Is Obama's Treasury Department Planning a Carbon Tax?
The Competitive Enterprise Institute thinks so and today “filed suit to force the Treasury Department to release more than 7,300 emails believed to discuss a new ‘carbon tax’ Obama administration allies in Congress are expected to propose in the upcoming lame duck session.”
The CEI press release continues, “the suit, filed in U.S. District Court in Washington, D.C., seeks emails on official government accounts that CEI had requested under the Freedom of Information Act. Treasury has said nothing about this topic publicly, but the existence of such extensive email traffic likely reflects serious ongoing discussions between Treasury officials, outside pressure groups and other special interests groups.”
The trillion dollar question
Since assuming office four years ago, President Obama has overseen annual trillion dollar deficits. Showing no signs of curbing record levels of federal spending, President Obama and the Democrat Party are searching for new sources of tax revenue to finance a bloated government.
Americans for Tax Reform Opposes a Carbon Tax
Americans for Tax Reform opposes a carbon tax and will work tirelessly to ensure one does not become law.
Taxing American energy consumption not only opens up a new revenue stream for proponents of big government, but threatens to forever damage the American economy.
Americans for Tax Reform President Grover Norquist describes a carbon tax this way:
"The creation of any new tax such as a VAT or energy tax -- even if originally passed with offsetting tax reductions elsewhere -- would inevitably lead to higher taxes as two taxes would be at the disposal of politicians to increase taxes.Two smaller tapeworms are not an improvement over one big tapeworm. Tapeworms and taxes grow.
There is no conceivable way to add an energy or VAT tax to the burdens American taxpayers face that would not violate the pledge over time. If someone first passed and implemented a constitutional amendment with 2/3 of the House and Senate and 3/4 of the states concurring to forbid the restoration of the income tax, we might more safely consider passing a VAT or energy VAT. And then it would be foolish and economically destructive thing to do."
Sen. Tester Runs From Anti-Energy Past
A new poll this week shows the Montana Senate race is neck-and-neck. What’s at stake in Big Sky Country?
Background: Montana’s natural resources are the envy of the nation. It sits atop the Bakken shale, one of the largest accumulations of crude oil in the United States, which is currently estimated to be capable of producing 3.7 billion barrels of oil; the U.S. Geological Survey may raise that estimate as development continues. In addition, Montana holds over one-quarter of the estimated recoverable reserve base of coal in the United States and was the sixth largest coal-producing state in 2011, supplying 3.8 percent of U.S. coal and distributing it to 13 States. Montana is home to four refineries, as well. Accordingly, the energy industry – from extraction through to processing and transportation – has been a boon for the state’s economy.
Despite this, however, Senator Jon Tester – a lifelong Montanan – has consistently voted against families and job creators in his home state.
Cap-and-trade: Tester voted to allow discretionary spending for a cap-and-trade program, and has said that he supports the idea of capping greenhouse gases. A study by the Heritage Foundation found that the Senate version of cap-and-trade, the Lieberman-Warner bill, would cost Montana 2,779 manufacturing jobs, diminish Montana’s GDP $273.1 million and decrease the personal incomes of Montanans $337.6 million by 2030. In addition, they found that Montanans would pay an additional $399 (20%) for gasoline, an additional $136 for natural gas, and an additional $274 for electricity by 2025. ATR has long opposed cap-and-trade because of its devastating economic effects – which would crush an energy-producing state like Montana.
Tax Hiking: Tester voted to raise taxes on oil companies – which would not only be passed on to consumers, but hit Montana-based companies hard, leaving them with less money for hiring and growth. In a March 2011 report, the non-partisan Congressional Research Service (CRS) found that Tester and the Democrats’ proposed energy tax hikes would “make oil and natural gas more expensive for U.S. consumers.” The Montana Petroleum Association made clear that Tester’s tax hikes “would increase gas and diesel prices and could jeopardize good-paying jobs in Billings.”
Tester now seeks cover under his Keystone Pipeline vote, pretending that he is a friend of the energy industry. But his record points to the contrary.
Sen. Tester may not like it, but Montana is blessed with fossil fuels – and Montanans deserve elected officials in Washington who will fight for their interests, not march in lockstep with the President’s green energy proposals.
