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Energy Policy Lunacy

Dear Editor:

The price of oil is over $100 a barrel and the price of gas is $3.25 a gallon.  The idiots in Washington want to spend hundreds of millions of dollars to build a wind farm in Whitley County to generate electricity that costs 3 to 4 times more than what it costs with traditional generating plants.

Such lunacy is the result of a national energy policy based on voodoo science that climate change is man made.

It is this same energy policy that has killed 600,000 jobs in the proposed oil pipeline from Canada and oil production in America.  Add to that all the jobs lost by Obama’s off-shore drilling moratorium and the lunacy becomes down right scary.  Democrats don’t give a rat’s petunia about jobs in America unless they are make-work jobs like building wind mills that are too expensive to operate and solar panels that nobody will buy.

We need to defeat these Democrats who continue this onslaught of our country and our way of life and those Republicans who stand idly by while it happens. Wasteful spending pursuing a failed energy policy is the path to the demise of America.

Terry L. Smith

EPA’s Mission Impossible: A Deadline to Destroy Domestic Energy

From The Heritage Foundation:

Last week, Bloomberg reported that the Environmental Protection Agency’s (EPA) regulatory push against the fossil fuel industry will cost America’s largest utility, the Southern Company, up to $18 billion in compliance costs. But that’s just the tip of the iceberg.

According to data in a filing by Southern last week, the EPA’s new emissions requirements cannot be met in the three years allowed by the agency. The results: more power plant closures, spikes in electricity prices, job losses, and increased power outages.

Southern’s filing demonstrates that, based on company data from actual upgrade projects, the EPA’s compliance timetable in its proposed “Utility MACT” rule is simply impossible to achieve. Southern has undertaken more upgrade and compliance projects than any other power producer.

Take scrubbers: Over the past seven years, it has installed 16 of them to capture emissions. The average time to complete each upgrade was 54 months—a full year-and-a-half longer than the EPA is now demanding for the entire industry to comply.

The installation of filter systems, another emissions control technology, takes anywhere from 34 to 48 months from start to finish. And Southern’s figures show that, with most of the low-hanging fruit of easy upgrades already completed, the EPA-required installations would come in at the far end of that timeline.

“Controlling the entire fleet by 2015 cannot be done at any cost,” the company concludes.

As a result, plants that can’t be upgraded in time must be taken off line in 2015. With less power available on the grid, electricity prices are forecast to spike by 11.5 percent nationwide in 2016, causing hundreds of thousands of job losses across the economy, according to National Economic Research Associates.

And according to Bernstein Research, the EPA’s rules will slash reserve capacity—i.e., the availability of electricity generating capacity to meet peak demand and plug power interruptions—resulting in increased power outages of longer duration. In a hot summer like this one, that means rolling blackouts, loss of air conditioning, and potentially heat-related deaths.

The Obama EPA’s disdain for the most abundant domestic energy sources is well known, but the consequences of its regulatory onslaught are only now gaining public attention. Congress should, at the very least, extend the EPA’s impossible compliance deadline to avert some of the economic damage and job loss that are the inevitable result of the EPA’s war on domestic energy. Even better, Congress should consider whether regulation is called for at all—a question which the EPA has, prior to this Administration, answered in the negative.

Here Come Obama’s ‘Necessarily Skyrocketing’ Electricity Rates

From The Heritage Foundation:

President Obama’s infamous words—saying electricity rates will “necessarily skyrocket” under his cap-and-trade program that would impose a costly energy tax on American consumers—are set to come true. Just ask the market.

Although cap and trade is not law, the Environmental Protection Agency’s (EPA) backdoor train wreck of energy regulations is forcing utilities to file for significant rate hikes in years to come because of the upgrades they will have to make or the complete shutdown of older plants.

Take Louisville Gas & Electric (LG&E), for instance. In what’s labeled as an “environmental cost recovery,” the utility says ratepayers will see their electric bills increase 19.2 percent by 2016. Why? LG&E spokesman Chip Keeling answered,

The EPA is forcing utilities to do this. We don’t have a choice. It’s not a question of are we going to meet them. The question is when and how and how much money. We have to meet these regulations because the EPA is mandating it for us to do it. They’re forcing us to do it.

LG&E isn’t the only one building cost increases into its projects as a result of EPA regulations. PJM is a regional transmission organization that manages the electric grid and coordinates the wholesale electricity market for 13 states and the District of Columbia. The organization conducts electricity capacity auctions for future years to meet anticipated demand, and it projects EPA regulations are going to increase capacity costs in the magnitude of $2 billion–$3 billion for a one-year period. PJM also “concluded that “60 to 80%” of the increase in generators bid costs in the May 2011 auction was due to environmental regulations.”

As this American Legislative Exchange Council study shows, the EPA’s train wreck of energy regulations leaves a complicated and expensive mess of new requirements for U.S. power plants. A new analysis from the National Economic Research Associates (NERA) looked at just two of those regulations, the Clean Air Transport Rule and the Utility Maximum Achievable Control Technology (MACT). The study finds “Average U.S. retail electricity prices in 2016 would increase by about 12%, with regional increases as much as about 24%.”

