The quest for energy security – and sanity

It’s been awhile since I wrote about the energy industry but things are always happening there and I decided to take a peek because of some items I’ve spied in daily updates I receive from the American Petroleum Institute. I like to know what’s going on in important growth industries which profoundly affect our daily lives.

As one might expect, API CEO Jack Gerard is a leading spokesperson against what he calls Barack Obama’s “irrational” energy policy. It makes sense when you consider that the United States is now the world’s leading producer of both natural gas and oil, thanks in large part to recent advancements in fracking technology which have revitalized the once-moribund American energy industry. Speaking before an audience in New Orleans, Gerard noted:

The choice before us is whether we pursue an American future of energy abundance, self-sufficiency and global leadership or take a step back to the era of American energy scarcity, dependence and economic uncertainty.

It is that simple.

There’s a clear benefit to having the abundant resources we do. I was only nine years old when the first oil crisis hit in 1973, but I remember the long gas lines and jump in prices. If you consider the long-term effects in policy and marketing, such as the adoption of fuel economy standards and the push toward smaller cars, ask yourself what may have happened if we hadn’t become so dependent on Middle Eastern oil. Would we have had the resulting mid-1970s recession?

Obviously we have recessionary conditions now in spite of the current oil boom, but there’s a valid argument that opening up the spigots (so to speak) and allowing more extraction would push the economy into more consistent growth.

Another example of an irrational energy policy is our continued ethanol mandate, about which API is asking for another cutout of a mandated increase. The EPA decided not to change the allotment for this year, but needs to finalize the rule.

To me, there are two telling facts about this story: one is that API has given up on legislative relief from Congress and appealed directly to the EPA, which speaks volumes about the transition of our supposedly limited government into a fiefdom unto itself.

The second is the sheer volume of interests on the side of eliminating the mandates entirely – everyone from motorcyclists who complain about ethanol’s deleterious effects on their engines (as is the case for other small engines from boating to lawn equipment) to the poultry producers who have seen corn prices artificially propped up due to the amount of corn necessary for creating ethanol and even environmental groups who fret that the corn-based product is actually worse for the environment. Obviously the corn growers love the price support, though, and farmers have their own determined lobbyists who would love to see an even higher ethanol blend called E-15 allowed.

API and other ethanol opponents are hinging their future hopes on a more business-friendly Congress in the next term, though.

Irrational energy policy on the state level may occur after this fall in Colorado, a state which has taken advantage of the energy boom but may fall prey to the scare tactics environmentalists use to portray fracking in a negative light. There Governor John Hickenlooper, a Democrat, sees his state’s energy success being threatened by a petition drive to place further restrictions on fracking on their November ballot. Hickenlooper is quoted in Bloomberg as pointing out, “(t)hese measures risk thousands and thousands of jobs and billions in investment and hundreds of millions of dollars in state tax revenue.”

I found this interesting because the proposed restrictions would prohibit drilling within 2,000 feet of structures, a change which energy companies complain would “effectively ban” fracking in the state. Their current restriction is 500 feet.

Now something which came out the other day to little fanfare was a draft report outlining some of Maryland’s proposed fracking regulations. The original recommendation, based on other states’ best practices by the University of Maryland Center for Environmental Science, Appalachian Laboratory, was for a 500-foot setback from wells. That guidance was expanded by the Department of Natural Resources and Maryland Department of the Environment to – you guessed it – 2,000 feet. (Page 18-20 here shows the recommended DNR/MDE changes.) In short, these regulations are intended to “effectively ban” fracking in Maryland to the detriment of not just our far western counties, but any of the regions of the state (including the Eastern Shore) that have shale deposits underneath. Talk about an “irrational” energy policy!

So here’s the deal: Maryland wants to depend more and more on methods of generating electricity which lack reliability and increase cost to consumers. Yes, that’s sounds like “smart, green, and growing” to me – not too bright, costing more green, and growing the desire of businesses to leave the state to find a place where energy exploration and extraction is encouraged and rates therefore are cheaper.

I know the Hogan administration would want a “balanced approach” to energy in the state, but I would have to hope part of that balance is returning to the best practices suggested by UMCES and not the onerous restrictions which would effectively ban fracking in the state.

The 80-20 rule (part 2 of 2)

I had originally intended to do a short post noting that Ron George is still in the race and garnered the endorsement of the Conservative Victory PAC, which said of George:

Ron’s plan for economic recovery and development coupled with his knowledge of the issues as a Delegate gives us full confidence that he is the right candidate for the job.

Ron has shown that he knows how to take on Democrats and win when he beat Democrat House Speaker Michael Busch as the top vote getter in their majority Democrat district.  We have great confidence in his ability to draw a sharp contrast between the liberal policies of Brown, Gansler, and Mizeur and our conservative vision for Maryland.

We would like to thank the other candidates and wish them all well on Tuesday, June 24th.

But then I was made aware of a lengthy piece put together by the Ron George campaign, which takes the form of a 16-page newsletter. It’s actually a very nice summary of Ron’s campaign and I wish he had finished it a month or two ago. Had he done so, he may not be lagging in the polls – although polls can be less than meaningful in a low-turnout election as this promises to be.

Being familiar with WordPress, though – as I use the platform to create monoblogue – I found it really interesting that work on this newsletter must have began nine months ago, as the source file comes from September 2013. Maybe at that time he was expecting more fundraising, because the mailing would have been quite pricey.

Knowing that, it’s interesting to speculate why he kept the information on pages 10 and 11 – where he points out reasons not to vote for David Craig and Larry Hogan, respectively – in his pocket for so long. I suppose I should be pleased with that since Ron had hitherto run a fairly positive campaign.

I thought this statement on two others intriguing as well:

My friend Dan Bongino was about to switch to run for a seat in Congress. And Charles Lollar, besides repeating whatever Dan Bongino said, lacked any understanding of how government worked.

Sounds like George would have passed if Bongino ran, but we’ll never know.

Yet taking a page from the Maryland Liberty playbook, Ron takes decades-old votes and statements from both Hogan and Craig out of context.

