Free Markets, Free People
Funny … despite all the impediments the Obama administration has put on oil production on public land, the private sector – the market – has pushed us into a position we’ve never been in before in terms of output of oil and gas. We’ve passed the Saudi’s in output:
In spite of the Obama Administration’s hostility to carbon-rich energy, private actors with private capital deployed on private (and state) land have launched a game-changing revolution in domestic oil and natural gas production.
A scarcely reported milestone conveys the magnitude of this turnaround in the global energy landscape.
The U.S. passed Saudi Arabia as the world’s largest petroleum producer in November 2012, according to recently released data of the federal Energy Information Administration.
Now, imagine where we’d be if we didn’t have an obstructive administration bent on punishing those producers in that market via high taxation and regulation. Or slow-walking permits for drilling on public land. Or any of a myriad of other things this administration does to try to prevent oil and gas production. Well, other than taking credit for the rise in production when they had nothing to do with it.
Had they gotten out of the way, had they helped us take advantage of these new finds, Saudi Arabia would have been in our rear view mirror a long time ago and my guess is, gas wouldn’t cost what it does today.
Because government is so completely involved in our lives. A good example is the UK.
Winter weather has killed a million Brits since the 1980s and will kill a million more by 2050, experts have warned. Age support groups and doctors blame poor housing, high energy bills and pensioner poverty. Many killed by the cold are elderly but the ill, vulnerable and very young also die. A total of 973,000 people died due to winter weather from 1982/83 to 2011/12, Office of National Statistics data for England and Wales shows. ONS data shows another million Brits will be killed by winters by 2050, based on the average of 27,400 cold weather deaths per winter in the last five years.
The government, of course, is responsible for more of the problems listed than high energy bills but I wanted to highlight that and then turn to the irony part of this:
Migrating birds have halted Britain’s embryonic shale gas expansion in its tracks. The company backed by Lord Browne, the former BP boss, admitted yesterday that it must delay resuming fracking near Blackpool until next year because of rules protecting thousands of birds wintering in the surrounding picturesque Fylde peninsula.
Nice to know who or what has the priority over freezing Brits, no?
I’m sure that doesn’t surprise anyone particularly. A) it’s Obama and B) he’s a politician who has yet to quit campaigning (mostly because he hasn’t a clue how to govern).
What am I talking about? His attempt to claim responsibility for the fact that fossil fuel production is up under his watch and he’s somehow responsible for that.
Yes, it is, but that has absolutely nothing to do with him or his policies. The Congressional Research Service has apparently made that official now:
The Congressional Research Service has released a report finding that, as was already generally known, U.S. oil and gas production has increased substantially over the past four years, but on private lands only, while it’s actually declined on federal land.
Or said another way, where Obama had control and the opportunity to do what he is claiming, he declined that opportunity and in fact impeded further exploration and production with his policies. Where he had no real control, production boomed. Federal lands – nada. Private lands – bunches and bunches.
What has he sacrificed with his anti-fossil fuel polices? Revenue and jobs.
Again, you have to wonder anymore what it takes to be fired.
In the wake of sequestration, an opportunity to do the right thing for this country arises. Unfortunately, it arises within an administration ideologically, and therefore adamantly, opposed to the idea of more fossil fuel:
Today the State Department released yet another positive environmental review for the northern portion of the Keystone XL pipeline project. The State Department approved the original pipeline route through Nebraska, which was supposedly less environmentally friendly, without any problems.
It is no surprise, then, that the State Department also seems to look favorably on this second iteration of the project in this fourth report—a report that should have been unnecessary. For the record, the pipeline also received a stamp of approval from Nebraskans.
Yes, that’s right, the Obama State Department has given the Keystone XL pipeline favorable reviews before. It has been the executive, in this case, arbitrarily overruling the reports, inserting himself in a process he really has no business in and delaying the project.
