Should California dictate US energy policies?
Can the rest of America afford its Alice in Wonderland energy policies for? (Can California afford them?)
Paul Driessen
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California
loves to be seen as the trendsetter on energy and environmental
policies. But can we really afford to adopt their laws and regulations
in the rest of America? Heck, can the once Golden State afford them
itself? The path to hell is paved with good intentions,
counter-productive policies – and hypocrisy.
The
official national unemployment rate is stuck at 6.7% – but with much
higher rates for blacks and Hispanics and a labor p labor participation
rate that remains the lowest in 35 years. Measured by gross national
product, our economy is growing at an abysmal 1.5% or even 1.0% annual
rate.
Meanwhile, California’s
jobless rate is higher than in all but three other states: 8.1% – and
with far worse rates as high as 15% for blacks, Hispanics and inland
communities. First the good news, then the insanity.
Citigroup’s Energy 2020: North America
report estimates that the United States, Canada and Mexico could make
North America almost energy independent in six years, simply by tapping
their vast recoverable oil and natural gas reserves. Doing so would help
lower energy and consumer prices, insulate the three nations from
volatile or blackmailing foreign suppliers, and spur job creation based
on reliable, affordable energy, says the U.S. Energy Information
Administration.
Driving this
revolution is horizontal drilling and hydraulic fracturing. According to
Citigroup, IHS Global Insights, the EIA and other analysts, “fracking”
technology contributed 2.1 million jobs and $285 billion to the US
economy in 2013, while adding $62 billion to local, state and federal
treasuries! Compare that to mandates and subsidies required for
expensive, unreliable, job-killing wind, solar and biofuel energy.
Fracking
also slashed America’s oil imports from 60% of its total needs in 2005
to just 28% in 2013. It slashed our import bill by some $100 billion
annually.
By 2020 the government
share of this boom is expected to rise to $111 billion. By 2035, U.S.
oil and natural gas operations could inject over $5 trillion in
cumulative capital expenditures into the economy, while contributing
$300 billion a year to GDP and generating over $2.5 trillion in
cumulative additional government revenues. What incredible benefits! But
there’s more.
A Yale University
study calculates that the drop in natural gas prices (from $8 per
thousand cubic feet of million Btu in 2008, and much more on the spot
market, to $4.00 or so now) is saving businesses and families over $125 billion a year in heating, electricity, fertilizer and raw material feed stock costs.
The only thing standing in the way of a US employment boom and economic and industrial renaissance, says Citigroup, is politics: continued or even more oppressive anti-hydrocarbon policies and regulations.
Here’s
the insanity. Fully 96% of this nation’s oil and gas production
increase took place on state and private lands. Production fell
significantly on federal lands under President Obama’s watch, with the
Interior Department leasing only 2% of federal offshore lands and 6% of
its onshore domain for petroleum, then slow-walking drilling permits,
according to the Institute for Energy Research.
The
President continues to stall on the Keystone pipeline, while
threatening layers of expensive carbon dioxide and other regulations, to
prevent what he insists is “dangerous manmade climate change.” His EPA
just adopted California’s expensive all-pain-no-gain rules for sulfur in
gasoline, and the Administration and environmentalists constantly look
to the West Coast for policy guidance.
Governor
Jerry Brown says 30 million vehicles in California translate into “a
lot of oil” and “the time for no more oil drilling” will be when its
residents “can get around without using any gasoline.” However, that
rational message has not reached the state’s legislators, environmental
activists or urban elites.
California’s ruling classes strongly oppose drilling and fracking – and leading Democrats are campaigning hard to impose at least a long temporary ban, based on ludicrous claims that fracking causes groundwater contamination and even earthquakes and birth defects.
Meanwhile,
California’s oil production represents just 38% of its needs – and is
falling steadily, even though the state has enormous onshore and
offshore natural gas deposits, accessible via conventional and hydraulic
fracturing technologies. The state imports 12% of its oil from Alaska
and 50% more from foreign nations, much of it from Canada, notes
Sacramento area energy consultant Tom Tanton.
The
record is far worse when it comes to electricity. The Do-As-I-Say state
imports about 29% of its total electricity from out of state: via the
Palo Verde nuclear power plant in Phoenix, coal-fired generators in the
Four Corners area, and hydroelectric dams in the Southwest and Pacific
Northwest, Tanton explains.
Another
50% of its electricity is generated using natural gas that is also
imported from sources outside California. Instead, the Greener-Than-Thou
State relies heavily on gas imported via pipelines from Canada, the
Rockies and the American Southwest, to power its gas-fired turbines.
Those turbines and out-of-state sources also back up its numerous
unreliable bird-killing wind turbines.
It
adds up to a great way to preen and strut about their environmental
consciousness. They simply leach off their neighbors for 62% of their
gasoline and 79% of their electricity, and let other states do the hard
work and emit the CO2.
These foreign
fuels power the state’s profitable and liberal Silicon Valley and
entertainment industries – as well as the heavily subsidized electric
and hybrid vehicles that wealthy elites so love for their
pseudo-ecological benefits, $7,500 tax credits, and automatic entry into
fast-moving HOV lanes.
Meanwhile,
California’s poor white, black, Hispanic and other families get to pay
$4.23 per gallon for regular gasoline, the second highest price in
America – and 16.2 cents per kWh for residential electricity, double
that in most states, and behind only New York, New England, Alaska and
Hawaii.
However, the state’s
eco-centric ruling classes are not yet satisfied. Having already
hammered large industrial facilities with costly carbon dioxide
cap-and-trade regulations, thereby driving more jobs out of the state,
on January 1, 2015 they will impose cap-and-trade rules on gasoline and
diesel fuels. That will instantly add at least 12 cents more per gallon,
with the price escalating over the coming years.
Regulators
are also ginning up tough new “low-carbon fuel standards,” requiring
that California’s transportation fuels reduce their “carbon intensity”
or “life-cycle” CO2 emissions by 10% below 2010 levels. This will be
accomplished by forcing refiners and retailers to provide more
corn-based ethanol, biodiesel and still-nonexistent cellulosic biofuel.
These
fuels are much more expensive than even cap-tax-and-trade gasoline –
which means the poor families that liberals care so deeply about will be
forced to pay still more to drive their cars and trucks.
In
fact, Charles River Associates estimates that the LCFS will raise the
cost of gasoline and diesel by up to 170% (!) over the next ten years,
on top of all the other price hikes.
In
the meantime, China, India, Brazil, Indonesia, Germany and a hundred
other countries are burning more coal, driving more cars and emitting
vastly more carbon dioxide. So the alleged benefits to global
atmospheric CO2 levels range from illusory and fabricated to fraudulent.
Of course, commuters who cannot
afford these soaring prices can always park their cars and add a few
hours to their daily treks, by taking multiple buses to work, school and
other activities.
There’s more, naturally. Much more. But I’m out of space and floundering amid all the lunacy.
Can
we really afford to inflict California’s insane policies on the rest of
America? In fact, how long can the Left Coast afford to let its ruling
classes inflict those policies on its own citizens?
Paul Driessen
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