This week on The Learning Curve, guest co-hosts Prof. Albert Cheng of the University of Arkansas and Alisha Searcy interview University of Tennessee Prof. Robert Norrell. He explores Booker T. Washington’s early life in slavery, his transformative leadership at Tuskegee Institute amidst Jim Crow racism, and his advocacy for vocational education as a means for racial uplift. Prof. Norrell also discusses Washington’s 1901 autobiography, Up From Slavery; his controversial White House dinner with President Theodore Roosevelt; and his often overlooked legacy following the activism of the 1960s Civil Rights era. In closing, Prof. Norrell reads a passage from his book Up from History: The Life of Booker T. Washington.
Stories of the Week: Prof. Cheng discusses a Forbes article on education and workforce legislative trends for 2024; Alisha analyzes a story from The Hill on the crisis in STEM and data education.
Guest:
Robert Norrell is Professor and Bernadotte Schmitt Chair of Excellence with the Department of History at the University of Tennessee. In 2015, Norrell published Alex Haley and the Books that Changed a Nation. In 2009, his biography, Up from History: the Life of Booker T. Washington, was widely acclaimed. In 2005, he published a well-reviewed interpretive synthesis of race relations in the twentieth-century United States, The House I Live In: Race in the American Century, and his book Reaping the Whirlwind: The Civil Rights Movement in Tuskegee won the Robert F. Kennedy Book Award in 1986. He has published ten other books on the history of the American South and is the author of 25 scholarly articles. Professor Norrell has given invited lectures at Heidelberg University, Oxford University, the University of Cambridge, the University of Tübingen, and several other universities.
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Hubwonk Smothering Gas Exports: President Sides with Environmentalists Over Environment
[00:00:00] Joe Selvaggi: This is Hubwonk. I’m Joe Selvaggi. Welcome to Hubwonk, a podcast of Pioneer Institute, a think tank in Boston. On January 26th, President Biden issued an executive order announcing plans to pause all approvals of liquefied natural gas exports, citing the administration’s goals of lowering energy costs, creating jobs, and safeguarding health as its intended objectives.
[00:00:25] The statement begins by asserting that, quote, in every corner of the country and the world, people are suffering the devastating toll of climate change, unquote, as the reason the U. S. must export less natural gas, lest it contribute to a crisis that, quote, jeopardizes our planet and our people, unquote.
[00:00:42] But policy analysts and concerned citizens alike must now examine the question whether a reduction in future natural gas exports. will actually equate to less global greenhouse gas production. Beyond the long term effects on the climate, what will be the more immediate effects on the U. S. economy, its growth in energy costs, and on our international trading partners, who have begun to rely on U.S. LNG exports? And as the November presidential election approaches, how will American voters respond to such executive actions if they perceive a negligible effect on climate, but a substantial cost to the U. S. economy and those of its allies? My guest today is energy and environmental policy expert and senior fellow at the American Enterprise Institute, Dr.
[00:01:26] Benjamin Zeiger. Dr. Zeiger has written extensively on U. S. energy and has testified before Congress on matters relating to the effects of energy laws and regulations on production and the environment. He will share with us his views on the merits of the President’s decision to pause approval of future LNG exports, including its likely effects on our economy, and offer his insights.
[00:01:47] On whether politics rather than science may be the primary driver of this executive order. When I return, I’ll be joined by AEI Senior Fellow, Dr. Benjamin Zeicher. Okay, we’re back. This is Hubwonk. I’m Joe Selvaggi, and I’m now pleased to be joined by Senior Fellow at the American Enterprise Institute, Dr.
[00:02:06] Benjamin Zeicher. Welcome to Hubwonk, Ben. Thank you very much. All right, this is your first time as a guest on Hubwonk, on our podcast. I wanted to have you on the podcast because you write extensively for AEI on matters concerning energy and environmental policy. You’ve also testified before Congress and have written about the President’s recent memo.
[00:02:25] on the intended pause in approval of liquid, liquefied natural gas exports. Let’s start at the beginning for our listeners who know nothing about this memo, this executive order. on January 26th, what did the president announce in his statement to pause LNG export approvals?
[00:02:40] Dr. Benjamin Zycher: what he announced was that moving forward, new applications for export facilities. For the export of liquefied natural gas will be subject to a climate change test in addition to the public interest test that is spelled out in the Natural Gas Act of 1938, which under which, the Energy Department, and the Federal Energy Regulatory Commission, have responsibilities for approving proposed LNG export facilities.
[00:03:10] And the entire, justification in President Biden’s recent, announced pause was because of the supposed climate crisis. And the effect of LNG exports on climate phenomenon moving forward. That was the rationale.
[00:03:29] Joe Selvaggi: So I want to quote from the memo. again, the president may, live in a different world than I do, but I’m going to read it for our listeners and see which, if they live in the president’s world.
[00:03:37] This is the first. Paragraph of his, executive order, quote, In every corner of the country and the world, people are suffering the devastating toll of climate change. Historic hurricanes and floods wiping out homes, businesses, and houses of worship. Wildfires destroying whole neighborhoods and forcing families to leave their communities behind.
[00:03:53] Record temperatures affecting the lives and livelihoods of millions of Americans, especially the most vulnerable, unquote. So clearly the president thinks, the world is, already being devastated by climate change. So I want to, talk about, The implications of this pause on exporting LNG both to the economy and to the climate.
[00:04:11] So let’s start with helping our listeners understand what are our current, export, capabilities. We know this to be a recent phenomenon. We discovered fracking, we discovered our, an abundance of natural gas. what does this pause limit as far as we’re concerned? we, we actually have surplus of natural gas.
[00:04:28] How much could we be exporting, is the question.
[00:04:30] Dr. Benjamin Zycher: in the immediate term, there’s no effect at all. Existing facilities will continue to export liquefied natural gas as they have the past several years. LNG exports are now,I can’t remember the number, but it’s something like, 9 percent or so.
[00:04:51] Of U. S. natural gas production, and that is expected to rise, in the absence of this executive order, from, Mr. Biden. the issue, is, what if, regardless of what you believe about, whether or not there’s a crisis caused by increasing atmospheric concentrations of greenhouse gasses.
[00:05:10] Just as an aside, there’s not much evidence of that. But regardless of what you believe, the issue is whether or not U. S. natural gas, exports. Would have much of an effect by the year 2100? And the answer is no, if you shut down not just, the exports of natural gas from future projects that are now being paused, but all U.
[00:05:31] S. natural gas exports, and if you assume there would be no increase In, no substitution of foreign natural gas or foreign coal, et cetera, in place of U. S. natural gas exports. The, using the Environmental Production Agency Climate Model, the effect on global temperatures in the year 2100, under mainstream assumptions would be something like 8 one thousandths of one degree, which obviously would not be detectable.
[00:05:59] Joe Selvaggi: So what you’re talking about, 8 one thousandths of one degree, if all the LNG production We’re paused now,
[00:06:05] Dr. Benjamin Zycher: if all, us LNG exports were shut down permanently.
[00:06:09] Joe Selvaggi: Yes. Yes. okay. So we’re talking about eight tens. Eight, eight. One. Thousandths of a degree. One degree, in 2100, which is.
[00:06:17] A fairly far distant off. we know that, for a time we were concerned about our energy, the need to import more energy than we produce. Now we’re a net exporter, is that right? and as a net exporter or a producer, what’s the effect of, let’s say, the natural gas boom on the U.
[00:06:34] S. economy? In other words, instead of having to ship it in the form of oil from, say, Saudi Arabia or wherever, we All this natural gas being domestically produced. What is the, let’s just start with the effect on the national economy. Do you have any sense of how big our industry is?
[00:06:49] Dr. Benjamin Zycher: what people, I think, need to understand is that fossil fuels are one important form of national wealth.
[00:06:55] And to the extent that production of it increases efficiently, then national wealth increases, and that wealth is shared across the economy among, producers and workers and others as an outcome of competitive market forces. so with the technological revolution in natural gas and oil production over the last 20 or so years, national wealth is greater.
[00:07:21] GDP is higher. GDP growth is greater. There’s more employment. the, virtually everyone is better off as a result of tax revenues go up for local and state governments. Virtually everyone is better off as a result of this increase in national wealth. And the anti fossil fuel ideological campaign Has effects that are just the reverse of that.
[00:07:44] And that is very unfortunate.
[00:07:46] Joe Selvaggi: So let’s put a finer point on this. you’re saying that I think that’s a very good way to look at this. if we were sitting on a mountain of gold, it would be national wealth. If we’re sitting on a mountain of natural gas, it also is natural wealth.
[00:07:55] We, we think about in terms of who’s making money and I don’t know what. What images are conjured in our listeners minds? They might be thinking of wealthy oil barons. But instead, we’re talking about people who are doing the extraction of the natural gas. these are in the heartland of the U.
[00:08:08] S. Lots of high paying jobs. where does all this wealth lie? I’m just talking about the production. And then we can even talk about, of course, Cheap or cheaper gas is an input to everything else, meaning, everything we consume is produced with the help of energy, which
[00:08:23] The boom
[00:08:24] Dr. Benjamin Zycher: in natural gas production has taken place in Pennsylvania, Ohio, West Virginia, Texas, New Mexico to a degree, North Dakota, and other places and when to say that Oil barons, whatever that means, are getting rich is this, is merely to say that investors in these technologies and investors in these exploration and production activities get rewarded by market forces, as do workers in the oil patch or oil fields, as do state and local governments, as do others who contribute to this increase in national wealth as driven by competitive market forces.
[00:09:09] And so it’s not only your oil barons who profit and they’re, the fact that they profit is perfectly justified. They’re making investments and they’re taking risks and,and so the market forces are rewarding them for that just as they reward workers and others involved in this increased production of national wealth.
[00:09:28] Joe Selvaggi: Indeed, and of course we’re talking about the supply, the reward to supply. You produce something people want and you get rewarded financially, but all of us are also consumers. So everything we consume is really driven by, by, energy prices, whether it’s, avocados that we eat or technology we use, we’re really all the beneficiaries of cheaper energy.
[00:09:47] Is it fair to say that Okay. With cheaper energy, everything we consume, everything we buy, everything we use is fundamentally going to be cheaper with less expensive energy inputs.
[00:09:56] Dr. Benjamin Zycher: Yeah, many things will be cheaper, not everything, but many things, perhaps even most things, meaning most consumer personal consumption expenditures will go down as a result of cheaper energy to the extent that energy is an input in the production of a vast array of Goods and services, some more than others, and that’s certainly true, yes.
[00:10:19] Consumers benefit, sure.
[00:10:21] Joe Selvaggi: And if we were to take the extreme and say, okay, look, we’re going to have a war on natural gas. We don’t think it, though it’s better than coal, it’s still not wind and, and solar. so we’re going to try to ban that. What would you think would be the effect of having less or minimizing or trying to even go after domestic and natural gas production.
[00:10:38] what would we look like? What would the world look like or the U. S. look like if we had less natural gas production? Yeah,
[00:10:44] Dr. Benjamin Zycher: everything would be, many things would be more expensive. Power production would be much more expensive and much less reliable. What I think a lot of people don’t understand is that an electric power system, primarily depending on wind and solar output, cannot work simply as a matter of electrical engineering without massive backup generators, powered by typically natural gas.
[00:11:14] in the form of natural gas turbines, it simply can’t work. Simply, again, simply as a matter of electrical engineering. The economy will be poorer, wages will be lower, the economy will be smaller, GDP growth will be smaller. It would be, not a very not as wealthy a society as otherwise would be the case.
[00:11:34] With less ability to invest in environmental protection and all the rest.
[00:11:37] Joe Selvaggi: What you’re saying is that we’d all be poor. The products we buy might be more expensive. So that would be also bad. our GDP collectively would be less and we don’t have to get into this, but of course, our grid, our, electrical system that if we plug in our cars, it’s going to rely on electricity or we plug in our guests, our electric stove, it’s going to be.
[00:11:56] on the electric grid, if we take away natural gas, it becomes fundamentally more fragile, because then we’re relying on the whims of
[00:12:02] Dr. Benjamin Zycher: The point you’re making, actually, let me just offer one or two sentences on that. The Environmental Protection Agency has promulgated proposed rules on both what the power sector should look like and what the ground transportation system should look like.
[00:12:18] system should look like. They’re trying to force a shift toward more, much more wind and solar power generation and a shift toward much more, many more electric vehicles and many fewer, conventional internal combustion engine driven vehicles. EPA’s right hand doesn’t know what its left hand is doing and the two proposed sets of rules are not compatible.
[00:12:46] And I think a
[00:12:50] The expansion of wind and solar power, as envisioned in the EPA proposed regulations, is not consistent with the expansion of electric vehicle fleet, as envisioned in other EPA proposed rules, and at some point, there’s going to have to be a reckoning between those two sets of parameters.
[00:13:14] Joe Selvaggi: Okay. We’ve talked about what happens domestically, but really this conversation should be about the exports and what happens to that surplus natural gas that we choose to sell on the international market.
[00:13:24] Right now, who are the current consumers? You said it’s a nine percent of the natural gas that we produce is exported. Where does that go?
[00:13:31] Dr. Benjamin Zycher: most, more than half of it goes to Europe as a replacement for Russian natural gas. It was about half of natural gas used by the European Union, only three years ago.
[00:13:46] It is now down to less than a quarter and, U. S. natural, liquefied natural gas exports, heavily go to Europe. A very substantial amount also goes to Asia, Japan and Korea and China and others. And a small amount goes to South America, in particular Brazil and, and Argentina. But for the most part.
[00:14:08] U. S. natural gas exports go to Europe and to Asia, Europe in particular.
[00:14:16] Joe Selvaggi: And our careful listeners will say, okay, why does a shift away from Russian gas? And towards U. S. natural gas happened three years ago, it seems like a substitution, one for one, where Russia is exporting less and we’re exporting more to Right,
[00:14:30] Dr. Benjamin Zycher: there was the Ukraine invasion, there was the shutdown of, Nord Stream, the Nord Stream 1 pipeline, and all the geo-political events that took place.
[00:14:41] in the, in the wake of the Russian invasion of Ukraine and, the Europeans in particular, recognized that Russian gas is unreliable or had become even more unreliable than was previously the case. And, and I think, that generated a shift, toward, the use of U. S., natural gas, particularly after Nord Stream 1 was shut down.