Take for example this point:

When running for Delegate in 1990, the Baltimore Sun reported, “Craig said he would work to get the state to give counties greater latitude to raise taxes or lower them, thus reducing their reliance on property taxes” (Baltimore Sun, November 4, 1990). This would have enabled the counties to raise many taxes without approval or debate by the state legislature, which give a greater proper vetting of tax-raising proposals. Mr. Craig’s idea was not a very Republican idea.

Actually, bringing that power to a point closer to the people is a very conservative idea. I would rather fight battles against raising taxes here in Salisbury than up in Annapolis; moreover, counties are exempted or mandated by state fiat on many occasions – chief among them the “rain tax.” As I recall, Montgomery County already had a similar program in place when the state passed theirs. That was an example of a county making their own decision.

Yet there are more recent statements and votes I can take from Ron which would suggest he isn’t exactly the standard-bearer for liberty or conservative principles, either, particularly when it comes to Radical Green. Just check out this screenshot from 2010, when Ron campaigned as “the Green Elephant.” I pointed all this out when Ron was launching his bid. And Ron isn’t exactly trumpeting his support for that key part of the O’Malley “Smart, Green, and Growing” agenda now, is he?

As I have said privately to people who asked for several weeks now, I can easily tell you something good and something bad about each one of the four gubernatorial campaigns. To me, it was a race with no clear favorite from day 1.

So on Tuesday we will come to the end of a long, exhausting slog to secure the GOP nomination for governor. For three of the candidates (David Craig, Larry Hogan, and Charles Lollar) it can be argued they have been running for the last three years. Whether it was the more formal effort by Craig, Larry Hogan’s formation of Change Maryland, or Charles Lollar’s New Day Maryland group, these were hatched at various points way back in 2011. While Ron George may have been considering it for far longer, he’s only been at it for a little over a year – still, it’s a long time in one’s life to work toward what many argue is an unattainable goal anyway.

Aside from having this forum to speak my mind and the passion to follow this campaign practically since its beginning, I’m probably like many other voters in the sense that I have 100% agreement with none of the candidates. Obviously some spoke better to the issues which I care most about better than others, and some have lengthy records I could examine, particularly in a legislative sense. Still, in order to select one I have to compromise on some things, and my vote goes where I judge that I have the least amount of compromise.

Now do I worry that David Craig will run to the center once June 25 rolls around? Yes, of course, and I would for Ron George as well given his abandonment of the “Green Elephant” moniker to secure a statewide nomination. But given his refusal to take a stance on some issues, I think Larry Hogan has already started in the middle, and in many respects so has Charles Lollar. Do we really know what he is telling these Democratic groups to earn their support?

Yet, regardless of who wins, at the end of the day it would be better to have someone you agree with 70 to 80 percent of the time in charge than continue to lose ground with someone who may be right 20 percent of the time (if we’re lucky.)

It’s also worth making this final point. On Wednesday, there will be winners and losers in more than just an electoral sense. Many people have put their hearts and souls into this race but it’s worth remembering that, in our little Maryland Republican community, the guy whose brains you were trying to beat out a month earlier may have to be your best friend in a future fight – so don’t burn the bridges behind you. The long-range goal should be kept in sight as you celebrate the moment of victory.

The 80-20 rule (part 1 of 2)

The Maryland Liberty PAC is at it again.

It’s funny because I generally agree with these folks, but I can’t let their continued leap of logic stand. Here’s some of what we know so far:

  • In 2009, Jeannie Haddaway-Riccio voted in favor of the Greenhouse Gas Emissions Reduction Act of 2009.
  • A few months later, I wrote in that edition of the monoblogue Accountability Project: “Someday I’m confident that future generations will look back and wonder about the folly of such a bill thinking it would actually impact the climate. In the meantime we have to reduce our emissions to 75% of 2006 levels in eleven years. I know – let’s throw out all of the industry and job creation!” Needless to say, I was against the bill.
  • A couple years later, the Maryland Climate Action Plan was released. This is the document cited by those who insist that Haddaway-Riccio (and others I’ll shortly detail) were responsible for the proposed implementation of the VMT.

This is what the Climate Action Plan says about the VMT:

This policy option addresses transportation pricing and travel demand management incentive programs. It also tests the associated potential GHG reduction benefits of alternate funding sources for GHG beneficial programs. These strategies amplify GHG emission reductions from other strategies by supporting Smart Growth, transit, and bike and pedestrian investments. The draft MDOT policy design, developed by the pricing working group in Phase I, considers four strategy areas combined with an education component for state and local officials. (Emphasis mine.)

The detailed definitions of the four strategy areas are listed below:

  • Maryland motor fuel taxes or VMT fees – There are two primary options for consideration: (1) an increase in the per gallon motor fuel tax consistent with alternatives under consideration by the Blue Ribbon Commission on Maryland Transportation Funding, and (2) establish a GHG emission-based road user fee (or VMT fee) statewide by 2020 in addition to existing motor fuel taxes. Both options would create additional revenue that could be used to fund transportation improvements and systems operations to help meet Maryland GHG reduction goals.
  • Congestion Pricing and Managed Lanes – Establish as a local pricing option in urban areas that charges motorists more to use a roadway, bridge or tunnel during peak periods, with revenues used to fund transportation improvements and systems operations to help meet Maryland GHG reduction goals.
  • Parking Impact Fees and Parking Management – Establish parking pricing policies that ensure effective use of urban street space. Provision of off-street parking should be regulated and managed with appropriate impact fees, taxes, incentives, and regulations.
  • Employer Commute Incentives – Strengthen employer commute incentive programs by increasing marketing and financial and/or tax based incentives for employers, schools, and universities to encourage walking, biking, public transportation usage, carpooling, and teleworking.

The working group noted consisted (according to the report) of people from four groups:

The Working Groups provided technical guidance and included local representation though the participation of the Baltimore Metropolitan Council (BMC), the Metropolitan Washington Council of Governments (MWCOG), Montgomery County and the City of Baltimore.

They met in the early part of 2009, pretty much simultaneously with the bill’s debate and passage, but there was no real way of knowing whether the VMT proposal would make the final cut until the report’s release two years later.

