Huge: EPA Loses–America Wins

Democrat Rep. Alexandria Ocasio-Cortez on Thursday called for the Supreme Court to be abolished after the High Court reined in the EPA’s power to regulated greenhouse gases.

Scotusblog reports on this latest return to sanity by the US Supreme Court. Supreme Court curtails EPA’s authority to fight climate change  Once again the court refuses to legislate an issue that belongs to Congressional deliberation. Excerpts in italics with my bolds.

In a 6-3 decision that may limit agency power across the federal government, the court held that Congress did not clearly authorize the EPA to adopt broad rules to lower carbon emissions from power plants.

The Supreme Court on Thursday truncated the Environmental Protection Agency’s power to regulate greenhouse gases. The ruling may hamper President Joe Biden’s plan to fight climate change and could limit the authority of federal agencies across the executive branch.

By a vote of 6-3, the court agreed with Republican-led states and coal companies that the U.S. Court of Appeals for the District of Columbia Circuit was wrong when it interpreted the Clean Air Act to give the EPA expansive power over carbon emissions. The decision, written by Chief Justice John Roberts, was handed down on the final opinion day of the 2021-22 term.

Two different and conflicting sets of regulations – neither of which is currently in effect – were at issue in the case, known as West Virginia v. EPA. In 2015, the Obama administration adopted the Clean Power Plan, which sought to combat climate change by reducing carbon pollution from power plants – for example, by shifting electricity production to natural-gas plants or wind farms. The CPP set individual goals for each state to cut power-plant emissions by 2030. But in 2016, the Supreme Court put the CPP on hold in response to a challenge by several states and private parties.

In 2019, the Trump administration repealed the CPP and replaced it with the Affordable Clean Energy Rule, which gave states discretion to set standards and gave power plants flexibility in complying with those standards. The Trump administration argued that it was required to end the CPP because it exceeded the EPA’s authority under Section 7411 of the Clean Air Act, which gives the EPA the power to determine the “best system of emission reduction” for buildings that emit air pollutants. That provision, the Trump administration contended, only allows the EPA to implement measures that apply to the physical premises of a power plant, rather than the kind of industry-wide measures included in the CPP.

Last year the D.C. Circuit vacated both the Trump administration’s repeal of the CPP and the ACE Rule, and sent the case back to the EPA for additional proceedings. Section 7411, the court of appeals explained, does not require the more limited view of the EPA’s authority that the Trump administration adopted.

The Supreme Court on Thursday reversed the D.C. Circuit’s ruling. Roberts’ 31-page opinion began by considering whether the Republican-led states and coal companies challenging the D.C. Circuit’s decision had a right to seek review in the Supreme Court now. Because the Biden administration plans to issue a new rule on carbon emissions from power plants, rather than reinstating the CPP, the administration had argued that the case did not present a live controversy for the justices to decide. But a decision by the government to stop the conduct at the center of a case does not end the case, Roberts emphasized, “unless it is ‘absolutely clear that the allegedly wrongful behavior could not reasonably be expected to recur.’” And in this case, Roberts stressed, because the Biden administration “vigorously defends” the approach that the Obama EPA took with the CPP, the Supreme Court can weigh in.

Turning to the merits of the case, Roberts wrote that the EPA’s effort to regulate greenhouse gases by making industry-wide changes violated the “major-questions” doctrine – the idea that if Congress wants to give an administrative agency the power to make “decisions of vast economic and political significance,” it must say so clearly.

Section 7411 of the Clean Air Act, Roberts reasoned, had been “designed as a gap filler and had rarely been used in the preceding decades.” But with the CPP, Roberts observed, the EPA sought to rely on Section 7411 to exercise “unprecedented power over American industry.” “There is little reason to think Congress assigned such decisions to” the EPA, Roberts concluded, especially when Congress had previously rejected efforts to enact the kind of program that the EPA wanted to implement with the CPP.

“Capping carbon dioxide emissions at a level that will force a nationwide transition away from the use of coal to generate electricity may be a sensible ‘solution to the crisis of the day,’” Roberts wrote. But only Congress, or an agency with express authority from Congress, can adopt a “decision of such magnitude and consequence.”

Roberts’ full-throated embrace of the major-questions doctrine – a judicially created approach to statutory interpretation in challenges to agency authority – likely will have ripple effects far beyond the EPA. His reasoning applies to any major policymaking effort by federal agencies.

In a concurring opinion that was joined by Justice Samuel Alito, Justice Neil Gorsuch emphasized that the dispute before the court involved “basic questions about self-government, equality, fair notice, federalism, and the separation of powers.” The major-questions doctrine, Gorsuch wrote, “seeks to protect against ‘unintentional, oblique, or otherwise unlikely’ intrusions on these interests” by requiring federal agencies to have “clear congressional authorization” when they address important issues. Whether coal- and gas-fired power plants “should be allowed to operate is a question on which people today may disagree, but it is a question everyone can agree is vitally important.”

The Ruling WEST VIRGINIA v. EPA

Background  Supremes to Review EPA Authority Over GHGs

Footnote from CO2 Coalition

EPA loses – America Wins

Victory for citizens and businesses alike

In what is likely the most damaging setback ever dealt to those advocating for overzealous enforcement actions against greenhouse gas emissions, the Supreme Court of the United States ruled in favor of constitutional limitations on unelected regulators.

This morning SCOTUS ruled in favor of the plaintiff states in WV v. EPA. This was an important “separation of powers” case. Over 20 states allege EPA improperly used very narrow statutory language as the basis for a national CO2 cap-and-trade program.

The constitutional principle of separation of powers requires that only Congress—through legislation—is authorized to decide major policy issues, not federal agencies. The related legal “Major Question Doctrine” holds that federal agencies must have a clear authorization from Congress before exercising new and significant regulatory power.

According to the ruling written by Chief Justice John Roberts: “But the only interpretive question before us, and the only one we answer, is more narrow: whether the “best system of emission reduction” identified by EPA in the Clean Power Plan was within the authority granted to the Agency in Section 111(d) of the Clean Air Act. For the reasons given, the answer is no.”

This is why we fight.

Statement on the ruling by CO2 Coalition Chair William Happer:

“The decision is a very welcome reaffirmation of the Constitutional rights of citizens of the United States. Untouched is the question of whether the Constitution allows Congress to make scientifically incorrect decisions by majority vote, for example: that carbon dioxide, a beneficial gas that is essential to life on Earth, is a pollutant.”

2022 Update: Fossil Fuels ≠ Global Warming

gas in hands

Previous posts addressed the claim that fossil fuels are driving global warming. This post updates that analysis with the latest (2021) numbers from BP Statistics and compares World Fossil Fuel Consumption (WFFC) with three estimates of Global Mean Temperature (GMT). More on both these variables below.

WFFC

2021 statistics are now available from BP for international consumption of Primary Energy sources. 2022 Statistical Review of World Energy. 

