“Planting Trees” Disrupts the Carbon Tax Narrative

A recent article in The Guardian trumpeted the findings of a new study published in Science that found massive tree planting would be—by far—the cheapest and most effective approach to mitigating climate change. Ironically, the new thinking shows the pitfalls of political approaches to combating so-called “negative externalities.” The good news about tree planting disrupts the familiar narrative about carbon taxes that even professional economists have been feeding the public for years. The whole episode is an example of what Ronald Coase warned about, in his classic 1960 article showing the danger in the traditional approach of using taxes to fix alleged market failures.

Ronald Coase vs. A. C. Pigou on “Externalities”

Coase’s “The Problem of Social Cost” is one of the most frequently cited economics articles of all time, but it can be difficult for a newcomer to absorb its lessons. In this revolutionary piece, Coase challenged the standard approach to externalities that had been developed by economist A. C. Pigou.

According to Pigou, the market economy works fine in allocating resources efficiently under most circumstances. However, when third parties experience benefits or harms because of particular market transactions, the Invisible Hand fails. For example, if a factory dumps waste into a river as a by-product of making TVs, then the factory owner is making “too many” TVs because the owner isn’t taking into account the harm his business is imposing on the people living downstream. The profit-and-loss system presumes that consumers and firms are receiving feedback from the impact of their actions, and so (Pigou argued) a case of pollution leads to inefficiency.

Pigou suggested that in a case like this, the government should impose a tax on the TV factory, corresponding to the harm that additional output causes to the people living downstream. The tax would then lead the owner of the factory to scale back production, to the point at which the “marginal” TV produced would bestow roughly equal benefits and costs to society, taking everything into account. (Without the Pigovian tax, the factory owner would produce additional TV sets for which their marginal cost to society exceeded their marginal benefit, meaning society would be worse off because of these additional units.)

For the purpose of this IER post, I’ll have to be brief, but here is the quick and dirty version of how Ronald Coase came along and completely upended this traditional Pigovian analysis: First, Coase told his readers to stop thinking of these situations in terms of the good guys and bad guys. In my hypothetical TV factory case—which is my example, not Coase’s—we shouldn’t view the factory owner as someone violating the downstream homeowners. Rather, Coase urged his readers to consider, what he called, the “reciprocal nature” of the problem.

Specifically, Coase would say in our example that the real problem is one of scarcity and competing uses for the river water. The factory owner would like to use the river as a place to dump his waste after producing TVs, while the homeowners would like to use the river for their kids to play in or to wash their clothes. The two uses are incompatible, and the issue is: To which party should the use of the river be allocated? Coase warns us that if the government installs a TV tax on the factory, the politicians are simply assuming that the most efficient solution to the conflict is for the factory to scale back TV production.

But we can imagine better outcomes, depending on the specifics. Suppose, for example, that there are only a few households who live downstream from the factory, and are harmed by its waste products. In this situation, rather than the owner greatly scaling back TV production—and depriving consumers around the country of having cheap TVs—maybe the least-cost solution is for the factory owner to buy the properties from the few families and pay them to move somewhere else. Note that we are talking about voluntary exchanges here; the people aren’t being evicted by the sheriff. Rather, just suppose for the sake of argument that for (say) $2 million, the factory owner could buy out the families living downstream, and everybody would be much happier than the outcome that would result under a TV tax.

Now that we’ve worked through this hypothetical example to illustrate the out-of-the-box thinking Coase developed in his 1960 paper, I’ll demonstrate its relevance to the new study about trees and climate change.

Tree Option Might Greatly Reduce the “Social Cost of Carbon”

As The Guardian piece explains, the new study is far more optimistic about the scale of tree planting available on Earth than had been earlier believed. This is why the scientists involved in the study think a massive campaign of planting trees is now the single best approach to mitigating climate change. Here are some key excerpts from The Guardian article:

Planting billions of trees across the world is by far the biggest and cheapest way to tackle the climate crisis, according to scientists, who have made the first calculation of how many more trees could be planted without encroaching on crop land or urban areas.

As trees grow, they absorb and store the carbon dioxide emissions that are driving global heating. New research estimates that a worldwide planting programme could remove two-thirds of all the emissions that have been pumped into the atmosphere by human activities, a figure the scientists describe as “mind-blowing”.

…

“This new quantitative evaluation shows [forest] restoration isn’t just one of our climate change solutions, it is overwhelmingly the top one,” said Prof Tom Crowther at the Swiss university ETH Zurich, who led the research. “What blows my mind is the scale. I thought restoration would be in the top 10, but it is overwhelmingly more powerful than all of the other climate change solutions proposed.”

 

Citing a figure that planting a new tree costs roughly 30 cents, Prof. Crowther remarked that we could plant the target of 1 trillion trees by spending about $300 billion. Sure, that’s a big number, but its nowhere close to the economic cost of imposing a worldwide carbon tax, the “solution” that many economists have been promoting for years as a no-brainer. (William Nordhaus’ model in its 2007 calibration estimated that even his modest carbon tax would cause several trillion dollars [in today’s dollars] in economic compliance costs, while the more aggressive proposals would cause more than $20 trillion in economic costs.)

This episode is a specific example of the type of problem Ronald Coase warned about. Specifically, the carbon tax logic assumed that the problem was, “People are emitting too much carbon dioxide and we need to coerce them into scaling back.” But what if instead the problem was, “People aren’t planting enough trees, and we need to coax them into planting more”?

To give some quick numbers: By some estimates, a single healthy tree can sequester up to a ton of carbon dioxide by the time it reaches 40 years old, and we also read that a silver maple tree will absorb 400 pounds of carbon dioxide by the time it reaches 25 years old.

So consider a coal-fired power plant that is going to emit a ton of carbon dioxide in order to produce some additional electricity. If the pro-tax economists had gotten their way, there would be a $42 tax levied on the power plant, since the Obama EPA estimated that that was the “social cost of carbon” for the year 2020.

Yet if there is room on Earth for more trees—given the plans of everybody else—that Obama-era estimate greatly overstates the harm of the emission. Rather than imposing $42 in damages as the EPA calculations suggested, the power plant owner could spend a mere $3 to plant 10 trees, meaning that over the next two decades the trees would have absorbed more than the additional emissions, and would in fact continue reducing CO₂ in the atmosphere for decades beyond.

As this simple example illustrates, a carbon tax of $42 would have been a gross overkill. It would have led power plants and other firms to scale back their emissions in very costly ways that stifled economic growth, when—apparently—there was a much cheaper solution available. And notice throughout all of this discussion, I am stipulating the basic externality framework for the sake of argument, and am merely showing the problems that Ronald Coase demonstrated with this one-size-fits-all way of thinking.

A Theater Analogy

Consider a movie theater. It’s a problem that people sometimes drop popcorn and other litter on the floor. Now there are two ways the theater could respond: (1) It could install cameras and personnel to monitor the customers and heavily fine anybody caught dropping stuff on the floor. This would be a huge inconvenience and make movie-going far less pleasant. Or (2) the theater could hire personnel to clean up the floor after a show. And notice that even if some combination were used—maybe the theater calls the police on somebody who just runs up and down the aisles dumping soda on the floor—there is no reason that the “fine” imposed on litterers should be used to pay the salary of the employees who pick up popcorn with a broom. Those are two totally different considerations.

When it comes to carbon taxes, the conventional logic has simply assumed that penalizing emissions is the appropriate solution to the ostensible problem of harmful climate change. But maybe that is totally wrong. Perhaps it would make far more sense to pay people to plant trees.

