Environmental Protection Agency – Page 2

EPA slow-walks unpopular mandate – again

It may not have been such a bad idea at the time, but the thought of adding corn-based ethanol to automotive fuel to stretch the oil supply seems rather silly in retrospect given our recent prowess in finding new supplies of black gold. In 2005, under the George W. Bush administration and a Republican Congress, the EPA was given the first Renewable Fuels Standard (RFS) mandate to include ethanol in motor fuel. It was at a time when many still believed in the theory of “peak oil” and determined we had to look past this resource in order to meet our growing needs.

Fast-forward to the present day and we find that, because of issues with decreased consumption of gasoline combined with increasing statutory requirements for the inclusion of ethanol in automotive fuel, the EPA took the unprecedented step of reducing its mandated amount of ethanol for this year; meanwhile, the RFS which was supposed to come out in November of last year is still on the EPA drawing board.

In reading a summary of energy news I receive daily from the American Petroleum Institute, it was revealed that retailers and other petroleum marketers have their own concerns about the prospect of E15 fuel being approved for use in order to achieve the mandated amount of ethanol required for these increasing RFS numbers.

Naturally, this is from the perspective of what’s derided as Big Oil – on the other side, you have officials in corn-producing states beseeching Barack Obama to stand firm on these standards, while desperately attempting to secure infrastructure to provide the even higher E85 blend for flexfuel vehicles, such as the “I-75 Green Corridor” which has a lot of gaps.

The whole flexfuel idea was popularized a few years ago by a group I gave some pixels to during the $4 a gallon price surge called NozzleRage, which was the brainchild of another group called the Center for Security Policy – their goal in creating yet a third group called Citizens for Energy Freedom was to mandate cars be equipped as flexfuel vehicles. Even though it’s essentially a free option, there are few takers for flexfuel cars as they occupy a tiny proportion of the market – about 1 in 20 cars sold are flexfuel cars (although that number is higher for government vehicles.)

Obviously the hope for ethanol proponents is to expand the number of facilities where E85 can be purchased in order to eliminate the need to go to an unpopular E15 blend while simultaneously being able to ratchet up the RFS figures. If even 15 percent of the cars can run on E85 and the price is competitive, then corn growers would be happy. (Never mind the folly of using food for fuel.)

Personally, though, I’m hoping they scrap the RFS altogether. It was an idea which may have had merit (and a lot of Congressional backing from farm states) a half-decade ago, but we can do better because our oil supplies are much more plentiful thanks to new technology. That’s not to say that technology can’t eventually be in place to use another source for ethanol (like the sugar cane Brazil uses for its much more prevalent ethanol market) but how about letting the market decide?

And while it’s unrelated to ethanol, I thought it was worth devoting a paragraph or two to note that North Carolina – hardly a conservative state – is getting closer to finishing the rulemaking process for fracking in the state. Most noteworthy to me in my cursory reading of the rules is that North Carolina is looking at a fairly sane setback distance from various impediments – nothing more than 650 feet. They also seem to lean heavily on industry standards.

On the other hand, Maryland was looking to set rules which would require a completely arbitrary 2,000 foot setback and require plans for all wells proposed by a drilling company, rather than single wells. In short, we would do to fracking in Maryland what Barack Obama is doing to the coal industry nationwide – strangle it with unneeded and capricious regulations. That should not stand in either case.

It’s been my philosophy that an area which doesn’t grow will die. It may take a while, but killing growth will sooner or later kill the economic viability of a city, county, region, state, or nation. Putting silly regulations in place because a minority believes the debunked hype about a safe process is a surefire way to kill a vital region in the state, not to mention impede the possibility of prosperity elsewhere. We can do much better when common sense prevails.

AC Week in review: August 17, 2014

I put together a few things this week, and what’s apparent to me is that the political world doesn’t really take a break in August.

Take for example the late-session attempt to promote “Buy American.” Does it really have a chance in Congress before the session ends? Probably not, but it keeps Ohio Sen. Sherrod Brown in the headlines and the favor of his friends in organized labor.

But labor should be more concerned about some of the points brought up by my AC cohort Ed Braxton in two articles this week, particularly if his assertion that manufacturing is moving beyond labor is correct. But he also contends that American-made is gaining credibility again in the global marketplace.

On the other hand, we seem to have an Environmental Protection Agency which is bound and determined to drive jobs back overseas. Coal miners and their allies came out in force to recent EPA hearings in Pittsburgh, driven by a proposed standard which they contend would all but wipe out their industry. As a buttress to their contention, it was also revealed that a separate EPA effort to reduce ozone standards to as low as 60 parts per billion (from a current level of 75 parts per billion, established in 2008) would cost the American economy dearly. Perhaps the worst thing is that the EPA doesn’t even know itself how compliance can be attained.

Having sat down and written a couple pieces for next week, I can tell you trade will be on my radar screen. As is often the case, politics will play a role there but you’ll have to wait and see how I interpreted it.

AC Week in review – August 10, 2014

Thanks to a slow week a few days back I skipped an installment of my AC week in review – but I’ve come back with some new stuff.

On Friday I posted a piece about Andy Harris’s Salisbury town hall meeting. It was intended to be a followup of sorts to this piece I posted at the AC site regarding questions which should be asked at these gatherings – and as you hopefully read Friday, my question in that vein was indeed answered by the Congressman.

Oddly enough, the answer to my question at that town hall touched on a concern expressed by my AC blogmate Ed Braxton, who wrote about America’s high tax rates in a piece he did a week ago. But in a seeming contradiction, Ed penned a piece dealing with the decline in the necessity for manufacturing labor because workers today are much more productive than our forefathers were, while I noted that manufacturing employment was on the upswing last month.