Sen. Claire McCaskill's anti-energy record
It’s amazing that Sen. Claire McCaskill thinks she can run as an “outsider” in this year’s Senate race. She can claim she’s mainstream and common sense all she wants, but her record tells a different story, as she’s been nothing but a loyal Democratic foot soldier in Washington. On energy in particular, she’s voted against Missouri over and over again.
McCaskill has repeatedly attempted to raise taxes on oil and gas producers – raising costs for energy companies, which would be passed on to consumers in the form of higher prices. In a March 2011 report, the non-partisan Congressional Research Service found that McCaskill and the Democrats’ proposed energy tax hikes would “make oil and natural gas more expensive for U.S. consumers and likely increase foreign dependence.” Any person with common sense knows that will mean higher prices at the pump for consumers.
While she votes to hike taxes on oil companies, Sen. McCaskill unnecessarily constrains domestic production by simultaneously voting to prohibit offshore oil drilling. McCaskill has voted several times against offshore oil production – which would have restored American offshore energy production, improved safety and required bureaucrats to process permits efficiently. She opposed the Offshore Production & Safety Act of 2011, which would have opened up domestic sources of energy to drilling which would move us towards energy independence.
No employer in their right mind would want to do business in this kind of environment. As a result, the U.S. has fewer oil fields and refineries operating than it should, and when storms and hurricanes hit the country the little capacity that exists is tightened even more as facilities temporarily close.
McCaskill voted for cap-and-trade – despite calling the bill “the biggest giant earmark ever created on the planet” – but said “science shows the need to act against climate change.” The Heritage Foundation estimated that that bill would mean that Missourians would pay an additional $397 (20%) for gasoline by 2025 and that would cost the state 42,071 manufacturing jobs. The U.S. Treasury Department estimated that cap-and-trade would cost families up to $1761 extra in taxes per year. As she noted in a 2011 speech, “the good news is emissions are way down because of the recession” – so maybe a sluggish economy is what she’s going for, after all? That’s the only way to explain why she voted for a bill to allow discretionary spending for a cap-and-trade program.
She supported the Administration’s efforts to classify carbon dioxide as a pollutant, and voted over and over against amendments to block the EPA from regulating CO2 and other greenhouse gases. Even the Missouri AFL-CIO president said these EPA regulations “will both threaten jobs and increase costs on energy consumers in Missouri.” Bear in mind, humans exhale carbon dioxide. From an economic standpoint, this policy is devastating – St. Louis’ Meramec power plant is older, and is likely to close because of these policies.
McCaskill may WANT to move us towards “green” energy solutions, but the fact of the matter is that wind, solar, and biofuels are still not viable without major subsidies and tax preferences from the government. Throwing money at “green energy” means these industries have no incentives to become competitive. In the meantime, Missourians still need to fuel their cars and power plants, and McCaskill is making both of those more expensive.
Missouri is an energy-intensive state, and last year it was ranked sixth in the nation in terms of coal usage. McCaskill’s plans would drive up the cost of energy both for homes and businesses, stretching many to the breaking point.
McCaskill has been nothing but hostile to traditional energy industries since she got to Washington, and she’s sacrificing the country’s best interests in the long-term by standing with Harry Reid and Nancy Pelosi. Missouri deserves the full picture – and a senator who will vote for its interests.
EPA Regulation of the Day: Greenhouse Gases
Quote of the Day:
“If you want to build a coal plant you got a big problem”- EPA Region 1 Administrator Curt Spalding
With Congress and the American people rejecting cap-and-trade, the Obama Administration has employed the Environmental Protection Agency (EPA) to achieve similar ends. Delaying job-killing regulations until after the November election, the EPA is currently sitting on numerous proposed rules sure to increase the cost of energy.
A recent report from Senator James Inhofe (R-Okla.) unearths thirteen EPA regulations likely to hit American consumers should President Obama be reelected.
Every single day until November 6, ATR will highlight a pending EPA regulation.
Greenhouse Gas Regulation: $300-400 billion per year
From the Inhofe Report:
Thus far, EPA has issued regulations governing permit programs and monitoring requirements. Earlier this year, EPA proposed the first source specific greenhouse gas regulations – emissions standards for new power plants. The proposal paints an ominous picture for rate payers: the requirements are so strict they virtually eliminate coal as a fuel option for future electric power generation. In a thinly veiled political move, the agency has put off finalizing the proposal until after the election. Similarly, EPA has punted on standards for existing power plants as well as refineries – standards which will further drive up electricity and gasoline prices. Once these regulations are in place, EPA will proceed to issue regulations, industry by industry, until virtually every aspect of the American economy is constrained by strict regulatory requirements and high energy prices.