And while it’s true that some carbon tax proposals contain (mild) provisions for reforestation, there is no reason at all for those programs to be linked. In general, taxing carbon is a very inefficient way to raise government revenue. If tree planting is truly superior, then it would make more economic sense to use general tax funds for the subsidies. There is no reason at all to earmark carbon tax revenues for reforestation; this would be as silly as insisting that movie theaters only pay the clean-up employees out of their “litter tax” rather than the general revenues from ticket sales.

Conclusion

New developments in the scientific literature show that tree-planting might be the single best way to reduce the human contribution to carbon dioxide in the atmosphere. The whole episode shows the folly of top-down political solutions to social challenges. Even if we stipulate the standard framework of “market failure,” it does not follow that a carbon tax set to the “social cost of carbon” is the way to restore efficiency. The case for a carbon tax is much weaker than the so-called experts have been assuring us.

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Test

Bold:      Institue for energy research

Regular: Institute for energy research

 

Superscript: 107^th

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Milton Friedman’s Energy Insights

Today we celebrate the 107^th anniversary of the birth of economist Milton Friedman (1912–2006). Primarily known for his work on monetary economics, Friedman was a keen observer of energy economics and public policy whose insight remains valid today.

Early on, Friedman understood how major energy regulation was sponsored by an industry segment. “Few U.S. industries sing the praises of free enterprise more loudly than the oil industry,” he stated in 1967. “Yet few industries rely so heavily on special government favors.”

Friedman was referring to oil-demand proration in the major oil states (excepting California), as well as federal oil-import limits, two complementary programs that governed from the 1930s through the 1960s. It was this political bias that contributed to the backlash against oil and natural gas in the 1970s that still haunts the industry today.

The Troubled 1970s

Friedman’s harsh reaction to President Richard Nixon’s price freeze of August 1971 is particularly important for the energy debate. It was Nixon’s surprise intervention, not the Arab oil embargo, which created the oil shortages and a decade of spiraling interventionism.

“I regret exceedingly that he decided to impose a ninety-day freeze on prices and wages,” Friedman wrote at the time. “That is one of those ‘very plausible schemes … with very pleasing commencements, [that] have often shameful and lamentable conclusions.’”

Indeed, what began as a temporary program was extended several times and codified in legislation for the oil industry in 1973. The result was predictable. In Free to Choose (1979: p. 14), Milton and Rose Friedman explained how the dreaded gasoline lines were not the result of foreign manipulation but domestic regulation:

The long gasoline lines that suddenly emerged in 1974 after the OPEC oil embargo … and again in the spring and summer of 1979 after the revolution in Iran, [came after] a sharp disturbance in the supply of crude oil from abroad. But that did not lead to gasoline lines in Germany or Japan, which are wholly dependent on imported oil. It led to long gasoline lines in the United States, … for one reason and one reason only: because legislation, administered by a government agency, did not permit the price system to function.

The solution was simple (p. 219):

There is one simple way to end the energy crisis and gasoline shortages tomorrow—and we mean tomorrow and not six months from now, nor six years from now. Eliminate all controls on the prices of crude oil and other petroleum products.

That “tomorrow” came in 1981 to end the energy crisis. Better yet, the negative effects of oil price and allocation controls were so pronounced that neither political party has advocated such intervention ever since.

Fallacy of Mineral Depletion

Friedman explained how a surplus of regulation caused a shortage of oil and gas. He did not buy the running-out-of-resources argument, elegantly dressed as Harold Hotelling’s fixity/depletion model, as did so many economists–even those at the hitherto resource-optimistic Resources for the Future.

In his 1978 essay, “The Energy Crisis: A Humane Solution,” Friedman wrote that oil, gas, and coal are “producible … at more or less constant or indeed declining cost because of the improvements in the technology of drilling and exploring and so on.” This affirmed Julian Simon’s concept of the “ultimate resource,” human ingenuity. (Friedman, in fact, felt that Simon’s empirical work on human improvement should have won a Nobel Prize in economics.)

Friedman also rejected the notion that minerals were so different as to create an “energy” or “natural resources” economics. “I do not believe there is a natural resource economics, he wrote to this author. “I believe there is good economics and bad economics.”

Global Warming

Near the end of his long career, Friedman weighed in on the global warming debate with a blurb for Thomas Gale Moore’s book for the Cato Institute, Climate of Fear: Why We Shouldn’t Worry About Global Warming (1999). Friedman opined:

This encyclopedic and even-handed survey of the evidence of global warming is a welcome corrective to the raging hysteria about the alleged dangers of global warming. Moore demonstrates conclusively that global warming is more likely to benefit than to harm the general public.

Global greening from the CO₂ fertilization effect is settled science, quite unlike high climate-sensitivity estimates generated by climate models that speculate about real-world feedback effects. Modest warming (global lukewarming), in fact, is positive in economic terms.

“Infant” Industries

Protectionism has long been a rallying cry for government intervention to advantage certain firms and industries over competitors—all at the expense of consumers. “The infant industry argument is a smokescreen,” noted the Friedmans in Free to Choose (pp. 5–6). “The so-called infants never grow up.”

Think about wind power in reference to the federal Renewable Energy Production Tax Credit (PTC), first established in 1992. Now 27 years old, the PTC has been extended 11 times: 1999, 2002, 2004, 2005, 2006, 2008, 2009, 2013, 2014, 2015, and 2018. (The wind industry today is lobbying for a 12th extension.) What Friedman called “the tyranny of the status quo” also applies to the ethanol mandate, which was enacted in 2005 and stubbornly remains although its original rationale, reducing oil imports, is no longer of pressing concern.

Conclusion

Today, cronyism marks the nuclear, wind, solar, ethanol, electric vehicle, and carbon-capture industries. Climate policies such as a carbon tax ignore the benefits side of the cost/benefit equation. Thankfully, however, price controls and depletionist thinking have all but disappeared, confirming Milton Friedman’s wisdom from many decades ago.

Milton Friedman’s timeless energy insights should be appreciated today—and not forgotten.

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SEI Team Member, Bertram Peterson helped solar power a refugee camp in Greece

Bertram Peterson, SEI Spanish Program Curriculum Translator and Developer, recently participated on an installation of 24 kw interconnected PV systems in a refugee camp in Lesbos, Greece.

“In order to improve the living conditions in the camp, I joined a team from TU Delft and helped found Energy for Refugees, an NGO that aims to provide energy to those who need it most. With a couple of grants from the university and a crowdfunding campaign, we were able to fund and install a 24 kW, interconnected PV system in the camp. This system is expected to save approximately 10,000 €/year in energy and/or diesel costs and alleviate a portion of the stress on the local grid, thus helping avoid blackouts, at the same time that students from TU Delft learned the hands-on side of solar and project management”, Bertram shared.

The island of Lesbos in Greece serves as the main entry point for refugees coming from the Middle East and Africa into Europe. When the refugee crisis escalated in 2015, the European and Greek governments reshaped a military base in Lesbos into Moria Camp to house incoming refugees while they await for asylum within the European Union. Due to the large inflow of asylum seekers coming to Lesbos through Turkey, Moria has almost always been overpopulated and is prone to blackouts and power shortages, particularly during the winter, when sections of the camp and surrounding areas are forced to shut down at scheduled intervals to avoid a full blackout.

 

While the main camp is connected to the local grid, several subsections of it are only connected to diesel generators, which are costly, inefficient and very polluting. At the same time, electricity in Lesbos is mostly generated with heavy fuel oil, which is also very costly and polluting.

Thank you Bertram for sharing this story, it warms our hearts to know that SEI mission to empower people, communities and bussiness becomes a reality trough these efforts.

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First cohort of 13 women graduated using SEI’s curriculum in Puerto Rico Model Forest

On Saturday July 13th, Bosque Modelo graduated its first cohort of 13 women from 9 municipalities in the western highlands of Puerto Rico. The graduating women participated in (15) 6-hour weekly training sessions using Solar Energy International’s (FV101) Solar Electric Design and Installation (Grid-Direct) and (FV203) PV System Fundamentals (Battery-Based) spanish curriculum. In addition, the women participated in 6 supervised, practice community installations in residential and community settings within the region.

