Petroleum and Natural Gas Watch
by Michael Vickerman, RENEW Wisconsin
July 27, 2007, Vol. 6, Number 9
Of all the issue areas that Congress dives into from time to time, none reveals the inability of our legislative branch to fashion an internally consistent national policy quite like energy. The usual items in an energy bill--tax credit extensions, fuel subsidies, fresh regulatory requirements (and loopholes), new rules on offshore drilling, etc.—are designed to reward specific industries and influential constituencies. This year’s energy bill promises to follow that timeworn path left by Congresses of yesteryear.
But an energy bill has to be more than the sum of its subsidies to constitute effective policy. This is especially true as we enter a time of growing resource and environmental limits that threaten to bite us in the collective behind if we don’t curb our profligate consumption of energy.
Now is not the time to continue subsidizing every form of energy that can be produced in the United States, as the current Congress seems intent on doing. In previous bills, Congress has taken great pains to make sure that every energy constituency—coal, oil, nuclear or renewables--gets its fair share of the federal pie, regardless of need or environmental impact. This is the cheap energy paradigm at work—promoting economic growth by artificially lowering energy prices.
But while this paradigm may have been defensible before U.S. oil output reached its maximum in 1970, it has no place in today’s energy-constrained world. Artificially lowering the cost of all energy sources will not only encourage waste and overconsumption, it will hasten the arrival of that traumatic day when the flow of cheap oil and natural gas cannot meet the demands of a hypermobile society.
It’s no secret that Congress lacks the stomach for offending powerful energy lobbies like Big Coal. But it’s simply not possible to institute policy changes, especially those intended to reduce carbon dioxide discharges into the atmosphere, without picking a fight with the coal industry, the electric utilities, and what’s left of the U.S. automotive industry. Therefore, if Big Coal pronounces itself satisfied with the energy bill’s contents when it is passed, you can be certain that Congress declined to incorporate any provisions that would cause coal’s share of the energy pie to shrink, such as a carbon tax or renewable feed-in tariffs.
What makes the United States singularly incapable of producing a coherent energy policy aimed at cutting energy consumption and using low-carbon alternatives to fossil fuels? I believe there are three factors explaining this lamentable state of affairs. The first is that your average American citizen has the energy IQ of beach sand, and, in this regard, your average Member of Congress is the mirror image of his or her constituents. For proof, I would direct your attention to Sen. Chuck Schumer of New York, who regularly appears on news programs to suggest that gasoline is overpriced at $3.00 per gallon and that motorists are being fleeced by dastardly oil companies.
Actually, at that price gasoline is a steal, and it would be so even at $4.00—the amount Canadians pay--or $5.00. Packing 125,000 Btu’s of energy, a gallon of gas will power the average car 25 miles, yet it costs less on a volumetric basis than milk, apple juice, Evian, coffee from Starbucks, Mountain Dew, Listerine, and Red Bull. Try getting that performance with a gallon of Gatorade in your tank. It will set you back $10 and you still wouldn’t be able to back your car out of the garage.
It should be noted that retail gasoline prices in Germany are the equivalent of $7.00 per gallon, yet its economy remains healthy. Why is that? Because Germany, unlike the underachieving U.S., has a national energy policy designed to transition the nation smoothly into a post-fossil fuel energy environment. By taxing fossil energy and providing long-term price support for wind and solar electricity production, the Germans are plowing today’s wealth into building up a sustainable energy system that can withstand the future economic dislocations resulting from Peak Oil and climate change.
Indeed, no other country has made as much progress as Germany in building up a renewable energy infrastructure for delivering low-carbon electricity to homes, businesses, and rail networks. But other countries that lack domestic supplies of fossil energy, like Spain, the Netherlands and Denmark, are also moving aggressively to harness their renewable resource base. They too are light years ahead of the United States in this regard.
A second problem confronting policymakers is the unequal distribution of energy resources across this vast country of ours. A handful of coal-producing states—West Virginia and Wyoming come to mind--are net fossil energy exporters, and will view with hostility any policy proposal that will place limits on energy extraction within their borders. Their power is magnified by the markets they serve, which include large swaths of the Midwest and South.
