Cooler Heads Digest 17 February 2012

17 February 2012


“The Empire State Divide,” a 22-minute 3-part documentary which examines the decline of rural New York due to the moratorium on hydraulic fracturing and other environmental regulations that suppress economic growth, is now available on The Foundation for Land and Liberty Website.  On a related note, documentary filmmakers Ann McElhinney and Phelim McAleer, who created Not Evil Just Wrong and Mine Your Own Business, are working on a movie to rebut “Gasland,” the anti-hydraulic fracturing documentary. The title of the forthcoming film is “Frack Nation.” Learn more at about how you can become a co-producer of the film by making a contribution of as little as $1 to help pay for production costs.

In the News

DeSmog Blog’s Bogus Expose of Heartland Institute
Marlo Lewis,, 17 February 2012

Heartland Memo Looking Faker by the Minute
Megan McArdle, The Atlantic, 17 February 2012

Federal Funds Flow to Green Energy Companies with Obama Administration Ties
Carol D. Leonnig & Joe Stephens, Washington Post, 14 February 2012

Why Is Government Subsidizing a $104,000 Car?
William Tucker, American Spectator, 14 February 2012

Regulatory Fatigue
Reed Miller, Master Resource, 14 February 2012

In Case We Forgot: Cheap Gas = Jobs
Vincent Carroll, Denver Post, 13 February 2012

Rep. Markey’s Anti-Keystone Proposal Is Illegal
Marlo Lewis,, 10 February 2012

News You Can Use
Sea Level Fell in 2010

According to NASA satellite data, the global average sea level fell 6 millimeters in 2010.

Inside the Beltway
Myron Ebell

House Passes Energy Bill That Includes ANWR and Keystone Pipeline

The House of Representatives voted on Thursday evening, 16th February, for a package of four energy bills that if enacted will greatly expand U. S. oil and natural gas production on federal lands and the Outer Continental Shelf plus permit the Keystone XL pipeline. The omnibus energy bill, H. R. 3408, passed by a vote of 237 to 187.  Twenty-one Democrats voted yes, and twenty-one Republicans voted no.

The most significant provision would require the Department of the Interior to open a small portion of the coastal plain of the Arctic National Wildlife Refuge in Alaska’s North Slope to oil and gas exploration.  Producing oil in ANWR has been an issue since Congress enlarged the Refuge in 1980 and allowed oil production in the coastal plain subject to a report from the Department of the Interior that it could be done without compromising the Refuge’s purpose of protecting wildlife.  That report was issued in 1986.  The Congress passed legislation in 1995 to open ANWR, but President Bill Clinton vetoed it.  The House and Senate passed different bills opening ANWR in 2005, but couldn’t agree on the same bill.

The U. S. Geological Survey estimates that the coastal plain contains over ten billion barrels of economically recoverable reserves.  If exploration wells hit oil, production could begin within a few years.  This is important because production in Prudhoe Bay is declining and the Trans Alaska Pipeline is now running at less than half full.  As production continues to decline, at some point the oil will stop flowing in the pipeline.  Producing significant amounts of oil from offshore leases in the Chukchi and Beaufort Seas is quite a few years away because of permitting delays, serial lawsuits filed by environmental pressure groups, and the physical challenges involved in building the necessary offshore infrastructure in the Arctic Ocean.

Another important provision takes the decision to permit the 1700-mile Keystone XL pipeline from Alberta’s oil sands to Gulf Coast refineries out of the President’s hands and essentially orders the Federal Energy Regulatory Commission to issue the permit within thirty days.  President Obama’s decision in mid-January that he was not going to issue the permit because he couldn’t determine whether it was in the national interest has caused a flurry of activity in Canada to start permitting an alternative pipeline from the oil sands to a port on the British Columbia coast, where the oil would be loaded on tankers bound for China and other Asian countries.

Another title in the bill would require the Administration to lease large Outer Continental Shelf tracts for oil and gas exploration off the Pacific, Atlantic, and eastern Gulf coasts that have the highest potential.  The bill directs the Secretary of the Interior to establish production goals in the 2012-17 OCS plan and provides 37.5% of the federal oil royalties to the States where the oil is being produced offshore.  The fourth title would require the Administration to set rules to begin the development of oil shale in Utah, Colorado, and Wyoming.   