Bosque Modelo (Model Forest) is a broad concept of forest, which integrates environment, economy and society. It is a forest with people that break with the traditional concept of conservation to promote a new concept of conservation through sustainable economic development that values ​​natural attributes and empowers the citizens of the area.

This week, one of the participating women started a solar installation apprenticeship with Solar Libre in Isabela. Next week, 3 of them have work interviews with Cooperativa Hidroeléctrica de la Montaña’s Solar Program. Five of them expressed interest in continuing their education in Electricity and 8 of them have requested further technical assistance in economic development in order to integrate their newly developed skills into small business economic projects in agriculture, education, sales/distribution and ecotourism.

Alana Feldman Soler, Program Manager from Mesa Multisectorial of Bosque Modelo from Puerto Rico said:

“As our graduates now enter different areas of the local solar workforce, we will formally continue to assist them in their efforts during the next 6 months. We hope to count on your support as we move forward! Please do not hesitate to contact us to further speak about ways in which we can continue to work together to strengthen Puerto Rico’s energetic sustainability, economic development and resilience”

We welcome these wonderful women into the solar tribe and hope to continue to work together toward a world powered by renewable energy!

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Fluke supports Solar Energy International (SEI) as industry sponsor through equipment donation

Fluke’s generous donation will be featured in SEI’s industry-leading lab training facility in Paonia, Colorado

PAONIA, CO. –Solar Energy International (SEI) is excited to announce its collaboration with Fluke as a megawatt-level industry sponsor through SEI’s Industry Sponsorship Program. Fluke achieved megawatt sponsor status through a donation of professional electronic test tools and softwareto be featured in SEI’s industry-leading lab training facility in Paonia, Colorado.

SEI is a nonprofit training organization which offers cutting-edge solar and renewable energy training to the solar industry leadership and workforce. With over 70,000 alumni worldwide, nearly 30 years of experience, and over 100-course sessions offered each year, SEI is a leader in solar training throughout the field.

Fluke’s sponsorship of the SEI program is expected to increase brand visibility and product recognition among current and future customers through SEI’s broad alumni network. With thousands of students from around the world traveling to SEI’s industry-leading lab every year, these students will get hands-on experience with Fluke equipment, experience that will be the foundation of their future solar industry careers.

Since 1948, Fluke Corporation has been the world leader in compact, professional electronic test tools and software for measuring and condition monitoring. Fluke helped define a unique technology market, providing testing and troubleshooting capabilities that have grown to mission critical status in manufacturing and service industries. The company’s tools — which include electrical test tools, thermal imagers, IR thermometers, advanced power quality analyzers, condition monitoring solutions, software, and accessories — are known for their portability, ruggedness, safety, ease of use, and rigid standards of quality. From industrial electronic installation, maintenance and service, to precision measurement and quality control, Fluke tools help keep business and industry around the globe up and running.

“Fluke is proud to support SEI through this equipment donation,” said Sal Palatore, vice president and general manager, Fluke Industrial Group. “At Fluke, we believe in the importance of a well-trained solar energy workforce that holds safety to its highest standard, which is why we are supporting SEI’s educational mission through this donation.”

“SEI is so thankful for the equipment donation from Fluke,” said Christopher Turek, SEI director of marketing and communications. “Fluke products that ensure safety and accurate measurement have been an integral part of SEI training curriculum for years, and SEI is proud to align itself with the high-quality standards of Fluke equipment. As SEI alumni continue working in the solar industry, we hope they will bring along the lessons learned from training on Fluke equipment with them.”

Industry Sponsors are empowering SEI to make an impact on creating a skilled, safe renewable energy workforce. To join us contact SEI’s development director, Marla Korpar, at marla@solarenergy.org.

For more information about Fluke test and measurement solutions, visit www.fluke.com. To learn more about SEI visit www.solarenergy.org.

About Solar Energy International(SEI) – SEI was founded in 1991 as a nonprofit educational organization with the mission to provide industry-leading technical training and expertise in renewable energy to empower people, communities and businesses worldwide. SEI envisions a world powered by renewable energy.

About Fluke

Founded in 1948, Fluke Corporation is the world leader in compact, professional electronic test tools and software for measuring and condition monitoring. Fluke customers are technicians, engineers, electricians, maintenance managers, and metrologists who install, troubleshoot, and maintain industrial, electrical, and electronic equipment and calibration processes.

###

Media contact:

Karin Koonings, Global Head of Brand, Content, CX, PR

Fluke Corporation

PO Box 9090

Everett, WA 98206-9090

karin.koonings@fluke.com| 425-446-4893

 

Christopher Turek, Director of Marketing & Communications

Solar Energy International

39845 Mathews Lane

Paonia, CO 81428

Chris@solarenergy.org| 970-527-7657 x115

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Alumni Highlight: Josh Rogers, from SEI student to Director of Solar Operations for Duke Energy Renewables

At Solar Energy International (SEI) we love to share exciting news about what our alumni are up to as they move forward in their careers out in the field. Alumni Josh Rogers is the Director of Solar Operations for Duke Energy Renewables in Charlotte, North Carolina. 

According to Josh, he first learned about SEI a couple months after an honorable discharge from the U.S. Navy and started a position for Power-One, where he was developing training for their solar inverter business.

He then enrolled in SEI’s PV101: Solar Training – Solar Electric Design and Installation (Grid-Direct). PV101 covers various components, system architectures, and applications for PV systems. Additionally, it features lessons related to site analysis, system sizing, array configuration, electrical design characteristics such as wiring, a detailed look at module and inverter specifications and characteristics; mounting methods for various roof structures and ground-mounts, an introduction to safely and effectively commissioning grid-direct PV systems, and much more. 

“At first I was very skeptical and not quite sure about the course since when I got there it was a very diverse class of backgrounds and abilities,” Josh explained. “Once the class started the instructors were incredibly experienced and knowledgeable. The course work, materials, and interactions in the class really set my foundation in the design and operation of solar PV.”  

Josh attributes the successful launch of his career in part to the knowledge and experience gained in SEI classes.  “SEI played a huge role in launching my career by teaching me the fundamentals, industry lingo, and NEC information,” Josh said. “With some residential installation experience, and the support of several experienced colleagues, within months of entering the industry I was able to start teaching about inverter installations online and at distributors, installer warehouses, conferences and trade shows. I was able to apply the basics and fundamentals of the SEI course to not only residential solar but commercial and utility scale applications as well.”

Josh expressed his gratitude for the opportunities available in the fast-growing solar industry. “In my short career in the solar energy field, I have had the opportunity to interact with many parts of several businesses, and I am extremely fortunate and grateful for all my contacts and experiences.”

Looking to the future, Josh plans on continuing on his solar industry career path. “I truly believe in the need for clean, distributed energy and I want to ensure the teams operating these assets can do it safely and effectively as the industry continues to grow. Overall seeing solar makes financial sense for individuals, corporations, and utilities alike encouraging more and more investment in the energy of the future.”

Learn more about how to launch your career in the solar industry with SEI’s PV101 course either in-person or online. Check out our full training schedule: https://www.solarenergy.org/training-schedule/ 

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#30: Robert L. Bradley, Jr. on energy policy from the 70s to today

IER founder and CEO Robert L. Bradley, Jr. joins the show for a wide-ranging discussion on the history of American energy policy from the 1970s and the 73′ Oil Crisis to today and the Green New Deal.

Links:

• MasterResource.org, a free-market energy blog curated by Bradley.

• PoliticalCapitalism.org, a website providing additional resources related to Bradley’s books.