The reporting categories are:
Oil
Natural Gas
Coal
Nuclear
Hydro
Renewables (other than hydro)

Note:  British Petroleum (BP) now uses Exajoules to replace MToe (Million Tonnes of oil equivalents.) It is logical to use an energy metric which is independent of the fuel source. OTOH renewable advocates have no doubt pressured BP to stop using oil as the baseline since their dream is a world without fossil fuel energy.

From BP conversion table 1 exajoule (EJ) = 1 quintillion joules (1 x 10^18). Oil products vary from 41.6 to 49.4 tonnes per gigajoule (10^9 joules).  Comparing this annual report with previous years shows that global Primary Energy (PE) in MToe is roughly 24 times the same amount in Exajoules.  The conversion factor at the macro level varies from year to year depending on the fuel mix. The graphs below use the new metric.

This analysis combines the first three, Oil, Gas, and Coal for total fossil fuel consumption world wide (WFFC).  The chart below shows the patterns for WFFC compared to world consumption of Primary Energy from 1965 through 2021.

The graph shows that global Primary Energy (PE) consumption from all sources has grown continuously over 5 decades. Since 1965  oil, gas and coal (FF, sometimes termed “Thermal”) averaged 88% of PE consumed, ranging from 93% in 1965 to 82% in 2021.  Note that in 2020, PE dropped 23 EJ (4%) below 2019 consumption, then increased 31 EJ in 2021.  WFFC for 2020 dropped 26 EJ (5%), then in 2021 gained back 26% to match 2019 WFFC consumption. For the 56 year period, the net changes were:

Oil 184%
Gas 540%
Coal 176%
WFFC 236%
PE 282%
Global Mean Temperatures

Everyone acknowledges that GMT is a fiction since temperature is an intrinsic property of objects, and varies dramatically over time and over the surface of the earth. No place on earth determines “average” temperature for the globe. Yet for the purpose of detecting change in temperature, major climate data sets estimate GMT and report anomalies from it.

UAH record consists of satellite era global temperature estimates for the lower troposphere, a layer of air from 0 to 4km above the surface. HadSST estimates sea surface temperatures from oceans covering 71% of the planet. HADCRUT combines HadSST estimates with records from land stations whose elevations range up to 6km above sea level.

Both GISS LOTI (land and ocean) and HADCRUT4 (land and ocean) use 14.0 Celsius as the climate normal, so I will add that number back into the anomalies. This is done not claiming any validity other than to achieve a reasonable measure of magnitude regarding the observed fluctuations.

No doubt global sea surface temperatures are typically higher than 14C, more like 17 or 18C, and of course warmer in the tropics and colder at higher latitudes. Likewise, the lapse rate in the atmosphere means that air temperatures both from satellites and elevated land stations will range colder than 14C. Still, that climate normal is a generally accepted indicator of GMT.

Correlations of GMT and WFFC

The next graph compares WFFC to GMT estimates over the five decades from 1965 to 2021 from HADCRUT4, which includes HadSST4.

Since 1965 the increase in fossil fuel consumption is dramatic and monotonic, steadily increasing by 236% from 146 to 490 exajoules.  Meanwhile the GMT record from Hadcrut shows multiple ups and downs with an accumulated rise of 0.8C over 56 years, 6% of the starting value.

The graph below compares WFFC to GMT estimates from UAH6, and HadSST4 for the satellite era from 1980 to 2021, a period of 41 years.

In the satellite era WFFC has increased at a compounded rate of nearly 2% per year, for a total increase of 90% since 1979. At the same time, SST warming amounted to 0.49C, or 3.4% of the starting value.  UAH warming was 0.48C, or 3.5% up from 1979.  The temperature compounded rate of change is 0.1% per year, an order of magnitude less than WFFC.  Even more obvious is the 1998 El Nino peak and flat GMT since.

Summary

The climate alarmist/activist claim is straight forward: Burning fossil fuels makes measured temperatures warmer. The Paris Accord further asserts that by reducing human use of fossil fuels, further warming can be prevented.  Those claims do not bear up under scrutiny.

It is enough for simple minds to see that two time series are both rising and to think that one must be causing the other. But both scientific and legal methods assert causation only when the two variables are both strongly and consistently aligned. The above shows a weak and inconsistent linkage between WFFC and GMT.

Going further back in history shows even weaker correlation between fossil fuels consumption and global temperature estimates:

wfc-vs-sat

Figure 5.1. Comparative dynamics of the World Fuel Consumption (WFC) and Global Surface Air Temperature Anomaly (ΔT), 1861-2000. The thin dashed line represents annual ΔT, the bold line—its 13-year smoothing, and the line constructed from rectangles—WFC (in millions of tons of nominal fuel) (Klyashtorin and Lyubushin, 2003). Source: Frolov et al. 2009

In legal terms, as long as there is another equally or more likely explanation for the set of facts, the claimed causation is unproven. The more likely explanation is that global temperatures vary due to oceanic and solar cycles. The proof is clearly and thoroughly set forward in the post Quantifying Natural Climate Change.

Footnote: CO2 Concentrations Compared to WFFC

Contrary to claims that rising atmospheric CO2 consists of fossil fuel emissions, consider the Mauna Loa CO2 observations in recent years.

Despite the drop in 2020 WFFC, atmospheric CO2 continued to rise steadily, demonstrating that natural sources and sinks drive the amount of CO2 in the air.

See also: Nature Erases Pulses of Human CO2 Emissions

Temps Cause CO2 Changes, Not the Reverse

Hard Facts Puncture Anti-Fossil Fuel Fantasies

Gwyn Morgan explains at Financial Post Hard facts puncture anti-fossil fuel fantasies.  Excerpts in italics with my bolds and added images.

The belief that 84% of global energy supplied by oil and gas can be replaced by so-called ‘green energy’ is a fantasy

The marvelous Christmas movie Polar Express, starring the inimitable Tom Hanks, ends with the words “anything is possible, if you only believe.” Except, as adults understand, many things aren’t possible, not even if some people do believe them. An obvious example is the fantasy that the 84 per cent of global energy supplied by oil and gas can be replaced by so-called “green energy.”

Since the first UN COP (“Conference of the Parties”) meeting in 1995, world oil demand has increased from 64 to 100 million barrels per day. But even as demand increased, the “environmental, social and governance” (ESG) movement encouraged investors to unload their oil industry holdings. Faced with share valuations reflecting their perceived status as a “sunset Industry,” the rational course for oil company leaders was to pay out large dividends rather than reinvest in production growth. As demand grew, supply therefore stagnated. The Ukraine crisis revealed just how narrow the supply margin has become. Regrettably, most of that margin is in the hands of Vladimir Putin, leaving European countries that depend on Russian oil no choice but to continue to provide the funds with which he ravages the Ukrainian people.

This is the tragedy sanctimonious ESG zealots have wrought.

Meanwhile, back in the world capital of “if you only believe” fantasies, the prime minister of a country endowed with one of the world’s largest reserves of oil has presided over a seven-year long anti-oil industry scourge, thwarting multiple proposed export pipelines that could now have been supplying those captive market countries.