Take for example, farms: under federal permitting requirements, sources (i.e. a farm whose aggregate emissions exceed CAA permitting thresholds) would be required to comply with costly permitting mandates and pay an annual fee for each ton of greenhouse gas emitted on an annual basis. Known as the “cow tax”, there would be a cost-per-animal outcome. EPA itself estimates that in its best case scenario, there will be over 37,000 farms and ranches subject to greenhouse gas permits at an average cost of $23,000 per permit annually, affecting over 90% of the livestock production in the United States.
This is just the start of the EPA obsession in trying to regulate every aspect of the country’s energy sector. According to the Inhofe Report, “under the Clean Air Act (CAA), churches, schools, restaurants, hospitals, and farms will eventually be regulated.”
Does your Senator want efficient, reliable energy?
Earlier this year the Senate voted to overturn one of the EPA’s most damaging regulations, the Utility MACT. If your Senator voted “Yes,” they wanted to repeal the Utility MACT; if they voted “Nay,” they voted to preserve the job-killing measure.
Three Ways Obama Hides His War on Affordable Energy
During Tuesday’s presidential debate, President Obama dedicated a substantial amount of time arguing that he, in fact, is a huge advocate of traditional energy – coal, natural gas, and oil. In reality, during the past four years Americans have watched gasoline prices double, the Keystone Pipeline needlessly killed, and the phasing out of coal-fired electricity.
While these industries employ millions of Americans, the implications of Obama’s policies affect every American energy consumer. With fewer offshore lease sales, Obama’s has all but assured higher prices at the pump. With less coal being converted into power, Obama has all but assured higher electricity bills.
Below you will find three attempts by Obama to cover-up his war on affordable energy.
Obama: “Now, I want to build on that. And that means, yes, we still continue to open up new areas for drilling.”
One of the President’s first energy actions was to cancel the previous Administration’s five year offshore lease plan, which allowed for drilling off the Atlantic and Pacific coasts. Slow-walking remaining lease sales, the Obama administration has conducted only 11 of the 21 originally scheduled offshore lease sales. Codifying his plan to inhibit development of oil and natural gas reserves on federal land, Obama’s 2012-2017 lease plan represents the lowest number of lease sales ever offered, according to the non-partisan Congressional Research Service.
Probably the best metric to assess the Administration is the number of oil and natural gas approved Applications for Permits to Drill (APDs). Here the Obama Administration shows its true colors: between 2009 and 2011, APDs were down 36 percent.
Further down the road, Obama’s denied Applications for Permit to Drill will cost consumers at the pump when expected oil and natural gas reserves do not come online.
Obama: “We have increased oil production to the highest levels in 16 years. Natural gas production is the highest it’s been in decades.”
Nearly all of America’s increased energy production is owed to the development of shale oil and gas wells – 95 percent of which are on state and private lands. In 2010, 6,512 shale wells were drilled in the U.S. compared to 1,131 shale wells drilled in 2001, a 476 percent increase.
So while oil production on federal lands is down 14 percent in 2011, oil production is up 11 percent on private and state lands. Natural gas is the same story with production on federal lands declining by 10 percent in 2011.
The 2011 increase in oil and natural gas production on private and state lands overwhelms the decrease on federal lands, resulting in an oil production net increase of 3.6 percent and a natural gas production net increase of 7 percent.
Indeed, the incredible production gains have occurred in spite of Obama’s policies, not because of them.
Obama: “We have seen increases in coal production and coal employment.”
This statement couldn’t be farther from the truth – both coal production and coal employment are down under Obama’s tenure. In January of 2009 there were 86,600 coal jobs. In September of 2012, there were 82,200 coal jobs – that’s fewer jobs, not more. In fact, the number of coal mining jobs has dropped in 24 out of the 45 months that Obama has been president. Over the most recent 12-month period, the number of coal mining jobs has dropped every month for a loss of over 5,000 jobs.
How about coal production? In January of 2009, America produced 545.8 million tons of coal; now, 507.8 million tons of coal. Again, that’s a reduction in coal produced, not an increase.
