Romney vs. Obama on Energy: Guest Author Geoffrey Styles

The following is an analysis of Mitt Romney's energy policies, by respected energy analyst Geoffrey Styles

After last week's review of President Obama's energy record and campaign materials on energy, Governor Romney's energy plans present a sharp contrast. They are based on a fundamentally different view of energy and the economy, relying on markets to allocate capital to the most productive opportunities, rather than on government to guide a mix of public and private investments along specific paths towards designated ends. They also emphasize technologies that are already deployed at scale today, not those still under development or striving to attain scale. Implicitly, the Romney plan prioritizes supplying the energy for a robust economic recovery over programs designed to address long-term environmental challenges like climate change. These positions present voters with a serious and consequential choice on November 6th.

The Romney campaign's website on energy arrays the candidate's ideas mainly in words, rather than with the kind of images and interactive features that dominate the Obama campaign's sites. Energy is the first plank of Governor Romney's five-point "Plan for a Stronger Middle Class", though it requires a little work to explore the details of his energy program. A list of bullet points is backed up by a lengthy policy paper with numerous references to external sources, but you have to look for it.

The Romney energy plan focuses mainly on oil, gas, coal and nuclear energy, which together meet 91% of current US primary energy demand and which the Department of Energy projects will still provide nearly 90% in 2020 under the policies in place today. You won't find much on his campaign's website about the new renewables that generated electricity equivalent to 2% of our energy use last year, beyond a critique of the administration's investment in Solyndra and a commitment to R&D on new energy technologies.

Among the details of his plan are support for expanded offshore drilling, including areas such as offshore Virginia that were originally in the Obama administration's early-2010 offshore development blueprint, along with a comprehensive assessment of US resources using current technology, rather than further extrapolations based on 1980s technology. Governor Romney proposes expanding energy cooperation with both Canada and Mexico and would approve the entire Keystone XL pipeline. His goal of attaining North American energy independence is aggressive, yet recent analysis by Citigroup puts it within the realm of possibility. It appears to be based on an assessment by Wood Mackenzie, a top-notch energy consultancy, indicating that US oil and natural gas liquids output could expand by 7.6 million barrels per day, with 6.7 million of that coming from federal lands and waters currently off-limits to development. That compares to US net petroleum imports of 8.5 million barrels per day in 2011.

Another aspect of the plan aimed at streamlining the permitting of energy projects could be just as useful for utility-scale renewable energy projects as for oil and gas exploration and production. Regulatory and permitting delays are among the key reasons it takes longer and costs more to develop crucial energy and infrastructure projects here than in many of the countries against which our competitive standing has been slipping. Governor Romney also proposes giving states greater control of permitting on their non-park federal lands. That could substantially increase energy access and output, especially in the west, where the federal government owns over 280 hundred million acres, or 37% of those 11 states, net of tribal lands.

There are also some missing elements. I would have liked to see more about how renewables fit into Governor Romney's vision. He apparently supports the Renewable Fuels Standard but is silent about the increasingly urgent need to reform it. He is on record against the extension of the wind Production Tax Credit (PTC), a 20-year old subsidy roughly equivalent to the current price of natural gas, yet misses the opportunity to explain how all types of energy would be treated under his proposal to reduce corporate income tax rates while broadening the tax base--policy-speak for closing loopholes and eliminating incentives. In last night's debate he said, referring to the $2.8 billion in annual tax incentives for oil and gas identified by the Department of Energy, "... if we get that tax rate from 35 percent down to 25 percent, why that $2.8 billion is on the table. Of course it's on the table. That's probably not going to survive (if) you get that rate down to 25 percent." I'd also like to hear more about how Governor Romney would address greenhouse gas emissions once the economy returns to stronger growth.

Superficially, much of the Romney energy agenda evokes a return to the pre-2008 status quo: heavy on oil, gas and coal, light on renewables, and largely ignoring climate change. I see it from a different perspective: When Barack Obama began running for President in 2007, the US was considered by many to be tapped out on conventional energy, with domestic oil and natural gas production exhibiting signs of deep and permanent decline. In that context it made sense to look beyond those resources to the potential of renewable energy and vehicle electrification, even if the transition involved would be lengthy. That approach also appeared synergistic with reducing greenhouse gas emissions, and a strategy was born. In the meantime, however, it turned out that US oil and gas were far from exhausted, and the most productive new energy technology of this decade wasn't wind, solar or biofuels, but the combination of hydraulic fracturing ("fracking") and horizontal drilling that has unlocked hundreds of trillions of cubic feet of shale gas and tens of billions of barrels of shale oil or "tight oil" resources. Since 2008 the expansion of shale gas drilling has added as much new US energy production as over 250,000 MW of wind turbines or solar panels--8x the wind and solar power added in the same interval. To the surprise of many, the big global energy opportunity of the 20-teens is US hydrocarbons. The Romney plan reflects the unexpected energy transformation we're experiencing.

