Here’s the science that President Obama is basing policy on.
Tag Archives: Environment
Southeast High School decision a test of beliefs
One aspect of the decision whether Wichita High School Southeast should be moved or renovated in place is this: What about the environment?
We haven’t heard much about this, however. But there are many in Wichita that advocate against urban sprawl. The proposal to move Southeast High from its present location to a proposed site on the fringes of Wichita: This defines urban sprawl.
There are also many in Wichita who support the sustainable communities initiative. A core tenet is that we’re spending too much on carbon-spewing transportation. The language is couched as “energy use and climate change,” but the clear meaning is that we’re burning too much gasoline and diesel fuel.
Which is, of course, what powers school buses and cars. It’s undeniable that moving Southeast High Schools will result in increased transportation by auto and bus, and fewer students commuting to school by foot.
Moving a school from a high-density urban location to a low-density suburban area: Isn’t this contrary to good urban planning? At least good urban planning as defined by the anti-sprawl, pro-sustainable communities crowd?
To be sure, the Southeast decision is up to the board members of USD 259, the Wichita public school district. Many of them subscribe to the “green” agenda.
Then, where are the members of the Wichita City Council and Sedgwick County Commission who voted for the sustainable communities initiative? The bureaucrats from the Hugo Wall School of Urban and Public Affairs at Wichita State University who are managing the process?
If these people really believe in their anti-sprawl, anti-fossil fuel, pro-sustainable communities agenda, they need to make themselves heard on this issue.
How did Wichita water situation develop?
It’s vitally important that Wichita develop a plan for an abundant water supply. At the same time, we ought to be asking, as does Johnny Stevens, how this problem developed. Wichita Business Journal:
Wichita officials — thanks to a couple of weeks of rain — said they were able this week to dodge possible water restrictions and punitive measures as a means of coping with the ongoing drought.
But Wichita developer Johnny Stevens voiced to me today something I have heard from others in the community recently.
“How did it even get to this point?” Stevens said. “It shouldn’t have gotten this far.”
Continue reading at Developer Johnny Stevens on water issue: How did it get to this?
Other material on Wichita’s water situation is at Wichitans taxed into a lower standard of living, Wichita begins rebates and regulation, and Wichita water, a few thoughts.
Wichitans taxed into a lower standard of living
Every decent man is ashamed of the government he lives under.
— H.L. Mencken
This week the Wichita City Council voted to force Wichitans to spend $1 million to help their fellow citizens reduce their standard of living.
I’m not kidding. $100 rebates will be paid to the purchasers of up to 10,000 low-flush toilets. To the extent that these toilets replace fully-functional toilets, civilization takes a step backwards.
(The rebate program covers other appliances besides toilets, so we don’t know how many low-flush toilets will be purchased. But it could be up to 10,000.)
Whatever the number is, Wichita is spending a lot of other peoples’ money to accomplish a vanishingly small goal, and at the cost of convenience. In net, it is a huge loss.
One of the most interesting books I’ve almost read is a collection of essays by Jeffrey A. Tucker titled Bourbon for Breakfast: Living Outside the Statist Quo. Chapter 4 is titled “The Relentless Misery of 1.6 Gallons,” which refers to the amount of water modern toilets are allowed to use per flush. They used to use 3.5 to 5 gallons per flush. Here’s Tucker’s take on this “advancement” and what more Wichitans can look forward to:
We have all gotten used to a reduced standard of living — just as the people living in the Soviet Union became accustomed to cold apartments, long bread lines, and poor dental care. There is nothing about our standard of living that is intrinsic to our sense of how things ought to be. Let enough time pass and people forget things.
So let us remember way back when:
Toilets did not need plungers next to them, and thank goodness. Used plungers are nasty, disease carrying, and filthy. It doesn’t matter how cute the manufacturer tries to make them or in how many colors you can buy them. In the old days, you would never have one exposed for guests. It was kept out in the garage for the rare occasion when someone threw a ham or something stranger down the toilet. …
You never had any doubt about the capacity of the toilet to flush completely, with only one pull of the handle. The toilet stayed clean thanks to five gallons of rushing water pouring through it after each flush.
Then, Congress passed the 1.6 gallons per flush law. The result?
The result is an entire society of poorly working toilets and a life of adjustment to the omnipresence of human feces, all in a short 15 years. Thanks so much, Congress!