• Robert Bradley’s latest commentary at the Institute for Energy Research.

• Edison to Enron: Energy Markets and Political Strategies.

• Capitalism at Work: Business, Government and Energy (Political Capitalism).

• Enron Ascending: The Forgotten Years, 1984-1996 (Political Capitalism: a Tetralogy).

 

 

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Plastic Bans Are Symbolism Over Substance

Canadian Prime Minister Trudeau recently proposed a federal ban on certain single-use plastics, arguing, “We have a responsibility to work with our partners to reduce plastic pollution, protect the environment, and create jobs and grow our economy.” As with similar measures in California, Hawaii, and New York, the proposed Canadian ban on plastics will harm consumers while providing very little benefit, even on Trudeau’s own terms.

The biggest problem for the plastic banners is that their measures (so far) apply to jurisdictions that have little to do with the ostensible problem. The biggest contributors to plastic in the ocean are China and Indonesia; a 2015 article in Science concluded that OECD countries contribute less than 5 percent of the plastic waste from land sources.

Another problem is that government bans come with unintended consequences. For example, research from earlier this year studied California’s ban on plastic bags and reported that “the elimination of 40 million pounds of plastic carryout bags [was] offset by a 12 million pound increase in trash bag purchases.” Because pet owners (for example) had been using their plastic bags from the grocery store to pick up after their animals, the ban simply forced them to buy plastic bags the old-fashioned way. Ironically, the California legislation led these people to stop recycling and reusing!

These naïve “direct assaults” on one environmental concern can also impede progress on other fronts. For example, if a store switches back to paper bags then this will mean more carbon dioxide emissions. Indeed, a 2011 UK government study found a consumer would need to use an allegedly “environmentally responsible” cotton tote bag 131 times in order for it to cause less environmental damage than the plastic bags it would replace.

Prime Minister Trudeau’s homage to “job creation” is also nonsensical. The rationale of work is that it makes people better off in exchange for our toil. If jobs are being “created” merely to comply with a largely arbitrary government edict, then they are pointless “busy work” of the type assigned in grade school by bored teachers. In a relatively free-market economy with flexible wages, everybody who wants a productive job can get one, especially in the long run. Government bans on plastic, or limitations on greenhouse gas emissions, induce artificial scarcity and “create jobs” in the same way that a ban on power tools would “create work”—and make humanity much poorer in the process.

Now if the benefits from plastic bans are largely illusory, the costs are quite real. For example, restricting single-use plastics such as forks and knives will increase the spread of disease, as people begin reusing metalware for their office lunches etc., rather than throwing out their plastic utensils after each meal. Likewise, if shoppers continue to use the same tote bag for their groceries, eventually they could be transporting their food in rich bacteria colonies, rather than the much more sanitary single-use plastic bags that are promptly discarded.

Yet besides these utilitarian concerns, there is the basic fact that plastic bags are very convenient, and so banning their use will make consumers worse off. After all, there is a reason grocery stores switched away from using paper bags and made plastic bags so ubiquitous. For those with long memories, we can appreciate the extra irony: The stores now switching back to paper bags are using thinner versions than when we were younger. While a strong adult with plastic bags could have carried an entire grocery run into the house in one trip, now with the weak paper bags, several trips are required—and that gallon of milk might rip the bag, so watch out.

The Canadian proposal to ban single-use plastics is yet another triumph of symbolism over substance: The measure will do virtually nothing to reduce plastic waste in the ocean and it won’t “help the economy.” However, what it will do, if enacted, is increase greenhouse gas emissions, increase the spread of disease, and greatly inconvenience consumers.

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The Ultimate Guide to SEO Meta Tags

Posted by katemorris

Editor's note: This post first appeared in April of 2017, but because SEO (and Google) changes so quickly, we figured it was time for a refresh!

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Meta tags represent the beginning of most SEO training, for better or for worse. I contemplated exactly how to introduce this topic because we always hear about the bad side of meta tags — namely, the keywords meta tag. One of the first things dissected in any site review is the misuse of meta tags, mainly because they're at the top of every page in the header and are therefore the first thing seen. But we don't want to get too negative; meta tags are some of the best tools in a search marketer's repertoire.

There are meta tags beyond just description and keywords, though those two are picked on the most. I've broken down the most-used (in my experience) by the good, the bad, and the indifferent. You'll notice that the list gets longer as we get to the bad ones. I didn't get to cover all of the meta tags possible to add, but there's a comprehensive meta tag resource you should check out if you're interested in everything that's out there.

It's important to note that in 2019, you meta tags still matter, but not all of them can help you. It's my experience, and I think anyone in SEO would agree, that if you want to rank high in search, your meta tags need to accompany high-quality content that focuses on user satisfaction.

My main piece of advice: stick to the core minimum. Don't add meta tags you don't need — they just take up code space. The less code you have, the better. Think of your page code as a set of step-by-step directions to get somewhere, but for a browser. Extraneous meta tags are the annoying "Go straight for 200 feet" line items in driving directions that simply tell you to stay on the same road you're already on!

The good meta tags

These are the meta tags that should be on every page, no matter what. Notice that this is a small list; these are the only ones that are required, so if you can work with just these, please do.

• Meta content type – This tag is necessary to declare your character set for the page and should be present on every page. Leaving this out could impact how your page renders in the browser. A few options are listed below, but your web designer should know what's best for your site.

<meta http-equiv="Content-Type" content="text/html; charset=utf-8" />

<meta http-equiv="Content-Type" content="text/html; charset=ISO-8859-1">

• Title – While the title tag doesn’t start with "meta," it is in the header and contains information that's very important to SEO. You should always have a unique title tag on every page that describes the page. Check out this post for more information on title tags.
• Meta description – The infamous meta description tag is used for one major purpose: to describe the page to searchers as they read through the SERPs. This tag doesn't influence ranking, but it's very important regardless. It's the ad copy that will determine if users click on your result. Keep it within 160 characters, and write it to catch the user's attention. Sell the page — get them to click on the result. Here's a great article on meta descriptions that goes into more detail.
• Viewport – In this mobile world, you should be specifying the viewport. If you don’t, you run the risk of having a poor mobile experience — the Google PageSpeed Insights Tool will tell you more about it. The standard tag is:

<meta name=viewport content="width=device-width, initial-scale=1">

The indifferent meta tags

Different sites will need to use these in specific circumstances, but if you can go without, please do.

• Social meta tags – I'm leaving these out. OpenGraph and Twitter data are important to sharing but are not required per se.
• Robots – One huge misconception is that you have to have a robots meta tag. Let's make this clear: In terms of indexing and link following, if you don't specify a meta robots tag, they read that as index,follow. It's only if you want to change one of those two commands that you need to add meta robots. Therefore, if you want to noindex but follow the links on the page, you would add the following tag with only the noindex, as the follow is implied. Only change what you want to be different from the norm.

<meta name="robots" content="noindex" />

• Specific bots (Googlebot) – These tags are used to give a specific bot instructions like noodp (forcing them not to use your DMOZ listing information, RIP) and noydir (same, but instead the Yahoo Directory listing information). Generally, the search engines are really good at this kind of thing on their own, but if you think you need it, feel free. There have been some cases I've seen where it's necessary, but if you must, consider using the overall robots tag listed above.
• Language – The only reason to use this tag is if you're moving internationally and need to declare the main language used on the page. Check out this meta languages resource for a full list of languages you can declare.
• Geo – The last I heard, these meta tags are supported by Bing but not Google (you can target to country inside Search Console). There are three kinds: placename, position (latitude and longitude), and region.

