TommyWonk

2011-08-11T17:27:00.004-04:00

After 1,850 posts on TommyWonk over the last six and a half years, it's time for me to turn my attention elsewhere.

Next week I start a job with the State of Delaware in the area of renewable energy. Having argued that renewable energy can and does make economic sense, I want to help make that happen. It’s work worth doing, and worth doing well.

Because the job involves many of the issues I have been writing about, I am taking a hiatus from blogging. I will also be stepping away from most of my other advocacy efforts. I plan to keep TommyWonk up to maintain a record of what I have written since 2005. I may return to blogging down the road, though I won’t make any promises.

I have been gratified by the many kind words I have heard from my readers along the way. Thank you all for your interest and encouragement.

Personal Piety and Public Policy

2011-08-09T20:36:00.004-04:00

When it comes to environmental advocacy, I’m not interested in personal virtue. For me, this is not a moral crusade. Yes people may install solar panels or drive a hybrid car out of a sense of moral obligation to the planet, a commendable sentiment when coupled with effective action to reduce one's impact on the planet. But I don’t think we will make the changes we need by trying to instill greater piety in people. I think we make the changes in our energy economy by working to reach the tipping point where the economic advantages of renewable energy are too compelling for us to turn back. I prefer to think about changing economic systems rather than nudging people to live more virtuous lives.

The fallacy that this is about piety permeates the discussion about energy. Dick Cheney said ten years ago, “Conservation may be a sign of personal virtue, but it is not a sufficient basis for a sound, comprehensive energy policy.”

Cheney’s first fallacy is confusing conservation and efficiency. Conservation is driving less or turning down the thermostat. Efficiency is using less energy to provide the same benefit.

His second fallacy is confusing inputs with outputs. Energy use is not perfectly correlated with economic output. The amount of energy required to support a dollar of GDP has fallen by half since World War II.

This leads to his third fallacy: thinking that using less energy requires deprivation. I am not as interested in instilling personal virtue in others as I am in creating a cleaner and more efficient energy economy. It’s the idea that environmentalists are scolds who want to deprive their neighbors of a warm (or cool), brightly lit home at a reasonable cost that creates so much of the resistance to renewable energy policies.

This is the basis of much of the criticism of Al Gore for not living frugally enough. When Gore was awarded the Nobel Peace Prize, I predicted that his critics “will probably point out his hypocrisy when he flies to Stockholm to receive his award instead of traveling by kayak.” Similar criticism has been leveled at Michelle Obama for eating an occasional burger and fries. This kind of carping just doesn't belong in a serious discussion about problems affecting millions of lives.

Record High Temperatures Across the Country

2011-08-06T08:41:00.001-04:00

Data geeks at the National Oceanic and Atmospheric Administration (NOAA) took the reports of record high temperatures across the country and plotted them on a map:

The data map shows that record high temperatures were not confined to just one region:

How hot was the month of July in 2011? So hot that just by plotting the location of each daily heat record that was broken, a nearly complete image of the contiguous United States is visible. Almost 9,000 daily records were broken or tied last month, including 2,755 highest maximum temperatures and 6,171 highest minimum temperatures (i.e., nighttime records). It should be noted that the tally of records collected so far is not complete – more are expected to come in as station data from across the U.S. is mailed to the National Climatic Data Center.

Hot weather in one location doesn't necessarily mean the entire earth is getting warmer. But the appearance of record highs in every region suggests that something unusual is going on.

Glaciers Melting in Glacier National Park

2011-08-03T06:37:00.004-04:00

Glacier National Park has some spectacular sights: Going-to-the-Run Road, Saint Mary Lake, and for now at least some glaciers. According to this story in the travel section of the New York Times reports, you might want to make your reservations sooner rather than later:

I was in northwest Montana for the hikes and the huckleberries, but most of all to experience the namesake glaciers, which, I had recently learned, might be around for only another decade or so. Given that a century and a half ago there were 150 and now there are 25, the trip makes me an enlistee in the practice known by a somewhat prickly term: last-chance tourism.

Glaciers are a pretty good indicator of the earth’s thermal equilibrium. They are big enough to not be affected by a single summer’s heat wave or a winter’s cold snap. Changes in glaciers indicate long term trends. If the atmosphere is getting cooler, glaciers grow; if it’s getting warmer, glaciers shrink.

Sea Level Rise and Delaware Infrastructure

2011-07-29T06:23:00.005-04:00

The costs of sea level rise from global warming will not be limited to beachfront property and wetlands. A look at DNREC's sea level rise maps reveals significant impacts for the infrastructure serving Wilmington and northern New Castle County. DNREC's interactive maps show the effects of 0.5 meters, 1.0 meter and 1.5 meters:

The maps show that even a modest rise in sea level would undermine or flood much of the major infrastructure in and around Wilmington.

I-95 would be flooded at several points between Rt. 141 and Wilmington. I-495 would be undermined near Edgemoor, under the bridge over the Christina River, at the interchange with Rt. 13, and at the interchange with I-95 and I-295. The S. Market Street, S. Walnut Street and 4th Street Bridges across the Christina River would be inundated. The Port of Wilmington would be partially underwater. Erosion along the banks of the Cherry Island Landfill and the Wilmington Wastewater Treatment Plant would threaten the structural integrity of these facilities that serve most of New Castle County. Amtrak lines would be flooded at several points, including the maintenance facility along I-495.

DNREC's Sea Level Rise Advisory Committee is looking at the potential costs associated with inundated or flooded infrastructure. One current project provides a useful benchmark:

Market Street Safety Project - Wilmington: This project would elevate the roadway out of the floodplain; reducing the impact flooding has on residents and businesses. The contract will also add the following streetscaping: sidewalks, pedestrian lighting and trees. Improvements also include undergrounding utilities. The limits are Market Street from "A" Street to just north of the Market/Walnut Street intersection. Bid opening date was Tuesday, June 8. The contract was awarded to Mumford & Miller Concrete, Inc., on July 9, 2010 with a bid amount of $4,430,809.05. The construction began on September 6, 2010. 684 Calendar Day Project.

That’s $4.4 million for less than a mile of roadway and associated infrastructure. I expect that the total infrastructure costs associated with sea level rise will be very large indeed. And what would the cost be if we decide that shoring up or replacing these transportation lines is just too expensive? Wilmington would be cut off from the highways and rail lines that connect New York and Washington.

When I discussed this at a meeting of environmental advocates with then Senator Ted Kaufman, he responded with the words, "Buffalo, New York." I sat there puzzled for a moment, and he explained that Buffalo's economic relevance began to decline when the Erie Canal was replaced by rail lines and highways as the country's main commercial arteries.

The Brink of Default

2011-07-26T06:16:00.003-04:00

In a way I am reminded of the Civil War. The South chose to break away from our national government rather than accept limits on slavery. Today, the Republican Party is threatening to break our government rather than compromise on efforts to control the debt.

Minority obstruction has become a way of life in Congress, with the proliferation of filibusters and secret holds of nominations to federal office. Now this obstructionism has metastasized, with the entire government being marched inexorably to the brink of default.

This is not just about the budget or the size of our federal government. Congress has argued about appropriations for more than two centuries. This is about whether one faction can force the government to stop operating unless that faction gets its way. The essence of majority rule is that all citizens and parties accept the legitimacy of the government, even when those with opposing views hold power. The House Republicans do not acknowledge limits to their power in a divided government, and are holding up the machinery of government unless they get their way.

Downplaying the Risk of Default

2011-07-20T06:41:00.000-04:00

Republicans are downplaying the consequences of default if Congress fails to authorize more debt. The News Journal reports that Glen Urquhart thinks the U.S. government can get by without raising the debt ceiling:

Glen Urquhart, a Republican who lost the 2010 U.S. House race, said Democrats like Markell, Coons and Obama are trying to scare the public in order to secure higher taxes to pay down the debt.

"Those are great DNC talking points, but they're just not the truth," said Urquhart, a businessman from Rehoboth Beach. "The United States is still the safest place to invest. Nothing is going to happen."

Urquhart suggested the U.S. Treasury sell bonds on the proceeds of the Social Security Trust Fund to get by until a resolution can be reached on the debt ceiling.

Urquhart should go back to school for remedial finance. Selling bonds is the way the government finances debt. Bonds cannot be sold unless and until Congress authorizes the government to borrow the money.

Forgiveness

2011-07-19T17:34:00.002-04:00

The New York Times has a stunning first person account from the victim and the perpetrator of a brutal hate crime in Texas:

Mark Anthony Stroman, 41, a stonecutter from Dallas, shot people he believed were Arabs, saying he was enraged by the terrorist attacks of Sept. 11, 2001. He killed at least two: Vasudev Patel, an Indian immigrant who was Hindu, and Waqar Hasan, a Muslim born in Pakistan.

A third shooting victim, Rais Bhuiyan, 37, a former Air Force pilot from Bangladesh, survived after Mr. Stroman shot him in the face at close range. Mr. Stroman admitted to the shootings. He is scheduled to be executed on Wednesday.

Mr. Bhuiyan, despite being partly blinded in his right eye, has spent the past several months creating a Web site with a petition and meeting with officials in Texas to try to persuade the state to spare Mr. Stroman.

The Times interviewed the two, Bhuiyan by phone, and Stroman who responded via typewriter.

Rais Bhuiyan:

Then there’s a guy coming into the store with a hat and sunglasses and a bandanna and a gun in his hand. I thought it was a robbery. I said, “Don’t shoot me please. Take all the money.” He said, “Where are you from?” He was four or five feet away from me. I felt cold air in my spine. I said, “Excuse me?” It was a double-barrel gun. I felt a million bee stings on my face at the same time. Then I heard an explosion. I saw images of my parents, my siblings and my fiancée and then a graveyard and I thought, “Am I dying today?” I looked down and saw blood was pouring from my head. I placed both my hands on my head to get my brains in and I screamed, “Mom!” I looked and he was still staring at me and I thought he might shoot me again if I don’t fall and he doesn’t think I’m dead. The floor was getting wet with my blood. Then he left the store. I could not believe he shot me. I thought I was dreaming, going through a hallucination. I didn’t do anything wrong. I was not a threat to him. I couldn’t believe someone would just shoot you like that.

Mark Anthony Stroman:

“Yes, Mr Rais Bhuiyan, what an inspiring soul...for him to come forward after what ive done speaks Volume’s...and has really Touched My heart and the heart of Many others World Wide...Especially since for the last 10 years all we have heard about is How Evil the Islamic faith Can be...its proof that all are Not bad nor Evil.”

Bhuiyan's website is called World Without Hate. Stroman's blog is called Execution Chronicles.

Bill Clinton and Reflective Roof Coatings

2011-07-18T17:35:00.004-04:00

I have previously noted the simple and cost effective practice of covering dark roofs with reflective roof coatings (here and here). Now Bill Clinton is touting the benefits of putting people to work reducing cooling costs with this simple method:

What's the single best idea to jumpstart job creation?

Look at the tar roofs covering millions of American buildings. They absorb huge amounts of heat when it's hot. And they require more air conditioning to cool the rooms. Mayor Bloomberg started a program to hire and train young people to paint New York's roofs white. A big percentage of the kids have been able to parlay this simple work into higher-skilled training programs or energy-related retrofit jobs. (And, believe it or not, painting the roof white can lower the electricity use by 20 percent on a hot day!)

Every black roof in New York should be white; every roof in Chicago should be white; every roof in Little Rock should be white. Every flat tar-surface roof anywhere! In most of these places you could recover the cost of the paint and the labor in a week. It's the quickest, cheapest thing you can do. In the current environment it's been difficult for the mayors to get what is otherwise a piddling amount of money to do it everywhere. Yet lowering the utility bill in every apartment house 10 to 20 percent frees cash that can be spent to increase economic growth.

This simple technique acts locally by reducing cooling costs, and globally by reflecting sunlight back into space. We don't need to rely on guesswork to measure the benefits; the Lawrence Berkeley National Laboratory has already crunched the numbers.

Michelle Obama's Milkshake and Fries

2011-07-14T06:32:00.003-04:00

Michelle Obama has drawn predictable carping from her critics who pounced on her lunch of a burger, fries and milkshake as hypocritical, or at least counterproductive, given her high profile campaign to reduce childhood obesity. John Talty challenged her sincerity in the International Business Times:

It's time for Mrs. Obama to either put up or shut up on how she represents the fight against obesity.

She can truly get committed to the process and eat healthy, as she encourages people to do, or she can eat any way she'd like but without all of the pretenses.

USA Today reports that nutritionists, who deal with the issues every day, are more supportive:

"It's perfectly fine to indulge in your favorite foods every once in a while," says Elizabeth Ward, a registered dietitian in Boston, and author of The Complete Idiot's Guide to Feeding Your Baby and Toddler. "A healthy lifestyle is all about balance and inclusion, not deprivation and misery. I would have preferred a cup of fat-free milk to the diet soda, though."

Milk shakes are a good source of calcium, but are loaded with fat and calories, Ward says. Burgers pack protein, iron and other nutrients, but tend to be high in fat, also.

Robyn Flipse, a registered dietitian in Bradley Beach, N.J., and author of Fighting the Freshman Fifteen, says, "Michelle Obama's openness about how she eats and exercises is the most valuable nutrition news that's been published in decades.

"The government's dietary guidelines are very clear on the need to establish eating patterns that are flexible and accommodate our personal preferences. Mrs. Obama provides a perfect example of just that when she enjoys the occasional burger and fries for lunch, while also demonstrating to her daughters the hard-to-grasp concept of moderation.

The mistake Mrs. Obama's critics make is to turn this into a question of personal virtue or strength of character. Turning obesity into a question of morally deficiency obscures the large issues of public health policy that need to be discussed.

The Transport Rule and Delaware

2011-07-12T06:54:00.004-04:00

The News Journal has a story today on the EPA's new Cross-State Air Pollution Rule, also called the Transport Rule, that targets power plants that emit pollutants that affect the air in downwind states. Because so much pollution wafts into Delaware from sources to our west, compliance with Clean Air Act standards becomes impossible.

This contributor to the Huffington Post noted DNREC Secretary Collin O'Mara's testimony to a hearing Senator Tom Carper held on the topic:

O’Mara summed it up with one sentence: “This imbalance allows upwind states to enjoy a competitive advantage for economic development, particularly in the recruitment and retention of manufacturing firms, while the downwind states are forced to deal with the consequences economically and environmentally.”

Upwind states that burn coal enjoy cheaper electricity rates while sending the pollution eastward to Delaware, where it causes billions in health and mortality costs. Because of the lack of fossil fuels and the congested grid, Delaware pays more for its power. Delaware has to pay the costs of cleaning up local sources of pollution, and still doesn't meet clean air standards. We need to promote renewables, reduce our reliance on out of state energy and press for fair enforcement of the Clean Air Act to overcome these disadvantages.

Honoring Our Obligations

2011-07-07T06:31:00.005-04:00

Senator Chris Coons took to the Senate floor yesterday to warn of America becoming a bad investment if the U.S. government refused to pay its bills:

And I am gravely concerned that we are on the verge of the most predictable financial crisis in modern American history as we slowly grind toward the predicted deficit – excuse me, the predicted default on America’s mortgage on August 2nd.

His slip of the tongue illustrates the point that the debt ceiling has nothing to do with controlling the deficit, but whether Congress will refuse to meet our obligations. Some countries like Greece are facing default because they are having trouble paying their bills. The U.S. is risking default because one political party thinks we should refuse to pay our bills. Coons yesterday pointed out that the debt ceiling is about meeting obligations already incurred:

This is not about cutting up the credit cards or ending the blank check for our current president. This is about whether we will continue to meet the commitments America has already made.

I honestly can't understand what threatening to default has to do with fiscal responsibility. I grew up learning that bills were obligations, and that those who refused to honor their obligations—whether family, business or government—were untrustworthy.

In a much discussed column in the New York Times, David Brooks had these scathing words for the Tea Party Republicans:

The members of this movement have no sense of moral decency. A nation makes a sacred pledge to pay the money back when it borrows money. But the members of this movement talk blandly of default and are willing to stain their nation’s honor.

I don't see how anyone entrusted with responsibility for governing our country could imagine, even for a moment, that casting doubt on the trustworthiness of our government is somehow useful. Brooks said that if Republicans push the government into default, that voters will "conclude that Republicans are not fit to govern." I couldn't agree more.

When in the Course of Human Events

2011-07-04T01:45:00.006-04:00

In CONGRESS, July 4, 1776
The unaminous Declaration of the thirteen united States of America,

When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. —That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, —That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security. —Such has been the patient sufferance of these Colonies; and such is now the necessity which constrains them to alter their former Systems of Government. The history of the present King of Great Britain [George III] is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States. To prove this, let Facts be submitted to a candid world.

He has refused his Assent to Laws, the most wholesome and necessary for the public good.

He has forbidden his Governors to pass Laws of immediate and pressing importance, unless suspended in their operation till his Assent should be obtained; and when so suspended, he has utterly neglected to attend to them.

He has refused to pass other Laws for the accommodation of large districts of people, unless those people would relinquish the right of Representation in the Legislature, a right inestimable to them and formidable to tyrants only.

He has called together legislative bodies at places unusual, uncomfortable, and distant from the depository of their public Records, for the sole purpose of fatiguing them into compliance with his measures.

He has dissolved Representative Houses repeatedly, for opposing with manly firmness his invasions on the rights of the people.

He has refused for a long time, after such dissolutions, to cause others to be elected; whereby the Legislative powers, incapable of Annihilation, have returned to the People at large for their exercise; the State remaining in the mean time exposed to all the dangers of invasion from without, and convulsions within.

He has endeavoured to prevent the population of these States; for that purpose obstructing the Laws for Naturalization of Foreigners; refusing to pass others to encourage their migrations hither, and raising the conditions of new Appropriations of Lands.

He has obstructed the Administration of Justice, by refusing his Assent to Laws for establishing Judiciary powers.

He has made Judges dependent on his Will alone, for the tenure of their offices, and the amount and payment of their salaries.

He has erected a multitude of New Offices, and sent hither swarms of Officers to harass our people, and eat out their substance.

He has kept among us, in times of peace, Standing Armies without the consent of our legislatures. He has affected to render the Military independent of and superior to the Civil power.

He has combined with others to subject us to a jurisdiction foreign to our constitution and unacknowledged by our laws; giving his Assent to their Acts of pretended Legislation:

For Quartering large bodies of armed troops among us:

For protecting them, by a mock Trial, from punishment for any Murders which they should commit on the Inhabitants of these States:

For cutting off our Trade with all parts of the world:

For imposing Taxes on us without our Consent:

For depriving us, in many cases, of the benefits of Trial by Jury:

For transporting us beyond Seas to be tried for pretended offences:

For abolishing the free System of English Laws in a neighbouring Province, establishing therein an Arbitrary government, and enlarging its Boundaries so as to render it at once an example and fit instrument for introducing the same absolute rule into these Colonies:

For taking away our Charters, abolishing our most valuable Laws, and altering fundamentally the Forms of our Governments:

For suspending our own Legislatures, and declaring themselves invested with power to legislate for us in all cases whatsoever.

He has abdicated Government here, by declaring us out of his Protection and waging War against us.

He has plundered our seas, ravaged our Coasts, burnt our towns, and destroyed the lives of our people.

He is at this time transporting large Armies of foreign Mercenaries to compleat the works of death, desolation and tyranny, already begun with circumstances of Cruelty and perfidy scarcely paralleled in the most barbarous ages, and totally unworthy the Head of a civilized nation.

He has constrained our fellow Citizens taken Captive on the high Seas to bear Arms against their Country, to become the executioners of their friends and Brethren, or to fall themselves by their Hands.

He has excited domestic insurrections amongst us, and has endeavoured to bring on the inhabitants of our frontiers, the merciless Indian Savages, whose known rule of warfare, is an undistinguished destruction of all ages, sexes and conditions.

In every stage of these Oppressions We have Petitioned for Redress in the most humble terms: Our repeated Petitions have been answered only by repeated injury. A Prince whose character is thus marked by every act which may define a Tyrant, is unfit to be the ruler of a free people.

Nor have We been wanting in attentions to our British brethren. We have warned them from time to time of attempts by their legislature to extend an unwarrantable jurisdiction over us. We have reminded them of the circumstances of our emigration and settlement here. We have appealed to their native justice and magnanimity, and we have conjured them by the ties of our common kindred to disavow these usurpations, which, would inevitably interrupt our connections and correspondence. They too have been deaf to the voice of justice and of consanguinity. We must, therefore, acquiesce in the necessity, which denounces our Separation, and hold them, as we hold the rest of mankind, Enemies in War, in Peace Friends.

We, therefore, the Representatives of the united States of America, in General Congress, Assembled, appealing to the Supreme Judge of the world for the rectitude of our intentions, do, in the Name, and by the Authority of the good People of these Colonies, solemnly publish and declare, That these United Colonies are, and of Right ought to be Free and Independent States; that they are Absolved from all Allegiance to the British Crown, and that all political connection between them and the State of Great Britain, is and ought to be totally dissolved; and that as Free and Independent States, they have full Power to levy War, conclude Peace, contract Alliances, establish Commerce, and to do all other Acts and Things which Independent States may of right do. And for the support of this Declaration, with a firm reliance on the protection of divine Providence, we mutually pledge to each other our Lives, our Fortunes and our sacred Honor.

