Trouble in the Land of Enchantment

Throughout the 2020 presidential campaign, candidate Joe Biden was rarely left on his own to articulate his economic plan for recovering the pandemic-wounded economy. He and his surrogates so routinely punted on details of his vision for recovery that one might have mistaken them for the 2020 offensive line of the Dallas Cowboys…or worse, the Chargers. Those who voted for him presumed that any Biden plan would include job creation since jobs are foundational to any economic recovery... but even more so after a summer of BLM building-burning and pandemic-driven lock downs.

Oil and gas industry workers were particularly fretful about how a Biden administration would "Build Back Better" when Democrat hostility has underpinned every reference to their industry. They knew well that their industry would bear the brunt of whatever plan the administration eventually conjured up. After all, Biden had promised to end fracking during the second debate…a moment of inadvertent candor that created a momentary panic within his campaign.

By popular demand!

Within days of taking office, it was not job creation that illuminated his path to recovery. Instead, he presented a plan for cutting jobs…. lots of them. President Biden signed an executive order canceling construction of the XL Pipeline. Almost immediately 11,000 direct jobs are on the chopping block for elimination, with an estimated 60,000 additional indirect jobs that will potentially be eliminated. These are well-paying, blue collar jobs. The kind of jobs that represent real economic impact.

Then, days later, it happened again. The Biden administration announced another executive order that will cause further economic destruction. The order directs the Department of the Interior to suspend new oil and natural gas leasing on public lands and offshore waters, concurrent with a comprehensive review of the federal oil and gas program. According to the press release, the order "will help restore balance on public lands and waters, create jobs, and provide a path to align the management of America’s public lands and waters with our nation’s climate, conservation, and clean energy goals.”

Together these orders portend negative economic implications, reverse positive environmental trends and weaken national security by negatively affecting energy security of the U.S., an achievement of the Trump administration that unquestionably changed the geo-political landscape.

At the state level, the implications are grave. Wells on federal and trust lands account for about 20 percent of the nation’s oil production, and less of its gas output. However, the companies that own these leases pay taxes, based on production. These fees help fund millions of dollars of the budgets of a number of western states and Indian tribes including Wyoming, Utah and New Mexico where the federal lands are located. Of those states perhaps New Mexico and the Ute Indian tribe will be most negatively impacted by the second of these two Executive Orders.

New Mexico hardest hit?

According to the New Mexico Oil and Gas Association and the American Petroleum Institute’s (API) new analysis, there will be profound negative consequences for New Mexico if a ban on federal leasing and public lands takes effect. New Mexico, which accounts for 57 percent of federal onshore oil production and 31 percent of onshore natural gas production, is projected to lose more than 62,000 jobs by 2022 and more thereafter, This represents more than five percent of all the jobs in the state by 2030. With nearly 40 percent of the state’s budget funded by natural gas and oil production, a ban puts at risk more than $1 billion of federal revenue sharing which helps support New Mexico’s entire budget. New Mexico voters chose candidate Biden to be President Biden. If the oil and gas industry were a nose, the voters of New Mexico just cut it off to spite its own face.

Because of the Biden administration’s attack on U.S. energy production, the implications are also environmentally detrimental. Currently, the U.S. is a net exporter of energy. This was achieved by oil and gas extraction from shale. Natural gas has proven the driver of unprecedented lower emission levels. In fact, the levels have been so low, the Americans led emissions reductions when compared to the bloviating bunch of dooms day Paris Climate Accord signatories.

By removing the ability for the U.S. to produce domestic energy, two things occur. First, the use of coal, which had been on the decline in the U.S. will not end up being retired, as is the current plan. Next, coal generation, according to the API’s analysis, will initially increase by 6 percent under a permit ban, and will continue to increase by 15 percent in 2030. As a result, CO2 emissions will increase by an average of 58 MMT and will continue rising, ultimately representing a 5.5 percent increase by 2030.

Finally, there are the national economic impacts of the proposed permit ban. Immediately following implementation of the federal leasing restrictions, U.S. economic growth will slow. Lower U.S. energy production and higher energy prices will reduce GDP by a cumulative $0.7 trillion according to the API analysis.

It is clear that the Biden administration does not value U.S. economic superiority, nor the impact a strong economy has on our citizens. Instead, the administration seeks to weaken the country by undermining the most foundational element to innovation and economic vitality -- inexpensive and abundant energy, delivered by those working in the oil and gas industry.

Whether it's due to the political and financial debts President Biden and his family and many in the administration have to China, the influence of contributors and environmental extremists, or even more sinister motivations, doesn't matter. As an industry, we must defend our country against the madness of unmaking America. We must engage in the arena of ideas, engage in our state legislators to push back against these attacks and ensure it we drive our own narrative. There is not “someone else” who will do it for us. We must do it on behalf of this great country… to save our industry and save our county.

Toyota Chief on Electric Cars: Slow Down!

