Sneaking laws into the books

May 13, 2015 · Posted in All politics is local, Delmarva items, Maryland Politics, Politics, State of Conservatism · Comments Off 

Important update: Per the Maryland General Assembly webpage, the date of presentment was actually fixed as May 3. This means the legislative limbo can run as late as June 2.)

On Tuesday Governor Larry Hogan risked carpal tunnel syndrome by signing hundreds of bills into law. The extraordinarily high output was made necessary by two factors: the events in Baltimore that scuttled a planned bill signing back on April 28, and the desire to enact these laws within the period mandated by the state’s constitution. As a refresher, Article II, Section 17 (c) of the Maryland Constitution states:

Any Bill presented to the Governor within six days (Sundays excepted), prior to adjournment of any session of the General Assembly, or after such adjournment, shall become law without the Governor’s signature unless it is vetoed by the Governor within 30 days after its presentment. (Emphasis mine.)

There are a handful of bills which may make it into the books this way. Since the General Assembly session ended at the stroke of midnight April 14. 30 days hence would be tomorrow, May 14. (Update: presentment doesn’t happen with adjournment, as I have found.) Some of the bills in limbo happen to be those which are part of the monoblogue Accountability Project, so you can bet there are some calculations going on about whether a veto can be sustained.

Many of these bills Hogan has held off on signing establish or extend fees and taxes, with a few being issues local to Calvert, Charles, and Howard counties. Two of them extend or increase fees in state courts; in another case I wrote about the “travel tax” of Senate Bill 190 a few weeks ago. Senate Bill 183 would mandate the adoption of the Geographic Cost of Education Index, which would be a budget-buster. He’s also passed on extending the film production activity tax credit that the producers of “House of Cards” wanted.

Business interests, though, should be happy that Hogan hasn’t signed the de facto two-year fracking ban or the extension of flexible leave.

On the social issue end of the spectrum, we do not yet know the fate of bills which would decriminalize marijuana, allow for same-sex couples to have their IVF procedures covered under insurance, let those who have undergone the treatment to revise their gender to change their birth certificates to reflect this, or allow felons who are out of prison but still on probation or parole to vote.

These are less than 5% of the bills which were passed. Many others have already been vetoed as duplicative, but those above are the ones most likely to get an attempt at overriding the veto – or they can try, try again in the next term knowing that the votes for passage were there the last time. Some bills may be improved with a few minor changes that can be worked out while others should just be put out of our misery.

I’m hoping that Governor Hogan sends a strong message by vetoing the following bills I advised voting against:

If he wishes to let the decriminalization of marijuana become law without his signature, that’s quite all right.

This all goes to show that my monoblogue Accountability Project should be a hot-ticket item when it comes out. next week. The good news is that it’s free and available for the taking once I upload it Monday. (See the update above.)

So-called expert believes women can only be prostitutes and maids

Okay, now that I have your attention, allow me to add some context. If I did show prep for Rush Limbaugh, this story would be placed in the “lighthearted stack of stuff.” (This explains why I kept it around for a couple weeks.)

Back on April 20 – which somehow seems appropriate – the Washington Times ran the story I allude to in the title. It detailed an April 6 lecture by “a key figure behind New York’s statewide ban on fracking.” Biologist Sandra Steingraber said the following:

“Fracking as an industry serves men. Ninety-five percent of the people employed in the gas fields are men. When we talk about jobs, we’re talking about jobs for men, and we need to say that,” Ms. Steingraber says in a video posted on YouTube by the industry-backed group Energy in Depth.

“The jobs for women are ‘hotel maid’ and ‘prostitute,’” she says. “So when fracking comes into a community, what we see is that women take a big hit, especially single women who have children who depend on rental housing.”

Needless to say, if a conservative said that women were only qualified to be prostitutes and hotel maids, we would have that splashed all over the front pages for months on end. Instead, it took two weeks to leak out to the Washington Times and, aside from that, it’s barely been mentioned. A cursory news search for Ms. Steingraber only found a few articles on smaller outlets about upcoming speeches and minor reaction to this story.

The Times also quotes another anti-fracking activist who compares the procedure to rape:

Ms. Steingraber’s speech, titled “Fracking is a Feminist Issue: Women Confronting Fossil Fuels and Petrochemicals in an Age of Climate Emergency,” comes after Texas anti-drilling activist Sharon Wilson was criticized for comparing fracking to rape in a March 30 post on Twitter and her blog.

“Fracking victims I have worked with describe it as a rape. It is a violation of justice and it is despoiling the land,” Ms. Wilson said in her blog, TXSharon’s BlueDaze. “Victims usually suffer PTSD.”

I tell you, Valerie Richardson’s story could be comedy gold – but these people take this stuff seriously, and that’s a shame.

While the oil and gas industry isn’t female-dominated by any means, it’s often a function of physical strength and skill level – the women who are coming into the field aren’t typically found at the wellhead but in what the industry calls “downstream” jobs. None of them involve prostitution or scullery work, but they’re usually not going to get their hands overly dirty at the jobsite because they are the technicians and engineers as opposed to the guys doing the drilling and extraction. And that’s just fine – they’re making an honest living. So Steingraber may be right in the specific that nearly all wellhead jobs are held by males, but as an industry she’s well off base.