As in 2008, this blog isn't in the business of endorsing candidates. Energy remains an issue that, like the Cold War, demands bi-partisan cooperation and some level of consistency from one administration or Congress to the next. However, that doesn't prevent me from observing that the energy agendas of the two campaigns are not equally well-suited for a period of serious US fiscal constraints and shrinking federal discretionary expenditures, in which our energy security and economic growth will still depend largely on fossil fuels. In that context, it's highly relevant that the "all of the above" credentials of one candidate depend on oil and gas outcomes that his policies did little to support. Of course, energy isn't the only issue that matters, but then you wouldn't be reading this if you didn't think it was important. _Geoffrey Styles

Go to the original article for links to supporting materials and references.

Al Fin commentary on above article:

There is little doubt that Obama's vague "energy plan" was never more than a corrupt political payoff to campaign bundlers and political supporters. Obama's energy policies have added virtually no jobs, no useful energy, and no boost to the economy -- nothing but more debt.

Obama's approach resembles the disastrous German green boondoggle, a slow motion economic and industrial train wreck -- mitigated only by Germany's pragmatic willingness to forsake "greenness" by a rapid buildup of coal power plants.

Sure, the US has experienced a resurgence of energy jobs due to the shale revolution -- but Obama's EPA is waiting in the wings to cut the legs out from under shale, once Obama is safely re-elected.

Americans have a clear choice on energy policy: Obama's green energy starvation, or Romney's pragmatic attempt to use strong energy production to revive a fading national economy.

An Obama Second Term? Energy Starvation on Steroids

US President Obama is running for re-election in November as an "all of the above energy policy president." But were we to look at the president's actual energy record a bit more closely, we might be less inclined to grant him another four years of power.

Respected energy analyst Geoffrey Styles examines Obama's energy record, and is puzzled by the president's many claims and contradictions, and wonders what Obama is really thinking and planning for America's energy future:

...having focused 90% of its efforts on a set of technologies that look important for the future but will still meet less than 10% of our energy needs for some time to come, they have now hitched their electoral wagon to an oil production surge that they didn't help and partly hindered. I can only imagine that this would be deeply disappointing to those who supported Mr. Obama in 2008 because of his vision for alternative energy and the environment. Nor does it provide much comfort to those who found large portions of that agenda ill-considered or premature. The President's 11th-hour conversion to "all of the above" creates great uncertainty about the course he would pursue with regard to energy for the next four years, if reelected. _Geoffrey Styles

Here is an abbreviated list of Obama's energy record during his first term as US President:

1. Slowing energy production on federal lands. According to a recent report from the Energy Information Administration (EIA), energy production decreased 13 percent on federal lands in fiscal year (FY) 2011 when compared to FY 2010. The official moratorium and de facto moratorium as a result of a molasses-like permitting process reduced planned capital and operating investments by $18.3 billion and cost the Gulf more than 900,000 jobs in just the past two years. Federal production in the West has experienced a similar fate: The Administration’s delays on permitting oil and gas projects public lands are preventing economic activity. In Utah and Wyoming, for instance, 20 projects held up by the National Environmental Policy Act process is preventing the creation of 120,905 jobs, $27.5 billion in economic activity, and $139 million in government revenue.
2. Failing to open areas to exploration and development. Where the Administration is destroying energy jobs on federal jobs, it is failing to create them by aggressively opening America’s federal lands and waters to exploration and development. According to a recent study from energy consultant Wood Mackenzie, allowing access to domestic resources and imports of Canadian oil would generate more than 1 million jobs by 2018 and more than 1.4 million jobs by 2030. The federal government would stand to benefit tremendously as well, collecting more than $36 billion as soon as 2015 and more than $800 billion by 2030.
3. Delaying a decision on Keystone XL pipeline. The Keystone XL pipeline would bring up to 830,000 barrels of oil per day from Canada to the U.S., but President Obama punted the decision until after the election despite bipartisan support and despite the Department of State’s conclusion that the project would pose no significant environmental risk. The pipeline would create thousands of jobs, and the states through which the pipeline would pass—Montana, South Dakota, Nebraska, Kansas, Oklahoma, and Texas—would benefit greatly. The six states are collectively projected to receive $5.2 billion in property taxes in the course of the 100-year operating life of the pipeline,
4. Tripling down on energy subsidies. America’s addiction to energy subsidies began well before President Obama took office. According to the EIA, the U.S. spent $8.2 billion on energy subsidies in 1999. That spending more than doubled to $16.6 billion in 2007. Rather than eliminating subsidies for all energy sectors, President Obama tripled down by providing $53.2 billion in the 2009 stimulus bill for energy programs. We have a diverse, competitive energy sector, but government subsidies merely concentrate power in Washington. Energy subsidies merely shift labor and capital away from economically viable projects that would actually help grow our economy to those projects that have political preference. Further, subsidies increase the incentive to lobby and perpetuate mediocrity in technological innovation by removing the incentive to lower costs and compete in the marketplace without the subsidy.
5. Stifling all energy projects in red tape. The government’s assault on energy projects is relentless. The U.S. Chamber of Commerce identified 351 energy projects stalled by “not in my backyard” lawsuits, regulatory red tape, and, of course, endless lawsuits from environmental activists who want to quash these projects. Perhaps most surprising is the fact that almost half of these projects (140) are renewable-energy ones. These energy projects could provide a $1.1 trillion injection to the economy and create almost 2 million jobs.
6. Shutting down coal. With 497 billion tons of recoverable coal in the U.S.—enough to provide electricity for 500 years at current consumption rates—coal has the potential to be an important resource long into the future. Regrettably, the Obama Administration has taken actions that significantly reduce coal’s share of America’s energy portfolio now and in the future. The Environmental Protection Agency’s (EPA) regulatory train wreck will prematurely shut down approximately 20 percent of America’s coal-fired electricity generation—enough to power 50 million homes. The EIA projects that 8.5 percent of the coal-fired generation capacity will come offline in the next four years.
7. Using extreme and unprecedented power. In an unprecedented move, in January 2011, the EPA revoked a water permit issued by the Army Corps of Engineers in 2007 for a West Virginia mine. The U.S. District Court for the District of Columbia struck down those EPA procedures, calling them “unreasonable.” The EPA also proposed a more stringent revision of National Ambient Air Quality Standards (NAAQS) for ground-level ozone. Attaining that standard would have exceeded $1 trillion in costs between 2020 and 2030 and destroyed more than 7 million jobs by 2020; it was so devastating economically that President Obama had to request that EPA administrator Lisa Jackson withdraw the agency’s draft for more stringent NAAQS. The EPA’s Cross State Air Pollution Rule, which would compel companies to retire up to seven gigawatts of electricity generation and retrofit up to 576 plants, was struck down recently by a federal appeals court panel, which decided that the rule “transgressed statutory boundaries.” And the EPA, using inadequate and inaccurate information, is threatening to shut down the Pebble Mine in Alaska, one of the world’s largest concentrations of copper, gold, and molybdenum in the world that would create 1,000 high-paying jobs. The companies have not even applied for the permit yet, but the EPA is threatening to veto the permit because of an environmental analysis of a theoretical mine that would not come close to meeting state and federal standards for mining activities.
8. Threatening hydraulic fracturing. The shale gas production as a result of horizontal drilling and hydraulic fracturing (“fracking”) has dramatically lowered natural gas prices, saving consumers money through lower energy bills but also lower prices for goods and services. In fact, the Yale Graduates Energy Study Group calculated that in 2010 alone, the consumer surplus (the consumer savings or gain from reductions in price) from shale gas production was worth over $100 billion. The abundance of natural gas makes the U.S. an attractive place to do business, especially for energy-intensive industries. Used in over 1 million wells in the U.S. for more than 60 years, fracking has been successfully used to retrieve more than 7 billion barrels of oil and over 600 trillion cubic feet of natural gas. Just 1 trillion cubic feet of natural gas is enough to heat 15 million homes for one year. Despite the length of time that hydraulic fracturing has been used, and despite the fact that the states have effectively regulated fracking, the Administration is proposing regulations that would be both unnecessary and duplicative and drive away opportunities for the safe development of affordable, reliable energy. In 2010, unconventional gas supported 1 million jobs in the U.S. and that figure is set to increase to 1.5 million by 2015, with an estimated $3.2 trillion in investments in unconventional gas over the next 25 years.
9. Shutting down Yucca Mountain. The Obama Administration says it wants to pursue nuclear power, but its rhetoric does not match its nuclear policy. Its decision to abandon the Yucca Mountain nuclear waste repository project without any technical or scientific data is a case in point. With nearly $15 billion spent on the project, the data indicates that Yucca would be a safe place to store America’s used nuclear fuel. Yet the Obama Administration decided to terminate the program without having anything to replace it. Absent any nuclear waste disposal options, the U.S. simply will not significantly expand nuclear energy. In fact, the Nuclear Regulatory Commission has suspended its reactor licensing activities as a result of this failed policy.
10. Attacking on consumer choice. The federal government finalized new automobile efficiency rules today for cars and light trucks for model years 2017–2025. The rules require an average fuel economy of 54.5 miles per gallon (mpg) in 2025. The government acknowledges that increased fuel efficiency standards will increase the upfront cost of a vehicle. Although the government also estimates that higher prices will be more than offset by gasoline savings, generally these cost savings assume that the buyer keeps the vehicle for its entire lifespan, which usually doesn’t happen. Further, consumers tend to drive new, fuel-efficient vehicles more, which reduces the estimated price, oil, and emissions savings. Higher prices reduce demand and force people to hold onto their older vehicles longer. Reduced demand means fewer cars produced, which means automakers have to shed jobs. Although not directly applicable to the Administration’s new rule, the Michigan-based consulting firm Defour Group projected that a 56 mpg standard would destroy 220,000 jobs. At the heart of the issue is consumer choice. Consumers have plenty of vehicles to choose from, including more than 160 different models today that get better than 30 mpg. While some may argue that the increased efficiency came as a result of mandated fuel efficiency standards that have been around since the 1970s, fuel efficiency has always been a top priority for consumers—whether they are purchasing compact cars, light-duty trucks, or heavy-duty trucks. The federal government shouldn’t be restricting that choice and determining what producers make and what consumers buy.

