Category: Energy and Climate

My testimony tomorrow before Senate EPW subcommittees

Tomorrow I will be a witness at a hearing on the Clean Air Act Amendments of 1990 before the Senate Subcommittee on Clean Energy and Nuclear Safety and Subcommittee on Children’s Health and Environmental Responsibility.  I will be testifying on how the CAAA has stalled U.S. Economic Growth and how EPA’s purported economic benefits are not based on sound economic modeling. Highlights from the hearing and my full testimony will be posted here later in the day so please check back!  

Continue reading

Pipeline to Jobs, Growth & Independence

My response to this week’s question on National Journal’s Energy and Environment Experts on whether or not President Obama should green-light a controversial pipeline that would send a half-million barrels of Canadian oil to the United States. There is no question that if Americans want to see relief from high prices at the pump, we need to expand our domestic supply. Once referring to oil as “yesterday’s energy,” it’s encouraging to see the President now promote things like domestic oil exploration by expanding access to offshore and onshore reserves. Extension of the Keystone pipeline will also be a useful step to help the administration meet its one-third reduction of imported oil goal and also promote much needed job growth here at home.  As API’s Jack Gerard notes, Canada’s oil reserves are second only to Saudia Arabia and could provide the U.S. with a robust 830,000 barrels of oil a day in the future. Increased supply, reduced dependence on foreign oil and job growth are factors that are difficult to ignore and should be guiding the administration’s evaluation process.

Continue reading

The Economic Impact of a German Nuclear Plant Shutdown

What will Chancellor Angela Merkel’s decision to phase out nuclear power plants by 2022 mean for Germany’s economic future? ACCF’s Brussel-based affiliate, the International Council for Capital Formation, sponsored an analysis in 2005, “Kyoto Protocol and Beyond: The Economic Cost to Germany”, prepared by Global Insight (now IHS Global Insight).  See comparison of Exhibit 11 with Exhibit 16 below which shows how many more jobs and GDP will be lost if Germany phases out nuclear power by 2020. Germany’s current emission reduction target is 80% to 96% by 2050 which is close to the case run in the 2005 study assuming their target would be zero emissions by 2050. If Germany phases out its nuclear power by 2020 and tries to reduce CO2 to zero by 2050 (their current emission reduction target), the ICCF analysis shows that there will be additional 130,000 jobs lost in 2020 and an additional 120,000 lost in 2025 compared to the case where nuclear power is retained as part of the generation fleet.  GDP will also decline by about 10 billion real euros more in 2020 and 2025 when nuclear power is phased out compared  the case where it is retained.  

Continue reading

Markets, not government will bring us energy independence

See my response to this week’s National Journal topic “Gas Price Conundrum” moderated by former Michigan Governor Jennifer Granholm. Lawmakers seem to forget the laws of market economics and that U.S. oil producing firms are “price takers,” not “price makers” in a global market. They are not members of the price-fixing body, OPEC, whose oil production decisions are made, at least in part, collectively, and heavily influence the world market supply. Oil and gas companies are already investing in identifying and producing new energy sources, spending hundreds of billions over the last 25 years on new supplies of oil and natural gas. These investments are outpacing earnings by these companies. Rising oil prices encourage companies to invest more in finding new reserves and to increase production from existing fields. Yet, lawmakers still want to punish them by removing the deductions that many other sectors of the economy enjoy. Increasing taxes on oil company revenues will only reduce the desire and ability of firms to find and produce more oil. One of the axioms of public finance scholars is that if you tax something, you get less of it. The auto industry is already making great strides in making autos more…

Continue reading

Chairman Ryan Addresses Special ACCF Forum with Business Leaders

Business leaders and trade association executives from a broad spectrum of industry sectors, investors and members of the media were in attendance at an exclusive, invitation-only ACCF forum to hear House Budget Committee Chairman Ryan’s views on deficit reduction, tax reform and economic policy in the current congress and beyond. I shared my thoughts on tax reform and debt reduction with Ryan at the event. Washington Columnist Michael Barone noted: Ryan spoke at a breakfast this morning at the Phoenix Park Hotel sponsored by the American Council on Capital Formation. In an impressive speech delivered without visible text Ryan argued that “government activism” is holding the economy back and that “four foundations for economic growth” are being ignored because of (1) out-of-control spending, (2) “a regulatory state untethered to reality,” (3) “enormous uncertainty” about tax rates and (4) lack of sound money.

Continue reading