[New Hampshire] Josiah Bartlett, William Whipple, Matthew Thornton

[Massachusetts] John Hancock, Samual Adams, John Adams, Robert Treat Paine, Elbridge Gerry

[Rhode Island] Stephen Hopkins, William Ellery

[Connecticut] Roger Sherman, Samuel Huntington, William Williams, Oliver Wolcott

[New York] William Floyd, Philip Livingston, Francis Lewis, Lewis Morris

[New Jersey] Richard Stockton, John Witherspoon, Francis Hopkinson, John Hart, Abraham Clark

[Pennsylvania] Robert Morris, Benjamin Rush, Benjamin Franklin, John Morton, George Clymer, James Smith, George Taylor, James Wilson, George Ross

[Delaware] Caesar Rodney, George Read, Thomas McKean

[Maryland] Samuel Chase, William Paca, Thomas Stone, Charles Carroll of Carrollton

[Virginia] George Wythe, Richard Henry Lee, Thomas Jefferson, Benjamin Harrison, Thomas Nelson, Jr., Francis Lightfoot Lee, Carter Braxton

[North Carolina] William Hooper, Joseph Hewes, John Penn

[South Carolina] Edward Rutledge, Thomas Heyward, Jr., Thomas Lynch, Jr., Arthur Middleton

[Georgia] Button Gwinnett, Lyman Hall, George Walton

The Bond Bill and Stoltz Real Estate Partners

2011-06-29T12:40:00.004-04:00

Senate Bill 130, the Bond Bill, was formally introduced yesterday. Old Leg Hall hands will quickly review the numbers in the front of the bill and turn to what is called the epilog language, which provides instructions on how the funds shall and shall not be used.

Page 52 of this year's Bond Bill includes some specific instructions to DelDOT on how to handle permits for two high profile development projects in New Castle County:

Section 114. Buck Road. The Department of Transportation is requested to refrain from issuing any entrance permit, authorization, or approval for use of any entrance way from New Castle County Parcel Number 0702600094 onto Buck Road, until such time as it also certifies by letter to the New Castle County Department of Land Use that the developer’s proposed entrance design meets the Department’s standards, pursuant to its authority under Title 17 Del. C. §146 and its related regulations, intended to protect public safety and maintain smooth traffic flow. The government of New Castle County is also requested to solicit comments from and work with the residents of surrounding communities, community organizations, and State and local officials to address traffic safety and other legitimate land use concerns about the proposed development, after the receipt of the Department’s letter.

Section 115. Routes 141 and 48. The Department of Transportation is requested to refrain from issuing any permit, authorization, or approval for use of any new, additional, revised, or modified entrances for New Castle County Parcel Numbers 07-032.20-003, 07-032.20-048 through and including 07-032.20-055, 07-032.20-057 and 07-032.30-072 onto or from Route 141 or Route 48, until such time as the Department obtains, reviews, and comments upon a traffic operations analysis for the area, which among other elements addresses (1) the predicted levels of service on intersections, roadways, or the Tyler McConnell Bridge affected by the proposed development of these parcels, and (2) the roadway improvements necessary to accommodate the development of these parcels, based upon the exploratory development plans submitted to the New Castle County Department of Land Use by the developer, as required by the County’s Unified Development Code (UDC). To the extent that any submission of proposed development plans is substantially different than the original exploratory development plans submitted to the County, the Department is further requested to assess the impact of the new submission’s traffic generation upon the local transportation network. The scope of the assessment shall be at the reasonable discretion of the Department.

The projects in question, proposed by Stoltz Real Estate Partners, have been the subject of immense controversy. I don't know how much these two sections will affect consideration of the projects.

The Value of Public-Private Partnerships

2011-06-28T17:15:00.003-04:00

The Caesar Rodney Institute's John Stapleford writes about Bill Wyer's tenure as chair of the Delaware State Chamber of Commerce in a News Journal op-ed critical of public-private partnerships:

Bill was a junkyard dog for business in Delaware. Under his leadership, the chamber fought against any tax increases and invasive regulations, and the encroachment of government into the marketplace.

Actually Bill Wyer makes a splendid poster child for the value of public-private partnerships. Those who remember their Wilmington business history will recall that he was the first managing director of Wilmington 2000, which was created by newly inaugurated mayor Jim Sills in 1993. Wilmington 2000 played a key role in the city's successful efforts to retain and boost downtown jobs by retaining DuPont and bringing MBNA and other financial companies to the city. As a result, Wilmington's wage economy grew by $1 billion during the 1990s, a 50 percent increase.

I worked in the mayor's office at the time, and can testify to what a strong partnership between business and government can achieve in promoting economic development. I've seen what works, and it doesn't resemble the doctrinaire prescriptions of the Tea Party movement. Governor Jack Markell likes to ask business leaders what he can do to make them more successful. This may be part of why Delaware has Fisker Automotive and Bloom Energy moving into sites recently abandoned by GM and Chrysler with funding from Kleiner Perkins, the world's most famous venture capital firm.

Tea Party conservatives and the Caesar Rodney Institute may believe that business and government are by definition adversaries, but my experience working with Bill Wyer taught me that when government and business pull together, great things can happen.

Shale Gas Reserve Projections and Price Forecasts

2011-06-27T06:25:00.004-04:00

The New York Times has published several important articles questioning industry estimates of the amount of natural gas reserves in shale deposits. The first article, accompanied by extensive documentation, offers evidence that the industry has overestimated the size and productivity of shale gas reserves. Another article describes how a change in a rule promulgated by the Securities and Exchange Commission allows natural gas companies to use modeling techniques to claim larger reserves without disclosing their methods.

Today the Times reports that optimistic estimates of natural gas reserves could be affecting government energy projections:

In its annual forecasting reports, the United States Energy Information Administration, a division of the Energy Department, has steadily increased its estimates of domestic supplies of natural gas, and investors and the oil and gas industry have repeated them widely to make their case about a prosperous future.

But not everyone in the Energy Information Administration agrees. In scores of internal e-mails and documents, officials within the Energy Information Administration, or E.I.A., voice skepticism about the shale gas industry.

EIA projections are used to guide policy and planning in government and industry. If shale gas projections are too optimistic, then natural gas price projections will turn out to be too rosy as well. The EIA, in its Annual Energy Outlook 2011, estimates shale gas extraction to grow fourfold over the next 25 years, based on an estimate of 827 trillion cubic feet of technically recoverable reserves.

Natural gas price projections, which have dropped sharply specifically due to higher estimates of the supply, are used to calculate the estimated cost premiums of renewable energy. If the long term projection of natural gas prices goes down, then wind and solar power look more expensive by comparison. The EIA's projects that its most conservative shale gas recovery estimate would result in prices 30 percent higher than its reference case.

Bluewater Wind Contract Terms Extended

2011-06-24T06:50:00.040-04:00

NRG Bluewater Wind yesterday announced that it had agreed with Delmarva Power to postpone payment of security deposits required as part of the power purchase agreement. NRG has cited uncertainty about the restoration of loan guarantees in delaying the construction of a meteorological tower until next year. The News Journal reports that NRG sees some hope that the loan guarantees would be restored:

But NRG officials have one small reason for optimism: The House Appropriations Committee recently voted to restore a fraction of the loan guarantee money for those projects that have already applied.

As the news website Delaware First reports, Governor Markell supports a short delay in the contractual timetable:

Governor Jack Markell’s office is pleased that the extension allows more time to work out the concerns that threaten the project, but spokesman Brian Selander also noted the limited nature of the extension, saying that the Governor did not want an “open ended” timetable.

An indefinite delay in the project could put Delaware at a competitive disadvantage in attracting the supply chain and assembly business that will need to be put in place to build offshore wind projects up and down the east coast. If NRG allows the timetable to slip back another year without a definitive start date, then suppliers would be less likely to set up shop in Delaware.

Bloom Energy and Venture Capital

2011-06-23T06:57:00.019-04:00

Senate Bill 124, which would help bring Bloom Energy to Delaware by including the company's fuel cells in the state's renewable porfolio standard, was released from the House Energy Committee yesterday. The News Journal reports that the Caesar Rodney Institute yesterday continued in its vocal opposition to the deal.

Writing in Town Square Delaware, John Moore of Acorn Energy reviews the deal and thinks it just might work. He also notes that Jack Markell is building ties to west coast venture capital firms:

On the whole I see it as a low cost option on a big opportunity. It seems that Governor Markell has credibility with Silicon Valley venture firms and he is successfully leveraging state and federal subsidies to create economic activity in Delaware.

Silicon Valley venture capital firm Kleiner Perkins has now funded two large industrial enterprises in Delaware: Fisker Automotive and Bloom Energy. Moore notes that Bloom could create spinoff firms as it builds a network of connections between academia and related companies. Bloom Energy will fill in the last link in a chain linking research and development with capitalization and commercial production. Ties to investors that previously never invested in Delaware could help build on the new industries that are locating here.

The Economics of Obesity in Three Charts

2011-06-17T06:24:00.007-04:00

For those who wonder why we have an obesity problem in the U.S., this chart from I found on the Economix blog explains a lot:

Unhealthy foods are becoming cheaper, while healthy foods are getting more expensive. This chart at Lapham's Quarterly illustrates the stark difference in calories purchased for a dollar:

While people point to lifestyle issues, like the number of hours we spend in front of screens, as the cause of rising obesity, it may not be a matter of personal character, but of economically rational behavior on the part of consumers. Whether this represents rational behavior on the part of policy makers is another matter. This chart from the Consumerist, which uses the old food pyramid, provides a clear illustration of how badly skewed our food subsidies are:

I find it particularly distressing that some see obesity among the poor as evidence of their character shortcomings. Given the distorted economics of food in this country, they may be acting rationally in economic terms by buying the most calories for the dollar, even though their purchasing patterns don't optimize long term well being.

How Will Bloom Energy Affect the RPS?

2011-06-16T07:12:00.011-04:00

SB 124, a key part of the package to bring Bloom Energy to Delaware, would include the company's fuel cells in the state's renewable portfolio standard or RPS. The News Journal reports that there is some unease over broadening the renewable portfolio standard to include the fuel cells:

Some observers said lawmakers were creating a dangerous precedent by watering down the definition of a "renewable" energy resource, since the bill applies to fuel cells that use fossil fuels to operate.

"This is sort of a stretch of what is supposed to be renewable energy," said John Austin, a retired environmental scientist living in Rehoboth Beach.

How much of the RPS would be given over to Bloom Energy fuel cells? The bill would cap the allotment for fuel cells under the RPS at 1,152 megawatt hours per day, which would be 3.58 percent of Delaware’s total electricity sales in 2009. The RPS is programmed to grow to 25 percent by 2025, so the bulk of the portfolio would still go to traditional renewables like wind and solar.

The RPS provides for a portfolio of energy sources to meet our needs for cost effective clean energy and help promote new business opportunities in the green tech sector, and no single source can meet all of our policy objectives. Managing a portfolio of renewable energy sources requires tradeoffs among different interests to make the whole thing work. While this is an awkward and somewhat artificial use of the RPS, I have decided I can support the measure.

Deployment of the Bloom Energy Servers will have benefits for the environment and the grid. To the extent that these fuel cells replace coal generation (which provides about one half of our electricity) they will contribute to reductions in air emissions. Bloom Energy’s fuel cells are reportedly more efficient than conventional natural gas turbines, and their ability to be located onsite enhances their efficiency by eliminating the loss of power over transmission lines. By providing distributed baseload power, this technology will alleviate congestion on the grid and reduce our reliance on out of state power. In considering the tradeoffs, I have concluded that the benefits are worth the stretching of the RPS in this case.

Upgrading the Grid

2011-06-14T06:43:00.006-04:00

I sometimes hear the criticism that the upgrades to the grid required to accommodate renewable energy will be too expensive. But the grid is like any complex infrastructure system; it would need to be upgraded even if we didn't bring new energy sources online. The Washington Post reports that the Obama administration is proposing ways to move the electrical grid into the 21st century:

Power utilities spend only 0.2 percent of their revenues on research and development, less than any other industry except papermaking, said Massoud Amin, a University of Minnesota professor who has long promoted upgrading the power system.

One consequence is increased power outages. From 2000 to 2004, the United States experienced 149 blackouts, each of which affected at least 50,000 people. From 2005 to 2009, that figure more than doubled, to 349, according to Energy Department data.

A smarter grid that would more efficiently dispatch renewable energy would also help reduce the number of outages. It would particularly benefit customers on the east coast, where population density and congestion force us to pay higher prices than much of the rest of the country. By the way, one appealing feature of the Bloom Energy fuel cells is that they can provide reliable, on site generation for large energy users, reducing the need to dispatch power over the grid.

Bloom Energy Coming to Delaware

2011-06-10T06:20:00.006-04:00

A decade into the 21st century, Delaware is placing a big bet on clean, high tech energy. Bloom Energy, which makes sleek, highly efficient fuel cells, announced yesterday that it is setting up a manufacturing facility on the old Chrysler site in Newark. The company will eventually employ 900 workers, and its suppliers may add another 600 jobs on the site.

The fuel cells, called Bloom Energy Servers or Bloom Boxes, combine fuel such as methane with air to directly generate electricity. These fuel cells are already online providing power to customers such as Google, Adobe and CalTech.

I spoke to a session of Leadership Delaware yesterday on the economics of renewable energy. The fellows, who had been listening to speakers on energy all day, had not heard the news when I stood up around 4:30. Two minutes into my talk, I could make the point that clean energy is not a dream, but a reality, which will bring jobs and other economic benefits to Delaware.

This is what a clean energy future looks like. Delaware has no energy resources other than sunlight and wind, and thus has no economic interest in relying on coal power from out of state. Coal burned here or to our west produces pollutants like SOx, NOx and particulate matter that degrades our health.

I'm sitting on a panel on green energy as part of today's Governor's Entrepreneurial Business Conference in Wilmington. (It's a great panel that includes Dr. Michael T. Klein and Dan Rich of the University of Delaware and John Moore of Acorn Energy.) The discussion won't just be theoretical; we will be able to talk about real opportunities in the very near future. In the effort to replace 19th energy with 21st century technology, it make sense for Delaware to place its bet on clean energy.

Why Maintain the Tax Breaks for Big Oil?

2011-06-08T17:28:00.002-04:00

Writing for Fortune, columnist Dan Primack says it's time to end the tax breaks for oil companies:

For too long we've heard petroleum advocates say that solar, wind, and biofuel are failed experiments. They've had their chance, but have been unable to demonstrate cost-effectiveness.

What this ignores, of course, is that American oil and gas companies have had a century of built-in advantages. For example, they are allowed to deduct "intangible drilling costs" -- including labor and drilling fluids -- the moment a well is tapped (even if it proves to be dry). And then there's the "depletion allowance," which allows certain extractors to shelter around 15% of a well's production from the IRS. And deductions for royalties paid to foreign governments. And the oil and gas liability cap that remains at just $75 million, more than a year after the BP (BP) rig explosion. Then there's Section 199, which allows profitable oil and gas companies to deduct 6% of net income.

Yes there are incentives for renewable energy, but these are dwarfed by federal subsidies for fossil fuels.

Primack also points out that renewable energy incentives tend to be short lived, like the loan guarantees for wind power that were yanked earlier this year. In contrast, similar loan guarantees for nuclear power have gone begging for six years. He makes the case that renewable energy advocates should embrace the elimination of all energy subsidies.

I don't agree. Even if all federal subsidies for fossil fuels were to disappear, the enormous negative externalities of coal would still not be priced into the market. But Primack does make a persuasive case for making the playing field more level.

The Economic Impact of the High Line

2011-06-06T17:08:00.002-04:00

I first wrote about the elevated park in New York City called the High Line in 2005, and described my first visit to the park in 2009.

The New York Times reports on the economic impact of the still unfinished High Line, which has become a classic example of how investment in public amenities can spur private investment:

A decade ago, so many moneyed interests were united against saving the elevated freight tracks that cut through the West Side of Manhattan that the idea appeared to be doomed. Owners of land and buildings throughout Chelsea wanted the decaying High Line viaduct razed, and the administration of Mayor Rudolph W. Giuliani supported their feelings.

But on Friday afternoon, there was Mr. Giuliani’s successor, Michael R. Bloomberg, proclaiming that preserving the High Line as a public park revitalized a swath of the city and generated $2 billion in private investment surrounding the park.

The mayor pointed to the deluxe apartment buildings whose glass walls press up against the High Line and the hundreds of art galleries, restaurants and boutiques it overlooks. All of that commerce more than makes up for the $115 million the city has spent on the park and the deals it has made to encourage developers to build along the High Line without blocking out the sun, Mr. Bloomberg said. On top of the 8,000 construction jobs those projects required, the redevelopment has added about 12,000 jobs in the area, the mayor said.

I've been up on the High Line twice, and found the park crowded with neighborhood residents and tourists. Gleaming residential towers and revived brick tenements flank the park. It's one of most unusual and most successful parks I've ever seen.

Why Not Use Unclaimed Nuclear Loan Guarantees for Wind Power?

2011-06-02T06:09:00.005-04:00

Last week NRG cited the end of loan guarantees for wind power as a reason for delaying the construction of a meteorological tower for the Bluewater Wind project. In response, Tom Carper and Chris Coons signed a letter announcing their intention to restore the loan program:

If there was $8 billion available in loan guarantees, which would require an appropriation of $80 million, the Department of Energy would be able to facilitate the financing of the first substantial tranche of offshore wind projects in this country.

Having thought about where the funding could be found, I fired off this letter to our congressional delegation:

Dear Senator Carper, Senator Coons and Congressman Carney:

I propose that unclaimed nuclear power loan guarantees be repurposed for wind power. As you know, NRG cited the lack of funding for loan guarantees as a reason to delay the Bluewater Wind project, specifically the meteorological tower, which was scheduled to be erected this year.

According to the New York Times, half of the funds for nuclear loan guarantees have not been claimed six years after the program was created:
WASHINGTON — In an effort to encourage nuclear power, Congress voted in 2005 to authorize $17.5 billion in loan guarantees for new reactors. Now, six years later, with the industry stalled by poor market conditions and the Fukushima disaster, nearly half of the fund remains unclaimed. And yet Congress, at the request of the Obama administration, is preparing to add $36 billion in nuclear loan guarantees to next year’s budget.

Even supporters of the technology doubt that new projects will surface any time soon to replace those that have been all but abandoned.
I propose that some of these funds be repurposed to support offshore wind power. In contrast to the nuclear industry, wind power projects are moving ahead despite the lack of a long-term commitment from the federal government. Only one nuclear power project has progressed far enough in the last six years to make a successful application for an $8.8 billion loan guarantee. The same amount would help finance wind power projects up and down the east coast.

By shifting a portion of the loan guarantee program from nuclear to wind power, the federal government could offer meaningful support to this promising industry at no new cost to taxpayers.

Sincerely,

Thomas Noyes

The True Cost of Electricity

2011-05-31T07:50:00.001-04:00

The News Journal today published an op-ed I wrote on all of the costs of the electricity we buy:

Consider health costs in energy planning
Tom Noyes

Delmarva Power's Integrated Resource Plan (IRP), now being reviewed by the Public Service Commission (PSC), includes a projection of the economic benefits of using more renewable energy to generate electricity for Delaware -- and it's a big number.

The benefits of current plans to shift from coal to renewable energy are estimated to be $1.8 billion to $4.3 billion over the next 10 years.

That's roughly $2,000 to $4,750 in reduced health and mortality costs for every Delaware resident between now and the year 2020.

These benefits are attributed to Delaware's Renewable Portfolio Standard, the Energy Efficiency Resource Standard, the Regional Greenhouse Gas Initiative (RGGI), the planned Bluewater Wind offshore wind project, other renewable energy sources and a reduction in emissions from coal-burning power plants in and around Delaware.

Significant numbers of Delawareans will remain healthy and live longer over the next 10 years because power plants will be spewing less nitrous oxide, sulfur dioxide and particulate matter into the air we breathe.

The Delaware Chapter of the Sierra Club has intervened in this docket to make the case for including the calculation of health benefits as an integral part of our energy planning.

Ken Kristl of the Environmental and Natural Resources Law Clinic at the Widener University School of Law is representing the Sierra Club.

Until now, the PSC has considered only the cost of our utility bills -- and not the cost of our medical bills -- when reviewing plans to meet our energy needs.

This innovation in energy planning was prompted by Gov. Jack Markell, who two years ago called for a "level playing field for clean energy" by including all of the costs and benefits in PSC proceedings.

These new figures give us a clearer picture of what a level playing field would look like.

The IRP's projected health benefits of renewable energy come to 12 percent to 30 percent of Delaware's retail electricity sales.

In contrast, I calculate that the Regional Greenhouse Gas Initiative and the Renewable Portfolio Standard together will add less than a percentage point to our electricity bills.

Bluewater Wind is projected to add about one half of 1 percent to our bills -- if fossil-fuel prices don't increase too much over the life of the project. When you compare such modest costs to the enormous benefits of cleaner air, renewable energy looks like a pretty good bargain.

But after all the number crunching, it's worth remembering that our energy policy is not just about economics; it's about fewer chest X-rays and cancer cases and longer and healthier lives.

For those seeking to roll back these clean-energy policies, I ask: How much of these benefits would you have us give back? How much more spending on lung disease and cancer should we be willing to tolerate?

Given the size of the benefits, why should we accept even a short-term delay in shifting from coal to renewable energy?

