Category: Radical Green

Shining the light on solar (and its subsidies)

In an interesting bit of happenstance, last weekend’s Maryland Republican Party Fall Convention was held at the same time and same venue as the MDV-SEIA Solar Energy: Focus 2009 Conference & Exhibition, which brought together exhibitors and those interested in solar energy around the capital region. (We kicked them downstairs for Saturday, which shows me Doubletree has its priorities correct. Capitalism before wackoism.) Since the mission of the MDV-SEIA is to “speak out on solar legislation, codes and standards issues in Richmond, Annapolis and the District, seeking better financing and broader consumer awareness,” I thought it would be a good idea to see just how much “better financing” they’re getting now. (Emphasis mine.)

Obviously there are a number of businesses which deal in solar energy, and the bulk of the exhibitors (I’m guessing there were around 20) were companies who sell or install solar panels. Probably the most known, and one who actually has a solar panel manufacturing facility in Frederick, Maryland, is BP Solar – obviously a subsidiary of British Petroleum (corporately known as BP plc.) They’re quite helpful in the “better financing” regard, with a area on their website devoted to rebates and incentives for installing solar panels (read: redistribution of tax money as subsidies.) Maryland is one of 24 states who have enacted financial incentives to install solar panel systems; surprisingly to me we were one of the most miserly in that regard – only Utah had a smaller allowance than Maryland’s $3,000 while Wyoming’s was equal. (By comparison, Delaware’s incentive as listed is fifth highest at $20,000.) BP’s information is a little out of date, though, as I’ll detail later.

While BP is pleased to share the costs borne by government of its solar program, it’s much more difficult to determine its impact on the corporate bottom line. Effective in 2008, BP placed its alternative energy subsidiaries in a grouping with overall corporate operations, and through the third quarter this area was their lone loser among BP’s various businesses. (You can find the breakout on Page 10 of this document. Notice U.S. operations take the biggest toll.) Not being an accountant by trade, I’m still led to assume that the alternative energy portion of BP’s business is the loss leader, but serves them a little bit of a shield against criticism from the extreme environmental left.

However, BP itself hasn’t been left off the subsidy train. A pamphlet I picked up at the event glowingly notes, under “Investing in Communities”:

BP Solar has been awarded a U.S. Department of Energy grant under the Solar America Initiative (SAI) to accelerate the path to grid-parity (bringing the cost of solar on par with traditional brown power). This ~$40 million effort encompasses all levels of the manufacturing and deployment steps for residential and commercial applications.

The SAI is part of the laundry list of programs for energy independence President Bush outlined in his 2006 State of the Union Address, and that $40 million is a big chunk of the $148 million he proposed in FY2007. Fiscally conservative that’s not.

As you can tell already, many of these exhibitors wouldn’t be there if not for a large heap of federal money. But the state of Maryland, and at least one locality within, is not immune to shoveling tax money toward homeowners who believe solar energy may be right for them.

One bill (HB377) which passed the 2008 General Assembly increased Maryland’s former $3,000 cap on solar grants to $10,000, divvied out as $2,500 per installed kilowatt. But according to the Maryland Energy Administration, the full budget allocation for these grants was wiped out in one day of applications, and they’ve stopped taking applications for the FY2009 waitlist for money to replenish the grants extorted from utility companies and others who participate in the Regional Greenhouse Gas Initiative cap-and-trade program. They’re now starting to take applications to wait for reimbursement in 2010.

If that’s not enough, residents of perhaps the greatest socialist’s paradise in America – Montgomery County – have the opportunity to participate in their “Clean Energy Rewards” program. Of course, it comes at a cost to the consumer:

County residents, businesses, and other organizations will receive a half a cent ($0.005) for each kilowatt-hour (kWh) of program eligible clean energy used.  Depending on the product selected the cost of clean energy through the program ranges from 1.5 to 3.5 cents more than standard electricity (10/14/08).

There’s also a cap to the program of 20,000 kWh annually for residences and 400,000 kWh annually for businesses. All this does then is subsidize a small portion of the out-of-pocket cost to those who feel guilty enough after being browbeaten by the radical environmentalists out there to decide to fork over a premium price for the same exact form of energy that the most polluting coal-fired plant produces at a much better price. Even in a best-case scenario for a homeowner who uses 20,000 kWh, they’re paying a $300 premium to get a $100 check from the government.

Clean Energy Rewards is not the only scam Montgomery County promotes, they also encourage the purchase of renewable energy certificates as well. Once again, this is done to create a market for alternative energy where none exists, and again taxpayers pay for a reward that’s a pittance compared to the actual costs. (But it also keeps a few pencil pushers employed too.)

Job creation is a good place to finish my look at this subject. Many claim that green-collar jobs are the wave of the future, and there was one start-up business present at the trade show with a mission to “create permanent green-collar jobs that support an environmentally sustainable locally-based economy.” Another little handout I picked up last weekend was from a group called the Worldwatch Institute, who claimed that “(b)y 2006, the U.S. renewables industry had created 386,000 jobs compared to 82,000 jobs in the coal industry.” Perhaps that’s true, but the renewables industry pales greatly in comparison to the over 1.6 million jobs currently held by those working in the oil and gas industry. Nor does the Worldwatch Institute give a time frame for that job creation purportedly in the renewable energy field.

As a whole, I have nothing against those who wish to invest in solar power for whatever reason – if they have the resources to do so and feel it’s right for them, go for it. The same goes for companies who have a better idea in that realm of technology. But it should be up to the market to determine winners and losers, and my biggest problem with the heavy government involvement and subsidy of that industry for the dubious purpose of preventing climate change is that there are so many other priorities our federal and state governments should be funding first, well before engaging in corporate welfare of this type.

