As of Sunday, Jan. 2, 2011, the Obama administration is officially regulating greenhouse gas emissions under the Clean Air Act. The White House is under pressure to fulfill its pledge to tackle climate change while avoiding the appearance that it's hindering job growth. What that means immediately is that new and upgraded industrial facilities like power plants and refineries will be forced to install technologies to curb their greenhouse gas emissions.
At first, the greenhouse gas rules will only apply to new and modified plants that would already trigger control requirements based on their emissions of other pollutants regulated by EPA, like soot or smog. Starting in July, large plants will fall under EPA's rules based only on their greenhouse gas output. EPA says phasing in those rules will allow states and other permitting authorities to get used to the process.
The agency is also planning to take over greenhouse gas permitting indefinitely in Texas, where state officials have staunchly refused to get in line with the Obama administration's climate policy. While some states say they are expecting no trouble, industry officials have warned that long delays could occur as authorities work to issue greenhouse gas permits for the first time and as opponents of new projects challenge the emission control requirements in court.
Saturday, January 1, 2011
It's Heeeere! Greenhouse Gas Regulation Begins!
Tuesday, December 29, 2009
Cap and Trade to Convert 14.5% of Cropland Into Forest
Agriculture Secretary Tom Vilsack has ordered his staff to revise a computerized forecasting model that showed that climate legislation supported by President Obama would make planting trees more lucrative than producing food.
The latest Agriculture Department economic-impact study of the climate bill, which passed the House this summer, found that the legislation would profit farmers in the long term. But those profits would come mostly from higher crop prices as a result of the legislation's incentives to plant more forests and thus reduce the amount of land devoted to food-producing agriculture.
According to the economic model used by the department and the Environmental Protection Agency, the legislation would give landowners incentives to convert up to 59 million acres of farmland into forests over the next 40 years. The reason: Trees clean the air of heat-trapping gases better than farming does.
Mr. Vilsack, in a little-noticed statement issued with the report earlier this month, said the department's forecasts "have caused considerable concern" among farmers and ranchers.
"If landowners plant trees to the extent the model suggests, this would be disruptive to agriculture in some regions of the country," he said.
He said the Forest and Agricultural Sector Optimization Model (FASOM), created by researchers at Texas A&M University, does not take into account other provisions in the House-passed bill, which would boost farmers' income while they continue to produce food. Those omissions, he said, cause the model to overestimate the potential for increased forest planting.
Mr. Vilsack said he has directed his chief economist to work with the EPA to "undertake a review of the assumptions in the FASOM model, to update the model and to develop options on how best to avoid unintended consequences for agriculture that might result from climate change legislation."
The legislation would give free emissions credits, known as offsets, to farmers and landowners who plant forests and adopt low-carbon farm and ranching practices. Farmers and ranchers could sell the credits to help major emitters of greenhouse gases comply with the legislation. That revenue would help the farmers deal with an expected rise in fuel and fertilizer costs.
But the economic forecast predicts that nearly 80 percent of the offsets would be earned through the planting of trees, mostly in the Midwest, the South and the Plains states.
The American Farm Bureau Federation and some farm-state Republican lawmakers have complained that the offsets program would push landowners to plant trees and terminate their leases with farmers.
The model projects that reduced farm production will cause food prices to rise by 4.5 percent by 2050 compared with a scenario in which no legislation is passed, the department found.
A department spokesman declined to comment about how quickly the review would take place or whether Mr. Vilsack would revise the department's economic-impact projections.
The Senate has not taken action on climate legislation, although the Senate Environment and Public Works Committee passed a bill similar to the House's last month. That measure did not include agriculture provisions.
Sen. Blanche Lincoln, Arkansas Democrat and chairman of the Agriculture, Nutrition and Forestry Committee, has said she will hold hearings on climate provisions but has not indicated when those will take place.
The ranking Republican on the committee, Sen. Saxby Chambliss of Georgia, and his counterpart on the House Agriculture Committee, ranking Republican Rep. Frank D. Lucas of Oklahoma, wrote to Mr. Vilsack and EPA Administrator Lisa P. Jackson earlier this month to ask for new economic analyses of the House and Senate bills.
"EPA's analysis was often cited during debate in the House of Representatives and the study had a great impact on the final vote. If there was a flaw in the analysis, then it would be prudent to correct the model and perform a more current and complete analysis on both [bills]," they wrote.
In a statement, the EPA said: "EPA looks forward to working with USDA and the designer of this particular computer model to continue improving the analytical tools that all of [us] use to predict the ways that different climate policies would affect agriculture."
Allison Specht, an economist at the American Farm Bureau Federation, said other studies have largely confirmed the results of the EPA and Agriculture Department analysis.
"That's one of the realities of cap-and-trade legislation. The biggest bang for your buck for carbon credits is planting trees," she said.
Monday, October 26, 2009
Cap and Trade to Devastate Farms, Food Production
Tuesday, October 6, 2009
Corporations: "We Want Cap and Trade -- NOW!"
Friday, September 25, 2009
It's OK to File Frivolous Lawsuits Over Global Warming
NEW YORK—The 2nd U.S. Circuit Court of Appeals in New York has ruled that five of the largest U.S. coal-burning electric utilities can be sued under the federal common law of “nuisance” for their alleged contribution to global warming.
