Voice For Liberty

Tag: KEEP

  • KDHE, Sunflower Electric, Earthjustice, Center for Climate Strategies: different peas in the same pod

    Evidence that a business seeking regulatory approval of its project enjoyed an apparently close relationship with the Kansas Department of Health and Environment should not be surprising.

    Reporting in the Kansas City Star leads with “Hundreds of emails document that officials of a Kansas power plant enjoyed a cozy relationship with the Kansas regulators who issued them a building permit in December.” (Kansas agency, utility worked closely on permit for plant)

    A press release from Earthjustice, the legal advocacy arm of the Sierra Club, proclaimed “A new report reveals Sunflower Electric (Sunflower) enjoyed a cozy relationship with Kansas regulators during the permitting process for the highly controversial coal-fired power plant Sunflower seeks to build in Holcomb.”

    This incident — the details are not important for understanding the broad lesson — may be looked on as an example of regulatory capture. As defined in Wikipedia, “regulatory capture occurs when a state regulatory agency created to act in the public interest instead advances the commercial or special interests that dominate the industry or sector it is charged with regulating.”

    In more detail, the Wikipedia article explains: “For public choice theorists, regulatory capture occurs because groups or individuals with a high-stakes interest in the outcome of policy or regulatory decisions can be expected to focus their resources and energies in attempting to gain the policy outcomes they prefer, while members of the public, each with only a tiny individual stake in the outcome, will ignore it altogether. Regulatory capture refers to when this imbalance of focused resources devoted to a particular policy outcome is successful at ‘capturing’ influence with the staff or commission members of the regulatory agency, so that the preferred policy outcomes of the special interest are implemented.”

    Regulatory capture — or at least the heavy-handed attempt by special interest groups to influence public policy to fit their interests — is a non-partisan sport. We shouldn’t be surprised to see this form of government failure taking place at all times, no matter which party or politicians are in power.

    As an example on point, the same type of activity happened during the administration of former Kansas Governor Kathleen Sebelius regarding the same electric plant that is the focus of controversy today. Her regulator, former KDHE Secretary Rod Bremby, denied the permit for the plant based on its carbon dioxide emissions, the first time that had been done in the United States.

    Radical environmentalists rejoiced. Sebelius was invited to speak at an Earthjustice conference held in Denver in June, 2008. Here are a portion of her written remarks, as supplied to me at that time by her press office, thanking Earthjustice for all it had done in Kansas to help Sebelius and mold her regulatory regime:

    When Big Coal pumped their money and politics into Kansas, EarthJustice was there to fight back:

    • Provided litigation and public support
    • Helped shape the media messaging and outreach
    • Rallied supporters and engaged the public to get involved

    It was a victory for all of us and I appreciate their help.

    About that time Sebelius established the Kansas Energy and Environmental Policy Advisory Group, or KEEP. The activities of this group were managed — at no cost to the state — by the Center for Climate Strategies, a group that expressly advocates for energy policies and regulations based on an extremist view of climate science.

    The invasion of Kansas — at least the Sebelius administration — by Earthjustice and Center for Climate Studies proves the point: Regulatory capture is a non-partisan opportunity.

  • Earl Watkins, Sunflower Chief Executive, speaks at AFP event

    Earl Watkins, President and CEO of Sunflower Electric Power Corporation recently spoke to a group of citizen activists as part of AFP – Kansas Day at the Capitol. Here’s a few notes from his talk.

    Did you know that Sunflower Electric is a not-for-profit organization?

    The demand for electricity changes constantly, moment-by-moment, throughout the day. Since electricity can’t be stored, matching generation to consumption of electricity is a challenge. Adding wind power makes this an even more challenging job, as wind power is very erratic.

    Watkins told a story of how a group of Kansas University students contacted him as part of their investigation of the “slothful and wasteful” practices of excess electricity consumption. Watkins told how when he attended KU, he had a radio and an electric typewriter in his dorm room, not to mention the forbidden hotplate. Today, however, these students have many electrical devices in their dorm rooms — refrigerators, microwave ovens, televisions, and computers, for example. Electrical power is a huge factor in the increased quality of life, especially for college students.