It’s a way of stretching the truth, so I’m curious why those who made a big deal out of Jeannie Haddaway-Riccio voting for the GGRA don’t say the same about David Brinkley, Richard Colburn, Barry Glassman, Andy Harris, Susan Aumann, Addie Eckardt, and Steve Schuh. All of them, along with the departed E.J. Pipkin and Richard Weldon, departing Bill Frank, and late Page Elmore, voted for the GGRA. Surprised?

Listen, I still say it was a bad vote. But this is why it pays to do your own homework, and also why one mustn’t make the perfect the enemy of the good. The Maryland Liberty PAC had Rand Paul for a recent fundraiser, but did they account for his pro-amnesty stance? Or is the Maryland Liberty PAC now in favor of illegal immigration? (Or, for that matter since Rand is doing a July event for them, is the Maryland GOP itself pro-amnesty?)

It seems to me that’s the same sort of stretch MDLPAC and others make when saying Jeannie Haddaway backs a VMT. And of the group of Republicans above, Aumann and Schuh co-sponsored an anti-VMT measure. Does that cleanse them of their previous sins? You can do this with any politician who holds legislative office (as you’ll read further in part 2 tomorrow), which is why outsiders can look so temptingly good.

I went and looked at the issues, one by one, to make my decision. It was a measured decision, not made because of hype or because I was a follower of a particular candidate. So while it disappointed me that Haddaway voted this way (which I knew about back in 2009), I took the 20% or so bad with the 80% or so good.

In part 2 tomorrow I will look at another candidate.

Voting against their own interests

In light of some updated information, I’ve decided to revise this piece slightly. My point should have been made a touch more artfully.

The law of unintended consequences strikes again.

It took over a month for this to come to my attention, since the original Bay Journal article by Tom Horton came out on March 6 and movement may have occurred since. Be that as it may, the article seems to want to heap blame on the county as much as the state – problem is the county is now following rules dictated by Annapolis, in essence losing its identity.

Here are the issues, as laid out by Horton:

(Farm owner Ted Wycall’s) plan was to increase sales and production to boost his income – “about what a (Wicomico) county teacher makes,” enough to live on, but not to retire, or pay the latest $8,000 tractor repair. He would have moved his 54-foot-square market onto 60 acres that link his farm to a busy road, where more customers would stop.

But highway officials said he’d have to spend $50,000 for a “deceleration lane” for his roadside market, never mind that nearby crossroads don’t have any.

He could avoid that by running an access drive off a side road; but the impervious surface of that driveway, plus that of his market building, would entail stormwater pollution expenditures of more than $20,000, plus weekly paperwork he has no time for.

He’d actually be removing more impervious surface (old farm buildings) than he’d create; but because those buildings predate stormwater regulations, he’d get no credit for that, the Maryland Department of the Environment confirmed.

A state-of-the-art septic tank to handle wastes would be $15,000 or more. They can be built for much less, but regulations require such systems be certified. This has winnowed the field to a few outfits that provide only top-of-the-line units.

Ted’s requests to substitute a waterless, composting toilet, used extensively by groups like the Chesapeake Bay Foundation and National Park Service, were rejected by the county.

So was his argument that new greenhouses he needs to expand on his current farm be exempted from stormwater rules: “You are a developer,” said a dismissive e-mail from a county official.

By my count that is two state agencies and probably two different areas of county government involved.

While I’ve never patronized Wycall’s roadside stand, I have often wondered how it stays in business because I notice when I drive by it there aren’t many customers. (Coming from the south I often cut through “the forest” from Pocomoke, so I eventually drive by the farm’s Nutters Cross Road location. Problem is not many others drive there, aside from local traffic.) I gather his idea was to build a new facility to front on Snow Hill Road, which is Maryland Route 12. Because it would be new, it is supposed to comply with all these rules surely the bulk of Horton’s readership supported upon enactment. Bear in mind as well that Wicomico doesn’t yet have the “rain tax” which would likely hit Wycall hard just as he completed his upgrades because we’re probably at the front of the line for its expansion.

Yet the Greenbranch Organic Farm situation is not drastically different than that of any other business owner who wants to expand – it only attracted Horton’s attention because this was a more “noble” calling than that of the average poultry producer a mile or two away. (In fact, it was groups with that same mindset who tried to bankrupt a local poultry farmer just a few miles from Wycall for making a simple error in sludge storage where the state fined him a modest amount.) If that other farmer wanted to expand his chicken operation, the same regulations would apply but Horton might not mind so much then.

In an era of 20 to 30 years ago, the county would have made Wycall’s life easier. The light traffic count of his expanded operation would be handled by attentive driving and perhaps a slightly wider shoulder on the highway, a run-of-the-mill septic tank would have been just fine, and no worries about impervious surface because chances are a gravel parking lot would have been perfectly acceptable. (It probably still would be except for the handicapped spaces federal law now dictates.) Since then, in its effort at assuming complete control over our lives justified as one of “saving the Bay,” businesses now have to pony up the extra cash and effort to do all which was asked of Wycall and much more. It’s intriguing that the Wycalls are considering packing up and moving to Montana, where “there are almost no rules.” In terms of being friendly to business, it can’t be much more clear than that.

Yet the denizens of Radical Green who read this will only shrug their shoulders and blame the county for being a bunch of redneck hicks who bend over backwards for Big Poultry but won’t give this heroic little guy and his acorn-rooting pigs a break, this before advocating to expand some of these regulations to other waterways like Lake Erie.

It’s a shame that the Wycalls are facing such difficulty with their situation – if they want to run an organic farm and people are willing to pay a premium for the privilege, let’s just hope for their sake the market is there. But for the intended audience of Horton’s piece, it’s another reminder that it really is true that you reap what you sow.

The real weather effects

March 3, 2014 · Posted in Business and industry, Delmarva items, Radical Green · Comments Off 

As I sit here on what seems like the umpteenth snow day of this winter of our discontent, I ponder what the world was supposed to be like just a decade or so ago. I’d have thought by now the polar ice caps would be melted because the earth would be so warm and I’d be enjoying my tropical beachfront property right here in Salisbury.

