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Let consumers, not bureaucrats decide our country’s energy future

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By Phil Kerpen & Steve Lonegan
Published March 08, 2012
FoxNews.com

While President Obama is trying futilely to convince the American people he supports an “all of the above” energy policy, he has remained stubbornly committed to vast subsidies for unproven, expensive technologies like wind.

Obama has repeatedly described his intention to increase wind subsidies “doubling down,” an appropriate use of gambling terminology.

The U.S. Senate will likely be put on record soon on amendment votes to extend wasteful, expensive subsidies for windmills and to create vast new subsidies for natural gas vehicles. These votes will tell us which senators, like the president, want to double down on a losing hand and which think it might be time to try a free market energy policy.

Sadly, it is hardly a given that Republicans will oppose massive taxpayer-funded giveaways to favored energy players. The clearest evidence of that comes from New Jersey, where Governor Chris Christie has led the way on a disastrous proposed offshore wind scheme.

New Jersey’s offshore wind boondoggle was authorized by the Offshore Wind Economic Development Act, signed into law by Gov. Christie in 2010. A cost analysis of the act conducted by the Beacon Hill Institute at Suffolk University concluded that the wind project would cost the state as much as $4.1 billion, drive up electricity rates up as much as 4.2% and cost up to 4,440 jobs. More recently a consulting firm hired by state officials to analyze the bid from Fishermen’s Atlantic, LLC to construct the project found that it would result in the loss of almost 30,000 jobs, and drive up electricity rates by $286 million.

With hefty federal subsidies for wind in place, such boondoggles will continue to spring up around the country. Fortunately, the principal federal subsidy for wind, the so-called Production Tax Credit (PTC) is scheduled to expire at the end of this year. Unfortunately, the Senate will soon vote on extending this giveaway, despite the fact that wind is second only to solar in subsidies and is highly suspect both economically and environmentally.

While Obama tells us it’s time to end the outrageous subsidies for fossil fuels, the facts are the vast majority of subsidies go to wind and solar. — In 2010, subsidies per megawatt-hour were $0.63 for natural gas, $0.64 for coal, $52 for wind, and $968 for solar.

Instead of looking at those numbers and concluding it’s time to pull the plug on wind subsidies and even more scandalous solar subsidies, some Washington politicians look at them and conclude we need to massively increase subsidies for natural gas.

The Senate is poised to vote on doing just that, on an amendment that would add the provisions of the so-called Nat Gas Act to the surface transportation bill. This amendment, sponsored by New Jersey’s Senator Robert Menendez, would provide hefty subsidies – up to $64,000 per truck – to subsidize the conversion of vehicles to natural gas.

The bill, sadly, has bipartisan support, including from Republicans like Senator Richard Burr of North Carolina, who apparently believes that the only difference between Republicans and Democrats is which industries they prefer to choose to lavish with special giveaways.

The consequences of huge subsidies to shift natural gas into the transportation sector are easy to foresee. If we artificially boost demand at taxpayer expense, prices will go up. That means higher natural gas bills for home heating bills, and it means higher prices for all the industries that use natural gas as a feedstock.

Just as ethanol subsidies rippled through corn prices to higher food prices, natural gas subsidies would have economy-wide effects through higher prices for chemicals, plastics, and fertilizers.

Moreover, with natural gas prices collapsing thanks to the fracking revolution, these subsidies are wholly unnecessary.

As long as the EPA and overzealous state regulators can be kept at bay, natural gas vehicles will come to market without subsidies. In fact, this week Chrysler and General Motors announced duel-fuel pick-up trucks that run on both compressed natural gas and gasoline.

Why not let consumers decide if they want these vehicles, instead of putting a government thumb on the scale at a cost of billions of dollars?

In the aftermath of Solyndra, politicians should recognize that its time to pull the plug on energy subsidies, scale back on onerous regulations, and let consumers, not bureaucrats, decide our country’s energy future. The U.S. Senate should therefore reject both on the PTC and Nat Gas amendments.

Phil Kerpen is vice president for policy at Americans for Prosperity and the author of “Democracy Denied” (BenBella Books, 2011). Steve Lonegan is executive director of Americans for Prosperity – New Jersey.

