Newt Gingrich was right after all

I wrote a little bit about the 2012 contenders yesterday in a piece about 2016, but I’ve been seeing the evidence that Newt Gingrich’s thought and 2012 campaign plank that we could once again see gasoline at $2.50 a gallon (or less, as the recent photo above from my Missouri-based writer friend Melinda Musil demonstrates) has come true despite naysayers from just a short year or so ago. Yet despite experts who called the idea “absurd” and noted “the price of oil is set on a global market” and decreed “in the immediate term there is almost nothing you can do,” well, here we are. Musil reported yesterday her prices are now under $2 a gallon.

The reason prices are so much lower is pretty much what Gingrich proposed to do in the 2012 campaign: increased production. With fracking and other enhancements in technology allowing domestic output to increase, the benefits have been enormous. Considering that average prices going into the July 4 holiday hovered over $3.60 a gallon, the relief expressed by drivers may begin spilling over into the economy at-large. Now the average is about $2.54 a gallon, with this area’s prices relatively close to that point.

Over time, the benefits will be accruing to consumers – if an Eastern Shore driver goes 20,000 miles a year in a truck that gets 20 miles per gallon, spending $1 less a gallon for a year is equivalent to a $1,000 annual raise that’s tax free. On the other hand, this decline in prices is thwarting the state of Maryland’s scheme to take more out of our pockets by increasing the sales tax on gas, because as I noted a few days back their 8 cents per gallon projected revenue is sinking closer to a nickel. Luckily, the state government over the next four years will desperately try not to confiscate any more revenue from working folks like us thanks to the recent election, and this tailwind could help Governor-elect Hogan address the state’s structural deficit through a modest increase in economic activity.

It’s doubtful that our prices will stay quite this low, for oil at $60 a barrel means our extraction with its price point that’s a little bit higher isn’t sustainable in the long term. But there is the chance that more practice with these unconventional techniques could drive down production costs to a point where our producers could prosper at that price or even below – if we could match the Saudis’ lower extraction cost we could wipe out the OPEC cartel once and for all.

So enjoy these low prices while they last. Hopefully, this modest economic bump will kickstart other sectors and bring us prosperity despite the best efforts of some in Washington – you know, the ones who try to take credit for this energy boom despite having little to do with it.

The War on Rural Maryland: a counterattack from the hinterland

In the ongoing quest by Martin O’Malley and his administration to burnish his environmental credentials for a possible presidential run, the farmers of the Eastern Shore have been placed squarely in his crosshairs. I suppose this is MOM’s way to catch the fourteen counties not yet affected by his “rain tax,” although some local municipalities are joining in on that fun without waiting on the mandate.

At the beginning of the month, the administration began once again to try and enact the Phosphorus Management Tool, or PMT. The timing was important because the mandated public comment period comes to a close December 31, three weeks before MOM rides off into the proverbial sunset. Appeals for a public hearing have thus far fallen on deaf ears, so the comment period is really the only opportunity to make our voice heard. (Comments should be addressed to Maryland’s Secretary of Agriculture, Earl Hance. His e-mail address is earl.hance@maryland.gov.)

Needless to say, the environmentalists are thrilled about this prospect, including a “Maryland Clean Agriculture Coalition” which doesn’t have a single farming-related entity within it. They note the 48,000 pounds (24 tons) of phosphorus the PMT is supposed to alleviate. Remember that number because it comes up later.

The Clean Chesapeake Coalition (CCC) chimed in with its appeal, which states in part:

In furtherance of this objective and in the interests of its individual county members, the Coalition opposes the re-proposed regulations and requests MDA to withdraw the regulations for the reasons explained below. In sum, the implementation costs to farmers, the costs to taxpayers, the adverse impacts on local and regional economies, and the overall added strain from more piled on Chesapeake Bay Total Maximum Daily Load (“TMDL”) driven regulations far outweigh the purported reduction in overall phosphorus loading to Maryland waters and other speculative environmental benefits that may result from the PMT regulations.

In reading their ten-page letter to Secretary of Agriculture Earl Hance, the points made by the CCC appear to be as follows:

  • The economic effect on businesses is “grossly understate(d).” While the BEACON study was done in order to satisfy the demand for a study of these effects, its author admits it “was not meant to serve as a comprehensive economic impact study.”
  • Remember that 24 tons of phosphorus these regulations address, at a cost of $61 million over six years in increased expenses from farmers and state subsidies? The flow running through the Conowingo Dam spews out 3,300 tons of phosphorus a year – it’s like sticking your finger in the hole in the dike and ignoring the water pouring over the top. Meanwhile, the pond behind the dam has another 130,000 tons just waiting to be scoured out in a significant storm event.
  • Phosphorus concentration in tributaries of the Susquehanna River north of the dam is over 3.5 times greater than comparable tributaries on the Eastern Shore.

