Sunday, January 18, 2015
Low Gas Prices Not an Argument for a Carbon Tax
Almost before consumers began to reap the benefits of lower gasoline prices after a decade of pain at the pump, climate humbugs and their political lackeys started hinting now would be a good time for carbon or gasoline taxes.
My response: There is never a good time for bad public policy!
Astute political observer Marlo Lewis of the Competitive Enterprise Institute explains the benefits of lower fuel prices and why carbon taxes are both unnecessary and harmful to people and the economy.
Fuel prices are down largely because of the fracking revolution. Prices are currently below $50.00 per barrel for the first time in six years, with gasoline selling for less than $2.20 a gallon, one-third below its price in January 2014. As to the benefits, Lewis reports:
"AAA: Americans saved $14 billion on gasoline in 2014 compared to 2013, with many drivers saving $15–$30 every time they fill up, compared to a year ago.
Bloomberg: “Plunging fuel prices will free up as much as $60 billion over the next year that the consumer can spend on a fall jacket, a movie ticket or just more groceries.” That was in October, when gas prices were still north of $3.00/gal.
WSJ: Falling gas prices will give consumers the equivalent of a $75 billion tax cut. The tax cut is progressive because low-income households pay a larger share of earnings on energy. “Households earning less than $50,000 annually spent around 21% of their after-tax income on energy in 2012, up from 12% in 2001, according to analysts at Bank of America Merrill Lynch.”
NPR: If current gas prices continue, the typical household will have an extra $1,500 to save or spend in 2015. Already, “The average American is seeing a much bigger boost from falling gas prices than from pay raises. Cheap energy could finally put the U.S. economic recovery over the top.”
Good news? Not for climate alarmists. Low gasoline prices are the goose that laid the golden egg for the economy, so naturally climate alarmists and their fellow travelers want to kill it.
In The Washington Post, Harvard economist Lawrence Summers argued, “Oil’s swoon creates the opening for a carbon tax.” What!!!???
Lewis points out companies mining, drilling, processing, refining, delivering, and using carbon-based energy already pay lots of taxes: “ExxonMobil, for example, paid $31 billion in corporate income taxes in 2012 and more than $1 trillion in total taxes during 1999–2011, paying $3 in taxes for every $1 in profits.” Those companies also pay tens of billions of dollars in backdoor taxes via their compliance with various regulations specific to energy exploration, production, and distribution.
The majority of these taxes and regulatory costs are passed on to consumers. Federal and state gasoline taxes alone account for 49.28¢ per gallon on average, equivalent to nearly $50 per ton of carbon dioxide (CO2) emissions. Taxes are a drag on the economy in two ways. First, by raising the cost of production, they reduce the capital available for productive activities – in general, as the cost of an activity rises, businesses (and people) do less of it. Second, these taxes leave less disposable income in consumers’ pockets – and when they spend less, the economy declines.
Even worse, low-income people and those on fixed incomes suffer most from energy price hikes, like those that would result from carbon taxes. They spend a greater share of their incomes on fuel, foods, and medicines – essentials made possible and accessible by energy – than do the relatively well-off. It’s almost funny – not in a “ha, ha” way – how regularly progressives propose policies that hurt the poor the most. With the way energy poverty is robbing the future of the poorest people in the world, we should be encouraging more oil and gas use, not less.
There is no good case for a carbon tax and Lewis sums up why:
American energy is not undertaxed or under-regulated.
Carbon taxes are regressive and would be piled on top of existing taxes and regulations rather than replace them.
Even a very aggressive carbon tax imposing trillion-dollar costs on the economy would have no discernible climate impact.
Consumers are finally getting a break from high gasoline prices. Having endured years of energy-price windfall losses, they should now be allowed to enjoy windfall gains.
I couldn’t have said it better myself.
