Renewables Have Glaring Obstacles to Overcome for California

Solar panelsBloomberg is now reporting that solar energy is cheaper than coal, and could become the lowest form of energy within a decade. Economies of scale are causing solar to drop from an average of $1.14 a watt all the way to .73 cents per watt by 2025. This should be great news for California’s overwhelming embrace of renewable energy.

Agencies such as the U.S. Department of Energy’s National Renewable Energy Lab to the International Energy Agency all confirm this decline in costs. Capacity for solar is doubling causing lower costs for bank loan premiums and manufacturing capacity in the solar energy space; and now with Tesla’s gigafactory opening, the cost of batteries is also expected to drop for electric vehicles and home battery systems.

China also plans to invest over $360 billion on renewable energy and fuels to help decrease their serious smog issues. Unsafe, coal-fired power plants are currently suffocating that country’s air supply. And California can feel the affects of China’s crippling smog depending on seasonal wind patterns.

California could be entering a new era in energy, and an era renewable investors and environmental advocates have been touting this century. Unfortunately they are overlooking glaring weaknesses, and for renewables to truly breakthrough into a low-cost, scalable energy along the lines of coal, oil and natural gas numerous obstacles such as costs, back-up generation power, storage and grid modernization will need to be solved.

Gov. Brown, the California Legislature and the California Air Resources Board need to understand the true costs and limitations at this time when using renewable energy.

Yes, costs are possibly going down for solar and wind, but is that truly the case? And while costs for manufacturing and kilowatts per hour are dropping that isn’t the final costs when it comes to renewables. The BP Statistical Review of Global Energy in 2015 showed renewables provided only 2.4 percent of total worldwide energy needs, hydroelectric power generated 6.8 percent and nuclear came in at 4.4 percent. California citizens and businesses need clean fuel, and at this time renewables can’t provide that for them.

Moreover, no matter how much renewables are touted as a replacement for fossil fuels, and even with positive economies of scale, they still will not overtake coal, oil and natural gas in the near future even with AB32 and SB32 in effect.

Weather is the biggest hindrance for both solar and wind, but not as much for biomass or hydroelectric – though hydroelectric, or the process of damning water for electric use, can run into serious environmental issues. But if the sun isn’t shining and the wind isn’t blowing then solar and wind become difficult to use without fossil fuels – particularly natural gas and coal-fired power plants – backing them up. Additionally, batteries have not caught up to enhanced storage for renewables, and they aren’t productive enough for entire California cities, counties and the state at-large.

When looking at the total cost of renewables versus fossil fuels there really isn’t a comparison in the near-term future because wind and solar can only generate intermittent electricity. Fossil fuels can run without backup supplies, and then factoring in levelized costs for renewables makes them under-productive and more expensive as a wide-scale energy source for California.

As much as California continues using renewables it still hasn’t been achieved without fossil fuels backing them up. The Energy Information Administration’s Annual Energy Outlook 2017 to 2050 (page 13) only has renewables at 18-26 percent penetration by 2050 in the United States. The equivalent of not understanding the facts about renewables are how electric vehicles currently only have 1 percent of the market and are projected to only have 6 percent by 2040, but are highly touted as being able to replace the combustible engine vehicle.

Energy storage and grid modernization are separate issues for California policymakers to understand, yet the two issues are linked together in many ways. How energy is stored from fluctuating renewable sources (wind and solar) are needed to accommodate, “multiple grid services, including spinning reserve and renewables integration.” To improve the problem of intermittent generation for resources such as wind and solar the EIA recommends:

“Examine the potential for transmission (grid) enhancements to mitigate regional effects of high levels of wind and solar generation while developing higher resolution time-of-day and seasonal value and operational impact of wind.”

Further, the EIA also perceives utility rate structure for different levels of photovoltaic solar generation being needed to control costs for consumers and industry when using renewable energy. What the EIA is saying is that renewables fluctuate in power generation based upon different weather patterns, which causes the grid to fluctuate. These upward grid spikes are then passed on in higher electricity costs to utility’s customers. It is one of the reasons California has some of the highest energy costs in the United States due to its heavy reliance on renewable energy.

The most important component in the entire process of renewables overtaking fossil fuels for a cleaner future is grid modernization. According to T. Boone Pickens, “The electrical grid of the future will have to be built,” for renewable energy to overcome the above-mentioned hurdles. With California’s exploding pension costs it is difficult to envision a brand new, multi-trillion dollar grid being built in the near future.

Renewable energy has incredible potential for California, but until power grids are modernized renewables will lag behind fossil fuels through rising costs and unstable energy delivery. California’s electric grids can’t handle millions of electric vehicles, varying, spiked energy from wind and solar and the ability to be flexible the way a natural gas power plant is at this time. The best power plants for energy efficiency and lowering carbon emissions while keeping costs reasonable are natural gas. A natural gas-fired power plant is the biggest reason coal is losing market share in the United States.