Yet the problem with this line of thinking is that it pervades the brains of liberals who occupy places of power, such as the EPA or, closer to home, the Maryland General Assembly. The Radical Green leftists in the MGA still haven’t received the “war on women” meme, but they don’t have to be as sly about it, either.

As you are likely aware I am currently working on the 2015 monoblogue Accountability Project, and some of my venom is saved for the idiocy which passes for oil and gas industry expertise. Pro-abortion legislators are continually trying to strangle Maryland’s fracking industry before it even makes it to the crib, as you’ll see when I wrap up the mAP in the next few weeks.

One good example is a proposal on the waste products of fracking, which is originally proposed would have made it illegal for a person to “accept, receive, collect, store, treat, transfer, or dispose of, in the state, waste from hydraulic fracturing.” Well, that pretty much covered it: a backhanded ban on the practice. I have at least one other example in the mAP, so be watching.

For America to prosper, we need to create our own energy. And when we have the bountiful resources that we do and can extract them at a reasonable, market-based price, why not do so? You can see the depths opponents have to reach to make their point, which means their argument is a futile one. Drill, baby, drill!

Maryland: contrarian again

It’s been awhile since I looked at the energy industry, what with legislation, riots, and other general mayhem. Fortunately for me, I have several sources in that industry to return me to speed and one is writer Marita Noon, whose piece on NetRightDaily today detailed the efforts of forward-thinking states to repeal their renewable energy mandates - some by whopping margins in their legislature. In those states, the market-bending allocations to renewable energy are coming to an end, leveling the playing field and perhaps saving their taxpayers millions of dollars.

Unfortunately, Maryland isn’t one of those states rolling back its mandates; in fact, the only piece of legislation dealing with the renewable portfolio was a liberal Democrat-backed scheme to expand it some more. House Bill 377 and Senate Bill 373 both were aimed at significantly increasing the percentage of renewables up to 40% by 2025 – current law peaks renewables’ share at 20% by 2022. (Both these figures are a pipe dream.) The Senate version lost in the Finance Committee by an 8-3 vote, and the House version was withdrawn before it was voted upon.

It was good that a bad bill was thwarted, but it was unfortunate that no bill was introduced to repeal these mandates. Maryland would be in far better shape energy-wise, eventually with lower utility rates, if true reform was achieved: repeal of the renewable energy portfolio, the withdrawal of the state from the Regional Greenhouse Gas Initiative, repealing the subsidy for offshore wind, and encouraging energy production from hydraulic fracturing and offshore drilling.

Over the course of the O’Malley administration, energy companies took the brunt of new regulations and changes in the market; in particular, their cost of doing business was affected by the renewable energy portfolio and the RGGI. If you assume the goal of the utility is to provide energy as cheaply as possible to make a profit – while keeping prices low enough to maintain and grow a customer base – having the dead expenses of the “alternative compliance payment” made necessary by falling short of renewable goals and the CO2 allowances auctioned off by RGGI as a sweet redistribution scheme aren’t helping the cause. Meanwhile, more exploration and investment in energy infrastructure could bring Maryland closer to being at least even as opposed to a net energy importer.

I wouldn’t expect any repeal of these bills to pass on the scale that they’ve moved through some state legislatures, but 71-70 and 24-23 are perfectly fine margins to me. It would also likely require getting around the committee process and bringing the package directly to the floor. (The portfolio repeal, RGGI withdrawal, and repeal of the offshore wind subsidy could be one bill: call it the Maryland Energy Reform Act of 2016.)

The trick is getting the right people to advocate for the changes by showing how much can be saved by consumers. That portion seems like a job for a group like the Maryland Public Policy Institute, while the lobbying on the part of the energy providers should include a pledge of reducing rates. Shaving 2 cents a kilowatt hour off the bill may not sound like much, but it translates to about $216 a year based on average residential usage of about 900 kWh a month. I don’t know about you, but an extra $18 a month would be nice for me. Just think of the economic benefits we received last year when gasoline skidded to $2 a gallon – benefits being lost now as prices have edged back up over $2.50 a gallon.

To help in prosperity, Maryland needs cheap energy. As it stands now, we don’t have it but I think we can get it if the political will is there.

Informally making it formal?

When you stop laughing, hear me out.

It’s only been two months since he left office, but I think we can all agree our somewhat esteemed former governor is all but an official announcement away from throwing his hat into the 2016 Presidential ring. And when you consider that Hillary Clinton is continually being tarred by scandal after scandal (Benghazi and her e-mail questions) and blunder after blunder (the Russian “reset” button and discussing the “fun deficit”), Martin O’Malley almost looks sane. Come on, what else do you have on the Democratic side – the gaffe-prone Joe Biden? “Fauxcahonotas” Elizabeth Warren? One-term Senator Jim Webb of Virginia is the one who has the exploratory committee going, but the far left considers him a “Reagan Democrat” who they can’t support.

