I still like picking on Joe Biden. But over the last month or so I’ve collected a lot of divergent information on policy suggestions, each of which promses to be the magic elixir to get our economy moving in the right direction again.
I think the key to this lies in two areas: manufacturing and energy. In that respect, I keep a lot of information handy to discuss in this space, with a group called the Alliance for American Manufacturing (AAM) generally representing the left-of-center, pro-union side. And while their main goal seems to be increasing the coffers of Big Labor, luckily most workers still have free will – ask the employees at the Tennessee Volkswagen plant about how much effort from the UAW can be rebuffed in a simple up-or-down vote.
Currency manipulation is one area in which the AAM has been focusing. A study they cite, by the liberal Economic Policy Institute (EPI), makes the case that:
Many of the new jobs (if the subject is addressed) would be in manufacturing, a sector devastated by rising trade deficits over the past 15 years. Rising trade deficits are to blame for most of the 5.7 million U.S. manufacturing jobs (nearly a third of manufacturing employment) lost since April 1998. Although half a million manufacturing jobs have been added since 2009, a full manufacturing recovery requires greatly increasing exports, which support domestic job creation, relative to imports, which eliminate domestic jobs.
Personally I disagree with the premise that rising trade deficits can be blamed for the job losses; instead, I think an absurdly high corporate tax rate and onerous regulations have contributed more to chasing away American manufacturing. (While many simply blame “outsourcing” for the problem, fewer understand the dynamics which led to the outsourcing.) Yet there is merit to the idea that all sides should be competing on as level of a playing field as possible when it comes to the means of exchange, and China is one of the worst offenders. (And why not? They are communists, after all, and you can’t trust communists any farther than you can throw them.)
Two of EPI’s findings are quite interesting: first, should the EPI model come to its fruition, the oil and gas industry would be the hardest hit, and second, Maryland would be among the states least impacted, with barely a 1% rise in employment.
Yet AAM president Scott Paul is quick to blame Barack Obama:
President Obama promised to hold China accountable. He hasn’t. The White House last month said President Obama would use his pen and his phone to make progress on economic issues. He could start today by signing an order to designate China as a currency manipulator. Then, he could call the Chinese leadership to demand an end to that practice, and secure an agreement on a plan to cut this deficit in half over the next three years.
I sort of wish Mr. Paul would also figure out the other problems, but he is correct to be concerned about our Chinese policy. Job creation has become more important than deficit reduction in the minds of Americans, both in the AAM poll I cited above and a Pew Research Poll cited by the American Petroleum Institute (API).
And the industry which benefits from API’s efforts represents another piece of the puzzle which we can take advantage of: our abundant energy supplies. While America uses 26 trillion cubic feet of natural gas per year, there is the possibility of as much as 10,000 trillion cubic feet within our land mass. That’s nearly 4 centuries worth, so I don’t think we will run out anytime soon. (Estimates have continued on an upward path as new technology makes previously unworkable plays economically viable.) As I keep saying, it’s too bad we don’t have a nice shale play under our little sandbar. Not only that, but the infrastructure we will need to take advantage of all that (and help curtail spot shortages like the ones we’re having this chilly winter) would be a guaranteed job creator – one which derives its basis from the private sector. New pipelines aren’t just for export facilities like Cove Point, but could benefit this area and perhaps bring more natural gas service to our region.
Unfortunately, Maryland isn’t poised to take advatange of either the manufacturing or energy booms at present, thanks to back-breaking economic policy and a foolhardy go-slow approach on fracking. It takes a strident opponent of the latter to suggest yet another approach which will do damage to the former, but gubernatorial candidate Heather Mizeur accomplishes this with the tired old combined reporting proposal. Hers comes with a twist, though, which she announced last Monday:
In the morning, Mizeur will host several Maryland business owners for a Small Business Roundtable. They will discuss her legislation to provide tax relief to small business owners, as well as other highlights from the campaign’s ten-point plan for jobs and the economy, which was released last fall. She will also hear from the business owners on a range of other concerns.
At 1:00 pm, several business owners will join Mizeur in front of Ways and Means to testify on behalf of legislation that would enact combined reporting and distribute the estimated $197 million to small businesses for personal property tax rebates.
It’s the liberal way of picking winners and losers. And according to a 2008 study by the Council on State Taxation – admittedly, an opponent of the practice:
Combined reporting has uncertain effects on a state’s revenues, making it very difficult to predict the revenue effect of adopting combined reporting.
Even proponents don’t address that aspect, instead emphasizing how it would “level the playing field between multistate corporations and locally based companies.” But since Mizeur’s idea is one which would subsidize some businesses under a certain employment plateau, the uncertainty would likely be just another reason to avoid Maryland.
On the other hand, a Republican like Larry Hogan at least gets businesses together to discuss what they really want. Granted, once he gets them together he speaks in broad concepts rather than a more specific plan, but at least he’s listening to the right people. None of the others in the GOP field have specific plans, either, although Ron George probably comes the closest.