Sharing his anti-oil zealotry seems to be a necessary qualification for Mr. Trudeau’s cabinet. Alberta Premier Jason Kenney recently went to Washington to present the Senate Energy Committee with plans to increase Canadian oil exports, thereby freeing-up more U.S. oil to help Europe reduce Russian oil purchases. The idea received a warm reception. Unfortunately, Kenney’s message was promptly contradicted by Federal Resources Minister Jonathan Wilkinson, who told the same committee that shifting to renewables and hydrogen “will provide true energy and national security to Europe.” In other words, don’t count on Canada to help de-fund Putin’s murderous war unless it lasts five or ten more years.

It’s incomprehensible that during a global oil and gas shortage brought on by the wanton destruction of a civilized democracy, our prime minister thinks all will be well if only Canada rids itself of fossil-fueled vehicles. Deep in delusion, he considers this a perfect time to announce a plan to have 60 per cent of new cars and light duty trucks be “zero emission” by 2030.

When you live in a perennial state of fantasy, facts don’t matter. But here are facts that do matter to Canadians forced to face the real-world impact.

Fact 1: High cost. The federal budget promises a $5000/vehicle rebate. There are 24 million gasoline and diesel-powered vehicles in Canada. Subsidizing replacement of just one million would cost $5 billion. The budget also contains $900 million for new charging stations. That’s helpful in urban centres but providing a charging station network necessary to allow e-vehicles to travel interurban highways would cost tens of billions more.

Fact 2: Revenue needs. The Trudeau government’s longer-term plan is to get rid of all fossil-fueled vehicles. Federal and provincial fuel taxes now total a stunning $22 billion each and every year. These revenues fund the cost of building and maintaining urban streets and highways. How long can it be before governments are forced to regain those revenues from electrical vehicle charging levies?

Fact 3: Grid stress. The average Canadian motorist drives 15,000 km per year and the average electric passenger vehicle uses 19 kw/hr per 100 km. That works out to 2,850 kw/hr per year, more than 25 per cent of current Canadian household consumption. Many of the country’s electrical generation and distribution grids are already near capacity. Electric vehicle advocates say the problem will be mitigated by mandating low amperage during off-peak, late-night hours. But most highway drivers travel during the day when the grid is near capacity. And they will need high-amperage DC quick-chargers during these already supply-tight hours.

Fact 4: Land demand. Refueling with gasoline or diesel takes around five minutes. But even rapid chargers need 30 minutes. That means six times more land occupied by charging stations. How much of that land will be taken from agricultural production?

Fact 5: More emissions, not fewer. Canada’s 24 million fossil-fueled cars and pickup trucks emit 14 per cent of the country’s 1.5 per cent share of global emissions. If all 24 million were converted to battery power, global emissions would be reduced by just two-tenths of one per cent. Emissions growth from China’s coal-fired power plants would offset that in just a few days. And that two-tenths of a per cent doesn’t count emissions produced from mining and transporting the materials that go into all those batteries. Nor does it consider that 20 per cent of Canada’s electricity is generated with fossil fuels.

Those factors clearly wipe out any benefit, unless we include the benefit that living a fantasy allows people, our leader included, not to have to think about all those Ukrainians we could have saved by helping Europe say “no” to Russia’s oil — if only our oil industry hadn’t been hamstrung.

 

 

 

 

The Looming Energy Catastrophe

Ron Stein provides a briefing from California on the energy debacle imposed by clueless political leaders on ordinary Americans.  Excerpts in italics with my bolds H/T CFACT

The Looming Energy Catastrophe

Please enjoy and share this educational energy literacy briefing, a 5-minute video by Costa Mesa Brief at a California Chevron gas station. The video talks about the outrageous gas prices and tells us what is behind the increases, where it is heading and what, if anything, we can do about it. I think you will find his no-nonsense approach and perspective unique, sobering and very informative.

The video explains the impact on fuel prices from California government-imposed reductions in the supply chain of crude oil has increased imported crude oil from foreign countries from 5% in 1992 to more than 60% today of total consumption. Biden’s pledge stating, “we are going to get rid of fossil fuels,” is impacting fuel prices.

At today’s price of crude oil well above $100 per barrel, the imported crude oil costs California more than $150 million dollars a day, yes, everyday, being paid to oil-rich foreign countries, depriving Californians of jobs and business opportunities, and forcing drivers to pay premium prices for fuel.

Californians are consuming more than 50 million gallons of fuel daily for its 35 million vehicles, which is slightly more than one gallon per day per vehicle.

Californians continue to pay more than $1.00 more per gallon of fuel than the rest of the country primarily for the State, Federal and Local taxes, and the Government environmental compliance programs such as the Low Carbon Fuel Standard (LCFS), Cap and Trade, Renewable Fuel Standard (RFS), and the Underground Storage Tax. Those costs ‘dumped” onto the posted price at the pump are not transparent to the public.

The demand for fuels to move the heavy-weight and long-range needs of more than 50,000 jets for the military, commercial, private and the President’s Air Force One, and the more than 50,000 merchant ships that move products throughout the world are also manufactured from the supply of crude oil.

Life Without Oil is NOT AS SIMPLE AS YOU MAY THINK as renewable energy is only intermittent electricity from breezes and sunshine as NEITHER wind turbines nor solar panels can manufacture anything for society. Climate change may impact humanity, but being mandated to live without the more than 6,000 products and the various fuels manufactured from crude oil will necessitate lifestyles being mandated back to the horse and buggy days of the 1800’s.

When the public continues to demand increasing needs for the transportation fuels and the products made from crude oil, limiting its supply by governments and the Environmental, Social and Governance (ESG) movement to manufacture those items is a guarantee for today’s shortages and inflation.

Life without crude oil could be the greatest threat to civilization’s eight billion residents, resulting in billions of fatalities from diseases, malnutrition, and weather-related deaths.