One thing I didn’t ask Andy Harris about was his inclination to support the Ex-Im Bank, a saga which has played out over the last few months as some manufacturers would like to keep it going while conservatives consider it a piece of corporate cronyism. There aren’t too many session days left before the September 30 deadline, a fact I mentioned in this piece from last week.

There is one more item I wrote last week, and I’m hoping it gets on the site early next week because it looked at the recent EPA power plant emissions hearings in Pittsburgh. Regardless, it’s a topic which deserves comment and the opportunity is still there.

As I recall, there are a couple other stories I’ve been following which reach milestones as well. We may learn the fate of the OCTG complaint against South Korea this week, and there’s movement elsewhere on the trade front, too. I might see about writing a piece on something I learned Thursday night as well.

So hopefully my next installment will be chock full of good information. Generally I spend time on the weekends writing for AC so it’s ready early in the week. Looks like I may be busy.

This will leave a mark

Although Jenna Johnson’s Washington Post piece described Governor Martin O’Malley as “brusque…terse and often lack(ing) patience” during a Board of Public Works meeting, that meeting still netted Dominion Resources another small step toward investing $3.8 billion into upgrading their Cove Point facility by allowing them a tidal wetlands license. O’Malley joined Comptroller Peter Franchot and Treasurer Nancy Kopp in approving the permit, leaving only federal authorities in the way. The permit was for a temporary pier to offload construction supplies for the project, which environmentalists fear will lead to further extraction of natural gas in the region for export.

To me, it wasn’t a vote O’Malley wanted to take, and he really didn’t have to – his vote against would have only made it a 2-1 decision. But to do otherwise would have left another black mark on his administration’s legacy of making Maryland one of the states most unfriendly to business in the nation, even though the permit would have gone through.

And it’s not like environmentalists aren’t winning the war despite losing that battle – the prospect of fracking in Western Maryland is growing dimmer by the day given some market saturation and the outlandish regulations proposed for drilling – never mind the possible benefits that would bring. But O’Malley had to disappoint the few hundred who are passionately opposing the remodeling of the LNG terminal in Calvert County.

At this point, though, it’s all about promoting the legacy and let’s face it: are the environmentalists going to vote for Larry Hogan? Well, there is that slight possibility but when the Washington AFL-CIO and other trade unions support Cove Point, O’Malley can’t afford to alienate that group. That’s hundreds or even thousands of motivated voters he has to keep in the Anthony Brown camp. So Martin O’Malley will hold his nose and vote for Cove Point, all the while hoping that his buddies at the EPA or somewhere else in the federal government will bail him out by turning thumbs-down on the project at a late stage. After all, if they can stall the Keystone XL pipeline for this long, pushing back a project just a few miles outside Washington, D.C. is almost a no-brainer to them.

So when Martin O’Malley acts like a petulant child in a meeting because he knows he has to take an unpopular vote, we shouldn’t feel any sympathy for him. He’s left a whole lot on the table insofar as benefiting from our American energy boom goes and he knows it.

The bad news for good performance

If you go to the gas pump, you’ve probably noticed the little sign that says the blend is “10% ethanol.” For several years, the EPA has mandated a certain amount of ethanol be used to slake America’s thirst for gasoline, with a 10% blend of ethanol being just enough to cover the mandate. Unfortunately, with less gasoline being necessary to meet demand thanks to both a stagnant economy and more fuel-efficient cars, the mandated amount of ethanol isn’t being used anymore. I noted the other day that the oil companies were calling on the EPA to scrap the proposed mandate increase this year.

When I wrote that I wasn’t aware that a movement is out there to not just stop at E-15 but go all the way to E-30. Oddly enough, I saw a piece from Rick Weiland, who I referred to in my dark money post, which brought it to my attention. (Damn, that dude has made it on here twice in one week. After he loses that race, he’ll probably move to Maryland and run with his newfound name recognition here.) So I did a quick bit of research and found there is a movement out there which believes E-30 is actually the optimum amount of ethanol to take best advantage of its attributes. Weiland is obviously driving a vehicle tuned to that specification and there are actual service stations which have the blend in his region – in both cases, the average motorist isn’t usually going to have that condition. A check of this site revealed no such stations around Delmarva, so it wouldn’t do us much good.

Needless to say, what the market won’t do government will force. So Senate Democrats are pushing the EPA to increase the mandate, meaning that they’ll artificially create a market for higher ethanol blends. (Flex-fuel cars are supposed to be able to handle E-15, but they’ve never been a popular option because they’re not as fuel-efficient running an E-15 blend. It’s telling that you see a lot of government cars with that option, but not a lot of private cars.)

But let’s say the mandated number of gallons increases. The scarcity will be in the E-10 or straight gasoline which smaller motors need to run properly; in addition, the cost of anything which consumes or has corn as an ingredient will rise. It’s why so many different groups advocated for a smaller ethanol mandate.

If we really wanted to do something to use less gasoline, it makes more sense to me to impose part of the Pickens Plan. Now I don’t think wind power is the way to go because it’s not as reliable as fossil fuels, but I think running fleets on natural gas is a fairly good idea for the reasons they state. To me, using food as fuel for automobiles doesn’t make a whole lot of sense – and yes, I know Brazil uses sugar cane for their ethanol. Brazil can use all the sugar cane it wants.

