Should California dictate U.S. energy policies?

By |2014-04-28T11:31:52+00:00April 28th, 2014|CFACT Insights|4 Comments

California loves to be seen as the trendsetter on energy and environmental policies. But can we really afford to adopt their laws and regulations in the rest of America? Heck, can the once Golden State afford them itself? The path to hell is paved with good intentions, counter-productive policies – and hypocrisy.

The officiajoblessinCAl national unemployment rate is stuck at 6.7% – but with much higher rates for blacks and Hispanics and a labor p labor participation rate that remains the lowest in 35 years. Measured by gross national product, our economy is growing at an abysmal 1.5% or even 1.0% annual rate.

Meanwhile, California’s jobless rate is higher than in all but three other states: 8.1% – and with far worse rates as high as 15% for blacks, Hispanics, and inland communities. First the good news, then the insanity.

Citigroup’s Energy 2020: North America report estimates that the United States, Canada, and Mexico could make North America almost energy independent in 6 years, simply by tapping their vast recoverable oil and natural gas reserves. Doing so would help lower energy and consumer prices, insulate the three nations from volatile or blackmailing foreign suppliers, and spur job creation based on reliable, affordable energy, says the U.S. Energy Information Administration.

Driving this revolution is horizontal drilling and hydraulic fracturing. According to Citigroup, IHS Global Insights, the EIA, and other analysts, “fracking” technology contributed 2.1 million jobs and $285 billion to the U.S. economy in 2013, while adding $62 billion to local, state and federal treasuries! Compare that to mandates and subsidies required for expensive, unreliable, job-killing wind, solar and biofuel energy.

Fracking also slashed America’s oil imports from 60% of its total needs in 2005 to just 28% in 2013. It slashed our import bill by some $100 billion annually.

By 2020 the government share of this boom is expected to rise to $111 billion. By 2035, U.S. oil and natural gas operations could inject over $5 trillion in cumulative capital expenditures into the economy, while contributing $300 billion a year to GDP and generating over $2.5 trillion in cumulative additional government revenues. What incredible benefits! But there’s more.

A Yale University study calculates that the drop in natural gas prices (from $8 per thousand cubic feet or million Btu in 2008, and much more on the spot market, to $4.00 or so now) is saving businesses and families over $125 billion a year in heating, electricity, fertilizer and raw material feed stock costs.

The only thing standing in the way of a U.S. employment boom and economic and industrial renaissance, says Citigroup, is politics: continued or even more oppressive anti-hydrocarbon policies and regulations.

Here’s the insanity. Fully 96% of this nation’s oil and gas production increase took place on state and private lands. Production fell significantly on federal lands under President Obama’s watch, with the Interior Department leasing only 2% of federal offshore lands and 6% of its onshore domain for petroleum, then slow-walking drilling permits, according to the Institute for Energy Research.

The President continues to stall on the Keystone pipeline, while threatening layers of expensive carbon dioxide and other regulations, to prevent what he insists is “dangerous manmade climate change.” His EPA just adopted California’s expensive all-pain-no-gain rules for sulfur in gasoline, and the Administration and environmentalists constantly look to the West Coast for policy guidance.

poweroutageGovernor Jerry Brown says 30 million vehicles in California translate into “a lot of oil” and “the time for no more oil drilling” will be when its residents “can get around without using any gasoline.” However, that rational message has not reached the state’s legislators, environmental activists, or urban elites.

California’s ruling classes strongly oppose drilling and fracking – and leading Democrats are campaigning hard to impose at least a long temporary ban, based on ludicrous claims that fracking causes groundwater contamination and even earthquakes and birth defects.

Meanwhile, California’s oil production represents just 38% of its needs – and is falling steadily, even though the state has enormous onshore and offshore natural gas deposits, accessible via conventional and hydraulic fracturing technologies. The state imports 12% of its oil from Alaska and 50% more from foreign nations, much of it from Canada, notes Sacramento area energy consultant Tom Tanton.

The record is far worse when it comes to electricity. The Do-As-I-Say state imports about 29% of its total electricity from out of state: via the Palo Verde nuclear power plant in Phoenix, coal-fired generators in the Four Corners area, and hydroelectric dams in the Southwest and Pacific Northwest, Tanton explains.

Another 50% of its electricity is generated using natural gas that is also imported from sources outside California. Instead, the Greener-Than-Thou State relies heavily on gas imported via pipelines from Canada, the Rockies and the American Southwest, to power its gas-fired turbines. Those turbines and out-of-state sources also back up its numerous unreliable bird-killing wind turbines.

It adds up to a great way to preen and strut about their environmental consciousness. They simply leach off their neighbors for 62% of their gasoline and 79% of their electricity, and let other states do the hard work and emit the CO2.

