Environment

Kansas and Wichita quick takes: Wednesday April 25, 2012

by Bob Weeks on April 25, 2012

Income growth in Kansas and Sedgwick County. Emily Behlmann of Wichita Business Journal reports: “Personal income in Kansas grew by 2.71 percent from 2009 to 2010, or by 1.76 percent per capita, according to estimates released Wednesday by the U.S. Bureau of Economic Analysis. That’s slower than the national growth rate of 3.7 percent overall, the bureau reports. And as the database below shows, Sedgwick County’s growth rate was slower than both the national and state averages.” (Database: Kansas counties post slower-than-average personal income growth). This is more evidence that our current economic development policies in Wichita and Sedgwick County are failing. See Wichita economic development isn’t working.

Tax reform is needed in Kansas. A message from Americans for Prosperity, Kansas: “Kansas has the second highest top marginal individual income tax rate amongst neighboring states. Is it any wonder that the state had a net loss of over 17,000 taxpayers between 2000 and 2009? Americans for Prosperity is advocating for aggressive tax reform that includes two key elements: An aggressive and immediate reduction in the individual income tax rate, and a ‘trigger’ that sets aside future state tax revenue growth above three percent to fund future reductions in the income tax. Passage of a tax bill containing these two ingredients will help slow government spending and encourage investment and job-creation. … The economic indicators show that our state needs aggressive tax reform. Key measurements of Kansas’ stagnant growth show: From 2001 to 2010, Kansas ranked 40th in the country in net domestic population migration, representing the smallest growth amongst neighboring states. (Source: U.S. Census Bureau). Kansas lost more than 39,000 private sector jobs from 2001 to 2010. (Source: Bureau of Labor & Statistics). From 2000 to 2009, Kansas ranked 43rd in the United States in taxpayer net migration, resulting in a net loss of 17,574 tax filers. (Source: Bureau of Labor & Statistics). … The longer Kansas waits to enact meaningful tax reform, the further we’ll fall behind. Kansas legislators have a tremendous opportunity to pass a tax bill that lowers the individual income tax burden and establishes a growth trigger to fund future reductions.” AFP has a system to help citizens to contact their legislators by clicking here.

Protect us from onion prices. Specifically, volatility in onion prices, as according to CNN the onion is the only commodity for which futures trading is banned. Futures contracts are the mechanism by which speculation is accomplished. Tim Cavanaugh explains in How Will Obama Protect Us From Onion Speculators? at Reason.

Silencing ALEC. Fred Smith of the Competitive Enterprise Institute contributes this letter to the Wall Street Journal, criticizing those who attempt to shut down debate through intimidation, the target being American Legislative Exchange Council (ALEC): “The attack on the American Legislative Exchange Council (ALEC) is part of a broader attack by those seeking to drive all market voices from the marketplace of ideas. (“Shutting Down ALEC,” Review & Outlook, April 18). As the Founders realized, ‘factions’ — what we now call ‘special interests’ — are an unavoidable aspect of democracy. The Founders’ solution was not to suppress factions, but to ‘set faction against faction’ to ensure vigorous debate. The attack on ALEC runs counter to that spirit. It is a concerted effort to silence one faction by driving productive economic voices from the policy debate. … When businesses seek to expose and reduce the harmful consequences of capricious legislation, that is both their right and good for democracy. When market voices are excluded from the policy debate, the only voices left are those motivated purely by ideology. And as history shows, the greatest harm to nations comes from ideologues who believe they know what’s best for everybody. … Our Founders gave us a system based on the battle of ideas. If critics of the free market believe they have a strong case, they should seek to win that battle openly, rather than by silencing the opposition through intimidation. What ALEC’s opponents seek is nothing less than the sabotage of democracy. It is especially unfortunate when businesses retreat from backing free-market groups like ALEC when they come under pressure. America needs more CEOs willing to stand up for free enterprise. Readers who agree should let those CEOs know now.”

TSA in Wichita, and in general. Wichita meteorologist Mike Smith mentions an incident at the Wichita airport involving TSA handling of a young girl. It’s a nationwide story now. See Latest TSA Outrage — In Wichita This Time . … Speaking of TSA, John Stossel recently had a segment on his television show. Did you know that the security screening at the San Francisco airport is not handled by the TSA? Makes me want to go there. Stossel reports: “A leaked 2007 TSA study found that San Francisco’s private screeners were twice as good at detecting fake bombs as TSA screeners.” More from him at The TSA Just Won’t Let Go: Governments cling to power even when private solutions work best.

An extra comma. A recent article in the Lawrence Journal-World illustrates the harm of using too many commas, a problem, I fear, I have, myself. The article started with this sentence: “A proposal to reduce the Kansas Earned Income Tax Credit would throw thousands of working families into poverty, religious and social service, advocates said Tuesday.” A literal reading of this sentence would indicate a boom in people participating in “religious” and “social service.” That’s not what happened. The unintended use of the last comma changed the meaning of the sentence.

If I wanted America to fail. Americans for Limited Government has a new site named FreeMarketAmerica. Its video If I wanted America to fail is being viewed thousands of times, and is the subject of some controversy. I suggest viewing this powerful statement. In a press release, ALG writes: “The success of Free Market America’s launch shows that Americans are still very interested in the ideals of free markets and limited government, and stopping the Big Government environmentalists nationwide. Our video, ‘If I wanted America to fail,’ has more than half a million views on YouTube in just a few days,’ said Bill Wilson, president of Americans for Limited Government. … ‘The widespread success of this project shows that Americans are willing to stand up and fight for freedom and prosperity and against the heavy hand of big government. With many in the conservative media and conservative bloggers spreading this message and taking our content viral, the Big Green agenda will soon be facing an uphill battle.’”

