Monday, July 23, 2007

Conservation, the Environment, and “Energy Independence”

As gas prices have been high and global warming has been hot, the media has spent an inordinate amount of time discussing energy. New topics are touted on the nightly news. Those who get their insights from the news--and who do not have a background in the subject themselves--often question why don’t we do this or that. Recently at a public event where CARE was present, a man spouted a comment like: “I am waiting for the day I can hook my care up to the natural gas line at my house and drive on natural gas.” Wouldn’t hat be a nice idea? But in reality it doesn’t work, at least not yet. There are numerous problems with many of the ideas. We need ideas! From ideas, come more ideas, and more. Like a brainstorming session, many of the ideas do not work, but in the pool of thinking, a viable one may surface. But as you hear these new ideas presented, remember, they are ideas—not reality.

Here one of CARE’s Energy Counsel members shed’s light on the difference between energy ideas and energy reality.

Energy Ideas vs. Energy Reality
Few issues in modern history have generated more ideology-driven misinformation than energy. While most would agree that energy is crucial to the world economy, very little public discourse seems based on the intractability of certain facts.

The problem: the huge gap between the theoretical and the practical, the latter affected by logistical and economic considerations. For certain people, the achievement of their desired course of action, based on their preferred world-view, is often confronted with abysmally small odds. It should not be acceptable for governments and non-governmental groups to avoid disclosing the required path and costs for achieving their goals. Many imply that the government and/or taxes should provide the funds, but even then the magnitude of such costs is rarely revealed.

Much of the rhetoric involves issues such as conservation, the environment, and “energy independence.” Exacerbating the situation is the recent clamor about anthropogenic global warming, and the expressed desire to either reduce carbon dioxide emissions (by using non-fossil fuels) or to sequester them.

Let’s examine the big picture of world energy supplies between 2004 (the latest year for which full information is available) and the forecast for 2030. According to the Energy Information Administration:

· In 2004, world energy demand was 446 quads (quadrillion British thermal units). By 2030, demand is expected to be 721.6 quads, a 62-percent increase.
· In 2004, fossil fuel demand was (in barrels of oil equivalent): oil, 30.1 billion; natural gas, 18.5 billion; and coal, 20.4 billion.
· In 2004, those three sources accounted for 86 percent of total global energy use.
· By 2030, expected fossil fuel use will be (again, in barrels of oil equivalent): oil, 42.7 billion (a 42-percent increase over 2004); natural gas, 33.9 billion (an 84-percent increase); and coal, 43.9 billion (a 71-percent increase).
· By 2030, fossil fuels will account for a business-as-usual 86.5 percent of the total energy mix. That’s despite all the rhetoric about alternatives and despite the fact that the total energy demand will increase by 62 percent.

Wind and solar energies, the two most touted non-fossil sources, will not amount to more than one percent, a fraction of total energy demand. The reason: wind-generated electricity is at least twice the break-even cost of natural gas, and even larger than that for coal. Solar, even with speculated and currently non-existent technology, is at least ten times as costly.

The sequestration of carbon dioxide is even more problematic. According to EIA projections, the oil and gas used for transportation and power generation, plus the amount for coal combustion, will result in an increase in world carbon dioxide emissions, from 25.55 billion metric tons in 2004, to 43.68 billion metric tons in 2030, a 71-percent increase.

If only the incremental carbon dioxide above that emitted in 2004 is sequestered, the operating costs would be $180 billion to $540 billion per year (at $10 to $30 per ton, a figure from an August 2003 report by the MIT Laboratory of Energy and the Environment).

If the sequestered carbon dioxide is injected at what is considered a very good rate per well, 10,000 tons per year (a figure from a 2004 report by the National Energy Technology Laboratory), then that would require 1.8 million new wells. That’s about the same number of wells now in production worldwide. At an average drilling cost of $2 million per well, those new wells will cost $3.6 trillion. The ancillary infrastructure for those wells could push the cost to $7.2 trillion – about 60 times the current annual budget for well construction in the industry, estimated at $120 billion.

This is why the anthropogenic global warming issue is so critical. For a country such as the United States, “energy independence” would mean reducing the use of foreign oil and natural gas. It would mean electrifying transportation (at a huge cost in new infrastructure), and using a lot more nuclear and a lot more coal, with far increased emissions to be sequestered.

The path from idea to reality is lined with staggering costs.

Prof. Michael J. Economides, University of Houston and also Editor-in-Chief Energy TribuneHouston, TX

Tuesday, July 17, 2007

How Did Live Earth Really Impact the Earth?

Like many of us, you may have wondered about the impact of Live Earth. The media covered it as if it was the Super Bowl. Reports following the event talked about the jets flown in by the stars and the “carbon footprint” of each jet compared to average Americans. They also talked about the smaller than touted attendance. But here’s an interesting piece about Live Earth written by one of our Energy Counsel Members. Does this make you think?

Live Earth–Dead Africans?

Promoters claim the Live Earth concerts drew 2 billion fans--a number equal to people worldwide who still don’t have access to electricity. Others say the actual audience was a fraction of that--a few tens of millions, including via television and webcasts.

About 45,000 attended the actual concert in Australia, 100,000 in Brazil, a few hundred in Washington, DC. In Johannesburg, the first snow in 25 years was blamed for almost nobody showing up. (If this snow was due to climate change, what caused the snow 25 years ago?) Elsewhere the heat was blamed. And only 4.5 million watched the BBC television broadcast in Britain.

