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By Charles Payne, CEO & Principal Analyst
6/24/2013 6:39 AM
This week the biggest news out of Washington will be President Obama's updated battle against global warming. It's not enough to win the counterfactual war that the administration saved America from a Great Depression, but how about saving the entire planet from Armageddon! Just a week after China agreed to buy $270 billion worth of oil from Russia over the next 25 years, America is ready to stick a knife into the ailing coal industry while teeing up regulations that will severely hamper natural gas. When the deal is announced, up to 280 coal-fired units could be forced closed, taking more than 40,000 megawatts of power offline.
If you think it's going to be replaced by wind and solar you are greatly mistaken. The coal plants affected by the unleashing of the EPA are mostly in the following states:
> West Virginia
> North Carolina
Those states have no solar or wind projects in the works, and it really wouldn't make a difference since only 3,000 megawatts of power is in the offing for all solar projects. Moreover, these projects have come at an immense expense to taxpayers while yielding very few benefits. It's mostly crony capitalism at its best. Take for instance the Topaz Solar project in California. After being penciled in for $1.9 billion in Department of Energy loan guarantees, a series of critical management mistakes caused the loan to be pulled ... in steps Mr. Buffett.
Warren Buffett and his Mid America Energy bought out ownership from First Solar and cut a 24 year deal with Pacific Gas and Electric to purchase overpriced solar power at above market prices. PG&E has no choice since California has mandated utilities must generate one third of electricity from renewable sources by 2020. This mandate is another tax on ratepayers, including taxpayers and home and business owners.
In fact, it is estimated the sweetheart deal California Valley struck with the state will result in PG&E paying $463 million above rate over the lifetime of its existence. This project received a $1.2 billion federal loan guarantee and will have to pay no property tax. So, when President Obama says electricity has to go higher to fulfill his goal it wasn't a lie. On the contrary, this is going to be extraordinarily painful to average Americans. So, what are the benefits? The industry will tell you solar savings around the world have thus far been equivalent to taking 1.1 million cars off the road and planting 138.3 million trees.
Before we dethrone Johnny Appleseed, let's be clear, no trees have been planted and not a single car has been replaced.
The biggest insult is the lack of permanent jobs being created from all our taxpayer dollars ... or, as the White House calls it: "investment."Current solar projects, manufacturing, bio fuels, and wind development cost American taxpayers $17.2 billion and will yield a grand total of 1,188 permanent jobs.
We're greeted this morning with typical angst that now seems to plague the market mostly as a reflection of frustration rather than fear. Sure, you can argue the stock market has come too far too fast but this is a larger problem. It's really about leadership. With western economies mostly giving up on the ability of elected leaders to generate prosperity there is enormous pressure to either steal it through taxes (a very short term solution) or through money printing (another short term solution). Asian leaders are also grappling with the notion of near term appeasement that comes with the risk of longer term disasters.
For now 14,995 on the Dow is important resistance, and until the index closes above that point, the market remains vulnerable. Emotions are in control right now, and it's critical to have strong fundamental reasons for owning individual stocks. Gold is crashing, reflecting a reality of deflation and that's the worst thing that could happen for any economy or central bank. I just don't see the Fed making any changes this year to its asset purchases, but Ben may want to see just how much risk there is toward eventually making adjustments.
|Unfortunately - YES - the administration has been effective. Problem is they have been effective in advancing their own socialist anti-individual rights agenda. Worse, their successes and diversionary tactics have enabled similar minded politicians in the states (CA, NY, CO).|
Randy on 6/24/2013 10:09:41 AM
|Adminstration policies are the problem.|
Frances Wiggins on 6/24/2013 10:49:56 AM
|Effective of what. Destroying America and the capitalist Dream. Effective in making us dependent on governemnt handouts.Yes, the were successful of that. America's best days are behind us, unless we can get some ledership back in the White House. We missed a great opportunity in not electing Romney. He was uniquely qualified to have fixed America.|
gary briggs on 6/24/2013 11:20:54 AM
|LasVegas is building a huge solar plant (Sen. Reids Son!). How convenient for expensive energy. Nights are great for solar. being the energy industry, we should thank the Democrats for an extra 4 years of Coal reserves. (not serious).|
Don Frontone on 6/24/2013 11:22:50 AM
|Obama's policies are abject failure for positive outcome|
HUGE success in the destruction of individual liberty and economic growth
Thomas J. Zaleski, RIA on 6/24/2013 11:29:34 AM
|Yes. Effective as the devil!|
z on 6/24/2013 11:32:00 AM
|He has been effective promoting his socialistic agenda including as you mentioned his battle against global warming. He said when running for President he was going to "redistribute the wealth" and we are seeing that. It is going particularly to left-wingers, his cronies and his supporters. Those guys are raking in billions and will be very wealthy by the time he leaves office along with Mr. Obama.|
Shutting down the coal plants will have a devastating effect on the various states. The local economies at first and then across the country. If folks can’t afford to pay their energy bill or have their power shut off, they will be screaming at the king.
Don’t get me wrong, I like the idea of renewable energy, just not the way this administration is going about it.
James on 6/24/2013 12:07:58 PM
|If you measure effectiveness by how far the government policies have advanced energy independence, then I would have to say epic fail. We have a lot of unique opportunities in this country to advance renewables using the capitalist system. Unfortunately the current regime doesn't believe in capitalism.|
Michelle on 6/24/2013 12:40:57 PM
|The "lier-in-chief" is incredibly effective in promoting socialism, but incredibly incompetent at just about everything else.|
Dick Kantenberger on 6/24/2013 2:14:06 PM
|dffective @ mimicking Hitler & we know the results.|
john from S. Texas on 6/24/2013 2:19:01 PM
|Effective, yes for all non-free thinking people (translation- left-wingers, educators waiting for their appointment and all other socialists), else NOT!|
Cecil E on 6/24/2013 2:53:07 PM
|No sense of perspective, indifferent to real world priorities and, what's finally beginning to be clear to the international community, utterly without experience. This mess demonstrates that there really is no shortcut to diplomatic wonderfulness.|
Patricia Flynn on 6/24/2013 3:20:31 PM
|Most unfortunate for most of us.|
Extremely effective on 6/24/2013 6:01:32 PM
|This $100 million trip to Africa is the tipoff. What is he running for now? To become the Grand Sultan of Africa? The Great Prince returns to Kenya. |
Its like Snowden in Moscow. What will he have to give Putin to get Snowden back? Putin is certainly not going to let him go until he has milked Snowden dry. Another great example of administration ineptitude.
Dennis Howard on 6/25/2013 10:13:32 AM
|Oh yes. He's been very effective...|
(along with his "useful innocents" in destroying the American mores, self-reliance, pride, economy...
Gah! I don't want to go on.
Gary D. on 7/2/2013 11:42:49 AM
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