Snark aside, one has to wonder if the climate is really changing. For the past several winters, we have endured at least one significant snow event – something I don’t recall dealing with in the first few winters I’ve lived down here. The big blast of snow we had in 2010 was really the first major snowstorm since I’d moved here in 2004, but that was the first of several winters this decade one may consider harsher than normal. This year, though, takes the cake. (While this piece is about two decades old, the average snowfall of about 10-15″ is consistent with the Wikipedia-supplied average of 9.9″ for Salisbury.) Today’s storm threatened a foot of snow, but will likely fall into the 4-6″ range, adding to a winter where snowfall has far exceeded the norm.

If you believe as I do that the sun dictates our climate, we may be in for a long series of cold winters. It seems like as plausible an explanation as any other. But what does that mean for the average family?

First of all, I define how cold a year is by the number of heating degree days used. This is a very simple calculation: the average temperature for a calendar day subtracted from a constant temperature of 65 degrees. I was taught this concept in my architectural training, and it’s a handy way to determine how cold a period of time is. From this site, I found that over the last decade we’ve generally run an average of 4,315 heating degree days, with the years of 2003-2005 being a little colder than average; on the other hand, 2011-2013 were comparatively balmy because we finished under 4,000 heating degree days. So the fact we are running 19% ahead of 2013 on degree days through February really means we may be getting back to a longer-term average, polar vortex or not.

But degree days don’t equate to snow; I tend to believe colder winters aren’t generally as snowy. Usually the biggest snowstorms brew in from our south, which implies a warmer flow of air colliding with cold air from the west. A more westerly clipper system isn’t usually a big snow producer here.

Now snow, in and of itself, isn’t such a big deal aside from perhaps a one- or two-day disruption in routine. And all this snow is great for some people: those who have plowing businesses on the side (or get overtime from the state/local government for plowing) are making out like bandits this year, and ski resorts are cheering these storms on as well. Kids get to play in the snow. But on the other side of the ledger: tourism could be down a little at spring break because kids may have to make up all those wintry days missed, local governments have to dig into their contingency funds to secure more salt for the roads, and so forth. Overall, the effects are fairly minor.

Conversely, cold weather is difficult for most families on a budget; in particular, the need to find more money for electricity, natural gas, or heating oil. And while Eastern Shore summers can be torturous without air conditioning, they’re more manageable than dealing with a cold spell without heat. That can be deadly.

And on a long-term axis, a cooldown may make food more expensive as yields decline and certain staples become harder to find. For example, over the course of several decades, orange production in Florida has retreated southward due to too-frequent bouts of freezing weather. Obviously some of that migration comes from pressure from development, but orange groves aren’t a fixture in the state’s northern half anymore. By the same token, the area where wheat production is possible becomes smaller as a large percentage of the world’s land mass lies in northern subpolar regions where a few miles of retreat turns into a lot of lost acreage.

So the question is whether this unusually lionlike start to March is an anamoly or a sign of winters to come. Florida may seem like a better and better bet to many who get tired of shoveling year after year, but there are only so many people it can support and food has to be grown by someone someplace. Maybe those broken chunks of polar vortex which have swirled in our direction will go someplace else next winter, but it wouldn’t surprise me to find that all who warned us about global warming were the only ones creating the hot air – it sure wasn’t the bright sunshine.

Back to that three letter word: J-O-B-S

I still like picking on Joe Biden. But over the last month or so I’ve collected a lot of divergent information on policy suggestions, each of which promses to be the magic elixir to get our economy moving in the right direction again.

I think the key to this lies in two areas: manufacturing and energy. In that respect, I keep a lot of information handy to discuss in this space, with a group called the Alliance for American Manufacturing (AAM) generally representing the left-of-center, pro-union side. And while their main goal seems to be increasing the coffers of Big Labor, luckily most workers still have free will – ask the employees at the Tennessee Volkswagen plant about how much effort from the UAW can be rebuffed in a simple up-or-down vote.

Currency manipulation is one area in which the AAM has been focusing. A study they cite, by the liberal Economic Policy Institute (EPI), makes the case that:

Many of the new jobs (if the subject is addressed) would be in manufacturing, a sector devastated by rising trade deficits over the past 15 years. Rising trade deficits are to blame for most of the 5.7 million U.S. manufacturing jobs (nearly a third of manufacturing employment) lost since April 1998. Although half a million manufacturing jobs have been added since 2009, a full manufacturing recovery requires greatly increasing exports, which support domestic job creation, relative to imports, which eliminate domestic jobs.

Personally I disagree with the premise that rising trade deficits can be blamed for the job losses; instead, I think an absurdly high corporate tax rate and onerous regulations have contributed more to chasing away American manufacturing. (While many simply blame “outsourcing” for the problem, fewer understand the dynamics which led to the outsourcing.) Yet there is merit to the idea that all sides should be competing on as level of a playing field as possible when it comes to the means of exchange, and China is one of the worst offenders. (And why not? They are communists, after all, and you can’t trust communists any farther than you can throw them.)

Two of EPI’s findings are quite interesting: first, should the EPI model come to its fruition, the oil and gas industry would be the hardest hit, and second, Maryland would be among the states least impacted, with barely a 1% rise in employment.

Yet AAM president Scott Paul is quick to blame Barack Obama:

President Obama promised to hold China accountable. He hasn’t. The White House last month said President Obama would use his pen and his phone to make progress on economic issues. He could start today by signing an order to designate China as a currency manipulator.  Then, he could call the Chinese leadership to demand an end to that practice, and secure an agreement on a plan to cut this deficit in half over the next three years.

I sort of wish Mr. Paul would also figure out the other problems, but he is correct to be concerned about our Chinese policy. Job creation has become more important than deficit reduction in the minds of Americans, both in the AAM poll I cited above and a Pew Research Poll cited by the American Petroleum Institute (API).

