Commentary by Marita Noon
If a country’s goal is to decrease carbon emissions by increasing reliance on renewable energy, it only makes sense to install the new equipment in the location with the best potential – both in geography and government.
For Australia, which has a national Renewable Energy Target (RET) of 33,000 gigawatt hours of electricity generated by defined renewable sources by 2020, South Australia (SA) is that place. According to SA Treasurer Tom Koutsantonis, who is also the Energy Minister, the federal government had determined that SA is where “the best conditions for wind farms” could be found. The state government was amenable, with SA Premier Jay Wetherill promising to make Adelaide, its capitol city, “the first ‘carbon neutral’ city by 2050.” The state’s RET is for 50 percent renewable energy by 2025. Wetherall, in 2014, claimed: “This new target of half of the state’s power to be generated by renewable sources will create jobs and drive capital investment and advanced manufacturing industries.”
In reality, SA has now found that talk is cheap, but renewable energy isn’t.
The decision to set a 50 percent renewable target is now being called “foolish,” by Tony Wood, an analyst at think-tank Grattan Institute, and “complete naivety and foolishness” according to Lindsay Partridge, chief executive at Brickworks, one of the nation’s leading providers of building products.
Now the largest producer of wind power, SA has enough installed capacity that, under ideal conditions, it could meet 100 percent of the current electricity demand. “However, wind generation tends to be lower at times of maximum demand,” according to the Australian Energy Regulator. “In South Australia, wind typically contributes 10 percent of its registered capacity during peaks in summer demand.” In fact, on some days, Jo Nova explains, they actually “suck electricity instead of generating it.”
Last month, SA experienced an energy crisis that The Australian, the country’s largest newspaper, blamed on “an over-reliance of untrustworthy and expensive wind and solar.” The paper warned that the federal RET “will force other states down the path taken by South Australia, which has the highest and most variable energy prices in the national electricity grid.” Nova adds: “South Australia has more ‘renewable’ wind power than anywhere else in Australia. They also have the highest electricity bills, the highest unemployment, the largest number of ‘failures to pay’ and disconnections. Coincidence?”
In July, the confluence of several factors resulted in a huge spike in electricity prices – as much as 100 times the norm.
In May, pushed out of the market by subsidized wind, SA’s last coal-fueled power plant was closed. Even before then, The Australian reported electricity prices were “at least 50 percent higher than in any other state.” According to the Australian Energy Market Operator, the average daily spot price in SA was $46.82 per megawatt hour. After the power plant was turned off: $80.47. In June: $123.10 – more than double the previous year. In July: $262.97.
Fred Moore, CEO of SA components manufacturer Alfon Engineering, addressing the electricity price hikes that are smashing small and medium business, says his latest electricity contract had increased by almost 50 percent. Until the end of May, his businesses electricity bill was about $3,000 a month and is now about $4,500 a month. He says: “I don’t know how long the company is going to be able to afford it.”
As a result of the loss of coal, when there’s no wind or sun, SA is now reliant on natural gas generation and from coal-fueled electricity being imported through a single connector from neighboring Victoria.
In part, due to a calm, cold winter (weather that is not favorable to wind farms), natural gas demand is high and so are prices. Additionally, the Heywood interconnector was in the midst of being upgraded – which lowered capacity for the coal-fueled electricity on which SA relies. Because of SA’s abandoning coal-fueled electricity generation and its increased reliance on wind, The Australian reports: “The national energy market regulator has warned that South Australia is likely to face continued price volatility and ‘significantly lower’ electricity availability.”
Then came the brutal cold snap, which caused more folks to turn on their electric heaters – thus driving up demand. The left-leaning, Labour state officials were prompted to plead for more reliable fossil-fuel-generated power. With the connector constrained, the only option was to turn on a mothballed gas-fueled power station – a very expensive exercise. The gas plant had been shut down because of what amounts to dispatch priority policies – meaning if renewable energy is available, it must get used, pushing natural gas into a back-up power source. This, combined with the subsidized wind power, made the plant unprofitable. The Australian Financial Review (AFR) explains: “Energy experts say South Australia’s heavy reliance on wind energy is compounding its problems in two ways, first by forcing the remaining baseload generators to earn more revenue in shorter periods of time when the wind isn’t blowing, and secondly by forcing baseload coal and gas generators out of the market altogether.”
Big industrial users, who are the most affected by the power crisis, are “furious about the spike in higher power prices.” According to AFR, Adelaide Brighton Cement, one of the few energy-intensive manufacturing industries still operating in South Australia, said the fluctuating price was hurting business. “As a competitor in a global market, it is essential for us to have access to the availability of uninterrupted economically competitive power.” In The Australian, Jacqui McGill, BHP’s Olympic Dam asset manager, agrees: “We operate in a global market…to be competitive globally, we need globally competitive pricing for inputs, of which energy is one.” The report adds that some major businesses in SA warn of possible shutdowns due to higher power prices – the result of a rushed transition to increased renewable energy. The Adelaide Advertiser reported: “some of the state’s biggest employers were close to temporarily closing due to surging SA electricity prices making business too expensive.” Not the job creation promised by Wetherall.
“Of course, if you were some sort of contrarian eccentric,” writes Judith Sloan, Contributing Economics Editor for The Australian, “you could argue that escalating electricity prices, at both the wholesale and retail level, have made manufacturing in Australia increasingly uncompetitive and so the RET has indirectly contributed to the meeting of the emissions reduction target – but not in a good way.”
The SA energy crisis serves as a wake-up call and a warning to the other states, as the problem is, according to Koutsantonis, “coming to New South Wales and Victoria very soon.” But it should also, as the Financial Times reports: “provide lessons to nations rapidly increasing investment in renewables.”
Malcolm Roberts, CEO at the Australian Petroleum Production and Exploration Association, called the situation in SA a “test case” for integrating large scale renewable energy generation into the electricity grid. According to Keith Orchison, former managing director of the Electricity Supply Association of Australia (from 1991 to 2003), now retired and working as a consultant and as the publisher of Coolibah Commentary newsletter and “This is Power” blog, current policy is driven by “ideology, politicking and populism.”
Roberts added: “No technology is perfect. Coal is great for base-load power, but it’s not so great for peak demand but gas is well suited for meeting peak demand. You need gas as an insurance policy for more renewables.” Even the Clean Energy Council’s chief executive, Kane Thornton, in the AFR, “conceded conventional power generation such as gas would most likely be needed as a back-up.”
Perhaps the best explanation for SA’s energy crisis came from the Australian Energy Council, formerly the Electricity Supply Association of Australia, which called it an: “accidental experiment in how far you can push technologies such as wind and solar power in to an electricity grid before something breaks.” According to Orchison: “The council says that intermittent renewables at scale reduces carbon emissions but ultimately increases end-user prices and system reliability risks.”
On August 13, The Economist, in an article titled It’s not easy being green, addressed the three goals of Germany’s energy transformation: “to keep energy supply reliable; to make it affordable; and to clean it up to save the environment, with a target of cutting emissions by 95% between 1990 and 2050.” All three of which, Clemens Fuest, of the Munich-based Ifo Institute think tank, says, “will be missed.” He calls Germany “an international example for bad energy policy.” Now we can add South Australia, and, perhaps, most of Australia, as another.
This is the result, Orchison says, of “pursuing a purist view at the political expense of power reliability.”
The question remains: will America learn from these bad examples, or will we continue down the path President Obama has pushed us onto – spending billions, achieving little environmental benefit, and raising rates on households and industry? The result of November’s election will provide the answer.
The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc., and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). She hosts a weekly radio program: America’s Voice for Energy - which expands on the content of her weekly column. Follow her @EnergyRabbit.
Commentary by Marita Noon
What is the “biggest unfinished business for the Obama administration?” According to a report from Bill McKibben, the outspoken climate alarmist who calls for all fossil fuels to be kept in the ground, it is “to establish tight rules on methane emissions” – emissions that he blames on the “rapid spread of fracking.”
McKibben calls methane emissions a “disaster.” He claims “methane is much more efficient at trapping heat than carbon dioxide” and that it does more damage to the climate than coal. Methane, CH4, is the primary component of natural gas.
Apparently, his progressive friends in California agree, as they are now, according to the Wall Street Journal (WSJ): “seeking to curb the natural gas emanating from dairy farms” – more specifically cow manure and flatulence. The August 12 editorial says that the California Air Resources Board “suggests that dairy farms purchase technology to capture methane and then sell the biogas to customers.” It acknowledges that the supposed cure would only be cost-effective with “substantial government subsidies and regulatory credits.” WSJ points out that while California’s proposed regulations might produce the “least GHG intensive” gallon of milk in the world, it would also be the “most expensive.”
To buttress his anti-fracking argument, McKibben is selective on which studies he cites. He starts with a paper from “Harvard researchers” that shows increased methane emissions between 2002 and 2014 but doesn’t pinpoint the source of the methane. He, then, relies heavily on “a series of papers” from known fracking opponents: Cornell scientists Robert Howarth and Anthony Ingraffea. Within his report, McKibben mentions Howarth’s bias, but, I believe, intentionally never mentions Ingraffea’s. Earlier this year, in sworn testimony, Ingraffea admitted he’d be lying if he said that every one of his papers on shale gas was “entirely objective.” Additionally, a group that Ingraffa co-founded and for which he serves as Board Chair, Emeritus: Physicians, Scientists and Engineers for Healthy Energy, received, at least, tens of thousands of dollars in coordination with wealthy foundations to support the broad movement of opposition to shale gas drilling.
Because of bias, McKibben claims to reach out to an “impeccably moderate referee”: Dan Lashof. Mckibben then goes on to report on Lashof as having been “in the inner circles of climate policy almost since it began.” In addition to writing reports for the Intergovernmental Panel on Climate Change and crafting Obama’s plan to cut “coal plant pollution,” Lashof was the “longtime head of the Clean Air Program at the Natural Resources Defense Council” and he now serves as COO for “billionaire Tom Steyer’s NextGen Climate America.” Lashof is hardly an “impeccably moderate referee.”
Because McKibben goes to great lengths trying to appear balanced in his conclusions, a casual reader of his report might think the research cited is all there is and, therefore, agree with his cataclysmic views. Fortunately, as a just-released paper makes clear, much more research needs to be considered before cementing public policy, such as the Environmental Protection Agency’s “tight rules on methane emissions.”
