Windfall Profits Tax Would Harm the US Economy, Cost Jobs, and Increase Our Reliance on Imported Oil

New Study Finds That a Windfall Profits Tax Would Harm the US Economy, Cost Jobs, and Increase Our Reliance on Imported Oil
IER, February 4, 2009

A study conducted by CRA International[i] and released February 3rd by the American Petroleum Institute (API) finds that instituting a windfall profits tax on the oil and gas industry would cost the U.S. a net loss in jobs of between 370 to 490 thousand by 2030; reduce U.S. gross domestic product between 0.5 to 0.9 percent, or $140 to 240 billion; and increase crude oil imports by 13 to 18 percent (1.2 to 1.5 million barrels per day). The increase in oil imports results from a decline in domestic crude oil production of 21 to 26 percent, or 1.5 to 1.9 million barrels per day, between 2010 and 2030.

The study results are similar to past US experience. Congress enacted a windfall profits tax on domestic oil producers in 1980 expecting to generate tax revenues. The Congressional Research Service[ii] found that, instead, domestic crude oil production was reduced by 1.2 to 8.0 percent and foreign oil imports were increased by 3 to 13 percent.

While there is no specific windfall profits tax proposal currently being considered by Congress, such a tax was part of President Obama’s campaign platform. When crude oil prices dropped last fall, President Obama’s aides changed course and indicated that with oil prices below $80 a barrel would not be considered for a windfall profits tax. However, whether a windfall profits tax or some other similar tax or combination of taxes is instituted on the oil and gas industry, the impact on US jobs, the economy, and foreign imports of oil and natural gas would be similar.

Other study results are:

• A decline in natural gas production of 9 to 13 percent, 1.6 to 2.4 trillion cubic feet, between 2020 and 2030. More natural gas imports would result, increasing 14-55 percent, or 0.5 to 1.2 trillion cubic feet, during this period.
• A reduction in refinery output of 2 to 4 percent, or 410 to 660 thousand barrels per day, during the 2010 to 2030 period. The reduction in domestic refinery output could partially be offset by increasing foreign imports of petroleum products by 15 to 21 percent, or 230 to 430 million barrels per day, during the 2010 to 2030 period.
• A reduction in household consumption between $20 to 42 billion by 2030.
• A decline in domestic investment by the oil and gas industry between 20 and 25 percent by 2030.

References

[i]“Energy and Economic Impacts of a Proposed Windfall Profits Tax on Producers of Oil and Refined Products in the United States “, CRA International, February 2009, http://www.api.org/Newsroom/upload/CRA_WPT_Study_1_30_2009.pdf

[ii] Lazzari, Salvatore, “The Crude Oil Windfall Profit Tax of the 1980s: Implications for Current Energy Policy”, Congressional Research Service, CRS Report for Congress, March 9, 2006


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You can request the CRS report to us. Contact Jorge Mata

Ex-Pentagon official warns of Japan's decline - ‘‘Few in Japan share my concern’’

Ex-Pentagon official warns of Japan's decline
Japan Today, Friday February 06, 2009, 08:43 AM JST

WASHINGTON — A former senior Defense Department official warned Thursday that Japan must take action to arrest the decline in its regional and international standing. ‘‘The erosion of Japan’s international, regional position has begun,’’ said Richard Lawless, deputy undersecretary of defense for Asia and Pacific security affairs. ‘‘If this marginalization process of Japan is not addressed openly and proactively, the relative decline will accelerate,’’ he said, adding that ‘‘Few in Japan share my concern.’’

Lawless said in a speech that Japan’s decline is partly attributable to the ongoing global financial crisis, which has forced many leading Japanese companies to expect to fall into the red. As well, he pointed out inaction on the part of Japanese policymakers in relation to a plethora of challenges, as exemplified by the recent response to piracy off the coast of Somalia.

It took China ‘‘about 10 seconds’’ to decide to participate in an antipiracy mission there, but Japan spent a tremendous amount of time before deciding this week to send two destroyers on a similar mission, Lawless said.

‘‘It’s not bad, but sad,’’ he said.

A former CIA official, Lawless played a major role in talks with Japan and South Korea over the realignment of U.S. forces and military bases in the two U.S. allies in Asia. He was also active in promoting military exchanges between the United States and China.

He expressed hope a new Japanese government to be launched after the next general election, which must be held by September, will ‘‘get serious’’ about Japan’s decline and take steps to counter it.

‘‘That new government, I think, must take a long, hard look at Japan and the region and the world, and make its own decisions about what it’s going to do,’’ he said.

‘‘If Japan wants to be where it needs to be, it needs to act like it’s in the game,’’ Lawless said. ‘‘It’s not a spectator.’’

