In the News
Utilities Lobbying To Raise Your Electricity Bills
Chris Horner, AmSpecBlog, 12 January 2011
In June 2007, at a global warming “summit” in New Hampshire, Rep. Ed Markey (D-Mass.) warned, “If we don’t cut global warming pollution now, the White Mountains will become the ‘Once Upon A Time White Mountains’, because there may be no snow.” This week, snow fell in 49 of 50 states, and covered 70% of the U.S.
Inside the Beltway
Three events this week demonstrated that the EPA’s new regulation to reduce greenhouse gas emissions from large stationary emitters such as power plants is not the only tool being employed to strangle the economy. There’s also the Clean Water Act, the Endangered Species Act, and Corporate Average Fuel Economy or CAFÉ standards.
First, the Clean Water Act
The EPA on Thursday announced that they were going to force the Corps of Engineers to revoke an already granted Section 404 permit to Arch Coal’s Spruce Fork Mine, which is an operating surface coal mine in West Virginia. The New York Times and the Wall Street Journal articles repeated the EPA’s ludicrous claim that new scientific research since the permit was granted in 2007 shows that surface mining will have much more detrimental environmental and health effects than previously thought. My CEI colleague William Yeatman has written about this issue here, and CEI sent out a press release criticizing the decision. EPA’s revocation of a permit that has already been granted for a mine that is already in operation is outrageous. The consequences could be catastrophic if this precedent scares away investors in future energy projects because of the risk that their investment could be lost by the retroactive revocation of an operating permit.
Second, the Endangered Species Act
The polar bear was listed as a threatened species by President George W. Bush’s Secretary of the Interior Dirk Kempthorne in 2008. Last month, President Obama’s Interior Department designated 187,000 square miles in the Chukchi and Beaufort Seas off Alaska’s north coast as critical habitat. Interior also explained that the designation of critical habitat would require more environmental scrutiny of offshore oil and gas exploration and production, but that it would not be used to ban drilling. The Center for Biological Diversity on Thursday announced that they would file suit in federal court to force Interior to ban all oil and gas drilling within the critical habitat designation. This is a game that has often been played by environmental pressure groups working with their allies in the executive branch (and often those allies were formerly employed by environmental pressure groups). Interior Secretary Ken Salazar can claim that he is trying to be reasonable and to balance environmental and economic interests, but will then probably reach a settlement with the Center for Biological Diversity to ban some or all drilling in the designated critical habitat. Once the court approves, the settlement will have the force of law and will be nearly impossible to overturn.
Third, CAFE standards
In 2009, the Obama Administration did a deal with the State of California and the auto industry. The auto industry thought they were getting some mythical beast called “regulatory certainty” in return for agreeing to a CAFE standard of 35.5 miles per gallon for cars and light trucks by 2016. First, EPA said last fall that they were considering raising that to up to 62 miles per gallon by 2025. Now, the California Air Resources Board is making sounds that it wants to control the process by setting its own higher standards beginning in 2017, which would precipitate the same mess that the auto industry assumed they had alleviated with their 2009 deal over the California Waiver. So this week the Alliance of Automobile Manufacturers sent a letter to Rep. Darrell Issa (R-Calif.), the new Chairman of the House Oversight and Government Reform Committee, and Rep. Fred Upton (R-Mich.), the new Chairman of the House Energy and Commerce Committee, asking for help.
I don’t have much sympathy for the automakers because they were warned that this is what would happen (I know because I and my colleagues at CEI were among those warning them publicly), but it needs to be kept in mind that the ultimate victims will be consumers who want to buy cars.
National Commission Spill Report: Too Anti-Drilling Instead of Anti-Spilling
The BP Deepwater Horizon Spill Commission report is out and its recommendations would spell bad news both for energy industry jobs and the future price at the pump. The administration-selected panel, dominated by anti-drilling activists but devoid of anyone with actual experience producing energy, proposes to pile new layers of red tape onto a process that already leaves much domestic energy off-limits and creates years of delays for rest. It even includes measures that would virtually shut down new oil drilling in Alaska, though the spill occurred thousands of miles away and under very different conditions in the Gulf of Mexico.
But buried in the report is an important truth - the spill occurred because of a series of blunders by BP and its contractors and was far from inevitable. This contrasts sharply with the recommendations suggesting systemic problems to be fixed by an industry-wide crackdown.
There is ample reason to believe – along with the powerful circumstantial argument that the deadly April 20th explosion and subsequent oil spill is unique amidst the thousands of offshore wells drilled in Gulf – that this incident was due to gross mismanagement and is not a justification for closing the door further on domestic drilling.
The American public is more worried about a repeat of $4.00 gas than a repeat of Deepwater Horizon – and rightly so as the former is vastly more likely than the latter. Reasonable changes to improve safety are warranted, but should occur in the context of a policy that ensures expanded offshore drilling. To do this, Congress should not adopt the report’s recommendations or allow Obama regulators to impose them.
Across the States
As the Cooler Heads Digest reported last week, New Mexico Governor Susana Martinez’s (R) first order of business upon taking office was to overturn outgoing Governor Bill Richardson’s (D) attempt to impose a cap-and-trade program. Predictably, environmentalists filed a lawsuit to block Governor Martinez’s move against energy rationing, and this week the state Supreme Court agreed to take the case. The environmentalists allege that Governor Martinez did not have the authority to block the cap-and-trade scheme, which is interesting in light of the fact that ex-Governor Richardson imposed it without approval from the state legislature.
Around the World
President Barack Obama frequently has cited the supposed success of the Spanish solar power market in order to justify the scores of billions of dollars of taxpayer money that his administration has given to the U.S. renewable energy industry. The President might want to rethink this allusion. A new report this week estimates that the Spanish solar industry has lost more than 30,000 jobs since 2008, due to the rollback of solar subsidies.
The Cooler Heads Digest is the weekly e-mail publication of the Cooler Heads Coalition. For the latest news and commentary, check out the Coalition’s website, www.GlobalWarming.org