Most importantly, the full impact of Obama’s job-killing regulations have not yet been felt. Power plant owners have announced the shutdown of around 36,000 MW of coal capacity due, in no small part, to EPA regulations. This enormous amount of electricity represents approximately 11 percent of U.S. coal electric generating capacity. Undoubtedly, such a huge reduction in coal-fired electricity will be accompanied by a similar huge reduction in coal-based employment.
While most of us aren’t employed by the coal industry, nearly all of us consume efficient, reliable coal-fired electricity. So if you pay an electricity bill, the EPA’s policies directly affect you.
EPA Finalizes Yet Another Expensive Mandate
Obama’s Environmental Protection Agency (EPA) and National Highway Traffic Safety Administration (NHTSA) codified their war on American drivers by finalizing new car mileage mandates, otherwise known as CAFÉ standards. Increasing the cost of new cars by thousands of dollars, new CAFÉ rules will require cars built in 2025 to get at least 54.5 miles per gallon. With current 2011 cars averaging 28.6 miles per gallon, the EPA is going to require automotive manufacturers to nearly double fuel economy standards in a little more than a decade.
While the Obama administration has made the 2009 Auto-Bailout one of the center-pieces of their re-election campaign, the reality is that these new rules will affect and cost consumers more money. Emily Wismer, Policy Analyst for Independent Women’s Forum writes:
While it sounds fantastic to drive twice as far on each tank of gas, this extra efficiency comes at a large, up-front cost to consumers: New cars are expected to cost about $2000 more because of this mandate. As a result, many potential new car buyers will be priced out of the market. The effects of higher new car costs will ripple into the used car market, as fewer families will be able to trade in old vehicles for a new car. That means less supply and more demand for used cars, and higher prices for used cars as well.
Ms. Wismer’s $2,000 figure might actually understate the actually cost of complying with the EPA’s newest mandate. Bill Underriner, chairman of the National Automobile Dealers Association, estimates that the new regulations could increase the cost of new cars by $3,000 which would “shut almost 7 million people out of the new car market entirely and prevent many millions more from being able to afford new vehicles that meet their needs."
The Obama Administration hails new CAFÉ rules as a necessity to save consumers money at the pump. If higher mileage standards are inherently such a good deal, one has to wonder why the government must ratchet up CAFÉ rules. Consumers are more than capable of deciding what car they would like to drive and what they fill their car up with. Next time you hear about a government mandate coming to save you money, make sure to hold on to your wallet.
Why New York State Should Lift its Hydraulic Fracturing Moratorium
As New York’s Department of Energy Conservation (DEC) prepares to issue a report on hydraulic fracturing, DEC Commissioner Joseph Martens finds himself in a precarious position. As former founder of Catskill Mountainkeepers—your run-of-the-mill anti-energy, anti-hydraulic fracturing group—Martens spent most of his days making sure oil and natural gas producers were creating jobs in Pennsylvania, not New York.
Hydraulic fracturing is effectively banned in New York State (indefinite moratorium) which means that the Utica Shale play, the natural gas formation that stretches from West Virginia to New York, is off-limits. Were NY’s DEC to issue an objective report about the pros and cons of hydraulic fracturing, the state might begin a measured conversation about increasing energy production, creating jobs, and reducing the state’s budget gap.
Unfortunately, given Martens’s background and predispositions, an objective report and subsequent adult conversation will never occur. What a shame. While New York’s unemployment level is 8.9 percent, it is certainly higher in the state’s rural regions where most of the New York’s energy reserves are found. While Manhattan may be recession proof, much of blue-collar New York is hurting.
Since 2010, development of shale reserves has supported an astounding 600,000 jobs, a number that is only increasing. Adding insult to injury for New York’s unemployed, many of these jobs are found in nearby states like Pennsylvania and Ohio. Hydraulic fracturing—a tried and true method of extracting oil and natural gas—coupled with horizontal drilling will continue to be a boon for America’s economy; an estimated 70 percent of natural gas development in the future will come from hydraulic fracturing.