The Observer reports on some very striking comments by Toyota Motor Corporation president Akio Toyoda, on the topic of Electric Vehicles. EVs are hot right now, with the automotive industry investing heavily in them, and governments throughout the world (prominently, as The Observer mentions, those of Great Britain and California) looking to aid their development by banning the sale of gasoline and diesel engines in the not-too-distant future.

But Mr. Toyoda is not convinced that they are the answer. At a recent press conference, he pointed out a few problems with the projected shift to EVs. First, he claimed that “the current business model of the car industry is going to collapse" if the industry shifts to EVs too quickly. No word on whether he thinks that the oft-discussed 10-15 year timeline put forward by activists in and out of government falls into that category, but it wouldn't be surprising if that is exactly what he had in mind.

Next, he pointed out that "Japan [for one] would run out of electricity in the summer if all cars were running on electric power." There just isn't enough electricity to go around, especially with battery technology being what it is. He estimated that "the infrastructure needed to support a 100 percent EV fleet would cost Japan between 14 trillion and 37 trillion yen ($135 billion to $358 billion)," a hefty percentage of GDP for a famously stagnant economy like Japan's.

Worth noting that it is a lot cheaper to generate the electricity a given vehicle needs on site -- that is, within the vehicle itself, as a gasoline powered combustion engine does -- than producing it elsewhere and transporting to the car.

And, following up on that point, he called attention to the fact that "most of the country’s electricity is generated by burning coal and natural gas, anyway," so the stated goal of leaving fossil fuels behind by shifting to EVs isn't going to happen. In his words:

The more EVs we build, the worse carbon dioxide gets… When politicians are out there saying, ‘Let’s get rid of all cars using gasoline,’ do they understand this?

Unfortunately the answer to that question is probably "No," both for the politicians and the propagandists in the media.

Pacific Gas? and Electric

Earlier this month, just as the hand of winter tightened her grip across some of the most prolific oil and gas regions in America, city officials in San Francisco demonstrated the disregard they have for the free market and unmasked the contempt they have for hard-working Californians. Fortunately, the oil and gas industry has the opportunity to stand in the gap and protect the future of free markets through continued delivery of low cost, abundant energy.

In what is yet another chapter in the effort by local and state leaders to create government dependence through the methodical dismantling of the free market, the city’s Board of Supervisors voted unanimously to ban the use of natural gas in new commercial and residential construction in San Francisco. That means natural gas stoves, furnaces, water heaters and appliances will no longer be permitted. Rather, builders will be required to install electric (or solar) powered appliances and heating equipment, fueled by more costly electricity or insufficient solar power.

This is curious since California is a net importer of power, meaning the state does not have enough local power generation capabilities to meet the power demand. Hence the decades of rolling brownouts across the state that plague California’s summers. According to government data, natural gas and solar are the two most prevalent sources of electricity generation in California; however, solar generation is non-dispatchable.

Grid operators have been using natural gas and, to a lesser extent, electricity imports from neighboring areas to contend with changes in demand. San Francisco city government, therefore, just made using natural gas illegal, while mandating the use of already scarce electricity which is generated from natural gas and hydro-electric (dams) sources located outside of California. It feels like some kind of drunken game of Twister doesn’t it?

It's all fun and games until the power goes out.

City officials cited cost savings, public health benefits and a fervor to reduce greenhouse gas emissions for the move. None of the officials were able to explain how electricity, more expensive and more scarce than natural gas, would produce cost savings.

In fact, depending upon the market, it costs about 30 percent more to operate electric appliances compared to natural gas appliances. Nor could the officials articulate the "standard" by which public health benefits were being measured by this mandate. San Francisco is after all, the city where human feces and hepatitis C-infected drug addicts are strewn about the streets in equal measure, with nary a city health official in sight. If ‘public health benefit’ in San Francisco were a ship, it would be called the Titanic.

In its vote, San Francisco joined nearly forty other California cities which have also banned natural gas in new commercial and residential construction. These actions stand alongside similar efforts around the country. In Washington state, for example, the state, in defiance of the Transportation Department’s Pipeline and Hazardous Materials Safety Administration, sought to ban oil trains transporting oil and gas from North Dakota’s Bakken fields to ports and refineries located along the western shores of the state.

Or the efforts by the Center for Biological Diversity to dismantle four hydro-electric dams on the Snake River in Washington state. Or the effort of Michigan governor Whitmer’s to permanently close Line 5 of the Enbridge pipeline that moves oil to refineries in the region.

Even the most casual observer would deduce that it must be green zealotry that in fact underpins these dreadfully anti-market efforts. During all of this, however, it is notable, that the rates of greenhouse gas emissions are below what would have been required by the infamous Paris Climate Accord. And the U.S. hasn’t even been aligned with the carbon gas-emitting signatory countries for at least four years. These lower emissions rates have been the direct result of the move from coal to natural gas.

