The Week That Was: September 17, 2016 – Brought to You by www.SEPP.org
By Ken Haapala, President, Science and Environmental Policy Project
Vale Roger Cohen PhD RIP: We have lost a friend. Among his many accomplishments, Roger Cohen was a leader of the Exxon research team who knew that the guesses made by climate modelers were exactly that – guesses. They were not scientific predictions or knowledge. Apparently, many politicians, including attorneys general, cannot comprehend the difference among scientific guesses, predictions, and knowledge. See link under Challenging the Orthodoxy.
Quote of the Week. “Religion is a culture of faith; science is a culture of doubt.” ― Richard Feynman
Number of the Week: Number of the Week: 2.3 per square mile; 1.1 per square kilometer
Treaty or Trivia: Last week’s TWTW reported that President Obama signed the Paris Agreement to limit carbon dioxide (CO2) emissions. Brian Deese, a senior White House adviser, stated that it need not go to the US Senate for ratification by two-thirds of the Senate. Rather, it is an Executive Agreement. Deese claimed: “With respect to the legal form of the agreement, the United States has a long and well-established process for approving executive agreements, that is, a legal form which is distinct from treaties, which are approved through the advice and consent process in the Senate.” Based on its research, TWTW was under the impression that executive agreements require approval of both houses of Congress by a simple majority.
As treated by the administration, the March 2015 nuclear deal with Iran is an example of an executive agreement. But, TWTW was unable to find any record that the deal has been submitted to Congress for approval, even though the administration is acting as if it had been approved, including delivering over $1 Billion to Iran. There is no logical reason that Mr. Obama will behave differently regarding the Paris Agreement, which he has boasted is the most ambitious climate agreement in history. This agreement will punish all Americans who rely on fossil fuels for electricity, transportation, etc. as well as American businesses that rely on fossil fuels.
In short, this administration believes it has the power to make binding treaties when it wishes and ignore Congress and the Constitution as trivia. See links under After Paris!
ENSO: The El Niño Southern Oscillation (ENSO) continues to baffle those climate experts who make predictions. The US National Oceanic and Atmospheric Administration (NOAA) has called off its watch for an impending La Niña, the cooling part of ENSO which has frequently followed an El Niño. Yet, the Japan Meteorological Agency is stating a La Niña has arrived. Complicating issues, there are reports that the Blob has reappeared. The Blob is a warm area in the Pacific off the coast of Canada, north of the US Pacific Northwest. What these events will do to global temperatures is unknown. The UN Intergovernmental Panel for Climate Change (IPCC) is of no value, because it dismissed a succession of El Niños as warming influence, claiming they are too short in duration. See links under Changing Weather.
Standing Rock: The Standing Rock Indian Reservation was established by the US Government in 1864 by treaty with the Sioux. Originally about 6,250 square miles (16,000 square kilometers), the size was unilaterally reduced by the US government to 3,570 sq. mi. (9,250 square km), following wars with the Plains Indians in 1870s & 1880s. According to the 2000 census, the population is about 8,250. The reservation is largely in South Dakota, but extends into North Dakota. The Missouri River forms the eastern boundary of the reservation.
In 1948, the Oahe Dam was started by the Corps of Engineers, to prevent down-river flooding and provide electric power, irrigation, and other benefits. The dam was dedicated in 1962 and it created Lake Oahe, a reservoir running about 230 miles up the Missouri River, through the reservation, to Bismarck, North Dakota. The reservation lost about 87 sq. mi. to the lake.
The reservation has become a flash point in the efforts by the green groups to stop oil and gas development in the US.
A pipeline company, Energy Transfer Partners, thought it had the necessary permits to build an oil pipeline about 1,172-mile-long, costing $4 billion. The new pipeline would run from the Bakken and Three Forks production areas in northwest North Dakota to Patoka, Illinois. According to a federal court decision, 99% of the pipeline will be on private land. Once completed, the pipeline would transport approximately 470,000 barrels of light sweet crude oil per day, and has a daily capacity of up to 570,000 barrels. The Bakken has been underserved with pipelines, especially since the administration arbitrarily refused permits for the Keystone pipeline from Canada to the Gulf Coast in Texas.
The pipeline would cross the Missouri River/Lake Oahe paralleling the existing Northern Border natural gas pipeline. The Sioux objected, claiming that the new pipeline would endanger their drinking water and violate the reservation. At its nearest point, the new pipeline would be about one-half mile up-river/lake from the reservation.
