Author Archive

More Bipartisan Cooperation in the Senate: Answered Prayer or More Tears?

Saint Teresa of Ávila, a 16th century Carmelite nun, said: “Answered prayers cause more tears than those that remain unanswered.” So, there’s precedent for concern that the “new tone” in Washington politics that everyone has for years said they want might end in tears. Yet it might be coming.
For energy lobbyists, The Senate Energy Committee is a leading indicator for changes in tone, and it’s rarely been more promising if a better tone is indeed what we want.
The Committee may actually get to work on bills that have been in deep frost for 15 years or so–especially the long-awaited U.S. Energy Policy bill. An Energy Policy would give some certainty to alternative bio-fuels, hydrogen, solar, wind, natural gas, oil and coal industries, not to mention automobile and electrical utilities. Each passing month seems to bring an entirely new set of policies from Washington that contradict existing policies. For example, no sooner do electric utilities face up to enormous costs of refitting their coal-fired generators to meet hyper-strict limits on particulant emissions suggesting a smaller role for coal in the future, then President Obama announces that the coal industry will have a central place in the U.S. energy market of the future. What, exactly, does Washington want?
Now there is some hope that more direction will be given. In the Senate, leadership changes are ushering a shift to greater pragmatism. After January, the panel will be run by Sen. Ron Wyden, D-Wash., who worked with Republicans on healthcare and other thorny subjects. He replaces Sen. Jeff Bingaman, D-N.M., who was slow to understand Republican priorities and unable to move legislation through the closely divided Committee.
Sen. Lisa Murkowski, (R-AK), who leads the Republican side, has won admiration with her ability to be thoughtful, principled, diplomatic and still tough. She would make a good Energy Secretary in the event that Romney wins the White House, given that GOP’s prospects for taking the Senate to a majority seem hard to peg.
Newer GOP Senators are also showing a pragmatic tone in what they say, if not how they vote. The panel includes Sen. Rob Portman, R-Ohio, and Sen. Bob Corker, R-Tenn. As we said, The November 6 election will determine whether Murkowski or Wyden obtain the chairmanship. But in a more workmanlike atmosphere, it may not matter…
On the other hand, it may be that Washington is better off without an energy policy (the tears brought on by an answered prayer). Indeed, there are those on Capitol Hill and in the lobby who feel the best thing Congress can do is absolutely nothing. That would be the only way of giving energy investment a steady (if not fair) playing field for planning future cap-ex.

Does Moneyball work for the EPA?: New EPA Particulant Regs Puffery?

Back in 2003, Michael Lewis wrote “Money Ball,” a book about how an Oakland, CA baseball team under head coach Billy Beane used player statistics to hire team members that gave them the greatest chance of a championship season at the lowest cost.
So by 2009 it was pretty clear what was coming when President Obama’s chief regulator, Cass Sunstein, began talking about how federal regulators should act less than green eye-shade bean counters and more like Billy Beane. Sunstein was going to base regulatory philosophy on statistics and cost/benefit analysis. On its face, that doesn’t sound like a bad thing.
But pointing out the difficultities of this approach is Susan Dudley, head of regulatory studies at George Washington University and Sunstein’s predecessor under President Bush. In her view, the new ‘statistics’ can be fudged to justify almost any kind of regulation. She uses recent EPA regs as an example
Dudley says that the bulk of “benefits” from Obama’s regulatory effort comes from new EPA limits on air particulates of 2.5 micrometers or less. Ask any electric power company executive and they will confirm that this has been the biggest expense for power producers in the last decade as they install expensive smoke stack scrubbers in their coal-burning plants.
Together, these regulations account for about 50% of the monetized cost of all new government regulations, according to Dudley. And they account for even more of the purported “benefits.”
The joke is in the calculation of the ‘benefits.’
According to Dudley the bulk of the benefit comes from extending the life expectacy of a certain group of citizens by 6 months.
Who are these lucky few? Says Dudley,’the beneficiaries of these life saving regulations is around 80-years-old.” Obviously, extending the life of 80-year-olds is a good thing to do. But there are also a lot of doubts about how much effect small particulants have on anybody’s health. Additionally, people in their 80s tend to have one or more other health conditions that may account for changes in mortality.
EPA adds to the accounting a claim that reducing air particulates also cuts back on fish exposure to heavy metals like Mercury that are contained in microscopic particulants. Whether or not these savings have been double-counted against other EPA interventions aimed at reducing Mercury, Dudley does not say.

Dudley, Susan, “Perpetuating Puffery: An Analysis of the Composition of OMB’s Reported Benefits of Regulation,” Business Economics, July 2012, Vol. 47 No. 3, pp 165-176
Lewis, M.M., 2004. Moneyball: The art of winning an unfair game, WW Norton. Available at:,+you+had%22+&ots=pcH3mzoxGM&sig=LtRBCL53W3-oazf2PxvVAnU8enY [Accessed September 26, 2012].