Three years ago, we rallied around the plan to build offshore wind power in Delaware. Now that we have a more complete picture of the economics, we should reaffirm our commitment to promoting renewable energy -- and to providing cleaner air for all of us to breathe.

"The last full measure of devotion"

2011-05-30T06:05:00.006-04:00

On Memorial Day, it is a TommyWonk tradition to ponder the words of the Gettysburg Address. Students of history are surprised to learn that there are several versions of the address; we are not entirely sure of the precise words Lincoln used. Here is the text of the Bliss Version (with links to readings by Sam Waterston, Jeff Daniels and Johnny Cash):

Fourscore and seven years ago our fathers brought forth on this continent a new nation, conceived in liberty and dedicated to the proposition that all men are created equal. Now we are engaged in a great civil war, testing whether that nation or any nation so conceived and so dedicated can long endure. We are met on a great battlefield of that war.

We have come to dedicate a portion of that field as a final resting-place for those who here gave their lives that that nation might live. It is altogether fitting and proper that we should do this. But, in a larger sense, we cannot dedicate, we cannot consecrate, we cannot hallow this ground. The brave men, living and dead who struggled here have consecrated it far above our poor power to add or detract.

The world will little note nor long remember what we say here, but it can never forget what they did here.

It is for us the living rather to be dedicated here to the unfinished work which they who fought here have thus far so nobly advanced. It is rather for us to be here dedicated to the great task remaining before us -- that from these honored dead we take increased devotion to that cause for which they gave the last full measure of devotion -- that we here highly resolve that these dead shall not have died in vain, that this nation under God shall have a new birth of freedom, and that government of the people, by the people, for the people shall not perish from the earth.

While we're on the subject, it's worth taking a look at the infamous Powerpoint version, a lesson in how to take a powerful message and reduce it to mush.

Wilmington’s annual Memorial Day parade is always held on May 30, which this year just happens to fall on the observed holiday. The parade begins at six o’clock this evening, starting near Rockford Park, and marching down Delaware Avenue to the Soldiers & Sailors Monument at Broom Street.

Setbacks for Renewable Energy in Delaware and New Jersey

2011-05-27T06:28:00.006-04:00

Yesterday the News Journal reported that NRG is slowing its timetable for the Bluewater Wind project. A meteorologic tower to gather data on wind patterns and bird migration, will not go up this year as planned. NRG cited the defunding of a federal loan guarantee program as reason for delaying the project. Governor Markell was not shy in showing his impatience with NRG on the news:

Gov. Jack Markell said it would be unwise to spend years waiting for the political climate to improve, noting the state has worked hard to smooth Bluewater's path to construction.

"The announcement puts the project's future into question," Markell said. "If they think they can't build it without the guarantee, then it makes sense to see who might."

NRG has not yanked its funding of Bluewater, which continues to work on permits and procurement.

Governor Chris Christie announced today that he was pulling New Jersey out of RGGI, the Regional Greenhouse Gas Initiative. Killing RGGI has emerged as a top priority for the Tea Party. In announcing his decision, Christie said he believes that climate change is real, but that the program wasn't effective, perhaps because the governor had raided the funds to pay for general operating expenses:

But several states, including New Jersey, have raided their portion of the proceeds to fill budget gaps. Christie took $65.2 million from the state’s Global Warming Solutions Fund to balance the current budget.

As of last August, participating states had invested 63 percent of RGGI auction proceeds in programs to improve energy efficiency and accelerate the use of renewable energy technologies, according to the intiative’s website.

Christie complained that the program wasn't effective. Perhaps RGGI would be more effective if the proceeds were used for their intended purpose.

As for the cost, Christie acknowledged that it actually isn't that great a burden on ratepayers:

But when asked what the savings from backing out of RGGI would be for consumers, Christie said: "I don’t want to overplay that because we’re not talking about a huge difference."

Here in Delaware, RGGI costs the average household 38 cents a month, 0.285 percent of electricity bills. When asked about his decision by the News Journal, John Kowalko called Christie an "environmental neanderthal."

Another Report on the Costs of Coal Power

2011-05-25T06:45:00.003-04:00

A new report from the Chesapeake Bay Foundation provides another example of how coal power comes with costs that don't show up on customers' utility bills. The Williamsburg Yorktown Daily has the story:

The Old Dominion Electric Cooperative plans to build a $20 million, 1,500-megawatt power plant in the town of Dendron, which ODEC [Old Dominion Electric Cooperative] argues will bring jobs and much-needed revenue to the area. Monday’s CBF report, "A Coal Plant’s Drain on Health and Wealth," uses data supplied by ODEC to the US Environment Protection Agency on pollution generated by the plant’s 650-foot smokestacks. The report estimates that health-related costs generated by the plant could top $200 million each year.

The report, "A Coal Plant's Drain on Health and Wealth," projects that the new coal power plant would lead to "442 asthma attacks, as well as 3,340 work days lost to sickness, 40 heart attacks, and an estimated 26 premature deaths" annually.

These findings square with a Harvard study, titled “Full cost accounting for the life cycle of coal,” which was recently published in the Annals of the New York Academy of Sciences. The authors calculate the externalities (environmental and health costs) of coal power to be $345.3 billion annually

Delmarva Power's Integrated Resource Plan (IRP), now before the Public Service Commission, projects the benefits of current plans to shift from coal to renewable energy to be $1.8 billion to $4.3 billion over the next ten years. That's $2,000 to $4,750 for every Delaware resident, and 12 percent to 30 percent of retail electricity sales in Delaware. The PSC has extended public comment period on the IRP to May 31, and will likely hold hearings on the plan afterwards.

Should Bondholders Be Insulated from Risk?

2011-05-23T07:09:00.002-04:00

New York Times columnist Floyd Norris has the story of Japanese bankers balking at the prospect of taking a loss on loans to Tepco:

The president of Japan’s largest bank, Mitsubishi UFJ Financial, was shocked by the very idea that a bank should lose money if it lent to a company that could not meet its obligations. Mr. Edano’s remarks “came out of the blue,” said the executive, Katsunori Nagayasu. “I felt there was something wrong about them.”

To Yasuchika Hasgawa, the chief executive of the Takeda Pharmaceutical Company and chairman of the Japanese Association of Corporate Executives, the idea violated basic tenets of society. Mr. Hasgawa said he “cannot help but question how this country’s democracy can be made to work with free-market-based capitalism.”

His definition of “free-market-based capitalism” seems to assume that lenders should escape without pain, at least if they are lending to major institutions. It is an idea that has become remarkably pervasive.

“We consider banks and Tepco systemically important institutions,” wrote Tetsuya Yamamoto, a Moody’s analyst based in Tokyo. “Debt forgiveness undermines the systemic importance of the bank and utility sectors in the national economy.” These are, he added, “developments we did not anticipate.”

While we might shake our heads in wonder at the wacky Japanese, I can think of two examples closer to home of bondholders arguing for immunity from risk.

In 2009 investors complained that their contractual rights were being violated in the Chrysler and GM bankruptcy proceedings. Some, including Indiana state treasurer Richard Mourdock, sued to halt the proceedings, based on the belief that their rights as bondholders trumped the contractual rights of workers and suppliers.

With a debt crisis at hand, a significant portion of Republican lawmakers are arguing that the U.S. can avoid default for a time by paying bondholders and delaying the payment of other obligations such as Social Security. Talking Points Memo reports that Senator Pat Toomey, a former bond trader, thinks we can avoid a crisis by "prioritizing" the government's obligations:

Toomey's preference would be for the Treasury to avoid defaulting altogether by prioritizing outlays of incoming revenue on interest payment to U.S. debt holders -- thus slashing spending on a host of other obligations, including, perhaps, Social Security benefits, vendor reimbursements, and the military.

Prioritizing is what bankruptcy courts do. In each case, we see the argument that investors should be immune to risks that everyone else should bear.

TommyWonk at Town Square Delaware

2011-05-19T06:33:00.004-04:00

Town Square Delaware has published my first piece; it's on the economics of renewable energy.

When Delaware was debating the Bluewater Wind project, the opponents of wind power offered big estimates of the so-called green premium we would be forced to pay if the project went forward. One prominent legislator spoke darkly of electric bills going up by as much as $75 a month. As it turned out, the final Public Service Commission estimate of the cost of the Bluewater Wind project was 0.07 cents a kilowatt hour, which would come to not much more than a dollar a month for the average Delaware household using 1,550 kilowatt hours a month.

Why rehash this old argument? Because we’re hearing it again.

More specifically, we heard it last week when HB 86, which would have pulled Delaware out of the Regional Greenhouse Gas Initiative, was debated. As I and others have pointed out, RGGI costs the average household about 38 cents a month—about 0.285 percent of household electricity bills. Happily, HB 86 was kept in committee. But we can expect the opponents of renewable energy to keep trying to kill programs using the same arguments.

Also worth a read is Michael Stafford's piece, "Ryan, Rand, and the Objectivist Budget," in which he neatly dismantles the thinking behind the House Republican's budget, and with footnotes.

Welcome Town Square Delaware

2011-05-16T06:36:00.004-04:00

Town Square Delaware, a new opinion site, has gone live this morning. Here's how the editors describe the new site:

We are a group of community-minded Delawareans interested in creating a forum for the most productive, provocative and positive dialogue about the issues, people and places that make our state unique. Our goal is to engage and educate, to collaborate and connect. To be, first and foremost, of, for and about Delaware. Join the conversation!

Town Square Delaware features a terrific collection of contributors and including veteran bloggers Dave Burris, Charlie Copeland, Maria Evans, Mike Matthews (first post: "Greetings From A Disaffected Former Blogger"), Jason Scott and Michael Stafford. Also joining up are Michael Fleming, Ken Grant, Al Mascitti and Sam Waltz. I'll be adding my thoughts from time to time. So head on over, and tell 'em Tommywonk sent you.

House Bill 86 Kept in Committee

2011-05-12T08:15:00.000-04:00

House Bill 86, which would have pulled Delaware out of the Regional Greenhouse Gas Initiative (RGGI), failed to make it out of committee today. After nearly two hours of spirited and sometimes heated debate, the House Energy Committee voted against moving the bill to the House floor.

Actually there were two votes. A vote to release the bill to the House floor failed 3 to 4. Then a motion to table the bill passed 4 to 3.

The room was packed with environmental advocates and opponents of RGGI, who were led by the Caesar Rodney Institute and the 9/12 Delaware Patriots. Lots of numbers were thrown around, and the opponents warned of the enormous costs of participation in RGGI. But these dire predictions of high costs have not yet come true. Last year RGGI cost residential customers an average of 38 cents a month, only 0.285 percent of the average bill.

Is RGGI a Threat to Freedom?

2011-05-10T06:34:00.002-04:00

Aaron Nathans, reporting on House Bill 86 in the News Journal, quotes John Nichols, a supporter of the bill, which would terminate Delaware's participation in RGGI, the Regional Greenhouse Gas Initiative:

John Nichols, a citizen activist supporting the repeal bill, said the initiative cedes government power to nongovernmental agencies like RGGI and the SEU. Those groups, he said, are "a threat to freedom and liberty."

And what is the cost of this threat to freedom? Nathans reports that RGGI currently costs 38 cents per household per month. That's 0.285 percent of the average residential electricity bill in Delaware. I've grown used to hearing inflated estimates of the cost of renewable energy, but this is the first time I have heard anyone say that 38 cents a month represents a threat to liberty.

HB 86 comes up before the House Energy Committee tomorrow at 4:00.

House Energy Committee To Consider House Bill 86 Wednesday

2011-05-09T06:25:00.007-04:00

House Bill 86, which would pull Delaware out of the Regional Greenhouse Gas Initiative (RGGI), will be taken up at a hearing of the House Energy Committee on Wednesday, May 11 at 4:00 PM.

HB 86 was introduced by Representative Jack Peterman. He is supported in this by the Caesar Rodney Institute (CRI), the 9/12 Delaware Patriots and other forces seeking to turn back the clock on clean energy and environmental protection in Delaware. This effort also involves out of state organizations like the State Policy Network (which provides funding to the CRI) and the American Tradition Institute, which is financing lawsuits challenging the constitutionality of renewable energy laws across the country.

The members of the House Energy Committee are listed below:

Chairman: John A. Kowalko
Vice-Chairman: Dennis E. Williams
Debra J. Heffernan
S. Quinton Johnson
Harvey R. Kenton
Nick T. Manolakos
Michael P. Mulrooney
William R. "Bobby" Outten

RGGI is not just about climate change, although Delaware is uniquely vulnerable to even a modest amount of sea level rise. RGGI funds programs that support energy efficiency and renewable energy programs that have immediate and tangible benefits right here in Delaware.

The projected economic benefits of shifting from coal power to renewable energy are enormous: $1.8 billion to $4.3 billion in reduced health and mortality costs over the next ten years. That’s roughly $2,000 to $4,750 for every Delaware resident. These projected benefits represent 12 percent to 30 percent of Delaware’s 2008 retail electricity sales—far more than RGGI and Delaware’s other renewable policies and programs. And these benefits do not include the development of green industry in Delaware.

These figures come from Delmarva Power, which is required to submit an Integrated Resource Plan (IRP) to the Public Service Commission (PSC) every two years. The draft IRP estimates the environmental impact of Delaware’s Renewable Portfolio Standard, the Energy Efficiency Resource Standard, the state’s participation in the Regional Greenhouse Gas Initiative (RGGI), the planned Bluewater Wind project, other renewable energy sources coming on line, and a sharp reduction in emissions from coal burning power plants in Delaware.

There is nothing subtle about the organized opposition to renewable energy in Delaware. The groups mobilizing to oppose RGGI are also opposed to renewable portfolio standards and offshore wind. I expect that HB 86 will not be the last bill introduced to turn back the clock on clean energy in Delaware.

The CRI Raises the Alarm on RGGI

2011-05-05T18:25:00.002-04:00

The Caesar Rodney Institute (CRI) is raising the alarm. I got an e-mail alert yesterday that the governor is talking to legislators:

The battle over Delaware's destructive cap and trade tax has reached a new level, with Governor Markel [sic] now personally making phone calls to legislators asking them to defeat House Bill 86.

That's the report we just received from a member of the Delaware House committee that's considering the bill, and it's why we are issuing this urgent appeal for help from our friends and supporters.

That governor! Talking to legislators? Will he stop at nothing?

House Bill 86, which would terminate Delaware’s participation in the Regional Greenhouse Gas Initiative (RGGI), will be taken up by the House Energy Committee on Wednesday, May 11 at 4:00 PM.

The CRI has made this a top priority:

Passage of HB 86 would be a defeat for radical environmental extremists and their legislative allies who have blindly followed the "Green" agenda. It would be a victory for sensible environmental policies rooted in valid science and common sense.

By "radical environmental extremists" the CRI would mean me. But the insidious tentacles of cap and trade reach much further—all the way to the Republicans who created the market-based approach that successfully reduced the SO2 emissions that caused acid rain.

I don't have much of an idea what the CRI means by "sensible environmental policies," since I haven't seen them actually propose any.

The CRI has been making robocalls on the issue since last week. If you agree with paying higher energy bills because of cap and trade, you are instructed to press one, and the call is terminated. If you want to end cap and trade, you press two, and you are connected to a receptionist or legislative aide. I don't know how much real effect these calls are having, since legislative aides can smell a robocall a mile away.

If you want to know how to fight back against the forces working to kill RGGI in Delaware, visit the new Delaware Environmental Summit website.

Lifting the National Mood

2011-05-02T17:10:00.004-04:00

The news that U.S. forces had killed Osama bin Laden punctuates a decade of seeming futility for our country. Prompted by bin Laden's terrorism, we plunged into two wars in which progress has come slowly if at all. We have had a decade of near zero job growth accompanied by ballooning budget deficits. Yet, with our president beset with deficits, joblessness and two wars, we found ourselves debating the bizarre assertion that he wasn't actually a citizen. Meanwhile Congress is having a serious discussion of whether our national government should make good on its debt obligations.

We can hope that the success in finding and killing bin Laden will help break the stifling can’t-do atmosphere that has descended on Washington and the country.

Growing up, I imagined the 21st century to be a time of possibility and progress, not of dread and discouragement. I imagined a time when we would use science to travel into space, build beautiful new cities and clean up our environment. Maybe now, with the man who launched the 9/11 attack now buried at sea, we can begin to lift our sights and get back to building our future.

Federal Nuclear Guarantees Going Begging

2011-04-29T06:54:00.005-04:00

I have written before that the nuclear power industry still requires subsidies to cover its enormous environmental and financial risks. But even with a big pot of money for loan guarantees, the industry may still not be economical. The New York Times reports that most of a multi-billion pot to support nuclear power is being left on the table:

WASHINGTON — In an effort to encourage nuclear power, Congress voted in 2005 to authorize $17.5 billion in loan guarantees for new reactors. Now, six years later, with the industry stalled by poor market conditions and the Fukushima disaster, nearly half of the fund remains unclaimed. And yet Congress, at the request of the Obama administration, is preparing to add $36 billion in nuclear loan guarantees to next year’s budget.

It's one of the rare instances of government money going begging:

Only $8.8 billion of the 2005 guarantee has been allocated — to a twin reactor project in Georgia. Ground has been broken on the fourth candidate, a twin reactor project in South Carolina, but its sponsors may get a better deal in the commercial finance market.

Supporters of the guarantees claim the cost to the government is very small:

A federal loan guarantee is a little like a parent co-signing a child’s car loan; if the child makes the payments, the parent pays nothing. Under the 2005 law, borrowers pay a lump sum to the government to compensate the Treasury for the risk it is undertaking, and if the companies finish the projects and can pay back the loans, the government makes a profit.

The precise shape of new loan guarantees is uncertain, but when “scoring” the provisions for the purpose of calculating their expense, the White House says they cost nothing, and Congress assumes they cost 1 percent of the face value. But they are not without risk.

If the builders default, as happened on some nuclear construction projects in the 1980s, the taxpayer liabilities could run into the billions of dollars.

The loan guarantees cover 80 percent of construction costs, but the industry is still having trouble finding investors to cover the other 20 percent.

Obama Pushes to End Oil and Gas Subsidies

2011-04-26T17:30:00.007-04:00

For reasons passing understanding, our federal government subsidizes the fossil fuel industry, as President Obama pointed out in a letter to Congressional leaders today:

While there is no silver bullet to address rising gas prices in the short term, there are steps we can take to ensure the American people don’t fall victim to skyrocketing gas prices over the long term. One of those steps is to eliminate unwarranted tax breaks to the oil and gas industry and invest that revenue into clean energy to reduce our dependence on foreign oil. Our outdated tax laws currently provide the oil and gas industry more than $4 billion per year in these subsidies, even though oil prices are high and the industry is projected to report outsized profits this quarter.

Obama took note of the fact that John Boehner just said he might consider cutting these subsidies:

I was heartened that Speaker Boehner yesterday expressed openness to eliminating these tax subsidies for the oil and gas industry. Our political system has for too long avoided and ignored this important step, and I hope we can come together in a bipartisan manner to get it done.

Obama gets it right in proposing that subsidies can be better used to promote 21st century clean energy technology. Nothing I have read in economics or corporate strategy suggests that fossil fuel subsidies actually increase the supply of fossil fuels.

RGGI Is Not Causing High Energy Costs

2011-04-22T09:43:00.001-04:00

The News Journal has published an op-ed by Dr. Chad Tolman on the Regional Greenhouse Gas Initiative and the science of climate change:

Emissions-control program not to blame for high energy costs

The April 14 opinion piece by State Rep. Jack Peterman, like his recently introduced bill -- saying that Delaware should withdraw from the Regional Greenhouse Gas Initiative -- is based on bad science, bad economics and misleading statements.

While he doesn't say so, like the Caesar Rodney Institute he quotes, he denies the science of climate change, which is now generally accepted by the best climate scientists.

The U.S. National Academy of Sciences recently issued a report titled "Climate Stabilization Targets: Emissions, Concentrations and Impacts Over Decades to Millennia." The summary in an accompanying booklet, "Warming World: Impacts by Degree," says, "The impacts of human activities -- particularly emissions of carbon dioxide ... are so vast that they will largely control the future of the Earth's climate system. This future could ... deliver an extreme change from today's climate to entirely different climate conditions that will last many thousands of years. The eventual course of the climate system over millennia will be determined largely by the actions taken this century."

Keep in mind that Delaware is very vulnerable to sea-level rise -- both because the land is sinking and because Delaware has the lowest average elevation of any state in the country. Sea-level rise might be 5 feet (1.5 meters) in the coming century, and could be more. Rep. Peterman's constituents in coastal communities along the Delaware Bay in his District 33 should be concerned about that.

Rep. Peterman's bill, HB 86, says that Delaware has 50 percent higher electricity costs, that employers leave the state for that reason, and that Delaware homeowners pay about $500 per year in higher energy costs -- implying that RGGI is to blame. In fact, during the last three auctions of carbon-dioxide emission allowances under RGGI, the market price has been less than $2 per ton of CO2. That corresponds to about 0.2 cents per kilowatt-hour for electricity produced from coal and about 0.1 cents per kilowatt-hour for electricity from natural gas. These are about 1 percent of the retail cost of electricity -- about 15 cents per kilowatt-hour from Delmarva Power for residential customers -- adding less than $1 a month to a typical home electricity bill.

That money is used to help weatherize homes, buy more energy-efficient appliances and promote renewable energy development -- especially solar power.

