We’ve often noted that government policies, particularly overzealous environmental regulations, needlessly thwart safe domestic energy production. Turns out, the U.S. government isn’t the only one that can mess up a good thing.
The Wall Street Journal reports that oil production in Brazil has also been hampered by short-sighted regulations. Brazil has been ranked fourth in the world in terms of ability to boost oil output over the next decade, yet the country isn’t living up to its potential.
In Brazil, the red tape is created by regulations to benefit local business and discourage foreign capital. The result is development efforts have been slowed and inefficiencies are embedded, driving up production costs.
In Colombia, policies have been relaxed to encourage foreign investment. It’s ranked third in “ease of doing business” in Latin American (Brazil is 26th). Surprise, surprise: Columbia production is growing 6.5 percent annually.
Calling a spade a rake is normative in Washington as politicians seek to either divert attention from what they’re trying to do or put the soft sell on an unpopular proposal. The U.S. House Energy and Commerce Committee is shoveling in a different way by calling a bill by the blatantly politicized name of the “No More Solyndras Act.”
The Republican-run committee has been digging into the Solyndra debacle for months, targeting one of the Obama administration’s most notorious mistakes — funding a solar panels manufacturer that had little or no chance of succeeding.
The proposed bill would end the U.S. Department of Energy loan guarantee program that was used for the Solyndra black hole. A committee press release says the bill would “ensure taxpayers are never again stuck paying hundreds of millions of dollars because of the Obama administration’s risky bets.”
Any bets that this legislation won’t gain any ground in the Senate?
Prosperity not only brings benefits, but also challenges. That’s become apparent in the oil boom towns of North Dakota.
The Associated Press reports that Williston, N.D., has seen its population double in the past decade, and the average annual wage has surged from $32,000 to $80,000. Because of that rapid growth, housing is in short supply and the cost of buying or renting is increasing as well. That’s especially challenging for those not directly involved in the oil industry, such as teachers who have starting salaries of $31,500. The town’s school is expected to see student growth of 46 percent this year alone.
So far, though, it appears those challenges aren’t deterring teacher applicants. And the problems of rapid population and wage growth are preferable to dealing with struggling local economies and low wages. We suspect many small communities in Oklahoma would gladly trade places with Williston.
Last time Oklahoma tried to raise the gasoline tax, it ended with a bang. Voters shot down the proposal by a wide margin. Yet extending a “temporary” tax on gas ended last week not with a bang but a whimper. Gov. Mary Fallin signed a bill extending a 1-cent-per-gallon gas tax for another 10 years. The state taxes gasoline at 17 cents per gallon, of which 16 cents is an actual gas tax and the other penny a source of funding for the underground fuel storage tank program. But the fund isn’t just paying for replacement of storage tanks. It’s now buying new truck weigh stations at ports of entry around Oklahoma, something that was sorely needed. We don’t expect much more than a whimper of protest about Fallin’s OK for the gas tax extension, but the diversion of funds from their original purpose should always be weighed carefully.
What are global warming proponents going to do with this? It turns out dinosaurs may have produced, ahem, methane in greater quantities than all modern sources combined and literally warmed the earth, according to Current Biology. At the same time other researchers have found wind farms raise nearby overnight temperatures by about 0.72 degree Celsius — a level nearly equal to total average global warming since the end of the Little Ice Age. So green energy may be bad for the environment, and the automobile-free Jurassic Age was a near cataclysm thanks to dinosaurs’ poor dietary habits. Somewhere a hippie is really freaking out right now. Can’t we just acknowledge naturally occurring, dramatic environmental shifts have occurred for centuries? Instead of blaming your neighbor’s F-150 for the weather, credit Mother Nature for being one really tough customer.
Stories about the adverse environmental impact of wind energy are made in media heaven. What could be more toothsome than reports tying wind farms to bird deaths, scenery stealing and disturbance of animal habitat? Aren’t these things in the exclusive realm of oil, gas and coal? Apparently not. The latest news, from an academic journal called Nature Climate Change, says the massive windmills contribute to global warming by heating up the earth around the base of the 250-ft. towers. This is particularly true at night. Since many large wind farms are in the drier western states, this should be of concern, right? No worries. Parking lots, roofs and highways have an impact on local area heating. Many activities of daily human living do. Whatever adverse impact wind farms have in the small area around them is not that significant and is certainly offset by the benefits of wind energy. In today’s world, there’s no such thing as a free lunch or a free range.
Photo by David McDaniel, The Oklahoman Archives
We can thank the Sierra Club and the Environmental Protection Agency for cleaning up the air by putting so much pressure on utilities to stop making power with coal that coal-fired plants are being “voluntarily” shuttered. Oh, you can also thank them for the higher bills coming your way due to the lack of diversity in the choice of fuels to make electricity. Public Service Co. of Oklahoma, which serves the Tulsa area, is caving on an EPA crackdown on coal-caused emissions. OG&E, which serves Oklahoma City, remains committed to fighting an EPA mandate related to coal plants. Electric bills are going up no matter how this plays out, but does it make sense to shut out an abundant, domestic source of energy? Price aside, diversity seems prudent in this area. Still, Oklahoma may have a net gain from current trends: It has a lot more natural gas than it does coal.
Above: Public Service Co. of Oklahoma’s Northeastern Station coal-fired power plant in Oologah. Photo provided by Public Service Co. of Oklahoma
If natural gas gets any cheaper, the energy industry will have to pay people to take it. The government is already paying people to buy CNG-burning vehicles, but more people need to take advantage of it. Natural gas prices have been hovering around $2 per 1,000 cubic feet. Compressed Natural Gas prices are below $2 per gallon of gasoline equivalent. The state offers a generous income tax credit for the purchase of a CNG vehicle or conversion of a gasoline engine to run on CNG, but Rep. James Lankford, R-Oklahoma City, said he found tepid support for switching to CNG among motorists he talked to at gas stations during the Easter break. Despite high gas prices, switching to alternative fuels has been slow to develop.
CNG station in Norman, Okla. Photo by Steve Sisney, The Oklahoman
The Latino vote could be key in November’s presidential election. If this demographic’s views at all mirror the sentiment in Latin American countries, President Barack Obama could be in trouble. Gallup reported this week that the percentage of Latin Americans believing the U.S.-Latin America relationship will strengthen under Obama has dropped from 43 percent in 2009 to 24 percent in 2011. Neighboring Mexico’s optimism was halved, from 43 to 19 percent. Obama’s job approval rating in the region has also declined in the same time frame, from 62 to 47 percent, with Mexico demonstrating the biggest fall among the 18 countries, from 62 to 31 percent. At this weekend’s Summit of the Americas in Colombia, Gallup says Obama is “seeking to strengthen commercial ties, specifically in the energy sector.” Perhaps Canada will join us in our skepticism.
Western Hemisphere leaders will gather for the sixth Summit of the Americas this weekend at the Convention Center in Cartagena, Colombia. (AP Photo)