Cooler Heads Digest 2 March 2012

2 March 2012


WND Books this week published Senator James M. Inhofe’s excellent new book, titled “The Greatest Hoax: How the Global Warming Conspiracy Threatens Your Future.” To purchase to copy, click here.

In the News

Bill Clinton: “Embrace” Keystone XL
Darius Dixon & Dan Berman, Politico, 2 March 2012

Chevy Volt Production “Temporarily” Shut Down
Regina Boone, Detroit Free-Press, 2 March 2012

Energy Will Be Obama’s Waterloo
William Tucker, American Spectator, 2 March 2012

Another Green Stimulus Beneficiary Hits the Skids
Paul Chesser, National Legal and Policy Center, 1 March 2012

One Law for Thee, Another for Me
Marlo Lewis, National Journal, 29 February 2012

Kill the Owls…To Save the Owls?
Matt Patterson,, 29 February 2012

Wind Subsidies vs. Oil Subsidies
David Kreutzer, The Foundry, 28 February 2012

Anti-Fracking Alarmism Debunked by University of Texas Report
Steve Everley, Master Resource , 27 February 2012

News You Can Use
Oil and Gas Production on Federal Lands Plummets

According to the Interior Department, production of natural gas on federal lands and waters in fiscal 2011 dropped 11 percent from the previous year. Oil production dipped nearly 14 percent.

Inside the Beltway
Myron Ebell

President Obama: Rising Gasoline Prices Are Everyone Else’s Fault

President Barack Obama’s frantic efforts to deflect blame for rising gasoline prices continued this week and became even more incoherent and contradictory.  Following up his speech on energy policy last week at the University of Miami in Florida, on 1st March the President spoke at Nashua Community College in New Hampshire

President Obama repeated some of the same points that he made in Miami, but dropped any mention of the promising research in using algae to produce biofuels.  He took credit for increasing domestic oil and gas production, but argued that “…anybody who tells you that we can just drill our way out of this problem does not know what they’re talking about or they're not telling you the truth.  (Applause.) One or the other.” 

According to the President, that’s because the United States consumes 20% of the world’s oil production, but has only 2% of the reserves.  “And no matter what we do, it's not going to get much above 3 percent.”  This is a simple misunderstanding that anyone who knows anything about oil statistics could correct.  The U. S. has only 2% of the world’s proven reserves.  The U. S. also has more areas of high potential reserves that haven’t been explored than any other country.  Until those areas are explored, the oil that they possibly contain is not included in the estimate of proven economically recoverable reserves.

The President went so far in taking credit for recent increases in U. S. oil production that he had a chart handed out to those attending his Nashua speech.  As has been pointed out repeatedly, increasing domestic oil and natural gas production has come entirely from private lands.  Production from federal lands and Outer Continental Shelf areas has declined and is forecast to continue to decline as a result of Obama Administration policies. 

The President went on to argue that the solution to current high gas prices was to be found in the administration’s long-term policies to decrease consumption of oil by requiring much higher Corporate Average Fuel Economy (or CAFÉ) standards for cars, light trucks, and heavy trucks and to develop alternatives that could replace oil.  Wind and solar power apparently qualify because higher CAFÉ standards will increase the number of electric vehicles being sold.

If decreasing demand can lower gasoline prices, then increasing supply must also lower gasoline prices.  The President could lower oil futures contracts tomorrow if he announced that he now supported legislation to open the Arctic National Wildlife Refuge in Alaska and significant OCS tracts to oil exploration.  If he added that he would also support language to expedite leasing and permitting on all federal tracts, the price declines could be quite dramatic.

