The Huessy Report

Weekly Report from Peter Huessy, the President of Geo-Strategic Analysis, June 24, 2024

Quote of the Week

Whenever there is a revolution in military affairs, there is a predictable recurrence of hype. It probably began when the first suit of armor led to the proclamation of the death of the slingshot. Ask Goliath how that worked out. by Barry Strauss via Strategika

California Dreamin’

Tax and Economic Growth

Look at per household economic income growth under the past four President’s—total and per year. Trump exceed the Bush, Obama and Biden administrations combined both in total and per year. Trump in four years exceeded the income growth in 19 years of the other three administrations. Here are two charts that tell the tale. From Stephen Moore.

CV Update

Banning IC Engines &Suing the Oil and Gas Industry

The State of Maryland bans IVC Engine sales by 2035. The State of Vermont is also one of the 11 states also calling for an end to IC engines sales in their state by 2035. However, the folks in my home state of Vermont are also suing the 25 largest oil and gas companies for global climate change impacts, which Climate Analytics claims reaches $200 trillion from 1995-2024. Vermont says any US oil and gas company that created more than 1 billion tons of green-house-gases over that period is on the hook. These clever people are seeking a judge to declare that like the tobacco settlement the oil and gas industry had secret data that proved that climate change would cause grave harm and they hid it from the American people. Then like the tobacco settlement, the industry will cave and pay up. Here is my lengthy analysis of why Vermont’s proposal is without foundation but it has lessons for Maryland.

Vermont’s State Legislature has sued the oil and gas industry for the harm produced since 1995 by Greenhouse Gass (GHG). The lawsuit is part of a nationwide effort to put the oil and gas industry out of business but not before fleecing the industry for tens of trillions. (Yes, one company is telling investors the industry owes $200 trillion in damages over 29 years.

Connected to the effort is a ban now supported by 11 states, on all IC engines by 2035, as well as a companion ban on the production and selling of meat and dairy products, so to reduce bovine flatulence and belching, which produce methane gas. .

This essay examines two key parts of this lawsuit.

Fist, could Vermont survive a 90-100% carbon free environment (their goal by law) or are they committing economic suicide? And second, even accounting for all the GHGs produced from the use of fossil fuels, is the impact so negligible as to make any impact on the states climate essentially zero?

Nationwide, GHG’s are produced by vehicular travel, electricity generation, bovine belching, and industrial activity from petro-chemicals to mining to small manufacturing.

The use of oil and gas, however, helps Vermont produce jobs, earn income, collect revenue and run the state. And Vermont’s  contribution to GHG emissions is tiny as its 643,000 population ranks 49^th in the country and its carbon footprint ranks 50^th. .

Vermont brags about getting nearly 100% of its electricity and 33% of its energy from renewables, thus making any complaints about oil and gas companies appear ridiculous.

But now Vermont is complaining there is too much GHG (Greenhouse gases) being emitted over Vermont, causing temperature to go up and weather to become more severe. But the state plan is to use 90% renewables but not until 2050! If there is no rush to be carbon free, why is the state suing the oil and gas industry?

Assuming severe weather is connected to GHG emissions, although there is no factual basis , does Vermont itself have some culpability for producing GHGs apart from the oil and gas industry? And is the production of GHGs by the oil and gas industry so paltry as not to even register as an impact on Vermont, let alone the country.

Well let’s take a look.

Wood provides home heating for 20% of all households, the highest in the country. 12% of households use wood for all household energy needs. Burning wood produces lots of green-house gases, releasing the stored carbon in trees plus smoke and ash. And burned trees don’t produce oxygen. Role of the oil and gas business? Zero.

Now kerosene, propane and fuel oil heat 57% of Vermont homes, the highest of any state in the nation. Most of these homes were built a century ago when home heating oil was 12cents a gallon and no one had ever heard of GHGs. But Vermont even after a century, still has the 3rd highest use of fossil fuels for home heating in the United States.

Folks used fuel oil because it was cheap. The cost fell to 10 cents a gallon just before WWII and in 1980 was 30 cents a gallon. Today it is $2.56 a gallon. Is it the oil and gas company’s fault that homes built one hundred years ago have the same heating technology? And that most of the home heating oil is imported from Cancompanies.t from American companies?

The state legislature overcame the governor’s veto of a bill to phase out fuel oil, although the cost to many households will be prohibitive. But this fuel oil produces 36% of all the greenhouse gases in the state but the state would have to sue Canada—not a good idea as a lot of your hydropower comes from Canada! .Pices are in the top 10 ten most expensive states, and if Vermont allowed competition, estimates are the cost of electricity would drop by 50%.