IER senior VP Daniel Kish sums it up pretty well:
"This is, as President Obama says, ‘a teachable moment.’ It teaches us why our government’s policies continue to stifle job creation, investment and new energy sources and instead spends valuable time and increasingly limited resources studying things to death."While we welcome this report, we also note this is the 4th such environmental report on the Keystone XL pipeline proposal and since it is only a “draft” there will be at least 5 federal environmental studies before a decision is made by our government on the pipeline. The Canadian government made a decision in 6 months; our government has taken 54 months so far. This is an abject lesson in why – when it comes to energy – no one wants to deal with our government. This is evident also by continuing falling production on federal lands at the same time U.S. oil and gas production on non-federal lands makes historic gains. It is time for our Leaders to make a decision….Canada’s did a long time ago. Too many are hurting and too much is at stake for any more time or money to be wasted on trivial matters and long addressed and re-addressed chimeras advanced by opponents of any and all affordable sources energy."
The project will accommodate up to 830,000 barrels of oil per day, create some 179,000 jobs on American soil, and continue good trade relations with a close ally. The benefits won’t stop with the oil sector, though—the Keystone project will have a positive ripple effect even in areas without the pipeline that will provide goods and services to support the pipeline.
Before any real decision is made, there will be a 45-day comment period and some time for the State Department to consider the comments. Then the notably anti-carbon Secretary of State, John Kerry, will give his recommendation and the final decision will lie with the President.
“Going green” and “climate change” certainly are interlinked parts of a political agenda that have nothing to do with public opinion or will. In fact:
Seventeen years of continuous surveys covering countries around the world show that people not only do not care about climate change today – understandably prioritising economic misery – they also did not care about climate change even back when times were good. The new information comes in a study released by the National Opinion Research Center at the University of Chicago – a large, long-standing and respected non-profit. The NORC spokespersons said that decades of climate alarmism have had basically no effect on people’s attitude around the world.
Part of that has to do with the fact that they’ve heard it all before. Dire predictions about population growth that have come to naught. Warnings about using up the earth’s resources which have proven to be false. Ozone holes. Melting icecaps. Yatta, yatta.
Climate change is just the latest among the apocalyptic prophesies and as the real science – not Al Gore “science” – comes out, fewer and fewer people are staying on the bandwagon.
Of course the promise was a “green economy” in which everyone would benefit. How’s that worked out? Well we know how it has worked out in Spain. Germany is now finding out how mistaken they were to go in that direction. In fact:
Energy, manufacturing and agriculture are playing a major role in the corridor states’ revival. The resurgence of fossil fuel–based energy, notably shale oil and natural gas, is especially important. Cheap U.S. natural gas has some envisioning the Mississippi River between New Orleans and Baton Rouge as an “American Ruhr.” Much of this growth, notes Eric Smith, associate director of the Tulane Energy Institute, will be financed by German and other European firms that are reeling from electricity costs now three times higher than in places like Louisiana.
Interesting. It is another reason why they’re also putting manufacturing plants in the US, mostly in Red States. Skilled labor, right to work and cheap energy. Obviously neither the “right to work” nor cheap energy are part of any Obama administration design.
And how is it going for green jobs more locally? Well, the usual state can be consulted for an update on what such a move has wrought and demonstrate for all to see why “going green” is a foolish road to travel – at least in the near future.
It was supposed to be the next big thing. California built decades of broad-based prosperity from the Gold Rush, then Hollywood, then aerospace, and later Silicon Valley. At the turn of the century, “green jobs” were supposed to be the wave of the future. How is that going for them? According to the best numbers from the Bureau of Labor Statistics, fewer than 2,500 green jobs have been created in California since 2010.
Wow … bask in the success! Government again demonstrates how poorly it does picking winners and losers. Not that such failures ever hinder the central planners from using your dollars to try again. What’s Einstein’s definition of insanity?
Meanwhile, the “success” of green energy has brought California to a point where it will have to fish or cut bait very soon:
California is weighing how to avoid a looming electricity crisis that could be brought on by its growing reliance on wind and solar power. At Tuesday’s meeting, experts cautioned that the state could begin seeing problems with reliability as soon as 2015.
