Wednesday, May 07, 2008

NCPPR's Almasi Comments on CAFE in National Review

In the May 5 print edition of National Review, Fred Schwarz described how the catalytic converter was perfected just as automakers faced potentially crippling federal emissions requirements. Liberals cite this as proof that all that is needed to make technological breakthroughs happen is to give industry a swift regulatory kick in the pants, but this particular development was a happy coincidence. Had a breakthrough - discovered after many frustrating failures - not come when it did, the auto industry could very well have been devastated.

Schwarz sees the development of the catalytic converter as another step in the march of science that will, in time, bring about the changes some people hastily want to mandate.

Schwarz’s article is great but for the one line. Schwarz calls newly-mandated Corporate Average Fuel Economy (CAFE) standards "feasible." Hardly. They are most likely to make cars and trucks smaller, lighter and subsequently more dangerous in the short-term before (in the minds of the regulatory crowd) the long-hidden formula to fuel cars with water is unveiled.

National Center for Public Policy Research Executive Director David Almasi explained one of the problems with increased CAFE standards in a letter to the editor that now has been printed in the May 19 National Review (print edition). David's letter is reprinted in its entirety below:

Fred Schwarz is right to predict that science will achieve regulatory goals at its own pace ("Machina ex Machina," May 5).

He also says that "[current] CAFE standards are quite feasible, and while opponents have criticized them on economic grounds, at least no engineering miracles will be required." True - but the biggest problem with the Corporate Average Fuel Economy system concerns safety, not economics or engineering. By historical precedent the easiest way for automakers to meet higher fuel-efficiency requirements is to make cars and trucks smaller, lighter and inherently less safe. A 2002 study by the National Academy of Sciences estimated between 1,300 and 2,600 accident-related deaths each year can be attributed to CAFE standards.

It’s also the case that these new CAFE standards will raise the price of new vehicles large enough for family use by thousands of dollars. If you don’t like paying an extra buck a gallon for gasoline, just wait until you have to spend an extra ten grand for the car.

Thanks, Congress.
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Labels: Business, Climate, Congress, Energy, Environment, Regulation, Regulatory Victims

Posted by Amy Ridenour at 5:52 PM

Tuesday, April 29, 2008

Biofuel-Fueled Food Crisis Requires Dramatic Response, Senator Says

Senator James Inhofe (R-OK) has delivered a floor speech calling for "'dramatic' action to address global food difficulties caused in part by current biofuel mandates."

Inhofe said, in part:

Recently, the world has been confronted with irrefutable evidence that our current biofuels mandates are having massive and potentially life threatening consequences.

Once again, we are reminded how restrictive government mandates and ill-advised bureaucratic meddling produce unintended consequences. Trying to centrally manage and “plan” a global food distribution network and economy through clumsy, unrealistically high mandates has been a proven failure.

An April 28 article on our current biofuel mandates in the National Review by Phil Kerpen and James Valvo detailed the mindset of bureaucratic planners.

Each new generation of central planners believes the previous generation wasn't smart enough. Yet central economic planning is forever doomed to failure since the approach itself limits human freedom, ingenuity, entrepreneurship, and innovation.

To put it into simpler terms: As Ronald Reagan once said, “The more the plans fail, the more the planners plan.”

There's lot's more.
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Labels: Congress, Energy, Environment, Environmental Justice

Posted by Amy Ridenour at 2:06 PM

Saturday, April 19, 2008

Congressional Energy Diet Also Reduces Waistlines and Pocketbooks (Don't Even Ask About Global Warming!)

From David Almasi:

The liberal leadership in Congress came to power in 2006 saying they had a solution to rising gas prices. Did that solution involve prices continuing to go up and taking the cost of food with them?

When Americans decided to clean up the environment in the 1950s, there was a lot of trust in the American people. There were regulations to clean things up, of course, but voluntary action, anti-littering campaigns and appeals to our better nature went a long way.

But the trust factor has been eviscerated, and it's to no one's benefit.

As National Center Senior Fellow Dana Joel Gattuso points out in a Townhall column:

Congress doesn't trust consumers to make the right decision when it comes to selecting the right source of energy. Congress knows better. That's why legislation out of Capitol Hill is all about weaning us off oil and putting us directly on a "renewable energy" diet.

Witness the energy tax bill the House passed in February that slaps $18 billion in taxes on oil production to fund wind, solar, biofuels, and other "alternative" sources. Witness the new energy law passed in December mandating that Americans increase the use of ethanol and other biofuels at the pump to 36 billion gallons by 2022, up from 7 billion gallons required now. And witness the new farm bill that gives corn growers $10.5 billion in subsidies over the next five years, no matter how fast the price of corn rises - which, incidentally, has gone from $3.50 a bushel to a record $5.50 over the past three months.

Commenting directly on mismatched concerns over abundance and price when it comes to food and energy, Dana writes:

Even with oil topping $109 a barrel [on April 15], it is still relatively abundant. As the U.S. Geological Survey reports, there are 3 trillion billion barrels of oil reserves still available globally. For perspective, since the first automobile rolled off the assembly line, we've consumed only one trillion barrels.

Conversely, ethanol and other biofuels are extremely limited resources requiring enormous amounts of water, energy, and land otherwise used for growing food. The new energy law's requirement that Americans use 15 billion gallons of corn for fuel by 2015 - that doesn't include the other 21 billion gallons to come from non-food sources like switchgrass and corn husks - will consume an astounding 30 million acres of cropland. That means unless the mandates are repealed, more than a third of our corn crops will be diverted from food to fuel in just seven years.

U.S. policies forcing biofuel usage already are creating food shortages in third world countries, elevating food prices to historic levels.

It's worth it to combat global warming, right? Wrong.

Two independent studies in the journal Science report that the clearing of forests, grasslands, and other ecosystems throughout the world to grow corn, soybean, and other food-for-fuels will double greenhouse emissions over the next 30 years. Because plants and soil hold enormous quantities of carbon, destroying existing plants and tilling the soil releases the stored carbon.

Still in a mood to celebrate Earth Day this coming Tuesday?

To read Dana's commentary in its entirety, click here.

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Labels: Climate, Congress, Energy, Environment, Taxes

Posted by Amy Ridenour at 1:52 PM

Thursday, April 17, 2008

Washington Post Treats Insipid Barbara Boxer Comment as News; Ignores Bigger Story Behind Bush's Global Warming Speec

I already knew Senator Barbara Boxer (D-CA) wasn't a clear thinker, but I still had to chuckle at her quote in today's Washington Post article on climate change:

The president's plan to have America stand by while greenhouse gases reach dangerous levels and threaten America and the world is worse than doing nothing -- it is the height of irresponsibility.

What's the difference between "standing by" and "doing nothing"?

Why, no difference at all.

Even more amusingly, this was probably a prepared quote taken from a statement issued by her office rather than something she said off the top of her head.

Speaking of this Washington Post article, by Juliet Eilperin: It quotes six people taking the alarmist, hurt-the-economy position on global warming, and not one who believes either that alarm is unnecessary or that the hurt-our-economy approach is the wrong way to go. An acknowledgment is made that "senior GOP lawmakers... continue to reject mandatory curbs on emissions," but that's it. No reason why is given. Nor is a reader told that not all of Bush's critics are found on the anti-energy left, and what their take on all this might be.

There's a news story to be found in why President Bush took the action that he did, but the Post had no inclination to cover that story.

A insipid statement by Barbara Boxer was a higher priority.
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Labels: Climate, Congress, Energy, Environment, Liberals, Media, Regulation

Posted by Amy Ridenour at 12:48 PM

Saturday, April 05, 2008

Green is the New Red

If you read one global warming article this year, make it this one.
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Labels: Climate, Economics, Energy, Environment, Government Power

Posted by Amy Ridenour at 10:02 PM

Thursday, March 20, 2008

LISTEN LIVE to David Ridenour Discuss Gas Tax Poll on WBAL in Baltimore

From David Almasi:

National Center vice president David Ridenour will be a guest of talk show host Ron Smith on WBAL in Baltimore this afternoon (March 20) at approximately 3:45pm Eastern. David and Ron will discuss the National Center's new poll that indicates most people do not want to pay 50 cents or more extra for a gallon of gas in order to pay for the cost of proposed greenhouse gas emissions. The full press release on this poll can be read by clicking here.

