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April 30, 2008

Property Tax Initiative?

I haven't seen this anywhere else, but HA reports on Initiative 1030, which Goldy says is being pushed by KVI host Kirby Wilbur.

HA says the tax break would be huge.

The Profit Carrot Works Better than Regulatory Sticks

In his column in yesterday's Columbian, AWB president Don Brunell looks at the role of profits in green industry.

Regardless of how it is marketed, the green economy works best when greenbacks are associated with it. There is nothing wrong with making a buck by saving energy, cutting down on raw materials going into manufacturing, or simply using less. In fact, it's an idea we all should embrace.

He looks at the return of the conservation ethic and the financial benefits of smart energy use.

The latest example is Costco. Earlier this year, the Issaquah-based retail giant announced it will begin installing large solar arrays on the roofs of its stores in California and Hawaii. The one in Kona is the largest solar array in Hawaii. These installations cost $750,000 each, but Costco will make the money back in three to five years.

Yet, he says, public policy lags behind, emphasizing command-and-control regulation rather than incentives.

Instead of supporting these efforts, many elected officials and agencies are getting in the way by imposing mandates, restrictions and punitive regulations to achieve our conservation goals.

The best thing government can do is to remove barriers to innovation and let it happen. The simple fact is, no government mandate can replace market-based incentives that allow people to make a profit.

WashACE REDBOOK GOES NATIONWIDE....AGAIN

At a Washington, D.C. press conference, the National Association of Manufacturers (NAM) rolled out its version of the Redbook.  The Redbook was developed by The Washington Alliance for a Competitive Economy (WashACE) in 2002 as a way to compare cost of doing business in all 50 states.  The Redbook is updated every year by AWB and the Washington Research Council.

States, such as Nebraska and Oklahoma, contract with WashACE to publish their own version, which is customized for their state chambers.

On a national level, NAM contracts with WashACE to customize the Redbook and distributes it to organizations, media outlets and elected officials.

"We are proud of the fact that our publication has wide acceptance across the country," AWB President Don Brunell told the media attending the news conference.  "It has helped to standardize cost competitiveness facts, figures and measurements so we can have a policy discussion over approaches to resolve problems and not bicker over whose statistics are correct."

WashACE is a partnership between the Association of Washington Business, Washington Roundtable, and Washington Research Council whose purpose is to promote sustained economic competitiveness for the State of Washington.

April 29, 2008

Air Force Tanker Fight Shaping Up in DC

It is shaping up to be a heavyweight tag-team wrestling match over the Air Force aerial refuel contract worth over $35 billion.  In one corner are Washington Senator Patty Murray (D) and Congressman Norm Dick (D) teamed with Kansas Senator Pat Roberts (R) and Congressman Todd Tiahrt (R)....and California's Congressman Duncan Hunter (R).  In the other corner is Mississippi's Thad Cochran (R) and Alabama's Richard Shelby (R)....and President Bush and the United States Senate who have a tendency to oppose restrictions on free trade.

The opponents of the contract want the Air Force to reconsider its selection of Northrop/Grumman and EADS (Airbus) to replace the current KC135 tankers.  They are supporting  "Buy American" which has a number of provisions which favor Boeing and building the aircraft in Washington and Kansas. They also want to permanently change the Pentagon's purchasing of foreign parts. They are concerned about the health of America's defense industry especially as the economy slows down.

President Bush and free trade advocates fear that changes Murray and Tiahrt are stumping for will trigger foreign governments to limit airplane and parts purchases from the United States.  By value, according to Congressional Quarterly's daily newsletter, the Northrop plane would be 42 percent foreign built compared with 15 percent for the Boeing tanker if it is built on the 767 airframe.

Hunter's proposal takes a slightly different approach. Hunter would disqualify foreign suppliers where that country spends less than 2 percent of their GDP on defense.  "American taxpayers, who pay an average $1,000 apiece for the defense of the free world, should, as a matter of equity, be allowed to make the systems that they pay for."