Majorities of Californians want renewables to be the number one source of energy in our state’s portfolio for cleaner air, water and a healthier environment. But instead, renewables like electric vehicles have taken on a fad-like quality without the technology having caught up to the hype. CARB needs to look at the facts, and not the emotions that currently lead the renewable energy debate. Let’s not pit renewables against fossil fuels, but look to incorporate the different energy sources into what’s best for California and the United States.

Todd Royal is a geopolitical risk and energy consultant based in Los Angeles.

Hold Climate Change Policy-Makers Accountable for Economic Consequences

Global WarmingIn reaction to the election of Donald Trump, California’s governor, state Legislature and Air Resources Board have made clear their intention to double down on our state’s already strictest-in-the-nation climate change policies.

Making such claims is easy when ignoring the current cost burden of the state’s climate policies on consumers and businesses, and how much more the costs will skyrocket under increasingly high greenhouse gas reduction targets.

Unelected bureaucrats at the California Air Resources Board have resisted any legitimate attempt at conducting a comprehensive economic analysis of AB 32, the state’s landmark 1996 global warming law– either during the rulemaking process or once the regulations took effect. CARB is attempting more of the same with the newly established 2030 40 percent emissions reduction target.

The significant consequences of this one-sided approach are being ignored as part of the policy and regulation development process. These rules will have real-life cost impacts on every major industry in California and every resident, who will see higher prices for food, electricity, gasoline, housing and just about all the necessities of life.

Higher costs, in addition to increasing consumer prices across the board, make California businesses less competitive with out-of-state companies. These have already resulted in a sharp decline in jobs, notably well-paying blue-collar jobs in the manufacturing, oil and gas and construction sectors, and a concurrent loss of tax revenues that support education, public safety, and social service programs.

It doesn’t have to be this way.  Sacramento lawmakers should demand that state agencies like CARB conduct objective economic analyses in order to craft balanced climate change regulations that will not exponentially increase costs on California’s businesses and families — especially those in lower income communities, which pay a larger share of their income in energy and transportation costs. Any increases created by new regulations will disproportionately impact those families who can least afford it.

Independent studies and subject matter experts have waved a warning flag about the economic impact and its burden on families and businesses. A recent study has shown that our climate change agenda will increase costs by $3,000 per year for every family in California. The Director of Stanford University’s Precourt Energy Efficiency Center has cautioned that achieving the new 2030 goal would likely entail “large economic costs,” and lead to a “less diversified and more fragile state economy.”

CARB has initially estimated that its new regulations could cost 100,000 jobs and result in the loss of up to $14 billion in gross economic output, which the agency brushes off as relatively immaterial in the context of the state’s overall economy.

Among regulatory initiatives being considered in CARB’s recently updated AB 32 Scoping Plan are: forcing higher density of commercial and residential developments; developing “pricing mechanisms” such as road user/vehicle miles traveled-based pricing, congestion prices and parking pricing strategies; creating expensive multiple “incentives” to make electric vehicles artificially more affordable than conventional vehicles and imposing arbitrary and unrealistic quotas for market penetration; and forcing decreases in the use of affordable, widely available fossil natural gas. These and other proposed mandates will significantly increase the cost and availability of housing, electricity, gasoline and diesel fuel and the cost of manufacturing and transporting goods produced in California with a chilling effect on jobs and revenues.

California can do better. Sacramento legislators have an opportunity to provide essential oversight over a regulatory body to ensure their constituents and the businesses they represent are not unduly burdened. It’s important to note that because California generates less than one percent of worldwide greenhouse gas emissions, which know no boundaries, the hardships our state’s climate policies impose on its people and economy have little more than symbolic value.  This is why CARB must conduct a comprehensive economic analysis now, to weigh how aggressively we should get ahead of other states or nations with regard to climate policies.

Executive Director of the Industrial Association of Contra Costa County

This piece was originally published by Fox and Hounds Daily

California Fights Greenhouse Gas – Farting Cows – by Driving Dairies Out

cowsThirty percent of California dairies have closed and hundreds of thousands of milk cows have been slaughtered over the last decade. Meanwhile, California liberals are crediting themselves for reducing greenhouse gas emissions from farting cows.

When California’s Democrat-controlled legislature passed the California Global Warming Solutions Act of 2006, known as AB 32, few understood that the action was a financial attack on Republican rural agricultural communities that over the next decade would see 600 dairies forced to shut down.

Despite the higher energy costs for farming, processing, and transportation to comply with AB 32, California’s remaining 1,400 dairy families and their 1.74 million milk cows are still ranked first in the U.S. for milk, butter, ice cream, nonfat dry milk, and whey protein concentrate production, plus second in cheese production. With $9.3 billion of sales, about 20 percent of America’s total, the California dairy industry is the state’s largest agricultural activity, accounting for 2 percent of the state’s economy.

