Husaria wingLevinson Productivity Systems, P.C.
William A. Levinson, P.E.  Principal
570-824-1986
TheBoss at ct-yankee.com
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Overview

Greenhouse gas regulations: a clear and present danger to the United States

Problems with "voluntary emission trading"

Cap and Trade = Corporate Welfare?


Kyoto proponents want to curtail immigration and limit family sizes in the United States!

The Asian Brown Cloud:  China's commitment to limiting greenhouse gases

Russia calls Kyoto "economic Auschwitz"

Fuel cells and "intelligent environmentalism"

The Seadog wave pump

"Voting to Bell the Thermodynamic Cat"


Fuel cell links

The Kyoto Global Warming Treaty: Bad Medicine

"This [a proposed paid leave law] is one more reason for job creators to leave what was once an entrepreneureal mecca. The recent survey, by Development Counsellors International, found that 57% of 283 executives rated California the worst state in the nation in which to locate a business. A distant second at 36% was that other liberal hotbed, New York, while the New England state formerly known as Taxachusetts was third at 18%" ("Paris, California," Wall Street Journal, 27 September 2002, page A14).

California's recent attempts to back-door implement the Kyoto Global Warming Treaty are an even better reason for workers and businesses to stay out, or even get out, of that state. Greenhouse gas regulations have no upside, and plenty of negatives, for manufacturers (Levinson Productivity Systems' principal clients) and for the United States.

Overview
The location of a new plant is largely determined by the cost of its power and the price at which it may make and ship goods to a given territory…
Our civilization— such as it is— rests on cheap and convenient power. … The source of material civilization is developed power.
—Henry Ford, Today and Tomorrow
Anyone who supports the Kyoto Global Warming Treaty (Kyoto Protocol), carbon dioxide emissions trading, and other carbon dioxide regulations needs to read the above statement carefully. Energy costs were (and are) a paramount consideration in siting a manufacturing plant and the high-paying jobs that go with it. "The Kyoto Protocol would therefore encourage investors to move the smokestacks, all their carbon dioxide, and the jobs underneath the smokestacks to other countries" (Levinson, 2002, Henry Ford's Lean Vision, available by September).
  1. It has not been proven that man-made carbon dioxide is contributing to global warming. Earth got out of the last Ice Age just fine, thank you, with at most the help of a few cavemen's camp fires. The current warming trend might be part of a natural cycle.
  2. Even if man-made carbon dioxide is contributing to global warming, the Kyoto Treaty will do absolutely nothing to solve the problem. Third World nations like China are not subject to the treaty's carbon dioxide limits. Enactment of Kyoto (or legislated limits on carbon dioxide, as contemplated in California) will simply encourage businesses to move even more manufacturing jobs offshore, thus destroying American jobs. The jobs will go to places like China, which will pump not only the same amount of carbon dioxide up their smokestacks, but also toxic pollutants that American companies do not emit.
  3. Some of the treaty's most vocal advocates are from South American countries that burn down rainforests to clear land for agriculture. Their rampant destruction of "the world's lungs," as some call these rainforests, is prima facie evidence that many of Kyoto's most ardent supporters do not consider global warming a serious threat.
Far more dangerous is the chance of an asteroid striking the earth, as portrayed in Armageddon and Deep Impact. Geological evidence, and places like Crater Lake, shows that this has happened in the past. A large meteor struck Siberia in the early 20th century with force comparable to a nuclear weapon's; fortunately, the place was largely uninhabited. Furthermore, Earth's weather erases the evidence of such impacts, which would otherwise leave our planet looking a lot like the Moon. It would be indeed worthwhile to develop the ability to detect such objects well before they hit, along with nuclear-tipped surface-to-space missiles to deal with them. We don't have to blow the asteroid apart, we simply have to deflect it from its collision course. If the missile's warhead vaporizes thousands of tons of material and throws it off the asteroid along vector X, the reaction will push the asteroid in the direction -X. If done far enough away, this will cause the asteroid to miss.

The Kyoto Treaty also poses a clear and present danger to the economic and military security of the United States, as shown by these examples:

Gasoline would rise by 50 cents or more a gallon [about 33 percent versus 2000 prices]; the cost of running industrial plants and energy-hungry computers would soar. According to a consensus of projections, the growth of gross domestic product in the U.S. would be cut by more than half as businesses moved offshore to escape the high [carbon] tax.

Glassman, James K. 2000. "Forget Kyoto." Wall Street Journal, 11/30/2000, editorial pages. What part of "move jobs offshore" do the Kyoto Treaty's supporters not understand?



California's short-sighted energy policies turned value-adding manufacturers into non-value-adding middlemen:

"Locked into long-term contracts at $22 per megawatt-hour (while the going rate shot up to $300), many closed their mills and resold their electricity— realizing hefty profits even after paying idled workers"

Lavelle, Marianne. 2001. "The power hungry get powered down," U.S. News & World Report, April 30, 2001, 40.

