Last week at Blue Ridge Forum, regular author Richard Falknor stepped aside for a two-part series by writer Peter Samuel, a specialist in writing about toll roads. In part one, Samuel advocated for a reduction in tolls and license fees, which was good, but in return we would have to endure this:
Fairness and efficiency will be best served by moving toward transport systems that self-finance with user fees: more precisely, fees-for-use roads should finance themselves with fees based on the cost of providing road service, road use fees, or tolls based on the distance traveled, the scarcity of road space, and the costs the vehicles impose.
Unfortunately, this raises the prospect of abuse by the state. Imagine portions of U.S. 50 and Maryland Route 90 becoming toll roads from the Bay Bridge to Ocean City, such as the bypass around Salisbury and any future routes around Easton and Cambridge. Sure, you could avoid the tolls and go through town but the traffic would become the same issue it was before the current U.S. 50 portion of the Salisbury bypass opened a decade or so ago. This would also be discouraging for truck traffic.
Maybe the best example of the problem with this philosophy is the Inter-County Connector between Montgomery and Prince George’s counties. The ICC, as it’s called, was in the pipeline for decades before finally becoming a reality under Bob Ehrlich, with Martin O’Malley finishing it last year. But the ICC isn’t popular with drivers because of its lower speed limit and heavy enforcement of traffic laws, so it hasn’t met revenue projections.
It’s likely Samuel is thinking more of the urban areas with their existing HOT lanes and other means to divide express traffic heading to the suburbs and local traffic which may hop on the highway for a couple exits. But Samuel’s second part discusses the fate of the Red Line in Baltimore and Purple Line in the Washington suburbs.
In that case he is correctly diagnosing the problem with mass transit solutions such as these:
Project advocates list all the jobs created during construction, but this is only a measure of cost, and avoids the real question: what value are they creating?
In any enterprise there is positive net value if the users are paying sufficient user fees (fares) to both cover operating costs and provide a competitive return on capital (ROI).
To the extent fares won’t cover costs plus return on capital, we have a clear measure that the value to users falls short of costs, making the project a net loss to any operator.
Rail transit in Maryland presently collects in the ‘farebox’ less than 30 cents on the dollar spent on operating the system and, of course, makes no return on capital invested. Light rail is the very worst with lower farebox recovery (currently under 20 cents per dollar.)
Some of those results could be improved, but almost no rail system in America come close to the black (100 on the dollar + ROI).
If you read further, Samuel likes the concept of the Red Line but is concerned about the construction cost and likelihood of overruns. On the other hand, his thought on the Purple Line is that it should change its form and become a bus-only route. The construction would be far cheaper and the schedule could be more easily adjusted to suit the needs of consumers. That’s an approach which makes more sense, although one has to ask why automotive traffic couldn’t utilize the route then.
At the end of part two, Peter also adds a map of proposed changes, including a westward extension of the ICC which crosses over into Virginia and provides another Potomac crossing west of Washington, as well as an eastbound addition which connects to U.S. 50 near Bowie. Also noted is a “new span Bay Bridge.”
What I would propose, though, is a truly new span Bay Bridge that’s several dozen miles south and connects Dorchester County with Calvert County. There’s no question the environmentalists (and some of the locals) would scream bloody murder, but they would for any attempt at progress anyway.
I think this bridge would encourage more tourism from the Washington area and, if combined with an extension of I-97 to its original destination near Richmond, could open up the Eastern Shore as a new tourist destination as travelers seek an alternate route around the traffic presented in Baltimore and Washington. Adding a bypass around Easton and cutoff between U.S. 50 and U.S. 301 through Queen Anne’s County (paralleling or upgrading the existing Maryland Route 213) could make this route even more desirable. Samuel could even get the cutoff to be a toll route.
There is a lot which can be done in lieu of wasting money on the Red Line and Purple Line because both are destined to be money pits; on the other hand, investing in transportation alternatives which maximize options and freedom makes more sense. As Samuel writes:
Better mobility provides greater employment opportunities, better shopping choices, more specialized health and medical services, more social and family interaction, better education, sporting. and recreational opportunities.
Our travel is not frivolous. People don’t drive the Capital Beltway for the scenery. We travel because the trips provide value.
There would be value in having a second Bay Bridge as well as the other roads for which I advocated. People and goods could move more freely up and down the East Coast, avoiding the bottlenecks presented in northern Virginia and around Baltimore, while the Lower Shore would have more direct access to a route across Chesapeake Bay, allowing for easier movement west and south.
It’s time to think on a larger scale while accepting the reality that people want the freedom to be able to jump in their cars at a moment’s notice and go wherever they wish. Mass transit simply creates dependency on the provider and allows them some level of control of movement. That may be acceptable to some, but the rest of us want to get where we want to go as quickly as possible – on our terms – and this is where government can be of service to the public.
I alluded to this the other day when Governor Hogan announced he was dropping the proposed PMT regulations, and almost as if on cue there was negative reaction from the Chesapeake Bay Foundation and the (so-called) Maryland Clean Agriculture Coalition – so-called because it has nary an agricultural group in it.
