The EPA's Newest Environmental Vendetta Against Coal

The EPA has proposed lower emission limits on power plants for 84 pollutants, including mercury, arsenic, nickel, selenium, cyanide, and acid gas.  The mercury emission limit has been given the most attention and will be tightened to 1.2 pounds per million BTUs produced by a power plant.  The most affected electric power plants will be those that generate half of our electricity using coal.  In 12 states, coal-fired power plants generate from 70 to 98% of the electricity used.  Coal-fired electric generation plants will have to add expensive further scrubbing equipment and the expenses of operating that equipment.  The EPA claims this will cost the electric power companies $10.9 billion a year, though industry estimates run somewhat higher.  Some older coal-fired power plants will not be worth the added investment.  Several plants are scheduled to go off-line in 2014 as a result of this EPA proposal already.  Plants totaling 2,290 to 3,950 megawatts may be lost in Illinois alone.

The EPA claims lost jobs, more expensive electricity, and less reliable electricity will be justified because the stricter regulations will save 11,000 lives and up to $140 billion in health benefits per year.  The claim is that there will be 4,700 fewer heart attacks a year and 130,000 fewer children suffering asthma.  6,300 fewer children will have acute bronchitis.  These EPA claims have been widely called into question.  With 2,423,712 American deaths a year, 11,000 fewer deaths is a change of less than 0.5%.  Studies will have great difficulty in proving the cause or even the existence of such a decrease were it to occur.

Great fanfare has been given to the required reductions in mercury.  Environmentalists like to say that power plants generate half of the mercury to which we are exposed.  Let us examine this claim.  The U.S. and China generate about the same amount of electricity from coal.  The U.S. coal-fired power plants are estimated to produce between 41 and 48 tons of mercury per year.  The middle of this range is 44.5 tons.  The Chinese power plants, which do not scrub their emissions, are thought to emit about 400 tons of mercury a year.  This is about 9 times as much as U.S. power plants emit per kWh of electricity.  While coal is mostly used in the U.S. for electricity generation, in much of the world it is used extensively still for heating and it has industrial applications also.  World consumption of coal is about 7,229 megatons.  The U.S. consumes about 858 megatons.  Assuming conservatively that the total generation of mercury from coal use is about 4 times that in the U.S., the world total output of mercury from coal use would be about 1500 tons a year.  Thus a total elimination of mercury from coal-fired electric power plants in the U.S. would result in a decrease in mercury from coal use of only 3%.

This does not tell the whole story.  Forest fires in the U.S. generate about 44 tons of mercury per year.  Forest fires consume about 5 million acres of forest a year in the U.S.  But forest fires in the world consume about 123 million acres of forest a year.  This implies that about 1080 tons of mercury are generated by forest fires worldwide in a year.  Cremation of human bodies generates another 26 tons of mercury from tooth fillings a year.  This means that the 44.5 tons of mercury from U.S. electric power plants is only 44.5/ (1500 + 1080 + 26) = 0.017 or 1.7% of these sources of mercury.

It gets worse.  Volcanoes, subsea vents, geysers and other natural sources are thought to emit between 9,000 and 10,000 tons of mercury a year.  Compared to this and the other sources of mercury discussed, the mercury output of U.S. coal-fired power stations is then about 44.5 / (1500 + 1080 + 26 + 9500) = 0.0037 or 0.37%!  So totally eliminating mercury from coal-fired power plants will only reduce the world's mercury output by 0.37%.  It is very difficult to understand how this will change the number of deaths or illness in the U.S. due to the effects of mercury unless our primary exposure to problems from mercury is of a very local basis.

It turns out that the EPA change in mercury limits is not based on health studies of the local effects of mercury from electric power plants in the U.S.  This is because Americans primary exposure to mercury is from eating fish.  There are 200,000,000 tons of mercury in ocean water.  The 44.5 tons of mercury from U.S. coal-fired power plants is only 0.2 millionths of this amount!  Despite this natural exposure to mercury, the blood mercury concentrations for U.S. women and children dropped steadily from 1999 to 2008 according to the Centers for Disease Control.  Levels are now way below the safe level established by the EPA, which safe level was well below any level of known harm.

The EPA mercury limits are based on a study of Faroe Islanders who eat huge quantities of whale meat and blubber and little in the way of fruits and vegetables.  The whale intake is very high in mercury and polychlorinated biphenyls and low in selenium.  Fruits and vegetables provide anti-oxidants thought to decrease the effects of low concentrations of mercury and polychlorinated biphenyls and selenium helps to negate the effects of mercury.  Meanwhile, the EPA ignored the Seychelles Children Development Study of 17 years that found no measurable cognitive or behavioral effects in children who ate from 5 to 12 servings of fish a week!  There is no effect even though these fish are swimming about in 200 megatons of mercury.

The EPA claim of 130,000 fewer children suffering asthma also makes no sense.  In 1995, 7.5% of children had asthma and this was up dramatically from 1980 when only 3.6% of children had asthma.  Despite this, air pollution in 1995 was much lower than it was in 1980.  Air pollution has steadily decreased since 1980, yet in 2009 asthma affected 10% of American children.  The Centers for Disease Control are baffled by the cause of this increase in asthma in children.  Despite this lack of understanding, the EPA claims that this 130,000 decrease in child asthma will occur to a reduction of fine particles that will be a side benefit to removing more mercury from power plant emissions.

The lowered mercury output level to be required of electric power plants is not rationally based on health concerns.  It is another javelin the Obama Administration has chosen to throw at the heart of the coal-fired power plants and at fossil fuel use in general.  It is a product of their alarmist viewpoint that fossil fuel use, particularly coal use, is a primary cause of catastrophic man-made global warming.  This is the real reason that Obama and his henchmen are willing to kill power plant jobs, drive up the cost of electricity, and kill coal-mining and transportation jobs.  This is the reason they are prepared to cause rolling blackouts such as undeveloped countries experience, despite the impossibility of continuing many industrial or laboratory operations under such conditions.  They will kill off many industries and companies in this way.  This is the reason they are willing to make many families suffer the cold in homes they cannot afford to heat or the heat in homes they cannot air-condition.  This is the reason they choose to ignore the deaths of people who will die because they are too cold or too hot in their homes.

They are doing this for the same reason that they are determined to kill the Keystone XL pipeline.  This is the same reason they oppose many oil and gas drilling projects across the United States.  This is the same reason they throw taxpayer money at any fraud who claims to have a scheme for renewable energy or energy conservation, especially if he is a campaign contributor.  Jobs and economic well-being take a backseat to their fanatical and misplaced belief in the false hypothesis of catastrophic man-made global warming due to man's CO2 emissions.  This irrational fanaticism is the death of many American jobs.  Fanatic irrationalism has fatal consequences.  I hope one consequence will be that Obama is not rewarded with a second term.

The Legitimate Role of Government - Summarized

In determining the proper role of government, we have to start with some foundational observations. Man must use reason to identify reality and to choose the values he will pursue. He must be free to use his mind to then pursue those values, which is the pursuit of his happiness.

The advantages of a society accrue optimally if a man is free to associate with others of his choosing for the purposes of his choosing. When that is the case, his ability to use his reasoning capability is amplified and he is better able to achieve his chosen values. People are complex and highly differentiated, so while they share some basic needs universally, such as their equal, sovereign individual rights, their choices of values beyond that level quickly diverge in many ways. Yet, as long as they have freedom of association, they can trade and cooperate to develop ideas, goods, and services with selected others to enhance and enrich their lives in the pursuit of their personal happiness. For some this may place great emphasis on material goods, for others the goal is more intellectual, and for others the goal is to have much time for recreation. This divergence of choices is all well accommodated by the private sector, given a legitimate government that only protects the People's equal, sovereign individual rights. This ideal of legitimate government was defined in the Declaration of Independence and our Constitution was to so limit the power and scope of government that it had no function but to protect our individual rights.

Because Americans have ignored these basic concepts of individual human nature, the advantages of society, the nature and need for individual rights in society, and the role of legitimate government, we have a government that dictates the choice of values to the individual and which ignores his own personal values. In the pursuit of decreeing values and micromanaging the lives of every individual, this government has become complex and tyrannical. The complexity of the government has made it unmanageable by our elected politicians. It has made it a threat to everyone and to every interest, since it is incompetent in identifying our personal values and has pursued many extortion schemes. Special interests must respond with lobbying to protect themselves from these misunderstandings and extortion schemes.

Other special interests observe that the government is much too complex for the People to understand what is going on and for them to control it. Since the government is out-of-control, it is easy for the clever and invested special interest to manipulate the levers of power in the government to provide their special interest with favors, such as restrictions upon competition with them or subsidies and grants. Soon, the big government that claims it is trying to do the greatest good for the greatest number is doing nothing of the sort. It is actually doing the greatest harm to the greatest number. In order to help Peter, it is robbing Paul and preventing Joe and David from pursuing their personal values.

