Planetary Ruin

In 1841 a Scottish journalist named Charles Mackay published a landmark study of mass hysteria and sociopsychosis titled “Extraordinary Popular Delusions and the Madness of Crowds.”

Mackay painstakingly analyzed a wide variety of popular pathologies in his entertaining tome, including financial panics, medical quackery, pseudoscience like alchemy and astrology, and witch crazes.  He wanted to know why so many people choose to believe so much that is not only not true, but also potentially deadly.  His answer:

“We go out of our course to make ourselves uncomfortable; the cup of life is not bitter enough to our palate, and we distill superfluous poison to put into it, or conjure up hideous things to frighten ourselves at, which would never exist if we did not make them.”

Conjure up hideous things to frighten ourselves—I could not help but think of global warming as I was re-reading Mackay’s words.  How he would have delighted in the strange, self-flagellating notion that is anthropogenic warming.  He would have recognized it as kin to his own numerous and insidious subjects—superstition masked as science; Western guilt over having conquered the world manifesting itself as hatred for the technologies that made it possible; apocalyptic yearning in the guise of political enlightenment.

In fact, global warming is the most widespread mass hysteria in our species’ history.  The fever that these legions of warmists warn of does not grip the globe, but rather their own brains and blinkered imaginations.

And like every mass delusion, there is danger – danger that Man wil be convinced by these climate cultists to turn his back on the very political, economic, and scientific institutions that made him so powerful, so wealthy, so healthy.

Will the fever break before this happens?  I think so.  I think the fever is breaking, as more and more scientists come forward to admit their doubts about the global warming paradigm, as more and more voters become suspicious of government-mandated schemes to control their “carbon emissions”, which is a bureaucrat’s way of controlling productivity, and therefore freedom.

In centuries hence the global warming boogey man will be seen for exactly what it is – The Great Delusion.  Future generations will wonder how so many people could have believed something so suicidally ridiculous.

Unless they read Charles Mackay’s wonderful book.

On February 1, an urgent alert was sent to supporters of wind energy. It stated: “The PTC is the primary policy tool to promote wind energy development and manufacturing in the United States. While it is set to expire at the end of 2012 … the credit has already effectively expired. Congress has a choice to make: extend the PTC this month and keep the wind industry on track…”

The wind energy industry has reason for concern. America’s appetite for subsidies has waned. Congress is looking for any way it can to make cuts, and the twenty-year old Production Tax Credit (PTC) for wind energy is in prime position for a cut. It naturally expires at the end of 2012. Without action, it will go away.

The payroll tax extension will be a hot topic over the next few weeks as it expires on February 29. Wind energy supporters are pushing to get the PTC extension included in the bill. Whether or not it is included will be largely up to public response. After all, regarding the PTC’s inclusion in the payroll tax extension bill, the February 1 alert stated: “our federal legislators heard us loud and clear.” In the December payroll tax bill negotiations, the wind energy PTC was placed on a “short list of provisions to be extended through that bill.” Wind supporters are worried—hence the rallying cry.

Due to a deteriorating market, Vestas, the world’s largest manufacturer of industrial wind turbines, is closing a plant and laying off workers. Everyday citizens, armed with real life information gleaned from the wind energy’s decades-long history, are shocking lobbyists and killing back room deals by successfully blocking the development of industrial wind plants in their communities. As it becomes widely known that actual wind energy contracts are coming in at three and four times the cost of traditionally generated electricity, and natural gas prices continue to drop due to its newfound abundance, states are looking to abandon the renewable energy mandates pushed through in a different economic time and a different political era. American Wind Energy Association spokesman Peter Kelley reports: “Industry-wide we are seeing a slowdown in towers and turbines after 2012 that is rippling down the supply chain, and the big issue is lack of certainty around the production credit that gives a favorable low tax rate to renewable energy.” All of this spells trouble for the wind energy industry.

Enacted in 1992, the twenty-year old wind energy PTC was designed to get the fledgling industry going. However, after all this time, wind energy is still not a viable option. Even the industry’s  own clarion call acknowledges that government intervention is still needed to keep it “on track.” If the training wheels are removed, it will topple.

Wind energy lobbyists have a plan: HR 3307 will extend the PTC for another four years. If the PTC extension passes, it will add an extra $6 billion to the $20 billion in taxpayer dollars the wind industry has already received over the past 20 years. These are monies we borrow (typically from China) to give to Europe—where most of the wind turbine manufacturers are located.

