Energy-Price Idiocy Politics trumps policy at the gas pump. By Jonathan H. Adler May 18, 2006 —Contributing Editor Jonathan H. Adler is associate professor and associate director of the Center for Business Law and Regulation at the Case Western Reserve University School of Law. Congressional leaders are rushing to “do something” about near-record gasoline prices, and the looming threat of further price spikes this summer. With little political support for another pork-laden energy bill like that already signed into law by President Bush, House Republican leaders plan a series of votes on a wide range of energy-policy measures. Unfortunately, many of the ideas on the table, including new energy-conservation mandates and measures to combat “windfall profits,” could do more harm than good. A case in point is the bipartisan stampede against “price gouging.” Despite the lack of evidence oil companies or anyone else is manipulating gasoline prices, this month the House voted 389-34 to criminalize “price gouging.” The House did not bother to define the crime, delegating that job to the Federal Trade Commission. Nonetheless, a vast majority congressmen were sure service-station owners should face jail time and fines up to $2 million if they charged “too much” for gas. This is sheer lunacy. Criminalizing “price gouging” will do more to encourage gas shortages than control price increases. Whether politicians like to admit it or not, the profit motive plays a key role in calibrating supply and demand. Limit the ability of companies to profit from energy-related investments, and they will make fewer of them. Limiting the potential for profit will limit future supply. Threaten companies with prosecution should they respond to market conditions by raising prices, and shortages are the inevitable result… Consider the shortfall in domestic refining capacity. While gasoline prices are largely a function of global crude markets, the lack or surplus-refining capacity makes temporary price spikes more likely because refiners are unable to respond to regional changes in demand. Some of the gap between domestic demand and domestic-refining capacity can be made up through imports, but here the U.S. is at a disadvantage due to our more stringent environmental requirements for domestic fuels. Regulatory impediments, combined with traditionally thin profit margins, have combined to discourage capacity-increasing investments. The lion’s share of recent investment in the refining sector has gone to meet various environmental and other regulatory mandates, rather than increasing output. Siting and permitting new facilities is particularly difficult. If it took the Arizona Clean Fuels project a reported five years to obtain air-quality permits for a proposed refinery project, few companies will be encouraged to follow their lead. Last year, Sen. Inhofe proposed modest legislation to streamline permitting requirements for refineries. Such a modest step could reduce the cost and uncertainty involved with environmental compliance without sacrificing environmental protection. Yet like other modest and sensible policy proposals, the bill fell victim to political posturing. A similar measure was proposed in the House, but it is far more heavy-handed than necessary to do the job. Ideally, Congress would not only streamline the permit process but also authorize the EPA to waive applicable environmental requirements where there are more cost-effective means to meet the same environmental goals. Another source of gas-price volatility is the balkanization of gasoline markets by the proliferation of gasoline-formula requirements. Under the Clean Air Act, different parts of the country now require the use of various “boutique fuel” blends at various times of the year. By segmenting national gasoline markets, these requirements have made some regions more vulnerable to supply disruptions and price spikes. In the past, if a pipeline went down or refinery closed for repairs, the resulting regional shortfall could be met by gasoline from virtually anywhere else in the country. No longer, as different places require different types of fuels. The Bush administration recently authorized the suspension of such rules under certain conditions, but Congress needs to act as well to prevent the adoption of additional boutique fuel requirements and, over time, reduce the variety of fuels required today… It would also be helpful if political leaders would acknowledge that most changes in prices are due to factors well beyond their control. The global demand for energy is on the rise, and will continue to increase regardless of what Congress does. India and China are not about to curb their appetites for carbon-based fuels. On the bright side, the importance of energy to U.S. economic growth is on the wane. Gasoline prices may be near-record highs, but the affordability of gasoline—measured as a function of income—has increased significantly over the past 25 years. Equally important, the energy intensity of the U.S. economy is dropping, as American companies learn how to squeeze greater output out of each unit of energy. Thus the economic repercussions of increased prices are less severe. Markets respond naturally to price fluctuations when they are able to do so. Higher prices signal to investors that there are potential profit-making opportunities. Where markets are free to operate, price increases should spur investments to increase supply (and should encourage consumers to reduce consumption). Government interventions in commodity markets, whether direct or indirect, tend to short-circuit the market’s natural feedback mechanisms. This is as true of regulations that balkanize gasoline markets as it is of ill-conceived efforts to combat “price gouging. Myriad government policies already retard energy markets’ ability to respond to changes in supply and demand, and thereby increase price volatility and likelihood of temporary supply disruptions. If Congress is unwilling or unable to improve on this situation, the last thing it should do is anything to make it worse. Click here for the full text of the column.

