Cooler Heads Digest 29 May 2015

29 May 2015


The Heartland Institute’s Tenth International Conference on Climate Change (ICCC-10) will take place on Thursday, June 11 and Friday, June 12, 2015, at the Washington Court Hotel in Washington, D.C. Learn more here.

In the News

EPA’s Triple Threat to the Economy
John Eick, Washington Examiner, 29 May 2015

IRS Hands Out $14 Billion for Green Energy, Doesn’t Keep Track of It
Michael Bastasch, Daily Caller, 29 May 2015

Will EPA Scrap the Carbon Capture Mandate?
Marlo Lewis,, 28 May 2015

Wisconsin Gov. Walker Says His State Won’t Comply with Clean Power Plan
Matthew Daly, Associated Press, 28 May 2015

Mr. Obama, “97 Percent of Experts” Is a Bogus Statistic
Richard Tol,, 28 May 2015

End the Ban on Oil Exports
Merrill Matthews, The Hill, 28 May 2015

Self-Service Gasoline: Legalizing Freedom
Robert Bradley, Jr., Master Resource, 26 May 2015

News You Can Use
New Report: Climate Hypocrites

The Media Research Center this month published a new report that details the extent to which media go out of their way to ignore or excuse the hypocrisy of celebrity “environmentalists” who fly their private jets around the world, rent mega-yachts and live in massive mansions. Click here to read "Climate Hypocrites and the Media That Love Them."

Inside the Beltway

EPA Proposes Renewable Fuel Standard (RFS) Biofuel Mandates for 2014, 2015, and 2016
Marlo Lewis

EPA on 29th May proposed Renewable Fuel Standard (RFS) biofuel blending targets for 2014, 2015, and 2016. The agency expects to complete the rulemaking by Nov. 30, which means it will be two years late finalizing the 2014 targets and one year late finalizing the 2015 targets.

The 2007 Energy Independence and Security Act (EISA), which established the RFS program in its current form, mandates that refiners, blenders, and fuel importers increase the amount of biofuel sold in the nation’s motor fuel supply from 4 billion gallons in 2006 to 36 billion gallons in 2022. However, EISA also authorizes EPA to adjust the annual targets based on various factors including “the sufficiency of infrastructure to deliver and use renewable fuel.”

In Nov. 2013, EPA concluded that the 2014 RFS mandate would exceed the “blend wall” — the maximum quantity of ethanol that can be sold in a given year. The blend wall is a product of two factors: the overall size of the motor fuel market and practical constraints on how much can be blended into each gallon of motor fuel sold. Warranty and liability concerns, lack of compatible fueling infrastructure, and, most importantly, anemic consumer demand, effectively limit the standard blend to E10 — motor fuel containing up to 10% ethanol.

Based on the arithmetic of the blend wall, EPA in Nov. 2013 proposed to trim the overall 2014 statutory target from 18.15 billion gallons to 15.21 billion gallons — a 16% cut. That sparked a firestorm of protest from biofuel interests, and EPA has been dithering over the targets ever since – until today.

The targets proposed get mixed reviews from biofuel lobbyists. On the one hand, the targets are lower than the corresponding EISA targets. On the other hand, the proposed 2016 target will exceed the E10 blend wall by 840 million gallons.

EPA assumes up to 600 million of those gallons can be sold via increased sales of E85 – motor fuel blended with up to 85% ethanol. In a coordinated move, the USDA yesterday announced plans to spend $100 million subsidizing the installation of E85 blender pumps.

I predict the agencies will fail to break the blend wall and there will be another RFS crisis in a few years. Here’s why. Ethanol contains about two-thirds’ the energy of an equivalent amount of gasoline. The higher the blend, the worse mileage your car gets, and the more you have to spend to drive a given distance. For example, according to FuelEconomy.Gov, the typical owner of a flex-fuel vehicle would spend an extra $850 to $1,400 annually to operate the vehicle on E85 instead of regular gasoline.