One has to ask what states which are succeeding economically are doing to attract new business. The state with the lowest unemployment rate, North Dakota, is prospering – more like crushing the rest of the field – on account of abundant energy resources, and perhaps that success is pulling surrounding states up with it. Its three neighbors (Montana, South Dakota, and Minnesota) all rest within the top 13 when it comes to low unemployment rates and other regional states like second-place Nebraska, Iowa, Wyoming, and Kansas lie within the top 10. Although the top five are right-to-work states, half the bottom 10 are as well. Nor can tax climate be seen as a dominating factor since the top 10 in unemployment vary widely in that category: Wyoming, South Dakota, Utah, and Montana are indeed excellent in that aspect, but North Dakota is decidedly more pedestrian and Iowa, Vermont, and Minnesota are among the worst.
But Maryland has the tendency to depend too much on the federal government as an economic driver. This presents a problem because bureaucrats don’t really produce anything – they skim off the top of others’ labor but don’t add value. Certainly it’s great for those who live around the Beltway, and it’s telling that all three of the Democratic candidates have a connection to the two Maryland counties which border the District of Columbia while none of the Republicans save Larry Hogan do.
In order to create jobs, I think the state needs to diversify its economy, weaning itself off the government teat and encouraging manufacturing and energy exploration. Meanwhile, there’s also a need to rightsize regulation and restore a balance between development and Chesapeake Bay cleanup – specifically by placing a five-year moratorium on new environmental restrictions while cleaning up the sediment behind the Conowingo Dam. Let’s give that which we’ve already done a chance to work and other states a chance to catch up.
The best route out of government dependence is a job. Unfortunately, when the aim of the dominant political party in the state is one of creating as many dependents as possible, a lot of good entrepreneurs will be shown the door. It’s time to welcome them in with open arms.
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.
My friends at API alerted me to yet another study touting the benefits of offshore drilling, but this one was more localized because they discuss energy exploration in the heretofore moribund Atlantic Outer Continental Shelf (OCS). This rather lengthy research, sponsored by API and the National Ocean Industries Association, showed that Maryland and Delaware could expect an economic bump of over 12,000 jobs and nearly $1 billion over the cumulative 18-year period (2017-2035) covered in the report. It obviously assumes the case that exploration is opened up at the first opportunity, which will arrive in 2017.
Considering state employment in Maryland alone is about 3 million, with over 212,000 unemployed, these numbers may seem like a drop in the bucket. (Delaware adds about 430,000 and 30,000 to the respective totals.) But it’s worth mentioning that these jobs would be created by private investment, so they’re a net gain to the economy as opposed to simple redistribution of confiscated wealth which typifies government jobs, even those in infrastructure like roads and bridges.
And if there’s one thing I have noticed in the past few years about projections for the amount of oil to be found in a particular place, it’s that the initial estimates are far too low. This is more likely in the Atlantic region, which hasn’t been properly explored with the newest technology yet because there was no prospect for securing leases.
While there was a period where Atlantic leases were granted, no area has been leased out in the last thirty years. Furthermore, the seismic information is also three decades old, which is an eternity in this day and age of computer mapping – that was an era where the conventional wisdom was that many portions of America were played out insofar as oil was concerned. But recent technological advances and methods of exploration have determined there’s still a lot of life in these fields. The same may well be true for the Atlantic OCS, which could have double or triple the expected capacity. (The model used in the study essentially doubles the government’s most recent estimate, but that calculation is based on fields in areas where modeling was more constant than it was in the Atlantic OCS. So it wouldn’t be out of the question to see yet another doubling.)
Regardless, it’s more ammunition for the argument that allowing more energy exploration would be a job creator, with the added benefit of energy self-sufficiency. Drill, baby, drill!
Today I work into the fourth part of my series, on energy policy.
It’s clear to me that if the state wants to become more successful at improving the standard of living of its citizens, we have to find ways to make energy more accessible and less expensive for the average consumer. That’s the starting point for my critique on energy policy.
There are many points the Republican candidates seem to agree on, which is to be expected.
David Craig: Craig said it is also time to stop studying fracking and enable natural gas extraction to take place in Western Maryland in an environmentally-responsible manner. (press release, October 4, 2013)
Harford County Executive David R. Craig, who also is seeking the Republican nomination, said estimates show fracking in Garrett and Allegany counties will bring as many as 14,000 jobs.
If the state continues to study the issue, the people of Western Maryland will suffer as business go to frack in neighboring Pennsylvania, Ohio and West Virginia, he said. (Gazette, September 19, 2013)
Ron George: Make Energy More Affordable, Available, and Less Dependent on unstable governments half way around the world. This includes developing natural gas resources and using clean coal for our own needs. (campaign site)
“I have to let you know that I’ve really struggled with the issue and studied the issue, I’ve listened to the fears and looked at the science,” he said. “And I’ve come down on the side of natural gas drilling for ourselves, for Maryland’s use.”
