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John Shimkus: Big Oil Should Write Off Drilling As Business Expense

Shilling for big oil at a House Energy and Power Subcommittee hearing, Rep. John Shimkus (R-IL) declared that, just like “little mom and pop drillers,” multinational corporations deserve to write off billions in tax breaks if they don’t hit oil.

Shimkus defended the $4 billion annual tax breaks the industry receives, claiming the oil giants — that collected a combined $137 billion in profits last year — should write off some drilling as a “business expense”:

Just because you have a lease, it doesn’t mean there’s oil underneath there. You have to look for it. It takes capital expense … I’m tired, I’m really tired of this attack on drilling. Because my little mom and pop drillers, all they want to do is if they don’t hit the well, they want to record that as an expense. That’s all this tax break for big oil is. If they don’t hit, they don’t count it as an expense. You can write it off as a business expense if you drill and you don’t hit the oil. That’s all it is.

Now multiply that to a multinational corporation and it’s the same thing. If they go deepwater drilling and they don’t hit, should they not write that off as a business expense? Sure they should. Just like my mom and pop should do it locally.

Watch it:

What he doesn’t note is that the five oil giants have plenty of excess capital to spend on developing leases. At the end of 2011, they were sitting on $60 billion in cash reserves and spent $38 billion on stock buybacks. They could easily spend some of this $100 billion on exploration.

Not surprisingly, Shimkus’ donors include some of the same big polluters, like Exxon Mobil. Oil and gas is Shimkus’ fifth-largest donor this election cycle and he’s collected a $311,000 career total from the industry.

At a GOP-led hearing already stacked with oil and gas spokesmen like American Petroleum Institute President Jack Gerard and American Fuel and Petrochemical Manufacturers President Charles Drevna, the focus was less on gas prices and more on protecting oil subsidies.

Brutal Droughts, Worsened By Global Warming, Threaten Food Production Around The World

Severe drought (or Dust-Bowlification) “is the most pressing problem caused by climate change.” As I wrote in the journal Nature last year,  “Feeding some 9 billion people by mid-century in the face of a rapidly worsening climate may well be the greatest challenge the human race has ever faced.”

A vulture picks at a dead steer. Ranchers say many cattle have died because of the drought that has ravaged much of Mexico.

A vulture picks at a dead steer. Ranchers say many cattle have died because of the drought that has ravaged much of Mexico. NPR.

As far back as 1990, NASA scientists projected that severe to extreme drought in the United States, then occurring every 20 years or so, could become an every-other-year phenomenon by mid-century if temperatures kept rising.  They did.

In fact, a major 2011 NOAA report concluded, human-caused climate change is already a major factor in more frequent Mediterranean droughts.

A comprehensive 2011 study of drought, by Aiguo Dai of the National Center for Atmospheric Research, looked at ”Characteristics and trends in various forms of the Palmer Drought Severity Index during 1900–2008.” The PDSI is “the most prominent index of meteorological drought” used in the U.S.  That study concluded:

All the four forms of the PDSI show widespread drying over Africa, East andSouth Asia, and other areas from 1950 to 2008, and most of this drying is due to recent warming. The global percentage of dry areas has increased by about 1.74% (of global land area) per decade from 1950 to 2008….

Thus, I believe that our main conclusion is robust that recent warming has caused widespread drying over land. And model predictions suggest that this drying is likely to become more severe in the coming decades.

A look at the headlines and ledes from just the last month make clear that drought is slamming the world right now:

And last week I reposted this story, “Syria: Climate Change, Drought and Social Unrest.”

While the Texas drought has gotten much of the attention in this country, what has happened in Mexico is equally devastating. Since Mexico is projected to suffer even worse warming-driven Dust-Bowlification in the coming decades — and that will certainly have consequences for the United States — it’s worth looking in a little more depth at what’s happening to our neighbor to the south:

Read more

NEWS FLASH

President Obama: Oil Is ‘Fuel of the Past’ | Speaking at a Daimler truck plant in Mount Holly, N.C., President Barack Obama threw down the gauntlet on the issue of America’s oil addiction, challenging the U.S. to decrease its dependence on oil. “We need to invest in the technology that will help us use less oil in our cars and our trucks, and our buildings, and our factories,” Obama said. “That’s the only solution to the challenge. Because as we start using less, that lowers the demand, prices come down. Pretty straightforward.” In an effort to sway consumers to buy more fuel-efficient vehicles, Obama proposed making electric cars more convenient and a bit more affordable by 2020, in addition to offering greater tax incentives to those who take the plunge.

