Germany’s Plan to Nix Nukes: Macht Nichts!

Posted on July 14, 2011 by Steve Maley

Well, that didn’t take long.

In late May, and in the wake of the Fukushima nuclear crisis, Germany announced that it would phase out nuclear power generation by 2022. Nine active nuclear sites currently supply 22% of German electricity. Another eight are offline.

But there’s a hitch in this well-thought-out plan: it gets cold in northern Europe in the winter, and people need lots of reliable energy to stay warm. Since offshore wind energy’s not working out so hot, the Germans may have to start up one of those mothballed nukes to make it through the winter.

…Germany’s Federal Network Agency insisted on Tuesday that, should a nuclear plant have to be switched back on for this winter and next, it is only a “temporary solution.” After that, a spokesperson added, there should be enough coal-fired plants to fill the gap.

[“Temporary solution”?! Not. Going. There.] Continue reading →

Posted in Environment | Leave a comment

Who’s the Highest Paid State Employee in California?

Posted on July 14, 2011 by Steve Maley

That would be Dr. Jerry Rohlfing, a prison doctor who “has a history of mental illness” and whose treatment has been judged “substandard”. He’s currently working in the medical records office at the High Desert State Prison in Susanville, because supervisors don’t trust him to see patients.

In 2010, the good Dr. Rohlfing received payments from the state totaling over $777,000, which includes his base pay of $236,000 plus two years’ back pay resulting from a successful appeal of his termination.

If this is how they run public health care on the Left Coast, what’s not to like about Obamacare? Continue reading →

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Lee Fang on Oil Speculation and the SPR

Posted on July 6, 2011 by Steve Maley

Summertime 2011, and “investigative journalist” Lee Fang of ThinkProgress has replaced the BP Spill in my blogging life. Fang’s amateurish attempts to find scandal in oil commodities trading have become my new blog fodder.

Fang puts forward the half-baked theory that the evil Koch Brothers and other traders control world oil prices via speculation. His latest piece, “JP Morgan, Koch, Other Oil Traders May Buy Discounted Strategic Petroleum Reserve Oil And Simply Store It” continues the tradition of sloppy documentation and an almost total lack of understanding of business and commodities trading.

Today’s offering is especially sweet, because a key source Fang cites in support of his thesis – that financial speculation drives the market price of oil much higher than it would otherwise be  – strongly disagrees with him on that point.

Does he assume that his readers are too lazy to read and too stupid to understand his sources? Or is Lee Fang just in over his head?

Continue reading →

Posted in Economy, Energy | Tagged , , , , , , , , | 1 Comment

It’s Not Easy Going Green

Posted on July 4, 2011 by Steve Maley

It sounded like such a good idea.

Back in 2009, NRG Energy Inc. hatched a plan to “go green” using switchgrass and sorghum as boiler fuel supplement. It was hoped that it might replace up to 10% of the coal used at its Big Cajun II power plant in New Roads, LA.

All the elements were in place: land near the plant (up to 30,000 acres of fertile Mississippi River floodplain — you can’t afford to transport biomass very far), plus the help of California-based Ceres Inc., a recently-IPO’d specialist in switchgrasses.

The project was to start up this year.

The effort failed when the crops yielded only a fraction of the expected biomass, a company spokesman said.

“We planted a warm-weather variant of switchgrass, a cold-weather variant of switchgrass and the sorghum. The result was we did not get a usable crop,” NRG spokesman David Knox said.

But switchgrass has been widely touted as an important part of our green future, both as a boiler fuel and as a feedstock for ethanol. Where could this plan go wrong? Continue reading →

Posted in Energy, Environment | Tagged , , , , | 4 Comments

Strategic Petroleum Reserve to be Renamed “The Hope and Change Re-Election PAC”

Posted on June 29, 2011 by Steve Maley

You heard it here first.

