Month: November 2008

Obama's Bad Green Deal

By Steven Milloy
November 26, 2008, FoxNews.com

President-elect Barack Obama’s plan to combat unemployment by creating 2.5 million public works jobs could only be loved by someone ignoring the economic and political realities of public works, alternative energy and the Greens.

“Rebuilding roads and bridges, wind farms and solar panels, fuel efficient cars and alternative energy technologies that can free us from our dependence on foreign oil and keep our economy competitive in the years ahead” is what Obama said he intends to accomplish.

It’s true that road building can contribute to economic growth, but not like Obama seems to think. The road building boom of the 1950s and 1960s did boost U.S. economic growth, according to Federal Reserve economist John Fernald. But this was because mass expansion of the interstate road system facilitated growth-producing economic activity. While necessary for keeping traffic moving safely and smoothly, simply re-building roads and bridges doesn’t spur commerce and, so, isn’t a strategy for economic growth.

While appropriate expenditures on new roads can produce high economic returns, according to a 2002 study published by George Mason University transportation experts in Public Works Management Policy, this isn’t what Obama is proposing. His reticence on new construction is likely due to his indebtedness to the Greens, who oppose new roads. The Natural Resources Defense Council testified before Congress last June, for example, that “footprints,” or new and existing road construction, should be “minimized.”

Moreover, capital spending on infrastructure doesn’t seem to work fast enough in economic hard times. The U.S. has only “limited experience with capital spending as a countercyclical device” and “the results have been largely negative,” according to the George Mason study. Capital expenditures on infrastructure take four to six quarters to implement because of the necessary planning, contract bidding and construction phasing.

The public works programs of the Great Depression, the historical event with which our current economic crisis is being compared, failed to stimulate the economy. As described in Jim Powell’s book, FDR’s Folly, the Civilian Conservation Corps spent $2 billion between 1933 and 1939 working in wilderness areas and parks planting trees, controlling tree diseases, and building paths, picnic areas and firefighting infrastructure.

Not only did the Public Works Administration only build roads, bridges, schools, dams and naval ships, it tended to employ architects, engineers and skilled workers rather than the unskilled people who needed work. Newspaper columnist Walter Lippman concluded that the PWA was “worse than a failure” when it came to jobs creation and economic stimulus.

Other New Deal infrastructure public works programs, including the Federal Emergency Relief Act, Civil Works Administration and the Works Progress Administration, “do not appear to have had the strong effect on productivity” in the areas where the money was spent, concluded National Bureau of Economic Research economists in 2001.

Then there are the Greens, who tend to oppose any sort of construction, even for so-called renewable energy projects. Prominent Greens such as Maryland Gov. Marvin O’Malley and Robert F. Kennedy Jr. have opposed wind farms as eyesores. Canadian Greens oppose a wind farm in British Columbia because it allegedly will “wipe out” migratory birds. A wind farm proposed for the Georgia coast cannot proceed without a multiyear study of its impacts on whale calving grounds. Green activists currently oppose dozens of applications for solar farms across more than 518,000 acres of public lands in the Southern California desert because of alleged concerns for tortoises, squirrels and other wildlife.

What about the fuel-efficient cars and alternative energy to which Obama referred? A Washington Post headline this week said it all, “Hybrid vehicles are popular, but making them profitable is a challenge.” Batteries that add $8,000 to sticker prices and $7,500 tax credits that about one-half of Americans can’t take advantage of because they don’t earn enough money didn’t make economic sense when gas cost $4; they make much less sense with $2 gas. Hybrid and plug-in cars may use less fuel, but they are light years away from economic efficiency. If the cars aren’t cost-effective — which is the only reason to buy them — they won’t be flying off the assembly line and won’t be creating jobs in the flagging U.S. car industry.

