IER Applauds Monuments Executive Order

WASHINGTON – The Institute for Energy Research (IER) applauds President Trump for instructing the Interior Department to review national monument designations under the Obama administration. IER President Thomas Pyle released the following statement:

“President Trump’s executive order shows that his administration remains committed to unleashing America’s energy potential. While energy production has surged on state and private lands over the past decade, production on federal lands has lagged far behind. This disparity is largely due to the previous administration’s keep-it-in-the-ground tactics, including President Obama’s abuse of the Antiquities Act. These tactics were on full display when President Obama unilaterally blocked off large swaths of land in Nevada and Utah in the eleventh hour of his presidency.

“Federal lands belong to the public and the public should enjoy all the benefits those lands have to offer, whether for recreation, energy development, or otherwise.

“Today’s executive action highlights a more pressing issue, which is the need for Congress to revisit the Antiquities Act. Congress can no longer sit on the sidelines and must take action to limit the executive branch’s authority when it comes to designating monuments.”

Click here to read IER’s analysis of the Obama administration’s eleventh-hour land grab.

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China and the Paris Climate Accord

With the United States rolling back Obama-era regulations and possibly exiting the Paris climate accord, some analysts are assuming that China will take over its leadership.[i] And, that may be the case. China has nothing to lose. The country pledged to keep increasing its greenhouse gas emissions through 2030 as it continues to grow its economy, and then begin to decrease them. This is widely different from the U.S. pledge to decrease those emissions by 26 to 28 percent by 2025 (from 2005 levels). As a result, China is enjoying increasing its electrification of communities and supplying energy to fuel its economy by using mainly coal-fired electricity. The majority (83 percent) of its growth in electricity demand for the first quarter of 2017 was fueled by thermal energy (mainly coal).[ii]

Source: http://chinaenergyportal.org/en/2017-q1-electric-power-statistics/

*Thermal includes coal, gas, oil, and biomass

China’s Electric Sector, 2016

In 2016, according to China’s statistics, China’s electricity demand rose 5.2 percent and was fueled mainly by coal (65 percent) and hydropower (20 percent). While nuclear generation increased by 24 percent, it only represented 3.6 percent of the total generation in 2016. Non-hydroelectric renewables represented just 6 percent of the total generation in that year. While wind generation increased by 30 percent, it represented just 4 percent of total generation. Solar generation increased by 72 percent, but represented just 1 percent of total generation. (See graphs below.)

Note: Growth of ‘Other thermal’ includes that of biomass power generation. No statistics for 2016 are currently available, but it was 57.8 terawatt-hours in 2015.

Source: http://chinaenergyportal.org/en/2016-detailed-electricity-statistics/

In 2016, the traditional energy sources (coal, natural gas, petroleum, and nuclear) increased by 153 terawatt-hours—led by coal at 52 terawatt-hours. Hydroelectric power and pumped storage added an additional 69 terawatt-hours, followed by wind (56 terawatt-hours), and solar (28 terawatt-hours). See graph below.

Source: http://chinaenergyportal.org/en/2016-detailed-electricity-statistics/

China’s Wind Power Curtailment

In 2016, newly installed capacity of wind power in China was 19.3 gigawatts and cumulative installed wind capacity totaled 149 gigawatts–9 percent of the total installed power generation capacity. However, while wind capacity was at 9 percent of total capacity, wind generation was just 4 percent of total generation (241 terawatt-hours). In order to ensure stability of its electric grid, China had to curtail 49.7 terawatt-hours of wind generation—17.1 percent of total wind power production. That curtailment was an increase of 47 percent from the prior year and equivalent to the total amount of wind generation in Spain. (See graph below.)

Source: http://chinaenergyportal.org/en/2016-wind-power-installations-production-province/

China’s Future Coal Generation

The International Energy Agency in its World Energy Outlook 2016 projects in its “New Policies Scenario” that over the next 35 years, the amount of electricity that China is expected to produce from coal will increase by 4.3 percent while the amount of coal it will use to generate that electricity will decline by 4.6 percent. That is because China is leading the world in constructing the latest super-critical and ultra-super-critical low-emission-coal technology. This technology operates at much higher temperatures and pressures, increasing the efficiency of turning coal into electricity by up to 30 percent, and enabling new-technology power stations to generate more electricity while emitting less carbon dioxide and criteria pollutants (such as particulates, sulfur dioxide, and nitrogen oxides). While former President Obama’s war on coal had the Environmental Protection Agency implementing regulations to decrease the use of coal in the United States, China was and is implementing technology to make its coal-fired power plants more efficient while improving local air quality.[iii]