G7 Ministers Pledge Energy Hari-Kari

G7 Climate, Energy and Environment Ministers’ Communiqué, Berlin, May 27th, 2022

Excerpts in italics with my bolds

Recognising that accelerating the international clean energy transition and phasing out continued global investment in the unabated fossil fuel sector is essential to keep a limit of 1.5 °C temperature rise within reach, we commit to end new direct public support for the international unabated fossil fuel energy sector by the end of 2022, except in limited circumstances clearly defined by each country that are consistent with a 1.5 °C warming limit and the goals of the Paris Agreement. (pg. 33)

We note with concern the scale of private finance currently still supporting non-Paris aligned activities especially in the fossil fuel sector. (pg. 22)

We are thus further strengthened in our resolve to accelerate the clean energy transition towards a net zero emissions future by 2050, while also keeping energy security and affordability at the core of our action, including through the rapid expansion of low-carbon and renewable energies and an increase in energy efficiency.  (pg. 29)

In this regard, we acknowledge the IEA net zero scenario which suggests that G7 economies
invest at least US$1.3 trillion in renewable energy including tripling investments in clean
power and electricity networks between 2021 and 2030. (pg. 31)

We confirm our strong financial commitments for the market ramp-up of low-carbon and renewable hydrogen and its derivatives, thereby signalling an irreversible shift towards a world economy based on low carbon and renewable energy sources. (pg. 31)

In view of the Russian attack on Ukraine, financial support for companies and citizens affected by severely rising prices for fossil fuels is now on the political agenda for several countries. Nevertheless, we aim for our relief measures to be temporary and targeted and we reaffirm our commitment to the elimination of inefficient fossil fuel subsidies by 2025. (pg. 32)

We also highlight that we have ended new direct government support for unabated international thermal coal-fired power generation by the end of 2021, including through Official Development Assistance, export finance, investment, and financial and trade promotion support. (pg. 33)

We commit to increase national efforts to decarbonise building heating and cooling systems by using appropriate policy tools, including regulations and incentives, with the ultimate objective of transitioning away from fossil fuels. (pg. 37)

This will also guide our approach in public finance institutions and on the boards of MDBs and bilateral DFIs. We therefore call on other major economies, the MDBs and bilateral DFIs, multilateral funds, public banks and relevant agencies to also adopt these commitments. We commit to review our progress against our commitments. (pg. 33)

(Note: Multilateral Development Banks (MDBs), Development finance institution (DFIs)

See also Michael Kelly on Energy Utopias and Engineering Realities synopsis Kelly’s Climate Clarity

And Dieter Helm Seeking Climate and Energy Security

West’s Obsession with EV Tech Puts China in World Driver Seat

James Kennedy explains the dangerous slide in his presentation Critical Materials
The New Tool of Global Hegemony.  Excerpts in italics with my bolds.  H/T Mark Krebs

This presentation outlines the vast disconnect between green technology goals and the anticipated compounding economic consequences of finite resources.
♦  Begin by assessing resources and the challenges associated with the Administration’s             limited goal of replacing the internal combustion engine.
♦  Expose who leads in resource production
♦  Reveal who leads in research, IP, control over finished materials and estimated
resource demand

♦  Consider the asymmetric geopolitical consequences
♦  Consider the consequences of compounding renewables (wind & solar), energy                   distribution and grid-storage demand on these limited resources.

To enlarge, open image in new tab.

♦ Most of the critical technology metals make up less than .003% of the earth’s crust.
♦ They tend to be present in measurements of parts per million.
♦ They tend to be tied up in much more complex mineralization’s.
♦ Extracting them requires mining and refining facilities that cost billions of dollars.
♦ The extraction process requires lots of energy and complex chemical processes.
♦ These processes pose environmental problems of their own.

As you can see from the red arrows,  China controls most of these elements and critical materials at the point of refined materials, metals, alloys and magnets.  Recent production from California’s Mt. Pass mine goes to China for refining and metal / magnet production.

China’s state sponsored subsidies and internal tax advantages make U.S. production of rare earth metals and magnets non-competitive. This is also true for refined cobalt and many other critical materials and components like anodes and cathodes for batteries.

China’s production capacity for these materials and components dwarfs the rest of the world – exceeding global demand in many cases.

Conclusion:

This rush to zero carbon is driven by short term private interests leveraging fears of global warming that conflate with larger ideological agendas.
Things will go wrong, there will be multiple train wrecks.

Potential Winners: China, natural gas producers, mining companies that supply China, flim-flam renewable / green tech / green energy project promoters, 1% or less of the U.S. & EU population.

Potential Losers: 99% of U.S. & EU population, legacy and residual manufacturing industries, the financial system and the U.S. dollar as its status as world reserve currency evaporates.

Potential Black Swan Outcomes
Upside: Material Science Breakthroughs solve the problem
Downside: Forfeiture of Western Economic Relevance

My Comment:

As posted previously, this drive to reduce carbon-based energy is absurd, costly and pointless.

Absurd, because there is no reliable data showing anything in our climate or weather outside historical ranges of variation.

Costly, because proposed remedies including “green energy” and electric vehicles serve only to make affordable reliable energy expensive and intermittent.  In addition  as demonstrated above, the tech depends on the rarest, most precious and environmentally damaging materials.

Pointless, because we do not control the weather anyway.

High time to unplug the EV illusion and back away from the social and economic cliff.

See also: Electric Car Lie Exposed

If That Tesla Battery Could Talk

 

 

 

 

 

FERC Aims to Decarbonize, Shoots Down Energy Security

Marlo Lewis explains the Biden regime push to undermine critical energy supply in pursuit of climate virtue in his CEI article Why FERC’s Greenhouse Gas Regulatory Policy Cannot Pass a Cost-Benefit Test.  Excerpt in italics with my bolds.

Today, the Competitive Enterprise Institute (CEI) filed comments on the Federal Energy Regulatory Commission’s (FERC) proposal to consider climate change impacts in reviews of infrastructure projects under the Natural Gas Act (NGA). The comments were jointly submitted by my CEI colleague Patrick Michaels; Heritage Foundation Chief Statistician, Data Scientist, and Senior Research Fellow Kevin Dayaratna (commenting as an independent scholar rather than as a representative of any organization); and yours truly.

We submitted comments back in January on FERC’s November 2021 technical conference on the same issues. We advised FERC to steer clear of climate policy, for three main reasons.

1.  Decarbonizing Goals Conflict with Natural Gas Act Purpose

First, the Biden administration’s NetZero agenda to decarbonize and degasify the U.S. electric power sector cannot lawfully be aligned with the Natural Gas Act. Biden’s goals conflict with the NGA’s “principal purpose,” which is to:

 “encourage the orderly development of plentiful supplies
of electricity and natural gas at reasonable prices.”

In addition, climate change is not a factor Congress authorized FERC to consider. The words “climate,” “carbon,” “greenhouse,” “global,” “warming,” “mitigate,” or any of their cognates do not occur in the Act.

2.  Infrastructure Emissions Do Not Threaten the Environment

Second, although the direct and indirect emissions of natural gas infrastructure may be “reasonably foreseeable,” the climate effects are not. FERC’s project reviews are governed by the National Environmental Policy Act (NEPA), which requires scrutiny of major federal actions “significantly affecting the human environment.” Even the emissions of the largest natural gas projects are too small to discernibly affect global climate, and no project’s “carbon footprint” is big enough to influence the fate or fortunes of any community, business, or human being anywhere in the world.

3.  Social Cost of Carbon Is Speculative and Subjective

Third, the social cost of carbon (SCC)—an estimate of the present value of the cumulative climate damages of an incremental ton of carbon dioxide equivalent (CO2e) greenhouse gas (GHG) emissions—is too speculative and subjective, and too easily manipulated for political purposes, to be weighed in the same scales with an infrastructure project’s estimated economic benefits. The Biden administration’s SCC estimates are egregiously biased in favor of climate alarm and regulatory ambition, rendering any agency action that relies on them arbitrary and capricious.

