Tuesday, December 25, 2007

It's an Al Gore Christmas: Congress hands out energy-loan guarantees

As is so often the case, close to Christmas, Congress this week skipped the formality of authorizing and appropriating separate spending bills and instead passed a monster omnibus spending bill. This year, however, there was one major difference: Congress approved a spending package that will effectively make the U.S. Treasury the bank of first resort for virtually any large commercial energy project that can claim to be "innovative" and "clean."

How? By granting nearly $38.5 billion in guaranteed federal loans for a variety of energy projects that no private bank would touch with a ten-foot pole (under the "Innovative Technology Loan Guarantee Program, described here, page 121) . Mind you, none of these efforts have anything to do with research and development. Instead, they are commercial ventures using technology that has already been proven but that are too uneconomic to secure private backing

What kind of projects are we talking about? Nuclear reactors, plants so expensive to build - Moody's estimates between at least $5 and $6 billion dollars each - that no private bank is willing to use their own money to finance them for fear that the operator will go bankrupt simply trying to pay the interest on the loan.. These plants are slated to get $18.5 billion in federal loan guarantees. Clean coal plant construction and conversion, meanwhile got $6 billion. Converting coal into fuels for trucks and cars, which could go bust if oil prices decline, is slated to get $2 billion in guaranteed loans and renewables, improved energy-efficiency projects, and distributed energy programs got another $10 billion collectively. Finally, another $2 billion went to the United States Enrichment Corporation (USEC) to finance a Department of Energy designed uranium-enrichment centrifuge plant that is so risky USEC was unable to get any private bank to back it.

What's the problem with guaranteeing such large loans to these commercial projects? First, the last time our government did this, during the Carter years, it picked a series of turkeys. Ten of the 14 coal gasification and ethanol projects it backed went bust. And one - the synfuels project - produced nothing and left U.S. taxpayers with a $13 billion hole in their pockets. Count on history rhyming. As the inspector general of the Department of Energy pointed out in his evaluation of the loan-guarantee program "This [program] will result in significant risk to the Government and, therefore the American Taxpayer." The Congressional Budget Office estimated that the odds of default on the proposed federal loans to be 50 percent.

Second, this is precisely the kind of corporate give away that would make Ronald Reagan turn over in his grave. He had the good sense to kill the synfuels project as a matter of principle: Government, he insisted, should not be in the business of backing commercialization projects. Research and development might make sense for the federal government to pursue if only because state-run utility commissions will not allow most utilities to invest much in such activities. But getting the government into picking commercial winners or losers is almost always bad business. When government picks a loser (and with the Department of Energy, it's a frequent occurrence), nobody pays or goes bankrupt but the U.S. taxpayer and then only after the government has kept the project alive years beyond when it should have been terminated.

More here

Comments On The Weblog By Andrew C. Revkin Entitled "Climate Consensus `Busted'?"

There is a weblog on the New York Times weblog Dot Earth on December 20, 2007 by Andrew C. Revkin entitled "Climate Consensus `Busted'?". Mr Revkin is a talented reporter, however, he clearly suspends his capabilities when he writes
"In science, what is more important than any individual study or collection of papers (particularly if assembled by someone with an agenda), is the trajectory of understanding. This is particularly true with a problem like the human-amplified greenhouse effect. Not only is it multidisciplinary; it is also not testable through experiments (we're all in the test tube undergoing a one-time experiment).

On the basics, the trajectory of understanding is clear and has been building for more than 100 years: more carbon dioxide (and other heat-trapping gases) = warmer world = less ice = higher seas (and lots of shifting climate patterns). A solid review can be found in the online hypertext edition of "The Discovery of Global Warming," a book by Spencer Weart of the American Institute of Physics.

At the same time, there are at least two areas of persistent, and legitimate, scientific debate left - more than enough to produce lists as long as the one published today by Senator Inhofe.