The objective becomes increasingly clear then. While asserting concern for climate change, green zealots actually are more interested in control…. control of just about everything. They seek to increase the cost of producing and using these otherwise inexpensive fuels through rules and mandates. Government is artificially manipulating the market in an effort to force consumers and industry into accepting a more expensive, but less desirable quality of life.

Control freaks unite!

And if the market won’t accept this objective? That depends entirely upon the importance the oil and gas industry places on its own future. The industry must be willing to chart its own course and communicate its own narrative if it wants to stop this sinister effort.

Laws and rules like these represent actual threats to the very foundations of the industry and to a free society. Local and state governments across the country seek to wrestle our free-market decisions from us and mandate the quality of life we will be permitted to enjoy. If the industry fails to respond, the next reasonable steps will include outright bans according in accordance with this Orwellian worldview.

These 1984-esque realities will not impede leaders and their cohorts. They will continue to live as they desire. The rules and bans aren’t for them after all. Think Michigan's Whitmer whose husband went boating during its state lockdown, or California governor Newsom’s French Laundry group birthday party during his state’s lockdown. They and their cohorts will assuredly keep using their gas appliances they’ve prohibited others to use in the coming years, while also feeling superior. After all, they recycle, drive Teslas, provide their own canvas bags when shopping at Whole Foods and wear Lululemon leggings while they work out their status anxiety on their Peloton bikes.

As an industry, oil and gas needs to commit to pushing back on these attacks. Inexpensive energy is imperative for a thriving economy, manufacturing excellence, economic mobility, job creation and a future of prosperity. The industry needs to take back control from the preaching class and remind them that their lifestyles have been brought to them by the men and woman of the oil and gas industry. 

What's that Carbon Tax Gonna Cost?

Last week the Trudeau Government announced their brand new anti-climate change initiative, which included a significant hike in the carbon tax. As we discussed at the time, the plan is to increase the current tax of $30 per ton by $15 per year until settling (for now) at $170 per ton.

This is a big increase, but to most people those numbers seem entirely theoretical. A ton of carbon emitted sounds like a lot, and the average Canadian probably sees those numbers and figures that, since his car and furnace together don't emit that much, this doesn't affect him. Of course, this is exactly how Trudeau wants people to approach the issue.

But to set the record straight, Kris Sims of the Canadian Taxpayers Federation has helpfully scaled those numbers down to the individual level. Here's what she came up with:

Right now, the federal carbon tax is at $30 per tonne, resulting in a tax of 6.6 cents per litre for gasoline and 8 cents per litre for diesel.... At those rates, filling up a minivan costs nearly $5 extra in the carbon tax, filling a light duty pickup truck costs $8 more and a super duty diesel pickup costs $14 more.... So, now that the feds are going to increase the carbon tax to $170 per tonne, what happens to these everyday costs?

This hike will put the carbon tax up to more than 37.5 cents per litre for gasoline, 45 cents per litre for diesel and 32.8 cents per cubic metre for natural gas. That means that very soon it will cost you $27 extra to fill up a minivan, $45 extra for a light duty pickup truck and $204 extra to fill just one diesel fuel cylinder on those big rig trucks that deliver everything from furniture to food across the country. Remember: this is just for the carbon tax. This doesn’t include the cost of the fuel, other taxes, the GST or the incoming second carbon tax that Trudeau’s government is creating. How many people have an easy extra $45 to fill up their trucks to go to work?

What, me worry?

And that's just for your vehicle. What about keeping your house warm? Sims lays that out as well:

When it comes to heating a home with natural gas, the carbon tax often costs more than the actual fuel being used. Homeowners in British Columbia sent the Canadian Taxpayers Federation their natural gas bills to show the costs. One of the bills showed an average-sized home in Gibsons using 466 cubic metres for one winter month last year, resulting in a carbon tax bill of $35. The homeowners had only used $27 worth of natural gas....

With a carbon tax of 32.8 cents per cubic metre of natural gas, it would cost that homeowner in Gibsons $150 extra in the carbon tax for just one winter month’s worth of natural gas. Based on the average annual use of natural gas in new Canadian homes, it would cost homeowners more than $885 extra in the carbon tax.

Canada is, of course, one of the most northerly nations in the world, but Gibsons, B. C., the town she uses as an example, is hardly one of the coldest areas in the country. In places like Moose Jaw, Saskatchewan; Winnipeg, Manitoba; and Arnprior, Ontario, those numbers are going to look at lot worse.

Biden's Dangerous 'Green' Assault on Oil

In an exchange with President Trump during their final debate last week, Joe Biden avidly supported both fracking, which is a major industry in Pennsylvania -- a critical swing state that he needs to win next Tuesday -- and the continued use of fossil fuels. In a normal year, which this manifestly is not, that would not be exceptional.  

