Energy & Environment

OPEC embargo - 40 years later

Forty years ago, America fell victim to an oil embargo launched by the Organization of Petroleum Exporting Countries (OPEC) amidst a thorny political situation gripping the Middle East. At the time, the United States was importing just over a third of its oil —remarkably similar to today’s level. As oil supplies from key Middle East producers fell precipitously, oil prices quadrupled. America suffered a plummeting stock market, multi-hour gas station waiting times, and descent into the worst economic recession since the Great Depression.
We have made important progress on energy security since the early 1970s—in part driven by the lessons learned the hard way through oil crises. Unfortunately, four decades after the OPEC oil embargo, America remains dangerously dependent on oil.


Federal over-regulation nabs another victim: Television

Our government loves to regulate. The 2013 Federal Register is on track to reach over 78,000 pages by the end of the year, including more than 3,500 new, final rules. Overbearing federal regulations remove authority from the private sector, stifling innovation and ultimately harming the consumers they claim to protect, leaving them with outdated goods and higher costs.


A climate policy that would actually work

Carbon taxes are in vogue. Economists’ predilection for price signals as the universal solution has fused with environmentalists’ impulse to punish Big Oil and Big Coal to make carbon taxes the darling of the climate change debate.


Is the US falling behind Canada in exporting LNG to Japan?

British Columbia Premier Christy Clark landed in Washington D.C. on Friday to promote Canadian liquefied natural gas. And Japan’s Prime Minister Shinzo Abe two weeks prior made his first official visit to Canada to work on building a long-term energy relationship between the two countries.


A public-private global warming fix

Reducing carbon emissions is a challenge for both developed and developing countries. The best way to maximize their limited resources – contrary to general belief – is to ask the public and private sectors to work together.


Wind power is an American success story with bipartisan support

The Hill recently carried on its blog an attack on wind power by Christine Harbin of Americans for Prosperity, a group which is funded by competing energy industries and which, not surprisingly, strongly supports them instead.

If there is a sense of déjà vu from reading Harbin’s column, which calls for ending the federal wind energy Production Tax Credit (PTC), it’s because her claims are the same misinformed chatter about wind power and the tax credit that we’ve had to get used to in recent years from other special-interest groups.

The truth is, American wind power has emerged as a mainstream and reliable energy source. Wind power’s growth and its amazingly low cost today is an American success story that competitors of wind would rather go untold.

But to keep that success story going, wind needs a predictable business environment – and that will take a continued pro-growth tax policy.

In the absence of a federal energy policy, the tax code has become America’s de facto energy policy. It has worked well enough to drive the adoption of wind power over 20 percent in Iowa, Kansas, and South Dakota (and over 12 percent in a half-dozen other states).

Over 550 factories in 44 states now serve the industry, making it increasingly “Made in the USA.” With a stable policy, wind power can stay on track to support over 500,000 American jobs by 2030, as envisioned by the Department of Energy.

Wind energy is a good deal for America. No wonder Americans want more of it – by 71 percent, according to a Gallup poll this year.

Curiously, when attacking the PTC, Americans for Prosperity and similar groups always fail to mention that federal incentives encouraging the growth of various forms of energy are nothing new and have existed for decades. Many of the incentives for other electricity sources have existed as permanent features of tax law and represent a lion’s share of government support for energy sources.

Deciding to invest in wind power is even easier these days with better technology and a strong domestic manufacturing base behind it. This summer, Warren Buffet’s MidAmerican Energy Company agreed to invest up to $1.9 billion to expand its wind generation fleet in Iowa. It’s the largest economic development investment in Iowa’s history. And tech-savvy companies like Facebook and Google continue to invest millions in wind to power their server farms.

And just last month, the DOE reported that wind contract prices fell over 40 percent since 2008. These savings are passed on to consumers. A May 2013 Synapse Energy Economics report found doubling the use of wind energy in the Mid-Atlantic and Great Lake states would save consumers close to $7 billion per year.

As CPS Energy CEO Doyle Beneby said in August when his utility signed new contracts for wind and solar power, “renewables have an added value because they are emission-free and serve as a hedge against costly future federal regulations.”

Currently installed wind power avoids nearly 100 million tons of carbon dioxide emissions a year – the equivalent of taking 17 million cars off the road – and saves over 30 billion gallons of fresh water annually.

Bipartisan support for American wind power was a welcome feature of last year’s congressional budget fight. Unless comprehensive tax reform should move in this Congress, wind should not be the only energy source to lose its primary federal incentive, when it is doing the best job of delivering the clean energy America needs.

Salerno is chief economist for the American Wind Energy Association (AWEA).


Consumers don't want ethanol

To understand the public’s deeply-rooted opposition to the government’s renewable fuel standard, consider the multiple web sites that list ethanol-free service stations. Just one of the web sites, Pure-Gas, lists 672 ethanol-free stations in Wisconsin, 394 in Minnesota, 262 in Virginia, 145 in Michigan, and so on.  Altogether, PureGas lists more than 7,300 stations in the U.S. and Canada that sell ethanol-free gasoline or diesel.