Allison Prost, the executive director of the CBF, called it “a sad day” for Maryland:
This is a sad day in the long fight to make Maryland waters clean enough for swimming and fishing. Governor Hogan’s decision has hurt the rivers and streams on Maryland’s Eastern Shore where 228,000 tons of excess manure will continue to be applied to farm fields each year, and to wash off into nearby creeks and river. The new governor rolled back 10 years of progress when he withdrew the Phosphorus Management Tool, a common sense, science-based solution to the manure crisis.
Agriculture is the largest source of pollution to the Chesapeake Bay, and is also the cheapest to reduce by far. Many farmers deserve credit for their efforts to stem pollution from their barn yards and fields. But just as those who live in our cities and suburbs are doing more to clean the Bay, so must farmers.
Businesses with technologies to help reduce phosphorus pollution from poultry manure are ready to come to Maryland and help ease the burden of excess manure. But these technologies will only have a significant impact if farmers are required to not apply excessive amounts of phosphorus to their crops. Regulations create demand for problem-solving technologies that otherwise would languish.
Additionally, by withdrawing regulations that would have reduced pollution from coal-fired power plants, Governor Hogan’s decision also has put corporate interests above the people of Greater Baltimore. Nitrogen oxides are linked to ozone which can be harmful to children and sensitive adults. As a greenhouse gas, nitrogen oxides are 300 times more powerful than carbon dioxide. Also, nitrogen from coal plants and vehicles adds millions of pounds of harmful pollution to the Bay each year. The power industry used the same hardship argument in 2006 when the legislature approved the Maryland Healthy Air Act. In the years afterwards, electricity prices dropped, and the industry prospered.
The Chesapeake Bay Foundation welcomes the opportunity to work with the Administration to ensure farmers have the resources they need to implement the PMT, and all residents see cleaner water. But we can’t compromise on science, or accept further delays on cleaning up Maryland’s rivers, streams, and the Chesapeake Bay. (Emphasis mine.)
I pointed out that one sentence in the CBF statement because it’s telling about their philosophy, If the market wouldn’t otherwise support these technologies, then they must not be that effective. Put another way: we know broccoli is relatively healthy for us, but not everyone likes broccoli. (Actually, I do when you cook it with a little butter like my mom used to.) It’s a market that languishes in comparison to, say, McDonalds. The CBF would have us compelled to eat broccoli every night because it’s good for us, not because we would want to.
It’s the same with the PMT as the process of spreading chicken manure on the fields supplements the soil. Otherwise, farmers would be forced to resort to artificial fertilizers which actually worsen the problem.
Dawn Stoltzfus, speaking for the Maryland Clean Agriculture Coalition, echoed the CBF sentiments:
We’re deeply disappointed about reports that Governor Hogan has blocked one of the biggest tools to clean up the Chesapeake Bay and local waters in more than 30 years.
Governor Hogan had the opportunity to move forward a long-delayed tool to reduce pollution from manure. Instead, he stopped the regulation to implement the Phosphorus Management Tool, adding another chapter to the history of ping-pong politics and capitulation to the agricultural industry.
Governor Hogan has sent a very worrisome signal indeed. Just hours after being sworn in as Maryland’s governor, reports say he has turned his back on clean water and sound science. He has ignored Maryland’s leading agriculture scientists, who have been working on updating this tool for more than ten years and who have repeatedly stated how its adoption is needed, now.
Phosphorus pollution from manure is getting worse, not better in the Chesapeake Bay and Maryland rivers. The Governor’s action is a threat to the health of Maryland families and to our economy that depends on clean water.
Now you would expect to hear these types of sentiments from Radical Green. But I wasn’t expecting this sort of reaction from Delmarva Poultry Industry:
Delmarva Poultry Industry, Inc. respects Maryland Governor Larry Hogan’s decision not to move forward, immediately, with the phosphorus management tool regulation. During the campaign, he pledged that it would not, in its present form, become state policy. His pledge to study the issue further to make sure it is scientifically and financially valid is a wise one that we endorse.
We have said all along that this risk management tool, even according to its developers, could not estimate how much less phosphorus might reach the Chesapeake Bay. It makes no sense to create costly regulations on all farmers throughout Maryland, not just Eastern Shore farmers who use chicken manure, without knowing what the environmental benefits might be.
We look forward to working with Governor Hogan and his team and members of the General Assembly to develop a regulation that will provide improved environmental stewardship by the agricultural community.
Why do we need a regulation? The very fact they are conceding a regulation is needed loses half the battle. I have heard some rumblings about the impotency of DPI, and this statement seems to confirm that sentiment. You would think DPI would be thrilled to have that weight removed from its chest.
Until someone can figure out a better use for chicken waste than utilizing it as the natural fertilizer – a purpose it has served for hundreds of years on Delmarva – the farmers will continue to take the blame. I can understand if a sludge pile is exposed to the elements that runoff water will carry the phosphorus directly to the nearest body of water, but if chicken waste is spread into the soil I can’t comprehend how it travels distances to the waterway. After all, the minimum distance between well and septic leach field is usually 100 to 150 feet, which is supposed to give a large enough buffer of soil to protect the water supply on a semi-permanent basis, yet we’re expected to believe manure spread across a 240 acre field is a threat to a body of water or a stream hundreds of feet away?
