October 22, 2017

High Noon on Energy – Three new articles

Posted on 17. Jul, 2013 by Stephan Helgesen in Energy/Environment

Article I – Green energy’s exorbitant financial cost to the public: cut or “invest?”

On Wednesday, July 10, the House passed H.R. 2609—which Bloomberg News called a “$30.4 Billion Energy-Water Spending Measure.” The 2014 Energy-Water Development appropriations bill will cut spending on renewables and other green energy programs in half and was passed mostly along party lines—with 4 Republicans voting against and 7 Democrats for it.

Democrats offered amendments to the bill aimed at restoring funding to renewable energy programs, which failed. Republicans’ amendments focused on cuts: Rep. Tim Walberg of Michigan sponsored an amendment that would eliminate spending for a national media campaign promoting alternative energy, and Rep. John Fleming, M.D. of Louisiana sponsored an amendment to stop a $3.25 billion green energy loan program—both were approved.

While several of the different taxpayer funded green energy programs—which have produced more than 50 bankrupt, or near bankrupt, projects—have now expired, the Fleming amendment draws attention to a pot of money that is, currently, largely unspent.

Fleming describes this remaining boondoggle: “The Obama 2009 stimulus bill cost taxpayers about $830 billion, and much of it was wasted on growing government and administration giveaways, like a $3.25 billion loan program that put taxpayers on the hook for failed green energy projects. A company could take a government loan and walk away from a project without paying taxpayers back, even if the company remained in business. In a free market economy companies may turn to banks and investors to borrow money, but the government should not force taxpayers to be lenders, even as it gives borrowers a pass on paying back their loans.”

While Republicans realize the embarrassing failure of the green energy programs, Democrats want to keep spending—often in the face of opposition from their usual supporters. One of the most controversial commercial green energy projects, Cape Wind, provides a case in point.

Proposed in 2001 for Massachusetts’ Nantucket Sound, the Cape Wind project will span a highly-congested 25-mile area known for frequent fog and storms that is surrounded by shipping routes used by shipping operators, ferry lines, commercial fishermen, and recreational mariners. The Cape Wind industrial offshore wind energy project consists of 130 440-foot high, wind turbines (made in Germany) and nearly 100 miles of cable.

In 2010, the National Park Service deemed Nantucket Sound to be eligible for listing on the National Register of Historic Places as a Traditional Cultural Property (TCP) because of its cultural significance to the local Wampanoag tribes. (Note: a TCP designation successfully blocked uranium mining in New Mexico.) The Mashpee Wampanoag Tribe on Cape Cod and the Wampanoag Tribe of Gayhead/Aquinnah on Martha’s Vineyard believe that Cape Wind would not only desecrate sacred land, but also harm their traditional religious and cultural practices. In opposition to Cape Wind, the Wampanoag Tribe of Gayhead/Aquinnah currently has a lawsuit pending in U.S. District Court in DC.

Nantucket Sound is home to several species of endangered and protected birds and marine mammals and has been designated an Essential Fish Habitat. Cape Wind’s construction and operations would threaten this rich and fragile environment. Numerous environmental organizations, led by Public Employees for Environmental Responsibility, have a lawsuit pending for violations of the Endangered Species Act and the Migratory Bird Treaty Act.

Opposition to Cape Wind also comes from groups who side with jobs and economic development.

Commercial fishermen, who earn the majority of their income in the area of the proposed site, believe this project would displace commercial fishing and permanently threaten their livelihoods. They vehemently oppose Cape Wind.

A decline in tourism, according to the Beacon Hill Institute at Suffolk University, would lead to the loss of up to 2,500 jobs and property values would decline by $1.35 billion. Located in an area with more than 200 days of fog per year and quickly changing weather, Cape Wind would create significant navigational hazards for thousands of commercial and recreational vessels and pose an unacceptable risk to aviation safety. The local ferry lines, which transport more than three million passengers every year, have called the project “an accident waiting to happen.” All three local airports strongly oppose the project and have expressed safety concerns for the millions of passengers flying over the Sound each year.

