Obama's Energy War

The left's war on energy in America has been ongoing wince the 70's. With Obama, the first truly far left President ruling our nation through the EPA, the Energy Dept. and the Dept. of the Interior, the far left's war on energy has gone into overdrive. Let's address the war on coal first, the effects of which are literally looming just around the bend. Coal accounts for nearly 50% of our electricity, but the Obama administration is just now putting in place new regulations that will begin driving coal from the marketplace.  The costs of electricity will soon be ramping upwards, and the stability of our power grid will become suspect:

The Environmental Protection Agency (EPA) has dangerously underestimated the impact of its back-door mandates on affordable coal-based electricity generation. Instead of the 4.8 to 9.5 gigawatts(GW) of electric plant retirements predicted by EPA, 57 power plants with 25.1 GW of generating capacity have already gone on the chopping block due to U-MACT and CSAPR. That means more than 29,000 workers are losing their jobs, millions of consumers will be paying more for their electricity and the reliability of our electricity supply is being compromised.

U-MACT  is the EPA's latest regulation on boilers. CSAPR  is the EPA's recently launched Cross State Air Pollution Rule. Both are a backdoor attack on coal.  Neither has or will ever be voted upon by Congress under our current wholly bastardized form of government.  As I have said before, there should be  No Regulation Without Representation.

As to the war on oil, Obama claims that drilling in the U.S. to increase supply will have no impact on gas prices. That is ludicrous. We are already feeling the impact of the war on oil through our gas prices - the average price of which under Obama is shown in the chart below:

Increase supply relative to demand and prices fall - that is the law of supply and demand. As to the most important component of the cost of a gallon of gas - roughly 45% - is the cost of a barrel of oil.  According to Obama, we have "only 2%" of the world's oil and drilling would make no difference, we have to cut down on demand.  The cognitive dissonance in that statement is mind numbing.  Obama is invoking the law of supply and demand, but saying that only demand matters, not supply.  Time to go to Krauthammer:

 

As to oil scarcity in the U.S., saying that we have only 2% of the world's oil is so deceptive that it amounts to a stunning lie of omission.  What we are drilling today constitutes 2% of the world's oil. That is a minuscule fraction of what is actually in the ground in the U.S. and recoverable if Obama would allow it.

Do note that those figures come from the Dept. of Energy.  As Hot Air points out, the above pyramid includes:

• At least 86 billion barrels of oil in the Outer Continental Shelf yet to be discovered
• About 24 billion barrels in shale deposits in the lower 48 states, according to EIA.
• Up to 2 billion barrels of oil in shale deposits in Alaska’s North Slope
• Up to 12 billion barrels in ANWR, according to the USGS.
• As much as 19 billion barrels in the Utah tar sands
• A stunning 1.4 trillion barrels of oil shale the massive Green River Formation in Wyoming

The reality is that the Obama administration is doing all it can to depress oil production.  During the three years of the Obama administration, recovery of oil on federal lands has decreased by between 7% and 10% - and its been even worse for natural gas.  Again to Krauthammer:

President Obama incessantly claims energy open-mindedness, insisting that his policy is “all of the above.” Except, of course, for drilling:

●off the Mid-Atlantic coast (as Virginia, for example, wants);

●off the Florida Gulf Coast (instead, the Castro brothers will drill near there);

●in the broader Gulf of Mexico (where drilling in 2012 is expected to drop 30 percent below pre-moratorium forecasts);

●in the Arctic National Wildlife Refuge (more than half the size of England, the drilling footprint being the size of Dulles International Airport);

●on federal lands in the Rockies (where leases are down 70 percent since Obama took office).

But the event that drove home the extent of Obama’s antipathy to nearby, abundant, available oil was his veto of the Keystone pipeline, after the most extensive environmental vetting of any pipeline in U.S. history. It gave the game away because the case for Keystone is so obvious and overwhelming. Vetoing it gratuitously prolongs our dependence on outside powers, kills thousands of shovel-ready jobs, forfeits a major strategic resource to China, damages relations with our closest ally, and sends billions of oil dollars to Hugo Chavez, Vladimir Putin and already obscenely wealthy sheiks.

Obama boasts that, on his watch, production is up and imports down. True, but truly deceptive. These increases have occurred in spite of his restrictive policies. They are the result of Clinton- and Bush-era permitting. This has been accompanied by a gold rush of natural gas production resulting from new fracking technology that has nothing at all to do with Obama.

“The American people aren’t stupid,” Obama said (Feb. 23), mocking “Drill, baby, drill.” The “only solution,” he averred in yet another major energy speech last week, is that “we start using less — that lowers the demand, prices come down.” Yet five paragraphs later he claimed that regardless of “how much oil we produce at home . . .that’s not going to set the price of gas worldwide.”

