Entries from March 2011

Obama Energy Plan Won’t End Our Oil Addiction

March 31st, 2011 at 11:55 pm 55 Comments

Cutting oil imports by one-third, as President Obama proposed, is a fine goal. The biggest energy security problem we face, however, is not dependence on imported oil. It’s dependence on oil, period.

Oil dependence is a strategic liability because oil is traded in a globally integrated market, where events over which the U.S. has little or no control – rising demand in Asia, civil commotion in dysfunctional petro-states – can roil the market and drive up prices.

Sure, we could import more oil from those nice Canadians and hand over our public lands and territorial seas to oil producers. For anyone who believes Doc Hastings’ rhetoric that doing so would translate automatically into lower gasoline prices and less vulnerability to OPEC machinations, we’d be happy to mail you a prospectus about buying Brooklyn Bridge time shares.

The problem is that the U.S. is not an island unto itself. Oil produced here would enter a global pool for purposes of price setting. Further, we consume 25 percent of global production – which is three times what we produce – and hold only a 2 percent share of global reserves. U.S. dependence on the world market wouldn’t go away even if Congress acceded to every item on the American Petroleum Institute’s wish list.

In the years ahead, as a 2010 research brief from Resources for the Future pointed out, the oil market will be influenced by trends with worrisome implications for energy security – rising energy demand in Asia, more production from OPEC, more control over oil by national oil companies serving political as well as economic agendas, and longer, more vulnerable supply lines bringing in oil from costly, difficult production areas in the remote Arctic and in deepwater.

In March 17 testimony before the House Natural Resources Committee, Energy Information Administration chief Richard Newell tried to insert a few facts through the ideological filters that most members of that committee have stuffed into their ears.

“Long term, we do not project additional volumes of oil that could flow from greater access to oil resources on federal lands to have a large impact on prices given the globally integrated nature of the world oil market and the more significant long-term compared to short-term responsiveness of oil demand and supply to price movements.”

There is another thing to consider, Newell told the committee. Given the outsize importance of OPEC oil in the supply-demand equation, “another key issue is how OPEC production would respond to any increase in non-OPEC supply, potentially offsetting any direct price effect.”

In other words, if the U.S. insists on speeding up depletion of its 2 percent share of global oil reserves in a vain attempt to drive down prices, the House of Saud could dial back the valves to ensure that prices stay within the Goldilocks range that serves the kingdom’s interests – not too low, so the regime has enough money to smother domestic discontent with fiscal largesse, and not too high, so that the U.S. and other addicts in the shooting gallery don’t get uppity ideas about aggressively expanding use of oil alternatives.

Getting out of the oil dependence pickle will not happen overnight, on Obama’s watch, or on that of his successor. We would start moving in the right direction, however, if Congress were less interested in partisan games and more interested in seeking out energy policy agreements that both sides could live with.

Yes, more domestic oil production without giving the store away to oil producers would help a bit, but we’ll need tighter fuel efficiency standards and adequate funding for R&D into fuel and motive technologies that could compete with oil.

Someday, Congress might be willing to have a rational discussion about a revenue-neutral carbon tax. If and when that day comes, we’ll be closer to solving the energy security riddle.


Qaddafi Envoy in UK for Talks

March 31st, 2011 at 5:30 pm Comments Off

The Guardian reports:

Colonel Gaddafi’s regime has sent one of its most trusted envoys to London for confidential talks with British officials, the Guardian can reveal.

Mohammed Ismail, a senior aide to Gaddafi’s son Saif al-Islam, visited London in recent days, British government sources familiar with the meeting have confirmed.

The contacts with Ismail are believed to have been one of a number between Libyan officials and the west in the last fortnight, amid signs that the regime may be looking for an exit strategy.

Disclosure of Ismail’s visit comes in the immediate aftermath of the defection to Britain of Moussa Koussa, Libya’s foreign minister and the country’s former external intelligence head, who has been Britain’s main conduit to the Gaddafi regime since the early 1990s.

A team led by the British ambassador to Libya, Richard Northern, and MI6 officers, embarked on a lengthy debriefing of Koussa at a safe house after he flew into Farnborough airport on Wednesday night from Tunisia. Government sources said the questioning would take time because Koussa’s state of mind was “delicate” after he left his family in Libya. The Foreign Office declined “to provide a running commentary” on contacts with Ismail or other regime officials. But news of the meeting comes amid mounting speculation that Gaddafi’s sons, foremost among them Saif al-Islam, Saadi and Mutassim, are anxious to explore a way out of the crisis in Libya.