Honestly, I think the problem is that those who travel from the urban areas to the beach in the warm months don’t like that occasional reminder that they are out in the country thanks to the foul (or is that fowl) smell. But that’s the smell of the Eastern Shore, at least in one governor’s mind, and to many farmers it’s the smell of a better crop and more money. It’s hard enough coaxing a good harvest from the Eastern Shore in the best of times, so a little natural help is always appreciated.
Think of it as truly organic farming.
Facing a 4 p.m. deadline today, in the first few hours after Larry Hogan was sworn in as Maryland’s 62nd governor he found a few minutes to inform the Maryland Register that the proposed Phosphorus Management Tool regulations should be pulled from Friday’s edition. However, Phil Davis of the Daily Times notes there is some question about the legality of Hogan’s move, with the lack of precedent cited as a concern. I would rate the chances of a legal challenge from one or more of the state’s environmental groups as good, although Timothy Wheeler of the B’More Green blog noted yesterday:
According to an opinion issued last month by then-Attorney General Douglas Gansler, the rules can be withdrawn or simply held up by preventing them from being published in the register, which is printed and posted online every two weeks.
Naturally that doesn’t mean new Attorney General Brian Frosh wouldn’t side with environmentalists, but it sounds like Hogan has the legal leg to stand on.
So the attention now will turn to the General Assembly, where it’s expected legislation with the same goal will be introduced in the next few days. Because of the way regulatory language is written for the Maryland Register, it’s relatively easy to translate to bill form. And as the Eastern Shore delegation only makes up 9 House seats and 3 Senate seats, their objections mean little when suburban Montgomery County has 24 Delegate and 8 Senate seats by itself. (Out of 124 Democrats in the General Assembly, that county makes up over one-fourth.) Few, if any, of those General Assembly members have been on a working farm – for the most part, their impression of the Eastern Shore seems to be that of knowing where all the speed traps are on the way to the beach.
But just taking the delegations from Montgomery and Prince George’s counties and Baltimore City – areas which range mostly from urban to suburban, with little in the way of agriculture – gives that side a bloc of 63 House members and 22 Senators, meaning that prospective PMT legislation has a very good chance of passing. Add in the fact that the relevant committee chairs and vice-chairs mainly represent the three areas in question, with the fourth from a similarly suburban section of Baltimore County, and the skids are probably being greased right now. The Democrats aren’t going to let Larry Hogan get away with an opening victory that easily; it’s in that spirit of bipartisanship that they’ll demand these rules be enacted, you know.
Since word came down on this Hogan action late in the day, the environmentalists didn’t get a chance to formally react but some took to Twitter.
Gov. Hogan's first act? Withdrawing state rules to protect the air we breathe and the water we depend on. http://t.co/PusqbbqGoa
— MD Clean Agriculture (@CleanerMDfarms) January 22, 2015
I look at it as withdrawing overly punitive rules when we haven’t even figured out yet whether the last set had an impact. When the entity that grades the Bay also solicits donations based on its assessment, we’re not exactly dealing with an honest broker.
So Larry Hogan’s initial major action as governor was a step in the right direction. Let’s hope it’s the beginning of a moratorium on these environmental regulations so we can evaluate the effectiveness of what we already have and see if dealing with the sediment that periodically leaches out of the pond behind the Conowingo Dam will make a difference.
In the quest to get America back to making things, it was good news to find that manufacturers added 17,000 jobs in December. That brought the 2014 growth in that sector to 186,000, continuing the steady growth in that sector since the job market hit bottom there in 2009-10. When you consider that 2012 predictions saw the manufacturing sector losing jobs through this decade, having a very positive number nearly halfway through is a good sign.
Naturally Barack Obama tried to take some credit for this during a speech at a Ford plant near Detroit last week. As I noted in a piece I wrote for the Patriot Post, it’s ironic that the plant was idled due to slow sales of hybrids and small cars built there, but the auto industry has played a part in the resurgence of manufacturing jobs in America. This is particularly true in the construction and expansion of “transplant” auto plants in the South by a number of foreign automakers.
But there has been criticism of Obama from his political peers. As a carryover from my American Certified days I often quote Scott Paul, the president of the Alliance for American Manufacturing, because his organization is strongly influenced by Big Labor and presumably supported Obama in both his elections. Yet Paul is none too happy with Obama’s progress:
Manufacturing job growth slowed to 17,000 in December, which portends some of the challenges an overly strong dollar, weak global demand, and high goods trade deficits may bring in 2015. While President Obama is touting factory job gains and our Congressional leaders are looking for ways to rebuild the middle class, what’s missing for manufacturing is good policy.
Congress and the president need to hold China and Japan accountable for currency manipulation and mercantilism, and invest in our infrastructure. New innovation institutes are a good thing, but their presence alone won’t bring manufacturing back. And as the president enters the final half of his second term, he’s falling way behind his goal to create one million new manufacturing jobs.
The innovation institutes Paul refers to are public-private partnerships being created around the country in various fields, in the most recent case advanced composites. But Obama lags behind on his promised 1 million new manufacturing jobs for this term as it nears the halfway mark as he’s created just 283,000. It’s great if you’re one of those newly employed workers, but his policies are leaving a lot of chips on the table. In fact, National Association of Manufacturers economist Chad Moutray frets that:
…manufacturers still face a number of challenges, ranging from slowing global growth to a still-cautious consumer to the prospect of increased interest rates. With the start of the 114th Congress, manufacturers are optimistic that there will be positive developments on various critical pro-growth measures, including comprehensive tax reform, trade promotion authority and a long-term reauthorization of the Export-Import Bank, and focusing on important infrastructure priorities like building the Keystone XL pipeline and addressing the solvency of the Highway Trust Fund.