Tagged as: Americans For Prosperity, Economic development, Environment, Free markets, Government spending, Regulation, Sedgwick county government, Taxation, Wichita city government

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In Kansas, planning will be captured by special interests

by Bob Weeks on April 6, 2012

The government planning process started in south-central Kansas will likely be captured by special interest groups that see ways to benefit from the plan. The public choice school of economics and political science has taught us how special interest groups seek favors from government at enormous costs to society, and we will see this at play again over the next few years.

This week the Sedgwick County Commission voted to participate in a HUD Sustainable Communities Regional Planning Grant. While some justified their votes in favor of the plan because “it’s only a plan,” once the planning process begins, special interests plot how to benefit themselves at the expense of the general public. Then once the plan is formed, it’s nearly impossible to revise it, no matter how evident the need.

An example of how much reverence is given to government plans comes right from the U.S. Supreme Court in the decision Kelo v. New London, in which the Court decided that government could use the power of eminent domain to take one person’s property and transfer it to someone else for the purposes of economic development. In his opinion for the Court, Justice Stevens cited the plan: “The City has carefully formulated an economic development plan that it believes will provide appreciable benefits to the community.” Here we see the importance of the plan and due reverence given to it.

Stevens followed up, giving even more weight to the plan: “To effectuate this plan, the City has invoked a state statute that specifically authorizes the use of eminent domain to promote economic development. Given the comprehensive character of the plan, the thorough deliberation that preceded its adoption, and the limited scope of our review, it is appropriate for us, as it was in Berman, to resolve the challenges of the individual owners, not on a piecemeal basis, but rather in light of the entire plan. Because that plan unquestionably serves a public purpose, the takings challenged here satisfy the public use requirement of the Fifth Amendment.”

To Stevens, the fact that the plan was comprehensive was a factor in favor of its upholding. The sustainable communities plan, likewise, is nothing but comprehensive, as described by county manager Bill Buchanan in a letter to commissioners: “[the plan will] consist of multi-jurisdictional planning efforts that integrate housing, land use, economic and workforce development, transportation, and infrastructure investments in a manner that empowers jurisdictions to consider the interdependent challenges of economic prosperity, social equity, energy use and climate change, and public health and environmental impact.”

That pretty much covers it all. When you’re charged with promoting economic prosperity, defending earth against climate change, and promoting public health, there is no limit to the types of laws you might consider.

Who will plan?

The American Planning Association praised the Court’s notice of the importance of a plan, writing “This decision underscores the importance for a community to have a comprehensive development plan formulated through a democratic planning process with meaningful public participation by everyone.”

But these plans are rarely by and for the public. Almost always the government planning process is taken over and captured by special interests. We see this in public schools, where the planning and campaigning for new facilities is taken over by architectural and construction firms that see school building as a way to profit. It does not matter to them whether the schools are needed.

Our highway planning is hijacked by construction firms that stand to benefit, whether or not new roads are actually needed.

Our planning process for downtown Wichita is run by special interest groups that believe that downtown has a special moral imperative, and another group that sees downtown as just another way to profit at taxpayer expense. Both believe that taxpayers across Wichita, Kansas, and even the entire country must pay to implement their vision. As shown in Kansas and Wichita need pay-to-play laws the special interests that benefit from public spending on downtown make heavy political campaign contributions to nearly all members of the Wichita City Council. They don’t have a political ideology. They contribute only because they know council members will be voting to give them money.

In Wichita’s last school bond election, 72 percent of the contributions, both in-kind and cash, was given by contractors, architects, engineering firms and others who directly stand to benefit from new school construction, no matter whether schools are actually needed. The firm of Schaefer Johnson Cox Frey Architecture led the way in making these contributions. It’s not surprising that this firm was awarded a no-bid contract for plan management services for the bond issue valued at $3.7 million. This firm will undoubtedly earn millions more for those projects on which it serves as architect.

The special interest groups that benefit from highway construction: They formed a group called Economic Lifelines. It says it was formed to “provide the grassroots support for Comprehensive Transportation Programs in Kansas.” Its motto is “Stimulating economic vitality through leadership in infrastructure development.”

A look at the membership role, however, lets us know whose economic roots are being stimulated. Membership is stocked with names like AFL-CIO, Foley Equipment Company, Heavy Constructors Association of Greater Kansas City, Kansas Aggregate & Concrete Associations, Kansas Asphalt Pavement Association, Kansas Contractors Association, Kansas Society of Professional Engineers, and PCA South Central Cement Promotion Association. Groups and companies like these have an economic interest in building more roads and highways, whether or not the state actually needs them.

The planners themselves are a special interest group, too. They need jobs. Like most government bureaucrats, they “profit” from increasing their power and influence, and by expansion of their budgets and staffs. So when Sedgwick County Commissioner Jim Skelton asks a professional planner questions about the desirability of planning, what answer does he think he will get? It’s not that the planners are not honest people. But they have a vested economic and professional interest in seeing that we have more government planning, not less.

And we have evidence that planners watch out for themselves. It is not disputed that this planning grant benefits Regional Economic Area Partnership (REAP). Sedgwick County Commissioner Richard Ranzau says that John Schlegel, Wichita’s Director of Planning, told him that “acceptance of this grant will take REAP to another level, because right now they are struggling, and this will help plot the course for REAP.” He said that REAP, which is housed at the Hugo Wall School of Public Affairs at Wichita State University, needs to expand its role and authority in order to give it “something to do.”

We see that REAP is another special interest group seeking to benefit itself. In this case, our best hope is that REAP engages in merely make-work, that the plan it produces is put on a shelf and ignored, and that the only harm to us is the $1.5 million cost of the plan.

By the way, did you know that Sedgwick County Commissioner Dave Unruh, who voted in favor of the plan that benefits REAP, is a board member of REAP, and may become the next chairman? Special interest groups know how to play the political game, that’s for sure.

