Backtracking on fracking

Western Maryland is blessed with an enormous amount of cleaner burning natural gas and we need an all of the above approach to energy. I am concerned that there has been a knee-jerk reaction against affordable energy production in our state. Maryland is definitely behind the curve because this administration has decided to politicize the issue rather than take a balanced approach to ensuring we have access to clean and affordable energy sources to power our homes and businesses and grow our economy.

States throughout the country including our neighbors develop their natural gas resources safely and efficiently. Many of these states are realizing an economic boom through gas and oil exploration and are working in concert with groups like the Natural Resources Defense Council to harness these vast resources of domestic energy in an environmentally sensitive way.

Larry Hogan, in response to a WYPR-FM candidate survey, May 2014. (Emphasis mine.)

Three years later, western Maryland is still blessed with an enormous amount of cleaner-burning natural gas, but on Friday Governor Hogan decided it would be better to leave this valuable resource in the ground rather than create jobs and economic opportunities for a section of the state that lags behind the rest of Maryland when it comes to those two very things.

Perhaps we should have seen this coming, though: the temporary moratorium that was in place stemmed from a bill that Hogan allowed to become law without his signature rather than veto it back in 2015. The bill, which as originally introduced was laughably intended to “protect our health and communities,” was amended from a ban extending to 2023 to a prohibition intended to last until October of this year, when the Maryland Department of the Environment was to have regulations in place. But, as Governor Hogan noted in his press conference announcing the new fracking ban, Maryland envisioned the most stringent regulations in the nation – a roll of red tape that would have amounted to a de facto ban if enacted.

And to illustrate the political pressure Radical Green can put on wobbly members of the GOP, bear in mind that the original third reader vote on the 2015 House bill had 45 opposed, but that number whittled down to 33 once the Senate version passed and the House bill (as amended to match the Senate version) went to third reader. The wobblers who changed their votes were Delegates Anderton, Afzali, Beitzel, Carozza, Krebs, Malone, McComas, Miele, Shoemaker, and West. (This list is ten because two Delegates who voted “no” originally were absent the second time, but Afzali changed her vote after the fact to be truly gutless. Interestingly enough, Delegates Anderton, Carozza, Krebs, and Shoemaker all changed back three days later when the Senate third reader came to the House while Delegate Saab opted to join the dark side.) Conversely, the Senate only had two votes correctly in opposition all along, Senators Hough and Ready.

Now we can add Larry Hogan to the list that has wobbled and fallen – this despite a mountain of evidence that hydraulic fracturing, which has been ongoing for over six decades, is safe when done properly. Even the EPA, which put out a final report in the waning days of the Obama administration, noted they found scientific evidence that hydraulic fracturing activities can impact drinking water resources under some circumstances. Yet many of the circumstances they point out could occur at any chemical plant, and they note:

Data gaps and uncertainties limited EPA’s ability to fully assess the potential impacts on drinking water resources locally and nationally. Because of these data gaps and uncertainties, it was not possible to fully characterize the severity of impacts, nor was it possible to calculate or estimate the national frequency of impacts on drinking water resources from activities in the hydraulic fracturing water cycle.

So should I point out again that over 2 million wells have been hydraulically fractured over the last six decades without incident? It seems to me that past performance should be a very good predictor of future results, particularly as the technology advances. And if you read the report, you’ll note that the uncertainty of cause even extends to those limited, rare incidents blamed – many times falsely – on fracking and most publicized by Radical Green.

No one denies there is risk with hydraulic fracturing – just as there are documented issues with low-frequency noise and impacts on bat population with wind turbines and potential for environmental impact as more and more solar panels are spread over the landscape to significant effect – but the rewards from fracking, as measured by both local economic benefits and the lessening of reliance on foreign energy supplies, have been found to outweigh the risks in nearly every jurisdiction where fracking is possible, while the recalcitrant others (Maryland and New York) have believed the hype over the facts.

While Maryland is a small part of the Marcellus Shale formation that has produced the resurgent energy industry in a region that first benefitted over a century ago from an oil boom – there’s a reason we have motor oil from Pennzoil and Quaker State and it’s not because the brand names are cute – this is a time when the domestic oil and natural gas industry is in a holding pattern. Crude oil prices in the $40-50 a barrel range and a relatively constant balance of natural gas supply and demand means that Maryland missed the boat by about a half-decade in the current cycle, but an increased potential in natural gas exports – coupled with a multi-billion dollar investment in Maryland’s Cove Point facility for LNG exporting that’s slated to come online later this year – means our state would have been in good position to benefit in a few years’ time once natural gas exploration began and delivery infrastructure was put in place. (People tend to forget that part of the equation, too.) But politics, embodied in the baseless fear caused by a noisy environmental lobby, ruled the day Friday.

Allow me to let you in on a dose of common sense: there’s no way in hell Radical Green will give Larry Hogan any credit for what he did on fracking come election time. You can bet your bottom dollar that they will flock to whoever the Democrats end up anointing in their primary because their main goal isn’t a clean environment but to have statists in charge of government. Yes, the rank-and-file who might send a couple hundred dollars to the Chesapeake Bay Foundation every year may really care about the health of the bay, but when the people who benefit most from it are the ones who determine the annual “grade” for the cleanliness of the Bay one has to wonder how much of their thumb is placed on the scale. After all, if the Bay had a grade of A and was pristine H2O, what need would there be for a CBF?

The oil and gas industry doesn’t depend on a government subsidy – they just want a fair and predictable regulatory scheme. But a state which has no problem bending the energy trade by mandating a certain percentage of electricity comes from solar energy and demanding ratepayers subsidize an offshore wind farm seems to have an issue with the source that’s been proven reliable over time and is known as a job creator.

As a ratepayer and voter, I was willing to accept the slight environmental risk of fracking in return for a more prosperous state overall as well as more inexpensive and reliable energy. (And yes, I know that the area in question isn’t one where I live. But if I ever secure a piece of land nearby and someone wants to pay me for the right to use my land to explore for energy resources, I’m glad to oblige. No one has yet assessed the Delmarva Basins on which many of us live for their energy potential.)

In 2014, Allegany and Garrett counties provided almost 1/4 of Larry Hogan’s margin of victory as he carried the duo by 16,466 votes in an election he won by 65,510 votes. Add in adjacent Washington County and that number becomes 35,274 votes, or over half his victory margin. At the risk of losing thousands of votes in that region, Larry Hogan has acquiesced to an environmental lobby that’s not going to give him any credit, any dollars, or any votes for the decision he’s made.

I suppose Larry Hogan thinks he’s got an all-of-the-above electoral strategy, too. But at a time he could have changed Maryland for the better, he instead foolishly chose to surrender to the naysayers.

A push for new jobs

January 3, 2017 · Posted in All politics is local, Business and industry, Maryland Politics, Politics, Radical Green · Comments Off on A push for new jobs 

Two weeks ago, in the waning days before the Christmas holiday, perhaps 40 to 50 brave souls dealt with the cold weather to state their case for job creation in western Maryland and beyond. I don’t think the Maryland Energy Citizens and Energy Nation Rally drew a lot of interest outside the energy field beforehand (except perhaps from me) and in doing a news search for the event I found exactly zero coverage. (The photos I’ll use here were Tweeted by Energy Citizens.)

It was a modest gathering to be sure, but those who showed were interested in regulations that would allow for job creation – directly in Allegany and Garrett counties, and eventually spilling over into other parts of the state as the infrastructure needed to move the natural gas to market is placed. And there was one group who understood this well.

The folks in the orange shirts were members of the Laborers Union, which would stand to benefit from the infrastructure being built. In the universe of the left wing, oftentimes Big Labor and environmentalists stand on opposite sides because the union side understands better the economics of utilizing our energy resources to provide the clean and reliable power we need to keep the economic engine going, while environmentalists seem to think that the wind will always blow and the sun shines every day so we can rely on those sources. With their entrenched opposition to energy progress through additional exploration and infrastructure construction, Radical Green would shortly have us in the same boat as the New England states when it comes to energy costs, especially at this time of year.

Yet in the days since I’ve learned of a study from the University of Chicago that has attempted to quantify benefits and costs of fracking, with the study being summarized thus:

The benefits include a six percent increase in average income, driven by rises in wages and royalty payments, a 10 percent increase in employment, and a six percent increase in housing prices. On the costs side, fracking reduces the typical household’s quality of life by about $1,000 to $1,600 annually – excluding the increase in household income.

As a point of reference, the average household income across the two counties is about $42,000 so a 6% increase would be a net gain in household income equating to approximately $2,500. And considering energy jobs tend to pay more than average, the 10% increase in employment would be a boost to the median so the benefits could work out to $3,000 or more while the somewhat dubious “quality of life” costs would not be so affected.

I noted above that there was no coverage of the rally by the local media, but that very day the Baltimore Sun chose to run a laughable screed by Senator Cardin about the prospect of the incoming Trump administration abandoning the Paris Climate Agreement; a diatribe that included this howler:

In 2015, investment in renewable energy was nearly $350 billion worldwide, more than fossil fuel energy. Even though gas and oil have hit record low prices, current and projected prices for renewables are low too, making clean energy solutions remarkably competitive.

The huge piece of information unspoken here is how much of that renewable energy “investment” was picked from the pocket of unsuspecting taxpayers, nor does it account for the amount of the market carved out for renewables artificially by state mandate. Nor should it be our intention to follow Europe and take the blue pill, thinking mankind has one iota of effect on the global climate in the long run.

