Entries for November 2007

Whether you are a "Fortress America" type, an international environmentalist, or somewhere in between on the American political spectrum, you're very likely to believe one thing: One of the top issues facing the nation is U.S. dependence on foreign oil.

That finding, from a new survey and focus groups conducted jointly by Republican strategist Bill McInturff and Democratic pollster Geoff Garin, explains much about why a long-floundering Congress is getting ready to raise automobile fuel economy standards for the first time in three decades. Washington is abuzz with the news that House and Senate negotiators have reached a deal to require the nation's fleet of vehicles to achieve a 35-mpg average by 2020. If the vote proceeds next week as expected, it would blow away Detroit's once-powerful lobby and the objections of Michigan lawmakers who stood in the way of tougher standards for years.

The nation's two most famous Christmas trees, the evergreens at Rockefeller Center and at the White House, will be festooned in light-emitting diodes for the first time this year. In fact, so many cities are getting on the energy-efficient holiday light bandwagon, it is truly the season of the LED.

But the price of this ultralow-energy illumination is still high enough that whether in a public park or in your home, you have to look at switching to efficient LEDs as an investment in the greater good, not as a money-saving choice. The nation's largest utility, Pacific Gas & Electric, did its own testing and found that with California's relatively high power prices, the annual electricity cost of a 300-light LED display was just 43 cents, compared with $4.50 for 300 of the more typical mini-incandescent bulbs. That's a 90 percent savings!

If you're looking for new reasons that we've got to get beyond oil, here are a couple. Check out the final report released this past weekend by the Intergovernmental Panel on Climate Change. Fresh from winning its share of the Nobel Peace Prize, IPCC brought together its past work with new evidence, such as that from the melting of the Greenland ice sheet, to reiterate that global warming is "unequivocal" and that scientists have "high confidence" it is due to humans. IPCC head Rajendra Pachauri told the New York Times that waiting until 2012, when the next round of Kyoto is set to begin (and the first term of the new president ends), will be too late. "What we do in the next two or three years will determine our future," he said. See Gristmill's good-news take-away here.

Two days after the IPCC report, the front page of the Wall Street Journal says the idea that the current 85 million barrels a day of oil that the world produces is about as much as it ever will be able to produce has moved well beyond the so-called peak oil theorists. Citing top executives of France's Total and ConocoPhillips, as well as a former Saudi oil chief, the Journal says, "Some predict that, despite the world's fast-growing thirst for oil, producers could hit that ceiling as soon as 2012. This rough limit—which two senior industry officials recently pegged at about 100 million barrels a day—is well short of global demand projections over the next few decades."

What better day for the peakers, who have been sounding alarms long before the Wall Street Journal, to post their latest analyses? On the Oil Drum, they try to discern not if worldwide oil production is peaking but how quick the decline rate is.

When a federal appeals court yesterday threw out the Bush administration's anemic fuel economy standard for sport utility vehicles and other light trucks, the White House didn't just lose a lawsuit. "They just lost their best talking point on the environment," says lawyer Dan Becker, who now is an outside consultant to green groups after working 18 years on auto efficiency for the Sierra Club.

In fact, earlier in the week, at a special briefing with reporters on the world oil markets and energy policy, the Department of Energy had touted its light-truck standard as one of the pillars of "a very robust energy policy," in the words of Karen Harbert, assistant secretary for policy and international affairs.

Although it was indeed, as the automakers never tire of saying, the largest increase in the U.S. corporate average fuel economy, or CAFE, standard ever, not everyone was awed by the decision to force SUVs, vans, and pickups to get 1.8 mpg better fuel mileage (to an average of 24 mpg) by 2011. Memorably, Don MacKenzie, vehicle engineer with the Union of Concerned Scientists, said then, "Fighting America's oil addiction with these standards is like fighting lung cancer by smoking 49 cigarettes a day instead of 50."

The Ninth U.S. Circuit Court of Appeals was even harsher, saying that the Bush administration failed to explain why the popular SUVs should be allowed to pollute more than passenger cars, didn't address greenhouse gas emissions, and set no standard whatsoever for the heavier vehicles like the Hummer H2 and Ford F-250. In Judge Betty Fletcher's words, the administration "cannot put a thumb on the scale by undervaluing the benefits and overvaluing the costs of more stringent standards."