While manufacturers would like to see these measures, attaining some of them may be tough sledding in a conservative Congress. There are a number of representatives and conservative groups who don’t want to give the President fast track trade authority, wish to see the Export-Import Bank mothballed out of existence, and will not consider increasing the federal gasoline tax – an action for which Moutray uses the euphemism “addressing the solvency of the Highway Trust Fund.” These actions may benefit the large manufacturers but won’t help the bread and butter industries solely serving the domestic market like the 24-employee machining shop or the plastics plant that employs 80.
Turning to the state level, our local manufacturing (so to speak) of poultry has a big week coming up. On Wednesday morning, the final deadline to submit new regulations to the Maryland Register for the January 23 printing will pass. You may recall that the December 1, 2014 Maryland Register featured the new Phosphorus Management Tool regulations as proposed (page 1432 overall, page 18 on the PDF file.) The new regulations were not in the January 9 edition, so January 23 may be the last chance to get these published under the O’Malley administration due to the deadline being set in MOM’s waning days.
Yet I’m hearing the rumors that a legislative bill is in the works, to be introduced in the coming days by liberal Democrats from across the bridge. Doing this legislatively would perhaps buy a few months for local farmers because such a bill would probably take effect in the first of October if not for the almost certain veto from Governor Hogan. If Democrats hold together, though, they would have enough votes to override the veto in January 2016, at which time the bill would belatedly take effect. Still, it will be difficult to stop such a bill given the lack of Republicans and common-sense Democrats in the General Assembly. To sustain a Hogan veto would take 57 House members and 19 Senators, necessitating seven Democrats in the House and five in the Senate to join all the Republicans.
We haven’t received the data yet to know whether the installation of Bob Culver as County Executive was enough to break an 11-month job losing streak year-over-year here in Wicomico County, but his task would be that much tougher with these regulations put in place.
The outburst of cold weather during the first few days of January was the result of a meteorological anomaly which happened to occur on the same days for two years in a row. The polar vortex which occurred on January 6 and 7 in 2014 struck again with full force on those same dates this year, and the cold weather proved to reinforce a point made by a surprising beneficiary.
According to the American Wind Energy Association, which advocates for wind power as an alternative source of energy, consumers saved $1 billion in the 2014 polar vortex thanks to the availability of wind power. As they note:
Wind energy does this by protecting against spikes in the price of other fuels in the Mid-Atlantic and Great Lakes states. While other power plants failed in last January’s extreme cold or faced skyrocketing prices for fuel, wind energy continued producing electricity with zero fuel cost, not only keeping the lights on but also keeping money in consumers’ pockets.
With extreme cold now gripping much of the Eastern U.S., wind energy is once again helping to keep the lights on and protecting consumers against energy price spikes by diversifying the nation’s electricity mix. This is a repeat of the value wind energy provided to consumers during the “Polar Vortex” event exactly one year ago (Wednesday.)
Further, I also learned that the amount of electrical power created by wind reached an all-time high in two regions of the country overnight Tuesday night. Yes, it was blowing hard the other day so wind turbines were at their maximum effect and production.
In the last 24 hours wind set a new output record for the MidContinent ISO (MISO) and for the Southwest Power Pool (SPP), an area that covers much of the Midwest. Wind also performed at near-record levels in the PJM market (PJM).
Overnight on January 6-7, the MISO experienced a record 11,725 MW of wind production while the SPP region added another 7,625 MW – between the two, they powered 15 million homes. AWEA also claimed “near-record” production in the PJM area, which includes our region. In some areas, wind power was a far more significant provider during the event than its overall 4 percent share of the market.
Yet while wind power has made some significant achievements, no story is complete without pointing out a couple of realities: wind energy is not as reliable as fossil fuels, and its distribution pattern in this country makes it a tenuous backup plan for some regions, such as the southeastern part of the country. Negligible wind energy production exists there because of unfavorable conditions.
The reason wind power was so useful in this instance of cold weather was that natural gas has to serve two masters when it’s cold: electricity generation which occurs all year and home heating for the winter. With the difficulty in building the infrastructure needed to move our abundant supply of natural gas to markets in some areas of the country, the spot price surged. AWEA’s $1 billion assertion was based on that price spike for natural gas.
Because of the fickle nature of wind power, it’s interesting to note that PJM keeps a constant eye on the output of its wind turbines and their predicted effects. As of the moment I write this, the wind turbines are producing 4,424 megawatts, which is slightly below the 4,585 megawatts forecast. To meet needs other sources will have to come into play if they’re not already accounted for.
The economics of wind are fickle as well. While the on-again, off-again nature of the Wind Production Tax Credit of 2.3 cents per kilowatt-hour produced has affected the building of turbines – opponents consider them a handout both to the industry and Wall Street – state government mandates for clean energy prop up the demand. Without the prescribed mandates from states like Maryland, which has a current goal of 10% of its energy source generation from wind and other renewables, it’s likely the wind energy industry would be non-existent in America.
