As I suspected, the slight bend toward agricultural interests that Governor Hogan made with the revised Phosphorus Management Tool regulations – now re-dubbed the Agriculture Phosphorus Initiative – was met with hostility from the environmental community. On Friday the Maryland Clean Agriculture Coalition and Chesapeake Bay Foundation released this joint statement:
We commend the Hogan Administration for taking the problem of phosphorus pollution seriously and are pleased that the Administration embraces the scientific evidence showing we must implement the Phosphorus Management Tool to better manage manure on oversaturated farm fields.
The environmental community was not involved in the drafting of Governor Hogan’s proposed regulations that were released on Tuesday, and we have gone over them carefully since. Unfortunately, the regulations do not provide the adequate protection or assurance we need, and as such, we must oppose them. Our concerns are detailed in the attached analysis.
The regulations include a significant loophole, referred to by the agricultural industry as a “safety net,” that makes it unclear if they would ever result in full implementation of this much-needed tool. We adamantly oppose this lack of a clear, enforceable end date for putting the Phosphorus Management Tool into place.
It is also unclear whether the proposed ban on phosphorus on fields with FIV over 500 would actually reduce the amount of manure being applied to farm fields or protect Maryland water quality. The Maryland Department of Agriculture has been unable to clarify this.
Additionally, the regulations add one more year of delay, and they include troublesome secrecy provisions.
We continue to whole-heartedly support legislation sponsored by Senator Pinsky and Delegate Lafferty (SB 257 / HB 381) to implement the Phosphorus Management Tool with a six-year phase-in. Given the difficulties we’ve had with the regulatory process over the past three years, we prefer having a strong statute in place.
Their statement is an expanded version of a statement I posted on Wednesday from the Maryland Clean Agriculture Coalition. The MCAC is an interesting group in that none of the 21 groups involved has a thing to do with farming; instead many of these are “riverkeeper” groups from around the state. These groups blame farmers for a disproportionate share of the problems with Chesapeake Bay, imagining they are just wantonly dumping manure into streams and creeks.
While the groups have done a comparison sheet (or “detailed analysis”) between the O’Malley and Hogan proposals, their chief complaint can be summed up in this paragraph:
The Hogan PMT provisions for an “evaluation” for assessing manure markets and transportation programs, available land acreage, etc., allow for this “evaluation” to stall movement of PMT implementation for a year while MDA conducts a re-evaluation. The result is the possibility of an endless year by year postponement and re-evaluation possibility. (Emphasis in original.)
The way I read this is that, whether the infrastructure is in place or not - and, to be honest, I’m dubious of whether it can be in place – the CBF wants to move ahead on the PMT issue. Even the large-scale concession of immediately stopping the application of manure to certain fields, which is a provision allegedly affecting 1 of every 5 farmers on the Lower Shore, isn’t satisfying to the environmental coalition. They demand the data on how this would affect farmers, but pooh-pooh the need for data on how these regulations might affect the rural Maryland economy through the actual on-site studies sought by the Hogan administration.
In short, the contempt for the agricultural community by these groups is palpable.
So Larry Hogan tried to walk the middle ground. In backing off his original dead-set opposition to the PMT as “mandating how (farmers) use their property” to implementing a slightly less onerous version he still alienated the environmental community as well as discouraging some of the farmers who will be most adversely affected.
This whole episode will hopefully be a lesson to the new administration: you won’t get the friendship or the votes of those who would just as soon see the Eastern Shore collapse economically thanks to the demise of the agricultural industry regardless of what you do. So stick to those issues you ran on: improving Maryland’s economy and lowering the tax and regulatory burden on its citizens. Remember, no amount of regulation is enough for liberals, so why cater to them in the first place?
In the day since Governor Hogan announced his Phosphorus Management Tool regulations and I wrote my original take on them, I’ve had a chance to see what some of the involved players have to say.
I should preface this by noting I’m not a farmer; however, I have a rural background to the extent that I lived on acreage partially surrounded by woods and cornfields and went to school with kids who were honest-to-goodness members of the Future Farmers of America, complete with the blue corduroy jackets. And seeing that this is a predominantly rural area which depends on agriculture and my interest is in its economic success, I tend to favor the views of farmers over those who think that chicken comes from Whole Foods.