A two-judge panel of the 2nd Circuit held that a lower court erred in dismissing the complaints on political question grounds, that all of the plaintiffs have standing to bring their claims and that the federal nuisance common law governs their claims.
The Monday decision, which overturned and remanded a judgment by the U.S. District Court for the Southern District of New York in State of Connecticut et al. vs. American Electric Power Co. et al., effectively paves the way for other lawsuits against utilities alleging nuisance from carbon dioxide emissions, environmental attorneys say.
Cap and Trade Will Cost Good-Paying Jobs
The cost of a national cap-and-trade system is good paying manufacturing jobs in rural America. This is according to a recent study from Charles River Associates International (CRA) and The Fertilizer Institute.
The study highlights the estimated economic contributions of the U.S. fertilizer manufacturing industry in 2006. It also explains how a national cap-and-trade system, as envisioned in the Waxman-Markey bill (H.R. 2454), will jeopardize the domestic fertilizer industry, which is critical for food production, food security, and a healthy U.S. economy.
Ranking Member Frank Lucas recently visited one fertilizer plant in his Oklahoma district to emphasize the real risk of losing American jobs if the Waxman-Markey bill becomes law. Koch Nitrogen Company, LLC in Enid Oklahoma employs roughly 100 people plus numerous contractors. These jobs have an average compensation of $76,000, which is almost 80 percent greater than the U.S. average compensation across all industries. A national cap-and-trade system could force this plant to close because it would drive up the price of natural gas, which is critical for fertilizer production.
Highlights of the economic contributions of the U.S. fertilizer manufacturing industry:
- The U.S. fertilizer industry directly employs more than 24,800 people to produce $15.1 billion in output.
- The total economic contribution of the industry was $57.8 billion. The total number of jobs provided was 244,500.
- These jobs had an average compensation of $76,000, which was almost 80 percent greater than the U.S. average compensation across all industries.
- The purchase of materials and services to support fertilizer manufacturing led to an additional 73,000 jobs along the supply chain.
- Farmers must have fertilizers in order to continue to produce a stable food supply. Commercial fertilizer nutrients are currently responsible for 40 to 60 percent of the world's food supply.
- During the last decade, 26 U.S. ammonia plants have closed primarily due to high natural gas prices.
- High natural gas prices have already raised the fertilizer costs for farmers, which has been a major factor in the rapidly rising production costs in agriculture.
- Currently, the U.S. imports approximately 85 percent of potash and 55 percent of the nation's nitrogen needs. Of these imports, 83 percent comes from countries without a cap and trade regime in place to regulate carbon.
- Under H.R. 2454, the price of natural gas is expected to increase dramatically. Every $3 increase in the price of natural gas adds more than $1 billion to the cost of nitrogen production.
- Such increases in the cost of production will put this American industry at a competitive disadvantage with other countries, which do not have a cap-and-trade system in place.
U.S. producers will face the choice of losing market share to imports or moving production overseas.
Wednesday, September 16, 2009
Cap and Trade Equivalent to 15% Income Tax Increase
from CBS News:
The Obama administration has privately concluded that a cap and trade law would cost American taxpayers up to $200 billion a year, the equivalent of hiking personal income taxes by about 15 percent.
A previously unreleased analysis prepared by the U.S. Department of Treasury says the total in new taxes would be between $100 billion to $200 billion a year. At the upper end of the administration's estimate, the cost per American household would be an extra $1,761 a year.
A second memorandum, which was prepared for Obama's transition team after the November election, says this about climate change policies: "Economic costs will likely be on the order of 1 percent of GDP, making them equal in scale to all existing environmental regulation."
The documents (PDF) were obtained under the Freedom of Information Act by the free-market Competitive Enterprise Institute and released on Tuesday.
These disclosures will probably not aid the political prospects of the Democrats' cap and trade bill. The House of Representatives approved it by a remarkably narrow margin in June -- the bill would have failed if only six House members had switched their votes to "no" -- and it faces significant opposition in the Senate.
One reason the bill faces an uncertain future is concern about its cost. House Republican Leader John Boehner has estimated the additional tax bill would be at $366 billion a year, or $3,100 a year per family. Democrats have pointed to estimates from MIT's John Reilly, who put the cost at $800 a year per family, and noted that tax credits to low income households could offset part of the bite. The Heritage Foundation says that, by 2035, "the typical family of four will see its direct energy costs rise by over $1,500 per year."
One difference is that while Heritage's numbers are talking about 26 years in the future, the Treasury Department's figures don't have a time limit.
"Heritage is saying publicly what the administration is saying to itself privately," says Christopher Horner, a senior fellow at the Competitive Enterprise Institute who filed the FOIA request. "It's nice to see they're not spinning each other behind closed doors."
"They're not telling you the cost -- they're not telling you the benefit," says Horner, who wrote the Politically Incorrect Guide to Global Warming. "If they don't tell you the cost, and they don't tell you the benefit, what are they telling you? They're just talking about global salvation."