[00:15:07] Joe Selvaggi: again, I don’t want to put words in your mouth, but for those, energy users in Western Europe who, who were at the mercy, perhaps, of Russian natural gas, If the U. S. weren’t there to substitute their natural gas for Russia, if we, in a sense, had banned exports entirely long ago, really, Europe would face either going dark or cold, or, submitting to the whim of Russia.
[00:15:32] Is that saying too much?
[00:15:35] Dr. Benjamin Zycher: No, I don’t think so. Prices would be higher. There would be a shift toward other suppliers of natural gas, the Australians. Qatar, perhaps others as well, but, there might be a return toward coal fire generation, and some people would be going coal, yes, that is certainly true.
[00:15:54] Europe would be, without US LNG exports, the European energy situation would be a good deal less favorable. The problem, of course, is that instead of now facing unreliability from Russia, The Europeans now are facing increasing unreliability from America because of this executive order issued by Mr.
[00:16:20] Biden.
[00:16:22] Joe Selvaggi: So we’ve talked about, of course, the effect that domestically on limiting, if we were to limit natural gas production here, if we limit exports, which we are doing, we talked about all the negative You know, follow on of having limits on supply here in the U. S., if we were to, or as we are doing now, if we’re limiting a supply to below what the demand is, which by its nature we are, what does that say for prices, globally, and ultimately, let’s say, global inflation, meaning if the input, if energy is an input to everything we buy, all every European product, every global product we buy, doesn’t essentially the world become a little more expensive, both global.
[00:16:58] For international consumers, but also for American consumers who buy those products.
[00:17:02] Dr. Benjamin Zycher: Yeah, I’d be a little careful about that. rise in energy prices, not really inflation. that, that gets a bit technical, but it’s really not. cause there would be exchange rate effects and other impacts that get complicated and they’re difficult to trace through.
[00:17:16] It’s certainly the case though, that energy would become more expensive. the economies would become smaller. and all of the adverse effects that we could expect from more expensive energy will, will be observed or would be observed if, in the absence of this Biden executive order. The Biden executive order has increased uncertainty, has made investment riskier.
[00:17:40] And it will have long term effects which are not salutary.
[00:17:44] Joe Selvaggi: I want to, again, pivot then back to the U. S., and forgive me if I’m pointing this a little too hard because, frankly , I’m trying to understand. There are those who say this is a terrific idea for U. S. consumers of natural gas, which is to say, if we’re currently sending away 9%, and you mentioned earlier in the show, we’re on track to export even more.
[00:18:02] If we say, look, enough is enough, we’re going to keep our natural gas, we’re going to keep it here. Wouldn’t the rules of supply and demand simply say if we’ve got more natural gas for ourselves rather than export it. Doesn’t that, wouldn’t that mean that surplus would mean lower prices for the gas we produce?
[00:18:16] Dr. Benjamin Zycher: Yeah, that, that’s a commonly held fallacy. you might get a decrease in U. S. natural gas prices in the immediate term. I even doubt that. But over time, you’re going to get an increase in U. S. natural gas prices because investment incentives will be weakened. You’ll get less investment in the discovery and production of natural gas.
[00:18:39] Over time, you’ll get less production, therefore reduction in supply conditions and higher prices. It’s simply that. There are no free lunches. That is simply, the case. It’s a further matter that for technical reasons, that I’m not going to bore the audience with. Because natural gas or fossil fuels generally are not like cut flowers that have to be consumed today.
[00:19:03] Fossil fuels can be consumed either today or next year, and if the market thinks the prices are going to rise next year, they’re going to rise now. and so I think that even the immediate effect might not be much of a decrease at all in, in natural gas prices. look at what happened in 2015.
[00:19:23] We ended the export ban on crude oil. And crude oil prices fell. They didn’t, our crude oil prices fell internationally. They didn’t go up as a result, or domestically because of the, renewed export of U. S. crude
[00:19:40] Joe Selvaggi: oil. What explains that phenomena? Why is it that let’s say having, An unconstrained demand, meaning if the world can compete for our oil and gas, why doesn’t that mean in the long run prices go down?
[00:19:51] Is it because it’s such a profound disincentive for additional production exploration? Is it of that nature?
[00:19:59] Dr. Benjamin Zycher: Well, the efforts by regulation or by statute to limit the export of natural gas will reduce investment incentives. It’s just that simple. And the reduction in investment incentives, riskier investment, and all the rest, will reduce production over time in the medium and long terms, and raise prices.
[00:20:24] Other factors held constant. It just really is that simple. And, so people hoping for a great boon for natural gas consumers in the U.S. as a, as an outcome of natural gas export then, I think are not being very realistic.
[00:20:43] Joe Selvaggi: Let’s turn back then to the whole pretext of this whole executive order, which is to protect the climate.
[00:20:49] we’ve talked about it earlier in the show, but let’s say, okay, if we’re going to take nothing else away from this conversation by limiting exports, the knock on effect is Less natural gas will be consumed. Less research to produce more natural gas will be produced so we’re going to have less natural gas in theory if we make it harder for people to consume it.
[00:21:09] What do you think, given that the climate is the primary concern here and we’re putting the needs of the climate ahead of perhaps obvious financial or international concerns, what do you think the effect of reducing natural gas export and thereby consumption due for the climate. And again, let me say, baked into my question is the assumption that natural gas is a terrific transitional fuel from, let’s say, dirty coal towards, let’s say, more efficient, whatever, unicorn farm we’re going to harness.
[00:21:41] let’s say it’s the best of all fossil fuel alternatives. What do you think the effect will be for having less natural gas?
[00:21:50] Dr. Benjamin Zycher: You wind up with less energy be consumed in total. Within the energy sector, you get more coal use. Which emits roughly double, per BTU, the amount of greenhouse gasses emitted by natural gas consumption.
[00:22:06] I don’t particularly think that’s very important, but that is the reality. You get foreign natural gas substituting for U. S. natural gas. There’s really nothing positive to say about this. It’s a pure political sop by the Biden administration to the environmental left, and they’re not really trying to hide that reality at all.
[00:22:27] And, the climate justification, I think, is really little more than a fig leaf.
[00:22:35] Joe Selvaggi: for those listeners who are, perhaps justifiably concerned about the climate, you’re saying that largely because, A, LNG doesn’t have much effect on climate in general, B, the substitution of coal for, the LNG that’s not produced, May, ironically, harm the climate more than LNG would have, and also, the effect, if any, is so negligible, eight one thousandths of a degree over, between now and 2100, that it’s a meaningless effort.
[00:23:03] So let’s stipulate all that. If it is the fact, again, in this conversation, we said it’s going to have a detrimental effect on the U. S. economy, meaning those jobs that could have been produced by LNG producers and exporters. the cost of inputs of energy, if energy becomes more expensive, it’ll slow down the economy, thereby jobs and all.
[00:23:20] We talked about, it’s the heartland, the Texas and the Pennsylvania’s and the Ohio’s that are going to be hurt. and it has, we’ve agreed there’s very little effect on climate and it may have a detrimental effect on our allies overseas who may rely on U. S. natural gas, as opposed to, some of our unsavory, global participants like, Russia.
[00:23:38] Why would the president choose to do this action, and frankly, in the middle of a presidential election year, if it’s so patently detrimental to both the economy, the, the global stage and the climate? Well,
[00:23:54] Dr. Benjamin Zycher: again, as I said, this is a SOP to the environmental left, and for reasons that I do not understand, the administration seems to believe that the environmental left is a sufficiently important component of its political coalition, that it needs to do this work.
[00:24:19] Keep them inside the tent. We can, I’m not a political expert, we can agree or disagree with that perception, but that seems to be what’s going on. the administration in the various statements it issued a couple weeks ago on this executive order, made no attempt to hide the fact that this is an appeal to the environmental left.
[00:24:41] Them, their applause for this, this, this executive order, et cetera. there’s nothing else to be said in favor of it. And, and, I cannot, I don’t understand what they’re thinking, but that seems to be what it is that they believe the environmental, again, the environmental left is an important part of the coalition and they need to do this to keep them, keep their support
[00:25:04] Joe Selvaggi: firm.
[00:25:05] I want to quote from the memo one more time from the last paragraph. I think it validates your position on why the president may have done this. I’ll quote, quote. We will heed the calls of young people and frontline communities who are using their voices to demand action from those of us who With the power to act, and as America has always done, we will turn crisis into opportunity, creating clean energy jobs, improving quality of life, and building a more hopeful future for our children.
[00:25:33] Do you see anything in this action that creates clean energy jobs, improves quality of life, or builds a more hopeful future? Meaning, if our economy is hobbled by this, how is it going to improve the quality of life? Do you have a sense?
[00:25:48] Dr. Benjamin Zycher: There is no positive dimension to any of this. None.
[00:25:53] Joe Selvaggi: You’re on the front lines of these debates, both in the intellectual space, but also what you testify in front of Congress.
[00:25:58] It seems to me as a lay person, as an onlooker, if the climate is this existential crisis that all many claim it is, do you hear, interest in, in, let’s say alternatives like nuclear? Which, again, I’ve talked about many times on this show. I spent a fair amount of time in the Navy where they had nuclear power plants on, Tin cans in the middle of an ocean run by 19 year olds and we’ve been doing that for 50 years, without incident. What is it, why aren’t we having memos about doubling down on nuclear instead of talking about attacking relatively clean, safe, natural gas?
[00:26:30] Dr. Benjamin Zycher: I think I may differ from you a bit on this.
[00:26:33] I don’t believe new nuclear power stations are economic or competitive with natural gas at, even at five dollars per million BTUs, which is roughly a thousand cubic feet, and prices now are, I think, under three dollars per, for gas under, for a thousand cubic feet or a million BTUs. so I don’t think nuclear power is competitive, frankly.
[00:26:57] there are other
[00:26:59] artificial constraints on the expansion of nuclear power, the wind production tax credit. For complicated reasons that I won’t, I don’t think we have time to get into, which makes it much more difficult to operate nuclear power plants, because the wind producers have incentives to lower their prices to very low levels knowing that the federal government through the production tax credit will make them whole.
[00:27:23] and there are a lot of artificial constraints like that, but I don’t really believe that nuclear power is competitive. Under current market conditions, natural gas power production clearly is competitive and I think that an effort to substitute wind and solar power in place of natural gas, electricity production is seriously misguided.
[00:27:45] Joe Selvaggi: Indeed. I think we may be talking past each other. I think if I take off my, economist hat and put on my, passionate climate concern hat and say if the only thing you worry about is the climate, and you’re convinced that fossil fuels are the reason the climate is warming, and the warming of the climate is an existential threat to mankind, nuclear makes sense, right? It’s not financial sense but it
[00:28:08] Dr. Benjamin Zycher: makes Under that set of assumptions, that is certainly true. whether I believe those assumptions is, dubious, but we can get into that some other time,
[00:28:16] Joe Selvaggi: Fair enough. I want to bring our, all of our listeners along and say, okay, look it strikes me though, then again, if you have, you essentially have a war on natural gas, and you are trying to steer the economy towards electrification and reliance on renewables, wind and air wind and, solar.
[00:28:33] It seems to me more, less concerned about the environment. Again, if you had concern about the environment, nuclear might make sense, but more anti growth, anti sort of human activity. It seems like it is naturally, like a wet blanket on potential growth, both here and abroad. Do you, am I going too far with that sort of observation?
[00:28:51] Dr. Benjamin Zycher: No the anti fossil fuel ideology is fundamentally anti human. If you really believe that fossil fuels are evil, then the things that increase the demand for fossil fuels also are evil. Among those are investments in human capital, education, training, et cetera, as people become more highly educated.
[00:29:12] As they become more skilled, they demand more fossil fuels. It’s that simple. And so if you really don’t like fossil fuels, then you don’t like education and training and health care and all the things that lead people to demand more fossil fuels. I’ve been talking about this for years. For a short discussion that’s, you might look at one of my old essays, Springtime for the Rockefellers.
[00:29:34] Just Google my name and Springtime for the Rockefellers and you’ll, it’ll come up. Yeah, the anti fossil fuel ideology is fundamentally anti human and that is something I think we should not forget.
[00:29:47] Joe Selvaggi: Indeed. you’ve peaked our listeners’ interest in your work. they may disagree or, want to, engage with your arguments.
[00:29:53] Where can our listeners read more about your work, Ben?
[00:29:57] Dr. Benjamin Zycher: all they have to do really is go to aei American Enterprise Institute aei.org, uh, click on scholars and then navigate to my name and, if they’re having trouble sleeping, this stuff is ideal.
[00:30:12] Joe Selvaggi: Your, uh, soporific missives are, are useful for those of us who have trouble sleeping.
[00:30:16] Now, I actually find it quite interesting, and of course this is a lively debate, and I think, very rarely do we see such a naked attempt to essentially hobble, the American economy, really for political reasons. it’s, in my estimation, a, a real tragedy, and it’s really not being covered very much by our international and local national press.
[00:30:36] Oh, I want to thank you for your time. This is your first visit. You’ve been a terrific guest. Thank you for joining me today on Hubwonk, Ben. Thank you
[00:30:43] Dr. Benjamin Zycher: very much indeed. Appreciate it.
[00:30:46] Joe Selvaggi: This has been another episode of Hubwonk. If you enjoyed today’s show, there are several ways to support Hubwonk and Pioneer Institute.
[00:30:52] It would be easier for you and better for us if you subscribed to Hubwonk on your iTunes podcatcher. It would help make it easier for others to find Hubwonk if you offer a five star rating or a favorable review. Of course, we’re grateful if you share Hubwonk with friends. If you have ideas or comments or suggestions for me about future episode topics, you’re welcome to email me at hubwonk@pioneerinstitute.org. Please join me next week for a new episode of Hubwonk.
Joe Selvaggi interviews Dr. Benjamin Zycher, a senior fellow at the American Enterprise Institute, on the impact of President Biden’s executive order to halt liquefied natural gas export approvals. They explore potential economic impacts, the response from trading partners, and the negligible effect on climate.
Guest:
Benjamin Zycher is a senior fellow at the American Enterprise Institute (AEI), where he works on energy and environmental policy. Before joining AEI, Zycher conducted a broad research program in his public policy research firm and was an intelligence community associate of the Office of Economic Analysis, Bureau of Intelligence and Research, US Department of State. He is a former senior economist at the RAND Corporation, a former adjunct professor of economics at the University of California, Los Angeles (UCLA) and at the California State University Channel Islands, and is a former senior economist at the Jet Propulsion Laboratory, California Institute of Technology. He served as a senior staff economist for the President’s Council of Economic Advisers, with responsibility for energy and environmental policy issues. Zycher has a doctorate in economics from UCLA, a Masters in Public Policy from the University of California, Berkeley, and a Bachelor of Arts in political science from UCLA.