Tagged as: Dave Unruh, Downtown Wichita revitalization, Economic development, Economics, Eminent domain, Environment, Government planning, Interventionism, Jim Skelton, Regulation, Richard Ranzau, Schaefer Johnson Cox Frey, Sedgwick county government, Supreme Court

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Wind tax credits are government spending in disguise

by Bob Weeks on March 29, 2012

Recently Kansas Governor Sam Brownback and U.S. Senator Jerry Moran of Kansas made the case for extending the production tax credit (PTC) for the production of electrical power by wind.

The PTC pays generators of wind power 2.2 cents per kilowatt-hour produced, a high rate of subsidy for a product that sells for 9.5 cents, according to a March 2010 illustration provided by Westar.

Brownback and Moran contend that this tax credit is necessary to let the industry “complete its transformation from being a high tech startup to becoming cost competitive in the energy marketplace.” But wind is not a new industry. The PTC has been in place for twenty years. If an industry can’t get established in that period, when will it be ready to stand in its own?

The authors also contend that canceling the PTC will result in a “tax hike on wind energy companies.” To some extent this is true — but only because the industry has enjoyed preferential tax treatment that it should never have received.

The proper way to view the PTC is as a government spending program in disguise. That’s the true economic effect of tax credits. They are equivalent to grants of money.

Amazingly, Brownback and Moran do not realize this — at least if we take them at their written word as they describe the PTC: “These are not cash handouts; they are reductions in taxes that help cover the cost of doing business.” (Emphasis added.)

It is the mixing of spending programs with taxation that leads these politicians to wrongly claim that tax credits are not cash handouts. But not everyone falls for this seductive trap. In an article in Cato Institute’s Regulation magazine, Edward D. Kleinbard explains:

Specialists term these synthetic government spending programs “tax expenditures.” Tax expenditures are really spending programs, not tax rollbacks, because the missing tax revenues must be financed by more taxes on somebody else. … Tax expenditures dissolve the boundaries between government revenues and government spending. They reduce both the coherence of the tax law and our ability to conceptualize the very size and activities of our government. (The Hidden Hand of Government Spending, Fall 2010)

U.S. Representative Mike Pompeo of Wichita recognized the cost of paying for tax credit expenditures when he recently wrote: “Moreover, what about the jobs lost because everyone else’s taxes went up to pay for the subsidy and to pay for the high utility bills from wind-powered energy? There will be no ribbon-cuttings for those out-of-work families.”

This is an example of the seen and unseen, where thinking is confined only to what is easily seen. Many years ago Frederic Bastiat explained this problem in his famous parable of the broken window. More recently the school of public choice economics has warned us the problem of concentrated benefits and dispersed costs. Politicians hope we won’t notice.

When Brownback and Moran write of the loss of income to those who profit from wind power, we should remember that these profits do not arise from transactions between willing partners. Instead, they result from politicians who override the judgment of free people and free markets with their own political preferences — along with looking out for the parochial interests of the home state. We need less of this type of wind power.

Tagged as: Capitalism, Environment, Free markets, Government spending, Jerry Moran, Mike Pompeo, Sam Brownback, Subsidy, Taxation, Wind power

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Kansas and Wichita quick takes: Thursday March 29, 2012

by Bob Weeks on March 29, 2012

Sustainable development. Sedgwick County Commissioner Richard Ranzau writes that next week the commission will vote on the issue of sustainable development, and whether Sedgwick County should participate in a planning process. Writes Ranzau: “Sedgwick County will be voting on this issue next Wednesday, April 4th, 2012. Those of you that have concerns about this need to speak up now. Please email and call the commissioners and encourage them to vote NO on this. If you are a property owner, business owner, home owner, builder, developer, farmer, or taxpayer you should strongly oppose this agenda. Now is the time to stop this. This is President Obama’s plan to use HUD, DOT, and EPA to implement Sustainable Development/Smart Growth/UN Agenda 21.” Ranzau has written on this issue. His paper is at Sustainable Development and U.N. Agenda 21: Economic Development or Economic Destruction? Contact information for commissioners may be found at Board of County Commissioners. As of this writing the agenda and explanatory material for the April 4th meeting is not available. When it is, it can be found at the same page.

Pachyderms to feature talk on sustainable development. On a related matter, this Friday (March 30rd) the Wichita Pachyderm Club features Tom DeWeese, President, American Policy Center, speaking on the topic “U.N. Agenda 21: Sustainable Development.” DeWeese is one of the nation’s leading advocates of individual liberty, free enterprise, private property rights, personal privacy, back-to-basics education and American sovereignty and independence. … The public is welcome and encouraged to attend Wichita Pachyderm meetings. For more information click on Wichita Pachyderm Club.

Climate models. William Happer, professor of physics at Princeton, calls attention to the problems of modern climate science in the pages of the Wall Street Journal. He asks: “What is happening to global temperatures in reality? The answer is: almost nothing for more than 10 years. … The lack of any statistically significant warming for over a decade has made it more difficult for the United Nations Intergovernmental Panel on Climate Change (IPCC) and its supporters to demonize the atmospheric gas CO2 which is released when fossil fuels are burned.” While there has been warming over the past two centuries, Happer warns of linking this to the activity of mankind: “There has indeed been some warming, perhaps about 0.8 degrees Celsius, since the end of the so-called Little Ice Age in the early 1800s. Some of that warming has probably come from increased amounts of CO2, but the timing of the warming — much of it before CO2 levels had increased appreciably — suggests that a substantial fraction of the warming is from natural causes that have nothing to do with mankind.” While we need high-quality science regarding the earth’s climate, the current climate models are not providing that: “It is easy to be confused about climate, because we are constantly being warned about the horrible things that will happen or are already happening as a result of mankind’s use of fossil fuels. But these ominous predictions are based on computer models. It is important to distinguish between what the climate is actually doing and what computer models predict. The observed response of the climate to more CO2 is not in good agreement with model predictions.” … The complete article in the Wall Street Journal (no subscription required) is Global Warming Models Are Wrong Again: The observed response of the climate to more CO2 is not in good agreement with predictions. … Some will discount this article because Happer’s specialty is modern optics, optical and radiofrequency spectroscopy of atoms and molecules, and spin-polarized atoms and nuclei — not climate science. But, we see the problems with modern climate science and its predictive abilities.