But its legitimacy was bolstered from a surprising source this week. Each year, the American Petroleum Institute puts out a State of American Energy Report, and for the first time it addressed a number of alternative energy sources including wind power. As Jack Gerard of API puts it:
Rather than focus solely on the oil and natural gas industry, API this year is pleased to partner with organizations representing various energy sectors to highlight the contributions of each toward America’s current and future economic wellbeing, and collectively stress the importance of adopting a lasting “all of the above” energy strategy.
In their section of the API report, AWEA notes that potentially 35 percent of America’s electricity could be created from wind power by 2050. Of course, there are questions about the health risks of living near a wind turbine which will merit further study, but it is relatively convenient that most of the best places for wind production are in sparsely-populated areas.
If you subscribe to the “all of the above” energy strategy, you may be setting a place at the table for wind energy. Certainly it won’t serve all of our needs as well as the versatile roster of fossil fuels has over the years, and it may have to navigate a brave new world without the tax credits that have built the industry up over the last two decades – in fact, I think it should. Logic would dictate that, since the fuel is free of charge, the only cost should be the infrastructure, transmission, and occasional maintenance and monitoring, so who needs a tax break?
We won’t always have a polar vortex, but if the wind energy industry is where its backers say it is, we won’t need one to make wind a good choice. Let’s put it on a level playing field and see how it fares.
Since both have been mentioned in the news as potential Presidential candidates, governors Martin O’Malley of Maryland and Andrew Cuomo of New York have been natural rivals for the attention of the various interest groups that make up the constituency of the Democratic Party. It seems that they are always trying to one-up the other in enacting off-the-charts liberal legislation – when one allowed gay marriage, passed draconian gun laws, or pandered to illegal immigrants, the other tried to follow in rapid succession.
Martin O’Malley and Andrew Cuomo also both cast their lot with the radical environmentalists who claimed (falsely) that hydraulic fracturing for energy extraction would ruin their state’s environment. Yet while O’Malley relented ever-so-slightly in recent weeks, allowing the practice but with regulations one energy expert called “onerous and time-consuming,” Cuomo stopped the practice cold in his state by decreeing in an announcement last week that fracking would be banned, timed nicely after his re-election. Observers of both states are scratching their heads about these decisions, both in the media and in the energy industry. In New York, local media bemoaned the lost opportunity while landowners in the affected area called Cuomo’s ban a “worst-case scenario.”
Yet in the middle of all this sits the commonwealth of Pennsylvania, a state which has embraced the economic benefits of the practice to such a degree that Tom Wolf, the incoming Democratic governor of the state won’t ban it. (However, he may stiffen regulations and increase taxes on energy producers, which will be something to watch in the coming months.)
Granted, their good fortune of geography means Pennsylvania has the largest share of the Marcellus Shale which yielded all that natural gas, while Maryland only has a small slice and New York has a small but significant portion. For their part, Ohio and West Virginia also have sizable portions of the formation, while Virginia’s share is similar to Maryland’s. Ohio has been nearly as aggressive as Pennsylvania in taking advantage of the shale – although recently re-elected Republican Governor John Kasich is also trying to increase taxes on producers – while West Virginia is lagging behind their neighbors and just beginning the process of allowing extraction.
It’s a given that fracking isn’t without risk, but neither are installing large solar farms or erecting 400-foot high wind turbines. Yet the natural gas and oil provided from fracking make for a much more reliable energy source than the intermittent electricity provided by the latter pair, sources which ironically need a natural gas backup to be consistent.
As time goes on we will see just what economic effects a fracking ban will have on the affected areas of New York. But as we have seen in states which have already began the extraction, the Empire State is missing out on the potential for investment and return that having the Marcellus Shale provides for those lucky enough to live over it. Hopefully our neighbors in western Maryland will see some benefits in the next couple years as Governor-elect Hogan puts “sensible” regulations in place to benefit all concerned parties.
In the ongoing quest by Martin O’Malley and his administration to burnish his environmental credentials for a possible presidential run, the farmers of the Eastern Shore have been placed squarely in his crosshairs. I suppose this is MOM’s way to catch the fourteen counties not yet affected by his “rain tax,” although some local municipalities are joining in on that fun without waiting on the mandate.
At the beginning of the month, the administration began once again to try and enact the Phosphorus Management Tool, or PMT. The timing was important because the mandated public comment period comes to a close December 31, three weeks before MOM rides off into the proverbial sunset. Appeals for a public hearing have thus far fallen on deaf ears, so the comment period is really the only opportunity to make our voice heard. (Comments should be addressed to Maryland’s Secretary of Agriculture, Earl Hance. His e-mail address is firstname.lastname@example.org.)
Needless to say, the environmentalists are thrilled about this prospect, including a “Maryland Clean Agriculture Coalition” which doesn’t have a single farming-related entity within it. They note the 48,000 pounds (24 tons) of phosphorus the PMT is supposed to alleviate. Remember that number because it comes up later.
