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Thirty-one groups, including the Competitive Enterprise Institute, this week sent a coalition letter to House Members endorsing reform of the Renewable Fuels Standard. Click here to read the letter. And click here to read Rep. Bob Goodlatte’s (R-Va.) bill, H.R. 703.
In the News
Top Ten Most Ridiculous Stunts Pulled by “Ban Fracking” Activists
Dave Quest, Energy in Depth, 6 February 2015
What Would Environmentalists Do If They Owned ANWR?
Shawn Regan, Reason, 5 February 2015
Sierra Club: Saudi Arabia ‘Our Best Ally’ in Keystone Fight
Lachlan Markay, Washington Free Beacon, 2 February 2015
News You Can Use
War on Coal Costs Tens of Thousands of Jobs
A report by the American Action Forum found that under the Obama administration coal mines shed 3,702 jobs from 2008 to 2013 and power plants shed 39,684 jobs.
Inside the Beltway
Obama Budget Requests More Money for Climate Programs
President Barack Obama submitted his Fiscal Year 2016 budget requests to Congress on Monday, 2nd February. The White House summary, available here, includes some major tax changes. The President’s budget proposes to make renewable electricity production and investment tax credits permanent and refundable. The estimated cost over the next decade would be $31.5 billion. On the other hand, the President wants to take away all tax subsidies for the oil and gas industry, including $44 billion in tax breaks using the standard Section 199 deduction which all domestic manufacturing can claim.
According to Jeremy P. Jacobs writing in Energy and Environment PM (subscription required), the budget for EPA requests $52.4 million for six legal support offices, which is an increase of $10 million over current funding. This would allow EPA to hire more lawyers to defend its “Clean Power Plan,” the proposed regulations to reduce greenhouse gas emissions from existing power plants. Jacobs quotes EPA’s explanation: “EPA has identified an urgent need to provide critical legal counsel in support of the EPA's Clean Power Plan."
The Environmental Protection Agency would also get $4 billion for a new “Clean Power State Incentive Fund” to help States that want to make steeper reductions in greenhouse gas emissions from power plants than required by the EPA’s proposed regulations. The rest of EPA’s budget would increase by $452 million or approximately 6% to $8.6 billion.
President Obama also requests that the Congress appropriate $500 million for the UN Green Climate Fund. This is the first payment towards fulfilling the President’s pledge of $3 billion over four years to the GCF. At the UN global warming conference in Copenhagen in 2009, President Obama proposed that the developed countries provide $100 billion a year to the GCF starting in 2020. The U. S. share might be roughly $30 to 40 billion. It looks unlikely that the 114th Congress will appropriate the $500 million requested for this year.
Obama’s National Security Strategy Focuses on Climate Threats
President Barack Obama this week released his administration’s official National Security Strategy. It identifies climate change as a major threat and lays out actions to deal with it through national action to reduce greenhouse gas emissions and international leadership on a new UN climate treaty.
On page 12, the document states: “Climate change is an urgent and growing threat to our national security, contributing to increased natural disasters, refugee flows, and conflicts over basic resources like food and water. The present day effects of climate change are being felt from the Arctic to the Midwest. Increased sea levels and storm surges threaten coastal regions, infrastructure, and property. In turn, the global economy suffers, compounding the growing costs of preparing and restoring infrastructure.” In addition to the President’s climate agreement with Chinese President Xi and progress in negotiations on the forthcoming Paris accord, “The substantial contribution we have pledged to the Green
Climate Fund will help the most vulnerable developing nations deal with climate change, reduce their carbon pollution, and invest in clean energy.” The President’s Fiscal Year 2016 budget request to Congress this week includes $500 million for the Green Climate Fund.
EPA Challenges Bottom-Line Conclusion of State Department Keystone XL Pipeline Analysis
The State Department's Final Supplemental Environmental Impact Statement (FSEIS) on the Keystone XL Pipeline vexes environmentalists. While acknowledging that petroleum made from Canadian oil sands emits 17% more CO2 than other types of heavy crude, State concluded that roughly the same quantity of Canadian oil would be shipped to U.S. refiners whether the pipeline is approved or denied.