Shy regulators. The Obama administration is so out of touch with the public that it appears shy about publicity over its actions. The Hill reports: “The Obama administration announced landmark carbon emissions standards for new power plants Tuesday, but hardly shouted from the rooftops about them. The administration rolled out the proposal with relatively little fanfare, and President Obama — who was in South Korea at nuclear security summit — did not issue a statement about the regulation. In contrast, when the Environmental Protection Agency issued final rules to control power plant mercury emissions in December, Obama praised them as major public health protections while touting White House efforts to ensure they don’t affect power grid reliability.” … More at White House, rather quietly, advances climate change agenda.

Just say no to taxes. Those who reject tax increases under all conditions are often described unflatteringly. The New York Times house conservative David Brooks has called them “fanatics” with “no sense of moral decency.” William Voegeli, writing in City Journal explains why we should not consider higher taxes as a solution to problems. “In rejecting tax hikes, Republicans aren’t trading in fanaticism. Rather, they’re confronting a governing failure — an abiding lack of candor about what our welfare state costs — that voters grasp but Democrats refuse to admit.” … The problem is soaring spending, growing faster than the economy: “What we can say is that over the last 40 years, government revenues have kept pace with economic growth while government spending has run steadily ahead of it. … Gross Domestic Product and federal revenues, both expressed in per-capita terms and adjusted for inflation, were about two and a half times as large at the end of the period as at the beginning. Federal expenditures were three times as large.” It is welfare-state expenditures that have grown the fastest, and by far. … Voegeli lays the problem at the feet of the Democrats: “For years, the Democratic Party’s raison d’être has been to establish, defend, and expand the welfare state. The Democrats could have told us all along — forthrightly, scrupulously, and unambiguously — that their project would cost a lot of money and that, should economic growth be insufficient to pay for it, big tax increases would be necessary. Had they done so, they would be in a strong position to argue that the terms of the deal they struck with yesterday’s voters oblige today’s Americans to pay higher taxes. But that’s not what they did.” … Much more to read at Not a Penny More: The case for antitax absolutism.

Tagged as: Climate change, Economic development, Environment, Global warming alarmism, Government spending, Regulation, Richard Ranzau, Taxation, Wichita Pachyderm Club

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Brownback, Moran wrong on wind tax credits

by Bob Weeks on March 19, 2012

In the following commentary, Kansas Governor Sam Brownback and U.S. Senator Jerry Moran of Kansas make the case for extending the production tax credit (PTC) for the production of electrical power by wind.

The PTC pays generators of wind power 2.2 cents per kilowatt-hour produced. To place that in context, a typical Westar customer in Kansas that uses 1,000 kilowatt-hours in the summer pays $95.22 (before local sales tax), for a rate of 9.5 cents per kilowatt-hour. (This is the total cost including energy charge, fuel charge, transmission charge, environment cost recovery rider, property tax surcharge, and franchise fee, according to a March 2010 illustration provided by Westar.) So 2.2 cents is a high rate of subsidy for a product that sells for 9.5 cents.

The authors contend that the PTC is necessary to let the wind power industry “complete its transformation from being a high tech startup to becoming cost competitive in the energy marketplace.” The problem with this line of argument is that wind is not an industry in its infancy. The PTC has been in place since 1992, a period of twenty years. If an industry can’t get established in that period, when will it be ready to stand in its own?

The authors also contend that canceling the PTC is, in effect, a “tax hike on wind energy companies.” To some extent this is true — but only because the industry has enjoyed preferential tax treatment that it should never have received, coupled with a misunderstanding of the tax credit mechanism.

The proper way to view the PTC is as a government spending program. That’s the true economic effect of tax credits. Only recently are Americans coming to realize this, and as a result, the term “tax expenditures” is coming into use to accurately characterize the mechanism of tax credits.

Amazingly, Brownback and Moran do not realize this, at least if we take them at their written word when they write: “But the wind PTC is a winning solution because it allows companies to keep more of their own dollars in exchange for the production of energy. These are not cash handouts; they are reductions in taxes that help cover the cost of doing business.” (Emphasis added.)

It is the mixing of spending programs with taxation that leads these politicians to wrongly claim that tax credits are not cash handouts. Fortunately, not everyone falls for this seductive trap. In an excellent article on the topic that appeared in Cato Institute’s Regulation magazine, Edward D. Kleinbard explains:

Specialists term these synthetic government spending programs “tax expenditures.” Tax expenditures are really spending programs, not tax rollbacks, because the missing tax revenues must be financed by more taxes on somebody else. Like any other form of deficit spending, a targeted tax break without a revenue offset simply means more deficits (and ultimately more taxes); a targeted tax break coupled with a specific revenue “payfor” means that one group of Americans is required to pay (in the form of higher taxes) for a subsidy to be delivered to others through the mechanism of the tax system. … Tax expenditures dissolve the boundaries between government revenues and government spending. They reduce both the coherence of the tax law and our ability to conceptualize the very size and activities of our government. (The Hidden Hand of Government Spending, Fall 2010)

So when Brownback and Moran write of the loss of income to those who profit from wind power, we should remember that these profits do not arise from transactions between willing partners. Instead, they result from politicians like these who are willing to override the judgment of free people and free markets with their own political preferences — along with looking out for the parochial interests of the home state. We need less of this type of wind power.

Strengthening our Nation’s Domestic Energy Supply

By Kansas Governor Sam Brownback and U.S. Senator Jerry Moran of Kansas.