Of course the environmentalists are in on the whole project. They started telling us back in the 1970s that our large tanks were sheer waste. We should put bricks in them to save and conserve. If you didn’t have a brick in your toilet, you were considered irresponsible and a social misfit. Eventually of course the brick became, in effect, a mandate, and finally toilet tanks were reduced to one third of their previous size.
Back then, it was just assumed that toilet manufacturers cared nothing at all about wasting water. Surely there was no rationale at all for why they consumed five gallons per flush as opposed to 1.6 gallons. This is just capitalist excess and down with it!
Well, think again: there was wisdom in those old designs. The environmentalists didn’t account for the present reality in which people typically flush twice, three times, or even four times during a single toilet event. Whether this ends up using more or less in the long run is entirely an empirical question, but let us just suppose that the new microtanks do indeed save water. In the same way, letting people die of infections conserves antibiotics, not brushing teeth conserves toothpaste, and not using anesthesia during surgery conserves needles and syringes.
Here is the truth that environmentalists do not face: Sometimes conserving is not a good idea. There are some life activities that cry out for the expenditure of resources, even in the most generous possible way. I would count waste disposal as one of those.
It is also possible that some people just like to get their kicks out of spreading misery and making it impossible for us to enjoy a clean and prosperous life. Like Puritans of old, they see virtue in suffering and would like to see ever more of it. It sounds perverse, but such an ethos does exist. And clearly, government doesn’t care in the slightest.
Wichtans need to remember this: That instead of working to increase water supply, the mayor and all city council members voted to force people to pay taxes so that others can buy lower-performing appliances. This is the government we live under.
Wichita water, a few thoughts
“The first lesson of economics is scarcity: There is never enough of anything to satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics.” — Thomas Sowell
As Wichita grapples with water issues, it’s important that the city realize that abundance is better than austerity and punishment. Life in Wichita is nicer and more attractive to outsiders when we are able to use a lot of water at a reasonable price. Under an austerity program, for example, our $3.5 million investment in Waltzing Waters sits idle. With abundance, we have “liquid fireworks” and “a significant public improvement intended to encourage further WaterWalk development and give people another reason to come downtown,” according to Wichita city officials.
The strategy we need, therefore, is to increase supply rather than restrict usage. But when officials asked for citizen input, according to city documents, “The public strongly supported water restrictions.” So city officials are likely to implement austerity programs that will be expensive and do little good compared to their costs.
As an example, tomorrow city staff will recommend that the council approve a rebate program for those who install clothes washers, dish washers, and toilets that use less water. Smart irrigation controls are included in the recommendation. The rebate, according to city documents, is “anticipated” to be $100, with a total of $1,000,000 allocated to the rebate program. This means that up to 10,000 appliance purchases could receive the rebate.
How much water will this save, and at what cost? According to Energy Star, a program of the Environmental Protection Agency, a new clothes washer saves eight gallons of water per load compared to an older washer. The same article also says the average family washes 300 loads of laundry per year. Based on these figures, switching to the new washer saves 2,400 gallons per year.
To place this number in context, 2,400 gallons of Wichita water costs: 2,400 gallons times $1.63 per thousand gallons water purchase price, plus 2,400 gallons times $2.88 per thousand gallons sewer usage price, equals $10.82.
(We’re not really concerned with sewer plant capacity at this time, so perhaps we shouldn’t consider that cost. The water cost for 2,400 gallons is $3.91.) With this in mind, the city is considering paying someone $100 to save a resource valued less than $4 per year. This assumes, of course, that the city prices water what it is actually worth.
Another context: If 10,000 of these washers were purchased, the savings would be 24,000,000 gallons of water per year. This is about one-half of Wichita’s average daily usage. This program, then, would save a inconsequentially small amount of water, at the large cost of $1 million. A single extra-hot day in the summer would cancel this entire year’s savings.
Remember too that this cost will not be paid voluntarily. Who wants to pay taxes so that someone else can get a discount on a new washing machine? Those who want their money used for this purpose may do so charitably. A government program is not needed.
Past city initiatives
When Bob Knight spoke to Pachyderm last week, he told the audience that experts told him that we had water for 50 years.
In 1998, the Wichita Eagle reported: “By the end of 1999, the city will have spent $7.6 million trying to determine whether excess flow from the Little Arkansas River can be diverted into the underground aquifer northwest of Wichita. If it works as planned, the city will build the recharge system for $7.2 million, completing the work in 2005 — a year, it estimates, after it will begin experiencing water shortages during extended dry periods.”