But I look closer to home, and our chicken farmers want their feed to be as inexpensive as possible. Corn growers already have plenty of mouths to feed, so they really don’t need to fill our gas tanks, too.

AC Week in review: June 8, 2014

Wouldn’t you know it: I begin a series only to bump it in week 2 because of MDGOP debate coverage. So this will truly be two weeks in review, but I’m sure you really don’t mind.

I begin by asking the question: can America keep making things? I found an interesting perspective on the question and added my own thoughts. But I also found that workers, STEM-based or not, should be flexible and highly-trained. (And while it doesn’t pertain directly to AC, I was pleased that one of our gubernatorial candidates has the same line of thinking.)

In order for our manufacturing economy to succeed, though, we need to have others around the world play fair. Unfortunately, not only China has been caught cheating on trade, with them and other countries threatening up to 500,000 steel jobs, but right here at home one group of American manufacturers is concerned that federal regulators unfairly have them in their crosshairs as well.

Longtime readers know as well that I’m excited about America’s ongoing energy boom, and in this case I look at how manufacturing can benefit, with a little help from regulators. And while the EPA is trying to do away with the coal industry through onerous regulations, Congress on the other hand is trying to rein in that body run amok with accountability and transparency.

I’m sure in the next couple days – since the unemployment rate is always released on a Friday, for weekend analysis – we will get spin on it, but this is another pre-launch piece I wrote last month on May’s unemployment numbers.

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On the first Friday of this month, analysts cheered the new low unemployment number of 6.3 percent, a low not seen in nearly six years. Moreover, the economy added 288,000 jobs – although that news was tempered by a labor force participation drop of more than 800,000 workers.

Yet out of those 288,000 jobs, just 12,000 were added in the manufacturing sector. That was “surprisingly weak,” according to Alliance for American Manufacturing (AAM) president Scott Paul. The AAM, an advocacy group backed mainly by the United Steelworkers union, contends that 5.8 million jobs could eventually be created by stopping currency manipulation by China, citing a recent Economic Policy Institute report which called the practice the “primary cause” of our trade deficit.

On a similar front, economist Chad Mowbray, who writes for the Shopfloor blog for the National Association of Manufacturers, detailed a number of “nagging challenges” for American manufacturers, leading off with the weak 0.1% first quarter GDP growth announced last week. (Editor’s note: that number has since been revised to a negative 1 percent growth.) Mowbray added that high marginal tax rates and uncertainty about health care costs could be factoring into the slow market growth.

In all these cases, policymakers in Washington are at loggerheads on how to proceed. A bill to deal with the currency manipulation was introduced last year and has bipartisan support, but mainly from Democrats. Unfortunately, that side seems to be placing more time and effort into trying to increase the minimum wage, which is a political nonstarter and is thought by many, including the nonpartisan CBO, to be a job killer. Republicans seem to be content with introducing bills to tweak around the edges on both tax reform and health care, but know there’s little chance of them advancing through the Senate, particularly six months before the midterm elections.

The situation, then, remains a challenging one. If, as some analysts have cited, the weather played a factor in slow economic growth, that excuse will dissipate in the summer sun. The question of whether the May jobs report was a mirage or portends better things is important, but there’s little doubt that if the manufacturing sector lags behind any recovery it will impede our progress going forward.

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It’s been a busy week, but I’ll keep monitoring the manufacturing market.

2014 Maryland dossier: part 10 (fiscal conservatism and taxation)

It (almost) all comes down to this.

Perhaps the most important – and controversial – issue in Maryland is money. How much of it will the state take from your wallet?

We’ve heard the litany for the last couple years: all the tax increases, all the new tolls, and dozens of other new ways the state parts you from your cash. I don’t know about the rest of you, but if I went out and earned it, I consider it mine until I decide what to spend it on.

So let’s see what the three candidates in the race so far have to say about the situation.

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David Craig: As Governor, I will repeal, reduce or eliminate any tax or fee that is impeding job growth – rain tax, business taxes, income taxes, sales taxes, and fuel taxes for starters. I will eliminate the tax on pensions.

Under the Maryland Constitution, the Governor controls the budget. As governor, I will use this authority to make actual cuts to the budget, and I will end the practice of attempting to fool voters into thinking spending is being reduced when it’s not. Such budget games enable politicians to carry out their real agenda which is to grow their government with your money. As for taxes, fees and tolls, those that are the most damaging to individuals and our economy will be reduced or eliminated.

As Governor, I will support withholding funds for departments and agencies that have recurring problems uncovered in state legislative audits. (campaign website)

Harford County Executive David Craig today called on the Maryland General Assembly to repeal the so-called rain tax in the next legislative session. (press release, July 1, 2013)

monoblogue: But is there any chance we’re going to see some of that stuff rolled back if you’re elected?

Craig: I will look at all of them. But if somebody says “which tax first?” I’m going to look at all of them. There are certain taxes that probably haven’t been on the table that people said, would you ever get rid of this? If the state says that we’re going to make – we have a Public Service Commission to keep your BG&E rate as low as possible, why do we tax it? Why do we tax it? If we got rid of that, it gets rid of $5 on your BG&E bill every – well, it would save you 60 bucks. And guess what? You’re probably going to spend it somewhere else.

The gas tax – I do tell people I have to be cautious to (not) say I’m going to get rid of this tax or lower this right away because – I’ll have to use the septic tax for an example – when Ehrlich was governor the septics were all done through PAYGO, so he didn’t have capital projects. This governor turned it to bonding, so if I’m stuck with paying off a bond I’ve got to do that first before I can get rid of the tax. (monoblogue interview)

Ron George: Lower the Corporate Income Tax Rate by 2% to 6.25% in 2015 and lower it .25% in 2016 and 2017 until it rests at 5.75 percent, creating an incentive for businesses to come and to stay in Maryland.