The problem is, Biden has been pushed to the left all year, and is now supporting the Green New Deal of his party's radicals. When Trump called him out on this policy shift, Biden denied any change, and challenged Trump to prove that he was lying. Which Trump promptly did:

Biden further undercut himself on stage by stating that under his administration, the U.S. would be seeing an eventual end to the use of fossil fuels. That is why Biden and his staff are now trying to blur, err, clarify, his comment that he would have the country "transition from the oil industry by 2025,” (!!!) when asked by President Donald Trump if he would close down the oil industry.

"It has to be replaced by renewable energy over time, over time. And I'd stop giving to the oil industry. I’d stop giving them federal subsidies," Biden said.

"Basically what he is saying is he is going to destroy the oil industry," Trump retorted. "Will you remember that Texas? Pennsylvania? Oklahoma? Ohio?"

Vice presidential candidate Kamala Harris, who has the most radical policy record in the U.S. Senate, and has been  adamant about ending fracking and fossil fuel production, was among the first primary candidates to be booted by Democrat voters and uninterested donors. And this in a year when a majority of Democrat voters expect her to replace her ailing and mentally diminished boss during the course of his term. 

So is Biden a hypocrite? Is he a liar? Sure. But that is the least of the problems with his willingness to destroy a key national industry in service of the shibboleth of “climate change,” and the full control of the economy that would ensue under the Green New Deal. There are upwards of 300,000 jobs at stake in Pennsylvania, right this minute, which will be destroyed by ending the fossil fuel industries. More hundreds of thousands are at stake as well in Texas and Oklahoma.

Thanks to the Trump Administration's energy policies, the United States is energy independent for the first time in more than half a century. Domestic production is the reason the average price of gas at the pump is hovering down around $2.20 nationally – a huge decrease from average prices during the Obama years.

Energy independence is also a huge national security boon. Some of the biggest foreign policy successes of the Trump administration are arguably a direct result of no longer needing Arab oil. Indeed, the end of the Saudi – and entire Persian Gulf region – oil economy, due to vastly lower demand, has been a prime factor in new Saudi openness to relations with Israel.

Giving up our energy independence at this time to transition to so-called renewable energy sources would be a costly unforced error.

Why Pennsylvania Is in Play

Pennsylvania might be the most hotly contested state in this presidential election, and with good reason. Our fifth most populous state, Pennsylvania is home to two big cities -- Philadelphia and Pittsburgh -- that are flush with the affluent and the underclasses who serve them -- both key Democratic constituencies -- while the rest of the state is dominated by rural, working class voters, who are much more conservatively inclined even when their actual voting patterns are harder to predict.

Republicans have long felt that this second cohort were their natural allies. In the 1980s they were often called Reagan Democrats, and the GOP was convinced that eventually they would come to their senses and become reliable Republicans. But, despite their best efforts, every Democratic candidate from Bill Clinton in 1992 through Barrack Obama in 2012 carried the Keystone State.

That changed in 2016, when rural Pennsylvanians found in Donald Trump a candidate who spoke to their interests and preferences. He won the state by 44,292 votes out of more than 6,000,000 cast, the smallest presidential margin in the state in 176 years.

But this year, the Democrats are determined to win it back. It is very likely that the party establishment decided to go all in on Joe Biden with PA in mind. After all, though he represented Delaware in the Senate for thirty-six years, he never stops reminding voters that he was born in Scranton, and prides himself on his common touch (a questionable characterization).

But beyond that, the Biden camp are offering Pennsylvania's rural voters essentially nothing. Ace reporter Salena Zito, who knows her native state better than anybody, recently spoke to several long-time Democrats in Bethel Park, who all have roughly the same story -- they've been forced to accept that their pro-life, pro-Second Amendment views are no longer welcome in the party. What's more, they've been increasingly disturbed by the Democrat's embrace of rioting and disorder in cities throughout the country, and their tendency to denigrate the police.

And then there's fracking. The natural gas industry, which relies on fracking, employs over 300,000 workers, directly or indirectly, in Pennsylvania. While campaigning for the Democratic nomination, both Bernie Sanders and Elizabeth Warren called for a national fracking ban. Joe Biden's position has generally been harder to decipher, but he seems to have settled on a policy of “no more new fracking." while his running mate, Kamala Harris, continues to support a total ban on the practice.

If there's one thing that the aforementioned working class voters care about, it is jobs. Here's Rose Tennent writing in the Philadelphia Inquirer about what fracking has meant for the state:

We allowed responsible, modern natural gas development to go forward, allowing Pennsylvanians to take advantage of some of the world’s greatest shale gas reserves. The result has been an incredible boon to our state and our country. Fracking and the rest of the shale gas revolution saved Pennsylvania from the worst depths of the Great Recession. When our workers were hurting the most in 2008 and 2009, the shale fields eventually catapulted Pennsylvania back to prosperity by restoring the energy dominance that we enjoyed a century earlier. Today, 106,000 Pennsylvanians have mostly well-paid, desirable jobs in the energy sector. That’s a big part of why our state has a 3.9% unemployment rate — a figure that would have been unimaginable only a few years ago.