While the nation argued for days about a $15 billion bailout of the Big Three, we seem not to notice the billions in subsidies and tax breaks that go to make renewable energy cost about the same as those fossil fuels we hold in abundance, but which may not be as politically correct to use. Someday solar energy will have its place, but the economics of today suggest that day isn’t here yet.

A definite candidate for the circular file

I’m sort of surprised no one has commented on this on our allegedly thriving local blogosphere. I actually came across this gem in the Wicomico Weekly newspaper, which can be described as the fishwrap the grocery ads come to my house in. (In reality, the paper consists of a few key local news articles which ran in the Daily Times over the prior week – along with the weekly store ads – and is distributed to each house.) While I don’t often talk a lot about local politics, in this case we’re the canary in the coal mine.

The headline of the article, which was originally published way back on November 21 and penned by Daily Times staff writer Laura D’Alessandro is “Tilghman may sign climate agreement” – for those of you not local, the Tilghman in question is Salisbury Mayor Barrie Parsons Tilghman. She’s been coy about whether she’ll seek re-election when her term expires early next year.

In true politician fashion, she kicked the idea to a committee called the Environmental Policy Task Force. In turn, that committee was nearly unanimous in recommending she sign the document. Tilghman stated she would sign it if there was no actual action required by the city of Salisbury; otherwise the City Council would also need to approve it. (Come on Barrie, that’s likely a 5-0 or 4-1 vote in favor.)

Unfortunately, the Daily Times article mostly glossed over what would be expected of the city of Salisbury should she decide to join hundreds of other mayors in signing the agreement, which was originated by Seattle Mayor Greg Nichols in 2005. Eleven of the signees are in Maryland, with the usual suspects like Annapolis, Baltimore, Chevy Chase, Edmonston, Gaithersburg, Kensington, Laurel, Rockville, and Takoma Park on the list but also joined by Chestertown and Sykesville – cities farther from the O’Malley/I-95 corridor. The sole Delaware signatory is Wilmington.

Forget the first two parts, which basically ask Congress to continue on its merry path of late of subsidizing every sort of alternative energy scheme under the sun (including the solar energy lobby) while providing as many roadblocks to securing and using energy sources that are inexpensive and relatively plentiful. What needs to be asked of the mayoral candidates and city council hopefuls is whether they support this idea, and if so where would they find the money for some of these key items:

  • Conducting an inventory global warming emissions in City operations and in the community, setting reduction targets and creating an action plan.

Maybe a better question is which consultant would we hand over thousands of dollars to in order to create this nice report which will eventually find space on the shelf next to all the other reports?

  • Adopting and enforce land-use policies that reduce sprawl, preserve open space, and create compact, walkable urban communities.

Whether you agree or not that growth should pay for growth, right now we have nothing paying for nothing and these land-use policies don’t promise any help in that regard.

  • Promoting transportation options such as bicycle trails, commute trip reduction programs, incentives for car pooling and public transit.

Sounds like a subsidy to me, although more likely that funding will come as a grant from the state or federal government. Regardless, it’s tax money spent.

  • Increasing the use of clean, alternative energy by, for example, investing in “green tags”, advocating for the development of renewable energy resources, recovering landfill methane for energy production, and supporting the use of waste to energy technology.

This one I can agree with to some extent, although one needs to study the potential payback period for these investments. Worcester County has a landfill methane plant as I recall, so there’s a close-by case study.

  • Make energy efficiency a priority through building code improvements, retrofitting city facilities with energy efficient lighting and urging employees to conserve energy and save money.

Note to city employees: invest in sweaters for the winter and strong deodorant in the summer. And let’s hope the energy-efficient lighting isn’t dropped, broken, and creating a hazmat scene.

  • Purchasing only Energy Star equipment and appliances for City use.

Again, what’s the payback period for the premium?

  • Practicing and promoting sustainable building practices using the U.S. Green Building Council’s LEED program or a similar system.

If you want to drive building out into the county, go ahead and pass this one. It’s guaranteed to work.

  • Increasing the average fuel efficiency of municipal fleet vehicles; reducing the number of vehicles; launching an employee education program including anti-idling messages; converting diesel vehicles to bio-diesel.

This one is a mixed bag, since the first two aren’t bad ideas. But I’m not sure the third one is practical given the usage some city vehicles receive, and the fourth one needs study as to the effects using E85 would have on the amount of maintenance required for vehicles so converted compared to vehicles using regular diesel.

  • Evaluating opportunities to increase pump efficiency in water and wastewater systems; recovering wastewater treatment methane for energy production.

Hasn’t the city of Salisbury already put itself enough in hock upgrading its wastewater treatment plant?

  • Increasing recycling rates in City operations and in the community.

Now there’s a subsidy waiting to happen. I’d be curious to know how the county recycling operations do as collection points, nonetheless it’s my admittedly foggy memory that curbside recycling tends to be a money pit yet the city of Salisbury has that program. I also know our company puts a lot of paper into the city’s recycling system, along with a slew of used 24 ounce diet Pepsi bottles (those would be mine.)

  • Maintaining healthy urban forests; promoting tree planting to increase shading and to absorb CO2.

All fine and dandy, but if the choice is between planting trees or fixing potholes, the roads should win.

  • Helping to educate the public, schools, other jurisdictions, professional associations, business and industry about reducing global warming pollution.

Despite Al Gore’s best efforts, you can tell this was written some time ago because it still refers to global warming. And considering this has been a very chilly fall about these parts, I say we could use a little dose of global warming. (The latter half of November featured a string of 12 straight days where temperatures fell short of normal.)

All these ideas sound great in practice, but committing to be advocates by signing a piece of paper is only good for a nice-sounding election eve press release. When the rubber hits the road and taxes continually go up in every jurisdiction because people like Greg Nichols in Seattle come up with brilliant ideas like this, it will do more harm than good to the noble idea that energy usage should be prudent – but not artificially limited.