Sadly, it may be almost as much of a folly to believe that a small group of common-sense protestors will have an effect on a group of legislators who mistakenly believe that restrictive regulations will encourage job creation or that a fracking ban will benefit the state. But I encourage them to keep trying anyway because people who can see the long-range picture will realize you are on the right side of this.

Earning my presidential vote: energy

The author really didn’t plan it out that way, but I think it worked out well that my usual Tuesday morning column from Marita Noon preceded this particular post, since we share a very similar philosophy insofar as energy issues are concerned. In five bullet points or less, the next President should:

  • Dismantle to the fullest extent possible the Environmental Protection Agency, which was created in 1970. Governmental functions that predated the EPA can be reverted to their original department after a review of their current usefulness.
  • The same goes for the Department of Energy, which was a waste of same since President Carter created it.
  • Eliminate the federal subsidies and carveouts for so-called “green” energy. If wind, solar, and so forth are viable they should be able to stand in the market.
  • On a related note, dispatch with the Renewable Fuel Standard (ethanol mandate), CAFE standards (anti-market regulation), and (coal-industry killing) Clean Power Plan.
  • Finally, walk away from the Paris Climate Agreement. Make the (correct) statement that mankind has little impact on the climate.

This was one for which I could have made about fifteen bullet points. But let’s see what candidates have to say, bearing in mind this category is worth seven valuable points. If you want to see the first parts of this overall exercise before continuing on, feel free to begin here.

Castle: Does not believe in man-made climate change, believes it is a “hoax.”

“I’m for the United States becoming energy independent as quickly as possible, using all of the resources that we have. Coal miners would be very happy with me, I think.” We seem to worry more about our environment than that of the places we get energy from. (Facebook)

Hedges: “We advocate increased research on and development of non-fossil fuel resources, tax breaks for companies engaging in such, and subsidies for consumers wishing to change from fossil fuels to renewable domestic sources of energy.” (party platform)

“(P)ollution abatement projects must balance costs with benefits. We believe that climatic change is an existential threat to civilization, and we will co-operate with other nations in mitigating its effects.” (party platform)

Hoefling: Energy independence is a given if we will simply get government out of the way. We have vast resources, just waiting for us to rein in the radical environmentalists and the out-of-control judges who have empowered them. (Facebook conversation)

Johnson: Protect the Environment. Promote Competition. Incentivize Innovation.

We need to stand firm to protect our environment for our future generations, especially those designated areas of protection like our National Parks. Consistent with that responsibility, the proper role of government is to enforce reasonable environmental protections. Governor Johnson did that as Governor, and would do so as President.

Governor Johnson believes the Environmental Protection Agency, when focused on its true mission, plays an important role in keeping the environment and citizens safe.

Johnson does not, however, believe the government should be engaging in social and economic engineering for the purpose of creating winners and losers in what should be a robust free market. Preventing a polluter from harming our water or air is one thing. Having politicians in Washington, D.C., acting on behalf of high powered lobbyists, determine the future of clean energy innovation is another.

In a healthy economy that allows the market to function unimpeded, consumers, innovators, and personal choices will do more to bring about environmental protection and restoration than will government regulations driven by special interests. Too often, when Washington, D.C. gets involved, the winners are those with the political clout to write the rules of the game, and the losers are the people and businesses actually trying to innovate.

When it comes to global climate change, Johnson and Weld believe that the politicians in Washington, D.C. are having the wrong debate.

Is the climate changing? Probably so.

Is man contributing to that change? Probably so.

But the critical question is whether the politicians’ efforts to regulate, tax and manipulate the private sector are cost-effective – or effective at all. The debate should be about how we can protect our resources and environment for future generations. Governors Johnson and Weld strongly believe that the federal government should prevent future harm by focusing on regulations that protect us from real harm, rather than needlessly costing American jobs and freedom in order to pursue a political agenda. (campaign website)

McMullin: Affordable gas and electricity are important for every American family. From the cost of commuting to the price of groceries, energy expenses are built into every part of our economy. Energy companies have made remarkable advances that create jobs and benefit consumers, yet interference from Washington has prevented American families from reaping the benefits they should. Evan McMullin will roll back the heavy-handed regulations that are hurting consumers while ensuring that we protect the natural environment.

Over the past ten years, there has been a revolution in American energy production; transforming the U.S. into an energy superpower. We are now the world’s leading producer of oil, even ahead of Saudi Arabia. With more oil being produced, prices have come down at the pump. Natural gas prices have also fallen dramatically because of booming American production. Meanwhile, U.S. carbon dioxide emissions have fallen because natural gas burns more cleanly than other fuels.

Evan McMullin will make sure that there is a level playing field for all types of energy producers, so American families have lower electricity bills and pay less at the pump. Right now, renewable energy producers receive more than $13 billion per year in subsidies, while fossil fuel producers receive $3.5 billion. Evan would put an end to all of these subsidies, which benefit politically connected corporations rather than American consumers. Evan also opposes state-level renewable energy mandates, which force consumers to purchase expensive electricity from renewable sources, adding to the burden of families who are already dealing with a long-term increase in electricity prices.

Our natural environment is a divine gift and each of us has the responsibility to serve as its steward. There is an important role for the government to play in ensuring that our children and our children’s children have clean air to breathe, clean water to drink, and clean parks and forests to play in.

We should also be concerned about the direction of global temperatures, which have risen about 1 degree Celsius over the past 50 years. President Obama’s response to climate change has been to rely on expensive, heavy-handed regulations that put Americans out of work.

Evan McMullin believes that promoting innovation is the most promising way to deal with climate change without placing a heavy burden on the backs of American taxpayers and workers. The right way to promote innovation is to invest in basic research, not to provide loans and grants to politically connected corporations. Our environment will be best preserved when America’s leading minds are focused on the problem, not when government is dictating the answers.

The centerpiece of the Obama administration’s climate change policy is the Clean Power Plan, whose implementation has been blocked by the Supreme Court. The plan will force dozens of power plants to close and destroy tens of thousands of jobs. The annual cost of implementation will be more than $8 billion. The administration also signed the Paris Climate Agreement, whose implementation would lead to annual economic losses of $40 billion per year if its goals were accomplished via regulation.

Evan opposes the Clean Power Plan because he believes we can protect the environment without causing so much economic devastation. He would reject a regulatory approach to pursuing the goals of the Paris accord, focusing instead on innovation.

The natural gas boom in the United States has already shown how innovation can benefit both the environment and the economy. Since the beginning of the gas boom, carbon dioxide emissions in the United States have fallen back to the levels they were at in the mid-1990s. This happened not because of government planning or regulation, but because the private sector made technological breakthroughs that increased our access to cleaner natural gas.

Together, we have an opportunity to create jobs, save money for hard working families, and protect the environment. (campaign website)

**********

I’m relatively disappointed that Darrell Castle hasn’t seemed to pay a lot of attention to this issue, as it certainly is influenced with a proper reading of the Constitution. On the surface he does well, but not to the extent where he would get a high score. 3 points.

In listening to and reading about Jim Hedges, he noted there were places where the Prohibition Party was far more “progressive” in an attempt (misguided, in my opinion) to draw younger voters. This is one area where that philosophy certainly applies, and “more of the same” is not good for our nation when it comes to energy policy. No points.

I feel the same way about Tom Hoefling as I do Castle: a nice approach on a broad scale, but more specifics would be nice. 3 points.

Gary Johnson gets it, sort of. But the problem is that he is conceding key points of the argument to the other side by leaving open-ended the contention that government is essential to provide “reasonable” environmental protection. Given that, one could make the case that everything we have adopted over the 46 years since the EPA came into being is “reasonable” because some bureaucrat thought it so. I think the government should get out of the free market, too – but I have outlined a number of concrete steps on my bullet point list above. Where are his? 2.5 points.

Despite his misplaced “concern” about global temperatures, I actually believe Evan McMullin has the best overall approach and philosophy. No, it’s not perfect, but on balance I think he would certainly consider addressing much of what I would like to see done. In this category he shines compared to the competition. 5.5 points.

We will see if the candidates recover when it comes to the next category, social issues.

Ethanol is the wrong solution

September 6, 2016 · Posted in Business and industry, Marita Noon, Radical Green · Comments Off on Ethanol is the wrong solution 

Commentary by Marita Noon

University of Michigan’s Energy Institute research professor John DeCicco, Ph.D., believes that rising carbon dioxide emissions are causing global warming and, therefore, humans must find a way to reduce its levels in the atmosphere – but ethanol is the wrong solution. According to his just-released study, political support for biofuels, particularly ethanol, has exacerbated the problem instead of being the cure it was advertised to be.

DeCicco and his co-authors assert: “Contrary to popular belief, the heat-trapping carbon dioxide gas emitted when biofuels are burned is not fully balanced by the CO2 uptake that occurs as the plants grow.” The presumption that biofuels emit significantly fewer greenhouse gases (GHG) than gasoline does is, according to DeCicco: “misguided.”

His research, three years in the making, including extensive peer-review, has upended the conventional wisdom and angered the alternative fuel lobbyists. The headline-grabbing claim is that biofuels are worse for the climate than gasoline.

Past bipartisan support for ethanol was based on two, now false, assumptions.

