Emission Troubles
Research for Online Investors

by John Dalt

12/08/09

Yesterday we wrote about the ramifications of the Copenhagen Confab and the EPA declaring green house gases a human health hazard.  The Senate probably would not be able to pass any kind of ‘cap and trade’ treaty that the President would present, since it will most certainly involve reversing any chance of growth for our economy and involve paying other countries to improve their energy efficiency.  The other factor is that Senators like to be re-elected, and the intrusion into the public’s lives will be significant.

Congress could restrict the ability of the EPA to regulate carbon dioxide, but that is like saying they could disband the EPA.  This is impossible with the political make up in Washington.  I am thankful to paid up subscriber D.J for sending in a few quotes that you will not enjoy, but need to read.

From John Kerry (D-MA), “The message to Congress is crystal clear: get moving. If Congress does not pass legislation dealing with climate change, the administration is more than justified to use the EPA to impose new regulations.”

From Yvo de Boer, U.N. climate change Chairman, “This is very significant in the sense that if… the Senate fails to adopt legislation (on emissions), then the administration will have the authority to regulate.”

The Wall Street Journal opines this morning that the administration is “seizing the opportunity of clean-energy reform” in, An Inconvenient Democracy.  Seizing the opportunity echoes Rham Emmanuel’s statement to ‘never let a crisis go to waste.’

The EPA is re-writing regulations to target emitters of more than 25,000 tons of carbon per year.  This lets the regulators target power plants, refineries, and other large producers of energy and carbon and leave the little guy alone.  Citizens will not have to respond to any regulation,  just pay for it in higher energy bills.

According to the Ecole Active Bilingue Jeanine Manuel, humans breathe ten to fourteen times per minute.  This can increase to 25 times per minute during exercise.  In addition, when we exercise we breathe deeper.  Heavy exercise can increase human carbon dioxide emissions six hundred percent.  The air that we expel from our lungs is also saturated with water vapor.  This is dangerous as humidity in the atmosphere traps the greenhouse gases.

Our answer to the EPA, ban all exercise, health and workout centers.  We could all sign a declaration with our tax return that we did not participate in any organized physical activity, and have maintained a steady eleven breathes per minute during the last year.  Shazam, climate change is corrected and we get to enjoy a chocolate covered cherry.

Yesterday we wrote about the ability of the free market to address climate change without intervention by ‘world improvers’.  We have called crude oil the ‘trade of the year’.  Crude oil is primarily used in transportation, with other fossil fuels such as coal and natural gas used for electricity generation.  Basic economics, and recent history, teach us that as a commodity’s price increases, consumption goes down.  Electrical utilities are using natural gas to replace coal as much as possible because of its low price.  Natural gas burns cleaner than coal.  As the use of fossil fuels decreases, so do the greenhouse gases emitted.

The Kyoto Protocol called for industrialized countries to reduce greenhouse gases an average of 5.2% below 1990 levels, but provided an exemption for ‘developing countries’ like China and India.  The U.S. target was a reduction of 7% by 2012  Due to the increasing cost of fossil fuels, U.S. emissions are moving in the right direction, and it didn’t take government action!

According to Tree Hugger, Total U.S. greenhouse emissions were down 2.2% in 2008, with the transportation sector down 4.7%  Surprise, Surprise!  Sometimes when things are obvious, I have a Gomer Pyle moment.

E missions were up in 2007 after a reduction in 2006.  As we said yesterday, the free market is messy.  You can read all 68 pages of the Energy Information Agency’s (EIA) official “Emission of Greenhouse Gases in the United States”

The EIA attributes the drop in emissions to three factors; high-energy prices, economic contraction, and lower electricity demand.  The lower electricity demand was important because the numbers were even lower as power generators shifted to lower carbon intensity (natural gas) in their generation.  Petroleum use contributed 44.6% of total fossil fuel based emissions.  Driving less equals lower emissions.  Who would have thunk?

The information presented in this newsletter is based on generally available news releases, corporate filings, current events, interviews and the editor’s opinions.  It may contain errors and you should not make investment decisions based solely on what you believe you have read here.  Do your own research, it is your money.  If you lose it, it is your responsibility, not ours or your grandmothers!  The editor may or may not have a position in any securities discussed.  The editor may have held a position in a security earlier, or in the future.

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