So: Decreasing U.S. demand will lower oil prices, but increasing U.S. supply will not? This is ridiculous. Either both do or neither does. Does Obama read his own speeches?

Obama says of drilling: “That’s not a plan.” Of course it’s a plan. We import nearly half of our oil, thereby exporting enormous amounts of U.S. wealth. Almost 60 percent of our trade deficit — $332 billion out of $560 billion — is shipped overseas to buy crude.

Drill here and you stanch the hemorrhage. You keep those dollars within the U.S. economy, repatriating not just wealth but jobs and denying them to foreign unfriendlies. Drilling is the single most important thing we can do to spur growth at home while strengthening our hand abroad.

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Cap, Trade & Calculations

To repeat that which bears repeating ad infinitum, cap and trade is the single most ill advised piece of legislation quite likely ever in our nation's history. Cap and trade is not a "green" bill. It will do nothing to reduce global temperatures - though the sun has taken care of that for us these past seven years. Cap and trade is a massive regressive tax, it is an attack on business, and it is a vehicle for a massive power grab by the left side of our government.

Today, Robert Zubrin at Roll Call does some 'back of the envelope' calculations on the real costs of the cap and trade bill. It is a must read. As he notes, the cap and trade bill portends to be "a massive and highly regressive tax on the U.S. economy, and could potentially cause not only extensive business failures, unemployment and privation within our borders, but starvation among poorer populations elsewhere."

This from Mr. Zubrin:

. . . According to a report issued by the Environmental Protection Agency in April, by 2015 the price of carbon emission indulgences required by the bill for industries to operate could be expected to run between $13 and $17 per ton of CO2 emitted. . . . That said, let’s stipulate the $15/ton midrange of the EPA estimate, and see what it implies.

The United States emits about 9 billion tons of CO2 per year. Therefore, at a rate of $15/ton fee for emission indulgences, the bill would impose a tax of $135 billion per year on the nation. Divided by the U.S. population of 300 million, that works out to a cost of $450 per year levied on every American man, woman or child, or $1,800 for a family of four. While for wealthy individuals like Al Gore such an impost might represent a mere pittance, for working families struggling hard to make ends meet it would be a very significant burden.

But that is not even the worst part of it. As a result of the markup of carbon costs, a lot of those working families will be out of work and unable to pay their existing bills, let alone new ones. Consider: Burning one ton of coal produces about three tons of CO2. So a tax of $15 per ton of CO2 emitted is equivalent to a tax of $45/ton on coal. The price of Eastern anthracite coal runs in the neighborhood of $45/ton, so under the proposed system, such coal would be taxed at a rate of about 100 percent. The price of Western bituminous coal is currently about $12/ton. This coal would therefore be taxed at a rate of almost 400 percent. Coal provides half of America’s electricity, so such extraordinary imposts could easily double the electric bills paid by consumers and businesses across half the nation. In addition, many businesses, such as the metals and chemical industries, use a great deal of coal directly. By doubling or potentially even quadrupling the cost of their most basic feedstock, the cap-and-trade system’s indulgence fees could make many such businesses uncompetitive and ultimately throw millions of working men and women onto the unemployment lines.

A gallon of petroleum-derived liquid fuel produces about 20 pounds, or 1 percent of a ton, of CO2 when burned. But it takes about 1.5 gallons of oil to produce one gallon of refined liquid fuel. So a $15/ton tax on CO2 emissions will also cause an increase in the price of gasoline, diesel and jet fuel on the order of $0.22/gallon. This will not only hit consumers’ pockets, but increase transport costs throughout the economy, thereby disabling businesses and increasing unemployment levels still more. While harming the economy, such a gas tax will do nothing material toward the truly essential goal of decreasing America’s dependence on foreign oil. Indeed, the bill’s dramatic hikes in electricity costs will have the opposite effect, since only 3 percent of America’s electricity is derived from oil, and by forcefully increasing electric power costs, the bill will actually discourage adoption of electric means of transport, . . .