KRUGMAN’S “CONSPIRACY”

Monday May 15, 2006

Fact of the Day: Tuesday, May 09, 2006

KRUGMAN’S “CONSPIRACY”

Paul Krugman of the New York Times writes in his column this week that conservatives who agree with Senator Inhofe that “man-made global warming is the greatest hoax ever perpetrated on the American people,” believe in a “bizarre conspiracy theory.” In other words, according to Krugman, it’s unconscionable to even raise questions about the science behind climate change, and those who do risk alienation by at least one liberal columnist.

FACT: Senator Inhofe called man-made global warming a hoax, not a conspiracy. To perpetrate a hoax is to actively promote a falsehood for some purpose, while a conspiracy requires secrecy. But there is nothing secretive about global-warming alarmists' claims that the science is settled, and those claims are false. In an open letter sent last month from 60 top climate scientists to Prime Minister Harper of Canada is simply more proof that there is no consensus regarding the science behind climate change. In part, that letter reads:

While the confident pronouncements of scientifically unqualified environmental groups may provide for sensational headlines, they are no basis for mature policy formulation. The study of global climate change is, as you have said, an ‘emerging science,’ one that is perhaps the most complex ever tackled…

‘Climate change is real’ is a meaningless phrase used repeatedly by activists to convince the public that a climate catastrophe is looming and humanity is the cause. Neither of these fears is justified. Global climate changes all the time due to natural causes and the human impact still remains impossible to distinguish from this natural ‘noise.’

Furthermore, while Senator Inhofe has given several speeches about the science behind climate change, Mr. Krugman simply resorts to name-calling instead of offering a single rebuttal in his columns. From what New York Times ombudsman Daniel Okrent wrote in his column on May 22, 2005 it’s not surprising: “Op-Ed columnist Paul Krugman has the disturbing habit of shaping, slicing and selectively citing numbers in a fashion that pleases his acolytes but leaves him open to substantive assaults.” Therefore it’s laughable when Krugman writes, “Instead of facing up to hard questions, they (conservatives) try to suggest that anyone who asks those questions is crazy.” With that said, it appears Krugman should be his own biggest critic.

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IN CASE YOU MISSED IT

THE HILL

FIGHT OVER GAS TERMINAL MAY GO A BRIDGE TO FAR

By Jim Snyder

 

Web link 

May 3, 2006

Massachusetts members thought they found a way to block a liquefied natural gas (LNG) terminal from being built in Fall River: Slip language into a massive transportation bill to prevent the planned destruction of an old bridge.

The Brightman Street Bridge, which spans the Taunton River, stood in the path that tankers carrying the supercooled natural gas would have to travel to reach the terminal. Because the drawbridge is relatively narrow, the tankers would not be able to pass through it. Save the bridge, kill the terminal, the members thought. They included $500,00 to convert the bridge for bicycle and pedestrian use.

But Weaver’s Cove Energy, the company developing the project, had an answer. The company proposed shipping the gas in smaller tankers that would operate more frequently to meet demand.

After approving the terminal last July, the Federal Energy Regulatory Commission (FERC) reaffirmed that decision this year, taking into consideration the use of smaller tankers, even though the Coast Guard raised concerns about the more frequent traffic from the use of smaller ships…

The Weaver’s Cove case “showcases the lengths opponents will go to stop a project,” House Energy and Commerce Committee Chairman Joe Barton (R-Texas) said during a hearing last October according to a fact sheet distributed by Ogilvy Public Relations, which is working for the energy company.

