Environmentalists are trying to list such ubiquitous species as prairie chickens in order to halt oil and gas development in most of the west. Presumably, wind farms would be given a special exemption.
Dispatches from District 48
Posts tagged ‘oil’
Environmentalists are trying to list such ubiquitous species as prairie chickens in order to halt oil and gas development in most of the west. Presumably, wind farms would be given a special exemption.
Update: If you want to understand how deep the fraud runs, make sure to watch the 60 second video below with the US environmentalists caught on tape plotting their fraud.
U.S. District Judge Lewis Kaplan in Manhattan said today that the second-largest U.S. oil company provided enough evidence that a 2011 judgment on behalf of rain forest dwellers in the country’s Lago Agrio area was secured by bribing a judge and ghostwriting court documents. Kaplan oversaw a seven-week nonjury trial over Chevron’s allegations.
“The decision in the Lago Agrio case was obtained by corrupt means,” Kaplan said in an opinion that gave Chevron a sweeping victory. “The defendants here may not be allowed to benefit from that in any way.”
Chevron, based in San Ramon, California, was ordered to pay $19 billion to a group of farmers and fishermen by the Ecuadorean court. The award was reduced to $9.5 billion on Nov. 12 by the Ecuadorean National Court of Justice, the nation’s highest tribunal. That's almost half of its 2013 profit.
The Ecuadorean villagers, and activists working on their behalf, argued the oil producer should be held financially responsible for pollution of the Amazon rainforest by Texaco Inc. from the 1960s through the early 1990s. Chevron, which bought Texaco in 2001, claims the company already paid $40 million to clean up its share of the drilling contamination....
In its racketeering case before Kaplan, Chevron alleged that a U.S. lawyer leading the Ecuadoreans, Steven Donziger, and members of his team engaged in “repeated acts of fraud, bribery, money laundering” and obstruction of justice in pursuit of a multibillion-dollar payout.
I don't think there is any doubt that Chevron owed the Ecuadorans some clean up, since even they have agreed to doing work there. And it is not unreasonable to be skeptical that Chevron's actions were perhaps incomplete. But the $19 billion judgement always has smelled, particularly when the judge in the Ecuadoran case publicly admitted he had been bribed.
There was deep corruption in this case from the start, corruption that never will be adequately covered in the media because it "was for a good cause." Similar levels of corruption by Chevron would have led the front page of the New York Times for weeks.
As a reminder, let me quote from an earlier story. Please watch the short video, it is amazing:
The clip below is an outtake from the environmentalist movie "Crude", which purported to document the environmentalist's case against Chevron in Ecuador. Apparently, between takes of earnest and un-selfinterested environmentalists saving the world from greedy corporations, these self-same environmentalists discussed lying about the science and duping the courts in order to score a big payday for themselves.
The video is doubly interesting because, as Anthony Watts explains, the woman in the video taking money to make up untrue findings was recently confirmed to the NAS, where there is a good bet that we will see her as the source for "evidence" that fracking is contaminating groundwater. These three folks are all the subject of a civil suit from Chevron but all three should be subject to criminal charges for fraud and conspiracy.
Several of the environmentalists involved, including Dr. Ann Maest, have since recanted their corruption, sort of. They claim they were "misled" in this New York Times story, but the clip above certainly belies that. Donziger did not mislead her, he is seen convincing her that in Ecuador they can get away with lying. All for a good cause, of course.
Dispatches from the echo chamber: Mother Jones was on this story full force for years. Then suddenly stopped reporting at all when it became clear that allegations of fraud were credible. Check out the articles.
Update: More here
I believe it was back in 1973, when my dad was an executive with an oil company, he got hauled in front of Congress to testify on the proposed Alaska pipeline. Senators on the Left accused the industry of threatening the environment in the name of greed, by trying to bring oil to market that was entirely unnecessary. A few months later, once the Arab oil embargo had begun, he was back in front of Congress answering questions from the same Senators who opposed the Alaska pipeline about whether the rumors were true that oil companies were holding tankers off-shore, purposely making the shortage worse and driving up prices. It was an early life-lesson in government for me, watching my dad be publicly accused within months of seeking new oil supplies too aggressively and purposely withholding oil supplies from the market.
I am reminded of all this by the Keystone pipeline brouhaha. One wonders how many of the people opposing the Keystone pipeline will be the first out on the picket line protesting oil prices the next time there is an oil price spike.
A reader sends me a story of global warming activist who clearly doesn't know even the most basic facts about global warming. Since this article is about avoiding appeals to authority, so I hate to ask you to take my word for it, but it is simply impossible to immerse oneself in the science of global warming for any amount of time without being able to immediately rattle off the four major global temperature data bases (or at least one of them!)
I don't typically find it very compelling to knock a particular point of view just because one of its defenders is a moron, unless that defender has been set up as a quasi-official representative of that point of view (e.g. Al Gore). After all, there are plenty of folks on my side of issues, including those who are voicing opinions skeptical of catastrophic global warming, who are making screwed up arguments.