Anyway, the reaction I saw from the major agricultural players was somewhat disappointing, considering the dramatic effect those around here will feel from the PMT regulations. I begin with Delmarva Poultry Industry.
Statewide, the Maryland Farm Bureau echoed the inclusive approach.
To me, these farm groups are exhibiting the same attitude that’s expressed by the saying, “the beatings will continue until morale improves.” Perhaps I’m just wondering what happened to the Larry Hogan who promised the Maryland Farm Bureau back in December:
The first fight [when I take office] will be against these politically motivated, midnight-hour phosphorus management tool regulations that the outgoing administration is trying to force upon you in these closing days. We won’t allow them to put you out of business, destroy your way of life or decimate your entire industry.
The regulations are essentially unchanged in this rendition with the exception of promises of more resources for affected farmers and an extra year to deal with the mandates. But over 1 in 5 local farmers will have to stop their fertilizing practices immediately when the regulations take effect.
And the step toward environmentalists has apparently been met with defiance. Both the Maryland Clean Agriculture Coalition and Chesapeake Bay Foundation are skeptical. CBF’s Alison Prost notes:
We are pleased the governor recognizes that excess manure application on farm fields in Maryland is a serious issue, just as scientists have been noting for years.
We learned general information about the proposal Monday afternoon, and are hoping to obtain a copy of the actual proposed regulation as soon as possible. Without such details, we are withholding judgment. Once we are able to review the full proposal we hope that the Hogan Administration will allow the environmental community a chance to help shape this policy. In the meantime, we fully support SB 257 and HB 381 which are intended to solve the manure crisis through legislation. (Emphasis mine.)
In other words: nice try, but we are still after the whole enchilada.
Honestly, I don’t know if this measure is an attempt to placate the center by throwing farmers under the bus or if it’s part of a grand gambit where concessions on this issue will be traded for relief from the “rain tax.” I don’t trust the Democrats to follow through on any such deal because they come with the attitude that their time out of power is a fleeting, temporary one. It worked in ousting Bob Ehrlich after one term.
Perhaps Larry Hogan doesn’t have it in him to be Maryland’s answer to Scott Walker. But this relatively rapid concession on an issue important to the rural voters who supported him by margins of 70-30 or better in many counties is troubling. Had he waited until we knew the fate of the General Assembly bills – which he could have chosen to veto and perhaps not have to deal with until next session – he could have positioned himself as more of the fighter we were looking for when we dispatched Martin O’Malley’s heir apparent and selected Larry to lead the state.
By their words today, the environmental lobby proved they have no intention of working with Larry Hogan – none whatsoever. There was enough of a broad outline presented yesterday that these groups could have embraced the Agriculture Phosphorus Initiative, but they did not.
Of course, I sort of figured it would be this way all along but people keep reaching across the aisle and keep getting their arms bitten off. The only solution is to make the statist side concede by having superior numbers, and we can’t finish that job until 2018.
Yesterday, Governor Hogan announced that some local farmers will have tough new phosphorus regulations placed on them this year. While it wasn’t his overall intent, the news could be devastating to any local farmers who have existing high phosphorus content in their fields as it will necessitate their relocation of any manure present and prevent them from utilizing that fertilizing technique until 2022.
For the rest of the agricultural community, the change is a simple one-year reprieve from the regulations taking effect. Overall, the regulations aren’t a whole lot different from previous proposals. Granted, the new regulations Hogan proposes set up an on-farm economic analysis, but that should have been the first step well before the regulations were published and affecting many Maryland farmers.
So while the state is putting together a pretty picture of the new regulations’ effects, it may simply be a capitulation by the Hogan Administration as they try and put their best face on a fait accompli – SB257/HB381, which codify the PMT regulations slated for adoption before Hogan pulled them hours after taking office January 21, have hearings this week and both have a substantial number of co-sponsors.
For his part, Hogan bills it as a ”fair and balanced” proposal:
We have listened to the agricultural and environmental communities to find a fair and balanced plan for limiting phosphorus, and I am pleased to announce the details of that solution today. The enhanced phosphorus management tool regulations and the broader Agriculture Phosphorus Initiative will protect water quality in the Chesapeake Bay while still supporting a vibrant agriculture industry in Maryland. We are providing immediate action to limit pollution, investing in new technology, seeking alternative uses for manure, and improving on-farm management of animal manures – none of which were included in the previous proposals.
