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MURPHY: Using the CBO Report to Critique a US Carbon Tax

Posted May 24, 2013 | folder icon Print this page

The advocates of a US federal carbon tax are in an awkward position. They have stressed to the public that the majority of natural scientists believe human-caused carbon emissions are at least partially responsible for the rise in global temperatures over the last century, and that any physicist or climatologist who denies this is outside “the consensus.” They think this is sufficient to prove that a US carbon tax is therefore a wise policy move. Unfortunately for them, “the consensus” in the economics literature shows that this conclusion is far more dubious.

To prove my point, I will walk the reader through the recent report from the CBO on the economic and environmental effects of a carbon tax. Just glancing through the Executive Summary, one gets the impression that there is a slam-dunk case for implementing a carbon tax, both to raise needed revenues and to help mitigate the damage from climate change. But I’ll list several major problems with that argument, and what’s more, I won’t go to the Heritage Foundation or the Heartland Institute for my facts. I will quote from the same CBO report itself to show that the economic cost/benefit case for a US carbon tax is much weaker than the public has been led to believe.

The authors of the CBO report know what the Obama Administration wants to hear, but they are also competent economists and the awkward facts (from their perspective) are what they are. Let’s walk through and see all of the problems with a US carbon tax, and why we should not expect the rosy outcomes that its advocates describe.

A Carbon Tax Would Suck Trillions Out of the Private Sector While Doing Little to Reduce Global Emissions

First let’s get a sense of the climate bang-for-the-buck we’d get from a carbon tax of the magnitude policymakers are considering. The CBO report tells us on page 1 that they didn’t formally model this, but that previous estimates of a cap-and-trade program (which would have very similar impacts) that would imply a $20 per ton tax on carbon dioxide would raise $1.2 trillion in revenue over the first decade. In exchange for this enormous drain of resources from the private sector, we would see a drop in US emissions (relative to the no-cap baseline) of 8 percent.

Right off the bat, does this sound like a good deal to the average American? In 2011, the US was only responsible for 16% of global CO2 emissions (China was the leader with 29%), and going forward the US share will only shrink as China and other developing economies surge. Reducing US emissions by 8 percent, in exchange for a $1.2 trillion new levy on American citizens in the first decade alone—do most Americans really want to sign up for this?

A Carbon Tax Would Lower Economic Output, Raise Prices, and Disproportionately Hurt the Poor

How exactly would a carbon tax affect the economy? The CBO report tells us, and again this comes from page 1:

By raising the cost of using fossil fuels, a carbon tax would tend to increase the cost of producing goods and services—especially things, such as electricity or transportation, that involve relatively large amounts of CO2 emissions…

Without accounting for how the revenues from a carbon tax would be used, such a tax would have a negative effect on the economy. The higher prices it caused would diminish the purchasing power of people’s earnings, effectively reducing their real (inflation-adjusted) wages. Lower real wages would have the net effect of reducing the amount that people worked, thus decreasing the overall supply of labor. Investment would also decline, further reducing the economy’s total output.

Later the CBO explains quantifies the regressive nature of the carbon tax:

The higher prices resulting from a carbon tax would tend to be regressive—that is, they would impose a larger burden (relative to income) on low-income households than on high-income households. The reason is that low income households spend a larger share of their income on goods and services whose prices would increase the most, such as electricity and transportation. For example, an earlier CBO analysis concluded that a policy that set a price of $28 per metric ton on CO2 emissions would increase costs for households by amounts that would equal about 2.5 percent of after-tax income for the average household in the lowest one-fifth (quintile) of the income distribution but less than 1 percent of after-tax income for the average household in the highest quintile. (pp. 8-9, emphasis added)

Later the report is more specific, explaining that average US electricity prices would rise by 16 percent, while “[h]ouseholds in Illinois, Indiana, Kentucky, Michigan, Missouri, Ohio, West Virginia, and Wisconsin would see the biggest rise in electricity prices (27 percent)” (p. 9).

Using Carbon Tax Revenue to Help the Poor Would Not Mitigate the Economic Impact

When faced with the inconvenient truth that a carbon tax would fall disproportionately on the poor, progressive supporters of the idea are quick to suggest that some of the trillions in new revenue be devoted to compensate such unfortunate citizens from rising electricity and gasoline prices. Ah, but the catch is, the more the government does this, the less efficient the whole scheme becomes. As the CBO report itself admits:

[U]nlike using carbon tax revenues to reduce deficits or marginal tax rates, using them to provide relief from the tax’s effects on certain groups would generally not lessen the total economic costs of a carbon tax, including the reduction in total output. For example, lump-sum payments to low-income households would not provide benefits to the broader economy under normal economic conditions, because those payments would not increase people’s incentives to work or invest and thus would not lead to greater economic productivity. Conversely, using the revenues to cut marginal tax rates on corporate or individual income would benefit the economy more broadly but would probably have limited value to low-income households, who typically owe little, if any, income tax. As a result, lawmakers could face a tradeoff between using carbon tax revenues to minimize the tax’s adverse effects on the economy as a whole and using them to minimize the tax’s impact on disproportionately affected groups. [p. 12, bold added.]

Thus we see that the progressives who claim a carbon tax would bring in gushers of new money, which could be used to minimize the burden on the poor, are at loggerheads with the conservatives who claim a carbon tax would bring in gushers of new money to reduce the deficit and/or other taxes. The two goals operate at cross-purposes; you can’t use the same $1.2 trillion to compensate the poor for rising energy costs, and to reduce corporate income tax rates. (And anyone who thinks $1.2 trillion in new revenue will be devoted solely to deficit reduction, needs to review the history of Washington, DC.)

The Economics Literature Does Not Support a Carbon “Tax Swap”

Yet it gets worse. Not only will the goal of a grand carbon “tax swap” deal be undercut by the need to compensate disadvantaged groups, but even on its own terms, the evidence in the technical economics literature comes down to the conclusion that even a dollar-for-dollar carbon tax swap deal would hurt the conventional economy. Again, let us quote from the CBO report itself:

Different studies reach different conclusions about the extent to which a tax swap would offset the costs of a carbon tax. For example, one study examined the impact of using carbon tax revenues to fund several specific tax cuts—including reductions in marginal rates for payroll taxes, corporate income taxes, and individual income taxes. It concluded that the reduction in output caused by the carbon tax would be larger than the increase in output caused by the accompanying tax cuts…

Another, more recent study concluded that using the revenues from a carbon tax to pay for a cut in marginal tax rates on capital…would cause output to be higher for several decades than it would be without the carbon tax and corresponding tax cut. That study also estimated that cutting marginal tax rates on labor would help limit the reduction in output caused by a carbon tax…but that the net effect of the carbon tax and tax swap on output would still be negative. Another recent study estimated that using half of the revenues from a carbon tax to reduce the deficit and the other half to reduce marginal tax rates on individual income would lead to lower output throughout the 50-year period examined.

