Category Archives: Taxes

Big Energy’s Conspiracy with Attorneys General

Former Va. Atty. Gen. Miller --toady for Big Energy

Former Va. Atty. Gen. Miller –toady for Big Energy

By Peter Galuszka

What seems to be strong opposition to a host of initiatives by President Barack Obama and the U.S. Environmental Protection Agency to curtail carbon and other forms of pollution is no mere coincidence.

According to a deeply reported story in Sunday’s New York Times, some state attorneys general, most of them Republicans, are part of what seems to be a covert conspiracy to oppose carbon containment rules in letters ghost-written by energy firms.

And, there’s a big Virginia connection in former Democratic Atty. Gen. Andrew P. Miller and George Mason University which have been bankrolled by conservative and Big Energy money for years.

The cabal has drawn its modus operandi from the American Legislative Exchange Council, funded by the ultra-right, oil-rich Koch Brothers of Kansas. In that case, ALEC prepares “templates” of nearly identical legislation that fits the laissez-faire market and anti-government and regulation principles held dear by the energy and other big industries. Many marquee-name corporations such as Pepsi, McDonald’s and Procter & Gamble have dropped their ALEC membership  after public outcries.

In the case of the attorneys general, big petroleum firms like Devon Energy Corporation of Oklahoma draft letters opposing proposals that might hurt their profits such as ones to regulate methane, which can be a dangerous and polluting result of hydraulic fracking for natural gas. The Times notes that Oklahoma Atty. Gen. E. Scott Pruitt then took Devon’s letter and, almost-word-for-word, submitted it in his “comments” opposing EPA’s proposed rules on regulating fracking and methane.

The secretive group involves a great deal of interplay involving the Republican Governor’s Association which, of course, helps channel big bucks campaign contribution to acceptable, pro-business attorneys general. In 2006 and 2010, Greg Abbott of Texas got more than $2.4 million from the group. Former Virginia Atty. Gen. Kenneth Cuccinelli got $174,5638 during his 2009 campaign.

One not-so-strange bedfellow is former Virginia Atty. Gen. Andrew P. Miller who was in office from 1970 to 1977 and is now 82 years-old. He’s been very business promoting energy firms. As the Times writes:

Andrew P. Miller, a former attorney general of Virginia, has in the years since he left office built a practice representing major energy companies before state attorneys general, including Southern Company and TransCanada, the entity behind the proposed Keystone XL pipeline. The New York Times collected emails Mr. Miller sent to attorneys general in several states.

“Mr. Miller approached Attorney General Scott Pruitt of Oklahoma in April 2012, with the goal of helping to encourage Mr. Pruitt, who then had been in office about 18 months, to take an even greater role in serving as a national leader of the effort to block Obama administration environmental regulations.

“Mr. Miller worked closely with Mr. Pruitt, and representatives from an industry-funded program at George Mason, to organize a summit meeting in Oklahoma City that would assemble energy industry lobbyists, lawyers and executives to have closed-door discussions with attorneys general. The companies that were invited, such as Devon Energy, were in most cases also major campaign donors to the Republican Attorneys General Association.

“Mr. Miller asked [West Virginia Attorney General Patrick Morrisey] to help push legislation opposing an Obama administration plan to regulate carbon emissions from existing coal-burning power plants. Legislation nearly identical to what Mr. Miller proposed was introduced in the West Virginia Legislature and then passed. Mr. Morrisey disputed any suggestion that he played a role.”

Not only that, but George Mason has an energy study center that is bankrolled by Big Energy and tends to produce policy studies of what the energy firms want. It also has the Mercatus Center, a right-wing think tank bankrolled by the Koch Brothers.

So, when you see what seems to be a tremendous outcry against badly needed regulations to curb carbon emissions and make sure that fracking is safe, it may not be an accident. And, it comes from attorneys general who should be protecting the interests of average residents in their states instead of being toadies for Big Energy.