The project would impose billions of dollars in additional electricity costs for businesses, households, and municipalities throughout Massachusetts. Dr. Jonathan Lesser, President of Continental Economics, calls Cape Wind a “poster child for green energy excess.” In a 2010 peer-reviewed paper, he stated: “the billions of dollars Massachusetts ratepayers will be forced to pay for the electricity it generates will not provide economic salvation but will simply hasten the exodus of business, industry, and jobs from the state.”

Despite widespread opposition, President Obama and Governor Patrick are closely allied and working together to push Cape Wind forward for political advantage. Audra Parker, President and Chief Executive Officer of the Alliance to Protect Nantucket Sound (APNS), says Cape Wind is “a project that is controversial, extremely expensive, and one that has been propelled forward by shortcuts, bending of rules, and political favoritism.”

Freedom of Information Act (FOIA) requests and House Oversight Committee research found significant coordination between the Patrick and Obama administrations through the Department of Interior to push Cape Wind forward and gain financial assistance for Cape Wind through the loan guarantee program.

For example, a June 24, 2011, email (acquired through APNS FOIA requests) describes a request by the White House to include Cape Wind in an economic briefing for the President on the loan guarantee program: “The WH was very direct about what should be included in the slides so we don’t have much flexibility.” The email specifically stated that the White House wanted: “1 slide on status of Cape Wind (because he [the President] has heard from Gov. Patrick a few times – they are close friends).”

In the months prior and after Cape Wind was notified that its application for section 1705 assistance was put on hold, there were numerous meetings and calls between MA state officials, including Governor Patrick, with senior officials at Department of Energy (DOE)and the Loan Guarantee Program, including the usual players: Jonathan Silver and Secretary Chu.

In April, US News addressed a new Government Accountability Office (GAO) report that points to federal subsidies for wind energy that are rife with wasteful spending: “The GAO report finds substantial overlap in federal wind initiatives. This duplication allows some applicants to receive multiple sources of financial support for deployment of a single project.”

Once again, the $2.6 billion Cape Wind construction is illustrative of how the overlaps can give the developer more in taxpayer-funded benefits than the project’s actual cost. Federal incentives, including a $780 million energy investment credit, a DOE loan guarantee, and accelerated depreciation could be more than $1.3 billion—or more than 50% of the project’s cost. But, this just represents the federal package. Add in state incentives and the combined total could be $4.3 billion—exceeding the projected cost by 167%. Cape Wind claims to create only 50 permanent jobs—which would equal a staggering $86 million per job.

But, it is not just the money—though in the current constrained fiscal environment, money is a huge consideration. Government agency recommendations and/or policy—including the Advisory Council for Historic Preservation, the Federal Aviation Administration (FAA), the Bureau of Ocean Energy Management, Regulation and Enforcement, and the US Fish and Wildlife Service—had to be overridden or overlooked to prevent “undue burden on the developer” that “could possibly bankrupt them.”

For example, a May 3, 2010, FAA PowerPoint presentation to Eastern Service Area Directors includes a slide titled “Political Implications” which states: “The Secretary of the Interior has approved this project. The Administration is under pressure to promote green energy production. It would be very difficult politically to refuse approval of this project.”

While this quick overview of the Cape Wind project barely touches the surface issues, it highlights the folly of allocating billions of dollars of state and federal money for green energy projects at the expense of the taxpayers. Any stimulus funds designated for green energy, but not yet “invested,” should be withdrawn; taxpayers should be taken off the hook—which is the goal of the Fleming amendment passed on July 10.

Too bad these specifics in the 2014 Energy-Water Development appropriations bill are little more than a representation of the different approaches of the parties: one wants to fund more green energy projects and the other wants to cut—which also reflects the division throughout America. Because our government is operating on one continuing resolution after another, the appropriations bill is a mere formality. As pointed out on June 25, at Georgetown University, President Obama intends to “invest in the clean-energy companies”—despite the exorbitant financial cost of the projects and economic damages they will cause the public.