So when you see the above photo on the O’Malley Facebook page (which is where I got it) you have to ask if the “taking on powerful and wealthy special interests” message is meant for Hillary? After all, look how much the Clintons’ foundation has raked in over the years. And his message today about the presidency “not (being) some crown to be passed between two families,” would resonate with a lot of people who believed the propaganda about how disastrous the George W. Bush tenure was and are already tired of the constant turmoil surrounding the Clinton family.

Perhaps Delegate Herb McMillan put this best, noting, “Raising taxes on the poor and middle classes 83 times isn’t the same as taking on powerful wealthy special interests.” But it’s more than that.

Obviously the laughter among many who read this website comes from knowing how rapidly O’Malley would genuflect to particular special interests when it suited his purposes. Environmentalists got a lot of goodies during MOM’s reign: California rules on emissions, punitive restrictions on development in rural areas (via the “tier maps”), an ill-advised and job-killing moratorium on fracking, and of course the “rain tax.” Illegal immigrants, too, had a friend in O’Malley, but productive taxpayers – not so much. He also decided to work on legalizing gay marriage only after his electoral coast was clear in the state – if he had tried to run for re-election on the issue he would have lost the black vote in 2010. (Remember, that was before Barack Obama’s flip-flop on the issue.)

Say what you will about Martin O’Malley, but he is the lone Democrat openly considering the race who has executive experience – on the other hand, there are a number of GOP candidates who can boast the same thing: in alphabetical order there’s Jeb Bush, Chris Christie, Mike Huckabee, Bobby Jindal, John Kasich, George Pataki, Rick Perry, and Scott Walker. Depending on who the GOP puts up, the “experience” tag could apply to the Democrat. We’re not saying the experience would be a good one, but it is what it is.

Don’t be too shocked if the O’Malley’s March national tour makes a lot of stops in Iowa and New Hampshire. It’s his way of pandering to the special interests he cherishes the most, and if people are fooled by this sudden bout of populism it’s their own fault. Don’t say you weren’t warned.

Update: At Front Line State Jim Jamitis echoes these sentiments, with a great headline to boot.

A look ahead: 2015 in Maryland

While many of the fiscal issues that dogged the state in 2014 are still around – and have continued to worsen with each revelation of another revenue shortfall – the personnel in place to address the problem has undergone significant changes thanks to a wave election which pulled Maryland into its tide.

At this time in 2013 when I wrote the look at 2014, the election seemed to be the molehill Anthony Brown thought it would be as the Maryland GOP was divided and despondent. But Larry Hogan’s Change Maryland movement was enough to overcome the built-in advantage in Democrat voter registration; meanwhile, Brown ran a highly uninspiring campaign that led to the lowest Democrat turnout on record. The drag from the top of the ticket allowed Republicans to pick up seven House seats and two Senate seats despite the gerrymandered redistricting done by Democrats after the 2010 elections.

November was the easy part, though – now Hogan has to govern. Job one will be finding $420 million to squeeze from this year’s budget, while the gap for next year is an estimated $750 million. While that number is daunting, it should be pointed out that the FY2015 state budget was $1.886 billion higher than the FY2014 version. That’s a 5.1% increase, so being $420 million short equates to a 1.07% cut. Simply holding the line on the budget for FY2016 and keeping it under $40 billion (in essence, level funding) should cover a lot of the problem. In fact, holding the budget to $40 billion rather than another 5.1% increase to match last year’s would net a difference of $1.224 billion – more than enough to cover the shortfall.

I realize it’s not as easy as I make it sound, but the budget is in Larry Hogan’s hands. The other key is a bill normally introduced immediately after the operating and capital budgets each year called the Budget Reconciliation and Financing Act, or BRFA. This is where the mandated spending that makes up over 80 percent of the budget is tweaked, and this is the bill for which Larry Hogan will have to sharpen his pencil and will want to keep a close eye on. Generally it is introduced by the administration’s request in the body which considers the other budget items. Although a version goes to both the House and Senate, by tradition budget consideration alternates yearly and 2015 will be the House’s turn.

And starting it in the House is important because a significant number of members are freshman legislators, many of whom were elected by receiving the message that voters were looking for change and fiscal responsibility. Over half of the Republicans in the House are newly-elected, with at least one appointee as well to replace Delegate Kelly Schulz, who was tapped to lead the Department of Labor, Licensing, and Regulation. This process will be a sidebar story as two current members of the General Assembly have already been chosen for positions in the new administration (Schulz and Senator Joe Getty.)

On a local level, the entirety of Wicomico County will be, for the first time in memory, represented in the House by a delegation entirely made up by freshmen. A combined 83 years of experience among six members was wiped out by a combination of redistricting, retirements, promotions, and electoral losses, leaving the county with five freshman representatives – Christopher Adams, Carl Anderton, Jr., Mary Beth Carozza, Johnny Mautz, and Sheree Sample-Hughes all begin their tenures next week. It’s perhaps a situation unique to the state; fortunately, the combined legislative experience of the county’s Senators is 28 years (20 for Addie Eckardt in the House and 4 years apiece for Jim Mathias in the House and Senate.)

