American Elephants


New England Is Unprepared for Looming Power Shortages! by The Elephant's Child

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This gorgeous landscape comes from the Great Lakes last winter. As the Obama administration’s Climate Action Plan is passed on to all departments in the government, the Department of Energy, Department of Interior, Department of Agriculture and the Department of Defense all have programs to promote the presidential  Climate Action Plan. But it is the EPA that is working hard to fulfill their Clean Power Plan. Another stupid attack on the American economy.

Just last week, the governors of the six New England states met in emergency session at Bretton Woods, New Hampshire to discuss the potential full-scale power shortage that seems to be coming. They asked the premiers of five of Canada’s provinces to attend the meeting. If New England is going to get electricity from anywhere, it’s probably going to be from north of the border.

New England has been on a hell-bent drive to rid itself of any form of “dirty” non-renewable energy, and has been closing down coal-fired and oil-fired power plants for the last decade. In 2000, 18 percent of New England’s electricity came from coal and 22 percent from oil. Today it’s  3 percent coal and 1 percent oil. Natural gas has risen from 15 percent to a vulnerable 52 percent. But there is a major problem. New England doesn’t have the pipelines they would need to bring in natural gas.

Eastern Pennsylvania is only a short distance from Connecticut and Massachusetts, where fracking has put Pennsylvania into third place for overall energy production. A proposal from a Huston company to expand its existing pipeline from Stony Point, New York has met with angry resistance from New England greens. They are still fighting global warming and dirty fossil fuels.

Last winter when the real record low temperatures hit, there wasn’t enough gas to go around. Utilities that provide home heating have long-term contracts, and first call. Power plant operators frantically bid against each other for what was left. Prices went from $4 per mBTU to $79 per mBTU. In 2012, New England spent $5.2 gillion on electricity in the whole year. Last winter they spent $5.1 billion just in the first four months.

The CEO of the Independent Systems Operator of New England which runs the grid begged the region not to close down Vermont Yankee and Brayton Point, but the faith in Environmentalism runs deep. You can store up supplies of coal, but you can’t store natural gas, and wind turbines shut down in cold weather. They only got through last winter by regularly importing 1,400 megawatts from Indian Point, the two nuclear power plants on the Hudson in New York. But New York Governor Andrew Cuomo and most of the state’s Democratic politician are trying to close down Indian Point as well.

In the next two years New England will be closing down 1/10th of its power capacity because — environmentalism. It’s a religious faith, which they falsely assume to be science. Cold kills a lot more people than heat ever does. The last of the four coal-fired plants at Salem Harbor is due to be shut down because it cannot meet the EPA’s new regulations.Brayton Point, the largest remaining coal plant will be closed for the same reason. A constant barrage of protests and legislative attacks has persuaded Mississippi-based Entergy to close the Vermont Yankee Nuclear Station, a reactor that supplies 75 percent of Vermont’s power and  four percent of the region’s power— free of “carbon pollution.”

Canadians are developing huge dams in James Bay and are eager to sell electricity to Americans. That means building transmission lines down from the north, but of course environmentalists are opposed to that too, and trying to block any line in every way they can come up with. We’re in for cold winters as far as we can see, which isn’t far as we cannot predict the future, nor can the computer programs of climate alarmists. As far as predictions go, the Farmer’s Almanac may have a  better record than the IPCC computers. We’ll see.

farmers2013



The Government Does Not Have a Green Thumb. by The Elephant's Child

The United Nations’ food price index has hit an all time high. It is understood widely that food price hikes are a trigger of Egyptian revolt. Egypt is the world’s largest grain importer in most years, importing about half its wheat. Half the population lives on $2 a day or less. The current instability could have a disastrous effect on the country’s ability to feed its population. Egypt depends on tourism and revenue from the Suez Canal for much of its income. Scratch the tourism, and Egypt is in trouble.

World agricultural output has been falling behind population growth for almost two decades, and so has productivity. Countries around the world are hoarding food to protect their citizens, which can only make the crisis worse. Indonesia bought 820,000 tons of rice last week, Algeria bought a million tons of wheat.

Weather has played a part. In Australia, a massive cyclone added to damage from floods. U.S. wheat prices hit a two-and-a-half year high last week because of massive snowstorms in the Midwest. Drought in Russia, hot dry weather in Argentina, weather happens.

The Green Revolution has played a major part in helping to feed the world, but many of the discoveries such as golden rice, genetically modified to contain vitamin A to prevent blindness, and other crops, bio-engineered to resist weed killers have been attacked by environmentalist accusations of “frankenfood” and legal action to prevent growers from planting genetically modified food. Mother Nature has been bio-engineering plants for years, but when it is done by modern technology, it frightens the greenies.

Bio-engineered crops which pose no health problems to humans can be modified to resist cold, drought, insect damage, disease or herbicide damage, vastly increasing crop size and health. Green fantasies, however, are playing a part in world food prices.