<META NAME="geo.position" CONTENT="latitude; longitude">
<META NAME="geo.placename" CONTENT="Place Name">
<META NAME="geo.region" CONTENT="Country Subdivision Code">

• Keywords – Yes, I put this on the "indifferent" list. While no good SEO is going to recommend spending any time on this tag, there's some very small possibility it could help you somewhere. Please leave it out if you're building a site, but if it's automated, there's no reason to remove it.
• Refresh – This is the poor man's redirect and should not be used, if at all possible. You should always use a server-side 301 redirect. I know that sometimes things need to happen now, but Google is NOT a fan.
• Site verification – Your site is verified with Google and Bing, right? Who has the verification meta tags on their homepage? These are sometimes necessary because you can't get the other forms of site verification loaded, but if at all possible try to verify another way. Google allows you to verify by DNS, external file, or by linking your Google Analytics account. Bing still only allows by XML file or meta tag, so go with the file if you can.

The bad meta tags

Nothing bad will happen to your site if you use these — let me just make that clear. They're a waste of space though; even Google says so (and that was 12 years ago now!). If you're ready and willing, it might be time for some spring cleaning of your <head> area.

• Author/web author – This tag is used to name the author of the page. It's just not necessary on the page.
• Revisit after – This meta tag is a command to the robots to return to a page after a specific period of time. It's not followed by any major search engine.
• Rating – This tag is used to denote the maturity rating of content. I wrote a post about how to tag a page with adult images using a very confusing system that has since been updated (see the post's comments). It seems as if the best way to note bad images is to place them on a separate directory from other images on your site and alert Google.
• Expiration/date – "Expiration" is used to note when the page expires, and "date" is the date the page was made. Are any of your pages going to expire? Just remove them if they are (but please don't keep updating content, even contests — make it an annual contest instead!). And for "date," make an XML sitemap and keep it up to date. It's much more useful.
• Copyright – That Google article debates this with me a bit, but look at the footer of your site. I would guess it says "Copyright 20xx" in some form. Why say it twice?
• Abstract – This tag is sometimes used to place an abstract of the content and used mainly by educational pursuits.
• Distribution – The "distribution" value is supposedly used to control who can access the document, typically set to "global." It's inherently implied that if the page is open (not password-protected, like on an intranet) that it's meant for the world. Go with it, and leave the tag off the page.
• Generator – This is used to note what program created the page. Like "author," it's useless.
• Cache-control – This tag is set in hopes of controlling when and how often a page is cached in the browser. It's best to do this in the HTTP header.
• Resource type – This is used to name the type of resource the page is, like "document." Save yourself time, as the DTD declaration does it for you.

There are so many meta tags out there, I’d love to hear about any you think need to be added or even removed! Shout out in the comments with suggestions or questions.

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Aren't 301s, 302s, and Canonicals All Basically the Same? - Best of Whiteboard Friday

MozCon 2019: Everything You Need to Know About Day Three

Posted by KameronJenkins

If the last day of MozCon felt like it went too fast or if you forgot everything that happened today (we wouldn't judge — there were so many insights), don't fret. We captured all of day three's takeaways so you could relive the magic of day three. 

Don't forget to check out all the photos with Roger from the photobooth! They're available here in the MozCon Facebook group. Plus: You asked and we delivered: the 2019 MozCon speaker walk-on playlist is now live and available here for your streaming pleasure. 

Cindy Krum— Fraggles, Mobile-First Indexing, & the SERP of the Future 

If you were hit with an instant wave of nostalgia after hearing Cindy's walk out music, then you are in good company and you probably were not disappointed in the slightest by Cindy’s talk on Fraggles.

First learning of the day: Fraggles. Fragment + Handles. A piece of information and an anchor that scrolls directly to the information on the page @Suzzicks #MozCon

— Warrior Forum (@warriorforum) July 17, 2019

• “Fraggles” are fragments + handles. A fragment is a piece of info on a page. A handle is something like a bookmark, jump link, or named anchor — they help people navigate through long pages to get what they’re looking for faster.
• Ranking pages is an inefficient way to answer questions. One page can answer innumerable questions, so Google’s now can pull a single answer from multiple parts of your page, skipping sections they don’t think are as useful for a particular answer.
• The implications for voice are huge! It means you don’t have to listen to your voice device spout off a page’s worth of text before your question is answered.
• Google wants to index more than just websites. They want to organize the world’s information, not websites. Fraggles are a demonstration of that.

Luke Carthy — Killer Ecommerce CRO and UX Wins Using A SEO Crawler 

Luke Carthy did warn us in his talk description that we should all flex our notetaking muscles for all the takeaways we would furiously jot down — and he wasn’t wrong.

“Traffic doesn’t always mean sales, and sales doesn’t always mean traffic.” @MrLukeCarthy #MozCon

— Melina Beeston (@mkbeesto) July 17, 2019

• Traffic doesn’t always mean sales and sales don’t always mean traffic!
• Custom extraction is a great tool for finding missed CRO opportunities. For example, Luke found huge opportunity on Best Buy’s website — thousands of people’s site searches were leading them to an unoptimized “no results found” page.
• You can also use custom extraction to find what product recommendations you or your customers are using at scale! Did you know that 35% of what customers buy on Amazon and 75 percent of what people watch on Netflix are the results of these recommendations?
• For example, are you showing near-exact products or are you showing complementary products? (hint: try the latter and you’ll likely increase your sales!)
• Custom extraction from Screaming Frog allows you to scrape any data from the HTML of the web pages while crawling them.

Andy Crestodina — Content, Rankings, and Lead Generation: A Breakdown of the 1% Content Strategy 

Next up, Andy of Orbit Media took the stage with a comprehensive breakdown of the most effective tactics for turning content into a high-powered content strategy. He also brought the fire with this sound advice that we can apply in both our work life and personal life.

If you write an amazing, high-traffic blog post, the people visiting it don't have commercial intent. People landing on a sales page have 50x higher intent. #mozcon @crestodina

— Mike Arnesen (@Mike_Arnesen) July 17, 2019

• Blog visitors often don’t have commercial intent. One of the greatest ways to leverage blog posts for leads is by using the equity we generate from links to our helpful posts and passing that onto our product and service pages.
• If you want links and shares, invest in original research! Not sure what to research? Look for unanswered questions or unproven statements in your industry and provide the data.
• Original research may take longer than a standard post, but it’s much more effective! When you think about it this way, do you really have time to put out more, mediocre posts?
• Give what you want to get. Want links? Link to people. Want comments? Comment on others people's work.
• To optimize content for social engagement, it should feature real people, their faces, and their quotes.
• Collaborating with other content creators on your content not only gives it built-in amplification, but it also leads to great connections and is just generally more fun.

Rob Ousbey — Running Your Own SEO Tests: Why It Matters & How to Do It Right 

Google’s algorithms have changed a heck of a lot in recent years — what’s an SEO to do? Follow Rob’s advice — both fashion and SEO — who says that the answer lies in testing.

in head terms, it's about user engagement metrics. However, links are more correllated with long tail searches. @RobOusbey #Mozcon

— Matthew Decuir (@MattBasically) July 17, 2019

• “This is the way we’ve always done it” isn’t sufficient justification for SEO tactics in today’s search landscape.
• In the earlier days of the algorithm, it was much easier to demote spam than it was to promote what’s truly good.
• Rob and his team had a theory that Google was beginning to rely more heavily on user experience and satisfaction than some of the more traditional ranking factors like links.
• Through SEO A/B testing, they found that:
  • Google relies less heavily on link signals when it comes to the top half of the results on page 1.
  • Google relies more heavily on user experience for head terms (terms with high search volume), likely because they have more user data to draw from.
• In the process of A/B testing, they also found that the same test often produces different results on different sites. The best way to succeed in today’s SEO landscape is to cultivate a culture of testing!