This government is not providing for the General Welfare and has become the tool of rapacious special interests. This is the inevitable result of government that has lost the understanding that its only legitimate function is to protect the equal, sovereign individual right to life, liberty, and the pursuit of happiness. The protection of our individual rights is the only way government can enhance the General Welfare and escape becoming a tyranny controlled by special interests.

Federal Go-It-Alone Immigration Foolishness

It was only in 1875 that the Supreme Court decided that immigration policy was a federal responsibility.  In 1882 and 1891, Congress passed immigration acts.  The 1891 Immigration Act set up the Office of the Superintendent of Immigration to admit, reject, and process immigrants.  In 1893 the Office of Immigration had 119 employees at Ellis Island with a total staff of 180 employees.  Many of those other employees staffed other points of entry for immigrants.  How many employees remained for the task of finding and deporting illegal immigrants?  Clearly no more than a handful, if any.  So who did such work as was done to find illegal immigrants?  The answer has to be that this was the work of local and state governments.  The federal government defined and determined who could enter the USA legally, but it lacked the manpower to hunt down illegal immigrants.

By its own admission it still lacks the manpower to hunt down illegal immigrants and to deport them.  Logically, the states and local governments have continued the role they have always had in using their police power to do the task the federal government does not do now and really never has done.  Yet, I heard an Obama administration official just today claim that the federal government is the quarterback and states such as Arizona, Alabama, and Georgia have no role in finding illegal immigrants.  The Obama administration wants to be the quarterback who will hike the ball to himself and pass the ball to himself.  What a concept!

Of course, the federal government should do just what the 1891 Immigration Act said it should.  It should admit, reject, and process immigrants.  But, as the quarterback, it should understand that state and local governments are on the same team and have a vital interest in the law abidance of immigrants.  Of course they are tasked with protecting their local citizens from murder, theft, and other illegal activities of immigrants, as with anyone else.  Since the main reason there are immigration controls at all is a combination of concerns to keep criminals and terrorists out of the country, to control the effects of immigrants on wages and jobs, and to limit the number of people not yet well assimilated into the population and not familiar with the concepts of individual rights and limited constitutional government, these same concerns must be concerns of local and state governments.  To the extent these concerns are rational, then local law enforcement must not be denied a role in finding and removing illegal immigrants.

I am not anti-immigration at all.  I believe we allow too few legal immigrants.  I would like to see a large increase in the number of professional immigrants allowed into the country.  I also favor easy entry on work visas for less skilled workers, who upon completion of a few years of law-abiding work would be readily accepted as permanent residents should they choose to apply for such status.  I very much would like to see our immigration policies made freer, easier, and more welcoming.  Whatever the policy on immigration is, however, the laws should be enforced.  The only way the laws will be enforced is if the vainglorious quarterback becomes a team player and works well with the states and local governments.

This being the case, the only rational decision the Supreme Court can make on the Arizona illegal immigration bill called Our Law Enforcement and Safe Neighborhoods Act or SB1070 is to overturn the lower court ruling that much of it is unconstitutional.  The Arizona law does not interfere with the federal government deciding who can legally emigrate and who cannot.  It simply requires that people within the Arizona borders obey the law, whether local, state, or federal law.  This is entirely the proper function of the state government.  It is a straight-forward excise of protecting the local people.  If it is not viewed as protecting the people to keep illegal immigrants out of the state, then the federal policy for deciding who can legally enter the country is clearly wrong.  Unfortunately, federal policy is rather poor, but it is not entirely without rational basis and the states are obliged to enforce the federal law as though it were rational and justified.  If the federal policy is too egregiously wrong, then the states are still obliged to rationally protect their citizens even if that brings them in conflict with the federal government.

Consider the defense of America from foreign invaders.  This is clearly a federal responsibility also.  Despite this federal responsibility, the states have a National Guard and while they do not set defense policy, they do provide manpower to make it possible to defend the country.  More to the point yet, if a company of enemy troops were to sneak into Tulsa, Oklahoma and attack the people there, would we not expect the Tulsa, Broken Arrow, Jenks, and Catoosa police forces and any local National Guard units to converge upon that company of foreign troops and protect the people of Tulsa from the invasion force before the federal government could get troops there to provide the protection.  Of course we would.  The fact that the federal government has the responsibility to set immigration policy is irrelevant to the need for local government officers to see to it that the law is obeyed locally and the people are protected.

The most severe problems of illegal immigration are diminishing due to a combination of factors.  According to an article in the 13 December Wall Street Journal, there are now 21,500 agents along the Mexican border, an increase of a factor of two since 2004.  The slowdown in the U.S. economy has made us much less enticing, especially since the Mexican economy is growing faster than ours.  Another big factor is that Mexican families are becoming smaller and the population growth is now at a replacement level.  In 1970, the average Mexican woman had 6.8 children.  In 1990, that number had fallen to 3.4 and now it is the stasis rate of 2.1.  According to the Pew Hispanic Center, the number of illegal immigrants in the U.S. reached a maximum in 2007 of 12 million.  That number is now about 11 million.  Mexican immigrants are about 60% of the illegal immigrants.  In 2000, a total of about 750,000 Mexicans came to the U.S., counting both legal and illegal immigrants.  That year, the U.S. Border Patrol caught 1.64 million people along the Mexican border.  A net of only 150,000 Mexicans are believed to have made it into the U.S.  last year and 340,252 were apprehended at the Mexican border.  Deportations hit a record high in the last fiscal year of 397,000.  While the problem is diminishing, 11 million illegal immigrants is still a huge number of illegal immigrants.

Domesticating Free Pigs or Free Americans

This is a particularly interesting story applicable to how Progressive Elitists are carrying out their plan to make Americans forget to assert their equal, sovereign individual rights to life, liberty, property, the ownership of their own minds and bodies, and the pursuit of their own happiness.  It is well worth thinking about.  The story follows:

There was a chemistry professor in a large college that had some exchange students in the class. One day while the class was in the lab, the professor noticed one young man, an exchange student, who kept rubbing his back and stretching as if his back hurt. The professor asked the young man what was the matter. The student told him he had a bullet lodged in his back. He had been shot while fighting communists in his native country who were trying to overthrow his country's government and install a new communist regime.

In the midst of his story, he looked at the professor and asked a strange question. He asked: "Do you know how to catch wild pigs?"

The professor thought it was a joke and asked for the punch line.

The young man said that it was no joke. "You catch wild pigs by finding a suitable place in the woods and putting corn on the ground. The pigs find it and begin to come every day to eat the free corn.

"When they are used to coming every day, you put a fence down one side of the place where they are used to coming. When they get used to the fence, they begin to eat the corn again and you put up another side of the fence. "They get used to that and start to eat again. You continue until you have all four sides of the fence up with a gate in the last side.

"The pigs, which are used to the free corn, start to come through the gate to eat that free corn again.  You then slam the gate on them and catch the whole herd. Suddenly the wild pigs have lost their freedom. They run around and around inside the fence, but they are caught. Soon they go back to eating the free corn.  They are so used to it that they have forgotten how to forage in the woods for themselves, so they accept their captivity."

The young man then told the professor that is exactly what he sees happening in America .
The government keeps pushing us toward Communism/Socialism and keeps spreading the free corn out in the form of programs such as supplemental income, tax credit for unearned income, tax exemptions, tobacco subsidies, dairy subsidies, payments not to plant crops (CRP), welfare, medicine, drugs, etc.  While we continually lose our freedoms, just a little at a time.

Obama Friend Advocates Chinese Central Planning

Andy Stern, who until recently headed the SEIU labor union and made weekly visits to see Obama, has just recently written an opinion piece for the Wall Street Journal in which he strongly advocates Chinese central economic planning as the winning economic model of the future.  He informs us, from his perch as a senior fellow at Columbia University's Richman Center, that

the conservative preferred, free-market fundamentalist, shareholder-only model -- so successful in the 20th century -- is being thrown onto the trash heap of history in the 21st century.

 Given that this does not correctly characterize the economic system we actually had in the 20th century because it clearly forgets the anti-trust effort by Teddy Roosevelt and the tampering with free markets by Wilson, Hoover, Franklin Roosevelt, Truman and the many Presidents and Congresses throughout and since, we can only wonder what a real free market would have accomplished.  Unlike Stern's implication, the present stagnation of the system we now have can hardly be taken as an indicator of free market failure. 

