Category Archives: Economy

Cruz, “Liberty” and Teletubbies

AP CRUZ A USA VA By Peter Galuszka

Where’s the “Liberty” in Liberty University?

The Christian school founded by the controversial televangelist Jerry Falwell required students under threat of a $10 “fine” and other punishments to attend a “convocation” Monday where hard-right U.S. Sen. Ted Cruz announced his candidacy for president.

Thus, Liberty produced a throng of people, some 10,000 strong, to cheer on Cruz who wants to throttle Obamacare, gay marriage, abolish the Internal Revenue Service and blunt immigration reform.

Some students stood up to the school for forcing them to become political props. Some wore T-Shirts proclaiming their support of libertarian Rand Paul while others protested the university’s coercion. “I just think it’s unfair. I wouldn’t say it’s dishonest, but it’s approaching dishonesty,” Titus Folks, a Liberty student, told reporters.

University officials, including Jerry Falwell, the son of the late founder, claim they have the right as a private institution to require students to attend “convocations” when they say so. But it doesn’t give them the power to take away the political rights of individual students not to be human displays  in a big and perhaps false show.

There’s another odd issue here. While Liberty obviously supports hard right Tea Party types, the traditional Republican Party in the state is struggling financially.

Russ Moulton, a GOP activist who helped Dave Brat unseat House Majority Leader Eric Cantor in a primary last summer, has emailed party members begging them to come up with $30,000 to help the cash-strapped state party.

GOP party officials downplay the money problem, but it is abundantly clear that the struggles among Virginia Republicans are as stressed out as ever. Brat won in part because he cast himself as a Tea Party favorite painting Cantor as toady for big money interests. The upset drew national attention.

Liberty University has grown from a collection of mobile homes to a successful school, but it always has had the deal with the shadow of its founder. The Rev. Falwell gained notoriety over the years for putting segregationists on his television show and opposing gay rights, going so far as to claim that “Teletubbies,” a cartoon production for young children, covertly backed homosexual role models.

Years ago, the Richmond Times-Dispatch published a story showing that the Rev. Falwell took liberties in promoting the school he founded in 1971. Brochures touting the school pictured a downtown Lynchburg bank building with the bank’s logo airbrushed off. This gave the impression that Liberty was thriving with stately miniature skyscrapers for its campus.

Some observers have noted that Liberty might be an appropriate place for the outspoken Cruz to launch his campaign. The setting tends to blunt the fact that he’s the product of an Ivy League education – something that might not go down too well with Tea Party types – and that he was actually born in Canada, although there is no question about his U.S. citizenship and eligibility to run for question.

Hard-line conservatives have questioned the eligibility of Barack Obama to run for U.S. president although he is likewise qualified.

With Cruz in the ring and Liberty cheering him, it will make for an interesting campaign.

An Inexpensive Experiment

Henrico industrial property anyone?

Henrico industrial property anyone?

by James A. Bacon

Henrico County, my home county, is conducting an inexpensive public policy experiment. If it pans out, the county could improve its competitive posture as a manufacturing location. If it doesn’t, the county hasn’t lost much and can always revert to the previous status quo.

County Manager John A. Vithoulkas has included a 70% cut to the county’s machine & tools tax in next year’s annual budget from $1 per $100 in value to $0.30, a measure that will cost the county an estimated $1.5 million a year in revenue. The cut appears poised to pass, reports Ted Strong with the Richmond Times-Dispatch. It received no opposition in last week’s legislative budget hearings.

“In the long term, this should lead to more manufacturing jobs, which will add more revenue to the county’s coffers,” Vithoulkas said. “We are competing for jobs in the world market now. And we aim to not just compete, but to win.”

The move will help the county capitalize on increased activity in the manufacturing sector, especially “on-shoring” or the repatriation of manufacturing jobs to the United States from abroad, said Gary McLaren, executive director of the Henrico County Economic Development Authority. “We’re serious about attracting manufacturing jobs to Henrico County, and I think this is proof of that.”

Brett Vassey, president of the Virginia Manufacturers Association, described the tax as one of the biggest impediments to manufacturing expansion in Virginia. The tax discourages companies from spending on new equipment that will make them more competitive. “Capital is like water. It flows to the lowest point,” he said.