The fight is expected to take place during consideration of the 2009 defense appropriations bill.

The Association of Washington Business, Washington's state chamber of commerce and manufacturing and technology association, and more than 30 local chambers of commerce sent letters to President Bush, the Pentagon, Gov Gregoire and members of Washington's Congressional Delegation supporting Boeing's request for its appeal of the contract awarding.

Stay tuned.  This is just Round One. 

Don C. Brunell, President (DonB@AWB.org

April 28, 2008

Climate Change Costs in WSJ

Steven Hayward writes in today's Wall Street Journal of the "real cost of tackling climate change." It's not chump change.

He takes a look at the Green lobby's goal of an 80 percent emissions reduction by 2050, what he calls the "80 by 50" target.

According to the Department of Energy's most recent data on greenhouse gas emissions, in 2006 the U.S. emitted 5.8 billion metric tons of carbon dioxide, or just under 20 tons per capita. An 80% reduction in these emissions from 1990 levels means that the U.S. cannot emit more than about one billion metric tons of CO2 in 2050.

Legislation passed here this session sets a 2050 goal of cutting greenhouse gas emissions to 50 percent below 1990 levels. Hayward puts these out-year goals in perspective.

At the present time, American households emit 1.2 billion tons of CO2 – 20% higher than the entire nation's emissions must be in 2050. If households are to emit no more than their present share of CO2, emissions will have to be reduced to 204 million tons by 2050. But in 2050, there will be another 40 million residential households in the U.S.

Today, the average residence in the U.S. uses about 10,500 kilowatt hours of electricity and emits 11.4 tons of CO2 per year (much more if you are Al Gore or John Edwards and live in a mansion). To stay within the magic number, average household emissions will have to fall to no more than 1.5 tons per year. In our current electricity infrastructure, this would mean using no more than about 2,500 KwH per year. This is not enough juice to run the average hot water heater.

You can forget refrigerators, microwaves, clothes dryers and flat screen TVs.

And so on. No one knows how to get there. Reduced consumption, technological change, alternative fuels, and who knows what provide only implausible rhetorical cover. Hayward again.

The clear implication is that we shall have to replace virtually the entire fossil fuel electricity infrastructure over the next four decades with CO2-free sources – a multitrillion dollar proposition, if it can be done at all.

Natural gas – the preferred coal substitute of the moment – won't come close. If we replaced every single existing coal plant with a natural gas plant, CO2 emissions from electric power generation alone would still be more than twice the 2050 target. Most environmentalists remain opposed to nuclear power, of course. It is unlikely that renewables – wind, solar, and biomass – can ever make up more than about 20% of our electricity supply.

Read the whole thing. And then consider this Chris Mulick story. Nuclear power? Here?

"I think it has to be on the table," Democratic Gov. Chris Gregoire said in a recent interview. "I think we're going to have to revisit this question."

Her announced challenger this year, Republican Dino Rossi, agrees: "This isn't something I would say no to. It's something we need to explore."

If it's off the table, are the goals anything more than a rhetorical nod to Washington Greens?

Cars Are Stumbling Block to Trade Agreement with Korea

Editor's Note:  AWB President Don Brunell is in Washington, DC, for meetings with the National Association of Manufacturers (NAM). This blog posting was filed from our nation's capital.

While Korea's lifting of the beef embargo was a major step toward resolving differences between the United States and South Korea over a free trade agreement, resolving the differences between the two nations over auto imports and exports is a much thornier problem.

South Korea was the seventh largest market for U.S. exports in 2007 with $34.7 billion worth of goods sold.  However, the United States bought more than it sold and had a $12.8 billion trade debt with that Asian country.

The top five leading U.S. exports to Korea, according to the U.S. Census Bureau included: semiconductors, industrial machinery, organic chemicals, civilian aircraft and lab instruments for measuring, testing and controls.

The top five leading exports from South Korea to the U.S. included cars, household goods, petroleum products, computer parts and accessories and other parts and accessories.