Meet the New Plan, Same as the Old Plan

ed_planby James A. Bacon

Last week Governor Terry McAuliffe published his strategic plan for economic development, which will provide a road map for legislative and executive policy for the remainder of his term. My quick-and-dirty analysis is that there’s nothing much new here — it checks all the usual boxes — but there’s nothing offensive either. This strategic plan, like those of previous administrations, represents the conventional wisdom of the usual stakeholders.

While the plan does acknowledge the necessity of emancipating Virginia’s economy from his dependence upon the federal government, it ignores the state’s slipping rating in a variety of national business climate rankings. Indeed, the report engages in delusional thinking. “From the robust economy to competitive taxes and incentives, Virginia’s pro-business climate has few, if any, peers,” states a passage describing Virginia’s economic development assets. I think Virginia is a great state and wouldn’t live anywhere else but, really, I know nonsense when I see it. Few peers? C’mon.

Virginia does have many strengths, which served the state well in a previous economic era dominated by corporate recruitment. Our building costs are eight to 22 percent lower than the national average. We have the second lowest workers’ compensation costs in the country. The state has maintained a AAA bond rating since 1938. Virginia can boast of “the greatest number of scientists and engineers of any state.” But the state is struggling to shift to an entrepreneurial, knowledge-based economy.

At least the authors of the report understand that such a transition must be made. As they note, thirteen of the state’s top 20 employers are either public-sector enterprises (U.S. Department of Defense, Fairfax County Public Schools) or private contractors dependent upon federal spending (Huntington Ingalls Industries, owner of the Newport News shipbuilding complex). But the situation is even worse than that. Of the top private sector employers, three are retailers (Walmart, Food Lion and Lowe’s Home Centers) and two (Sentara Healthcare and HCA Virginia Health System) are medical enterprises, none of which provide goods or services tradable outside the state. Only one company — Capital One Bank — creates products and services that it trades outside Virginia. That’s a sad commentary indeed.

The report correctly contends that the focus of economic development should be on building private companies that aren’t dependent upon government spending. To foster that growth, it sees government playing supporting role by being best in class in five areas: infrastructure; strategic growth sectors; overall business climate; entrepreneurism and innovation; and talent. The report also is realistic enough to know that in the current economically constrained environment, the commonwealth of Virginia is in no position to launch any big spending initiatives. The proposals described in the report are appropriately modest and focused.

The biggest void in the report is the lack of any connection between economic development and community development. Arguably, the biggest single challenge in economic development is not just developing a skilled and educated workforce but recruiting and retaining a workforce. It’s the old Richard Florida creative-class thesis. Corporations locate where the skilled labor is. Workers with education and skills tend to pick where they live, based on lifestyle amenities and cultural attitudes, not on where they can find a job. If a company can’t recruit workers to live in [name of your town here], it will suffer a competitive disadvantage. If young, skilled employees decamp for other metropolitan regions, the labor pool shrinks… and employers suffer a competitive advantage.

Our understanding of what mobile but highly desirable creative-class employees are looking for in their lives is still fairly primitive. We have some vague ideas — educated young people like walkable urbanism, bicycle lanes, cool food, a live music scene, etc. etc. — but no one is factoring that knowledge into a clearly articulated strategy that encompasses zoning policies, transportation improvements and public works investments. Until we do, every governor’s economic-development strategic plan will fall short.

Suddenly, It’s Raining Gas Projects and Tax Breaks

Anti-Pipeline By Peter Galuszka

Suddenly it seems to be raining natural gas pipelines and snowing millions of dollars in tax breaks and incentives for rich electric utilities.

Dominion Resources, the powerful and politically well-connected Richmond-based utility, apparently is getting $30 million in public money from the Virginia Tobacco Indemnification and Revitalization Commission without apparently asking for it to help build a new natural gas-fired generating plant in Brunswick County. The information was broken by the Associated Press.

Largesse for Dominion stretches to the other side of the Potomac River as well. The Washington Post reported Sunday that Calvert County Md., where Dominion has approval to convert a liquefied natural gas facility to handle natural gas exports, is going to give the utility about $560 million in tax credits.