The main reason for higher electricity costs in Delaware is the lack of adequate generating capacity in the state and the need to bring in electricity over congested power lines.

The problem would be eliminated with sufficient development of our abundant renewable energy in the form of offshore wind and solar power -- which the Caesar Rodney Institute opposes. Apparently it wants to see as much fossil fuel burned as possible.

Rep. Peterman, like the Caesar Rodney Institute, chooses to ignore the health and environmental benefits of moving from burning fossil fuels to using renewable energy sources. A recent complete life-cycle analysis of the real cost to citizens of burning coal for electrical power ("Full cost accounting for the life cycle of coal," by Paul Epstein and others) found a best estimate of 17.8 cents per kilowatt-hour for the health and environmental damage of burning coal for electricity.

Rep. Peterman also ignores the great work that Gov. Jack Markell, Alan Levin of the Delaware Economic Development Office and Collin O'Mara of the Department of Natural Resources and Environmental Control have been doing to bring new green industries and jobs to Delaware.

That's where the future is -- not with the old energy technology of the past century. We should be supporting the governor in moving forward -- not moving backward. For this reason, we should reject HB 86.

The League of Women Voters of Delaware, the Delaware Chapter of the Sierra Club, the Delaware Nature Society and Delaware Audubon Society all support an active and comprehensive energy/climate change plan that can make Delaware the First State in the coming green energy economy. Join us.

Is Wind Power a Mature Industry?

2011-04-21T18:01:00.004-04:00

The Caesar Rodney Institute (CRI) today sent me its latest bit of analysis, which purports to show that wind power is a mature industry, and thus not deserving of government incentives. Prompted by this startling news, I checked the numbers from the Energy Information Administration website: Wind power provided 1.8 percent of our electricity in the U.S. in 2009; offshore wind power provided exactly 0.0 percent.

Instead of looking at generating capacity in place, the CRI chose to focus on new capacity being built. The CRI asserts that because wind accounted for 35 percent of new generating capacity built since 2007, it is a mature industry. This would be like asserting that desktop computers was a mature industry in the early 1980s, or that jet airliners was a mature industry in the early 1950s.

This is but the latest in a series of preposterous pronouncements on renewable energy, such as the assertion that wind power could actually be bad for the environment.

The CRI's concern for energy subsidies hardly seems even-handed. The organization neglected to offer a word of support for Congressman John Carney when he introduced a bill to cut a modest $50 million in subsidies for the oil and gas industry.

What the S&P Rating Announcement Means

2011-04-19T07:06:00.005-04:00

With all the attention being given to the Standard & Poors (S&P) announcement on the U.S. debt, it's useful to read the release itself. S&P hasn't lowered its rating of U.S. debt, but has placed it on watch with a negative outlook, meaning that the AAA rating could be lowered in the future. This paragraph sums up the risk:

We believe there is a material risk that U.S. policymakers might not reach an agreement on how to address medium- and long-term budgetary challenges by 2013; if an agreement is not reached and meaningful implementation is not begun by then, this would in our view render the U.S. fiscal profile meaningfully weaker than that of peer 'AAA' sovereigns.

And this paragraph sums up what the federal government would need to do to restore the stable outlook:

Some compromise that achieves agreement on a comprehensive budgetary consolidation program--containing deficit-reduction measures in amounts near those recently proposed, and combined with meaningful steps toward implementation by 2013--is our baseline assumption and could lead us to revise the outlook back to stable. Alternatively, the lack of such an agreement or a significant further fiscal deterioration for any reason could lead us to lower the rating.

S&P was careful to point out that it doesn't have an opinion on how the deficit should be reduced. The rating agency's interest is in measuring the likelihood that the federal government will continue to make payments on its debt.

E.J. Dionne on America's Elites

2011-04-18T06:28:00.001-04:00

E.J. Dionne looks with rare moral clarity at the distance between America's elites and the rest of society:

Listen to David Cay Johnston, the author of “Free Lunch” and a columnist for Tax Notes. “The effective rate for the top 400 taxpayers has gone from 30 cents on the dollar in 1993 to 22 cents at the end of the Clinton years to 16.6 cents under Bush,” he said in a telephone interview. “So their effective rate has gone down more than 40 percent.”

He added: “The overarching drive right now is to push the burden of government, of taxes, down the income ladder.”

And you wonder where the deficit came from.

If the ruling class were as worried about the deficit as it claims to be, it would accept that the wealthiest people in society have a duty to pony up more for the very government whose police power and military protect them, their property and their wealth.

The headline of Dionne's column is "America's elites have a duty to the rest of us." Why is this such an odd sounding idea?

John Carney and Fossil Fuel Subsidies

2011-04-16T09:54:00.002-04:00

It's good to know that John Carney can show a little good humor these days. A story in the News Journal catches him letting off a little steam:

The fiscal 2011 spending issue, he said, "should have been put to bed weeks ago" so lawmakers could move on to the more difficult and significant issue of next year's budget. Republicans were trying to insert a "right-wing conservative social agenda" into the spending bill and creating "one more roadblock to doing the business we were sent here to do."

He paused to catch his breath.

"Everything else is fine," he said, laughing.

I like it that he proposed taking even a small step towards cutting the pointless subsidies for fossil fuels:

Carney has introduced two proposals as the lead sponsor. One would create a national park in Delaware. The other was an unsuccessful measure to eliminate $50 million for oil and gas research and development. President Barack Obama's proposed fiscal 2012 budget supported eliminating the oil and gas money, but the measure was opposed by 82 Democrats.

"My takeaway from that is that the oil and gas industry has a lot of people doing their bidding," Carney said. "It just kind of shows you what we're up against in terms of moving towards energy independence and in terms of addressing climate change."

Given the mood for cutting the deficit, I see no justification for continuing subsidies for a mature and immensely profitable industry.

Energy Issues in Delaware

2011-04-14T17:29:00.009-04:00

I thought it would be useful to review the various energy issues being debated in Delaware, mostly out of the public eye.

The Renewable Energy Task Force yesterday reviewed a study estimating the number jobs being created or sustained by the solar component of the Renewable Portfolio Standard or RPS. By nurturing steady growth in the industry, Delaware should reap $304 million to $681 million in total economic output in the next ten years.

The Caesar Rodney Institute has engaged the American Tradition Institute to conduct a study of the economic costs of Delaware's RPS. I don't expect the study to offer a favorable view of the policy; the American Tradition Institute maintains that renewable energy standards violate the Commerce Clause of the U.S. Constitution.

House Bill 27 would dilute the RPS for the Delaware Electrical Coop and the municipal energy companies by allowing them to count progress on the Energy Efficiency Resource Standard towards the RPS. Delmarva Power would still have to meet both standards separately. A House Energy Committee hearing on HB 27 was cancelled after the sponsor agreed to table the measure for the time being.

HB 86, introduced earlier this week, would pull Delaware out of the Regional Greenhouse Gas Initiative or RGGI. Yesterday the News Journal published an op-ed by the bill's sponsor, Representative Jack Peterman, which opens with the observation that support for cap-and-trade cost Mike Castle a Senate seat. HB 86 wil likely be taken up by the House Energy Committee when legislators return from their two week break.

The most significant finding on the costs and benefits of renewable energy is found in Delmarva Power's Integrated Resource Plan (IRP), now being reviewed by the Public Service Commission. According to the IRP, the benefits of current plans to shift from coal to renewable energy are estimated to be $1.8 billion to $4.3 billion over the next ten years. That's $2,000 to $4,750 for every Delaware resident, and 12 percent to 30 percent of retail electricity sales in Delaware. The PSC has extended public comment period on the IRP to May 31, and will likely hold hearings on the plan afterwards.

Could Natural Gas Be as Dirty as Coal?

2011-04-12T06:49:00.001-04:00

The New York Times reports that a study by Cornell professor Robert Howarth, not yet published, argues that natural gas may not be better for the climate than coal.

The problem, the studies suggest, is that planet-warming methane, the chief component of natural gas, is escaping into the atmosphere in far larger quantities than previously thought, with as much as 7.9 percent of it puffing out from shale gas wells, intentionally vented or flared, or seeping from loose pipe fittings along gas distribution lines. This offsets natural gas’s most important advantage as an energy source: it burns cleaner than other fossil fuels and releases lower carbon dioxide emissions.

Methane is a potent greenhouse gas, though it does not last as long in the atmosphere as carbon dioxide. An industry executive disputes the numbers:

Mark D. Whitley, a senior vice president for engineering and technology with Range Resources, a gas drilling company with operations in several regions of the country, said the losses suggested by Mr. Howarth’s study were simply too high.

“These are huge numbers,” he said. “That the industry would let what amounts to trillions of cubic feet of gas get away from us doesn’t make any sense. That’s not the business that we’re in.”

Just how much gas is escaping is not well known, which is in itself a problem. What the study doesn't dispute is that natural gas burns cleaner than coal, so much so that burning landfill gas is considered far cleaner for the air and the climate than letting it escape. It's the fugitive emissions that worry Howarth:

The GHG footprint of shale gas is significantly larger than that from conventional gas, due to methane emissions with flow-back fluids and from drill out of wells during well completion. Routine production and downstream methane emissions are also large, but are the same for conventional and shale gas. Our estimates for these routine and downstream methane emission sources are within the range of those reported by most other peer-reviewed publications inventories (Hayhoe et al. 2002; Lelieveld et al. 2005).

Despite this broad agreement, the uncertainty in the magnitude of fugitive emissions is large. Given the importance of methane in global warming, these emissions deserve far greater study than has occurred in the past. We urge both more direct measurements and refined accounting to better quantify lost and unaccounted for gas.

An advance copy of the study is available online via The Hill.

Joseph Stiglitz on Financial and Nuclear Meltdowns

2011-04-07T06:18:00.014-04:00

As part of the Guardian's ongoing debate on nuclear energy, economist Joseph Stiglitz compares recent nuclear and financial meltdowns.

These wizards of finance, it turned out, didn't understand the intricacies of risk, let alone the dangers posed by "fat-tail distributions" – a statistical term for rare events with huge consequences, sometimes called "black swans". Events that were supposed to happen once in a century – or even once in the lifetime of the universe – seemed to happen every 10 years. Worse, not only was the frequency of these events vastly underestimated; so was the astronomical damage they would cause – something like the meltdowns that keep dogging the nuclear industry.

There is another similiarity between financial and nuclear risks: both industries have required government assistance. The banks needed assistance when things went south. But, as I have pointed out, the nuclear industry can't get financing without government guarantees, even when things aren't melting down.

Who Will Get the Blame for a Government Shutdown?

2011-04-06T09:17:00.003-04:00

Washington Post opinion writer Michael Gerson, who worked in the George W. Bush White House, offers this assessment of the looming government shutdown:

This maneuver has also placed House Speaker John Boehner in exactly the position he wanted to avoid. Obama’s offer is more than reasonable. A $30 billion reduction, after all, was the initial Republican negotiating position back in early February. Given that Republicans control only the House, this level of cuts would normally be viewed as a remarkable success. But a portion of the Republican conference longs for a confrontation that results in a government shutdown, preferring a fight over a victory. And the only worse outcome for Boehner than a politically risky shutdown is a deeply split conference, pitting the Republican establishment against Tea Party purists — a result that would undermine all future Republican progress.

I don't know how things will turn out, but I hope he's right. E.J. Dionne isn't so sure, and points to this poll that finds that voters would apportion blame evenly.

We're into improvisational politics here; public opinion on the last shutdown depended heavily on who appeared to be more reasonable. With the Tea Party right itching for a fight, this may be more difficult for the GOP than for Obama.

My instincts tell me that most voters like politicians who work things out, which is why Jack Markell is more popular (and more effective) than Scott Walker. The problem for Republicans is, as Ezra Klein puts it, "It increasing feels like the House GOP doesn’t want to take “yes” for an answer." The question of who gets blamed for a government shutdown may depend on the question of who is seen as wanting a deal and who is seen as wanting a confrontation.

TommyWonk at the Guardian on Nuclear Power

2011-04-03T12:27:00.004-04:00

Over at the Guardian, I have a piece questioning the economics of nuclear energy. Some climate advocates are calling for more nuclear power to reduce greenhouse gas emissions. But if renewable energy has to pass the cost test, what about nuclear?

If the costs and benefits of nuclear power are so attractive, where are the investors? At least with wind and solar power, it is possible to see the cost curve dropping to the break-even point in the near future. Nuclear power, by contrast, may never be able to convince investors to put their money down without government guarantees.

There's an old adage, "If you don't know the numbers, you don't know the business." After more than fifty years, it's hard to nail down the true cost of commercial nuclear power.

Recycling Opponents Try Again in the House

2011-03-29T05:05:00.000-04:00

House Bill 29, which would needlessly impede implementation of universal curbside recycling in Delaware, comes up before the House Natural Resources Committee Wednesday afternoon. The bill would require waste collectors to present their customers with separate cost breakdowns for regular waste and recycling pickups.

This is a matter that was decided last year by SB 234, which institutes statewide curbside recycling in Delaware, and requires that any waste hauler provide recycling as an integral part of waste collection. Opponents of statewide recycling tried and failed to pass an identical amendment to SB 234 that would have mandated a separate cost breakdown. House Amendment 1 to SB 234 was defeated with 15 yes votes and 23 no votes. An unsuccessful lawsuit filed in Chancery Court to block the implementation of SB 234 also raised the issue.

HB 29 would impose unnecessary and unwarranted administrative burdens on firms and local governments that collect waste and recyclable material from Delaware’s homes and businesses. Waste collectors would have to have their accountants perform complex cost analysis for no good purpose. For instance, the bill doesn't specify whether costs be allocated by the customer, by the trip or by the ton. I've performed cost accounting in a variety of circumstances, and know from experience that how the analysis is structured profoundly affects the result. No public purpose would be served by this exercise, except to give recycling opponents another chance to claim that recycling is too expensive.

The opponents of recycling continue to ignore the economic advantages of single stream recycling. Waste collectors will use the same trucks and crews for regular waste and recyclable materials. The only difference is that the trucks will deliver one load to a recycling facility on one day and the other to a landfill on another. These opponents also forget that SB 234 will create long term environmental benefits and capital savings for Delaware through the extension of the useful life of our existing landfills.

As I see it, HB 29 is a nuisance bill that would serve no useful purpose other than to create a impediment for those working faithfully to implement the law. Given that the matter has been decided by the General Assembly and Chancery Court, this bill does not deserve more than a cursory consideration from the committee.

The Republican Retreat from the Fight against Climate Change

2011-03-28T06:18:00.002-04:00

Denying that humans have anything to do with climate change may be a standard among Republicans. But it was not always so. Time magazine's Swampland blog has a handy review of the views of possible GOP presidential contenders whose views on climate change were not always so implacable. Mitt Romney, Tim Pawlenty and Mike Huckabee were all for action on climate change before they were against it. Even Sarah Palin has spoken of the possible effects of global warming, as when she created an "Alaska Climate Change Sub-Cabinet" on climate change back in 2007:

"Many scientists note that Alaska's climate is changing," Gov. Palin announced at the time. "We are already seeing the effects. Coastal erosion, thawing permafrost, retreating sea ice and record forest fires affect our communities and our infrastructure. Some scientists tell us to expect more changes in the future. We must begin to prepare for those changes now."

Newt Gingrich is a special case. If consistency is the hobgoblin of little minds, then Gingrich must be a very deep thinker indeed. Think Progress has compiled a timeline of Newt's statements on both sides of the global warming debate going back more than 20 years:

1989: Rep. Newt Gingrich (R-GA) co-sponsors the ambitious Global Warming Prevention Act (H.R. 1078), which finds that “the Earth’s atmosphere is being changed at an unprecedented rate by pollutants resulting from human activities, inefficient and wasteful fossil fuel use, and the effects of rapid population growth in many regions,” that “global warming imperils human health and well-being” and calls for policies “to reduce world emissions of carbon dioxide by at least 20 percent from 1988 levels by 2000.” The legislation recognizes that global warming is a “major threat to political stability, international security, and economic prosperity.” [H.R. 1078, 6/15/1989]

In the intervening years, Gingrich has oscillated between assailing efforts to combat climate change and urging that we act to protect the climate. As recently as 2008, he appeared with Nancy Pelosi, saying, "we do agree our country must take action to address climate change."

Another Step Forward for Bluewater Wind

2011-03-25T07:01:00.002-04:00

The News Journal reports that Bluewater Wind has passed an important regulatory milestone on the path to building an offshore wind project off the coast of Delaware. The Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) has given Bluewater exclusive rights to develop the site:

Officially, the bureau's decision was a "determination of no competitive interest," which helps Bluewater avoid further delays in its effort to gain a lease and permit to start construction. That's because it won't have to grapple with another developer for the rights to build on the ocean tracts it has chosen.

While this may seem arcane, it is an important step forward, not just for Bluewater, but for the entire industry. Two years ago, the federal government had no process for even considering a request to build offshore wind. There is nothing so difficult for a bureaucracy to manage as novelty. In this instance, the Interior Department had to create a new agency. BOEMRE has expedited the process to weed out bids from firms that can't demonstrate the ability to develop a project.

Faith, Science & Climate Change

2011-03-24T12:47:00.004-04:00

I am pleased to offer this guest post by Mike Stafford:

Faith, Science & Climate Change: The Truth Can Never Be a Heresy
Mike Stafford, Delaware Coordinator for Republicans for Environmental Protection

"And yet...it moves." — Galileo (attributed)

Do not be deceived. The opposition to the scientific evidence supporting anthropomorphic global warming ("AGW") among some conservatives may, at times, hide behind a pseudo-scientific veneer. However, much of it is often really rooted in an anti-intellectual strain of religious fundamentalism. It is this element—a barren theology that leaves no room for our God-given gifts of reason and discovery—that gives the opposition its implacable character.

Some say faith and reason are at war in the modern age. Not so for men like Rep. John Shimkus, who premises his rejection of AGW on Scriptural passages promising that the Earth will not perish in a flood. For him, the war is over, and reason has been routed from the field.

And sadly, Rep. Shimkus is not alone. Many conservative opponents of AGW claim that it is impossible because God would never permit it, or that it is erroneous because only God, and not humanity, has the capacity to destroy the world. I suppose these individuals have never heard of nuclear weapons.
It is the religious aspect of the AGW debate that has taken it out of the realm of mere policy, and planted it firmly in the thick of the culture wars.

As a result, any understanding of opposition to AGW, or of the apparent anti-intellectualism in segments of the GOP today, must begin with a discussion of religion and theology—specifically, the anti-intellectual theology underpinning elements of the fundamentalist Christian Right. In this regard, climate denial is merely one aspect of a broader rejection of reason and scientific inquiry.

With respect to the environment, these theological strains tend to place great emphasis on humanity's "dominion" over the Earth, but downplay or entirely ignore our concomitant responsibility for the stewardship of it. In so doing, they provide a false reading of the Book of Genesis, one that ignores the connotations of nurturing and care present in the original Hebrew text in favor of an interpretation emphasizing naked power and supremacy. Simply put, the Biblical mandate is to care for creation, not to commodify and exploit it.

In addition, AGW also touches on millennialist currents and visions prevalent in some streams of fundamentalist Christianity. This is significant. Stewardship is rooted in a concern for the future well-being of others. It matters little if you believe our world has no future, or that God will miraculously deliver you from it, and its consequences. Like the Easter Islanders of old, many among us seem ready to bet that the moai will come to life and rescue us from ourselves. In the face of very real problems, such an escape into magical thinking may temporarily relieve anxiety, but it actually accelerates the trajectory towards disaster.

In its opposition to AGW, the anti-intellectual theological strain also ignores the first of the cardinal virtues- prudence. Prudence speaks to the need for sagacity, for careful reflection and consideration. It is a requisite for effective stewardship, and effective political leadership.

Today, there is no debate in the scientific community about whether the Earth is warming—it is. There is also a nearly unanimous consensus that human activity is responsible for this warming. There is some debate over the severity of the consequences that will inure from this and, on the margins, over whether we can take any remedial measures that will slow, stop, or reverse this process. The consensus position, however, is clear—it will probably have a significant negative impact on human civilization and the natural world, and there are practical steps that could be taken now to avoid this fate.

Given the potential implications for humanity, it is reckless to ignore the broad scientific consensus on AGW. Doing so in the face of this evidence is tantamount to an abdication of both our duty to future generations, and of our duty to care for the natural world. It is an act of immense selfishness. After all, the natural world, our Earth, is a shared, a common, inheritance. As the late Admiral Hyman Rickover once said: "A prudent and responsible parent will use his capital sparingly in order to pass on to his children as much as possible of his inheritance. A selfish and irresponsible parent will squander it in riotous living and care not one whit how his offspring will fare."

Placing religion and theology in the service of such selfishness and irresponsibility is an act of deep betrayal.

In the end, a theology that requires the rejection of empirical evidence on a variety of topics, and an escapist descent into magical thinking, is not a living faith. It is a dead one. Such a faith is not spiritual armor for the believer going out into the world, but rather, an intellectual tomb for someone hiding from it.