First, based on fears of waning oil supplies, alternative fuels were promoted to increase energy security. DeCicco points out: “Every U.S. president since Ronald Reagan has backed programs to develop alternative transportation fuels.” Now, in the midst of a global oil glut, we know that hydraulic fracturing has been the biggest factor in America’s new era of energy abundance – not biofuels. Additionally, ethanol has been championed for its perceived reduction in GHG. Using a new approach, DeCicco and his researchers, conclude: “rising U.S. biofuel use has been associated with a net increase rather than a net decrease in CO2 emissions.”

DeCicco has been focused on this topic for nearly a decade. In 2007, when the Energy Independence and Security Act (also known as the expanded ethanol mandate) was in the works, he told me: “I realized that something seemed horribly amiss with a law that established a sweeping mandate which rested on assumptions, not scientific fact, that were unverified and might be quite wrong, even though they were commonly accepted and politically correct (and politically convenient).” Having spent 20 years as a green group scientist, DeCicco has qualified green bona fides. From that perspective he saw that while biofuels sounded good, no one had checked the math.

Previously, based on life cycle analysis (LCA), it has been assumed that crop-based biofuels, were not just carbon neutral, but actually offered modest net GHG reductions. This, DeCicco says, is the “premise of most climate related fuel policies promulgated to date, including measures such as the LCFS [California’s Low Carbon Fuel Standard] and RFS [the federal Renewable Fuel Standard passed in 2005 and expanded in 2007].”

The DeCicco study differs from LCA – which assumes that any carbon dioxide released from a vehicle’s tailpipe as a result of burning biofuel is absorbed from the atmosphere by the growing of the crop. In LCA, biofuel use is modeled as a static system, one presumed to be in equilibrium with the atmosphere in terms of its material carbon flow. The Carbon balance effects of U.S. biofuel production and use study uses Annual Basis Carbon (ABC) accounting – which does not treat biofuels as inherently carbon neutral. Instead, it treats biofuels as “part of a dynamic stock-and-flow system.” Its methodology “tallies CO2 emissions based on the chemistry in the specific locations where they occur.” In May, on my radio program, DeCicco explained: “Life Cycle Analysis is wrong because it fails to actually look at what is going on at the farms.”

In short, DeCicco told me: “Biofuels get a credit they didn’t deserve; instead they leave a debit.”

The concept behind DeCicco’s premise is that the idea of ethanol being carbon neutral assumes that the ground where the corn is grown was barren dirt (without any plants removing carbon dioxide from the atmosphere) before the farmer decided to plant corn for ethanol. If that were the case, then, yes, planting corn on that land, converting that corn to ethanol that is then burned as a vehicle fuel, might come close to being carbon neutral. But the reality is that land already had corn, or some other crop, growing on it – so that land’s use was already absorbing CO2. You can’t count it twice.

DeCicco explains “Growing the corn that becomes ethanol absorbs no more carbon from the air than the corn that goes into cattle feed or corn flakes. Burning the ethanol releases essentially the same amount of CO2 as burning gasoline. No less CO2 went into the air from the tailpipe; no more CO2 was removed from the air at the cornfield. So where’s the climate benefit?”

Much of that farmland was growing corn to feed cattle and chickens – also known as feedstock. The RFS requires an ever-increasing amount of ethanol be blended into the nation’s fuel supply. Since the RFS became law in 2005, the amount of land dedicated to growing corn for ethanol has increased from 12.4 percent of the overall corn crop to 38.6 percent. While the annual supply of corn has increased by 17 percent, the amount going into feedstock has decreased from 57.5 percent to 37.98% – as a graphic from the Detroit Free Press illustrates.

The rub comes from the fact that we are not eating less. Globally, more food is required, not less. The livestock still needs to be fed. So while the percentage of corn going into feedstock in the U.S. has decreased because of the RFS, that corn is now grown somewhere else. DeCicco explained: “When you rob Peter to pay Paul, Peter has to get his resource from someplace else.” One such place is Brazil where previous pasture land, because it is already flat, has been converted to growing crops. Ranchers have been pushed out to what was forest and deforestation is taking place.

Adding to the biofuels-are-worse-than-gasoline accounting are the effects from producing ethanol. You have to cook it and ferment it – which requires energy. In the process, CO2 bubbles off. By expanding the quantity of corn grown, prairie land is busted up and stored CO2 is released.

DeCicco says: “it is this domino effect that makes ethanol worse.”

How much worse?

The study looks at the period with the highest increase in ethanol production due to the RFS: 2005-2013 (remember, the study took three years). The research provides an overview of eight years of overall climate impacts of America’s multibillion-dollar biofuel industry. It doesn’t address issues such as increased fertilizer use and the subsequent water pollution.

The conclusion is that the increased carbon dioxide uptake by the crops was only enough to offset 37 percent of the CO2 emissions due to biofuel combustion – meaning “rising U.S. biofuel use has been associated with a net increase rather than a net decrease in CO2 emissions.”

Instead of a “disco-era ‘anything but oil’ energy policy,” DeCicco’s research finds, that while further work is needed to examine the research and policy implications going forward, “it makes more sense to soak up CO2 through reforestation and redouble efforts to protect forests rather than producing biofuels, which puts carbon rich lands at risk.”

Regardless of differing views on climate change, we can generally agree that more trees are a good thing and that “using government mandates and subsidies to promote politically favored fuels de jour is a waste of taxpayers’ money.”

The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc., and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). She hosts a weekly radio program: America’s Voice for Energy – which expands on the content of her weekly column. Follow her @EnergyRabbit.

A new international example for bad energy policy

August 30, 2016 · Posted in Business and industry, Marita Noon, Radical Green · Comments Off on A new international example for bad energy policy 

Commentary by Marita Noon

If a country’s goal is to decrease carbon emissions by increasing reliance on renewable energy, it only makes sense to install the new equipment in the location with the best potential – both in geography and government.

For Australia, which has a national Renewable Energy Target (RET) of 33,000 gigawatt hours of electricity generated by defined renewable sources by 2020, South Australia (SA) is that place. According to SA Treasurer Tom Koutsantonis, who is also the Energy Minister, the federal government had determined that SA is where “the best conditions for wind farms” could be found. The state government was amenable, with SA Premier Jay Wetherill promising to make Adelaide, its capitol city, “the first ‘carbon neutral’ city by 2050.” The state’s RET is for 50 percent renewable energy by 2025. Wetherall, in 2014, claimed: “This new target of half of the state’s power to be generated by renewable sources will create jobs and drive capital investment and advanced manufacturing industries.”

In reality, SA has now found that talk is cheap, but renewable energy isn’t.

The decision to set a 50 percent renewable target is now being called “foolish,” by Tony Wood, an analyst at think-tank Grattan Institute, and “complete naivety and foolishness” according to Lindsay Partridge, chief executive at Brickworks, one of the nation’s leading providers of building products.

Now the largest producer of wind power, SA has enough installed capacity that, under ideal conditions, it could meet 100 percent of the current electricity demand. “However, wind generation tends to be lower at times of maximum demand,” according to the Australian Energy Regulator. “In South Australia, wind typically contributes 10 percent of its registered capacity during peaks in summer demand.” In fact, on some days, Jo Nova explains, they actually “suck electricity instead of generating it.”

Last month, SA experienced an energy crisis that The Australian, the country’s largest newspaper, blamed on “an over-reliance of untrustworthy and expensive wind and solar.” The paper warned that the federal RET “will force other states down the path taken by South Australia, which has the highest and most variable energy prices in the national electricity grid.” Nova adds: “South Australia has more ‘renewable’ wind power than anywhere else in Australia. They also have the highest electricity bills, the highest unemployment, the largest number of ‘failures to pay’ and disconnections. Coincidence?”

In July, the confluence of several factors resulted in a huge spike in electricity prices – as much as 100 times the norm.

In May, pushed out of the market by subsidized wind, SA’s last coal-fueled power plant was closed. Even before then, The Australian reported electricity prices were “at least 50 percent higher than in any other state.” According to the Australian Energy Market Operator, the average daily spot price in SA was $46.82 per megawatt hour. After the power plant was turned off: $80.47. In June: $123.10 – more than double the previous year. In July: $262.97.

Fred Moore, CEO of SA components manufacturer Alfon Engineering, addressing the electricity price hikes that are smashing small and medium business, says his latest electricity contract had increased by almost 50 percent. Until the end of May, his businesses electricity bill was about $3,000 a month and is now about $4,500 a month. He says: “I don’t know how long the company is going to be able to afford it.”

As a result of the loss of coal, when there’s no wind or sun, SA is now reliant on natural gas generation and from coal-fueled electricity being imported through a single connector from neighboring Victoria.

In part, due to a calm, cold winter (weather that is not favorable to wind farms), natural gas demand is high and so are prices. Additionally, the Heywood interconnector was in the midst of being upgraded – which lowered capacity for the coal-fueled electricity on which SA relies. Because of SA’s abandoning coal-fueled electricity generation and its increased reliance on wind, The Australian reports: “The national energy market regulator has warned that South Australia is likely to face continued price volatility and ‘significantly lower’ electricity availability.”

