Jimmy: When we chose the recently-passed Senate Energy Bill for our Red, Green and Blue discussion this week, I really didn’t expect it to be such a great illustration of what not to do to secure our energy future. Since this is the same crew who left our last shot at reasonable immigration reform this decade to die on the vine, I guess I shouldn’t be surprised.

This bill is all about government and the main word is ‘control’. It bumps the CAFÉ standards up, controlling the type of car we will be able to buy in the future… it imposes greater control on domestic oil/refinery capacity… it imposes ethanol production mandates (thank you ADM and the farm lobby)… and generally says to America "We and our lobbyists know what is best for you."

Alternative energy research is up and that’s a good thing but the overall effect will be an energy bill that is not responsive to any of the expected advancements due to imposed inflexibility.

Sadly, the whole thing could be simply scrapped and replaced with an energy and geo-political tax on oil to cover alternative fuel development and to cover the tab for sending our soldiers across the globe every decade or so to protect world oil interests. Such a tax indexes the cost at the pump to the real cost of fuel, and, at the same time, gives us the resource and incentive to invest in winning alternatives. No bloated government programs and no cash-cow lobby paybacks for big agriculture. Suddenly, it just makes more sense for the consumer to vote with his/her dollars in a way that advances US energy independence without the peak and valley market effects of regulatory nonsense.

So the Energy bill is our topic today. We invite your thoughts in the comments below.

Editor's note: Red, Green and Blue is Green Options' weekly take on politics and the environment from both sides of the aisle. Jimmy Hogan represents the conservative position. Ryan Thibodaux's progressive take on this issue is here.

I’ve run the numbers and done the math. Because of our progressive tax structure I could easily quit my job and do just as well financially as I do now. My wife and I are a pretty typical two income professional household. Given income tax, social security taxes, sales taxes, etc. about one half of the second income ends up going to taxes in one form or another. It would be easy to fire the housekeeper, clip coupons, mow my own grass, change my own oil, dine out less and basically play defense with the family budget to the point where our lifestyle would actually be improved over the way we live now.

So what is it that drives me and everyone else like me to continue on this gerbil wheel of production and consumption? I’m not sure; but whatever it is, it is good for society. As of the 2004 data available here (table 6) over 68% of the federal income taxes are paid by the top 10% of earners in this country; and the top 50% of earners pay 96.7% of the total federal income tax bill. These taxes go to fund many programs including education, health and welfare and, certainly not least important, our federal government’s contribution toward environmental research and conservation. Given also that charity and private contribution to environmental causes must come primarily from those who actually have money, the higher income groups also fund private efforts disproportionately. The spending of this group also keeps all number of service jobs going that would not exist otherwise.

So back to the question. What is it that drives us to produce such that we may continue to residually benefit our own society and the world in such a large way? Top earners don’t have to work. Most could get by on much less than they earn now. It is a fact that our society is funded by people who choose to work, not by people who have to work. I believe that two basic freedoms contribute to this. The opportunity to earn a living doing what we want to do and the opportunity to spend surplus earnings in the way we see fit. Without these two factors our huge economic engine, upon which all public and charitable efforts depend, collapses.

Since I can only control my own desires and excesses, who am I to judge the excesses of others? If ownership of a big, honking, gas guzzling SUV motivates someone to get up and go to work every day then I’m not going to judge. I might question his intelligence given current gas prices, but that’s up to him. If I limit that which motivates him to produce, am I not harming the overall economic cycle? There’s nothing evil or wrong with overt wealth. As distasteful as it may be to some, the fact that Rush Limbaugh had about a million dollars to spend on a bionic ear actually blazed the trail for others and made the technology more affordable for less fortunate people with hearing loss.

If we index the cost of jet fuel and electricity to their real environmental and geopolitical costs then I say good for him that he can afford it. I’ve got a good friend who is a very strong environmental advocate but if I green-rate his BMW Z3 against my miserly 4 cylinder Honda Accord I’m sure I would win the contest hands-down. Does that make him a hypocrite? I don’t think so. I admire his environmental advocacy and enthusiasm (… plus, I must say that Z3 is a pretty sweet ride). The point is that it is fine to be an advocate for conservation, but we must also understand that, in the ultimate definition of unintended consequence. the opportunity for overt consumption is a motivating factor that keeps people working who might not otherwise work. This motivating factor serves our economy and everything that depends upon our economy including the environment.