But in the “Fake News” parroted by the media in the run-up to the elections, Sacramento Democrats claimed they needed to pass radical legislation in September to combat the “14.5 percent human-induced greenhouse gas emissions” that a United Nations 2013 report claims is produced by livestock, “with modern beef and dairy production accounting for the bulk of it.”

The “Mitigation of Greenhouse Gas Emissions in Livestock Production” report produced by the Food and Agriculture Organization of the U.N. in November 2013 states that enteric (intestines) produced methane (CH4) emissions from livestock may contribute 7 percent of worldwide greenhouse gasses. The report also praised the modern dairy activities seen in California as environmentally friendly, since “grain-fed beef has a lower environmental footprint than grass-fed beef systems,” and the “largest GHG emissions in a beef production system (about 80 percent of the total) occur in the cow-calf phase, when cows and their calves are consuming predominantly forage-based diets.”

In spite of the fact that in California dairy farmers exclusively feed their dairy cattle grain and only utilize mature females, Democrats and one Republican voted to pass SB 1383, which requires a 40 percent in livestock greenhouse gases below their 2013 levels by 2030. It also allows the Air Resources Board to regulate cow flatulence, if a practical technology exists to reduce it.

Although Gov. Brown said, “This bill curbs these dangerous pollutants and thereby protects public health and slows climate change,” two complex crony amendments were taken in the final hours that effectively barred the National Federation of Independent Business and  small farmers from understanding the impacts of the changes to the bill and having a chance to voice their strong opposition.

The real goal of the legislation was to fund another wildly subsidized sustainable energy boondoggle, with $90 million in grants from the state’s cap-and-trade revenues that will likely fund investments by large corporate farmers in dairy digesters and waste disposal corporations for composters. Both will use methane from manure to generate energy sold to electrical utilities at super-premium prices.

Dairy farmers say the new regulations will drive up costs when they are already struggling with five years of drought, low milk prices, and rising labor costs. They are also concerned about a newly-signed law that will boost overtime pay for farmworkers.

Director of environmental services for Western United Dairymen Paul Sousa was quoted by the San Francisco Chronicle: “It just makes it more challenging. We’re continuing to lose dairies. Dairies are moving out of state to places where these costs don’t exist.” He said he expects more “complete dispersal” auctions to close dairies and slaughter their mature herds.

This piece was originally published by Breitbart.com/California

Let’s Pump the Brakes on Cap-and-Trade

cap-and-trade-mindscanner-sstockIn 2006, elected officials gave the California Air Resources Board virtually unchecked authority to implement AB32, which aims to reduce carbon emissions to 1990 levels by the year 2020. The legislation, including the controversial cap-and-trade program, expires in four years.

Some lawmakers have already introduced legislation, such as SB32, to extend CARB’s authority. However, instead of rushing to renew this controversial and expensive program, we should slow down and come up with a more affordable solution that benefits all of California.

Cap-and-trade limits carbon emissions by energy producers and raises money through the sale of carbon credits. It’s supposed to fight global warming by making it more expensive to use carbon-based fuels. But that’s not the only thing it does.

It turns out the program has made life more expensive for Californians as well.

Since being given the authority, CARB has implemented a steady stream of costly regulations, such as the “hidden gas tax.” Experts agree that this hidden tax costs California drivers at least 10 cents more in added cost per gallon of gasoline. They also acknowledge CARB’s “low-carbon fuel standard” could add another 13 cents per gallon by 2020.

Motorists might be open to paying these costs if the money actually went towards repairing our crumbling roads. Instead it seems the cap-and-trade program has become a multi-billion dollar slush fund for politicians’ pet projects.

Perhaps intentionally, CARB still hasn’t come up with a systematic way to determine if cap-and-trade dollars are really doing anything to help lower emissions levels.

There is little consensus on what constitutes a “green project.” When pushed for answers, CARB officials deflect. This obscurity allows the governor to direct cap-and-trade funds towards his $71 billion high-speed rail project, which is actually increasing the state’s carbon emissions.

Some cap-and-trade funds were supposed to go towards programs for low-income communities that want to invest in renewable energy. Because CARB is largely free to do as it wishes, there’s no real way of knowing if these grants are reaching their intended targets. That’s a kick in a gut to the less fortunate who supported AB32.

Like you, I want breathable air and clean parks for our children and grandchildren. But do CARB’s unelected bureaucrats really need this much power? Government mandates can be very expensive and inevitably the costs are passed down to consumers. Not everyone can afford a Tesla.

Why can’t we use cap-and-trade funds to solve real problems like emission-causing traffic congestion? Think about it: What pollutes more, a car that reaches its destination quickly or one that’s stuck idling on a freeway for an extra 20 minutes?

