Cooler Heads Digest 14 December 2012

14 December 2012

In the News

It Isn’t Easy Being Green
John Goodman, American Spectator, 14 December 2012

Solar Firms Probed for Stimulus Fraud
Carol D. Leonnig, Washington Post, 14 December 2012

House GOP Seeks Answers on Alias EPA Email Accounts
Sean Higgins, Washington Examiner, 13 December 2012

IPCC Fifth Assessment Report Leaked
Anthony Watts, WattsUpWithThat, 13 December 2012

Joe Romm versus Actual Science
Chip Knappenberger, Master Resource, 13 December 2012

Where Does Exxon-Mobil Stand on the Carbon Tax?
Marlo Lewis,, 11 December 2012

Good Will Fracking
Holman Jenkins, Wall Street Journal, 11 December 2012

We Don’t Need an Energy Plan
William Tucker, Nuclear Townhall, 10 December 2012

Best Energy Policy? None
John Sununu, Boston Globe, 10 December 2012

The Costs of Ethanol
Greg Pollowitz, Planet Gore, 10 December 2012

News You Can Use
Wind Subsidy “Phase Out” Would Cost $50 Billion

This week, the wind energy lobby proposed a gradual phase out of its primary subsidy, the 2.2 cents per kilowatt hour wind production tax credit, which is set to expire at the end of this month. According to a preliminary analysis by the American Energy Alliance, the wind lobby’s “compromise” would cost taxpayers $50 billion dollars. Paradoxically, the wind lobby is pushing for this huge taxpayer give-away to be a part of the fiscal cliff negotiations, the purpose of which is to improve the federal government’s balance sheet.

Inside the Beltway
Myron Ebell

EPA Promulgates Needless NAAQS for PM 2.5

The Environmental Protection Agency on December 14th released the final rule setting new National Ambient Air Quality Standards (NAAQS) for fine particulate matter (PM 2.5) or soot.  The new limit of an annual average of 12 micrograms per cubic meter replaces the limit set in 1997 of 15 micrograms.  The rule does not change the twenty-four hour limit of 35 micrograms per cubic meter.

The EPA claimed that the health benefits of reducing soot would be between four and nine billion dollars per year, while the annual compliance costs would be $53 million to $350 million.  EPA Administrator Lisa Jackson said, “The health benefits will mean fewer expensive trips to the emergency room and extended hospital stays.”  Inhaling soot can lead to a variety of lung and heart problems.

The EPA’s cost estimates are so low because of other extremely costly EPA rules already in effect that will have the incidental benefit of reducing particulate matter emissions from power plants, industrial boilers, diesel trucks, etc. 

Counties that are out of attainment with the annual 12 micrograms average will have to take steps to reach the new standards by 2020.  Obtaining permits for new industrial sources of PM 2.5 is very difficult to impossible if they are to be built in areas that are above or close to the NAAQS.  The EPA said that they have identified only 66 counties that are currently out of attainment with the new standard and 47 of those are out of attainment with the present standard.

Wind Lobby Pushes Phony Phase Out

Faced with growing opposition to a straight renewal of the wind production tax credit (or PTC), the American Wind Energy Association (AWEA) on December 12 sent a letter to four members of Congress that outlines their proposal to phase out the PTC over six years.

AWEA’s plan would keep the PTC at its current level of 2.2 cents per kilowatt hour for wind projects that begin construction in 2013 and then reduce it by 10% per year for four years, and end the PTC in 2019.  Denise Bode, the group’s CEO, wrote in her letter to Senators Max Baucus (D-Mont.) and Orrin Hatch (R-Ut.) and Representatives Dave Camp (R-Mich.) and Sander Levin (D-Mich.) that their proposal “would sustain a minimally viable industry.”

Ms. Bode later in the week announced that she was resigning as CEO of AWEA.  She said in a public statement that when the “all-important extension of the Production Tax Credit … is secured, all of my goals …will have been accomplished.”

On the other side of the debate, a coalition of nonprofit conservative and free market groups organized by the American Energy Alliance held a press conference on Capitol Hill on December 13 to launch a 48-hour grassroots lobbying blitz to urge Members of Congress not to renew the wind PTC.  Representative Steve Scalise (R-La.), the incoming chairman of the House Republican Study Committee, and Senator Lamar Alexander (R-Tenn.) spoke at the press conference, along with representatives of ten organizations that belong to the coalition.  

The wind PTC is scheduled by law to phase out automatically on December 31st.  Wind projects that are completed by the end of the year will still qualify for the full 2.2 cents per kWh for the next ten years. 

Across the States
William Yeatman

Gulf Coast Next To Benefit from Fracking

Yet another region of the country is poised to reap a windfall of wealth and job creation thanks to the technological revolution in oil and gas drilling. Over the last decade, American engineers achieved a breakthrough by combining innovations in horizontal drilling with a long-used extraction technique known as hydraulic fracturing. In particular, the marriage of these two technologies made it profitable to extract oil and natural gas from porous rock known as shale. As a result, there have been oil booms in both North Dakota (from the Bakken Shale formation) and Texas (from the Eagle Ford Shale formation). In these States, unemployment is down, and revenues are up. Colorado will be the next beneficiary—Noble Energy is investing $8 billion to tap the oil rich Niobrara Shale formation in Weld County. Now the good news is spreading to the Gulf Coast. Oil companies are now buying up leases throughout central Mississippi and Louisiana, in order to drill the newly accessible Tuscaloosa Marine Shale formation. According to a recent report by the LSU-Basin Research Institute, the formation could hold up to 7 billion barrels of oil.

Around the World
Brian McGraw

UK Gives Green Light on Fracking

The United Kingdom announced this week that they would lift a ban on shale gas exploration, potentially allowing for a natural gas revolution similar to what the United States has experienced in recent years. Given the absence of a significant number of drilled wells, reserve estimates contain significant uncertainty, though industry experts have estimated that UK shale may contain up to 300 trillion cubic feet of natural gas, enough to supply the country for over 100 years. Unsurprisingly, the environmentalists are furious.

Shale gas exploration was halted in 2011 after two small earthquakes were detected near drilling sites in northwest England. The earthquakes are suspected to be tied to wastewater injections, rather than the fracking process itself. The earthquakes detected near drilling sites in the United States have been very low magnitude, between 1.4 and 2.5 on the Richter scale, and are not thought to be damaging. UK regulations are expected to require seismology studies to locate the most appropriate areas for wastewater injection, minimizing the risk of earthquakes.

Quebec to Join California Cap-and-Trade Market

Despite Canada’s formal withdrawal from the Kyoto Protocol, the Canadian province of Quebec has pushed onward with emissions reductions as it prepares to join California’s Cap-and-Trade market in the spring of 2013. Quebec is aiming to achieve a 20% reduction from 1990 emissions levels by 2020. Until the first joint auction, not expected until August of 2013 at the earliest, Quebec will hold quarterly auctions with a permit price of $10 per ton of carbon dioxide, increasing 5% annually. California’s first cap-and-trade auction last month sold 23.1 million permits at $10.09 per ton.

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,