Tag Archives: Global Warming

Fracking Fantasies

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Environmentalists have taken aim at a common natural gas extraction technique called Hydraulic Fracturing, or Fracking. The enviros claim that Fracking will contaminate ground water or even cause earthquakes because it involves injecting water, sand, and some chemicals into bedrock to increase natural gas supplies. Not only are these claims specious (Fracking occurs well below the water table), the enviros are revisiting a long history of hypocrisy since the only way to obtain their renewable energy goal is through Fracking.

States like Wyoming and Texas are now requiring thorough disclosure of Fracking chemicals. France has banned the practice outright. Agitprop movies like Gasland seek to demonize the technology that has turned an expensive, price volatile commodity into a near limitless resource. Even if everything the enviros say about Fracking is true, they still want the US to shift toward natural gas for most of its energy needs, and that requires Fracking. As usual, the enviro dirty laundry is showing.

At least 23 states have renewable energy laws that purport to require 15% to 30% of all electricity to come from renewable energy sources. But wind power provides less than 2% of the nation’s electricity and solar nearly zero. How do these states hope to go from 2% to 30%? The answer is a political sleight of hand called the Renewable Portfolio Standard, or RPS. A RPS does not actually require a massive and impractical investment in solar and wind generation, it requires the overall CO2 emissions of a utility to mirror a hypothetical portfolio of renewable energy sources (assuming such technologies actually worked as advertised).

A RPS solution usually contains a token amount of wind and solar credits, along with advertising encouraging consumers to conserve, but the bulk of the results come from replacing coal plants with natural gas turbines. The unadvertised reality of a RPS is that it is nothing more than shifting from coal to natural gas. Renewable energy? Hardly, but natural gas contains hydrogen atoms that when burned release H2O, not CO2. By its nature, natural gas releases less CO2 per unit of energy, so the bottom line of replacing coal with natural gas resembles an investment in renewable energy. Also, natural gas turbines produce fewer secondary pollutants than coal, a nice plus given the EPA’s regulations regarding mercury and particulates.

So, renewable energy has next to nothing to do with wind and solar and is mostly replacing coal with natural gas. What is the problem? Well, prior to Fracking, natural gas was a limited and expensive commodity with a highly volatile price. Shifting electricity generation to natural gas would more than double the price of powering people’s homes. The only way to achieve a RPS is to ensure a vast and stable supply of natural gas, and currently Fracking is the only practical way to do that.

The same enviros that demanded the shift from coal want to shut down domestic natural gas production. The old line about conservation, living simply, and other collectivist garbage cannot withstand the fact that the US economy needs energy to function. Be it coal or natural gas, something must be extracted from the ground, and it must be burned. But enviros do not care about reality because they are never held accountable for their positions; they are just ‘for the planet,’ not for regular people powering their homes. The Old Time Media will never point out the enviro hypocrisy of both demanding more natural gas energy and outlawing its production, but the enviro’s Fracking fantasy seeks to hobble the US way of life nonetheless.

Renewable Scam II

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In February, Shout Bits exposed the fraud in Colorado’s renewable energy mandate law. The law was deceptive in that it purported to mandate 30% of the State’s electricity come from renewable sources. In reality, it shifts much of Colorado’s electricity from coal to more expensive and unpredictable natural gas. The law was fraudulent because it promised that utility rates would not go up more than 2%. No serious person believed the transition from cheap and stable coal to other energy sources costing 2 to 10 times as much would not raise their rates.

Reality hit today in a Denver Business Journal
report showing Denver residential electricity prices have exploded 21.4% in the past twelve months. Coal prices have remained stable, and natural gas prices have actually fallen 6.2%, so the only cause for the outrageous increase is the mandated switch to renewables and other green policies designed to punish energy consumption.

The left leaning newspapers in Denver won’t report on the cost to homeowners, only on the illusory ‘green’ jobs created by this huge new tax on homeowners. Colorado voters should consider the real cost of Gov. Ritter’s ‘green’ economy – higher prices, lost jobs, and a state in decline.

