Category — Policy Issues

The Clinton Administration said back in 1999: “Biomass will be for the next century what petroleum was for this century.” [1] But with expensive experience with money and performance, we now know that U.S. EPA’s E-15 ethanol plan is bad for our pocketbooks, environment and energy policy.

The Obama Administration’s anti-hydrocarbon ideology and “renewable” energy mythology continues to subsidize crony capitalists and the politicians they help keep in office – on the backs of American taxpayers, ratepayers and motorists. The latest chapter in the sorry ethanol saga is a perfect example.

Bowing to pressure from ADM, Cargill, Growth Energy and other Big Ethanol lobbyists, Lisa Jackson’s Environmental Protection Agency has decided to allow ethanol manufacturers to register as suppliers of E15 gasoline. E15 contains 15% ethanol, rather than currently mandated 10% blends.

The next lobbying effort will focus on getting E15 registered as a fuel in individual states and persuading oil companies to offer it at service stations. But according to the Associated Press and Washington Post, Team Obama already plans to provide taxpayer-financed grants, loans and loan guarantees to “help station owners install 10,000 blender pumps over the next five years” and promote the use of biofuels.

Pummeled by Obama policies that have helped send regular gasoline prices skyrocketing from $1.85 a gallon when he took office to $4.00 today – many motorists will welcome any perceived “bargain gas.” E15 will likely reduce their obvious pump pain by several cents a gallon, thus persuading people to fill up their cars, trucks and maybe even boats, lawnmowers and other equipment with the new blends.

That would be a huge mistake. [Read more →]

“The authority of the President … to require acceptance and priority performance of contracts or orders (other than contracts of employment) to promote the national defense over performance of any other contracts or orders, and to allocate materials, services, and facilities as deemed necessary or appropriate to promote the national defense, is delegated to the following agency heads … [including] the Secretary of Energy with respect to all forms of energy.”

In preparing a list for MasterResource of federal energy policy reforms to free Alaska, and thus bolster America’s economy, I came across an Executive Order (E.O.) signed by the President last month with little or no fanfare. His new authority empowers him, in certain circumstances, to assume control over the energy industry—along with the rest of the economy.

Such executive branch power puts Congress and the courts in an inferior position. It also creates a new anti-production risk in addition to current federal policy regarding lease sales; ocean policy; ANWR; OCS; and arbitrary and capricious application of the Endangered Species, Clean Water and Clean Air acts.

‘National Defense Resources Preparedness’

How many of our readers knew that on March 16, 2012, one month ago, the President signed an Executive Order (E.O.)– giving himself access to dictatorial powers — under the guise of ‘national defense’ under authority of Defense Production Act of 1950. These powers will potentially control the means of production–including energy production.

We are suspicious of White House motives because if this E.O. were necessary and its objectives noble, we would have been treated to a transparent, presidential announcement and/or press conference. Pardon us for being suspicious as well of main stream media complicity, due to a deafening silence coming from the Fourth Estate. [Read more →]

“Entitlement debt is destroying our great nation. These kinds of taxpayer- and ratepayer-funded giveaways, imposed in the name of being ‘green,’ are simply not sustainable – especially if we want our children and grandchildren to live free and prosper.”

President Obama’s mantra du jour for his 2012 campaign speeches is “all-inclusive” energy. But any business touting this version of “all-inclusive” would be prosecuted for false advertising.

When the President says “all-inclusive,” he means politically correct (PC) “green” energy (wind, solar and bio-fuels), and nothing that actually provides reliable, affordable power – especially not hydrocarbons. Another PC buzzword – “sustainable” – is right out of the United Nation’s Agenda 21 Protocol and the President’s goal of “fundamentally transforming” America.

Increasing pain at the pump and the plug underscores the reality that Mr. Obama’s energy policies are anything but “all-inclusive,” and PC power is anything but sustainable – though they certainly are transforming our country. In fact, if the Keystone XL pipeline’s oil were used to generate electricity, it would provide more energy than all existing U.S. wind and solar installations combined. [Read more →]

“As long as I’m President, we’re going to keep on encouraging oil development and infrastructure, and we’re going to do it in a way that protects the health and safety of the American people. We don’t have to choose between one or the other, we can do both.”

Will Obama’s audacious oil play prove to be a Dukakis-in-a-tank moment, as his political opposition believes? Whether it is or not, the climate-alarmist Left is steamed. Why? Because the President’s paean to petroleum sets back the idea that big bad oil is on the way out. Game-set-match for the robust continuing carbon-based energy age.

We have come full circle from George W. Bush’s anti-oil moment in his 2006 State of the Union speech when he opined:

We have a serious problem. America is addicted to oil, which is often imported from unstable parts of the world.

