A Gas Tax Instead of CAFE

I’m working on a post describing what I think the Big Two and a Half ought to propose on December 2 when they drive their hybrids to DC (in lieu of flying) to beg for money again. As part of that, I will suggest that they ask Congress to levy a stiff gas tax. But since I am getting into more and more discussions with environmentalists who want any bailout to be tied to increased CAFE standards, I’m going to lay out why I think a tax is much better than increased CAFE standards for everyone.

Why CAFE Standards Suck at Achieving their Goal

I’m going to start with the assumption that the goal of CAFE standards is to force auto manufacturers to build more environmentally efficient cars (arguably that’s not what it was originally intended to do). It does so with brute force regulation that does not, at the same time, change the actual market-wide interest (or not) in environmental efficiency.

Until gas reached $4 plus this summer (and things are returning–though haven’t entirely returned–to where they were now that gas has gotten cheaper again), people calculated "energy efficiency" into their considerations when buying a car in terms of cost of ownership–that is, as one factor among others: how much the car cost, how much monthly loan payments would be, how much maintenance cost, how much insurance cost, and how much gas to run the car cost (this is reflected by the stickers dealers use to sell their cars, which usually describe efficiency both in terms of MPG but also in terms of year gas costs). For most people, efficiency is still a cost issue, and not a benefit per se.

Now consider how that will factor into the choice of a vehicle. For a lot of people, all those cost calculations will be less important than perceived safety or utility arguments. So if having something that feels like a tank is really important to you, you’re going to buy something that feels like a tank and only then consider how much it’ll cost you to run your psuedo-tank. The cost calculations will weigh, overall, much less in your consideration.

But if cost of ownership is your primary consideration, then you’re going to look at the cheapest cars that meet your basic needs, and pick which one is actually cheapest to run. Read more

T. Boone or not T. Boone

h/t www.thewindturbines.com/

h/t www.thewindturbines.com/

We have had quite the go lately here at the FDL Borg Hive over the automaker bailout and, more specifically, the most pressing of which is GM. For the moment though, I want to touch on a corollary to the future of the American auto industry, and that is the transition to clean and green that needs to occur for long term sustainability of Deetroit wheels.

If we could flip the switch on a perpetual motion device, heck even the Chevy Volt, tomorrow, that would be wonderful. But we cannot. The path back to health and profit prosperity for American auto will be a process that takes time, and it is going to take intermediate steps while the new technology comes on line, gets refined and evolves into maturity.

The guy, for better or worse, that has been out front making noise about the transition from oil to clean and green is none other than the infamous, and legendary, Texas oil man T. Boone Pickens. Transition is the key word regarding the Pickens Plan as it relates to our topic de jour, automobiles. Because the Volt is not scheduled for release until 2010, and even assuming GM and its Volt makes it that far (which is no given), it will take a while for plug in technology to become deeply rooted. And, of course, a massive shift all at once to electric autos would crash our strapped and deteriorating power grid.

Pickens’ main point on internal combustion transition is that natural gas should be a, it not the, transition fuel for cars, and, more significantly, fleet vehicles.

Pickens’ Plan proposes that the natural gas that is currently used to fuel power plants could be used instead as a fuel for thousands of vehicles. Ken Medlock says that the US will continue to use natural gas for electric power generation. Natural gas burns cleaner than coal, making it an increasingly popular fuel for power plants. Gas plants also produce fewer greenhouse gas emissions.

The technology needed for Compressed Natural Gas (CNG) vehicles such as City buses, fork lifts and passenger cars with CNG drivetrains is available now. Honda sells the Civic GX, with a 170-mile range. In addition, it is possible to convert vehicles to run on CNG in addition to leaving the conventional fuel injection intact, allowing the driver to switch back and forth at will. Kits are available for the do-it-yourselfer. Read more

Proposed Funds to the Auto Industry

Because there’s a lot of confusion about who is advocating for what with regards to funding to the auto industry, I’m going to review what funds have been requested or proposed, and then review the stances various leaders have taken on those funds.

