Plans and schemes for jobs

One recurring theme of this site is my interest in the manufacturing sector, both nationally and regionally. I suppose the realization that much of what we buy is supplied by a nation which points missiles at us and holds trillions of our debt made me consider the need to think a little bit more about self-sufficiency.

In the generations of my 78-year-old father and my last living grandparent, who died at the ripe old age of 90, America built things. Many cite Detroit as an example of where we as a nation once were “makin’ Thunderbirds,” but we made a million other consumer products as well, all over the country. And while the Thunderbird hung on through 2005 – as did my late grandfather – many of those other manufacturers long since had abandoned us for greener pastures overseas where things could be made more cheaply and regulations weren’t nearly as strict. The latter had to be the reason that companies could spend huge amounts to ship products across the ocean in order to bring them back to our market – the market where, in many cases, these same products were once made in factories which sat shuttered and dormant.

That’s why I’m glad to see some of our gubernatorial candidates pay attention to this long-neglected sector. In doing some research for this piece, I found that just one on the Democrat side, Doug Gansler, is making an issue out of manufacturing and doing more than simply giving platitudes in addressing it. I must say some of these ideas are worth discussion and adaptation; unfortunately Doug takes the time to pander to a certain crowd in advocating for the self-defeating ideas of a higher minimum wage and additional mandated sick leave – these would only discourage manufacturers and businesses from locating in this state. Gansler doesn’t quite understand the concept of market forces with some of his proposals, but with some tweaking a few – particularly the apprentice program – could be workable as an expansion of vocational education.

On the other hand, the leader in this arena on the GOP side is Ron George. While he already had a good beginning as far as job creation goes, yesterday he expanded on his existing ideas of rebuilding manufacturing in Maryland – as he pointed out at our Lincoln Day Dinner, “I cannot cut welfare payments unless I have those entry-level, mid-level jobs.” This is what George proposes to do:

The technology and life sciences industries in Maryland have taken off in part because of significant tax credits and a Tech Services tax repeal. By trusting you to use your revenue to enhance your businesses and create jobs, Maryland has become one of the most successful regions in the country for IT, healthcare technology and biotechnology companies.

I’m proposing we make the same investment in attracting and rewarding new manufacturing firms for creating jobs in Maryland. As Governor:

I will lower the Total Effective Tax Rate of new capital-intensive manufacturing firms from today’s current rate of 31.9% to 20% by 2016.

In the short term, I will work with local and county governments to lower property tax rates and with the legislature to exempt equipment from the property tax of manufacturing firms.

By 2018, I will eliminate the business personal property tax, returning stability and certainty to the manufacturing industry.

This proposal is an investment in the perseverance and innovation of Maryland workers. We must bring manufacturing back to Maryland.

While there is an appeal to eliminating the income tax we have to bear in mind that, as currently constituted, revenues from the income tax make up 22 percent of the overall pie, while business taxes make up far less – eliminating them, one could argue, would create enough of a multiplier effect that the other taxes could eventually also be reduced (with prudent spending, of course.) Having to account for the loss of a 22 percent chunk of state revenue is the reason why all of the income tax proposals out there phase themselves in rather than eliminate the income tax in one bite. (Ever notice, though, that tax increases are rarely phased in?)

But there’s also a lot being left on the table through the short-sightedness of the current administration, and while Gansler and his cohorts on the Democratic side are (literally) tilting at windmills for job creation, we can conclusively show that one $3.8 billion project will help a portion of the state succeed long-term. Maryland was one of the first states studied in a new series of blog posts detailing the impact of the energy industry.

And while the API concedes the state isn’t a leader in the production of oil and natural gas, there’s nothing saying we can’t hold our own through a combination of Marcellus Shale exploration in the state’s panhandle, the prospect of more natural gas in the heretofore barely- or unexplored Taylorsville, Culpeper, Gettysburg, and Delmarva (!) Basins, and perhaps oil drilling offshore. Even the idea of testing the waters can have a positive economic impact on a particular area, and one major key in attracting industry is having inexpensive sources of energy. We hear a lot of complaints from industry about the cost of electricity in Maryland, but having more natural gas (and the power plants to use it) would be of assistance in drawing manufacturers.

Now if the candidates can put together a proposal of transportation structure improvements, one which includes an interstate-grade highway north from Salisbury to I-95 (with the cooperation of Delaware) and the completion of the originally envisioned I-97 across the Potomac to meet with I-95 near Richmond to save trucks from having to deal with congestion around Washington so goods could find their way to market much more easily, I’d really be a happy camper. But for now these will have to suffice.

