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Why Democrats Make Energy Expensive (And Dirty)

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Progressives say they care more about working people and climate change than Republicans and moderate Democrats. Why, then, do they advocate policies that make energy expensive and dirty?

Progressive Democrats including Sen. Bernie Sanders and Rep. Pramila Jayapal, the head of the House progressive caucus, have sent a letter demanding the Federal Energy Regulatory Commission (FERC) investigate whether “market manipulation” is causing natural gas prices to rise 30 percent on average for consumers over last winter, an astonishing $746 per household.

But the main reason natural gas prices are rising is because progressives have been so successful in restricting natural gas production. Sanders, Jayapal, and Rep. Alexandria Ocasio-Cortez (AOC), as individuals and as part of the Congressional Progressive Caucus, have successful fought to restrict natural gas production through fracking and to block natural gas pipelines, including the Atlantic Coast pipeline.

In 2020, Sanders celebrated efforts by progressives to cancel the Atlantic Coast pipeline. Today, New England is facing rolling blackouts and importing natural gas from Russia. “Getting [natural] gas to [progressive Senators Ed] Markey and [Elizabeth] Warren’s Massachusetts is so difficult,” reports The Wall Street Journal, “that sometimes it comes into Boston Harbor on a tanker from Russia.”

Democrats aren’t the only reason the United States isn’t producing enough natural gas to keep prices at the same low levels they’ve been at for the past decade. There is higher demand as the economy emerges from covid. There is greater demand for natural gas internationally due to a bad year for wind energy in Europe. And President Joe Biden, for his part, has resisted many progressive demands to restrict oil and gas production.

But the main reason there isn’t enough natural gas production is because of successful progressive Democratic efforts to restrict natural gas production in the United States, Europe, and other parts of the world in the name of fighting climate change, as I was one of the first to report last fall. Sanders and Jayapal talk about “market manipulation” and “profiteering” but to the extent there is any of either it’s because of inadequate supplies of natural gas and the pipelines to transport it.

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Successful shareholder activism, known in the industry as “ESG” for environmental, social, and governance issues, resulted in less investment in oil and gas production, and more weather-dependent renewables, which result in higher prices everywhere they are deployed at scale. Even ESG champions including Financial Times, Goldman Sachs, and Bloomberg all now acknowledge that it was climate activist shareholder efforts that restricted oil and gas investment.

Such efforts also directly led to increasing carbon emissions. Last year saw a whopping 17 percent increase in coal-fired electricity, which resulted in a six percent increase in greenhouse gas emissions. It was the first annual increase in coal use since 2014. The reason for it was because of the scarcity and higher price of natural gas, coal’s direct replacement, not just in the U.S. but globally, since the US exports a significant quantity of natural gas.

The other reason the U.S. used more coal in 2021 is because progressive Democrats are shutting down nuclear plants. “When a nuclear plant is closed, it’s closed forever,” noted Mark Nelson of Radiant Energy Fund, an energy analytics firm, “whereas coal plants can afford to operate at relatively low levels of capacity, like just 30 to 50 percent operation, and thus wait for natural gas prices, and thus demand for coal, to rise.”

Progressives like Sanders, Jayapal, and AOC claim to care more about poor people, working people, and climate change than either Republicans or moderate Democrats, who they defeat in Democratic primary elections. Why, then, do they advocate policies that make energy expensive and dirty?

Twitter avatar for @AOCAlexandria Ocasio-Cortez @AOC

Fracking is bad, actually

October 8th 2020

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Strategic Ignorance

A big part of the reason progressives make energy expensive appears to be that they just don’t know very much about energy. The fact that they are demanding that FERC investigate higher prices suggests they want to keep energy prices low. But it could also mean that their letter is just public relations cover so they are not blamed for raising energy prices.

Indeed, it would be naive to think that Sanders and other progressives didn’t realize that blocking pipelines, opposing fracking, and subsidizing renewables would make energy expensive, given that making energy expensive has been the highest goal of their main climate advisor, Bill McKibben, who subscribes to the Malthusian view that there are too many humans and we must restrict energy and development.

