Free Markets, Free People

Energy


Why won’t this administration look at this revenue source?

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.

~McQ


Another country from which to “learn”

The question, as posed earlier concerning Britain and France, is will we?

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?

Other result?

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.

Etc.

~McQ


Welcome to the law of unintended consequences

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.

Brilliant!

How much carbon is being emitted by wood burning stoves?  How about the deforestation?

Gee, nukes don’t sound so bad now, do they?

~McQ


Failing California doubles down on solar power

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.

For example:

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:

~McQ


Doha – the zombie UN climate change charade staggers on

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.

~McQ


Keystone XL: So now what will the excuse be to delay it?

You likely recall the controversy concerning the President’s denial of approval for the Keystone XL pipeline a few months back.  Citing the route through the state of Nebraska as a problem, Obama decided to defer a final decision until after the election.

Up for grabs – a lot of oil and 20,000 jobs.  Most saw approval as a no-brainer and the route through NE as easily “fixable”.   But Obama was having none of it, choosing to please his base vs. opting for jobs for Americans.  Since the disapproval, Canada, where the pipeline originates, has announced plans to sell that oil to China.

So, where are we now?

Well, there’s a new route through NE and local leaders have voiced strong support for the pipeline:

TransCanada has proposed a new route for the pipeline that avoids the Nebraska Sandhills, and the Nebraska Department of Environmental Quality is seeking comment before it drafts its report on the new route. Port-To-Plains Alliance, which is made up of more than 100 local elected officials and community leaders, has today offered its “strong support” for the Keystone XL Pipeline.

Their reasoning seems pretty strong — if you’re interested in putting Americans back to work and helping the economy:

Keystone XL will provide significant economic benefits for our region. The pipeline is expected to create approximately 20,000 manufacturing and construction jobs in the United States. It could also generate more than $5.2 billion in tax revenue to the Keystone XL corridor states. At a time when state and local governments across the country are struggling to balance their budgets, these employment and revenue benefits are critical to our region. Specific benefits for Nebraska include:

  • More than $465 million in new spending for the Nebraska economy
  • More than 7,500 person years of employment
  • Increased personal income by $314 million
  • Additional state and local tax revenues of more than $11 million
  • $390 million in increased Gross State Product

And that’s just Nebraska.  Other states stand to gain significant revenue as well.

Then there’s the issue of the Bakken Formation oil in Montana and  North Dakota.  It too needs the pipeline to be finished so it can efficiently ship oil from there to the coastal refineries.

Again, the major problem has apparently been solved.  It’s a move that would lessen our dependence on Venezuelan and Middle East oil (instead opting for supplies from a loyal and stable ally), would make the shipment of Bakken oil less costly, benefit state and Federal revenue (at a time when both entities are hurting for it) and, most importantly, create multi-thousands of jobs.

So, what excuse do you believe Obama will use to further delay or disapprove it this time?

~McQ


But remember, government knows best …

And if you need an example of why you should always rely on government to get it right, well, just consider the latest concerning the mandated use of food ethanol for fuel:

The AAA says the Environmental Protection Agency and gasoline retailers should halt the sale of E15, a new ethanol blend that could damage millions of vehicles and void car warranties.

AAA, which issued its warning today, says just 12 million of more than 240 million cars, trucks and SUVs now in use have manufacturers’ approval for E15. Flex-fuel vehicles, 2012 and newer General Motors vehicles, 2013 Fords and 2001 and later model Porsches are the exceptions, according to AAA, the nation’s largest motorist group, with 53.5 million members.

“It is clear that millions of Americans are unfamiliar with E15, which means there is a strong possibility that many may improperly fill up using this gasoline and damage their vehicle,” AAA President and CEO Robert Darbelnet tells USA TODAY. “Bringing E15 to the market without adequate safeguards does not responsibly meet the needs of consumers.”

Ya think?

Hey look buddy,  the ideological agenda waits on no one and if you’re among those driving the 228 million “other” vehicles, tough nuts.

The government has said 15%.  Nuff said.

BMW, Chrysler, Nissan, Toyota and VW said their warranties will not cover fuel-related claims caused by E15. Ford, Honda, Kia, Mercedes-Benz and Volvo said E15 use will void warranties, says Darbelnet, citing potential corrosive damage to fuel lines, gaskets and other engine components.

Gee, I wonder if anyone will question the “fairness” of this.

Anyone doubt who will pick up the tab for this, Mr. and Mrs. Consumer?

~McQ


World’s largest oil producer? If we can get government out of the way …

That is the key. And, given the re-election of Barack Obama, it may not be very likely:

A shale oil boom means the U.S. will overtake Saudi Arabia as the world’s largest oil producer by 2020, a radical shift that could profoundly transform not just the world’s energy supplies, but also its geopolitics, the International Energy Agency said Monday.

In its closely watched annual World Energy Outlook, the IEA, which advises industrialized nations on their energy policies, said the global energy map “is being redrawn by the resurgence in oil and gas production in the United States.”

The assessment is in contrast with last year, when it envisioned Russia and Saudi Arabia vying for the top position.

“By around 2020, the United States is projected to become the largest global oil producer” and overtake Saudi Arabia for a time, the agency said. “The result is a continued fall in U.S. oil imports (currently at 20% of its needs) to the extent that North America becomes a net oil exporter around 2030.”

This major shift will be driven by the faster-than-expected development of hydrocarbon resources locked in shale and other tight rock that have just started to be unlocked by a new combination of technologies called hydraulic fracturing.

And there’s the rub. Fracking has been demonized by the enviros and the Democrats. Nevermind the fact that in this nation alone it has been in use for 64 years and over a million wells have been drilled using it. This is not new technology despite the apparent belief by some that it is and that it is dangerous.