The FOIA'd document written by Judson Jaffe, who joined the Treasury Department's Office of Environment and Energy in January 2009, says: "Given the administration's proposal to auction all emission allowances, a cap-and-trade program could generate federal receipts on the order of $100 to $200 billion annually." (Obviously, any final cap-and-trade system may be different from what Obama had proposed, and could yield higher or lower taxes.)
Because personal income tax revenues bring in around $1.37 trillion a year, a $200 billion additional tax would be the equivalent of a 15 percent increase a year. A $100 billion additional tax would represent a 7 or 8 percent increase a year.
One odd point: The document written by Jaffee includes this line: "It will raise energy prices and impose annual costs on the order of XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX." The Treasury Department redacted the rest of the sentence with a thick black line.
The Freedom of Information Act, of course, contains no this-might-embarrass-the-president exemption. You'd hope the presidential administration that boasts of being the "most open and transparent in history" would be more forthcoming than this.
Monday, August 24, 2009
Cap and Trade - Capitalism's Nemesis
from Washington Times:
President Obama is the most radical leader in U.S. history. Much of the public is focused on his ambitious plan to nationalize health care. The more they hear about it, the less they like it. Hence, Mr. Obama's poll numbers are dropping like a stone.
Yet his environmentalist agenda is just as dangerous. If passed, it will destroy America's free-market system. Like most liberal elitists, Mr. Obama is an incremental socialist. He does not believe in revolutionary change through blood and iron -- as did Soviet dictator Josef Stalin or Cuban despot Fidel Castro. Rather, Mr. Obama champions evolutionary socialism: the state's gradual takeover of key sectors of private industry. He is anti-capitalist and pro-big-government.
His cap-and-trade initiative seeks to severely limit carbon-dioxide emissions. Every business involved in carbon emissions would be required to purchase permits from the government. Over time, emissions allowed would be curbed, making the permits increasingly valuable -- and expensive. Companies would be allowed to trade or sell them on the open market.
Cap-and-trade would impose huge costs on the economy and undermine job creation. Moreover, it would transform America into an impoverished socialist superstate. It would create a new ruling class that would oversee economic development, forcing an eco-friendly lifestyle on every resident.
The House of Representatives already has passed the draconian legislation. It faces an uphill fight in the Senate. However, if Mr. Obama gets his way on health care reform, that may generate unstoppable momentum for his environmental package.
The carbon-trading scheme is built on the myth of man-made global warming. It is not based on sound science, but leftist ideology.
To compel Americans to accept a massive expansion of government power and tax increases, the left has resorted to a campaign of fear and hysteria: Global-warming theory claims carbon-dioxide emissions cause a "greenhouse" atmospheric effect, leading to rising Earth temperatures. The result, it says, will be a global catastrophe of biblical proportions -- the melting of ice caps, rising sea levels, the flooding of entire islands and coastal cities, droughts, economic devastation, mass starvation and death.
Yet leading scientists from around the world have debunked the theory of human-caused global warming. Environmentalists cannot answer a basic question: Why is it that for centuries the Earth's temperature has ticked slightly up and down, constantly repeating the same cycle even before the emergence of the Industrial Revolution? Therefore, curtailing the use of fossil fuels -- oil, coal and natural gas -- would not stop climate change.
It would, however, dramatically erode our standard of living. In a rare, candid moment during the 2008 election campaign, Mr. Obama admitted his goal was to scale back Americans' consumption, including driving big cars, using air conditioning and eating cheeseburgers: He wants to reduce our prosperity.
"We can't drive our SUVs, and eat whatever we want, and keep our homes at 72 [degrees] all the time, whether we live in the desert or the tundra, and keep consuming 25 percent of the world's resources with just 4 percent of the world's population, and expect the rest of the world to say 'You just go ahead. We'll be fine.' That's not leadership. That's not going to happen."
By the administration's own estimates, cap-and-trade would cost taxpayers at least $645 billion. Other estimates say the burden would be threefold higher. This would cost every American $2,100 to $6,300.
Carbon-trading is a large indirect tax on businesses, forcing them to purchase expensive emissions permits. The policy would increase the price of gas, oil and electricity to encourage consumers to use alternative energy sources. This would mean higher prices at the pump, soaring heating bills and rising food costs. Mr. Obama and liberal Democrats want Americans to consume less electricity (mostly produced by coal, oil and natural gas). The result of this would be less use of computers, iPods, microwaves, cell phones, washers and dryers, dishwashers, air conditioners and refrigerators -- the very conveniences of modern life.
For years, the left has railed against the military-industrial complex. Yet cap-and-trade is an integral part of what environmentalist skeptic Bjorn Lomborg calls the "green-industrial complex" -- the unholy alliance of the powerful green lobby, special business interests, scientific research and government policy. Billions of dollars are to be made in selling and trading carbon permits. And everyone -- from Al Gore to George Soros to now-bankrupt Lehman Brothers Holdings Inc. -- wants a slice of the action.
Environmentalism has very little to do with protecting the environment. It is green socialism. Its objective is to achieve what red communism couldn't: the conquest of capitalism. Instead of central planning and a command economy, we would have a highly regulated, highly taxed bureaucratic corporatism that would stifle economic growth and individual initiative.