You can listen to the interview live by going to the WBAL web site. Look for the "Listen Live" button on the left-hand side of the home page, just below the station logo.

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Labels: Business, Climate, Congress, Energy, Environment, Media

Posted by Amy Ridenour at 2:13 PM

Americans Cool to Action Against Global Warming, New Poll Finds

Today the National Center for Public Policy Research will release the results of its new nationwide poll asking Americans how much more they would be willing to pay in gasoline taxes to help reduce greenhouse gas emissions and fight global warming.

Our press release follows; you can go straight to the poll results here (pdf):

Americans Cool to Global Warming Action, New Poll Finds Nearly Half Wouldn't Be Willing to Pay Even a Penny More for Gasoline; Opposition to Taxes Especially Strong Among Minorities

For Release: March 20, 2008
Contact: David Almasi at (202) 543-4110 x11 or dalmasi@nationalcenter.org

Washington, D.C.: Forty-eight percent of Americans are unwilling to spend even a penny more in gasoline taxes to help reduce U.S. greenhouse gas emissions, according to a new nationwide survey released today by the National Center for Public Policy Research.
The poll found just 18% of Americans are willing to pay 50 cents or more in additional taxes per gallon of gas to reduce greenhouse emissions. U.S. Representative John Dingell (D-MI), chairman of the Committee on Energy and Commerce, has called for a 50 cent per gallon increase in the gas tax.

According to the U.S. Environmental Protection Agency, transportation accounts for 33% of the U.S.'s man-made carbon dioxide emissions. Over 60% of these emissions - or about 20% of all U.S. carbon dioxide emissions - result from burning gasoline in personal automobiles.

"With one-fifth of all U.S. CO2 emissions coming from light trucks and cars, any serious effort to significantly reduce U.S. emissions would have to encourage fuel conservation in personal automobiles," said David A. Ridenour, vice president of the National Center for Public Policy Research. "But almost half of all Americans oppose spending more for gasoline, despite polls indicating wide public concern over global warming. These results suggest Americans' concern may not be as deep as we've been led to believe."

Opposition to increased gasoline taxes was especially strong among minorities, with 53% of African-Americans indicating they are unwilling to pay higher gas taxes in any amount. Eighty-four percent of blacks and 78% of Hispanics opposed paying an additional 50 cents or more for their gasoline.

"It's not surprising that minorities oppose higher gas taxes in large numbers, as such taxes are sharply regressive, harming the economically-disadvantaged disproportionately," said Ridenour. "An extra $300 per year in taxes means little to someone making $100,000 annually. When you're just getting by, it can mean not having enough for food, rent or utility bills."

Voters were told: "Congress is currently considering legislation that would raise the tax on gasoline in an attempt to motivate Americans to conserve fuel and reduce greenhouse gas emissions." They were asked to indicate how much more they'd be willing to pay on top of what they already pay in gasoline taxes. They were given seven choices: nothing, less than 50 cents, 50 cents, one dollar, two dollars, five dollars, eight dollars or more.

Eighteen percent indicated they are willing to pay an additional 50 cents per gallon of gas or more; eight percent indicated they're willing to spend a dollar or more and just 2% said they're willing to spend $2 or more.

"Congressman Dingell's proposal to raise gas taxes by 50 cents per gallon appears to be dead-on-arrival as far as the public is concerned. Even if it wasn't, Dingell's proposal is too modest to encourage any meaningful fuel conservation," said Ridenour. "Europeans routinely pay between $4 and $5 per gallon of gas in taxes and their fuel appetite continues to grow nevertheless. Just 1% of Americans are willing to spend an additional $5 dollars or more. Republicans are willing to do so by a 3 to 1 margin over Democrats."

Opposition to any gas tax hike was strongest in the Great Lakes, home of the automakers and Congressman John Dingell, at 56%, followed by New England (51%) and the Farm Belt (50%).

Opposition grew once respondents were informed that eliminating passenger cars in the United States altogether would only reduce world emissions by a fraction.

Among those who indicated they are willing to pay more for gasoline to reduce greenhouse gas emissions, 58% indicated that they are less willing to do so, and 42% much less willing, when informed their sacrifice would produce little positive results.

"Many global warming polls ask the wrong questions," said Ridenour. "We shouldn't ask Americans if action is needed on global warming, but how much more they’re willing to pay for that action. We need to also ask whether people would still be willing to pay more, given the almost certain futility of it."

The poll was conducted February 24-26 by Wilson Research Strategies, which surveyed 800 registered voters who are likely to vote in the 2008 presidential election. The poll has a margin of error of 3.46% at a 95% confidence interval.

Full poll results may be found at http://www.nationalcenter.org/NCPPR_Global_Warming_Poll_Questions_0208.pdf

The National Center for Public Policy Research is a non-partisan, non-profit educational foundation established in 1982 that supports commonsense, market-based solutions to environmental problems.

-30-

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Labels: Climate, Congress, Energy, Environment, Liberals, Taxes

Posted by Amy Ridenour at 12:44 AM

Tuesday, March 11, 2008

Yet Another Problem with Biofuel...

...pollution from the plants.
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Labels: Energy, Environment

Posted by Amy Ridenour at 9:51 PM

Monday, March 10, 2008

Project 21 Helps Expose Hypocrisy of Environmental Elite in the Third World

From David Almasi:

You may remember Al Gore being unmasked last year by the Tennessee Center for Policy Research, which discovered that Gore's Nashville mansion was using 20 times the amount of energy as an average American home. Additionally, Gore and his celebrity friends are holding nearly annual rock concerts to celebrate their environmental alarmism. And let's not forget all those special flights they take to and from their international conferences, where they moan about the evils of excessive air travel, among other things.

On Tuesday, March 11, the Competitive Enterprise Institute (CEI) will begin running a commercial on cable television exposing the hypocrisy of Gore and the environmentalist elite.

CEI's commercial shows that many in the Third World - particularly those in Africa - are literally dying due to a lack of adequate power, and the catastrophe that could result from imposing anti-global warming emissions regulations on power generation in these areas. Forcing these people to go without would be especially galling considering Gore and his ilk are living opulent lifestyles.

To help CEI and show just how much the anti-energy environmentalist elites are out of step with the rest of the world, Project 21 - the National Center's black leadership network - has gathered statements for the press conference from native Africans and black Americans who have seen first-hand how Western elites try to impose their will on others.

Here are some samples of their statements:

Thompson Ayodele, director of the Initiative for Public Policy Analysis in Lagos, Nigeria: "The Nobel Peace Prize, Oscar and an Emmy Mr. Gore has been awarded for his environmental activism will only aid the people of Africa is he melts them down and donates the gold to a relief organization. For him and his colleagues to try to restrict people of the world from obtaining the energy they need in the means that are cost-effective and readily available for them to get it is not humanitarian in any sense of the word."

Project 21's Bishop Council Nedd II: "If it weren't so unsettling it would be funny that it is people such as Al Gore who are behind policies and pressure to restrict the development of pretty much every sort of successful method of energy production. This is inconvenient and costly to us here in the United States, but it can be a matter of life-and-death in a developing country."

Alice Wanja Hinga, RN, a native Kenyan: The people of Africa cannot afford to worry about their carbon footprint when they are focused on making sure they have enough to eat and can remain healthy. If people from outside Africa want to intervene, it should be to make access to things easier, not more difficult. My people ask for assistance, but the strings attached to certain aid are sometimes worse than not accepting anything in the first place."

The CEI press conference will be held in the Murrow Room of the National Press Club (529 14th Street NW, 13th floor) at 10:00 am on Tuesday, March 11. A PDF of the statements can be found here (pdf).

