Texas Gov. Perry’s Muddled Energy/Climate Keynote

Two weeks ago, the Texas Public Policy Foundation (TPPF) hosted a state-of-the-art climate and energy conference in the nation’s energy capital of Houston. The global warming establishment may have stayed away, but a large crowd was treated to a sound, multi-disciplinary review of the physical science, political economy, and resource economics.

The evening keynote for At The Crossroads: Energy & Climate Policy Summit was an address by Texas Governor Rick Perry. While Perry’s general public policy positions are free-market–and thus pro-consumer and pro-taxpayer–his energy security, don’t-import-but-export argument smacks of Mercantilism and U.S.-side protectionism. Furthermore, Perry pulled his punches regarding the conference’s major themes on climate and energy policy. It was a timid, uninspired keynote just when the momentum dictated going the other way.

Soft on Climate Propoganda

Perry could have, should have, reiterated the conference’s major themes: the 15–20 year ‘pause’ in global warming; lowered climate sensitivity estimates (and explanation for the same in the peer-reviewed literature); the desperate, speculative tie-in’s between anthropogenic climate change and extreme weather events (if there has been no warming, how can ‘climate change’ be involved?); and the benefits of increased atmospheric concentrations of CO2.

In other words, there is good news about the impact of conventional energy on global climate and the ecosphere.

Here is what Perry could have said (per the stump speech of William Happer, Chairman of the George C. Marshall Institute):

“Carbon pollution” is a propaganda slogan for the campaign against carbon dioxide (CO₂). It is not science. Atmospheric CO₂ is not a pollutant but is essential for plant growth. Current CO2 levels are far below optimum for most plants, and far below norms of geological history, when CO₂ concentrations averaged several times higher than present values.   A substantial fraction, about 15%, of current world food production is due to the higher levels of CO₂ compared to preindustrial values.

 Contrary to unambiguous computer predictions, there has been no statistically significant surface warming in at least 15 years. It is now clear that the warming potential of CO₂ has been exaggerated by a large amount, and it is unlikely to be much more than 1^oC for doubling of CO₂. There is not the slightest evidence that more CO₂ has caused more extreme weather or accelerated sea level rise. Nor is there the slightest support for the notion that government control of CO₂  will “stop climate change.”

Many real environmental issues need attention: smog, waste disposal, short-sighted suburban development, adequate clean water, public health, etc. These are being overshadowed by the phony issue of “carbon pollution.”

Perry Energy, Obama Energy

For context, it should be remembered that Gov. Perry has championed Obama/EPA/Big Green energy policy by advancing wind power with both pen and pulpit. Ironically, but in keeping with Big Government Republicanism, Perry continued the policy of Gov. George W. Bush, who fathered Texas’s 1999 law requiring the state’s electricity retailers to purchase a certain amount of their energy from qualifying renewables, wind power being the most economical. This mandate, enacted with the crucial help of Enron lobbyists, was increased in 2002 with a powerful wind lobby at work, which made Texas the leading windpower state in the country, passing California.

In October 2006, Governor Perry announced $10 billion in commitments from wind developers to increase increase installed Texas wind capacity by about 7,000 MW.  And to get this (remote, unneeded) electricity to market, Perry committed the state to a $5 billion–and now $7+ billion– transmission project.

MasterResource has documented the role of Perry in Texas’s government-created, artificial wind power boom:

Rick Perry’s $7 Billion Problem (Texas wind transmission project 38% over budget–$270+ for every citizen in the state) (August 26, 2011)

Republicans for Obama Energy (Senate Finance Committee okays PTC/ITC subsidies) (April 16, 2014)

Governor Rick Perry (R-TX), T. Boone Pickens, and the Enron Legacy of Windpower (March 24, 2010)

Little wonder that Gov. Perry awarded crony capitalist T. Boone Pickens the 2009 Texan of the Year Award.  (According to news reports, “Perry said Pickens’ alternative energy plan ‘could change the world forever’.”)

“While Perry’s been governor,” said the American Wind Energy Association, “we’ve had a business climate that allows a generator to build, connect to the grid and sell power. Under those conditions, wind has been able to compete and bring benefits to Texas consumers, and to the environment.” Added Paul Sadler, executive director of the Wind Coalition, in the New York Times: “He [Perry] has been a stalwart in defense of wind energy in this state — no question about it.”

Perry’s September 25, 2014, Speech

Excerpts of Perry’s focusing on energy and climate follow. Beyond the polite introduction to TPPF (not excerpted) and the kudos to the Texas and U.S. energy boom, what public policy takeaways are there? Legalize LNG exports, build the Keystone XL oil pipeline, increase federal-land oil and gas production, sure.  But what about ethanol, wind power, and government-dependent solar power? What about the war on coal?

Is the present writer being too critical? Or Was Gov. Perry being too soft to not bow-up his national critics?

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As we gather tonight in the energy capital of the nation, Houston, Texas, I am mindful of how American energy innovation has changed the last century, and how it has already begun to change this century too.

Texas & Energy

On January 10^th, in 1901, Captain Anthony Lucas struck oil at Spindletop. What happened that day helped change the world. The successful exploration of oil, natural gas and coal would power the automobile industry and the electricity grid, provide new ways to heat and cool our homes, and assist in the development of products from cell phones to window frames…making life better for us all.

The impact of oil, natural gas and coal on productivity, our quality of life, and human life expectancy cannot be overstated. They have revolutionized the world. But for the last 40 years, our reliance on oil has made us more dependent than we should be on sources hostile to our interests from South America, to the Middle East, and across Asia.

