energy

With US President Barack Obama’s first visit to Moscow this week, the relationship between Russia and the West remains fraught. Last year, it came to the brink once again with the hostilities in Georgia, not to mention winter’s energy crisis. The question of whether Russia and the West can ever put aside their differences and form a strategic partnership is of relevance to our ability to solve many of the problems facing the globe today – including Iran, climate change, energy security and the financial crisis.

In order get the latest opinions on whether this relationship is likely to bloom, Atlantic-Community.org recently canvassed 21 experts on Russian relations from 11 EU and North American think tanks and universities including Janusz Bugajski from the Center for Strategic and International Studies in the US, Dr. Jeffrey Mankoff of Yale University, Dr. Hans-Georg Ehrhart of the Institute for Peace Research and Security Policy at the University of Hamburg and Katinka Barysch from the UK’s Centre for European Reform. Overall, they were largely sceptical of the potential for such a partnership’s chances for development, even though they felt Russia and the West have more common than diverging interests.

Katinka Barysch of the British Center for European Reform told Atlantic Community that many of the issues are interpreted differently by Russia, leading to misunderstandings, while Elzbieta Stadtmuller from the University of Wroclaw in Poland said “Russia is not aware of such common interests because it is attached to the realistic paradigm and sees international politics as 'loser-winner' relation,” while the West has by and large shifted towards a win-win game. While the still-new Obama Administration may change the tone of foreign policy between the US and Russia, the policy experts believe the onus is on Moscow to open up to the concept that there could be common interests with the West in order for any potential strategic partnership to succeed.

Despite the shock waves of the economic crisis being felt around the world and particularly in Russia, dealing with the fall out would provide only a small window of opportunity for enhanced Western-Russian cooperation. Ms Barysch said Russia was dealing with the “triple whammy of collapsing world trade, lack of finance and low oil prices” but the situation was not – yet – severe enough to make Moscow more amenable, even though “Russia needs foreign investment, technology and market access more than before.”

But according to Janusz Bugajski of the Center for Strategic and International Studies Moscow may become more aggressive in order to divert focus from the instability caused by the economic crisis. “Russia's brewing domestic problems precipitated by the global financial crisis will not ensure that its expansionist ambitions are aborted,” Mr Bugajski said.  “On the contrary, in order to deflect attention from mounting social and regional disquiet, the Kremlin may further cultivate the sense of besiegement to threaten and destabilize various neighbors in Eastern Europe and the Caucasus and test Western reactions.”

Ivo Samson from the Research Center of the Slovak Foreign Policy Association suggests that Russia may continue to “try to use energy policy as an instrument to divide Europe on various issues.” Experts felt the European Union needs to come up with a cohesive policy towards Russian energy supplies – at the very least – in order to respond effectively to such disagreements in the future.

There remain other issues, like the role of NATO – recently highlighted by the decision to hold war games in Georgia - still acting as a stumbling block in the relationship between Russia and the West. As such, it’s unlikely that this is an issue that is going to be solved in the short term, irrespective of the benefits such a partnership may provide to transatlantic relations.  

As President Obama arrives in Moscow this week, it will be the first, small step on the road to a better relationship between Russia and the US. But even though this is undoubtedly a positive development, the experts polled by Atlantic-Community.org remain sceptical about the likelihood of a strategic partnership being formed between the two nations. Perhaps, as Merijn Hartog of the Centre for European Security Studies suggests, Russia may need new leadership before closer ties can be forged.

View the four-part expert survey online here.

Ria Voorhaar is an editor with Atlantic Community, the first online think tank for foreign policy. She is also a strategic communications specialist who is currently working on a global climate change campaign.

With his speech to Congress, and his subsequent radio address, this President's modus operandi is now clear. He makes agreeable noises, language inoffensive to all, then pushes bills through Congress that are full of controversy, and that in some cases, contradict his spoken intentions.

In his speech to Congress, he said he would cap carbon emissions. He did NOT utter the magic words "cap and trade." But we see that is precisely what he intends to do, and I wonder if the public, lulled and hypnotized by his rhetoric and winsome smile, will pay attention to his actions before their first Obama electric bill arrives in the mail.