The recharge system described in the article is the ASR program, described on its website as “The city of Wichita’s Aquifer Storage and Recovery (ASR) program is designed to restore the invaluable Equus Beds aquifer and ensure that it remains a bountiful and clean source of water for future generations.”
Phase I of the ASR was completed for $27 million. Phase II was completed for $220 million. So far the city has spent a quarter billion dollars on this project, and we rarely hear it mentioned as a solution to the current water shortage. Citizens ought to insist the city explain the status of the ASR project and why it is not playing a prominent role in solving our water supply problems.
Recognize economic behavior
In discussions on issues like this, people are susceptible to disregarding economic behavior, that is human nature and how people react to the world. As example is this remark gathered during citizen participation: “Restrict watering, but not through rates or watering bans.”
I wonder: How else do we influence behavior? Persuasion? Here’s how well that works, according to another citizen snippet of wisdom: “People love the idea of conservation, as long as it does not affect them.”
Many of the comments lambasted those who waste water, with lawn irrigation mentioned frequently: “People water their yards every day. And they water way too much. Most of the water runs off into the gutters. More water wasted on yards than showers or toilets by far.”
But if these people who water their yard every day are acting with any rationality, we have to conclude that they don’t think they’re wasting water. Someone else may call it waste, but the every-day irrigator is making a trade off as to the value of a nice lawn, the water bill, the cost or hassle of conservation measures, the effort it takes to learn to conserve, and other factors. Each of us does this many times every day in our economic lives. It’s important that the city price water properly so that people are motivated — through their own self-interest — to use water wisely. The decision as to wise use of water needs to be left to each person and family.
Some comments seem to be at cross-purposes: “Clamp down on private outdoor users. We can get through this by appealing to the community spirit.” Which is it this this writer recommends: the carrot or the stick?
Finally, we need to be on the watch for those who want to control the behavior of others in the name of saving the earth through soft environmental terrorism. An example comment of this type: “Control urban sprawl — builders and developers are interested in expansion only — their income. Encourage leveling of population growth an judicious use of resources.”
I wonder if it has occurred to this person that builders and developers can earn income only if they build what people want to buy. Furthermore, warnings of overpopulation have been issued for decades. The desire to control the production of new people is anti-human. And as we’ve seen, “judicious use” is in the eye of the beholder.
Recycling debate short on reason
Responses to a news story on recycling indicate that the issue is driven more by emotion and misinformation than reason.
Recently I was interviewed by Carla Eckels of KMUW radio for a story titled Recycling: Is It Really Necessary? (Audio is available at that link.)
The story was based on my research and opinion that in some cases, recycling is an economically beneficial activity. But for the household setting, it is not.
(One point I meant to make, but forgot to, was that how wonderful it is that we have enough wealth that we don’t have to recycle household waste. We are free to recycle if we want, but also free to make a personal decision to spend time on activities other than recycling.)
Comments left to the story illustrate just how difficult it is to think about and debate issues of public policy. Here’s one example:
It takes absolutely no extra water to rinse cans for recycling. Just rinse them in your dishwater after washing your last dish. After all, if one is truly concerned about water conservation, handwashing uses less water than a dishwasher. As for the abundant landfill space, I suggest we open a landfill in Mr. Weeks’ backyard. Most people would object to a landfill next door, but apparently Mr. Weeks would welcome it.
This writer has a good idea — if you want to wash dishes by hand. For me, a dishwashing machine is a sign of tremendous progress by civilization, reducing drudgery and producing cleaner dishes. And, it’s a machine that nearly everyone can afford.
After that, the writer makes a ridiculous argument about landfill space. I note that this writer uses a profile name that is anonymous. While anonymous speech is important, it leads to people making patently ridiculous statements that they probably wouldn’t make if their friends and neighbors knew they said that.
Here’s another comment:
I would have to disagree with Mr Weeks. The benefits far outweigh the “costs” he was mentioning. It only take a moment to look up evidence that recycling is not only beneficial for our planet but also as a business model. Single stream recycling has made this process very easy.
A point I made in the article is that households have to pay for people to collect their recyclables. Using scare quotes around “costs” is inappropriate, as the costs are real and large. This is a clue as to the economic value of recycling, which is that it works in certain instances, but not for households.
Part of another comment is this:
And Mr. Weeks’ comments this morning on the air regarding having plenty of landfill space in places like Kansas just made me angry. Landfills the size of Sedgwick County? —- Seriously.