Conclusion

The Obama administration’s climate negotiators did not put American interests first. In essence, in the Paris accord, those countries that offered the most, like the United States, would end up losing the most. While supporters of the Paris Agreement argue that U.S. withdrawal would put the world’s climate at risk, what the Paris agreement really does is put the future of American families and businesses at a great disadvantage. Meanwhile, China is taking action to grow its economy by continuing to use coal and to invest in the low emission coal technology. The United States should learn from China’s example and invest in that coal technology, as well, putting our miners back to work and ensuring centuries of coal-fired generation to fuel its economy.


[i] The Hill, China can take reins of clean-energy boom should US falter, April 10, 2017, http://thehill.com/blogs/pundits-blog/energy-environment/328132-should-us-falter-china-poised-to-capitalize-on-clean

[ii] https://twitter.com/ChnEnergyPortal/status/854285874821033984

[iii] National Review, The U.S. Should Abandon the Paris Agreement and Learn from China, December 7, 2016, http://www.nationalreview.com/article/442822/paris-climate-agreement-united-states-clean-power-plan-china-coal-emissions

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Green Jobs: A Bipartisan Mirage

Bipartisanship—that romanticized political ideal of a bygone era when Democrats and Republicans could commune together without vitriol and unite behind shared goals—is dead.

Five months removed from the most socially-divisive presidential election in living memory, the likelihood of politicians reaching across the aisle to work together seems exceedingly thin. Political scientists describe our present era as among the most polarizing in our nation’s history.

But, for some, there is hope. Like Rocky speaking to the crowd after defeating Ivan Drago, these merchants of bipartisanship proclaim, “If I can change, and you can change, everybody can change.”

This bipartisan platform—this unicorn—is the promise of green jobs.

Jobs in industries like wind and solar, advocates profess, are a political panacea—soothing the environmental concerns of the left and the employment concerns of the right in one fell swoop. The record does in fact show that both Democrats and Republicans have considered green jobs a winning issue. South Carolina Republican Senator Lindsey Graham, one of four senators from the party to spearhead the Senate Energy and Environment Working Group, argued in 2015, “We must have energy independence. And in the process, I believe it is possible to produce a safe, clean environment, and create new well-paying jobs for Americans of all generations.” Former New Hampshire Senator Kelly Ayotte, another then-member of the working group, said the purpose was to “focus on ways we can protect our environment and climate while also bolstering clean energy innovation that helps drive job creation.” House Minority Leader Nancy Pelosi’s website touts green jobs in stunningly similar terms, “Now more than ever, House Democrats want to move America in a new direction for energy independence — working to lower energy prices, make America more secure, and launch a cleaner, smarter, more cost-effective energy future that creates hundreds of thousands of clean energy jobs.”

And to much publicity, green jobs are indeed on the ascent. As the Washington Post reported last week, the fastest-growing occupation in the country is wind turbine technician.

The Department of Energy’s recently released U.S. Energy and Employment Report reveals a trove of interesting data on this topic. It informs us, for example, that solar technologies employ 374,000 workers in the US—a whopping 43 percent of the electricity generation workforce. Wind employs another 102,000 workers—accounting for 12 percent of the electricity generation workforce—meaning that these touted green jobs now make up over half of our electricity generation jobs in total. Coal, oil, and natural gas, meanwhile, employ 87,000 workers—just 22 percent of the electricity generation workforce. Now, of course, we must take into account that the coal, oil, and natural gas electricity generation number doesn’t include the hundreds of thousands of workers who ply their trade closer to the sources’ extraction points and are classified under the “fuels” designation rather than the “electricity generation” designation.

Nevertheless, the volume and growth of green jobs is noteworthy. The number of jobs added from 2015 to 2016 in wind and solar dwarfs the new job additions in coal, oil, and natural gas electricity generation by a ratio of more than six to one. Solar employment expanded by 25 percent from 2015 to 2016 and wind increased by 32 percent.

That sure sounds like a bipartisan winner, doesn’t it? 25 to 30 percent growth is—as the president might say—tremendous.

And yet, something is wrong with this picture. The job numbers are there, but something more critical isn’t: actual electricity generation.

