Free Markets, Free People

Energy

Things to think about on a beautiful Sunday

So, after jamming the health care reform legislation through Congress, Democrats begin to turn a wary eye toward November and the mid-term elections.

A good portion of them have deluded themselves into thinking Bill Clinton was right – that after they passed the legislation all the furor would subside and Americans would accept the new legislation – even embrace it.   The term “Judas goat” comes to mind.  And I think for those who bought into that nonsense, they realize they’ve certainly been led into the electoral slaughter pen. The Obama post law-signing sales tour has been anything but successful in changing the public’s perception of the law.  And it certainly hasn’t cooled the anger about its passage.

Some Democrats are giving up to “spend more time with their families” as has Bart Stupak.  They see the writing on the wall and don’t like what they’re reading.  Others are gearing up for a fight that many experts are sure they’ll lose.   Of course there are those on the left who’re sure the tide will turn.  James Carvelle recently said the GOP “peaked too soon”.  I don’t think so.

However, what are the Democrats going to do to reverse this trend that sees them losing big in November.  Well, the word was they were going to do energy next.   And that energy would contain a utility tax being called “cap-and trade lite”.  Frankly I don’t see them trying to introduce any new tax before November unless they’re just a lot less intelligent than they should be.

But they have to do something to take the public’s mind of HCR and do something positive for their chances in November.  I was thinking about that when this headline caught my attention – “Hispanic loyalty to Democrats wanes” with the sub – “Inaction on immigration reform has key voting bloc less enthused about election.” Ah ha! Why is this potentially the issue that will be most important to Dems prior to November – because of the nature of the election.

“The number of Latinos who say they are enthusiastic about midterm elections is the lowest we’ve ever seen,” said Barreto, whose firm polls extensively among Hispanics. In 2006, 77 percent of Hispanics were excited about voting. In a recent poll, however, just 49 percent were excited.

As Barreto noted, midterm elections usually feature lower turnout, which means victory hinges on energizing the party’s core supporters rather than persuading swing voters.

So Barreto is asserting that Hispanics are inclined to vote Democratic and unlike the 2006 mid-terms, have much less interest in voting in this mid-term because, well, see the headline.

Conclusion – look for a flurry of activity addressing “comprehensive immigration reform” in an attempt to energize the hispanic vote prior to November and, I’d guess, try to lure some independents back as well. Whether they get anything done or not is probably not as important right now, in the short time span involved, than appearing to make the effort. Whether that will be enough to save them remains to be seen.

But if it doesn’t – then what? What would a lame duck Democratic majority Congress attempt from November to January. My guess, and that’s all it is, with nothing to lose, they’d go for broke and try to ram as much of their agenda through as possible. And that means they’ll be working on a comprehensive energy bill, to include cap-and-tax, and possibly a VAT tax, and be prepared to introduce them the day following the mid-terms. Success might not be easy, but if Nancy Pelosi knows she’s losing her speakership and Harry Reid finds himself out of a job – anything is possible.

~McQ

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Pimping solar power

There’s no question that alternative and renewable fuels and energy sources are the way to go – if they’re feasible.  Solar, wind, geo-thermal and others all promise clean and renewable energy for our future.  But one of the more irritating things concerning some of those energy sources are the claims that they’re technologically ready for prime time.  Geo-thermal being the exception (but a very minor source), wind and solar aren’t at all where they need to be to provide for the energy needs of the world.  That doesn’t stop the usual suspects from implying they are.

One of the recent stories that helped blunt those sorts of assertions was that of Spain’s attempt to go green.  The result was a loss of jobs and heavy subsidies for the solar power industry.  Well apparently it is time to resurrect Spain and the solar industry and the New York Times obliges:

Although Spain’s long-term goal had been to produce 400 megawatts of electricity from solar panels by 2010, it reached that milestone by the end of 2007.

In 2008 the nation connected 2.5 gigawatts of solar power into its grid, more than quintupling its previous capacity and making it second to Germany, the world leader. But many of the hastily opened plants offered no hope of being cost-competitive with conventional power, being poorly designed or located where sunshine was inadequate, for example.

