Germany Becomes the New Poster Child for Climate Change Hypocrisy

Climate hypocrisy is nothing new.

Celebrities cruise around the world in their private jets, eating filet mignon while telling you to pack a salad and bike to work to reduce your carbon footprint.

So, color me not at all surprised that Germany, a vocal critic of the U.S.’ decision to exit the Paris climate accord, is preparing to abandon its 2020 climate targets.

Strong economic growth is a critical reason why Germany is very likely to miss its target.

Germany has an aggressive plan to cut its greenhouse gas emissions 40 percent below 1990 levels by the year 2020. Last November, a leaked document from the country’s Environmental Ministry projected the country would miss the mark by 8 percent without additional action.

In other words, even with generous subsidies for renewable power, the Germans would have to implement some form of economy-restricting policy to curtail emissions. So much for the “go green and grow the economy” mantra.

The Environmental Ministry said the failure would be “a disaster for Germany’s international reputation as a climate leader.” One would think a stronger economy would be cause for celebration, not demonization.

Germany’s abandoned 2020 targets are the latest domino to fall in what is failed international climate policy. Many proponents of action argue that even though the Paris climate accord is nonbinding, with no repercussions when a country fails to comply with its nationally determined contributions, the agreement was an important first step.

The parties that have entered into the Paris accord sure have a funny way of showing they’re committed to it.

Despite bashing the Trump administration’s decision to withdraw from the Paris accord, all of the industrialized countries are not on schedule to meet their respective targets. Germany is not alone in the European Union.

An article published last summer on Nature.com argues that the EU “faces a big gap between words and actions.”

Even if the United States and the rest of the developed world meet their intended targets, it wouldn’t make any meaningful impact on global temperatures. Carbon dioxide reductions from the developing world, many of whose people are still living without dependable power, are necessary to move the climate needle.

However, developing nations set targets so lax that they likely won’t change any behaviors. Paris proponents can brag all they want about China taking the lead in solar power, but turn a blind eye to the massive amounts of new coal power generation moving forward in China, India, and the rest of the developing—and, in some cases, developed—world.

The Financial Times recently reported, “Between January 2014 and September 2017, international banks channeled $630 [billion] to the top 120 companies planning to build new coal plants around the world, according to research by campaign groups, including the Rainforest Action Network, BankTrack, and Friends of the Earth.”

And yet, those who want stringent climate mitigation say the Paris targets are only approximately one-third of what is needed to allegedly keep global warming in check.

Paying attention to what you perceive as positive action on climate (e.g., Paris, subsidizing renewables) while ignoring the realities of new coal build, retiring nuclear power plants, and global economic growth around the world is a curious strategy.

“Do as I say, but don’t pay attention to what I actually do” is the trademark of climate change policy. The Trump administration took a different approach and told it like it is: Paris is a costly, meaningless non-solution.

The reason countries such as Syria, Iraq, Iran, and North Korea have entered into the accord is not an indication of global commitment to act on climate. It is an indication of how toothless and meaningless the agreement is.

The rest of the world can act high and mighty on climate, but when the rubber meets the road for action, it’s a different story.

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New Offshore Drilling Plan Will Reverse Obama Restrictions, Unleash US Energy Dominance

America is moving forward in its march toward energy dominance, and the Trump administration just took an important step forward in achieving that goal.

In unveiling its draft five-year Outer Continental Shelf leasing plan on Thursday, the Interior Department is reversing the Obama administration’s “Keep it in the Ground” anti-energy policy.

An abundance of untapped energy lies beneath America’s ground and off the coasts. For six years, America has been the world’s largest petroleum and natural gas producer, supporting more than 10 million jobs and contributing more than $1.3 trillion to the economy.

The increase in energy supplies has lowered prices for households and businesses. Families are saving hundreds, if not more than $1,000 each year on electricity bills and home-heating costs, and paying less at the gas pump.

It also means companies around the country devote less money to paying energy bills and more to investing in labor and capital.

All of these benefits have accrued to Americans, despite the fact that the Obama administration made a majority of America’s coastal waters off-limits to natural resources exploration and production.

In fact, 94 percent of federal offshore acreage is off-limits to development. The United States is the only country in the world that has placed a majority of its territorial waters off-limits to natural resources extraction.

Until now, that is.

