The View from Right Field

“Investing” in Light Bulbs

I needed to buy some light bulbs last week, and when I went to the store, I had sticker shock.  I have noticed that light bulbs are costing more, but the price increase really hit me the other day at Menards.  Maybe Menards is not the cheapest place to buy light bulbs, and maybe the ones I bought weren’t the least expensive.  But still, four 100-watt equivalent light bulbs cost me $16.97 plus 10.5% sales tax – and that was only because I had a 15% off coupon.  Otherwise, they would have been $19.97 plus 10.5% sales tax.  That’s $5.52 per bulb.

I can afford to pay that much for light bulbs, and I understand that, over the long run I will save lots of money on my electric bill (the 100-watt equivalent bulbs only use 16 watts and the supposedly last for thirteen years), not to mention that they are better for the environment because I am using less electricity.

Increasing Gasoline Taxes to Save the Planet. I Wonder How Emmanuel Macron Feels About That Now.

I think I can say, without needing to provide a link, that the consensus among Democratic (and many Republican) politicians, most scientists, and the almost all of the media is that Donald Trump’s views, and the views and policies of his Administration, on climate change are beyond being just wrong.  They are almost maliciously wrong.  The facts are clear, the consequences are grave, and we need to start doing something now.

One question, though.  Even if the facts are clear and the consequences grave, what do you do if the voters won’t approve “what needs to be done”?  While the protests of the gilets jaunes, or yellow vests, in France seem to have morphed into all-around protests against French President Emmanuel Macron, it is important to remember the issue that ignited them: an increase in fuel taxes that was part of France’s plan to reduce its carbon emissions.

Did Barack Obama Really Make America the Biggest Oil and Gas Producer?

In a speech at the Baker Institute at Rice University in Houston last week, former President Barack Obama said:

“You wouldn’t always know it, but it [oil production] went up every year I was president. … [S]uddenly America’s like the biggest oil producer and the biggest gas [producer] — that was me, people."

Two comments.  First, separate from whether it’s true (it’s not, see below), could you imagine George H.W. Bush ever bragging about himself like this?  I can’t either.

Shale-Oil: A Win-Win

An article in Wednesday’s Wall Street Journal was headlined “Warning Is Sounded on Shale” (print edition).  The first sentence explained: “U.S. shale companies are churning out crude oil at a record pace that could overwhelm global demand and reverse the oil market’s fragile recovery, a top energy-market observer said Tuesday.” 

After reading this, I thought to myself, how is this a problem?  I understand companies in the energy business might prefer prices to be higher (and life easier), but shale-oil companies increasing the supply of oil sounds great for customers and consumers.

According to the article, the  flexibility of U.S. shale companies to increase production reduces the likelihood of price spikes like we had in 2011 to 2014, when oil was over $100 a barrel.  This helps consumers.  It especially helps those consumers who have to pay a relatively high percentage of their income for heat and electricity.  If your energy costs are only 1% or 2% of your budget, a 50% increase is eminently manageable.  But if energy costs are 10% of your budget, as they are for poorer people in much of the United States, a 50% increase, or even a 25% increase, in energy costs is a problem.

Affordable Housing: Rent Controls or “Build, Baby, Build”?

My original thought was to comment on articles in the Chicago Tribune and The Wall Street Journal about moves in California and Illinois, among other states, to allow local governments to impose rent controls.  But Megan McArdle and Steve Chapman have done it so well, I really can’t add much to the main argument.  There are two additional comments I would make, however.

First, supporters of rent control say people just want an apartment at a rent they can afford, in a nice neighborhood, that is not too far from where they work.  In response, I would refer them to the Quality Triangle: Good, Fast, and Cheap.  Pick any two.  It is the same with apartments: Reasonable rent; Nice neighborhood; and Close to where you work.  Pick any two.

Second, proponents of rent control argue that building more apartments won’t solve the problem.  The Wall Street Journal quotes Elena Popp, founder of the Eviction Defense Network in Los Angeles, as saying, “We cannot build our way out of a crisis of this proportion.”

Energy Subsidies for Those Who Don’t Need Them – Paid for By Those Who Can’t Afford Them

Green energy is all the rage.  We have to save the planet, after all, and green energy is the way to do it.  It may cost money, but it’s worth it – especially when you don’t have to pay for it yourself.