The Commonwealth’s tax collections continue to slide, according to the latest numbers released from the Department of Revenue. January revenue collections totaled $3.594 billion, $268 million below what the state collected in January 2023, and short of the revised benchmark by $263 million. Year-to-date revenue is $21.46 billion, or $212 million less that year-to-date revenue in 2023 and below the Healey/Driscoll administration’s revised benchmark by $263 million — a benchmark that had already been revised downward by $1 billion.
All categories of tax revenue were lower than expected. Regular sales tax and motor vehicle excise were essentially flat, while corporate and business taxes are 8.1 percent below estimates, and withholding is down by 3.1 percent. The slide was most pronounced in individual estimated payments, which are 16.6 percent less than anticipated. This category of income includes interest, dividend, and other nonwage income typically paid by high-income earners.
While it’s too early to determine whether the revenue shortfall is the result of out-migration, 25 states have reduced income tax rates since 2021, according to the Tax Foundation, while only three raised them — California, New York, and Massachusetts. It is worth noting that the revenue decline comes on the heels of a new surtax on incomes exceeding over $1 million, advanced by lawmakers and narrowly approved by Massachusetts voters last November. It is occurring at a time of low unemployment.
Most other states are experiencing revenue growth. Ascertaining the cause of the state’s revenue slide and taking steps to reverse this trend must be a top priority. Pioneer will continue to track revenues and out-migration patterns to fully assess the decline and provide solutions to effect fiscal stability.
But the state not only has a revenue problem; as noted in a Pioneer post last week, it has a spending problem. The Massachusetts state government must tighten its belt and live within its means by reducing FY2025 spending to account for this new fiscal reality. The days of fiscal surpluses, unprecedented increases in year-over-year spending, and flowing federal aid have come to an end.
“She’s a good girl. She helps me a lot. She has big, big dreams. I don’t have the money, but she has big dreams. I hope she’s going to get everything, but she works so hard. She works so hard in school.”
“Our family is needing to make some really big sacrifices because we believe this is important, and so, we’re basically going to do whatever it takes… Sometimes we look at each other and go ‘I don’t know if I can do it again another month…’”
“A lot of the families have to sacrifice and work multiple jobs… And just scraping together enough money to just make tuition, just the basics.”
“It is discriminatory, that parents who want to choose an alternative to public school for their children, would not in any way receive any compensation for that, whether it be tax credit, whether it be a voucher…”
In the 1840s, nativist movement leaders formed official political parties and local chapters of the national Native American Party (later the American Party), although they continued to be commonly known as the Know-Nothing Party. Politicians sought to insert provisions into state constitutions against Catholics who refused to renounce the pope. The Know-Nothing movement brought bigotry and hatred to a new level of violence and organization.
The party’s legacy endured in the post-Civil War era, with laws and constitutional amendments it supported, still today severely limiting parents’ educational choices. A federal constitutional amendment was proposed by Speaker of the House James Blaine prohibiting money raised by taxation in any State to be under the control of any religious sect; nor shall any money so raised or lands so devoted be divided between religious sects or denominations. These were then named the Blaine Amendments of 1875.
in recent decades, often in response to challenges to school choice programs, the U.S. Supreme Court has demonstrated great interest in examining the issues of educational alternatives and attempts limit parental options. Massachusetts plays a key role in this debate. The Bay State was a key center of the Know-Nothing movement and has the oldest version of Anti-Aid Amendments in the nation, as well as a second such amendment approved in 1917. Two-fifths of Massachusetts residents are Catholic, and its Catholic schools outperform the state’s public schools, which are the best in the nation.
This week on The Learning Curve, guest co-hosts Prof. Albert Cheng of the University of Arkansas and Alisha Searcy interview University of Tennessee Prof. Robert Norrell. He explores Booker T. Washington’s early life in slavery, his transformative leadership at Tuskegee Institute amidst Jim Crow racism, and his advocacy for vocational education as a means for racial uplift. Prof. Norrell also discusses Washington’s 1901 autobiography, Up From Slavery; his controversial White House dinner with President Theodore Roosevelt; and his often overlooked legacy following the activism of the 1960s Civil Rights era. In closing, Prof. Norrell reads a passage from his book Up from History: The Life of Booker T. Washington.
Stories of the Week: Prof. Cheng discusses a Forbes article on education and workforce legislative trends for 2024; Alisha analyzes a story from The Hill on the crisis in STEM and data education.
Guest:
Robert Norrell is Professor and Bernadotte Schmitt Chair of Excellence with the Department of History at the University of Tennessee. In 2015, Norrell published Alex Haley and the Books that Changed a Nation. In 2009, his biography, Up from History: the Life of Booker T. Washington, was widely acclaimed. In 2005, he published a well-reviewed interpretive synthesis of race relations in the twentieth-century United States, The House I Live In: Race in the American Century, and his book Reaping the Whirlwind: The Civil Rights Movement in Tuskegee won the Robert F. Kennedy Book Award in 1986. He has published ten other books on the history of the American South and is the author of 25 scholarly articles. Professor Norrell has given invited lectures at Heidelberg University, Oxford University, the University of Cambridge, the University of Tübingen, and several other universities.
Tweet of the Week:
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Hubwonk Smothering Gas Exports: President Sides with Environmentalists Over Environment
[00:00:00] Joe Selvaggi: This is Hubwonk. I’m Joe Selvaggi. Welcome to Hubwonk, a podcast of Pioneer Institute, a think tank in Boston. On January 26th, President Biden issued an executive order announcing plans to pause all approvals of liquefied natural gas exports, citing the administration’s goals of lowering energy costs, creating jobs, and safeguarding health as its intended objectives.
[00:00:25] The statement begins by asserting that, quote, in every corner of the country and the world, people are suffering the devastating toll of climate change, unquote, as the reason the U. S. must export less natural gas, lest it contribute to a crisis that, quote, jeopardizes our planet and our people, unquote.
[00:00:42] But policy analysts and concerned citizens alike must now examine the question whether a reduction in future natural gas exports. will actually equate to less global greenhouse gas production. Beyond the long term effects on the climate, what will be the more immediate effects on the U. S. economy, its growth in energy costs, and on our international trading partners, who have begun to rely on U.S. LNG exports? And as the November presidential election approaches, how will American voters respond to such executive actions if they perceive a negligible effect on climate, but a substantial cost to the U. S. economy and those of its allies? My guest today is energy and environmental policy expert and senior fellow at the American Enterprise Institute, Dr.
[00:01:26] Benjamin Zeiger. Dr. Zeiger has written extensively on U. S. energy and has testified before Congress on matters relating to the effects of energy laws and regulations on production and the environment. He will share with us his views on the merits of the President’s decision to pause approval of future LNG exports, including its likely effects on our economy, and offer his insights.
[00:01:47] On whether politics rather than science may be the primary driver of this executive order. When I return, I’ll be joined by AEI Senior Fellow, Dr. Benjamin Zeicher. Okay, we’re back. This is Hubwonk. I’m Joe Selvaggi, and I’m now pleased to be joined by Senior Fellow at the American Enterprise Institute, Dr.
[00:02:06] Benjamin Zeicher. Welcome to Hubwonk, Ben. Thank you very much. All right, this is your first time as a guest on Hubwonk, on our podcast. I wanted to have you on the podcast because you write extensively for AEI on matters concerning energy and environmental policy. You’ve also testified before Congress and have written about the President’s recent memo.
[00:02:25] on the intended pause in approval of liquid, liquefied natural gas exports. Let’s start at the beginning for our listeners who know nothing about this memo, this executive order. on January 26th, what did the president announce in his statement to pause LNG export approvals?
[00:02:40] Dr. Benjamin Zycher: what he announced was that moving forward, new applications for export facilities. For the export of liquefied natural gas will be subject to a climate change test in addition to the public interest test that is spelled out in the Natural Gas Act of 1938, which under which, the Energy Department, and the Federal Energy Regulatory Commission, have responsibilities for approving proposed LNG export facilities.
[00:03:10] And the entire, justification in President Biden’s recent, announced pause was because of the supposed climate crisis. And the effect of LNG exports on climate phenomenon moving forward. That was the rationale.
[00:03:29] Joe Selvaggi: So I want to quote from the memo. again, the president may, live in a different world than I do, but I’m going to read it for our listeners and see which, if they live in the president’s world.
[00:03:37] This is the first. Paragraph of his, executive order, quote, In every corner of the country and the world, people are suffering the devastating toll of climate change. Historic hurricanes and floods wiping out homes, businesses, and houses of worship. Wildfires destroying whole neighborhoods and forcing families to leave their communities behind.
[00:03:53] Record temperatures affecting the lives and livelihoods of millions of Americans, especially the most vulnerable, unquote. So clearly the president thinks, the world is, already being devastated by climate change. So I want to, talk about, The implications of this pause on exporting LNG both to the economy and to the climate.
[00:04:11] So let’s start with helping our listeners understand what are our current, export, capabilities. We know this to be a recent phenomenon. We discovered fracking, we discovered our, an abundance of natural gas. what does this pause limit as far as we’re concerned? we, we actually have surplus of natural gas.
[00:04:28] How much could we be exporting, is the question.
[00:04:30] Dr. Benjamin Zycher: in the immediate term, there’s no effect at all. Existing facilities will continue to export liquefied natural gas as they have the past several years. LNG exports are now,I can’t remember the number, but it’s something like, 9 percent or so.
[00:04:51] Of U. S. natural gas production, and that is expected to rise, in the absence of this executive order, from, Mr. Biden. the issue, is, what if, regardless of what you believe about, whether or not there’s a crisis caused by increasing atmospheric concentrations of greenhouse gasses.
[00:05:10] Just as an aside, there’s not much evidence of that. But regardless of what you believe, the issue is whether or not U. S. natural gas, exports. Would have much of an effect by the year 2100? And the answer is no, if you shut down not just, the exports of natural gas from future projects that are now being paused, but all U.
[00:05:31] S. natural gas exports, and if you assume there would be no increase In, no substitution of foreign natural gas or foreign coal, et cetera, in place of U. S. natural gas exports. The, using the Environmental Production Agency Climate Model, the effect on global temperatures in the year 2100, under mainstream assumptions would be something like 8 one thousandths of one degree, which obviously would not be detectable.
[00:05:59] Joe Selvaggi: So what you’re talking about, 8 one thousandths of one degree, if all the LNG production We’re paused now,
[00:06:05] Dr. Benjamin Zycher: if all, us LNG exports were shut down permanently.
[00:06:09] Joe Selvaggi: Yes. Yes. okay. So we’re talking about eight tens. Eight, eight. One. Thousandths of a degree. One degree, in 2100, which is.
[00:06:17] A fairly far distant off. we know that, for a time we were concerned about our energy, the need to import more energy than we produce. Now we’re a net exporter, is that right? and as a net exporter or a producer, what’s the effect of, let’s say, the natural gas boom on the U.
[00:06:34] S. economy? In other words, instead of having to ship it in the form of oil from, say, Saudi Arabia or wherever, we All this natural gas being domestically produced. What is the, let’s just start with the effect on the national economy. Do you have any sense of how big our industry is?
[00:06:49] Dr. Benjamin Zycher: what people, I think, need to understand is that fossil fuels are one important form of national wealth.
[00:06:55] And to the extent that production of it increases efficiently, then national wealth increases, and that wealth is shared across the economy among, producers and workers and others as an outcome of competitive market forces. so with the technological revolution in natural gas and oil production over the last 20 or so years, national wealth is greater.
[00:07:21] GDP is higher. GDP growth is greater. There’s more employment. the, virtually everyone is better off as a result of tax revenues go up for local and state governments. Virtually everyone is better off as a result of this increase in national wealth. And the anti fossil fuel ideological campaign Has effects that are just the reverse of that.
[00:07:44] And that is very unfortunate.
[00:07:46] Joe Selvaggi: So let’s put a finer point on this. you’re saying that I think that’s a very good way to look at this. if we were sitting on a mountain of gold, it would be national wealth. If we’re sitting on a mountain of natural gas, it also is natural wealth.
[00:07:55] We, we think about in terms of who’s making money and I don’t know what. What images are conjured in our listeners minds? They might be thinking of wealthy oil barons. But instead, we’re talking about people who are doing the extraction of the natural gas. these are in the heartland of the U.
[00:08:08] S. Lots of high paying jobs. where does all this wealth lie? I’m just talking about the production. And then we can even talk about, of course, Cheap or cheaper gas is an input to everything else, meaning, everything we consume is produced with the help of energy, which
[00:08:23] The boom
[00:08:24] Dr. Benjamin Zycher: in natural gas production has taken place in Pennsylvania, Ohio, West Virginia, Texas, New Mexico to a degree, North Dakota, and other places and when to say that Oil barons, whatever that means, are getting rich is this, is merely to say that investors in these technologies and investors in these exploration and production activities get rewarded by market forces, as do workers in the oil patch or oil fields, as do state and local governments, as do others who contribute to this increase in national wealth as driven by competitive market forces.
[00:09:09] And so it’s not only your oil barons who profit and they’re, the fact that they profit is perfectly justified. They’re making investments and they’re taking risks and,and so the market forces are rewarding them for that just as they reward workers and others involved in this increased production of national wealth.
[00:09:28] Joe Selvaggi: Indeed, and of course we’re talking about the supply, the reward to supply. You produce something people want and you get rewarded financially, but all of us are also consumers. So everything we consume is really driven by, by, energy prices, whether it’s, avocados that we eat or technology we use, we’re really all the beneficiaries of cheaper energy.
[00:09:47] Is it fair to say that Okay. With cheaper energy, everything we consume, everything we buy, everything we use is fundamentally going to be cheaper with less expensive energy inputs.
[00:09:56] Dr. Benjamin Zycher: Yeah, many things will be cheaper, not everything, but many things, perhaps even most things, meaning most consumer personal consumption expenditures will go down as a result of cheaper energy to the extent that energy is an input in the production of a vast array of Goods and services, some more than others, and that’s certainly true, yes.
[00:10:19] Consumers benefit, sure.
[00:10:21] Joe Selvaggi: And if we were to take the extreme and say, okay, look, we’re going to have a war on natural gas. We don’t think it, though it’s better than coal, it’s still not wind and, and solar. so we’re going to try to ban that. What would you think would be the effect of having less or minimizing or trying to even go after domestic and natural gas production.