And, back in Virginia, controversial is growing over the $5 billion natural pipeline that Virginia and three other southern utilities are planning to take natural gas drilled by hydraulic fracking methods from West Virginia to Virginia and North Carolina.

The Atlantic Coast Pipeline has drawn criticism from environmentalists who fear that gas is not the cleaner panacea to coal that many think. Landowners complain that Dominion and its powerful Richmond law firm, McGuireWoods, are using strong arm methods to force their way on their land to survey possible routes.

mountain valley pipelineYet another pipeline – this one doesn’t involve Dominion – is drawing concern in southwestern Virginia. The $3.5 billion Mountain Valley Pipeline that would likewise begin in the fracked gaslands of northern West Virginia and head south west of Roanoke and then cut to the small town of Chatham.

The complaints are the same as the Atlantic Coast Pipeline – green concerns about leaking methane and the threat of bulldozing bucolic private land by companies using eminent domain.

The Mountain Valley project is being spearheaded by EQT Corp. of Pittsburgh and NextEra Energy of Florida.

So what gives? Utilities like Dominion are using more gas, namely at its new Brunswick County natural gas plant and at an older coal-fired station that’s been converted at Bremo Bluffs on the James River. But how much gas does it actually need?

In the case of Cove Point, Dominion notes that the plant has been importing LNG from places like Northern Africa and Scandinavia for decades although imports have come to a spot given the glut of cheap, domestic gas.

Dominion, which bought the facility about a decade ago, can get gas from an older pipeline that for years has linked the Chesapeake Bay area with gasfields in Pennsylvania where some of the fracking for new product is occurring. Dominion can also tap gas from the venerable Transco Pipeline that for decades has transported gas the traditional way – from the Gulf State processing stations to the northeast.

Dominion says it already has contracts to export gas – from where it comes domestically – to utilities in Japan and India. But when one looks at the spaghetti-like twirl of all of the proposed new pipelines, one wonders what the game really is.

The Atlantic Coast Pipeline has a leg that bounds over to Hampton Roads from near the North Carolina border. Dominion says that this one will help supply one of its pipeline partners with gas because it serves South Hampton Roads. Ok, fine, but it might also serve another new LNG export facility in that area that has perfect deep water conditions for such a facility.

And, as some environmentalists and property owners wonder, why couldn’t the energy companies tap rights of way near existing pipelines? Why can’t existing pipelines be expanded? Go back to the utilities and they say they don’t know exactly where the pipelines will go.

That is very curious. While they don’t know where mega-billion project projects are going to go, they seem to be getting tens, if not hundreds, of billions of dollars in public funds and tax breaks to help them proceed with the Brave New World of natural gas.

 

Virginia’s Very Own Keystone XL

acl pipeline map By Peter Galuszka

The rise of natural gas keeps raising more questions about the proper future of Virginia’s and the nation’s energy policies. What just a little while ago seemed a benign source of energy has gushed into a mass of controversy and advantage.

One focus of the conflict – good and bad – is the $5 billion Atlantic Coast Pipeline that Dominion Transmission and three other southern utilities want to build from the booming natural gas fracklands of northern West Virginia, across sensitive Appalachian terrain and on through Virginia and North Carolina.

The pipeline is unusual since it doesn’t follow the usual post World War II path – Gulf States to the industrial northeast — but it shows just how the U.S. energy picture is being turned on its head.

People in West Virginia have faced the raw end of energy issues for a century and a half, but it is a new matter for the bucolic areas of Nelson County and some of Virginia’s most pristine and appealing mountain country.

Here is a story I wrote for Style Weekly on the promises and problems of Virginia’s very own Keystone XL.

My Drive Through Two West Virginias

A natural gas well fire in nothern West Virginia

A natural gas well fire in northern West Virginia

 By Peter Galuszka

It was a biting eight degrees when I hit the road in Beckley, W.Va. last Wednesday morning having held a book signing and given a talk in Charleston the night before.