“There has been increasing evidence recently that the sons want a way out,” said a western diplomatic source.

Although he has little public profile in either Libya or internationally, Ismail is recognised by diplomats as being a key fixer and representative for Saif al-Islam.

According to cables published by WikiLeaks, Ismail has represented the Libyan government in arms purchase negotiations and acted as an interlocutor on military and political issues.

“The message that was delivered to him is that Gaddafi has to go and that there will be accountability for crimes committed at the international criminal court,” a Foreign Office spokesman told the Guardian , declining to elaborate on what else may have been discussed.

Tokyo Faces Summer of Rolling Blackouts

March 31st, 2011 at 5:08 pm 6 Comments

CNN reports:

The loss of two nuclear power plants means the Tokyo region will face the summer peak demand with a loss of about 20% of capacity, the plant’s owner said Thursday.

Other utilities can supply only a limited amount of additional electricity to the Tokyo Electric Power Co. grid because Tokyo Electric runs power at a different frequency from the rest of the country, according to industry officials.

And with two of Tokyo Electric’s nuclear power plants knocked offline since the March 11 earthquake that battered northern Japan, the company said it sees no alternative to a series of rolling blackouts across the Tokyo region.

Tokyo Electric, Japan’s largest power utility, uses 50-cycle power, while most of the rest of the country uses 60-cycle electricity. Because of a lack of machinery, only a limited amount of about 1 million kilowatts can be converted and shared, according to industry officials.

Tokyo Electric said it doesn’t yet know how the blackouts will be implemented but said the electric supply will be narrowed by as much as 10 million kilowatts, roughly 20%.

Short of the construction of new power plants, there is no end of the shortage in sight. Some mothballed facilities may be brought back online, but this would not compensate for the loss of the Fukushima Daiichi and Fukushima Daini nuclear plants.

Some blackouts have begun in eastern and northern Japan already.

Both plants have been shut down since the earthquake and tsunami, and Daiichi has suffered several explosions and leaked radioactivity into surrounding areas.

Poll: Millennials Still Back Obama

March 31st, 2011 at 4:51 pm 15 Comments

ABC News reports:

President Obama’s job approval rating among an important voting bloc — 18-29 year-olds — rose to 55 percent, a six percentage point uptick since last October, according to a poll released Thursday by the Institute of Politics at Harvard University.

Among students on four-year college, young voters who turned out for Obama in large numbers in 2008, the president’s approval rating stands at 60 percent — a nine point increase over the past five months.

The results of the new survey were announced Wednesday by Trey Grayson, Director of Harvard Institute of Politics located at the Kennedy School of Government and the Institute’s polling director, John Della Volpe.

The young Americans were also asked whether they were more likely to vote for President Obama in 2012. Thirty-eight percent said they were, 25 percent said they planned to vote Republican and 36 percent were still undecided.

Of those surveyed, 59 percent voted for Obama in 2008 compared to 30 percent who voted for McCain and four percent who cast their ballot for another candidate.

Much like their older counterparts, the majority of 18-29 year-old voters — 57 percent — listed the economy as their top issue of concern, followed by health care (10 percent) and national security (6 percent).

“The overall personal financial situation for Millennials has not improved over the past year,” according to analysis of the findings by the Institute of Politics. “In February 2010 IOP polling, when asked to rate their personal financial situation 45 percent of Millennials believed their situation was ‘very’ or ‘fairly bad.’  Asked the same question in February 2011, 43 percent said the same with 55 percent describing theirs as ‘very or fairly good.’”

Funeral Held for Ferraro

March 31st, 2011 at 4:43 pm Comments Off

Politico reports:

Geraldine Ferraro, the first woman to run on a national presidential ticket, was remembered Thursday for her determination, courage and outspoken feminism.

Secretary of State Hillary Clinton, former President Bill Clinton and former Secretary of State Madeline Albright were among the speakers who eulogized her during a private ceremony at the Church of St. Vincent Ferrer on the Upper East Side of Manhattan.

Hundreds of people crowded into the church to celebrate Ferraro, who died Saturday at the age of 75 after a 12-year battle with multiple myeloma, a type of blood cancer.