Those figures are from before the pandemic and the lockdowns, of course, which together brutalized both the economy overall and the resource industry specifically. But the potential for the industry to rebound and the jobs to come back once the lockdowns are relaxed is real, so long as as they're allowed to. Biden's position, which amounts to "read my lips, No Future Fracking Jobs," seems designed to ensure that that that never happens.

There's some in every crowd.

Beyond the benefits it brings for the state itself, Tennent points out that, largely because of fracking, "America as a whole has become energy independent for the first time since we became dependent on imported oil from the Middle East in the 1960s." Hydraulic fracturing doesn't only create jobs stateside, it also makes it so the price of heating our homes and filling up are gas tanks aren't reliant on the whims of OPEC or political stability in the notoriously volatile area surrounding the Strait of Hormuz.

This is very appealing for working class Americans in Pennsylvania, many of whom were wary of the Bush-era Republican Party's middle eastern adventurism. American energy independence removes one of the major justifications for getting involved in the constant squabbles in that part of the world. Consequently, from the perspective of those Americans who both benefit from well paying blue collar jobs in the natural gas industry and disproportionately serve in the military, fracking goes down as a win/win.

So, while polling out of Pennsylvania for this election cycle has been, in the words of elections analyst Jim Geraghty, "boringly consistent," with Biden ahead in nearly every poll for the past several months, reports of a noticeable shift in people registering as Republicans hasn't been surprising. As Geraghty explained recently in National Review,

In November 2016, Pennsylvania had 4.2 million registered Democrats, 3.3 million registered Republicans, and 1.2 million registered with “other parties” or none. By 2020, Pennsylvania had 4.09 million registered Democrats, 3.29 registered Republicans, and 1.21 million registered with other parties. Then the parties began their post-primary voter-registration drives — and Republicans added a net 135,619 voters between June and the final week of September, while Democrats added 57,985 and other voters increased by 49,995.... Add it all up: Democrats are down 66,778 registered members from November 2016, while the Republicans added 125,381, and “other” is up 61,313.

I recently took a trip to Pennsylvania, and it was impossible to miss two things. First, the never-ending cacophony of paid advertisements that are ostensibly pro-Biden, but in actuality anti-Trump. On TV and the radio, you hear over and over tear-jerking stories about someone who lost his job or a family member because Covid-19 (with no explanation as to how Biden would have handled the pandemic differently), ending with the command "vote him out." But the other notable thing was that, driving around the countryside, there must have been ten Trump signs for every Biden sign.

Now, you may object that is a non-scientific measurement, of course, but coupled with the differences in registration, it increases my suspicion that, like in 2016, the polling out of Pennsylvania isn't telling the whole story. Which is to say, the professional forecasters might once again be in for a rude awakening on election night.

On Fracking, It's Biden vs. Biden

Back in March, when people were still unironically saying "Fifteen days to slow the spread," I wrote about the absolute fury the Biden campaign was directing at Republicans over their claims that the former vice president wanted to ban the modern marvel known as fracking. I suggested that Republicans could be forgiven for making these claims -- as RNC chairwoman Ronna McDaniel tweeted, "There are 7.3M Americans whose jobs depend on fracking. Biden and Bernie would eliminate them" -- because Biden's actual position on fracking seemed fairly hard to decipher:

[W]hen Bernie Sanders said he wanted to stop “fracking as soon as we possibly can,” and that he was “talking about telling the fossil fuel industry that they are going to stop destroying this planet—no ifs, buts and maybes about it” in the debate the other night, Biden replied "So am I!" His position is as clear as the noonday sun! Oh, or, er, maybe not so much...

Well, Sleepy Joe is at it again, having said at a speech earlier this week in Pittsburgh, Pa., "I am not banning fracking. Let me say that again: I am not banning fracking. No matter how many times Donald Trump lies about me."

What a relief that must be to the more than 40,000 men and women who work in the natural gas industry in the state of Pennsylvania (which, it is worth noting, Trump won by just over 40,000 votes)!

Then again, maybe they shouldn't be too reassured, since, as Hank Berrien documents, Biden's own words seem to point in the opposite direction:

On January 24, 2020, speaking to a New Hampshire voter, Biden said he would stop fracking. The woman voter asked, “But like, what about, say, stopping fracking?” Biden answered, “Yes.” Woman voter: “And stopping pipeline infrastructure?” Biden: “Yes.”

On March 15, 2020, a Democratic presidential debate between Biden and Senator Bernie Sanders, [Biden said]: "No more, no new fracking."

Also in that debate, Biden stated, “Number one, no more subsidies for fossil fuel industry. No more drilling on federal lands. No more drilling, including offshore. No ability for the oil industry to continue to drill, period, ends, number one.” ....

