Institute for Energy Research

The Institute for Energy Research (IER) is a not-for-profit organization that conducts intensive research and analysis on the functions, operations, and government regulation of global energy markets. IER maintains that freely-functioning energy markets provide the most efficient and effective solutions to today’s global energy and environmental challenges and, as such, are critical to the well-being of individuals and society.

Most Recent Articles by Institute for Energy Research:

Why a Carbon Tax Is the Opposite of Tax Reform

Nov 14, 2017 — Institute for Energy Research

Earlier this month I participated in a carbon tax panel discussion before lawmakers and legislative staff members at the Rayburn House Office Building on Capitol Hill. Since the GOP’s tax overhaul is on Washington’s agenda, I explained why a new carbon tax would be the opposite of the standard goals of pro-growth reform of the tax code. To illustrate my point, I used an analogy with the car market that seemed to resonate with the audience, so I’ll summarize my argument here for IER’s readers.

Southeast Asia’s Coal Demand Boom

Nov 8, 2017 — Institute for Energy Research

Southeast Asia's Coal Demand Boom
Because coal is the most affordable technology for electric generation in many parts of the world, coal-fired capacity is still being built. According to the International Energy Agency (IEA) in its Southeast Asia Energy Outlook 2017, almost 100 gigawatts of new coal-fired generating capacity is expected to come online in Southeast Asia by 2040—more than doubling the region’s current coal-fired capacity.1  (See graph below.) The agency expects Southeast Asia and India to account for the majority of the new coal demand as those economies continue to grow and their demand for electricity increases. Despite some countries shuttering coal-fired power plants and cancelling new plants, IEA expects global coal-fired capacity to increase by about 50 percent over today’s levels by 2040.2

Initial Thoughts on the GOP Tax Bill

Nov 3, 2017 — Institute for Energy Research

House Republicans today unveiled their much-anticipated tax bill, which contains the most extensive reform of the tax code since the landmark 1986 overhaul. Although we have not fully digested the details, we can offer some initial observations from the perspective of IER’s focus on free energy markets.

What’s In a Name?

H.R. 1 is aptly titled “The Tax Cuts and Jobs Act.” This is consistent with President Trump’s campaign rhetoric, as well as the familiar theme of conservative and libertarian policymakers that prosperity occurs by unleashing American entrepreneurs and returning resources to the private sector.

U.S. to Become a Major LNG Exporter

Nov 1, 2017 — Institute for Energy Research

U.S. to Become a Major LNG Exporter
There is currently only one operational liquefied natural gas (LNG) export terminal in the United States; it has been operating since early 2016. Cheniere Energy is exporting LNG at its Sabine Pass facility with three trains and a capacity of about 2 billion cubic feet per day. Its total capacity is expected to be 3.5 billion cubic feet per day when all 5 trains are completed. Cheniere is in the process of getting contracts and financing for a sixth train.

Clean Power Plan Repeal: Myths vs. Reality

Oct 18, 2017 — Institute for Energy Research

With EPA administrator Scott Pruitt’s announcement that the Trump Administration was formally proposing repeal of the so-called “Clean Power Plan” (CPP), certain voices in the blogosphere and media predictably went nuts. In the formal response from IER, we have already applauded the announcement as promoting liberty in energy markets and keeping energy more affordable for American households. In the present post, let me further respond to some of the (hysterical) reactions that are based on myths.

China’s New Environmental Problem: Battery Disposal

Oct 14, 2017 — Institute for Energy Research

In 2016, China became the world’s largest electric vehicle market accounting for over 40 percent of the electric vehicles sold worldwide. China passed the United States which had the highest electric vehicle sales in 2015. In 2016, China had over 1 million electric vehicles, which was an 87 percent increase over the previous year. They added 336,000 new electric car registrations; this included battery only and hybrid models. Electric vehicles range in price from $6,000 to $200,000 (for the most expensive Tesla model). 1 Like several European countries, China is planning to ban the sale of gasoline and diesel vehicles in favor of electric vehicles at an unannounced date.

What Do People Think About Climate Change?

Oct 13, 2017 — Institute for Energy Research

A national research project sponsored by the Institute for Energy Research and the American Conservative Union Foundation consisting of ten focus groups and a nationwide survey (1018 registered voters, margin of error 3.1%) discovered that:

There is little enthusiasm for taxing energy. When asked about a tax on carbon dioxide, 44% of respondents opposed, while 39% favored. More importantly, when asked whether they trusted the federal government to spend the money from such a tax wisely just 18% said they did, while 74% said they did not.

Ensuring a Resilient Grid Requires Less Government, Not More

Oct 12, 2017 — Institute for Energy Research

On Friday September 29th, the Department of Energy released a Notice of Proposed Rulemaking proposing a rule for action by the Federal Energy Regulatory Commission (FERC). The notice calls on FERC to create new rules for how grid operators value “reliability and resilience” in electricity generation. While the proposed rule is limited in specifics, the essence of the proposal is to guarantee cost recovery for “fuel-secure” power generation units, defined as units with a 90-day fuel supply stored on site. While no specific types of generation units are mentioned, this on-site storage definition would likely apply to coal-fired, nuclear, and hydropower generation facilities.