In the article, I mentioned that someone calculated that a landfill 100 yards tall and 30 miles on a side could hold all trash for the entire country for the next 1,000 years. How someone makes a leap from that to multiple landfills the size of Sedgwick County shows that people just aren’t thinking closely.
For Gasland 2, there will be no dissent allowed
The maker of FrackNation writes “Our mistake was to believe the Tribeca Film Festival’s claims to want diversity of opinion and people who are passionate about film.”
Documentary filmmakers Phelim McAleer and Ann McElhinney made FrackNation in response to the errors and lies in the anti-fracking film Gasland. Now there is Gasland 2, and McAleer and a group of farmers tried to see the film. It didn’t go well.
In January, as FrackNation was being released, I interviewed McAleer. You can read my report at FrackNation to tell truth about fracking. I asked this question: “So why are progressives and liberals opposed to fracking?” Perhaps tellingly, McAleer replied “Fracking brings economic boom to rural America, and many people view rural America as a backdrop, as something to be used.” The elitists don’t really like farmers, he said. But they will gladly use them to make a political point. The idea that they would become independent from their largess is their concern.
Following is McAleer’s article as it appeared in the New York Post.
This was supposed to be a column about “Gasland 2,” the sequel to the anti-fracking documentary by activist Josh Fox, which premiered Sunday afternoon at the Tribeca Film Festival. Instead, it’s about my exclusion, along with maybe 20 farmers from upstate New York and Pennsylvania, from the screening despite having tickets for a theater with lots of empty seats.
Our mistake was to believe the Tribeca Film Festival’s claims to want diversity of opinion and people who are passionate about film.
As a journalist who made a documentary looking at the factual deficiencies in the first “Gasland,” I put some inconvenient questions to Josh Fox as he was speaking to the media on the red carpet.
The farmers milling around nearby decided to join in with pointed but respectful questions of their own. After all, they know their land better than anyone, and they felt aggrieved that their lives and communities had been misrepresented by the first “Gasland.”
They asked Fox if he now accepted that the water in Dimock, Pa., is clean. He’d claimed that Dimock was one of the most contaminated areas in the United States because of fracking. But state scientists and then the EPA investigated and found the water clean.
The farmers asked Fox if he’d accept the science and apologize for calling their community a wasteland. He didn’t reply.
There was silence also when they asked Fox if he’s going to withdraw his claim that fracking has caused a spike in breast cancer. That’s been debunked by the country’s top cancer experts, but Fox has remained silent, allowing the fears to linger.
Given that Josh Fox had misrepresented their lives so badly in the past, the farmers were interested in what was going to be in “Gasland 2.” Many got up at 4:30 a.m. to travel to New York.
Sherry Hart, a mother of three and the wife of a gas worker, was particularly excited to be there. She lives in Pennsylvania and had never been to New York City, but she felt that it was important to make the journey to see what was being said about her and her life.
But she was not to find out. As the red carpet cleared and the farmers went to take their seats, they and I were informed that we weren’t being allowed in. No amounts of appealing or complaining did any good.
It seems that inconvenient questions aren’t welcome at the Tribeca Film Festival.
It was devastating for the people who’d traveled so far. They were upset and bewildered.
Several hours after the media became interested in the exclusion, the Tribeca Film Festival issued a statement claiming that the screening was at capacity; the problem was simply a lack of seats.
But the farmers, like everyone else these days, have cameras, and they recorded film festival staff giving very different reasons for excluding them from the screening.
One staffer said they were not allowed in “because you’re making trouble.” Another was more honest: “We just don’t feel comfortable letting them into the movie,” she explained.
The festival organizers called the police just in case the farmers didn’t get the message that they weren’t welcome.
Julia Mineeva, a Russian journalist who’s covered the film festival for five years, thought she’d stumbled across a great story and started interviewing the various groups. When she went in to see the movie she was asked to leave, followed, put in handcuffs, arrested and charged with trespassing.
It seems that covering both sides of a story is an arrestable offense at the Tribeca Film Festival.
Festival founder Robert De Niro says he wants a festival that is controversial, but there was nobody more passionate than those farmers who made a round trip of hundreds of miles just to see a movie. But the message Sunday was that their passion was not welcome.
And at the first sign of real controversy from real people, the festival closed its doors and called the cops.
The message is clear: They want “controversy,” but only of the kind they agree with, and it can only come from people who look and sound like them.