Article II - The battle for economic and energy freedom

During the Fourth of July celebrations, you probably thought about the freedoms we enjoy in the USA. Perhaps you even pondered how those freedoms are slipping away right before your eyes. But, did you think about economic freedom? Did you think about energy freedom? They are all connected and are all important to America.

Economic freedom is described as “the key to greater opportunity and an improved quality of life. It’s the freedom to choose how to produce, sell, and use your own resources … While a simple concept, economic freedom is an engine that drives prosperity in the world and is the difference between why some societies thrive while others do not.”

America’s forests and the management, or mismanagement, of them provides an important example of “economic freedom”—especially the part about using resources. And, the spotted owl saga offers a case study of such mismanagement.

“It is hard to imagine a bigger failure—or a greater success—depending on which side of the issue you stand,” is how I start the “spotted owl” chapter in my book Energy Freedom. “If you strive for open and honest government policy that is straight-forward about its goals, this twenty-year experiment has failed. If you believe the end justifies the means, regardless of the cost in life or livelihood, then the spotted owl represents a great success.”

Twenty-three years ago, nearly to the day, the spotted owl was listed as an endangered species. Since then, environmental groups have used the designation to block logging—and other economic activity on federal lands. In 1989, logging on federal lands accounted for more than half of Oregon’s timber harvest. Since 2008, it has fallen to less than ten percent. The listing has shut down a substantial part of federal timber harvest and threatens logging on private lands.

In 1994, the Clinton Administration introduced the Northwest Forest Plan that was supposed to guarantee specific amounts of logging, but according to Jim Geisinger, executive vice president of the Associated Oregon Loggers, those numbers never materialized. The federal forests were left more vulnerable to catastrophic fires—which hurt the very trees that were supposed to be protected.

Last week, in his Climate Action Plan speech, President Obama wanted the American public to believe that the extreme fires we are facing—that just killed 19 firefighters in Arizona—are as a result of climate change. He stated: “Firefighters are braving longer wildfire seasons, and states and federal governments have to figure out how to budget for that. I had to sit in on a meeting with the Department of Interior and Agriculture and some of the rest of my team just to figure out how we’re going to pay for more and more expensive fire seasons.”

In fact, as Ann Forest Burns, vice president of the American Forest Resource Council, explains: “For every dollar invested in forest management—harvesting timber to put the forest on a sustainable basis for current and future generations—we save $1.46 in firefighting.” She told me that the American people would be appalled if they understood how the forests are managed. Instead of allowing the forests to make money through timber harvests, we are taking money away from forest management to fight fires.

The forest overgrowth exacerbates the problems of the naturally dry climate in the Southwest, which in turn adds to the fire dangers like a self-perpetuating cycle. The natural process is that rain falls on the forest. The water not used by the trees soaks into the underlying aquifer. Each tree soaks up hundreds of gallons of water a week. In arid climates, nature does not support many more than 50 trees per acre. In many parts of New Mexico, where several fires are currently burning, the forest now has up to 2,500 trees per acre—using up all the water resources. Because logging was stopped decades ago, the forest is packed with fuel, wildfires are sparked, and they quickly burn out of control.

The US Forest Service (USFS) needs to change its policy and start selectively harvesting trees—not clear cutting, but harvesting the way it’s been applied on New Mexico’s Mescalero Indian Reservation. The forest on the Mescalero land is a healthy forest. When a recent fire was raging across the Lincoln National Forest, it stopped completely and dropped down from the trees to become a very natural, and manageable, grass fire when it got to the forest the Mescalero tribe had treated.

A study from the USFS supports the Mescalero’s approach. Published in the Canadian Journal of Forest Research, the study found that thinning to 50-100 trees per acre—depending on the species, terrain and other factors—reduces the impact of catastrophic wildfires, helps protect communities, provides jobs, and promotes overall forest health. According to Burns, every million board feet harvested supports eleven direct forest industry jobs. Yet, environmentalists continue to block logging and the economic freedom it represents.

However, economic freedom was just handed a win from the courts.