Remarks of President Barack Obama National Prayer Breakfast

"This is my hope. This is my prayer."
Washington Hilton, Washington DC, Thursday, February 5th, 2009 at 12:08 pm

"The particular faith that motivates each of us can promote a greater good for all of us," President Obama said this morning to a crowd of several thousand people gathered for the National Prayer Breakfast at the Washington Hilton in the nation's capital. "Instead of driving us apart, our varied beliefs can bring ustogether to feed the hungry and comfort the afflicted; to make peace where there is strife and rebuild what has broken; to lift up those who have fallen on hard times."

A dozen foreign leaders attended, including former British Prime Minister Tony Blair, who delivered the keynote address.

Rep. Jo Ann Emerson (R-MO) and Sen. Kirsten Gillibrand (D-NY) read from Scripture, Rep. Ike Skelton (D-MO) delivered a prayer for national leaders, Rep. Todd Akin (R-MO) delivered a prayer for world leaders, and Rep. John Lewis (D-GA) delivered the closing prayer. Casting Crowns, a Christian rock group, performed at the event.

The National Prayer Breakfast, currently co-chaired by Reps. Vern Ehlers (R-MI) and Heath Shuler (D-NC), is a yearly event held in Washington, D.C., on the first Thursday of February each year. The event has taken place since 1953 and every U.S. president since Dwight D. Eisenhower has participated in the breakfast.

The President is set to sign an executive order regarding the White House Office of Faith-Based and Neighborhood Partnerships, which we'll have more on later today.

Read the President's remarks here.

Fuel Cell Projects Continue Push for Low-Cost, Environmentally Friendly Coal Power

SECA Fuel Cell Program Moves Two Key Projects Into Next Phase
Projects Continue Push for Low-Cost, Environmentally Friendly Coal Power
Energy Dept, February 5, 2009

Washington, D.C. — The U.S. Department of Energy (DOE) has selected two projects for continuation within the Department's Solid State Energy Conversion Alliance (SECA) Program research portfolio. The projects—led by FuelCell Energy, in partnership with VersaPower Systems, and Siemens Energy—have successfully demonstrated solid oxide fuel cells (SOFCs) designed for aggregation and use in coal-fueled central power generation. Further development of these low-cost, near-zero emission fuel cell systems will substantially contribute to solving the Nation's energy security, climate, and water challenges.

The selections were based upon an assessment of demonstrated progress in developing high-performance, low-cost SOFC technology. FuelCell Energy is testing two ~10 kilowatt SOFC stacks incorporating planar cells; each has surpassed 4,700 hours of operation to date. Similarly, Siemens is testing a ~10 kilowatt SOFC stack incorporating its new higher power Delta cells, with 2,500 hours of operation to date. With the continuation, these projects will pursue cell materials and design development to further improve performance, reduce cost, and integrate the cells into larger stacks for evaluation and incorporation into larger demonstrations beginning in 2012.

From an environmental perspective, fuel cells are one of the most attractive technologies for generating electricity. SOFCs operate by separating oxygen from air and transferring it across a solid electrolyte membrane, where it reacts with a fuel—such as synthesis gas derived from coal, biofuels, or natural gas—to produce steam and carbon dioxide (CO2). Condensing the steam results in a pure stream of CO2 gas, which can be readily captured for storage or other use in a central location. This feature, coupled with very high efficiencies and the fact that fuel cells operate more efficiently at lower temperatures than combustion-based technologies, results in near-zero emissions. In addition, eliminating the need for steam bottoming cycles, and the ability to keep fuel and air streams separate, significantly reduce water withdrawal.

To realize the intrinsic advantages of SOFCs requires achievement of SECA's cost reduction goals. Projects in the SECA portfolio are conducting research and technology development to lower costs and improve reliability, ultimately culminating in the demonstration of fuel cell technologies that can support power generation systems as large as several hundred megawatts capacity. Key program goals, as defined by the Office of Fossil Energy and the U.S. Office of Management and Budget, include:

• Cost of $175 per kilowatt (2007 dollars) for a minimum 40,000 hour fuel cell stack.
• Cost of $700 per kilowatt (2007 dollars) for an integrated fuel cell power block.
• Maintaining high power density in the large cells necessary for economic manufacturing.

SECA was established by DOE's Office of Fossil Energy in 2000 to research and develop low-cost, modular, fuel-flexible SOFC systems by 2010. In early 2005, the SECA program was accelerated to deliver megawatt-class fuel cell systems in response to the emerging national need for low-cost carbon capture technologies, near-zero emissions, and the need to reduce water withdrawal in power plants. Demonstrations are planned for 2012, 2015 and 2020:

• 2012—Multiple 1‑megawatt systems to demonstrate 5-year life by 2017.
• 2015—Multiple 5‑megawatt systems to demonstrate system integration with heat recovery turbines, power electronics, and other system level features by 2017.
• 2020—Full scale 250–500 megawatt integrated gasification fuel cell plant as part of DOE’s Near-Zero Emissions Coal-Based Electricity Demonstration Program.