However, the concerts might be deemed successful if measured by cash the promoters raked in. By gasoline and aviation fuel burned to get to the events (the stars alone flew a combined 223,000 miles, says the New York Post). By wattage consumed and greenhouse gases emitted to power televisions and air-conditioners for stay-at-home fans. Or by the overheated and often hypocritical rhetoric of global warming catastrophe.

Al Gore demanded immediate action, but ignored his own profligate consumption: over a thousand flights (mostly first class or in private jets) to warn of a “climate crisis,” a house that uses 20 times more electricity than the average US home, and more in a week than 26 million Ugandans together use in a year.

Prince Charles’ three mansions produce 500 times the CO2 emissions of the average British home, and he and his entourages routinely burn thousands of gallons of fuel on globe-trotting flights.

Madonna wailed that people must “jump up and down” to prevent the alleged crisis and “save the planet”--then took a private jet back to one of her nine houses and fleets of gas-guzzling cars.

Actor Ed Begley, Jr. uses alternative energy to supplement enormous amounts of non-alternative electricity that powers the community and movie studios that make his lifestyle and career possible. He believes Africans, by contrast, should have electricity only where they need it: little solar panels “on their huts.”

These alarmists attempt to justify their extravagant lifestyles by grandstanding at Live Earth concerts--and purchasing energy-efficient light bulbs or “carbon offsets” (eg, having trees planted somewhere). With their next breath, they say other people’s energy consumption could cause catastrophic global warming that could bring record cold and heat waves, terrible floods and droughts, disease epidemics and species extinctions.

The only “evidence” they have for any of this are worst-case scenarios produced by computer models that do not accurately reflect complex atmospheric processes and cannot predict temperature or rainfall even one year in the future--much less 40 or 90 years. That’s like saying the movie “Jurassic Park” proves scientists can bring dinosaurs back to life.

But if the concerts cause more people to demand that Africa and other poor countries not develop the energy they so desperately need, these false global warming “solutions” could be disastrous for the world’s most impoverished citizens.

Some 95% of Sub-Saharan Africans still do not have electricity, lights or refrigeration--or have them only a few hours a week. As a result, millions die every year from lung infections caused by pollution from wood and dung fires, and acute intestinal diseases caused by tainted water and spoiled food. Millions more die from diseases that would be largely eradicated by the improved living standards, healthcare systems and agriculture that come with prosperity, modern technology and abundant energy. The situation is likewise dire in many other areas.

But Al Gore, Live Earth rock stars and radical pressure groups like Rainforest Action and Greenpeace constantly battle energy projects in poor countries. They oppose coal and gas-fired power plants because of speculative global warming, hydroelectric projects because they dam up rivers, nuclear power because it generates radioactive wastes. They expect African and other poor nations to base their future on insufficient, expensive, unreliable wind and solar energy. That is a virtual guarantor of perpetual poverty.

Environmentalists also oppose biotechnology to improve agricultural output, insecticides to reduce malaria and other diseases, and even jetliners that bring tourists to Africa and African produce to Europe.

At bottom, environmentalists don’t want the world’s poor to rise up out of poverty and become middle class, because then they would become consumers, use more resources and demand more electricity. Green activists are happy to demand more aid and debt relief, but they do everything possible to prevent energy, mineral and economic development, modern agriculture and living standards, or meaningful opportunities for the world’s poor to take their rightful places among the Earth’s healthy and prosperous people.

Poor countries should worry not about climate change--but about whether they will have electricity for refrigerators, lights, and modern homes, hospitals, schools, shops, offices and factories. They should be concerned not about the supposed (and often far-fetched) risks of development and technology--but about the real, immediate, life-threatening dangers that development and technology would prevent. Our climate has always been turbulent, unstable and unpredictable. While the scientific debate continues to rage over the mechanisms and consequences of climate change, growing numbers of scientists say there is little evidence that humans and carbon dioxide are the primary cause, or that human influences will bring catastrophic change. (A number of these scientists are featured in the new British television documentary, “The Great Global Warming Swindle” and Chris Horner’s book, The Politically Incorrect Guide to Global Warming and Environmentalism.)

Ice core and other data indicate that, over the past 650,000 years, temperatures usually rose first and CO2 levels increased several centuries later. That’s the inconvenient truth about Al Gore’s alarmist theory.

Other studies point to the sun as the dominant cause of climate change. As its energy output increases, the Earth warms, stronger solar winds reduce the cosmic rays that help generate clouds, fewer clouds cause our planet to warm still more, and warmer oceans release more CO2 into the atmosphere. Less solar energy results in reduced solar wind, more cosmic rays and thus more clouds--further cooling the planet.

If solar scientists are correct, in another decade or so, the sun will begin its weakest cycle in two centuries, possibly leading to another period of global cooling.

The lesson for poor nations is simple. Their people need--and deserve--abundant, reliable, affordable energy to power modern, industrialized, healthy, prosperous nations. Governments and communities must help facilitate this process, and challenge anti-energy pressure groups whenever necessary.

Poor countries don’t have to depend on the World Bank or foreign aid--any more than Britain and the United States had to rely on them to develop and prosper. If their institutions and policies are sound, poor countries and communities can get the investment money and technology they need from private domestic and foreign sources.