An across the board 10% income tax cut. This puts more money in the pockets of working families and helps many small businesses to grow the economy.

Encourage Baltimore City in the reducing of their property tax rates.

Repeal the Gas Tax and the Rain Tax, challenging the EPA in court if necessary.

Allow Maryland residents to receive a 20% sale tax credit on all individual items bought for over $100.00 in Maryland when they file for their tax returns and supply a proof of purchase, thus creating an incentive for Marylanders to buy Maryland goods. (campaign site)

George advocated tax cuts over tax credits, claiming that the latter is the Democrats’ way “to make you dependent.”

“You play their game, and you get a tax credit,” George said. “They’re picking winners and losers.” (Southern Maryland News, June 26, 2013)

The photo to the left is him beaming after signing the Taxpayer Protection Pledge, a document put out as a vow between the candidate and the taxpayer, through Americans for Tax Reform. (monoblogue, June 21, 2013)

“I agree with Comptroller Franchot that we cannot afford more bond lending,” George remarked. “O’Malley is shifting today’s debt onto our children. He cannot fund the budget with existing revenue so he has backfilled the budget with bond bills.”

Del. George also noted that it was the O’Malley/Brown administration who extended our debt service from 5 years to 15 years thus creating ever increasing future structural deficits. (press release, September 26, 2013)

Charles Lollar: One solution he advocated was a taxpayer’s bill of rights (or TABOR law) like Colorado adopted some years ago. Simply put, a TABOR law means annual spending can only be increased by the sum of percentage of population growth plus the rate of inflation. (WCRC meeting, August 26, 2013)

Referring to the state of Maryland, Charles warned “we can’t afford our lifestyle,” claiming that $9.2 billion of a $35 billion state budget comes from various federal grants and stimulus money. We bring in only $26 billion of a $35 billion expense tab, said Lollar. (Wicomico County LDD, March 23, 2013)

I will immediately create an attractive business environment by proposing:

Reduction of the state sales and use tax from 6%, requested by and enacted for the O’Malley Administration, back to 5%.

Repeal the Rain Tax (the “Impervious Surfaces Tax,” requested and signed into law by Governor O’Malley), which imposes a “storm water management fee” upon Maryland landowners in ten counties to collect and treat pollutants in storm water and release it to the Chesapeake Bay or its tributaries.

EPA’s decree was imposed on New York, Pennsylvania, Virginia, West Virginia, District of Columbia and Maryland. Yet, only Maryland has instituted a levy on its property owners to meet EPA’s standards.

Repeal the new 24 cent per gallon added tax, which substantially increases the costs of transportation to all Marylanders and injures the ability of those who rely on water and land transportation to operate their businesses and employ others. The new O’Malley Administration tax has been added on top of all other gasoline taxes Marylanders must pay.

Repeal the Death Tax (the “Estate or Inheritance Tax”) which essentially “robs the dead” by stealing the fruits of one’s lifetime labor upon death by taxing once again your assets, already taxed during your lifetime through income and other taxes. State and federal death taxes have a dreadful impact upon many Marylanders and family owned business and farms, causing substantial financial pain to, and often the livelihoods of, family survivors forced to sell the family farm or business to pay these taxes. (campaign website)

“I would do something a whole lot different. We would start from where we were last year, go backwards 3 percent from there – let that be a bottom-line dollar figure – and then go right back to our state department leaders and say…show me or justify why it needs to be more than that prior to this budget going forward.”

“I don’t just want to balance the budget, gentlemen, I want to send refund checks back home to the citizens here in the state of Maryland.” (blogger interview, June 24, 2013)

“If someone with the fiscal experience that I have can step in there and write us a budget that puts us on track to a balanced budget, with no dependency on federal dollars, then I think I’ve done enough for the state of Maryland.”

“…if we pass a tax payer’s bill of rights and we mandate that your state government cannot grow any faster then the cost of living and CPI (consumer price index), then if your paychecks don’t grow more than one percent, neither should your state government. If we had that law passed, we would have sent checks home to every legalized, tax paying citizen in Maryland for the past eight years.”(interview, Raging Against the Rhetoric, July 2013)

Lollar would institute a Taxpayer’s Bill of Rights, so that government spending and taxes would not outpace the inflation rate. He would amend the state constitution to require a referendum in order to increase taxes at a faster rate than inflation. (Real Clear Markets, September 3, 2013)

Lollar, who lost a 2010 race against Rep. Steny Hoyer (D-Md., 5th) and is hoping for better results with his run for governor in next year’s election, said the state budget should start out with “what you have,” not “what you want,” as he said the current governor and Democratic-controlled General Assembly has done year after year.

“That policy is terrible,” he said, adding that the state budget is growing faster than Maryland residents’ paychecks. (SoMDNews, November 1, 2013)

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If you’re looking for help on the other side of the aisle, well, good luck.

One key goal of Anthony Brown’s business ideas is “enabl(ing) state and local government to adequately fund our shared priorities.” After the 70 or 80 tax increases we’ve endured over the last seven years, one would think the funding is already more than adequate.

And while Doug Gansler doesn’t address these issues directly, Heather Mizeur is looking to yet another “sin tax” by legalizing and taxing marijuana; meanwhile, she’s also itching to tax the state’s producers. While she claims the overall effect would be “revenue neutral,” we lost money the last time this was tried.