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Labels: Energy, Environment, Environmental Justice, Liberals, Project 21

Posted by Amy Ridenour at 8:06 PM

Tuesday, February 26, 2008

Another Ethanol Problem: Fire

From Chris Blank of the Associated Press:

The nation's drive to use more alternative fuel carries a danger many communities have been slow to recognize: Ethanol fires are harder to put out than gasoline ones and require a special type of firefighting foam.

Many fire departments around the country don't have the foam, don't have enough of it, or are not well-trained in how to apply it, firefighting experts say. It is also more expensive than conventional foam.

"It is not unusual to find a fire department that is still just prepared to deal with traditional flammable liquids," said Ed Plaugher, director of national programs for the International Association of Fire Chiefs.

The problem is that water doesn't put out ethanol fires, and the foam that has been used since the 1960s to smother ordinary gasoline blazes doesn't work well against the grain-alcohol fuel.

Wrecks involving ordinary cars and trucks are not the major concern. They carry modest amounts of fuel, and it is typically a low-concentration, 10 percent blend of ethanol and gasoline. A large amount of conventional foam can usually extinguish such fires.

Instead, the real danger involves the many tanker trucks and railcars that are rolling out of the Corn Belt with huge quantities of 85 or 95 percent ethanol and carrying it to parts of the country unaccustomed to dealing with it...

Read the rest here.
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Labels: Energy, Environment

Posted by Amy Ridenour at 10:51 PM

Monday, February 18, 2008

Ethanol Subsidies, Mandates May Be Vulnerable

David's op-ed on the many problems with ethanol continues to be picked up by newspapers (since the nine newspapers I mentioned Wednesday, the Pittsburgh Tribune-Review, the Oakland Tribune, the Alameda Times-Star and the Argus in California have run it), and is generating an unsually high amount of comment emails -- all opposed to ethanol subsidies -- to the National Center for Public Policy Research.

Here's a sample of the letters we're getting:

My husband has been on this bandwagon for years. Ethanol makes no sense in any way.

Our ultra liberal daughter acted as if everybody knew how stupid this whole ethanol aberration was.

We were shocked to find one issue we could agree on.

Yet our congress rolls on mightily filling ADM's pockets and others with cash for destroying food crops and further increasing the worlds hunger problem.

As a right wing Jesus freak, I would like to add it is a sin to burn food when people are starving.

Sharon Milton
Norphlet, Ar

Public interest in ethanol -- or, more precisely, public interest in ending ethanol subsidies and mandates -- appears to be greater than I had at first supposed. It won't happen overnight, but perhaps this is an issue on which we can win.

P.S. A bunch more have run it now, but I'll stop listing them all.
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Labels: Business, Climate, Congress, Energy, Environment, Government Spending, Regulation

Posted by Amy Ridenour at 12:53 AM

Friday, January 18, 2008

Ten Myths About Nuclear Power

Rob Johnston, writing at Spiked, takes apart ten myths popularized by British environmentalists against nuclear power.

As many if not all of these myths are promoted here in the U.S., I thought I'd reprint them here, but you have to go to Spiked to see Johnson's case for why they shouldn't be believed.

1) Uranium is running out
2) Nuclear is not a low-carbon option
3) Nuclear power is expensive
4) Reactors produce too much waste
5) Decommissioning is too expensive
6) Building reactors takes too long
7) Leukemia rates are higher near reactors
8) Reactors lead to weapons proliferation
9) Wind and wave power are more sustainable
10) Reactors are a terrorist target

(Speaking of nuclear reactors being a terrorist target, the National Center for Public Policy Research published a study of eight different terrorist-attack-on-nuclear-power-plant scenarios in 2001 by nuclear physicists Gerald E. Marsh and George S. Stanford. The paper, "Terrorism and Nuclear Power: What are the Risks?" can be read online here.)
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Labels: Defense, Energy, Environment

Posted by Amy Ridenour at 12:30 AM

Thursday, December 06, 2007

Ethanol. Raises food prices. Hurts the environment. Harms the Poor.

The House of Representatives is set to vote today on an energy bill that would require a seven-fold increase in the use of ethanol over the next 15 years.

However, as National Center Senior Fellow Dana Joel Gattuso reports in a study released today, corn prices already have doubled since last year, in large part because Congress is mandating that food be converted to fuel.

Says Dana, in part:

For the past four decades, food prices have remained fairly stable, lagging far behind inflation. But as the USDA reports, food prices this year are soaring, rising twice the rate of inflation - the highest annual increase in over a decade. Corn prices, which doubled since last year, are close to $4 a bushel. Eggs are up 44 percent from last year, while milk, up 21 percent, has jumped to $3.83 a gallon - the highest retail price since World War Two.

What's driving record food prices? Federal policies mandating more food for fuel are a big factor. Requirements that we use more ethanol over oil for energy use are causing us to divert larger amounts of farmland from food to corn-based fuel, contributing to record food costs. In 2000, we were using a modest 6 percent of our cropland for ethanol production. Last year, that share increased to 20 percent; this year, one quarter of our corn harvest is diverted from food to fuel.

Dana also points out that "producing biofuels leaves a huge ecological footprint, exceeding that of fossil fuels."

Ethanol isn't so great for low-income Americans, either, who already spend about 40 percent of their budget on food.

Dana adds:

None of this will matter, of course, when Congress acts on the energy bill. As is the way of the world in the nation's capital, the powerful agribusiness and ethanol interests will trump science, and Congress will turn a blind eye to the poor's struggle against soaring food prices.

Ethanol. Raises food prices. Hurts the environment. Harms the poor.

Read Dana's paper here.
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Labels: Congress, Energy, Environment, Regulation

Posted by Amy Ridenour at 12:14 AM

Wednesday, December 05, 2007

Lieberman-Warner Climate Security Act Meets Clinton Health Care Plan

Senator Kit Bond (R-MO) has mapped out the Lieberman-Warner Climate Security Act of 2007.

He calls it "Rube Goldberg meets carbon caps."

I say Kit Bond's Liberman-Warner climate bill chart looks a lot like the complex chart Senator Arlen Specter (R-PA)'s office put together in 1994 to show America what Bill and Hillary Clinton's doomed health care plan looked like.

Hat tip: Marc Morano.
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Labels: Climate, Congress, Energy, Environment

Posted by Amy Ridenour at 12:13 PM

Sunday, December 02, 2007

For Reducing Greenhouse Gas Emissions: Cap and Trade, Anyone?

Total U.S. greenhouse gas emissions dropped by 1.5 percent in 2006. The total reduction in U.S. carbon dioxide emissions was 1.8 percent.

By comparison, carbon dioxide emissions by participants in the European Union's Emissions Trading Scheme (Europe's version of "cap and trade," an emissions-regulation system now under consideration by the U.S. Congress) increased by 0.3 percent in 2006.

The EU's cap and trade program didn't perform as well as its environmentalist proponents hoped it would. The European Union screwed up its cap and trade system's first trading period by handing out too many emissions permits. As a result, emitters had scant financial incentive to make reductions. This was not predictable, as no one familiar with the history of the Twentieth Century could have expected a large intergovernmental bureaucracy to make an economic planning error.

For a succinct report on the 2006 decline in U.S. greenhouse gas emissions, read the U.S. Department of Energy's press release here. For a more detailed look at the U.S. greenhouse gas emissions picture, including prior years, go here. For a fuller picture on how well the European Union and its member states are meeting their Kyoto targets, I recommend the European Environment Agency publication "Greenhouse Gas Emission Trends and Projections in Europe 2007," available in English here.
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Labels: Climate, Congress, Energy, Environment, Foreign Policy

Posted by Amy Ridenour at 1:19 AM

Friday, November 16, 2007

Auto Efficiency Standards Change Little; Auto Efficiency Changes Much -- and New York Times Doesn't Notice

Peyton Knight points out that the New York Times editorial page is so enamored by regulation, it has lost sight of reality:

The New York Times is worried that some of the most anti-energy provisions of the anti-energy bill, which Democratic House and Senate leaders are currently trying to finalize, might get scrapped for expediency's sake.