African, Asian, Latin American and Eastern European countries have abundant oil, gas, coal, nuclear and hydroelectric resources. And they have the ultimate resource--the brain power, creativity and proud work ethic of their people.

If they can harness these resources, and unleash the power of free enterprise--under sound legal, regulatory, economic and property rights systems--they will generate previously unimaginable opportunity, health and prosperity for their people.

Paul Driessen is senior policy advisor for the Congress of Racial Equality and Atlas Economic Research Foundation, author of Eco-Imperialism: Green power ∙ Black death (, and one of the experts profiled in “The Great Global Warming Swindle.”

Thursday, July 12, 2007

Canadian Ice Cores Shed Light on Global Warming

It seems like we post a disproportionate amount of items dealing with ethanol and/or global warming. We are not fixated on these topics, but they are both newsworthy in that they are addressed on an almost daily basis by the mainstream news media. The information presented, however, only offers one side of the story. While CARE is not trying to be specifically pro or con on one side or another, as we have mentioned in previous postings, we do believe you need a “second opinion” so you can develop your personal viewpoint with the full spectrum of expert advice. If you have not read CARE’s previous postings on global warming, please track back to them so you can have the complete picture. Today we offer you insights on the topic from one of our frequent contributors: Dennis Avery.

Another scientist has added his voice to the Global Warming debate. Canadian climatologist Tim Patterson says the sun drives the earth’s climate changes—and Earth’s current global warming is a direct result of a long, moderate 1,500-year cycle in the sun’s irradiance.

Patterson says he learned of the 1,500-year climate cycle while studying cycles in fish numbers on Canada’s West Coast. Since the Canadian West had no long-term written fishery records, Patterson’s research team drilled sediment cores in the deep local fjords to get 5,000-year climate profiles from the mud. The mud showed the past climate conditions: Warm summers left layers thick with one-celled fossils and fish scales. Cold, wet periods showed dark sediments, mostly dirt washed from the surrounding land.

Patterson’s fishing profiles clearly revealed the sun’s 87 and 210-year solar cycles—and the longer, 1500-year Dansgaard-Oeschger cycles found since the 1980s in ice cores, tree rings, and fossil pollen.

“Our finding of a direct correlation between variations in the brightness of the sun and earthly climate indicators is not unique,” says the climatologist from Carleton University. “Hundreds of other studies, using proxies from tree rings in Russia’s Kola Peninsula to water levels of the Nile, show exactly the same thing: The sun appears to drive climate change.”

But there was a problem. By themselves, the variations in solar irradiation were too small to account for the big variations his research team found in the Canadian fish catches.

“Even though the sun is brighter now than at any time in the past 8,000 years, the increase in direct solar input is not calculated to be sufficient to cause the past century’s modest warming on its own. There had to be an amplifier of some sort for the sun to be a primary driver of climate changes. Indeed, that is precisely what has been discovered,” says Patterson.

“In a series of groundbreaking scientific papers starting in 2000, Vizer, Shaviv, Carslaw and most recently Svensmark et al., have collectively demonstrated that as the output of the sun varies . . . varying amounts of galactic cosmic rays from deep space are able to enter our solar system. . . . These cosmic rays enhance cloud formation, which, overall, has a cooling effect on the planet.”

“When the sun is less bright, more cosmic rays are able to get through to Earth’s atmosphere, more clouds form and the planet cools. . . . This is precisely what happened from the middle of the 17th century into the early 18th century, when the solar energy input to our atmosphere . . . was at a minimum and the planet was stuck in the Little Ice Age.”

The Canadian expert concludes, “CO2 variations show little correlation with our planet’s climate on long, medium and even short time scales.” Instead, Earth’s sea surface temperatures show a massive 95 percent lagged correlation with the sunspot index.

Patterson says climate change is the most complex field we’ve ever studied. He notes that a 2003 German poll of 530 scientists from 27 countries found two-thirds of the respondents doubted that “the current state of scientific knowledge is developed well enough to allow for a reasonable assessment of the effects of greenhouse gases.”

Attempting to stop global warming with the Kyoto Protocol, he warns, could be as useless as King Canute commanding the tides to cease.

DENNIS T. AVERYFormer senior policy analyst for the U.S. State Department, co-author Unstoppable Global Warming--Every 1500 Years

Wednesday, July 11, 2007

The 2007 Energy Bill: Significance, Symbolism and Cost

After receiving the opinions of Paul Dreissen, we asked other member’s of our Energy Counsel for their thoughts. The following is what we received from Michael Economides (previously published with Human Events). What are the Senators thinking? Or, are they thinking?

On June 21 the US Senate passed an energy bill that if it becomes law it would set in motion one of the most economically destructive paths in memory. Thrown together is an unsavory mix of little impact but enormously expensive, complete with delusions of energy independence, biofuels, global warming and all the other slogans du jour of environmentalism. More to the point, and not surprising, the bill does not address at all the fundamental issue: In a modern world run on energy, with galloping China and India, with ever-controlling producing nations, where will America’s energy supply come from? The country imports now almost 70 percent of its oil and the rest of it is under constant assault.