Unsurprisingly, FERC did not take our advice, and proceeded in February to adopt an “interim” policy statement on NGA project review and greenhouse gas (GHG) emissions. That stirred up controversy, including pushback by Senate Energy and Natural Resources Chairman Joe Manchin (D-WV) and Ranking Member John Barrasso (R-WY). As a result, FERC in March demoted its GHG policy statement from “interim” to “draft,” and extended the comment period until today, April 25.

Unlike several presenters at FERC’s November 2021 technical conference, the draft GHG policy statement does not advocate requiring SCC analysis in NGA determinations of public convenience and necessity. Neither, however, does FERC disavow an intent to require it in later policy statements. The Commission may simply be waiting for the Biden administration’s Interagency Working Group (IWG) to finalize its interim SCC estimates, or for courts to resolve Louisiana’s challenge to federal agencies’ use of those metrics.

The Commission’s draft GHG policy statement establishes a “rebuttable presumption that proposed projects with 100,000 metric tons per year of carbon dioxide equivalents (CO2e) emissions will be deemed to have a significant impact on climate change.” FERC also implies that it may condition project approval on the sponsor’s plans to “mitigate all or a portion of the project’s climate change impacts.”

The camel’s nose is already under the tent.

It is not hard to guess where this is going if FERC does not quickly reverse course. The usual suspects will pressure the Commission to:

(1) progressively lower climate significance thresholds,
(2) monetize undetectably small project-related climate “impacts” using agenda-driven SCC estimates, and
(3) either reject needed natural gas infrastructure projects outright or impose mitigation requirements that render them uneconomic.

This is bad policy, as Michaels, Dayaratna, and I explained in our January 7 comments. If an infrastructure project is commercially viable and helps ensure plentiful supplies of electricity and natural gas at reasonable prices (the NGA’s principal purpose), the Commission knows in advance that the project’s economic benefits far exceed its climate-related externalities. Therefore, no further investigation of the project’s GHG emissions is required, nor does it make sense to condition the certificate of public convenience and necessity on the project’s adoption of mitigation measures.

Conclusion

New research by Dayaratna (hereafter “Heritage analysis”) further confirms that conclusion. Using the U.S. government’s leading energy and climate policy models, the Heritage analysis demonstrates that banning construction of new U.S. pipelines would have a negligible effect on U.S. annual CO2 emissions through 2050 and, thus, a similarly negligible effect on global temperatures through 2100. The policy implication for FERC is clear. No level of overregulation or prohibition that regulators might apply to the development of U.S. natural gas pipelines could meaningfully affect the Earth’s climate.

Consequently, no regulation or prohibition of new natural gas pipelines could possibly be worth the economic losses imposed on construction companies, natural gas producers, and energy consumers.

See Also Seeking Climate and Energy Security

If That Tesla Battery Could Talk

Let’s imagine what an EV battery could tell us about its reality. A short story.  H/T Graeme Weber

The packed auditorium was abuzz; nobody seemed to know what to expect. The only hint was a large aluminum block sitting on a sturdy table on the stage.

When the crowd settled down, a scholarly-looking man walked out and put his hand on the shiny block, “Good evening,” he said, “I am here to introduce NMC532-X,” and he patted the block, “we call him NM for short,” and the man smiled proudly. “NM is a typical electric vehicle (EV) car battery in every way except one; we programmed him to send signals of the internal movements of his electrons when charging, discharging, and in several other conditions. We wanted to know what it feels like to be a battery. We don’t know how it happened, but NM began to talk after we downloaded the program.

“Despite this ability, we put him in a car for a year and then asked him if he’d like to do presentations about batteries. He readily agreed on the condition he could say whatever he wanted. We thought that was fine, and so, without further ado, I’ll turn the floor over to NM;” the man turned and walked off the stage.

“Good evening,” NM said. He had a slightly affected accent, and when he spoke, he lit up in different colors.

“A few days ago, at the start of my last lecture, three people walked out. But here is what I noticed about them. One was wearing a battery-powered hearing aid, one tapped on his battery-powered cell phone as he left, and a third got into his car — which would not start without a battery. So, I’d like you to think about your day for a moment; how many batteries do you rely on?”

He paused for a full minute which gave people time to count their batteries. Then he went on, “Now, it is not elementary to ask, ‘what is a battery?’ I think Mr. Tesla said it best when they called us Energy Storage Systems. That’s important. We do not make electricity — we store electricity produced elsewhere, primarily by coal, uranium, natural gas-powered plants, or diesel-fueled generators. So, to say an EV is a zero-emission vehicle is not at all valid. Also, since 40% of the electricity generated in the U.S. is from coal-fired plants, it follows that 40% of the EVs on the road are coal-powered, n’est-ce pas?”

He flashed blue again. “Einstein’s formula, E=MC2, tells us it takes the same amount of energy to move a 5,000 lb. gasoline-driven automobile a mile as it does an electric one. The only question again is, what produces the power? To reiterate, it does not come from the battery; the battery is only the storage device, like a gas tank in a car.”

He lit up red when he said that, and then he continued in blue and orange. “Mr. Elkay introduced me as NMC532. If I were the battery from your computer mouse, Elkay would introduce me as AA, if from your cell phone as CR2032, and so on. We batteries all have the same name depending on our design. By the way, the ‘X’ in my name stands for ‘experimental.’

“There are two orders of batteries: rechargeable and single use. The most common single-use batteries are A, AA, AAA, C, D, 9V, and lantern types. Those dry-cell species use zinc, manganese, lithium, silver oxide, or zinc and carbon to store electricity chemically. Please note they all contain toxic, heavy metals.

“Rechargeable batteries only differ in their internal materials, usually lithium-ion, nickel-metal oxide, and nickel-cadmium.

“The United States uses three billion of these two battery types a year, and most are not recycled; they end up in landfills. If you throw your small, used batteries in the trash, here is what happens to them.

“All batteries are self-discharging. That means even when not in use, they leak tiny amounts of energy. You have likely ruined a flashlight or two from an old, ruptured battery. When a battery runs down and can no longer power a toy or light, you think of it as dead; well, it is not. It continues to leak small amounts of electricity. As the chemicals inside it run out, pressure builds inside the battery’s metal casing, and eventually, it cracks. The metals left inside then ooze out. The ooze in your ruined flashlight is toxic, and so is the ooze that will inevitably leak from every battery in a landfill. All batteries eventually rupture; it just takes rechargeable batteries longer to end up in the landfill.

“In addition to dry-cell batteries, there are also wet-cell ones used in automobiles, boats, and motorcycles. The good thing about those is, 90% of them are recycled. Unfortunately, the cost of recycling EV batteries is more expensive than the cost of mining and creating a new battery. EV batteries that don’t have enough potency to power a vehicle can sometimes be used to power home appliances, street lights or solar panel backup until they finally lose all their energy.

