Of Climate Change Alarmism, CO2 Taxes (i.e. “Cap and Trade”), and Solutions to High Energy Prices

8 06 2008

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Black Canyon of the Gunnison, Colorado, USA

“Climate Change Collapse” by the Wall Street Journal, June 5, 2008

The Wall Street Journal (http://online.wsj.com/public/us) provided this commentary on the failure of “Climate Change / Cap and Trade” legislation in the U.S. Senate on June 5, 2008. Read the full article here. Following are some key quotes from the article titled “Climate-Change Collapse“. Please note that any underlining or bold text in the following article exerpts are added by myself as blogger-in-chief to highlight certain key points in the quoted sections of the article.


“Backers of the Warner-Lieberman cap-and-trade bill always knew they would face a veto from President Bush, but they wanted to flex their political muscle and build momentum for 2009. That strategy backfired. ….. Those groups spent millions advertising and lobbying to push the cap-and-trade bill through the Senate. But it would appear the political consensus on global warming was as exaggerated as the alleged scientific consensus. ….. Even John McCain, a cap-and-trade original co-sponsor, now says that this scheme won’t fly until China and India sign on – which could be never.”


“Senators also criticized Warner-Lieberman’s failure to clearly specify what would happen with the vast revenues the climate bill would generate – some $1 trillion over the first decade, which environmental groups wanted as a slush fund to finance “green technologies. …… The Natural Resources Defense Council desperately tried to persuade Congress in the 11th hour that the expensive price tag is a bargain because “the cost of inaction” would reach $1.8 trillion by 2100 due to increased hurricanes and rising oceans – an argument without a shred of scientific or fiscal credibility.”

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Conservative political columnist George Will wrote two articles for the Washington Post (http://www.washingtonpost.com/) that are clearly spell out the related issues of “cap and trade” and “energy development”.

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“Carbon’s Power Brokers” by George Will, Washington Post, June 1, 2008

Will’s June 1, 2008 Washington Post article titled “Carbon’s Power Brokers” (read whole article here) identifies the Lieberman-Warner bill’s central feature that was make deliberately ‘less than obvious to the general public’. In so many words, “cap and trade” legislation is essentially a less transparent form of taxation upon business’ energy production and use, and would have accomplished greatly expanded control of the U.S. economy by the newly formed environmental/energy use-control bureaucracy within the U.S. government. Following are some key quotations from the article:


“Speaking of endless troubles, “cap-and-trade” comes cloaked in reassuring rhetoric about the government merely creating a market, but government actually would create a scarcity so that government could sell what it had made scarce. ……. Businesses with unused emission allowances could sell their surpluses to businesses that exceed their allowances. The more expensive and constraining the allowances, the more money government would gain.”


“If carbon emissions are the planetary menace that the political class suddenly says they are, why not a straightforward tax on fossil fuels based on each fuel’s carbon content? This would have none of the enormous administrative costs of the baroque cap-and-trade regime. And a carbon tax would avoid the uncertainties inseparable from cap-and-trade’s government allocation of emission permits sector by sector, industry by industry. So a carbon tax would be a clear and candid incentive to adopt energy-saving and carbon-minimizing technologies. That is the problem.”

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A carbon tax would be too clear and candid for political comfort. It would clearly be what cap-and-trade deviously is, a tax, but one with a known cost. Therefore, taxpayers would demand a commensurate reduction of other taxes. Cap-and-trade — government auctioning permits for businesses to continue to do business — is a huge tax hidden in a bureaucratic labyrinth of opaque permit transactions.”


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Will’s June 5, 2008 Washington Post article titled “The Gas Prices We Deserve” (read whole article here) discusses the ramifications of political choices made by elected representative of the U.S. government in regards to energy resource development. Will discusses U.S. policy decisions to date relating to the development (or lack there of) of existing domestic U.S. energy supply sources and the ramifications upon current and future U.S. energy supplies and prices. Following are some key quotes from the article….