Here's the deal: Government experts tell you (individual or corporation) how much carbon you can consume. You pay fines to Uncle Sam if you exceed the limits. Uncle Sam then distributes the fines to the middle class and the poor (or in the vernacular of the Obama White House, "the vulnerable") to help them pay for the higher energy costs that Cap and Trade created in the first place. Meanwhile, those who invest in creating energy exchanges, like Al Gore, will get rich off the trades, and the government creates a new "revenue stream" (i.e., tax). In his speech to Congress, Obama told us that he will see to it that renewable energy becomes more affordable. He didn't say that he would do so by driving up the cost of oil, coal and gas generated energy. But that is exactly what he is proposing, and it is consistent with the thinking of the Earth First / No-Growth crowd, who would have us canning beats for the winter rather than buying avocados from California. It all makes you wonder how far he wants to take the extremist environmental agenda. Really, it should come as no surprise for those of us who raised an eyebrow last summer when he was asked how he felt about $4/gallon gas, and responded that it was a shame only that the price went up to fast. See the video...

Have we ever concocted such a disruptive solution to a problem that may not even exist?

Since none of our so-called leaders are going to present an alternative economic recovery package, I'll do it myself.  Items are in no particular order except the order in which they came to me.

1) Slash the Corporate Income Tax Rate to 15% - The United States currently has the Second Highest Corporate Tax Rate in the World.  This puts our companies at a gigantic competitive disadvantage internationally and retards both job growth and the stock market here at home.  Cutting corporate taxes will spur a business led investment boom in the United States.

2) Make Bush Reductions in Capital Gains and Dividends Permanent - While I would love to slash these grossly counterproductive rates further, that's not feasible politically at the moment.  The next best thing would be to send a permanent signal to financial markets.

3) Abolish the Employer Half of the Payroll Tax - As liberals frequently point out, 80% of taxpayers pay more in payroll taxes than income taxes.  They deserve a big tax cut.  This will also act as a major job creation mechanism.

4) Pass Colombia, South Korea, and Panama Free Trade Agreements - This move is more symbolic than substative, however, it is crucially important.  Passing these agreements would signal to our trading partners that the United States will not turn protectionist like we did in the 1930's.

Passing the Colombia agreement would also weaken an increasingly despotic Hugo Chavez.

5) Establish a 15% flat rate on All Income - This will leave Americans with more money to spend, invest, or do whatever the heck they want to do with it.  It will also do away with the deadweight loss from tax code complexity.  Many other Countries have done this successfully.

Should this prove politically unfeasable, we should still strive to do this for everyone except the top income tax bracket.

6) Create A National Market for Medical Insurance - Rising Medical Costs have been a major economic drag for the past decade.  While the reasons for this are worthy of their own blog post, creating a national market for Medical Insurance instead of 50 separate state markets is the easiest way to lower costs.

7) Drill, Baby, Drill - In addition to harming those nice guys in Tehran, Moscow, and Caracas, increased energy production at home will create oodles of jobs.  It might even make the auto bailout a moot point.

8) Immeadiate Expensing for Business Investment - This will also create a boom in business investment.

9) Boost Defense Spending - This is a policy I support for other reasons.  That said, defense spending has a higher Keynesian Multiplier than anything President Elect Obama is proposing.

10) Abolish the Alternative Maximum Tax - This wildly unfair tax should just be abolished.  I don't care about the rationale.

11) Abolish Sarbanes/Oxley - This onerous regulation, passed during the Enron panic, drives capital and businesses overseas without preventing fraud at home.  Repeal of SarBox would ignite a stock market boom!

12) Abolish Mark to Market - This obscure accounting rule forces companies unnecessarily to lower the value of their assets relative to what they could be sold for.  This was a major factor in the credit freeze.

13) Abolish the Death Tax - Any change in tax policy that both antagonizes liberals and hurts Warren Buffet must be a good idea.

Has finally caught up with the American Left. They've been cut off by Hugo Chavez

Citgo, the Venezuelan government’s Texas-based oil subsidiary, has suspended its free heating oil program for the poor in the United States, citing falling oil prices and the world economic crisis.The joint effort by Venezuelan President Hugo Chavez and Citizens Energy Chairman Joseph Kennedy — the eldest son of late U.S. Sen. Robert F. Kennedy — is a controversial program that provides fuel assistance to 400,000 households in 23 states.Connecticut was among the states the program delivered to last year, according to Citizens Energy.

Started in 2005 with Kennedy’s Citizens Energy, a Boston-based nonprofit aimed at reducing home heating costs for low-income and elderly residents, the program sent 100 gallons of free oil a year to eligible households, but drew fire from critics who said it was just a ploy by Chavez to undermine the Bush administration. 

http://www.nhregister.com/articles/2009/01/06/business/c1-_citgo6.txt

New Haven's Mayor, lefter than left John DeStefano,  signed his city up for this program in 2006.

NEW HAVEN, Conn. --Low-income residents in the New Haven area are about to benefit from a reduced cost -- and politically contentious -- heating oil program intended to help defray skyrocketing fuel costs.