On that last point, it’s helpful to use the illustration the CCC provides:

Phosphorus is loaded into the Bay at an average annual rate of 3,300 tons (6,600,000 lbs.) from the Susquehanna River; not including what is scoured from the full reservoirs in the lower Susquehanna during storm events and on a more regular basis. Maryland’s annual average phosphorus loading to the Bay from agriculture of 985 tons (1,970,000 lbs.) is minimal when compared to the Susquehanna River.

Earlier this month, Exelon withdrew its request for renewal of its hydroelectric license at Conowingo Dam because more study of its effects on water quality downstream were desired. The utility has agreed to spend up to $3.5 million on studies of water quality downstream. It appears they’ve also become aware of the detrimental effects on the Chesapeake Bay, yet the environmentalists don’t seem to be interested nearly as much in Exelon and in the Conowingo Dam as they are the poultry industry.

A Washington Post story over the weekend noted the controversy, including remarks from Wicomico County farmer Lee Richardson, who seems to be something of a go-to guy when it comes to poultry growers. Many of the reader comments on the Post piece, though, illustrate the divide between the urban and suburban hipster whose idea of poultry is the organic chicken they buy at Whole Foods and the beleaguered grower who already has to comply with numerous state and federal guidelines without having to worry about arrangements to truck chicken droppings out of the area. The Post readers blame the industry itself, saying that its not carrying its weight in addressing the concerns about water quality – bear in mind these are the people who were just fine with enacting a nickel-per-bird “chicken tax” called the Poultry Fair Share Act which was supposed to raise $15 million a year.

In that fiscal note from the Senate bill, it’s noted that the Eastern Shore has “over 700″ poultry farmers. For ease of calculations, I’ll set the number at 750. If the cost to farmers is $22.5 million over 6 years – as estimated in the BEACON study – it works out to $30,000 per farmer over the six-year period or $5,000 a year. That’s a significant compliance cost – assuming, of course, it’s really true because government estimates are generally optimistic on revenues and short on expenditures.

So here’s hoping that our efforts can bear fruit and stop this particular piece of madness once and for all. There’s still time to comment.

Another chance to help out

Most people who read this site realize fairly quickly that its bread and butter is political news and commentary; oftentimes it references and considers a proper course of action on legislation which is introduced, debated, and voted on. Having studied our state legislative website for hours on end over several years and watched it evolve from a relic from the 1990s to a more functional site thanks to a fairly recent makeover, I have a pretty good idea of how to navigate through it to get the things I want out of it, but there are still some elements that it lacks.

I also have become aware that Maryland can be a trendsetter in legislation, but there are times where other states which have sessions that are longer or year-round consider legislation that’s sure to be eventually contemplated in Maryland – speed cameras are an example, as other states had them first before we passed the enabling legislation. And being as close to Delaware as we are, there is the potential for a spillover effect from bills they debate and pass as well.

Those who are truly in the loop about such things rely on a small number of websites that specialize in tracking legislation as it moves through the various states and Congress. StateNet, CQ Roll Call, Bllomberg Government, and Westlaw are examples of entities which perform this service for a fee, one which often runs into the five figures annually. While they are very useful sites, that sort of cost isn’t always attainable for a non-profit or advocacy group like a Maryland Pro-Life Alliance, Maryland Citizen Action Network, or Delmarva Poultry Industry. Their needs may be limited to just one state or a small group of states like those comprising Delmarva, along with relevant federal legislation.

You may ask where this is going, so let me let you in on some good news. Now it’s possible to get the legislative information you need in almost real time at an affordable price while helping maintain the political news and commentary you’ve enjoyed for over nine years. Allow me to introduce you to TrackBill.

TrackBill is a system which allows its users find the legislation they are interested in and track its progress through the state or federal legislative body of your choice. As they describe it, “TrackBill is a simple, yet robust, platform empowering government affairs professionals to search, track, and report on legislation in the US Congress and 50 state legislatures. Professional service firms, Fortune 1000 companies, and nonprofit organizations rely on TrackBill to spend less time tracking legislation and more time impacting the outcome.”

So let’s say you are a Maryland Citizen Action Network and you’re interested in legislation relating to education or Common Core. Each day you can receive an update on the progress of any Maryland or federal legislation dealing with these subjects and use that to spread the word about key votes and hearings. Delmarva Poultry Industry can do the same for all three states (Maryland, Delaware, and Virginia) plus other key poultry-producing states to keep an eye on their pet issues. There are three pricing levels:

  • A single state
  • Up to ten different states
  • Nationwide (all states)

Each of those also includes Congress, so even a statewide group has the advantage of knowing about federal legislation as well. This can be useful for keeping tabs on a state’s delegation to Congress.

