agriculture * food * energy * environment
Friends of the Earth, a grassroots global environmental group that represented in 77 countries, said Friday that a pipeline carrying oil from Canada into the U.S. that ruptured and spilled more than a million gallons of oil into the Kalamazoo River in Michigan is the kind of danger that could happen if a proposed oil pipeline is built in Nebraska.
According to Friends of the Earth, crews are attempting to prevent the spilled oil from reaching Lake Michigan, where it could cause catastrophic environmental damage.
Before this week’s oil spill, federal officials criticized Enbridge, the Canadian tar sands oil giant that owns the pipeline, for ignoring corrosion that compromised the pipeline’s integrity, according to Friends of the Earth.
TransCanada, another major Canadian tar sands oil company, is currently seeking Obama administration approval for its proposed Keystone XL tar sands oil pipeline, which would travel 1,700 miles from Canada to refineries near Houston. The company is also seeking a safety waiver that would allow it to use thinner-than-normal steel and pump oil at a higher-than-normal pressure.
The Keystone XL pipeline would cross 71 rivers and streams including the Ogallala Aquifer, putting water supplies and the environment at risk. The Ogallala, which is the nation’s largest aquifer, provides drinking and agricultural water for eight states and supports one-fifth of the wheat, corn, cotton, and cattle produced in the United States.
“This disastrous oil spill in Michigan is yet another wake-up call to the tragic impacts of our oil dependence,” said Alex Moore of Friends of the Earth.”Coming on the heels of the Deepwater Horizon disaster in the Gulf of Mexico, this spill reinforces the need for us to build a clean energy economy, not more pipelines.”
Moore said Enbridge and other oil companies like BP have “deliberately cut corners on safety without respect for the people or communities they put at risk.”
“President Obama should take a long, hard look at this disaster and deny a permit for the Keystone XL pipeline, the next on Big Oil’s wish list,” Moore said.
For months, Moore said ranchers, environmentalists, and public health advocates have challenged TransCanada’s plans to build another pipeline to carry the “world’s dirtiest oil from Canada’s tar sands into the United States.:
“ The Environmental Protection Agency recently handed the State Department’s draft analysis of the proposed pipeline’s environmental impacts a failing grade, in part because it failed to address the dangers the pipeline would pose to communities along its path,” Moore said.
The Renewable Fuels Association (RFA) said a newly released reportfrom the Development Prospects Group at the World Bank, concludes that “…the effect of biofuels on food prices has not been as large as originally thought, but that the use of commodities by financial investors (the so-called “financialization of commodities”) may have been partly responsible for the 2007/08 spike.” This is the same World Bank whose “leaked” report in 2008 erroneously blamed biofuels for 75 percent of the commodity price spike. According to RFA, John Baffes and Tassos Haniotis, authors of the report entitled “Placing the 2006/08 Commodity Price Boom into Perspective”, argue that energy prices, and as noted above speculation, played significant roles in the non-energy commodity price spikes seen in the recent past.
“We conclude that a stronger link between energy and non‐energy commodity prices is likely to have been the dominant influence on developments in commodity, and especially food, markets. Demand by developing countries is unlikely to have put additional pressure on the prices of food commodities, although it may have created such pressure indirectly through energy prices.”
The authors, according to RFA, also conclude that it is unlikely biofuels played a significant role because they do not represent a large percentage of worldwide grain and oilseed use.
According to RFA, the authors point out: “Yet, worldwide, biofuels account for only about 1.5 percent of the area under grains/oilseeds. This raises serious doubts about claims that biofuels account for a big shift in global demand. Even though widespread perceptions about such a shift played a big role during the recent commodity price boom, it is striking that maize prices hardly moved during the first period of increase in US ethanol production, and oilseed prices dropped when the EU increased impressively its use of biodiesel. On the other hand, prices spiked while ethanol use was slowing down in the US and biodiesel use was stabilizing in the EU.”
RFA said it has long challenged those seeking to blame ethanol and biodiesel production for the run up in commodity prices. During the height of the debate, the industry has always held that record oil prices had much more to do with commodity and food prices than biofuel production.
“In reversing course, this World Bank report reaffirms the marginal role biofuels play in world commodity and food prices,” said RFA President Bob Dinneen. “The RFA has long noted that ethanol production has continued to increase while corn prices have now returned to normal levels. Volatile oil prices, speculation, and adverse weather conditions all played far more significant roles in driving commodity prices to record and near record prices. This report should silence critics in the food processing industry, the livestock industry, on Capitol Hill, and anywhere else that sought to portray ethanol as the boogeyman. With this phony food and fuel discussion put behind us, perhaps a real conversation about America’s energy future can ensue.”
The report also came to some interesting conclusions about the role of energy prices and speculation in commodity prices, Dinneen said, including:
• “Fiscal expansion in many countries and lax monetary policy created an environment that favored high commodity prices. The depreciation of the US dollar—the currency of choice for most international commodity transactions— strengthened demand (and limited supply) from non‐US$ commodity consumers (and producers). Other important contributing factors include low past investment especially in extractive commodities; investment fund activity by financial institutions that chose to include commodities in their portfolios; and geopolitical concerns, especially in energy markets.”
• “We conjecture that index fund activity (one type of “speculative” activity among the many that the literature refers to) played a key role during the 2008 price spike.”
New research by Bloomberg New Energy Finance this week shows that fossil fuel subsidies are 12 times greater than for renewables.