Apparently, both he and his friend Obama believe that even with a private sector saddled by the EPA, FDA, IRS, SEC, FAA, FCC, NLRB, FDIC, FHA, Fanny Mae, Freddy Mac, government student loans, the Energy Dept., the HHS Dept., the Transportation Dept., the Agriculture Dept., the Interior Dept., HUD, Education Dept., ObamaCare, Sarbanes-Oxley accounting, Dodd-Frank Too Big to Fail Regulations, the Federal Reserve, farm subsidies, ethanol subsidies and mandates, renewable energy subsidies and mandates, export subsidies, and many more controlling and planning agencies, subsidies, and mandates, we are still essentially an out-of-date free market economy.

This does not even note the similar controls and interferences of state and local governments, all of which have been growing madly over time, especially in the last decade before the Great Socialist Recession started due to the housing and debt market bubble encouraged so vigorously by the federal government against the housing restrictions and expense-adding practices of many state and local governments.

Andy Stern tells us that the Chinese model of single-party top-down control is much better.  He does not tell us a thing about how one can square that model with our concepts of individual rights and constitutional limitations on government.  He does not do this, because as a power-lusting aristocrat of academia and labor union leadership, he has no concern about such issues.  He objects to our spending time thinking about the next election when we should be adopting a Chinese system of government controls.  The Chinese do not waste time on elections.  No, the government takes care of the people.  After all, he saw cranes everywhere building buildings for government and for public housing.  Never mind that the pointless growth for growth's sake directed by Stern's popular local communist leaders in China is about to collapse in a pile of debt and useless "investment" that will make the Japanese planned economy failure of the 1990s look small in comparison.

He swoons over the next Chinese five-year plan (their 12th five-year plan) which aims for 7% annual economic growth, $640 billion invested in renewable energy, building six million homes, investment in IT, clean-energy vehicles, biotechnology, and high-end manufacturing and environmental protection.  Somehow, though most of the prior Chinese 5-year plans were abject failures, Stern is sure they have figured out how to beat a free market while promoting social equality and rural development.

In reality, the rural Chinese are restricted from moving to the cities and rural China languishes neglected and in a high state of unrest.  Almost all investment in those areas which have seen investment is controlled by the Communist Party and if you want their money, you had better be well-connected to the Party.  American renewable energy companies are heavily dependent upon government subsidies and mandates to use the expensive and unreliable renewable energy.  In China they are supported with subsidies, with the added problem that Chinese renewable energy companies have no local markets and are heavily dependent upon the failed hypotheses in the West that we are about out of oil, gas, and coal and that CO2 emissions from fossil fuels are going to cause environmental catastrophe.

The Chinese high-speed rail system does not work well and is losing money badly despite many potential riders, who cannot afford the service however.  Similarly, the high speed rail systems Obama and Biden have backed will not have enough riders and will have to be heavily subsidized or they will have virtually no riders.  The IT bubble we had burst in the early 2000s was really a combination of IT, optical communications, and biotechnology, all of which were heavily pushed by the federal, state, and local governments in the United States without proper regard for the development of actual markets.

The Chinese have the GDP growth advantages of starting at a very under-developed level and can play rapid catch-up by copying the technology already developed in the West and especially in the United States and they have a very large population.  It is not reasonable to laud their system as the equal of ours when their per capita GDP is still so low compared to ours.  Their GDP growth numbers may be largely meaningless in any case.  There are reports of complete cities built with the effort counted toward GDP, but which are unoccupied and of low-quality construction.  You have to ask how much of the Chinese dry-wall exuding noxious fumes of H2S went into their home market construction.  One has to pay attention to the surveys that say that successful entrepreneurs want to emigrate to the West in huge numbers.  There are many reports of companies seeking high rates of growth getting in way over their heads with borrowed money and owners running to escape their creditors.  Remembering that their creditors are essentially one and the same as the Communist Party, this is the equivalent of running from the Mafia loan shark in many cases.

The return on investment for much of the construction in China does not look good.  This is not a surprise.  The Chinese Communist Party's five-year plans do not pay much attention to return on investment and that will mean their claimed growth will not be sustainable.  They are not planning anywhere near as well as the Japanese did and yet the Japanese plans failed.  At the moment, Chinese exports are falling due to a combination of depressed buying power in the West and more inexpensive labor competition from Southeast Asian and Latin American countries.  The Chinese currency, while still undervalued, is appreciating.  The Chinese also face a major problem with their rapidly aging population, thanks to their ill-conceived one-child policy.

Oddly, Andy Stern expresses no concern about the miserable working conditions of Chinese workers and their very low pay.  He is not infuriated that they are not allowed real labor unions.  He is not bothered by the recent increase in strikes and labor disputes, which the Chinese Communist Party uses the police to suppress.  Apparently, Andy Stern desires communism more than labor union representation.  We must remember Obama saying he always sought out Marxist professors, that Van Jones was a Communist Party member, and that Obama's Communications Director Anita Dunn had wet dreams about Chairman Mao.  Her husband, Bob Bauer, served as Obama's personal lawyer, then his White House Counsel, and now serves as a Democrat Party adviser on election and campaign finance law.  Obama's Manufacturing Czar Ron Bloom is another admirer of Mao.  Mark Lloyd, the Diversity Czar of the FCC, admires socialist Venezuelan Hugo Chavez for his control of that country.

Obama and most of his friends are essentially Marxist-Leninists.  Most of America's labor union leaders are Marxist-Leninists, as is Stern, and this makes one very uneasy about the 36.2% of government workers being led by such union leaders.  Obama and his friends, including those in the labor unions, want a top-down imposition of value choices and controls supported by a huge central planning bureaucracy which can supply a home with power for many an academic Marxist-Leninist and their well-indoctrinated graduates.  They want to impose this system with a flurry of Executive Orders, because it is too messy to have to win elections and fill Congress with one's supporters.  The present, hardly free market system, is still much too free for their taste.  Andy Stern is truly Obama's close friend and ally.  He has made his agenda very clear in his Wall Street Journal Opinion.  He has also revealed Obama's plans in the process.

Politicians Use Big Government to Enrich Themselves

For a politician, the temptation to increase the power of government is huge.  The more power the government has and the wider the range and scope of its activities, the more power the politician has both to acquire wealth and to satisfy his growing lust for power.  Absolute power corrupts absolutely.  Absolute power makes a man wealthy.

Presidents, Senators, and Congressmen can threaten an industry, or an entire sector of the economy, or even a single business with legislation which will hurt its profitability.  This threat may go no further than talk, or it may be approved by a committee of Congress, or it may become law.  At any stage of the process of producing a potential law, politicians can line up as saviors of those threatened and hold out their hands for campaign rewards or they can wait for a company or industry to approach them asking how the industry or company can save itself.  Savvy companies and industries often shower politicians with benefits such as hiring a relative or providing campaign contributions to head off any such attack upon them.  Politicians are very wily about using this process to extort money from private companies and the wealthy.  The Democrats have been very effective in using their power to hurt Wall Street to extract huge campaign contributions from Wall Street financial firms using this technique, resulting in Obama's huge contributions in 2008 and further large contributions to many of  the Democrats in the 2010 election.

Alternatively, a company or industry may be seeking to use its relationships with politicians to win subsidies or to win protections from competition.  Immoral companies and industries will pay for this.  For instance, many health insurance companies and drug companies were eager for ObamaCare to pass, since it would bring more business to them if many more people were to use more medical benefits.  There are large agricultural businesses eager for farm crop and land use subsidies.  Corn growing farmers and ethanol refiners are often strong lobbyists for the ethanol subsidies that make no environmental or energy sense.  The so-called green energy companies stand in line for billions of dollars of grants from the Department of Energy.  Peter Schweizer's book Throw Them All Out shows that a number of wealthy Obama supporters won $16.4 billion of Department of Energy green energy grants as a huge return on their campaign contributions.  Wall Street companies are eager for special assess to Federal Reserve money or for protection against losses under Too Big to Fail.  Congress' and the President's ability to change the rules of business also entice labor unions to make huge contributions in exchange for favors.

There are other ways this process of stirring the pot with threats against industries and companies can yield wealth for our legislators.  If they simply talk about making a change of law that will hurt or help a company or industry, they can drive that industry's or company's stock prices up or down or they may affect the cost of a commodity.  Knowing that they are about to talk down or talk up a company, they can use that information to make almost certain money on purchases or short trading of its stock.  They can talk about taking harmful action, but then back off, having bought much stock when the price was depressed.  A last minute provision or even a last minute complete bill such as ObamaCare or the Dodd-Frank financial industry control bill may have stock value implications that Senators and Congressmen or a select few of them know about.  They can use this information to make a stock investment killing.  In the case of bills that give major rule-making power to executive agencies, those government insiders with information on those rulings can make a killing.  For members of the Executive Branch, this is illegal, but it is also commonly not discovered.  Congressmen are often informed about how these rulings are going and there are no laws against their using this insider information.

