When one thinks of energy, the thoughts about economic growth rarely come into play. In fact, most take it for granted. It charges our iPhones, laptops, and Kindles, but it also is the lifeblood that keeps our economy growing. It’s also the critical element that keeps our health services running. It allows us to channel our resources elsewhere – to be more productive during the day. However, we’re starting to see a shift occur through the policies of the Obama administration. This radical reconfiguration of our energy infrastructure will be disastrous in the long run, and some in the media don’t seem to care.
I had the pleasure of speaking with Thomas Pyle, President of American Energy Alliance, Robin Millican, Policy Director for Institute for Energy Research (IER), and Dan Kish, Senior Vice President for Policy at IER on October 26 to discuss this issue further – and how it’s currently shaping the outcome of the 2012 election. I mentioned the study Professor Gabriel Calzada conducted on Spain’s green energy investments and how he predicted a bubble, which seems to be bursting on the Iberian Peninsula. Most disconcerting was the fact that for every green job created – 2.2 jobs were lost as a result. In fact, Professor Gabriel Calzada found himself targeted by liberals and the Center for American Progress, John Podesta’s bastion of progressivism, as a consequence of his study concerning Spain’s green energy economy. Nevertheless, regardless of the outcome in Spain, President Obama plans to use it as a model and apply it here, which would enter a more aggressive phase if he were reelected on November 6.
- Financial aid to Germany’s solar industry has now reached a level that far exceeds average wages, with per worker subsidies as high as $240,000 US.
- In 2008, the price mark-up attributable to the government’s support for “green” electricity was about 2.2 cents US per kWh. For perspective, a 2.2 cent per kWh increase here in the US would amount to an average 19.4% increase in consumer’s electricity bills.
- Government support for solar energy between 2000 and 2010 is estimated to have a total net cost of $73.2 billion US, and $28.1 billion US for wind. A similar expenditure in the US would amount to about half a trillion dollars US.
- Green jobs created by government actions disappear as soon as government support is terminated, a lesson the German government and the green companies it supports are beginning to learn.
- Government aid for wind power is now three times the cost of conventional electricity.
However, one area that is salient to American voters is coal. Obama’s War on Coal has been brutal for thousands of families who live in states along the Appalachian Trail. With new greenhouse gas regulations the EPA is doling out, it’ll prevent the creation of new plants and is scheduled to shut down 10% of existing coal plats that are operational today.
Pyle warned that there will come a time when the economy will begin to grow again and the energy infrastructure that President Obama and the environmental left envision for America will not be adequate to meet the demands of commercial expansion. There’s no special switch we can turn to get our power back to appropriate levels for economic development. Furthermore, it doesn’t help our long-term energy development when government shuts down coal mining, offshore drilling, or puts the kibosh on the Keystone Pipeline. As a result, the Gulf States, Alaska, Colorado, and Wyoming are suffering under Obama’s war on energy.
While the Environmental Protection Agency has the reputation of being a ‘protector,’ they have recently become the heaviest portion of the boot that is on the throat of American enterprise. One thing the United States can never compete in again is the labor market. However, with the derivatives from oil/gas/and coal such as petrochemicals, smart phones, computers, Kevlar, shaving cream, toothpaste, and gum – we can still retain our economic vigor. However, EPA regulations are making it harder to produce such products for American and international markets.
Dan Kish, Senior Vice President of Policy for IER, noted how the air is cleaner and the water is better. In fact:
Since 1990, nationwide air quality has improved significantly for the six common air pollutants. These six pollutants are ground-level ozone, particle pollution (PM2.5 and PM10), lead, nitrogen dioxide (NO2), carbon monoxide (CO), and sulfur dioxide (SO2). Nationally, air pollution was lower in 2008 than in 1990 for:
- 8-hour ozone, by 14 percent
- annual PM2.5 (since 2000), by 19 percent
- PM10 , by 31 percent
- Lead, by 78 percent
- NO2 , by 35 percent
- 8-hour CO, by 68 percent
- annual SO2 , by 59 percent
Additionally, the EPA has affirmed this claim.
As a result, life expectancy has increased dramatically – which is an effective metric at gauging the socioeconomic health of a nation. Yet, the EPA feels that more needs to be done, despite that fact that states have their own safety and health provisions, which are tailored to accommodate the environments of each respective state. However, given the dependency mentality of the Obama administration, the EPA insists on a one-size fits all model. I guess the principles of federalism have taken a back seat.