I wanted to drive two hours up to Harrison County, where my family lived from 1962 to 1969, and see what had changed. I hadn’t been there in a few years.

Harrison and neighboring counties Doddridge and Lewis had long been coalfield areas along with natural gas. Coal had pretty much played out after the 1980s but there are still some big mines. Its real claim to fame is the underground rock formation ideal for glass-making. In the 1890s, it had attracted hundreds of craftsmen from Italy who made Clarksburg an important glass center and home to the locally-famous “Pepperoni Roll” – a small loaf of bread with a long stick of pepperoni inside.

As I drove up Interstate 79, I noticed the first signs of the area’s most recent transformation. There were plenty of oversized truck rigs with oddly-shaped machines. A number carried long steel pipes.

When I drove on familiar roads, I noticed that small lots that might have stored strip coal mine gear were all now filled with bright-orange wellheads. Davisson Run, a small creek where we used to hunt for frogs, is now near a large new building for Dominion Transmission — yes, that Dominion based in Richmond — which plans a $5 billion natural gas pipeline from the area through Virginia and North Carolina.

Welcome to Fracking Central. This part of northern West Virginia is booming thanks the Marcellus Shale formation rich with hard-to-get natural gas. In just a few years, hydraulic fracking, using high pressure water and powerful chemicals to fracture underground gas pockets and pump them out, has revolutionized the U.S. energy industry.

My mission (which failed) was to find a woman living in a rural house in the rolling hills and dairy farms of western Harrison County. She had been on YouTube two years ago complaining how her neighbor had sold gas rights and turned pleasant pastureland into an obnoxious industrial site with all-night floodlights and diesel generators roaring 24/7. Huge trucks carrying water for high pressure injection clogged narrow county roads.

I drove through Salem, a tiny college town, and noticed signs reading “Antero Resources” that reminded truck drivers supplying rigs to drive slowly and not to “Jake Brake” – use brakes on some trucks that make a loud, machine gun sound as they tap engine exhaust to slow down.

Antero Resources was a big clue. They are an independent gas and oil firm based in Denver that has hit the fracking craze in a big way. They have rights to something like 384,000 acres of gasland in the surrounding area. Having gone public only recently, the company has revenues that have zoomed from $195 million in 2011 to $259 million in 2012 to $689 million last year.

Antero has had its problems. In July 2013, “flowback” material from a Doddridge Count well exploded, badly burning five workers and killing two. Earlier this year, the West Virginia Department of Environmental Protection issued a case operations order to Antero because of tank ruptures. The firm has also been accused of released methane into the private wells of 12 individuals.

I couldn’t find out if some are enjoying the economic benefits of fracking. One reads of people suddenly drawing $1 million a year in royalties. I did notice was that there was a lot more drilling support activity and more shopping malls.

My road trip was in marked contrast to one I had taken the day before in the southern part of West Virginia.

Upper Big Branch memorial in Whitesville

Upper Big Branch memorial in Whitesville

I was on my way to give a talk in Charleston about the paperback edition of my book “Thunder on the Mountain: Death at Massey and the Dirty Secrets Behind Big Coal.” I had the time so I chose to head up fateful Route 3 through the Coal River Valley where I have spent a lot of time in the past four years.

Route 3 in Raleigh County is a lot different from any road in Harrison County. The peaks are taller, steeper with more distinct hollers. Rock outcrops jam out at you, unlike the gently rolling hills of the north. The late fall sun is dramatically restricted.

This is the road that suddenly became flooded with ambulance and fire trucks on April 5, 2010. A huge explosion at the Upper Big Branch deep mine owned by then-Richmond-based Massey Energy killed 29 miners. Before then, it had been Ground Zero in the environmentalists’ vigorous war against Mountaintop Removal, which is strip mining on an obscenely large scale. Hundreds of feet of mountaintops are lopped off by gigantic drag lines. The leftover dirt and trees are dumped into creek beds destroying habitat.

