Cooler Heads Digest 16 March 2012

In the News

President Continues Frantic Response to High Gasoline Prices
Myron Ebell,, 16 March 2012

How the SPR Affects Gas Prices
David Kreutzer, The Foundry, 16 March 2012

What the Skeptics of Climate Change Are Skeptical of: Nordhaus Reconsidered
Eric Dennis, Master Resource, 16 March 2012

Obama’s Oily Desperation Redux
Ross Kaminsky, American Spectator, 16 March 2012

Another EPA Power Grab
Marlo Lewis, National Review Online, 15 March 2012

Energy Secretary Chu Gives Himself an ‘A-‘ for 85% Failure Rate
Hans Bader,, 15 March 2012

The White House Wants To Put Seaweed in Your Gas Tank
Charles Krauthammer, Investors Business Daily, 15 March 2012

U.S. Has 60x More Gas Than Obama Claims
John Merline, Investors Business Daily, 15 March 2012

Rising Sea Levels Seen As Threat to Coasts
Justin Gillis, New York Times, 13 March 2012

Obama Can’t Admit That High Gas Prices Are His Fault—Until He’s Re-elected
Jonah Goldberg, National Review Online, 13 March 2012

Energy Secretary Chu Backpedals on Call for Higher Gas Prices
Ed Henry, Fox News, 13 March 2012

New You Can Use
Poll: Public Blames Obama for High Gas Prices

Americans by 65 percent to 26 percent disapprove of how Obama is handling gasoline prices, according to an ABC News/Washington Post poll conducted March 7-10.

Inside the Beltway
Myron Ebell

Senate Rejects Subsidies to Big Wind, Pickens Payout Plan

The Senate passed its version of the highway bill, S. 1813, this week on a 74 to 22 vote.  Following votes on amendments last week, several more energy-related amendments were defeated on Tuesday, March 13, before the final vote.  The vote tallies on these amendments, which were not germane to the underlying legislation and so required 60 (out of 100) votes to pass, were nonetheless quite interesting.

Senator Debbie Stabenow’s (D-Mich.) amendment to extend a number of tax subsidies for renewable energy, including the wind production tax credit, was defeated 49 to 49.  Forty-nine Democrats voted yes.  Forty-five Republicans and four Democrats—Joe Manchin (D-WV), Claire McCaskill (D-Mo.), Mark Warner (D-Va.), and James Webb (D-Va.)— voted no.  Two Republicans missed all three votes.  This is an encouraging result, but is by no means the end of the massive effort by the wind industry to get their subsidy extended beyond December 31st, as I detail in the item below.

Senator Jim DeMint’s (R-SC)amendment to end all tax subsidies for conventional and renewable energy and for energy efficiency then failed on a 26 to 72 vote.  The twenty-six Republicans voting to go cold turkey on their subsidy addiction were Ayotte (NH), Blunt (Mo.), Burr (NC), Chambliss (Ga.), Coats (Ind.), Coburn (Okla.), Corker (Tenn.), Crapo (Id.), DeMint (SC), Graham (SC), Inhofe (Okla.), Johanns (Neb.), Johnson (Wisc.), Kyl (Az.), Lee (Ut.), McCain (Az.), McConnell (Ky.), Paul (Ky.), Portman (Ohio), Risch (Id.), Rubio (Fla.), Sessions (Ala.), Shelby (Ala.), Toomey (Penna.), Vitter (La.), and Wicker (Miss.). 

Getting twenty-six votes to end all energy subsidies is quite a stunning result, but it’s not quite as impressive as it looks.  Senators Richard Burr (R-NC), Saxby Chambliss (R-Ga.), and Tom Coburn (R-Okla.) turned around and voted to create several new tax subsidies for heavy-duty trucks fueled by natural gas.

The vote on the amendment offered by Senators Robert Menendez (D-NJ) and Burr was 51 to 47 (with 60 votes required for passage).  Besides the three inconsistent Republicans, three other Republicans voted for the Pickens Payoff Plan, which is also known as the NAT GAS Act.  They were Senators Collins (R-Me.), Isakson (R-Ga.), and Snowe (R-Me.).  Thirty-nine Republicans and eight Democrats—Harkin (D-Ia.), Leahy (D-Vt.), Levin (D-Mich.), Nelson (D-Neb.), Pryor (D-Ark.), Sanders (Socialist-Vt.), Stabenow (D-Mich.), and Webb (D-Va.)—voted against the amendment.   

