By Kennedy Maize

Washington, D.C., July 22, 2010 — Is anyone really surprised that Senate majority leader Harry Reid (D-Nevada) has finally declared major energy legislation dead? For weeks, Reid has been singing words from a country classic that I’m sure he knew were false: “Mother’s not dead, she’s only sleeping.” Today, he recognized the corpse before him, proclaiming that there will be no vote on major energy legislation prior to the month-long August recess.

By the time Reid pulled the plug on the pumps and drips and resuscitators, the mother of all energy legislation — attempts to control U.S. emissions of carbon dioxide by entirely dubious methods — was a reeking piece of political dead meat. The House far earlier passed legislation — the Waxman-Markey bill — that was one of the most complex, compromised and dubious pieces of energy legislation I’ve seen in my 35 years of following the ins and outs (mostly outs) of energy politics. The Senate, thankfully, was having nothing to do with it.

It was clear, to me at least, that major energy legislation was dead the day the House acted. There was no way the Senate, with its modern requirement of 60 votes to even agree on the time of day, could agree on anything even half as sweeping. So we went through all kinds of posturing and hand-waving, amid White House encouragement, including the Kerry-Lieberman charade, with a cameo appearance by South Carolina Republican Lindsey Graham.

A major part of the problem: it soon became clear to anyone paying attention that none of the bills Democrats were pushing, particularly the overweight, staggering pile of provisions that passed the House, would actually result in changes to the world’s climate. That was true even if it were the case that man-made CO2 was causing global warming (or “climate change” in the lingo of political correctness).

Once the Democratic leadership recognized that the cap-and-trade approach was doomed in the Senate, the retreat position was an electric-utility-only bill, aimed at cutting utility carbon dioxide emissions. Some important utility leaders, including Duke Energy CEO Jim Rogers, supported this approach, but only if they could get concessions on relaxing proposed EPA rules on real pollution, primarily NOx and ozone. My suspicion is that Rogers and other execs who supported the utility-only approach figured they could game any carbon control system that resulted.

But the Rogers contingent didn’t have enough muscle. The National Rural Electric Cooperative Association and the American Public Power Association opposed the narrow, utility-only plan. Public power has substantial clout in Washington. The Edison Electric Institute — the big bruisers of electric lobbying — never took a position.

Reid blamed the Republicans for sinking substantive energy legislation. That’s typical partisan posturing, but not entirely true. Sure, Reid was unable to win even one Republican vote for a utility-only bill. More significant is that he couldn’t muster 59 Democratic votes. My head count suggests there were at least six Democratic senators who would not vote for the utility-only legislation.

At a press conference today, Reid said, “It’s easy to count to 60. I could do it by the time I was in eighth grade. My point is this, we know where we are. We know we don’t have the votes.” Energy Committee chairman Jeff Bingaman of New Mexico said, “Given the time constraints, this probably is a realistic judgment on his part.”

Congress is speeding toward the August recess, when the members will be home for the month, many campaigning for reelection. Massachusetts Democrat John Kerry and Connecticut independent Joe Lieberman were suggesting another attempt at sweeping energy legislation when the Senate returns to session in September. Lieberman talked about “negotiating a broader utilities-only bill in September.”

That’s probably wishful thinking. Politico quoted North Dakota’s Byron Dorgan, chairman of the Democratic Policy Committee, “I don’t think there are going to be two energy packages on the floor this year. Whatever comes to the floor on energy [before August] is going to be the package we’re going to consider.” Bingaman added, “We’ve got very substantial constraints on our time when we get back,”

 

By Kennedy Maize

Washington, D.C., July 8, 2010 — It’s become a cliche that government should not try to pick winners and losers in the marketplace. But cliches are useful by the circumstance that they are often correct.

So now we come to government loan guarantees, a classic example of government picking winners and losers. That, by definition, is what a government loan guarantee is. The government guarantees to put the full faith and credit of the taxpayers behind a project or technology that otherwise would not find adequate private-sector investors.

The record of federal loan guarantees and direct loans, particularly those related to energy, is pretty dismal. Synfuels (remember “solvent refined coal”?) and the feckless “clean coal technology program” come immediately to mind. Now we are beginning to see another round of failure of the government to pick winners and losers in the energy market.

Two nice examples have surfaced in recent weeks. The first, and most ludicrous, was the completely-expected decision by the Obama administration to kill former president George W. Bush’s favorite energy project, what the Bushies called GNEP, or “Global Nuclear Energy Partnership.” This was a half-baked plan to revitalize, and internationalize, plutonium reprocessing and fast breeder reactor technology.

GNEP was also a fig leaf to cover the nakedness of the Yucca Mountain spent nuclear fuel dump. Yucca was clearly a failure well before the Bush administration took office, but the White House (unlike the Obama administration, paying its debts to Nevada) refused to acknowledge the Yucca collapse. Instead, the administration changed the subject.