Fracking now will help the state with its energy costs and diversify its alternative energy production, said George, a GOP candidate for governor.
“We have to have other alternatives that are clean,” he said. (Gazette, September 19, 2013)
“Before we go building 40 of these [wind turbines] offshore, let’s do this step by step,” said Del. Ron George, R-Anne Arundel. He offered an amendment to build one wind turbine to study the viability of offshore wind in Maryland. He said the Virginia legislature approved a similar plan on Wednesday.
“It will test the economics of large scale offshore wind projects, it will test the mechanics of construction and issues related to offshore wind projects, and it will study the ability of offshore wind projects to withstand weather conditions” 11 miles off the coast of Ocean City.
“It is really doing the next step, so we don’t go wasting money, and we make sure we do it right,” George said. (Maryland Reporter, March 29, 2012)
Charles Lollar: I support development of Maryland’s Marchellus shale natural gas reserves. (campaign website, “Natural Resources”)
Demand that public utilities be held accountable to their customers. (campaign website, “Accountability”)
In order to reduce (energy prices) Lollar wants to remove subsidies and allow all forms of energy to compete on their merits. This includes allowing fracking in Maryland’s Marcellus shale so that natural gas can lower the state’s energy costs. He sees O’Malley’s subsidies for wind energy as a way of picking winners and losers in the market, and opposes to the handouts. (Real Clear Markets, September 3, 2013)
Lollar said the state could quickly come out of its perennial deficit if it allowed fracking in Maryland. Lollar emphasized the practice would have to be well regulated, but not so much so as to stop businesses from existing. (SoMDNews, November 1, 2013)
“We absolutely need to take advantage of that resource, not just as another energy source but to put people to work,” Charles Lollar, Republican candidate for governor, said of natural gas. (Gazette, September 19, 2013)
I think they [Pepco] have an unfair relationship advantage. I’m not prepared to blame the Democratic party but I am prepared to blame the individual people that have made the system what it is. I do believe that when you have an unbalanced system that heavily favors one party over another, this is the kind of response that you get. There’s a lot of strong-arming. There are strong and forceful relationships that are literally causing people to do things that in their right mind, they would not do.
The power held at the highest levels of our state is incredible and it’s crushing good elected officials and appointed commissioners that want to do the right thing. Let’s put the blame where it needs to be. This idea of charging someone a fee before they get appropriate services is wrong no matter what party you’re from. (Bethesda Now, November 7, 2013)
Insofar as energy policy goes, our friends across the aisle greet the issue with reactions ranging from radio silence (Anthony Brown) to a belief that poultry waste can be a “responsible investment” (Doug Gansler) to a pedal-to-the-metal emphasis on so-called “clean energy” and outright hostility to fracking (Heather Mizeur). None of these proposals meet the twin tests of reliability and market worthiness that coal, oil, and natural gas do. In particular, one has to ponder the viability of poultry waste as a fuel after the Waterkeeper Alliance picked on one family for months in an losing effort to make an example of them, a move one local environmental advocate said “definitely sets us back.”
So what I believe had “definitely set us back” is the de facto moratorium on fracking Maryland has had in effect for the last few years, as the state continues to twiddle its thumbs and study the issue at length in “setting an extremely high bar for industry.” Meanwhile, Pennsylvania has seemed to find a reasonable balance between environment and energy; thus natural gas exploration and extraction is creating jobs and revenue for those counties fortunate enough to sit atop the Marcellus Shale formation.
I think David Craig gets this part of the picture, but there’s a lot more to energy policy than just fracking. It would be good to know where he stands on other market-based reforms like repealing the wind energy bill and renewable energy portfolio – as you’ll see in a future segment David has his eye on restoring a balance between economy and environment. So I give him 4.5 of 8 points.
Ron George took a while to come down on the side of fracking, but also seems to foresee more of an “all-of-the-above” approach. Included in that was advocating a single-unit pilot project for offshore wind, despite the fact the bill he attempted unsuccessfully to amend, if passed, had a fiscal note which warned “State expenditures…increase minimally beginning in FY 2013 and significantly beginning in FY 2017 due to higher electricity prices.” Perhaps his view on this has evolved, however, as he did not offer the same amendment in 2013 and voted against O’Malley’s bill. As you’ll see below, he should get credit for weighing evidence.
But it’s difficult to reconcile George’s stance with his previous votes on the subject. Maybe he’s reached a level of satisfaction with the state’s regulations and if so he’s a little more for red tape than my taste would dictate; for that answer I need more guidance. At this point I’ll score him as a solid 4 of 8 points.
Charles Lollar stands with the rest of the Republicans on fracking, which is good. He also makes it sound like O’Malley’s wind folly would be terminated, which is great. But there’s one piece of the puzzle which troubles me greatly.