DOE's National Energy Technology Laboratory (NETL) manages the SECA program and its projects.

Industry Views: Green Jobs That Nobody Wants

1 Green Jobs That Nobody Wants, by Robert Murphy
IER, February 4, 2009

On February 3, 2009, Senator Debbie Stabenow (D-MI) and Rep. Jay Inslee (D-WA), in conjunction with union leaders and environmental groups, released their “Good Jobs First” report. Although advocates of a “green recovery” point to estimates that 456,000 green-collar jobs would be created by the stimulus package, the new Stabenow/Inslee report reveals the dirty little secret that many of these new jobs would offer low pay and poor working conditions. For example, the Good Jobs First report discusses a recycling firm in Los Angeles-which is just the type of operation that will “green” stimulus money-where workers make $8.25 an hour and receive no health insurance.

Of course, the Good Jobs First report doesn’t state the obvious conclusion: government efforts to “help” workers and “stimulate” the economy will only make things worse. Faced with the unintended consequences of their original scheme, the proponents of a green recovery want to double down and shovel more tax dollars at the problem and hope something sticks.

Although critics have pointed out the plan’s flaws since its inception, it is at least encouraging that the unions-the alleged beneficiaries of green-collar stimulus money-are beginning to realize that the deal isn’t as rosy as they have been led to believe. No matter how much politicians might like to claim otherwise, they can’t repeal the laws of economics.

“Demand curves slope downward,” economists say, meaning that people buy more of something only when its price is lower. This law applies to consumers who walk the aisles in grocery stores, but it also applies to businesses that make solar panels. To get the biggest bang of jobs “created” for the stimulus buck, those jobs have to be low-wage. The higher the pay and other perks the unions demand, the fewer jobs that employers will be able to afford-even with government subsidies.

This underscores a basic flaw in the whole notion of a green recovery. Of the millions of unemployed Americans today, not many of them have the specific background and skills necessary for the good-paying jobs that are available in the so-called green sectors of the economy. So even if the government provides the handouts, the only way to get these people into green jobs quickly is if they fill positions requiring no extensive training.

The popular pro-green recovery studies, which purport that there are plenty of American workers with the right skills to fill the new, high-wage positions, suffer from a basic flaw in their methodology. As IER pointed out in its critique of such studies, they count up the number of skilled workers in the work force as a whole, rather than counting up the qualified workers in the current pool of unemployed workers. The only way, then, that these alleged hundreds of thousands of high-paying, “green” jobs could be filled-relying on government subsidies, of course-is to siphon most of their workers away from other industries. No net jobs would be created, because the new green slot would be offset by the existing jobs vacated by the skilled worker.

Confusion between gross and net job creation is typical of the green jobs. For example, the 456,000 figure touted by the Center for American Progress does not take into account the jobs that would be destroyed by the government’s methods of paying for the necessary subsidies. The CAP estimate simply assumes that all 456,000 workers filling these new green slots would have come from the ranks of the unemployed and that the higher taxes and Uncle Sam’s increased borrowing will have no job-destroying impact on the rest of the American economy.

It is refreshing to see that even the unions are catching on. But rather than ask for a bigger handout, they should stop looking to the government to help workers. Only when the government stops trying to pick industrial winners and losers can true economic recovery begin. Only when the government stops changing the rules and throwing around hundreds of billions in borrowed money will the unemployed get good jobs in the private sector.



2 Good Jobs and Green Jobs: Which Road to Take? By Jason Lefkowitz
Change to Win, February 3, 2009 at 10:19 AM

A few days ago, I wrote about how green jobs are not automatically good jobs:

The old thinking was that it was impossible to grow the economy and clean
the environment at the same time. The green jobs movement has done important
work in freeing the world from the tyranny of that particular dead idea; thanks
to their efforts, there’s a lot of people thinking hard about how to apply the
stimulus in ways that grow green jobs.

But green jobs are not, in and of themselves, good jobs. They can be
good jobs - jobs that provide workers with decent wages, economic security and a
shot at the American Dream - but they can just as easily go the other way. It
all depends on the choices we make.

Today, in conjunction with Good Jobs First and the Sierra Club, we’re rolling out a new report that demonstrates in detail just how true that is.