GNEP was a non-starter from the beginning. It relied on unproven (dare we say “pie in the sky”?) technology for winning Pu from fatigued fuel rods that did not provide a path to diversion for nuclear weapons production. It also diverted money and attention at DOE from real nuclear power plants. My DOE sources at the time told me they wanted nothing to do with what I called the “Goofy Nuclear Energy Program.” But the White House, and Bush in particular, were in love with the beast.

Now it is not only dead (the Obama administration essentially bailed out last year, according to an account in POWER NEWS), but has a new name — the International Framework for Nuclear Energy Cooperation — and a new, fuzzified mission to “more effectively explore the most important issues underlying the use and expansion of nuclear energy worldwide.” Sounds like some folks are going to spend a lot of time — and the government’s dime — at capitals and resorts around the world, producing reams of waste paper.

Chalk one up for the government.

Wait, there’s more. Congress, in its infinite wisdom, in the energy legislation of 2005 authorized major loan guarantees for nuclear plants, and for renewable technologies, including solar photovoltaics. One of the first solar recipients of DOE loan largess was Solyndra Inc., a San Francisco company with a unique design for a tubular PV technology touted as more efficient than traditional flat arrays.

The technology mavens at DOE bought into the concept, and President Obama visited the company last May to deliver a $535 million loan guarantee, hyping the company as a model for future energy enterprises.

But the sun quickly stopped shining on Solyndra when the company, on the strength of the loan guarantee, tried for an initial public stock offering in June, designed to pay off some of the venture capitalists who had invested in the company. The IPO never got off the ground, as investors demonstrated that they were very wary of a company that, said a New York Times article, was “hemorrhaging cash,” after raising nearly a billion dollars in venture capital. DOE, noted some observers, may have to eat the loan guarantee.

It should not have been hard to discover that Solyndra was a dicey vehicle for a federal loan guarantee. The company lost $172 million last year and $242 million in 2008, according to Securities and Exchange Commission documents cited by the Times. According to the SEC filings, the company was spending over $6/W for its solar panels and selling them for under $3.50/W.

Why did this clearly troubled firm get such a big commitment from Uncle? One analyst was quoted:  ”Solyndra has the powerful lobbyists in the business. So they get a lot of love from the government.” Another said, “It certainly makes the politicians look silly and makes me wonder who was advising them. I think they did not have the appropriate technical advisers or else the government folks were influenced by the company and its backers.”

Now, of course, the White House is awarding more solar loan largess, claiming that these projects are engines of job creation, a proposition I find laughable. The administration wants much more energy loan guarantee money, and Congress has coughed up another $18 billion, split evenly between the nukes and the renewables.

What’s that Einstein definition of insanity? Something about “doing the same thing over and over again and expecting different results?”

 

By Kennedy Maize

Washington, D.C., June 28, 2010 — Sen. Robert Byrd — the most important coal-state legislator in the country — had barely checked into the hospital last week before speculation began about who might succeed the 92-year-old Democratic legend if he were to die. When Byrd died on Sunday, the rumor mill kicked into high gear, focusing on just one question: how would West Virginia Democratic Gov. Joe Manchin position himself to succeed Byrd.

For coal interests, it’s an important issue. Over the past few years, Byrd had moved his views from coal stalwart toward a less enthusiastic stance. He became opposed to mountain top removal mining and softened on climate change. Manchin has consistently backed the coal industry.

There’s no question Manchin wants to succeed Byrd. The 62-year-old, scion of a politically potent Democratic family, has been governor since 2005 and will be term limited out of office in 2012. Political analyst Steve Kornacki, writing in Salon on Sunday, noted, “Manchin is quite ambitious and has let it be known in West Virginia that he has national aspirations. Earlier this year, he formed his own [political action committee] for national political activity — Country Roads PAC — and he’s slated to become the chairman of the National Governors Association later this summer.”

Byrd’s health has been an issue for some time, and Manchin has said publicly and repeatedly that he would not appoint himself to replace Byrd, whose term is up in 2013. An article in Politico on Monday noted, “Voters have a long history of ousting senators who used their power as governor to appoint themselves to the seat.”

That means Manchin, a very popular politician, could be setting up for a run in the 2012 election cycle. His likely Republican opponent, by most accounts, would be Rep. Shelley Moore Capito, who represents the populous and more prosperous (thanks in major part to Byrd’s largess as chairman of the Senate Appropriations Committee) central slice of West Virginia, stretching from Martinsburg in the eastern panhandle through the capital of Charleston. She’s the daughter of former Republican Gov. Arch Moore, who served over two years in federal prison for corruption in the 1990s, on a conviction for extorting half a million dollars from a West Virginia coal company.