I’m not totally convinced that the tax cut will make a difference, and it will be hard to determine if is a decisive factor even if Henrico does attract new manufacturing investment. But I think it’s worth a try. On-shoring is a major trend, and Virginia localities should try to exploit it. As labor costs rise in China, many companies are thinking about pulling some of their manufacturing operations back to the U.S. The trend is especially strong in energy-intensive industries that can take advantage of super-low natural gas prices.

But I have two questions. First, will the surging value of the U.S. dollar hurt Virginia (and the rest of the nation) as a manufacturing platform? The economic commentary is almost unanimous that manufacturing will be one one of the hardest-hit sectors. As long as Europe and Japan persist in competitive devaluations of their currencies as a tool to stimulate their economies through their own versions of Quantitative Easing, U.S. manufacturing will suffer.

Second, will Virginia be in a position to exploit natural gas prices? Virginia produces very little of its own natural gas; it relies upon pipelines to bring in gas from the Gulf Coast or (in the future) the Marcellus Shale gas-producing areas of the country. Virginia is bumping up against the ceiling of its gas capacity.

During a February cold snap, Virginia Natural Gas, the AGL Resources subsidiary that distributes gas to the Hampton Roads area, was hard pressed to keep the gas flowing. “Every valve was open,” Ken Yagelski, managing director of gas supply, told me in a recent interview. “We were utilizing all the capacity resources we had to serve our customers.” The company curtailed service to all 108 of its customers who had contracted to have their gas supply interrupted in exchange for a discount in rates. Those customers were prepared for the interruption, so no harm was done, but Yagelski says the incident could be a prelude to the future.

Demand for natural gas in in VNG’s service area is growing one or two percent yearly. VNG is looking to the proposed 550-mile Atlantic Coast Pipeline, a venture in which it is a partner, to supply the gas for the next generation of growth. But the routing of that pipeline has proved to be incredibly controversial, and there is no guarantee at this point that it will be built. If it isn’t,  supply curtailments likely will become more frequent and, at some point, VNG would have to stop taking new customers.

VNG serves Hampton Roads, but would-be industrial customers in the Richmond region would be just as concerned about the reliability of gas supplies.

Bacon’s bottom line: Attracting new manufacturing investment through lower machine & tool taxes is no slam-dunk, and it would be unwise to create expectations that it will lead to sudden success. But if the spike in the value of the dollar proves to be temporary and the Atlantic Coast Pipeline does get built, Henrico’s bet should be one well worth taking. At the very least, a broad-based tax cut that benefits incumbent businesses as well as newcomers is vastly preferable to doling out subsidies and tax incentives to bribe one specific company to invest here.

Uh, Oh, Maybe We Haven’t Reached “Peak Car”

moving_average

Click for more legible image.

by James A. Bacon

Proponents of Smart Growth, of whom I am one, have been arguing for several years that Americans embarked upon a fundamental shift in driving habits beginning in the mid-2000s. So marked was the decline in Vehicle Miles Traveled (VMT) that a certain triumphalism set in — the drop in driving signaled a shift back to mass transit and walkable urbanism. To be sure, some of the downturn could be attributed to the slow economy, but profound changes in values — a rejection of auto-centric development — was taking root. Some commentators went so far as to proclaim that America had reached “peak car,” and predicted that VMT per capita would continue to decline.

Well, the Federal Highway Administration has reported the latest numbers for 2014, and that triumphalism doesn’t seem quite as justified as it did a couple of years ago. Cumulative travel (measured by the moving 12-month average of Vehicle Miles Driven) increased 1.7% last year, bringing the total travel to a point just shy of the record in 2007. Even more worrisome, drivers were really on a tear at the end of the year. Traffic volume in December increased by 5% compared to the same month the year before.

I haven’t seen how other Smart Growthers have spun this data, and they may have interpretations that confirm their conviction that a big re-set is occurring in human settlement patterns. But I regard the data as grounds for re-examining some of my long-held beliefs — not to change them necessarily, but to go back and take a fresh look and see if they still hold up.

Clearly, the pick-up of the economy and increase in the number of jobs is a factor in putting Americans back on the road. More jobs means more commuting. The plunge in the price of gasoline toward the end of the year undoubtedly played a role as well — the increase in driving was particularly pronounced in the latter months of the year when motorists were enjoying the benefit of lower gas prices.

It’s also possible that the much-touted shift in development back to the urban core is less pronounced than commonly stated. There is no denying that the momentum of growth and development has shifted to some degree back toward traditional downtowns and urban neighborhoods. Downtowns are reviving. They are gaining population and jobs, in a reversal of a decades-long decline. But growth and development also continues in outlying suburbs.

