Category Archives: energy policy

Coal Myths and Legends: North Valmy as Dinosaur in the Coal Mine

The applause line “I dig coal” may play well in certain West Virginia venues, but it’s not playing all that well with Idaho Power:

“Idaho Power says its coal plants still generate capacity during high-demand periods, but baseload from the facilities has been declining—a trend it sees continuing in the region, and nationwide.

“The decline in baseload energy production is primarily viewed as driven by low natural gas prices and the expansion of renewable generating capacity,” the utility writes in its IRP. “Because of the low natural gas prices and expanded renewable generating capacity, wholesale electric market prices over recent years have frequently been too low to merit economic dispatch of coal generating capacity.”

Idaho Power is giving serious consideration to retiring its North Valmy plant in Nevada early; notice the references to natural gas prices and the expansion of renewable generating capacity.  In short, coal isn’t coming back, anywhere.

Why? Probably because capitalism works.  

“Coal has been crushed by the shale boom, which has made natural gas — coal’s biggest competitor — extremely cheap. The price that U.S. power plants have been paying for natural gas plunged 71% between 2008 and 2016, the Columbia report found. Coal prices were down just 8% in that same period.

At the same time, coal faces new competition from the rise of renewable energy, including wind and solar. The falling cost of solar energy combined with federal tax credits have created a boom in solar jobs. The solar industry ended 2016 with 260,000 workers, according to the Solar Foundation.” [MoneyCNN]

Why would a utility, or any other business for that matter, purchase supplies from a higher priced vendor when cheaper supplies are at hand?  If you want an example of how the “market works” this is it.  Utilities are increasingly using natural gas and renewables because those sources are (1) cheaper or (2) going to be cheaper in the long run.

A second point should be made — there are two coal markets: Metallurgical coal is used primarily in steel production; Thermal coal is used for electrical production.  Prices for metallurgical coal, also called Met Coal or Coking Coal, have increased as seaborne coal (from Queensland) tightens, and as supplies from Chinese mines diminish as their mines come under increased scrutiny about safety concerns.  The price of Met Coal is a function of not only American mines, but of Australian and Chinese sources.  The price of Thermal Coal has been declining since 2012 and doesn’t show any signs of reversing that five year trend anytime soon.  This is not a case of “if you mine it they will come,”  even with the decline in Thermal Coal prices, the price of natural gas and renewables are still putting pressure on the market.

The Columbia Study (pdf) explains, once again, how capitalism works.  What are the causal factors in the collapse of the coal mining sector of the economy?

“US electricity demand contracted in the wake of the Great Recession, and has yet to recover due to energy efficiency improvements in buildings, lighting and appliances. A surge in US natural gas production due to the shale revolution has driven down prices and made coal increasingly uncompetitive in US electricity markets. Coal has also faced growing competition from renewable energy, with solar costs falling 85 percent between 2008 and 2016 and wind costs falling 36 percent.”

Thus, bolstering the contention made previously that prices matter, and if lower prices are available for some commodity, then that’s where the “market” will go.  There are other factors: (pdf) A slowdown in Chinese manufacturing demands; deregulations may not have any significant effect on mining if the prices for natural gas and renewables continue to decrease; and, while we might expect a modest recovery to 2013 levels — that’s probably all that can be squeezed from this market.

So, Idaho Power/NVEnergy’s decision to concentrate on production using more renewables and natural gas is likely to be sound economically for long term corporate health — and the old coal-fired North Valmy plant sits like a Jurassic Creature in Pumpernickel Valley.

As for employment prospects, coal mining isn’t a growth industry: (pdf)

A plausible  range of US coal mining employment in these scenarios ranges from 70,000 to 90,000 in 2020, and 64,000 to 94,000 in 2025 and 2030 — lower than anything the US experienced before 2015.

Thus, basing economic policy on a sector which includes only 0.03% of our national economy makes precious little sense.  It makes even less sense to look backwards:

“When it comes to electricity generation in the US, the Department of Energy’s 2017 Energy and Employment Report suggests that the solar industry now employs more people than coal, oil, and gas combined. Oil still employs the largest share when including jobs related to fuels, however.

“Our findings would lead us to believe that the right place to invest dollars are in renewable energy rather than fossil fuels,” Delaney says. “These jobs are widely geographically distributed, they’re high paying, they apply to both manufacturing and professional workers, and there are a lot of them.”