And the industry which benefits from API’s efforts represents another piece of the puzzle which we can take advantage of: our abundant energy supplies. While America uses 26 trillion cubic feet of natural gas per year, there is the possibility of as much as 10,000 trillion cubic feet within our land mass. That’s nearly 4 centuries worth, so I don’t think we will run out anytime soon. (Estimates have continued on an upward path as new technology makes previously unworkable plays economically viable.) As I keep saying, it’s too bad we don’t have a nice shale play under our little sandbar. Not only that, but the infrastructure we will need to take advantage of all that (and help curtail spot shortages like the ones we’re having this chilly winter) would be a guaranteed job creator – one which derives its basis from the private sector. New pipelines aren’t just for export facilities like Cove Point, but could benefit this area and perhaps bring more natural gas service to our region.

Unfortunately, Maryland isn’t poised to take advatange of either the manufacturing or energy booms at present, thanks to back-breaking economic policy and a foolhardy go-slow approach on fracking. It takes a strident opponent of the latter to suggest yet another approach which will do damage to the former, but gubernatorial candidate Heather Mizeur accomplishes this with the tired old combined reporting proposal. Hers comes with a twist, though, which she announced last Monday:

In the morning, Mizeur will host several Maryland business owners for a Small Business Roundtable. They will discuss her legislation to provide tax relief to small business owners, as well as other highlights from the campaign’s ten-point plan for jobs and the economy, which was released last fall. She will also hear from the business owners on a range of other concerns.

(snip)

At 1:00 pm, several business owners will join Mizeur in front of Ways and Means to testify on behalf of legislation that would enact combined reporting and distribute the estimated $197 million to small businesses for personal property tax rebates.

It’s the liberal way of picking winners and losers. And according to a 2008 study by the Council on State Taxation – admittedly, an opponent of the practice:

Combined reporting has uncertain effects on a state’s revenues, making it very difficult to predict the revenue effect of adopting combined reporting.

Even proponents don’t address that aspect, instead emphasizing how it would “level the playing field between multistate corporations and locally based companies.” But since Mizeur’s idea is one which would subsidize some businesses under a certain employment plateau, the uncertainty would likely be just another reason to avoid Maryland.

On the other hand, a Republican like Larry Hogan at least gets businesses together to discuss what they really want. Granted, once he gets them together he speaks in broad concepts rather than a more specific plan, but at least he’s listening to the right people. None of the others in the GOP field have specific plans, either, although Ron George probably comes the closest.

One has to ask what states which are succeeding economically are doing to attract new business. The state with the lowest unemployment rate, North Dakota, is prospering – more like crushing the rest of the field – on account of abundant energy resources, and perhaps that success is pulling surrounding states up with it. Its three neighbors (Montana, South Dakota, and Minnesota) all rest within the top 13 when it comes to low unemployment rates and other regional states like second-place Nebraska, Iowa, Wyoming, and Kansas lie within the top 10. Although the top five are right-to-work states, half the bottom 10 are as well. Nor can tax climate be seen as a dominating factor since the top 10 in unemployment vary widely in that category: Wyoming, South Dakota, Utah, and Montana are indeed excellent in that aspect, but North Dakota is decidedly more pedestrian and Iowa, Vermont, and Minnesota are among the worst.

But Maryland has the tendency to depend too much on the federal government as an economic driver. This presents a problem because bureaucrats don’t really produce anything – they skim off the top of others’ labor but don’t add value. Certainly it’s great for those who live around the Beltway, and it’s telling that all three of the Democratic candidates have a connection to the two Maryland counties which border the District of Columbia while none of the Republicans save Larry Hogan do.

In order to create jobs, I think the state needs to diversify its economy, weaning itself off the government teat and encouraging manufacturing and energy exploration. Meanwhile, there’s also a need to rightsize regulation and restore a balance between development and Chesapeake Bay cleanup – specifically by placing a five-year moratorium on new environmental restrictions while cleaning up the sediment behind the Conowingo Dam. Let’s give that which we’ve already done a chance to work and other states a chance to catch up.

The best route out of government dependence is a job. Unfortunately, when the aim of the dominant political party in the state is one of creating as many dependents as possible, a lot of good entrepreneurs will be shown the door. It’s time to welcome them in with open arms.

Denying the market

To be honest, I’m not sure if I was sent this to provoke a comment or if I just happen to be on a list that gubernatorial candidate Heather Mizeur doesn’t use all that often. I think most observers know I have an interest in energy issues, and this definitely falls into one of them. You just have to ask yourself why Mizeur counts herself among the Democrats are so insistent on denying the opportunity for shovel-ready jobs and investment – I thought that was what they were all about.

First of all, this is what Mizeur had to say about the proposed Cove Point LNG export facility.

(Yesterday), Delegate Heather Mizeur (D-Montgomery), candidate for governor, called on Governor O’Malley to join her in opposition to the Dominion Resources liquefied natural gas (LNG) export facility at Cove Point in Calvert County. She made the announcement during a speech at the Stop Cove Point Rally in downtown Baltimore City earlier today.

“I am calling on Gov. O’Malley to take a stand with us today to reject Cove Point,” Mizeur told the audience. “You cannot leave a legacy on addressing climate change and be silent on Cove Point. It’s time for Gov. O’Malley to break the silence and join us in saying no to Cove Point.”

The rally, which was attended by 500 people, was organized by climate, health and anti-fracking activists from across the state, and was one of the largest environmental rallies ever in Baltimore City. It came as the state Public Service Commission begins official hearings on the project.

Mizeur is currently the only gubernatorial candidate to state her opposition to the project. When she announced her opposition in December, both Lieutenant Governor Brown and Attorney General Gansler – the two other Democratic candidates in the race for governor – expressed a desire to build the project without environmental damage, but failed to explain how such a plan would be possible.

Dominion Resources, a Virginia-based energy company, is pursuing the construction of a $3.8 billion facility to serve as a collection point for fracked natural gas from throughout the Mid-Atlantic region, where cargo tankers would then ship it throughout the world.

But the Cove Point facility would release 3.3 million tons of carbon dioxide and other harmful greenhouse gases into the air annually, making it a serious setback to achieving the state’s goals on fighting climate change, including a plan for a 25% reduction of greenhouse gases by 2020.