That’s wonderful, but in 2009, Spain’s power demand declined by 4.3% to 251,305 GWh.  So while solar is a least contributing, it’s not contributing much. And there are still serious and obvious problems with solar power. The example used comes from Florida:

Across 500 acres north of West Palm Beach, the FPL Group utility is assembling a life-size Erector Set of 190,000 shimmering mirrors and thousands of steel pylons that stretch as far as the eye can see. When it is completed by the end of the year, this vast project will be the world’s second-largest solar plant.

But that is not its real novelty. The solar array is being grafted onto the back of the nation’s largest fossil-fuel power plant, fired by natural gas. It is an experiment in whether conventional power generation can be married with renewable power in a way that lowers costs and spares the environment.

The fact that they’re experimenting with solar is a good thing. It needs a lot of that. However the fact that this covers 500 acres of land is notable. 500 acres. It is the world’s 2nd largest solar array. And its contribution? At its peak, it will produce 75 megawatts of power. That’s about enough to power 11,000 homes.

Sitting right next too it is a natural gas fired power plant. In fact, that’s the plant on which these panels are grafted. It covers far fewer acres than does the solar array and it produces 3,800 MW of power – enough to power 557,333 homes.

The difference couldn’t be more obvious. Solar is much too inefficient in terms of power provided/land use to be practical as a stand alone source. To produce the same power the gas fired plant does would require an array that covers over 25,000 acres.

And there are other drawbacks as well.

This project is among a handful of innovative hybrid designs meant to use the sun’s power as an adjunct to coal or gas in producing electricity. While other solar projects already use small gas-fired turbines to provide backup power for cloudy days or at night, this is the first time that a conventional plant is being retrofitted with the latest solar technology on such an industrial scale.

The project’s advantages are obvious: electricity generated from the sun will allow FPL to cut natural gas use and reduce carbon dioxide emissions. It will provide extra power when it is most needed: when the summer sun is shining, Floridians are cranking up their air-conditioning and electricity demand is at its highest.

The plant also serves as a real-life test on how to reduce the cost of solar power, which remains much more expensive than most other forms of electrical generation. FPL Group, the parent company of Florida Power and Light, expects to cut costs by about 20 percent compared with a stand-alone solar facility, since it does not have to build a new steam turbine or new high-power transmission lines.

“We’d love to tell you that solar power is as economic as fossil fuels, but the reality is that it is not,” Lewis Hay III, FPL’s chairman and chief executive, said on a recent tour of the plant. “We have got to figure out ways to get costs down. As we saw with wind power, a lot has to do with scale.”

In other words, solar has a place as an add on, an adjunct, a gap filler for peak times (if it is sunny), but as a stand alone, the technology is not ready for prime time. As noted most stand-alone solar arrays have small gas-fired turbines to provide backup for cloudy days an night. And those backups are used – a lot.

It also requires heavy government subsidy since the cost of producing solar power is so high (inefficiency due to technology and its limitations on cloudy days and obviously, at night).

The whole point of this is to get real about the alternatives and understand that while everyone would love to see them come into their own as dependable sources of energy that can replace dirtier sources, the technology doesn’t yet exist. Until it does, I’m not at all ready to trade the eye-pollution of acres and acres of solar panels for a few megawatts of power – not when we’re the largest producer of natural gas (the cleanest burning fossil fuel we have) in the world.

When solar is ready (and that means dependable and steady power on the minimum of land) I’m ready to see it deployed. But until then, if it’s going to be pimped, it would be nice if those pimping it would include the good, the bad and the ugly when they talk about it. Of course if they did that, it wouldn’t be pimping, would it?

~McQ

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$7 gas in our near future?

While Senators Graham, Kerry and Lieberman scramble around telling you how bright the energy future will be if they are able to pass their carbon tax bill, here’s a sober reminder of what it will actually bring to working Americans:

To meet the Obama administration’s targets for cutting greenhouse gas emissions, some researchers say, Americans may have to experience a sobering reality: gas at $7 a gallon.

To reduce carbon dioxide emissions in the transportation sector 14 percent from 2005 levels by 2020, the cost of driving must simply increase, according to a forthcoming report by researchers at Harvard’s Belfer Center for Science and International Affairs.

Not might increase. Must. Those targets are 10 years in the future. So “must” has to begin to take effect pretty soon if they’re to be met, wouldn’t you say?

As for that promise that 95% of Americans won’t see their taxes increased by a dime? Well, Obama’s agnostic about that now.

