Last week's post about Texas oil billionaire T. Boone Pickens stirred some full-throated debate that's worth revisiting. Some liked the Pickens Plan's sense of urgency, and some bemoaned its lack of acknowledging the long-term consequences of global warming. As the first of these comments trickled in, a piece by Cato Institute research fellow Will Wilkinson on NPR caught my ear, and Wilkinson sees Pickens' media campaign and promise to enlist legions of lobbyists in a far more dubious light. The case against Pickens goes like this: Despite its wide reach, this ad campaign is meant more for Congress and the President than it is for voters. Its real intention (and the intention of the lobbyists setting up offices along K St. in Washington) is to spur the government to use its power to tax, regulate, and subsidize—to pick winners in the alternative fuel game. And that winner would be Pickens, as he readily admits. He's building the largest wind farm in the world in Texas, and he's the largest supplier of transportation-related natural gas. His admonitions to the former Vice President and Nobel Prize Winner Al Gore that "global warming is on page 2 for me," may seem folksy and pragmatic, and I suppose we're supposed to excited that a fossil fuel man of Pickens' caliber is even interested in alternative fuels, but the "page 2" quip begs an equally pithy rebuttal. Here's one: if we don't deal with "page 2" there are massive waves of species extinctions, crop disruptions, and catastrophic climate changes waiting on page 3. Of course, as Wilkinson points out, Pickens could use wind power to replace dirty coal-produced electricity and still cash in on one half of his plan, but because he's already invested in natural gas, he's insisting on replacing a relatively clean alternative energy source with a very clean energy source, instead of relegating coal soot to Dickens novels.
There are some problems with Wilkinson's analysis. He says that if wind power and natural gas used for transportation fuel were the most efficient fuels, they would already be used at higher levels. It strikes me as odd that the conservative Cato Institute would have such faith in the transparency of heavily regulated and subsidized energy markets which apparently always allows the most efficient alternative fuels to rise to the top. Pickens, after all, (according to Wilkinson) is counting on the potential of these kinds of regulations to make his plan work.
It all seems to boil down to, "If you'd rather enrich a domestic energy cartel than a foreign one, The Pickens Plan is for you." I prefer neither.Must T. Boone Pickens (a former hedge fund manager, corporate takeover artist, and Swift Boat-funder) become a moral hero by making untold billions? One would hope that we could come together around preserving our planet for future generations without the cynicism attached to venture capitalism, but instead we have Pickens' half-baked scheme of a few good ideas wrapped in an convenient (for him, that is) investing strategy. That's a failure of moral leadership.
Alternative energy innovators should and will be rewarded by the market. But if Pickens concerns still stop at "page 2", it's time to close the book.
Comments (27)
This is all very new to me and this article really opened my eyes.Thanks for sharing with us your wisdom.
Posted by biotin side effects | July 4, 2010 7:08 PM
Posted on July 4, 2010 19:08
None of my comments are political just factual. It is now October 24th, 2008 the stock market is plunging to an all time low. The Busch economy is a disaster. Not politics but absolute fact. Conservatives who do not live in reality are a barriers to constructive discussion.
You are wrong about the nations energy future too. Coal is not clean it damages the biosphere and the health of human populations, it is expensive beyond the selected financial analysis you engage. There are collateral costs, big ones!
Revisit this post in a year. It will be clear who is pandering political junk mail disguised as informed relevant input.
Posted by Terry L. Walker, AIA | October 24, 2008 6:14 PM
Posted on October 24, 2008 18:14
Before you can sell the power you have to build the generation power plant. I am not talking about homeowner system built out of pocket with borrowed money from the banker and retail prices but rather a commercial privately owned venture capital funded power plant that can write off the costs of the goods sold.
The existing infrastructure is long since amortized. The power plant has been paid for but you still pay the fuel cost. In the case of oil or coal that include wells and tankers or mines and railroads. Photo-voltaic power plant is a 20 year payback maximum and the infrastructure has only a 5% maintenance burden and a 100 year generation life.
What is needed most however to make that potential flower is large scale energy storage capacities and an honest comparison of the alternatives. Typically the established energy industry wants to compare their existing fully amortized power plant operation to the cost of home owners installing solar electric themselves at retail prices. Not apples to apples is it?
No accounting magic required Alan. The infrastructure for solar electric is less expensive to put in place and operate and the fuel is free.
Posted by Terry L. Walker, AIA | October 24, 2008 6:04 PM
Posted on October 24, 2008 18:04
RE: Posted by Terry L. Walker, AIA | August 15, 2008 6:49 PM
Mr. Walker states: "ALTERNATIVE ENERGY SOURCES ARE CURRENTLY & ULTIMATELY LESS EXPENSIVE IF YOU FULLY CAPTURE THE COSTS."
I wish he would inform all electrical utility companies today so that they might "fully capture the costs" of his accounting system, reduce our utility bills and provide sustainable, renewable energy tomorrow - instead of charging a premium for renewable energy sources while maintaining the existing carbon based electrical generation in their inventories.
Alan L. Hewitt, AIA
Tulsa, OK
Posted by Alan L. Hewitt, AIA | October 10, 2008 5:47 PM
Posted on October 10, 2008 17:47
Once again, aan idea is put out there and the liberal left's only strategy is to cut it to pieces. Is it jealousy? Must be. I'm continuously amazed when, in every election year, liberals are voted into and back into office. Why don't 90+ % of all Americans see liberals for what they are, or are not?!? Bankrupt of any original ideas of their own - thus they attack all comers and waste a full year in Congress doing nothing but talking about altenative energy sources and how the Republican plan for drilling now is not the solution. While our fuels costs continue to skyrocket, they have done nothing. All Americans, at this critical time on our history should really be asking themselves this election year, why should I support a party who's only motivation is to keep the American people under their thumb, dependent on big government, thereby securing their own jobs??? I truly beleive these kind of radical socialist/ communist policies if not put in check, better yet, completely extinguished, by the voters within the next few years will lead to the downfall of our great nation within my daughter's lifetime. This was not the intent of our founding fathers!