Then came the brutal cold snap, which caused more folks to turn on their electric heaters – thus driving up demand. The left-leaning, Labour state officials were prompted to plead for more reliable fossil-fuel-generated power. With the connector constrained, the only option was to turn on a mothballed gas-fueled power station – a very expensive exercise. The gas plant had been shut down because of what amounts to dispatch priority policies – meaning if renewable energy is available, it must get used, pushing natural gas into a back-up power source. This, combined with the subsidized wind power, made the plant unprofitable. The Australian Financial Review (AFR) explains: “Energy experts say South Australia’s heavy reliance on wind energy is compounding its problems in two ways, first by forcing the remaining baseload generators to earn more revenue in shorter periods of time when the wind isn’t blowing, and secondly by forcing baseload coal and gas generators out of the market altogether.”

Big industrial users, who are the most affected by the power crisis, are “furious about the spike in higher power prices.” According to AFR, Adelaide Brighton Cement, one of the few energy-intensive manufacturing industries still operating in South Australia, said the fluctuating price was hurting business. “As a competitor in a global market, it is essential for us to have access to the availability of uninterrupted economically competitive power.” In The Australian, Jacqui McGill, BHP’s Olympic Dam asset manager, agrees: “We operate in a global market…to be competitive globally, we need globally competitive pricing for inputs, of which energy is one.” The report adds that some major businesses in SA warn of possible shutdowns due to higher power prices – the result of a rushed transition to increased renewable energy. The Adelaide Advertiser reported: “some of the state’s biggest employers were close to temporarily closing due to surging SA electricity prices making business too expensive.” Not the job creation promised by Wetherall.

“Of course, if you were some sort of contrarian eccentric,” writes Judith Sloan, Contributing Economics Editor for The Australian, “you could argue that escalating electricity prices, at both the wholesale and retail level, have made manufacturing in Australia increasingly uncompetitive and so the RET has indirectly contributed to the meeting of the emissions reduction target – but not in a good way.”

The SA energy crisis serves as a wake-up call and a warning to the other states, as the problem is, according to Koutsantonis, “coming to New South Wales and Victoria very soon.” But it should also, as the Financial Times reports: “provide lessons to nations rapidly increasing investment in renewables.”

Malcolm Roberts, CEO at the Australian Petroleum Production and Exploration Association, called the situation in SA a “test case” for integrating large scale renewable energy generation into the electricity grid. According to Keith Orchison, former managing director of the Electricity Supply Association of Australia (from 1991 to 2003), now retired and working as a consultant and as the publisher of Coolibah Commentary newsletter and “This is Power” blog, current policy is driven by “ideology, politicking and populism.”

Roberts added: “No technology is perfect. Coal is great for base-load power, but it’s not so great for peak demand but gas is well suited for meeting peak demand. You need gas as an insurance policy for more renewables.” Even the Clean Energy Council’s chief executive, Kane Thornton, in the AFR, “conceded conventional power generation such as gas would most likely be needed as a back-up.”

Perhaps the best explanation for SA’s energy crisis came from the Australian Energy Council, formerly the Electricity Supply Association of Australia, which called it an: “accidental experiment in how far you can push technologies such as wind and solar power in to an electricity grid before something breaks.” According to Orchison: “The council says that intermittent renewables at scale reduces carbon emissions but ultimately increases end-user prices and system reliability risks.”

On August 13, The Economist, in an article titled It’s not easy being green, addressed the three goals of Germany’s energy transformation: “to keep energy supply reliable; to make it affordable; and to clean it up to save the environment, with a target of cutting emissions by 95% between 1990 and 2050.” All three of which, Clemens Fuest, of the Munich-based Ifo Institute think tank, says, “will be missed.” He calls Germany “an international example for bad energy policy.” Now we can add South Australia, and, perhaps, most of Australia, as another.

This is the result, Orchison says, of “pursuing a purist view at the political expense of power reliability.”

The question remains: will America learn from these bad examples, or will we continue down the path President Obama has pushed us onto – spending billions, achieving little environmental benefit, and raising rates on households and industry? The result of November’s election will provide the answer.

The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc., and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). She hosts a weekly radio program: America’s Voice for Energy – which expands on the content of her weekly column. Follow her @EnergyRabbit.

The Renewable Fuel Standard: “set up for fraud”

August 2, 2016 · Posted in Business and industry, Marita Noon, National politics, Politics, Radical Green · Comments Off on The Renewable Fuel Standard: “set up for fraud” 

Commentary by Marita Noon

America’s rush to renewables has invited corruption and fraud.

Researcher Christine Lakatos and I, together, have produced the single largest body of work on green-energy crony-corruption. Our years of collaboration have revealed that those with special access and influence have cashed in on the various green-energy programs and benefitted from the mandates, rules, and regulations that accompany the huge scheme. Dozens of the projects, including biofuel, which required the unwitting investment of taxpayer dollars have failed – leaving employees without jobs, buildings without tenants, taxpayers without repayment, and cronies without pain (even snatching hefty bonuses on the way down). Most people know about Solyndra, the first bankruptcy, and some may know about Abengoa, the biggest bankruptcy, but there are many more.

These big projects allowed the politically connected to bilk taxpayers of billions and is the definition of corruption. But, there’s fraud in renewable energy, too – and, while it doesn’t hit us as hard as taxpayers, it does cost us as consumers.

Wednesday, July 20, representing the latest fraudster to be convicted – but not the first and surely not the last – “a jury found an Indiana man guilty of securities fraud and other crimes connected to a massive biodiesel fraud scheme,” reported Greenwire. It turns out, Jeffrey Wilson and his multistate cohorts pretended to manufacture biodiesel, which allowed them to claim renewable fuel credits – known as Renewable Identification Numbers or RINs. The Department of Justice said Wilson’s actions resulted in a $20 million loss to investors, $140 million in revenue, and $56 million in criminal profit.

I know more than most about the corruption surrounding green energy, but I hadn’t followed this. I dug further.

Just two weeks earlier, two men in Florida pled guilty to a “multistate biodiesel fraud scheme.” Biodiesel Magazine says Thomas Davanzo and Robert Fedyna operated several shell companies that were used to facilitate the “multistate scheme to defraud biodiesel buyers and U.S. taxpayers by fraudulently selling biodiesel credits and fraudulently claiming tax credits.”

Six months before, on December 21, 2015, two men were indicted on “101 charges alleging they abused incentives offered to companies that produced biodiesel fuels.” According to The Morning Call: “A federal prosecutor says they took subsidies for fuel they did not produce and sold renewable energy credits to unsuspecting buyers.” The charges include conspiracy, wire fraud, filing false tax documents, obstruction of the Internal Revenue Service, and obstructing a federal investigation. The indictment claims Dave Dunham and Ralph Tommaso used a complex scheme that reached from Lehigh Valley, PA, to Washington state and into Canada and allowed them to apply for and receive government subsidies for producing clean diesel.

Also in 2015, two Las Vegas men and an Australian man were sentenced to federal prison for schemes to generate and sell fraudulent biodiesel credits. In another case, Rodney Hailey, owner of Clean Green Fuels in Maryland, was convicted of selling $9 million in counterfeit RINs from his garage without even trying to make biodiesel. Hailey’s neighbors called authorities because they were alarmed by the “profusion of luxury cars” that showed up in his “suburban Baltimore neighborhood” – 22 in all, claims a report in Bioenergy Connection. Then there is Jeffrey David Gunselman, owner of Absolute Fuels in Lubbock, TX, who was indicted by a federal grand jury in Texas for lying about producing biodiesel fuel and selling the resulting renewable fuel credits. Reports indicate that he generated some 48 million RINs without actually producing any biodiesel fuel. He’s remembered for using his ill-gotten gain to purchase, among numerous luxury items, a demilitarized Patton tank.

The most interesting biodiesel fraud case may be that of Philip Rivkin, founder and chief executive of Houston-based Green Diesel who is now serving a 10-year sentence for selling fraudulent RINs. Over a seven-year period he concocted an elaborate scheme that included, according to Bloomberg: “a three-story steel skeleton crammed with pipes and valves” – some of which were not connected to anything. In late 2008, Green Diesel did reportedly produce a batch of about 130,000 gallons of biodiesel, but the quality was “too poor for commercial sale.”

Biodiesel RINs have become a valuable commodity because, as a result of the Renewable Fuel Standard (RFS), refiners are required to blend biofuels into the nation’s fuel supply and the RINs supposedly prove they’ve complied. Rivkin sold more than $78 million in sham RINs. He bragged about building a $500 million company without any debt. When he fled the U.S. in 2011, prior to his 2014 capture, he did so in his $3.4 million Canadair Challenger jet.

These cases of RIN fraud are just those who’ve been caught – but they all have a common thread. They aren’t the names we are used to in the green-energy corruption story like billionaires Warren Buffet and Tom Steyer or former politicos like Al Gore and Bill Richardson. They aren’t cronies who’ve used political connections to work the system. They are fraudsters who found a way to fortune through the flawed RFS – first enacted by Congress in 2005 and expanded in 2007 – which contains a credit-trading program.

In a July 25 report on the RFS, Marlo Lewis, Jr., a senior fellow at the Competitive Enterprise Institute, explains: “Each gallon of biofuel produced is assigned a unique 38-digit Renewable Identification Number (RIN). When a refiner sells a gallon of biofuel in the motor fuel market, it earns a RIN credit. A refiner that does not meet its annual obligation by actually blending and selling biofuel can comply by purchasing surplus RIN credits from another refiner that exceeded its obligation. A refiner can also bank surplus RIN credits to meet up to 20 percent of the following year’s obligation.”

