Jobs, Gasoline Prices and the XL Pipeline

Dear Friends,

Yesterday the House of Representatives voted to approve the XL Pipeline.  It was a clean vote - no debate and no amendments.  Three members of the House of Representatives from Minnesota who are Democrats voted with the Republicans.  One of them is Colin Peterson who is more Republican than Democrat anyway and whom I have never supported.  Another is Rick Nolan from the Iron Range whom I have supported.

Rick Nolan, during his recent campaign for re-election said that he could support the XL Pipeline if it were built with US steel.  As you can imagine, the issue of using US steel is a big deal on the Iron Range whose economy depends on steel because they produce taconite.  Needless to say the bill that passed the House yesterday said nothing about requiring the use of US steel.  Representative Nolan sought to explain his vote by saying that his constituents wanted him to be bipartisan.  I am not sure what his vote has to do with bipartisanship.  A vote with no debate and no amendments is hardly a way to achieve bipartisanship.  One of his constituents does not seem to agree and voices the real reason for Representative Nolan's vote as quoted in the Minneapolis Star Tribune (here):

Why would you run a pipeline from Canada with the dirtiest oil running through it made with cheap foreign steel in the breadbasket of America … all in the name of profits for an oil company?” said John Malek, president of the 1,300-worker union local at Minntac mine near Virginia. “The only benefit I really see out of this is getting some good American steel in it and putting some construction workers back to work.

The third Democrat from Minnesota to vote for the bill in the House was Tim Walz.  I have supported Tim in every one of his runs for the House and have been proud to do so because he has done a lot of great things.  I do not know why he voted for this bill, but I doubt that I will agree with him and will certainly have trouble supporting him in the future.

The article in the Minneapolis Star Tribune quoted above also indicated that Senator Franken whom I have also supported from his start in politics implied that he might support the XL Pipeline if it passes the environmental study being done and it includes a provision to use US steel.  The clear implication is that the XL Pipeline should get support if it provides jobs.

So how many jobs would the XL Pipeline produce?  Once construction is completed it is estimated that there will be 35 permanent jobs created by this pipeline, according to estimates by the State Department.  TransCanada, the pipeline company, estimates that 20,000 jobs will be created during the one to two years of construction.  That is really an overestimate because TransCanada is using job years.  So a single job that last for two years is counted as two jobs.  Also of the 20,000 jobs, 13,000 are directly for the pipeline construction and 7,000 are for related manufacturing jobs.  TransCanada's estimates are not substantiated and according to a study from Cornell University, there will be less than 5,000 direct jobs during the construction of the XL Pipeline (here).

If Congress wants to pass a law that will encourage jobs and lots of good jobs, they should pass a law to bring our infrastructure into the 21st century.  The American Society of Civil Engineers has estimated that we need to spend $3.6 trillion by 2020 to update our infrastructure.  That would produce jobs.  Consider that today with only minor spending, there are 14.2 million jobs in infrastructure construction or about 11% of our total employment.  True bipartisanship would be to pass a real infrastructure building law that would also be a great jobs bill.  We could also require that US steel be used in government funded projects (if we do not enter into the Trans-Pacific Partnership).  If you want a quick summary of the infrastructure problem here is a CBS News article.

Another argument that you hear about the need to have the XL Pipeline is that it will lower the cost of gasoline.  A Bloomberg article (here) addresses this issue.

Keystone opposition has been shocking to many Americans, too. The world’s biggest oil consumer relies on some of the world’s cheapest gas prices to power its economy. How could the U.S. possibly turn down a new artery to deliver the stuff, even if it does come with new environmental risks?

The answer is that Keystone isn’t meant for U.S. consumption.

In Keystone’s weirdonomics, the pipeline would actually increase prices of gasoline for much of the country, according to at least three studies that have looked into it. Keystone would divert crude from Midwest refineries to Gulf Coast refineries, where it would then be shipped to more expensive markets. Bypassing heartland refineries could drive up prices at home.

For people living in the Midwest, Great Plains and Rocky Mountains, it could add 20 cents a gallon to the price at the pump. 

I try to stay away from sources that people could claim are biased when writing these blogs but sometimes the article is so compelling and summarizes the issues so well that I cannot help myself.  Friends of the Earth has a  great summary of the problems with the XL Pipeline (here) covered in seven paragraphs titled:
dirty tar sands oil
water waste and pollution
forest destruction
indigenous population
pipeline spills
refining tar sands
stopping the pipeline

So why is anybody supporting the XL Pipeline except for TransCanada and the oil companies that stand to make lots of money while potentially destroying our environment in many ways.  You can contact President Obama here and for those of you that live in Minnesota, you can reach Senator Klobuchar here and Senator Franken here.