I will cheerfully grant that this service isn’t for everybody. But TrackBill sought me out to ask if I would consider being their Maryland partner, and I decided to accept this new advertiser on a commission basis. Simply put, for each package they sell through my site (which has its own landing page) I get a percentage, and insofar as I know I’ll be the sole Maryland outlet for awhile.

This is one way to support a startup company which is trying to help out the little guys (packages range from just $999 to $1,999 a year, which is far less than five figures) as well as the one conservative Maryland political blog you’ve come to respect. I don’t do radio nor do I plaster my logo all over stuff at an online store – my energy is focused on providing the best content I can each day.

So I call on those of you who read here and are activists for various interest groups to see and hear what the fine folks at TrackBill have to show you and say. They say knowledge is power, so the more you know the better chance you have of making positive change. Since I get a trial version to play with, I almost can’t wait for the “90 days of terror” we call the Maryland General Assembly to start so I can see what all this website can do. Judging from the little bit I’ve done so far, I think it will be a great resource for all of us!

To the left, the world is not enough

I’ve probably given as many pixels to failed candidate Rick Weiland as anyone outside his native South Dakota, but it’s because I think he’s very useful as a gauge of reactionary liberalism in a part of the nation which has maintained a streak of populism surprising for such a rural area. While the South has gone almost completely Republican, those in the rural Midwest will occasionally elect Democrats they deem to be centrists or populists on a statewide level. South Dakota has rejected Weiland several times, but it doesn’t mean he’ll stop trying and to me that exhibits precisely how the far left operates and why it’s important to hear about their desires. (He could also use the money since he can’t manage his campaign funds, but I digress.)

So yesterday, in the wake of the debate about CRomnibus, I received a missive called “We can’t breathe!” from which I quote in part:

The revenge of the money changers is in full swing in Congress today.

Let the big banks have their swaps back. Let Las Vegas advertise itself with your tax dollars. Increase by 1000% the amount billionaires can contribute to buy off our political parties.

Men of color are not the only ones they have in a choke-hold – now they’ve got all of us – and it’s way past time to tell them none of us can breathe!

Emboldened by the Obama-haters they just elected, Wall Street is readying the nooses for Obamacare and Dodd-Frank. They think they can’t be stopped.

But WE can stop them!

24 states allow initiatives and referendums – 24 states where you can show them exactly what you think of their choke-hold on the rest of us.

So let’s put what they are doing to us on the ballot in those 24 states and find out who is right.

(snip)

Help us close down the debt on my just completed Senate campaign, and fire up our initiative and referendum team. Because we are going to turn our little state into a laboratory for direct democracy.

A laboratory and an export market.

Let’s put Citizens United, Ferguson, and Big Bank plutocracy on trial at the ballot box.

Because when you go down fighting instead of whimpering, a funny thing often happens: people notice, then they think a little, and pretty soon they’re fighting too.

If you have to vote on it you have to think about it.  So let’s put our ideas directly on the ballot and pick a fight. (All emphasis in original.)

This is the mirror-reverse of the strategy Maryland Republicans tried in 2012 to petition already-enacted legislation to referendum, which failed. Looking back, I wonder if the Maryland Republican Party isn’t kicking itself for not placing the “bathroom bill” or 2013 gun bill on the ballot this year – we may have even had a more shocking victory by repealing both laws. (The counter-argument, of course, is the “sleeping dog” school of thought which liked the Democrats’ low turnout – perhaps the inclusion of those ballot measures would have hurt Larry Hogan’s chances by bringing out more liberal Democrats.)

It’s also true that, even in the face of a Republican wave election, four states that had a minimum wage increase on the ballot, including the aforementioned South Dakota, passed these measures while electing Republican Senators – in Alaska and Arkansas the Democrats seeking re-election to the Senate were defeated on that same ballot. (Nebraska was the fourth state.) Again, this shows the streak of populism which occurs in the Midwest.

Obviously Weiland sees a trend, exhibited in his home state, where direct democracy can succeed in accomplishing those things a representative republic would not. As the minimum wage example shows, people can be fooled into voting against their best interests – that’s why we were founded as a Constitutional republic.

Weiland’s mindset is shared by a lot of people, though. Witness the populist appeal to Southern voters espoused by the writer of the linked New Republic piece, Michael A. Cooper, Jr., who pleads with his party:

Speaking as a southerner, we need help, not from the DCCC but from government to deal with issues like homelessness and drug addiction.

These aren’t esoteric concerns Beltway liberals tut-tut about like global warming or political correctness, but true pocketbook issues which unfortunately tend to affect the poorest among us. Conservatives would prefer these issues be dealt with on more of a faith-based level through private charity but it can also be addressed by local and state governments. (By the way, thanks to Jackie Wellfonder for bringing the New Republic piece to my attention just in time for me to add it in because it fit the point so well.)