Greg Gifford — Dark Helmet's Guide to Local Domination with Google Posts and Q&A 

If you’re a movie buff, you probably really appreciated Greg’s talk — he schooled us all in move references and brought the fire with his insights on Google Posts and Q&A  

Google Posts allows you to drive conversions without driving people to your site - convert on zero-click searches! @GregGifford #MozCon

— Ruth Burr Reedy (@ruthburr) July 17, 2019

The man behind #shoesofmozcon taught us that Google is the new home page for local businesses, so we should be leveraging the tools Google has given us to make our Google My Business profiles great. For example…

Google Posts

• Images should be 1200x900 on google posts
• Images are cropped slightly higher than the center and it’s not consistent every time
• The image size of the thumbnail is different on desktop than it is on mobile
• Use Greg’s free tool at bit.ly/posts-image-guide to make sizing your Google Post images easier
• You can also upload videos. The file size limit is 100mb and/or 30 seconds
• Add a call-to-action button to make your Posts worth it! Just know that the button often means you get less real estate for text in your Posts
• Don’t share social fluff. Attract with an offer that makes you stand out
• Make sure you use UTM tracking so you can understand how your Posts are performing in Google Analytics. Otherwise, it’ll be attributed as direct traffic.

Google Q&A

• Anyone can ask and answer questions — why not the business owner! Control the conversation and treat this feature like it's your new FAQ page.
• This feature works on an upvote system. The answer with the most upvotes will show first.
• Don’t include a URL or phone number in these because it’ll get filtered out.
• A lot of these questions are potential customers! Out of 640 car dealerships’ Q&As Greg evaluated, 40 percent were leads! Of that 40 percent, only 2 questions were answered by the dealership.

 Emily Triplett Lentz — How to Audit for Inclusive Content 

Emily of Help Scout walked dropped major knowledge on the importance of spotting and eliminating biases that frequently find their way into online copy. She also hung out backstage after her talk to cheer on her fellow speakers. #GOAT. #notallheroeswearcapes.

"My desire for a specific word choice doesn't negate someone else's need for safety" -- @emilytlentz #MozCon pic.twitter.com/sXF2CjXVzo

— Yosef Silver (@ysilver) July 17, 2019

• As content creators, we’d all do well to keep ableism in mind: discrimination in favor of able-bodied people. However, we’re often guilty of this without even knowing it.
• One example of ableism that often makes its way into our copy is comparing dire or subideal situations with the physical state of another human (ex: “crippling”).
• While we should work on making our casual conversation more inclusive too, this is particularly important for brands.
• Create a list of ableist words, crawl your site for them, and then replace them. However, you’ll likely find that there is no one-size-fits-all replacement for these words. We often use words like “crazy” as filler words. By removing or replacing with a more appropriate word, we make our content better and more descriptive in the process.
• At the end of the day, brands should remember that their desire for freedom of word choice isn’t more important than people’s right not to feel excluded and hurt. When there’s really no downside to more inclusive content, why wouldn’t we do it?

Visit http://content.helpscout.net/mozcon-2019 to learn how to audit your site for inclusive content!

Joelle Irvine — Image & Visual Search Optimization Opportunities 

Curious about image optimization and visual search? Joelle has the goods for you — and was blowing people's minds with her tips for visual optimization and how to leverage Google Lens, Pinterest, and AR for visual search.

“Visual search is easier when you don’t know what you’re looking for, when you’re looking to match a particular style, and when your search way is too long or complicated.” @joelleirvine #MozCon

— Melina Beeston (@mkbeesto) July 17, 2019

• Visual search is not the same thing as searching for images. We’re talking about the process of using an image to search for other content.
• Visual search like Google Lens makes it easier to search when you don’t know what you’re looking for.
• Pinterest has made a lot of progress in this area. They have a hybrid search that allows you to find complimentary items to the one you searched. It’s like finding a rug that matches a chair you like rather than finding more of the same type of chair.
• 62 percent of millennials surveyed said they would like to be able to search by visual, so while this is mostly being used by clothing retailers and home decor right now, visual search is only going to get better, so think about the ways you can leverage it for your brand!

Joy Hawkins — Factors that Affect the Local Algorithm that Don't Impact Organic 

Proximity varies greatly when comparing local and organic results — just ask Joy of Sterling Sky, who gets real about fake listings while walking through the findings of a recent study.

Local results not only vary by city, but even within the same zip codes, there can be drastically different local results. @JoyanneHawkins #mozcon pic.twitter.com/8g6acxUDAq

— Lily Ray (@lilyraynyc) July 17, 2019

Here are the seven areas in which the local algorithm diverges from the organic algorithm:

• Proximity (AKA: how close is the biz to the searcher?)
  • Proximity is the #1 local ranking factor, but the #27 ranking factor on organic.
  • Studies show that having a business that’s close in proximity to the searcher is more beneficial for ranking in the local pack than in traditional organic results.
• Rank tracking
  • Because there is so much variance by latitude/longitude, as well as hourly variances, Joy recommends not sending your local business clients ranking reports.
  • Use rank tracking internally, but send clients the leads/sales. This causes less confusion and gets them focused on the main goal.
  • Visit bit.ly/mozcon3 for insights on how to track leads from GMB
• GMB landing pages (AKA: the website URL you link to from your GMB account)
  • Joy tested linking to the home page (which had more authority/prominence) vs. linking to the local landing page (which had more relevance) and found that traffic went way up when linking to the home page.
  • Before you go switching all your GMB links though, test this for yourself!
• Reviews
  • Joy wanted to know how much reviews actually impacted ranking, and what it was exactly about reviews that would help or hurt.
  • She decided to see what would happen to rankings when reviews were removed. This happened to a business who was review gating (a violation of Google’s guidelines) but Joy found that reviews flagged for violations aren’t actually removed, they’re hidden, explaining why “removed” reviews don’t negatively impact local rankings.
• Possum filter
  • Organic results can get filtered because of duplicate content, whereas local results can get filtered because they’re too close to another business in the same category. This is called the Possum filter.
• Keywords in a business name
  • This is against Google’s guidelines but it works sadly
  • For example, Joy tested adding the word “salad bar” to a listing that didn’t even have a salad bar and their local rankings for that keyword shot up.
  • Although it works, don’t do it! Google can remove your listing for this type of violation, and they’ve been removing more listings for this reason lately.
• Fake listings
  • New listings can rank even if they have no website, authority, citations, etc. simply because they keyword stuffed their business name. These types of rankings can happen overnight, whereas it can take a year or more to achieve certain organic rankings.
  • Spend time reporting spam listings in your clients’ niches because it can improve your clients’ local rankings.

Britney Muller — Featured Snippets: Essentials to Know & How to Target 

Closing out day three of MozCon was our very own Britney, Sr. SEO scientist extraordinaire, on everyone’s favorite SEO topic: Featured snippets!

Why are we so concerned about traffic? What about branding/messaging/share of voice? You can't NOT target a keyword just because it has a Featured Snippet @BritneyMuller #MozCon

— Ruth Burr Reedy (@ruthburr) July 17, 2019

We’re seeing more featured snippets than ever before, and they’re not likely going away. It’s time to start capitalizing on this SERP feature so we can start earning brand awareness and traffic for our clients!

Here’s how:

• Know what keywords trigger featured snippets that you rank on page 1 for
• Know the searcher’s intent
• Provide succinct answers
• Add summaries to popular posts
• Identify commonly asked questions
• Leverage Google’s NLP API
• Monitor featured snippets
• If all else fails, leverage ranking third party sites. Maybe your own site has low authority and isn’t ranking well, but try publishing on Linkedin or Medium instead to get the snippet!

There’s lots of debate over whether featured snippets send you more traffic or take it away due to zero-click results, but consider the benefits featured snippets can bring even without the click. Whether featured snippets bring you traffic, increased brand visibility in the SERPs, or both, they’re an opportunity worth chasing.