It seems to me the time to do the enhancements would have been before most farmers were affected. The excuse for an economic study produced by the previous administration noted the plan would cost farmers (and taxpayers) millions of dollars for comparatively little benefit to Chesapeake Bay. The impetus for the “Agriculture Phosphorus Initiative” should have been to study the effects on real farms first – which is part of this effort, but done simultaneously with the restrictions rather than in advance of them.
Moreover, we don’t know how quickly some of these waste conversion initiatives will get online despite the $2 million the state recently granted three such operations, including one in Worcester County and one in Dorchester County. How scalable these operations are is yet to be determined, but the need for their assistance in waste disposal will arise rather soon.
In short, there was a reason the Eastern Shore agricultural community was pleased about the demise of the PMT regulations – not that they want a clean Chesapeake Bay any less than anyone else, but because they can make a case that they have done their part yet still seem to be the target of more and more regulations. That month of triumph appears to be coming to a close, though, and while Hogan calls it a enhancement the end result will still likely be economic damage to Eastern Shore farmers.
The economic viability of producing poultry in Maryland may be a casualty of these new regulations as growers may find the market for their by-product suddenly diminished. Without the ready availability of chicken waste through the departure of the industry, the environmentalists may succeed in driving the soil phosphorus levels down, but there will be much less economic activity to speak of as well.
In one piece of good news from the Maryland Senate they approved SB44, a bill allowing the maximum speed limit in the state to be raised to 70 miles per hour. The 39-7 vote in the Senate isolated a handful of Senators from urban areas who thought 65 was good enough, but common sense prevailed given most highways were designed for 70 MPH speeds decades ago when cars weren’t built with all the safety features they now have. If the law is passed through the House, it would take effect in October and most likely one of the roads affected would be the U.S. 50/13 bypass around Salisbury where the current speed limit is 65.
To me, it’s a start. While we’re not as open as Texas or other states west of the Mississippi, I could see interstate-grade highways in this area supporting an 80 MPH limit and perhaps even “autobahn” rules (no speed limit in the left lane.) Obviously with the amount of computing and communication around the state (think about those large billboard-style signs on U.S. 50, for example) we could even progress to variable speed limits with 60 MPH as a floor but ranging upward based on traffic and conditions. (I use 60 MPH as a basis because U.S. 50 on the Eastern Shore reminds me of U.S. 27 in central Florida where my parents live – a mainly rural highway with crossroads connecting a few small-to-medium sized towns, and it’s a 60 MPH highway.)
Now we all know that people use the speed limit as a suggestion and drive 7 to 10 MPH over, so 55 becomes 62 to 65 MPH in practice. This Washington Post story on the Maryland Senate vote quoted opponent Jim Brochin making that point. But no one says a municipality or county has to change its limit, although I would encourage them to do so.
When I moved here from Ohio a decade ago, I noticed that Maryland had quite a few nanny state driving laws. So while we are looking at changing the speed limits, can we also dump the full-time headlight requirement on certain two-lane highways like U.S. 113 and Maryland Route 90? Long stretches of both highways affected are now divided.
North of the border, I would love to see Delaware get with the program and raise a lot of its 50 MPH roads at least to 55 MPH.
I’m sure the insurance industry is already screaming bloody murder about the speed limit change, so I doubt that my pet projects will go anywhere because they have a lot more lobbying cash than I have. Yet this is the state that can’t even bring itself to discuss the possibility of self-driving vehicles with a task force (although they’re trying again in 2015 with HB172/SB778.)
We talk about making the state more business-friendly, but it’s not just financial – getting goods to market and being able to provide rapid service through improved utilization of transportation infrastructure is quite important, too. Adding 5 MPH to the interstate speed limits is a nice tiny step, but only one of many needed.
Somehow it always seems that I like to write about wind power on blustery nights, when the winds are howling with gale force. Tonight is such a night, and it coincides well with a new report done by the American Wind Energy Association. It’s a report which makes the claim that the reliability and scope of wind power nationwide has given that industry the potential to create nearly half our electricity by mid-century.