Thus, although many researchers agree that a tax swap could limit the economic costs of a carbon tax, they differ in their estimates of how far the tax swap would go to offset those costs…[p. 11, bold added]

In case the reader is lost in the details, let me spell out the shocking implications of the above block quotation. The CBO report is summarizing the literature on the extent to which devoting 100 percent of carbon tax revenues to other tax reductions (and/or deficit reduction which reduces future taxes) could help mitigate the impact on the economy. To this end, the CBO reported the results of three representative studies. Two of them (the first and third) unambiguously say that conventional GDP will be lower, even with a 100 percent carbon tax swap deal. The second study cited does find that using 100 percent of the carbon tax swap revenue to cut existing taxes on capital could actually increase conventional GDP (in addition to environmental gains), but even this study admits that if the carbon tax swap deal is devoted to reducing taxes on labor, then the net effect on the economy will be to reduce output.

This is a crucial point I stressed in my recent study on carbon tax swap deals. Conservative proponents of such a deal need to understand that the best guess among technical researchers is that even if the government took 100 percent of the carbon tax revenue and used it to reduce marginal income tax rates across the board, then this would probably hurt the conventional economy. When you factor in the political realities that we will never get a 100 percent devotion of the revenues for reducing top marginal income tax rates or corporate tax rates, the case for a “double dividend” or a “win-win” outcome is even weaker.

If conservatives want to say, “Hey, this train is leaving the station, we might as well fight for some tax rate relief,” that at least is a justifiable argument. But they should stop claiming that a carbon tax swap deal will help the economy and the environment simultaneously; the peer-reviewed literature says that it probably won’t, and the CBO admits it.

Conclusion

The case for a US carbon tax is much weaker than the public has been led to believe. It would cost trillions of dollars to achieve minor reductions in global emissions in the coming decades, it would fall disproportionately on the poor, any attempts to mitigate this burden would undercut the other possible economic gains, and even if 100 percent of the revenue were used to offset other taxes, the conventional economy would still suffer. Every one of these points comes right from the CBO’s latest report—although you wouldn’t realize it from reading the Executive Summary.

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Author:
Robert Murphy

The Steady March Toward Cleaner Air

Posted May 23, 2013 | folder icon Print this page

Air quality in the United States is getting cleaner, but sadly many Americans believe the opposite. In order to explain the reality of America’s improving environmental quality, Steven Hayward has spent years compiling environmental data with his Almanac of Environmental Trends. Recently he released an update using data from the Environmental Protection Agency to chronicle the astonishing reductions in air pollution in the last few years alone.

Hayward writes:

  • Virtually the entire nation has achieved clean air standards for four of the six main pollutants regulated under the Clean Air Act (carbon monoxide, sulfur dioxide, nitrogen oxides, and lead). The only pollutant where the clean air standard is still widely exceeded is ozone.
  • In the case of ozone and particulates, the areas of the nation with the highest pollution levels have shown the greatest magnitude of improvement. The average ambient declines in pollution on the national scale that are reported here understate the magnitude of improvement in the worst areas. On the flip side, the EPA’s regulatory structure systematically overstates the number of Americans exposed to unhealthy air.

Hayward explains that technology and Mother Earth are not enemies—innovation has significantly improved environmental quality. Technological advancements have played a far more potent role than regulations in advancing environmental goals. He points out that “process efficiency” (including practices such as more complete fuel combustion and innovations such as power plant “scrubbers,” control technologies, and catalytic converters on vehicles) has significantly reduced emissions without substantial government involvement. Air pollution, in fact, began declining in the mid-1960s, prior to the first Clean Air Act[1]

Economic growth and environmental improvement has gone hand in hand over the last few decades as this chart from EPA shows:

EPA pollution

Another way explain the improvement in air quality is with EPA’s Air Quality Index (AQI). The AQI is a metric EPA used to declare “healthy” air days for sensitive people such as the elderly, children, and people with respiratory problems. Recent AQI numbers show that the number of cities that experienced an AQI above the threshold level of 100 has dropped in the last 20 years. While in 1990, roughly 4000 days each year experienced AQIs over 100, by 2010, only about 1000 days reported AQIs above 100. The graph below also reveals an overall negative trend of AQIs above 100 over time[2].

 Air quality index

The update clarifies an important and often overlooked concept—the distinction between emissions and ambient levels. While nearly everyone commonly speaks about trends in emissions, almost no one speaks about the more important variable, ambient levels. Hayward explains:

Emissions refers to the amount of pollutant that man-made activities generate – in other words, the amount of stuff that comes out of a smokestack or automobile tailpipe or other sources…Ambient level refers to the actual concentration of a pollutant in the air…emissions are estimated, using sophisticated modeling techniques, while ambient air quality is monitored through several hundred sampling stations throughout the U.S.[3]

Both ambient levels of pollutants and emissions have declined between 1980 and 2010. Tables 1 and 2 below[4] reveal that national average ambient levels and emissions of carbon monoxide, ozone, lead, nitrogen dioxide, particulates, fine particulates, and sulfur dioxide have all fallen in the last 30 years. Particularly fascinating is that particulates, continually flagged by the EPA as harmful to human health, have actually declined precipitously over the last three decades.

 ambient1

ambient2

Hayward can hardly be accused of information distortion or bias, because most of his data comes straight from the EPA itself, and the only other primary sources used come from the Department of Energy, the Energy Information Administration, the California Air Resources Board, the European Environmental Agency, the U.N. Environment Agency, and the World Bank. In fact, some of Hayward’s most powerful numbers come from the EPA’s 2011 report on air status and trends[5]. Interestingly, though, the EPA did not issue a press release to highlight on this particular report. Furthermore, Hayward’s only secondary sources come from the International Study of Asthma and Allergies in Childhood and the Centers for Disease Control.

We have reason to be optimistic about the ability of human ingenuity to solve environmental challenges. Technology is not the enemy of nature, but rather can be its friend. If people are afforded the opportunity to innovate, they will, creating a more efficient future. History proves that restricting market creativity would be a mistake.