It’s noted in the Bethesda Now story, where Lollar was quoted as saying “charging someone a fee before they get appropriate services is wrong,” that the forum was intentionally held without a PEPCO representative present. Had Lollar studied the issue more carefully he would have known this rate increase was based on an executive order from Governor O’Malley, who touted the increase as “hardening” the electric grid. The idea is to accelerate the process of preparing the grid for major weather events, which may have been the point brought out by a PEPCO spokesperson had one been invited to the event.
One thing about being an elected official is that you generally hear all sides of the story as part of your duties in office. On the other hand, coming in without that experience means you have to work at the issue. On his front page, Charles claims his goal is to ”bring together people of different political beliefs, talents and backgrounds to develop solutions to difficult problems.” Yet he attended a forum where a party to a dispute is sandbagged, and that’s disappointing.
It’s populism to pick on a utility without hearing their side of the story. So my question is whether “well regulated” for fracking will be determined by the hype or the facts. Based on this concern I can only give Charles 2.5 out of 8 points at this time.
The next portion is something I would anticipate the candidates do quite well in: Second Amendment rights. I’m hoping to follow that up with a discussion of what the candidates would do about Obamacare, and for that answer I had to ask directly.
It’s also worth pointing out that this process would evolve. In his answer to my Obamacare question, Ron George elaborated a little on education so I believe I should add that portion in. It wouldn’t surprise me as the campaign rolls along that these pieces might be revised once or twice along the way; you should expect no less.
As you all know I have an interest in the energy field and a disdain for the unproven – so I’m no big fan of technology that’s not reliable 24/7/365. While renewable energy has its uses in limited applications, such as the solar panels on one’s roof or the windmill which augments the rural homestead, all of these sources need a backup for when we endure a week’s worth of cloudy days or still weather. So I have a bias toward the tried-and-true energy sources of coal, oil, and natural gas.
Having said that, it amuses me when I see the potential for infighting among the environmentalist crowd as we could have a battle royale between the animal rights crowd and the renewable energy set – the reason: a study published in the journal BioScience and gleefully critiqued by Steven Hayward at Powerline estimates that 600,000 or more bats are killed each year by wind turbines – a much higher toll than previously thought. And as Michael Todd, writing at Pacific Standard, explains, it’s not for the reason you might think:
Given that wind turbines are basically a collection of whirring blades, you might assume that the bats found dead have been sliced and diced. You might also wonder how an animal that uses radar to find a single mosquito in the dark could fail to sense a monstrous wind turbine. The University of Calgary’s Erin Baerwald explained this to Discovery News in 2008: “When people were first starting to talk about the issue, it was ‘bats running into the turbine blades.’ We always said, ‘No, bats don’t run into things.’ Bats can detect and avoid all kinds of structures,” and are even better at detecting stuff that’s moving. No, they’re exploding. As I learned last year, “Baerwald and her colleagues discovered that bats’ ‘large, pliable lungs’ blow up from change in air pressure created by moving blades. Up the 90 percent of the dead bats they examined showed the internal bleeding consistent with their argument. Birds, by the way, have different kinds of lungs so their deaths are from the more predictable blunt-force trauma.”
Of course, bats are very creepy creatures and tend to be a nuisance if they get into your house. But they have one tremendously useful purpose: keeping the mosquito population at bay. A commentator on Hayward’s post writes about watching bats fly around at dusk and I can vouch for the fact that it is interesting to watch them maneuver around in the fading light of a summer evening, gorging themselves on those pesky bugs.
And the problem seems to be worst in the Appalachian part of the country, which includes the western part of Maryland. While it’s not prime territory for efficient windmills, that area is probably the most desirable in the state for the purpose.
Yet there is another energy source where the two westernmost Maryland counties are prime territory, and that’s the Marcellus Shale formation where natural gas is plentiful deep underground – and by deep I mean hundreds and hundreds of feet below the aquifers. I point this out because portions of New York state endure some of the same effects as their Marcellus cousins in Maryland; both are primarily rural areas which can use an economic shot in the arm. As is pointed out in a Wall Street Journal editorial from last week by Fred Siegel, those areas of southern New York along the Pennsylvania border suffer from the same faraway NIMBYism that the western panhandle of Maryland has to deal with – those who live nowhere near the area think they know best.
But unlike Maryland’s Martin O’Malley, whose sole response has been to study the subject to death, his potential Democratic presidential rival from New York, Governor Andrew Cuomo, at least was willing to allow some limited fracking in that specific region – that is, until he was told by the environmental extremists, “we’ll cream you if you open New York state to fracking.” While neither the western edge of Maryland nor that five-county area of southern New York along the Pennsylvania border (from Steuben County on the west to Broome County on the east and including adjacent Chenango County) has the worst unemployment numbers in their respective states of Maryland or New York, the fact is they can do better.
And it’s not just the energy companies booming – this story by Barbara Miller in southwest Pennsylvania’s Observer-Reporter newspaper (h/t Energy Tomorrow) points out the financial gains in just two of the state’s counties. Quoted in the story was Washington County Commission Chairman Larry Maggi:
I don’t want to use the word envious, but (other counties are) struggling and they do not have this resource to help them balance their budgets.