Despite green jobs making up more than half of the jobs in the electricity generation sector, wind and solar combined to generate a paltry 6.5 percent of our central station electricity in 2016, with wind producing 5.6. That means that despite accounting for 43 percent of the electricity generation workforce, solar energy produced less than one percent of our central station electricity. When distributed generation is included, it produced another 0.5 percent of generation for a total of 1.4 percent.

Let me state that again: solar accounts for 43 percent of the electricity generation workforce. And it generates about one percent of our electricity.

What if other sectors of our economy looked this way?

What if McDonald’s employed 43 percent of all burger joint employees nationwide, but could only produce one percent of the burgers needed by a hungry public?

You’d rightly suspect something had gone very wrong in someone’s economic calculations. That’s the situation we’re in now with these touted green jobs.

Something has clearly gone amiss.

At this point you might be thinking, “Well, yes, the electricity generation is low now for solar, but many of those 374,000 jobs are in solar construction, so we’re on the verge of a solar generation windfall, right?”

Wrong.

Despite the vigorous appearance that the green jobs growth numbers give wind and solar, the Energy Information Agency forecasts that the electricity fuel mix will remain virtually unchanged for the next two years. EIA estimates solar will move from producing just under one percent in 2016 to 1.4 percent of our central station (utility-scale) electricity in 2018. Coal, for comparison, is expected to climb as well—from 30.4 percent in 2016 to 31.1 percent in 2018—as natural gas prices rise.

If 2018 is too short a time horizon to dash your hopes for solar productivity, consider EIA’s long-range projections. In its non-Clean Power Plan scenarios even in year 2040—more than two decades from now—all of the sources EIA classifies as renewables (hydroelectric, biomass, wind, solar, etc.), which today combine to make up about 15 percent of our electricity, will still combine to produce only about a quarter of our electricity in 2040.

Solar energy will produce about 6 percent in 2040. Wind will produce about 9 percent. And natural gas and coal will supply around 34 percent and 28 percent respectively.

With the current electricity fuel mix and long-range projections showing a rather marginal—and at best supplementary—role for solar and wind, we’re left to wonder: are green jobs the bipartisan silver bullet they’re cracked up to be or are they instead a bipartisan mirage?

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Governor Cuomo Objects to Pipelines Despite Acknowledging their Necessity

New York Governor Cuomo claims that he supports pipeline infrastructure, commenting that pipelines are viewed as the least hazardous method of moving a combustible fuel. Cuomo further stated, “Many studies say that using a pipeline as a conduit is safer than rail travel and truck travel. Realistically you have to move fuel, so a pipeline is the safest way if it’s done right.” Yet, within the last year, his Department of Environmental Conservation denied certification to the proposed Northern Access pipeline and water permits sought by the Constitution Pipeline.[i] Cuomo has also fought the Algonquin Pipeline expansion and has been dawdling on an 8-mile spur to a new power plant in Wawayanda.[ii]

While New York State has access to a portion of the Marcellus natural gas field, Governor Cuomo has banned the use of hydraulic fracturing to extract the natural gas from that field. Nearby Pennsylvania, however, has used that technology along with horizontal drilling to develop its Marcellus field, benefiting from the natural gas produced from it. The pipelines would bring natural gas from Pennsylvania to New York, but Governor Cuomo is denying the residents of New York State access to that natural gas by limiting the expansion of pipeline capacity.

Northern Access Pipeline

The Northern Access Pipeline is a 97-mile project that would bring natural gas from the Marcellus field in Pennsylvania to consumers in Western New York. The 24-inch diameter pipeline would bring at least 1,000 construction jobs.

But, according to Governor Cuomo, the risk to the environment and water quality outweigh these jobs, despite his claim to be an advocate of natural gas as a bridge fuel to help get to his state’s 50 percent renewable energy pledge by 2030.

Others feel Cuomo is catering to anti-pipeline activists, with no regard for the economic consequences and the role of natural gas in reducing overall energy costs. They feel Governor Cuomo should decide on a standard rather than trying to look good politically. Governor Cuomo is a Democrat who faces re-election for a third term next year.