Interior Secretary Ryan Zinke’s draft plan is the first part of a multiyear process that would make more than 90 percent of the total federal acreage available, which includes 98 percent of the undiscovered, technically recoverable oil and gas resources in the Outer Continental Shelf.

As highlighted by Interior’s press release:

The Draft Proposed Program … includes 47 potential lease sales in 25 of the 26 planning areas—19 sales off the coast of Alaska, seven in the Pacific region, 12 in the Gulf of Mexico, and nine in the Atlantic region. This is the largest number of lease sales ever proposed for the National Outer Continental Shelf Program’s five-year lease schedule.

The 47 potential lease sales top the number of sales listed in President Ronald Reagan’s two submissions of 41 and 42.

At several points in time, offshore drilling was not such a partisan issue. When President Jimmy Carter, a Democrat, made his 1979 energy speech, he said, “We will step up exploration and production of oil and gas on federal lands.”

As a result, the Carter administration’s Interior Department proposed 36 lease sales. As recently as 2013, both Democratic senators from Virginia offered legislation to open parts of the Atlantic to offshore development.

It’s understandable why.

Offshore drilling is a critical component of the Gulf of Mexico economy, one of the limited areas where offshore activity takes place in federal waters.

Recognizing that offshore resource exploration is systematically safe, the energy industry has a very strong relationship with the seafood and tourism industries. In fact, Louisiana hosts a Shrimp and Petroleum Festival each year.

Despite the Deepwater Horizon incident that adversely affected the Gulf environmentally and economically, there was a broad recognition among these three industries that the blanket drilling moratorium was bad policy and bad for the region as a whole.

The economic benefits of realizing America’s true energy potential could be significant. Opening the Atlantic and Pacific Outer Continental Shelves and the eastern Gulf of Mexico could create more than 800,000 jobs by 2035.

Increased supplies, which could equate to as much as 3.5 million barrels of oil per day, would lower prices for families.

Furthermore, federal and state governments would stand to benefit as well, since increased production would increase revenues from bonus bids (for new leases), royalties, rents, and increased economic activity.

By 2035, the federal government could collect more than $200 billion in revenue. With the country burdened with massive amounts of federal debt, policymakers should welcome the potential for revenue generation.

No one knows where oil prices will be once the Interior Department finalizes the plan. Therefore, it’s difficult to fully project where the industry will invest.

Nevertheless, the market will determine what areas the oil and gas companies will pursue. The federal government should not stand in its way.

It’s encouraging to see Interior take a hatchet to a long-standing barrier to energy dominance and improved economic well-being.

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5 Ways Energy Dominance Can Bolster Trump’s National Security Strategy

The Trump administration’s new national security strategy emphasizes the importance of a strong economy to enhance national security.  “America’s central position in the global energy system as a leading producer, consumer, and innovator,” the report says, “ensures that markets are free and U.S. infrastructure is resilient and secure.”

As a global energy leader already, the United States has demonstrated both the broad and household economic benefits of increased access to natural resources, innovation, competition, and choice.

President Donald Trump’s first national security strategy highlights five ways for the U.S. to improve its energy standing in the world: reduce barriers, promote exports, ensure security, attain universal access, and further our technological edge.

Some detail on how Congress and the Trump administration have a unique opportunity to capitalize on U.S. energy abundance:

Reduce barriers. In response to Trump’s executive order on “Promoting Energy Independence and Economic Growth,” the Environmental Protection Agency, Department of Interior. and Department of Energy released reports documenting agency actions that burden the safe development of domestic energy sources.

In many respects, these documents provide a useful road map to rolling back costly, ineffective regulations and expanding opportunities for new resource development and energy infrastructure. To provide the energy industry with more certainty, Congress should codify changes so they can’ be undone by an administration that is more hostile to energy production.

Promote exports. Providing more energy choices to both producers and consumers will generate jobs and grow the economy. Expediting the permitting process for liquefied natural gas exports is a commonsense reform that would improve national security by increasing global energy supplies and reducing the ability of any one nation to use its control of energy resources to threaten U.S. interests.

Embracing energy dominance should  include imports, whether  imported oil, ethanol, or solar panels. Cheaper imports would make American businesses more competitive and successful.

Ensure energy security. Many policies that harm consumers have been implemented in the name of improving energy security. Government planning, quotas, subsidies, tariffs, and other market-distorting policies have promoted favoritism, not energy dominance.