Just as the right has its TEA Party movement which has cooled to the mainstream Republican party – and for good reason – many activists on the left are embracing their new savior as Senator Elizabeth Warren, whose populist screed against Wall Street has won the backing of elements of the Democrat Party who think Barack Obama sold them out and Hillary Clinton is too close to the right wing. They are also fed up with the government, but stare at the problem from the other side of the fence because they want the power of government to regulate corporatism out of existence, or rein it in as fascism dictates.

Meanwhile, while these Warren acolytes whine about what Barack Obama is not providing them, they fail to see that many of their goals are being realized anyway. Truly it’s the Right that’s not being served.

As the new year arrives and Republicans take over Congress (along with the governor’s chair in Annapolis) we will begin to see all the stories and tales of woe unreported on over the last six years. There’s a lot of work to do, and Republican leaders in Congress didn’t get off on the right foot by passing CRomnibus. We must demand, now that we’ve granted them the opportunity to complete the FY2016 budget in regular order as they’ve wished to do for several years, that our priorities be the ones funded and the mistakes of the last six years deleted.

Perhaps we can also do our part in using the referendum system in advancing conservative causes as well. Two can play that game, and it’s just as important to motivate our voters as it is for the other side to buy theirs.

The District goes to pot

It’s definitely a peripheral story to the overall House adoption of CRomnibus, but one provision which was passed in the bill prohibited the District of Columbia from enacting a recently-passed district referendum allowing the decriminalization of marijuana. Because the District isn’t one of the 50 states, Andy Harris remarked that the supporters of the law could leave. As quoted in Politico:

“That’s the way the Constitution was written,” Rep. Andy Harris of Maryland said in an interview Wednesday. “If they don’t like that oversight, move outside of the federal district to one of the 50 states that is not covered by the jurisdiction of Congress as a whole.”

Needless to say, Harris’s Facebook page is littered with protests – not about his vote on the overall CRomnibus, which he voted in favor of – but about the vote against pot, presumably from District residents who didn’t care for his vote and claim he’s in the pocket of Big Pharma. Ironically, most of these comments are on a post alerting constituents to the opportunity for public comment on fee increases at Assateague National Seashore.

Yet this re-ignited a thought I’ve had before – one which wouldn’t necessarily make Republicans happy, but one which I think would more truly reflect the intent of our Constitution. In Article 1, Section 8 it established one of the duties of Congress as:

To exercise exclusive legislation in all cases whatsoever, over such District (not exceeding ten miles square) as may, by cessation of particular states, and the acceptance of Congress, become the seat of government of the United States…

The key is the portion in parentheses, While the District was originally laid out as the maximum ten miles square, carved out of Maryland and Virginia, the Virginia portion was retroceded to the commonwealth in 1847. But since many government functions exist outside the District, the question becomes one of whether the District in its current form has outlived its usefulness. For decades denizens of the District have griped about “taxation without representation.”

Because the Constitution only dictates a maximum size and not a minimum size, perhaps the solution lies in retroceding all but the immediate seats and symbols of government – the White House, the Capitol, the National Mall, and various memorials – back to the state of Maryland, with the city of Washington having the same status with its Maryland affairs as does Baltimore City. Instead of a half-million or so, living in the District would only apply to a handful of citizens. This could be made effective in 2020 so there would be time for transition and Congressional and local representation could be redetermined for the somewhat larger state of Maryland. The effect would be similar to the Vatican City as part of the overall city of Rome.

Naturally Republicans in Maryland and nationally would be dismayed because the advantage in voter registration and representation already enjoyed by Maryland Democrats would be enhanced. But if we want to make the pot-smokers happy that they aren’t under the control of Congress – which really shouldn’t be concerned about the affairs of a city of a half-million in a population of over 300 million – perhaps this is the better solution.

It’s a better solution than making the District the 51st state, as some have wanted, or simply giving in and elevating their status by allowing them a House member and two Senators. The intent was creating the seat of government, not a state which would be placed above others by virtue of being the national capital. While we’ve ignored the Constitution numerous times over the nation’s history, here’s a chance to restore the intent of the Founders.

Update: I should mention that Harris gave his side of the marijuana story in the Washington Post today.

The start of something good?

Last week, Mark Green at the Energy Tomorrow blog posted a critique of the proposed fracking regulations Maryland may adopt in the waning days of the O’Malley administration. In his piece, Green stressed that Maryland needed to adopt “sensible” restrictions but feared Maryland would go too far. It was echoed in the Washington Post story by John Wagner that Green cites.