Let me suggest something different. Faith and reason are not at war–or at least, do not need to be. Religious belief and rational inquiry, faith and doubt, are not binary pairs of opposites. Indeed, at a fundamental level, both religion and science remind us of the deep mystery underpinning the world, and our existence in it. Scientific inquiry also expands our knowledge of the natural world and the universe which, we are told in Genesis, is a reflection of God. This is why learning, the quest for knowledge and understanding, is a sacred thing. Or as Pope Benedict XVI has taught, religious faith "consolidates, integrates and illuminates truth[s] acquired by human reason." For my own part, I think God gave us our minds, our intellects, and our capacity to reason, in the hope that we would put them to use advancing the common good.

Today, in their opposition to AGW, some religious conservatives imagine themselves as brave dissenters defending individual rights and Biblical truth from yet another assault by a grasping, rapacious, regulatory Government and the atheist liberals that run it. They are wrong. They are actually reprising the role of the Inquisition in the trial of Galileo.

And in so doing, they have forgotten something fundamental about faith. If God is the author of the world, then the truth, whatever it is, can never be a heresy...and people of faith ought never fear it.

Image: "Interdependence" – A Tiffany window at Yale University shows harmony between science and religion, Michael Marsland, Yale University

Risk Mismanagement

2011-03-20T19:27:00.008-04:00

How risky is a nuclear plant, an offshore drilling platform or an investment bank? When disaster strikes, we invariably hear that an unlikely confluence of events (the proverbial perfect storm) led to the catastrophe. Economist Nancy Folbre, writing in the New York Times Economix blog, sees a common thread in the risk management mistakes that led to disasters on Wall Street and at the Fukushima Daiichi nuclear plant in Japan:

Early warnings about potential nuclear dangers in Japan and about Wall Street’s propensity for risk-taking without liability were both dismissed as paranoid anticipation of low-probability events. With both disasters, regulatory failures set the stage, and taxpayers will end up paying most of the social costs.

Effective risk management is central to economic efficiency. Yet major players in both crises have insisted that they should not be held accountable for risks they underestimated.

A common fallacy is thinking of the contributing causes of a disaster as unrelated when they are often related. The investment bankers and traders thought the simultaneous collapse of their various investments and derivatives couldn't happen, but in a market meltdown, they all became highly correlated and crashed in unison. Likewise the Japanese engineers imagined that the simultaneous breakdowns of diesel backup generators, cooling valves and pumps was highly unlikely, but the cascading failures were all caused by one event. In each case, the engineers and managers never understood how so many components could fail at once.

This fallacy can lead to a tragic underestimation of risk. Take three components of a complex system. If the chance of failure for any one component is 1 percent, then the odds that all three could fail at the same time would be one in a million—if the three events are unrelated. But if breakdown of one component contributes to, or is correlated to, the failure of another, the chance that all three could fail would be closer to one in a hundred, rather than one in a million.

Floyd Norris, also writing in the Times, points out that managers who underestimate risk can end up taking on even larger risks as a results:

Four years ago, there were fears of a financial meltdown — a term borrowed from the nuclear power industry. Now there are fears of a real meltdown.

Comparing the two events may risk seeming insensitive to the rising human toll in northern Japan, but there are similarities in causation. In each case, overconfidence born of experience led to increased risks once a disaster unfolded.

These errors in risk management are compounded and repeated when the engineers and managers allow themselves to believe that they were overcome by extremely unlikely events. And thus, we hear over and over again that yet another disaster was caused by yet another perfect storm.

The Risks and Costs of Nuclear Power

2011-03-16T06:24:00.000-04:00

Even in the face of a disaster of unimaginable scale, the cynics still consider the proponents of renewable energy to be impractical. But I don't see why I or anyone should apologize for advocating developing energy resources that don't blow up and poison the air, land and water for miles around.Such large scale disasters are expensive as well as dangerous, which is a key reason why no new nuclear plants have been built in the U.S. for a generation.

Several years ago, I heard Jeff Immelt, the CEO of GE, say that commercial nuclear power won't be developed in the U.S. without federal liability or financing guarantees. The risks, however remote, are so expensive that investors don't want to take them on, no matter what the ROI. Even so, some supposedly hard-headed folks consider nuclear power to be more practical than wind or solar.

I know that some advocates for tackling climate change are convinced that nuclear power has to be part of the solution. But if the risks are so scary that industry can't finance a power plant without offloading financial liability onto the federal government, it may not be a practical part of the solution.

Photo: DigitalGlobe, via Reuters

John Flaherty

2011-03-14T06:55:00.000-04:00

I was pleased to see the News Journal recognize John Flaherty for his work on good government issues. John is omnipresent in Legislative Hall and has a good sense of who is where on what issue at any given time.

I and many other Delawareans have worked with John on good government issues over the years. I don't know how many of his fellow citizens have benefitted from his coaching. Being on the same side as John is a pretty reliable indicator of whether you're on the right side of an issue. And if he says a plan or strategy makes sense, then you're likely on the right track.

Russell W. Peterson's Declaration of Interdependence

2011-03-13T09:31:00.005-04:00

Chris Coons was the last speaker at the memorial service for Russ Peterson. He led the gathering in reciting Peterson's Declaration of Interdependence, written in 1973:

We the people of the planet Earth,
with respect for the dignity of each human life,
with concern for future generations,
with growing appreciation of our relation to the environment,
with recognition of limits to our resources and with need for adequate food, air, water, shelter, health, protection, justice, and self-fulfillment,
hereby declare our interdependence and resolve to work together in harmony with our environment to enhance the quality of life everywhere.

Propping Up the Fossil Fuel Industry

2011-03-11T06:18:00.004-05:00

Talking Points Memo reports that Congressman Joe Barton thinks we need to keep subsidizing the fossil fuel companies to keep them from going broke:

"Over time if you put so many disincentives against any U.S. manufacturing or production company, or oil and gas exploration company, they'll go out of business," Barton said.

Barton, perhaps the oil and gas industry's staunchest support on Capitol Hill, says the subsidies for the industry should remain unchanged "so long as you believe that you believe in the free market capitalist system and they should be headquartered in the United States."

While Barton's comment is outrageous (and irony free when it comes to the question of free enterprise), so is the fact that these subsidies are still in place. Consider Barton's choice of words: cutting subsidies would create "disincentives" for oil and gas companies.

The Environmental Law Institute released a study in 2009 that found that U.S. fossil fuel subsidies far exceeded support for renewable energy over from 2002 to 2008:
President Obama has proposed cutting these subsidies by $46 billion over the next ten years.

Even in the face of these facts, critics complain about subsidies for renewable energy, saying that wind turbines and solar panels should compete on their own. But there is a rationale for these breaks: these are new industries with developing technologies, significant public benefits and large potential for future growth.

On the other hand, the oil and gas business is mature (having been around for more than a century) with standardized technologies, significant public costs and little potential for future growth.

The Cumulative Impact of Development

2011-03-10T06:49:00.005-05:00

The Delaware Department of Transportation denied a waiver of the requirement that the developer conduct a traffic impact study for a proposed shopping center on a site bounded by Routes 7, 40 and 1. The News Journal reports that the developer's attorney, Larry Tarabicos, complained that DelDOT has granted waivers for other projects in the area:

But Tarabicos maintains DelDOT's decision contradicts the agencys history of granting waivers for traffic impact studies to other developers along U.S. 40 and Del. 7.

"DelDOT hasn't seen a request for a traffic waiver in the Route 40 corridor that they didn't like -- until this one," Tarabicos said.

This provides a good example of the principle of cumulative impact in regulation. If there are already two large shopping centers at the intersection, why not a third? The developer in this case can complain that this project should have been treated exactly like the previous projects, but the real world impact would be to push traffic to the breaking point.

Of course, this project had been helped along by seeking special treatment, such as the absurd request to treat building a large retail facility on a parking lot as redevelopment under County code, and slipping approval through County Council as part of a consent agenda.

The project would have added more than 500 vehicles to the road during rush hour. The first or second 500 vehicles through the intersection may not have led to gridlock, but an additional 500 could. The cumulative impact of another 500 vehicles requires that regulators treat the project differently than they might have a similar proposal twenty years ago.

Public roads are not infinite resources. To demand that each project be given the same approval regardless of the cumulative impact is to ignore the truth that public resources are limited.

Adjusting Solar Rebates to Changing Markets

2011-03-06T17:37:00.003-05:00

This is the way it's supposed to work. Aaron Nathans writes in the News Journal that solar panel rebates in Delaware are being adjusted downwards in response to falling prices:

"This is realistically the next step. As prices continue to drop, we don't need such a big rebate," said Dale Davis, president of CMI Solar Electric and president of the Delaware Solar Energy Coalition, an industry group.

He also sits on the Renewable Energy Task Force that designed the program. The task force, which was charged by the General Assembly with designing a sustainable solar industry in the state, also includes utilities, environmental groups, the solar manufacturer Motech, and representatives of various state agencies.

I am a member of the task force as well, and can testify first hand to the work being done to get the biggest bang for the buck. Task force meetings are open to the public; the next meeting is Wednesday, March 9 at 9:30 a.m. at the Public Service Commission hearing room in Dover.

I can think of two ways in which support for solar power is helping to drive prices down. First, unit costs are coming down as manufacturers ramp up production. Second, the growing market for solar panels is driving further innovation, making panels more efficient or less expensive to produce.

Abraham Lincoln's First Inaugural

2011-03-04T17:15:00.008-05:00

Abraham Lincoln was sworn in as president 150 years ago today. His first Inaugural Address still stands as one of the defining expositions on the principles of self government.
The New York Times has posted the text and a facsimile of his notes, with handwritten edits in the margins and pasted onto a typeset draft. The notes include the famous ending, prompted by suggestions by William Seward, written at the bottom of the page. In the speech Lincoln presents a clear, and now definitive, case that the United States cannot be dissolved by individual states. The argument for states' rights may be raised from time to time, but the question of the constitutional integrity of the United States has been settled by Lincoln's speeches and the outcome and aftermath of the Civil War.

Fellow-Citizens of the United States:

In compliance with a custom as old as the Government itself, I appear before you to address you briefly and to take in your presence the oath prescribed by the Constitution of the United States to be taken by the President "before he enters on the execution of this office."

I do not consider it necessary at present for me to discuss those matters of administration about which there is no special anxiety or excitement.

Apprehension seems to exist among the people of the Southern States that by the accession of a Republican Administration their property and their peace and personal security are to be endangered. There has never been any reasonable cause for such apprehension. Indeed, the most ample evidence to the contrary has all the while existed and been open to their inspection. It is found in nearly all the published speeches of him who now addresses you. I do but quote from one of those speeches when I declare that—

I have no purpose, directly or indirectly, to interfere with the institution of slavery in the States where it exists. I believe I have no lawful right to do so, and I have no inclination to do so. Those who nominated and elected me did so with full knowledge that I had made this and many similar declarations and had never recanted them; and more than this, they placed in the platform for my acceptance, and as a law to themselves and to me, the clear and emphatic resolution which I now read:

Resolved, That the maintenance inviolate of the rights of the States, and especially the right of each State to order and control its own domestic institutions according to its own judgment exclusively, is essential to that balance of power on which the perfection and endurance of our political fabric depend; and we denounce the lawless invasion by armed force of the soil of any State or Territory, no matter what pretext, as among the gravest of crimes.

I now reiterate these sentiments, and in doing so I only press upon the public attention the most conclusive evidence of which the case is susceptible that the property, peace, and security of no section are to be in any wise endangered by the now incoming Administration. I add, too, that all the protection which, consistently with the Constitution and the laws, can be given will be cheerfully given to all the States when lawfully demanded, for whatever cause—as cheerfully to one section as to another.

There is much controversy about the delivering up of fugitives from service or labor. The clause I now read is as plainly written in the Constitution as any other of its provisions:

No person held to service or labor in one State, under the laws thereof, escaping into another, shall in consequence of any law or regulation therein be discharged from such service or labor, but shall be delivered up on claim of the party to whom such service or labor may be due.

It is scarcely questioned that this provision was intended by those who made it for the reclaiming of what we call fugitive slaves; and the intention of the lawgiver is the law. All members of Congress swear their support to the whole Constitution—to this provision as much as to any other. To the proposition, then, that slaves whose cases come within the terms of this clause "shall be delivered up" their oaths are unanimous. Now, if they would make the effort in good temper, could they not with nearly equal unanimity frame and pass a law by means of which to keep good that unanimous oath?

There is some difference of opinion whether this clause should be enforced by national or by State authority, but surely that difference is not a very material one. If the slave is to be surrendered, it can be of but little consequence to him or to others by which authority it is done. And should anyone in any case be content that his oath shall go unkept on a merely unsubstantial controversy as to how it shall be kept?

Again: In any law upon this subject ought not all the safeguards of liberty known in civilized and humane jurisprudence to be introduced, so that a free man be not in any case surrendered as a slave? And might it not be well at the same time to provide by law for the enforcement of that clause in the Constitution which guarantees that "the citizens of each State shall be entitled to all privileges and immunities of citizens in the several States"?

I take the official oath to-day with no mental reservations and with no purpose to construe the Constitution or laws by any hypercritical rules; and while I do not choose now to specify particular acts of Congress as proper to be enforced, I do suggest that it will be much safer for all, both in official and private stations, to conform to and abide by all those acts which stand unrepealed than to violate any of them trusting to find impunity in having them held to be unconstitutional.

It is seventy-two years since the first inauguration of a President under our National Constitution. During that period fifteen different and greatly distinguished citizens have in succession administered the executive branch of the Government. They have conducted it through many perils, and generally with great success. Yet, with all this scope of precedent, I now enter upon the same task for the brief constitutional term of four years under great and peculiar difficulty. A disruption of the Federal Union, heretofore only menaced, is now formidably attempted.

I hold that in contemplation of universal law and of the Constitution the Union of these States is perpetual. Perpetuity is implied, if not expressed, in the fundamental law of all national governments. It is safe to assert that no government proper ever had a provision in its organic law for its own termination. Continue to execute all the express provisions of our National Constitution, and the Union will endure forever, it being impossible to destroy it except by some action not provided for in the instrument itself.

Again: If the United States be not a government proper, but an association of States in the nature of contract merely, can it, as a contract, be peaceably unmade by less than all the parties who made it? One party to a contract may violate it—break it, so to speak—but does it not require all to lawfully rescind it?

Descending from these general principles, we find the proposition that in legal contemplation the Union is perpetual confirmed by the history of the Union itself. The Union is much older than the Constitution. It was formed, in fact, by the Articles of Association in 1774. It was matured and continued by the Declaration of Independence in 1776. It was further matured, and the faith of all the then thirteen States expressly plighted and engaged that it should be perpetual, by the Articles of Confederation in 1778. And finally, in 1787, one of the declared objects for ordaining and establishing the Constitution was "to form a more perfect Union."

But if destruction of the Union by one or by a part only of the States be lawfully possible, the Union is less perfect than before the Constitution, having lost the vital element of perpetuity.

It follows from these views that no State upon its own mere motion can lawfully get out of the Union; that resolves and ordinances to that effect are legally void, and that acts of violence within any State or States against the authority of the United States are insurrectionary or revolutionary, according to circumstances.

I therefore consider that in view of the Constitution and the laws the Union is unbroken, and to the extent of my ability, I shall take care, as the Constitution itself expressly enjoins upon me, that the laws of the Union be faithfully executed in all the States. Doing this I deem to be only a simple duty on my part, and I shall perform it so far as practicable unless my rightful masters, the American people, shall withhold the requisite means or in some authoritative manner direct the contrary. I trust this will not be regarded as a menace, but only as the declared purpose of the Union that it will constitutionally defend and maintain itself.

In doing this there needs to be no bloodshed or violence, and there shall be none unless it be forced upon the national authority. The power confided to me will be used to hold, occupy, and possess the property and places belonging to the Government and to collect the duties and imposts; but beyond what may be necessary for these objects, there will be no invasion, no using of force against or among the people anywhere. Where hostility to the United States in any interior locality shall be so great and universal as to prevent competent resident citizens from holding the Federal offices, there will be no attempt to force obnoxious strangers among the people for that object. While the strict legal right may exist in the Government to enforce the exercise of these offices, the attempt to do so would be so irritating and so nearly impracticable withal that I deem it better to forego for the time the uses of such offices.

The mails, unless repelled, will continue to be furnished in all parts of the Union. So far as possible the people everywhere shall have that sense of perfect security which is most favorable to calm thought and reflection. The course here indicated will be followed unless current events and experience shall show a modification or change to be proper, and in every case and exigency my best discretion will be exercised, according to circumstances actually existing and with a view and a hope of a peaceful solution of the national troubles and the restoration of fraternal sympathies and affections.

That there are persons in one section or another who seek to destroy the Union at all events and are glad of any pretext to do it I will neither affirm nor deny; but if there be such, I need address no word to them. To those, however, who really love the Union may I not speak?

Before entering upon so grave a matter as the destruction of our national fabric, with all its benefits, its memories, and its hopes, would it not be wise to ascertain precisely why we do it? Will you hazard so desperate a step while there is any possibility that any portion of the ills you fly from have no real existence? Will you, while the certain ills you fly to are greater than all the real ones you fly from, will you risk the commission of so fearful a mistake?

All profess to be content in the Union if all constitutional rights can be maintained. Is it true, then, that any right plainly written in the Constitution has been denied? I think not. Happily, the human mind is so constituted that no party can reach to the audacity of doing this. Think, if you can, of a single instance in which a plainly written provision of the Constitution has ever been denied. If by the mere force of numbers a majority should deprive a minority of any clearly written constitutional right, it might in a moral point of view justify revolution; certainly would if such right were a vital one. But such is not our case. All the vital rights of minorities and of individuals are so plainly assured to them by affirmations and negations, guaranties and prohibitions, in the Constitution that controversies never arise concerning them. But no organic law can ever be framed with a provision specifically applicable to every question which may occur in practical administration. No foresight can anticipate nor any document of reasonable length contain express provisions for all possible questions. Shall fugitives from labor be surrendered by national or by State authority? The Constitution does not expressly say. May Congress prohibit slavery in the Territories? The Constitution does not expressly say. Must Congress protect slavery in the Territories? The Constitution does not expressly say.

From questions of this class spring all our constitutional controversies, and we divide upon them into majorities and minorities. If the minority will not acquiesce, the majority must, or the Government must cease. There is no other alternative, for continuing the Government is acquiescence on one side or the other. If a minority in such case will secede rather than acquiesce, they make a precedent which in turn will divide and ruin them, for a minority of their own will secede from them whenever a majority refuses to be controlled by such minority. For instance, why may not any portion of a new confederacy a year or two hence arbitrarily secede again, precisely as portions of the present Union now claim to secede from it? All who cherish disunion sentiments are now being educated to the exact temper of doing this.

Is there such perfect identity of interests among the States to compose a new union as to produce harmony only and prevent renewed secession?

Plainly the central idea of secession is the essence of anarchy. A majority held in restraint by constitutional checks and limitations, and always changing easily with deliberate changes of popular opinions and sentiments, is the only true sovereign of a free people. Whoever rejects it does of necessity fly to anarchy or to despotism. Unanimity is impossible. The rule of a minority, as a permanent arrangement, is wholly inadmissible; so that, rejecting the majority principle, anarchy or despotism in some form is all that is left.

I do not forget the position assumed by some that constitutional questions are to be decided by the Supreme Court, nor do I deny that such decisions must be binding in any case upon the parties to a suit as to the object of that suit, while they are also entitled to very high respect and consideration in all parallel cases by all other departments of the Government. And while it is obviously possible that such decision may be erroneous in any given case, still the evil effect following it, being limited to that particular case, with the chance that it may be overruled and never become a precedent for other cases, can better be borne than could the evils of a different practice. At the same time, the candid citizen must confess that if the policy of the Government upon vital questions affecting the whole people is to be irrevocably fixed by decisions of the Supreme Court, the instant they are made in ordinary litigation between parties in personal actions the people will have ceased to be their own rulers, having to that extent practically resigned their Government into the hands of that eminent tribunal. Nor is there in this view any assault upon the court or the judges. It is a duty from which they may not shrink to decide cases properly brought before them, and it is no fault of theirs if others seek to turn their decisions to political purposes.

One section of our country believes slavery is right and ought to be extended, while the other believes it is wrong and ought not to be extended. This is the only substantial dispute. The fugitive-slave clause of the Constitution and the law for the suppression of the foreign slave trade are each as well enforced, perhaps, as any law can ever be in a community where the moral sense of the people imperfectly supports the law itself. The great body of the people abide by the dry legal obligation in both cases, and a few break over in each. This, I think, can not be perfectly cured, and it would be worse in both cases after the separation of the sections than before. The foreign slave trade, now imperfectly suppressed, would be ultimately revived without restriction in one section, while fugitive slaves, now only partially surrendered, would not be surrendered at all by the other.

Physically speaking, we can not separate. We can not remove our respective sections from each other nor build an impassable wall between them. A husband and wife may be divorced and go out of the presence and beyond the reach of each other, but the different parts of our country can not do this. They can not but remain face to face, and intercourse, either amicable or hostile, must continue between them. Is it possible, then, to make that intercourse more advantageous or more satisfactory after separation than before? Can aliens make treaties easier than friends can make laws? Can treaties be more faithfully enforced between aliens than laws can among friends? Suppose you go to war, you can not fight always; and when, after much loss on both sides and no gain on either, you cease fighting, the identical old questions, as to terms of intercourse, are again upon you.