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So when I look at the candidates, I have to wonder who I think would hold the line. David Craig has a realistic view of the situation, but my fear is that we will see too much of the “look at all of them” and not enough of the repeal or eliminate. The governor has the whip hand based on his control of the budget, so it should be treated that way. The thing which worries me is that the budget will go down, but there will be the real temptation to keep the taxes to build up the “rainy day fund” or some other excuse. Out of 15 points, I can give him 11.

Ron George has the right ideas, although once again the pacing is a little slower than I’d like. While I didn’t mention it in this go-round, the auditing would be a help with the budget. It would be interesting, though, to see what his budget priorities were.

But I found it odd that he talked about tax cuts over tax credits, but proposed one for the Maryland-made goods. Honestly, that’s not going to be a great incentive for business to move here or people to buy here because it’s more paperwork they have to remember. I’d rather just cut the sales tax. So for Ron it’s 12.5 of 15 points.

The best thing any of the three main candidates have come up with is the idea of a TABOR, which Charles Lollar proposed. Its appeal is basic: there would be a spending cap for the state. Priorities would have to be set, and choices made, rather than the seemingly common belief that tax dollars will endlessly be provided. Now whether he could eliminate the entirety of the $9 billion we receive from the federal government is, to be quite honest, very questionable, but certainly getting a TABOR passed would help keep spending to a point where it’s manageable.

But the financial arena is where a populist approach works best. It’s not perfect because there are still some vague areas which need to be explored further, but this is perhaps Lollar’s strongest area and he receives 14 of 15 points.

I’m not quite done yet, though. The final part will deal with some of the intangibles I found.

The real precedent

I got an e-mail today where the sender said this:

…one faction of one party in one branch of government — shouldn’t hijack our economy in an attempt to force through a failed, partisan agenda. That’s not how our system works — and that’s not a precedent we can abide.

Of course, Barack Obama was talking about House Republicans in an e-mail exhorting me to donate to House Democrat challengers, but one could easily change the argument around to indict the executive branch.

In just one example under Obama, the EPA has attempted to regulate particular energy companies and methods of operation out of business. It’s part of a broad program in which the administration planned to regulate America’s energy future, and as we’ve seen in the two-plus years since this “blueprint” was announced, the only positive change was through private-sector investment in oil and natural gas. Yet when the EPA proposes job-killing regulations, will Barack Obama claim he didn’t know that was coming, either?

And if you want to extend the argument, it was one faction of one party in one branch of government which gave us the Obamacare that House Republicans were objecting to. Remember, the only bipartisan vote for Obamacare was on the “nay” ledger, as a number of Democrats voted against Obamacare. And there’s no question that its adoption has certainly hijacked our economy.

So let’s pick up Barack Obama’s argument again:

If members of Congress and their constituents don’t like a policy, they can argue for their side. They can debate other candidates, lay out their plan, and let the voters decide. That’s how our elections — and our democracy — are supposed to work.

Laying aside the obvious flaw – in that we are a Constitutional republic, not a democracy – it seems to me the voters indeed decided. At worst, they prefer a divided government, although the stronger signal was sending a net gain of 63 House seats and six Senate seats in 2010. Conversely, Obama was re-elected by a slim margin in 2012 (over a somewhat weak Republican candidate from a divided party) but had the very short coattails of a net 10 seat pickup.

But Barack Obama can deliver the tough talk in front of a friendly audience because he’s most at home campaigning, not leading. (Or more precisely leading from behind.) Now that America has received a taste of how Obamacare will affect them, Obama has a pretty hard sell if he has to convince his base.

WCRC meeting – September 2013

For the third month in a row (and fourth overall this year), a gubernatorial candidate came to speak to the Wicomico County Republican Club. This time it was Delegate Ron George who graced us with his presence.

So once we opened the meeting in our usual manner, with the Lord’s Prayer, Pledge of Allegiance, and introduction of a growing number of distinguished guests, we turned the meeting over to Ron. He began by making the case that he was making the “sacrifice” of running because “I don’t want to leave the state (as it’s becoming) to my sons.”

And after giving a brief biography covering everything from being far enough down the sibling food chain to have to learn a trade instead of going to college, learning the business of being a goldsmith well enough to make his way to college at Syracuse University, making his way to New York City and briefly acting in a soap opera (“I died…but then I came back later,” he joked) it eventually ended with him meeting his wife and returning to Annapolis to start a family and business.

But it was his time in New York where “I saw a lot of people suffering on the street” that moved him the most. “I’m a man of faith,” continued Ron, and the experience gave him insight into the situation in Baltimore and other impoverished areas. One problem in Maryland was that “we don’t have an economic base in this state.” He pointed out that employment in the public sector in Maryland was up 7% while private-sector employment was stagnant. The budget had increased from $27 billion to $37 billion, and “they’ve squeezed you to death,” said Ron.

It was interesting to me that Ron provided some insight on how he got into politics – in essence, his frequent testimony in Annapolis got him noticed, and he was asked to run in the same district as Speaker of the House Michael Busch. Ron stated that Busch spent $350,000 and turned to negative ads in the campaign’s waning days. At first the mudslinging appeared to work as George was behind on election night by about 50 votes, but absentees sent in before the negative campaigning began pulled Ron over the top by 53 votes when all was counted.

On the other hand, George did such an effective job in the General Assembly that he was the top vote-getter in 2010, finishing 1,636 votes ahead of Speaker Busch. “I never ran to the middle,” Ron reminded us, “I spoke to the middle.”