One great green alternative energy hope is cellulosic ethanol, which uses biomass (like switchgrass) rather than food (like corn) as a feedstock. But there are no commercially viable cellulosic ethanol plants because the technology is expensive. The Department of Energy is spending $385 million to build six plants over the next four years in hopes of producing 130 million gallons of ethanol per year. The purpose is to show that the plants can be run profitably once their construction costs are covered by taxpayers.

But not only will these test plants be too small and not be built in time to provide economic stimulus, the long-term feasibility of cellulosic ethanol itself is questionable. Americans consume about 140 billion gallons of gasoline annually. Will the Greens — who oppose the 149 gasoline refineries now operating — really permit the construction of hundreds of cellulosic ethanol refineries that make greenhouse gas-producing fuels? And what about the environmental impacts of the plants themselves?

Finally, let’s keep in mind that, for most of us, energy is an expense that we like to minimize. How does forcing consumers to buy expensive “green” energy contribute to economic recovery and growth?

If Obama wants to solve the economic crisis when he’s president, he’s going to have to promote policies that encourage real economic growth, rather than regurgitating green talking points that are a recipe for making a bad situation worse.

Steven Milloy publishes JunkScience.com and manages the Free Enterprise Action Fund. He is a junk science expert and an adjunct scholar at the Competitive Enterprise Institute.

Detroit Needs Drilling, Not Bailouts

By Steve Milloy
November 20, 2008, FoxNews.com

Looking for the root of the impending car industry debacle? Look no further than the failure of the Big Three and the United Auto Workers to challenge the Green attack on cheap gasoline.

Since the 1980s, the golden goose of the U.S. auto industry has been SUV and light truck sales. Those vehicles were so popular and so profitable that the Big Three could afford to meet UAW demands for high wages and generous benefits. The golden goose even enabled the Big Three to afford the infamous UAW Jobs Bank where thousands of laid-off auto workers were kept on the payroll for years, costing the automakers billions of dollars.

But for decades, the Big Three and the UAW overlooked the linchpin of all these “good times” — the cheap gasoline that fueled SUV sales. For some strange reason, neither the companies nor the UAW had the foresight or courage to challenge the Green chokehold on our gasoline supply.

While the Greens blocked oil drilling offshore and on public lands, like the Arctic National Wildlife Refuge, the Big Three and the UAW looked the other way. When the Greens worked to block the expansion of gasoline refineries through both direct opposition to plant expansion and through stringent EPA regulation that made refinery expansion expensive and unprofitable, the car industry snoozed. Only Ford CEO Wiliam Clay Ford Jr. was active on the Green issue — but not in a helpful way. He advocated higher gas taxes to incentivize the public away from buying SUVs.

It wasn’t until September 2008 that the CEO of General Motors finally got around to calling for increased offshore oil drilling — almost 20 years after the offshore drilling moratorium began. The UAW has yet to make the connection between cheap gas and its members’ jobs.

But let’s not give GM too much credit yet. In a full-page advertisement in the New York Times this week, entitled “There’s a belief that GM is not doing enough,” GM boasts that, “We have aggressively addressed our North American manufacturing footprint, shifting our production from trucks and SUVs to smaller cars and crossover vehicles.” What?

Amazingly, as gas prices plummet to levels not seen since early 2005 and SUV and light truck sales start to rebound, GM is “aggressively” shifting out of the hugely profitable vehicles that the public loves into less-profitable eco-boxes that are loved only by the Greens. Moreover, foreign carmakers can make better ecoboxes and sell them for less money, since they aren’t burdened by the UAW legacy costs that add about $2,000 to the cost of a car. Smaller cars were losers for Detroit in the 1970s and 1980s, and little has changed.

GM has also let the Greens goad it into betting much on the production of the electric car known as the Chevy Volt. “The future is electrifying,” is GM’s marketing pitch for the Volt. Touting the car as an “Extended-Range Electric Vehicle that is redefining the automotive world,” GM says that the Volt “is designed to move more than 75 percent of America’s daily commuters without a single drop of gas.