Just as an aside, you just might be hearing a lot more from me on the subject. Stay tuned.

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

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

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

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

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

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

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

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

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

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

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

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

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

(snip)

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

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

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

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

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

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

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

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

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

Another study showing energy job creation

My friends at API alerted me to yet another study touting the benefits of offshore drilling, but this one was more localized because they discuss energy exploration in the heretofore moribund Atlantic Outer Continental Shelf (OCS). This rather lengthy research, sponsored by API and the National Ocean Industries Association, showed that Maryland and Delaware could expect an economic bump of over 12,000 jobs and nearly $1 billion over the cumulative 18-year period (2017-2035) covered in the report. It obviously assumes the case that exploration is opened up at the first opportunity, which will arrive in 2017.

Considering state employment in Maryland alone is about 3 million, with over 212,000 unemployed, these numbers may seem like a drop in the bucket. (Delaware adds about 430,000 and 30,000 to the respective totals.) But it’s worth mentioning that these jobs would be created by private investment, so they’re a net gain to the economy as opposed to simple redistribution of confiscated wealth which typifies government jobs, even those in infrastructure like roads and bridges.

And if there’s one thing I have noticed in the past few years about projections for the amount of oil to be found in a particular place, it’s that the initial estimates are far too low. This is more likely in the Atlantic region, which hasn’t been properly explored with the newest technology yet because there was no prospect for securing leases.

While there was a period where Atlantic leases were granted, no area has been leased out in the last thirty years. Furthermore, the seismic information is also three decades old, which is an eternity in this day and age of computer mapping – that was an era where the conventional wisdom was that many portions of America were played out insofar as oil was concerned. But recent technological advances and methods of exploration have determined there’s still a lot of life in these fields. The same may well be true for the Atlantic OCS, which could have double or triple the expected capacity. (The model used in the study essentially doubles the government’s most recent estimate, but that calculation is based on fields in areas where modeling was more constant than it was in the Atlantic OCS. So it wouldn’t be out of the question to see yet another doubling.)

Regardless, it’s more ammunition for the argument that allowing more energy exploration would be a job creator, with the added benefit of energy self-sufficiency. Drill, baby, drill!

Yes, it’s still “drill, baby, drill”

I ran across an interesting piece of polling thanks to the Energy Tomorrow blog. Their American Petroleum Institute parent group commissioned a Harris Poll of likely voters in four states – Florida, South Carolina, North Carolina, and Virginia – and asked them a series of questions to gauge their support for offshore drilling. As I would expect, the topline numbers showing support for the practice are quite solid, ranging from 64% in Florida to 77% in South Carolina. (Virginia weighed in at 67% and North Carolina at 65%, so it worked out to roughly 2/3 overall.)

But before you assume this is going to be another shill for offshore drilling (which I indeed support) I wanted to point out a glaring flaw in the poll methodology. For example, read through the Virginia polling data and see if you can figure out what’s missing. I’ll give you a second.

The first piece of the puzzle I would have liked to see would be a breakdown of support in coastal areas vs. inland. Using Virginia as an example, it would be nice to know how the question did in the 757 area code, which covers the Norfolk area and the Eastern Shore of Virginia. I would bet that support in that particular area was closer to 50-50, if not slightly negative.

But the key omission was the question: “Would you support offshore drilling off the coastline of your state?” The API’s point is that much of our coastline is off-limits to drilling because of shortsighted policies which ignore the overall safety record of the industry as well as the “peak oil” hysteria helped along by those same environmentalists who wouldn’t mind putting aquatic birds at risk with offshore wind turbines. But their point would have been buttressed even better if they had a clear majority of Virginians (or any other affected state) indicate that drilling off their coastline was an acceptable practice.

While these particular states were probably selected due to the length of their coastline, I wonder how Maryland and Delaware would feel with the same question posed to them. Granted, between the two there’s just 59 miles of Atlantic coastline but they indeed have oceanfront within both states so they could be hosting oil exploration and extraction in their waters someday. My guess is that they would still fall in the 60 percent range as far as drilling support, but only run 30-35% for drilling off their coastline. (A large part of that might be because so much of it is state- or federally-controlled parkland.)

Certainly it’s reassuring that offshore drilling still enjoys support after all its bad press over the last half-decade, but I’m not convinced the impetus is there yet for much motion on the issue. Fortunately (or unfortunately), the question is pretty much moot until 2017 at the earliest so we have time to create the necessary shift in public perception.