The rest of America can just stay on the sidewalk.
Renewables portfolio standard: Good or bad for the Kansas economy?
A report submitted to the Kansas House Standing Committee on Energy and Environment claims the Kansas economy benefits from the state’s Renewables Portfolio Standard, but an economist presented testimony rebutting the key points in the report.
RPS is a law that requires the state’s electricity utilities to generate or purchase a certain portion of their electricity from renewable sources, which in Kansas is almost all wind. An argument in favor of wind energy requirementy from the Polsinelli Shugart law firm is at The Economic Benefits of Kansas Wind Energy.
Michael Head, a Research Economist at Beacon Hill Institute presented a paper that examined each of Polsinell’s key findings. The paper may be read at The Economic Impact of the Kansas Renewable Portfolio Standard and Review of “The Economic Benefits of Kansas Wind Energy” or at the end of this article. An audio recording of Head speaking on this topic is nearby.
[powerpress url=”https://wichitaliberty.org/audio/michael-head-kansas-rps-2013-02-14.mp3″]Michael Head, Beacon Hill Institute
Here are the five key findings claimed to be economic benefits to the Kansas economy, and portions of Head’s responses.
Key Finding #1: “New Kansas wind generation is cost-effective when compared to other sources of new intermittent or peaking electricity generation.”
The first observation to make from this key finding is that if it were true the state RPS policy is not necessary. If wind power is truly cost-effective compared to other sources of energy, state mandates that wind power be used should be repealed, allowing wind power to compete with other technologies to provide low cost electricity in Kansas.
This point is obvious. The actions of the wind power industry — insisting on mandates and subsidies — lets us know that they don’t believe their own claim.
Key Finding #2: “Wind generation is an important part of a well-designed electricity generation portfolio, and provides a hedge against future cost volatility of fossil fuels.”
Hedging has been, and will continue to be, a useful tool for utilities, and benefits the consumer. But the Kansas state government should not engage in this level of industrial policy by regulating just how much utilities can hedge, all for the sake of requiring wind power production. This is not a benefit in itself. Utilities will attempt to maximize profits by consistently analyzing the energy market and making the best decisions, often through long term purchasing agreements. … In short, hedging is a valuable tool when left to the discretion of the utility, but by utilizing a heavy-handed mandate, state lawmakers are actually constraining the ability of the utilities to make sound business decisions.
Key Finding #3: “Wind generation has created a substantial number of jobs for Kansas citizens.”
This key finding fails to take into consideration opportunity costs, a concept that Bastiat explained in his 1850 essay, and is a prime example of the reviewed paper only considering benefits. If a shopkeeper has a window broken, this creates work for a glazer to replace the window. However, this classic “broken window” fallacy mistakes breaking windows as job creation policy. At this point “The Economic Benefits of Kansas Wind Energy” is correct, wind generation does create jobs, just as a broken window creates jobs. But the report stops at this point and fails to provide a complete analysis of the effect of wind generation on total employment in Kansas.
As Bastiat showed, a consideration must be made to the opportunity cost. How would the shopkeeper have spent his money if he did not need to replace his window? He could use the money on capital investment, further growing his business, hire another worker or make various other purchases. Regardless of what it was, they would have all brought him more benefit, than replacing his window. If not, he would have broken the window himself.
This is one of the most important points: By forcing Kansans to pay for more expensive electricity, we lose the opportunity to use money elsewhere.
Key Finding #4: “Wind generation has created significant positive impact for Kansas landowners and local economics.”
This key finding makes a common mistake by assuming transfer payments are a benefit, a fallacy. The transfers of money via lease payments or property tax payments are not benefits. This transfer of money is a cost to one party and a benefit on the other, and can be illustrated easily.
What if Kansas wind farms vastly overpaid for their land and lease payments were valued at $1 billion a year. This report would place the benefit of wind power leasing this land at $1 billion a year. But the project has not changed, where did these new benefits come from?
In fact, there would not be any change to the net benefit of the project. Landowners would amass benefits equal to $1 billion minus the land value and utilities would amass costs equal to $1 billion minus the land value. These costs would in turn be passed along to rate payers in the form of higher utility costs. This illustrates the point that this policy is industrial policy. By dispersing the costs of a project to all citizens in the state, small, but powerful, groups with strong lobbying efforts are able to gather the rewards.
Key Finding #5 “The Kansas Renewable Portfolio Standard is an important economic development tool for attracting new business to the state.”
