Jason Barton

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Archive for the ‘Government Intervention’ tag

Republican Support for Market-Based Clean Energy Investments

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This is a great example of how government can cause minimal distortions while relying on market-based mechanisms to transition to a cleaner energy future.
Rep. Nunes’ bill would take oil companies’ revenues and award them to domestic firms producing the most cost-effective clean energy.

Unlike the current system with corn ethanol, in which inefficient and unclean technology has won out because of government lobbying, Nunes’ proposal basically lets the market decide which technologies should benefit from pubic investments.

Does New Republican Bill Signal Bipartisan Support for Clean Energy Investment?

Aug. 20 2010 – 2:35 pm 
Posted by Jesse Jenkins
A windfarm is seen 30 December 2006 near Palm ...

New legislation introduced by Republican Representative Devin Nunes (CA) and backed by several GOP House members would invest billions into renewable energy deployment, signaling an opportunity for bipartisan support for clean energy technology policies.

Over at CNBC, reporter Trevor Curwin has been one of the first to note the significance of the Republican bill, which Nunes’ says could “potentially provide hundreds of billions in financing” for renewable energy over the next several decades.

Rep. Devin Nunes’ (R-Calif.) who introduced the bill, in late July, wants to use a reverse auction process to allocate future federal oil royalties to the best renewable energy projects and technologies, with the lowest-price-per-megawatt, (MW), bid winning funding.

“It’s clear and transparent; the people with the best technology will get the help,” Nunes says of the bill, dubbed “A Roadmap for America’s Energy Future,”

Depending on how much territory is eventually opened up to drilling, research firms estimate the royalties could be worth $10 billion to $50 billion a year.

As Curwin notes, Nunes’ plan would rely solely on new revenues from oil and gas leasing to fund the renewable energy investments, including the always contentious proposals to open up areas of the Arctic National Wildlife Refuge as well as the development of oil shale resources and expanded offshore drilling. While more offshore drilling enjoyed bipartisan support just months ago, in the wake of the BP Deepwater Horizon disaster in the Gulf, the prospects for new offshore oil and gas production are uncertain.

Other alternatives include a very modest fee on carbon pollution ($5 per ton would raise roughly $30 billion annually and increase gas prices by less than a nickel per gallon) a wires fee on electricity sales ($10 billion could be raised annually without costing the average household more than $5 per month on their utility bills), the sunsetting of well-worn subsidies for mature energy sources (including oil, coal, corn ethanol and probably even wind power), or some combination of the above.


A $5 per barrel fee on all oil consumed in the United States, for example, would raise roughly $40 billion annually for critical national investments in clean energy technologies and industries, and would increase gasoline prices by just 12-15 cents per gallon. That’s in the regular ‘noise’ of gas price fluctuations, which have risen or fallen by 15 cents or more on 14 different occasions in the last two years, according to data from the U.S. Energy Information Administration.

Read the entire article here.

Growth Energy: Brazil Ethanol Import Tariff Cut No Reason to Reduce U.S. Tariff

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If Growth Energy CEO Tom Buis is advocating corn ethanol as a means to energy independence, I simply cannot agree. Corn production under the status quo is far to dependent on fossil fuels for fertilizer production and at many other points along the production chain to wean us off our dependence on imported energy resources.

This is not to say that we should open our economy to Brazilian ethanol. My jury is still out on that question, and I always lean towards local energy independence, but corn ethanol, currently projected to reach 15 billion gallons in 2015, and to remain there at least for the seven years following, is economically and energetically inefficient, and is a poor use of land.

Mr. Buis is correct to point out that the ethanol industry in Brazil has enjoyed significant government support since its inception in the 1970’s, though that support is all but gone today. The Brazilian government supported an industry with the vision of moving that industry to the free market.

The U.S. corn industry, on the other hand, has not only enjoyed more government subsidies and over a longer period of time, but does not show any signs of moving towards the free market.

Finally, having worked with engineers and many others who are developing cellulosic and other bioenergy technologies, I believe that these show great promise as renewable fuels that do move us towards energy independence while also being environmentally friendly and promoting rural economic development. I have yet to hear, however, a valid argument regarding why there is a need for the continued expansion of corn ethanol production as a bridge to this next generation of bioenergy technologies.