First, there is still a lot of uncertainty about the extent and pace of warming from a particular rise in concentrations of greenhouse gases, and about how fast and far seas will rise as a result. (It's important to keep in mind that uncertainty could result in outcomes being much worse than the midrange outcome, or much less severe). "

In making the claim that
"On the basics, the trajectory of understanding is clear."

he ignores a large number of studies without the appropriate investigation of the merits of that research. As a very clear example, he ignored the findings of the book

National Research Council, 2005: Radiative forcing of climate change: Expanding the concept and addressing uncertainties. Committee on Radiative Forcing Effects on Climate Change, Climate Research Committee, Board on Atmospheric Sciences and Climate, Division on Earth and Life Studies, The National Academies Press, Washington, D.C., 208 pp.

He has never reported on a key finding in the National Research Council report (on page 4) where it was concluded that
"..the traditional global mean TOA radiative forcing concept has some important limitations, which have come increasingly to light over the past decade. The concept is inadequate for some forcing agents, such as absorbing aerosols and land-use changes, that may have regional climate impacts much greater than would be predicted from TOA radiative forcing. Also, it diagnoses only one measure of climate change-global mean surface temperature response-while offering little information on regional climate change or precipitation. These limitations can be addressed by expanding the radiative forcing concept and through the introduction of additional forcing metrics. In particular, the concept needs to be extended to account for (1) the vertical structure of radiative forcing, (2) regional variability in radiative forcing, and (3) nonradiative forcing."

Moreover, Mr. Revkin's statement that
".. with a problem like the human-amplified greenhouse effect. Not only is it multidisciplinary; it is also not testable through experiments (we're all in the test tube undergoing a one-time experiment)"

shows a lack of understanding of the scientific method! If a hypothesis is not testable, it is not science! [actually, despite his claim, the multi-decadal global model projections, which are hypotheses, are testable, as discussed on Climate Science (e.g. see). There are numerous other examples on Climate Science which refutes the claim of Mr. Revkin that the science is settled (e.g. see our summary of papers in the book Human Impacts on Weather and Climate).

Unless he broadens his reporting on the role of humans in the climate system, readers should interpret his contributions in the New York Times as the biased presentation of climate science by an advocate who, by his incorrect reporting on the understanding of climate science, is limiting the consideration of policy actions which would most effectively deal with climate variability and change, energy, and other environmental and social issues. With his abilities as a writer and his wide influence, it is unfortunate that he has chosen to erroneously limit the information to the public and policymakers.



RSS MSU satellite data for the lower troposphere show that November 2007 was the coldest month since January 2000. Other major teams that measure the global mean temperature have not yet published their November data.

The temperature anomaly was -0.014 oC. It means that the whole month was actually cooler than the the average recorded November. It was the first month in this century that was cooler than average.

The previous record low temperature anomaly in this century occurred in July 2004 when the anomaly was +0.053 oC. In other words, the record low for this century was improved by 0.07 oC. The continuing La Nina is the main reason behind the recent cold months; La Nina is expected to disappear in Spring 2008. January 2000, a month that was even cooler than November 2007, witnessed a La Nina, too. November 2007 was also a whopping 0.915 oC colder than April 1998.

Another reason could be an inactive Sun. We are expecting the solar cycle 24 to begin soon but it takes a longer time than expected and there are still almost no sun spots. Via a crucial mechanism, it means that we should be getting more galactic cosmic rays that should create more clouds.

The year 2007 is now very likely to become RSS MSU's 9th warmest year on record which really means one of the coldest years of our times. It will end up colder than all other years in the 21st century so far as well as 1998 (by 0.4 oC) and 1995. We explained that 2006 was very cold but 2007 will be shown as 0.1 oC colder.

This extraordinarily cold conclusion of RSS MSU occurs partly (but certainly not completely) because RSS MSU omits the polar regions north of 82.5oN and south of 70.0oS latitude. The former region that occupies less than 0.5% of the surface of Earth was recently getting substantially warmer.

Other teams (HadCRUT3, UAH MSU) except for GISS will also report 2007 to be between the 6th and 9th warmest year. Dr James Hansen's GISS deviates substantially - it may even announce that 2007 was the warmest year - and their method to measure temperature based on stations is probably dominated by urban heat islands and the results are most likely complete rubbish.