How much green does “green” really save?

As most of my readers know, I’ve become interested in the “green” building movement since I studied for and passed my LEED AP examination last year. Out of all the thousands of LEED Accredited Professionals though, my guess is that on the skepticism scale I would be off the charts. As far as the United States Green Building Council’s rating system is concerned, my problem lies not with the idea of enhanced energy efficiency but more in the social engineering aspects of the rating system.

Not one, not two, but three stories have come across my work desk in the recent days, stories which piqued my interest and actually attempted to put some parameters on the burgeoning green building movement.

The first comes from the Wall Street Journal, where writer Sari Krieger asks whether the uptick in green construction can be maintained until the training and education of those who actually build the structures catches up with demand. The “green gap“, as Krieger calls it, is leading to an increase in educational interest in the subject of green building, a demand sure to continue as the American Institute of Architects mandates green continuing indoctrination, er, education beginning next year as part of their overall requirements for continued professional membership. (Look for individual states to follow the AIA’s lead in the coming months by mandating the same training in their continuing education requirements for the profession. I’ll bet Maryland is one of the first five to adopt that rule.)

When you consider that the demand for green buildings is somewhat artificial because of govermental edicts declaring certain public structures need to comply with a green construction standard (usually LEED Silver certification), the question becomes at what premium will the work be done? That training isn’t very cheap and certainly contractors will want to recoup their investment in it, particularly when the time spent learning the techniques comes out of time which could be making the company money on the job.

The idea of monetary impact was addressed in another forum I ran across, the Green Inc. blog of the New York Times. In Kate Galbraith’s Debating the Green Building Premium, it’s claimed a report by the U.S. Green Building Council (the entity behind the LEED certification system, remember) shows that the additional costs borne by owners of green buildings for construction work out to 2.5% of the total up-front cost. So if a building costs $1 million, the additional cost in construction is supposedly $25,000. I have a hard time believing that statistic when the certification alone runs around $2,500 and as I noted above labor skilled in green building techniques is at a premium. I would peg the number to be more like 5-10 percent.

Galbraith’s story also quotes the lead author of the study, who notes payback on energy costs comes in “five to eight years.” Generally I prefer a five-year or less payback based on the additional up-front investment; moreover what’s not clear is whether the study includes any additional costs for maintaining and verification of green building components – for example, how much additional maintenance is involved with a “green” roof as opposed to a regular roof. On the other hand, the cost of taking care of a “graywater” irrigation system is probably little more than the cost of keeping a regular irrigation system operational as long as the water supply remains enough for operation. In that case, the up-front costs are the greatest portion of the investment because there’s additional piping and storage required.

Naturally, those who have a vested interest in the continued success of the movement believe that all we’ve done is simply a good first step. On the Greenbiz website I came across this staff report that claims the sum total of green building savings has equaled the impact of burning 1.3 million fewer tons of coal for electricity, using 9.5 billion fewer gallons of water, and 400 million fewer miles driven by green building occupants, as examples. But they still aren’t satisfied:

“LEED buildings’ relatively exemplary performance is not helping to make enough of a dent in contraining the growth of the building sector’s CO2 emissions,” (GreenerBuildings.com Executive Editor Rob) Watson said. “We need much more — and much more quickly — to reduce total emissions.”

To me, that is code language for more mandates on buildings and restrictions on the types of materials and systems allowed. After all, a large part of their business to date has come about simply because of existing mandates for LEED-certified buildings, and something tells me these folks were smiling broadly on election night when Democrats were ceded further control of the levers of the federal government.

I happen to believe that these systems need to stand or fall on their own merits and not be placed because a lobbyist for some environmental group whispered into a Congressman’s ear after his industry PAC dumped big bucks into his or her campaign, or because that same lobbyist befriended some hapless middle manager at a Fedzilla department, agency, or bureau and sweettalked him or her into writing up some nice helpful regulations that assured their industry a piece of the building pie it might not have otherwise deserved. We’ve gotten a long way toward energy efficiency simply by customer demand (hey, energy’s not getting any cheaper as a whole) so I see no need to goose the process even more by dictating standards.

Unfortunately, those in charge haven’t quite gotten that lesson down – perhaps they should skip the next LEED seminar and instead take a course in free market economics.

We’re past bailout – now it’s a handout

If there’s one thing which aggravates me about the state of government circa 2008, it’s their practice of complete interference in the free market.

Almost a month ago I came across this story in the Gazette by Lindsey Robbins which talked about Maryland-based solar energy businesses being excited because some of the pork slathered on the bailout bill was an extension and enhancement of certain tax credits related to the use and installation of solar energy equipment.

Quite honestly, I could probably write several hundred words on why this isn’t such a good idea, but to me it wasn’t really enough to do a story on by itself. Solar energy has its uses, but I happen to believe the industry needs to sink or swim on its own merits and not rely on incentives placed in the tax code to gin up a market for the items.

What the story did provide for me though was a nice lead-in to another large handout to an industry which somehow can’t seem to compete in the marketplace without federal help, or at least that’s what they claim. In their case though, some of the problem does have to do with overregulation and gaming of the market by the federal government.

Detroit has come to Washington hat in hand looking for $25 billion to retool and make themselves more competitive with automakers from around the globe. And unlike their city’s football team, who is 0-21 in Washington all-time, these guys have a very good chance of winning this game. They definitely have the pundits on their side and surprisingly to me have an ally in conservative firebrand Pat Buchanan.