On the other side of the coin are the West Coast states, Florida and New England, which are populous regions that which have no domestic coal interests to protect. Nor does the automotive industry have a big presence in these states. Not having to appease Big Coal or Big Auto enables state governments in these regions to plot a more aggressive course toward achieving emissions reductions and fuel diversity goals, as is being done in California and Florida.
One would expect members of Congress to promote the principal energy industries in their region. This predisposes them to enter into strategic alliances with other members representing different energy interests, usually of the “I’ll watch your back if you’ll watch mine” variety. Though these alliances are necessary for lubricating the deal-cutting and building support for the entire package, often it comes at the expense of public policy objectives.
Indeed Congress is institutionally incapable to pass a comprehensive energy bill that attempts to diversify the nation’s energy resource base and scale back its carbon footprint unless it contains elements that work in the opposite direction (e.g., gasifying coal and expanding offshore drilling).
Further complicating matters is the very nature of the U.S. Senate itself, a body organized to magnify the power of individual states to block “national interest” initiatives from changing the status quo. Each state is equally represented in the Senate, no matter how populous. And Senate tradition grants committee chairpersons enormous deference to bottle up or water down legislation that might impose unwanted changes on the states they represent.
Another Senate tradition, the right of unlimited debate, is enforced by a rule that expressly allows a minority of senators to thwart the will of the majority. To shut off debate on a measure, especially one in which powerful economic forces and regional interests are pitted against each other, bill proponents have to line up not 51 but 60 votes. Under the rule, debate continues even if 59 senators vote in favor of ending it and only one votes against the motion.
The energy bill passed by the Senate in June came tantalizingly close to incorporating a 10-year tax package that would have raised $29 billion, mostly from oil and gas companies and redirected it toward renewable energy development. The tax package was designed to be self-supporting; that is, it would not have trigged additional borrowing to underwrite the pro-renewable energy incentives.
Would such a tax package raise prices at the pump? A little. But remember too that $29 billion equates to about nine months’ profit for Exxon Mobil alone. And, from a social equity perspective, it’s always better to base energy subsidies and incentives on a real-time transfer of wealth than to saddle future taxpayers with even greater levels of indebtedness.
Nonetheless, the oil and gas companies objected to the closing of their favored tax loopholes, and they called upon their senatorial friends in the Oil Patch states to kill off this measure. To accomplish this, these senators made common cause with their counterparts from the Southeast and Rocky Mountain states, where Big Coal is very strong. Thought this minority bloc was outvoted 57-36, they managed to prevent the tax package from being attached to the larger energy package. In any other legislative venue, losing a vote by a margin of 21 would be considered a stinging defeat, but on the floor of the U.S. Senate, it counts as a win.
In his most recent installment of Lyndon Johnson’s biography, author Robert Caro points out that there have been only a few periods in the nation’s history where the Senate lowered the floodgates and allowed legislation reflecting the popular will to come washing through its portals. Those rare instances resulted from significant political realignments that put one party with an activist agenda firmly in power.
The closest the United States came to a coherent national energy policy was during the mid-to-late 1970’s. During that period there was a prevailing sense of anxiety over the nation’s energy security, and both the legislative and the executive branches responded to the national mood with decisive actions. In a five-year period Congress passed laws creating automobile fuel efficiency standards, prohibiting new gas-fired power plants, and requiring utilities to purchase electricity generated by independent entities. By the debased standards of current governance, those were amazingly productive years.
However, once the price oil dropped in the 1980’s, the urgency of the previous decade evaporated, and successive administrations began dismantling the policy initiatives adopted in the Ford and Carter years. When the Reagan Administration lowered fuel efficiency standards in 1986, Chrysler Corporation chairman Lee Iacocca said: “We are about to put up a tombstone ‘Here lies America’s energy policy.’”