In the 28 peer-reviewed pages (with nearly 70 footnotes) of Bill McKibben’s terrifying disregard for fracking facts, Isaac Orr, research fellow for energy and environment policy at The Heartland Institute, states: “Although McKibben – a journalist, not a scientist – accurately identifies methane as being exceptionally good at capturing heat in Earth’s atmosphere, his ‘the-sky-is-falling’ analysis is based on cherry-picking data useful to his cause, selectively interpreting the results of other studies, ignoring contradicting data, and failing to acknowledge the real uncertainties in our understanding of how much methane is entering the atmosphere. In the end, methane emissions aren’t nearly as terrifying as McKibben claims.”
In the Heartland Institute Policy Brief, Orr explains why it has been difficult to achieve consistent readings on methane emissions: “Tools have been developed only recently to measure accurately methane emissions, with new and better equipment progressively replacing less perfect methods.” He then details the various methods:
- Direct measurement of emissions, on-site, identifies methane emissions from specific sources;
- Ambient Air Monitoring uses aerial surveys, allows large areas to be surveyed, with results affected by uncertainties;
- Life-Cycle Analyses draw on multiple sources to provide an integrated measure of emissions from the entire natural gas value chain; and
- Meta-Analyses combine the results of multiple studies using different methodologies or databases to search for overarching trends, recurring facts, and robust findings.
Throughout the section on methodology, Orr draws attention to the results of the various techniques – which he says shows “great uncertainty about how much methane is entering the atmosphere, how much is produced by oil-and-natural gas production, and how emissions can be managed in the future.” He also points out that more than 75 studies examining methane emissions from oil and gas systems have been done, yet “McKibben chose an outdated study [Howarth/Ingraffea] that used unrealistic assumptions and reached inaccurate conclusions.” Additionally: “Natural gas producers have a powerful economic motive to reduce methane leakage and use technologies that capture methane emissions during the drilling and well completion phase.”
Orr calls McKibben’s assertions that methane emissions are from the oil-and-gas sector: “simplistic” and “inappropriate.” Regarding the Harvard study, he explains: “Estimating the contributions from different source types and regions is difficult because there are many different sources of methane, and those sources overlap in the same spatial area. For example, methane is produced naturally in wetlands – and it is worth noting that environmentalists support ‘restoring’ wetlands despite the increases in methane emissions this would cause. Methane also is produced by agriculture through growing rice and raising livestock, fast-growing activities in developing countries. This makes it difficult to calculate exactly where methane is coming from and what sources should be controlled.”
Based on McKibben’s approach, other sections of The Heartland report include: Methane and Global Warming, Repeating Gasland Falsehoods, and What’s the Fracking Alternative – with the latter being my favorite.
Because McKibben’s ultimate goal is to keep fossil fuels in the ground, he goes to great lengths to support how wind and solar – the fracking alternatives – have progressed (an argument that Orr takes apart). However, a careful read of McKibben’s version of the story reveals that he acknowledges that his preferred energy sources are uneconomic. Within his report, McKibben admits that fracking has “brought online new shale deposits across the continent.” He sarcastically derides politicians who viewed fracking as a win-win situation by suggesting they were cynically saying they “could appease the environmentalists with their incessant yammering about climate change without having to run up the cost of electricity.”
McKibben even attacks President Obama’s support of natural gas – made abundant thanks to the companion technologies of hydraulic fracturing and horizontal drilling. (He’s not too happy with Secretary Clinton’s efforts either.) Here are a few of the key phrases McKibben uses in that paragraph: (Note: McKibben sees these as negatives.)
- “The fracking boom offered one of the few economic bright spots”;
- “Manufacturing jobs were actually returning from overseas, attracted by newly abundant energy”; and
- “The tool that made restrictions on coal palatable.”
Combine these McKibben statements and he is clearly aware that his plan will take away one of the few economic bright spots; that due to higher priced electricity, manufacturing jobs will leave our shores; and coal regulations will be unpalatable. While McKibben touts the oft-mentioned line about Denmark generating 42 percent of its power from wind, Orr reminds us that the figure only accounts for electricity – not total energy. When factoring in all of Denmark’s energy consumption, wind, solar, and geothermal only account for 5 percent of the energy mix and, as Orr explains, Denmark has the highest electricity rates in Europe and is still dependent on fossil fuels for the vast majority of its energy.
I am often asked why the anti-fossil fuel crowd has so recently turned against the decades-old technology of hydraulic fracturing, or fracking, that has provided such economic and environmental benefits and has become even safer due to ever-increasing advances. In his report, McKibben states what is essentially the answer I often give: “One of the nastiest side effects of the fracking boom, in fact, is that the expansion of natural gas has undercut the market for renewables.” It has upset the entire world-view of people like McKibben who’d banked on oil and natural gas being scarce – and therefore expensive. In that paradigm, wind and solar power would be the saviors. Now they are an expensive redundancy.
Worrying about whether methane emissions come from oil-and-gas activities, from agriculture, such as cow flatulence or rice farming, or from naturally occurring seeps may seem irrelevant to the average energy consumer’s day. However, when you consider that long-term, expensive public policy is being based on this topic, it is important to be informed fairly and accurately – and to communicate with your elected officials accordingly.
The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc., and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). She hosts a weekly radio program: America’s Voice for Energy - which expands on the content of her weekly column. Follow her @EnergyRabbit.
Commentary by Marita Noon
If you get your news from the mainstream media, you likely think the views expressed by the environmental activists represent the majority of Americans. After all, their highly visible protests against the Keystone pipeline – sit-ins in front of the White House, locking themselves to the White House fence and then being arrested for it, and parading down the National Mall carrying a huge inflated tube emblazoned with the words: “Just say no to Keystone” – were effective. Despite repeated polling that showed a majority of Americans supported the pipeline, with a small minority opposed, the loud theatrics of the anti-fossil fuel crowd eventually won out. After years of stall tactics, President Obama finally bowed to their demands and said no to the job-creating infrastructure project.
Earlier this year, the usual group of suspects, led by well-known anti-fracking activist Bill McKibben, planned a “global wave of resistance” called BreakFree2016 - scheduled to take place from May 3-15 – on six continents. The event’s website announced the various activities, including an appearance and speech by McKibben, a Vermont resident, at the Colorado rally that promised: the “largest mass mobilizations for climate action in the history of Colorado.” It confirmed that there would be “civil disobedience.”
Did you hear about it? Probably not.
A news report of the planned Colorado activities said: “And on May 14, 350 Colorado is planning a day of speeches, live music and activities protesting oil and gas developments close to neighborhoods and schools in Thornton. The goal is to draw 1,000 people to the upcoming events.” The website, post-event, states: “about 800 people joined the action throughout the day” with “about 30-40 people” still there at the end of the day for the dramatic “frack-site” invasion. Yet, as even their own Facebook page photos indicate, not even 100 were present for the big McKibben speech. Without vendors and media, he may have had no audience at all.
After flying in to Denver, and then being driven to the protest site in a limousine, McKibben jetted off to Los Angeles, California, where he was joined by the greens’ “Daddy Warbucks,” billionaire political campaign donor Tom Steyer – with much the same results: a few hundred protesting fossil fuels and, as Energy In Depth reported, “the very social and economic underpinnings of liberal democracy.” The typical anti-everything protestors were present – but only a few.
In Iowa, as I addressed last week, a meeting of the Bakken Pipeline Resistance Coalition – which according to the organizer includes those with “concerns about the impact it could have on the environment, farmers who worry about their cropland and religious groups who view expanding use of fossil fuels as a moral issue because of climate change” – expected a crowd of 200. Instead, according to the Ottumwa Courier, “only 40 or so were seated when the meeting began. Others trickled in as the meeting progressed.”
Now, Colorado is ground zero for “one of the biggest environmental fights in the country this year,” as Lauren Petrie, Rocky Mountain region director for Food and Water Watch, a Washington, D.C.-based group advocating for safety in food production and oil and gas production, called it. Two ballot initiatives, 75 and 78, have the potential to, according to Colorado regulators, “effectively halt new oil and gas development in as much as 90 percent of the state.” In order to get the initiatives on the ballot, 98,492 valid signatures needed to be turned into the Colorado Secretary of State by August 8 – no later than 3:00 p.m.
In June, The Tribune reported that Tricia Olson, who has pumped in most of the funding for a group backing initiatives 75 and 78, hoped to “collect 160,000 signatures to account for the invalid signatures that inevitably pop up.” (Politico just announced: “recent campaign finance reports were filed with the Colorado secretary of state, the Sierra Club gave $150,000, making it the largest single reported contributor to the anti-fracking effort.”)
Because the Colorado Supreme Court, in a unanimous decision on May 2, declared local fracking limits “invalid and unenforceable,” as state law trumps local ordinances, Olson sees the ballot initiatives as their “last ditch effort.”
On Monday, August 8, exercising stagecraft, at 2:30 p.m., dozens of supporters emptied a U-Haul truck and delivered box after box of signatures to the Secretary of State’s office. They celebrated their “victory.” 350 Colorado, one of the groups behind the measures, proclaimed: “We did it! Over 100,000 signatures delivered on initiatives to limit fracking!” – not the 160,000 originally hoped for, and likely not enough to get on the ballot in November.
By CBS Denver’s accounting about 105,000 signatures were turned in – most in half empty boxes. Lynn Bartels, Colorado Secretary of State Communications Director, tweeted: “Proponents of fracking measures turned in lots of boxes with very few petitions in them.” Once the petitions were consolidated, there were roughly 50 empty boxes. Simon Lomax, an associate energy policy analyst with the conservative Independence Institute in Denver and a consultant who advises pro-business groups, said: “To make it look more impressive they added a bunch of empty boxes, or boxes with very few petitions. It just sort of shows, these groups don’t do substance, they just do deceptive publicity stunts.”
On CBS Denver, former Secretary of State Scott Gessler explained that since you need about 98,000 signatures to get on the ballot because, for a variety of reasons, at least 30 percent are rejected, you need to submit at least 140,000. He says that for the 105,000 signatures turned in to qualify would be “unprecedented,” something that “has never occurred in Colorado for a ballot initiative.” According to Gessler, the effort is “doomed” – though we will not know for sure until next month when the final counts are released.
Noted election reporter and national affairs columnist for the National Review, John Fund, told me: “If there is enough public support for an issue to get the votes needed to pass, getting a surplus of signatures to get it on the ballot is an easy task.”
Many Democrats, including Governor John Hickenlooper, support hydraulic fracturing and have come out against the ballot initiatives. Politico posits that because mainstream environmentalists “fear that their movement will suffer a demoralizing defeat if the two proposals make it in front of the voters,” they “hope the ballot initiatives will die instead.” Additionally, “A decisive referendum on oil and gas production would increase calls for [Hillary] Clinton to explicitly take a side.” She’s previously aligned with 75 and 78 – which could spoil her attempts to attract moderate Republicans she’ll need to win the state.
