CARE: Comments About Responsible Energy

2012-01-30T20:10:00.002-07:00

Will Environmentalists agree to the production of ethanol from seaweed?

Or will they continue to insist that corn should be used, thereby continuing to drive up the cost of food?

They will LIkely come up with some reason why seaweed just will not be acceptable. They have to have some reason, don't they?

January 29, 2012

From Environmental Views

Will Seaweed be the Biofuel Solution?

by: dennis t. avery

Churchville, VA—Researchers may have broken the biofuel barrier. A new biotech discovery enables ethanol to be made from a common variety of brown seaweed. This would by-pass the biggest problem with corn ethanol and biodiesel—the world’s shortage of cropland. The new ethanol process uses the familiar E coli bacterium working on kombu, a variety of edible brown kelp, which is common in the world’s seas and oceans. It has been grown and harvested commercially by such countries as China, Japan, and Korea for hundreds of years. If you like sushi, it is the brown wrapping on your favorites.

The new process can turn a mixture of kombu and water, with the E. coli added, into a solution of about 5 percent ethanol in two days. Distill the ethanol from the water; put the water back into the ocean and “Voila”! Better yet, this happens at low temperatures, between 25 and 30 degrees C. Thus the ethanol can be produced without the use of additional costly energy—a big advantage over the current efforts to produce cost-effective ethanol from algae.

An analysis by the Pacific Northwest National Laboratory suggests that the U.S. could supply one percent of its annual gasoline needs by growing the brown seaweed for harvest on less than one percent of its territorial waters.

The world already grows and harvests more 15 million metric tons of kombu and other seaweeds for direct human consumption. There seems no reason why large additional amounts of the seaweed could not be harvested for ethanol without driving up the costs of other foods. Corn ethanol competes directly for land with food and feed, thereby increasing food costs to consumers, especially for meat, milk, and eggs.

The seaweed catch? The new ethanol depends on genetically engineered bacteria. The process has been developed by BioArchitecture Lab., Inc. (BAL) and the University of Washington in Seattle. They modified the common E. coli bacterium to turn the sugars in edible kelp into ethanol. The research has just been reported in the January 20 issue of the journal Science. “The form of sugar inside the seaweed is very exotic,” says Yashuo Yoshikuni, one of the developers. “There is no industrial microbe to break down the alginate [in the seaweed] and convert it into fuels and chemical compounds.”

How badly does the environmental movement want to get rid of fossil fuels? Enough to accept the biotech ethanol solution? At this moment, the world’s acceptance of other renewable fuels is plummeting, due to their high costs compared to coal and natural gas. Meanwhile, the new horizontal drilling and fracking processes have suddenly made long-known and abundant shale petroleum reserves far more cost-effective. The claims that fracking will pollute drinking water are not holding up, since the petroleum drilling is thousands of feet further down in the soil profile than the water-well drilling.

The eco-movement has long demanded “natural” food production. Biotech food production has been successfully banned in many third-world countries because of the pressure from first-world activists. But would that apply to kelp ethanol vats? The kelp for biofuel can be grown in Puget Sound, but kelp farms have been rejected by landowners and fisherman.

On the other hand, if kombu ethanol can be produced so readily, other nations have at least as much seawater in their surroundings as the “rich” in North America and Europe. Meaning all countries having access to seawater could make energy and support their own populations while expanding their economies into the 21^st Century.

Remember, of course, none of this will much reduce our dependency on oil. One percent of our territorial waters for one percent of our fuel means it will only be useful in fulfilling the congressional mandate and perhaps rescue us from corn ethanol.

Dennis T. Avery, a senior fellow for the Hudson Institute in Washington, D.C., is an environmental economist. He was formerly a senior analyst for the Department of State. He is co-author, with S. Fred Singer of Unstoppable Global Warming Every 1500 Years. Readers may write to him at PO Box 202 Churchville, VA 2442; email to cgfi@hughes.net or visit us at www.cgfi.org

2012-01-22T10:17:00.002-07:00

Two Professors at Cornell University See Shale Gas from Vastly Different Viewpoints!

Read on and Decide Which One You Believe!

SHALE GAS: BOON FOR HUMANITY OR BANE?

BY DENNIS T. AVERY

The carbon footprint of shale gas is about one-third as high as if coal was burned to produce electricity, says a team of researchers who were obviously offended by the rush-to-block-any-new-fuel “study” of Cornell University’s Robert Howarth. Howarth’s recent widely circulated, paper in Climatic Change claims shale gas is perhaps twice as bad for the environment as burning coal.

Dr. Lawrence Cathless III, also of Cornell, sees shale gas as a bonanza for the whole world. He and his team reject the Howarth contention that huge amounts of shale gas will leak during well completion and gas delivery.

“For a high volume shale gas well, the leakage rates [Howarth and his co-authors] assert are routine would indicate about a million dollars of methane is routinely vented to the atmosphere from each high volume well,” Cathless says. This is an economic loss no business would tolerate, and a safety risk no company—or its rig workers—would endure.

The methane escapes Howarth et al. expect over a 10-day pre-production period “would fill a square mile with an explosive mixture of 5 percent methane—to a height of 176 feet from a single well,” says Cathless’ Cornell-vs.-Cornell riposte. Nor has the Howarth team documented any instances of such substantial methane releases.

It’s a familiar pattern by now, of course. The true believers in man-made warming cannot allow any cost-effective new energy source to shove aside the ultra-costly renewables, even if no renewable really works well. Teams of believing academics obviously stand ready to perjure their professional reputations to give the New York Times a disparaging quote in opposition to whatever new energy comes along. This media strategy relieves them of having to assess whether or not there is truth in the statement. Meanwhile:

· CBS says 11 more solar energy firms are poised to go bankrupt like Solyndra, taking with them another $6.5 billion in public money from the Department of Energy.

· A cellulosic ethanol firm, Range Fuels, backed by more than $150 million in public funds, has just declared bankruptcy after failing to produce a single gallon of cellulosic ethanol (from non-food biomass).

· All over the country, power companies are being forced to raise their rates to cover the mandated costs of wind turbines that erratically produce a tiny fraction of their rated electrical capacity—and we are being forced to pay the bill.

· President Obama, after trying to evade a decision on the Keystone oil pipeline from Canada until after the 2012 election, was forced to decide by Congressional mandate and came down against the thousands of new jobs it would create and the cost-effective oil it would have delivered.

None of the green failures are as dangerous to the Green Agenda, however, as those massive shale gas deposits being found around the world. That’s why the opponents claim fracking will pollute our drinking water, even though our wells are a few hundred feed deep and the fracking is down a mile or two. And, that is why the Howarth “study” is garnering so much publicity from the media.

Tell it to the folks from Pennsylvania and Poland who are drilling energetically while creating both jobs and human comfort. They seem to not much care what the greens think. Perhaps the rest of us should follow their example.

Sources:

1. R. W. Howarth et al., “The greenhouse gas footprint4 of natural gas in shale formations,” 2011, Climate Change, doi.10.1007/s10584-011-00761-5.
2. L. Cathless III et al. “A commentary on ‘The Greenhouse-gas footprint of natural gas in shale formations.’" http://cce.cornell.edu/EnergyClimateChange/NaturalGasDev/Documents/PDFs?FWL%20short%20verson%2010-4-11.pdf (requires log in)

2011-12-22T15:36:00.003-07:00

What other Rules to "benefit" the public will be announced while people are enjoying the season and not looking?

EPA Tries To Pull a Fast One
By Diana Furchtgott-Roth

RealClearMarkets.com
December 22, 2011.

You're a savvy political appointee, and you're bringing out the Mercury and Air Toxic Standards for Power Plants rule that will raise electricity rates all over the country, particularly in battleground states of Illinois, Ohio, Indiana, Florida, and Michigan. What can you do to get the public to swallow the costs?

Timing is everything, and you choose the Wednesday before Christmas, when most people aren't paying attention.

And then you schedule the announcement at a place designed to tug at the heartstrings, say the National Children's Hospital in Washington D.C. You ask the hospital's CEO and the national volunteer chair of the American Lung Association to make remarks.

You say that this costly initiative is for the children, and that millions of children will be protected. You talk about how 15 years ago your son spent his first Christmas in hospital, suffering from asthma.

Of course, you say nothing about the costs. Your state-by-state interactive map shows benefits for each state, but no costs. (These are buried in the 510-page Regulatory Impact Analysis for the Final Mercury and Air Toxics Standards report.) And you throw in some job creation for good measure, 46,000 new construction jobs and 8,000 utility jobs.

Environmental Protection Agency Administrator Lisa Jackson is one smart politician, and that's what she did yesterday.

It's too bad that the Regulatory Accountability Act of 2011, the brainchild of Ohio Republican Senator Rob Portman, has not been made law. His bill would require a detailed analysis of the costs and the benefits, which would have saved Americans, including residents of his state, billions of dollars.

The Mercury and Air Toxic Standards for Power Plants rule would make electricity generation far more complex and expensive, especially in the eastern half of the United States. It would require the closure of many coal and oil fired power plants, and placement of emissions control equipment on others. Forty-five percent of American electricity is produced by coal.

EPA would restrict power plants' and boilers' emissions of "heavy metals," including mercury, arsenic, chromium, and nickel, and acid gases, such as hydrogen chloride and hydrogen fluoride.

Most people's eyes glaze over when they hear about EPA's new Utility Maximum Achievable Control Technology rule. But when they hear that it would raise their electricity bills, they start to pay attention.

Maximum Achievable Control Technology means that plants and boilers have to use the most stringent methods possible to get the heavy metals out of the air, even if these methods cost billions and the benefits are worth far less-as is the case with the new utility rule. That's why many plants will have to close.

Susan Dudley, director of the Regulatory Studies Center at George Washington University, has actually read all of the 510 page regulatory impact statement. She wrote in the National Journal on Monday, "If the enormous public benefits EPA predicts from these mercury standards were real, they would justify the cost to Americans of almost $11 billion per year. Unfortunately, they are not."

Dudley explains that EPA derives its benefits by assigning high values to reducing emissions of fine particles (not air toxics or acid gases) that will occur as a side-effect of the required controls on mercury. But EPA already regulates these particles through other rules. Through sleight of hand, EPA calculates almost all of the benefits for this rule from particle reductions that fall well below the levels it has already established as safe in other proceedings.

Mercury and arsenic are well-known to the public as toxic, and in certain doses can be lethal. But the new EPA rules would push emissions caps unnecessarily low, driving up generating costs and the price of power to industry and households, and forcing some boilers and plants to shut down.

EPA estimates its new rules would cost households and businesses $10 billion a year in 2016. Industry groups have estimated the costs at $40 billion to $120 billion for full compliance, with many older coal and oil-fired plants forced to close. Illinois, Ohio, Indiana, Missouri, and Michigan are the hardest-hit, because they are home to the oldest plants with the fewest emissions controls.

These additional costs would come on top of those to be imposed, starting around 2015, by EPA's other planned standards for carbon, water, coal ash, and particulates.

The benefits, calculated at $33 billion to $81 billion each year, starting from 2016, supposedly come from improvements in Americans' health, mostly from decreases in asthma. But these projected benefits are "guesstimates," gains that are hard to specify given that other factors, such as obesity and lack of exercise, are in play.

These vast projected savings from asthma make no sense. America's air has been gradually getting cleaner since 1980, as EPA's own data show, but the number of children with asthma has risen. According to the Centers for Disease Control, 3.6 percent of children had asthma in 1980, and almost twice the percentage, 7.5 percent, in 1995.

In 2009, using a slightly different measure, 10 percent of children had asthma. CDC acknowledges that "the causes of asthma remain unclear and the current research paints a complex picture." Yet on Wednesday EPA forecast 130,000 fewer asthma cases from its new rule, mostly from fewer particulates.

Mr. Portman no doubt knows what the new EPA regulations will do to Ohio, and his Regulatory Accountability Act of 2011, cosponsored with Senator Mark Pryor, an Arkansas Democrat, seeks to check agencies such as EPA. The House companion bill, introduced by House Judiciary Committee Chairman Lamar Smith of Texas and Democratic Representative Collin Peterson of Minnesota, passed with a 253-167 vote on December 2, 2011.

The bill would provide greater transparency and cost-benefit scrutiny to the most expensive rules, and would require the least burdensome option, rather than the most expensive. In addition, it would require a more rigorous process for costly rules, including formal hearings, at which substantive evidence would have to be provided.

The bill requires cost-benefit analysis to be undertaken at each step in the rulemaking process (proposed rule, final rule, and judicial review), and requires high quality data to be used in the analysis.

Following the analysis, agencies are required to select the "least costly rule considered during the rule making...that meets relevant statutory objectives" unless ‘‘the additional benefits of the more costly rule justify its additional costs." The bill establishes a more rigorous standard of judicial review regarding costly rules (those with an estimated impact of $1 billion or more), such as the mercury rule.

There are five more government business days before the end of the year. Who knows what other rules will emerge before 2012?

Diana Furchtgott-Roth is a senior fellow at the Manhattan Institute.

What do YOU think will help bring jobs to America?

2011-12-17T16:11:00.002-07:00

Read CARE favorite Paul Driessen's take on the issue and weep—or act!

American energy can jump-start US recovery

Tapping abundant US energy deposits would create jobs and restore prosperity

Paul Driessen

Our nation’s economic growth may finish an anemic 2% on the year. Faced with looming taxes and regulations, few companies are expanding, hiring or buying equipment. More than 14 million Americans are unemployed, excluding the nearly 9 million who have been forced to take part-time jobs, or the 2.5 million who’ve given up on finding work.

Meanwhile, 140,000 have been added to government payrolls, and the nation is spending $4 billion a day more than it’s taking in.