How about job training for those seeking to move from a declining sector to sectors with more hiring prospects?  The Trump administration has lauded the prospects of job re-training and apprenticeship programs, but the money isn’t where the mouths are:

“Trump has proposed cutting the Labor Department’s budget by 21 percent in fiscal 2018.  That includes a 40 percent cut to the Labor Department’s Wagner-Peyser Employment Service, which supports about 14 million job seekers annually and last year helped nearly 6 million people find jobs. The proposed cuts also include a $1.3 billion reduction to programs that operate under the Workforce Innovation and Opportunity Act, which Congress reauthorized in a bipartisan move three years ago.”

Drilling down to “coal communities,” the impact is patently worse:

“Based on the limited information provided by the blueprint, President Trump’s FY 2018 budget would cut at least $1.13 billion from these programs and offices, including several in their entirety—a total that may increase when the full budget is released in May.2 Through the POWER Initiative, offices and programs targeted by the cuts funded more than $115.8 million in economic development, job training, and other grant projects targeting coal communities in more than 20 states from 2015 through early 2017.”

It is egregiously unseemly to give pep talks about “digging mining,” in coal country while slashing budgets for economic development and job training for the people facing declining employment prospects in the mining sector in those communities.  Indeed, the current administration gives every impression of saying “we love you,” to coal country residents while allowing greater pollution of their cities and towns, and cutting job training opportunities for residents seeking employment in faster growing sectors of the regional economies.

Meanwhile, the North Valmy plant stands in Pumpernickel Valley.

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Bits and Pieces: Misleading headlines, and other matters in Nevada Politics

Jig Saw Puzzle Sometimes the headline doesn’t quite fit the story. Here’s an example: “Millions in the red an Obamacare insurer has failed” compliments of the Las Vegas Review Journal.   You have to read a few paragraphs down to get the basics of the story.  In addition to poor administration and long repayment waiting periods, “the co-op made a critical mistake: Only Nevada allows enrollment in non-exchange plans outside of the federal sign-up period, which runs from Nov. 1 to Jan. 31. Most insurers require a 90-day wait to discourage people from going without a plan until they get sick, but the co-op started with no waiting period, then added a 30-day window in late 2014. That created a sicker — and pricier — member pool,..”  [LVRJ]  These aren’t issues with the Affordable Care Act, nor is this indicative of any flaws in the overall system. What this illustrates is that the reason most firms go under is poor administration and management.

Speaking of management:  Is Waste Management Inc. living up to the terms of the contract it signed with Washoe County?  The Reno Gazette Journal reports on a crucial point: “One central issue is whether Waste Management has fulfilled the requirement to build an Eco-Center in Reno to sort its single-stream recycling and provide other services to customers. The city allowed Waste Management to raise rates, in part, to finance the construction of the Eco-Center.”  Back in March, 2013, The RGJ reported that the Eco-Center was supposed to streamline recycling in the area, noting that there were still some “kinks” to be worked out. Evidently, the kinks are winning?

The Washoe County Democrats have a quiz for us.  How do you score on a test of Rep. Joe Heck’s statements on Medicare? Social Security? Immigration?  I’ll give you one – yes, he’s called Social Security a “pyramid scheme,” and called for it to be privatized.  By July 2012 he’d called the basic social safety net program a Pyramid Scheme at least four times. [NVDems]

One win for Solar Power:  Perhaps not a long term one, but for now the efforts of NV Energy Inc to slap down the solar power industry in Nevada have been thwarted in the short term. [LVSun]  The power company is all for solar, except: “NV Energy’s proposed plan would reduce the value of credits paid to consumers and add a new fees. In filings with the PUC, the company said that the current structure unfairly shifts costs to customers without solar. The rooftop solar industry expects that the utility-backed proposal would reduce the rate of adoption of solar power.”  Original NV Energy filing here (warning: slow loading PDF)  and here (warning: slow loading PDF).  There’s the Solar Energy’s proponent statement to the PUC August 18, 2015 which makes interesting reading – again a warning: slow loading PDF.

All this in time for the Valley Electric Association to build a 15 mega-watt solar project in the northern part of Pahrump. [PVT]

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Filed under ecology, energy, energy policy, health insurance, Heck, Nevada energy, Nevada politics, Social Security

The Fanatic Season: Politics as Liturgy

Fanatic Eric Hoffer summed it up in The True Believer: Thoughts on the Nature of Mass Movements in 1951:

“The quality of ideas seems to play a minor role in mass movement leadership. What counts is the arrogant gesture, the complete disregard of the opinion of others, the singlehanded defiance of the world.”

