In his State of the Union address last month, President Obama requested that Congress pass legislation mandating a national clean energy standard (CES). A CES targets the CO2 emissions from the electric power industry by setting minimum percentages of total power (electricity) generation that must come from sources that emit no CO2. (It should be noted that CO2 is colorless, odorless, and non-toxic. Therefore, it is a misnomer to call CO2 dirty.) Though this sounds less threatening than cap-and-trade legislation, it can end up being pretty much the same thing. …
The Obama Administration, encouraged by environmental groups, has blocked yet another affordable energy project—the Keystone XL Pipeline. Add this to the unconscionable slowdown of leasing and production in the Gulf of Mexico, foot-dragging on production in the Chukchi and Beaufort Seas, blocks on offshore production in the Atlantic and Pacific, and continued prohibitions and impediments to production in non-park, non-wilderness areas of the Western U.S. and ANWR. For each one, the claim is that the production wouldn’t make much difference. Well, the XL Pipeline would bring 750,000 barrels per day …
The EPA’s analysis of the new mercury rule (the Utility Maximum Achievable Control Technology, or Utility MACT) is yet another example of regulatory bait-and-switch. The rule refers to mercury but really targets CO2, and it generates its purported benefits from reducing particulates that are already covered by other regulations. For an excellent and revealing analysis of the EPA calculations, see Anne E. Smith’s technical comments. The EPA claims this rule would produce $53 billion to $140 billion in annual benefits, but at most $6 million of the benefits come from …
Because the concept of opportunity cost is fundamental to all of economics, it is covered in the first chapter of every principles-of-economics textbook. Opportunity cost tells us what we give up when make decisions on consumption and production. There are no free lunches. In spite of the universal agreement on the importance of opportunity cost, there is nearly universal omission of the concept in studies purporting to show job creation from regulation, subsidies, and mandates. The recent study for the American Wind Energy Association (AWEA) follows this disturbing pattern. Hoping …
If clean-energy means “low-carbon” (a definition to which I object), then the U.S. is way, way ahead of China in the clean-energy race. If it means low-everything-else, we are still way, way ahead, since China has a pathetic record on controlling genuine pollution. Getting hung up on commoditized solar-panel or wind-turbine production ignores the phenomenal increase in coal-generated power in China—an increase that swamps that country’s installed wind and solar production. From parity with the U.S. around 2005, China’s CO2 emissions will grow to roughly double America’s in 2012. Here’s …
Instead of the intellectual vandalism that typifies too much of Paul Krugman’s writing, it would be more useful if he returned to writing about economics…with facts. In a recent column he says: So if you really believed in the logic of free markets, you’d be all in favor of pollution taxes, right? Hahahahaha. Today’s American right doesn’t believe in externalities, or correcting market failures; it believes that there are no market failures, that capitalism unregulated is always right. What evidence does he use to support this cynicism? Krugman points to …
Maybe the Department of Energy (DOE) would lend me money to buy lottery tickets. For the tickets that win, I’ll pay them back their dollar (plus $0.001 for a week’s interest). For those that lose, well, that just happens in this sort of business. They have to expect losses. That’s the argument we now hear from the Solyndra apologists: “Hey, it’s a risky business.” But venture capitalists get equity positions so that they get the big rewards when a risky venture pays off. Nobody should be making loans to high-risk …
Basking in the glow from the $535 million fire left when Solyndra crashed and burned, the Department of Energy is ready to subsidize additional hundreds of millions in loans to solar energy companies. The logic of this latest round is stunning: One company supposedly needs the government subsidy because its cost of production is so low; the other company supposedly needs the government subsidy because the government is buying its product. Solyndra, of course, is the poster child turned object lesson. After the company received loan guarantees (that now must …
A recent study authored by Mark Crowell of the Federal Emergency Management Agency estimates that in the U.S., climate change will increase the area subject to flooding by 45 percent in 2100. But to get this number, the study used estimates of sea-level rise that were more than 200 percent higher than the estimates of the Intergovernmental Panel on Climate Change (IPCC). Even with its questionable temperature projections, the IPCC’s various projections of sea-level rise are between .18 and .59 meters (about 7 to 23 inches) (See chart above.). However, …
Releasing 30 million barrels of petroleum from strategic reserves is not an energy policy, and it is not an especially useful response to either short-run or long-run pressures on gasoline prices. Because the release is scheduled to stop in 30 days, market adjustments will partially offset the release’s impact in the short run. And in the long run, there is no additional output. In fact, the current released oil will need to be replaced in the future. Most of OPEC is producing at capacity, so the notion that it is …