Posted by ken | August 22, 2008 9:35 AM
Posted on August 22, 2008 09:35
“Someone needs to protect us from liars in blogs who ignore the science in favor of self-serving and echewed economic analysis.”
Thanks Terry.
It is my earnest hope that everyone will follow up reading this blog in its entirety by reading the following three items:
1. The 175 page US Senate Environment and Public Works Committee Minority Staff Report dated December 20, 2007
(epw.senate.gov/public/index.cfm?FuseAction=Files.View&FileStore_id=bba2ebce-6d03-48e4-b83c-44fe321a34fa)
2. The book titled: Unstoppable Global Warming, Every 1500 Years by Fred Singer and Dennis Avery, 2007, Rowman & Littlefield Publishers
3. Federalist Paper 10 by James Madison that addresses the violence of factions in a republican system of government (http://www.constitution.org/fed/federa10.htm)
Posted by Shawn Emmons | August 20, 2008 1:17 PM
Posted on August 20, 2008 13:17
Thanks Kahne, I love cars too and so do both of my sons. There is a race car being built in my garage right now. I work at home but when I drive, I drive a little Nissan that gets 30 MPG and someday will have a fossil free or hybrid car. Wish I had a twin turbo 95 300 ZX in the garage. Americans love cars.
Our cities came to form around the kinesthetic scale of the automobile rather than the human scale of the older European and Asian cities. Giving up cars is not completely feasible if you live in a U.S. city, but we also are heavily networked by communications systems and endowed with massive computer capacities at home.
We need to embrace all the opportunities and viable alternatives that we can. We cannot require that people stop driving cars but we can empower people who can, to work from home the better part of a work week. We need to do what we can to reduce the carbon footprint, save energy, reduce the number of automobile trips in a day and the amount of fossil fuel expended for cooling buildings and heating buildings.
We can drill at home but hanging on to that domestic oil is an imperative until we can mobilize armed forces around the world using other stored energy suitable for generating on demand power. We need those windmill farms and solar rooftop power plants plants to break the addiction to foreign oil.
I advocate capitalism as the path to a sustainable energy future. I also advocate active participation by government to accelerate the migration from the current state to a more desirable and sustainable future state.
TLW
Posted by Terry L. Walker, AIA | August 18, 2008 11:20 PM
Posted on August 18, 2008 23:20
That is "plume" of smoke, for those of you who are holier than thou and will criticize me for being honest about wanting to create my own "green house gases". (I'm only going off the kahuna / cojones debate earlier on)Oh my!
Posted by Kahne O'Banion | August 18, 2008 6:38 PM
Posted on August 18, 2008 18:38
Mr. Eammons and Mr. Walker (I am assuming you are both male), you both raise wonderful points. I have researched the situation, although not in the depth that you two have, because I don't think one has to be so complicated. I think the majority of people agree in sustainability and conservation, I do. It behooves everyone from client to architect to design energy efficient builidngs that are made of renewable resources. I, as well as many, believe we need to utilize all technologies to power our world, including fossil fuels. One thing I abhor is a zealot, and in the enviornmental movement, the extreme movement, there are people not willing to get us from point A to point B, but skip to point Z. We can't just stop using oil. As long as there is plastic, deodorant, toothbrush, diapers, etc. there will be oil drilled and refined and used. Until someone invents a nuclear powered airplane, for example, there will be use for oil. This weaning off oil and coal (and all fossil fuel) is going to take awhile, if it can ever be done. I believe a lot of damage has been done to our atmosphere from volcanoes,cow's emmisions, and, ahem, human emissions. But all of that stuff belched out of the earth and our bodies make wonderful fertilizer that grows the corn we use for ethanol. It's a natural cycle. One can't stop natural processes, just like we will never stop supposed global warming. That's not to say that pollution doesn't exist, it does and it affects our health and our environment.
How are we going to require people stop driving cars or using big trucks or boats? We won't. Hopefully we can have a hydrogen engine be the norm in 20 years, but until then more fuel efficient gas / diesel powered vehicles will have to suffice.
The sad thing about fossil fuels is that not only does it create pollution, but it also supplies money to islamo-fascists to kill innocent people all around the world. Until we reach the sad conclusion of the internal combustion engine, hopefully we will be using our own supplies of oil so that we are not supplying wealth to terrorists overseas. Regardless of what side of the global warming debate you fall on, both sides have certain moral questions to answer and it all has to do with the killing of life on earth. That is where I find Mr. Pickens ideas valid: he is trying to get a conversation started as well as just one solution that can help. Sure, his program isn't perfect, but I see him trying to use a moral arguement on the other side of the Global Warming debate to get wind farms going. He sees things as a business man, and terroists affect his bottom line. That is why Global warming is second on his list. So don't discount Mr. Pickens plan for not adressing global warming, he is adressing the other moral delimma that is more important to him, which is the transfer of our wealth to the terroist nations that hate our guts. Morality isn't realative, but it does have different sides, black and white if you will. So everyone has given great points on this issue, and I've learned alot. Some of us think in simpler terms than some of the information provided, and I thank all those that have posted to this blog!
One a final note that has nothing to do with the debate at hand:
I personally like muscle cars, especially '67 corvettes. I like to suck up lots of gas and go really fast, just for the fun of it. It's really fun to burn rubber and stomp on the gas to leave a plime of smoke behind!! It will be a sad day for me, and many others, not to be able to drive that 1967 Corvette or 1969 Shelby Mustang, both cars that my father restored showing his artistic expression. They are the prized posessions of my family. I hope it will take a long time to be rid of gasoline, if only for my own selfish reasons. Sigh.