Mayor John DeStefano Jr. said Sunday that his office, with the Citizens Energy Corp. in Boston, has secured 4.8 million gallons of oil through the Venezuela-CITGO Heating Oil Program.

The program will provide discounted heating oil to New Haven residents whose eligibility is determined by low-income and heating assistance programs.

Discounted fuel from Venezuela, which is used in New York City and several Northeastern states, is seen by critics as a way to embarrass President Bush by Venezuela's leftist leader Hugo Chavez, who has frequently denounced Bush and U.S.-style capitalism.

Of course, please excuse me for thinking this really wasn;t about helping the less fortunate.

DeStefano, who is seeking the Democratic nomination for governor, hopes to extend the program statewide. He wrote to Republican Gov. M. Jodi Rell on Friday, informing her that Citizens Energy Corp. is seeking to work with Connecticut's network of 12 community action agencies that administer the state energy assistance program.

DeStefano's gubernatorial bid did not end well. Now his city is in dire straits.  And now he will have to let the state handle the energy assistance program with the normal federal dollars.

Maybe he should have lined up his oil supplies from someone a bit more reliable

Remember all the rage about "biofuels" being the answer to the energy crisis?

Remember all those millions of "green jobs" the President-elect is promising to create?  

Well, on the local level, we are moving in the opposite direction. A plant built to process biodiesel is shutting down in the wake of the failure of its corporate parent.

http://www.nhregister.com/articles/2008/11/29/news/a2-chbiofuels26.txt

The court-appointed receiver overseeing the liquidation of assets of a now-defunct Waterbury heating oil company said he will ask a Hartford Superior Court judge next week to allow the abandonment of a biofuels plant the firm was developing in Cheshire.

Carlton Helming said he will make the request of state Superior Court Judge Grant Miller because the plant “is not economically viable to maintain.”

Watch billions of taxpayer dollars be wasted in the next few years building white elephants like this all over the nation. We are just going to reprise the massive ethanol folly (now acknowleged by CBS news) http://www.cbsnews.com/stories/2008/11/24/tech/main4629581.shtml?source=RSSattr=SciTech_4629581 all over again

<!-- sphereit start -->In  future years we may look back at the Great Mexican Tortilla Crisis of 2006 as the time when ethanol lost its vroom.

Right or wrong, that was when blame firmly settled on biofuels for the surge in food prices. The diversion of American corn from flour to fuel put the flat corn bread out of reach for Mexico's poorest.

Two years later, the search is on for ways to keep corn on the table rather than in the gas tank.

Somehow this story seemed befitting of "Turkey Day'. An ambitious Republican signs up with a Democratic oriented agenda of taxes, spending and regulation.  

Evidently to Utah's Jon Huntsman, the new administration is just what America has been waiting for on energy policy. 

http://biz.yahoo.com/ap/081127/energy_western_governors.html?.v=2

Western governors: 'Obama, act quickly on energy'

We must not repeat the mistakes of the past," says the letter signed by association chairman, Republican Gov. Jon Huntsman of Utah, and vice chairman, Democratic Gov. Dem Brian Schweitzer of Montana. "The future of our nation depends on it."

 

 

 

Among the recommendations are annually spending tens of billions of dollars to develop clean energy technology; establishing an 'aggressive' greenhouse gas emissions reduction goal to help stop global warming; and proposing a mandatory national system for reducing greenhouse gas emissions through "market-based mechanisms."

If I recall correctly, efforts to pass "cap and trade" in the Congress died a quick and quiet death. There's never been a vote on Kyoto. The proposal by Canadian Liberals to pass a carbon tax contributed to their worst drubbing in decades. And, hmm, is there something like a recession going on which might suggest higher taxes and consumer costs might actually wreak real damage on real people?

But Jon Huntsman learned from John McCain that if you don't have a base inside the Republican Party for which to run for President, you can get one outside the Republican Party by playing up to the news media. The news media is convinced we are facing an immediate environmental apocalypse; hence they are looking for a Republican greeniac. Governor Huntsman has decided to fill the bill.

Now, I'm hearitly in favor of building a clean free market energy economy. But we ought to do someline akin to the Pickens plan because it makes economic sense to stop enriching adversarial states; not because someone shows a movie with a polar bear on an ice floe. And what this green first approach does is play into the hands of every statist, antidevelopment group out there who wants to see the economy grind to a halt to punish "big business". Not to mention "cap and trade" will be a bureaucratic tax machine likely to crush much of the economy; particularly under Obama's auspices.

I also think it displays incredible chutzpah (folks out west may need a dictionary for that word)to declare oneself an authority on energy issues when your state hardly has any oil wells. Hmm, maybe the Governor whose state actually produces oil might be a more relevant spokesperson?  

