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The terrifying implication of the LIHEAP cuts?

February 14th, 2011 · No Comments

As rumored prior to the release of President Obama’s proposed 2012 budget, the Low Income Home Energy Assistance Program (LIHEAP) program will take a serious hit, roughly a 50 percent cut. As David Dayen put it prior to the budget’s release,

The Administration says this lowers LIHEAP assistance to where it was in 2008. But that was before an economic crisis and an increase in poverty. Simply put, more people need this service now. They also intimate this is a subsidy for dirty energy companies, as most heating gets derived from coal-fired power plants. This is a bizarre kind of statement, which assumes that there’s no way to move away from coal and make sure Americans don’t freeze in their homes at the same time.

Well, this evening, I joined a number of bloggers in a call with several White House officials (audio available there), Congressional Budget Office spokesman Ken Baer and White House adviser David Plouffe.  While discomfitted by much of what I heard and about issues for which I wished to ask questions but didn’t have the opportunity, something came up that inadvertently might have revealed something quite concerning about White House thinking. It is unlikely that this was a satisfying call for anyone (including Baer and Plouffe). As Susie Madrak put it:

It wasn’t likely that bloggers would be happy with the conversation, since once we got into the details of arguing different cuts, it looked as though we were buying into the White House frame that the cuts were urgently needed in the first place, and most of us don’t believe that’s true.

Baer’s opening remarks focused on “shared sacrifice.” Some bloggers weren’t buying it. I know I didn’t.

Many questions challenged the imbalance, with marginal costs for the richest one percent and significant cuts to the most vulnerable among U.S.  Not surprisingly, the cut to LIHEAP was raised, whether it was appropriate to cut assistance to poor people amid our economic troubles.

Ken Baer repeated the explanations that were swirling around well prior to the budget’s release:

  • LiHEAP skyrocketed in 2008 with oil prices and didn’t get cut that much as oil prices fell.
  • This is, therefore, simply recovering the increase that occurred during that period of very high oil prices.

Sounds reasonable, no …?  We had a spike of oil prices and, well, we won’t have it again so we can go ahead and cut these excess funds.

A minor problem, anyone note that oil topped $100 / barrel this past week?  Or, that there are knowledgeable people (such as Shell’s ex-president) predicting $5+ gallon gasoline in 2012 due to increasing global demand and an inability to increase supply to meet that demand.

What is the terrifying implication of the Baer’s discussion of the LIHEAP cuts?  This sort of thinking that the past spike was abnormal suggests that Peak Oil simply isn’t part of the White House discussion.

The risks of Peak Oil for the U.S. economy and national security are hard to exaggerate.  In short, Peak Oil refers to a physical reality that ‘cheap and easy oil production’ will inevidently peak out and start an inexorable decline.  While alternative fuel supplies might emerge, they will almost certainly have worse EROEI (energy return on energy invested) ratios and our oil (liquid fuel) supplies will almost certainly trail (fall short) of desired global demand.  We are burning 10s of  (nearly 100) fossil fuel calories for every calorie of food that makes it to our table. What happens when oil prices spike and, well, might not even be available?  As oil peaks and production declines even as demand increases, the 2008 price spike and collapse might look like a mild event in retrospective. The most critical tool to dealing with this challenge: openly recognizing that it exists and taking demand destruction steps (efficiency) so that we might keep aggregate demand within the production capability of the global oil system.

Baer’s comments suggest that a core assumption in the budget preparation is that LIHEAP can be cut because the 2008 oil price rise was something unusual rather a presage of what we are likely to see with ever-increasing frequency with ever greater severity.

When looking to the House Republicans anti-science rejection of reality, we would hope to turn to the White House for reality-based sanity.  Baer’s few words makes me wonder whether the White House has a sanity-based realistic perspective about Peak Oil.

PS/update: See David Dayen’s write up at FireDogLake, On Blogger Call, A Claim that Spending Cuts Would Hurt in March But Not October.

And if I had the chance to ask a question … [an update]

While there is no such thing as perfect, if you listen to the bloggers’ call, I believe that you would likely agree that the questions were reasonably strong and sought to push the two for answers on serious issues. I did not have the chance to ask a question and was flipping through four four different questions that I was considering. I think that I would have used this one:

If, in the 21st century, energy challenges (such as Peak Oil) and environmental challenges (like Global Warming) represent viable existential threats to the nation, then shouldn’t these be considered as core national security issues? And, if these are national security issues, why should Department of Energy (and other programs, such as rail programs) programs designed to address Peak Oil and create clean-energy programs face an artificial freeze to spending that we simply aren’t seeing in the Department of Defense? Quite simply, we need to ask what is the best path to assure national security and are there questions as to whether spending $10s of billions to develop a new manned bomber do more to secure American national security than investing these same resources to cut our oil usage. How does the budget reflect this?

The response almost certainly would not have satisfied me, with talk of ‘energy innovation funding in DOE’ and High-Speed Rail likely to have come. (And, likely without mention of the serious things going on in the Defense Department to reduce the military’s oil dependency.) Even so, it would have put several issues on the table meriting discussion.

And, by the way, a note of appreciation for the WH for having calls like this — they don’t simply invite ‘cheerleaders’ and they often get, as I would suggest here, questions that don’t seem to come from the traditional media outlets.

A note about LIHEAP. This program has always troubled me in the sense of ‘give a man a fish, he has dinner. Teach a man to fish, he has food for a lifetime’ Okay, putting aside the issue of stressed fish stocks, the LIHEAP solves immediate problems during a winter while not doing anything to solve (or even ameliorate) longer term problems. To me, far more appropriate policy would be to strengthen and accelerate weatherization and other energy efficiency programs in a path to reduce the necessity for LIHEAP with each passing winter season.

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Tags: Energy · Obama Administration · peak oil · politics