Yergin Disputes Obama on Oil Prices

Daniel Yergin of Cambridge Energy Research Associates spoke on 16th February to a large audience at the U. S. Chamber of Commerce about his new book, The Quest.  Yergin said that one of the reasons oil prices had gone up recently was because surplus capacity had declined from two to three million barrels per day to 1.8 to 2.5 million barrels per day.  Which is to say that a reduction in surplus capacity of a half million barrels per day or less has made a big difference in oil prices.  Yet President Obama continues to argue that production increases won’t lower oil prices.   In response to a question, Yergin offered three practical policies: streamline permitting of oil production on federal lands, keep funding basic energy research, and build the Keystone XL Pipeline.  The Obama Administration is getting two out of three wrong.   

Energy Secretary Chu Says Goal Is Not To Lower Gasoline Prices

Energy Secretary Steven Chu didn’t help the President on gasoline prices when he testified before the House of Representatives’ Appropriations Committee on 28th February.  In response to a question from Rep. Alan Nunnelee (R-Miss.) about whether the Administration’s policies were intended to lower gasoline prices, Secretary Chu replied, “No, the overall goal is to decrease our dependency on oil….” 

Obama Welcomes Keystone Pipeline While Continuing To Block Keystone Pipeline  

TransCanada Corporation of Canada announced this week that they would go ahead and begin construction of one section of the proposed Keystone XL Pipeline running from the oil transportation hub at Cushing, Oklahoma to refineries in Texas and Louisiana near the Gulf of Mexico.  Because this section is entirely within the United States, it does not require approval by the President.

Since President Obama didn’t have to make a decision that would enrage his environmental pressure group allies, the White House immediately welcomed TransCanada’s decision.  The White House added that TransCanada’s new application for a permit to build the section of the pipeline from Alberta’s oil sands to Cushing would be carefully considered.  Of course, the Administration considered TransCanada’s earlier application for three years before denying it.   

D. C. Circuit Court Hears Oral Arguments in Suit Challenging Endangerment Finding

A three-judge panel of the federal District Court of Appeals for the D. C. Circuit heard two days of oral arguments in the lawsuit challenging the Environmental Protection Agency’s regulation of greenhouse gas emissions using the Clean Air Act.  The consolidated suit, Coalition for Responsible Regulation vs. EPA, challenges the 2009 Endangerment Finding that greenhouse gas emissions endanger human health and welfare, the tailpipe emissions rule, and the “tailoring rule” that exempts smaller stationary emissions sources from being regulated in contradiction of the explicit language in the Clean Air Act.

Across the States
William Yeatman

New Mexico Takes Step Back in Lawsuit against EPA, But Still Likely To Win

The 10th Circuit Court of Appeals in Denver this week denied a motion brought by New Mexico Governor Susana Martinez (R) to stay EPA’s imposition of a visibility improvement regulation known as Regional Haze. In August, EPA disapproved New Mexico’s Regional Haze strategy, which the state had spent years making. In its stead, EPA imposed emissions controls that cost $700 million more than the state’s preferred controls. EPA justified its actions as being necessary in order to achieve an “improvement” in visibility that is imperceptible to 70 percent of people. New Mexico could not meet the high legal threshold to achieve a stay, but it still has a very strong case, because the Clean Air Act clearly renders EPA subordinate to state decision-making on Regional Haze. In September, the Competitive Enterprise Institute and the Albuquerque-based Rio Grande Foundation published a joint study on EPA’s Regional Haze power grab in New Mexico.

Around the World
Brian McGraw

E.U Wants to Take the Market out of Carbon Market

The European Parliament’s industry committee voted in support of a proposal which would allow the European Union’s carbon-market overseers to withdraw “excessive” carbon dioxide permits in order to boost the price of permits, which has dropped below what European bureaucrats deem optimal. Apparently central planning is still difficult.

The proposal has both significant support and significant opposition from E.U politicians and interest groups. It will be voted on later this year as part of larger legislation targeting energy efficiency.  An excellent Financial Times article last month detailed the numerous problems with the EU’s Emissions Trading Scheme: including the theft of millions of permits, fraud, and a prolonged price slump leaving the price of one ton of carbon at 7 Euros, down from a peak of 30 Euros in 2008.

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,