While amounts from $6 million to $18 million are drops in the bucket for a state budget, they can potentially be huge for some of the rural counties affected. Energy companies are accustomed to paying a fair royalty fee to local governments, knowing the market will support that toll while allowing a reasonable profit.
So, as you’ll see in the next week or so when my candidate dossier on energy is complete, there’s a big difference in stance between Maryland Democrats and Republicans on the fracking issue. Apparently most Democrats are happy with blowing up bats and chopping up birds, but Republicans want to create jobs.
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.
I ran across an interesting piece of polling thanks to the Energy Tomorrow blog. Their American Petroleum Institute parent group commissioned a Harris Poll of likely voters in four states – Florida, South Carolina, North Carolina, and Virginia – and asked them a series of questions to gauge their support for offshore drilling. As I would expect, the topline numbers showing support for the practice are quite solid, ranging from 64% in Florida to 77% in South Carolina. (Virginia weighed in at 67% and North Carolina at 65%, so it worked out to roughly 2/3 overall.)
But before you assume this is going to be another shill for offshore drilling (which I indeed support) I wanted to point out a glaring flaw in the poll methodology. For example, read through the Virginia polling data and see if you can figure out what’s missing. I’ll give you a second.
The first piece of the puzzle I would have liked to see would be a breakdown of support in coastal areas vs. inland. Using Virginia as an example, it would be nice to know how the question did in the 757 area code, which covers the Norfolk area and the Eastern Shore of Virginia. I would bet that support in that particular area was closer to 50-50, if not slightly negative.
But the key omission was the question: “Would you support offshore drilling off the coastline of your state?” The API’s point is that much of our coastline is off-limits to drilling because of shortsighted policies which ignore the overall safety record of the industry as well as the “peak oil” hysteria helped along by those same environmentalists who wouldn’t mind putting aquatic birds at risk with offshore wind turbines. But their point would have been buttressed even better if they had a clear majority of Virginians (or any other affected state) indicate that drilling off their coastline was an acceptable practice.
While these particular states were probably selected due to the length of their coastline, I wonder how Maryland and Delaware would feel with the same question posed to them. Granted, between the two there’s just 59 miles of Atlantic coastline but they indeed have oceanfront within both states so they could be hosting oil exploration and extraction in their waters someday. My guess is that they would still fall in the 60 percent range as far as drilling support, but only run 30-35% for drilling off their coastline. (A large part of that might be because so much of it is state- or federally-controlled parkland.)
Certainly it’s reassuring that offshore drilling still enjoys support after all its bad press over the last half-decade, but I’m not convinced the impetus is there yet for much motion on the issue. Fortunately (or unfortunately), the question is pretty much moot until 2017 at the earliest so we have time to create the necessary shift in public perception.
Over the last couple days, a segment of the Maryland Republican Party is scratching its head over the absence of gubernatorial candidate Charles Lollar from several high-profile events: last month’s Andy Harris First District Bull Roast, the Conservative Victory PAC Ken Cuccinelli fundraiser (which was sponsored by several Maryland politicians), the Prince George’s County Lincoln Day Dinner with Lt. Col. Allen West, and most recently the state party’s Oktoberfest gathering in Timonium Saturday night. The conventional wisdom argument is that these were lost opportunities to impress the party brass.
But this may also presuppose Lollar wasn’t out meeting with “regular Joe” voters, and some say a lot of these gatherings would be time better spent knocking on doors or making phone calls. So which is it? I don’t know, but my feeling is that we all need to get back to basics and begin to compare just where each of the three major declared candidates stand on important issues facing the state.
A year and a half before the 2012 Presidential election, I began a process of grading the candidates in the race at the time on a number of issues. I think it’s time to repeat the process, with some different parameters because the issues aren’t always congruent between state and national elections – for example, I don’t have to worry about trade or the Long War but I do have concerns about agricultural issues and necessary changes to the state political system, meanwhile, some issues grow or contract in importance because of recent state developments. But I like the 100-point system so I will adapt it to suit.
So the 2014 monoblogue endorsement will be based on the following formula:
- Election/campaign finance reform (3 points)
- Illegal immigration (5 points)
- Dealing with Obamacare (7 points)
- Energy policy (8 points)
- Education (9 points)
- Second Amendment (11 points)
- War on Rural Maryland (12 points)
- Role of government (13 points)
- Job creation and transportation (14 points)
- Fiscal conservatism/taxation (15 points)
Once I add or subtract three points for various intangibles of my choosing, I’ll come up with the candidate who I think will best serve Maryland. Granted, my endorsement will only be worth the pixels they’re darkening but at least some thought will be put into why this candidate is the best one for Maryland. (Keep in mind that any of these three would be vastly superior to Anthony Brown, Doug Gansler, Heather Mizeur, or anyone else Democrats put up.) Otherwise, I come in with no preconceived notions with the exception that the other declared GOP candidates in the race don’t have the campaign or the presence to achieve any more than a tiny percentage of the vote so they’re not included; also, this is subject to update if/when Larry Hogan enters the race.
