America’s hurting. Patient USA is suffering a serious economic trauma and has for a while. And, instead of healing, it seems to be getting worse. The symptoms are obvious on every newspaper front page; with each new low of the stock market; at the top of every nightly news program; on streets with as many “for sale” signs as mailboxes. The less obvious pain is seen on monthly 401k statements, empty food shelves, lonely retail merchants and wrap-around lines at unemployment centers.
Our country needs economic triage more then ever. As a result, no matter how worthy, all the ideas and programs to promote the carbon-free, clean-energy economy of the future may be, they should be put on hold. They are hopeful luxuries that we cannot afford right now and that are distracting the nation from the triage that needs to occur.
I am not a medical expert, but I have extensive medical TV show watching experience going back decades to M*A*S*H, and more recently SCRUBS, ER, Grey’s Anatomy and, of course, House. And, what I have learned is that, when confronted by a medical trauma doctors pursue a three-step process: First, they stabilize the patient, addressing the trauma like stopping the gushing blood, restarting the heart, controlling the seizure or clearing airway passage, etc. If it is a big event with multiple traumas the doctors perform “triage,” where they sort out the injuries according to the severity of their trauma.
The next step is to identify and treat the cause of the trauma. Sometime this is easy like removing the bullet, fixing the fractures, sew-up the lacerations, etc. In other times it is very hard, as the symptoms point to conflicting or multiple causes…liver damage, cancer, diabetes, allergic reaction, bug bite or some very rare disease. It is this search for the mysterious cause that makes House and even PBS’s Medical Mysteries so interesting.
Once trauma causation is established the doctors then prescribe recuperative therapy to make sure the trauma doesn’t reoccur, repair the patient’s physical health, and restore their psychological well-being. Of course, these elements blur depending on the trauma….how doctors treat a car accident trauma is different from someone afflicted with a cancer, but the 3-step “stabilize-treat-recovering therapy” is the common approach.
Unfortunately, the nation’s economic doctors are not implementing the medical three-step process in reverse. Yes, the problem is so big, growing and has so many moving parts. But that’s why doctors work through the three steps. Instead, our economic doctors are skipping the first two steps and rushing forward with bailouts, policy plans, stimulus packages, lopsided budgets that claim the cure is a carbon-free economy, low carbon fuels, California car standards. But the problem grows more severe.
In the mean time people are being thrown out of work and retirement accounts are getting pummeled. This seems like treating a gun shot patient arriving at the ER with a visionary lecture of how great their life will be if they start eating better, get more sleep, doing yoga and begin taking Omega-3 for their heart.
Don’t get me wrong…just about everyone should probably eat better and get more sleep, and I do enjoy my yoga….and I truly do think we must pursue green jobs, renewables and reduce our carbon footprint…but that time is not now. It is not what the patient, the state or the economy needs at this moment. It’s time for real economic triage; its time to help people put food on their tables; its time to restore confidence in the financial systems. Only once we have done that can we return to implementing the needed carbon-free, clean-energy restorative therapies.
Thursday, February 26, 2009
Tuesday, February 24, 2009
Follow Inside Energy on Twitter
Being a part of the conversation about energy issues that affect you has never been easier.
On your phone or in your e-mail “inbox,” you can receive Inside Energy updates through Twitter. If you are new to Twitter, it allows you to send and receive short text messages (up to 140 characters) to and from your friends or “followers.”
Check out www.twitter.com to become an Inside Energy follower. It’s easier than you think, and it will keep you in the know on Minnesota energy issues.
On your phone or in your e-mail “inbox,” you can receive Inside Energy updates through Twitter. If you are new to Twitter, it allows you to send and receive short text messages (up to 140 characters) to and from your friends or “followers.”
Check out www.twitter.com to become an Inside Energy follower. It’s easier than you think, and it will keep you in the know on Minnesota energy issues.
Thursday, February 19, 2009
Three Hopes & A Trillion-Dollar Wind Commitment
I am a hopeful person. So, let me share three of my current hopes with you. My first hope is that, despite my skepticism, I truly am hopeful that President Obama’s stimulus package and the other stuff he’s doing pulls the nation out of our economic tailspin. Something needs to be done; this might not be it, but then again it might be. There are lots of times when I thought something would turn out badly, and they don’t….and my daughters always seem to remind me of those times. So I hope that my daughters are more correct than I feel on this issue and that the actions the Obama Administration is taking will work.
My second hope is that I can do my part for the economy and go on a spring break vacation, especially to some place warm, with sand and swaying palm trees and fresh guacamole. Implementing such a maneuver is a kaleidoscope of moving parts of money, intricate family scheduling, spousal agreement on location, just-a-little-too-late advanced planning and, oh did I say “money.” Perhaps, the stimulus package will solve at least a couple of these issues. I certainly hope so.
My third hope is that stimulus bill’s relatively small down payment on renewable energy and improving the nation’s transmission system spurs the very large investment needed to tap the potential of the nation’s wind resources and deliver it throughout the country. Like planning my family vacation, achieving this hope will require a lot of time, money and effort.
On Monday, February 9, 2009, a group of major transmission owners and operators in the Eastern US made up of the Midwest ISO, Southwest Power Pool, Inc., PJM Interconnection, the Tennessee Valley Authority, Mid-Continent Area Power Pool (MAPP), and participants within SERC Reliability Corporation (SERC), who have been working on the “Joint Coordinated System Plan (JCSP’08),” announced their initial analysis of how much it will cost to provide significant amounts of wind to the eastern two-thirds of the country…from the Rocky Mountains to the Atlantic coast.
The planners looked at two wind scenarios and examined the transmission and generation implications of them for the years between 2008 and 2024. One scenario assumes an increase in wind energy so that 5% of the region’s electricity comes from wind. The second scenario envisioned 20% of the region’s electricity coming from wind as proposed by legislation in the US Congress mandating a national renewable standard.
The analysis estimates that meeting the 5% wind scenario will require the addition of approximately 10,000 miles of new extra-high voltage transmission at a cost of approximately $50 billion, in addition to nearly $700 billion in total wind generation capital costs by 2024.
The other scenario, that of 20% wind, is estimated to require 15,000 miles of new extra-high voltage lines, at an estimated cost of $80 billion, in addition to $1.1 trillion in total generation capital costs by 2024.