Constitution Pipeline

The Constitution Pipeline is a 124-mile pipeline designed to transport 650,000 dekatherms of natural gas per day (enough natural gas to serve approximately 3 million homes). The 30-inch diameter pipeline would extend from Susquehanna County, Pennsylvania, to the Iroquois Gas Transmission and Tennessee Gas Pipeline systems in Schoharie County, in eastern New York. This project would provide over 1,300 construction jobs and support almost 1,000 indirect jobs. It is expected to create $130 million dollars of new local payroll in areas of New York State that need it the most and to generate $17 million in new sales and income tax revenue.

The Federal Energy Regulatory Commission (FERC) approved the project on December 2, 2014 after issuing its Final Environmental Impact Statement on October 24, 2014, concluding that environmental impacts would be “less than significant levels” with the implementation of proposed mitigation measures by the pipeline sponsors and FERC. However, on April 22, 2016, the New York Department of Environmental Conservation denied Constitution Pipeline’s Water Quality Certification.

The pipeline company is appealing New York’s decision to the U.S. Circuit Court of Appeals. The company expects the pipeline to begin operation as early as the second quarter of 2018, assuming that legal challenges are “promptly and satisfactorily concluded.” It remains firmly committed to obtaining the necessary permits and moving forward with the project.[iii]

New York State Needs the Natural Gas

Currently, natural gas supplies 57 percent of the electric generation capacity in New York State, and as more of the state’s coal and nuclear power plants are scheduled to be shut down, new gas-fired plants are being built to replace them. New natural gas pipelines are needed to connect natural gas supplies to New York consumers. As New York continues its long-term transition to more and more renewable electric generation, natural gas supply is essential to power the state’s generators and support the reliability of the power grid. [iv]

Conclusion

Governor Cuomo is playing games with pipeline construction in the hopes of winning a third term as governor of New York State by kowtowing to environmentalists, who want to squelch pipelines in order to keep fossil fuels in the ground. But, Cuomo’s actions are hurting the residents of New York State, who need the natural gas to heat their homes and to fuel their electric generators in order to keep the lights on and their houses warm.


[i] Press Republican, Cuomo outlines concerns on pipeline expansion, April 16, 2017, http://www.pressrepublican.com/news/local_news/cuomo-outlines-concerns-on-pipeline-expansion/article_be008895-4ade-5ead-af72-0e89d0120677.html

[ii] NY Post, Why does Cuomo keep rejecting pipelines New Yorkers could benefit from? April 16, 2017, http://nypost.com/2017/04/16/why-does-cuomo-keep-rejecting-pipelines-new-yorkers-could-benefit-from/

[iii] State Impact, March 17, 2017, https://stateimpact.npr.org/pennsylvania/2017/03/17/federal-judge-rejects-permits-challenge-in-new-setback-to-constitution-pipeline/

[iv] WIVB, Northern Access Pipeline comes to a halt; National Fuel responds, April 8, 2017, http://wivb.com/2017/04/08/northern-access-pipeline-comes-to-a-halt/

 

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Trump Administration Should Be Wary of Shifting Carbon Tax Pitch

An op-ed in The Hill from the R Street Institute showcases yet again the shifting goal posts in the carbon tax debate. Before Donald Trump won the White House, a few vocal writers urged conservatives and libertarians that only by offering a massive new carbon tax, could they hope to win the rollback of top-down environmental regulations. Yet now that the Trump Administration is moving forward on such a rollback, the argument (from R Street and others) is that we should still go ahead with a carbon tax anyway. Besides the shifting rhetoric, these appeals also mislead readers on just how damaging a carbon tax would be to the economy—as even its supporters implicitly admit with their own models.

R Street Wants to Snatch Defeat From the Jaws of Victory

Catrina Rorke, R Street senior fellow and author of The Hill op-ed, pitches Republicans on a carbon tax in this way:

[I]f the administration is serious about getting tax reform over the finish line, [a Value Added Tax or a carbon tax] would be two pretty good bets to raise revenue.

In 2010…deficit reduction was the cause du jour. While the debate ultimately resulted in budget sequestration…a number of commissions…assembled proposals to improve fiscal discipline and reform the tax code. Of the seven most prevalent proposals, four included revenue from either a gas tax or carbon price…

A carbon price…fits well into the administration’s other plans. As part of the campaign, President Trump promised again and again a new way forward on regulation and energy. In an executive order last week, Trump ordered the substantial rollback of a number of regulatory policies to address carbon emissions, on top of a requested 31 percent cut to the Environmental Protection Agency’s budget…

If this year’s health-care debate proved anything, it’s that efforts to roll back Obama-era policies are highly susceptible to political backlash….Pairing permanent removal of the EPA’s authority to regulate carbon emissions with a transparent carbon price might take the fire out of potential protests, give the GOP the upper hand in a major environmental-policy fight and bring moderate Democrats into the fold on tax reform.