Joe Romm, a perennially angry guy over at Climate Progress, is getting convoluted over the fracturing opposition to dense energy. His latest broadside, “Obama’s Worst Speech Ever: “We’ve Added Enough New Oil And Gas Pipeline To Encircle The Earth”, is reserved for his beloved President:

Obama will … be remembered for a ‘failed presidency‘ simply for failing to seriously fight for a climate bill. And this [Cushing] speech certainly guts any possible claim for a climate legacy.

Remember Albert Gore?

Al Gore as presidential candidate had his ‘Cushing moment’ back in 2000. He said:

I have made it clear in this campaign that I am not calling for any tax increase on gasoline, on oil, on natural gas, or anything else. I am calling for tax cuts to stimulate the production of new sources of domestic energy and new technologies to improve efficiency. [Read more →]

President Obama’s February 23 speech at the University of Miami supplemented his energy views in the State of the Union address and his 2013 Fiscal Year budget submitted to Congress. Playing defense in the face of high gasoline prices and an oil and gas boom not of his making, Obama’s pitch was long on misdirection and spin and short of true market-base reform.

Make no mistake: the President’s energy universe centers around curtailing the use of fossil fuels, in particular coal, due to fears that carbon dioxide (CO2) produced from combustion will cause catastrophic global warming.  This motivation will guide future energy policies until the Obama era is over.

The United States has the most abundant fossil fuel reserves in the world, the greatest agriculture system, and the most innovative population, all of which should ensure prosperity for centuries.  The question is: can market incentives unleash what Julian Simon called the ultimate resource to turn potential and opportunity into reality?

U.S. Resource Base

President Obama decried high gasoline prices and said his opponents will shout the 30-year old solution—”drill, drill, drill”—that has not worked. “Anyone who tells you we can drill our way out of this problem doesn’t know what they are talking about,’ he said. “The U. S. consumes more than a fifth of the world’s oil. But we only have 2% of the world’s oil reserves.”

President Obama could not be more wrong. [Read more →]

[Ed. note: Robert Peltier, editor of POWER magazine, has insightful commentary in his 'Speaking of Power' op-ed series. MasterResource reprints his op-ed below with permission.]

“What happens to the millions of used CFLs that are tossed out in the trash each year? Chances are a large percentage are broken by users at home or are broken when compressed in the trash truck or compacted in a landfill. Regardless, the mercury contained in the bulbs is released to the environment.”

“My research found, much to my surprise, that both emissions—from [power plant] stack gas or broken compact fluorescent lighbulbs (CFL)—produce about the same magnitude of mercury release.”

- Robert Peltier, “Battle of the Bulb,” POWER, February 2012, p. 6.

President George W. Bush signed the Energy Independence and Security Act of 2007 with the words: “New technologies will help usher in a better quality of life for our citizens.”

One stipulation of that law required an increase in the efficiency of newly manufactured lightbulbs, starting with 100-watt incandescent bulbs in 2012. Additional requirements affect 75-watt incandescent bulbs in 2013 and 60- and 40-watt incandescent bulbs in 2014.

The law did not ban the use of incandescent lights, as commonly believed, but it did prohibit the production or importation of bulbs that fail to meet the new efficiency standards after the cut-off date.

That law became effective January 1; however, the budget bill passed by Congress late last year does not allow the Department of Energy to enforce the lightbulb provision until September 30. The legislation that won overwhelming approval in 2007 has evolved into a cause célèbre this election year.

The real problem with this law, and the focus of the public’s ire, concerns the disposal cost of these new bulbs, not so much the efficiency standard per se. It is an environmental problem, in other words. [Read more →]

Last month, a group of 15 climate scientists (included the now disgraced Peter Gleick) sent a letter to Congress expressing their displeasure over the proposed Keystone XL Pipeline. President Obama has weighed in against approval, but Congress wants a green light to allow construction of the 1,700-mile, $7 billion project. Most recently, Bill Clinton weighed in for the pipeline, indicating just how deep the positives of the project are for the U.S. and world oil market.

So why are physical scientists getting political about a market-friendly pipeline to deliver oil from the Athabascan oil sands in Alberta, Canada, to various refinery locations in the Midwestern U.S. and ultimately the Gulf Coast?

The letter (reprinted at the end of this post) states that in addition to the local environmental impacts of oil sand mining (see here and here for a first-person account from Reason magazine’s Ron Bailey of the operation), burning such oil “on top of conventional fossil fuels will leave our children and grandchildren a climate system with consequences that are out of their control.”

The 15 climate scientists added:

When other huge oil fields or coal mines were opened in the past, we knew much less about the damage that the carbon they contained would do to the earth’s climate and its oceans. Now that we do know, it’s imperative that we move quickly to alternate forms of energy—and that we leave the tar sands in the ground.

What Is the Climate Impact of the Keystone XL Pipeline?

