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Posts Tagged ‘Energy Policy’
November 15th, 2013 at 3:46 pm
Brace Yourself: Feds Take Sensible Step on Energy Policy
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It’s rare that we get anything other than green inanity in federal energy policy these days, which is why this news is so welcome. From Ben German at The Hill:

The Environmental Protection Agency (EPA) is cutting the amount of ethanol and other biofuels that must be blended into the nation’s fuel supply, a victory for oil companies that call the federal ethanol mandate unworkable.

On Friday, the EPA proposed draft 2014 blending volumes under the federal Renewable Fuel Standard that are lower than the 2013 requirements, and far less than called for in a 2007 law that expanded the mandate.

The EPA is proposing to require 15.21 billion gallons in 2014, down from 16.55 billion gallons in 2013, marking the first time the agency has lowered the target from the prior year.

A senior administration official said the Obama administration is firmly supportive of biofuels, but said  “market, infrastructure and other constraints” warrant paring back the mandate.

If you’re wondering when the hell the Obama Administration actually started worrying about the real-life effects of their policies, the answer is: when it put them at cross-purposes with a well-financed lobby. As the Wall Street Journal notes:

The EPA says it is trying to fix a problem known as the “blend wall,” which occurs when the annual requirement mandated by Congress exceeds the amount of ethanol that can be mixed into conventional blends of gasoline.

Oil companies and refiners have been warning of the blend wall for several years. If the EPA had stuck to Congress’s original target, refiners said they would have hit the blend wall in 2014 for the first time.

Which, of course, the ethanol lobby is using as an argument that this whole thing is one big gift from the government to “big oil.” That’s pretty rich coming from an industry that wouldn’t exist at any substantial scale without political collusion.

What’s the difference between ethanol and gasoline? You don’t need to pass laws to create a market for gasoline. The oil industry isn’t looking for special favors in this case; it’s looking from relief from a government-imposed drag on its business. The ethanol folks, meanwhile, are the ones trying to use state power to force people into buying their product. Which one sounds more corrupt to you?

As Drew noted earlier this week, ethanol is one big disaster. It doesn’t work in terms of economics, it doesn’t work in terms of energy, and it doesn’t work in terms of the environment. In a perfect world, we would’ve been able to abolish its mandate outright. In this flawed one, seeing it reduced at any level is a welcome change of pace.

July 24th, 2012 at 1:44 pm
The Reality of Obama’s ‘All of the Above’ Energy Strategy
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An instructive study in the contrast between the president’s rhetoric and results.

Rhetoric:

“We can’t have an energy strategy for the last century that traps us in the past. We need an energy strategy for the future – an all-of-the-above strategy for the 21st century that develops every source of American-made energy.” — President Obama, March 15, 2012

Results:

Pennsylvania’s PBS Coals Inc. and the affiliated RoxCoal Inc. announced that they would idle some of their deep and surface mines, laying off 225 employees in the process.

…  According to the Pittsburgh Post-Gazette, which first reported the layoff, the company employs 795 workers.

In Alledonia, Ohio, Murray Energy Corp. announced Friday it would lay off 29 union coal mining jobs at The Ohio Valley Coal Co.’s Powhatan No. 6 Mine.

“The failed energy policies of the Obama administration and the ‘war on coal’ that the president and his Democrat supporters have unleashed are the direct causes of this layoff,” said Powhatan mine general manager Ronald Koontz, according to The Wheeling Intelligencer. “Unfortunately, for us, this is just the beginning [of] the work force reductions.” — The Daily Caller, July 23, 2012

There comes a point at which the cognitive dissonance that underpins grandiose pronouncements with no relationship to reality simply make the speaker look buffoonish. Looking for that line, Mr. President? It’s behind you.