Mizeur has also called on Dominion Resources to invest $3.8 billion – the construction cost of the proposed facility – in the state’s renewable energy sector. According to the U.S. Department of Energy, clean energy investments create more permanent jobs than exporting fracked gas.

Obviously Mizeur is an adherent to the religion of manmade climate change, a belief system which fails to address why none of the climate models have predicted the lack of warming this century. The fact that they managed to get just 500 people to a climate change rally shows how small the cadre of believers really is – a good Second Amendment or TEA Party rally can rustle up similar numbers without really trying. If this is “one of the largest environmental protests in state history” then we really are letting a tiny minority dictate policy.

But let’s say these guys are really serious – I suppose living in a state foolish enough to believe that artificially limiting its carbon emissions will have an effect on our overall global climate will do that to you. Even if the point source of 3.3 million tons is correct, it doesn’t take into account the reduction in emissions at destination points abroad. Natural gas is cleaner burning than coal, and until we figured out that fracking was a way to supercharge the moribund domestic natural gas market it was a fossil fuel environmentalists weren’t uncomfortable with. To show how the market has changed, the Cove Point facility was originally built in the 1970s as an import facility because the domestic natural gas market was thought to be in an irreversible decline.

On the other hand, the point source investment of $3.8 billion will have a positive effect on the regional and state economies. Last year, in announcing its filing, Dominion claimed the project will create up to 4,000 jobs during the construction phase and perhaps over 14,000 jobs overall, not to mention billions in royalty payments. Because most of the supply would come from regional producers, the entire mid-Atlantic area would benefit (except Maryland and New York, which currently have bans on fracking.) The facility would also provide a needed boost to our export tally to address a persistent American trade deficit, as the LNG is already contracted out to distributors in Japan and India.

Finally, Mizeur complains that the $3.8 billion Dominion is willing to invest in the project could be better spent in the renewable energy sector. Does the name “Solyndra” ring a bell? Despite its best efforts to create a market for offshore wind, companies aren’t willing to make the investment in that area – remember Bluewater Wind? In the area of solar energy, it took billions in taxpayer-guaranteed loans – and mandated renewable energy portfolios such as the one Maryland is saddled with – to get that market off the ground, yet it still produces but a tiny fraction of our electricity needs at a cost several times the going rate for electricity produced from coal or natural gas.

And it’s funny that Mizeur worries about the cost of natural gas going up due to exports, but had no problem with raising the gasoline tax on a perpetual basis. So much for supporting hard-working Marylanders.

So the choices are either zero or $3.8 billion; that’s reality. We can take advantage of proven resources we already have or listen to alarmists whose real goal is to foster dependence on government under the guise of saving the planet. It’s just too bad our little sandbar is energy-poor, unless you deign to call chicken manure an energy gold mine, and even the proponents concede its not as efficient as natural gas.

The flip side of twenty bucks

Since there’s not a lot of political news going on right at the moment because half the state is buried under the global warming provided by a February nor’easter, I thought I would highlight a real step in the right direction in cleaning up Chesapeake Bay.

In a 10-page letter released last week by the Clean Chesapeake Coalition, the group collectively blasted the Chesapeake Bay Foundation (CBF) for stating certain localities “want to keep creeks dirty” and for an overall focus on punitive taxes and regulations for Marylanders while glossing over problems upstream from the Chesapeake. (The letter can be read in its entirety here.)

As a whole, the CBF has rarely met a restrictive regulation it didn’t like, even condemning other states for standing up for their interests, which happen to be congruent with those of farmers in this case. It seems they are at war with the agricultural industry nationwide, and their argument that these pollution limits actually create jobs reads as a variation of the “broken window” theory – how much capital and job creation is lost because we’re being forced into these relatively unproductive pursuits? Obviously it’s a bone of contention whether lasting results will be achievable without both cleanup of the Conowingo sediment and further cooperation from states upstream.

And thus the argument about making Salisbury property owners pay a fee ranging from $20 to thousands annually for the privilege of being within city limits. You can’t convince me that, even if we knock ourselves out and somehow manage to achieve the 2025 standards set by the EPA – with legal assistance from the CBF, who sued them to get the desired result – that the CBF will consider the matter solved and the taxes no longer necessary. Nope, this is a permanent thing we’re being signed up for, and eventually all of Wicomico County will be forced to join in.

The problem with government, and even quasi-governmental agencies like the Chesapeake Bay Foundation, is that they have no end game because it’s not in their interest to have one. Solving the problem would mean ceasing to exist, and the CBF is a cash cow bringing in over $30 million annually, with nearly $6 million going to administration and fundraising. That’s a goodly number of people who would have to find honest work otherwise, and the power of steering state and federal policy is a further intoxicant. (Of course, the same is true of the Clean Chesapeake Coalition, but I sense they would rather not see the need to exist.)

So we have a choice – the old BOHICA approach or taking a stand for common sense and local control. Can you guess where I stand?

Twenty bucks is twenty bucks

The “rain tax” is probably coming to Salisbury.

Eager to jump on that bandwagon, the Daily Times reports that Salisbury City Council unanimously agreed to move a bill to create a stormwater utility forward for final approval at a future meeting, a date to be determined but likely in the next 60 days. All five of the Salisbury City Council members are Democrats, as is Mayor Jim Ireton, who backs the proposal. Jeremy Cox’s story quotes City Council president Jake Day as saying “There’s no good argument for not having this in place, to have a funding system to pay for things.”

Bull.

There’s a great and very simple argument: we have no idea if what we would be doing will have any significant impact on Chesapeake Bay. As vague as the Phase II Watershed Implemetation Plan for Wicomico County is in terms of how many assumptions it makes, there are two things it doesn’t tell me: the overall impact of Wicomico County presently on the health of the Bay, and the economic impacts following the plan will have on business and our local economy. Does the $20 I would spend each year make a dent, or is it just another way for government to reach into my pocket for dubious benefit? Less than national average fee or not, it takes away from my less-than-national-average salary.