Obama and the US energy economy

The future of America's energy and industry depends upon a wise leveraging of the vast US hydrocarbon resource as a "bridge" to the development of advanced, cheaper, safer, scalable, reliable, clean future-generation nuclear reactors.

No thanks to Obama, the US is already benefiting from an expansion of tight oil & gas production. If Obama is re-elected, there is a good chance that his EPA will proceed to clamp down on that one bright spot in the US economy.

With all of Obama's promotion of "green energy projects" and for all the money he has spent, only a relative handful of actual jobs have been created -- most of them only peripherally related to any form of "green energy." And if the truth were told, Obama's "green energy" is more of a hazard to US electrical grids than a help.

Obama has attacked and obstructed nuclear power, coal power, offshore oil & gas, Canadian oil sands, tight oil & gas pipelines, LNG exports, energy projects on federal land, and threatens to tighten the chokehold around US energy production once he no longer needs to worry about re-election.

No wonder Russia's President Putin would like to see Obama re-elected.

Guest Article: The Unlevel Playing Field for Energy

The following article is re-published from Geoffrey Style's Energy Outlook blog. It shines a penetrating light behind the facade that green energy activists have built to try to influence public and political opinion about the intermittent unreliable forms of green energy. Well worth reading.

An editorial in last weekend's Wall St. Journal led me to a recent analysis by the US Energy Information Agency (EIA) summarizing the costs of the federal government's various "subsidies" for energy from different sources.  This is both useful and timely, since discussions of specific subsidies such as the expiring wind production tax credit inevitably lead to questions about how incentives for renewable energy compare to those for oil, gas, nuclear, and other more traditional sources.  As the Journal noted, the EIA stopped short of comparing these incentives on the basis of the relative productivity of different energy sources, but even without that it's still apparent that the category of new renewable electricity--excluding hydropower--received 21% of the federal energy benefits for 2010, while accounting for less than 3% of domestic energy production that year, when oil and gas, which provided 49% of US energy production, received less than 8% of these benefits.  Whether on an absolute or relative basis, renewables receive much more generous federal support than oil and gas.

Before digging further into the EIA's analysis, I should point out an important distinction between the federal expenses and incentives covered in the report and the externalities that are frequently conflated with them.  It is certainly true that many of these energy technologies involve significant impacts that aren't reflected in their market prices, and that the production and especially the consumption of fossil fuels create serious environmental and security externalities. However, to whatever extent federal subsidies address externalities they do so indirectly, at best, and in many cases inefficiently.  The focus of this posting, just like the EIA report's, is on the federal government's cash outlays and "tax expenditures"--deductions, credits, etc.--that have a direct bearing on the federal deficit and debt burden that are the subject of intense debate in this election cycle.

The tables in the report's executive summary reveal several key facts.  Between 2007 and 2010 federal energy subsidies in constant dollars more than doubled to $37.2 B, with most of the increase going to renewables and energy efficiency, except for a sizable bump in low-income energy assistance payments.   $14.8 B of the increase originated with the 2009 stimulus bill, none of which was directed at oil and gas, but which appropriated nearly $8 B to conservation and efficiency.  Overall, renewables received $14.7 B, split 55/45 between electricity and biofuels, while nuclear received $2.5 B and oil and gas $2.8 B.  The latter figure is lower than you'll see elsewhere, because among other incentives that the EIA chose to exclude from its analysis was the Section 199 deduction for manufacturers, which is budgeted at around $1 B/yr for oil and gas firms.  The logic behind that exclusion seems sound, because US manufacturers of biofuels, wind turbines, solar panels and other renewable energy equipment qualify for the same tax credit, and at a higher rate than oil companies.

I was also struck by the fact that oil and gas received just $70 million out of the more than $4 B spent on R&D. If there's one category in which federal expenditures on renewables should be expected to dwarf those for conventional energy, this is it, and they did so by a factor of more than 20 times.  (Coal R&D received more than $0.6 B, presumably for clean coal technologies.)