May 17th, 2012 at 3:41 pm
The Case for Green Jobs: America Should be More Like Bankrupt Countries
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At a time when Spain is in the news because it lingers on the edge of a full-blown economic meltdown, it’s instructive to remember that this is the country that’s supposed to be the model for the green jobs revolution that President Obama continually claims will help revitalize the American economy. Over at The Blaze, the American Enterprise Institute’s Kenneth Green looks at the factual case and finds it far from compelling:

Now, to the empirical evidence. When talking about our bold green energy future, President Obama held up Spain as an example of what America should be doing. Spain invested heavily in wind power and other types of renewable energy. Alas, after studying the Spanish Experience, Professor Gabriel Calzada Álvarez and colleagues at Spain’s Universidad Rey Juan Carlos found if America followed Spain’s example, for every renewable energy job that the U.S. managed to create, the U.S. should expect a loss of at least 2.2 traditional jobs on average. And they found that green jobs are costly: each green job created in Spain’s effort cost about $750,000, and only one in 10 of the new green jobs were permanent. Doing the math on that, creating even 3 million new green jobs would cost $2.25 trillion. Even in a time where the trillion is the new billion, that’s a lot of money.

Indeed it is. But the money isn’t the real issue. Any “jobs plan” that entails a net loss in jobs shouldn’t be taken seriously by anybody, let alone the President of the United States. If green jobs really are the future of the economy, then sufficient market demand will arise to compel their creation. If, as is far more likely, they are simply a progressive fantasy financed at taxpayer expense, they deserve to have their grip on the public purse shaken as abruptly as possible.

May 16th, 2012 at 12:48 pm
Forget Obama’s Energy Scarcity — More Oil in Three U.S. States than Rest of the World Combined
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President Obama’s views on energy have always been defined by a sense of false scarcity. This is the man, after all, who told Oregon voters in 2008, “We can’t drive our SUVs and eat as much as we want and keep our homes on 72 degrees at all times.”; who constantly invokes the fact that “the U.S. has only 2 percent of the world’s oil supplies” (an utterly misleading statistic that would be irrelevant even if it were literally true); who admitted to wanting the price of coal “to necessarily skyrocket”; and who hired an Energy Secretary who longs to see American gasoline prices reach the stratospheric levels of Europe.

Testifying before the House Science Subcommittee on Energy and Environment last week, Anu Mittal, Director of Natural Resources and Environment at the Government Accountability Office delivered some stunning news about the amount of oil shale available in the Mountain West.

Here’s how CNSNews reports the story:

“USGS estimates that the Green River Formation contains about 3 trillion barrels of oil, and about half of this may be recoverable, depending on available technology and economic conditions,” Mittal testified.

“The Rand Corporation, a nonprofit research organization, estimates that 30 to 60 percent of the oil shale in the Green River Formation can be recovered,” Mittal told the subcommittee. “At the midpoint of this estimate, almost half of the 3 trillion barrels of oil would be recoverable. This is an amount about equal to the entire world’s proven oil reserves.”

Read that again. If less than half of this oil shale is recoverable, it still represents an amount equal to that available in the rest of the world. By extrapolation, that means that as future extraction methods become more technologically sophisticated (and more economical) we could be talking about a grand haul equal to more than double current global reserves. And that’s only in Colorado, Utah, and Wyoming — not in the other 47 states.

There are huge policy implications here because of the simple fact that most of this shale occurs on federal lands. That means that getting this material out of the ground will require a proactive effort from government. The current President — who likes to boast about record oil production without noting that the vast majority of it is coming from private land — is not the person to kick start this new era of energy abundance. One more reason to send him packing in November.

April 5th, 2012 at 11:37 am
Nevada Green Energy Initiative Spends Over $400,000 to Save Less than $3,000
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Clean energy is the dream that refuses to die. From the Obama Administration on down, liberal politicians throughout the nation are constantly promising “green jobs” boomlets, acting as though the only thing standing between a better future where energy is both cleaner and more affordable is political will and obstructionist special interests. In reality, the real hurdle to achieving their dream is substantially higher: the economics just don’t work out. A recent initiative in Nevada shows the complete fiscal folly underpinning clean tech. From the Las Vegas Sun:

The electricity produced by NV Energy’s $46 million wind rebate program has fallen far short of expectations.