Aaaand, that's a wrap!

Thanks for joining us at this year's MozCon! And a HUGE thank you to everyone (Mozzers, partners, and crew) who helped make this year's MozCon possible — we couldn't have done it without all of you. 

What was your favorite moment of the entire conference? Tell us below in the comments! And don't forget to grab the speaker slides here! 

Sign up for The Moz Top 10, a semimonthly mailer updating you on the top ten hottest pieces of SEO news, tips, and rad links uncovered by the Moz team. Think of it as your exclusive digest of stuff you don't have time to hunt down but want to read!

The Real Impact of Mobile-First Indexing & The Importance of Fraggles

Is Fracking Bad for Drillers and Investors?

A recent feature at the anti-fossil-fuel Desmog Blog reported the “stunning admission” of a former shale CEO that fracking was a fool’s errand for industry. “The shale gas revolution has frankly been an unmitigated disaster for any buy-and-hold investor in the shale gas industry with very few limited exceptions,” stated Steve Schlotterbeck, formerly of EQT. “In fact, I’m not aware of another case of a disruptive technological change that has done so much harm to the industry that created the change.”

He closed: “The technological advancements developed by the industry have been the weapon of its own suicide.”

Suicide, as in the end of the supply-driven boom? Is a large drop-off ahead for today’s U.S. record oil production of 12.2 million barrels per day, a 12 percent jump from one year ago? Same for natural gas, which is also in a technologically-driven production boom?

Schlotterbeck’s chart of eight companies left out some of the big winners, such as EOG Resources, and included his own company that he left in poor shape. Obviously, there are losers, not only winners, in a market economy, and over-optimism and overexpansion exact a penalty. Creative destruction, after all, ensures that consumers come first, unlike crony capitalism where producers do.

Peak Oil, Peak Gas Not

Schlotterbeck’s lament is “old song, latest verse.” From the late 1920s through the early 1970s (excepting during World War II), a “crisis” of U.S. overproduction resulted in mandatory output cuts (called market-demand proration) in many oil states, as well as federal tariffs and quotas to block oil imports.

Federal price controls, as well as OPEC production cuts, changed that in the 1970s, but deregulation in the early 1980s brought back a buyers’ market. The halving of oil prices in 1986 witnessed new calls for oil tariffs, but free-market reliance brought resource adjustments that have made the industry sustainable, although cyclical, ever since.

Natural gas, too, price-regulated, experienced shortages in the 1970s. But a “natural gas bubble” in the 1980s and 1990s inspired more complaint and calls for government intervention.

Enron CEO Ken Lay, a Ph.D. economist no less, accused the major oil companies of “economically irrational behavior” for selling their natural gas “below cost” at Daniel Yergin’s annual CERA conference in 1991. Another company executive complained that buyers were a lot smarter than sellers. Lay’s fuss was about wellhead gas selling for $1.80/MMBtu, the lowest price since 1976, adjusting for inflation.

That 1991 price equates to $3.35/MMBtu today, which is 40 percent above the market price today. It is all relative, and technology rules—driving costs relative to selling prices.

Do not be fooled. Too “much” or “little” production is part of a self-correcting process, with price signals and profit/loss educating market participants going forward. And far from helpless, producers for decades have hedged forward to lock-in revenue in the face of uncertain spot prices. Entrepreneurial self-help, not government this-or-that, is the way of the true market.

A Caveat

In her monograph, Saudi America (2018), Bethany McLean interpreted the shale revolution as a contrived boom, the result of artificially low interest rates. “If it weren’t for historically low-interest rates, it’s not clear there would even have been a boom,” she writes. Echoing Steve Schlotterbeck (above), she imagines much less production having resulted if drilling was limited to companies’ cash flow, not speculative capital fueled by low-interest rates.

There is some truth to McLean’s analysis, although her conclusion is very overstated.

Undoubtedly, the Federal Reserve’s expansionary monetary policy in the wake of the 2008 financial crisis provided more capital than a free-market monetary regime would have, resulting in more oil and gas drilling and debt than otherwise would have been the case. To this extent, a buyers’ market was falsely incentivized, leading to producer distress, per Schlotterbeck.

Still, there is the entrepreneurial error of focusing too much on supply and not on lower prices from that supply. Examples abound of oil producers making a discovery, borrowing money to drill-up the field, and going insolvent when prices broke. And Exxon Mobil’s $41 billion (over)purchase of XTO in 2010 was the beginning of that storied company’s decline from the top.

New technology lowering finding costs is the ultimate driver of a U.S. that is awash in oil and gas. Necessity being the mother of invention, low selling prices will lead not to a sizeable industry contraction but to new-generation technologies to allow the best companies to persist and thrive in low-price environs.

Conclusion

Resourceship has been the consumer’s best friend since the dawn of the oil and gas industry. All the while, industry participants in a buyer’s market (the norm) have complained about financial distress and, too often, resorted to cronyism with state and federal governments.

Thankfully, legalization of oil exports from the United States, as well as burgeoning LNG (liquefied natural gas) exports, have created new markets to absorb record production. Expect a continuing buyer’s market in the months, years, and decades ahead under free-market energy policy, part of President Trump’s theme of energy dominance. Expect far worse from anti-energy, keep-it-in-the-ground obstructionism.

The post Is Fracking Bad for Drillers and Investors? appeared first on IER.

MozCon 2019: Day Two Learnings

MozCon 2019: The Top Takeaways From Day One

Cost of Transitioning to 100-Percent Renewable Energy

How to Target Featured Snippet Opportunities — Best of Whiteboard Friday

Atlantic Coast States Plan Expensive Offshore Wind Farms

Despite its high cost, states along the Atlantic coast from Massachusetts to Virginia are planning to invest in offshore wind. Massachusetts is preparing to obtain power from more than a score of huge wind turbines off its coast, carried to the mainland by underwater cables, with the cost passed through to households and businesses. New Jersey regulators just selected Ørsted, a Danish energy company, to build giant wind turbines 15 miles off the coast of Atlantic City that will generate 1,100 megawatts of offshore wind. Connecticut is set to start its initial offshore wind solicitation with the aim of getting 2,000 megawatts by 2030. Maryland has plans for two wind farms off the coast of Ocean City with a 328-foot meteorological tower to be installed in July about 17 miles off the coast in advance of the US Wind offshore wind farm project. New York has plans for wind farms off the coast of Long Island.

To date, the nation’s only offshore wind turbines are located off the coast of Block Island, Rhode Island. The Block Island Wind Farm went into operation in late 2016, costing $300 million—$10,000 per kilowatt—for five wind turbines totaling 30 megawatts of capacity. Operating and maintenance expenses for offshore wind farms currently add about $80,000 per megawatt each year, according to the Energy Information Administration. Despite its high cost, this wind farm made sense since Block Island had relied on high-cost electricity generated by diesel generators that obtained their fuel from floating tankers ferried across 18 miles of water. Rhode Island is planning another offshore wind project—an 84-wind turbine farm in waters south of Martha’s Vineyard, costing $2 billion-plus $16.7 million to compensate companies that lost access to fishing grounds.

According to the Energy Information Administration, the levelized cost of a new offshore wind turbine is more than double the cost of an onshore wind turbine and over three times the cost of a new combined-cycle unit. 

Virginia

Virginia’s State Corporation Commission approved a project to construct 12-megawatts of wind turbines 27 miles off the coast of Virginia Beach in federal waters. The plan is to have the wind turbines operating by the end of 2020, making that project a steppingstone to the state’s goal of 2 gigawatts of offshore wind by 2028. The project is intended to determine how the technology works and performs in the Atlantic Ocean, with its potential for hurricane-force winds.