But all these bad aspects of the Waxman-Markey bill pale before its potential impact on the world’s food supply. America’s agricultural sector is one of the greatest success stories in human history. In 1930, hunger still stalked the entire globe. Not just in Africa, India and China, but even in Europe and America, the struggle to simply get enough food to live on still preoccupied billions of people. Since 1930, the world population has tripled. But instead of going hungrier, people nearly everywhere are now eating much better. This miracle is the work of American farmers, who have not only produced huge surpluses to feed the world, but used the income gained from such good work to pioneer ever more advanced techniques that have enabled farmers everywhere to grow more. . . . But this miracle depends upon the availability of cheap fertilizer and pesticides, which in turn require carbon-based process energy to produce. If you tax carbon, you tax fertilizer and pesticides. If you tax these things, you tax food, and by no small amount. A $15/ton CO2 tax would increase fertilizer production costs directly by about $60/ton, with the cap-and-trade bill’s increased transport costs inflating the burden still more. That’s enough to make many farmers use less fertilizer, and less fertilizer means less food.

To get a sense of what it would mean for farmers to abandon fertilizer, it is only necessary to go to the supermarket and compare the price of the “organic” produce, grown without chemical fertilizer, to the regular produce, which, while just as nutritious, typically costs less than half as much. . . .

In the 220 years of our republic, there may have been worse pieces of legislation enacted by Congress than the Waxman-Markey bill, but none readily comes to mind. The Senate needs to take a stand and stop this disastrous act from passing into law.

Read the entire article. (H/T Gateway Pundit)

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Update: See also this from Forbes, Waxman-Markey Flunks Math:

In the U.S., electricity is produced from . . .:

48.9% -- Coal
20% -- Natural Gas
19.3% -- Nuclear
1.6% -- Petroleum

Got that? A tick over 88% of U.S. electricity comes from three sources: coal, gas and nuclear. Petroleum brings the contribution of so-called "evil" energy--that is, energy that is carbon- or uranium-based--to almost 90%.

The remaining sources of U.S. electricity, the renewables, are, by comparison, tiny players:

7.1% -- Hydroelectric
2.4% -- Other Renewables
0.7% -- Other

Hydroelectric accounts for 70% of renewable energy in America. But, of course, hydro is mostly tapped out. Almost every dam that could be built has been built. Ironically enough, political opposition to building more dams comes from the same crowd of tree huggers who oppose coal, gas and uranium.

Do you see where I'm going?

The Waxman-Markey bill that passed the House on Friday by a 219-212 margin will punitively tax energy sources that contribute 90% of current U.S. electricity (or 71% if you want to leave out nuclear). The taxes will be used to subsidize the 10% renewable contributors (but really just 3% after you leave out hydro).

In other words, Waxman-Markey is betting the future of U.S. electricity production on sources that now contribute 3% . . .

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If passed, I have no doubt that cap and trade will ultimately be repealed, but not before doing untold damage to our economy that might take decades to repair. And the people who ultimately will pay the highest price for this epic boondoggle will be the poor and the lower middle class. The intelligentsia of the left speak of populism and concern for the poor, but the reality is that they value power above all, irrespective of who suffers as a result of their acts. Controlling carbon allows the left to expand their power into every aspect of our economy and our life. If you doubt Speaker Pelosi's honesty when she said that, to control carbon, the left had to examine "every aspect of our lives," then just look at what else is in the cap and trade bill. This from Doug Ross, discussing some of the ancillary provisions in the House Cap and Trade bill:

It creates hundreds of new bureaucracies that benefit Obama's contributors; for example, it creates a "Development Corporation for Renewable Power Borrowing Authority" that issues "Community Building Code Administration Grants" under a "Low Income Community Sustainable Development Capacity Grant Program". This scam serves two purposes: it rewards failed housing programs like those run by Presidential Adviser Valerie Jarrett; it also provides yet another spigot of funds -- in blocks of $1,000,000 -- for groups like ACORN.

• It creates and regulates every building code in the country and will purposefully overrule any "city, county, parish, city and county authority, or city and parish authority having local authority to enforce building codes and regulations and to collect fees for building permits."

• It reaches into every neighborhood by eradicating "any private covenant, contract provision, lease provision, homeowners' association rule or bylaw, or similar restriction" to force localities to accept "green technologies" whether it fits in the neighorhood or not.

• It touches every aspect of water and sewer systems by regulating every "residential water efficient product or service"; ensuring those offerings are rated and forcing state government, local or county government, tribal government, wastewater or sewerage utility, municipal water authority, energy utility, water utility, or nonprofit organization to comply. . . .

• It defines "energy-efficient mortgages" (with our favorite GSEs, Fannie Mae and Freddie Mac, so what could possibly go wrong?) that artificially boosts the income of the borrower based upon how much "green technology" is employed. In other words, the Democrats are socially engineering mortgage underwriting standards again, just as they did in the nineties, which will lead to yet another financial disaster. . . .

Read the entire post. God help us if the Senate now passes this utter abortion.

(Cartoon H/T - No Oil For Pacifists)

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