Herein lies the problem that could tube the deal.  Last year, South Korea exported more than 700,000 cars to the United States while U.S. automakers only sent 5,000 the other way.  While the U.S. International Trade Commission estimates that full implementation of the agreement would increase U.S. GDP by as much as $11.9 billion; for Midwestern members of Congress where the auto industry is taking a battering, they want the South Koreans to reduce the higher taxes they assess on cars with large engines.

For Microsoft, Costco, Boeing, Starbucks, Washington beef producers and food processors, the U.S.-Korea FTA is a winner.  That is why the Association of Washington Business is urging Gov. Gregoire and our Congressional delegation to support it.

Whether it makes it through the halls of Congress this year is an open question.

Don C. Brunell, President (DonB@AWB.ORG)

McDermott Pays $1.093 Million to Settle Phone Ease-Dropping Suit

The front page story of today's CQToday, the daily Congressional Quarterly newsletter which is widely circulated in the nation's capital, reported that Washington Congressman Jim McDermott (D) wired House Minority Leader John A. Boehner's campaign committee $1.093 million to settle his cellphone ease-dropping lawsuit.

U.S. District Judge Thomas F. Hogan ordered McDermott to compensate Boehner (R-Ohio) for attorney fees after Boehner sued McDermott for leaking contents of a cell phone call that was illegally recorded in 1996.

According to CQ reporter Molly K. Hooper's article, McDermott defended the public's right to know what was said between Boehner and other GOP leaders, including then-Speaker Newt Gingrich. Hooper reports McDermott was never willing to say he was sorry.  Instead, he said the fight was worthwhile--$1.093 million worthwhile.

Previously, McDermott paid $64,000 and the balance of the money was transferred electronically from his legal defense fund and his campaign, Hooper added.

That's one check that "won't be in the mail!"

April 27, 2008

World's Food Supply Makes Front-Page Headlines in Washington Post

(Editor's Note: I am in Washington, DC this week for meetings and posted this item from the nation's capital)

A couple of weeks ago, my weekly column talked about the growing world food crisis and the United Nation's plea for $500 million in urgent aid to feed the world's poorest people. President Bush responded immediately with $200 million in humanitarian aid on behalf of the United States.

In that column I also mentioned the Bill and Melinda Gates Foundation provided Cornell University with a $26 million grant for genetic research to develop a resistant variety of wheat to prevent the Ug99 rust from devastating wheat crops worldwide.  Wheat is 30 percent of the world's food supply and some activists oppose genetic modification of plants. Unlike corn and soybeans, wheat is believed to have little value as an energy crop. But wheat prices and shortages also have sparked protests most notably in Pakistan, the world's ally in the fight against terrorist encampments. 

While high gas prices at the pump are big news around the country, including in our nation's capital, the price of food and the short supply of some commodities, such as rice, is front page news today in the Washington Post, the newspaper which draws the most attention on capitol hill and around the District of Columbia. And when banner headlines across the top of the Washington Post make the Sunday edition, you know it is important.

The problem could grow more acute as crops are converted from food to energy production and as countries, such as China, turn prime farmlands into factory sites, polluting more rivers and lakes, and drawing down groundwater supplies thus depleting life-critical aquifers. 

In this month's National Geographic Magazine the vivid description of what is happening to farmlands along that country's Yellow River should concern everyone.  As China's economy booms along at a 10 percent clip, it needs to buy more food, raw materials and oil. That increased demand is causing problems on the supply side and, as we all know too well, prices in the grocery store and at the service station keep going up. 

The point is politicians who love to grill the oil company executives need to wake up and look at the who picture from energy supplies to food. They might find that in the quest for alternatives to eliminate fossil fuels that they are creating bigger shortages in more fundamental things that impact people's lives.....like food!