“Seventy-two of today’s senators (…39 Democrats and 33 Republicans)….. have voted to keep ANWR’s estimated 10.4 billion barrels of oil off the market. ….. Also disqualified from complaining are all voters who sent to Washington senators and representatives who have voted to keep ANWR’s oil in the ground and who voted to put 85 percent of America’s offshore territory off-limits to drilling. The U.S. Minerals Management Service says that restricted area contains perhaps 86 billion barrels of oil and 420 trillion cubic feet of natural gas — 10 times as much oil and 20 times as much natural gas as Americans use in a year.”

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“Drilling is underway 60 miles off Florida. The drilling is being done by China, in cooperation with Cuba, which is drilling closer to South Florida than U.S. companies are.”

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“ANWR is larger than the combined areas of five states (Massachusetts, Connecticut, Rhode Island, New Jersey, Delaware), and drilling along its coastal plain would be confined to a space one-sixth the size of Washington’s Dulles airport.”

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“Offshore? Hurricanes Katrina and Rita destroyed or damaged hundreds of drilling rigs without causing a large spill. There has not been a significant spill from an offshore U.S. well since 1969. Of the more than 7 billion barrels of oil pumped offshore in the past 25 years, 0.001 percent — that is one-thousandth of 1 percent — has been spilled. Louisiana has more than 3,200 rigs offshore — and a thriving commercial fishing industry.”

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“In September 2006, two U.S. companies announced that their Jack No. 2 well, in the Gulf 270 miles southwest of New Orleans, had tapped a field with perhaps 15 billion barrels of oil, which would increase America’s proven reserves by 50 percent. Just probing four miles below the Gulf’s floor costs $100 million. Congress’s response to such expenditures is to propose increasing the oil companies’ tax burdens.”


Sterrenberg Castle, Europe (here)

  • Friends, my opinion is that while climate change is real, it is as or more likely due to natural cycles of the Earth’s Sun and other climatic / environmental factors than to Man-Made / Anthropogenic Global Warming.

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  • Also, if “Cap and Trade” legislation were adopted into law, it would have resulted in the most far reaching and intrusive governmental regulatory control of the U.S. economy that has ever occurred. The inefficiencies of governmental control schemes are well known to any free market-oriented economist. Even with the aspect of “market-based trading of carbon credits”, the more essential and critical issue is that low cost, established energy resources would have been deliberately put aside for the sake of adopting high cost, as yet untested energy resources and technologies. Furthermore, with existing fossil fuel sources, the technology is either now available or relatively affordable to use that will allow plentiful supplies of U.S. oil, coal and natural gas to be used in a manner that is environmentally reasonable if not benign.

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  • As an economist, I fail to see why we as a nation insist on disallowing ourselves of making use of domestic sources of energy that would a) lessen our need for military action and involvement in such places as the middle east, b) would lessen our foreign trade deficit, and c) would provide jobs and a higher standard of living for U.S. citizens.

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  • At the core is these issues are the American people ourselves. As long as U.S. citizens fail to objectively perceive the fundamental economic issues involved, they/we/I will be continually missing the mark in regards to charting the best course for the economic future of our children and succeeding generations.

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Ronald Reagan, 40th U.S. President (1911-2004), Pro-growth Conservative Leader

  • I just cant or wont accept the idea that the U.S. should step away from doing things that will secure a healthy, growing U.S. economy both now and in the future. Conservatives need to lead on these issues for the sake of people that cant shape the future for themselves.



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The San Juan Mountains, Southwestern Colorado, USA (here)


Evidence of Positive Effects of Increased CO2 on Earth’s Plant Growth

27 05 2008

An accurate understanding of the natural processes associated with the fertilization of plants by carbon dioxide are critical in forming one’s opinion about the “man-made global warming” hypothesis. Do increasing levels of atmospheric CO2 ultimately have a positive or negative impact on plant growth? As is true in point after point in this debate about global warming and climate change, there is one school of thought that predicts increasing CO2 concentrations as damaging to plant growth, and another sees it as a positive. What you will read below is evidence for the “positive CO2 impact” point of view.

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This is the third post in a series presenting information from an academic paper by Arthur Robinson, et.al. from the Oregon Institute of Science and Medicine (http://www.oism.org/). In this paper Robinson and his co-authors address the “Environmental Effects of Increased Atmospheric Carbon Dioxide ” (click here for a downloadable copy). The Journal of American Physicians and Surgeons (2007) published this article (see the following reference)…..