[00:10:38] what would we look like? What would the world look like or the U. S. look like if we had less natural gas production? Yeah,
[00:10:44] Dr. Benjamin Zycher: everything would be, many things would be more expensive. Power production would be much more expensive and much less reliable. What I think a lot of people don’t understand is that an electric power system, primarily depending on wind and solar output, cannot work simply as a matter of electrical engineering without massive backup generators, powered by typically natural gas.
[00:11:14] in the form of natural gas turbines, it simply can’t work. Simply, again, simply as a matter of electrical engineering. The economy will be poorer, wages will be lower, the economy will be smaller, GDP growth will be smaller. It would be, not a very not as wealthy a society as otherwise would be the case.
[00:11:34] With less ability to invest in environmental protection and all the rest.
[00:11:37] Joe Selvaggi: What you’re saying is that we’d all be poor. The products we buy might be more expensive. So that would be also bad. our GDP collectively would be less and we don’t have to get into this, but of course, our grid, our, electrical system that if we plug in our cars, it’s going to rely on electricity or we plug in our guests, our electric stove, it’s going to be.
[00:11:56] on the electric grid, if we take away natural gas, it becomes fundamentally more fragile, because then we’re relying on the whims of
[00:12:02] Dr. Benjamin Zycher: The point you’re making, actually, let me just offer one or two sentences on that. The Environmental Protection Agency has promulgated proposed rules on both what the power sector should look like and what the ground transportation system should look like.
[00:12:18] system should look like. They’re trying to force a shift toward more, much more wind and solar power generation and a shift toward much more, many more electric vehicles and many fewer, conventional internal combustion engine driven vehicles. EPA’s right hand doesn’t know what its left hand is doing and the two proposed sets of rules are not compatible.
[00:12:46] And I think a
[00:12:50] The expansion of wind and solar power, as envisioned in the EPA proposed regulations, is not consistent with the expansion of electric vehicle fleet, as envisioned in other EPA proposed rules, and at some point, there’s going to have to be a reckoning between those two sets of parameters.
[00:13:14] Joe Selvaggi: Okay. We’ve talked about what happens domestically, but really this conversation should be about the exports and what happens to that surplus natural gas that we choose to sell on the international market.
[00:13:24] Right now, who are the current consumers? You said it’s a nine percent of the natural gas that we produce is exported. Where does that go?
[00:13:31] Dr. Benjamin Zycher: most, more than half of it goes to Europe as a replacement for Russian natural gas. It was about half of natural gas used by the European Union, only three years ago.
[00:13:46] It is now down to less than a quarter and, U. S. natural, liquefied natural gas exports, heavily go to Europe. A very substantial amount also goes to Asia, Japan and Korea and China and others. And a small amount goes to South America, in particular Brazil and, and Argentina. But for the most part.
[00:14:08] U. S. natural gas exports go to Europe and to Asia, Europe in particular.
[00:14:16] Joe Selvaggi: And our careful listeners will say, okay, why does a shift away from Russian gas? And towards U. S. natural gas happened three years ago, it seems like a substitution, one for one, where Russia is exporting less and we’re exporting more to Right,
[00:14:30] Dr. Benjamin Zycher: there was the Ukraine invasion, there was the shutdown of, Nord Stream, the Nord Stream 1 pipeline, and all the geo-political events that took place.
[00:14:41] in the, in the wake of the Russian invasion of Ukraine and, the Europeans in particular, recognized that Russian gas is unreliable or had become even more unreliable than was previously the case. And, and I think, that generated a shift, toward, the use of U. S., natural gas, particularly after Nord Stream 1 was shut down.
[00:15:07] Joe Selvaggi: again, I don’t want to put words in your mouth, but for those, energy users in Western Europe who, who were at the mercy, perhaps, of Russian natural gas, If the U. S. weren’t there to substitute their natural gas for Russia, if we, in a sense, had banned exports entirely long ago, really, Europe would face either going dark or cold, or, submitting to the whim of Russia.
[00:15:32] Is that saying too much?
[00:15:35] Dr. Benjamin Zycher: No, I don’t think so. Prices would be higher. There would be a shift toward other suppliers of natural gas, the Australians. Qatar, perhaps others as well, but, there might be a return toward coal fire generation, and some people would be going coal, yes, that is certainly true.
[00:15:54] Europe would be, without US LNG exports, the European energy situation would be a good deal less favorable. The problem, of course, is that instead of now facing unreliability from Russia, The Europeans now are facing increasing unreliability from America because of this executive order issued by Mr.
[00:16:20] Biden.
[00:16:22] Joe Selvaggi: So we’ve talked about, of course, the effect that domestically on limiting, if we were to limit natural gas production here, if we limit exports, which we are doing, we talked about all the negative You know, follow on of having limits on supply here in the U. S., if we were to, or as we are doing now, if we’re limiting a supply to below what the demand is, which by its nature we are, what does that say for prices, globally, and ultimately, let’s say, global inflation, meaning if the input, if energy is an input to everything we buy, all every European product, every global product we buy, doesn’t essentially the world become a little more expensive, both global.
[00:16:58] For international consumers, but also for American consumers who buy those products.
[00:17:02] Dr. Benjamin Zycher: Yeah, I’d be a little careful about that. rise in energy prices, not really inflation. that, that gets a bit technical, but it’s really not. cause there would be exchange rate effects and other impacts that get complicated and they’re difficult to trace through.
[00:17:16] It’s certainly the case though, that energy would become more expensive. the economies would become smaller. and all of the adverse effects that we could expect from more expensive energy will, will be observed or would be observed if, in the absence of this Biden executive order. The Biden executive order has increased uncertainty, has made investment riskier.
[00:17:40] And it will have long term effects which are not salutary.
[00:17:44] Joe Selvaggi: I want to, again, pivot then back to the U. S., and forgive me if I’m pointing this a little too hard because, frankly , I’m trying to understand. There are those who say this is a terrific idea for U. S. consumers of natural gas, which is to say, if we’re currently sending away 9%, and you mentioned earlier in the show, we’re on track to export even more.
[00:18:02] If we say, look, enough is enough, we’re going to keep our natural gas, we’re going to keep it here. Wouldn’t the rules of supply and demand simply say if we’ve got more natural gas for ourselves rather than export it. Doesn’t that, wouldn’t that mean that surplus would mean lower prices for the gas we produce?
[00:18:16] Dr. Benjamin Zycher: Yeah, that, that’s a commonly held fallacy. you might get a decrease in U. S. natural gas prices in the immediate term. I even doubt that. But over time, you’re going to get an increase in U. S. natural gas prices because investment incentives will be weakened. You’ll get less investment in the discovery and production of natural gas.
[00:18:39] Over time, you’ll get less production, therefore reduction in supply conditions and higher prices. It’s simply that. There are no free lunches. That is simply, the case. It’s a further matter that for technical reasons, that I’m not going to bore the audience with. Because natural gas or fossil fuels generally are not like cut flowers that have to be consumed today.
[00:19:03] Fossil fuels can be consumed either today or next year, and if the market thinks the prices are going to rise next year, they’re going to rise now. and so I think that even the immediate effect might not be much of a decrease at all in, in natural gas prices. look at what happened in 2015.
[00:19:23] We ended the export ban on crude oil. And crude oil prices fell. They didn’t, our crude oil prices fell internationally. They didn’t go up as a result, or domestically because of the, renewed export of U. S. crude
[00:19:40] Joe Selvaggi: oil. What explains that phenomena? Why is it that let’s say having, An unconstrained demand, meaning if the world can compete for our oil and gas, why doesn’t that mean in the long run prices go down?
[00:19:51] Is it because it’s such a profound disincentive for additional production exploration? Is it of that nature?
[00:19:59] Dr. Benjamin Zycher: Well, the efforts by regulation or by statute to limit the export of natural gas will reduce investment incentives. It’s just that simple. And the reduction in investment incentives, riskier investment, and all the rest, will reduce production over time in the medium and long terms, and raise prices.
[00:20:24] Other factors held constant. It just really is that simple. And, so people hoping for a great boon for natural gas consumers in the U.S. as a, as an outcome of natural gas export then, I think are not being very realistic.
[00:20:43] Joe Selvaggi: Let’s turn back then to the whole pretext of this whole executive order, which is to protect the climate.
[00:20:49] we’ve talked about it earlier in the show, but let’s say, okay, if we’re going to take nothing else away from this conversation by limiting exports, the knock on effect is Less natural gas will be consumed. Less research to produce more natural gas will be produced so we’re going to have less natural gas in theory if we make it harder for people to consume it.
[00:21:09] What do you think, given that the climate is the primary concern here and we’re putting the needs of the climate ahead of perhaps obvious financial or international concerns, what do you think the effect of reducing natural gas export and thereby consumption due for the climate. And again, let me say, baked into my question is the assumption that natural gas is a terrific transitional fuel from, let’s say, dirty coal towards, let’s say, more efficient, whatever, unicorn farm we’re going to harness.
[00:21:41] let’s say it’s the best of all fossil fuel alternatives. What do you think the effect will be for having less natural gas?
[00:21:50] Dr. Benjamin Zycher: You wind up with less energy be consumed in total. Within the energy sector, you get more coal use. Which emits roughly double, per BTU, the amount of greenhouse gasses emitted by natural gas consumption.
[00:22:06] I don’t particularly think that’s very important, but that is the reality. You get foreign natural gas substituting for U. S. natural gas. There’s really nothing positive to say about this. It’s a pure political sop by the Biden administration to the environmental left, and they’re not really trying to hide that reality at all.
[00:22:27] And, the climate justification, I think, is really little more than a fig leaf.
[00:22:35] Joe Selvaggi: for those listeners who are, perhaps justifiably concerned about the climate, you’re saying that largely because, A, LNG doesn’t have much effect on climate in general, B, the substitution of coal for, the LNG that’s not produced, May, ironically, harm the climate more than LNG would have, and also, the effect, if any, is so negligible, eight one thousandths of a degree over, between now and 2100, that it’s a meaningless effort.
[00:23:03] So let’s stipulate all that. If it is the fact, again, in this conversation, we said it’s going to have a detrimental effect on the U. S. economy, meaning those jobs that could have been produced by LNG producers and exporters. the cost of inputs of energy, if energy becomes more expensive, it’ll slow down the economy, thereby jobs and all.
[00:23:20] We talked about, it’s the heartland, the Texas and the Pennsylvania’s and the Ohio’s that are going to be hurt. and it has, we’ve agreed there’s very little effect on climate and it may have a detrimental effect on our allies overseas who may rely on U. S. natural gas, as opposed to, some of our unsavory, global participants like, Russia.
[00:23:38] Why would the president choose to do this action, and frankly, in the middle of a presidential election year, if it’s so patently detrimental to both the economy, the, the global stage and the climate? Well,
[00:23:54] Dr. Benjamin Zycher: again, as I said, this is a SOP to the environmental left, and for reasons that I do not understand, the administration seems to believe that the environmental left is a sufficiently important component of its political coalition, that it needs to do this work.
[00:24:19] Keep them inside the tent. We can, I’m not a political expert, we can agree or disagree with that perception, but that seems to be what’s going on. the administration in the various statements it issued a couple weeks ago on this executive order, made no attempt to hide the fact that this is an appeal to the environmental left.
[00:24:41] Them, their applause for this, this, this executive order, et cetera. there’s nothing else to be said in favor of it. And, and, I cannot, I don’t understand what they’re thinking, but that seems to be what it is that they believe the environmental, again, the environmental left is an important part of the coalition and they need to do this to keep them, keep their support
[00:25:04] Joe Selvaggi: firm.
[00:25:05] I want to quote from the memo one more time from the last paragraph. I think it validates your position on why the president may have done this. I’ll quote, quote. We will heed the calls of young people and frontline communities who are using their voices to demand action from those of us who With the power to act, and as America has always done, we will turn crisis into opportunity, creating clean energy jobs, improving quality of life, and building a more hopeful future for our children.
[00:25:33] Do you see anything in this action that creates clean energy jobs, improves quality of life, or builds a more hopeful future? Meaning, if our economy is hobbled by this, how is it going to improve the quality of life? Do you have a sense?
[00:25:48] Dr. Benjamin Zycher: There is no positive dimension to any of this. None.
[00:25:53] Joe Selvaggi: You’re on the front lines of these debates, both in the intellectual space, but also what you testify in front of Congress.
[00:25:58] It seems to me as a lay person, as an onlooker, if the climate is this existential crisis that all many claim it is, do you hear, interest in, in, let’s say alternatives like nuclear? Which, again, I’ve talked about many times on this show. I spent a fair amount of time in the Navy where they had nuclear power plants on, Tin cans in the middle of an ocean run by 19 year olds and we’ve been doing that for 50 years, without incident. What is it, why aren’t we having memos about doubling down on nuclear instead of talking about attacking relatively clean, safe, natural gas?
[00:26:30] Dr. Benjamin Zycher: I think I may differ from you a bit on this.
[00:26:33] I don’t believe new nuclear power stations are economic or competitive with natural gas at, even at five dollars per million BTUs, which is roughly a thousand cubic feet, and prices now are, I think, under three dollars per, for gas under, for a thousand cubic feet or a million BTUs. so I don’t think nuclear power is competitive, frankly.
[00:26:57] there are other
[00:26:59] artificial constraints on the expansion of nuclear power, the wind production tax credit. For complicated reasons that I won’t, I don’t think we have time to get into, which makes it much more difficult to operate nuclear power plants, because the wind producers have incentives to lower their prices to very low levels knowing that the federal government through the production tax credit will make them whole.
[00:27:23] and there are a lot of artificial constraints like that, but I don’t really believe that nuclear power is competitive. Under current market conditions, natural gas power production clearly is competitive and I think that an effort to substitute wind and solar power in place of natural gas, electricity production is seriously misguided.
[00:27:45] Joe Selvaggi: Indeed. I think we may be talking past each other. I think if I take off my, economist hat and put on my, passionate climate concern hat and say if the only thing you worry about is the climate, and you’re convinced that fossil fuels are the reason the climate is warming, and the warming of the climate is an existential threat to mankind, nuclear makes sense, right? It’s not financial sense but it
[00:28:08] Dr. Benjamin Zycher: makes Under that set of assumptions, that is certainly true. whether I believe those assumptions is, dubious, but we can get into that some other time,
[00:28:16] Joe Selvaggi: Fair enough. I want to bring our, all of our listeners along and say, okay, look it strikes me though, then again, if you have, you essentially have a war on natural gas, and you are trying to steer the economy towards electrification and reliance on renewables, wind and air wind and, solar.