Now, it is not the fact that they are becoming rich men and women which is the worst of this.  It is the fact that each of these possibilities to become rich are actual incentives to cause them to do harm to others that goes way beyond their having campaign advantages or having an advantage in making money that most investors do not have.  These power and wealth incentives mean that bill after bill that is claimed to be passed for the general welfare is actually passed despite its hurting most Americans.  Or, if it is not passed, it is only because companies or industries or wealthy people have been successfully extorted.

We need to bear in mind that all of these nefarious activities are the result of big government.  They are inherent in the size and scope of government which allows it to be such a business and labor market threat that such activities are not just enabled, but they are inevitable.  One hears talk of campaign finance reform, but that inhibits freedom of speech and has rightly been ruled by the Supreme Court to be a violation of the Constitution.  There is now talk of banning Congressional insider trading either entirely for serving members of the Congress or at least when Congress is in session.  There is also talk of making Congressmen set up blind trusts.  Congress has to pass any such reform bill and history tells us that they will only pass a bill with many loopholes and that will only happen if there is a major popular outcry.

All this mischief and grief occurs because we have allowed the government to greatly exceed its very limited constitutional powers.  This is why we have a government that panders to special interests and which has every incentive to ignore the general welfare.  The General Welfare is served by protecting our equal, sovereign individual rights to life, liberty, property, and the pursuit of happiness.  Government is the problem, because it has become gigantic government.  While the People retain the nominal control of this government, the reality is that its activities are too complex and too all-pervasive in our society for most of the voters to follow them and to understand them.  Government by the People can only be effectively managed by the People when that government is of highly limited power and scope.  That was the condition that the People wisely mandated with our Constitution.  Because we have ignored these wise limits, we now have a government of the special interests, by the special interests, and for the special interests.  Abraham Lincoln's description of our federal government, while much preferred, has become a practical lie.

Some Nations See Individual Rights Differently

How very strange is the viewpoint of many of the world's other nations.  Syria has just been chosen by the nations of the United Nations to serve on a UNESCO committee that deals with human rights violations.  Despite killing 3,500 protestors to the ruling Syrian regime, Syria was just reappointed to serve on the UN Committee on Conventions and Recommendations.  This committee examines the violations of nations of human rights in education, science, and communications, among other areas.  The United States just recently froze its funding of UNESCO because it had admitted Palestine as a member.  Terrorist nations are thought by many U.N. countries to be best put in charge of monitoring human rights violations.  More rational observers will clearly recognize that means the U.N. views human rights as a farce.

The United States backed draft resolution in the United Nations condemning Iran of human rights violations passed by a vote of 86 - 32.  But of the ten largest recipients of our foreign aid, only Israel voted for the resolution, while the two largest aid dependents, Afghanistan and Pakistan, voted against the resolution.  Iraq did not vote at all, while Egypt, Jordan, South Africa, Kenya, Ethiopia, and Nigeria all abstained.  As is commonly the case, Russia and China voted against us.  India, which used to usually vote against us, but more recently has been more likely to see its interests as more consistent with ours, also voted against the resolution condemning Iran.  Our ever greater commercial ties with India and China have not caused either nation to become consistently rational in its foreign policies.  Such additional lines of communication as exist with the people of these countries has not led to their understanding that tyrannical governments are morally repugnant and make bad friends.  Once again, many nations of the world express their disdain for individual rights.

The defense of individual rights has to be maintained with vigor around the world and within the United States.  While Obama, Biden, Pelosi, and Reid have little regard for many of our individual rights, they are trending in the direction of the crueler and more ruthless nations of the world, but are not yet a match for them.  We need badly to choose American leaders who will work to establish the many essential individual rights that are now so widely ignored even in the United States.  When the United States lives up to its own standards of rights as proclaimed in its Declaration of Independence and as sustained by the Constitution, perhaps many of the people of the many rogue nations today will also be inspired to assert their own individual rights.  The best foreign aid we could offer would be a better example of devotion to individual rights for Americans.

ClimateGate 2.0, Climate Uncertainties, and Funding Bias

The latest release of e-mails among the prominent catastrophic man-made global warming scientists at the University of East Anglia and their like-minded scientific colleagues around the world has further established many scientific blunders, uncertainties, political maneuverings and biases among this cabal of scientists.  There is evidence for each of the following shortcomings:

1)  More uncertainty among these scientists than one would expect given their claim that the science is settled.

2)  Admission that the global climate computer models are wrong about how they handle cloud cover.  Since cloud cover effects are by themselves easily large enough to account for all the claimed global warming, this is a serious fault.

3)  Acknowledgment that the global climate computer models are tuned to match the climate results on the ground claimed by the catastrophic man-made global warming advocates.  This is a very serious charge, since if you have a data set of 100 data pairs, a 100th order polynomial will fit that set exactly.  The computer models have thousands of adjustable parameters which provide huge leeway for tuning the desired outputs to past climate results over a few decades.  The computer model advocates have explicitly met such criticisms in the past with denials.  The fact that the models have claimed to match the results of the last few decades in many cases, but have failed to provide predictive matches to the last 12 years or so, is very telling as well as the admission in the e-mails.  One also does not hear of studies for which a given computer model that has been tuned for recent times gives accurate climate results for say the Little Ice Age or the Roman Warm Period.

4)  There is an admission that many studies have failed to find the computer model predicted warming of the troposphere at altitudes of 8 to 12 km or more and there is only one questionable study that claims to have observed such a warming.  If this computer model prediction is wrong, then the science of the computer models is wrong.

5)   There is a claim that the solar incident infra-red radiation is underplayed by the alarmists, who rely on one paper which is contrary to several other published papers.  This is important because it is critical to know how much of the incoming solar radiation never reaches the ground due to absorption in the atmosphere.  Increased water vapor and CO2 will also reduce incoming solar radiation thereby providing a cooling of the ground temperatures as explained in my analysis in a chapter of Slaying the Sky Dragon - Death of the Greenhouse Gas Theory.

6)  Admission that the long term temperature reconstructions by the catastrophic man-made global warming advocates were not on a solid footing.  Errors were actually so large that comparisons of such data to computer models was of little help if the errors were acknowledged.  The Little Ice Age, the Medieval Warm Period, the cool period of the Dark Ages, the Roman Warming and other periods of natural temperature changes are all awkward for those claiming that the recent warming is both unusual and caused by man's emissions of CO2.

7)  Admission that Steve McIntyre may be right about how the statistical handling of the temperature data may have been the artifice source of the hockey stick temperature reconstruction of Mann.

8)  Admission that none of the climate computer models performs adequately in predicting sea surface temperatures and water vapor concentrations.  This is critical because water covers 71% of the Earth's surface and all of the supposed predictions of CO2 warming actually are supposed to cause more warming due to the inducement of higher water vapor concentrations. The water vapor increase will produce more water vapor warming than the CO2 causes warming by itself according to their theory.

9)  There is no need for any one global climate computer model to be correct. Does this not admit that the science is not understood, since otherwise one would give a reason for why that model was incorrect and why its non-compliance with other models or reality was not important?  The outlier model might be the only good one, if one does not really understand the science.  It is interesting to note that when one of the models is run multiple times, it gives many different answers.  One wonders how many outlier results are thrown out because they simply are not believed in.  Many of the IPCC models were not run enough times to even understand how poor the reproducibility was.

10)  There are many discussions of cherry-picking data sets or papers that showed more warming or more harmful effects to demonstrate a more alarming result.  This was true of dramatic events such as storms, advice to emphasize iconic animals, plants, and geographic areas, ways to reconstruct past period temperatures, and advice to ignore some climate extremes of the Medieval Warm Period such as droughts.

11)  Concerns that the effects of the sun were not given enough strength in the models and if they were, they would greatly reduce the claimed effects of greenhouse gases.

12)  Concern that contrary to the models, water vapor over land in the tropics may not have actually increased as CO2 increased.

13) Admission that the melting of the Kilimanjaro glacier was not caused by global warming.

14) Concern that European forests are thriving as CO2 concentrations increase, rather than being harmed by acid rain caused by increased CO2 concentrations.

15)  Puzzlement that there is a minimum in the temperature in the lower troposphere which cannot be duplicated in any computer model that allows surface warming.

16)  Phil Jones whose paper on the urban heat island effect minimizes the size and variability of such an effect, though studies in the U.S. and China show it to be very large, claims that there is no change in the heat island effect in New York, London, and Vienna in the 20th century!  He also claims the oceans have warmed at a rate consistent with the land warming, which is a claim many would say is false.

17) There is more discussion of seeing that only those friendly to the catastrophe hypothesis are chosen for significant positions in the writing of the U.N. IPCC reports and reviewing them.

18)  There are more indications that politics is strongly driving the desired scientific outcomes and that those who are not so committed to the political and pro-government stand of the alarmist viewpoint are untrustworthy and to be generally excluded.