But the idea behind the 2006 run was also one of keeping Michael Busch from spending his money to help other Democrats. (Hence why I harp on having a full slate of candidates.)

Ron then turned to this campaign, stating the case that his 10-point plan was based on three things: “economics, economics, economics.” It was a message which played well in Democratic areas, alluding to polling he was doing on the subject.

He also revealed why he had the success he’d had in Annapolis. Liberals “like to feel good about themselves,” said Ron, but never thought of how their policies affect the average Marylander. By organizing opposition testimony on various issues, particularly the abortive “tech tax” – where he found dozens willing to testify and put a face to the opposition – Ron got bad laws reversed or changed. “I’m very solution-oriented,” he added.

As Common Core has been in the news, Ron weighed in on how Maryland adopted it. The package of bills was fourfold, he explained, with the first two not being too obnoxious – but once they passed the fix was in for the bad portions. Ron stated he was “very much against” the mandates in Common Core. It’s being forced on the counties, he later said, but was “totally dumbing down” students.

To conclude the initial portion of his remarks, Ron noted he was the Maryland Business for Responsive Government’s legislator of the year, in part for his work in capping the state’s boat excise tax, and promised that, if elected, “I will make sure (rural areas of Maryland) get their fair share.”

While Ron delivered his remarks well enough, though, I sensed he was almost ill at ease making the stump speech portion of the remarks, expressing several times the preference for a question-and-answer session. It wasn’t as somnambulant as David Craig can occasionally be, but wasn’t delivered with the passion of Charles Lollar, either.

As was the case Saturday at the First District Bull Roast, Ron seemed better with the give-and-take of answering questions. When asked about the impact of the banes of rural Maryland – the Maryland Department of Planning, Department of the Environment, and Chesapeake Bay Foundation – Ron launched into an explanation of how he got the state to revisit laws passed in 2008 and misused for two years afterward, noting that several of those overcharged for permits were quietly reimbursed after it was revealed they were interpreting the law too broadly in order to collect additional permitting fees. On that front, Ron also vowed to work toward repealing the “rain tax” and following Virginia’s lead in challenging the EPA.

He was equally as excited about the prospect of auditing state agencies. “I guarantee we’ll find about $5 billion in waste,” promised Ron. The Delegate blasted the current administration for its handling of highway user revenues, pointing out previous shortfalls were paid back, but not with real revenues. Instead, more bonds were issued, and rather than the standard five-year payback these were 15-year bonds.

Finally, Ron made sure to remark the Second Amendment “has my full support,” noting he was the only Delegate to actually testify at the afternoon regulatory hearing in Annapolis. He noted eight different problems with the regulations, where legislation was being written in. (It was also why Ron missed a planned appearance at the club’s happy hour.)

As Lollar did the month before, Ron was courteous enough to stay for the meeting, which meant he sat through my lengthy reading of the August minutes and our treasurer’s report. Deb Okerblom was pleased to report the Crab Feast did better than expected financially.

Jackie Wellfonder, in her President’s report, also thanked those who put together the club’s main fundraising event. She also noted an event to be held in Wicomico County October 20 but benefiting the Dorchester County GOP, which was represented by Billy Lee. She also announced “we have a new website” and asserted our happy hours are “going well.”

Speaking in the Central Committee report, county Chair Dave Parker reminded us of upcoming events like the Wicomico Society of Patriots meeting featuring Charles Lollar this Wednesday (as well as his appearance at a business roundtable the previous evening), the Good Beer and Autumn Wine festivals in October, and the state party’s Octoberfest on the 12th. Parker was pleased at the amount of attention we were getting from the gubernatorial hopefuls.

Parker also filled us in on some news, particularly the Common Core meeting fiasco in Towson. (Ron George noted the charges against the speaker have been dropped.) Dave also related a Forbes article claiming families will pay an extra $7,450 ~~annually~~ over a period of nine years for Obamacare. Apparently Maryland has the highest increase in the nation.

But this gave Ron George the opportunity to add that he created the Doctors’ Caucus in the General Assembly and reveal that 60% of doctors were near retirement age. Some are more than willing to hang up the stethoscope thanks to Obamacare.

Blan Harcum chimed in to alert us to a Maryland Farm Bureau campaign seminar in Annapolis October 14 and 15. Then it was my turn as I updated those in attendance on the status of our candidate search.

In club business, we found a chair for our upcoming Christmas Party, I reminded the folks they could sign up to help at the upcoming festivals, and we secured space for equipment one of our members urged us to purchase. These are the mundane things which seem tedious, but can turn out to be important.

The same may be true about our last three meetings with gubernatorial hopefuls. Next month we go back to local races and speakers, although the exact keynoter is to be announced. We will see you October 28.

More on the environment

I was thinking about the appearance by Charles Lollar at the Hudson farm earlier this month, particularly in the wake of a federal judge’s decision allowing the EPA to continue with its assault on our agricultural livelihood. U.S. District Court Judge Sylvia Rambo, a Carter appointee, ruled the EPA is within its rights under the Clean Water Act to “partner” with the six states in the Chesapeake Bay watershed in cleaning up the Bay. Yes, Judge Rambo, putting a proverbial gun to our heads is truly partnership from the federal government.

While we know a little bit about where Charles stands on environmental issues, how do his GOP opponents weigh in?