Beginning in the 19th century, much of the Western intelligentsia lost faith in God. The 20th century saw numerous attempts - Marxism, fascism, national socialism -- to construct a society without God. They failed. Now the West's liberal elites are seeking to infuse the radical secular project with new meaning and purpose -- man's salvation through the worship of Gaea, Mother Earth.
The green movement is a form of pantheism. It hopes to sacrifice prosperity, abundance and wealth at the altar of a false god.
Mr. Obama is its prophet of doom. And America is its victim.
Jeffrey T. Kuhner is a columnist at The Washington Times and president of the Edmund Burke Institute, a Washington-based think tank.
Thursday, August 13, 2009
Impact Of Cap and Trade
report from the National Association of Manufacturers:
U.S. jobs decline by 1.8 million under the low cost case and by 2.4 million under the high cost case. The primary cause of job losses is lower industrial output due to higher energy prices, the high cost of complying with required emissions cuts, and greater competition from overseas manufacturers with lower energy costs...
By 2020 gasoline would increase between 8.4% and 11.1%, electricity between 5% and
7.9%. By 2030, gasoline prices increase between 20% and 26.1%, natural gas by 56.3% and 73.5% while electricity prices increase by up to 50%. Table 1 shows the increase in
energy prices faced by a typical household compared over the 2020-2030 period...
the primary impact would fall on the electric sector. W/M would result in the electric industry shutting down most carbon-based generation and/or using expensive, as yet
unproven technology, to capture and store CO2. To meetthe stringent goals of W/M, the electric industry would also have to substitute high cost technologies, such as biomass
and wind, for conventional generation.
Thursday, August 6, 2009
The Global Warming Borg
from my post on Marketwatch in reply to someone who suggested that Patriotic people don't believe in science:
We believe in science, just not the made-to-order JUNK science that Al "Chicken Little" Gore and the Global Warming Borg dole out! "Cluck, cluck! The climate sky is falling!" "You WILL comply!" "Resistance is FUTILE!" Global Warming is a religion now imposing a new tyrannical Inquisition on the world!
The Global Warming agenda is about money and power, not climate preservation or science! That's why Cap and Trade does NOTHING to reduce temperatures or carbon emissions, but imposes all sorts of new taxes and crushing regulation on everyone. It's amazing that there are so many people willing to give up their freedom for counterfeit pseudo-science! It will increase the cost of everything -- even food!
Global Warming is the "earth-is-flatism" du jour! Here today and disproven and forgotten tomorrow. How many scientific "certainties" have found their way into the trash heap of history in our lifetimes? There is just as much science -- and even more scientists -- debunking Global Warming! Of course, since their minds are shut and already made up, Al's goons and the Global Warming Borg ignore all that -- a truly inconvenient truth!
I seems hard to believe that the same people that can't consistently forecast the local weather more than 2 days from now also want us to believe that they can forecast the climate for the entire PLANET several decades from now. We believe in science! We're just not gullible enough to believe the Borg!
Thursday, July 30, 2009
Cap and Trade Is A "Pig In a Poke"
from Arlan Suderman tweet:
Cap and trade looks like pig in poke. No one, not even USDA has idea of what it will do to food supply.
from Dictionary.com:
pig in a poke: Something that is offered in a manner that conceals its true nature or value.
Friday, July 24, 2009
Grains Give Up Gains Into Weekend
Arlan Suderman tweet:
Prices pulling back ahead of the weekend after large short-covering gains on Thursday. Dynamics largely the same tho. Beans strongest.And that's and understatement! I'm glad for this however, because this will allow me to position a new trade at a better price next week. It appears that grains have finally broken the link to the broader financial markets. While stocks have been skyrocketing, grains have remained in the doldrums for the past few weeks.
Arlan has also mentioned that traders are afraid of new regulations on the futures markets, and this is suppressing prices temporarily. Eventually, however, it will reduce the liquidity pool and make prices both more erratic and will move prices higher. It will also likely lead to shortages, as Arlan has indicated in my previous posts. He says that the cost basis for grains is increasing, especially if Cap and Trade passes, and farmers are planning to reduce production to maintain price levels.
Wednesday, July 22, 2009
Cost of Cap and Trade on Food
twitter from Arlan Suderman:
AFBF analysis, #farm input costs could incr $33-$78/A corn;$8-$20/A soy;$24-$48/A cotton; & $38 - $153/A rice. Cap/Trade
Tuesday, July 21, 2009
Cap and Trade to Hit Agriculture Hard
from the McCook Daily Gazette in Nebraska:
WASHINGTON -- Sen. Mike Johanns spoke on the Senate floor today regarding the impact cap-and-trade legislation would have on American agriculture. In advance of a hearing to be held on Wednesday in the Senate Agriculture Committee, Johanns outlined how agriculture will be hammered with increased production costs as a result of cap-and-trade. He reiterated that state- and commodity-specific analyses of cap-and-trade are essential for a successful evaluation of the true costs and Administration-promised benefits.