These foreign fuels power the state’s profitable and liberal Silicon Valley and entertainment industries – as well as the heavily subsidized electric and hybrid vehicles that wealthy elites so love for their pseudo-ecological benefits, $7,500 tax credits, and automatic entry into fast-moving HOV lanes.

Meanwhile, California’s poor white, black, Hispanic, and other families get to pay $4.23 per gallon for regular gasoline, the second highest price in America – and 16.2 cents per kWh for residential electricity, double that in most states, and behind only New York, New England, Alaska, and Hawaii.

However, the state’s eco-centric ruling classes are not yet satisfied. Having already hammered large industrial facilities with costly CO2 cap-and-trade regulations, thereby driving more jobs out of the state, on January 1, 2015, they will impose cap-and-trade rules on gasoline and diesel fuels. That will instantly add at least 12 cents more per gallon, with the price escalating over the coming years.

CARCULTURERegulators are also ginning up tough new “low-carbon fuel standards,” requiring that California’s transportation fuels reduce their “carbon intensity” or “life-cycle” CO2 emissions by 10% below 2010 levels. This will be accomplished by forcing refiners and retailers to provide more corn-based ethanol, biodiesel, and still-nonexistent cellulosic biofuel.

These fuels are much more expensive than even cap-tax-and-trade gasoline – which means the poor families that liberals care so deeply about will be forced to pay still more to drive their cars and trucks.

In fact, Charles River Associates estimates that the LCFS will raise the cost of gasoline and diesel by up to 170% (!) over the next 10 years, on top of all the other price hikes.

In the meantime, China, India, Brazil, Indonesia, Germany, and a hundred other countries are burning more coal, driving more cars, and emitting vastly more carbon dioxide. So the alleged benefits to global atmospheric CO2 levels range from illusory and fabricated to fraudulent.

Of course, commuters who cannot afford these soaring prices can always park their cars and add a few hours to their daily treks, by taking multiple buses to work, school and other activities.

There’s more, naturally. Much more. But I’m out of space and floundering amid all the lunacy.

Can we really afford to inflict California’s insane policies on the rest of America? In fact, how long can the Left Coast afford to let its ruling classes inflict those policies on its own citizens?


  1. Scottar April 28, 2014 at 10:51 PM

    Liberals have always looked at things through fantasy looking glasses, reality is just something foreign to them or a contrivance of the Right. Just some more regulation engineering and money and the progressive fantasy plane will take off.

  2. ParmaJohn May 2, 2014 at 12:23 PM

    I’m California dreaming, that’s for sure.

    Did you say 16.2 cents/kWh? I’ll take it! My average billed rate here in Italy is in the neighborhood of 50 cents, once I’ve paid all the levies, the surcharges and the green redistribution fees. With the price of methane where it is over here the wholesale electricity cost is already at least 12 cents.

    Gasoline? We’re paying $8.30 a gallon today, so send me a truckload of your $4.23 stuff.

    Wait, don’t send anything; I’ll just come over and get a job in California. It sounds like opportunities abound with that low rate of unemployment. We just touched 12.7% here, and the under-25 rate is now hovering around 42.7%.

    But we’re green here, and we’ll never dream of fracking Mother Gaia. After all, we know that our major earthquakes last year occurred just because the government was just about ready to issue its first licenses for exploratory drilling. Soon we’ll all be eating zero-kilometer food (mostly our neighbors’ dogs), and living without generating any garbage whatsoever–just like we are assured they do in San Francisco.

    Welcome to liberal politics gone wild–this is your future I’m looking at.

  3. Eckenhuijsen Smit May 3, 2014 at 5:19 AM

    As long as the gay, communist, Islamic, super liar and criminal Barry Hussein Obama Soetoro is able to tell the world that manmade CO2 is a dangerous gas, while in effect all CO2 in the atmosphere is indispensable for all life on earth, nothing can save you Americans from oblivion; get rid of that despicable idiot and put him behind bars on death row together with his transsexual lover Michelle born Michael LaVaughn Robinson!

  4. Roland May 4, 2014 at 8:08 PM

    It is not
    about climate change, it is how to implement UN Agenda 21. In regards to global
    warming and the IPCC, the fact is actually that there are a whole host of
    scientists out there who have a different point of view, who are highly
    respected, reputable scientists. So the 97% of WWF and Greenpeace approved
    scientists do not mean a lot in any case because science is not a consensus
    issue. Science is whatever the science is and the fact remains there is no
    empirical evidence to show that man-made CO2, man-made emissions are adding to
    the temperature on earth. There is no scientific evidence or prove that the
    greenhouse effect actually exits. We haven’t had any measurable increase in
    temperature on earth for at least 17 years despite the ever raising increase in
    CO2. If one looks back over history, there’s no evidence that CO2 has driven
    the climate either however some fundamentalist try to twist science. A so
    called 99% probability is not science it is still a guess or hypothetical
    assumption and that is provided by the media as fact, well it is not. Changes
    in global temperature have little or nothing to do with CO2.

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