Because the law requires ever-increasing quantities of biofuel be produced – even beyond what consumers want or most vehicles can handle – RINs offer refiners a way to presumably meet the mandates while providing the market with what it wants. But, according to Brendan E. Williams, American Fuel and Petrochemical Manufacturers executive vice president, biodiesel RINs are especially lucrative: “Ethanol RINs stay attached to physical gallons of ethanol until the ethanol gallon is blended with petroleum.  This separation usually occurs at terminals, which are rarely owned by ethanol producers. Once ethanol is blended, the RIN is detached and becomes a tradable commodity.  Therefore, rather than a refiner or ethanol producer, it is often the terminal operator who does the blending that controls ethanol RINs.  A refiner that has a terminal rack at the refinery for local gasoline distribution can also do this blending, but this is not the usual situation because refineries are not located everywhere.  Biodiesel RINs work differently. EPA allows biodiesel producers to detach the RIN as soon as the biodiesel is produced. There is no requirement for biodiesel to be blended to petroleum diesel before the RIN is detached. This difference highlights why there is more fraud in biodiesel. The biodiesel fraudsters lie about producing physical biodiesel just so they can generate RINs on paper to sell. This is made possible based on the previously mentioned fact that there is no requirement for biodiesel to be blended with petroleum diesel.” A graphic in the Bloomberg report adds: “Biodiesel RINs tend to cost more than ethanol RINs or other types because they are scarcer and can be used to satisfy multiple requirements under the Renewable Fuel Standard.”

“RIN swaps,” according to Bloomberg, “are usually agreed upon between companies, traders, and brokers via email, phone, texts, and chatroom messages.” The onus is on the buyers, “if the RINS are found to be fraudulent, the holder has to purchase new credits to replace the phony ones” – and the new credits must be purchased at the current price that may be higher than the original purchase.

Of course, the refiners’ purchase of RINs – and in the case of fraudulent RINs, the double purchase – is passed on to the consumer. We are stuck holding the bag for the fraudsters’ get-rich-quick scheme that is enabled by the RFS.

“Because refiners can buy them to satisfy their obligations to introduce renewable fuels into the national market,” Scott Irwin, an agriculture economic professor at the University of Illinois, according to The Morning Call, calls the RINs: “valuable.” He explains: “A combination of little regulation, the small-business nature of biodiesel producers and higher-than-expected prices for credits produced a rash of fraud. … It was kind of set up for fraud.”

Because the EPA, whose expertise is in things like oil spills and air pollution, isn’t equipped to handle these cases of sophisticated financial fraud, Bloomberg reports, it has reached out to the Commodity Futures Trading Commission – “which is itself stretched thin because of its responsibilities under Dodd-Frank.” The lack of oversight made the RFS biodiesel program a “government playground for con artists.”

The biofuel fraud is just one prong in the growing push for RFS reform. The economic and technical realities of the “blend wall,” as detailed in Lewis’ report, is another. On July 27, Bloomberg chronicled the history of the unlikely third prong: big green groups’ biofuel blunder. They’ve now turned against ethanol due to the agricultural runoff in waterways and conversion of prairies to cropland. Environmentalists, who once championed biofuels, are now seen as a factor in “improving the odds that lawmakers might seek changes to the program next year.”

Reforming the RFS is not a partisan issue. Free market advocates don’t like the mandates. Consumers resist been forced to purchase something they don’t want. Environmentalists don’t like the loss of prairie land and damage to the water supply. Rep. Peter Welch (D-VT) says the RFS has “truly been a flop. The environmental promise has been transformed into an environmental detriment.”

The only resistance to calls for RFS repeal or reform comes from the biofuel producers lobby – though as I’ve previously addressed, corn ethanol would likely still be blended into our fuel supply at about the current levels as it is a valuable oxygenate that increases octane.

Lewis concludes his report with this admonition: “Congress should repeal the RFS so that consumer preference and competition, rather than central planning policies, determine which fuels succeed or fail in the U.S. marketplace. Failing that, Congress should sunset the RFS so it ends after 2022. In the meantime, the EPA should cap mandatory biofuel sales at the E10 blend wall, while allowing biofuel producers to sell as much additional renewable fuel as consumers actually want to buy.”

Every politician in Washington talks about getting rid of waste, fraud, and abuse. Getting rid of the RFS would go a long way to achieving that goal.

The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc., and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). She hosts a weekly radio program: America’s Voice for Energy – which expands on the content of her weekly column. Follow her @EnergyRabbit.

Brexit’s energy lesson for California, et al

June 28, 2016 · Posted in Business and industry, Marita Noon, National politics, Politics, Radical Green, State of Conservatism · Comments Off on Brexit’s energy lesson for California, et al 

Commentary by Marita Noon

“California’s largest utility and environmental groups announced a deal Tuesday [June 21] to shutter the last nuclear power plant in the state.” This statement from the Associated Press reporting about the announced closure of the Diablo Canyon nuclear power plant should startle you. The news about shutting down California’s last operating nuclear power plant, especially after Pacific Gas & Electric Co. (PG&E) had sought a 20-year extension of the operating licenses for the two reactors, is disappointing – not startling. What should pique your ire is that the “negotiated proposal,” as the Wall Street Journal (WSJ) called it, is between the utility company and environmental groups – with no mention of the regulators elected to insure that consumers have efficient, effective and economical electricity.

Who put the environmental groups in charge? Not the California voters. But unelected environmental groups – and their bureaucratic friends in various government agencies – have been dictating energy policy for the most of the past decade. Regarding the “negotiated proposal,” WSJ points out: “The agreement wades deeply into intricate energy procurement, environmental and rate-setting matters that are normally the exclusive jurisdiction of state agencies.”

California has a goal of generating half of its electricity from renewable sources by 2030 and environmental groups are calling for the state officials to replace Diablo’s generating capacity with “renewable power sources.” Realize that this one nuclear power plant provides twice as much electricity as all of California’s solar panels combined.

Bloomberg Intelligence analysts’ research concluded that PG&E “would need 10,500 megawatts of new solar installations to replace all of Diablo Canyon’s output” and that, without including potential costs of new transmission lines or back-up resources for solar, will cost $15 billion – with totals, including decommissioning, estimated at $20 billion.

The Bloomberg report states: “PG&E will ask that customers make up any shortfall.”

Actual costs, Bloomberg says: “could be lower because the company expects to compensate for lower demand and replace only part of the production.” Why will there be lower demand? The WSJ explains: “the plan calls for new power sources to furnish only a portion of the electricity that Diablo Canyon generates, assuming that greater energy efficiency in the future will also curb some power demand.”

All of this is announced while California is experiencing, and expecting more, blackouts due to “a record demand for energy” and because “there just aren’t enough gas pipelines for what’s needed,” according to CNN Money. “Southern California,” reports WSJ, “is vulnerable to energy disruptions because it relies on a complex web of electric transmission lines, gas pipelines and gas storage facilities – all running like clockwork – to get enough electricity. If any piece is disabled, it can mean electricity shortages. Gas is the state’s chief fuel for power generation, not coal. But the pipelines can only bring in about 3 billion cubic feet of working gas a day into Southern California, below the daily demand, which gets as high as 5.7 billion cubic feet.”

California’s Independent System Operator, which runs the state’s power grid, therefore, has warned of “significant risk” that there may not be enough natural gas which could result in “outages for as many as 14 summer days.” CNN Money reports: “Natural gas has played a bigger role for California as the state has tried to phase out coal and nuclear power” – environmental groups oppose the use of all of these three power sources.

It is expected that Diablo Canyon’s generating capacity will, in part, be replaced with more natural gas – which is good news for fracking. Eric Schmitt, vice president of operations for the California Independent System Operator, said: “California needs more flexibility in how it generates power so it can balance fluctuating output from wind and solar projects. Gas plants can be turned off and on quickly.”

As coal-fueled electricity has been outlawed in California, and environmental groups have pushed to close nuclear power plants, and routinely block any new proposed natural gas pipelines, black outs will become frequent. California’s energy demand doesn’t match solar power’s production.

This dilemma makes “energy efficiency” a key component of the environmental groups’ decrees – which parallels the European Union’s (EU) policies that were a part of Britain’s “exit” decision (known as “Brexit”).

When the EU’s energy efficiency standards for small appliances were first proposed, then German EU energy commissioner, Gunther Oettinger, according to the Telegraph, said: “All EU countries agree energy efficiency is the most effective method to reduce energy consumption and dependence on imports and to improve the climate. Therefore there needs to be mandatory consumption limits for small electrical appliances.” In 2014, the EU, in the name of energy efficiency, sparked public outcry in Britain when it banned powerful vacuum cleaners with motors above 1600 watts. It then proposed to “ban high powered kettles and toasters” as part of the “Eco-design Directive” aimed at reducing the energy consumption of products.

The EU’s Eco-design Directive’s specific requirements are to be published as “Implementing Measures” – which, according to Conformance.co.uk, are made “as European Law Commission Regulations.” It explains that this process allows the directives to “enter into force in all the member states without requiring a transcription process in their National Law. Thus they can be issued much more quickly than the usual Directive Process.”

