A Gas Tax Instead of CAFE

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I’m working on a post describing what I think the Big Two and a Half ought to propose on December 2 when they drive their hybrids to DC (in lieu of flying) to beg for money again. As part of that, I will suggest that they ask Congress to levy a stiff gas tax. But since I am getting into more and more discussions with environmentalists who want any bailout to be tied to increased CAFE standards, I’m going to lay out why I think a tax is much better than increased CAFE standards for everyone.

Why CAFE Standards Suck at Achieving their Goal

I’m going to start with the assumption that the goal of CAFE standards is to force auto manufacturers to build more environmentally efficient cars (arguably that’s not what it was originally intended to do). It does so with brute force regulation that does not, at the same time, change the actual market-wide interest (or not) in environmental efficiency.

Until gas reached $4 plus this summer (and things are returning–though haven’t entirely returned–to where they were now that gas has gotten cheaper again), people calculated "energy efficiency" into their considerations when buying a car in terms of cost of ownership–that is, as one factor among others: how much the car cost, how much monthly loan payments would be, how much maintenance cost, how much insurance cost, and how much gas to run the car cost (this is reflected by the stickers dealers use to sell their cars, which usually describe efficiency both in terms of MPG but also in terms of year gas costs). For most people, efficiency is still a cost issue, and not a benefit per se.

Now consider how that will factor into the choice of a vehicle. For a lot of people, all those cost calculations will be less important than perceived safety or utility arguments. So if having something that feels like a tank is really important to you, you’re going to buy something that feels like a tank and only then consider how much it’ll cost you to run your psuedo-tank. The cost calculations will weigh, overall, much less in your consideration.

But if cost of ownership is your primary consideration, then you’re going to look at the cheapest cars that meet your basic needs, and pick which one is actually cheapest to run. Read more →

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T. Boone or not T. Boone

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h/t www.thewindturbines.com/

h/t www.thewindturbines.com/

We have had quite the go lately here at the FDL Borg Hive over the automaker bailout and, more specifically, the most pressing of which is GM. For the moment though, I want to touch on a corollary to the future of the American auto industry, and that is the transition to clean and green that needs to occur for long term sustainability of Deetroit wheels.

If we could flip the switch on a perpetual motion device, heck even the Chevy Volt, tomorrow, that would be wonderful. But we cannot. The path back to health and profit prosperity for American auto will be a process that takes time, and it is going to take intermediate steps while the new technology comes on line, gets refined and evolves into maturity.

The guy, for better or worse, that has been out front making noise about the transition from oil to clean and green is none other than the infamous, and legendary, Texas oil man T. Boone Pickens. Transition is the key word regarding the Pickens Plan as it relates to our topic de jour, automobiles. Because the Volt is not scheduled for release until 2010, and even assuming GM and its Volt makes it that far (which is no given), it will take a while for plug in technology to become deeply rooted. And, of course, a massive shift all at once to electric autos would crash our strapped and deteriorating power grid.

Pickens’ main point on internal combustion transition is that natural gas should be a, it not the, transition fuel for cars, and, more significantly, fleet vehicles.

Pickens’ Plan proposes that the natural gas that is currently used to fuel power plants could be used instead as a fuel for thousands of vehicles. Ken Medlock says that the US will continue to use natural gas for electric power generation. Natural gas burns cleaner than coal, making it an increasingly popular fuel for power plants. Gas plants also produce fewer greenhouse gas emissions.

The technology needed for Compressed Natural Gas (CNG) vehicles such as City buses, fork lifts and passenger cars with CNG drivetrains is available now. Honda sells the Civic GX, with a 170-mile range. In addition, it is possible to convert vehicles to run on CNG in addition to leaving the conventional fuel injection intact, allowing the driver to switch back and forth at will. Kits are available for the do-it-yourselfer. Read more →

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Putin Invades Alaska

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Apparently, while Alaska’s eagle-eyed governor has been traipsing about the lower 48 inciting lynch mobs, the Russians have invaded Alaska.

OAO Gazprom offered to help Alaska develop its natural resources, as Russia’s largest energy producer seeks to expand into the U.S. amid the worst chill in relations since the Cold War.

State-run Gazprom sent eight senior executives to Anchorage for talks yesterday with Alaska’s Department of Natural Resources and ConocoPhillips Chief Executive Officer Jim Mulva, state and company officials said.

Gazprom, which already supplies a quarter of Europe’s natural gas, is seeking to increase its reach with projects around the world, including in North America. The courtship of Alaska comes three weeks before the U.S. presidential election, in which Russia’s resurgence has become a campaign issue.

"The timing is as interesting as the visit itself,” said Chris Weafer, chief strategist at UralSib Financial Corp. in Moscow.