Robert Bryce wrote in The Wall Street Journal last week about his contribution to the green energy movement – and our contribution to him:

“[I]t’s only appropriate that I express appreciation for the generous subsidy you provided for the 28-panel, four-array, 8,540-watt photovoltaic system I installed on my metal roof last year.  Thanks to the investment tax credit, I slashed my 2016 federal tax bill by $7,758. …

Democrats/Progressives Need to Relax. Good Things Can Happen in Spite of the President.

As President-elect Donald Trump fills out his cabinet, and progressives/liberals exhibit signs of mass hysteria, it might be a good idea to sit back and reflect on the extent of the president’s power to actually affect things – and how many things happen that the president has nothing to do with.

Consider a report in last Monday’s Wall Street Journal.  According to the article, in November, the U.S. exported more natural gas than it imported.  It has been almost 60 years since the U.S. exported more natural gas than it imported on an annual basis, but that is where we are headed – and soon.  Further, the Energy Department predicts that, by 2020, the United States will be the third largest exporter of liquefied natural gas, behind Australia and Qatar.  And President Obama has had almost nothing to do with any of this.

Fracking for Freedom – Again

I have written about fracking before – lots of times¹, but it looks like it may be time to do so again.  At the Democratic debate in Flint, Michigan, Sunday night, both Hillary Clinton and Bernie Sanders were asked if they supported fracking.²  Senator Sanders was direct: “I do not support fracking.” Secretary Clinton gave a longer answer, with all kinds of conditions that would need to be met before she would support fracking.  The result, however, would be much the same.  In her words: “So by the time we get through all of my conditions, I do not think there will be many places in America where fracking will continue to take place.”  Which she seems happy about.

As clear from what I have said before, I disagree.  Let’s get the less important reasons (though still important) why I support fracking out of the way first, so I can get to the biggest reason.  First, fracking has lowered energy costs, which helps people, especially people who don’t have a lot of extra money.  If you’re rich (or upper middle class), lower natural gas costs (and gasoline prices) don’t matter that much.  You can afford the extra costs if we didn’t frack.  If you’re just getting by or living paycheck to paycheck, however, lower heating costs may mean you don’t have to decide between heating the apartment and buying food or going to see the doctor.

A Simple Solution to Crude Oil Derailments – That’s Not Going to Happen

There was a big train derailment on Thursday near Galena, Illinois.  The train was carrying crude oil, and a number of the cars burst into flames when the train derailed.  As the Chicago Tribune details, derailments of trains carrying crude oil are becoming more common.  Senator Richard Durbin, among others, has called for safer railroad tank cars, cars that are less likely to split apart or crack open in a derailment. 

That would probably help.  However, one of the reasons that we are reading about so many more derailments of trains carrying crude oil, is that so many more trains are carrying crude oil.  Fracking and other new exploration techniques have greatly increased oil production in the United States.  The oil has to get to refineries, and trains are one way to do it.

Of course, there is another way to transport oil.  It’s safer, better for the environment (because you don’t have as many spills), and, in the long run, cheaper.  But it’s pipelines, and that’s a non-starter for the Obama administration.  And as for Senator Durbin’s concern about the safety of tank cars, you won’t see it extending to support for something that really is safer.  Because no matter how safe, efficient, and environmentally-friendly pipelines are, they aren’t “green”.

Do We Ever Build Pipelines? Do We Ever Drill for Oil?

Back in 2008, when gasoline prices were high and many people were calling for increased drilling for oil and gas, Democrats and environmentalists were opposed.  It would take five years (or more) for the new supplies to come on line, they said.  That wouldn’t help.

Now we are told that lower gasoline prices are dimming the chances that the Keystone XL pipeline will be approved.  With gasoline prices so low, we don’t need Canadian oil or the Keystone XL pipeline, they say.

Let me see if I get this right.  When gasoline prices are high, increased drilling, new pipelines, etc., won’t help because they would take too long to have an effect.  And when gasoline prices are low, increased drilling, new pipelines, etc., aren’t needed because we don’t need more supplies. 

In other words, it’s never the right time to drill or to build pipelines – at least according to Democrats and environmentalists.