A state appeals court has already put the future of cap-and-trade in doubt. And many questions remain, such as how to spend the billions collected and whether or not the program is really an illegal tax. Some doubt CARB has the right to collect the money at all.

There’s also a fierce debate over whether or not regulators can extend the program without the Legislature’s permission. The Legislature’s chief counsel doesn’t think so.

California is already a leader on climate change, and our current law doesn’t expire until 2020. Perhaps we should leave lawmaking to our elected officials, not abdicate power to unelected regulators. Rather than rush an extension, let’s invite the public to join the discussion. Californians deserve clean air, but they also deserve affordable energy—and to know how their dollars are being spent.

George Runner is an elected member of the California State Board of Equalization.

Controversial Carbon Tax Faces Strong Opposition

carbon-tax-1Despite years of success in doing what it was supposed to do — cut emission levels — California’s controversial cap-and-trade system has run up against opposition that could be strong enough to sink it. But with nothing to lose and everything to gain, Gov. Jerry Brown has shifted into political overdrive to save it instead.

Big plans

Through the California Air Resources Board, Brown’s administration has tried to restore confidence among big California businesses that the state’s carbon-trading regime is here to stay. Amendments to the cap-and-trade rules proposed by CARB “envision a carbon market through 2050 with increasing allowance prices,” according to Scientific American. But legal uncertainty has clouded CARB’s ability to promulgate such regulations beyond the year 2020, “thanks to a combination of potentially limiting language in the original climate law, AB32, and a lawsuit challenging the legality of cap-and-trade auctions under a law requiring a two-thirds legislative majority to approve taxes,” the magazine added.

“The amendments released [last month] would establish decreasing emissions caps for covered entities through 2031, to reach 40 percent below 1990 levels, and would include preliminary caps through 2050 ‘to signal the long-term trajectory of the program to inform investment decisions.’ Other proposed amendments would provide for compliance with U.S. EPA’s Clean Power Plan for existing power plants, allocate allowances to businesses in order to prevent emissions from escaping state borders, and streamline how emitters register and participate in auctions.”

Backrooms to ballots

Despite broad support for an extended cap-and-trade system among influential Democrats, whose grip on Sacramento is virtually unchallenged, California’s legislative counsel has sided against CARB on the extension plan. “Meanwhile, a lawsuit from the California Chamber of Commerce charges that the permit fees are a tax and should have required a two-thirds vote in the Legislature to take effect,” as the San Francisco Chronicle reported. “Although the suit has dragged on for nearly four years, questions raised by an appeals court judge in April suggested that he might side with the chamber.”

The ordeal has presented Gov. Jerry Brown with a potentially devastating threat to one of his keystone policies. Although the governor “has been trying to muster support from at least two-thirds of the Legislature, in case the Chamber of Commerce wins its suit, […] convincing Republicans and business-friendly Democrats hasn’t been easy,” the paper added. “And the current legislative session ends Aug. 31.” Beyond the obvious challenge of securing Republican support, Brown must contend with members of his own party, who have split awkwardly on cap-and-trade since before its inception.

“When the law enabling cap and trade was being argued over, the whole progressive left-of-the-left were pretty suspicious of carbon trading,” as Stanford Law energy expert Michael Wara told Wired. “So the law’s authors offered a compromise: the state Legislature would re-evaluate cap and trade in 2020,” the magazine noted. “It didn’t seem like a big gamble at the time.” But Brown’s determination to use revenues from the program to fund his cherished high-speed rail project — according to environmentalists, not the greenest expenditure to choose from — added another political wrinkle.

Now, the prospect of a drawn-out loss in the Legislature has raised speculation that Brown will respond, in a manner somewhat reminiscent of former Gov. Arnold Schwarzenegger, by taking his plans directly to the voters. Preparing for a showdown, Brown has launched — perhaps for the last time as governor — back into campaign mode. “Mr. Brown last week created a PAC, Californians for a Clean Environment, signaling he may turn to voters for support to extend cap and trade and the state’s emissions-reduction goals through a ballot initiative,” the Wall Street Journal recalled. “The program is particularly important to Mr. Brown, as profits help fund the state’s planned bullet train, among other goals by the state’s Democrats.”

Within the Brown camp, however, the official line has remained more optimistic than the ballot preparations might suggest. “There is no state or nation in the Western Hemisphere doing more to curb carbon pollution and our dangerous addiction to oil than California,” said Brown’s executive secretary, Nancy McFadden, in a statement noted by the Journal. “The governor will continue working with the legislature to get this done this year, next year or on the ballot in 2018.”

This piece was originally published by CalWatchdog.com

Conventional Fuels Still of Vital Importance to California

Gas-Pump-blue-generic+flippedThe American Society of Civil Engineers recognized oil as an element of “infrastructure” in California in its 2016 Infrastructure Report Card. That report card clearly documents the fact that there are no easy answers to our complex energy and transportation challenges for the future.