Highlights of the speech as prepared for delivery:
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"As I mentioned, USDA knows what cap-and-trade will do to energy prices. Here's the kicker: At the same time, the Department also has indicated that 'USDA believes the opportunities from climate legislation will likely outweigh the costs.' Let me repeat that: USDA says energy prices will increase, but they think the opportunities from climate legislation will likely outweigh the costs. This kind of claim must be based on hard data. Surely, such a sweeping conclusion would not have been drawn unless the impact had been studied. If USDA has conducted analyses of increases in farm input costs and weighed them against measured opportunities, I applaud them. But, if that is the case, it is mystifying that the Department has not shared this analysis, despite having testified before the Senate twice in the two weeks preceding this one."
"That's why, last week, I sent a letter to current Secretary Tom Vilsack, who will testify at the Ag Committee's hearing this week. The letter requested USDA provide the following: a state-by-state analysis of the cost of cap-and-trade on agricultural industries; a crop-specific analysis; an analysis of how the legislation will affect livestock producers; and finally, USDA's assessment of how many acres will be taken out of production as a result of this bill, and what impact that will have on the availability and cost of food, fiber, feed, biofuels, and other agri-products."
Remarks as prepared for delivery by Senator Mike Johanns Regarding Health Care Legislation:
"Mr. President, I rise today to discuss a Senate Agriculture Committee hearing scheduled this week. The hearing is titled, "The Role of Agriculture and Forestry in Global Warming Legislation," and I look forward to participating in it. This is the Committee's first effort this year to tackle the ongoing climate change debate, and it will be an important hearing. Much discussion in both houses of Congress has centered on potential new legislation and regulations relating to climate change. Any kind of new climate-related law would have sweeping consequences that touch every corner of American life.
"Thus, I have made clear that any climate legislation requires a robust, open, and extensive debate on the Senate floor. Numerous studies have been released about how cap-and-trade would affect American life, including agriculture. During last year's debate over cap-and-trade, the Fertilizer Institute released a study stating that the legislation would result in a $40 to $80 increase in the cost to produce an acre of corn. That means higher input costs for livestock producers as well. That same study indicated the cost of producing soybeans would increase between $10 to 20 per acre. Wheat would jump $16 to $32 per acre.
"According to one recent analysis, the Waxman-Markey cap-and-trade bill would also have a severe impact on agriculture. If the bill is enacted, farm income is estimated to decrease as much as $8 billion in the year 2012. By 2024, farmers stand to lose $25 billion. An eye-popping $50 billion would be lost by 2035.
"Gasoline and diesel costs are expected to increase by 58 percent. Electric rates would soar by as much as 90 percent. Agriculture is an energy-intensive industry, and those kinds of increased costs would certainly put people out of business.
"But these are not isolated studies. The American Farm Bureau Federation -- the largest agriculture organization in the country -- also studied the costs. Farm Bureau reported that if Waxman-Markey were to become law, input costs for agriculture would rise by $5 billion compared to a continuation of current law. Other studies have indicated in various ways that the likely impact of cap-and-trade includes increased electricity and heating costs, construction costs, fertilizer prices, and also higher gas and diesel prices.
"Different studies come up with varying numbers, but they all paint the same picture: agriculture loses. None of this should surprise anyone, because the bill is specifically designed to increase the cost of energy. In fact, according to the Congressional Budget Office, 'Reducing emissions to the level required...would be accomplished mainly by stemming demand for carbon-based energy by increasing its price.' We also know that farmers in America's Heartland get hit the worst by these energy cost increases. And we know that USDA agrees. Last week, USDA officials indicated in testimony to the Senate Environment and Public Works Committee that as a result of cap-and-trade legislation, 'the agriculture sector will face higher energy and input costs.'
"Now Mr. President, at the very least, all of this tells us that this is a complicated issue--perhaps as complex as any we will deal with in Congress--not to mention costly. Given the gloomy predictions about cap-and-trade proposals, it seems clear to me that we need to take an approach that is extensive, methodical, and well thought-out. We need specific and clear analysis to make sure we know -- and more importantly, the American people know -- just exactly what the passage of this bill would mean.
"As I mentioned, USDA knows what cap-and-trade will do to energy prices. Here's the kicker: At the same time, the Department also has indicated that 'USDA believes the opportunities from climate legislation will likely outweigh the costs.' Let me repeat that: USDA says energy prices will increase, but they think the opportunities from climate legislation will likely outweigh the costs.
"This kind of claim must be based on hard data. Surely, such a sweeping conclusion would not have been drawn unless the impact had been studied. If USDA has conducted analyses of increases in farm input costs and weighed them against measured opportunities, I applaud them. But, if that is the case, it is mystifying that the Department has not shared this analysis, despite having testified before the Senate twice in the two weeks preceding this one.
"Having been Secretary of Agriculture, I know that USDA has an outstanding team of economists with expertise in such analysis. That's why, last week, I sent a letter to current Secretary Tom Vilsack, who will testify at the Ag Committee's hearing this week. The letter requested USDA provide the following: a state-by-state analysis of the cost of cap-and-trade on agricultural industries; a crop-specific analysis; an analysis of how the legislation will affect livestock producers; and finally, USDA's assessment of how many acres will be taken out of production as a result of this bill, and what impact that will have on the availability and cost of food, fiber, feed, biofuels, and other agri-products.
"Without detailed analyses, USDA's assertions about costs and benefits simply ring hollow. Why wouldn't USDA provide this information for us to evaluate? Isn't this why the Department exists? Agriculture is going to be directly impacted by this legislation, yet we have no analysis from the peoples' Department. If the people who feed the world are going to get hammered by this, we should know it before we vote on it, not after.