So now that you have the basic concepts, how about some specifics of what I’m getting at for each point? These are questions I may be able to find answers for within the candidates’ own websites, but it’s more likely I need further guidance. I have had the chance to hear all three declared candidates speak on at least two occasions apiece so I might have a decent idea where they’ll go, but it never hurts to ask. With that, here goes:
- Election/campaign finance reform: Will you aggressively pursue the redistricting revision case in court; if we succeed can we have 141 single-member districts? Where do you stand on current reporting requirements: too tight, too loose, or just right? What about getting after local boards of elections and telling them to clean up their voter rolls?
- Illegal immigration: Will you take the 287 (g) program used in Frederick County statewide? How about rescinding recent changes to drivers’ license laws in Maryland? And what about in-state tuition – do you revisit this issue? What about withholding a portion of state funds from sanctuary cities? Cooperation with the federal E-Verify program? What about policies allowing status checks such as those in Arizona?
- Dealing with Obamacare: Do we eliminate the state exchange? Would you pursue a waiver for the state if one becomes available? Are you in favor of defunding or letting the law go into effect and watching it collapse? What steps would you take to encourage more insurance competition in the state? What about returning Medicaid limits to minimum levels?
- Energy policy: When can we expect fracking to begin in Western Maryland? And what will you do with the renewable portfolio standard? Will you move to re-regulate Maryland’s electrical utilities? Can Martin O’Malley’s offshore wind scheme work? What about offshore oil drilling – is that an option for you? Will you maintain Maryland’s membership in the Regional Greenhouse Gas Initiative?
- Education: Will Common Core be the law of the land in Maryland, or will you eschew Race to the Top funding? How about school choice, or money following the child regardless of school? How will you protect homeschooling? Instill more local control? What about promoting elected school boards in those counties still without them? Emphasis on vocational education? How do you message against the certain opposition of the teachers’ unions?
- Second Amendment: Will you work to repeal the so-called Firearms Safety Act? What about concealed carry, and making licenses easier to get? If the federal government gets too onerous, will you fight them? What’s your interpretation of the Second Amendment?
- War on Rural Maryland: Can we count on you to repeal the Septic Bill and tier mapping? Will nitrogen-removal systems still be required? Will the Hudson family be made whole by the state, since it was with the state’s assistance they were legally harassed? How will you assist the poultry industry in the state and keep them here? What about cleaning up behind the Conowingo Dam and fighting the mandated burden on rural counties, as well as the rain tax on urban ones?
- Role of Government: Where do you stand on a regulation moratorium, and would you veto new mandates passed through the General Assembly? Are there any agencies you’d work to abolish? What about divestiture of surplus state land? Is a consolidation of primary state government functions in Annapolis on your agenda? Can we count on you to repeal as many laws as you create? Where do you stand on public-private partnerships? Do you support citizen-based petition to referendum for new laws (as opposed to those passed by the General Assembly)? What about the right to recall elected officials?
- Job creation and transportation: We know you’ll lower the corporate tax rate – what about eliminating it entirely? What about reform of unemployment insurance? What other steps will you take to make it easier to do business in Maryland? As far as infrastructure goes, will you kill the Red Line and Purple Line in favor of more useful means for transporting goods, such as expanding the interstate network in Maryland and surrounding states? Will you hold the line on tolls? What about another Bay crossing – where would you put it? What non-tax code incentives would you offer for rural area job creation? What policies would you adopt from other states?
- Fiscal conservatism/taxation: Can Marylanders expect a flatter income tax system? How about eliminating it entirely as some states have done? Or would you prefer a sales tax decrease or elimination? Would you agree to a TABOR, or at least a budget utilizing those principles? Can we get per-capita spending closer to the national norm? And how will you deal with the outcry of the press, such as the old “tax cuts for the rich” saw?
- Intangibles: Positions on abortion, expansion of gambling and/or return to legislative control (as opposed to Constitutional amendment), protection for religious objections to gay marriage, your perception of the TEA Party and pro-liberty movement, and so forth. Mainly social issues.
Yes, that’s a hell of a lot. But somewhere, someone else is asking some of the same questions and if I’m going to make a decision I want it to be informed. And while I’d like to make these issue posts on about a weekly basis, that’s probably a quite aggressive timetable.
But I’m sure that a) people from the respective campaigns read my website, and b) they will bend over backwards for new media. (At least that’s what I’m counting on.) And it’s likely they haven’t even pondered some of these queries, so I don’t expect miracles – but I’ll take them anyhow.