Although the case marked a win for the 11 states, two cities, and four environmental groups taking on the administration, there does seem something pyrrhic about a victory that puts the CAFE ball back in Bush's court.

The Veterans Day briefing with Harbert was the second time this fall that I had heard the Bush administration's tortured CAFE logic. In addition to the now jettisoned light-truck standard, the administration said it wanted Congress to give it the power to set a higher CAFE standard for passenger cars. But at the same time, the administration said it thinks it already has that authority because of a Supreme Court ruling last spring that said the Environmental Protection Agency has the power to act to curb greenhouse gases.

So why doesn't it do something? Legislation would be preferable, the administration says. And there things stand—stuck with no change in fuel economy standards for the past 30 years.

On passenger cars, Becker and others note that the administration probably does have the authority from Congress to raise CAFE standards—the Congress of 1975. Although the language of that law left any executive branch action on that score subject to a legislative veto, the legislative veto was ruled unconstitutional by the Supreme Court 24 years ago.

"If they tried to raise CAFE standards, they would find that they had the authority all along, just like Dorothy and the ruby-red slippers in The Wizard of Oz," Becker says.

Becker is not holding his breath for the administration to find its way back to Kansas. He does think that the decision increases pressure on Congress to pass legislation for the SUVs and light trucks and to act on the stalled energy bill that would increase the standard for passenger cars to 35 mpg by 2020.

But in the meantime, California Gov. Arnold Schwarzenegger may end up trumping everyone and, in effect, setting a new fuel economy standard for the nation. Nineteen states—including populous New York and Florida—have promised to follow the tough California standard, which would raise fuel economy for both cars and SUVs much faster than Congress has envisioned, once California gets the approval it needs from the Bush administration.

California sued last week over the administration's delay on this decision, and that battle may continue for the remainder of the presidency. But in January 2009, all a new president would have to do is sign California's waiver to enact a national mandate for better gas mileage.

Today, nine midwestern governors will become the latest state leaders to step into the policy void left by Washington and establish a regional climate change policy. Democrats Jim Doyle of Wisconsin, Chester Culver of Iowa, Jennifer Granholm of Michigan, Kathleen Sebelius of Kansas, Ted Strickland of Ohio, and Rod Blagojevich of Illinois will join with the Republicans Tim Pawlenty, M. Michael Rounds of South Dakota, and Mitch Daniels of Indiana to pledge, among other things, at least 10 percent renewable electricity generation in their region by 2010 and 20 percent by 2020. Premier Gary Doer of the Canadian province of Manitoba also will be signing the agreement at the meeting in Milwaukee at lunchtime today. All the details are here.

Some highlights: 2 percent energy efficiency improvement in natural gas and electricity by 2015 and 2 percent annually thereafter. And the leaders pledge to have at least one commercial advanced coal gasification facility delivering power by 2012, capable of being fitted for carbon capture. Also by that year, they agree to site and permit a pipeline to transport that carbon dioxide for use in enhanced oil and gas recovery.

Certainly the specifics will be debated—is carbon capture going to be a viable or even desirable solution? But you've got to hand it to them for showing that a bipartisan deal can be worked out on energy. And as Congress and the White House are stalled in talk-and-no-action mode, it is the latest patch in the patchwork of approaches on climate that is being fashioned across the nation. The Northeast and mid-Atlantic states and California led the way, and other western states may be close behind.

All this state action got me wondering which states have the worst carbon emissions. If you just look at power plants (a major source, but cars, trucks, and manufacturing also matter), you can do a search at the fun new CARMA database developed by the Center for Global Development. For more on the database, visit here.

Four of the states signing the deal are in the top 10 in power plant emissions (chart below). But Wisconsin is No. 20, Minnesota No. 25, Kansas No. 26, Iowa No. 28, and South Dakota No. 48. Below are the top 10 states in carbon dioxide emissions from power plants, according to CARMA. Maybe the southern governors ought to think about a get-together.

Would the price of crude oil have to rocket up $40 more per barrel for us to see $4-per-gallon gasoline? If you use the back-of-the-envelope calculation that the government's chief energy forecaster employed Monday to gauge how much more pain at the pump is headed our way, it would indeed take nearly $140-per-barrel crude oil to add a dollar to the pump price. But we may not have to wait that long.

