The Vanishing Conspiracy That Never Was

New York’s Attorney General has announced that he is abandoning his investigation that claimed ExxonMobil and other oil companies engaged in a public deception about the risks of climate change just as tobacco companies did in misleading the public about the danger of smoking. The Attorney General’s investigation, which was joined by a number of his fellow AGs, Senator Whitehouse, and Al Gore has so to speak gone up in smoke. There simply was no there there.

Given the extent of uncertainty documented by the Intergovernmental Panel on Climate Change (IPCC), the advocates’ gold standard, and the National Academies of Science (NAS), it would be virtually impossible to make a case of deliberate deception. The IPCC continues to list major uncertainties in knowledge about forces affecting warming and it has gradually reduced its estimate of climate sensitivity. The NAS was quite explicit in a report on key questions about climate change in stating that estimates of future warming were subject to revision, up or down, based on new knowledge.

The combined efforts of this group of attorney generals, some members of congress, and environmental zealots were never about what oil companies knew, when they knew it, or the funding of think tanks and others to create public confusion. From start to finish, their goal was intimidation and silencing dissent. For them, turning the First Amendment on its head was a small price to chill debate that would expose the climate orthodoxy as a Trojan Horse. Now in a face saving move, the New York Attorney General is trying a new tactic. He wants to determine whether ExxonMobil’s forecasts of the value of its reserves are misleading by not including the “full impact of climate change.”

So, it is no longer what ExxonMobil and others knew but how clear are their crystal balls. In the case of ExxonMobil, it has made disclosures to investors and publicly stated that it assumes a price on carbon in evaluating the viability of capital investment projects. The world’s appetite for energy is growing and every independent analysis concludes that fossil fuels will continue to provide 80% of that energy for decades to come. Since these estimates are made taking into account policies to reduce greenhouse emissions, they acknowledge that there is no cost competitive alternatives to oil and gas on the horizon. Assumptions about value reflect this reality.

Could there be a black swan in energy technology that renders oil and gas less valuable? Perhaps but it is not likely in the foreseeable future.

The current investigatory scheme will prove to be just as much of a boondoggle as the one that preceded it. Eventually the truth about CO2 and the complexity of the climate system will make it evident that man’s impact on the climate system is not creating an apocalypse. None the less, environmental history over the past 40 plus years demonstrates that zealots will not abandon their pursuit of power, environmental purity, and efforts to constrain market forces to promote greater economic well being.





Vodoo Energy and Fuel Delusions

At the democrat national convention, an energy plank was adopted that is totally detached from reality and inconsistent with the goal of helping lower income citizens.

In part, the energy plank states, “We are committed to getting 50 percent of our electricity from clean energy sources within a decade, with half a billion solar panels installed within four years and enough renewable energy to power every home in the country. We will cut energy waste … through energy efficient improvements; modernize our electric grid; and make American manufacturing the cleanest and most efficient in the world. … We will transform American transportation by reducing oil consumption through cleaner fuels, vehicle electrification increasing the fuel efficiency … .”

 Today, according to the Energy Information Administration, we get 13% of our electricity from renewables and will get 23% in 2025. What kind of magic will take the projected 23% to 50%? Even with an aggressive program of even more wasteful subsidies and even more stringent regulations, there is not realistic way to increase the amount of electricity generated by renewables by a factor of 3.8 in a decade. The economic impact of shuttering coal and gas fired power on such an accelerated pace would easily exceed $366 billion between 2017 and 2031, the estimated cost of the Clean Power Plant rule according to the nationally recognized firm NERA.

There are over 7600 operational power plants in the US according to EIA. It is beyond wishful thinking to assume that a large fraction could be replaced in the next nine years. Permitting is often extended because of citizen and environmentalist opposition and once permits are granted, construction can take 1-2 years. In addition, capital constraints further limit how many plants a utility can finance simultaneously.

Renewables serve a niche market—areas with lots of sun and wind. There is currently no viable storage technology for excess power that is generated by renewables. Germany’s experience in forcing renewables into the market should be cautionary lesson for democrat dreamers. The cost of electricity in Germany is about 3 times higher than the average cost in the US and Germany has to rely on coal fired power for nighttime power generation, undercutting its drive to reduce CO2 emissions.