Sen. James Inhofe (R-Okla.), who as chairman of the Senate Environment and Public Works Committee played a key role in crafting the massive transportation reauthorization bill that served as a vehicle to block the Brightman Street Bridge demolition, introduced an amendment to rescind the provision during debate on emergency heating funds.

In a floor speech, Inhofe said he was astonished to discover the provision had been slipped in.

“This short-sighted stunt by a few members means that the Northeast region will be deprived of supply that would reduce wholesale natural-gas prices by up to 20 percent,” Inhofe said. The amendment was ruled out of order.

Senate Energy and Natural Resources Committee Chairman Pete Domenici (R-N.M.) noted opposition to the Weaver’s Cove LNG terminal in a recent statement that criticized Democrats for embracing policies that lead to high energy prices.

Mershon said that Massachusetts members realize the state and region could use more natural gas but that the delegation thinks the terminals should be built offshore, away from population centers. The terminal could undermine economic development plans along the riverfront, Mershon said…

Company officials have noted that the terminal would be built in what was once a tank farm operated by Shell Oil Co. The company chose the site for that reason as well as its deepwater port and its proximity to a large natural-gas pipeline, according to a fact sheet distributed by Ogilvy.

 

 

MOTORISTS HURT BY ELIMINATION OF MTBE

Democrats’ Obstruction Felt by Consumers at the Gas Pump

Friday April 21, 2006

Last month, the United States Senate Environment and Public Works Committee held an Oversight Hearing on the Impact of the Elimination of MTBE. The hearing focused on concerns raised in a report by the Energy Information Agency titled Eliminating MTBE in Gasoline in 2006 regarding shortages that could occur as refiners switch from MTBE to ethanol. A senior Minority member at the hearing flatly stated, “I do not believe that the elimination of MTBE will have a significant impact on the gasoline market.”  

FACT: As widely reported today, the elimination of MTBE is causing significant disruptions in several cities across the country today. Reuters reports in an article, Gasoline supply problems hit U.S. East Coast, that consumers are now facing the consequences of the shift from MTBE to ethanol. The article states:  

The Energy Department has reported shortages at terminals near Richmond, Virginia, as well as the Tidewater area near Chesapeake Bay and Virginia Beach which distribute gasoline to service stations.

Some gasoline distribution terminals from Virginia to Massachusetts are seeing shortages as the industry phases out a water-polluting additive, the U.S. Energy Department said on Thursday.

It is critical for the nation to increase its petroleum and bio-refinery capacity. Chairman Inhofe’s legislation – the Gas PRICE Act and Energy Price Reduction Act amendment to the LIHEAP bill – would have assisted with the transition away from MTBE. The legislation would have expedited the permitting process for traditional as well as renewable fuel infrastructure so that regions of the country would not have to face the temporary supply shortfalls and corresponding price increases now affecting motorists.  

Unfortunately for consumers at the pump today, Senate Democrats succeeded in stalling the Gas PRICE Act in Committee and objected to the LIHEAP amendment. Undoubtedly, next time consumers go to the voting booth they will remember who in the Senate kept them from filling-up today and who continues to obstruct legislation that provides real solutions.

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Click Here for the Link: http://www.canada.com/nationalpost/financialpost/story.html?id=3711460e-bd5a-475d-a6be-4db87559d605

An open letter to Prime Minister Stephen Harper:

Dear Prime Minister:

As accredited experts in climate and related scientific disciplines, we are writing to propose that balanced, comprehensive public-consultation sessions be held so as to examine the scientific foundation of the federal government's climate-change plans. This would be entirely consistent with your recent commitment to conduct a review of the Kyoto Protocol. Although many of us made the same suggestion to then-prime ministers Martin and Chretien, neither responded, and, to date, no formal, independent climate-science review has been conducted in Canada. Much of the billions of dollars earmarked for implementation of the protocol in Canada will be squandered without a proper assessment of recent developments in climate science.

