Energy Fantasyland

[philunderwood]

Energy Fantasyland

By Victor Davis Hanson

www.JewishWorldReview.com |

Gas is well over $4 a gallon in most places in California -- and soaring elsewhere as well. But are such high energy prices good or bad?

That should be a stupid question. Yet it is not when the Obama administration has stopped new domestic offshore oil exploration in many American waters, curbed oil leases in the West, and keeps oil-rich areas of Alaska exempt from drilling. Last week, President Obama went to Brazil and declared of that country's new offshore finds: "With the new oil finds off Brazil, President (Dilma) Rousseff has said that Brazil wants to be a major supplier of new stable sources of energy, and I've told her that the United States wants to be a major customer, which would be a win-win for both our countries."

Consider the logic of the president's Orwellian declaration: The United States in the last two years has restricted oil exploration of the sort Brazil is now rushing to embrace. We have run up more than $4 trillion in consecutive budget deficits during the Obama administration and are near federal insolvency. Therefore, the United States should be happy to borrow more money to purchase the sort of "new stable sources of energy" from Brazil's offshore wells that we most certainly will not develop off our own coasts.

It seems as if paying lots more for electricity and gas, in European fashion, was originally part of the president's new green agenda. He helped push cap-and-trade legislation through the House of Representatives in 2009. Had such Byzantine regulations become law, a recessionary economy would have sunk into depression. Obama appointed the incompetent Van Jones as "green jobs czar" -- until Jones' wild rantings confirmed that he knew nothing about his job description "to advance the administration's climate and energy initiatives."

At a time of trillion-dollar deficits, the administration is borrowing billions to promote high-speed rail, and is heavily invested in the federally subsidized $42,000 Government Motors Chevy Volt. Apparently the common denominator here is a deductive view that high energy prices will force Americans to emulate European centrally planned and state-run transportation.

That conclusion is not wild conspiracy theory, but simply the logical manifestation of many of the Obama administration's earlier campaign promises. Secretary of Energy Steven Chu -- now responsible for the formulation of American energy policy -- summed up his visions to the Wall Street Journal in 2008: "Somehow we have to figure out how to boost the price of gasoline to the levels in Europe." I think Chu is finally figuring out the "somehow."

A year earlier, Chu was more explicit in his general contempt for the sort of fuels that now keep Americans warm and on the road: "Coal is my worst nightmare. … We have lots of fossil fuel. That's really both good and bad news. We won't run out of energy but there's enough carbon in the ground to really cook us."

In fairness to Chu, he was only amplifying what Obama himself outlined during the 2008 campaign. Today's soaring energy prices are exactly what candidate Obama once dreamed about: "Under my plan of a cap-and-trade system, electricity rates would necessarily skyrocket." Obama, like Chu, made that dream even more explicit in the case of coal "So, if somebody wants to build a coal plant, they can -- it's just that it will bankrupt them, because they are going to be charged a huge sum for all that greenhouse gas that's being emitted."

There are lots of ironies to these Alice-in-Wonderland energy fantasies. As the public become outraged over gas prices, a panicked Obama pivots to brag that we are pumping more oil than ever before -- but only for a time, and only because his predecessors approved the type of drilling he has stopped.

The entire climate-change movement, fairly or not, is now in shambles, thanks to serial scandals about faked research, consecutive record cold and wet winters in much of Europe and the United States, and the conflict-of-interest, get-rich schemes of prominent global-warming preachers such as Al Gore.

The administration's energy visions are formulated by academics and government bureaucrats who live mostly in cities with short commutes and have worked largely for public agencies. These utopians have no idea that without reasonably priced fuel and power, the self-employed farmer cannot produce food. The private plant operator cannot create plastics. And the trucker cannot bring goods to the consumer -- all the basics like lettuce, iPads and Levis that a highly educated, urbanized elite both enjoys and yet has no idea of how a distant someone else made their unbridled consumption possible.

[philunderwood]

www.qando.net/?cat=18


Obama’s so-called “energy policy” speech

March 31st, 2011 | Author: Bruce McQuain

I hesitated putting "policy” in the title because it really isn’t a policy. It’s is a series of tired claims, mostly incorrect, unsubstantiated or flat out untrue. There’s also a good bit of dissembling in the speech. Examples:

Now, here’s the thing -– we have been down this road before. Remember, it was just three years ago that gas prices topped $4 a gallon. I remember because I was in the middle of a presidential campaign. Working folks certainly remember because it hit a lot of people pretty hard. And because we were at the height of political season, you had all kinds of slogans and gimmicks and outraged politicians — they were waving their three-point plans for $2 a gallon gas. You remember that — “drill, baby, drill” — and we were going through all that. (Laughter.) And none of it was really going to do anything to solve the problem. There was a lot of hue and cry, a lot of fulminating and hand-wringing, but nothing actually happened. Imagine that in Washington. (Laughter.)

The truth is, none of these gimmicks, none of these slogans made a bit of difference. When gas prices finally did fall, it was mostly because the global recession had led to less demand for oil. Companies were producing less; the demand for petroleum went down; prices went down. Now that the economy is recovering, demand is back up. Add the turmoil in the Middle East, and it’s not surprising that oil prices are higher. And every time the price of a barrel of oil on the world market rises by $10, a gallon of gas goes up by about 25 cents.

Consider this bit of nonsense. The man who said it has been in charge of all of this for two years now. And he’s absolutely right – nothing has happened. And while he’s right about the result he’s attempting to wave away, as is his habit. It is a serious problem that we have the ability to affect. But it can only be affected if we do something that will positively change the balance. Like increase drilling.

So while he has a little fun calling “drill, baby, drill” a “gimmick” it is a much more coherent energy policy than he puts forward. It, at least points to something which will result in more oil and more independence from foreign producers. And, as I understand it, that’s supposedly a goal of his.

Anyway, his posturing then produced this derisive laugh-out-loud moment for me with his next remarks:

The point is the ups and downs in gas prices historically have tended to be temporary. But when you look at the long-term trends, there are going to be more ups in gas prices than downs in gas prices. And that’s because you’ve got countries like India and China that are growing at a rapid clip, and as 2 billion more people start consuming more goods — they want cars just like we’ve got cars; they want to use energy to make their lives a little easier just like we’ve got — it is absolutely certain that demand will go up a lot faster than supply. It’s just a fact.

So here’s the bottom line: There are no quick fixes. Anybody who tells you otherwise isn’t telling you the truth. And we will keep on being a victim to shifts in the oil market until we finally get serious about a long-term policy for a secure, affordable energy future.

Of course it’s a fact if you limit what is supplied to the market. However, given the recoverable resources we have in this country, that fact can be considerably ameliorated by, gee I hate to have to repeat it, but “drill, baby, drill”. Of course if you energy policy is to make war on the American energy sector and clamp down moratoriums on drilling while letting loose the EPA to make everything more expensive through it’s attempted regulation of GreenHouse Gasses (GHG), then not only are there no “quick fixes”, but the bill that will come due the American citizenry is guaranteed to cripple the economy in a lasting way.

We have domestic coal, natural gas and oil resources – recoverable resources – out the wazoo. Enough coal for 400 years at present level. And not just any coal, but high quality coal. In fact we have 28% of the world’s coal. We have natural gas for over a 100 years at present levels and oil for 60 years at present levels. Given that, “drill, baby, drill” sound like more than just a gimmick, doesn’t it?

Then we go on to a blatant untruth:

I talked about reducing America’s dependence on oil when I was running for President, and I’m proud of the historic progress that we’ve made over the last two years towards that goal, and we’ll talk about that a little bit. But I’ve got to be honest. We’ve run into the same political gridlock, the same inertia that has held us back for decades.

We are now importing more foreign oil than we were when Barack Obama took office, primarily because of the moratorium. There has been no – let me say that again, no – “historic” or other “progress” toward that goal. We are, in fact, in worse shape than ever. With the rising demand that Obama notes, keeping domestic oil companies from expanding their operations is simply the worst thing we could do. Yet we see exactly that happening to this day.

So, given that, this isn’t going to happen:

And today, I want to announce a new goal, one that is reasonable, one that is achievable, and one that is necessary.

When I was elected to this office, America imported 11 million barrels of oil a day. By a little more than a decade from now, we will have cut that by one-third. That is something that we can achieve. (Applause.) We can cut our oil dependence — we can cut our oil dependence by a third.