[00:28:33] It seems to me more, less concerned about the environment. Again, if you had concern about the environment, nuclear might make sense, but more anti growth, anti sort of human activity. It seems like it is naturally, like a wet blanket on potential growth, both here and abroad. Do you, am I going too far with that sort of observation?
[00:28:51] Dr. Benjamin Zycher: No the anti fossil fuel ideology is fundamentally anti human. If you really believe that fossil fuels are evil, then the things that increase the demand for fossil fuels also are evil. Among those are investments in human capital, education, training, et cetera, as people become more highly educated.
[00:29:12] As they become more skilled, they demand more fossil fuels. It’s that simple. And so if you really don’t like fossil fuels, then you don’t like education and training and health care and all the things that lead people to demand more fossil fuels. I’ve been talking about this for years. For a short discussion that’s, you might look at one of my old essays, Springtime for the Rockefellers.
[00:29:34] Just Google my name and Springtime for the Rockefellers and you’ll, it’ll come up. Yeah, the anti fossil fuel ideology is fundamentally anti human and that is something I think we should not forget.
[00:29:47] Joe Selvaggi: Indeed. you’ve peaked our listeners’ interest in your work. they may disagree or, want to, engage with your arguments.
[00:29:53] Where can our listeners read more about your work, Ben?
[00:29:57] Dr. Benjamin Zycher: all they have to do really is go to aei American Enterprise Institute aei.org, uh, click on scholars and then navigate to my name and, if they’re having trouble sleeping, this stuff is ideal.
[00:30:12] Joe Selvaggi: Your, uh, soporific missives are, are useful for those of us who have trouble sleeping.
[00:30:16] Now, I actually find it quite interesting, and of course this is a lively debate, and I think, very rarely do we see such a naked attempt to essentially hobble, the American economy, really for political reasons. it’s, in my estimation, a, a real tragedy, and it’s really not being covered very much by our international and local national press.
[00:30:36] Oh, I want to thank you for your time. This is your first visit. You’ve been a terrific guest. Thank you for joining me today on Hubwonk, Ben. Thank you
[00:30:43] Dr. Benjamin Zycher: very much indeed. Appreciate it.
[00:30:46] Joe Selvaggi: This has been another episode of Hubwonk. If you enjoyed today’s show, there are several ways to support Hubwonk and Pioneer Institute.
[00:30:52] It would be easier for you and better for us if you subscribed to Hubwonk on your iTunes podcatcher. It would help make it easier for others to find Hubwonk if you offer a five star rating or a favorable review. Of course, we’re grateful if you share Hubwonk with friends. If you have ideas or comments or suggestions for me about future episode topics, you’re welcome to email me at hubwonk@pioneerinstitute.org. Please join me next week for a new episode of Hubwonk.
Joe Selvaggi interviews Dr. Benjamin Zycher, a senior fellow at the American Enterprise Institute, on the impact of President Biden’s executive order to halt liquefied natural gas export approvals. They explore potential economic impacts, the response from trading partners, and the negligible effect on climate.
Guest:
Benjamin Zycher is a senior fellow at the American Enterprise Institute (AEI), where he works on energy and environmental policy. Before joining AEI, Zycher conducted a broad research program in his public policy research firm and was an intelligence community associate of the Office of Economic Analysis, Bureau of Intelligence and Research, US Department of State. He is a former senior economist at the RAND Corporation, a former adjunct professor of economics at the University of California, Los Angeles (UCLA) and at the California State University Channel Islands, and is a former senior economist at the Jet Propulsion Laboratory, California Institute of Technology. He served as a senior staff economist for the President’s Council of Economic Advisers, with responsibility for energy and environmental policy issues. Zycher has a doctorate in economics from UCLA, a Masters in Public Policy from the University of California, Berkeley, and a Bachelor of Arts in political science from UCLA.
The Commonwealth’s tax collections continue to slide, according to the latest numbers released from the Department of Revenue. January revenue collections totaled $3.594 billion, $268 million below what the state collected in January 2023, and short of the revised benchmark by $263 million. Year-to-date revenue is $21.46 billion, or $212 million less that year-to-date revenue in 2023 and below the Healey/Driscoll administration’s revised benchmark by $263 million — a benchmark that had already been revised downward by $1 billion.
All categories of tax revenue were lower than expected. Regular sales tax and motor vehicle excise were essentially flat, while corporate and business taxes are 8.1 percent below estimates, and withholding is down by 3.1 percent. The slide was most pronounced in individual estimated payments, which are 16.6 percent less than anticipated. This category of income includes interest, dividend, and other nonwage income typically paid by high-income earners.
While it’s too early to determine whether the revenue shortfall is the result of out-migration, 25 states have reduced income tax rates since 2021, according to the Tax Foundation, while only three raised them — California, New York, and Massachusetts. It is worth noting that the revenue decline comes on the heels of a new surtax on incomes exceeding over $1 million, advanced by lawmakers and narrowly approved by Massachusetts voters last November. It is occurring at a time of low unemployment.
Most other states are experiencing revenue growth. Ascertaining the cause of the state’s revenue slide and taking steps to reverse this trend must be a top priority. Pioneer will continue to track revenues and out-migration patterns to fully assess the decline and provide solutions to effect fiscal stability.
But the state not only has a revenue problem; as noted in a Pioneer post last week, it has a spending problem. The Massachusetts state government must tighten its belt and live within its means by reducing FY2025 spending to account for this new fiscal reality. The days of fiscal surpluses, unprecedented increases in year-over-year spending, and flowing federal aid have come to an end.
U-TN’s Robert Norrell on Booker T. Washington & Voc-Tech
/in Education, Featured, Learning Curve, News, Podcast /by Editorial StaffRead a transcript
[00:00:22] Albert Cheng: Well, hello everybody. It’s nice to be back here with you all on a new episode of The Learning Curve podcast. I’m your host this week, Dr. Albert Cheng from the University of Arkansas, and co-hosting with me is Alisha Searcy. Hey Alisha, how’s it going?
[00:00:38] Alisha Searcy: I am well, professor. Welcome back. How are you?
[00:00:40] Albert Cheng: Doing well, I’m excited for this show. I mean, we’ve got Professor Robert Norrell, who’s going to join us later to talk about Booker T. Washington. So, I’m really looking forward to learning from him. Very excited. So, let’s get to the news, Alisha. What I wanted to highlight this week was an article from Forbes pointing us to three legislative trends to look out for this year.
[00:01:00] I know, I think maybe a few weeks back, we talked about what education trends might hold for this year, but here we have another article. It’s only February, so I think this is early enough to talk about this kind of stuff. So, at Forbes, there’s an article that was highlighting three trends related to college and career readiness, really.
[00:01:18] And so I just really encourage listeners to read up on this. One’s about a lot of CTE, career technical education reforms, that are underway in various states. states are really rethinking how they prepare their students for post-graduation, post high school graduation. And then, another trend that was being pointed out is, on a related note, higher education trying to tie down their investments to the unique and particular economic development priorities within their states.
[00:01:48] States that can probably contribute in a particular industry, they’re thinking about, well, how do we invest so that our students can hang around and contribute to what we might offer to folks here at home and in our communities. And third, there’s some push in some states too. Try to put some more metrics on estimating the value of higher education.
[00:02:09] I know the value of higher ed these days is being questioned a lot for a variety of reasons. But yeah, I don’t know, some of these new efforts to put some metrics to measure the quality, to measure the value of higher ed. Hopefully I’ll do something to that. But anyway, I have no idea how any of these legislative pushes are going to unfold but it will be interesting to keep an eye out for some of these trends.
[00:02:31] Alisha Searcy: For sure. It’s interesting you mentioned legislative trends. The article that I came across was from The Hill, and it’s called America’s Facing a STEM and Data Education Crisis. And so, it talks about, of course, our math scores among teenagers in particular, 15-year-olds, have the lowest math scores that we’ve seen since the seventies.
[00:02:55] And of course we know COVID has something to do with that, but that doesn’t tell the whole story. And so, the concern here in the article is around STEM in particular and how data education, data literacy is sort of at crisis level and that although we don’t feel the effects right now, it really could harm us in the future. And they see this as a real crisis. And so, it’s interesting because, when you think about our education system and what it’s designed to do, right, we have to ask ourselves, what are we preparing our kids for? And so, one of the things the article points out is that the Society of Human Resources Management says the country has a need to boost STEM education because we’ll have nearly 3.5 million STEM jobs that need to be staffed by 2025. That’s huge. And so, as an example, they talk about operations research. One of the fastest growing STEM fields and so it allows students to have the data skills to save lives, save money, solve problems. A very interesting example is talking about how there’s an abundance of new applications of operations research — like humanitarian logistics or human trafficking and addressing the impact of things like COVID.
[00:04:11] And so here’s what I’ll just add to this. It didn’t talk about this, but I think that there are more factors that are contributing to the problem that we have in math and STEM in general. I would argue it’s the way that we’re teaching math. If you are a parent trying to help your kids at home, you know it’s very different than what we learned. And I’m not saying one way is better than the other, but I am saying that the way we’re teaching math I think could be a problem and something that needs to be looked at. And so just as we’re talking about the science of reading, who’s doing the research professor on the science of math, so that we can better teach our students.
[00:04:47] I also think that there’s this high focus on testing and skills and I’m not one of those people that’s anti-assessment. We have to know where our students are. But as a former superintendent, I know the pressure that I was under to make sure the kids are performing on a test. And it takes you away from teaching those critical thinking analysis type skills.
[00:05:08] And then I think the final contributor in my mind is that we need to do a better job overall in our education system of making learning more meaningful. Helping students make connections to the real world. And I don’t want to be offensive, but I will say that there are some things that I’ve learned and math, maybe some other subjects that I never used again, but what if we were teaching things like data science, and we could make those connections to solve real world problems for students.
[00:05:38] And again, to the point about policy, apparently there’s the Mathematical and Statistical Modeling Education Act and the Data Science and Literacy Act that are pieces of legislation moving through Congress. And if enacted, would help modernize secondary mathematical and STEM education. And so it gives $10 million annually for schools at all levels, from pre K to college.
[00:06:04] Very powerful. Now, let’s be honest. $10 million is not a lot of money per year, right, when you think about all the schools that we have. But, I think it’s a good start. I think this article was very important to point out the challenges that we’re having in terms of math and STEM and what we can actually do to fix it so that we can avoid these crises and make sure that kids are prepared in our schools.
[00:06:24] Albert Cheng: Yeah. Yeah. That’s excellent commentary. And then anytime anyone wants to talk math, that’s definitely near and dear to my heart as a pure math major. And you asked about the science of teaching math. I’ll remind listeners that late last year, I did this a lot of episodes ago, but we had Professor Stigler on the show and that’s his expertise.
[00:06:43] And so yeah, go check out that conversation. I learned quite a bit about effective math instruction from that. But anyway, before you do that, stick around with us, because coming up after the break, we’re going to have Professor Robert Norell join us to talk about Booker T. Washington. So, stick around.
[00:07:13] Alisha Searcy: We’re honored to have on with us Professor Robert Norrell. Robert Norrell is Professor and Bernadotte Schmidt Chair of Excellence with the Department of History at the University of Tennessee. In 2015, Norell published Alex Haley and the Books That Changed a Nation. In 2009, his biography, Up from History, The Life of Booker T. Washington, was widely acclaimed. In 2005, he published a well-reviewed interpretive synthesis of race relations in the 20th century United States, The House I Live In, Race in American Century. And his book, Reaping the Whirlwind, The Civil Rights Movement in Tuskegee, won the Robert F. Kennedy Book Award in 1986.
[00:07:53] He has published 10 other books on the history of the American South and is the author of 25 scholarly articles. Professor Norrell has given invited lectures at Heidelberg University, Oxford University, The University of Cambridge, the University of Tubingen, and several other universities. Welcome to the show, professor.
[00:08:13] Professor Norrell: Thank you very much.
[00:08:14] Alisha Searcy: So, my first question, Jason Reilly of the Wall Street Journal wrote that in Up from History, a compelling biography Robert J. Norell restores the wizard of Tuskegee to his rightful place in the black pantheon. Would you share with us a brief overview of who Booker T. Washington was, the touchstones of his life as an educator, and why you decided to write a biography about him?
[00:08:39] Professor Norrell: Booker T. Washington was the principal of Tuskegee Institute in Alabama, which he founded in 1831. And it had a very meager beginning, but he grew it into a really strong institution. One of the most important institutions of higher education for African Americans in the country by, say, 1900. Washington had been born in slavery and had gone to school at Hampton Institute in Virginia, where he lived, and, or nearby.
[00:09:20] He was born in Virginia and then moved to West Virginia. And Hampton was organized to provide an industrial education, and Washington was imbued with the correctness of an industrial education for the freed slave people, and he was asked to start a school in Alabama. He quickly showed a remarkable capacity for several things. One is organizing a complex enterprise, which was a college, and then funding it by essentially seeking gifts to support students who went there. And then by promoting his ideas about education for African Americans around the country, and by 1895, he had become arguably the most prominent African American and certainly the most articulate advocate for an industrial education.
[00:10:29] Alisha Searcy: So, I want to go back for a moment, because as you noted, he was born an enslaved person, in 1856 in Virginia, which is unimaginable, to Jane, an enslaved African American woman on a plantation. And it’s noted that he never knew his birth date or his father, who was said to be a white man who resided on a neighboring plantation. Can you talk about Booker T. Washington’s early life as an enslaved person and his liberation after the Civil War?
[00:10:59] Professor Norrell: Well, he lived in slavery for a relatively short time. He mostly learned about it through his mother, who, by all accounts, was a quite remarkable woman, and he was very devoted to her. He didn’t recount any experiences of cruelty that he might have felt as an enslaved person, although he was at close hand enough to have seen the inherent cruelty of slavery. And the unknown white father was probably known to him. He never avowed who it was, but he in all likelihood knew. Certainly Jane would have known who his father was, but his position was that it never made any political sense for him to identify the man who probably was his father. There’s evidence from family correspondence that his brother, John, knew who the father was, but Booker Washington was remarkably comfortable with his identity as both an enslaved person and a person whose father was at least unidentified. He acted with confidence, with self-assurance, of a person who might have been born with a silver spoon in his mouth. So, I always found that a very attractive character in Washington — was his self-confidence.