Ferraro served three terms representing part of Queens in the House, and made many influential friends who were on hand for the service. Besides those who spoke, House Minority Leader Nancy Pelosi (D-Calif.), former Rep. Jane Harmon (D-Calif.) and Sen. Barbara Mikulski (D-Md.) also attended, as did the current and former governors of New York – Andrew Cuomo and Mario Cuomo – and New York City Mayor Michael Bloomberg, among others.

Also there to remember Ferraro was Walter Mondale, the former vice president and Minnesota senator who chose Ferraro as his vice presidential running mate in 1984.

His pick of Ferraro, he said Thursday after the service, was a transformative movement. “It wasn’t just politics that was reset. Change can be seen everywhere in American life,” he said, The Associated Press reported.

“Every day she was patronized in a way not experienced by her male counterparts,” Mondale said. “But she would not relent. She came back each day tougher and better.”

Cain: Media Afraid ‘Real Black Man’ Might Run

March 31st, 2011 at 4:38 pm 15 Comments

CNN reports:

Potential 2012 presidential candidate Herman Cain said the media is afraid “a real black man might run against Barack Obama.”

At a Wednesday appearance in Florida, Cain said if he were elected president “you get a chance to be batting .500″ with black presidents.

“If you think about the first 43 presidents, they were all white. Were they all great? I think you have a few duds in that group,” Cain said according to a video posted on Shark Tank, a local political site in the sunshine state. “So now you get a chance to be batting .500.”

The former Godfather’s Pizza CEO and radio host, who previously launched a presidential exploratory committee, also took shots at the media and GOP elite.

“The political establishment is not going to elect Herman Cain. The political elite’s are not going to support me,” Cain said. “ABC, CBS and NBC they’re still in denial that I’m even a legitimate candidate.”

Tea Party Not Sold on Prez Bachmann

March 31st, 2011 at 4:32 pm 13 Comments

Politico reports:

Michele Bachmann pumped up tea party activists with a fiery speech decrying the federal budget deficit Thursday — but those same activists don’t have a big appetite for her presidential flirtations.

“She’s got great ideas and presents herself well,” Janice Jolly said of the Minnesota congresswoman and founder of the Tea Party Caucus. “But I really like Sarah Palin.”

Jolly, a California native who now lives in Maryland, praised Palin as a “real western woman” saying she appreciated the former Alaska governor’s hunting and fishing background.

John Balazek, also of Maryland, said he liked Florida Rep. Allen West’s ideas, and that the country should get back to constitutional principles. But he said he’d also be in favor of a West-Palin or Palin-Bachmann ticket.

Others gathered at the rally, organized by Tea Party Patriots, named Kentucky Sen. Rand Paul as their pick.

Bachmann’s speech to more than 100 activists at the Capitol — a number organizers said was affected by rainy weather — was delivered against the backdrop of a looming government shutdown.

Parents Blame Qaddafi For Airstrike Death

March 31st, 2011 at 4:23 pm Comments Off

The New York Times reports:

GHARYAN, Libya — Standing at the grave of an 18-month-old baby on Wednesday, officials of the Qaddafi government presented the first specific and credible case of a civilian death caused by Western airstrikes.

But relatives speaking a few yards away said they blamed Col.Muammar el-Qaddafi and welcomed the bombs.

“No, no, no, this is not from NATO,” one relative said, speaking quietly and on condition of anonymity for fear of retaliation. The Western planes had struck an ammunition depot at a military base nearby, he said, and the explosion had sent a tank shell flying into the bedroom of the baby, a boy, in a civilian’s home. “What NATO is doing is good,” he said, referring to the Western military alliance that is enforcing a no-fly zone in Libya.

The testimony of the boy’s parents, a hole in the wall, damage to the house, quietly grieving family members, and a baby-sized and freshly covered grave appeared to confirm the relative’s account of the death.

That made the baby, Siraj Najib Mohamed Suessi, the first specific and credible civilian death from the airstrikes that the Qaddafi government has presented in 10 days of official statements decrying what they say are widespread casualties.

The Qaddafi government’s press office drove journalists 70 miles to this mountain town south of Tripoli to get to it. But as government minders directed journalists to the house and the grave, several residents approached foreign correspondents to tell them surreptitiously of their hatred of Colonel Qaddafi.

“He is not a man. He is Dracula,” one said. “For 42 years, it has been dark. Anyone who speaks, he kills. But everyone here wants Qaddafi to go.”

Click here to read more.

