Environmentalists Admit They Were Wrong
John Droz, jr., physicist
In an amazing admission, environmentalists are now acknowledging that they were wrong to have promoted biofuels! This came about due to the overwhelming evidence that biofuels are a NET environmental liability.
Of course biofuels were a bad choice all along, so why did we waste enormous amounts of time and money going down this dead-end road?
The answer is obvious: this was a self-serving lobbyist idea. Essentially every time we have lobbyist-written energy and environmental policies the results have been:
1 - objectives that are not met,
2 - costs that are much higher than projected, and
3 - numerous unintended adverse consequences.
The solution is simple: we should have Science-based energy and environmental policies.
When will we learn?
I fully expect that in the not-too-distant future that environmentalists will make a similar begrudging concession about industrial wind energy.
The indisputable fact is that no scientific assessment has concluded that wind energy is a Net Societal Benefit — because it’s not.
Lobbyists (e.g. AWEA) have become skilled at deceiving the public about Science — because they know that a scientific endorsement of their product is effectively an imprimatur.
In their aggressive campaign to undermine genuine Science, they have successfully recruited some sympathetic, susceptible scientists to be their allies in presenting fake science. It’s a sad story.
Once we’re clear about what genuine Science is (a process), it will be much harder for the con artists to fool us into thinking that biofuels, wind energy, etc. are sensible energy options.
Polar bears going great guns this year. Whales too!
Report from Northern Canada
This has without a doubt been Churchill Wild’s most spectacular start to the summer polar bear watching season. The mom and COYs (Cubs of the Year) shown above strolled past Seal River Heritage Lodge for a little pre-breakfast show this morning.
Bear numbers are up spectacularly this year and all are looking very fat and healthy, perhaps much to the chagrin of climate change “experts.” Our best day for the seductive white carnivores over the past week featured 21 polar bears sighted between the Lodge and our whale swim spot!
At any time you can glass in almost all directions from the new lounge windows and spot a polar bear lounging on the tundra or moving through the tidal flats. The ice pack, which was still visible a week ago, has finally dissipated and pushed a large number of bears on to our coastline here at Seal River, with the end result being many very happy cameras!
Beluga whales are back in great numbers and doing their best to adopt the humans we keep launching off the back of the Zodiacs, but to date all guests have elected to return to their own kind.
This fantastic inter-species interaction is a real highlight once again and there have been many song interchanges between snorkelers and belugas, though some folks might want to hang on to their day jobs if considering a career in music. The whales however, don’t seem to mind what key or half-key the voices come in, and joyfully chatter back and forth with the singing humans.
All in all, a great start, and much more to come!
Obama Announces New Executive Action to Prevent Economic Growth
If you thought the Keystone Pipeline permitting farce was bad, you ain’t seen nothing yet. On Tuesday, the Obama administration announced new regulatory guidance which will inject the same ignorant obsessions of so-called climate change activists into the permitting process of the entire federal government. This action means that bureaucrats and their radical environmentalist allies will now be able to take the same tactics of death-by-permitting-delay seen in the case of Keystone and apply them to every other project affected by the federal National Environmental Policy Act. This means roads, bridges, mines, housing developments, pipelines, and more will now be held hostage to that tiny minority of Americans who would like nothing more than to return this country to the Stone Age.
Anyone who has ever been involved with a project which involved the federal government in any way will already be familiar with the often tortuously long permitting process required by the National Environmental Policy Act (NEPA). NEPA requires that federal agencies consider the environmental impact of any major project—federal, state, or local—that involves federal funding, work performed by the federal government, or permits issued by a federal agency. While certainly well-intentioned when passed in 1969, in recent decades NEPA has become notorious for being abused by anti-development NIMBYs (not-in-my-backyard) and radical environmentalists in their efforts to delay or stop projects of all sorts.
Given the pervasive size of the modern federal government the reach of NEPA is incredibly broad, which allows pressure groups to target almost any project they disapprove of. These tactics mean increased costs and long delays, sometimes to the point of forcing the abandonment of projects. If you have ever wondered why it takes so long for that new highway to be built or upgraded, then NEPA is probably your culprit.
Besides the time delays and cost increases, NEPA delays or denials have a huge economic cost. For example, in 2011 the Chamber of Commerce performed a study just covering energy projects that were held up by NEPA and found trillions of dollars in forgone economic growth and millions of jobs left on the table. And that is just energy; it does not include all the other projects subject to NEPA such as roads, bridges, dams, mines, or buildings.
In short, the broken NEPA process is already a massive brake on economic growth in the United States. And the Obama administration just made it worse. The new guidance will require that the NEPA process now includes considerations of “climate change” impacts. As a coalition including FreedomWorks commented earlier this year on the draft of this guidance: including climate change will only serve to politicize NEPA decisions, not improve agency decisions. Indeed, the impact on global greenhouse gases of individual projects is frankly not quantifiable. Any one project, no matter how large, is infinitesimally small in the context of global climate even if you accept the most apocalyptic logic of climate change alarmists.
