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Posts from the ‘Economics’ Category

CEA Research Report: Trends in U.S. Delivered Coal Costs: 2004-2011

Leslie Glustrom, Research Director for Clean Energy Action, and contributors Teresa Foster and William Briggs, have provided a comprehensive review of U.S. Department of Energy data that clearly illustrates the steady increases in delivered coal costs across the continental United States since 2004. This seven year upward trend appears to be attributable to the three key supply and demand forces of increased production costs, increased transportation costs, and increased export pressure. Authors suggest that these may be expected to continue to exert upward pressure on future coal prices.

In many states prices for wind and solar are becoming competitive with these increased coal costs.  This report encourages citizens and policy-makers to consider delivered coal costs on a state-by-state basis, to compare prices of emerging alternative clean, fuel-free energy sources, and to investigate individual states’ future fuel discount pricing practices in order to make the best future energy investment decisions. Well-documented background references on coal supply constraints as well as references for the tremendous health and environmental toll we all pay for the burning of coal to produce energy make this report an excellent and easily-understood resource.

For full report U.S. Delivered Coal Costs 2004-2011

Original data source: Energy Information Association

Carbon Tax – “The Most Sensible Tax of All”?

Last Wednesday, Independence Day, two authors, Yoram Bauman, an environmental economist and fellow at Sightline Institute in Seattle and Shi-Ling Hsu, a law professor at Florida State University who is the author of “The Case for a Carbon Tax” published an Op-Ed in the New York Times.

We question whether it is the most sensible tax because of our familiarity with James Hansen’s fee-and-dividend approach to reduce carbon emissions. While similar to Mr. Hansen’s concept, a carbon tax may be sensible, but it would be up to We the People to ensure that our citizen voices were heard as it was implemented and assessed in a way that achieved clean, renewable energy and carbon neutrality goals. A tax certainly seems to be a more transparent policy when compared and contrasted to a cap-and-trade model. However, is the fee-and-dividend action in the public interest the least opaque?

The authors highlight the following:

  • The carbon tax in British Columbia is a substitute for other taxes.
    • Takes the place of payroll, business, investment and employee taxes.
  • Preliminary data show greenhouse gases have been reduced 4.5% in the four years since the inception of the tax.
    • This despite increases in population and GDP.
  • Gasoline sales down 2% since 2007.
    • 5% increase over same time period across the rest of Canada.
  • Non-partisan policy that has aspects that both Republicans and Democrats favor.
    • Tax breaks for both high and low income populations.
  • Families, businesses and industry could control the amount of carbon tax paid by reducing their carbon footprint.
  • Promotes energy conservation and investment into productive economic activity.
    • Moves economy away from consumption and borrowing toward saving and investment.

The original Op-Ed: http://www.nytimes.com/2012/07/05/opinion/a-carbon-tax-sensible-for-all.html?_r=2&ref=carbondioxide

Mr. Hansen’s fee-and-dividend approach: http://www.columbia.edu/~jeh1/mailings/2010/20100112_PeopleVersusCap.pdf

The British Columbia Ministry of Finance Carbon Tax Review and Overview: http://www.fin.gov.bc.ca/tbs/tp/climate/carbon_tax.htm

“BLM condemned for coal lease practices after Peabody sale” By Mark Wilcox, WY Business Report

According to the June 28, 2012 Wyoming Business Report, the Bureau of Land Management short-changed U.S. taxpayers and state and federal coffers an estimated $1.2 billion by leasing 721 million tons of Wyoming’s high quality Powder River Basin coal to Peabody Energy at prices significantly below market value.

BLM acceptance of the low-ball offer was anticipated by the recently released Institute of Energy Economics Financial Analysis report, “The Great Giveaway,” which detailed flaws in the Federal coal-leasing program including lack of competitive bidding, erroneous methods of establishing fair market prices, lack of program oversight and accountability, increases in profitable overseas exports of underpriced US coal, and USGS reports of constraints on economically recoverable WY coal reserves.

As further confirmation that BLM coal leasing practices are subsidizing the coal industry at the expense of our economy, environment, and future energy security, the IEEFA report also cited the April, 2012 formal request by Representative Edward Markey (D-Mass), ranking member of the House Committee on Natural Resources, for Government Accountability Office review of federal coal leasing.

For full Wyoming Business Report article http://www.wyomingbusinessreport.com/article.asp?id=63516

To read IEEFA report http://216.250.243.12/IEEFA/062512_IEEFA_PRB_coal_report_FINAL2.pdf

To read Representative Markey’s Committee on Natural Resources letter to GAO http://bit.ly/MdcpJC

Washington Post  6/24/2012 IEEFA report review full  article:
http://www.washingtonpost.com/national/health-science/powder-river-basin-coal-leasing-prompts-ig-gao-reviews/2012/06/24/gJQA7xSR0V_story.html