Watch:

Fatima Najiy

Dirty Industry, Dirty Fight: Big Coal Is On The Ropes, But Not Down For The Count

by George Black, reposted from OnEarth Magazine

Bad, bad week for Big Coal, epitomized by the announcements that two big utilities, Midwestern Generation and GenOn Energy, are to close ten coal-fired power plants in the Northeast and the Midwest, including two within the Chicago city limits.

For Massey Energy and the giant company that owns it, Alpha Natural Resources, the news was even worse. The name Massey will probably ring a bell. It’s the colossus of the Central Appalachian coalfields, and in a dirty industry it has a particularly dirty reputation, both for its fondness for tearing off the tops of mountains and for its conduct below ground. Most of its active mines are in West Virginia, and that’s where the Upper Big Branch Mine is located, in the town of Montcoal.

Twenty-nine miners died in an explosion at the Upper Big Branch in April 2010, an event now firmly inscribed in the ledger of great industrial disasters, up there with New York City’s Triangle Shirtwaist Factory fire of 1911, in which more than 100 garment workers burned, jumped, or fell to their deaths. (That of course was in the bad old days — or good old days, depending on how you look at it — when industry didn’t have to worry about pesky government regulations.)

But even Big Coal is subject to the law these days. Last week, U.S. Attorney Booth Goodwin filed charges of criminal conspiracy against mine superintendent Gary May, alleging that he had “plotted with others known and unknown” to conceal lethal hazards at the Upper Big Branch. A former security chief at the mine, Hughie Elbert Stover, was sentenced Wednesday to a three-year jail term for lying to federal investigators and attempting to destroy company documents by tossing them into a trash compactor.

May is accused, among other things, of deliberately disabling a methane gas monitor and pumping fresh air into sections of the mine to provide a kind of Potemkin Village tour to visiting inspectors from the federal Mine Safety and Health Administration — an agency to which the word toothless is frequently attached — who were there to sample levels of airborne coal dust.

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Infographic: How Western Coal Travels To The Nation’s Most Polluting, Lethal Power Plants

The folks at High Country News have put together this fascinating infographic tracking where coal for the country’s dirtiest, most lethal power plants comes from. The graphic only tracks Western coal, which overwhelmingly comes from the Powder River Basin.

This isn’t a surprise: Powder River Basin coal is used for roughly 40% of coal-generated electricity in the U.S., and accounts for 14% of our greenhouse gas emissions. But it is quite interesting to see just how much coal comes from the 10 mines in that area — and what kind of impact it has.

Click on the image to see the full sized graphic.

Related Posts:

Gimme Bomb Shelter: FEMA Pushes For Disaster-Proof Green Buildings

FEMA trailers lined up after Hurricane Katrina

by Greg Hanscom, reposted from Grist

When people say, “Call the National Guard,” they really mean Craig Fugate. As head of the Federal Emergency Management Agency (FEMA), he’s the guy who swoops in after a tornado or flood to clean up the mess with executive muscle and a pool of cash from the federal treasury. So perhaps it’s no great surprise that he supports efforts to create buildings that are essentially apocalypse-proof: For this guy, every day is another disaster.

Of course, there’s also the fact that he’s actually been working on credit. “I owe you a lot of money from the National Flood Insurance Program — about $18 billion,” Fugate told a group at the National Press Club last week. “Those are payouts from 2005 hurricane season.”

You may remember that season for its unruly offspring: Dennis, Emily, Katrina, Rita, and Wilma. And climate scientists tell us there are many more to come. “We cannot afford to continue to respond to disasters and suffer impacts — particularly looking at large-scale catastrophic disasters — under the current program,” Fugate said. “It will fail.”

The solution? Get smarter about how and where we build.

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Oil Lobby Chief Jack Gerard Uses Out-Of-Context Finding To Protect Oil Subsidies

American Petroleum Institute President Jack Gerard wants you to know: “We get no subsidies in the oil and gas business.” Of course, the industry receives a total $40 billion in tax breaks over 10 years. Speaking today at a House Energy and Commerce subcommittee hearing on gas prices, Gerard defended the political favoritism citing an out-of-context finding from a Congressional Research Service study.