However, I have found over time this to be an absolutely typical situation in the global warming advocacy world. Every single time I have publicly debated this issue, I have understood the opposing argument, ie the argument for catastrophic global warming, better than my opponent. In fact, I finally had to write a first chapter to my usual presentation. In this preamble, I outline the case and evidence for manmade global warming so the audience could understand it before I then set out to refute it.
The problem is that the global warming alarm movement has come to rely very heavily on appeals to authority and ad hominem attacks in making their case. What headlines do you see? 97% of scientists agree, the IPCC is 95% sure, etc. These "studies", which Lord Monkton (with whom I often disagree but who can be very clever) calls "no better than a show of hands", dominate the news. When have you ever seen a story in the media about the core issue of global warming, which is diagnosing whether positive feedbacks truly multiply small bits of manmade warming to catastrophic levels. The answer is never.
Global warming advocates thus have failed to learn how to really argue the science of their theory. In their echo chambers, they have all agreed that saying "the science is settled" over and over and then responding to criticism by saying "skeptics are just like tobacco lawyers and holocaust deniers and are paid off by oil companies" represents a sufficient argument.** Which means that in an actual debate, they can be surprisingly easy to rip to pieces. Which may be why most, taking Al Gore's lead, refuse to debate.
All of this is particularly ironic since it is the global warming alarmists who try to wrap themselves in the mantle of the defenders of science. Ironic because the scientific revolution began only when men and women were willing to reject appeals to authority and try to understand things for themselves.
** Another very typical tactic: They will present whole presentations without a single citation. But make one statement in your rebuttal as a skeptic that is not backed with a named, peer-reviewed study, and they will call you out on it. I remember in one presentation, I was presenting some material that was based on my own analysis. "But this is not peer-reviewed" said one participant, implying that it should therefore be ignored. I retorted that it was basic math, that the data sources were all cited, and they were my peers -- review it. Use you brains. Does it make sense? Is there a flaw? But they don't want to do that. Increasingly, oddly, science is about having officially licensed scientists delivery findings to them on a platter.
California regulators have launched an investigation into offshore hydraulic fracturing after revelations that the practice had quietly occurred off the coast for the past two decades.
The California Coastal Commission promised to look into the extent of so-called fracking in federal and state waters and any potential risks.
Hydraulic fracturing has been a standard tool for reinvigorating oil and gas wells for over 60 years. While it gets headlines as something new, it decidedly is not. What is new is its use in combination with horizontal drilling as a part of the initial well design, rather than as as a rework tool for an aging field.
What California regulators are really saying is that they have known about and been comfortable with this process for decades**, but what has changed is not the technology but public opinion. A small group of environmentalists have tried to, without much scientific basis, demonize this procedure not because they oppose it per se but because they are opposed to an expansion of hydrocarbon availability, which they variously blame for either CO2 and global warming or more generally the over-industrialization of the world.
So given this new body of public opinion, rather than saying that "sure, fracking has existed for decades and we have always been comfortable with it", the regulators instead act astonished and surprised -- "we are shocked, shocked that fracking is going on in this establishment" -- and run around in circles demonstrating their care and concern. Next step is their inevitable trip to the capital to tell legislators that they desperately need more money and people to deal with their new responsibility to carefully scrutinize this decades-old process.
**Postscript: If regulators are not familiar with basic oil-field processes, then one has to wonder what the hell they are going with their time. It's not like anyone in the oil business had any reason to hide fracking activity -- only a handful of people in the country would have known what it was or cared until about 5 years ago.
The confrontation may be coming soon in the environmental community over wind power -- it certainly would have occurred already had the President promoting wind been Republican rather than Democrat. I might have categorized this as "all energy production has environmental tradeoffs", but wind power is so stupid a source to be promoting that this is less of a tradeoff and more of another nail in the coffin. As a minimum, the equal protection issues vis a vis how the law is enforced for wind companies vs. oil companies are pretty staggering.
“It happens about once a month here, on the barren foothills of one of America’s green-energy boomtowns: A soaring golden eagle slams into a wind farm’s spinning turbine and falls, mangled and lifeless, to the ground.
Killing these iconic birds is not just an irreplaceable loss for a vulnerable species. It’s also a federal crime, a charge that the Obama administration has used to prosecute oil companies when birds drown in their waste pits, and power companies when birds are electrocuted by their power lines.”
“[The Obama] administration has never fined or prosecuted a wind-energy company, even those that flout the law repeatedly. Instead, the government is shielding the industry from liability and helping keep the scope of the deaths secret.”
“Wind power, a pollution-free energy intended to ease global warming, is a cornerstone of President Barack Obama’s energy plan. His administration has championed a $1 billion-a-year tax break to the industry that has nearly doubled the amount of wind power in his first term. But like the oil industry under President George W. Bush, lobbyists and executives have used their favored status to help steer U.S. energy policy.”
“The result [of Obama energy policy] is a green industry that’s allowed to do not-so-green things. It kills protected species with impunity and conceals the environmental consequences of sprawling wind farms.”