If renewables were cheaper than the status quo then the policies they advocate — no permitting of pipelines, restrictions on fracking, and subsidies for renewables — would not be necessary. Besides, mainstream energy experts and journalists today admit that weather-dependent renewables make electricity expensive

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Economy

Luxury goods tax on super-rich could hit electric vehicles: expert

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By Marie Woolf in Ottawa

A new tax on yachts, luxury cars and private aircraft designed to hit the super-rich could also cover vehicles meant to help the environment, a tax expert warns.

The luxury goods tax, which will come into force on Sept. 1, will cover cars and SUVs, as well as private planes and helicopters, worth more than $100,000.

The federal tax will also cover yachts and boats — including motorboats — worth more than $250,000.

But senior tax lawyer Héléna Gagné says the new tax could also hit some electric and hybrid vehicles, including Tesla and BMW models, which cost more than $100,000.

The federal government has been encouraging Canadians to invest in clean technology and zero-emission vehicles, which can carry a higher price tag than cars that run on fossil fuels.

Gagné said the thresholds for the tax could also affect people who would not be regarded as wealthy, but have saved up to buy a private plane for a hobby.

“It seems to be assumed that it is only the wealthiest who will be impacted by the luxury tax but it is not necessarily the case,” said Gagné, a partner at Osler, Hoskin & Harcourt LLP. “It can also impact indirectly taxpayers who may not consider themselves as being among the wealthiest but who may decide to purchase an electric vehicle with a retail sales price that happens to be over the $100,000 threshold.”

Adrienne Vaupshas, a spokeswoman for Finance Minister Chrystia Freeland, said the measures, originally proposed in the 2021 budget, are not designed to hit the middle class.

She said the threshold for the tax for boats was deliberately set at $250,000 so it would cover superyachts and not middle-class families buying boats.

Vaupshas said it was “only right and fair that the very wealthiest are asked to pay their fair share.”

“The government was re-elected on a platform that included a commitment to bring forward a luxury tax on yachts, private jets, and luxury cars and implementing this measure is a priority,” she said.

The tax was originally proposed in the 2021 budget. It will cover luxury cars, planes, and boats bought for personal use and leisure. Commercial vehicles, including small planes selling seats, and emergency vehicles are among the classes of vehicle exempt from the new tax.

The tax amounts to either 10 per cent of the taxable amount of the item or 20 per cent of the amount over the price threshold — whichever is less.

The NDP has been putting pressure on the federal government to do more to tax the super-rich. Measures to increase taxes on the wealthiest people in Canada, however, were not included in the Liberal-NDP confidence and supply pact.

NDP critic for tax fairness and inequality, Niki Ashton, said at a news conference last month that she wants the federal government to close loopholes she says are being used by the super-rich and corporations to avoid paying billions in taxes.

This report by The Canadian Press was first published Aug. 11, 2022.

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Economy

Plastics producers ask court to quash planned federal ban on single-use straws, cups

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OTTAWA — More than two dozen plastic makers are asking the Federal Court to put an end to Ottawa’s plan to ban several single-use plastic items including straws, cutlery and takeout containers.

It is the second lawsuit filed in the court by a coalition of plastics makers calling themselves the Responsible Plastic Use Coalition.

The first suit filed in 2021 seeks to overturn the government’s decision to designate plastics as “toxic” under the Canadian Environmental Protection Act.

Environment Minister Steven Guilbeault used that designation to publish regulations that will ban the sale, import and production of six plastic items.

The second lawsuit filed in mid-July asks the Federal Court to quash the ban, prohibit the government from using the act to regulate single-use plastics and prevent the ban from being implemented in the meantime.

Guilbeault says he is confident the government’s regulations will be upheld and would rather work with the industry to improve recycling than battle the sector in court.

This report by The Canadian Press was first published Aug. 10, 2022.

The Canadian Press

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