The Great Race

by William Yeatman on June 13, 2008

I have heard an awful lot of public discourse over the past few days about the irresponsibility of our Washington policymakers’ refusal to tap domestic sources of hydrocarbons. What seems to be gaining particular traction is objection to the lame defense that, well, the oil from ANWR wouldn’t be here for another seven to ten years anyway, so let’s not do it.

I have heard in response the rather sane assessment that it does seem rather likely that we are going to need it in seven to ten years, as well, and as such that accessing our own energy sources remains a good bet.

And there's the rub. The typically implicit and often express rationale underlying the “it’s not immediate” rationalization is that we should instead invest in alternatives of the future. First, taxpayers have been investing in alternatives to hydrocarbons to the tune of about $40 billion since the 1970s — and what have we gotten for all that appropriated money

More absurd is the larger argument that X resource won’t be here for seven to ten years so let’s invest instead in something else that will be here in, I don’t know, 14 to 20 years. If ever. Remember how the wind and solar industries tell us every year for the past three decades — since the subsidies started pouring in — that in a few years they’ll be cost competitive, that the technologies and economics will make sense in, oh, maybe a decade, but for now they must have subsidies and mandates? How has that worked out?

No one knows when the next miracle drug for any particular ailment will be here, but the fact that it isn’t immediate has never, ever been a reason not to go after it. (Yes, I am comparing tapping the most abundant affordable energy sources with life saving technologies; I believe you would too if you thought about it). 

So here’s the bet. Let’s go after both, and see which gets here first. ANWR oil, or the miracle fuels, commercialized and somewhat economically sensible hydrogen alternatives, cost-competitive wind and solar, cold fusion, cellulosic ethanol. You name the viable, commercial-scale alternative that you believe would be here to compete in seven to ten years on its merits with no more subsidy than hydrocarbons receive, and get it here first, and you were right.

If you bet on it with your own money, you will win, and win big. Name names. Tell me the technology you bet on that can win that race.

A financial analyst on Bloomberg TV stated that drilling for oil in the U.S. would increase our oil supply and also send a message to the oil cartel that the U.S. is serious about moving away from foreign oil. Both actions would lower the cost of oil.

Climate experts agree that the seriousness of manmade global warming depends greatly upon how clouds in the climate system respond to the small warming tendency from the extra carbon dioxide mankind produces.

A group of real estate developers and property owners in La Manga del Mar Menor – a spit of sandy, low-lying coastal land and Murcia's premier beach resort – are threatening to take Greenpeace to court over its graphic predictions of what global warming may do to the area, which they say have caused house prices to plummet.

Fuelish Democrats

by William Yeatman on June 12, 2008

in Blog

Republicans finally have a winning argument on a big issue, and they'd better make the most of it. It starts with high gasoline prices–the single most infuriating issue to voters these days–but doesn't end there.

WHAT IS a "reasonable" corporate profiit? Is it 8 percent, 16 percent, 25 percent? What profit is unreasonable? Don't know? The Democratic majority in Congress thinks it does. And that should scare everyone.

The other day in southwestern Fresno County, a poor part of Central California, I talked with a number of folks at a rural gas station. Most drove second- and third-hand pickups, large cast-off sedans or used SUVs. Their general complaint was twofold: They didn’t have the cash to buy a new fuel-efficient Honda or Toyota. And they were now spending a day or two of their wages just to fuel their cars for their long rural commutes.

Congratulations New Hampshire! Yesterday Governor John Lynch signed a bill that makes the Granite State the newest party to the Regional Greenhouse Gas Initiative (RGGI), a multi-state cap and trade climate change program in the Northeast.

New Hampshire’s commitment to RGGI is to decrease its emissions by 8 million tons. According to the Intergovernmental Panel on Climate Change, putatively the world’s foremost body of climate scientists, we would have to decrease emissions 38 gigatons (1 gigaton=1 billion tons) by 2050 to halt global warming.

So New Hampshire’s contribution will solve .0002% of global warming. Meanwhile, China busily builds three new coal fired power plants every two weeks.

