Olympia Business Watch

Politics, Red Tape Doom Tri-Cities Project

Proving the press corps doesn't take the interim off, Chris Mulick has a nifty piece of investigative reporting in the Tri-City Herald on the loss of "a major economic development score for the state" -- 400 new jobs, and possibly 625 current jobs, to neighboring Idaho.  The PI also picked up a version of the piece. 

Focusing mostly on intriguing back and forth between project proponents and the Governor's office, the story says a lot about the sometimes chilling effect of our state's legendary permitting process and peculiar environmental politics on our economic competitiveness. 

Americans Want More Domestic Oil Production

The Foundry reports that higher oil prices have had an - well, you can't say unexpected - impact on Americans' views on oil and the environment.

In April 2007 only 41% of Americans favored drilling in the Arctic National Wildlife Refuge (ANWR). Today, 57% of Americans favor drilling in coastal and wilderness areas currently off limits.

Whether you're among the 57 percent or not, you have to appreciate this.

The other liberal objection to increased domestic energy production is that the additional supplies will not affect prices for a decade. We will let Jay Leno respond: “Democrats said it would not do any good because it would not produce oil for 10 years. You know, same thing they said 10 years ago.”

The Climate Change Bureaucracy

The Senate's debating Lieberman-Warner, sweeping climate change legislation that few, if any, expect to pass. Too see what a Lieberman-Warner future might look like, check out the PowerLine blog. (h/t JSA)

Makes  this stuff look simple.

Here's my column on gas prices and climate change.

The Politics of Climate Change

Last week, George Will used the listing of the polar bear as "threatened" as the basis for a sharp assessment of green politics. His column deservesto be read in its entirety, but here's a taste.

Today's "green left" is the old "red left" revised. Marx, a short-term pessimist but a long-term optimist, prophesied deepening class conflict but thought that history's violent dialectic would culminate in a revolution that would usher in material abundance and such spontaneous cooperation that the state would wither away.

The green left preaches pessimism: Ineluctable scarcities (of energy, food, animal habitat, humans' living space) will require a perpetual regime of comprehensive rationing. The green left understands that the direct route to government control of almost everything is to stigmatize, as a planetary menace, something involved in almost everything -- carbon.

Sound harsh? Consider K.C. Golden's op-ed in today's Seattle Times. He writes in support of the Climate Security Act (aka the Lieberman-Warner bill). The National Association of Manufacturers, with which AWB is associated, has published an analysis of the proposed legislation, concluding:

...if passed into law, [the bill] would have a profound economic impact on U.S. businesses, consumers and governments nationally and in all 50 states. A sampling of the national findings includes:

o Gross Domestic Product (GDP) losses of $151 billion to $210 billion in 2020 and $631 billion to $669 billion per year in 2030
o Employment losses of 1.2 million to 1.8 million jobs in 2020 and 3 million to 4 million jobs in 2030
o Household income losses of $739 to $2,927 per year in 2020 and $4,022 to $6,752 per year in 2030
o Electricity price increases of 28% to 33% by 2020 and 101% to 129% by 2030
o Gasoline price increases (per gallon) of 20% to 69% by 2020 and 77% to 145% by 2030

Golden, of course, doesn't reference those figures, but opines that the bill is, at best, just a good first step:

The vote on the Climate Security Act marks an important whistle-stop on the train to real climate solutions.

He favors

a full-throated roar of solutions, not a soft whimper of palliatives

Sounds ambitious. And how can you argue with logic like this?

The frequency of major floods like this winter's devastation in Southwest Washington has increased by 300 to 700 percent on every continent except Australia since the 1950s. No one of these events can be ascribed to global warming, but the trend is hardly a coincidence.

None of them can be ascribed to climate change, but all of them can be? "Hardly a coincidence" falls short of "settled science," doesn't it?

Oh well. Power Line has a nice post on just how complicated the proposed legislation is, with a link to the U.S. Chamber.

See also Eric Earling's post at Sound Politics on climate change politics in the gubernatorial race here.

More The good folks at Sightline Daily report that Robert Reich has joined the fray, talking about "climate fairness." Golden's piece also made "be fair" one of the three things national climate policy must do well.

As in tax debates, when the discussion turns to what's fair, beware. In the eyes of the beholder and all that.

2008 AWB Session Review and Voting Record

We've just posted the 2008 Legislative Review and Voting Record to our website. AWB members will soon receive them with the May/June issue of Washington Business, which is in the mail now. Take a minute to review how your legislators voted on business issues in 2007 and 2008.

In the Senate, Republican Senators Jim Honeyford and Linda Parlette scored 100 percent in 2008.

Top ranking House members with 2008 scores of 96 percent were Republican Representatives Larry Crouse, Joel Kretz and Lynn Schindler.

Gov. Chris Gregoire received a 2008 score of 29 percent.

More Evidence of Problems in Biofuel Industry

The News Tribune reports delays in planned expansion of the Imperium Renewables, Inc. biodiesel plant in Grays Harbor. The facility, commonly referred to as "the nation's largest" biodiesel plan, opened last year with much fanfare. Since then, the biodiesel world has done a 180. Here's the short take from the TNT.

mperium Renewables Inc. has delayed a $345 million initial public offering, put on hold its plans for four additional plants and trimmed its corporate staff. Its chief executive officer resigned without explanation.