Unfortunately, while Buchanan does have somewhat of a argument, the key point has been missed by many of the pundits. No amount of money is going to help Detroit automakers in the long run because their business savvy is the problem. They have allowed their unionized workers to absolutely run roughshod over them (sort of like the Lions’ opponents over the last decade) with one exception: as of the latest set of auto industry contracts ratified last year, the UAW is now going to take a larger share of responsibility for their members’ and retirees’ health care expenses. But even that came at the cost of much of the Big Three’s treasure as they had to establish a fund for the UAW to tap into and defray the initial costs.

If the federal government truly wanted to help Detroit automakers, there are two things it could do. Sadly, neither of these has a chance in hell given the party in charge inside the Beltway.

One would be to not just roll back but rescind the CAFE standards. Let Detroit build the cars as the market desires, because fuel economy will still be a selling point – it just doesn’t need to be regulated.

The second is to bring the tax burden on businesses down. Not only would this help the Big Three but thousands of other large-scale employers by reducing their costs. In turn, a better profit outlook should help the ailing stock market.

Without CAFE standards, Detroit doesn’t need the $25 billion to retool. (They may still ask for it, but at that point we know for sure it’s a simple money grab.) They’ll also save billions more if business taxes are restructured and simplified. As things stand now, the scenario we’re probably heading for is eerily similar to that which many financial institutions are facing: their primary stockholder is the federal government and regardless of actual number of voting shares Fedzilla calls the tune.

As a nation we’re seeing that long slide down a more and more slippery slope and the sled is careening ever-closer to the forest of fascism. By the time we as a public can get to the corrective action necessary in two years it may be far too late to change course.

Drilling isn’t off the table…yet

Despite Barack Obama’s threats to overturn a Bush Administration executive order allowing oil exploration on 360,000 acres in Utah, thus far Congress isn’t showing interest in reinstating their offshore drilling moratorium…yet.

In response to a question today following remarks at the National Press Club, House Majority Leader (and Maryland 5th District Congressman) Steny Hoyer noted (h/t CQ Politics.com and Bob McCarty):

We believe it is absolutely essential to have an energy policy which is, as I said in my speech, not driven by the temporary reduction of prices at the pump, which are hard to explain, hard to explain how you go down about half within a very short period of time and spike up in that short period of time, as well.

Now, as it relates to the moratoria, which was not renewed, as you know, in the continuing resolution which was passed in the latter part of September, I think there will be efforts to look at further ways to delineate areas available for drilling.

I do not believe at this point in time that there are any proposals being made to reinstate the moratoria across the board. (Emphasis mine.)

Hoyer then answered a follow-up:

I think I answered both those questions in response to your question. But having said that — that’s all right.

Having said that, I don’t think there is any intent at this point in time — there are no — nobody is suggesting that we return to the same position we were in on September 28th or 27th or 26th.

But I think there will be real discussion on the parameters in which drilling will be pursued.

There was a GAO report out, by the way — I think maybe some of you saw it not too long ago which raised the same question that we had raised about the 68 million acres that are currently authorized. Now, of course, all the acreage is open over — outside the 3-mile or 12- mile limit.

So I think the answer to your question is, we’re going to be looking at parameters, not necessarily reinstatement of the existing moratoria prior to the president’s lifting it and then the restriction that was in — in the interior appropriation bill of ‘08.

There was a lot more to Hoyer’s speech and I will come back to touch on another part later this week. But I can parse through words reasonably well for a guy with a public-school education and I smell a rat. I believe there are two possible outcomes with Hoyer’s statements: one is where they bring back the idea of offshore drilling but only on sites over 100 miles out (the so-called “Gang of Sixteen” plan), the other attuned to my emphasis on his “at this point in time” comment. Right now the Democrats are more interested in bailing out the Big Three and probably figure correctly that their environmentalist allies can wait another month or two to get a Congress and President much more friendly to their interests. Let’s face it, there’s a lot less interest in “drill here, drill now, pay less” when gas is $1.90 a gallon than there was when the price at the pump was double that. And oil companies haven’t been moving on exploration despite the lifting of the ban because it’s foolhardy business to begin the process when a majority of Congress (but not the public as a whole) favor rescinding the open season. Despite the Democrats’ anti-drilling views, voters still placed them in the Congressional majority.

The American Petroleum Institute also weighed in on Hoyer’s remarks (h/t Jane Van Ryan of API):

We believe the position outlined to news reporters by House Majority Leader Steny Hoyer – that the Democratic leadership would not seek to re-impose the ban on oil and natural gas leasing in federal waters – is the right approach. The American public has made clear its strong support for increased access to untapped domestic oil and natural gas resources. At least two-thirds of Americans in recent exit polling said they supported offshore drilling. Neither Congress nor the next administration should set unreasonable, arbitrary limits on leasing because such restrictions could remove some of the nation’s most promising oil and natural gas prospects for development, and the industry has proven it can develop these resources in an environmentally safe manner. The industry stands ready to help put America’s vast energy resources to good use to strengthen our nation’s economy and energy security, generate billions of dollars for the benefit of our federal and state treasuries and provide good jobs for Americans across the country.

Now I’ve never met Congressman Hoyer; perhaps he’s a nice guy. But when he says there’s no intent at this point in time to restore the exploration ban I trust him about as far as I can throw him. Nothing personal, but he is a liberal Democrat and for whatever reason they put environmental concerns and the phantom idea of global warming ahead of our energy and transport needs and job creation. (Given that it’s 33 degrees out right now and we’re only supposed to hit maybe 45 tomorrow – January weather in the middle of November – global warming doesn’t sound so bad to me “at this point in time.”) And while Democrats and the Bush Administration argue over where the $25 billion requested as a bailout by the Big Three comes from, it’s worth noting that Exxon/Mobil’s yearly tax bill covers that sum with plenty to spare.

I can’t say when it will happen, but sooner or later the price of gasoline is going to edge up toward the $3 and $4 mark again, and once again we’ll be able to place the blame squarely where it’s belonged – on the shoulders of the Congressional majority who takes more notice of Al Gore’s inconvenience than the inconvenience of the American public.