Take a good look at the figure and try to visualize the impact on your family’s budget. Also remember the transportation sector uses 70% of carbon based fuels. So not only is gas going to cost you about $4.50 more a gallon in taxes, every single necessity and consumer good you purchase will cost you more as well. Factor that in as well. Now try to imagine the impact on a struggling economy.

There are different ways to skin the taxation cat – and income taxes are only one of them. Of course it really doesn’t matter to you how they do it, the result remains the same: less money for you to use on your priorities and needs.

~McQ

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Zombie Cap-and-Trade coming to a utility bill near you soon

Senator’s Lindsey Graham, John Kerry and Joe Lieberman have bought the premise that “carbon = bad”.  But being politicians, looking at the economy and understanding the discontent of the voters with both health care reform and cap-and-trade, they’ve decided on a more incremental approach to implementing the latter.

First, they announce that “cap-and-trade as we know it is dead“. Of course cap-and-trade is, at base, a tax on carbon which is now considered a “pollutant” by the anointed. Apparently they believe you’ll believe that since it isn’t a comprehensive, across the board imposition of carbon taxation via the method of cap-and-trade, you’ll buy into the basic lie that this is wholly different.

Then they proffer their plan, which, of course, they claim is nothing like cap-and-trade. Really. It’s not:

Rather than include all major industrial sources of greenhouse gases in one broad economywide cap-and-trade system, the Senate trio will propose different types of limits for different sectors of the economy, beginning with electric utilities and then turning later to manufacturers such as chemical plants and pulp and paper mills.

Said another way, they prefer to tax carbon incrementally and not all at once. And that is the only real difference between Graham/Kerry/Lieberman and cap-and-trade.

The result? Read this finely wrought paragraph carefully to glean the effect:

“The bottom line with utilities is they’ll assume a compliance obligation from day one of the program,” the Senate staffer said, adding that no decisions have been made on how to allocate valuable emission allowances to the power companies except to incorporate an industry recommendation to shuttle revenue toward consumers to help pay for higher energy bills.

You have to love the “nuance” – the intent is to agree with the industry (allow them to raise their rates commensurate with the increase in cost to them) and “shuttle revenue toward consumers to help pay for higher energy bills”. In other words, subsidize consumers to pay for industry’s upgrades to cut carbon dioxide output.

The bottom line is your utility bills are going up from day one of the passage of this bill and the taxpayer – you – will be on the hook to subsidize yourself to pay for the increased cost.

Another in a long line of schemes we simply can’t afford and a convoluted and costly method of implementation.

And eventually, of course, the cost of other products (chemical companies? paper mills?) to include transportation and certainly at some point, gasoline and home heating oil will all be taxed as well.

Transportation fuels can expect a carbon tax that rises based on the compliance costs faced by the other major emitters. Several major oil companies, including Shell Oil Co., ConocoPhillips and BP America, floated the original idea on Capitol Hill, and the Senate trio has evolved their plan by funneling revenue toward transportation projects, reducing fuel consumption and lowering domestic reliance on foreign oil. The Highway Trust Fund is also a potential recipient of the carbon tax revenue, Senate aides said.

A carbon tax, by any other name, is still a carbon tax, isn’t it? And the timing of such legislation is just perfect. If passed anytime soon, the increased costs to industry should hit just about the time they’re beginning to climb out of recession.

As they make their case for the legislation, the three senators plan to tout their effort to incorporate energy and climate proposals into one overall package. And they will highlight the shift on carbon pricing away from cap and trade.

“It will be different from anything that’s been put on the table in the House or Senate to date,” Kerry said last week. “It’ll be comprehensive. And I hope it’ll change the debate.”

But it’s not “different” in the most important aspect – it taxes carbon. The premise is that carbon dioxide is a pollutant. For those who don’t accept the premise as accurate or scientifically valid, this is no different than cap-and-trade. It aims at the same result (taxing carbon) only approaching it in a slightly different and incremental manner.

~McQ

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The Future Consequences Of Energy Stupidity

I’m not sure how else to characterize this in a strategic and national security sense:

Canada, faced with growing political pressure over the extraction of oil from its highly polluting tar sands, has begun courting China and other Asian countries to exploit the resource.

