“No Man’s life liberty or property is safe while the legislature is in session”.

- attributed to NY State Judge Gideon Tucker

Wednesday, July 8, 2009

Democratic Energy Lies

Yesterday's Wall Street Journal featured an editorial by Robert Bryce, managing editor of Energy Tribune. The article's credits also mention his recent book, "Gusher of Lies: The Dangerous Delusions of 'Energy Independence'" (PublicAffairs, 2008).

Lies are what Mr. Bryce uncovers in this excellent piece.

For example, Mr. Bryce begins his piece,

"Whenever you read about ethanol, remember these numbers: 98 and 190.
They offer an essential insight into U.S. energy politics and the debate over cap-and-trade legislation that recently passed the House. Here is what the numbers mean: The U.S. gets about 98 times as much energy from natural gas and oil as it does from ethanol and biofuels. And measured on a per-unit-of-energy basis, Congress lavishes ethanol and biofuels with subsidies that are 190 times as large as those given to oil and gas.

Those numbers come from an April 2008 report by the Energy Information Administration: "Federal Financial Interventions and Subsidies in Energy Markets 2007." Table ES6 lists domestic energy sources that get subsidies. In 2007, the U.S. consumed nearly 55.8 quadrillion British Thermal Units (BTUs), or about 9.6 billion barrels of oil equivalent, in natural gas and oil. That's about 98 times as much energy as the U.S. consumed in ethanol and biofuels, which totaled 98 million barrels of oil equivalent.

Meanwhile, ethanol and biofuels are getting subsidies of $5.72 per million BTU. That's 190 times as much as natural gas and petroleum liquids, which get subsidies of $0.03 per million BTU.

The report also shows that the ethanol and biofuels industry are more heavily subsidized -- in total dollar terms -- than the oil and gas industry. In 2007, the ethanol and biofuels industries got $3.25 billion in subsidies. The oil and gas industry got $1.92 billion."

Thus, Mr. Bryce reveals that the ethanol lobby is already sucking up more subsidies than oil and gas do.

By way of uncovering lies by Wonderboy's administration, he continues,

"Despite these subsidies, the ethanol lobby is queuing up for more favors. And they are doing so at the very same time that the Obama administration and Congress are pushing to eliminate the relatively modest subsidies for domestic oil and gas producers. Democrats want to cut drilling subsidies while simultaneously trumpeting their desire for "energy independence."

The cap-and-trade bill passed by the House aims to "create energy jobs" and "achieve energy independence." Meanwhile, Democrats are calling to eliminate drilling subsidies that have encouraged advances in technology that have opened up vast new U.S. energy sources. These advances have made it profitable to extract natural gas from the Barnett Shale deposit in Texas and the Marcellus in Pennsylvania -- deposits once thought too expensive to tap.

President Barack Obama's 2010 budget calls for the elimination of two tax breaks: the expensing of "intangible drilling costs" (such as wages, fuel and pipe), which allows energy companies to deduct the bulk of their expenses for drilling new wells; and the allowance for percentage depletion, which allows well owners to deduct a portion of the value of the production from their wells. Those breaks provide the bulk of the $1.92 billion in oil and gas subsidies.

In May, Mr. Obama called the tax breaks for the oil and gas industry "unjustifiable loopholes" that do "little to incentivize production or reduce energy prices."

That's flat not true. The deduction for intangible drilling costs encourages energy companies to plow huge amounts of capital into more drilling. And that drilling has resulted in unprecedented increases in natural gas production and potential."

So there you have it. Wonderboy has explicitly lied about the true state of various energy sector subsidies. Or he's genuinely so uniformed and lacks understanding that he can't correctly describe the current state of energy subsidies. Yet he proposes to alter them radically.

Very scary.

