Topic: Energy and Environment

Welcome to the Whimsy-conomy, Energy Trade Edition

The AP reports some bad news for anyone seeking a little security and predictability in the US and global energy markets:

Energy Secretary Ernest Moniz said Tuesday he will delay final decisions on about 20 applications to export liquefied natural gas until he reviews studies by the Energy Department and others on what impact the exports would have on domestic natural gas supplies and prices.

Moniz, who was sworn in Tuesday as the nation’s new energy chief, said he promised during his confirmation hearing that he would “review what’s out there” before acting on proposals to export natural gas. Among the things Moniz said he wants to review is whether the data in the studies are outdated.

A study commissioned by the Energy Department concluded last year that exporting natural gas would benefit the U.S. economy even if it led to higher domestic prices for the fuel.

The AP adds that Secretary Moniz justified this delay as his “commitment” to Senate Energy Committee Chairman Ron Wyden (D-Ore.) who opposes natural gas exports and has criticized the DOE study.  Moniz’s statement comes just days after his department (quietly, on a Friday) approved one pending export application—moving the grand total of approvals to two out of 20 total applications, most of which have been sitting on DOE’s desk for several years now.

And who says the U.S. government isn’t swift and efficient?

The Realities of Government Infrastructure

Politicians and liberal economists get misty-eyed when thinking about grand infrastructure projects. But recent stories in the Washington Post about D.C.-area projects illustrate the realities of government capital investments.

Arlington County recently spent $1 million for a single bus stop, and the structure doesn’t even shelter passengers from wind or rain. The stop is one of 24 along a planned streetcar route, which is a mode of transportation that makes no sense in this area. (I understand that the streetcar dream of local politicians is currently on hold in the face of strong citizen opposition). Why is Arlington wasting so much money on these bus stops? Probably because 80 percent of the costs are being paid by state and federal taxpayers, not local taxpayers.

The Washington Airports Authority has been in the news for mismanagement, overspending, and corruption. The Washington Post has a story today about corruption in contracting by the agency and the complete failure of senior executives to do anything about it. Why the corruption and mismanagement? Because the Authority is a government agency, and worse, it has a monopoly over D.C.-area airports. Airports should be privatized in order to introduce competition, improve service, end corruption, and reduce costs.

The Washington Post has also done an excellent job covering the Silver Spring Transit Center fiasco. The estimated cost of this grandiose bus/train station has more than quadrupled over time to $120 million. It’s a classic government cost overrun story involving mismanagement, design screw-ups, and contractor failures. A key cause of the problems seems to have been that so many different government agencies were involved that no one had the responsibility or incentive to make needed hard decisions to ensure quality and control costs. Today, fingers of blame are pointing in every direction, and the costs will rise even further as major engineering defects are fixed.  

The grandness of political visions for infrastructure run far ahead of the government’s ability to actually implement projects in an efficient manner. There are types of infrastructure that governments must fund. But more infrastructure should be opened up for private funding, ownership, and control. Private businesses make mistakes, but when they are spending their own money they have strong incentives to control costs, eliminate corruption, and complete quality projects on time—incentives that simply don’t exist in the government sector.

Mobility Is Freedom, Not an Invasion of Privacy

Mobility is freedom, or at least an important part of it. Yet earlier this month challenges to expansions of that freedom came from, surprisingly, the Mises Institute of Canada, Reason magazine, and American Enterprise Institute. The issues are new automobile technologies, specifically self-driving cars and improved road pricing, and the challenges came from people who clearly don’t understand the technologies involved.

Self-driving cars, says Roger Toutant writing for the Mises Institute of Canada, will lead to “a national, state-operated, computer network that will be used to achieve an Orwellian level of vehicular control and information sharing. …The implications are ominous. In the future, private spheres will be invaded and all movements will be tracked.”

“Boot up a Google car,” agrees Greg Beato of Reason magazine, “and it’s not so easy to cut the connection with the online mothership.” If you get into a Google driverless car, “you immediately start sending great quantities of revealing information to a company that’s already hoarding every emoticon you’ve ever IMed.”

It is appropriate to question new technologies, but the answer is that’s not the way these cars work. None of the self-driving cars being developed by Volkswagen, Google, or other companies rely at all on central computers. Instead, all the computing power is built into each car.

