Sunday, February 12, 2023

Don’t let Biden & Co. force YOUR nest egg to be invested in ESG companies

President Joe Biden is coming for your nest egg. For real: A new Biden Labor Department rule aims to steer the retirement funds of 152 million Americans toward companies with woke policies on climate change and other “environmental, social and governance” goals.

Cross your fingers that state attorneys general, if not Congress, can stop him.

Under the Biden rule, fund managers would no longer be limited to investing workers’ assets “solely in the interest of participants and beneficiaries,” as the law has long required. Instead, they could also “consider climate change and other environmental, social and governance factors when they select investments and exercise shareholder rights” — by implication, even if it doesn’t maximize returns for workers.

Climate-change and social-justice warriors began pushing companies to adopt ESG practices, and for large shareholders to invest in them, back in the Obama era. But President Donald Trump banned retirement-fund managers from using worker cash for such political purposes. The new Biden rule would override that.

At a time “when Americans’ 401(k)s have already taken such a hit due to market downturns and record high inflation, the last thing we should do is encourage fiduciaries to make decisions with a lower rate of return for purely ideological reasons,” warns Sen. Mike Braun (R-Ind.), who’s pushing a resolution to block the rule.

It’s “irresponsible of the Biden administration to jeopardize retirement savings for more than 150 million Americans for purely political purposes,” fumes Sen. Joe Manchin (D-W.Va.).

Trouble is, Manchin is so far the only Democratic senator to join the bill’s 49 Republican backers — so it may well fall short of a 51-vote majority needed to pass.

That leaves a group of 25 GOP state attorneys general who’ve sued to keep the change from taking effect. Their suit says the rule “contravenes” the law’s “clear command that fiduciaries act with the sole motive of promoting the financial interests of plan participants and their beneficiaries.”

The AGs are dead right. If woke individuals want to invest their own money for political purposes rather than try to maximize returns, that’s their business. But Biden has no right to do it with your money. He needs to be stopped.


Biden admin cracks down on washers, fridges in latest climate action: 'Overregulation on steroids'

The Biden administration proposed sweeping rules Friday to boost energy efficiency standards for clothes washers and refrigerators in an action it claimed would save consumers money and "significantly reduce pollution."

The Department of Energy (DOE) said the two regulations, which would be implemented in 2027 if approved, are projected to reduce carbon dioxide emissions by 233 million metric tons over the next 30 years. The agency also estimated that the energy-efficiency standards taking certain appliance models off the market would save $3.5 billion on an annual basis.

"With today’s proposals, we’re building on a decades-long effort with our industry partners to ensure tomorrow’s appliances work more efficiently and save Americans money," Energy Secretary Jennifer Granholm said in a statement.

"Over the last forty years, at the direction of Congress, DOE has worked to promote innovation, improve consumers’ options, and raise efficiency standards for household appliances without sacrificing the reliability and performance that Americans have come to expect," she continued.

According to the announcement, the washers and refrigerators affected by the regulations currently represent 5% of annual residential energy use and 8% of residential electricity use nationwide.

The new standards proposed for the two household appliances are the latest in a series of energy efficiency actions the Biden administration has pursued since taking office two years ago. In 2022 alone, the administration took more than 110 actions on appliances.

On his first day in office in January 2021, President Biden signed an executive order requiring the Department of Energy to make "major revisions" to current appliance regulation standards and standards set by the Trump administration. A month later, the agency listed more than a dozen energy efficiency rules, impacting appliances like water heaters, cooking products and lamps, that it would review.

Experts, though, have argued the appliance regulations are unnecessary and that consumers are already able to freely purchase more efficient appliances.

"This is overregulation on steroids," Ben Lieberman, a senior fellow at the Competitive Enterprise Institute, told Fox News Digital in an interview. "These are appliances that have already been subjected to multiple rounds of successively tighter standards."

"There is just not much there there anymore," he said. "There's a great risk of doing more harm than good in the form of appliances — refrigerators or washers that cost more upfront than you're ever likely to save in the form of less energy and water use."

Lieberman added that such appliance regulations were part of the Biden administration's "war on energy use."

"By using climate as a kind of finger on the scale in favor of tougher standards, I think that's all the more reason to be suspicious that this is going to be a bad deal from a consumer standpoint," he continued.

"Anybody who wants to buy ultra-efficient appliances is free to do so with or without these regulations. The regulations just make that the only game in town and usually at a higher cost that may or may not be earned back over the life of the appliance."


Biden Slams Oil Companies in State of the Union Address While Admitting We Still Need Oil

For the sake of my blood pressure and mental health, I did not watch the entire State of the Union Address this year. I did, however, take a look at President Biden’s statements on climate change and energy. Unsurprisingly, Biden’s commentary on those topics was not overly insightful or nuanced.

Biden opined on how climate change is causing more extreme weather events (it’s not), he slammed oil companies for daring to make profits when oil prices skyrocketed last year, and then he went off script and admitted that we still need oil for the next few decades, at least.

Such bi-polar statements and behavior are not all that unusual for Biden, and not just when it comes to oil. He publicly chastises oil companies for not drilling enough, or producing enough to keep gasoline prices lower, even as he blocks new lease sales and slow walks or denies permits to drill, both of which throttle new production. Biden’s actions, of course, are among the key reasons for the increase in prices at the pump. Even when oil companies try to produce more, Biden punishes them by imposing new regulations from production to transportation, as well as government encouragement of environmental, social, and governance (ESG) investment schemes and fossil fuel divestment by major banks.

The oil industry is in a state of feast or famine, and it has always been this way. When I sat down in my first introductory petroleum engineering class, the professor said to us, “Be prepared to be laid off every couple of years.” Sure enough, around the time oil prices took a nosedive in April 2020, with West Texas Intermediate futures prices hitting -$37 per barrel and Brent crude plummeting to $9.12, thousands of employees were laid off in the Gulf of Mexico (GOM) and Texas oilfields alone.