The increasing cost of conducting business in the United States threatens innovation and investment in new technologies. In today’s unstable business environment, American industries are understandably reluctant to invest the time and resources necessary to grow their businesses. This is especially true for domestic energy production.

Energy production is one of the most highly regulated markets in the United States today. Government policies are hurting our country’s ability to compete within the global economy, limiting our domestic energy supply and driving up the cost of energy for consumers. To ensure Kansans have access to a reliable and affordable supply of energy, we must develop more of our nation’s natural resources.

One resource that is plentiful in Kansas is wind. Our state has the second highest wind resource potential in our country and leads the nation in wind production capacity currently under construction. If we expect the wind energy industry to provide for our country’s future energy needs and make long-term investments in their businesses, Congress must reauthorize the wind production tax credit (PTC) that expires this year. By extending the wind PTC, Congress will allow the wind industry to complete its transformation from being a high tech startup to becoming cost competitive in the energy marketplace. Failure to do so will result in a tax hike on wind energy companies and will only further delay this industry’s ability to compete.

There are those who view government intervention in the energy sector as picking winners and losers. But the wind PTC is a winning solution because it allows companies to keep more of their own dollars in exchange for the production of energy. These are not cash handouts; they are reductions in taxes that help cover the cost of doing business. Unlike President Obama’s failed stimulus plan that rewards individual, unproven companies like Solyndra with cash handouts, the wind PTC is an industry tax credit that has led to $20 billion in annual private investment in our energy infrastructure.

Today, the American wind industry includes more than 400 manufacturing facilities in 43 states. In 2005, just 25 percent of the value of a wind turbine was produced in the United States compared to more than 60 percent today. Because of their close proximity to wind farms, American workers can produce the critical components at a lower cost than their European and Asian counterparts. As more components are manufactured in the United States and not overseas, the cost to produce electricity from wind farms will be further driven down.

If the wind PTC is allowed to expire, local economies across our state will suffer. Kansas counties will lose $3.7 million in annual payments from wind companies. Kansas landowners will lose nearly $4 million annually in additional income they earn from leasing or selling their land for wind farms. And every Kansan will ultimately be affected because the power generated by these wind facilities contributes to our supply of electricity. By eliminating additional sources of electricity, utility rates will climb.

To meet our country’s energy needs and remain competitive in the global market, Congress must develop a national energy policy. Recent events in the Middle East have demonstrated once again the importance of having access to an ample domestic energy supply so we are less dependent on foreign sources. If Congress fails, Kansans will soon be paying much higher energy prices — for the gas to fill up our cars, for the fuel to power our farm equipment, and for the electricity to turn on our lights.

Temporarily extending the wind PTC is not about picking winners and losers — it is about preparing our country to meet our growing energy demand. Rather than make it more difficult for the private sector to develop energy sources, we should lower taxes, reduce regulations, and allow the private sector to succeed in the free market. In turn, the wind industry will grow and become fully competitive — no longer needing the wind PTC. By strengthening American energy production, our country’s future will be stronger and more secure.

Tagged as: Capitalism, Environment, Free markets, Government spending, Jerry Moran, Mike Pompeo, Sam Brownback, Subsidy, Taxation, Wind power

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Wind energy split in Kansas

by Bob Weeks on March 7, 2012

Despite the promise as a temporary subsidy when it started twenty years ago, wind energy is reliant on government handouts. Today’s Wall Street Journal brings this into focus, writing: “The truth is that those giant wind turbines from Maine to California won’t turn without burning through billions upon billions of taxpayer dollars. In 2010 the industry received some $5 billion in subsidies for nearly every stage of wind production.” (See Republicans Blow With the Wind: Another industry wants to keep its taxpayer subsidies..)

The piece also properly refutes the argument that oil and gas receives the same type of tax credits as does wind and other renewable energy forms. “The most dishonest claim is that wind and solar deserve to be wards of the state because the oil and gas industry has also received federal support. That’s the $4 billion a year in tax breaks for oil and gas (which all manufacturers receive), but the oil and gas industry still pays tens of billions in federal taxes every year.” There’s a difference between tax deductions, which reduce taxable income, and tax credits, which are government spending programs in disguise.

Despite this: Senator Jerry Moran of Kansas has joined with five other senators in urging the Senate to pass an extension of the subsidy program for wind power. Kansas, it should be noted, has a lot of wind. Our former governors Sebelius and Parkinson bought into the green energy fantasy, and current governor Kansas Governor Sam Brownback agrees, having penned op-eds in support of wind energy subsidy programs and usage mandates. Wichita Mayor Carl Brewer has been busy promoting Wichita as a site for wind energy-related industry, despite its failing economics based on government handouts.

(By the way, it’s not only wind that is receiving subsidy on Kansas. Recently the Department of Energy announced the award of a $132.4 million loan guarantee to a cellulosic ethanol plant in southwest Kansas. At the time of the award, no commercial cellulosic ethanol had been produced in America. See Kansas and its own Solyndra.)

Contrast this with U.S. Representative Mike Pompeo of Wichita, who has introduced legislation to end all tax credits related to energy production. Writes the Journal: “Here’s a better idea. Kill all energy subsidies– renewable and nonrenewable, starting with the wind tax credit, and use the savings to shave two or three percentage points off America’s corporate income tax. Kansas Congressman Mike Pompeo has a bill to do so. This would do more to create jobs than attempting to pick energy winners and losers. Mandating that American families and businesses use expensive electricity doesn’t create jobs. It destroys them.”

Republicans Blow With the Wind

Another industry wants to keep its taxpayer subsidies.

Congress finally ended decades of tax credits for ethanol in December, a small triumph for taxpayers. Now comes another test as the wind-power industry lobbies for a $7 billion renewal of its production tax credit.