I have been calling the NAT GAS Act, whose chief promoter is billionaire T. Boone Pickens, the Pickens Payoff Plan or the Pickens Your Pocket Plan since last spring.  One of my CEI colleagues calls it the Billionaires’ Bailout.  Any doubts that these pejorative characterizations are justified have been laid to rest this week by an article by Ryan Grim and Michael McAuliff in the Huffington Post. 

The general outlines of their story have been known for some time, but Grim and McAuliff provide a lot of details on the ways in which Pickens has connived with Senate Majority Leader Harry Reid (D-Nev.) to get his bill passed and the vast sums of money that Pickens, George Soros, and others will make.  It has also been reported that House Minority Leader Nancy Pelosi (D-Calif.) and Senators Burr and Chambliss have significant investments in companies that will profit from federal subsidies to natural gas vehicles. 

Big Wind Plots Comeback

A bill was introduced on Thursday by Senator Charles Grassley (R-Ia.) to extend the 2.2 cents per kilowatt hour production tax credit (or PTC) for wind power for two years.  Senators Scott Brown (R-Mass.), Dean Heller (R-Nev.), Mark Udall (D-Colo.), Tom Harkin (D-Ia.), Ron Wyden (D-Oreg.), and Michael Bennet (D-Colo.) are original co-sponsors. 

The sponsors are looking to attach their bill as an amendment to a bigger piece of legislation.  One possibility is as an amendment to the JOBS Act, H. R. 3606, which recently passed the House.  A more likely vehicle is the package of business tax extenders being put together.  Wind lobbyists are pulling out all the stops to get the wind subsidy extended (and if they succeed, many of them will get multi-million dollar bonuses).  If the wind PTC is included in the business tax extenders package, it will be very hard to stop because that bill will be strongly supported by the U. S. Chamber of Commerce and the National Association of Manufacturers.   

Across the States
William Yeatman 

New Mexico

By a unanimous 5-0 vote, the New Mexico Environmental Improvement Board (EIB) today finalized its February decision to repeal a statewide cap-and-trade energy rationing scheme that had been imposed in late 2010 by former Governor Bill Richardson (D), during his final months in office. By contrast, current Governor Susana Martinez (R) made opposition to “cap and tax” a central theme of her successful campaign to replace Richardson. One of her first acts in office was to fire the political appointees who had been responsible for executing her predecessor’s climate policy. According to EIB's Statement of Reasons, which justify its repeal of cap-and-trade, “The Board finds that the record shows that leading climate scientists cannot agree whether man-made greenhouse gas emissions cause global warming.”


On Thursday, EPA announced that preliminary lab results from samples taken from wells in Dimock, Pennsylvania indicate that drinking water there has not been contaminating by hydraulic fracturing drilling. The announcement is embarrassing to EPA, because the Agency had decided to test the Dimock water over strong objections from Pennsylvania officials. In early January, Pennsylvania Department of Environmental Protection Secretary Michael Krancer wrote a letter asking EPA not to second-guess the State’s handling of allegations that gas drilling had contaminated well water in Dimock. Secretary Krancer warned EPA that it would be acting despite the Agency’s possessing only “rudimentary” knowledge of the situation. In a critical response to the letter, EPA Administrator Lisa Jackson insinuated that Pennsylvania was failing to ensure the protection of its own citizens. EPA’s preliminary results suggest that Pennsylvania is capable of ensuring safe, responsible drilling, without the Agency’s oversight.   

Around the World
Brian McGraw

Chinese Use Airbus Orders As Leverage In E.U. Aviation Trade War

Though Chinese officials deny any involvement, a source “close to the situation” told reporters at the Wall Street Journal that the Chinese government is not allowing its domestic airlines to complete the purchase of Airbus planes worth close to $14 billion. This is the next step in the ongoing dispute between the European Union and other major countries concerning the E.U.’s imposition of an aviation cap-and-trade program on foreign airlines landing in E.U. airspace. Last time we checked in on the issue, E.U. officials had dismissed retaliatory actions as “hypothetical” despite a meeting in Moscow where officials from over 20 countries pondered, out loud, retaliatory options. One analyst suggested that the next step might involve Russia increasing fees for airlines flying over Russian airspace, hitting E.U. airlines in the pocketbook. All signs suggest that this situation will get uglier, unless the E.U. decides to back down.

Emissions Going Up, Up, and Away

The OECD released a world outlook report suggesting that absent policy changes, carbon dioxide emissions will continue to rise, and are expected to be 50% higher annually by 2050. The report estimated that total world energy consumption would increase by 80%, with various forms of renewable energy only contributing about 10% to the world energy mix by 2050. It should be noted that predicting the magnitude of technological change 40 years from now is fraught with uncertainty.  The report can be found here.

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,