Zimbabwe used to be the breadbasket of Africa. Mugabe’s Marxism put and end to that. Ghana and Sierra Leone were asked by Friends of the Earth to reject genetically modified food. Zambia rejected U.S. food aid though the nation faced famine. The European Union has been slow to allow plantings.

America’s fourth biggest crop is alfalfa. Only last week has the Obama Agriculture Department decided to allow the planting of bio-engineered alfalfa. Roundup Ready soybeans and corn, modified to resist the weedkiller Roundup have been on the market for a decade. In 2007, a court found that the USDA hadn’t produced an “environmental impact statement” to consider the economic impact on “organic” alfalfa growers, who represent only about 1% of the market. Foodies’ embrace of “organic” food has meant that people are willingly paying 30% more for produce that differs only in the label that says “organic.”

“Organic” alfalfa (hay to you city folk) is fed to “organic” cows so that consumers can pay extra to buy milk that says “organic” on the label. An expensive and useless label. And “organic” crops require far more land to grow than do bio-engineered crops.

Forty percent of America’s corn crop now goes into our gas tanks. This trend is the deliberate result of policies designed to subsidize ethanol. Yet the fuel provides no environmental gain. Consumers did not buy enough ethanol last year, so the government is raising the cap on how much ethanol has to go into gasoline.

Government regulation is playing a significant role in the world food crisis, and it is not a healthy role. Taxes and mandates and subsidies are mostly destructive. Governments are ill-prepared to decide which crops should be planted and which businesses should be favored.



We Are Manufacturing More Goods, But With Less People. by The Elephant's Child

According to a new Allstate/National Journal Heartland Monitor poll, Americans no longer believe that the American economy is Number One.  In the global race for jobs and prosperity, the U.S. is number 2, and likely to remain there.  Only 20 percent of Americans said that the U.S. economy is the world’s strongest.  Nearly half  (47%) thought China was, instead. And 11 percent picked Japan.  The U.S. gross domestic product remains more than two and a half times bigger than China’s.   On a per capita basis, the advantage is nearly 11-to-1.

With the U.S. economy is the doldrums, and our continued borrowings from China, it is perhaps not surprising.  But according to the survey the public has a lot of anxiety about globalization and global trade, and not a lot of understanding of expanding trade:

Fifty-two percent agreed that “international trade has been bad for the U.S. economy because imports from abroad have reduced demand for American-made goods, cost jobs here at home, and produced potentially unsafe products,”while 43 percent said that trade has “been good for the economy because demand for U.S. products abroad has resulted in economic growth and jobs for Americans here at home and provided more choice for consumers.

The National Association of Manufacturers is the leading manufacturing association, representing manufacturers in every industrial sector in all 50 states.  They list the basic facts about Manufacturing in the United States:

— The United States is the world’s largest manufacturing economy, producing 21 percent of global manufactured products.  Japan is second at 13 percent, and China is third at 12 percent.

— U.S. manufacturing produces $1.6 trillion of value each year, or 11 percent of U.S. gross domestic product (GDP).

— Manufacturing supports an estimated 18.6 million jobs in the U.S. — about one of every six private sector jobs.  Nearly 12 million Americans (or 10 percent of the workforce) are employed directly in manufacturing.

— In  2009, the average U.S. manufacturing worker earned $70,666 annually, including pay and benefits.  The average non-manufacturing worker earned $57,993 annually.

— U.S. manufacturers are the most productive workers in the world — twice as productive as workers in the next 10 leading manufacturing economies.

— U.S. manufacturers perform half of all research and development (R&D) in the nation, driving more innovation than any other sector.

The NAM has some pertinent suggestions for Congress and the administration.  A pro-manufacturing policy must first acknowledge that when Congress raises taxes, it makes manufacturers in the U.S. less competitive.  The U.S. now has the second highest corporate tax rate among major industrial nations, trailing only Japan.  Most countries are lowering their tar rates to encourage economic growth.  The U.S. is unique in taxing a company’s global income.  Capital gains, accelerated depreciation and estate taxes are areas where lower taxes strengthen manufacturing.

• Federal regulations that dictate rigid work rules, wages and benefits and introduce conflict into employer-employee relations make manufacturers less competitive. • A permanent and robust research and development tax credit provides incentives and certainty. • Intellectual property must be defended at all levels to maintain competitive strength.• Counterfeit products result in the loss of hundreds of thousands of jobs annually. • Manufacturers need more graduates in science, technology, engineering and math, as well as increased employer-sponsored visas. • Regulatory rule-making is a problem, especially the efforts of the EPA and the FTC to establish national economic policy through regulation.

It is heartening that most of the people polled feel that solutions lie in increasing American competitiveness, rather than putting up barriers.  Policies that aim to nurture specific industries would invoke immediate charges that the government was “picking winners and losers.” But economists have a job to do in helping the public to understand how the global economy works.  A majority of those polled believe that international trade has been bad for the economy, and that is just plain wrong.




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