State hydropower dams provide 43% of the electricity generated in state, and Hydro Quebe from Canada supplies 25%. Solar and  wind each provide 18% of electricity generated in the state and so the oil and gas business are not responsible for any emissions there. Nuclear power from New Hampshire provides the remaining electricity and so the oil and gas industry does not factor in there.

Overall, especially since 2015, the state has the lowest emissions of C02 of any state. So, their proposal to sue any of the five major oil and gas companies if they have produced in the state of Vermont between 1995-2024  1 billion tons of GHG is laughable. The EPA says the total GHG emissions for the state of Vermont are 14 million tons of which all 600,000 vehicles produce 2.8 million tons. Two-thirds are trucks, vans, tractors and other farm equipment, for which there are virtually zero alternatives. That is not the fault of the oil and gas industry.

Most GHGs are produced from liquid fueled vehicles and home heating oil.

The states 624,000 people have 229,000 autos out of 616,000 vehicles, but with 10,000 or 1.6% electric powered.

 But take the 14 million tons of GHGs produced in the entire state from all energy use and for the 29 years (1995-2024) comes to 406 million tons, compared to the 5.6 billion tons of GHGs generated in the United States each year. The evil gas and petroleum business in Vermont each year contributes 0.0026% of all the GHGs.

Now Vermont uses less energy than any other state and has the lowest per capita consumption of any state as well. Due to the gift of out of state and country surplus nuclear (NH) and hydropower, (Canada) nearly half of all electricity consumed by Vermont is totally divorced from the oil and gas industry.

But suing the industry into bankruptcy or forcing these energy sources out of the state would torpedo the states two biggest drivers of the economy. Take the industries of tourism and agriculture. Both are subsidized by the state and Uncle Sam which calls into question why the state is taking to court the industries that power the state’s economy in ways the state has long encouraged, long after the impact of greenhouse gas production was “discovered.”

Electricity powers the ski resorts and gasoline get the skiers to the slopes, generating $1.6 billion annually. And far from discouraging the use of cars, the State leases the Green Mountains to the ski resorts for a paltry $2.5 million annually, which of course helps the 25 alpine resorts make upwards of $300 million annually with record profits this year.

The state entreats folks to come and ski, as they often driving hundreds of miles each trip to visit the ski slopes. During a four-month ski season, the 25 major ski resorts each pay an average of $100,000 annually, or $25,000 a month or $833 a day or $34 an hour. With lift tickets at $200 a day, the 4.7 million skiers paid the lease payment in half a day of skiing. As Jackie Mason would say, “Such a deal!”

Not only has Vermont sued the companies that provide the power that runs the resorts, but the state has also officially joined California in proposing to ban the sale of all IC cars by 2035. Apparently, the state legislators think electric cars do well in cold weather.

What would be the benefit in reduced GHGs? Well, the average ski commute is two hours. Some folks drive 6-hours from other Eastern states to get to Vermont resorts. And with 4.7 million skiers in Vermont annually, driving 120 miles per visit, generates (with 2.5 folks per vehicle) 240 million miles of driving.

Driving the national average of 13,000 miles a year produces 4.6 million tons of GHGs per car. Thus driving 240 million miles is the equivalent of 18,000 cars producing 66 million tons of greenhouse gases.

For the non-skiing public, each Vermont vehicle produces 3.6 tons of GHGs a year at an average distance traveled of 10,000 a year. For Vermont’s 614,000 motor vehicles, driving an average of 10,000 miles a year, that’s  2.82 million tons a year of GHGs for the states vehicles. That is  0.0005% of the total 5.6 billion tons of GHG emissions for the United States and 1/600^th of the GHG emissions of the nation’s 275 million motor vehicles.

Not only are these gasoline powered vehicles contributing almost nothing to climate change or whatever effect fossil fuel use is meant to have caused, the flipside is that over 30 years from 1995-2024 the ski business in Vermont has generated $48 billion in income for the people of the State of Vermont. And without gasoline for the cars, there would be no $48 billion. So whatever damage GHG emissions have caused, that has to be balanced by the revenue generated for the state by the use of IC engines. As for using electric vehicles, they don’t work in cold weather so how many folks in New England and around the state are going to risk being stranded in 10 below zero weather without any heat?