Concerning coal, we have 497 billion short tons, which is enough to power the country for over 500 years – at our current levels of energy use. When you incorporate Alaska into the picture, it dwarfs the lower forty-eight, with 10.38 trillion short tons for our use. As a result, the United States is the ‘Saudi Arabia’ of coal. And not all coal is used to generate electricity. Thirty-eight percent of coal can be used to make jet fuel. Fifty percent of all freight loads carried in the country are comprised of coal. In fact, 25% of all rail revenue is derived from coal transportation. What happens if that were to disappear, which is what the Obama administration wants as the end game in this power play.
We current use 1 billion tons of coal a year. China uses 4 billion tons a year. As a result, even if coal were to cease of an arm of the American economy, the effects on global CO2 emissions would be de minimis at best. Kish noted how coal consumption has increased in Europe. The reason is simple. It’s cheap. It works great, and is good for electricity.
Pyle touched upon the moral aspect of energy, which is seldom reported on in the press. He reiterated the fact how 40% of India’s population don’t have access to affordable energy. Kish noted how villages in Africa keep their kids to school, although they would like to send them there, because every available hand is needed to collect biomass to keep the home warm, to cook, and possibly fend themselves from predators at night. If those kids were able to go to school because they had affordable energy, and access to it, increased economic activity from their education would have a ripple effect upon their community. Energy allows people to savor and spend their time more efficiently and purposefully. Until the Industrial Revolution, life expectancy had flat lined around age thirty for years, which saw a dramatic increase when people were able to utilize their time more efficiently due to proliferation of energy resources.
An example of the economic benefits in expanding our energy development can be seen in North Dakota. Dan Kish recently visited the state, of which 97% isn’t owned by the government, and noticed the economic boom that has occurred from extracting the shale oil from the Bakken formation. Williston, North Dakota has the busiest McDonald’s in the country. A entry-level worker could earn up to $90,000 in his first year alone working the rigs. In fact, five to ten years ago North Dakota wasn’t even a player in oil production. Now, it’s ranked #2 – behind Texas – producing 18 million barrels of oil in March of 2012. In all, between 2008-09, it’s proved reserves have increased from 543 million barrels to 1046 million barrels. Some farmers, who’ve sold their land rights, are earning as much as $150,000 a month from the royalties. Although, the monetary values is based on volume, but it’s possible.
As a result, North Dakota’s unemployment rate remains at 3%, the GDP per capita is well above the national average at $50,096, it’s spurred a budget surplus of $ 1 billion dollars, and increased the workforce from 5,000 in 2005 to 30,000 in 2012. Here’s to prosperity.
We have the resources to be energy independent. Pyle mentioned that in 1944 it was estimated that America’s proven oil reserves amounted to about 20 billion barrels. However, from 1945-2010, the United States production exceeded 176 billion barrels of oil. That’s because proven reserves tend to increase in volume as we continue to explore for more energy resources. Case in point, the Bakken Shale. However, the boot of the EPA and government regulation seems to be aimed at halting this process. It’s because government, especially the one we have now, is set on breaking the independent arms that are harvesting these resources to the will of the state. It’s about centralization of energy distribution. It’s trickle down government incarnate.
Last May, IER Policy Director Robin Millican spoke at an Americans for Prosperity rally in McLean, Va. There she said that the military has become victim to these government policies. In her speech, she noted how the Department of Defense signed a $12 million dollar contract with two biofuel companies to produce 450,000 gallons of the advanced liquid. In short, it’s incredibly expensive. This ludicrous expenditure is grounded in the words of Navy Secretary Ray Mabus who said “We are doing this for one simple reason: It makes us better fighters…our use of fossil fuels is a very real threat to our national security and to the U.S. Navy ability to protect America and project power overseas.” I’m sure the environmental left enjoys this change in course, but as Millican pointed out, the federal government has a portion of land in Alaska called the Naval Petroleum Reserve which is specifically set aside to meet the energy demands of the military. Yet, we are going to pay companies to make fuel for our armed forces that is four times more expensive than standard fuel.
Additionally, Millican also delivered some remarks about the $500 million dollar loan allocated to Solyndra. A company principally financed by George Kaiser, who was also a huge bundler for the Obama campaign in 2008. In all, big government breed corruption, crony capitalism, and dependency. She aptly pointed out that these subsidies are not meant to better society, but are goodie bags to the politically connected. She says, “look no further than a government funded program that relies on a stamp of approval from a group of unelected bureaucrats who have no technical experience.” The process in determining which system maximizes efficiency is not rigorous and comes down to nothing more than corporate welfare. Continuing with the narrative of waste this administration has incurred due to its quest for clean energy initiatives, Millican detailed the Section 1603 program that has allocated $20 billion dollars in cash payments, not loans that need to be repaid, to companies that install solar, wind and geothermal properties. Congress wants to extend this program for an additional year at the tune of $3 billion dollars.