Posted by Kahne O'Banion | August 18, 2008 6:31 PM
Posted on August 18, 2008 18:31
In general I like what Mr. Pickens suggests. There are only three options in the survival imperative, adapt, migrate or die. Mr. Pickens is saying it is time to adapt.
With all due respect to Mr. Mize, I am certain Mr. Demming was making my point and not yours. Change is inevitable in this circumstance. My list of proposed changes is very desirable in the current circumstance.
"Also, we don't "need" to make any of the changes proposed. We don't have to. As Edward Deming put it, "Survival is not mandatory"."
Obviously I disagree with this statement, as I am sure you all know as architects change is the fundamental imperative of the professions survival, growth and progress and we do need to make changes in the profession and in built environment. Design intelligence alone requires change just as the survival imperative, (your ref Mr. Deming) requires adaptation. Oil is no longer an economically viable energy alternative. Mr. Pickens has added great value simply by lending his credibility to that reality.
I agree with Mr. Pickens analysis and proposal for the most part. I would expand his proposal to include all other alternative energy sources and hesitate over continued long term use of any fossil fuels.
TLW
Posted by Terry L. Walker, AIA | August 15, 2008 8:28 PM
Posted on August 15, 2008 20:28
Shawn Emmons is grossly misinformed and has shortchanged fact in favor of selected vision.
First, I am not a Clinton fan I am a conservative. The fact is that Clinton balanced the budget. Busch has damaged the domestic economy. The economy was better then than now. People had more money to spend then than now. Your argument defies the personal experience of every reader. I do not see the point of constructing such an argument it is like telling physical reality it does not exist, it is an act of intellectual bankruptcy.
Yes, we back the economy with treasury securities, we did so under Clinton and under the Busch administrations and those securities are debt instruments, SO WHAT?
The economy is not a zero sum phenomena. Building is economic growth. Energy efficiency is simply the application of design intelligence. Applied intelligence makes money for everyone.
Market competition is driven by short term economic thinking. Such thinking fails to capture all the future costs and burdens the nation. Coal passes future costs to the american people.
Our cites are built by speculative capital investment in a competitive market place. This is good.
The nature of that competition often short changes the future and quality of built environment when short term economic consideration control the problem solutions. Limited vision cannot produce the most desirable future state.
Economic tunnel vision is bad government and bad business.
Not raising taxes to fix our cities is a large version of not raising taxes to repair roads. It is simply stupid to intertain that such decisions are cogent or that such thinking as embodied by Shawns diatribe will lead to problem solutions.
The Pickens plan has some desirable attributes and is short sighted regarding others.
Built environment is huge and has huge impacts. The transportation sector also has huge impacts. The fossil fuel economy has limited survival capacity for future generations. The best hope and lifestyle for future generations is to adapt, to retrofit the existing built environment and ensure that all current and future buildings are constructed to high energy standards.
Achieving that is good government and good business.
Creating new industry is good for America not bad for America.
COAL is bad for the environment unless high technology is utilized. If they build coal plants and sequester the CO2 coal is ok. That is not the economical version of coal that Shawn suggests.
Damage to the global climate is bad for America. That is bad government and bad business. Coal is not a desirable solution to the energy problem because it is not as economical as the alternatives when viewed in the real world broad perspective of the aggregate costs; the high technology is expensive.
If they build coal plants and sequester the CO2 coal is ok. Super critical CO2 if it can be bottled up safely has potential uses for the next $250,000 years.
Shawn said "Subsequently, one unbelievable approach is offered as a panacea; “Alternative Energy Sources.”"
Is it unbelievable that I know how and many other architects know how to do it economically?
This demonstrates intellectual bankruptcy and selective vision applied to polarized purpose.
New clean power industries are good government and good business.
Global warming is a real life phenomena and not a hoax perpetrated by the worlds climate scientists.
Contrary claims represent a willful distortion.
I am not making Global Warming up as an excuse to tax people.
Life on Earth is dependent on carbon dioxide (CO2) to regulate the temperature of our planet, but too much can create a heat-trapping blanket over our atmosphere. In the last century, unsustainable population growth and excessive consumption have raised levels of CO2 so dramatically that the earth's climate has been altered in ways never experienced before.
Agricultural expansion and forest depletion have multiplied emissions of greenhouse gases like CO2, but it is our dependence on fossil fuels that propels monumental atmospheric change. When we burn fossil fuels such as coal, oil, and gas, we release unsustainable levels of CO2—the primary global warming culprit.
Those of us living in the developed world bear a majority of the responsibility for reversing this disturbing trend.
Is It Really Happening?
Yes. Earth is already showing many signs of worldwide climate change.
• Average temperatures have climbed 1.4 degrees Fahrenheit (0.8 degree Celsius) around the world since 1880, much of this in recent decades, according to NASA's Goddard Institute for Space Studies.
• The rate of warming is increasing. The 20th century's last two decades were the hottest in 400 years and possibly the warmest for several millennia, according to a number of climate studies. And the United Nations' Intergovernmental Panel on Climate Change (IPCC) reports that 11 of the past 12 years are among the dozen warmest since 1850.
• The Arctic is feeling the effects the most. Average temperatures in Alaska, western Canada, and eastern Russia have risen at twice the global average, according to the multinational Arctic Climate Impact Assessment report compiled between 2000 and 2004.
• Arctic ice is rapidly disappearing, and the region may have its first completely ice-free summer by 2040 or earlier. Polar bears and indigenous cultures are already suffering from the sea-ice loss.
• Glaciers and mountain snows are rapidly melting—for example, Montana's Glacier National Park now has only 27 glaciers, versus 150 in 1910. In the Northern Hemisphere, thaws also come a week earlier in spring and freezes begin a week later.
• Coral reefs, which are highly sensitive to small changes in water temperature, suffered the worst bleaching—or die-off in response to stress—ever recorded in 1998, with some areas seeing bleach rates of 70 percent. Experts expect these sorts of events to increase in frequency and intensity in the next 50 years as sea temperatures rise.