Perhaps the biggest environmental enigma about David Craig is Harford County’s on-again, off-again flirtation with ICLEI, or the International Council for Local Environmental Initiatives. (It’s better known as ICLEI – Local Governments for Sustainability.) In 2010, to much fanfare, Harford County became one of Maryland’s ICLEI members, saying it had “taken another step towards achieving the goal of environmental stewardship” by joining the group.

But less than three years later, the county more quietly withdrew from the group, with the local Harford Campaign for Liberty taking credit along with an assist from the county’s Republican Party and a resolution it passed early this year. Perhaps they read the group’s charter?

Somehow, though, that notice of withdrawal has escaped the county’s Sustainability Office, which is instead in the midst of promoting another cherished leftist scheme, Car-Free Days, next weekend. (I’ve discussed this before because the CFD date always falls on my birthday and I have better things to do than worry about going without the freedom of having the means to go where I wish on my own schedule.)

So the question is whether the ICLEI withdrawal was a fig leaf designed to burnish Craig’s conservative credentials at a time where he has to “run right” to win a primary election. Seeing that the Office of Sustainability is still in operation leads me to believe David is making that a priority. There’s no question efficiency is important, and “waste not, want not” is a valid way to approach government. But I draw the line at advocating for those entities in which I have no say dictating how my life and time should be spent, and a group like ICLEI falls into that category.

Unfortunately, Ron George also has a reputation for this type of issue advocacy. In a past campaign, Ron George billed himself as the “Green Elephant.” Here’s a list of some of the environmental restrictions he’s voted for in the past eight years – many of which he cheerfully admitted voting for in his 2010 campaign. The number in parentheses afterward is the number of opposition votes in the House of Delegates.

All of these votes were graded in previous editions of the monoblogue Accountability Project.

Maryland Clean Cars Act of 2007 (17 votes)
Clean Indoor Act of 2007 (39 votes)
Chesapeake Bay 2010 Trust Fund (30 votes)
Regional Greenhouse Gas Initiative – Maryland Strategic Energy Investment Program (25 votes)
EmPOWER Maryland Energy Efficiency Act of 2008 (33 votes)
Chesapeake and Atlantic Coastal Bays Critical Area Protection Program – Administrative and Enforcement Provisions (15 votes)
Smart, Green, and Growing – Local Government Planning – Planning Visions (7 votes)
Greenhouse Gas Emissions Reduction Act of 2009 (30 votes)
Smart, Green, and Growing – Smart and Sustainable Growth Act of 2009 (12 votes)
Natural Resources – No Net Loss of Forest Policy – Forest Conservation Act (23 votes)
Agriculture – Lawn Fertilizer – Low Phosphorus Fertilizer (19 votes)
Smart, Green, and Growing – The Sustainable Communities Act of 2010 (27 votes)
Stormwater Management – Development Projects – Requirements (13 votes)
Renewable Energy Portfolio Standard – Solar Energy (31 votes)
Smart. Green, and Growing – Maryland Sustainable Growth Commission (20 votes)
Chesapeake Conservation Corps Program (27 votes)
Natural Resources – Forest Preservation Act of 2013 (27 votes)

I will note, however, that the majority of these votes came during Ron’s first term in office (2007-10) and he has moved somewhat away from the “Green Elephant” designation – one key example was voting against the Septic Bill in 2012. But how do we determine Ron’s line in the sand?

It goes without saying that the Democrats won’t refuse any restriction couched in such a way as to “save the Bay.” To me, the problem is that we have no idea what approaches work best because we don’t give them any time to work. My thought is that we need, at the least, a five-year moratorium on new regulations in order to better gauge the success of what we already have. An even better case scenario would be rolling back restrictions to the level of, say, a decade ago and telling the EPA to go pound sand and pick on the states which are really causing the problem upstream. Dealing with their sediment behind the Conowingo Dam would be a good beginning.

What we don’t need is to keep the trend line going in its current direction, lest there be no agricultural industry remaining in Maryland.

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.

Harris hosts Lower Shore townhall

The locale was a familiar one, but there were still nearly 100 people in attendance this afternoon as Congressman Andy Harris took time to meet with his Lower Shore constituents. Originally slated as an hour-long event, Harris spoke for about 20 minutes on a couple topics and spent the last hour fielding questions.

Initially, Andy showed this chart, one which illustrates the upward climb of gasoline prices over the last few years. The “pain at the pump” we were feeling was a sign that America needed to change its energy policies.

Another point Andy made in his gasoline presentation was that 80 percent of the cost of a gallon of gas came from the crude oil, 10 percent from distribution and marketing, and 12 percent from taxes. Refining was being done at a 2 percent loss currently. Yet Martin O’Malley was advocating a 6 percent sales tax on gasoline, which would add perhaps 20 cents per gallon, phased in over three years. It compares to the state’s “Blue Ribbon Commission” recommendation of a straight 15 cent per gallon increase (also phased in over three years) along with the Simpson-Bowles federal recommendation of a 15 cent per gallon increase.

The next chart he showed illustrated where the federal gasoline taxes were now going.

Perhaps it would make more sense if I showed the slide Andy had beforehand, which was a full pie showing all the highway money went to roads. That’s how it was in 1980, but thirty years later only 47% goes to roads, while 17% goes to mass transit, and the rest is either in earmarks, beautification, or other flexible projects. Andy believed there should be no increase in the federal gasoline tax until we get back to the pre-1980 condition of spending it all on highways.

However, Andy also discussed the new highway bill, H.R. 7. It would replace a bill which had run its course three years ago; a bill which had been extended three times. Andy claimed that it would streamline the process of getting new highways completed and that potentially 100% of funds could go to highways, if the state opted to spend the funding that way. The gasoline tax wouldn’t be raised to cover the spending; instead a new fee would be applied to domestic oil and gas exploration. (The Surface Transportation Extension Act of 2012, as this is known, is still pending in the House.)