California simply doesn't learn, given its new initiatives to regulate carbon dioxide emissions:

"…in San Jose, epicenter of the computer industry's drain on electric power, voters rejected a new power facility because it offended their 'aesthetic sensibilities.' … Environmentalists recoil in horror at suggestions of nuclear power, now a safe and clean source of electricity, or the use of cleaned-up coal to lower the price of natural gas that generates it."
"…Reducing pollution sensibly is laudable, but clean-air extremists become local heroes without telling constituents the danger of the loss of Intel jobs and cheap electricity's household convenience."

• "Rolling blackouts in the San Francisco Bay area last June 14 cost an estimated $100 million in Silicon Valley."
• "[California Steel] had to shut down seven times last December alone, causing havoc on production schedules and worker productivity."
• "Temporarily ceasing production is straining California businesses, making them vulnerable to permanently shutting down."
"California Energy Problems Still Continue As More Companies Do 'Less With Less'," Engineering Times, March 2001. (Professional Engineers in Industry practice division, National Society of Professional Engineers)

On "voluntary" greenhouse gas emission trading
An entrepreneur, upon learning that the government paid farmers not to raise hogs (to avoid an oversupply and low prices) decided to go into the business of not raising hogs. He asked the Department of Agriculture what kind of hogs were best not to raise, and so on. Then he began to wonder if he could earn twice as much money by not raising twice as many hogs.
National wealth and prosperity do not come from reselling electricity, "not raising hogs," or trading emission credits, baseball cards, comic books, or other collectibles. They come only from getting raw materials or adding value to those materials through manufacturing. Carbon dioxide emissions trading is simply a dysfunctional performance driver that might appeal to financiers and politicians, but is simply a diversion from the nation's business.

Chemical & Engineering News' Bette Hileman is strongly in favor of greenhouse gas reductions, but even she has trouble with the concept of buying carbon offsets: an arrangement she compares to the medieval practice of selling indulgences for people's sins.

"A Dubious Way Out Of CO2 Emissions: Paying to compensate for personal carbon dioxide emissions may not be as environmentally sound as it seems" (Chemical & Engineering News, 19 February 2007):

In the late Middle Ages, professional pardoners sold indulgences to Roman Catholic parishioners with the promise that their sins would be forgiven. It was one of the practices that led to the success of Martin Luther's Reformation. Today, some environmentally conscious people purchase so-called carbon offsets to compensate for the CO2 emissions they are personally responsible for...

In principle, carbon offsets could support many worthy projects. But in fact, carbon-offset firms are operating in a totally unregulated, "Wild West" environment. They are using widely disparate methods to calculate personal emissions, and they are charging vastly different prices to compensate for a ton of CO2. And the projects these firms support vary from some that may have real, verified benefits for the environment to others that have negligible or even negative impacts. ...Sometimes offsets from the same project are sold twice. Independent outside verification of carbon-offset projects is important to ensure that they are real and additional and that the reductions are measured by internationally recognized criteria, the Tufts study says.

Perhaps we should offer a deal like, "For $1000, we will not build a coal-fired power plant, not raise a dozen hogs, and throw in a free indulgence good for 100 minor sins, 10 major sins, or 5 mortal sins."

Let's recap where wealth comes from: we must grow it, mine it, or make it. Trading things like coins, stamps, baseball cards, comic books, and carbon offset credits creates absolutely nothing. Benjamin Franklin wrote, "Many, without labour, would live by their wits only, but they break for lack of stock," and he is as right today as he was more than 200 years ago. Henry Ford similarly despised non-producing speculators in things that others had already created. Carbon offset credits, like payments for not raising hogs, go a step lower and speculate in things not created.

Cap and Trade = Corporate Welfare?
If the Cap Fits : Why our CEOs are warming to Kyoto.

BY KIMBERLEY A. STRASSEL
Wall Street Journal, Friday, January 26, 2007 12:01 a.m. EST

...The Climate Action Partnership, a group of 10 major companies that made headlines this week with its call for a national limit on carbon dioxide emissions, would surely feign shock at such an accusation. After all, their plea was carefully timed to coincide with President Bush's State of the Union capitulation on global warming, and it had the desired PR effect. The media dutifully declared that "even" business now recognized the climate threat. Sen. Barbara Boxer, who begins marathon hearings on warming next week, lauded the corporate angels for thinking of the "common good."

There was a time when the financial press understood that companies exist to make money. And it happens that the cap-and-trade climate program these 10 jolly green giants [members of the Climate Action Partnership] are now calling for is a regulatory device designed to financially reward companies that reduce CO2 emissions, and punish those that don't.