• An upsurge in the amount of extreme weather events, such as wildfires, heat waves, and strong tropical storms, is also attributed in part to climate change by some experts.
Why would any rational informed person advocate coal plants?
COAL PLANTS WILL ACCELERATE GLOBAL WARMING. ALTERNATIVE ENERGY SOURCES ARE CURRENTLY & ULTIMATELY LESS EXPENSIVE IF YOU FULLY CAPTURE THE COSTS.
Selective vision is the human defect that defeats coherent logic.
Selective vision reduces environment to economics and concludes we can not afford to protect the environment. Climate scientists lampoon vapid diatribes laced with pseudo economic theories. How silly does it get? Try this example.
1. Carbon emissions are not a problem because in a few years genetic engineers will develop “carbon-eating trees” that will sequester carbon in soils. Ah, the famed Dyson vision thing, this is what we came for. The seasonal cycle in atmospheric CO2 shows that the lifetime of a CO2 molecule in the air before it is exchanged with another in the land biosphere is about 12 years. Therefore if the trees could simply be persuaded to drop diamonds instead of leaves, repairing the damage to the atmosphere could be fast, I suppose.
The problem here, unrecognized by Dyson, is that the business-as-usual he’s defending would release almost as much carbon to the air by the end of the century as the entire reservoir of carbon stored on land, in living things and in soils combined. The land carbon reservoir would have to double in size in order keep up with us. This is too visionary for me to bet the farm on.
2. Economic estimates of the costs of cutting CO2 emissions are huge. In an absolute sense, this is true, it would be a lot of dollars, but it comes down to a few percent of GDP, which, in an economic system that grows by a few percent per year, just puts off the attainment of a given amount of wealth by a few years.
And anyway, salesmen will be salesmen, business-as-usual will always argue that the alternative would be catastrophic to our economic well being. Remember seat belts? Why is it that Dyson’s remarkably creative powers of vision (carbon-eating trees for example) fail to come up with alternatives to the crude and ugly process of burning coal to generate electricity?
3. The costs of climate change are in the distant future, and therefore should be discounted, in contrast to the hysterical Stern Report. I personally can get my head around the concept of discounting if the time span is short enough that it’s the same person on either end of the transaction, but when the time scales start to reach hundreds and thousands of years, the people who pay in the future are not the same as the ones who benefit now. Remember that the lifetime of the elevated CO2 concentration in the air is different from the lifetime of CO2 to exchange with the biosphere. Release a slug of CO2 and you will increase the CO2 concentration in the atmosphere for hundreds of thousands of years. The fundamental tenet of civil society is to protect people from harm inflicted by others. Someone needs to protect us from liars in blogs who ignore the science in favor of self-serving and echewed economic analysis.
Are we a civilized species, or are we not? The question is analogous to using economics to decide whether to abolish slavery. Guess what a economic analysis of slavery always supports slavery. I’m sure it was very costly for the Antebellum Southern U.S. to forego slave labor, but it simply wasn’t an economic question.
4. Majority scientists are contemptuous of those in the minority who don’t believe in the dangers of climate change. I often find myself contemptuous of efforts to misrepresent science to a lay audience. I for one and there are many reading this forum. have done the homework. I am an architect and also an MBA. The economic basis of your arguement is vaper ware.
The target audience of denialism is the lay audience, not scientists and not architects and engineers. It's made up to look like science or economics, but it's PR. Lindzen’s tortured and twisted representation of the science to non-scientists has been documented. If Lindzen had a credible argument to support his gut feeling (and apparently Dyson’s), I can promise that I for one would take it seriously. I’ve got kids at home whose future I worry about. If Lindzen were right, no one would be happier about that than me.
I have compassion for people who have been mislead by things they have read. I have compassion for people who ignorantly serve political interests or philosophies.
There is no excuse for people who obfuscate reason under the pretense of expert.
So I do get contemptuous of bullshit when selected references are used to advance selected vision, and I will not tolerate traitors to reason in silence.
TLW
Posted by Terry L. Walker, AIA | August 15, 2008 6:49 PM
Posted on August 15, 2008 18:49
ON COGENCY AND BANKRUPTCY
We must be able to accurately identify the challenge facing us in order to properly address it. I read what has been posted and I see a conflation of two different perceived problems.
First, we have a need for an adequate, affordable energy supply. (The Picken’s Plan attempts to offer a solution to this problem.)
Second, some posit an urgent need exists to remedy supposed consequences that follow from the theory of Anthropogenic Global Warming (AGW).
Several who have offered thoughts see fit to bind the two issues into one comprehensive dilemma. Subsequently, one unbelievable approach is offered as a panacea; “Alternative Energy Sources.”
Why?
Because “there will be a fossil fuel energy shortage.”
NO.
Fact:
America has more than 250 billion tons of recoverable coal reserves, the equivalent of 800 billion barrels of oil, more than three times Saudi Arabia’s proven oil reserves.
Fact:
America has more than 200 years of available coal reserves.
Source: americaspower.org
Shortage?
No.
As for political philosophy….. Context matters. Someone posted the following: “The Government could VERY EASILY START A HUGE PROGRAM…” I responded that it cannot and should not. Of course it can. It can raise the debt ceiling. It can appropriate more of what you earn. It can do so with force and still claim legitimacy. The government can pi$$ down your back and tell you it is raining. But that doesn’t mean it is actually raining.
Someone posted the following in a fit of morally superior condescension: “FACTS must always precede correction of errors.”
So here is a question for Clinton sycophants: Does the Executive branch produce budget legislation by itself? If a balanced budget existed and if a surplus existed for any given year, how does that fail to translate into a reduction of the total federal debt? The answer is because the analysis is confined to public debt holdings. Public debt is only part of the total federal debt. One might say that the public debt was reduced from FY 1998 – FY 2000. During that same period, however, the debt that is intergovernmental holdings increased along with the total federal debt. Intergovernmental holdings comprise a debt the government owes to itself (in the future.) For some this must not constitute an actual liability. It is a liability that will have to be paid by taxpayers in the future therefore it is debt and that is why it is included in the total debt figure. Total debt increased every year of both the Clinton and Bush administrations.
