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At first I thought it was a political ploy.  President Obama proposed cutting $2.6 billion from the Low Income Home Energy Assistance program (LIHEAP), a 50% reduction in funding from last year.  Did he think that proposing cuts for poor people would enhance his approval rating among Americans intent on cutting government benefits for others?

Then I got the facts.  This was not really much of a cut at all.  You see, the budget for this program had been doubled in 2008 in response to oil prices that doubled between June 2007 and June 2008, hitting an all-time record high price of almost $148 per barrel in July 2008.  When President Obama unveiled his budget proposal earlier this month, oil prices had stayed under $90 per barrel and natural gas prices had also remained fairly steady for all of 2010. 
Under those circumstances, President Obama merely proposed to restore the Low Income Home Energy Assistance program to its pre-2008 oil crisis funding levels.

The assumptions underlying President Obama's proposed funding for this program may turn out to be inaccurate given ongoing events in the Middle East.  Since the historically high oil prices in July 2008, however, Saudi Arabia has intervened several times to keep the price of oil at or below $100 per barrel.  The Saudis have recently pledged to make up any shortfall caused by the current unrest in Libya.  They understand that prices significantly above $100 per barrel would jeopardize the global economic recovery.  Sustained prices at those levels would also result in reductions in oil consumption as efficiency, conservation, and alternative energy sources became more attractive.

Will the Saudis succeed in managing the price of oil?  Unlikely in the long term because growing demand and the absence of significant new supplies will continue to put upward pressure on prices.  But in the short term, it is reasonable to assume that the Saudis will be able to prevent the types of price spikes we saw in 2008.  President Obama's proposed budget allocation for LIHEAP should be sufficient to prevent people from freezing.

What if events in the Middle East spiral out of control and oil prices skyrocket?  The President and Congress will have to revisit the issue and do what they did in 2008 -- provide additional funding for the Low Income Home Energy Assistance program in response to an emergency.  But given the state of our economy and its dependence on oil, that would be only one of many serious challenges.

John Howley
Orlando, Florida


 
 
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Proposals to gut the EPA's enforcement budget coincided this week with the dismantling of Picher, Oklahoma, a former mining town that is caving in on itself and so polluted that it is no longer safe for people to live there.

From the 1920's until the 1950's, Picher was at the center of the lead and zinc mining capital of the world -- the intersection of Oklahoma, Kansas and Missouri.  By 1983, however, Picher was identified as the epicenter of one of the most toxic areas in America due to mine waste that had contaminated the water.  Studies showed that about one-third of the children in Picher had elevated levels of lead in their blood, a condition that can cause cognitive and learning disabilities.  A local school board member recalls generations of young people in Picher who struggled to learn.

There was no EPA during Picher's mining heyday.  No agency to test the drinking water or otherwise ensure that mining and industrial operations would be conducted without harming the health of residents.  It was an era that gave us places like Love Canal, New York (the Niagra Falls neighborhood where 800 families had to be relocated because of toxic chemicals buried in the ground), and Times Beach, Missouri (another town that no longer exists because of life-threatening dioxin levels in the drinking water), and Woburn, Massachusetts (another high profile incident of water contamination and the subject of the book and movie, A Civil Action).  It was an era when babies of working class families were poisoned in blissful ignorance.

Do we really want to return to an era when the lives of working class people and their children will be destroyed by untested and unregulated mining and industrial practices?  As we consider the economic benefits and costs of using hydraulic fracturing ("fracking") to recover more natural gas from shale formations, do we really want to move forward without a government agency investigating the potential environmental and human harms?  Do we want to take the risk of creating new Pichers, and Love Canals, and Times Beaches, and Woburns?

Or do we want to get it right this time?

John Howley
Orlando, Florida

 
 
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When President Obama announced his proposed budget, he did it in the the traditional fashion.  By rolling out reams upon reams of printed paper.  Maybe it makes for a nice photo op.  Maybe it gives government workers something to do.  But it is an extraordinarily wasteful way to disseminate information in the 21st century.