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Environmental Effects of Increased Atmospheric Carbon Dioxide

Oregon Institute of Science and Medicine, 2251 Dick George Road, Cave Junction, Oregon 97523 [artr@oism.org]. Published in the Journal of American Physicians and Surgeons (2007) 12, 79-90.


Following are some direct quotations from the paper by Robinson, et.al.. Please go to the original paper for supporting figures and references, all of which have not be included in post. Any highlighting, underlined or bold text, or other attempts to emphasize particular parts of the text are of my doing (and not of the original authors).


FERTILIZATION OF PLANTS BY CO2: pp. 8-9 of original article

How high will the CO2 concentration of the atmosphere ultimately rise if mankind continues to increase the use of coal, oil, and natural gas? At ultimate equilibrium with the ocean and other reservoirs there will probably be very little increase. The current rise is a non-equilibrium result of the rate of approach to equilibrium.

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One reservoir that would moderate the increase is especially important. Plant life provides a large sink for CO2. Using current knowledge about the increased growth rates of plants and assuming increased CO2 release as compared to current emissions, it has been estimated that atmospheric CO2 levels may rise to about 600 ppm before leveling off. At that level, CO2 absorption by increased Earth biomass is able to absorb about 10 Gt C per year. At present, this absorption is estimated to be about 3 Gt C per year.

About 30% of this projected rise from 295 to 600 ppm has already taken place, without causing unfavorable climate changes. Moreover, the radiative effects of CO2 are logarithmic, so more than 40% of any climatic influences have already occurred.

As atmospheric CO2 increases, plant growth rates increase. Also, leaves transpire less and lose less water as CO2 increases, so that plants are able to grow under drier conditions. Animal life, which depends upon plant life for food, increases proportionally.

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(Following are examples from a large body of scientific studies showing increased plant growth in the last half century) …… (L)ong-lived 1,000- to 2,000-year-old pine trees have shown a sharp increase in growth during the past half-century. Figure 22 (in the paper) shows the 40% increase in the forests of the United States that has taken place since 1950. Much of this increase is due to the increase in atmospheric CO2 that has already occurred. In addition, it has been reported that Amazonian rain forests are increasing their vegetation by about 900 pounds of carbon per acre per year, or approximately 2 tons of biomass per acre per year. Trees respond to CO2 fertilization more strongly than do most other plants, but all plants respond to some extent.


Wheat growth is accelerated by increased atmospheric CO2, especially under dry conditions. Figure 24 (in the paper) shows the response of wheat grown under wet conditions versus that of wheat stressed by lack of water. The underlying data is from open-field experiments. Wheat was grown in the usual way, but the atmospheric CO2 concentrations of circular sections of the fields were increased by arrays of computer-controlled equipment that released CO2 into the air to hold the levels as specified.

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Figure 23 (paper) summarizes 279 experiments in which plants of various types were raised under CO2-enhanced conditions. Plants under stress from less-than-ideal conditions – a common occurrence in nature – respond more to CO2 fertilization. The selections of species …… were biased toward plants that respond less to CO2 fertilization than does the mixture actually covering the Earth, so (these results) underestimate .. the effects of global CO2 enhancement.

….(T)he green revolution in agriculture has already benefitted from CO2 fertilization, and benefits in the future will be even greater. Animal life is increasing proportionally, as shown by studies of 51 terrestrial and 22 aquatic ecosystems. Moreover, as shown by a study of 94 terrestrial ecosystems on all continents except Antarctica, species richness – biodiversity – is more positively correlated with productivity – the total quantity of plant life per acre – than with anything else.

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(end of quotations)


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To me the most valuable contribution of this section of the paper by Robinson, et.al. is the documentation of the large number of credible scientific studies that provide evidence for increased levels of plant and animal growth on the earth during the last half century – approximately the same time period over which atmospheric CO2 levels have been increasing.

Of particular interest to someone from western Kansas such as myself is evidence that increased levels of CO2 would lead to increased wheat production in the face of dry / drought-prone crop production conditions.


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Economic Wisdom on Energy Policy by Thomas Sowell

12 05 2008

Thomas Sowell writes a valuable column on the topic of how politicians focus on emotional satisfaction of their constituents, while economists focus on the issues of supply and demand. See his Townhall column on the subject here….