Arguing in favor a significant increase in fuel economy standards for vehicles, the Times notes: "Efficiency standards have changed little in 30 years."

More important than standards, however, is efficiency itself, which has certainly improved over three decades.

According to the U.S. Environmental Protection Agency, the average fuel economy of the U.S. fleet of passenger cars in 1975 was 13.5 miles per gallon (mpg). In 2006 it was 24.6 mpg - representing a fuel efficiency increase of 82 percent.

In 1975 the average fuel economy for light trucks was 11.6 mpg. In 2006 it was 18.4 - representing a fuel efficiency increase of 59 percent.

Market forces have generated a wide array of choices that fit consumers' preferences. Consumers who prefer a four-door sedan that gets 46 mpg, which is 11 mpg higher than what the Senate energy bill calls for by the year 2020, need only go buy one.

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Labels: Energy, Environment, Media, Regulation

Posted by Amy Ridenour at 12:40 AM

Thursday, November 01, 2007

Bill O'Reilly, Call Your Office

Jerry Taylor at the Cato Institute says the "card-carrying members of the Big Oil Conspiracy Society" have some explaining to do.
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Labels: Energy

Posted by Amy Ridenour at 11:56 PM

Friday, September 28, 2007

Gore Tells Bush to be More Reaganesque

Peyton Knight approves of some of Al Gore’s advice to President Bush:

At former President Clinton's annual "Global Clinton Initiative" summit Thursday, Al Gore called on President Bush to be more like the Gipper. Gore said:

I... call on President Bush to follow President Reagan's example and listen to those among his advisers who know that we need to have binding reductions in CO2.

Gore was trying to employ Reagan's support for protecting the ozone layer in an effort to nudge Bush toward supporting energy restrictions.

Well, the former veep and newest member of the Reagan fan club has some catch-up reading to do. Reagan knew a thing or two about energy policy, seeing as his predecessor had a disastrous one. As such, when Reagan officially announced his candidacy for President in 1979, he assessed energy policy pretty specifically - and pretty specifically repudiated the Gore approach. According to Reagan:

It is no program simply to say, "Use less energy." Of course waste must be eliminated and efficiently promoted, but for the government simply to tell people to conserve is not an energy policy. At best it means we will run out of energy a little more slowly. But a day will come when the lights will dim and the wheels of industry will turn more slowly and finally stop. As President I will not endorse any course which has this as its principal objective.

We need more energy and that means diversifying our sources of supply away from the OPEC countries...

The answer, obvious to anyone except those in the administration it seems, is more domestic production of oil and gas. We must also have wider use of nuclear power within strict safety rules, of course. There must be more spending by the energy industries on research and development of substitutes for fossil fuels.

In years to come solar energy may provide much of the answer but for the next two or three decades we must do such things as master the chemistry of coal. Putting the market system to work for these objectives is an essential first step for their achievement. Additional multi-billion-dollar federal bureaus and programs are not the answer...

It is not government's function to allocate fuel or impose unnecessary restrictions on the marketplace.

Let's see. Invest in new technology, promote domestic production of oil and gas, increase nuclear power and refuse to restrict Americans' energy supply. Sounds about right to me.

How about you, Al?

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Labels: Conservatives, Energy, Environment, Liberals

Posted by Amy Ridenour at 11:23 PM

Tuesday, September 25, 2007

National Review Institute Hosts Energy Policy Debate

Peyton Knight contributes coverage of an energy policy and global warming debate sponsored earlier today in Washington by the National Review Institute:

This afternoon, the National Review Institute hosted a panel discussion at the National Press Club on energy production and how it relates to national security. The panel was moderated by CNBC's Larry Kudlow. The panelists were:

- Congressman Mario Diaz-Balart (R-FL), Member of the House Energy and Environment Subcommittee

- David Hamilton, Director of Global Warming and Energy Programs for the Sierra Club

- Steven F. Hayward, Resident Scholar at the American Enterprise Institute

- Andrew N. Liveris, President, CEO, and Chairman of the Board of Dow Chemical Company

- James Woolsey, Vice President of the Global Strategic Security Division at Booz Allen Hamilton

Larry Kudlow began the panel discussion with a series of questions. Is global warming real? Is it manmade? If it is manmade, how do we solve it? How do we solve it without wrecking our economy?

What resulted was a mostly congenial discussion energy policy. Congressman Diaz-Balart and the Sierra Club's David Hamilton expressed the two most divergent views, recapped below:

*Congressman Diaz-Balart

Congressman Diaz-Balart stressed that no matter what global warming actions we take, above all, we need to make certain that we don't destroy our economy. When Kudlow asked him about Hillary Clinton's proposal for government to take energy company profits and hand them over to companies that invest in renewable energy projects, the Congressman responded pointedly: "That's a bad idea."

He explained that penalizing companies that produce energy would only create a disincentive for energy production. He noted that increasing the tax burden on domestic energy suppliers, as called for in the House energy bill, would result in fewer domestic energy resources and force the U.S. to rely more heavily on energy imports. The congressman pointed out that while government can play a role in steering the energy market, oftentimes, government intervention in the marketplace creates more problems than it solves.

As for increasing domestic energy production, Diaz-Balart prescribed a "federalist" approach. He said that if states like Alaska want to tap their fossil fuel resources, they should be permitted to do so - likewise with coastal states that wish to harvest natural gas from the Outer Continental Shelf.

There is a role for renewable energy and energy conservation to play in increasing U.S. energy security, according to Diaz-Balart. However, he lamented that too often these two issues are promoted as "silver bullets," when, in fact, they are nothing of the sort. He stressed that there are many pieces to the energy puzzle, and that increased rhetoric, particularly from global warming alarmists, won't help solve the problem.

According to him, the new congress isn't doing much to help solve America's energy problem. "So far, all we've done in this new congress is tax energy," he said. "We have [an energy] bill that doesn't create energy."

He did pay global warming alarmists one compliment, however, pointing out that they were "pure capitalists" in the way they raised money and positioned themselves for lucrative research grants.

* David Hamilton

According to the Sierra Club's David Hamilton, man-made global warming is real and we need to pursue solutions to it immediately. Citing the need for government intervention, he claimed, "Global warming is the greatest market failure in the history of economics."

Hamilton says that global warming is occurring so quickly, that in addition to reducing our greenhouse gas emissions a draconian 80 percent by the year 2050, we will also "need to hope that nature will cut us a break."

When asked if he supported increased nuclear power as part of the global warming solution, he laughed, and said "it's funny when free-marketeers talk about reviving nuclear power" because Americans have long since rejected it.

When asked how effective a tax on carbon dioxide emissions might be in reducing CO2 emissions, he replied that he preferred a cap-and-trade approach, whereby companies would be given a government mandated allotment of "carbon credits." Companies could then use those credits emitting carbon, or, if they don't use all of their credits, they could sell them to other companies who have exceeded their allotment. However, he noted a similar scheme instituted under the Kyoto Protocol and the Clean Air Act in the U.S. was flawed because companies were given too many credits and ended up either emitting vast quantities of CO2, or netting easy money from their surplus credits.

Both Hamilton and James Woolsey tried to convince panelists that reducing CO2 emissions could be a help to the economy, as opposed to a hindrance. Larry Kudlow was quick to rebut that CO2 restrictions would "undoubtedly" harm the economy, cause massive job losses and shave as much as four percent off U.S. GDP.

P.S. Power Line has additional commentary about the event here.
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Labels: Climate, Congress, Energy, Media

Posted by Amy Ridenour at 11:08 PM

Friday, September 14, 2007

On the Ethanol Subsidy

"The truth is that if ethanol has commercial merit, it doesn't need the subsidy. And if it doesn't, no amount of subsidy will bestow it."