Think of all the energy that was wasted -- and all the greenhouse gases that were emitted -- by chopping down trees to produce the paper, transporting the ink and paper to printing presses, running the printing presses, and transporting the printed documents to the White House and Congress.  All this energy and expense to produce a document that most people will never read and that will end up as waste paper in a matter of a few weeks.

There is a better way.  We could save money, reduce carbon emissions, and more effectively get documents into the hands of the people by distributing them electronically.  After all, we live in an era when grandmothers have e-readers and Facebook accounts.  None of them is going to see the massive budget proposal in printed form.  But if you put it on line and made it searchable, many Americans would take a look.  So why are we spending hundreds of millions of dollars to print documents that are less accessible to Americans than they should be?

President Obama has implicitly recognized this waste by proposing to eliminate the practice of printing and mailing the Federal Register (which is available on line).  This one act will save $16 million in printing and mailing costs.

Why stop there?  Why not eliminate all spending on printing government documents?  Why not transition to a 21st century practice of making government documents more accessible, less costly to produce, and less harmful to the environment by stopping the presses and distributing everything on line?

John Howley
Orlando, Florida

 
 
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The price of coal is expected to increase 55% in the next two years, to a peak price of $170 per tonne in 2012 from $110 today.

The price of oil is expected to increase more than 100% in the next three years, to a peak price of $200 per barrel in 2013 from under $100 today.

The price of wind is expected to remain the same over the next 2, 3 and even 10 years, to a peak of zero from zero today.  Ditto with the price of the sun's rays.

Now if China builds hundreds of gigawatts of coal-fired and diesel-fired power plants over the next 10 years, and we build hundreds of gigawatts of wind and solar farms in the same time period, we will pay more for our energy infrastructure in the short term.  But they will be stuck with ever-increasing and ongoing costs to fuel their coal-fired and diesel-fired power plants, while we will enjoy zero fuel costs for our wind and solar farms.  We will have a very significant competitive advantage in energy costs, which will allow us to hire more people and pay them more.

Ten years from now, China's leaders might look back and say, "We kept buying US Treasury bonds, thereby lending money to the Americans so they could build wind and solar farms that are more efficient and less expensive than our coal-fired plants?  Now the Americans have a competitive energy advantage courtesy of our low-cost financing?  What were we thinking?"

Or we could look back and say, "We borrowed billions from China by issuing Treasury bonds, and we wasted all that money on traditional fossil fuel power plants that now require us to pay ever-increasing prices for coal and oil?  What were we thinking?"

What about the intermittent nature of wind and solar?  How can we rely on energy sources that are as fickle as the wind and the sun?

First, let's understand that our use of energy is also intermittent.  For example, we use more air-conditioning on hot days when the sun is shining, which is also when solar panels produce the most electricity.  Second, let's understand that we can address some of the concerns by bulding a smarter grid (which we need anyway; the current one is based on technology that is 100 years old) and by driving more plug-in electric vehicles (which can serve as a distributed storage system; charging car batteries when electricity supply is plentiful).

Most of all, let's understand that no one is suggesting that wind and solar can meet all of our energy needs.  Renewables can supply 20% of our energy needs in the next 10 years.  Combine that with a 20% increase in energy efficiency, and we will have reduced our reliance of fossil fuels by 40%.

A 40% reduction in fossil fuel reliance would give us a distinct competitive advantage in the world economy.  Not to mention less need to drill for oil in sensitive environmental areas, less concern about whether undemocratic states will use the money we pay for oil to fund terrorists, etc.  Plus, we have plenty of coal that we can ship to China at ever increasing prices, thereby reducing the trade deficit.

So, do we want to pay now for wind and solar farms that will give us a competitive energy advantage?  Or do we want to pay later with higher fuel prices and an uncompetitive economy?

John Howley
Orlando, Florida