Of course, had we heeded the experience of others, we likely wouldn’t see California going through this nonsense:
The former chancellor Lord Lawson has urged the Government to keep Britain’s coal-fired power stations working for as long as was needed to avoid any short-term power shortages. In a House of Lords debate on energy policy and electricity generation Lord Lawson also called on ministers to give “every encouragement it can” to the quickest possible development of shale gas supplies. Lord Lawson urged energy and climate change minister Baroness Verma to assure the House that “if the need arises our coal-fired power stations will be kept open as long as is necessary, regardless of the European combustion plants directive”.
But our dauntless leaders never learn from others. Just as with healthcare, they seem bound and determined to recreate the failure of others.
We have abundant fossile fuel resources. They would generate both jobs and revenue for government. Wind and solar, while great in theory, have in practice been shown to be woefully inadequate to our needs. We even have communities wanting wind turbines taken down due to health concerns.
Yet our government and this administration continue to pursue an “energy policy” which is detrimental to the welfare of this nation despite a state that has done everything they want to do nationally and is a dismal failure because of it. They are bound and determined to make all 50 states Californias.
Because of their false agenda, that’s why. They’re still convinced that, despite 17 years of no warming (as recently admitted by the head of the IPCC), oil is bad and “green” is good and that they’re doing something to save the world. Disregard the fact that green is still unviable. Disregard the fact that everywhere it has or is being pushed, energy costs are skyrocketing. Nevermind the fact that we are sitting on a sea of fossile fuel products that we only need to access. Screw the fact that science can find no discernable warming. Their minds are made up.
That said, there’s also the fiscal side of the house. The debt. The deficit. And the demand by Democrats to raise more revenue.
Unfortunately, because of their agenda, they’re likely to completely screw up a golden opportunity to bring in much more revenue and drive energy prices down, because their agenda is against fossile fuel. And we all know the party agenda comes before what is best for the country.
Enter the administration with a renewed plan to tax oil companies instead of opening access to the vast natural riches we enjoy. The result? Well this chart will help you comprehend the vast differences in the two policy choices (full size here):
So the either/or is “tax ‘em or open access”. The difference:
According to a 2011 study by Wood Mackenzie, increased oil and natural gas activity underpro-access policies would generate an additional $800 billion in cumulative revenue for government by 2030. The chart puts into perspective the size of these accumulating revenues – enough to fund entire federal departments at various points along the timeline. By contrast, Wood Mackenize also found that hiking taxes on oil and natural gas companies would, by 2030, result in $223 billion in cumulative lost revenue to government.
It only proves the old saw -”If you want more of it, reward it and if you want less, tax it”. Think about it – money to help run government and pay down the debt (not to mention the thousands, if not millions of jobs created) being passed up in the name of false science and agenda politics.
Meanwhile, we’ll be left in the cold and the dark, thanks to agenda driven policies with no foundation in reality.
Electricity prices are rising in Germany – and citizen with a low-income are suffering particularly. They are at risk of fuel poverty. 10 to 15 percent of Germans are now struggling to pay their energy bills. 600,000 households have the electricity turned off every year.
Remember, Germany ran scared after the Fukushima disaster and dumped nuclear power (because, you know, German has so many earthquakes and tsunamis). They then went “green”. Result? See above?
The CEOs of manufacturing industries are warning that production in Germany is at risk because of low energy prices in the United States. The energy prices there are now only a third of those in Germany. “Many industrial companies are planning to build new factories in the U.S. and not in Europe because of low energy prices there,” said Gisbert Rühl, chief of steel trader Kloeckner. “We are now reacting to this development and plan new business units in the United States.” To move production to the U.S. is especially attractive for companies in energy-intensive industries such as steel and aluminium or chemistry.
That would seem to be good news for us, no?
Well, it should be … except for the Democrats plan to raise taxes on the oil companies. And Obama’s new wave of regulations. Oh, and the Obama desire to see fuel prices “skyrocket”, ably aided by his Secretaries of Energy and the Interior. And the EPA.
