Global Warming Overreach

Congressman Henry Waxman played to the crowds this week with high-profile hearings designed to boost his climate legislation. To listen to the Energy and Commerce committee chair, a House global warming bill is all but in the recyclable bag.

To listen to Congressman Jim Matheson is something else. During opening statements, the Utah Democrat detailed 14 big problems he had with the bill, and told me later that if he hadn’t been limited to five minutes, “I might have had more.” Mr. Matheson is one of about 10 moderate committee Democrats who are less than thrilled with the Waxman climate extravaganza, and who may yet stymie one of Barack Obama’s signature issues. If so, the president can thank Democratic liberals, who are engaging in one of their first big cases of overreach.

Not that you couldn’t see this coming even last year, when Speaker Nancy Pelosi engineered her coup against former Energy chairman John Dingell. House greens had been boiling over the Michigan veteran’s cautious approach to climate-legislation. Mr. Dingell’s mistake was understanding that when it comes to energy legislation, the divides aren’t among parties, but among regions. Design a bill that socks it to all those manufacturing, oil-producing, coal-producing, coal-using states, and say goodbye to the very Democrats necessary to pass that bill.

Such sense didn’t deter Mrs. Pelosi, who first tried an end-run around Mr. Dingell in 2007 by putting Massachusetts Rep. Edward Markey in charge of a new global-warming committee. When that didn’t get her a bill, she helped her fellow Californian, Mr. Waxman, unseat Mr. Dingell. Environmentalists threw a party, and the Waxman-Markey duo got busy on legislation to please their coastal crowds.

Cap and trade was already going to be a brawl, but the two upped the ante by including tougher targets and restrictions. If that weren’t enough, they rolled in every other item on the green wish list: a renewable electricity standard; a low-carbon fuel standard; a broader renewable fuels policy; new efficiency standards. Any one of these is a monumental fight on its own. Put together they risk an intra-party committee mutiny.

There’s Mr. Matheson, chair of the Blue Dog energy task force, who has made a political career championing energy diversity and his state’s fossil fuels, and who understands Utah is mostly reliant on coal for its electricity needs. He says he sees several ways this bill could result in a huge “income transfer” from his state to those less fossil-fuel dependent. Indiana Democrat Baron Hill has a similar problem; not only does his district rely on coal, it is home to coal miners. Rick Boucher, who represents the coal-fields of South Virginia, knows the feeling.

Or consider Texas’s Gene Green and Charles Gonzalez, or Louisiana’s Charlie Melancon, oil-patch Dems all, whose home-district refineries would be taxed from every which way by the bill. Mr. Dingell remains protective of his district’s struggling auto workers, which would be further incapacitated by the bill. Pennsylvania’s Mike Doyle won’t easily throw his home-state steel industry over a cliff.

Add in the fact that a number of these Democrats hail from districts that could just as easily be in Republicans’ hands. They aren’t eager to explain to their blue-collar constituents the costs of indulging Mrs. Pelosi’s San Francisco environmentalists. Remember 1993, when President Bill Clinton proposed an energy tax on BTUs? The House swallowed hard and passed the legislation, only to have Senate Democrats kill it; a year later, Newt Gingrich was in charge. With Senate Democrats already backing away from the Obama cap-and-trade plans, at least a few House Dems are reluctant to walk the plank.

Rumors were in fact flying earlier this week that Mr. Markey might have to postpone next week’s subcommittee markup. For now, he and Mr. Waxman are busy trying to buy or arm-twist votes. They have some potent tools, in particular the enticement of giving some carbon-emission permits away for free, or allocating them to specific industries. Yet having set expectations so high, the duo risk losing liberal members if they give away too much.

The Obama team is aware it has trouble, which explains last week’s well-timed Environmental Protection Agency “finding” that carbon is a danger. The administration is now using this as a stick to beat Congress to act, arguing that if it doesn’t the EPA will. (Reality: Any EPA actions will be tied up in court for years.) It also helps explain EPA’s Monday analysis claiming the legislation won’t cost all that much. (Reality: The agency could only make this claim by assuming an endless recession.)

The real risk to the president is that his bill goes down at the hands of his own party — with nary a Republican to blame. Whether Mrs. Pelosi and Mr. Waxman considered this as they crafted their gem is unclear. But the overreach has made it a possibility now.