But the money quote to me comes out of the Post:

“In the short term, as a practical matter, the industry will probably choose to frack in other states than Maryland where the standards are lower,” O’Malley said. But in the longer term, he said, “it could well be that responsible operations may well choose to come here.”

Or maybe not, which seems to have been the goal of O’Malley and Radical Green all along. It’s funny that they don’t seem to have the objections to wind turbines dotting the landscape despite their own health issues. Certainly no one studied them to death.

Being a representative of the energy industry, Green naturally argues that “sensible” regulations are similar to those already in place in states which already permit the practice. As he notes:

Hydraulic fracturing guidelines developed by industry – many of them incorporated into other states’ regulatory regimes – offer a sound approach proved by actual operations.

I can already hear the howling from Radical Green about the fox guarding the hen house, and so forth. But is it truly in the interest of industry to foul its own nest?

On the other hand, the success of fracking and other domestic exploration may create an interesting situation. Even back in October, when oil had declined to $90 a barrel from a June peak of nearly $115 a barrel, analysts were speculating on the effects the drop would have on the budgets of OPEC member nations. Now that oil in closing in on $60 a barrel, the economic effects on certain nations will be even more profound, and contrarian economic observers are already warning that the oil boom is rapidly turning into a bust with a ripple effect on our economy.

Even the revenue scheme by which Maryland would collect a sales tax on gasoline depended on gas prices staying somewhere over $3 a gallon. Assuming the price of gasoline stays at about $2.70 per gallon through the first of the year, the predicted 8-cent per-gallon rate will only be 5.4 cents. (The sales tax on gasoline is slated to increase to 2% on January 1.)

In any case, there is a price point at which non-traditional oil extraction such as fracking or extraction from tar sands – the impetus for the long-stalled Keystone XL pipeline – becomes economically non-viable. I had always heard that number was $75 per barrel, which was a number we had consistently hovered above for the last half-decade. Now that we are under that number, the question of exploration in Maryland may be moot for the short-term, although the price of natural gas is only slightly below where it was this time last year so that play is still feasible.

Whether the decline in oil prices is real or a manipulation of the market by a Saudi-led OPEC which is playing chicken with prices to try and restore its bargaining position by outlasting domestic producers, it may be yet another missed opportunity for Maryland as it could have cashed in during a difficult recession and recovery if not for an administration which believed the scare tactics and not what they saw with their own eyes as neighboring Pennsylvania thrived.

‘Made in America’ gains strength in November

It was good news in November for manufacturers, at least as expressed on the employment front – based on the November jobs report and revisions to previous reports, the sector gained 48,000 workers over that timeframe.

Naturally, manufacturing supporters were cheered by the news, with the union-backed Alliance for American Manufacturing (AAM) noting that Barack Obama is now over 1/4 of the way to his promise of a million new manufacturing jobs in his second term, while economist Chad Mowbray of the National Association of Manufacturers (NAM) trade group pointed out robust growth in new orders was beginning to translate into new employees.

However, both groups saw some clouds among the silver linings. In the case of AAM, their complaint was the “failure to stop currency manipulation by China and Japan” while NAM cited “headwinds such as rising health care costs and regulatory burdens.”

Each complaint has some validity, but for the majority of manufacturers the specter of operational costs is a key deterrent to expansion or even staying in business. While it’s not manufacturing in a traditional sense – and certainly applies on a more limited scale than federal edicts which can overturn an entire industry – one example could be how the local processing of chicken would take a blow from ill-advised state phosphorus regulations that have the potential to drive the poultry business to different areas of the country. Needless to say, such a result would be devastating to this part of the state, leaving just tourism and some limited local services to provide the employment to support our region.

And while I’m mentioning Maryland politics, I may as well make one other pronouncement here. As I followed his gubernatorial campaign for a year, I paid attention to how Ron George studied and shared his thoughts on the prospect of making things in Maryland. I hope Larry Hogan can utilize Ron’s passion and expertise in his administration. While we would love to score an auto plant or other similarly large employer in this area of the state, a more realistic goal might be to, as Ron stressed during his campaign, fill up the existing facilities and areas several towns on the Eastern Shore have already laid out for manufacturing. To use a local example, adding 100 jobs for Wicomico County residents would immediately shave 0.2% off our unemployment rate, not to mention bring up the standard of living for everyone else.

A week ago yesterday we celebrated Small Business Saturday, but the best way to support them (other than shopping there) would be to make their lives easier by calling off the government regulator’s dogs and encouraging them to grow so that sometime down the road we can be the manufacturing power we once were.

Baltimore keeps their bags (at least for now)

Back in November I informed you about the bag tax in Baltimore that turned into an outright ban. Well, the same folks who alerted me to the ban let me know that Baltimore Mayor Stephanie Rawlings-Blake vetoed the measure, a veto which is expected to survive a Council vote.

