Commentary Magazine


Topic: environmental movement

Dems May Regret Steyer’s Keystone Payoff

After a lengthy study of the plans for the construction of the Keystone XL pipeline, the U.S. State Department issued an 11-volume report back in January confirming what most experts had already concluded long before then: the vital project would not damage the environment or increase the rate of carbon pollution. But liberal activists weren’t happy and have used the 90-day automatic review process that followed that report to furiously lobby the administration to stop the construction of the 1,700-mile pipeline from Alberta to the Gulf Coast refineries. The key player in that effort was Tom Steyer, the billionaire environmental extremist who has pledged to give $100 million to Democratic candidates who do his bidding. Though President Obama has flirted at times with doing the right thing and letting the project proceed, the result of the push from Steyer and the rest of the global warming alarmist crowd was as predictable as it was politically motivated. In a Friday afternoon news dump to guarantee minimal news coverage, the State Department announced that it would indefinitely postpone the decision on approval of Keystone.

Like the numerous delays of implementation of many of the provisions of ObamaCare, the delay in the final decision on Keystone is blatantly political. By putting it off until after this year’s midterm elections, the president is hoping to both assuage left-wing donors who are essential to his party’s waning hopes of holding on to the Senate and to allow vulnerable red-state Democrats to avoid blame for a decision that would hurt the economy and the cause of energy independence. But though this seems like an astute compromise that will allow the president to play both ends against the middle, it is a case of the administration being too clever by half. Far from helping the cause of Democrats like Alaska’s Mark Begich, Colorado’s Mark Udall, and Louisiana’s Mary Landrieu, the Keystone delay has handed Republicans an issue with which they can batter these incumbents. Though liberals like Obama have sought to demonize GOP donors like the Koch brothers for trying to buy votes to advance their libertarian agenda, the Keystone decision is nothing less than a $100 million payoff to Steyer.

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After a lengthy study of the plans for the construction of the Keystone XL pipeline, the U.S. State Department issued an 11-volume report back in January confirming what most experts had already concluded long before then: the vital project would not damage the environment or increase the rate of carbon pollution. But liberal activists weren’t happy and have used the 90-day automatic review process that followed that report to furiously lobby the administration to stop the construction of the 1,700-mile pipeline from Alberta to the Gulf Coast refineries. The key player in that effort was Tom Steyer, the billionaire environmental extremist who has pledged to give $100 million to Democratic candidates who do his bidding. Though President Obama has flirted at times with doing the right thing and letting the project proceed, the result of the push from Steyer and the rest of the global warming alarmist crowd was as predictable as it was politically motivated. In a Friday afternoon news dump to guarantee minimal news coverage, the State Department announced that it would indefinitely postpone the decision on approval of Keystone.

Like the numerous delays of implementation of many of the provisions of ObamaCare, the delay in the final decision on Keystone is blatantly political. By putting it off until after this year’s midterm elections, the president is hoping to both assuage left-wing donors who are essential to his party’s waning hopes of holding on to the Senate and to allow vulnerable red-state Democrats to avoid blame for a decision that would hurt the economy and the cause of energy independence. But though this seems like an astute compromise that will allow the president to play both ends against the middle, it is a case of the administration being too clever by half. Far from helping the cause of Democrats like Alaska’s Mark Begich, Colorado’s Mark Udall, and Louisiana’s Mary Landrieu, the Keystone delay has handed Republicans an issue with which they can batter these incumbents. Though liberals like Obama have sought to demonize GOP donors like the Koch brothers for trying to buy votes to advance their libertarian agenda, the Keystone decision is nothing less than a $100 million payoff to Steyer.

In her usual role as administration apologist, Democratic National Committee Chair Debbie Wasserman Schultz was trotted out today on NBC’s Meet the Press to deny that the decision was politically motivated. But like so much of what comes out of Wasserman Schultz’s mouth, that assurance has zero credibility. The bottom line here is that a shovel-ready jobs project that will be good for the American economy and energy independence has been shelved, perhaps forever, because of the Democratic party’s dependence on a small group of environmental extremists with disproportionate financial and political clout.

Keystone critics howl about what they claim will be the negative impact on the environment from Canada’s recovery of oil from the sands of Alberta. But their claims are largely unproved. And, as far as the U.S. is concerned, spiking the pipeline won’t stop Canada from getting the oil out of the ground and shipping it somewhere. The only question is whether the resources will be kept in North America or sent to China or some other place.

Obama’s delays of Keystone are a symptom of an administration that talks about wanting to promote jobs but is far more interested in sweetheart deals like the Solyndra boondoggle than in getting the government out of the way of the private sector on projects that could actually put a lot of people to work. While their focus on alternatives to fossil fuels seems admirable, it actually betrays hostility to economic development and industries like oil refinement and coal that remain essential to the country’s future.

The Keystone delay is also symbolic of the way Obama’s indifference to energy independence has hindered U.S. foreign policy. At a time when European dependence on Russia as well as the Middle East has hampered efforts to defend Ukraine’s independence or to rally the world behind the cause of stopping Iran’s nuclear quest, the administration’s politically-motivated foot-dragging on Keystone is more evidence of how an unwillingness to lead by example has hamstrung Obama.