In a startling example, the city of Reno’s wind turbines — for which the city received more than $150,000 in rate-payer funded rebates — produced dramatically less electricity than the manufacturers of its turbines promised.

As first reported by the Reno Gazette-Journal, one turbine that cost the city $21,000 to install saved the city $4 on its energy bill. Overall, $416,000 worth of turbines have netted the city $2,800 in energy savings.

That means that the savings from the Nevada program have equaled only about 2/3 of 1% of the cost of installing the turbines. Remind me again, isn’t the oft-cited goal for this new era of technological progress to promote science and math?

March 5th, 2012 at 2:13 pm
The Obama Energy Famine, Continued
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In my column last week, I focused on how the Obama Administration’s energy policies harm the economy by subsidizing “clean fuels” that are not viable at market while handicapping the energy sources that actually work (and are affordable) in the here and now. An editorial in today’s Washington Examiner drives the point home:

The number of approvals for drilling in the Outer Continental Shelf in the Gulf of Mexico — which accounts for a third of all U.S. oil production — under Obama has plunged from more than seven per month to only three. Measured in terms of how long is required for the government to consider a permit application, the average for the five years before Obama was 60.6 days. The average is now almost 110 days, according to the Institute for Energy Research. Viewed in terms of the percentage of all permits sought that are approved, the five-year average before Obama was 73 percent. Today under Obama, it is 23 percent and falling. In other words, it is almost certain that the oil-drilling rig count will head back down in coming months, but it will be in response to government interference rather than as a result of price fluctuations. And the price of gas at the pump will continue to go higher.

Read that again. A 2/3 reduction in the number of permits issued and a doubling of the time it takes to get said permits. And the president really wants us to believe he doesn’t have any “silver bullets” for gas prices?

February 1st, 2012 at 5:44 pm
Who Killed the Electric Car? The People Who Made It
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Over at RealClearMarkets, the American Enterprise Institute’s Kenneth Green has a wonderful take-down of California’s delusional alternative energy mandate, which would “require that 15.4 percent of all vehicles sold by 2025 must be electric cars, plug-in hybrid cars, or (currently non-existent) fuel cell cars.” Green notes that this is the second time the Golden State has gone down this road, after a similar mandate — imposed back in 1990 — had to be scrapped due to its total infeasibility.

As you may recall, it used to be fashionable amongst conspiracy-minded greens to posit that the electric car had been undermined by some nefarious cabal of big oil, the auto industry, and hydrogen fuel cell advocates. They even made a film about it: 2006’s “Who Killed the Electric Car?”, which included the contributions of such noted experts in transportation economics as Martin Sheen, Mel Gibson, and Phyllis Diller. As Green points out, however, the electric car and its alternative fuel cousins have never taken the market by storm for a much simpler reason — they’re just not economically viable:

The GM Volt sells for a non-competitive $40,000, and is barely selling despite federal tax subsidies up to $7,500, and some state subsidies that further sweeten the pot. Plug-in hybrid technology is more expensive to manufacture, more expensive to repair, more expensive to insure, and, after 22 years, they still have overheating and fire problems.

As Robert Bryce points out in his book Power Hungry, electric cars are the “Next Big Thing. And they always will be.” Bryce observes that EV-boosters have been flogging electric cars since 1911, when the New York Times declared that “the electric car “has long been recognized as the ideal solution” because it “is cleaner and quieter” and “much more economical.”

Scan the hard data on any alternative energy source being promoted as a panacea and you’ll find much the same thing: Too little performance for too much money and too little convenience. And that’s the real tragedy of mandates like California’s or federal handouts to firms like Solyndra. The reality is that we probably will shift away from our reliance on conventional sources of energy like coal and oil in the future. But in order to do so, alternative energy sources will have to be scalable, affordable, and efficient. Providing subsidies for those technologies before they reach that point only delays their viability by reducing the financial incentive to get a better product to market.

The upshot? Reliable green energy may indeed be on the horizon for California. But if it does arrive, it will be because of the efforts of businessmen, not bureaucrats.