Sorry, under the current regime, that doesn’t have a snowball’s chance of happening.

And that brings us to our second derisive laugh-out-loud moment:

Now, today, we’re working to expedite new drilling permits for companies that meet these higher standards. Since they were put in, we’ve approved 39 new shallow-water permits; we’ve approved seven deepwater permits in recent weeks. When it comes to drilling offshore, my administration approved more than two permits last year for every new well that the industry started to drill. So any claim that my administration is responsible for gas prices because we’ve “shut down” oil production, any claim like that is simply untrue. It might make for a useful sound bite, but it doesn’t track with reality.

Or it could be true, huh Mr. President:

The Energy Department’s Energy Information Administration reports that production in the Gulf of Mexico is in decline, forecasting a decline of 250,000 barrels a day from Gulf production, due partly to the moratorium and restricted permitting. While the annual production figure for 2010 was greater than 2009, EIA’s month-by-month production figures show a peak in May of 2010, and a relatively steady decline since.

So as usual, our transparent President is playing word games with you. As for the 7 deepwater permits issued in recent weeks (funny how those happen to pop out of the pipeline whenever Salazar or Obama is going to make a statement about energy), most of the permits have gone to drilling sites in which the drilling had already been underway and was stopped by the moratorium. New drilling? Not so much.

And how poorly does this President and his administration understand the industry they’re constantly attacking? Not very well at all:

Moreover, we’re actually pushing the oil industry to take advantage of the opportunities that they’ve already got. Right now the industry holds tens of millions of acres of leases where they’re not producing a single drop. They’re just sitting on supplies of American energy that are ready to be tapped. That’s why part of our plan is to provide new and better incentives that promote rapid, responsible development of these resources.

Apparently there is oil under every lease and it is of equal value and all you have to do is stick a drill in the ground and boom, gusher! In fact, here’s the reality:

Companies pay millions of dollars to acquire these leases (each lease costs at least $250,000 and some have gone for more than $100,000,000), further fees for renting the leases and the leases have a finite term. If a company does not produce oil or gas from a lease then they are required to return it to the government. In other words "use it or lose it" is already the law.

These are very successful and sophisticated companies that are engaged in this business and it makes no logical sense for companies to pay millions of dollars to purchase leases, sit on them for 10 years, and then give them back to the government. They make money by supplying the American economy with the energy it needs to grow, not from sitting on assets. The level of capital expenditures by the industry to develop these leases demonstrates their commitment to find oil and gas. For example, the industry spent more than $37 billion (with a B) in capital expenditures to develop deep water Gulf leases issued between 1996 and 2000. In addition they paid more than $4 billion (with a B) in bonus bids to obtain those leases in the first place. With that level of investment, it is hard to argue that the industry is not working hard to develop the leases it owns.

Finally, these arguments simply ignore the basics of the oil and natural gas industry. Companies purchase leases for the right to explore for the resources. You don’t know if a lease actually contains oil or natural gas until you move forward and drill an exploratory well. Companies purchase a large portfolio of leases to give them the greatest opportunity to find oil and natural gas. They work hard to survey and study all of their leases with the hope that they can narrow the list down to a subset that have the best likelihood of actually containing oil or natural gas. However, it is not uncommon for a company to spend $100 million to drill a well and find no oil or natural gas. In fact, companies drill more wells that have no oil or natural gas than wells that actually do.

So again, you see the President of the United States spinning something that just isn’t true to try and cover his administration’s war on the oil and natural gas industry. This is all political grandstanding. It is the use of the bully pulpit to play CYA.

Well, it’s not working.

Finally:

Now, in terms of new sources of energy, we have a few different options. The first is natural gas. Recent innovations have given us the opportunity to tap large reserves –- perhaps a century’s worth of reserves, a hundred years worth of reserves -– in the shale under our feet. But just as is true in terms of us extracting oil from the ground, we’ve got to make sure that we’re extracting natural gas safely, without polluting our water supply.

That’s why I’ve asked Secretary Chu, my Energy Secretary, to work with other agencies, the natural gas industry, states, and environmental experts to improve the safety of this process.

Obama is suddenly a natural gas supporter. Well sorta. He says he is, but if you read carefully what he says above, you can seen the combinati9n of interests he cites – other than the natural gas industry- are a recipe for slow, slow movement. The more current example is what is going on with the oil industry. That is precisely the process he’s outlining for the NG industry and the exploitation of those resources.

Believe it or not, Senate Minority leader Mitch McConnell (R-KY) may have summed up the current administration’s real energy policy best:

Over the past two years, the administration has undertaken what can only be described as a war on American energy. It’s cancelled dozens of drilling leases. It’s declared a moratorium on drilling off the Gulf Coast. It’s increased permit fees. It has prolonged public comment periods. In short, it’s done just about everything it can to keep our own energy sector from growing. As a result, thousands of U.S. workers have lost their jobs, as companies have been forced to look elsewhere for a better business climate.

Consider this: just three of the areas we could tap in Alaska are thought to hold enough oil to replace our crude imports from the Persian Gulf for nearly 65 years. So the problem isn’t that we need to look elsewhere for our energy. The problem is that Democrats don’t want us to use the energy we have. It’s enough to make you wonder whether anybody in the White House has driven by a gas station lately.

Indeed.

And unfortunately, that’s not a laugh-out-loud moment.

~McQ

[philunderwood]

www.qando.net/?cat=9

Employment: Why “government spending” should be shelved in favor of encouraging private investment

June 6th, 2011 | Author: Bruce McQuain

In macro terms its really fairly simple. We have always come out of busts with booms. Wondering what the next boom is going to be and how to help it launch itself is where government should be looking and trying to act – not at deficit funding government make work projects and future energy schemes still some decades from reality.

For instance – a little look into the not to distant future and a scenario that would help us in both the balance of trade and employment, arenas (the latter almost immediately).

But also, we will help to satisfy burgeoning demand for petroleum in Asia, South America and Africa. Yes, the US is an oil importer. But if we import less, that will help to satisfy world demand just as much as if a new exporter appeared on the market. If we import a billion barrels a year (2.74 million barrels a day) less, at current prices that works out to $100 billion off of our huge trade deficit. This could also be a huge engine of job growth. We now have about 2,000 rigs drilling, and more are being added all the time. For each rig there are the roughnecks, the service companies, the drilling pipe and casing producers, the local service providers, etc. It is big business, and growing fast.

Fortunately, we have lots of places to drill, in various shale formations around the country. (It’s not “shale oil” in the classic sense, better to call it, “shale associated oil”). For those who think that Yankee ingenuity is a thing of the past, just look at our oil and gas industry. It serves as a powerful testament to the power of the free enterprise system that a great many people chipping away at the same problem can come up with creative new ways of extracting oil from the earth that a centralized government program of oil production would never (and has never) originated. You don’t see these new drilling techniques coming from Russia, which is still sadly statist in its efforts to exploit natural resources.

We have the resources, we could be exploiting them now (relatively speaking) and have them benefit our economy while we do the pie-in-the-sky energy research the Democrats think is the panacea to all our problems. I’ve never understood their insistence on ‘either/or’ in that regard. Why can’t we do both simultaneously – which seems both logical and would help do exactly what they claim they want – employ Americans.

Timothy Siegel’s point about innovation is well taken as well. One of the reasons we’re moving past the peak oil predictions of the past is because of innovation from private oil companies that is allowing them to extract harder to reach and exploit oil and gas at a reasonable price. We, as a nation, should be encouraging that instead of doing everything in our power to cripple such innovation.

Instead we get solutions like those below from the left. Government should spend money when one of the greatest engines for economic revival is left sitting at idle while the administration figures out how to get more sugar in its gas tank.

It’s freakin’ nuts.

~McQ

[philunderwood]

www.qando.net/?cat=19

A couple of enviro myths and reality

June 7th, 2011 | Author: Bruce McQuain

Myth one – wind power has no down side. Well, except for the fact that wind power needs fossil fuel backup to give it any consistency and thus can be hardly called strictly renewable or “clean energy”.

But in this case, I was thinking more on the endangered species side of things. The assumption is that wind power is an entirely eco-friendly way of generating power. Yeah, not so much if you’re a bird – especially, in the case of California, a golden eagle:

The death count along the ridgelines of the Bay Area’s Altamount Pass Wind Resource Area has averaged 67 a year for three decades.