Something I noticed on this report, though, is a graphic I had previously seen but not been able to find again. It’s a graphic which showed how much of each state’s electricity load was created by wind power, and states in the southeast don’t get much help from it – on the other hand, those in the upper Midwest do quite well. I suppose one could liken this phenomenon to whether a state is fortunate enough to have oil or natural gas underneath it, as some states have plenty while others are barren.
Yet the production increases and success the wind energy market has had comes mainly from two elements, both controlled by government: the Wind Production Tax Credit (WPTC) and various state regulations which mandate a certain percentage of electricity come from “renewable” sources. (Maryland is a state which has the latter.) Here’s what AWEA said about the WPTC:
Policy certainty is needed so that the U.S. can continue rapidly scaling up wind power. The renewable energy Production Tax Credit has successfully helped the U.S. become the number one wind energy producer in the world. Congress must rapidly extend the PTC for the longest possible time to avoid pushing American wind power off a cliff. A loss of $23 billion to our economy and nearly 30,000 well-paying jobs resulted the last time wind was left without policy stability.
Their definition of policy stability is keeping the WPTC afloat for more than a year-to-year basis, and some in Congress have unsuccessfully tried to ratchet this credit up for five additional years. To me, there’s no better proof that wind hasn’t reached a share of viability in the market than the fact that thousands of projects stall when the tax credit expires. Without the WPTC, it may be assumed that the costs of bringing wind energy to market are otherwise far too high. (This doesn’t consider offshore wind like Martin O’Malley wanted Maryland ratepayers to subsidize.)
AWEA makes the case that wind’s inherent unpredictability isn’t as big a deal as it was before since the industry is so widespread around the country – there is redundancy in the system now, so while Ohio may not be getting much wind Iowa could be buffeted. But it’s their claim that the unpredictability of policy holds them back, and the fact they continue to seek this crutch of the WPTC leads me to believe their lobby is all about the money and not so much about energy independence.
I said the other day that I wanted to look more deeply at a poll done by the Washington Post last week, and my focus is on how the outstate areas that overwhelmingly supported Governor Larry Hogan compare with the rest of the state on these issues.
For example, the right direction/wrong track polling showed statewide respondents had a 48-40 opinion that the state was on the right path, but those who answered from outstate were the most pessimistic by a 36-55 margin. It was eight points down from any other group.
Yet those who voted for him from the hinterlands were still not sold on Hogan’s efforts. Their 43-24 approval of Hogan’s performance was almost identical to the 42-24 statewide numbers. On the other hand, they were slightly more confident in his ability to turn things around, believing he would by a 61-30 margin compared to the statewide average of 58-33.
Tellingly, the number of outstate repliers who believed the state should be governed more conservatively was several notches above the average, with 44% agreeing we need a more conservative direction as opposed to 36% overall. Only 22% favored more liberalism among outstaters compared to 28% as a whole.
And when the polling turned to the performance of General Assembly Democrats, the 49-43 favorable margin among all voters melted down to a 36-58 disapproval outside the I-95 corridor. The strong disapproval of 35% from those polled outstate was by far the highest. Outstate voters also differed from the norm as they believed the hot issue the General Assembly needs to work on was the state economy (21%) followed closely by public education and taxes at 20% each. Overall, Maryland picked public education at 26%, with taxes at 18% and the state economy at 16%.
We on the geographic fringes also didn’t fondly recall Martin O’Malley, giving him a 37-57 approval-disapproval number compared to 49-43 for the state at large.
There was also a tendency to see particular issues in a more conservative way, which is to be expected from the regions of the state which aren’t urban or suburban. In general, the Post lays out its geographic regions to specifically cover Prince George’s, Montgomery, Anne Arundel, and Howard counties, along with Baltimore City and its suburbs. The rest of us are lumped into the “rest of state” category, which covers a wide swath of the state from border to border in both directions.
One thing the Post did not poll on was the Phosphorous Management Tool, the enactment of which Hogan delayed within hours of taking office last month. Naturally, counties where this was sold as another tactic to clean up Chesapeake Bay would likely be against this change, which the rest of the state (particularly the Eastern Shore) may be solidly behind Hogan’s action.
If you ever wanted real proof that there is more than one Maryland, this poll is a pretty good indicator of the differences.
