Will Congress Really Eliminate Solyndra Loan Program?

Tuesday, September 11th, 2012 and is filed under Blog, Issues

Later this week, the House will vote on the No More Solyndras Act (H.R. 6213).  This bill would bar DOE from granting loan guarantees to any company that filed its application after December 31, 2011.

The problem is that this bill does not completely abolish the loan program, nor does it put an end to some of the unstable loans that the Obama administration has already issued.  Here are some concerns expressed in a letter to Congress from Taxpayers for Common Sense:

As currently drafted, this legislation would allow troubled projects, like a $2 billion loan guarantee to the financially floundering United States Enrichment Corporation (USEC), to be finalized. Although the bill prevents new loan guarantees from the Department of Energy, it excludes projects that applied before December 2011, including USEC. These grandfathered loan guarantees went through the same failed review process and are just as likely, if not more so, to end in default, just like Solyndra.

For example, USEC’s stock prices have been trading at less than $1 per share for months and the company has already received a junk-bond credit rating from Moody’s Credit Rating Service. USEC’s financials are so bleak the company was recently given notice that it may lose its place on the New York Stock Exchange. USEC has continually asked for and received lifelines from the Department of Energy (DOE), including a recent $88 million influx of cash, but its long-term financial problems remain unresolved. Despite all of this, under the No More Solyndras Act, DOE still has the authority to award them a $2 billion loan guarantee for their Piketon, OH uranium enrichment facility. Adding insult to injury, the Piketon project has already encountered numerous cost overruns and technical hurdles itself.

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DC Circuit Tosses Out EPA’s Pollution Rule

Tuesday, August 21st, 2012 and is filed under Blog

Amidst Obama’s inexorable war on American energy, consumers, jobs, and prosperity, his EPA is in the process of promulgating 4 new pollution rules that will bury the coal industry and “necessarily” raise the price of electricity on American households.  They are the Cross-State Air Pollution Rule, the Mercury and Air Toxics Standards for Utilities (MACT), the Cooling Water Intake Structures regulation, and the Disposal of Coal Combustion residuals.  The former two have already been finalized while the latter two are close behind.  Today, the D.C. Circuit Court struck down the EPA’s authority to implement the Cross-State Air Pollution Rule.

In August 2011, Obama’s EPA imposed a cap and trade style program to expand existing limitations on sulfur dioxide and nitrogen oxide emissions from coal-fired power plants in 28 “upwind” states.  They claimed that they had unlimited authority pursuant to the Clean Air Act to cap emissions that supposedly travel across state lines.  The EPA admitted that the rule would cost $2.7 billion from the private sector and force many cola-fired power plants to shut down.  Priorities USA might have even run an ad against Obama claiming that his superfluous regulations cause workers to lose their health insurance and die.

Luckily, several southern states decided to sue the EPA in federal court.  In EME HOMER CITY GENERATION, L.P. v. EPA, the D.C. Circuit Court of Appeals ruled 2-1 that the EPA had exceeded its authority under the Clean Air Act in two respects:

First, the statutory text grants EPA authority to require upwind States to reduce only their own significant contributions to a downwind State’s nonattainment. But under the Transport Rule, upwind States may be required to reduce emissions by more than their own significant contributions to a downwind State’s nonattainment. EPA has used the good neighbor provision to impose massive emissions reduction requirements on upwind States without regard to the limits imposed by the statutory text. Whatever its merits as a policy matter, EPA’s Transport Rule violates the statute. Second, the Clean Air Act affords States the initial opportunity to implement reductions required by EPA under the good neighbor provision. But here, when EPA quantified States’ good neighbor obligations, it did not allow the States the initial opportunity to implement the required reductions with respect to sources within their borders. Instead, EPA quantified States’ good neighbor obligations and simultaneously set forth EPA-designed Federal Implementation Plans, or FIPs, to implement those obligations at the State level. By doing so, EPA departed from its consistent prior approach to implementing the good neighbor provision and violated the Act.

