As a response to a question posed by the Secretary of the Department of Energy, the National Petroleum Council has produced as massive 422-page draft report on  "Facing the Hard Truths about Energy: A comprehensive view to 2030 of global oil and natural gas." Compiled by 350 experts and more than 1,000 participants involved in all phases of energy production, the report references and reinforces the legitimacy of carbon offset trading.

While these are people who must be sensitive to the political needs of those who control the regulators of their industry, this failure to study and/or recognize the futility of managing carbon dioxide emissions will result in billions of dollars of wasted overhead, including the design, build-out and operation of useless facilities that do nothing to move the United States to a position of energy independence.

In fact, this very report claims that the United States cannot achieve energy independence in the foreseeable future and energy independence is actually undesirable as it may upset our international trading partners. Thus, it seems, our great nation is forever doomed to deal with the geopolitical machinations of the oil producing and exporting countries, and those whose wealth is bound to oil exploration, recovery, refining, transportation and marketing. Yes, the very people

who wrote the report.

"U.S. and global energy security depend upon reliable, sufficient energy supplies freely traded among nations. This dependence will rise with the growth required in international oil and natural gas trade, and may be increasingly influenced by political goals and tensions. These trends are prompting renewed concerns about U.S. energy security."

"These energy security concerns have spurred calls for the United States to become totally self-sufficient in energy supply, often referred to as “energy independence.” This concept is unrealistic in the foreseeable future and incompatible with broader foreign policy objectives and treaty obligations. Policies espousing “energy independence” may create considerable uncertainty among international trading partners and hinder investment in international energy supply development."

While I listened to the entire meeting presentation and read the report, I was struck by one, almost inconceivable, thought: the thousand or so bright people involved in producing this report have overlooked one key assumption regarding the management of carbon dioxide emissions in an environmentally-friendly fashion. The flawed assumption is that we actually do need to manage these emissions while credible hard science has clearly indicated that carbon dioxide management methods will have little or no effect on the global weather.

Some of the report's highlights...

Fortunately, the world is not running out of energy resources. But many complex challenges could keep these diverse energy resources from becoming the sufficient, reliable, and economic energy supplies upon which people depend. These challenges are compounded by emerging uncertainties: geopolitical influences on energy development, trade, and security; and increasing constraints on carbon dioxide (CO2) emissions that could impose changes in future energy use. While risks have always typified the energy business, they are now accumulating and converging in new ways.

Policies aimed at curbing CO2 emissions will alter the energy mix, increase energy-related costs, and require reductions in demand growth.

And the part to which I strenuously object is a section sub-titled "Policy Avenues to Limit Carbon Dioxide Emissions."

Direct regulation: CO2 emissions could be constrained by imposing limits on emissions from individual sources, such as power plants and industrial facilities.

Economists generally regard this sort of regulation as inefficient, because it does not allow for the likelihood that some sources may be able to achieve emissions reductions more economically than others. Encouraging greater emissions reductions by the sources that can do so most economically would yield a larger total reduction for a given total cost, but this can be difficult to accomplish with fixed regulatory targets.

Cap-and-trade regulation: Cap-and-trade systems seek to overcome the inefficiency of direct regulation by providing a market-based mechanism to encourage those who can reduce CO2 emissions most economically to do so. Regulators must determine which sources will be covered by the system and the total amount of emissions that will be allowed within a specified period of time. Permits to emit a given amount, such as one metric ton of CO2, are then allocated or auctioned. The permits can be traded, encouraging sources that can eliminate emissions for less than the market price of a permit to do so, while sources for whom emissions control is more costly can buy permits from others.

Fundamentally, a cap-and-trade system establishes a level of emissions, and the marketplace then establishes the cost.

Carbon taxes or fees: A tax or fee could be levied on CO2 emissions, establishing the cost of emissions while letting the market then establish the emissions level. In principle, any level of emissions reduction that could be achieved with a cap-and-trade scheme could also be achieved with taxes or fees.

A tax or fee system has the disadvantage that the level of resulting emissions is not established in advance. A tax or fee system also poses the challenge of how to equitably return the revenues to the economy.

What a choice: a bogus cap and trading system which would be rife with Enron-style corruption and manipulation or higher taxes for the consumer. There you have it folks, in clear black and white (and red)... these large oil and energy producers will continue to pollute -- because they can buy carbon offset credits from people who have mitigated lesser pollution -- all with the taxpayer and consumers picking up the cost.

One fallacy not addressed by the system is that the pollution mitigation in one geographical area does nothing to improve the pollution in another geographical area. It only makes sense to statisticians who keep the numbers.

If you want to see the system in action today, one need only look at the Southern California Air Resources Board and their emission trading plan: trading emission credits from sources like dry cleaners who controlled the emission of perclorethylene and triclorethylene emissions from their cleaning machines and sold to gross polluters like the oil refineries located in the South Coast region below Los Angeles.

"The South Coast Air Quality Management   District (SCAQMD) started the Regional Clean Air Incentives Market or RECLAIM on January 1, 1994. This market is the oldest of the local emission trading markets.

And the RECLAIM program has not been without its trading scandals as witnessed by an investigative expose of the program which can be found here

One additional fact of supreme importance: the oil people are talking about a non-threat like carbon dioxide emissions when they really should be concerned with such killer pollutants like sulfur dioxide and nitrogen oxides which produce sulphuric acid and nitric acid rains when mixed with moisture in the air. Deadly to breathe and the source of major respiratory health problems.

While I have no comment on the rest of the report's conclusions, I am dismayed that someone did not stand up and say something about the bogus carbon dioxide issue and deal with the greater threats of SOx (Sulfur Oxides) and NOx (Nitrogen Oxides) and various heavy metal contaminants.

The following illustration from the SCAQMD explains why the scheme is actively being pursued by various parties. The government gets an increase in revenue in the form of taxes on higher prices which have been imposed on the consumer. The bureaucracies get funding and fines from enforcement activities. The polluters get to pollute with the costs of credits being passed along to the consumers. The brokers make a substantial amount of money buying, packaging and selling credits. The consumers get screwed as usual. Oh, I forget, Al Gore gets money and publicity -- and possibly another shot at the presidency.


What can YOU do?

Let your elected officials know that you understand the scheme and if they continue to pursue this scam, you will not return them to office. In fact, don't vote for any politician promoting this bogus proposition.

If you are still skeptical about those who claim global warming is induced by carbon dioxide emissions, you owe it to yourself to investigate the truth. Rather than provide you with resources which will be immediately labeled something bad by the opposition, I leave it up to you to seek the truth. Leave me an e-mail, if you want my input.

We are living in perilous times. We do not need our elected officials to increase their control over the public and continue to bleed the taxpayer just to enrich the already wealthy and politically connected.

Be vigilant and hold your public officials to a higher standard. Dump those who do not exhibit the requisite intelligence and display an allegiance to America and the source of its power: the people.

-- steve 

A reminder from OneCitizenSpeaking.com: a large improvement can result from a small change…


NPC Report Executive Summary

NPC Full Report

NPC Webcast of Meeting

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