Competition and diversification can improve energy security, and the Trump administration should reduce impediments that thwart the private sector’s ability to properly protect the electricity grid and energy infrastructure.

Attain universal energy access. Energy touches every aspect of our lives, from providing a daily sense of comfort to powering the global economy. So having an energy platform that provides choices at competitive prices would only enhance the well-being of families and businesses across the country.

Given America’s energy wealth, the U.S. should be a major supplier to meeting energy needs in the developing world, where more than 1.2 billion people (17 percent of the global population) don’t have access to reliable electricity.

Further America’s technological edge. As demonstrated with smart drilling technologies, innovation unlocks new resources, supplies affordable power, and generates new employment opportunities. Government favoritism, however, is one major source of pumping the brakes on technological innovation.

When the government picks winners through the tax codes or bails out uneconomical power plants, companies focus more on obtaining the next handout and less on reducing costs to be competitive in a market without subsidies.

A variety of energy sources and technologies provide Americans with dependable electricity and transportation fuels. Whether it is conventional fuels, nuclear power, renewable technologies, batteries, or a concept still developing in a lab, America’s entrepreneurial spirit will drive innovation forward without the help of Washington.

As my Heritage Foundation colleague Nile Gardiner writes, Trump’s national security strategy reasserts American leadership.

Thanks to the free market, the U.S. is already a global energy leader. These policy reforms will ensure that America stays there.

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Tax Reform Bill Would Give Back Alaskans Control of Their Energy Future

In a compromise tax reform package, Senate and House negotiators have agreed to include language to open Alaska’s coastal plain for energy exploration and production.

If passed, the bill would finally give Alaskans more control over their energy future by opening the Arctic National Wildlife Refuge (ANWR).

The entire Arctic refuge comprises roughly 19 million acres on Alaska’s North Slope region. Through the 1980 Alaska National Interest Lands Conservation Act, Congress and President Jimmy Carter set aside 1.5 million acres on the North Slope (known as Section 1002), recognizing the possibilities for oil and natural-gas development.

The energy potential of Section 1002 is enormous, while the industry’s footprint would be minimal.

The U.S. Geological Survey estimates that between 4.3 billion and 11.8 billion barrels of technically recoverable oil lies underneath Section 1002. Importantly, the Geological Survey also notes, “nearly 80 percent of the oil is thought to occur in the western part of the [Arctic National Wildlife Refuge] 1002 area, which is closest to existing infrastructure.”

Oil produced in refuge could relieve potential technological challenges that the Trans-Alaska Pipeline System faces if the current supply becomes too low.

The area is not a designated wilderness area and is without sunlight for 15 percent of the year.  The Department of Interior highlights that the refuge’s Section 1002  has no trees, deep-water lakes, or mountain peaks.  The entire refuge gets fewer than 1,000 visitors per year.

Once companies drill exploratory wells, there will be a better sense of just how much oil and natural gas the area holds.  The surface-area footprint would be limited to 2,000 acres—a bit more than 1/10th of 1 percent of Section 1002 and 1/100th of 1 percent of the whole refuge.

Opponents of domestic-energy production have criticized the decision, claiming that oil prices are too low to generate any interest in the area. The market will determine the economic viability of Alaskan resource development, not politicians in Washington.

Furthermore, no one has any idea where oil and natural-gas prices will be 10 months from now, let alone in 10 years.

For instance, in July 2008, the Wall Street Journal asked a variety of energy experts to anonymously predict where the price of a barrel of oil would be at the close of the year. Answers ranged from $70 to $167.50 a barrel. Instead, a number of market factors caused the price to plummet to $44.60.

Whether it’s a market crash, a natural disaster, or technological innovation, there are unknowable circumstances that exist in energy markets.

To opponents, however, there is never an opportune time to increase domestic natural-resource production. Whether oil prices collapse or the price at the pump surpasses $4 per gallon, environmental activists argue opening new areas to exploration will take too long for the fuel to reach the market to have any impact on prices.

Energy policy should not be predicated on what analysts or members of Congress think is going to happen, but rather, on opening access and establishing the framework for competitive markets, while ensuring the protection of property rights and the environment.

Opening access now will ensure that businesses can be more responsive to changes in prices, rather than waiting for Congress to react after prices become politically uncomfortable.

Importantly, Alaskans should be in charge of the decisions to develop new resources. Alaskans understand that energy development, tourism, recreation, and wildlife protection harmoniously co-exist.