Senator Inhofe Files Resolution To Block Utility MACT Rule

The Obama Administration’s Environmental Protection Agency published in the Federal Register its long-delayed Utility Maximum Achievable Control Technology (or MACT) Rule on Thursday, 16th February.  The Utility MACT Rule sets limits on emissions of mercury, lead, and other heavy metals.  As my CEI colleague William Yeatman has pointed out (more than once), the rule is preposterous.  It has huge costs and no health benefits. 

Senator James M. Inhofe (R-Okla.) immediately announced that he was filing a resolution of disapproval of the Utility MACT Rule under the Congressional Review Act (or CRA).  The CRA provides for straight up-or-down votes in the Senate that require only a simple majority to pass, rather than the 60 votes now customary for taking up any controversial bill on the Senate floor.  Moreover, the resolution can be brought to the floor over the objections of the Majority Leader, Senator Harry Reid (D-Nev.).   If the Senate and the House both vote in favor of the CRA resolution, then it would be sent to President Obama for his signature or, more likely, veto.    

Across the States
William Yeatman

Grid Operator: We Don’t Know If Utility MACT Will Turn Out the Lights

As my colleague Myron Ebell notes above, the Environmental Protection Agency this week published the preposterous Mercury and Air Toxics rule, also known as the Utility MACT. The staff of the Federal Energy Regulatory Commission estimates that the regulation would “likely” cause the retirement of 81,000 megawatts of coal fired electricity. Already, the PJM Interconnection, an independent, non-profit entity that operates the electricity grid in the northeast, has warned that the regulation could cause local reliability problems.

This week, the Midwest Independent Service Operator, which operates the grid in 11 mid-western states, became the first regional transmission organization to caution that the Mercury and Air Toxics rule could cause regional reliability issues. MISO's Clair Moeller this week told Inside EPA (subscription required) that the “dominant worry” is how the region will implement the regulation, given that 61,000 of the 71,000 megawatts of electricity generation managed by MISO is powered by coal, and all 61,000 MW of coal would need to either shut down and install controls or retire or shutdown while a replacement natural gas plant is built, all within the same window. EPA’s proposed mercury rule included a reliability assessment, but it was debunked by both FERC and the PJM Connection. According to MISO’s Moeller, “It's hard to know how big the problem actually is.” This means that EPA published the Mercury and Air Toxics rule before it even knew whether the regulation could turn out the lights.

Around the World
Brian McGraw

European Carbon Market Struggling

Launched 7 years ago, the European Union’s Emissions Trading Scheme (ETS) was meant to provide a reliable price signal to investors, pushing them away from fossil fuels and into carbon-free energy sources. Things haven’t gone as planned. The global recession, as well as a glut of free permits handed out in previous years, has driven the price to emit 1 metric ton of carbon dioxide all the way down to €7, down from €30 per ton in 2008. The current price is too low to justify further investment in non-fossil fuel related energy sources, absent further government mandates.

And mandates the Europeans want. In Europe, when a market doesn’t react the way you think it will react, the preferred fix is to double down rather than back off. A number of green groups, as well as corporations like Shell (which has invested in CCS), are lobbying the EU, asking for either a minimum price floor or a removal of excess permits to drive prices up.

European Union Wants to Create a World Environmental Agency

The European Union, not content with the decline of their own various economies, wants to expand the U.N.’s Environment Programme in a “manner that would give the agency a more explicit mandate to guide global environmental concerns.” According to Energy & Environment News (subscription required), funding for the new World Environment Agency and authority would be boosted to rival that of the International Labour Organization and the World Meteorological Organization. Its mission would be to “provide policy advice” and help guide countries on policies it favors.

The EU will formally make the proposal at the United Nations Conference on Sustainable Development (Rio Earth Summit +20) in June of this year, though it is unlikely that the proposal will have enough support to be adopted.

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,