I grew up in a blue-collar family in a blue-collar, auto-making town, so I feel a certain kinship with those who believe that America should still be making things big and small. So I liked the news that America accelerated the pace of manufacturing job creation at the tail end of last year, adding 115,000 manufacturing jobs in the last two months of the year based on revised federal figures.
But Alliance for American Manufacturing President Scott Paul called January’s 22,000 figure “so-so,” blaming “a combination of a strong dollar and unchecked foreign currency manipulation” for the slowdown. His group has called on the Obama administration to include currency manipulation provision in the Trans-Pacific Partnership being negotiated.
Month-to-month fluctuations are one thing, but what about adopting a broad-based approach to encouraging manufacturing and learning a trade at the optimal time, during the formative years of schooling? I don’t often agree with NPR, but last week they ran a story extolling the Millennial Generation to learn a trade in order to avoid the pitfalls of college loans and perhaps get a jumpstart on a good-paying career. While there was spirited argument in the comment section which made the case that their economic ceiling would be lower than their college-educated brethren could achieve - and that is true - not all children are college material and they should have a path to success which doesn’t involve spinning their wheels and racking up thousands in debt from college loans without a degree to show for it or one that bounces them from menial job to menial job just to get by. Alas, that is the fate of millions of young people today.
One paragraph sums up the opportunity:
With so many boomers retiring from the trades, the U.S. is going to need a lot more pipe-fitters, nuclear power plant operators, carpenters, welders, utility workers — the list is long. But the problem is not enough young people are getting that kind of training.
Personally, I’m on the wrong end of the baby boom. But those in the Millennial Generation (which my daughter is on the lead of as she was born in 1983) are indeed coming in at a good time. Problem is that we as parents have been fooled into believing college is the only path to success; that is, until we have to call the plumber, the electrician, or the mechanic who is good with his or her hands and has the proper aptitude to fix things. Chances are there’s a little gray in his hair, and while the last few years have been tough on these tradesmen economically they still have the skills to succeed.
What I seek is a path to success for our kids which doesn’t necessarily involve college and the massive debt that goes with it. If America can get back to building things and working with its hands, we can succeed like my father did with our family. We may never have been rich, but we had a roof over our head, food on the table, and those things we needed to succeed. Once every couple years we would go on vacation, and until I was in high school my mom was a stay-at-home mom. In short, we were a fairly typical middle-class Midwestern family in a blue-collar town.
The blue-collar upbringing really wasn’t that bad, and it’s a model we went too far away from for too long. Hopefully we have a chance to bring it back with today’s youth.
I hope you enjoyed my fellow contributor yesterday; I’ve had mostly positive reviews. But I’m back in the saddle and look forward to Cathy’s next post.
You may have seen this piece in the Baltimore Sun by Michael Dresser; a tome which claims that much of Larry Hogan’s agenda is DOA. In it, House Speaker Michael Busch is quoted as saying, “No matter how many times (House Republicans) stood up, you couldn’t count to 71.”
Well, I wouldn’t expect many Democrats to stand up, and truth be told most of the Democrats who might have are working elsewhere now because their electorates decided conservative-lite wasn’t good enough. Granted, 50 is not 71, but it’s better than 43 or 37 where we have been the last two terms.
In an enhanced edition of tit-for-tat, Senate Democrats decided to play political games with several of Hogan’s appointees. Ironically enough, two of the five appointees being held up were Democrats, although both had previously served under Bob Ehrlich. But it goes to show you: when you reach out the hand of bipartisanship to Democrats, many will rip off the arm and beat you with it every time. Once again, they are proving that their interest is in maintaining power and not helping the working family by granting a little bit of tax relief at the gas pump and in the property tax bill. And all the caterwauling about the budget Hogan produced reminds me of the 2012 budget fight where the budget “only” went up $700 million instead of the $1.2 billion they desired.
In short, Maryland Democrats are ignoring the election results and acting like Anthony Brown was elected instead of Larry Hogan. So it’s time to remind them just who they work for.
If you want a review of the State of the State speech Democrats are upset about, I briefly outlined his eleven points in the wake of the speech last week. To me, it sounds like the Democrats are having a cow about Hogan’s plans for repealing the “rain tax” and giving a tax break to specific retirees, and dumping the Phosphorus Management Tool regulations at the last possible minute. So we know what to push the recalcitrant legislators to do as the squeaky wheels get the grease.