“More than 573,000 birds are killed by the country’s wind farms each year, including 83,000 hunting birds such as hawks, falcons and eagles, according to an estimate published in March in the peer-reviewed Wildlife Society Bulletin.
On the right, both climate change and questions about global limits on oil production have exited the realm of empirical debate and become full-blown fronts in the culture wars. You're required to mock them regardless of whether it makes any sense. And it's weird as hell. I mean, why would you disparage development of renewable energy? If humans are the ultimate creators, why not create innovative new sources of renewable energy instead of digging up every last fluid ounce of oil on the planet?
I am sure it is perfectly true that there are Conservatives who knee-jerk oppose every government renewable energy and recycling and green jobs idea that comes along without reference to the science. But you know what, there are plenty of Liberals who knee-jerk support all these same things, again without any understanding of the underlying science. Mr. Drum, for example, only recently came around to opposing corn ethanol, despite the fact that the weight of the science was against ethanol being any kind of environmental positive years and years ago. In fact, not until it was no longer cool and caring to support ethanol (a moment I would set at when Rolling Stone wrote a fabulous ethanol expose) did Drum finally turn against it. Is this science, or social signalling? How many folks still run around touting electric cars without understanding what the marginal fuels are in the electricity grid, or without understanding the true well-to-wheels efficiency? How many folks still run around touting wind power without understanding the huge percentage of this power that must be backed up with hot backup power fueled by fossil fuels?
Why is his almost blind support of renewable energy without any reference to science or the specifics of the technologies involved any saner than blind opposition? If anything, blind opposition at least has the numbers on their side, given past performance of investments in all sorts of wonder-solutions to future energy production.
The reason there is a disconnect is because statists like Drum equate supporting government subsidies and interventions with supporting renewables. Few people, even Conservatives, oppose renewables per se. This is a straw man. What they oppose are subsidies and government mandates for renewables. Drum says he has almost limitless confidence in man's ability to innovate. I agree -- but I, unlike he apparently, have limitless confidence in man's ability to innovate absent government coercion. It was not a government program that replaced whale oil as an illuminant right when we were approaching peak whale, it was the genius of John D. Rockefeller. As fossil fuels get short, prices rise, and people naturally innovate on substitutes. If Drum believes that private individuals are missing an opportunity, rather than root for government coercion, he should go take up the challenge. He can be the Rockefeller of renewable energy.
Postscript: By the way, it is absurd and disingenuous to equate opposition to what have been a series of boneheaded government investments in questionable ventures and technologies with some sort of a-scientific hatred of fossil fuel alternatives. I have written for a decade that I long for the day, and expect it to be here within 20 years, that sheets of solar cells are cranked from factories like carpet out of Dalton, Georgia.
The ultimate argument I get to my climate talk, when all other opposition fails, is that the precautionary principle should rule for CO2. By their interpretation, this means that we should do everything possible to abate CO2 even if the risk of catastrophe is minor since the magnitude of the potential catastrophe is so great.
The problem is that this presupposes there are no harms, or opportunity costs, on the other end of the scale. In fact, while CO2 may have only a small chance of catastrophe, Bill McKibben's desire to reduce fossil fuel use by 95% has a near certain probability of gutting the world economy and locking billions into poverty. Here is one illustration I just crafted for my new presentation. As usual, click to enlarge:
A large number of people seem to assume that our use of fossil fuels is an arbitrary choice among essentially comparable options (or worse, a sinister choice forced on us by the evil oil cabal). In fact, fossil fuels have a number of traits that make them uniquely irreplaceable, at least with current technologies. For example, gasoline has an absolutely enormous energy content per pound of fuel. Most vehicles - space shuttles, and more recently electric cars - must dedicate an enormous percentage of their power production just to moving the weight of their fuel. Not so in gasoline engine cars, something those who are working with electric cars must face every day.
By the way, if you want to see the kick-off of version 3.0 of my climate presentation, it will be at my son's school, Amherst College, this Thursday at 7PM. More here.
Update: By the way, I was careful in the chart to say the two " are correlated". I actually do not think one causes the other. In this case, I think there are a third, and fourth, and fifth (etc.) factors that cause both. For example, economic development leads to (and depends on) increased fossil fuel use and CO2 emissions, and it leads to longer lives.
I have written before that trade policy is generally ALL corporate cronyism -- tariffs or restrictions that benefit a narrow set of producers at the expense of 300 million US consumers.
Mark Perry has yet another example, though with a small twist. Most corporations are looking for limits on imports of competing products and/or subsidies for their own products exports. In the case of Dow Chemical, they are looking for limits on exports of key inputs to their plants, specifically oil and natural gas. CEO Andrew Liveris wants to force an artificial supply glut to drive down his input prices by banning the export (or continuing to ban the export) of natural gas. If gas producers can't sell their product? Tough -- let them try to out-crony a massive company like Dow in Washington.
