Being Serious About “GOING GREEN”

• The Liberal Politicians aren't serious about "Going Green"
• Big Oil needs to be encouraged to be "Mean Green"
• Government has no interest or incentive to "Go Green"
• We need to use tax incentives and tax breaks to help our nation "Go Green"
• Cap and Trade does NOT help anyone, hurts the poor, handicapped, and elderly, and creates an excuse to pollute
• Increase Mass Transit infrastructure
• Unless China and India agree to reduce their carbon emissions, nothing we do will matter
• Reduce costs for renewable energy
• There is no such thing as "clean coal".  There is "cleaner" coal

If you listen to the national debate about the environment you will hear a lot of politicians talk about “going green”, global warming and the impact that the United States has on rising global temperatures and carbon footprint.  What you don’t hear being discussed is anything that resembles a coherent or reasonable energy policy.  You will hear politicians talk about how they want to go green and would support green measures.  However, they routinely vote down support for developing programs that rely more on renewable energy sources and clean energy sources and they themselves do not practice a green lifestyle.

The biggest hypocrite as far as “going green” is Al Gore.  Using faulty studies, inaccurate data and wishful thinking, he has created a name for himself as an environmentalist.  However, when you live in a huge home, (his energy bill is somewhere around $30,000 per month) you really have to ask yourself if he is truly serious about going green or if he’s just politicizing the debate for his own benefit.  If even the National Geographic disputes what Al Gore’s claims are, then I would have a tendency to believe National Geographic over Al Gore.

The next biggest hypocrite on the list is Senator Feinstein who has routinely attacked our ‘oil economy’, oil companies and President Bush and Vice-President Cheney for being big oil men protecting Big Oil at the expense of the American public.  Yet when proposals sponsored by the very liberal Tom Harkin, and co-sponsored with the very conservative Chuck Grassley in support of ethanol and other cleaner burning fuels, Senator Feinstein would not let them come out of committee to have a vote by the Senate or worked very actively against these proposals to kill them on the Senate floor.  During one particularly heated debate apparently in the energy sub committee, Senator Feinstein was asked what her objections to that was to ethanol,  she replied “Ethanol is not the answer.”  She continued to support a product called MBTE which has been shown by several organizations to be extremely toxic to the environment, even though it does cut down on greenhouse gas emissions and smog particulate.  You would think that such a verdant and sometimes militant anti-oil person would be more in favor of ethanol, a plant based and renewable product, rather than MBTE, an oil based pollutant.  From Sen. Feinstein’s public statements, her objections to ethanol basically come down to logistical questions such as where would they store it and how would they mix it.  However, her other public statements about this issue have shown she supported MBTE even thought it was very toxic to the environment.  It turns out that MBTE is a product of the oil industry and one of her biggest contributors.  In fact, the oil industry, through different political action committees,  has given Sen. Feinstein one of the largest payouts from the oil industry of any Senator, not just Republican or Democrat, but of both parties.  So it’s obvious she has no vested interest in “going green”.

President Obama talks about how he wants to have a cleaner energy profile for the American people.  He talks of clean coal and solar and wind.  However, in his stimulus package he provides absolutely no tax breaks or tax incentives to help offset the costs of people who want to go green, but can’t afford to.  He provides no incentive for Detroit to produce a green car.  He just nationalized them like the Communists do, screwing the bondholders out of their fair share, and giving them to the Unions.  As we all know, the Unions main priority is not “Going Green”, but maintaining lifestyles.  Soon, he reasons, we’ll all enjoy our own electric buggies.
The truth is the government does not want to lose oil revenues.  Oil is taxed multiple times from the time it is pumped out of the wells in the Middle East or stripped from the bitumen sands in Canada to the time it arrives in the gas tanks of our vehicles.  It is taxed as it is pulled out of the ground.  It is taxed as it is pumped into the tankers.  The tankers are taxed at a special rate because they are carrying oil which is higher than other tankers carrying other commodities.  It is taxed as it comes into port and is off loaded.  It is taxed as it is refined into different products.  It is taxed as it is carried over the road and finally it is taxed at the gas pump in the form of a gas tax.  The more you drive or the less efficient your car is, the more the government receives in gas tax.  So the truth is the government has no incentive to get rid of oil at all or gasoline at all.