It would take nothing short of a sea change to overcome Congressional inertia and recover the ground lost in the last 25 years or so. But though the prospects for a truly coherent national energy policy are improving -- and the need has never been greater -- both the citizenry and the current Congress are far too complacent to entertain changes that might involve belt-tightening and discipline. Given the current political dynamic, it would be unrealistic to expect this Congress, with its narrow majorities, to be the one that jump-starts the federal government into meaningful action.
Yes, we will see some progress on the energy front this year and next, but they will represent the sum of state government initiatives undertaken to counter the policy vacuum that persists at the federal level.
Sources:
Caro, Robert A., Master of the Senate: The Years of Lyndon Johnson, 2002, Alfred A. Knopf Inc., New York.
National Environmental Trust: History of Fuel Standards, One Decade of Innovation, Two Decades of Inaction. URL: http://www.net.org/documents/cafe_history.pdf
RENEW Wisconsin is a nonprofit organization that acts as a catalyst to advance a sustainable energy future through public policy and private sector initiatives. Michael Vickerman’s commentaries also posted on RENEW’s Web site, RENEW’s blog, and Madison Peak Oil Group’s blog.
In April, Kip Hawley, the head of the Transportation Security Administration (TSA), invited me to Washington for a meeting. Despite some serious trepidation, I accepted. And it was a good meeting. Most of it was off the record, but he asked me how the TSA could overcome its negative image. I told him to be more transparent, and stop ducking the hard questions. He said that he wanted to do that. He did enjoy writing a guest blog post for Aviation Daily, but having a blog himself didn't work within the bureaucracy. What else could he do?This interview, conducted in May and June via e-mail, was one of my suggestions.
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The corrosive effects of that trend were detailed in The Times yesterday by Alex Berenson, who examined the fallout of the Orwellian-named American Jobs Creation Act of 2004. Pitched by tax-axing lawmakers as a way to generate cash for new hiring, it allowed American companies to bring foreign-held profits back to the United States in 2005 at a discount of up to 85 percent off the normal tax rate. Some 100 companies repatriated about $300 billion, avoiding about $90 billion in taxes.Our good Senators, Russ Feingold and Herb Kohl supported this massive giveaway. RentierBut instead of hiring more workers, many of the participating multinationals had mass layoffs, especially drug companies. Pfizer, the world’s largest drug company, repatriated $36 billion at the discounted rate, while laying off 8,000 employees in 2006 and announcing layoffs of 10,000 more. Eli Lilly and Schering-Plough also repatriated billions while laying off thousands. Technology companies did the same. Hewlett-Packard, for example, repatriated $14.5 billion in 2005 and laid off 14,500 workers. In some instances, the corporate tax savings were more than enough to cover the severance costs and other expenses of the layoffs.
Ron Paul has been getting some attention lately:
Paul the Apostate.
Is this would-be president brave or crazy?RON PAUL, a libertarian Republican congressman from Texas, likes to say what he thinks. And among the things he thinks is that the census is a violation of privacy. He has opted out of the congressional pension programme. He claims never to have voted for a tax increase, or for an unbalanced budget, or for a congressional pay rise and never to have gone on a congressional junket. He wants to return to the gold standard. Most notably, he strongly opposes the Iraq war and has from the beginning.
Mr Paul is running for president. And according to the latest report from the Federal Election Commission, he is in better financial shape than John McCain, once the front-runner. Mr Paul raised $2.4m in the second quarter of the year, has roughly that much on hand, and has no debts. Mr McCain raised far more money but spent it just as fast, ending the quarter with $3.2m on hand but with $1.8m in debt.
Paul’s opposition to the war in Iraq did not come out of nowhere. He was against the first gulf war, the war in Kosovo and the Iraq Liberation Act of 1998, which he called a “declaration of virtual war.” Although he voted after Sept. 11 to approve the use of force in Afghanistan and spend $40 billion in emergency appropriations, he has sounded less thrilled with those votes as time has passed. “I voted for the authority and the money,” he now says. “I thought it was misused.”There is something homespun about Paul, reminiscent of “Mr. Smith Goes to Washington.” He communicates with his constituents through birthday cards, August barbecues and the cookbooks his wife puts together every election season, which mix photos of grandchildren, Gospel passages and neighbors’ recipes for Velveeta cheese fudge and Cherry Coke salad. He is listed in the phone book, and his constituents call him at home. But there is also something cosmopolitan and radical about him; his speeches can bring to mind the World Social Forum or the French international-affairs periodical Le Monde Diplomatique. Paul is surely the only congressman who would cite the assertion of the left-leaning Chennai-based daily The Hindu that “the world is being asked today, in reality, to side with the U.S. as it seeks to strengthen its economic hegemony.” The word “empire” crops up a lot in his speeches.