“High Road or Low Road? Job Quality in the New Green Economy” (PDF) looks at a range of existing green jobs in sectors across the economy, including manufacturing, construction, and waste management, and finds that while policy choices have made some of these green jobs good jobs, the connection is by no means automatic:

• Low pay is not uncommon in the workplaces we profile: the lowest wage we found was $8.25 an hour at a recycling processing plant, but we also discovered jobs in manufacturing facilities serving the renewable energy sector paying as little as $11 an hour.
• Wage rates at many wind and solar manufacturing facilities are below the national average for workers employed in the manufacture of durable goods. In some locations, average pay rates fall short of income levels needed to support a single adult with one child.
• Some U.S. wind and solar manufacturers have already begun to offshore production of components destined for U.S. markets to low-wage havens such as China and Mexico. Examples of offshoring include the manufacture of blades for wind turbines, defying the common assumption that such blades are too large to ship overseas.
• Very few workers at wind and solar manufacturing workplaces identified in the course of our research are covered by collective bargaining agreements. In at least two instances, this appears to be a direct result of aggressive anti-union campaigns run by employers with the help of union-busting consultants. On the construction side, we found that a leading contractor engaged in energy efficiency work has a similarly hostile approach to unions.
• We could not find specific wages for nonunion construction workers employed in green building, but publicly available data on overall construction wages suggest that they are far lower than those of the union members profiled in the report. Analysis provided by the Economic Policy Institute indicates that among nonunion laborers, carpenters, painters, and roofers, a majority make less than $12.50 an hour and a third make less than the federal poverty wage for a family of four ($10.19 an hour).

This is not to say that green jobs cannot be good jobs — merely that they do not become good jobs simply because they are green. Decisions must be made and policies put in place if we wish for this sector to become the vehicle that enables a new generation of workers to achieve the American Dream. (In its conclusion, the report identifies a range of policy options available to make this a reality.)

Given the economic and environmental challenges facing America and the world, the need for a green economy becomes clearer every day. In the push to get there, though, we must make sure that the workers whose labor powers that green economy aren’t left behind by it while its benefits flow to a few plutocrats at the top. If we do not, we risk repeating the mistakes that led us into the current economic crisis in the first place.

Air Force fails new nuclear reviews

Air Force fails new nuclear reviews. By Bill Gertz
Washington Times, Feb 05, 2009

Air Force nuclear units have failed two inspections in the past three months, providing fresh evidence that the military service that jarred the world in 2007 by mistakenly transporting live nuclear weapons across the United States continues to suffer lapses in its management of intercontinental ballistic missiles.

Jennifer Thibault, a spokeswoman for the Air Force Space Command, said the failed "surety" inspections at Wyoming and Montana bases in November and December involved "administrative and paperwork issues." In all, three Air Force nuclear-missile units and two strategic-bomber units failed such inspections in 2008.

Despite the problems, the Air Force said it is making progress addressing issues with the security and handling of nuclear-tipped missiles that came to light after two embarrassing episodes in 2006 and 2007 prompted a widespread review and management changes.

"While we missed the mark in certain areas during the last three inspections of our ICBM wings, overall, we've seen that our airmen are highly capable of operating, maintaining and securing our nuclear forces," Miss Thibault told The Washington Times.

James Schlesinger, the former defense secretary who headed a recent task force on nuclear-weapons management, said Tuesday the continuing problems affect U.S. credibility worldwide - both in deterring attacks and assuring allies of protection - but he said he thinks the Air Force is committed to fixing the problems.

"Whatever the size of the nuclear force is, it has to be run with zero defects," Mr. Schlesinger said in an interview. "We've got to get back to that if we want to have any credibility in the international scene."

The most recent surety-inspection failure took place at the 90th Missile Wing at F.E. Warren Air Force Base in Wyoming from Dec. 2 to Dec. 17. The base is in charge of 150 Minuteman III missiles that are on alert 24 hours a day.

Air Force officials said the 90th was given failing grades by inspectors from the Space Command and the Defense Technology Security Administration for not properly documenting tests on missiles, which require strict monitoring.

The Wyoming base was at the center of one of the two prior nuclear mishaps that cast embarrassment on the Air Force. Nuclear-missile units at F.E. Warren mistakenly transported four Minuteman III forward sections containing sensitive components to Taiwan on two occasions, in October and November 2006. The components were recovered, but the mistake exposed larger security shortfalls.

A subsequent security breakdown allowed live nuclear weapons to be flown improperly from Minot Air Force Base in North Dakota to Barksdale Air Force Base in Louisiana in August 2007.

The incidents prompted Defense Secretary Robert M. Gates to form an eight-member Task Force on Nuclear Weapons Management that produced two reports critical of the Air Force's handling of nuclear missiles. On-site inspections were made stricter and have divulged additional problems, officials confirm.