The energy issue of today is one of supply and demand as Dr. Sowell states here. Lets hope and pray that judicious economic reasoning and true statesmanship and leadeship wins out over emotional blame casting in our country’s energy policies.


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Examining Crucial Flaws in the Scientific Methodology Used in Global Warming Forecasts

12 05 2008

Today politicians of both U.S. political parties are stating that a “scientific consensus” exists regarding the presence of global warming. However, objective scientific evidence exists regarding critical flaws in the scientific methodology used to develop the model based forecasts used to support global warming.

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Following is an Executive Summary of the National Center for Policy Analysis (http://www.ncpa.org/) report titled “Global Warming: Experts’ Opinions versus Scientific Forecasts” (full report available here) by Kesten Green and J. Scott Armstrong, published February 2008. This report was discussed in a more general manner in a previous post (here). Following the contents of the Executive Summary, some additional comments will be provided about the challenge of developing accurate forecasts from my perspective as an agricultural economist.



Executive Summary:”Global Warming: Experts’ Opinions versus Scientific Forecasts”

National Center for Policy Analysis Report No. 308, by Kesten Green and J. Scott Armstrong

In 2007, the Intergovernmental Panel on Climate Change (IPCC) issued its Fourth Assessment Report. The report included predictions of big increases in average world temperatures by 2100, resulting in an increasingly rapid loss of the world’s glaciers and ice caps, a dramatic global sea level rise that would threaten low-lying coastal areas, the spread of tropical diseases, and severe drought and floods.

These dire predictions are not, however, the result of scientific forecasting; rather, they are the opinions of experts. Expert opinion on climate change has often been wrong. For instance, a search of headlines in the New York Times found the following:

Sept. 18, 1924 MacMillan Reports Signs of New Ice Age

March 27, 1933 America in Longest Warm Spell Since 1776

May 21, 1974 Scientists Ponder Why World’s Climate Is Changing:
A Major Cooling Widely Considered to be Inevitable

Problems with Computer Models. Climate scientists now use computer models, but there is no evidence that modeling improves the accuracy of predictions. For example, according to the models, the Earth should be warmer than actual measurements show it to be. Furthermore:

  • The General Circulation Models (GCMs) that are used failed to predict recent global average temperatures as accurately as fitting a simple curve to the historical data and extending it into the future.
  • The models forecast greater warming at higher altitudes in the tropics, whereas the data show the greatest warming has occurred at lower altitudes and at the poles.
  • Furthermore, individual models have produced widely different forecasts from the same initial conditions, and minor changes in assumptions can produce forecasts of global cooling.

Skepticism Among the Scientists. Thus it is not surprising that international surveys of climate scientists from 27 countries in 1996 and 2003 found growing skepticism over the accuracy of climate models. Of more than 1,060 respondents, only 35 percent agreed with the statement, “Climate models can accurately predict future climates,” whereas 47 percent disagreed.

Violations of Forecasting Principles. Forty internationally-known experts on forecasting methods and 123 expert reviewers codified evidence from research on forecasting into 140 principles. The empirically-validated principles are available in the Principles of Forecasting handbook and at forecastingprinciples.com. These principles were designed to be applicable to making forecasts about diverse physical, social and economic phenomena, from weather to consumer sales, from the spread of nonnative species to investment strategy, and from decisions in war to egg-hatching rates. They were applied to predicting the 2004 U.S. presidential election outcome and provided the most accurate forecast of the two-party vote split of any published forecast, and did so well ahead of election day (see polyvote.com).

The authors of this study used these forecasting principles to audit the IPCC report. They found that:

  • Out of the 140 forecasting principles, 127 principles are relevant to the procedures used to arrive at the climate projections in the IPCC report.
  • Of these 127, the methods described in the report violated 60 principles.
  • An additional 12 forecasting principles appear to be violated, and there is insufficient information in the report to assess the use of 38.
    As a result of these violations of forecasting principles, the forecasts in the IPCC report are invalid. Specifically:

The Data Are Unreliable. Temperature data is highly variable over time and space. Local proxy data of uncertain accuracy (such as ice cores and tree rings) must be used to infer past global temperatures. Even over the period during which thermometer data have been available, readings are not evenly spread across the globe and are often subject to local warming from increasing urbanization. As a consequence, the trend over time can be rising, falling or stable depending on the data sample chosen.