The International Energy Agency, a body whose membership parallels the G-20 and which is dominated by members of the EU, announced that it may consider releasing more oil from “its stockpile” (1.6 billion barrels, nearly half of that in the U.S. Strategic Petroleum Reserve) at the end of the current 30-day, 2 million barrels per day period.

Repeat of IEA oil release not ruled out

The IEA chose on June 23 to use the stockpiles held by its member states for only the third time in the agency’s 37-year history. Mr Tanaka said this decision was necessary because of the loss of Libyan production, which he said had deprived the market of a net 1.4m b/d, and the imminent return to service of many of the world’s refineries after a period of routine maintenance.

[Head of the IEA] Mr Tanaka acknowledged that Saudi Arabia was increasing its own oil output because of these factors. But he said this would take several weeks and the IEA’s move was designed to fill the gap. Mr Tanaka noted that 1.6bn barrels were held in reserve by the organisation’s members. “If we don’t use it now, then when?” he asked. [Emphasis added. Link may require registration.]

Well, the obvious answer is “You use it when you have an emergency.” But there’s no emergency. Crude oil prices have been falling in the wake of Our Libyan Adventure. Refineries reopening after routine maintenance? Not an emergency.

If the current situation constitutes an emergency, it sets the stage for the “continuing crisis” I described in my Sunday post, linked above: Continue reading →

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The New York Times Says Shale Gas is a Giant Ponzi Scheme. Erm, No.

Posted on June 28, 2011 by Steve Maley

The New York Times really hates natural gas. Just in the last year, the Times has run scaremongering articles on the dangers of hydrofracking and Gasland-inspired tales of groundwater contamination in the “shale plays”, the unconventional sources of natural gas that have redefined domestic gas supply withing the last decade. On Sunday, the paper drifted into unfamiliar and inhospitable territory: petroleum economics.

The Times published a pile of Assange-style emails from unnamed “industry insiders”, most expressing skepticism about the economic viability of natural gas from shale.

Natural gas companies have been placing enormous bets on the wells they are drilling, saying they will deliver big profits and provide a vast new source of energy for the United States.

But the gas may not be as easy and cheap to extract from shale formations deep underground as the companies are saying, according to hundreds of industry e-mails and internal documents and an analysis of data from thousands of wells.

The articles features quotes which characterize the shale plays as “inherently unprofitable” and “giant Ponzi schemes”. (My personal favorite email, however, belongs in the “scare quote” Hall of Fame — see p.5.)

This, from The New York Times Company (NYT), which has managed to turn each $1,000 of investor value into $160 over the last 10 years. Ahhh, sweet irony.

One can imagine that the effort to pooh-pooh gas is intended to boost “green” alternatives like ethanol and wind energy. But both rely on gas (for processing and fertilizing corn ethanol, and as a conventional backup for unreliable wind) and on constant infusions of tax credits. Those, my friends, are “inherently unprofitable” technologies.

Continue reading →

Posted in Energy | Tagged , , , , , , , | 5 Comments

Why Did Obama Open the Strategic Petroleum Reserve?

Posted on June 26, 2011 by Steve Maley

On Thursday, the Department of Energy announced a release of thirty million barrels of crude oil from the Strategic Petroleum Reserve, the nation’s stockpile supposedly set aside for emergency supply disruptions.

Washington, DC – U.S. Energy Secretary Steven Chu announced today that the U.S. and its partners in the International Energy Agency have decided to release a total of 60 million barrels of oil onto the world market over the next 30 days to offset the disruption in the oil supply caused by unrest in the Middle East. As part of this effort, the U.S. will release 30 million barrels of oil from the Strategic Petroleum Reserve (SPR). The SPR is currently at a historically high level with 727 million barrels.

Upon hearing the news, my first question was “What’s the emergency?” Crude oil prices have been falling recently. The market abruptly fell 5%, which will affect gasoline prices in the short term, but the futures market is less convinced that the impact is permanent. (We noted last week, before the release, that the futures premium 6-12 months out was $2 to $3; now it is $4 to $5, all the better for the Koch Brothers.)