But here is the irony -- there is absolutely nothing in his logic for banning natural gas exports that would not apply equally well to banning the export of his own products. Like natural gas, his products are all inputs into many other products and manufacturing processes that would all likely benefit from lower prices of Dow's products as Dow would benefit from lower natural gas prices.
So here is my proposal -- any company that publicly advocates for banning exports for its purchases must first have exports of its own products banned.
The Ecuadoran $18 billion court decision is turning out to be a monumental case of environmental fraud. I am willing to believe that early critics of Texaco (now Chevron) had legitimate beefs about the company's stewardship in its drilling operations in the 1970's in the Amazon. However, all semblance of principle has gone right out the window in a gigantic money grab.
A while back, it was reported that environmentalists (featured in the movie "Crude" were captured in the outtakes of the movie discussing how they lied about the science to the courts in order to score a big payday (bonus points for Obama appointing one of the fraudsters to the National Academy of Sciences). See the link for the video evidence.
Past fraud revelations have cast doubt on the key scientific report submitted to the court as part of the proceedings, a report that is now known to have been ghost-written by the plaintiffs. However, supporters of the judgement against Chevron have argued that the judge has always claimed that this study did not sway his decision in the case. Now we know what did sway his decision:
Today new allegations of deceit and wrongdoing were leveled against the plaintiffs' lawyers bringing the already deeply troubled environmental suit against Chevron in Lago Agrio, Ecuador, which stems from Texaco's oil drilling in the Ecuadorian Amazon between 1964 and 1992. (Texaco was acquired by Chevron in 2001.)
In Manhattan federal district court this morning, Chevron filed the declaration of a former Ecuadorian judge, Alberto Guerra, who describes how he and a second former judge, Nicolás Zambrano, allegedly allowed the plaintiffs lawyers to ghostwrite their entire 188-page, $18.2 billion judgment against Chevron in exchange for a promise of $500,000 from the anticipated recovery.
Anthony Watt has a nice catalog of past predictions of doom (e.g. running out of oil, food, climate issues, etc). It really would be funny if not such a serious and structural issue with the media. I would love to see someone like the NY Times have a sort of equivalent of their reader advocate whose job was to go through past predictions published in the paper and see how they matched up to reality. If I had more time, it is the blog I would like to start.
Update: One of his readers Dennis Wingo took the resource depletion table from Ehrlich's Limits to Growth and annotated it -- the numbers in red show the resources Ehrlich predicted we should already run out of.
However, rather than ever, ever going back and visiting these forecasting failures and trying to understand the structural problem with them, the media still runs back to Ehrlich as an "expert".
Bloomberg does a ranking of where one should go if he is unemployed. Before we go to their ranking criteria, lets think about what criteria I would recommend to someone:
OK, so let's look at Bloomberg's ranking criteria. They also have three:
Via Mark Perry. This issue came up in the debates, when Obama claimed that he tried to take credit for the recent oil and gas boom, when in fact all of the boom is occuring on public lands (oil and gas production on federal lands is actually falling during this boom). Here is one reason whyL
Kevin Drum is uncomfortable that Google got off the hook on anti-trust charges merely because it was not harming consumers
Google made a number of arguments in its own defense, and consumer welfare was only one of them. Still, it was almost certainly the main reason they won, and it's still not clear to me that this is really what's best for consumers in the long run. Did Google users click on the products they highlighted? Sure. Did they buy some of the stuff? Sure. Were they happy with their purchases? Sure. Is that, ipso facto, evidence that there's no long-run harm from a single company dominating the entire search space? I doubt it. After all, John D. Rockefeller could have argued that consumers bought his oil and were pretty happy with it, so what was the harm in his controlling the entire market?
The tech industry moves fast enough that antitrust might genuinely not be a big issue there. In the end, it wasn't antitrust that hurt IBM and Microsoft. It was the fact that the industry moved rapidly toward smaller computers and then the internet, and neither company was really able to react fast enough to dominate these new spaces. Nonetheless, I'm skeptical of the tautology at the heart of the consumer welfare argument. If a company is successful, then by definition people must be buying its stuff. On this basis, bigness is simply unassailable anymore. That has broad societal implications that I suspect we're not taking seriously enough.
He seems to be arguing that we consider returning to a pure bigness standard without reference to consumer harm. I am not sure that we ever followed such a standard, but certainly today the alternative to a consumer harm standard is not a bigness standard but a competitor harm standard. Whether he knows it or now, this is essentially what Drum is advocating. We see this in the article he quotes:
But while the F.T.C. said that Google’s actions might have hurt individual competitors, over all it found that the search engine helped consumers, as evidenced by Google users’ clicking on the products that Google highlighted and competing search engines’ adopting similar approaches.
I am not sure what Drum really wants, but the result of eliminating the consumer-harm standard would be an environment where every failed company can haul its more successful competitors in front of the government and then duke it out based on relative political pull rather than product quality. It is pretty well understood out there that this anti-Google FTC claim was initiated and championed by Microsoft, certainly not among the powerless typically championed by progressives, and a company well known to have missed the boat on Internet search and which is apparently trying to do now through government fiat what it has not been able to do in the marketplace. Microsoft learned this technique from Sun and Oracle, which took Microsoft to the FTC in the famous browser case where Microsoft faced years of anti-trust scrutiny for the crime of giving the public a free product.