The pressure is coming from the United States. The “pollution” is carbon. But the bottom line is the tar sands are going to continue to be exploited in Canada. The question is, to whom will the oil extracted go?

With the US backing away, the answer, apparently, is China.

In the most significant deal to date, the Canadian government recently approved a C$1.9bn (£1.5bn) investment giving the Chinese state-owned oil company Petro­China a majority share in two projects. Prime minister Stephen Harper said: “Expect more Chinese investment in the resource and energy sectors … there will definitely be more.” China’s growing investment in the tar sands is seen in Canada as a useful counter to waning demand for tar sands oil from the US, its biggest customer. The moves, which have largely gone unnoticed outside north America, could add further tension to efforts to try to reach a global action plan on climate change.

[…]

The projects, which will begin coming on line over the next decade, are seen as crucial to a long term strategy of finding new sources of energy as China’s economy continues to expand.

How about that … a country with a “long term strategy” in which it seeks sources of new energy for future growth. Not so in the US where Ken Salazar’s Interior Department seems to be using every means available to it to slow down the possibility of finding and bringing new carbon based resources on line for future consumption:

The Interior Department has informed Congress that it will take over two years to complete an environmental study needed to allow major seismic surveys of Atlantic coast oil-and-gas resources – a timeline that industry groups allege is too slow.

In an early February letter to House and Senate appropriators, Interior provides a timeline for completing a “programmatic environmental impact statement” on the effects of seismic testing and other assessment techniques.

It anticipates a “record of decision” – which is the final agency sign-off – in mid-April of 2012.

If I’m not mistaken, that will put us 4 years into the decision to allow drilling in the OCS. And, of course, seismic surveys and their effects are well known and have been for decades. The seismic surveys would update decades old surveys.

The point, of course, is these new Interior requirements completely derail the timeline established by the Interior Department in 2007:

Interior’s 2007-2012 offshore leasing plan calls for a lease sale off Virginia’s coast in 2011, although the sale could be delayed.

No company is going to bid on leases until those seismic surveys are complete.

The long range consequences for the US of these sorts of short sited policies should be obvious. And I don’t expect them to get any better any times soon despite the promises President Obama made in his State of the Union address.

~McQ

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Define “Green Jobs”

Because where I come from, this doesn’t suffice:

President Barack Obama is spending $2.1 million to help Suntech Power Holdings Co. build a solar- panel plant in Arizona. It will hire 70 Americans to assemble components made by Suntech’s 11,000 Chinese workers.

So it’s not really a “solar-panel plant”, it’s a “solar-panel assembly plant”. Are those “green jobs?” How so? They don’t make the parts. It’s not their technology. To me it’s not much different than assembling an air conditioner. Or a car. It’s not a manufacturing job, it’s an assembly job, and it is no more “green” than assembling an auto-winding watch (I mean, there’s no battery in the watch, so that makes it a “green job” right?).

And at $30,000 a job (subsidy), it’s clear how government efficiently and carefully spends your money and should be trusted with more.

Just to make sure I’ve got this – we’re spending 30K per job subsidizing a Chinese manufacturer’s assembly plant in the US? Have I got that straight? All so a) a claim can be made that jobs were “created” and b) that the created jobs were “green jobs”.

Laughing and derision optional but highly recommended at this point. Keep in mind though that the government’s answer to making “real” green jobs available in America is cap-and-trade (yeah, I know that’s counter-intuitive, but only if you live outside the beltway). Don’t believe me? Read the rest of the article.

~McQ

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Green Jobs, Distorted Markets And “Comprehensive” Energy Policy

This is what it takes to create “Green Jobs“?

President Obama’s announcement earlier today of an additional $2.3 billion in federal tax credits for creating approximately 17,000 subsidized temporary jobs in the green energy industry is drawing a less than enthusiastic response from Thomas J. Pyle, president of the Institute for Energy Research:

“Show me one other industry that requests and receives a nearly 30 percent taxpayer subsidy. That’s what the wind and solar industries require – at a minimum – to exist. All the president did today is throw more money at an unproven technology that is not economically viable in the marketplace. Unfortunately, the only winners in this latest taxpayer giveaway will be Wall Street money managers and corporate interests in the wind and solar industry.

Of course, dividing the subsidy by the number of jobs shows us that each job costs the taxpayers $135,295 each. The usual inefficient and wasteful spending for which the government is famous.