And just as if this irrational and economically destructive action was not bad enough, this guidance, issued by the president’s Council on Environmental Quality (CEQ), is likely not even legally enforceable. As Sen. James Inhofe (R-Okla.) noted this week, the CEQ does not have a chairman. Sen. Inhofe thus notes that under the Vacancies Reform Act, “with no Senate-confirmed chairman, or even a nominee, today’s guidance can have no force or effect as CEQ staff has no authority to take any official action. Further, even if there were a Senate-confirmed Chairman of CEQ, global climate change falls outside of the scope of NEPA so the guidance has no legal basis.”
This guidance document hits all the high points of an out of control regulatory state: action taken without consent of Congress; action which is at best legally dubious; imposing a regulatory burden that has no quantifiable benefit, but enormous quantifiable cost; and empowering fringe extremists both within and outside the federal government to dictate the economic decisions of their fellow citizens.
The definition of conflagration is “an extensive fire which destroys a great deal of land and property.” This guidance is the spark for a regulatory conflagration that will ravage the American economy. This destructive regulatory action just highlights why this president is set to be the first president since Herbert Hoover in the Great Depression to not see so much as one year of economic growth above 3% during his presidency. The regulatory state does not build, it only destroys.
The oil industry is finally suing the EPA over their methane regulations
Regular readers are already familiar with our ongoing coverage of the EPA’s preposterous new methane regulations which fly in the face of their own findings regarding the science of atmospheric emissions. While challenges to these rules are still making their way through the courts, the energy industry has now apparently had enough of the nonsense. This week the American Petroleum Institute (API) brought suit against Gina McCarthy and the EPA for essentially abusing their authority and violating their own rules regarding industry regulation. (Daily Caller)
The American Petroleum Institute (API) sued the Environmental Protection Agency (EPA) Tuesday evening, claiming the agency violated its own rules to regulate methane emissions.
API, a trade association that represents America’s oil and natural gas industry, filed a lawsuit stating the EPA violated federal regulations to reinterpret parts of the Clean Air Act, so that it could regulate methane. The association has called on the U.S. Court of Appeals for the District of Columbia to review the agency’s actions.
“The Clean Air Act provides specific limitations on the way the EPA can develop regulations,” Reid T. Porter, a spokesperson for API, told The Daily Caller News Foundation. “In this instance, EPA did not adhere to the statutory requirements when it expanded the rule to include methane.”
In a more sane and less politically toxic world this suit would be a no brainer. The entire premise of the EPA’s authority to regulate lawful commerce in the free market is predicated on the assumption that their actions would force corporations to adhere to rules which would limit or prevent harm to the environment. As we’ve discussed here before and the Daily Caller report reminds us, methane emissions from energy development in the United States have been plunging for some time now, and it’s not due to increased solar or wind energy production. It’s because of fracking. The EPA’s own studies have concluded the same thing.
Methane emissions into the atmosphere have been studied closely and the majority of increases have come in the form of biogenic methane. As a quick refresher course for those who may have missed it, thermogenic methane is released from industrial, energy extraction activity. Biogenic methane occurs naturally, primarly from agricultural activity and the melting of typically frozen ground. Thermogenic methane emissions (from energy exploration) stopped going up in the 90s and have since been going down while biogenic methane has been on the rise.
Fracking technology accounts for the difference. In fact, these benefits carry over to carbon dioxide emissions as well. The cuts in CO2 emissions we’ve achieved have been thanks to fracking at a rate twenty times greater than any benefit seen from renewable energy sources. (Emphasis added)
Absolute methane emissions from natural gas fell by 15 percent between 1990 and 2014, and emissions per unit of natural gas produced dropped by 43 percent over the same period.
The biggest cause of declining carbon dioxide (CO2) emissions is America’s fracking boom, not solar or wind power, according to a study published last November by the Manhattan Institute.
The study shows that solar power is responsible for a mere 1 percent of the decline in American CO2 emissions, while natural gas is responsible for nearly 20 percent.
This is the wake-up call which the courts need to drive home with the EPA. For every ton of carbon dioxide cut by solar power, fracking has cut 13 tons. Given the EPA’s stated mission and the science which they themselves admit is valid, there is no basis for the agency to expand the bounds of the Clean Air Act to include methane and their persecution of the fracking industry over CO2 emissions is similarly misguided. There is no lawful rationale for the EPA to impose hugely expensive regulations on the oil and gas industry for a problem which has already been addressed. These regulations need to be scrapped and the EPA needs an expensive lesson in sticking to their own primary function rather than fulfilling the political agenda of the Obama administration and their green energy political donor class.