The two other nuclear-surety-inspection failures took place last year at the 341st Missile Wing at Malstrom Air Force Base, Montana, from Oct. 26 to Nov. 10, and at the 91st Missile Wing at Minot Air Force Base, N.D., from Jan. 22 to Jan. 30, 2008. Both wings also handle 150 nuclear-tipped Minuteman IIIs deployed in underground silos.

Miss Thibault declined to provide details of the inspection failures because of the sensitivity of the information.

Surety inspections are held every 18 months and measure whether troops are prepared to fire missiles during a two-week testing period.

"Nuclear Surety Inspections (NSI) are extremely detailed and demand the absolute highest standards of compliance and accountability [to pass]," Miss Thibault said.

The Air Force defines nuclear-surety inspections as reviews of all nuclear-weapons-related material, people and procedures that "contribute to the security, safety, and reliability of nuclear weapons and to the assurance that there will be no nuclear-weapon accidents, incidents, unauthorized weapon detonations, or degradation in performance at the target."

Last year, the tests were made more rigorous, Miss Thibault said, following the critical report by the task force on nuclear weapons.

"These inspections are tools that our commanders use to determine the readiness of their units to perform the mission to the standard we demand - perfection," she said. "We're seeing progress in ICBM nuclear surety."

As for the test failures, "unsatisfactory inspection results, in the sense of identifying discrepancies, are part of the fix and should not be interpreted as suggesting that the ultimate security or safety of the American people or our allies has been put at risk," Miss Thibault said.

The Defense Department task force report issued in October warned that the Air Force was not doing its job of securing and maintaining nuclear-missile forces. The report identified a "serious erosion of senior-level attention, focus, expertise, mission readiness, resources, and discipline in the nuclear weapons mission."

The Air Force responded by initiating 100 steps to improve nuclear-weapons problems.

Data from the report show that the Air Force failed on five of its 22 surety inspections in 2008. It was the fourth time since 1992 that at least five failing grades were issued, the report stated.
According to the report and the Air Force, the five inspections failures during 2008 included the three at the missile wings and two at strategic nuclear bomber wings.

By contrast, in 2006 and 2007, there were a total of 18 surety inspections, and all received passing grades.

"Over the past 10 years, inspection pass rates point to anomalies that indicate a systemic problem in the inspection regime," the report said. "Something is clearly wrong."

A second task force report, made public Jan. 9, stated that rigorous nuclear surety inspections are "critical to maintaining a credible U.S. deterrent."

"However, the task force believes a significant shortfall exists in the DoD nuclear surety inspection process," the report said.

Mr. Schlesinger, who headed the task force, stated in the October report that the Air Force in recent years focused too much on conflicts in the Middle East and Afghanistan. "Both inattention and conscious budget decisions have led to the atrophy of the Air Force´s nuclear mission," he stated. "But the balance must be restored. Though reduced in scope, the nuclear mission remains essential."

The U.S. nuclear arsenal is still needed despite the demise of the Cold War for deterring nuclear threats to the United States and its allies, he said. The weapons must be maintained as a credible deterrent against nuclear powers such as China and Russia that are in the process of building up their nuclear forces, Mr. Schlesinger said.

The January task force report stated that one of the problems for the Air Force's nuclear weapons mission is that troops do not clearly understand the deterrence mission of the expensive and extremely powerful strategic weapons.

Unlike the Air Force, which has numerous problems with its nuclear mission, the Navy has sustained its commitment to nuclear forces but still is "fraying at the edges," the report said.

The task force "did not find in the Navy the kind of deterioration in morale that characterized Air Force nuclear units," the report said.

"The attitude in the Air Force was: 'We know that the president and secretary of defense don´t give a damn about what we do,' " the report stated.

By contrast, a Navy ballistic missile submarine crew told task force investigators that while senior Navy leaders are disinterested in the strategic nuclear deterrence forces, the ballistic missile submariners remain highly motivated.

"The attitude in the Navy was: 'We know that the president and secretary of defense don´t care - but we do,' " the report stated.

However, the final report also contained the conclusion that the problem of "the lack of interest in and attention to the nuclear mission and nuclear deterrence ... go well beyond the Air Force."

"This lack of interest and attention have been widespread throughout DoD and contributed to the decline of attention in the Air Force," the final report stated.

The report called for creating the position of assistant secretary of defense for nuclear deterrence, which would elevate nuclear issues that have been separated and downgraded as the result of a Pentagon reorganization during the Bush administration.