With advertisements featuring blue skies, green grass, and warm and fuzzy images of families (and not one shot of a 500-foot wind turbine looming over their homes), it is easy for the average person to be taken in and think we should continue to underwrite this “new technology”—after all, there is an energy shortage. “What will we do when we run out of oil?”

Wind energy is electricity and electricity doesn’t come from oil. Even if it did, we don’t have an oil shortage. Electricity comes from natural gas and coal—both of which we have in abundance and know how to use effectively. They don’t need an expensive supplement masquerading as a replacement.

Wind energy supporters often tout turbines because of the misguided belief that they will get us off fossil fuels—when, in fact, they commit us to a fossil fuel future. Optimistically, a wind turbine will generate electricity 30% of the time—and we cannot predict when that time will be. Highly variable wind conditions may mean the turbine generates electricity in the morning on Monday, in the middle of the night on Tuesday, and not at all on Wednesday. A true believer might be willing to do without electricity at the times when the wind is not blowing, but the general population will not. Public utilities and electric co-ops cannot—they are required to provide electricity 24/7 and to have a cushion that allows for usage spikes. So, during that average 30% of the time that the turbine blades are spinning, the natural gas or coal-fueled power plants continue to burn fossil fuels—though possibly slightly less in an extended period of windy weather, and full-steam-ahead the remaining 70% of the time. (Research shows that turning up the heat on power plants, and then turning it back down, and up again actually increases the CO2 emissions.) Absent a major breakthrough in expensive energy storage, wind can never save enough fossil fuel to make any significant difference.  After twenty years of subsidies, wind energy has not replaced one traditional power plant.

Some argue that many new technologies got their start through government support. This might be a good viewpoint if wind energy were “new.” But after twenty years of subsidies it is little better now than it was in the late 1800s. Windmills produced electricity then, and modern industrial wind turbines generate electricity now. It is not that they do not work; they do. They just don’t do so effectively, economically, or 24/7—and they still need Uncle Sam (ie, taxpayers and consumers) to prop them up.

Those who favor free markets need to seize upon this opportunity to push for the government to get out of the business of picking winners and losers. Clearly the “green” experiment has failed. Billions have been lost in the effort.

If we truly believe in free markets, why stop at just cutting the subsidies to wind energy? Stop the subsidies to all energy! May the strongest survive! The fact is, such a move is afoot. While HR 3307 aims to stretch out the subsidies for wind energy, HR 3308 will stop subsidies for all energy sources—wind and solar, oil and gas. The playing field will be level; billions woul be saved!

The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc. and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). Together they work to educate the public and influence policy makers regarding energy, its role in freedom, and the American way of life. Combining energy, news, politics, and, the environment through public events, speaking engagements, and media, the organizations’ combined efforts serve as America’s voice for energy.

Over at the American Spectator, my colleagues Vincent Vernuccio and Matt Patterson have an excellent piece about how the President’s Keystone punt has been received by organized labor. Here’s a roundup of reactions noted in their oped:

• Terry O’Sullivan, head of the Laborers’ International Union of North America (LIUNA), has called Obama’s action “politics at its worst,” saying that “once again the President has sided with environmentalists instead of blue collar construction workers.” O’Sullivan angrily vowed that “workers across the U.S. will not forget this.”

• Mark H. Ayers, president of the Building and Construction Trades Department, AFL-CIO has publicly hammered the jobs issue. In a January 18th press release, Ayers voiced the frustration of many union workers, saying “…with a national unemployment rate in construction at 16 percent nationally, it is beyond disappointing that President Obama placed a higher priority on politics rather than our nation’s number one challenge: jobs.”

• James T. Callahan, president of the International Union of Operating Engineers, agrees, complaining to the Washington Post that Obama’s decision was “…a blow to America’s construction workers,” who are struggling in “the sector hardest hit by the recession.”

Read the whole thing here.

Thanks to the 2007 Energy Independence and Security Act, motorists are subject to a Soviet-style production quota for biofuels. Every year, Americans must purchase greater volumes of biofuels–motor fuels distilled from corn, soy, and plant matter–until 2022, when the production quota tops out at 36 billion gallons. Fifteen billion gallons of that figure would come from corn ethanol. Most of the rest must come from cellulosic ethanol, a fuel that doesn’t yet exist. (That’s right, the U.S. Congress passed, and President George W. Bush signed, a bill that requires the production of 16 billion gallons of an imaginary fuel). For biodiesel, the Energy Independence and Security Act requires the production of 500 million gallons in 2009, 650 million gallons in 2010, 800 million gallons in 2011, and 1 billion gallons this year. Thereafter, the biodiesel mandate remains at 1 billion gallons, although EPA Administrator Lisa Jackson has the discretion to increase the quota.