[00:12:31] Alisha Searcy: Thank you, I never heard that. So, Booker T. Washington is quoted as saying: “We worshiped books. We wanted books. More books. The larger the books were, the better we liked them. We thought the mere possession and the mere handling, and the mere worship of books was going in some inexplicable way to make great and strong and useful men of our race.” Can you talk about Mr. Washington’s formative education, his experiences at Hampton Institute, a school, as you mentioned, established in Virginia to educate freedmen and their descendants, and his most important intellectual influences?
[00:13:10] Professor Norrell: Yeah, Washington was, to write that quote about we loved all books, realized that reading and education set you apart in American society and put you on the road to success. And that was something that all African Americans, he believed, should pursue. Before I get to Hampton, it’s important to emphasize he worked as the house boy to a white lady in West Virginia who hired him and then — she was not from there, she was from the [inaudible] and she made Booker Washington her special project to teach him how to be a good student, to teach him especially use of the language, the basic skills of mathematics, and so forth.
[00:14:01] And he proved to be every bit worthy of her attention. Then he went to Hampton and came under the tutelage of Samuel Armstrong, and Armstrong was a great role model, Civil War general, who had a very clear image, vision about what industrial education was, how it was appropriate for African Americans.
[00:14:30] Alisha Searcy: And so, thank you for mentioning that. I was going to ask you to talk more about Tuskegee. And so, we know that in 1881, the Hampton Institute president, General Samuel C. Armstrong actually recommended Booker T. Washington, then age 25, to become the first leader of Tuskegee Institute. And so, can you talk about, give us perhaps a thumbnail sketch of Tuskegee, its students, campus and buildings? The vocational tech philosophy, as well as how Mr. Washington’s leadership and fundraising transformed it in the face of Jim Crow racism and hostility in Alabama.
[00:15:07] Professor Norrell: Ooh, that’s a big question. A lot of different parts to it. Well, Tuskegee was a poor black belt town in the south that had lost the Civil War. Most of its wealth had been essentially destroyed by the emancipation of the slaves. So, it was a place that was struggling economically and to some extent racially in southern Alabama. But some black people there told whites that what they really wanted was a school. They wanted education for their children.
[00:15:44] And some people in Tuskegee then contacted General Armstrong, who told them about Booker Washington. They originally asked for a white man, and he said, well, I don’t have any white men, but I have a very capable colored fellow. And he sent Washington, and Washington was very energetic, very shrewd. He was selfless in terms of his willingness to work as long as necessary to try and succeed there, and he did succeed, recruiting initially mostly students from the neighborhood of Tuskegee, and eventually becoming a school that attracted African Americans from further beyond.
[00:16:28] He assumed that nobody who would want to come there had the wherewithal to pay for their own education, and he set out to essentially raise through donations of people, mostly in the north, Tuskegee, to finance the teaching of students in the building of the university. He built, between 1881 and 1900, the magnificent physical plant of nine buildings to house the educational program of Tuskegee, including both its industrial, vocational education, and its classical education as well, that is the academic subjects. And he never separated them or tried to segregate the two kinds of education from one another. He always thought that a good education for an African American person required both.
[00:17:32] Alisha Searcy: It’s mind blowing to think that this was happening less than 20 years after the end of slavery, that he was able to do all of this. Thank you for that. So, my last question before I turn it over to the other professor with us is: Booker T. Washington dedicated his life to the relationship between education and racial uplift and considered education and economic independence as a solution to racial inequalities. Can you summarize for us, and you talked a little bit about this, but his vocational tech industrial education mission and its role in addressing racial divides in America?
[00:18:10] Professor Norrell: Well, I suppose that Washington I believe that for the racial divide in the United States to be bridged, African Americans had to rise above the status of essentially a free slave. That they had to become economically independent, they had to become intellectually independent for there to be good relations between blacks and whites in America.
[00:18:42] And that was the point — very optimistic kind of presumption because as his life would show, he didn’t talk about it very much, but there was plenty of evidence that many whites, maybe most whites, did not want African Americans to rise above the condition of a sharecropper, a person dependent on whites, but that was his determination, and for a long, to a large extent, he promoted both his implementation at Tuskegee and then his implementation at satellite schools created by Tuskegee students around the South. And he campaigned for it in a kind of way to change the way Americans thought about blacks and their education by showing good examples of African American achievement in education.
[00:19:41] Albert Cheng: Thanks, Professor Norrell, for sharing that. And I want to continue exploring this topic of education as it relates to Washington’s work. So, in 1895 he gave the Atlanta Exposition address, which was viewed as a historic moment by African Americans and whites across the country. Could you tell our listeners about this speech, what was in it, how it was received, and how it became the foundation for Washington’s most vocal critics, which include the great Black intellectual, W.E.B. Du Bois?
[00:20:11] Professor Norrell: Well, Washington was asked to give the speech at what was effectively an industrial fair in Atlanta, and he was asked to do that because he was a prominent person of the day, African American person of the day, and the Atlanta Exposition wanted a black person among them, among many others. And he was given the job, and by 1895, Washington had become an amazingly skillful orator. He spoke all the time to many groups, and had been since 1881, and he had acquired a facility for explaining his philosophy and his ambitions for African Americans that were he’d been voiced in a lot.
[00:21:02] Albert Cheng: Picking up on his philosophy, we get to this now well-known debate between Washington and Du Bois. They both had different strategies for racial uplift as they actively competed for support within the black community. And we know that Washington favored the voke-tech industrial education, at least, going down that road, using that strategy, as you’ve been discussing, while Du Bois wanted blacks to have a classical liberal arts education. So, can you discuss this larger public intellectual debate, as well as just the relationship between Du Bois and Washington?
[00:21:39] Professor Norrell: Du Bois and Washington, or at least Du Bois, I think, read more into the differences between them than actually existed, at least that’s my argument. But Washington was for education for black people, full stop. And he was for vocational education, he was for then mostly called industrial education, but he was also for classical education. Students at Tuskegee took the academic subjects for about half their courses. And so, he never advocated ignoring literature and philosophy and all that, languages. He was all for them.
[00:22:23] He just said an African American should get as much education as he could put to good use. And he was skeptical about how many African Americans could put a classical education to good use, to remunerative use. Du Bois then, to contrast himself with Washington’s philosophy, insisted that classical education was more, more important.
[00:22:53] And Washington’s motivation for emphasizing vocational education and industrial education, which that was what benefactors would give money for. Benefactors, wealthy whites in the North were far less likely to give money to fund a department of philosophy or literature than they would to fund a school for skills.
[00:23:17] And, it was a practical matter for him. He had to be an advocate for that because that’s where his money was coming from. On the personal, they were friendly originally, and Washington offered Du Bois teaching jobs, and Du Bois did teach there on a temporary basis some, at Tuskegee. But Du Bois began to believe that Washington’s influence on African Americans at large in the United States was so great that it had become a kind of pernicious influence, and he became determined, especially encouraged by people like William Monroe Trotter in Boston, to disparage Washington, to criticize him, and to create, essentially, a challenge to Washington’s leadership of African Americans in about 1900, 1901.
[00:24:12] Albert Cheng: Well, speaking of 1901, that’s when U.S. President Teddy Roosevelt invited Washington to dine with him and his family at the White House. And then, mind you, that, as that was a time when segregation was the law. So certainly, the dinner between Washington and the president of the United States became a national controversy. Could you tell listeners about this episode? What was some of the media coverage and the politics around that moment?
[00:24:38] Professor Norrell: Well, it was highly sensationalized, and the fact that Washington had dinner with the president’s family at the White House, it was generally a breach of the racial etiquette of the time. Black people were not welcome to have social interactions with whites, but it’s also the very fact that the president of the United States — the most powerful position in American politics — was seeking the advice of a black man. Black men were in the minds of most whites, should not have that kind of influence, and Washington clearly did, and they set out to punish him. by disparaging him in his show of stories in the newspaper.
[00:25:26] Albert Cheng: Well, 1901’s also another significant year for Washington, because that’s when his famous book, Up From Slavery, was published. So, talk about this book. I mean, it describes his early life, his work establishing the Tuskegee Institute. Yeah, what else is in this book, and how did this book in particular impact American education?
[00:25:45] Professor Norrell: Washington had a good story to tell about his life, and he told it several times. Up from Slavery was not his first autobiography, it was, I believe, his second, but it was one that he aims at white audiences, and because of the way, the style in which he tells his story, he acquired a wide following. He was instantly embraced by white Americans, told the story of overcoming hardship, and experiencing triumph in his own life that, or, success, that could make whites believe that African Americans in America had a possibility, an opportunity for a good life, and Washington was happy to encourage that, even if the kinds of success — for most African Americans — was really mythical. But Washington was a fellow who took the world as it came to him and tried to make the best of it. And he did, with the Tuskegee Institute and with his writing and with his speaking.
[00:27:06] Albert Cheng: Well, so really in particular since the 1960s, if we think of civil rights, the names Martin Luther King and Malcolm X come up and then we don’t really probably think of Washington first. But so, final question here, what would you say Washington’s legacy is and how should we remember him today?
[00:27:24] Professor Norrell: Well, I’m trying to answer that question and trying to come up with a different answer to that question from what was current through most of the 20th century. Booker Washington’s reputation really suffered after his death, and it suffered particularly in the 1960s, with the rise of people like Martin Luther King Jr. and Malcolm X, who had completely different personal opinions to Washington’s. And the kind of behavior that was idolized in Martin Luther King and to some extent in Malcolm X was anathema to the behavior what we knew about Booker Washington. I chose to write this biography because I thought people had, a lot of historians had gone out of their way to misunderstand Washington, to take him entirely out of the context of his life, and thus disparage him and to make him the sort of polar opposite of Martin Luther King, or for that matter, Malcolm X.
[00:28:44] And I was determined to say, let me just go through this context and all the challenges that he faced and all the difficulties that he had in order to build something that African Americans should be proud of and point to as an achievement that they themselves had done. And to give Washington credit for having orchestrated that.
[00:29:12] Albert Cheng: Yeah. Well, Professor Norrell, I’d like to give you the last word by giving you an opportunity to read a passage from your biography. So, the floor is yours.
[00:29:24] Professor Norrell: Okay. I’m going to read a paragraph or two from the very end of my book, two short paragraphs that I think go about as well as I can and saying what I think the significance of Booker Washington was. And this comes after I’ve given a long account of how I think Washington was misrepresented by historians essentially after World War II, so I’m going to read it a little bit. There was a tragic dimension to Washington’s efforts to remake the black image in the American land. During his lifetime, the obstacles to that purpose were simply insurmountable, since efforts could not overcome the intense political and cultural authority of white nationalism. But neither did the efforts of the NAACP succeed in that regard until World War II, when the demands of defeating racist enemies sparked the rejection of racial stereotypes in American culture. The fact remains that Washington was the first to identify it as a necessary challenge, although it was left for others to meet it. Washington should receive credit for anticipating the modern world, in which image was more readily manipulated than reality. in which prophecies were often self-fulfilling and pessimism had little social utility, so largely overlooked his effort to sustain blacks’ morale. In a terrible time, must be counted among the most heroic efforts in American history, Booker T. Washington told his people that they would survive the dark present. And as far as possible, he showed them how to do so by building an institution that demonstrated blacks’ potential for success and autonomy, he gave them reasons to have faith in the future. Indeed, his life itself was an object lesson in progress, providing hope that black people could rise to something better.
[00:31:33] His determination to shape his own symbolism and that of blacks as a group should be marked as a shrewd and valiant effort to help his people survive. At many levels, he succeeded in his purpose, for indeed, they did move up from history, from a time of segregation and despair to a time when the promise of equality in American life became a real possibility.
[00:31:59] Albert Cheng: Thank you, Professor Norell, Professor of American History at the University of Tennessee and author of Up from History, The Life of Booker T. Washington. Professor, Fascinating interview. We’re glad to have you on.
[00:32:09] Alisha Searcy: Learned a lot. Thank you so much, Professor.
[00:32:27] Albert Cheng: Well, yeah, that was a fascinating interview. I’m glad to have been a part of that. Learned so much. Well, before we wrap up, now for the Tweet of the Week, which comes from our friends over at EdNext. It’s a tweet actually about an article entitled, Going School Shopping. And so, this is actually a little research article released by Doug Harris and Matt Larson, in which they examined family preferences for schools in New Orleans.
[00:32:53] And I think a lot of listeners will be familiar, but in case you’re not. New Orleans is one of these cities where it’s choice all around, one app system, charters, lots of private schools, private school voucher program there. So, check out that article, I think it may not surprise many folks, but good social science sometimes proves the obvious, but I do think it’s worth a read.
[00:33:14] I was struck at just the diversity of preferences that parents had where this for academic achievement, for, Different types of extracurricular activities, how they make these tradeoffs with transportation and distance, even a preference for childcare, which seemed to be pretty salient among lower income families.
[00:33:32] And so again, these results are probably what you might’ve expected, but check it out and I, I do think if you’re a school leader out there, read up on that and just, maybe even consider just how you might better serve. The families that are part of your school and maybe even the families that aren’t part of your school.
[00:33:48] Alisha Searcy: That’s a great tweet. And I think the bottom line is listen to parents, right? We know what we want. We know what we need for our kids.
[00:33:57] Albert Cheng: Well, hey, Alisha, thanks for co-hosting with me again on this week’s episode.
[00:34:01] Alisha Searcy: Thanks. It’s always great to be with you, Professor.
[00:34:04] Albert Cheng: Yup. And that’s it for today. Come back here next week. We’re going to have. Another guest, a special one, Eva Moskowitz, the CEO of Success Academy Charter Schools, an author of A Plus Parenting, The Surprisingly Fun Guide to Raising Surprisingly Smart Kids. So, join us next week, but until then. Have a great one.
This week on The Learning Curve, guest co-hosts Prof. Albert Cheng of the University of Arkansas and Alisha Searcy interview University of Tennessee Prof. Robert Norrell. He explores Booker T. Washington’s early life in slavery, his transformative leadership at Tuskegee Institute amidst Jim Crow racism, and his advocacy for vocational education as a means for racial uplift. Prof. Norrell also discusses Washington’s 1901 autobiography, Up From Slavery; his controversial White House dinner with President Theodore Roosevelt; and his often overlooked legacy following the activism of the 1960s Civil Rights era. In closing, Prof. Norrell reads a passage from his book Up from History: The Life of Booker T. Washington.
Stories of the Week: Prof. Cheng discusses a Forbes article on education and workforce legislative trends for 2024; Alisha analyzes a story from The Hill on the crisis in STEM and data education.