American households will be hit hard, as will American businesses. Producers everywhere will try to cover their higher production costs by raising product prices. As a result, consumer demand will fall, and income and employment will drop. There’s no other way to put it: These are unnecessary job-killing, economy-destroying regulations.

Government Shouldn’t Decide What Cars Run On

From The Heritage Foundation:

With gas prices hovering at $4 per gallon, politicians are trying to sell quick fixes that will inevitably end up hurting consumers. The latest attempt is an open fuel standard that would require a certain percentage of new vehicles to be flex-fuel (a combination of gasoline and ethanol or methanol), electric, natural gas, biofuels, or any other power source that is an alternative to your traditional internal combustion engine.

Policymakers will attempt to convince the public that open fuel standards encourage competition and will benefit consumers. Consumers won’t be paying such high prices at the pump and Americans will be buying less foreign oil. Moreover, the additional cost for each vehicle will be marginal. As opposed to promoting one technology (such as electric vehicles or natural gas vehicles), an open fuel standard does not pick winners or losers.

It all sounds great. So why do we need a mandate for vehicle producers to make 50 percent of their fleet to run on these technologies? The reason there are not more cars running on batteries, natural gas, methane, or other alternative fuels is the result of competition, not the absence of it.

This isn’t the first attempt to mandate alternative vehicle fuel use. Policymakers in the past have proposed to have vehicle manufacturers make a certain percentage of their fleet flex-fuel. What the Competitive Enterprise Institute’s Marlo Lewis writes about that idea applies to a broader alternative vehicle mandate as well:

What flex-fuel mandatists lament as a lack of competition is simply a competitive outcome they dislike. Mandatists do not want competition. They want a rigged marketplace in which they, rather than competition, dictate the outcomes.

There are plenty of technologies already developed to promote competition, and the one that emerges to provide a consistently affordable alternative to gasoline won’t need the help of the government, because the profits will be enough incentive to drive production and lower costs, which will be enough incentive for the consumer to switch from a car that runs on gasoline to something that is cheaper. It may not happen as fast as politicians and lobbyists representing the beneficiaries of open fuel standards would like, but then again, it might. Good economic ideas can expand at rapid rates. Getting the government involved only impedes the process.

Having an open fuel standard also means one of two things for domestic vehicle manufacturers. They’re going to be producing a lot of cars no one wants to buy or they’re going to receive more taxpayer dollars for the production and consumption of these vehicles. The government already manipulates the automobile market with fuel efficiency standards. Do we really need more government intervention?

Sarah Palin Opposes All Energy Subsidies

From RedState:

As the presidential election heats up, we will continue to track where the candidates stand on ethanol and energy subsidies.  The issue of ethanol subsidies is vital to conservatives for several reasons.  First, ethanol epitomizes everything that is wrong with onerous government interventions; corporate cronyism, market distortions, higher prices for vital goods and services, and government dependency.  Also, with food and energy prices at an all time high, ethanol subsidies will provide the eventual Republican nominee with a unique opportunity to use bread and butter issues to educate voters about the virtues of the free market.

Finally, and most importantly, if the Republican nominee lacks the temerity to rebuff a handful of corn welfare recipients in Iowa, he/she will certainly lack the moxie to cut trillions from the millions of dependents on the welfare state.

Last week, Mitt Romney embraced ethanol, Tim Pawlenty disavowed his support for ethanol (while speaking in Iowa), and Newt Gingrich….well, he is Professor Cornpone.  Today, Sarah Palin rejected all energy subsidies in a brief interview with reporters in Gettysburg.  Scott Conroy of Real Clear Politics reports from Gettysburg:

 

Asked Tuesday whether she supports the federal subsidy of ethanol, an always critical issue in the presidential nominating cycle, former Alaska Gov. Sarah Palin went one step further and called for the elimination of all energy subsidies.

“I think that all of our energy subsidies need to be relooked at today and eliminated,” Palin told RCP during a quick stop at a coffee shop in this picturesque town tucked into the south-central Pennsylvania countryside. “And we need to make sure that we’re investing and allowing our businesses to invest in reliable energy products right now that aren’t going to necessitate subsidies because, bottom line, we can’t afford it.” ….

“We’ve got to allow the free market to dictate what’s most efficient and economical for our nation’s economy,” Palin said. “No, at this time, our country can’t afford the subsidies. Before, though, we even start arguing about some of these domestic subsidies that need to be eliminated — should be — we need to look at ending subsidies and loans to foreign countries and their energy production that we’re relying on, like Brazil.”

It’s good to hear the presidential candidates taking on all energy subsidies along with ethanol.  Although ethanol is the most odious and ineffectual of all the subsidized energy sources, we should not be subsidizing any form of energy.  Consequently, every presidential candidate should oppose subsidies for natural gas as well.  This would keep up the pressure on House Republicans to renounce their support and co-sponsorship of the T. Boone Pickens handout-H.R. 1380.

God Bless America

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