 

Last month, the Democrat-controlled Senate was intent on “doing something” about the high price of fuel. Big oil execs were harangued for the sin of having benefited from high demand for gasoline, and President Bush was prevailed upon to stop stockpiling oil for the Strategic Petroleum Reserve, a move that analysts say will decrease the price of gas by a fraction of a cent.

Fresh off that major victory, in the first week of June, the Senate Democrat leadership tried to pass its “solution” to global warming—a cap and trade scheme that is designed to raise the price of gasoline so that consumers use less of it, thereby emitting fewer greenhouse gases. Economic forecasts predicted that the Congress’s cap and trade would have boosted the price of gas anywhere from 40 cents to 2 dollars. Thankfully, the bill was scuttled swiftly.

Now, Senate Democrats are back to bitching about the high price of gas. Yesterday, Senate Majority Leader Harry Reid (D-NV) tried to pass a “windfall profits tax” on those greedy oil companies. Considering that the Congressional Research Service found that a similar “windfall profits tax” enacted in 1980 increased America’s dependence on foreign oil, American voters should think themselves lucky that this misbegotten legislation failed.

What the heck are the Democrats that run Congress trying to do on energy policy? On the one hand, they bemoan the high price of gas. On the other, they sing the praises of a climate policy that is designed to raise the price of gas. How long will they get away with having their cake and eating it, too?

Ohh! The Germans…

by William Yeatman on June 11, 2008

I have often asserted a belief, in these pages and elsewhere, that the greatest impediment to adopting carbon dioxide cap-and-trade rationing in the U.S. is that, when it comes time to split up the loot, thieves notoriously fall out. 
That surely occurred with Lieberman-Warner, against which some of the corporate rent-seeking community’s cheeriest of rationing cheerleaders quickly turned. Although they previously howled that a scheme must be hurriedly adopted to save the planet – so long as it’s the one they crafted to profit from, it turns out – their fervor was cooled by the prospect of actually having to buy the ration coupons. Hey, that’s not what we meant at all! No agreement as to who profits, no agreement on a bill.

But no rent-seeker agreement on a bill also means, no bill. Face it, without the covering fire of “why, some of America’s leading corporations support this!”, Congress wouldn’t come near the prospect of saddling the public with an energy price hike and massive bureaucracy in the name of a warming that hasn’t been going on for a decade and when, we are now told even by alarmists scrambling to explain the impotence of their computer models, it might be yet another decade before the horrors of another degree or so reveal themselves.

So it was with a bit of amusement that I see today’s dire headline in Greenwire, “Time running out for industry-friendly bill — Boucher,” referencing House Chairman Rick Boucher (D-VA) who warned industry to get on board and agree to sell out. You need to enable us to do this to you. Or else. Apparently a new, more Democratic Congress will be gung-ho on adopting a Lieberman-Warner-type law as one of their first acts. Btw, this presumes the new Democrats will win by running as lefties, instead of the new, centrist and successful model of “Heath Shuler Democrats”.

But curiously, even on the heels of keening for six years that “we must act now!” and decrying hearings as an irresponsible waste of time, the House has shown no great interest in legislating this Congress, not without first strengthening its majority. [Also, one certainly wonders what in the world might an “industry friendly” bill might be; presumably that means some version that doesn’t make them buy all of the ration coupons, therefore doesn’t foreclose all of their windfall profit. Like Lieberman-Warner. How'd that one work out?].

With all due respect to the hand-wringers on K Street, whose job it seems to be to try and cough up half a loaf now so they won’t get blamed by the home office when Congress demands they agree to the whole loaf later (which will be demanded under any circumstance), but it is less than credible that Congress would throw their one constituency that isn’t the environmental pressure group industry overboard, in order to stick it to the economy, now of all times and as they seek to develop tenure-ensuring trust.

When reading Boucher’s threat, for some reason I can’t help but channel Mr. Burns. Ooh, the Germans are mad at me. I'm so scared! Oooh, the Germans! As I wrote here, cowboy up, people. It’s time to take a realistic stock of the situation, not tremble at silly threats, even if that which is threatened would be bad, were it plausible.