Yet the change in leadership in the state could make things easier on the counties as well, provided Hogan makes the right departmental selections. As I pointed out yesterday regarding Wicomico County, a change at the Department of Planning could make county-level tier maps become more suited for local needs rather than state mandates. (Certainly counties with approved maps should consider tweaking them to address perceived inequities.) Hogan has also promised steps to allow fracking in western Maryland, to consider a plan to clean the Bay by addressing the sediment trapped behind the Conowingo Dam, and will maintain strident opposition to phosphorus regulations which would affect poultry production on the Eastern Shore. All these endeavors can be assisted with prudent selections at the departments of Environment and Agriculture.

All through the state government there’s an exciting potential for reform – if the right choices are made. Hogan’s early picks have been of a bipartisan nature, which may frustrate GOP activists who saw the same practice help to undermine the Ehrlich administration, but could be argued to be necessary with the political reality that a lot of Democrat votes went to electing Hogan. (Statewide Democrats down the ticket, on the other hand, were selected by comfortable margins.) That also becomes the price to pay for having a majority-Democrat General Assembly.

Something else to watch in Maryland will be how much more Second Amendment erosion takes place under newly-elected Attorney General Brian Frosh. A gun grabber in the Maryland Senate, Frosh now takes a bigger role and it will be up to Hogan to prove his Second Amendment bona fides by championing the eventual repeal or overturn in court of the ill-considered Firearm Safety Act of 2013 – although the law may see its day in federal court first.

Another probable line of demarcation will be how to deal with the certainty of more illegal aliens thanks to Barack Obama’s policies of amnesty. With Maryland’s reputation as a sanctuary state, anything short of a localized get-tough approach will be a further drain on the budget and another headache for Hogan.

All this and I haven’t even touched on economic development or educational reform, which will also be items to watch in 2015 but currently have far too many known and unknown unknowns, to borrow a phrase. On the latter, Hogan has made it known he’ll work to strengthen charter schools but true reform is probably some years away.

The story of 2015 in Maryland will be the story of how Larry Hogan leads after he takes the oath of office January 21. By then we’ll have some idea of what the priorities of the General Assembly will be as they’ll have already put a week of session under their belts and the hearing process should be underway on the highest-priority items. Success may be as simple as plugging the financial hole by tightening the state’s fiscal belt and the faster that happens, the more of the conservative agenda could be debated.

Passing on prosperity

Since both have been mentioned in the news as potential Presidential candidates, governors Martin O’Malley of Maryland and Andrew Cuomo of New York have been natural rivals for the attention of the various interest groups that make up the constituency of the Democratic Party. It seems that they are always trying to one-up the other in enacting off-the-charts liberal legislation – when one allowed gay marriage, passed draconian gun laws, or pandered to illegal immigrants, the other tried to follow in rapid succession.

Martin O’Malley and Andrew Cuomo also both cast their lot with the radical environmentalists who claimed (falsely) that hydraulic fracturing for energy extraction would ruin their state’s environment. Yet while O’Malley relented ever-so-slightly in recent weeks, allowing the practice but with regulations one energy expert called “onerous and time-consuming,” Cuomo stopped the practice cold in his state by decreeing in an announcement last week that fracking would be banned, timed nicely after his re-election. Observers of both states are scratching their heads about these decisions, both in the media and in the energy industry. In New York, local media bemoaned the lost opportunity while landowners in the affected area called Cuomo’s ban a “worst-case scenario.”

Yet in the middle of all this sits the commonwealth of Pennsylvania, a state which has embraced the economic benefits of the practice to such a degree that Tom Wolf, the incoming Democratic governor of the state won’t ban it. (However, he may stiffen regulations and increase taxes on energy producers, which will be something to watch in the coming months.)

Granted, their good fortune of geography means Pennsylvania has the largest share of the Marcellus Shale which yielded all that natural gas, while Maryland only has a small slice and New York has a small but significant portion.  For their part, Ohio and West Virginia also have sizable portions of the formation, while Virginia’s share is similar to Maryland’s. Ohio has been nearly as aggressive as Pennsylvania in taking advantage of the shale – although recently re-elected Republican Governor John Kasich is also trying to increase taxes on producers – while West Virginia is lagging behind their neighbors and just beginning the process of allowing extraction.

It’s a given that fracking isn’t without risk, but neither are installing large solar farms or erecting 400-foot high wind turbines. Yet the natural gas and oil provided from fracking make for a much more reliable energy source than the intermittent electricity provided by the latter pair, sources which ironically need a natural gas backup to be consistent.

As time goes on we will see just what economic effects a fracking ban will have on the affected areas of New York. But as we have seen in states which have already began the extraction, the Empire State is missing out on the potential for investment and return that having the Marcellus Shale provides for those lucky enough to live over it. Hopefully our neighbors in western Maryland will see some benefits in the next couple years as Governor-elect Hogan puts “sensible” regulations in place to benefit all concerned parties.