Resist EPA’s ‘Clean Power Plan,’ Coalition Urges States
In the latest challenge to the Obama administration’s intensifying regulatory actions, a coalition of free-market and conservative organizations is calling on state governments to resist the Environmental Protection Agency’s Clean Power Plan.
In a December letter to state legislators, attorneys general, and governors, the coalition’s 37 organizations blasted EPA’s attempt to “coerce states into adopting expensive, destructive, and unlawful regulations, possibly including cap and trade, on greenhouse gas emissions—under the threat of even more draconian federal regulations.”
“When Congress enacted and amended the Clean Air Act, it did not authorize EPA to restructure state electricity policies,” the coalition wrote. “If at any time in the past six years, a senator or a congressman had introduced the CPP’s emissions-reduction requirements, the bill would have been dead on arrival.”
Among the organizations signing the letter are 60 Plus Association, American Energy Alliance, American Family Association, Committee for a Constructive Tomorrow, Competitive Enterprise Institute, Energy & Environment Legal Institute, Maryland Taxpayers Association, National Center for Public Policy Research, National Taxpayers Union, Rule of Law Institute, and The Heartland Institute, which publishes Environment & Climate News.
The letter points out the Obama administration was unable to get Congress to enact a cap-and-trade plan covering greenhouse-gas emissions. Absent legislation, the administration is seeking to curb greenhouse-gas emissions (referred to as “carbon pollution”) administratively by issuing new regulations under the Clean Air Act.
On June 2, 2014, EPA unveiled its Clean Power Plan (CPP). Under the CPP, the nation’s existing power plants are required to cut CO2 emissions by 30 percent from 2005 levels by 2030.
The CPP designates the states as the instrument to carry out EPA’s mandates, with the agency setting a CO2 emission target for each state. The states are then required to enact laws to meet the targets, subject to EPA approval.
To meet the targets, states may employ EPA-approved options such as: renewable energy mandates, increased energy efficiency standards for homes and appliances, and instituting carbon taxes or a cap-and-trade regime.
On its website, EPA justifies the CPP by claiming, “Our climate is changing, and we’re feeling the dangerous and costly effects right now.” The agency goes on to assert average temperatures “have risen in most states since 1901” and climate and weather disasters in 2012 “cost the American economy more than $100 billion.”
EPA’s Authority Questioned
Calling EPA’s move “an affront to both federalism and the separation of powers,” the coalition letter says the CPP “is unlawful and almost certain to be overturned” by the courts.
The letter continues, “EPA stretches the pertinent statutory authority, section 111 (d) of the Clean Air Act, beyond all recognition. This obscure, seldom-used provision was designed to set technology-based emissions standards for ’particular sources,’ aptly defined as ‘designated facilities’ in EPA’s 1974-1975 implementing regulations. In the CPP, EPA illicitly treats the entire electric power sector of a state as a ‘particular source’ and illicitly sets emissions standards based not on technologies specific to coal power plants but on the agency’s wish list for ‘green power’ policies.”
The fate of the CPP is uncertain, as the rule will likely be challenged in court, a process that can drag on for as much as two years. Furthermore, the new, Republican-controlled 114th Congress may attempt to block the regulation.
Jay Lehr, science director of The Heartland Institute, said, “The Obama effort to end coal energy in our country is an egregious attempt by his administration to make him a messiah to the greens. It sits on a crumbling foundation of falsehoods. First, that carbon dioxide is causing the planet to warm, which cannot be true as the temperature has been stable for 18 years while CO2 has continued to increase. Second, that CO2 is a pollutant, when we know life would not exist without it.
“There is no case of administrative overreach more deserving of resistance than this one.”
UK: The Greens are pro-immigration? Pull the other one
In recent times, it has been the Labour Party that has presented itself as the champion of immigrants in the UK. Of course, there was always very little truth in Labour’s pro-immigration posturing, but now even it has given up trying to pretend it wants any more foreigners coming to the UK. So is there any party in British politics that is pro-immigration?