I do have to comment about my PR friends’ assessment of the situation, though:

It was outrageous for the Baltimore City Council to think it could play games behind the scenes and pass a bill without any public input. Thankfully, this abuse of power did not go unchecked.

I suspect if they were a cloth bag maker, though, this ban would have been just hunky-dory. Regardless, the needs of Baltimore grocers and retailers will continue to be served in part by Novolex, the plastic bag supplier who hired the PR firm. It’s likely many of those bags come from one of Novolex’s 12 plants, with the closest being in the central Pennsylvania hamlet of Milesburg. With the exception of one Novolex plant in Canada, you’ve got to like that American manufacturing.

Yet the question has to be asked: why does a plastic bag company need a PR firm aside from having to deal with these ill-advised bans and taxes?

At the risk of dating myself, I came of age before the question of “paper or plastic” ever came up, and long before the paper bag became a rare commodity. In my youth, those paper bags were filled by the pockmarked teenage bag boys who took the items from the checkout lady who keyed in the prices (stamped with ink onto the can or box) in rapid-fire fashion on her cash register. That bag boy also took the paper bags out to your car.

So I remember how skeptical people were about the plastic bags because they were so small and it took four or five to hold what it took a couple paper bags to handle – not to mention the fact the bag boy was rendered obsolete. But you rarely had to worry about a plastic bag tearing apart, and while there were lost opportunities in creating book covers and having a handy supply of bags for the burn barrel (yes, we lived in the country) we eventually found plastic bags were much more useful. Moreover, for every plastic bag which ends up polluting a stream or blowing down the street, there are probably twenty to fifty which were recycled or disposed of properly.

But my original question still remains: with the crime, poor schools, and lack of opportunity in Baltimore, why is a plastic bag ban even taking up the time of their City Council? Rest assured they will try it again in a year or two, as will the Maryland General Assembly even with a pro-business governor. Liberals never seem to take ‘no’ for an answer.

So I suspect that Edelman will keep my name on their mailing list and let me know of any other local threats to their plastic bag-making client. Cloth bags just aren’t my style anyway.

A lack of standards

In 2007, Congress passed (and President Bush regrettably signed) a bill which was, at the time, a sweeping reform of energy policy. As part of the Energy Independence and Security Act of 2007, the EPA was supposed to regulate the Renewable Fuel Standard on an annual basis, with the eventual goal of supplying 36 billion gallons of renewable fuel by 2022 – the 2014 standard was set at 18.15 billion gallons (page 31 here.) By the way, this is the same bill that did away with incandescent light bulbs.

Unfortunately, for the second straight year the EPA is late with its update and last month they decided to take a pass altogether on 2014. Mark Green at the Energy Tomorrow blog writes on this from the petroleum industry perspective, while the ethanol industry took the decision as news that the EPA was staving off a possible reduction in the RFS.

We all know hindsight is 20/20 but it should be noted that, at the time the EISA was written, the conventional wisdom was in the “peak oil” camp, reckoning that American production was in a terminal decline. Yet we’ve seen a renaissance in the domestic energy industry over the last half-decade despite government’s best attempts at keeping the genie in the bottle. So the question really should be asked: is the Renewable Fuel Standard worth keeping in this new energy era, or should the market be allowed to function more freely?

It goes to show just how well the government predicts activity sometimes. They assumed that the technology behind creating biofuels from agricultural waste would supplant the need for corn-based ethanol in time to maintain the amount required and also figured on gasoline usage continuing to increase. Wrong on both counts; instead, we are perhaps in a better position to invest in natural gas technology for commercial trucks as some fleet owners already have – although long-haul truckers remain skeptical based on better diesel engine fuel economy, which ironically came from government fiat - than to continue down an ethanol-based path.

But the larger benefit from removing ethanol-based standards would accrue to consumers, as corn prices would decline to a more realistic value. Obviously the initial plummet in the corn futures market would lead to farmers planting more acreage for other crops such as soybeans or wheat as well as maintaining virgin prairie or placing marginal farmland, such as thousands of acres previously reserved for conservation easements, back out of service.

Poultry growers in this region would love to see a drop in the price of corn as well, as it would improve their bottom line and slowly work its way into the overall food market by decreasing the price consumers pay for chicken.

I believe it’s time for Congress to address this issue by repealing the RFS. Unfortunately, it would take a lot to prevail on many of the majority Republicans in the Senate because they come from the major corn-growing states in the Midwest and agricultural subsidies of any sort are portrayed as vital to maintain the health of rural America. Yet the corn market would only be destabilized for a short time; once the roughly 30% share of the crop used to create ethanol (over 4.6 billion bushels) is absorbed by the simple method of planting a different crop or leaving marginal land fallow, the prices will rise again.

