Topic: Energy and Environment

Gingrich & Woolsey on Energy

The other day, The Wall Street Journal provided a public service by lambasting Newt Gingrich for his absurd speech to the ethanol lobby in Des Moines last month (money line:  ”Obviously big urban newspapers want to kill it because it’s working, and you wonder, ‘What are their values?’”).  Today, Gingrich and fellow ethanol-maven James Woolsey struck back in those very same pages.  In doing so, Gingrich provided yet more evidence that he’s intellectually unfit for office.

“It is in this country’s long-term best interest,” he said, ”to stop the flow of $1 billion a day overseas.”  Really?  So money sent overseas is gone forever.  News to me.  The only thing you can buy with dollars earned from oil sales to the U.S. is to buy things denominated in dollars or to exchange them so that someone else can.  And we sell a lot of stuff to foreigners that are denominated in dollars (treasury bills for one) and that money comes right back to the good old U.S. of A.

But put that aside.  If Gingrich really believes this, then why not just ban all imports all together?  Is that what the GOP is about these days - rank gooberism on trade?

And one other thing; the U.S. does not spend $1 billion a day on foreign oil.  It spends about half that; $530 million a day (in 2009 anyway).

“[I] co-produced a movie with my wife, Callista, ‘We Have the Power,’ that argued for an ‘all of the above’ energy strategy which would maximize all forms of domestic energy production.”  Apparently, being a pol means that one doesn’t have to pick and choose between investments a, b, or c.  We’ll just mandate everyone invest in everything that can attract a lobbyist. 
When you hear this stuff about an ”all of the above” energy strategy, what you’re hearing is a complaint that the Democrats aren’t subsidizing enough of the energy industry.  They are too tight-fisted with the public purse.  They are not ambitious enough in their planning.  And while Republicans bang the table for more, more, and more handouts to private corporations, liberals like Amory Lovins (prominent left-of-center energy guru) and Carl Pope (former head of the Sierra Club) call for zeroing out everyone’s subsidies and leaving the energy market the heck alone (at least when it comes to this matter).  It’s a mad, mad world.
 
“Nevertheless,” says Gingrich, ”the Journal attempts to equate my career-long commitment to increased American energy production with the anti-energy agenda of President Obama. This is a laughable charge, especially considering I have been one of the most vocal opponents of the president’s energy policies since he took office.”  Perhaps, but on this matter, Gingrich is attacking the administration from the Left.  
 
Even more amusing was James Woolsey’s lecture to the editorial board over what it means to be a conservative.   “We could not help wondering,” he asked along with his co-author, Gal Luft, ”why the Journal, despite its commitment to free enterprise, chose to attack Newt Gingrich for his call to open vehicles to fuel competition, which would cost auto makers under $100 per new car.”  Well Jim, a commitment to free enterprise is a commitment to allow enterprises to be free to produce whatever they want.  Of course, if Woolsey had read Gingrich’s speech to the ethanol lobby, he would not need to wonder - it’s about their sick, twisted values.
 
Nonetheless, Woolsey claims that such a mandate ”is perfectly in line with conservative economic principles.”  That may be true given what conservatives believe about economics.  But it’s not consistent with a principled support for a free market.
 
Finally, “Challenging Mr. Gingrich’s conservative bona fides based on his support for breaking oil’s virtual monopoly over transportation fuel is not only myopic but also the best gift the Journal can give OPEC.”  But … oil dominates the transportation market because it is a heck of a lot cheaper than any other fuel.  If it weren’t so much cheaper than ethanol, then we would have no need for such massive subsidies for the same.  The same goes for electric cars.  If and when that changes, oil’s “monopoly” will crumble.  Until then, taking oil out of transportation markets simply takes cheap fuel out of transportation markets.  It would be fun to watch a Gingrich/Woolsey ticket run on that.

Al Gore on Snowpocalypse 2011

Today POLITICO Arena asks:

Ex-VP Al Gore says the snowstorms that paralyzed much of the U.S. this week are more evidence of manmade global warming. “The scientific community has been addressing this particular question for some time now and they say that increased heavy snowfalls are completely consistent with what they have been predicting as a consequence of man-made global warming.” Do you agree?

My response:

A scientific hypothesis that’s essentially unfalsifiable – cold corroborates “global warming,” heat corroborates it, nothing really falsifies it – is worse than useless. It’s a scientific poseur, properly classified as a belief system, like religion. And the implication that there’s an optimal earth temperature, or range of temperatures, or that global warming is destructive, not possibly beneficial, is just further evidence that there’s more going on here than pure science.

Throw in beliefs about the human contributions to “global warming” and the policy recommendations that follow – massive shifts toward wildly expensive command-and-control energy systems, the effect on the world’s poor notwithstanding – and the politics of the matter come into view. Let’s remember that Al Gore, who never missed an opportunity to expand government,  was once an ethanol evangelist, a posture he’s recently admitted was connected mainly with presidential politics in Iowa – now that ethanol has been shown to have negative environmental consequences. Frankly, I’ll stick with Punxsutawney Phil.