Despite their drama and declared “victory,” it doesn’t seem that the Colorado anti-fossil fuel crowd has enough signatures, or support, to make it onto the November ballot. They may be loud, but, alas, they are few.
The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc., and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). She hosts a weekly radio program: America’s Voice for Energy - which expands on the content of her weekly column. Follow her @EnergyRabbit.
Commentary by Marita Noon
Final federal approval for what is being called the “new Keystone” came from the Army Corps of Engineers on July 26 – allowing the pipeline to move forward. The 1,168-mile long Dakota Access Pipeline (DAPL), also called the Bakken Pipeline, is comparable in length to the Keystone XL. It will cross four states and carry 450,000 barrels of oil a day from North Dakota to a transfer terminal in Illinois where it will connect with other pipelines and be taken to refineries.
The $3.8 billion dollar project has pitted environmentalists against economic interests.
During the Keystone fight, outspoken opponent Jane Kleeb, founder of Bold Nebraska, said: “In America we should be focused on making sure that the oil in North Dakota, Oklahoma, and others, in Montana, that that oil is getting to market.” Now, thanks to DAPL, America’s oil will have a safer way to get “to market” – freeing up as many as 750 train cars a day to transport corn, soybeans, and grain. However, as soon as DAPL came on the scene, they moved the marker, and environmental opposition was mounted. Bold Iowa, a group that shares a website with Kleeb’s Bold Nebraska, says it has members willing to risk arrest in “nonviolent protests.” They are also training monitors to report any environmental violations or hazards.
On August 1, nine pieces of heavy equipment – excavators and bulldozers – were set on fire at three different DAPL construction sites, causing $3 million in damage. At the time of this writing, no arrests have been made. Additionally, protestors have gathered on the grounds of the North Dakota Capitol, calling for Governor Jack Dalrymple and legislators to put a halt to construction of the pipeline until their lawsuits are addressed.
On its “Stop the Bakken Pipeline” page, the Iowa Sierra Club posted: “A new pipeline will delay the US transition to clean and renewable energy and more fuel-efficient vehicles. The United States needs to move away from fossil fuel extractions and to energy sources that have less impact on climate change.”
The Club’s position sounds a lot like Hillary Clinton’s. When she finally came out against Keystone, she said: “We need to be transitioning from fossil fuels to clean energy.” She called the pipeline “a distraction from important work we have to do on climate change.”
Opposition, however, is not as broad-based as the environmental groups had hoped for. At an April meeting of the Bakken Pipeline Resistance Coalition in Iowa, organizers were disappointed. Chairs were set up for 200, but only about 40 “trickled in.” In the four states the pipeline will cross, more than 90 percent, on average, of the landowners signed the voluntary easement agreements.
At its peak, the DAPL’s construction is expected to involve as many as 4,000 workers in each state and will require the purchase of $200 million in American-made heavy construction and related equipment from Caterpillar, Deere, and Vermeer.
Cory Bryson, Business Agent for Laborers Local 563 reports: “We’ve been inundated with calls from all over the country from people wanting to work on this pipeline project. Mainline pipeline projects like Dakota Access provide excellent working opportunities for our members and tremendous wages. The Laborers excel at this work.” No wonder men and women want to travel to the pipeline’s locale, some workers, most without college degrees, brag about banking $2,000-5,000 a week.
In Illinois, the Jacksonville Area Chamber of Commerce has assembled hundreds of packets with information including restaurants, health-care facilities, RV sites, and laundromats. Executive Director Lisa Musch reports that her office has been receiving calls for months from people looking for rental properties. Teriann Gutierrez, owner of Buena Vista Farms, a resort-campground, and a retired plastics engineer, says: “I’ve been full since the beginning of April.” She told me the boost in population is bringing a lot of money into the community that has been hit hard with the loss of manufacturing jobs. DAPL is putting a lot of local people to work. Gutierrez is very thankful as the boom means she’ll be able to pay down debt.
“Like any major construction project, the DAPL will create, and more importantly maintain, high paying American jobs throughout the supply chain and throughout the nation,” North Dakota’s at-large Congressman Kevin Cramer said. “I’ve seen the crews that work on building the line and they take great pride in their craft. They spend money in local, usually rural, communities throughout the route. The steel suppliers and equipment manufacturers and distributors are just a few of the links in the chain. Everybody from fry cooks to hotel owners to financers are affected. Perhaps, most importantly, in a low price crude market, the economics of moving oil by the most efficient and safe manner possible preserves jobs on the production side of the equation as well.”
While DAPL is already creating lots of jobs, it is just one of many pipeline projects in the works that could be bringing much needed economic development to other communities and high-paying jobs for American workers. Gutierrez explained that, according to the workers staying at Buena Vista Farms: “The hardest thing is getting the permits. The long process holds up jobs.” Apparently, many of them made reservations but, then, had to delay them – and delay starting to work on the pipeline – because the permits hadn’t been approved as expected. It doesn’t have to be that way. Under President Obama, permitting for oil-and-gas activity has been slow-walked. Jobs have been held up.
Donald Trump has made clear that he’ll support pipelines and said he’ll invite TransCanada to reapply for the Keystone permit. On the other side, Clinton opposed Keystone and supports moving away from fossil fuels. Secretary of State John Kerry, Clinton’s successor, has implied that with “some 300 pipelines” we really don’t need any more. He said: “it’s not as if we’re pipeline-less.” A Clinton administration would likely extend the Obama delay tactic.
Whichever candidate wins in November will appoint agency heads who support his or her views – thus driving the policy direction.
Like Gutierrez, union members are grateful for the jobs. Last week, Dave Barnett, Pipeline Representative for the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry, told me: “We are pleased that the thousands of job opportunities associated with these projects are being decided on their need and merits, not on political pressures by extremists as the Keystone XL was.”
Whether the thousands of additional job opportunities materialize depends on American voters. Will we vote for pipelines that fuel the American economy and transport our natural resources safely and cheaply? Or, will we block job creation and economic development by voting with the environmentalists who want to “keep it in the ground?” In less than 100 days, we’ll have the answer to these important questions.
Commentary by Marita Noon
America’s rush to renewables has invited corruption and fraud.
Researcher Christine Lakatos and I, together, have produced the single largest body of work on green-energy crony-corruption. Our years of collaboration have revealed that those with special access and influence have cashed in on the various green-energy programs and benefitted from the mandates, rules, and regulations that accompany the huge scheme. Dozens of the projects, including biofuel, which required the unwitting investment of taxpayer dollars have failed – leaving employees without jobs, buildings without tenants, taxpayers without repayment, and cronies without pain (even snatching hefty bonuses on the way down). Most people know about Solyndra, the first bankruptcy, and some may know about Abengoa, the biggest bankruptcy, but there are many more.
These big projects allowed the politically connected to bilk taxpayers of billions and is the definition of corruption. But, there’s fraud in renewable energy, too – and, while it doesn’t hit us as hard as taxpayers, it does cost us as consumers.
Wednesday, July 20, representing the latest fraudster to be convicted – but not the first and surely not the last – “a jury found an Indiana man guilty of securities fraud and other crimes connected to a massive biodiesel fraud scheme,” reported Greenwire. It turns out, Jeffrey Wilson and his multistate cohorts pretended to manufacture biodiesel, which allowed them to claim renewable fuel credits – known as Renewable Identification Numbers or RINs. The Department of Justice said Wilson’s actions resulted in a $20 million loss to investors, $140 million in revenue, and $56 million in criminal profit.
I know more than most about the corruption surrounding green energy, but I hadn’t followed this. I dug further.
Just two weeks earlier, two men in Florida pled guilty to a “multistate biodiesel fraud scheme.” Biodiesel Magazine says Thomas Davanzo and Robert Fedyna operated several shell companies that were used to facilitate the “multistate scheme to defraud biodiesel buyers and U.S. taxpayers by fraudulently selling biodiesel credits and fraudulently claiming tax credits.”
Six months before, on December 21, 2015, two men were indicted on “101 charges alleging they abused incentives offered to companies that produced biodiesel fuels.” According to The Morning Call: “A federal prosecutor says they took subsidies for fuel they did not produce and sold renewable energy credits to unsuspecting buyers.” The charges include conspiracy, wire fraud, filing false tax documents, obstruction of the Internal Revenue Service, and obstructing a federal investigation. The indictment claims Dave Dunham and Ralph Tommaso used a complex scheme that reached from Lehigh Valley, PA, to Washington state and into Canada and allowed them to apply for and receive government subsidies for producing clean diesel.
Also in 2015, two Las Vegas men and an Australian man were sentenced to federal prison for schemes to generate and sell fraudulent biodiesel credits. In another case, Rodney Hailey, owner of Clean Green Fuels in Maryland, was convicted of selling $9 million in counterfeit RINs from his garage without even trying to make biodiesel. Hailey’s neighbors called authorities because they were alarmed by the “profusion of luxury cars” that showed up in his “suburban Baltimore neighborhood” – 22 in all, claims a report in Bioenergy Connection. Then there is Jeffrey David Gunselman, owner of Absolute Fuels in Lubbock, TX, who was indicted by a federal grand jury in Texas for lying about producing biodiesel fuel and selling the resulting renewable fuel credits. Reports indicate that he generated some 48 million RINs without actually producing any biodiesel fuel. He’s remembered for using his ill-gotten gain to purchase, among numerous luxury items, a demilitarized Patton tank.
The most interesting biodiesel fraud case may be that of Philip Rivkin, founder and chief executive of Houston-based Green Diesel who is now serving a 10-year sentence for selling fraudulent RINs. Over a seven-year period he concocted an elaborate scheme that included, according to Bloomberg: “a three-story steel skeleton crammed with pipes and valves” – some of which were not connected to anything. In late 2008, Green Diesel did reportedly produce a batch of about 130,000 gallons of biodiesel, but the quality was “too poor for commercial sale.”
Biodiesel RINs have become a valuable commodity because, as a result of the Renewable Fuel Standard (RFS), refiners are required to blend biofuels into the nation’s fuel supply and the RINs supposedly prove they’ve complied. Rivkin sold more than $78 million in sham RINs. He bragged about building a $500 million company without any debt. When he fled the U.S. in 2011, prior to his 2014 capture, he did so in his $3.4 million Canadair Challenger jet.