Thanks for reading and please comment,
The Unabashed Liberal

Department of Energy Loan Program

Dear Friends,

You may remember the todo during the 2012 Presidential election about Solyndra, a start up solar company, that defaulted on a loan from the Department of Energy loan program.  The DOE loan program was designed to provide funds to encourage new energy technology that could not otherwise attract capital.  The program was started under President George W. Bush in 2005 but was substantially funded under President Obama's stimulus program in 2009.

Well you will be happy to know that the loan program is now showing a profit, even though when it was started it was not intended to do so.  The program has been a great success providing capital to fund new green technology that could not get private capital until their business models could be proven.  Under this program many business models have been proven and now private capital is replacing public capital to make new green technologies realities.  Here is a link to an NPR report.

Despite Republican claims, the government can, should and does great things.  This government loan program helped entrepreneurs prove their ideas (or have them disproved), developed new green technology, created lots of private sector jobs, moved us toward energy independence, reduced our carbon emissions and improved the quality of our air.  Keep in mind that it did this because the private sector would not take the risk and keep in mind that the government made a profit doing so.

Thanks for reading and please comment,
The Unabashed Liberal

Climate Change Reality

Dear Friends,

As you all know, China and the United States have reached an agreement to reduce carbon emissions which as environmental activist Josh Fox said on "All in with Chris Hayes" on November 12th, "The United States and China are entering reality together."  The two largest carbon emitters in the world, responsible for 40% of the world's carbon emissions are finally publicly saying they will lead the world in reducing carbon emissions.  What a powerful statement!  The European Union has already entered reality so now the focus can turn to India, Brazil, Russia and other major carbon emitters to also enter climate change reality.

In terms of a wonderful legacy for President Obama, this agreement is a perfect example of great diplomacy serving the best interests of the United States and the world.  Secretary Kerry initiated the idea with his Chinese counterpart and after nine months of negotiations it fell to President Obama to President Xi of China to spend five hours together reaching final agreement.  Doing this is exactly what great leaders do.

The Republicans are reacting as you might expect with outrage and illogical fear mongering.  Senator Inhoff, who will be the Chair of the Senate Environment and Public Works Committee in the next Congress and who is a climate change denier, said that the agreement is "a non-binding charade."  Senator McConnell said,

I was particularly distressed by the deal he’s reached with the Chinese on his current trip, which, as I read the agreement, it requires the Chinese to do nothing at all for 16 years, while these carbon emission regulations are creating havoc in my state and other states across the country.

Presumably the carbon emission regulations he is referring to are those requiring coal fired electrical plants to dramatically reduce their emissions.  Those regulations are critical to fighting climate change and are long overdue.  They are also necessary for us to stop killing people.  Here is a brief summary of a report by the American Lung Association (here):

The Lung Association’s report reveals the real public health threat from coal-fired power plants.

• Coal-fired power plants that sell electricity to the grid produce more hazardous air pollution in the U.S. than any other industrial pollution  sources.
• More than 400 coal-fired power plants located in 46 states across the country release more that 386,000 tons of hazardous air pollutants into the atmosphere each year.
• Particle pollution from power plants is estimated to kill approximately 13,000 people a year.

“Power plant pollution kills people,” said Charles D. Connor, President and CEO of the American Lung Association. “It threatens the brains and nervous system of children. It can cause cancer, heart attacks and strokes.

So Senator McConnell and his fellow Republicans who are so concerned about protecting life are happy to have us continue to kill people so that we can have a few very dangerous jobs mining coal.

The other part of Senator McConnell's statement that the Chinese do not have to do anything for 16 years is absolutely false.  Either Senator McConnell does not understand reality or he is simply lying to appeal to his base and continue his fear based politics.  Or maybe it is both.  In any case for the person who is to be the next Majority Leader in the Senate to say these things demonstrates what a sorry state our country is in.

The reality of the Chinese agreement is that they will peak in their carbon emissions by 2030 and at that point will generate 20% of their electricity from renewable, non-carbon sources.  This agreement is the first time that the Chinese have acknowledged publicly that they will cap their emissions.  In addition, in order to achieve the goal of producing 20% of their electricity from renewable, non-carbon sources they will need to build renewable, non-carbon electrical plants equal to all of their current coal fired plants and also equal to the entire United States electrical generating capacity and do that in 16 years.  They can and likely will accomplish that goal for several reasons.  First, they are under significant domestic pressure to reduce air pollution.  Second, these goals in China have the effect of law.  Third, investing heavily in renewable, non-carbon energy sources will make them the undisputed leader in that technology unless the United States is smart enough to compete for that title.

