January 20 Colorado Energy Cheat Sheet: Billionaire Steyer plays CO politics; NM files intent to sue EPA over mine spill

Independence Institute associate energy policy analyst Simon Lomax has the latest on green billionaire Tom Steyer’s efforts to tilt the legislative balance in Colorado in 2016:

San Francisco billionaire activist Tom Steyer is getting more deeply involved in Colorado politics than ever before. After spending more than $350,000 on research and polling in the Centennial State last year, two groups aligned with Steyer are now funding political attacks on State Senator Laura Woods (R). Republicans control the Colorado State Senate by a single vote, so unseating Woods could return control of the state legislature to Democrats and reinstate one-party rule under Gov. John Hickenlooper (D) until early 2019 at least.

Read all of his latest piece here.

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Our neighbors to the south, New Mexico, has filed an intent to sue notice over the Animas River/Gold King Mine spill last year triggered by the Environmental Protection Agency:

ALBUQUERQUE, N.M. (AP) – New Mexico plans to sue the federal government and the owners of two Colorado mines that were the source of a massive spill last year that contaminated rivers in three Western states, officials said Thursday.

The New Mexico Environment Department said it filed a notice of its intention to sue the U.S. Environmental Protection Agency over the spill, becoming the first to do so. The lawsuit also would target the state of Colorado and the owners of the Gold King and Sunnyside Mines.

The New Mexico regulators said they will sue if the EPA does not begin to take meaningful measures to clean up the affected areas and agree to a long-term plan that will research and monitor the effects of the spill.

“From the very beginning, the EPA failed to hold itself accountable in the same way that it would a private business,” said Ryan Flynn, state Environment Department cabinet secretary.

While the Navajo Nation is considering its options for legal action, the state of Colorado’s Attorney General had no comment at this time.

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Drilling on the Western Slope dropped in 2015:

Garfield County last year held onto the No. 2 spot statewide in terms of oil and gas drilling activity, despite the lowest level of activity since the 1990s.

Mesa County bucked the statewide trend in 2015, however, seeing a sharp increase in drilling and ranking third among Colorado counties.

Falling oil and gas prices resulted in drilling beginning on just 1,437 wells statewide last year, down from 2,239 the prior year, according to Colorado Oil and Gas Conservation Commission data. Much of the decrease occurred in Weld County as companies slowed oil drilling there thanks to falling prices. But the county still continued to see the bulk of activity last year, with drilling begun on 1,084 wells.

Garfield County had just 173 well starts last year, down from 362 in 2014. The last time the county saw less drilling, with 94 well starts, it wasn’t Jeb Bush but his brother, George, who was harboring presidential aspirations, in the year 1999.

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Lower commodity prices have given Coloradans a bit of temporary relief, offsetting the region’s cost of living increases:

Two conflicting consumer price trends are pushing around the Denver area’s cost of living like a rag doll.

A new federal report Wednesday says that the cost of shelter in the Denver, Boulder and Greeley area jumped 5.8 percent in the second half of 2015 from a year earlier.

And yet, over the same period, energy costs fell 19 percent.

The result: a 1.4 percent year-over-year rise in the area’s overall consumer prices, the cost of a basket of typical goods and services, according to the report from the Bureau of Labor Statistics’ Kansas City office.

Shelter costs outweigh energy costs for most consumers, so shelter plays a bigger role in driving overall consumer prices.

The problem is that commodity prices fluctuate (due to market forces but also to environmental factors like government policies), and this small, offsetting bump for Colorado electricity ratepayers will provide only temporary relief. According to the Denver Business Journal, gasoline is down nearly 26 percent in 2015, with natural gas down nearly 19 percent. Household electricity was off 2.9 percent

On the other hand, gasoline cost 25.9 percent less in late 2015 than it did a year earlier, BLS said, while household natural gas cost 18.9 percent less and household electricity was down 2.9 percent. That’s hardly a dent in the 63 percent increase in residential electricity costs measured through 2014.

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Job counters will see in a few years if the solar industry’s employment numbers are real (this time, and not an ephemeral mirage like so many other “green jobs”) and not temporary construction jobs and inferred “indirect jobs,” but for now they admit what is giving the solar folks a bump:

A few key developments are driving the job surge in solar.