But there’s another bit of truth in Pyle’s statement that the right likes to mostly ignore – corporate interests, not just in the wind and solar industry, are deeply intertwined with political interests in this country and those corporate interests use their ability to influence in ways that give them an advantage (even to the point of helping to write legislation). However, that’s a post for another day.

Today, we’re looking at a perfect example of a governmental distortion of a market. Without the subsidy, the wind and solar industries most likely wouldn’t survive. But since it is a politically favored industry, it gets a hand out to keep it afloat. Meanwhile, it finds only a limited market share because the alternatives – coal, natural gas, oil, etc. – are much cheaper, more reliable and more readily available. Says Pyle:

“If the president really wants to create an environment that will foster economic growth and job creation, he need not look any further than the domestic oil, gas and coal industries. These three industries and energy sources built this nation. For the administration to continue to ignore this fact and to keep the vast resources that taxpayers own under lock and key at the Department of Interior is irresponsible and a disservice to the American people.

“The Outer Continental Shelf (OCS), if opened for business, would create over 1 million high-wage jobs. It would reduce our dangerous dependence on hostile nations for their energy resources and spur economic growth across all 50 states. Development of these energy resources will create sustainable employment, not taxpayer dependent make-work jobs.”

Instead, as I pointed out in a post last week, this administration is doing the opposite. New rules from Secretary of the Interior Ken Salazar make such exploration and exploitation of these known reserves much more difficult to do. It is step 2 in the government’s distortion of the energy market.

And it’s distortion of markets does have an effect – mostly unintended and, frankly, negative. Take the biofuel mandates Congress passed into law a year or so back.

It sounded like a good idea: Provide a little government money to convert wood shavings and plant waste into renewable energy.

But as laudable as that goal sounds, it could end up causing more economic damage than good — driving up the price of raw timber, undermining an industry that has long used sawdust and wood shavings to make affordable cabinetry, and highlighting the many challenges involved in decreasing the nation’s dependence on oil by using organic materials to create biofuels.

In a matter of months, the Biomass Crop Assistance Program — a small provision tucked into the 2008 farm bill — has mushroomed into a half-a-billion dollar subsidy that is funneling taxpayer dollars to sawmills and lumber wholesalers, encouraging them to sell their waste to be converted into high-tech biofuels. In doing so, it is shutting off the supply of cheap timber byproducts to the nation’s composite wood manufacturers, who make panels for home entertainment centers and kitchen cabinets.

The subsidy has distorted the market that has historically seen timber byproducts go to composite wood manufacturers and, since the subsidy pays more, seen those byproducts go to the production of biofuels. Result? Higher timber prices, an important market segment in trouble and an industry which couldn’t survive in the market without the subsidy continues to function.

In fact, the tail is wagging the dog as the government uses its power and purse to attempt to meet the arbitrary mandates that Congress passed into law:

The federal government is actively working to support the growth of as many of these biomass crops as possible, in part to meet requirements under the 2007 energy bill: The country must produce 5.5 billion gallons of advanced biofuels annually in five years, and 21 billion gallons by 2022. Right now, almost no U.S. land is devoted to raising biomass crops; according to congressional estimates, by 2022 the country will need between 22.2 and 55.5 million acres for this purpose

Did you get that? In 13 years it is estimated that between 22 and 55 million acres will be devoted to growing crap “crops” – like switch grass – instead of food – just to feed this contention that biofuels are better for us than fossil fuels. Those, I suppose, will be “green jobs” as well.

Speaking of green jobs – the government doesn’t even have a definition of what that means:

Even the Bureau of Labor Statistics, which has been cogitating on the problem since last spring, hasn’t made up its mind on how to count green jobs.

“There’s alternative ways for doing that and we haven’t yet finalized our methodology,” says John Galvin, associate commissioner for employment statistics at the BLS.

So you, and they, can call just about whatever you want a “green job” – and I have little doubt that the spinmeisters in government will do exactly that for the foreseeable future (especially when inventing statistics for “created and saved” jobs).