As a climate scientist myself, I can profess to knowing the same thing that the 15 signatories know about what the impact that carbon contained in fossil fuel reserves will have on the climate. And I can (as can they) calculate how much of an effect the Keystone XL pipeline will probably have on global temperatures. For some reason (hmm?) the 15 climate scientists chose not to include that information in their letter to Congress.

But here it is: The rise in global temperatures resulting from extracting and burning the oil delivered by Keystone XL at full capacity is about 0.0001°C/yr. [Read more →]

“[T]here is a second main factor that spawns new economic fallacies every day. This is the persistent tendency of men to see only the immediate effects of a given policy, or its effects only on a special group, and to neglect to inquire what the long-run effects of that policy will be not only on that special group but on all groups. It is the fallacy of overlooking secondary consequences.”

- Henry Hazlitt, Economics in One Lesson. quoted here.

At Cafe Hayek, economist Donald Boudreaux, Professor of Economics at George Mason University, wrote an open letter to Fox News host Bill O’Reilly’s opposition to exporting U.S. oil to other countries. O”Reilly has a populist streak, and he is prone to seeing the seen and not the unseen when it comes to economics, a sin indeed to economics as a science.

Professor Boudreaux is a master educator and prolific letter writer on behalf of common-sense economics. Read his explanation about why the namesake of the O’Reilly Factor 1) gets his economics wrong and 2) fails to see the implication of his own argument to himself as exporting his services

Dear Mr. O’Reilly:

You’re all lathered up because U.S. oil companies are exporting much of their refined gasoline and heating oil to other countries and thereby putting upward pressure on fuel prices here in America.  You conclude that these companies have a moral obligation not to export so much….

Economics

First some economics.  Selling in the global market encourages firms to build larger factories and refineries that, in turn, enable outputs to be produced at lower costs per unit.  So while in the short-run rising exports of oil products can cause fuel prices here to spike, the long-run effect might well be lower prices because of larger, more-efficient scales of operation.  [Read more →]

Today and tomorrow, the House Energy and Commerce Committee will mark up H.R. 3548, the “North American Energy Access Act,” Rep. Lee Terry’s (R-Neb.) bill to nullify President Obama’s rejection of the Keystone XL Pipeline. The bill requires the Federal Energy Regulatory Commission (FERC) to issue a permit for the pipeline within 30 days of receiving an application. If FERC fails to act on the application within the 30-day period, the bill deems the permit to have been granted.

Waxman and Markey: From Cap-and-Trade to Ban-the-Trade

Committee Democrats lack the votes to defeat the bill, but they hope to use the markup to turn the rhetorical tables on Republicans, who claim Keystone XL will enhance U.S. energy security by reducing our dependence on Middle East oil.

Reps. Henry Waxman (D-Calif.) and Ed Markey (D-Mass.) will offer an amendment barring exports from the USA of any Canadian oil shipped via the pipeline and requiring all petroleum products made from Keystone crude to be sold in U.S. domestic markets.

Waxman and Markey know full well that such restrictions would impair the profitability and competitiveness of U.S. refiners, potentially causing them to back out of the long-term sales contracts they negotiated with pipeline builder-operator TransCanada Corp. They know, in other words, that the amendment could scuttle the Keystone XL project and, therefore, that Republicans will vote against it.

But that’s the point. By forcing Republicans to vote no, Waxman and Markey hope to ”expose” Keystone XL as an “export pipeline” and, thus, supposedly, as an energy security “scam.” The question they’re likely to pose again and again: If you Republicans really believe the pipeline will reduce U.S. oil imports from unstable, undemocratic, or unfriendly countries, then why won’t you guarantee in law what you say is going to happen anyway? [Read more →]

Small business owners who depend upon the economy in the Gulf of Mexico are still victimized by the ripple effects of the moratorium Team Obama put into place after the BP oil well explosion in April 2010, documents Greater New Orleans, Inc. after surveying approximately 100 Louisiana-based companies directly involved in the offshore oil and gas industry, led by marine services and ship owners/operators.

The Impact of Decreased Drilling Permit Approvals on Gulf of Mexico Businesses found that 41% of businesses are not making a profit. Other statistics of decline:

* 76% have lost cash reserves

* 27% of businesses have lost more than half of their cash reserves

* 50% of businesses have laid off employees as a result of the moratoria

* 39% of businesses have retained workers but reduced salaries and/or hours

* 46% of businesses have moved all or some of their operations away from the Gulf of Mexico

82% of business owners have lost personal savings as a result of the permit slowdown

* 13% of business owners have lost all of their personal savings as a result of the slowdown

Even if the current administration’s anti-energy policies are reversed, this study demonstrates that there is an opportunity cost in terms of lost business that will never be recovered. As the Pelican Institute has previously reported, over 10 oil rigs have already left the Gulf and more could leave soon in the absence of a reasonable regulatory environment that allows for robust energy production on the part of those companies with a proven safety record.

Additional information was given in yesterday’s press release: [Read more →]