Date Posted: April 6, 2010

Washington, DC—Growth Energy, the coalition of U.S. ethanol supporters, issued April 6 a statement in response to the Brazilian Government’s announcement that it will remove its tariff on imported ethanol.

“We would not support reducing the U.S. import tariff, despite whatever Brazil is temporarily doing, because Brazilian ethanol already enjoys generous subsidies from the Brazilian government and to provide them access to additional subsidies from the U.S. government makes no sense,” said Growth Energy CEO Tom Buis.

Read the entire article here.

Cash For Appliances Program Seeks To Conserve Energy And Help Retail Sales

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By Steven Craig

A new Cash for Appliances program is starting in some states and has already wrapped up in others.  On money.cnn.com it’s reported this new program is set in place to boost retail sales by giving consumers a rebate on energy efficient appliances.  The program’s specifics and rebate prices vary from state to state, but there are reported rebates ranging from $75 to over $500, depending on items purchased.

Read the entire article here.

Written by Jason

February 18th, 2010 at 7:32 am

U.S. Government Plans to Reduce Its Energy Use

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Published: January 29, 2010

WASHINGTON — The federal government will take steps to cut its energy use and reduce its heat-trapping emissions by 28 percent by 2020, compared with 2008 levels, the White House announced on Friday.

The government is the largest user of electricity and fuel in the country, accounting for roughly 1.5 percent of the nation’s annual energy consumption and emissions of the gases that contribute to global warming. The White House said the emissions reduction goal, if met, would save $8 billion to $11 billion in energy costs over the next decade.

Read the entire article here.

Big government: Stop!

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Are the measures discussed in these articles just more cases of big government expansion, or are they wise efforts to create a more efficient economy? There’s a theme in today’s posts, looking at the expansion of government, particularly in the energy sector, asking whether or not it is prudent intervention. Clearly the U.S. government has been expanding since well before the current administration, though the past year has seen a new level of growth in government spending. I’ll sit the fence and look forward to your comments and emails.

We’ve heard Dems’ claims that the 16% of our GPD spent on health care is terribly inefficient, so substantial policy is warranted to streamline this important aspect of our economy, especially with the baby boomers reaching retirement.

Many are making similar arguments about energy. For example, approximately two-thirds of electrical energy is lost before it ever reaches homes and businesses. Government expenditures to decrease that waste, it is argued, are prudent investments that will save money in the long run. Conservatives counter that this is a problem best solved by one of our most efficient and effective tools: The free market. The enormous regulation and government involvement strangling utilities preclude a shrewd solution.

I see the validity in each argument, tending at my ideological roots towards the libertarian urge to get government out of as much as possible, but also understanding that a more long-term vision may be needed to encourage necessary change. Highways, telephones, and even the internet are examples of highly convenient aspects of our economy that would not exist were it not for considerable help from the state. Still, each of those sectors grew from substantial demand that made market distortions functional and largely disposable in the end. The auto industry, and to a lesser extent aviation, are examples that one might say have been less successful at making the move from fledglings to the free market.

Clearly there is not a monolithic answer: Government all good or all bad. There are times, such as education and health care, when there is a need for support from the state. Though even then there is a spectrum of ways the government can be involved, ranging from total control to very light intervention that mimics the market. And different approaches are warranted for different sectors. Okay, that’s enough back and forth.

Let me know what you think.

The size and power of the state is growing, and discontent is on the rise

Jan 21st 2010
From The Economist print edition

IN THE aftermath of the Senate election in Massachusetts, the focus of attention is inevitably on what it means for Barack Obama. The impact on the Democratic president of the loss of the late Ted Kennedy’s seat to the Republicans will, no doubt, be significant (see article). Yet the result could be remembered as a message more profound than the disparate mutterings of a grumpy electorate that has lost faith in its leader—as a growl of hostility to the rising power of the state.


There are good reasons, as well as bad ones, why the state is growing; but the trend must be reversed.

Read the entire article here.

Written by Jason

January 26th, 2010 at 9:14 am