That is unacceptable, demoralizing – and unnecessary.

The White House and Democrats are clueless about reinvigorating the economy. But they have proven they know how to kill jobs, prosperity and hope. Their energy policies are especially destructive.

As President Obama made clear, under his tutelage electricity costs would “necessarily skyrocket,” gasoline prices would soar, “green” energy would become the law of the land, and he would “fundamentally transform” America. He is keeping his promise.

America’s vast storehouses of untapped oil, gas, coal and uranium could generate millions of jobs and hundreds of billions in revenues. Electricity generation industries and the factories and other businesses that depend on reliable, affordable energy could do likewise, if they were unshackled from excessive regulations that often actually harm health and environmental quality.

Instead, the Environmental Protection Agency, Departments of Energy and the Interior, and other government bureaucracies continue to impose a near-total shutdown of onshore and offshore oil and gas leasing. They drag their feet or simply reject drilling permits, display antipathy toward hydraulic fracturing to tap our 100-year supply of shale gas, and impose truckloads of punitive air and water rules designed to shutter dozens of coal-burning power plants.

The President claims he will “pare back regulation” by several billion dollars – out of an estimated $1 trillion in total annual regulatory compliance costs. EPA alone promised “$126 million” in supposed paperwork reductions, while imposing several hundred billion dollars in new EPA regulations.

Mr. Obama finally suspended EPA’s proposed ozone rules, which many had warned would be the most expensive environmental edicts in history. But they will be back with a vengeance after the 2012 elections. Meanwhile, bowing to EPA and environmentalist pressure, he postponed action on the Keystone XL pipeline, which would have created 20,000 almost-shovel-ready construction jobs.

Now EPA wants 230,000 new bureaucrats, just to process future carbon dioxide emission permits, based on bogus climate chaos models and scenarios. Even our worst nightmares cannot fathom the job-killing compliance costs this would impose on the 6,000,000 businesses these regulations would affect.

Again using questionable-to-fraudulent assertions about catastrophic manmade climate change to justify its actions, EPA is also demanding 54.5 mpg fuel economy standards – which will result in thousands of deaths and millions of injuries, as cars are further downsized and plasticized.

Even businesses on the leading edge of the “green revolution,” crony capitalism and lobbying for dollars are faring poorly. After lapping up $1.5 billion in government red-ink subsidies and loan guarantees, three US solar companies filed for bankruptcy and fired over 2,000 workers. And still the Energy Department shoveled more billions of tax dollars into more wind and solar projects, despite voter objections.

DOE also sponsored programs that cost $20 million to create 14 jobs and weatherize four Seattle houses in a year. It spent $80 billion to create 225,000 “clean energy” jobs – at $356,000 apiece. It shells out $6 billion a year to grow corn on an area bigger than Indiana, and convert it into ethanol that gets a third less mileage per gallon than gasoline.

This isn’t “green” energy. It’s “greenbacks” energy. It requires perpetual infusions of taxpayer money, confiscated from hard-working, productive sectors, and given to companies that have better political connections. That is unconscionable and unsustainable.

America must promote and permit projects that actually generate energy, jobs and revenues. It must reward and encourage companies that provide affordable 24/7 energy to power virtually everything we make, grow, transport and do.

Unleashing America’s vast supplies of shale oil and gas, conventional petroleum, coal and nuclear energy isn’t a magic potion. But it is a vital part of the solution to what ails our nation.

The petroleum industry alone currently supports some 9.2 million jobs, but could do much more. Recent studies by Wood McKenzie, ICF International and other analysts conclude that opening currently off-limits onshore and offshore areas could generate an additional $800 billion in government revenues and another 1.4 million jobs, by 2030. That includes primary jobs for roughnecks on rigs; secondary jobs in steel making, construction, pipelines, refineries, transportation and other sectors; and indirect jobs in hotel, restaurant, retail and other sectors that benefit from the increased energy, payrolls and economic activity.

We could do likewise with coal, nuclear and hydroelectric projects.

We need American energy for American jobs – tapping resource bounties to help balance the budget, drive down unemployment and get the country going again.

We can and must protect human health and environmental quality – from real threats, not exaggerated, speculative or computer-generated threats. We can and must do so without raising energy and business costs even higher, killing more jobs, and stifling private sector and government revenue opportunities.

Over-regulation brings energy poverty and blackouts, destroys jobs, impairs families’ living standards and nutrition, leads to foreclosures and homelessness, increases stress and alcohol abuse, makes it harder for families to afford proper heating and air conditioning, and harms people’s health and welfare.

Those impacts must be fully considered, along with putative benefits of current and future regulations. If laws and rules don’t pass muster, they need to be rewritten, rejected or repealed.

Subsidies do not create jobs. Getting overzealous government out of the way, ending government deficit spending, letting business work within a sensible regulatory system, ensuring that companies have the affordable energy they need – that creates permanent, sustainable jobs and brings renewed prosperity. That generates revenue streams that curb the need to raise taxes on productive companies and workers.

As election year 2012 dawns, voters must demand that presidential and congressional candidates explain how they will reform our legal and regulatory system, to tap US energy bounties, while protecting environmental values from actual risks, and ignoring exaggerated, imagined and invented dangers.

Unaccountable politicians, bureaucrats and environmental ideologues have strangled our economy long enough. We the People must now lay the foundation for producing more domestic energy, creating jobs, and ensuring that our children can look forward to a brighter future.

American energy can ignite America’s renewal, and restore American jobs, opportunity and prosperity. Voters need to send Congress, the White House and EPA a message:

We need American resources for an American recovery. Slash the crippling regulations. Drill here in America. Produce affordable energy to create jobs and fix our economy. Do it now!

__________

Paul Driessen is senior policy advisor for the Committee For A Constructive Tomorrow and author of Eco-Imperialism: Green power - Black death.

2011-11-25T15:47:00.001-07:00

Surely you don't believe renewable energy is economical?

If you ever thought it might be, the following article will poke HUGE holes in your thinking.

Green Energy Myths

By James Crawford

Now that Solyndra has become a household word and with all the rhetoric about getting rid of thermal electric generation and using “clean,” “green,” renewable energy instead, we need to take a good look at renewable energy systems. They are springing up and failing all over the place. They are being put on parking garages, rooftops, and filling open spaces in our desert. Green energy systems are being built not because they are profitable, efficient, or make any economic sense. They are being built only because of government subsidies and mandates. The electric company ratepayers and the tax payers are footing the bill.

Solar:

Let’s first take a look at solar. Public Service Company of NM (PNM) is in the process of installing 5 major solar arrays around the state including one in Los Lunas. We will use them as a model.

Before we go any further, we need to understand the concept of “capacity factors.” All electric power generation has a capacity factor that is less than 100% since nothing works 100% of the time or with 100% efficiency. Since it is dark half the time we know solar can never exceed 50% capacity. So because of cloudy days and other losses solar only has a capacity factor of about 20% on average.

Capacity factor is never disclosed in media coverage of green energy installations. Nominal installed capacity is the only thing described. Readers and listeners are led to believe much more generating capacity is being created along with exaggerated claims of homes served.

The PNM arrays each occupy 50 acres and have a rated capacity of 5 megawatts if they produced at full capacity 100% of the time. So in fact a 5-megawatt array is only going to actually produce about 1 megawatt (5x.20) of power for consumption by consumers. One megawatt produces about 8766 (number of hours in a year) megawatt hours or 8,766,000 kilowatt hours of electricity per year. We look at kilowatt hours because that is how consumer use is measured.

PNM estimates that the average household uses about 7200 kilowatt hours per year. Each of the 5 PNM arrays can supply the power needs for about 1200 (8,766,000/7200) “average” homes. Average consumption in Texas is over 14,000 kilowatt hours so one array would only cover about 635 Texan homes. Many utilities estimate the average household use at 10,000 kilowatt hours. But what the heck, we will use PNM’s 7200 just to give green energy the best break we can.

PNM is required to buy excess daytime solar power from people with private solar arrays. This is called distributed generation. So with their own arrays and the private arrays, PNM claims to have 45 megawatts of solar capacity. So accounting for the 20% capacity factor, 45 megawatts translates to 9 megawatts of actual usable production. That is 78,894,000 kilowatt hours. That will provide for 10,096 “average” homes.

The big push to convert to renewable energy is because of the perceived evil of thermal generating plants like coal-fired plants. Again we will use PNM as a model and look at the San Juan Generating Station. Environmental activists would like to see the San Juan plant closed down, so let’s look at what it would take to replace it with solar panels.

San Juan has a nominal capacity of about 1743 mega watts. Coal thermal plants have a capacity factor of about 85% to 95% but we will use 85%. Therefore, San Juan is cranking out 1482 megawatts or about 13 million megawatt hours of usable power per year. Now it starts to sound like we are talking about the national debt since 13 million megawatt hours is 13 billion kilowatt hours! That is enough for 1.8 million “average” homes! It would take 1482 of PNM’s 5 megawatt 50 acre arrays to serve that number of homes and would cover about 74,100 acres!

Protection of Mesa Verde National Park is one of the big reasons environmentalists want San Juan closed. Mesa Verde is only 52,000 acres. So to do away with San Juan, all of Mesa Verde and half again more would have to be covered with solar panels! The combined size of the Sandia Mountain and Manzano Mountain Wilderness areas is also only a bit more than the 74,000 acres. Wouldn’t that be a pretty view from the valley to have them covered with solar panels?

A couple of other solar arrays have also been in the news recently. One is the Santa Teresa array, which is also in New Mexico, but owned by El Paso Electric; the other is advertised as the biggest array of its kind, the Agua Caliente facility in Arizona.

The Santa Teresa array has a gross capacity of 20 megawatts, which converts to 4 megawatts using our 20% capacity factor. That would power 4870 of our NM “average homes”. El Paso, however, claims it would power 6600 homes. To achieve that, the capacity factor would have to swell to an unlikely 27%. Since their power is going to Texas homes, they can only power 2500 Texas homes!

The Aqua Caliente project is an excellent example of the misrepresentations about solar arrays. The gross capacity is 290 megawatts or as we have seen 58 megawatts of actual usable electricity. 58 megawatts will power 70,615 of our NM “average homes.” The developers claim that they will power 225,000 homes. To do that, the array would need a capacity factor of 63.7%! In other words it is rarely dark or cloudy in AZ. Capacity factors between 10% and 30% could be argued one way or the other but 64% is out of the question!

Earlier brief mention was made of PNM buying the excess daytime solar power produced by private solar arrays on people’s houses, parking facilities, etc. i.e. distributed generation. So how does that work out for us?

This has to be one of the most ludicrous programs ever devised. PNM sells their residential power for around $.07 per kilowatt hour. They buy the surplus solar power from private individuals for around $.15 per kilowatt hour to sell back to you for $.07. Who do you think makes up the $.08 per kilowatt hour bonus going to someone with a solar panel? It is us, the rest of the sucker ratepayers of course! On top of that the private solar panel owner gets both state and federal subsidies and in some cases outright grants to cover the cost of installation. The average ratepayer not only pays more in electric bills but also kicks in taxes at the state and federal levels.

A couple of Los Lunas and Belen restaurants recently proudly announced they are installing solar arrays that will eliminate their electric bills altogether. To do that they have received outright grants from the federal government along with the federal tax credits covering over half the cost. The rest is covered by state tax credits and PNM paying double for the surplus daytime electricity. In other words all the PNM ratepayers and U.S. and NM tax payers are footing the electric bills for these businesses.

No announcement has been made that these restaurants will close after dark. How will people be able to read the menu in the dark? Of course the lights are going to stay on, but the businesses will be buying back electricity at less than half the price they just sold it for earlier in the day. Menu prices already cover utility expenses. Do you suppose there will be an immediate reduction in menu prices or that we will get a discount on the menu prices if we bring in our tax returns and electric bills? It is not likely. The largess will go into the owners’ pockets.

Another local example, is the plan for the City of Belen to install a solar facility to serve the sewer treatment plant. The nominal capacity is 0.5 megawatts, which converts to 0.1 megawatts of actual usable electricity. The installation will then generate 876,600 kilowatt hours per year. That is enough for about 122 of our “average” homes. Since the kilowatt hours of use by the treatment plant was not published we do not know if that is enough to run the plant like the proponents claim. However, the media reported a South Korean Company will build the facility for $6 million, take all the subsidies, tax credits, and the PNM inflated payments for excess electricity and then sell the facility to the city in seven years for $2.7 million. Based on data from the U.S. Energy Information Administration, a plant like this should cost about $2.3 million to start with. So after reaping all the government subsidies the company sells a used facility to the city for more than it should cost originally!

These situations are small local examples of corporate cronyism and public private partnerships where government is deeply involved in or in bed with private enterprise and picks the winners and losers based on politics rather than economic freedom. It creates an unfair advantage over the competition and squanders taxpayer money. All competitors would probably like the taxpayers and rate payers to take care of their electric bills.

Wind:

Let’s take a look at wind power. New Mexico is home to three existing major wind farms. We will take a close look at the New Mexico Wind Energy Center, which supplies wind power to PNM.

New Mexico Wind Energy Center has 136 wind turbines on 9,600 acres in central NM and has a nominal capacity of 204 megawatts.

Once again we need to consider capacity factor to find out how much usable electricity is being generated. We don’t have to worry about nighttime since the wind often blows at night. However, it doesn’t always blow and often does not blow at optimum speeds. Anything less than 8 miles per hour is too slow and over 55 miles per hour is too fast. Optimum is somewhere in the middle. Because of wind variability and turbines being down because of mechanical problems, capacity factor is about 25% on average.