I concluded that the President’s goal is a bump in the polls, but that the effect would be short-lived. Most in the media concluded the same.

But then I reread the DOE press release: “… the U.S. and its partners in the International Energy Agency have decided … .” Ach so. Our International President strikes again. Ceding control of a uniquely American asset to an international body is troubling, but par for the course in the Obama Administration.

Then I read the press release one more time.

The Administration will continue to consult closely with other consuming and producing countries in the period ahead.

Reserves in the SPR are sufficient to allow Mr. Obama to play this game from now until the November 2012 election.

Uh-oh. Now I’m really paranoid.

Continue reading →

Posted in Economy, Energy | Tagged , , , , , , | 3 Comments

The New York Times’ Crackpot Tax Analysis

Posted on June 22, 2011 by Steve Maley

The latest dispatch in the New York Times‘ ongoing editorial series “Those Mean and Ignorant Republicans” comes from Bruce Bartlett, who served in the Reagan and Bush I administrations and on the staffs of Jack Kemp and Ron Paul. Bartlett is the kind of faux-GOPer that the Times likes to trot out to skewer Republicans. In this piece, he seems to go out of his way to misstate and intentionally distort the conservative low-tax position.

Bartlett supports his case with facts and figures (see Exhibit A below).  It’s hardly a compelling argument because the income groups Bartlett considers do not include “The Rich”, the current battleground for tax policy. Indeed, Bartlett’s table actually makes a pretty good case against the Leftist insanity of Progressive Taxation.

Tax Policy Center data showing average and marginal tax rate data for families of four. Taxes include income tax and the employee portion of the payroll tax. Tax rates are shown as percentages for families at 50%, 100% and 200% of median household income. Emphasis added.

Continue reading →

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ThinkProgress and Lee Fang vs the Evil Koch Brothers

Posted on June 19, 2011 by Steve Maley

While I claim no expertise, I do have a general understanding of how the oil market works, which is more than can be said for ThinkProgress “investigative journalist” Lee Fang. A series of articles (notably here and here) has convinced the Progressive community that Fang has blown the lid off a Koch Brothers conspiracy to control oil markets via speculation.

For Mr. Fang, the Koch Brothers’ “Contango Strategy” is the smoking gun. A contango market allows the owner of oil storage to score low-risk profits of several dollars per barrel. The Kochs capitalized on such a situation back in late 2008/early 2009. But Fang repeatedly fails to explain how commodities futures trading drives the market price of the commodity.

To better understand how the market works, let’s take a closer look at this strange term, contango. Continue reading →

Posted in Economy, Energy | Tagged , , , , , , , | 4 Comments

Republican Leadership Conference, Day 1

Posted on June 17, 2011 by Steve Maley

The speakers for Day 1 of the Republican Leadership Conference in New Orleans included luminaries such as Mike Huckabee, Michael Williams, and Ted Cruz, along with our own Erick Erickson. I’ll confine my remarks to the presidential candidates.

Newt Gingrich

Newt has a vision and a plan that appeal to this fiscal conservative. President Gingrich would hit the ground running in his first week with a series of executive orders designed to roll back the Leftist domination of the last 80 years. In particular, he proposes to eliminate all of the “czars” and to fight the tyranny of the judicial branch by eliminating federal judgeships.

Newt understands that the only way out of our country’s fiscal abyss is to unleash the incredible potential of the American economy. His plan:

  • No tax increases
  • Set the tax rate on capital gains to zero
  • 12.5% corporate tax rate
  • 100% expensing for new capital equipment
  • Permanently abolish the death tax

Newt would also move to repeal Sarbanes-Oxley and Dodd-Frank, two measures which unnecessarily hobble our economy. He’d replace the EPA with the Environmental Solutions Agency, dedicated to finding workable solutions rather than erecting roadblocks.

It would work. But it’s what Newt didn’t say that troubles me, and would keep me from enthusiastically supporting him as a candidate.

Continue reading →

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