Source:
www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo4.htm
www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo5.htm
At first glance, these details of our federal debt might not seem germane to this discussion. It is, however, a matter of credibility. AGW alarmists posit we will be fiscally responsible if we elect representatives who are responsive to hypersensitive environmental concerns. Alarmists cite a surplus whose very existence is belied by an ever increasing debt. Alarmists cite a fossil fuel shortage. We have an abundance of coal.
Coal…
Big Coal is the new Big Oil.
That is why the AIA has aligned itself with Architecture 2030. This special interest group ran an ad (available on its website: www.architecture2030.org/pdfs/newyorktimesad.pdf) that calls for a coal moratorium. To prove the viability of such an absurd idea this group offers the following:
“Over an 11-year period (1973–1983), the United States built approx. 30 billion square feet of new buildings, added approx. 35 million new vehicles and increased real GDP by over one trillion dollars (in year 2000 dollars) while decreasing its energy consumption and CO2 emissions.”
The lie that you and I are supposed to believe is that we can realize continued economic growth while reducing energy consumption and emissions.
Proof? The Energy Information Administration’s 2007 Annual Energy Review, Table 2.1a is the source for this supposed energy reduction.
(Measured in Trillions Btu)
From 73-83 we find a decrease from 75,708 to 73,038.
From 72-82 we find an increase from 72,704 to 73,153.
From 74-84 we find an increase from 73,991 to 76,714.
The referenced 11 year period of decreased energy consumption is anomalous to the general trend of increased energy consumption, increased CO2 emissions and economic growth. The time frame is conveniently arbitrary so as to be disingenuous.
What we can expect politically:
America's Climate Security Act of 2007 also known as Lieberman-Warner:
According to the Congressional Budget Office Cost Estimate (April 10, 2008):
Summary:
“S. 2191 would set an annual limit or cap on the volume of certain greenhouse gases (GHGs)
emitted from electricity-generating facilities and from other activities involving industrial
production and transportation.”
“CBO estimates that enacting S. 2191 would increase revenues by about $1.19 trillion over
the 2009-2018 period, net of income and payroll tax offsets. Over that period, we estimate
that direct spending from distributing those proceeds would total about $1.21 trillion. The
additional direct spending would exceed the added revenues by an estimated $15 billion, thus
increasing future deficits (or decreasing surpluses) by that amount over the next 10 years.
In addition, assuming appropriation of the necessary amounts, CBO estimates that
implementing S. 2191 would increase discretionary spending by about $3.7 billion over the
2009-2018 period. Most of that funding would be used to support EPA personnel,
contractors, and information technology necessary to implement this legislation.
In years after 2018, annual direct spending would continue to exceed the net revenues
attributable to the legislation each year, resulting in increased deficits (or decreased
surpluses). Pursuant to section 203 of S. Con. Res. 21, the Concurrent Resolution on the
Budget for Fiscal Year 2008, CBO estimates that changes in direct spending and revenues
from enacting the bill would cause an increase in the on-budget deficit greater than $5 billion
in at least one of the 10-year periods after 2018.
S. 2191 contains several intergovernmental mandates as defined in the Unfunded Mandates
Reform Act (UMRA). CBO estimates that, during the first five years following enactment,
states would realize a net benefit as a result of this bill’s enactment (resulting from the
allowances they would receive). Therefore, the annual threshold for intergovernmental
mandate costs established in UMRA ($68 million in 2008, adjusted annually for inflation)
would not be exceeded.
S. 2191 also would impose private-sector mandates as defined in UMRA. The most costly
mandates would require certain types of private-sector entities to participate in the
cap-and-trade programs for GHG emissions created by the bill. CBO estimates that the cost
of those mandates would amount to more than $90 billion each year during the 2012-2016
period, and thus substantially exceed the annual threshold established in UMRA for
private-sector mandates ($136 million in 2008, adjusted annually for inflation).”
Yes, that is right. S. 2191 would have imposed at least a 90 BILLION DOLLAR per year private sector mandate. Who will pay that? Big coal? NO. The consumer will pay that.
That is real bankruptcy.
Point of reference: AEP Appalachian Power indicates in its 2007 Environmental Information report that its Average Fuel Mix of Electricity Provided to Virginia Customers consists of 86.9% coal. As it is, AEP is going before Virginia’s State Corporation Commission to ask for a 23.9% rate increase.
If S.2191 or similar legislation becomes law, a 23.9% rate increase will look like insignificant.
Coal is the serious inexpensive domestic energy source.
A coal moratorium is a favorite policy proposal of political watermelons.
Posted by Shawn Emmons | August 13, 2008 12:34 PM
Posted on August 13, 2008 12:34
Mr. Skelley sells wind turbine electricity, much like Mr. Pickens wants to do. In Texas, our electricity is de-regulated. I choose what type of energy to use. Some people choose companies like Mr. Skelley's wind turbines to service their home, and they pay more per kilowatt hour. I, on the other hand choose a clean coal power company, because it is significantly cheaper and it keeps more people working. I will agree to disagree with you on carbon dioxide emssions into the atmosphere. co2 is not detrimental to the earth, it is natural, and second to water vapor as the predominant green house gas. Most co2 is created naturally, and to offset nature by charging money for a "footprint" is just a way for the Green Orthodoxy to collect wealth and control from the masses. I don't think Al Gore is correct in his assumptions. We will just have to disagree, because science doesn't prove or disprove the crisis that we may think we are in. We could easily be wrong, and working toward another ice age since the temprature of the earth has stabilized for the last 7 years. No one knows......