IER Policy Intern Kaavya Ramesh contributed to this post.

[1] Hayward, 6.

[2] Hayward, 7-8.

[3] Hayward, 4.

[4] Hayward, 6-7.

[5] “Our Nation’s Air – Status and Trends through 2010,” United States Environmental Protection Agency, 2011, http://epa.gov/airtrends/2011/report/fullreport.pdf.

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IER

IER/AEA: A Free Market Energy Organization

Posted May 21, 2013 | folder icon Print this page

In his recent Huffington Post piece, Elliott Negin of the Union of Concerned Scientists portrays the Institute for Energy Research (IER) and its advocacy arm, the American Energy Alliance (AEA), as “a front organization for the oil and gas industry.”  The title of his piece says it all: “Unreliable Sources: How the Media Help the Kochs and ExxonMobil Spread Climate Disinformation.”

I founded IER in 1989 as a free-market voice in the energy debate and remain the CEO today. In 2008, in response to growing energy politicization, IER opened a Washington office, soon after which the AEA was founded. We are one of a plethora of 501c3 and 501c4 energy-related organizations that populate the nation’s capital.

IER/AEA is not a “front group” for anything but free-market entrepreneurial capitalism. We argue that decisions about energy should be made by regular citizens and instead of bureaucrats and politicians deciding what they think is best for the rest of America. Our work reflects a number of long-standing academic traditions, including market-process economics, Public Choice theory, and natural rights philosophy.

We are influenced by F. A. Hayek’s insights on the failure of central planning, not to mention the recorded energy planning failures of the 1970s. James Buchanan’s explanation of government failure elucidates the gulf between intention and result in the public sector. Julian Simon’s ultimate resource uniquely explains why so-called depletable resources expand over time in a business/economic sense. Milton Friedman’s numerous insights about energy through the decades have proven reliable. These four (three of them Nobel Laureates in economics) were not fronts for anything, much less a particular energy interest. Their work inspires our work today.

Politically, IER/AEA seeks to replace crony capitalism with consumer-driven, creative-destruction, government-neutral capitalism. In other words, we believe that Americans should be able to make their own energy choices instead of government subsidizing or limiting energy choices. We criticize and expose rent-seeking by politically-connected firms (including Enron, where I worked for 16 years, challenging the firm’s climate alarmism and renewable-energy subsidies). The list of energy firms who forsake the real market for special government failure is too long to list.

IER/AEA’s positions reflect the fact that renewable energies are dilute, costly, and unreliable and have distinctly negative environmental consequences. The growing grassroots environmental backlash against (government-subsidized) industrial wind turbines, not to mention inefficient and expensive biofuels, is testament to the unintended consequences, economic and environmental, of energy planning by political elites.

For more about IER’s purpose and mission, visit our website. I do not know anyone on our staff, or on the staffs of other free-market organizations, who does not believe they have a superior intellectual case and are proudly doing their part to advance a free and prosperous commonwealth. Ad hominem argumentation is beneath today’s energy and environmental debates.

IER/AEA did not ask for politicized energy, and this contentious fight would recede if government got out of the energy business. Basic human needs are not being met and economic growth is being foregone because of resource-intensive politicking. This needs to change, the sooner the better.

Robert L. Bradley Jr., founder and CEO of the Institute for Energy Research, is author of seven books on energy history and policy and blogs at www.masterresource.org.

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Author:
Robert Bradley

California: Energy Death Valley

Posted May 16, 2013 | folder icon Print this page

California is rich in both conventional and renewable energy resources. It is the country’s most populous state and has the second largest energy consumption in the nation, second only to Texas. California has large energy resources, but also one of the lowest per capita energy consumption rates in the country. The state is frequently hailed as a leader on energy policy and California’s policies are leading to higher energy prices.

California’s regulations have driven up energy prices, and the regulations will continue to push those prices up.  For example, California motorists are required to use a special motor gasoline blend called California Clean Burning Gasoline, making California have one of the highest gasoline prices in the lower 48 states. California has also enacted regulations to increase the price of energy in an effort to reduce carbon dioxide emissions. These excessive regulations do not help California’s jobs outlook, nor will it help the state balance its budget.

5.15.13-IER-CaliChart

Petroleum 

California is the fourth largest producer of crude oil in the nation, after Texas, North Dakota, and Alaska. In 2012, California produced more than 8 percent of total U.S. oil production. California has large crude oil and substantial natural gas deposits in six geological basins, located in the Central Valley and along the Pacific coast. Most of those reserves are concentrated in the southern San Joaquin Basin. Seventeen of the country’s 100 largest oil fields are located in California, including the Belridge South oil field, the third largest oil field in the contiguous United States. In addition, Federal assessments indicate that large undiscovered deposits of recoverable oil and gas lie offshore in the federally administered Outer Continental Shelf (OCS), which in 2008 was reopened by the Bush administration and Congress for potential oil and gas leasing, but which has not been included in the Obama Administration’s 2012-2017 OCS Leasing Plan.

chart

Source: U.S. Energy Information Administration

Drilling operations are concentrated primarily in Kern County and the Los Angeles basin, although substantial production also takes place offshore in both state and federal waters. California has a permanent moratorium on new offshore oil and gas leasing in its state waters due to issues regarding the perceived cumulative impacts of offshore oil and gas development and the possibility of marine oil spills. Development on existing State leases, however, is not affected and can still occur within offshore areas leased prior to the effective date of the moratorium.

While the moratorium on oil and gas leasing in federal waters expired in 2008, the Obama administration has not included areas off the California coast in its 5-year offshore lease plan. Further, on May 3, 2013, the Bureau of Land Management (BLM) issued a press release, announcing the postponement of 4 parcels of public lands covering 1,278 acres that were to be offered for oil and gas lease sales in California on May 22, 2013. BLM has indicated that the lease sales would not occur in California during this fiscal year allegedly due to the sequester budget cuts, despite the fact that leasing increases revenue to the U.S. Treasury and that the cancellation is in violation with the Mineral Leasing Act of 1920, which requires each state office to conduct four lease sales a year.[i]

A network of crude oil pipelines connects production areas to refining centers in the Los Angeles area, the San Francisco Bay area, and the Central Valley. California refiners also process large volumes of Alaskan and foreign crude oil received at ports in Los Angeles, Long Beach, and the Bay Area. Crude oil production in California and Alaska is in decline due to state and federal lease policies. As a result, California refineries have become increasingly dependent on foreign imports.