So, $750 billion gets us 5% wind and $1.2 trillion gets us 20% wind….or, for comparison purposes, this is almost as much as we’ve spent on the stimulus bill and bailing out Wall Street. That’s a lot of money, no matter how you cut it. However, just as I hope the stimulus bill provides the needed economic elixir and that in a month or so I am completing my collection of drink umbrellas and listening to the gentle lapping of the Caribbean sea, I hope we can push forward to strengthen the country’s transmission grid and make wind a significant part of the entire nation’s electricity portfolio, not just Minnesota’s.
My second hope is that I can do my part for the economy and go on a spring break vacation, especially to some place warm, with sand and swaying palm trees and fresh guacamole. Implementing such a maneuver is a kaleidoscope of moving parts of money, intricate family scheduling, spousal agreement on location, just-a-little-too-late advanced planning and, oh did I say “money.” Perhaps, the stimulus package will solve at least a couple of these issues. I certainly hope so.
My third hope is that stimulus bill’s relatively small down payment on renewable energy and improving the nation’s transmission system spurs the very large investment needed to tap the potential of the nation’s wind resources and deliver it throughout the country. Like planning my family vacation, achieving this hope will require a lot of time, money and effort.
On Monday, February 9, 2009, a group of major transmission owners and operators in the Eastern US made up of the Midwest ISO, Southwest Power Pool, Inc., PJM Interconnection, the Tennessee Valley Authority, Mid-Continent Area Power Pool (MAPP), and participants within SERC Reliability Corporation (SERC), who have been working on the “Joint Coordinated System Plan (JCSP’08),” announced their initial analysis of how much it will cost to provide significant amounts of wind to the eastern two-thirds of the country…from the Rocky Mountains to the Atlantic coast.
The planners looked at two wind scenarios and examined the transmission and generation implications of them for the years between 2008 and 2024. One scenario assumes an increase in wind energy so that 5% of the region’s electricity comes from wind. The second scenario envisioned 20% of the region’s electricity coming from wind as proposed by legislation in the US Congress mandating a national renewable standard.
The analysis estimates that meeting the 5% wind scenario will require the addition of approximately 10,000 miles of new extra-high voltage transmission at a cost of approximately $50 billion, in addition to nearly $700 billion in total wind generation capital costs by 2024.
The other scenario, that of 20% wind, is estimated to require 15,000 miles of new extra-high voltage lines, at an estimated cost of $80 billion, in addition to $1.1 trillion in total generation capital costs by 2024.
So, $750 billion gets us 5% wind and $1.2 trillion gets us 20% wind….or, for comparison purposes, this is almost as much as we’ve spent on the stimulus bill and bailing out Wall Street. That’s a lot of money, no matter how you cut it. However, just as I hope the stimulus bill provides the needed economic elixir and that in a month or so I am completing my collection of drink umbrellas and listening to the gentle lapping of the Caribbean sea, I hope we can push forward to strengthen the country’s transmission grid and make wind a significant part of the entire nation’s electricity portfolio, not just Minnesota’s.
Tuesday, February 17, 2009
My liberal, thoughtful, and intelligent son and daughter-in-law and my more moderate, scientific/fact oriented daughter and son-in law frequently remind me that it is important to give people a taste of what I am reading to arrive at the conclusions that I do.
For many reasons, their advice makes a lot of sense. In a world of such constant “Orwellian messaging” Gen Xer’s and Gen Y’s (Millennials) have developed into skeptical and independent thinkers not easily led to water.
That gives me hope since my own generation, none of whom could vote for John Kennedy or Richard Nixon in 1960, voted first for Lyndon Johnson and then for Richard Nixon and Jimmy Carter and then by a landslide for Ronald Reagan (he cut taxes, increased spending (raising the deficit and national debt) and raised taxes (TRA 1986- with the help of a Republican Senate and Democratic House,---- hardly a roster or record to inspire trust in politicians of either stripe.
So because my children were strong learners and now good teachers in their own right, here are some of the sources that I read over the past year that helped me formulate my huge skepticism over whether a Cap and Trade system to reduce green house gasses will work as opposed to make a lot of corporations, governments, and investment houses rich. Remember the genesis of the housing crisis---“we know what is best for you: all American’s should own a house!” Now all American’s should believe in Cap and Trade to reduce green house gases. Fool me once….
I hope that you notice that my readings are comprehensive and range from Mother Jones to Business Report to SF Chronicle and WSJ, from the Huffington Post to the U.S. Carbon Report and Cleantech. It must be that excellent liberal arts education I got when young that refuses to believe one source in search of truth.
Diversity of opinions is both stimulating and fun but we cannot afford what I call “diversity of facts.” Arriving at some understanding of the facts, requires effort and some intellectual rigor, characteristics often lacking in contemporary media-theatre.
In any case, here are some places for you to go to check out what I have been reading and to determine for yourself what you think about big government, big corporations, big investment banks--- Cap and Trade.
Nobody's Talking Cap-And-Trade Now, But Goldman Sachs Bets On It http://www.huffingtonpost.com/2008/10/27/nobodys-talking-cap-and-t_n_138083.html
Waxman Vows to Pass Carbon Cap as Republicans Promise ‘Battle’
http://www.bloomberg.com/apps/news?pid=20670001&refer=&sid=aeyvIQW_L6bQ
Cap and Trade makes Strange Bedfellows
http://uscarbonreport.com/cap-and-trade-makes-strange-bedfellows/
Carbon markets conference under way
http://www.bizjournals.com/southflorida/stories/2009/01/12/daily49.html
Industry, environmentalists gang up on climate
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/01/15/BUPV15BBN9.DTL
Cap and Trade
http://www.motherjones.com/kevin-drum/2008/12/cap-and-trade
Obama administration could fast track cap-and-trade, RPS in '09
http://cleantech.com/news/print/4081
3.2.1. Positions of the Parties: California Legislation
In this section, we summarize the input received from parties on the subject of the type of regulation appropriate for the electricity sector in California.
3.2.1.1. Cap-and-Trade System
http://docs.cpuc.ca.gov/PUBLISHED/FINAL_DECISION/80150-02.htm
Comments of Morgan Stanley Capital Group, Inc.