"So I hope the third time is a charm for USDA, and they bring more than rhetoric to Wednesday's hearing. Cap-and-trade will not affect states, crops, or regions equally. It will have a different impact on a corn farmer in Nebraska than on a chicken farmer in Arkansas. Similarly, it will impact the dairy farmer in New York differently than the orange grower in California. We need state-by-state and commodity-by-commodity analysis. A one-size-fits-all analysis simply will not give us a true picture of this legislation's impact. A national average won't paint a true picture.
"When you are camping, you can have one foot in the cooler and one foot in the campfire, and on average you're just right. The same goes for loose assessments that are riddled with averages. We have a responsibility to seek a full understanding of this legislation's effect on our nation's farmers and related agricultural industries.
"The information I requested is critical to helping the Senate and America's producers develop a clearer picture of cost increases for farmers and ranchers, which parts of the country will be hit hardest, and which industries within agriculture will incur the greatest losses as a result of this bill. I have asked for a copy of this analysis prior to the hearing. I believe the entire committee deserves an opportunity to review it. I am puzzled by the passage of nearly a full week since my request and no analysis has been provided. I trust the Administration has nothing to hide.
"I will remain engaged in this debate, and I look forward to Wednesday's hearing."
Friday, June 26, 2009
Bloomberg: Cap and Trade Will Increase Oil Imports, Reduce Domestic Production
from Bloomberg:
America’s biggest oil companies will probably cope with U.S. carbon legislation by closing fuel plants, cutting capital spending and increasing imports.
Under the Waxman-Markey climate bill that may be voted on today by the U.S. House, refiners would have to buy allowances for carbon dioxide spewed from their plants and from vehicles when motorists burn their fuel. Imports would need permits only for the latter, which ConocoPhillips Chief Executive Officer Jim Mulva said would create a competitive imbalance.
“It will lead to the opportunity for foreign sources to bring in transportation fuels at a lower cost, which will have an adverse impact to our industry, potential shutdown of refineries and investment and, ultimately, employment,” Mulva said in a June 16 interview in Detroit. Houston-based ConocoPhillips has the second-largest U.S. refining capacity.
The same amount of gasoline that would have $1 in carbon costs imposed if it were domestic would have 10 cents less added if it were imported, according to energy consulting firm Wood Mackenzie in Houston. Contrary to President Barack Obama’s goal of reducing dependence on overseas energy suppliers, the bill would incent U.S. refiners to import more fuel, said Clayton Mahaffey, an analyst at RedChip Cos. in Maitland, Florida.
“They’ll be searching the globe for refined products that don’t carry the same level of carbon costs,” said Mahaffey, a former Exxon Corp. refinery manager.
Prices Seen Rising
The equivalent of one in six U.S. refineries probably would close by 2020 as the cost of carbon allowances erases profits, according to the American Petroleum Institute, a Washington trade group known as API. Carbon permits would add 77 cents a gallon to the price of gasoline, said Russell Jones, the API’s senior economic adviser.
“Because it’s going to be more expensive to produce the stuff, refiners will slow down production and cut back on inventories to squeeze every penny of profit they can from the system,” said Geoffrey Styles, founder of GSW Strategy Group LLC in Vienna, Virginia. “We will end up with less domestic product on the market and a greater reliance on imports, all of which means higher, more volatile prices.”
U.S. motorists, already facing the steepest jump in gasoline prices in 18 years, would bear the brunt as refiners pass on added costs, Exxon Mobil Corp. Chief Executive Officer Rex Tillerson told reporters after a May 27 meeting in Dallas.
More on the Global Warming Sham
from WSJ:
Steve Fielding recently asked the Obama administration to reassure him on the science of man-made global warming. When the administration proved unhelpful, Mr. Fielding decided to vote against climate-change legislation.
If you haven't heard of this politician, it's because he's a member of the Australian Senate. As the U.S. House of Representatives prepares to pass a climate-change bill, the Australian Parliament is preparing to kill its own country's carbon-emissions scheme. Why? A growing number of Australian politicians, scientists and citizens once again doubt the science of human-caused global warming.
Among the many reasons President Barack Obama and the Democratic majority are so intent on quickly jamming a cap-and-trade system through Congress is because the global warming tide is again shifting. It turns out Al Gore and the United Nations (with an assist from the media), did a little too vociferous a job smearing anyone who disagreed with them as "deniers." The backlash has brought the scientific debate roaring back to life in Australia, Europe, Japan and even, if less reported, the U.S.
In April, the Polish Academy of Sciences published a document challenging man-made global warming. In the Czech Republic, where President Vaclav Klaus remains a leading skeptic, today only 11% of the population believes humans play a role. In France, President Nicolas Sarkozy wants to tap Claude Allegre to lead the country's new ministry of industry and innovation. Twenty years ago Mr. Allegre was among the first to trill about man-made global warming, but the geochemist has since recanted. New Zealand last year elected a new government, which immediately suspended the country's weeks-old cap-and-trade program.