Already, anti-trust law is an important tool of the corporate state, to allow politically powerful companies to squash competition from those who invested less money in their Washington office. I am not a legal expert at all, but this consumer standard in anti-trust strikes me as a critical shield stopping a hell of a lot more abuse of anti-trust law.
By the way, there is a modern bigness problem with corporations that is very troubling -- we have made government tremendously powerful, giving it many tools to arbitrarily choose winners and losers without any reference to justice or rights. As private entities get larger and richer, they are better able to access and wield this power in their own favor. The libertarian solution is to reduce the government's power to pick winners and losers. The progressive answer is to regulate business more with tools like anti-trust.
But the progressive solution has a built-in contradiction, which why Drum probably does not suggest a solution. Because the very tools progressives suggest to regulate business typically become the tools with which politically connected corporations further tilt the game in their own favor. Anti-trust is a great example. We want to reduce the number of large companies with an eye to reducing corporatism and cronyism, but the very tool to do so -- anti-trust law -- has become one the corporate crony's best tools for stepping on competitors and insulating their own market positions.
And by the way, Rockefeller's Standard Oil did a HELL of a job for consumers. It was nominally punished for what it might some day hypothetically do to consumers.
Here are the facts, via Reason
Standard Oil began in 1870, when kerosene cost 30 cents a gallon. By 1897, Rockefeller's scientists and managers had driven the price to under 6 cents per gallon, and many of his less-efficient competitors were out of business--including companies whose inferior grades of kerosene were prone to explosion and whose dangerous wares had depressed the demand for the product. Standard Oil did the same for petroleum: In a single decade, from 1880 to 1890, Rockefeller's consolidations helped drive petroleum prices down 61 percent while increasing output 393 percent.
By the way, Greenpeace should have a picture of John D. Rockefeller on the wall of every office. Rockefeller, by driving down the cost of kerosene as an illuminant, did more than any other person in the history to save the whales. By making kerosene cheap, people were willing to give up whale oil, dealing a mortal blow to the whaling industry (perhaps just in time for the Sperm Whale).
So Rockefeller grew because he had the lowest cost position in the industry, and was able to offer the lowest prices, and the country was hurt, how? Sure, he drove competitors out of business at times through harsh tactics, but most of these folks were big boys who knew the rules and engaged in most of the same practices. In fact, Rockefeller seldom ran competitors entirely out of business but rather put pressure on them until they sold out, usually on very fair terms.
From "Money, Greed, and Risk," author Charles Morris
An extraordinary combination of piratical entrepreneur and steady-handed corporate administrator, he achieved dominance primarily by being more farsighted, more technologically advanced, more ruthlessly focused on costs and efficiency than anyone else. When Rockefeller was consolidating the refining industry in the 1870s, for example, he simply invited competitors to his office and showed them his books. One refiner - who quickly sold out on favorable terms - was 'astounded' that Rockefeller could profitably sell kerosene at a price far below his own cost of production.
Up until now, I had never know that there was actually a theory, propounded by people with a straight face, that trapping people in neighborhoods and institutions (like public schools) is a positive because it promotes civic virtue.
If you own your home, then a lot of your wealth is tied in with the quality of your neighborhood. In theory, this should motivate you to vote more carefully in local elections. On the other hand, if you are a renter, and the neighborhood goes downhill, you will simply leave.
Collectivists prefer to trap households within specific government service areas. Their thinking is that with the “exit” option foreclosed, households will be forced to exercise their “voice” option, to everyone’s benefit. This is an argument against private schools. It goes back at least as far as A.O. Hirschman’s classic book, Exit, Voice, and Loyalty.
I would argue just the opposite, that this creates state monopolies ripe for abuse, and besides, is disastrous for labor mobility and thus the healthy functioning of labor markets. People keep arguing that this recession is long because recessions after financial bubbles are always long. I am not sure that is proven out by history.
I would argue a big reason this recession is long is that the nature of this bubble, being in housing markets, short-circuited one of the ways we get out of recessions, which is labor mobility. Trapped in homes the government encouraged them to buy but now they cannot sell, people can't move to find new regional opportunities. Where are the mass migrations to the North Dakota oil fields?
The Environmental Protection Agency has slapped a $6.8 million penalty on oil refiners for not blending cellulosic ethanol into gasoline, jet fuel and other products. These dastardly petroleum mongers are being so intransigent because cellulosic ethanol does not exist. It remains a fantasy fuel. The EPA might as well mandate that Exxon hire Leprechauns.
As a screen shot of EPA’s renewable fuels website confirms, so far this year - just as in 2011 - the supply of cellulosic biofuel in gallons totals zero.