On June 26, a federal district court in Washington, DC, smacked down the Bureau of Land Management (BLM) for failing to comply with timber harvest requirements. Under the BLM’s own resource management plan, the timber harvest for Oregon’s Medford and Roseburg districts should have been 57 and 45 million board feet, respectively. Instead, current harvest has been 19 million and 29 million. The court’s decision requires the BLM to increase the harvest by 38 million board feet in the Medford District and 16 million board feet for Roseburg—which equals the creation of 594 jobs.

A press release from the American Forest Resource Council says: “These harvest levels are just a small percentage of the annual growth volume of timber on these lands. The BLM lands in Western Oregon have 73 billion board feet of standing volume. These timberlands are capable of growing 1.2 billion board feet per year”—with the potential of creating more than 13,000 jobs.

These job growth numbers don’t really represent new jobs, as these are jobs that have been killed over the past 23 years as a result of forest management—presumably enacted to protect the spotted owl. Unfortunately, the court decision came too late to save the 85 jobs at Rough and Ready Lumber Company—one of the plaintiffs in the case. Rough and Ready closed its doors in May due to a lack of available timber from federal lands.

Environmental groups expect an appeal of the decision.

The USFS plan to manage for the spotted owl has threatened property rights, killed jobs, and increased the severity of wildfires—all while the spotted owl population has declined thanks to a bully: the barred owl.

Congressman Steve Pearce (NM-R) offers this summary: “Decades after hasty decisions on the Spotted Owl led to thousands of lost jobs, the Fish and Wildlife Service has admitted that they were wrong all along, and local governments and communities have slowly begun working to find ways to bring back jobs and restore devastated economies. Today, it is important to learn from this painful lesson, and not continue to make the same mistakes—decisions that affect our jobs, our communities, and the management of our land must be made carefully and with the voice of the people, not through rushed decisions handed down from bureaucrats in Washington.”

Had the freedom to choose how to produce, sell, and use resources been in play in the spotted owl story, it would have driven economic prosperity and the economic devastation wouldn’t have taken place—economic freedom.

But what about “energy freedom?”

History highlights energy’s importance in the role of freedom. In his book, The Color of Oil, international energy consultant, Michael Economides, states: “The search for natural resources and the coveting, or defending, of wealth is the clear connection that has most often precipitated war.”

Two examples of wars fought over access to energy supplies are found in World War II: Germany’s quest for Russia’s oil and gas and Japan’s for resources in Indochina. While the war is over, due to a lack of their own resources, both are still in a battle to supply their energy needs—which has also encouraged alternatives such as nuclear power and renewables.

During WWII, two days before Hitler invaded Russia in 1941, he proclaimed: “What one does not have, but needs, one must conquer.” Hitler’s prize was to be Russian oil and gas. He obviously knew what Henry Kissinger later stated: “Who controls the energy can control whole continents.”

Hitler was denied his prize and Russia still controls much of Europe’s energy: 36% of the EU’s total gas imports, 31% of the EU’s total crude oil imports, and 30% of the EU’s coal imports originate from Russia. More specifically, Germany is the EU’s second biggest natural gas consumer and Russia’s largest market—with almost 40% of its natural gas imports coming from Russia in 2011.

The Russian natural gas industry is one of the most important players in the global energy market and revenues generated by natural gas are vital to the ruling Russian elite. To date, Europe’s energy security is largely under Russian control—a situation the EU wants to change as dependence on Russian natural gas presents political risks. Russia has shown a willingness to cut off natural gas supplies as a tool to achieve its political objectives.

Remember, in January 2009, without warning, Russia cut off gas supplies to the EU and much of Eastern Europe suffered over the course of three weeks during a cold snap. European officials have become increasingly concerned about the potential for cutoffs or curtailments of Russian natural gas supplies to Europe.

Fears of Russian dominance have lead the EU to search for other options to break Putin’s grip on energy supplies: develop its own potential shale gas reserves through hydraulic fracturing, build pipelines to bypass Russia and bring in natural gas from Central Asia, and look to Liquefied Natural Gas from the US.