Yet I’m sure that some high-dollar Beltway Republican consultant will tell their candidate that he’d be nuts to get into specifics this far out because all it would provide is fodder for the Democrats and the press (but I repeat myself) to harp upon as the campaign heats up. News flash: they will do that anyway, even if they have to make stuff up (e.g. “a fee is a tax.”) So get it out now and I’ll take those clowns on myself, even as I point out that it’s not like I don’t have a few allies in this fight.
Just let me know you have the balls to stand for something, okay?
A sideline of mine – besides the frequent discussions of Maryland politics I write – is discussing energy issues. I didn’t seek out that aspect of the universe to write on, but I find it fascinating and quite important at the same time.
Today was a monumental day in Congress for the wind industry – yes, wind blows every day but those who profit from collecting the energy created and converting it (albeit somewhat clumsily and inefficiently) to electricity had their day in Congress today. Their goal: maintaining their cherished production tax credit at a hearing of the Oversight and Government Reform Committee.
Yet a large group of conservative and pro-liberty organizations are urging Congress to dump this credit, with the Competitive Enterprise Institute a leading voice. They co-wrote a letter last month calling on Congress to dump the subsidy, and followed up with further guidance today from CEI’s Myron Ebell:
Congress should not renew the Wind Production Tax Credit for another year and thereby upset the planned phase-out that was passed just last year.
The wind energy lobbyists spend more time seeking handouts than in trying to make their product competitive. The tax credit amounts to the worst kind of cronyism, costing taxpayers billions, foisting mandates on states and driving up electricity rates for consumers and manufacturers.
Over the course of the last several years, efforts in both Maryland and Delaware to harness the wind have fizzled out, most notably the lockdown of the much-ballyhooed Bluewater Wind project. And while Maryland is attempting to jumpstart that market with a public subsidy effective this fiscal year, it’s questionable whether anyone will attempt to build the turbines, even with the set-aside put in place.
Unfortunately, while the wind blows for free, the places where it blows the best tend to be difficult locations for infrastructure. Moreover, as we all know, those hot, humid days during the summer when we could use the cooling breeze rarely have enough wind to blow a scrap of paper around, let alone turn a turbine. It’s one of many good points made by Dr. Robert J. Michaels, a professor of economics at Cal State – Fullerton and Senior Fellow at the Institute for Energy Research.
Surely some will counter with the fact that fossil fuel industries have their own set of tax benefits and these subsidies for wind energy are simply a matter of leveling the playing field. But consider the number of jobs in these fossil fuel industries everywhere in the process – everything from working at the point of extraction to transport to conversion into electricity. In many cases, these jobs are among the most lucrative in their respective fields despite the fact the raw material is relatively cheap compared to the cost of wind energy.
It’s also worth pointing out that the “market” for wind energy is a relatively artificial one thanks to those states which have a carveout for a renewable energy portfolio, including Maryland. Generally, since neither the cost-effectiveness nor the necessary infrastructure is in place, the laws simply serve as another form of taxation of already-beleaguered utility companies because non-compliance carries a monetary cost. On the other hand, no one is saying that any proportion of our electricity has to come from coal or natural gas nor is it necessary because the market price dictates the direction utilities prefer to go.
With any luck, the production tax credits will become a thing of the past at the end of the year. Like zombies, they were resurrected from the dead at the end of last year thanks to a Congressional deal but maybe this year their time will run out.
Since I spoke about ethanol Sunday, I found it quite funny that a free-market coalition of groups put out a letter dated today regarding the repeal of the Renewable Fuel Standard. I’ll start by quoting their release under the moniker of the Competitive Enterprise Institute:
The RFS is frequently criticized for its adverse impacts on food prices, wildlife habitat, and hunger-stricken nations, and potentially devastating impact on fuel prices. “These criticisms are valid and important,” said CEI Senior Fellow Marlo Lewis. “But even apart from those concerns, Congress should repeal the RFS because it conflicts with basic tenets of a free society. In a free society, no company should be forced to execute and assure the success of another company’s business plan.”
It’s an angle I considered in a roundabout way when I wrote about the benefits of scrapping the RFS on Sunday, obviously not knowing this letter was in the works. Interestingly enough, a similar broad coalition of groups objected a few weeks back when the Domestic Alternative Fuels Act of 2013 was proposed, a proposal I also wrote on.
Of course, we can complain all we want now because no proposal to scuttle the RFS will be going anywhere, particularly when Democrats generally favor more expensive “alternative” energy and farm-state Republicans won’t cross their key constituency, which is being made fat and happy by artificially high corn prices. Worth pointing out is that, had the economy grown as it was during the pre-Speaker Pelosi Bush years, we may be using enough gasoline that we could accommodate increased ethanol supplies without bumping into the “blend wall” as we threaten to do now. Even environmentalists have a problem with ethanol, although their solution is accelerating standards in other areas instead of properly dismissing them entirely.
So perhaps this is a situation where great minds think alike, but in the grand scheme of things we’re not going to see real solutions until the political climate in Washington changes and a cool front of common sense blows in.