I headed north along Big Coal River, which is anything but. Its valley provides just enough space for a road and a CSX rail line in some areas. I went past the new Marsh Fork Elementary School that Massey Energy was forced to build to replace one a few miles away that was threatened by its mine operations.

There was Jarrett’s store (new sign) where bystanders watched all the police cars and ambulances that fateful April day. Soon, the old Marsh Fork school appears. It had been a focus of yet another battle over coal but today it is abandoned and fenced in. Its playground is close to huge coal storage towers. Soaring above them is an earthen dam holding back a lake with about 3 billion gallons of toxic sludge.

There was very little activity – odd since the coal of the valley is the best in the world. Then it came – Upper Big Branch mine – lifeless. It was sealed after the disaster. Past roads with signs reading “Ambulance entrance” there was the portal where the UBB miners came and went. There is a lonely memorial of 29 black helmets at the base of a steel tower. Another memorial to them is a few miles north at Whitesville – a classic coal town filled with empty stores, although the florist shop is still busy.

No coal trucks, no pickups, for miles. The only activity was at the Elk Run deep mine at the very top of Route 3.

Why? One reason is that fracked natural gas from Harrison County and its region is stealing electric utility market share away from coal.

The other reason is Asia’s economic slowdown. Coal River and UBB provide metallurgical coal used for export to smelt steel in foreign mills. (They don’t anything to do with “Keeping Our Lights On” as the pro-coal propagandists say.) Met coal can be enormously lucrative but its prices are down two thirds from three years ago.

That’s bad news for Bristol-based Alpha Natural Resources, which bought out Massey for $7 billion after the disaster. Alpha is in such bad straits that hedge funds are lining its stock up for shorting trades, according to this morning’s Wall Street Journal.

Well, that’s my road trip. Not to worry, though, I’ll be back soon. The criminal trial of Donald L. Blankenship, former Massey CEO and otherwise known as “The Dark Lord of the Coalfields,” starts Jan. 26 in U.S. District Court in Beckley.

Fracking Our Pristine Mountain Forests

GW forestBy Peter Galuszka

Is nothing sacred? Of all groups, the U.S. Forest Service should protect the lands it controls, but today it introduced a plan that would allow limited hydraulic fracturing for natural gas in the 1.1 million-acre George Washington National Forest which straddles Virginia and West Virginia.

Virginia Gov. Terry McAuliffe had opposed lifting the ban, although he supports other proposed gas projects in the state, such as the 550-mile Atlantic Coast Pipeline that would stretch from the fracked gaslands of Northern West Virginia over the mountains and southeastward to Southside and Hampton Roads and North Carolina.

Forest lands help supply drinking water to 4 million people including those in Richmond and Washington. Some of the forest land has so-called “Karst” topography made up of rock formation that can be dissolved. In those conditions, any leakage of methane, or the toxic, powerful chemicals used in fracking would be more, rather than less, likely to poison drinking water.

The only good news out of the new USFS plan is that before some 995,000 acres could be available for drilling and that amount will now be limited to 177,000 acres.

But what can’t they let it all be? If you head west where the heart of the Marcellus Shale formation has become one of the mega-meccas of fracked gas, you hear of impacts of all types from drilling. These have included fire, explosions, diesel generators roaring 24/7, drinking water effects, bright floodlights and so on. In fact, I am embarking on a drip in about an hour that will end up in frack-land and will report when I get back.

To be sure, natural gas drilling has been going on for decades in the Appalachian Plateau of the western slopes of the Appalachians. Few pipelines crossed eastward over mountains and it was rare to find many drilling rigs in those areas.

But the fracking craze continues unabated and is now a $10 billion industry in the Marcellus Shale formation. One potential new target could be a different formation that starts from Fredericksburg and slips under the Potomac northeast into Maryland. A Texas firm with a letter drop address has been talking about leasing rights for fracking. One assumes that if the leases are in place, they’ll be quickly flipped to an actual drilling company, but you won’t know who. Virginia is only in the very early stages of setting up state rules for fracking.