Last year, EPA proposed to use its authority to increase the biodiesel mandate in 2013 to 1.28 billion gallons—a 28% increase over the statutory minimum. In December, however, EPA postponed the announcement of the 2013 production quota for biodiesel, and the Agency left open the possibility that it would keep the biodiesel mandate at 1 billion gallons. Naturally, EPA’s reticence outraged the biodiesel industry. According to Energy & Environment GreenWire (subscription required),

“There’s no question that the production capacity is there. The biodiesel industry can do it, and there’s no question that the 1.28 can be met,” said Ben Evans, director of federal communications at the National Biodiesel Board. “It’s really surprising to us that there would be this hesitation and the potential for moving it back to a billion. To us, it would really be a devastating blow.”

Of course, the effect would be “devastating” because the biodiesel industry simply cannot compete on an open fuel market. Don’t take my word for it! Even biodiesel producers are willing to concede that their product is inferior. From the same GreenWire article:

“If [EPA] backs off that once it said it, it’s sending a signal that it’s potentially going to let this industry swing, and by swing I mean from the end of the rope,” said [Joe] Gershen, [director of sales and marketing at Crimson Renewable Energy LP, a California-based biodiesel company].

The biodiesel producers’ warning of imminent catastrophe absent increased government support harks back to the wise words of the Toronto Sun editorial board, “…since renewable energy can’t survive without massive government subsidy, when you cut the subsidy, you cut the jobs that subsidy creates.”

In a previous post here, I noted the major problems with House GOP leadership’s proposal to link revenue from expanded domestic energy production with the Highway Trust Fund in their surface transportation reauthorization legislation. Since then, the three major portions have cleared their respective committees: House Natural Resources approved the drilling proposals, Transportation and Infrastructure passed the primary highway bill, and the revenue link was cleared by Ways and Means. A vote by the full House is expected sometime next week.

Observers expect the bill to fail, not only because there is very little for Democrats to like, but also because principled fiscal conservatives — from our “user-pays” coalition to Heritage Action to Club for Growth to RedState — have all slammed the legislation as a Big Government wolf wrapped in pro-market, pro-growth sheep’s clothing. This proposed bill would continue to federally fund highways at unsustainable levels and fails to address how states are to begin reconstructing their portions of the Interstate system. For instance, it explicitly bans states from tolling existing Interstate segments even for the purpose of reconstruction. Reconstruction to current highway construction guidelines by definition increases capacity, yet the tolling section author(s) apparently didn’t find this additional capacity enhancing enough to justify allowing states to implement an intelligent financing mechanism that can actually pay for the needed investment.

Furthermore, the bill seemed to have been assembled with little care as to how certain provisions might impact the real world. For example, a reasonable proposal to increase maximum truck weights on federal highways was defeated in committee in large part because the legislative author(s) of that provision did not include a way to pay for the increased wear and tear. An example of a clean pay-for in this case would have been to simply remove the cap on the annual Heavy Vehicle Use Tax and perhaps adjust the Tire Tax and Truck and Trailer Sales Tax rates accordingly. Or perhaps allow states to opt-in and take over funding responsibility of the additional wear and tear. But did they include such a pay-for or devolution option? Of course they didn’t, and that underscores the problem.

There are essentially two very different (rational) options for moving forward: (1) greatly increase user taxes (primarily fuel taxes) at the federal level to fund reconstruction; or (2) start devolving highway funding to the states and permit them to toll (and contract with private partners) existing sections of Interstate to finance reconstruction.

In our view, option (2) is far superior. The federal government has no real business funding highways and it has proven through years of ineptitude that it is not capable of effectively doing so. Like every highway bill since ISTEA (1991) — which was the first reauthorization following the completion of the Interstate Highway System — Congress appears willing to punt, rather than address in any meaningful way the serious problems of the status quo.