The renewable energy tax credit — mostly for wind and solar power — started in 1992 as a “temporary” benefit for an infant industry. Twenty years later, the industry wants another four years on the dole, and Senator Jeff Bingaman of New Mexico has introduced a national renewable-energy mandate so consumers will be required to buy wind and solar power no matter how high the cost.

The truth is that those giant wind turbines from Maine to California won’t turn without burning through billions upon billions of taxpayer dollars. In 2010 the industry received some $5 billon in subsidies for nearly every stage of wind production.

Continue reading at the Wall Street Journal (subscription required)

Tagged as: Carl Brewer, Economics, Environment, Government spending, Jerry Moran, Mike Pompeo, Sam Brownback, Subsidy, Wind power

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Occupy Koch Town protestors ignore facts

by Guest Author on February 16, 2012

Below, Paul Soutar of Kansas Watchdog provides more evidence that the campaign against Wichita-based Koch Industries regarding their alleged involvement in the Keystone XL pipeline is not based on facts. Besides this article, U.S. Representative Mike Pompeo of Wichita has also written on this issue in The Democrats continue unjustified attacks on taxpayers and job creators.

Another inconvenient fact is that if the Canadian oil is not sold to the U.S., it will be sold to and consumed in China. If we are concerned about greenhouse gas emissions leading to climate change, it should be noted that it doesn’t matter where the greenhouse gases are produced. The effect is worldwide. But as we know, the radical environmental movement cares nothing for facts in their war on capitalism and human progress.

Facts Refute Environmentalist Claims About Keystone XL Pipeline

By Paul Soutar. Originally published at Kansas Watchdog.

Protesters are gathering on the Wichita State University campus this weekend for a Sierra Club-sponsored Occupy Koch Town protest against the Keystone XL oil pipeline and Koch Industries, Inc. Koch and its subsidiaries are involved in a wide array of manufacturing, trading and investments including petroleum refining and distribution.

Many Keystone XL opponents have focused on Koch, claiming its Flint Hills Resources Canada subsidiary’s status as an intervener in the regulatory approval process in Canada proves Koch is a party to the pipeline project. Keystone XL would carry petroleum from Canadian oil sands to the U.S. Gulf coast.

In a Jan. 25 House Energy and Commerce Committee hearing, California U.S. Rep. Henry Waxman, D-District 30, demanded that the Koch brothers, Charles and David, or a representative of Koch Industries appear before the committee to explain their involvement in the pipeline.

Philip Ellender, president of Koch Cos. Public Sector, which encompasses legal, communication, community relations and government relations, responded to Waxman on a Koch Industries website:

Koch has consistently and repeatedly stated (including here, here, here, and here) that we have no financial interest whatsoever in the Keystone pipeline. In addition, this fact has been verified by TransCanada’s CEO here.

Russ Girling, CEO of TransCanada, owner and builder of the Keystone pipelines, addressed criticism of the pipeline and supposed collusion with the Koch brothers in a Nov. 1 conference call to discuss TransCanada’s earnings. “I can tell you that Koch (Industries Inc.) isn’t a shipper and I’ve never met the Koch brothers before.”A March 2010 document from Canada’s National Energy Board (NEB) approving the pipeline does not mention Koch or its subsidiary, Flint Hills Resources Canada, on any of its 168 pages.

The report does note that on June 16, 2009, TransCanada Corporation became the sole owner of the Keystone Pipeline System, acquiring ConocoPhillips’ interest in the pipeline.

A map of the existing Keystone and planned Keystone XL pipelines shows that Koch’s two refineries in the 48 contiguous states at Pine Bend, Minn., and Corpus Christi, Texas, are not on or near the pipeline routes. Koch also has a refinery in North Pole, Alaska.

Koch does have substantial interests in Canadian oil though, including the thick oil sands mined in Alberta. Those interests are precisely why Flint Hills Resources Canada requested intervener status in the pipeline approval process in 2009.

Flint Hills’ application to Canada’s National Energy Board for intervener status said, “Flint Hills Resources Canada LP is among Canada’s largest crude oil purchasers, shippers and exporters, coordinating supply for its refinery in Pine Bend, Minnesota. Consequently, Flint Hills has a direct and substantial interest in the application.”

Critics have claimed that statement is a smoking gun proving Koch is a party to the pipeline or will benefit from its construction.

Greg Stringham, Canadian Association of Petroleum Producers (CAPP) vice president of markets and oil sands, told KansasWatchdog, “Their intervention itself is not a trigger that says aha, they have a commercial interest or are a shipper on this pipeline.”

The US Legal, Inc. definitions website says an intervener is, “A party who does not have a substantial and direct interest but has clearly ascertainable interests and perspectives essential to a judicial determination and whose standing has been granted by the court for all or a portion of the proceedings.”

US Legal, Inc. provides free legal information, legal forms and help with finding an attorney for the stated purpose of breaking down barriers to legal information.

Stringham said anyone — business, organization or individual — can be an intervener in NEB regulatory proceedings as long as they can show some potential impact, good or bad, from the proposed action. “Then they make a decision whether they’re going to actively engage through evidence and cross examination or whether they’re just there for interest, to get materials and monitor the situation.”

Market interest

Like Koch, Stringham said CAPP is an intervener in the pipeline approval process, because the pipeline will have a direct impact on the Canadian oil market. Stringham said:

The fact that it’s an intervention for interest does not mean that there is a financial ownership or shipping interest. It’s really to make sure that they understand what’s going on in the process and that they have some connection to the project that can be either positive and beneficiary or potentially negative to them. That’s why I believe Koch has intervened in this process.

The Canadian pipeline company Enbridge, Inc.; Marathon Oil Corp. and Britain’s oil giant BP are also among the 29 interveners in the pipeline application. So is the environmental activist organization Sierra Club.

Keystone XL would compete with the Enbridge pipeline that carries the thick bitumen oil from Hardisty, Alberta, for delivery to Koch’s Pine Bend, Minn., refinery. If supplies prove insufficient for both pipelines, Stringham said, Koch could be at a competitive disadvantage since it is not a shipper on the Keystone pipelines.