Extremism and Social Learning

Extremism and Social Learning. By Edward L. Glaeser & Cass R. Sunstein
The Journal of Legal Analysis, Vol 1, No 1 (2009)

Abstract

When members of deliberating groups speak with one another, their predeliberation tendencies often become exacerbated as their views become more extreme. The resulting phenomenon—group polarization—has been observed in many settings, and it bears on the actions of juries, administrative tribunals, corporate boards, and other institutions. Polarization can result from rational Bayesian updating by group members, but in many contexts, this rational interpretation of polarization seems implausible. We argue that people are better seen as Credulous Bayesians, who insufficiently adjust for idiosyncratic features of particular environments and put excessive weight on the statements of others in situations of (1) common sources of information; (2) highly unrepresentative group membership; (3) statements that are made to obtain approval; and (4) statements that are designed to manipulate. Credulous Bayesianism can produce extremism and significant blunders—the folly of crowds. We discuss the implications of Credulous Bayesianism for law and politics, including media policy and cognitive diversity on administrative agencies and courts.

Introduction (excerpts):

Many people have celebrated the potential value of deliberation, including its uses in democracy (Habermas 1998), and it is tempting to think that group decision-making will both produce wiser decisions and average out individual extremism. In many settings and countries, however, researchers have found that group deliberation leads people to take more extreme positions (Brown 1986). The increased extremism, often called group polarization, is usually accompanied by greater confidence and significantly decreased internal diversity, even when individual opinions are given anonymously (Schkade, Sunstein & Kahneman 2000; Brown 1986, 207). These facts, which are summarized in Section 2 of this article, appear to cast doubt on the wisdom, and certainly the moderation, of crowds. If deliberation leads liberals to become more liberal, and conservatives to become more conservative, the effects of deliberation are unlikely to be desirable in both cases. Deliberation might account for the folly, not the wisdom, of crowds.

Group polarization has evident implications for many issues in law and politics. It suggests, for example, that like-minded jurors, judges, and administrative officials will move to extremes. If group members on a corporate board or in a political campaign are inclined to engage in risk-taking behavior, group deliberation will produce increased enthusiasm for taking risks. But the mechanisms behind group polarization remain inadequately understood, and it is difficult to make predictions or to offer prescriptions without identifying those mechanisms.

In Section 3 of this article, we show that group polarization is predicted by a highly rational process of Bayesian inference. If individuals have independent information, which is shared in the deliberative process, then Bayesian learning predicts that ex post opinions will be both more homogeneous within the group and more extreme than individual opinions. Bayesian inference suggests that individuals with access only to their own private information will recognize their ignorance and hew towards the center. The information of the crowd provides new data, which should lead people to be more confident and more extreme in their views. Because group members are listening to one another, it is no puzzle that their post-deliberation opinions are more extreme than their pre-deliberation opinions. The phenomenon of group polarization, on its own, does not imply that crowds are anything but wise; if individual deliberators tend to believe that the earth is round rather than flat, nothing is amiss if deliberation leads them to be firmer and more confident in that belief.

WaPo: The Senate Balks

The Senate Balks. Washington Post Editorial
Why President Obama should heed calls for a more focused stimulus package
WaPo: Thursday, February 5, 2009; page A16

Today in The Post, President Obama challenges critics of the $900 billion stimulus plan that was taking shape on Capitol Hill yesterday, accusing them of peddling "the same failed theories that helped lead us into this crisis" and warning that, without immediate action, "Our nation will sink deeper into a crisis that, at some point, we may not be able to reverse." A thinly veiled reference to Senate Republicans, this is a departure from his previous emphasis on bipartisanship. Still, as a matter of policy, Mr. Obama is justified in signaling that the plan should not be tilted in favor of tax cuts -- and that the GOP should not waste valuable time trying to achieve this.

However, ideology is not the only reason that senators -- from both parties -- are balking at the president's plan. As it emerged from the House, it suffered from a confusion of objectives. Mr. Obama praised the package yesterday as "not merely a prescription for short-term spending" but a "strategy for long-term economic growth in areas like renewable energy and health care and education." This is precisely the problem. As credible experts, including some Democrats, have pointed out, much of this "long-term" spending either won't stimulate the economy now, is of questionable merit, or both. Even potentially meritorious items, such as $2.1 billion for Head Start, or billions more to computerize medical records, do not belong in legislation whose reason for being is to give U.S. economic growth a "jolt," as Mr. Obama himself has put it. All other policy priorities should pass through the normal budget process, which involves hearings, debate and -- crucially -- competition with other programs.

Sen. Susan Collins of Maine is one of the moderate Republicans whose support the president must win if he is to garner the 60 Senate votes needed to pass a stimulus package. She and Democrat Ben Nelson of Nebraska are working on a plan that would carry a lower nominal price tag than the current bill -- perhaps $200 billion lower -- but which would focus on aid to states, "shovel-ready" infrastructure projects, food stamp increases and other items calculated to boost business and consumer spending quickly. On the revenue side, she would keep Mr. Obama's priorities, including a $500-per-worker tax rebate.