Ignoring the market

Gasoline. It’s something all of us need, and if you’re reading this in Maryland last month you began paying roughly 3.5 cents more per gallon at each fillup thanks to the state expanding the sales tax to gasoline as part of a multi-year process for full adoption of our 6% sales tax to that product.

While that bad news applies to Maryland consumers, all of us may soon be seeing less bang for the buck if the EPA gets its way. They’re edging us closer and closer to widespread usage of E15 fuel, which may be a necessary method to comply with short-sighted federal law. The problem: a “blend wall” where the amount of ethanol mandated for use runs up to the limits created by actual consumption, which is down significantly from that which was predicted when the regulations were written several years ago when the economy was humming along.

Many longtime followers of my site know I use the American Petroleum Institute as a go-to resource when it comes to energy issues. Yes, they are an advocacy group but they advocate the tried-and-true solutions for our energy problems, advocating for the least-costly alternative of petroleum which, as a beneficial byproduct, is a great job creator to boot. So while the EPA believes it’s “flexible” on renewable fuel standards enacted as part of a 2005 law, API believes they’re quite inflexible. The only real change was in the category of cellulosic biofuels, which saw its mandate cut by more than half – quite handy when there’s only a negligible amount currently in production. (API has a handy guide to the pitfalls of the RFS here.)

Meanwhile ethanol apologists – like the group which lobbied for E15 in the first place – claim their product will create jobs and reduce our dependence on foreign oil without making an impact on grocery prices, Yet their solution is more government mandates and subsidies. I find it quite telling that this group formed mere days after the election of Barack Obama, who was probably – and correctly – thought of as a person who would shower even more government largess onto the ethanol industry in his quest to wipe out the coal and oil industries.

Yet Congress can act, just as it did in making the mandates in the first place nearly a decade ago – a lifetime in the oil industry, given the boom in oil exploration and fracking over the last five years. So what would happen if the ethanol mandates were scrapped?

Obviously you would have a number of winners and losers. All those who invested in ethanol plants figuring that the government subsidies and mandates would have profit rolling their way – well, they would have the biggest “L” stamped on their forehead. Farmers may take a temporary hit as corn prices drop, but they would eventually stabilize; moreover, farmers who shunned soybeans or wheat for corn to be turned into fuel could go back to those other staple items.

Consumers would win in a number of ways. First of all, they’d get better quality gasoline that’s less expensive, which would both increase their mileage per gallon and amount of money remaining in their wallets. Secondly, the lowering of corn prices would benefit them at the grocery store, and not just in corn-based products because feed for poultry and livestock would be cheaper. And lastly, their small equipment would last longer because ethanol is poisonous to many small gasoline-powered motors.

And while the intention of these mandates was to reduce our dependence on foreign oil, new advances in exploration and extraction have placed the goal of North American energy self-sufficiency within reach. Nor is it necessarily in the form of gasoline, as companies with large automotive fleets are moving toward using natural gas as a motor fuel, building their own infrastructure along the way. (Yes, this can be done without a massive taxpayer subsidy or regulation.)

It just makes more sense to me to not grow our fuel, but our food. When you think of corn, you don’t think of a gas tank but instead think about that tasty ear cooked to perfection with some butter and pepper on it. Let’s get back to using corn for what the Good Lord meant it for, eating.

So what is the New Fair Deal?

If you are one of those who follows conservative grassroots activism, it’s likely you may have heard about the New Fair Deal rally being held in Washington tomorrow afternoon to coincide with tax day. While it will certainly be a modest event by the standards of other TEA Party rallies such as the 9/12 rally in 2009 or various Glenn Beck-led gatherings since, organizers believe a few thousand will attend with many staying around after the speeches to buttonhole various members of Congress about this new legislative program aimed at reining in government.

But the better question is: what is the legislative program? The four planks can be summarized as follows:

  • No corporate handouts
  • A fair tax code
  • Stop overspending
  • Empower individuals

The eight Congressmen who will be authoring the legislation in question, some of whom are among the most libertarian Republican conservatives in Congress, are Reps. Jeff Duncan and Mick Mulvaney of South Carolina, Jim Jordan of Ohio, Doug Lamborn of Colorado, Tom McClintock of California, Mike Pompeo of Kansas, Dr. Tom Price of Georgia, and Reid Ribble of Wisconsin. Mulvaney, Pompeo, and Price are among the speakers tomorrow at the event, which will also feature Rep. Justin Amash of Michigan, Senator Mike Lee of Utah, activists Rev. C.L. Bryant, Deneen Borelli, Julie Borowski, Ana Puig, and Maryland’s own Dan Bongino. Borelli is featured in this video decribing some of the features of the New Fair Deal.

