Archive for January, 2007

Nigeria is a prime example

Wednesday, January 31st, 2007

of the natural resource curse. Corrupt government officials in oil rich Nigeria are siphoning off the many billions of dollars the country has received in oil income. Example in a recent Human Rights Watch report: “One local government chairman habitually deposited his government’s money into his own private bank account. Another has siphoned off money by allocating it towards a ‘football academy’ that has not built.” 

There’s more:

The report documents how revenues flowing into local government treasuries in recent years have been grossly misallocated or stolen outright. Many local governments have lavished funds on new government offices and other massive construction projects that dwarf spending on health care and education. One local government dedicated only 2.4 percent of its revenues to maintaining its crumbling primary school infrastructure while spending 30 percent of its budget on salaries and expenses for the offices of its chairman and legislative councilors. Some local government chairmen have set aside more money for their own travel and “miscellaneous expenses” than they allocate to the schools and health clinics they are charged with running.  
As one embittered resident put it, “All they do is build their headquarters, massive things, air-condition them, and buy vehicles to drive around in.”  
Significant revenues are also lost to apparent theft. One local government chairman spent huge sums on a series of non-existent projects, including a “demonstration fish pond” with neither water nor fish and a “football academy” that has never been built. Another set aside funds in the local government budget to pay more than 100 “functional committees/protocol officers” whose responsibilities, if any, were entirely unclear; their total salaries exceeded those of all the local government’s health sector employees. One local government’s chairman was shown by a judicial inquiry to have illegally awarded lucrative contracts for maintenance and other work to himself, in some cases for services he then failed to deliver.  


Nigeria’s problems don’t end there, and include the rise of radical Islam, ethnic conflict, and attacks against the oil industry.

Thanks Roger!

Tuesday, January 30th, 2007

Roger Simon links to a clip from Tom Friedman’s documentary Addicted to Oil featuring the Coalition on his blog and on the home page of Pajamas Media and notes: ”In these braindead partisan times, it’s a breath of fresh air when someone actually does something constructive.”

Photos from today’s Set America Free press conference at the DC Auto Show

Wednesday, January 24th, 2007

GM graciously invited us to to hold a press conference in front of their beautiful new plug in hybrid concept car, the Volt. Senator Bayh and Rep. Inslee were there to speak about the DRIVE Act, legislation based on the Set America Free blueprint to reduce dependence on foreign oil. 

Senator Evan Bayh and Gal Luft holding the infrastructure Senator Evan Bayh and Gal Luft hold the required infrastructure: a plug (well, you may also need a $15 extension cord)

Frank Gaffney, Gal Luft, and Anne Korin in front of the Volt Frank Gaffney, Gal Luft, and Anne Korin in front of the Volt

Rep. Jay Inslee Rep. Jay Inslee

VOLT event 012307 010.jpg Checking out the Volt’s interior – very sleek!

Set America Free analysis of President Bush’s State of the Union remarks on energy

Wednesday, January 24th, 2007

As the President stated in last year’s State of the Union, America is addicted to oil. Today he reiterated that this addiction creates a national security risk for our country because it leaves us vulnerable to hostile regimes and to terrorists. To address the problem, the President is right to set a national goal to reduce U.S. oil consumption, specifically by announcing a target of 20% saving of gasoline in 10 years, by 2017. That is approximately equivalent to a 10% reduction of oil consumption, as gasoline accounts for almost half of oil demand. This is a reiteration of last year’s commitment to reduce oil consumption by the equivalent of three quarters of the oil we import from the Middle East. Of the 20%, 15% will be saved through increased use of alternative fuels and 5% through increased fuel economy, though the President opposes
Congress increasing CAFE standards and asks instead that this authority be transferred to the Administration.

The savings goal dovetails the DRIVE Act based on the Set America Free Coalition’s Blueprint for Energy Security which was introduced last week by a bipartisan group of 25 Senators. The House version of the bill will be introduced tomorrow (Wednesday) by a bipartisan group of 66 representatives.

The President’s plan leaves some open questions. The plan includes a new mandatory ALTERNATIVE Fuel Standard (AFS) of 35 billion gallons a year by 2017.  This goal is nearly five times the current RENEWABLE Fuel Standard (RFS) of
7.5 billion gallons a year by 2012, and includes more fuel types than the RFS, which counts only renewable liquid fuels: biofuels such as corn and sugar derived ethanol, cellulosic ethanol, and biodiesel. When it comes to alternative fuels the choice is wider. 