Egypt and Energy Policy

Today Politico Arena asks:

Given that crude oil prices surged to nearly $90 per barrel on Friday, and could spike even higher if the crisis causes a shutdown of the Suez Canal, how should policymakers in Wasihngton respond regarding oil and the crisis in Egypt? Does the situation underscore a need for more domestic production? And does this crisis bolster or hamper Obama’s clean energy initiative that he called for in his State of the Union address last week?

My response:

The unrest in Egypt should have no bearing whatever on American energy policy. Like nearly every other commodity – food, clothing, shelter, education, health care – energy, from whatever source, is far more efficiently and equitably produced and distributed by the market than by governments, even when foreign governments play a part in that process. We saw that in the “energy crises” of the ’70s; we’ve seen it in every ”crisis” since.

Why, in the name of “energy independence,” should the U.S. government “promote” domestic production if foreign energy is cheaper? Do we imagine that manifold foreign producers will not supply us if the price is right? Where’s the evidence for that? Any government promotion should be by simply getting out of the way and letting the market determine where energy is produced.

Nor should today’s Egyptian unrest affect Obama’s “clean energy initiative,” which should fall on its own terms. It’s nothing but a massive government intrusion into the market, subsidizing expensive sources of energy for little environmental gain, making us all poorer, but especially the poorest among us. Do we need any better example that the ethanol boondoggle, which even Al Gore has admitted is environmentally destructive? Energy policy will be an early test of whether the new House majority is serious about reducing the role of government in our lives.

Property Rights and the Takoma Park Tree Tussle

It’s enviro vs. enviro in Washington’s most “progressive” suburb, Takoma Park. Indeed, the Washington Post reports, “a potentially bough-breaking debate between sun-worshipers and tree-huggers.” That is, which is more environmentally desirable, solar power or tree cover?

The modest gray house in Takoma Park was nearly perfect, from Patrick Earle’s staunchly environmentalist point of view. It was small enough for wood-stove heating, faced the right way for good solar exposure and, most important, was in a liberal suburb that embraces all things ecological.

Or almost all. When Earle and his wife, Shannon, recently sought to add solar panels to the house, which they have been turning into a sustainability showplace, the couple discovered that Takoma Park values something even more than new energy technologies: big, old trees.

When they applied to cut down a partially rotten 50-foot silver maple that overshadowed their roof, the Earles ran into one of the nation’s strictest tree-protection ordinances. Under the law, the town arborist would approve removing the maple only if the couple agreed to pay $4,000 into a city tree-replacement fund or plant 23 saplings on their own.

So now the rival environmentalists are squaring off in front of the city council:

Takoma Park City Council members, who are considering revising the 1983 tree-protection law, listened Monday night as otherwise like-minded activists vied to claim the green high ground.

Tree partisans hailed the benefits of the leafy canopy that shades 59 percent of the town: Trees absorb carbon, take up stormwater, control erosion and provide natural cooling….

Solar advocates at the hearing said that they are tree lovers, too, but that scientific studies support the idea of poking select holes in the tree cover to let a little sun power through.

Being an environmentalist homeowner can become a full-time job:

But even some veteran solar users don’t like the idea of trading trees for panels. Mike Tidwell, founder of the Chesapeake Climate Action Network, installed solar panels on his Takoma Park house 10 years ago. As the trees have grown, the panels’ effectiveness has diminished, and Tidwell now buys wind power credits to supplement them.

Still, he said, “I don’t believe you should cut down trees for solar.” Rather, he thinks neighbors should work together to place shared panels on the sunniest roofs.

The city’s “official arborist” turned down Earle’s application to tear down one rotting tree to accommodate his solar panels. Now the council is debating the issue.

The Earles’ council member, Josh Wright, said he was sympathetic to their plight. He said it should remain hard to cut down a tree, but he’d like to see a break for people installing solar power. Wright also wants all homeowners to get credit for trees they may have planted in the years before they remove a tree.

It all sounds very complicated. And who knows what the right answer is? Or if there is a right answer? Or if the right answer might change next year?

And that’s where property rights come in.  They allocate both jurisdiction and liability over scarce resources, like roofs, trees, and access to sunlight.  A little “law and economics” can help to understand the Takoma Park Tree Tussle.  Nobel Laureate in Economics Ronald Coase, who just turned 100, brought law and economics together to study the way that people externalize costs (make others pay for them) or internalize them (take them into account when making decisions).  When property rights are well defined and legally secure, and rights can be exchanged at low cost, resources will be directed to their most highly valued use.  In fact, the initial allocation of property rights doesn’t affect the allocation of resources, if the transfers are freely and easily negotiable.