Western Climate Initiative Work Plan and Design November 30, 2007
www.westernclimateinitiative.org/ewebeditpro/items/O104F14469.pdf
HOW’S THE CARBON OFFSET BUSINESS? GOLDMAN SACHS BUYS IN
www.energystocksblog.com/2008/10/29/how’s-the-carbon-offset-business-goldman-sachs-
Another Inconvenient Truth
www.businessweek.com/magazine/content/07_13/b4027057.htm
F.T.C. Asks if Carbon-Offset Money Is Well Spent---“Greenwashing”
http://www.nytimes.com/2008/01/09/business/09offsets.html
Carbon Offsets: Government Warns of Fraud Risk: NPR
www.npr.org/templates/story/story.php?storyId=17814838
For many reasons, their advice makes a lot of sense. In a world of such constant “Orwellian messaging” Gen Xer’s and Gen Y’s (Millennials) have developed into skeptical and independent thinkers not easily led to water.
That gives me hope since my own generation, none of whom could vote for John Kennedy or Richard Nixon in 1960, voted first for Lyndon Johnson and then for Richard Nixon and Jimmy Carter and then by a landslide for Ronald Reagan (he cut taxes, increased spending (raising the deficit and national debt) and raised taxes (TRA 1986- with the help of a Republican Senate and Democratic House,---- hardly a roster or record to inspire trust in politicians of either stripe.
So because my children were strong learners and now good teachers in their own right, here are some of the sources that I read over the past year that helped me formulate my huge skepticism over whether a Cap and Trade system to reduce green house gasses will work as opposed to make a lot of corporations, governments, and investment houses rich. Remember the genesis of the housing crisis---“we know what is best for you: all American’s should own a house!” Now all American’s should believe in Cap and Trade to reduce green house gases. Fool me once….
I hope that you notice that my readings are comprehensive and range from Mother Jones to Business Report to SF Chronicle and WSJ, from the Huffington Post to the U.S. Carbon Report and Cleantech. It must be that excellent liberal arts education I got when young that refuses to believe one source in search of truth.
Diversity of opinions is both stimulating and fun but we cannot afford what I call “diversity of facts.” Arriving at some understanding of the facts, requires effort and some intellectual rigor, characteristics often lacking in contemporary media-theatre.
In any case, here are some places for you to go to check out what I have been reading and to determine for yourself what you think about big government, big corporations, big investment banks--- Cap and Trade.
Nobody's Talking Cap-And-Trade Now, But Goldman Sachs Bets On It http://www.huffingtonpost.com/2008/10/27/nobodys-talking-cap-and-t_n_138083.html
Waxman Vows to Pass Carbon Cap as Republicans Promise ‘Battle’
http://www.bloomberg.com/apps/news?pid=20670001&refer=&sid=aeyvIQW_L6bQ
Cap and Trade makes Strange Bedfellows
http://uscarbonreport.com/cap-and-trade-makes-strange-bedfellows/
Carbon markets conference under way
http://www.bizjournals.com/southflorida/stories/2009/01/12/daily49.html
Industry, environmentalists gang up on climate
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/01/15/BUPV15BBN9.DTL
Cap and Trade
http://www.motherjones.com/kevin-drum/2008/12/cap-and-trade
Obama administration could fast track cap-and-trade, RPS in '09
http://cleantech.com/news/print/4081
3.2.1. Positions of the Parties: California Legislation
In this section, we summarize the input received from parties on the subject of the type of regulation appropriate for the electricity sector in California.
3.2.1.1. Cap-and-Trade System
http://docs.cpuc.ca.gov/PUBLISHED/FINAL_DECISION/80150-02.htm
Comments of Morgan Stanley Capital Group, Inc.
Western Climate Initiative Work Plan and Design November 30, 2007
www.westernclimateinitiative.org/ewebeditpro/items/O104F14469.pdf
HOW’S THE CARBON OFFSET BUSINESS? GOLDMAN SACHS BUYS IN
www.energystocksblog.com/2008/10/29/how’s-the-carbon-offset-business-goldman-sachs-
Another Inconvenient Truth
www.businessweek.com/magazine/content/07_13/b4027057.htm
F.T.C. Asks if Carbon-Offset Money Is Well Spent---“Greenwashing”
http://www.nytimes.com/2008/01/09/business/09offsets.html
Carbon Offsets: Government Warns of Fraud Risk: NPR
www.npr.org/templates/story/story.php?storyId=17814838
Friday, February 13, 2009
Part II: Government Solutions Cap and Trade—a “Subprime” idea whose time should never come….
Results of the 40 year War on Drugs is just one prominent candle illuminating the plethora of failed big government programs presaging the future results of a mandated Cap &Trade program that looks increasingly likely to be considered by the U.S. Congress this year unless the American people just say “No.”
The United States has some of the world's most punitive drug policies and has led the cheering section for tough "war on drugs" policies worldwide. But a new international study suggests that those policies have been a crashing failure. A World Health Organization survey of 17 countries, conducted by some of the world's leading substance abuse researchers, found that we have the highest rates of marijuana and cocaine use.
Of course, this is just one graphic, more commonly understood government program that is a massive failure at accomplishing its stated goals. For the sake of perspective, the program began in the early 1970’s under President Nixon and has been a government priority ever since, approximately 38 years! Of course, advocates of the program dismiss such empirical data with the same old refrain, “we never had enough money to do the job right.” How many times have we heard this same worn out refrain from the advocates of government programs? Accountability and transparency is not the forte of government. At least when the private market fails, someone pays the piper, the business fails, something happens. When government fails it is always about not having enough money to do the job right!
http://online.wsj.com/article/SB123439889394275215.html%20
http://www.alternet.org/drugreporter/90295/
Maybe we should question the International Energy Agency, an intergovernmental agency acting as an energy policy advisor to 28 member countries. According to their website, http://www.iea.org/, IEA was “founded during the oil crisis of 1973-74” “to co-ordinate measures in time of oil supply emergencies.” How do you think they managed the oil crisis of just 6-12 months ago? Were the member countries informed in time so that there citizenry could adapt or did the gigantic rise in oil prices that shocked us all? The answer requires a little common sense which most Americans have in good supply.
Demand for oil world-wide outstripped supply during good economic times driving prices higher. We all know what happened next. Recession, less demand, lower prices. As of this writing gas prices are rising because we are driving more (due to lower prices) and we are approaching the spring/summer driving season and demand is increasing so price rises gradually in preparation for that demand. No surprises here, just Common American Sense.
