September 2, 2022

Don’t Believe the Carbon Capture and Storage Hype

Posted on September 2, 2022 by Staff Writer

Climate change pressures have been mounting for roughly a century, threatening the globe with catastrophic weather events and resource instability. Increases in atmospheric carbon dioxide and greenhouse gases have led to these changes. And the use of fossil fuels has been recognized as one of the major culprits contributing these developments. One potential solution (other than a move to renewable, sustainable energy forms) involves sequestering the carbon dioxide produced. Often referred to as carbon capture and storage, this has been proposed as a way to slow unwanted climate change. And policies have increasingly awarded government energy subsidies toward these efforts.

In recent developments, trends favoring carbon capture and storage have advanced even further. As part of the Inflation Reduction Act, massive government energy subsidies will continue to support this strategy. Assumably, this will reduce carbon dioxide in the atmosphere and lead to greater climate stability. But as always, the devil is in the details. Rather than serving to improve climate change and reduce dependence on fossil fuels, these policies will have the exact opposite effect. But that’s not stopping many in the fossil fuel industry to tout carbon capture and storage as the best climate change solution. The benefits these new policies offer are simply too good to pass up.

“…the concern I’m hearing from people — and I think this is a legitimate concern — is that this could start us down the path of major [carbon capture and storage] projects that lock in fossil fuel infrastructure rather than transition it responsibly to a different direction.” – Danny Cullenward, policy director of CarbonPlan

The Truth about Carbon Capture and Storage

The basic process in terms of carbon capture and storage is exactly what one might expect. Carbon dioxide is captured before being released into the atmosphere. Then, it is pumped underground and stored to prevent its release. From a climate change perspective, this sounds quite attractive. But what isn’t often appreciated is the industries using these techniques and reaping government energy subsidies in the process. Specifically, coal, oil, and natural gas industries account for more than 90% of the companies utilizing this process. In the process, are receiving billions of dollars in government energy subsidies that can be reinvested into their own infrastructures.

In US companies producing natural gas, carbon dioxide is separated from methane during the refining process. This carbon dioxide, which is captured by definition, is then pumped underground. However, the purpose of pumping it underground isn’t necessarily to store it away from the atmosphere. The actual use of this carbon is to further extract hidden oil reserved underground to produce higher volumes of oil. Of all the projects involved in carbon capture and storage, four companies producing natural gas and oil account for 70%. Thus, instead of actually slowing fossil fuel production, carbon capture and store is actually incentivizing its growth.

(The Green Movement is causing more harm than good. Read this Bold story to find out why.)

“If we are truly committed to a just transition off of fossil fuels, we should not be looking for ways to perpetuate oil extraction in old oil fields.” – Catherine Garoupa White, Executive

Legislative Policies and Subsidy Changes

When it comes to government energy subsidies, there’s a long history involving carbon capture and storage. Over the years, the federal government has funded several such projects and provided tax credits as well. One project in Mississippi, the Kemper Power Project, received over $7.5 billion in support. Yet, it failed in 2017 with the carbon capture plant being demolished in 2021. Other similar projects have also been reported in Illinois, Texas and California. And of all the programs supported, a very small minority have succeeded. The net result is that billions of taxpayer dollars have been squandered with little to nothing to show for it.

When it comes to a climate change solution, carbon capture and storage isn’t all it’s cracked up to be.

Recently, the Inflation Reduction Act has been signed into law, and with it comes even more carbon capture and storage support. While the legislation does advance renewable energy investments, it continues to support carbon capture projects. In fact, government energy subsidies were significantly increased over prior levels. They went from $35 per metric ton of carbon capture and storage to $60 per metric ton. Despite so many past failures in these types of efforts, financial supports were increased. And this even occurred in the face of declining costs for developing renewable energy sources. From this perspective, it seems that the nation’s energy policies are continuing to waste precious investment dollars. This is hardly an effective plan for climate change and certainly not one for a sustainable energy future.