A sample:
An increase in automobile fuel economy requirements (the Corporate Average Fuel
Economy, CAFE standard) to a fleetwide average of 35 mpg by 2020 from the
current requirements of 27.5 mpg for cars and 22.2 mpg for SUVs and small

There is nothing wrong with better efficiency, but we went through this before. The American public voted with bigger cars, driving more and asking for more services. For example, FedEx and DHL have created a new era of deliveries and expectations. One of the things that the social engineers forget is that the personal car is a symbol of American personal freedom, what makes this country what it is. And yet they constantly want to harp on forcing us back to a European mold, forgetting that Holland can be driven across in two hours. Gasoline demand constantly increases because we drive more, and we do more with our driving. In 2004, the National Commission on Energy Policy determined that even if Congress mandated that the domestic auto fleet increase its average to the much larger fuel economy of 44 miles per gallon America’s motor fuel consumption will still increase by 3.7 million barrels per day by 2025. Even the apologists of the bill, in very flawed calculations, suggest that the bill will save 1.3 million barrels per day (about 6% of current consumption) by 2025 and manipulatively “slightly less than what we import from Saudi Arabia.” (echoes of Al-Queda?) The new CAFE standards will put an economic straightjacket on already battered US automobile manufacturers but are unlikely to change the American public’s tastes and preferences.

Requires that half of the new cars manufactured by 2015 be capable of running on
85 percent ethanol or biodiesel fuels

A requirement to produce 36 billion gallons a year of ethanol, as a substitute for gasoline, by 2022, a sevenfold increase over production in 2006. Ethanol would be made from corn and cellulosic sources such as prairie grass and wood chips.

Corn ethanol is a scam with a negative energy balance. It takes about 1.8 gallons of gasoline to produce one gallon of ethanol. More important is that corn ethanol cannot provide enough fuel to displace imported oil. In 2005, U.S. farmers produced about 11.1 billion bushels of corn. If the U.S. turned all of that corn into ethanol, it would only supply about 6 percent of America’s total annual oil needs or about 20 percent of our gasoline needs. If all 3.2 billion bushels of soybeans produced by American farmers in 2006 were converted into biodiesel, they would only yield about 4.8 billion gallons of diesel fuel, about 1.5 percent of America’s oil needs. The talk about cellulosic ethanol is tantamount to legislating that all new American children grow to be 6-ft tall. The enzyme that would convert biomass into cellulosic ethanol does not exist and nothing is expected any time soon.
Supports large-scale demonstrations that capture carbon dioxide from
coal-burning power plants and injects it into the ground.

Carbon dioxide sequestration is what the bill advocates imply. But again reality raises its ugly head. Taking just the portion of oil and gas used in combustion for transportation and power generation (the rest is used as source of materials) and adding the combustion of coal, according to EIA calculations, world carbon dioxide emissions are slated to increase from 25.55 billion metric tons in 2004 to 43.68 billion metric tons per year in 2030, a 71 percent increase. If just the incremental carbon dioxide is injected at a very good rate per well of 10,000 tons per year, there is a need for 1.8 million new wells, about the same number of wells in current operation worldwide, still active and drilled in the entire history of production of all oil and gas. At an average cost of just drilling of $2 million per well, there will be a need for $3.6 trillion, not counting infrastructure which could easily double the figure. This is about 60 times the current annual budget for well construction in the industry, estimated at $120 billion.

This is why anthropogenic global warming is not a trivial issue for the world in either the cost of energy transition to something else or in sequestering emissions. In going from idea to reality the path is lined with staggering costs.

But none of this bothers the architects of this bill, whose real significance is at best symbolic and very costly but smacks with social engineering, a yet another failed attempt throughout the last 150 years in Europe and the United States. We should all be stewards of the environment (the US is one of the cleanest nations on earth), but radical environmentalism, even when it wears a tie, has replaced older–isms. It is more of a nuisance, intended by mostly upper middle class and wealthy westerners to shock and be relevant, a more veiled attempt than Paris Hilton’s antics. Of course, try as they may, the US economy is enormously resilient and will likely shrug this nonsense off.

Although it may have been attributed to others, the recent bill has about the same depth as what Georges Clemenceau, France’s World War I prime minister said: “If my son is not a communist by the age of 20, I will disown him and if by the time he is 40 he is still a communist I will disown him.” Many environmentalists are way past 40.

Prof. Michael J. Economides, University of Houston and also Editor-in-Chief Energy TribuneHouston, TX

What will the new Energy Bill Really Cost?

Would you like to know the truth about climate change consensus, prevention and price tags? Read on! Paul Driessen, a member of CARE’s Energy Counsel, share’s his insights here. Agree? Disagree? Give us your thoughts!

The Sarbanes-Oxley corporate ethics law and 2006 elections supposedly inaugurated a new congressional commitment to ethics, transparency, accountability and consumer protection. Something has been lost in translation.

The “energy” bill now wending its way through the legislative labyrinth dedicates $6 billion to goodies like more energy-efficient snowmobiles for ski resorts, outlaws “price gouging” at the gas pump, and sets new mileage standards that will likely make cars and light trucks less safe and cost more lives (Check out CARE's July Newsletter for more information on this item). It also provides subsidies and mandates for politically correct “alternative” energy projects that probably wouldn’t survive without such aid.