Relating to AFP’s media campaign, Millican discussed the $529 million dollar loan to Fisker, which produced the $100,000 dollar Karma automobile that is principally made in Finland. Is this investing in America? Ms. Millican astutely pointed out that renewables only constitute 1.5% of our entire energy consumption, but get the majority share of the funds allocated from Congress.
If Mitt Romney is elected President of the United States on November 6, it’ll be partially due to Americans’ disgust towards Obama’s war on energy – specifically coal. The war on coal has affected thousands of families who live along the Appalachian Trail. An aspect the Obama campaign should’ve taken more seriously since Virginia and Pennsylvania are both battleground and coal-producing states. Currently, the small town of Grundy, Va is under siege by federal regulators who are preventing them from expanding their runway at the local airport because of coal. It’s a three-year battle, which is really an assault on the American Dream. The expansion of the airport would allow corporate jets to land, which could possibly spur economic development in Grundy and the surrounding counties.
Debra McCown reported on Grundy’s war with federal regulators back on October 17. I wrote, in a previous post, that since “the original airport was built on a piece of land made flat by surface mining by United Coal Co., which gave the land to Grundy,” the government won’t allow them to expand the runway. It’s big government run amok.
McCown also reported in The American Spectator on October 22 “more than 5,500 people turned out Sunday afternoon at a mountaintop park in remote Buchanan County to show their support for coal.” She noted how the mood of the crowd exuded a certain dubiousness since most of these workers have an uncertain future, especially if Obama is reelected. McCown quoted Jerry Shortt, who said, “the only promise Obama kept was to kill coal.” “Jerry Shortt [is] a coal miner from Richlands who was laid off temporarily right after Labor Day — and learned Friday that for him, along with 189 other employees at the mine where he worked, the layoff would be permanent,” according to McCown.
She also noted that the EPA regulations that will be the harbingers of death for the industry.
First, new air emissions standards prompted utilities to announce the closure of dozens of coal-fired power plants, cutting the demand for coal and costing jobs. In some cases, utilities chose to convert those units to natural gas, which because of new technology for extraction has become relatively cheap and plentiful. Rules for coal-fired boilers have also affected factories and other facilities that use industrial boilers.
Second, a new proposed EPA rule would require any new coal-fired power plants to be constructed with technology to control carbon dioxide emissions — technology that’s not been fully developed. With this proposal, even state-of-the-art coal burning technology, like that being used at the new power plant that just opened in nearby Wise County, couldn’t be permitted, utility officials have said.
On the water pollution side, coalmines are now subject to new restrictions in obtaining the permits needed from the U.S. Army Corps of Engineers. Targeted specifically at mountaintop mines in Appalachia, according to industry supporters, the change effectively prohibits modern surface mining and has also created significant problems for deep mining.
With the state in a statistical dead heat, the policies from the Obama administration to gut this business, and leave the families of those involved with coal mining in destitution – might be a deciding factor in how Virginia might vote on November 6.
The Washington Times’ Ben Wolfgang reported on October 23 that Obama’s crusade to destroy coal has put Pennsylvania in play. More than anything, if Romney wins PA on November 6, it’ll be a very short election night. While West Virginia was never going Democratic, Democrats there have eviscerated the Obama administration over recent coal miner layoffs.
The Miller Creek surface mine facility has been in operation for decades, and the company had planned to construct the new “King Coal Highway” as part of a reclamation project after mining is complete. Coal mine employees, Consol said, would eventually have been assigned to the highway project, once the coal supplies had been exhausted.
Democrats in the state, already angry with the administration’s “war on coal,” unloaded on the EPA on Tuesday afternoon.
“I am incensed and infuriated that the EPA would intentionally delay the needed permit for a public-private project that would bring so many good jobs and valuable infrastructure to communities that so desperately need them,” West Virginia Sen. Joe Manchin said in a statement.
For those affected, it’s called a “regional genocide.” For government, it’s a shift towards a cleaner future, despite the data suggesting otherwise. At the end of the day, it’s about government controlling more of the means of production through our energy consumption.