“I think we have to tip the balance to more direct emission reductions…I’m concerned that we’re unwittingly extending the life and production and consumption of fossil fuels.”- Davina Hurt, Member of the Air Resources Board

A More Logical Approach to Energy Policy

In considering a more rationale energy policy approach, it’s clear that green energy renewables cannot fully support national needs. Embracing renewables too aggressive will undoubtedly cause more harm than good in the near-term. In this regard, natural gas and oil energy is needed to meet consumer demand. And clean energy efforts must be pursued to reduce carbon emissions along the way. But time and time again, carbon capture and storage pursuits have failed. Now, with increases in government energy subsidies, resources will again be allocated in ways that are counterproductive. Carbon sequestering offers limited advantages, and they are now being used to boosts industries that should be cutting back. For everyone and especially policymakers, it’s important we ignore the hype and focus on what’s realistic for our energy future.

Want to control your cost efficiency and protect your bottom line? Bold Business can help.

What the Inflation Reduction Act Means for Businesses

Posted on September 2, 2022 by Staff Writer

In today’s polarized political climate, it seems rare that major legislative changes are passed through Congress. But one such bill was recently signed into law by President Biden: the Inflation Reduction Act of 2022. While the laws name suggests its essential purpose is to tackle rising inflation, this is a little misconceiving. The bigger impact of the law involves its effects on climate change, healthcare, and taxation revenues. And each of these areas of change will result on some legislative effects on businesses. For small and large businesses alike, it’s important to appreciate exactly what the Inflation Reduction Act of 2022 could mean. The following offers some important insights in this regard.

“The way to think about this is not about inflation at all, but about the tradeoffs between helping people who need more help, especially in health care and reducing carbon, versus the potential impact on future investment.” – Kent Smetters, Faculty Director of the Penn Wharton Budget Model

Tax and Revenue Impacts on Business

One of the most obvious concerns for any business is the impact the Inflation Reduction Act of 2022 will have on taxation. The legislation effects on businesses are two-fold from a general perspective. The first involves new taxation laws that are designed to collect more from large corporations. Specifically, the law requires all corporations to pay a minimum 15% tax rate for revenues over $1 billion. No matter what deductions may exist, this is the lowest rate for these companies. In essence, this tax change alone is expected to generate $300 billion in revenues yet only affect 150 companies. While this may be unwelcomed by these specific enterprises, small businesses may become more competitive in the process. Likewise, for companies earning under $1 billion in revenues, taxation amounts aren’t likely to change.

The second potential effect of taxation changes of the Inflation Reduction Act of 2022 relates to IRS enforcement. The law provides $80 billion in IRS reinforcement with the hiring of 87,000 new employees. Of course, the knee-jerk reaction to this news usually triggers audit fears among most business owners. Here again, the goal is to go after bigger corporations that have been failing to pay what is owed the IRS. Insufficient IRS agents in the past have not only led to delays in processing returns but insufficient tax reviews as well. According to financial experts, the legislative effects on business regarding taxation will again only affect the big earners. Small and medium-sized businesses are not expected to see any increase in audit rates.

“Because of limited resources, the IRS has been disproportionately targeting lower-income Americans rather than the big tax cheaters. These new funds make it possible for the IRS to go after the big guys.” – Rhonda Abrams, USA Today journalist

Energy-Related Impacts on Businesses

One of the most significant aspects of the Inflation Reduction Act of 2022 involves effects on climate change. Billions of dollars of subsidies and tax credits are being provided for a number of programs that reduce greenhouse gas emissions. Major tax credits are being provided for consumers buying electric vehicles and roof solar panels. Likewise, supports for carbon capture and storage and other renewable energy solutions are also included. Based on these efforts, it is predicted that the U.S. will fall 40% below its 2005 greenhouse gas emissions by 2025. Thus, proponents of the Inflation Reduction Act of 2022 cite this as a major achievement for climate change.

(The climate change problem is being handled by big business–here’s a list, courtesy of Bold!)