These cases of RIN fraud are just those who’ve been caught – but they all have a common thread. They aren’t the names we are used to in the green-energy corruption story like billionaires Warren Buffet and Tom Steyer or former politicos like Al Gore and Bill Richardson. They aren’t cronies who’ve used political connections to work the system. They are fraudsters who found a way to fortune through the flawed RFS – first enacted by Congress in 2005 and expanded in 2007 – which contains a credit-trading program.
In a July 25 report on the RFS, Marlo Lewis, Jr., a senior fellow at the Competitive Enterprise Institute, explains: “Each gallon of biofuel produced is assigned a unique 38-digit Renewable Identification Number (RIN). When a refiner sells a gallon of biofuel in the motor fuel market, it earns a RIN credit. A refiner that does not meet its annual obligation by actually blending and selling biofuel can comply by purchasing surplus RIN credits from another refiner that exceeded its obligation. A refiner can also bank surplus RIN credits to meet up to 20 percent of the following year’s obligation.”
Because the law requires ever-increasing quantities of biofuel be produced – even beyond what consumers want or most vehicles can handle – RINs offer refiners a way to presumably meet the mandates while providing the market with what it wants. But, according to Brendan E. Williams, American Fuel and Petrochemical Manufacturers executive vice president, biodiesel RINs are especially lucrative: “Ethanol RINs stay attached to physical gallons of ethanol until the ethanol gallon is blended with petroleum. This separation usually occurs at terminals, which are rarely owned by ethanol producers. Once ethanol is blended, the RIN is detached and becomes a tradable commodity. Therefore, rather than a refiner or ethanol producer, it is often the terminal operator who does the blending that controls ethanol RINs. A refiner that has a terminal rack at the refinery for local gasoline distribution can also do this blending, but this is not the usual situation because refineries are not located everywhere. Biodiesel RINs work differently. EPA allows biodiesel producers to detach the RIN as soon as the biodiesel is produced. There is no requirement for biodiesel to be blended to petroleum diesel before the RIN is detached. This difference highlights why there is more fraud in biodiesel. The biodiesel fraudsters lie about producing physical biodiesel just so they can generate RINs on paper to sell. This is made possible based on the previously mentioned fact that there is no requirement for biodiesel to be blended with petroleum diesel.” A graphic in the Bloomberg report adds: “Biodiesel RINs tend to cost more than ethanol RINs or other types because they are scarcer and can be used to satisfy multiple requirements under the Renewable Fuel Standard.”
“RIN swaps,” according to Bloomberg, “are usually agreed upon between companies, traders, and brokers via email, phone, texts, and chatroom messages.” The onus is on the buyers, “if the RINS are found to be fraudulent, the holder has to purchase new credits to replace the phony ones” – and the new credits must be purchased at the current price that may be higher than the original purchase.
Of course, the refiners’ purchase of RINs – and in the case of fraudulent RINs, the double purchase – is passed on to the consumer. We are stuck holding the bag for the fraudsters’ get-rich-quick scheme that is enabled by the RFS.
“Because refiners can buy them to satisfy their obligations to introduce renewable fuels into the national market,” Scott Irwin, an agriculture economic professor at the University of Illinois, according to The Morning Call, calls the RINs: “valuable.” He explains: “A combination of little regulation, the small-business nature of biodiesel producers and higher-than-expected prices for credits produced a rash of fraud. … It was kind of set up for fraud.”
Because the EPA, whose expertise is in things like oil spills and air pollution, isn’t equipped to handle these cases of sophisticated financial fraud, Bloomberg reports, it has reached out to the Commodity Futures Trading Commission – “which is itself stretched thin because of its responsibilities under Dodd-Frank.” The lack of oversight made the RFS biodiesel program a “government playground for con artists.”
The biofuel fraud is just one prong in the growing push for RFS reform. The economic and technical realities of the “blend wall,” as detailed in Lewis’ report, is another. On July 27, Bloomberg chronicled the history of the unlikely third prong: big green groups’ biofuel blunder. They’ve now turned against ethanol due to the agricultural runoff in waterways and conversion of prairies to cropland. Environmentalists, who once championed biofuels, are now seen as a factor in “improving the odds that lawmakers might seek changes to the program next year.”
Reforming the RFS is not a partisan issue. Free market advocates don’t like the mandates. Consumers resist been forced to purchase something they don’t want. Environmentalists don’t like the loss of prairie land and damage to the water supply. Rep. Peter Welch (D-VT) says the RFS has “truly been a flop. The environmental promise has been transformed into an environmental detriment.”
The only resistance to calls for RFS repeal or reform comes from the biofuel producers lobby – though as I’ve previously addressed, corn ethanol would likely still be blended into our fuel supply at about the current levels as it is a valuable oxygenate that increases octane.
Lewis concludes his report with this admonition: “Congress should repeal the RFS so that consumer preference and competition, rather than central planning policies, determine which fuels succeed or fail in the U.S. marketplace. Failing that, Congress should sunset the RFS so it ends after 2022. In the meantime, the EPA should cap mandatory biofuel sales at the E10 blend wall, while allowing biofuel producers to sell as much additional renewable fuel as consumers actually want to buy.”
Every politician in Washington talks about getting rid of waste, fraud, and abuse. Getting rid of the RFS would go a long way to achieving that goal.
Hillary’s energy policies: enriching Wall Street cronies, while the poor are pawns in their political game
Commentary by Marita Noon
In his less-than-enthusiastic endorsement of Hillary Clinton as the Democrat’s choice for President, Sen. Bernie Sanders decried “Greed, recklessness, and illegal behavior” and declared that we couldn’t let “billionaires buy elections.” Perhaps his opposition research team discovered what we have about Clinton’s connections with the very entities he despises: Wall Street – which he’s accused of “gambling trillions in risky financial instruments;” and “huge financial institutions” that he says: “simply have too much economic and political power over this country.”
Wall Street and its “huge financial institutions” are Clinton allies – supporting both her campaign and donating big bucks to the Clinton Foundation.
In the batch of Democrat National Committee (DNC) emails WikiLeaks made public on July 23, DNC Research Associate Jeremy Berns tells his colleagues: “She [Clinton] doesn’t want the people knowing about her relationships on Wall Street.” He adds: “She wants to achieve consistency and the best way to do that is to keep the people ignorant.”
For the past four years, I’ve collaborated with citizen activist/researcher Christine Lakatos (she’s been at it for six years) on what we’ve called: President Obama’s green-energy crony-corruption scandal. Together we’ve produced the single largest body of work on the topic. In her blog, the Green Corruption Files, she posts her exhaustive research – what I affectionately refer to as the drink-from-the-fire-hydrant version. I, then, use her research to draft an overview that is appropriate for the casual reader.
More recently, our efforts have morphed to include the Democrats’ presidential nominee, as Lakatos found the same people are her “wealthy cronies,” too.
In Lakatos’ most-recent, and final Green Corruption File, released on July 19, she states: “While there are numerous ways you can ‘buy access to the Clintons,’ I’m only going to connect the dots to the Green Gangsters, which we’ve already established are rich political pals of President Obama, as well as other high-ranking Democrats and their allies, who were awarded hundreds of billions of ‘green’ taxpayer cash.”
Her lengthy report is “devoted to proving beyond a reasonable doubt that the Democrat presumptive presidential nominee, Hillary Rodham Clinton, is not on only in bed with Big Money (Wall Street, the Uber-Rich, special interests groups and lobbyists) and Dark Money (Super PACS and Secret Cash), she’s also bankrolled and is in cahoots with – directly and through her husband and her family foundation – the wealthy Green Gangsters, who are robbing U.S. taxpayers in order to ‘save the planet.’”
While the dozens of pages prove the involvement of names you know – like former vice president Al Gore, former Governor Bill Richardson, and billionaire donors Tom Steyer and Warren Buffett, and names you likely don’t know: David Crane, John Doerr, Pat Stryker, and Steve Westly – I’ve chosen to highlight the Clinton’s Wall Street connections that have benefited from the green deals that were cut in the Obama White House and that will continue on if Clinton wins.
Lakatos points out: “Clinton’s ‘ambitious renewable energy plans’ move far beyond Obama’s green mission that has been rife with crony capitalism, corporate welfare, and corruption.” Along with more climate rules, she “wants an open tab for green energy.” Remember the DNC’s official platform includes: “the goal of producing 100 percent of electricity from renewable sources by 2050″ and “a call for the Justice Department to investigate fossil fuel companies for misleading the public on climate change.”
Three Wall Street names of my limited-word-count focus are Goldman Sachs, Citigroup, and Bank of America. Each is a top-contributing Clinton campaign supporter and a Clinton Foundation donor. They have benefited from the hundreds of billions in taxpayers dollars given out for green energy projects through the Obama Administration. All three have expectations that Clinton will continue the green programs put in place by the Obama administration.
As Lakatos pointed out in previous reports, Goldman Sachs is connected, via various roles, to at least 14 companies and/or projects that won green taxpayer cash – a tab that exceeded $8.5 billion. One specific example: Goldman is credited as the “exclusive financial adviser” for the now bankrupt Solyndra ($570.4 million loss). Then there is now-bankrupt SunEdison – an early Goldman Sachs investment. SunEdison received $1.5 billion in federal and state subsidies. And, in 2010, Goldman Sachs handled the IPO of government winner, Tesla Motors that was awarded $465 million from the Department Of Energy (DOE) ATVM program – they got much more if you factor in the state and local subsides: $2,406,805,253 to be exact. Also, according to Goldman, “In May 2013, [they] helped raise over $1 billion in new financing for Tesla Motors.”
Citigroup/Citi Foundation – donated between $1 million to $5 million to the Clinton Foundation.
This big bank is connected to approximately $16 billion of taxpayer money. Lakatos, in 2013, reported that Citi was actively involved in securing the 1703/1705 DOE loans; was a direct investor; and/or served as an underwriter for the initial public offering (IPO) of at least 16 of Citi’s clients that received some form of government subsidies. One green company where Citi is a major investor is SolarCity, which has been subsidized through various stimulus funds, grants and federal tax breaks at the tune equaling almost $1.5 billion. Billionaire Elon Musk is CEO of Tesla and Chairman at SolarCity. He’s a Clinton Foundation donor ($25 million to $50 million) and Hillary supporter, too.
Bank of America/Bank of America Foundation – donated between $500,000 to $1 million to the Clinton Foundation.
