Political Climate

Palin talks energy policy

Yesterday, in only her third policy speech of the campaign, Sarah Palin tried her hand at energy policy - and, truth be told, she did a pretty okay job. Sure, the speech drifted a little from her prepared remarks, and was sprinkled with the usual folksy asides and bubbly interjections. (“I get so excited talking about energy! I want to get you excited about it!”) But she didn’t mangle her lines, and came across as someone who - while perhaps not the nation’s foremost energy expert - at least had a decent grasp on the policies she was setting out.

Unfortunately, though, while Palin’s delivery was pretty good, the actual content of the speech left plenty to be desired. We got treated to the usual drill-baby-drill, mine-baby-mine claptrap, of course; we also heard Palin tout her role in planning a $40 billion natural-gas pipeline, just days after the AP reported that the planning process had been so fundamentally flawed that the pipeline itself may never be built.

Most troublingly, we also got a new glimpse at the way that Palin and McCain would move forward on climate change - and it’s not a pretty sight. Palin didn’t mention the words “climate change” or “gobal warming” once; the nearest she got was when she said that a McCain-Palin administration would “control greenhouse gas emissions by giving American businesses new incentives and new rewards to seek, instead of just giving them new taxes to pay and new orders that they must follow.”

As Joe Romm points out, that’s a worrying distinction to draw. McCain ostensibly favors cap-and-trade climate legislation, but since at least January he’s been edging away from imposing mandatory carbon reductions, the necessary centerpiece of any cap-and-trade plan. This summer, McCain’s economic adviser Steve Forbes admitted that cap-and-trade wouldn’t “go far” under a McCain administration. The campaign even ran ads attacking the Democrats’ climate plan as a route to “higher taxes on electricity”.

Now McCain’s running mate, in remarks approved by the campaign, says that the McCain administration would try to end global warming by using voluntary incentives rather than a top-down regulatory system. That’s a sign of how far McCain has drifted from his time as a global-warming crusader; these days, his plans sound more like a continuation of the Bush administration’s disingenuous fudging and buck-passing than a genuine attempt to solve the climate crisis.

The trouble with Ted

Everyone from Mitch McConnell to Sarah Palin is lining up to stick the boot into Ted Stevens, the 84-year-old Alaskan senator who was convicted this week on seven felony charges for failing to report more than $250,000 in gifts and home renovations paid for by oilman Bill Allen. Fair enough, of course; when all’s said and done, an illegal ethics violation is an illegal ethics violation. Still, there’s a sizable group of greens who are expressing mixed feelings about the veteran lawmaker’s apparently imminent political demise.

Stevens - a fierce advocate of drilling for oil in the Arctic National Wildlife Refuge and logging in the Tongass National Forest - is an unlikely figure for anyone in the environmental movement to be championing. Some of the handwringing may stem from the fact that Stevens has been one of the few longtime climate skeptics to reassess their views in the face of new evidence; last year, he grudgingly admitted: “We’ve got global climate change … and part of it may be, I believe, called by the accumulation of the activities of man.” Since his climate u-turn, Stevens has put his money where his mouth is, introducing a new fuel-economy bill to reduce emissions from passenger vehicles, and voting for renewable energy, biofuels and wetlands conservation legislation.

Perhaps more importantly, Stevens has also been a powerful advocate for fisheries and ocean conservation during his time in the Senate, pushing through dozens of important bills including the Fishery Conservation and Management Act, which oversees the US fishing industry and sets catch limits in a bid to preserve stocks. "When Ted Stevens leaves, there is going to be a tremendous vacuum in fisheries policy and ocean management because he really did accept responsibility, for better or for worse, for all the oceans," Dave Allison, senior campaign director at Oceana, told E&E this week.

Stevens’ Democratic rival, Mark Begich, might well take up some of Stevens’ trademark issues if he defeats the Republican in next week’s election. It’s clear, though, that he’d have less influence than Stevens, who’s variously held key positions on the appropriations, commerce, science and transportation committees. None of this cancels out Stevens’ transgressions, of course, and it’s almost certain that his position as a senator has become untenable; it’s worth noting, though, that as and when Stevens bows out, he will - in some quarters, at least - be sorely missed.

McCain hearts ethanol

It turns out that the Straight Talk Express is a flex-fuel vehicle: when the going gets rough, John McCain is willing to fill up on ethanol in order to keep his dreams of winning the White House alive. On the stump this week in Iowa - the king of the corn states - McCain told voters that his administration would “invest in all energy alternatives: nuclear, wind, tide, solar, ethanol, biofuels.” He added: “On the subject of ethanol, my friends, I will open every market in the world to the best products in the world, and that’s the American agricultural farmer and worker.”

That raises more questions than it answers - ethanol is barely competitive in the US, where it benefits from a $1-a-gallon tariff-and-subsidy package, so it’s unclear how McCain intends to export the stuff. Still, his statements mark a clear shift in tone for a candidate who’s made his opposition to ethanol subsidies a centerpiece of his straight-talking political persona. This is a man, after all, who in 2003 witheringly dismissed ethanol as “a product that would not exist if Congress didn’t create an artificial market for it” and declared that the stuff does “nothing to reduce fuel consumption, nothing to increase our energy independence, nothing to improve air quality.”