Consider how often the right wing insists on doing the unthinkable?  Why would anyone launch a deliberately provocative  “Cartoon Contest” and call it an exercise in ‘free speech?’  Why would anyone put a gun site target on the names of members of Congress? Why would anyone think it appropriate to print the addresses of physicians who provide abortion services?  Because, perhaps, these are arrogant gestures, with a complete disregard for the safety and well being of others, defying convention (and good sense) as would a single-handed hero in defense of something, anything, whatever…

On the national level this allows Fox News to promote the demonization of Islam and its adherents, or to declare a “War on Christmas,” or to offer comfort to the bigot, the intolerant, and the racist.   On a state level the concept allows the elevation of the gun enthusiasts and supports their sense of victimization – as some unspecified “they” are perceived to be “coming for your guns. “ It also allows the faithful to identify “public servants” as “pigs at the trough” when they aren’t being vilified for not doing their jobs with insufficient resources; and, to degrade the humanity of the working poor for “not making good choices,” thereby relinquishing their right to be treated with compassion as fellow human beings.  Hoffer had a line about this concept as well:

“Hatred is the most accessible and comprehensive of all the unifying agents. Mass movements can rise and spread without belief in a god, but never without a belief in a devil.”

Indeed, the current manifestation of the conservatives in the Republican Party (and this may mean just about all of its leadership at the moment, the moderates being driven from the field) is beset with devils of all sorts.   At this juncture political ideology becomes confused with something we might call political liturgy.

Let’s look at the definitions. First, ideology is defined as “a system of ideas and ideals, especially one that forms the basis of economic or political theory and policy.”   Liturgy means “a form or formulary according to which public religious worship, especially Christian worship, is conducted.”  A formulary “is a collection of formulas or set forms, especially for use in religious ceremonies.”

The fanatic may have some difficulty differentiating between an ideology and the performance of liturgy. Ideology is properly understood as a position a person takes regarding, say, how revenue is collected for the operation of a government and the priorities for its distribution.  A liturgical element inserts itself as time after time a politician asserts talking points which are faith based with little or no rational substance.

Some Examples

The standard Republican talking point (liturgical element) concerning proposals to increase the minimum way is that doing so will have a negative economic effect.  This is often reduced to the formulaic: Increasing the minimum wage will cost jobs.  The problem is that there is no substantive research confirming this notion.  There are several credible studies indicating there would be no “negative employment effects” of increasing the minimum wage, and the talking point defies the common sense notion that an employee of one company is always a customer of others.  Empirical studies demonstrate that lower wage workers are more likely to spend marginal income than wealthier ones. [Salon]

The standard Republican talking point (liturgical element) is “Support the Troops;” and a person can easily obtain a yellow ribbon car magnet for this message to place alongside the “Love Your Country Live With Pride” bumper sticker.  That this is a liturgical insertion rather than an ideological position is illustrated by the disinclination of Republicans in general to vote in favor of increased wages for members of the Armed Forces, in favor of more benefits for service members and veterans, in favor of more job training programs for veterans, and in favor of the extension of more VA medical services to veterans who served during peacetime.  At the risk of sacrilege, I’d say this is roughly analogous to reciting “Kyrie eleison, Christe eleison, Kyrie eleison” without thinking of the meaning.

And then there’s the standard GOP line … “the government is the problem.”  Until, of course, it’s the solution.  We might consider Texas Senator Ted Cruz’s remarkable illustration of how this liturgical element can be reversed as he begged for federal aid for Texas cities literally drowning in flood waters.  This, from the self-same Senator who voted against federal relief expenditures for the victims of Hurricane Sandy. [DailyBanter]  This line is hauled out of the vestry and applied to attempts to curtail malfeasance (and worse) in the banking industry, to curb polluters, to put the brakes on corporate mismanagement, until the nation becomes a victim of banking malfeasance (or worse), the state has to clean up a toxic spill, and the investors in a corporation despair of any relief from greedy executives.

The Ramifications

When policy positions (political ideological statements) become articles of faith (as part of a liturgy) then there’s a danger that portions of the electorate are no longer participating in a political process, but are voting and behaving as a “mass movement” in which the Devils will be scourged by those who can recite all the correct elements of the liturgy.  Nothing contemporary illustrates the liturgical quality of Republican leadership statements as the current blathering about climate change.

When the Pew Foundation did some polling on the subject it found that 67% of all adults surveyed believed that climate change is occurring, and 84% of Democrats (or those leaning toward the Democratic party) agreed.  Among Republicans 46% agreed the climate is changing, and this represents 61% of “mainstream GOP” who agree the climate is changing, and 25% of Tea Party adherents who agree.

Bear in mind the Tea Party  percentage when noting that 66% of Democrats agreed that human activity was a major cause of climate change, compared to 43% of independents, and 24% of Republicans in the 2013 survey.

