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Poll Watch
Political “Insiders Poll”*
Could you see yourself supporting a cap-and-trade bill if it included significant incentives for nuclear energy?
Democrat Insiders
Yes 81 percent
No 16 percent
Depends 3 percent
Republican Insiders
Yes 3 percent
No 95 percent
Depends 3 percent
* The National Journal’s Insiders Poll is a weekly survey of members of Congress and Washington political operatives about topics in the news.
How Best to Help
the Recovery?
Which is more important: Increasing federal spending to try to improve the economy, or avoiding a big increase in the federal budget deficit?
| January 2009 |
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| Increase Spending |
58 percent |
| Avoid Large Deficits |
40 percent |
| March 2009 |
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| Increase Spending |
49 percent |
| Avoid Large Deficits |
47 percent |
| October 2009 |
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| Increase Spending |
38 percent |
| Avoid Large Deficits |
57 percent |
Source: Washington Post/ABC News, Oct. 15-18, 2009.
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Return to Basics:
How the U.S. Economy Really Produces Wealth
In the 1980s, famed labor leader George Meany, once joked about the growth trends in U.S. service economy, saying, ”If it all comes to this, we’ll all wind up shining each other’s shoes.” I am wondering now if that wasn’t more than a joke.
I have been intensively involved in economic (re-)development in Indiana for nearly a decade, and solely dedicated to that mission in the last two years as president of The Meridian Institute in Indianapolis. With many manufacturing cities in Indiana now suffering through unemployment rates exceeding 20 percent, I feel some days like I’m swimming against the tide.
Often when things get so bad, issues that might have once been fuzzy, now appear in stark and unambiguous relief. Here is what I see plainly in Indiana:
For all the pleasant economic growth in the service sector of the U.S. economy in recent years, it is the resource and manufacturing sectors – tangibles – that now appear to be the sources of building wealth in America. Such “tangibles” would include agriculture, mining, construction, forest products, manufacturing, energy production, design, engineering and the businesses that directly support them – such as real banking, not Wall Street sophistry.
There are hundreds of categories of occupations listed in the SIC codes maintained by the Department of Labor that represent the resources and manufacturing industry – and more and more we see the connections between resource and manufacturing that mean successful wealth creation – or not. It is a simple one-two punch.
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Affordable raw materials underlie all manufacturing. You need iron ore and high-quality coal to make the steel to build cars. (Although we seem to be the only country in the world today that thinks building cars is old hat.) You also need steel and copper for the windings of alternators, the blades of windmills and the wiring harnesses for control panels. You need fabrics, glass, rubber, and plastics. If any of the costs or any of the core resource materials get out of line, the end-product could be uncompetitive, not sell and not create prosperity for the community where it resides.
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Manufacturing has many cost inputs but, increasingly, the cost of energy is the variable that could put a manufacturing company most at risk – particularly in a global market. Just look at China’s efforts to consolidate global energy sources. This became all too obvious to me in at a recent Energy Summit of the Council on Competitiveness in Washington, D.C.
Yes, there are many other components to production, distribution, marketing and the cost of labor. But the recession in Indiana has really clarified for me and others that the basics of an economy – local, regional, or national – reside in resource production, manufacturing and energy, and that these elements underlie prosperity and health. Indiana’s lost prosperity corresponds with major declines in health measures in the state. Moreover, when wealth creation stops at the roots, it does not flow into the higher branches that circle the “tangibles” industries.
Global competition is rising across every sector of our economy. As Tom Friedman wrote in the New York Times on Oct. 21, to remain competitive, we need to add high-concept, strategy and creativity to the production of all tangible goods we put on the global market. That’s clear. But it is equally clear that this creativity and strategy has to apply to something we produce. America’s competitive edge in design, strategy and creative concept came about because we first dominated the world in the manufacture of tangible goods and food that the world wanted. So it’s in everyone’s interest to get this right.