The Forecasting Models Are Unreliable.Complex forecasting methods are only accurate when there is little uncertainty about the data and the situation (in this case: how the climate system works), and causal variables can be forecast accurately. These conditions do not apply to climate forecasting. For example, a simple model that projected the effects of Pacific Ocean currents (El Niño-Southern Oscillation) by extrapolating past data into the future made more accurate three-month forecasts than 11 complex models. Every model performed poorly when forecasting further ahead.

The Forecasters Themselves Are Unreliable. Political considerations influence all stages of the IPCC process. For example, chapter by chapter drafts of the Fourth Assessment Report “Summary for Policymakers” were released months in advance of the full report, and the final version of the report was expressly written to reflect the language negotiated by political appointees to the IPCC. The conclusion of the audit is that there is no scientific forecast supporting the widespread belief in dangerous human-caused “global warming.” In fact, it has yet to be demonstrated that long-term forecasting of climate is possible.

(end of Executive Summary)

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(K-2 in the Himalayas)


Following are my own opinions regarding the reliability of “model based forecasts”…..

Over the last decade or more much debate has occurred within the discipline of agricultural economics regarding the reliability of forecasts derived from econometric models. It is my understanding that at the present time within the discipline of economics (general economics as well as the agricultural branch of the discipline) model-based forecasts of the future are judged to be inherently problematic and prone to inaccuracy.

The difficulty that economists have in developing accurate forecasts is due at least in part to the challenges we have on the one hand in accurately modeling underlying economic processes. In addition, economists have found it difficult to accurately project future values of the key explanatory variables in these same models from which we hope to make exante conditional projections of future values the models’ dependent variables. In normal human speech, what I have just said is that it is important for economists to be extremely humble and cautious about the accuracy of forecasts of the future based on our economic modeling efforts. It is an extremely difficult task to first model economic reality, and then second, to attempt to make forecasts of the future based on your current understanding of underlying economic processes (represented by these same models). The processes themselves may change over time to go along with the fact that we often have inadequate understanding of the critical economic factors involved in such economic processes.

As an agricultural economist with at least a working knowledge of the inherent difficulties of using models to forecast such things as future grain prices, and realizing the need to identify if at all possible the confidence intervals within which any economic forecast may fall, it is extremely troubling to me to consider the “fast and loose” manner in which model-based forecasts of global warming impacts have been developed by climatologists. Problems exist with a) the climatological data being relied upon, b) with the climate models themselves that are being used in an attempt to accurately and comprehensively represent extremely complicated weather – environmental systems, and c) the evident bias in findings of such groups as the Intergovernmental Panel on Climate Change (IPCC) in selecting models that support their presuppositions about global warming without the required scientific rigor and discipline needed for such an economically and socially critical subject.

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There is much to ponder in regards to the “group think” being thrust upon the public in regards to Global Warming ideas and beliefs.

The Longer Term Risks to Universities of Ill-founded Climatological Forecasting Efforts

Academics should consider the risk of damage to their professional credibility that could occur if their climatological model forecasts of global warming impacts are proven wrong by the climate itself in 5, 10, 15 years. We in the university system appear to be entrusting ourselves to the findings of some very questionable climate change forecast model methodologies.

Will the public still be willing to support us as Universities if, after instituting costly “cap and trade” schemes and other “green” economic and environmental prescriptions motivated by our global warming supportive forecasts, the possibility of disruptive catastrophic energy supply shortfalls come to fruition and associated economic and social crises ensue? Given that the economic well-being of the U.S. economy and our very families are at stake, we as academics should be more prudent and judicious in adherence to our scientific principles in this matter of deriving forecasts supportive of global warming impacts. And, given that the scientific principles of forecasting appear to have not been adequately adhered to in the development of global warming-related climatological models, well, we have now placed ourselves in a very, very risky position indeed.

God help us to be wise and judicious and balanced in our scientific recommendations on the issues of climate change, global warming, and energy development.