It's also the case that while the growth of renewable energy output from 2000-10 was dramatic, the relatively smaller net changes in oil and gas output in that period masked the substantial replacement of depleting resources that would have otherwise resulted in a large drop in output, especially for natural gas.  This is precisely the aspect of the mature oil and gas industry at which these federal incentives are aimed, to enable US projects to compete with the international opportunities to which many of these companies have access.

The authors of the report suggested caution in comparing the allocations of incentives to the energy produced by each technology, because some of these incentives were paid for projects still under construction and in some cases represented the front-loading of what would otherwise have been a 10-year stream of tax credits.  Fair enough.  Yet even with the conservative assumption that the entire $4.9 B of non-R&D subsidies for wind power in 2010 came in the form of cash grants in lieu of the 30% investment tax credit for new wind turbines that would produce for 20 years at a 30% capacity factor, that still equates to a subsidy of more than 16% of the average present wholesale value of all the electricity those turbines will produce, using prevailing industrial sector electricity prices as a proxy for wholesale prices.  By comparison, the $2.7 B of oil and gas tax incentives for 2010 represented just 1% of the wholesale value of US production of these fuels, before refining.

A serious debate about the appropriate level of US energy subsidies should begin with the facts, rather than with misperceptions. It should also focus first on the goals of such incentives, before jumping to the details of this tax credit vs. that one.  What do we want these measures to achieve?  If it's simply the promotion of energy production, then the current incentive system looks too heavily skewed in favor of renewables.  If it's jobs, then we should be realistic about how many can be added by such a capital-intensive sector.  If it's the promotion of both energy security and innovation, then at least parts of the current system look directionally right, though I'd argue that we'd benefit from spending more on renewable energy R&D and less on the deployment of mature-but-expensive technologies like wind.  However, if emissions and climate change are our primary concerns, then these incentives are not a terribly effective way to address them.  My own expectation is that regardless of whether the wind tax credit is extended for another year, most of the tax incentives that the EIA assessed here will eventually be swept away by tax reform focused on reducing corporate tax rates to improve US competitiveness, while eliminating loopholes to make the changes revenue-neutral.
_Geoffrey Styles in Energy Outlook

Geoffrey Styles is one of the better energy analysts, willing to look at the larger picture from multiple perspectives. His article above clearly illustrates the falseness of the claims about subsidies to the fossil fuels and nuclear industries so often made by green activists and special interests.

Out of curiosity, I visited some peak oil and green sites to gauge their reaction to Geoffrey Style's piece. Predictably, the groupthink circular jerkulars were outraged to think that anyone might be willing or able to think beyond the constrained limits of their own indoctrination.

But such places are populated by people with nothing important to do. As for the rest of us, we all have problems to solve, so we may as well get to it.

Perhaps It's EPA Officials Who Should Be Crucified

Oil and gas companies have good reason to worry about costly punitive EPA practices under the Obama administration. Their Dallas Regional Administrator, Al Armendariz, expressed this take-no-prisoners philosophy at a taped city council meeting two years ago. The strategy described was to single out an oil company accused of a rule infraction and “punish it as hard as you can” as an example to scare others into submission. He explained: “The Romans used to conquer little villages in the Mediterranean.” Armendariz continued, “They’d go into a little Turkish town somewhere, they’d find the first five guys they saw, and they would crucify them. And then you know that the town was really easy to manage for the next few years.”

...An estimated 50% of East Coast refinery capacity is predicted to shut down in June thanks to EPA regulatory restrictions on new refinery plant construction and upgrades, along with others that discourage Gulf Coast suppliers from piping gas into to this fuel-starved region. Unsurprisingly, the Energy Department warns that the resulting shortage will cause pump prices to spike, and “While the short-term effects of the idled Philadelphia-area refineries will be concentrated in the Central Atlantic, their long-term impacts will be more evenly spread throughout the entire East Coast.”

... in addition to CO2 emission restrictions, EPA’s sulfur reduction requirements could also have significant adverse impacts on refinery operations. Initial costs could reach $17 billion, with recurring costs of between $5-13 billion, translating to higher product costs of around 5-35 cents/gallon of petroleum. Such added costs could lead to a reduction of gasoline supply from U.S. refiners of up to 14%, placing domestic refineries at a competitive disadvantage with foreign refineries that are not subject to EPA rules.

Over the past 60 years, the U.S. has seen the number of refineries cut almost in half, down from 324 to 149. The last facility to be constructed, the Ashland refinery near Garyville, Louisiana, was completed in 1976. As a result, disruptions of production due to maintenance, accidents and natural disasters at one or more plants can create shortfalls and price hikes with regional and national impacts.