    The average age of Sunflower’s natural gas-powered plants is almost 40 years.

    While Kansas is often portrayed as having rich wind resources, the wind doesn’t always blow when power is needed. “The fact of the matter is, of the four seasons for harvesting wind, the summer in the day is the worst,” Watkins said. The highest demand for electrical power, of course, is on hot summer afternoons.

    It is the cost of the various forms of power generation that Sunflower uses that drives the decision as how to generate power and invest in capacity. These costs per kilowatt-hour are 1.5 cents for coal, 5 cents for wind, and 9 cents for natural gas.

    If the permit for the new coal plant is denied, Sunflower will be forced to build new wind and natural gas capacity. It’s estimated that the extra cost to consumers — remember these forms of generation are more expensive to build and operate than coal — is about $600 per household per year.

    Afterwards I asked Watkins a few questions. One concerned Cessna Aircraft Company chairman, president and chief executive officer Jack Pelton and his role as leader of the Kansas Energy and Environmental Policy Advisory Group (KEEP). How, I asked, does Pelton expect to build airplanes in Wichita when the wind isn’t blowing? The answer is that it’s easy for him to trade Western Kansas for a relationship with the Sebelius administration. This relationship has paid off handsomely for Pelton and Cessna, with $33 million in state money heading his way, and potential for more. My post Jack Pelton, Leader of Kansas Energy and Environmental Policy Advisory Group explains.

    Also, does the fact of Governor Sebelius’ impending departure from Kansas have any potential impact on the Kansas House of Representatives and its voting? He indicated that perhaps it would.

  • Kansas Wind Power Economic Benefit in Perspective

    An editorial in the Wichita Eagle that promotes wind power as an economic benefit for for Kansas contains some reasoning that deserves examination before we commit to the author’s cause. (Emil Ramirez: Entire state could benefit from wind, February 19, 2009 Wichita Eagle.)

    Unstated by Mr. Ramirez, but underlying this op-ed, is that the shift to wind power from coal is necessary to reduce carbon emissions for environmental reasons. The science behind this is far from settled. Besides, there’s very little that we in Kansas can do in light of the rapid increase in global carbon emissions. Doing something of this magnitude on shaky scientific evidence is unwise. (See KEEP’s Goal is Predetermined and Ineffectual. Ramirez, by the way, is an appointee to the Kansas Energy and Environmental Policy Advisory Group.)

    One of the arguments Ramirez makes is that investment in wind power is good because it creates jobs: “every wind turbine requires hundreds of yards of concrete, miles of steel rebar, copper wire and highly skilled laborers to install.”

    This is a trap that many supporters of alternative energy investment fall into: Simply because something will cost a lot and create many jobs, it’s a good policy. The best energy policy we could have, however, is one that supplies our energy needs at the lowest cost. Spending more for no good reason leads to a misapplication of capital. After all, if we view our energy policy as a jobs creation program, why not build wind turbines and haul them to western Kansas without the use of machinery? Think of the jobs that would create.

    Ramirez also argues that “concerted investment in energy efficiency” will create a “a bigger boom still.” He doesn’t say so, but I suspect that his goal is to get the government to pay for energy efficiency programs. But right now, every homeowner and business has the opportunity to invest in as many energy efficiency measures as they deem desirable. Each person or firm makes their own decision, based on their judgment of the future cost of energy versus the investment required to save energy, that suits their own needs.

    This voluntary conservation and investment in efficiency is much preferred to government mandate, that mandate usually backed up by taxing and spending.

    Finally, Ramirez also states that wind energy “uses no water,” alluding to one of the frequent criticisms of coal-fired power plants: their water use. This criticism is unfounded. As explained in my post Holcomb, Kansas Coal Plant Water Usage in Perspective, the water that a new Kansas coal plant would use is small compared to other uses of water in Kansas. There’s also the fact that the plant has purchased water rights for the water it will use. If the power plant didn’t use this water, it would very likely be used in agriculture, probably irrigating corn to be fed to cattle or turned into ethanol.

  • Kansas Climate Change Group Changes

    In his piece Separate But Still the Same, climate change alarmist watchdog Paul Chesser writes “A global warming alarmist group that masqueraded for the last few years as an objective consultant for many states announced this week that it has been disowned by its global warming alarmist parents.”

