My response to Dan Boren's letter

(This is my response to his response, unfortunately I do not have my first letter to Representative Boren.)

Dear Representative Boren,

Thank you for the response. I would like to take a minute to address some of your comments and conclusions. You are completely correct that we have ramped up our energy usage dramatically in the past 30 years. You are also correct that a "Cap and Trade" program would drive up the costs of traditional fuels which would make " green energy sources, whose cost have always been higher, more competitive in the marketplace." However, you omit or ignore two factors. First, the reason that traditional fuels are cheaper is because there are costs of these fuels do not contain the pollution and environmental damage that results from acquisition and use of these traditional fuels. Cap and Trade would make the market more honest and respect the costs that are not associated with basic production. Second, the green energy sources are more expensive because they are so small and limited. If they could compete on an even playing field with other fuels then there would be innovation and expansion that would drive green energy pricing down while providing a more honest price for traditional fuels.

The Cap and Trade bill is not merely an environmental bill will improve our national security position by reducing our dependence on foreign energy sources as well as insulating us against demand generated, production generated, or conflict generated price spikes. Japan weathered the energy price increases of 2007-2008 more successfully than our country because they have a much more effective efficiency program combined with their focus on renewables.

The same comments about job loss were made when we had the effective Cap and Trade program for SO2 which was an incredibly successful program to reduce SO2 emissions and acid rain. A few years ago Texas Instruments had the opportunity to build a new wafer plant in China or Singapore. Instead they built it in Richardson Texas, using green tools to reduce the energy usage during building and the energy footprint of the building. More thought in the building, planning and design work resulted in a construction cost of 30% less per square foot than the previous building with expectations of 20% less in energy usage and 35% less in water usage. So even if cap and trade increased costs 6% there would still be a net savings of 16%. On a side note, I would personally prefer the computer chip jobs to the concrete plant jobs for our cities and towns.

Companies can only charge what the market will allow; they cannot raise prices just because their costs increase or they will price their product out of the market. While there might possibly be a few companies that are at risk of movement (though I haven’t seen any research to support this claim) most companies are not as portable as you assume. For example, utilities cannot move to China to produce electricity for our local communities.

Furthermore, we are losing jobs right now because American companies who are in the green technology business are moving overseas to be closer to the businesses and governments which buy their products. Energy efficiency and renewables are the future of industrial innovation. How are we going to provide these jobs, produce these jobs or develop the technology if we have no experience in green technology?

Yes it will increase the cost of energy in Oklahoma. That is primarily our fault for allowing our environmental standards to be so lax for so long. We allow pollution, coal plants cover the state, and artificially low energy prices - prices that defer the costs to the environment and the health of its citizens. I see the coal trains often and coal generated pollution from the OG&E plant every day on my way to and from work. It seems that every month more friends and acquaintances are developing asthma. Isn't improvement in this area this really worth the few dollars more per month - $175 per year based on the CBO estimates?

You mentioned a windfall in California. California has been concerned about pollution since the 1970's and have very strict environmental policies, if that long term vision results in a rewards, well, I would call that a return on investment the resulted in their economy growing much faster than that of Oklahoma.

On a personal note, I also know that we recently reinsulated our home and replaced our furnace and air conditioner. Since making these changes in January we have seen between 30 and 40% reduction in KWH. Imagine what would happen if people had even more encouragement to address their efficiency. If we combined this with smarter grids and tools so that energy companies could profit as much by encouraging efficiency as selling more power we could be leaders not followers.

You also mentioned concern about the limited overall impact of the Cap and Trade provisions. You are correct that China and India will not be party to this law. However, I am somewhat disturbed that you would compare us so easily to these countries and define what we should or should not do not by whether it is the right thing to do, but whether or not other countries are doing it as well. That is akin to saying you cannot make certain every child gets a healthy breakfast so why even try to provide any children as possible with a healthy breakfast. Or on a governmental level, since Arkansas isn't working to improve water quality why should we try to improve water quality - the water won't be perfectly clean.

This point also ignores the fact that development of cleaner and more efficient technologies will allow us to sell these products to China and India on a massive scale. China is already buying the new more efficient GE diesel locomotives (as is Brazil and Mexico) because they are so much cheaper to operate over the long term - not because they are the cheapest thing to purchase. China has a horrible pollution problem already, imagine if we could sell them truly efficient carbon scrubbers, software and hardware that would improve electrical efficiency, better solar power tools, and the list goes on and on. We need Cap and Trade to stimulate these industries and encourage more investment. This is about pricing fossil fuels accurately based on the environmental impact, and not encouraging wasteful energy policies based on artificially low traditional fuel pricing which ignores the long term impact of productions and use.

Respectfully Yours,

Darren Magady