Four of the affiliates ...are utilities that have made big bets on wind, hydroelectric and nuclear power. So a Kyoto program would reward them for simply enacting their business plan, and simultaneously sock it to their competitors. ...DuPont has been plunging into biofuels, the use of which would soar under a cap. Somebody has to cobble together all these complex trading deals, so say hello to Lehman Brothers. ...GE makes all the solar equipment and wind turbines (at $2 million a pop) that utilities would have to buy under a climate regime.

We believe it would be more to the point to get the price of the so-called green technology down far enough that people and businesses will want to buy it in the free market. That was, after all, how Henry Ford sold millions of Model Ts. He got the price down to where people could afford them, in an era when automobiles were perceived as luxury items. BIG HINT:



where NPV stands for Net Present Value. i is the business' required rate of return. Ck is the cash flow in the kth period. The discounted cash flow is calculated as shown and, if NPV>0, the investment is a good one. Now, for solar and wind equipment,
  • C0 is the initial capital outlay (negative).
  • Ck is the revenue from the wind or solar power (positive), minus maintenance costs to keep the equipment working.
    • The advantage is that the cost of fuel is zero, because the wind and sun are free.
    • Of course, textbook cases will also include the proceeds of tax deductions for equipment depreciation, but that applies to both renewable and non-renewable energy sources.
So the way to get utilities to buy solar and wind equipment is to simply (1) figure out how to make it cheaply enough so the initial outlay is lower and (2) reliable enough that the maintenance costs are low. That is simply good business practice and good engineering.

Kyoto supporters now want to limit U.S. family sizes and curtail immigration

Bette Hileman, "Greenhouse Gases: U.S. population growth complicates CO2 reduction and policy decisions," Chemical & Engineering News, 16 September 2002, page 21. Here are the highlights of the article's opinion on the source of the "problem," and some of its proposed "solutions."

  1. Americans should drive dangerous, low-performing economy cars and live in shoebox apartments
    • The article complains that the fuel economy of American passenger vehicles has gone down during the past decade, and "...the average size of single-family homes has risen greatly since the 1970s."
  2. American population growth is the "problem."
    • "...every year, the U.S. must provide transportation and heating and electricity for the equivalent of another large city, all of which add to its burden of greenhouse gas emissions. ...if the U.S. is ever to get serious about reducing its greenhouse gas emissions, an important part of the public policy debate will have to be about the consequences of immigration and fertility rates."
  3. The government should use noncoercive-- that depends on what you mean by "noncoercive"-- policies to discourage large families.
    • "It [the government] could curtail or zero out dependent tax exemptions for families with more than two children. It could cut off college aid for large families. It could take many other less drastic measures to encourage people to have small families." Note that doing this, however, would bring about the collapse of the Social Security pyramid scheme even sooner.
  4. (Legal) immigration should be reduced
    • "Politicians who dare to advocate a sharp cutback in immigration or incentives to motivate families to have fewer children would be stepping into a minefield. ...But a national debate over these issues is necessary..."
A national debate over these issues would indeed be beneficial, because it would be highly offensive to tens of millions of people from families with three or more children,* and to millions of first- and second-generation Americans. This could easily destroy any remaining public support for Kyoto, and this would be a good thing.

* In Orson Scott Card's Ender's Game, Earth limited families to two children, with "Third" (often shortened to a four-letter word for excrement) being a highly offensive pejorative. The hero, Ender Wiggin, was allowed to be born as a third child because the government thought his family had special abilities that would be useful in a war with an insect race. This is, apparently, the brave new world that Kyoto's advocates would give us.

The Asian Brown Cloud: the rest of the world's true concern over global warming
Note that Communist China, which is eager to take the United States' manufacturing jobs, is among the Kyoto Treaty's most vocal proponents.

"Asian Brown Cloud' poses global threat" (click for complete article) By CNN's Marianne Bray and wire reports, August 12, 2002

HONG KONG, China -- A dense blanket of pollution, dubbed the "Asian Brown Cloud," is hovering over South Asia, with scientists warning it could kill millions of people in the region, and pose a global threat.
..."Biomass burning" from forest fires, vegetation clearing and fossil fuel was just as much to blame for the shrouding haze as dirty industries from Asia's great cities, the study found.

We suggest that Asia remove the toxic pollution log from its own eye before pointing to the carbon dioxide mote in ours. "Do as I say, not as I do," say the Mainland Chinese:

"China, which is exempt from the Kyoto Protocol, is now the world's second largest emitter of greenhouse gases, after the U.S. Coal use in China has been climbing faster than anywhere else in the world." (Source: Physicians for Civil Defense)

Russia: Kyoto="Economic Auschwitz"

http://www.russiajournal.com/news/cnews-article.shtml?nd=43814 "Top scientists tell Putin to kill Kyoto"
"The Kyoto Protocol to limit greenhouse gases has no scientific basis and puts the Russian economy at risk, Russia's leading scientists said in official advice to President Vladimir Putin. In the document, obtained by Reuters on Monday, the Russian Academy of Sciences said the global treaty would not stabilise greenhouse gases even if it came into force."