California ranks third in the United States in petroleum refining capacity and accounts for more than one-tenth of total U.S. capacity. California’s largest refineries are highly sophisticated and are capable of processing a wide variety of crude oil types and are designed to yield a high percentage of light products like motor gasoline. To meet strict federal and state environmental regulations, California refineries are configured to produce cleaner fuels, including reformulated motor gasoline and low-sulfur diesel.

Most California motorists are required to use a special motor gasoline blend called California Clean Burning Gasoline.  And, in the ozone non-attainment areas of Imperial County and the Los Angeles metropolitan area, motorists are required to use California Oxygenated Clean Burning Gasoline. While there are five ethanol production plants in central and southern California, most of California’s ethanol supply is transported by rail from corn-based producers in the Midwest.

Because of California requires specific and unique fuel blends and because California’s petroleum market is relatively isolated, California motorists are vulnerable to short-term spikes in the price of gasoline. As a result, California refineries often operate at close to maximum capacity. When an unplanned refinery outage occurs, replacement supplies are brought in via marine tanker, which can take two to six weeks due to the state’s strict fuel requirements.

Natural Gas

California natural gas production accounts for about 1 percent of total U.S. production. Production takes place in basins located in northern and southern California, as well as offshore in the Pacific Ocean. As with crude oil production, California natural gas production is in decline. State supply has remained relatively stable due to supplies received by pipeline from the Rocky Mountains, the Southwest, and western Canada. California natural gas markets are served by two natural gas trading centers, the Golden Gate Center in northern California and the California Energy Hub in southern California. Natural gas storage facilities within the state help to stabilize natural gas supplies from potential vulnerabilities.

Electricity

Natural gas-fired power plants generate over one-half of the state’s total electricity generation. California is the third largest hydroelectric power producer in the United States behind its northern neighbors, Washington state and Oregon. In 2012, hydroelectric power generated 13 percent of California’s electricity. Nuclear power plants generated 9 percent of the state’s total generation in 2012. As of mid-2012, California had just one of its two nuclear plants operating. Its 2,160-megawatt Diablo Canyon nuclear plant near San Luis Obispo is still operating. Its 2,150-megawatt San Onofre nuclear plant between Los Angeles and San Diego went off-line in January 2012 and was ordered by the Nuclear Regulatory Commission to stay off line while tubing wear issues are investigated.   Due to strict emission laws, only a few small coal-fired power plants operate in California, generating less than one percent of the state’s electricity. A California law also forbids utilities from entering into long-term contracts with conventional coal-fired power producers.

5.15.13-IER-CAgraph-CJW3

Source: U.S. Energy Information Administration

Renewable Energy

California ranks second in the nation, behind Texas, in electricity generation from non-hydroelectric renewable energy sources. The state generates electricity using wind, geothermal, solar, fuel wood, and municipal solid waste/landfill gas resources. Substantial geothermal and wind power resources are found along the coastal mountain ranges and the eastern border with Nevada. High solar energy potential is found in southeastern California’s deserts.

California is the top producer of electricity from geothermal energy in the nation, generating 7 percent of its electricity in 2012.  A facility known as “The Geysers,” located in the Mayacamas Mountains north of San Francisco, is the largest complex of geothermal power plants in the world, with more than 700 megawatts of installed capacity, and has been operating for decades.

California is the nation’s third largest generator of wind energy, behind Texas and Iowa, generating 5 percent of the state’s electricity.

The world’s largest solar power facility operates in California’s Mojave Desert and a number of new solar power plants are under construction.  The Bureau of Land Management is giving priority status to 5 solar project proposals in California that will be constructed on federal lands. To further boost renewable energy use, California’s Energy Action Plan includes incentives that encourage Californians to install solar power systems on their rooftops. The state leads the nation in the total number of homes that have solar panels installed and leads the nation in electricity generated from solar power, generating one-third of the solar-powered central station electricity in the United States in 2012.

Some Examples of California Electricity Initiatives Gone Awry

In 2000 and 2001, when California initially deregulated its electricity generation business, it suffered an energy crisis characterized by electricity price instability and four major blackouts that were caused by a supply and demand imbalance. Multiple factors contributed to this imbalance, including: a heavy dependence on out-of-State electricity providers, drought conditions in the northwest that reduced hydroelectric power generation, a rupture on a major natural gas pipeline supplying California power plants, strong economic growth leading to increased electricity demand in western States, an increase in unplanned power plant outages, and unusually high temperatures that increased electricity demand for air-conditioning and other cooling uses. Following the energy crisis, the California State government re-regulated the industry and created an Energy Action Plan designed to eliminate outages and excessive price spikes. The plan calls for optimizing energy conservation, building sufficient new generation facilities, upgrading and expanding the electricity transmission and distribution infrastructure, and ensuring that generation facilities can quickly come online when needed.

In 2006, California amended its renewable portfolio standard to require investor-owned utilities, electric service providers, small and multi-jurisdictional utilities, and community choice aggregators to provide at least 20 percent of retail sales from renewable sources by the end of 2010 and 33 percent by the end of 2020. California has also adopted other policies to promote energy efficiency and renewable energy, including energy standards for public buildings, power source disclosure requirements for utilities, and net metering.

California’s renewable portfolio standard of 33 percent by 2020 is making its Independent System Operator of its electricity grid worried regarding reliability and dependability of its future electricity generating sources. Some examples will demonstrate the reason. Early in the summer of 2006 as well as on later occasions, California faced record heat conditions that strained its ability to meet a peak demand of 50,000 megawatts.  The resources at that time included 2,323 megawatts of wind capacity.  However, wind’s average on-peak contribution over the month of June was only 256 megawatts or barely 10 percent of the nominal amount.[ii]   This example shows that data on installed wind capacity is of little or no value in predicting the actual power the system can get from it at peak times.