Low Climate Sensitivity Making its Way into the Mainstream Press

When it comes to the press, the New York Times pretty much defines “mainstream.”

And Justin Gillis is the Times’ mainstream reporter on the global warming beat.

So it is somewhat telling, that his article on Tuesday, “A Change in Temperature,” was largely dedicated (although begrudgingly) to facing up to the possibility that mainstream estimates (i.e., those produced by the U.N.’s Intergovernmental Panel on Climate Change) of climate sensitivity are too large.

Readers of this blog are probably well aware of the reasons why.

Despite our illusions of grandeur, this blog isn’t the mainstream press –although we do seek to influence it. Maybe we are being successful.

Throughout Gillis’ article are sprinkled references to “climate contrarians,” and even the recognition of the effort by such contrarians to push the new science on low climate sensitivity to the forefront of the discussion to change the existing politics of climate change.

Gillis writes:

Still, the recent body of evidence — and the political use that climate contrarians are making of it to claim that everything is fine — sheds some light on where we are in our scientific and public understanding of the risks of climate change.

We at the Cato’s Center for the Study of Science are at the leading edge of efforts to present a more accurate representation of the scientific of climate change through our testimony to Congress, public comments and review of government documents and proposals, media appearances, op-eds, and serial posts on this blog, among other projects. We emphasize that current regulations and proposed legislation are based on outdated, and likely wrong, projections of future climate impacts from human carbon dioxide emissions from the use of fossil fuels to produce energy.

Gillis recognizes the positives of a low climate sensitivity value:

“…tantalizing possibility that climate change might be slow and limited enough that human society could adapt to it without major trauma.”

“It will certainly be good news if these recent papers stand up to critical scrutiny, something that will take at least a year or two to figure out.”

“So if the recent science stands up to critical examination, it could indeed turn into a ray of hope…”

But, the “mainstream” is slow to change. And so despite the good news about climate sensitivity, Gillis closes his article by pointing out that, in his opinion, the political response to climate change has been “weak” (contrary to our view), and that therefore:

Even if climate sensitivity turns out to be on the low end of the range, total emissions may wind up being so excessive as to drive the earth toward dangerous temperature increases.

Clearly we still have work to do, but there are signs of progress!

CO2: 400ppm and Growing

The atmospheric concentration of carbon dioxide (CO2) has recently reached a “milestone” of 400 parts per million (ppm). In some circles, this announcement has been met with consternation and gnashing of teeth. The proper reaction is celebration.

The growth in the atmospheric CO2 concentration over the past several centuries is primarily the result of mankind’s thirst for energy—largely in the form of fossil fuels.  According to the World Bank, fossil fuel energy supplies about 80% of the world’s energy production—a value which has been pretty much constant for the past 40 years. During that time, the global population increased by 75%, and global energy use doubled. Global per capita energy use increased, while global energy use per $1000 GDP declined.  We are using more energy, but we are using it more efficiently. In the developed world, life expectancy has doubled since the dawn of the fossil fuel era.

Of course, burning fossil fuels to produce energy results in the emission of carbon dioxide into the atmosphere, tipping the natural balance of annual CO2 flux and leading to  a gradual build-up.

There are two primary externalities that result from our emissions of carbon dioxide into the atmosphere—1) an enhancement of the greenhouse effect, which results in an alteration of the energy flow in the earth’s climate and a general tendency to warm the global average surface temperature, and 2) an enhancement of the rate of photosynthesis in plants and a general tendency to result in more efficient growth and an overall healthier condition of vegetation (including crops).  There’s incontrovertible evidence that the planet is both warmer and greener than it was 100 years ago.

As we continually document (see here for our latest post), more and more science is suggesting that the rate (and thus magnitude at any point in time) of CO2-induced climate change is not as great as commonly portrayed. The lower the rate of change, the lower the resulting impact. If the rate is low enough, carbon dioxide emissions confer a net benefit. We’d like to remind readers that “it’s not the heat, it’s the sensitivity,” when it comes to carbon dioxide, and the sensitivity appears to have been overestimated.