Moreover, carbon pricing can raise serious revenue. A 2013 estimate from the Congressional Budget Office suggested that a carbon tax could raise $1.2 trillion over 10 years…R Street research suggests that even a relatively modest carbon price actually could replace corporate taxes entirely, turning the United States into the most competitive investment climate in the world. [Emphasis added.]

Notice the attempt to spin history in a way that undercuts the clear-cut victories for limited government. Rorke’s own narrative admits that during the 2010 battle, the resolution ultimately involved large cuts (“large” by Washington standards) to federal spending; Paul Krugman at the time called the sequester a “fiscal doomsday machine,” such was his panic over the austerity.

Moreover, Rorke’s own narrative admits that President Trump has already ordered the regulatory rollbacks and proposed EPA spending cuts that were supposed to be the prize for giving in on a carbon tax. On the issue of top-down environmental regulation, conservatives and libertarians just picked up their flush and now Rorke is advising them to fold.

A Carbon Tax Will Hurt the Economy

Of course, Rorke’s op-ed soon enough reveals the real reason policymakers may be tempted to go down the carbon tax path: gushers of money. The American public has been subjected to a long campaign of claims that a “revenue neutral” carbon tax can provide a “win-win,” where we mitigate the potential dangers of climate change while at the same time spurring conventional economic growth through offsetting tax cuts.

Yet even using the very models from the pro-carbon tax camp, promises of a “win-win” outcome rest on impossible political scenarios. Consider a chart from a 2013 Resources for the Future (RFF) study (source and analysis here)—and keep in mind that RFF as an organization is favorable to a carbon tax.

 

Source: earlier IER article.

In the above chart taken from the 2013 RFF study, we see that if a new carbon tax is used to fully fund any of (a) lump-sum rebates to households (purple line), (b) a reduction in sales taxes (green line), or (c) a reduction in payroll taxes (red line), then GDP will be stifled. So we see that a revenue-neutral carbon tax is not sufficient to spare the economy.

Only if all $1.2 trillion over ten years in new revenue from a hypothetical carbon tax were devoted entirely to reducing taxes on capital (e.g. the corporate income tax, and personal taxes on dividends and capital gains), does the RFF simulation show the economy benefiting from the “tax reform.”

So you have to ask yourself: Are environmental groups and other progressives going to abide by this type of outcome? Are they really going to sign on for a deal where gasoline and electricity prices rise substantially (because of the new carbon tax), but where poor households don’t get any tax breaks because all of the trillion-plus in new revenue is devoted to lowering the tax bill for hedge fund managers?

At this point, these aren’t even hypothetical questions. The recent ballot proposal for a revenue-neutral carbon tax in Washington State showed that progressive groups do not endorse the idea—and that particular scheme involved a cut in the sales tax and an increase in the Working Families Tax Rebate. You can imagine how unpopular the Washington proposal would have been, had it directed all carbon tax receipts to cutting taxes on corporations and capitalists.

Conclusion

Policymakers and the public need to step back and realize they are being conned. The people pushing for a “carbon tax swap deal” have shifted their arguments; conservatives and libertarians have already achieved fiscal and regulatory victories that they were told would be impossible.

In any event, imposing a new carbon tax would cause great pain to the economy, and rising energy prices would impact poor households in particular. If the carbon tax advocates want to admit that honestly and say that the avoided climate change damages (accruing 50+ years into the future and beyond) justify the present pain, fair enough; we can have that debate. But so far many of the most prominent pro-carbon tax voices are misleading Americans on the actual impacts of their plan.

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Forbes Column: Ban Fracking? Bad Economics, Bad Ecology

Institute for Energy Research Founder and CEO Robert Bradley recently penned a column for Forbes.com titled “Ban Fracking? Bad Economic, Bad Ecology.” In the piece, Bradley explains how the practice of hydraulic fracturing is not only safe but also helps bolster America’s economy. Read the piece below:

Forbes
Ban Fracking? Bad Economics, Bad Ecology
By Robert Bradley Jr.
April 13, 2017

Warning: low-cost, clean energy may be hazardous to your health.

Or so say environmental activists who will trot out any line of attack in their crusade against fossil fuels.