The argument by Brad Gillis also rings true. Because  the state requires most new development to adhere to overly strict stormwater guidelines, those who have will still be paying the rate on top of the expense others didn’t put out. Stormwater retention isn’t cheap.

And, of course, there’s the very real possibility that the $20 of 2015 will be $35 after 2017 or $100 sometime after that. Once enacted, I’ve rarely met a fee or a tax that’s decreased and because the goal is so open-ended this just seems like another excuse to reach into our pockets in perpetuity.

This is a state where I pay bridge tolls to subsidize a superhighway I’ll probably never drive, pay a gasoline tax out here in the hinterland to prop up a boondoggle of a public transit system in the urban core (complete with pie-in-the-sky light rail lines many of those along the route don’t want), and get to watch a governor for whom I didn’t vote – twice – play whack-a-mole with expenses that pop up by “borrowing” from dedicated state funds and floating bonds to make up the difference. Why should I trust the city of Salisbury to be prudent with my money when the regulatory goalposts are sure to shift? Ask David Craig about the state and what happens when they change their mind.

Several years ago I proposed a moratorium on new Chesapeake Bay regulations so we could figure out whether all that we had put in place would work. Of course, for the Chesapeake Bay Foundation, Town Creek Foundation, and other denizens of Radical Green there’s too much money for their coffers at stake to ever agree to such an idea – and it’s such fun to figure out new offensives along our flanks in the War on Rural Maryland.

Needless to say, my reasoning probably won’t change any minds on Salisbury City Council, or that of the mayor. I know Jim Ireton, Jake Day and Laura Mitchell to a greater or lesser extent, and they’re decent enough people, but they seem to have this idea in their head that government central planning is the solution and for every need there has to be a new fee to pay for it. When the “need” is a mandate from on high, that’s where I object. Twenty bucks is twenty bucks for the tapped-out homeowner, but those who are job creators will likely pay a whole lot more and it’s just another incentive to locate elsewhere, in my estimation.

Easy pickins

You wouldn’t necessarily think of him as the farmer’s candidate, but Charles Lollar has at least paid a little bit of attention to how environmental factors affect one of Maryland’s top industries. Recall that he spoke at length about the Hudson case in one of his initial campaign stops, and it may not necessarily surprise you that he’s now making hay out of what’s he dubbing the “chicken tax.”

The “Chicken Tax” is another “Rain Tax” moment in Maryland history. Farmers in Maryland should be outraged. Agriculture is the number one economic industry in Maryland. It accounts for $2.3 billion in gross receipts to the economy annually and generates approximately 46,000 jobs. More than half of these jobs are on the Eastern Shore. Why are legislators willing to risk all that?

We need a balanced approach to solving environmental issues in Maryland. Keeping the Bay clean is a regional problem that involves more than controlling agricultural run off from Maryland farms. Sediment from adjacent states, like Pennsylvania, contribute to the pollution. Leadership in Annapolis needs to craft a regional solution to this problem that requires all states that pollute the Bay to “pay their fair share” to keep it clean. We must not allow legislators in Annapolis to “hurt Maryland first” by bankrupting hard-working farmers with a “Chicken Tax” and putting the future of Maryland’s number one economic industry at risk.

Given Lollar’s propensity for shrill populism, I took the liberty of reading the bill in question, Senate Bill 725. (The same bill is in the House of Delegates as House Bill 905, a common Maryland practice.) The Senate bill’s lead sponsor is Richard Madaleno, a Montgomery County senator whose experience with chicken is probably that of seeing it at Whole Foods. (He seems the vegetarian type.)

Basically the bill as proposed, called the Poultry Fair Share Act (PFSA), tries to “achieve” two things: raise money from poultry processors like Perdue, Mountaire, Tyson, etc. at five cents per bird and establish a bankroll to “fund cover crop activities on agricultural lands upon which chicken manure has been applied as fertilizer.” The secondary purpose of the bill is to increase the share of money going into an existing state fund to reimburse owners of failing septic systems who have to replace them with a system with enhanced nitrogen removal – currently that fund shares its proceeds with the cover crop program on a 60/40 basis, with the cover crops getting the 40% share.

Needless to say the local producers are feeling a little put upon, as would anyone subject to a bill arbitrarily deeming that it pay a “fair share.” Madaleno is probably upset because his county has to pay the aforementioned “rain tax” but no Eastern Shore county yet has to (although certain muncipalities in the region already collect such a tax.) Prominently featured on the webpage of the Delmarva Poultry Industry homepage is a series of questions about the PFSA.

So my question is simple, and it applies to any candidate, including Lollar. How many of you will put your money where your mouth is and go testify against the Senate bill when it comes to a hearing on Tuesday, February 25th at 1 p.m.? Certainly these candidates are willing to put themselves out for gun rights and stand against taxation in general, but who is going to face down the environmental lobby in this state and politely (or better yet, impolitely) tell them to do the anatomically impossible and go f–k themselves?

Writing a press release is one thing, but we need activists. Personally I’m tired of seeing the agricultural industry in Maryland – no, wait, the entire rural slice of the state in general, whether it be farmer, resident, or small business – be the featured whipping boy for groups which would just as soon see the non-urban portions of the state revert to their once-wild condition. Yes, that means you, Waterkeepers Alliance, Food and Water Watch, and even certain members of the Chesapeake Bay Foundation. I’ve only been here a decade, but I spent my teenage years in a rural area and I think we all got along just fine without you because – as they often note – farmers are the original environmentalists. We might not have liked it a whole lot when the wind blew the perfume of the pig farm down the road our way, but it was a small inconvenience for the rural living my parents desired.

I happen to think we can have it all – a great quality of life, economic growth and the jobs it creates, and water quality suitable for the recreational and aquacultural purposes we demand from Chesapeake Bay – without these environmentalists coming in and mucking up the works with overregulation and harsh taxation. Hopefully we can count on all four GOP gubernatorial candidates to stick up for the farmer in this fight.