I continue to believe that there is a strong unmet desire in the marketplace for walkable urbanism. But I’ve come to realize two things. First, there is a limited capacity for urban jurisdictions to accommodate new growth. Older cities have limited land available for infill, and re-development of existing commercial and residential areas is a slow, incremental process that takes place property by property and is limited by NIMBY resistance to greater density.

Second, the Suburban Growth Machine is still intact, even after the devastation of the 2007 real estate crash. There is still a vast reservoir of suburban land zoned for traditional, suburban-style development. It is still far easier to build large-scale projects in the burbs than it is in urban areas. Developers are adapting by building more urban-lite projects — mixed-use with some walkability thrown in. Rarely is this development transit-friendly (although there are exceptions, such as locations along the new Silver Line in Northern Virginia). The problem is that these nodes of mixed-use walkability are scattered across the suburban landscape. They rarely  connect. Accordingly, they do not achieve the critical scale required to truly change peoples’ lifestyles and reduce driving to a significant degree.

Bacon’s bottom line: I still maintain that we’ve bent the curve of the once-relentless increase in Vehicle Miles Traveled. While total VMT is nearing its previous peak, VMT per capita still remains considerably below the peak. My new modified position is that driving will continue to increase but on a slower growth trajectory than in previous decades. We’ll see how that prediction stands up to real-world data.

What about Virginia? The FHWA report provided a breakdown of travel by state for December 2014. Compared to the national increase of 5.0%, VMT in Virginia increased only 3.5%. Does that slower growth reflect Virginia’s laggard economy or something more profound? Stay tuned.

Update: Darin, who identifies himself as the ATL (Atlanta) Urbanist, tweets that the spike in VMT may be tied a marked increase in the size of the working age population. View thegraph here.

Carbon Cuts: Why PJM Has a Better Idea

pjm-region-1024x657By Peter Galuszka

Amidst all the gnashing of teeth in Virginia about complying with proposed federal carbon dioxide rules, there seems to be one very large part of the debate that’s missing.

Several recent analytical reports explore using regional, carbon marketplaces to help comply with proposed federal Clean Power Plan rules that would cut carbon emissions by 2030. They conclude that the carbon goals can be attained more cheaply and efficiently by using a regional approach.

The lead study is by the PJM Interconnection, a grid that involves all or parts of 13 states including most of Virginia. Its March 2 report states that “state by state compliance options – compared to regional compliance options – likely would result in higher compliance costs for most PJM states because there are fewer low-cost options available within state boundaries than across the entire region.”

The same conclusion was made by another report by the Washington-based consulting firm Analysis Group on March 16. It states: “PJM’s analysis of compliance options demonstrates that regional, market-based approaches can meet Clean Power Plan goals across PJM states at lowest cost, with retirements likely spread out over a number of years.”

PJM set off in its analysis by setting a price per ton of carbon dioxide emissions with an eye towards the entities being exchanged among PJM-member utilities in a new market. The PJM report shows that electricity generation varies greatly among members. Some are farther along with renewables while others are greatly reliant upon coal.

By exchanging carbon units, some coal plants might actually be kept in service longer while overall goals are still achieved. EnergyWire, an industry news service, quotes Michael Kormos, PJM’s executive vice president for operations, as saying that the market-based carbon exchange, somewhat counterintuitively, might keep coal plants running longer.

“With the renewables and nuclear coming in as basically carbon free, we’re actually able run those coal resources more because they are getting credit from renewables and the nuclear as zero carbon.”

In December, PJM had 183,694 megawatts of generation. Some 67,749 megawatts are from coal-fired units.

Kormos says that a number of coal-fired units are going to be retired in the 2015 to 2030 timeframe regardless of what happens with the Clean Power Plan, whose final rules will be prepared by the U.S. Environmental Protection Agency later this year. The retirements of older coal plants are expected to involve a minimum of 6,000 megawatts of power.

It is curious that very little of this report is being heard in the vigorous debate in Virginia about complying with the Clean Power Plan. What you hear is a bunch of humping and grumping from Dominion Virginia Power and its acolytes in the General Assembly, the State Corporation Commission and the media.

This is not a new concept. Carbon trading is active in Europe and has worked here to lessen acid rain.