For years, the green movement has spread falsehoods about hydraulic fracturing — or fracking — the practice of unlocking hydrocarbons by injecting high-pressure liquid deep into the earth. Lately, the leave-it-in-the-ground lobby has doubled down on its mission to thwart the latest oil and gas extraction techniques.

But research consistently shows that fracking is a secure — and economically savvy — form of energy production. Banning it, as New York State and Maryland have done, hurts economies — and the environment.

False Issues

Critics have recently blamed fracking for releasing chemicals that cause asthma and premature births. Others allege that noise from fracking disrupts those sleeping nearby, leading to stress, high blood pressure, diabetes and even heart disease. Still others believe chemical spills and pipeline cracks are contaminating water in states like Pennsylvania.

These claims are designed to scare legislatures and city councils into make fracking illegal. The critics’ playbook seems to be: deploy any seemingly plausible claim and see what sticks.

In Nevada, for example, lawmakers are debating whether to end fracking, even though it would come at the expense of the state’s economy. Counties and towns in California and Ohio are also attempting to shut down the now routine practice.

Fracking is Safe

The new prohibitionists are grasping at straws.

In 2015, the Environmental Protection Agency released a study on the environmental impacts of fracking on drinking water. It found no evidence that fracking “led to widespread, systemic impacts on drinking water resources.”

A recent review of the report attributed this to strong industry safety standards, as well as effective state and local fracking oversight and regulation.

Indeed, the oil and gas industry has 600 different standards for overseeing the fracking process, many of them specifically to construct wells safely and protect groundwater. And fracking sites are subject to federal and state regulation and regular audits. Meanwhile, gas and oil companies closely collaborate with towns and communities near drilling sites.

Further fortifying the EPA’s report, the agency’s previous administrator, Lisa Jackson, declared that there was not a “proven case where the fracking process itself has affected water.” Former Secretary of the Interior Ken Salazar declared that he “would say to everybody that hydraulic fracking is safe.” And Ernest Moniz, former Secretary of Energy, admitted, “I still have not seen any evidence of fracking per-se contaminating ground water.”

And as for harmful airborne chemicals? Academics, state regulators, and even the EPA have found no link between poor air quality and fracking.

Meanwhile, some critics allege that fracking causes earthquakes. But numerous studies debunk these claims.

America’s Gain

Not only is fracking safe, it also bolsters America’s economy and communities.

Spurred by fracking, the energy renaissance has supported millions of jobs and saved taxpayers nearly three-quarters of a billion dollars in energy costs.

Banning fracking would not only surrender these economic benefits, but compromise America’s access to affordable energy. More than 45 percent of the nation’s oil and 60 percent of its natural gas comes from this technology. And contrary to claims that the days of cheap gas have ended, America has an untapped 800 trillion cubic feet of natural gas, which can be cultivated for $3 or less per thousand cubic feet.

What if, in a radical anti-energy world, fracking had been banned country-wide? “What if … America’s energy renaissance never actually happened?” asked an analysis by the U.S. Chamber of Commerce’s Institute for 21st Century Energy.

This study’s “reality check” estimates that a retrospective ban on fracking would have caused natural gas and electricity rates to increase by about 30 percent and motor fuel prices by about 40 percent. Additionally, an estimated 4.3 million jobs would have been jeopardized, along with $548 billion in annual gross domestic product. Even half this sum would be a shocking loss.

The study notes that the fractionation boom “began quietly, mostly on private and state lands, but momentum built up quickly…as a result of the work of entrepreneurs and the application of technology and cutting edge innovation.” Lacking support from the previous administration, “the energy revolution took place in spite of — not because of — U.S. energy policy.”

Political Sport

“We are going to ban fracking in 50 states in this country,” intoned Bernie Sanders on the campaign trail. “By the time we get through all of my conditions, I do not think there will be many places in America where fracking will continue to take place,” stated Hillary Clinton last year.

Sierra Club, Greenpeace, and Bill McKibben’s 350.org promulgate the same theme of immobilizing resources for an alleged greater good.

Yet these turn-back-the-clock politicians, not to mention self-described environmentalists, do not raise an eyebrow when it comes to industrial wind turbines’ ill health effects and property devaluation.

“What happened to Bill McKibben?” asked environmentalist Suzanna Jones. Contrary to the themes in his book, Deep Economy: The Wealth of Communities and the Durable Future, McKibben became a supporter of industrial wind turbines. Jones noted: “He wants to industrialize our last wild spaces to feed the very economy he fingered as the source of our environmental problems.”