Two people I really haven’t heard much from in the wake of the State of the State address are the local Eastern Shore Democratic delegation, namely Delegate Sheree Sample-Hughes and Senator Jim Mathias. Given the counties they represent went heavily for Larry Hogan, I would expect them to be Democratic leaders in getting his agenda passed. While the extent will vary, the ideas Hogan promoted will benefit their districts as well. They need to be the leaders in getting the Hogan agenda to 71 and 24 in the House and Senate, respectively.
It’s what the state voted for, so let’s get this done.
Now that the shoe is on the other foot for the first time in eight years, thousands were interested in how newly-inaugurated Governor Larry Hogan assessed the state of our state. And it didn’t take long for him to assess that:
But while our assets are many, and our people are strong and hopeful, their state is simply not as strong as it could be – or as it should be.
Yet in reading through the speech, I didn’t see it as a negative in any way. Instead, Hogan proposed a number of solutions which, instead of spending money or growing government, generally worked in the opposite direction. Breaking the laundry list into eleven parts, it’s easy to summarize the Hogan plan for year one:
- Analyzing and enacting portions of the upcoming Augustine Commission report on business competitiveness. The idea here is to make Maryland more business-friendly and hopefully wean the state’s economy off a long-term dependence on federal government jobs.
- Restructure government to be more efficient and effective, using the new faces placed at many of the Cabinet-level departments.
- Legislation repealing the “rain tax.” This may get some serious opposition from the environmentalist groups who believe this is a fair way to pay for Bay restoration efforts, even though the fees were set by county and only affected ten of 24 county-level jurisdictions.
- Legislation proposed to exempt military, police, fire, and other first responder pensions from state income taxes. Eventually Hogan would like this to cover all retirement income. It’s an effort to improve Maryland’s dismal standing and reputation as a place not to retire.
- Legislation to exempt the first $10,000 of personal property from taxation, a move Hogan claims would eliminate the tax for half of Maryland businesses.
- Legislation to repeal the automatic gasoline tax increases baked into the Transportation Infrastructure Investment Act of 2013.
- Restoring the local share of Highway User Revenues, a sore spot among the state’s rural counties in particular.
- On education, strengthening the charter school laws. More controversial will be the oft-tried BOAST tax credit, which gives a tax credit to those who contribute to parochial or private schools. Hogan noted previous iterations have passed the Senate only to fail in the House.
- Hogan has already shelved the Phosphorus Management Tool, and called for farmers and environmentalists to work on a better, more equitable solution. He also promised to address the “long-ignored impact of upstream polluters,” including the problems at Conowingo Dam.
- An executive order to deal with the heroin epidemic. Lieutenant Governor Boyd Rutherford has been tasked with this issue.
- Reinstating the Fair Campaign Financing Act fund by bringing back the checkoff on the tax returns, and also establishing a commission to examine the state’s redistricting process via executive order. If I have the time, I’d love to serve on that one because we really do need to reform the system.
Certainly it’s not the strongly conservative agenda some may prefer, but I would consider it a good first step. Much of the reform will have to go through the General Assembly, and perhaps the strategy is that of picking off just enough Democrats on various issues to build an ever-shifting coalition with the Republicans. The fifty Republicans in the House and 14 in the Senate would be joined by one group of Democrats who consider education reform a must, but may not agree with Hogan’s approach to cleaning up the Bay. Yet some Democrats may like that idea, but won’t budge on changing the gas tax – and so on and so forth. Just as long as Larry gets 71 votes in the House and 24 in the Senate, the means do not matter.
Because of the nature of how our state’s political process, the honeymoon for Hogan was barely existent. He had to have a budget mere hours after taking office, and some legislation he probably wouldn’t support was already being discussed in the General Assembly. Obviously Larry was working in a shadow government of sorts as he awaited inauguration, but once he took the reins that horse quickly accelerated to full gallop.
So while it’s not necessarily less government, at least Larry is working on making things more efficient and streamlined. Hopefully we can get it to such a level that it wouldn’t be missed when the reductions occur. That’s the next logical step.