Those who live and work far away from producing food or manufacturing tend not to understand the needs of these activities. After all, their economic drivers and daily activities are separated by several levels of organization and miles from agriculture and industry. Unfortunately, the leaders in these rarified sectors also now dominate policy-making and much of the financial activity from the coasts. We cannot depend on them to help with the challenges we face here at the center of the wealth-creation in agriculture and manufacturing.
The Meridian Institute has launched A Smart Energy Future for Indiana to fill this void, and to advance sustainable energy solutions that support America’s continued competitiveness in food and manufacturing production. We are interested in smart solutions, innovative portfolios of resources, and strategies that utilize the America’s vast natural resources wealth to produce clean and affordable energy, create jobs and give us a competitive economic advantage.
Stay tuned, plug in, and join us in our work. Let’s combine our creative, strategic power with our oft-neglected and maligned capacity for production. Together, perhaps we can make something in America again.
Scott Massey
President and CEO, The Meridian Institute
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Washington Watch
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 Sen. Murkowski: Increase Production of Rare Earth Minerals
U.S. Senator Lisa Murkowski (R-Alaska) recently emphasized the need for America to ramp production of domestic minerals, arguing that the nation’s vast mineral wealth holds the key for helping develop new clean energy technologies.
“Clean energy technologies face a range of obstacles,” Murkowski said in an Oct. 19 opinion editorial published in Roll Call, a widely read inside-the-beltway publication. “Over the long run, however, our most difficult challenge may be our most fundamental: ensuring a stable supply of the raw materials needed to manufacture clean energy technologies in the first place,” wrote Murkowski.
Murkowski also warned that the U.S. could become as dependant on foreign minerals as it is on foreign oil. She noted that the U.S. imported more than 50 percent of its supply of 43 different minerals and materials in 2008.
“This growing dependence is important because minerals offer our best chance to harness the potential of clean energy,” said Murkowski. “The large quantities of minerals required for clean energy technologies only add to the scale of our needs.”
In addition Murkowski stressed that the nation’s abundant supply of minerals represent an important source of jobs and future economic growth. “Particularly in these tough economic times, we should recognize that mining jobs pay well, require a high level of skill, and provide an excellent career path for those who pursue them,” she wrote.
The full editorial is available at: Roll Call.
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Newsworthy
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EPA to Veto Coal Surface Coal Mining Permit
The U.S. Environmental Protection Agency (EPA) recently announced that it will begin the process to void a two-year old permit for a large West Virginia surface mine operated by Arch Coal. It is the first time an EPA regional office has acted to void an active permit.
Under Section 404 of the Clean Water Act, EPA has the authority to block or amend permits recommended for approval by the U.S. Army Corps of Engineers, but has never extended this authority to an active permit. Citing the potential damage to water quality from Logan County’s Spruce No. 1 mine, EPA is expected to veto the permit after conducting a further investigation.
U.S. Senator Jay Rockefeller (D-W.Va.) and West Virginia Governor Joe Manchin (D) both condemned EPA’s move.
“When businesses make good faith efforts and fully comply with all applicable laws and regulations, they must have the confidence that the commitments made by the government will be honored,” said Rockefeller in an Oct. 16 statement. “I am very frustrated with this development and will continue to be in contact with EPA officials – making sure that the EPA recognizes the importance of this issue in West Virginia.”
“To say that I am mad would be an understatement,” Manchin said in an Oct. 16 statement. “The Spruce Number 1 Mine permit was one of the most reviewed and carefully examined permits in history, taking almost 10 years to get approval finally in 2007, and now the EPA is telling the employees and the business that made the investment that no you cannot work.”
Sen. Rockefeller’s full statement is available at: Rockefeller Statement.
Gov. Manchin’s full statement is available at: Manchin Statement.
New ePublication Spotlights Energy, Economic Benefits of Coal
Dr. Frank Clemente, a member of the Graduate Faculty at Penn State University, and a former director of the University’s Environmental Policy Center recently launched a new weekly e-publication that highlights the important economic, energy and environmental benefits of coal.
Each week Energy Facts Weekly delivers news, analysis and insight from Dr. Clemente detailing the important role coal will continue to play in providing a clean and affordable source of energy for American homes and businesses.