When the EU’s high-powered toaster/tea-kettle ban was announced, it became “a lightning rod for public anger at perceived meddling by Brussels” – which was seen as “intruding too much into citizens’ daily lives.” When the ban was announced, retailers reported a spike, as high as 95 percent, in toaster and electric tea-kettle sales. The European overreach became such ammunition in Britain’s Brexit referendum, that Brussels stalled the ban until after the election and engaged in a now-failed public relations exercise with “green campaigners” to speak out in favor of the toaster and tea-kettle regulations that were believed to have “considerable energy saving potential.”

The Brits didn’t buy it. It is reported that top of the list for “leave” voters were “EU Rules and Regulations.” Matthew Elliot, chief executive of the Vote Leave campaign said: “If we vote remain we will be powerless to prevent an avalanche of EU regulations that Brussels is delaying until after the referendum.”

Brussels’ toaster and tea-kettle ban, which were perceived as an assault on the British staples, has been called “bonkers” and “too barmy to be true.” Specifically addressing the ban, Elliot said: “The EU now interferes with so many aspects of our lives, from our breakfast to our borders.” David Coburn, a UK Independence party MEP from Scotland, who recently bought a new toaster and tea kettle grumbled: “I think I must have bought a euro-toaster, I have to put bread in it five times and it’s still pale and pasty. Perhaps it’s powered by windmills. And the kettle? Watching a kettle boil has never been so boring.”

While energy efficiency directives banning Keurig coffee makers would be more likely to draw similar ridicule from Californians, there is a lesson to be learned from the Brexit decision: too much regulation results in referendums to overturn them. It is widely believed that, with Brexit and new leadership, many of the EU’s environmental regulations, including the Paris Climate Agreement, will be adjusted or abandoned.

More and more Americans are reaching the same conclusion as our British cousins about the overreach of rules and regulations. As Coburn concluded: “What we want is to let the free market reign, not this diktat by bureaucrat.”

The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc., and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). She hosts a weekly radio program: America’s Voice for Energy – which expands on the content of her weekly column. Follow her @EnergyRabbit.

Fixing the folly of food for fuel?

May 24, 2016 · Posted in Business and industry, Marita Noon, National politics, Politics, Radical Green · Comments Off on Fixing the folly of food for fuel? 

Commentary by Marita Noon

(Editor’s note: since Marita was “not in love with” the original title and encouraged those who run her work to rename this piece, I changed it to what you see above.)

The Renewable Fuel Standard (RFS) – also known as the ethanol mandate – was passed by Congress in 2005 and expanded in 2007. Regardless of market conditions, it required ever-increasing quantities of biofuel be blended into the nation’s gasoline supply – though the Environmental Protection Agency (EPA) does have the flexibility to make some adjustments based on conditions, such as availability and infrastructure.

At the time of its passage, it was unfathomable that a decade later Americans would be consuming less gasoline, not more. Instead of requiring a set, or even growing, percentage of ethanol be used, the law called for an increasing amount of gallons – which has created unforeseen complications.

Since the law was passed, due to increased fuel efficiency and a generally sluggish economy (meaning fewer people are driving to and from work every day) we’ve been using less gasoline, not more. Requiring more and more ethanol in less and less gasoline is not what the original law intended.

It was believed that the RFS would help achieve energy independence and reduce CO2 emissions – both ideas from a different era.

The RFS was passed at the low point of a decades long decline in U.S. oil production. At the time, no one knew that the trend line would totally reverse due to American ingenuity and the innovations of horizontal drilling and hydraulic fracturing that have unleashed the new era of abundance. Additionally, it was believed that corn-based fuel (which is the primary source for ethanol in the U.S.) would reduce carbon dioxide emissions – though the results have been questionable at best.

Since the RFS became law, numerous studies have been done to determine the environmental benefit of ethanol over gasoline – many of which conclude that ethanol is actually more detrimental than gasoline. At a recent House Oversight Committee hearing, John DeCicco, a research professor at the University of Michigan’s Energy Institute, said, according to Morning Consult, “the studies assuming biofuels are carbon neutral are flawed.” Morning Consult reports: “he has found ethanol’s net emissions to be as much as 70 percent higher than traditional gasoline.”

Ethanol has an unlikely collection of opponents. Addressing ads put out by the ethanol lobby positing that only “big oil” wants to end the ethanol mandate, FactCheck.org disputes the claim: “Several environmental groups oppose it as well. So does a wide coalition that includes restaurant owners concerned about upward pressure on food prices and boat manufacturers upset at the problems that ethanol can cause in marine engines.”

Despite the controversy, the EPA claims the RFS is a “success.” Janet McCabe, acting assistant administrator for EPA’s Office of Air and Radiation, says: it “has driven biofuel production and use in the U.S. to levels higher than any other nation. This administration is committed to keeping the RFS program on track, spurring continued growth in biofuel production and use, and achieving the climate and energy independence benefits that Congress envisioned from this program.”

With this in mind, it is no surprise that the biofuel industry – which wouldn’t exist without the ethanol mandate – was unhappy when, on May 18, the EPA released its biofuel blending requirements for 2017. Using its ability to make adjustments, the EPA announcement was less than the law required, but more than the market demands. The Wall Street Journal (WSJ) states; “EPA officials said they were seeking to strike a balance between Congress’s goal of using more ethanol and the realities of the current fuel market and infrastructure.” Instead, no one was happy.

In Biomass Magazine, McCabe defends the action: “The fact that Congress chose to mandate increasing and substantial amounts of renewable fuel clearly signals that it intended the RFS program to create incentives to increase renewable fuel supplies and overcome constraints in the market. The standards we are proposing would provide those incentives.”

Chet Thompson, president of American Fuel & Petrochemical Manufacturers, which represents refineries regulated under the standard, responded: “EPA’s proposal threatens to force consumers to use more biofuel than vehicles, engines and fueling infrastructure can handle.” He says: “the proposed volumes still go beyond marketplace realities.”

In contrast, a statement from Chip Bowling, president of the National Corn Growers Association said: “In the past, the EPA has cited a lack of fuel infrastructure as one reason for failing to follow statute. Our corn farmers and the ethanol industry have responded. Over the past year, we’ve invested millions of dollars along with the U.S. Department of Agriculture’s Biofuel Infrastructure Partnership to accelerate public and private investment in new ethanol pumps and fuel infrastructure. The fact is, today’s driver has more access than ever to renewable fuel choices.”

Regarding the EPA’s May 18 decision, DeCicco told me: “The EPA is trying to pick an economic middle road between the proponents and the opponents. But, through the RFS, the environment has been run off the road. Contrary to what has been promoted by the Department of Energy and some other government agencies, biofuels make CO2 emissions worse rather than better.”

At the aforementioned House hearing, Representative Jim Jordan’s (R-OH) opening statement called the RFS “a classic example of what happens when you get a bunch of politicians together who think they’re smarter than the marketplace.”

Frank Macchiarola, downstream director at the American Petroleum Institute, is calling on Congress to “repeal or significantly reform the RFS.” He asserts: “Members on both sides of the aisle agree this program is a failure, and we are stepping up our call for Congress to act.”

Proving Macchiarola’s point, before the 2017 requirements were released, on May 10, U.S. Representatives Bill Flores (R-TX), Peter Welch (D-VT), Bob Goodlatte (R-VA), Jim Costa (D-CA), Steve Womack (R-AR), and Cedric Richmond (D-LA) introduced bipartisan RFS reform legislation. The Food and Fuel Consumer Protection Act, H.R. 5180, limits the RFS mandate to levels that our nation’s cars, trucks, boats and other small engines can safely accommodate. The bill “directs EPA to consider current market realities and cap the maximum volume of ethanol blended into the transportation fuel supply at 9.7 percent of projected gasoline demand.” Following the news, the bill’s cosponsors issued a statement calling the RFS “unsustainable.”

It is time to get back to allowing the free market – not Congress, not unelected bureaucrats, not mandates, not artificially spurred growth in a chosen industry – to determine our fuel choices. Because ethanol is an effective octane-boosting additive, it will always have market demand. Farmers who’ve invested in it will not be driven out of business. The Food and Fuel Consumer Protection Act, while not repealing the RFS outright (which would be tough to pass), offers a reasonable fix to well-intended, but flawed legislation.

The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc., and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). She hosts a weekly radio program: America’s Voice for Energywhich expands on the content of her weekly column. Follow her @EnergyRabbit.

The stampede for higher rates

Back on Tuesday I promoted Marita Noon’s most recent column on social media with the promise to do a Maryland-centric follow up “If I think about it this week.” (I planned to all along, but sometimes I forget so I figured I better cover myself.) Anyway, the passage that piqued my interest was this one:

In California, where (billionaire and liberal Democrat political backer Tom Steyer) has been a generous supporter of green energy policies, he helped pass Senate Bill 350 that calls for 50 percent renewable energy by 2030. California’s current mandate is 33 percent by 2020 – which California’s three investor-owned utilities are, reportedly, “already well on their way to meeting.” It is no surprise that California already has some of the highest electricity rates in the country. Analysis released last week found that states with policies supporting green energy have much higher power prices.

In doing research for the monoblogue Accountability Project, which I am in the process of completing now, I stumbled across two bills which dovetail nicely with both this article and another recent commentary by Noon regarding solar power mandates and incentives. I’ll tackle the latter issue first.