"...Russia has vacillated over whether to agree to voluntarily limiting its emissions, and the Academy said there would be no point since the treaty would not halt global warming anyway. "The Kyoto Protocol is ineffective for fulfilling the aims of the U.N. Framework Convention on Climate Change, which it was created to fulfil,"

http://www.russiajournal.com/news/cnewswire.shtml?nw=42650#n42650 Andrei Illarionov: Kyoto Protocol is economic 'Auschwitz' for Russia
"Russian Presidential Advisor on Economic Issues Andrei Illarionov has described the Kyoto protocol as an 'economic Auschwitz for Russia.' ...'Ratifying this protocol would transform Russia into an economic dwarf or baby whereas at present it is just beginning to grow into adulthood.'"

http://www.russiajournal.com/news/cnews-article.shtml?nd=43326 Kyoto protocol is discriminatory against Russia
"Illarionov also stressed that the Kyoto protocol was not a universal instrument, as more than half of all countries around the world have taken no obligation to limit emissions of greenhouse gases. The economies of countries that have ratified the protocol grow at a slower pace, as the Kyoto protocol sets substantial restrictions on economic growth, he added."

http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=41561 Putin adviser says Kyoto 'smoke screen': Treaty will create Soviet-style 'monster' threatening freedom
For most of the world, writes Andrei Illarionov in the Financial Times, the protocol, set to become an international treaty next year, is "bad news."
"Like fascism and communism, Kyotoism is an attack on basic human freedoms behind a smokescreen of propaganda," he said. "Like those ideologies of human hatred, it will be exposed and defeated."
The Fuel Cell: Intelligent Environmentalism

Economic driving forces do support energy efficiency. As an example, the fuel cell bypasses the limitations of thermal power cycles (e.g. Carnot, Rankine, Otto internal combustion). Thermal power cycles recover only about 35-45 percent of the fuel's energy content. The fuel cell converts the fuel directly into electricity, which is roughly equivalent to mechanical energy, with very high efficiency.

So why not pass a lot of mandates to compel automakers and power generators to use fuel cells? At present, fuel cell technology is just becoming economically feasible. Several years from now, no mandates will be necessary to get businesses to use them because they will provide cheaper power. If it's possible to put a fuel cell in a car that will deliver even 60 percent efficiency (versus, for argument's sake, 40 for internal combustion) with no loss in mileage or performance, no one will want to buy a car that has an internal combustion engine. Who wouldn't want a sport utility vehicle that gets 24 instead of 16 miles per gallon with no loss in safety (due to size and weight), performance (acceleration), or mileage? What power company would burn coal to make electricity when it can use a fuel cell to make 50 percent more electricity from the same amount of fuel?

Using coal to make hydrogen for fuel cellsThe reaction of coal with steam produces hydrogen, which is an ideal fuel for fuel cells. Even Kyotoists who dislike the "discard to atmosphere" suggestion for the carbon dioxide will like the idea of bypassing the the efficiency limits of traditional power generation cycles that work by transferring heat from a hot reservoir to a cold one. The Carnot cycle (a theoretical best-case) does not limit the efficiency of the chemical reaction of hydrogen in a fuel cell to make electricity. This method therefore makes less carbon dioxide than a traditional coal-burning plant but it has the potential to reduce energy costs. The lesson here (as Henry Ford could have told us a long time ago) is to stop trying to legislate solutions to technological problems. Let industry and the free market do their jobs, and they will deliver a solution naturally.

The Seadog Wave Pump

"Independent Natural Resources, Inc. has successfully demonstrated a device called the Seadog wave-pump that harnesses the mechanical energy of ocean swells or waves and uses it to pump water to land-based hydroelectric turbines, which generate renewable, inexpensive electricity upon returning the water to the sea." Chemical Engineering Progress, February 2004 (p. 8)
The reference says that $0.022/KW-h prices are achievable with the economies of scale that go with a 280-MW plant.
Voting to Bell the Thermodynamic Cat and other observations on the greenhouse gas "religion"
Levinson, "Voting to Bell the Thermodynamic Cat," guest opinion column in Manufacturing Engineering, February 2004
Levinson, William A. "Kyoto and Quality: How greenhouse gas regulations will outsource U.S. jobs." Quality Digest, February 2007

Fuel Cell Links
The methanol fuel cell vehicle is highly attractive because methanol (like gasoline) is merely a flammable liquid as opposed to an explosive gas like hydrogen. Who wants to drive the Hindenburg?


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