Bank of America, amongst other green efforts, participated in Project Amp – a four-year, $2.6 billion project to place solar panels on rooftops in 28 states. At the time, the Wall Street Journal reported: “Bank of America Merrill Lynch unit will provide $1.4 billion in loans for the project,” of which “the financing is part of Bank of America’s plan to put $20 billion of capital to work in renewable energy, conservation and other clean technologies that address climate change.” In the final days of the DOE loan program (September 2011), the DOE awarded a partial guarantee of $1.4 billion loan to Project Amp. According to a press release, Bank of America increased its second environmental business initiative from $50 billion to $125 billion in low-carbon business by 2025 through lending, investing, capital raising, advisory services and developing financing solutions for clients around the world.
It’s important to remember that climate change – which is the foundation of the green agenda – is part of the Clinton Foundation’s mission statement: “In communities across the globe, our programs are proving that we can confront the debilitating effects of climate change in a way that makes sense for governments, businesses, and economies.” Additionally, the Foundation’s coffers were enriched when Clinton and her State Department staff solicited contributions from foreign governments to the Clinton Global Initiative, as we detailed in our coverage of her clean cookstove campaign.
In addition to Clinton’s obvious Wall Street connections, one of the many startling realizations that can be gleaned from the report on Hillary’s Horrendous Hypocrisy, is the fact that these companies – some of which would not be in existence without the grants and tax credits – that received millions in taxpayer dollars, took our money and gave it to the Clinton Foundation and to the Clinton Campaign. As was the case with Clinton Foundation donor/campaign fundraiser George Kaiser, these billionaires are making lucrative profits, at taxpayer expense, from bankrupted green companies like Solyndra.
In short, we, the taxpayers, are subsidizing the well-connected millionaires and billionaires – and Hillary Clinton is part of all of it. Meanwhile, she admonishes the average American to combat climate change by driving less and reducing our personal use of electricity.
Bernie Sanders was right to be alarmed. Huge financial institutions do have too much political power. Wall Street billionaires are trying to buy Clinton the White House. In return, she’ll be sure their green energy investments pay off for them by demanding that America go green.
It was awful tempting to jump on into that water, but several thousand people managed to sweat their way through another hot Tawes Crab and Clam Bake. While Republicans tend to have a little more presence in the area, some of the Tawes regulars were absent because the event coincided this year with the Republican National Convention in Cleveland.
That convention minted the GOP Presidential nominee, who seemed to be pretty popular.
That group of signs dwindled little by little, as Trump adorned a number of tents. On the other hand, there were far fewer Hillary signs – but the Democrats also had their crowded space.
Sarah Meyers (in the blue shirt) is a friend of mine, and she was tearing her hair out as the coordinator there because they overbooked the space. (You may see her at the Democratic Convention next week, as she will be there as a page.) By the same token, the Somerset Republicans only went with one tent as well and it was packed, too. So both parties had close quarters.
Yet the businesses seemed to have ample space. I didn’t peek into every tent, but many of them (as well as businesses lining State Route 413 into Crisfield) had a simple message: welcome Governor Hogan.
Even lobbyist Bruce Bereano, who always has the largest space, got into that act.
Yet among those businesses I did pick out I found an odd juxtaposition there, particularly under the auspices of the local economic development commission.
In order, these businesses are Cleanbay Renewables, which is a chicken waste recycling firm, Pinnacle Engineering, which services NASA, the Somers Cove Marina Commission, and Great Bay Solar I. The last is interesting because this project was originally supposed to be wind turbines, but objections to the siting of the turbine towers from the Navy forced the company to go solar, making lemonade out of lemons. With the exception of Pinnacle, the state has sort of forced the market for the other two businesses.
Yet on the other side was a law firm that objects to the approach the state is using to clean Chesapeake Bay through its Clean Chesapeake Coalition. They believe much of the problem comes from the sediment that leaches out from behind Conowingo Dam in severe storms.
I happen to think the CCC has a pretty good case.
Speaking of business, the food business did pretty well there. Almost too well.
According to my cell phone camera, which took all my photos today, I took that picture at 12:01 as I walked over to get in line for food. Here is the end result, 46 minutes and four lines later.
I actually asked for the onion rings as I inched closer to the front of the French fry line. And I certainly don’t fault the crew because they worked hard, even toward the end when I snapped this.
I think the issue is the increasing use of “runners” who get multiple orders of food and slow down the lines. It seemed like every third person in line was one, which meant those who just wanted to fend for themselves had to wait.
The guy who didn’t have to wait in line was Governor Larry Hogan, because I don’t think he ate a bite.
This is a second segment of time lapse. I took this photo above in the area where the food lines were at 1:57 p.m. Now, let me ask you: where’s Hogan?
He’s barely visible in the center of the photo, obscured by Delegate Charles Otto in the pinkish shirt. In 35 minutes he had advanced maybe 80 yards thanks to the crush of well-wishers who wanted to shake his hand, have a photo with him (although he suggested it in a number of cases) and perhaps say their piece. I was in the latter group as I wanted to thank him for his stance on the Presidential election. Larry commented that he had noticed the reception I’ve received on social media a couple times as it echoed a lot of what he had seen on his.
Stay strong, Governor.
The two major-party candidates for U.S. Senator were also there. Now I missed Democrat Chris Van Hollen – perhaps because I didn’t recognize him walking around – but I did get a glimpse of Kathy Szeliga from the GOP.
Of the people I saw and photographed, she was one of the few I didn’t speak to at least a little bit. I don’t blame her – our paths just didn’t cross but once.
Of course, a few locals managed to be in front of my camera, such as Delegate Mary Beth Carozza, who brought her family and a batch of others from Worcester County.
She was speaking to Duane Keenan from Red Maryland.
The other half of Worcester County must have come with Senator Jim Mathias, who had a number of folks with a matching shirt to his. He was a little peaked by the time I took the moment to thank him for his assistance with the school board election bill.
Yet while we had hot and cold running politicians there, we also had a lot of media asking questions. I noted Duane Keenan above, but here’s Ovetta Wiggins of the Washington Post (right) speaking to Jackie Wellfonder. Jackie made the cut in Ovetta’s story.
I also had the pleasure of meeting Mike Bradley, who hosts WGMD’s morning show out of Lewes, Delaware. Since his station covers a fair amount of the lower Shore in its signal, he was interviewing some of the local players. It’s a very good show that I catch once I cross into Delaware on my way to work.
And it could be that the Tawes event is becoming one for the greater Delmarva area. A delegation of elected officials from the First State included Representative Tim Dukes, who covers the Laurel and Delmar areas in his 40th District.
The reason I’m in the photo on the right: it was taken by Dukes’ fellow representative (and Minority Leader in the Delaware House) Danny Short of Seaford. Since we’re neighbors with Delaware it was nice to see some of their elected officials, too.
In that respect, this coverage was a little lacking because I did a lot of walking and talking to a number of nice folks from around the state. I want to say I overheard Jackie Wellfonder say this, but Tawes really is “like a big ‘ol family reunion.” We don’t often see a lot of politicians travel across the bridge but for attending Tawes, so you have to say hello and speak your piece when you can.
Commentary by Marita Noon
Editor’s note: by Marita’s request – and so as not to come in the midst of other upcoming content from her – I’m posting this a day earlier than Marita’s normal Tuesday morning slot.
The name Donald Trump will occupy the news cycle during the Republican National Convention in Cleveland, Ohio. Other than comments from oil entrepreneur Harold Hamm, energy won’t be a huge topic on the stage – though it does hold a spot on the newly approved Republican Platform and has a starring role in Trump’s plan to “make America great again.”
Trump calls it “An America First Energy Plan.” In it, he calls for “American energy dominance,” which he sees as a strategic, economic, and foreign policy goal. Like every recent president before him, he seeks “American energy independence” – which he defines as being “independent of any need to import energy from the OPEC cartel or any nations hostile to our interests.” According to his energy adviser, Rep. Kevin Cramer (R-ND), this acknowledges that we will still use oil from our friends like Canada and Mexico and that, for example, due to refinery configurations, there will likely continue to be oil imports and exports. The thing to note is that we will not need to, not have to, do business with those who are hostile toward America.
He understands that our amazing American energy resources offer the United States tremendous wealth and economic advantage. In his May 26 speech in North Dakota, addressing untapped oil and gas reserves on federal lands, Trump exclaimed: “We have no idea how rich we are. We want to cherish that wealth.” In comparison, he pointed out that Hillary Clinton wants to lock up “trillions in American wealth” while her “poverty-expansion agenda” enriches her friends and makes everyone else poor. (Be sure to read more about Hillary enriching her friends in my column next week.) In the speech, Trump pointed out to the audience, largely made up of people from the oil and agriculture industries: “If Crooked Hillary can shut down the mines, she can shut down your business, too.”
His America First Energy Plan calls for a redirection of our energy agenda. Overall, Trump will move away from government-central planning efforts and return authority back to the states – an idea that has made it into the Republican Platform. His plan has three main components. Under a Trump administration there will be big changes in climate policy, regulations, and the management of federal lands.
While Trump is known to have called climate change “a hoax,” and has declared that he will not allow “political activists with extreme agendas” to write the rules, he is a true environmentalist. Coming from New York City where the only “nature” is Central Park, he has a heart for the environment. Cramer told me Trump holds a typical “Manhattan view of the West:” clean air, green space, and nature are precious. In his energy speech, Trump announced his environmental policy: “my priorities are very simple: clean air and clean water.” A Trump administration “will work with conservationists whose only agenda is protecting nature.”
In his “100-day action plan,” Trump says he’ll rescind the Climate Action Plan – which “gives foreign bureaucrats control over how much energy we use.”
[Note: this foreign control over energy use was a key component in the Brexit vote - as I wrote a few weeks ago. Since then, Theresa May, the UK’s new Prime Minister, who last week announced: "I want to see an energy policy that emphasises the reliability of supply and lower costs for users," has scrapped the Department of Energy and Climate Change and replaced it with a new Department for Business, Energy & Industrial Strategy. With a President Trump, we can expect similar action.]
Trump has pledged to “cancel the Paris Climate Agreement and stop all payment of U.S. tax dollars to U.N. global warming programs.” He says such policies are evidence of America bending to benefit other nations at a cost to the U.S. Once the “draconian climate rules” are eliminated there is no rationale for imposing a “job-killing cap-and-trade” scheme or to keep extending the subsidies for wind and solar. He is not opposed to wind and solar energy, and in fact, wants to “get bureaucracy out of the way of innovation so we can pursue all forms of energy,” but he doesn’t support the idea of “the government picking winners and losers.” Like other energy sources, once the subsidies expire, the wind and solar industry would benefit from typical business tax deductions and deferments.
Trump’s agenda calls for “Regulation reform that eliminates stupid rules that send our jobs overseas.” He knows that “costly regulation makes it harder and harder to turn a profit.”