Perhaps we shouldn’t be surprised by McCain’s change in heart. In the summer of 2006, when he still thought his road to the Republican nomination might run through Iowa, McCain told voters: “I support ethanol and I think it is a vital, a vital alternative energy source not only because of our dependency on foreign oil but its greenhouse gas reduction effects.” It was only when Iowans spurned his advances that McCain reverted to blasting ethanol as the mother of all pork projects. Now McCain needs Iowans’ votes once more, so he’s pivoted on his heel and gone back to cheering for the biofuel boondoggle.

Of course, while McCain’s flip-flopping is lamentable, he’s hardly the only politician pandering to Iowans. Barack Obama drank the corn-ethanol Kool-Aid long ago, although he’s tempered his language somewhat in recent weeks. And McCain’s running mate, Sarah Palin, engaged in a little freelance ethanol boosterism last week, giving rise to speculation that she was positioning herself for a 2012 presidential run. One way or another, it looks like ethanol will remain part of the American political equation for some time to come.

A biofuel bailout? Don't bother

The government’s $700 billion bailout, designed to get the US economy back on its feet, could soon be extended to the already-bloated corn-ethanol sector. According to Secretary of Agriculture Ed Schafer, the USDA is poised to offer struggling ethanol producers guaranteed loans of up to $25 million apiece in a bid to help them deal with fluctuations in the price of corn.

Ironically, the bailout is necessary not because ethanol producers are having to pay more for the corn they use, but because they’re paying less. Last summer, as corn prices were rising - thanks in part to the government-subsidized diversion of food crops for biofuel feedstocks - ethanol companies sought to speculate on the price of corn, committing to buy vast quantities of the crop at then-current prices.

Unfortunately for the ethanol giants, the economic downturn has had the same effect on corn prices that it’s had on gasoline prices: the grain has slumped from $7 a bushel over the summer to roughly $3.50 a bushel at present. That’s left ethanol companies with big headaches and a whole lot of overpriced corn; one company now predicts it’ll post losses in excess of $100 million in the third quarter alone.

This all sounds pretty similar to causes of the banking crisis: greed, incompetence, blind optimism, lack of regulation and insufficiently hedged bets. Perhaps it’s not surprising, then, that Schafer says that like the banking sector, the ethanol industry is too big and too important to be allowed to fail. “We're going to continue to support it and shore it up as much as we can,” he said last week.

The truth of the matter, though, is that the government is already shoring up the ethanol industry: it’s handed over about $80 billion in subsidies, and created favorable trade barriers that give US producers a $1-a-gallon edge over foreign ethanol companies. Even with those advantages, ethanol giants are struggling to stay out of the red: the six biggest ethanol companies in the US have collectively lost more than $8.7 billion in market value in the past three years.

The bottom line is that biofuels just don’t add up: they aren’t good for the planet, they aren’t good for the economy, and they aren’t going to make us energy independent anytime soon. Bailout, schmailout - it’s past time for the federal government to cut its losses, and stop throwing good money after bad.

Polluter pays? Not so much

Corporate polluters spewing filth into your air and water? Don’t worry - the Environmental Protection Agency has your back. Why, only this month the agency imposed a $1.25 million penalty on a developer who bulldozed and diverted a five-mile section of Arizona’s Santa Cruz river, one of the largest such fines in EPA history. “Today's action contributes to EPA's record-shattering enforcement results," bragged Granta Nakayama, who runs the EPA’s enforcement office. "To date, EPA has concluded enforcement actions requiring polluters to spend an estimated $11 billion on pollution controls, clean-up and environmental projects, an all time record for EPA. After these activities are completed, EPA expects annual pollution reductions of more than three billion pounds."

Sounds good, right? The only problem is that according to a new Government Accountability Office report, the EPA has actually slashed its enforcement program in recent years, while using dubious accounting practices to conceal the fact from the public. Between 1998 and 2007, the GAO reports, EPA enforcement has slumped from $240.6 million to just $137.7 million. “The bottom line is that environmental enforcement has significantly declined since the Bush administration took office," said Rep. John Dingell, who requested the GAO report. “Under this administration, there have been fewer cases brought, lower penalties assessed, and a decrease in fines collected.”

To make matters worse, the EPA has adopted dodgy bookkeeping practices that significantly overstate their actual enforcement activities. Instead of reporting the fines actually paid by polluters, the EPA has taken to declaring instead the amount it initially asks polluters to pay. That makes a big difference; in recent years, many of the EPA’s largest fines have taken the form of default judgments, imposed at uncontested court hearings, on which the agency admits it has no real expectation of ever being able to collect. In just three recent cases, for example, the EPA won unenforceable default judgments totaling $227.2 million - more than the agency’s total penalty charges for 2007.

The EPA says that reporting the fines that polluters actually pay, as opposed to the penalties it assesses, would be less likely to deter companies from polluting our air, earth and water. But the agency’s tangled book-keeping makes it all but impossible for us to know whether the EPA’s enforcement program is currently providing any significant degree of deterrence. After all, issuing fines doesn’t mean a thing if the offender never pays up.

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