“But that is not half of it. For those of you excited about electric cars and a green revolution, I want you to take a closer look at batteries and windmills and solar panels. These three technologies share what we call environmentally destructive embedded costs.”

NM got redder as he spoke. “Everything manufactured has two costs associated with it: embedded costs and operating costs. I will explain embedded costs using a can of baked beans as my subject.

“In this scenario, baked beans are on sale for $1.75 a can. As you head to the checkout, you begin to think about the embedded costs in the can of beans.

“The first cost is the diesel fuel the farmer used to plow the field, till the ground, harvest the beans, and transport them to the food processor. Not only is his diesel fuel an embedded cost, so are the costs to build the tractors, combines, and trucks. In addition, the farmer might use a nitrogen fertilizer made from natural gas.

“Next is the energy costs of cooking the beans, heating the building, transporting the workers, and paying for the vast amounts of electricity used to run the plant. The steel can holding the beans is also an embedded cost. Making the steel can requires mining taconite, shipping it by boat, extracting the iron, placing it in a coal-fired blast furnace, and adding carbon. Then it’s back on another truck to take the beans to the grocery store. Finally, add in the cost of the gasoline for your car.

“But wait — can you guess one of the highest but rarely acknowledged embedded costs? It’s the depreciation on the 5000-lb. car you used to transport one pound of canned beans!”

“But that can of beans is nothing compared to me! I am hundreds of times more complicated. My embedded costs not only come in the form of energy use; they come as environmental destruction, pollution, disease, child labor, and the cost to be recycled.”

He paused, “I weigh 1,000 pounds, and as you see, I am about the size of a travel trunk. I contain 25 pounds of lithium, 60 pounds of nickel, 44 pounds of manganese, 30 pounds cobalt, 200 pounds of copper, and 400 pounds of aluminum, steel, and plastic. Inside me are 6,831 individual lithium-ion cells.

“It should concern you that all those toxic components come from mining. For instance, to manufacture EACH auto battery like me, you must process 25,000 pounds of brine for the lithium, 30,000 pounds of ore for the cobalt, 5,000 pounds of ore for the nickel, and 25,000 pounds of ore for copper. All told, you dig up 500,000 pounds of the earth’s crust for just. one. battery.

“I mentioned disease and child labor a moment ago. Here’s why. Sixty-eight percent of the world’s cobalt, a significant part of a battery, comes from the Congo. Their mines have no pollution controls, and they employ children who die from handling this toxic material. Should we factor in these diseased kids as part of the cost of driving an electric car?”

400MW/1600MWh Moss Landing Energy Storage Facility in California Image: LG Energy Solution

“Finally, “I’d like to leave you with these thoughts. California is building the largest battery in the world near San Francisco, and they intend to power it from solar panels and windmills. They claim this is the ultimate in being ‘green,’ but it is not! This construction project is creating an environmental disaster. Let me tell you why.

“The main problem with solar arrays is the chemicals needed to process silicate into the silicon used in the panels. To make pure enough silicon requires processing it with hydrochloric acid, sulfuric acid, nitric acid, hydrogen fluoride, trichloroethane, and acetone. In addition, they also need gallium, arsenide, copper-indium-gallium-diselenide, and cadmium-telluride, which also are highly toxic. Silicon dust is a hazard to the workers, and the panels cannot be recycled.

“Windmills are the ultimate in embedded costs and environmental destruction. Each weighs 1688 tons (the equivalent of 23 houses) and contains 1300 tons of concrete, 295 tons of steel, 48 tons of iron, 24 tons of fiberglass, and the hard to extract rare earths neodymium, praseodymium, and dysprosium. Each blade weighs 81,000 pounds and will last 15 to 20 years, at which time it must be replaced. We cannot recycle used blades. Sadly, both solar arrays and windmills kill birds, bats, sea life, and migratory insects.

“There may be a place for these technologies, but you must look beyond the myth of zero emissions. I predict EVs and windmills will be abandoned once the embedded environmental costs of making and replacing them become apparent. I’m trying to do my part with these lectures.”

See Also World of Hurt from Climate Policies, Part 3 Wind and Solar Infrastructure Consumes Rare Metals Far Beyond World Supplies

Global critical metal demand for wind and solar power plants

When considering a global perspective, the critical metal demand for our future renewable electricity production is significant. This graph shows the annual metal demand for the six most critical metals, compared to the annual production. The dotted line represents present-day annual production.  

Seeking Climate and Energy Security

Europe at night from space NASA 2016

News is out that US Senators are meeting in search of (using Sen. Joe Manchin’s words)  “a bipartisan climate and energy security package.” . . .  “It’s urgent to find out if there is a pathway.”

The principals should attend to Dieter Helm’s expert March 2022 analysis of Climate and Energy Security entitled Energy policy  Some excerpts are below in italics with my bolds, suggesting the thrust of his wisdom in this regard.

Introduction

Energy policy is not rocket science. It is about achieving core objectives – security of supply and decarbonisation – and achieving them at the lowest cost. Neither will be met by purely private markets, since the former is a public good and carbon is an externality not properly integrated in competitive markets. Furthermore, energy is a primary good for citizens: not to have energy deprives people and businesses from access to the wider economy and to society. It is a core USO: a Universal Service Obligation. That is why energy cannot be treated like any other commodity, as some of the architects of the “privatisation, liberalisation and competition” paradigm believed. Citizens are more than just consumers.

Security of supply requires a capacity margin: “just in case” rather than “just in time”. Decarbonisation requires more renewables, possibly nuclear, and maybe hydrogen, carbon capture and storage (CCS) and an active demand side. Security of supply sits in this decarbonisation context, and because many of the options on the generation side are intermittent, security of supply takes on a much more demanding dimension – not just the old question of access to fuels and power, but the ability to handle large-scale intermittency.

The Policy Mess We Are In

This pressure to “do something” is most intense in a “crisis”, and what is happening right now is a classic example. Lots of interventions currently being proposed by all the lobbyists are likely to make things worse.

Complexity is a lobbyist’s utopia. Engaged in each consultation, clear about the single aims of its vested interest, able to engage in each and every consultation, able to brief MPs, the media and the ministers, and sow doubt where interests are threatened, it is no wonder that the energy sector is now close to resembling that of agriculture, captured by the core interests. Spending (and it is very large-scale spending) on lobbying keeps going up as the government is more and more engaged in the details of all the main contracts.

These lobby interests have been very successful in getting subsidies and convincing government that the transition to net zero is going to be cheap (just not yet), and that there is no threat to security. Just go for net zero, they argue – on a territorial carbon production basis – sign up for lots and lots of targets and then, once the fish is hooked, play in the threat of failures and hence the case for more and more subsidies. (If it was all so cheap, we could of course abolish the subsidies – but no vested interest is demanding the end to subsidies.)

The facts –not only that decarbonisation is essential, but it is going to cost a lot – remain, and they are increasingly emerging. Each time they do, the lobbyists turn to the Treasury and ask the taxpayer to bail them out.