To his credit, Mr. Obama continues to seek bipartisan input, and he met individually with Ms. Collins for a half hour yesterday afternoon. We hope he gives her ideas serious consideration.

WaPo: Zimbabwe's False Hope

Zimbabwe's False Hope. Washington Post Editorial
South Africa demands that the West aid a 'unity' government under Robert Mugabe. How to answer?
WaPo, Thursday, February 5, 2009; Page A16

SOUTH AFRICA has won a round in its relentless campaign to preserve Robert Mugabe's hold over a dying Zimbabwe. With the help of its allies in the Southern Africa Development Community, South Africa succeeded last week in coercing opposition leader Morgan Tsvangirai -- the winner of last year's presidential election -- into accepting a subordinate role in a "unity" government led by the 84-year-old strongman. The deal, which Mr. Tsvangirai bravely resisted for months, will leave Mr. Mugabe in charge of the country's last functioning institutions -- army and police forces that have been waging a campaign of murder, rape and torture against the opposition and human rights activists.

Mr. Tsvangirai relented because he believed that the frightful humanitarian emergency in Zimbabwe left him with little choice. The United Nations estimates that 7 million of the 9 million people remaining in the country need food aid this month. A cholera epidemic has so far infected more than 62,000 and killed 3,100. Schools, hospitals and most businesses have closed, the national currency has been discarded and unemployment is over 90 percent.

The opposition will be placed in charge of the finance, health and education ministries, which it hopes will allow it to solicit and distribute aid to prevent mass death from starvation and disease. As South Africa and its client more cynically calculate, Mr. Tsvangirai's appointment will compel the United States, Britain and other Western governments to lift sanctions and renew economic support, thus preventing what would otherwise be the inevitable collapse of Mr. Mugabe's regime.

The misery of Zimbabwe is indeed compelling -- but the Obama administration and other Western governments should reject South Africa's demands. It long ago became clear that Zimbabwe cannot recover as long as Mr. Mugabe remains in power. South Africa and other neighbors who insist on supporting the criminal regime are free to supply aid. But Western governments must maintain their sanctions -- especially those aimed at individual members of the Mugabe regime and the companies they control.

A State Department statement this week said the administration would consider new assistance and the lifting of sanctions "when we have seen evidence of true power sharing as well as inclusive and effective governance." What should that include? Mr. Tsvangirai himself is demanding the freeing of more than 30 opposition activists from prison. Legislation must be passed giving the opposition a measure of control over security forces, and replacing the central bank president -- a Mugabe crony -- with a technocrat. Restrictions on the press must be lifted and foreign journalists admitted. Perhaps most important, the government must agree on a plan for a new presidential election, with guarantees for fairness and full international monitoring.

If these steps were taken, Western aid to Zimbabwe might serve some purpose. But they won't be. "Zimbabwe is mine" is Mr. Mugabe's only principle. The first step in any rescue must be prying the country from his grip.

Criticism of Windpower’s "Homes Served" Claims

Beware Windpower’s "Homes Served" Claims, by Glenn Schleede
Master Resource, February 4, 2009

People who use the phrase “homes served” to describe the potential output from one or more wind turbines either do not understand the facts about wind turbines, believe false claims put forth by the wind industry, or are trying to mislead their reader or listener.

False statements about “homes served” by wind developers and their lobbyists are bad enough, but it is discouraging to hear politicians, reporters, and others adopt and regurgitate them.

The concept of “homes served”The concept of “homes served” has long been used in the electric industry as a way of giving some idea of the amount of electricity that would be produced by a proposed generating plant without using such terms as megawatt- or kilowatt-hours, which mean little to most people. The concept is always misleading since residential users of electricity (i.e., “homes served”) account for only 37% of all U.S. electricity use. [i]

Claims about “homes served” by a proposed “wind farm” or other generating unit are usually based on a three-step calculation:

Start with an assumption (i.e., a guess) about the amount of electricity that would be produced annually by a “wind farm” or other generating unit, in kilowatt-hours (kWh) or megawatt-hours (MWh).[ii]

Employ an estimate (in kWh) of the amount of electricity used annually by an average residential customer in the area or state where their “wind farm” is located. [iii]

Divide the assumed annual production of electricity by the estimated annual average residential electricity use.

“Homes Served” can be useful when talking about reliable generating unitsAlthough misleading, the concept of “homes served” has some validity when used to describe the output from a reliable, “dispatchable” electric generating unit, that is, one that can be called upon to produce electricity whenever it is needed. Such generating units are the ones that are counted on by the electric industry to provide a reliable supply of electricity for customers every day, at all hours of the day, year round.

“Homes served” is NOT a valid concept when referring to wind turbines and “wind farms”Using “homes served” when talking about wind turbines and “wind farms” is both false and misleading for several reasons.