This key finding is related closely with the analysis of the job benefits that wind power purportedly conveys. Of course, legally requiring that utilities use specific sources of electricity will attract new business in that sector to the state. But we need to see the whole picture. This policy has costs, which will be borne by state residents and businesses via higher utility prices.
In conclusion, Head asked the obvious question: “With all of these supposed benefits of wind power, why does it require a government mandate and taxpayer funding?”
FrackNation to tell truth about fracking
Documentary filmmakers Phelim McAleer and Ann McElhinney have produced a feature film that will help America understand the truth about fracking.
Fracking — short for hydraulic fracturing — is a method of oil and gas production by injecting pressurized fluid into rock formations. Along with horizontal drilling, this technology has lead to a rise in the production of natural gas, leading to much lower prices for consumers, and to the possibility of U.S. exports.
FrackNation, the film that McAleer and McElhinney made, is set for premier on AXS TV on January 22, 2013 at 9:00 pm eastern.
I spoke to McAleer on the telephone last week. I asked is fracking really a big deal for America? He answered:”The word game changer is much overused, but this really is a game changer. It’s going to make America an energy producer. Natural gas is no longer tied to the price of oil. Anywhere there’s fracking in America, there’s no recession.”
“I’d almost go as far as to say fracking is maybe the reason President Obama was reelected. The reason he won Ohio because there’s a fracking boom going on there. People have money in their pockets. … If you live in a fracking area or near where there is going to be fracking you’re feeling good.”
So why are progressives and liberals opposed to fracking? “Fracking brings economic boom to rural America, and many people view rural America as a backdrop, as something to be used.”
The elitists don’t really like farmers, he said. But they will gladly use them to make a political point. The idea that they would become independent from their largess is their concern. He added that opposition to fracking is anti-fossil fuel, anti-progress, and anti-modernity, but above all it is anti-American.
Those opposed to fracking spread fear of environmental damage such as spilling the chemicals or polluting ground water. Is this fear real? McAleer said fracking has been going on since 1947. How long can you fear something that hasn’t happened, he asked.
On the new Matt Damon movie Promised Land, described by the New York Times as “an earnest attempt, sometimes effective, sometimes clumsy, to dramatize the central arguments about fracking and its impact,” I asked what’s wrong with that movie?
McAleer said “It’s not fair, I suppose, to fact check a work of fiction. Having said that, it is pretending to be in a real world situation. There are lots of allegations, lots of multimillion dollar lawsuits, but no scientific evidence. There’s no scientific evidence about what Matt Damon talks about in promised land. The biggest lie of all is that the fraudulent environmentalists — of which there are many — are somehow in the pay of oil and gas companies to smear environmentalists. That’s just ludicrous. Yes there are fraudulent environmentalists — many of them — but they work for the environmental movement, not for oil and gas.”
I mentioned an incident in an advertisement for the movie that shows a family receiving the results from testing their water. The tests showed that the water was clean and not dirty, like illustrated in a dirty brown milk jug. The reaction of the family was anger. McAleer explained that these people were suing the oil and gas companies. They demanded that the EPA come in and test their water, and the EPA said their water is safe. They watched their multimillion dollar lawsuit flushed down the drain, along with their celebrity status.
Your movie FrackNation that’s coming out in January: What will it tell Americans?
McAleer said the film will show there is absolutely no evidence that fracking has ever contaminated groundwater. But there is plenty of evidence that people have lied, exaggerated, and misrepresented fracking.
I asked about the famous example in the movie Gasland of a family being able to light their drinking water on fire, the implication being that this was possible due to methane gas leaking into their water supply, with fracking being the cause. McAller said that people have been able to like their water on fire for many years before fracking started. Native Americans called certain places “burning springs.” These are naturally occurring events. The director of Gasland knew that, but he told me he left it out because it wasn’t relevant. It’s unethical journalism.
Special interests will capture south-central Kansas planning
Special interest groups are likely to co-opt the government planning process started in south-central Kansas as these groups 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 over the next few years.
Sedgwick County has 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 to benefit themselves at the expense of the general public. 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 sphere of 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 now chairman of REAP? Special interest groups know how to play the political game.
Municipal stormwater regulation on White House agenda
Some scoff at those who raise warnings about overreaching federal regulation. But even though the national economy is suffering and we are drowning in debt, the administration of President Barack Obama can find time to meddle in the regulation of municipal stormwater.