Newt Gingrich was right after all

I wrote a little bit about the 2012 contenders yesterday in a piece about 2016, but I’ve been seeing the evidence that Newt Gingrich’s thought and 2012 campaign plank that we could once again see gasoline at $2.50 a gallon (or less, as the recent photo above from my Missouri-based writer friend Melinda Musil demonstrates) has come true despite naysayers from just a short year or so ago. Yet despite experts who called the idea “absurd” and noted “the price of oil is set on a global market” and decreed “in the immediate term there is almost nothing you can do,” well, here we are. Musil reported yesterday her prices are now under $2 a gallon.

The reason prices are so much lower is pretty much what Gingrich proposed to do in the 2012 campaign: increased production. With fracking and other enhancements in technology allowing domestic output to increase, the benefits have been enormous. Considering that average prices going into the July 4 holiday hovered over $3.60 a gallon, the relief expressed by drivers may begin spilling over into the economy at-large. Now the average is about $2.54 a gallon, with this area’s prices relatively close to that point.

Over time, the benefits will be accruing to consumers – if an Eastern Shore driver goes 20,000 miles a year in a truck that gets 20 miles per gallon, spending $1 less a gallon for a year is equivalent to a $1,000 annual raise that’s tax free. On the other hand, this decline in prices is thwarting the state of Maryland’s scheme to take more out of our pockets by increasing the sales tax on gas, because as I noted a few days back their 8 cents per gallon projected revenue is sinking closer to a nickel. Luckily, the state government over the next four years will desperately try not to confiscate any more revenue from working folks like us thanks to the recent election, and this tailwind could help Governor-elect Hogan address the state’s structural deficit through a modest increase in economic activity.

It’s doubtful that our prices will stay quite this low, for oil at $60 a barrel means our extraction with its price point that’s a little bit higher isn’t sustainable in the long term. But there is the chance that more practice with these unconventional techniques could drive down production costs to a point where our producers could prosper at that price or even below – if we could match the Saudis’ lower extraction cost we could wipe out the OPEC cartel once and for all.

So enjoy these low prices while they last. Hopefully, this modest economic bump will kickstart other sectors and bring us prosperity despite the best efforts of some in Washington – you know, the ones who try to take credit for this energy boom despite having little to do with it.

A doable goal?

Yesterday we received word that the unemployment rate dropped again, with another month of job growth in the 200,000 range. It’s not the Reagan recovery of the 1980s – when we had 15 straight months of job growth in 1983-84 that would put this latest number to shame, including a whopping 1,115,000 jobs created in September 1983 – but it is a reasonably decent run.

Yet just as manufacturing didn’t share in the Reagan-era gains as much as other sectors did (in fact, it lost some ground), the second Obama term has also fallen well short of manufacturing growth goals. I’ve discussed this group and its job tally before both here and on my former American Certified site, but the Alliance for American Manufacturing tracks progress toward the one million manufacturing jobs Barack Obama promised in his second term.

AAM’s president Scott Paul isn’t all that pleased about it, either.

The good news is that manufacturing jobs have grown over the past few months. The bad news is that they haven’t grown fast enough. I’m very concerned that a surge of imports from China and a paucity of public investment in infrastructure will continue to hamper the great potential of the productive sector of our economy.

Hopes of achieving the White House goal of 1 million new jobs in the Administration’s final term are fading fast. Without some progress on the trade deficit and a long-term infrastructure plan, I don’t see that changing. No doubt the economic anxiety that many Americans still feel is compounded by stagnant wage growth and diminished opportunities for middle class careers.

Two of the key issues AAM harps on are, indeed, currency manipulation and infrastructure investment, although they also took time recently to praise Obama’s manufacturing initiatives and chastise Walmart for their ‘buy American’ effort because much of it comes in the form of produce and groceries. Around these parts, we don’t really mind that emphasis because we produce a lot of American-grown poultry so if Walmart is willing to invest in us we’re happy to provide. (Then again, that promised distribution center would be nice too.) Of course, AAM is backed in part by the steelworkers’ union so one can reasonably assume their view is the center-left’s perspective.

Even so, the group is useful because it makes some valid points. And I think we should have some focus on creating manufacturing jobs in Maryland, as the defunct gubernatorial campaign of outgoing Delegate Ron George tried to do.

Thus, I think the incoming Hogan/Rutherford administration should make it a goal to create 50,000 new manufacturing jobs in Maryland over his first four-year term – if he succeeds, you better believe he deserves a second. According to BLS figures, as of September an estimated 103,000 people are employed in manufacturing in Maryland. But if you look at past data, it’s not unprecedented to have 150,000 (as late as November 2002) or even 200,000 (as late as June 1990) working in the field. And when you take the confluence of a state that is supposedly #1 in education and combine it with the proximity to both major markets and inexpensive energy sources, there’s no reason we should have lost 30,000 jobs in the manufacturing sector under Martin O’Malley – or 16,000 under Bob Ehrlich, for that matter.