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Lisa Murkowski Pushing LOST

Monday, August 20th, 2012 and is filed under Blog, Foreign Policy

Earlier this year, we successfully preempted consideration of the anti-sovereignty LOST treaty by securing 34 Republican commitments to block the treaty.  Any treaty requires 67 votes to pass the Senate, so presumably LOST should be 6 feet under ground at this point.

Unfortunately, there is one RINO who is trying to revive the treaty.  The Hill reports:

Murkowski told The Associated Press the sea treaty will have better prospects in the Senate when the fall campaign is over. The global maritime pact would establish de facto rules for the nation’s oceans, and business interests say it will create opportunities for offshore drilling.

“This is a treaty that I believe very strongly will contribute not only to our national security, but will allow us a level of certainly in accessing our resources in the north,” Murkowski said.

Among other things, LOST established a UN oversight board to divvy up all of the resources mined from the deep seabed and the extended continental shelf for the “common heritage of mankind.”  The International Seabed Authority gets to decide how our revenues from seabed mining are redistributed to “developing” nations.  Moreover, any complaint against the US brought by other member nations, which there undoubtedly would be many, must be decided by the UN authority.

To that end, it is appalling that Murkowski, the top Republican on the Energy and Natural Resources Committee, would support the treaty.  This is yet one more reason why we must demand that Murkowski not be awarded the chairmanship of that committee if Republicans win back the Senate.

Also, while we currently have 34 commitments against the treaty, we must ensure that none of them begin wavering during the lame duck session.  Below the fold is the updated list of senators who have taken sides on the treaty.

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It’s Obama’s Energy Regulations, Stupid

Monday, August 20th, 2012 and is filed under Blog

Welcome to Obama’s America.  The Midwest is languishing from the effects of the severe drought, yet the administration is refusing to ease its own restrictions that are spiking the cost of food, fuel, and electricity.

Despite the rising costs of gas and food, Obama refuses to suspend the ethanol mandate.  Despite the record heat and rising cost of electricity, Obama is refusing to suspend 4 major EPA regulations on coal-fired plants.  Now, a report from the Government Accountability Office has found that these regulations will disproportionately hurt the Midwest.  The Washington Examiner reports:

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Fred Upton’s Solyndra Subterfuge

Thursday, August 2nd, 2012 and is filed under Blog, Issues

On Tuesday, Fred Upton, the Republican godfather of green energy social engineering, spearheaded passage of the “No More Solyndras Act” (H.R. 6213) through the Energy and Commerce Committee.  This bill would bar DOE from granting loan guarantees to any company that filed its application after December 31, 2011.  What a better way for the author of the incandescent light bulb ban to end off the week immediately preceding his primary election than by obfuscating his record with this bill!

The problem is that this bill does not completely abolish the loan program, nor does it put an end to some of the unstable loans that the Obama administration has already issued.  Here are some concerns expressed in a letter to Congress from Taxpayers for Common Sense:

As currently drafted, this legislation would allow troubled projects, like a $2 billion loan guarantee to the financially floundering United States Enrichment Corporation (USEC), to be finalized. Although the bill prevents new loan guarantees from the Department of Energy, it excludes projects that applied before December 2011, including USEC. These grandfathered loan guarantees went through the same failed review process and are just as likely, if not more so, to end in default, just like Solyndra.

For example, USEC’s stock prices have been trading at less than $1 per share for months and the company has already received a junk-bond credit rating from Moody’s Credit Rating Service. USEC’s financials are so bleak the company was recently given notice that it may lose its place on the New York Stock Exchange. USEC has continually asked for and received lifelines from the Department of Energy (DOE), including a recent $88 million influx of cash, but its long-term financial problems remain unresolved. Despite all of this, under the No More Solyndras Act, DOE still has the authority to award them a $2 billion loan guarantee for their Piketon, OH uranium enrichment facility. Adding insult to injury, the Piketon project has already encountered numerous cost overruns and technical hurdles itself.

It’s not surprising that Fred Upton would give off the impression of ending Solyndra loans, even while preserving some of Obama’s special favors.  Just two months ago, he voted against the bipartisan McClintock-Kucinich Amendment to the FY 2013 Energy-Water Appropriations bill, which would have completely defunded the loan guarantee program.