Jerry Taylor and Peter Van Doren, Wishful Thinking Is No Magical Energy Elixir, The Cato Institute
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Labels: Energy

Posted by Amy Ridenour at 11:10 PM

Monday, August 20, 2007

A Law Against Price-Gouging?

Husband David muses that maybe it's time for a law against price-gouging after all.
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Labels: Energy

Posted by Amy Ridenour at 11:55 PM

Friday, June 29, 2007

Barbara Boxer's Mean Left Hook

From husband David, some personal observations from the most recent hearing on global warming in Senator Barbara Boxer's committee:

Senate Environment and Public Works Chairman Barbara Boxer said that she wanted to continue hearing from all sides of the global warming debate during her closing statement at yesterday's global warming hearing.

We have reason to doubt her sincerity.

Those who disagree with her particular view of global warming can end up on the receiving end of Boxer's very mean left hook.

Just ask Bob Murray, CEO of Murray Energy Company. During his testimony yesterday, Murray implored the committee to resist regulations that would inflict hardship on American families. He said he was particularly concerned about the welfare of the 3,300 people directly dependent and up to 36,000 indirectly dependent on Murray Energy for their livelihoods.

In response, Chairman Boxer introduced a Columbus Dispatch article, littered with quotes from her trade union movement allies, that questioned the safety record of Murray's mines.

Yes, the article was way off-topic, but the point of introducing it was to impugn Mr. Murray's reputation and undermine his credibility when he spoke of his deep concern for workers.

Senator Boxer had intended to criticize Mr. Murray without allowing him to respond, but he defended his company's safety record, sometimes speaking over her gavel.

There was no pretense of fairness. Had she chosen to be fair, Senator Boxer would have had to mention that Murray Energy received the International Society of Mine Safety Professionals' Leadership Award in 2003.

Murray did much better in the exchange.

Senator Boxer appeared petty, intemperate, and ungracious - certainly not the image the Chairman of the committee that had invited Mr. Murray to testify should project.

Perhaps even she realized this.

Moments before introducing the Columbus Dispatch article, she appeared to be showing it to freshman Senator Sheldon Whitehouse - possibly to convince him to take the lead in character assassination.

If she did, he didn't bite. Whitehouse may be a freshman, but he wasn't born yesterday.

* * *

Senator Joe Lieberman may have his flaws, but he was at least a bit more honest about how open he was to hearing the views of others.

Before departing the hearing, Lieberman said he'd be happy to meet and work with anyone who agrees that global warming is a problem and that devising a cap and trade system is the answer.

In other words, he'll be happy to meet with anyone who shares his view.

We have no reason to doubt his sincerity, at least.

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Labels: Climate, Congress, Energy, Environment, Environmental Justice

Posted by Amy Ridenour at 11:03 PM

CAFE Standard Profiteering

Timothy Carney, writing in the Examiner, on the corporations and lobbyists who are profiteering from Corporate Average Fuel Economy (CAFE) Standards, and how much money some of their PACs give to House and Senate candidates:

While ratcheting up CAFE won’t result in miraculously more fuel-efficient cars, it also won’t drive automakers out of business. Instead, it will likely drive them toward the loophole in CAFE — the renewable fuel credit.

To have any chance of meeting the 35-mpg average, carmakers will need to start selling flex-fuel cars that have inflated mpg ratings for CAFE purposes. This will spur consumption of ethanol.

While raising the CAFE requirements would be a stick in the eye of the Big Three (whose political action committees [PACs] in 2006 gave about $1.3 million to federal candidates), it would clearly be a gift to the ethanol industry, whose strong connections to lawmakers are legendary. Ethanol, an alcohol fuel made from grain, usually corn, benefits from special tax breaks, protective tariffs, and federal and state handouts, as well as government mandates.

In the 2006 election cycle, the PAC for Archer Daniels Midland (ADM), the nation’s top ethanol maker, gave $120,000 to federal candidates while fellow agribusiness giant Cargill, No. 2 in ethanol, gave $223,000 to House and Senate candidates.

Also pulling for ethanol -- and thus benefiting from stricter CAFE standards -- is Goldman Sachs, the Wall Street investment firm that has invested $30 million in a Canadian ethanol maker.

Silicon Valley billionaire Vinod Khosla, who recently penned a New York Times op-ed along with former Senate Majority Leader Tom Daschle, D-S.D., calling for even more ethanol mandates, is also heavily invested in ethanol...

Profiteering through the expansion of a regulation that kills a couple of thousand Americans per year can be described in one short phrase: Blood money.
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Labels: Business, Congress, Energy, Environment, Regulatory Victims

Posted by Amy Ridenour at 10:57 PM

Climate Change is a Human Issue

From Stella Dulanya and Peyton Knight, a report on the latest Senate global warming hearing:

Yesterday, National Center Senior Fellow Thomas J. Borelli, Ph.D., testified on behalf of the Free Enterprise Action Fund before the U.S Senate Committee on Environment and Public Works hearing entitled, "Examining Global Warming Issues in the Power Plant Sector."

In his testimony, Tom stressed that CEOs who succumb to, or attempt to capitalize on, the political flavor-of-the-day risk harming their company's long-term profitability.

As Tom pointed out:

All too often, today's CEOs make decisions based on appeasing social and political pressure or by trying to generate revenue through legislation that favor their company. In our view, these strategies are shortsighted because they stymie competition, innovation and jeopardize future earnings.

For these very reasons, we strongly oppose cap and trade legislation and company participation in the United States Climate Action Partnership (USCAP). Accordingly, we are in opposition to legislation that sets carbon dioxide limits and allocations for the utility industry.

While the science implicating human activity on global warming is uncertain and speculative, the economic costs of cap and trade legislation are certain and severe. We are deeply concerned about the affect of cap and trade on both the U.S. economy and on the future profitability of the companies in our portfolio - including PG&E and Duke Energy.

Borelli also discussed the specific CEOs, including Caterpillar, Inc.'s James Owens:

Caterpillar's CEO James Owens admitted he did not conduct a cost-benefit analysis of cap and trade before deciding to join USCAP. In addition, he was not aware of the CBO study that found cap and trade regulations would hurt his coal industry customers.

This CEO survey illustrates a complete ignorance about the consequences of global warming regulations on the economy and their businesses.

Caterpillar's participation in USCAP is a perfect illustration of CEO incompetence and deception surrounding cap and trade legislation. Caterpillar's future profit depends on a growing economy and growth in the energy and mining industries. In fact, according to its 10-K filing with the Security and Exchange Commission (SEC), it cites a decline in the economic growth and a decline in the mining industry as a key risk to its business.

Yet inexplicably, Mr. Owens is a member of USCAP, which supports cap and trade regulations that are going to harm the economy and the coal business - a key customer for Caterpillar products. Astonishingly, CEO Owens is lobbying against his own earnings!

Not only is Owens harming his company, he is keeping his shareholders in the dark. Nowhere does Caterpillar disclose to its shareholders that its support of cap and trade can potentially lead to a decline in its business.

Also testifying at yesterday's hearing was Competitive Enterprise Institute Senior Fellow Marlo Lewis, Ph.D., who noted that "regulatory strategies like the Kyoto Protocol... are all economic pain for no environmental gain." Dr. Lewis explained:

Based on favorable scientific assumptions, the Kyoto treaty would avert only 0.07 degrees Celsius of global warming by 2050. That's too small an amount for scientists to detect. Put somewhat differently, Kyoto would postpone the arrival of a 2.6 degrees Celsius warming by five years - from 2095 to 2100...

Similarly, Kyoto would avert only one centimeter of sea-level rise by 2050 and 2.5 centimeters by 2100. It would have no measurable effect on hurricane strength, even if global warming makes hurricanes stronger, and none on malaria-related mortality, even if global warming increases the population risk of exposure to malaria.

However, although Kyoto would provide no discernable climate protection, it would cost the U.S. economy tens to hundreds of billions of dollars in higher energy prices, lost jobs, and lower GDP.