19)  There is further discussion of the need to hide original and raw data from scientists and the public not deemed to be dependable to the cause even if publications and research based on such data was funded with government money by countries such as the United States and the United Kingdom that have freedom of information acts on the books.

20)  There is a claim that officials at the U.S. Department of Energy are complicit in hiding original weather station data.  This is important, because the primary claim to warming in the last few decades is mostly supported by land-based data from weather stations.  The rural stations do not show such temperature rises as are claimed by various government agencies of the U.S., the United Kingdom, and many other countries around the world, however.  The claims of warming are generated by massaged data by interpolation schemes over regions with no weather stations (or whose station data was ignored) or by large corrections made or not made to data from stations affected by urban and suburban sites and with sitings that do not meet required specifications.  The urban sites tend to have rising temperatures due to man's local activities and structures.  Scientifically, it is very important to be able to examine the raw data and to have independent scientists examine whether any adjustments are performed correctly.  Of course, it may well be that an honest scientific assessment would conclude that there is no way to even use such data given the size of the temperature shifts for which one is looking.  It is my contention that no data from any station that does not meet specifications should be used and no data from stations affected by urban heat island effects should be used.

21)  Claims that the governments want them to tell a very strong story of climate change caused by man with no caveats.  The team of advocates has a duty to see to it that this is the case and to serve as active proponents of the political message.

22) Discussions that advocates should talk up the desirability of stable climate and avoid discussing the costs of cutting back on the use of fossil fuels and the sacrifices people would have to make to do so.


I have been pointing out that the science behind catastrophic man-made global warming was largely wrong for years now.  One of the most common rebuttals I am given by its proponents is that if the science were so wrong, then many conscientious and eager to prove themselves climate scientists would be aligned with me and making their careers in doing so.  Many of these same critics of my viewpoint that the hypothesis of catastrophic man-made global warming science has failed, constantly claim that those who are skeptics and deniers are all in the pay of the fossil fuel companies.  That claim is wrong, but catastrophic man-made global warming proponents establish the idea that they think scientists will deliver the desired results of their funders.  This may be a projection of their own shortcomings upon others.

Let us use their claim that scientists are so vulnerable and apply it to the many climate scientists who support the hypothesis of catastrophic man-made global warming and ask who funds them.  The answer is that they are all funded by governments and the U.N., all of which have a decided interest in having reasons to increase the powers of their governments or the U.N. and increase controls over the activities of individuals and companies.  That the government of the U.S. is so biased in favor of this hypothesis and is so determined to declare it settled science, is backed by the e-mail referred to above in which the U.S. Department of Energy was noted to be happy not to make original station data available to scientists not under their funding control.  There is huge pressure on all scientists in climate research to provide the results the funding governments want, or their funding will be cut off.  There is no comparable replacement source of funds, so almost everyone toes the line or is simply naively influenced by the argument from authority because so many do toe the line.

The U.S. government is doing more harm to science than Stalin did with his Lysenko perversion.  Contrary to what government would have you believe, there is no settled climate science on catastrophic man-made global warming, except that any possible warming is greatly exaggerated, as are its consequences.  We must always remember that man has always prospered most when the Earth was warm.  This has been most clearly the case since the Holocene period began.

Principled Versus Pragmatic Government

There are essentially two competing choices in government:

1) A government which is highly limited by principle in power and scope to the purpose of protecting the equal, sovereign rights to the individual to life, liberty, property, the ownership of one's own mind and body, and the pursuit of personal happiness. This is the legitimate government envisioned by the Declaration of Independence and the Constitution.

2) A so-called pragmatic government not restricted by principle to a limited scope and with few powers which is inclined to bestow special privileges on special interests. Such a government may be a democracy, an oligarchy, a one-party state, or a dictatorship and it must of necessity trample the rights of the individual because our personal interests are too diverse for government to foster all of our interests. It must pick which interests it will favor and which it will suppress.  It violates the principle that government should do no harm.  This is the kind of government we now have.

The media generally has failed the People because it does not believe in the principles of limited government and of the equal, sovereign rights of the individual. Rather than being watchdogs of our freedoms, they are mostly advocates of further infringements upon individual rights. 

The Democrat Socialist Party scoffs at the very idea the Constitution limits the powers of government and that the Declaration of Independence is even a document with standing in the U.S. Pelosi, Biden, Obama, Waxman, Waters, and many other Democrats have literally confirmed this scoffing attitude with explicit comments.

Many Objectivists and Libertarians are fond of saying the Republicans are just as bad as the Democrats.  The Republicans very frequently violate the Constitution, but they do sometimes try to use it to reduce the rate of government expansion and they rarely scoff at it. It is mostly Republicans who have tried to get ObamaCare declared unconstitutional and have tried to defund it in the House of Representatives.  Such fairly stout defenders of freedom and individual rights as there are, are in the Republican Party. The valuable Tea Party movement is rightly mostly voting for and supporting Republicans, while trying to reform the party.  I can think of no one in the Democrat Party who is a stout defender of freedom beyond a few points of narrow focus, such as opposing DOMA, DADT, and supporting abortion rights. As for Bush being as bad as Obama, that is a gross exaggeration. He was not fiscally responsible, but he was not in a league with Obama in the amount spent and certainly not as bad at just throwing away the money spent.

If we cannot educate the public to demand principled and legitimate government (as defined in the Declaration of Independence), then there is no path to good government. It must of necessity degenerate into special interest politics such as we have now. Those who want to stop the discussion of principles will never matter a wit to substantial improvement in the idea of good government. It can be helpful to get people to listen to principled discussion to point out the absurdities into which pragmatic, special interest government falls and to ridicule it. I do this frequently on my blog. But in the end, no major improvement in government will come about unless the People believe in the equal, sovereign rights of the individual and understand what those rights are.

The special interest nature of our federal government is well-illustrated by some examples in this Washington Examiner editorial, Washington conducts public business for private gain.  This paragraph is one of the more interesting from this editorial:

You'd think that Obama would have locked up the environmentalist vote with the billions of tax dollars that he's sent their way already [before denying the Keystone XL Pipeline]. We learned additional details about that corrupt process this week when it was revealed that more than $16 billion of the $20 billion spent by Obama's clean energy loan program went to companies linked to former members of his White House staff, prominent corporate campaign donors, and campaign contribution bundlers. The U.S. Constitution begins with the words "We, the people," and goes on to frame a government that is supposed to be their servant. It's time Washington was reminded of who serves who.

The editorial also addresses the fact that our Congressmen tend to enrich themselves with insider information and the power of their positions.  This is the natural state of any government that views itself as pragmatic and does not have any respect for the rights of the individual and the limited government it requires as embodied in the American Principle of our Declaration of Independence and our Constitution.

Obama Begs Asian Nations to Buy American Goods

Ending his trip to Southeast Asia and his home country of Indonesia, Obama has just given a speech about th many wonderful things he is doing to increase exports that support American jobs.  At the end of the speech, he claims he is willing to do everything he can to see to it that American businesses can succeed. This means he should:

1) Greatly lower the corporate tax rate, which is the highest in the developed world.

2) Repeal ObamaCare with its high taxes on health care, its requirements that the young subsidize the old and the healthy subsidize the unhealthy, and its effect of raising health insurance costs so high more and more American companies are no longer providing it as benefit and fewer and fewer people can afford to buy in on their own.

3) Repeal the minimum wage law which keeps under-educated Americans from getting on the job training so they can acquire job skills worthy of higher pay.

4) Stop draining the private sector of its wealth and income to grow the government parasite ever larger.

5) Stop Dodd-Frank and Sarbanes-Oxley which cause American companies so much financial grief.

6) Stop trying to prevent coal mining and the use of coal to provide low cost and dependable electric power.

7) Stop trying to prevent oil and gas field development.

8) Stop preventing the building of oil and gas pipelines which can cheaply deliver their products to industry to make goods for the American economy and for export.

9) Transfer the unpaid tax collecting and filing duties from employers to employees, who then can evaluate the work involved in tax compliance and taxes paid better when they vote.

10) Stop using the government to interfere with freedom of contract in favor of union extortion schemes both in employer-employee agreements and in forcing companies to choose union-controlled states over those which are not union-controlled.

11) Stop mandating that expensive and unreliable so-called green energy must be used for electricity generation, thereby hurting the coal and natural gas industries and every industry and every household that uses energy.

12) Stop subsidizing and requiring the use of ethanol blends in gasoline which drives up the cost of doing business through increased fuel cost, increases our food costs and deprives us of food to export, and leaves consumers with less to spend on other goods and services.

13) Stop the nonsensical EPA declaration that CO2 is a pollutant and the NASA and NOAA claims it is a likely cause of catastrophic man-made global warming.

14) Get the government out of education so we can have the best educated workforce in the world and young people who will not be so indoctrinated into believing that socialism is good and commerce is bad.