Oil revenues have been a critical component of the state’s economy for decades, as have the tourism, seafood and timber industries.  As Sen. Lisa Murkowski, R-Alaska, recently tweeted, “There is no question that development & environmental protection can and do exist in Alaska.”

It’s long past time that Congress empower the people who have a direct stake in the wise management of land, natural resources, and the environment.

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Trump Can Use Liquefied Natural Gas to Bolster Key Alliances. Here’s How.

The Trump administration has spoken adamantly about U.S. energy dominance.

To outsiders, the phrase “energy dominance” may elicit fear and conjure images of Russian-like influence in using energy for political manipulation.

The reality in this case, however, is just the opposite: American energy dominance will help our allies break free from Russian dependence. By pursuing new energy export opportunities, the United States will reap both economic and geopolitical dividends.

In the past half-decade, the U.S. has become the world’s largest producer of natural gas. When combined with liquefaction technology, natural gas can easily be traded across oceans.

American exports of liquefied natural gas are surging. The Trump administration can make good on its promises to expand liquefied natural gas exports by expediting the licensing process, allowing U.S. liquefied natural gas to reach more partners.

The United States has the opportunity to bolster security relationships in many regions with energy exports, including Asia, India, and Eastern Europe.

With access to energy being more secure for these allies, they will be less vulnerable to manipulation by countries such as Russia or Iran, two major suppliers of natural gas.

Japan and South Korea are two American allies and trading partners who share our democratic values, as well as our interest in limiting China’s power.

They are also both heavily dependent on foreign sources of energy. Japan supplies only about 6 percent of its own energy needs, forcing it to turn to other countries, many in the Middle East, to power its economy. In recent years, liquefied natural gas’s share of Japan’s energy supply has increased to 44 percent in 2014.

South Korea is even more dependent on foreign sources than Japan, importing 98 percent of its needed energy supplies and is the second-biggest importer of liquefied natural gas, behind Japan.

India is another key strategic partner of the United States, with a population increasingly dependent on foreign energy. Given that India is the fastest growing major economy, and poised to overtake China as the most populous nation in the next decade, its need for energy will only increase.

India also shares strategic concerns with the United States on issues, such as China’s growing power, as well as the need to keep open access for trade in the Indian Ocean. Consequently, the U.S. and India have been moving closer together over the past decade in our defense cooperation.

The opportunity to export U.S. liquefied natural gas to India would help buttress our strategic cooperation in two ways. First, it would provide a more reliable energy stream for a major strategic partner by decreasing India’s reliance on unstable and autocratic regimes, such as Iran’s. By extension, if India were no longer as dependent on Iranian gas, then India would be less affected by sanctions on Iran, and better positioned to push back again Tehran’s support for Islamist terrorism.

Yet another region in which U.S. supplies of liquefied natural gas can better support our alliance relationships is Europe. There, U.S. liquefied natural gas exports are helping our allies diversify their energy supply chain.

For instance, as noted in The Heritage Foundation’s 2018 Index of U.S. Military Strength, “a Lithuanian energy company signed an agreement to buy [liquefied natural gas] directly from the U.S.” in June 2017.

Poland, meanwhile, has begun importing U.S. liquefied natural gas. In November 2017, Polish Oil and Gas Company Group announced a five-year contract to import U.S. natural gas.

Russia has utilized its position as prime energy supplier to many nations in European Europe to apply diplomatic and economic pressure. Russia has threatened to, and at times has, cut off energy supplies to European nations, and often charges higher rates to nations in Eastern Europe than to those in Western Europe.

U.S. liquefied natural gas exports are already having an important impact on lessening Russia’s control over Europe’s energy supply, which is good news for the U.S. and our allies.

As companies increase shipments abroad and grow their export capacity, Congress and the administration should remove the Department of Energy from the permitting process altogether, as the agency is an unnecessary obstacle.

Further, streamlining the Federal Energy Regulatory Commission’s review and permitting process and empowering the states to conduct the permits would create more efficient options for permitting, reducing the time frame in which American liquefied natural gas reaches the market.

Liquefied natural gas represents a unique opportunity to stimulate U.S. job growth, while bolstering our strategic position around the world.

Congress needs to pursue measures to further expedite the licensing of liquefied natural gas exports while diplomats and military planners examine the additional leverage that the U.S. and our allies will gain by being less dependent for energy on hostile regimes.

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