Airliners.net extensive discussion.
The demise of Midwest into AirTran will be a dark day for travelers....
| Tom Patterson: 230K PDFBased on a national survey of 1800 randomly sampled teens, young adults, and older adults, this report examines the amount of daily news consumed by young people. The evidence shows that young Americans are estranged from the daily newspaper and rely more heavily on television than on the Internet for their news. |
The results were especially grim for newspapers. Only 16 percent of the young adults surveyed aged 18 to 30 said that they read a newspaper every day and 9 percent of teenagers said that they did. That compared with 35 percent of adults over 30. Furthermore, despite the popular belief that young people are flocking to the Internet, the survey found that teenagers and young adults were twice as likely to get daily news from television than from the Web.Barry Ritholtz's related post offers some useful comments, including several whose only print subscription is the excellent Economist (I, too read the Economist).
At the LATimes, second quarter revenue was down 10% and cash flow down 27%. In his call for front page ads, Publisher David Hiller noted it was one of the worst “ever experienced” by the paper.
This is an interesting image, taken from a slow boat on the Thu Bon River, just south of Hoi An, during a recent trip to Vietnam.
Australians, Americans? What might be on their minds - the War, friends, travel? Their faces seem to imply many, many words. A few more notes and links on Vietnam can be found here.
THOSE eight daily glasses of water you’re supposed to drink for good health? They will cost you $0.00135 — about 49 cents a year — if you take it from a New York City tap.Or, city officials suggest, you could spend 2,900 times as much, roughly $1,400 yearly, by drinking bottled water. For the extra money, they say, you get the added responsibility for piling on to the nation’s waste heap and encouraging more of the industrial emissions that are heating up the planet.
But trends in American thirst quenching favor the 2,900-fold premium, as the overflowing trash cans of Central Park attest. In fact, bottled water is growing at the expense of every other beverage category except sports drinks. It has overtaken coffee and milk, and it is closing in on beer. Tap, if trends continue, would be next.
Now New York City officials — like the mayors of Minneapolis, Salt Lake City and San Francisco — are campaigning to get people to reverse course and open their faucets instead of their wallets. The city Health Department, mindful of high obesity rates, says water is more healthful than many other, sugar-filled drinks. The city’s Department of Environmental Protection touts its low environmental impact. Both note that it’s practically free (leaving aside those New Yorkers for whom paying extra is a lifestyle choice).
There are now an estimated 137 million internet users in China, second in number only to the United States, where estimates of the current internet population range from 165 million to 210 million. The growth rate of China's internet user population has been outpacing that of the U.S., and China is projected to overtake the U.S. in the total number of users within a few years.The influx of tens of millions of new online participants each year can be expected to have far-reaching consequences for the Chinese population, for China itself and for the larger world. At the very least, the internet will offer ever greater numbers of Chinese a much more sophisticated information and communications world than the one they currently inhabit. And because the Chinese share a single written language, despite the multiplicity of spoken tongues, it could have a unifying effect on the country's widely dispersed citizenry. An expanding internet population might also increase domestic tensions that could spill over into China's relations with the U.S. and other countries while the difference between Chinese and Western approaches to the internet could create additional sore points over human rights and problems with restrictions on non-Chinese companies.
It's been 10 years since the blog was born. Love them or hate them, they've roiled presidential campaigns and given everyman a global soapbox. Twelve commentators -- including Tom Wolfe, Newt Gingrich, the SEC's Christopher Cox and actress-turned-blogger Mia Farrow -- on what blogs mean to them.Notwithstanding the words of Tom Wolfe, who puts an elegant boot, below, into the corpus of bloggers, there are many more people today who would read blogs than disparage them.