The number of skeptics, far from shrinking, is swelling. Oklahoma Sen. Jim Inhofe now counts more than 700 scientists who disagree with the U.N. -- 13 times the number who authored the U.N.'s 2007 climate summary for policymakers. Joanne Simpson, the world's first woman to receive a Ph.D. in meteorology, expressed relief upon her retirement last year that she was finally free to speak "frankly" of her nonbelief. Dr. Kiminori Itoh, a Japanese environmental physical chemist who contributed to a U.N. climate report, dubs man-made warming "the worst scientific scandal in history." Norway's Ivar Giaever, Nobel Prize winner for physics, decries it as the "new religion." A group of 54 noted physicists, led by Princeton's Will Happer, is demanding the American Physical Society revise its position that the science is settled. (Both Nature and Science magazines have refused to run the physicists' open letter.)
The collapse of the "consensus" has been driven by reality. The inconvenient truth is that the earth's temperatures have flat-lined since 2001, despite growing concentrations of C02. Peer-reviewed research has debunked doomsday scenarios about the polar ice caps, hurricanes, malaria, extinctions, rising oceans. A global financial crisis has politicians taking a harder look at the science that would require them to hamstring their economies to rein in carbon.
Credit for Australia's own era of renewed enlightenment goes to Dr. Ian Plimer, a well-known Australian geologist. Earlier this year he published "Heaven and Earth," a damning critique of the "evidence" underpinning man-made global warming. The book is already in its fifth printing. So compelling is it that Paul Sheehan, a noted Australian columnist -- and ardent global warming believer -- in April humbly pronounced it "an evidence-based attack on conformity and orthodoxy, including my own, and a reminder to respect informed dissent and beware of ideology subverting evidence." Australian polls have shown a sharp uptick in public skepticism; the press is back to questioning scientific dogma; blogs are having a field day.
The rise in skepticism also came as Prime Minister Kevin Rudd, elected like Mr. Obama on promises to combat global warming, was attempting his own emissions-reduction scheme. His administration was forced to delay the implementation of the program until at least 2011, just to get the legislation through Australia's House. The Senate was not so easily swayed.
Mr. Fielding, a crucial vote on the bill, was so alarmed by the renewed science debate that he made a fact-finding trip to the U.S., attending the Heartland Institute's annual conference for climate skeptics. He also visited with Joseph Aldy, Mr. Obama's special assistant on energy and the environment, where he challenged the Obama team to address his doubts. They apparently didn't.
This week Mr. Fielding issued a statement: He would not be voting for the bill. He would not risk job losses on "unconvincing green science." The bill is set to founder as the Australian parliament breaks for the winter.
Republicans in the U.S. have, in recent years, turned ever more to the cost arguments against climate legislation. That's made sense in light of the economic crisis. If Speaker Nancy Pelosi fails to push through her bill, it will be because rural and Blue Dog Democrats fret about the economic ramifications. Yet if the rest of the world is any indication, now might be the time for U.S. politicians to re-engage on the science. One thing for sure: They won't be alone.
Thursday, June 25, 2009
Cap and Trade Smoke and Mirrors
This will, over the long term, devastate the U.S. economy. The intent is good, but the end never justifies the means.
from WSJ:
House Speaker Nancy Pelosi has put cap-and-trade legislation on a forced march through the House, and the bill may get a full vote as early as Friday. It looks as if the Democrats will have to destroy the discipline of economics to get it done.
Despite House Energy and Commerce Chairman Henry Waxman's many payoffs to Members, rural and Blue Dog Democrats remain wary of voting for a bill that will impose crushing costs on their home-district businesses and consumers. The leadership's solution to this problem is to simply claim the bill defies the laws of economics.
Their gambit got a boost this week, when the Congressional Budget Office did an analysis of what has come to be known as the Waxman-Markey bill. According to the CBO, the climate legislation would cost the average household only $175 a year by 2020. Edward Markey, Mr. Waxman's co-author, instantly set to crowing that the cost of upending the entire energy economy would be no more than a postage stamp a day for the average household. Amazing. A closer look at the CBO analysis finds that it contains so many caveats as to render it useless.
For starters, the CBO estimate is a one-year snapshot of taxes that will extend to infinity. Under a cap-and-trade system, government sets a cap on the total amount of carbon that can be emitted nationally; companies then buy or sell permits to emit CO2. The cap gets cranked down over time to reduce total carbon emissions.
To get support for his bill, Mr. Waxman was forced to water down the cap in early years to please rural Democrats, and then severely ratchet it up in later years to please liberal Democrats. The CBO's analysis looks solely at the year 2020, before most of the tough restrictions kick in. As the cap is tightened and companies are stripped of initial opportunities to "offset" their emissions, the price of permits will skyrocket beyond the CBO estimate of $28 per ton of carbon. The corporate costs of buying these expensive permits will be passed to consumers.
The biggest doozy in the CBO analysis was its extraordinary decision to look only at the day-to-day costs of operating a trading program, rather than the wider consequences energy restriction would have on the economy. The CBO acknowledges this in a footnote: "The resource cost does not indicate the potential decrease in gross domestic product (GDP) that could result from the cap."