...Combined with a raft of new Obama administration regulatory restrictions on drilling, EPA constraints on refinery development and expansion will predictably increase our dependence upon foreign sources. Huge plants now under construction in India, Asia, and the Middle East will produce countless tanker loads of less expensive gasoline, diesel, and jet fuel…. And they won’t be worrying about environmental non-compliance penalties.

...EPA’s ultimate regulatory role and policies will be decided by a higher tribunal. That American Body Electorate must be prepared to live with its own November 6th decisions…the most important rulings of all to determine our energy future. _Forbes

Of course, US voters are not required to demonstrate any knowledge or wisdom before being allowed to vote. More and more, they are not even required to demonstrate citizenship or prove their identity.

US President Obama and his faux environmental accomplices inside and outside of the US government clearly represent a threat to the energy, industry, and private sector economy of the US. Whether American voters will recognise the threat and take the appropriate measures is far from certain.

What we are seeing in the Obama administration is the rise of eco-fascism:

...Let’s sum up for a moment: burning houses, threats to life, limb, business, destroying careers, inflammatory rhetoric, deception, lies and preventing free speech. The message from the eco-fascist Left is resolute: don’t mess with us, or else. These are not guys Joe Public would want to break bread with.

...In April the US Department of Homeland Security released its Environmental Justice Strategy. It makes provision to incorporate the notion of “environmental justice” as a “homeland security” issue. If you thought Homeland was all about keeping citizens safe from terrorists, think again. Under President Obama they are about to create local “federal law enforcement” agents empowered specifically to enforce green laws and regulations in the name of “securing the homeland”. In short, a green police force. If it can happen in the land of the free, how long before the cop green-print recycles to socialist Europe? _EnergyTribune

President Obama said in his first presidential campaign that he wanted to build a US civilian (paramilitary) force as strong and as well-financed as the US military. Perhaps that was not an empty threat, to those who fear the rise of a US KGB or a US Gestapo? And all under the guise of "homeland security???" The path Mr. Obama has chosen to achieve his long cherished goals is nothing if not serpentine.

Doctors for Disaster Preparedness Take a Hard Line on Frivolous Energy and Climate Policy

Apparently the group "Doctors for Disaster Preparedness" is concerned about the humanitarian danger of slashing back on reliable energy supplies in the name of carbon hysteria and green energy starvation. Such policies are beginning to devastate European industry and the European economy, with Australia and the US firmly in the sights of green energy starvationists and carbon hysterics.

Most of the "Doctors for this" and "Doctors for that" groups are trumped up green energy starvationist groups. But the Doctors for Disaster Preparedness appear to be concerned about genuine potential disasters -- chief among which would the a long term loss (or diminution) of reliable energy and fuel supplies to the advanced world. It is unfortunate that much of the leadership of the advanced world does not share similar concerns.

unreliable energy supply is now “the top risk for Germany as a location for business, says Hans Heinrich Driftmann, president of the Association of German Chambers of Industry and Commerce (DIHK). All industrial sectors are threatened. The metal industry is already migrating to countries with cheaper electricity (Spiegel Online 2/24/12). In an attempt to fill the gap created by the post-Fukushima shutdown of eight nuclear power stations, Germany is developing its lignite resources (Impulse 3/6/12). That is “brown coal,” the most carbon-intensive fuel known (Lawson, op. cit.). It also imports large amounts of power generated at nuclear stations in France and the Czech Republic, and had to fire up an old oil-fired plant in Graz, Austria, when solar panels were generating virtually no energy last December (Spiegel Online 1/18/12).

Because of its “green” policies, the UK faces an energy shortfall by 2015 if not before. In a cold winter, factories would be closing, and elderly people swathing themselves in blankets (Alex Brummer, Daily Mail 3/27/12). The economy as a whole is flat-lined. Business-wrecking energy policy includes a 20% “stealth tax” on the electricity bills of business consumers, which could rise to 70% by 2020. Green policies threaten some 30,000 existing British jobs; there is no net job creation, and the subsidy for “new” jobs averaged £54,000 per worker in 2009-2010 (Conservative Home 9/18/11).

A growing backlash against the £400 million annual subsidies for wind technology is causing many companies to place wind investments on hold (Daily Telegraph 2/27/12, cited by CCNet 2/27/12). Yet a vast expansion of wind power, bankrolled by taxpayers, is required to meet the pledges in the Climate Change Act, in which Britain signs up for emissions cuts by 2050—the only country in the world to do so. Even the site heralded as “the birthplace of democracy in England”—the battlefield on which Oliver Cromwell defeated King Charles I in 1645—is slated for devastation by a wind farm.

“It is unbelievable that one planning inspector can overrule all elements of democracy,” stated MP Heaton-Harris (Sunday Express 1/22/12, CCNet 1/23/12).