Or here’s what happens when you play the green card and drive up the cost of energy to the point that it is unaffordable:
When the mercury falls, the theft of wood in the country’s woodlands goes up as people turn to cheaper ways to heat their homes. With energy costs escalating, more Germans are turning to wood burning stoves for heat. That, though, has also led to a rise in tree theft in the country’s forests. The problem has been compounded this winter by rising energy costs. The Germany’s Renters Association estimates the heating costs will go up 22 percent this winter alone.
How much carbon is being emitted by wood burning stoves? How about the deforestation?
Gee, nukes don’t sound so bad now, do they?
You’d think, by now, governments would have figured out how poor they are at picking winners and losers.
Of course, they haven’t as witnessed by the witless California government continuing to push solar energy.
California’s Riverside County is producing more solar energy than anywhere in the U.S., with close to a dozen solar plants either online or proposed.
“On the face of it, it looks like a good deal. They talk about all these huge jobs and long-term benefits to the county. The truth is, it’s a very short term,” Riverside County Supervisor John Benoit said. “We’re going to be carrying the burden of having these types of facilities for decades to come, and because of the incentives that have been provided by federal and state government, there’s virtually nothing left for the county government or the local people to get benefit back after the small number of construction jobs are gone.”
Unlike Riverside’s 500 megawatt natural gas-fired facility, which pays $6 million a year in property taxes, a solar plant being built a few miles away will pay next to nothing, just $96,000. When Riverside balked at its own upfront infrastructure costs and tried to impose an impact fee, the industry sued.
So Riverside has hundreds of square miles carpeted with solar panels and no jobs to speak of and barely any revenue to show for it.
But surely, as promised, this has led to cheap, reliable and renewable energy, right?
Yeah, not so much:
Solar also promised to be a cheap source of power, fueled by the sun. What the industry didn’t say is the technology only converts a fraction of the sun’s energy, and the intermittent nature of sunshine does not produce the power promised.
And Stanford economist Frank Wolak, a California energy expert, said solar could boost consumer energy bills up to 50 percent, a finding similar to the state Public Utilities Commission. Solar power from two recently approved plants range from $100 to $200 per megawatt hour, at least 8 times higher than the $16 consumers pay for natural gas.
“It’s probably 50 percent more (than coal or natural gas) today,” Benoit said. “Five years ago, it was probably a 100 or 150 percent more costly to generate a kilowatt with solar. The cost of these panels has come down dramatically. But still, getting back to the old equation, do you want to spend a little bit more to be green? And the legislature and the governor in California have said clearly, we’re going to do that.”
But at what cost to consumers and to what benefit to much of anything except government’s chosen crony, er, beneficiary? Instead of allowing markets – i.e. consumers and producers – to decide on the mix, government has unilaterally taken that away from them and made the decision itself.
After all, the autocrat has decided:
Answering critics at a solar ribbon-cutting earlier this year, Gov. Jerry Brown laid down the gauntlet, affirming his commitment to solar energy and saying he would “crush” opponents of solar.
“There are going to be screw-ups. There are going to be bankruptcies. There’ll be indictments and there’ll be deaths. But we’re going to keep going – and nothing’s going to stop me,” Brown said.
I can believe that. Somebody needs to tell Brown the whole effort is a ‘screw-up’.
But since government is involved, the crony gets the treatment other industries don’t:
“There’s been a policy to fast-track and install these utility-scale renewable energy installations that are on the scale of five to 10,000 acres each,” said April Sall of the Wildlands Conservancy. “We’ve seen thousands of acres of the desert bladed and now undergoing utility-style construction to basically convert that from pristine habitat that included those sensitive plants and animals, to becoming potentially a dust bowl.”
Now imagine if these actions and plans were those of “Big Oil”. Yup, you don’t have to imagine long, do you? But in this case?
The two largest green groups in the U.S., the Sierra Club and Natural Resources Defense Council, have remained silent on the impact of Big Solar on land use and endangered species, which is not so with gas, oil or coal. Sall and other local environmental groups say the Washington-based organizations see climate change as a bigger threat and therefore won’t get involved.
Shoddy “science” is their excuse and they’re sticking with it.