The National Energy Board’s approval document noted:

Keystone XL shippers have indicated that they are seeking competitive alternatives, and by providing access to a new market, Keystone XL would be expanding shipper choice. The Board places considerable weight on the fact that Keystone XL shippers have made a market decision to enter into long-term shipping arrangements negotiated through a transparent competitive process. New pipelines connecting producing regions with consuming regions change market dynamics in ways that cannot easily be predicted.

Political motivation

On Feb.10, 2011 Reuters published an Inside Climate News article that started the Koch-Keystone explosion. The third paragraph put a political spin on the Koch claims.

What’s been left out of the ferocious debate over the pipeline, however, is the prospect that if President Obama allows a permit for the Keystone XL to be granted, he would be handing a big victory and great financial opportunity to Charles and David Koch, his bitterest political enemies and among the most powerful opponents of his clean economy agenda.

Former U.S. Solicitor General Theodore Olsen, in a Wall Street Journal op-ed, highlighted the political dimension of attacks on the Kochs and recent attempts to compel their testimony before Congress.

When Joseph McCarthy engaged in comparable bullying, oppression and slander from his powerful position in the Senate, he was censured by his colleagues and died in disgrace. “McCarthyism,” defined by Webster’s as the “use of unfair investigative and accusatory methods to suppress opposition,” will forever be synonymous with un-Americanism.

In this country, we regard the use of official power to oppress or intimidate private citizens as a despicable abuse of authority and entirely alien to our system of a government of laws. The architects of our Constitution meticulously erected a system of separated powers, and checks and balances, precisely in order to inhibit the exercise of tyrannical power by governmental officials.

Market and environmental realities

Canada produces about 2.7 million barrels of oil per day with about 1.6 million going to the United States. “About a million of that comes from the oil sands,” Stringham said. “All of that moves through the existing pipeline systems.”

Two Kansas refineries, the Holly Frontier refinery in El Dorado and National Cooperative Refinery Association’s facility in McPherson, refine Canadian oil, including from oil sands, delivered over existing pipelines.

With or without the Keystone XL, oil from Canada’s oil sands will continue to go to markets, according to Stringham. “We have been investigating a number of alternatives. Keystone XL clearly is the most direct route to get to the gulf coast and that’s why the market really spoke up and said this is what we want,” he said.

In a 2010 op-ed in the National Journal, Charles T. Drevna, president of American Fuel & Petrochemical Manufacturers, presciently said, “Canada’s leaders have made clear that if the U.S. won’t buy their oil, they won’t abandon development of their oil sands. Instead, they have said they will ship Canadian oil across the Pacific to China and other Asian nations. That will result in America having to import more oil from other countries. Sending Canadian oil to Asia would actually increase global greenhouse gas emissions, according to a 2010 study by Barr Engineering.”

The Barr study, Low Carbon Fuel Standard “Crude Shuffle” Greenhouse Gas Impacts Analysis (pdf), concluded that transporting oil to Asia for refining would mean not just a lost opportunity for the U.S., but increased greenhouse gas emissions because of transportation by ship instead of by pipeline and less stringent refinery emission standards.

TransCanada has said it will continue to seek approval of the Keystone XL and work is proceeding on alternatives to Keystone XL, Stringham said. “There are other pipeline routes being investigated by Enbridge and BP and a number of others as well to move this oil,” he said.

He said Canada’s oil market is looking at diverse opportunities beyond the United States. “We are looking to the West Coast, which could move it on to tankers. We looked at Asia, it is one of the options, but once it gets to the West Coast, it can also move to the California market,” he said.

Stringham said a proposal for Enbridge to build a pipeline carrying oil to the West Coast has more than 4,000 interveners.

Occupy Koch Town promotional materials say they’ll also protest against the Kansas Policy Institute. KPI helped launch KansasWatchdog.org in 2009 but is no longer affiliated with this site.

Tagged as: Capitalism, Climate change, Environment, Kansas Watchdog, Koch Industries, Paul Soutar

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An ill wind blows in Kansas: The politics of renewable energy

by Guest Author on February 13, 2012

Kansas Representative Charlotte O’Hara, who represents Kansas House District 27 in southern Johnson County, offers a look at the politics surrounding wind power in Kansas. Besides O’Neal, other prominent supporters of renewable energy in Kansas include Kansas Governor Sam Brownback, who has been vocal in his support of wind power. So too has been Wichita Mayor Carl Brewer, who has been busy promoting Wichita as a site for wind energy-related industry. Contrast this with U.S. Representative Mike Pompeo of Wichita, who has introduced legislation to end all tax credits related to energy production.

An ill wind blows in Kansas: The politics of renewable energy

By Kansas Representative Charlotte O’Hara

The world of Topeka politics continue to amaze, frustrate, entertain and humor me in my second year of representing the 27th District. Case in point:

On Tuesday of this week during the Republican Caucus discussion of HB 2446 (concerning the expansion of definition of alternative energy to include storage facilities/devices) this fact came to light: The Kansas Legislature, in 2009, passed the Renewable Energy Standards Act (KSA 66-1258), which requires 10 percent of our power companies’ capacity to be from renewable energy sources by 2011, 15 percent in 2016 and 20 percent in 2020.

So, being the conservative that I am, I suggested an amendment that would freeze renewable energy standards to the current 10 percent. Rep. Dennis Hedke carried the amendment on the floor. The amendment received 43 votes.

Only 43 out of 125 representatives voted to stop strangling the Kansas economy and burdening consumers with high energy costs of these draconian requirements. According to the Heritage Foundation, just a 15% renewable energy mandate would increase electricity prices for consumers by as much as 11.3 percent!