The consumption of blogs is often avid and occasionally obsessive. But more commonly, it is utterly natural, as if turning to them were no stranger than (dare one say this here?) picking one's way through the morning's newspapers. The daily reading of virtually everyone under 40 -- and a fair few folk over that age -- now includes a blog or two, and this reflects as much the quality of today's bloggers as it does a techno-psychological revolution among readers of news and opinion.
We are approaching a decade since the first blogger -- regarded by many to be Jorn Barger -- began his business of hunting and gathering links to items that tickled his fancy, to which he appended some of his own commentary. On Dec. 23, 1997, on his site, Robot Wisdom, Mr. Barger wrote: "I decided to start my own webpage logging the best stuff I find as I surf, on a daily basis," and the Oxford English Dictionary regards this as the primordial root of the word "weblog."
Via Airliners.net:
To increase the travel comfort on intercontinental night flights, Lufthansa is thinking about a separate sleeping area within Economy Class. There, you would have the possibility to sleep in beds with an angle of 180� (Full Flat). This option could be booked instead of a seat.In the future, when booking a night flight with Lufthansa from Johannesburg to Frankfurt, would you generally be interested in booking into the sleeping area instead of a seat in Economy Class?
An interview with Jeffrey Pfeffer, author of What Were They Thinking?: Unconventional Wisdom About Management:
Question: What do companies do stupid things?
Answer: First, they ignore feedback effects. There has recently been a lot of interest, and apparent surprise, that programmers in India now cost a lot and their wages have been rising rapidly. Did people forget supply and demand? If everyone moves work to India, what did companies think would happen? Or, to take another example, when companies cut their retirement benefits, and people can not afford to retire, guess what, they won’t.Second, companies often ignore the interdependence or connections between actions in one part and those in another. So, even as some departments are trying to cut the costs of benefits, others are worried about recruiting and retaining enough qualified people. Maybe the parts should work together.
Third, many companies presume that incentives are the answer to everything, and have a very mechanistic model of human behavior. That is also incorrect.
ANOTHER DAY, another deal.Thanks to online coupons, price-comparison search engines and reward memberships, savvy shoppers can pay less than full price on any day that ends in "y." But depending on what you're planning to buy, some days of the week may yield better bargains than others.
We talked to the experts, and narrowed down the best days of the week to buy certain items
From a story by Alec Luhn in the Wisconsin State Journal:
When he got to what he calls "the mid-life crisis age," Madison resident Jim Taylor, 45, said he figured "Well, I'm going to have to either buy a sports car or do something.'"For Taylor, that something was installing an 8.4-kilowatt solar panel array on his roof in April -- the largest solar-energy system on a Madison residence.
Although he originally intended to supply only his family's energy needs, he has been selling his excess energy to Madison Gas & Electric the last two months and now could increase his earnings under a new buyback rate proposed by the utility.
Under the proposal, Taylor would sell all of his energy to MGE at a rate of 25 cents per kilowatt-hour and buy back the portion he needs from the utility's overall pool of renewable energy at about 10 cents per kilowatt-hour.
And Yamamoto may also earned the day's chuckle award for his quip about one of the innovations ANA brought to the 787's design. The airline teamed with Toto to create commercial aviation's first bidet. The subject brings some amused reactions from Boeing executives, but they've included it in their furnishings catalog.Much more on the new 787 here."We will be the first airline to refresh the parts (of people) that other airlines cannot reach," said Yamamoto.
Healing ailing rivers is Mark Hill's specialty. So when the tall and lean ecologist visits one of his works in progress, he's prepared to paddle a long and sinuous route to assess the health of his watery patient.Highway 395 provides a gorgeous drive through the Eastern Sierra Nevada. It's also an interesting place to observe the effects of LA's ongoing thirst.In this case, his charge is the Lower Owens River, a 62-mile-long stretch left essentially dry in 1913 after its flows of Sierra snowmelt were diverted into the Los Angeles Aqueduct. After decades of political bickering, water was directed back into the riverbed in December, launching the largest river restoration effort ever attempted in the West.