And that’s your update on the imperial blue state model today. And yes, it’s going down the tubes which is why this cartoon applies to more than small business in the state:
Peter Foster at the Financial Post sums up the Doha “climate change” conference best:
The UN climate conferences have descended into ritual farce, as naked money-grabbing on behalf of poor countries contrasts with finagling impossible solutions to what is likely a much-exaggerated problem. One leading question is how dubious science, shoddy economics and tried-and-failed socialist policies have come to dominate the democratic process in so many countries for so long. The answer appears to be the skill with which a radical minority — centred in and promoted by the UN, and funded by national governments and, even more bizarrely, corporations — has skilfully manipulated the political process at every level.
A fairly succinct and accurate summary of the ongoing effort.
Walter Russel Mead also has a take on it with which I agree:
Climate negotiators at the most recent conference on global warming were unable to reduce expectations fast enough to match the collapse of their agenda. The only real winners here were the bureaucrats in the diplomacy industry for whom endless rounds of carbon spewing conferences with no agreement year after year mean jobs, jobs, jobs. The inexorable decline of the climate movement from its Pickett’s Charge at the Copenhagen summit continues. The global green lobby is more flummoxed than ever. These people and these methods couldn’t make a ham sandwich, much less save Planet Earth.
And, while I agree that is so, the UN, these conferences, 3rd world nations and the so-called “green agenda” continue attempts to exert control over advanced countries and extort a chunk of their GDP as “compensation” for what no one is sure. There desires in this regard have never been more obvious than in their questionable opposition to the boom in natural gas (something, one could argue, that would be helpful to developing 3rd world countries while satisfying the “green agenda”).
It’s green, it’s cheap and it’s plentiful! So why are opponents of shale gas making such a fuss? If it were not so serious there would be something ludicrous about the reaction of the green lobby to the discovery of big shale gas reserves in this country. Here we are in the fifth year of a downturn. We have pensioners battling fuel poverty. We have energy firms jacking up their prices. We have real worries about security of energy supply – a new building like the Shard needs four times as much juice as the entire town of Colchester. In their mad denunciations of fracking, the Greens and the eco-warriors betray the mindset of people who cannot bear a piece of unadulterated good news.
Obviously, it would be even harder to sell their extortion attempts if advanced countries are able to develop a source of energy that is indeed “green, cheap and plentiful”. And, apparently, even they realize they’re not going to get too far attempting to demonize natural gas per se. So they’ve instead focused on the process used to extract it (hydraulic fracturing – “fracking”) and are in the usual mode of demonizing it instead. That, despite the fact that the process has been used in the US, at least, since 1948 on over 1,000,000 wells without negative results to ground water (the supposed threat that fracking poses). But as we’ve all learned, facts are not the currency this group uses.
The point? This circus will continue for the foreseeable future because the majority of the UN sees an extortion opportunity that is just too good to pass up. Their initial success in scaring the world with “shoddy science” continues to motivate their efforts. They haven’t quite accepted that it is failing.
Of course, real science has never really been a part of this process. All they needed was a veneer to successfully launch the project. Al Gore and “consensus” provided that. The assembled then declared the “science” to be “settled” (Science never attains consensus and is never “settled”). After that, the participants in this extortion attempt have simply stated that further review is essentially unneeded. The argument is over, just STFU and accept it. Meanwhile that “science” continues to come apart at the seams as real data is collected and demonstrates the underlying climate “science’s” shortcomings and outright falsehoods.
Natural gas provides a new alarming problem for these folks. When it was thought to be a fairly scarce resource, enviros embraced it (the Sierra Club touted it for years before turning against it when it became plentiful and cheap). Now that it threatens to undermine their entire culture of extortion and control, they’re rabidly against it – or at least what it requires to extract it.
One can only hope that the failure in Doha signals the end game of this farce, but that’s doubtful. No dissenting word is allowed. As Lord Monckton learned when he tried to bring up the fact that there has been no warming for the past 16 years and was summarily ejected for doing so. This is no longer about science. This is no longer about an imminent threat. It’s about extortion, plain and simple. And anyone with the least bit of honesty will recognize that and should join in the call to end this farce for good.