Looking back in 40 years (February, 2049), what makes any rational American believe that a Cap and Trade Government program will reduce green house gas emissions with any greater success than the War on Drugs? And think about the cost…it will stagger the imagination even when compared to today’s outrageous bank, insurance company bailouts , stimulus plans, etc.
Given the borrowing binge started by George W. Bush and Congress (remember, he cut taxes, fought two wars, and increased entitlement spending by the more than any President since Lyndon Johnson---with his Prescription Drug Program for Seniors! By charging it to the National Credit Card ---our children and grandchildren pay higher taxes or get less services.) There are no free lunches, despite the best workings of the political propaganda machines on both sides of the isle in Washington.
And it looks like the mountain of debt is about to increase more under the Democrats who vociferously criticized the stark accumulation of the Bush/Republican mountain of debt.
To conclude, I would urge readers to carefully consider whether we really want to add another government bureaucracy, “The Federal Cap and Trade Agency” to our government that will eventually need a “bailout” when the carbon market collapses for reasons one can only imagine.
I can only surmise that a few big investment banks will be in the middle of it when it happens.
Remember, that despite the failings of “market economies,” at their worst, they are better than taxpayer funded government monopolies lacking accountability until it is too late to do anything but play the blame game and get taxpayer funded bailout.. Let’s not fall for it twice.
Results of the 40 year War on Drugs is just one prominent candle illuminating the plethora of failed big government programs presaging the future results of a mandated Cap &Trade program that looks increasingly likely to be considered by the U.S. Congress this year unless the American people just say “No.”
The United States has some of the world's most punitive drug policies and has led the cheering section for tough "war on drugs" policies worldwide. But a new international study suggests that those policies have been a crashing failure. A World Health Organization survey of 17 countries, conducted by some of the world's leading substance abuse researchers, found that we have the highest rates of marijuana and cocaine use.
Of course, this is just one graphic, more commonly understood government program that is a massive failure at accomplishing its stated goals. For the sake of perspective, the program began in the early 1970’s under President Nixon and has been a government priority ever since, approximately 38 years! Of course, advocates of the program dismiss such empirical data with the same old refrain, “we never had enough money to do the job right.” How many times have we heard this same worn out refrain from the advocates of government programs? Accountability and transparency is not the forte of government. At least when the private market fails, someone pays the piper, the business fails, something happens. When government fails it is always about not having enough money to do the job right!
http://online.wsj.com/article/SB123439889394275215.html%20
http://www.alternet.org/drugreporter/90295/
Maybe we should question the International Energy Agency, an intergovernmental agency acting as an energy policy advisor to 28 member countries. According to their website, http://www.iea.org/, IEA was “founded during the oil crisis of 1973-74” “to co-ordinate measures in time of oil supply emergencies.” How do you think they managed the oil crisis of just 6-12 months ago? Were the member countries informed in time so that there citizenry could adapt or did the gigantic rise in oil prices that shocked us all? The answer requires a little common sense which most Americans have in good supply.
Demand for oil world-wide outstripped supply during good economic times driving prices higher. We all know what happened next. Recession, less demand, lower prices. As of this writing gas prices are rising because we are driving more (due to lower prices) and we are approaching the spring/summer driving season and demand is increasing so price rises gradually in preparation for that demand. No surprises here, just Common American Sense.
Looking back in 40 years (February, 2049), what makes any rational American believe that a Cap and Trade Government program will reduce green house gas emissions with any greater success than the War on Drugs? And think about the cost…it will stagger the imagination even when compared to today’s outrageous bank, insurance company bailouts , stimulus plans, etc.
Given the borrowing binge started by George W. Bush and Congress (remember, he cut taxes, fought two wars, and increased entitlement spending by the more than any President since Lyndon Johnson---with his Prescription Drug Program for Seniors! By charging it to the National Credit Card ---our children and grandchildren pay higher taxes or get less services.) There are no free lunches, despite the best workings of the political propaganda machines on both sides of the isle in Washington.
And it looks like the mountain of debt is about to increase more under the Democrats who vociferously criticized the stark accumulation of the Bush/Republican mountain of debt.
To conclude, I would urge readers to carefully consider whether we really want to add another government bureaucracy, “The Federal Cap and Trade Agency” to our government that will eventually need a “bailout” when the carbon market collapses for reasons one can only imagine.
I can only surmise that a few big investment banks will be in the middle of it when it happens.
Remember, that despite the failings of “market economies,” at their worst, they are better than taxpayer funded government monopolies lacking accountability until it is too late to do anything but play the blame game and get taxpayer funded bailout.. Let’s not fall for it twice.
Thursday, February 12, 2009
Pet Peeves and Unusual Congressional Forbearance
In her February 11, 2009, Conference Report describing the economic stimulus bill, Speaker Nancy Pelosi, states “To put people back to work today and reduce our dependence on foreign oil tomorrow, we will increase renewable energy production and renovate public buildings to make them more energy efficient.” (Emphasis added).
(http://www.dailykos.com/story/2009/2/12/91357/2982/121/696534).
Reading this triggered a couple energy pet peeves of mine. Pet peeve number one is when people say we need to “reduce our dependence on foreign oil” and then use electricity examples as ways of reducing this dependence. Pet peeve number two is when people say we need to “reduce our dependence on foreign oil” and ignore that Canada is a very friendly foreign nation that we share a very long border with and is our nation’s biggest foreign oil supplier. And, in fact, supplies well over 50% of Minnesota’s oil.
These are pet peeves for me for several reasons. First, reducing our oil dependence, no matter where it comes from has merit. So, why blast foreign oil? The obvious answer is that many oil-producing countries around the world are not our friends and buying their product is not in our best interests. Yet, as I just mentioned our largest foreign supplier of oil comes from our friendly neighbor. Thus, what one should say is that “we should reduce our dependence on oil, especially oil from unfriendly countries” or something like that.
Second, oil is a transportation fuel that we use in our cars, planes and trucks. Electricity has yet to become a significant transportation fuel; instead it is used to power our TVs, light our lamps and provide the juice for air conditioning. Thus, while it could be theoretically appropriate to suggest that we can reduce our dependence on foreign oil by using electricity as a transportation fuel, this is not what Speaker Pelosi meant. Or, if it is, then the package she claims will not only jump-start the morbid economy but also will “reduce our dependence on foreign oil” is misguided.