Gerard claimed gas prices would increase as a result of ending big oil tax breaks. His testimony echoed API’s previous statements that Obama’s call to end oil subsidies is “discriminatory“:

It calls for “all-of-the-above” then threatens the companies that could lead an energy renaissance with $85 billion in discriminatory tax increases.

The likely report Gerard seized on is the same House Speaker John Boehner has used from the Congressional Research Institute finding “On what would likely be a small scale, the proposals also would make oil and natural gas more expensive for U.S. consumers and likely increase foreign dependence.” The key point is the negligible impact, considering the $137 billion the big five oil companies made last year. Yet another CRS report, dated May 2011, debunked the oil industry’s defense of subsidies, finding gas prices won’t go up:

It is widely accepted that a proportional change in taxes on profit affects neither the firm’s incremental costs or revenues, and therefore does not change its its behavior with respect to output. Since output does not change, there is little reason to believe that the price of oil, or gasoline, consumers face will increase.

The oil industry is one of the most heavily subsidized industries, with “tax breaks available at virtually every stage of the exploration and extraction process,” the New York Times writes. The industry is also one of the most politically influential, spending over $146 million on lobbying in 2011 alone. API itself has lobbied with over $25 million since 2008 and spent $30,500 on House candidates last year.

It’s unsurprising Republicans in the same room as Gerard today — taking $5.6 million in career contributions from oil and gas — sat idly by while the oil lobby defended subsidies.

Debunking The Error-Riddled Wall Street Journal Editorial on Wind Energy

by Richard Caperton and Stephen Lacey

The Wall Street Journal released another error-riddled editorial against the wind industry today calling for an end to the production tax credit. The piece is so bad — and features such a broad range of spin and inaccuracies — it deserves a special, point-by-point debunk.

The WSJ starts off by incorrectly describing how renewable energy tax credits work, almost immediately destroying editorial credibility:

Congress finally ended decades of tax credits for ethanol in December, a small triumph for taxpayers. Now comes another test as the wind-power industry lobbies for a $7 billion renewal of its production tax credit.

The renewable energy tax credit—mostly for wind and solar power—started in 1992 as a “temporary” benefit for an infant industry.

Firstly, the production tax credit is not used for solar power — and it never has. Solar and wind power have different characteristics and thus require different tax treatments. This may seem like a small point, but if WSJ editors are going to rail against these tax credits, they should be able to understand what they’re talking about.

Nope. There are more factual errors on these tax credits:

The “1603 grant program” pays up to 30% of the construction costs for renewable energy plants (a subsidy that ended last year but which President Obama calls for reviving in his budget). Billions in Department of Energy grants and loan guarantees also finance the operating costs of these facilities. Wind producers then get the 2.2% tax credit for every kilowatt of electricity generated.

The tax credit is 2.2 cents per kilowatt-hour, not “2.2% … for every kilowatt.” This deserves a correction.  Seriously, the WSJ shouldn’t have people writing about these issues who can’t tell cents from percent and kilowatt-hour from kilowatt. This is a joke.

And let’s remember that one justification for the tax credit is to makeup for the fact that taxpayers are bearing the harm from fossil fuels — see Economics Stunner: “Oil and Coal-Fired Power Plants Have Air Pollution Damages Larger Than Their Value Added.” Taxpayers are effectively subsidizing polluting forms of energy through the healthcare system!

The 1603 program is also misrepresented here.  The WSJ makes it seem like companies were taking advantage of both the grant program and production tax credits at the same time. In fact, the grant was created to take the place of a tax credit during the height of the economic crisis when the tax financing market imploded.

The characterization of Senator Bingaman’s clean energy standard is also ludicrous:

Twenty years later, the industry wants another four years on the dole, and Senator Jeff Bingaman of New Mexico has introduced a national renewable-energy mandate so consumers will be required to buy wind and solar power no matter how high the cost.

By claiming that a national target will force utilities to buy renewable power “no matter how high the cost” is factually wrong.  The CES has an price ceiling of 3 cents per kwh for clean energy credits. The WSJ is intentionally misleading its readers about the facts of this bill. The editorial board should be embarrassed.