For several years the state of Maryland has mandated a certain percentage of electrical power be derived from renewable sources, with a proposed new version of the law (HB1106/SB921)retaining the 13.1% share required for 2017 but increasing the carveout for solar energy from 0.95% to 1.15%. This bill also proposed that the share of both renewables and solar power increase at an accelerating rate, eventually ratcheting up the requirements to 25% and 2.5%, respectively. While that would be great news for the solar industry, it would be bad news for consumers – according to the information provided with these bills the increase in monthly electric bills to an average consumer if this measure is enacted could be as much as $3.06 per month by 2020. However, Maryland’s Department of Legislative Services cautions (page 7 of the Fiscal and Policy Note) predicting this increase can only be “for illustrative purposes” because of all the factors involved.

The reason behind the rate increases is the payment to the state called the Alternative Compliance Payment (ACP), which also is affected by the bill. The proposal actually would decrease slightly the ACP for all renewable energy sources except solar from 4 cents to 3.75 cents per kilowatt-hour, or, in a more practical term, from $40 per megawatt-hour (MWh) to $37.50 per MWh. (An average home is considered to use 1 megawatt-hour of electricity per month.) It also gives utilities a temporary break on the solar energy carveout, where the fee for a shortfall would decrease from a scheduled $200 per MWh in 2017 and 2018 to $195 and $175 for 2017 and 2018, respectively. The fee would increase in the out years, however.

When the Fiscal Note predicts that the state itself would incur an additional $2.2 million in electrical costs by 2021, it’s obvious that this proposal would be a costly one for consumers. At this point the bill is in limbo, as it was passed by both the House of Delegates and Senate but has not been signed or vetoed yet by Governor Larry Hogan.

Now let’s turn to the most recent commentary from Noon, where she notes California will mandate 50 percent renewables 14 years hence. Unfortunately, Maryland is not that far behind them as they just enacted SB323, which will take effect in October. Instead of letting this silly notion that our little state can actually do something about climate change by reducing our energy consumption expire – as it would have with no action – this bill instead maintained a 25% by 2020 mandate and increased the mandated energy reduction to 40% by 2030. As an analysis Noon used in her piece shows, Maryland is among the states with the highest electricity bills and follies such as these are a reason why.

Don’t get me wrong: I am definitely for energy efficiency, but it should be in terms of consumer choice rather than government fiat. Those who create and pass the laws rarely embark on any sort of dynamic cost/benefit analysis for their policies, so in this case they’re not considering the effect on ratepayers and job creators in balance with the very dubious pie-in-the-sky notion of affecting our climate. (After all, if it was once warm enough to have the polar expanse of Greenland actually be green, as it was around the turn of the previous millennium – well before the Industrial Revolution or the car-happy society we inhabit now – then how much effect do we really have?) We can hardly predict with any certainly the weather two weeks from now, so why should we trust the accuracy and inerrancy of a climate forecast for 2050 when it’s used as an excuse for confiscatory policy that indirectly benefits those making the forecast?

As I brought up the monoblogue Accountability Project earlier, it shall be noted that the votes on both these bills will be used for this year’s mAP. It’s a shame that just 39 Delegates out of 141 and only two (yes, two!) Senators out of 47 have the potential for getting both these votes correct. Maryland has a relatively powerful environmental lobby thanks to its straddling of Chesapeake Bay, but these were cases where the state’s budding attempt to be more business-friendly and hopefully end its economic reliance on big government should have held sway. While Governor Hogan erred in signing the climate change folly, he can do a more concrete favor for businesses and ratepayers by vetoing HB1106/SB921 and creating a proposal to sunset the ACP for next year’s session.

And while we are at making energy policy, I encourage Governor Hogan to follow the lead of his friend and cohort New Jersey Governor Chris Christie and remove Maryland from the membership rolls of the Regional Greenhouse Gas Initiative. Utilities (and their ratepayers) will thank him from getting us out from under that wealth transfer boondoggle.

“Green” – the status symbol the affluent can afford that costs the poor

March 17, 2016 · Posted in Business and industry, Marita Noon, National politics, Politics, Radical Green · Comments Off on “Green” – the status symbol the affluent can afford that costs the poor 

Commentary by Marita Noon

Researchers have found that some buyers are willing to pay for environmentally friendly products because those products are “status symbols.” A report in the Atlantic states: “Environmentally-friendly behaviors typically go unseen; there’s no public glory in shortened showers or diligent recycling. But when people can use their behavior to broadcast their own goodness, their incentives shift. The people who buy Priuses and solar panels still probably care about the environment – it’s just that researchers have found that a portion of their motivation might come from a place of self-promotion, much like community service does good and fits on a résumé.”

With “green” having become a status symbol, the affluent can afford it. Yet, their desire to “broadcast their own goodness” actually results in higher costs to those who can least afford it.

Solar power is a great example. On the website for SunRun, a solar panel leasing company, through the story of customer “Pat,” they even encourage the “green status symbol” as a sales feature. While Pat may be happy with her solar panels and “hopes that all her neighbors will go solar, too,” her “green status symbol” costs all the utility’s customers who mostly can’t afford to “go solar.”

As I’ve written on many times, the idea of solar leasing works because of tax incentives and a system called “net metering.” First, those tax incentives are paid for by all taxpayers. Anytime the government gives something away, everyone pays for it. Net metering is a little harder to understand. In short, the utility is required by state laws to purchase the extra electricity generated by rooftop solar panels at the full retail rate – even though they could purchase it at a fraction of the cost from the power plant. As more and more people sign up for these programs, it increases the overall cost of electricity. Remember, however, those with solar panels could have a zero dollar utility bill but they are still using electricity from the utility company at night and generate additional customer service costs such as transmission lines. Ultimately, the cost of electricity goes up on the bills of non-solar customers. Due to this “cost shifting,” many states are changing the net metering policies so solar customers cover the unpaid grid costs. However, as has happened recently in Nevada, the revised programs change the economics and make it unprofitable for companies to operate in the state.

This is clear to see in overall rising electric costs – about 3 percent per year according to the Institute for Energy Research – despite the main fuel costs (coal and natural gas) being at all-time lows.

Earlier this month, Investor’s Business Daily (IBD) addressed another interesting angle: “Green energy can’t compete with $30 oil.” The only way for “green” energy to survive, it says, is: “by the government forcing people to buy them and jacking up electricity and heating prices to families and businesses.”

A new study from the University of Chicago, referenced by IBD, concludes that for an electric vehicle to be cheaper to operate than the modern internal combustion engine, “the price of oil would need to exceed $350 a barrel.” The IBD states: “without massive additional taxpayer subsidies to companies such as Tesla, the price of oil would have to not just double or triple, but rocket more than 10-fold before battery-operated cars make financial sense.”

Yet, sales for the Tesla Model S, the International Business Times (IBT), reports: “actually rose 16 percent last year, in part because they serve as status symbols or appeal to the environmental concerns of well-to-do drivers.”

On March 11, in the Wall Street Journal, columnist Holman Jenkins writes: “Voters should be mad at electric cars.” Why? Because, as he explains: “how thoroughly Tesla’s business model depends on taxpayer largess.” Jenkins states: “Tesla’s cars have status cachet, yes. Even some middle-class customers might be attracted, notwithstanding low gas prices, as long as helped by an enormous dollop of taxpayer favoritism.” As he lays out for the reader the “absurdity of their subsidy regime,” Jenkins concludes: “And you wonder why, on some level voters sense that our political class has led America into a dead-end where the only people doing well are the ones who have subsidies, regulation and political influence stacked in their favor.”

Alternative fuels have also taken a hit with low oil prices. According to IBT: “corn ethanol and algae-based diesel need oil prices at around double today’s levels – or higher – to compete with fossil fuels.”

Another fixture of the “green” social movement that has taken a toll in the low oil-priced environment is, surprisingly, recycling. Calling recycling a “$100-billion-a-year business,” National Public Radio reporter Stacy Venek Smith, points out: “Plastic is made from oil, so when oil gets cheap, it gets really cheap to make fresh plastic. When the price of oil gets really low, using recycled plastic can actually be more expensive because it has to be sorted and cleaned.” In Salt Lake City, KUTV reported: “Many businesses are finding it cheaper to manufacture new plastic than to use recycled materials.” In Montana, according to the Philipsburg Mail, plastics are no longer being picked up for recycling “because the price per pound was so low, it didn’t cover the cost of gas and mileage to make the trip.”

The problem is international. Germany has a reputation as a recycling model with a goal of 36 percent of its plastic production coming from recycled materials and “German consumers finance recycling via licensing fees, which are added on to the price of the products they purchase,” says Deutsche Welle, Germany’s leading organization for international media development, in a report titled: “Low oil prices threaten Germany’s plastics recycling.” It states: “For manufacturers with eyes firmly fixed on costs, opting for cheaper new plastics would be the more economically attractive option.” However, many companies, wanting to appear “environmentally friendly” will still “pay up for recycled plastics, despite higher costs” – meaning higher consumer prices for the plastics they produce.

Addressing the recycling problem, The Guardian states: “Recycling only works when there’s someone on the other side of the equation, someone who wants to buy the recycled material.”

Fortunately for the recycling industry, but bad for consumers who pay higher prices for plastic products, the Philipsburg Mail concludes: “A lot of Fortune 500 Companies still want to purchase recyclables to meet sustainability goals.”

Despite claims of “green prosperity” that implies such policies can “fight poverty and raise living standards,” the opposite is true. Everyone pays more – even those who can least afford it – so the elites, seeking green status symbols, can feel good and appear to be community leaders.