If the Chinese can build renewable, non-carbon electrical generating facilities large enough to provide enough electricity to meet the needs of the United States, why can't we do that?  We could be the first country in the world to generate its energy needs from renewable, non-carbon sources.  Can you imagine what that would do for our economy and our national security?  Historically the United States has thrived on taking on big, long-term challenges and that is what made us a super power.  We can do that again, but we must have leaders with vision and guts and backbones.  If we let the current energy companies drive our policies, we will be relegated not only to a world completely degraded by the impact of climate change, but we will be left behind economically and morally.

I have from time to time accused President Obama of making great speeches but failing to follow through with actions.  In order to avoid that criticism and to really secure as part of his legacy fighting climate change, President Obama needs to take immediate actions to be clear that the United States will work hard to meet its goals under the agreement, carbon emissions that are 26% to 28% below 2005 levels by 2025.  The first thing that he should do is deny the permit for the XL Pipeline.  Why would anybody take us seriously as a leader in fighting climate change if we facilitate the production and burning of the dirtiest carbon on the earth?

Please join me in congratulating President Obama on this historic agreement with China and urging him to cancel the XL Pipeline (here).

Thanks for reading and please comment,
The Unabashed Liberal

Net Neutrality

Dear Friends,

 A couple of days ago President Obama made a very strong statement in favor of net neutrality.  You can read the entire statement here.  The crux of the issue is how broadband services should be regulated.  President Obama has made it clear that they should be treated like telephone services.

So the time has come for the FCC to recognize that broadband service is of the same importance and must carry the same obligations as so many of the other vital services do. To do that, I believe the FCC should reclassify consumer broadband service under Title II of the Telecommunications Act — while at the same time forbearing from rate regulation and other provisions less relevant to broadband services. This is a basic acknowledgment of the services ISPs provide to American homes and businesses, and the straightforward obligations necessary to ensure the network works for everyone — not just one or two companies.

I am delighted that President Obama has chosen to speak out on this critical issue to the future of the internet.  A free and open internet is essential to maintaining it as a critical element in our lives and in the development and communication of ideas.  Big corporations that essentially have a monopoly should not be able to decide which ideas and speech goes in a fast lane and which ideas and speech are either blocked or relegated to a slow lane.

Strong rules on net neutrality could be a wonderful legacy of President Obama's presidency.  We need to thank him for taking such a strong stand on this issue and for speaking out publicly.  Unfortunately, one statement no matter how strong or well constructed will carry the day.  There are very strong forces that would like to let the ISPs govern.  Ted Cruz has compared net neutrality to Obamacare, saying that the internet should not go at the speed of government.  Ted Cruz is an extremist and is really just against net neutrality because he is against anything that President Obama is for.  However, in addition to Senator Cruz, the ISPs (think Comcast, ATT, Time Warner) are opposed to true net neutrality because they stand to make a lot of money selling faster service to Netflix, etc. and controlling whose ideas and content get to the public.  As a result, we also need to encourage President Obama to continue to speak out for net neutrality.

Please join me in thanking President Obama and asking him to keep speaking out on this issue (here) and also in writing to FCC Chairman Tom Wheeler (who is not really a supporter of net neutrality) to voice your support of net neutrality (here) because if you don't you may have real difficulty in doing so once Comcast and ATT are making up the rules.

Thanks for reading and please comment,
The Unabashed Liberal

Trans-Pacific Partnership

Dear Friends,

The Trans-Pacific Partnership is a massive "trade agreement" currently being negotiated by the United States and 11 other countries - Australia, Brunei, Chile, Malaysia, Mexico, New Zealand, Canada, Peru, Singapore, Vietnam and Japan.  It is already huge and is being written in a way that other countries can join.  The negotiations have been going on for a decade, but they are secret.  The public only knows some details because drafts have been leaked.  The agreement contains 29 chapters and covers everything.  It is impossible to comprehend the vastness of the agreement. The Washington Post published a short and hence not very comprehensive article in December last year entitled "Everything you need to know about the Trans-Pacific Partnership" by Lydia DePillis (here).