Robert Murray, President and CEO of Murray Energy Corporation, pointed out in his testimony yesterday that "climate change is a human issue," and brought home the harsh reality of inhumane global warming policies, including those that would restrict carbon dioxide emissions:

It seems to us that the leadership of this Congress, with the support of the Majority of this Committee and some Republicans, are intent on helping Mr. Gore and those of his ilk in achieving his unquestionable legacy, which will be the destruction of American lives and more death as a result of his hysterical global goofiness, with no environmental benefit...

We do not know how many members of Congress, and particularly the Democrat Majority, have actually ever created a job for anyone. I have created 3,300 primary jobs and up to 36,000 secondary ones, according to the Pennsylvania State University, from a mortgaged home, and I can tell you that it is virtually impossible to do so today in our great country due to difficulties imposed by our own government at every turn...

Some wealthy elitists in our country and many in our Congressional leadership, particularly from California and New England, and in the entertainment industry, including Mr. Gore, who cannot tell fact from fiction, have demonstrated an Olympian detachment from the impacts of draconian climate change policy. For them, the jobs and dreams destroyed as a result will be nothing more than the statistics and cares of other people. The consequences are abstractions to them. But, they are not to me, as I can name many of the thousands of American citizens whose lives will be destroyed by these elitists' ill-conceived "global goofiness" campaigns.

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Labels: Climate, Congress, Energy, Regulation, Social Welfare

Posted by Amy Ridenour at 10:45 PM

Thursday, June 28, 2007

The Senate's Fuel Economy Standard: Incredibly Tough, Probably Impossible & Enormously Expensive

Gary Witzenburg, writing on The Car Connection, explains the difficulties car manufacturers and consumers will have if Congress adopts into law the Senate Energy Bill's requirement that Corporate Everage Fuel Economy, or CAFE, standards, reach 35 mpg by 2020 for both cars and light trucks:

How hard could it be to move from today's long-established 27.5-mpg car CAFE to 35 miles per gallon, a mere 7.5-mpg (27-percent) increase?

Almost no one outside the fuel-economy business understands how incredibly tough, probably impossible, and enormously expensive that really would be. Even Toyota - whose hybrid-boosted 2006 car and truck CAFEs were 34.4 and 23.7 mpg, respectively - calls the 35-mpg standard "very aggressive" and "difficult to meet," adding that, "the time frame is too soon."

GM says that to bring all vehicles up to 35 mpg - a totally absurd 58-percent increase for light trucks, now at 22.2 mpg - represents a combined 40-percent boost that would cost more than $100 billion, "the greatest regulatory cost ever imposed on a single industry."

The only way it could come even close to happening would be to dieselize and hybridize virtually everything - at an incremental cost (not retail price) of $5000-$8000 per vehicle -and downsize trucks to where they could barely haul the content of a homeless auto worker's shopping cart. New emissions standards are making diesels way more expensive, and there's not enough battery raw material on the planet for an all-hybrid fleet...

...One very knowledgeable engineer who has worked on CAFE for many years says that to meet a 35-mpg CAFE, cars will have to average 38-39 mpg and trucks 25-28 mpg, and achieving those levels will require virtually all of both to be either diesel or gas-electric hybrid. He also points out that EPA uses "harmonic" averaging to emphasize fuel consumption (gallons per mile) rather that fuel economy (mpg), which makes CAFE compliance near-impossible for most to understand. "In CAFE math," he says, "to offset a 25-mpg vehicle to get a 35-mpg average, believe it or not, you need a car at 58.3 mpg, not 45."

...There's no question that we Americans need to consume less petroleum in everything we do (not just driving), for both balance of trade and energy security reasons, and higher fuel prices are already accelerating us down that path. But don't try to sell me the absurd notion that vehicle-emitted CO2, which is directly proportional to fuel consumption, is destroying the planet. Harmless CO2 gas amounts to just 38 of 100,000 molecules of the Earth's atmosphere and 5 percent of so-called "greenhouse" gases, just 3.3 percent of newly-generated CO2 is man-made, and only 14 percent of that comes from cars and trucks.

So let us all support improved fuel economy within the reasonable bounds of what is achievable and affordable. But let us not let auto-unfriendly, technologically ignorant politicians destroy what's left of America 's automotive industry through ridiculously expensive and probably unattainable CAFE requirements. Simply letting gas prices stay high will get it done.

It is amazing to me that a bunch of Senators who can't manage to get a fence built think they know how to engineer cars.
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Labels: Business, Congress, Energy, Environment, Regulation

Posted by Amy Ridenour at 4:37 PM

Tuesday, June 19, 2007

Rising Gas Prices, Tony Soprano-Style

The Senate Finance Committee today approved $29 billion in new taxes on the oil industry. Some of the funds will be given to corn growers, who will continue to receive new taxpayer monies as long as the Iowa Caucus lives.

(If the first presidential primary were in Texas, what a different world this would be.)

The AP reports:

Sen. Jon Kyl, R-Ariz., said the taxes on the large oil companies - most of the provisions exempt smaller producers - "will almost certainly lead to gas price increases" as oil companies pass on the added cost. "You can't raise taxes... by $29 billion and not expect gas prices to increase," he said.

The American Petroleum Institute, the oil company trade group, said in a statement that the taxes "will discourage new domestic production, discourage new investments in refinery capacity and would lead to the loss of good-paying U.S. jobs."

Interestingly, $10.7 billion in new taxes approved were a punitive measure against the oil companies because the Finance Committee is retroactively opposed to oil leasing contracts for the Gulf of Mexico the Clinton-era Interior Department signed with the oil companies in the late 1990s.

The government signs a contract -- and then extorts a $10 billion penalty because it decides later that it doesn't like the terms.

Reminds me of Tony Soprano.
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Labels: Business, Congress, Energy

Posted by Amy Ridenour at 9:57 PM

In Detroit, All Eyes Are Fixed on Congress

Writing on TownHall.com, our Eric Peters examines the many challenges faced and (so far) surmounted by the Big Three domestic automakers, GM, Chrysler and Ford, in light of what may be their biggest challenge yet: A Senate energy bill that may mandate new corporate average fuel economy, or CAFE, standards at a whopping 52 mpg level.

Eric begins:

There are three ways to find yourself in a deep hole: One is to jump in; another is to fall in. The third is to get pushed.

By an amazing trifecta of bad luck, bad decision-making and bad public policy, the U.S. auto industry finds itself in a deep pit -- with no ladder in sight...

...and ends...

If competitive shackles had not been fixed around the ankles of Detroit's Big Three, it's entirely likely that Ford would not be reeling from the biggest losses in its entire corporate history, that Chrysler would not be in "financial rehab" under the wings of a privately-held equity firm, and GM would not have dropped to a 24 percent market share and second fiddle to Toyota - which just became the world's largest automaker.

This tragedy of events -- and of almost suicidal policy-making -- is still playing out. The Senate is considering increasing CAFE standards to 52 mpg. Senators Mark Pryor (D-AR), Kit Bond (R-MO), Carl Levin (D-MI), and George Voinovich (R-OH) have proposed an alternative -- a 36-mpg standard for cars and 30-mpg for light trucks, a more than 30 percent increase over present levels.

Many -- including the Big Three domestic automakers themselves -- believe a 52-mpg standard could be one blow too many for our beleaguered domestic auto industry to survive. The automakers -- and their union -- support the Pryor-Bond-Levin-Voinovich alternative.

In Detroit these days, all eyes are fixed on Congress.

Read the entire piece on TownHall.
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Labels: Business, Congress, Energy, Environment, Regulation

Posted by Amy Ridenour at 9:38 PM

CAFE Kills, and Then Some: Six Reasons to Be Skeptical of Fuel Economy Standards

Just published in our Ten Second Response e-mail publication series, an examination of problems inherent in automotive fuel economy standards. This week, the Senate is debating an energy bill proposed by Majority Leader Harry Reid that would dramatically raise fuel economy standards to 52 miles per gallon. An alternative, crafted by Senators Carl Levin (D-MI), Christopher Bond (R-MO), Mark Pryor (D-AR) and and George Voinovich (R-OH), would raise standards for cars to 36-mpg and for light trucks, 30-mpg. The floor debate is expected to be contentious; filibusters are possible.