Fossil fuel permeates every aspect of our daily lives. It has driven an exponential increase in human numbers and civilizations from the horse-and-buggy days. It enables us to easily get to work, school and medical facilities as well as the freedom to travel for family and recreational purposes. It supports the quality of life Californians take for granted. We need more – not less – fossil fuels to develop economies and basic infrastructures for the people of developing and third world countries.

This has been lost on the part of many lawmakers and regulators who have come under intense pressure from the powerful anti-oil lobby to eliminate fossil fuel production and use at the local and state level in California, primarily to reduce greenhouse gas emissions associated with climate change. Wind and solar are only able to provide intermittent electricity to the grid, but cannot provide the oil or the oil by-products that are the basis of every component of modern civilizations’ industries and infrastructures. This is an overly simplistic approach to addressing the complex international challenge of forestalling global warming.

The fact is, oil is the only energy source that is technically able to power about 95 percent of our state’s 32 million vehicles with transportation fuel demands of 40 million gallons per day. It’s just common sense to produce as much of that crude oil and manufacture the transportation fuels as much as possible in California for its 38 million citizens who live on an “energy island” for several reasons: First, our state has the nation’s strictest environmental laws, generating far lower greenhouse gas emissions than those associated with producing and transporting oil from countries with weaker rules. Second, it would provide California consumers with the energy security necessary to protect us from disruptive and costly supply interruptions. Third, it would be good for our economy, providing jobs and revenues right here in California instead of in other states and countries.

Despite this reality, regulators continue to recklessly forge ahead with schemes to force an immediate move away from reliable fossil fuels in favor of alternatives and renewables. With both in-state crude oil production and shipments from Alaska on the decline, shipments from foreign countries, already at 52 percent of California’s needs, will be increasing. An alternative to reduce dependency on foreign crude is approval of crude transport by rail from the Midwest or Canada to meet the demands on the California energy island.

One scenario under consideration by the Air Resources Board would mandate that the number of electric, plug-in hybrid and fuel-cell vehicles increase from the current 300,000 to 5 million and 40 percent of new car sales by 2030, regardless of cost or feasibility.

There are local efforts underway as well. For example, here in the Valley area, two of three planned phases to expand access to the San Fernando Road bike path have been completed, and the third is underway. But is it intellectually honest to think that Valley commuters will be able to use a roughly three-mile bike path to get to jobs throughout the more than 4,000 square miles of Los Angeles County alone?

A recent traffic study concluded that six of the most congested stretches of highway in the United States are in the Los Angeles area. The101 Freeway in the Valley earned the dubious distinction as the worst highway in the country, where during rush hour it can take 91 minutes to travel 26 miles at an average speed of 17 miles an hour.

So how do we reconcile the desire to fight global warming with the real-life transportation needs of Valley motorists and our counterparts throughout the state? First, some perspective may be helpful: according to the California Energy Commission, our state contributes a miniscule 1 percent of total worldwide greenhouse gas emissions. It’s been a decade since the passage of the flagship climate change policy AB 32, yet, the state has not been transparent with the results of its emission crusade, and remains on a go-it-alone path to micromanage the California emissions that generates billions of dollars for the government at the expense of businesses and the financially challenged. So no matter how much inconvenience and cost we impose on drivers, we are likely to see a return that is purely symbolic, not substantive.

And no matter how many electric cars we put on the road, they will still be stuck in the same maddening traffic jams that increasingly enrage users of more conventional vehicles.

Let’s hope that future generations will be up to the challenge facing humanity to mitigate climate change responsibly and cost-effectively. Meanwhile, as the society of civil engineers report card suggests, California might do well to focus more attention and resources on improving transportation infrastructure to make commuting easier and cleaner for the folks in the Valley and elsewhere.

ounder of PTS Staffing Solutions, a technical staffing agency headquartered in Irvine

Legislature Returns to Action in August: What to Watch For

CA-legislatureAugust is sure to be a busy month in Sacramento, as legislators fight to get their priorities passed before the legislative session ends on August 31.

While a large number of bills will be debated, there are four things to watch for:

Environment

With the political backing of new polling, Senate Bill 32 — which would extend and increase the state’s greenhouse gas emission reduction goals — is sure to reappear.

Not only is it a legacy project for the termed-out Sen. Fran Pavley, D-Agoura Hills — who authored the 2006 measure that this bill would extend — but it is backed by both Democratic leaders, Speaker Anthony Rendon and Senate President Pro Tempore Kevin de Leon.

“A clear majority of Californians strongly support our state’s climate policies and expect their elected leaders to build on our progress battling climate change and air pollution while making investments in clean energy across our state,” de Leon said in a statement on Wednesday. “This is why the Legislature should extend our climate targets in statute by passing Senate Bill 32.”