“The New Fair Deal is a four-part legislative package that ends corporate handouts, closes loopholes in a simple tax code, balances the budget, and empowers Americans with the choice to opt-out of Medicare and Social Security,” explained FreedomWorks president Matt Kibbe. “Individual freedom, economic empowerment and equal opportunity are the ultimate fair deal for Americans. No more pitting us against each other while politicians and big business pick winners and losers in the marketplace at the expense of everyday individuals,” he added.

It goes without saying, though, that the devil is in the details. For example, ending corporate subsidies is great for avoiding the next Solyndra or Ener1, but my friends at the American Petroleum Institute would argue that the tax package for oil exploration is vital to the industry’s success. They may have a point, so perhaps the best solution is to prioritize which subsidies would be axed first and which ones would have more of a transition. Being a fairly mature industry, it may take somewhat longer for the oil and natural gas companies to deal with these changes, as well as the sugar farmers who were targeted in the video. I could see a time window of three to five years for these industries, but green energy? Cut them off yesterday.

As far as a “fair tax code” I honestly don’t think there is such a thing, particularly with the proposal of a two-rate system as specified. I like the idea of a “skin in the game” tax where everyone has to pay at least 1 percent (for someone making $20,000 a year that’s $200 – not a back-breaker if you know it’s coming) but I disagree with the progressive rate change from 12% to 24% at $100,000. If we are to have a flat tax, it should be one rate regardless of income. Why would I take the overtime which would push me from a salary of $98,000 (and an $11,760 tax bill) to $101.000 only to have that and much more – since the tax bill would steeply jump to $24,240 – entirely eaten up by taxes? I understand the populist idea of the secretary paying less than the billionaire, but the solution proposed would be ripe for complication because of situations like the above. I’d rather work on repealing the Sixteenth Amendment and creating a consumption tax, which would be the most fair of all because one can control their level of consumption to the greatest extent.

Another area which suffers from being too broad is the concept of “overspending.”  Even if you cut off all discretionary spending tomorrow we would still have a deficit. Yes, we do need to eliminate the concept of baseline budgeting posthaste but we also have to lose the mindset which makes people fear their budget will be cut if they don’t spend their full allocation. While thousands and thousands of federal workers are superfluous to the task of good government, we have to educate the public as to why they need to be let go – you know the media will be portraying them as victims just like they tried to make a huge case that sequestration would be devastating.

Of the four planks presented, though, I really like the idea of the last one as expressed – the power of determining your own retirement and health care needs. In just 14 years I will be eligible for Social Security, but to be quite honest I don’t expect a dime from it because the system will be bankrupt by then in my estimation. (My writing was intended to be my “retirement” but real life intruded a little more quickly than I imagined it would.) The same goes for Medicare. If I had the choice, I would tell the government to give me back the money I paid into Social Security and Medicare – let me decide how to invest it best. This legislation may well allow me that option, although I suspect it will be tailored more to those under 40 who still have plenty of time to weigh all their retirement choices.

(Remember, though, I am on record as saying “Social Security should be sunsetted.” Nothing they can propose would eliminate that stance.)

The key to any and all of these changes taking place, though, is to remember none of this happens overnight. As it stands right now, the earliest we can make lasting national change in the right direction is January of 2017. Moreover, these Congressional visionaries and any other allies we may pick up along the way will be standing for election twice before a new President is inaugurated – and if the Republicans nominate another milquetoast “go along to get along” Beltway moderate who doesn’t buy into this agenda, the timetable becomes even longer.

But there is an opportunity in the interim, though. What statement would it make if Maryland – one of the most liberal states in the country according to the conventional wisdom – suddenly elected a conservative governor and confounded the intent of the heretofore powerful liberals in charge by electing enough members of the General Assembly to foil their overt gerrymandering attempts? No doubt it’s the longest of long shots, but let the liberals think they have this state in the bag. Wouldn’t it be nice to watch them fume as a Governor Charles Lollar, Larry Hogan, Blaine Young, or Dan Bongino is inaugurated – this after the stunning ascension of Speaker of the House Neil Parrott and President of the Senate E.J. Pipkin? Those who survived the collective hara-kiri and cranial explosions throughout the liberal Annapolis community would probably be reduced to bickering among themselves and pointing fingers of blame.