The 204-megawatt installation can yield about 50 megawatts of usable power. That figure converts to 438,300 megawatt hours or 438,300,000 kilowatt hours. Using our PNM average home consuming 7200 kilowatt hours that will serve 60,875 homes.

So how much wind power will it take to substitute for that evil San Juan Generating Station? San Juan has a capacity of 1743 megawatts. We will use our 85% capacity factor. Therefore, San Juan is cranking out 1482 megawatts or about 13 million megawatt hours per year. Now it starts to sound like we are talking about the national debt since 13 million megawatt hours is 13 billion kilowatt hours! That is enough for 1.8 million “average” homes!

Based on the NM Wind Energy Center data, it takes 192 acres of windmills to generate one usable megawatt of electricity. So it will require 284,544 acres to generate the electricity produced by San Juan. The NM Energy Wind Center uses about 47 acres per nominal megawatt. However, the industry average is about 86 acres per nominal megawatt. If we use the industry average figure, it would take 344 acres per usable megawatt and would then require 509,808 acres of wind farm to replace San Juan! Based on US Census data, Valencia County contains 1068 square miles or about 683,520 acres. It would require covering 75% of Valencia County’s land area with windmills to replace San Juan!

It would then take 30 New Mexico Energy Center wind farms to produce the same 1482 megawatts of power produced by San Juan.

Other installations around the country are even worse. The Roscoe wind project in Texas uses 128 acres per megawatt covering 100,000 acres. The Shepherds Flat project along the Columbia Gorge in Oregon uses 94 acres per megawatt covering 80,000 acres. The land use for these projects is astounding. Instead of growing corn and burning it in our cars, we would have to cover the whole state of Kansas with wind turbines to replace just 20% of the US generating capacity!

Cost:

No matter what spin is put on it, solar and wind is prohibitively expensive and cannot compete in any kind of free market competitive situation. Wind and solar can’t exist without government mandates and subsidies.

Let’s look at costs for coal, wind and solar using data from the U.S. Energy Information Administration. A modern coal plant would cost $4.579 million per nominal megawatt or $5.387 million per actual usable megawatt. A solar plant the size of the ones being built by PNM would cost $6.050 million per nominal megawatt or $30.250 million per actual usable megawatt. A wind farm would cost $2.423 million per nominal megawatt or $9.752 million per actual usable megawatt.

Solar costs almost 5.6 times more than coal and wind costs nearly twice as much!

Now let’s put all this into perspective using our San Juan Generating Station example. What would it cost to replace San Juan with a new coal plant, solar plant, or wind plant?

To replace San Juan’s 1482 megawatts of actual usable electricity a new coal plant would cost $8.0 billion. A solar array would cost $44.8 billion. A wind plant would cost $14.5 billion. Wind and solar just cannot be justified on any economic grounds!

Fixed operation and maintenance costs follow the same pattern. Coal costs $74,360 per actual usable megawatt. Wind costs $112,280 per actual usable megawatt. Solar costs $130,200 per actual usable megawatt.

The costs for building these wind and solar monstrosities do not even come close to being all the costs. Since they occupy such huge tracts of land, they are usually sited away from already developed areas. The transmission infrastructure simply does not exist to move the electricity from remote locations to urban areas where the people live. Serious investments in transmission lines will be required for any significant expansion of wind and solar to occur.

Transmission line costs are quite variable but seem to range from $2 million to upwards of $4 million per mile depending on line voltage and terrain. A new 100-mile line could cost as much as a half billion dollars!

The transmission lines also add to the area impacts. The size of the plants themselves is huge, but transmission lines will add a significant amount of acreage. Transmission lines are typically 200-feet wide. Therefore transmission lines would occupy an additional 24 acres per mile. A new 100-mile line would affect an additional 2400 acres.

The other cost of wind and solar that is never mentioned is the need for and cost to build the extra thermal plants that will be needed to make up for wind and solar capacity factors. Right now the 80% and 75% down time of solar and wind are being absorbed by the approximately 15% peaking reserve built into the existing thermal system. Once government mandates force utilities to install enough wind and solar to exceed the present reserve, new thermal plants will have to be built to provide the needed peaking power.

If we covered Kansas with a wind plant and generated 20% of the nation’s power needs, it would take a thousand new 600-megawatt gas plants to provide the backup base-load power.

Of course since the additional thermal plants will be needed only when wind and solar are not generating, they will only have to work part time. They will have to repeatedly surge back and forth from full power to standby. That is an extremely inefficient and uneconomic use of a multimillion-dollar facility.

Ironically, the environmental mania to have more wind and solar production is going to force construction of more thermal capacity than would have been needed if no solar or wind were added at all! More San Juan’s will have to be built rather than being decommissioned!

Jobs:

Green jobs, green jobs, green jobs. The country’s unemployment problem will be solved by green jobs! That is the spin going around the country. Let’s take a look at the job situation.

As most people are aware, Spain has actual experience in the lavish government subsidized solar business. The Spanish experienced a loss of over 2 regular jobs for every green job they were able to create! Their economy is in the tank. Spain’s experiment does not bode well for the U.S. green jobs bonanza.

The media coverage of the wind and solar arrays we have been using as examples all make a big deal of the number of jobs they will create temporarily for a few months during construction. However, they routinely fail to disclose the number of permanent jobs once construction is complete.

PNM did state that no permanent jobs will be created because of their new solar arrays. It was reported that the Santa Teresa array will have one permanent employee and a couple of security people. The New Mexico Wind Energy Center has a staff of about 15.

Once constructed, wind and solar arrays just do not provide many jobs. Both types of facilities don’t require much human supervision because much of the monitoring is done remotely. A few maintenance people are needed, but there again one maintenance crew can service several sites.

Earlier we said that it would take 1482 PNM arrays to substitute for San Juan. If we are generous and assume a permanent position for every 5 arrays, about 300 people would be employed on a fulltime basis. We also said that it would require 30 New Mexico Wind Energy Centers to substitute for San Juan, which would provide about 450 jobs.

So how does 3 or 4 hundred jobs compare to evil San Juan? San Juan employees 394 people in the generating facility and another 529 in the mining operation. The total employment is 923 people. The San Juan Generating Station is located in San Juan County. San Juan County has about 52,000 people employed in the county. That means that direct employment by the San Juan plant accounts for about 2% of the county’s employment, which is a significant amount when all the economic multipliers are considered for retail, housing, etc. There is no possible way 300 to 400 jobs for solar or wind scattered all across the state could substitute for the San Juan economic generator or electric generator!

Environmental Impact:

If we can just get rid of those evil thermal power-generating plants the planet will be saved! That is the elite environmentalist mantra carried by the media. The belief is that wind and solar are clean and green and have no environmental impacts.

They do, however, have their share of impacts.

The environmental community which has been pleading for the death of coal-fired power will soon be using the National Environmental Policy Act, the Endangered Species Act and others to bring renewable energy projects to a screeching halt as well.

The required new transmission grid will require thousands of miles and acres of land devoted to power lines. Of course miles and miles of National Forests, Wildlife Refuges and other public lands would be affected and construction proposals will not withstand the environmental challenges under the National Environmental Policy Act, Endangered Species Act, etc. Also, outside of public land, many private landowners will not be receptive to power-line construction, either.

As we have already seen that just to replace the San Juan Generating Station, the area impacted by the new transmission grid would be a drop in the bucket compared to the area that would have to be devoted to solar panels or wind plants.

The wildlife habitat and other environmental conflicts would be significant and never pass muster at the altar of the elite environmental extremists.

On top of covering immense tracts of land, solar arrays and wind plants are ugly. As we have already seen off Cape Cod, the elite environmental extremists like the Kerrys and Kennedys don’t want windmills cluttering up their view. The “Not in My Back Yard” scenario will undoubtedly play out elsewhere for both wind and solar.

Wind turbines also affect the visual landscape because of the flicker and strobe effect of the whirling blades.

Windmills are noisy along with being ugly. Wind turbines produce a steady tiresome low frequency audible sound along with inaudible infrasound. Wind turbine noise is often 10 dB louder than background sound levels (sometimes even 20 dB or more). Acousticians have long known that any increase over 5 dB begins to trigger complaints, with 10dB the threshold for widespread problems.

Wind-turbine syndrome can cause headache, dizziness, nervous fatigue, depression, and sleep problems. The health claims are hard or impossible to prove. Much more telling are community response rates that affirm in some rural communities that 25-50 percent of people hearing turbines near the regulatory sound limits feel that their quality of life is severely impacted.

There are cases in this country as well as Europe where property values have been adversely affected, and some people have been forced to vacate their properties because of their proximity to wind plants.

Once the elite environmental extremists get the wind generators located outside their pristine view areas, they will then have to worry about the number of birds being sliced and diced. The Fish and Wildlife Service estimates that about 440,000 birds including protected species such as the California condor are ground up in windmill plants each year. In California, about 67 golden eagles per year are minced by the wind plants. Wind plants in California are being turned off during bird migration periods to reduce the damage. Keep in mind that also reduces the capacity factor, making wind even less attractive as an alternate energy source.

Wind plants are about twice as deadly as coal plants. There is always a huge outcry when a coal mining disaster is publicized. However during the six-year period between 2003 and 2008 the average death rate for wind was 0.0220 per million megawatt hours and for coal was about half that at 0.0147 per megawatt hours!

Even the distributed solar generating can be dangerous. Because the power companies are required to take excess power from private solar arrays into their system, they have no way to know if and when their lines are being charged by these systems. There are documented cases of injuries to line workers working on down lines that they thought were not energized but actually were with power coming in from private systems.

Oh, but will wind and solar reduce pollution? Maybe not so much! We saw earlier that it would take about 1000 new gas-fired generating stations to back up renewable sufficient to produce 20% of our nation’s energy. Their emissions will largely offset any reductions achieved by the renewable facilities. As an example, Denmark produces about 20% of its power with wind but because of the low capacity factor they ended up using 50% more coal-generated power and have increased their emissions by 36%!

To cover huge areas with solar panels or windmills, it takes a huge amount of material. It takes mining, quarrying, drilling, piping, milling, manufacturing, transporting, and installing to produce the metals, concrete, plastics, fiberglass, resins and on and on to make and install wind and solar plants. All of those operations are extremely energy intensive and will likely consume more energy than the plants will generate in their useful life.

Solar-panel production also needs raw materials and particularly rare earth minerals. The U.S. currently does little mining or processing of rare earths. More than 95% of current production capacity for rare earth metals is currently in China.

Solar panel manufacture can also be deadly.

Several solar companies produce Cadmium Telluride (CdTe) thin film photovoltaics (PV). CdTe is a compound formed from Cadmium and Tellurium. While Tellurium is rare, Cadmium is a highly toxic human carcinogen. According to the Occupational Safety and Health Administration (OSHA), the compound CdTe is also a carcinogen. Depending on the level of exposure, health effects range from kidney damage, fragile bones, and lung damage to death.

Rare earth mining in China has turned towns and hamlets into “cancer villages.” Rivers run murky white to shades of orange. Fish and ducks are dead. And villagers bury friends and neighbors who die of cancer in their 30s and 40s.

The bottom line is that all energy sources come with some type of risk and to assume that solar panels are an economic and environmental panacea is wrong.

One of the most ludicrous claims is how a renewable plant will be equivalent to taking cars off the road. First of all, electric power generation has nothing to do with automobiles. The press releases touting the amount of carbon dioxide reductions in terms of how many cars can be eliminated are just misleading the public. We could cover the county with renewables and no fewer cars would be on the road!

PNM claims CO² reductions equivalent to 1000 cars from their 50-acre arrays. Of course this is based on nominal capacity. So if we apply our 20% capacity factor to the cars as well as the megawatt nominal capacities we come up with 200 cars per megawatt per year for the PNM sites.

The only thing that makes any sense is to talk about whether or not these renewable facilities could substitute for CO² from a coal-fired plant like San Juan. According to EPA, the average car produces about 5.5 tons of CO². The 5 PNM sites would reduce 1000 vehicle equivalents. So we have 1000 vehicle equivalents producing 5.5 tons of CO² each. That is 5,500 tons. Once again going back to the bedeviled San Juan Generating Station as an example, it produces about 13.8 million tons of CO². The press releases make the number of vehicle equivalents sound like a big deal but those we mentioned would only substitute for 0.0004% of San Juan’s CO²! A half day down time on one boiler would save more CO²than these solar arrays.

It is doubtful these kinds of impacts will be acceptable to any environmentalists who are not in it for the money. Elite environmental extremists are pushing massive subsidies for wind and solar. However, if they were to get their wish and they consider the realistic environmental impacts, the luster may start to dull.

Bribery and Coercion:

Why would any power company in its right mind invest two to five times more to build and operate wind and solar plants, pay more for distributed generated power than it can be sold for, or build a bunch of unneeded and inefficient thermal plants just to provide for base load power to back up wind and solar?

The answer of course is found in bribery in the form of loan guarantees, outright government grants, subsidies, tax credits, and coercion in the form of government mandates.

The biggest direct mandates are Renewable Portfolio Standards (RPS). New Mexico is one of 30 states with a mandatory renewable portfolio standard. The NM RPS requires power companies to obtain 10% of their power from renewable sources in the years 2011 through 2014; 15% in the years 2015 through 2019; and 20% in subsequent years. Lest those mandates are not restrictive enough, the power companies can’t even achieve their mandated percentages of renewable sources by seeking the lowest-cost alternative. The NM RPS goes even further and mandates the mix of renewable sources. Wind has to be no less than 20% of the renewable portfolio; solar no less than 20%; non-wind and non-solar (biomass, etc.) no less than 10%; and distributed generation no less than 1.5% through 2014 and 3% thereafter.