That means for someone who drives less than 40 miles a day, Chevy Volt will use zero gasoline and produce zero emissions.” Should you decide to drive more than 40 miles, then the Volt has a “gasoline-powered, range-extending engine that drives a generator to provide electric power when you drive beyond the 40-mile battery range.”

But as Wall Street Journal columnist Holman Jenkins pointed out last week, “We’re talking about a headache of a car that will have to be recharged for six hours to give 40 miles of gasoline-free driving.” If you use the car as intended, that is, never going beyond 40 miles between charges and so never using the gasoline engine. Even then, you’ll have to periodically drain the tank, since gasoline goes bad after a couple of months. And then you’ll have to make a special effort to dispose of the old fuel in an environmentally safe manner, just as for used motor oil.

The alleged advantage of the Volt is that, while it’s running on its battery, it produces no emissions. But it can hardly be assumed that consumers will flock to the Volt for that dubious reason.

Detracting from this alleged benefit is the fact that India’s Tata Motors is preparing to sell its $2,500 Nano car as low-cost transportation in developing nations. The millions of carbon dioxide-emitting Nanos to be sold in the developing world will more than offset whatever emissions are avoided by the many fewer Volts sold in the U.S. Moreover, there is the overriding reality that both China and India, the fastest growing emitters of carbon dioxide, have vowed not to cut their emissions. So the Volt’s alleged emissions benefit is quite illusory in the context of global warming.

Although the Big Three and the UAW didn’t set out to kill their golden goose, they didn’t do anything to protect it, either. It’s not too late for them to figure out that cheap gasoline is their friend and the Greens are the enemy. The future may be electrifying one day, but for today, the Big Three and UAW need, “Drill, baby, drill” and the equally important “Refine, baby, refine.”

Steven Milloy publishes JunkScience.com and manages the Free Enterprise Action Fund. He is a junk science expert and an adjunct scholar at the Competitive Enterprise Institute.

Greens Pave Way to Republican Comeback

By Steven Milloy
November 13, 2008, FoxNews.com

If congressional Republicans — or what’s left of them — are looking for the path out of the political wilderness following last week’s electoral drubbing, there’s a shortcut to victory in 2010 being paved for them by the Greens.

Last weekend on Fox News Sunday, Barack Obama’s transition chief, John Podesta, said the Obama administration would act quickly to reverse a recent Bush administration move opening up public lands in Utah to oil and gas drilling. Podesta said that it was a “mistake” for the Bush administration to allow drilling “in some of the most sensitive, fragile lands in Utah…”

So, GOP, the battle lines are drawn. Since declining oil and gas prices are likely only temporary, we remain in an energy crisis. The problem could be solved by increasing domestic oil and gas production, but the Obama administration apparently aims to stand four-square against this.

The time has passed for Republicans to fret about being painted by the Greens as “pillagers of the Earth” for supporting drilling in allegedly fragile environments. Let’s get real. While such demagoguery is a standard Green tactic to block the development of natural resources, the notion of a “fragile” environment is a canard.

We routinely alter local environments. Any time you stick a shovel in the ground, you’ve permanently altered the environment. But in a rational world, mere environmental change is not the same as environmental destruction — and if we are going to pretend that it is, then we’re going to have a hard time justifying any development whatsoever.

Moreover, modern oil and gas drillers aim to minimize their environmental impact, out of self-interest if nothing else. The potential legal and reputational liabilities are too great if they don’t. Last spring, the U.S. Bureau of Land Management (BLM) even commended three oil and gas drillers (BP America, Devon Energy and Questar) for reducing their footprint on public lands.

Of course, local environments will be disrupted to some limited extent by drilling, but most probably to a much lesser extent than most other sorts of development, whether they be new or expanding suburban communities, roads, farming or a green energy projects — like wind farms, solar panel fields, and cellulosic ethanol plants.