Observational evidence does not support today's computer climate models, so there is little reason to trust model predictions of the future. Yet this is precisely what the United Nations did in creating and promoting Kyoto and still does in the alarmist forecasts on which Canada's climate policies are based. Even if the climate models were realistic, the environmental impact of Canada delaying implementation of Kyoto or other greenhouse-gas reduction schemes, pending completion of consultations, would be insignificant. Directing your government to convene balanced, open hearings as soon as possible would be a most prudent and responsible course of action.

While the confident pronouncements of scientifically unqualified environmental groups may provide for sensational headlines, they are no basis for mature policy formulation. The study of global climate change is, as you have said, an "emerging science," one that is perhaps the most complex ever tackled. It may be many years yet before we properly understand the Earth's climate system. Nevertheless, significant advances have been made since the protocol was created, many of which are taking us away from a concern about increasing greenhouse gases. If, back in the mid-1990s, we knew what we know today about climate, Kyoto would almost certainly not exist, because we would have concluded it was not necessary.

We appreciate the difficulty any government has formulating sensible science-based policy when the loudest voices always seem to be pushing in the opposite direction. However, by convening open, unbiased consultations, Canadians will be permitted to hear from experts on both sides of the debate in the climate-science community. When the public comes to understand that there is no "consensus" among climate scientists about the relative importance of the various causes of global climate change, the government will be in a far better position to develop plans that reflect reality and so benefit both the environment and the economy.

"Climate change is real" is a meaningless phrase used repeatedly by activists to convince the public that a climate catastrophe is looming and humanity is the cause. Neither of these fears is justified. Global climate changes all the time due to natural causes and the human impact still remains impossible to distinguish from this natural "noise." The new Canadian government's commitment to reducing air, land and water pollution is commendable, but allocating funds to "stopping climate change" would be irrational. We need to continue intensive research into the real causes of climate change and help our most vulnerable citizens adapt to whatever nature throws at us next.

We believe the Canadian public and government decision-makers need and deserve to hear the whole story concerning this very complex issue. It was only 30 years ago that many of today's global-warming alarmists were telling us that the world was in the midst of a global-cooling catastrophe. But the science continued to evolve, and still does, even though so many choose to ignore it when it does not fit with predetermined political agendas.

We hope that you will examine our proposal carefully and we stand willing and able to furnish you with more information on this crucially important topic.

CC: The Honourable Rona Ambrose, Minister of the Environment, and the Honourable Gary Lunn, Minister of Natural Resources

- - -

Sincerely,

Dr. Ian D. Clark, professor, isotope hydrogeology and paleoclimatology, Dept. of Earth Sciences, University of Ottawa

Dr. Tad Murty, former senior research scientist, Dept. of Fisheries and Oceans, former director of Australia's National Tidal Facility and professor of earth sciences, Flinders University, Adelaide; currently adjunct professor, Departments of Civil Engineering and Earth Sciences, University of Ottawa

Dr. R. Timothy Patterson, professor, Dept. of Earth Sciences (paleoclimatology), Carleton University, Ottawa

Dr. Fred Michel, director, Institute of Environmental Science and associate professor, Dept. of Earth Sciences, Carleton University, Ottawa

Dr. Madhav Khandekar, former research scientist, Environment Canada. Member of editorial board of Climate Research and Natural Hazards

Dr. Paul Copper, FRSC, professor emeritus, Dept. of Earth Sciences, Laurentian University, Sudbury, Ont.

Dr. Ross McKitrick, associate professor, Dept. of Economics, University of Guelph, Ont.

Dr. Tim Ball, former professor of climatology, University of Winnipeg; environmental consultant

Dr. Andreas Prokoph, adjunct professor of earth sciences, University of Ottawa; consultant in statistics and geology

Mr. David Nowell, M.Sc. (Meteorology), fellow of the Royal Meteorological Society, Canadian member and past chairman of the NATO Meteorological Group, Ottawa

Dr. Christopher Essex, professor of applied mathematics and associate director of the Program in Theoretical Physics, University of Western Ontario, London, Ont.

* Dr. Gordon E. Swaters, professor of applied mathematics, Dept. of Mathematical Sciences, and member, Geophysical Fluid Dynamics Research Group, University of Alberta (* Note: Swaters later recanted his signature on the open letter)

Dr. L. Graham Smith, associate professor, Dept. of Geography, University of Western Ontario, London, Ont.