The economic stimulus bill that the Congress passed yesterday allocates about $61 billion to energy-related activities, $29 billion for roads and bridges and $16 billion for transit and high-speed rail. According to Speaker Pelosi’s summary, the $61 billion for energy related activities would be used to:
• Transform the nation’s electricity systems through the Smart Grid Investment Program to modernize the electricity grid to make it more efficient and reliable;
• Support U.S. development of advanced vehicle batteries and battery systems through loans and grants so that America can lead the world in transforming the way automobiles are powered;
• Help state and local governments make investments in innovative best practices to achieve greater energy efficiency and reduce energy usage;
• Spur energy efficiency and renewable energy R&D;
• Provide tax incentives for renewable energy and energy efficiency over the next 10 years;
• Provide grants of up to 30 percent of the cost of building a new renewable energy facility to address current renewable energy credit market concerns;
• Promote energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation;
• Provide a tax credit for families that purchase plug-in hybrid vehicles of up to $7,500 to spur the next generation of American cars;
• Provide money to improve the energy efficiency of more than 1 million modest-income homes through weatherization;
• Provide money for increasing energy efficiency in federally-supported housing programs;
• And lots of other stuff
Except for battery R&D and tax credits for plug-in hybrid cars, all this money goes towards renewable electricity and energy efficiency. As such, Speaker Pelosi is wrong; it will not reduce our dependence on oil especially from hostile countries.
Perhaps I should cut Speaker Pelosi some slack. Perhaps, I should chalk her description up to standard political rhetoric of destroyed metaphors, sloganeering and sloppy editing.
OK, I’ll do that….but a nagging question remains: in a bill this loaded with programmatic goodies (that should have been vetted by the usual appropriations process, but that’s another pet peeve), why isn’t there more money specifically devoted to reducing our dependence on oil?
Of course, I don’t know but I will postulate three theories. One theory is that the Congress correctly concluded that the biofuels issue has been handled through the Renewable Fuels Standard of the Energy Independence and Security Act of 2007. Another theory is that Federal lawmakers feel that they have done all they can to help the transportation sector with the money they gave General Motors and Chrysler a couple months ago. A third theory is that the DC policy makers realize that dealing with the transportation sector (cars, fuels, etc.) is hugely complex and requires a comprehensive and not the piecemeal approach of the stimulus package.
Whatever the reason for this unusual but wise case of Congressional forbearance; its an example of forbearance Minnesota could learn from.
(http://www.dailykos.com/story/2009/2/12/91357/2982/121/696534).
Reading this triggered a couple energy pet peeves of mine. Pet peeve number one is when people say we need to “reduce our dependence on foreign oil” and then use electricity examples as ways of reducing this dependence. Pet peeve number two is when people say we need to “reduce our dependence on foreign oil” and ignore that Canada is a very friendly foreign nation that we share a very long border with and is our nation’s biggest foreign oil supplier. And, in fact, supplies well over 50% of Minnesota’s oil.
These are pet peeves for me for several reasons. First, reducing our oil dependence, no matter where it comes from has merit. So, why blast foreign oil? The obvious answer is that many oil-producing countries around the world are not our friends and buying their product is not in our best interests. Yet, as I just mentioned our largest foreign supplier of oil comes from our friendly neighbor. Thus, what one should say is that “we should reduce our dependence on oil, especially oil from unfriendly countries” or something like that.
Second, oil is a transportation fuel that we use in our cars, planes and trucks. Electricity has yet to become a significant transportation fuel; instead it is used to power our TVs, light our lamps and provide the juice for air conditioning. Thus, while it could be theoretically appropriate to suggest that we can reduce our dependence on foreign oil by using electricity as a transportation fuel, this is not what Speaker Pelosi meant. Or, if it is, then the package she claims will not only jump-start the morbid economy but also will “reduce our dependence on foreign oil” is misguided.
The economic stimulus bill that the Congress passed yesterday allocates about $61 billion to energy-related activities, $29 billion for roads and bridges and $16 billion for transit and high-speed rail. According to Speaker Pelosi’s summary, the $61 billion for energy related activities would be used to:
• Transform the nation’s electricity systems through the Smart Grid Investment Program to modernize the electricity grid to make it more efficient and reliable;
• Support U.S. development of advanced vehicle batteries and battery systems through loans and grants so that America can lead the world in transforming the way automobiles are powered;
• Help state and local governments make investments in innovative best practices to achieve greater energy efficiency and reduce energy usage;
• Spur energy efficiency and renewable energy R&D;
• Provide tax incentives for renewable energy and energy efficiency over the next 10 years;
• Provide grants of up to 30 percent of the cost of building a new renewable energy facility to address current renewable energy credit market concerns;
• Promote energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation;
• Provide a tax credit for families that purchase plug-in hybrid vehicles of up to $7,500 to spur the next generation of American cars;
• Provide money to improve the energy efficiency of more than 1 million modest-income homes through weatherization;
• Provide money for increasing energy efficiency in federally-supported housing programs;
• And lots of other stuff
Except for battery R&D and tax credits for plug-in hybrid cars, all this money goes towards renewable electricity and energy efficiency. As such, Speaker Pelosi is wrong; it will not reduce our dependence on oil especially from hostile countries.
Perhaps I should cut Speaker Pelosi some slack. Perhaps, I should chalk her description up to standard political rhetoric of destroyed metaphors, sloganeering and sloppy editing.
OK, I’ll do that….but a nagging question remains: in a bill this loaded with programmatic goodies (that should have been vetted by the usual appropriations process, but that’s another pet peeve), why isn’t there more money specifically devoted to reducing our dependence on oil?
Of course, I don’t know but I will postulate three theories. One theory is that the Congress correctly concluded that the biofuels issue has been handled through the Renewable Fuels Standard of the Energy Independence and Security Act of 2007. Another theory is that Federal lawmakers feel that they have done all they can to help the transportation sector with the money they gave General Motors and Chrysler a couple months ago. A third theory is that the DC policy makers realize that dealing with the transportation sector (cars, fuels, etc.) is hugely complex and requires a comprehensive and not the piecemeal approach of the stimulus package.