It is amazing that one hears nothing about it these days. It is shouted down by alarmists who claim that Virginia ratepayers will be stuck with $6 billion in extra bills and that there’s an Obama-led  “War on Coal.” The New York Times has a front-pager this morning about how Kentucky’s Mitch McConnell is taking the rare step of actually leading the “War on Coal” propaganda campaign.

Also strange, if not bizarre, is that this approach is precisely market-based which so many commentators on the blog claim to worship. Where are they on the PJM idea? Has anyone asked Dominion, which is running the show in this debate?

Dominion’s Clever Legerdemain

Dominion's Chesterfield coal-fired plant is Virginia's largest air polluter

Dominion’s Chesterfield coal-fired plant is Virginia’s largest air polluter

By Peter Galuszka

You may have read thousands of words on this blog arguing about the proposed federal Clean Power Plan, its impact on Dominion Virginia Power and a new law passed by the 2015 General Assembly that freezes the utility’s base rates and exempts it from rate reviews for five years.

All of this makes some basic and dangerous assumptions about the future of Dominion’s coal-fired generating plants.

It has somehow gotten into the common mindset that the Environmental Protection Agency will automatically force Dominion to close most of its six coal-fired stations.

Is this really so? And, if it is not, doesn’t that make much of this, including Dominion’s arguments for its five-year holiday from rate reviews by the State Corporation Commission, moot?

In June 2014, the EPA unveiled the Clean Power Plan and asked for comments by this upcoming summer. The idea is to have Virginia cut its carbon emissions by 38 percent by 2025. Coal plants are the largest contributors to carbon emissions by 2025.

A few points:

Dominion announced in 2011 that it would phase out its 638-megawatt coal-fired Chesapeake Energy Center that was built between 1950 and 1958.

In 2011, it also announced plans to phase out coal at its three-unit, 1,141 megawatt Yorktown power plant by shutting one coal-fired unit and converting a second one to natural gas. The units at the station were built in 1957, 1958 and 1974.

Mind you, these announcements came about three years before the EPA asked for comments about its new carbon reduction plan. But somehow, a lack of precision in the debate makes it sound as if the new EPA carbon rules are directly responsible for their closure. But how can that be if Dominion announced the closings in 2011 and the EPA rules were made public in June, 2014? Where’s the link between the events?

When the Chesapeake and Yorktown changes were announced, Dominion Chairman and CEO Thomas F. Farrell II, said: “This is the most cost-effective course to meet expected environmental regulations and maintain reliability for our customers.” Now Dominion is raising the specter of huge bills and unreliable grid.

Dominion has other big coal-fired plants. The largest is the 1,600 megawatt Chesterfield Power Station that provides about 12 per cent of Dominion’s power. Four of its six units—built from 1952 to 1969 — burn coal. Two others built in 1990 and 1992 are combined cycle units that use natural gas and distillate oil.

Dominion has upgraded scrubbers at the units, but the Chesterfield station is the single largest air polluter in the state and one of the largest in the nation.

Another big coal-fired plant is Dominion’s 865-megawatt Clover Power Station. It is more recent, having gone online in 1995 and 1996. It is the second largest carbon emitter in the state.

Then there’s the 600 megawatt Virginia City Hybrid plant that burns both coal and biomass in Wise County. It went into service in 2012.

Dominion had a small coal-fired plant at Bremo Bluffs but has converted it to natural gas.

So, if you add it all up, which coal-fired plants are really in jeopardy of closure by the EPA’s new rules? Chesterfield, Clover or Virginia City?

It’s hard to get a straight answer. In a blog post by Jim Bacon today, he quotes Thomas Wohlfarth, a Dominion senior vice president, as saying “It’s not a foregone conclusion that [the four coal-fired power plants] will be shut down. It’s a very real risk, but not a foregone conclusion.” Another problem is that I count three possible coal-fired plants, and don’t know what the fourth one is.

In a story about the Chesterfield power plant, another spokesman from Dominion told the Chesterfield Observer that Dominion “has no timeline no to close power stations” but it might have to consider some closings if the Clean Power Plan goes ahead as currently drafted.

Environmental groups have said that because of Dominion’s already-announced coal-plant shutdowns and conversion, the state is already 80 percent on its way to meet the proposed Clean Power Plan’s carbon cuts. When I asked a State Corporation Commission spokesman about this last fall, I got no answer.

What seems to be happening is that Dominion is raising the specter of closings without providing specific details of what exactly might be closed and why.