    This article describes changes made at the Center for Climate Strategies. This is of interest to us in Kansas for at least one reason. Here’s Chesser’s paraphrasing of CCS’ pitch made to states:

    There is a human-caused global warming crisis and the states must do something about it, because the federal government is not. We ask the governor to issue an executive order that confirms this crisis and creates a commission to study greenhouse gas emissions — but call it a “climate commission.” Appoint members who buy into the anthropogenic global warming crisis, and include some representatives from utilities and business, but not too many or they might screw things up. Once you hire CCS, we will take care of everything for you from then on: run the meetings, set the agendas, write the meeting minutes, provide technical analysis, maintain the website, and establish the voting rules. Oh, and the Rockefeller Brothers Fund and other global warming alarmist foundations have provided the funding for our work, so don’t you worry! Just let CCS do its thing.

    Kansas, by way of Governor Kathleen Sebelius‘s executive order establishing Kansas Energy and Environmental Policy Advisory Group (KEEP), fell for this sales pitch — con job, really — and we’ll be paying for this mistake for years to come.

  • A reasoned look at wind power

    The Texas Public Policy Foundation has released a report titled Texas Wind Energy: Past, Present, and Future. It doesn’t have a catchy title, but the report is full of useful information about wind energy. Here’s a little bit from the executive summary:

    The distinction between wind and wind energy is critical. The wind itself is free, but wind energy is anything but. Cost estimates for wind-energy generation typically include only turbine construction and maintenance. Left out are many of wind energy’s costs—transmission, grid connection and management, and backup generation—that ultimately will be borne by Texas’ electric ratepayers. Direct subsidies, tax breaks, and increased production and ancillary costs associated with wind energy could cost Texas more than $4 billion per year and at least $60 billion through 2025.

    Wind, like every other energy resource, has its pros and cons, and there is no doubt that wind power should be part of Texas’ energy supply. Texas needs a variety of fuel sources, plus concerted efforts at conservation and efficiency, in order to meet its energy needs. However, wind energy should only be employed to the extent it passes economic cost-benefit muster. Instead of subsidizing private wind development and imposing billions of dollars in new transmission costs upon retail electric customers, Texas policymakers should step back and allow the energy marketplace to bring wind power online when the market is ready. Texas electricity consumers will reap the benefits of such a prudent path.

  • Attitudes towards global warming are changing

    Global warming alarmists — in this article Christopher Booker refers to them simply as “warmists” — have become “even shriller and more frantic” in light of evidence that climate change may not be proceeding they way they’ve been predicting.

    In his article in the Daily Telegraph (2008 was the year man-made global warming was disproved), Booker makes these points:

    Easily one of the most important stories of 2008 has been all the evidence suggesting that this may be looked back on as the year when there was a turning point in the great worldwide panic over man-made global warming. Just when politicians in Europe and America have been adopting the most costly and damaging measures politicians have ever proposed, to combat this supposed menace, the tide has turned in three significant respects.

    First, all over the world, temperatures have been dropping in a way wholly unpredicted by all those computer models which have been used as the main drivers of the scare.

    Secondly, 2008 was the year when any pretence that there was a “scientific consensus” in favour of man-made global warming collapsed.

    Thirdly … All those grandiose projects for “emissions trading”, “carbon capture”, building tens of thousands more useless wind turbines, switching vast areas of farmland from producing food to “biofuels”, are being exposed as no more than enormously damaging and futile gestures, costing astronomic sums we no longer possess.

    In Kansas we’re considering taking very expensive actions to mitigate carbon emissions. (See coverage of Kansas Energy and Environmental Policy Advisory Group (KEEP), for example.) These actions, in the global scheme of things (and it’s not called “global warming” for nothing), are less than the proverbial drop in the bucket. At the same time, we delay doing things that we need, like the expansion of the Holcomb Station coal-fired electricity generating plant. Let’s hope that 2009 brings a reasoned and measured response to the hysteria generated by the “warmists.”