Sarah Palin, governor of Alaska and Republican candidate for vice president, has criticized Prime Minister Vladimir Putin for "rearing his head” over Russia’s sea border with her home state. Relations between the countries hit a low after Russia routed U.S. ally Georgia in a five-day war in August.

"Gazprom’s entire senior management goes into Sarah Palin’s backyard during a contentious election,” Weafer said. "There’s a message there.”[my emphasis]

Actually, I think one of two things is going on. Vote for which you think it is–or give your own explanation in the comments.

It’s possible that Vladimir Putin took one look into Sarah Palin’s eyes (between winks, of course) and saw they were soulmates: authoritarian, vindictive, and power hungry. So he decided Alaska was a place he wanted to be. (Plus, Putin’s been known to be impulsive when it comes to beautiful women.)

More likely, he saw Sarah Palin as an easy mark, and thought it’d be fun to fuck with Palin’s bid to be Vice President.

Update: Looks like the answer’s B! Putin snuck into Alaska and negotiated with Palin’s direct appointees without Palin knowing about it. 

Palin has argued that her state’s proximity to Russia, as well as trade missions between the between Alaska and Russia, have helped give her the foreign policy experience necessary to be Vice President. But the campaign said Read more →

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From Pollan to the President

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I’ve been arguing for a while that Michigan–the state with the second greatest agricultural diversity after California–ought to use innovations in sustainable agriculture as part of its plan to drive economic recovery.  Agriculture is going to have to be more sustainably produced in the future, and MI is uniquely suited to lead in developing the policies and technology to accomplish this goal.

But then, we should be talking about how to pursue this sustainable future more widely.

Which is what Michael Pollan does in this long letter to the next President, recommending a number of changes to our food policies. Here are Pollan’s comments on the ties between our food and the petroleum that goes into it. 

After cars, the food system uses more fossil fuel than any other sector of the economy — 19 percent. And while the experts disagree about the exact amount, the way we feed ourselves contributes more greenhouse gases to the atmosphere than anything else we do — as much as 37 percent, according to one study. Whenever farmers clear land for crops and till the soil, large quantities of carbon are released into the air. But the 20th-century industrialization of agriculture has increased the amount of greenhouse gases emitted by the food system by an order of magnitude; chemical fertilizers (made from natural gas), pesticides (made from petroleum), farm machinery, modern food processing and packaging and transportation have together transformed a system that in 1940 produced 2.3 calories of food energy for every calorie of fossil-fuel energy it used into one that now takes 10 calories of fossil-fuel energy to produce a single calorie of modern supermarket food. Put another way, when we eat from the industrial-food system, we are eating oil and spewing greenhouse gases. This state of affairs appears all the more absurd when you recall that every calorie we eat is ultimately the product of photosynthesis — a process based on making food energy from sunshine.

[snip]

The F.D.A. should require that every packaged-food product include a second calorie count, indicating how many calories of fossil fuel went into its production. Oil is one of the most important ingredients in our food, and people ought to know just how much of it they’re eating.

[snip]

Read more →

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John McCain and Sarah Palin Wallowing in Oil

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I noted the other day that John McCain had falsely claimed that Sarah Palin was governor of the state that provided 20% of the nation’s energy.

Now aside from the fact that McCain is wrong about his claim that Alaska provides 20% of our energy supply (it provides 20% of our oil, relatively little–at least thus far–of our natural gas, and insignificant amounts of coal, nuclear, wind, or solar power), he’s basically arguing that a guy like George Bush has the national security qualifications to be President.

And we saw how well that worked out. 

All in all, I’d say, McCain’s making a great case for voting against Sarah Palin.

Apparently, the woman McCain says more about energy than anyone else in the country–Sarah Palin–believes the same erroneous thing.

GIBSON: But this is not just reforming a government. This is also running a government on the huge international stage in a very dangerous world. When I asked John McCain about your national security credentials, he cited the fact that you have commanded the Alaskan National Guard and that Alaska is close to Russia. Are those sufficient credentials?

PALIN: But it is about reform of government and it’s about putting government back on the side of the people, and that has much to do with foreign policy and national security issues Let me speak specifically about a credential that I do bring to this table, Charlie, and that’s with the energy independence that I’ve been working on for these years as the governor of this state that produces nearly 20 percent of the U.S. domestic supply of energy, that I worked on as chairman of the Alaska Oil and Gas Conservation Commission, overseeing the oil and gas development in our state to produce more for the United States.

GIBSON: I know. I’m just saying that national security is a whole lot more than energy.

PALIN: It is, but I want you to not lose sight of the fact that energy is a foundation of national security. It’s that important. It’s that significant.[my emphasis]

 Here’s FactCheck.org correcting McCain and Palin (and me–turns out I was too generous to Alaska in my earlier post):

Palin claims Alaska "produces nearly 20 percent of the U.S. domestic supply of energy." That’s not true.

