Free Markets, Free People

energy policy

Observations: The QandO Podcast for 13 Jan 13

This week, Michael, and Dale discuss…stuff.

The direct link to the podcast can be found here.

Observations

As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2010, they can be accessed through the RSS Archive Feed.

Nevada’s epic “green energy” failure

Unfortunately these stories are all too common now:

As U.S. Senate Majority Leader Harry Reid prepares to host his fifth annual  National Clean Energy Summit on Aug. 7, a Nevada Journal examination of Nevada’s renewable energy sector shows that over $1.3 billion in federal funds funneled into geothermal, solar and wind projects since 2009 has yielded and is projected to yield just 288 permanent, full-time jobs.

That’s an initial cost of over $4.6 million per job.

So as the Senator from Nevada tries today to justify his profligacy in his home state at your expense via this sham “National Clean Energy Summit”, you can be assured of one thing – No one in government will be held accountable for this, at least not legally. 

The performance of many of these “sons of cronyism” is as dismal as the cost per job is outrageous.

Auditors for Nevada Geothermal Power, a federally subsidized green-energy firm in Nevada, are raising questions about whether that firm is going to fail.

As of last October, Nevada Geothermal Power had 22 employees in Nevada, and, according to the New York Times, had received $145 million in federal subsidies — composed of a loan guarantee of nearly $79 million for its Blue Mountain geothermal project and at least $66 million in grants to the company itself.

The Times called the company a “politically connected clean energy start-up that has relied heavily on an Obama administration loan guarantee,” and said it “… is now facing financial turmoil.”

Today, three quarters later, the latest company audit again questions the “company’s ability to continue as a going concern.”

The firm’s survival, wrote auditors on March 31, will depend “on its available cash and its ability to continue to raise funds….”

And that’s not the only example:

The most recent “clean energy” company failure in Nevada occurred three weeks ago when Amonix, a North Las Vegas solar manufacturing plant that had received more than $20 million in federal tax credits and grants, closed after only 14 months of operation.

Hailed upon its opening by Sen. Reid, U.S. Rep. Shelley Berkley and Gov. Brian Sandoval, the 214,000-square-foot Amonix facility had, at its height, employed some 700 individuals. In 2010, even President Barack Obama praised the Amonix plant, saying the “stimulus” tax credits it received had made an “extraordinary impact.”

Today, the company is bankrupt.

The result is something out of an Orwellian nightmare and the ultimate victim?  The people of Nevada:

In Nevada, consumer energy rates climb higher and higher. According to the Energy Information Administration (EIA), Nevada now has the highest residential electricity rates in the Intermountain West region.

Moreover, so long as present government policies — such as the state’s Renewable Portfolio Standard — remain in place, rates will continue upward.

While Sen. Reid helped Salazar fast-track government-approved renewable projects in 2009, he also used his influence as Senate majority leader to delay and ultimately kill a coal power plant planned for White Pine County.

Coal-powered plants produce electricity at a much lower price than do renewable-powered plants, according to the EIA and NV Energy.

Currently, NV Energy pays 3 to 5 cents per kilowatt-hour for natural gas and coal-fueled power, 8 to 10 cents per kWh for geothermal energy and for wind energy and 11 to 13 cents per kWh for solar photovoltaic energy. Wind and solar photovoltaic energy also require backup power for “intermittency issues.”

The higher costs from renewable-energy production are passed on to Nevada ratepayers in the form of residential electricity rates that are 26 percent higher than those of other Intermountain West states and 7 percent higher than the national average, says the EIA.

Obviously cronyism isn’t just limited to Democrats.  It’s just their turn in the barrel because their cronyism has been such a spectacular disaster here lately.

What none of our elected officials who regularly indulge in cronyism seem to understand is that they call certain things economic principles or economic laws for a reason – they aren’t something you can ignore and expect, for some reason, to be successful in ignoring them.

In this case Richard Epstein of the Hoover Institute again states why what is again being attempted, and failing, is a lesson that the government seems never to learn:

These subsidies programs have failed for mundane but compelling reasons. No government has ever succeeded in trying to shape industrial policy with state subsidies, for the simple reason that it has neither the knowledge nor the incentives to pick which fields make sense to invest in or which firms in these fields have latched onto a viable technology.

No government should, of course, ban investments in solar and wind energy, but the prudent strategy is to let these investments be made by venture capitalists and other entrepreneurs who might actually know what they are doing. And currently, the smart money seems to be steering clear of renewable energy technologies.

And yet we continue to see these sorts of attempts by government to do something it is entirely unequipped (and unneeded) to do.

You know, act like it has better information than … markets.  It never has, it never will.  The results are just about as predictable as sunrise.

Failure.  In some cases epic failure.

In the case of Nevada, government intrusion, at the cost of $1.3 billion of your dollars, has created a whopping 288 jobs and managed to quadruple energy costs for the state’s residents.