Myth 1: Ethanol costs substantially more than gasoline.
There are many studies that have placed the whole cost of ethanol including cost to plant, fertilize, harvest and refine crops; higher than gasoline. There is some truth to the studies but what they fail to consider is the WHOLE cost of gasoline.

Currently oil energy imports represent 40% of our trade deficit. Worse, we are spending this money both directly and indirectly in a way that supports regimes that are hostile America. At the same time we are subsidizing our farmers to keep U.S. agriculture viable; often paying farmers not to grow various crops. Now I don’t know what the added geopolitical cost per gallon of gasoline is but I do know that if we consider these facts it substantially narrows the gap between the cost of ethanol and the cost of gasoline.

Add to this the obvious benefits of CO2 mitigation with renewable energy resources and I think we have a pretty even comparison between gasoline and ethanol.

I personally would rather our farmers profit from our energy demands rather than continue to contribute to a market that underwrites the Mad Mullahs in Iran or U.S. hating communists like Hugo Chavez. Shifting the world energy market to ethanol can solve these problems and make the U.S. a net energy exporter; and this is a good thing.

Myth 2: Every acre in the U.S. will need to be planted in corn to meet our energy needs at the expense of food crops.

Given the data at the time of many of these studies this is somewhat true but technological bioengineering breakthroughs in crop yields have helped and continue to help this problem. The most promising technology, though, is in cellulosic ethanol technology where enzymes are used to break down hard fibers from agricultural wastes and very hearty native grasses into fermentable sugars. This technology is proven and available and only suffers a capital infrastructure disadvantage to gasoline and conventional ethanol. Once this is overcome spinning gold from straw will become as common as an every week fill-up at the local service station.

Myth 3: Ethanol has a substantially lower energy yield than gasoline.

This is a myth I really hear often so it deserves a good bit of attention. It is true that the potential energy yield of a gallon of gasoline is higher than a gallon of ethanol. Most of the figures I’ve seen give gasoline about a 20% advantage. The problem with this statistic, however, is that the conventional internal combustion engine is unable to consume all of the energy that is available in a gallon of gasoline. Even in the most efficient engines we have today pump gasoline begins a process of pre-ignition or detonation when compression ratios get much higher than 9 to 1. This detonation occurs when the air and fuel mixture explodes prematurely in the combustion chamber and this limits the amount of energy we can derive from a gallon of gas. Under the same compression ratio ethanol has a lower energy yield than gasoline but at higher compressions (around 13:1) ethanol has a comparable energy yield without the problem of detonation. Our current generation of flex-fuel vehicles that burn both gasoline and ethanol are limited to the least common denominator of the lower compression. Once E85 ethanol blends are readily available across the country, however, cars manufactured specifically for this blend will get comparable mileage/performance.

Myth 4: Transportation infrastructure inadequate.

Again, in order to compare apples to apples we must consider the capital infrastructure advantage that gasoline has over ethanol. It is true that the corrosive nature of ethanol prevents it from being transported in the existing pipe-line network. Is it a fair to use gasoline’s existing playing field as a benchmark against one that has yet to be built for ethanol? If the other advantages merit a shift to ethanol as our primary transportation fuel source then shouldn’t the one-time capital infrastructure costs of transportation be negated in comparison to gasoline?

In any case it does not make sense to think of ethanol with the same centralized distribution network. Ethanol lends itself to a smaller distributed network where small immediately adjacent rural areas feed the urban areas next door. This has the further advantage of economic development and self sustainability of communities that many times rely on the welfare resources of urban economies. Ethanol can allow us to target depressed rural areas where unemployment is high with useful industry rather than health and human services handouts.

In summary…
Although I disagree with production mandates and certain tariffs that tend to cause vast price fluctuation and inflation of ethanol costs, I do believe that we should index the cost of gasoline to its real geopolitical and environmental costs. If we’re going to fight a war every decade or so to protect world oil interests, this cost should show up in the price at the pump. When it does, ethanol will quickly become a very appealing alternative. I also think it is important to protect our fledgling ethanol industry and certainly invest in cellulosic research but eliminating the sugar tariffs and encouraging open trade across the Americas in sugar is also a step in the right direction at least in the short term.

Photo Credit: TCSDailyThere is a vast perception in the environmental community and the population at large that George Bush is a slash and burn industrialist who destroys the environment for pleasure. Nothing could be further from the truth. Bush’s environmental record, though highly criticized, is reasonable and right; and is contributing greatly to the well being of Mother Earth.