In fact, they rely on that gas tax so heavily that last year when gas was $4 and over $4 a gallon, they refused to repeal the nearly $1 a gallon tax that you pay at the pump for gas.  Contrary to what most people think, income taxes don’t go for new roads or new bridges or any of the infrastructures of interstate transport, your gas taxes pay for that.  It is very interesting to read the argument from last year about trying to repeal the gas tax on a temporary basis and the shortfall that the government would have.  Even the pro-liberal “Senators and Congressmen” who want to increase social programs and understand that the higher gas taxes were punishing the poor still did not consider reducing the gas tax.  Surprisingly, it was the conservatives, who are portrayed as mean moneygrubbers, who underscored the effect the high gas prices were having on the poor and indigent, and tried  to do something, the quickest being repealing the gas tax on a temporary basis.  There was fierce opposition from the “liberals”, and the gas tax repeal was defeated.

Yet if the government was serious about reducing America’s carbon footprint and making America more efficient.  They would be offering all kinds of incentives to go with the “green” technologies and improved efficiency through the use of tax credits and other incentives directed at the consumers.

For example, I have an old inefficient furnace and to replace it with a 90% efficient furnace (the efficiency of my furnace is somewhere around 68% to 70%) would cost me somewhere right around $2800.  With the cost savings of the higher efficiency of this unit, it would take me close to 25 years to pay it off and to see my investment returned to me.  I can get a small break from MidAmerican Energy.  It is somewhere around $300, but that still leaves over $2000 coming out of my pocket.  That’s the price everybody else would have to pay as well and I can tell you that most people are not going to put an over $2000 furnace in their basement because it’s a “green thing” to do, but rather keep operating under their old furnace because it is much cheaper to repair it than it is get a new furnace.  If you offered a tax credit to everybody who upgraded their furnace to a 90% or better furnace, most people would be willing to do that.  It is the same argument for things like household windmills and solar panels.

On the windmills and solar panels issue, many municipalities across the nation including Urbandale do not allow you to have a windmill or solar panels.  I found this out when I was trying to “go green” and heat with a solar panel and the City of Urbandale  Even with the additional benefit of “free” energy, the solar panels were so expensive that I could not afford to get enough of them to be able to heat my home or my water.

A few years ago you couldn’t open the paper without finding articles about how wildly popular huge SUV’s were like the Ford Expedition or the Chevy Suburban.  There are cartoons about the SUV’s becoming so big that they were simply 4x4 school buses.  A lot of people claim that the SUV’s were so popular because they were such great cars, had so much room, were the new luxury vehicles and so what if they only got 12 miles to the gallon.  The truth is that there was a tax code change that said if you had a vehicle that was over 6500 GVWR, that vehicle was deductible up to 100,000 dollars instantly off your income for the year in which you purchased it.  The law was designed to help the construction trade and farmers with the big trucks that they have to use for their businesses.  However, the unintended consequence was that you could also deduct these huge SUV’s.  The response was such that people with small businesses and even larger businesses would buy two Suburbans or two Expeditions, write it all off in the one year and larger companies simply bought fleets of the giant SUV’s.  But if you buy a small fuel efficient vehicle, and most of those run in the mid $20,000 and up, you can only deduct $15,000 and that deduction is over five years.  So, you do get something, but nowhere near what you get for an SUV.  So there was a huge surge in SUV popularity until they changed the tax code.  And now you can only deduct $25,000 on your vehicle plus all the other related expenses, which means if you go and buy and SUV today you’ll be able to deduct somewhere around $33,000 in one year.  That is still far better than the $15,000 you can deduct for a fuel efficient car.

I’m going to contrast that story with a story of my brother who is very conservative, but very green.  And, yes, those two things go hand in hand.  My brother needed a new vehicle and he went down to the local Toyota dealer and wanted to by a hybrid for fuel economy and, in his mind, going green was the right thing to do.  I remember how excited he was when he said he was going to buy one and since I lived in the town that he was buying the car from, I drove over to take a look at it.  He bought a Toyota Camry hybrid.  It is a very, very beautiful vehicle.  It’s well designed.  It had a lot of amenities, but the price tag was somewhere over $46,000, and the one that was not hybrid for just about $35,000.  So there’s more than a $10,000 gap between the prices on the list.  Joe had negotiated a deal, so the price was $2,000 or $3,000 less and the gap between the gas versus the hybrid one was only about $8,000.  His grand total deduction for that year, for that single car, was $2,500 bonus tax deduction for the hybrid along with the regular $15,000 over five years.  So, essentially he got to deduct $17,500 over five years for his hybrid “going green” vehicle and I, buying my huge SUV, was able to deduct close to $54,000 in one year.  So, you can see how the tax code plays a part in the resistance to “going green”.