$25 Billion Retooling Fund

First, there is the $25 billion allocation–already awarded earlier this fall–designated to help auto-makers re-tool factories to build more efficient cars.

Automakers must show that they are financially viable and show that they have a "net present value that is positive" and that they have "financial projections demonstrating the applicant’s solvency through the period of time the loan is outstanding." They must also offer a first-lien or security interest in all property acquired with the funds, but that could be waived by the Energy Secretary.

The rule is written broadly enough that new factories might be eligible. The projects include "re-equipping, expanding or establishing a manufacturing facility in the United States to produce qualifying advanced technology vehicles, or qualifying components" along with "engineering integration performed in the United States."

The rule gives priority to plants that are 20 years or older. Money from the loan program could be used to reopen a shuttered factory.

The vehicles built must be at least 25 percent more fuel efficient than required by law. It also requires that at least $2.5 billion of the loans be set aside for automakers and suppliers with 500 or fewer employees.

This fund was originally going to take much longer to kick into place–as many as 18 months–but DOE rushed to establish guidelines to make these funds available in the shorter term.

$25 Billion Bridge

The auto industry is very credit driven. In addition to providing auto loans directly to consumers, the auto industry uses credit to purchase parts and offers credit to dealers which they use to purchase vehicles and parts. In other words, without sufficient credit, both production and sales would shut down.

Because of the credit crunch and because the US manufacturers have crummy debt ratings, the industry is having problems accessing that level of credit, particularly GM. And this credit crunch came on top of an awful end-of-product-year due to the oil price spike in the summer; all manufacturers were stuck with gas guzzling products that no one wanted to buy, which they had to get rid of on terrible terms. Read more

From Pollan to the President

I’ve been arguing for a while that Michigan–the state with the second greatest agricultural diversity after California–ought to use innovations in sustainable agriculture as part of its plan to drive economic recovery.  Agriculture is going to have to be more sustainably produced in the future, and MI is uniquely suited to lead in developing the policies and technology to accomplish this goal.

But then, we should be talking about how to pursue this sustainable future more widely.

Which is what Michael Pollan does in this long letter to the next President, recommending a number of changes to our food policies. Here are Pollan’s comments on the ties between our food and the petroleum that goes into it. 

After cars, the food system uses more fossil fuel than any other sector of the economy — 19 percent. And while the experts disagree about the exact amount, the way we feed ourselves contributes more greenhouse gases to the atmosphere than anything else we do — as much as 37 percent, according to one study. Whenever farmers clear land for crops and till the soil, large quantities of carbon are released into the air. But the 20th-century industrialization of agriculture has increased the amount of greenhouse gases emitted by the food system by an order of magnitude; chemical fertilizers (made from natural gas), pesticides (made from petroleum), farm machinery, modern food processing and packaging and transportation have together transformed a system that in 1940 produced 2.3 calories of food energy for every calorie of fossil-fuel energy it used into one that now takes 10 calories of fossil-fuel energy to produce a single calorie of modern supermarket food. Put another way, when we eat from the industrial-food system, we are eating oil and spewing greenhouse gases. This state of affairs appears all the more absurd when you recall that every calorie we eat is ultimately the product of photosynthesis — a process based on making food energy from sunshine.

[snip]

The F.D.A. should require that every packaged-food product include a second calorie count, indicating how many calories of fossil fuel went into its production. Oil is one of the most important ingredients in our food, and people ought to know just how much of it they’re eating.

[snip]

Read more

$2 Million to Kill Polar Bears, for the Sake of Ignorance

polarbear-stevehillebrand-usfws.jpgMcClatchy has an important fact check on Sarah Palin’s latest interview with Charlie Gibson–noting her, um, fluid views on climate change.

Charles Gibson seemed a little confused about Gov. Sarah Palin’s answers on global warming when he interviewed her this week while strolling beside the trans-Alaska pipeline.

The ABC anchor has plenty of Alaska voters for company. Since entering the governor’s race here two years ago, Palin has shimmied back and forth on the key question of whether warming trends are natural or a byproduct of human activity.

Most interesting, though, is the description of where Palin got the money to sue the Federal government in an attempt to delist the polar bear as an endangered species.