This country, with its institutions, belongs to the people who inhabit it. Whenever they shall grow weary of the existing Government, they can exercise their constitutional right of amending it or their revolutionary right to dismember or overthrow it. I can not be ignorant of the fact that many worthy and patriotic citizens are desirous of having the National Constitution amended. While I make no recommendation of amendments, I fully recognize the rightful authority of the people over the whole subject, to be exercised in either of the modes prescribed in the instrument itself; and I should, under existing circumstances, favor rather than oppose a fair opportunity being afforded the people to act upon it. I will venture to add that to me the convention mode seems preferable, in that it allows amendments to originate with the people themselves, instead of only permitting them to take or reject propositions originated by others, not especially chosen for the purpose, and which might not be precisely such as they would wish to either accept or refuse. I understand a proposed amendment to the Constitution—which amendment, however, I have not seen—has passed Congress, to the effect that the Federal Government shall never interfere with the domestic institutions of the States, including that of persons held to service. To avoid misconstruction of what I have said, I depart from my purpose not to speak of particular amendments so far as to say that, holding such a provision to now be implied constitutional law, I have no objection to its being made express and irrevocable.

The Chief Magistrate derives all his authority from the people, and they have referred none upon him to fix terms for the separation of the States. The people themselves can do this if also they choose, but the Executive as such has nothing to do with it. His duty is to administer the present Government as it came to his hands and to transmit it unimpaired by him to his successor. Why should there not be a patient confidence in the ultimate justice of the people? Is there any better or equal hope in the world? In our present differences, is either party without faith of being in the right? If the Almighty Ruler of Nations, with His eternal truth and justice, be on your side of the North, or on yours of the South, that truth and that justice will surely prevail by the judgment of this great tribunal of the American people.

By the frame of the Government under which we live this same people have wisely given their public servants but little power for mischief, and have with equal wisdom provided for the return of that little to their own hands at very short intervals. While the people retain their virtue and vigilance no Administration by any extreme of wickedness or folly can very seriously injure the Government in the short space of four years.

My countrymen, one and all, think calmly and well upon this whole subject. Nothing valuable can be lost by taking time. If there be an object to hurry any of you in hot haste to a step which you would never take deliberately, that object will be frustrated by taking time; but no good object can be frustrated by it. Such of you as are now dissatisfied still have the old Constitution unimpaired, and, on the sensitive point, the laws of your own framing under it; while the new Administration will have no immediate power, if it would, to change either. If it were admitted that you who are dissatisfied hold the right side in the dispute, there still is no single good reason for precipitate action. Intelligence, patriotism, Christianity, and a firm reliance on Him who has never yet forsaken this favored land are still competent to adjust in the best way all our present difficulty.

In your hands, my dissatisfied fellow-countrymen, and not in mine, is the momentous issue of civil war. The Government will not assail you. You can have no conflict without being yourselves the aggressors. You have no oath registered in heaven to destroy the Government, while I shall have the most solemn one to "preserve, protect, and defend it."

I am loath to close. We are not enemies, but friends. We must not be enemies. Though passion may have strained it must not break our bonds of affection. The mystic chords of memory, stretching from every battlefield and patriot grave to every living heart and hearthstone all over this broad land, will yet swell the chorus of the Union, when again touched, as surely they will be, by the better angels of our nature.

Photo: New York Times

The Cost of Coal

2011-03-03T08:07:00.008-05:00

A group of researchers from Harvard have published a full life cycle accounting of the cost of coal power in the United States, and the results could be meaningful for Delaware.

The study, titled “Full cost accounting for the life cycle of coal,” was just published in the Annals of the New York Academy of Sciences. The authors calculate the externalities (environmental and health costs) of coal power to be $345.3 billion annually. (The authors present a range for each calculation; I will report the “best” calculation to reduce clutter. For instance, the range for the total cost of coal power in the U.S. is $175.2 billion to $523.3 billion.)

The externalities include land disturbance, public health costs in Appalachia, air emissions, and climate costs. If the costs were factored into energy prices, electricity from coal power would be an additional 17.84 cents/kWh. The Harvard study’s authors calculate the national cost of air emissions (one component of the costs) to be $187.5 billion annually, which would add 9.31 cents/kWh rates if it were included in electric bills. The average residential price in Delaware in 2008, according to the Energy Information Administration, was 13.93 cents/kWh.

The effects vary greatly by locality, so there is no way to neatly break down the costs for Delaware. The most directly relevant effect for Delaware would be the costs of air emissions from burning coal. Delmarva Power’s draft Integrated Resource Plan (IRP) includes a calculation of the benefits (in avoided health costs) of $1.8 billion to $4.3 billion over ten years from reducing coal power and increasing renewable energy. But comparing these numbers is not a straightforward exercise; the Harvard study calculates total externalities, while the IRP number is avoided externalities. Even so the Harvard study could provide a useful benchmark for Delaware. Stay tuned.

More Sloppy Work from the CRI

2011-03-01T07:10:00.004-05:00

The Caesar Rodney Institute (CRI) has stepped up its output when it comes to arguing against renewable energy. Unfortunately the quality of the CRI’s production has not kept pace. Let’s take a look at an example of the CRI’s work, titled “Solar Panel Subsidies Have Un-Intended Consequences.” In it Dave Stevenson of the Center for Energy Competitiveness compares the costs of different energy technologies:

One dollar invested in solar cells produces about 275 watts a year of electricity. Compare this to annual production per dollar invested for the following; offshore wind produces 390 watts/$, onshore wind 775 watts/$, and nuclear power 3000 watts/$ invested.

Sadly, no source is offered for these numbers, which would have been helpful in clarifying the meaning of the numbers. The cost of power plants is typically expressed as either dollars needed to build a kilowatt of capacity or cents per kWh of output. But Stevenson isn't clear as to whether he is talking about capacity or output, which makes his numbers almost impossible to interpret.

I have not seen any figures that support Stevenson’s assertion that nuclear power is ten times more cost effective than solar power. The cost of solar power has been coming down (a point Stevenson helpfully illustrates in a graph), while the cost of a new nuke plant continues to be prohibitive, and the industry insists that no new nuclear power will come online without financial guarantees from the federal government.

Inside Job at Theatre N

2011-02-25T06:37:00.001-05:00

If you like movies and you have an abiding interest in financial reform, head over to Theatre N this weekend to see the documentary "Inside Job," which plays Friday at 2:00, Saturday at 2:30 and 8:30, and Sunday at 5:00.

I have not yet seen it, so let's see what the New York Times had to say:

The density of information and the complexity of the subject matter make “Inside Job” feel like a classroom lecture at times, but by the end Mr. Ferguson has summoned the scourging moral force of a pulpit-shaking sermon. That he delivers it with rigor, restraint and good humor makes his case all the more devastating.

There will be a discussion after the Saturday evening showing, which will include Greg Wilson, communications director for the Delaware Reinvestment Action Council. Greg led the effort here in Delaware to lobby for meaningful financial reform last year. We got a pretty good bill (thanks in no small part to Ted Kaufman), but regulations are still being formulated to implement the law.

Floyd Norris of the New York Times wrote a week ago that the regulations requiring banks to keep some "skin in the game" when offloading most mortgages may turn out to be pretty good. We need to pay attention to how these regulations play out. And if you need a refresher on why it matters, go see "Inside Job." Tell 'em TommyWonk sent you.

Russ Peterson's Accomplishments

2011-02-24T06:27:00.008-05:00

Russ Peterson was so well known here in Delaware, that we never quite appreciated the breadth of his accomplishments. The New York Times has published an obituary of Peterson that captures just how persuasive he could be. For instance, he served as President Nixon's advisor on environmental matters, even though he had stood up to pressure from the White House on his plans to block a Shell Oil refinery on an undeveloped stretch of Delaware coastline:

Mr. Peterson helped lead a task force whose work contributed to the global phase-out of chlorofluorocarbons, the organic chemicals widely used as refrigerants that contribute to depletion of the ozone. The best-known fluorocarbon is Freon, a DuPont product.

In addition to being the president’s principal adviser on environmental policy, Mr. Peterson helped shape the extensive environmental reviews, known as environmental impact statements that were mandated by the National Environmental Policy Act of 1970.

Governor Peterson would hold an honorable place in Delaware history if his legacy had ended on his first day in office, when he pulled the Delaware National Guard out of Wilmington. He went on to replace the moribund commission system of state government with a cabinet system, enact the Coastal Zone Act and tear down the last whipping post in the United States. He prompted Republican presidents to push for progress on the environment, and continued to be an effective advocate for the earth for decades to come.

He had a tart tongue at times, and along the way he had practical people explaining that whatever he set out to do just couldn't be done. But Russ Peterson had a remarkable ability to take on difficult issues and succeed. His engagement in the fight to bring wind power to Delaware gave us all a sense that this was another long shot that just might pay off.

Photo: Joyce Dopkeen, the New York Times

Russell W. Peterson

2011-02-22T09:07:00.001-05:00

Like many Delawareans, I have crossed paths with Russell Peterson often over the course of decades. I handed out leaflets for the Coastal Zone Act as a kid. When I was in the mayor's office, I worked with the Rivers Task Force he led that prompted the redevelopment of Wilmington's Christina waterfront. Later I helped raise money for the Russell W. Peterson Urban Wildlife Refuge, where this statue stands.

I spoke with him just before he announced he was switching from the Republican Party to the Democratic Party in 1996. (He said he couldn't stand to be in the same party as Newt Gingrich.) More recently, I was proud to be on the same side as Russ Peterson in the fight to bring offshore wind power to Delaware.

I could say a great deal more. At this moment, I'm thinking about how he kept pushing, always moving on to the next cause or project. This in a way was his most inspiring quality, and gives me cause to think about what more I can do in my time here on earth.

Photo: Delaware Audubon, Steven Breukelman © 2004

Renewable Energy Worth Billions in Health Benefits to Delaware

2011-02-21T07:06:00.007-05:00

People instinctively know that renewable energy creates benefits by reducing pollution from dirty power plants. But can we back up what seems like a common sense assertion with hard figures? The answer is yes. We now have an estimate of these benefits, and the source of the calculation might surprise you.

Every two years, Delmarva Power is required to submit an Integrated Resource Plan (IRP) to the Public Service Commission. In the IRP, Delmarva Power details how it plans to meet its customers' needs and ensure the reliability of service. The latest draft IRP (PSC Docket No. 10-2) was filed December 1, 2010.

The draft IRP presents a summary of the impacts of a variety of emissions reductions programs, and, for the first time, includes a calculation of the environmental externality costs and benefits of these programs. An externality is a cost or benefit that does not show up in a company’s financial results, but is instead imposed on a third party. For instance, a company that cuts costs by not controlling air emissions creates costs for those who breathe the resulting dirty air.

This new calculation is being included at the urging of the Markell administration. The Delaware Department of Justice, in a filing to the PSC dated May 19, 2009, succinctly stated the case for including externalities in PSC proceedings:

A prominent obstacle to a level playing field for clean energy is that the external costs (e.g., environmental degradation and public health impacts) of using fossil fuel resources are not fully paid by energy generators, distributors or ratepayers, and are not and reflected in the price of the energy resource.

The draft IRP estimates the environmental impact of Delaware’s Renewable Portfolio Standard, the Energy Efficiency Resource Standard, the state’s participation in the Regional Greenhouse Gas Initiative (RGGI), the planned Bluewater Wind offshore wind project, other renewable energy sources coming on line, and a sharp reduction in emissions from coal burning power plants in Delaware.

The draft IRP presents an estimated economic benefit of these changes in power generation in Delaware, and it’s big: $1.8 billion to $4.3 billion over the next ten years. The figure is based on epidemiological estimates for health effects (such as lung disease and cancer) of reduced emission of NOx, SOx and particulate matter from power plants.

That comes to roughly $2,000 to $4,750 for every Delaware resident over the next ten years. You may never know if you would have gotten sick from the pollution removed from the air in the coming years. But significant numbers of your friends, families and neighbors are likely to remain healthy over the next decade because of Delaware's commitment to cleaner energy.

In annual terms (the calculation includes discounting for future dollars), the benefits total to $180 million to $430 million per year. Using Energy Information Administration (EIA) figures, I calculate the health benefits of adopting the renewable energy programs mentioned above come to 12 percent to 30 percent of Delaware’s 2008 retail electricity sales.

Opponents of renewable energy assert that green energy is too expensive, though the estimates of the “green premium” are generally overblown and rather lacking in detailed analysis. Now we have a calculation of the benefits, and the results affirm that Delaware’s policies promoting renewable energy are economically sound.

Delaware Environmental Summit, Saturday, February 26

2011-02-17T19:13:00.004-05:00

The third Delaware Environmental Summit will be held Saturday, February 26, from 8:30 a.m. to 12:30 p.m. at Wilmington University in Dover. Anyone interested is welcome to join us to make plans for environmental advocacy efforts for 2011.Objectives:

1. Support and enhance the ongoing advocacy work of Delaware’s environmental organizations.
2. Promote coordination among Delaware’s environmental organizations.
3. Where needed, foster new collaborative efforts among environmental advocates.
4. Engage new partners in environmental advocacy.
5. Give participants specific opportunities to engage in effective advocacy.

Participants will be given a chance to discuss their priorities for the coming year and start to make detailed plans for collaborative efforts to achieve our objectives in the following areas:

Water Quality
Air Quality
Recycling & Solid Waste
Public Health
Land Use
Climate Change
Energy

These group discussions are being designed to cover the issues and make plans for the coming year. If you have issues that do not clearly fit into any of these categories, please let us know.

We are asking organizations to contribute $25 (covering all members of that organization) and unaffiliated individuals $5 to defray the cost of the Summit. Please bring your check (payable to Delaware Chapter, Sierra Club) or cash with you to the registration table at the Summit.

The Dover campus of Wilmington University is located on Route 13 North (at Scarborough Road), at the intersection of Exit 104 from Delaware Route 1, just north of the Dover Mall and Dover Downs.

To RSVP or ask a question, contact us at DelEnviroSummit@gmail.com.

The CRI Asserts Renewable Energy Policies Hurt the Poor

2011-02-14T17:52:00.007-05:00

The conservative Caesar Rodney Institute (CRI) has come down squarely on the side on poor people when it comes to renewable energy:

We are taking money from the poor and giving it to the rich! Misguided energy policies have put the state in the role of the anti-Robin Hood.

Like most of the CRI’s arguments against renewable energy, we heard this one before. During the Bluewater Wind debate three years ago, we heard that the poor couldn’t afford wind power and its requisite “green premium.”

The green premium this time is said to be at least 20 percent of household energy bills—though once again no analysis is offered to justify the number. Reference is made to the Regional Greenhouse Gas Initiative (RGGI) and Delaware's renewable portfolio standard, without offering any analysis as to how—and how much—these programs will raise our energy bills.

Actually this version of the green premium is rather modest compared to a previous assertion that renewable energy programs would cost $1,000 annually per residential customer “if all the legislated policies were in effect now.” As I calculated last month, this would come to a whopping 63 percent of the average residential bill in 2009. Whether the number is 20 percent or 63 percent, the CRI doesn't show us the analysis to back up the scary numbers.

Since the CRI seems disinclined to do the math, I thought I would take a stab at it, starting with Delaware’s biggest renewable energy effort: the Bluewater Wind offshore wind project. The Public Service Commission’s consultant in 2008 projected the levelized cost of the Bluewater Wind contract to be 70 cents per MWh (0.07 cents/kWh) over the 25 year life of the deal. Based on average electricity use in 2009, this would come to 65 cents per month or $7.82 per year. (This figure could go up or down a few dollars depending on the trajectory of fossil fuel prices over the next three decades.) For those keeping score at home, that comes to 0.49 percent—which leaves the CRI to detail how renewable energy policies will raise our bills the other 19.51 percent.

The Velocity of Money

2011-02-11T06:43:00.011-05:00

Here's a conundrum for armchair economists when it comes to monetary policy: With so many more dollars flowing into the economy, why haven't we seen inflation accelerate?

The Federal Reserve has expanded its balance sheet (the amount of liquidity in the economy) from $927 billion on September 10, 2008 to $2.47 trillion on February 2, 2011. And the Fed is pumping more money into the economy through its ongoing quantitative easing program. But the consumer price index for 2010 was a modest 1.5 percent.

The answer has to do with the velocity of money. If the definition of inflation is too many dollars chasing too few goods, then inflation is a function of the motion of the dollars. If the dollars aren't chasing the goods very hard, we won't see higher inflation.

The blog, Econobrowser explains the phenomenon with this classic equation:

MV = PY

Here M is a measure of the money supply, V its velocity, and nominal GDP is written as the product of the overall price level (P) with real GDP (Y).

Yes, there are more dollars in the economy than there were before the meltdown in the fall of 2008, but these dollars haven't been moving very fast. Households experiencing unemployment or foreclosure are hoarding the few dollars they have. Those who still have jobs have been either paying down debt or building up savings. A dollar in a mattress, by definition, isn't moving very fast.

In his speech to the U.S. Chamber of Commerce, President Obama noted that American corporations "have nearly $2 trillion sitting in their balance sheets." Obama wants CEOs to deploy these assets, which have been sitting doing very little, by lending, spending and hiring more. Profitable corporations have been hoarding their earnings and are still reluctant to hire new workers or invest in capital equipment. Banks that were bailed out with government funds are still rebuilding their balance sheets and have been slow to start lending again. A dollar that isn't being used to buy goods or hire workers isn't going to drive prices or wages up.

Barack Obama and Corporate America

2011-02-08T06:15:00.003-05:00

How socialist is President Obama? Ezra Klein offers this analysis of his address to the U.S. Chamber of Commerce:

The reality is that the Obama administration's agenda has been, and continues to be, quite pro-business. He presided over TARP, the rescue of the American auto industry and a stimulus bill that the Chamber of Commerce endorsed. The administration passed a health-care law the chamber hated but that won official neutrality or support from the insurers, pharmaceutical companies, hospitals, doctors, and even the Business Roundtable, and disappointed liberals who sought a public option or a single-payer program. And as we know, corporate profits and stock prices have been the first part of the economy to return to health.

In his speech, Obama recalled how FDR and business worked together to win the Second World War:

Toward the end of the 1930s, amidst depression and the looming prospect of war, President Roosevelt realized he would need to form a new partnership with business if we were going to become what he would call the “arsenal of democracy.” As you could imagine, the relationship between the president and business leaders had grown somewhat fractured over the New Deal. So Roosevelt reached out to businesses; and business leaders answered the call to serve their country. After years of fighting each other, the result was one of the most productive collaborations between the public and private sectors in American history.

Some, like the head of GM, hadn’t previously known the president. If anything, he had been an adversary. But he gathered his family and explained that he was going to head up what would become the War Production Board.

“This country has been good to me,” he said. “I want to pay it back.”

In the years that followed, automobile factories converted to making planes and tanks. Corset factories made grenade belts. A toy company made compasses. A pinball machine maker turned out shells. 1941 would see the greatest expansion of manufacturing in the nation’s history. And not only did this help us win the war. It led to millions of new jobs and helped produce the great American middle class.

Obama isn't interested in CEOs taking on more charities. He wants America's biggest corporations to take the the profits they've been salting away and start investing and hiring again. For some on the right and the left, Obama and corporate America are, and should be, enemies. But if the greatest task facing the U.S. is increasing employment, then it is natural that Obama, like Roosevelt, should seek to work with the folks who have the tools and the capital to put Americans back to work.

Polls Find Strong Support for Environmental Protection and Clean Energy

2011-02-03T17:51:00.003-05:00

Despite the sound and fury from tea party conservatives, most Americans want the government to protect us from polluters and promote renewable energy.

Last week Newt Gingrich proposed abolishing the Environmental Protection Agency (EPA), and replacing it with a more business friendly Environmental Solutions Agency. The NRDC did some polling, and found that only 25 percent support Newt Gingrich's proposal. Even a majority of Republicans opposed Gingrich's idea.

The poll found that most Americans think the EPA should do more, not less:

Almost two thirds of Americans (63 percent) say “the EPA needs to do more to hold polluters accountable and protect the air and water,” versus under a third (29 percent) who think the EPA already “does too much and places too many costly restrictions on businesses and individuals.”

A recent Gallup poll found that promoting alternative energy is the most popular of eight legislative initiatives surveyed, more popular than fixing the tax code. Fully 83 percent of those surveyed said that Congress should "pass an energy bill that provides incentives for using solar and other alternative energy sources." Only 15 percent opposed the idea.

The Republican Case for Amtrak and High Speed Rail

2011-02-02T17:10:00.002-05:00

In this guest post, Michael Stafford makes the Republican case for investing in passenger rail:

The Case for Passenger Rail: Why Saving Amtrak and the High Speed Rail Corridors Program Should be a Priority
by Michael Stafford

A record 28.7 million people traveled on Amtrak passenger trains in fiscal year 2010. Despite this, Congressional Republicans have targeted federal support of passenger rail transportation for elimination. Overall, the Spending Reduction Act of 2011 that has been proposed by the Republican Study Committee would end $1.565 billion in annual federal operating subsidies for Amtrak as well as $2.5 billion in intercity and high speed rail grants. The elimination of Amtrak’s federal subsidy could result in the end of inter-city passenger rail operations in the United States. In so doing, Congressional Republicans risk sacrificing our nation's long-term interests in favor of a rigid, doctrinaire, adherence to ideology.