I didn’t hear anyone on the left advocate for reducing the tax load on the oil industry while this happened.

Biden is not alone in calling for additional windfall taxes on oil companies; international groups are also opining that the record-breaking profits of Shell and BP, in particular, justify imposing new taxes on them.

Offshore Energies UK (OEUK), the United Kingdom’s offshore energy industry and supply chain association, told RigZone that these companies are already paying record windfall taxes in the UK. BP, a UK company, already pays 75 percent in total windfall tax on profits made in UK waters, the “highest of any industry,” reports OEUK. The energy industry group says these taxes can’t go higher without risk of oil companies abandoning operations in UK waters altogether, which would, obviously reduce government tax revenue substantially.

Oil companies like Shell or BP are not like a local business, or even like other international chains like Wal-Mart. These companies are not simple: they have multiple international subsidiaries, profits made in countries around the world with their own tax and trade agreements, not to mention international subsidiaries that are invested in renewables like offshore wind. To think that a windfall tax in the United States or UK would benefit gasoline prices is naïve at best.

Add these complexities to the fact that, as Biden said, oil and gas are necessary for several more decades (and beyond), it seems unlikely that our doddering president’s “old man yells at cloud” routine will motivate an international movement that forces oil companies to give the government more of their money. By contrast, it may suppress investment into new production at a time when increased production is needed.

Concerning the profits Big Oil companies make, they will be, as they always have been, returned to investors/owners in the form of higher stock prices and dividends—which is what every publicly traded company is formed to do: maximize return on investment to the owners over the long term or reinvest money into multiple divisions of the companies, including their green energy initiatives. They may also go towards paying for the increasing fines and regulatory requirements of the Biden administration.

Maybe, if my friends offshore are lucky, operators will spend a little more for the higher-tier food service on the drill ships and platforms, too. As long as they’re spending money, buy those roughnecks steak twice a week!


Australian climate groups fear a key government policy to drive down emissions will instead push them up

Climate advocates are insisting changes be made to one of the federal government's key emissions-reduction tools, warning it currently risks perversely allowing emissions to increase.

The Australian Conservation Foundation and other climate advocacy groups have raised concerns about the role carbon credits will play in the reshaped "safeguard mechanism", which will be used to force heavy emitters to cut their pollution.

The safeguard mechanism will cap the emissions of the 215 heaviest-polluting companies — like coal producers, steelmakers and airlines — and force those who breach their cap to either trade emissions with other companies or buy carbon credits.

The use of carbon credits is not limited by the scheme, so companies can theoretically operate as normal and buy credits to cover their emissions over the cap.

The ACF is pointing to new analysis it commissioned from global research firm Climate Analytics, which found allowing those companies unlimited use of carbon credits would "very likely fail to reduce emissions".

The analysis raises fresh concerns about the usefulness of carbon credits in reducing emissions, arguing forcing companies to actually reduce emissions is highly preferable.

"The proposal … would only serve to enable the continued extraction and burning of fossil fuels," the report finds.

"Instead of reducing emissions, as is urgently needed, this proposal would provide an avenue for fossil fuel companies to continue polluting at the expense of Australians – and indeed the world — facing worsening climate change impacts."

Controversial credits

The use and usefulness of carbon credits is highly contested within climate policy discussion.

Carbon credits effectively aim to counterbalance emissions.

Credits are created by either avoiding emissions (for example, through burning landfill gas), or removing carbon dioxide from the atmosphere (through tree-planting and regenerating forest on cleared land).

Those credits can then be sold to companies to counteract the pollution they create.

Significant criticisms of Australia's carbon crediting scheme prompted a major review, led by former chief scientist Ian Chubb, which found the scheme is fundamentally sound.

It did make a number of recommendations for change, going to better oversight of the scheme and its integrity, changing rules for those burning landfill gas, and abandoning the "avoided deforestation" method of creating credits.

While the changes have been broadly welcomed, the Chubb review has done little to satisfy many of the carbon credit scheme's strongest critics.

Bill Hare, one of the authors of the Climate Analytics study, said he did not think the review dealt fully with questions around "additionality" — that is, whether or not the action creating the carbon credit would have simply happened anyway.

He said there was enough available evidence to hold significant doubts.

"A significant fraction of the human-induced regeneration credits would probably have happened in the absence of a carbon-unit generating scheme," he said.

Energy Minister Chris Bowen has previously defended the integrity of carbon credits, and their role in the safeguard mechanism.

He argues the credits provide necessary flexibility for companies that will struggle to cut emissions dramatically until new technology is developed.

"Carbon credits are important, they are a complement to emissions reduction at the facility level, at the coal face, if you will," he said.

"They will not ever replace that, but they are an important part of the journey, and I'm absolutely determined that there will be rigour."

Emissions offset, but for how long?
The analysis also raises questions about how long emissions have to be offset for.

Under the current Australian carbon credit unit (ACCU) scheme, credits either last 25 years or 100 years depending on their design.

After that period, stored carbon (carbon captured in trees or soil, for example) no longer has to be maintained — it can simply be released back into the atmosphere.

But Climate Analytics argues that those time frames are far too short.

It points to research suggesting that for every tonne of carbon dioxide released into the atmosphere, 40 per cent will remain a century on, and more than 20 per cent will remain after 1,000 years.

The report argues that means carbon credits cannot permanently offset emissions over the long term.

"After [either 25 or 100 years], when carbon is ultimately lost from ACCU projects, as is likely over longer time frames, the atmospheric carbon dioxide concentration would be higher than if the offset scheme had not been used in the first place, and instead an emission reduction was made at its source."




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