Another example occurred in August, 2012, when the California Independent System Operator issued a “flex alert” that called for a reduction in use of lights, air conditioning, and appliances, i.e. the call was for electrical conservation in order to avoid black-outs. At that time, California had 4,297 megawatts of installed wind capacity, but less than 100 megawatts were operating at 11 am on August 9, 2012, or just 0.02 percent of electricity demand. While solar was contributing more at 11 am than wind, by 5 pm when demand was at its highest, solar’s electrical generation output waned and wind’s output was increasing but not enough to meet demand. Wind’s more sizable generation levels do not occur until the late night or very early morning hours when they are least needed. The California Independent System Operator has on many occasions expressed concerns about its ability to maintain reliability in the face of a 33 percent renewable portfolio standard for 2020 that will require a tripling of wind and solar power production.[iii]

California State Regulatory Environment

Although affordable energy is a vital component of a healthy economy, regulations frequently increase energy costs. Regulations imposed in the name of reducing carbon dioxide and greenhouse gas emissions are especially costly. Carbon dioxide is a natural byproduct of the combustion of all carbon-containing fuels, such as natural gas, petroleum, coal, wood, and other organic materials. Today, there is no cost-effective way to capture the carbon dioxide output of the combustion of these fuels, so any regulations that limit carbon dioxide emissions will either limit the use of natural gas, petroleum, and coal, or dramatically increase their prices.

Below is a summary of California’s regulatory environment:

  • California has a cap on greenhouse gas emissions that was enacted in September 2006 by the California State Legislature. The Global Warming Solutions Act, A.B. 32, caps greenhouse gas emissions at 1990 levels by 2020. It was the first state program to impose a cap on greenhouse gas emissions and include enforceable penalties.[iv]
  • California is a member of the Western Climate Initiative (WCI), a regional agreement among some American governors and Canadian premiers to target greenhouse gas reductions. The central component of this agreement is the eventual enactment of a cap-and-trade scheme to reduce greenhouse gas emissions 15 percent below 2005 levels by 2020. Arizona, Montana, New Mexico, Oregon, Utah and Washington have all left the WCI, leaving California as the only state remaining. 
  •  California has a de facto ban on new coal-fired power plants. An interim greenhouse performance standard requires that all new baseload generation produce no more greenhouse gases than a combined-cycle gas turbine power plant.[v]
  •  California requires utilities to sell a certain percentage of electricity from renewable sources. The state’s renewable portfolio standard (RPS) requires utilities to provide 33 percent of their retail electricity sales from renewables by 2020.[vi] The electricity must either be produced in-state or produced out-of-state and delivered into the state by qualified renewable generating sources. For most technologies the renewable facility had to have been constructed after September 26, 1996 to be counted towards the RPS.
  • California imposes a feed-in tariff for renewable energy, requiring investor-owned utilities to purchase renewable energy at an increased price. Utilities must buy all renewable generation under 3 megawatts within their service territories, until they hit a statewide total cap of 750 megawatts. Large public utilities must also set up programs to buy all renewable generation under 3 megawatts. By increasing the cost of renewable energy, this law increases electricity prices for consumers and businesses.
  • Most Californians are required to use a special blend of gasoline called California Clean Burning Gasoline.[vii] In Imperial County, and the Los Angeles metropolitan area, motorists are required to use California Oxygenated Clean Burning Gasoline. Also, California imposes a low carbon fuel standard (LCFS) that was issued by former Governor Arnold Schwarzenegger, Executive Order S-01-07, requiring a 10 percent reduction in the carbon intensity of all transportation fuels.[viii]
  • California imposes automobile fuel economy standards, which are regulations on greenhouse gas emissions from new vehicles. Assembly Bill 1493, passed in 2002, allows the California Air Resources Board to develop regulations to reduce greenhouse gas emissions from passenger vehicles if the state received a waiver from U.S. Environmental Protection Agency (EPA). The Obama administration awarded the waiver to California.[ix]
  • California’s Air Resources Board has mandated that zero emission vehicles (cars with zero emissions of tailpipe pollutants) comprise 15 percent of new-car sales by 2025. Those vehicles comprise less than 1 percent of new car sales today.[x] Tesla, an electric car manufacturer, for example, has reaped large benefits from California’s push for electric vehicles. Tesla can make as much as $35,000 extra on each sale of its luxury Model S electric sports sedans ($250 million this year) through state environmental credits that it can sell to other auto manufacturers that need to buy credits to satisfy California regulations. Adding in Federal tax credits and state rebates, the total comes to as much as $45,000 per car, selling for over $100,000 each.
  • California requires new residential and commercial buildings to meet energy efficiency standards. The state’s specific code, from Title 24, Part 6, exceeds the requirements of the 2009 International Energy Conservation Code (IECC) and is mandatory statewide.[xi] The IECC, developed by the International Code Council, is a model code that mandates certain energy efficiency standards. Buildings must also meet requirements set by CALGreen, the statewide green building code. CALGreen includes provisions to ensure the reduction of water use by 20 percent, improve indoor air quality, divert 50 percent of new construction waste from landfills, and inspect energy systems (i.e. heat furnace, air conditioner, mechanical equipment) for nonresidential buildings over 10,000 square feet to make sure that they’re working according to design.[xii] The 2008 Standards took effect January 1, 2010. The 2013 Standards are scheduled to take effect January 1, 2014.[xiii]  Assembly Bill 1103, passed in 2007, also requires all non-residential buildings to report their annual energy use.[xiv] Beginning in 2010, commercial building owners must disclose annual energy use and Energy Star ratings to potential buyers, lessees, and financiers. In 2005, former Governor Arnold Schwarzenegger issued Executive Order S-20-04, requiring a 20 percent reduction from 2003 levels in grid-based energy use in state buildings by 2015.[xv] New and renovated state buildings must also meet the silver LEED standard. The silver LEED standard is one level of the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) rating system. A wide variety of independent state agencies must also seek new energy efficiency standards. Lastly, Assembly Bill 532, passed in 2007, requires solar energy equipment to be installed by 2009 on any public building or facility where such an installation is cost-effective.
  • California imposes state-based appliance efficiency standards. The state’s Appliance Efficiency Regulations include mandates for consumer audio and video products, metal halide lamp fixtures, pool pumps, general service incandescent lamps, water dispensers, walk-in refrigerators and freezers, hot tubs, commercial hot food holding cabinets, under cabinet fluorescent lamps, and vending machines.[xvi] Additionally, Assembly Bill 1109, passed in 2007, requires the California Energy Commission to impose minimum efficiency standards for all general purpose lights.[xvii]
  •  California allows utilities to “decouple” revenue from the sale of electricity and natural gas. By allowing utilities to decouple, California has enabled its utilities to increase their revenue by selling less electricity and natural gas.