The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc., and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). She hosts a weekly radio program: America’s Voice for Energy—which expands on the content of her weekly column. Follow her @EnergyRabbit.

Both parties are fractured, but on energy, each is unified

March 10, 2016 · Posted in Business and industry, Campaign 2016 - President, Marita Noon, National politics, Op-ed columns, Politics, Radical Green · Comments Off on Both parties are fractured, but on energy, each is unified 

Commentary by Marita Noon

There is no shortage of news stories touting the splits within each party.

The Democrat divide is, as NBC News sees it, between dreamers and doers—with the International Business Times (IBT) calling it: “a civil war over the party’s ideological future.” The Boston Globe declares that the “party fissures” represent “a national party torn between Clinton’s promised steady hand and Sanders’ more progressive goals.”

The Republican reality is, according to IBT, a battle between moderates and conservatives. The party is being “shattered” by the fighting between the establishment and the outsiders. The New Yorker said the days following the Detroit debate have “been the week of open civil war within the Republican Party.” Former standard-bearer, Mitt Romney, laid the foundation for a floor fight at the party’s Cleveland convention. Peggy Noonan, in the Wall Street Journal, states: “The top of the party and the bottom have split.” She describes the party’s front runner this way: “He is a divider of the Republican Party and yet an enlarger of the tent.”

Candidates from both sides of the aisle claim to be unifiers. But when it comes to energy issues, each party is already unified—though each is totally different.

Generally speaking, the Democrats want more government involvement—more government-led investment and federal regulation. In contrast, Republicans want the free market—consumer choice—not government to determine the winners and losers.

The next president will have a significant impact on how America produces, uses, and distributes energy.

In response to frequent questions from talk show hosts regarding the candidates’ energy plans, now that the field has winnowed, I set out to write a review. However, my research revealed that a candidate-by-candidate analysis would be repetitive. Instead, I’ll lay out the distinctive direction each party would drive energy policy and highlight the minor differences within the candidates.

First, one must look at climate change, as, despite repeated failed predictions, it has been the driver of energy policy for the past decade.

The Democrat candidates believe that climate change is a crisis caused by the use of fossil fuels. Therefore, both Senator Bernie Sanders and Secretary Hillary Clinton opposed the Keystone pipeline and lifting the oil export ban. Each supports restricting drilling on federal lands and federal hydraulic fracturing regulations to supersede the states’ policies. At Sunday’s CNN Debate, both opposed fracking—though Sanders was more direct about it. Sanders and Clinton favor increased Environmental Protection Agency (EPA) efforts to encourage the use of renewable energy sources.

They would continue the policies, such as the Clean Power Plan, advocated by President Obama—with Sanders being more progressive than Clinton. He wants to institute a tax on carbon emissions, ban all drilling on federal lands, and has sponsored the “keep it in the ground” bill. She would “phase out” hydraulic fracturing on public lands, end tax credits for fossil fuels and increase government fees and royalties. Both support tax credits for renewable energy.

In the transition away from fossil fuel use, Clinton would utilize nuclear power, while Sanders would put a moratorium on nuclear plant license renewals. She supports hydropower.

Over all, the Democrats approach can be summed up as anti-conventional fuels—resulting in higher costs for consumers.

USNews states: “Clinton and Sanders also have expressed frustration with their political colleagues who deny the link between fossil fuel combustion and climate change.”

The four remaining Republican candidates have slightly differing views on climate change—though, unlike their “political colleagues,” none bases his energy policies exclusively on it.

Donald Trump is the biggest opponent of climate change having called the man-made crisis view a “hoax” and tweeting that the Chinese started the global warming ruse “in order to make US manufacturing non-competitive.” In his book, Crippled America, Trump opens his chapter on energy with a tirade on climate change in which, talking about historic “violent climate changes” and “ice ages,” he acknowledges that the climate does change, but concludes: “I just don’t happen to believe they are man-made.”

Senator Ted Cruz is next. He’s stated: “If you’re a big-government politician, if you want more power, climate change is the perfect pseudo-scientific theory … because it can never, ever, ever be disproven.” He, too, supports the view that global warming is a natural phenomenon rather than man-made.

Senator Marco Rubio believes the climate is changing. He’s said: “The climate’s always changing—that’s not the fundamental question. The fundamental question is whether man-made activity is what’s contributing most to it. I know people said there’s a significant scientific consensus on that issue, but I’ve actually seen reasonable debate on that principle.” He’s added: “And I do not believe that the laws that they propose we pass will do anything about it. Except it will destroy our economy.”

Governor John Kasich’s views cut “against the grain in the Republican Party” in that he believes climate change is a problem—though he doesn’t support curbing the use of fossil fuels. His state, Ohio, is rich with coal, oil, and natural gas and he believes low-cost reliable energy is “the backbone of America’s economy.” The Hill quotes him as saying: “I believe there is something to [climate change], but to be unilaterally doing everything here while China and India are belching and putting us in a noncompetitive position isn’t good.”

Regardless of their specific views, none of the Republican candidates sees climate change as an “existential crisis,” as Clinton called it on Kimmel Live—and their energy policies reflect that.

All four agree the Keystone pipeline should be built, are critical of the EPA’s aggressive regulations (instead, they support the regulation of energy production at the state and local level), and want to spur economic growth by increasing American energy production and reducing our reliance on foreign sources.

Though Kasich signed legislation freezing Ohio’s law requiring increasing use of renewables, Kasich is the most supportive of them saying: “I believe in wind and solar, there are big subsidies on it but that’s okay.”  He also acknowledged that mandating 20-25 percent renewables by a set date is “impossible” and will “throw people out of work.” Cruz and Rubio have voted against production tax credits for wind and solar and against setting a national renewable energy standard. In Iowa, Cruz stood up to the ethanol lobby (he’s repeatedly called for an end to the ethanol mandate), while Trump pandered to it. Rubio and Kasich would allow the ethanol mandate to sunset. In his book, Trump states that the big push to develop “so-called green energy” is “another big mistake” that is “being driven by the wrong motivation.” He calls renewables: “an expensive way of making the tree huggers feel good about themselves.” In contrast, he’s promised to “revive Kentucky’s coal industry.”

Overall, the Republicans views can be summed up as embracing the positive potential of America’s energy abundance—resulting in lower energy costs.

If you believe that effective, efficient, economic energy is the lifeblood of the American economy, you know how to vote in November. The contrast is obvious.

The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc., and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). She hosts a weekly radio program: America’s Voice for Energy—which expands on the content of her weekly column. Follow her @EnergyRabbit.

Radio days volume 20

March 9, 2016 · Posted in Campaign 2016 - President, Marita Noon, Maryland Politics, National politics, Personal stuff, Politics, Radical Green · Comments Off on Radio days volume 20 

I really had to blow a lot of dust off this series – its last installment was in July of 2013 – but I will be on the internet radio tomorrow morning at 11:00 thanks to radio hostess (and new monoblogue contributor) Marita Noon. She asked me to come on this week’s installment of her “America’s Voice for Energy” program to discuss a post I did last year.

It came about because she was doing a piece on where the candidates stood on energy (which will be her debut post here tomorrow morning) and I noted to her via social media that I had done quite a bit of research last summer on that very topic as part of my “Dossier” series. She wanted to discuss that piece and other thoughts I had on the subject, thus early this morning we recorded my segment of her show, which will be the opening segment. Thirteen minutes may seem like a long time to fill on the radio, but we were rolling so well I almost didn’t get to promote my site.

Yet there are some other things which were sadly left on the cutting room floor, so to speak. Something I would have liked to fill her audience in on further but didn’t have the time to this morning was the unique situation we have here in Maryland with regard to energy. I did get to discuss a little bit about the proposed offshore wind that Martin O’Malley was trying to push, but I wanted to mention that there are hundreds of other jobs at stake in Maryland’s energy industry. (I actually did a little looking up last night because I was curious.)

According to the most recent state report available (2013) there are 401 coal mining workers in the state of Maryland, all based out of Allegany and Garrett counties in Maryland’s western panhandle. No, we’re not West Virginia or Kentucky by any stretch of the imagination but the Obama administration’s “war on coal” isn’t going to help their employment situation, particularly since these coal fields lie close to shale deposits ripe for fracking – unfortunately, a short-sighted General Assembly and Hogan administration put that resource development on hold until 2017.

The other fascinating thing I didn’t get to was the fact that cities up and down the coast are being intimidated into opposing seismic exploration of the ocean floor for the purposes of oil and gas exploration – but had no objection when they went out and did the same thing to map the ocean floor for siting wind turbines. Apparently that was a noble enough cause to kill a few fish over. Honestly, I think the opponents are very aware what is really out there and that’s billions of barrels of oil and trillions of cubic feet of natural gas, all within easy reach of our shoreline and extractable at a cost that would blow the renewables out of the water. (Yes, the pun was intended.)

So take a listen, either live as it happens or later on when it becomes available as a podcast. I believe there are three other guests on the show, so I’ll be curious to see what they have to say as well when I catch the podcast (I’ll be at work when it’s on live.)

Let’s just hope that the long radio slump is over. Thanks to Marita for having me on as a guest, albeit a little reluctantly since I have been under the weather the last few days. But I managed to avoid a Hillary-style coughing jag and pushed through.

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