Environmentalists say natural gas can be an even worse carbon polluter than coal should methane be released. Some others believe that the biggest damage comes not from the actual fracking process with millions of gallons of water and chemicals but from faulty wells.

One can make an argument that gas is good because it has completely reorganized the global pecking order in terms of energy. It means the U.S. need not be beholden to machinations of the Middle East, Central Asia and the likes of Vladimir Putin.

What bothers me is the rush to frack. I remember back in the 1960s in West Virginia when mile after mile of mountain side had been ripped apart by surface miners. It was a cheap way to get at coal. Mystery companies were supposed to reclaim the mine site but rarely did because they’d bankrupt one alphabet soup firm merely to create a new one.

The fracking craze, if not properly regulated, could yield even worse environmental disasters.

The Statewide Implications of the Vihstadt Election

Vihstadt interacts with supporters. Photo credit: ARL Now

Vihstadt interacts with supporters. Photo credit: ARL Now

by James A. Bacon

The election of John Vihstadt to the Arlington County Board in the general election last week, which has gotten very little play downstate, is rocking the Democratic political establishment in Virginia’s most liberal jurisdiction. Electorally speaking, Arlington is bluer than the sky on a clear October day — Obama won 69% of the vote in 2012, Romney 29% — yet citizens have had it up to their eyeballs with gold-plated spending schemes.

Arlington has done a superb job in managing transportation and land use, with the result that it enjoys the best of both worlds: a relatively low tax rate and a bountiful flow of tax dollars into the treasury. The county’s liberal Democratic majority deserve credit for having stuck consistently to their Smart Growth development strategy for decades and for doing an excellent job on execution.

But liberal Democrats do love to spend money, and a series of controversies over $1 million bus stops, an $80 million aquatics center, a $1.6 million dog park and a $350 million streetcar project has a lot of citizens up in arms.

Vihstadt, a Republican-turned-independent, won a special election in April, campaigning against the streetcar project as his signature issue. He won re-election last week with nearly 56% of the vote, making him the first non-Democrat to win a general election since 1983. It’s not as if the Dems didn’t turn out for the election — Arlington voters backed Senator Mark Warner with more than 70% of the vote.

County Board member Libby Garvey, a Democrat, has joined Vihstadt in opposing the controversial project in the five-person board. Now some observers are saying that the three pro-streetcar board members, two of whom stand for re-election next year, are on the hot spot.

The punditocracy has devoted considerable ink to the divining the extent to which the 2014 elections were a genuine Republican “wave” or a reflection of the fact that core Democratic constituencies don’t turn out in off-year elections. Vihstadt’s victory is indicative that something deeper than voter turnout or a new-found love of Republicans lies at the root of the election results. Democratic turnout was not an issue in Arlington’s local election — almost everyone’s a Democrat to begin with. But it seems clear that even some Democrats are uneasy with what is perceived to be runaway spending.

Not everyone sees it the way I do. Robert Parry, a former investigative reporter for the Associated Press and Newsweek, sees the vote as a triumph of the liberals’ all-purpose bogeyman — racism! As Parry observes in a recent column, white Arlingtonians don’t think of themselves as racist. But how else does one explain voter rejection of a streetcar that would provide transportation services to the county’s black community, which has been victimized by slavery… Jim Crow… residential discrimination… income disparities, etc., etc.

“Tea Party-style politicians have learned that — whatever the reality — they can exploit the Old Confederacy’s subterranean racial divisions for political gain,” writes Parry. “As we’ve seen in Arlington County, the strategy works not only in the rural Deep South but in relatively sophisticated communities in Northern Virginia.”

Talk about denial — Arlingtonians may be the most affluent, educated and liberal electorate in Virginia but they are closet racists who were duped by the Tea Party!

Sometimes opposition to big spending is simply… opposition to big spending. Republicans and independents may be greed-heads who selfishly want to spend their own money themselves rather than handing it over to politicians to spend it for them. But even some idealistic Democrats realize that if the United States is to preserve the welfare state, the country, the state and the county can’t afford to run out of money because they frittered it away on wasteful projects.