Mr. Bryce concludes by observing,

"Eliminating the tax breaks for drilling will make natural gas more expensive. Tudor, Pickering, Holt & Co., a Houston-based investment-banking firm, estimates that eliminating the intangible drilling cost provision could increase U.S. natural gas prices by 50 cents per thousand cubic feet. Why? Because without the tax break, fewer wells will be drilled and less gas will be produced. The U.S. consumes about 23 trillion cubic feet of gas per year. Simple arithmetic shows that eliminating the drilling subsidies that cost taxpayers less than $2 billion per year could result in an increased cost to consumers of $11.5 billion per year in the form of higher natural gas prices.

Amid all this, Growth Energy, an ethanol industry front-group, is pushing the Environmental Protection Agency to adopt a proposal that would increase the amount of ethanol blended into gasoline from the current maximum of 10% to as much as 15%."

That's an interesting explanation of the unintended consequence of removing current oil and gas production incentives. The current administration evidently fails to understand the effects on pricing and supply of curtailing currently in-place production incentives for oil and gas.

Regarding the ethanol energy scam, Bryce notes,

"That increase would be a gift to corn ethanol producers who have never been able to make a go of it despite decades of federal subsidies and mandates. Growth Energy is also pushing the change even though only about seven million of the 250 million motor vehicles now on U.S. roads are designed to run on fuel containing more than 10% ethanol.

There is also corn ethanol's effect on food prices. Over the past two years at least a dozen studies have linked subsidies that have increased the production of corn ethanol with higher food prices.

Mr. Obama has been pro-ethanol and anti-oil for years. But he and his allies on Capitol Hill should understand that removing drilling incentives will mean less drilling, which will mean less domestic production and more imports of both oil and natural gas.
That's hardly a recipe for "energy independence." "

Wow. Only about 4% of vehicles can even run on higher ethanol levels, and using it drives up the price of much of our food.

Yet the administration and Congress want to go full-speed ahead stripping existing energy production incentives from oil and gas, then paying to convert more of our major grain food, corn, into an energy commodity.

Foolish? You bet!

But what do you expect from a president with no life accomplishments, understanding of business or government. Just his own dreams of leveling endless playing fields as a lawyer.

Silly dreams for which we are all about to pay dearly.

Tuesday, July 7, 2009

Sarah Palin's Resignation

What a wacky end to a wild ride in the national public eye for Sarah Palin.

As the most popular sitting governor of any state at the time of her selection for VP on McCain's presidential ticket, Palin had many desirable and impressive attributes.

Sadly, things seemed to have gone downhill from there for her. First she was badly-handled by McCain's staffers. Then the outlandish, false rumors started regarding her wardrobe and spending on her preparation for the late summer's campaign.

But perhaps the most egregious consequence of her sudden fame was a tidal wave of anger by liberals who could offer no objective reasons for hating her. I personally have several female liberal Democratic acquaintances who simply sputter and physical go into contortions when Palin's name is mentioned, but can offer no sane explanation for their reactions. They typically criticize Palin's mannerisms, eye-glasses or the state of Alaska.

I'm sure much of this liberal female- and male- rancor is based upon Palin's simple story of a rise to power through competence, likability and normalcy. She's a beautiful woman with a nice husband, both are athletic, and Palin didn't attend an Ivy League university or become a lawyer.

In contrast, Hilary Clinton is, at best, physically plain, a lawyer with no record of any important political accomplishment. She's rather bland compared to Palin's genuine excitement, multi-dimensional life and accomplishments and approach to the electorate.

Despite the confusing currents surrounding Palin's national rise and, now, departure from office, I have a few thoughts on her recent actions and near term prospects.

Like Karl Rove, I also think that Sarah Palin is pretty far from ready for the prime time, national stage of Republican politics. Being VP on a losing ticket is miles away from genuine contention for the top spot in November of 2012. For Palin, I suspect the rapid rise to national prominence has caused her to feel she's better-positions and -prepared for national campaigning than she really is.

Judging by her comments, Palin is largely focused on values and perceived splits in the Republican party, particularly between entrenched party operatives and more conservative voters who are often registered as independents.