At first glance, the legislative effects on businesses from this component of the law may not seem significant. But in actuality, the subsidies and tax credits also benefit small and large businesses alike. Certain large energy corporations involved in renewable energy will see a marked increase in demand and support. Even oil and natural gas companies come out ahead by employing carbon capture and storage methods. At the same time, small businesses can reap advantages by shifting to renewable and sustainable energy solutions. This may range from more efficient HVAC units or solar panels for a business. Or it might involve acquiring electric commercial vehicles for transit needs. These are favorable legislative effects on businesses resulting from these aspects of the law.

“Investments in reducing health-care costs and energy costs not only help provide better access and cost-savings for small businesses and their employees but also help create small business contracting opportunities and therefore more job creation.” – Isabella Guzman, SBA Administrator

Healthcare Impacts on Businesses

In considering energy and healthcare subsidies combined, a total of $369 billion was included as part of the Inflation Reduction Act of 2022. While a significant portion went to climate change policies, healthcare received major support as well. Specifically, healthcare insurance premium subsidies for the Affordable Care Act will extend now to 2025 instead of ending this year. Likewise, the law enabled the government to now negotiate drug prices for its Medicare patients. And it capped out-of-pocket drug costs for Medicare recipients to $2,000 annually. The legislative effects on businesses from this aren’t necessarily profound. But there also not nonexistent either.

No matter where you stand on politics, the Inflation Reduction Act of 2022 is a big deal.

The main legislative effects on businesses with the healthcare changes mainly involve small businesses. A sizable portion of these companies took advantage of the Affordable Care Act insurance supports. By extending this support through 2025, this allows many companies to provide quality coverage to their staff and families. Plus, for companies that cannot provide such coverage, it allows them to be competitive in recruiting talent. Notably, the Medicare benefits of the Inflation Reduction Act of 2022 are as impactful on businesses. But there remain some beneficial aspects regardless.

The Long-Term View for Businesses

As may be evident from the key components of the Inflation Reduction Act of 2022, immediate inflation relief isn’t likely. Perhaps the best thing that can be said about the law is that it doesn’t add to current inflationary pressures. But over the next 10 years, the law is supposed to reduce the federal deficit by $300 billion. And by reducing healthcare costs and energy costs, pressures on consumers will gradually decline. In theory, this will help keep inflation in check over time. As such, one of the legislative effects on businesses may be the beneficial economic climate created by the law down the road. Naturally, not all impacts will be positive for all businesses. But in the balance, the Inflation Reduction Act of 2022 appears to have more good in it than bad.

Want to control your cost efficiency and protect your bottom line? Bold Business can help.

How OTC Hearing Aids Will Disrupt an Industry

Posted on September 2, 2022 by Staff Writer

The hearing aid industry has enjoyed a captive audience. At any given time, millions of Americans suffer from hearing loss and could benefit from the latest hearing aid technology. But according to recent statistics, only about one in five people with hearing difficulty actually seek such help. Numerous barriers deter them from making an appointment for an audiologist in order to access these devices. But as of mid-October, that will significantly change. With the recent approval of over-the-counter (OTC) hearing aids by the FDA, many of these barriers will no longer exist.

For nearly a decade, professionals and organizations have been lobbying for the FDA to make such a move. In fact, a National Academy’s published report called for OTC hearing aids back in 2016. With the new approval finally, experts anticipate that consumers will not only enjoy many new designs and options for hearing loss treatment. But they will also see a marked decrease in cost, especially now that audiology exams are no longer required. Much to the dismay of the hearing aid industry, OTC hearing aids will result in significant market changes. And that’s a great thing for consumers.

(Dig deeper into Bold’s exploration of hearing loss treatment with this story.)

“Establishing this new regulatory category will allow people with perceived mild to moderate hearing loss to have convenient access to an array of safe, effective and affordable hearing aids from their neighborhood store or online.” – Dr. Robert Califf, F.D.A. Commissioner

A Much-Needed Legislative Change

Reports estimate that roughly 30 million Americans have significant hearing loss with a minority seeking help. One of the big reasons so few choose to get hearing aids involves the actual cost of doing so. Prior to the FDA’s ruling on OTC hearing aids, acquiring a hearing device required being seen by an audiologist. Then, once the exam was complete, one had to be fitted for a specific model to meet their individual needs. Unfortunately, this process resulted in tremendous costs for the consumer than ranged from $1,400 up to nearly $5,000. Understanding that few health insurances cover such costs, price barriers were simply too much for most.