Our side often points to Virginia as a well-run state, but I think there are even better examples to choose from. Certainly there would be a transition period, but why not adopt some of these ideas as well as other “best and brightest” practices to improve Maryland and create a destination state for the producers as opposed to the takers?

If this sort of transformation can occur in Maryland, I have no doubt Washington D.C. would be next in line.

Obama kills Keystone jobs, reaction is as expected

Yesterday it was announced that the Keystone XL project, an oil pipeline which would have connected the oil sands of Alberta to refineries that could handle the product here in the United States, was shelved again by President Obama. This despite his quest to find “shovel-ready” projects and address the nation’s high unemployment rate.

Reactions? Well, pretty much what I expected. Needless to say, Mark Green at Energy Tomorrow was critical of the decision, stating President Obama wasn’t after jobs but “settled on a different calculus – re-election politics.” The American Petroleum Institute writer also pointed out the Keystone project had been under review for three years, plenty of time to gauge environmental impact. This is particularly true when one considers the Keystone XL pipeline could have run close by the existing Keystone pipeline already in use.

Read more

Coming around

June 30, 2011 · Posted in Business and industry, Delmarva items, National politics, Politics, Polling, Radical Green · Comments Off 

In news that’s sure to cheer my API friend Jane Van Ryan up, and perhaps build even more clamor for the Keystone XL Pipeline (and thousands of jobs) being debated by the State Department and EPA, Rasmussen released a poll yesterday which states 75 percent of Americans feel we’re not doing enough to develop our own gas and oil resources.

While the Keystone example would promote exploration in both the U.S. and Canada (hence the State Department involvement,) there are plenty of places we can explore and extract in America, both on- and offshore. An April Rasmussen survey found 50% support for drilling in ANWR  (they didn’t ask me, so now it’s a majority of 50 percent plus one;) meanwhile, another April survey pegged support for deepwater drilling in the Gulf of Mexico at 59 percent. That’s in the wake of sob stories about the one-year anniversary of the Deepwater Horizon disaster.

Yet we still have people in the corridors of power who think mandating more fuel-efficient cars is the way to go. I say let the market decide on that one; of course, given this administration’s policy decisions which have led the way to $4 a gallon gasoline they may all but kill SUV demand anyway.

It never ceases to amaze me that the people who believe that certain technologies, created over the last century and constantly updated and perfected to make them even more cost-effective, are a horrible blight upon the earth. And then they turn around and support the methods those tried-and-true approaches supplanted – the sun only shines an average of 12 hours a day and is at a usable angle only a percentage of that time (not to mention the need for cloud-free days) while the wind has to blow just so to make a wind turbine useful.

About the only fossil fuel I’m aware of that, by reputation, is dogged by reliability issues is nuclear power. If we were getting our own supplies of oil, coal, and natural gas we wouldn’t have to worry nearly as much about strife in other parts of the world or bad weather in a particular region of the country. Are some people too dense to figure this simple truth out?

Now I don’t mind at all if the private sector is involved with alternative energy – after all, Perdue is placing about 13 acres’ worth of solar panels behind its Salisbury headquarters, paid for by a utility – but I have to question whether the utility really wants this electricity or is being forced to back this project by government mandate. If, because of the energy savings Perdue might enjoy, we save a nickel on a fryer that’s great; but the question is whether we lose that few pennies paying for mandated “renewable” energy from utilities when it’s far cheaper to create electricity from coal or natural gas.

(I just hope the glare from the panels doesn’t cause any more accidents in a busy area where changing lanes to follow U.S. 50 westbound is frequent.)

We know that someday there will come a time when fossil fuels run out and technology allows renewable energy to be more reliable. But we’re several generations away from that point, considering how much oil is in shale out west and natural gas is under the rocky western end of our fair state. Let’s go out and get it while we can, creating good jobs in the process.

America has a prosperous lifestyle to sustain, whether environmentalist wackos like it or not.

Odds and ends number 31

Once again I have a lot of little items that deserve a little bit of comment, so here goes.

Delegate Pat McDonough is at it again. The 2012 Congressional candidate has prefiled a bill called the Toll Fairness Act. It has three goals:

  • Declare a moratorium on all toll increases.
  • Mandate a General Assembly vote and Governor’s signature on all toll increases, for accountability.
  • Prohibit transfers to non-transportation accounts. Delegate McDonough claims almost $800 million has been “stolen” from transportation accounts over the last eight years.