Open questions:
1. The Administration should clarify that the AFS includes non-petroleum fuels only, and does not include diesel made from oil. Shifting from gasoline to petroleum based diesel would give a bit of a mileage jump as diesel cars are more efficient than gasoline cars but it will keep our oil addiction intact. In order for the U.S. to gain the security benefits derived from oil saving we must ensure that alternative fuel standard includes ONLY non-petroleum fuels.
2. The Administration should also clarify whether electricity is counted as an alternative transportation fuel as part of the AFS. Since only 2% of U.S. electricity is generated from oil, a shift to electricity in the transportation sector via plug-in hybrid electric vehicles would, as the President has repeatedly emphasized, reduce our oil dependence. 
3. The White House should detail how it expects the 35 billion gallon a year goal to be met.

What about the vehicles?
While the President plan includes a substantial increase in supply of alternative fuels, it did not detail how to increase demand for such fuels. One of the elements most missing in President Bush’s energy plan is emphasis on what automakers must do so that alternative fuels are actually usable – that is, a call from the President to Congress to require that most new cars be fuel flexible. A significant increase in alternative fuels means little if there are no cars that can use them and refueling infrastructure that can serve them. The CEO’s of the “Big Three” automakers, in a November meeting with President Bush, committed to making 50% of their vehicles fuel flexible by 2012, a goal that would be codified by the DRIVE Act.

Authority to reform CAFE
The President proposed that Congress authorize a reformed and modernized fuel economy standard setting system for passenger cars that will allow the Secretary of Transportation to increase fuel economy standards (as was done for
light trucks), and by doing so, save up to 8.5 billion gallons a year of fuel. The President’s request for authority to reform and set CAFE, an authority that the Administration requested from Congress last year as well, stems from the
recognition that regional politics (eg the House Energy and Commerce Committee is chaired by Rep. Dingell (D-MI)), are likely to block CAFE increases in Congress.

The President’s call on Congress to double the current capacity of the Strategic Petroleum Reserve (SPR) to 1.5 billion gallons in order to protect against severe disruptions of our oil supply in the future is a positive step. The SPR is currently home to 770 million barrels. This barely suffices to tide the U.S. economy over if there is a severe disruption of oil supplies. In expanding the SPR the President recognizes that the future oil market will remain unstable and that the threat of supply disruptions is on the rise. To this end an increase in the SPR would help somewhat insulate the U.S. economy
and provide a necessary cushion should Iran, Nigeria, Saudi Arabia or any other major oil producing country goes offline.
For more details on the rationale for expanding the SPR click here.

The Set America Free Coalition is pleased that the President has reiterated his commitment to reduce America’s oil dependence, and that his plan is focused on doing so through increasing fuel choice and advanced technology vehicles. The President can set a tone, but at the end of the day, the key to fundamental change in our America’s energy policy is in the hands of Congress.

Nigeria’s oil war

Tuesday, January 9th, 2007

Watch Anne Korin discuss on ABC’s Nightline the destructive impact Nigerian terrorist group MEND is having on the country’s oil industry.

Good news on the plug-in front

Sunday, January 7th, 2007

GM announces a second plug-in hybrid vehicle model. Set America Free Coalition member Felix Kramer at CalCars has the details.

The hidden cost of oil

Saturday, January 6th, 2007

A new Set America Free brief by Milton Copulos. A few numbers from the brief:

Cost of oil-related defense expenditures: $137 billion in 2006.

Economic toll of periodic oil supply disruptions over the past three decades: between $2.3 trillion and $2.5 trillion.

Bottom line:

“The grand total of all oil-related external or “hidden” costs stands on $825 billion per year. This total is nearly twice the figure authorized for the Department of Defense in 2006. To put the figure in further perspective, it is equivalent to adding $8.35 to the
price of a gallon of gasoline refined from Persian Gulf oil, making the cost of filling the gasoline tank of a sedan $214, and of an SUV $321.”

UPDATE: Read a New York Times interview with Milton Copulos (reprinted in the IHT)