IER Response to EPA’s Clean Power Plan Repeal Proposal

Oct 11, 2017 — Institute for Energy Research

WASHINGTON — Institute for Energy Research President Thomas Pyle has issued the following statement regarding EPA’s proposed repeal of its existing source rule, commonly known as the Clean Power Plan, in accordance with President Trump’s energy independence executive order:

“The Clean Power Plan was never about clean power. The nation’s electricity generation fleet is already very clean and getting cleaner—as shown by the nearly 70-percent reduction in criteria pollutants since 1970. The plan was really about instituting more federal control over a dispersed system and driving up the cost of reliable electricity in line with the previous administration’s climate ideology. The result would have been residents in more than 40 states experiencing double-digit percentage increases in their electricity rates by 2030. For that reason, we preferred to call it the Creating Poverty Plan.

“Beyond its implications in terms of dollars and cents, the plan wasn’t cooperative federalism as EPA claimed, but coercive federalism and a misapplication of the Clean Air Act. It extended EPA power in unprecedented ways and marked a clear deviation from the agency’s traditional role. IER commends EPA for its decision to rescind this harmful rule. This is a major victory for American families because it enables all of us to continue reaping the benefits of the affordable energy we need to power our lives and grow the economy.”


The United States Needs to Maintain Its Existing Electricity Sources

Oct 5, 2017 — Institute for Energy Research

A recent study by analytics firm IHS Markit and co-sponsored by the U.S. Chamber of Commerce shows the importance of our current mix of coal, natural gas, nuclear and renewable energy generating capacity. The report, ‘Ensuring Resilient and Efficient Electricity Generation, found that the current mix of electricity resources is saving our nation $114 billion annually in electricity costs, lowering the cost of electricity by 27 percent. Without significant contributions from nuclear and coal generation, the study found that the price of electricity would increase and the higher prices could lead to the loss of 1 million jobs, the loss of $158 billion to our economy within 3 years and the loss of up to $845 in disposable income for every U.S. household each year.

New York’s Clean Energy Standard: Costly and Ineffective

Oct 4, 2017 — Institute for Energy Research

A recent report evaluated New York State’s clean energy programs and found them costing the state’s consumers and businesses over $1 trillion with no measurable impact on world climate.1 Thus, the carbon dioxide reductions that would cost the state’s residents heavily would have no value. This is nothing new; New York finds numerous ways to tax its people with little benefit to show for it.

No Need for a Carbon Tax in Any Tax Reform Plan

Sep 30, 2017 — Institute for Energy Research

Although there is no mention of a carbon tax in the recently released GOP blueprint for tax reform, there had been the familiar chatter of a “grand bargain” wherein Democrats get a carbon tax and Republicans get corporate income tax relief. For example, Edward Kleinbard wrote such an article for the Wall Street Journal earlier in the week.

Because this issue will no doubt continue resurfacing, it’s important to expose the flaws in Kleinbard’s case. He simply ignores the political impossibility of his proposal: why would Democrats agree to a massive new tax falling on poor people, in order to fund tax cuts for corporations? Furthermore, why do we need a “revenue neutral” tax reform plan? As I’ll show, federal spending and taxation are both at relatively high levels, historically speaking. If policymakers want to reduce the deficit, they should trim their budgets, not enact a massive new tax on energy and transportation.

The Jones Act: Distorting American Energy Markets Since 1920

Sep 30, 2017 — Institute for Energy Research

One notable consequence of this hurricane season has been the renewed interest in the controversial Jones Act. Enacted in 1920, it mandates that only vessels that are built, owned, crewed, and flagged in the United States can participate in maritime shipping between domestic ports. In the wake of Hurricane Harvey and Hurricane Irma, the Department of Homeland Security temporarily suspended the controversial law in order to increase the supply of refined fuel to areas affected by the storms. Yesterday, President Trump also waived Jones Act shipping restrictions to Puerto Rico as they were holding back response efforts to Hurricane Maria. The temporary suspension of the legislation is noteworthy because one of the stated purposes of the Jones Act is to better prepare the country for natural disasters. Waiving these provisions in the wake of these recent hurricanes is an admission that the legislation actually hinders disaster relief by limiting the supply of ships that can legally be used to transport goods between American ports.

Responding to R Street on the Carbon Tax: When Does It Make Sense to Advocate the Impossible?

Sep 19, 2017 — Institute for Energy Research

In a recent series of posts (here and here), I amplified some of Oren Cass’s strongest criticisms of the typical case for a US carbon tax. Seeing an opportunity for a zinger, Josiah Neeley at R Street put up a post entitled, “Prominent carbon tax skeptic admits it could increase economic growth.” Although I appreciate being dubbed “prominent,” as we’ll see the R Street post is wrong in both title and in substance. Neeley is referring to my discussion of a capital tax cut offsetting the damage of a carbon tax, but that of course is far from saying a carbon tax could increase economic growth. Beyond that, Neeley’s advice to me to advocate politically impossible outcomes is also dubious.

Wind Turbines Reduce the Productivity of Surrounding Vegetation

Sep 15, 2017 — Institute for Energy Research

Many of wind energy’s problems, such as its intermittent nature; its slaying birds, bats and other animals; its noise pollution; its degradation of vistas; and its higher costs compared to traditional technologies are well known. The latest study, however, shows that it also reduces the productivity of surrounding vegetation. The study finds that wind turbines elevated both day and night temperatures, which suppressed soil moisture and enhanced water stress, decreasing local vegetative growth and productivity. Further, wind requires 5 to 6 times more land than traditional technologies (coal, natural gas and nuclear) for the same amount of capacity and 12 times more when generating capability is also considered.

A number of recent studies discuss these issues and are highlighted below.