But the bill doesn’t increase the nation’s energy supply by one drop of gasoline or one watt of electricity, says Congressman Jim McCrery (R-LA). It lifts no bans on oil and gas drilling, and does nothing to ease regulatory impediments to pipelines, transmission lines, refineries, or coal and nuclear generating plants. The only power it generates is expanded bureaucratic power over energy and economic decisions.

Its ethanol mandates will result in more land converted from wildlife habitat to corn fields, and in greater use of water, fertilizer, pesticides, and tractor and truck fuel. Corn prices will continue to rise, along with the cost of meat, candy, soft drinks and other products that use corn for feed or corn syrup as a sweetener. The biofuel itself will cost more, but provide noticeably less mileage per tank.

Even more problematic, is the rush to “do something” about global warming. Assorted climate change bills propose to slash US carbon dioxide emissions by varying amounts, under different timetables, to prevent speculative disasters conjured up by computer models that do not reflect complex atmospheric processes and cannot predict temperature or rainfall one year in the future, much less 40 or 90.

The worst of the lot (the Sanders-Boxer bills) would compel the United States to cut CO2 emissions to 15% below 2006 levels by 2020, and 83% below 2006 levels by 2050. That’s far more than even the Kyoto Protocol contemplates.

Such mandates might help special interests – which are lining up to proclaim “consensus” on climate change and claim a share of any taxpayer-funded entitlements. But they would severely impact US energy production, transportation, agriculture, manufacturing, employment and families.

An MIT analysis concludes that Sanders-Boxer would cost the US up to $403 billion in foregone Gross Domestic Product, corresponding to a loss of some 4.5 million jobs and an impact of $5370 per family of four. The Sanders-Boxer, Feinstein and Waxman bills would result in carbon offset allowances priced at $210 per ton of CO2, adding a truly price-gouging $95 to the cost of a barrel of oil, $2 to a gallon of gasoline, $143 to a ton of coal, and 50% to the price of electricity, by 2020.

Domestic production of goods and services would plummet, and families with low incomes or living in regions with high heating or air-conditioning needs would be disproportionately affected, as they would have to spend a growing portion of their incomes on energy, food and consumer products.

MIT’s evaluation presumes developing countries would match our emission cutbacks. It’s more likely that they would prefer to reap the benefits of more energy at lower prices, to fuel economies, create jobs and improve living standards that lag far behind those of wealthy Western countries. That means the impacts on US workers and consumers could be much worse than MIT anticipates.

The US Energy Information Administration calculated that Kyoto mandates (CO2 emission reductions to 5% below 1990 levels) could cost up to 2.5 million jobs and reduce our GDP by up to $525 billion annually – equivalent to a tax of $7,000 on every family of four.

Wharton’s Business School of Economics determined that Kyoto would cost 2.3% of America’s GDP. With a $12 trillion GDP in 2006, that translates into $275 billion a year or $3700 per family.

Management Information Services concluded that Kyoto could eliminate 1.3 million black and Hispanic jobs, force nearly 100,000 minority businesses to close, and cause average minority family incomes to plunge by more than $2,000 a year. States with large minority populations would lose $10-40 billion a year in economic output, and over $2 billion annually in tax revenues.

At these prices, Congress should be 100% certain about alleged climate change cataclysms, before enacting any such laws. But the case for immediate drastic action is getting progressively weaker, and none of these measures would bring any detectable environmental benefits.

In fact, Congress is telling American families it is prepared to impose enormous costs to achieve minuscule reductions in global CO2 emissions and avert speculative impacts 90 years from now – on the assumption that carbon dioxide causes climate change, and any change will be disastrous.

The Kyoto Protocol, if adhered to by every signatory nation, would prevent a mere 0.2 degrees F of warming by 2050. To stabilize atmospheric CO2 and prevent theoretical climate catastrophe, we would need 30 such treaties, each one more restrictive and expensive than the last. The various congressional bills would accomplish far less than that.

Moreover, increasing numbers of scientists doubt that carbon dioxide is the culprit. New studies suggest that there has been no rise in average global atmospheric temperatures since 1998, despite a 4% increase in CO2. Ice core and other data indicate that, over the past 650,000 years, temperatures usually rose first and CO2 levels increased several centuries later.

Timothy Patterson, Henrik Svensmark and other climate scientists have found growing evidence that our sun is the dominant cause of climate change. As its energy output varies, so does the solar wind that determines how many galactic cosmic rays reach the Earth.

More solar energy warms Earth directly and generates stronger solar winds, deflecting cosmic rays, reducing cloud cover and warming us still more. Less solar energy results in reduced solar wind, more cosmic rays and thus more clouds – further cooling the planet.

Solar scientists now predict that, by 2020, the sun will begin its weakest cycle in two centuries. That could bring on global cooling that would harm agriculture in northern latitudes, raise heating bills, and make the clamor about manmade global warming look like so much wasted hot air.

Will Rogers once said, every time Congress makes a joke it’s a law, and every time it makes a law it’s a joke. The energy and climate bills are perfect examples.

Congress often exempts itself from ethics, accountability and price-gouging laws. The citizens are rarely so fortunate.

Paul Driessen, Senior Policy Advisor for the Committee For A Constructive Tomorrow and Center for the Defense of Free Enterprise, and author of Eco-Imperialism: Green power ∙ Black death.

Tuesday, July 3, 2007

Do We Have To Develop Everything? Can’t We Just Leave Some Places Alone?