Posted by Kahne O'Banion, AIA | August 12, 2008 6:23 PM
Posted on August 12, 2008 18:23
Ms. O'Banion -
Thank goodness I'm not the only one here demeaning other people's views ("Green crap", etc.).
You say that you will subscribe to Mr. Skelly's company when the price of his electricity comes down. What happens if it doesn't? What if Mr. Picken's electricity proves to cost more than what you're currently buying? Does sustainability become unimportant if it happens to cost a little bit more? You're willing to pay an astronomically wealthy man a profit for the sake of capitalism, but you're not willing to pay any extra to stop pumping carbon into the air? Do you really think that we can keep doing that and it will have no effect on the atmosphere?
You're right when you say that "We can develop all the alternative energies that we want, but until the emerging middle classes in India, China, and Russia participate in the "ecological concerns" like we do, then all that we do is in vain." Of course, since we use most of the fossil fuel in the world, there's little incentive for them to do so, is there?
I don't think you can assume that we all agree that the government isn't going to solve our energy crisis. Maybe not the current one, but I don't understand why you think the private sector is necessarily going to do so. If cutting carbon emissions or eliminating our dependence on foreign oil doesn't make the most profit (not just "a profit", but more than its competition - that's how capitalism works), then you can forget about private enterprise stepping up to the plate.
Posted by Frank Callis, AIA (Anonymous) | August 12, 2008 4:51 PM
Posted on August 12, 2008 16:51
Anonymous, enough with kahunas and cojones already! What I have posted on this blog is not a trivial mistake but valid comments on the Pickens Plan. I think it's a great idea. I trust him rather than our government to help solve a problem. That was my point.Every point on this blog is valid, such as yours, except when you try to demean others views. The picture of the Time mag that is placed on this web site is from a March 1985 issue. I live in Texas, where in my district a Mr. Skelly is running for congress and he created the most successful sustainable electric company from wind. It electrifies 1 million homes. That's great and I will subscribe to his company when the prices come down. There is nothing but this Green crap being shoved down Americans' throats, especially on this AIA web site. There is nothing wrong with "being green", but there is more to our energy crisis than Global Warming, which I believe is not fact. We can develop all the alternative energies that we want, but until the emerging middle classes in India, China, and Russia participate in the "ecological concerns" like we do, then all that we do is in vain. Nothing will be done in this country to solve our energy crisis unless someone can make money at it. Period. Mr. Pickens has money and he is trying to solve a problem. He has valid ideas, but what happens when the wind doesn't blow. Do we have technology that can store the power he creates? That goes for solar power as well. I think we all agree that the government isn't going to solve our energy crisis. Only the private sector can do that. That was my point anonymous.
Posted by Kahne O'Banion, AIA | August 12, 2008 2:29 PM
Posted on August 12, 2008 14:29
Sorry, that was my response to Ms. O'Banion above.
Frank Callis, AIA
Posted by Frank Callis, AIA | August 11, 2008 10:44 PM
Posted on August 11, 2008 22:44
Ms. O'Banion -
My apologies for mistaking your gender, but let me assure you that one need not be from the South to be a lady. I believe the actual spelling of the term in question is "cojones".
My bigger apology to you is for using a trivial mistake on your part to try to make a point regarding the know-nothings that diverted what was to be a discussion of the merits of Mr. Pickens' proposal into a platform for pontificating on the virtues of market capitalism, as if we haven't been hearing about that incessantly for years on end, and as if that philosophy has had nothing to do with the predicament we find ourselves in currently.
I have no problem with the fact that Mr. Pickens is going to make a pile of money, but I do question why, with other, more advanced technologies coming ever closer to practical application, we should continue tinkering with the internal combustion engine. Yes, we can supply our own natural gas, and yes, we can free ourselves somewhat from our dependence on foreign oil, but will we be selling ourselves short by diverting our resources to stop-gap technologies when other, more promising modes of energy production and distribution are a only few years away? We are a debtor nation, and we need to make wise use of the limited investment resources we actually have. Rather than pouring our money into a futile effort to extend the life of an obsolete technology, why not use solar and wind power to satisfy our transportation needs in addition to the generation of electricity? Natural gas is still a carbon-based fuel. At some point, we will have to abandon its use, or at the very least use it in the cleanest and most efficient way, one that doesn't involve the same millions of little pollution sources that populate our highways today.
Having said all of that, I still do find merit in Picken's proposal. Wind and solar energy production on such a massive scale will accelerate the development of the technologies that we will need to make wind and solar not only viable alternatives to fossil fuels, but the obvious standard. More power to him, but I think his proposal is for a transitory improvement that has a limited, if useful lifespan.
Posted by Anonymous | August 11, 2008 10:43 PM
Posted on August 11, 2008 22:43
Mr. Callis,
As a southern female, I refered to kahunas, instead of the unlady-like term that men usually say. I mis-spelled it and meant kahones. Because my boyfriend is Hawiian (believe it or not) I usually say that word in those terms. Is that all you had a comment about? What is your actual opinion about the subject?
Posted by Kahne O'Banion, AIA | August 11, 2008 2:35 PM
Posted on August 11, 2008 14:35
Mr. Mortice, Mr. Terry:
There is nothing inherently wrong with getting rich. And there is certainly nothing wrong with getting rich by providing the public with something it wants and believes it needs.
Benjamin Franklin (who grew quite wealthy providing public-minded services like newspapers, pamphlets, private fire brigades, toll roads, weapons for the Pennsylvania militia, etc.) called it, "Doing well by doing good."
Also, we don't "need" to make any of the changes proposed. We don't have to. As Edward Deming put it, "Survival is not mandatory".
We have to want to do this. Painfully high gas prices are a start. Hopefully, this will lead to greater public dialogue about energy policy instead of greater political demagogue about who is to blame, because there are no quick fixes and easy solutions.
Blaming the oil companies for high prices and dependency is like blaming your crack dealer when you find yourself penniless and addicted with your teeth falling out.