That, unfortunately, is no longer the case in Takoma Park, where instead of a fairly straightforward transaction (facilitated by a purchase), there is a tussle over ill-defined rights and obligations that have little or no legal security, in a very expensive and costly process of negotiation that will almost certainly consume more wood pulp for memos than is contained in the tree in question.  Well-defined and legally secure property rights save us the rather substantial trouble of sitting down like the Takoma Park City Council and trying to judge the advisability of every proposed purchase, all the while consuming large amounts of paper and exuding large amount of hot air.

The Traffic Congestion Problem

A new report says that traffic congestion is worse, and the American Public Transportation Association urges Congress to … spend more money on public transportation.

Cato senior fellow Randal O’Toole has been challenging the received wisdom on traffic and mass transit for years. See his book Gridlock: Why We’re Stuck in Traffic and What to Do About It, and lots of other studies. In November he debated the head of the American Public Transportation Association at a Cato Policy Forum:

Preparing for Life as a Light Bulb Black Marketeer

 I’ve decided the time has come to become an entrepreneur – as a black market operator.

Come next January, 100-watt incandescent light bulbs will be illegal, courtesy of Congress and President George W. Bush.  Lower wattages will be banned the following year.  As usual, politicians in Washington believe they know best and are determined to inconvenience the public in the name of saving energy.

No matter that incandescent lights offer a softer light and are a better value than fluorescent bulbs if turned on only briefly.  And no matter that breaking a fluorescent light will spill mercury, creating what in any other circumstance would be considered to be a biohazard.

There are other consequences of the coming prohibition.  Notes Tim Carney of the Washington Examiner:

  • Citing this law, GE has closed its incandescent light plant in Virginia. For the coming years, while they’re still legal, Americans will be buying their GE incandescents from Mexico. This probably means less efficient manufacturing and more shipping.
  • GE makes its CFLs in China. The factories are likely dirtier and less efficient, and certainly there will be more shipping costs.
  • Because of the warm-up time for CFLs and the knowledge that they use less energy, people are more likely to leave them on for longer, I imagine.
  • In northern latitudes, incandescents’ inefficiency is not wasted. Think about it: in Alaska, summer nights are very short and winter nights are very long. That means a vast majority of light-bulb time happens in the winter. The incandescents waste energy in the form of heat, but if it’s cold, that added heat slightly reduces your need to use a furnace.
Of course, it’s hard to decide how many bulbs to buy.  What would be a lifetime supply of 100 watt lights?

And why stop there?  I could become an incandescent bulb pusher once the prohibition takes effect.  I don’t think drug prohibition makes any sense, but I have no desire to get into that market.  Customers and competitors are an ugly lot and I really don’t want to go to prison.  But selling light bulbs – now there’s something I could do!

I’d be even happier, however, if the new Congress dropped the coming prohibition.  Fluorescent bulbs often are a wise choice, but not always.  A supposedly free society should leave at least a few choices to people – like deciding which light bulbs to use.

Norfolk Light-Rail Scandal

Another city has discovered that light rail is not the road to utopia. In 2007, Norfolk, Virginia decided to revitalize its downtown by building a rail transit line. That line is now 45 percent over budget and its opening has been delayed by more than 16 months.

When Flickr user DearEdward took this construction photo in July, 2008, Norfolk officials were promising to open the light-rail line in December, 2009 at a cost of $232 million. Now the cost has grown to $338 million and the opening delayed to late in 2011.

A 45-percent cost overrun is about average for rail transit construction, but it has hit Norfolk particularly hard. In 2007, the Federal Transit Administration agreed to fund 72 percent of the then-projected $232 million cost, with the Commonwealth of Virginia and city of Norfolk each funding about half the remainder. Since the feds did not agree to cover any of the cost overruns, the overruns represent a near-tripling of the costs to state and city taxpayers.

Furious about the unexpected costs and delays., the Hampton Roads Transit board (which consists of city councilors from the cities the agency serves) forced the agency’s general manager to retire. A month ago, a state audit found that the Norfolk city manager and transit planners knew about the cost overrun long before they bothered to tell the city. As a result, both the city manager and the agency’s agency’s head planner resigned this week.

On top of cost overruns are construction delays. Originally scheduled to open to the public in December 2009, opening was delayed until May 2011. But now the transit agency admits it won’t even meet that date and can’t say when it will open.

Meanwhile, far from becoming a place “where people can work, shop, eat, and play,” Norfolk’s downtown now features “hundreds of empty condos, apartments, and storefronts.” The latest news is that a major supermarket is closing after a mere three years in business. While the truth is that the relative handful of people who are expected to ride the light-rail line are not enough to revitalize any downtown, lengthy construction delays certainly don’t help.

The best thing Norfolk might do now is to abandon the light-rail line and dedicate the $10 million or so that it will cost to subsidize rail operations to improving bus service in the city and its surroundings. Unfortunately, doing so means that it would have to refund the federal government the $168 million that it contributed to the line. As a result, city taxpayers will have to throw good money after bad by funding tens of millions in operating subsidies for the next several decades.