By comparison, the USA produces 5.6-6 billion tons of GHGs per year. The world produces somewhere around 58 billion tons of GHGs per year. China at 15+ billion tons, India at 4+ billion tons, and all of Europe is at 6 billion tons

Even if Vermont somehow succeeds in ending all use of IC and gasoline powered vehicles in  the state, the state will lose $1.6 billion in annual skiing income, plus all the economic growth from all other use of IC vehicles where white color professional workers earn $18 billion in wages, the vast majority of which need a vehicle to get to work, in a $40 billion economy. Agan cold weather effects the entire state so who wants to buy a risky electric vehicle that conks out in cold weather? .

The partner to banning the fossil fuel industry is going after the meat industry. Many states are proposing that no meat nor dairy be sold by 2035. Now banning dairy and meat sales would not necessarily stop all cow flatulence and belching unless the 129,000 dairy cows were slaughtered. But even then, only 14000 tons of methane would be taken out of the atmosphere in Vermont.

Vermont also has 20% of all the sheep in the USA—roughly 1.1 million sheep, each producing half a ton of GHG emissions, or 474,000 tons of GHGs annually. That comes to 0.00008% of all US annual GHG production of 5.6 billion tons from all sources and 1/100^th of 1% of all global sheep emissions, and 20% of US sheep emissions. But the $8.3 billion generated annually from agriculture would disappear with no fossil fuels and with it the jobs of 50,000 Vermonters. And without Bessie giving milk the farmers lose the $6.9 million subsidies from the State and $89 million subsidies from Uncle Sam, courtesy for an industry that uses diesel and natural gas for fuel and fertilizer.

So, on balance what is Vermont getting? The greenhouse gas cuts will not be noticed as they are minuscule.

What could Vermont then try and get? The one area where they will certainly make the case for climate damages is the $850 million in damages caused by Hurricane Irene in 2011. Even if you assume Hurricane Irene that hit Vermont with $850 million in damages in August 2011 was caused by excessive GHG emissions.

Although the hurricane originated in the Atlantic and hit New York and New Jersey first, the storm then unexpectedly swirled into Vermont and caused massive damage, burying entire roads, bridges and even towns in mud, water and debris. So, Vermont picks up $850 million (again)  (maybe) and loses at least $10 billion in lost economic wealth, flushing one quarter of their economy down the toilet! Since 1995 there have been 11 severe weather events in Vermont, including drought, flooding, snow-storms, tornadoes and hurricanes, causing says NOAA a total of $1.4 billion in damages. Even if the state of Vermont sues the industry for reimbursement of all the damage from all 11 severe storms, the use of oil and gas in Vermont sold by these companies does not account for all such fuel use.

What Vermont may try to do is a clever trick. The climate change industry claims everything considered bad weather was caused by the bad oil and gas industry. (Coal is not in the Vermont mix as no coal is used in the state.)

But given no one company being sued meets the 1 billion tons of GHG emissions threshold in the state over the 29 years, what is the point of the lawsuit? It may be the one-billion-ton standard will apply to all GHG emissions in the United States which would amount to some 150 billion tons over the 30-year period. But still the severe storm costs are at $1.5 billion.

The climate hustle industry wants to find just one judge who will find one oil and gas industry didn’t warn the country of the harm greenhouse gas emissions were doing to the country and thus, like the tobacco industry, hid the facts from the American people. Not warned, the country innocently continued using fossil fuels to the points where severe weather is increasing the harm to the country.

But the IPCC did its own analysis decades ago and came up with the climate change thesis all on its own. They did not rely on the oil and gas industry then, and they do not rely on the industry today. Unlike the tests done by the tobacco industry that showed harm of cigarette smoking, no one in the oil and gas industry “discovered” and then hid the secret of climate change and GHGs--- because no such study exists.

Vermont’s aging population has a surfeit of trust fund babies that migrated decades ago  from failed eastern states such as New York and Connecticut and Massachusetts, states bedeviled with crime, sprawl, high taxes, poor schools and a bad environment.

They moved on up to a northern kingdom, bucolic in its wonderful natural beauty, but then made it the 8^th highest taxed state, 25^th in per capita income, and with the 2^nd worst rate of  homelessness in the country.(only New York is worse.)

Why then would the State legislature decide to hold up an industry that boosts the state’s economy big time? Well, its where the money is. Like the highwayman  robber in the wonderful film Tom Jones, holding up a well to do horse drawn coach outside of London, declared: “Stand and Deliver.”

Recommended Reading

___________

Peter Huessy is a Member of the Montgomery County Republican Central Committee. Since 1981 he has been President of Geo-Strategic Analysis of Potomac, Maryland. He was a former special assistant to the Secretary of the Interior and consultant to the US Air Force. He can be reached at [email protected]