“EPA’s decision is arbitrary and capricious. We fail to understand how EPA can maintain a requirement to purchase a type of fuel that simply doesn’t exist,” stated Charles Drevna, president of American Fuel & Petrochemical Manufacturers (AFPM), the Washington-based trade association that represents the oil refining and petrochemicals industries.
I will remind Republicans thought that ethanol is a bipartisan turd, this particular requirement having been signed into law by President Bush.
For years, one of the problems I have had with the way CO2 cap and trade systems were structured was a fear that these systems would devolve into cronyism, with the companies best able to lobby the government getting allocations while less connected companies had to pay. It seems this is already occuring in California:
The California Air Resources Board (ARB), the regulator of the forthcoming program, held a workshop in Sacramento on Monday where it discussed plans to give away more free permits to prevent leakage in “trade-exposed” industries like cement production, oil refining and food processing.
Over the first three allowance auctions, which begin in November, the state will sell 48.9 million allowances and give away 53.8 million allowances, according to ARB.
Any company deemed to have either a high, medium or low risk of leaving the state will receive all the allowances they need to comply with the program during the first two-year compliance period, from 2013-2014, rather than have to buy the permits at regular auctions.
But those in the low and medium risk groups are currently scheduled to see their allotment of free allowances start to decline in 2015 by as much as half.
ARB officials on Monday said they are conducting studies examining the leakage risk of companies based on their historical energy costs and trade flows.
Don't be fooled by the quasi-scientific-sounding language here about categories of "trade exposure." The reality will be that companies with political clout will get the permits, and companies without such clout will not. This is a system that will favor large manufacturers over smaller companies. It will also, oddly, apparently shift the burden of compliance from large manufacturers to service companies (since service companies are the least likely to be "trade exposed.") Of course, any manufacturer still operating plants in California is crazy anyway.
So, why do we have all these "dirty" coal plants? Market failure? Industry greed? Nope -- Carter-era government policy. For you younger folks, here is a law you may have never heard of:
The Powerplant and Industrial Fuel Use Act (FUA) was passed in 1978 in response to concerns over national energy security. The 1973 oil crisis and the natural gas curtailments of the mid 1970s contributed to concerns about U.S. supplies of oil and natural gas. The FUA restricted construction of power plants using oil or natural gas as a primary fuel and encouraged the use of coal, nuclear energy and other alternative fuels. It also restricted the industrial use of oil and natural gas in large boilers.**
In other words, all new fossil fuel-powered boilers had to be coal-fired (which in a year or so, after Three Mile Island, translated to all new boilers since nuclear was essentially eliminated as an option). Yes, this may seem odd to us in an era of so much environmental concern over coal, but something coal opponents don't tell you is that many of the exact same left-liberal-government-top-down-energy-policy types that oppose coal today lobbied hard for the above law several decades ago. Here is a simplified timeline:
1. Government energy policy sets price controls that create artificial shortages of oil and gas
2. Government-created shortages of oil and gas lead to this law, with government demanding that all new fossil fuel-powered electric plants and boilers be coal powered.
3. Government mandates on coal use create environmental concerns, which lead to proposals for taxes and bans on coal power.
4. The need for government action against coal is obviated by a resurgence of oil and gas supply once government controls were removed. However, in response, government beings to consider strong controls on expansion in oil and gas production (e.g. fracking limits).
** I got involved with this because I worked in an oil refinery in the 1980's. We had to get special exemptions to run our new boilers on various petroleum products (basically byproducts and waste products of the refining process). Without these, the law would have required we bring in coal to run our oil refinery furnaces.
My new column is up this week, and is a response to the July 2012 issue of Popular Science which includes a long, unbalanced attack on skeptics, without once addressing their scientific arguments.
I thought I knew what “science” was about: the crafting of hypotheses that could be tested and refined through observation via studies that were challenged and replicated by the broader community until the hypothesis is generally accepted or rejected by the broader community.
But apparently “popular science” works differently, if the July 2012 article by Tom Clynes in the periodical of that name is any guide [I will link the article when it is online]. In an article called “the Battle,” Clynes serves up an amazing skewering of skeptics that the most extreme environmental group might have blushed at publishing. After reading this article, it seems that “popular science” consists mainly of initiating a sufficient number of ad hominem attacks against those with whom one disagrees such that one is no longer required to even answer their scientific criticisms.
The article is a sort of hall-of-fame of every ad hominem attack made on skeptics – tobacco lawyers, Holocaust Deniers, the Flat Earth Society, oil company funding, and the Koch Brothers all make an appearance.
Thousands of words about critical issues like Heartland Institute's funding, but less than two dozen dedicated to dismissing skeptic's scientific concerns. And that is before we get to outright journalistic fraud, as the author attempts, for example, to lay blame for Obama Administration financial audits of climate scientists on, you guessed it, skeptics. Read it all
Turns out the guy who gasses up a school bus has a green job.
When Bureau of Labor Statistics Acting Commissioner John Galvin balked on what qualifies as a green job under the agency definition, Issa responded, “Just answer the question.”
“Does someone who sweeps the floor at a company that makes solar panels -- is that a green job?” Issa asked.