But how do you turn things around in four years? Maryland has to make people notice they are open for business, and there are some radical proposals I have to help with that turnaround.

First of all, rather than tweak around the edges with lowering the corporate tax rate, why not just eliminate it altogether? The revenue to the state from that toll is $1.011 billion in FY2015, which is far less than the annual budgetary increase has been. Would that not send a message that we are serious about job growth and immediately improve our status as a business-friendly state?

The next proposals are somewhat more controversial. To the extent we are allowed by the federal government and its environmental regulations, those who choose to invest in the state and create jobs should have an easier path to getting environmental permits and zoning approvals. Even if a moratorium is temporary, making it easier to deal with MDE regulations would encourage job creation. Most of Maryland’s towns and cities already have industrial sites available, but we shouldn’t discourage construction in rural areas if a job creator needs more space.

We’ve also heard about the construction of the Purple Line in Montgomery and Prince George’s counties and the Red Line in Baltimore - combined, the two are expected to fetch a price tag of $5.33 billion. For that sum, it seems to me we could build a lot of interstate highway – even if this $4 million per mile figure is low (and it would be 1,267 miles of highway based on the combined cost of the Red Line and Purple Line) we could do a lot to assist in moving goods through and from Maryland, whether by finishing the originally envisioned I-97 through to the Potomac (and with Virginia’s assistance, to I-95 near Richmond) or enlisting Virginia and Delaware’s help in improving the U.S. 13/58 corridor to interstate standards to provide a secondary route around Richmond, Washington, and Baltimore.

Once we eliminate the onerous restrictions proposed for fracking and begin to open up the western end of the state for exploration, and (dare I say it?) work on making Maryland a right-to-work state like Virginia – or even creating right-to-work zones in certain rural counties like the Eastern Shore and Maryland’s western panhandle – the potential is there to indeed create those 50,000 manufacturing jobs – and a lot more! It just takes a leader with foresight and the cajones to appeal to the Democrats in the General Assembly as well as a Republican Party unafraid to take it to the streets in the districts of recalcitrant members of Maryland’s obstructionist majority party.

But even if we only create 40,000 or 25,000 manufacturing jobs through these policies, the state would be better-positioned to compete for a lot of other jobs as well, and the need is great. For too long this state has put its economic eggs in the federal government’s basket and there’s a changing mood about the need for an expansive presence inside the Beltway. Rightsizing the federal government means Maryland has to come up with another plan, and this one has proven to be a success time and time again across the nation.

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.

The quest for energy security – and sanity

It’s been awhile since I wrote about the energy industry but things are always happening there and I decided to take a peek because of some items I’ve spied in daily updates I receive from the American Petroleum Institute. I like to know what’s going on in important growth industries which profoundly affect our daily lives.

As one might expect, API CEO Jack Gerard is a leading spokesperson against what he calls Barack Obama’s “irrational” energy policy. It makes sense when you consider that the United States is now the world’s leading producer of both natural gas and oil, thanks in large part to recent advancements in fracking technology which have revitalized the once-moribund American energy industry. Speaking before an audience in New Orleans, Gerard noted:

The choice before us is whether we pursue an American future of energy abundance, self-sufficiency and global leadership or take a step back to the era of American energy scarcity, dependence and economic uncertainty.

It is that simple.

There’s a clear benefit to having the abundant resources we do. I was only nine years old when the first oil crisis hit in 1973, but I remember the long gas lines and jump in prices. If you consider the long-term effects in policy and marketing, such as the adoption of fuel economy standards and the push toward smaller cars, ask yourself what may have happened if we hadn’t become so dependent on Middle Eastern oil. Would we have had the resulting mid-1970s recession?

Obviously we have recessionary conditions now in spite of the current oil boom, but there’s a valid argument that opening up the spigots (so to speak) and allowing more extraction would push the economy into more consistent growth.

Another example of an irrational energy policy is our continued ethanol mandate, about which API is asking for another cutout of a mandated increase. The EPA decided not to change the allotment for this year, but needs to finalize the rule.

To me, there are two telling facts about this story: one is that API has given up on legislative relief from Congress and appealed directly to the EPA, which speaks volumes about the transition of our supposedly limited government into a fiefdom unto itself.

The second is the sheer volume of interests on the side of eliminating the mandates entirely – everyone from motorcyclists who complain about ethanol’s deleterious effects on their engines (as is the case for other small engines from boating to lawn equipment) to the poultry producers who have seen corn prices artificially propped up due to the amount of corn necessary for creating ethanol and even environmental groups who fret that the corn-based product is actually worse for the environment. Obviously the corn growers love the price support, though, and farmers have their own determined lobbyists who would love to see an even higher ethanol blend called E-15 allowed.

API and other ethanol opponents are hinging their future hopes on a more business-friendly Congress in the next term, though.