Don C. Brunell, President (DonB@awb.org)

April 26, 2008

Chinese Love Affair With Cars Mushrooming and Causes Us More Pain at the Pump

Recently, I saw an editorial cartoon showing a congressional hearing where a donkey symbolizing a Democrat congressman was leaning over the rostrum yelling at an oil company executive:  "What do you want us to do, repeal the law of supply and demand?"

Unfortunately, for American motorists, the law of supply and demand is working very well and has allot to do with bringing us $4 a gallon gasoline and $4.50 diesel prices.  As China and India economies strengthen and people have more disposable income to spend in those countries, they are buying more food, homes, flat screen TVs, cellphones and yes, AUTOMOBILES.

The May issue of National Geographic Magazine is devoted to China.  It is a comprehensive look and contains a number of interesting pages with facts about China.  When you come to page 142, it talks about the growing Chinese love affair with cars.  China recently surpassed Japan as the second largest car market in the world behind the United States and those cars run on gas and diesel. 

Here is a sampling of what National Geographic reported:

    • There are now 11.5 million privately owned cars in China and the number of additional cars on Beijing roads alone every day numbers 1,000.
    • By 2025, China will have more cars on the road than the United States.
    • 96% of the Chinese pay cash for their cars.
    • By the end of this year, all Chinese expressways expected to be completed would circle the Equator 1.5 times.

So what about the supply side?  Auto manufacturers relish the burgeoning car markets in China, but as developing countries buy more crude oil, the price of a barrel is skyrocketing.  Nobody dreamed the price of a barrel of crude would top $100.  Recently, it hit $117.

As much as the current members of Congress love to haul "Big Oil" executives before their committees and scold them about record profits, they ought to ask themselves what they are doing to allow greater domestic exploration?  Why do they keep putting more and more oil potential areas off limits?

Those areas not only have strong potential but we have the technology to develop them in environmentally friendly ways. But to even suggest that we tap into a small area of ANWR's (Arctic National Wildlife Refuge) 19 million acres is heresy. Don't mind the fact that new technology allows drilling from small remote platforms connected only by ice roads in the winter and small aircraft during the summer.

While it is essential that we continue to develop alternative fuels as expeditiously as we can, we need a bridge from fossil fuels to the alternatives.  So far, Congress is not helping build that bridge and lecturing oil executives who have to deal with foreign crude suppliers does nothing to relieve the price Americans are paying at the pump.

Don C. Brunell, President (DonB@awb.org)

April 25, 2008

Herschel, This Bud's for Your Buddies

A couple months ago I wrote a column asking if there was any more room at SeaWorld for pesky California sea lions which are clobbering salmon and steelhead runs on the Columbia River at Bonneville Dam.

Well Anheuser-Busch, which owns SeaWorld, came to the rescue again.  In 1996, SeaWorld Orlando took in Bob, Hondo and Big Frank.  Those three chubby salmon lovers were pals of THE notorious Herschel, who made a name for himself at Seattle's Ballard Locks feasting on sockeye and steelhead. 

Fish and wildlife agents tried every trick in the book to keep the hundred or so sea lions which appeared at Bonneville again this spring away from salmon runs which are thin this year.  They sought and were granted special persmission to remove the mammals protected under the federal Marine Mammal Protection Act which could include killing them if they ran out of options. 

The sea lions are driving game wardens crazy.  Nothing seems to deter them and they only abandoned the Ballard Locks when the salmon and steelhead runs were so deciminated that it will take years for them to return to normal. 

According to The Columbian, SeaWorld came through again, at least for the time being.  Anheuser-Busch is paying for the shipment of the 600 to 1,000 lb. creatures.  To date, the U.S. Army Corps of Engineers have trapped two dozen sea lions, including two endangered Stellar sea lions, and they will soon be on their way to SeaWorld.  SeaWorld has a mammal rescue program which is helping to save other mammals like manatees as well.

If those sea lions were people, they would belly up to the bar and hoist their glasses to August A. Busch IV, the CEO of Anheuser Busch.  Bud is not only picking up travel expenses, but a big grocery  bill as well

Don C. Brunell, President (DonB@awb.org)