After the defeat of the amendment, Rep. Forrest Knox introduced an amendment that would tie the freeze to licensing of the Holcomb Power Plant, which currently has been stopped by federal court and another environmental impact study has been ordered. The Knox amendment received 65 votes, a majority. However Speaker of the House Mike O’Neal (who voted against both amendments) interceded and referred the amended bill, HB 2446, back to committee (with the approval of the House members) and removing it from final action.

So, why would Speaker O’Neal oppose a freeze at the current 10% on the Kansas Renewable Standard Act? Well, let’s see. Could it possibly be that these required increased standards in Kansas law is why Siemens chose Hutchinson (O’Neal’s district) in 2009 to locate a $35 million wind turbine plant? Is this the type of crony capitalism we want to build our economic future on in Kansas?

Another wrinkle in the future of renewable energy is that extension of federal tax credits is in doubt. Those credits currently subsidize renewables by 2.1 cents per kw. Without the federal, state and local tax incentives, abatements and exemptions, the economics of renewable energy collapses.

Here is a link to Heritage Foundation on this issue of renewable energy subsidies: No More Energy Subsidies: Prevent the New, Repeal the Old.

It always puzzles me why after the fall of the Soviet Union, government mandated / subsidized / incentivized industries continue to flourish in the U.S. and, in particular, here in our own Kansas backyard.

So, if you would like to register your concerns about the Speaker’s action to circumvent final action on HB 2446, which as amended would freeze Kansas Renewable Energy Act requirement at 10 percent and stop it from going to 20 percent, call his office: 785-296-2302 or e-mail at Mike.ONeal@house.ks.gov

Tagged as: Capitalism, Carl Brewer, Environment, Kansas legislature, Kansas state government, Mike Pompeo, Sam Brownback, Wind power

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Fracking movie proposed

by Bob Weeks on February 8, 2012

Americans are just starting to become aware of the tremendous potential of hydraulic fracturing, or fracking, as a method of producing oil, and especially, natural gas. Kansas has recently seen a flurry of activity in this area, and fracking is expected to provide many thousands of jobs for Kansas, along with cheaper energy.

Filmmakers Ann McElhinney and Phelim McAleer produced the 2009 film Not Evil Just Wrong that uncovered the myths and misinformation spread by radical environmental extremists.

Now the two have looked at fracking and hope to produce a documentary film on this topic. They hope to use a new method of financing the film — crowdfunding. Following is a press release announcing this effort. The link to the funding page is FrackNation: A documentary project in Los Angeles, CA by Ann and Phelim Media LLC.

Controversial filmmakers announce crowdfunding campaign for documentary to “expose the truth about fracking”

“FrackNation” investigates the alarming and apparently misleading claims made about fracking, and looks at the benefits the process can bring to some of the poorest communities in the U.S. and across the planet.

Los Angeles (February 8, 2012) — Controversial filmmakers Ann McElhinney and Phelim McAleer announced a crowdfunding campaign today for their new documentary, FrackNation.

The feature-length film looks at the process of fracking for natural gas, demolishing much of the scaremongering surrounding the process and featuring the millions whose lives have been positively transformed by this emerging industry. FrackNation investigates the health claims surrounding the process, and reveals the startling lack of scientific evidence to substantiate them.

Controversially, McAleer and McElhinney are fundraising for FrackNation on Kickstarter.com.

“Normally, Kickstarter projects are pro-radical environmentalism,” said McAleer. “FrackNation will be the first documentary funded through Kickstarter to challenge the environmental establishment. It will appeal to the workers and small farmers who know the truth, but never see it represented in modern documentaries.”

In a unique fundraising move, McAleer and McElhinney, a husband and wife filmmaking team, have announced that everyone who helps pay for FrackNation will become an executive producer on the film. “This will be a documentary funded by the people for the people,” said McAleer.

FrackNation comes on the heels of a new anti-fracking film is due to be released by activist filmmaker Josh Fox. Fox made Gasland, an Oscar-nominated film, which propelled fears about fracking into the public arena. Fox is now planning a HBO-funded Gasland sequel. Fox has received $750,000 to make the new documentary.

“The Hollywood/environmental establishment has wheeled out big bucks to tell its story,” said Ann McElhinney. “We’re just asking for $150,000. Ours will be a grassroots film telling real stories about real people across America and the world.”

The filmmakers say the documentary was inspired when they encountered journalistic censorship. McAleer questioned Fox at a Q&A following a screening of the film, during which Fox admitted the people could light their tap water long before fracking was introduced. The “lighting water” scene is one of the most famous parts of Gasland, and led to many of the scares surrounding the process.

“I was shocked when Fox said he this had existed in these areas decades before fracking. However, I was doubly shocked when Fox’s lawyers contacted me to take down my video of our Q&A which I posted on YouTube,” said McAleer. “Fox was trying to censor another journalist and that got me interested: What was he trying to hide?”

McAleer and McElhinney have already filmed in Pennsylvania, New York, California, Poland, and the U.K.

“FrackNation will feature small farmers, the working class and others who are benefiting from this economic boom. We will also look at the backgrounds and motives of those opposing fracking,” said McElhinney.

Contact: Mary Elizabeth Margolis
mary.margolis@storypartnersdc.com
(202) 706-7800

Tagged as: Environment

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Sustainable planning: The agenda and details

December 16, 2011

A paper written by Sedgwick County Commissioner Richard Ranzau explains the dangers behind the sustainable planning movement.

Tagged as: Environment, Free markets, Government planning, Liberty, Property rights, Regulation, Richard Ranzau, Sedgwick county government, Wichita city government

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Strengthening our Nation’s Domestic Energy Supply

Republicans Blow With the Wind

Facts Refute Environmentalist Claims About Keystone XL Pipeline

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An ill wind blows in Kansas: The politics of renewable energy

Controversial filmmakers announce crowdfunding campaign for documentary to “expose the truth about fracking”

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