Whatever the reason for this unusual but wise case of Congressional forbearance; its an example of forbearance Minnesota could learn from.
Wednesday, February 11, 2009
California Dreamin’
At the end of last year, California approved a plan to implement regulations to limit greenhouse gas emissions in the state. As part of this process, they conducted an economic analysis which concluded that the regulatory plan would significantly reduce greenhouse gas emissions and have a net positive impact on the state’s economy. However, there was a problem. Five independent economists selected by the state to critique the economic analysis disagreed with its conclusions (see Wall Street Journal article below).
Pretending that it will not cost anything to make the enormous changes to our energy system, and way of life, that will be required to significantly reduce greenhouse gas emissions is shortsighted. We need to have a frank discussion about the costs in order to craft effective policies.
But even more concerning is the fact that the costs of California-esque regulations extend far beyond our pocketbooks. Ironically, there will be some real environmental costs to these types of regulations. While it may be convenient to divide the world up into "green" and "brown" jobs, and pass regulations to promote the former, what the regulators fail to realize is that a "brown" job in America gets a heck of a lot browner when it moves overseas.
If we are going to have a frank discussion about energy and the environment then we need to acknowledge this fact: every manufacturing job in America is a green job when compared to that same manufacturing job in China. There isn’t a “green” economy or a “brown” economy. There is only one global economy.
Since 1998, this country has lost over 5 million manufacturing jobs. California accounts for 440,000 of those lost manufacturing jobs, while Minnesota accounts for over 71,000. If this country’s economy is going to recover, we have to start making things again – real things – that have real value. If we are going to take a leadership role on the environment, we are going to have to acknowledge the fact that it makes a lot more sense to promote clean industry in the United States than fuel the growth of dirty industry overseas. Restoring economic growth will need to include manufacturing new clean energy technology, but for the foreseeable future it will also include the manufacture of existing energy technology. We do not need to create false choices. We cannot afford to.
Dividing our country up into red and blue states did not do much to promote the bipartisanship that is required to address our nation’s most serious challenges. Dividing the job market into “green” and “brown” jobs is not going to aid our economic recovery either.
For more: “California's 'Green Jobs' Experiment Isn't Going Well”
http://online.wsj.com/article/SB123336500319935517.html?mod=googlenews_wsj
Pretending that it will not cost anything to make the enormous changes to our energy system, and way of life, that will be required to significantly reduce greenhouse gas emissions is shortsighted. We need to have a frank discussion about the costs in order to craft effective policies.
But even more concerning is the fact that the costs of California-esque regulations extend far beyond our pocketbooks. Ironically, there will be some real environmental costs to these types of regulations. While it may be convenient to divide the world up into "green" and "brown" jobs, and pass regulations to promote the former, what the regulators fail to realize is that a "brown" job in America gets a heck of a lot browner when it moves overseas.
If we are going to have a frank discussion about energy and the environment then we need to acknowledge this fact: every manufacturing job in America is a green job when compared to that same manufacturing job in China. There isn’t a “green” economy or a “brown” economy. There is only one global economy.
Since 1998, this country has lost over 5 million manufacturing jobs. California accounts for 440,000 of those lost manufacturing jobs, while Minnesota accounts for over 71,000. If this country’s economy is going to recover, we have to start making things again – real things – that have real value. If we are going to take a leadership role on the environment, we are going to have to acknowledge the fact that it makes a lot more sense to promote clean industry in the United States than fuel the growth of dirty industry overseas. Restoring economic growth will need to include manufacturing new clean energy technology, but for the foreseeable future it will also include the manufacture of existing energy technology. We do not need to create false choices. We cannot afford to.
Dividing our country up into red and blue states did not do much to promote the bipartisanship that is required to address our nation’s most serious challenges. Dividing the job market into “green” and “brown” jobs is not going to aid our economic recovery either.
For more: “California's 'Green Jobs' Experiment Isn't Going Well”
http://online.wsj.com/article/SB123336500319935517.html?mod=googlenews_wsj
Tuesday, February 10, 2009
Don’t put the cart ahead of the horse
Businesses, and in fact all Minnesotans, are struggling enough in today’s economy without imposing further regulations that will put us at a competitive disadvantage with our counterparts across the nation and world. It makes little sense to pass new regulations until the financial impact is known. That’s just one of the reasons why we oppose enactment of the proposed low carbon fuel standard.
The standard set forth in HF 86/SF 13 could adversely affect our state’s economy by potentially increasing fuel prices for all Minnesotans and destabilizing our fuel supply. As a result, the bill would likely fail to achieve its goal of lowering greenhouse gas emissions.
The proposed standard could restrict the use of Canadian crude oil in favor of lower carbon sources, potentially wasting billions of dollars of investment in infrastructure to bring crude oil from Canada to the Midwest.
The Minnesota economy – read: jobs – should be the priority as lawmakers engage in this debate. Most businesses rely on the transportation system to ship and receive products. This bill could potentially increase those costs at a time when our economy is so fragile.
What will be the impact of a low carbon fuel standard on the state’s economy? What are the environmental and land-use impacts? Will jobs be lost or created? A University of Minnesota study is under way to try and answer these exact questions. Let’s find out the answers to these common-sense questions before venturing into unknown policy.
The standard set forth in HF 86/SF 13 could adversely affect our state’s economy by potentially increasing fuel prices for all Minnesotans and destabilizing our fuel supply. As a result, the bill would likely fail to achieve its goal of lowering greenhouse gas emissions.
The proposed standard could restrict the use of Canadian crude oil in favor of lower carbon sources, potentially wasting billions of dollars of investment in infrastructure to bring crude oil from Canada to the Midwest.
The Minnesota economy – read: jobs – should be the priority as lawmakers engage in this debate. Most businesses rely on the transportation system to ship and receive products. This bill could potentially increase those costs at a time when our economy is so fragile.
What will be the impact of a low carbon fuel standard on the state’s economy? What are the environmental and land-use impacts? Will jobs be lost or created? A University of Minnesota study is under way to try and answer these exact questions. Let’s find out the answers to these common-sense questions before venturing into unknown policy.