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Orrin Hatch’s Election Promise Gone With the Wind

Thursday, August 2nd, 2012 and is filed under Blog, Taxes

Whew!  It’s good the Utah primary is over.  Now Senator Hatch can relapse into his natural modus operandi.

As we’ve noted before, at the end of every calendar year, Congress passes a ‘tax extenders’ bill to temporarily reauthorize specific tax breaks that have not been permanently written into law.  Some of these extenders include universal tax cuts such as, the AMT patch, the R&D business credits, and universal deductions for depreciation, as well as state and local taxes.  However, they also include sundry green energy credits that are nothing more than refundable subsidies for special interest groups.

Today, the Senate Finance Committee, led by Max Baucus and Orrin Hatch, is marking up a bipartisan draft bill on tax extenders that is loaded up with green energy handouts.  In fact, it contains every green energy wet dream under the sun and wind, including credits for green energy cars, homes, and biofuels. Most notably, Hatch gave in to the aggressive and officious Big Wind lobby and added in the Production Tax Credit extension.  We’ve sounded the alarm against this venture socialism for over a year, but David Kreutzer of the Heritage Foundation says it best:

So far this year, the wholesale prices of electricity in the different U.S. markets average from less than three cents per kilowatt hour (kW-h) to about 4.5 cents per kW-h. The PTC provides a subsidy of 2.2 cents per kW-h to wind energy producers. So this PTC subsidy is equivalent to 50 percent to 70 percent of the wholesale price of electricity. (Note: It is the wholesale market into which the wind producers are selling their energy.) That’s a big subsidy.

Though you would not know it from wailing and gnashing of teeth over the expiration of the PTC, many states also have renewable energy standards that force ratepayers to buy wind, solar, and biomass produced electricity regardless of how much it costs. These renewable standards are separate from—and, for wind-power producers, in addition to—the PTC.

So not only will they enjoy a 50-70% subsidy of their production, they will continue to reap the benefits of state governments that use their power to force electricity providers to purchase their product.  The Heritage Foundation also estimates that if the oil industry received a commensurate subsidy, they would get a $30 dollar check for every barrel produced.

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Mitt Romney Fans the Flames of Free Market Energy Policy

Tuesday, July 31st, 2012 and is filed under Blog, Taxes

Mitt Romney actually stood for bold colors yesterday.  For conservatives, it should be the biggest story of the week.

Conservatives are rightfully focused on the impending tax cliff that is facing American taxpayers at the end of the year.  But we must not forget the subsidy cliff either.  Dozens of special interest tax preferences, known as tax extenders, are slated to expire at the end of the year.  Those extenders related to green energy are nothing more than handouts ensconced in the tax code.  We must be vigilant of any effort to slip in these extenders as part of a final agreement on the broader tax issue

At the end of every calendar year, Congress passes a ‘tax extenders’ bill to temporarily reauthorize specific tax breaks that have not been permanently written into law.  These bills have traditionally dealt with issues like the AMT patch, the R&D business credits, and universal deductions for depreciation, as well as state and local taxes.

In recent years, tax extenders have been magnets for non-universal carve-outs for green energy.  Some of those carve-outs, such as the 30% Investment Tax Credit (ITC) and the 45-cent per gallon Volumetric Ethanol Excise Tax Credit, have already expired.  Other handouts, like the lobbyist-driven 2.2 cent/per kilowatt-hour Production Tax Credit (PTC) for wind, is slated to expire this December 31.  In both cases, there is still time to reauthorize the tax credits because they are backward-looking and do not affect withholdings.

We must kill them now.

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We’ve Defeated Fred Upton!

Tuesday, July 24th, 2012 and is filed under Blog, Elections

Well, not exactly.  Fred Upton has defeated Fred Upton.