While it’s doubtful such a bill will muster the votes to get out of the Democratic-controlled committee it will be assigned to, the fact that we have this measure prefiled shows that people can be good and angry about the situation. We will see on July 14, when a hearing on the toll increases will be held in Ocean City.

Speaking of the peoples’ voice, the petition drive to overturn SB167 through referendum may well be successful. But CASA de Maryland was granted a request to make copies of the petitions; a move Delegate Michael Smigiel of the Upper Shore found shocking.

Delegate Smigiel made a point which I wanted to amplify. It’s bad enough that a group who’s dead-set against the referendum will be allowed to take possession of these petitions, if only for a brief time. Luckily the potential for mischief is lessened since that cat was let out of the bag.

But I think back to the controversy over Proposition 8 in California (to overturn same-sex marriage) and what happened to those who contributed to that effort financially – a number of them were harassed by pro-gay marriage supporters, with threats to both boycott their businesses and harm them physically. Could pro-illegal groups and supporters use the petition information to do the same in Maryland? They’re playing for keeps; unfortunately for them a goodly number of people about these parts are armed and don’t much like harassment. Hopefully the folks at the ACLU and CASA de Maryland will keep this in mind.

Meanwhile, those who support the petition and wish to make sure the count is done fairly aren’t allowed into the process. A Board of Elections worth its salt would tell the state to go pound sand on that (since it’s simply a policy memorandum and not law.)

And that’s not all from the state of Maryland. Richard Falknor at Blue Ridge Forum discusses the new “green” graduation requirement. There’s no time for teaching critical thinking or even the three R’s, but they have time to push that “smart growth” bullshit on our kids? Since the requirement appears to be only in public schools (for now) I guess I don’t have to deprogram my girlfriend’s daughter – yet – since she attends a private school.

I also learned a new word regarding this new environmentalism. In a press release from the Competitive Enterprise Institute announcing the formation of the Resourceful Earth website, a quote from Myron Ebell, the Director of CEI’s Center for Energy and Environment, caught my eye. Said Ebell, “unfortunately, many major corporations are being greenmailed into supporting these assaults on jobs and prosperity.” ‘Greenmailed,’ indeed. Do you think oil companies really want to spend millions to deal with environmental groups advocating for polar bears or caribou rather than job creation and maintaining our lifestyle? They probably add a nickel per gallon to the price.

Still, pump prices have been on the decline of late. That fact makes the timing of the decision to draw 30 million barrels down from our Strategic Petroleum Reserve very curious. Granted, there will still be nearly 700 million barrels remaining in our coffers, but there was no emergency situation to merit the release. Strife in Libya is no worse than unrest in Nigeria, another major oil-producing nation, back in 2009.

Reaction has been severe from some quarters, and seems to be the correct perception of the situation. Americans for Limited Government, for example, claims savings will be meager and short-lived:

If one is generous and assumes yesterday’s $4 drop was solely because of Obama and International Energy Agency, at best it will save consumers $.10 a gallon for gasoline.  That works out to about $1.50 per fill up, or $6 for the month the additional gasoline is available.

In other words, Obama has jeopardized national security by drawing down the strategic reserves to, at best, save consumers about $1.50 per fill up when this ‘flood’ of new gasoline hits the market.  To call this irresponsible would be an understatement.

And the real experts at the American Petroleum Institute were equally underwhelmed:

The release makes little sense for American markets. Crude and gasoline inventories are above average, and crude and gasoline prices have been trending down for weeks, despite the loss of Libyan oil, which markets have already adjusted to. The SPR was intended to be used for supply emergencies. There is no supply emergency. We don’t know what impacts this might have on markets long term. But we could and should be taking steps that would increase our own production by 2 million barrels a day or more for decades, which is possible if the government would grant much greater access to America’s ample oil and natural gas reserves. This would do vastly more to help consumers, increase energy security, create jobs and deliver more revenue to our government. It’s action that would truly strengthen our energy future, not a temporary gesture that has no lasting benefits.

30 million barrels is about what our nation consumes in a day-and-a-half. 60 million barrels (the total IEA release) is well under what the world consumes in a day.

Here’s the problem I see with this release. We have a President who doesn’t mind $4 per gallon gasoline, as long as the increase is relatively steady. He also has backtracked from allowing additional oil exploration thanks to a rare but ill-timed drilling accident in the Gulf of Mexico.