Unfortunately for Europe, before any drilling has taken place, public opinion has turned against hydraulic fracturing and several countries have moratoriums in place to prevent shale gas drilling. Russia has demonstrated a willingness to go to great lengths to maintain its hold on European market share of natural gas, including attempts to stymie European-backed alternatives. Many believe that Russia is funding Europe’s anti-fracking fomenting.

It is within this context that last week’s story about the “centerpiece of the European Union’s push to limit its reliance on Russian natural gas” that “came to an unsuccessful conclusion” should be of interest to Americans. The now-defeated Nabucco pipeline would have shipped gas from Azerbaijan (the target of Hitler’s efforts) to Europe and provided much needed diversification of energy sources. Europe lives with a vulnerability to Russian energy supply manipulation.

Why is this important to those of us in the USA? Because we don’t have to live with energy fears and vulnerabilities. We have the ability to produce, sell, and use our own resources, which could drive prosperity and allow the economy to thrive—energy freedom. Even President Obama, in his book, the Audacity of Hope, says: “A nation that can’t control its energy sources can’t control its future.”

America is fortunate. We have economic freedom. We have the ability to thrive due to energy freedom. But like so many of our other freedoms, these, too, are slipping away. Anti-fracking fomenting is threatening access to our abundant resources and Middle Eastern countries have demonstrated a willingness to go to great lengths to maintain control of the world’s oil supplies.

As our brave soldiers show us every day, freedom isn’t free—it is something that must be fought for. It is something worth fighting for. The battle includes economic freedom and energy freedom.

Article III – Obama’s Climate Action Plan: emphasizing what doesn’t work while ignoring what does

For months President Obama has been in the uncomfortable position of straddling a barbed-wire fence—does he appease his ardent environmental supporters or advocate for economic growth that will help all of America? In his speech outlining his Climate Action Plan, he made his choice clear. He’s abandoning what is best for America and has bowed to the political pressure from environmental lobbyists like the Sierra Club and the Natural Resources Defense Council.

White House Climate Advisor, Daniel P. Schrag told the New York Times: “Everybody is waiting for action, the one thing the president really needs to do now is to begin the process of shutting down the conventional coal plants. Politically, the White House is hesitant to say they’re having a war on coal. On the other hand, a war on coal is exactly what’s needed.” However, the American public is not clamoring for the closure of cost-effective coal-fueled power plants. What they want is cheap energy, but Obama is, as the Washington Post states: “a president bizarrely antagonistic toward domestic energy production and low energy prices.”

In the Pew Research Center’s annual policy priorities survey, just 28% say dealing with global warming is a top priority for the president and Congress this year. In fact, the president’s own research shows that his favorability rating “plummeted” with focus groups when he vowed to attack climate change—yet, promising to use executive action, he’s pushed forward with plans he knows couldn’t get through Congress.

Addressing the executive order emphasis, U.S. Chamber of Commerce President and CEO Thomas J. Donohue says: “It is unfortunate that on a matter of such importance to all Americans that the administration has chosen to bypass our elected representatives in favor of unilateral actions and go-it-alone tactics.”

The Washington Post explains why Obama is now seeking to go around Congress to enact anti-coal regulations by fiat: “When Democrats controlled both the House and Senate, Obama could not get climate control legislation passed.”

In his hit-and-run speech, delivered hours before leaving the country, President Obama issued a directive for the EPA, instructing them to begin drafting new rules governing emissions from power plants. Current EPA regulations are already closing coal-fueled power plants at an alarming rate—which New Mexico Public Regulations Commissioner Pat Lyons calls “the real energy crisis that no one is talking about.” He told me: “The biggest issue facing utilities is the closure of 300 coal-fueled power plants.

This represents tens of thousands of jobs in the coal mining industry and billions of dollars of revenues for local, state and federal government.” There are no plans to effectively replace the comparatively cheap electricity. Progressive thought leaders Michael Shellenberger and Ted Nordhous state: “energy poverty causes more harm to the poor than global warming” and cheap energy “makes the poor vastly less vulnerable to climate impacts.”