The Green Party certainly claims to be. It says that it is the only party that truly stands up for the interests of immigrants. In 2014, Green Party leader Natalie Bennett said she wanted to stop the ‘race to the bottom’ in the immigration debate, as the main parties vied with each other to see who could out-UKIP UKIP in the anti-immigration stakes. On International Migrants’ Day last month, the Green Party tweeted ‘Today is #InternationalMigrantsDay. But we stand up for migrants’ rights every day.’ An attached graphic read: ‘Wherever you hail from, you have a home in the Green party.’ So are the Greens really pro-immigration? Well, if their immigration policy document is any indication, no, not really.
The Green Party has pledged to liberalise some of the more draconian aspects of immigration policy, from scrapping arbitrary caps on immigration to declaring an amnesty for those who have lived in the UK illegally for more than five years (presumably those here illegally for less than five years would still be booted out).
Yet the Green Party is ultimately still in favour of immigration controls. It is just that, unlike the other main parties, it is very vague as to what those controls should be. Indeed, I asked the Greens’ spokespeople who exactly they would turn away from the UK, but didn’t receive a satisfactory answer. They just insisted that there was a recognition that ‘immigration controls were needed’. Whether this vagueness is deliberate or because the Greens just haven’t thought that far ahead is unclear, but, whatever the reason, their need to put major restrictions on the number of people entering the UK is inevitable.
In recent years, the Green Party has done its best to distance itself from its Malthusian, pro-population-control roots, claiming that the UK’s problems are problems of overconsumption not overpopulation. Until 2003, it was still saying that the UK was suffering from overpopulation problems and that we had to make sure we didn’t exceed our natural ‘carrying capacity’. The Green Party has since stopped using such arguments, perhaps because the British National Party adopted near identical language in order to claim the UK needed to deport all immigrants to make room for Proper Brits. However, no matter how much the Greens try to distance themselves from the stigma attached to Malthusianism, there is no escaping the fact that arguments about consumption and population are inextricably linked. If you believe that all of the UK’s resources are finite, and that we must all temper our consumption to live within those limits (as the Greens do), then having to deal with more people is obviously going to be seen as a problem.
That is why the Greens Party can never be pro-immigration, let alone in favour of open borders and true freedom of movement for all. In fact, the Greens’ ideology is completely at odds with the idea of allowing people to come freely to the UK. Their view of our resources as being finite, the idea that there is just one big pie we must all share, means that more people coming to live in the UK would mean less pie for each of us already living here. This would make the Greens’ strange claim that they will be able to improve people’s living standards while simultaneously striving to have ‘zero or negative growth’ even more absurd than it already is. For a party obsessed with the idea of sustainability, allowing people to just come in and consume is about as unsustainable as it gets.
Central to Green ideology is an aversion to growth, both economic and infrastructural. The arrival of large numbers of migrants to the UK both causes and necessitates growth. Not only do more people require more schools and hospitals; they will also require other things Greens despise, like more houses, roads and lots more energy production. In reality, of course, such growth is nothing to be feared. In fact, it improves things for everyone. But Greens are terrified of growth, because growth goes hand in hand with the expansion of the dreaded ‘human footprint’. The Green Party can continue claiming to be a champion of immigration because it hasn’t told anyone how many people it intends to let in and how many it intends to kick out. At least the likes of UKIP aren’t afraid to tell the public what they really think.
The Keystone Catechism
Not since the multiplication of the loaves and fishes near the Sea of Galilee has there been creativity as miraculous as that of the Keystone XL pipeline. It has not yet been built but already is perhaps the most constructive infrastructure project since the Interstate Highway System. It has accomplished an astonishing trifecta:
It has made mincemeat of Barack Obama’s pose of thoughtfulness. It has demonstrated that he lacks even a rudimentary understanding of the most basic economic realities. It has dramatized environmentalism’s descent into infantilism.