Irrational energy policy on the state level may occur after this fall in Colorado, a state which has taken advantage of the energy boom but may fall prey to the scare tactics environmentalists use to portray fracking in a negative light. There Governor John Hickenlooper, a Democrat, sees his state’s energy success being threatened by a petition drive to place further restrictions on fracking on their November ballot. Hickenlooper is quoted in Bloomberg as pointing out, “(t)hese measures risk thousands and thousands of jobs and billions in investment and hundreds of millions of dollars in state tax revenue.”

I found this interesting because the proposed restrictions would prohibit drilling within 2,000 feet of structures, a change which energy companies complain would “effectively ban” fracking in the state. Their current restriction is 500 feet.

Now something which came out the other day to little fanfare was a draft report outlining some of Maryland’s proposed fracking regulations. The original recommendation, based on other states’ best practices by the University of Maryland Center for Environmental Science, Appalachian Laboratory, was for a 500-foot setback from wells. That guidance was expanded by the Department of Natural Resources and Maryland Department of the Environment to – you guessed it – 2,000 feet. (Page 18-20 here shows the recommended DNR/MDE changes.) In short, these regulations are intended to “effectively ban” fracking in Maryland to the detriment of not just our far western counties, but any of the regions of the state (including the Eastern Shore) that have shale deposits underneath. Talk about an “irrational” energy policy!

So here’s the deal: Maryland wants to depend more and more on methods of generating electricity which lack reliability and increase cost to consumers. Yes, that’s sounds like “smart, green, and growing” to me – not too bright, costing more green, and growing the desire of businesses to leave the state to find a place where energy exploration and extraction is encouraged and rates therefore are cheaper.

I know the Hogan administration would want a “balanced approach” to energy in the state, but I would have to hope part of that balance is returning to the best practices suggested by UMCES and not the onerous restrictions which would effectively ban fracking in the state.

Another stroke of luck (and it’s not Irish)

March 17, 2014 · Posted in Business and industry · Comments Off 

Because of the snow, it’s sort of a slow news day today. So I was looking for something interesting to comment on and found out that the practice of fracking can now retire, as it’s reached the ripe old age of 65. From Energy Tomorrow:

We celebrate the first commercial use of hydraulic fracturing 65 years ago on March 17, 1949, conducted by Halliburton in Stephens County, Okla., and Archer County, Texas. But the roots of the fracking story stretch back to the 1860s. In a 2010 article for the Society of Petroleum Engineers’ Journal of Petroleum Technology (JPT), NSI Technologies’ Carl Montgomery and Michael Smith write that energy pioneers experimented with oil well “shooting” that would “rubblize” oil-bearing rock to increase flows. Various methodologies were used to fracture rock formations over the years until Stanolind Oil, a division of Standard Oil of Indiana, conducted the first experimental “hydrafrac” in 1947 in Kansas. It involved pumping fluid carrying “propping agents” at high pressure into a well to create fractures that could be held open to free oil and natural gas in the rock.

People have freaked out over this technology over the last half-decade since the oil and natural gas industry embraced it to bring new life to old fields as well as other places where energy exploration was previously deemed economically unworthy due to quantities thought not to be worth the trouble. Yet the root technology was decades old; the confluence of evolving technique with the increase in oil prices to a point where fracking could be cost-effective gave the impetus to the industry. Truthfully, when oil was $15 a barrel and being pumped like crazy in the Middle East a couple decades ago, there wasn’t much demand for domestic supplies.

On the other hand, natural gas that ran about $4 per thousand cubic feet in 1981 only costs about $9 per thousand cubic feet now (although seasonal fluctuations are more severe.) Since that’s not far off the increased cost of living from then to now, this technology has enabled the natural gas market to hold serve despite increased demand from electricity generation, which receives a much better rate than the residential figures I cited. Granted, the recent surge began around the time when natural gas for residential use hit its all-time peak of $20.77 per thousand cubic feet in the summer of 2008, but opening up export markets can make additional fields profitable while stabilizing prices.

Now there is an element of truth to the argument naysayers in the manufacturing and chemical industries make about the potential that exporting LNG to other countries would increase prices here, although I doubt they would triple as claimed. But let’s explore once again the alternative scenario, one which I alluded to a couple paragraphs back.

Oil companies were laying people off and shutting down wells when prices were $15 to $20 a barrel because there was no way to run many of the old wells profitably. Some seem to forget that entrepreneurs go into business to make a profit, so they can make a living. Just like Staples is lopping off a couple hundred of its lagging retail performers, these companies idled wells which were losing money. In one respect it was great because gasoline went back under a dollar per gallon (remember that?) but that was a short-lived phenomenon which ended about the time of the first Gulf War – meanwhile, it took several more years for the oil industry to recover. Like it or not, that’s a vital cog of the American economy just like automakers and other manufacturers, who can use the incentive of energy which is reliable and still relatively inexpensive to create jobs.

So the ideal this time would be to maintain a fairly steady and predictable price while expanding the supply and maintaining those wells which are in operation so they stay economically viable. But if it weren’t for fracking, we would be in the situation of having to import a greater and greater share of our energy, a policy which would quickly drive up prices and perhaps exacerbate our national economic slowdown to a recessionary point once again. A modest increase in energy prices would be a small price to pay for the creation of thousands of jobs with private-sector investment – and who knows, maybe the predicted price increase won’t come. But I’ll bet the jobs would.