Because many people were being underserved by the current hearing aid industry protocols, lawmakers began calling for change. Organizations lobbied for OTC hearing aids much to the dismay of hearing aid industry representatives. And in 2017, Senator Chuck Grassley and Senator Elizabeth Warren advanced the Over-the-Counter Hearing Aid Act that paved the way. The bipartisan bill eventually became law and allowed the FDA to determine if OTC hearing aids were feasible. After tackling several issues, like federal-state law conflicts and technical hearing aid parameters, the FDA moved forward. Their final rule approving OTC hearing aids will go into effect later this year. And millions will benefit as a result.

“I think our biggest challenge as a profession and as a health care system is to make sure that people understand that hearing is incredibly important. It deserves their attention, it deserves their action.” – Sarah Sydlowski, Associate Chief Improvement Officer of the Cleveland Clinic Head and Neck Institute

Pushback from the Hearing Aid Industry

Perhaps with little surprise, the hearing aid industry has resisted the move toward legal OTC hearing aids. During the public comment portion, the industry submitted a 45-page comment letter opposing the FDA’s decision. Specifically, they claimed that other product-makers would offer low-quality, ineffective, and perhaps even dangerous OTC hearing aids to the public. They also indicated that the lack of professional assessment would result in thousands receiving a poor fit. But these arguments hardly make sense in the light of modern e-commerce. Consumers are more than adept at assessing product quality through product reviews. And hundreds of other OTC devices now exist proving consumers are much savvier than the hearing aid industry thinks.

OTC hearing aids are a game-changer, but for the medical industry and consumers.

In addition to these seemingly invalid claims, the hearing aid industry has also been accused of undermining progress. For one, during the time period for public input, the industry flooded the FDA with negative comments about OTC hearing aids. Lawmakers have also warned the industry may try to dilute the OTC hearing aid market with dozens of low-quality options. In theory, this would push consumers toward professional evaluations and higher-cost products. But in reality, this strategy isn’t likely to be successful. Not only are consumers more knowledgeable and discerning than the hearing aid industry thinks. But many other newcomers to the industry are expected that will force existing players to rethink their approach.

“This could fundamentally change technology. We don’t know what these companies might come up with. We may literally see new ways hearing aids work, how they look.” – Nicholas Reed, Audiologist, Department of Epidemiology at Johns Hopkins Bloomberg School of Public Health

Paving the Way for Innovation

With the introduction of OTC hearing aids, the industry is primed for technological disruption. For too long, old styles and paradigms have prevented the hearing aid industry from advancing. But now that regulations have been removed, all bets are off. Imagine the new designs that will now appear as competition in the marketplace increases. A range of styles at different price points will soon be available to consumers. And naturally, competition overall will drive prices lower and quality higher. Based on these anticipated developments, experts expect millions will finally receive the assistance they need.

Despite hearing aid industry pushback, the FDA approval of OTC hearing aids is a positive step in the right direction. Many people avoid hearing aids because of the stigma associated with wearing existing models. The devices may even lead to age discrimination issues. But new designs have the potential to change this as well. Plus, the FDA’s ruling also will reduce health risks linked to hearing loss. It is well recognized that hearing loss can contribute to cognitive decline, social isolation, and depression. The innovations and options that OTC hearing aids will provide will naturally reduce the occurrence of these conditions as well. If ever there was a market that needed disruption, the hearing aid industry is one of them. And thankfully, the FDA’s approval of OTC hearing aids will achieve just that.

Want to control your cost efficiency and protect your bottom line? Bold Business can help.

Day: September 2, 2022

Don’t Believe the Carbon Capture and Storage Hype