"Low carbon fuel standards" mean higher costs, few environmental benefits and less liberty

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Within days, Majority Leader Harry Reid intends to bring sweeping energy and climate legislation to the Senate floor. He won’t call it cap-and-trade or cap-tax-and-trade, and certainly not a carbon tax.

"Those words are not in my vocabulary," he says. "We’re going to work on pollution."

Senator Reid’s twenty-pound bill will be laden with lofty language about "clean energy," energy conservation, "green jobs," reducing "dangerous" power plant emissions, ending our "addiction" to oil, creating a renewable economy, and saving the planet from "imminent climate disaster."

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Environmental euphemisms aside, however, the legislation is really about imposing national "low carbon fuel standards" (LCFS) and forcing dramatic reductions in the use of oil, natural gas and especially coal. It would expand on existing laws, regulations and decrees, like the Environmental Protection Agency’s ruling that carbon dioxide somehow "endangers human health and welfare," EPA’s June 30 invalidation of flexible air quality permits for Texas refineries, Interior Secretary Salazar’s offshore drilling moratorium, multiple state and federal renewable energy standards and mandates, and various state and regional "greenhouse gas initiatives" that restrict emissions from power plants and industrial facilities.

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The EPA, Energy Information Administration, White House and Mr. Reid insist that America can easily limit hydrocarbon use and switch to "eco-friendly" wind, solar and biofuel energy  at low cost and minimal harm to families, businesses and jobs. However, their self-serving, other-planet claims are flatly contradicted by a host of studies by reputable analysts with a solid history of integrity and accuracy.

The most recent is a June 17 report by Charles River Associates, examining the "Economic and Energy Impacts Resulting from a National Low Carbon Fuel Standard." Prepared for the Consumer Energy Alliance, the study looked only at transportation fuels. (Including coal for electricity generation and other uses would dramatically increase its cost estimates.) Nevertheless, the study found that national standards implemented in 2015 would:

Increase average gasoline and diesel prices by up to 80% in five years, and 170% within ten years  sending regular gasoline prices soaring to nearly $5 per gallon by 2020 and $7.50 per gallon by 2025 (assuming other international price pressures remain unchanged);

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Reduce employment and consumer demand significantly, by increasing the cost of transporting people, equipment, supplies, raw materials, food and finished products  for work, school, healthcare, business, manufacturing, vacation and other purposes;

Cut business investment by $200–320 billion annually, compared to the no-LCFS baseline;

Slash gross domestic product by $410–750 billion annually by 2025;

Cost 2.3 million to 4.5 million American jobs, including up to 1.5 million in manufacturing and 3.0 million in the service sector; and

Force household purchasing power downward by $1,400 to $2,400 for a family of four by 2025  impacting minority, elderly and other low and fixed income families worst of all.

None of this should be surprising. As President Obama himself has said, the very purpose of energy and climate policies like LCFS is to ensure that prices "necessarily skyrocket." It is to force people to use less fuel, compel companies to change power generation and use practices, drive coal companies and utilities out of business, and force the development of new fuels and technologies that may or may not work.

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July 31, 2010