The 200ft high turbines, which have been operating since the 1980s, lie in the heart of the grassy canyons that are home to one of the highest densities of nesting golden eagles in the US.

‘It would take 167 pairs of local nesting golden eagles to produce enough young to compensate for their mortality rate related to wind energy production,’ field biologist Doug Bell, manager of East Bay Regional Park District’s wildlife programme, told the Los Angeles Times. ‘We only have 60 pairs,’ he added.

Interesting – the enviro-crowd will go to war for some tiny fish no one is heard of to stop a dam or some other project, but when something they mostly support grinds up endangered golden eagles at a rate at which they can’t replace themselves, crickets (endangered crickets, of course). In CA only the Audubon Society is speaking out.

And nationally:

Nationwide, about 440,000 birds are said to be accidentally killed at wind farms each year, as well as thousands more bats. With the government pushing for more wind energy farms, that statistic is likely to rise.

Can’t wait to see what comes of the Cape Wind project off of MA. The toll of birds is sure to rise, and my guess is it will become a favorite hang out for sharks – with the automatic chumming and all.

Myth two – we’re “deforesting” the earth and that is a major reason that the climate is changing and getting warmer (more CO2 generated by man , minus less CO2 capture by forests).

A new study says not so fast:

For years exponents of climate change theories have used images of deforestation to support their cause.

However, the density of forests and woodland across much of the world is actually increasing, according to a respected scientific study.

The change, which is being dubbed the ‘Great Reversal’, could be crucial in reducing atmospheric carbon, which is linked to climate change.

Seems that the density has in fact increased significantly enough to actually reverse what was claimed as irreversible a decade ago:

In countries from Finland to Malaysia, the thickening has taken place so quickly that it has reversed the carbon losses caused by deforestation between 1990 and 2010.

Of course, even if they acknowledge the results of the study, enviro types aren’t happy with the mix of the new density.

Environmentalists expressed concerns, however, that much of the increasing density is driven by huge new monoculture plantations.

In China, an ambitious reforestation programme has added three million hectares to the country’s forests every year over the past decade, but green campaigners believe this is predominantly composed of one species – eucalyptus.

But the study says the density, regardless of species, is having the effect of taking in more carbon that forest were taking in during the previous decade, regardless of species.

The research, carried out by teams from the University of Helsinki and New York’s Rockefeller University, shows that forests are thickening in 45 of 68 countries, which together account for 72 per cent of global forests. Traditionally, environmentalists have focused their concern solely on the dwindling extent of forested areas, but the authors believe evidence of denser forests could be crucial in reducing the world’s carbon footprint.

So – if you’re one of the global warming alarmists who want to do something about your carbon footprint – go plant a tree or two. As for the myth of deforestation – well, it’s just that, a myth. 10 million hectares of “new forest” are planted each year on newly felled woodland or reclaimed land. And, per the study, the density in which it is planted has, within a decade, “reversed” any theorized damage and has the world in a net positive situation for CO2 capture. That means, of course, that the alarmists no longer have this particular issue with which to hammer industries that use forest products – well except whine about what they’re planting.

~McQ

[philunderwood]

www.qando.net/?cat=21

Ethanol subsidy axed

June 17th, 2011 | Author: Bruce McQuain

Or an alternate title: “A good start”.

The Senate voted 73-27 Thursday to kill a major tax break that benefits the ethanol industry, handing a political win to a bipartisan group of lawmakers that call the incentive needless and expensive.

The vote also could have ramifications on future votes to reduce the deficit. Much of the GOP conference supported Feinstein’s bill even though it does not include another tax break to offset the elimination of the ethanol tax credit.

[…]

Feinstein’s amendment to an economic development bill would quickly end the credit of 45 cents for each gallon of ethanol that fuel blenders mix into gasoline. The credit led to $5.4 billion in foregone revenue last year, according to the Government Accountability Office.

The amendment also ends the 54-cent per gallon import tariff that protects the domestic ethanol industry.

So we have actual bi-partisan agreement to end a subsidy and cut spending. Good. I’m also pleased with the fact that the tariff would be lifted. This means less market distortion and real signals sent by that market as to whether or not ethanol is a viable product in the energy sector. My guess is it is, however, not to the extent the subsidy made it. It may also have an effect of lowering food prices as less corn production will probably go to ethanol than is now.

As the article points out, the issue is “more regional than partisan”. That’s probably the case with many subsidies. Let’s carry this on by hunting down a few more of those types of subsidies and immediately end them. A few billion here, a few billion there and pretty soon you’re talking big money.

~McQ

[Ritty77]

The Great Corn Con
By Steven Rattner
June 24, 2011

FEELING the need for an example of government policy run amok? Look no further than the box of cornflakes on your kitchen shelf. In its myriad corn-related interventions, Washington has managed simultaneously to help drive up food prices and add tens of billions of dollars to the deficit, while arguably increasing energy use and harming the environment.

Even in a crowd of rising food and commodity costs, corn stands out, its price having doubled in less than a year to a record $7.87 per bushel in early June. Booming global demand has overtaken stagnant supply.

But rather than ameliorate the problem, the government has exacerbated it, reducing food supply to a hungry world. Thanks to Washington, 4 of every 10 ears of corn grown in America — the source of 40 percent of the world’s production — are shunted into ethanol, a gasoline substitute that imperceptibly nicks our energy problem. Larded onto that are $11 billion a year of government subsidies to the corn complex.

Corn is hardly some minor agricultural product for breakfast cereal. It’s America’s largest crop, dwarfing wheat and soybeans. A small portion of production goes for human consumption; about 40 percent feeds cows, pigs, turkeys and chickens. Diverting 40 percent to ethanol has disagreeable consequences for food. In just a year, the price of bacon has soared by 24 percent.

To some, the contours of the ethanol story may be familiar. Almost since Iowa — our biggest corn-producing state — grabbed the lead position in the presidential sweepstakes four decades ago, support for the biofuel has been nearly a prerequisite for politicians seeking the presidency.

Those hopefuls have seen no need for a foolish consistency. John McCain and John Kerry were against ethanol subsidies, then as candidates were for them. Having lost the presidency, Mr. McCain is now against them again. Al Gore was for ethanol before he was against it. This time, one hopeful is experimenting with counter-programming: as governor of corn-producing Minnesota, Tim Pawlenty pushed for subsidies before he embraced a “straight talk” strategy.

Eating up just a tenth of the corn crop as recently as 2004, ethanol was turbocharged by legislation in 2005 and 2007 that set specific requirements for its use in gasoline, mandating steep rises from year to year. Yet another government bureaucracy was born to enforce the quotas.

To ease the pain, Congress threw in a 45-cents-a-gallon subsidy ($6 billion a year); to add another layer of protection, it imposed a tariff on imported ethanol of 54 cents a gallon. That successfully shut off cheap imports, produced more efficiently from sugar cane, principally from Brazil.

Here is perhaps the most incredible part: Because of the subsidy, ethanol became cheaper than gasoline, and so we sent 397 million gallons of ethanol overseas last year. America is simultaneously importing costly foreign oil and subsidizing the export of its equivalent.

That’s not all. Ethanol packs less punch than gasoline and uses considerable energy in its production process. All told, each gallon of gasoline that is displaced costs the Treasury $1.78 in subsidies and lost tax revenue.

Nor does ethanol live up to its environmental promises. The Congressional Budget Office found that reducing carbon dioxide emissions by using ethanol costs at least $750 per ton of carbon dioxide, wildly more than other methods. What is more, making corn ethanol consumes vast quantities of water and increases smog.

Then there’s energy efficiency. Studies reach widely varying conclusions on that issue. While some show a small saving in fossil fuels, others calculate that ethanol consumes more energy than it produces.

Corn growers and other farmers have long exercised outsize influence, thanks in part to the Senate’s structural tilt toward rural states. The ethanol giveaway represents a 21st-century add-on to a dizzying patchwork of programs for farmers. Under one, corn growers receive “direct payments” — $1.75 billion in 2010 — whether they grow corn or not. Washington also subsidizes crop insurance, at a cost of another $1.75 billion last year. That may have made sense when low corn prices made farming a marginal business, but no longer.