Friday, February 6, 2009
Government Solutions to Big Problems Usually Don't Work Part 1 of 2
While there are so many examples of why we need to proceed with caution on government solutions to Climate Change, today’s (February 6th, 2009) STAR TRIBUNE front page story “Treasury Overpaid $78B in bailout”, serves up a cogent, timely reminder to us all. According to the article, the new Inspector General of TARP, Neil Barofsky, Elizabeth Warren, Chairwoman of the Congressional Oversight Panel, and Gene Dodaro, Acting Comptroller General all have significant accountability concerns about TARP funds (this is an understatement!).
(http://www.startribune.com/nation/39179507.html?elr=KArksLckD8EQDUoaEyqyP4O:DW3ckUiD3aPc:_Yyc:aUUsZ)
Not surprisingly, the article reminds us of what we have always known about the longstanding government overpayments to military contractors for hammers, munitions, toilet seats, to all the Medicare and Medicaid fraud cases since their inception in the 1960s, and the list goes on and on. It is no surprise to any citizen that the first segment of the TARP Program initiated by President Bush, and his Treasury Secretary Henry Paulson (whose next job will likely be selling carbon credits under a Cap and Trade Program for Goldman Sachs or Morgan Stanley, the very companies he “bailed out”), would fail. It was rushed through by them and the bi-partisan Congress with no accountability mechanisms. Something simple like: “This money that you receive from the taxpayers of the U.S. cannot be used for CEO or other compensation, bonuses, benefits or trips! You must make it available at low rates to the same citizens who have saved you from your own greed and ineptness!” But who are we to tell the experts anything, just trust them because they know what is best for us. Lastly, what was Mr. Bernanke thinking (or not) when he signed off on this first down-payment bank give-away?
For all the good that government can sometimes do, it is no match for the cleverness, intelligence, entrepreneurial energies, and sometime failings of the private market place. Private market place failings eventually become obvious (Madoff, Banks, Investment Bank greed and deceit, greedy homebuyers and equity investors, carmakers making gas guzzling higher profit SUVs rather than balancing these with higher mileage vehicles for greater customer choice). While not perfect by any means, at least people are punished or, at least held accountable in some way (businesses going broke, losing their homes if they use them as cash machines to live beyond their means, losing their investments if they invested in what was too good to be true, etc.)
Unfortunately, politicians must help voters (that is how they stay politicians), by spending trillions of the voters and future voter's money bailing out enterprises that should be left to fail. After all, how else will people learn not to be greedy, harsh, and unfair unless they are punished, held accountable for their aberrant behavior? How many of us rewarded our children for bad behavior and were shocked when it continued?
Of course, the major difference is that we all take on the risk of the private market place in order to reap its significant rewards. [For those of you depressed about your home’s value or your retirement accounts, remember that the business cycle is meant to cleanse human excesses and will, when it has completed its task, rise again.] There are few things of which I am absolutely sure but this is one of them: what goes up too fast, comes down hard, and after a time, rises again only to reverse itself once again, when driven to excess.
Next week’s posting will focus on tying the common sense mindset laid out here to why we must proceed cautiously and judiciously with any grand schemes, like Cap and Trade to lower green house gas emissions.
Your respectful reactions and comments are always welcome.
(http://www.startribune.com/nation/39179507.html?elr=KArksLckD8EQDUoaEyqyP4O:DW3ckUiD3aPc:_Yyc:aUUsZ)
Not surprisingly, the article reminds us of what we have always known about the longstanding government overpayments to military contractors for hammers, munitions, toilet seats, to all the Medicare and Medicaid fraud cases since their inception in the 1960s, and the list goes on and on. It is no surprise to any citizen that the first segment of the TARP Program initiated by President Bush, and his Treasury Secretary Henry Paulson (whose next job will likely be selling carbon credits under a Cap and Trade Program for Goldman Sachs or Morgan Stanley, the very companies he “bailed out”), would fail. It was rushed through by them and the bi-partisan Congress with no accountability mechanisms. Something simple like: “This money that you receive from the taxpayers of the U.S. cannot be used for CEO or other compensation, bonuses, benefits or trips! You must make it available at low rates to the same citizens who have saved you from your own greed and ineptness!” But who are we to tell the experts anything, just trust them because they know what is best for us. Lastly, what was Mr. Bernanke thinking (or not) when he signed off on this first down-payment bank give-away?
For all the good that government can sometimes do, it is no match for the cleverness, intelligence, entrepreneurial energies, and sometime failings of the private market place. Private market place failings eventually become obvious (Madoff, Banks, Investment Bank greed and deceit, greedy homebuyers and equity investors, carmakers making gas guzzling higher profit SUVs rather than balancing these with higher mileage vehicles for greater customer choice). While not perfect by any means, at least people are punished or, at least held accountable in some way (businesses going broke, losing their homes if they use them as cash machines to live beyond their means, losing their investments if they invested in what was too good to be true, etc.)
Unfortunately, politicians must help voters (that is how they stay politicians), by spending trillions of the voters and future voter's money bailing out enterprises that should be left to fail. After all, how else will people learn not to be greedy, harsh, and unfair unless they are punished, held accountable for their aberrant behavior? How many of us rewarded our children for bad behavior and were shocked when it continued?
Of course, the major difference is that we all take on the risk of the private market place in order to reap its significant rewards. [For those of you depressed about your home’s value or your retirement accounts, remember that the business cycle is meant to cleanse human excesses and will, when it has completed its task, rise again.] There are few things of which I am absolutely sure but this is one of them: what goes up too fast, comes down hard, and after a time, rises again only to reverse itself once again, when driven to excess.
Next week’s posting will focus on tying the common sense mindset laid out here to why we must proceed cautiously and judiciously with any grand schemes, like Cap and Trade to lower green house gas emissions.
Your respectful reactions and comments are always welcome.
Thursday, February 5, 2009
Minnesota is Making Progress on Climate
I read January’s report, Progress in Addressing Climate Change, (See: http://www.state.mn.us/mn/externalDocs/Commerce/Greenhouse_Gas_Emissions_Reduction_Report_012009032551_GreenhouseGasEmissions.pdf)
the biennial greenhouse gas emissions reduction report to the Minnesota Legislature prepared by the Department of Commerce and Pollution Control Agency. It’s an impressive report, telling a very positive and informative story.
It is good that the Senate will be holding a hearing on the report next week since the report documents what the state’s progress reducing greenhouse gas emissions, the status of the state’s GHGs today, and lays a path for achieving the state’s reduction goals.