Immediately, after the Sioux lost in Federal court, the administration arbitrarily stopped the construction invoking the National Environmental Policy Act (NEPA). This is the act used to stop a Corps of Engineers project in the early 1970s, which would have helped protect New Orleans from flooding from hurricanes, as happened with Katerina in 2005.
Apparently, the administration believes it can correct Washington’s shabby treatment against the Sioux by equal treatment against oil and gas providers. Fittingly, the presidential candidate for the Green Party, Jill Stein, has issued statements strongly supporting the Sioux in this action during this so-called climate emergency? See Article # 1 and links under Washington’s Control of Energy and Environmental Industry.
Vice President Biden: Power engineer Donn Dears writes that Vice President Biden has been in Europe warning against the proposed Nord Stream-2 pipeline, which would bring additional natural gas from Russia to Europe. According to Dears, Europe gets one-third of its natural gas from Russia, and some Eastern European countries are wholly dependent on Russia.
Instead, VP Biden states that Europe should depend on natural gas from the US, which depends on hydraulic fracturing, fracking. Apparently, the Vice President is unaware of the National Platform of the Democratic Party which calls for the abolition of fracking and the actions of the administration to stop oil and gas pipelines. Perhaps, Europeans should ask Canadian and US pipeline officials: Who do you trust more in oil and gas ventures: Moscow or Washington? See link under The Administration’s Plan
Arbitrary Power: The Paris Agreement and the oil pipeline actions are the latest in the administration’s arbitrary use of executive power, which may or may not be Constitutional. As his term of office is ending, we can expect far more in executive actions, all in the trumped-up title of protecting the environment. These will include national monuments of no particular significance, endangered species, and imposition of NEPA. For some of the new regulations this week, see links under EPA and other Regulators on the March.
U.S. Competitiveness: Since 2011, some professors at Harvard Business School have been conducting annual surveys, including alumni, on US competitiveness with other nations. Although, it was discussed by the Investor’s Business Daily (IBD), the report was not complimentary to either political party. The report recognized that the economy was stagnating, and neither party appears to have a program that will relieve the nation from the Great Recession. Clearly, the so-called “Stimulus Bill” did not work, for reasons some economists articulated at that time.
Among the recommendations by these professors are: simplify the corporate tax code and lower the statutory rate; ease immigration of highly skilled individuals; simplify and streamline regulation; create a sustainable federal budget, including reform of entitlements; and responsibly develop America’s unconventional energy advantage. Additional recommendations can be: 1) to limit arbitrary enforcement of regulations to and 2) limit legal extortion of funds from businesses under threat of litigation. See links under The Political Games Continue
Social Cost of Carbon (Dioxide): Ever since UK politician Nicholas Stern came up with a highly biased calculation of what he called the social cost of carbon (SCC), many politicians have been trying to create such regulations in order to expand government revenues. Most calculations, including those by US Government entities in the Interagency Working Group on Social Cost of Greenhouse Gases largely ignore the thousands of studies and satellite photos showing the benefits of carbon dioxide to agriculture and the environment. These entities include the council of Economic Advisors, Departments of Agriculture, Energy, Treasury, as well as the EPA, offices of Management and Budget, and Science and Technology Policy.
A noted exception has been the work of Richard Tol, of the UK, who resigned as part of the IPCC team.
Ross McKitrick, who helped expose the logical errors in the model that lead to Mr. Mann’s hockey-stick, has developed a guide on how to estimate the social cost of carbon. His key points are:
“First, carbon pricing is meant to be used instead of, not on top of, traditional command-and-control regulation. Second, the carbon price needs to be deflated by the Marginal Cost of Public Funds, which varies quite a bit across provinces. Third, the presence of market uncertainty means that a carbon tax is a less costly option than cap and trade. Fourth, Integrated Assessment Models give a wide range of estimates of the social cost of carbon, but empirical evidence favors numbers on the low end.”
This is as a realistic an approach as TWTW has seen. However, given the enormous benefits of increased CO2, the lack of concrete evidence that CO2 is causing significant global warming/climate change, and the current enthusiasm exhibited in Washington for punishing those who use fossil fuels – it is doubtful whether any objective, realistic effort can be accomplished, even if concrete evidence of harm is established. See links under Social Costs of Carbon and Below the Bottom Line.
A New Mascot Needed? The World Wildlife Fund, and others, have used polar bears and the threat of melting Arctic ice as props for fund raising. Writing in her blog, Polar Bear Science, Susan Crockford has repeatedly shown that bears feed heavily in the spring, when the ice is thick, and little in the summer. During their heavy feeding season, they do not need ice for hunting their major prey, seals. She suggests seals feed more heavily when the summer when the Arctic has less ice. Among other things, fish is more plentiful and there is less need for seals to search for breathing holes. This heavy summer feeding of seals, allows for young, fat seals in the spring, food for the bears. See links under Challenging the Orthodoxy.