And yes, I put that in the epic failure column – but then we’re talking Harry Reid here, so one should be used to epic failure when his name is mentioned.

~McQ

Twitter: @McQandO

“All-of-the-above” energy policy doesn’t mean just adding “clean coal” to campaign energy web page

This guy is so obvious it amazes even me at times.

He loses 41% of the Democratic vote in the West Virginia primary to a Texas jailbird and suddenly he’s all for “clean coal.”  Does he really, honestly believe that now West Virginia will rally to his cause because he put “clean coal” on his campaign web site where it has been conspicuously absent prior to the primary?  This is “smartest guy in the room” stuff?

After coming under fire for its consistent hostility to the coal industry, the Obama campaign quietly adjusted its energy policy website to include “clean coal” among the president’s energy initiatives.

The energy policy page of BarackObama.com now includes a section for “clean coal,” claiming the stimulus package “invested substantially in carbon capture and sequestration research.”

But until recently, that page made no mention of coal. Its Google cache shows a section for “energy efficiency” where “clean coal” now appears.

The change comes mere days after Obama lost 41% of the vote in the Democratic primary in West Virginia – a state heavily reliant on the coal industry – to a convicted felon and current federal inmate.

The chairman of the WV Democratic Party blamed Obama’s poor showing on his stance on coal energy. “A lot of folks here have real frustration with this administration’s stance on coal and energy,” said state Democratic chairman Larry Puccio. “They are frustrated and they are upset, and they wanted to send Obama a message.”

Of course everyone who has followed how Obama operates knows very well he’ll say anything.  It is what he does (or doesn’t do) that matters.  Just like being “for” gay marriage.  That doesn’t mean he’ll do anything to make it happen. It is about how he calculates being “for” something will benefit him politically.  The same holds true for “clean coal”.

Should he win re-election, “clean coal” will be removed as quietly as it was inserted onto the campaign web page.

Forward.

~McQ

Twitter: @McQandO

Imagine a president who puts the needs of the country before a political agenda

Jeffery Folks at American Thinker begins his article with:

Imagine a president who gets behind drilling, welcomes the cutting-edge technology of companies such as ExxonMobil, and offers generous 15-year tax breaks to ensure that new drilling projects move forward.  That’s the kind of energy policy America needs in order to achieve energy-independence.

I’d love to imagine that.  In fact and unfortunately, we have a president who does exactly the opposite. 

If you want someone like Folks is wishing for, you’ll have to go to Russia:

Unfortunately, it’s not Barack Obama who’s behind those positive energy policies; it’s Vladimir Putin.

As Russian president-elect, Putin has made it clear that he intends to open his country’s arctic and Black Sea regions to drilling.  The potential is so great, and the necessary investment so immense, that even Russia’s giant state-run oil companies, Rosneft and Gazprom, lack the resources and technology to proceed.  So, with Putin’s blessing, Rosneft and Gazprom have entered into joint-production agreements with Exxon, Italian major Eni, and other Western companies.  The stakes are huge — not just for these companies, but for the Russian economy.

The arctic and Black Sea fields being jointly developed by Rosneft and Eni contain an estimated 36 billion barrels of oil equivalents.  Those under development by Rosneft and Exxon, which may ultimately require an investment of as much as $500 billion, contain estimated reserves of 36 billion barrels in the arctic Kara Sea fields alone.  (Total recoverable arctic reserves have been estimated at 134 billion barrels of oil equivalent but will likely go higher as exploration proceeds.)  In addition to the arctic and Black Sea fields covered in the Exxon and Eni agreements, president-elect Putin has expressed an interest in the possibility of joint ventures to develop vast Siberian tight shale formations.

The US has an incredible amount of natural resources including huge reserves of oil and natural gas.  We’re already the number 3 oil producer in the world.  And guess who actually leads the world with recoverable fossil fuel reserves?   Yes, that would be the US.  Imagine an energy policy that made extraction of that fuel a priority?  With aggressive exploration and drilling (as well as approval of the Keystone XL pipeline) we could have a 92% secure liquid fuel sources by 2030.  Not to mention, in a time of high unemployment, a jobs bonanza.

But what do we get? 

Not that, that’s for sure.   We instead get a president who talks about an “all-of-the-above” energy policy while his actions belie his claims.  He’s turned lose a executive agency (EPA) on the fossil fuel industry that has already been slapped down numerous times by the judiciary for over-reach.  Drilling and permits on federal land have gone down dramatically.

In an oil market that has seen supplies tightening and prices going up, his administration has done everything to keep it that way.

And voters aren’t happy with his performance at all.

If this is going “Forward”, I’d hate to see backward.

~McQ

Twitter: @McQandO

Obama claims oil a “fuel of the past”

Here we go again:

As rising gas prices become a key issue on the campaign trail, the president argued that using less oil is an important part of the solution.