Businesses and homeowners are eligible for a 30% tax credit if they install solar panels on their property. That’s been in place since 2006 but in December Congress renewed the tax credit for another six years. That lowers installation costs considerably.

The climate change agreement in Paris and the global action plan to limit global warming is also a positive for the clean energy industry.

And the Environmental Protection Agency released plans last year to force states to lower their carbon output.

Not much in the way of actual demand from consumers without government force (EPA’s Clean Power Plan) or government incentive (tax credit), or public pressure (Paris).

The article notes that lower commodity prices for oil and gasoline, and natural gas, are giving solar a “headwind.” Free market effects will do that.

Despite all the supply-side incentives (tax credits, subsidies, and mandates) and the demand-side disincentives (killing coal through the Clean Power Plan) the Energy Information Administration reports that solar was at 4.4 percent of all renewables in 2014 (last full year of data available), and a mere 0.4 percent of total U.S. energy consumption that year.

Free-Market Environmentalism Over Failed Government Stewardship

September 9, 2010 by jlongo · Comments Off
Filed under: Archive 

by J. Craig Green, P.E.

Free market environmentalists are everywhere these days, but you rarely hear about them in the mainstream press. Conventional wisdom for our entire lifetimes has been that only government protection can minimize or prevent environmental damage. The idea that markets are better at managing natural resources than governments may come as a shock to some, but the simple reason is that private property owners have more incentive and control to take care of property they own.

Terry Anderson, Executive Director of the Property and Environment Research Center (PERC) in Bozeman, Montana made this case in his groundbreaking book, “Free Market Environmentalism,” co-authored with Donald Leal in 1991. It’s well past time these ideas get more attention.

In his June 25, 2010 Wall Street Journal article, “Why it’s Safer to Drill in the Backyard,” Anderson explains an aspect of the current Gulf oil spill disaster you won’t find in most media outlets. He refers to the Audubon Society’s successful relationship with oil companies who have operated wells on its lands, but only when birds weren’t nesting. Period. None of the ifs, ands and buts that are always present when politicians and special interests try to manipulate public land use. Why would Audubon allow well drilling on its environmentally-sensitive lands? To generate royalties for the purchase of more privately-owned land that can then be protected.

Private organizations like Audubon are much better stewards of the environment than government. For an outrageous example of government failure, look no further than the ongoing Gulf oil spill, where available options for a speedy cleanup were set aside and President Obama’s political agenda rose to the top, like his never-ending refrains about alternative energy, cap and trade taxes and punishing the deep water wells that did not blow out. None of these have anything to do with the current disaster, a masterful example of bait-and-switch by an expert politician.

The Merchant Marine Act of 1920, AKA the “Jones Act” which prohibits using ships and equipment not owned by Americans to protect labor unions from competition, could have been waived immediately after the spill. North Atlantic countries with extensive ocean drilling experience immediately offered their sophisticated oil-skimming equipment, but the offer was declined by the U.S. government. After several weeks, National Incident Commander Admiral Allen said, “No one has asked me to waive the Jones Act.”

Finally, after two months, procedures for waiving the Jones Act were developed. This is how government responds to media pressure, a completely different skill than actually solving problems, or at least getting out of the way.

Under the 1990 Oil Pollution Act, liability for future oil spills was limited to 75 million dollars in most situations. The combination of public ownership (ensuring political instead of economic resource allocation), government-limited liability and government restrictions reducing drilling locations all but assured BP’s shoddy workmanship in the current disaster. Anyone who thinks the free market is to blame for such problems hasn’t been paying attention to the last century of increasing government interference in every aspect of the economy, including business and other subsidies that discourage accountability.

As a collapsing worldwide economy unfolds from a century of unsustainable public debt, counterproductive and idealistic promises of government stewardship are finally being revealed for what they are – a flawed comparison between market realities with government fantasies that never seem to work in the long run.

More information about free market environmentalism may be found at www.perc.org.

J. Craig Green, P.E. is an engineer and Senior Fellow at the Independence Institute