The problem with our reliance on oil is that we can’t control it.  If OPEC decides the price of oil is going to be, say, $60 or $80 a barrel, there’s not much we can do to deflect that.  We don’t have a lot of influence over there and it makes oil companies do things that are environmentally damaging in order to extract the oil.  A case in point is the bitumen sands in Canada.  This year the National Geographic had a good article on the extraction process.  And what it essentially does is it sucks the oil out of the sand, but leaves all kinds of contaminants in these big open pits and water sheds.  There is a story about how a duck had landed on one of these ponds thinking it was a regular pond, had landed and had died almost immediately from the toxins in this waste pond.  An aerial shot of the operation shows that these ponds are very close to a river that runs through this area and much like a hog confinement spill would be very disastrous if anything would happen poisoning the water supply, literally for hundreds of miles.  Plus it’s in a very ecologically delicate area.

The other thing that President Obama has talked about is clean coal.  I can tell you unequivocally there is no such thing as “clean coal”.  All coal is very polluting and I understand that Iowa has a very large coal industry and has had a very large coal industry for a long time.  However, the clean coal option is better than what we’re doing but is nowhere near a solution.  It will simply drive up expenses for your energy.

At least part of the solution is to utilize the tax code to buy tax breaks for equipment that meet a certain standard, such as having at least a 90% efficient furnace, windmills, or solar panels.  Also, a 100% tax deduction in the year you buy things like a new furnace or solar panels, windmills, fuel efficient cars that are either electric or having mileage in excess of 35 miles per gallon, or whatever standard you would want to set, and ensuring that the foreign energy that we import is clean energy or it will face a tax to make up for its carbon footprint.  That would include products made in foreign countries.  Foreign countries would have to declare what the carbon footprint was for every item they imported.  And that way we could start affecting globally the increase in carbon emissions.  Since China has been responsible for 60% of all carbon emissions since 2002 and India has been responsible for somewhere between 25% and 30% of all carbon emissions since 2002, I believe that those countries should have a carbon footprint tax on their products. 

I also do not believe that a cap and trade system for carbon emissions will work.  President Obama has proposed this based upon the European style of the cap and trade tax on European businesses and it has been absolutely devastating for European businesses.  It has not obtained the results the Europeans had hoped for and at this moment there is a debate going on in the United Kingdom about repealing this cap and trade tax.  The problem with doing a cap and trade is that it punishes those companies that are responsible and in essence rewards those companies that are irresponsible and creates a stock market filled with corruption, much as we’ve seen in our own stock market. And with the recent UK expense scandal, I believe a cap and tax system would be just another layer of bureaucracy prone to graft and corruption.

Most oil is really used to provide plastics.  Plastics can be used in all kinds of things.  It can be used on a shuttle, in your stove, in your car, in your computer,  and just about everything has a plastic component somewhere.  Maybe you don’t know this, but we do have a plastics plant here in Iowa that produces bio-degradable plastic from the residue of corn. When the farmer’s are done producing corn, and it’s been shipped it off, the detritus that is left over can be used to make this plastic.  It is 100% bio-degradable and they’re working on it to improve their product.  And I believe efforts like this should be rewarded with a 100% tax break and even government grant money to be able to produce these kinds of materials.  If you live in Iowa, you know that well over 90% of the plant lies on the ground after it gets produced.  That’s both good and bad.  It’s good in the fact that you can return the nutrients to the soil, but it’s bad that 90% of your cost to produce the corn is lying on the ground and not being utilized.  I believe that is also true of soybeans. We could utilize technologies like that to replace the oil based products and plastics that we use today, particularly with bio diesel.

Another thing I think we can do is to increase the mass transit of small cities like Des Moines and Omaha so that it would be cheaper and easier and much more cost efficient to help with commuting from, in Des Moines’ case, from the eastern and western suburbs to either downtown or from the eastern suburbs to the western suburbs where a lot of business growth is occurring.  What is astonishing to me is that the stimulus package contains $8 billion for a high speed rail from Los Angeles to Las Vegas through Nancy Pelosi’s and Harry Reed’s districts, but it’s much cheaper and quicker to fly from Los Angeles to Las Vegas.  So, if they can spend $8 billion to “grant easier access” to Las Vegas from Los Angeles for these media stars, then I believe that $8 billion could be much better spent in developing a mass transit system for a city like Des Moines and the smaller communities.  The more we do to reduce our dependence on oil, the more we do to fight terrorism.

I think the sensible energy policy will do several different things.  One, it will cut our reliance on oil.  Two, it will create a market for developing renewable energy and green technologies.  Three, it will take money out of the hands of the terrorists.