The renewable fuel standard ‘set up for fraud’
America’s rush to renewables has invited corruption and fraud
Researcher Christine Lakatos and I, together, have produced the single largest body of work on green-energy crony-corruption. Our years of collaboration have revealed that those with special access and influence have cashed in on the various green-energy programs and benefitted from the mandates, rules, and regulations that accompany the huge scheme. Dozens of the projects, including biofuel, which required the unwitting investment of taxpayer dollars have failed—leaving employees without jobs, buildings without tenants, taxpayers without repayment, and cronies without pain (even snatching hefty bonuses on the way down). Most people know about Solyndra, the first bankruptcy, and some may know about Abengoa, the biggest bankruptcy, but there are many more.
These big projects allowed the politically connected to bilk taxpayers of billions and is the definition of corruption. But, there’s fraud in renewable energy, too—and, while it doesn’t hit us as hard as taxpayers, it does cost us as consumers.
Wednesday, July 20, representing the latest fraudster to be convicted—but not the first and surely not the last—“a jury found an Indiana man guilty of securities fraud and other crimes connected to a massive biodiesel fraud scheme,” reported Greenwire. It turns out, Jeffrey Wilson and his multistate cohorts pretended to manufacture biodiesel, which allowed them to claim renewable fuel credits—known as Renewable Identification Numbers or RINs. The Department of Justice said Wilson’s actions resulted in a $20 million loss to investors, $140 million in revenue, and $56 million in criminal profit.
I know more than most about the corruption surrounding green energy, but I hadn’t followed this. I dug further.
Just two weeks earlier, two men in Florida pled guilty to a “multistate biodiesel fraud scheme.” Biodiesel Magazine says Thomas Davanzo and Robert Fedyna operated several shell companies that were used to facilitate the “multistate scheme to defraud biodiesel buyers and U.S. taxpayers by fraudulently selling biodiesel credits and fraudulently claiming tax credits.”
Six months before, on December 21, 2015, two men were indicted on “101 charges alleging they abused incentives offered to companies that produced biodiesel fuels.” According to The Morning Call: “A federal prosecutor says they took subsidies for fuel they did not produce and sold renewable energy credits to unsuspecting buyers.” The charges include conspiracy, wire fraud, filing false tax documents, obstruction of the Internal Revenue Service, and obstructing a federal investigation. The indictment claims Dave Dunham and Ralph Tommaso used a complex scheme that reached from Lehigh Valley, PA, to Washington state and into Canada and allowed them to apply for and receive government subsidies for producing clean diesel.
Also in 2015, two Las Vegas men and an Australian man were sentenced to federal prison for schemes to generate and sell fraudulent biodiesel credits. In another case, Rodney Hailey, owner of Clean Green Fuels in Maryland, was convicted of selling $9 million in counterfeit RINs from his garage without even trying to make biodiesel. Hailey’s neighbors called authorities because they were alarmed by the “profusion of luxury cars” that showed up in his “suburban Baltimore neighborhood”—22 in all, claims a report in Bioenergy Connection. Then there is Jeffrey David Gunselman, owner of Absolute Fuels in Lubbock, TX, who was indicted by a federal grand jury in Texas for lying about producing biodiesel fuel and selling the resulting renewable fuel credits. Reports indicate that he generated some 48 million RINs without actually producing any biodiesel fuel. He’s remembered for using his ill-gotten gain to purchase, among numerous luxury items, a demilitarized Patton tank.
The most interesting biodiesel fraud case may be that of Philip Rivkin, founder and chief executive of Houston-based Green Diesel who is now serving a 10-year sentence for selling fraudulent RINs. Over a seven-year period he concocted an elaborate scheme that included, according to Bloomberg: “a three-story steel skeleton crammed with pipes and valves”—some of which were not connected to anything. In late 2008, Green Diesel did reportedly produce a batch of about 130,000 gallons of biodiesel, but the quality was “too poor for commercial sale.”
Biodiesel RINs have become a valuable commodity because, as a result of the Renewable Fuel Standard (RFS), refiners are required to blend biofuels into the nation’s fuel supply and the RINs supposedly prove they’ve complied. Rivkin sold more than $78 million in sham RINs. He bragged about building a $500 million company without any debt. When he fled the U.S. in 2011, prior to his 2014 capture, he did so in his $3.4 million Canadair Challenger jet.
These cases of RIN fraud are just those who’ve been caught—but they all have a common thread. They aren’t the names we are used to in the green-energy corruption story like billionaires Warren Buffet and Tom Steyer or former politicos like Al Gore and Bill Richardson. They aren’t cronies who’ve used political connections to work the system. They are fraudsters who found a way to fortune through the flawed RFS—first enacted by Congress in 2005 and expanded in 2007—which contains a credit-trading program.