Dr. G. Cornelis van Kooten, professor and Canada Research Chair in environmental studies and climate change, Dept. of Economics, University of Victoria

Dr. Petr Chylek, adjunct professor, Dept. of Physics and Atmospheric Science, Dalhousie University, Halifax

Dr./Cdr. M. R. Morgan, FRMS, climate consultant, former meteorology advisor to the World Meteorological Organization. Previously research scientist in climatology at University of Exeter, U.K.

Dr. Keith D. Hage, climate consultant and professor emeritus of Meteorology, University of Alberta

Dr. David E. Wojick, P.Eng., energy consultant, Star Tannery, Va., and Sioux Lookout, Ont.

Rob Scagel, M.Sc., forest microclimate specialist, principal consultant, Pacific Phytometric Consultants, Surrey, B.C.

Dr. Douglas Leahey, meteorologist and air-quality consultant, Calgary

Paavo Siitam, M.Sc., agronomist, chemist, Cobourg, Ont.

Dr. Chris de Freitas, climate scientist, associate professor, The University of Auckland, N.Z.

Dr. Richard S. Lindzen, Alfred P. Sloan professor of meteorology, Dept. of Earth, Atmospheric and Planetary Sciences, Massachusetts Institute of Technology

Dr. Freeman J. Dyson, emeritus professor of physics, Institute for Advanced Studies, Princeton, N.J.

Mr. George Taylor, Dept. of Meteorology, Oregon State University; Oregon State climatologist; past president, American Association of State Climatologists

Dr. Ian Plimer, professor of geology, School of Earth and Environmental Sciences, University of Adelaide; emeritus professor of earth sciences, University of Melbourne, Australia

Dr. R.M. Carter, professor, Marine Geophysical Laboratory, James Cook University, Townsville, Australia

Mr. William Kininmonth, Australasian Climate Research, former Head National Climate Centre, Australian Bureau of Meteorology; former Australian delegate to World Meteorological Organization Commission for Climatology, Scientific and Technical Review

Dr. Hendrik Tennekes, former director of research, Royal Netherlands Meteorological Institute

Dr. Gerrit J. van der Lingen, geologist/paleoclimatologist, Climate Change Consultant, Geoscience Research and Investigations, New Zealand

Dr. Patrick J. Michaels, professor of environmental sciences, University of Virginia

Dr. Nils-Axel Morner, emeritus professor of paleogeophysics & geodynamics, Stockholm University, Stockholm, Sweden

Dr. Gary D. Sharp, Center for Climate/Ocean Resources Study, Salinas, Calif.

Dr. Roy W. Spencer, principal research scientist, Earth System Science Center, The University of Alabama, Huntsville

Dr. Al Pekarek, associate professor of geology, Earth and Atmospheric Sciences Dept., St. Cloud State University, St. Cloud, Minn.

Dr. Marcel Leroux, professor emeritus of climatology, University of Lyon, France; former director of Laboratory of Climatology, Risks and Environment, CNRS

Dr. Paul Reiter, professor, Institut Pasteur, Unit of Insects and Infectious Diseases, Paris, France. Expert reviewer, IPCC Working group II, chapter 8 (human health)

Dr. Zbigniew Jaworowski, physicist and chairman, Scientific Council of Central Laboratory for Radiological Protection, Warsaw, Poland

Dr. Sonja Boehmer-Christiansen, reader, Dept. of Geography, University of Hull, U.K.; editor, Energy & Environment

Dr. Hans H.J. Labohm, former advisor to the executive board, Clingendael Institute (The Netherlands Institute of International Relations) and an economist who has focused on climate change

Dr. Lee C. Gerhard, senior scientist emeritus, University of Kansas, past director and state geologist, Kansas Geological Survey

Dr. Asmunn Moene, past head of the Forecasting Centre, Meteorological Institute, Norway

Dr. August H. Auer, past professor of atmospheric science, University of Wyoming; previously chief meteorologist, Meteorological Service (MetService) of New Zealand

Dr. Vincent Gray, expert reviewer for the IPCC and author of The Greenhouse Delusion: A Critique of 'Climate Change 2001,' Wellington, N.Z.