Consider, for example, how much “fragile” environment would be disturbed by T. Boone Pickens’ plan to build the largest wind farm in the world on 400,000 acres in the Texas panhandle. While the Greens say they support Pickens’ effort, in what way is the Texas panhandle less fragile than the Utah desert?

Last spring, the BLM placed a moratorium on solar power projects to be built on public lands, pending environmental impact studies. The necessary transmission lines and water use might disturb the native vegetation and wildlife, says the BLM. But the solar power industry screamed bloody murder and the moratorium was soon rescinded.

Given that the Greens oppose oil and gas drilling everywhere, the rest of us — especially congressional Republicans — must adopt the solar industry tactic of outspoken outrage if we want to end the Green-induced energy crisis. There is at least one congressional Republican who understands the Greens’ no-drilling-anywhere game — Arizona’s John Shadegg.

In an op-ed in the Wall Street Journal in September, Shadegg spotlighted the Greens’ “dead-ender” mentality on drilling with respect to leases in Alaska’s Chukchi Sea, which holds an estimated 15 billion barrels of oil (a two-year supply) and 76 trillion cubic feet of natural gas (a three-plus-year supply).

Not only have groups like the Sierra Club and EarthJustice challenged the legality of all 748 government-issued leases in the Chukchi, they’ve challenged the legality of the entire outer continental shelf leasing program itself. Shadegg wrote that the Greens’ “incessant legal and administrative challenges make true the Democrat claim that oil from newly opened [public lands] will not reach the market for years.”

Last week, Shadegg trounced his Democratic opponent, garnering almost 80 percent of the vote. His success stands in stark contrast to Green-friendly Republicans who were defeated, including New Hampshire Sen. John Sununu and North Carolina Sen. Elizabeth Dole. Then there’s Minnesota Sen. Norm Coleman, who may very well lose in a recount against comedian Al Franken. Let’s not forget that John McCain’s embrace of global warming alarmism garnered him no visible Green support while simultaneously alienating many Republican voters.

Earth to Republicans: the Greens don’t and never will support you. That should come as no surprise since they’re all about left-wing politics — not the environment, which they use only as a battering ram/shield for their political agenda. Kowtowing to the Greens is a fool’s errand, if not political suicide. In contrast, most Americans want and need energy security and independence. They would vociferously support you in that endeavor.

The Greens plan to make an all-out push for their agenda in 2009, knowing that 2010 is an election year in which politicians, even Democrats, get cautious and avoid radical legislation. Since anything could happen in 2010 — including the election of a Republican-controlled Congress — the Greens have no choice but to grab what they can, while they can.

All that stands between America and energy policy disaster in 2009 is the Republican minority in Congress. Averting that disaster and championing domestic production is the path to victory in 2010. If the Republican leadership needs help in getting its arms around the problem, a visit to Rep. Shadegg’s office would be a good start.

Steven Milloy publishes JunkScience.com and manages the Free Enterprise Action Fund. He is a junk science expert and an adjunct scholar at the Competitive Enterprise Institute.

The First Green President

By Steven Milloy
November 06, 2008, FoxNews.com

President-elect Barack Obama could be the nation’s first green president — whether he likes it or not. The Greens’ early investment in Obama’s political soul has matured, and they’re already angling for — and even demanding — payback.

Though the financial crunch should place economy-harming global warming legislation on the back burner, the Natural Resources Defense Council is pushing for it within the first 100 days of the new Congress, supposedly as a means of easing the credit crisis and financing renewable energy projects, according to a report in the November 3 issue of Carbon Control News.

Under the NRDC proposal, credits covering as many as six billion tons of carbon dioxide emissions would be issued in the program’s first year. The credits would be guaranteed a minimum value of $15 per ton by Obama’s Treasury Department, magically converting all that hot air into a $90 billion asset. The guarantee would allow the credits to be used as collateral for loans to green energy projects.