In a July 25 report on the RFS, Marlo Lewis, Jr., a senior fellow at the Competitive Enterprise Institute, explains: “Each gallon of biofuel produced is assigned a unique 38-digit Renewable Identification Number (RIN). When a refiner sells a gallon of biofuel in the motor fuel market, it earns a RIN credit. A refiner that does not meet its annual obligation by actually blending and selling biofuel can comply by purchasing surplus RIN credits from another refiner that exceeded its obligation. A refiner can also bank surplus RIN credits to meet up to 20 percent of the following year’s obligation.”
Because the law requires ever-increasing quantities of biofuel be produced—even beyond what consumers want or most vehicles can handle—RINs offer refiners a way to presumably meet the mandates while providing the market with what it wants. But, according to Brendan E. Williams, American Fuel and Petrochemical Manufacturers executive vice president, biodiesel RINs are especially lucrative: “Ethanol RINs stay attached to physical gallons of ethanol until the ethanol gallon is blended with petroleum. This separation usually occurs at terminals, which are rarely owned by ethanol producers. Once ethanol is blended, the RIN is detached and becomes a tradable commodity. Therefore, rather than a refiner or ethanol producer, it is often the terminal operator who does the blending that controls ethanol RINs. A refiner that has a terminal rack at the refinery for local gasoline distribution can also do this blending, but this is not the usual situation because refineries are not located everywhere.
Biodiesel RINs work differently. EPA allows biodiesel producers to detach the RIN as soon as the biodiesel is produced. There is no requirement for biodiesel to be blended to petroleum diesel before the RIN is detached. This difference highlights why there is more fraud in biodiesel. The biodiesel fraudsters lie about producing physical biodiesel just so they can generate RINs on paper to sell. This is made possible based on the previously mentioned fact that there is no requirement for biodiesel to be blended with petroleum diesel.” A graphic in the Bloomberg report adds: “Biodiesel RINs tend to cost more than ethanol RINs or other types because they are scarcer and can be used to satisfy multiple requirements under the Renewable Fuel Standard.”
“RIN swaps,” according to Bloomberg, “are usually agreed upon between companies, traders, and brokers via email, phone, texts, and chatroom messages.” The onus is on the buyers, “if the RINS are found to be fraudulent, the holder has to purchase new credits to replace the phony ones”—and the new credits must be purchased at the current price that may be higher than the original purchase.
Of course, the refiners’ purchase of RINs—and in the case of fraudulent RINs, the double purchase—is passed on to the consumer. We are stuck holding the bag for the fraudsters’ get-rich-quick scheme that is enabled by the RFS.
“Because refiners can buy them to satisfy their obligations to introduce renewable fuels into the national market,” Scott Irwin, an agriculture economic professor at the University of Illinois, according to The Morning Call, calls the RINs: “valuable.” He explains: “A combination of little regulation, the small-business nature of biodiesel producers and higher-than-expected prices for credits produced a rash of fraud. … It was kind of set up for fraud.”
Because the EPA, whose expertise is in things like oil spills and air pollution, isn’t equipped to handle these cases of sophisticated financial fraud, Bloomberg reports, it has reached out to the Commodity Futures Trading Commission—“which is itself stretched thin because of its responsibilities under Dodd-Frank.” The lack of oversight made the RFS biodiesel program a “government playground for con artists.”
The biofuel fraud is just one prong in the growing push for RFS reform. The economic and technical realities of the “blend wall,” as detailed in Lewis’ report, is another. On July 27, Bloomberg chronicled the history of the unlikely third prong: big green groups’ biofuel blunder. They’ve now turned against ethanol due to the agricultural runoff in waterways and conversion of prairies to cropland. Environmentalists, who once championed biofuels, are now seen as a factor in “improving the odds that lawmakers might seek changes to the program next year.”
Reforming the RFS is not a partisan issue. Free market advocates don’t like the mandates. Consumers resist been forced to purchase something they don’t want. Environmentalists don’t like the loss of prairie land and damage to the water supply. Rep. Peter Welch (D-VT) says the RFS has “truly been a flop. The environmental promise has been transformed into an environmental detriment.”
The only resistance to calls for RFS repeal or reform comes from the biofuel producers lobby—though as I’ve previously addressed, corn ethanol would likely still be blended into our fuel supply at about the current levels as it is a valuable oxygenate that increases octane.
Lewis concludes his report with this admonition: “Congress should repeal the RFS so that consumer preference and competition, rather than central planning policies, determine which fuels succeed or fail in the U.S. marketplace. Failing that, Congress should sunset the RFS so it ends after 2022. In the meantime, the EPA should cap mandatory biofuel sales at the E10 blend wall, while allowing biofuel producers to sell as much additional renewable fuel as consumers actually want to buy.”
Every politician in Washington talks about getting rid of waste, fraud, and abuse. Getting rid of the RFS would go a long way to achieving that goal.
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