If you assume the oil which was placed in the SPR was purchased at a relatively low market price, well, we have to make that up sometime. And if you believe their line about supplies tightening up thanks to a civil war in Libya it would be my guess that oil will be more expensive. We just added 60 million barrels to future worldwide demand, and that will likely drive prices up a little bit.

In short, this is a shell game (no pun intended) to make people believe we’re doing something about a problem better solved with more oil extraction. For example, approving one pipeline would eventually make up for about half of what the world normally gets from Libya on a daily basis. Needless to say, I don’t buy the ‘peak oil’ theory. (Thanks to Jane Van Ryan of API for the pipeline info.)

And one final item. Over the last few weeks I had a PSA for the Move America Forward Troopathon which was broadcast over the internet last Thursday. They now have their tally in and were pleased to report they raised $507,843 from their efforts – exceeding their $500,000 goal.

It wasn’t as much as previous Troopathons raised, but then again we have fewer troops in that theater. Considering that being pro-military isn’t as much in vogue as it used to be I think that total is pretty good and reflects a nation that remains in a giving mood for our men in uniform.

Wow, that did a nice job of cleaning out my e-mail box. Look for more interesting stuff to come.

Odds and ends number 29

Since I started cleaning out my video archives last night, today seems like a perfect time to do the same with my e-mail box. As always, these are interesting items but ones to which I need only devote a paragraph or two.

In the 2008 election I found the Club for Growth a valuable resource, as did Andy Harris (for a different reason.) And once again they are preparing white papers on each of the major GOP candidates; so far they have released two for Newt Gingrich and Tim Pawlenty. Others on the horizon (once they officially announce) are Mitt Romney, Sarah Palin, Rick Santorum, Jon Huntsman, Ron Paul, Michele Bachmann, and Herman Cain. (They may have to add Texas governor Rick Perry to that list.)

One thing which might be a campaign issue for the Club to consider is the price of gasoline. While it’s retreated slightly from its peak of a few weeks ago, there’s still a long way to go before we reach the price point of a couple years back when our current President took office. But instead of shifting blame, the problem could be solved in a matter of weeks according to the Heritage Foundation:

Others, like the American Petroleum Institute, are chiming in as well. The fact of the matter is that increasing our domestic production could assist in bringing down the price because over 2/3 of the price comes from the crude oil itself. More supply to meet the demand commonly means lower prices.

And maybe I should share this graphic with the Maryland General Assembly – I know a lot of them read here - since they’re trying to cut the western end of the state out of the Marcellus Shale bounty.

(Thanks to some good friends of monoblogue, Ericka Andersen and Jane Van Ryan, for sharing. I have another Maryland energy-related piece for tomorrow too.)

And then we have the newly redesigned fuel economy stickers for 2013 models. Now there’s a little bit of sense in trying to compare the apples and oranges of electric cars vs. conventional fuel models, but the EPA isn’t telling the full story. And considering their original intent of giving letter grades for fuel economy (with electric vehicles rating an A and SUVs generally getting a D) we can see how they’re trying to influence behavior of the carbuying public rather than letting the market determine our fate.

Let’s change the subject and return to someone mentioned above. Perhaps you recall how Newt Gingrich savaged the Ryan plan for Medicare, much to the chagrin of conservatives and others who feel Medicare is unsustainable. Well, in an e-mail to supporters and others who happen to be on his list, he furiously backtracked:

The only way our country can win the future is by engaging our fellow citizens in serious discussions about major reform—not by avoiding hard choices. Congressman Ryan has made a key contribution to entitlement reform, courageously starting the conversation about how to save and improve Medicare. And that’s exactly the kind of national conversation I want our campaign to be about!

There is a reason over 1.4 million Americans are joining me in the online conversation to help win the future.

Yes, Newt, you were busted. But it is interesting to know that you have 1.4 million on your e-mail list.

So my mailbox is now relatively clean, and hopefully you’re much more well-informed.

API conference call on energy companies and pension funds

April 30, 2011 · Posted in Business and industry, National politics, Politics · Comments Off 

I’ll admit it - to some a discussion of pension funds would rank behind watching paint dry on a list of favorite topics, particularly on a weekend where so much is going on locally. But the authors of a study on that subject wanted to make the point that over the last several years energy stocks have outperformed for these funds, and on Wednesday I participated in a blogger conference call on the topic.