Pennsylvania Gov. Ed Rendell, a key Obama supporter and rumored Secretary of Energy candidate, lobbied on behalf of the green energy industry the morning after the election. Responding to a question from a CNBC interviewer about the merits of “undivided government,” Rendell said, “[Undivided government] is going to allow us to act quickly. We need… to send a message to the renewable energy economy, to the [20 to 25] companies in Pennsylvania and… in New Jersey who are hanging in the balance and, if that tax credit is not renewed or made permanent, they’re done in the next three to four months. This government is going to be able to move in the first weeks of the new Congress.”

Then there’s wannabe green-energy billionaire and Obama supporter Al Gore. Not only did Gore’s climate campaign group place full-page ads in national newspapers on Nov. 5 asking “NOW WHAT?,” in a same-day Wall Street Journal op-ed, Gore argued for carbon-free electricity within 10 years and electrification of the automobile fleet. Both are areas in which Gore has significant financial interests through his UK-based investment firm, Generation Investment Management, and his U.S.-based venture capital firm, Kleiner Perkins.

The Greens are more to Obama than just one of many constituencies. He credits the early endorsement of his candidacy by the Sierra Club and League of Conservation Voters (LCV) in February 2004 for his rise from the Illinois State Senate to the U.S. Senate. “I had no money, had no organization, it was unlikely that the Democrats would nominate a skinny guy from the Southside with a funny name like Barack Obama,” he told the National Journal’s CongressDaily publication.

Momentum began to shift his way “when we got the support of the League of Conservation Voters,” he said. “Not only did they provide us financial support, not only was [LCV head] Deb Callahan’s gorgeous face on television saying I was a pretty good guy — and that sold some tickets right there — more importantly the League, along with the Sierra Club and other environmental organizations, signaled to those who are considered swing voters in the state of Illinois, Republicans and independents who may sometimes veer toward that side of the aisle.” Obama was the first non-incumbent member of Congress to be included on the LCV’s list of “environmental champions.”

The LCV said it made an early decision to invest heavily in Obama’s race, “largely because of his support for environmental issues during his tenure in the state Senate.”

“Early on, we recognized Barack’s leadership on these issues, and made a substantial investment in helping him win the Democratic primary,” Callahan said. Not surprisingly both the LCV and Sierra Club endorsed Obama in 2008. The Obama web site emphasized that “The League of Conservation Voters has given Barack Obama the highest lifetime rating of anyone currently running for president.”

When a reporter asked Sierra Club head Carl Pope whether expectations for Obama have been set too high, Pope responded: “We are not electing the archbishop of Canterbury or a saint. We’re electing an American politician. Is he susceptible to pressure? He damn well should be.…We’re not going to go away when he’s elected. We and other forces that are supporting him are going to stay organized. And as he told the environmental community when he met with us, we’re going to have to keep his feet to the fire.”

It’s little wonder, then, that the Sierra Club program director for global warming told the media after this week’s election that a federal renewable energy mandate — that is, compulsory use of expensive and unreliable, but Green-supported, wind and solar power — “is almost a certainty.”

Obama has selected (or perhaps had thrust upon him) former Gore staffer and Clinton administration EPA head Carol Browner to advise on the environmental aspects of the transition. Browner was perhaps the most ruthlessly green EPA administrator ever. In 1997, she issued the most expensive EPA air pollution regulations ever — even over the objections of Gore. Now that’s green.

Finally, Rep. Henry Waxman (D-Hollywood) is moving to oust closet global warming skeptic Rep. John Dingell (D-General Motors) from the chairmanship of the powerful House Energy and Commerce Committee, so that Waxman can play a lead role in climate and other green legislation.

Exit polling indicates that Obama triumphed over John McCain because of the economic crisis. Though he wasn’t elected to be the first green president, the Greens are set to call in their chits and, if necessary, to force that mantle on him.

Steven Milloy publishes JunkScience.com and manages the Free Enterprise Action Fund. He is a junk science expert and an adjunct scholar at the Competitive Enterprise Institute.