But they clearly aren’t:

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Big Oil Trade Group Flooding Airways With Pro-Industry Propaganda Ads

Vote4Energy.org

American Petroleum Institute ad campaign

Gasoline companies — driven by oil speculation and profits — continue to charge more and more for their product every day. How is the industry spending the money it’s taking from customer’s wallets?

In recent weeks, they have flooded television programs with television ads promoting the causes of the industry. The American Petroleum Institute (API) calls itself “the only national trade association that represents all aspects of America’s oil and natural gas industry.” With money from its more than 400 corporate members, the group has been running spots like “Vote 4 Energy,” trying to convert angry consumers into civic allies.

In the 30-second spot, a series of unidentified people claim that they vote and support key oil industry priorities.

I vote. I vote. I vote for American jobs. I vote. I vote for more domestic energy — energy from all sources, to get America working again. I vote. I vote. I vote for energy security that will come from developing our own energy resources. Like oil and natural gas. Right here. Right now. I vote. To re-energize America with American energy. Learn more at VoteforEnergy.org.

Watch the ad:

Other spots in the series take aim at “new energy taxes” and cheer oil imports from Canada.

As Greenpeace reported in December, the “voters” were fed lines by the media production company and the carefully scripted spots were far more astroturf than grassroots.

Companies like Chevron are also running ads on their own. It is running a series of similar feel-good sports highlighting the company’s support for small business and its work helping the economy of the oil-exporting nation of Angola.”

The ads of course, make no mention of the myriad environmental and safety risks of deregulated offshore drilling, hydrofracking, and tar sands pipelines.

But, in putting the industry on the side of voter participation, if nothing else Big Oil has created American jobs — for television ad-makers.

What Is A Climate Pragmatist To Do In A World Where The Loudest Voices Urge Denial, Delay Or Inaction?

We live in a very unpragmatic world, from the perspective of climate change. As Elizabeth Kolbert wrote back in the day:

“It may seem impossible to imagine that a technologically advanced society could choose, in essence, to destroy itself, but that is what we are now in the process of doing.”

I think we can all agree that isn’t terribly pragmatic. Or at least some can (see IEA: World on Pace for 11°F Warming, “Even School Children Know This Will Have Catastrophic Implications for All of Us”).

Worse, those with the loudest voices urge denial, delay and inaction. And to define my terms, by “loudest voices” I mean those who have the biggest megaphone or who can buy one. That would be Big Media and the major politicians, on the one hand, and the fossil-fuel-funded anti-science disinformation campaign, on the other. They are either most silent or mostly hostile on the subject of climate action (see The Myth of ‘Constant Repetition of Doomsday Messages’ on Climate).

Yes, there are some medium-size voices in the scientific and environmental communities who endeavor to communicate a message of urgency, but it isn’t generally mediated to the general public by those in the mediating business (see “Network News Coverage of Climate Change Collapsed in 2011“).

What is a climate pragmatist to do in such a world?

A VERY BRIEF HISTORY OF PRAGMATISM

To define my terms, “the word pragmatism derives from Greek πρᾶγμα (pragma), ‘deed, act’,” and, as everyone with access to Google presumably knows, “pragmatism is a philosophical tradition centered on the linking of practice and theory.”

Pragmatism is about action driven by theory:

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NPR Ethics Handbook Targets False Balance: Reporters Must Note ‘If The Balance of Evidence … Weighs Heavily On One Side’

NPR now commits itself to avoiding the worst excesses of “he said, she said” journalism.

by Jay Rosen, cross-posted with permission from PressThink

Within the world of pressthink there are occasional “events,” things that happen and by happening bring to light shifts in thought. It happened last week when NPR released a new document, an ethics handbook headlined: This is NPR. And these are the standards of our journalism.

Much of what’s in the handbook is Journalism 101. Much of it resembles an earlier document, The NPR Code of Ethics and Practices, which I reviewed in the writing of this post. (The new handbook replaces that earlier code.) But there are some crucial differences, and some of them speak directly to earlier posts at PressThink about the troubles at NPR.

In my view the most important changes are these passages:

In all our stories, especially matters of controversy, we strive to consider the strongest arguments we can find on all sides, seeking to deliver both nuance and clarity. Our goal is not to please those whom we report on or to produce stories that create the appearance of balance, but to seek the truth.

and….

