA claims it is not opposed to all LNG exports, it just wants a “balanced” approach.

Economist Craig Pirrong (a.k.a. the “Streetwise Professor“) deftly pops this rhetorical balloon:

I am adding a new entry to my list of phrases that put me on guard that someone is trying to con me: “balanced approach.”. . . . In Obamaland, “balanced approaches” mean large tax increases now, and hazy promises of spending cuts in some distant future. In Liveris’s oped, “balanced” means imposing restrictions on exports of natural gas to lower the cost of his most important input. Funny, ain’t it, that things seem to tip the way of those advocating “balanced approaches”? In other words, if it helps me, it’s fair and balanced!

The whole thing is galling. Even if Liveris were correct and gas turned into chemicals generates “eight times” the economic value of gas sold abroad, such third-party assessments should have no bearing on how companies dispose of their own property. As American Enterprise Institute scholar Mark Perry points out, AEA companies did not invest a dime to develop fracking and horizontal drilling technology, construct the wells, or hire the rig workers, yet they presume to decide what happens to the gas after it’s extracted from miles under the Earth. Not unlike the Supreme Court’s Kelo decision, AEA’s implicit premise is that central planners have the right, nay the duty, to commandeer private property whenever the resource would add more value in someone else’s hands.

But do Liveris and AEA really believe the rationale they’re pushing, or only when it cuts in their favor? Here’s an easy way to tell. Dow, Alcoa, Eastman, Huntsman, and Nucor primarily manufacture intermediate goods, not final goods. As natural gas is an input to them, so their products are inputs to still other companies. AEA-produced chemicals, plastics, electronic components, aluminum, and steel reach the consumer only after other manufacturers “add value” by turning those “feed stocks” into paints, cosmetics, fertilizers, pharmaceuticals, computers, cell phones, automobiles, and so on.

So by AEA’s logic, the government should restrict exports of chemicals, aluminum, and steel to hold down domestic prices and make U.S. manufacturers of final goods more competitive. The “public interest” demands it! I’ll bet my salary against Liveris’s that he will never, ever agree that sauce for the goose should also be sauce for the gander. [click to continue…]

Back in 2007, EPA issued a regulation known as the Renewable Fuel Standard (RFS), requiring billions of gallons of corn ethanol to be blended into the U.S. gasoline supply. This mandate is a continuation of the U.S. biofuel policy, and has been celebrated by environmentalists and GW alarmists as a way of reducing greenhouse gases and lowering our dependence on supposedly dangerous foreign oil.

In October of 2011, the Competitive Enterprise Institute and ActionAid USA petitioned EPA to review its position on the impact of its RFS mandates on world hunger. Since a large portion of available farmland is being used to grow corn for ethanol instead of for food, this lowers the food supplies drastically and in turn drives up prices. Our petition was based on the Data Quality Act, which enables anyone to seek correction of data that has been disseminated by a federal agency. The request argued that the information in EPA’s regulatory analysis and on the agency’s website incorrectly downplayed the impacts of the U.S. mandates on world hunger. To support this claim, CEI and ActionAid cited several studies showing that higher food prices from biofuel mandates have caused malnutrition in developing countries, resulting in nearly 192,000 excess deaths annually.

Not being in much of a hurry to examine if whether it might be partly responsible for such carnage, EPA exceeded its 90-day response deadline-three times. Fourteen months would pass before they finally, in December of 2012, denied the petition.

This delay is particularly ironic since the Obama administration and EPA frequently have complained about the slow pace of Congress, issuing executive orders and fuel economy regulations with the slogan “We Can’t Wait.” Apparently, when it comes to assessing whether their policies are killing people, they can.

EPA claimed that assessing deaths due to biofuel programs was beyond the scope of its analysis, which apparently only focused on the incremental effects of the U.S. biofuel mandate. CEI and ActionAid USA filed a request for reconsideration on March 11, providing new evidence of the policy’s devastating effects on food prices and global hunger. A copy of the request is appended to the end of this post. Given EPA’s alleged “global leadership” role and the fact that people in developing countries spend up to 80 percent of their income on food, the new request shows that the U.S. mandate alone has far-reaching negative implications that EPA should address.

The request was fittingly filed during the Government in the Sunshine Week, a national initiative to promote the importance of open government. However, given EPA’s notorious lack of transparency on other matters, we wonder what effect our request will have on the agency whose motto is “protecting people and the environment.” We have an in-house joke that EPA ought to take that slogan and insert the phrase “but not in that order” to the end of it.

CEI and Action Aid – March 2013 Data Quality Reconsideration Request by Competitive Enterprise Institute

Post image for Maryland’s Off-Shore Wind Farm Would Be More Dangerous Than You Think

With the Maryland’s Senate passing the Maryland Offshore Wind Energy Act of 2013, it looks as if the U.S. is likely to build its first off-shore wind farm east of the Ocean City. The initiative has been widely endorsed by environmentalist groups, such as the Coalition for Wind Works for Maryland. As the coalition states on its website:

“Bringing offshore wind power to Maryland will effectively stabilize electricity rates, create jobs, reduce pollution, and provide us with a local source of clean, renewable energy.”

According to current plans, any offshore windfarm built pursuant to the legislation would be approximately 10 nautical miles (11.5 miles) from the Atlantic coast and produce 200 megawatts – supposedly providing about 1 percent of the state’s electric needs.

As we’ve frequently pointed out, wind power plants are inefficient, costly and in need of heavy subsidization. But the cost may not only be measured in dollars–reports show that the turbines are in fact quite dangerous as well. For instance, two windmill accidents have been reported in Sweden in the few weeks alone.  In February, a blade fell down while a turbine was being repaired, crushing a parked car. This past Sunday, a windmill spun out of control after a safety mechanism failed, forcing the nearby residents to evacuate for 24 hours until two blades finally came off in the strong winds.

And not every accident leaves people unscathed. Last December, a German crane operator was killed when a blade fell on his cab during the installation of a windmill. A survey performed by RenewableUK, a wind power trade association, estimated that 1,500 accidents had occurred between 2006 and 2011 in the UK alone, including 300 injuries and 4 deaths. Focusing on wind farms, the Health and Safety Executive’s figures showed three fatal accidents between 2007 and 2010 and a total of 53 major or dangerous incidents during the same time frame.

[click to continue…]