“Yes,” replied Galvin, who also acknowledged that a bike-repair shop clerk, a hybrid-bus driver, any school bus driver and “the guy who puts gas in a school bus” are all defined as green jobs.
He also acknowledged that an oil lobbyist, if his work is related to environmental issues, would also have a green job.
It gets better. Apparently, when I worked at the Exxon refinery in Baytown, TX, I had a green job:
The Bureau of Labor Statistics states a green job is either: a business that produces goods or provide services that benefit the environment or conserve natural resources, or a job in which a worker's duties involve making their establishment's production processes more environmentally friendly or use fewer natural resources
I have never encountered an industrial engineering job anywhere that was not concerned with having their processes use fewer natural resources.
I would argue the greenest of jobs are held by oil and other commodity speculators and traders. They ensure that prices at all times accurately match our current understanding of the scarcity of each resource. Without these accurate pricing signals, all efforts to properly invest to use more or fewer of these materials would be impossible. Just look at the "success" of investments like Solyndra that were made irregardless of these market pricing signals.
There is nothing surprising or unpredictable about the current oil boom, except perhaps how far it has gotten in the face of an Administration that has done virtually everything it can to stop it (thank god there is oil and gas under private land). Your humble scribe, neither an economist nor an expert in oil markets, wrote way back in 2005:
Everything old is new again. Back in the late 70′s, all the talk was about the world running out of oil. Everywhere you looked, "experts" were predicting that we would run out of oil. Many had us running out of oil in 1985, while the most optimistic didn’t have us running out of oil until the turn of the century. Prices at the time had spiked to about $65 a barrel (in 2004 dollars), about where they are today. Of course, it turned out that the laws of supply and demand had not been repealed, and after Reagan removed oil price controls and goofy laws like the windfall profits tax, demand and supply came back in balance, and prices actually returned to their historical norms....
Supply and demand work to close resource gaps. In fact, it has never not worked. The Cassandras of the world have predicted over the centuries that we would run out of thousands of different things. Everything from farmland to wood to tungsten have at one time or another been close to exhaustion. And you know what, these soothsayers of doom are 0-for-4153 in their predictions. ...
The vagaries of reserve accounting are very difficult for outsiders to understand. I am not an expert, but one thing I have come to understand is that reserve numbers are not like measuring the water level in a tank. There is a lot more oil in the ground than can ever be recovered, and just what percentage can be recovered depends on how much you are willing to do (and spend) to get it out. Some oil will come out under its own pressure. The next bit has to be pumped out. The next bit has to be forced out with water injection. The next bit may come out with steam or CO2 flooding. In other words, how much oil you think will be recoverable from a field, ie the reserves, depends on how much you are willing to invest, which in turn depends on prices. Over time, you will find that certain fields will have very different reserves numbers at $70 barrel oil than at $25....
All the oil doomsayers tend to define the problem as follows: Oil production from current fields using current methods and technologies will peak soon. Well, OK, but that sure defines the problem kind of narrowly. The last time oil prices were at this level ($65 in 2004 dollars), most of the oil companies and any number of startups were gearing up to start production in a variety of new technologies. I know that when I was working for Exxon in the early 80′s, they had a huge project in the works for recovering oil from oil shales and sands. Once prices when back in the tank, these projects were mothballed, but there is no reason why they won’t get restarted if oil prices stay high.
Postscript: I really need to find new topics to blog about. The adjacent article in 2005 included this, a frequent topic on this site. I had not idea I was writing about this so long ago:
When health care is paid for by public funds, politicians only need to argue that some behavior affects health, and therefore increases the state’s health care costs, to justify regulating the crap out of that behavior. Already, states have essentially nationalized the cigarette industry based on this argument.
Hey, Obama Administration! The evil speculators are moving oil prices again. Time to get after them. Hello? Anyone there? Where did everyone go?
I don't really want to ridicule Kevin Drum here for thinking out loud. I really hate partisan Conservative and Liberal team-politics blogs, but I read a few to stay out of the echo chamber, and Drum is smarter and incrementally more objective (a relative thing) than most.
These two things together reminded me about an energy factoid that's always struck me as slightly odd: virtually every form of energy seems to be almost as efficient as burning oil, but not quite.
For example, on either a power/weight basis or a cost basis, batteries are maybe 2x or 3x bigger and less efficient than an internal combustion engine. Not 50x or 100x. Just barely less efficient. And you see the same thing in electricity generation. Depending on how you do the accounting, nuclear power is maybe about as efficient as an oil-fired plant, or maybe 2x or 3x less efficient. Ditto for solar. And for wind. And geothermal. And tidal power.
I'm just noodling vaguely here. Maybe there's an obvious thermodynamic explanation that I'm missing. It's just that I wouldn't be surprised if there were lots of ways of generating energy that were all over the map efficiency-wise. But why are there lots of ways of generating energy that are all surprisingly similar efficiency-wise? In the great scheme of things, a difference of 2x or 3x is practically invisible.