Until the common sense of not processing a vital edible product into fuel for transport prevails, though, we will likely be stuck with this ridiculous standard. Corn is far better on the cob than in the tank, and it’s high time the EPA is stripped of this market-bending authority.

No problems at “our” Walmart

If you wonder why there’s just the average hustle and bustle at your local Maryland Walmart today, there’s a good reason – a court order given last year keeps pro-union protests off Walmart property. But the UFCW keeps trying, encouraging supporters to instead tie up the phone lines in protest.

If you live in Arkansas, Colorado, Florida, Maryland, Ohio, or Texas, we ask that you remain off of Walmart property and tweak your action by calling the store manager on the phone to inform them that you/your group is there supporting #WalmartStrikers rather than delivering anything to the store.

I don’t have to go to Walmart today, but I did have to go to a different store close by Walmart so I took a look around. It’s near a corner where union picketers have stood before so in reality visibility is somewhat better for any who would protest Walmart anyway – although Wendy’s and McDonalds probably aren’t happy about it. Yet today the corner was busy with auto traffic and no protests in sight.

In other areas around the country, though, left-leaning news sites are gleefully reporting protests, including a major one in Washington, D.C.

But Walmart wasn’t taking this lying down, nor were they going to depend on media to share its side of the story. I noticed this commercial played during the football games last Sunday and yesterday.

In reality, Walmart is like any other large company – employees who perform better or do more to improve themselves by taking advantage of opportunities the company may offer tend to advance.

Moreover, the $15 per hour demand by the UFCW smacks of hypocrisy when, as Diane Furchtgott-Roth writes, union employees in other UFCW union stores make far less after years on the job. Perhaps the Black Friday protests should occur at UFCW headquarters.

But what happens if employers knuckle under and pay $15 per hour? Indeed, for many it would be a tremendous raise, but the increased labor costs for those employers would ensure those who survive the immediate wave of layoffs and automation which would naturally take place with the vast wage increase for millions of workers would watch inflation (and a higher tax burden) erode their gains to a point where the process would have to begin anew in a year or two as advocates would demand $20 an hour to keep pace.

You may recall earlier this year the CBO came out with a study that predicted a minimum wage increase to $10.10 per hour could cost at least 500,000 jobs, and perhaps as many as a million. (At the same time, a smaller increase to $9 an hour would only cost 100,000 jobs and have a slim chance of increasing employment.) While the study didn’t document a raise to $15 per hour, it’s likely job losses would be in the millions based on the data compiled.

Until the UFCW looks at increasing wages and benefits in stores they do represent, their targeting of Walmart rings hollow.

A long, cold winter

I’ve referred to this writer recently, but energy maven Marita Noon had a piece at NetRightDaily today talking about the difficulties customers in the Northeast may have this winter with electricity. It got me to thinking about the local situation, as we had a rough winter last year and indications are we’ll have more of the same this year.

While the Eastern Shore of Maryland is situated in a slightly better place for solar electricity than the Northeast, the reality is that very little of our electricity comes from renewable sources. Instead, the two closest power plants in the Delmarva Power region where we live are in Vienna, Maryland and Millsboro, Delaware. Both of those plants were once owned by Delmarva Power, but were sold in 2001 to NRG. According to NRG, the Vienna plant is a 167 MW oil-burning plant while Indian River in Millsboro uses coal to create 410 MW (and has a 16 MW oil-burning unit as well.) Another plant under construction in Dover, owned by Calpine, will add 309 MW of natural gas-fired capacity once it comes online beginning next year. Calpine also owns a number of small, locally-based “just in case” plants in the region as well – two of these oil-burning facilities are in Crisfield, Maryland and Tasley, Virginia.

The other regional power supplier, Choptank Electric Cooperative, produces about 2/5 of its supply from plants in Cecil County, Maryland and Virginia with the remaining electricity being purchased from various regional suppliers.

Infrastructure is also a concern. Several years ago there were plans to create the Mid-Atlantic Power Pathway, a transmission line which would extend from Virginia to Delaware, connecting the Calvert Cliffs nuclear plant and others in that region with the aforementioned Vienna and Indian River plants. But those plans were scrapped a few years ago due to slowing demand, which is unfortunate because our transmission otherwise comes exclusively from the north through Delaware.

In order to create good jobs, we need reliable sources of energy. Unfortunately, regulations aren’t on the side of plants like Vienna or Indian River so it may be time to think about encouraging investment in another natural gas-based power plant on Delmarva, with the requisite infrastructure to ensure supply. According to Calpine, the Dover site can expand to double its capacity but that would only partially replace the Indian River plant if it is forced offline. Realistically, though, the new power plant would probably be best sited in Delaware as it’s closer to the main body of pipeline infrastructure for natural gas.