The latest issue and a subscription link is available at: Energy-Facts.org.
New Web Site Assesses Costs of “Cap-and-Trade” Bill
A new web site, the Cost of Energy Information Project, was recently launched in an effort to spotlight the new costs American homes could face should Congress give final approve to the Waxman-Markey “cap-and-trade” bill.
The web site features an “energy cost calculator” that estimates how much a person's energy costs would increase if the Waxman-Markey climate bill is enacted. The calculation is based on the average increase per state as analyzed in a study by the American Council for Capital Formation with the National Association of Manufacturers.
The calculator is available at: Cost of Energy Information Project.
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Smart Science
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Energy Secretary Chu Urges Development of CCS Technologies
U.S. Energy Secretary Steven Chu recently spoke before an international conference in London, England, and wrote his fellow international energy ministers stressing the importance of carbon capture and storage (CCS) technology.
Chu urged energy ministers to “make it our goal to advance carbon capture and storage technology to the point where widespread, affordable deployment can begin in eight to 10 years.”
Chu also emphasized the need to continue research on technologies to install at existing coal-fueled electricity plants, saying this technology will be needed at coal-based and natural gas-based generation plants, alike, if the international community is to meet the potential future carbon emission limits.
Chu on Oct. 13 announced that the Department of Energy (DOE) was making $55 million in new funds available to help develop advanced CCS technologies that can capture carbon dioxide from flue gases at existing power plants so that the greenhouse gas may be stored or put to beneficial use.
That announcement follows an Oct. 2 move by DOE to issue $1.4 billion from the economic stimulus package enacted earlier this year for 12 projects that will capture carbon dioxide from industrial sources for storage or beneficial use.
A copy of Chu’s letter is available at: Chu Letter.
A copy of Chu’s Oct. 13 announcement is available at: Chu Statement.
Carbon Advantage of Biofuels Likely Overstated
The world’s policymakers and scientists have made a critical error in how they count biofuels’ contribution to human-generated greenhouse-gas emissions, according to a paper published Thursday in the journal Science.
In recent months, researchers have begun to worry that bioenergy crops could replace the world’s forests and savannahs on a huge scale unless climate policies start to take full account of how these crops’ production affects greenhouse-gas concentrations. None of the major climate regimes – including the Kyoto Protocol, the European Union’s carbon market and the House-passed Waxman-Markey climate bill – account for the carbon released by changing land use for biofuels.
More information is available at: Carbon Advantage of Biofuels.
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From the Heartland
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Coal Mining Supporters Swamp Permitting Hearings
Coal mining supporters came out in overwhelming numbers to attend a series of hearings conducted by the U.S. Army Corps of Engineers this month regarding a proposal to end the use of Nationwide Permit (NWP) 21 that governs the construction of fills at coal mining operations in Appalachia.
Eliminating the permit would severely curtail the ability of coal operators to mine in six Appalachian states, resulting in massive job losses and threatening the supply of affordable energy to millions of American homes and businesses.
At hearings on Oct. 13 in Pikeville, Ky., and Charleston, W.Va., coal supporters easily outnumbered anti-coal forces by as much as 100 to 1, with the largest crowds gathered at the Pikeville event. Scheduled for a venue that held approximately 4,500 people, Pikeville officials estimated the crowd at more than 5,000, with only 100 or so clearly identified anti-coal activists in attendance. The third hearing in Knoxville drew a more evenly divided crowd of approximately 500.
Hearings on Oct. 15 in Big Stone Gap, Va., Cambridge, Ohio, and Pittsburgh, Pa., drew crowds of more than 300 each, with coal supporters outnumbering anti-coal activists by a 10-1 margin.
The hearings have become a citizen referendum on coal mining generally – not just on the NWP 21 permits – and the series of roadblocks the U.S. Environmental Protection Agency has put in the path of a workable permitting process in the region.
Mining supporters stressed their concerns about job losses and the economic future of their communities if coal mining operations cannot obtain timely permits. Opposition speakers spoke to the need to end all surface coal mining and coal mining generally.
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