Republicans are opposed to the measure, which leaves the power to a handful of moderate, pro-business Democrats. The bill passed the Senate in 2015, but was defeated on the Assembly floor and then granted reconsideration.

An interesting data point: 15 Assembly members didn’t vote — which is a way of voting “no” without any accountability.

Transportation

The Legislature has been in a special session on transportation since last summer to come up with a funding plan to fix the state’s crumbling roads — but with little headway. Gov. Jerry Brown estimates there are almost $6 billion worth of unfunded repairs throughout the state each year.

The dispute is largely between Democrats who have proposed additional revenues (taxes) and Republicans who believe new taxes aren’t necessary as the money already exists but has been redirected to stop budget shortfalls in other areas.

Rumor has it that Democrats will propose what could be a massive package including new revenue, like a gas tax hike, sometime next month — although, since there’s a special session, it could be introduced after the regular session ends.

Republicans are unlikely to budge, but it may not matter what they want. Republicans are in danger of ceding a supermajority to the Democrats in November. If that happens, Democrats would be able to approve new revenues without Republican support.

Of course, the required two-thirds majority wouldn’t leave much room for defections from moderate Democrats.

Overtime for farmworkers

While farmworkers do get overtime, it has a much higher threshold than other professions. A revived bill would, over time, bring the threshold in line with other professions. You may remember that this bill was defeated in June, but it has been repackaged into another bill.

Proponents argue that farmworkers shouldn’t be exempt from the same overtime and break rules as everyone else. Opponents say farmers can’t afford it, and that an industry dependent on weather and external price setting can’t be regulated the same as other professions.

It’s unclear what would be different when the next vote comes that would make business-friendly Democrats, who sided with Republicans to defeat the measure, change their votes. Election year pressure may sway some vulnerable incumbents.

Of course, the measure was only three votes shy of passage, so proponents may target the seven Assembly members who simply didn’t vote, six of whom are Democrats.

Housing

It’s widely reported that the state faces an affordable housing crisis, particularly in urban centers.

Gov. Jerry Brown has been trying to increase affordable housing supply with a plan to reduce regulatory barriers for developers trying to build low-income housing. His ideas have not been embraced by the Legislature and he faces opposition largely fromunions and environmentalists.

Meanwhile, Sen. Jim Beall, D-San Jose, still has hopes of putting a $3 billion, low-income housing bond on the November ballot.

CARB Threatens Greenhouse Gas Law Extention

carbon-tax-1The California Air Resources Board set a match to controversy this week suggesting that the board could push the cap-and-trade deadline for funding greenhouse gas reduction programs past its 2020 end date by executive fiat.

That’s not the way the law works, many Republicans cried, and they are backed up by an opinion from the Legislative Counsel’s Office.

According to the opinion, “The act does not authorize the governor or the ARB to establish a greenhouse gas emissions that is below 1990 level and that would be applicable after 2020.”

Republican Senate Minority Leader Jean Fuller called the ARB proposal “illegal” and admonished the executive branch, “Californians deserve better than a government that acts as if they are above the law.”

Many in the business community feel fixes are needed to the current program before any extension is contemplated. Dorothy Rothrock, president of the California Manufacturers and Technology Association said in a release following the ARB announcement, “Manufacturing investments and jobs have lagged other states in the US over the past six years by a large margin. Future climate policies must recognize this reality and be designed to protect California’s manufacturing jobs and economy.”

The cap-and-trade policy ARB wants to extend is subject to court action already, as business interests, including the California Chamber of Commerce, brought suit claiming the cap-and-trade formula is actually a tax requiring a two-thirds vote of the legislature. The law establishing cap-and-trade, AB 32 of 2006, was established by majority vote. While a lower court brushed aside the business complaint an appellate court is now considering the matter. Observers watching court action say there is a chance the lower court decision could be reversed.

There is another way for the legislature and the governor to extend the cap-and-trade end date and lower the greenhouse gases goal below 1990 levels. Pass legislation.

That is exactly what some in the legislature are trying to do with SB 32, that would extend the law lowering the acceptable greenhouse gas level 40% below 1990 levels by 2030.

The court case, however, raises doubt about whether the SB 32 needs a simple majority vote or a two-thirds vote.

In a Flash Report column yesterday, state Senator Andy Vidak said attempts are being made by Democratic leaders in the legislature to secure enough Republican votes to allow SB 32 to pass by two-thirds. If true, that is a strong indication that the Democrats are concerned the court will side with the CalChamber over the tax issue and brand cap-and-trade an illegal tax.

Yet, the politics over changing the greenhouse gases law do not stop there. Another consideration is one posed by L.A. Times columnist George Skelton who suggested California voters in November, reacting negatively to a Trump candidacy, might defeat Republican officeholders thus securing a two-thirds vote in both houses of the legislature for the Democrats.