In Scotland, mandated wind energy will cost consumers £120 billion by 2020; the same amount of electricity from gas would cost £13 bn. Carbon emissions might drop 2.8% with wind—or they might increase owing to the need for inefficient back-up power. Household energy costs now take an average of 14% of household income, up from 8% in 2005; 900,000 families are now in “energy poverty” (Scotland on Sunday 3/11/12).

Placing the needs of their people above the EU’s carbon allowance, Poland, Estonia, Latvia, Bulgaria, the Czech Republic, Hungary, Lithuania, and Romania challenged the European Commission’s ceilings on greenhouse gas emissions. In 2009, the European Court of First Instance ruled that the ceilings should be scrapped, but the Commission appealed.

Poland may be “riding to the defense of Europe again” (TWTW 3/10/12, www.sepp.org). In 1683, King Jan Sobieski led a cavalry attack on Ottoman forces that were assaulting Vienna, saving European civilization. On Mar 9, Poland was the sole holdout against the EU demand in “Energy Roadmap 2050” for reducing CO2 emissions to 80%–95% of 1990 levels. Coal is used to generate 90% of Poland’s electricity. _Doctors for Disaster Preparedness

Is Mexico Ready to Emerge from Its Self-Induced Energy Slump?

Mexico's energy production has been steadily falling, despite massive new discoveries of hydrocarbons. In order to develop its assets and allow its people to profit from its natural resources, Mexico must step back from its self-imposed energy isolationism. The curse of oil nationalism has made Mexico corrupt and lazy. The country needs outside investment and expertise in a very bad way.

For the first time in 74 years, Mexico may allow private investment in its oil and gas, the third-largest reserves in Latin America.

...Selling shares in the largest oil supplier to the U.S. will open a Mexican industry experiencing an eighth year of declining output, hurt by faltering investment and lack of technology and experience for the deepest offshore wells. The cash can fund Gulf of Mexico and shale gas production using techniques Brazil and the U.S. employed to revolutionize their energy markets.

“The taboo has been broken” on private investment, Pemex board member Hector Moreira said in an interview. “People talking about private stakes -- it’s a first step. And it’s a step that’s not prompting a negative reaction from the public.”

...Energy Minister Jordy Herrera said last month that the company’s budget to tackle all the challenges is “notoriously insufficient.” Pemex needs to change the law to get more funds and create a “model similar to Petrobras (PBR) (PBR) or whatever we decide,” he said, referring to the state-backed oil company in Brazil.

While Pemex wanted to invest more than $30 billion this year, the federal government cut its plans to about $23 billion, and even those funds are not available at the speed or with the flexibility that the company requires. Pemex paid almost 60 percent of its revenue in taxes, cash used to finance a third of the nation’s public budget. _BusinessWeek

Mexico's corrupt and inept national energy system has prohibited outside investment for almost 75 years. And Mexico has paid the price in lost opportunity and in the national laziness that infests all governments and societies that become overly dependent upon a nationalised industry such as oil.

Fossil Fools in Washington DC: A Simple Lack of Practical Wisdom

The idiot zombies in Obama's EPA, Interior Department, Energy Department, Department of Interior, Nuclear Regulatory Commission, and Department of Agriculture can pretend that the country will function just fine without fossil fuels. They find it easy to ban offshore drilling, coal mining, coal power plants, oil sands pipelines, arctic drilling, shale gas & oil drilling, safe new nuclear reactor designs, etc etc. No skin off their nose, no sir!

Meanwhile, the nation they are supposed to be leading and guiding sinks more deeply into debt and dysfunction, for lack of any genuine leadership. Politics as usual, except more so. More cronyism, more corruption, more obstruction and destruction toward the private sector, more disregard for the welfare of the productive classes, entrepreneurs, and small business.

Human ingenuity wants to make things better and more workable. But government zombies have their own ideas.

The Obama administration’s decision to delay the Keystone XL pipeline project, which would increase Canadian oil imports, should be viewed as a warning that the government is willing to oppose new energy production either directly or indirectly. If anyone had any illusion that the State Department’s decision was about a route through Nebraska, Daniel Kammen, an Obama 2008 energy adviser, left no room for doubt: “The real issue isn’t the route. It’s what’s in the pipeline.”

This Keystone XL decision, combined with project permitting delays in Alaska, moratoriums in the Gulf of Mexico and regulatory uncertainty surrounding new shale gas production would leave an objective observer to question if there is any will to move production beyond traditional Middle East suppliers.

Today, the choice for America is stark. If we support North American energy production, the United States increases its own energy security, creates more liquidity in the global market, and creates jobs in refining, and downstream industries such as fertilizers and chemicals. Alternatively, we can continue down the path of increasing reliance on foreign energy sources that could be unstable or hostile. The onus is now on Washington to seize the moment and stop obstructing the opportunity created from advances in technology. _Hill

There are clean ways to utilise all forms of fossil fuels -- even coal! But instead of using the massive US coal resource to rebuild the US industrial infrastructure, US governmental obstructionism is forcing coal producers to ship all their product overseas -- to a country that actually wants to do something with it.