Earlier this year, the state legislature approved $2 million for a conference inviting climate change skeptics here to hash out the causes.

"It is important to remember that climate change is occurring, but then it has occurred continuously for millions of years," wrote the legislature’s Republican leaders, House Speaker John Harris and Senate President Lyda Green. "And, so far, there are too many dissenting opinions to state matter-of-factly that it is being caused by humans."

The project was derided by some as a "conference to nowhere" and now appears unlikely to take place. Much of the money was later diverted to fund a lawsuit by the Palin administration against listing the polar bear as a threatened species. [my emphasis]

The reality-haters in Alaska wanted to host a party for similar reality-haters. But instead, the listing of the polar bear as an endangered species gave them their opportunity to challenge reality on a national scale. With the added bonus for them, of course, that if they won, they could continue to trash the polar bear’s habitat with abandon.

I realize Sarah Palin is suing the government for practical reasons, so, if she won, Alaska could continue to get rich off of selling the Japanese gas and oil, without worrying whether it’ll wipe out polar bears once and for all.

But at some level, isn’t she just going after the polar bears as a propaganda stunt?

Photo credit: Steve Hillebrand / USFWS

Did George Bush Break the Clean Air Act?

The Clean Air Act does not allow the EPA Administrator to take cost into account when he sets new standards for things like ozone levels. Now, as Henry Waxman’s Oversight Committee makes clear, on several occasions, the EPA Administration changed his preferred policy to one much less beneficial for the environment after speaking to the White House.

In today’s hearing, Administrator Johnson repeatedly discussed costs, even while insisting that his final decision did not take cost into account. So Paul Hodes asked the obvious question: well, did the White House take cost into account, and then you take the White House’s counsel into account.

The law is very clear that EPA may not consider costs in setting a national air quality standard to protect the environment. The Supreme Court specifically addressed the issue in 2001, the court wrote that if EPA established a standard by ‘secretly considering the costs without telling anyone’ it would be grounds for throwing out the standard, because the administrator did not follow the law. I’m concerned that this is exactly what happened in this case. The record before this committee shows that the unanimous recommendation of the Clean Air Scientific Advisory Committee was rejected by you, Mr. Johnson, apparently on the basis of White House opinion or desire.

That’s when Administrator Johnson got all evasive. He was asked (the first several times by Hodes), whether the White House considered cost in its own consideration of the issue. When Johnson refused to answer that question, Hodes asked him to answer the much simpler question: whether he recalled talking to the White House about the ozone standard.

Johnson wouldn’t answer that either.

Johnson neither asserted executive privilege, nor explained on what basis he could refuse to answer questions about whether he recalled whether or not he had had a conversation with the White House about it.

That’s when Henry Waxman got pissed. Read more

Does McCain Support the Poisoning of MI’s Voters?

A number of people (including Senator Whitehouse) have pointed out how much the Mary Gade firing resembles the US Attorney firing. As the Chicago Tribune reported (before the Administration released the standard "spending time with her family" statement), Gade was told to resign because she expected Dow Chemical to clean up its pollution in the Saginaw-Midland MI area.

On Thursday, following months of internal bickering over Mary Gade’s interactions with Dow, the administration forced her to quit as head of the U.S. Environmental Protection Agency’s Midwest office, based in Chicago.

Gade told the Tribune she resigned after two aides to national EPA administrator Stephen Johnson took away her powers as regional administrator and told her to quit or be fired by June 1.

[snip]

Gade, appointed by President Bush as regional EPA administrator in September 2006, invoked emergency powers last summer to order the company to remove three hotspots of dioxin near its Midland headquarters.

She demanded more dredging in November, when it was revealed that dioxin levels along a park in Saginaw were 1.6 million parts per trillion, the highest amount ever found in the U.S.

Dow then sought to cut a deal on a more comprehensive cleanup. But Gade ended the negotiations in January, saying Dow was refusing to take action necessary to protect public health and wildlife. Dow responded by appealing to officials in Washington, according to heavily redacted letters the Tribune obtained under the Freedom of Information Act.