God, I miss the Soviets

Post below lifted from Protein Wisdom. See the original for links

One thing about growing up during the Cold War, other than duck-and-cover drills, was having few illusions about the enemy, due in no small part their own honesty in declaring themselves as such. When Hollywood gave the villain a Russian accent, no Council on American-Soviet Relations was threatening lawsuits or boycotts.

The collapse of the USSR and the humiliation of communism in the face of liberty and capitalism didn't mean all those Marxist True Believers and camp followers gave up. It just meant they decided to pursue their interests in a different venue. Though, they seem to find being circumspect no longer necessary
The media obsession has been on the efforts of delegates at the U.N.'s Intergovernmental Panel on Climate Change conference to craft an agreement for a climate treaty that would take effect after the Kyoto Treaty expires in 2011. [.]

A day earlier, however, a panel at the IPCC conference titled "A Global CO2 Tax" took a step that will have a more lasting impact than an empty agreement. It urged the U.N. to adopt taxes on carbon dioxide emissions that would be "legally binding to all nations."

And guess who would be hit the hardest? That's right, the tax, if levied, would put an especially high burden on the U.S.
"Finally, someone will pay for these costs" related to global warming, Othmar Schwank, a global warming busybody from Switzerland, told Sen. James Inhofe's office. [.]

The driving force of the environmental movement is not a cleaner planet - or a world that doesn't get too hot, in the case of the global warming issue - but a leftist, egalitarian urge to redistribute wealth. A CO2 tax does this and more, choking economic growth in the U.S. and punishing Americans for being the voracious consumers that we are.

Eco-activists have been so successful in distracting the public from their real intentions that they're becoming less guarded in discussing their ultimate goal. "A climate change response must have at its heart a redistribution of wealth and resources," Emma Brindal, a "climate justice campaign coordinator" for Friends of the Earth Australia, wrote Wednesday on the Climate Action Network's blog.

We could easily dismiss li'l Miss Emma as a retread of the Castro/Che groupies of years gone by - emotionally invested in showing their solidarity with the exotic Other. Then there's Mayer Hillman, a senior fellow emeritus at the Policy Studies Institute, who makes no bones about controlling people's lives

Hillman, senior fellow emeritus at the Policy Studies Institute, says carbon rationing is the only way to ensure that the world avoids the worst effects of climate change. And he says that the problems caused by burning fossil fuels are so serious that governments might have to implement rationing against the will of the people.

"When the chips are down I think democracy is a less important goal than is the protection of the planet from the death of life, the end of life on it," he says. "This has got to be imposed on people whether they like it or not."

Scrape away some of the high-flown rhetoric of the acolytes of the Church of Anthropogenic Global warming and it is easy to see a coterie of fashionistas, retooled Marxists, doe-eyed relativists, unrepetant misanthropes and pragmatic authoritarians. Some wax poetically of "food sovereignty" and others are quite blatant in their hatred of modernity
Ultimately, the world's population must be reduced - by 5.9 billion. But the 100million left, devoid of cars, planes, heaters and fertilisers will be a much smaller burden on the planet. What a happy place it will be!

The "Greens" are no more interested in clean air and water today than the Soviets were in liberty when they rolled tanks into Prague in 1968. We dismiss them as "silly" at our own peril.

Leave Those Car Buyers Alone

Last week, environmentalists and the auto industry struck a deal to require new cars sold 13 years hence to average 35 miles per gallon; a 40-percent increase over the existing 27.5 mpg mandate. Hands were held, tears were shed, and "Kum-ba-ya" broke out all over Washington. As the president prepares to sign the energy bill passed yesterday by the House, Congress's 32-year-old fight over automotive fuel-economy standards is probably over ... for now. That's too bad, because while there are a number of parties claiming victory from this political peace treaty, consumers will almost certainly be the biggest losers.