A Heritage Foundation analysis of a national 22.5% national RPS found that it would cause a 36% jump in household electric rates; a 60% jump in industrial electric rates; a $5.2 trillion reduction in GDP; and loss of more than one million jobs.

On top of RPS, NM power companies are also mandated to implement energy-efficiency programs to realize energy savings of 5% by 2014 and 10% by 2020 based on 2005 generation levels. This mandate is why you can buy a new Energy Star refrigerator and get a check from the power company. Not only are you paying more on the electric bill to cover the rebate but also spending money on an appliance that you probably don’t even need! The energy savings are not going to cover the cost of the new appliance!

Perhaps more indirect but no less coercive are the raft of federal and state air- and water-quality regulations promulgated by EPA and the New Mexico Environment Department.

New Mexico has not one but two regulations to cap and reduce carbon dioxide emissions from power plants. The companies will have to purchase carbon offsets or reduce output from coal-fired plants, both of which will add to electric bills.

Then EPA gets into the act and comes out with new regulations on a regular basis to control regional haze, ozone, hazardous air pollutants, coal ash, and now carbon dioxide. Dealing with all these rules requires companies to undertake major retrofit projects, reduce output, or just shut the doors. Most of the mandates require huge investments of funds and yield imperceptible environmental benefit.

A recent example is the EPA ruling that PNM will have to install retrofit technology to the San Juan plant to improve visibility at Mesa Verde and other national parks. The cost could be as much as a billion dollars and there will be no perceptible change in visibility.

Solar and wind certainly can produce some electricity. They undoubtedly can and will have a niche in future US power production. However, that should only happen when they can be economically viable on their own merit without the massive bribery and coercion forcing them on us now.

2011-11-03T12:19:00.001-06:00

Surprise? All that taxpayer money for "green jobs" has yielded almost nothing!

Read CARE favorite Diana Furchtgott-Roth's report on the latest Congressional hearing.

Obama's Green-Energy Jobs Lie

By Diana Furchtgott-Roth

RealClearMarkets.com

November 3, 2011.

For several years the public has been told that "green energy" --an expansive term that embraces renewable energy, pollution reduction, and conservation-- will create jobs in America, lots of jobs. And that the federal government must subsidize green energy to create these jobs.

Now it turns out that story is nothing but a fairy tale.

At a hearing Wednesday before a House Oversight and Government Reform subcommittee, the Inspector General of the Energy Department and an Assistant Inspector General of the Labor Department testified that funds authorized by Congress to create green jobs had not been spent or, if spent, had yielded meager results.

Elliot Lewis, the Labor Department's assistant IG for audit, testified that an audit of the Department's green jobs training program showed that only 2.5 percent of individuals originally enrolled were still employed in the jobs for which they were trained six months after the start of their job. Whether they had gone on to other jobs, green or otherwise, or become unemployed, the Department's tracking system did not say.

Gregory Friedman, IG of the Energy Department, testified that as of late October, 45 percent of funds appropriated by the 2009 American Reinvestment and Recovery Act (the stimulus bill) for green energy had not been spent, because few "shovel ready" projects existed.

The testimony of the two IGs shows why green jobs programs have not succeeded in increasing employment. Instead, government money is either wasted, or unspent.

Mr. Friedman said, with regard to weatherization programs, "The main abuses were charging for work that wasn't completed or done at all, abusing priority sequence, premiums for things that could have been gotten for a lower cost."

Take the Green Jobs training sponsored by the Labor Department's Employment and Training Administration. As of June 30, ETA had awarded $490 million of the $500 million provided by Congress for the program. The funds were awarded to state workforce agencies, community colleges, and nonprofits. Green jobs were defined as those "associated with products and services that use renewable energy resources, reduce pollution, and conserve natural resources."

ETA money trained some workers in green jobs such as hybrid- and electric-car auto mechanics, weatherization of buildings, and solar panel installation. Other workers received job referrals, training in basic workforce readiness skills, and credentials and support services to overcome employment barriers.

Yet, two-and-a-half years after Congress passed the Recovery Act and almost three-quarters of the way into the program, grantees had spent only $163 million, about a third of the funds earmarked for them.

With only 1,336 trainees still employed after six months, my simple mathematical calculation yields a taxpayer cost of $121,257 per job.

Perhaps it was a good thing, given the meager results, that so little was actually spent by the states.

Here's how the numbers break out. Out of 53,000 people who were served by the ETA programs, 47,000 enrolled in training. Of them, 26,000 completed training, and 8,000 found jobs. Of the 8,000, only 1,366 were employed six months later.

With the number employed by the Green Jobs program less than two percent of ETA's target of 69,717, and another $327 million left unspent, the program does not appear to be on track. In its defense, ETA told the IG that in the remaining months of the program the grant recipients would manage to spend more money and train more people.

But this appears unlikely, the Labor Department IG said. He recommended that any of the unspent $327 million that was not being used by the states be returned to the Treasury.

The Energy Department had similar problems spending its recovery funds, according to IG Friedman. Out of the Energy Efficiency and Conservation Block Grant Program, almost a third, or $879 million, had not been spent as of March 31, two years after enactment. In Energy Delivery and Energy Reliability, $2.6 billion, or 57 percent, was unspent.

Even more disconcerting, when the funds were spent, the work was often of poor quality. In one state audit, 9 out of 17 weatherized homes failed inspection due to substandard workmanship. One subcontractor gave preference to relatives and employees, even though the target population was elderly and handicapped residents.

In response to a question by Representative Scott DesJarlais, a Tennessee Republican, Mr. Friedman explained that state and local government were unprepared to receive the grants. "Not to make light of a serious situation, but it was like attaching a lawn hose to a fire hydrant," he said. "The governments were overwhelmed."

The IGs held out no hope for better outcomes, a sentiment shared by other witnesses.

David Montgomery of NERA Economic Consulting, testified that opportunities for green jobs are few because the price of carbon emissions in America is too low. If the government wants to create green jobs, he said, it must tax carbon emissions directly.

Without a carbon tax, there is no demand for green technology, and it remains dependent on everlasting government subsidies, Montgomery argued. That's why there's no mass market now for electric vehicles, and no broad market for green technology beyond the one created by federal and state governments.

This would further increase energy prices and slow the economy. Yes, businesses and consumers would change technology to save money, just as the higher gasoline taxes in Europe have resulted in smaller, more fuel-efficient cars. But this would leave consumers less cash on hand for other expenditures.

Gregory Kats, president of Capital E, a venture capital firm, and a witness for the Democrats, testified that the need to invest large amounts of money in the economy has posed serious challenges, including scaling up capacity for training, developing programs, and recruiting.

But, on balance, he concluded that "evaluation of employment impact from multiple non-partisan organizations...demonstrate large and positive employment impact from ARRA clean energy and green funding."

Mr. Kats is on weak ground, because since the end of the recession, in June 2009, the economy has gained only 841,000 nonfarm payroll jobs, a small return on $825 billion in stimulus spending. If jobs were actually created by government spending, and there is scant evidence to support such a proposition, the stimulus bill cost nearly $1 million per job created.

American students are graduating from high schools, technical schools, and colleges where they are being taught that government investments in green energy will lead to more jobs. But when they search for jobs, these students are learning the hard way that the government-inspired stories about green energy leading to jobs is nothing more than science fiction, and more fiction than science.

Diana Furchtgott-Roth is a senior fellow at the Manhattan Institute.

2011-11-01T20:08:00.002-06:00

Obama administration continues to take rights away from states

This time the EPA's target is New Mexico, which will cost electricity users an extra $120 TAX a year.

EPA’s Shocking New Mexico Power Grab

By William Yeatman* A Competitive Enterprise Institute/Rio Grande Foundation Working Paper October 2011

· William Yeatman is Assistant Director of the Center for Energy and Environment at the Competitive Enterprise Institute.

· photo credit: http://www.flickr.com/photos/vanstewart/3702449218/

President Barack Obama’s Environmental Protection Agency (EPA) has moved aggressively to usurp policy making authority from the states. In West Virginia and Kentucky, for example, the EPA has effectively overhauled Clean Water Act (CWA) permitting regimes, in disregard of administrative procedure rules.1 Texas Attorney General Greg Abbott has sued the EPA six times over its decision to reject state’s 17-year old “Flexible Permit” air quality permitting program for refineries.2 Oklahoma Attorney General Scott Pruitt is suing the EPA over its proposal to impose Clean Air Act controls at six coal fired power plants that cost almost $1 billion more than what the Sooner State had proposed.3 And that is just the beginning.

On August 22, 2011, the EPA committed its most outrageous affront to environmental federalism, with New Mexico as the victim. Specifically, the EPA refused to consider New Mexico’s visibility improvement plan, required under the Clean Air Act (CAA), and imposed a federal plan in its stead. This paper demonstrates how the EPA ran roughshod over New Mexico’s rightful authority, at a cost of almost $340 million to New Mexico ratepayers. Thanks to the EPA’s power grab, 500,000 PNM ratepayers in New Mexico are facing a $120 per year electricity tax4 (PNM is the state’s largest utility). The “benefit” of this tax, according to peer- reviewed research, is a visibility “improvement” that is imperceptible to most people.

New Mexico’s plight is right out of a Kafka novella: The EPA has never adequately explained what it is trying to do. It is being completely unreasonable yet circumspect. Its proposed rulemaking failed to articulate clearly why New Mexico’s proposal was unacceptable, and the final rulemaking addressed comments by citing either passages of its oblique proposed rulemaking5 or unidentified passages of the final rulemaking.6

All we know for sure is that it has crafted an ad hoc regulatory regime for visibility improvement that treats New Mexico differently from every other state. The EPA has singled out New Mexico for arbitrary enforcement of the agency’s own dubious interpretations of two related Clean Air Act sections:

 The Regional Haze provision, which provides that states work together to improve visibility at federal National Parks and Wilderness Areas, while giving the states a high degree of control; and

 The Good Neighbor provision for visibility, which provides that states demonstrate they have implemented adequate measures to ensure that their emissions do not “interfere with measures required to be included in the applicable implementation plan for any other state...to protect visibility.”7

In June 2011, New Mexico regulators completed a plan that would have achieved the requirements of both the Good Neighbor and Regional Haze provisions. However, the EPA refused to even consider New Mexico’s plan, based on arbitrary, unnecessary deadlines that the EPA set for New Mexico, and for no other state.

Two months later, the EPA imposed a federal visibility plan on New Mexico. It was $700 million more expensive than the state plan, which, again, met all of the EPA’s own requirements.8 To put it another way, the EPA’s took the liberty of exceeding its own cost- effectiveness regulations. In order to justify these exorbitant costs, the EPA created a hybrid authority from the Clean Air Act’s Good Neighbor and Regional Haze provisions. Illogically (and likely illegally), the EPA found that together, these provisions mandate emissions controls 10 times as expensive as would have been required by the sum of the individual provisions. No other state has been subjected to visibility regulations that were far more stringent than the EPA’s own criteria.

It gets worse. The EPA alleged that New Mexico violated the Good Neighbor provision for visibility based on a vague, undefined standard that was more lenient for other states. The EPA fails to explain why it treated New Mexico differently.

New Mexico's Visibility-Improvement Controls Meet EPA's Requirements...

NOX Controlled Emissions Rate (lb/mmBTU)

Controls mandated by EPA's Regional Haze provision authority 0.24

Controls mandated by EPA's (claimed) Good Neighbor provision authority 0.28

New Mexico's proposed controls 0.23

Controls imposed by EPA’s federal implementation plan 0.05

..Yet, EPA Is Imposing Controls That Far Exceed Its Own Rules, and Cost $700 Million More

NOX Controlled Emissions Rate (lb/mmBTU) Cost ($millions)

New Mexico's proposed controls

(which meet all federal and state laws and regulations) 0.23 64

Controls imposed by EPA 0.05 779

The EPA’s actions warrant a response. The New Mexico Legislature should express its disapproval in the strongest possible terms. Lawmakers should send a message to the White House, informing it that New Mexico objects to the EPA’s capricious and arbitrary machinations. A description of the EPA’s abuse of power regarding each provision follows.

The Regional Haze Provision

In 1977 and 1990, Congress passed amendments to the Clean Air Act providing that states work together to improve visibility at federal National Parks and Wilderness Areas. Together, these amendments are known as the Regional Haze provision.9

Notably, this provision accords states a uniquely high degree of control relative to the EPA. According to the EPA’s 2005 Regional Haze implementation guidelines, “[T]he [Clean Air] Act and legislative history indicate that Congress evinced a special concern with insuring that States would be the decision-makers”10 on visibility-improvement policy making. The courts, too, have interpreted the Clean Air Act such that states have primacy on Regional Haze decision-making. In the seminal case American Corn Growers v. EPA (2001), which set boundaries between the states and the EPA on Regional Haze policy, the D.C. Circuit Court remanded the EPA’s 1999 Regional Haze implementation guidelines for encroaching on states’ rightful authority.11

Under the Regional Haze provision, states must establish “Reasonable Progress” goals to improve visibility on a regional basis. A primary mechanism by which states would achieve Reasonable Progress is a requirement that all major emitters built between 1962 and 1977 install what is known as Best Available Retrofit Technology (BART) to improve visibility.