Read more: Fox News

USA: Fight for Nantucket Sound Continues

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You could almost detect the gritty glee in Audra Parker’s statement when, as president of the Alliance to Protect Nantucket Sound, she said: “This represents a major setback for an already struggling project,” regarding the recent appeals court decision — the alliance filed the appeal — that further delays the implementation of the country’s first offshore wind farm, Cape Wind.

Like Ali and Frazier, this represents another round in the epic battle of Sound vs. Wind.

The decision rendered on Oct. 28 by the U.S. Court of Appeals for the District of Columbia (former members include John Roberts and Ruth Bader Ginsburg) is important because the court is considered the second most important behind the Supreme Court.

Principally, because of its “often exclusive jurisdiction” to hear “challenges to … environmental protections” issued by federal agencies, such as the Federal Aviation Administration, Cape Wind is running out of legal options. The FAA is now required to further review the project — it has reviewed the matter for eight years — to determine (as it has previously done) that the turbines pose no threat to aviation.

With aerial anticipation, the alliance is sensing a final knock out.

Citizen advocate groups, single-issue social artifacts, like the alliance, are typically created to profess opposition to, raise awareness of, and are ultimately organized for, elimination of public projects (ironically, created for public benefit) or societal ills, of which, locally, Cape Wind is public enemy No. 1.

For the alliance and its neighboring cousin, Windwise-Cape Cod, among others, rejection is often an easier form of political expression than proposition. The statements they make and alternatives they offer are overly simplistic and are sometimes consumed with more emotion and hyperbole than intelligence and should be challenged as much as the assumptions offered by Cape Wind and other wind projects.

Sheila K. Bowen, president of Windwise, recently wrote of industrial turbines that “they are not environmentally responsible.” Does any thoughtful person, who is serious about energy policy, especially “green” or “clean” energy, really believe that? With that line of reasoning one should come to the same conclusion that the use of combustion engines in school buses, emitting carbon monoxide and hydrocarbons, is also not “environmentally responsible.” Stop the buses!

The alliance says “other green initiatives like energy efficiency and alternative power sources, including land-based wind and hydro, can provide power and save the environment at half the cost of Cape Wind.” Preposterous. Do they factor into their calculus that significant upgrades (read, cost) need to be made to transmission lines from an already taxed grid, from places like Maine and Vermont?

Further still, they also support land-based wind projects “when appropriately sited” and in the “general interests of the local community.”

Additionally, “land-based wind is often more favorable than offshore wind due to better economics, less risk and the existence of a regulatory process.” Translation: not happening. Ask the residents of Brewster, Bourne and Falmouth if they believe there are favorable, appropriate sites in their towns.

Should Cape Wind proceed, the alliance believes, citing what should be a questionable Beacon Hill Institute study, that “a loss in property values of $1.35 billion” can be expected and “a reduction in tourist spending of $57 million to $123 million” should be feared.

Finally, the alliance touts “upgrades to existing power plants” (will Parker agree to pay more for the cost?), “deep-water sites” (think Deepwater Horizon), “management of consumer demand patterns through peak-load sharing or shifting” (elaborate how) and “renewable options that can produce constant, reliable generation with lower transmission costs” (what are the options?).

The reality is that there are few options. But Cape Wind, perhaps not economically proficient at the moment, is a viable one. Solar energy provides a cost of nearly double that of offshore wind energy and recent bankruptcies of Evergreen and Solyndra — financed with taxpayer dollars at the local and national levels — is rarely mentioned by those opposed to Cape Wind as a sensible option. Nuclear energy, in the wake of the Fukushima Daiichi troubles, does not seem politically expedient either.

So, opponents of Cape Wind, provide better, more detailed options for powering our homes, gadgets and lifestyles, considering our increasing, insatiable demand.

As Sound and Wind take to their respective corners, it is not known when the next round will be, but it is certain that the match, like all fights, will be determined by judges. Sadly, that is a reflection of our flawed and failed energy policies.

James P. Freeman of Orleans is a financial services professional.

By James Freeman (capecodonline)

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