In his speech, he accused the Environmental Protection Agency of “totalitarian tactics” and pointed out the current enforcement disparity: “The Department of Justice filed a lawsuit against seven North Dakota oil companies for the deaths of 28 birds while the Administration fast-tracked wind projects that kill more than 1 million birds a year.”
Cramer told me we can expect Trump to roll back a lot of Obama’s regulatory overreach and take a different approach toward rules, like the Waters of the U.S. and the Clean Power Plan, that are currently under a court-ordered stay.
Coal miners have come out en masse for Trump because of his promise to “save the coal industry.” I asked Cramer how Trump planned to do that. He told me that while coal-fueled power plants that have already been shut down or converted to natural gas will not likely be reopened, a Trump administration can save what’s left and stop the bleeding by not artificially punishing the industry through regulation.
On July 14, the U.S. House of Representatives passed the 2017 Department of Interior, Environment, and Related Agencies Appropriations Bill. It provides an example of actions we can expect from a President Trump. Cramer says if this bill were to make it to Trump’s desk, he would sign it. Some of the bill’s provisions include:
- Prohibiting the EPA from implementing new greenhouse gas regulations for new and existing power plants,
- Prohibiting harmful changes to the “stream buffer rule” or making changes to the definition of “fill material” negatively impacting coal-mining operations, and
- Requiring a report on the backlog of mining permits awaiting approval.
Additionally, the bill cuts funding for regulatory agencies – “a decrease of $64 million from last year’s budget and $1 billion below the President’s request.”
While the Obama Administration has issued near fatal regulations on the coal industry (which Hillary would take even further), other countries are using more coal. On July 11, the Financial Times announced that prices for coal surged on increasing demand in China.
In short, Trump explained: “Any future regulation will go through a simple test: is this regulation good for the American worker? If it doesn’t pass this test, the rule will not be approved.”
In his speech, Trump reminded people that President Obama has halted leasing for new coal mines on federal lands and aggressively blocked the production of oil and natural gas by closing down leases and putting reserves off limits. He pointed out that these resources are an American treasure and that the American people are entitled to share in the riches.
One of the ways Americans will benefit from the riches of our natural resources is through a designated fund that, much like many natural resource states already do, will put a portion of the revenues directly into rebuilding roads, schools, and public infrastructure.
As a part of his 100-day action plan, Trump has promised to “lift moratoriums on energy production on federal areas.” Instead of slow-walking permits or being passive-aggressive with the permitting process, he’ll order agencies to expedite exploration, drilling, and mining permits.
Trump has said he intends to “trust local officials and local residents.” This idea will be played out in his approach to the management of federal lands – which Cramer explained will be more of a state and federal partnership where states will have a much greater say regarding their land use. This includes the regulation of hydraulic fracturing. In a blow to the Obama administration’s overreach, a federal court recently affirmed that the regulation of the technology is the jurisdiction of the states – not the Federal Bureau of Land Management.
We’ll see this same philosophy played out in the designation of national monuments – something the Obama administration has abused by turning the ability to designate national monuments into a land grab. His monument designations often prevent productive use of the federal lands – such as agriculture or mineral extraction. The GOP platform committee adopted language that empowers states to retain control over lands within their borders. New monuments will “require the approval of the state where the national monument is designated or the national park is proposed.” As a result, Cramer told me: “We will not see a lot of new federal lands.”
There are two additional important energy items to note. First, Trump would “ask TransCanada to renew its permit application for the Keystone pipeline” – which would be built by American workers. Second, Trump has long been a supporter of nuclear power.
Trump’s energy plan is a turn toward realism. It is based on the fact that our American energy abundance can allow for shared prosperity, better schools, more funding for infrastructure, higher wages, and lower unemployment. Isn’t that what making America great again is all about?
Commentary by Marita Noon
Death Valley, California, is known as “the hottest place on earth.” But, if you hear the news that the “Hottest Place on Earth Has Record-Breaking Hot June” – when “temperatures exceeded average June temperatures by about 6 °F” – it might be easy to ascribe the heat to alarmist claims of climate change. While Southern California was experiencing power outages due to a heat wave, Death Valley hit 126 °F – though the previous June high was 129 °F on June 30, 2013, and Death Valley holds the highest officially recorded temperature on the planet: 134 °F on July 10, 1913.
Yes, it is a hot summer for most of the U.S. – but that was predicted by WeatherBELL’s Joe Bastardi who, on Groundhog Day, referenced El Niño and said: “we may have the hottest summer since 2012.” Dr. Roy Spencer, Principal Research Scientist at the University of Alabama in Huntsville, explains: “it is usually the second calendar year of an El Niño event that is the warmest.” The current El Niño event made 2015 “the 3rd warmest year in the satellite record” – records, which have been kept for 38 years (all three of the hottest years were during an El Niño event). The 2015-16 El Niño is one of the strongest on record.
El Niño is a natural weather pattern first discovered centuries ago by Peruvian fisherman who noticed that the ocean would often warm late in the year. They called the phenomenon El Niño, after the Christ Child. “Modern researchers,” according to Bloomberg, “came to realize its importance to global weather in the 1960s, when they recognized the link between warm surface water and corresponding atmospheric changes.”
El Niño usually means warmer or milder winters and cooler summers in the U.S. – which has been bad for producers of America’s natural gas, as less has been needed for heating and air conditioning. Describing the winter of 2015-16, one account said: “warm, wet or even ‘what winter?’” This past winter’s milder temperatures coincided with abundant output from shale formations, that continued to grow through last winter, and, as reported by Natural Gas Intelligence (NGI): “collapsed natural gas prices to the lowest levels since 1999.” As a result, wholesale electricity prices also tumbled.
The trend away from coal for power generation has previously helped natural gas producers, as the increased production easily met strengthening demand. However, that demand has slowed as, according to NGI: “most U.S. regions that could switch out of coal on economic terms have already done so.”
While the warmer winter and oversupply condition coincided to drive natural gas prices to their lowest levels in almost 17 years, weather and supply are now driving them back up.
El Niño patterns are usually followed by what is called La Niña – which happens as the ocean temperatures cool. La Niña generally takes place three months, or as much as twelve months, after an El Niño cycle. A report from CNBC, back in January, projected that this year’s El Niño would “fade by May-July” – which is what we are seeing and that is causing the hotter, drier summer. The Browning World Climate Bulletin says: “The factors that cooled so much of North America in April and May are retreating and the hot marine air masses will surge inland.” Likewise, NGI States: “The El Niño event that led to record North American winter temperatures has made way for the transition to La Niña, which usually results in hotter-than-normal summer temperatures.”
Addressing these weather patterns, Bloomberg cites Kevin Trenberth, distinguished senior scientist at the National Center for Atmospheric Research in Boulder, Colorado, as saying: “The cycles occur every two or three years on average and help regulate the temperature of the Earth, as the equatorial Pacific absorbs the heat of the sun during the El Niño and then releases it into the atmosphere. That can create a La Niña: a ‘recharge state’ when ‘the whole Earth is cooler than it was before this started.’”
While experts differ on the exact timing, most expect La Niña to form as early as July or as late as December – or even January. Trenberth explains: “La Niña is more like a strong case of ‘normal.’ If a region is typically dry, it could become arid in a La Niña. If it’s usually wet, there may be floods.” Which translates to a colder, and more volatile, than average winter – though predictions are for drier and warmer in the southwest U.S. Reports indicate that a strong La Niña could push more polar vortexes down into the U.S. and typically a strong El Niño, as we’ve just experienced, is followed by a strong La Niña.
On June 29, the Financial Times announced: “US natural gas prices have leapt 30 per cent this month as hot weather boost demand for air-conditioning and slowing supplies point to a gradually tightening market.” It adds: “After years with prices in the doldrums, US gas output has also begun to level off.”
The hot summer, according to Bastardi, will continue with widespread warmth through the fall – with the Northeast and Midwest possibly hitting 90 °F into October. Then, going from one extreme to the other, when winter hits, it is expected to be, as previously addressed, colder-than-normal across the Northwest, Upper Midwest, and Northeast.
These conditions create higher cooling and heating demand for natural gas. And that, coinciding with reduced supply, will give a boost to U.S. natural gas prices – rebalancing the market and bringing price recovery.
For investors, Bloomberg states: “Seeing as North American Winters are expecting to be stronger with La Niña, SocGen [Societe Generale Corporate & Investment Banking] recommends investing in natural gas.” The Price Group’s Phil Flynn, seen daily on the Fox Business Network, concurs. He told me that in the rush to convert electricity generation to natural gas, we are now in a place, unlike the winter of 2014, where there are not enough coal-fueled power plants to fill the demand gap. The idea was that with global warming, winters would remain mild, but with the naturally occurring La Niña cycle, and the projected cold winter, we are facing high demand at a time when natural gas production is “getting ready to fall off a cliff.” With reduced supply and pipeline constraints, natural gas may not be able to meet all of the demand. He is encouraging his clients into natural gas.
For consumers this may mean that, because wholesale electricity prices strongly correlate to natural gas prices, power supply costs could be impacted – resulting in higher utility bills. Because of low natural gas prices, homeowners have not felt the full hit of higher cost renewables – but that could be changing as we head into a La Niña winter.
Commentary by Marita Noon
Throughout the past four years, climate change activists have been secretly coordinating with one another regarding ways to prosecute individuals, organizations, and companies that are their ideological foes. They met to develop a strategy to use RICO (Racketeer Influenced and Corrupt Organizations Act), which was intended to provide stronger weapons for prosecuting organized crime, against those who speak out against the Obama administration’s war on fossil fuels.
More recently, the activists, including Naomi Oreskes and Bill McKibben, have coordinated with Attorneys General (AG) culminating with a March 29 press conference, led by New York AG Eric Schneiderman and joined by former Vice President Al Gore. There the “unprecedented coalition” – as Schneiderman’s press release called it – was announced: the newly formed AGs for Clean Power. Though “vague” on their specific plans, 17 AGs (16 Democrats and 1 Independent) have, as the Huffington Post reported: “committed to pursuing an all-levers approach” to, as Gore said: “hold to account those commercial interests that have been, according to the best available evidence, deceiving the American people, communicating in a fraudulent way.”
ExxonMobil has been the first and most obvious target. While the RICO Act is federal legislation passed in 1970, more than two dozen states have “Baby RICO” laws – which are, according to InsideClimateNews.org, “broader than the federal version.”