While I always give governors the edge over Senators in presidential races, Palin does hail from a small state, and now has failed to complete even one term.

If you recall, Jimmy Carter was similarly from a small state. He, too sounded high moral values and populist themes, only to prove, once in office, that his cracker state background was simply not up to performing well as president.

I didn't give Palin much of a chance at a 2012 nomination even if she had remained governor. Now, I think it will be nearly impossible. Give her credit for heading off the continuing stress of running a distant state while trying to spend time and attention on national issues. Evidently, Alaskans were already growing weary of her obvious attempt to keep her hand in national politics.

There's another side to Palin's resignation, though, that troubles me. It seems that, like George W. Bush, she had productive relationships with Democrats in her state's legislature, until her rise to McCain's ticket.

Somehow, it seems that Alaskan Democrats became obligated to tear Palin apart every chance they got, and suddenly become contentious. The people of Alaska clearly haven't been well-served by these Democratic antics.

Is it now the case that opposition parties to a sitting governor must go negative as soon as that governor gets national attention and is touted as a presidential candidate?

What happened to state pride and some sort of bi-partisanship to actually make government- whether state or federal- work?

Palin's resignation gives one cause to worry about the divisive, damaging role our political parties seem to play toward any politician from the opposing party who has demonstrated competence, performance and genuine success in serving their electorate.

Monday, July 6, 2009

Ending One-Party Legislation in Congress

I'm working my way through the the points in this post, in which I enumerated what I consider to be 10 serious flaws in our Constitution.

Today I want to discuss my third point,

"Passage of legislation over significant minority opposition with no attempt at compromise"

This year, with a president and both chambers of Congress controlled by one party, but not in a landslide fashion for any of the three, we have already seen Democrats stiff-arm Republicans over the stimulus and 'cap and trade' bills. Threats have been made about using a 'reconciliation' method to pass universal health care, so that there could be no attempt to discuss it. And the president has consented to this, whether tacitly or explicitly.

In all of these cases, the worst results is that, contrary to what voters want, which is sensible deliberation and compromise, the Democrats have simply ignored any input from Republicans.

Does anybody really think our country is best-served by one party shoving its ideas through by narrow margins? Especially on sweeping issues such as the largest single spending bill in our nation's history, or bills totally restructuing energy and healthcare sectors of the economy to have much more explicit governmental interference?

These are issues which affect large parts of every American's life. Surely whatever landmark legislation is passed needs to respect the concerns of a sizable minority.

Thus, my suggestion that all Congressional bills must pass with a 75% majority. That way, either significant collaboration from both parties must be gained, or one party must truly have overwhelming sway with voters.

The Constitution's article regarding Congress must be modified to clearly state that each bill, in order to become law, must have a 3/4 majority of each House- nothing less.

This nonsense of passing 'cap and trade' legislation in the House by 7 out of 435 votes serves nobody at all.

It's a disgrace to all Americans that our Congress treats the welfare of voters so diffidently as to play politics on such core areas of our lives.

Sunday, July 5, 2009

Congressional Junketing Explodes

Did you read the recent news concerning Congressional travel, a/k/a 'junkets?'

It seems that the millions of dollars spent by our Congressional Representatives and Senators has doubled in something like the last 4-6 years, and is up some astronomical percentage over a decade.

It's a bi-partisan trough feed for our Federal piggies.

Wives attend, free, when government aircraft are used. Guess what's been expanding? Yep. The federal airliner fleet at Congress' disposal, as well as budgets and personnel to organize the use of said airplanes.

See, if our Congressional officials flew commercial on these3 junkets, wives would have to be paid for.

These people aren't shy about looting us taxpayers, either. One retiring Republican Representative admitted to taking a sort of 'round the world' farewell junket, before entering- what else- the lobbying trade?

It's sickening, isn't it? Of course, counting on the July 4th holiday to defuse this news, our elected federal hogs are back home folksing it up to appear just like one of us.