BART is not any particular technology, but a process. First, states have to decide which emitters contribute significantly to visibility impairment at any and all federal National Parks and Wilderness Areas. Then, for each source, the law requires that states must perform a five-factor analysis, which includes:

1. Cost of compliance;

2. Energy and non-air quality environmental impacts of compliance;

3. Any existing pollution control technology in use at the source;

4. Remaining useful life of the source; and

5. The degree of improvement in visibility which may reasonably be anticipated to resultfrom the use of such technology.12

New Mexico Singled Out Under BART Rules

In 2005, the EPA published BART guidelines that establish targets for power plants to reduce visibility-impairing pollutants, known as “presumptive limits.” For coal-fired electricity generating units smaller than 750 megawatts, the 2005 guidelines were only recommendations, so states could essentially decide on any emissions control technology after regulators performed the BART five-factor analysis. But for coal power plants larger than 750 megawatts, like the 1,800-megawatt San Juan Generating Station, these BART “presumptive limits” were mandatory.13

From December 2010 to May 2011, the New Mexico Environmental Department (NMED) performed the five-factor BART analysis in a public rulemaking, in accordance with all applicable procedural law. The plan was predicated on the EPA’s 2005 guidelines, and it set emissions controls for the San Juan Generating Station, near Farmington, at the BART “presumptive limits.” In fact, the NMED had no choice in the matter—state law forbids air quality regulators from setting emissions limits pursuant to federal law at a level that is more stringent than what the federal government requires.14 On June 3, 2011, the Environmental Improvement Board approved the Regional Haze plan by a unanimous vote.15

The NMED’s visibility-improvement plan met all state and federal laws and regulations. Despite this, the EPA in August 2011 rejected the state’s cost-effectiveness analysis, a key component of the BART process.16 Then the EPA, based on its own cost-effectiveness analysis, imposed emissions requirements on the San Juan Generating Station that far exceeded its own “presumptive limits.”

New Mexico’s Regional Haze strategy, which, again, met all applicable federal and state laws and regulations, cost $73.8 million; the EPA’s plan cost $748 million. PNM’s 500,000 New Mexico ratepayers would bear $397 million of this cost. The EPA plan would increase electricity bills by $9.50 a month, according to an analysis by the utility.17

That is a lot of money, especially considering that the “benefits” are invisible. Peer-reviewed research suggests that the there is at most a 50 percent chance the visibility “improvement” wrought by the EPA’s preferred controls could be perceptible by the general population on the seventh-worst visibility day of the year at Mesa Verde, the national park closest to the San Juan Generating Station.18

The EPA has not approved a single regional haze submission, but it has proposed federal plans for two other states in addition to New Mexico: Oklahoma19 and North Dakota.20 However, those two states had proposed regional haze plans that failed to meet the EPA’s mandatory “presumptive limits.”21 New Mexico, on the other hand, proposed a plan in full compliance with federal and state laws and regulations. In a contortion of logic, the EPA is rejecting New Mexico’s cost-effective analysis for a plan that achieves the EPA’s own target for cost- effectiveness. It is the only state subject to this bizarre reasoning.

New Mexico Singled out by EPA’s Self-Imposed Regional Haze Deadline

In its August rulemaking, the EPA claimed that it could not even consider NMED’s plan, because it was submitted after its January 15, 2011, deadline.22 Thus, the EPA claimed that, “Because...New Mexico did not timely formulate and submit its BART determinations, we have the authority and the responsibility to make a NOX BART determination for [the San Juan Generating Station].”23

But New Mexico was not the only state to submit a Regional Haze plan late. Colorado, Montana, North Dakota, and Wyoming also made late submissions. Under a consent decree with environmentalist litigation organizations, the EPA will get around to judging those plans by: January 2012 for North Dakota; June 29, 2012, for Montana; September 10, 2012, for Colorado; and October 15, 2012, for Wyoming.24

For these states, the EPA was compelled to act by three environmentalist organizations (WildEarth Guardian, the National Parks Conservation Association, and the Environmental Defense Fund), and the earliest deadline was established in January 2012. Yet for New Mexico, the EPA acted on its own accord. The EPA chose to ignore New Mexico’s visibility strategy on the basis of this arbitrary, self-imposed deadline, set months before that of every other state, in blatant disregard of Congress’ intent to have the states take the lead on Regional Haze.

The Good Neighbor Provision

To borrow a poker term, New Mexico had the “nuts” vis a vis the EPA on visibility improvement policy. The EPA wanted the most expensive controls installed at the San Juan Generating Station, but New Mexico’s Regional Haze plan was unassailable. Not only did Congress afford the states a uniquely high degree of sovereignty over the EPA on visibility improvement policy, but New Mexico regulators submitted a plan that meets the EPA’s own rules.

The EPA, however, had an ace up its sleeve. In an unprecedented seizure of power, its proposed rulemaking to impose a federal visibility plan on New Mexico, published January 7, 2011, claimed that the agency has dual-authority under the Clean Air Act to run roughshod over New Mexico on visibility-improvement policy.25 In addition to the Regional Haze provision, the EPA also claims to have authority under the Good Neighbor provision of the Clean Air Act,26 which provides that states demonstrate they have implemented adequate measures to ensure that their emissions do not “interfere with measures required to be included in the applicable implementation plan for any other state...to protect visibility.”

This is a dubious legal reasoning, because the Regional Haze provision explicitly mandates that states control emissions of haze-causing pollutants that significantly diminish visibility in all federal National Parks and Wilderness Areas, not just ones within their own borders. That is, the Regional Haze provision effectively requires states to meet the Good Neighbor provision. It makes no sense for Congress to create a program requiring states to work together to reduce visibility impairment in the Regional Haze provision, and then to also create a vague, amorphous, ill-defined separate source of authority with one phrase in the Good Neighbor provision, an altogether different section of the law.

More importantly, the EPA has yet to fully approve a single Regional Haze plan. How can the EPA know whether New Mexico is adversely affecting other states’ visibility improvement programs that do not yet exist? Indeed, this is the exact reasoning used by the EPA in 2006, when it published implementation rules for the Good Neighbor provision. In the rules, the EPA said that, “is not possible at this time to assess whether there is any interference with measures in...another State designed to ‘protect visibility’...until regional haze [plans] are submitted and approved.”27

According to the EPA’s own guidelines, the Good Neighbor provision for visibility is essentially a procedural requirement. All states had to do was make a “simple submission” indicating that they intended to submit a Regional Haze plan. To be clear: EPA’s 2006 interpretation of the Clean Air Act imparts no authority to the agency pursuant to the Good Neighbor provision. Now, however, the EPA is interpreting it as an independent source of power!

The EPA’s apparent power grab pursuant to the Good Neighbor provision of the Clean Air Act is being challenged in federal court by PNM, among others,28 so the legality of the agency’s interpretation remains in question. What is not in question is that the EPA created a regulatory program under the Good Neighbor provision that treats New Mexico differently than every other state.

New Mexico Singled out under EPA Good Neighbor Provision Rules

As noted above, the EPA’s own Good Neighbor provision guidelines interpret compliance as a clerical matter, and not as a source of authority. In accordance with its 2006 Good Neighbor provision implementation rules, the EPA in 2007 and 2008 approved “simple submissions”— promises to submit a Regional Haze plan—submitted by Arizona,29 Iowa,30 Kansas,31 Minnesota,32 Nebraska,33 Nevada,34 South Dakota,35 Utah,36 and Wyoming.37

Like these states, New Mexico submitted a plan to comply with the Good Neighbor provision, one that comported with the EPA’s own 2006 guidelines. However, without explanation, the EPA remained silent on the Good Neighbor provision plans for visibility improvement submitted by a handful of states, including New Mexico. These states were left in regulatory limbo for years. Notably, former Governor Bill Richardson’s administration objected to the EPA’s refusal to approve New Mexico’s submission. The NMED expressed its “fundamental concerns regarding the workability of the [Good Neighbor provision proposal] review process” and also stated that the EPA’s refusal to act results in “a never ending cycle of [proposal] submissions without approvals.”38

In August, more than three and a half years after New Mexico submitted its Good Neighbor provision proposal, the EPA reversed itself and claimed that its 2006 implementation rules were published “in error.” Whereas those 2006 guidelines rightly asserted that it was “impossible” to know whether one state is interfering with other states’ visibility-improvement programs if such programs do not yet exist, now the EPA is arguing that it is possible to determine whether a state is violating the Good Neighbor provision, based on what the state “should” have in its Regional Haze plan, even if that plan has not yet been approved by the EPA (to date, the EPA hasn’t approved a single plan).39

Unfortunately, the EPA failed to put forth concrete rules to assess the approvability of a state’s Good Neighbor visibility proposal in the absence of an approved Regional Haze plan. So there is no objective referent. Troublingly, the EPA interprets “should” differently for New Mexico than it does for other states.

For New Mexico, the EPA decided that the Good Neighbor plan “should” have controls at least as stringent as those assumed by the Western Air Regional Partnership (WRAP), a group of Western states that formed to coordinate their environmental modeling regarding visibility improvement. In its proposed rulemaking, the EPA stated that, “any discrepancies between what was included in the WRAP photochemical modeling and what is presently enforceable, is a concern.”40 The EPA concluded, on the basis of this “discrepancy”41 that New Mexico is interfering with visibility improvement programs in other WRAP states, and, therefore, is in violation of the Good Neighbor provision.

For other WRAP states, however, the EPA treated “discrepancies” differently. Earlier in 2011, the EPA proposed to approve Oregon’s Good Neighbor plan for visibility,42 despite the fact that the EPA allowed the 568-megawatt Boardman coal-fired power plant, in northeastern Oregon, to emit almost four times as much sulfur-dioxide (SO2) as assumed by WRAP modeling—0.4 (lbs pounds of sulfur dioxide per million British Thermal Unit

SO2/mmBTU), well above the WRAP-determined emissions limit of 0.12 lbs SO2/mmBTU.43

The magnitude of Oregon’s “discrepancy” with WRAP modeling, which was approved by the EPA, is comparable with the magnitude of New Mexico’s “discrepancy,” which was disallowed by the EPA. San Juan Generating Station overshot the WRAP modeling assumptions by 0.025 pounds of nitrogen oxides (NOx) per million British Thermal Unit.44 San Juan is almost three times larger than Boardman, but the EPA is allowing the latter to emit NOx much more above the WRAP model’s limit than the former. Moreover, on a per weight basis, sulfur dioxide impairs visibility much more do than nitrogen oxides, so it makes no sense to regulate NOx more strictly for the purposes of visibility improvement.

Another example of the EPA’s capriciousness occurred in April 2011, when it approved Colorado’s Good Neighbor plan for visibility,45 even though it could not legally take into account 45,700 tons of sulfates and 5,200 tons of nitrogen oxides that had been assumed by WRAP modeling.46 For comparison, consider that the San Juan Generating Station would have complied with the EPA’s ad hoc criteria for Good Neighbor provision compliance by reducing nitrogen oxides by about 3,500 tons—which is 1,700 tons less than the 5,200 tons “discrepancy” that the EPA allowed for Colorado.

For New Mexico, a mere discrepancy of any size between emissions and modeling assumptions was cause for the rejection of a Good Neighbor plan, while large discrepancies did not affect approval for Colorado and Oregon. There is no way to know the reason for this disparate treatment, because the EPA never established impartial criteria.

New Mexico Singled out by EPA’s Good Neighbor Provision Deadline

Having seized an independent source of authority under the Good Neighbor provision of the Clean Air Act, the EPA then alleges that New Mexico is in violation of the provision, based on an arbitrary standard that was different for other states. Even if these shenanigans were legal (they’re likely not), New Mexico’s visibility improvement plan, submitted in July, would have achieved the requirements of both the Regional Haze and Good Neighbor provisions.

But the EPA in August refused to even consider New Mexico’s plan, because the agency claimed that it didn’t have the time to do so. In the first section, the EPA’s arbitrary Regional Haze deadline was explained. In addition to this bogus cutoff, the EPA stated that it was rushed to act in order to comply with an August 5 deadline to decide on New Mexico’s Good Neighbor provision proposal. Unlike the Regional Haze deadline, which was self-imposed, this Good Neighbor provision deadline was established by a court-approved consent decree.

As noted earlier, New Mexico submitted a proposal to comply with the Good Neighbor provision in September 2007. It met the EPA’s own implementation rules, but the EPA refused to act on it, thereby leaving New Mexico in regulatory limbo.

The Clean Air Act gives the EPA 18 months to either approve or reject a state submission, and in June 2009, an environmentalist litigation group, WildEarth Guardians, sued to compel action. Under the terms of the Consent Agreement, the EPA had until August 5, 2011, to either approve or reject New Mexico’s Good Neighbor provision compliance proposal.47 The EPA claims that this cutoff, in addition to its self-imposed Regional Haze deadline, is the reason that it could not even consider the visibility improvement plan submitted by New Mexico a month earlier.48

New Mexico, however, was not the only state subject to this consent decree. Under the original agreement, the EPA also had to move on proposals submitted by California, Colorado, Idaho, North Dakota, Oklahoma, and Oregon. Those states were treated differently.

California and Idaho are different circumstances altogether, in that neither is home to coal-fired power plants that are subject to visibility-improvement regulations. The EPA approved their plans this year. And, as already noted, the EPA approved Good Neighbor provision proposals for Oregon and Colorado using more generous (yet still undefined) criteria than was applied to New Mexico.

That leaves Oklahoma and North Dakota, in addition to New Mexico, as the only states still subject to the consent decree. Interestingly, the EPA used its discretion under the court-approved agreement to extend the deadlines to these states, to October 14, 2011, for Oklahoma49 and February 9, 2012, for North Dakota.50 If the EPA had pushed for the same treatment for New Mexico, then it would have given itself the time to consider New Mexico’s Regional Haze compliance proposal, which achieved all applicable federal and state laws and regulations.