Newt to GOP House: Don’t Compromise

March 31st, 2011 at 4:04 pm 9 Comments

Politico reports:

As Congressional negotiators near a deal on funding the government for the remainder of the fiscal year, former House Speaker Newt Gingrich said it would be a “profound mistake to go for a compromise without forcing the Senate Democrats to prove how liberal they are.”

The presidential hopeful didn’t say Republicans should reject the additional $33 billion in cuts that emerged in the last 12 hours, but he said he hoped and believed “that the Republican leadership here is going to be very firm in saying that they want the $61 billion.” The deal that’s reportedly under consideration doesn’t add up to $61 billion in cuts.

Gingrich made his comments after a meeting with House Republican freshmen in the Longworth House Office building where the former speaker discussed health care, leadership and blamed the “the 23 Democratic senators that are up for reelection” for stopping the “very dramatic changes” the GOP has proposed.

As the government faces its most serious threat of a shutdown since his speakership, Gingrich said he told the group that their “goal should be to avoid a shutdown, while not giving in on their core principles.”
But there’s a caveat.

“They can’t walk into a room and have President Obama think that they can be blackmailed by yelling the word shutdown,’ he said. “So I think they should seek to keep the government open, I think that they should try to find ways to pass continuing resolutions that can be signed, but I don’t think they can allow President Obama to reject the outcome of the 2010 election and dictate on his terms what he’ll do.”

Gingrich said his “prediction is that Republicans in the House are going to say they want $61 billion and they’re going to fight to get $61 billion.” On health care, the Georgian said freshmen should “have an absolute commitment to de-funding ObamaCare implementation this year.”

Ryan Right to Punt on Social Security Reform

March 31st, 2011 at 3:59 pm 26 Comments

A new budget proposal from Rep. Paul Ryan will make Medicare and Medicaid changes while leaving Social Security more-or-less untouched. Ryan—whose own Social Security Plan is worse than the status quo — is right, politically and practically, to make these programs his priorities.

In many ways, Medicare and Medicaid may actually be easier to modify than Social Security.  Those programs would still be able to accomplish their fundamental goals after reform. Most reform proposals for Social Security however would change the system fundamentally.

Medicare (which provides health insurance for the elderly and disabled) and Medicaid (which provides insurance for the poor) have both grown at unsustainable rates. Both, currently, are less-than-total insurance programs: Medicare, in its plain vanilla variety actually requires a 20 percent (ouch!) co-insurance in many cases while Medicaid, which is mostly “free” to beneficiaries, rations care because low reimbursement rates make it very difficult to see specialists.

The promise of both programs is that the government will help with medical care but won’t always do absolutely everything. Medicaid is means-tested while Medicare, through payroll taxes, premiums paid by beneficiaries, and the cost of supplemental policies, does already have an income-related component. Benefits have generally increased in Medicare in recent years—drugs, preventative exams and more have been added—and reducing benefits in some ways (not paying for ineffective back surgery) could logically follow.

Changing these programs even in ways that might seem radical such as replacing Medicare with a voucher program doesn’t fundamentally change the effort to provide a significant (but not limitless) form of medical coverage.

Social Security, on the other hand, makes a very particular promise: everyone pays the same percentage into the system and, upon reaching retirement age, everyone gets a modest pension (up to a limit) that’s directly related to working income, goes up with average wages each year, and is a foundation for retirement.

Although the benefits aren’t technically guaranteed as a matter of law, the Social Security Administration has bonds (backed only by the full faith and credit of the government rather than any real assets) that will pay every penny promised until around 2041. The program isn’t social assistance (if you never work, you don’t get a penny) and provides decidedly meager benefits to people at the bottom. But politics and the full-faith-and-credit backing of bonds means that it’s a close-to-certain retirement program.

Changes to the system that would add private, individually owned-accounts, detach benefits from pre-eligibility-age earnings through means testing, or establish a minimum benefit for people who work their entire lives for low wages would represent fundamental changes in what the system does.

I personally favor doing all three of these things and think they would be good for the country but, relative to tweaking Medicare and Medicaid, they are fundamental changes: all of them would move Social Security in the direction of becoming a social assistance program rather than a pension plan. Other proposals such as simply cutting benefits across the board and then adding tax advantages to encourage more private investments or even transforming the program into a simple minimum income guarantee also would create fundamental changes in what Social Security does.

Medicare and Medicaid are in more trouble than Social Security and cost more. For the moment, Ryan is right to make them his top priorities.