Europe has already tried this experiment and found it to be economically devastating. In April, the European Parliament voted against saving the Emissions Trading Scheme (ETS)—Europe’s flagship environmental program. Roger Helmer, a member of the European Parliament explained that propping up the ETS would “make energy more expensive; undermine European competitiveness even further; drive even more businesses and jobs and investments offshore (known in the jargon as ‘carbon leakage’); and force more households and pensioners into fuel poverty.”

Regarding the April 16 vote, The Financial Times reported: “Complaints from business groups that the carbon market and other climate policies are contributing to higher energy prices at a time when they are already grappling with a weak economy appeared to be decisive in Tuesday’s vote.” To meet its energy needs, Europe is now importing US Coal and North American wood.

Speaking of fuel poverty, nowhere are people living in more substandard conditions than Africa— plagued by malaria and inadequate medical care, most don’t have indoor plumbing and even fewer have electricity. Shellenberger and Nordhous accuse the environmental movement of offering “the global poor not what they want—cheap electricity—but more of what they don’t want, namely intermittent and expensive power” which “offers the poor no path to the kinds of high-energy lifestyles Western environmentalists take for granted.”

In response to the president’s Climate Action Plan, Senator Lisa Murkowski (AK-R) was talking about Obama’s African tour when she quipped: “I encourage him to note what life looks like in parts of the continent where people do not have—or cannot afford—access to energy.”

While shuttering coal-fueled power plants, the Climate Action Plan calls for more “clean energy” which will “cut our dependence on foreign oil.” He’s directing the Department of Interior to “green light” wind and solar projects on public lands and wants Congress to “invest in the clean-energy companies.” We’ve got two problems here.

First, wind and solar don’t cut our dependence of foreign oil. The two have no connection to one another. The wind and the sun can be harnessed and, as a result, do produce electricity—albeit inefficient, ineffective, and uneconomical electricity. Foreign oil that we import is for our transportation fleet. It does not, with very few exceptions, produce electricity.

Second, in Obama’s 2009 Stimulus Bill, he allocated nearly $100 billion for green energy projects that have produced an embarrassing number, more than 50, of bankruptcies and near bankruptcies—while lining the pockets of his friends and donors. He is obviously a slow learner. Dr. Phil might ask, “How’s that working for ya?”

In Tuesday’s speech, Obama did point to one success: “Since 2006, no country on Earth has reduced its total carbon pollution by as much as the United States of America.” The United States is the only industrialized country to actually lower carbon emissions. We’ve done it, not through extreme policies—but through private enterprise embracing our abundant natural gas. Encouraging extraction in the US and approving Liquefied Natural Gas export terminals would reduce global carbon emissions and help our economy.

“Rather than new federal regulations, he should be encouraging more natural gas development and approving Liquefied Natural Gas (LNG) export licenses,” states Kathleen Sgamma, Vice President of Government & Public Affairs for the Western Energy Alliance. “By exporting LNG, not only would America benefit from huge job growth, but we would be providing a low-carbon solution to other nations and helping them to likewise reduce their greenhouse gas emissions.

Germany and Japan have increased their use of coal because they lack access to affordable natural gas, and their carbon emissions have risen. By stubbornly repressing exports, the President is standing in the way of a global solution to a global problem.”

The fact that natural gas is only given cursory mention, rather than being an integral part of Obama’s National Climate Action Plan, exposes his true motives—which, I believe, are not really about carbon emission reductions, but rather furthering America’s declining international status. Why else would he emphasize what has proven to not to work and eschew what we know to be effective?

These articles were submitted by Marita Noon, the author of Energy Freedom. Noon serves as the executive director for Energy Makes America Great Inc. and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). Together they work to educate the public and influence policy makers regarding energy, its role in freedom, and the American way of life. Combining energy, news, politics, and, the environment through public events, speaking engagements, and media, the organizations’ combined efforts serve as America’s voice for energy.

 

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