Other politicians with big spending plans should pay heed. Republican Virginia Beach Mayor Will Sessoms — are you paying attention? Democratic Richmond Mayor Dwight Jones — how about you?

Kudos: U.S.-China Climate Pact

Shanghai: Soot City

Shanghai: Soot City

By Peter Galuszka

President Barack Obama’s trailblazing pact with Chinese leader Xi Jinping to limit greenhouse gas emissions through 2025 is welcome news and could do much to reduce carbon dioxide emissions since the two countries are responsible for about 40 percent of the globe’s total.

China is an economic powerhouse so energy hungry it builds a new coal-fired generating plant about every eight to 10 days. Its leaders have pledged to cap  carbon emissions by 2030 or earlier.

Obama announced a plan to cut U.S. emissions by 26 to 28 percent below 2005 levels by 2025. This is a bigger cut than the 17 percent reduction by 2020 that he had announced earlier.

The agreement, reached in Beijing, is most welcome for the obvious reason that it would make a huge contribution to reducing greenhouse gases. It also undercuts the arguments by the fossil fuel industry, some utilities and their drum beaters that any steps the U.S. takes in cutting carbon pollution are pointless since China (or other Asian countries) will keep polluting anyway.

The arguments are crucial since Virginia’s Big Energy industry and the staff of the State Corporation Commission are attacking plans by the EPA to greatly reduce carbon.

Consider this gem of wisdom from another correspondent on this blog: “Virginia could revert to stone-age levels of zero greenhouse gas emissions tomorrow, and the savings would offset the increase in CO2 from coal-fired power plants built in India and China in a year! (OK, maybe not a year, but over a very short period of time.)”

Sadly, this kind of mentality is regressive and, with the new Washington-Beijing pact, is becoming increasingly irrelevant.

One thing many American commentators don’t seem to realize is that China isn’t necessarily a primitive business juggernaut stomping on any rational plan to check pollution. Beijing and Shanghai have some of the highest rates of air pollution in the world and its leadership, especially engineers and policy makers capable of understanding how technology can help them, knows they just can’t continue as before.

Three years ago, I visited both cities to research a book on the coal industry (newly out in an updated paperback, by the way, see below). I also went to Ulanbatour, the capital of coal-driven Mongolia where the air was so bad, I felt delirious within hours after arrival and by the next morning I showed signs of pulmonary illness.

The promise for changing things seems to money and the system.

In the U.S., we have a regulatory oversight apparatus over energy generation. This is reasonable because it prevents electric utilities from using their monopoly power to stick customers with high rates. But the system is flawed because: (1) it too often favors big utilities over average consumers and; (2) it is rigged to prevent new, experimental and possibly transformative technologies that very well could allow the use of dirty and dangerous but still cheap coal.

In the latter case, the thinking seems to be to go for ephemeral cost benefits (like using natural gas) without having any long-term strategy that actually might save lots more money through better health and more efficient, less-polluting energy.

In several cases, regulators nixed pilot plants that burn coal but use special new ways of doing so that capture a lot of carbon either in a chemical process involving ammonia or by stripping off the carbon emission from the pollution stream and sequestering them safely away. The plants cost big money. They are much cheaper to do as greenfield sites but regulators are more inclined to prevent them in favor with the soup d’jour of power that happens to be cheapest at the moment, in our current case, natural gas. Continue reading

How Not to Spend Public College Money

vsu multi-use

Virginia State’s multi-use center

By Peter Galuszka

As Virginia’s students and their families struggle paying their tuition and related expenses, the state’s 15 public universities continue to charge excessively for mandatory fees for athletics and massive bricks and mortars projects.

These are the conclusions by the Joint Legislative Audit and Review Commission (JLARC) which has issued a series of studies on college spending to the General Assembly. Dubious fees and a $7 billion collegiate construction boom are some of the reasons why the average tuition for in-state students has risen 122 percent over a decade.