Climate Editor Needed: Last week’s TWTW carried a link to the advertisement in the New York Times for a new editor for its section covering climate change. Statistician Matt Briggs has answered the ad. He would be more demanding and balanced than the editors of Science, who refuse to publish articles questioning CO2 as the primary cause of global warm/climate change. In another post, Briggs, points out the mistakes made by those who believe that proxies can calculate global temperatures to one-tenth of a degree C. See links under Challenging the Orthodoxy and Below the Bottom line.
Additions and Corrections: Reader Paul Kenyon asks about a statement in TWTW on a coral reef in the Florida Keys that is significantly above current sea level, which gives evidence that sea levels were once far higher than today (possibly 110,000 to 120,000 years ago). He writes: “It’s my understanding that land also rises and might that have pushed the coral upwards? I spent three years in the Dominican Republic. What appear to be coral cliffs are found inland around the island. Has the island of Hispaniola risen in the past?”
The question encompasses two different time frames and two different geological plates. Southern Florida (and the Keys) were largely covered by seas about 110,000 to 120,000 years ago. During the last ice age, after Florida was covered, the decrease in sea levels resulted in land extending far into what is now the Gulf of Mexico. The geology of Hispaniola formed over millions of years. Also, Hispaniola is part of the Caribbean plate, not the North American plate. The Caribbean plate is more active. Florida is on the tail end of the North American plate, relatively stable (as compared to the Rockies or California).
It is interesting to note the contributions by scientists from petroleum companies to the science of geology, as seen in the linked article under Changing Earth.
Number of the Week: 2.3 per square mile; 1.1 per square kilometer. That is the population density of the Standing Rock Indian Reservation, based on the 2000 census of a population of 8,250. By contrast, Alaska has a population of 738,500 (2015 est.), with a density 1.3/mi (0.5/km). Many in Alaska desire to see the expansion in oil and gas development, which Washington is denying.
1. Chief Obama and the Dakota Pipeline
A case study in why the U.S. doesn’t build more infrastructure.
Editorial, WSJ, Sep 13, 2016
“Democrats are running for office claiming that the U.S. needs to spend hundreds of billions on infrastructure. If you want to know why they’re not serious, look no further than the Obama Administration’s order halting construction on a sliver of an oil pipeline in North Dakota even after the U.S. won in court.
“On Friday federal Judge James Boasberg allowed construction to proceed on the 1,100 Dakota Access pipeline, which aims to deliver a half million barrels of crude a day from the Bakken shale to Pakota, Illinois, for delivery to East Coast and Gulf refineries. Shipping oil via pipeline is less expensive and safer than by rail with fewer carbon emissions.
“The Dakota Access would be a boon for the northern Plains, which has suffered more from the rout in oil prices than other regions with better access to markets. The pipeline would make Bakken crude more economical by reducing the shipping cost and supply glut at the source. It was on course to be finished by the end of this year.
“But green groups have locked arms with some Native American tribes to block pipeline work around Lake Oahe—a water source for the Standing Rock Sioux—that was permitted this summer by the U.S. Army Corps of Engineers. Nearly half of the clearing and grading for the pipeline is complete including 90% in North Dakota. As Judge Boasberg noted, the pipeline “needs almost no federal permitting of any kind because 99% of its route traverses private land.”
“Under the National Historic Preservation Act, federal agencies must follow certain procedures prior to permitting projects that could affect places of cultural or religious significance to Indian tribes. But the law applies only to activities that are subject to federal jurisdiction, not those undertaken on private land.
“The company Dakota Access went above and beyond the law’s requirements to mitigate its environmental impact. This meant devising the route to avoid sites on the National Register of Historic Places as well as those identified as potentially eligible for listing. Archaeologists conducted cultural surveys including visual reconnaissance and “shove-test probes” to examine historic sites. The pipeline was modified 140 times in North Dakota alone to avoid potential cultural resources. Around Lake Oahe, the pipeline will run adjacent to the Northern Border Gas Pipeline that was completed in 1982, which reduces the likelihood that construction would harm intact tribal features.
“The Army Corps of Engineers bent over backward to consult the Standing Rock Sioux, only to be ignored or rejected. The tribe ignored agency letters requesting comment and belatedly cancelled meetings. “When the Corps timely arrived for the meeting,” the judge noted, “Tribal Chairman David Archambault told them that the conclave had started earlier than planned and had already ended.”