According to the analysis, governments of the world are spending substantially more on subsidizing fossil fuels than on renewables and biofuels.
“In all, governments of the world provided approximately $43-46 billion to renewable energy and biofuels technologies, projects, and companies in 2009,” according ot the research. “This total includes the cost of renewable energy credits or certificates, tax credits, cash grants, feed-in-tariffs and other direct subsidies. The amount does not include more “upstream” support, such as subsidies to corn farmers to grow feedstock for use in U.S. ethanol plants, nor does it include any value transfer from carbon cap-and-trade schemes. The $43-46 billion stands in stark contrast to the $557 billion the research shows was spent on subsidizing fossil fuels in 2008, as estimated by the International Energy Agency last month.”
“One of the reasons the clean energy sector is starved of funding is because mainstream investors worry that renewable energy only works with direct government support,” said Michael Liebreich, chief executive of Bloomberg New Energy Finance. “Setting aside the fact that in many cases clean energy competes on its own merits – for instance in the case of well-situated wind farms and Brazilian sugar-cane ethanol this analysis shows that the global direct subsidy for fossil fuels is around [twelve] times the subsidy for renewables. And that is without taking into account the enormous security and public health costs of fossil fuels, as well as the appalling pollution catastrophes on the Gulf Coast, the Niger Delta and elsewhere.”
In an op-ed piece by Sen. Mike Johanns, R-NE., he said explains his opposition to cap-and-trade and that it’s based more on principal than politics.
Johanns said support has faded for a Senate cap-and-trade bill that taxes greenhouse gas emissions.
“Headlines like “Democrats Call Off Climate Bill Effort” indicate that legislators listened to their constituents, who reject further burdensome cost increases on aspects of everyday life,” Johanns said.
But this battle isn’t over, Johanns said.
“There is talk of reviving cap-and-trade with a strategy that circumvents regular order in the Senate, as well as the will of the American people. I introduced a bill earlier this week to prevent this from ever materializing,” he said.
Johanns said the reason a legislative scheme to pass cap-and-trade has come to light is because its proponents do not have the 60 votes needed in the Senate.
“This is a sign that the legislation is flawed. Traditionally it would’ve been reworked until it merits the support of 60 senators. But not anymore,” he said.
Johanns said the plan now is to pass an energy bill in the Senate without a cap-and-trade regime, but add cap-and-trade later, in a House-Senate Conference bill.
“When that bill comes back to the Senate, in a lame-duck session, some in the majority predict that senators who are no longer facing re-election, due to retirement or a loss, are likely to flip-flop and support it. The political scheming of a lame-duck Senate would triumph over the will of the American people,” he said.
According to Johanns, this has given cap-and-trade proponents a fresh avenue to pass it without Senate debate.
“As one senior Democrat said in a recent interview, the post-election environment could let some members feel “free and liberated” to vote a cap-and-trade regime into law,” he said.
But the obvious question, asked Johanns is: “Free and liberated from what?”
“Should the passage of such a sweeping policy initiative depend on the moment its proponents are least accountable to those who elected them? Are we to understand that the American people are a burden, a handicap, a captor of public officials?” he said.
“This shocking scheme might be easily dismissed, had it not already been widely reported. Politico wrote that the strategy now is to “conference the new Senate [Energy] bill with the already-passed House bill in a lame-duck session after the election, so House members don’t have to take another tough vote ahead of midterms.” Energy and Environment Daily reported, according to House majority leadership, the “conference committee may wind up merging the House cap-and-trade plan with a Senate bill that does not include it,” Johanns said.
Even President Barack Obama and his press secretary have recently hinted as much, Johanns said.
“Less than six months after railroading the health care bill through budget reconciliation, the plan again seems to resort to any means necessary to get an equally ill-conceived bill through Congress. The American people do not want – nor deserve – more procedural shenanigans,” he said.
Johanns said he has introduced a bill on July 27, to prevent cap-and-trade from being inappropriately added to a bill — unless the Senate has already debated and approved it.
“It does not directly address the merits or shortcomings of cap-and-trade; it essentially requires cap-and-trade to pass the Senate before being inserted in a conference report,” he said.
Johanns said if cap-and-trade is added in conference and comes back to the Senate, two-thirds of the Senate would have to agree to vote on it without having debated it.
“If the Senate approves a cap-and-trade regime under regular order, my amendment wouldn’t be triggered. The amendment is waiting for Senate majority leader Harry Reid (D-Nev.) to allow it consideration on the Senate floor,” he said.
Johanns said, “If we’re going to pass a bill that will change our economic landscape, it should be good enough to pass on its own merits. Any major policy initiative — like cap-and-trade — should be debated in the Senate so the American people have an opportunity to understand its implications and voice their opinions.”
He said this is an issue that transcends partisanship, just as it did when the Senate voted overwhelmingly last year to keep cap-and-trade from passing via budget reconciliation.
“My bill looks ahead to preserve the legislative process now — so it is not hijacked later,” Johanns said.
If, in four or five months, the Senate is “free and liberated” from public opinion to pass bills that would otherwise be rejected, as one of my colleagues suggested, what does that say about our relationship with the American people? It’s no surprise Congress has such low approval ratings.
”We should debate the merits of cap-and-trade. If it is going to be voted on, we should be on the record before the election, not after. The idea that we can be “free and liberated” from our constituencies should be eliminated from the Senate’s conscience,” he said.