CAFE Kills, and Then Some: Five Reasons to Be Skeptical of Fuel Economy Standards

BACKGROUND: In 1975, Congress enacted Corporate Average Fuel Economy (CAFE) regulations to reduce gasoline consumption.

Current CAFE standards require an average of 27.2 miles per gallon (mpg) for cars and 21.6 mpg for light trucks. As part of its debate over the Energy Bill (S.1419), the U.S. Senate is now considering raising CAFE standards to require all passenger cars and light trucks to average 52 mpg. Senators Carl Levin (D-MI), Christopher Bond (R-MO) and Mark Pryor (D-AR) have proposed an alternative increase, which would require a 36 mpg standard for cars by 2022 and 30 mpg for light trucks by 2025.

Auto and truck manufacturers and the United Auto Workers trade union support the Levin-Bond amendment, which would raise standards 31 percent for passenger cars and by 35 percent for light trucks. Senate Majority Leader Harry Reid (D-NV), Senator John Kerry (D-MA) and others in the Democratic leadership, along with major environmental organizations, support the 52-mpg standard.

An expected reduction in gasoline usage is the most common reason cited for raising CAFE standards. It is not clear, however, that CAFE standards are particularly helpful in reducing gasoline use. Meanwhile, there are significant disadvantages to the standards, especially the harsh -- and very likely unattainable -- 52 mpg level for both cars and light trucks as proposed in the Energy Bill, which the auto manufacturers and the UAW say could possibly be a death knell to the domestic auto industry.

TEN SECOND RESPONSE: CAFE standards already result in the deaths of approximately 2,000 Americans every yea, since smaller cars are less crashworthy. By failing to acknowledge this in their policymaking, Congress has cost thousands of Americans their lives. Now Congress is poised to compound the dangers by raising CAFÉ standards still further -- so much so, it may kill the domestic auto industry itself.

THIRTY SECOND RESPONSE: CAFE standards have little impact on greenhouse gas emissions, and the environmental benefits of increasing CAFE standards are frequently overstated. Their impact on human health is more certain: CAFE standards have resulted in tens of thousands of deaths since their adoption. Furthermore, raising CAFE standards at this time -- particularly to the draconian level of 52 mpg for both cars and light trucks -- would significantly harm auto manufacturing jobs in the U.S., raise vehicle prices, and reduce vehicle choices for families and for those who use vehicles for towing and moving goods.

DISCUSSION: Opponents of increasing CAFE standards raise the following concerns:

1) Increasing mpg reduces the per-mile cost of operating vehicles, which increases the number of miles driven, thus reducing or eliminating any CAFE benefit.

Jerry Taylor and Peter Van Doren of the Cato Institute explain why this is the case:

Energy efficient appliances reduce the costs of operation. This might not be a big deal when it comes to, say, the television set (we won't watch more TV just because it costs a little less to turn on the set). But for appliances like air conditioners that make all the difference during peak demand periods, energy efficiency reduces the marginal cost of energy services and thus increases -- not decreases -- energy consumption. This is a well-known phenomenon called the 'rebound effect.'

The same goes for automobile fuel efficiency. Environmentalists argue that increasing the miles per gallon of the cars we drive would save more energy than increased drilling could produce. But the data show that fuel consumption goes up whenever automobile fuel efficiency goes up. Nearly all the gains in fuel efficiency disappear once we account for the demonstrable increases in driving that such investments produce.

James Taylor, editor of the Heartland Institute's Environment News, cites supportive data:

[USA Today columnist John] Merline noted people drive their vehicles more when increased fuel economy makes the price per mile cheaper. "The number of miles driven by passenger cars and light trucks climbed 104 percent between 1975 and 2000, according to the Department of Transportation," noted Merline.

A 2001 study conducted by the National Research Council (NRC) reached the same conclusion. According to the NRC, CAFE "reduces the fuel cost per mile of driving, thereby encouraging faster growth in vehicle travel than would otherwise be the case."

"NHTSA neglects the adverse effects from the increased driving induced by the proposal," agreed Randall Lutter and Troy Kravitz in a February 2003 study released by the AEI-Brookings Joint Center for Regulatory Studies. "By lowering the costs of driving, NHTSA's proposal increases vehicle miles traveled, thereby boosting traffic accidents and congestion. The increase in the costs of accidents and congestion fully offsets and probably outweighs the social benefits resulting from greater fuel economy."

Writing in the Wall Street Journal in 2001, Kimberly A. Strassel observed, "[s]ince 1970, the United States has made cars almost 50% more efficient; in that period of time, the average number of miles a person drives has doubled."

2) CAFE standards are dangerous. In 2002, the National Academy of Sciences released a report, "Effectiveness and Impact of CAFE Standards 2002," concluding that since CAFE standards were imposed in the U.S. in 1975, an additional 2,000 deaths per year can be attributed to the downsizing of cars required to meet CAFE standards.

In 2001, Charli E. Coon, J.D. of the Heritage Foundation wrote:

The evidence is overwhelming that CAFE standards result in more highway deaths. A 1999 USA TODAY analysis of crash data and estimates from the National Highway Traffic Safety Administration and the Insurance Institute for Highway Safety found that, in the years since CAFE standards were mandated under the Energy Policy and Conservation Act of 1975, about 46,000 people have died in crashes that they would have survived if they had been traveling in bigger, heavier cars. This translates into 7,700 deaths for every mile per gallon gained by the standards.

3) CAFE increases are less likely to reduce gas consumption than are gas tax increases: In a 2002 essay published in the Los Angeles Times, the Cato Institute's William A. Niskanen and Peter Van Doren noted, "since the CAFE standards were introduced, the average fuel economy has increased by 114% for new cars and by 56% for new light trucks, but the U.S. consumption of imported oil has increased from 35% to 52%." Niskanen and Van Doren recommended that if reducing gas consumption is the goal, an increased gasoline tax is more likely to get the job done: "In contrast to a tax on gasoline, CAFE standards are an imperfect and inefficient method of signaling drivers about the true costs of the gasoline that they consume."

The Congressional Budget office took a similar view:

This issue brief focuses on the economic costs of CAFE standards and compares them with the costs of a gasoline tax that would reduce gasoline consumption by the same amount. The Congressional Budget Office (CBO) estimates that a 10 percent reduction in gasoline consumption could be achieved at a lower cost by an increase in the gasoline tax than by an increase in CAFE standards. Furthermore, an increase in the gasoline tax would reduce driving, leading to less traffic congestion and fewer accidents. This analysis stops short of estimating the value of less congestion and fewer accidents and, therefore, does not draw any conclusions about whether an increase in the gasoline tax would be warranted. However, CBO does find that, given current estimates of the value of decreasing dependence on oil and reducing carbon emissions, increasing CAFE standards would not pass a benefit-cost test.

4) CAFE standard increases will harm domestic automakers and employment in the domestic auto industry. As National Center for Public Policy Research Senior Fellow Eric Peters writes:

The legislation differs from previous fuel economy standards in that it would apply to both passenger cars and "light trucks" -- a category of vehicle that includes pick-ups, SUVs and minivans -- and which has up to now been held to a separate (and less stringent) fuel economy standard of 21.5-mpg vs. 27.5-mpg for passenger cars.

As a result, Markey-Platts [legislation to increase CAFÉ standards] would disproportionately hurt American car companies, which have their profit centers in large pick-ups and SUVs -- while giving a competitive leg-up to imports, which make most of their money selling smaller, inherently more economical passenger cars.

It's much easier to tweak the design of a compact or mid-sized front-wheel-drive passenger car with a four or six-cylinder engine that already gets 32 mpg to the 35 mpg mark than it is to get a full-size, V-8 powered truck or SUV from 20-something mpg to 35 mpg. Thus, the impact of the Markey-Platts bill will hurt American car companies most where they are especially vulnerable -- at a time when they can least afford another legislative knee-capping.