Corporations Are Not Nice People

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This week five corporations, including BP and ConocoPhillips, dropped out of the US Climate Action Partnership (a.k.a. USCAP, with an emphasis on the ‘CAP’) an industry lobbyist group that sought to mollify the most aggressive instincts of ‘green’ and government organizations while at the same time advance the environmentalist agenda. USCAP’s membership is chock full of corporations that will not benefit from cap and trade laws, yet they lobbied for them. One might assume that five brave corporations saw that global warming is more political than science based, and they made a principled stand by dropping out of USCAP. The real reason is more pedestrian, and a little sad. Why these companies joined and subsequently left USCAP goes a long way to explain the psyche of corporations.

USCAP is based on the strategy of ‘being at the table so as not to be on the menu.’ Big corporations are easy targets for opportunistic politicians – consider Pres. Obama’s relentless bashing of Wall Street ‘fat cats,’ or the Senate’s grandstanding over cigarette companies’ unhealthy products, or Sen. Hatch’s obsession with punishing Microsoft. Obviously BP has no interest in fossil fuel taxes, and Phillip Morris doesn’t really favor punitive cigarette taxes, but they, and countless other corporations play USCAP’s game because it is better than the alternative – the complete routing and destruction of shareholder value that Microsoft suffered as punishment for standing up to the Government.

Big Corporations ‘sit at the table’ with their enemies for another reason: to stifle competition. The Byzantine red tape that Washington imposes on the free market is easily navigated by multi-billion dollar corporations, but not so by their smaller competitors. The costs of complying with regulations that clog every aspect of the business world disproportionately fall on the shoulders of small businesses and entrepreneurs. For example, Mattel lobbied for a new law that, while imposing some product testing expenses on themselves, effectively outlawed independent toy manufacturers. Mattel even managed to make selling used toys at garage sales practically impossible. The law created and entrenched an oligopoly of big toy manufacturers; not bad for a day’s work in Washington.

Similarly, back when a socialized health care bill seemed inevitable, Wal-Mart came out and supported Obamacare. Why would Wal-Mart, the nation’s largest employer, want the burden of insuring all of its employees? Wal-Mart knew that it had the economies of scale to pay the very least for its insurance, and it owns its own Pharmacies to boot. Of all the employers hit by Obamcare’s mandates, Wal-Mart is best equipped to cope. Wal-Mart didn’t care about people so much as it wanted to suppress its competitors.

Likewise, USCAP’s mission is not to benefit its members by reducing their costs, but to harm smaller competitors more by raising their relative costs. From the formation of AT&T over a century ago, , to blue laws, to the Chamber of Commerce’s statist tolerance of government, regulation always evolves into an incumbent protection racket. The only losers are entrepreneurs and consumers.

Why the USCAP defections? USCAP is falling apart because the Obama agenda is falling apart. Cap and trade is dead with little hope for revival. USCAP’s mission of mitigating cap and trade’s damage to its well-heeled members no longer matters, so its members are dropping off. There was no change of moral compass here, just political calculus.

Similarly, with the implosion of Obamacare, PhRMA recently dumped its CEO, Rep. Billy Tauzin. PhRMA had the same mission as USCAP, but with regard to Obamacare – craft a bill that harms its members less than their competitors. Why continue to pay a Washington big-wig when the issue is comatose and ready for the morgue? Tauzin’s connections and moral flexibility are no longer needed.

Why are companies, especially the larger ones, so spineless on issues that are critical to very existence of the US? Why are corporations so greedy, feckless, and sometimes even evil? Simply because it suits their short term interests. Leftists want to believe that corporations should be good corporate citizens, but it is not in their nature. Corporations will always pursue politics as a way to benefit shareholder value.

Despite the evil corporations sometimes do, there remains no better engine for the betterment of people. The NYSE’s $16.3 trillion market capitalization proves that the corporate structure is the best way to generate wealth and improve everyone’s quality of life. In other words, the corporation is a wonderful source of good, but corporations are sometimes evil. Political opportunists in Washington set up corporate excesses as a straw man to hobble the corporate system and dole out their expensive favors.

Nobody should count on Corporate America to consistently support the cause of capitalism and freedom. The Supreme Court rightly ruled that corporations have the right to political speech, but that does not mean that informed voters should always listen, because corporations are at best a weak ally in the cause of liberty.