Off limits again

An AP story yesterday by Stephen Ohlemacher detailed some of the items Barack Obama will quickly adopt once his takes the oath of office in January. Not surprisingly, a number of items which have ping-ponged back and forth between Republican and Democrat administrations over the last two decades will be brought back online once Obama takes office, such as embryonic stem cell research and abortion funding.

The item that brought up my blood pressure slightly (because I’m irked but certainly not surprised) is where Obama will shelve a Bush Administration plan to open 360,000 acres in Utah to oil exploration and drilling. (For sake of comparison, the area would be roughly 24 miles square, or, for Midwest natives like me that’s the approximate area of sixteen townships.) It’s a probable precursor to President-elect Obama reinstating the offshore drilling ban President Bush lifted last summer unless the Democrat-controlled Congress beats him to it by restarting their ban which was allowed to expire in October – this may occur in the lame-duck session Democrats want in order to pass yet another economic stimulus package.

Just because oil has backed far off its historic per-barrel price from this summer is no reason to abandon the “drill here, drill now, pay less” mantra. Obviously the domestic oil producers hadn’t placed any major exploration in motion on areas previously off-limits because of the prospect of the ban being reapplied. Instead, their search for cheaper and more easily accessible product will again lead outside our borders and America will see its share of domestic vs. foreign oil consumption decrease below the approximate 1/3 slice domestic oil holds now. While Obama spoke in August about possibly keeping the prospect of offshore drilling on the table in return for alternative-energy investment and stricter CAFE standards, at least one analyst dismissed that proposal as “total lip service.”

Also noted in that Bloomberg.com story by Daniel Whitten was the looming prospect of a windfall profits tax on oil companies; considering the drilling restrictions and the likelihood of an Obama presidency imposing a tax for simply selling a product Americans desire the next four years probably will be a minefield for an industry which employs over 1.5 million Americans. Triggered by oil prices exceeding $80 a barrel in the Obama plan, any supply shock could push prices back over the windfall profit threshold.

The question then becomes not if but when will the price at the pump edge back upward toward the $4 a gallon we were hammered with over the summer. Regardless of the hype or the market gaming the federal government has tried to achieve at an ever-accelerating pace since Democrats regained control of Congress in the 2006 elections, for the foreseeable future America is going to transport itself via the automobile, and those cars will need gasoline to power them.

Again the question is worth asking: why should we not be able to recover resources which are useful to us, can be extracted in an environmentally sound manner, and allow Americans the freedom to transport themselves and their goods at reasonable convenience and cost? We seem to be trading proven energy producers like coal, oil, and natural gas for the schemes of creating the electricity we need through vast arrays of solar panels, windmills, or other so-called “green” sources. Yes, they do have a place and someday the technology will bring down their price point to make these sources competitive for large-scale use. I’m all for that occurring but not with my tax dollars making up the difference.

Switchgrass isn’t going to fill up my gas tank the next time I stop at the station. While it’s not a right to have gas be inexpensive, the incoming Obama Administration is likely to forsake the interests of the middle-class Americans it purports to cater to in order to appease the radical environmentalists and alternative energy rent-seekers.

Thinking Americans need to make their voices heard. Let’s keep oil drilling unabated and on the table.

Taking the power from the people

Nope, this isn’t another post about the recent election. Faithful readers will recall that I had a backlog of environmentally-related posting ideas and this intermission between the election hangover and the holidays (when news really slows down) seems to me a good time to opine on some of these items.

Back in mid-October, an AP article (via the Forbes website) by Marc Levy detailed efforts by the commonwealth of Pennsylvania to not just slow the growth of but cut electricity usage beginning in 2011. By May 31st of that year, utilities will have to roll back electricity usage by one percent, increasing to three percent by May 31, 2013 – that 2013 deadline also compels usage during the 100 highest peak hours during the year to be cut by 4.5 percent. If the utilities fail in this effort, penalties of up to $20 million can be assessed. So not only do the utilities have to plan for their future needs insofar as supply is concerned, they now face the additional headache of a mandated plan to cut customer usage.

With any of these so-called “green” ideas, one has to ponder the unintended consequences. For example, would it be in a utility’s best interests to extend service to a new job-producing entity like a steel recycling mill if doing so means they’ll likely go over the electricity usage threshold? While there are provisions in the new law for exceptions to the rule, could state regulators who decide on whether a utility should be pardoned and not penalized be trusted with this amount of sayso over the economic livelihood of Pennsylvania based on their personal preferences and beliefs?

Nor will this be cheap. The law allows utilities to bill their ratepayers up to 2 percent of their 2006 revenue to achieve this change; what’s unclear is how much this will either impact the corporate bottom line or reflect in each month’s electric bill. Keystone State residents also face a similar dilemma to that faced in Maryland a couple years back as long-term rate caps will soon go away for the vast majority of them. One bright spot for Maryland is that this could drive businesses and residents back over the border; that is provided our rabidly green legislators in Annapolis don’t attempt to do the same here in Maryland. Energy providers here already have enough of a handicap with renewable energy portfolio mandates let alone trying to trim usage too.

In my profession, energy efficiency is an admirable goal and I encourage those who are using energy do so as prudently as possible. However, there is a point where curtailing usage also curtails lifestyle, allowing economic growth to cease. Just look at a normal home, where the old 60 amp breaker box of my youth is woefully inadequate and 200 or more amperes of usage is demanded because of all the devices which have made our lives easier and more enjoyable. It goes back to the old pie-slice analogy, where making the pie smaller gives everyone a smaller piece unless fewer people wish to have a slice.