In reality I have no problem with “green jobs” or alternate and renewable fuels. I only have one demand – that they carry their own weight in the marketplace. Subsidizing each doesn’t meet that demand. Instead it unleashes the law of unintended consequences in all its negative fury and distorts exiting markets in ways that cost jobs and productivity that this economy badly needs. As Thomas Pyle points out, we have existing resources and existing technology that could create more available energy while creating thousands of good paying jobs not requiring a single dollar in subsidies that we’re ignoring to push an industry (or industries) which aren’t economically viable and, with existing technology, won’t be for years if not decades.

It is a short-sighted, politically driven policy which will hurt us in the long run. While this administration talks about a “comprehensive” energy policy, it is clear it has settled on one which is focused on an nonviable but politically correct industry to the detriment of the viable but carbon based existing industry. That is not a comprehensive policy regardless of how many times the politicians claim it is or put it in the title of their bills. A comprehensive strategy would recognize the reality with which we’re faced, exploit the traditional carbon based fuels while putting together a rational timetable for switching over to alternative (nuclear) and renewable fuels as the technology proved viable and cost effective.

Instead we get subsidized distortion of the markets, eschewing of readily available carbon based fuels and a push for jobs no one has yet to be able to define.

It’s madness. And, unfortunately, it is a madness which is going to cost us dearly in the not too distant future.

~McQ

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About That Dependency On Foreign Oil – Get Used To It

The double-talking Obama administration, who lectured us about the need to wean ourselves from our dependency on foreign oil, has, through actions taken by Interior Secretary Ken Salazar, made the goal of less dependency less likely.

Salazar, yesterday, announced a new level of bureaucratic requirements sure to slow and provide disincentives to increases in domestic oil and gas exploration.  In the first year of the Obama administration’s tenure, Salazar had already slowed such exploration to a walk  As the Institute for Energy Research (IER) reports:

* Under the first year of the Obama administration’s 2009 oil and gas leasing program, fewer onshore and offshore acres have been leased than in any previous year on record.

* The Interior Department collected less than one-tenth the revenue from oil and gas lease sales in 2009 than it did in 2008

* For the year 2008, lease sale revenues produced a return for the taxpayer of $942 per acre leased. In 2009, taxpayers received about $254 in return for each acre leased under the Obama administration – indicative of the quality of leasable land made available under Sec. Salazar

* More than 97 percent of the 2.46 billion acres of taxpayer-owned lands in the public domain are presently not leased for oil and gas exploration

In a time of economic hardship where federal revenues are way down and deficit spending runs rampant, it is almost criminal to do what Salazar has done. As the Industrial Energy Consumers of America points out:

“At a time when we should be working to enhance our energy supplies here at home, we believe it would be a mistake to pursue policies that would make it more expensive or difficult to access critical natural-gas resources …”

But that is precisely what Secretary Salazar intends to do. IER president Thomas J. Pyle released the following, which pretty much calls the administration out on their absurd policies concerning domestic exploration for oil and gas.  Frankly, I think it is an understatement:

“When it comes to paving the way for the responsible development of homegrown, job-creating energy resources, no administration in history has done more to ensure producers do less.”

The Bureau of Land Management released the following:

Under the reformed oil and gas leasing policy, BLM will provide:

* Comprehensive interdisciplinary reviews that take into account site-specific considerations for individual lease sales. Resource Management Plans will continue to provide programmatic-level guidance, but individual parcels nominated for leasing will undergo increased internal and external coordination, public participation, interdisciplinary review of available information, confirmation of Resource Management Plan conformance as well as site visits to parcels when necessary;

* Greater public involvement in developing Master Leasing and Development Plans for areas where intensive new oil and gas extraction is anticipated so that other important natural resource values can be fully considered prior to making an irreversible commitment to develop an area;

* Leadership in identifying areas where new oil and gas leasing will occur. The bureau will continue to accept industry expressions of interest regarding where to offer leases, but will emphasize leasing in already-developed areas and will plan carefully for leasing and development in new areas.

BLM Director Bob Abbey said the increased opportunity for public participation and a more thorough environmental review process and documentation can help reduce the number of protests filed as well as enhance BLM’s ability to resolve protests prior to lease sales.

Of course, anyone who has been around for more than a day or two has seen this sort of wording before and know how to read between the lines. For instance, note the last sentence. “Increased … public participation” means environmental groups opposing such leases will be given much more access to the process. “A more thorough environmental review process” means leases will essentially be held hostage to a review process which could last years. Finally, the “ability to resolve protests prior to lease sales” means the priority will be to make the protesters happy, not those seeking a lease.