But the new power plant is good news for the region, particularly in light of the issues Noon points out in her piece on the Northeast. With thousands of consumers using electricity to heat their homes in one way or another – either directly through baseboard heating or with a furnace and blower or pump – reliability is key. And when solar panels are buried in snow or wind turbines are frozen in place, they’re not much use.

A tone-deaf city government

It took several months longer than anticipated – and we don’t yet know exactly what the toll will be – but last night 80 percent of Salisbury City Council gave 100 percent of local property owners another tax to pay by approving a stormwater utility on a 4-0 vote, with newly-appointed Jack Heath being absent.

Council President Jake Day “doesn’t expect” the fee to be more than $20 a year for homeowners, and expects to raise $1.25 million annually from the “rain tax” – and yes, I think the moniker is appropriate given the business fee will be determined by the amount of runoff they produce. According to the latest Census data, though, there are 13,401 housing units in Salisbury so my public school math tells me that businesses are going to pay almost 80% of the total, to the tune of almost $1 million annually.

Interestingly enough, I was quoted in the Daily Times story from last Thursday from a post I wrote in February when the idea came up, and I think the point is still valid: we don’t know what impact there will be from this tax hike on the overall health of the Chesapeake Bay. It seems to me that the timing isn’t very good on this one, particularly as the state and county are working to make these entities more business-friendly and new taxes tend to work in the opposite direction.

I was curious about something, so I took a look at the city’s latest budget that was adopted in May. In it, Mayor Jim Ireton points out that “(t)his budget shows levels of monetary surplus at incredibly healthy levels for both the City’s General Fund and the City’s Water and Sewer Utility.” But it also is using some of the proceeds from the wastewater treatment plant settlement on sewer infrastructure, so why do they need this new tax now? Granted, it’s also stated in the budget that ratepayers get a 2.5% break on water and sewer rates this year, but the extra $20 fee will likely eat that savings up and then some.

The budget also makes the case that the $100 a month, give or take, that a residential property owner pays in property taxes provides a cornucopia of services, a palette which includes stormwater management. So we’re already paying for the service with our property taxes, but instead of adding the penny or two that would cover the additional services the city wants to create a new special fund. Currently the Water and Sewer Fund comprises roughly 1/3 of a city budget which runs about $50 million, with property taxes chipping in about $22 million toward the General Fund. With the city of Salisbury increasing the tax rate regularly, it’s doubtful we’ll see a corresponding decrease in property taxes to offset the new fee.

And while I’m not an expert on the city charter by any means, my question is why can’t the purview of the Water and Sewer Utility (which has a large surplus) be simply expanded to stormwater? Generally infrastructure improvements to the stormwater system involve changes to the remaining utilities as well, so the same work may well come out of two (or three) different funds given the city’s idea. It may be more efficient and less taxing on the city’s residents to amend the charter to add stormwater to the existing water and sewer utility.

So let’s review: the fee would cover something which is already supposed to be paid for, in an amount we haven’t quite determined yet, to achieve projects for which we don’t know the scope but are supposed to address a problem Salisbury contributes little to and is only compelled to deal with because the state refuses to stick up for itself and tell the EPA and Chesapeake Bay Foundation to go pound sand. What could go wrong?

Just remember all this come Election Day next year.

Update 11/26: I actually stumbled upon this as I was researching some items for my next post today, but it’s worth pointing out that Salisbury has justified its adoption of a stormwater utility by saying the town of Berlin has one in place.

The same group, called the Environmental Finance Center – which is part of the University of Maryland but serves as a regional hub for an existing EPA program – did studies to justify the need for Berlin (2012) and Salisbury (2013). The results were pretty much the same, although the suggested fee was higher in Berlin than it was in Salisbury, where they recommended a $40 annual fee for homeowners. Notably, the Salisbury report also recommends fee increases after a period of years – see the chart on page 15. So the problem won’t ever be solved and the program will run an annual surplus that likely won’t be rebated to taxpayers. Moreover, unlike a property tax from which religious-based entities have traditionally been exempt, they have to pay the fee as well.

Also, the fingerprints of the notoriously Radical Green folks of the Town Creek Foundation are on these reports. It’s a group which believes:

We think that true sustainability and resilience – in an increasingly unstable, crisis-prone world – will depend on fundamental transformations of the systems (including the value systems) by which everyday life is organized. These include the systems by which we make and consume energy, food, and materials, and the systems by which we make and enforce social decisions.

We’ve already seen the results of a national “fundamental transformation” over the last six years, and many millions would like to transform back to where we were. But a tone-deaf government just wants to take more out of our pockets rather than prioritize existing resources.

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