“We’ve got to develop every source of American energy; not just oil and gas, but wind power and solar power, nuclear power, biofuels. We need to invest in the technology that will help us use less oil in our cars and our trucks, in our buildings, in our factories. That’s the only solution to the challenge, because as we start using less, that lowers the demand, prices come down,” the president told workers at the Daimler Trucks manufacturing plant in Mount Holly, N.C.

Yet in the same speech he calls oil “the fuel of the past”.

Is it?

Of  course not.  It is a fuel he’s decided he no longer wants to pursue for political reasons based in very shaky science.  But fuel of the past?  Fossil fuel is more of a part of our lives now than it has ever been and while alternate fuels are desirable, they’re not even close to being ready for prime time despite massive investment for decades.  But oil a fuel of the past? 

Absurd.

This is typical Obama – try to have it both ways.  Talk about developing “every source of American energy” to include oil and gas and then claim that oil is a ‘fuel of the past’.  That’s a not so subtle reminder that he really doesn’t support fossil fuel production (and hasn’t – see his claims about the “oil industry subsidy”), despite the continuous attempt to take credit for increased oil production during his time in office when his administration has had no hand in it).

The president continued to defend his “all-of-the-above” strategy against Republican attacks on his energy policy. “If somebody tells you we’re not producing enough oil, they just don’t know the facts,” he said.

Really? Well, we’re not, and that’s a fact.  We could be producing much, much more if the Obama administration would get out of the way.  The little known truth about the so-called “fact” Obama throws around about oil production being at its 8 year high, is he had nothing to do with that.  And furthermore, next year, we’ll see a significant decline in production from the lands the federal government controls (it will conveniently happen after the election, of course).  Note the final paragraph below.  It points to another reason why Obama’s claim is disingenuous:

The federal government controls about a third of the nation’s oil production, through federal onshore leases (mostly in the West, where it owns half the land) and leases to drill in outer continental shelf (OCS) starting 10 miles off the coast. The rest of America’s oil production is on state-owned land (including coastal areas) and on private lands subject to state regulation.

As a direct result of the president’s severe constriction of oil production under federal leases, domestic U.S. oil production will be nearly one million barrels per day lower this year than it would have been otherwise.

Meanwhile, production from newly available shale oil and oil sands on private and state-owned land has been booming—more than enough to make up for the steep decline in production under federal leases. That boom, combined with slackened demand since the start of the recession, has reduced America’s dependence on foreign oil to about half its daily consumption of 20 million barrels per day, down from 60 percent in 2005.

In fact, the truth is much different than the Obama claim in which he attempts to take credit for today’s oil production:

Even in the few areas of the OCS that remain open, the administration is seeking to strangle production. As a result of the various deep-water drilling moratoriums, a third of the Gulf’s deep-water drilling rigs have left for other shores, dissuaded by the regulatory uncertainty. As a result of the shallow-water “permitorium” even shallow-water drilling has slowed to a crawl. According to the Department of Energy, oil production from the Gulf of Mexico will drop by 700,000 barrels per day by the end of 2012, which further decreases in ensuing years. And as for America’s working families, the combination of moratoriums and “permitorium” are estimated to have cost 60,000 thousand jobs in 2010 alone.

On federal lands the story has been the same. Just as technological breakthroughs have paved the way for tapping into the vast oil reserves of the Rocky Mountain states, the administration cut the number of new leases by 50 percent in 2010 alone.

Oil is not a “fuel of the past”.  Obama’s agenda actually demands we abandon it.  And he would in a New York minute if there wouldn’t be electoral consequences.     His administration’s track record concerning oil and gas exploitation as well as new regulatory regime the EPA is implementing and actions of Secretaries Chu and Salazar give lie to the claims made.

Oil and gas are, in fact, the critical fuels of the future.  It is and will remain the lifeblood of our economy for decades.  An administration that doesn’t realize that and works to curtail it deserves to be shown the door at the earliest possible opportunity.  If you think gas prices are high now, remember that without the increase in oil production on state and private land, it would be higher than it is now.

Unicorns and moon-ponies (or pond scum) won’t fuel the economy.  Oil will.  And an “all of the above” strategy should obviously include massive increases in oil production on federal lands.  Don’t let this guy get away with his false claims and destructive energy policy.  Help show him the door, November.

~McQ

Twitter: @McQandO

Observations: The QandO Podcast for 26 Feb 12

This week, Michael, and Dale talk about the president’s energy speech.

The direct link to the podcast can be found here.

Observations

As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2010, they can be accessed through the RSS Archive Feed.

Podcast for 10 May 09

In this podcast, Michael, and Dale discuss the county’s failing energy and economic policies.

The direct link to the podcast can be found here.

Observations

The intro and outro music is Vena Cava by 50 Foot Wave, and is available for free download here.

As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2007, they can be accessed through the RSS Archive Feed.