Once again, a leftist governor (in this case, Governor Ed Rendell) has placed the ideals of radical green ahead of the realities of seeking prosperity. It bears asking what incentive there is for a utility to wish to sell less of its product or face monetary damage; certainly there’s not a whole lot in it for the investors unless they’re allowed to charge more per unit, and we all know how that flies with the public.

Then again, we in Maryland have our own deterrent to utility friendliness called the Regional Greenhouse Gas Initiative. An article last month in Science Daily points out the results of a study commissioned by the Maryland Department of the Environment which contends that “Maryland officials can reduce electricity use in the state significantly by investing revenues from the Regional Greenhouse Gas Initiative (RGGI) cap-and-trade auctions in energy efficiency programs, (and) neighboring states might benefit as well.” Seriously, our tax dollars paid for this? Like there would be any other conclusion given the provider of the funds to commission the study – no bias here, huh?

The article goes on to note:

The Maryland Department of Environment commissioned the study, The Role of Energy Efficiency Spending in Maryland’s Implementation of the Regional Greenhouse Gas Initiative, to help the state explore the economic and environmental implications of using RGGI revenue in support of energy efficiency programs, as well as to determine the impact on producers, consumers and other stakeholders. The analysis began prior to last month’s auction and the study’s findings are not based on its results.

But the important part to me was this line in the story:

Even though prices may not go down, consumers may see some modest savings because they consume less electricity due to efficiency improvements.

I have news for the eggheads who did this study: prices aren’t going down because the state is also mandating energy providers in the state use more expensive “renewable” resources. And the efficiency improvements could very well come out of the state’s money pot as well through subsidies or using the RGGI auction funds. Perhaps it would be smarter to just tell the utility to hand the money over directly to those consumers who the state helps out but that doesn’t create a job for some pencil-pusher in Annapolis to oversee who “deserves” the funding does it? Nor does it make the recipient more appreciative of the government who gave him the check (and more likely to support his or her local representative therein) if the money instead came from the utility.

Finally, why not make this article about three different states? My blogger friend Bob McCarty writes about a similar carbon credit offer his local utility is trying in Missouri, where he lives. At least there it’s the private sector trying to make a profit from gullability and not the state government.

The strangest bedfellow

I can only shake my head in wonderment at how I ended up on the mailing list for the Environmental Defense Fund. But I did and they wanted me to send a message to the next President about what I wanted him to do in his first 100 days. And what, pray tell, would that be? Let me fill you in:

In George W. Bush’s first 100 days in office, he refused to sign the Kyoto Protocol and put forth a policy favoring increased exploration for fossil fuels and rapid construction of new power plants, rather than exploring conservation and sustainable power generation.  Actions like these, put out so early in his administration, set the tone for eight environmentally destructive years.

As you may be the next President, I am writing to ask you to differentiate yourself from Bush’s policies of the past, and accomplish the following during your first 100 days in office:

1. Introduce legislation to cap global warming pollution.
2. Commit to creating new incentives to unleash energy innovation and build the green jobs sector.
3. Invest in public transportation alternatives to help Americans drive less.
4. Support alliances of industry, environmentalists, and landowners to protect endangered wildlife.
5. Take on the overfishing crisis through new economic incentives for fisherfolk.

By accomplishing these 5 tasks, you will be setting the stage for an environmentally protective administration, and taking the first steps toward undoing the damage the past 8 years have caused.  I urge you to implement this To-Do List within your first 100 days in office.

Once I stopped laughing, I realized that, gee, one could have a LOT of fun with this editable form letter. The only problem is whether the EDF sees it before they send it and can stop it.

Instead, I simply came up with five better suggestions. You can take them as you may. Hell, sign my name to it and send it on in.

In George W. Bush’s first 100 days in office, he refused to fire any of those environmentalist hacks that plague the lower reaches of government and only put forth a policy favoring increased exploration for fossil fuels in his final year, finally ending his father’s prohibitions on offshore drilling. It’s unfortunate that actions like those wanted by the radical environmentalists may yet set the tone for eight economically destructive years if the wrong candidates are elected.

As you may be the next President, I am writing to ask you to differentiate yourself from failed policies of the past, and accomplish the following during your first 100 days in office:

1. Introduce legislation to eliminate the ban on offshore drilling once and for all.
2. Commit to creating new incentives to energy companies to allow them to create jobs.
3. Invest in better transportation infrastructure to help Americans spend less time being stuck in traffic.
4. Support landowners and protect their private property rights from overbearing government regulation.
5. Take on the overfishing crisis through eating more chicken – it tastes better anyway and supports our local economy.

By accomplishing these 5 tasks, you will be setting the stage for an outstanding administration, and taking the first steps toward undoing the damage the environmentalist wackos have caused.  I urge you to implement this To-Do List within your first 100 days in office.

Sincerely,

Michael Swartz

www.monoblogue.us

Maybe they’ll vet their mailing lists a little better next time!

Sorry, since I don’t sponge off donations like the EDF does, I can’t offer you a gift for sending this in like they do. But who needs another travel mug or tote anyway?

Fact checking ‘Record’

Yesterday the Frank Kratovil for Congress campaign decided to go negative, just as I figured they did it first. Here’s the ad they dubbed “Record”:

What interested me the most was the so-called poor environmental record they tagged Andy Harris with, citing a number of votes he’d taken since 1999. I took the opportunity to look up some of these bills and found out one of them made it into my monoblogue Legislative Scorecard for this season. The other bills Kratovil cited were reintroductions of a bill that didn’t make it through previous sessions. I’ll begin with my description of one bill Harris properly voted against, this year’s HB1253.