Amtrak (formally known as the National Passenger Rail Corporation) is a government-owned corporation formed in 1971 by the Nixon administration to take over increasingly unprofitable intercity passenger rail service that had previously been operated, at a significant loss, by private railroads. It has been heavily dependent on federal subsidies throughout its entire existence. Amtrak, and funding for passenger rail projects in general, has long been a target of conservatives. In particular, conservatives point to Amtrak’s dependence on federal subsidies and its inability to be “self sufficient” or “profitable.” For many on the Right, “subsidy” is simply a dirty word.

According to former Amtrak President Alex Kummant, however, conservative criticism of passenger rail, “needs serious re-examination, because national transportation strategy is an issue of US national competitiveness, and passenger rail has a significant role to play… A major federal government role in building and maintaining significant national assets that make the country competitive is entirely consistent with conservative philosophy.” Writing in The Atlantic Monthly, Richard Florida has made a similar point:

“It’s time to start thinking of our transit and infrastructure projects less in political terms and more as a set of strategic investments that are fundamental to the speed and scope of our economic recovery and to the new, more expansive economic geography required for long-run growth and prosperity.”

Indeed, the conservative fixation on “self sufficiency” ignores the roll historically played by government, at all levels, in developing our nation’s transportation infrastructure- from the canal, rail, and road building of the early/mid 19th Century, to the construction of the Interstate Highway system beginning in the 1950’s, to the High Speed Rail Corridors project today. Indeed, as one commentator has noted, “[s]ince the days of the ancient Greeks, government has subsidized transportation, building lighthouses and roads, dredging rivers, and so on.”

When it comes to passenger rail, conservatives are in desperate need of a paradigm shift; instead of framing the debate in terms of “self sufficiency” and profitability, conservatives should focus on the economic value of strategic investments in our transportation infrastructure. Simply put, no passenger rail system in the entire developed world is “self sufficient”- all require some form of public support. However, this is not a condemnation of passenger rail. Self-sufficiency is not the standard we utilize to gauge the value of other transportation modes in our economy. Both civil aviation and our nation’s highways benefit from a range of public subsidies and support- both direct, and indirect. Indeed, a case can be made that civil aviation is one of the most heavily subsidized industries in our nation today.

In the end, passenger rail provides a public service. And profitability, or “self sufficiency,” is not the most useful metric when gauging the value of public services. In addition, passenger rail provides a number of benefits to our economy. It plays a critical role, particularly in the Northeast Corridor region and in California, in reducing traffic congestion on our roadways, it reduces pollution and gasoline consumption, and it helps to reduce overall travel costs. These benefits would only increase if critical investments in modernizing our rail infrastructure, such as the High Speed Rail Corridors projects, were made.

In 2008, Congress passed the Passenger Rail Investment and Improvement Act (PRIIA) which, among other things, established a high-speed rail corridor development program. The viability of many of the designated high-speed rail corridors is amply documented by research—indeed, many of these projects have been on the drawing board, or under consideration, for years. PRIIA represented a forward-looking, strategic, investment in our transportation infrastructure- one which will bring significant economic benefits to a diverse range of communities across the nation.

In his recent State of the Union speech, President Obama reaffirmed his commitment to high speed rail, saying "[w]ithin 25 years, our goal is to give 80 percent of Americans access to high-speed rail." The President’s vision of developing a state-or-the-art high speed rail passenger system is one Republicans should embrace. The High Speed Rail Corridors project is a long overdue recognition of a simple fact: a modern transportation system requires a modern infrastructure. In a way, it is to passenger rail what the development of the Interstate Highway system was to the automobile.

It’s time for conservatives to reconsider their historic opposition to federal funding for passenger rail. As Kummant has noted, “[t]he current approach of the right, basically ignoring the national competitiveness implications of transportation and the related energy issues, is an abdication of responsibility.” Striping a critical link from our nation's transportation system at this juncture will impede economic growth and recovery, and damage our competitiveness; and that is the last thing we ought to do. Indeed, today—a time of rising fuel costs and increasing global economic pressures—is actually the time to invest in developing a state-of-the-art 21st Century passenger rail infrastructure that will be the envy of the world.

Michael Stafford is a Wilmington, Delaware attorney and a former Republican Party officer who led the local party organization's Transportation Working Group during 2009 and 2010.

Obama to Propose Cutting Fossil Fuel Subsidies

2011-02-01T18:25:00.000-05:00

The New York Times reports that President Obama plans to take another whack at federal subsidies for fossil fuels:

WASHINGTON — When he releases his new budget in two weeks, President Obama will propose doing away with roughly $4 billion a year in subsidies and tax breaks for oil companies, in his third effort to eliminate federal support for an industry that remains hugely profitable.

I have previously taken note of the unfortunate fact that our government has historically offered far more subsidies for fossil fuels than for renewable energy.

Any student of corporate strategy will tell you that these subsidies make no sense. The fossil fuel industry is more than a hundred years old, and enormously profitable. Just yesterday, Exxon announced that its profits soared 53 percent over a year ago.

There is a case for supporting the renewable energy business, with its large potential for growth and creating value for customers. But pouring more money into a commodity business with a limited supply will not increase the supply. There is simply no public purpose to be served by subsidizing the fossil fuel industry.

Newt Gingrich Proposes Abolishing the EPA

2011-01-29T11:13:00.003-05:00

Politico reports that Newt Gingrich wants to can the EPA:

Former House speaker and possible 2012 candidate Newt Gingrich called for the abolition of the Environmental Protection Agency in a Tuesday speech in Iowa

In an address at the Renewable Fuels Summit, Gingrich told attendees, including Iowa Gov. Terry Branstad, a key figure in the state’s first-in-nation Republican presidential caucuses, that the EPA should be replaced with a new “Environmental Solutions Agency.”

The replacement agency “would encourage innovation, incentivize success and emphasize sound science and new technology over bureaucracy, regulation, litigation and restrictions on American energy,” according to materials provided by Gingrich aide Rick Tyler.

Gingrich's website has more:

The EPA should be replaced with a new and improved Environmental Solutions Agency (ESA) complete with a new and improved charter and mission. The new ESA will be a successor agency to the EPA, incorporating the statutory responsibilities of the old EPA while making necessary statutory changes that will eliminate the job-killing regulatory abuses and power grabs of the old EPA.

The new ESA will focus on developing actual solutions to environmental challenges rather than simply trying to litigate them into existence. The ESA will work with industry instead of dictating to industry and incentivize the use of newer technologies instead of punishing current businesses.

The EPA exists for a reason. Certain industries have a habit of creating really big messes, which they won't clean up unless required to by the force of law. But in Gingrich's pristine 21st century, we don't have to deal with any of that mess left over from the 20th century. If we could just "work with industry instead of dictating" we can have our space age future we all read about as kids.

The hard truth is that some polluters have to be forced to clean up after themselves. I don't know whether Gingrich is too naive to recognize this simple truth about human nature, or cynical enough to think that some might actually fall for his vague talk about incentivizing industry to behave. I like the idea of working with business to create a cleaner future, but that can't be done if older, dirtier industries are given a free pass to go on polluting.

"Balanced budgets as far as the eye can see"

2011-01-25T17:28:00.008-05:00

Ezra Klein points out that most State of the Union speeches mostly do not produce a noticeable bump in a president's Gallup Poll numbers, with a few exceptions, most notably Bill Clinton's 1998 address, which generated a ten point increase in his approval rating.

So what made this one so exceptional? It was the first time most of us had ever heard a president announce that the federal government had balanced its budget:

Tonight, I come before you to announce that the Federal deficit, once so incomprehensibly large that it had 11 zeros, will be simply zero.

I will submit to Congress for 1999 the first balanced budget in 30 years. And if we hold fast to fiscal discipline, we may balance the budget this year, 4 years ahead of schedule. You can all be proud of that because turning a sea of red ink into black is no miracle. It is the product of hard work by the American people and of two visionary actions in Congress: the courageous vote in 1993 that led to a cut in the deficit of 90 percent and the truly historic bipartisan balanced budget agreement passed by this Congress.

Here is the really good news. If we maintain our resolve, we will produce balanced budgets as far as the eye can see.

The last Republican president to manage this feat was Dwight Eisenhower. Budget deficits under Reagan ranged from 2.78 percent to 5.88 percent of GDP.

Clinton went on to set one top priority for using the budget surplus:

Now, if we balance the budget for next year, it is projected that we will then have a sizable surplus in the years that immediately follow. What should we do with this projected surplus? I have a simple, four-word answer: save Social Security first.

The singular achievement was matched by a singular focus from a president who had been known for weighing down his speeches with endless litanies of policy proposal.

The speech came just a few days after the Lewinsky scandal had broken. Clinton was forced to deny the allegations the day before his address to Congress. The juxtaposition of the tawdry scandal with the achievement of a balanced budget may have contributed to the bump in the polls.

Congress of course never took up Clinton's challenge to strengthen Social Security, instead impeaching him in December of 1988. We know the rest of the story. The scandal probably dragged down Al Gore in the 2000 election. George W. Bush used the surplus for tax cuts, which lurched the federal government back into deficit spending and produced zero net jobs for the decade. Happily, Bush's proposal to privatize Social Security went nowhere. The Bush budgets left the U.S. with a dangerous budget deficit when the need for fiscal stimulus was most urgent.

Apple's 7 Billion Dollar Man

2011-01-19T06:35:00.000-05:00

Just how much is Steve Jobs worth? The announcement that he was taking another medical leave has prompted considerable speculation about the future of Apple. The value of most CEOs is probably marginal, but Jobs has led Apple from triumph to triumph at a stunning pace.

We can use the stock market to measure Jobs's worth to the company. Apple's stock fell 2.25 percent on Tuesday, which translates to a drop in market capitalization of $7.2 billion in one day. Not to worry, Apple is still valued at more than $312 billion. And as the New York Times reports, Apple has plenty of managerial talent, including ground breaking engineers, marketing managers and industrial designers.

Financial analysis provide a more precise measure called abnormal return that compares the movement of a particular stock price to the market as a whole. The difference can be used to estimate the effect a particular news event has on a stock price. The S&P 500 was up 0.14 percent Tuesday, which would put Jobs's market valuation at $7.6 billion. If we use the NASDAQ index (up 0.38 percent Tuesday) as a benchmark, Jobs' market valuation would be $8.4 billion.

But Tuesday's loss could be made up quickly following Apple's announcement of a truly astonishing quarter announced after the market closed. The company posted revenue gains of $7.8 billion (70 percent) compared to the same quarter last year, which translated into increased net income of $6 billion, a 78 percent increase. Earnings per share climbed to $6.43, more than a dollar higher than analysts' expectations. Has such a large company ever displayed such stunning growth?

The CRI's Latest Scary (and Meaningless) Number

2011-01-17T14:58:00.001-05:00

The Caesar Rodney Institute weighed in on what Governor Jack Markell should say in his state of the state address this week, and once again offered a scary estimate of the cost of renewable energy:

The "green" premium for regional cap and trade, offshore wind and solar power is poised to double the penalty we pay for electricity.

The sentence is lamentably imprecise. What is meant by the "penalty" we pay for electricity? Is it the total amount a customer spends? Some portion of the customer's bill? The so called green premium mentioned at the beginning of the sentence? A review of the Institute's recent output on energy does not answer these questions.

How can an organization that publishes such mush be taken seriously as a think tank? Previously the CRI has offered scary estimates of what renewable energy would cost, without showing how such numbers are calculated. The CRI declared just two weeks ago that "if all the legislated policies were in effect now, residential customers would be paying an extra $1000 a year," without specifying just just how this drastic hike in energy costs would come about.

Now we have an assertion that Delaware's renewable energy policies will double, well, something. If the CRI wants to inform the public and policymakers on energy policy, writing meaningful sentences would be a useful start. Then we could get back to critiquing the math.

Pat Todd's Environmental Advocacy

2011-01-16T20:55:00.001-05:00

I'm pleased to see that the News Journal has recognized Pat Todd for her advocacy for recycling and renewable energy. Pat was a driving force behind the bottle bill that was adopted in 1982. More recently, she was instrumental in making statewide recycling a reality in Delaware. She was a part of a delegation of environmentalists who made the case to Jack Markell that he should veto the Un-Bottle Bill passed in 2008, and use the opportunity to push for a statewide curbside recycling. She helped forge a deal that ended the old container deposit system to pass the new law, which she is working to implement as a member of the Recycling Public Advisory Committee.

I don't think it's an exaggeration to say that the old deposit law might never have passed were it not for her dogged determination thirty years ago. And when the time came to push for statewide recycling, Pat did all she could (which is quite a lot) to build a consensus for the new law. Her leadership and moral authority on the issue were critical to success on the issue.

Pat helped make the Delaware League of Women Voters an effective and omnipresent voice for sound environmental and energy policy in Legislative Hall. And she is part of an ongoing effort to foster closer collaboration among environmental advocates in Delaware. She has this knowing smile that lets you know she has seen it all before, but has never, and would never, let cynicism get in the way of her efforts to make Delaware a safer and cleaner place to live.

EPA Revokes a Mountaintop Removal Permit

2011-01-14T07:02:00.004-05:00

Mountaintop removal is mining by brute force. Entire mountains are blasted out of existence and the refuse dumped into what used to be creeks and rivers. Under the Bush administration, the practice was given a free pass on the water pollution it created.

Yesterday, as the New York Times reports, the EPA said no:

WASHINGTON — The Environmental Protection Agency revoked the permit for one of the nation’s largest mountaintop-removal coal mining projects on Thursday, saying the mine would have done unacceptable damage to rivers, wildlife and communities in West Virginia. It was the first time the agency had rescinded a valid clean water permit for a coal mine.

The scale of the damage is difficult to comprehend:

The project would have involved dynamiting the tops off mountains over an area of 2,278 acres to get at the rich coal deposits beneath. The resulting rubble, known as spoil, would be dumped into nearby valleys, as well as the Pigeonroost Branch, the Oldhouse Branch and their tributaries, killing fish, salamanders and other wildlife. The agency said that disposal of the mining material would also pollute the streams and endanger human health and the environment downstream.

This is the first time the EPA has revoked a permit for a coal mine. Arch Coal, the mining company that had requested the permit, promises to challenge the decision in court.

Coal provides cheap power, if we ignore the cost of damage to the earth, polluted streams, toxic air emissions and climate change. If all these costs were factored in, coal power would be much more expensive.

Living Up to Our Children's Expectations

2011-01-13T07:14:00.001-05:00

President Obama did what he does best in his speech last night. He called on us to lift our sights above the pettiness that pollutes our politics:

But what we can’t do is use this tragedy as one more occasion to turn on one another. As we discuss these issues, let each of us do so with a good dose of humility. Rather than pointing fingers or assigning blame, let us use this occasion to expand our moral imaginations, to listen to each other more carefully, to sharpen our instincts for empathy, and remind ourselves of all the ways our hopes and dreams are bound together.

Calls for civility after the shooting on Saturday were degenerating into complaints about others not being civil enough. Civility was becoming another club to beat your political opponents with.

Obama finished with a plea to see our country through the eyes of Christina Taylor Green, who was born on September 11th, and was killed in the shooting on Saturday:

She had been elected to her student council; she saw public service as something exciting, something hopeful. She was off to meet her congresswoman, someone she was sure was good and important and might be a role model. She saw all this through the eyes of a child, undimmed by the cynicism or vitriol that we adults all too often just take for granted.

I want us to live up to her expectations. I want our democracy to be as good as she imagined it. All of us – we should do everything we can to make sure this country lives up to our children’s expectations.

It was like chastising the rude parents at a little league game for behaving worse than the kids. President Obama used the example of a little girl to urge us all to behave more like grownups.

Chancery Court Upholds Delaware's Recycling Law

2011-01-10T07:08:00.002-05:00

The Department of Natural Resources and Environmental Control (DNREC) announced Friday that Chancery Court had dismissed a challenge to the state's new recycling law by the Positive Growth Alliance (PGA).

The central point to the suit was the question of whether the General Assembly had properly enacted the four cent bottle fee. The plaintiffs asserted that the fee was a tax, and thus SB 234 should have originated in the House and required a 3/4 majority. The Court found that the law was enacted properly.

But beyond that particular question, the PGA had raised broader questions about the new law. The suit asserts that "the passage of SB 234 represents an unwarranted expansion and abuse of the police powers of the State of Delaware."

The law itself does not mention any police powers, and there are no penalties for residents that don't separate their recycling from the rest of their trash. As the News Journal reports, PGA director Rich Collins is not letting up on his rhetoric:

"It is a clear warning, as the years go by and the precedents build up and the assumption that the state always has the benefit of the doubt, that it's inevitable that the Constitution and the ability to enforce it will get weaker and weaker," Collins said.

I just can't see how enacting statewide recycling threatens our constitutional form of government. The law was passed in accordance with the democratic institutions established under the state constitution, and upheld by the respected Chancery Court.

The state has regulated trash collection for decades, and requires municipal solid waste to be delivered to the Delaware Solid Waste Authority. There is good reason for this: unregulated landfills pose a clear risk to public health. The recycling law doesn't mandate a new "marginally related service," as the suit asserts. As I said in September, the only difference that I can see is that the same trucks will deliver material to a recycling facility on Tuesday and to a landfill on Friday.

Governor Jack Markell stressed the practical economic and environmental benefits of statewide recycling:

"A broad and bipartisan coalition of businesses, community groups and individuals came together to turn the possibility of statewide recycling into a reality. We're pleased with the decision," said Delaware Governor Jack Markell. "The effort reduces waste, reduces the need for costly landfill expansions in the future and makes recycling easier for most and more available across the state."

Given that the state has already regulated trash disposal for decades, it seems to me a prudent step to slow the accumulation of trash in expensive landfills by diverting recyclable materials.

Born on the Eleventh of September

2011-01-09T13:41:00.000-05:00

Yesterday, Gabrielle Giffords, a member of Congress, was shot and gravely wounded. Six others, including John M. Roll, a federal judge, were killed. The New York Times reports that the dead included a nine year old girl, Christina Taylor Green, who was born on September 11, 2001 in nearby West Grove, Pennsylvania:

She was special from birth because she was born on Sept. 11, 2001, and she was proud of it, her mother said, because it lent a grace note of hope to that terrible day.

“It was an emotional time for everyone in the family, but Christina’s birth was a happy event and made the day bittersweet,” her mother said in a telephone interview from their Tucson home.

Indeed, Christina, who was born when the family was living in West Grove, Pennsylvania, was one of the 50 “Faces of Hope” representing babies from 50 states who were born on 9/11. Their images were printed in a book, with some of the proceeds used to raise money for a 9/11 charity.

The girl, who was on her school's student council, was shot through the chest.

The CRI and Environmental Issues

2011-01-06T07:12:00.004-05:00

David Stevenson of the Caesar Rodney Institute has put out three more installments in his effort to spark a backlash against renewable energy in Delaware. I'm too busy to go through them point by point just now, so I thought I would refer back to the CRI's history on environmental issues.

Last spring the CRI offered an analysis of SB 234, which establishes statewide curbside recycling in Delaware, which I found fatally flawed:

I have found three fundamental flaws in his work, and conclude that it is his analysis that doesn’t add up.
Mr. Stevenson’s analysis uses participation rates and cost estimates of older and far less efficient programs to project the success and cost of universal curbside recycling. He compounds these errors by offering a lowball estimate of the cost of landfilling. These three errors each amount to about an order of magnitude, and together render his conclusions almost completely unreliable.

Stevenson followed up in August with a critique of Bluewater Wind proposal that asserted (without much basis) that offshore wind would cost 60 percent more than conventional power, an assertion repeated earlier this week. At the time, I encouraged the staff at CRI to do their homework, but I have not seen much improvement in the quality of their work.

We've seen this time and again: The opponents of renewable energy will maximize the costs and minimize the benefits. The Caesar Rodney Institute's efforts to portray the opponents of renewable energy as the hard-headed realists in the debate would be more convincing if the organization were better at hard-headed analysis.

The CRI's Wild Math on Delaware's Energy Policy

2011-01-03T17:20:00.002-05:00

The Caesar Rodney Institute (CRI) has launched a new series of articles which author David Stevenson promises will challenge the “flawed assumptions” he says underlie Delaware’s energy policies. Stevenson asserts that “if all the legislated policies were in effect now, residential customers would be paying an extra $1000 a year,” without (as yet) providing any basis for the projection.

It’s a tactic that will seem all too familiar to those who remember the fight over offshore wind power, when opponents offered scary estimates of the cost of the Bluewater Wind project as high as $75 per month for residential customers.

Of course, these estimates were not anchored to any disinterested analysis, such as that by the Public Service Commission consultant, which finally projected the levelized cost of the Bluewater Wind contract to be 70 cents per MWh (0.07 cents/kWh) over the 25 year life of the deal. Based on average electricity use, this would come to 65 cents per month or $7.82 per year. (This figure could go up or down a few dollars depending on the trajectory of fossil fuel prices over the next three decades.) Happily, the overwhelming majority of Delawareans who voiced their opinion on wind power didn’t believe the scary numbers.

Since the CRI hasn’t yet shared the basis for its figure of $1,000 a year, I thought I would help out by calculating some benchmarks on residential energy use in Delaware.

According to the Energy Information Administration (EIA), residential electricity sales in Delaware totaled 4,428 thousand MWh (1,000 kWh) in 2008. When divided among Delaware’s 396,222 households in 2009 (U.S. Census Bureau), that comes to 11,175 kWh per home, which multiplied by the EIA’s average residential price for Delaware of 14.18 cents/kWh, comes to an annual bill of $1,585 per household.