Four different investigations claiming that Exxon conspired to cover up its understanding of climate science have been launched. Schneiderman was the first. Last November, he issued a subpoena demanding: “that ExxonMobil Corporation give investigators documents spanning four decades of research findings and communications about climate change.” In January, the Los Angeles Times announced: “California Atty. Gen. Kamala D. Harris is investigating whether Exxon Mobil Corp. repeatedly lied to the public and its shareholders about the risk to its business from climate change – and whether such actions could amount to securities fraud and violations of environmental laws.” On April 19, Massachusetts AG Maura Healey opened an investigation to seek “information regarding whether Exxon may have misled consumers and/or investors with respect to the impact of fossil fuels on climate change, and climate change-driven risks to Exxon’s business.” Just days after the March 29 press conference, Virgin Islands’ AG Claude Walker, in his demand for records, became the first to cite the racketeering law to “probe Exxon over its longtime denial of climate change and its products’ role in it.” Additionally, he listed roughly 100 academic institutions and free market think tanks in his subpoena. The National Review reports that Walker promised a “transformational” use of his prosecutorial powers in the global-warming crusade. Separately, Walker also subpoenaed records from the respected Washington DC think tank, the Competitive Enterprise Institute (CEI). Schneiderman and Healey have also requested records from research and advocacy groups. Harris, who is running for the Senate seat to be vacated by retiring Senator Barbara Boxer (D-CA), “isn’t expected to do much in terms of investigating Exxon,” according to the Daily Caller.
The Free Beacon references “internal documents” stating that the goals of the larger campaign are:
- “delegitimize [ExxonMobil] as a political actor,”
- “force officials to disassociate themselves from Exxon,”
- “drive divestment from Exxon,” and
- “to drive Exxon & climate into center of 2016 election.”
The Wall Street Journal (WSJ) adds:
- “to establish in the public’s mind that Exxon is a corrupt institution that has pushed humanity (and all creation) toward climate chaos and grave harm.”
Despite the attacks on Exxon, WSJ quotes Lee Wasserman, director of the Rockefeller Family Fund – one of the foundations behind the crusade – as saying: “It’s not really about Exxon.” Instead: “It’s about helping the larger public understand the urgencies of finding climate solutions.”
Senator Sheldon Whitehouse (D-RI), who has long advocated that the Department of Justice (DOJ) investigate whether Exxon and other fossil fuel companies violated the RICO statute by disputing the role of fossil fuel burning in global warming, at a recent hearing, asked Attorney General Loretta Lynch if she’d considered using RICO against fossil fuel companies. She replied: “This matter has been discussed. We have received information about it and have referred it to the FBI to consider whether or not it meets the criteria for which we could take action on.”
WSJ reports: “The new legal theory has yet to gain momentum within the Justice Department, according to officials familiar with internal discussions. But after prodding by lawmakers, the Federal Bureau of Investigation is conducting a preliminary review.”
Even legal scholars, such as Columbia Law School professor Merritt B. Fox, who, according to Reuters, agrees with the importance of climate change, expressed skepticism about the legal strategy of the prosecutors: “The market was well supplied with information about climate change from a variety of sources.” Reuters adds: “investors get information on climate change from many sources and Exxon would probably not be able to alter the ‘total mix’ of publically available information.” Similarly, Pat Parenteau, a professor of environmental law at the Vermont Law School, is quoted by InsideClimateNews.org: “Hopefully there is something more than unsubstantiated suspicion to support this.” Parenteau explains: “The most serious question is whether the attorney general [Walker] has any basis to suspect that Exxon has engaged in activities that violate the statutes about obtaining money by false pretense and fraud.” In WSJ, David Uhlmann, a university of Michigan law professor and former federal crimes prosecutor, expressed concern regarding the ability to establish “clear culpability for global warming.” The reporting says: “Millions of individuals contribute with their use of fossil fuels, while national governments have done little despite knowing the risks.” Uhlmann states: “Exxon should have been far more forthright about the risks associated with climate change, but all of us are culpable for our collective failure to change.”
Then there are the opponents. WSJ points out: “Both sides see this as a pivotal moment in a growing campaign by environmentalists to deploy a legal strategy used against tobacco companies in the 1990s by arguing that oil companies have long hidden what they know about climate change.”
Late last month, five Republican Senators sent a letter to Lynch demanding that: “the DOJ immediately cease its ongoing use of law enforcement to stifle private debate on one of the most controversial issues of our time – climate change.”
William Perry Pendley, whose group, the Mountain States Legal Foundation, is named in Walker’s subpoena, told me the effort by environmental groups is: “an abuse of power that we haven’t seen in this country since Woodrow Wilson.” His foundation, according to the Washington Times, has “long acknowledged that Exxon is one of its many funders.” Pendley says: “accepting funding from Exxon and disagreeing with Greenpeace on the causes and extent of climate change are not crimes. What we are accused of saying is: ‘Maybe there isn’t global warming, maybe it’s not caused by man, and maybe your solution won’t work. It will be too expensive and drive us into poverty.’”
Ronald Bailey, science correspondent for the Reason Foundation – also named in Walker’s subpoena – said, according to the Washington Times: “These subpoenas are a huge step in using courts to silence people who hold views that differ from those of powerful government officials.”
CEI, the organization singled out for Walker’s separate subpoena, issued the following statement from president Ken Lassman: “All Americans have the right to support causes they believe in and the CEI subpoena is an abuse of the legal system and an effort to intimidate and silence individuals who disagree with certain attorneys general on the climate debate. Disagreeing with a government official is not a crime; abusing government power to take away Americans’ rights is.”
I know this to be true as my organization, though not featured on Walker’s list, is still a victim. We had some essential funding in place that would have allowed us to continue for months without extreme financial stress. However the DC policy shop that was to provide the support for our efforts, pulled it as a result of the AG’s campaign. I was told that the funding was approved, but that when I wrote my April 25 column on the film Climate Hustle – which questions the science behind the politically correct narrative of manmade catastrophic climate change – the board got cold feet because they, too, are one of the organizations on the list. At first, I wanted to quit, as without the funding I couldn’t continue. But then, I got mad. I realized that if I stopped doing what I do, these AGs would win – which is their goal. Indirectly, they attempted to silence me. I am grateful for individuals and companies who believe in my work and who have stepped up to fill the funding gap - at least for a few months.
Those of us who’ve been attacked are not the only ones who saw the flaw of the AG’s crusade. Exxon and CEI have filed lawsuits against the accusers. Exxon claimed that the subpoenas “violated constitutional amendments on free speech, unreasonable search and seizure and equal protection.” As a result, last week, Walker withdrew his subpoenas and Healey, reports the Daily Caller, has “agreed to an abeyance of the subpoena, meaning her office won’t enforce the subpoena until all legal appeals are exhausted, which may take a couple of years.”
In a big victory for free speech, The Hill states: “The withdrawal closes a major chapter in the drive by liberals and environmentalists to punish Exxon over allegations that it knew decades ago that fossil fuels were causing climate change but denied it publically.”
In response to the “retreat,” Representative Lamar Smith (R-TX), Chairman of the House Committee on Science and Technology said: it “confirms what my committee has known all along – these legal actions were conceived and driven by environmental groups with an extreme political agenda and no actual regard for the law.” His statement added: “Companies, nonprofit organizations and scientists deserve the ability to pursue research free from intimidation and threat of prosecution.”
The Heartland Institute, for which I serve as an “expert” on energy issues, is also on the “list.” Its president, Joe Bast, told me: “because there is a lively debate over the causes and consequences of climate change, this litigation has First Amendment implications.” He added: “It is not the possibility of harm to the public that led the AGs and DOJ to decide to enter into a wickedly complicated scientific debate, but the possibility of harm to the current administration in the White House. Their objective is to silence opposition by ExxonMobil and CEI (and other nonprofit organizations similar to CEI) to this administration’s draconian energy policies.”
Where these attacks on free speech go next remains to be seen. But as Texas AG Ken Paxton said in response to Walker’s withdrawal: “In America, we have the freedom to disagree, and we do not legally prosecute people just because their opinion is different from ours.”
May free speech reign and scientific inquiry prevail. True science welcomes a challenge because it can stand up to it – while political correctness must silence challenge.
Commentary by Marita Noon
“California’s largest utility and environmental groups announced a deal Tuesday [June 21] to shutter the last nuclear power plant in the state.” This statement from the Associated Press reporting about the announced closure of the Diablo Canyon nuclear power plant should startle you. The news about shutting down California’s last operating nuclear power plant, especially after Pacific Gas & Electric Co. (PG&E) had sought a 20-year extension of the operating licenses for the two reactors, is disappointing – not startling. What should pique your ire is that the “negotiated proposal,” as the Wall Street Journal (WSJ) called it, is between the utility company and environmental groups – with no mention of the regulators elected to insure that consumers have efficient, effective and economical electricity.
Who put the environmental groups in charge? Not the California voters. But unelected environmental groups – and their bureaucratic friends in various government agencies – have been dictating energy policy for the most of the past decade. Regarding the “negotiated proposal,” WSJ points out: “The agreement wades deeply into intricate energy procurement, environmental and rate-setting matters that are normally the exclusive jurisdiction of state agencies.”
California has a goal of generating half of its electricity from renewable sources by 2030 and environmental groups are calling for the state officials to replace Diablo’s generating capacity with “renewable power sources.” Realize that this one nuclear power plant provides twice as much electricity as all of California’s solar panels combined.
Bloomberg Intelligence analysts’ research concluded that PG&E “would need 10,500 megawatts of new solar installations to replace all of Diablo Canyon’s output” and that, without including potential costs of new transmission lines or back-up resources for solar, will cost $15 billion – with totals, including decommissioning, estimated at $20 billion.
The Bloomberg report states: “PG&E will ask that customers make up any shortfall.”
Actual costs, Bloomberg says: “could be lower because the company expects to compensate for lower demand and replace only part of the production.” Why will there be lower demand? The WSJ explains: “the plan calls for new power sources to furnish only a portion of the electricity that Diablo Canyon generates, assuming that greater energy efficiency in the future will also curb some power demand.”
All of this is announced while California is experiencing, and expecting more, blackouts due to “a record demand for energy” and because “there just aren’t enough gas pipelines for what’s needed,” according to CNN Money. “Southern California,” reports WSJ, “is vulnerable to energy disruptions because it relies on a complex web of electric transmission lines, gas pipelines and gas storage facilities – all running like clockwork – to get enough electricity. If any piece is disabled, it can mean electricity shortages. Gas is the state’s chief fuel for power generation, not coal. But the pipelines can only bring in about 3 billion cubic feet of working gas a day into Southern California, below the daily demand, which gets as high as 5.7 billion cubic feet.”