Capito has proven a popular and sure-footed politician in a largely Democratic state (although the state went for Republican John McCain in the 2008 presidential election, by 56% to 43%). None of the charges that tainted her father have ever touched Capito. Observers say she would mount a credible race against Manchin in 2012.

Newsweek on Monday reported that West Virginia Secretary of State Natalie Tennant, a Democrat, has ruled that, under state election law, there will be no special election this year to fill the time left in Byrd’s seat (the filing deadline for the November election has passed). That gives Manchin the opportunity to appoint a caretaker to fill the seat until the 2012 election.

Naturally, speculation is rampant about a Manchin placeholder. The Washington Post mentioned former Byrd aide Anne Barth, who lost to Capito in the 2nd District 2008 race by a 57% to 43% margin; Rep. Nick Joe Rahall, 61, a Democrat who has long represented the 3rd District; former state Democratic Party leader Nick Casey, and current party chief Larry Puccio.

My money is on Casey or Puccio. Barth is politically ambitious and might want to keep the seat if she’s selected. Rahall would give up 33 years of seniority and chairmanship of the powerful House Resources Committee (where he is able to watch out for the interests of the coal industry).

 

[Editor’s note: This commentary first appeared in The Energy Daily, our sister publication on June 14. Llewellyn King was the founder and, for many years, publisher, of The Energy Daily and I worked for him for a decade as a reporter. We often disagreed on policy and politics, but I completely agree with this take on the problems of energy R&D]

By Llewellyn King

Washington, D.C., June 14, 2010 — There is an idea that has been around for a long time, at least since the fall of 1973: All that stands between the United States and an abundant energy future is a lack of spending on research and development. It is as though the Knights Templar could find the Holy Grail, if only the Pope would commit just a few more resources to the hunt.
Tens of billions of dollars have been spent on energy research, many of them fruitlessly; and some advances have been made, not the least in the kind of drilling technology that enables us to drill miles below the sea floor in the Gulf of Mexico. (Oops!)

Much else has been researched and not come to market. Wind and solar have taken giant strides, but still require tax breaks and subsidies. Nuclear energy has been researched, even as its deployment has languished. Worldwide hundreds of billions of dollars have been spent on nuclear fusion with nothing to show for it. Other programs have gone by the board, from coal liquefaction to magnetohydrodynamics and ocean-thermal gradients.

The thing about energy research has been that there are many promising lines, but seldom a big success. The big successes, too, have been happenstantial. One such is the aeroderivative turbine; essentially, a fighter-jet engine operating at very high temperatures in steady state on the ground, and burning natural gas instead of kerosene.

On Thursday, a new set of highly qualified persuaders came to Washington to exhort the government to increase energy research and development funding from $5 billion to $16 billion a year, and to set up new organizations to channel and manage basic research on energy.
Some of the nation’s industrial savants, including Bill Gates late of Microsoft, Jeff Immelt of General Electric and Ursula Burns of Xerox, appeared at a press conference here as members of the American Energy Innovation Council. The chairman of the group, Chad Holliday of Bank of America, told the press: “Up until now energy investments have gotten short shrift.”

That is debatable. The problem with energy research has not been that it has been short-changed, but that it has often been directed at the wrong thing; it has often been diluted or spread out for political purposes. Farmers want ethanol research, coal states want carbon management, and the populous eastern states want carbon-free energy—so long as it is not nuclear.

The group of industry captains is not looking at the political social and economic divides which have negated so many past endeavors. Just when the nuclear industry was ready to enter its long-expected renaissance in the 1990s, it was broadsided by the new gas turbines. If the carbon in coal can be safely sequestered, does that solve the environmental problems of ripping coal out of the ground?

R&D always produces something of interest and often of value, but not always what it was directed toward. At the press conference, Xerox’s Burns said that innovation needed to be managed, and that the CEOs of the group knew that from experience.

Actually, the experience of Xerox itself may belie that. The original copying machine technology nearly perished for want of sponsorship and was finally saved by not-for-profit Battelle Laboratories. Yet later, when many of the innovations that made the rise of Microsoft, Apple and Cisco possible were developed at Xerox’s California computer laboratories, the company did not know what to do with them. But Bill Gates did. These two should talk.

The great Bell Labs produced optic fiber and the transistor, but did nothing with them.

Management is a lovely business when it controls but in so doing, it stifles.

If you want innovation, first get rid of the managers. Second, get on bended knee before the bankers.

A new energy think is needed, but first it is a good idea to know where we want to go.

With the holocaust in the Gulf, our energy future is again in flux; the trusted has become dangerous, and the dangerous may again be trusted.

—Llewellyn King is executive producer and host of “White House Chronicle” on PBS. His e-mail is lking@kingpublishing.com.