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The Unscientific Basis of Global Warming Forecast Models

11 05 2008

The National Center Policy Analysis (http://www.ncpa.org/) has made public a scientific study explaining how the long term climate forecast models cited by the Intergovernmental Panel on Climate Change (IPCC) in its Fourth Assessment Report (here) grievously violated accepted scientific principles of forecasting. The study sponsored by the NCPA critically critiques the forecasting methodology relied upon in the IPCC report. It is entitled “Global Warming: Expert’s Opinions versus Scientific Forecasts.“. A copy of the NCPA study can be found here.

A Caribou in foreground, with Mount McKinley

That the forecasting methodology relied upon by the IPCC in its Fourth Assessment report is in error and invalidates their global warming forecasts is of critical importance. As cited on the IPCC website (http://www.ipcc.ch/), the IPCC and former Vice President Al Gore were awarded the Nobel Peace Prize in 2007 “for their efforts to build up and disseminate greater knowledge about man-made climate change, and to lay the foundations for the measures that are needed to counteract such change”. The ongoing work of IPCC is literally a cornerstone of the body of evidence claimed by global warming advocates to justify that a “scientific consensus” exists supporting their global warming viewpoints and initiatives. That the presumptions of the scientific models used by global warming advocates to forecast negative longterm environmental impacts from CO2 emissions are suspect is of critical importance to the credibility of pro-environmental change viewpoints in the public global warming debate.

In so many words, the NPCA study finds that the data, the models, and the unbiased nature of the scientists involved in developing the IPCC Fourth Assessment report are all suspect or “unreliable”.

In future posts I will discuss this report and why adherence to scientifically reliable and defendable forecasting principles is crucial to the development of credible forecasts in general, and the reliability of currently available climatological forecasts of global warming impacts in particular.


In addition, following are three articles presenting evidence against the popular consensus of global warming among the majority of those in the scientific community and a large part of the popular press.

The first article is from The American Thinker (http://www.americanthinker.com/), an online conservative information source. On May 5, 2008, author Marc Shephard presents an article titled “Are Global Warming Alarmists Pulling a Cool Fast One?” (here).

In The Telegraph (http://www.telegraph.co.uk/) author Christopher Booker has written two recent articles questioning global warming. The first is titled “Watch the web for climate change truths.” (here), and the second is “Stop the CO2 scare, before it’s too late” (here).

Picture of Mount McKinley (i.e., “Denali”), Alaska, USA

Another Mount McKinley picture (just for good measure)



Grain-Ethanol Development Viewpoints from Western Kansas

27 04 2008

Following are the contents of an email I sent to Mark Steyn, Conservative Political Columnist for the National Review. This email has to do with the impetus behind the development of bioenergy / grain based ethanol in the U.S.. A critical view of an over zealous, unbalanced, environmental activist centric policy in the U.S. is presented in this email.

So, “what does this have to do with a Christian World View?” you probably are asking. Well, Christians are called to be stewards of this world, and to responsibly provide for their families as well as to take part in wise, measured leadership in determining the direction of their country.

My perspective is that “stewardship” involves responsible use of resources. We are called to use the resources of a fallen sinful world in a wise manner for God’s glory. I dont think God calls us to worship this physical world – rather we are to responsibly use the resources God has provided for us to carry on the activities of our lives. Our Christian focus is better placed on how best to live this life than on extremist environmental policies that would severely damage our economy and ways of life.

We are called to be environmental stewards for the sake of this and succeeding generations. We are not called to have as our goal the preservation of the environment with an extreme, zero tolerance perspective toward human activities. Pro environmental policies can be carried out in a balanced manner, avoiding extremist anti-resource use practices. Oil, coal, hydo-electric power, nuclear power, and even bioenergy can be responsibly used in the portfolio of energy sources people and societies need to support economies and do the maximum possible good for mankind. The only way to meet the extreme environmental goals of some of my well intentioned fellow citizens is to seriously curtail the economic activity of the U.S. and other world economies. Then how much good would we as Christians be doing for others if we forfeit the opportunity to responsibly use God-given resources for the betterment of the needy of this world?