A call to defensive action

A snowstorm two weeks ago delayed a planned work session of the Wicomico County Council to discuss the merits of joining the Clean Chesapeake Coalition. In my original piece I brought up the potential of the entire Radical Green crew showing up at the meeting to tell us we need to toe the state’s line that the rain tax is the only way to proceed.

As it turns out, the delay brings us around to an evening meeting, beginning at 6 p.m. tomorrow night, February 4. And as the Wicomico Society of Patriots points out, other items will be on the docket as well:

You may recall that the CCC is challenging the way the state is implementing Bay cleanup efforts. They emphasize putting scarce revenue resources where they will have the most benefit to the Bay. They also question the economic sense of putting billions of taxpayer dollars into one-size-fits-all, top down, solutions that not only will have severe and documented economic impacts on our region, but they emphasize that the State’s regulatory overreach will further erode our property rights and along with it our property values.

It is strongly rumored that key members of the environmental community will be there to oppose this commitment by the county to support the work of the CCC. It is vital that you be there to make your concerns known, whether you actually speak or by virtue of your mere presence.

Also, please plan to be there for the regular council legislative session. The council will hear testimony on the $3.47 million budget shortfall, which was apparently due to overly optimistic revenue estimates by Mr. Andy Mackle’s office, and how to deal with it. Also, there will be discussion and a vote on whether to grant raises to the offices of county sheriff, county administrator, and county council.

To put things in perspective, the annual raises put together will probably not equal the $25,000 the Clean Chesapeake Coalition asks for. And I can already picture Radical Green’s argument that the budget deficit surely precludes spending the money. Honestly, I don’t mind the raises for the County Council; in fact, I would argue they should make the wage an amount more commensurate to that of a full-time worker, at least for one term. (We can reserve the declining salary idea I had for the General Assembly for a second term, since I think $40,000 a year may attract a better field of local candidates to County Council.)

Having said that, though, I think that if there’s a chance that spending $25,000 gives us a chance of being off the hook for $1 billion or so – depending on whose estimate you believe – in the long run, we should take it. Otherwise, we’re being asked to annually spend an amount of money (page 27 here) which is not that far away from the county’s total budget of around $120 million. Instead, the CCC has a rational plan to deal with the problem at its source first and see how much progress is made by that step. Granted, I would like to know that cost estimate but it’s likely to be far less than the state’s proposals.

Moreover, I think this environmental sword of Damocles hangs over our local business community and contributes to the employment shortfall which has led to the loss of revenue.  Let’s face it: at the present time Wicomico County doesn’t have a lot going for it in terms of a business-friendly tax policy or infrastructure to move goods from point A to point, and B we’re hemorrhaging jobs because of these disadvantages. Obviously a great deal can be done with a change in state leadership, but local officials need to do their part as well and supporting the work of the CCC seems to be an effective step in the right direction.

So, since I cannot make it Tuesday night due to a previous commitment, consider this my open letter to County Council supporting the Clean Chesapeake Coalition and its efforts.

Opposing a good idea

This came to me from the Wicomico Society of Patriots:

Citizens of Wicomico:

There is a county council meeting this Tuesday, January 21, at 10 a.m. that should not be missed by anyone concerned about their property rights, property values, and drastically increasing levels of taxation.

Your input is essential to let the counsel know how you feel about this county fighting back against legislation and regulation that will significantly effect our way of life here on the shore. The Septic Bill (SB236), the Phosphorus regulations, the Accounting For Growth land use regulations, and the 1.2 billion dollar estimated cost for imposing the Phase II Watershed Implementation Plan (on Wicomico County alone) are in play this Tuesday.

Several weeks ago in conjunction with a County Council meeting our County Executive, Rick Pollitt, pledged his support and that of the county in backing the work of the Clean Chesapeake Coalition. He also pledged $25,000 to help with the work of the Coalition. The Clean Chesapeake Coalition is the working group for those counties and other organizations and individuals who believe strongly that the state’s efforts at Bay cleanup, including those listed in the paragraph above, are not supported by sound science and will impose huge costs on individuals and businesses with very little if any measurable gain in the stated goal of Bay water quality improvement. The work of the Coalition is an outgrowth of the activism on the part of those Maryland rural counties who began to organize over two years ago in response to these onerous, questionable, and prohibitively expensive state mandates.

Partly in response to pressure from environmental groups, the Wicomico County Council voted to allow testimony and public comments in a future council work session prior to the council voting whether to go forward with county support for the Clean Chesapeake Coalition, or not. That work session is this Tuesday and should start around 12:30. I hope I can count on you to be there; and please pass the word.

So here’s the scoop: bowing to the same environmentalists who take the ideas “not supported by sound science” as gospel, the County Council is going to allow them to speak and try to back the county away from the $25,000 investment in the Clean Chesapeake Coalition. I’m not thrilled about dropping $25,000 on the effort, but if it saves us the $1.2 billion tab the county is supposedly on the hook for it would be money well-spent.

Obviously the same old environmentalist wackos will be there to spout their tired line that we need to pay more to make sure the Bay is pristine. They probably were tipped off to the hearing before anyone else.

I also realize that many of us work for a living; in addition, the weatherman is predicting about 4 to 8 inches of global warming, er, snow for tomorrow. For some, no big deal, but on Delmarva many freak out at the sight of a flake so proceedings may be delayed. It’s also worth pointing out that a future vote is in the offing for this so you can make your feelings known after the hearing (if it occurs) as well.

We all want the Chesapeake Bay to be a usable body of water for all those who depend on it. But the question is truly whether the additional taxes and restrictions on our freedom to develop our property as we see fit are worth a marginal improvement in water quality which could be wiped out by inaction by another state. In my opinion, the answer is no.

Update: the work session scheduled for this afternoon has been cancelled. Those environmentalists who worship Gaia may be cursing her for bringing the half-foot of snow and giving the side of common sense more of a heads-up to prepare.

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  • More Campaign 2014

    Contested races only.

    First District - Congress

    Andy Harris (R)
    Bill Tilghman (D)

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    Maryland General Assembly (local)

    Senate District 37

    Addie Eckardt (R)
    Christopher Robinson (D)

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    House District 37B

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    Rodney Benjamin (D)
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