At all times, we report for our readers and listeners, not our sources. So our primary consideration when presenting the news is that we are fair to the truth. If our sources try to mislead us or put a false spin on the information they give us, we tell our audience. If the balance of evidence in a matter of controversy weighs heavily on one side, we acknowledge it in our reports. We strive to give our audience confidence that all sides have been considered and represented fairly.

With these words, NPR commits itself as an organization to avoid the worst excesses of “he said, she said” journalism. It says to itself that a report characterized by false balance is a false report. It introduces a new and potentially powerful concept of fairness: being “fair to the truth,” which as we know is not always evenly distributed among the sides in a public dispute.

Maintaining the “appearance of balance” isn’t good enough, NPR says. “If the balance of evidence in a matter of controversy weighs heavily on one side…” we have to say so. When we are spun, we don’t just report it. “We tell our audience…” This is spin! (Update: The new policy is already having an effect.)

There was nothing like that in the old Code of Ethics and Practices, which dates from 2003. So why the change? I asked Matt Thompson, Editorial Product Manager at NPR. He co-wrote the handbook with Mark Memmott of NPR. Here’s our exchange:

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South Dakota Native Americans Blockade Tar Sands Shipment Through Their Lands, Five Arrested

On Monday, dozens of Native Americans in South Dakota set up a roadblock to prevent trucks from shipping massive tar-sands equipment to Canada until tribal police intervened, arresting five. The Black Hills Sioux Nation Treaty Council and Oglala Sioux Tribe are adamantly opposed to the construction of the Keystone XL pipeline because it crosses through two reservations and their rural water supply system.

The trucks were transporting “treater vessels” across the Pine Ridge Reservation’s Treaty territory, a route that was purportedly worked out in an agreement between the state of South Dakota and Totran Transportation Services, Inc. without the consent of the Oglala Lakota Nation. The truck drivers entrusted with hauling the equipment were instructed to cut through Oglala lands in an attempt to avoid paying South Dakota $50,000 per truck — or $100,000 — in fees to use its state highways.

The Texas semi-trucks, transporting 1.25Million-dollar “Treater Vessels” used in oil, gas and element separation, were stopped in their tracks as they approached the human roadblock…

…The drivers were questioned by those forming the blockade as to why they were crossing Oglala lands. One of the drivers responded that they did not know they were crossing Indian land, only that they were following company directives regarding their assigned routes and that their Canadian Corporation had received this particular route information as a result of a partnership with the State of South Dakota, whose elected officials have always supported the Keystone XL pipeline.

Oglala Tribal police arrived on the scene immediately, and after asking the crowd of around 75 people to disperse, handcuffed five demonstrators and charged each with disorderly conduct. The policemen then escorted the semi-trucks and their payloads back onto the main highway.

Because the Keystone XL pipeline is routed through the Pine Ridge and Rosebud Indian Reservations, it crosses the Oglala Sioux Rural Water Supply System in two places, potentially endangering anyone who might rely on that particular water supply to perform typical daily functions.

-Fatima Najiy

NEWS FLASH

If Polluters’ Lobbyists Were Asthmatic Children | A new ad by the Sierra Club and Natural Resources Defense Council poses the question: What if you replace Congress’ polluter lobbyists with asthmatic children? “If every polluter’s lobbyist around Congress was suddenly replaced by severely asthmatic children, then maybe Congress wouldn’t always be trying to gut clean air standards,” a narrator says. The ad buy raises awareness about the EPA’s new standards for carbon pollution from power plants and celebrates the upcoming release of the rule, which has been under review for four months.

Watch it:

How To Slash Oil Dependence

Today’s hearing on high gasoline prices is like the rerun of a bad movie. It’s up to you to change the finale. Congress must slash oil dependence by supporting the doubling of vehicle fuel economy standards, investing in alternative fuels, rejuvenating our public transportation infrastructure, and paying for it by ending Big Oil tax breaks. The American people would give this ending a standing ovation.

Below is testimony from Daniel J. Weiss, senior fellow at the Center for American Progress, to the House Subcommittee on Energy and Power on how to combat high gas prices.