My question was first out of the chute and asked, in essence, whether the same social do-gooders who were trying to get various pension funds to divest from politically incorrect companies and industries were succeeding in driving state pension funds away from these investments. It appears not, which to me is a good sign. (Granted, this is based on pension funds from just four states – Michigan, Missouri, Ohio, and Pennsylvania. While they are expanding the study to 13 more states later this summer; alas, Maryland is not one.)

Presumably the goal would be to encourage more investment in this group of stocks, and while – as they always say – part performance isn’t necessarily an indicator of future results, perhaps these state pension funds should look into expanding their portfolio. Of course, there’s always the risk that government policy would dampen stock performance and other callers broached that subject.

Some may ask why this is important. Well, given the recent uproar about state pensions in general and employee contributions to same in particular, obviously API felt that it was an appropriate topic for their membership and wanted to state the case that the increased returns could conceivably assist in keeping these funds solvent.

You can check out the audio here at the Energy Tomorrow blog (as I said, I’m the first question) and transcript here. Thanks to Jane Van Ryan of API for the invitation!

Newt answered that question…

I love it when I’m ahead of the curve.

A few days ago I pondered the following as part of this post:

It’s going to be interesting to see what kind of push there is for something along the line of the ”drill here, drill now, pay less” campaign that got Newt Gingrich’s American Solutions group on the map.

Lo and behold, in my weekly update on everything Newt I read this:

As we see gas prices inching higher again, we think it is time for the return of Drill Here, Drill Now, Pay Less to fight the Obama administration’s war against American energy.

That’s why we’re re-launching Drill Here. Drill Now. Pay Less with a brand new website.

Please visit americansolutions.com/drill, sign the petition, and tell your friends, family, and co-workers about our effort.

The new website also has a number of tools to help our nation to drill here and drill now. You will be able to use the website to get key facts and information about the importance of domestic drilling, contact your Congressman and Senators, write a letter to your local paper, and get a “Drill Here. Drill Now. Pay Less.” bumper sticker for your car.

It’s just a slight variation of domain name from the 2008 effort, but the idea is the same. (It even leads to the same site.) Even after Congress allowed an offshore drilling ban to expire later in 2008 we haven’t made much progress in the last three years thanks to the occupant of the Oval Office.

As many recall in the 2008 campaign, the conventional wisdom six months out was that high gas prices could become an issue in that November’s election. Instead, we ended up pretty much with Tweedledum vs. Tweedledee as the Presidential race insofar as energy policy was concerned (Sarah Palin did the most to keep the drilling issue alive, but she was only a vice-presidential candidate) and the steep decline of the economy in September of that year actually make a difference in the respect that oil and gas prices returned to a more affordable level – therefore, the issue went by the wayside in discussions about TARP and bailouts.

At the moment, we stand even further away from the 2012 elections – needless to say, a lot can change in the course of a week, let alone 20 months. A week ago when I wrote the NozzleRage post, the Fukushima nuclear plants were intact and the Japanese were living life as normal – in the Japan disaster’s wake the price of oil plummeted sharply.

Even so, it doesn’t mean we should abandon efforts to secure our own supplies. While some say we have but a tiny percentage of oil reserves, they conveniently forget that much more is locked away by shortsighted federal restrictions on land use. American Petroleum Institute President and CEO Jack Gerard recently opined:

The administration is well on its way toward creating higher gasoline prices for Americans.

To get more oil and gas, we need more access.  Placing more government lands and waters off-limits and forcing companies to focus on areas that may show little promise even if already under lease will not solve our energy challenges.

The best thing the administration can do on gasoline prices is to encourage greater oil production and greater fuel efficiency here at home.

While I’d personally prefer the market set fuel efficiency standards, I agree with Gerard on the idea of encouraging more drilling. For example, the Bakken Formation in North Dakota has an estimated 4.3 billion barrels of recoverable oil – ramping up production there could easily make a dent in the 616 million barrels of oil we imported from the Persian Gulf in 2009. Even better, oil shale in Western states could hold up to 1.5 trillion barrels of oil. With that, we could fill up our Ford Explorers on the cheap for years to come and break OPEC’s back.

All it takes is some people with the stones to tell the environmentalist wackos to pound (oil) sand. Unfortunately, we don’t currently have that leadership in Washington and it may be ten years or more before this bears fruit – remember, we have to get rid of activist liberal judges who place the interest of critters over creators.

So we may be stuck with high pump prices for now – but the groundwork needs to be done for future prosperity. What we said three years ago still holds true – drill here, drill now, and pay less.

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