At a Democratic presidential debate in late July 2019, CNN’s Dana Bash asked Biden, “Just to clarify, would there be any place for fossil fuels, including coal and fracking, in a Biden administration?” Biden answered, “No. We would — we would work it out. Make sure it’s eliminated and no more subsidies for either one of those. Either — any fossil fuel.”

Which is to say, if the claim that Biden opposes fracking is "fake news" from Team Trump, than Crazy Grandpa Joe is in on the conspiracy.

California Bows to Energy Reality

Last week I described the dilemma facing the California State Water Resources Control Board. It could demand adherence to the schedule for closing coastal gas plants which use sea water by the end of this year. If they did so, they would compound California's energy crisis; if not, the board would have to face the fact that renewable energy was insufficient for the State's needs and acknowledge that it needed these fossil fuel plants to continue operating or the state would face further blackouts.

Today it acknowledged reality, as the Los Angeles Times reports. The board allowed the plants to remain in operation for a few more years until --  they hope -- chimerical renewable energy can pick up the load:

State officials threw a lifeline to four fossil fueled power plants along the Southern California coast, deciding the facilities are still needed to provide reliable electricity even as they contribute to the climate crisis.

Tuesday’s vote by the State Water Resources Control Board to let the gas plants keep operating past the end of this year followed brief rolling blackouts over two evenings last month, as a heat wave caused air conditioning demand to soar, and California found itself short on electricity supplies.

Energy regulators are still investigating the causes of the power shortage. But they said allowing the coastal gas plants to stay open a few more years would help prevent more outages as California continues its transition to cleaner energy sources — an ironic solution given that climate change almost certainly exacerbated the recent heat wave.

Maybe it won't ever get hot again in California. Maybe there never will be smoke and smog blocking sunlight. Maybe storage capacity will be vastly increased. Maybe the gas plants will find an efficient , affordable way to discharge seawater without substantially affecting marine life. Maybe not.

Of course the notion that the warm sea water discharge from the plants seriously harms marine life may also be open to some  debate.I remember environmentalists claiming the caribou would die off if the Alaskan pipeline was built, but it turns out the caribou love it:

Thirty years later we can see the effects of the pipeline on the caribous. Walter Hickel, a former U.S. Secretary of the Interior and governor of Alaska, said the caribou has not only survived, but flourished. In 1977, as the Prudhoe region started delivering oil to America's southern 48 states, the Central Arctic caribou numbered 6,000:it has since grown to 27, 128.

It's hyperbolical predictions like this, that make me chary of the environmentalists claims, which always exaggerate the risks of real energy production while they ignore the risks related to "renewables,"such as the risk to birds from large solar arrays in the dessert and from windmills and the danger now of disposal of solar panels and windmills that are now out of commission or soon will be.

Let me know when they march on the auto companies to highlight the environmental risks in the creation and disposal of electric car batteries.

Beware the Environmentalists' False Flags

You're probably familiar with the phrase "false flag operation." Referring originally to a ship's flying the flag of a different nation than that with which it was aligned in order to deceive the enemy, it has come to refer to any such misrepresentation, particularly those with the intent of casting one's opponents in a negative light.

The thing that makes false flag operations so effective is that it is often impossible to prove, beyond a shadow of a doubt, that one has actually taken place. Absent an admission of guilt, all one can do when investigating the circumstances is to lay out the facts and let the jury decide.

I bring this up because I've recently stumbled upon two stories which have the appearance of false flag operations. The first is by Jazz Shaw, who reports on the attempt to build what's being billed as the next generation of nuclear power plant in Idaho. The plant would serve roughly 720,000 homes in that state and in neighboring Utah. Communities in both states which would benefit from this project have already signed on, but one group of activists have made it their mission to convince all involved that it's a bad deal.

The group is called the Utah Taxpayer Association, and their principal argument is that the project is a waste of taxpayer money and (because the technology is still being developed) is likely to fail and lead to higher electricity prices.

Well, as a conservative, fiscal responsibility arguments always get my attention. But Shaw points out that there is something fishy about the organization making the argument:

As to the “fiscal conservative” group trying to get municipalities to pull out of the project, the Utah Taxpayer Association is being fronted by The Hastings Group. One look at their client list at that link will give you an idea of their general ideological makeup. They include:

Bulletin Of The Atomic Scientists
Green America
National Resources Defense Council
Renewable Nation
Union Of Concerned Scientists

The Utah Taxpayer Association has also enlisted anti-nuclear power advocate Peter Bradford as a spokesperson. The list of their association with green energy and environmentalist groups goes on.

Shaw doesn't mention this, but along those same lines, the website of The Hastings Group is full of boasts about their "18-month push" to pressure the Trump administration to stop off-shore drilling and their "12-year campaign to shift media attitudes about socially responsible/sustainable investing," the latter being code for divesting from fossil fuels.