1. NO homes are really served by wind.No homes are served by wind energy because wind turbines produce electricity only when wind speeds are in the right speed range (see below). Homes using electricity from wind must always have some reliable energy source immediately available to provide electricity when there is insufficient wind unless the residents are content to have electricity only when the wind is blowing in the right speed range – a condition that few in America are willing to tolerate.

2. Electricity from wind turbines is inherently intermittent, volatile, and unreliable.Wind turbines produce electricity only when the wind is blowing within the right speed range. Wind turbines typically start producing electricity at about 6 mph, reach rated capacity at about 32 mph, and cut out at about 56 mph. Unless a home owner has an expensive battery storage system, such volatile and unreliable output wouldn’t be suitable for lights, heating, computers, appliances, or many other purposes.

3. Electricity from “wind farms” is seldom available when most needed by home users.Again, the output of wind turbines is dependent on wind conditions. Depending on the specific area, winds tend to be strongest at night in cold months. However, electricity demand in most areas of the United States is heavily concentrated during daytime and early evening hours. Even worse, wind turbines cannot be counted on to produce at the time of peak electricity demand, which often occurs in late afternoon on hot weekdays in July and August. At the time of peak electricity demand, wind turbine output may be in the range of 0% to 5% of rated capacity.

4. The electricity produced by wind turbines is low in value compared to electricity from reliable generating units.That’s because it is inherently intermittent, volatile, unreliable, and not available when most needed—as described in points 2 and 3 above.

5. Not all the electricity produced by a wind turbine actually reaches customers or serves a useful purpose. Some electricity is lost as it is moved over transmission and distribution lines that carry the electricity from generating units to homes, offices, stores, factories and other users. The amount of electricity that is lost depends on the distance and the condition of lines and transformers. These “line losses” are a significant issue for wind energy because huge, obtrusive wind turbines (often 40+ stories tall) and “wind farms” are not welcome near metropolitan areas that account for most electricity demand. Therefore, they are often located at some distance from the areas where their electricity is needed and so require expensive transmission-line capacity, which they use inefficiently. (Ironically, the lucrative federal tax credits provided to “wind farm” owners are based on electricity produced, not the lesser amount that actually reaches customers and serves a useful purpose.)

6. Claims of “homes served” by wind energy are additionally misleading because of the high true cost of electricity from wind turbines.Claims that the cost of electricity from wind turbines is “competitive” with the cost of electricity from traditional sources are false. Such claims typically do not include the cost of (a) the huge federal and state tax breaks available to “wind farm” owners,[iv] or (b) the cost of providing the generating capacity and generation that must always be immediately available to “back up” intermittent, unreliable wind turbine output and keep electric grids reliable and in balance.

Claims of “homes served” should always be challenged Any use of the “homes served” assertion in connection with a “wind farm” should be challenged, whether the assertion is from a wind industry lobbyist, other wind energy advocate, political leader, other government official, or reporter. They should be required to explain each of their assumptions and calculations, and admit that industrial scale wind turbines are useless unless reliable generating units are immediately available to supply electricity when wind is not strong enough to produce significant electricity. Almost certainly, their assertions will be false.

What valid claim could wind industry officials make?As explained above, wind industry developers, promoters, and lobbyists – and politicians and reporters — should never use the false and misleading “homes served” metric. In theory, they could justify an assertion that the estimated amount of electricity produced by a “wind farm” – once discounted for line losses which are likely to be in the range of 5% to 10% — may be roughly equal to the amount of electricity used annually by X homes – after doing a calculation such as that outlined earlier. However, as indicated above, even this assertion would be misleading because it ignores the fact that the output from wind turbines is intermittent, volatile, unreliable, and unlikely to be available when electricity is most needed.

Other false and misleading claims about wind energyAs shown above, “homes served” is not the only or the most important false claim made about wind energy. Other false claims about wind energy include the following:

It is low or competitive in cost. In fact, its cost is high when all true costs are counted.
It is environmentally benign. In fact, it has significant adverse environmental, ecological, scenic, and property value impacts.
It avoids significant emissions that would otherwise be produced. In fact, it avoids few.
It provides big job and economic benefits. In fact, there are few such benefits.
It reduces U.S. dependence on imported oil. In fact, it does not.
It reduces the need for building reliable generating units in areas experiencing growth in peak electricity demand or needing to replace old generating units. The opposite is true.

Such claims as these have been made often during the past decade and more by the wind industry and other wind advocates. Only during the past 3–4 years have these claims begun to be demonstrated as false and misleading. The facts about wind energy are beginning to show up in the media but, unfortunately, have yet to be understood by most political leaders and regulators.

Full text w/references here http://masterresource.org/?p=677