The 24-25% of Republican voters would likely find nothing untoward about presidential candidate Rick Santorum’s request that the Pope leave the “science to the scientists.” [CSMonitor]  It’s probably important to note at this point, that no, the Pope doesn’t have the equivalent of a master’s degree in chemistry – but he did have a degree in chemistry in the Argentine educational system and according to a fellow Jesuit: “Liebscher said he hopes this does not sound like “we’re denigrating his education. Francis certainly respects the scientific method, and careful measurement ranks high in his list of values.”   The “correct” liturgical response about climate change has evolved in Republican political parlance.

Initially, and there are still adherents to the position, the GOP response was that Climate Change was misinformation, or at worst a hoax.  Later on the position was Climate Change is real but human beings aren’t responsible. The present iteration seems to be that Climate Change is real, human beings just might be responsible for some of it, and ordinary people shouldn’t talk about it because “science is best left to scientists,” the optional liturgical insertion may be “I’m not a scientist.” [Bloomberg]

Moving beyond a single illustration of how the transformation of ideology into liturgy is problematic for a democratic republic, when the correct formulaic recitation of liturgy stands in place of a discussion of policy alternatives only the True Believers are deemed fit to carry the party banners.  This is what former Republican official Bruce Bartlett complains of when writing that Fox News has actually harmed the political prospects of the Republican Party.

‘Fox has now become a problem for the Republican Party because it keeps a far right base mobilized and angry, making it hard for the party to move to the center or increase its appeal, as it must do to remain electorally competitive….One of the reasons Mitt Romney was so unable to pivot back to the center was due to the drumbeat at Fox, which contributed to forcing him to the right during the primary season.’

Compare this to one of the original quotations above:

“Hatred is the most accessible and comprehensive of all the unifying agents. Mass movements can rise and spread without belief in a god, but never without a belief in a devil.”

The unspoken assumption seems to be that Fox News will only beat out the rhythms of the Pure, the uncontaminated unadulterated liturgy of the extreme right.  It will only sate the political appetite of those who prefer liturgical formulations rather than explain the underlying catechism; in other words – those who wish to cast out the “devils” — be they African Americans in urban areas, minimum wage workers, environmental advocates, human rights activists, critics of the banking industry, or Democrats.

The proper incantation of the political liturgy will comfort those who wish to be comfortable in their biases, prejudices, and ideology.  Just as their unquestioning belief in a particular confession of faith grounds them, their insistence on a political liturgy relieves their anxieties keeps them anchored.   A liturgy which validates their fears – of African American men, of the working poor, of unemployment, of immigrants, of members of the LGBT community, of Muslims, of economic displacement, of anyone or anything outside their immediate experience – is consoling.

The Bottom Line

The problem, as Bartlett observes in a political realm, is that the more ideology is replaced by a confession of faith, and the more the confession of faith is sustained by the participation in ritualized liturgy, the more likely it is that the movement devolves into a sect.  Once a movement is reduced to a sect at least two things can happen, and they’re both bad.

First, as Bartlett notes, the sect becomes so restricted that it cannot reach a wider audience, and secondly the sect is inclined to defend the indefensible, merely because a fellow member is being criticized.  Witness the defense of the Duggar family’s handling of their son’s molestation of his sisters which almost perfectly summarizes the DARVO position – Deny, Attack, Reverse the Victim and the Offender.  Again, the more the sect becomes identified with a cultish adherence of defending the indefensible the more narrow the appeal of the movement.

One one hand there is some consolation in the idea that the Republican Party may eventually restrict itself to a narrow cult of unelectable True Believers, however, as one who finds the restriction of alternative points of view counter productive in politics and public policy the prospect of a degenerating GOP is not very appealing.

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Heller and the Keystone Amendments: Taxpayers on the Hook

Heller 3 Before the Keystone Pipeline bill made it to a vote in the U.S. Senate there were some amendments which shed light on the mindset of the proponents of the construction. Remember, this pipeline is for the transportation of foreign oil (Canadian) through (not to) the United States to foreign markets.  S.Amdt 155 came up for a vote, its sponsor Senator Corey Booker (D-NJ) spoke in favor saying,

“Mr. President, I want to say that amendment No. 155 is a  very important amendment. It is common sense. It is practical. The National Environmental Policy Act, NEPA as it is known, is one of the most emulated statutes in the world. It is something that many people see as valuable in other countries because NEPA, in fact, by many is referred to as the modern-day environmental Magna Carta. NEPA regulations require agencies to supplement already-issued environmental impact statements when significant new circumstances or information is found to exist relating to the environmental impact of a project. The pending Keystone bill, however–and quite surprisingly–would deem the final environmental impact statement issued last January to fully satisfy this NEPA requirement going ahead. This would remove the obligation from permitting agencies to supplement any environmental impact statements if significant new circumstances or information is discovered.”