Dr. Howard Hayden, emeritus professor of physics, University of Connecticut

Dr Benny Peiser, professor of social anthropology, Faculty of Science, Liverpool John Moores University, U.K.

Dr. Jack Barrett, chemist and spectroscopist, formerly with Imperial College London, U.K.

Dr. William J.R. Alexander, professor emeritus, Dept. of Civil and Biosystems Engineering, University of Pretoria, South Africa. Member, United Nations Scientific and Technical Committee on Natural Disasters, 1994-2000

Dr. S. Fred Singer, professor emeritus of environmental sciences, University of Virginia; former director, U.S. Weather Satellite Service

Dr. Harry N.A. Priem, emeritus professor of planetary geology and isotope geophysics, Utrecht University; former director of the Netherlands Institute for Isotope Geosciences; past president of the Royal Netherlands Geological & Mining Society

Dr. Robert H. Essenhigh, E.G. Bailey professor of energy conversion, Dept. of Mechanical Engineering, The Ohio State University

Dr. Sallie Baliunas, astrophysicist and climate researcher, Boston, Mass.

Douglas Hoyt, senior scientist at Raytheon (retired) and co-author of the book The Role of the Sun in Climate Change; previously with NCAR, NOAA, and the World Radiation Center, Davos, Switzerland

Dipl.-Ing. Peter Dietze, independent energy advisor and scientific climate and carbon modeller, official IPCC reviewer, Bavaria, Germany

Dr. Boris Winterhalter, senior marine researcher (retired), Geological Survey of Finland, former professor in marine geology, University of Helsinki, Finland

Dr. Wibjorn Karlen, emeritus professor, Dept. of Physical Geography and Quaternary Geology, Stockholm University, Sweden

Dr. Hugh W. Ellsaesser, physicist/meteorologist, previously with the Lawrence Livermore National Laboratory, Calif.; atmospheric consultant.

Dr. Art Robinson, founder, Oregon Institute of Science and Medicine, Cave Junction, Ore.

Dr. Arthur Rorsch, emeritus professor of molecular genetics, Leiden University, The Netherlands; past board member, Netherlands organization for applied research (TNO) in environmental, food and public health

Dr. Alister McFarquhar, Downing College, Cambridge, U.K.; international economist

Dr. Richard S. Courtney, climate and atmospheric science consultant, IPCC expert reviewer, U.K.

# # #

 

One Midwestern Senate Democrat who serves on the Environment and Public Works Committee stated recently in a speech, “If we hope to strengthen our security and control our own foreign policy, we can offer no less of a commitment to energy independence.” In typical fashion, the rhetoric of Senate Democrats fails to match their voting records on the Senate floor and in the Committee hearing rooms. 

Fact: Democrats consistently obstruct sound, realistic solutions that would reduce America’s dependence on foreign energy sources. 

Case in point: S. 1772, the Gas PRICE Act. 

Supported by the National Association of Counties (NACo) and the National Conference of State Legislatures (NCSL), the Gas PRICE Act would expand the nation’s refining capacity without changing environmental law, would respect the critical state-federal balance, and would significantly enhance the mid- and long-term energy security of our country. Yet Senate Democrats placed partisan politics over energy security by criticizing and ultimately voting against the bill. 

Instead, the committee’s Democrats offered and voted unanimously for an amendment that would have placed the Environmental Protection Agency in charge of designing, building and operating oil refineries at taxpayer expense – effectively socializing gas production in the United States. The Committee appropriately rejected this approach on a straight party line vote of 10-8. 

The two votes by Senate Democrats on the EPW Committee are far more telling about their alleged commitment to improving our nation’s security and commitment to energy independence than the empty rhetoric contained in one or two speeches.