The effect, of course, will be less exploration, less production, fewer jobs and more dependency on foreign oil. Given the economic climate today and the country’s energy needs,  that’s inexcusable.

As Jack Gerard, president of the American Petroleum Institute warns:

About 9.2 million Americans rely on the oil and gas industry for their jobs. By imposing these unnecessary additional hurdles, American jobs will be threatened along with the economic opportunities afforded by oil and gas development.

So, instead of safely and swiftly exploiting domestic resources (and creating jobs and increasing revenue) it appears the plan is to sit on an estimated 86 billion barrels of oil and 420 trillion cubic feet of natural gas offshore, as much as 35 billion barrels of oil in Alaska and the Chukchi Sea, and a massive 2.2 trillion barrels of energy in oil shale deposits in Utah, Wyoming and Colorado while Salazar plays politics with our energy future.

Why, You Ask, Are Businesses Not Hiring? The EPA For One Reason…

As regular readers know, we’ve been talking about why businesses are sitting on the sidelines and not hiring at the moment.  Businesses don’t like unsettled questions about the arena in which they must operate.  Health care legislation will effect the cost of doing business.  Until that is settled, there’s little incentive to take a chance and hire or expand their business.   If it costs more to do so after the legislation is passed – and it seems it will, they’ll wait to see the eventual outcome (and cost) and adjust accordingly.  Same with cap-and-trade.

However, in that regard, the EPA seems ready to proceed on it’s own schedule and businesses are not liking what they’re hearing:

Officials gather in Copenhagen this week for an international climate summit, but business leaders are focusing even more on Washington, where the Obama administration is expected as early as Monday to formally declare carbon dioxide a dangerous pollutant.

An “endangerment” finding by the Environmental Protection Agency could pave the way for the government to require businesses that emit carbon dioxide and five other greenhouse gases to make costly changes in machinery to reduce emissions — even if Congress doesn’t pass pending climate-change legislation. EPA action to regulate emissions could affect the U.S. economy more directly, and more quickly, than any global deal inked in the Danish capital, where no binding agreement is expected.

Bottom line – if the administration can’t get it done legislatively, they’ll just assume the authority and implement what they wish to do to restrict emissions and require “changes in machinery” unilaterally.

An EPA endangerment finding “could result in a top-down command-and-control regime that will choke off growth by adding new mandates to virtually every major construction and renovation project,” U.S. Chamber of Commerce President Thomas Donohue said in a statement. “The devil will be in the details, and we look forward to working with the government to ensure we don’t stifle our economic recovery,” he said, noting that the group supports federal legislation.

Can you imagine a more pervasive “emission” or arbitrarily applied set of mandates? Start asking yourself who the favored and unfavored industries are out there? Do you suppose coal fired power plants might be target one? And I’d guess that refiners would be in the same boat – unless they make ethanol.

The point of course is this is a perfect way to target and increase the cost of operating businesses that the EPA decides are the worst CO2 polluters. They’ll just write regulations that require costly renovations and changes. The net outcome, of course, is increased cost to consumers – most likely in their electricity bills, the cost of goods (transportation) and just about every other aspect of life you can imagine.

An endangerment finding would allow the EPA to use the federal Clean Air Act to regulate carbon-dioxide emissions, which are produced whenever fossil fuel is burned. Under that law, the EPA could require emitters of as little as 250 tons of carbon dioxide per year to install new technology to curb their emissions starting as soon as 2012.

The EPA has said it will only require permits from big emitters — facilities that put out 25,000 tons of carbon dioxide a year. But that effort to tailor the regulations to avoid slamming small businesses with new costs is expected to be challenged in court.

Legislators are aware that polls show the public appetite for action that would raise energy prices to protect the environment has fallen precipitously amid the recession.

Understanding that the public appetite for such action is very low, legislators are perfectly happy to let cap-and-trade languish. So the bureaucracy is being empowered to go where no elected politician dares at the moment. And if you’re a business, that means you’re still not clear what that means to you at the moment.

And so, you don’t hire. You don’t expand. You’re barely competitive in the global market as it is and now they’re talking about adding more cost? Yeah, that settles everything, doesn’t it? They’ll start hiring tomorrow.