Put another way, the CRI is telling us that Delaware's legislated energy policies will lead to an eye-popping 63 percent increase for the average household electricity bill. If we take the the PSC’s projected cost of the Bluewater Wind project of $7.82 per year as a starting point, we are left with a further $992.18 a year that Delaware's energy policies would cost the average household, according to the CRI. Stay tuned.

Back to Court for the EPA and Greenhouse Gas Regulations?

2010-12-30T07:11:00.003-05:00

The Post Carbon blog at the Washington Post reports that Fred Upton, the incoming chair of the House Energy and Commerce Committee, doesn't want the EPA to implement regulations to control greenhouse gas emissions. Upton and Tim Phillips of the industry group Americans for Prosperity published an op-ed in the Wall Street Journal (which is behind a firewall). They seem to think the issue needs to be litigated further:

Upton and Phillips complain that EPA -- despite the regulatory power given to it in 2007 under a Supreme Court interpretation of the Clean Air Act -- should await the outcome of further litigation about the way EPA is going about exercising that regulatory authority.

To recap, the Supreme Court handed down a decision that the EPA was required to act on GHG emissions based on a law passed by Congress, the Clean Air Act. The Bush administration argued the case and lost. Meanwhile the planet continues to heat up, as Dave Leonhardt writes in his New York Times blog:

2010 remains on pace to be the hottest or second-hottest year ever recorded, according to NASA.

The chart, which represents thousands of measurements, shows a clear upward trend in the last 30 years.

Why the Opposition to Michelle Obama on Child Obesity?

2010-12-27T07:50:00.004-05:00

Writing in the Washington Post, Fred Hiatt laments the opposition to Michelle Obama's efforts to reduce child obesity:

The obesity epidemic is a genuine public health emergency, with vast implications for the nation's well-being, economy and even national security. And yet, could anyone really be against children eating healthier food and getting more exercise? Could anyone really object to White House assistant chef Sam Kass trying to interest Elmo in a vegetable-laden burrito?

Well, yes, if Michelle Obama is for it, someone will be against it. Someone like Glenn Beck, for example, who was moved to rail against carrot sticks, or Sarah Palin, who warned that Obama wants to deprive us all of dessert.

And as Hiatt points out, the First Lady isn't pushing for more government programs:

Insinuations from her critics notwithstanding, Obama has not endorsed nanny-state or controversial remedies such as ending sugar subsidies, imposing soda-pop taxes or zoning McDonald's out of certain neighborhoods. Instead, she is pushing for positive, voluntary change: more recess and physical activity, more playgrounds, more vegetable gardens, fresher food in schools and grocery stores, better education on the issue for parents and children.

All of this makes total sense, and historians will marvel (much as they will at climate-change deniers) that anyone could doubt it.

This report from HealthyAmercians.org has plenty of alarming statistics on childhood obesity:

More than two-thirds of states (38) now have adult obesity rates above 25 percent. Eight states have rates above 30 percent – Alabama, Arkansas, Kentucky, Louisiana, Mississippi, Oklahoma, Tennessee and West Virginia. In 1991, no state had an obesity rate above 20 percent. In 1980, the national average of obese adults was 15 percent.

Of course obesity creates serious lifelong health problems for children. According to the report, obese children are twice as likely to die before age 55 compared to healthy weight children. More than 80 million Americans now have type 2 diabetes or a pre-diabetic condition.

Were this any other condition, we would be hearing a lot more about a public health crisis. And yet, when Michelle Obama raises the issue, she gets ridiculed by Glenn Beck and Sarah Palin.

The Marx Brothers and Christmas

2010-12-24T10:28:00.000-05:00

What would Christmas be without the Marx Brothers and a long legal document?

From the movie, A Night at the Opera:

CHICO: Hey, wait, wait. What does this say here, this thing here?
GROUCHO: Oh, that? Oh, that's the usual clause, that's in every contract. That just says, uh, it says, uh, if any of the parties participating in this contract are shown not to be in their right mind, the entire agreement is automatically nullified.
CHICO: Well, I don't know...
GROUCHO: It's all right. That's, that's in every contract. That's, that's what they call a sanity clause.
CHICO: Ha-ha-ha-ha-ha! You can't fool me. There ain't no Sanity Clause!

YouTube has the scene.

Merry Christmas.

More on Sarah Palin, Michelle Obama and Food

2010-12-23T07:13:00.003-05:00

I'm not alone in criticizing Sarah Palin's snide criticism of Michelle Obama's efforts to improve child nutrition. The Huffington Post reports that Mike Huckabee, who could compete with Palin for the Republican presidential nomination, took exception with Palin's comments:

"With all due respect to my colleague and friend Sarah Palin, I think she's misunderstood what Michelle Obama is trying to do," Huckabee said Tuesday during a radio appearance the "Curtis Sliwa Show."
...
"Michelle Obama's not trying to tell people what to eat or not trying to force the government's desires on people," Huckabee said. "She's stating the obvious, that we do have an obesity problem in this country."

The Huffington Post article cites these alarming statistics from the Centers for Disease Control:

Childhood obesity has more than tripled in the past 30 years. The prevalence of obesity among children aged 6 to 11 years increased from 6.5% in 1980 to 19.6% in 2008. The prevalence of obesity among adolescents aged 12 to 19 years increased from 5.0% to 18.1%.

Closer to home, Dave Burris also noted the difference between coercion and encouragment and offered a national security argument:

Tom -- I agree. It's a childish approach, especially considering they misrepresented what Michelle Obama said.

Not only that, but there are some who would argue that childhood obesity is a national security issue.

I'd be the first one to stand up against the government dictating what we can and can't eat, but I'll also be one who stands and applauds an effort to encourage parents and kids to make better choices.

Michelle Obama, Sarah Palin and Vegetables

2010-12-21T17:20:00.002-05:00

Washington Post columnist Jennifer Rubin stopped me cold with her first sentence in this recent piece:

First Lady Michelle Obama's fondness for food hectoring is annoying in two respects.

Apparently Rubin takes exception with the First Lady’s advocacy for healthy eating, and shows her dislike with the use of the verb hectoring, as though Michelle Obama were right there at the dinner table wagging her finger at the kids.

I learned in ninth grade social studies to watch out for loaded words in political rhetoric—a lesson that Rubin, a recent addition to the venerable paper's lineup of columnists, may have missed. Call me old-fashioned, but I was taught that an effective political communicator should persuade, instead of simply venting. But for far too many professional communicators, snide is the new clever.

After catching my breath, I finished the column and discovered that Rubin thinks child nutrition is "trivial stuff." Tell that to the growing number of young Americans entering adulthood with decades of diabetes ahead of them.

Rubin’s space at the Post, which is called Right Turn, seems to me designed to replicate the tone of the cable news rantings I do my best to avoid. Perhaps the Post has found a place for such dreck in an attempt to seem relevant to the D.C. political class that keeps the boob tube on all day to ensure they don’t miss even a moment of incivility.

Rubin is joined in her disdain for food policy by another Post columnist, Alexandra Petri, who lets go with this soul-satisfying tirade:

Like most of America, I am functionally a six year-old child, and I will eat whatever I want to eat. Michelle wants me to move and eat greens? She can take those greens and shove them! Sarah's making me s'mores!

I'll get to Sarah Palin in a moment. But first: Who turned the opinion pages of one of the country’s great newspapers over to functional six year-olds? As for Palin, she did indeed take a swipe at the First Lady on her television show:

"Where are the s'mores ingredients? This is in honor of Michelle Obama, who said the other day we should not have dessert."

For the record, I have not heard the First Lady lead the charge to banish dessert from the dinner table. But back to Petri:

"Eat your vegetables!" President Obama says, metaphorically, pointing to a complicated series of graphs about health-care reform. Eat your vegetables! The New START Treaty needs to pass! Eat your vegetables! The deficit needs to be reduced, somehow! Eat your vegetables!

Enough of this serious policy, already. I want dessert! Who wants to actually govern the country, when we can all just chat about the latest bit of sarcasm from Sarah Palin? Rubin and Petri (or Palin for that matter) may not have the patience for the hard work it takes to make kids healthier, make the country safer or reduce the deficit. But for me at least, and for millions of voters, these are the reasons we have a national government. (Jonathon Capehart, one of the grinds at the Post who does policy, asks if this flippancy has anything to do with Palin's unfavorable ratings in the polls.) The grownup work of actually governing can’t be made any easier by the grade school snickering from the back of the class.

The Justice Department Sues BP

2010-12-16T12:39:00.005-05:00

The Guardian's opinion website, Comment is free, has my quick take on the Justice Department's civil lawsuit against BP and other companies involved in the Deepwater Horizon explosion and oil spill:

A disaster as large as the Deepwater Horizon oil spill in the Gulf of Mexico cannot be remediated through the courts – but we can still sue the bastards. This is America, after all.

While the suit may take years to wind its way through the courts, it has already had an effect on BP:

BP's shares fell 3% on the news of the lawsuit. With luck, the oil and gas companies' risk managers will look at the numbers and tell the engineers to tighten up on their safety procedures.

Three percent is a big drop in one day. Maybe the smart money will notice and force oil and gas companies to be more careful.

TommyWonk to Speak at RPAC Meeting

2010-12-14T16:52:00.001-05:00

Just because I have been quiet recently, it doesn't mean I have been idle. I have been working hard to keep up with my various committees, task forces and work groups.

Next up for me is the Recycling Public Advisory Committee (RPAC) meeting tomorrow. I have been invited to make a presentation on the economics of recycling. (You can go to some old posts for more on the economics of landfill diversion and single stream collection and processing.)

RPAC meets tomorrow, Wednesday, Dec. 15, from 1:30 to 3:30 p.m., at the Brandywine Hundred Public Library, 1300 Foulk Road, Wilmington.

NRG's Use of Tax Exempt Bonds

2010-12-07T07:00:00.001-05:00

As I pointed out last week, the expected reductions from NRG's Indian River Power Plant will result in Delaware's air emissions being reduced by roughly one half in the next three years. So who pays for the cleaner air?

The short answer is NRG and its shareholders. But what about the tax exempt bonds NRG will use to finance the $366 in new controls it is installing? What is the cost to taxpayers of the $57 million in recovery bonds and $190 in state sponsored revenue bonds?

The recovery bonds were created by ARRA, the American Recovery and Reinvestment Act passed last year. Because the bonds are tax exempt, there is some loss of federal tax revenue from investors. But if the recovery bonds create financing where none previously existed, the loss is hypothetical. Remember, investment was down drastically two years ago, and has still not fully recovered. You can't tax nonexistent investment activity.

What about the state revenue bonds, which are also tax exempt? The state is not on the hook to investors, though there is lost tax revenue involved. The state is limited in the amount of revenue bonds it can issue, so the key question in allocating the bonds is a question of judgement: What would be the best use of the bonds? Allocating bonds to one business precludes the availability of financing to another.

Leah Hoenen, writing in the Cape Gazette, caught an important detail in the deal. The Delaware Economic Development Office (DEDO) is charging NRG $950,000 for use of the revenue bonds. Its a good deal for NRG, which gets a hefty chunk of low cost financing, and for DEDO, which gets cash back to replenish its coffers for use on the next economic development agreement.

Air Emissions Reductions: Where's the Cost?

2010-12-04T12:40:00.005-05:00

Opponents of clean energy, and of environmental benefits in general, often object to the economic cost of reducing pollution. Wednesday, I reported that Delaware's air emissions from industrial sources are on course to fall by 60 percent in the next three years.

Here's what I'm wondering: Where's the economic harm? How will Delaware's economy suffer? In what ways will our standard of living be affected?

A 60 percent reduction in emissions is a big deal. According to the standard objections, a reduction of this magnitude should come with a big economic cost. And yet I don't see it. You might think of it as the dog that didn't bark in the night.

Coming Reductions in Delaware's Air Emissions

2010-12-01T17:41:00.003-05:00

Delaware is poised to see a radical reduction in air emissions over the next three years. Recently reported developments at Delaware's dirtiest power plants promise to reduce the state's total air emissions from industrial sources by more than half by 2013.

Earlier this year, the Texas based energy firm Calpine bought the Edge Moor Energy Center from Pepco Holdings, Inc. Two weeks ago, the News Journal reported that Calpine has already converted the plant from coal power to natural gas.

The News Journal reports that NRG has been authorized to issue $57 million in tax exempt recovery bonds by Sussex County as part of the firm's plans to invest $366 million in emissions controls in its Indian River Power Plant. The state had already authorized the issuance of $190 million in revenue bonds for the project. These bonds will be backed by NRG, and will not incur any state or local government liability.

NRG has already committed to shutting down the three older units at the plant, with the last to go off line by 2013, and estimates air emissions will be reduced by as much as 93 percent. The News Journal reports that Bill Zak of Citizens for Clean Power is delighted with NRG's plans: "On balance, it's a marvelous development. It's going to be fantastically cleaner."

Zak is not exaggerating the significance of the plan. According to Delaware's 2009 Toxic Release Inventory, the Indian River Power Plant accounted for 55.2 percent of total industrial air emissions in the state. The two power plants together accounted for 72.8 percent of total air emissions.

If NRG meets its projection for reductions at Indian River, Delaware's total air emissions would be cut by 51.3 percent by 2013. I don't have data from Calpine on expected reductions at Hay Road, but if emissions there were cut in half, Delaware's total emissions would be cut by 60 percent in the next three years. Calpine's total emissions may not be cut as sharply, as the company plans to add a gas powered unit designed to come on line as needed to meet demand.

John H. Noyes: 1922 to 2010

2010-11-22T20:23:00.011-05:00

John Noyes, age 87, of Kennett Square, PA and Wilmington, DE, passed away on November 18, 2010. He was a devoted family man, churchman, artist, naval officer, and marketing and communications professional.

Born in Akron, OH to Eugene and Marian Noyes, he was a competitive swimmer and active in scouting – the youngest Eagle Scout in Akron Council history. He served as an instructor at the Boy Scout and Red Cross national aquatic schools, and visited Washington, DC with Akron Area Boy Scouts in 1936, after the National Jamboree was cancelled by a polio epidemic. Graduating from Western Reserve Academy, he entered Wesleyan University in Middletown, CT and received his BA in 1944.

Commissioned an Ensign in the U.S. Navy in early 1944, he served as communications and sonar officer aboard USS Shannon, a high-speed destroyer-minelayer. He saw action at Iwo Jima (where he witnessed the flag raising on Mt. Suribachi), Okinawa, the East China Sea, and the occupation of Japan. The Shannon was the first U.S. Navy ship to enter Nagasaki after the atom bomb, and symbolically accepted the Japanese commandant's surrender. He was promoted to Lt. (JG), and wrote, illustrated, and published a history of his ship, Saga Shannon.

His 60-year career as a man of letters and graphics expression spanned several pursuits. Immediately after World War II, he worked as a reporter, editor, radio newscaster, and capital fund-raiser for Wesleyan. Joining DuPont in 1955, his 30 years as a marketing and communications executive included product lines that ranged from textiles and elastomers to analytical and process instruments, hyper-pure silicon, and exotic metals. As a DuPont spokesman, he spoke on the company's corporate mission and philosophy, and the importance of scientific research. After DuPont, he pursued three overlapping, follow-on careers as president of Noyes Associates, Inc. (a marketing and communications firm); as a consultant with Monkman International (high tech consulting and management); and for 15 years as a professional model and actor in print and TV advertisements. He also served as an officer and director of two family-owned newspapers: the Marinette (WI) Eagle-Star and Ironwood (MI) Daily Globe.

John's faith, family, and service to others were most important for him. He was a direct descendant of The Rev. James Noyes, who immigrated to Massachusetts in 1634. James' son became the senior founding trustee of Yale University, and its first chaplain. John was a lifelong Episcopalian and member, since the late 1950s, of Christ Church Christiana Hundred, where he sang in the St. Cecelia Choir for 29 years. He served as a vestryman (two terms), lay reader, Eucharistic minister and visitor, and on many committees, including chair of the Every Member Canvas and of the Liturgy Committee. He also served two terms on the Diocesan Council, chaired its Outreach Division, and was a long-time member of the diocesan editorial board.

Thanks to the Academy of Lifelong Learning at the University of Delaware, he became an avid and accomplished artist, with more than 50 finished oil paintings and several public shows. He was also a world traveler, mostly in retirement years, and visited much of the United States, Europe, the Mediterranean, Scandinavia, Russia, Japan, China, Thailand, Australia, and Bahrain in the Persian Gulf.

In 1951, John married Clarabel Grier (Chinx) of Middletown, OH. They have four children: Nancy (husband Captain Evan Robinson, USN, retired); Janet (life partner Barbara Dakota); Thomas (wife Lore); and Frank (wife Christine); five direct grandchildren: Virginia and Nicholas Robinson; and Patrick, Tyler and Tara Noyes; and a step-granddaughter Teneik Martin.

A Memorial Service will be held at Christ Church Christiana Hundred, Greenville, DE, on Saturday, November 27, at 11 am. In lieu of flowers, donations may be offered to the Kendal Reserve Fund, Kendal at Longwood, Kennett Square, PA, and Christ Church, Christiana Hundred, Greenville, DE.

Greens as the Defenders of Civilization

2010-11-17T15:40:00.004-05:00

Stewart Brand, founder of the Whole Earth Catalog, writes on page one of his book, Whole Earth Discipline:

Activist Bill McKibben recently noted: “The environmental movement has morphed steadily into the climate change movement.” That means that Greens are no longer strictly the defenders of natural systems against the incursions of civilization; now they’re the defenders of civilization as well. It’s a whiplash moment for everyone.

So much of the resistance to acting on climate change comes from fears that shifting to green energy will reduce our standard of living. To the contrary, I see green energy as protecting our standard of living from environmental degradation and the inevitable rising cost of fossil fuels. I don't think many people would see the point of rebuilding our energy economy if only polar bear habitats were at risk. I worry more about human habitats, including the thousands of homes in Delaware's coastal floodplains that will be lost when the seas rise.

I would like more opponents of action on climate change to see that it's not the polar bears we're worried about. And I would like environmentalists to get better at talking about protecting human systems, and not just natural systems.

Bridging the Gap on Climate Change

2010-11-15T17:06:00.003-05:00

I'm back from my brief hiatus from blogging, looking at a more difficult political landscape (except in Delaware, of course).

Tom Toles offers this glum perspective on bridging the gap between climate activists and the denial crowd.
It is a sharp divide. Bridging it will require some rethinking on both sides of the chasm—a subject I intend to discuss. Mind you, I am not one who thinks the truth lies somewhere in the middle. But I do believe we have to take a fresh look at the issue. Stay tuned.

Time Away

2010-11-08T12:08:00.003-05:00

I am taking the week off from blogging to attend to other matters. While I do, may I suggest reading books?

I find it useful to break away from the ceaseless chatter of our public discourse and delve into the larger universe of ideas that can be found on a bookshelf. You might too.

Return Day, Civility and the Delaware Way

2010-11-06T09:20:00.002-04:00

The News Journal reports that Christine O’Donnell didn’t quite catch the spirit of the occasion on Return Day:

After the ceremonial hatchet was buried, O'Donnell remained on the offensive, saying in an interview that the Republican Party and U.S. Rep. Mike Castle, who lost to O'Donnell in a bitter Republican primary, threw the first negative punch. She then made an issue that Castle left the stage before the hatchet was buried.

"It needs to be pointed out that they blew out the Delaware Way long before we did," O'Donnell said. "The Delaware Way was about who the party anoints to run for office, as opposed to who the people choose to run for office. One change that came from this is the people will now decide, and I think that's a great thing."

Begging your pardon, Ms. O’Donnell, but voters here have been deciding primary elections since well before you came along. Recently, for instance, there was a tightly contested Democratic primary for governor, which despite some dire warnings, did not tear the party apart. Instead, I distinctly remember John Carney voicing his support for Jack Markell without even a moment's hesitation. Two years later, Carney is heading to Congress, and Delaware Democrats are stronger than ever. Maybe there’s something to this civility thing after all.

One official at Return Day offered this defense of our political folkways:

Georgetown Mayor Brian Pettyjohn, a Republican, used his prepared remarks during the ceremony as an opportunity to rebut O'Donnell's accusation that politics is about backroom deals and cronyism.

"I've heard a lot this year about the Delaware Way and how bad it is for our state," Pettyjohn said. "The Delaware Way is a realization that we live in a small state. We live in a state where you may have gone to school with your opponent. It may be your neighbor. It may be your friend, or you may be related to your opponent."

One of the bloggers at Delaware Politics put up a post titled “The Blame Game,” which prompted a long series of comments from Jonathon Moseley, who identifies himself as O’Donnell’s 2008 campaign manager. In the course of a long diatribe, Moseley uses variations on the phrase “stab in the back” four times, says Delaware's failure to embrace O'Donnell has hit “a raw nerve far beyond Delaware,” and goes on to ask the rhetorical question, “Why did conservatives nationwide jump in to play in your Delaware sandbox?”

Mr. Moseley, Delaware is a state, not a sandbox. Return Day may seem anachronistic to some who like their politics rude and raw, but the custom is an important part of our tradition of self government that dates back to before the time when Delaware became the first state to ratify the Constitution.

Rudeness and incivility are not emblems of sincerity of belief, but of rudeness and incivility. Self-government requires that we be able to submit to the legitimate authority of government, even if it means being polite to those with whom we disagree.