So, I hope this can be the start of a dialogue with other people who seek to bring their personal values and beliefs into the public square, and who are concerned about coming up with balanced, responsible directions for the social and economic future of this country and the world overall.



Mr. Steyn,

I certainly enjoy reading your writings, and would like to offer some comments on grain based ethanol for you to consider.

In my work I spend considerable time in grain marketing-related Extension outreach and applied research activities associated with grain-based ethanol. Our (i.e. the U.S. public) association with and investment in grain based ethanol is a bi-product of our country’s environmental / energy policies. IF U.S. environmental policies had not a) inhibited energy / oil exploration and development in the vast majority of the U.S.
continental shelf (except for parts of the Gulf of Mexico), b) stopped or greatly slowed energy exploration in and near Alaska (ANWAR, North Slope, other areas both on and off land), and c) mandated the use of
pollution diminishing fuel oxygenates on at least a seasonal basis in a number of our major cities, THEN the U.S. would likely now have access to greater domestic supplies of petroleum, and would not have needed to
develop grain-based U.S. ethanol production in the first place. The third point regarding fuel oxygenates is of greater importance than we realize, as MTBE was a product originally being promoted by oil companies as a competitive substitute for grain-based ethanol.

However, in the energy bill of 2005 (I believe that is right), the U.S. government did not extend liability coverage to MTBE for suspected pollution of groundwater supplies in many areas of the U.S. Consequently, when the oil companies found that their fuel oxygenate product (MTBE) was not going to be legally protected by U.S. energy policy, then rather than open themselves up to lawsuits upon lawsuits from environmental groups, they switched to the use of grain-based ethanol “en mass”, driving the dramatic profits and expansion of grain based ethanol in the U.S. beginning in October 2006.

There was a time when many of the critics of grain based ethanol were heralding it as a valued part of the solution to energy problems in the U.S. Now, these same environmental / green advocacy oriented concerns
are lining up to roundly criticize grain based ethanol production. So, just as politicians who were once for the Iraq war have now switched their positions to denounce it, we not have the same “turning of face and consensus” against bioenergy.

There is one factor that is under appreciated in regards to the impact of grain-based ethanol supplies upon the current gasoline market. Given the inflexible demand of U.S. consumers for fuel, the provision
of an extra 5%+ of domestically produced fuel has had a suppressing impact upon gasoline prices in the U.S. Restated, given a near vertical demand curve for automobile fuel in the U.S., the availability of an extra 5%+ of fuel supplies has a more than nominal impact upon fuel prices, helping to keep them lower than otherwise would have been the case.

So, I respectfully disagree with you in regards to complete condemnation of the grain-based ethanol industry in the U.S. These people (energy companies, farmer investors, state and local government policy-makers) were being good economic agents – they were following the economic incentives placed before them by a supply-inhibited oil market (due to environmentally motivated / obsessed constrictions on supply development), by clean air policy in major U.S. cities which motivated the use of oxygenated fuels, and by the risk of lawsuits faced by oil companies should they have continued to use the primary oxygenate fuel substitute for grain based ethanol, i.e., MTBE.

Thanks for your work in the conservative cause. On this issue I respectively disagree with you and would encourage you to search further into the issues motivating the development of grain-based ethanol. Finding an unbiased opinion on the matter is hard to do.

Now what to do about it – that is the question.

If I were the 60th vote in the senate for a day, I would essentially declare a moratorium of support for further ethanol development beyond the current 13-14 million gallons of productive capacity per year. Also, I would cast a wary eye upon the likelihood of economically effective cellulosic ethanol supplies – the economics are simply not supportive, and infact are markedly worse from an economic viability point of view than for grain based ethanol. Instead I would focus upon the building of consensus across a broad range of political constituencies and groups to allow further environmentally neutral development of U.S. and allied country oil supplies, with an accompanying / companion strategic initiative and focus upon increased energy
efficiency. The transition to greater energy/fuel efficiency and environmentally friendly development of available fossil fuel supplies has to be deliberate, paced and environmentally and economically reasonable. But the alternative path we are currently on is to wreck the U.S and Canadian economies with knee-jerk, ill planned, environmentally-biased, energy constraining policies.

Take care,

An Aggie in Northwest Kansas