Some people are big on saying how wonderful Jon Huntsman is, and how he is going to be the future of the party.  Sorry. we already had Mitt Romney and John McCain run in 2008. This guy seems nothing more than a mash-up of their less attractive features. 

Going in to the first year of his Presidency is something that any President needs to handle delicately. Jimmy Carter failed to do it, Ronald Reagan and George W. Bush did it almost flawlessly, and Bill Clinton went with the flow of Congress and it cost Congress. For all the things that the United States is facing in economic policy, foreign policy, and cultural divisions, President-elect Barack Obama needs to act as if he is walking on eggshells. If not, the first year could take away his aura of almost messianic appeal. 

Republicans came to power as the party of big ideas, and without returning to that model they could be looking at a long winter.  Additionally, those big ideas need to focus on Middle America. Three issues that could work are conservation, reform and energy.

The Minority Report has obtained a sneak peak at a full-page ad that will appear tomorrow on the front page of The New York TImes, The Wall Street Journal and the Washington Post.

The letter, written to the American people is signed by four of the top CEO's in the country.

The letter reads, in part:

The Unshaken Pillar

While key pillars of our economy — housing, banking, autos — have been shaken, one pillar stands unshaken and provides the stability that our economy so desperately needs at this critical time. That pillar touches every American. It supports every local economy. It interacts with every business sector, from agriculture to technology. It provides more than 1.8 million high-paying jobs and another 4.6 million related jobs. It is a pillar of our economy that will not and cannot go away. That pillar is energy.

Today, Americans understand that a strong and diverse energy sector is vital to our economic well-being and prosperity. They know that energy produced here at home creates good-paying American jobs, reduces our dependence on others, and spurs the necessary investment and innovation needed to develop all forms of energy. Congress responded to the American public. Its decision to let expire the 26-year moratorium on exploration of the Outer Continental Shelf may prove to be a significant measure in addressing our long-term economic health. The best guarantee of America’s energy security and economic competitiveness is a combination of exploring for more oil and gas at home, intensified initiatives to develop alternative and renewable forms of energy, and continued improvements in energy efficiency and conservation.

The entire letter and the signatories are here:

It is encouraging during this trying economic time to find CEO's of major American Corporations who still see America as a land of opportunity, and a bright City on the Hill.

With less than one month to go,  John McCain has few winning moves, and Barack Obama is headed to "Check Mate" on the chess board of Election 2008.  

What is McCain to do? 

Two McCain advantages remain.  And they are true advantages, not bloated attacks on Obama or overused GOP talking points.

1. Senate Record
One reason the voting public distrusts  and dislikes politicians is that politicians fail to follow through on election promises.  For fence-sitting voters, especially those bombarded by campaign ads and phone calls, it's hard to believe either candidate will do what they say. 

With two Senators at the top of each party's ticket, the candidate's disadvantage is the public's advantage -- a record by which to evaluate each candidate, to predict how they will perform in office.  

Obama claims he will give 95% of taxpayers a tax cut.  He claims that he will reach across the aisle and find compromise solutions to our nation's challenges.  He claims he will move us closer to energy independence.  He claims he cares about Main Street and will hold Wall Street accountable.  But what has he done while in the Senate to achieve these goals? One look at Obama's past votes and legislative behavior, and it's clear his campaign promises are inconsistent with his record reality.  

And what about the "Present" votes while in the Illinois State Senate.  What kind of commitment did that show?

McCain's must be accountable to a much longer record, but it's one that is consistent with the domestic and foreign policy agendas outlined on the campaign trail. When it comes to reaching across the aisle, as Mike Murphy said on Meet the Press today, "You look at any piece of bipartisan legislation in the Senate that got done the last five years, John McCain's been the quarterback ... McCain is a guy who can get things done in Washington with two parties." 

2. Runaway Liberal Agenda
Also on MTP today, Murphy referred to the "runaway Democratic train" that comes with an Obama presidency.  

How many moderates and independents would prefer a Congress to have limits, the checks and balances so cleverly built into our political system?  With Congress' abysmal approval rating, scary is the thought of a liberal Democratic president putting forth an agenda that Congress will ratify quickly and easily. 

With a liberal and a moderate as our choices, even left-leaners may consider a moderate out of fear of the reckless decisions made possible by a Congress who says "Yes, We Can" to every proposal the liberal president desires. 

(McCain should take care in presenting this as a problem with an Obama presidency.  Voters don't like hand-wringing and demagoguing either.  Nonetheless, McCain can stand on his record as someone who forces compromise, which is better than forcing unchecked bad policy.)

McCain must try these two moves now ... or never.