Guest:
Tweet of the Week:
https://x.com/EducationNext/status/1754482567883915363?s=20
Smothering Gas Exports: President Sides with Environmentalists Over Environment
/in Featured, News, Podcast Hubwonk /by Editorial StaffClick here to read a transcript
Hubwonk Smothering Gas Exports: President Sides with Environmentalists Over Environment
[00:00:00] Joe Selvaggi: This is Hubwonk. I’m Joe Selvaggi. Welcome to Hubwonk, a podcast of Pioneer Institute, a think tank in Boston. On January 26th, President Biden issued an executive order announcing plans to pause all approvals of liquefied natural gas exports, citing the administration’s goals of lowering energy costs, creating jobs, and safeguarding health as its intended objectives.
[00:00:25] The statement begins by asserting that, quote, in every corner of the country and the world, people are suffering the devastating toll of climate change, unquote, as the reason the U. S. must export less natural gas, lest it contribute to a crisis that, quote, jeopardizes our planet and our people, unquote.
[00:00:42] But policy analysts and concerned citizens alike must now examine the question whether a reduction in future natural gas exports. will actually equate to less global greenhouse gas production. Beyond the long term effects on the climate, what will be the more immediate effects on the U. S. economy, its growth in energy costs, and on our international trading partners, who have begun to rely on U.S. LNG exports? And as the November presidential election approaches, how will American voters respond to such executive actions if they perceive a negligible effect on climate, but a substantial cost to the U. S. economy and those of its allies? My guest today is energy and environmental policy expert and senior fellow at the American Enterprise Institute, Dr.
[00:01:26] Benjamin Zeiger. Dr. Zeiger has written extensively on U. S. energy and has testified before Congress on matters relating to the effects of energy laws and regulations on production and the environment. He will share with us his views on the merits of the President’s decision to pause approval of future LNG exports, including its likely effects on our economy, and offer his insights.
[00:01:47] On whether politics rather than science may be the primary driver of this executive order. When I return, I’ll be joined by AEI Senior Fellow, Dr. Benjamin Zeicher. Okay, we’re back. This is Hubwonk. I’m Joe Selvaggi, and I’m now pleased to be joined by Senior Fellow at the American Enterprise Institute, Dr.
[00:02:06] Benjamin Zeicher. Welcome to Hubwonk, Ben. Thank you very much. All right, this is your first time as a guest on Hubwonk, on our podcast. I wanted to have you on the podcast because you write extensively for AEI on matters concerning energy and environmental policy. You’ve also testified before Congress and have written about the President’s recent memo.
[00:02:25] on the intended pause in approval of liquid, liquefied natural gas exports. Let’s start at the beginning for our listeners who know nothing about this memo, this executive order. on January 26th, what did the president announce in his statement to pause LNG export approvals?
[00:02:40] Dr. Benjamin Zycher: what he announced was that moving forward, new applications for export facilities. For the export of liquefied natural gas will be subject to a climate change test in addition to the public interest test that is spelled out in the Natural Gas Act of 1938, which under which, the Energy Department, and the Federal Energy Regulatory Commission, have responsibilities for approving proposed LNG export facilities.
[00:03:10] And the entire, justification in President Biden’s recent, announced pause was because of the supposed climate crisis. And the effect of LNG exports on climate phenomenon moving forward. That was the rationale.
[00:03:29] Joe Selvaggi: So I want to quote from the memo. again, the president may, live in a different world than I do, but I’m going to read it for our listeners and see which, if they live in the president’s world.
[00:03:37] This is the first. Paragraph of his, executive order, quote, In every corner of the country and the world, people are suffering the devastating toll of climate change. Historic hurricanes and floods wiping out homes, businesses, and houses of worship. Wildfires destroying whole neighborhoods and forcing families to leave their communities behind.
[00:03:53] Record temperatures affecting the lives and livelihoods of millions of Americans, especially the most vulnerable, unquote. So clearly the president thinks, the world is, already being devastated by climate change. So I want to, talk about, The implications of this pause on exporting LNG both to the economy and to the climate.
[00:04:11] So let’s start with helping our listeners understand what are our current, export, capabilities. We know this to be a recent phenomenon. We discovered fracking, we discovered our, an abundance of natural gas. what does this pause limit as far as we’re concerned? we, we actually have surplus of natural gas.
[00:04:28] How much could we be exporting, is the question.
[00:04:30] Dr. Benjamin Zycher: in the immediate term, there’s no effect at all. Existing facilities will continue to export liquefied natural gas as they have the past several years. LNG exports are now,I can’t remember the number, but it’s something like, 9 percent or so.
[00:04:51] Of U. S. natural gas production, and that is expected to rise, in the absence of this executive order, from, Mr. Biden. the issue, is, what if, regardless of what you believe about, whether or not there’s a crisis caused by increasing atmospheric concentrations of greenhouse gasses.
[00:05:10] Just as an aside, there’s not much evidence of that. But regardless of what you believe, the issue is whether or not U. S. natural gas, exports. Would have much of an effect by the year 2100? And the answer is no, if you shut down not just, the exports of natural gas from future projects that are now being paused, but all U.
[00:05:31] S. natural gas exports, and if you assume there would be no increase In, no substitution of foreign natural gas or foreign coal, et cetera, in place of U. S. natural gas exports. The, using the Environmental Production Agency Climate Model, the effect on global temperatures in the year 2100, under mainstream assumptions would be something like 8 one thousandths of one degree, which obviously would not be detectable.
[00:05:59] Joe Selvaggi: So what you’re talking about, 8 one thousandths of one degree, if all the LNG production We’re paused now,
[00:06:05] Dr. Benjamin Zycher: if all, us LNG exports were shut down permanently.
[00:06:09] Joe Selvaggi: Yes. Yes. okay. So we’re talking about eight tens. Eight, eight. One. Thousandths of a degree. One degree, in 2100, which is.
[00:06:17] A fairly far distant off. we know that, for a time we were concerned about our energy, the need to import more energy than we produce. Now we’re a net exporter, is that right? and as a net exporter or a producer, what’s the effect of, let’s say, the natural gas boom on the U.
[00:06:34] S. economy? In other words, instead of having to ship it in the form of oil from, say, Saudi Arabia or wherever, we All this natural gas being domestically produced. What is the, let’s just start with the effect on the national economy. Do you have any sense of how big our industry is?
[00:06:49] Dr. Benjamin Zycher: what people, I think, need to understand is that fossil fuels are one important form of national wealth.
[00:06:55] And to the extent that production of it increases efficiently, then national wealth increases, and that wealth is shared across the economy among, producers and workers and others as an outcome of competitive market forces. so with the technological revolution in natural gas and oil production over the last 20 or so years, national wealth is greater.
[00:07:21] GDP is higher. GDP growth is greater. There’s more employment. the, virtually everyone is better off as a result of tax revenues go up for local and state governments. Virtually everyone is better off as a result of this increase in national wealth. And the anti fossil fuel ideological campaign Has effects that are just the reverse of that.
[00:07:44] And that is very unfortunate.
[00:07:46] Joe Selvaggi: So let’s put a finer point on this. you’re saying that I think that’s a very good way to look at this. if we were sitting on a mountain of gold, it would be national wealth. If we’re sitting on a mountain of natural gas, it also is natural wealth.
[00:07:55] We, we think about in terms of who’s making money and I don’t know what. What images are conjured in our listeners minds? They might be thinking of wealthy oil barons. But instead, we’re talking about people who are doing the extraction of the natural gas. these are in the heartland of the U.
[00:08:08] S. Lots of high paying jobs. where does all this wealth lie? I’m just talking about the production. And then we can even talk about, of course, Cheap or cheaper gas is an input to everything else, meaning, everything we consume is produced with the help of energy, which
[00:08:23] The boom
[00:08:24] Dr. Benjamin Zycher: in natural gas production has taken place in Pennsylvania, Ohio, West Virginia, Texas, New Mexico to a degree, North Dakota, and other places and when to say that Oil barons, whatever that means, are getting rich is this, is merely to say that investors in these technologies and investors in these exploration and production activities get rewarded by market forces, as do workers in the oil patch or oil fields, as do state and local governments, as do others who contribute to this increase in national wealth as driven by competitive market forces.
[00:09:09] And so it’s not only your oil barons who profit and they’re, the fact that they profit is perfectly justified. They’re making investments and they’re taking risks and,and so the market forces are rewarding them for that just as they reward workers and others involved in this increased production of national wealth.
[00:09:28] Joe Selvaggi: Indeed, and of course we’re talking about the supply, the reward to supply. You produce something people want and you get rewarded financially, but all of us are also consumers. So everything we consume is really driven by, by, energy prices, whether it’s, avocados that we eat or technology we use, we’re really all the beneficiaries of cheaper energy.
[00:09:47] Is it fair to say that Okay. With cheaper energy, everything we consume, everything we buy, everything we use is fundamentally going to be cheaper with less expensive energy inputs.
[00:09:56] Dr. Benjamin Zycher: Yeah, many things will be cheaper, not everything, but many things, perhaps even most things, meaning most consumer personal consumption expenditures will go down as a result of cheaper energy to the extent that energy is an input in the production of a vast array of Goods and services, some more than others, and that’s certainly true, yes.
[00:10:19] Consumers benefit, sure.
[00:10:21] Joe Selvaggi: And if we were to take the extreme and say, okay, look, we’re going to have a war on natural gas. We don’t think it, though it’s better than coal, it’s still not wind and, and solar. so we’re going to try to ban that. What would you think would be the effect of having less or minimizing or trying to even go after domestic and natural gas production.
[00:10:38] what would we look like? What would the world look like or the U. S. look like if we had less natural gas production? Yeah,
[00:10:44] Dr. Benjamin Zycher: everything would be, many things would be more expensive. Power production would be much more expensive and much less reliable. What I think a lot of people don’t understand is that an electric power system, primarily depending on wind and solar output, cannot work simply as a matter of electrical engineering without massive backup generators, powered by typically natural gas.
[00:11:14] in the form of natural gas turbines, it simply can’t work. Simply, again, simply as a matter of electrical engineering. The economy will be poorer, wages will be lower, the economy will be smaller, GDP growth will be smaller. It would be, not a very not as wealthy a society as otherwise would be the case.
[00:11:34] With less ability to invest in environmental protection and all the rest.
[00:11:37] Joe Selvaggi: What you’re saying is that we’d all be poor. The products we buy might be more expensive. So that would be also bad. our GDP collectively would be less and we don’t have to get into this, but of course, our grid, our, electrical system that if we plug in our cars, it’s going to rely on electricity or we plug in our guests, our electric stove, it’s going to be.
[00:11:56] on the electric grid, if we take away natural gas, it becomes fundamentally more fragile, because then we’re relying on the whims of
[00:12:02] Dr. Benjamin Zycher: The point you’re making, actually, let me just offer one or two sentences on that. The Environmental Protection Agency has promulgated proposed rules on both what the power sector should look like and what the ground transportation system should look like.
[00:12:18] system should look like. They’re trying to force a shift toward more, much more wind and solar power generation and a shift toward much more, many more electric vehicles and many fewer, conventional internal combustion engine driven vehicles. EPA’s right hand doesn’t know what its left hand is doing and the two proposed sets of rules are not compatible.
[00:12:46] And I think a
[00:12:50] The expansion of wind and solar power, as envisioned in the EPA proposed regulations, is not consistent with the expansion of electric vehicle fleet, as envisioned in other EPA proposed rules, and at some point, there’s going to have to be a reckoning between those two sets of parameters.
[00:13:14] Joe Selvaggi: Okay. We’ve talked about what happens domestically, but really this conversation should be about the exports and what happens to that surplus natural gas that we choose to sell on the international market.
[00:13:24] Right now, who are the current consumers? You said it’s a nine percent of the natural gas that we produce is exported. Where does that go?
[00:13:31] Dr. Benjamin Zycher: most, more than half of it goes to Europe as a replacement for Russian natural gas. It was about half of natural gas used by the European Union, only three years ago.
[00:13:46] It is now down to less than a quarter and, U. S. natural, liquefied natural gas exports, heavily go to Europe. A very substantial amount also goes to Asia, Japan and Korea and China and others. And a small amount goes to South America, in particular Brazil and, and Argentina. But for the most part.
[00:14:08] U. S. natural gas exports go to Europe and to Asia, Europe in particular.
[00:14:16] Joe Selvaggi: And our careful listeners will say, okay, why does a shift away from Russian gas? And towards U. S. natural gas happened three years ago, it seems like a substitution, one for one, where Russia is exporting less and we’re exporting more to Right,
[00:14:30] Dr. Benjamin Zycher: there was the Ukraine invasion, there was the shutdown of, Nord Stream, the Nord Stream 1 pipeline, and all the geo-political events that took place.
[00:14:41] in the, in the wake of the Russian invasion of Ukraine and, the Europeans in particular, recognized that Russian gas is unreliable or had become even more unreliable than was previously the case. And, and I think, that generated a shift, toward, the use of U. S., natural gas, particularly after Nord Stream 1 was shut down.
[00:15:07] Joe Selvaggi: again, I don’t want to put words in your mouth, but for those, energy users in Western Europe who, who were at the mercy, perhaps, of Russian natural gas, If the U. S. weren’t there to substitute their natural gas for Russia, if we, in a sense, had banned exports entirely long ago, really, Europe would face either going dark or cold, or, submitting to the whim of Russia.
[00:15:32] Is that saying too much?
[00:15:35] Dr. Benjamin Zycher: No, I don’t think so. Prices would be higher. There would be a shift toward other suppliers of natural gas, the Australians. Qatar, perhaps others as well, but, there might be a return toward coal fire generation, and some people would be going coal, yes, that is certainly true.
[00:15:54] Europe would be, without US LNG exports, the European energy situation would be a good deal less favorable. The problem, of course, is that instead of now facing unreliability from Russia, The Europeans now are facing increasing unreliability from America because of this executive order issued by Mr.
[00:16:20] Biden.
[00:16:22] Joe Selvaggi: So we’ve talked about, of course, the effect that domestically on limiting, if we were to limit natural gas production here, if we limit exports, which we are doing, we talked about all the negative You know, follow on of having limits on supply here in the U. S., if we were to, or as we are doing now, if we’re limiting a supply to below what the demand is, which by its nature we are, what does that say for prices, globally, and ultimately, let’s say, global inflation, meaning if the input, if energy is an input to everything we buy, all every European product, every global product we buy, doesn’t essentially the world become a little more expensive, both global.