One doesn’t have to look far to see the shiny new buildings. At Virginia Commonwealth University in Richmond, former President Eugene Trani spent decades expanding his school’s two campuses. In the process, he transformed downtown for the better but one must ask why the huge expansion seemed to get more attention and resources than raising the school’s academic status. . Late this summer, VCU ordered a $21 million budget cut to help the state with its $881 million revenue shortfall.

In Charlottesville, students at the University of Virginia can enjoy the recently completed $100 million South Lawn project that was a decade in the making and added a patch of new buildings. It is now adding a children’s medicine building at his health care complex.

For one of the stranger examples of dysfunctional spending, consider Virginia State University near Petersburg. The small, historically Black school is well into building an $84 million multi-use center that would serve students as well as offer a venue for community events, much like VCU’s Siegel Center which hosts graduation ceremonies for many area high schools.

As the center is being built, school officials plan to use it to help transform the surrounding areas of the small town of Ettrick. They are using the model of VCU about 25 miles up Interstate 95 as a blueprint for linking school expansion with local community development.

Yet VSU faces such serious financial problems that its president Keith Miller, stepped down unexpectedly on Halloween. Thanks to shortfalls in financial aid and other problems, the school ended up with a sudden $19 million shortfall. Attendance at the school is down 1,000 from last year and 550 short from what the administration had expected.

Students complain that they found out about cuts in their state and federal aid only at the very last minute and many had to drop out. VSU has been through a series of financial problems that have forced it to switch to a fast food-only menu at one of its dining halls. Laboratory equipment is scarce, students say.

They wonder why the school is busy erecting a huge new multi-use center when they have many more obvious and pressing problems at hand. A school spokesman says that funding for the new center is handled by a foundation and is not directly linked to the school’s financial system. VSU is expected to name an interim president later this week after more than 900 students signed petitions asking for a wholesale revamp of the school’s top management.

JLARC found other areas of concern, such as forcing students to pay mandatory fees for sometimes oversized athletic programs that tend to operate in their own worlds that have little relevance for most students. Not every student cares about all of the sports or has time to support every team. Plus, JLARC says that the state should reconsider its methods of handing out financial aid to make sure that low and middle income students are the ones who actually get it.

One hears a lot about overpaid professors and administrators. But the JLARC studies suggest their salaries may be less of a problem than using colleges as cash cows for construction projects and to prop up ambitious sports programs that may have very little to do with the schools they represent.

Virginia’s Political Class and the Chaos of Road Funding

Virginia politician

Virginia politician

The General Assembly is reconvening today to consider a number of issues, most prominently budgetary ones. There are two pieces of the situation that I understand with some clarity. First, the commonwealth is facing a revenue shortfall of some $1.55 billion in the current biennium. Second, Congress failed to pass an Internet tax that the masterminds of McDonnell-era transportation tax “reform” were counting on to fund Virginia’s roads, highways and rail to the tune of $1 billion over five years. The rest of it is an indecipherable mess that will leave voters utterly confused about what is going on, with no idea of whom to hold accountable or why.

Michael Martz, the Times-Dispatch’s go-to guy for explaining topics of mind-numbing complexity, gave it his honest try in the newspaper today, but the result is an incoherent mess. I don’t blame Martz for the incoherence — I blame the legislature and its Rube Goldberg approach to budgeting. Adding to the sense of urgency, a failure to act could threaten $100 million in bonds to be issued by the Northern Virginia Transportation Authority.

This is what you get when you try to “fix” transportation funding by abandoning all logic and principle — such as the old “user pays” system in which pay to build and maintain roads in proportion to which you use them — and substituting a system of subsidies and cross subsidies so that no one is really sure who’s paying for what. This is the environment in which politicians thrive because it allows them to engage in horse trading, deal making and the collection of chits. But the invariable result is episodic chaos — not to mention the overuse of roads that comes from severing the connection between using and paying for them.

– JAB