The $78 million plant is still operating, though the price of soybean oil and other vegetable oils has jumped 100 percent to 200 percent in the past year. Hopes to buy much of the feedstock from Eastern Washington farmers haven’t blossomed and, instead, the plant is using mostly canola oil from Canada.

And while biodiesel is supposed to help reduce American’s dependence on foreign oil and cut greenhouse gas emissions, the domestic market has not materialized as expected. Virtually all of Imperium’s product is being shipped to Europe.

AWB president Don Brunell warned of problems back in 2006. Chris McCabe, AWB's governmental affairs director of environmental policy, also addressed the issue after the 2006 Legislature adopted a biodiesel mandate.

... Imperium Renewables will complete a refinery in Grays Harbor County by the end of 2007 that could produce as much as 100 million gallons of biodiesel per year. The plant is a boon to the economically challenged Aberdeen/Hoquiam area, but the plant would rely largely on resources not produced by Washington’s farmers. Instead, it will use Malaysian palm oil and soybean oil produced elsewhere in the United States. This contradicts the very intent of the legislation.

As for reducing our nation’s dependency on foreign oil, biodiesel and ethanol use would still not curb America’s appetite for oil. According to the U.S. Energy Information Association, oil exports are expected to increase 10 percent over the next 20 years as Americans use more oil but produce less in the United States.

As Brunell wrote last February, now even the Greens have soured on biofuels.

Todd Myers of the Washington Policy Center offers a thoughtful perspective in an op-ed in today's TNT. Perverse incentives (mandates and subsidies) have proven counterproductive, he writes, increasing food prices, inefficient agricultural practices, and adding to carbon emissions.

These problems are why many environmental activists who previously supported these programs, have turned against biofuel subsidies and mandates. Even the United Nations, home to the leading voice of concern about climate change, the Intergovernmental Panel on Climate Change, has condemned biofuels. Now it is time for Washington to rethink its approach on biofuels and switch away from this costly and ineffective path.

Unintended consequences or unbridled hubris? Perhaps the problems will engender a little caution as lawmakers consider their next steps in the climate change crusade.

Wind Energy Overhyped on Campaign Trail?

The wind blows unimpeded across the plains of South Dakota, much as it does in Central and Eastern Washington, where wind power facilities have sprung up to harvest renewable energy. But few expect wind power to provide the bulk of the nation's electricity any time soon. So it was surprising to read this in the Sioux Falls Argus Leader.

The federal government needs to take responsibility for building transmission lines to encourage the development of wind power in South Dakota, Democratic presidential candidate Sen. Barack Obama said during an interview Friday with the Argus Leader.

Obama says wind power could provide up to half the nation's electricity needs, but federal tax incentives must be extended to keep that development in the United States.

Half the nation's electricity needs? Not according to the U.S. Energy Department, as reported in the Austin American-Stateman.

Wind energy provides only a tiny fraction of the nation's electricity today, but with technology advancements, the country could get 20 percent of its power from wind by 2030, the Energy Department reported Monday.

The report comes on the heels of a record-breaking year for the wind energy business — led by producers in Texas — and as the U.S. House prepares to consider extending tax credits for wind and other renewable energy companies.

Energy Department officials and industry representatives acknowledged that wind power has a long way to go before it becomes a major electricity source. Today, only about 1 percent of the nation's energy comes from wind power.

Oh well. It's better than this.

The Plain-Dealer Explains Oil Prices

And it's a very good read.

MORE According to a recent Moore Information report, about 30 percent of American voters support more drilling in and around the U.S. Significantly, only 23 percent of voters in the Pacific states support drilling. We don't want to open up the Arctic National Wildlife Reserve, either. Score one for the caribou.

Job Protection Trumping Environmental Protection

A recent survey by Moore Information shows that a cooling economy has led to a shift in voter opinion regarding jobs and environmental protection.

Specifically, voters today are more likely to say they are concerned with protecting jobs (51%) than protecting the environment (39%). The remaining 10% have no opinion. … this sentiment has reversed from a year ago.

Here’s the question:

On issues involving jobs and the environment, are you more concerned about protecting jobs, or more concerned about protecting the environment?

In 2007, environmental protection won out, 49-40.

As they say, read the whole thing. It’s short, just two pages with some interesting subgroup tables.

Brunell Column: Nuclear Power May be Back

In his Tuesday column in the Columbian, Don Brunell points out that nuclear power may be making a comeback.

...nuclear power has been used safely and successfully in Europe for decades.

Currently, there are 197 nuclear power plants operating in Europe and 13 more are under construction. France gets 78.5 percent of its energy from nuclear, Lithuania 70 percent, Belgium 56 percent and Sweden 46.7 percent.

We need to set goals of reducing carbon emissions, but those goals must be reasonable and attainable ­ - and they cannot be allowed to destroy our economy. To accomplish even reasonable goals, we cannot afford to slam the door on any option ­ - particularly nuclear power, which is working successfully to reduce carbon emissions in the rest of the world.

What do you think?