First, we have to translate a bit. He mentions power to weight ratios for batteries in the second paragraph. In fact, batteries have terrible power (actually energy storage) to weight ratios vs. fossil fuels, much worse than 2-3x for energy storage per unit of weight or volume. That is why gasoline is still the transportation energy source of choice, because very few things short of plutonium have so much potential energy locked up in so little volume. But I will assume he is comparing an entire electric drive system compared to a gasoline drive system (including not just energy storage but the drive itself) and in this case the power to weight ratios are indeed closer.
But here is the problem: in engineering, a 2-3x difference in most anything -- strength, energy efficiency, whatever -- is a really big deal. It's the difference between 15 and 45 MPG. Perhaps this is Moore's Law corrupting our intuition. We see electronic equipment becoming twice as powerful every 18 months, and we start to assume that 2x is not that much of a difference.
But this is why Moore's Law is so much discussed, because of its very uniqueness. In most fields, engineers tinker for decades for incremental improvements, sometimes in the single digit percentages.
The fact that alternative energy supporters feel like their preferred technologies are just so close, meaning they are only 2x-3x less efficient than current technologies, explains a lot about why we skeptics of these technologies have a hard time getting through to them.
I have written a number of times on the silliness of food miles and the locavore movement (here and here and here). For some reason the energy and resource intensity of foods is being judged merely on one component - transportation of the end product - which actually is only a tiny competent of food costs (and thus their resource use). Is it really more environmentally sensitive for us Phoenicians to grow our corn in the Arizona desert, where soils are unproductive and water must be imported from hundreds of miles away, rather than have it grown in the fertile soils of Iowa and trucked in?
TWO brands of olive oil, one from Australia, the other shipped 16,000 kilometres from Italy, sit on a supermarket shelf.
Most eco-friendly shoppers would reach for the Australian oil. But despite burning less fossil fuel to get here, it may not be better for the planet.
Contrary to popular belief, ''food miles'', or the distance food has travelled before we buy it, is a poor indicator of our food's total greenhouse gas emissions, or ''carbon footprint''.
More important is the way our food is farmed and produced, and how far we drive to buy it....
It turns out that stuff like economies of scale really matter
''Local food can often have a higher carbon footprint than food from afar,'' says principal researcher Brad Ridoutt.
He says even home-grown vegetables, with ''zero food miles'', do not necessarily have a smaller carbon footprint than those bought in the supermarket.
''With my veggies, I drive to Bunnings to buy fertiliser, and I go away for the weekend and forget to water them, and in the end I only harvest a few things that I can actually eat.
''By contrast, big producers, who can invest in the latest energy-efficient, water-efficient technology, and make use of all the parts of food, can be much more efficient,'' he says.
Of course, transporting food from producer to retailer still burns fossil fuels that release greenhouse gas emissions, in turn accelerating global warming. But freight emissions are only a fraction of those released during production, meaning even imported food, sustainably produced, can have a smaller carbon footprint than local alternatives.
Even the most rudimentary reading of economics should have given greenies a clue. In commodity products like most foods, prices tend to be driven down to a point that they reflect resources (and their relative scarcity) that went into the product. The cheapest foods tend to be those that use the least, and least scarce, resources in production. So buying locally grown food, which often tends to carry a price premium, should have been a flashing red light that maybe this was not the least-resource-intensive choice.
My Forbes article is up for this week, and discusses 10 reasons why legislation frequently fails. A buffet of Austrian economics, Bastiat, and public choice theory that I wrote for the high school economics class I teach each year.
Here is an example:
3. Overriding Price Signals
The importance of prices is frequently underestimated. Prices are the primary means by which literally billions of people (most of whom will never meet or even know of each others' existence) coordinate their actions, without any top-down planning. With rising oil prices, for example, consumers around the world are telling oil companies: "Go find more!"
For a business person, prices (of raw materials, labor, their products, and competitive products) are his or her primary navigation system, like the compass of an explorer or the GPS of a ship. And just as disaster could well result from corrupting the readings of the explorer's compass while he is trekking across the Amazon, so too economic damage can result from government overriding price signals in the market. Messing with the pricing mechanisms of markets turns the economy into a hall of mirrors that is almost impossible to navigate. For example:
- In the best case, corrupting market prices tends to result in gluts or shortages of individual products. For example, price floors on labor (minimum wages) have created a huge glut of young and unskilled workers unable to find work. On the other side, in the 1970s, caps on oil prices resulted in huge shortages in the US and those famous lines at gas stations. These shortages and gas lines were repeated several times in the 1970's, but never have returned since the price caps were phased out.
- In the worst case, overriding market price mechanisms can create enormous problems for the entire economy. For example, it is quite likely that the artificially low interest rates promoted by the Federal Reserve over the last decade and higher housing prices driven by a myriad of US laws, organizations, and tax subsidies helped to drive the recent housing and financial bubble and subsequent crash. Many will counter that it was the exuberance of private bankers that drove the bubble, but many bankers were like ship captains who drove their ships onto the rocks because their GPS signal had been altered