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McCain Makes the Case that Energy State Governors Are Great on National Security

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Joe Sudbay is right—this interview, in which McCain is challenged to explain why Governor Palin is qualified to be a 72-year old heartbeat away from the presidency, is terrible.

But I’m most interested–disturbed, really–by his latest explanation of how Sarah Palin is qualified on the matter that McCain says matters most: national security. 

Reporter: You say you’re sure she has the experience, but I’m just asking for an example. What experience does she have in the field of national security?

McCain: Energy. She knows more about energy than uh probably anyone else in the United States of America. She represe–is a governor of the state that 20% of America’s energy supply comes from there. And you all know that energy is a critical and vital national security issue.

McCain is basically arguing that serving as governor of a state that supplies a lot of America’s energy gives a person great national security credentials.

Hmmm. Governors of states that supply lots of energy … states that supply lots of energy … lets see, those would include Alaska, Louisiana, …

Ut oh.

And Texas.

Now aside from the fact that McCain is wrong about his claim that Alaska provides 20% of our energy supply (it provides 20% of our oil, relatively little–at least thus far–of our natural gas, and insignificant amounts of coal, nuclear, wind, or solar power), he’s basically arguing that a guy like George Bush has the national security qualifications to be President.

And we saw how well that worked out. 

All in all, I’d say, McCain’s making a great case for voting against Sarah Palin.

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What ELSE Mukasey Declines to Prosecute: Sexual Assault of a Subordinate

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I’ve just gotten through the first Department of Interior IG report, and wanted to pull out these few discrete details as an example of what Attorney General Mukasey has declined to prosecute.

The first report describes the corrupt acts of Gregory Smith, who managed the Royalty in Kind program. In that program, companies drilling on Federal land, give the government oil or gas, which the government then contracts to sell in lieu of payment for the drilling; one of the scandals underlying this program is that the companies contracted to sell the oil were getting contracts because they were cozy with someone in DOI, not because they could get us the best price. 

Among other things this report reveals is that Smith repeatedly offered himself as a consultant to companies doing business with RIK, promising to alert those companies of opportunities with other companies doing business with RIK.

But what really fries my ass is this bit. 

We interviewed yet another RIK employee who stated that in approximately 2005, Smith "insisted" that she ride in his car from one business establishment to another, and she agreed. 

The employee stated that Smith took "the long way" between the two businesses, and during the drive, he asked to go to her nearby home, but she refused. "He wanted to have sex; I said no," she recalled. Smith then asked if she would have oral sex with him, but she told him she did not want to. She said then Smith "basically forced [her] head into his lap," and she performed oral sex on him while he drove the car slowly. She said she resisted Smith when he pulled her head into his lap, but Smith did not relent and continued to pull her head down. She said Smith was "real persistent" but not violent, and she did not feel as though she had been sexually assaulted by Smith. She stated that it was difficult for her to have sex with Smith because he superivised her and RIK, but she "felt like [she] could get fired," so she did what Smith wanted. SHe said she was "scared" that if she did not do what Smith wanted her to do, it could possibly affect her employment. 

The report goes on to describe Smith telling this employee, when the OIG investigations began, that he was going to deny it if asked about it by investigators.

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What Republicans REALLY Mean When They Say Drill! Baby! Drill!

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They mean sex, corruption, and political scandal.

I first covered the scandal that is breaking big today at about the same time as Governor Palin took the oath of office in Alaska. 

This appears to have been the scam: Some time ago, the Interior Department introduced a "royalties in kind" program, which allowed oil companies to pay for the privilege of drilling for oil on our land in kind–in oil and gas–rather than in cold hard cash. The gimmick is that it was supposed to facilitate accounting. Up until recently (don’t worry–I’m going to figure out these dates), the oil went into the Strategic Petroleum Reserve (SPR).* But the SPR apparently is all filled up now, so recently the US government started contracting with companies to sell the oil on the "open market." But, as these things are bound to happen in the BushCo world, we didn’t take open bids for the contracts to sell the oil. We apparently just gave companies with ties to a bunch of Interior Department employees in Denver the contracts, which of course meant we got less money than we otherwise would have.

I even predicted,

How appropriate–this Administration will begin with an oil scandal. And it looks like it will end with one, too. 

That looks to be prescient, as the Department of Interior Inspectors General’s Report describing the scandal has thrown a whole lot of sex and drugs and improper gifts into the mix.

Government officials handling billions of dollars in oil royalties engaged in illicit sex with employees of energy companies they were dealing with and received numerous gifts from them, federal investigators said Wednesday.

The alleged transgressions involve 13 Interior Department employees in Denver and Washington. Their alleged improprieties include rigging contracts, working part-time as private oil consultants, and having sexual relationships with — and accepting golf and ski trips and dinners from — oil company employees, according to three reports released Wednesday by the Interior Department’s inspector general.