The hit to GDP is the real threat in this bill. The whole point of cap and trade is to hike the price of electricity and gas so that Americans will use less. These higher prices will show up not just in electricity bills or at the gas station but in every manufactured good, from food to cars. Consumers will cut back on spending, which in turn will cut back on production, which results in fewer jobs created or higher unemployment. Some companies will instead move their operations overseas, with the same result.
When the Heritage Foundation did its analysis of Waxman-Markey, it broadly compared the economy with and without the carbon tax. Under this more comprehensive scenario, it found Waxman-Markey would cost the economy $161 billion in 2020, which is $1,870 for a family of four. As the bill's restrictions kick in, that number rises to $6,800 for a family of four by 2035.
Note also that the CBO analysis is an average for the country as a whole. It doesn't take into account the fact that certain regions and populations will be more severely hit than others -- manufacturing states more than service states; coal producing states more than states that rely on hydro or natural gas. Low-income Americans, who devote more of their disposable income to energy, have more to lose than high-income families.
Even as Democrats have promised that this cap-and-trade legislation won't pinch wallets, behind the scenes they've acknowledged the energy price tsunami that is coming. During the brief few days in which the bill was debated in the House Energy Committee, Republicans offered three amendments: one to suspend the program if gas hit $5 a gallon; one to suspend the program if electricity prices rose 10% over 2009; and one to suspend the program if unemployment rates hit 15%. Democrats defeated all of them.
The reality is that cost estimates for climate legislation are as unreliable as the models predicting climate change. What comes out of the computer is a function of what politicians type in. A better indicator might be what other countries are already experiencing. Britain's Taxpayer Alliance estimates the average family there is paying nearly $1,300 a year in green taxes for carbon-cutting programs in effect only a few years.
Americans should know that those Members who vote for this climate bill are voting for what is likely to be the biggest tax in American history. Even Democrats can't repeal that reality.
Sunday, June 14, 2009
Cap and Trade Will Cap Farm Income
from Farm Futures:
The Heritage Foundation's Center for Data Analysis has released an economic study regarding the impact a cap-and-trade system would have on the agriculture community. The study maintains that cap-and-trade is an energy tax in disguise that will cause farm income to drop dramatically because of higher operating costs. It further argues that people living on fixed incomes and struggling in tough economic times can expect higher food prices as the result of this policy.
The Heritage Foundation study projects that farm income will drop $8 billion in 2012, $25 billion in 2024, and over $50 billion in 2035. Those are decreases of 28%, 60%, and 94%, respectively. The report projected an average net income loss over 25 years of $23 billion. Also, construction costs will increase 10%, gasoline costs will increase 58% and electric rates will go up 90% over the 25 year period.
"No wonder agriculture groups are increasingly coming out against the Waxman-Markey bill," said House Agriculture Committee Ranking Member Frank Lucas, R-Okla. "They know agriculture is a target. They know that cap-and-trade promises to destroy their livelihoods."
Wednesday, June 10, 2009
CBO Says Cap and Trade Won't Generate Revenue
from the CBO's report on the Cap and Trade tax:
CBO and the Joint Committee on Taxation (JCT) estimate that over the 2010-2019 period enacting this legislation would:Let me get this right: Cap and Trade will result in a net increase in spending of $26 billion. So if the carbon emissions bill won't reduce carbon emission, won't increase revenue to the government, and will increase spending, why pass it? One thing is for certain: it will cost Americans a lot more money out of pocket! It's about power and control, not revenue or improving the environment!
• Increase federal revenues by about $846 billion; and
• Increase direct spending by about $821 billion.
In total, those changes would reduce budget deficits (or increase future surpluses) by about $24 billion over the 2010-2019 period.
In addition, assuming appropriation of the necessary amounts, CBO estimates that implementing H.R. 2454 would increase discretionary spending by about $50 billion over the 2010-2019 period.
Thursday, May 21, 2009
Climate Talks Amount to Bunch of "Gas"
from Marketwatch:
China is taking a tough line ahead of key climate talks next month, demanding heavy cuts for other, richer nations and payouts to itself, according to a Japanese news report Friday.
The Nikkei report cited official Chinese statements Thursday calling on wealthier countries to cut greenhouse gas emissions 40% by 2020 from 1990 levels, and help pay for reduction schemes in poor countries, according to a published report.
China also repeated its position that developing countries -- including itself -- should only curb their emissions on a voluntary basis, and then only if the curbs "accord with their national situations."
Formal climate-change negotiations are slated to begin on June 1 in Bonn, Germany.
China's argument that developed countries should be legally required to give at least between 0.5% and 1% of their annual economic worth to help poorer countries curb greenhouse gas emissions isn't likely to be warmly received by the U.S. and European Union, the report noted, citing analysts as saying the position may just be posturing ahead of the negotiations.
The Chinese government has estimated it would need to spend the equivalent of $146 billion per year to curb its greenhouse gas emissions, the report said.
Also:
Members of the House Energy Committee on Thursday approved a sweeping bill aimed at arresting climate change, the first step in a potentially enormous re-ordering of U.S. energy policy.
By a vote of 33 to 25, members approved language cutting carbon emissions by more than 80% below 2005 levels by 2050 through a "cap-and-trade" system. The bill would also boost use of renewable energy and set new targets for energy-efficient buildings.