HB1253/SB844 – Chesapeake and Atlantic Coastal Bays Critical Area Protection Program – Administrative and Enforcement Provisions

Why I’d vote no: Perhaps the bill has merit in making enforcement more consistent statewide; however, I have objections to doubling the buffer area of land in certain instances, the “soft shoreline” provisions, and the overly punitive nature of penalties. Originally the bill would have allowed the state free rein to inspect construction sites as well, one of the amendments addressed this issue.

Disposition: HB1253 passed the House of Delegates 119-15 (Vote #1088), passed the Senate 41-6 (Vote #1011), and was approved by Governor O’Malley on April 24, 2008.

You’ll notice that Harris had a little company in his vote, included in that company is one of our local Senators, Lowell Stoltzfus. Harris did vote the bill out of committee, but obviously Frank Kratovil’s campaign doesn’t count the committee vote. This bill as crossfiled and a previous version are three of the nine bills Frank cites.

Another bill cited in five different versions was a bill debaring people from state contracts for certain violations of law. I’ll allow Governor Ehrlich to speak as to why this bill was worth voting against; this is from his veto letter in 2003:

I believe that the approval of Senate Bill 122 would have a chilling effect on the companies wishing to do business with the State, particularly in light of the fact that there is no distinction made between willful violations and minor violations (such as accidents) that may occur without the knowledge or intent of the contractor. The threat of debarment may cause companies to shy away from State contracts, which, in turn, would have an adverse effect on competition and negatively impact the price of competitively bid procurements. Additionally, the inclusion of contiguous jurisdictions in the civil violations section raises possible equal protection issues. A contractor may violate the law in 46 other states and the District of Columbia and be immune from debarment, but would be denied immunity from debarment if the violation occurred in a state contiguous to Maryland. While a court may find that this provision is rationally related to protecting an interest of the State, it undoubtedly will invite litigation and complicate the procurement process.

Senate Bill 122 does not enhance the Board of Public Works’ ability to protect the integrity of the State procurement process, and it complicates the ability of the State to secure efficiently and fairly necessary State contracts. I have pledged to the citizens of Maryland to deliver a streamlined, more efficient government, and I intend to keep that promise.

Again, Andy had plenty of company because it was essentially a party-line vote in each of the five cases cited in the commercial.

The final vote Kratovil counts against Andy Harris was voting against increasing penalties for certain environmental violations. While that doesn’t seem good in and of itself, this also gave the courts the power to compel owners to fix violations (see the final page).

Now let’s talk about the League of Conservation Voters. They seem to have a problem with Andy Harris voting against the following (among other items):

  • an amendment to weaken the job-killing, so-called Global Warming Solutions act;
  • the cap-and-trade auctions (read: sticking it to utility providers) like the one we had last week;
  • the Critical Areas legislation I wrote about above;
  • the Renewable Portfolio Standard, which is a budget-busting mandate for utility providers, and;
  • wetlands and waterway permit fees – yet another fee for developers to pass along to prospective homeowners.

Guess what? I have no problem with him voting no and right-thinking voters shouldn’t have an issue with it either. You know, I’d comment on Frank Kratovil’s legislative record but – oh wait, he doesn’t have one.

And since I’m in for a penny, I’m in for a pound. Here’s the commercial the Democratic Congressional Campaign Committee dumped big money into Kratovil’s campaign for:

Again, I looked up the bills in question and both of these are health insurance coverage mandates. It’s mandates like these that make health insurance so expensive. Think of it this way – if I had true choice in my health insurance and could get it with specific coverages I desire, obviously I have no need for OB/GYN services. A younger person may not desire the cancer screening that the other bill makes all health insurance policies in Maryland feature.

Oh, and that $400,000 in health care contributions? It’s a drop in the bucket compared to that $1.6 million the DCCC is dumping into Frank’s campaign. Do you think they’re buying independence? You know, it’s too bad that question didn’t come up in the debate because I really wanted to see Frank squirm out of that one.

The cap and trade redistribution begins

Last Thursday Maryland utilities were among those bidding to pay for the privilege of creating and/or supplying electricity and natural gas. The first Regional Greenhouse Gas Initiative auction netted a total of $38,575,783 to be divided by the six states offering these allowances. Man, you talk about suckers.

On the other hand, perhaps I’m being too hard on the utilities and other bidders because the sole reason this auction occurred is because these respective state legislators were seduced by the twin thoughts of appearing to address the phantom problem of manmade global warming while adding a few dollars to their state treasuries – without overtly raising taxes. (Never mind that these utilities need to get that money back somehow – unfortunately for them they have far fewer methods to raise the revenue to maintain their own profitability.)

So where will this $38 million go to? I’m sure a piece of Maryland’s ill-gotten gains will go to replenish a program which was stiffed in the state budget, the grant program for solar and geothermal energy. Most of the rest will disappear into the maw of Maryland’s Strategic Energy Investment Fund as detailed (look around page 7) in Maryland law. (As it stands, we might get a quarter back on our electric bill. Woohoo!)

Of course, much of our booty is targeted toward low- and moderate-income homeowners. Certainly they could use the help but I’ve never seen the idea of redistribution from a private corporation through a governmental entity (who naturally gets their cut) to a targeted group as one which provides either efficiency or incentive for betterment of the lower class. But it sure provides votes to the elected officials who love nothing better than spreading the largesse around.

This is the first of what should be a quarterly series of RGGI auctions, the next one will occur in December. In an era where financial providers got in huge trouble from buying and selling a somewhat tangible asset like real estate, it’s mind-boggling to sell allowances to be allowed to create something that we humans naturally exhale. But that’s the way of the world these days, and another item which needs to be addressed in order to reestablish government in its proper role.

Wal-Mart to the rescue

Considering we’re talking about a geographically challenged Democrat governor this could fall under the heading of “blind squirrel” but this story by Jim Nolan in the Richmond Times-Dispatch shows some pretty good thinking by Virginia Governor Tim Kaine.