The investigations reveal a "culture of substance abuse and promiscuity" by a small group of individuals "wholly lacking in acceptance of or adherence to government ethical standards," wrote Inspector General Earl E. Devaney.

The reports describe a fraternity house atmosphere inside the Denver Minerals Management Service office responsible for marketing the oil and gas that energy companies barter to the government instead of making cash royalty payments for drilling on federal lands. Read more →

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Oil Wars

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alaska-oil-drilling.jpgThe Hill reports that, rather than forcing John McCain and a lot of endangered Republican incumbents to vote againt children’s healthcare again, Democrats in Congress are going to work on an energy bill that will include some allowance for drilling.

House Democrats are ready to propose an expansion of offshore drilling as part of a broader energy bill  they plan to introduce this month, according to a top Democrat.

Democratic Caucus Vice Chairman John Larson (Conn.) said the majority is prepared to back “responsible” offshore drilling through a bill that could be brought to the floor as early as next week.

[snip]

“We will consider responsibly opening portions of the Outer Continental Shelf for drilling while demanding that Big Oil companies use the leases they have already been issued or return them to the public,” Larson said Saturday in the Democratic response to the President’s radio address.

Larson said the legislation will also seek to curb excessive oil market speculation and call for a reinvestment of government royalties into alternative energy technology.

This is not actually news. When Obama said he would reluctantly accept more drilling as part of a package that included a lot of other, smarter energy policies, it became clear the party would follow his lead.

And, if it is done well, it might actually be brilliant jujitsu. If the bill were to define "responsible" by requiring that states agree to the drilling and by demanding that the drilling actually look like it would do some good, it would result in very little new drilling at all–because drilling is, from a policy standpoint, not "responsible." And a package could take the Republicans’ most successful (arguably, their only) policy recommendation, drilling, off the table for the election.

Of course, that all assumes this would be done well…

Meanwhile, in Alaska, the Caribou Barbie is trying to pull of her own energy jujitsu, though it’s not yet clear what that jujitsu might entail. Andrew Halcro reports that Governor Palin is trying to get the oil companies onto a conference call this week, but it’s not yet clear why she wants to talk. 

Governor Sarah Palin has requested a conference call this week with the CEO’s of the major oil companies playing a role in the potential development of Alaska’s natural gas pipeline.

Read more →

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Is Dick Stealing from the US and Giving to His Friends, Again?

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Remember the Minerals Management Service? That’s the Department of Interior agency that is supposed to make sure that when oil companies drill on US or Native American lands, the landowner gets a sufficient return for the oil or gas they take out of the land, or, alternately, that a sufficient amount of oil to account for the royalty on the drilling rights is given back to the US. It’s been at the center of scandal before:

For a while, when oil companies drilled oil on federal land, one of three things would happen:

  • The oil companies would cheat and tell the government they drilled less oil than they had
  • When such fraud was identified, DOI would order its auditors to overlook the cheating
  • The byzantine rules governing royalties would make it hard to collect the money you and I are owed

So DOI started a new program. We’d let someone drill oil, and in exchange, the oil company would put a similar amount of oil into the strategic reserve. But when the strategic reserve filled up, the government started using brokers to sell our oil.

It turns out that Susan Wooldridge and Steven Griles had some close ties (as in, sharing a house) to one of the companies bidding to be that broker company, and that that company got to sell our oil even though another broker was willing to charge a higher rate (and therefore pay taxpayers more money). So basically, these two lovebirds accepted a bribe and sold our oil to the lowest bidder.

To fix that problem, they established a Royalty Management Subcommittee, which was supposed to watch out for our interests:

it’s supposed to study:

  • The extent to which existing procedures and processes for reporting and accounting for federal and Indian mineral revenues are sufficient to ensure that the Minerals Management Service receives the correct amount.

  • The audit, compliance and enforcement procedures and processes of the Minerals Management Service to determine if they are adequate to ensure that mineral companies are complying with existing statutes, lease terms, and regulations as they pertain to payment of royalties.

  • The operations of the Royalty in Kind program to ensure that adequate policies, procedures and controls are in place to ensure that decisions to take federal oil and gas royalties in kind result in net benefits to the American people.

Though the Royalty Management Subcommittee proved it wasn’t really interested in transparency and oversight, seeing as how it had a penchant for meeting in secret.

Now, to be fair, the Royalty Management Subcommittee just got started last year, and it takes a long time to reverse Dick Cheney’s corrupt ways. But an IG audit by the Department of Energy has discovered that there are completely inadequate controls on the oil that’s supposed to go into our Strategic Public Reserve, and over a quarter of the oil is disappearing. Read more →

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