At its simplest, the government has been pursuing decarbonisation without addressing in parallel the security of supply implications. The failures are multiple. It is not just the gas price and the collapse of suppliers; it is also about the balancing market, and the distribution companies.

Behind all of these is the lack of a coherent market design
fit for the decarbonising purposes.

Exposure to the spot markets, with no storage and no special relationship to North Sea producers, is only one reason why the gas price increases hit the UK particularly hard. A second reason is that the UK has built a lot of intermittent wind capacity without thinking through how to manage the intermittency. In the UK (for good reasons) there is very little coal generation capacity left – except DRAX. For all the hype about batteries and smart demand management, the fact is that gas (and small diesel generators) is almost all that is currently left to do the heavy lifting.

In a renewables energy system, there needs to be a lot more capacity
to meet any given demand.

In theory, if there was no wind, then there would need to be another complete system to be on standby. As demand keeps going down – in part because of de-industrialisation (industry demand is down 20% since 2000) – capacity has been going up towards the 100GW mark, an increased requirement of over 20GW for a significantly lower total demand. It will need to go up a lot more with 40GW of offshore wind as planned. It seems to have escaped the notice of all those projecting that the costs of the transition would be very low, and claiming that renewables are cost-competitive with fossil fuels, that all this capacity has to earn a reasonable rate of return. It is a cost of renewables.

Needing the gas capacity is only one dimension of the problem. The other is how to deliver it, given that the wind has a marginal cost close to zero. Whereas a conventional gas power station could rely on running most of the time when first built, now it is itself intermittent, depending on whether the wind is blowing. This breaks the conventional back of the economics of gas investment. Hence there is no merchant gas investment. Gas shifts from being driven by a normal wholesale market towards a strategic reserve of capacity. The market design has not caught up with this. Gas now needs a capacity payment to make its reasonable return, and hence a capacity contract, which only the government can underpin.

Back to Basics

The very concept of a competitive retail energy supply market cuts across the basic idea that energy is a USO. Some think that goes beyond the pure commodity to an essential service necessary for a citizen to participate in society. Without electricity and gas, citizens can die of hyperthermia (quite a lot do each winter), they cannot access the internet, phones may not work, and the freezer thaws out. Any decent society recognises that energy cannot be simply about price, supply and demand. Yet that is precisely what the architects of the privatisation and liberalisation paradigm thought they were doing. The current crisis is not just about whether people can or will pay: it is also about all those voluntary actions to stop using the heating and the electricity, with all the consequences for the poor that this implies. Paying the electricity bill can be a trade-off with food.

The supply market is now broken, and it is unlikely that many customers will now want to switch – especially amongst the poorer ones. The government has had to step in to bail out Bulb. All electricity customers are now going to pay more than £60 each in their bills to pick up the tab for the costs of sorting out all the company failures. We have come full circle, back to an oligopoly again, and one that will need proper regulation.

The right way to address supply is to start with what customers want, to ensure that the companies serve the customers, not that the customers serve the interests of the suppliers.

How It Could Be Different

Though it is true that we are where we are, it is worth considering how it could be different by looking at what is happening elsewhere. Recall the reasons why the gas price increases have hit so hard are that the UK has lots of intermittent wind, and the electricity price is determined by the (marginal) wholesale price. Intermittency reads across to greater demand for gas, and that translates straight into the electricity price. The gas and electricity price paths match each other remarkably closely in the UK.

To see how it could be different, consider what is happening in France. It is around 70% nuclear and has a lot of hydropower. As the gas prices have shot up, the cost of nuclear and hydropower has not changed at all. Similarly in the UK, the cost of wind, solar and nuclear generation has not gone up. But now the difference. In France, the price increases are being limited to 4%. This reflects the costs. EDF understandably protests that this will lose it money (around €8 billion), because it could have sold its power into the EU markets at the spot price.

But the €8 billion is not a loss, but rather an additional profit that would go to EDF. Since EDF is largely owned by the French state, the €8 billion would be a taxpayer gain, and stands against a customer gain if the benefits of a stable nuclear power supply go to the French citizens and industry. Quite why Germans should benefit from French nuclear at this point of the gas price crisis, when it has closed its own nuclear fleet, is hard to fathom.

The building blocks of a sensible energy policy

Energy policy is all about setting a system framework within which markets operate to deliver what citizens and customers want. It starts with setting the objectives, and then ensures that these are met by a set of institutions, interventions, regulations, licences and auctions and so on.

The objectives

There are two primary objectives: security of supply and decarbonisation. Unless these are clearly and appropriately specified, no amount of ingenuity about the development of policies will be anything other than inefficient.

Security of supply includes price and costs, as does decarbonisation. Setting either independently of prices and costs make them unlikely to be attainable. In both cases higher prices have an impact on demand and hence the required supply-side infrastructure, reserves, capacity margins and the total envelope of investments. For example, gas security is always possible if the price is high enough. Supply equals demand at a clearing price. Security of supply has to be at reasonable costs, as must decarbonisation.

Both objectives are currently set as if they are independent of prices and costs. Hence they are in doubt: market participants need to try to guess the reaction function of government if and when customers and voters rebel or are simply unable to pay. In particular, there is an assumption as noted above that decarbonisation will be very low cost (perhaps 1% GDP per annum), but this is hopelessly unrealistic – it assumes as noted, for example, not only that the costs of renewables and low-carbon technologies will keep falling, but also that government policy will be perfect. There will be no government failure.

This is nonsense. Pretending that the costs are low to get governments signed up is a classic NGO trick, but the unfortunate reality is that the costs do not go away by assumption. In the current circumstances, few can bank on getting the net zero for the electricity sector by 2035. The uncertainty raises risk and hence the cost of capital.

The security of supply objective is also ill-defined, if defined at all. How much risk does the government want the economy and its companies and citizens to take that they will face price shocks? It is easy to be very secure, provided the economy can withstand the costs of a range of policies, including strategic stocks, reinforced networks and large capacity margins. We could, for example, agree to pay whatever it takes to secure LNG cargoes by agreeing to outbid every other country in the world. The costs of all of this would be beyond those that the economy could withstand.

The task of government in general, and BEIS in particular, is to set out serious and sensible objectives, and then delegate their achievement in a credible way.

Stakes in the ground

There are a number of decisions which cannot be taken by the private sector, or at least not without a very high cost of capital. The government is already the central buyer for almost everything in the electricity sector – directly or indirectly. Almost all new generation comes with a government-backed contract: a capacity contract or a CfD or a RAB. All the networks are regulated, and the regulator has a duty to finance functions in one form or another. The government controls the North Sea licences for oil and gas, and The Crown Estate runs the seabed licences.

The first stake in the ground concerns nuclear.