 

 

 

Despite the assurance from the chairman of the Senate Energy and Natural Resources Committee that no climate change legislation would be forthcoming from his committee this year, some on Capitol Hill appear eager for another legislative battle over implementing mandatory controls on carbon dioxide. One Senate Democrat requested that the Energy Information Administration (EIA) analyze elements of a proposal floated by the non-governmental National Commission on Energy Policy (NCEP) in 2004, and the results, released last week, are not good for the U.S. economy.

Fact: According to EIA’s analysis, energy prices would increase dramatically over time and the United States would suffer a significant loss in GDP.

Impacts on Consumer Spending and GDP

EIA:

The higher delivered energy prices in the Cap-Trade cases lowers real output for the economy. They reduce energy consumption, but also indirectly reduce real consumer spending (due to lower purchasing power) for other goods and services. The lower aggregate demand for goods and services in the Cap-Trade cases results in lower real GDP relative to the reference case (Figure 29). Relative to the reference case, total discounted real GDP over the 2010 to 2030 time period ranges from $244 billion to $800 billion (0.10 to 0.32 percent) lower in the Cap-Trade cases. Over the same time period, discounted real consumer spending is between $248 billion and $772 billion (0.15 to 0.46 percent) lower than in the reference case in the Cap-Trade cases. (p.35)Higher Coal and Motor Gasoline Prices 

EIA: 

For example, delivered coal prices, including the costs of holding GHG emission permits, are between 51.9 percent and 156.8 percent higher in 2020 and between 57.4 percent and 305.6 percent higher in 2030. Motor gasoline prices are $0.06 per gallon to $0.19 per gallon (3.0 percent to 9.3 percent) higher in 2020 and $0.08 per gallon to $0.41 per gallon (3.7 percent to 18.9 percent) higher in 2030. (p. vii) 

Reduced Coal Production

EIA:

Relative to the reference case, coal generation is projected to be between 4.8 percent and 27.2 percent lower in 2020 and between 15.8 percent and 64.5 percent lower in 2030. In the two less stringent program cases, coal generation still grows between 2004 and 2030, though at a slower rate than in the reference case. In the two most stringent program cases, coal generation in 2030 is expected to be between 9.5 and 39.2 percent below the 2004 level. New coal plants with carbon capture and sequestration equipment are added in these two cases, but their generation is not large enough to offset the impacts of coal plant retirements and lower generation from the remaining coal plants. (p. vii-viii)

Impacts on Consumer Price Index (CPI) for Energy and All-Urban CPI

EIA:

Relative to the reference case, the consumer price index for energy (CPI-Energy) in 2020 ranges from 4.6 percent to 11.7 higher in the Cap-Trade cases (Figure 27). By 2030, this difference grows to between 5.9 percent and 25.2 percent higher than in the reference case. These higher energy prices in the Cap-Trade cases contribute to increases in the All-Urban Consumer Price Index (CPI), a measure of aggregate consumer prices in the economy. In the Cap-Trade cases, the CPI is between 0.6 percent and 2.6 percent higher than in the reference case in 2030. (p. 33-34)

 

 

In Case You Missed It…
The Patriot-News (Harrisburg, Penn.)
Open Yucca Mountain
March 10, 2006 Described as “the most studied real estate on the planet,” a nuclear repository inside Nevada’s Yucca Mountain should be opened without further delay, according to the majority staff of the Senate Committee on Environment and Public Works. A 1982 law directed the Department of Energy to provide a final resting place for highly radioactive spent fuel rods from nuclear reactors no later than Jan. 31, 1998. Current projections suggest the ear- liest the waste could be placed in the facility is 2015, and only then if it passes the regulatory hurdles still to come and is fully funded. That puts the project, which is critical if there’s to be any expansion of nuclear power in this country, 17 years behind schedule. Whatever one’s views on nuclear power, the government needs to make more timely determinations than this on key issues or the nation will never be able to confront the looming energy emergency. … Yucca Mountain may not be the ideal solution for dealing with the nuclear waste issue, but it is by far the best one now available. The government simply needs to get on with doing it. Click here for the full text of the editorial.