Girl to throw out first pitch at Citi Field

Congratulations to Mackenzie Brown for pitching a perfect game.

---

From: ESPN Online

BAYONNE, N.J. — On the pitcher’s mound, a 12-year-old girl from New Jersey is perfect.

Mackenzie Brown is the first girl in Bayonne Little League history to throw a perfect game. She retired all 18 boys she faced on Tuesday.

There are no official records of how many perfect games are thrown per season. Little League Baseball in Williamsport, Pa., estimates only 50 to 60 occur each year. No one knows how many have been thrown by girls.

Brown says she knew she had something special going in the fourth inning and just tried not to mess up.

She’ll get to throw out the first pitch at Citi Field on Saturday when the New York Mets host the Washington Nationals.

When Expenses Outweigh Benefits

From Investor’s Business Daily:

Regulation: Should the Environmental Protection Agency place limits on carbon dioxide emissions, the costs to the oil industry, its customers and consumers in general will be stiff. Fighting global warming is not cheap.

For now, we’ll forget that there’s no reason to go to war against a mythical enemy that has been created through vain imaginings and focus on the expenses humanity will incur in the battle to keep man from heating his planet. Because either through EPA regulation or by legislative initiative, there’s a better than even chance carbon emissions will one day be regulated in America, and those rules won’t come without costs.

But before the rules are carved into the cornerstone of the Washington Monument, it’s policymakers’ duty to take a sober look at the price and determine if demon carbon is worth the prohibition crusade.

U.S. petroleum refineries discharge hundreds of million of tons of CO2 into the sky each year. Oil companies don’t spew carbon into the air out of malice toward the environment or through a misanthropic negligence. They do it to make products, in particular motor fuels, the world demands and the global economy needs if it is to continue growing.

The oil industry employs a complex finishing process for crude and will not be able to simply flip a switch that will reduce its carbon dioxide discharges. It will have to make expensive changes in its operations if it is to keep providing the market with energy. The power it uses to run its refineries and light its buildings will cost more. To comply with regulations, oil companies will likely have to sink resources into new equipment that is not as cost-effective as what they are running now.

At the production level, costs will increase as the industry will no longer have the same economies of scale that keep prices down. With demand being lowered by regulation, the volume that oil companies will be able to spread their costs over will shrink, making each unit more expensive to produce.

Karen Campbell, a macroeconomic policy analyst at the Heritage Foundation, says that to operate within the government-imposed limits oil companies will have to cut their production by “about 2.2% below where it would be in the baseline scenario.” In terms of costs to the industry, “Producers of refined petroleum would see their price index (costs) grow 81% more than the baseline.”

Congressional Democrats and agitators on the left would have the public believe that the additional expenses incurred by the oil industry will come out of the pockets of the obscenely (in their minds) wealthy Big Oil executives. Some of it will. If the companies become less profitable, workers at all levels will lose income.

But consumers, some of whom support CO2 caps, will take a hit, as prices are expected to increase by 28% over the next 20 years. Oil industry workers will be affected, as well, with as many as 14,000 in both the oil and coal industries losing their jobs, Campbell reckons.

Meanwhile, investors, some of whom also support CO2 caps, will find that their investments in the oil industry will lose strength.

“The increase in prices and decline in operations is not only bad for consumers and employees, but also bad for all the owners of these stocks — pension funds, mutual funds, 401(k)s, etc. — who would get an average 3.25 percentage points lower return on their equity — about 11%,” said Campbell.

“The power of compounding makes this loss in return, year over year, significant. A $1 million investment would grow at a slower rate over the 20 years resulting in about $20 million less wealth accumulated for the saver or fund that invested in the petroleum industry.”

It’s hard to see how this trade-off could ever be of any real benefit. In exchange for a decrease in anthropogenic emissions of carbon dioxide, American jobs must be sacrificed; investors will have to expect — and receive — lower returns; capital in an essential sector that needs investment to find and produce new sources will be depressed; and consumers will have no choice but to use a greater share of their incomes for energy.

Washington, as is too often the case, has it wrong on CO2 emissions. It is treating speculation as if it were a genuine emergency. The political leadership needs to stop, take a deep breath and rethink the trendy position on carbon.