A CARE Blog reader directed us to an interesting newsletter called Whiskey and Gunpowder. Some recent postings on one of the team’s visit to Alaska are likely to be of interest to you. We encourage you to give them a look. These two should be of particular interest to you: There’s Money to Be Made in Alaska’s Resources and “Pretty High Land.” (Please note Whiskey and Gunpowder is written by a team of investment counselors and that perspective is found within their writings. They offer an interesting viewpoint.) While Whiskey and Gunpowder has been landing in the CARE “in-box” for a couple of months, it is this response from a Whiskey and Gunpowder reader to the Alaska postings that prompted us to introduce you to this resource. “Resident geologist” Byron King offers some thought provoking insights to a question many of you may have asked: “Do we have to develop everything? Can’t we just leave some places alone?”

Part of “responsible energy” is responsibly developing the resources that are there for us. Somehow the common perception is that drilling is equal to raping the land. This report shows how it not only does not destroy the natural habitat, it actually encourages the critters reportedly being destroyed.

Richard in Illinois asks:
“You seem to view the industrial development of Alaska as a good thing, and further development as a foregone conclusion. Do we have to develop everything? Can’t we just leave some places alone?”

Byron’s Reply:
Actually, Richard, I try to play these issues down the middle. ARCO and its geologists discovered the Prudhoe Bay oil field in 1967, when I was in middle school. The development consortium, acting under legislation passed by the U.S. Congress, built the Alaska Pipeline in the 1970s, when I was in college. I had nothing to do with it. And now I am merely describing where we are and forecasting where the ominous trends seem to be taking us. As Bill Bonner once mentioned to me, “I wouldn’t send somebody to cover a baseball game who does not understand the game of baseball.” And if during the past 30 years or so you have driven a car, or flown in an airplane, or heated your house, or eaten food grown on and transported from a farm, you have benefited directly or indirectly from the oil of Prudhoe Bay and the Pipeline. After 15 billion barrels of oil production, it’s a little late in the game to be complaining about industrial development in Alaska. So spare me the preaching and scolding, OK?

But you raise a good point, Richard. “Do we have to develop everything?” Yes, damn good question. Do we? That oil and gas of the North Slope has been there for millions of years of geologic time, and it will stay there for millions more years if it is left alone. (Now, if it were in China, I am inclined to think that the drilling rigs would be turning and burning. It’s a cultural thing.) What are you prepared to give up if, say, “we” decide not to build a Northern Pipeline to transport natural gas from the Arctic through Canada and to the Lower 48? You, for example, live in Illinois. And I read somewhere that it gets cold in Illinois in the winter. What’s your plan?

I mentioned in one article that the Alaska Pipeline and Haul Road are rather difficult to spot from the air. At the end of the trip to Prudhoe Bay, we flew down to Fairbanks in Caribou aircraft, and I was sitting in the co-pilot seat with a God’s-eye view of the Brooks Range. I knew what I was looking for, and I knew exactly where to look, and from 9,000 feet I could barely spot the Pipeline and Haul Road. So that aspect of development is visually insignificant in the grand scheme.

As for the roads and drilling pads of Prudhoe Bay, they are all just a few feet of gravel. When the oil is pumped out, sometime in the far distant future, I suspect that people will just plug the wells and dig out the gravel and give the land back to Mother Nature and her permafrost. It is not as if anybody is building housing developments up on the North Slope. Really, do you want to live up there? It’s just plain cold and harsh, plus dark for months of the year.

I mentioned the Haul Road in one article. It is a 20-foot-wide gravel road about 420 miles in length from Fairbanks to Deadhorse. It was upon this road that the equipment and materials were hauled in the 1970s to construct the Alaska Pipeline. Of interest, many forms of wildlife actually use the Alaska Pipeline and adjacent Haul Road as an assistance to living. Generally, the gravel beds under the Pipeline and Haul Road are built up to just a few feet above the nearby elevations. So moose and caribou walk on the elevated tracks to catch some breezes and keep the bugs away. Also, the open nature of the road, with almost no trees or ground cover, means that birds hunt for small game nearby. And dust from the Haul Road blows over nearby snow, which causes that snow to melt first in the spring. The availability of open water near the Haul Road tends to attract waterfowl, so the Haul Road has created something of a bird breeding corridor.

One interesting way of viewing the condition of wildlife in Alaska is to compare what is happening near the industrial development of the North Slope with an absolutely protected and essentially pristine area such as Denali National Park. Denali covers about 6.2 million acres, which makes the place larger than, for example, the Commonwealth of Massachusetts. (Of those 6.2 million acres, about 1 million acres are covered with glaciers or permanent snow pack.) Yet Denali has all of 15 miles of paved road and about 40 miles of gravel road, of which half are off limits to all but official traffic. So imagine what it would be like to try to “see” Massachusetts if the place had only about 35 miles of paved and gravel roads for ingress.

Yet for all of its vastness and isolation, according to one park guide, Denali is home to fewer than 40 wolves. This is simply a function of the large territory that a wolf requires for its feeding and breeding ground, and the harsh climate for most of the year. There are far more wolves in the zoos of Massachusetts than there are in Denali, which is a larger and utterly undeveloped area. This says something about the general state of nature in Alaska, and the fragility of the Arctic environment, as well.