Judging by these relationships, it seems unlikely that the Utah Taxpayer Association is the confederation of Goldwater Republicans that its name and rhetoric would lead you to surmise. It's rather more likely that some textbook Greenies, aware that their normal pitch would have less purchase in rural mountain states, decided to attack the problem from a different angle, hoping that cost-conscious conservatives would miss the lefty agenda behind the scenes.

And what is that agenda exactly? After all, as Shaw notes, nuclear power is effectively zero carbon, so you'd think that anti-carbon emissions activists would be on board with this project. Their opposition reveals their true colors -- for a lot of them, at least, it isn't the carbon they care about so much as limiting the competition for their so-called renewable energy projects.

The second potential false flag is rather more complicated, and has to do with the Atlantic Coast Pipeline, a planned project which was principally owned by Richmond, Va., based Dominion Energy. It was meant to move natural gas from the Marcellus Shale formation in West Virginia through Virginia and then down to North Carolina. Had the pipeline gone through, it is probable that Dominion would have built a second natural gas liquefaction terminal, likely in the Newport area, to complement the one it already owns in Cove Point, Md., creating lots of well-paying jobs for Virginians and allowing the company to export significantly more natural gas overseas.

"Was" is the operative word here, however, because in July it was announced that Dominion is cutting its losses and pulling out of the $8 billion project, citing "the increasing legal uncertainty that overhangs large-scale energy and industrial infrastructure development in the United States." This is being spoken of principally as a victory for the environmentalist groups which have been trying to kill the project since it was launched, with Michael Brune of the Sierra Club crowing,

Dominion did not decide to cancel the Atlantic Coast Pipeline—the people and frontline organizations that led this fight for years forced [it] into walking away.

However, journalist and Virginia native Arthur Bloom is skeptical. As he put it in a recent podcast appearance, "the death of the Atlantic Coast Pipeline has sort of been heralded by activists as this big win, this is the new Virginia, pushing back on decades of probably-racist Republican rule. Virtually none of that is true."

Bloom has written a detailed piece at The American Conservative in which he attempts to connect the dots to discern what really happened here. The thing is, Dominion is not only pulling out of the Atlantic Pipeline, it is, as the Wall Street Journal reports, "selling the rest of its natural-gas transmission and storage network to Warren Buffett’s Berkshire Hathaway Inc. for $9.7 billion," a deal which includes a 25 percent stake in its Cove Point liquefaction facility. As he investigated the "various interests that were publicly opposed to the construction of the pipeline," Bloom was struck "quite forcefully [by] how many of them were connected to Berkshire Hathaway."

One of those interested parties was Michael Bills, a Virginia billionaire and chairman of the board of environmental lobbying group Clean Virginia, who has waged a war against Dominion for the past several years, even offering to max out donations to any political candidate in the state who pledged not to accept any money from the company. Bloom points out that Bills is the former business partner of Berkshire Hathaway executive Ted Weschler, who is frequently mentioned as a potential replacement for Warren Buffet, as Berkshire's CEO. That doesn't prove anything, but it is a connection, and a high level one at that.

Bloom also details the political opposition to Dominion from the state's ascendant Democrats, a more important part of the story than the legal and regulatory hurdles to the project. (Indeed, the project had recently won big at the Supreme Court). Of course the state Democratic ascent has been funded in large part by Berkshire money too. Bloom notes that "the largest single donor to the Democratic Party of Virginia in 2015 was the son of Buffett partner Charles Munger, Jr, whose money supplied more than half of their funds for statehouse races that year."

And then there's the fact that, in Bloom's words,

Berkshire also owned most of the newspapers in western and central Virginia until March, including the Richmond Times-Dispatch, the Free Lance-Star, the Culpeper Times-Exponent, the Daily Progress in Charlottesville, the News Virginian in Waynesboro, and the Roanoke Times, giving them almost complete control of the pipeline narrative in the parts of the state where it mattered.

Be sure to read the whole piece to get into the real nitty-gritty of the thing, but Bloom makes a compelling case that everything is not as it seems. As he makes clear in the interview cited above, there is something a little too convenient about the fact that Dominion was the focal point of so much environmental activism, which had the effect of depressing the stock price of the company, allowing a massive financial firm -- which had deep ties to the environmental activists -- to swoop in "and [scoop] up their assets on the cheap." Meanwhile the environmentalists are able to claim the scalp of a major pipeline project while ignoring Berkshire Hathaway, this despite the fact that the company's anti-union history makes it likely that the unionized workers in Dominion's natural gas sector might soon be out of a job. Unions are less important to the left these days than wealthy environmentalists.

False flag operations are difficult to prove, but Shaw and Bloom argue persuasively that alliances and the money trail constitute a preponderance of evidence in their respective cases pointing to real deception on the part of the interested parties. Read and judge for yourself.

Will Erdogan Scupper the EastMed Pipeline?