As new science erodes the foundation of climate worry, new technologies are expanding recoverable fossil fuel resources. Horizontal drilling and hydraulic fracturing have opened up vast expanses of fossil fuel resources—mainly natural gas—that were untouchable just a few years ago. The discovery that the world is awash in hundreds of years of recoverable fuels is a game-changer, given  the strong correlation between energy use per capita and life expectancy.

400ppm of carbon dioxide in the atmosphere should remind us of our continuing success at expanding the global supply of energy to meet a growing demand. That  success which ultimately leads to an improvement of the global standard of living and a reduction in vulnerability to the vagaries of weather and climate.

400pm is cause for celebration. “A world lit only by fire” is not. 

Stopping the EPA from Regulating Puddles

Some of the biggest Environmental Protection Agency abuses of property rights (see last term’s Sackett case and this term’s Koontz case) stem from expansive interpretations of the Clean Water Act. The EPA imposes huge costs on people who want to do anything on their property, claiming the agency has the authority to regulate “wetlands.” The agency is only supposed to have authority to regulate discharges to “navigable” waters, but the jurisprudence here is so confused that it’s become an area ripe for federal overreach. This week a group of Republican senators (Rand Paul, Mike Lee, Marco Rubio, David Vitter, and Mitch McConnell) introduced a bill that’s an excellent step to addressing the federal government’s endemic property rights violations. The Defense of Environment and Property Act of 2013 does a number of very good things:

  1. Narrows the definition of “navigable waters” to waters that are “navigable-in-fact” or “permanent, standing, or continuously flowing bodies of water … that are connected to waters that are navigable-in-fact,” with explicit exclusions for such things as rainfall drainage channels and wetlands without a continuous connection to “waters of the United States”;

  2. Directs that the EPA and Army Corps of Engineers shall not impinge on the primary power of states over land and water use;

  3. Gives landowners judicial review in federal court within 30 days of any claim of federal authority over their land or water resources;

  4. Makes clear that ground water is state, not federal water;

  5. Eliminates the so-called “signficant nexus test” that the EPA often uses to assert jurisdiction over otherwise non-federal lands;

  6. Strikes down various regulations and agency guidances;

  7. Requires a landowner’s consent before federal agents can enter his property to collect information regarding navigable waters;

  8. Defines as a regulatory taking any loss of value of land due to navigable-water-related regulation and compensates the landowner twice the value of that loss.
Unlike most legislation before Congress, this bill would help a lot of people very quickly in a very direct way. I hope Congress acts on it.

Farmers Starting to Resent Strings Attached to Subsidies

Earlier this week, farming and some conservation groups announced that they had come to a deal to link eligibility for crop insurance premium subsidies to compliance with conservation measures. In return, in one of the great sell-outs in modern times, the conservation groups agreed not to push for payment limits or means testing on farm subsidies.

But it seems that the new link between conservation and government support for crop insurance has angered the House Agriculture Committee Chairman, Frank Lucas. From the DTN Ag Policy Blog yesterday:

Lucas, a Republican from Oklahoma, told DTN off the House floor Wednesday that he has a philosophical problem with various lobby groups “tying strings to how farmers farm” and dictating terms to producers when the farm bill is supposed to be about raising food and fiber.

“My perspective has always been, very sincerely, if a farm bill is about raising food — and I know 80% of it now is about making sure people have enough to eat, helping them buy their food — but if it is about raising food, farmers should have the tools to raise the food and fiber,” Lucas said. “And if you engage in whole series of things, such as you can’t get crop insurance unless you plant in a certain way, on a certain day, in a certain direction, or you can’t access a variety of other programs, then we aren’t having a farm bill that helps farmers raise food and fiber, but we have a social tool here that’s used to direct how farmers use their lives and conduct their business.” [emphasis added]

You’ll excuse me if I am having trouble summoning much sympathy for your special interest friends, Mr Lucas. It’s just that I feel that having to accept inconvenient conditions should be expected when you suck at the government teat. The Farm Bill was designed as a social tool, and you and your colleagues over the years have added more “social tools” like food stamps, environmental programs and energy subsidies in order to secure sufficient votes for your pork. Complaining now that all these other people are ruining your party is, to say the least, a bit rich.

If farmers don’t want to be directed on “how [they] use their lives and conduct their business,” then I suggest they start sending their cheques back. Ending farm programs will truly Free the Farm.