As I mentioned in my previous blog post here at GlobalWarming.org, CEI held a briefing on Capitol Hill along with the Reason Foundation, Taxpayers for Common Sense, and Natural Resources Defense Council (yes, you read that correctly) explaining why moving away from a “user-pays/user-benefits” highway funding principle would be a grave mistake. See that previous blog post for more detail on “user-pays.” You can watch the video of the briefing below:

Fresh off a nod from President Obama’s State of the Union speech, T. Boone Pickens has again began to circle the country touting the alleged benefits of providing subsidies for the transportation sector to convert more vehicles to natural gas power. Today, he writes in The Chicago Tribune:

If you are going to transform American energy to address the national security and economic risks associated with our OPEC oil dependence, there is only one solution: move our natural gas reserves into transportation, with an emphasis on the heavy-duty truck and fleet-vehicle markets.

Free-market advocates argue that’s bad public policy. They fail to understand that OPEC is far from a free market. They’ll tell you we shouldn’t pick winners and losers in the transportation fuel segments. I say it’s time to pick America over OPEC. Let’s go with anything American. I’m fine with the battery, but remember, it won’t move an 18-wheeler.

Imagine the impact natural gas could have in solving our energy problem. Targeting heavy-duty trucks and fleet vehicles — about 8.5 million in all — could cut our OPEC oil dependence in half in 10 years or less.

Fortunately, while we wait for Washington policymakers to lead, the move to replace more expensive, dirtier OPEC oil, diesel or gasoline with cheaper, cleaner domestic natural gas is gaining private-sector support. At an event in Chicago last week, two leaders in the natural gas vehicle industry — Navistar and Clean Energy Fuels — announced a plan to aggressively develop a comprehensive system to build natural-gas truck engines and provide the infrastructure to fuel them.

Over-the-road trucks tend to run the same routes on the same schedule. Drivers stop in the same places to rest, eat and refuel. Putting natural-gas refueling stations along the major travel routes is a relatively minor logistical issue. Building natural-gas engines for those trucks will be a major job creator.

The fact that OPEC isn’t a “free market” does not allow one to conclude that the U.S. should further distort markets without further argumentation, which Pickens does not provide, deciding to go the “national security” route that so many arguments deviate towards when they run out of good points.

The primary way in which OPEC could “harm” America is by colluding to keep prices higher. However, higher oil prices help to make the use of natural gas for transportation more appealing. Because this hasn’t been adopted on a wide scale, its clear that the economic harm from relying on oil imports should be less than switching to natural gas in situations where it doesn’t make sense.

However, as Pickens notes, it does make sense in many situations because natural gas is quite cheap. But rather than praise companies for their patriotism or whatever nonsense he’s referring to, the companies are making this decision because its a profitable one.

Pickens will continue to push his “plan,” and politicians will continue to listen because when you are willing to shower politicians with millions of dollars, their ears instinctively perk up. Here is Pickens on CNBC hoping for higher natural gas prices, so wind power is profitable again.

Mega Star Brad Pitt made a guest appearance on Jon Stewart’s The Daily Show this past Wednesday where he made a point to condemn the traditional gas-guzzler with an analogy of his new Academy Award-nominated Moneyball.

Brad explains:  “It (Moneyball) was the story of this small market team that found the game unfair, they could not compete.  They couldn’t buy the talent and if they developed the talent it was poached by the rich team, so what are they going to do to level the playing field?  And these guys started questioning 150 years of baseball knowledge and they started with the question, ‘Just because we’ve been doing it this way for so long, does that mean it’s right?’ I equate it to the automobile, like if we invented the automobile today, would we invent a car, would we say, ‘I know!  We’ll run it on a finite fossil fuel. We’ll export a half a trillion dollars of our GDP.  We’ll spend hundreds of billions of dollars on our military to protect that interest, and it will pollute the environment!’ You know, it just doesn’t make sense!”

I give Brad two thumbs, way down, for this elitist tripe.  What celebrities seem to miss is that historically, the introduction of the fossil-fueled automobile has been one of the greatest emancipators, leveling the playing field by lifting many out of poverty through the access of affordable mobility.  In The Best-Laid Plans, Randal O’Toole writes:

Not only are we more mobile, this mobility is far more egalitarian than mass transportation was in its heyday.  Well over 90 percent of American families have at least one car, and many of those who don’t could own one but choose not to.  Some new cars cost more than $100,000 while some used cars cost less than $1,000, but they all have more-or-less equal access to nearly all America’s highways, roads, and streets.