Much of Bush’s criticism comes from undoing many of the things Clinton/Gore never really did in the first place.

Do you believe Clinton removed the arsenic from the water? Not only did he NOT do that, not only did he make us drink arsenic-laced water for the last 8 years, this order he signed stipulated that the arsenic was not to be removed from the water "until 2004." That's right. Look it up. Clinton's big environmental do-good act in the last minutes of his term guaranteed that we would be drinking the same levels of arsenic we've been drinking since 1942 — the last time a REAL Democrat had the guts to stand up to the mining interests and reduce the levels of this poison. The Canadians and Europeans did it long ago. Clinton made it official that we would all be drinking arsenic during the entire Bush administration. Maybe he was doing us a favor.

And how about those COO emission regulations that Bush II overturned? Did I say "overturn?" Overturn what? All Bush did was maintain the Clinton status quo. He said, in essence, that "I'm going to pollute the air at the very same levels Clinton did during his entire eight years, just as you are going to drink the same arsenic in the water under my watch as you did under Clinton's." And, like the built-in three-year delay in his arsenic reductions, Clinton's orders on the toxic emissions in his last days specified that they were not to be totally reduced '"until 2008, per the Kyoto agreement."

So, after violating the Kyoto accords he had signed by doing NOTHING about CO2 in the past few years, he then tries to look good by doing NOTHING about CO2 for another seven years! So the air that was dirty is still dirty and will remain dirty, just as Clinton had ordered.

 

I don’t share the writer’s contempt for Clinton. I just think that the standards were reasonable and that staying with earlier standards and working toward gradual improvement is a smarter tack. Sandbagging Bush with these unreasonable last minute executive orders was a pretty dirty political trick though and the media played along as anyone could have predicted.

Another misnomer is that Bush has not acknowledged global climate change and is deaf to the issue. This letter from March of 2001 would indicate otherwise:

Consistent with these concerns, we will continue to fully examine global climate change issues — including the science, technologies, market-based systems, and innovative options for addressing concentrations of greenhouse gases in the atmosphere. I am very optimistic that, with the proper focus and working with our friends and allies, we will be able to develop technologies, market incentives, and other creative ways to address global climate change.

The U.S. has made vast improvements toward CO2 mitigation and is on track to lead the world with policies refined by this administration.

Also there is a difference between talking the talk and walking the walk on energy and the environment. It seems World Conservation Superstar Al Gore has a little problem with energy consumption in his 10,000 square foot mansion. Bill Hobbs over at Ecotality.com notes a Tennessee Center for Policy Research article:

The average household in America consumes 10,656 kilowatt-hours (kWh) per year, according to the Department of Energy. In 2006, Gore devoured nearly 221,000 kWh - more than 20 times the national average. Last August alone, Gore burned through 22,619 kWh - guzzling more than twice the electricity in one month than an average American family uses in an entire year.

Evidently his Crawford Winter White House has 25,000 gallons of rainwater storage, gray water collection from sinks and showers for irrigation, passive solar, geothermal heating and cooling. “By marketplace standards, the house is startlingly small,” says David Heymann, the architect of the 4,000-square-foot home. “Clients of similar ilk are building 16-to-20,000-square-foot houses.”

George Bush also gets demerits from the environmental community for his general Fiscal Conservatism. For some reason fiscal conservatism is unhitched these days from environmental conservatism as if only running money through an inefficient, often corrupt and politically motivated bureaucracy will save the world. Nothing could be further from the truth.

Take Venezuela for example. Hugo Chavez is conducting the ultimate fiscal liberalism experiment by nationalizing all the oil, telecommunication and other private infrastructure. In doing so he is developing a new populist socialistic economy… with predictable results:

At this moment there are serious food shortages in Venezuela as he has increased government control over production and established unrealistic price controls for foodstuffs. Inflation in the food sector is running at 36% for the year. At the same time, unemployment and inflation rates are the largest in Latin America.

I predict Venezuela will continue to decline economically and the inevitable environmental rape will follow as they will have the economic means for nothing else. It’s a melodramatic melt-down of Ayn Rand proportions and it’s as predictable as the sun rising in the east.

In summary, a Google search of Bush + Environment will result in a legion of articles and commentary assailing the president on his environmental policy. In every article they take one small fragment issue to try to discredit the whole of a complex and effective environmental policy. The truth of the record shows that Bush has made steady progress on the environment while at the same time balancing reasonable economic concerns against environmental hysteria. He is a true Rational Environmentalist.

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