Environmental groups and some scientists say there hasn’t been enough research on fracking.

Right.  1948.  A million wells.  No history there.

EPA is publishing new regulations on fracking which they claim will not impede production.  Any bets out there concerning the truth of that assertion?

We talk about “energy independence” often and others rightfully point out that oil is a global market and that it is difficult to become truly independent.  Given these new finds, I’m not so sure that argument is still valid.  Or at least it isn’t as valid as it was when we believed we only sat on top of 2% of the world’s reserves.

Let’s be clear here , the possibility of increased fossil fuel production, to the point of defacto energy independence flies in the face of everything the left wants to do in the energy sector.  Anyone who doesn’t understand that has not been paying attention.  We’ve seen it with this administration’s ban on off-shore drilling, putting areas of federal land off-limits and slow-walking the permit process.  There is no reason to believe that will change.  None.

We have the possibility to strategically help the country, create thousands if not millions of jobs, create revenue for government and begin to help a struggling economy get off it’s knees and at least begin staggering forward in a positive direction.  If the past four years is any indication, that’s an opportunity that will likely be passed up or at best, minimized.

Oh, this administration will talk a good game, it always does.  And it will claim it is interested in “all of the above” when it comes to energy.  But action speaks louder than empty words and the action we’ve seen from Obama, et. al., says exactly the opposite is true.

We’re sitting on potential energy resources that could be a veritable game changer.  One problem.  With a government in place that loves to pick winners and losers, it looks upon fossil fuel as a loser.

The results, unfortunately, are predictable.

~McQ


Obama Administration shuts down half of Alaskan National PETROLEUM Reserve

Note the capitalized word in the title?

The WSJ fills in any blanks:

President Obama is campaigning as a champion of the oil and gas boom he’s had nothing to do with, and even as his regulators try to stifle it. The latest example is the Interior Department’s little-noticed August decision to close off from drilling nearly half of the 23.5 million acre National Petroleum Reserve in Alaska.

The area is called the National Petroleum Reserve because in 1976 Congress designated it as a strategic oil and natural gas stockpile to meet the “energy needs of the nation.” Alaska favors exploration in nearly the entire reserve. The feds had been reviewing four potential development plans, and the state of Alaska had strongly objected to the most restrictive of the four. Sure enough, that was the plan Interior chose.

Why?  Because Ken Salazar in his infinite wisdom, knows more about all of this that you proles, especially the proles in Alaska. The excuse?

Interior Secretary Ken Salazar says his plan “will help the industry bring energy safely to market from this remote location, while also protecting wildlife and subsistence rights of Alaska Natives.” He added that the proposal will expand “safe and responsible oil and gas development, and builds on our efforts to help companies develop the infrastructure that’s needed to bring supplies online.”

Got that?  Restricting use of a area designated by Congress for a specific purpose, a purpose backed by the state in which the area is located, will “help industry” and expand “safe and responsible oil development”.

Really?

George Orwell, call your publisher.  Time to update Newspeak.  Up is now down, and restrictions now “help industry” and “expand” development.

Meanwhile in coal country:

Two coal companies in Pennsylvania blamed President Obama and his Environmental Protection Agency (EPA) for the layoffs announced last week.

“[T]he escalating costs and uncertainty generated by recently advanced EPA regulations and interpretations have created a challenging business climate for the entire coal industry,” said PBS Coals Inc. President and CEO D. Lynn Shanks in a statement on Friday, as noted by the Pittsburgh Post-Gazette. The company also cited weaker-than-normal demand for coal.

Shanks’ comment on the EPA came as he announced a 28 percent work force reduction. “PBS Coals Inc. and its affiliate company, RoxCoal Inc., laid off about 225 workers as part of an immediate idling of some deep and surface mines in Somerset County,” Post-Gazette added. “The company now employs 795 workers.”

Yes, the Obama promise to essentially put coal out of business is indeed making progress.

So wait, we have the administration restricting the oil industry in Alaska and the EPA causing layoffs in coal country, and my guess is Obama will attempt to brag about how many jobs he’s created tomorrow night.  Any takers?

That said, guess who is getting “fast tracked”?

The Interior Department set aside about 285,000 acres for commercial-scale solar in Arizona, California, Colorado, Nevada, New Mexico and Utah. The federal government will offer incentives for development, help facilitate access to existing or planned electric infrastructure and ease the permitting process in the 17 zones.

“Energy from sources like wind and solar have doubled since the president took office, and with today’s milestone, we are laying a sustainable foundation to keep expanding our nation’s domestic energy resources,” Interior Secretary Ken Salazar said. …

The development program approved Friday cuts some up-front costs for developers, as the federal government already has performed National Environmental Policy Act assessments for the sites.

I’ve been writing about the plan to carpet the desert with solar panels for a while.  But there’s a bit of irony here as Erica Johnsen of Hot Air points out.  First the news:

The administration fired the most recent volley Wednesday by affirming tariffs on Chinese imports. The Commerce Department determined Chinese solar panels were sold below fair value and that its solar businesses unfairly received direct government support.

Now for the irony:

Yes, you read that correctly — even with all of the many types of subsidies and special government treatment the solar industry receives, they still can’t compete, so the government affords the domestic industry protectionist tariffs… purportedly because China gives its own industry unfair government help.

Amazing.

Anyone who still thinks this isn’t the most political, inept, corrupt, ideologically driven and opaque administration in the history of this country has to have been living under a rock for a few hundred years.

This bunch makes one pine for Jimmy Carter.

~McQ