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.
If it’s not bad enough that Maryland drivers will be suffering from the first of what now promises to be annual hikes in the state’s gasoline tax, due to a combination of adding gasoline to the palette of items subject to the state’s sales tax and eventual indexing of the existing gasoline tax to inflation, a pending federal bill may allow the addition of natural gas-based ethanol as an allowed blending agent, joining the corn-based ethanol that’s currently allowed to comprise up to 10% of most available gasoline.
H.R. 1959, the Domestic Alternative Fuels Act of 2013, was introduced as an effort to provide other options for attaining the renewable fuel standard already codified into law. But a coalition of groups, led by the Competitive Enterprise Institute, recently wrote a letter to Congress urging the bill be defeated, citing the idea that renewable fuel standards should be scrapped, not enhanced:
The undersigned organizations urge you to oppose H.R. 1959, the Domestic Alternative Fuels Act of 2013. The bill would allow ethanol derived from natural gas to count toward the mandatory blending targets established by the Renewable Fuel Standard (RFS) and the EPA’s implementing regulations.
We commend Rep. Pete Olson (R-TX) and his co-sponsors for seeking to break the corn lobby’s legal monopoly on a significant and growing share of the U.S. motor fuel market. However, the solution is not to make the RFS more inclusive, so that more special interests profit at consumer expense, but to dismantle the program.
The other eleven groups signing with CEI represent a broad spectrum of conservative and free market entities: 60 Plus, American Commitment, Americans for Prosperity, American Energy Alliance, Club for Growth, Commonwealth Foundation, Freedom Action, FreedomWorks, Frontiers of Freedom, Let Freedom Ring, and the National Taxpayers Union.
On balance, the groups are correct in wishing the ethanol mandate be eliminated. Even with the abundant supplies of natural gas which weren’t in play just a few short years ago when the original RFS was cast in place, there is no need to supplement the fuel we use in our vehicles; in fact, eliminating the mandate would probably make those who own watercraft or items with small gasoline engines ecstatic since they’ll no longer have to search for ethanol-free fuel to maintain their equipment.
The EPA’s push toward allowing E15 fuel stems from the increasing amount of ethanol required to satisfy these artificially-induced mandates for usage running into a “blend wall” where it becomes physically impossible to limit the amount of ethanol in a gallon of fuel to just 10 percent and comply with the law. Writers of the RFS miscalculated the future demand for fuel, which is increasing more slowly than predicted due to a number of factors: more fuel-efficient cars and a sputtering economy most prominent among them.
Interestingly enough, Rep. Olson is also in favor of eliminating the mandates, but he obviously feels that’s politically impossible at this time:
The RFS’ singular focus on corn ethanol translates into higher food costs for working families, as well as higher feed costs for livestock producers. To be clear, my primary goal will always be the full repeal of the market distorting RFS. However, until then, we can take care of immediate problems by providing greater participation and competition under the program. Expanding the sources for ethanol will only benefit all Americans. I’m pleased this measure enjoys bipartisan and widespread support.
But this bill promises to align two key constituencies which aren’t always in the same room. It’s a point made by CEI Senior Fellow Marlo Lewis:
Enacting this bill would align the natural gas lobby with the corn lobby. Their common interest would be to increase the overall RFS blending target beyond 36 billion gallons, mandate the sale of E20 or even higher ethanol blends, and relax environmental criteria so that corn- and gas-based ethanol can fill the void created by non-existent advanced biofuels.
All this would do is create yet another group of hogs lining up at the federal cronyism trough, trying to grow their business at the expense of competition despite having an inferior product. You may not remember the gasoline price shock of 2008, but one outgrowth of it that I noted at the time was a video campaign dubbed Nozzlerage and the formation of a group called Citizens for Energy Freedom, a subgroup of another entity called the Center for Security Policy (CSP). Their solution was to give ethanol a permanent market by mandating cars sold in the United States be flexfuel vehicles. As I said back then:
Regardless of how little it supposedly costs to convert cars to flexfuel, the truth is that the option has been available for some time and the market has proven it to be a slow seller. Thus, the soon-to-be-created CSP subgroup (Citizens for Energy Freedom – ed.) is looking to lobby for the bill’s passage and force automakers into another mandate, just like CAFE standards, air bags, catalytic converters, and many other features that were foisted upon automakers by big government. Certainly the idea has some merit but by placing the initial meeting in Des Moines, Iowa, it’s a safe bet that ethanol created from corn will take center stage and we’ve already seen the impact ethanol mandates and subsidies have had on our food prices.
Taking food out of our mouths and dumping it into our gas tanks has always been a bad idea, particularly when there is a cost-effective and inedible solution already in place. CEI and its allies make a sound point, but it will be up to someone in Congress to introduce the bill to eliminate RFS mandates. Of course, we need a President who would sign such a common sense bill and right now common sense is in short supply around the Oval Office and probably will be until at least January, 2017.