Even if the EPA refused to try to change the August 5 deadline for New Mexico, as it did for other states, there is no basis in its claim that it had no choice but to impose a federal visibility plan on New Mexico due to the consent decree. In fact, it had the discretion to perform two actions:

1. Approve New Mexico’s Good Neighbor provision proposal because it comported with EPA’s existing rules; or

2. Approve the proposal under the EPA’s new, ad hoc rules, because New Mexico’s proposed visibility improvement plan included what the state “should have,” per the EPA’s own guidelines.

In short, the EPA’s supposed lack of discretion was a complete fiction.

Conclusion: New Mexico Needs To Fight Back

The San Juan Generating Station complies with every single health-based air quality standard pursuant to the Clean Air Act. Indeed, since 2005, PNM has invested nearly $300 million to upgrade emissions controls at the power plant. Now, however, the EPA is trying to impose almost $700 million in unnecessary costs, in order to achieve largely imperceptible “improvements” in visibility at National Parks and Wilderness Areas.

To be sure, New Mexico is subject to a Clean Air Act mandate to install retrofits at the 1,800 megawatt San Juan Generating Station that would control the emission of visibility-impairing pollutants. Accordingly, New Mexico air quality regulators composed a compliance plan that met all applicable state and federal laws and regulations. However, the EPA wanted New Mexico to install emissions controls that far exceeded its own requirements. So it manufactured an ad hoc regulatory regime specific to the Land of Enchantment. Simply put, New Mexico is being treated differently than every other state, in order to justify $700 million in costs beyond what the EPA’s own rules stipulate are necessary.

New Mexico lawmakers should send a strong message to the EPA that its actions are unacceptable. They should enact a resolution condemning the EPA’s arbitrary regulations and demand that New Mexico be treated like its peers. In so doing, they would be governing in the best interest of the nearly 500,000 New Mexicans who face a $120 per year electricity tax to pay for invisible benefits.

Notes

1 On October 6, 2011, a federal district court ruled that the EPA violated the Administrative Procedure Act by substantively changing the Clean Water Act permitting process for surface coal mines in Appalachia. The case had been brought by West Virginia, Kentucky, and the National Mining Association. See Case No. 1:10-cv-01220-RBW Document 96, filed October 6, 2011, available: http://www.nma.org/pdf/tmp/100611_404_opinion.pdf.

2 See 75 FR 41312 for the EPA’s rulemaking to end the Flexible Permit program. See also, Erin Mulvaney “Texas Vows to Fight EPA Regulations,” Dallas Morning News, March 11, 2011, http://trailblazersblog.dallasnews.com/archives/2011/03/texas-leaders-vow-to-fight-epa.html.

3 See 76 FR 16168 for EPA’s proposed Oklahoma rule; see also, “Oklahoma Attorney General Sues EPA over Regional Haze Rule,” press release from office of Oklahoma Attorney General Scott Pruitt, http://www.oag.state.ok.us/oagweb.nsf/0/1B875A0A1B56FAF2862578A2005C0B16.

4 PNM Submission to the Environmental Improvement Board, “Update Rate Impact Analysis,” February 11, 2011, http://www.nmenv.state.nm.us/aqb/reghaz/documents/NMED_Ex7u_RateImpactAnalysis_02112011.pdf.

5 For example, see 76 FR 52390, “As explained in the notice of proposed rulemaking, we believe that the analysis conducted by the WRAP provides an appropriate means for designing a FIP that will ensure that emissions from sources in New Mexico are not interfering with the visibility programs of other states...” As explained in the second section of this paper, the EPA’s proposed rulemaking never established criteria for what constitutes “appropriate means.” Instead, the EPA applied different standards to different states.

6 For example, see 76 FR 52415, 52416, “As previously discussed, we have made findings related to the New Mexico SIP submission needed to address interstate transport and the requirement that emissions from New Mexico sources do not interfere with measures required in the SIP of any other state to protect visibility...” The only possible antecedent to “as previously discussed” is the fifth footnote of this paper, which leads to nowhere. See also comment 41.

7 Clean Air Act Section 110(a)(2)(D)(i)(II).

8 PNM Submission to the Environmental Improvement Board.

9 Clean Air Act Sections 169 A and 169 B.

10 70 FR 39137.

11 291 F. 3d 1: American Corn Growers Association v. Environmental Protection Agency, paragraph 22, “We agree with these petitioners that the [Regional ] Haze Rule’s Best Available Retrofit Technology (BART) provisions are inconsistent with the Act’s provisions giving the states broad authority over BART determinations.”

12 Clean Air Act, Section 169A(g)(1).

13 70 FR 39108, “[The Clean Air Act] clearly requires us to promulgate Best Available Retrofit Technology (BART) guidelines that the States must follow in establishing BART emission limitations for power plants with a total capacity exceeding the 750 megawatt cutoff.” The EPA cites 169(b) of the Clean Air Act, stipulating that, “in the case of a fossil fuel fired generating power plant having a capacity in excess of 750 megawatts, the emissions limitations required under this paragraph shall be determined pursuant to guidelines, promulgated by the Administrator...”

14 See NMSA 74-2-5 C.(1)(a): “Regulations adopted by the Environmental Improvement Board...shall be no more stringent but at least as stringent as required by the federal act and federal regulations pertaining to visibility protection in mandatory class 1 areas...”

15 NM Environmental Improvement Board, In matter of Proposed Revisions to the State Implementation Plan for Regional Haze under 40 CFR Section 51.09, June 6, 2011, http://www.nmenv.state.nm.us/aqb/reghaz/documents/EIB_11-01_Order_and_Statement_of_Reasons.pdf. 16 76 FR 52391, “PNM’s estimated costs for installing SCR on the units of the San Juan Generating Station [which were approved by the New Mexico Environmental Department and the Environmental Improvement Board] are higher than justified.” See generally, 76 FR 52391, 52392, “General Cost Comments.”

17 PNM Submission to the Environmental Improvement Board.

18 This is a conservative estimate. It is based on the New Mexico Environmental Department-modeled difference in visibility improvement at Mesa Verde between New Mexico’s preferred Regional Haze controls and those preferred by the EPA (1.12 deciviews). This difference is then applied to a chart (Figure 1), which was taken from Ronald Henry, “Estimating the Probability of the Public Perceiving a Decrease in Atmospheric Haze,” Journal of the Air and Waste Management Association Vol. 55 No. 11, p. 1764.

19 76 FR 16168.

20 76 FR 58570.

21 In Oklahoma, the state’s Regional Haze plan to address sulfur dioxide at six coal-fired power plants exceeded the presumptive limits established in the 2005 BART Guidelines. In North Dakota, the state’s regional haze plan to address nitrogen oxides emissions at three coal-fired power plants that operate a cyclone boiler exceeded the presumptive limits. See 76 FR 16168 and 76 FR 58570.

22 The EPA stated: “We received a RH SIP submittal from the state on July 5, 2011. Unfortunately, due to the timing of that submittal, we cannot evaluate it as part of this action. We note that this RH SIP submittal arrived approximately 31⁄2 years past the due date of December 17, 2007, and well past January 15, 2011, the date by which we were obligated either to approve a RH SIP submission or to promulgate a RH FIP, as a result of the 2009 finding of failure to submit the RH SIP,” 76 FR 32415.

23 76 FR 52387.

24 76 FR 34983.

25 76 FR 52415, “EPA has two separate sources of authority and obligations to take this action, i.e., a statutory obligation to promulgate a [federal plan] to meet the requirements of [the Good Neighbor provision for visibility] and a statutory obligation to promulgate a [federal plan] to meet the RH (Regional Haze) program requirements of the CAA (Clean Air Act).”

26 Clean Air Act, Section 110(a)(2)(D)(i)(II).

27 Memorandum to Regional Air Division Director, Regions 1-10, August 15, 2006, p. 9, http://www.epa.gov/ttn/oarpg/t1/memoranda/section110a2di_sip_guidance.pdf.

28 Oklahoma and North Dakota have sued the EPA over its use of the Good Neighbor provision for visibility as an independent source of power.

29 72 FR 41629.

30 72 FR 10380.

31 72 FR 10608.

32 73 FR 31366.

33 72 FR 71245.

34 72 FR 41629.

35 73 FR 26019.

36 73 FR 16543.

37 73 FR 26019.

38 In comments to the EPA on its proposed federal implementation plan for New Mexico, PNM cited a May 6, 2010 letter to the EPA from NMED, asking EPA to stop delaying and approve the state’s Good Neighbor provision proposal.

39 76 FR 52419, “[The Good Neighbor compliance plan] evaluation is supposed to consider what other states should have in their State Implementation Plans as of this point in time, and is not limited by the fact that other states may or may not have approved those [Regional Haze plans] at this point in time.”

40 76 FR 497.

41 Maddeningly, the EPA never elaborates on how it came to conclude that EPA violated the Good Neighbor provision for visibility. It mentioned an analysis (76 FR 497), “We have evaluated [New Mexico’s] discrepancies and determined that they are significant due to the changes in visibility projections in the modeling.” But the EPA doesn’t cite an analysis, nor does it explain itself any further.

42 76 FR 12651.

43 76 FR 12660, 12661, 12662.

44 76 FR 497, “Although the SJGS is subject to a federally enforceable permit, the permit’s 30-day rolling average NOx emission limit of 0.30 lb/mmBTU for all units is less restrictive than the emission rates modeled by the WRAP of 0.27 lbs/mmBTU for units 1 and 3, and 0.28 lbs/mmBTU for units 2 and 4 in addressing the daily visibility impacts.”

45 76 FR 22036.

46 76 FR 8329, “To account for measures that are not federally enforceable, EPA increased the Colorado emissions inventory 45,700 tons for sulfates and 5,200 tons for nitrates from the emission inventory used for Colorado in the WRAP 2018 reasonable progress modeling.”

47 WildEarth Guardians v. Lisa Jackson, Case No. 4:09-CV-02453-CW.

48 76 FR 52415, “We are under a consent Decree deadline with WildEarth Guardians that requires the Agency to take action by August 5, 2011, either to approve the New Mexico [Good Neighbor provision for visibility proposal] or promulgate a Federal Implementation Plan, to address the [Good Neighbor provision for visibility]. Because of the lateness of the July 5, 2011 submission, it is not possible to review and potentially approve the July 5, 2011, SIP submission by proposing a rulemaking and promulgating a final action by August 5.”

49 WildEarth Guardians v. Lisa Jackson, Case No. 4:09-CV-02453-CW Document 34. 50 WildEarth Guardians v. Lisa Jackson, Case No. 4:09-CV-02453-CW Document 37.

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2011-10-25T16:56:00.003-06:00

This case proves that climate alarmists and other liberals have no sense of humor!

Read one of CARE's favorites, Paul Driessen's take on a ridiculous libel lawsuit.

It’s libel – except when Mike does it

This Mann-made global warming lawsuit could backfire on the Penn State alarmist

Support science, energy and freedom – donate to Dr. Tim Ball’s legal defense fund

Paul Driessen

Lewis Carroll died too soon. Just imagine the fun he’d have with the cliquish clan of climate catastrophe researchers who seek to control science, debate and public policy on global warming and energy – and then get outraged when someone challenges their findings, methodologies or integrity.

On October 1, Dr. Michael Mann of Pennsylvania State University and “hockey stick” fame published an angry riposte in Colorado’s obscure Vail Daily Voices (circulation 15,000), expressing his umbrage over an article that had appeared in the free coffee shop newspaper a day earlier.

“An individual named Martin Hertzberg did a grave disservice to your readers by making false and defamatory statements about me and my climate scientist colleagues in his recent commentary in your paper,” Mann began. (Hertzberg is a research scientist and former US Navy meteorologist.) The thin-skinned Penn State scientist then ranted:

“These are just lies, regurgitation of dishonest smears that have been manufactured by fossil fuel industry-funded climate change deniers, and those who do their bidding by lying to the public about the science.” [emphasis added]

Meanwhile, NASA scientist Dr. James Hansen, recipient of huge monetary awards for strident climate disaster claims, wants oil and coal company CEOs prosecuted for “crimes against humanity.”

So Mann and Hansen are honest scientists, trying to do their jobs. But Hertzberg and anyone else who questions the “imminent manmade climate change catastrophe” thesis are dishonest crooks, liars, Holocaust deniers, hired guns for fossil fuel interests, criminals threatening all humanity.

Hertzberg’s views were defamatory, but Mann’s and Hansen’s accusations are mild, rational and truthful.

(Readers can find Mann’s letters and lively discussions about them and Hansen on Dr. Anthony Watts’ WattsUpWithThat.com climate change website. Hertzberg’s letter appeared, mysteriously disappeared, then reappeared in the Vail Voices online archives as the controversy raged and ebbed.)

The bizarre saga gets even stranger when viewed alongside Dr. Mann’s kneejerk lawsuit against Dr. Tim Ball, a Canadian scientist, historical climatologist and retired professor who has frequently voiced his skepticism about claims that hydrocarbon use and carbon dioxide emissions are the primary cause of climate change and present an imminent risk of widespread planetary cataclysms. Dr. Ball has analyzed Canadian and global climate history, and does not regard computer models as much more than virtual reality scenarios that should never be the basis for real-world public policy.

Dr. Ball had poked fun at Dr. Mann, playing word games that suggest the computer guy should not be at Penn State, but in a similarly named state institution. Unfortunately, Mann is not easily amused, as Dr. Ball should have known from the PSU professor’s testy reaction to the “Hide the decline” animation and other spoofs that various AGW “deniers” posted online.

Mann insisted that Dr. Ball’s little joke was libelous and took him to court. Mann’s legal principal seems to be that libel is fine only when he and Hansen practice the craft, albeit with far less good humor than others display. More importantly, Dr. Ball does not live or work in the United States.

US libel cases are governed by the First Amendment, “public figure” rules and other safeguards that ensure open, robust debate, and make it difficult and expensive to sue people over slights, affronts, insults, disagreements and jokes.