One value of the Pickens Plan is that it raises public awareness of our dependency, of where our money is going and what alternatives to oil exist.
Posted by Scott Mize | August 11, 2008 10:12 AM
Posted on August 11, 2008 10:12
There will be a fossil fuel energy shortage and the private sector will want to profit from that.
Boone Pickens has indicated that alternative energy is now a feasible economic choice as well as a more sustainable source of power for the nation. This is a good thing.
The morality of the matter is in the hands of the body politic, we need to tell the next president and the congress to solve the nations problems anyway. Mr Pickens may have much to gain with a somewhat self serving plan, but to put it bluntly, the whole nation has a lot to gain by building a sustainable energy future. We can build a better future for all of us.
I do not see a downside Zach, there is clearly nothing to fight over, capitalism and government must both be harnessed to empower a positive & effective change from an existing state to a more desired future state. Mr. Pickens wants us to do something we pretty much have to do anyway. He says:
"America is in a hole and it's getting deeper every day. We import 70 percent of our oil at a cost of $700 billion a year - four times the annual cost of the Iraq war. I've been an oil man all my life, but this is one emergency we can't drill our way out of. But if we create a new renewable energy network, we can break our addiction to foreign oil. On January 20, 2009, a new President gets sworn in. If we're organized, we can convince Congress to make major changes toward cleaner, cheaper and domestic energy resources."
He wants us to write the congress and the next president and urge that a prudent progressive energy policy be put into place.
There are things left out of the Pickens plan that we need to add in there when we talk to government. We should write to the state and federal government frequently. See below:
1. We need to raise the bar on our energy technology and become a cleaner and greener nation. Cover the rooftops of our cities with integrated photo-voltaic energy systems. Government needs to empower large scale rooftop powerplants to be built on top of america's cities. Government can help with legislation and dollars.
2. We need to have wind farms too, and geothermal and small scale hydro power plants where it is feasible.
3: To accomplish 1. & 2. we need to build energy storage capacities into the existing power generation and delivery system. We need both small scale energy storage and regeneration systems and large scale systems. This will give the existing power generation infrastructure a backbone.
4. As architects we need to design better new buildings and retrofit the existing buildings to reduce the built environments demand for electrical power. we must be more sustainable and self sufficient.
5. We need to dramatically reduce the number of cars and trucks on the roads and highways so we need to make work from home a standard operating process where and when it is feasible. We need alternative energy systems to replace gas powered ground transportation.
6. We need to replace fossil fuels from abroad with renewable domestic energy sources. We need robust cottage industry to replace foreign imports of all other goods when and where we can.
7. Today we can get started by using energy wisely and minimize waste whenever and wherever we can.
Posted by Terry L. Walker, AIA | August 10, 2008 2:19 AM
Posted on August 10, 2008 02:19
I vote for action instead of a vacation.....i.e. Pickens Plan + Drill Now, Drill Here, Pay Less. Then maybe someday Washingtion can work on the many other valid actions needed by the government(?)
Posted by George A Trosky | August 8, 2008 5:23 PM
Posted on August 8, 2008 17:23
Someone please tell Mr. O'Banion that kahunas are Hawaiian chiefs. I thought Mr. Pickens was building his wind farm in Texas. Does anyone on this blog really know what they are talking about?
Posted by Frank Callis, AIA | August 8, 2008 3:08 PM
Posted on August 8, 2008 15:08
Mr. Pickens simply ignores the better part of the solution set and includes natural gas which is a hydrocarbon producing fossil fuel and not part of the sustainable energy solution. Wind power is a good viable renewable source of power.
Beyond the obvious error of focusing on natural gas and selecting only wind power however, Pickens is adding great benefit by pointing out that there is money to be made in the energy industry by embracing sources of alternative energy.
Big Oil in general has already embraced photo-voltaic solar and invested many millions of dollars in the manufacturing technology of solar cells.
Mr. Pickens, is just like many other people in the world that have been subjected to false information about global warming by special interests.
Who did this to us? Jim Inhofe has been engaged in the tactics of eschew obfuscation and disinformation for years. Conservative elements in the oil industry and the Republican party have funded Jim Inhofe and his disinformation campaign to "debunk" the global warming trend.
This brand of ignorance is therefore widespread in the oil industry even though to rational people, the idea that the consensus of the worlds climate scientists are engaged in a massive hoax is obviously ridiculous.
James Mountain "Jim" Inhofe (born November 17, 1934) is an American politician from Oklahoma. he is a member of the Republican Party, he currently serves as the senior Senator from Oklahoma. He is among the most vocal critics of global warming in Congress. Inhofe often cites the Bible as the source for his positions on various political issues.
He has damaged the rational debate on energy policy in the Congress of the United States and is a traitor to reason. He should be denounced.
Inhofe, is the former chairman of the Senate Committee on Environment and Public Works. He abused that position to manipulate the nations environmental policy. He is a strong advocate of big oil and a negative voice and critic of the scientific consensus that climate change is occurring as a result of human activities.
In a July of 2003, Senate speech, Inhofe claimed to offer "compelling evidence that catastrophic global warming is a hoax. That conclusion is supported by the painstaking work of the nation's top climate scientists.
Mr. Inhofe cited as support for this the 1992 Heidelberg Appeal and the Oregon Petition (1999), as well the opinions of individual scientists that he named. Despite the fact that most climate scientists, as represented by the Intergovernmental Panel on Climate Change (IPCC), believe that climate change is an existing phenomenon, and that human activity is a significant contributing cause of global warming. In his speech, Inhofe also claimed that, "satellite data, confirmed by NOAA balloon measurements, confirms that no meaningful warming has occurred over the last century." However the satellite temperature record corroborates the well-documented warming trend noted in surface temperature measurements. Additionally, the satellite record begins in 1979 and the balloon record effectively in 1958, so it is fuzzy exactly what Inhofe means by "last century". Inhofe's views and distortions have been opposed by climate scientists but have not been criticized by big oil.