15) Reduce FDA, FCC, FAA, SEC, NLRB, OSHA, IRS, and many other agency's direful impact on business efficiency.

16) End the death tax that kills so many small and medium sized American companies or at least sets them back badly upon the death of a primary owner.

17)  Reduce the capital gains tax so the the American economy can be sped up and more efficient.

18) Flatten the income tax so personal commercial success is punished less and people have more income to invest in businesses.

19)  Stop general government overspending which forces the Federal Reserve to purchase the Federal debt bonds, thereby flooding the economy with money and causing the cost of goods and services to go up.

20)  Stop spending more than tax revenues can pay for so that our economy is not hobbled with high taxes to pay interest on the ever-growing government debt.

21) Foster recognition that businessmen are providers of goods and services that the purchasers believe improve their lives, which is why they voluntarily buy them.  Thus, businessmen are bringing value to others and doing good.  When people do good their government should not be trying to vilify them and punish them.

Do these things and the President of the United States will not be running around the world begging other countries to do business with us. The people who run companies in those countries will be swarming to the U.S. to ask our companies to do business with them. People want to work with the best and we can be the very best if the government gets off our backs.

Private Pipeline Sector Runs Around Obama Block

In an interesting development following the Obama block on the Keystone XL Pipeline project which was to bring oil from the Alberta tar sands and the North Dakota/Montana Bakken oil shale formation down to Cushing, OK and on to Houston/Port Arthur, TX, two private companies are seeing to it that the pile-up of oil in Cushing has a pipeline route to Houston.  The Seaway Pipeline has carried imported oil from Houston up to the pipeline central routing facilities in Cushing, OK for years.  That pipeline was owned half by its operator, Enterprise Products Partners, LP of Houston and half by ConocoPhillips.  Enterprise Products Partners has long wanted to reverse the direction of flow to carry the comparatively cheap and plentiful oil in Cushing to Houston area refineries which have been hurting for oil due to diminished supply from Venezuela and Mexico.  The pile-up of increased American and Canadian oil in Cushing has caused that oil to sell for as much as $28 a barrel less than the world price.  ConocoPhillips did not mind this because it operates oil refineries in Oklahoma which were making a fortune on refining the under-priced oil there.

But, ConocoPhillips just sold its 50% ownership in the Seaway Pipeline for $1.15 billion to Enbridge Inc. and the pipeline flow direction will now be turned around.  This is part of a massive trend to correct the U.S. pipeline system for the new internal sources of oil and the overall increase in oil production in the U.S. and Canada.  Enbridge is spending $300 million to add new pump stations and to modify old ones.  By the 2nd quarter of 2012, the pipeline will be pumping 150,000 barrels a day of crude oil from Cushing to Houston. 
By mid-2013, the owners believe they may be able to move up to 400,000 barrels of oil a day with pumping improvements.  The rejected Keystone XL Pipeline was to carry up to 700,000 barrels of oil a day from Cushing to Houston.  The Wall Street Journal specualated on Thursday, 17 November that the reversal of the Seaway Pipeline might remove the commercial justification for the segment of the Keystone XL Pipeline from Cushing to Houston.  I believe there will still be good reason to build that additional pipeline segment, at least if the Hardisty, Alberta to Steele City, Nebraska pipeline segment is ever approved.  Perhaps a capacity of a bit less than 700,000 barrels a day will make more sense, but the projected 2013 400,000 barrel capacity of the Seaway Pipeline project could easily be matched.

The reason for all this activity is because U.S. oil production, which had been declining steadily since 1985 and generally since 1970, began to increase in 2009.  Production bottomed out in 2008 at 5 million barrels of oil a day and has increased by 10% since, despite every effort of the Obama administration to halt new oil production projects.  Our exports of refined petroleum products have doubled in the last three years, with us now exporting 2.6 million barrels a day of oil products.  We are now exporting 15% of the gasoline and diesel refined in the U.S.  The main market for our exported Gulf Coast refined products is the rapidly growing Latin American market.

Meanwhile, Obama has also blocked the development of the Utica Shale Oil Formation in the large Wayne National Forest in Ohio claiming concerns about fracking effects.  A mineral lease auction scheduled for December 2012 has been canceled.  There are already nearly 1300 oil and gas wells in that forest and the concerns about hydraulic fracturing are highly bogus.  But no excuse to prevent private sector job creation is too flimsy for the Obama cutthroats.

Obama Supporter Buffett Benefits from Keystone XL Denial

Surprise, surprise!  Obama supporter Warren Buffett is a huge beneficiary of the Obama denial of the Keystone XL Pipeline, which was to carry Alberta tar sands oil to Gulf Coast oil refineries and siphon off up to 65,000 barrels a day of oil from the Bakken oil shale formation in North Dakota.  The Burlington Northern Santa Fe Corporation which runs the BNSF Railway Company became a Berkshire Hathaway, Inc. subsidiary on 12 February 2010 in a huge purchase by Warren Buffett.  Between them, the BNSF Railway and the Canadian Pacific Railway are the biggest railway systems able to serve the Bakken Oil Shale Formation with both incoming supplies and moving oil to refineries or to other pipeline terminals.  The BNSF Railway through its connections with the Canadian Pacific and Canadian National Railways can also expect considerable business moving the Alberta tar sands oil to U.S. markets.  This may be a very lucrative case of crony mercantilism between Obama and one of his biggest supporters.

The map of the BNSF Railway system is shown below:

It is well situated to move crude oil from the Bakken oil shale formation to the Houston, Texas and Port Arthur, Texas area or to the Cushing, Oklahoma super-pipeline terminus.  Because it has extensive feedlines to the Canadian Pacific and Canadian National Railways along the North Dakota northern border, it is also well-positioned for considerable traffic from the Alberta tar sands which were the primary reason for the Keystone XL Pipeline.  Who knew the the many lines built to move North Dakota wheat to market would one day also be vital for moving oil to market?

Let us get a sense of the size of this business.  By the end of this year, there are plans to be drilling 1,800 new wells in the Bakken oil shale formation.  Each new well requires 23 rail-cars of drilling pipe, frac sand, clays, and other supplies.  At the end of 2010, the daily oil production was already 300,000 barrels and most of it has to be moved by truck to rail-head terminals and then by rail to markets or to pipeline terminals.  A 118 car unit train can move 68,000 barrels of oil.  It is thought that Bakken oil production may reach 700,000 barrels a day by 2013, so even just a delay on the go-ahead to build the Keystone XL Pipeline until after the 2012 election in 2013 will mean a huge increase in railroad business before the pipeline can be finished.  There are projections that Bakken may produce 1 million barrels of oil a day by 2015.  Whether the Keystone XL Pipeline is ever built or not, the Buffett-owned BNSF Railway will make good money from both the Bakken and the Alberta Athabasca oilsands.

BNSF Railway is constructing sidings and turnouts and improving its yards along the railways expecting increased Bakken oil shale formation traffic.  BNSF is investing $3.5 billion in 2011 to improve its infrastructure.  The expenditures are primarily focused on its mid-continent routes, which are the ones needed to move oil from North Dakota to the Gulf Coast.  They also move its profitable coal traffic.  It was already moving several unit trains a week from the Bakken to Stroud, Oklahoma (near the pipeline center of Cushing, Oklahoma), to Bakersfield, California, to St. James, Louisiana, to New Mexico and to Texas in early 2011.  They are spending $450 million to acquire 227 locomotives and another $350 million on freight car and other equipment.  Another $300 million will go to terminal, line and intermodal expansion and efficiency projects.

A new multi-user rail terminal is being built in Port Arthur, Texas to allow oil refineries there to be supplied by heavy rail traffic.  It is to be opened in the second quarter of 2012 with generous crude-oil storage tank capacity.  Oil may also be moved to Corpus Christi, Texas refineries as well.  One thing rail transport does is allow more flexibility of destination for oil shipments compared to pipelines.  The railroads cost more to move the oil than do pipelines, but they can offer more options to get the oil to where the demand is greatest.  They can also ramp up delivery capability much faster than pipelines can because they do not have the long environmental delays!  One could say the environmentalists groups are the allies of the railroads.  It is also easier to tune the delivery of oil from a field depending upon the cost of production there and the cost of oil on the world market.  This is important because Bakken shale oil costs more to extract than say much of the Saudi Arabian oil, so it is conceivable Saudi Arabia might sometime flood the market with cheap oil, so that production of Bakken oil should be cut back.  For now, however, Bakken oil is much cheaper than oil on the world market.

The expansion of the railroads is a good thing, but it is not right if one of the considerations in denying the Keystone XL Pipeline construction permits was that the pipeline would hurt Obama's friend Warren Buffett.  Given the extent of crony mercantilism in the Obama administration, it is hard not be suspicious.