At long last, the enormity of the nation’s budget deficit has added momentum to the forces of reason. While only a symbolic move, the Senate recently voted 73 to 27 to end ethanol subsidies. That alone helped push corn prices down to $7 per bushel. Incredibly, the White House criticized the action — could key farm states have been on the minds of the president’s advisers?

Even farm advocates like former Agriculture Secretary Dan Glickman agree that the situation must be fixed. Reports filtering out of the budget talks currently under way suggest that agriculture subsidies sit prominently on the chopping block. The time is ripe.

Steven Rattner was formerly counselor to the secretary of the Treasury and lead auto adviser. He has spent nearly 30 years on Wall Street as an investor and investment banker and is a contributing writer to Op-Ed.

www.nytimes.com/2011/06/25/opinion/25Rattner.html

[philunderwood]

Crony Capitalism at it's worst.

[philunderwood]

'Energy independence' is a pipe dream

By Jeff Jacoby

www.JewishWorldReview.com |

Late last month, President Obama announced new automobile fuel-efficiency standards that will require cars to achieve an average of 54.5 miles per gallon by 2025. Vehicle fleets currently average 27 miles per gallon, so the new target would boost fuel efficiency by an unprecedented 100 percent within 14 years. But barring an engineering miracle, that's probably pie in the sky. After all, from 1975, when the first federal mileage rules for new cars were enacted, it took more than 30 years to improve automobile efficiency by just 60 percent. And the easy gains were achieved early on; since 1980, fuel economy has climbed by only about 1 percent a year.

In truth, there is less to the new standards (known as CAFE, for corporate average fuel economy) than meets the eye. Writing for The Hill, John German of the International Council on Clean Transportation, a former Chrysler powertrain engineer, points out that "automakers will be graded on a curve." That means "an automaker that builds mostly larger cars, SUVs, and trucks will have lower mileage goals than a competitor that builds mostly compact and subcompact cars."

A mandate of 54.5 mpg may generate arresting headlines, but down in the fine print, the numbers aren't nearly as striking. "Even if the auto industry manages to meet the new standards," reports The New York Times, "it is unlikely car buyers will see many fuel-economy stickers with such high mileage." Thanks to an array of "credits," discounts, and testing procedures built into the CAFE system, 54.5 mpg will really be more like 40., "it is unlikely car buyers will see many fuel-economy stickers with such high mileage

But the fuzzy mileage numbers aren't nearly as dubious as the endlessly repeated claim that greater fuel efficiency will mean lower fuel consumption, and in turn reduce American dependence on foreign oil.

"This agreement on fuel standards," declared the president at his CAFE press conference, "represents the single most important step we've ever taken as a nation to reduce our dependence on foreign oil. Think about that."

It is getting hard to remember a time when US presidents didn't tout "energy independence" -- meaning freedom from imported oil -- as an urgent and achievable American objective.

"Let this be our national goal," said Richard Nixon in his 1974 State of the Union address: "At the end of this decade, in the year 1980, the United States will not be dependent on any other country for the energy we need."

A year later, Gerald Ford foresaw a reduction in oil imports "by 1 million barrels a day by the end of this year" and complete energy independence by 1985.

In 1979, Jimmy Carter blasted America's "intolerable dependence on foreign oil" and swore: "Beginning this moment, this nation will never use more foreign oil than we did in 1977 -- never."

Year in, year out, the quest for energy independence is one presidents never tire of invoking. What Nixon, Ford, and Carter were pushing in the 1970s, Bill Clinton, George Bush, and Barack Obama have continued to push in the 2000s. And while the 2012 presidential candidates are sure to clash on many things, the desirability of reducing oil imports from abroad is not likely to be one of them.

But energy independence is a delusion. Greater efficiency may be a splendid thing -- all other things being equal, who wouldn't rather get more miles to the gallon? -- but far from reducing the nation's demand for oil, it increases it. Thirty-five years of CAFE mandates have not reversed the rising US demand for petroleum. In 1975, highway fuel consumption totaled 109 billion gallons, according to the Federal Highway Administration. The total in 2008: 175 billion gallons.

What is true of automobile transportation is true of the economy generally: Americans use energy far more efficiently than in decades past, and for that reason the more energy they consume. Paradoxical? Not really. "Efficiency fails to curb demand because it lets more people do more, and do it faster," write Peter Huber and Mark Mills in The Bottomless Well , their intriguing 2005 book on energy policy, "and more/more/faster invariably swamps all the efficiency gains." More energy-efficient generally means more affordable -- and the more affordable something becomes, the more of it society tends to use.

Whatever else might be said of the new CAFE rules, they aren't going to reduce our dependence on oil, imported or otherwise. Americans have been using foreign oil for a long time, and we use a lot more of it now than we used to. When Nixon was in the White House, the United States imported 6 million barrels of petroleum per day. The daily average so far this year is 11.4 million barrels. It would be even higher if the economy were stronger.

Someday -- maybe -- motor vehicles really will get 54.5 mpg. But "energy independence?" You should live so long.

[philunderwood]

A Government That Kills

By John Stossel

www.JewishWorldReview.com |

President Obama has declared that auto companies' fleets must average 54.5 miles per gallon by 2025, almost double the current 27.5. Standing at his side when he made the announcement were executives from the Big Three automakers.

The New York Times reported: "It is an extraordinary shift in the relationship between the companies and Washington. But a lot has happened in the last four years, notably the $80 billion federal bailout of General Motors, Chrysler and scores of their suppliers, which removed any itch for a politically charged battle from the carmakers."

Right. They're happy to agree to stupid rules, since they are now dependent on government favors.

Obama said that under his new rule, "everyone wins. Consumers pay less for fuel, the economy as a whole runs more efficiently."

Sounds impressive, but he didn't mention the costs. The Center for Automotive Research says the new standard will raise the price of cars by about $7,000. You'd need to save a lot on fuel to break even.

But that's not the worst of it. The new rules will kill people.

Sam Kazman of the Competitive Enterprise Institute explained this to me. The MPG standard "has been killing people for the last 30 years," Kazman said.

How can that be?

"It forces cars to be ... made smaller and lighter. ... They are simply worse in just about every type of auto collision."

The National Highway Traffic Safety Administration actually backs Kazman up. It estimates that smaller cars are responsible for an additional 2,000 deaths each year.

Imagine that — a government safety agency promotes a rule that kills people.

"Think about the minute risks that agencies like Environmental Protection Agency go into a tizzy about. ... If any private product had a death toll one fraction of what the miles-per-gallon rules cost, that product would have been yanked off the market years ago."

Do we at least end up using less gasoline and saving money?

No, given the increased upfront cost of the car. "It is not clear that it saves people money," Kazman said. "If these technologies in fact save people money, you don't need a government law to force them down people's throats."

Right. We're not stupid.

Bob Deans of the Natural Resources Defense Council, one of America's biggest environmental groups, said that Kazman and I are wrong.

"Cars like the Chevy Cruise — 42 miles per gallon — get top marks on safety. The Ford Focus, more than 40 miles per gallon — top marks in safety. We're getting safer cars, and they're not coming at the expense of fuel efficiency."

Deans added: "By increasing that gas mileage for our auto fleet, we can cut our oil consumption in this country by 4 million barrels per day by 2030. That would almost wipe out our OPEC purchases daily. It will make our country stronger."

But we use oil for lots of things. If we cut gasoline use by a third, unlikely as that would be, we'd still only reduce our fossil fuel use by 7 percent. That does not make much difference for $7,000 a car and 2,000 extra deaths each year.

"It's not necessarily a smaller car that we're talking about," Deans replied. "You look at Chevy Malibu. That is a 3,400-pound car. It's not a small car. It's getting 33-miles to the gallon. We believe Detroit can do this."

Maybe they can. Maybe they can't. If they could, I'd think they would do it to meet consumer demand. They'd do it without government forcing it on us.

"New technologies can make cars safer," Kazman acknowledged. "The point is, if you put the technologies in a large, heavier car, that car will be safer still. ... None of the proponents of these standards would acknowledge (the lives lost). It's always win-win, and that is nonsense."

Life involves tradeoffs. If we want to minimize deaths from auto accidents, we may use more fuel than we might otherwise use. Who should make that decision, the government? Or you and I?