Here’s a loophole through which one could drive an oil tanker.  In every other instance the regulatory agencies are required to consider new evidence and new circumstances when overseeing the environmental impact of any proposal – but not this one. Not Keystone Pipeline. No, once the “final” impact statement is filed – that’s it. No more adjustments. Even if the construction called for a route change which might put a local drinking water source in peril? Even if the construction caused peripheral damages, unforeseen in the initial plans….  Senator Dean Heller (R-NV) was one of the 56 members of the Senate to vote “No” on this amendment.  [rc 46]

S. Amdt 141 was simplicity itself, delay the effective date until the White House had determined that the construction of the Canadian pipeline would have no negative impacts.  Again, Senator Heller voted, “No.” [rc 47]

S. Amdt 178 was also fairly simple. “To ensure that products derived from tar sands are treated as crude oil for purposes of the Federal excise tax on petroleum.”  Here’s a lovely catch

Return, for a moment, back to 2010 when there was a pipeline spill in Michigan, some of which was from Canadian tar sands.  Enter the Tar Sands Tax Loophole:

Five months later, the Internal Revenue Service quietly ruled that a significant portion of the type of Canadian crude flowing through that Michigan pipeline was exempt from the per-barrel tax created for that spill-liability fund. The loophole for oil sands fuel, which also forms the bulk of the crude set to run on the Keystone XL pipeline, remains in effect today despite congressional proposals to close it. [EE]

Now it’s clear – Senator Heller voted against having TransCanadian pay taxes into the spill-liability fund to pay for clean up in the case of a pipeline break or failure.  A vote against this amendment was quite simply a vote in favor of having anyone – anywhere – pay to clean up the oil spill EXCEPT the pipeline company responsible for the problem. [rc 48]   Nothing sends such a Valentine to the Koch Brothers and the Canadian oil companies as this.  And then he voted in favor of the unamended bill. [rc 49]

In short, Senator Heller’s bought into the various and sundry convenient prevarications associated with the Keystone debate.

It will NOT be a long term “job creator,” because most of the jobs, about 3,500 will be short term construction.  The construction jobs would be beneficial, but only about 35-40 long term jobs would be created.  The pipeline does transverse a section of a major aquifer, and that’s reason enough in an agricultural region (read: breadbasket) to think very carefully about pipeline spills.   While it’s one thing to support a foreign pipeline transporting foreign oil to the world markets – it’s another to exempt the pipeline and oil producers from paying into the  Spill Liability Fund.

The Fund can provide up to $1 billion for any one oil pollution incident, including up to $500 million for the initiation of natural resource damage assessments and claims in connection with any single incident. The main uses of Fund expenditures are:  State access for removal actions; Payments to Federal, state, and Indian tribe trustees to carry out natural resource damage assessments and restorations; Payment of claims for uncompensated removal costs and damages; and Research and development and other specific appropriations.

Recall, the next time Senator Heller bemoans the “tax payer bailouts,” that he just voted to put the U.S. taxpayer on the hook for any clean up costs associated with the Keystone project.

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Heller: Environmental Equivocation and the Koch Brothers

Heller 3

Nevada Senator Dean Heller (R) was one of 98 members of the upper chamber to vote for an amendment to S. 1 (Keystone Pipeline bill) in which the Senate declared ‘global climate change is NOT a hoax.’ [rc 10] That’s good for starters.  However, Senator Heller didn’t get over the finish line. Along came vote number 12, which sought to clarify the nature of the global climate change:

S Amdt 58: (2) “The [Intergovernmental Panel on Climate Change], in addition to other institutions, such as the National Research Council and the United States (U.S.) Global Change Research Program (USGCRP), have concluded that it is extremely likely that global increases in atmospheric [greenhouse gas] concentrations and global temperatures are caused by human activities.”;…

If one of the significant causes of global climate change isn’t human activity, then what might Senator Heller be thinking?   Is the Senator one of the 18% of all Americans who believe the current situation is the result of natural environmental patterns? Is he one of the 70% of Tea Party Republicans who believes there’s no solid evidence for global climate change?  Or, is he part of the 30% of moderate Republicans who believe there’s no solid evidence for global climate change?   [Pew]

“Opinions of Republicans and Republican-leaning independents divide into four roughly equal size groups: 23% say there is solid evidence of global warming and it is mostly caused by human activity; 19% say warming exists but is due to natural patterns; 25% see no solid evidence and say it is just not happening; 20% say there is no solid evidence but not enough is known yet.” [Pew]

If Senator Heller’s vote on the “hoax issue” is sincere, then he’s probably not a member of the 19% “natural patterns” Republican brigade, nor would he be a member of the “just not happening” chorus. That leaves the 25% who quibble about “not enough is known yet” crowd.  He’s certainly not part of the 23% who say there is solid evidence, and the phenomena is caused by human activity.