 

By Kennedy Maize

Washington, D.C., June 11. 2010 — Their lips say “yes”, but their eyes say “no”. That’s my take on the offer of “practical” energy legislation this week by Senate Republicans. Yes, I’m cynical about the strategy and tactics of the GOP embodied in this legislative proposal (as far as I know, it doesn’t yet exist in bill language, so it’s hard to deconstruct it very concretely).

Thursday’s 53-47 rejection of Republican Alaska Sen. Lisa Murkowski’s attempt to derail the Obama administration’s regulatory approach to carbon dioxide regulation makes my point more sharply. The Senate rejection of the Murkowski legislation is not significant. That was a foregone conclusion. The central insight is the number of votes Murkowski got; a week ago, Democrats were worried that she might get 40 votes. Her 47 votes included six Democrats: Indiana’s outgoing Evan Bayh, Ben Nelson of Nebraska, Mary Landrieu of Louisiana, West Virginia’s Jay Rockefeller, and Blanche Lincoln and Mark Prior of Arkansas.

Supporters of comprehensive greenhouse gas legislation — specifically the Obama administration’s cap-and-trade approach — adopted the characteristic response of whistling past the graveyard. “Well,” they were saying after the vote, “this isn’t the whole story. We can still pull off some Republicans who have said there is a climate problem.”

Nonsense. The vote is the Hammer of Doom for the warmers. So, too, is the GOP legislation, proffered by the respected Richard Lugar of Indiana. There is no notion of any kind of explicit carbon dioxide control in the Lugar legislation. It is the same-old same-old: energy efficiency and promises to shut down old, inefficient coal-fired power plants sometime in the future. As J. Wellington Wimpy told Popeye the Sailor Man, “I will gladly pay you tomorrow for a hamburger today.”

The Lugar energy legislation gives allegedly “moderate” Republicans insurance against claims they are complicit with Dr. No (Republican Senate leader Mitch McConnell of Kentucky). Folks such as Maine Republicans Olympia Snowe and Susan Collins can tell their constituents that they share the fears about climate change, and supported the Lugar bill in response. (I confess I no longer have any clear idea how to distinguish moderate from liberal from conservative, even among my own views.)

All of this comes as the also-alleged “consensus” on the science of global warming is unravelling faster than a used sweater from Goodwill. I commend to your attention a recent “cross-examination,” which admittedly takes place only on paper, by University of Pennsylvania law professor Jason Scott Johnston.

Johnston compares the scientific claims in the UN’s Intergovernmental Panel on Climate Change reports and public statements by advocates of rapid climate action against published, peer-reviewed studies. Johnston concludes that “establishment climate science” has engaged in hyperbole, deliberate over-simplification, and “a variety of stylized rhetorical techniques that seem to oversell what is actually known about climate change.”

Even some previous advocates of congressional action are abandoning ship. Mother Jones, hardly an oil industry rag, reported this week that South Carolina Republican Sen. Lindsey Graham — one the great warmer hopes for bipartisan Senate legislation — has recanted his climate views, expressed when he was working with Democrat John Kerry of Massachusetts and Independent Joe Lieberman of Connecticut on climate legislation.

The lefty mag reported that at a Tuesday press conference, Graham said, “The science about global warming has changed. I think they’ve oversold this stuff, quite frankly. I think they’ve been alarmist and the science is in question. The whole movement has taken a giant step backward.”

 

By Kennedy Maize
Washington, D.C., 6 June 2010 — I’m offering a challenge and opportunity to those of you who believe that the science of global warming is settled: take a look at an informed contrary view.

Last month, I wrote in this blog about noted physicist Will Happer, and his proposal to create a “Team B” to challenge the conventional wisdom on warming.

Happer was appearing, along with physicist Roger Cohen, a prominent activist among the fellows of the American Physical Society, at a Washington meeting sponsored by the Marshall Institute, long a cool-bed of climate skepticism. I attended, and it was a far-ranging and intellectually meaty meeting.

Now, a video of that event is available from the Marshall Society. Regardless of your views on the climate, this is worth spending 82 minutes of your time. And I’d particularly like to hear from those in the tank for the alarmists. But if you do want to comment, here’s a basic rule: no personal attacks. Make an ad hominem attack, and your posting won’t see the light of day on this blog.

While I’m in the link mode, here are some other recent posts on other sites you may find interesting, informative, or amusing:

* Mark Mills, a veteran conservative energy gadfly and intellectual provocateur, has a fine article on smart grid issues in Forbes magazine.

* David Archibald, Aussie geologist and solar cycle expert, on “Why scientists get it wrong” in Australia’s Quadrant magazine.

* Economist Robert Michaels in Rob Bradley’s MasterResource blog does a thorough, well-deserved trashing of a recent U.S. Chamber of Commerce report on energy security.

Good reading.