In the land of the supposedly free, that really should not be a tough question.

[philunderwood]

www.qando.net/?cat=19

Green jobs? There’s just no market

Published August 19, 2011 | By Bruce McQuain


If you don’t believe me, look at the California experience to this point. If there’s any state in the union more amenable to and focused on providing green jobs, it has to be the Golden State. Governor Jerry Brown pledged to create 500,000 of them by the end of the decade.

But as often the case when the central planners make their pledges, they are woefully ignorant of what the market wants. And so rarely does what they envision ever come to fruition. Green jobs in CA is a good example.

Remember Van Jones? Well, when Jones left the Obama cabinet as his “Green Jobs Czar” he landed in California and has been what the NY Times calls an “Oakland activist” apparently pushing for the creation of green jobs. And it’s not like California hasn’t tried. It has simply failed.

For example:


A study released in July by the non-partisan Brookings Institution found clean-technology jobs accounted for just 2 percent of employment nationwide and only slightly more — 2.2 percent — in Silicon Valley. Rather than adding jobs, the study found, the sector actually lost 492 positions from 2003 to 2010 in the South Bay, where the unemployment rate in June was 10.5 percent.

Federal and state efforts to stimulate creation of green jobs have largely failed, government records show. Two years after it was awarded $186 million in federal stimulus money to weatherize drafty homes, California has spent only a little over half that sum and has so far created the equivalent of just 538 full-time jobs in the last quarter, according to the State Department of Community Services and Development.

So a “stimulus” program that spent over $93 million dollars to create 538 jobs. Why so little in terms of takers? Well it seems the market wasn’t interested.


The weatherization program was initially delayed for seven months while the federal Department of Labor determined prevailing wage standards for the industry. Even after that issue was resolved, the program never really caught on as homeowners balked at the upfront costs.

“Companies and public policy officials really overestimated how much consumers care about energy efficiency,” said Sheeraz Haji, chief executive of the Cleantech Group, a market research firm. “People care about their wallet and the comfort of their home, but it’s not a sexy thing.”

You don’t say … the government didn’t have a clue at what the market potential of their boondoggle actually had, so they ended up spending $172,862 for each job. And you wonder where the money goes?

Example two:


Job training programs intended for the clean economy have also failed to generate big numbers. The Economic Development Department in California reports that $59 million in state, federal and private money dedicated to green jobs training and apprenticeship has led to only 719 job placements — the equivalent of an $82,000 subsidy for each one.

“The demand’s just not there to take this to scale,” said Fred Lucero, project manager atRichmond BUILD, which teaches students the basics of carpentry and electrical work in addition to specifically “green” trades like solar installation.

Richmond BUILD has found jobs for 159 of the 221 students who have entered its clean-energy program — but only 35 graduates are employed with solar and energy efficiency companies, with the balance doing more traditional building trades work. Mr. Lucero said he considered each placement a success because his primary mission was to steer residents of the city’s most violent neighborhoods away from a life of crime.

You see you can fund all the job training centers in the world and run umpthy-thousands through it. But if there is no market for the jobs, you end up spending a whole lot of money for nothing. Again, ignorance of the market and its demands means expensive mistakes. Of course Mr. Lucero thinks the program is a success – he got to spend free money, was employed and it didn’t cost him squat. It cost you.

Example three:


At Asian Neighborhood Design, a 38-year old nonprofit in the South of Market neighborhood of San Francisco, training programs for green construction jobs have remained small because the number of available jobs is small. The group accepted just 16 of 200 applicants for the most recent 14-week cycle, making it harder to get into than the University of California. The group’s training director, Jamie Brewster, said he was able to find jobs for 10 trainees within two weeks of their completing the program.

Mr. Brewster said huge job losses in construction had made it nearly impossible to place large numbers of young people in the trades. Because green construction is a large component of the green economy, the moribund housing market and associated weakness in all types of building are clearly important factors in explaining the weak creation of green jobs.

Market timing is pretty important too, isn’t it? If you introduce a product into a market in the middle of a market downturn, chances are slim you are going to be successful. While it may all look good on paper and sound good in the conference room, the “buy” decision is still made in the market place, and in this case it is obvious that the market has no room for these workers. Something which should have been, well, obvious. In fact, there is precious little market for traditional construction jobs in a “moribund housing market”. Yet there they are spending money we don’t have on job skills that are simply not in demand.

Finally there’s this bit of word salad to feast upon:


Advocates and entrepreneurs also blame Washington for the slow growth. Mr. Jones cited the failure of so-called cap and trade legislation, which would have cut carbon pollution and increased the cost of using fossil fuel, making alternative energy more competitive. Congressional Republicans have staunchly opposed cap-and-trade.

Mr. Haji of the Cleantech Group agrees. “Having a market mechanism that helps drive these new technologies would have made a significant difference,” he said. “Without that, the industry muddles along.”

You have to admire someone who tries to cloak central planning jargon in “market speak”. Imposing a tax on thin air to drive, from above, a behavior government wants is not a “market mechanism”. And beside, California passed it’s own version of this “market mechanism” with AB 32 in 2006. How’s that working out?

This is how:


A SolFocus spokeswoman, Nancy Hartsoch, said the company was willing to pay a premium for the highly-skilled physicists, chemists and mechanical engineers who will work at the campus on Zanker Road, although the solar panels themselves will continue being made in China. Mayor Reed said he continued to hope that San Jose would attract manufacturing and assembly jobs, but Ms. Hartsoch said that was unlikely because “taxes and labor rates” were too high to merit investment in a factory in Northern California.

Irony … central planning fails in CA while jobs end up in increasingly capitalistic China. Again, ignorance of the market causes disappointing results. Somehow I feel this came as a surprise to Mayor Reed … after he’d spent whatever of your money he’d committed to this project.

~McQ

[Ritty77]

The Circle of Corn-based Ethanol.

Sunday, April 3rd at 6:30PM EDT

It’s quite fun, for given values of “fun:”

* The US Government subsidizes the production of corn-based ethanol, as a substitute/supplement for gasoline.
* To maintain a demand, the US Government pushes for standard gasoline mixtures containing 10% ethanol. This will supposedly decrease pollution and increase efficiency.
* Corn is then turned into ethanol wholesale.
* Corn-based food prices rise. That includes critters that eat corn, by the way.
* This results in higher food prices domestically. This decreases efficiency.
* This also results in more food insecurity globally.
* Corn-based ethanol, being subsidized, crowds out other ethanol fuels. If this is confusing: please, reference Gresham’s Law, and generalize from its specific example.
* Ethanol, being less energy efficient than gasoline – which is why we weren’t using it to begin with – ends up causing effective inflation, as it costs more to go the same distance in your car. This also increases pollution.
* In short, 10% ethanol gasoline results in more pollution and less efficiency.
* Therefore, the only solution… is to raise the amount of ethanol in gasoline to 15%.

You have to realize, of course, that darn few DC bureaucrats actually drive anywhere. And the ones that do rarely pump their own gas.

Posted by Moe Lane

www.redstate.com/moe_lane/2011/04/03/the-circle-of-corn-based-ethanol/

[philunderwood]

www.qando.net/?p=11564

Solyndra – Administration warned it would fail in September, 2011. And, it did

Published September 15, 2011 | By Bruce McQuain

In the old “what did they know and when did they know it” game concerning Solyndra, the failed solar company backed by half a billion dollars of federally guaranteed loans, it appears the administration was warned repeatedly that it would fail.


Even after Obama took office on Jan. 20, 2009, analysts in the Energy Department and in the Office of Management and Budget were repeatedly questioning the wisdom of the loan. In one exchange, an Energy official wrote of "a major outstanding issue" — namely, that Solyndra’s numbers showed it would run out of cash in September 2011.

There was also concern about the high-risk nature of the project. Internally, the Office of Management and Budget wrote that "the risk rating for the project sponsor [Solyndra] … seems high." Outside analysts had warned for months that the company might not be a sound investment.

And the reason?

Fairly simple, really:


"It’s very difficult to perceive a company with a model that says, well, I can build something for six dollars and sell it for three dollars," Lynch said. "Those numbers don’t generally work. You don’t want to lose three dollars for every unit you make."

But apparently not enough to warn off what was something that the administration badly wanted to back – “green” jobs. The problem of course is they weren’t viable green jobs. The company failed Econ 101 analysis, yet that didn’t stop our central planners from pushing ahead with the loan guarantees.