New Jersey

New Jersey’s Ocean Wind project is expected to begin construction in early 2020. The Ocean Wind project offered a first-year Offshore Wind Renewable Energy Certificate price of $98.10 per megawatt-hour—which represents costs paid by ratepayers before they are refunded for energy and capacity revenues generated from the wind project. That price is two to three times more than the cost of generating power from existing coal, nuclear, and natural gas resources. The Ocean Wind project is expected to result in an estimated monthly increase on utility bills of $1.46 for residential customers, $13.05 for commercial customers, and $110.10 for industrial customers. It is estimated that the project will create over 15,000 direct jobs during its 25-year expected life and generate $1.17 billion in economic benefits.

New Jersey’s Ocean Wind project is a major step toward fulfilling Governor Phil Murphy’s promise to install 3,500 megawatts of offshore wind by 2030. Governor Murphy has directed the state’s regulators to solicit 1,200 megawatts in 2020 and 2022. New Jersey’s offshore wind will be subsidized through charges on ratepayers’ utility bills.

Maryland

The 328-foot tall meteorological tower, in roughly the middle of US Wind’s approved Wind Energy Area, will be used to collect wind resource data within the Maryland lease area before the 32 huge offshore wind turbines are installed. The installation of the met tower will begin in mid-July with a construction schedule of about 10 days. The tower will have a braced caisson foundation sunk at a water depth of 88 feet, a steel deck, and a galvanized steel mast. The construction area will include a lift barge, cargo barge, a tow tug, and several crew boats. US Wind requested a 500-meter safety buffer during the tower construction. The project is expected to create roughly 7,000 direct and indirect jobs in Maryland including an in-state investment of nearly $1.5 billion.

Ocean City wants the turbines to be sited 26 miles offshore where they should not be visible by tourists on the coast. The town council believes visible turbines would have a detrimental impact on the views from the Ocean City shore and on property values. The council is also not happy with the timing of the meteorological tower installation because it is so close to the White Marlin Open held in early August. Commercial fishermen are concerned about losing equipment and that the construction and noise will scare fish and other seafood away.

Conclusion

State politicians and regulators are going ahead with offshore wind farms despite their cost, impact on ratepayers, and concerns of fishermen and city councils. The tourist industry is a major contributor to the economies of Virginia Beach, Atlantic City, and Ocean City where the wind turbines are to be located. Increasing the cost of power, disrupting views, and scaring away sea life will not help those economies continue to flourish.

The post Atlantic Coast States Plan Expensive Offshore Wind Farms appeared first on IER.

#29: Kenny Stein on the Trump administration’s ACE Rule

Kenny Stein, IER’s Policy Director, joins the show to discuss the recent Affordable Clean Energy (ACE) rule from the Trump administration’s EPA and what the future looks like for American coal.

• More on the ACE rule here.

The post #29: Kenny Stein on the Trump administration’s ACE Rule appeared first on IER.

Oren Cass’ House Testimony on the Costs of Climate Change

Back in June, Oren Cass testified before the U.S. House Committee on the Budget on the costs of climate change. His testimony drew on the economics of climate change peer-reviewed research, in order to show (among other points) that humans do not face a climate crisis. Scenarios featuring harmful climate change, even in the standard models used by the UN and Obama EPA, are only projected to unfold over many decades. The alarmist camp either downplays or completely ignores the fact that humans will grow richer and adapt to whatever changes lie in store. The “consensus” projections still foresee humans in 2100 being much richer than we are today, with climate change policies merely influencing how much richer.

A Rising Tide Lifts All Boats

To illustrate how the public has been misled, Cass discusses the November 2018 release of the U.S. Global Change Research Program’s Fourth National Climate Assessment, or what is commonly called the NCA. The New York Times headline proclaimed, “U.S. Climate Report Warns of Damaged Environment and Shrinking Economy.”

Yet as Cass points out, no, that’s not what the NCA warned of. Rather than a shrinking economy, the NCA warned that climate change would mean a more slowly growing economy. Specifically, the NCA report suggests that America by the year 2100 would be 4.0x richer without climate change, but “only” 3.9x richer with climate change. Cass also illustrates the situation in terms of growth:

Per EPA (and notwithstanding the New York Times), the economy will still be growing. Assuming even a modest 1.5% annual growth rate, the damage from climate change represents two years of growth. In other words, a climate-change-afflicted America might not achieve until 2102 the level of economic prosperity that a climate-change-free America might achieve by 2100. [Bold added.]

When you think of the costs of climate change in these terms, it seems far less dramatic, doesn’t it?

Senator Markey Abuses the Science

Cass then illustrates a version of “the telephone game” in which a claim morphs upon each retelling. In this case, an outlier data point in one of the charts in the NCA showed a potential 10% loss of GDP from climate change, under extreme warming of 8°C of warming. This led a New York Times story to run the subheadline: “Reduction of Up to 10 Percent of GDP.”

Yet that takeaway is very misleading, because the NCA’s own analysis doesn’t contemplate such extreme warming. (After all, I could draw a chart showing 100% GDP loss in a scenario where the earth warms by 50 degrees Celsius and everybody immediately dies. It would be very misleading to say, “Murphy just showed the loss from climate change could be as high as 100%.”) As Cass explains in his testimony, the NCA actually projected much more modest warming:

But that level of warming [needed to reach the 10% GDP loss—rpm] is not contemplated by the NCA. In its “Higher Scenario,” the NCA estimates warming by century’s end of only 2.4–4.7°C, which would correspond in its damage chart to roughly 1–4% of GDP. This did not stop Senator Ed. Markey (D-MA) from announcing via Twitter that “According to the Trump admin’s National Climate Assessment, with no action, climate change will result in 10% GDP loss by 2090,” and that “A #GreenNewDeal addresses this climate reality.”

As this episode illustrates, what often happens in the climate change debate is that a particular claim from the literature is stripped of context and trumpeted to the public, leading them to believe that the situation is far more dire than it actually is.

Adaptation

We’ve seen that the National Climate Assessment (NCA) projected tolerable damages from climate change, especially when viewed in the context of impacts that will only occur over the course of many decades as the economy continues to grow.

Yet even the modest estimated costs are unrealistically high. As Cass notes, the in the fine print underneath one of the NCA’s graphics, it explains that “results assume limited or no adaptation.”

But of course, humans will adapt to a changing climate, and this will minimize its possible harm. Farmers will switch what crops they plant, people will adopt more air conditioning, and so on.

I hasten to add that hoping adaptation can cushion the blow isn’t some sci-fi pipe dream. As I explained in a previous post (which itself summarized analysis from Cass), some of the most pessimistic forecasts of the dangers of climate change contain absurd results. For example, they project that if a northern city like Philadelphia becomes as warm as a southern city like Houston, then it will have a far higher rate of heat-related fatalities in the year 2100 than Houston does right now. This is clearly nonsense, and the problem is that the study in question looked at the spike in heat-related deaths in Philadelphia during unusually hot summers, and then extrapolated. But of course, in reality if Philadelphia became permanently hotter—and ended up like Houston—then its residents would adopt more air conditioning just like the people in Houston do. Furthermore, people living in a warmer climate are better able to tolerate high temperatures; this is (partly) why the heat-related death rate in Houston right now isn’t as large as we would expect if we had only looked at Philadelphia mortality data.

Conclusion

In his recent testimony before the House Budget Committee, Oren Cass took pains to emphasize that he wasn’t “denying” the underlying climate science, but instead was showing how it had been distorted when converted into claims about economic impacts and the proper government policy responses. Since the forecasted climate change is projected to happen over many decades, one of the most robust “policy responses” is to make sure the market economy is left with the freedom to adapt. A steadily growing economy is one of the best ways humans can cope with climate change and thereby contain its costs.

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