The European Union imports about 70 percent of its natural gas, 37 percent of which comes from Russia, giving Putin considerable sway over it. That looks like it may finally be about to change as Cyprus, Greece and Israel appear to have clinched a deal to build a sub-seawater pipeline, the EastMed Pipeline, from Israel’s enormous offshore fields (Tamar—West of Haifa -- and Leviathan, southwest of the Tamar field) to Cyprus and from there on to Greece and Italy. Two other Israeli gas fields, Tarish and Tanen, are earmarked for domestic consumption.

But the expensive project still has a significant opponent—Turkey’s strongman, Recep Tayyip Erdogan.

It’s been more than 30 years since Golda Meir voiced her complaint: ”Let me tell you something that we Israelis have against Moses. He took us 40 years through the desert in order too bring us to the one spot in the Middle East that has no oil.”

Still, the complaint that Israel lacked fossil fuel was premature, for while Israel may lack oil it has for some years been sitting on enormous deposits of offshore nature gas (trillions of cubic feet of it), so much, in fact, that they cannot use it all. Legal Insurrection has been documenting the finds for seven years and provides a convenient history of them. Israel has been selling some to Jordan and Egypt, but the new fields are so enormous that other markets could also be served, although it will take significant investment and engineering and diplomatic skills to make this a reality.

Working with Noble Energy and the governments of Cyprus and Greece, and fending off domestic environmental opponents, the Israeli government has been able to greenlight the EastMed pipeline project, which is expected to carry 10 billion cubic meters of natural gas per annum with a potential to double that amount.

The countries aim to reach a final investment decision by 2022 and have the 6 billion euro ($6.86 billion) pipeline completed by 2025 to help Europe diversify its energy resources.

A land and sea survey is currently underway to determine the route of the 1,900-km (1,200-mile) pipeline. The European Union and the pipeline’s owner IGI Poseidon, a joint venture between Greek gas firm DEPA and Italian energy group Edison, have each invested 35 million euros in the planning.

At the moment, besides Russia, the major pipelines supplying Europe originate in Algeria, since the once-functioning pipeline from Libya is now cut off. Pipelines are unique in that they require belief in consistent diplomatic relations and a secure supply chain.

Unlike oil, gas neither flows to spot markets nor is sold en route to a consumer. There is no global market price like Brent Sweet Crude for oil. Gas is priced unique to each deal, nation or region. It is not globally traded as a commodity. The infrastructure to transmit gas—either via pipelines or liquefaction—is so complex, demanding, and expensive that marketing agreements and supply patterns are locked in for the long term, indeed years before the molecules even flow. Even liquefied natural gas (LNG) shipped from port to port is essentially a “locked” structure much like train lines.

The countries supplying and receiving the gas, therefore, tether their critical energy policies to the expectation of a particular supply chain, and to a particular diplomatic relationship. Since the severing of a particular source of gas is not easily replaced in an ad hoc fashion by oversupply from elsewhere, it is strategically important for a nation, even when it only represents a relatively small portion of its overall supply. Thus, even modest amounts of Israeli gas exports can carry significant strategic leverage.

Something like 18 percent of Europe’s gas comes through Algeria, and Europe is smart to seek diversification of its supplies from more stable sources.

Will the creation of the EastMed pipeline substantially shift Israeli-European relations? If built, mostly likely the answer is yes. I expect it may well also lessen Vladimir Putin’s grip on Europe, reducing its dominant role in providing critical energy resources. On the other hand, the pipeline has not yet begun construction and it's almost certain to face Turkish opposition. Putin’s not the only leader who must be viewing this deal with concern.

According to the Financial Times, President Recep Tayyip Erdogan claims his country’s maritime rights cross the planned EastMed pipeline route. Like Tony Soprano he wants to “get his beak in,” and seems poised to demand a cut of the revenue.

The region has the potential to become one of the last great fossil fuel plays — with bountiful gas to supply energy-poor countries around the basin, with enough left over to export...

The initial target is to provide the fuel to drive Egypt’s growing economy. Longer-term, some energy executives believe they will be able to pump gas supplies into southern Europe, reducing the region’s reliance on Russia.  But Turkey — excluded due to its fraught relations with many of the other players in the region — could stymie those ambitions. Mr. Erdogan has responded to being left out of his neighbours’43211 co-operation by sending the Turkish navy to intimidate drill ships belonging to international oil companies and dispatching his own exploration vessels.

What began as a dispute between Turkey and Cyprus is fuelling a regional power game, drawing in nations as far away as the Gulf, and causing deep unease in the EU and the US. The latest flashpoint is Libya, where Turkey this year expanded its military presence after sealing an agreement with a UN-backed government in Tripoli that could enable Ankara to drill for oil and gas off the Libyan coast.

Erdogan seems at least as big a challenge to Europe on this issue as he does on immigration, and his strengthened ties to the government of Libya (as Russia has historically maintained) give him added clout. The E.U.’s inability to deter his aggression doesn’t provide much reason for optimism.