One way to evaluate whether the Trans-Pacific Partnership (TPP) is a good thing or not is to look at who is for it and who is against it.  There are over 500 official advisors to the United States negotiators.  They are from major corporations.  Senator McConnell has been widely quoted as saying that he and President Obama have talked about and agree on giving President Obama fast track authority to get this agreement done.  In fact it appears that the establishment Republicans and Democrats, all of whom tend to do the bidding of corporate America, are in favor of this agreement but liberals and conservative Republicans are very skeptical.

If you read the official website of the Office of the United States Trade Representative (here), you will get the sense that TPP is the greatest thing since sliced bread and will make all Americans rich.  I have not read anything that refutes the contention that  TPP will be good for American businesses and the economic elite.  However, it appears that there will be a negative impact on American jobs and American startup companies.  The Center for Economic and Policy Research released a study a year ago indicating that TPP would have a negative impact on most American workers (here).

TPP is being challenged by a wide variety of groups.  One very vociferous group is Public Citizen.  The first part of its website (here) about TPP reads:

Have you heard? The TPP is a massive, controversial "free trade" agreement currently being pushed by big corporations and negotiated behind closed doors by officials from the United States and 11 other countries – Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. In one fell swoop, this secretive deal could:

offshore millions of American jobs, roll back Wall Street reforms, sneak in SOPA-like threats to Internet freedom, ban Buy American policies needed to create green jobs,

jack up the cost of medicines, expose the U.S. to unsafe food and products, and empower corporations to attack our environmental and health safeguards.





Although it is called a "free trade" agreement, the TPP is not mainly about trade. Of TPP's 29 draft chapters, only five deal with traditional trade issues. One chapter would provide incentives to offshore jobs to low-wage countries. Many would impose limits on government policies that we rely on in our daily lives for safe food, a clean environment, and more. Our domestic federal, state and local policies would be required to comply with TPP rules.
The TPP would even elevate individual foreign firms to equal status with sovereign nations, empowering them to privately enforce new rights and privileges, provided by the pact, by dragging governments to foreign tribunals to challenge public interest policies that they claim frustrate their expectations. The tribunals would be authorized to order taxpayer compensation to the foreign corporations for the "expected future profits" they surmise would be inhibited by the challenged policies.
We only know about the TPP's threats thanks to leaks – the public is not allowed to see the draft TPP text. Even members of Congress, after being denied the text for years, are now only provided limited access. Meanwhile, more than 500 official corporate "trade advisors" have special access. The TPP has been under negotiation for six years, and the Obama administration wants to sign the deal this year. Opposition to the TPP is growing at home and in many of the other countries involved. 

The Electronic Frontier Foundation does not like TPP either.  The first page of its website about TPP (here) reads:

 The Trans-Pacific Partnership (TPP) is a secretive, multi-national trade agreement that threatens to extend restrictive intellectual property (IP) laws across the globe and rewrite international rules on its enforcement. The main problems are two-fold:

(1) IP chapter: Leaked draft texts of the agreement show that the IP chapter would have extensive negative ramifications for users’ freedom of speech, right to privacy and due process, and hinder peoples' abilities to innovate.
(2) Lack of transparency: The entire process has shut out multi-stakeholder participation and is shrouded in secrecy. 

Joseph Stiglitz wrote an opinion piece in The New York Times critical of TPP last spring (here) entitled "On the Wrong Side of Globalization".  I have reprinted a few of his conclusions below:

There is a real risk that it will benefit the wealthiest sliver of the American and global elite at the expense of everyone else. The fact that such a plan is under consideration at all is testament to how deeply inequality reverberates through our economic policies.

One of the worst is that it allows corporations to seek restitution in an international tribunal, not only for unjust expropriation, but also for alleged diminution of their potential profits as a result of regulation. This is not a theoretical problem. Philip Morris has already tried this tactic against Uruguay, claiming that its antismoking regulations, which have won accolades from the World Health Organization, unfairly hurt profits, violating a bilateral trade treaty between Switzerland and Uruguay.

But the TPP would make the introduction of generic drugs more difficult, and thus raise the price of medicines. 

Critics of the TPP are so numerous because both the process and the theory that undergird it are bankrupt. Opposition has blossomed not just in the United States, but also in Asia, where the talks have stalled.

If you have time to listen to a podcast from Amy Goodman's Democracy Now, I highly recommend one interviewing Lori Wallach of Public Citizen here.

However, the most important thing to do is to tell President Obama (here), your Senators and your Representative to get rid of the veil of secrecy surrounding TPP, make TPP work for working Americans and have a full debate of TPP (no fast track authority).

Thank you for reading and please comment,
The Unabashed Liberal