“After the Corps issued an environmental assessment of “no significant impact” in July, the Standing Rock sued the Corps for violating the National Historic Preservation Act’s consultation requirements and sought to force a halt to construction around Lake Oahe.
“The judge has now ruled that the Corps met its legal obligations and the tribe was unlikely to succeed on the merits of its suit. Yet soon after the ruling was made public on Friday, the Justice, Army and Interior Departments enjoined pipeline construction on land “bordering or under Lake Oahe until [the Corps] can determine whether it will need to reconsider any of its previous decisions” and “whether there should be nationwide reform with respect to considering tribes’ views on these types of infrastructure projects.”
“So the Administration is overruling a court decision that vindicates its own decision-making. This has all the earmarks of the kind of power play that President Obama used to kill the Keystone XL pipeline. The only “infrastructure” Democrats seem to want is when government pays for it and which doesn’t violate their tribal antipathy to fossil fuels.”
2. Exxon’s Accounting Practices Are Investigated
New York attorney general’s probe focuses on why Exxon is only oil firm not to write down value of assets amid price rout
By Bradley Olson, WSJ, Sep 16, 2016
SUMMARY: The reporter states:
“New York Attorney General Eric Schneiderman is investigating why Exxon Mobil Corp. hasn’t written down the value of its assets, two years into a pronounced crash in oil prices.
“Mr. Schneiderman’s office, which has been probing Exxon’s past knowledge of the impact of climate change and how it could affect its future business, is also examining the company’s accounting practices, according to people familiar with the matter.
“An Exxon spokesman declined to comment about the investigation by the Democratic attorney general but said Exxon follows all rules and regulations.
“Since 2014, oil producers world-wide have been forced to recognize that wells they plan to drill in the future are worth $200 billion less than they once thought, according to consultancy Rystad Energy. Because the fall in prices means billions of barrels cannot be economically tapped, such revisions have become a staple of oil-patch earnings, helping to push losses to record levels in recent years.
“The process for booking oil and gas reserves, and recognizing when they fall, is separate from accounting for how the value of those reserves changes over time on a company balance sheet.
“John Herrlin, an analyst at Société Générale, came to a different conclusion in an investor note last month, writing that about three fourths of Exxon’s reserves are from areas with producing wells, a factor that makes impairments less likely than in undeveloped areas.”
“Exxon Chief Executive Rex Tillerson told trade publication Energy Intelligence last year that the company has been able to avoid write-downs because it places a high burden on executives to ensure that projects can work at lower prices, and holds them accountable.
“’We don’t do write-downs,’ Mr. Tillerson told the publication. ‘We are not going to bail you out by writing it down. That is the message to our organization.’”
“Out of the 40 biggest publicly traded oil companies in the world, Exxon is the only one that hasn’t booked any impairments in the last 10 years, according to S&P Global Market Intelligence.”
3. Notable & Quotable: Infrastructure Isn’t Always Stimulating
‘No one can look at the Japanese numbers and conclude that the money has ramped up the growth rate.
WSJ, Sep 13, 2016
Edward L. Glaeser in “If You Build It . . .” from the summer issue of the Manhattan Institute’s City Journal:
Building infrastructure is no surefire way to stimulate economic growth, as Japan’s example shows. . . . Per-capita GDP, in constant U.S. dollars, was no higher in 2009 than in 1991, according to OECD data. The Japanese economy picked up slightly this year, but it’s fair to say that Japan has lost a quarter-century of growth.
To help fight this economic sluggishness, Japan has invested enormously in infrastructure, building scores of bridges, tunnels, highways, and trains, as well as new airports—some barely used. The New York Times reported that, between 1991 and late 2008, the country spent $6.3 trillion on “construction-related public investment”—a staggering sum. This vast outlay has undoubtedly produced engineering marvels: in 1998, for instance, Japan completed the Akashi Kaikyō Bridge, the longest suspension bridge in the world; just this year, the country began providing bullet-train service between Tokyo and the northern island of Hokkaido. The World Competitiveness Report ranks Japan’s infrastructure as seventh-best in the world and its train infrastructure as the best. But while these trillions in spending may have kept some people working, no one can look at the Japanese numbers and conclude that the money has ramped up the growth rate. Moreover, the largesse is part of the reason that the nation now labors under a crushing public debt, worth 230 percent of GDP. Japan is less, not more, dynamic after its infrastructure bonanza.