In that case, the strategy for the Democrats just might be to bide their time. Then again, you might conclude that the politics don’t stop at that point, even with a two-thirds Democratic majority, because the politics of energy and its cost have split the Democratic caucus in the past and could do so again.

ditor of Fox & Hounds and President of the Small Business Action Committee.

This piece was originally published by Fox and Hounds Daily

How Gov’t Unions and Crony Capitalists Exploit Global Warming Concerns

Global WarmingIf anyone is looking for evidence that government unions use their immense influence to support the growth of an authoritarian state, look no further than their unequivocal support for global warming “mitigation,” and all attendant agencies and laws to support that goal.

In 2006 California’s union-controlled Legislature passed AB32, the “Global Warming Solutions Act,” a measure that was touted as a trailblazing breakthrough in the dire challenge to avoid catastrophic climate change. The premise behind AB32 is that CO2 is a dangerous pollutant, and that eliminating CO2 emissions is necessary to prevent the planet’s climate from overheating, with all the apocalyptic consequences; rising oceans inundating coastal regions, epic droughts cascading through the world’s fragile forests and killing them, extreme storms, acidic oceans, collapsing agriculture – the end of life as we know it.

Maybe that’s true – and maybe not – but how it’s being managed is a corrupt, misanthropic, epic scam.

If anyone is looking for evidence that government unions and crony capitalists work together – contrary to the conventional wisdom that presents the appearance that they are in conflict – again look no further than their shared support for global warming mitigation, expressed in the legislative mandate to reduce CO2 emissions. AB32 implements this by forcing industrial entities to purchase permits to emit progressively smaller quantities of CO2, via an auction process that is expected to raise $20 billion per year to finance renewable energy investments.

Think about how government unions will benefit from all this money:

  • Transit workers will claim a share because they will be getting cars off the road.
  • Firefighters will claim more fires are because of global warming and demand more funds – when in reality most severe wildfires are the result of decades of forest mismanagement and unwarranted wildfire suppression.
  • Cities will qualify for proceeds when they zone extremely high density housing.
  • Code enforcement officers will declare that the percentage of their jobs oriented towards conservation and energy/water efficiency qualifies them for a share of the proceeds.
  • Teachers will declare that the percentage of their curricula oriented towards climate education qualifies them for a share of the proceeds.
  • More generally, municipalities will collect more property tax as restrictive zoning elevates the cost of housing.

Think about how crony corporations and corrupt financial special interests benefit from this money:

  • Wall Street traders will set up new subsidiaries to traffic in carbon emission auctions and take a cut.
  • “Green” entrepreneurs will manufacture devices calculated to save energy and water – despite the fact that the shortages are contrived.
  • Producers of energy and water will sell at higher prices since competitive development of these resources is restricted.
  • Utilities whose profits are “decoupled” from the quantity of energy and water they deliver will increase revenue and hence their profit margins which are pegged to revenue, without having to increase services.
  • Manufacturers of noncompetitive products with no natural demand – high speed rail is a perfect example – are enriched via hundreds of billions of investment for their supposedly greener and cleaner solutions.
  • More generally, artificial scarcity causes asset bubbles which benefits wealthy investors and pension funds, but impoverishes ordinary workers.

Even if CO2 is a threat to life on earth, there is an alternative that merits discussion:

Instead of investing in “green” energy infrastructure and embedded surveillance systems to micro-manage energy consumption, California should be investing in natural gas and 5th generation nuclear power stations, desalination plants along the coast, liquid natural gas terminals, efficiency upgrades to existing high-voltage transmission lines, run-off harvesting and aquifer storage systems, upgraded aqueducts, comprehensive waste-water treatment and aquifer recharge, offshore drilling for oil and gas, widened roads and freeways, more airport runways, and buses for mass transit. These steps will result in energy, water and transportation costing everyone in California less. This will benefit businesses and consumers, and make California a magnet for investors and entrepreneurs all over the world.

And even if CO2 is a threat to life on earth, vigorous debate on that topic should be encouraged, not outlawed.

If you are an informed skeptic – something the axis of government unions and powerful financial special interests are trying to outlaw – it becomes tiresome to recite the litany of legitimate reasons that debate regarding the actual impact of anthropogenic CO2 is of critical importance. The primacy of solar cycles, the multi-decadal oscillations of ocean currents, the dubious role of water vapor as a positive feedback mechanism, the improbability of positive climate feedback in general, the uncertain role (and diversity) of aerosols, the poorly understood impact of land use changes, the failure of the ice caps to melt on schedule, the failure of climate models to account for an actual cooling of the troposphere, the fact that just the annual fluctuations in natural sources of CO2 emissions eclipse estimated human CO2 emissions by an order of magnitude. And let’s not forget – California only is responsible for 1.7 percent of global anthropogenic CO2 emissions. Does any of this matter to the California Air Resources Board?