Its previously announced coal-plant shutdowns have suddenly and mysteriously been put back on the table and everyone, including Jim Bacon, the General Assembly and the SCC, seems to be buying into it.

Although there have been significant improvements in cutting pollution, coal-fired plants still are said to be responsible for deaths and illnesses, not to mention climate change. This remains unaddressed. Why is it deemed so essential that coal-fired units built 40, 50 or 60 years ago be kept in operation? It’s like insisting on driving a Studebaker because getting rid of it might cost someone his job that actually vanished years ago.

Also unaddressed is why Virginia can’t get into some kind of carbon tax or market-based caps on carbon pollution that have seen success with cutting acid rain and fluorocarbons.

It’s as if the state’s collective brain is somehow blocking the very idea of exploring a carbon tax and automatically defaults to the idea that if the EPA and the Obama Administration get their way, Virginia ratepayers will be stuck with $6 billion in extra bills and an unreliable electricity grid.

Could it be that this is exactly the mental legerdemain that Dominion very cleverly is foisting on us? Could be. Meanwhile, they continue to get exactly the kind of legislation from the General Assembly they want.

Time For a Fossil Fuel Reality Check

Murray

Murray

By Peter Galuszka

Let’s pause for a moment, catch our breath and realize what is really going on in the world of fossil fuel and climate change.

We’ve heard tons of loosely-based opinion from climate change deniers and drum beaters for the “War on Coal” crowd.

Here are two recent news items:

Coal baron Robert Murray is closing a $1.4 billion deal for Illinois Basin coal. The outspoken, labor-busting  boss who figured prominently in the “War on Coal” campaign during the Mitt Romney presidential run has been picking up reserves in the robust Illinois Basin and in the distressed Appalachians.

His deal for 50 percent of Foresight Energy follows another he did in 2013 worth $3.5 billion to buy five Appalachian mines from Consol.

What does this mean? It shows that coal overall does have a future, especially in the high-sulfur Illinois Basin which has been rediscovered since utilities such as the Tennessee Valley Authority have been forced to use better scrubbing equipment. Illinois Basin can be twenty bucks a ton cheaper than Appalachian product. He also sees some future left in high coast Appalachian coal.

Stop a moment and consider: new environmental regs promote the use of cheaper coal. Now that coal may not be in the Central Appalachian area of southwest Virginia and West Virginia. But the magic of the market is favoring Illinois Basin product which is simply easier and cheaper to mine as is Powder River Basin coal in Wyoming and Montana.

A big problem with some of the commentators on this blog is that they fail to grasp that the U.S. coal industry is a lot bigger than little ole Virginny’s mines that started to play out decades ago. In their world view, their demise is the fault of the bad old federal government, not sharp barons like Murray who is a major contributor to (ahem) the Republican Party. Their brains seem trapped in a geographical warp zone where they cannot imagine things beyond the borders of the Old Dominion.

And while we are on the GOP, let’s consider George Schultz’s oped Sunday in The Washington Post. For those of you who may forget, he was Secretary of State under Ronald Reagan, the mystical president some of you love and miss dearly.

Schultz’s message is that human based climate change is here. So, stop denying it, get over it and get on with a carbon tax that worked to protect the ozone layer years ago. Yes, they actually worked that out back in Ronnie’s day and a tax and marker system to reduce fluorocarbons actually worked.

Not to add insult to injury, but consider what Schultz wrote: “For example, we can now produce electricity from the wind and sun at close to the same price we pay for electricity from other sources…”

Hmm. Sounds like a wild-eyed, irresponsible greenie. Someone tell Jim Bacon and Dominion Virginia Power.

More Sharks Found in N.C. Sound

Bulls sharks: some of the world's most dangerous

Bulls sharks: some of the world’s most dangerous

By Peter Galuszka

The Pamlico Sound in North Carolina has long been a bellwether of environmental changes. Different temperatures and salinity levels can affect everything from marsh grass to shrimp catches to fish kills.

Now scientists are finding that more potentially deadly sharks are in this shallow, broad estuary that separates the mainland from the Outer Banks. The reason: rising water temperatures.

More bull sharks are being found in the Pamlico Sound, according to Charles Bangley, a doctoral candidate at East Carolina University in Greenville, N.C.

He found 36 juvenile bull sharks in the sound since 2012. Another study found 113 bull sharks from 1965 to 2011. “It’s possible the Pamlico Sound represents a new nursing area for bull sharks,” he told The Virginian-Pilot.