[snip]

On Thursday, Gade said of her resignation: "There’s no question this is about Dow. I stand behind what I did and what my staff did. I’m proud of what we did."

What I haven’t heard mentioned in any of this coverage, though, is whether John McCain supports the firing of Mary Gade.

It’s relevant, I figure, for two reasons. First, with his half-measures global warming initiative, McCain likes to fancy himself a bit of an environmentalist. More importantly, McCain is banking heavily on winning MI in November. There is no way that McCain becomes President without winning MI.

So don’t you think it a relevant question–whether McCain supports the firing of Mary Gade because she tried to end the poisoning of a bunch of MI voters on whose votes McCain is counting?

Read more

GOP Poisoning Swing State Voters to Win Elections

great-lakes-concern-areas.jpg
I’m not surprised the Administration is withholding the report showing polluted sites around the Great Lakes may be contributing to elevated cancer rates.

The lead author and peer reviewers of a government report raising the possibility of public health threats from industrial contamination throughout the Great Lakes region are charging that the report is being suppressed because of the questions it raises. The author also alleges that he was demoted because of the report.

I’m just wondering whether they’re doing so for explicitly political reasons.

You’ll recall the description of why Dick Cheney intervened into the Klamath River dispute.

In Oregon, a battleground state that the Bush-Cheney ticket had lost by less than half of 1 percent, drought-stricken farmers and ranchers were about to be cut off from the irrigation water that kept their cropland and pastures green. Federal biologists said the Endangered Species Act left the government no choice: The survival of two imperiled species of fish was at stake.

Law and science seemed to be on the side of the fish. Then the vice president stepped in.

First Cheney looked for a way around the law, aides said. Next he set in motion a process to challenge the science protecting the fish, according to a former Oregon congressman who lobbied for the farmers.

Because of Cheney’s intervention, the government reversed itself and let the water flow in time to save the 2002 growing season, declaring that there was no threat to the fish. What followed was the largest fish kill the West had ever seen, with tens of thousands of salmon rotting on the banks of the Klamath River.

Characteristically, Cheney left no tracks. [my emphasis]

After deciding for farmers over fish, the Administration did a bunch of photo ops to claim credit with voters in the area.

It was Norton who announced the review, and it was Bush and his political adviser Karl Rove who traveled to Oregon in February 2002 to assure farmers that they had the administration’s support.

[snip]

Norton flew to Klamath Falls in March to open the head gate as farmers chanted "Let the water flow!"

Now, as the map included in the report makes clear, this report is talking about toxic hazards in the potential swing states of MN, WI, MI, and OH. Read more

Replacing the Imperial Presidency in the Age of Global Warming

I’d like to use the occasion of Al Gore’s op-ed in the NYT today to expand on something I said in my talk on Curbing the Imperial Presidency. In his book The Imperial Presidency, Arthur Schlesinger argued that the Imperial Presidency derived from foreign policy:

The Imperial Presidency was essentially the creation of foreign policy. A combination of doctrines and emotions–belief in permanent and universal crisis, fear of communism, faith in the duty and the right of the United States to intervene swiftly in every part of the world–had brought about the unprecedented centralization of decisions over war and peace in the Presidency. With this there came an unprecedented exclusion of the rest of the executive branch, of Congress, of the press and of public opinion in general from these decisions.

We would only need to replace the word terrorism for communism to apply this paragraph today–to describe how the rationale of crisis and fear justified the dangerous consolidation of power under the Executive. At the close of my talk on the Imperial Presidency, I said,

Finally, we have to use the Administration’s botchedpropaganda against it. It is clear to most, now, that the invasion of Iraq hadnothing to do with an attempt to prevent the proliferation of WMD, a desire tospread democracy, or a fight against terrorism. We need to keep refuting thosewho want to claim this war is part of the war on terror. But we need to takethat a step further and talk about the real reason the Administration didinvade Iraq: to prop up America’s threatened hegemonic position using a grandstrategy that is not only outdated and immoral, but guaranteed to beineffective in an era of global warming and peak oil.

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