GM, Ford and Chrysler have all posted alarming losses recently, even as the quality and appeal of their vehicles has been on the upswing. Hitting them with a 35-mpg fuel economy edict would have the same effect as sucker punching someone already laid low by the flu.

Furthermore, more stringent CAFÉ standards will make new cars more expensive, which will depress sales generally.

5) Some individuals, families and businesses need the large vehicles a CAFÉ standard increase will tend to drive out of the market for towing or storage capacity or simply to transport their families. Laws requiring parents to transport children -- in some states, children up to eight years of age -- in approved child safety seats effectively reduces available seating in the back seat of most small (and many mid-sized) sedans to two persons. For safety reasons, transporting a third child in the front seat is inappropriate in most vehicles, and is illegal in some areas, making larger vehicles all but mandatory for many families with children.

6) The argument that increasing CAFE standards will reduce global warming is grossly overstated. Even if greenhouse gas emissions due to human activities are significantly, and harmfully, raising global temperatures, which remains a subject of debate, increasing CAFÉ standards would have scant impact. As Charli E. Coon, J.D., of the Heritage Foundation has written:

Nor will increasing CAFE standards halt the alleged problem of "global warming." Cars and light trucks subject to fuel economy standards make up only 1.5 percent of all global man-made greenhouse gas emissions. According to data published in 1991 by the Office of Technology Assessment, a 40 percent increase in fuel economy standards would reduce greenhouse emissions by only about 0.5 percent, even under the most optimistic assumptions.

WHAT OTHERS ARE SAYING ABOUT CAFE STANDARDS:

U.S. Senator Carl Levin (D-MI):

Unfortunately, many people in Washington have a misguided focus on increasing arbitrary fuel economy standards, known as CAFE. Expanding CAFE is a plan for plenty of economic pain but almost no environmental gain. By 2012, the world is projected to produce nearly 32 billion metric tons per year of carbon dioxide. The U.S. contribution to that will be about 6 1/2 billion metric tons. If CAFE standards were increased by 4% per year, as some are proposing, the U.S. contribution would be reduced by only about 5 million metric tons. That’s a measly one-tenth of one percent of the U.S. contribution.

Because of the way CAFE is structured, it is highly discriminatory against U.S. companies and workers. It pushes consumers from U.S. vehicles to foreign-made vehicles that have the same fuel efficiency. With our automakers already facing trade barriers and an uneven international playing field, imposing on them the discriminatory features of the CAFE structure costs America jobs without improving the environment.

UAW President Ron Gettelfinger:

“Consumers want more fuel-efficient cars and we need to reduce our dependence on foreign oil. But workers are part of the environment too, and drastic proposals which destabilize our industry won’t do anyone much good in the long run.”

Sam Kazman, General Counsel, Competitive Enterprise Institute:

The end result will be enormous hardships, borne ultimately by consumers. We will end up with vehicles that cost more and perform less.

Safety will suffer as well. One of the less publicized findings of the National Research Council's 2002 CAFE study is that the program, through its downsizing effect on vehicles, already contributes to about 2,000 traffic deaths per year. That toll will only get worse if CAFE is made more stringent.

Advocates of higher CAFE duck this issue by claiming that new technologies eliminate the need for a trade-off between fuel economy and safety. This claim is false. If you take the most high-tech car imaginable and add a hundred pounds to it, two things will happen. Its fuel economy will drop, and its crashworthiness will increase. In short, there will still be a trade-off.

Ben Lieberman, Senior Policy Analyst, The Heritage Foundation

Beyond safety concerns, there is also the issue of consumer choice. A variety of smaller but more fuel-efficient models are already on the market for those who want them. In other words, there is no market failure justifying federal intervention. The car-buying public does not want or need Washington stepping in and forcing these smaller vehicles on everyone."

Diana Furchtgott-Roth, Senior Fellow at the Hudson Institute

After dead motorists, the biggest losers from higher standards would be Americans who prefer large vehicles to carry families, equipment, and pets on daily trips or long vacations.

Other major losers would be the domestic car manufacturers, GM, Ford, and Chrysler, who have invested in plants that make large sedans and light trucks, Americans' preference. The industry is already restructuring to try to reduce labor costs; higher CAFE standards would be its nail in the coffin...

If energy security is the rationale for CAFE standards, America needs to increase domestic coal and natural gas production, find out whether potential supplies of oil exist in Alaska, invest in more refinery capacity, and build nuclear power plants. We've done none of these."

The Center for Individual Freedom:

As always, this government folly will result in even higher gas and automobile prices, as well as decreased auto safety, for consumers...

The more fundamental problem with the regulations, however, is that they simply don't work. The CAFE system was imposed in 1975 as a response to the oil embargo, but America today imports an even greater portion of foreign oil than it did then...

On the other hand, these mandates will put American automakers at even greater competitive disadvantage, because Japanese and other foreign competitors will be better able to adapt to the new standards. As it is, the American Big Three are hemorrhaging losses, shuttering manufacturing plants and laying off thousands of American employees.

What a deal -- more losses by the Big Three, more layoffs and higher gas and car prices...

Unfortunately, ailing automakers and gas suppliers simply present too soft a boogeyman, and feel-good environmental platitudes too easy a justification. With the White House apparently surrendering, it is now up to American consumers and voters to resist this counterproductive policy before we suffer additional damage."

FOR FURTHER INFORMATION:

National Center for Public Policy Research Fuel Economy Information Center here

Eric Peters, National Center for Public Policy Research National Policy Analysis #556, "No to New Fuel Economy Standards: Consumer Choice, Not Congress, Should Drive Detroit's Decisionmaking," June 2007, available here

Effectiveness and Impact of Corporate Average Fuel Economy (CAFE) Standards, the National Academies Press, 2002, available http://books.nap.edu/openbook.php?isbn=0309076013&page=3
here

Ben Lieberman, Heritage Foundation WebMemo #1506, "S. 1419: Bad News for Any Energy Consumer, June 13, 2007, available here

The Coalition for Individual Freedom's Free My Ride website news center here

United Auto Workers press release, June 15, 2007 available here

Transcript of press conference by Senators Carl Levin (D-MI) and Kit Bond (R-MO) on CAFE standards, June 14, 2007, available here

by Amy Ridenour and Peyton Knight
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Labels: Congress, Energy, Environment, Regulation

Posted by Amy Ridenour at 12:57 PM

Friday, June 15, 2007

Gas 'Price Gouging' Bill Helps Politicians, Not Consumers

The House of Representatives-approved gasoline "price gouging" bill will provide no gas price relief to consumers, says Project 21 Fellow Deneen Borelli, in an op-ed published by GOPUSA:

As the summer driving season begins, consumer complaints and media hype over high gasoline prices have compelled political opportunists in the U.S. House of Representatives to pass the "Federal Price Gouging Prevention Act." The Act would punish anyone found guilty of so-called "price gouging." Regrettably, Congress' latest attempt to solve an economic issue is at best shameless political grandstanding and at worst bad public policy that will only lead to higher gasoline prices and more consumer outrage.

The legislation seeks to address the symptom of high prices but not the underlying cause. Gasoline prices are high today because of high crude oil prices, government regulations and refinery limitations, not price gouging. According to the Energy Information Administration, there are approximately 149 refineries in the U.S. delivering gasoline to approximately 168,987 retail stations. Refineries have an enormous responsibility in meeting market demands for gasoline and have specific processes in place when crude oil is received, refined and delivered to retail.

Crude oil prices fluctuate depending on supply interruptions caused by international events, pipeline leaks, natural disasters and, now that summer is approaching, the switchover that many regions must undergo from using gasoline formulated for winter to special "boutique" summer blends in order to comply with environmental regulations. The U.S. hasn't built any new refineries in over 30 years, and existing refineries are running at full capacity. While refineries operate under inflexible ca