If anything about the bill bothers me, it’s that we can’t cover all it wants to spend with the existing gasoline tax. Why should energy companies – an industry we’re desperately trying to keep in the country to pursue our own abundant natural resources – have to help pay for highways?

Meanwhile, Andy pointed out that the state of Maryland has also raided its Transportation Trust Fund a number of times since 2003, to the tune of nearly $1 billion. Almost $680 million has been taken since 2010.

In essence, that was the extent of Andy’s message. He then opened the floor to questions, and ended up taking about a dozen. One of the most interesting ones came in regard to the tax holiday which Andy voted against last week. It was the “wrong way to do business,” said Andy, who then asked “will we ever stop the payroll tax holiday?”

Instead, something Andy suggested was giving people a choice – take the 2% reduction now and retire a month or two later, or maintain retirement age and pay the 2 percent. That seems like a valid suggestion to me, but Andy “didn’t think Congress is ready to be honest with the people.”

Another tax question Andy took was regarding a House bill which mandated a 1% fee on financial transactions sponsored by several Democrats. Andy said that bill was “not going anywhere in this House.” He pointed out that whenever taxes were increased, each dollar of new revenue was spent, along with 30% more.

Yet Harris also noted that all that saves us from being Greece was the fact we have the world’s reserve currency. Because of the strength of our dollar, interest on $15 trillion in debt is only $221 billion. But if we paid the same interest rates Greece is forced to pay, we would spend more on debt interest than we do on Social Security.

Naturally as part of the fiscal questions, someone asked Andy about the bonuses he gave to his staff. Andy defended the bonuses, saying that he paid his staff less than the average amount and once it became clear they would return money to the Treasury, he helped to bring them closer to the average pay scale through the bonus. To him, though, it was a good incentive to work more efficiently.

A couple questioners mentioned the defense cuts proposed by President Obama, particularly in our nuclear arsenal. Andy believed in “peace through strength” because “I don’t really trust the Russians or Chinese” but also made it clear that “I wish there was world peace…but we have real enemies.” A large and bipartisan group in Congress believed the drastic proposed cuts by Obama were “unacceptable” so they likely won’t happen.

Several people took it upon themselves to ask Andy about his environmental stance, in particular cleaning up Chesapeake Bay.

They asked about the Bay Restoration Fund, which was supposed to be bankrolled by the 1-cent sales tax increase of 2008. But that funding was stripped away the next year to balance the budget. (Never mind that this sales tax increase netted the state around $600 million.)

Yet the questioners pressed Andy on what he would do, one whining that he’s heard the same rhetoric for thirty years. Harris couched it in the terms of improving the economy, because the money wasn’t there to clean up the Bay. “We have to restore prosperity,” he said. Yet we’ve done a lot to help the environment, Andy continued, giving the example of removing 90% of the airborne mercury. Yet to get it to 99% removal, we would have to endure a 28% increase in our electric bills. The EPA didn’t do a good job in studying the benefits of what’s already been done, added Andy.

As for cleaning up Chesapeake Bay, Harris reminded those who questioned him that other states need to be involved as well. Yet a state like Pennsylvania has no real incentive because they’re not bordering the Chesapeake. We also need to partner with affected industries.

Just in my humble opinion, these environmentalists are representative of a group which won’t be satisfied until we’ve returned to the conditions found in pre-Colonial days. After all, if the Chesapeake Bay Foundation ever gives the Bay an A+ grade, what reason do they have to exist anymore? There’s no sense of balance given, nor credit for what’s been done thus far at great expense to our farmers and industry. Instead, the EPA is “confrontational” with the states.

There was one thing about which I didn’t care for when Andy said it. The question was raised that, okay, let’s say the economy is better. Then what will you do about the Bay? (These people were insistent.)

As part of that response, Andy said, “if you don’t want the federal government to have a say, then don’t take federal money.” That’s a little disingenuous because there are a number of areas where the federal government is supposed to perform tasks within states. I’d be very happy if Maryland didn’t take federal education money, for example, but would the federal government get off our back with various requirements? I doubt it.

And then there was the budget deficit. A questioner asked where the controls were, and Andy basically said there are none – “both parties are absolutely to blame…they can’t control themselves in Washington.”

“It’s too easy to come up with an excuse in Washington to spend money.” But Andy was fully supportive of the Ryan budget proposal last year, and likely would be again this year. “Stop attacking those who want to start the conversation,” he pleaded. If politicians don’t have ideas on how to address this, they should be thrown out of office, Harris added. After all, this was a group which approved a budget item of $1 million to Chinese factories to help them improve their energy efficiency. (That’s going to create jobs here.)

Speaking of being thrown out of office, one of the final questions dealt with term limits. Andy is a co-sponsor of a term limits bill already in the hopper, but promised to serve no more than 12 years himself. We should have a citizen legislature, Harris said, and he believed that most of us in the room would be just as qualified to be a Congressman as the ones who are there as long as we have some common sense.

Well, I have no plans to run for Congress – perhaps that’s evidence of the common sense he speaks of – but the hour and 20 minute session was quite informative. I doubt everyone went away happy, but the dialogue was quite compelling.

Media coverage was pretty good. Insofar as I know I was the lone blogger there, but WMDT-TV (Channel 47) was there as was a print reporter and photographer, presumably from the Daily Times.