The biggest benefit is increased incomes.  The incredible mobility provided by the mass-produced automobile has significantly boosted personal incomes in the past century.  We typically think people buy more cars only when they can afford to do so, but the reality is more complex.  Incomes are increased by auto ownership as much as if not more than ownership is increased by higher incomes.

One hundred years ago, the average American worker earned, after adjusting for inflation to today’s dollars, about $10,600 a year.  By 1929, when half of all Americans owned an auto, this had increased to $17,000 a year.  Today, income per worker (including benefits) exceeds $72,000 per year, more than seven times what it was before the automobile.  Much if not most of this increase is due to the automobile.  (205-6)

Regardless of the automobile’s inability to meet the standards of the Hollywood glitterati, it has freed the average person from geographic and economic isolation.  Brad, who makes millions per film, has had the luxury to be one of the first of the Hollywood royalty to own a $100,000+ electric Tesla Roadster that was released in 2010.  I have no hard feelings towards Brad’s personal automobile predilections, so he should keep his contempt for the car that I drive to himself.

To view Brad’s performance, click here  and fast-forward to the 2 minute mark to get directly to the analogy.

I and several of my CEI colleagues were looking forward to an informal debate late Friday afternoon on energy policy sponsored by McKinsey and Company, the global consulting firm.  As part of their “Drinks and Debate” series, McKinsey’s Washington, DC office invited David Kreutzer of the Heritage Foundation and Joe Romm of the Center for American Progress’s Climate Progress blog to make some remarks and then take questions from an audience of around 40 people representing all shades of the political spectrum.  It sounded like a lot of fun because Romm often seems enraged and slightly deranged in his frequent blog posts, but unfortunately Romm cancelled at the last minute.  Our host explained that Romm had pulled out without giving a reason and that his side of the debate would be represented by a bottle of Corona Light.  It was still fun: David Kreutzer gave an engaging and stimulating presentation, as he always does, and the bottle of Corona Light proved to be more rational and less misleading than Romm.

Today and tomorrow, the House Energy and Commerce Committee will mark up H.R. 3548, the “North American Energy Access Act,” Rep. Lee Terry’s (R-Neb.) bill to nullify President Obama’s rejection of the Keystone XL Pipeline.

Reps. Henry Waxman (D-Calif.) and Ed Markey (D-Mass.) will offer an amendment that would bar U.S. refiners from exporting any petroleum products made from Keystone crude.

Waxman and Markey know full well the GOP majority will reject the amendment. But that’s the point. By forcing Republicans to vote no, they hope to “expose” Keystone as an “export pipeline” and a “scam” that won’t provide any consumer or energy security benefit.

Today at Master Resource.Org (here), I explain why the Waxman-Markey amendment deserves raspberries.

• The policy it advocates discriminates against foreign commodities that have entered into domestic commerce and thus is illegal under GATT.
• A significant portion of the oil shipped through the pipeline would likely be turned into products for U.S. consumers.
• Even if that were not so, Keystone crude would still displace OPEC crude that U.S. refiners would otherwise turn into products for export.
• The amendment is a form of reverse protectionism, based on the cockamamie idea that banning exports lowers prices by increasing domestic supply.
• Imagine what a complete ban on petroleum product exports would do. It would drive investment, production, and the associated jobs overseas. Two further consequences would ensue: (1) We would then be more dependent on foreign imports; (2) gasoline prices would increase because we’d have to pay higher shipping costs and because foreign refiners would no longer have to compete with U.S. refiners.
• Such an absurd policy differs from Waxman and Markey’s proposal only in degree, not in kind.

Why are opponents pushing the ludicrous argument that greater access to Canadian oil won’t increase our self-reliance on North American energy? I suspect it’s because the public isn’t buying their even more over-the-top claims that Keystone XL will ruin the Ogallala aquifer and wreck the global climate system.

To be sure, I’m a staunch defender of wealth creators, and I begrudge no one for his or her riches…as long as he or she doesn’t say silly things like “The focus on pro?t has caused signi?cant negative, unintended consequences.”

I have two problems with Sir Richard Branson’s commentary. First, it’s wrong. Profits incent wealth creation, which, in turn, improves the environment, because wealthier societies are friendlier to the environment. More importantly, wealthier societies are healthier societies.

Second, having a billionaire say that profits are secondary—after he earned his money—is akin to Sir Branson raising the drawbridge immediately after gaining entry into the castle, while the peasant throngs stand on the other side of the moat.