Conclusion

California often takes credit for being a leader among the states in setting policy and serving as an example, but the question is where is California leading? California is rich in conventional and renewable energy resources, but instead of using these conventional energy resources, the state puts obstacles in the way of conventional energy, which is leading to much higher energy prices for Californians.  California has one of the highest gasoline prices in the continental United States despite being a large oil producer and despite being home to large oil deposits. California has the highest residential electricity rates in the western United States—33 percent higher than Nevada’s, 44 percent higher than Arizona’s, and 58 percent higher than Oregon’s. These higher prices are the direct outcome of California’s burdensome regulation on the use and production of energy, and that regulation costs the state and its residents, jobs, investment and revenue.  Its policies are making the state poorer, in much the same way similar policies in Europe have contributed to economic stagnation there.

[i] Washington Times, ‘Sequester’ cuts force halt to California oil, gas lease sales, May 14, 2013, http://www.washingtontimes.com/news/2013/may/14/sequester-cuts-force-halt-to-california-oil-gas-le/

[ii] Robert J. Michaels, “Run of the Mill, or Maybe Not,” New Power Executive, July 28, 2006, 2. The calculation used unpublished operating data from the California Independent System Operator

[iii] California Independent System Operator, Reliable Power for a Renewable Future, 2012-2016 Strategic Plan.  http://www.caiso.com/Documents/2012-2016StrategicPlan.pdf

[iv] California Global Warming Solutions Act, A.B. 32 (Cal. 2006), http://www.leginfo.ca.gov/pub/05-06/bill/asm/ab_0001-0050/ab_32_bill_20060927_chaptered.pdf

[v] California Public Utilities Commission, Greenhouse Gas Emissions Performance Standard, http://www.cpuc.ca.gov/PUC/energy/Climate+Change/070411_ghgeph.htm

[vi] Lawrence Berkeley National Laboratory, Renewables Portfolio Standards in the United States, http://eetd.lbl.gov/ea/ems/reports/lbnl-154e.pdf

[vii] Energy Information Administration, California, http://www.eia.gov/state/analysis.cfm?sid=CA

[viii] California Air Resources Board, The California Low Carbon Fuel Standard Regulation, http://www.arb.ca.gov/fuels/lcfs/1208lcfsreg_draft.pdf

[ix] A.B. 1493 (Cal. 2002), http://www.arb.ca.gov/cc/ccms/documents/ab1493.pdf and Rulemaking on the Proposed Regulations to Control Greenhouse Gas Emissions from Motor Vehicles, http://www.arb.ca.gov/regact/grnhsgas/grnhsgas.htm

[x] Los Angeles Times, Tesla drives California’s environmental credits to the bank, May 5, 2013, http://articles.latimes.com/2013/may/05/business/la-fi-electric-cars-20130506

[xi] California Energy Commission, California’s Energy Efficiency Standards for Residential and Nonresidential Buildings, http://www.energy.ca.gov/title24/index.html

[xii] DSIRE, California Building Energy Code, June 6, 2012, http://dsireusa.org/incentives/incentive.cfm?Incentive_Code=CA51R&re=0&ee=1

[xiii] California Energy Commission, Background on the 2013 Building Energy Efficiency Standards, http://www.energy.ca.gov/title24/2013standards/background.html and 2013 Residential Building Energy Efficiency Standards Measures Summary, March 6, 2013, http://www.energy.ca.gov/title24/2013standards/2013-03-12_Changes_for_the_2013_Update_to_Building_Energy_Efficiency_Standards.pdf

[xiv] An act to add Section 25402.10 to the Public Resources Code, relating to energy, A.B. 1103 (Cal. 2007), http://www.leginfo.ca.gov/pub/07-08/bill/asm/ab_1101-1150/ab_1103_bill_20071012_chaptered.pdf

[xv] Cal. Exec. Order No. S-20-04 (July 24, 2004)

[xvi] California Energy Commission, 2007 Appliance Efficiency Regulations, http://www.energy.ca.gov/2007publications/CEC-400-2007-016/CEC-400-2007-016-REV1.PDF

[xvii] A.B. 1109 (Cal. 2009)

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Author:
IER

The Domestic Energy Bonanza and the Economy

Posted May 14, 2013 | folder icon Print this page

A recent commentary on the Washington Post’s “Wonkblog” illustrates the ability of professional economics to collide with common sense. The article seeks to pooh-pooh the idea that America’s oil and natural gas expansion have contributed much to the (anemic) economic recovery, but the arguments are dubious at best. If we just look at unemployment rates at the state level, it is pretty clear that the innovations in the oil and gas sector have done wonders. For those wishing to boost job creation, reduce costs for the average American household, and reduce the deficit with no tax hikes, expanded energy development is still a no-brainer.

Downplaying the Contribution of the Oil and Gas Bonanza

The Wonkblog writer, Brad Plumer, starts off by acknowledging that the US has had higher economic growth since 2009 than “Britain, Japan, the euro zone, and many other advanced nations around the world.” One theory to explain this is the advances in hydraulic fracturing and other techniques, which have allowed “U.S. companies…to exploit new sources of oil and shale gas in places like North Dakota, Texas, Ohio and Pennsylvania.”

Yet Plumer relies on a research note from Paul Dales of Capital Economics, which argues that the oil and gas revolution has little to do with the (modest) US success. Dales writes:

Since June 2009 the volume of oil and gas extraction has risen by 24%. Over the same period the production of mining machinery has risen by 47% and the output of mining support services, which includes oil and gas drilling, has leapt by 58%. The only disappointment is that output of petroleum refining has risen by just 3%.

But that rise explains only a small part of the economic recovery. Admittedly, it is responsible for a fifth of the 18.3% increase in overall industrial production. Given that the oil- and gas-related sectors account for only 2.5% of GDP, they have contributed just 0.6 percentage points (ppts) to the 7.6% rise in GDP. [Bold in original.]

There are serious problems with this kind of analysis. Fundamentally, it assumes that the proper way to measure a factor’s contribution to economic growth, is to look at the share of total spending on that factor.

OK let’s use the same approach to evaluate the contribution of, say, water to US economic growth over the last few years. An estimate from the early 2000s says that the median US household spent about 1.1 percent of its income on water and sewerage. So if all of the water and sewer infrastructure suddenly disappeared in June 2009, would cumulative GDP growth have been 6.5%, instead of the actual 7.6%? No, the economy and official measures of GDP would have collapsed, as the US would have been plunged back into medieval standards of living.