California’s Independent System Operator, which runs the state’s power grid, therefore, has warned of “significant risk” that there may not be enough natural gas which could result in “outages for as many as 14 summer days.” CNN Money reports: “Natural gas has played a bigger role for California as the state has tried to phase out coal and nuclear power” – environmental groups oppose the use of all of these three power sources.
It is expected that Diablo Canyon’s generating capacity will, in part, be replaced with more natural gas – which is good news for fracking. Eric Schmitt, vice president of operations for the California Independent System Operator, said: “California needs more flexibility in how it generates power so it can balance fluctuating output from wind and solar projects. Gas plants can be turned off and on quickly.”
As coal-fueled electricity has been outlawed in California, and environmental groups have pushed to close nuclear power plants, and routinely block any new proposed natural gas pipelines, black outs will become frequent. California’s energy demand doesn’t match solar power’s production.
This dilemma makes “energy efficiency” a key component of the environmental groups’ decrees – which parallels the European Union’s (EU) policies that were a part of Britain’s “exit” decision (known as “Brexit”).
When the EU’s energy efficiency standards for small appliances were first proposed, then German EU energy commissioner, Gunther Oettinger, according to the Telegraph, said: “All EU countries agree energy efficiency is the most effective method to reduce energy consumption and dependence on imports and to improve the climate. Therefore there needs to be mandatory consumption limits for small electrical appliances.” In 2014, the EU, in the name of energy efficiency, sparked public outcry in Britain when it banned powerful vacuum cleaners with motors above 1600 watts. It then proposed to “ban high powered kettles and toasters” as part of the “Eco-design Directive” aimed at reducing the energy consumption of products.
The EU’s Eco-design Directive’s specific requirements are to be published as “Implementing Measures” – which, according to Conformance.co.uk, are made “as European Law Commission Regulations.” It explains that this process allows the directives to “enter into force in all the member states without requiring a transcription process in their National Law. Thus they can be issued much more quickly than the usual Directive Process.”
When the EU’s high-powered toaster/tea-kettle ban was announced, it became “a lightning rod for public anger at perceived meddling by Brussels” – which was seen as “intruding too much into citizens’ daily lives.” When the ban was announced, retailers reported a spike, as high as 95 percent, in toaster and electric tea-kettle sales. The European overreach became such ammunition in Britain’s Brexit referendum, that Brussels stalled the ban until after the election and engaged in a now-failed public relations exercise with “green campaigners” to speak out in favor of the toaster and tea-kettle regulations that were believed to have “considerable energy saving potential.”
The Brits didn’t buy it. It is reported that top of the list for “leave” voters were “EU Rules and Regulations.” Matthew Elliot, chief executive of the Vote Leave campaign said: “If we vote remain we will be powerless to prevent an avalanche of EU regulations that Brussels is delaying until after the referendum.”
Brussels’ toaster and tea-kettle ban, which were perceived as an assault on the British staples, has been called “bonkers” and “too barmy to be true.” Specifically addressing the ban, Elliot said: “The EU now interferes with so many aspects of our lives, from our breakfast to our borders.” David Coburn, a UK Independence party MEP from Scotland, who recently bought a new toaster and tea kettle grumbled: “I think I must have bought a euro-toaster, I have to put bread in it five times and it’s still pale and pasty. Perhaps it’s powered by windmills. And the kettle? Watching a kettle boil has never been so boring.”
While energy efficiency directives banning Keurig coffee makers would be more likely to draw similar ridicule from Californians, there is a lesson to be learned from the Brexit decision: too much regulation results in referendums to overturn them. It is widely believed that, with Brexit and new leadership, many of the EU’s environmental regulations, including the Paris Climate Agreement, will be adjusted or abandoned.
More and more Americans are reaching the same conclusion as our British cousins about the overreach of rules and regulations. As Coburn concluded: “What we want is to let the free market reign, not this diktat by bureaucrat.”
Commentary by Marita Noon
Proponents of green energy like to point out how the costs have come down – and they have. Though renewable energy, such as wind and solar, are not expected to equal fossil fuel costs anytime in the near future and recent growth has been propped up by mandates and tax incentives. But there are other, more subtle aspects of the Obama Administration’s efforts that have had negative impacts that are not felt for years after the policies are implemented. By then, it will be too late to do much about them.
We know that the push toward renewables has hurt the coal industry. As Hillary Clinton gleefully exclaimed: “we’re going to put a whole lot of coal miners and coal companies out of business.” We are already seeing this happen all over the country. Dozens of coal mining companies have gone bankrupt since President Obama took office and those that are still functioning are doing so with far fewer workers.
One such mine is in the Four Corners region of New Mexico – the San Juan Mine – which is one of the largest underground coal mines in the world. It has been a “top employer” in the region. Westmoreland Coal Company purchased the mine from BHP Billiton, with the sale completed on February 1, 2016. At the time, the mine employed more than 400 people. Shortly thereafter, 11 salaried staff lost their jobs and on June 16, another 85 workers – both salaried and hourly – were laid off. Which, according to the Albuquerque Journal, were “necessary because the San Juan Generating Station, which uses all the mine’s coal, plans to retire two of its four units as part of a negotiated agreement among plant operator Public Service Company of New Mexico [PNM], the Environmental Protection Agency, the Navajo Nation, and the state of New Mexico.”
The “agreement” to shut down half the power plant – thereby cutting the immediate need for coal – is the result of the EPA’s 2011 Regional Haze Program that, according to a report from the U.S. Chamber of Commerce, “seeks to remedy visibility impairment at federal National Parks and Wilderness Areas.” This, the report states, “is an aesthetic regulation, and not a public health standard” – though the results will be undetectable to the human eye. For this, nearly a quarter of the mine’s workforce has been terminated.
The Albuquerque Journal cites Westmoreland’s executive vice president, Joe Micheletti, as being unwilling to “comment on whether he expected to see more layoffs in the coming months.” It also states that PNM has promised “not to lay off any employees at the stations as a result of the unit closures” – though through attrition employment is down 20 percent from two years ago.
The reality is, anti-fossil fuel groups like the Sierra Club, wanted the entire plant shut down. In 2018, PNM will have to plead their case before the Public Regulatory Commission to keep the San Juan Generating Station functioning past 2022. PNM is currently considering a plan for meeting its needs for electricity without it. If the plant closes, all jobs, approximately 800, at both the mine and the generating station will be gone – greatly impacting the local economy.
Obama’s far-reaching green energy policies are insidious – hurting consumers in ways we don’t even think of. On June 10, Stephen Yurek, president and CEO of the Air-Conditioning, Heating and Refrigeration Institute (AHRI), gave testimony before the U.S. House of Representatives Subcommittee on Energy and Power. He addressed the nearly 40-year old Energy Policy and Conservation Act (EPCA) – which, he said, “has not been updated to reflect new technologies and economic realities” and “has been misapplied by the Department of Energy [DOE].” The Obama Administration has run amuck in its application of EPCA – issuing regulation after regulation. Yurek backs this up by pointing out the difference in the Clinton and Obama administrations: “While the Clinton Administration’s DOE issued just six major efficiency rules during his eight years in office, the Obama Administration’s DOE issued eight major efficiency rules in 2014 alone – a record according to the Office of Information and Regulatory Affairs. And DOE’s Unified Agenda indicate that between 2015 and the end of the administration, 11 additional major efficiency rules can be expected to be issued.”
These rules, Yurek explained, “use unrealistic assumptions” to create “higher efficiency levels than are economically justified for consumers.” He encourages Congress to force the DOE to “consider the real-world cumulative impact of product efficiency standards among agencies, businesses, and consumers” and suggests that “as DOE promulgates rules according to an accelerated regulatory schedule, necessary constructive dialogue falls by the wayside.”
Yurek summarizes: “An endless cycle of efficiency rulemakings continues to have an adverse impact on our global competitiveness and the American jobs we create.” This practice hurts consumers as “When new products and equipment cost more than consumers can afford, they find alternatives, some of which compromise their comfort and safety, while saving less energy or none at all or in some cases using more energy.”
In the name of energy efficiency, on December 6, 2013, Obama issued a memorandum ordering federal buildings to triple renewable energy use. He declared: “Today I am establishing new goals for renewable energy as well as new energy-management practices.” Now, nearly three years later, we get a taste of what his federal building initiative is costing taxpayers.
On June 16, 2016, the Federal Housing Finance Agency’s (FHFA) Office of Inspector General released a report - precipitated by an anonymous hotline complaint - on the 53 percent cost escalation at Fannie Mae’s extravagant new downtown DC building. As a result of the financial crisis, mortgage giant Fannie Mae received a bailout of $116.1 billion in taxpayer funds and FHFA now serves as the conservator over Fannie Mae. The Inspector General found that no one in the FHFA Division of Conservatorship “was aware of the 53% increase in the estimated build-out costs for Fannie Mae’s new office space.”
“Because Fannie Mae is an entity in the conservatorship of the U.S. government,” the report states: “FHFA, as conservator, will need to assess the anticipated efficiencies of specific proposed features against estimated costs of those features and determine whether the efficiencies warrant the costs.” The watchdog report found the ballooning costs created “significant financial and reputational risks.”
Addressing the excessive cost, Rep. Scott Garrett (R-NJ), chairman of the House subcommittee with oversight over Fannie Mae, said: “Like a child with a credit card in a toy store, the bureaucrats at Fannie Mae just couldn’t help themselves. After being forced to bail out the GSE’s [Government-Sponsored Enterprises] to the tune of nearly $200 billion [which includes Freddie Mac], American taxpayers now get the news that they are underwriting lavish spending at Fannie Mae’s new downtown Washington, D.C. headquarters. So while Americans around the country are living paycheck to paycheck, Washington insiders are blowing through budgets by designing glass enclosed bridges and rooftop decks.”
In response to the call for “immediate, sustained comprehensive oversight from FHFA,” Melvin L. Watt, FHFA director, defended himself. In the face of the Inspector General’s caustic criticism, he claimed that many of the upfront investments would save money over time. Watt’s memorandum only offers two such examples and one is more efficient lighting. He claims: “upfitting space with more expensive LED lighting instead of less expensive fluorescent lighting would result in significantly cheaper operating costs.” The other example he provided was window shades.
These are just three recent examples of Obama Administration policies that were put in place years before the resulting job losses and costs to consumers and taxpayers are felt. Gratefully, for now, the Supreme Court put a stay on one of his most intrusive and expensive programs – the Clean Power Plan. But there are plenty of little rulemakings, programs, and memorandums that will still be impacting jobs and increasing costs long after he is out of office.