The Clean Chesapeake Coalition (CCC) chimed in with its appeal, which states in part:
In furtherance of this objective and in the interests of its individual county members, the Coalition opposes the re-proposed regulations and requests MDA to withdraw the regulations for the reasons explained below. In sum, the implementation costs to farmers, the costs to taxpayers, the adverse impacts on local and regional economies, and the overall added strain from more piled on Chesapeake Bay Total Maximum Daily Load (“TMDL”) driven regulations far outweigh the purported reduction in overall phosphorus loading to Maryland waters and other speculative environmental benefits that may result from the PMT regulations.
In reading their ten-page letter to Secretary of Agriculture Earl Hance, the points made by the CCC appear to be as follows:
- The economic effect on businesses is “grossly understate(d).” While the BEACON study was done in order to satisfy the demand for a study of these effects, its author admits it “was not meant to serve as a comprehensive economic impact study.”
- Remember that 24 tons of phosphorus these regulations address, at a cost of $61 million over six years in increased expenses from farmers and state subsidies? The flow running through the Conowingo Dam spews out 3,300 tons of phosphorus a year – it’s like sticking your finger in the hole in the dike and ignoring the water pouring over the top. Meanwhile, the pond behind the dam has another 130,000 tons just waiting to be scoured out in a significant storm event.
- Phosphorus concentration in tributaries of the Susquehanna River north of the dam is over 3.5 times greater than comparable tributaries on the Eastern Shore.
On that last point, it’s helpful to use the illustration the CCC provides:
Phosphorus is loaded into the Bay at an average annual rate of 3,300 tons (6,600,000 lbs.) from the Susquehanna River; not including what is scoured from the full reservoirs in the lower Susquehanna during storm events and on a more regular basis. Maryland’s annual average phosphorus loading to the Bay from agriculture of 985 tons (1,970,000 lbs.) is minimal when compared to the Susquehanna River.
Earlier this month, Exelon withdrew its request for renewal of its hydroelectric license at Conowingo Dam because more study of its effects on water quality downstream were desired. The utility has agreed to spend up to $3.5 million on studies of water quality downstream. It appears they’ve also become aware of the detrimental effects on the Chesapeake Bay, yet the environmentalists don’t seem to be interested nearly as much in Exelon and in the Conowingo Dam as they are the poultry industry.
A Washington Post story over the weekend noted the controversy, including remarks from Wicomico County farmer Lee Richardson, who seems to be something of a go-to guy when it comes to poultry growers. Many of the reader comments on the Post piece, though, illustrate the divide between the urban and suburban hipster whose idea of poultry is the organic chicken they buy at Whole Foods and the beleaguered grower who already has to comply with numerous state and federal guidelines without having to worry about arrangements to truck chicken droppings out of the area. The Post readers blame the industry itself, saying that its not carrying its weight in addressing the concerns about water quality – bear in mind these are the people who were just fine with enacting a nickel-per-bird “chicken tax” called the Poultry Fair Share Act which was supposed to raise $15 million a year.
In that fiscal note from the Senate bill, it’s noted that the Eastern Shore has “over 700″ poultry farmers. For ease of calculations, I’ll set the number at 750. If the cost to farmers is $22.5 million over 6 years – as estimated in the BEACON study – it works out to $30,000 per farmer over the six-year period or $5,000 a year. That’s a significant compliance cost – assuming, of course, it’s really true because government estimates are generally optimistic on revenues and short on expenditures.
So here’s hoping that our efforts can bear fruit and stop this particular piece of madness once and for all. There’s still time to comment.
Last week, Mark Green at the Energy Tomorrow blog posted a critique of the proposed fracking regulations Maryland may adopt in the waning days of the O’Malley administration. In his piece, Green stressed that Maryland needed to adopt “sensible” restrictions but feared Maryland would go too far. It was echoed in the Washington Post story by John Wagner that Green cites.
But the money quote to me comes out of the Post:
“In the short term, as a practical matter, the industry will probably choose to frack in other states than Maryland where the standards are lower,” O’Malley said. But in the longer term, he said, “it could well be that responsible operations may well choose to come here.”
Or maybe not, which seems to have been the goal of O’Malley and Radical Green all along. It’s funny that they don’t seem to have the objections to wind turbines dotting the landscape despite their own health issues. Certainly no one studied them to death.
Being a representative of the energy industry, Green naturally argues that “sensible” regulations are similar to those already in place in states which already permit the practice. As he notes:
Hydraulic fracturing guidelines developed by industry – many of them incorporated into other states’ regulatory regimes – offer a sound approach proved by actual operations.
I can already hear the howling from Radical Green about the fox guarding the hen house, and so forth. But is it truly in the interest of industry to foul its own nest?
On the other hand, the success of fracking and other domestic exploration may create an interesting situation. Even back in October, when oil had declined to $90 a barrel from a June peak of nearly $115 a barrel, analysts were speculating on the effects the drop would have on the budgets of OPEC member nations. Now that oil in closing in on $60 a barrel, the economic effects on certain nations will be even more profound, and contrarian economic observers are already warning that the oil boom is rapidly turning into a bust with a ripple effect on our economy.
Even the revenue scheme by which Maryland would collect a sales tax on gasoline depended on gas prices staying somewhere over $3 a gallon. Assuming the price of gasoline stays at about $2.70 per gallon through the first of the year, the predicted 8-cent per-gallon rate will only be 5.4 cents. (The sales tax on gasoline is slated to increase to 2% on January 1.)