Following is an email from NACo, the National Association of Counties, to county commissioners, presumably across the nation. The email, which presumes that “green” stormwater management practices are most desirable, asks for suggestions from commissioners to present at a national conference on the topic, hosted by the White House.
The agenda for the conference is White House Conference Municipal Stormwater Infrastructure: Going From Grey to Green. Following is the email commissioners received.
From: Julie Ufner [mailto:jufner@naco.org]
Subject: Green Infrastructure Information Request
Next week, I will be representing NACo at the White House’s Stormwater Infrastrucutre [sic] event. The White House asked participants to be prepared to discuss the questions below. If you have any comments or responses to the questions, please feel free to forward those responses no later than COB on Wednesday, September 19th.
1. What do you see as the most significant barriers to the wider use of green infrastructure practices to manage municipal stormwater?
2. What steps should federal agencies, communities, or others take to promote the use of green infrastructure practices in municipal stormwater management?
3. Are there specific infrastructure practices, or categories of practices, that you believe are most effective, provide the greatest benefits, or are most easily implemented?
4. Are there funding strategies for municipal green infrastructure that you have employed and would recommend?
Thank you in advance for any comments you may have.
Julie Ufner
Associate Legislative Director
Environment, Energy and Land Use
National Association of Counties
202-942-4269
jufner@naco.org
Farm bill contains energy spending
The Obama Administration’s politically-driven energy spending (think Solyndra) has illustrated for Americans that government should not be in the business of selecting and subsidizing energy sources. But the farm bill currently under consideration contains more of this wasteful spending. The bill has advanced from a Senate committee.
According to the Congressional Budget Office, the “Energy Title” (the section of the bill that addresses energy) will result in additional spending of $780 million over the next ten years, with $550 million of that in the first five years. This additional spending is over the “baseline” spending. Total spending on energy in the farm bill would be $1.5 billion over ten years.
One of the programs in the farm bill is Biomass Crop Assistance Program (BCAP), which, according to the USDA, “provides financial assistance to owners and operators of agricultural and non-industrial private forest land who wish to establish, produce, and deliver biomass feedstocks.” In other words, it pays farmers to grow and deliver crops. This program was cited by the USDA Inspector General for problems including improper payments and administration problems.
Another energy-related program in the farm bill is Biorefinery Assistance Program (BAP). This program has had its share of failures along the lines of Solyndra. Range Fuels, for example, was formed to produce cellulosic ethanol. It received a $76 million grant from the Department of Energy (during the Bush Administration), and later a $80 million loan under BAP during the Obama Administration. The plant produced one batch of methanol — not the type of alcohol that cars use as fuel — and then shut down. For more, see the Wall Street Journal The Range Fuels Fiasco: A case study in the folly of politically directed investment.
There’s also the Rural Energy for America Program, which provides loan guarantees and grants for rural America to install renewable energy systems such as wind and solar power, as well as more exotic technologies like geothermal.
There’s other energy-related spending in the bill, but you get the idea. Some of this spending is government choosing winners and losers in the energy marketplace, rather than letting markets work out which technologies are worthwhile investment subjects. Some of it is simply welfare spending on special interest groups. This energy-related spending is happening where you might not think to look for it: the farm bill. (The total cost of the farm bill over ten years is estimated by the CBO to be $969 billion.)
There’s other spending on biofuels that’s not in the farm bill. Last year a cellulosic ethanol plant in western Kansas received a $132 million loan guarantee. All this spending is in spite of the fact that there has been no commercial-scale cellulosic ethanol production.
Spending on these rural energy programs provides an opportunity for politicians to engage in what U.S. Representative Mike Pompeo has termed “photo-op economics.” Those who have fought for these spending programs get to participate in groundbreaking ceremonies and other highly visible new events. The lobbyists who fight for them earn large fees. But this type of spending represents cronyism at its fullest, where the public at large is taxed to provide benefits for the few. We need to end this type of spending, whether it be hidden in the farm bill or elsewhere.
Kansas and Wichita quick takes: Wednesday 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.'”
In Kansas, planning will be captured by special interests
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.
Wind tax credits are government spending in disguise
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.
Kansas and Wichita quick takes: Thursday 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.
Brownback, Moran wrong on wind tax credits
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)
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.” See Mike Pompeo: We need capitalism, not cronyism.
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.
Wind energy split in Kansas
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)
Occupy Koch Town protestors ignore facts
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.
An ill wind blows in Kansas: The politics of renewable energy
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