Denying the market

To be honest, I’m not sure if I was sent this to provoke a comment or if I just happen to be on a list that gubernatorial candidate Heather Mizeur doesn’t use all that often. I think most observers know I have an interest in energy issues, and this definitely falls into one of them. You just have to ask yourself why Mizeur counts herself among the Democrats are so insistent on denying the opportunity for shovel-ready jobs and investment – I thought that was what they were all about.

First of all, this is what Mizeur had to say about the proposed Cove Point LNG export facility.

(Yesterday), Delegate Heather Mizeur (D-Montgomery), candidate for governor, called on Governor O’Malley to join her in opposition to the Dominion Resources liquefied natural gas (LNG) export facility at Cove Point in Calvert County. She made the announcement during a speech at the Stop Cove Point Rally in downtown Baltimore City earlier today.

“I am calling on Gov. O’Malley to take a stand with us today to reject Cove Point,” Mizeur told the audience. “You cannot leave a legacy on addressing climate change and be silent on Cove Point. It’s time for Gov. O’Malley to break the silence and join us in saying no to Cove Point.”

The rally, which was attended by 500 people, was organized by climate, health and anti-fracking activists from across the state, and was one of the largest environmental rallies ever in Baltimore City. It came as the state Public Service Commission begins official hearings on the project.

Mizeur is currently the only gubernatorial candidate to state her opposition to the project. When she announced her opposition in December, both Lieutenant Governor Brown and Attorney General Gansler – the two other Democratic candidates in the race for governor – expressed a desire to build the project without environmental damage, but failed to explain how such a plan would be possible.

Dominion Resources, a Virginia-based energy company, is pursuing the construction of a $3.8 billion facility to serve as a collection point for fracked natural gas from throughout the Mid-Atlantic region, where cargo tankers would then ship it throughout the world.

But the Cove Point facility would release 3.3 million tons of carbon dioxide and other harmful greenhouse gases into the air annually, making it a serious setback to achieving the state’s goals on fighting climate change, including a plan for a 25% reduction of greenhouse gases by 2020.

Mizeur has also called on Dominion Resources to invest $3.8 billion – the construction cost of the proposed facility – in the state’s renewable energy sector. According to the U.S. Department of Energy, clean energy investments create more permanent jobs than exporting fracked gas.

Obviously Mizeur is an adherent to the religion of manmade climate change, a belief system which fails to address why none of the climate models have predicted the lack of warming this century. The fact that they managed to get just 500 people to a climate change rally shows how small the cadre of believers really is – a good Second Amendment or TEA Party rally can rustle up similar numbers without really trying. If this is “one of the largest environmental protests in state history” then we really are letting a tiny minority dictate policy.

But let’s say these guys are really serious – I suppose living in a state foolish enough to believe that artificially limiting its carbon emissions will have an effect on our overall global climate will do that to you. Even if the point source of 3.3 million tons is correct, it doesn’t take into account the reduction in emissions at destination points abroad. Natural gas is cleaner burning than coal, and until we figured out that fracking was a way to supercharge the moribund domestic natural gas market it was a fossil fuel environmentalists weren’t uncomfortable with. To show how the market has changed, the Cove Point facility was originally built in the 1970s as an import facility because the domestic natural gas market was thought to be in an irreversible decline.

On the other hand, the point source investment of $3.8 billion will have a positive effect on the regional and state economies. Last year, in announcing its filing, Dominion claimed the project will create up to 4,000 jobs during the construction phase and perhaps over 14,000 jobs overall, not to mention billions in royalty payments. Because most of the supply would come from regional producers, the entire mid-Atlantic area would benefit (except Maryland and New York, which currently have bans on fracking.) The facility would also provide a needed boost to our export tally to address a persistent American trade deficit, as the LNG is already contracted out to distributors in Japan and India.

Finally, Mizeur complains that the $3.8 billion Dominion is willing to invest in the project could be better spent in the renewable energy sector. Does the name “Solyndra” ring a bell? Despite its best efforts to create a market for offshore wind, companies aren’t willing to make the investment in that area – remember Bluewater Wind? In the area of solar energy, it took billions in taxpayer-guaranteed loans – and mandated renewable energy portfolios such as the one Maryland is saddled with – to get that market off the ground, yet it still produces but a tiny fraction of our electricity needs at a cost several times the going rate for electricity produced from coal or natural gas.

And it’s funny that Mizeur worries about the cost of natural gas going up due to exports, but had no problem with raising the gasoline tax on a perpetual basis. So much for supporting hard-working Marylanders.

So the choices are either zero or $3.8 billion; that’s reality. We can take advantage of proven resources we already have or listen to alarmists whose real goal is to foster dependence on government under the guise of saving the planet. It’s just too bad our little sandbar is energy-poor, unless you deign to call chicken manure an energy gold mine, and even the proponents concede its not as efficient as natural gas.

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