In any case, there is a price point at which non-traditional oil extraction such as fracking or extraction from tar sands – the impetus for the long-stalled Keystone XL pipeline – becomes economically non-viable. I had always heard that number was $75 per barrel, which was a number we had consistently hovered above for the last half-decade. Now that we are under that number, the question of exploration in Maryland may be moot for the short-term, although the price of natural gas is only slightly below where it was this time last year so that play is still feasible.
Whether the decline in oil prices is real or a manipulation of the market by a Saudi-led OPEC which is playing chicken with prices to try and restore its bargaining position by outlasting domestic producers, it may be yet another missed opportunity for Maryland as it could have cashed in during a difficult recession and recovery if not for an administration which believed the scare tactics and not what they saw with their own eyes as neighboring Pennsylvania thrived.
It was good news in November for manufacturers, at least as expressed on the employment front – based on the November jobs report and revisions to previous reports, the sector gained 48,000 workers over that timeframe.
Naturally, manufacturing supporters were cheered by the news, with the union-backed Alliance for American Manufacturing (AAM) noting that Barack Obama is now over 1/4 of the way to his promise of a million new manufacturing jobs in his second term, while economist Chad Mowbray of the National Association of Manufacturers (NAM) trade group pointed out robust growth in new orders was beginning to translate into new employees.
However, both groups saw some clouds among the silver linings. In the case of AAM, their complaint was the “failure to stop currency manipulation by China and Japan” while NAM cited “headwinds such as rising health care costs and regulatory burdens.”
Each complaint has some validity, but for the majority of manufacturers the specter of operational costs is a key deterrent to expansion or even staying in business. While it’s not manufacturing in a traditional sense – and certainly applies on a more limited scale than federal edicts which can overturn an entire industry – one example could be how the local processing of chicken would take a blow from ill-advised state phosphorus regulations that have the potential to drive the poultry business to different areas of the country. Needless to say, such a result would be devastating to this part of the state, leaving just tourism and some limited local services to provide the employment to support our region.
And while I’m mentioning Maryland politics, I may as well make one other pronouncement here. As I followed his gubernatorial campaign for a year, I paid attention to how Ron George studied and shared his thoughts on the prospect of making things in Maryland. I hope Larry Hogan can utilize Ron’s passion and expertise in his administration. While we would love to score an auto plant or other similarly large employer in this area of the state, a more realistic goal might be to, as Ron stressed during his campaign, fill up the existing facilities and areas several towns on the Eastern Shore have already laid out for manufacturing. To use a local example, adding 100 jobs for Wicomico County residents would immediately shave 0.2% off our unemployment rate, not to mention bring up the standard of living for everyone else.
A week ago yesterday we celebrated Small Business Saturday, but the best way to support them (other than shopping there) would be to make their lives easier by calling off the government regulator’s dogs and encouraging them to grow so that sometime down the road we can be the manufacturing power we once were.
Back in November I informed you about the bag tax in Baltimore that turned into an outright ban. Well, the same folks who alerted me to the ban let me know that Baltimore Mayor Stephanie Rawlings-Blake vetoed the measure, a veto which is expected to survive a Council vote.
I do have to comment about my PR friends’ assessment of the situation, though:
It was outrageous for the Baltimore City Council to think it could play games behind the scenes and pass a bill without any public input. Thankfully, this abuse of power did not go unchecked.
I suspect if they were a cloth bag maker, though, this ban would have been just hunky-dory. Regardless, the needs of Baltimore grocers and retailers will continue to be served in part by Novolex, the plastic bag supplier who hired the PR firm. It’s likely many of those bags come from one of Novolex’s 12 plants, with the closest being in the central Pennsylvania hamlet of Milesburg. With the exception of one Novolex plant in Canada, you’ve got to like that American manufacturing.
Yet the question has to be asked: why does a plastic bag company need a PR firm aside from having to deal with these ill-advised bans and taxes?
At the risk of dating myself, I came of age before the question of “paper or plastic” ever came up, and long before the paper bag became a rare commodity. In my youth, those paper bags were filled by the pockmarked teenage bag boys who took the items from the checkout lady who keyed in the prices (stamped with ink onto the can or box) in rapid-fire fashion on her cash register. That bag boy also took the paper bags out to your car.
So I remember how skeptical people were about the plastic bags because they were so small and it took four or five to hold what it took a couple paper bags to handle – not to mention the fact the bag boy was rendered obsolete. But you rarely had to worry about a plastic bag tearing apart, and while there were lost opportunities in creating book covers and having a handy supply of bags for the burn barrel (yes, we lived in the country) we eventually found plastic bags were much more useful. Moreover, for every plastic bag which ends up polluting a stream or blowing down the street, there are probably twenty to fifty which were recycled or disposed of properly.
But my original question still remains: with the crime, poor schools, and lack of opportunity in Baltimore, why is a plastic bag ban even taking up the time of their City Council? Rest assured they will try it again in a year or two, as will the Maryland General Assembly even with a pro-business governor. Liberals never seem to take ‘no’ for an answer.
So I suspect that Edelman will keep my name on their mailing list and let me know of any other local threats to their plastic bag-making client. Cloth bags just aren’t my style anyway.