~McQ

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Why The GOP Remains A Minority

About a week ago, amidst all the hoopla about the health care bill and then missed when the atrocity of Ft. Hood occurred, was this:

Even as a Senate global-warming bill remained in limbo with Democrats refusing to delay a committee vote until an economic analysis was completed, hopes rose for a potential bipartisan compromise.

The Senate, meanwhile, appears to be moving away from the bill, authored by Sen. Barbara Boxer, D-Calif., and Sen. John Kerry, D-Mass., which would require a 20 percent reduction in carbon emissions by 2020 and would have the government sell the right to emit carbon dioxide.

Even as Boxer conducted an unusual one-sided hearing on her bill in the Environment and Public Works Committee, Kerry, Sen. Lindsey Graham, R-S.C. and Sen. Joe Lieberman, I-Conn., held a news conference to announce they are working on a compromise that might attract GOP votes and has earned a tentative endorsement from the U.S. Chamber of Commerce.

So, here we have a Republican, sort of, lending a hand to the Democrats and buying into the premise that a) this cap-and-trade economy killer of a tax is valid and b) needed. He just wants to modify it a bit:

Kerry, Lieberman and Graham released few details about the new bill, but said it would include a cap and trade proposal. They said it would also address increasing nuclear energy, more drilling and clean coal technology, all initiatives that are high on the wish list of Republicans willing to work on a climate change compromise.

Of course this is the sort of legislative formula which is killing our country. This is exactly how the lousy legislation gets through the system. Republicans like Graham buy into the premise of cap-and-trade, try to get it reduced just a little bit to make it more palatable, and then  attempts to sell it by including things that Republicans want – more drilling, nukes and clean coal.

The problem, of course, is with Democrats in charge, you can count on cap-and-trade being implemented, but for some reason, you can bet that more drilling, nuclear power and clean coal just won’t see the same urgency to implement found among majority Democrats. So in essence, what Graham is proposing is tantamount to selling out the GOP’s principled position for the 30 pieces of silver offered in promises for things Republicans want.

You’d think by now, having watched the Democratic shenanigans with drilling (are we doing so yet or are they still “slow-walking” the process) they’d know better.

The Graham capitulation has been noticed by his home state party.

The Charleston County Republican Party’s executive committee took the unusual step Monday night of censuring U.S. Sen. Lindsey Graham for stepping across the GOP party line.

County Chairwoman Lin Bennett said the unanimous vote “is an effort to get his attention. They (party leaders) are just fed up, and they want him to know they’re fed up.”

The resolution mentions Graham’s cooperation with U.S. Sen. John Kerry, D-Mass., on a bipartisan energy bill, and his support for the $700 billion Troubled Asset Relief Program and the time he called some opponents of immigration reform “bigots.”

Sure it’s only one county doing so, but it is an unusual step. And frankly, I think it is a long overdue one. Graham’s actions, as far as I’m concerned, are one of the main reasons the GOP is in the shape it is in. There is a time to work in a bi-partisan manner and there is a time to stand on principle. The GOP supposedly believes we’re over taxed, a position I happen to support as well. So why is a member of that party stepping across party lines and lending support to what everyone, even Democrats, acknowledge is a new huge and burdensome tax?

Why should anyone ever believe Lindsey Graham again when he says he’s against new taxes when he’s involved with Democrats proposing one? Why should anyone ever believe Lindsey Graham when he says he’s against excessive spending when he voted for TARP?

The answers to those two questions tell you precisely why even the GOP’s base doesn’t trust Republican legislators and why their collective poll numbers remain dismal. Calling Graham to account for his position is both healthy and necessary if, in fact, the GOP is serious about its principles. And, if the Tea Parties are any indication, it is clear the base is. And apparently the GOP’s grass-roots are willing to stand up as well as indicated by this county organization’s censure of Graham.

I wonder if Graham will get the message or arrogantly dismiss it as he’s been known to do in the past? The reason the GOP is in the minority right now isn’t because it is a conservative organization that appeals only to old white men in the South. It’s a minority organization because its own base doesn’t trust it to live up to its own principles. How do you generate the enthusiasm necessary to turn out the vote if what the base is left to vote for is a version of Lindsey Graham’s Democrat lite?

~McQ

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