A report by the Institute for Energy Research concluded, “The high use of renewable energy in eastern Germany driven by government green energy policies is causing instability to its own electric grid as well as to neighboring countries, … Electricity bills are also expected to go up by 10 percent this year. With residential electricity prices in Germany already about 3 times higher than prices in the United States and increasing…”

 The bottom line on renewables and electricity in the democrat platform in the words of Vice President Biden, is malarkey.

The platform also promises “We will transform American transportation by reducing oil consumption through cleaner fuels, vehicle electrification increasing the fuel efficiency of cars … “. The Obama Administration has already almost doubled the CAFÉ standard for light duty vehicles, raising it from 27.5 mpg to 54.5 mpg by 2025. The incremental cost has been estimated to range from $3000 to $6000 per vehicle, which excludes the cost of subsidies for hybrids and electric vehicles. Unless the price of gasoline rises steeply, some estimate to the $4 dollar range, the fleet average will fall short of 54.5 because consumers prefer larger vehicles than the government preferred smaller ones that have higher mileage. The increased purchase price keeps older vehicles on the road longer and penalizes lower income purchasers.

The story is the same with fuels. The government continues to push ethanol even though it is not necessary, is more expensive, and can damage fuel systems. Although the government has been excessively optimistic about the technology to produce cellulosic ethanol, it is not commercially viable. As a result, corn remains the dominant feedstock for ethanol. As such, it diverts corn from food to fuel, raising the price of a range of food products.

As a nation, we need more factual statements about energy and less rhetoric since energy is and will remain a critical input to our economic well being. Politicians should learn that setting objectives is their job, achieving them is the market’s



Never the Twain Shall Meet

The debate between climate skeptics and those who subscribe to the climate orthodoxy that human activities are creating a climate apocalypse because of consumption of fossil fuels has been on going for close to three decades and shows no signs of abating. On a range of topics, debates among reasonable people lead to greater understanding and common ground.

That has not happened in the climate debate even though empirical evidence in the form of the climate’s behavior has rebutted a number of the advocate’s claims. Temperature increases essentially halted after 1998. Extreme weather events, like hurricanes, have not increased. And, sea level rise has not accelerated. Why is it that contrary evidence has not led to advocates moderating their position?

Psychologists and some communication experts have done research on why some people refuse to accept evidence that is contrary to their beliefs. They label this phenomena “confirmation bias”. Climate advocates want to believe that human activities that produce CO2 emissions are the primary cause of global warming or climate change. The climate orthodoxy leaves little room for reflection or reassessment.

Researchers have concluded that when someone wants a concept to be true, they often stop searching for information that would refute their belief. Shaman Heshmat, a professor emeritus at the University of Illinois, has written, Confirmation bias suggests that we don’t perceive circumstances objectively. We pick out those bits of data that make us feel good because they confirm our prejudices. Thus, we may become prisoners of our assumptions”. This is characteristic of environmental zealotry.

More recent research on confirmation bias demonstrates the difficulty of getting some people to accept corrective information and facts. Attempts to counter confirmation bias often backfires and actually strengthen the biases. This is confirmed in a research paper, When Corrections Fail: The Persistence of Political Misperceptions, by Nyham and Reifer. Based on their experiments, they conclude that “corrective information in news reports may fail to reduce misperceptions and can sometimes increase them for the ideological group most likely to hold those misperceptions” and “responses to corrections about controversial political issues vary systematically by ideology”.

A related article in the Harvard Business Review, Why Debunking Myths About Vaccines Hasn’t Convinced Dubious Parents by Christopher Graves, a communication expert, reinforces the conclusions of Nyham and Reifer about why it is so hard to change strongly held views. Graves concludes that arguing facts makes a situation worse for some who will only accept evidence that is consistent with their beliefs. He also believes that people who hold incorrect views will be more likely to change their minds through a process that does not challenge them and that makes it easy to replace their incorrect narrative with an alternative one. In the case of climate advocates, that would require an epiphany by some who subscribe to the climate orthodoxy.

The research on confirmation bias makes it clear that common ground on that the climate change is to illusive and the debate will continue for some time to come. The continued accumulation of evidence that CO2 emissions are not THE primary cause of climate change may be necessary but it won’t be sufficient.   Since the Club of Rome and Limits to Growth movement, environmental elites have moved from one catastrophe to another. In time some other narrative is likely to come along to replace climate change but that will not change the deeply held belief that human activities are threatening life on earth. Climate change proves that dread is wealth generating.