Energy is integral to every sector of the economy, meaning expanded access and lower prices could stimulate measured “growth” all over the place. We see this when Plumer discusses an ostensibly better explanation for US growth:

In all, Dales concludes, it’s hard to give oil and gas more than a small bit of credit for America’s better-than-average economic performance since 2009. “[T]he recovery in US GDP since the recession has been driven by an improved performance across a wide range of sectors, including motor vehicle production and professional business services.”

His preferred theory is that the United States has done better than its peers “partly due to its greater exposure to the faster growing Asian nations and partly due to the willingness of U.S. households to reduce their saving rate more significantly.”

Does that make sense? When trying to understand the relative (though still inadequate) strength of the US recovery since 2009, does it make more sense to credit huge innovations in domestic energy production, or to thank our lucky stars that American households are going deeper into debt?

North Dakota Not About Energy Sector?

Another way to illustrate the problem, is to apply the Plumer/Dales approach directly to North Dakota, a major beneficiary of the Bakken formation. North Dakota currently has the lowest unemployment rate in the country, at 3.3% (as of March 2013). Does anyone seriously doubt that oil and gas development are driving the phenomenal North Dakotan economy?

And yet, if you look at the employment patterns in the state, you might walk away with an erroneous conclusion. From 2010 to 2012, North Dakota added almost 54,000 jobs, a very robust increase of 14 percent over the two years. Yet if you decompose the job growth by major industry, you will see that “Mining and Logging”—which includes oil and gas extraction—is not the leader. No, “Mining and Logging” only contributed about 14,000 jobs, or 26 percent of the total growth.

The leading major industry type was actually “Trade, Transportation, and Utilities,” which added 16,000 jobs, or 30 percent of the total increase. “Construction” also added 8,000 jobs, about 15 percent of the increase.

Thus, someone following the approach of Plumer/Dales might look at the North Dakota economy over the last few years and say, “Sure, the shale boom was an important factor, but not the major one. It can only explain about a fourth of the state’s humming economy.”

Yet this would be silly, as the oil and gas activity is driving the employment growth in those other areas. If it weren’t for the revolution in oil and gas extraction, there would not have been a 15 percent jump in construction employment in North Dakota over the last two years.

Conclusion

I hope I’ve shown the flaws with the Plumer/Dales treatment of energy’s role in the (tepid) U.S. recovery in GDP growth. Yet even if Plumer and Dales are right, and the expansion in oil and gas development has only played a small part in the official economic recovery…we can still turn up the dial. The United States has enormous amounts of energy resources, just waiting to be developed, if only the federal government would give the private sector the green-light to do so.

Contrary to the Dales study, the revolution in domestic energy production has been beneficial to job-seekers, as well as businesses and households who benefit from inexpensive energy. Regardless of the specific contribution of this factor since 2009, the federal government can immediately get more of it by simply allowing producers access to the vast amounts of untapped supplies. Such a move would spur additional job creation, reduce household energy costs, and bring in hundreds of billions in additional federal revenue, thus reducing the deficit without the need for explicit tax hikes.

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Author:
Robert Murphy

Sequestration: A President’s Folly or an Opportunity Oil

Posted May 13, 2013 | folder icon Print this page

Congress decided to let the sequester take place, but the Obama Administration decided where the cuts would occur. Unfortunately, for the American public, many of the cuts seem to have taken place in order to hurt the public rather than to benefit it. For example, air traffic controllers were furloughed by the Federal Aviation Administration (FAA) in large numbers at the same time, causing flight delays until Congress directed that cuts be made elsewhere by the Department of Transportation to cover FAA’s reduction. In contrast, the military is purchasing bio-fuels at $59 per gallon when they could be purchasing conventional jet fuel for about $3.73 per gallon. This one change alone would cover at least $200,000 of the military’s reduction if the contract for exotic and expensive bio-fuel had been cancelled and even more if the next contract option is not exercised. Now, the Obama Administration decided to make less domestic crude oil available in the future by using the sequester to cut its Department of Interior budget by postponing oil and gas lease sales in California which would actually raise revenue..

These examples raise the question whether the Obama Administration is making the wise decisions on the small cuts it needs to make to satisfy the sequester (about a 2 percent reduction in spending), or are the cuts designed to make Americans feel the pain?

The Bio-fuels Purchases

The Defense Logistics Agency (DLA), part of the Department of Defense, signed a contract with the renewable chemical and bio-fuel company Gevo to supply 3,650 gallons of renewable jet fuel. This contract — worth $215,350 or $59 per gallon — has the option to be increased to 12,500 gallons, which would cost up to $737,500. And, this is just the “initial testing phase.”[i] According to the DLA, conventional JP-8 jet fuel costs $3.73 per gallon at fiscal year 2013 rates. Under other contracts, Gevo supplies renewable jet fuel to the U.S. Air Force and U.S. Navy.

Virent Inc., a company based in Wisconsin, recently delivered 100 gallons of bio-fuel to the U.S. Air Force Research Laboratory at Wright-Patterson Air Force Base in Ohio. The jet fuel produced from 100-percent renewable plant sugars will be tested against applicable standards at a research lab in Wright-Paterson. The air force uses 2.5 billion gallons of jet fuel a year and must reach a goal of getting it from alternative fuels by 2030, apparently even if it is more than 15 times the cost of conventional fuels.

Virent was awarded $1.5 million from the Federal Aviation Administration and the U.S. Department of Transportation to establish a demonstration facility in Madison, Wisconsin that has the capacity to produce 5,000 gallons of bio-fuels per year.[ii]

The Defense Department has failed to explain to the American people why dabbling in exotic bio-fuel is a worthy use of taxpayer dollars. If the concern is about foreign oil imports on our national security, it would be far more cost-effective if the Department of Interior would open lands and waters to produce oil rather than hoping bio-fuel technology improves. Given these realities, it appears that the Defense Department is making these decisions for political reasons instead of making decisions based on protecting America or by carefully using taxpayer dollars.

Postponement of Oil and Gas Lease Sales in California

On May 3, 2013, the Bureau of Land Management (BLM) issued a press release, announcing the postponement of 4 parcels of public lands covering 1,278 acres that were to be offered for oil and gas lease sales in California on May 22. BLM has indicated that the lease sales would not occur in California during this fiscal year. According to BLM’s website, “Due to budget constraints resulting from the sequester and an emphasis on the higher priorities for conducting Inspection and Enforcement on existing leases and processing new Applications for Permit to Drill, the California State Office of the Bureau of Land Management (BLM) has postponed all oil and gas lease sales in California for the remainder of Fiscal Year 2013.” Of course, little consequence is given to the fact that these lease sales could help to increase domestic production of oil in the future, and keep conventional petroleum-based jet fuel at reasonable prices.