As the primary season progresses, we’ve see this pattern repeat itself on numerous occasions.  There’s an old bull Republican who has been pushing for big government and anti-free-market policies for years.  Then, as soon as his primary opponent begins to sow the seeds of disquiet in his district, the old bull lurches to the right, introduces conservative legislation, and attacks his conservative challenger as a liberal.

Indeed, unseating liberal Republicans has been a tedious process and victory has been quite elusive.  Most of these guys don’t wear uniforms identifying themselves to the voters as the more moderate choice during the elections.  The few members who did so, such as Dick Lugar and Bob Bennett, got crushed.  Most of them are smart enough to know how to tack right when their congressional career, which is their entire life, is at stake.

As late as 2007-2008 – twenty years into Fred Upton’s congressional career – he was one of the biggest supporters of green energy social engineering and climate fascism.  As Ranking Member of the Energy Committee, Upton co-authored the incandescent light bulb ban that eventually made its way into the 2007 energy bill, which turned out to be the Obamacare of the energy industry.  It contained mandates and subsidies for green energy on every page.

Even in 2009, Upton sent a letter to Obama’s Energy Secretary, Steven Chu, in support of a loan guarantee to United Solar Ovonics, a solar power company that has since filed for bankruptcy.  Fast-forward one year, and Fred Upton has undergone a radical makeover.  Why?

Two Words: Jack Hoogendyk.

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EPA Mandates Use of Nonexistent Fuel Blend

Wednesday, July 18th, 2012 and is filed under Blog

It’s bad enough that government regulations and environmental legal defense groups have prevented us from building oil refineries for over 30 years.  It’s even worse when the existing ones are forced to blend fuel mixtures that don’t exist.

We are all painfully aware of the Soviet style mandate that requires 10% of petroleum to be comprised of ethanol.  This unconstitutional mandate has killed jobs, driven up the cost of fuel and food, lowered gas mileage, and damaged car engines – all to benefit corporate cronies in Big Ag.  This odious fuel source is primarily made from corn.  But since 2010, the EPA has mandated the blending of more than 20 million gallons of cellulosic biofuel into the nation’s fuel supply.  The problem is that while creating efficacious fuel from grass, wood, and algae might sound great in theory, it doesn’t exist on the commercial fuel market.

On December 19, 2007, President Bush signed a disastrous socialist energy bill that contained numerous green energy mandates and subsidies.  It also banned the sale of incandescent light bulbs.  The “Energy Independence and Security Act of 2007” passed with support from 39 Republican senators and 95 Republican congressmen.  It created a Renewable Fuels Mandate requiring that 22 billion gallons of renewables be blended into our gasoline supply by 2016 and 36 billion gallons by 2022.  The bill also created a few sub-mandates, one of which required a blend of 100 million gallons of cellulosic biofuel by 2010, rising to 250 million in 2011, 500 million in 2012, and 16 billion by 2022.  The bill also established a tax credit of $1.01 per gallon produced.

Despite the tremendous tailwinds of tax credits and the boot of the government used to force fuel blenders to purchase cellulosic fuels, the industry has failed to perform magic and become commercially viable during the past 5 years.  Some of the plants that were given subsidies to produce this phantom fuel were never even built.  Yes – this is a scandal far worse than Solyndra.

What is even more scandalous is that oil companies are forced to pay a tax for not blending this phantom fuel!

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Jeff Duncan has a True “All of the Above Approach to Energy”

Thursday, July 12th, 2012 and is filed under Blog

Even as gas prices decline, we must not relent in our pursuit of free market energy solutions.  Gas prices will continue to spike every few months as long as we refuse to increase supply to meet our energy needs.  Moreover, $3.40 per gallon of gasoline – or even $3 per gallon – is too much.  We must not let Obama off the hook for continuing to lock up over 90% of our energy resources.

It has become universal for politicians to express their support for an “all of the above energy policy.”  Well, conservative Rep. Jeff Duncan (R-SC) has proposed the most comprehensive free-market energy bill that takes a true all of the above approach.  The Energy eXploration and Production to Achieve National Demand (EXPAND) Act (H.R. 4301) was introduced a few weeks ago and contains the following provisions:

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