Senator Heller will no doubt emphasize his vote on the Hoax Issue as evidence of his moderate views. However, that second vote narrows the box into which he’s placed himself, a box generally shared by those who hew towards the fossil fuel corporation’s line adopted by the less moderate strain of the GOP.

In order to adopt this weasel position between and among the Republican camps one has to ignore the science from NASA (Climate Change Evidence),

“On Earth, human activities are changing the natural greenhouse. Over the last century the burning of fossil fuels like coal and oil has increased the concentration of atmospheric carbon dioxide (CO2). This happens because the coal or oil burning process combines carbon with oxygen in the air to make CO2. To a lesser extent, the clearing of land for agriculture, industry, and other human activities have increased concentrations of greenhouse gases.” [NASA]

It would also be necessary to ignore the conclusions of the Union of Concerned Scientists:

“The atmospheric concentration of CO2 has increased from a pre-industrial era (AD 1000 – 1750) concentration of approximately 280 parts per million (ppm) to around 383 ppm, as measured at Mauna Loa, Hawaii in 2007.[2,9] The carbon in the atmospheric CO2 contains information about its source, so that scientists can tell that fossil fuel emissions comprise the largest source of the increase since the pre-industrial era.” [UCS]

For those inclined to get into the molecular weeds behind this conclusion, the UCS offers a more detailed discussion at the link given above.

Is he thinking the Union of Concerned Scientists might be “too liberal?” Then, he might want to have a look at the joint publication from the U.S. National Academy of Sciences and the British Royal Society.  It’s not like the price is too steep – he could buy a copy for $5.00.

The Big Publication in this field comes in the form of reports from the International Panel on Climate Change.  Their conclusion in 2014 couldn’t be more clear and  precise:

“Human influence on the climate system is clear, and recent anthropogenic emissions of greenhouse gases are the highest in history. Recent climate changes have had widespread impacts on human and natural systems. {1}”

“Anthropogenic” is a fancy scientific way to say ‘US.”  Humans, human beings, persons, people…

Taking the argument one step further, even the Gas Giants are bending their positions on global climate change.  Consider the actions from Shell Oil which generated three prospects and settled on their ‘greenest one’ as company policy back in 2008:

“The greener Blueprints scenario, it said, would be better for both the company and for the world. Shell CEO Jeroen van der Veer publicly called for governments to impose a price on carbon emissions. He wasn’t alone: BP and Exxon, once famous for funding bogus “climate skeptic” research, joined Shell in offering to work with President Obama on a real climate policy, with Exxon executives noting that they’d favor a carbon tax over cap-and-trade.”  [Slate]

Before patting ExxonMobil on the back, that corporation seems to have been trying to play both sides of the road since 2008. The Koch Brothers and ExxonMobil were major funders of the “countermovement” on climate change, but more recent donations to the anti-science activities appear to be coming from such sources as the Donors Trust, and Donors Capital, organizations which are “dark money,” and do not publish the sources of their funding.

Since 2008, Koch Brothers and ExxonMobil have pulled back their funding for climate change denying publications, but the Koch Brothers have surfaced as one of the major contributors to the Donors Trust.

“Donors Trust is not the source of the money it hands out. Some 200 right-of-center funders who’ve given at least $10,000 fill the group’s coffers. Charities bankrolled by Charles and David Koch, the DeVoses, and the Bradleys, among other conservative benefactors, have given to Donors Trust. And other recipients of Donors Trust money include the Heritage Foundation, Grover Norquist’s Americans for Tax Reform, the NRA’s Freedom Action Foundation, the Cato Institute, the American Enterprise Institute, the Federalist Society, and the Americans for Prosperity Foundation,chaired (PDF) by none other than David Koch.” [MJ]

Interesting, the ultra-conservative advocates of the exploiters and polluters who finance that “countermovement” on global climate change are the self-same fat cats who bankroll anti-government, anti-tax, anti-bank regulation, and anti-climate improvement actions.

If Senator Heller has ‘doubts’ about the significance of human activity as it relates to global climate change, from whence is he receiving those uncertainties?

It’s not from the International Panel on Climate Change, it’s not from the British Royal Society, it’s not from the National Academy of Sciences, or the Union of Concerned Scientists, and it’s not from NASA.  That leaves the Koch Brothers and the dark money in the Donors Trust and Donors Capital funds.