Democrat Socialism, Energy, and Pipeline Hysteria

Obama's dictate that the private sector not create 20,000 construction jobs now and up to 465,000 future jobs in the U.S. by denying the Keystone XL pipeline, is a highly enlightening illustration of the environmental and global warming hysteria of many of the supporters of the Democrat Socialist Party.  Let us examine this pipeline and energy hysteria more closely and learn.

In 2009, there were 148,622 miles of oil and oil product pipelines in the U.S.  There were also 1,539,911 miles of natural gas pipeline in the U.S.  The Keystone XL project wanted to add 1,661 miles of oil pipeline to this massive network of pipelines.  Some of the major pipelines now in existence are shown in the map below.

The green-coded pipelines are major oil pipelines, the red lines are major gas pipelines, and the blue lines are product pipelines.  The Keystone XL pipeline will bring 830,000 barrels a day of Canadian tar sand crude oil from Alberta down through Montana, South Dakota, and Nebraska to link to an already operating 298 mile pipeline segment across Kansas to the important storage and transit center of Cushing, Oklahoma.  It will then build a segment from Cushing on to the Gulf Coast oil refineries at Port Arthur and Houston, Texas.  These Gulf Coast refineries have been hurting recently due to reduced production of Mexican and Venezuelan oil by the inefficient national oil companies of those countries.  This supply of dependable Canadian oil will be a godsend to these important oil refineries.  The pipeline would be built at an actual construction cost of $7 billion for the portion in the U.S. by TransCanada to supplement a smaller pipeline capacity of 435,000 barrles a day already in use bringing Canadian tar sands oil to oil refineries at Wood River and Patoka, Illinois near St. Louis with a branch to Cushing, Oklahoma.  The Keystone XL and present TransCanada pipelines are shown in the map below:

The red and blue lines are the existing lines, while the dashed lines are the new pipelines to be built.  One of the objections to the pipeline is that it crosses the Ogallala Aquifer (misspelled in the US State Dept. map) shown in blue.  This aquifer is found in 8 states and is a very important aquifer.  If you examine the map of major pipelines above, you will find that a great many pipelines already cross the Ogallala Aquifer.  These pipelines were built with older pipeline technology and without anywhere near the critical examination given to the Keystone XL Pipeline project.  Most general oil spill concerns by environmentalists would be better directed at the 149,000 miles of older oil pipelines.  For instance, many of these pass under riverbeds at a depth of 8 feet, while the Keystone XL Pipeline will be buried 25 feet below riverbeds.  The Keystone XL Pipeline will have the latest in protective coatings and be built with more corrosion resistant and stronger steel than many older pipelines.

The single environmentalist objection that may have some merit is that the Keystone XL pipeline will cross the permeable sands of the Sand Hills in Nebraska where the Ogallala Aquifer is particularly shallow and vulnerable.  After the Obama administration decision to delay a decision on the pipeline until 2013, TransCanada has just announced that it is considering several route changes to avoid or minimize the transit distance of the pipeline in the Sand Hills.  The Sand Hills cover the northern and western areas of Nebraska.  At least two of the existing major oil pipelines shown in the upper pipeline map above cross both the Sand Hills and the Ogallala Aquifer under them.  If this were a problem, the State Department should have made an early decision against the pipeline and demanded it be rerouted then.  If this is a critical environmental matter, the existing pipelines through the Sand Hills and over the Ogallala Aquifer should be shut down.

My expectation is that this is not that critical an environmental matter because there are already huge natural oil and gas deposits in and around the Ogallala Aquifer.  Check out the shale oil deposits map below:

We see that the Palo Duro, Niobrara, and Excello/Mulky shale oil deposits are co-located with the Ogallala Aquifer.  There are also extensive traditional oil fields in the Texas panhandle and western Oklahoma.  The southwestern area of Kansas has many natural gas fields.  Oil oozes to the surface in many areas of Texas and Oklahoma and yet the water supplies are rarely contaminated.  Many major oil fields are crossed by rivers and yet there is no significant pollution of those rivers.  Over-active imaginations can create many nightmare situations, but they actually require more unusual circumstances than one would expect to occur.

While one would hope that at worst a rerouting of the Keystone XL pipeline will still allow it to be built, one can count on the environmentalists to continue their many other objections and to do everything they can to prevent the pipeline.  One of their biggest beefs is that they claim that much CO2 is emitted in extracting the bitumen and oil from the tar sands in northern Alberta.  Concern about this is based on the fallacious hypothesis that CO2 emissions will result in catastrophic global warming.  In any case, improved extraction methods have reduced the emitted CO2 by 38%.

There are other environmental concerns expressed pertaining to water use in Canada, but these are concerns we should leave to the Canadians.  In any case, they are going to proceed to develop their tar sands projects and will sell the oil to the Chinese if we refuse it.  Still another environmentalist objection to the import of Canadian oil from the tar sands is that it is an obnoxious oil to refine.  Our Gulf Coast refineries will be using it to replace Venezuelan oil in large part and Venezuelan oil is also a nasty oil to refine.  Our refineries are quite capable of handling nasty oil, while satisfying the EPA.

Among the great advantages of the Keystone XL pipeline is that it skirts the western edge of the Bakken shale oil formation in North Dakota, Montana, and Saskatchewan.  It will be able to take on 65,000 barrels a day of the light and sweet crude oil from the Bakken formation.  This oil is highly valued by oil refineries since it is very easy to process.  There is a very great need to add to the pipeline capacity for transporting our own Bakken shale oil to the refineries of the Gulf Coast.  It is estimated that the pipeline will save $36 million to $146 million a year in costs for Bakken oil.

Oil and gas related jobs have risen by almost 200,000 since 2003, making this one of the few bright spots in the U.S. economy.  This has happened despite consistent opposition from Democrat Socialist environmental groups.  U.S. oil production has risen for the first time since the mid-1980s and natural gas output has far exceeded expectations to the point that natural gas prices are now very low.  Gulf Coast refiners would save $473 million a year if only 400,000 barrels a day of oil were delivered to them. 

TransCanada has already invested $2 billion in the Keystone XL Pipeline and is suffering from a lack of income from money it has borrowed due to having already waited for 33 months to get approval.  The total investment by TransCanada will be $13 billion, but with other related investments by other companies, the total investment may come to $20 billion.  The Wall Street Journal reports that there will be 131,000 jobs created during the construction phase with 13,000 working on the actual construction of the pipeline.  During the construction phase, state and local tax revenues will increase by $600 million.  After construction, the pipeline will increase property tax revenues by $5.2 billion over its lifetime.

The environmentalist objections, to which the Obama administration has acceded, are mostly bogus and wrongheaded.  Greater problems exist with already installed pipelines, though such problems are exaggerated.  The one problem with some justification is going to be addressed with a route change now, but this was mishandled and could have been dealt with long ago so that jobs would be created now in the private sector.  Even this objection to the Sand Hills transit is likely exaggerated and misplaced in that other pipelines with older technology and practices already transit the Sand Hills and the underlying Ogallala Aquifer.

More fundamentally the environmentalists are objecting to the use of inexpensive and reliable energy sources while falsely claiming that we can meet our needs with so-called green energy.  Never mind that the so-called green energy is expensive and unreliable and whenever any particular project is considered it almost always meets determined opposition from environmentalists.

Obama denied the TransCanada application to build the Keystone XL pipeline until at least 2013 because the Democrat Socialist Party is fundamentally opposed to man improving his lifestyle and security through his voluntary cooperation with others in the private sector.  It demands control of every individual's value choices and the power to squelch their independent choices is maintained by demanding that it micromanage our individual lives.  Gaining control of all of our commercial, livelihood activities requires complete control over our use of energy.  This is why the EPA, State Department, Dept. of Energy, NOAA, and NASA are all united with environmentalist groups everywhere to keep Americans from having inexpensive and reliable fossil fuel energy by any means possible.  This is why, despite constant rhetoric about being focused on creating jobs, this Obama administration is only in the business of killing private sector jobs.

It is by no means clear that the great effort of TransCanada to create many jobs throughout our economy and the Canadian economy will succeed in the end.  We are far better off with Canadian oil taking the place of Venezuelan and Saudi Arabian oil from the reliability of supply standpoint.  It is much wiser to enrich Canadians than to enrich Hugo Chavez or the Saudi Princes.  Besides just being better people, the Canadians will spend much more of their added wealth on American goods and services than will Venezuelans and Saudis.

Our having the option of a larger supply of Canadian oil always gives us the chance of acquiring less expensive oil and that gives us a general advantage throughout our economy.  Manufacturing and transportation costs will come down and that will make us much more competitive in international markets.  Americans will be able to raise their standard of living due to lower costs, more jobs, and increased exports.  These are very serious advantages and we should be adamant in opposing the Democrat Socialist Party in its consistent efforts to deny these advantages to Americans.  While many followers of that party are simply thoughtless and ignorant, there are many also who are simply mean-hearted, brutal, and too envious to think straight.