In 2007, Congress passed (and President Bush regrettably signed) a bill which was, at the time, a sweeping reform of energy policy. As part of the Energy Independence and Security Act of 2007, the EPA was supposed to regulate the Renewable Fuel Standard on an annual basis, with the eventual goal of supplying 36 billion gallons of renewable fuel by 2022 – the 2014 standard was set at 18.15 billion gallons (page 31 here.) By the way, this is the same bill that did away with incandescent light bulbs.
Unfortunately, for the second straight year the EPA is late with its update and last month they decided to take a pass altogether on 2014. Mark Green at the Energy Tomorrow blog writes on this from the petroleum industry perspective, while the ethanol industry took the decision as news that the EPA was staving off a possible reduction in the RFS.
We all know hindsight is 20/20 but it should be noted that, at the time the EISA was written, the conventional wisdom was in the “peak oil” camp, reckoning that American production was in a terminal decline. Yet we’ve seen a renaissance in the domestic energy industry over the last half-decade despite government’s best attempts at keeping the genie in the bottle. So the question really should be asked: is the Renewable Fuel Standard worth keeping in this new energy era, or should the market be allowed to function more freely?
It goes to show just how well the government predicts activity sometimes. They assumed that the technology behind creating biofuels from agricultural waste would supplant the need for corn-based ethanol in time to maintain the amount required and also figured on gasoline usage continuing to increase. Wrong on both counts; instead, we are perhaps in a better position to invest in natural gas technology for commercial trucks as some fleet owners already have – although long-haul truckers remain skeptical based on better diesel engine fuel economy, which ironically came from government fiat - than to continue down an ethanol-based path.
But the larger benefit from removing ethanol-based standards would accrue to consumers, as corn prices would decline to a more realistic value. Obviously the initial plummet in the corn futures market would lead to farmers planting more acreage for other crops such as soybeans or wheat as well as maintaining virgin prairie or placing marginal farmland, such as thousands of acres previously reserved for conservation easements, back out of service.
Poultry growers in this region would love to see a drop in the price of corn as well, as it would improve their bottom line and slowly work its way into the overall food market by decreasing the price consumers pay for chicken.
I believe it’s time for Congress to address this issue by repealing the RFS. Unfortunately, it would take a lot to prevail on many of the majority Republicans in the Senate because they come from the major corn-growing states in the Midwest and agricultural subsidies of any sort are portrayed as vital to maintain the health of rural America. Yet the corn market would only be destabilized for a short time; once the roughly 30% share of the crop used to create ethanol (over 4.6 billion bushels) is absorbed by the simple method of planting a different crop or leaving marginal land fallow, the prices will rise again.
Until the common sense of not processing a vital edible product into fuel for transport prevails, though, we will likely be stuck with this ridiculous standard. Corn is far better on the cob than in the tank, and it’s high time the EPA is stripped of this market-bending authority.
I’ve referred to this writer recently, but energy maven Marita Noon had a piece at NetRightDaily today talking about the difficulties customers in the Northeast may have this winter with electricity. It got me to thinking about the local situation, as we had a rough winter last year and indications are we’ll have more of the same this year.
While the Eastern Shore of Maryland is situated in a slightly better place for solar electricity than the Northeast, the reality is that very little of our electricity comes from renewable sources. Instead, the two closest power plants in the Delmarva Power region where we live are in Vienna, Maryland and Millsboro, Delaware. Both of those plants were once owned by Delmarva Power, but were sold in 2001 to NRG. According to NRG, the Vienna plant is a 167 MW oil-burning plant while Indian River in Millsboro uses coal to create 410 MW (and has a 16 MW oil-burning unit as well.) Another plant under construction in Dover, owned by Calpine, will add 309 MW of natural gas-fired capacity once it comes online beginning next year. Calpine also owns a number of small, locally-based “just in case” plants in the region as well – two of these oil-burning facilities are in Crisfield, Maryland and Tasley, Virginia.
The other regional power supplier, Choptank Electric Cooperative, produces about 2/5 of its supply from plants in Cecil County, Maryland and Virginia with the remaining electricity being purchased from various regional suppliers.
Infrastructure is also a concern. Several years ago there were plans to create the Mid-Atlantic Power Pathway, a transmission line which would extend from Virginia to Delaware, connecting the Calvert Cliffs nuclear plant and others in that region with the aforementioned Vienna and Indian River plants. But those plans were scrapped a few years ago due to slowing demand, which is unfortunate because our transmission otherwise comes exclusively from the north through Delaware.
In order to create good jobs, we need reliable sources of energy. Unfortunately, regulations aren’t on the side of plants like Vienna or Indian River so it may be time to think about encouraging investment in another natural gas-based power plant on Delmarva, with the requisite infrastructure to ensure supply. According to Calpine, the Dover site can expand to double its capacity but that would only partially replace the Indian River plant if it is forced offline. Realistically, though, the new power plant would probably be best sited in Delaware as it’s closer to the main body of pipeline infrastructure for natural gas.
But the new power plant is good news for the region, particularly in light of the issues Noon points out in her piece on the Northeast. With thousands of consumers using electricity to heat their homes in one way or another – either directly through baseboard heating or with a furnace and blower or pump – reliability is key. And when solar panels are buried in snow or wind turbines are frozen in place, they’re not much use.