Receiving one’s marching orders from the Donors Trust (rather than IPCC or NASA) is no way to convince any thoughtful person that the position taken is “moderate” in any way. It’s far easier to come to the conclusion that Nevada’s junior Senator has adopted the Koch Brother’s radical reactionary brand of Republicanism.  As every grandmother ever said, “You are known by the company you keep.”

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What Our Representatives Did Before Vacation

Amodei 3 House leadership has taken the biennial pre-election vacation, in other words Representatives Heck, Amodei, Titus, and Horsford will be home to face the voters.  However, the House did leave with some parting gifts to corporate America which Representatives Heck and Amodei might wish to explain.

Parting gift (shot) number one: H.R. 4 the inaptly titled “Jobs for America Act.” What this might have to do with jobs is a mystery unless a person subscribes to the well debunked Trickle Down Hoax which says that the more tax breaks we give to corporations the more jobs will be created.  In this measure the research tax credit is made permanent, businesses can expense certain depreciable business assets, corporations are given permanent tax relief,  the bonus depreciation is modified and made permanent, the medical device tax is repealed, there are registration and reporting exemptions for private equity fund advisors, there are registration exemptions for merger and acquisition brokers, there are more reporting requirements on independent regulatory agencies and a retrospective analysis of existing federal regulations – (and what corporation doesn’t want ‘freedum’ from the SEC, the OCC, the FTC, the Consumer Safety Protection Bureau, the Consumer Financial Protection Bureau…) —

And, then there’s congressional review of agency rule making, a permanent moratorium on internet taxes (pro Big Box and Amazon), a land exchange authority to privatize public lands in Oregon and California, and provisions on judicial review of agency actions relating to exploration and mine permits.

In short – this is the exploiters, polluters, hedge fund and private equity wealth management lobbyists laundry list of Things We Want!  And, we like to have them now.  It’s just about every tax cut and deregulations idea ever expounded.   And, we know where tax cuts and deregulation got us in 2007-2008?

And, on September 18, 2014 the bill passed the Republican controlled House on a 253-163 vote.  [rc513] Representatives Amodei and Heck voted in favor of the H.R. 4 – the Exploiters, Polluters, Hedge Fund Managers, Merger and Acquisition Brokers Protection Act of 2014.   Representatives Titus and Horsford did not.  But wait, there’s more!

Parting gift (shot) number two:  The House also passed H.R. 2 the so-called  “American Energy Solutions for Lower Costs and More American Jobs Act.”  If you think this is about creating permanent and well paying jobs for American workers, please find a copy of the bill text – because this is not about lowering your energy costs, nor is it about getting anyone a job – it’s about approving the Keystone Pipeline.  That’s what the first section of the first part of the act is all about – approving the Keystone Pipeline to take Canadian oil to an International port.   Here’s an idea – if the Canadians want to pipe their oil to a port, how about they pipe it to one of their own ports?

And while they’re about it there are provisions in the bill to prohibit the consideration of social costs of carbon in any analysis, repeal of earlier rules and guidelines on energy efficiency, and then Drill Baby Drill anywhere, any place, any time.  This is the American Petroleum Institute’s dream bill. It’s a fossil fuel industry wet dream. And, it passed in the House 226 to 191.  Representatives Amodei and Heck voted in favor of the Drill Baby Drill/ Keystone Pipeline bill;  Representatives Titus and Horsford voted against it. [rc515]

Let’s guess that Representatives Heck and Amodei will come home to tell us they voted against those icky overburdening regulations on “Small Business In America” – the Norman Rockwell Painting People who run those Mom and Pop corner bodegas – not, so fast – the people they voted to protect are the corporate polluters, exploiters, hedge fund wealth management, merger and acquisition brokers, and Oil Giants.  This activity creates jobs, IF and ONLY IF we are foolish enough to believe that cutting taxes on major multi-national corporations creates jobs, and we know that doesn’t work.

The House had time to vote to protect the Oil Giants and the Major Corporations in H.R. 2 and H.R. 4, but they didn’t have time before vacation to take up:

  • The Voting Rights Act
  • Equal Pay for Equal Work
  • Comprehensive Immigration Reform
  • Student Loan Terms and Indebtedness

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Filed under Amodei, Congress, energy policy, financial regulation, Heck, House of Representatives

Another Day, Another Drill Baby Drill Bill

Oil RigAnother day, another bit of living proof Republicans don’t have a clue how world oil markets work…or if they do they don’t care, and they are perfectly pleased to do the bidding of multi-national oil corporations. Witness their shiny new bill: Lowering Gasoline Prices to Fuel an America That Works Act, or H.R. 4899, for which Rep. Mark Amodei (R-NV2) and Rep. Joe Heck (R-NV3) were pleased to vote, but which didn’t fool Rep. Steven Horsford (D-NV4) or Rep. Dina Titus (D-NV1). [rollcall 368]

The bill is a Christmas Wish List from the Oil Barons to the U.S. Congress, it’s Drill Baby Drill, and Shale Smacking Goodness — for the oil barons.