What is the anti-fracking fringe of the environmental movement refusing to acknowledge? As Robert Bryce opined in the Los Angeles Times:

Rural residents are objecting to wind projects to protect their property values and viewsheds. They don’t want to live next door to industrial-scale wind farms. They don’t want to see the red-blinking lights atop the turbines, all night, every night for the rest of their lives. Nor do they want to be subjected to the audible and inaudible noise the turbines produce.

McKibben professes sympathy to this complaint.

[Environmentalists] point out that wind turbines damage wildlife habitat and ridgeline forests…. I know that it is sadly correct that putting in tall turbines will hurt the acres where they go. That land won’t ever be the same.

But he justifies this damage with a loaded statement: “Our world is being very rapidly overtaken by climate change.”

Climate change? Is there anything that will get Bill McKibben et al. to realize that CO2 has ecological benefits, not only costs? That climate models are unreliable and overpredicting warming? That dense energy leaves a smaller ecological footprint than his favored renewable energies?

Consider the view of Peter Huber in his profound book Hard Green: Saving the Environment from the Environmentalists. “The greenest fuels are the ones that contain the most energy per pound of material that must be mined, trucked, pumped, piped, and burnt,” he states. In contrast, “extracting comparable amounts of energy from the surface would entail truly monstrous environmental disruption.”

Huber’s conclusion? “The greenest possible strategy is to mine and to bury, to fly and to tunnel, to search high and low, where the life mostly isn’t, and so to leave the edge, the space in the middle, living and green.”

Message to McKibben: frack beneath the earth, don’t bury it in wind turbines.

Conclusion

By extracting maximum energy with minimal resources, fracking actually helps the environment.

Yet anti-energy environmentalists continue to push back against fracking based on phony accusations. Americans and their political leaders should not be fooled. When it comes to energy production, the right economic policy matches the right environmental policy.

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IER’s Robert Murphy Testifying Today on Federal Energy Tax Policy

WASHINGTON – IER Senior Economist Dr. Robert Murphy will testify today before the House Energy and Commerce Subcommittee on Energy in a hearing titled, “Federal Energy Related Tax Policy and its Effects on Markets, Prices, and Consumers.” The hearing begins at 10:15 am ET and will be live-streamed on the House Energy and Commerce website.

Below is the executive summary from Murphy’s testimony:

Economists generally agree that decentralized markets, operating through private property and the profit-and-loss test, allocate resources better than top-down central planning. In the context of tax policy, this principle means that policymakers should try to raise the desired amount of revenue in a manner that distorts consumer and producer behavior as little as possible.

This principle is routinely violated when it comes to tax policy and energy markets. A recent study estimates that from 2016-2020, the federal tax code will provide artificial support through energy-specific provisions that cost the Treasury (in the form of forfeited revenues) $82.7 billion, with the renewables provisions of the Production Tax Credit and Investment Tax Credit holding the #1 and #2 spots, receiving 47.5% of the total subsidy between them.

According to the Energy Information Administration (EIA), in Fiscal Year 2013 direct federal financial interventions (a measure that includes, but is not limited to, tax expenditures) for 2 electricity production directed $5.9 billion to wind and $4.4 billion to solar, yet only $901 million for coal and $690 million for natural gas and petroleum electricity production. The difference in federal support is even more striking when adjusted for the level of output: On a per-megawatt-hour basis, in FY 2013 solar received $231 of support and wind received $35, while natural gas and petroleum received 67 cents and coal received 57 cents.

As these figures amply demonstrate, federal tax policy currently provides artificial encouragement to some sectors (such as wind and solar) at the expense of other energy sources. The popular slogan “all of the above” to characterize a sensible U.S. energy policy is defensible, if it means that policymakers will foster a level playing field. Artificially promoting the development of wind and solar actually raises the true cost of electricity generation, because it is currently much cheaper to produce electricity (all things considered) through coal and natural gas plants, rather than new wind and solar.

As these newer technologies develop, the market may gradually shift to a greater reliance upon them. However, if policymakers continue to use the tax code (as well as direct spending and regulations) to artificially promote the expansion of some energy sources, this will further distort behavior, reducing consumer welfare and in particular making the energy sector less efficient.

Click here to view his full testimony.

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