The oil would just come by alternate modes of delivery, principally trains but also smaller pipelines and barges. Those other routes are not only more costly but also less energy efficient. According to State, compared to the KXL, the alternate routes would emit 28% to 42% more CO2 [FEIS ES-34]. Implication: If you're really worried about global warming, then you should support the Keystone XL Pipeline. Beautiful!
In a letter earlier this week, EPA Assistant Administrator for Enforcement and Compliance Assurance Cynthia Giles disputes State’s bottom-line assessment. State estimated that as long as crude oil sells for $75 per barrel or higher, "revenues to oil sands producers are likely to remain above the long-run supply costs of most projects responsible for expected levels of oil sands production growth" [FEIS, 1.4-8]. Producers would still earn profits notwithstanding the extra cost of $8 per barrel to ship the oil by rail rather than through a big new pipeline.
Times have changed, says Giles. State published its FSEIS in January 2014, when West Texas Intermediate (WTI) crude sold at about $94 per barrel. WTI crude now sells for about $50 per barrel. Giles quotes State's conclusion that at sustained oil prices of $65 to $75 per barrel the higher transportation costs of shipment by rail "could have a substantial impact on oil sands production levels -- possibly in excess of the capacity of the proposed project." Indeed, State goes on to say that “Prices below this range would challenge the supply costs of many projects, regardless of pipeline constraints, but higher transport costs could further curtail production” [FSEIS, ES-12].
Giles concludes: “In other words, the Final SEIS found that at sustained oil prices within this [$65-$75] range, construction of the pipeline is projected to change the economics of oil sands development and result in increased oil sands production, and the accompanying greenhouse gas emissions, over what would otherwise occur.” She recommends that State should give “additional weight” to the “low price scenario” in the FSEIS “due to the potential implications of lower oil prices on project impacts, especially greenhouse.”
Permit me to translate. The future of Canada’s oil sands industry looked bright a year ago. Today its fate is uncertain. Maybe a sustained period of low prices will force a large contraction and throw tens of thousands of people out of work. So let’s kick ‘em while they’re down! Let’s prevent oil companies from investing their own capital to improve the economics of their industry.
To opponents, the Keystone XL Pipeline is objectionable precisely because it will improve the efficiency of an industry they believe should not exist. They may be right that blocking Keystone will decrease rather than increase CO2 emissions. It doesn’t matter. It’s climatologically irrelevant.
Even if we make the unrealistic assumption that the KXL will always run at full capacity (830,000 barrels per day) and each barrel will be additional oil in the global supply that would otherwise remain in the ground, EPA's own climate model projects a warming contribution of 0.01ºC by century's end – an “inconsequential and unmeasurable impact,” observes Cato Institute scientist Chip Knappenberger.
Let’s cut to the chase. A for-profit business will not produce what it cannot sell. And if you can’t sell, you go out of business. EPA knows that. So do its environmentalist allies. That’s why they seek to block the KXL, oppose lifting the 40-year-old ban on crude oil exports, and oppose construction of export terminals for coal and liquefied natural gas.
The day cannot come too soon when we have an administration that does not view its mission as crippling and bankrupting major industries of the U.S. economy.
Around the World
UNFCCC: Saving the World from Global Warming Requires Total Transformation of the Global Economy, Directed by the UNFCCC
Leading global warming alarmists often claim that saving the world from global warming will be easy. Research reports from universities and environmental groups are regularly published that show the costs will be minimal and the costs of not doing it will be astronomical. As former Vice President Al Gore, Nobel Prize and Oscar winner, puts it, how can it be costly to replace dirty, expensive energy from coal, oil, and natural gas with clean, free energy from wind and solar?
But every year or two, a leading alarmist lets the cat out of the bag. At a press conference in Brussels on 3rd February, Christiana Figueres, the executive secretary of the UN Framework Convention on Climate Change, said that completely transforming the global economy in a few decades “is probably the most difficult task we [the UN? Mankind?] have ever given ourselves.”
“This is the first time in the history of mankind that we are setting ourselves the task of intentionally, within a defined period of time to change the economic development model that has been reigning for at least 150 years, since the industrial revolution,” Figueres said.
Executive Secretary Figueres is apparently unaware that Communism in the Soviet Union beginning in 1917 and in Maoist China in 1949 intentionally tried to fundamentally transform their economies according to a new model. The results were widely judged to be not altogether successful. Perhaps the United Nations will do better.
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, www.GlobalWarming.org.