Canada, unfortunately, has more limited free speech protections. So Dr. Mike sued Dr. Tim in Canada, assuming victory would be rapid and sweet. Surprise! Dr. Ball decided to slug it out.

In Canada, the principal defenses against libel claims are that the alleged defamation constitutes “fair comment” or was in fact “the truth.” Ball chose the latter defense.

Doing so means the penalty for losing could be higher than under “fair comment” rules. But arguing that his statement was based on truth allows Dr. Ball to seek “discovery” of evidence that Dr. Mann’s actions reflect a use of public funds to alter or falsify scientific data, present highly speculative results as solid facts, or otherwise engage in something that a reasonable person would conclude constitutes dishonest activity or criminal culpability, undertaken moreover through the use of taxpayer funds.

Proving that will not be easy, especially since Mann has steadfastly refused to provide such potential evidence to anyone, including Virginia Attorney General Ken Cuccinelli. That evidence might include Climategate emails; computer codes and data used, misused or used selectively to generate global warming spikes in historical graphs; and questionable research or proposals used to secure additional government grants, misinform citizens or lawmakers, or promote costly or harmful public policies.

The US government alone spent an estimated $79 billion on climate, renewable energy and related research between 1989 and 2009 – and many billions more since then. Obviously, there is a lot at stake for scientists, universities, government agencies and other institutions engaged in trying to demonstrate a link between human greenhouse gas emissions and climate, weather, agricultural, sea level and other “disasters.” The reputations and credibility of researchers and their institutions are likewise at stake.

Keeping people alarmed, insisting that numerous disasters will soon result from carbon dioxide emissions and a few degrees of planetary warming – and silencing anyone who questions climate chaos claims – are essential if this money train is to be kept on the tracks.

Dr. Mann is likely aided by Penn State lawyers, largely paid for with climate research taxpayer dollars the university wants to safeguard, by preventing criticism or scientific disclosure and transparency.

A judge and jury will decide the Mann vs. Ball case, after carefully weighing all the evidence on whether Dr. Ball’s allegations and insinuations were factual, accurate and truthful.

Dr. Mann’s research was conducted primarily with public money. It is being presented as valid, peer-reviewed science. It is also being used to champion and justify major policy recommendations at state, national and international levels. And those recommendations call for carbon taxes and other penalties for using hydrocarbon energy; the replacement of affordable, dependable fossil fuel energy with expensive, unreliable wind and solar facilities; a roll-back of living standards in rich developed nations; and limited or minimal energy and economic development in poor countries.

Therefore, as I have argued previously, the public has a right to demand that Mann & Comrades show their work, not merely their answers and policy demands. Thus far, serious questions about Mann’s research remain unanswered. The public also has a right to require that Mann, Penn State & Company provide their source material, not just their results – along with anything else that may be relevant to gauging the validity, accuracy and honesty of the work and its conclusions and policy recommendations.

We the People have a further right, duty and obligation to protect free speech, robust debate, the integrity of the scientific method, our personal freedoms, and our access to the reliable, affordable energy that makes our jobs and living standards possible. One way you can do this is by supporting Dr. Tim Ball’s legal defense fund. Just click here or go to http://DrTimBall.com/

__________

Paul Driessen is senior policy advisor for the Committee For A Constructive Tomorrow and Congress of Racial Equality, and author of Eco-Imperialism: Green power - Black death.

2011-10-06T10:59:00.002-06:00

As the following article by Diana Furchtgott-Roth points out,

the Department of Energy is hell-bent on spending taxpayer dollars on

not-yet-proven renewable energy technologies.

They are not only unproven, but their results in almost every case are

not cost-effective.

By spending more taxpayer dollars on these efforts, the DOE continues to heap debt on the heads of taxpayers. Kind of makes one wonder why!

The DOE Hasn't Learned Its Solyndra Lessons
By Diana Furchtgott-Roth

RealClearMarkets.com
October 6, 2011.

Some might think the Energy Department learned from the September Solyndra bankruptcy, in which taxpayers have a $528 million exposure. Surely September would have been a good time to halt the Energy Department's loan guarantee program and understand why this program has become the poster child for crony capitalism.

But instead of pausing, the Energy Department recklessly issued another $8 billion of loan guarantees in September under the Energy Policy Act of 2005.

Why last month's haste to put taxpayers at even more risk? No doubt, the administration was aware that the legal authority for the loan guarantee program was going to end on September 30. Rather than understand why the program was defective, the administration, ardently committed to promoting renewable energy, rushed ahead where a more angelic government might have feared to tread.

Twelve companies received loan guarantees last month, including First Solar ($2 billion), Sunpower Corporation ($1.2 billion), and Abengoa Solar (a second load for $1.2 billion, following a first loan for $1.4 billion in December). This brings to $16 billion the sum of guarantees issued by the government under the program since 2009, according to Energy Department spokesman Sonia Taylor.

Which one will be the next Solyndra?

Will it be 1366 Technologies, Inc, located in Lexington, Massachusetts, which received $150 million on September 8? The company's plan, as stated in an article by Katie Fehrenbacher in Gigaom.com in March 2011, is to break ground on its factory in March 2012 and start shipping silicon wafers in 2013.

Ms. Fehrenbacher, by the way, is the reporter who forecast the Solyndra failure back in 2010. Just like Solyndra, 1366's sales are two years in the future.

On its Web site, 1366 Technologies states, "The science is understood. The material is abundant. The products work. All that is left is to build the largest manufacturing industry in the history of mankind. This is what we intend to do."

Then why can't 1366 Technologies attract private financing? Perhaps because the schedule is unrealistic. Surely, the break ground date is pushed back since loan was only just now approved. So, how can wafers start shipping in December 2013?

It probably takes one year to build the plant. Then, three months to commence production. Of course, there is selling, delivery and finally collection of accounts receivable. That's bumping up against two years. The loan is interest-only for about two years. But 1366 still has to pay interest, so it will be under financial stress. This is very Solyndra-like.

Another Solyndra-type loan is POET LLC, in Emmetsburg, Iowa, which received $105 million to make cellulosic ethanol on September 23. Cellulosic ethanol, a fuel made from plant waste products, is still too costly to be commercially marketable.

Although cellulosic ethanol consumption is mandated by the 2007 Energy Independence and Security Act (250 million gallons in 2011, 500 million in 2012, gradually increasing to 16 billion gallons in 2022) no one has yet worked out how to make it in large enough quantities to make it cheap enough to succeed as a commercial source of energy.

The Energy Department has obviously not learned from the example of Range Fuels, a cellulosic ethanol plant in Soperton, Georgia. It closed in January 2011 after receiving $156 million in federal grants and loans in 2007 and 2008 from the Bush Administration, $6 million in grants from the State of Georgia, and $100 million from private investors. POET's prospects are similar.

Why is the government, under pressure from voters and rating agencies to reduce the budget deficit, issuing these loan guarantees at all?

The answer, we repeatedly hear, is fear of China, the new Red Scare. In the 1950s we were afraid that the Soviet Union might get ahead of us. "We will bury you," threatened Nikita Khrushchev.

Now we are throwing billions of dollars at renewable energy, electric cars, and high speed rail, projects that are too weak to attract private funding, because we're concerned that China is getting ahead of us and stealing our jobs.

On Monday, in a TV interview with ABC, President Obama said, "And what we always understood was that not every single business is going to succeed in clean energy, but if we want to compete with China, which is pouring hundreds of billions of dollars into this space, if we want to compete with other countries that are heavily subsidizing the industries of the future, we've got to make sure that our guys here in the United States of America at least have a shot."

Similarly, Brookings scholars Mark Muro and Jonathan Rothwell conclude in an article that loan guarantees are necessary because America is battling China for technological advantage in renewable energy.

And Jonathan Silver, Executive Director of the Loan Programs Office at the Energy Department, testified at a House Energy and Commerce subcommittee on September 14, "But no country has been as aggressive as China, which last year, alone, provided more than $30 billion in credit to the country's solar manufacturers through the government-controlled China Development Bank."

Surely we have descended to great depths as a nation when we have lost confidence in our own reason and instead can think of nothing better to do than mimic the actions of a commercial rival.

Despite substantial government investment and industrial policy, the Soviet Union is no more, and Russia's economy is collapsing. In the 1970s and 1980s we were worried that Japan, whose government poured money into cars and shipbuilding and high-definition TVs, would race past us. But Japan's growth has been slow for the past two decades.

If we are afraid of China's growth, domestic industrial policy is not the answer. Rather, we should improve economic growth through more efficient tax and regulatory policies. China is more to be feared with government loan guarantee programs than without, because they slow our economy and make it less efficient. America is more likely to best China without government help.

America grows when it relies on the strength of market forces, rather than when our government attempts to pick winners and losers. Loan guarantees are not a sign of confidence in markets but the exact opposite, and make no sense in these economic times, when corporations are flush with cash.

The reason that these renewable energy projects need to turn to the government for loan guarantees is painfully obvious. Their prospects are weak, and private investors and lenders would not fund the project otherwise. China and other countries might want to invest in projects that have no business case, but the American taxpayer deserves better. Much better.

Solyndra came to the attention of the American public at the end of August. Since then, the Department of Energy worked overtime to sign more loan guarantees that private investors and lenders are unlikely to make.

Some of the new Energy Department loans may actually be repaid. But others may not. Perhaps the administration can make money by organizing bets on which of its loans will go bad. Call it the Solyndra Derby.

Diana Furchtgott-Roth is a senior fellow at the Manhattan Institute.

2011-10-01T19:48:00.003-06:00

Does Obama ever really mean what he says? He asks for bipartisanship, but doesn't listen to anyone but Democrats.

Does Obama really want to create jobs? Mostly he seems to do everything he can to kill them.

Read on to find out what happens to Republican ideas.

Obama’s ‘Save My Job’ bill versus real jobs bills

By: Ron Arnold | 09/29/11 8:05 PM

By now, most of us have digested or discounted President Obama's jobs speech before a joint session of Congress three weeks ago: "You give me $447 billion more in taxpayer funds to spend on government subsidies and I'll give you a $240 billion payroll tax cut for employers and employees."

Even on that symbolic night, Obama's applause line, "Pass this bill," had degenerated by the 15th repetition into near-mania. It sounded more like, "Pass this Save My Job bill."

It still does. Obama's bumper sticker slogan has lived on in constant White House nagging at Congress, from speeches in Raleigh, N.C.; Richmond, Va.; and Cincinnati's decaying Brent Spence Bridge -- all in swing states he wants to win to get re-elected in 2012.

But Congress, even Harry Reid's Democrat-controlled Senate, is in no hurry to pass Obama's American Jobs Act -- October, maybe, once they figure out who's going to pay for all the pieces.

However, in his joint session speech, the president may have made a strategic blunder. After his all-drama-Obama histrionics, he closed by saying that he "would consider all good ideas."

Two Republicans took him up on it. Sen. John Barrasso (Wyoming) and Rep. Steve Pearce (N.M), respective chairmen of the Senate and Congressional Western Caucuses, gave him more than 40 good ideas.

They wrote a joint letter to the president and sent him their detailed "Jobs Frontiers" report with more than 40 bills "as a collection of ideas for your additional consideration."

The "Jobs Frontiers" bills weren't just ideas. They had already been introduced in one or both chambers of Congress with triggers for instant shovel-ready jobs, unlike Obama's bureaucrat-laden, grow-the-government, beyond-the-horizon loans and grants and hopes.

Barrasso and Pearce were determined that their good ideas would not dissolve into Obama's predictions of 13 million new jobs -- with two years of help from a Democrat-controlled House and Senate -- that instead lost 2.3 million jobs, and sent unemployment climbing from 7.8 percent to 9.1 percent.

The Jobs Frontier bills deliberately and defiantly cut bureaucratic red tape, proposed developing American energy on American soil, and sought right-now, boots-on jobs in the West and across the country.

Barrasso and Pearce gave Obama examples: "For instance, Mr. President, the Southeast Arizona Land Exchange and Conservation Act offered by Congressman Paul Gosar [R-Ariz.] would pave the way for a copper mine in Superior. Arizona, and immediately bring 1.400 new jobs to an area in desperate need. The San Joaquin Valley legislation offered by Congressman Devin Nunes [R-Calif.] would bring 25,000 to 30,000 jobs back to California."

The two caucus leaders patiently explained some of their other bills. "The three Outer-Continental Shelf bills offered by Congressman Hastings [R-Wash.] would create 250,000 short-term jobs and over 1.2 million jobs in the long term. The Domestic Jobs, Domestic Energy and Deficit Reduction Act offered by Senator David Vitter and Congressman Rob Bishop would create over 2 million jobs and $10 trillion in Gross Domestic Product at zero cost to the taxpayer."

The two lawmakers closed politely: "We take you at your word that you will consider all good proposals."

The letter and report appear to have submerged into the White House oblivion file.

It was predictable. The White House regularly takes action against specific industries with lots of jobs to kill: My tally of Obama targets and how many existing jobs need protecting: Oil and gas (9 million jobs); coal (550,000); hydropower (200-300,000); geothermal (13,000); meat production (6.2 million); forest products (900,000); hunting and fishing (1.1 million jobs).

My vote for worst Obama job killers goes to Interior Secretary Ken Salazar and Environmental Protection Agency head Lisa Jackson. I'm not pointing my finger at them, I'm just pointing to the door where they should march immediately, then out to the unemployment line with their countless victims.

Examiner Columnist Ron Arnold is executive vice president of the Center for the Defense of Free Enterprise.

2011-09-30T13:40:00.003-06:00

How do you say "payback?"