But it wasn’t necessarily all his doing, as several other states are using Wal-Mart to conduct similar energy audits for their state buildings. The article by Nolan also points out a report from the American Council for an Energy Efficient Economy (ACEEE) that Virginia could cut its energy usage by 20 percent by 2025 if they adopted some steps outlined in the piece. Of course, coming up with the $11 billion to implement all of these recommendations is one difficult part of the equation and what Suzanne Weston of ACEEE doesn’t make clear is the first and most obvious question I would ask: what is the payback period for that $22 billion in savings she promises?

I’ll tell you why the energy audit as performed by Wal-Mart is a pretty brilliant idea: you’re using the resources of a company which is dictated by its market to make things as efficient as possible, thus getting the best possible prices for its customers while assuring themselves and their investors a healthy return on investment. If they’re going in to do an energy audit chances are they’re loaded for bear.

It’s truly unfortunate though that this Wal-Mart approach is only going to apply to energy efficiency in buildings. The issue at hand is that government by nature tends to be less than as streamlined as it could be; mainly it’s the idea of those who draw their paychecks from government not to overwork themselves out of a job. If government ever truly fixed a problem, the department, bureau, or agency set up to deal with it would no longer have a reason for existing.

But fear not, denizens of the left wing, Governor Kaine hasn’t fallen off the liberal wagon yet. As the Nolan piece also notes:

The governor’s climate change panel has set a goal of reducing greenhouse gases 30 percent by 2025. The panel’s full report is due Dec. 15.

Kaine yesterday outlined his strategy for Virginia. It includes conserving 400,000 acres of open space, some 260,000 acres of which already have been preserved.

Kaine also said Virginia has allocated $600 million to Chesapeake Bay cleanup over a two-year period and is limiting development along the oceanside waters of the Eastern Shore.

With 40 percent of the state’s greenhouse gas emissions attributable to transportation, Kaine said the administration is promoting increased use of public transit and commuter and freight transportation by rail.

Would it not make a little more sense to limit development along the bay that they’re paying to clean up? My guess is that the ruling class in Virginia has more money invested in development along the western side of Chesapeake Bay than they do on the Eastern Shore. (If you’re not familiar with Virginia’s Eastern Shore, there’s not a lot there to begin with – its two counties account for less than 1% of Virginia’s population and Governor Kaine is limiting its potential even more.) Certainly the Eastern Shore of Virginia isn’t looming large on the radar screen for mass transit or rail transportation either.

At least the citizens who inhabit that backwater of Virginia do have a Wal-Mart or two to shop at.

California beat us on this one…

Having talked about the concept of “smart growth” last week, it’s time for me to bring up something which was buried a little bit in my e-mail box, but works right in with the theme I was establishing then. Certainly the Green Workplace blog where I noticed this was pleased with this development.

At the tail end of August, the California Assembly passed SB375, which will help achieve the state’s air pollution goals by essentially dictating to local government that their future planning cut the number of vehicle miles traveled. This is how the bill analysis put one example of its topdown planning:

SB 375 requires CARB (the California Air Resources Board), after considering the recommendations from a broadly based advisory committee, to provide targets to the MPOs (Metropolitan Planning Organizations) for greenhouse gas emission reductions for cars and light duty truck trips from the regional land use and transportation system by July 1, 2010.

Basically, as Reason.org’s Samuel Staley opined:

The state government has decided Californians are going to drive less, whether they like it or not. Want to buy a Prius or insulate your home as your contribution to lowering carbon emissions? Sorry, but that’s not doing enough for the government’s tastes. California wants politicians and planners to have a bigger say in where you live, shop and work so that they can make sure you don’t drive that Prius too far.

Senate Bill 375 is the state’s latest far-reaching piece of legislation intended to help to meet one objective: reduce greenhouse gas emissions by 30 percent by 2020.

To cut emissions, the government will take a more active role in where you live, how you get there, and what kind of home you live in. While this legislation thankfully stripped away specific regional targets that would have been far more draconian, the core governing values underlying California’s approach should sound alarms in and out of the state.

If you substitute a few acronyms you could easily picture the liberals in Annapolis adopting much the same thing. After all, Maryland and the Regional Greenhouse Gas Initiative we and nine other suckers states participate in just had our first auction of CO2 allowances – if people thought bundling mortgage-backed securities was pushing the envelope of risky financial investment, try placing a value on breathing. I wonder how much of a CO2 allowance I have to buy if I run a couple blocks after forgetting to use my inhaler first.

But an artificial limitation on the number of vehicle miles traveled has more effects than just a possible drop in greenhouse gases. It also regulates behavior by forcing commuters to live closer to their workplace or depending on slow and taxpayer-subsidized mass transit to get to their job sites. We saw this over the summer with $4 a gallon gas, but in that case it was mostly a function of market forces and not so much government intervention. You may also recall that the clamor wasn’t nearly as much for more mass transit options as it was for reducing the pump price through increased oil exploration and drilling. (Have we forgotten the “Drill Here, Drill Now, Pay Less” movement already?)

Even the movement toward smaller cars which would be enhanced by increasing CAFE standards has deleterious effects on state tax revenue, because per-gallon gasoline taxes obviously don’t supply as much cash if automobiles are more fuel-efficient. That’s one reason some in Congress quietly endorsed a ten cent increase in the federal gasoline tax rate.

It’s another weapon in the anti-personal freedom, anti-property rights arsenal Annapolis Democrats seem to unload every session. Something like this could even supplant the Impervious Surface Fee Annapolis liberals and their allies have tried and failed to enact in recent sessions as legislation that falls into my “love to hate” department. (They did get a Green Fund in the 2007 Special Session with different funding sources.) While I hate to give them ideas, something tells me they’re much more up to speed on the concepts of restricting growth via state mandates than even I am.