For Veterans Day, here's a lack-of-progress report on the shamefully low 11-cents-a-mile travel benefit for disabled or poor veterans, a figure that hasn't been updated in 29 years. As explained here previously, vets who have to drive far for service-related medical care receive less than one quarter of the 48.5-cents-a-mile travel reimbursement that federal and most private-sector workers get for business junkets.

Sens. John Warner and Joseph Lieberman certainly have drawn criticism from both the left and the right for their climate change bill, the America's Climate Security Act of 2007. But have the Virginia Republican and Connecticut independent amassed enough lukewarm support from the middle to gain passage?

The answer may be known soon, since Environment and Public Works Chair Barbara Boxer would like to bring the measure to the Senate floor for a vote before the United Nations Climate Change Conference in Bali on December 3. Boxer views Warner-Lieberman, an economywide, market-based program of capping emissions and allowing businesses leeway to trade pollution permits, as a "strong framework and solid foundation to build upon."

The 25-year-old Center on Budget and Policy Priorities, often viewed as the voice of the poor in Washington, has launched a project on climate change. If the government makes gasoline, heating oil, and coal power more expensive in order to cut fossil fuel emissions, how will that affect the people already suffering because of high energy prices? CBPP estimates that achieving even a relatively modest 15 percent emissions reduction would raise energy costs for the poorest fifth of U.S. households by $750 to $950 a year. CBPP advocates using just a small fraction, 14 percent, of the $50 billion to $300 billion in revenue from industry that Uncle Sam could generate through a greenhouse gas reduction program to offset the increased costs for the poor. Possible offsets include an increase in the earned income tax credit and "climate change rebates" that could be distributed through state assistance programs. I italicized "could generate" because it's not at all clear that lawmakers will design a program that raises this much revenue. Either they'd have to auction off right-to-pollute allowances or institute an outright tax. It's quite possible we'll go the way of the Europeans and simply give the right-to-pollute allowances away to industry.

Are we lurching toward an all-time, inflation-adjusted peak oil price, or have we already made history?

Trilby Lundberg, who compiles the widely watched Lundberg Survey of gasoline prices, has weighed in with the most surprising calculation so far. The peak was passed on October 29, when the $93.53 closing price decisively beat out the March 1981 price of $93.03 in today's dollars, she says in a report published in Convenience Store/Petroleum online magazine.

You can't tell the players without a score card.

No one knows that better than anyone trying to track the presidential candidates' positions on global warming. The League of Conservation Voters is trying to keep up to date with a quick reference chart on candidates' ever evolving platforms on climate change and energy.

One great mystery of the energy price run-up is why the U.S. economy has continued to chug along unperturbed, when three decades ago it was brought to a near standstill by oil shocks. Many commentators, including my colleague James Pethokoukis, point out that we are more efficient than we were in the 1970s, and perhaps stagflation wasn't about the Arab embargo after all.

"Renewable energy" means wind turbines on the prairie or solar panels on urban rooftops, right? Well, yes, but better add to the list the burning of wood and wood byproducts in the furnaces of pulp and paper mills. That is the nation's largest source of renewable energy aside from the massive hydroelectric dams that, because of their impact on river ecosystems, are not environmentalists' favorite choice for power.

Take out wood burning and hydroelectric, and renewable energy's share of the U.S. energy mix falls from the low 7 percent we recently charted to less than 2 percent. Here are a few things to consider about wood burning:

Remember 1978?

Pete Rose smashed his 3,000th hit. The head-pounding Saturday Night Fever soundtrack dominated the charts. Back-to-back films that would sweep the Academy Awards, The Deer Hunter and Coming Home, explored soldiers' tormented return from an unpopular war. And gasoline cost 67 cents a gallon.

If you wonder why it's so hard to get beyond oil, consider the Bush administration official who was forced to apologize for urging his agency's employees to consider buying fuel-efficient cars.

Yes, to make this rather obvious suggestion to help reduce oil dependence is to generate a political firestorm. That's because—you guessed it!—not one of the cars on the gas-saving list was made in the U.S.A.