There are plenty of Democrat Socialists who do not have the personal ethics to refrain from doing great damage to their fellow man.  Indeed, this knowledge that they lack such personal ethics is part of the reason they project such maliciousness of intent upon everyone in the private sector.  Strangely, they block knowledge that if this were the nature of man, then the actions of man in the government sector would be as bad, indeed worse.  Because it is mostly Progressive Elitists who are drawn to roles in government, we generally do observe avarice, mean-heartedness, and ruthless suppression of others at the heart of our over-grown and unconstitutional government.  Obama is their leader and he must depart in 2012 if our economy and lifestyle are to improve.

Thoughts on Veteran's Day

I was drafted out of graduate school to serve in the Army during the during the late phase of the Vietnam War. We had not been winning that war early, but were winning in its later phases under General Abrams.  Being involved in this war was a strange experience.  We had won a war that academia and the media thought we had lost and eventually the American People bought into that wrong assessment.  Then we did leave dishonorably, having abandoned the South Vietnamese to the North Vietnamese Army when our Congress shut off all support, but the USSR and China continued support to North Vietnam.  Our national interest had not been great enough to get into the war and to use a draft to provide the manpower to fight it, but once you tell a nation you have their back because you believe in freedom and the universal rights of the individual, you do not abandon them in a dark alley surrounded by the enemies of freedom and the individual.

America has not lacked for brave and dedicated men and women to save it from foreign threats to our security.  What it has lacked is enough Americans who understand what legitimate government is.  Our Declaration of Independence defined that as government that protects the equal, sovereign rights of the individual to life, liberty, and the pursuit of happiness.  At that time, it was well-understood that this implied property rights, freedom of contract, and the right to earn a living were all secure from government interference.  The Constitution was a mandate from the People to the government that it had very limited powers for the purpose of protecting our individual rights and for dealing with foreign governments and persons.  Its internal powers were very few and limited to a postal service, post roads, patent protection, copyright protection, and establishing a uniform system of weights and measurements.

Unfortunately, we Americans have corrupted that legitimate concept of government in favor of a tyranny that offers a veneer of material security at the cost of our individual rights.  The real battle for our freedom today is not with foreign powers, though that matters, but with our own understanding of why we need limited government and a healthy and vibrant private sector in which we each choose our own values and have the freedom of association to cooperate with whomever we want for the purposes we want on a voluntary basis.  Government is always a last resort because government dictates values and suppresses the individual whenever it exceeds the very limited function of protecting the rights of the individual to life, liberty, property, the ownership of one's own mind and body, and the pursuit of individual happiness.  Government cannot deal with the complexity and uniqueness of the individual, which is why it can only function usefully to protect our basic rights.  It is the private sector that allows us to be who we are and accommodate to the fact that we are all very different, have many needs to cooperate with one another, and have unique hierarchies of personal values and goals.  To understand this is to understand the American Principle.

I salute the Americans who have served in our armed forces.  But, even more critically, I salute those Americans who understand and stand for, the American Principle.  May you ever Stand Sure!

No Decrease in Missing Jobs Over the Last Two Years

After nearly four years of a recessionary period, the normally reported unemployment rate means very little due to people giving up on finding a job.  Of course someone unemployed might become self-employed, but with the many hassles our governments, local, state, and federal have chosen to create for businessmen, not everyone has the stamina, or is it the foolhardiness, to become an employer.  Let us check up on the real unemployment situation through October 2011.

Once again, I will calculate the real number of missing jobs in our economy compared to January 2000 when jobs were plentiful and pay and benefits were sufficient to entice many Americans to choose to work.  The unemployment rate was then 4.04% and there was a shortage of only 5,689,000 jobs, though much of that was really normal turnover as people chose to change jobs or career paths.  The number of missing jobs can be calculated by assuming that 67.49% of Americans would want jobs now if they were available and offered good compensation as they did in January 2000.  Due to the bursting of the dot com bubble in the early part of the first decade, by December 2005 the real number of missing jobs had climbed to 6.98% and that rate of missing jobs was almost identically the same when the current recession started.  As we shall see, the number of missing jobs soared higher in this recession and the jobs recession has never ended.  We are now missing 21,171,000 jobs, which is almost identical to the number of missing jobs in October 2010 and more than the missing job number of November 2009.  There has been no progress in decreasing the number of missing jobs in the last year or the last two years.

The real unemployment rate is that given in the last row of the table.  In July it was 13.21%, in August it was 13.31%, and in September it was 13.28%.  In other words, there was no significant change and no improvement in the jobless rate in those three consecutive months.  There appears to be a small improvement in October, though the statistical significance of any one month is usually low.  The rate for October 2011 was slightly improved to 13.06%.  There are no fewer missing jobs than in October 2010, however.  At the October rate of improvement, this jobs recession will never end.  This is hardly surprising given that the Obama administration remains as determined as ever to pursue policies contrary to the needs of employers and the economic freedoms they require and have every individual right to require.

Let us examine a chart of the number of missing jobs for the last 11 years:

There are more missing jobs at the start of November 2011 than there were in November 2009.  Two more years of Obama and we have only fallen backward on the jobs situation.  The man who wants to harm whole American industries such as the coal, oil, and natural gas industries and all those industries dependent upon these industries, knows everything there is to know about how to keep America from recovering from a severe recession.  The man who gave us ObamaCare against the People's wishes and against the interests of employers and the man who penalized good financial institutions and most borrowers with Dodd-Frank financial "reform", knows how to squelch investment and employment like no one else.  Repeated stimulus efforts, quantitative easings of bad loans or the federal debt, subsidies of weak industries such as the green energy industries, and bailouts of overspent state and local governments have had the certain effect of weakening the private sector at the expense of a parasitic cabal of governments and crony mercantilists.

Americans want to work and to create jobs, but at every turn, government policies are mounting to discourage the creation of jobs.  These sorry government policies have proven very effective in creating this jobs stasis.  A massive decrease in government regulations, mandates, subsidies, corporate and investment taxes, and spending is the only way out of this mess.  Obama and the Democrat Socialists have a big government and anti-private sector agenda which will not allow any jobs creation to occur.  The result is exactly what a rational observer would expect: A never-ending jobs recession.

North Dakota Oil, Truckers, Railroads, Jobs

Government energy policy is presently directed at propping up unsustainable companies such as Solyndra which provide expensive and unreliable so-called green energy.  Solyndra and others of these companies subsidized by the government have already failed with massive losses of government loan or loan guarantee money. 

Meanwhile, in the private sector, the massive Bakken shale oil formation in North Dakota, Montana, and Saskatchewan is producing oil so cheaply that it is selling for $30 a barrel less than Brent crude, which is used as a world oil market benchmark for light, sweet crude oil.  The Bakken crude oil is of high quality and much in demand by refiners.  North Dakota's oil output is now 450,000 barrels a day and may double by the 2015.  This output is exceeding the capacity of present oil pipelines and more are being built, but will not come on-line until 2013.  At that time, production is still expected to exceed pipeline capacity.

The Bakken formation is large and fleets of oil tanker trucks are used to consolidate 70% of the oil from the wells to railroad terminals.  This has led to a boom for the railroads between northwest North Dakota and Louisiana.  Trucking outfits are booming, oil terminals are being built, and it is expected that two trains, each with about 104 oil tanker cars, will be filled each week.  The North Dakota Pipeline Authority thinks it will have 700,000 barrels a day rail terminal capacity by next year.

Moving oil by train, rather than pipeline, adds $5 to $10 per barrel of cost.  But, this highly desirable light sweet crude oil is so inexpensive that adding this cost to the price still leaves it in great demand.  The demand is so great that trucks, truck drivers, and tank cars are in short supply.  Truckers are being supplied with free housing as well as high pay.  Local trucker Lunderby Trucking, of Sidney, Montana, grew from 1 truck to 18 in the last year.  Lease prices for tank cars have doubled in the last year and a half to about $1,000 a month per car.  Tank car manufacturer's have backlogs and no available cars.

Rational people have to wonder why our government threw away more than half a billion dollars on Solyndra so it could expand its production just before it collapsed.  Similar large sums are being spent on numerous other so-called green energy company subsidies.  Now, this is not a proper function of government and the stupid "investments" are no surprise.  But if it were an appropriate function of government to invest in energy production, it would be more rational to help companies produce more pipelines and more tanker cars!  Fortunately, we have a private sector, that though robbed of blood by many government parasites, can still perform such functions in a manner to preserve our individual liberties and to provide us with real power, relatively inexpensively and definitely reliably.  And because it can, North Dakota has the lowest unemployment rate in the country at 3.5%!

Obama, get out of the way and allow the private sector to provide for our energy!