  • Climate change resource center launched

    When evaluating the claims of radical environmental extremists, people need accurate and reliable information about global warming and climate change. To this end, I’ve started a Climate Change Resource Center page, where readers can find links to reliable sources of information.

    If you know of other sources or articles that should be listed, please send them to me.

  • Climate change alarmism in Kansas is expensive

    Today’s Wichita Eagle reports on the high cost of climate change mitigation. (Climate cleanup costs could trickle down) Before Kansans commit to expensive courses of action that will be ineffective, we need to consider the wisdom of this action.

    As reported in the article, “there is the worry that regulation will drive up costs and push industry and jobs to other places.” Climate change alarmists treat these yet-to-be-passed regulations as a given, and are sure that they’ll be implemented. These regulations, however, are bad public policy, and there’s no reason why we should base current decisions on the threat of bad regulations being passed in the future. In fact, to do so would be highly irresponsible.

    Reported as a counterbalance to the huge costs of complying with bad regulation is “But others argue that regulations will spur innovation, creating more jobs.” It’s true that a forced move to a “green” economy would necessitate the need for workers to do things. What’s really important, however, is whether these jobs would increase the wealth of our country. That depends partly on the validity of the threat that climate change presents, and that threat is disputed. If the threat is not real, or if the effect would be minor, then these “green” jobs have all the characteristics of “make-work” jobs. They put people to work, but produce nothing of value.

    Furthermore, we might find ourselves spending huge sums to reduce greenhouse gases when other countries are increasing their emissions rapidly. Melissa Cohlmia of Koch Industries got this exactly right when she mentioned countries that “will not participate in efforts to limit greenhouse gases.” I’ve written about this before in relation to efforts in Kansas to reduce our greenhouse gas emissions. A little arithmetic tells us that anything we as Kansans do is just a drop in the ocean. In fact, as I report in KEEP’s Goal is Predetermined and Ineffectual, “even if Kansas stopped producing all carbon emissions, the effect would be overcome in about 16 months of just the growth in China’s emissions.”

    Rate increases in utility bills are burdensome to customers. When the local electric utility proposed raising monthly bills by $10 for the average consumer, ratepayers protested vigorously. When the City of Wichita proposed adding perhaps $3 or $4 to monthly residential water bills, council member Lavonta Williams expressed concern that this would be a hardship for many of the residents in her district. Whenever forecasts call for higher natural gas prices, we’re warned that some people will not be able to heat their homes.

  • How a Sub-prime Lender Influences Kansas Energy and Environment Policy

    In an American Thinker article titled How allies of George Soros helped bring down Wachovia Bank, you can read about the business activities of Herbert and Marion Sandler:

    Herbert and Marion Sandler, a New York lawyer and Wall Street analyst respectively, bought a small California thrift in 1963 and built it into GDW [Golden West Financial] — one of the largest thrifts in the nation. The company’s business was built on adjustable rate mortgages (ARMs. These were mortgages offered at low “teaser” rates that ratcheted upward as interest rates increased. They were often sold aggressively to unsophisticated home buyers who did not comprehend the vast financial risks they were taking, or who assumed that housing prices would rise high enough to provide a profit to them when they sold their houses. They were targets for lenders peddling mortgages that should have been stamped with a skull and crossbones, for these were among the most seductive and dangerous types of mortgage. …

    The Sandlers knew their business far better than any other person could. Not only were they the founders and major owners, they famously ran the company as a husband and wife team for all these years.

    Vilifying makers of sub-prime mortgages is not necessarily news. So what’s the link to Kansas?

    Currently, Kansas is undergoing an evaluation of energy and environmental policy. Kansas governor Kathleen Sebelius created the Kansas Energy and Environmental Policy Advisory Group (KEEP) for this purpose.

    Here’s the link: in the Governor’s press release Sebelius prevents and reduces pollutants with veto, executive order, we’re told that “The process will be facilitated by the Center for Climate Strategies (CCS). Their work is supported by the Energy Foundation and the Sandler Family Supporting Foundation …”

    There’s the connection.

    In 2006, the Sandlers donated $1.3 billion of Golden West Financial stock to their foundation, the Sandler Family Supporting Foundation. It is this money that supports the formulation of Kansas energy and environmental policy.