But just as it was a Texas wildcatter who gave us Spindletop, it was another Texas wildcatter who developed the technology that can set us free from hostile foreign energy. In 1997, George P. Mitchell introduced the slickwater fracturing technique to the Barnett Shale, making oil and natural gas extraction by precision drilling economically feasible for the first time. The surge in production of oil and gas that we have experienced in the last 10 years didn’t happen because of a government mandate, or an EPA study -it happened because America is a land of innovation and entrepreneurs.

America & Energy

This story of American ingenuity is as old as Benjamin Franklin. It is what makes the American economy unique: we are always dreaming up what Larry Ellison of Oracle called, “the next big idea.” From innovations like the iPad, to a serum that saved two doctors stricken with Ebola, America has a proven culture of innovation and creativity that has changed the world. And now new technology in energy can change the world economy.

Today, as my friend and former appointee, TPPF’s very own Kathleen Hartnett White will tell you, America leads the world in production of natural gas, surpassing Russia. And, because of the application of a new technology – precision drilling, coupled with a well-known and routine process, hydraulic fracturing – our energy resource base is by far the largest in the world, much larger than Russia’s or Saudi Arabia’s.

The energy rush has once again come to America, and Texas is at the epicenter. But this is a national phenomenon. North Dakota’s Bakken Field has transformed that small state’s economy. The Marcellus Shale has breathed new life into the economies of Pennsylvania and West Virginia. The Utica shale play in Ohio, the Haynesville in Arkansas, and even the Monterey shale formation in California all will, in time, improve the economy of those states and the nation.

The possibilities are virtually limitless. But while it takes entrepreneurs to develop the innovations that change the energy marketplace, it takes a president with vision to change the world economy. America has the potential to pioneer a new frontier. We only need a president with the leadership to blaze this new trail.

The surge in the production of oil and natural gas allows us the opportunity to re-shape the global economy, eliminating our dependence on states that control massive sources of energy. With the natural gas we now produce, we can help liberate our European allies from Russian energy aggression.

LNG Opportunities

Let us speak plainly about the stakes: our energy policy is a driving force of both our economic prosperity and our national security. One of the most profound ways to enhance national security, to bring stability around the globe, and to change dynamics around the globe, is to aggressively market American energy around the globe.

We see how energy can be used for malignant purposes through the actions of Russia. Energy is a weapon in the hands of aggressors. So I say, if energy is going to be used as a weapon, America should always have the largest arsenal.

The arsenal of American energy will not, however, be used to bully other nations, but set them free. Nations like Poland, which is building a LNG terminal to receive LNG from sources around the globe, need access to a competitive energy marketplace – one that forces even Moscow to compete in the energy marketplace.

Years ago, the president withdrew our commitment to building a missile shield in Europe. His actions emboldened Russia, which has now annexed Crimea, and sent soldiers to fight in Ukraine. While we seek peace with Russia, we know Mr. Putin doesn’t respect lofty rhetoric, but instead real strength.

The first order of business to restore balance to Europe is for America to build an energy shield to protect our strategic allies…. One of the first things we must do to show leadership abroad is to accelerate the export of America’s vast energy resources.

We have more than 40 export LNG facilities seeking federal approval along the coast. To date, only a small number have full DOE approval. The others are mired in bureaucratic delay as federal officials study what we already know to be true: that exporting natural gas means jobs for Americans, competitive natural gas prices because companies have incentives to produce more, and stable energy to friends around the globe. One of the approved LNG plants, in Louisiana, has the potential to replace one-sixth of the daily intake of Russian gas to Europe.

The point is not that American LNG can totally replace Russian sources in Europe, it’s that we must open up the marketplace and send a message to Moscow that we won’t allow them to hold our friends and allies hostage.

Missing Energy Policy

The second order of business is for the president to approve the Keystone Pipeline. After six years, we have had enough of presidential dithering and debating, enough of coalition politics to appease a narrow base at the expense of the national interest.

Keystone will create thousands of jobs, reduce our reliance on hostile energy, and show that this Administration is finally serious about energy security.

The president likes to point out that energy production is on the rise under his administration. He says he supports North American energy production. He just doesn’t like to drill for it, permit it, or transport it.

The truth is that over the last five years, crude oil production on non-federal lands has increased 61 percent, while production on federal lands fell 6 percent. Right now, less than 5% of the federal estate is open for oil and gas exploration and production.

Keystone will create jobs. He should authorize it.

Now is the time for bold leadership with a game-changing energy policy that protects American interests and our allies.

It’s not that we need a new energy policy, it’s that we need an energy policy period. The president should work with Congress to pass an energy plan that makes America “energy secure” by a specific date. If the EPA can establish a date certain for compliance with power plant regulations, surely Congress can set a date certain for one of the single most important actions we can take to protect national security.

Our plan should include becoming the world’s largest net exporter of energy, it should allow for exploration and production in untapped fields, and it should help take us from the doldrums of anemic recovery to robust job growth.

Here are the facts: we have the energy we need for future generations. We have the technology and the skill to access it in an environmentally prudent way. Now we just need the political will to achieve it.

Our motto for energy should be make what Americans buy, buy what Americans make, and sell it to the world. Together, we can make our economy stronger, our nation more secure; together we can create thousands of jobs, by tapping abundant energy; together we can send a message to those who wield energy supplies as a weapon – that we won’t appease bullies, and we will stand with our friends!

We will do what Americans have always done – bring innovations to market, and sell them to the world. Let’s usher in a new era of American renewal….