The oil industry with the assistance of congress has poisoned the American people and the domestic energy policy of the United States by proliferating disinformation about global warming. Many people have been persuaded that there is no global warming trend and people in the oil industry often believe that scientist have NOT reached an agreement or consensus of opinion.
Despite the fact that Mr. Pickens has revealed in his statements considerable ignorance regarding global warming, and has made technical errors in the proposed solutions that he has personally endorsed, I applaud his message and admire his courage in breaking with the rank and file of his industry. Mr, Pickens said:
"America is in a hole and it's getting deeper every day. We import 70 percent of our oil at a cost of $700 billion a year - four times the annual cost of the Iraq war. I've been an oil man all my life, but this is one emergency we can't drill our way out of. But if we create a new renewable energy network, we can break our addiction to foreign oil. On January 20, 2009, a new President gets sworn in. If we're organized, we can convince Congress to make major changes toward cleaner, cheaper and domestic energy resources."
Obviously we need to harness capitalism to build a new energy future. The debate here is largely about what Mr. Pickens is leaving out of his statements. here is my list;
First, Global Warming is a serious problem and all fossil fuels are bad.
Second, all alternative energy sources must be developed and deployed not just wind power.
Third, Solar rooftop power plants and wind energy farms are both currently affordable renewable and desirable large scale power plant solutions in most of the United States and the world and should be immediately and aggressively imlemented.
Fourth, the construction of Energy Storage Systems will give the existing power generation infrastructure a backbone and simultaneously empower a robust alternative energy industry.
Finally, new energy policy will require the support of congress, new legislation, and a partnership with government.
Posted by Terry L. Walker, AIA | August 8, 2008 1:40 PM
Posted on August 8, 2008 13:40
Hooray Kahne O'Banion!
In our quest for green the only realistic first step is Energy Independence. The sense of urgency created by the global warming crowd has heightened awareness, and that is a good thing. However the "all or nothing" attitude needs to give way to "all of the above" in the quest for reigning in our appetite for cheap, easy energy. In the 19th century when coal burning was poisoning England petroleum based fuels were a godsend that helped them clean up their air. Thanks to controls already in place here we never got to their level and the air is getting cleaner. Not as fast as the extremists would like, but it is going in the right direction. T. Boone Pickens plan would take us another step in the right direction. The conversation about how much money he would make sounds more like communist jealousy to me than rational thought. And speaking of communists what part of the world should be the real largest concern of environmentalist, isn't it China? As for global warming; it is treated as an undeniable fact linked to carbon. The attitude reminds me of the tale of the Emperor's New Clothes in which swindlers convinced everyone that the their invisible cloth could only be seen by the most intelligent and forward thinking people. No one wanted to admit they were not in that group so they played along until an ignorant, but honest child while watching the King on parade asked his mom "why is the King naked?". Too sudden of a rush in the "all or nothing" direction would only serve to collapse th U.S. economy, and perhaps the nation, long before any of the dire prediction arrive. Historical note: Remember Mount Pinatubo, the volcano that blew it's stack about 20 years ago? It pumped thousand of tons of carbon into the air. That resulted in global cooling of 1 - 2 degrees over the next year. Perhaps we gain more from the shading than we have to fear from the resistance of carbon in our air.
Posted by Tim Stormont, AIA, LEEDtm-AP | August 8, 2008 12:48 PM
Posted on August 8, 2008 12:48
www.americansolutions.com/
www.drillheredrillnow.com/index.html
Posted by Shawn Emmons | August 8, 2008 12:17 PM
Posted on August 8, 2008 12:17
Mr. Pickens is out there trying to solve a problem with capitalism. What is wrong with that? Many of us out here believe in conservation and sustainability, but do not think that Global Warming is a fact. It has not been proven and there are an equal number of scientists who disagree. If you want to pay Al Gore for your god given carbon footprint, then by all means continue to make him more wealthy in his big house that sucks up three times the electricity than the rest of us. I say we drill for oil here and use it ALL, in conjunction with alternative fuels. The people in a free society deserve to use the natural fuel of their choice. Oil, hydrogen, wind, solar, gas -- it is all natural and will continue to be created as long as there is carbon in the atmosphere. It's better than the government dictating to us what we can use or not. Businessmen like Mr. Pickens can create new jobs through the free market by building wind farms and electrical plants thus supporting our economy with good paying jobs. The government can only create jobs by confiscating more of our hard earned money for the continued failed policies that continue to annoy me each day. I always take my chances on the free market and American ingenuity over the too powerful federal government solutions. Mr. Pickens has a good idea and the kahunas to back it up. Who cares that there will be more lobbyists in Washington. Why does his suppport of the swiftboat veterans have anything to do with it? This isn't a political issue, it is an economical one. Last time I checked creating lobbies and using those to get legislation passed is legal.If that is how you have to work the system to get something done, then do it. At least he hasn't sold out to the Enviornmentalist Crazies Lobbies, like so much of our government has done, to where as of now, both houses of Congress can't even vote on an Energy Policy. Until we have that, then nothing will be done. Here we are in a crisis, and the Congress is out on vacations that most of us can't even afford to go on, because they refuse to make policy and have refused to fix since Bill vetoed drilling in Anwar. We are in a pickle people, and Mr. Pickens has given a solution that even our own government can't get together and discuss. I'll take Mr. Picken's ideas, although not perfect, over a government bueracracy anyday. At least he has started a decent dialouge in this country. It's about affordable energy stuipid, not global warming right now.
Posted by Kahne O'Banion, AIA | August 8, 2008 10:14 AM
Posted on August 8, 2008 10:14
Marketplace is a production of American Public Media, not NPR. They are two different public radio organizations.
Posted by omcg | August 8, 2008 9:59 AM
Posted on August 8, 2008 09:59