[00:16:58] For international consumers, but also for American consumers who buy those products.
[00:17:02] Dr. Benjamin Zycher: Yeah, I’d be a little careful about that. rise in energy prices, not really inflation. that, that gets a bit technical, but it’s really not. cause there would be exchange rate effects and other impacts that get complicated and they’re difficult to trace through.
[00:17:16] It’s certainly the case though, that energy would become more expensive. the economies would become smaller. and all of the adverse effects that we could expect from more expensive energy will, will be observed or would be observed if, in the absence of this Biden executive order. The Biden executive order has increased uncertainty, has made investment riskier.
[00:17:40] And it will have long term effects which are not salutary.
[00:17:44] Joe Selvaggi: I want to, again, pivot then back to the U. S., and forgive me if I’m pointing this a little too hard because, frankly , I’m trying to understand. There are those who say this is a terrific idea for U. S. consumers of natural gas, which is to say, if we’re currently sending away 9%, and you mentioned earlier in the show, we’re on track to export even more.
[00:18:02] If we say, look, enough is enough, we’re going to keep our natural gas, we’re going to keep it here. Wouldn’t the rules of supply and demand simply say if we’ve got more natural gas for ourselves rather than export it. Doesn’t that, wouldn’t that mean that surplus would mean lower prices for the gas we produce?
[00:18:16] Dr. Benjamin Zycher: Yeah, that, that’s a commonly held fallacy. you might get a decrease in U. S. natural gas prices in the immediate term. I even doubt that. But over time, you’re going to get an increase in U. S. natural gas prices because investment incentives will be weakened. You’ll get less investment in the discovery and production of natural gas.
[00:18:39] Over time, you’ll get less production, therefore reduction in supply conditions and higher prices. It’s simply that. There are no free lunches. That is simply, the case. It’s a further matter that for technical reasons, that I’m not going to bore the audience with. Because natural gas or fossil fuels generally are not like cut flowers that have to be consumed today.
[00:19:03] Fossil fuels can be consumed either today or next year, and if the market thinks the prices are going to rise next year, they’re going to rise now. and so I think that even the immediate effect might not be much of a decrease at all in, in natural gas prices. look at what happened in 2015.
[00:19:23] We ended the export ban on crude oil. And crude oil prices fell. They didn’t, our crude oil prices fell internationally. They didn’t go up as a result, or domestically because of the, renewed export of U. S. crude
[00:19:40] Joe Selvaggi: oil. What explains that phenomena? Why is it that let’s say having, An unconstrained demand, meaning if the world can compete for our oil and gas, why doesn’t that mean in the long run prices go down?
[00:19:51] Is it because it’s such a profound disincentive for additional production exploration? Is it of that nature?
[00:19:59] Dr. Benjamin Zycher: Well, the efforts by regulation or by statute to limit the export of natural gas will reduce investment incentives. It’s just that simple. And the reduction in investment incentives, riskier investment, and all the rest, will reduce production over time in the medium and long terms, and raise prices.
[00:20:24] Other factors held constant. It just really is that simple. And, so people hoping for a great boon for natural gas consumers in the U.S. as a, as an outcome of natural gas export then, I think are not being very realistic.
[00:20:43] Joe Selvaggi: Let’s turn back then to the whole pretext of this whole executive order, which is to protect the climate.
[00:20:49] we’ve talked about it earlier in the show, but let’s say, okay, if we’re going to take nothing else away from this conversation by limiting exports, the knock on effect is Less natural gas will be consumed. Less research to produce more natural gas will be produced so we’re going to have less natural gas in theory if we make it harder for people to consume it.
[00:21:09] What do you think, given that the climate is the primary concern here and we’re putting the needs of the climate ahead of perhaps obvious financial or international concerns, what do you think the effect of reducing natural gas export and thereby consumption due for the climate. And again, let me say, baked into my question is the assumption that natural gas is a terrific transitional fuel from, let’s say, dirty coal towards, let’s say, more efficient, whatever, unicorn farm we’re going to harness.
[00:21:41] let’s say it’s the best of all fossil fuel alternatives. What do you think the effect will be for having less natural gas?
[00:21:50] Dr. Benjamin Zycher: You wind up with less energy be consumed in total. Within the energy sector, you get more coal use. Which emits roughly double, per BTU, the amount of greenhouse gasses emitted by natural gas consumption.
[00:22:06] I don’t particularly think that’s very important, but that is the reality. You get foreign natural gas substituting for U. S. natural gas. There’s really nothing positive to say about this. It’s a pure political sop by the Biden administration to the environmental left, and they’re not really trying to hide that reality at all.
[00:22:27] And, the climate justification, I think, is really little more than a fig leaf.
[00:22:35] Joe Selvaggi: for those listeners who are, perhaps justifiably concerned about the climate, you’re saying that largely because, A, LNG doesn’t have much effect on climate in general, B, the substitution of coal for, the LNG that’s not produced, May, ironically, harm the climate more than LNG would have, and also, the effect, if any, is so negligible, eight one thousandths of a degree over, between now and 2100, that it’s a meaningless effort.
[00:23:03] So let’s stipulate all that. If it is the fact, again, in this conversation, we said it’s going to have a detrimental effect on the U. S. economy, meaning those jobs that could have been produced by LNG producers and exporters. the cost of inputs of energy, if energy becomes more expensive, it’ll slow down the economy, thereby jobs and all.
[00:23:20] We talked about, it’s the heartland, the Texas and the Pennsylvania’s and the Ohio’s that are going to be hurt. and it has, we’ve agreed there’s very little effect on climate and it may have a detrimental effect on our allies overseas who may rely on U. S. natural gas, as opposed to, some of our unsavory, global participants like, Russia.
[00:23:38] Why would the president choose to do this action, and frankly, in the middle of a presidential election year, if it’s so patently detrimental to both the economy, the, the global stage and the climate? Well,
[00:23:54] Dr. Benjamin Zycher: again, as I said, this is a SOP to the environmental left, and for reasons that I do not understand, the administration seems to believe that the environmental left is a sufficiently important component of its political coalition, that it needs to do this work.
[00:24:19] Keep them inside the tent. We can, I’m not a political expert, we can agree or disagree with that perception, but that seems to be what’s going on. the administration in the various statements it issued a couple weeks ago on this executive order, made no attempt to hide the fact that this is an appeal to the environmental left.
[00:24:41] Them, their applause for this, this, this executive order, et cetera. there’s nothing else to be said in favor of it. And, and, I cannot, I don’t understand what they’re thinking, but that seems to be what it is that they believe the environmental, again, the environmental left is an important part of the coalition and they need to do this to keep them, keep their support
[00:25:04] Joe Selvaggi: firm.
[00:25:05] I want to quote from the memo one more time from the last paragraph. I think it validates your position on why the president may have done this. I’ll quote, quote. We will heed the calls of young people and frontline communities who are using their voices to demand action from those of us who With the power to act, and as America has always done, we will turn crisis into opportunity, creating clean energy jobs, improving quality of life, and building a more hopeful future for our children.
[00:25:33] Do you see anything in this action that creates clean energy jobs, improves quality of life, or builds a more hopeful future? Meaning, if our economy is hobbled by this, how is it going to improve the quality of life? Do you have a sense?
[00:25:48] Dr. Benjamin Zycher: There is no positive dimension to any of this. None.
[00:25:53] Joe Selvaggi: You’re on the front lines of these debates, both in the intellectual space, but also what you testify in front of Congress.
[00:25:58] It seems to me as a lay person, as an onlooker, if the climate is this existential crisis that all many claim it is, do you hear, interest in, in, let’s say alternatives like nuclear? Which, again, I’ve talked about many times on this show. I spent a fair amount of time in the Navy where they had nuclear power plants on, Tin cans in the middle of an ocean run by 19 year olds and we’ve been doing that for 50 years, without incident. What is it, why aren’t we having memos about doubling down on nuclear instead of talking about attacking relatively clean, safe, natural gas?
[00:26:30] Dr. Benjamin Zycher: I think I may differ from you a bit on this.
[00:26:33] I don’t believe new nuclear power stations are economic or competitive with natural gas at, even at five dollars per million BTUs, which is roughly a thousand cubic feet, and prices now are, I think, under three dollars per, for gas under, for a thousand cubic feet or a million BTUs. so I don’t think nuclear power is competitive, frankly.
[00:26:57] there are other
[00:26:59] artificial constraints on the expansion of nuclear power, the wind production tax credit. For complicated reasons that I won’t, I don’t think we have time to get into, which makes it much more difficult to operate nuclear power plants, because the wind producers have incentives to lower their prices to very low levels knowing that the federal government through the production tax credit will make them whole.
[00:27:23] and there are a lot of artificial constraints like that, but I don’t really believe that nuclear power is competitive. Under current market conditions, natural gas power production clearly is competitive and I think that an effort to substitute wind and solar power in place of natural gas, electricity production is seriously misguided.
[00:27:45] Joe Selvaggi: Indeed. I think we may be talking past each other. I think if I take off my, economist hat and put on my, passionate climate concern hat and say if the only thing you worry about is the climate, and you’re convinced that fossil fuels are the reason the climate is warming, and the warming of the climate is an existential threat to mankind, nuclear makes sense, right? It’s not financial sense but it
[00:28:08] Dr. Benjamin Zycher: makes Under that set of assumptions, that is certainly true. whether I believe those assumptions is, dubious, but we can get into that some other time,
[00:28:16] Joe Selvaggi: Fair enough. I want to bring our, all of our listeners along and say, okay, look it strikes me though, then again, if you have, you essentially have a war on natural gas, and you are trying to steer the economy towards electrification and reliance on renewables, wind and air wind and, solar.
[00:28:33] It seems to me more, less concerned about the environment. Again, if you had concern about the environment, nuclear might make sense, but more anti growth, anti sort of human activity. It seems like it is naturally, like a wet blanket on potential growth, both here and abroad. Do you, am I going too far with that sort of observation?
[00:28:51] Dr. Benjamin Zycher: No the anti fossil fuel ideology is fundamentally anti human. If you really believe that fossil fuels are evil, then the things that increase the demand for fossil fuels also are evil. Among those are investments in human capital, education, training, et cetera, as people become more highly educated.
[00:29:12] As they become more skilled, they demand more fossil fuels. It’s that simple. And so if you really don’t like fossil fuels, then you don’t like education and training and health care and all the things that lead people to demand more fossil fuels. I’ve been talking about this for years. For a short discussion that’s, you might look at one of my old essays, Springtime for the Rockefellers.
[00:29:34] Just Google my name and Springtime for the Rockefellers and you’ll, it’ll come up. Yeah, the anti fossil fuel ideology is fundamentally anti human and that is something I think we should not forget.
[00:29:47] Joe Selvaggi: Indeed. you’ve peaked our listeners’ interest in your work. they may disagree or, want to, engage with your arguments.
[00:29:53] Where can our listeners read more about your work, Ben?
[00:29:57] Dr. Benjamin Zycher: all they have to do really is go to aei American Enterprise Institute aei.org, uh, click on scholars and then navigate to my name and, if they’re having trouble sleeping, this stuff is ideal.
[00:30:12] Joe Selvaggi: Your, uh, soporific missives are, are useful for those of us who have trouble sleeping.
[00:30:16] Now, I actually find it quite interesting, and of course this is a lively debate, and I think, very rarely do we see such a naked attempt to essentially hobble, the American economy, really for political reasons. it’s, in my estimation, a, a real tragedy, and it’s really not being covered very much by our international and local national press.
[00:30:36] Oh, I want to thank you for your time. This is your first visit. You’ve been a terrific guest. Thank you for joining me today on Hubwonk, Ben. Thank you
[00:30:43] Dr. Benjamin Zycher: very much indeed. Appreciate it.
[00:30:46] Joe Selvaggi: This has been another episode of Hubwonk. If you enjoyed today’s show, there are several ways to support Hubwonk and Pioneer Institute.
[00:30:52] It would be easier for you and better for us if you subscribed to Hubwonk on your iTunes podcatcher. It would help make it easier for others to find Hubwonk if you offer a five star rating or a favorable review. Of course, we’re grateful if you share Hubwonk with friends. If you have ideas or comments or suggestions for me about future episode topics, you’re welcome to email me at hubwonk@pioneerinstitute.org. Please join me next week for a new episode of Hubwonk.
Joe Selvaggi interviews Dr. Benjamin Zycher, a senior fellow at the American Enterprise Institute, on the impact of President Biden’s executive order to halt liquefied natural gas export approvals. They explore potential economic impacts, the response from trading partners, and the negligible effect on climate.
Guest:
Pioneer Statement on Continuing Slide in Massachusetts’ Revenue
/in Economic Opportunity, Economic Opportunity, Featured, Jobs and Business Climate, News, Pioneer Research /by Editorial StaffJanuary Figures $268M Below a Year Ago
The Commonwealth’s tax collections continue to slide, according to the latest numbers released from the Department of Revenue. January revenue collections totaled $3.594 billion, $268 million below what the state collected in January 2023, and short of the revised benchmark by $263 million. Year-to-date revenue is $21.46 billion, or $212 million less that year-to-date revenue in 2023 and below the Healey/Driscoll administration’s revised benchmark by $263 million — a benchmark that had already been revised downward by $1 billion.
All categories of tax revenue were lower than expected. Regular sales tax and motor vehicle excise were essentially flat, while corporate and business taxes are 8.1 percent below estimates, and withholding is down by 3.1 percent. The slide was most pronounced in individual estimated payments, which are 16.6 percent less than anticipated. This category of income includes interest, dividend, and other nonwage income typically paid by high-income earners.
While it’s too early to determine whether the revenue shortfall is the result of out-migration, 25 states have reduced income tax rates since 2021, according to the Tax Foundation, while only three raised them — California, New York, and Massachusetts. It is worth noting that the revenue decline comes on the heels of a new surtax on incomes exceeding over $1 million, advanced by lawmakers and narrowly approved by Massachusetts voters last November. It is occurring at a time of low unemployment.
Most other states are experiencing revenue growth. Ascertaining the cause of the state’s revenue slide and taking steps to reverse this trend must be a top priority. Pioneer will continue to track revenues and out-migration patterns to fully assess the decline and provide solutions to effect fiscal stability.
But the state not only has a revenue problem; as noted in a Pioneer post last week, it has a spending problem. The Massachusetts state government must tighten its belt and live within its means by reducing FY2025 spending to account for this new fiscal reality. The days of fiscal surpluses, unprecedented increases in year-over-year spending, and flowing federal aid have come to an end.