And all the info to determine this wasn’t a good risk was there:


In 2008, Solyndra, then just three years old, pushed ahead with its application for government backing to build a new plant to produce its unique solar panels. An outside rating agency, Fitch, gave Solyndra a B+ credit rating that August. Two months earlier, in June 2008, Dun & Bradstreet issued a credit appraisal of the company. Its assessment: "Fair."

Those are not top-of-the-line scores, Fitch Ratings spokeswoman Cindy Stoller told the Center for Public Integrity’s iWatch News, which has been investigating the deal in partnership with ABC News since March. She could not discuss the Solyndra review specifically, but said of a B+ rating: "It’s a non-investment grade rating." She provided a company ratings definition, showing that B+ falls between a "highly speculative" B and "speculative" BB.

Anyone with a 5th grade education would know enough to go “not where we should sink our money”. But sink it they did.

What do we get back from the administration when questioned about all of this?


Asked about those ratings, and how significantly the department viewed the risk, Energy officials said Monday the department conducted "extensive due diligence" on the application, which included consideration of the Fitch rating.

"We believed the rating, which is used to inform our analysis of potential risks associated with the loan, was appropriate for the size, scale and innovative nature of the project and was consistent with the ratings of other innovative start-up companies," said Damien LaVera, an Energy Department spokesman.

"The Department conducted exhaustive reviews of Solyndra’s technology and business model prior to approving their loan guarantee application," LaVera said. "Sophisticated, professional private investors, who put more than $1 billion of their own money behind Solyndra, came to the same conclusion as the Department: that Solyndra was an extremely promising company with innovative technology and a very good investment."

Well, if that’s the case, then the analysts at the DoE are utterly incompetent. My guess is they came up with the analysis their bosses wanted, not that which actually told the truth about the situation.

Again, instead of letting the market do its job, the administration continued to ignore the warning signs and intrude, backing a company that was bound to fail and in the end, throwing a half billion taxpayer dollars down the drain.

And there’s this:


The White House has argued that any effort to finance start-up businesses in a relatively new field like solar energy is bound to include risky ventures that could fail. They reject the notion being pushed by Republicans that Solyndra was chosen for political reasons. One of the largest private investors in the deal, Oklahoma billionaire George Kaiser, was also a prominent fundraiser for Obama’s 2008 presidential campaign.

And, Solyndra’s CEO was a large contributor as well.

However, the big concern?


"This deal is NOT ready for prime time," one White House budget analyst wrote in a March 10, 2009 email, nine days before the administration formally announced the loan.

"If you guys think this is a bad idea, I need to unwind the W[est] W[ing] QUICKLY," wrote Ronald A. Klain, who was chief of staff to Vice President Joe Biden, in another email sent March 7, 2009. The "West Wing" is the portion of the White House complex that holds the offices of the president and his top staffers.

Yup, protect the White House. And they didn’t even have the wits to back out when they could have, instead doubling down in the face of horrific numbers. Sound familiar?

You’re in good hands, folks — can’t you just feel it?

~McQ

[Ritty77]

Bemoaning the collapse of Solyndra because of cheaper imported solar panels, White House Spokesliar Jay Carney said the choice is simple: Do we want the stamp of made in America on our products or from somewhere else. Wish they would have that attitude toward fossil fuels and illegal immigration.

[philunderwood]

Solar Energy School Propaganda 101

By Michelle Malkin

www.JewishWorldReview.com |

The Obama administration's crony green subsidy scandal is erupting like a solar flare in Washington. But do you know what your kids are learning in their environmental education classes about this red-hot taxpayer eco-scam? Chances are: not much.

Instead, the U.S. Department of Energy and the Democratic apparatchiks at the National Education Association are disseminating solar power propaganda masquerading as math and science curricula.

Titled "Solar Power and Me: The Inherent Advantages," the lesson plan for middle-school and high-school students directs them to "take note of how solar energy is incorporated into the infrastructure of various cities nationwide and write a short essay about how they would encourage solar energy use in their own town."

A worksheet labeled "All About Solar!" makes the blanket assertion that solar technologies are "a sound economical choice as they can reduce or eliminate exposure to rising electricity rates, or even eliminate one's need to pay an electrical bill! In addition, solar panels can be a smart long-term investment, with many solar vendors offering 20-30 year warranties on their products."

The only warranties worth anything from bankrupt, half-billion-dollar solar company Solyndra Inc. are the warranties on the Disney whistling robots and saunas that adorned its Taj Mahal headquarters. But I digress.

Another worksheet cheerleads the "financial savings" of "solar power and me" and coaches students to "imagine you live in amazing and sunny Anaheim, CA, where the combination of local and federal rebates covers 74 percent of your total cost of a solar panel system!" The exercise then entices the student to take out a 20-year loan on a new solar panel system to produce even greater illusory savings.

Yet another question-and-answer key reads: "How would switching to solar energy affect energy use at your home and school?" Answer: "In general, switching to solar energy would lower your home's electrical costs and reduce your emissions, thus saving money and improving the environment."

But as Brian McGraw of the free-market Competitive Enterprise Institute points out: "There might be a small niche market, but solar energy is still largely incapable of producing reliable electricity at rates that are even in the ballpark of cost competitiveness compared to coal or natural gas." Energy Secretary Steven Chu, the force behind billions of dollars' worth of rushed green energy loans overseen by deep-pocketed Obama bundlers, himself acknowledged that solar tech will need to improve five-fold before it even begins to have a cost-competitive shot.

After examining decades' worth of failed subsidized solar efforts at home and around the world, the Institute for Energy Research concludes: "Although stand-alone solar power has a certain free-market niche and does not need government favor, using solar power for grid electricity has been and will be an economic loser for ratepayers and a burden to taxpayers."

The DOE/NEA curriculum encourages students to pressure politicians to pour more money into supposedly underfunded green energy schemes. But the House Budget Committee reported last week: "The president's stimulus law alone included tens of billions in new government subsidies for politically favored renewable-energy interests: $6 billion in loan guarantees for renewable energy investments; $17 billion for the Department of Energy's energy efficiency and renewable energy programs; $2 billion for energy-efficient battery manufacturing; and billions more on other 'clean-energy' programs for a total of $80 billion. Two years later, the president's promise of millions of jobs stands in stark contrast with reality."

A more useful homework assignment would be to have these future taxpayers calculate how much their moms and dads are spending to prop up Obama's green jobs industry and its elite Democratic campaign finance donors/investors. The White House projected 65,000 new jobs from nearly $40 billion in green job stimulus spending. Instead, fewer than 3,600 jobs were created. Get out your calculators, kids: That's $4.85 million per job. Investor's Business Daily crunches the numbers further on the taxpayers' return on its DOE green loan guarantee "investments" and finds that the program will cost a whopping $23 million per job.

A separate NEA solar energy lesson plan marketed with Dow Corning teaches 5th- through 8th-graders "how solar panels work." A more apt, real-world lesson would teach them how they don't work. The myth that this alternative energy source "pays for itself" is busted with just a cursory glance at the Denver Museum of Science and Nature.

President Obama staged a photo-op on the facility's solar panel roof in 2009 when he signed the green jobs goodie-stuffed stimulus law. The museum refused to disclose electric bills before and after installation of the solar array. But after digging into the lavishly taxpayer-funded project, the Colorado-based Independence Institute discovered that the panels — which only last 25 years — wouldn't "pay for themselves" until the year 2118, more than a century from now.

It's elementary. The government shouldn't be in the business of picking any eco-winners or losers. "Too Green To Fail" redistributes wealth from viable private projects to pipe dreams, forces higher taxes and energy costs on everyone, and rewards partisan funders at public expense. Teach your children well. They're inheriting the bill.

[philunderwood]

www.qando.net/?tag=sunpower

Solyndra v 2.0 — It’s called SunPower

Published October 13, 2011 | By Bruce McQuain

Another example of the poor job government does in picking winners and losers is emerging. Solyndra, a solar panel company, was the first to go under, taking with it half a billion in taxpayer money.

Now we have the specter of another “green jobs company” that received guaranteed government loans doing the same. But this one seems to have consumed over twice the amount of money that Solyndra did.

SunPower is its name and right now, bankruptcy seems to be its game.