Obama entered the presidency trailing clouds of intellectual self-regard. His carefully cultivated persona was of a uniquely thoughtful, judicious, deliberative, evidence-driven man comfortable with complexity. The protracted consideration of Keystone supposedly displayed these virtues. Now, however, it is clear that his mind has always been as closed as an unshucked oyster.
America built the Empire State Building, then the world’s tallest office building, in 410 days during the Depression. We built the Pentagon, still the world’s largest low-rise office building, in 16 months while waging a war across two oceans. Keystone has been studied for more than six years. And Obama considers this insufficient?
Actually, there no longer is any reason to think he has ever reasoned about this. He said he would not make up his mind until the Nebraska court ruled. It ruled to permit construction, so he promptly vowed to veto authorization of construction.
The more he has talked about Keystone, the less economic understanding he has demonstrated. On Nov. 14, he said Keystone is merely about “providing the ability of Canada to pump their oil, send it through our land, down to the Gulf, where it will be sold everywhere else. That doesn’t have an impact on U.S. gas prices.” By Dec. 19, someone with remarkable patience had explained to him that there is a world market price for oil, so he said, correctly, that Keystone would have a “nominal” impact on oil prices, but then went on to disparage job creation by Keystone. He said it would create “a couple thousand” jobs (the State Department study says approximately 42,100 “direct, indirect, and induced”) and said, unintelligibly, “those are temporary jobs until the construction actually happens.” Well.
Obama revealed his economic sophistication years ago when he said that ATMs and airport ticket kiosks cost jobs. He does not understand that, outside of government, which is all that he knows or respects, all jobs are “temporary.”
John Tamny, editor of RealClearMarkets and an editor of Forbes, notes that Borders had 10,700 employees and 399 bookstores until it had none of either, thanks in part to Amazon, whose 150,000 employees have probably participated in enough creative destruction to know that permanence is a chimera. Blockbuster – remember that? remember late fees? – had 60,000 employees and more than 9,000 stores until rivals such as Netflix appeared.
To oppose the pipeline is to favor more oil being transported by trains, which have significant carbon footprints, and accidents. To do this in the name of environmental fastidiousness is hilarious. America has more than 2 million miles of natural gas pipelines and approximately 175,000 miles of pipelines carrying hazardous liquids, yet we are exhorted to be frightened about 1,179 miles of Keystone?
Or about the oil itself? Appearing on “Fox News Sunday,” Sen. Chris Coons, D-Del., objected that if Congress authorizes construction of Keystone this “would take consideration out of the hands of the administration,” and “out of the current administration process.”
Leave aside the question of how much of this process-that-proceeds-nowhere Coons considers enough. And ignore the peculiarity of a legislator dismayed that the legislative branch might actually set national policy. But note the following, not because Coons is eccentric but because he is representative of Democratic reasoning: “Keystone means unlocking the Canadian tar sands, some of the dirtiest sources of energy on the planet and allowing those tar sands to go across our American Midwest and then reach the international economy and our environment.”
No jury would convict Coons of sincerity. Anyone intelligent enough to express that nonsense is too intelligent to believe it. Coons cannot believe that, absent Keystone, Canada will leave vast wealth – the world’s third-largest proven crude oil reserve, larger than Iran’s – untapped. The Canadian oil is going into the international market, and much of it into internal combustion engines around the world, even if this displeases Democratic senators who have demonstrated a willingness to look ludicrous rather than deviate from an especially silly component of today’s environmental catechism.
Obama to Further Tighten the Noose on 'Big Awl'
I am guessing you don't know one of the major things President Obama was doing while snubbing France and world leaders who convened in Paris to express solidarity in the civilized world's war against radical Islamic terrorism.
I assure you it was something close to his heart — as opposed to fighting Islamic jihad. It was something that will thrill the anti-business, anti-energy extreme environmentalists but will not warm the hearts of American businesses and energy producers, and it is not good news for America's currently overhyped economy.