I also mentioned in an article how clean the Haul Road was, and I am still astonished at that fact. It got to where we were all looking for litter, and just not finding it. OK, there might be a piece of plastic, or an aluminum can somewhere along the 420-mile stretch, but I sure did not see it. Today, the Haul Road is an industrial service road for access to the Pipeline, and for goods going to and from the oil fields of Prudhoe Bay. But why is it so clean? And I mean country club clean, dear readers. Actually, there was more litter at Oakmont during the U.S. Open than there was on the Haul Road in Alaska.

On reflection, the Haul Road is used by just a few hundred truck drivers at most, and everybody seems to know everybody else. There is something of an honor code among the drivers to keep the stretch clean. The Haul Road is, to be specific, a public highway, but you really have to have a good reason to trek up north. It is just not a road for a Sunday drive, by any means. According to one knowledgeable individual, no more than 4,000 tourists per year visit Deadhorse, and about half of those are with one particular cruise-ship line that arranges overnight tours to the area. The other 2,000 or so tend to be scientific or “adventure” explorers, such as our group of 22 geologists.

Really, most people do not have the slightest clue about how far away, how vast, how isolated, how harsh, how just plain alone is the territory of the Brooks Range and North Slope. It is an area far larger than the size of California, with a total population less than that of a typical American shopping mall on a busy Saturday afternoon.

In terms of numbers, the North Slope of Alaska is home to about 10,000 or so industrial workers who commute up there for a few weeks at a time. They live in temporary housing constructed on gravel pads. The oil wells and pipelines all sit on gravel pads. And it is all connected to the south by the Haul Road. The place appears to be very clean, and the end result is currently 775,000 barrels of oil per day to keep the U.S. economy running. Looked at in this light, I think that we have quite a remarkable trade-off going here. People are, of course, free to differ in that assessment.

Do you differ with Bryon's assessment? Do you agree? Please share your insights here!

Byron King currently serves as an attorney in Pittsburgh, Pennsylvania. He received his Juris Doctor from the University of Pittsburgh School of Law in 1981 and is a cum laude graduate of Harvard University. Byron is also co-editor of Outstanding Investments.

Monday, July 2, 2007

From Big Oil to King Corn: What Are We Solving?

No, we do not mean to beat up on ethanol exclusively. We aim to point out any energy solution that doesn’t work, that is not responsible—and those that do, that are responsible! It is just that there is so much good stuff out there against ethanol.

As was mentioned in the previous posting, one has to question the motives. It is bad for the environment and bad for the economy. Why aren’t the environmentalists squawking? The economically focused groups are. Here’s a piece that recently landed in CARE’s “in-box” from the National Taxpayers Union. We believe you will find it as interesting as we did. The evidence abounds. Will you help spread the word? America needs energy, but we need responsible energy!

It pays to be friendly with the majority party in Congress. The proof is in the new energy bill that recently passed the House during the Democrats' "100-hour" agenda. The CLEAN Energy Act of 2007, a contrived political acronym for "Creating Long-Term Energy Alternatives for the Nation," has been portrayed as ending preferences for so-called "Big Oil" - a familiar victim on the left-wing's whipping post. In truth, what the bill does is raise taxes to subsidize a lesser-known but growing conglomerate: "Big Corn"

The first main component of the bill raises taxes and fees paid to the federal government by oil and gas companies. It does so by eliminating tax deductions instituted by Congress to spur domestic exploration activities and by raising royalties paid for oil exploration in offshore areas under federal control. The net effect of these policies is, of course, a $14 billion tax increase on oil companies.

If Democrats want a reduction in our dependence on foreign oil, tax increases are not the way to go. History tells us that vengeful tax hikes on the oil industry serve no economic purpose. In 1980, Congress instituted a windfall profits tax to punish the energy industry. The result, according to a Congressional Research Service study, was a drop in domestic oil production of 3 to 6 percent and an increase in oil imports of 8 to 16 percent. According to the Tax Foundation, the average effective tax rate on major oil and gas companies is roughly 38.3 percent, as opposed to a rate of 32.3 percent for the market as a whole. This is hardly the profile of an industry failing to pay its "fair share."

A second provision establishes the "Strategic Energy Efficiency and Renewables Reserve." What that means in English is that the $14 billion in additional taxes on the oil industry will be dumped into a slush fund from which Congress can subsidize what are defined as "clean domestic renewable energy resources." This fund would exist above and beyond the normal budget, which already includes significant spending on politicians' favorites like ethanol and "clean coal" technology.

Democrats would have you believe that they are breaking the link between special interests and energy policy. If Pelosi, Reid, and company really wanted to do so, they'd hold their legislation up to a mirror and acknowledge that it looks no better than the energy bill that the GOP ushered to passage in 2005.

Furthermore, the federal government has a dismal record of subsidizing successful alternative-energy programs. Simply stated, members of Congress are all thumbs in trying to point out emerging technologies, because they distribute funding based on political concerns rather than sound science.

The Carter years brought us the $2 billion boondoggle called the "Synfuels" program, which sought (and failed miserably) to produce alternatives to petroleum. The Clinton administration hatched the $1.1 billion Partnership for a New Generation of Vehicles whose main focus, diesel technology, has since fallen out of favor as an inherently dirtier fuel. The technology that we use today to improve mileage and lower emissions (hybrid drive trains, cylinder shutdown, etc.) is more often the result of private companies in search of profits, not government agencies in search of PR plaudits.