But hydraulic fracturing is much bigger than the oil and natural gas industry. America’s abundance of natural gas has directly fueled a manufacturing renaissance in two ways. Natural gas is cheap, very cheap, which means that electricity prices will decrease. America’s manufacturers, what few are left, are under such immense pressure from globalization that a ten percent drop in electricity prices might make the difference between closing up shop and keeping the lights on. Secondly, chemical companies that use natural gas as a feedstock are literally closing shops abroad and reopening them in the United States.
With all the excitement surrounding American energy development, it is a shame to see New York State on the sidelines.
Life without the PTC ain't that bad
In 2002, Sen. Chuck Grassley (R-Iowa) lobbied for temporary extension of the wind Production Tax Credit (PTC) arguing that wind was nearly competitive:
"I'd say we're going to have to do it for at least another five years, maybe for 10 years. Sometime we're going to reach that point where it's competitive [with other forms of energy]. I think the argument for any tax credit is to make the new source of energy economically competitive," Grassley said.
Taking Sen. Grassley (R-Iowa) at his word, 2012 would be the last year the federal government allowed wind producers to claim the PTC. Yet, Sen. Grassley (R-Iowa)—the 1992 original author of the PTC—and other Midwest Republican Senators are again arguing for a one-year or four-year extension of the PTC.
But will allowing the wind PTC to expire be a deathblow to the wind industry in states like, oh say, Iowa? Hardly.
Wind producers will employ the PTC until 2022
The wind PTC allows wind producers to employ the 2.2 cents per KWh tax credit for the first ten years they are operating; meaning that a wind producer who began employing the PTC this year will be able to utilize the credit until 2022. Far from pulling the rug out from under the wind industry, allowing the PTC to expire will have no impact on current wind producers.
105 MW of Iowa’s electricity must come from renewable sources
One of 33 states that has either a Renewable Portfolio Standard (renewable electricity mandate) or renewable target, a large portion of Iowa’s electricity must effectively come from wind production. Iowa’s RPS, for better or worse, ensures that wind will be a critical component of Iowa’s energy mix.
Choosing instead to cite spurious numbers about impending job losses, wind PTC proponents conveniently ignore government policies that already buttress the industry. If you offered a non-wind retailer the opportunity to have a mandated consumer base and then the ability to lower their tax liability every time they sold their product, they would take that deal—and sell a lot of widgets.
Justified as a temporary tax provision by its advocates, it is time to allow the wind PTC to expire at the end of 2012, as Sen. Grassley promised.
Romney vows to cleanup America's electricity market, let wind PTC expire
Showing reverence for the free market and transparent electricity prices, Governor Romney vowed to let the Wind Production Tax Credit expire at the end of 2012. Yesterday, the campaign condemned the PTC correctly characterizing it as a distortive, liberal policy:
"President Obama's promise to 'easily' create 5 million green energy jobs has become a particularly depressing punchline amidst the endless disappointments of the last four years. The President spent $90 billion in taxpayer stimulus dollars, some of which went to his donors and political allies or was sent to create jobs overseas instead of here in America. Now we have American wind and solar energy sectors that combine to produce only one percent of our energy - and our wind industry has actually lost 10,000 jobs."
"The President may believe that his economic plan 'worked' and that America wants to repeat the experience for another four years, but the facts don't back that up. Mitt Romney believes it is time for a new approach to ensure our nation's energy independence. He will allow the wind credit to expire, end the stimulus boondoggles, and create a level playing field on which all sources of energy can compete on their merits. Wind energy will thrive wherever it is economically competitive, and wherever private sector competitors with far more experience than the President believe the investment will produce results."
ATR couldn't agree more. Only in a world of loan guarantees, mandates, and Environmental Protection Agency regulations are Americans forced to employ an inefficient, expensive energy source - wind. Gov. Romney's decision to let the wind PTC expire shows that he is serious about cleaning up America's tax code and energy market.
It is important to note that Governor Romney's decision took political courage; Colorado and Iowa are heavy consumers of wind energy - both are pivotal swing states. The American Wind Energy Association (AWEA) has spent hundreds of thousands of dollars lobbying Midwest Republican and Democrats to support the Wind PTC. Now dependent on the PTC, the wind lobby will likely set its sights on the Romney campaign. Certainly aware of this reality, Gov. Romney chose policy over politics and will be making the case for full expiration of the PTC.
Americans for Tax Reform has long advocated for complete expiration or immediate repeal of the PTC on the condition that the corresponding tax increase is offset (Rep. Pompeo bill).