Yes, you heard me right; despite all the faux euphoria projected by the administration and the media, this economy is not bouncing back. According to Gallup CEO Jim Clifton, for the first time in 35 years, the United States is no longer first but 12th (12th!) among developed nations in business startup activity. More businesses are closing than opening. Four hundred thousand businesses are being born each year in America, but some 470,000 are closing. That's because America, under this president, is a business-hostile zone.
What is President Obama planning on doing about this disturbing problem? Two things. First, he will deny the problem even exists as he continues to fraudulently proclaim that America's businesses are smoking-hot. Second, he will exacerbate the problem with yet new business-killing, energy-killing lawless executive regulations honoring earth goddess Gaia with an involuntary sacrificial offering from the American energy industry. His regulations will dramatically cut methane emissions over the next decade.
Based on his record in office and his continuing with these new regulations, it's hard to tell whether he's more motivated by his allegiance to environmental cultism or a visceral aversion to business. Or perhaps those interests are so interlocked that we needn't quibble over which is dominant on Obama's priority list.
Obama's fellow pseudo-scientists, convinced that methane — the primary component of natural gas — traps heat in the atmosphere even more than carbon dioxide, are determined to target it to prevent global warming, I mean climate change. The regulations will require the oil and gas industry (which leftist enviro-wackos regard as double evil because they are both "big awl" and "big bidness") to cut methane emissions by between 40 and 45 percent by 2025.
But not to worry; the implementation and monitoring of these draconian regulations will be quarterbacked by the power-mad, self-righteous and unaccountable Environmental Protection Agency. What could go wrong?
What the administration isn't telling us is that regardless of how efficient methane is at trapping heat in the atmosphere, there is far less of it in the atmosphere than the evil, dreaded carbon dioxide. What the administration also forgets to emphasize, though it is on record acknowledging it, is that methane admissions have already been reduced by more than 16 percent since 1990, even though natural gas production has risen by 37 percent during that time period. One might think that a priorities-balanced administration would be a bit more concerned with the current rise of Islamic jihad than with the significant and demonstrable decline of methane emissions, but here I go digressing again.
Thomas Pyle, president of the Institute for Energy Research, said: "EPA's proposed methane regulation is redundant, costly and unnecessary. Energy producers are already reducing methane emissions because methane is a valuable commodity. It would be like issuing regulations forcing ice cream makers to spill less ice cream."
Rep. Fred Upton, R-Mich., chairman of the House Energy and Commerce Committee, and Rep. Ed Whitfield, R-Ky., chairman of the Subcommittee on Energy and Power, were more pointed in their criticism. "Studies show that while our energy production has significantly increased, methane emissions have continued to decline," they said in a statement. "This is something that should be celebrated, not bound by new red tape. Our success has been — and should continue to be — rooted in new efficiencies created through technology and innovation, a commitment to continued safety enhancements, and greater permitting certainty."
American Petroleum Institute CEO Jack Gerard noted that these new regulations threaten to shut down energy development by raising costs on producers.
You would think that a president who is always urging others to compromise and work together might at least pretend to be conciliatory on these energy issues, especially after he has been so duplicitously destructive in opposing the Keystone XL oil pipeline. But you would be wrong. It's as if Obama rejoices in provoking the newly elected Republican congressional majority.
Instead of trying to justify why these new regulations are even needed — and in any event how they could be needed urgently enough to justify the damage they will do to the energy industry and the economy — the White House simply expects us to accept its "Twilight Zone" version of reality. Actually, according to the administration, these new regulations will benefit the economy.
Isn't it wonderful to have a pro-business president who is staying so focused on the rising global threat of radical jihad?
The EPA's Methane Madness
The EPA thinks cow flatulence is a serious problem
By Alan Caruba
The Obama administration’s attack on America’s energy sector is insane. They might as well tell us what to eat. Oh, wait, Michelle Obama is doing that. Or that the Islamic State is not Islamic. Oh, wait, Barack Obama said that.
