U.S. INDC to United Nations Raises Many Questions; U.S. CO2 Reductions Should Be Based on Cost/Benefit Analysis

Washington, DC – The U.S. Intended Nationally Determined Contribution (INDC) to the United Nations Framework Convention on Climate Change (UNFCCC) raises many questions related to international commitments and concerns over the impact on the U.S. economy. Cost/benefit analysis should guide any policy related to climate change., according to American Council for American Council for Capital Formation Senior Vice President and Chief Economist Margo Thorning. Thorning offered her views today at a hearing of the U.S. House Committee on Science, Space and Technology. Thorning questioned the likelihood of reduced fossil fuel generation in exchange for more expensive renewable energy sources in many developing nations at the same time that global energy demand is projected to grow by 37 percent by 2040. She also pointed to the challenge for the U.S. to reach previously announced emission targets by 2020 that were even lower than those proposed in the INDC. Last, how will implementation of regulations to achieve those targets impact the U.S. economy? “Policymakers need to balance environmental goals with the need to promote strong economic growth. They must consider the potential impact of regulations implementing the INDC since the U.S. economic recovery remains weak. Real GDP growth has averaged only 1.1…

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Low Oil Prices and Impact on the Oil Industry

After several years of relative price stability, the oil markets sailed into a perfect storm in the second half of 2014. High growth in supplies met with low growth in demand. Global oil supply was supported by production from U.S. tight oil plays, which exceeded 4 million barrels per day in 2014 — barrels that were not being produced in any large volumes just five years ago. In addition, Libyan supplies returned to the market more quickly than anticipated, despite continued unrest within the country, adding yet more barrels to OPEC’s 30+ million barrels per day of output. And then negative data on economic growth from China, Europe and Japan triggered downward revisions to oil demand outlooks. The surplus of supply relative to demand on the world market then triggered a sharp drop in prices. The global benchmark Brent crude oil fell from an average price of $112 per barrel in June to less than $50 at the time of this writing. This 60 percent drop is approaching the severity of 2008’s 70 percent drop. The jolt to the markets is real. And past experience reveals that lower price levels tend to be accompanied by greater price volatility. The combination…

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New Study Says Oil Exports Would Be a ‘Win, Win’ for U.S. Economy and National Security

Lifting the restrictions on U.S. crude oil exports would lead to further increases in domestic oil production, result in lower gasoline prices and support millions of additional jobs, according to a comprehensive new study commissioned by the Energy Security Initiative (ESI) at Brookings in coordination with a macroeconomic study contracted from National Economic Research Associates (NERA) Economic Consulting. The production boom from shale plays across the country, such as North Dakota and Texas, have sparked serious debate on what we should do with our new energy reality of abundant crude oil supply. To shed light on how our Administration should move forward with this new abundant energy source, the ESI partnered with the National Economic Research Associates (NERA) to examine the economic and national security impacts of lifting the ban on crude oil exports. And their findings were clear: it is time to match our policies to our current energy landscape. Economically, the study found that lifting the ban on crude oil exports from the United States will boost economic growth, wages, employment, trade and overall welfare. Each scenario used in the study model – delaying lifting the ban until 2015, lifting the ban only on condensates or lifting the…

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National Journal: How Should Climate Change Be Taught?

This weeks’ topic on National Journal’s Energy Insiders: How Should Climate Change Be Taught? The battle over climate science in schools is heating up. Earlier this month, a coalition of national science-education advocates released a students bill of rights asserting that students across the country should be taught the scientific consensus on climate change. The consensus view held by 97 percent of scientists, according to reviews of the academic literature, holds that the planet is heating up and human activity is the primary cause. Currently, however, a patchwork of state science standards exist that do not mandate the consensus view is taught, leaving the door open for controversy over climate change to get equal airtime in many classrooms. My response: States should decide how best to teach issues like climate change and climate change policies. Like any important issue–evolution vs creationism, national defense and health care policy–it is critical that students understand all sides of the debate. It was an honor for me to help present an economic perspective on the climate change debate to a group of middle school students in Atlanta, Georgia. See more about this athttps://www.capitalcorner.org…. For instance, it’s important for students to understand that climate change is a global…

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Act On LNG Video Release

Today, ACCF is releasing a new video – narrated by the Honorable Harold Ford, Jr. (D-TN) – telling the story of the Main Street benefits available to the United States through the export of liquefied natural gas. The U.S. energy reality has changed drastically of late, driven by game-changing advances in the production of natural gas from shale. Annual production ofnatural gas and oil from shale has grown by more than 50 percent since 2007, helping the United States to assert itself as a global energy superpower. The U.S. is now the world’s leading producer of natural gas, and the domestic and geopolitical implications of this feat are tremendous. The U.S. is now producing more natural gas than any other nation – recently overtaking the former global leader, Russia. And global production dynamics demonstrate that this is not an isolated or temporary condition. In 2014, conservative estimates from the Energy Information Administration (EIA) project that the U.S. will produce approximately 24 trillion cubic feet of natural gas and that Russia is on a downward slope at closer to 21 trillion cubic feet of natural gas. The United States has the capability and ingenuity to produce at even greater levels and…

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