In 2005, the baseline year, Minnesota emitted 154 million tons of GHGs. The statutory goal is to reduce GHG emissions by 15% below 2005 by 2015 or down to 130.9 GHG emissions. This means a reduction of 23.1 million GHGs from the 2005 level is needed.
First, and most importantly, the report says that “between 2005 and 2006, greenhouse gas emissions from Minnesota sources declined by about 2 million CO2-equivalent short tons,” (page 4). Said another way: in 2006 Minnesota emitted 152.2 million GHGs or 2 million GHGs less than in 2005.
The second thing the report says is that, “Minnesota is roughly on track to meet the 2015 GHG reduction goal” (page 7) established in the 2007 law largely because of the actions the state has already taken. The actions include:
• The enhanced energy efficiency program which will effectively double the amount of energy savings achieved from 2006 levels yielding about 6 million tons of GHG savings by 2015 according to Minnesota Climate Change Advisory Group (MCCAG; see http://www.mnclimatechange.us/MCCAG.cfm);
• The dramatic increase in electricity from renewables from the state’s renewable energy standard will result in about 7.72 million GHG savings by 2015 according to the MCCAG;
• Xcel’s $1Billion Metropolitan Emissions Reduction Projects that converts a couple old coal plants to natural gas will reduce GHG emissions 4.52 million tons per year in 2015; and
• Increases in ethanol and biodiesel usage resulting from our E10 to E20 and B2 to B5 and beyond requirements, which will result in savings of 1.4 million tons of GHGs by 2015.
The aggregate GHG reductions from these four actions will be about 19.65 million tons by 2015. So, to meet the statutory goal of 15% below 2005 levels by 2015 or reduce our annual emissions by 23.1 million tons, we need to make sure we implement the actions already underway and add actions that will achieve 3.45 million tons of reductions….and this does not give us credit for the 2 million tons of reduction achieved so far.
On pages 24-5 of the OES/PCA report there are some very good suggestions for the how to do this. For example they recommend repealing Minnesota’s nuclear moratorium and adopting more energy efficient appliance standards, which the MCCAG says would save 0.8 million tons of GHGs by 2015. But as one digs deeper into the report, the big GHG savings come from two activities recommended by the MCCAG that Minnesota is already working on:
• Improving recycling programs which could result in almost 3 million tons of annual GHG savings in 2015, and
• Better managing of the state’s forests through improved forestation, restocking and reducing the amount of forest lands that are lost to other uses. This could save almost 6 million tons of GHGs by 2015.
These two activities far exceed all the other ideas offered by the MCCAG…yet they are not getting the attention they deserve.
Thus, to summarize: Minnesota’s GHG emissions are already going down; the efforts to meet and exceed the 15% by 2015 reduction goals are already underway through the enhanced energy efficiency program, the renewable energy standard, converting coal to natural gas and increasing the use of biofuels and that the next best opportunities to reduce GHG emissions are by improving recycling and forestry. These are the places that the Legislature needs to focus on.
the biennial greenhouse gas emissions reduction report to the Minnesota Legislature prepared by the Department of Commerce and Pollution Control Agency. It’s an impressive report, telling a very positive and informative story.
It is good that the Senate will be holding a hearing on the report next week since the report documents what the state’s progress reducing greenhouse gas emissions, the status of the state’s GHGs today, and lays a path for achieving the state’s reduction goals.
In 2005, the baseline year, Minnesota emitted 154 million tons of GHGs. The statutory goal is to reduce GHG emissions by 15% below 2005 by 2015 or down to 130.9 GHG emissions. This means a reduction of 23.1 million GHGs from the 2005 level is needed.
First, and most importantly, the report says that “between 2005 and 2006, greenhouse gas emissions from Minnesota sources declined by about 2 million CO2-equivalent short tons,” (page 4). Said another way: in 2006 Minnesota emitted 152.2 million GHGs or 2 million GHGs less than in 2005.
The second thing the report says is that, “Minnesota is roughly on track to meet the 2015 GHG reduction goal” (page 7) established in the 2007 law largely because of the actions the state has already taken. The actions include:
• The enhanced energy efficiency program which will effectively double the amount of energy savings achieved from 2006 levels yielding about 6 million tons of GHG savings by 2015 according to Minnesota Climate Change Advisory Group (MCCAG; see http://www.mnclimatechange.us/MCCAG.cfm);
• The dramatic increase in electricity from renewables from the state’s renewable energy standard will result in about 7.72 million GHG savings by 2015 according to the MCCAG;
• Xcel’s $1Billion Metropolitan Emissions Reduction Projects that converts a couple old coal plants to natural gas will reduce GHG emissions 4.52 million tons per year in 2015; and
• Increases in ethanol and biodiesel usage resulting from our E10 to E20 and B2 to B5 and beyond requirements, which will result in savings of 1.4 million tons of GHGs by 2015.
The aggregate GHG reductions from these four actions will be about 19.65 million tons by 2015. So, to meet the statutory goal of 15% below 2005 levels by 2015 or reduce our annual emissions by 23.1 million tons, we need to make sure we implement the actions already underway and add actions that will achieve 3.45 million tons of reductions….and this does not give us credit for the 2 million tons of reduction achieved so far.
On pages 24-5 of the OES/PCA report there are some very good suggestions for the how to do this. For example they recommend repealing Minnesota’s nuclear moratorium and adopting more energy efficient appliance standards, which the MCCAG says would save 0.8 million tons of GHGs by 2015. But as one digs deeper into the report, the big GHG savings come from two activities recommended by the MCCAG that Minnesota is already working on:
• Improving recycling programs which could result in almost 3 million tons of annual GHG savings in 2015, and
• Better managing of the state’s forests through improved forestation, restocking and reducing the amount of forest lands that are lost to other uses. This could save almost 6 million tons of GHGs by 2015.
These two activities far exceed all the other ideas offered by the MCCAG…yet they are not getting the attention they deserve.
Thus, to summarize: Minnesota’s GHG emissions are already going down; the efforts to meet and exceed the 15% by 2015 reduction goals are already underway through the enhanced energy efficiency program, the renewable energy standard, converting coal to natural gas and increasing the use of biofuels and that the next best opportunities to reduce GHG emissions are by improving recycling and forestry. These are the places that the Legislature needs to focus on.
Subscribe to:
Posts (Atom)
Posts