How well did the government, via the Department of Energy, do this time?


The Energy Department says on its website that the $1.2 billion loan to help build the California Valley Solar Ranch in San Luis Obispo County, a project that will help create 15 permanent jobs, which adds up to the equivalent of $80 million in taxpayer money for each job.

Brilliant.

The DoE also claims:


“This project underwent many months of rigorous technical, financial and legal due diligence by career employees in the DOE loan program,” Energy spokesman Damien LaVera said in a statement to FoxNews.com. “It was approved for one reason only: because it meets all the requirements of the program – helping America win the clean energy race and create entire new industries for American workers.”

Did it indeed undergo such “rigorous” analysis? Well if so, then they should have known all about this:


But SunPower posted $150 million in losses during the first half of this year and its debt is nearly 80 percent higher than the market value of all its outstanding shares. The company is also facing class action lawsuits for misstating its earnings.

It truly makes you wonder how bad a company would have to be not to get a DoE loan (obviously it would have to be a “clean energy” company, because those are the “winners” this administration has chosen to fund).

Oh, and then there’s this:


The company is also politically connected. Rep. George Miller’s son is SunPower’s top lobbyist. The elder Miller, a powerful California Democrat, toured the plant last October with Interior Secretary Ken Salazar, and reportedly said, "We’ve worked hard to make renewable energy a priority because it represents America’s future economic growth. Today, businesses like SunPower are moving forward, hiring 200 people for good clean energy jobs in the Easy Bay."

It’s not clear what role, if any, either of them played in securing the loan. Miller’s office did not respond to a request for comment.

An Energy Department official denied crony capitalism was a factor in the loan guarantee.

“The notion that political connections played any role in this application is simply false,” the official said. “This application was approved based on the exhaustive due diligence of the career professionals in the loan program, and nothing else.”

Of course. Because there was such a sound financial basis to approve such a loan, wasn’t there?

And politicians wonder why people are more and more cynical and less trusting of our government all the time?

~McQ

[philunderwood]

www.qando.net/?author=3

Obama’s Climate Change Plan: Barter away your Grandchildren’s money, legislate away yours

Published December 9, 2011 | By Bruce McQuain

Todd Stern, the Obama administration’s “Special Envoy for Climate Change”, held a quick press conference in Durban, South Africa where a UN conference on climate change is being held. He first made it a point to deny that the US was taking a “time out” until 2020. He then said a couple of things which should make clear the administration’s agenda.

First, without a viable alternative for fossil fuel to this point, the intent of the administration is to increase prices on those fuels that will ensure they’re “priced the way they ought to be”. Stern:


You need to use less energy through efficiency and to develop renewable energy sources more and more to the point that they get to what’s called grid parity, so that standing on their own they actually become sources of energy that can compete with sources like coal and so forth, fossil fuels.

And it is a very good thing to have those fossil fuel sources priced the way they ought to be, to have a price on carbon. That’s what we were trying to do with our legislation, it didn’t pass, but that kind of legislation obviously is in place in Europe, and hopefully it will come into place more and more.’

Now remember, this is from the administration that has claimed the mantle of champion of the middle class. Yet its plan is to price much of the middle class into energy poverty if it can ever get its legislation passed. And for those that will try to argue that it’s a plan for the future when there are, arguendo, viable alternatives, that’s nonsense. “It didn’t pass” tells you all you need to know about that claim.

Secondly, this administration has bought into the 100 billion (a year) dollar fund that the “rich countries” are supposed to fund to help the “poor countries” (like China and India). Stern:


We will also be working hard to ramp up the funding that is supposed to reach a 100 billion dollars a year by 2020. There’s a ton of work to be done in the years. We have been doing a lot of work on this, this year, and we will be continuing to do that as are many other countries. And all at the same time, if we get the kind of roadmap that countries have called for — the EU has called for, that the U.S. supports — for preparing for and negotiating a future regime, whether it ends up being legally binding or not, we don’t know yet, but we are strongly committed to a promptly starting process to move forward on that.

Tell your grandkids to start saving up, because the Obama administration is getting ready to shackle them and their future earnings to a global redistribution scheme based in fraudulent science (regardless of what Sen. Barbara “Ma’am” Boxer claims).

As with health care reform, there is no popular support in the US for this sort of nonsense, yet your enlightened rulers certainly believe they know better – just ask them. And they intend to push their ideological agenda instead of doing the will of the people. As for you little people, just suck it up and learn to appreciate (and pay for) their enlightened rule, OK?

~McQ

[philunderwood]

www.qando.net/?tag=green-energy

Was Solyndra just the tip of a failed taxpayer funded “green energy” iceberg?

Published January 16, 2012 | By Bruce McQuain

It appears so. CBS News’ Sharyl Attkisson (yes the same Ms. Attkisson who has been the only reporter following up on Fast and Furious) has checked and it seems Solyndra was just one of many “green companies” which the Obama administration attempted to pick as “winners” by “investing” your money via loan guarantees:


Take Beacon Power — a green energy storage company. We were surprised to learn exactly what the Energy Department knew before committing $43 million of your tax dollars.

Documents obtained by CBS News show Standard and Poor’s had confidentially given the project a dismal outlook of "CCC-plus."

Read the documents

Asked whether he’d put his personal money into Beacon, economist Peter Morici replied, "Not on purpose."

"It’s, it is a junk bond," Morici said. "But it’s not even a good junk bond. It’s well below investment grade."

Was the Energy Department investing tax dollars in something that’s not even a good junk bond? Morici says yes.

"This level of bond has about a 70 percent chance of failing in the long term," he said.

In fact, Beacon did go bankrupt two months ago and it’s unclear whether taxpayers will get all their money back. And the feds made other loans when public documents indicate they should have known they could be throwing good money after bad.

That’s one. But there are more:


Others are also struggling with potential problems. Nevada Geothermal — a home state project personally endorsed by Senate Majority Leader Harry Reid – warns of multiple potential defaults in new SEC filings reviewed by CBS News. It was already having trouble paying the bills when it received $98.5 million in Energy Department loan guarantees.

SunPower landed a deal linked to a $1.2 billion loan guarantee last fall, after a French oil company took it over. On its last financial statement, SunPower owed more than it was worth. On its last financial statement, SunPower owed more than it was worth. SunPower’s role is to design, build and initially operate and maintain the California Valley Solar Ranch Project that’s the subject of the loan guarantee.

First Solar was the biggest S&P 500 loser in 2011 and its CEO was cut loose – even as taxpayers were forced to back a whopping $3 billion in company loans.

Anyone – does the Constitution have a “venture capitalist” clause in it that we somehow missed? Is it the job of our government to pick winners and losers in a market using taxpayer dollars?

Well according to the brilliant Steven Chu, Secretary of Energy, no politics were involved in any of this. But:


Nobody from the Energy Department would agree to an interview. Last November at a hearing on Solyndra, Energy Secretary Steven Chu strongly defended the government’s attempts to bolster America’s clean energy prospects. "In the coming decades, the clean energy sector is expected to grow by hundreds of billions of dollars," Chu said. "We are in a fierce global race to capture this market."

The government is blowing it big time. Why? Because, despite Chu’s claim, it is all about politics. And ideology.

In fact this administration has no trust in markets to develop the technology they desire so they’re sold on the idea that the central government should be used to facilitate their ideology. And that is precisely what this is all about. Solyndra, Beacon Power, Nevada Geothermal, SunPower and First Solar are just failed indicators of the bankruptcy of their approach. Given a treasury and the ability to spend money almost unchecked, they’ve committed to implementing their ideology on the back of taxpayers. And, unsurprisingly, they’re failing miserably.

But we’re assumed to be so dumb we can’t see through their political scheme.

Unfortunately, as it has been for quite some time, no one will be held accountable for this fiasco that has cost us billions in money we simply don’t have. If anyone ever wanted a case study of how out-of-control and outside the Constitutional box government has become, the failed “green energy” sector loan program provides the perfect scenario.

Meanwhile, in Canada:


Canada is now looking to Asian countries to market its abundance of oil, natural gas and minerals as plans to build the proposed Keystone XL pipeline have stalled with the U.S. administration.

Prime Minister Stephen Harper will travel to China next month to discuss selling Canada’s bounty to the rapidly growing nation.