This lease sale would have provided access to the Monterey shale formation, which stretches from the middle of the state south to Los Angeles County and is estimated to hold 15.4 billion barrels of recoverable petroleum, more than the Bakken and Eagle Ford shale formations combined.[iii] Allowing access to the Monterey shale could have boosted oil production in California, which has been steadily declining since 1985 and improved the state’s job market and economy. In 2012, California’s oil production, 195,680 thousand barrels, was half its production in 1985, its peak production year. California now ranks fourth among the states in oil production, exceeded by Texas, North Dakota, and Alaska.

Stopping federal lease sales in order to save money is akin to cutting off one’s nose to spite one’s face.  The federal government makes billions of dollars per year from oil and gas leasing and royalties from oil and gas produced from their lands, although their collections are down significantly from their 2008 highs.  Last year, oil and gas production fell on federal lands while new historical records for natural gas and oil were achieved from non-federal lands.  In the case of oil, the rate of production increased faster than any time since the first oil well was drilled in 1859.  The country needs more federal oil and gas leases, not less, and those leases and the production and economic activity they would generate would add revenues to the Treasury.

monterey_600

Source: American Association of Petroleum Geologists

According to Julia Bell, a spokeswoman for the Independent Petroleum Association of America, “The last thing that the federal government should do if they want to garner more revenues for the federal Treasury is stop development of oil and natural gas. Using the sequester as a reason to withhold lease sales furthers the problem and does not do anything to solve the budget crises. More oil and gas production would not only boost the economy, it will boost the federal Treasury.”

Note that it is not big oil that is making these comments but the small mom and pop oil and gas companies. These independent producers develop 95 percent of the oil and gas wells in the United States and produce 54 percent of our oil and 85 percent of our natural gas, much of which is located on federal lands.

A study by the University of Southern California (USC), “Monterey Shale and California’s Economic Future”, estimated that development of the Monterey shale formation could generate half a million jobs and $4.5 billion in oil-related tax revenue by 2015 and boost the state’s economic activity by as much as 14 percent. USC also projected that as many as 2.8 million new jobs and more than $24 billion in state and local tax revenue would be generated in the next 7 years from developing the Monterey shale formation. Personal income is projected to increase by $40.6 billion to $222.3 billion.[iv]

According to BLM, federal land leases on shale are now going for $500 per acre from $2 to $5 per acre just a few years ago.[v] The Bakken shale formation in North Dakota, which is half the size of the Monterey formation based on the latest USGS resource numbers, has fueled a boom that has driven N.D.’s unemployment rate to 3.3 percent, the lowest in the nation. California’s unemployment rate is 9.4 percent, the third highest in the country.[vi]

To develop the Monterey shale formation, hydraulic fracturing and directional drilling would need to be used, as it is in the Bakken shale formation in North Dakota, the Eagle Ford in Texas and an increasing number of areas throughout the country. Hydraulic fracturing, a process that involves injecting large volumes of water and sand with some chemicals deep into the ground to break apart rock and release oil, has been used in California for decades. Unfortunately, California politicians are trying to ban its use. Recently, politicians in California’s Assembly introduced measures to impose a moratorium on hydraulic fracturing, and Governor Jerry Brown’s administration released draft regulations that would require companies to disclose the chemicals used and the well locations.  While disclosure of chemicals used is not a problem and is common, individual companies use proprietary “recipes” in some cases which, if disclosed, would give rival companies their research and development for free.

Conclusion

Sequestration is having an effect on government programs, which it is designed to do by cutting spending. However, the Obama Administration has chosen to cut in areas that seem to make no sense. Clearly, there are many uneconomic programs that could be cut, such as forcing the military to use bio-fuels and spending lavishly on them rather than ensuring increased domestic oil production on federal lands to support future domestic conventional jet fuel production and revenue to lessen the deficit.

According to Secretary of Defense Chuck Hagel, sequestration would cause “suspension of important activities, curtailed training, and could result in furloughs of civilian personnel.”[vii]  The defense department could easily cut its green fuels program for renewable jet fuel that is costing over 15 times the cost of conventional jet fuel. To see how ridiculous this is, ask yourself the question, “Would you spend $59 a gallon for gasoline if you could buy it at $3.73 a gallon?  The Obama Administration is choosing to say “yes” while cutting in other areas.  If governing is about prioritizing programs and expenditures, their choices raise very serious questions about those priorities.

Also see http://www.instituteforenergyresearch.org/2011/12/07/navy-buys-fuel-at-15-per-gallon-they-should-read-ier%E2%80%99s-new-report/

[i] The Blaze, MILITARY SIGNS CONTRACT FOR GREEN JET FUEL THAT’S NEARLY 16 TIMES THE PRICE OF CONVENTIONAL FUEL, May 3, 2013, http://www.theblaze.com/stories/2013/05/03/military-signs-contract-for-green-jet-fuel-thats-nearly-16-times-the-price-of-conventional-fuel

[ii] Dayton Daily News, AFRL receives plant-based fuel for testing, May 2, 2013, http://www.daytondailynews.com/news/business/afrl-receives-plant-based-fuel-for-testing/nXfJS/

[iii] Greenwire, Oil and gas: BLM decision to cancel all new leasing in Calif. This fiscal year irks industry, May 6, 2013, http://www.eenews.net/Greenwire/2013/05/06/archive/6?terms=California+lease+sales , and Energy Information Administration, Review of Emerging Resources: U.S. Shale Gas and Shale Oil Plays, July 2011, http://www.eia.gov/analysis/studies/usshalegas/pdf/usshaleplays.pdf

[iv] Capitol Weekly, Potential is great from oil from Monterey shale, March 26, 2013, http://capitolweekly.net/article.php?xid=11bac7yll1i999l

[v] LA Times, Town hopes for jobs tapping California’s huge oil formation, March 30, 2013, http://www.latimes.com/business/la-fi-monterey-shale-20130331,0,5836158.story

[vi] Bureau of Labor Statistics, Unemployment Rates for States, March 2013, http://www.bls.gov/web/laus/laumstrk.htm

[vii] Washington Examiner, Despite sequester, DOD signs contract for $59/gallon green jet fuel, May 2, 2013, http://washingtonexaminer.com/despite-sequester-dod-signs-contract-for-59gallon-green-jet-fuel/article/2528692

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Author:
IER