Apparently not. Nor does it matter to California’s Legislature, which recently stopped just short of passing Senate Bill 1161, the Orwellian California Climate Science Truth and Accountability Act of 2016. SB1161 would have authorized prosecutors to sue fossil fuel companies, think tanks and others that have “deceived or misled the public on the risks of climate change.”

What California’s legislature ran up against, of course, was the U.S. Constitution. Perhaps they believe time is on their side. After all, even the Scalia court ruled in 2007 that CO2 is pollution, in one of the most frightening inversions of reality in U.S. history. Imagine what a court packed with Clinton appointees will come up with.

The failure to deploy clean fossil fuel solutions in the developing world, much less here in California, condemns billions of humans to further decades of poverty, misery, and unchecked population growth. Cheap energy equals prosperity equals population stabilization. Until a few years ago that hopeful process was inexorable. But in recent years, somewhere on the shores of Africa, cost-effective industrial development ran into global warming’s global mafia and was stopped in its tracks.

The consolidation of power inherent in government suppression of energy development and micromanagement of energy consumption is not only a recipe for a corporate union police state in America. It is a recipe for systemic oppression of emerging societies across the world. At the very least, the debate must continue.

*   *   *

Ed Ring is the president of the California Policy Center.

Cap-and-Trade Revenue Drastically Lower Than Expected

carbon-tax-1In yet another blow to California’s besieged bullet train, revenues from this year’s cap-and-trade carbon credit auction fell drastically below the state’s goals, triggering a selloff that left analysts unsure of the system’s long-term viability.

“The results of last week’s quarterly auction were posted and revealed that instead of the $500-plus million expected from the sale of state-owned allowances, the state will get only about $10 million, less than 2 percent,” the Sacramento Bee reported.

“The poor results confirmed reports circulating in financial circles that the cap-and-trade program has begun to stumble. February’s auction resulted in some allowances being left unsold — the first time that had happened. Afterward, there was a brisk trade in the secondary market as speculators began dumping their holdings due to uncertainty about the future of the program, which may expire in 2020.”

Officials and activists swiftly sought to downplay the damage. “Over the long-term allowances will be needed, and so the allowances that will be offered through the auction will need to be purchased,” said Ross Brown of the Legislative Analyst’s Office. “But in the short-term it’s hard to know and it depends on the underlying supply and demand.” From an environmentalist standpoint, meanwhile, “it’s important to remember that […] it’s the declining cap — not the price or number of allowances sold at auction — that drives emissions reductions,” wrote Alex Jackson at the National Resources Defense Council. “That is the purpose of the program, not raising revenue.” But with 2020 looming, Jackson allowed, the one-two punch against high-speed rail and cap-and-trade have cast doubt on California’s strategy of fusing infrastructure and environmentalism into a single economic policy.

Case and controversy

Adding to the upheaval, the carbon credit regime itself has wound up in court, as the state Chamber of Commerce pushes to prove that the legislation authorizing its creation — AB32 — has run afoul of the state constitution. “Propositions 13 and 26 require a two-thirds majority for the Legislature to approve new or higher taxes and fees,” as Hoover Institution fellow Carson Bruno wrote at the Bee. “Whether or not AB32, which barely passed in 2006, is unconstitutional depends on whether the cap-and-trade revenues constitute either a tax or a fee. These auction revenues fit the definition of both a tax and fee. They are imposed by a government entity, spent on government activities and are collected in exchange for a transaction — in this case a permit to emit greenhouse gases.”

Officials have countered that argument in court. “The state contends the fees are not taxes, but a consequence of regulations,” as the Times noted. But a judge hearing arguments “recently asked a series of questions that perhaps fueled speculation that he might rule in favor of the suit,” according to the paper.

The governor’s gambit

Flexing his considerable political skill and discipline to balance competing interests to his ideological left, Gov. Jerry Brown had labored to ensure that cap-and-trade funds could be leveraged to make the train a viable public and private sector investment. That presumed a degree of stability in revenues that now can’t be relied on. “The rail authority had been expecting about $150 million,” the Los Angeles Times observed; now, it will receive just $2.5 million. “Whatever prompted the lack of buyers, the auction is a stark example of the uncertainty and risk of relying on actively-traded carbon credits to build the bullet train, a problem highlighted in recent legislative testimony by the Legislative Analyst’s Office and a peer-review panel for the $64-billion high-speed rail.”

Brown had hedged against just such an eventuality, however. State finance spokesman H.D. Palmer “noted that there is a $500-million reserve set up in anticipation of volatility that could help close the gap,” the Times added. But Brown will have to clear the emergency expenditure in Sacramento, where some liberal lawmakers, hoping to channel more money to environmental policy, could try to nix the scheme by aligning with Republicans long bent on scrapping the train.

This piece was originally published by CalWatchdog.com