Open Yucca Mountain

Colorado Farm Bureau president Alan Foutz, testifying before the United States Senate Subcommittee on Fisheries, Wildlife, and Water July 15, 2005, related the remarkable story of farmers and ranchers working cooperatively with government to recover the mountain plover. In 1999, this small shorebird, found in the western Great Plains, faced being listed as an endangered species. At that time, limited scientific information was available on the species. Facing severe effects on their livelihoods, landowners recognized the need for more scientific information. Mr. Foutz testified that the Colorado Farm Bureau entered into an agreement with the Colorado Division of Wildlife, the Fish and Wildlife Service, Rocky Mountain Bird Observatory and the Nature Conservancy to open their lands to inventory and study of mountain plovers. The result, he explained, was a three-year study of movements, locations and nesting behavior of mountain plovers on agricultural lands. Colorado Farm Bureau members provided access to more than 300,000 acres of their private lands for the study. Participation was strictly voluntary. Farm Bureau members permitted access to their lands contributed their time as field volunteers to the research effort.

Mr. Foutz indicated that: 

Some of the results were surprising. Researchers found that rather than destroying habitat, agricultural activity actually provided important nesting habitat for the species, and many of the agricultural practices that would have been restricted under an ESA listing were actually beneficial for the plovers. One aspect of the study found higher nesting success on cultivated agricultural lands than on native rangelands. Mountain plovers were still at risk from farm machinery plowing inhabited fields. Farmers are more than willing to avoid nests, but they often cannot see nests while operating large machinery. To remedy that situation, the Farm Bureau and the Rocky Mountain Bird Observatory developed a unique program to allow farmers to call a toll-free number 72 hours before plowing. The Observatory would send someone to survey the field and flag plover nests, allowing farmers to avoid flagged nests.  

Fact: The mountain plover success story would not have been a success if the plover has already been listed. As Mr. Foutz explained:  

This solution would not have been available to us if the mountain plover had already been listed. Under the ESA, once a species is listed, Section 9 – taking prohibitions – and Section 7 – consultation requirements – impose restrictions that stifle the kind of creative solutions that we employed to assist the mountain plover. Furthermore, had the mountain plover already been listed, we would not have been able to develop the scientific knowledge about the plover that could guide in its recovery. The same stereotype about agricultural lands encroaching on plover habitat would have been perpetuated upon listing, to the detriment of farmers and plovers alike.

The mountain plover success story in Colorado demonstrates the need for modernizing the Endangered Species Act. This success underscores the importance of cooperation between landowners and government and the need for improved science. Landowners, conservation groups, and government agencies worked together in the best interests of the mountain plover, and in doing so, demonstrated ways in which aspects of the current law can be improved.

 

 

Fact of the Day: Friday, March 3, 2006 Increasing Supplies Is the Best Solution for Relieving Heating Fuel Costs for Disadvantaged Americans Northeasterners claim there is a need for increased spending on the Low-Income Home Energy Assistance Program (LIHEAP) program to meet the needs of disadvantaged Americans during the winter months. Yesterday, the Senate voted in favor of waiving the Budget Act with regard to S. 2320, the pending LIHEAP bill currently being debated on the Senate floor. Under S. 2320, which changes the fiscal year for LIHEAP funding set under the Deficit Reduction Act of 2005 from FY 2007 to FY 2006, a number of states with qualifying households, particularly those in the southern and western regions of the United States, would lose a significant portion of their LIHEAP funding. Fact: Spending more on LIHEAP will not resolve the long-term problem of high heating fuel costs that challenges disadvantaged Americans every winter. Increasing supplies will. In Massachusetts, the siting of a liquefied natural gas (LNG) terminal, recently approved by the Federal Energy Regulatory Commission (FERC), has been consistently blocked. This new facility would help increase fuel supplies in the Northeast, and is estimated to result in a 20% reduction in the wholesale price of natural gas in the region. The latest delay comes in the form of a SAFETEA provision, authored by two Massachusetts House Democrats, intended to keep a bridge originally designated for demolition open, effectively blocking access to the terminal from the Taunton River. Openings of other facilities in the region have been delayed, as well, reducing the opportunities for increased supplies that would translate to lower costs for Northeast consumers.