A recent federal favorite is corn-based ethanol, which is subsidized by taxpayers at roughly $2 billion per year (not counting tariffs and government-usage mandates that prop up an artificial market for the commodity). Despite acknowledgement that ethanol from this source won't fuel energy independence, it enjoys heavy government support because of powerful Midwestern members of Congress who do the bidding of farmers in their districts.

The Democrats have passed a bill that may lead to greater dependence on foreign oil and higher costs at the pump. A sound energy policy means keeping taxes low, eliminating government meddling, and allowing the market to determine which technologies merit significant investment. President Bush and members of Congress ought to know that bureaucracies and energy policy mix like ... well, oil and water.

Andrew Moylan is Government Affairs Manager for the 350,000-member National Taxpayers Union, a non-partisan citizen group founded in 1969 to work for lower taxes and smaller government.

Does China Know Something America Does Not?

As Americans, we have an expectation that we have all the right answers and we have them first. After all, we are the “superpower.” While much innovative research is being done here on the energy front, it seems that China--who followed our lead--has seen the light on ethanol while our government remains in the dark, putting its figurative “head in the sand.”

In an effort be sure we are accurate in our reporting, an extensive Internet search was done for the original source for the following story’s feedstock. After spending more than an hour online, one has to conclude that the mainline media has virtually overlooked this Associated Press feature (June 11). Was this an oversight—or was it conveniently missed because it does not fit within the politically correct viewpoint being clung to despite more and more being released to the contrary? At CARE we are looking for energy solutions—responsible energy. Here is just one more piece of evidence that ethanol is just another energy elixir. Like the corked brown bottle of the old west, ethanol may make us feel better, it may make us feel like we are doing “something,” but it will do little to solve the real problem. It is just more snakeoil.

Here, read what one of CARE’s Energy Counsel Members, Dennis Avery, has to say about ethanol’s viability and its impact on the environment. You are encouraged to think about his question toward the end about the environmental movement’s motives. Stay tuned you’ll hear more about that here soon!

China announced its ban on further expansion of its corn ethanol industry, after a radical 43-percent increase in pork prices over the past year. Xu Dingming of the Chinese National Energy Leading Group told a recent seminar that “Food-based ethanol fuel will not be the direction for China.” The Chinese turnabout comes as President Bush is cheerleading a massive corn ethanol expansion, supposedly to help the U.S. achieve “energy independence.”

Unfortunately, U.S. corn land produces only 50 gallons worth of gasoline per acre per year—against an annual gasoline demand of 135 billion gallons. New U.S. ethanol plants coming on line could take 30 percent of next year’s U.S. corn for auto fuel—an unprecedented diversion of the world’s scarce cropland. Supplying the Bush goal of 35 billion gallons of ethanol per year would currently force farmers to clear more than 200 million acres of Midwest forest to supply even 10 percent of our gasoline demand from corn ethanol.

Even without ethanol demand, farmers would need to triple existing crop yields over the next 40 years just to keep up with food supply demands. Population growth is likely to produce a peak human population of 8–9 billion. Economic growth will raise the number of affluent consumers from today’s 1.5 billion to 7 billion—accompanied by soaring demand for meat, milk, eggs and pet food.

World corn prices are already nearly double last year’s level, and wheat prices are up 10 percent. Mexican consumers are in the streets protesting a 60 percent tortilla price increase. Midwest economist Tom Elam says current oil prices will support corn at $4.50 per bushel. A serious drought or crop disease could drive corn to $6 per bushel.

Why did the environmental movement, which is pledged to defend the wildlands, silently approve Bush’s corn ethanol diversion and risk a massive forest loss? I would guess it’s because the world is currently building or planning more than 40 new nuclear power plants. The Greens didn’t wage their 30-year campaign against fossil fuels just to produce a shift to nuclear-powered air conditioners; they want dramatic reductions in humanity’s use of technology.

The Kyoto Protocol demands we eliminate at least 80 percent of the world’s current energy sources. Solar and windmills have proven woefully inadequate to supply our base energy needs. There is currently no cost-effective way to produce ethanol from cellulose sources such as wood chips or switchgrass.

Brazilian sugarcane is three times more efficient at converting sunlight to transport fuel, mainly because corn-growing takes more diesel fuel, more fossil-fueled fertilizer, and lots of natural gas to heat the conversion process. But even ethanol from sugarcane is more expensive than gasoline with oil at $65 barrel.

The deeper reality is that fossil fuels probably aren’t to blame for our global warming. Roman histories and modern studies of ice cores, seabed sediments and fossil pollen all agree that the world has a moderate, natural 1,500-year climate cycle. That cycle explains most, or all, of the planet’s warming since 1850. There is no evidence that human-emitted CO2 has significantly increased global temperatures. We will probably have a moderate warming for the next several hundred years whether we burn fossil fuels or not. Then we will have centuries of colder weather.

Let’s keep our trees. Let’s forget the Kyoto Protocol. Instead, let’s get rid of the trade barriers that prevent American farmers from selling their corn and meat to the increasingly affluent consumers in densely populated Asian countries. Then both our farmers and our urban consumers can move sustainably forward into the 21st century.

DENNIS T. AVERY Center for Global Food Issues