It can never be a purely private investment, for multiple reasons. Waste is an intergenerational liability. The political nature of nuclear means that investors always face the risk that government performs the sorts of U-turns made in Germany. Limited liability of private sector firms leaves the government with the unlimited liabilities. These considerations trump the further worries about the length of the project, cost and construction overruns, and changing regulatory requirements. Every major incident globally at a nuclear facility leads to a review of safety regulators, and safety regulators usually come up with new tighter regulations as a result.

Having a nuclear capability is part and parcel of having a robust nuclear programme, as it is of a military nuclear deterrence. Looking ahead, it is possible to envisage a joint UK– France nuclear programme, adding France’s six to say four to six in the UK, making a programme of at least ten. This would yield a supply chain. But it would need a UK company as part of the deal and a joint political framework. All of this, in the current context, is fantasy. If the UK does nuclear, it will be far less ambitious, less joined-up, and probably much more costly.

The conclusion that follows is that it is very hard to think of any worse way of taking nuclear decisions than the recent past in Britain. It maximises the cost of capital without complete risk transfer, and it minimises the supply chain efficiencies. Opting for more nuclear now as part of a security and decarbonising strategy requires the ambition to be matched by a more coherent and joined-up commitment, sustained over more than a decade.

A second stake in the ground is offshore and onshore wind.

The key point about wind is its difficult economics: it is low-density, disaggregated, intermittent and remote from consumers. Nevertheless, its lobbyists claim that wind is the cheapest form of electricity generation. Sadly this is not true once the full costs are taken into account, and that means that it is government that has to decide how much offshore and onshore wind and has to provide the subsidies to the full costs to make it happen. The regulator has to instruct the network companies to build an interconnected system between the offshore wind farms and then between the wind farms and the mainland grids. Offshore wind – the main play – differs from nuclear in all the above respects. It also differs in having shorter lead times and its components can be manufactured, currently primarily in China.

The stake in the ground decisions about the volume of offshore and onshore wind are conditional on deciding about the system infrastructure to collect and distribute the energy, and how to deal with the intermittency.

This is a system question that depends not only on the quantity in GWs of offshore wind in particular, but also on what else is on the system at the same time. It is rarely observed that the decision about wind needs to be taken in conjunction with the decision about gas – at least until there is a largescale alternative storage technology that can cope with longer periods of low wind, notably in winter (but increasingly in summer, too, as the air conditioning loads grow). Given the 2035 target for decarbonising electricity, the gas decision depends in turn on the CCS decision, since more wind means more gas, which means more CCS if the gas is to meet the net zero requirement by 2035.

This leads to the third stake in the ground – CCS.

Successive governments have stalled on CCS (Carbon Capture and Storage) investments and decisions. As noted, a Treasury paper in 2007 promised £1 billion of support to develop CCS. Fifteen years later, and despite there being even a competition for the £1 billion, CCS remains largely on the drawing board. It requires a regulatory and licences framework, a liability insurance regime, a pipeline system, and a price of carbon sequestrated.

Though all of this is reasonably straightforward, these ancillary stakes in the ground are not yet in place, and the clock is ticking both as the offshore wind develops and the 2035 deadline gets ever closer.

The fourth stake is the new kid on the block – hydrogen and green ammonia.

It is unlikely to be the last “new kid”. The promise of hydrogen is that it can be manufactured by using excess wind and perhaps even solar, thereby being truly “green”. (Nuclear could do this too, though it is unlikely to be surplus unless on a French scale.) In the meantime, hydrogen is “blue”, made from natural gas, which brings us back to CCS. Blue hydrogen is inconsistent with the net zero targets without CCS. The hydrogen decision differs from the nuclear and wind stakes in the ground because it is very much at the R&D and demonstration stage. R&D is a public good and hence there is an obvious role here for government support.

There are several other stakes in the ground, though they tend to be more about the frameworks and less the technology per se. Solar falls into this category, and targets are particularly inappropriate given the major differences between rooftop, household, farmland and other variants. In an ideal world with perfect foresight, governments might want to go further, but there are corollary dangers as the lobbyists get their teeth into government and regulators, and getting the really big decisions right on the above stakes in the ground would be a major achievement. All of the above are decisions which cannot be taken by markets.

Governments should resist the temptation to do everything. Just doing a few things well would be a massive improvement on the current policy mess described above.

Delivering the plan – guidance and the system operator and regional system operators

Government can and indeed has to take the decisions about the major stakes in the ground. What then is required is a plan to deliver the energy system within which these stakes are embedded.

These objectives will not be achieved without a plan. If, for example, the government seriously intends to get to net zero for the electricity sector by 2035, then with 13 years to go, it needs to radically up its game and set out a plan to get from here to there. To give some examples, if part of the plan is to build lots more offshore wind and to increase electricity capacity to tackle transport and some heating, then as noted it will need a lot of gas capacity to back it all up. That in turn will need CCS, since electricity will not be net zero if there is a lot of gas on the system unless the gas is net zero and the only plausible way of doing this is to use very large-scale CCS. Similarly, it makes a lot of difference to the networks and the capacity requirement whether there is more nuclear or not. To get more nuclear in just 13 years on the system requires a lot of actions now. The stakes in the ground are for government: the delivery of the system to meet these is an evolving and detailed matter. Things will change. Nuclear might be late, wind costs may increase, and so on.

Someone has to manage this process, and whilst the government and BEIS can and should issue guidance – notably in respect of the overall objectives and the stakes in the ground – there need to be a system architect. The obvious place to start is with the SOs at the national and also at the regional level too. The Cost of Energy Review sets out how these should be separated from National Grid and the distribution network operators (DNOs) and details some of the consequences for Ofgem and system regulation. Five years later, the government is still prevaricating about how to do this. Every year means that the system plan remains incomplete, which means that it is harder and harder to meet the 2035 target and the costs of doing so goes up. It has an impact on the generation investment decisions, notably because without a network system in place, uncertainty increases and hence the costs of capital goes up.

Creating a market fit for the purposes of the twenty-first century

Critical to rebasing energy policy now is a series of decisions – stakes in the ground – that have been fudged in recent years. Either do nuclear properly or not at all. Recognise the security implications of lots of intermittent wind on the system and plan the system architecture to deal with this. Integrate the offshore and onshore electricity grids. Do not ignore the gas that will be a part of the back-up for at least a decade to come. Do not pretend that stopping new gas production in the North Sea solves the problem of UK consumers consuming a lot of gas by importing it instead.

Get on with separating out the regional SOs and the national SO. Evolve quickly to an EFP market to supersede the fossil-fuel-driven wholesale markets of the twentieth century. Take longer term contracts seriously rather than relying overwhelmingly on spot markets, and extend the price cap periods to a year. Get on with designing and implementing an integrated CCS system offshore.

Do these things, and spend less on perverse subsidies, and the UK can have secure energy at a reasonable cost and decarbonise at the same time. Ignore all these, and not only will the UK lack security, but it will pay higher prices and the 2035 target will fade, and possibly with it the willingness of the public to support the vital objective of decarbonisation.

See also World of Energy Infographics