So even if every gas station has an E85 pump, consumers will avoid the fuel in droves, because it is a bad buy. Lower energy content, inferior fuel economy, and higher consumer cost are the root cause of the blend wall. The same factors also explain why the “choice” to buy ethanol must be mandated. EPA’s fix will fail because lack of consumer acceptance is a market barrier that neither regulatory fiat nor corporate welfare can overcome.

Interior Announces Massive Land Lockup To Protect Sage Grouse Habitat
Myron Ebell

Secretary of the Interior Sally Jewell announced on 28th May in Cheyenne, Wyoming, plans to lock up land in ten western States to protect habitat of the greater sage grouse.  The habitat protections are included in 14 Bureau of Land Management resource management plans covering 165 million acres—an area roughly the size of Texas.

The Fish and Wildlife Service is under a federal court order to decide by 30th September whether to list the greater sage grouse as threatened or endangered under the Endangered Species Act.  On the other hand, a rider in the omnibus appropriations bill that Congress passed last December prevents the grouse from being listed during the 2015 fiscal year, which ends on 30th September. 

Representative Rob Bishop (R-Ut.), chairman of the House Natural Resources Committee, immediately criticized Interior’s move: "If the Administration really cares about the bird they will adopt the state plans as they originally said they would. The state plans work. This proposal is only about controlling land, not saving the bird."

Another immediate negative reaction came from the western oil and gas industry.  Kathleen Sgamma, vice president of the Western Energy Alliance in Denver, said:  “The restrictions that will be put on oil and natural gas development are not based on good science and exaggerate the threat of energy development to the bird.”

Across the States
William Yeatman

Kansas Enacts Net-Negative Renewable Energy Law

Kansas governor Sam Brownback (R) yesterday signed into law SB 91, legislation that will convert the state's renewable energy standard into a voluntary goal. At face value, that sounds great. Upon closer inspection, however, the bill doesn’t amount to much. The prior, legally binding target was 20 percent renewables by 2020. As a result of SB 91, this target is now voluntary. But Kansas investor owned utilities reportedly exceeded the 20 percent target last year, so the bill doesn’t actually change the status quo. On the other hand, SB 91 exempts existing renewable energy facilities in the State, mostly wind farms, from property taxes and gives new renewable energy facilities a 10-year property tax exemption.

Tech Companies Send Silly Letter to North Carolina Lawmakers

On a similar note, the North Carolina Senate’s Finance Committee this week passed HB 332, legislation that would halve the state’s renewable energy target, from 12.5 percent to 6 percent by 2021. The bill already has passed the state House of Representatives. In the wake of HB 332’s advance in the state Senate, Apple, Facebook and Google—all of whom operate data centers in the State—sent a joint letter demanding that lawmakers shelve the measure. Notably, the letter was unsigned, most likely due to the fact that no one at any of the companies was willing to publically associate with the letter’s incorrect claim that renewable energy is cheaper than conventional energy.

Around the World
William Yeatman

Norway’s Oil Fund Divests from Coal

A parliamentary finance committee in Norway's parliament this week recommended that the country’s $900 billion sovereign wealth fund divest from all firms that generate more than 30 percent of their output or revenues from coal-related activities. The move struck many as self-unaware, in light of the fact that Norway’s sovereign wealth fund—the world’s largest—is capitalized by the country’s sale of oil and gas. Until 2006, it was formally known as “The Petroleum Fund of Norway.” And while its official name has changed to “The Government Pension Fund,” it is still known colloquially as the “oil fund.”

Japan Government Report: We Can’t Go Green Because It Would Be Too Costly

Japan’s Natural Resources and Energy Agency on Tuesday released a report that concludes the country has no choice but to rely on nuclear and hydrocarbon energy sources through 2030 because switching to renewable energy would create “pressure for drastic rise in energy cost.”

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,