The bill’s authors assume the American public has a density equivalent to the API standard for heavy crude, i.e. an API gravity of less than 20°.

We’d have to be that dense in order to believe that more offshore drilling is going to have a perceptible impact on gasoline prices.  To demonstrate that we have an API gravity of at least light sweet crude, (37° to 42°) let’s review.

What factors determine oil prices?  There’s a picture for that —

Oil Price DiagramThere’s a supply side and a demand side, which in our good old capitalist system creates the prices.   On the supply side, crude oil comes from both OPEC and non-OPEC countries. The demand side is determined by consumption from countries that either are, or aren’t, members of the Organization of Economic Cooperation and Development, aka OECD. [EIA]  The blithe assumption on offer is that if the U.S. drills for more crude oil, and puts more crude oil on the market, the lower the price will be at the pump.  Not. So. Fast.

All those arrows point, not to your local refinery — much less your most convenient filling station — they point to the Spot Price.  The price of oil also depends on the demand for it, and there are two more charts to illustrate who’s demanding what.  First, let’s look at the non-OECD countries, like China, India, and Saudi Arabia:

Non OCEDWithout getting into too much gory detail, the blue columns represent demand from countries like China, India, and Saudi Arabia. The price and consumption trends tend to follow one another.  Now, let’s take a look at the other graph — the one illustrating the OECD countries, the United States and most of Europe.

OECD chartWhat do we learn from this illustration?   The EIA explains:

“The Organization of Economic Cooperation and Development (OECD) consists of the United States, much of Europe, and other advanced countries. At 53 percent of world oil consumption in 2010, these large economies consume more oil than the non-OECD countries, but have much lower oil consumption growth. Oil consumption in the OECD countries actually declined in the decade between 2000 and 2010, whereas non-OECD consumption rose 40 percent during the same period.”

Consumption is higher in developed countries — that’s just about obvious with our higher rate of vehicle ownership — but we have a lower rate of oil consumption growth.  While oil consumption rates were going down in the U.S. and Europe, non-OECD consumption rates were going up, up by 40% as the EIA reports.  Notice that the price and the consumption lines don’t track for OECD countries — that would be us — as they do for the non-OECD countries — that would be China, India, and Saudi Arabia.

Now, let’s return to that spot price.

“The spot price is the current market price at which an asset is bought or sold for immediate payment and delivery. It is differentiated from the forward price or the futures price, which are prices at which an asset can be bought or sold for delivery in the future.” [InvestAns]

The spot price is set in the ‘markets,’ i.e. the commodities market. For today’s prices Bloomberg News “Energy” page provides what the w-o-r-l-d price is for crude oil and refinery products.  Now we can approach the obvious question — who benefits from increased offshore drilling in U.S. waters?

A quick look at the two charts above should provide a major clue — it would be the areas with the highest consumption growth rate, i.e. the non-OECD countries — China, India, Saudi Arabia, etc.  Since oil is sold on the w-o-r-l-d market it will most likely go where there is the most demand.

Thus, what Representatives Heck and Amodei are supporting is the increase in offshore oil leases for multi-national oil corporations to sell the oil on the world market, in which it will probably go to those countries (non-OECD) like China, India, Brazil, etc. in which the consumption growth rate is higher.

To add insult to the injuries, the oil companies aren’t developing the leases they currently hold

“As of May 2012, nearly 72 percent of  the area on the Outer Continental Shelf (OCS) that companies have leased for oil and gas development – totaling 26 million acres – are not producing or not subject to pending or approved exploration or development plans. ” [Dept Interior, May 2012 pdf] [TP]

One might quibble with how the Department of the Interior categorized lands undergoing seismic and geophysical testing as not “active,” but the fact remains — about 2/3rds of the current leases aren’t producing.  The quibblers do make a legitimate point, not all leases will yield production.  Yet the thrust of the latest  Republican incarnation of Drill Baby Drill, as evidenced by the title of the bill itself, it that somehow more leases will automatically mean lower prices at the pump. Once more, glance back to the OECD chart and notice that the consumption and the price lines don’t match.

In the immortal words of oil-man President George W. Bush: “I know it’s in Texas, probably in Tennessee that says, ‘Fool me once, shame on … shame on you. Fool me… You can’t get fooled again!‘” [Time]

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Filed under Economy, energy, energy policy, Politics