Or that the Environmental Protection Agency (EPA) is about protecting the environment. It used to be decades ago, but not these days.
There was a time when the EPA was devoted to cleaning up the nation’s air and water. It did a very good job and we now all breathe cleaner air and have cleaner water. At some point, though, it went from a science-based government agency to one for which science is whatever they say it is and its agenda is the single minded reduction of all sources of energy, coal, oil and natural gas, by telling huge lies, citing junk science, and generating a torrent of regulation.
Americans have been so blitzed with global warming and climate change propaganda for so long one can understand why many just assume that these pose a hazard even though there hasn’t been any warming for 19 years and climate change is something that has been going on for 4.5 billion years. When the EPA says that it’s protecting everyone’s health, one can understand why that is an assumption many automatically accept.
The problem is that the so-called “science” behind virtually all of the EPA pronouncements and regulations cannot even be accessed by the public that paid for it. The problem is so bad that, in November 2014, Rep. David Schweikert (R-AZ) introduced a bill, HR 4012, the Secret Science Reform Act, to address it. It would force the EPA to disclose all scientific and technical information before proposing or finalizing any regulation.
As often as not, those conducting taxpayer funded science studies refuse to release the raw data they obtained and the methods they used to interpret it. Moreover, agency “science” isn’t always about empirical data collection, but as Ron Arnold of the Center for the Defense of Free Enterprise, noted in 2013, it is “a ‘literature search’ with researchers in a library selecting papers and reports by others that merely summarize results and give opinions of the actual scientists. These agency researchers never even see the underlying data, much less collect it in the field.”
The syndicated columnist, Larry Bell, recently noted that “Such misleading and downright deceptive practices openly violate the Information Quality Act, Executive Order 12688, and related Office of Management and Budget guidelines requiring that regulatory agencies provide for full, independent, peer review of all ‘influential scientific information.’” It isn’t that there are laws to protect us from the use of junk science. It’s more like they are not enforced.
These days the EPA is on a tear to regulate mercury and methane. It claims that its mercury air and toxics rule would produce $53 billion to $140 billion in annual health and environmental benefits. That is so absurd it defies the imagination. It is based on the EPA’s estimated benefits from reducing particulates that are—wait for it—already covered by existing regulations!
Regarding the methane reduction crusade the EPA has launched, Thomas Pyle, president of the Institute for Energy Research, says “EPA’s methane regulation is redundant, costly, and unnecessary. Energy producers are already reducing methane emissions because methane is a valuable commodity. It would be like issuing regulations forcing ice cream makers to spill less ice cream.”
“The Obama administration’s latest attack on American energy,” said Pyle, “reaffirms that their agenda is not about the climate at all—it’s about driving up the cost of producing and using natural gas, oil, and coal in America. The proof is the EPA’s own research on methane which shows that this rule will have no discernible impact on the climate.”
S. Fred Singer, founder and Director of the Science and Environmental Policy Project as well as a Senior Fellow with The Heartland Institute says “Contrary to radical environmentalists’ claims, methane is NOT an important greenhouse gas; it has a totally negligible impact on climate. Attempts to control methane emissions make little sense. A Heartland colleague, Research Fellow H. Sterling Burnett, says “Obama is again avoiding Congress, relying on regulations to effectively create new laws he couldn’t legally pass.”
As Larry Bell noted, even by the EPA’s own calculations and estimates, the methane emissions limits, along with other limits on so called greenhouse gases “will prevent less than two-hundredths of a degree Celsius of warming by the end of this century.”
That’s a high price to pay for the loss of countless plants that generate the electricity on which the entire nation depends for its existence. That is where the EPA is taking us.
Nothing the government does can have any effect on the climate. You don’t need a PhD in meteorology or climatology to know that.
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Posted by JR at 1:37 AM