Why so? Warmer water means that female bull sharks are swimming into the sound through narrow ocean inlets to take advantage of more plentiful food. They tend to have their young in the sound.

That’s not all. Two great white sharks, potential man eaters, have been seen in the Outer Banks area. One 14-feet-long female was pinged by satellite on the far west side of the Pamlico Sound in January.

Shark fatalities are rare events on the tourist-heavy Outer Banks. The last fatality was in Corolla in 2009. About eight years before that, a man was killed in the surf near Avon.

I’ve seen plenty of sharks diving 20 miles off Cape Hatteras which is a good place to find them since the cold Labrador Current and the warm Gulf Stream meet there, bringing in different species.

And, many years ago, when I was working one college summer as a newspaper reporter in Beaufort County, a gill net fisherman came up with a 10-foot dusky shark in the brackish waters of the Pamlico River where sharks are almost never found. Unusually warm and dry weather that summer meant that less fresh water was flowing into the sound from the Pamlico River and the shark had been swimming into the saltier areas.

The weird thing about bull sharks is that their birthing areas are usually in Florida, scientists believe.

Is this more evidence of (dare I say it) climate change? Could be. A few years ago there was news revealing that breeding populations of alligators had moved farther north. They had been in East Lake, N.C. near Nags Head but now were up near the Virginia border.

I’ll let you know when they reach the Potomac.

Film Rips Climate Change Deniers

merchants-of-doubt-posterBy Peter Galuszka

A just-released documentary “Merchants of Doubt” seems tailor-made for the readers of Bacons Rebellion.

The film by Robert Kenner explores the profession of doubting climate change in which the energy industry quietly hires “scientists” to debunk the idea that carbon dioxide emissions are creating global warming that could have catastrophic consequences.

The strategy of confronting scientific evidence that is damaging to a particular industry has been around since at least the 1960s when the chemical industry tried to dismiss the idea that the insecticide DDT widely used to control mosquitoes could be deadly to wildlife for decades.

Big Tobacco took the concept to entirely new levels when scientific studies in the 1960s linked tobacco smoking to addictive nicotine, cancer and other bad things. Cigarette makers hauled out their own supposedly independent but payrolled “scientists” to raise doubt about the claims before congressional committees and to the general public.

The tobacco industry snowballed their phony science into yet another sphere. There had been complaints that people were being killed when they fell asleep on furniture while holding smoldering cigarettes.

The cigarette makers could have put in fire retardants in the smokes but they thought it would be too costly. So, they set up a scenario where furniture makers would load up sofas and chairs with fire retardants, which, unfortunately, proved carcinogenic or otherwise harmful. Then, of course, the chemical industry found its own “scientists” to claim the flame retardants they put in furniture were safe.

According to review so the film which I haven’t seen (it was just released March 6), Big Energy is using the very same tactics with help from the Koch Brothers and their network of paid think tanks (such as the “Heartland Institute”) to debunk the link between carbon and climate change. You may see some of those ideas popping up on this blog from time to time.

Kenner has won awards for such documentaries as “Food, Inc.” His latest film is based on a 2011 book with the same title by Naomi Oreskes and Erik M. Conway. According to a review in The Washington Post, “What’s disheartening about “Merchants of Death” is that the strategy still works so effectively in a hyper-partisan, intellectually lazy, spin-addicted 24-7 news cycle.”

Can anyone guess which news channel fits the bill?

Why Clean Energy Will Be Cheaper

Dominion's Cove Point

Dominion’s Cove Point

By Peter Galuszka

The Sturm und Drang to which utility executives, coal companies and politicians have subjected Virginians as they oppose President Barack Obama’s Clean Power Plan to reduce carbon emissions has always been a deliberate distraction from what’s really happening.

According to them and their confederates at the State Corporation Commission and the state Department of Environmental Quality, the clean air act which seeks to reduce carbon dioxide emissions by a certain date is a foolhardy, ill-intended bureaucratic effort to put coal out of business and slap ratepayers with bigger bills.

I had a moment of clarity when I read this morning’s Local Opinions page in The Washington Post  and a saw an article by Jon B. Wellinghoff. He is the immediate past chairman of the Federal Energy Regulatory Commission so he likely knows a little about energy.

His argument is that basic economics go against the electricity and coal industries’ arguments that reducing carbon will be too expensive. He cites a study by PJM, the large electricity grid of which Virginia is a part. “PJM announced this week that Virginia’s energy costs would be lower under the CPP than without it,?” he writes.