You probably recall that last month I detailed a study claiming that wind-created energy saved consumers $1 billion in last year’s “polar vortex.” Ironically enough, it was released on the anniversary of the 2014 polar vortex in the midst of more unusually cold weather at a time when the favored energy source of natural gas was serving the twin masters of electricity generation and home heating.
Yet a bone of contention for the wind industry has been the overdue renewal of a production credit of 2.3 cents per kilowatt hour, allowed over the first ten years of a qualifying project’s life. A five-year extension of this credit, sponsored by Senator Heidi Heitkamp of North Dakota, was included in an amendment to the Keystone XL authorization bill in the Senate, but the amendment lost 47-51. One opponent of the credit, Americans for Limited Government, called it:
(J)ust another example of the crony capitalism that runs rampant in Washington, D.C. distorting our nation’s energy markets while encouraging the non-economically sustainable wind farming of America.
Of course, the American Wind Energy Association, while touting the increased capacity put into place last year, lamented the lack of this tax incentive:
2014 saw the completion of 4,850 megawatts (MW) in generating capacity, with cumulative installed capacity increasing eight percent to a total of 65,875 MW. That current wind capacity will avoid over 130 million metric tons of CO2 emissions annually, equal to taking 28 million cars off the road, when the current wind capacity produces generation for a full year.
However, the amount installed in 2014 still falls far short of the record 13,000 MW that the U.S. wind energy industry was able to complete during 2012.
Industry leaders blamed uncertainty over federal policy. The renewable energy Production Tax Credit was only extended for two weeks at the end of last year, and has now expired again.
“Wind is gaining strength, but as recent history shows, we can do a whole lot more,” said AWEA CEO Tom Kiernan. “We’re looking forward to working with Members of Congress from both sides of the aisle so that a reasonable, responsible tax policy is in place that allows the wind industry to continue lowering costs and investing billions of dollars in U.S. communities.”
So is it a “reasonable, responsible tax policy,” or a boondoggle?
As noted above, the tax credit is equal to 2.3 cents per kilowatt hour. According to the Energy Information Administration, the average American home uses just over 900 kilowatt-hours of electricity per month. Rounding down to 900 for ease of math, it means that each month a wind-powered home creates a tax credit of $20.70 – over a year that adds up to $248.40.
In the same AWEA release, they claim that “U.S. wind farms now provide enough power for the equivalent of 18 million typical American homes.” If this is so, then the annual cost of this tax credit would be nearly $4.5 billion. Granted, this assumes that all wind capacity in the country would qualify for the credit, but stick with me.
Yesterday our not-so-illustrious former governor Martin O’Malley blustered in the New York Times that:
(R)enewable-energy businesses still aren’t even competing on a level playing field with fossil-fuel companies, which enjoy more than $4 billion in guaranteed federal subsidies each year.
Yet if you work out the wind power tax credit, that section of renewables could get a tax break exceeding $4 billion per year, not to mention the carve-outs states like Maryland provide for renewables at the expense of less expensive and more reliable fossil fuels. The benefit of having a share of a market worth tens of billions of dollars handed to renewable energy (or, as is more common, the treatment of this rent-seeking as a penalty paid by energy companies) is rarely factored into the equation, but stands as an advantage for the renewables side that traditional sources do not enjoy.
To really get a sense of where wind power can compete, not only should we permanently eliminate the Wind Production Tax Credit, but also do away with the market share requirements for renewables. Only then can we get a sense of where the market really is for that type of energy.
There’s a reason we have cars that run on gasoline, electrical plants which run on coal and natural gas, and fervent exploration for new sources of oil, just as there’s a reason wind turbine construction came to a near-halt in 2013. The market seeks its own level.
In each Presidential cycle, there always seems to be a candidate who breaks through against the conventional wisdom choices and becomes popular because he is a new face and excites the populace. Barack Obama was one of those in 2007, and he rode that early wave of popularity all the way through to the White House. They are usually from the opposition party to the one in the White House.
But aside from Obama, usually that particular politician flames out early in the process just as Howard “the Scream” Dean did in 2004 and Herman Cain did in 2011. So whether the cycle is going back in the other direction or we’ll hear the same old song is up to the voting public.