Ecologists knew the Lower Owens would come back to life. But how fast would it rebuild itself? Which wildlife would appear first? Which plants?
Scientists have been surprised by some of the early answers, and to flesh out the details Hill recently took his first survey by kayak of the river. Hill, the lead scientist in the Lower Owens River Project, stepped into a blue inflatable 16-foot kayak, said "Let's go," and was soon scooting through the channel that cuts across the Owens Valley.
A dream landscape emerged as our dinghy sped through turquoise waters toward the uninhabited South Seas islet of Tapu. Here, on a triangular speck of sand and coconut palms at the bottom of the world, red hibiscus, white gardenia and yellow plumeria blossoms were strewn on the water at land's edge. As we stepped from the boat, a sommelier offered flutes bubbling with Dom Perignon. Behind him, china and crystal sparkled on a dining table positioned in shallow water at the edge of the lagoon. A French sous-chef, wearing a tall white toque, worked nearby, partly hidden behind a grill disguised by palm fronds.It was just another day in paradise for the staff of the St. Regis Resort, Bora Bora, where producing dream scenarios is part of the job. On this April afternoon, staffers were helping a couple celebrate an anniversary, and I had tagged along.
New Hampshire Gov. John Lynch last week signed into law a bill that forbids New Hampshire government agencies from complying with the controversial federal national identification act, or Real ID bill.
The New Hampshire Legislature had overwhelming passed the bill this past spring and handed it off to Lynch, who signed it on June 27.
"Real ID is intended to make us all safer, which I think we can all agree is a laudable goal," said Lynch in a statement. "However, I strongly believe Real ID's proposed haphazard implementation and onerous provisions would have the exact opposite effect. The federal government obviously did not think this burdensome system through and that is why we in New Hampshire are right to reject it."
Keith Martin posted some beautiful VR scenes from Turkey.
This is why, after one crack at it, I won't be doing a lot of small-airplane flying in China any more. Here is how a Cirrus SR-22 got fueled up at the main airport in Changsha, capital of Hunan province. (Man in the truck is Peter Claeys, intrepid Cirrus salesman for China. Other men, including the luckless one working the siphon, are involved in local aviation.)More on "free flight", here.
Interesting words from Newt Gingrich:
The country is at a crossroads, a different kind of place from where we've been before. The special interests seem more reactionary and entrenched than ever, the bureaucracies much larger. We need to marshal the courage to change, and we need to understand what needs changing.Two books guide my thoughts these days. One is " Testimony: France in the Twenty-first Century," by the new French president, Nicolas Sarkozy. The second is American: " The Forgotten Man: A New History of the Great Depression," by Amity Shlaes. Together they form a map for the crossroads.
France has a reputation as a country averse to change. But President Sarkozy translated his general exhortation about the need to change and the importance of work into a simple and direct policy proposal: All overtime will be tax-free.
A friend is heading home on leave from Iraq today. I thought I'd write him a note—then I decided to publish it here:Dear _____, I am at an uncharacteristic loss for words. Hence, I don't know what to say other than "Thank you." As we both know, the war is a contentious issue here in the Homeland. Many think we must indeed stay the course; at least as many think the war is a reckless, counterproductive disaster.
Classic barge: The Oldsmobile 98 Convertible.
According to studies done on shopping carts, more than 60 percent of them are harboring coliform bacteria (the sort more often associated with public toilet seats). “These bacteria may be coming from raw foods or from children who sit in the carts,” says Chuck Gerba, Ph.D., a microbiologist at University of Arizona. “Just think about the fact that a few minutes ago, some kid’s bottom was where you are now putting your broccoli.” According to studies done by Gerba and his colleagues at University of Arizona, shopping carts had more bacteria than other surfaces they tested—even more than escalators, public phones and public bathrooms. To avoid picking up nasty bacteria, Gerba recommends using sanitizing wipes to clean off cart handles and seats, and to wash your hands after you finish shopping.
Amazingly small original 