The preferred initial plan was to build the $7 billion Keystone pipeline to deliver Alberta’s oilsands crude to refineries in Texas on the Gulf of Mexico.

Harper reasoned that the U.S. government would prefer to deal with a friendly neighbor to help meet its energy needs while creating thousands of jobs.

With widespread opposition by U.S. environmentalists, the Obama administration has delayed its decision on whether to approve the project proposed by energy giant TransCanada Pipelines.

The new plan would market to China and Asian countries through the proposed Northern Gateway pipeline that would transport Alberta’s oil and natural gas to British Columbia for shipment by tankers.

Yup, no politics at all.

~McQ

[philunderwood]

www.qando.net/?tag=first-solar

Another example of why government picking winners and losers normally ends with #FAIL

Published April 20, 2012 | By Bruce McQuain

The other day this sort of slipped under the media radar:


First Solar Inc. will lay off 2,000 workers and close its factory in Germany following a collapse in solar panel prices that has erased the industry’s profits and forced some smaller companies into bankruptcy.

America’s biggest solar manufacturer said the layoffs amount to 30 percent of its global workforce.

B..b..but why!? Green shoots, alternate energy, clean energy, what the frack?!

This is the future, the government says so! How did it all go so wrong? How in the world could solar panel prices “collapse”?


An influx of Chinese competitors has led to a rapid buildup in supply. At the same time governments in Europe, the biggest market for solar power, are reducing generous subsidy programs that had fueled demand. From March to December last year, solar panel prices dropped 50 percent, said Aaron Chew, an analyst with the Maxim Group.

Oh.

That damn “supply and demand” thingy again, right?

So let me get this straight … cheap foreign product (subsidized by the Chinese government) flooded the market created by government subsidized demand, driving up supply while lowering the price. Meanwhile the false demand that had been supported by “generous [government] subsidy programs” ended (thus ending the “demand”). Consequently there is no demand for the current over supply and no one is buying the stuff?

Wow … who could have seen that coming?

And the current producer can’t make a profit and thus has to lay off people?

Oh.

You know, when you’ve seen the same thing over and over and over again (see Einstein’s definition of insanity), sometimes you just have to resort to sarcasm.

By the way for the terminally slow – news flash – that supply and demand thingy also seems to work in the petroleum market as well.

Go figure.

~McQ

[philunderwood]

Keeping Nature Exactly as Is ... Forever

By John Stossel

www.JewishWorldReview.com |

The human brain is torn between simple intuition and the more complex hard work of figuring out the unintended consequences of any policy. Who doesn't like thinking about trees and greenery and happy animals? Who doesn't want to see steps taken to protect those things, all else being equal? But all else is not equal. Civilization doesn't work when central planners treat each tree as if its value is infinite.

Politicians specialize in convincing you that, with their help, you can have your cake and eat it, too. The idea of a new "green economy" that is both clean and rich with jobs became popular under Bill Clinton's administration, thanks in large part to a compliant media and Vice President Al Gore. But anyone who understands economics knows that President Obama's green jobs initiative is snake oil.

Obama boasted that his $2.3 billion plan would "help close the clean-energy gap between America and other nations." But other nations now move in the opposite direction. "Countries are cutting these programs because they realize they aren't sustainable and they are obscenely expensive," says the American Enterprise Institute's Kenneth P. Green. In Spain, economists at La Universidad Rey Juan Carlos found that each "green" job cost more than $750,000.

Obama claims that if we "invest" more, we can "create millions of jobs — but only if we accelerate the "green transition." What could make more sense? A little push from the smart politicians, and — voila! — an abundance of new jobs and a cleaner, sustainable environment. It's the ultimate twofer. Except it's an illusion, because governments do not "create" jobs.

"All the government can do is subsidize some industries while jacking up costs for others," writes Green. "It is destroying jobs in the conventional energy sector — and most likely in other industrial sectors — through taxes and subsidies to new green companies that will use taxpayer dollars to undercut the competition. The subsidized jobs 'created' are, by definition, less efficient uses of capital than market-created jobs."

This is good, solid economic thinking. Many years ago, Henry Hazlitt wrote in his bestseller, "Economics in One Lesson," "The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups."

In judging any government initiative, you can't look just at the credit side of the ledger. Government is unable to give without first taking away. Inevitably, more is taken away because the government substitutes force for free exchange. Instead of a process driven by consumers weighing their preferences, we get one imposed by politicians' grand social designs, what F.A. Hayek called "the fatal conceit." The green schemes make energy cost more.

Of course, some who push "green jobs" want the price of energy to rise. Then we will live in smaller homes, drive less and burn fewer fossil fuels. But if the environmental lobby wants Americans to be poorer, it ought to come clean about that.

Once you decide nature is inherently healthy, moral and beautiful, the reasons to restrict human activity are endless. Every time we move or breathe, we alter the environment. Some environmentalists won't be satisfied until our carbon footprint is reduced to zero.

Of course, that requires abolishing civilization. But if humanity's impact on nature is an evil, abolishing us wouldn't be so bad. The group Earth First! had the slogan, "Back to the Pleistocene!"

Most of us don't think civilization is evil, but we worry about what environmentalists say. We don't have the time to do complicated calculations about economic trade-offs. It's easier to just recycle something, buy a Prius and donate to the Environmental Defense Fund.

Today, we put up with amazing intrusions in the name of environmentalism. A million petty regulations mandate surtaxes on gas, separation of garbage into multiple bins, special light bulbs, taxes on plastic bags and so on.

Yet these things are of so little ecological consequence that the Earth will never notice. For this, we must surrender our freedom?

[philunderwood]

www.qando.net/?tag=thermodynamics

Why I’d be shocked, shocked I tell you if that was the case.

The tease:


The Green Machine is now exposing how the US Government can choose to create data that disobey the laws of thermodynamics so that the worthless government policy of favoring plug in vehicles over gas or diesel powered vehicles can be supported by the public. Yes the US EPA chooses to make 34.4% equal to 100%.

Hmmm … I’m hooked, let’s see why:


The EPA allows plug in vehicle makers to claim an equivalent miles per gallon (MPG) based on the electricity powering the cars motors being 100% efficient. This implies the electric power is generated at the power station with 100% efficiency, is transmitted and distributed through thousands of miles of lines without any loss, is converted from AC to DC without any loss, and the charge discharge efficiency of the batteries on the vehicle is also 100%. Of course the second law of thermodynamics tells us all of these claims are poppycock and that losses of real energy will occur in each step of the supply chain of getting power to the wheels of a vehicle powered with an electric motor.

So the 118 mpg equivalent that the EPA allows the Honda Fit is nonsense? Tell me it ain’t so!


Well it is simple the US EPA uses a conversion factor of 33.7 kilowatt hours per gallon of gasoline to calculate the equivalent MPG of an electric vehicle.

Dr. Chu Chu of the Department of Entropy is instructing the EPA on thermodynamics in coming up with the 33.7 kwh per gallon. On a heating value of the fuel 33.7 kwh equals 114,984 BTUS which is indeed the lower heating value of gasoline. The fit needs 286 watt hours to travel a mile and the Green Machine agrees with this for the 2 cycle US EPA test with no heating, cooling or fast acceleration. Using this amount of energy per mile and the 33.7 kwh “contained” in a gallon of gas, the EPA calculates the Fit gets 118 MPG equivalent.

All of these calculations are in fact flawed as the generation of electricity, the transmission and distribution of electricity, the conversion of the AC electricity into DC electricity, and the charging and discharging of the vehicle batteries all have energy losses associated with these activities. The average efficiency of power generation is perhaps 42.5%, the transmission and distribution efficiency is perhaps 90%, the AC to DC conversion and the battery charge discharge efficiency is about 90%. Multiplying all these efficiencies one can calculate that the overall efficiency is 34.4% to get electric power from fuels at the power station into stored electrons within the plug in vehicle’s batteries.

On this basis the 118 MPG equivalent is 40.6 MPG actual for the Honda Fit which is not much of an improvement to the gasoline version of this vehicle that has an EPA rating of 35 MPG combined for city and highway driving.

Uh, that’s quite a little downgrade in performance, isn’t it? Nothing like being 190% off, EPA.

However, I am glad to see the administration has finally taken the politics out of science and has “real” science again serving the public’s best interest.

~McQ