This cycle’s early “it” candidate has been through the electoral wringer quite a bit in the last four years, though, so he’s not exactly a completely unknown quantity. But over the last couple weeks, since the Iowa Freedom Summit, the star of Wisconsin Governor Scott Walker has rapidly ascended in the Republican ranks, putting him up into the top tier of candidates. Walker drew praise from no less than Rush Limbaugh, who believed the Wisconsin governor has clearly expressed a conservative manner of governance in his tenure over a previously staunchly Democratic state. “I believe Scott Walker is the blueprint for the Republican Party if they are serious about beating the left,” said Rush.
Walker, who recently formed an exploratory committee, comes into the race as one of several successful GOP governors. It’s a group that includes recent or current governors in Rick Perry, Bobby Jindal, John Kasich, and Chris Christie, along with former governors Mike Huckabee and Jeb Bush. This group with executive experience has served to push back many of the other contenders, such as Ben Carson and Ted Cruz, who don’t have as much time in the national spotlight. (One exception in that group is Rand Paul, who remains among the top dogs.)
Yet the argument for a candidate like Walker is simple in light of the last six-plus years of having a president who learned on the job: it’s time to put the adults back in charge. In fact, you have to reach all the way down the Democratic field to Martin O’Malley to find a person who’s actually run anything on a scale that several GOP aspirants have – and O’Malley’s legacy was so poor that he couldn’t even get his lieutenant governor to succeed him in a majority-Democratic state. Otherwise, their top half-dozen contenders got their political experience mainly from the Senate and despite the oversized ego required to be a Senator they really don’t have a lot of qualifications for the job. Good or bad, four of the preceding five Presidents before Obama served as governors of their state.
The question going forward will be how much scrutiny Walker will receive, although having survived both a recall effort and re-election should mean there’s not too many secrets we don’t know about him. Much will be made about Walker’s lack of a college degree (he attended Marquette University but did not graduate) but it hasn’t stopped him from running the ship of state in Wisconsin. Consider him a magna cum laude graduate of the School of Hard Knocks.
I can see why Walker would be popular, though. He has the record of success against Big Labor Chris Christie can only dream of and beaten them back at the polls in a way John Kasich of Ohio could not. And while he doesn’t have the job creation record of a Rick Perry in Texas, his state also doesn’t have the energy potential Texas has. Wisconsin did rank fourth last year in the number of new manufacturing jobs, as industry has traditionally been the state’s economic bread and butter.
So is Walker the outsider the GOP rank-and-file is looking for? Time will tell, but he’s the buzz on social media right now and for good reason.
The Democrats send me the silliest e-mails sometimes.
Today they are whining that “The Koch Brothers plan to spend nearly $900 million to buy the 2016 election.” After I laughed, my first question to them was, “so?”
I saw the news pieces about this yesterday (here’s one) and it rolled off my back like water off a duck. Listen, I know there are people who will spend a lot of money on politics simply because they can, and as it turns out the Koch brothers are perhaps the leading conservative/libertarian donors. The Democrats don’t have a cow about the hundreds of millions bundlers and grifters on their side plunk down on the races; suffice to say that both sides do this.
But $889 million is a lot of money – heck, I’d be happy to see 1/100 of 1% of that come my way. And the great thing about the Koch brothers is that they wish to limit government, not expand it and try to cut themselves a slice of the pie.
Ever since the Citizens United decision, the liberals have cried that we need to get money out of politics. This wasn’t altruism at work, though – since most of the media outlets favor Democrats, conservatives not being able to pay for advertising and speech at election time gave the Left an advantage. That’s not to say spending more money always leads to a positive electoral result – if it did, we would be in the early days of the Brown administration, for example – but oftentimes the funding is better for incumbents and they tend to win re-election at a significant rate. Taking that advantage away helps to level the playing field.
Of course, I can see my liberal friends all worked up over someone like the Koch brothers, who are just very successful businessmen spending their money on politics. It’s better than yet another palatial mansion or a fleet of private jets, right? But compare that amount to the overall budget of just one county in Maryland – granted, it’s the largest one at a population of about one million – and $889 million is chump change. In the grand scheme of things, spread out over multiple states, it’s not a great deal of money in comparison.
So I’m glad the Democrats are whining. I don’t think there should be a limit in campaign spending because to do so would be counterproductive. My campaign spending may be miniscule in comparison to the Koch brothers, but between Kim and I we have just as many votes and that’s the key.