People are saying that oil will soon run out. They say oil is a finite resource, and therefore it is obvious to them that oil will soon run out. Is it possible that something is wrong with their logic?

Coal not only did not run out, no matter how much was used: it actually became cheaper and more abundant as time went by, in marked contrast to charcoal, which always grew more expensive once its use expanded beyond a certain point, for the simple reason that people had to go further in search of timber. Had England never used coal, it could still have had an industrial miracle of sorts, because it could have (and did) use water power to drive the frames and looms that turned Lancashire into the cotton capital of the world. But water power, though renewable, is very much finite, and Britain’s industrial boom would have petered out as expansion became impossible, population pressure overtook income and wages fell, depressing demand.

This is not to imply that non-renewable resources are infinite–of course not. The Atlantic Ocean is not infinite, but that does not mean you have to worry about bumping into Newfoundland if you row a dinghy out of a harbour in Ireland. Some things are finite but vast; some things are infinitely renewable, but very limited. Non-renewable resources such as coal are sufficiently abundant to allow an expansion of both economic activity and population to the point where they can generate sustainable wealth for all the people of the planet without hitting a Malthusian ceiling, and can then hand the baton to some other form of energy. _MattRidley

A simple idea: use the energy resources which you have, to create better, longer-lasting resources -- such as advanced nuclear fission and eventually fusion -- for the future.

Why didn't the zombies in Washington think of that?

US Desperately Needs a Better Energy Administration

Wood MacKenzie Energy Access StudyThe current US energy administration has adopted an official policy of energy starvation, directed against US industry and the US economy overall. Presumably this policy has been adopted with political -- rather than economic -- goals in mind. Persons with less political and more economic concerns are likely to increasingly take issue with the current US energy administration's approach.

If we were really serious about fueling the recovery, we'd be at least as interested in promoting abundant, low-cost energy at a scale suitable for the needs of a $14 trillion economy, and for which employment gains in the energy industry didn't come at the expense of productivity. A study on the trade-offs between resource access and new taxes on the oil & gas industry that was prepared in conjunction with the release yesterday of API's "State of American Energy" report provides a case in point.

An international energy consultancy analyzed the potential production and employment gains associated with expanded access to the domestic resources that are currently off limits in places like the eastern Gulf of Mexico, the Atlantic and Pacific coasts, and the Arctic National Wildlife Refuge. They also looked at the federal revenue and employment impact of higher taxes on the US oil & gas industry, along the lines of a series of proposals from the administration and Congress in the last two years. They found that access to off-limits oil and gas could yield up to an extra 2.8 million barrels per day of oil and gas liquids and 6.6 billion cubic feet per day of gas by 2025, with direct and indirect gains in employment of more than 500,000 workers. By contrast, increasing taxes on the industry would not only reduce production and employment, as domestic opportunities become less attractive than those elsewhere, but also reduce total federal revenues from taxes, royalties and leasing, following a brief uptick in the initial period after their introduction. _GeoffreyStyles

Wood Mackenzie Energy Access Study

The industry supports more than $1 trillion in annual
contributions to the U.S. economy, or 7.5 percent of Gross Domestic Product (GDP);
The industry has invested $1.66 trillion in U.S. capital projects in the last decade;
4 The industry paid $95.6 billion in 2008 income taxes alone;
4 The industry paid more than $178 billion to the U.S. government in rent, royalty and bonus payments from 1982 through 2009; and
4 Increased access to U.S. oil and natural gas resources currently off-limits could generate an additional $1.7 trillion in government revenue over the life of the resources creating jobs

4 The oil and natural gas industry supports more than 9.2 million U.S. jobs;
6
4 Developing U.S. oil and natural gas resources currently off-limits in the
Outer Continental Shelf (OCS), the Arctic National Wildlife Refuge (ANWR) and the Rockies could create 160,000 new jobs by 2030;
4 Expanding Marcellus Shale natural gas development could add 280,000 jobs
over the next decade;
4 Greater Canadian oil sands production could create more than 340,000 new jobs in the United States alone; and
4 Many other opportunities exist to create jobs through increased energy production in the United States.


4 The United States will require more energy of all types, including oil and natural gas, to meet future energy demands—a challenge and opportunity that will be met through continued industry investments in technology and innovation;
4 The industry has invested $194 billion since 1990 toward improving the
environmental performance of its products, facilities and operations; and
4 The industry has invested $58.4 billion in low-and zero-carbon emissions
technologies from 2000 to 2008—more than either the federal government or all
other U.S.-based private industries combined.
5 _API

Energy should not be a political plaything for dilettantes and fools in high places. It is a matter of life or death for communities, societies, and civilisations.