The Solyndra deal sure smells fishy on the part of the Obama administration!

Read CARE favorite Diana Furchtgott-Roth's research on the situation?

Solyndra and the Perils of Industrial Policy  

By Diana Furchtgott-Roth  

RealClearMarkets.com 

September 22, 2011.

There is no better proof of the risks of "green" industrial policy, or the misuse of "stimulus" funds, than the case of Solyndra, the California solar company. It declared bankruptcy this month after receiving a total of $535 million in federal loans.   

The tangled tale of Solyndra, a California company that thought it could make solar panels that turn sunshine into electricity and sell them profitably, ably illustrates the perils of "industrial policy," a shorthand phrase for the government's deciding which new industries or start-up companies to support with federal money or loan guarantees.   

Republican and Democratic administrations have endorsed so called "green" energy ventures/enterprises that promised to pursue renewable, noncarbon-based energy production or energy conservation. (By now, even the most casual observer has noticed that companies are eager to call themselves "green.")  

 President Obama, seeking to burnish his Administration's image as pro-environment, has made numerous visits to companies that tout themselves as "green."   

Solyndra received a $535 million loan from the Federal Financing Bank, guaranteed by the Energy Department under its loan guarantee program for innovative clean energy technologies.  

 The company, founded in 2005 and based in Fremont, California, had used $460 million of these loans by February 2011 to build a second factory, even though it still had excess capacity at its first plant.

With Solyndra's bankruptcy, the bulk of these funds are lost to taxpayers.   By January 2011, it was clear that the company was going to fail. Still, the Energy Department helped shore up Solyndra by allowing it to draw on another $68 million in government loans. In addition, according to Bloomberg, based on government reports, the administration allowed $385 million in government loans to take a back seat to $75 million in new investors' funds.   

This was done because the Energy Department thought that the January deal represented the highest net benefit for the taxpayer, according to government reports. The $75 million from investors became senior to all government debt except $143 million.   

The remaining $385 million in government loans, first issued in 2009, have equal status to $175 million in original investor funds, and can only be recuperated after the investors get back their $75 million and the government gets back its $143 million. This reduced the value of the $385 million by about a third, because the government would not get back all its money.   

Confidential emails published by the House Energy and Commerce Committee depict White House and Energy Department officials rushing to sign off on the project in 2009 so that Vice President Biden could appear at the Fremont plant in September 2009 to trumpet the administration's support for green jobs. President Obama visited Solyndra in May, 2010.  

Solyndra's bankruptcy has been attributed to factors beyond its control, such as falling prices for polysilicon products, such as solar panels, and lower costs and pricing in China. But documents filed with the Securities and Exchange Commission in September 2009, ahead of an initial public offering that was withdrawn in June 2010, show that the company was fully aware of all the risks.   Presumably the Energy Department was aware, also. This is the essence of industrial policy: the government takes on risk because it wants to encourage indigenous production of a new product.   

Here is some of the back story: Solyndra was founded in May 2005 to produce a less expensive alternative to solar panels. It manufactured panels consisting of forty cylinders coated with solar cells.   

A competing technology consisted of flat solar panels, made of polysilicon. Polysilicon was expensive, and, according to Solyndra, the panels were more costly to attach to the roof.   

By November 2008, Solyndra had raised $450 million from investors, and was applying for a loan guarantee from the Energy Department under the Energy Policy Act of 2005.  

 But the loan was turned down in January 2009, while the Bush administration still held office, on the grounds that "there is presently not an independent market study addressing long term prospects for this company" and "there is concern regarding the scale-up of production assumed in the plan for Fab 2," the second factory.  

 Lachlan Seward, director of the loan program at the Energy Department, wrote on January 13, 2009 that "after canvassing with the committee it was a unanimous decision not to engage with further discussions with Solyndra at this time."   

After President Obama took office days later, the tone changed. In a confidential email dated March 10, 2009 released by the Energy and Commerce Committee, a senior adviser to the Energy Secretary wrote, "The solar co board approved the terms of the loan guarantee last night, setting us up for the first loan guarantee conditional commitment for the president's visit to California on the 19th."   

As it turned out, Mr. Obama only came in 2010, and Vice President Biden came in 2009.   

Another official, presumably from the Office of Management and Budget, replied, "DOE is trying to deliver the first loan guarantee within 60 days from inauguration (the prior administration could not get it done in four years). This deal is NOT [sic] ready for prime time."   

Concerns were still apparent later that summer, on August 19, 2009. An official, name blacked out, wrote presciently, "While debt coverage is robust under stress conditions, the project cash balance goes to $62,000 in September 2011. Under the assumption that a small amount of cash is tied up in working capital, the project will face a funding shortfall. Even one day of [missed] A/R results in a negative cash balance, for example."   

Yet, the administration pushed ahead, planning for a presidential or vice presidential visit.   

As of August 27, the loan was not approved. An Energy Department official wrote, "Can you confirm whether there are any issues regarding a closing on Sept. 3 for a Sept. 4 VP event on Solyndra?"   

On August 31, 2009 an unidentified OMB official wrote to Terrell McSweeny, domestic policy adviser to Mr. Biden, saying "We have ended up in the situation of having to do rushed approvals on a couple of occasions (and we are worried about Solyndra at the end of this week.) We would prefer to have sufficient time to do our due diligence reviews and have the approval set the date for the announcement rather than the other way around."   

The loan was approved on September 3 and Mr. Biden announced it via satellite at Solyndra's plant on September 4.   

Fast forward to January 2011, when Solyndra's cylindrical panels were not competitive. The price of the polysilicon used by its rivals on their flat panels, the product competing with Solyndra, had fallen from about $375 a kilogram in 2009 to around $60, making flat panels far more attractive. First Solar, a U.S. maker of flat panels, could generate solar power for 75 cents a watt, compared to $4 for Solyndra.  

Still, when Solyndra came calling, the Energy Department insisted on throwing good money after bad, to the frustration of an unnamed OMB official. He wrote, on January 31, 2011, "If Solyndra defaults down the road, the optics will be arguably worse later than they would be today." [sic] He added that the public might understand one mistake, due to the complexity of dealing with innovative companies, but not two mistakes.   

Despite the government's rescue effort in February, 2011, Solyndra filed for bankruptcy in September 2011.

 It was not as though Solyndra's problems were a secret. On May 27, 2010, in trade journal GigaOM, reporter Katie Fehrenbacher suggested that the Energy Department guarantee for Solyndra was a mistake. She wrote that Solyndra's manufacturing and capital costs far exceed those of its rivals, and that its technology was uncompetitive.  

 PricewaterhouseCoopers, Solyndra's auditors, also expressed public concern about the company. The combination of its deficit, operating losses, and negative cash flow raised doubts as to its viability.   

And Solyndra itself, in a public S-1 filing at the S.E.C. in September 2009, dutifully offered 22 pages of reasons why it might fail. In case anyone missed the point, the report included a table of historical financial and operating data from 2006 to 2009, showing six different measures of gross and net losses. Not one positive number.   

Why did the government pour more funds into Solyndra, and accept a subordinate status on the loan? Could it be because one of President Obama's campaign contributors, George Kaiser, was a major investor in Solyndra through Argonaut Private Equity? Mr. Kaiser raised between $50,000 and $100,000 in donations for the president, and donated over $50,000, split between the Democratic Senatorial Campaign Committee and Obama for America, according to campaign records.  

Solyndra shows that the government should not try to pick industrial winners. The temptation for politics to trump sound judgment and waste millions in taxpayer money is always there.   

Diana Furchtgott-Roth is a senior fellow at the Manhattan Institute. 

Cronyism, politics as usual, taxpayer subsidies.

2011-09-26T20:37:00.003-06:00

When will Americans wake up and not let OUR government continue to spend OUR money on frivolous "green" technologies that cannot pay their way? Does no one learn from last month, much less last year?

Let CARE favorite Paul Driessen and John Nichols enlighten you and give you a call to action!

Delaware’s very own Solyndra

Will Delaware and US citizens get stuck with a Bloom Energy fuel cell boondoggle?

Paul Driessen and John Nichols

Delaware’s political establishment thinks First State electricity consumers should subsidize the manufacturing of super-sized fuel cells, under the auspices of California-based Bloom Energy, to replace natural gas and coal-fired power plants in generating electricity.

The politicos want to build a factory in Newark, where rail service is available to ship Bloom’s 10-ton, 100-kilowatt, “eco-friendly” Energy Servers to presumed eager buyers across America.

Bloom claims its “revolutionary new design” and “breakthroughs in materials science” make its new solid oxide fuel cell (SOFC) technology “clean, reliable and affordable.” Governor Jack Markell, Department of Natural Resources Secretary Colin O’Mara, Department of Economic Development Secretary Alan Levin and assorted legislators insist their plan will create jobs and put Delaware at the forefront of the Green Revolution.

If that’s the case, and if Bloom had a viable business plan, investors would be clamoring to get in on the action. There would be no need to stick Delaware ratepayers with a bloomin’ tariff (“green premium”) that will add at least $600,000,000 to household and business electricity bills over the next 20 years – above what they would pay for electricity generated by combined cycle natural gas plants. There would be no need for the Economic Development Department to contribute another $16,000,000 in startup costs.

Actually, the green premium could be much higher – based on a 2016 “levelized cost” of $215 per megawatt hour for the fuel cell tariff versus $66 for combined-cycle natural gas generators. The $149 difference times 5,200,000 MWh from fuel cells is $774,800,000!

Tariff proponents will likely argue that this cost must be reduced by $426,000,000 in renewable energy certificates (ie, energy taxes) that Delmarva Power is required to purchase under Delaware’s Renewable Portfolio Standards Act. However, this just means the same families and businesses must pay the bill in two ways: as taxpayers and as electricity ratepayers.

In other words, Free State families and businesses will be “free” to pay an extra $600,000,000 to $775,000,000 in any combination of taxes and tariffs they “choose” – for the “privilege” of being able to say part of their electricity comes in a greed or greenbacks shade of green.

Those higher electricity costs translate into higher prices for goods and services. They pull money out of productive sectors of the economy and transfer it to politically connected operators and campaign contributors. In the process, they destroy traditional jobs – as they did in Spain and Scotland, where overpriced “green” energy killed 2.2 to 3.7 jobs for every “green job” created.

Bloom also expects to receive a substantial US Department of Energy grant, if it can get swift approval of the Delaware tariff. That federal grant will come from borrowed money, in the midst of an economic and budgetary crisis, and in the wake of scandalous green energy bankruptcies.

This crony capitalism means Bloom Energy gets risk-free cash, so that it can proceed with an initial public stock offering. As a privately held company, it gets to keep its finances a secret, even as it gets millions in taxpayer aid, with little or no transparency or due diligence in assessing the financial arrangements. That means US and Delaware taxpayers are forced to take another big risk, while families and businesses must pay well above market rates for electricity.

This sweetheart deal is shocking in its audacity. But then, as Green Tech Media reports, “Bloom plays the subsidy game like a pro, receiving more than $218 million in subsidies in 2010 from California’s [Self Generation Incentive Program].” It gets worse.

This time around, Bloom persuaded the Delaware legislature to enact a special provision. If any future legislature ever modifies the Bloom tariff, the company will receive a lump-sum payment of the entire 20-year tariff, which Delmarva Power meantime will tack onto all ratepayers’ utility bills. Without this guarantee, Bloom would have a hard time peddling its IPO.

It’s equally amazing that Bloom can even qualify for renewable energy subsidies. For that it can thank the Delaware legislature, which adopted Markell and O’Mara’s expanded definition of renewable energy, to include Bloom’s natural gas-fueled SOFC Energy Servers.

They pulled this off by enabling only Bloom fuel cells to qualify under the Renewable Portfolio Standard, originally intended for wind and solar facilities, by claiming Bloom’s equipment “could” run on biofuels, like methane from cows or landfills. It never will, but it “could.”

As to being clean and green, Bloom’s Energy Severs require substantial amounts of rare earth elements, like yttrium and cerium. Prices are soaring – by 500-2000% over the past twelve months, according to a recent General Electric report. The United States imports 100% of all the rare earths it uses in countless energy, military, electronics and other applications, with 97% coming from China.

Now the Chinese have restricted rare earth exports, and sell mostly finished products, often using our technology. Worst, the rare earths are mined, processed and turned into these products under health and environmental conditions that severely damage farmland, wildlife habitats, miners and factory workers.

With the shale gas revolution driving natural gas prices down, there should be no need for fuel cells to replace gas-burning generators. With China and India building new coal-fired power plants every week, and emitting far more carbon dioxide than all our job-killing regulations and climate change initiatives can ever offset, even diehards like Al Gore cannot justify Bloom’s systems on global warming grounds.

Then there is Solyndra. One would think that scandalous debacle – $535 million in taxpayer cash blown in two years, and Solyndra executives now pleading Fifth Amendment rights against self-incrimination – would ensure at least a modicum of sanity, honesty, transparency, accountability, and reluctance to use more taxpayer and consumer dollars to benefit special interests. Apparently not, at least in Delaware and the US Energy Department.

On September 27-29, the Delaware Public Service Commission will conduct public comment sessions on Bloom Energy’s application for special treatment and subsidies. Every American who cares about our economy and unemployment, every citizen who is disgusted with our wasteful, crony-capitalist, bureaucrats-pick-losers system, can send comments to kevin.neilson@state.de.us and then let their elected officials know enough is enough.

That may help inoculate America against the risk of the California and Delaware “green disease” becoming an uncontrollable national Contagion. We need to stop these costly bloom-doggles!

______________

Paul Driessen is senior policy advisor for the Committee For A Constructive Tomorrow. John Nichols is a financial consultant and citizen activist in Delaware.