The recent spike in oil and gasoline prices is not a first-time event. It has occurred twice previously in the past four years. Fortunately, we are better prepared to withstand its impact because we are using less oil due to the vehicle fuel economy standards adopted by President Obama in 2009.

We are also producing more of our own oil. For the first time since President Clinton, the United States is producing a majority of the oil we rely on to power our vehicles and economy. We are less reliant on other nations for oil and send less of our treasure abroad.

This progress, however, cannot mask the fundamental fact that we rely too much on a single fuel and are thus extremely vulnerable to volatile prices or international events beyond our control. To end the oil price rollercoaster that inflicts real damage to our economy and middle class, we must dramatically curtail our reliance on oil as our primary transportation fuel.

Read more

Clean Start: March 7, 2012

Welcome to Clean Start, ThinkProgress Green’s morning round-up of the latest in climate and clean energy. Here is what we’re reading. What are you?

Robert F. Kennedy Jr. tweeted on Tuesday: “Speaking of prostitutes, big oil’s top call girl Sen Inhofe wants to kill fuel economy backed by automakers, small biz, enviros, & consumers,” the New York-based environmentalist wrote Tuesday on Twitter. [Politico]

Mayor Michael R. Bloomberg announced Tuesday that the city was looking for a pilot “state of the art facility” that could handle a maximum of 450 tons of trash per day — out of a total of 10,000 tons currently in need of disposal — with plans to double that capacity if successful. [NYT]

Obama will be in North Carolina the morning after Super Tuesday. The White House says the president will highlight the government’s fuel efficiency standards for cars and trucks. [AP]

Japan is in “final-stage” talks with the U.S. on cutting its imports of Iranian crude oil, Japan’s foreign minister said Wednesday, as the country seeks an exemption from U.S. sanctions on Iran that it says will damage its economy. [WSJ]

One year after BP chief executive Robert Dudley apologized at a conference for his company’s massive oil spill in the Gulf of Mexico. One year later at the same conference, Dudley is not speaking, and BP makes only a small appearance on the entire five-day schedule. [National Journal]

More natural gas-powered vehicles will hit the market soon, as rising gasoline prices, booming natural gas production and proposed tax credits make them a more attractive option. But they’re a long way from being a common sight in U.S. driveways. [AP]

Senate Republicans blocked progress Tuesday on a $109 billion transportation bill, leaving unsettled whether Sen. Mary Landrieu will get a vote on her amendment to give the Gulf states 80 percent of any Clean Water Act fines assessed in the 2010 BP oil spill. [Nola]

“As the Republican presidential primary race drags on, the politics of global warming seem ever more divorced from scientific reality. The process of scientific inquiry, meanwhile, offers yet more warnings about what might happen if fractured climate politics stymie long-term action.” [Washington Post]

Sen. Dean Heller is taking the road less traveled among GOP candidates: The Nevada Republican says he’s better for clean-energy interests than his chief Democratic rival. [Politico]

March 7 News: As GOP ‘Race Drags On, The Politics Of Global Warming Seem Ever More Divorced From Scientific Reality’

Other stories below: East Asian Air Pollution Can Contribute To 20% Of California’s Smog

http://0.tqn.com/d/politicalhumor/1/0/I/y/2/Climate-Denial.gif

The threat of carbon emissions on the world’s oceans (Washington Post editorial)

As the Republican presidential primary race drags on, the politics of global warming seem ever more divorced from scientific reality. The process of scientific inquiry, meanwhile, offers yet more warnings about what might happen if fractured climate politics stymie long-term action.

Emitting massive amounts of carbon dioxide doesn’t just change the chemistry of the atmosphere; it makes the oceans more acidic. Predicting the impact on ocean ecosystems involves educated speculation, which often involves applying evidence of what has happened before. In the latest edition of the journal Science, a team of researchers reckons that today’s human-emitted CO2 is increasing ocean acidity far faster than previous, naturally occurring episodes scientists have studied, which themselves appear to have had very alarming results.

The harrowing history is recorded in mud samples millions of years old, taken from the sea floor near Antarctica: It reveals a mass extinction of single-celled organisms that no doubt caromed far up the food chain. A similar effect today could kill off coral, plankton and mollusks, constricting the diets of a range of fauna that rely on them, including salmon — and humans….

Would that more Republicans would begin to operate in the world of scientific reality.

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