Of the 1,153 passenger vehicle models on the road today, only two presently meet the proposed 35 mpg standard. According to a quick review of EPA data undertaken by Marlo Lewis at the Competitive Enterprise Institute, those cars are the Toyota Prius and the Honda Civic hybrid. Nine other vehicles, Lewis reports, get 35 mpg in city or highway driving conditions, but not both - and all of those vehicles are either subcompacts or compacts. Hence, the auto fleet is going to have to change - and change a lot - for new cars to average 35 mpg by 2020.

The industry has three routes it can go. First, it can lighten cars and thus improve mileage. Second, it can reengineer cars by reducing engine power and incorporating advanced technology to improve fuel efficiency. Third, it can simply stop making low-mileage cars and trucks or, alternatively, increase their prices so much that a substantial number of consumers opt for the fuel-efficient alternatives. Of course, mixing and matching is not only possible, but probable.

None of those options, however, represent a Christmas gift to car buyers. Reducing vehicle weight is the cheapest way to improve fuel efficiency, but that would increase highway deaths, just as it has done in the past according to a 2002 study by the National Academy of Sciences. Reengineering cars will reduce automotive performance in ways that car-buyers probably won't like while increasing automotive prices by as much as $3,500 a car according to the same NAS study. Cross-subsidies might be the most direct way to meet the standard, but that represents a rather steep tax on people with large families, big dogs, and those who for whatever reason need to haul around a lot of stuff - not to mention those who simply have a preference for zippy sports cars or riding high off the road.

So how does that square with claim that consumers win with more fuel-efficient cars? Well, if all other things were equal, they would. But all other things are not equal, and fuel-efficiency improvements involve trade-offs that consumers are demonstrably not wild about making. If they were, we wouldn't need a CAF_ law in the first place. The fleet would average 35 mpg now.

So why are we so determined to overrule consumer preferences? Three rationales are commonly offered.

First, we're sometimes told that consumers want super fuel-efficient cars but automakers stubbornly refuse to make them. But automakers and venture capitalists who might otherwise enter the auto industry would hardly be more ignorant than the casual observers at the Sierra Club and Rep. Nancy Pelosi's office about how much money they're leaving on the table. Suffice it to say that this argument seems unlikely, which suggests that consumers are indeed getting exactly the kind of cars that they want.

Second, it's often alleged that consumers are irrationally attracted to gas guzzlers and are acting against their own self interests when they buy SUVs and minivans. But there is little evidence for that proposition. A recent survey of consumer behavior by Clemson economist Molly Espey found that consumers valued energy efficiency appropriately from an economic perspective. That is, they spent more money on engines that saved fuel when the initial cost of the engine was more than offset by the fuel savings over the lifetime of the vehicle, controlling for other attributes of the vehicle.

But that's not good enough for many critics. They don't like the fact that many consumers seem to like other attributes - such as vehicle size and acceleration - that mitigate against fuel economy.

Third, we sometimes hear that a host of market failures is responsible for fuel prices being too low, which in turn produces suboptimal interest in energy conservation. In our own study earlier this year, however, we find very little support for this proposition. But if there were good evidence for the existence of market failures, the proper remedy would be a higher fuels tax that would let consumers make their own decisions about the tradeoffs between those higher prices and consumption. Higher fuel-efficiency standards, on the other hand, will reduce the marginal cost of driving and thus exacerbate problems like traffic.

For many, however, there is no such thing as too much energy conservation, and society always gains the less we consume. But if that were true, why not just ban cars from the road altogether? Few seriously entertain that idea, because we know intuitively that some amount of fuel consumption is worthwhile no matter how we feel about oil scarcity, energy independence, or the environment. How much is the "right" amount for society to consume? The aggregated preferences of consumers facing accurate fuel prices will deliver the right answer. Interfering with those aggregated preferences is guaranteed, however, to deliver the wrong one.



For more postings from me, see TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, POLITICAL CORRECTNESS WATCH, FOOD & HEALTH SKEPTIC, GUN WATCH, SOCIALIZED MEDICINE, AUSTRALIAN POLITICS, DISSECTING LEFTISM, IMMIGRATION WATCH INTERNATIONAL and EYE ON BRITAIN. My Home Pages are here or here or here. Email me (John Ray) here. For times when blogger.com is playing up, there are mirrors of this site here and here.


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