But the bottom line of the Keystone delay is that for all their talk about the Kochs and the supposedly malevolent forces financing the right, there is no longer any doubt that this administration is far more dependent as well as more in the pocket of men like Steyer than the Republicans are on any single contributor or group. When faced with a choice between Steyer’s $100 million and doing the right thing for both the economy and energy independence, Obama’s decision was never really in doubt. Democrats who think voters are too stupid to make this connection may rue this corrupt and foolish move in November.

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The Answer Isn’t Blowin’ in the Wind

It has long been a contention of mine that the most important reason that governments shouldn’t make economic decisions, such as favoring one form of technology over another or bailing out a failing company, is that politicians—who are first, last, and always in the re-election business–can’t make decisions for economic reasons. They can only make decisions for political reasons.

Consider a thought experiment. Say there is a national widget crisis and there are two possible technological solutions to the problem. Most people in the widget industry think that technology A is the better bet. Technology B, however, has been researched by a company that has its headquarters and 40,000 employees in the state represented by Senator Snoot, who chairs the Senate Widget Committee. Which technology do you think Senator Snoot is going to favor? To be sure, he might put the national interest ahead of his political interests and thus become a candidate for a sequel to Profiles in Courage. But there’s a reason that that famous book is a very short one.

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It has long been a contention of mine that the most important reason that governments shouldn’t make economic decisions, such as favoring one form of technology over another or bailing out a failing company, is that politicians—who are first, last, and always in the re-election business–can’t make decisions for economic reasons. They can only make decisions for political reasons.

Consider a thought experiment. Say there is a national widget crisis and there are two possible technological solutions to the problem. Most people in the widget industry think that technology A is the better bet. Technology B, however, has been researched by a company that has its headquarters and 40,000 employees in the state represented by Senator Snoot, who chairs the Senate Widget Committee. Which technology do you think Senator Snoot is going to favor? To be sure, he might put the national interest ahead of his political interests and thus become a candidate for a sequel to Profiles in Courage. But there’s a reason that that famous book is a very short one.

One of the major components of the left these days, and by no means just in the United States, is the so-called environmental movement (so-called because it is, at heart, a misanthropic and anti-business movement, not an environmental one). And one of their current hobby horses is “renewable energy,” such as wind and solar power.  Liberal politicians have relentlessly pushed for this, offering lavish subsidies and tax advantages, ($14 billion for wind energy in the United States alone in the last four years) even though wind and solar energy still cannot produce electricity at a cost that can compete with coal or natural gas on a per-kilowatt basis.

But over and above that, there is a huge problem with renewable energy sources that environmentalists and their political allies ignore. I’m not talking about the vast amount of land wind farms and solar arrays require, nor the environmental damage they cause by, in the case of wind farms, killing huge numbers of birds, nor the fact that wind and sun tend to be most abundantly found in areas where electricity demand is low, such as the high plains east of the Rockies, necessitating long, visually polluting transmission lines to where power is needed.

No, the number one economic problem in the electric generation industry is the fact that electricity cannot be stored. It must be generated at the moment it is needed. That is a very expensive fact, for it means that enough generating capacity must be built to meet peak demand, even though peak demand is encountered only rarely (such as on very hot summer afternoons). Much of the time, the excess capacity just expensively sits there.

But with coal, natural gas, or nuclear plants, at least that capacity can be called on whenever needed. That is not true of wind and solar. They generate electricity only when the wind is blowing and the sun is shining. So while theoretical capacity may be large, actual capacity can be anywhere from 100 percent to zero percent of theoretical capacity. Germany, for instance, is gung ho for renewable energy. The Telegraph (H/T Instapundit) reports that Germany has a theoretical wind generating capacity of 29 gigawatts, about one quarter of the country’s average demand. The average output of Germany’s wind generating capacity, however, is only 5 gigawatts, 17 percent of the theoretical amount.

Thus, in order to be sure the lights stay on, not only must Germany build an electric generating capacity able to deal with peak demand, it must build one able to deal with peak demand when the wind isn’t blowing. So instead of needing to be able to generate 100 percent of peak demand, it needs to be able to generate 100 percent plus whatever percent of the generating capacity is in renewables. Renewables, in other words, make the most expensive fact about the electric generating industry much more expensive.

It gets worse. Germany now requires that renewables get priority:

In fact, a mighty battle is now developing in Germany between green fantasists and practical realists. Because renewable energy must by law have priority in supplying the grid, the owners of conventional power stations, finding they have to run plants unprofitably, are so angry that they are threatening to close many of them down. The government response, astonishingly, has been to propose a new law forcing them to continue running their plants at a loss.

Electricity is at the heart of the new digital economy. As the New York Times reported this morning, the Internet is now using about 30 gigawatts of power. Much of that electricity is used to provide back-up systems to ensure no interruptions, because any interruption would be disastrous. And, according to The Telegraph, Germany is having increasing difficulty keeping its electric grid stable, thanks to its increasing reliance on renewables.

Invent (and patent) a way to store electricity in a cost-effective way, and you will become very, very, very rich. But until that happens (and it seems, at least at present, that the physics just isn’t there to allow that) renewable electricity capacity is, in fact, no capacity at all.

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