Why so? Wellinghoff says that utilities like Dominion are riding a nice low price natural gas bubble. Gas in the U.S. is going for $3 per million British Thermal Units. How long it will last is the crucial question.

Natural gas costs three times as much in Asia and Europe and (knock, knock) guess which companies are scrambling to get a new set of terminals so they can export it? Electric utilities like Dominion, that’s who.

Dominion is pressing ahead to convert its Cove Point liquefied natural gas plant on the Chesapeake Bay kin Maryland so that it can export gas to Japan and India. Dominion is also pushing a controversial $5 billion pipeline from West Virginia gas fracklands to the southeast. A spur of it would run to port areas in Hampton Roads but if you suggest that maybe Dominion plans to export gas from it, the public relations people get a mite testy.

Wellinghoff doesn’t specifically identify Dominion’s plans but he says there are 14 gas expert terminals underway.

For Virginia ratepayers, that means that a cheap, local commodity will become an expensive, global commodity. The United States will export a commodity and import price volatility.

Who will make money by exporting gas and messing up domestic prices?Dominion, that’s who.

It’s import to remember that the low price gas bubble will pop someday. Therefore, the state needs to stop whining about going to renewables and start applying them. Utilities need to make it easier for homes and business to deploy solar panels and sell extra juice back tot he grid. The U.S. uses 40 percent of the power it generates because of inefficient grids. Virginia is No. 35 in terms of state energy efficiency. Where are efforts to improve this?

Virginia’s disappearing coal industry has been complaining for years that government regulation is driving it out of business. The truth is that coal seams are becoming too uneconomic to mine. Gas is eating its lunch. I went to a Platt’s coal conference a couple of years ago In Florida where I learned that gas would have to jump to something like $8 per million BTU to make Virginia coal profitable again.

That might happen is gas prices rise as Wellinghoff predicts. But he is right that the cadre of utilities are barking up the wrong tree.

Another Russian Reformer Murdered

nemtsov killedBy Peter Galuszka

It was a personal shocker to read of the murder in Moscow of Russian reformer Boris Nemtsov, the latest in a long string of killings related to the tragic fight for change in that country.

Nemtsov was gunned down Friday in a drive-by shooting as he walked across Moskvoretsky Bridge a short distance from the Kremlin and Red Square.

The outspoken 55-year-old former nuclear physicist turned government official was a key figure in the far more hopeful years of the early 1990s when bright young people tried (in vain) to move Russia beyond the kleptocracy of the Communist era.

Nemtsov pushed capitalist reforms by trying to root out corruption. He simplified establishing businesses by taking the registration process out of the hands of crooked bureaucrats. He advocated transparency in bidding contracts. More recently, he revealed billions of dollars in payoffs at the Russian Winter Olympics last year at Sochi.

Naturally, Nemtsov ran afoul of Vladimir Putin, the former KGB officer who beat out Nemtsov as Boris Yeltsin’s successor. Putin is the spearhead of the old power elite that has seized control over the past 15 years, rolled back democratic reforms, unleashed a torrent of inside business deals, and pushed the worst military conflict in the region (Crimea and Ukraine) since the Cold War.

Nemtsov was due to lead a Moscow protest rally against Putin’s bloody Ukrainian adventurism that has killed 5,800 people. He was to stand in for Alexei Navalny another reformer who has been imprisoned for handing out leaflets at a subway station.

As he was taking a walk on an unusually warm winter evening, a car drove up. Six shots were fired. Nemtsov was killed by four bullets.

He is the fifth person – either Russian or foreign – that I have dealt with personally who has been murdered. I reported from Moscow for BusinessWeek in the 1980s and 1990s.

Here are a few examples: American businessman Paul Tatum involved in a dispute with a Chechen partner was slain by 11 bullets to the head and neck at a subway station that I used to frequent. Paul Klebnikov, an American editor of Russian-language Forbes magazine, was shot near his apartment. Russian investigative journalist Yuri Shchekochikin, a friend who got me an assignment to write for Literaturnaya Gazetta, died in an apparent poisoning.

I had interviewed Nemtsov back when he was pushing far-reaching and radical change in the the city of Nizhniy Novgorod, formerly known as Gorky, east of Moscow.

He is the highest-profile reformer to be killed during the regime of Putin who says it was a contract killing and that he will oversee the investigation “personally.”