Sane vs. Stupid Energy Policies

Gene Yaw writes at Real Clear Energy What Critics Get Wrong About Energy Choice.  Excerpts in italics with my bolds and added images.

Last month, seven environmental groups wrote a misguided letter to Philadelphia officials bashing legislation that I sponsored as counterintuitive to the city’s decarbonization goals.

In October, six Democrats, including two from the southeast corner of the state, joined all 28 Republicans and our chamber’s lone Independent to approve Senate Bill 275. That’s a veto proof majority, for those counting.

Why? Because the bill’s purpose is simple: it prevents Pennsylvania’s 2,500-plus municipalities from banning access to certain utilities, like natural gas or heating oil. This will preserve consumer access to affordable electricity, no matter where they live, and prevent a chaotic patchwork of regulations that ultimately undermine statewide environmental and energy policies.

It also reaffirms what many local and statewide officials, including the Pennsylvania Public Utility Commission, already understand to be true: municipalities do not have the authority to restrict energy sources.

What the bill does not do is prevent Philadelphia City Council from pursuing its goal to retrofit all publicly owned buildings to reduce emissions 50% over the next decade. It’s not just about ripping out gas lines and oil tanks and installing heat pumps instead. Reducing electricity usage – through upgraded windows, roofs and insulation – is also a crucial piece of the puzzle.

The aforementioned environmental groups said that SB 275 will eliminate any hope of Philadelphia reaching carbon neutrality by 2050. Which begs the question, if the only way to achieve decarbonization is by indiscriminatingly banning utilities deemed “dirty” and “bad,” is that even a good plan? Isn’t there an old adage forewarning the danger of putting all your eggs in one basket?

Banning specific fuel sources in pursuit of “clean energy” makes zero sense in Philadelphia and beyond. First, clean energy is a misnomer. There’s simply no such thing. Even if we shuttered every coal and gas plant across the world tomorrow and began a frantic campaign to install wind and solar farms in their place, we’d need to cover about 1.8 million square kilometers of land and coastline to replace the lost capacity.

And we would need fossil fuels to produce all of those solar panels and wind turbines. Just like we need oil and gas to create and distribute nearly every product we use every single day, from the medications we take to the clothes we wear to the packaging we use to preserve our food. To assume that banning fossil fuels will only impact emissions and electricity prices is to ignore the intricate web that is our economy.

Besides, the city doesn’t exist in a vacuum. It’s connected to a vast, 13-state power grid called PJM, that manages the safe and reliable flow of electricity for 65 million people from Chicago to Washington D.C. and many places in between.

PJM’s operators ensure that its network of transmission lines and generation facilities work in tandem every minute of the day, preventing system overloads that could trigger massive utility failures and inflict untold suffering on millions in its territory. So, if electricity demand spikes in Philadelphia, but environmental policies have forced fossil fuel plants into nonexistence, there are fewer reliable energy sources to shoulder the burden.

 

A similar story unfolded in Texas in February when an unprecedented winter storm froze generators and rendered solar and wind farms useless, leaving more than 4 million residents without power or water for days. More than 200 people died amid the chaos. The Electric Reliability Council of Texas, the state’s grid operator, promised to winterize its system to harden it against future storms, but the damage was done. The rest of the nation should take note: a diversified and robust grid is key to preventing systemwide catastrophes.

Which brings me back to the idea of banning access to fossil fuels. If we are willing to sacrifice our food, clothing, shelter and transportation, doing so might eliminate some carbon emissions in the United States. Globally, U.S. emissions equal about half of what China produces on an annual basis, according to 2018 figures. The annual combined emissions from the other three top polluting nations – India, Russia and Japan – would likewise take our place.

Then there’s the emissions from sources we can’t always control: volcanic eruptions, livestock, forest fires. Or the damage caused by human activity like deforestation and degenerative agriculture. Even if the United States found a solution to every single unsustainable practice that critics say contributes to climate change, the rest of the world’s leading nations aren’t following suit.

So what do these groups really want from the city? They want officials to take a sledgehammer to our carefully planned and managed power grid, collapse our economy and leave Pennsylvanians with higher electric bills, fewer jobs and unreliable utilities. All for the sake of reducing carbon emissions that will be offset by the rest of world, in perpetuity.

Protecting energy choices for consumers means that residents can pursue “cleaner” electricity sources if they want to or can afford to, while not punishing those who don’t have the option. SB 275 isn’t about protecting special interests – what does a senator from Williamsport owe to Philadelphia’s gas utility?

What I do care about is promoting sound energy policy that doesn’t leave others behind for the constant pursuit of ideological purity, no matter how impractical or impossible or harmful it is for the very people such policies purport to help.

Senator Gene Yaw was elected to represent the 23rd Senatorial District consisting of Bradford, Lycoming, Sullivan, Union Counties and a portion of Susquehanna County. He serves as Chairman of the Senate Environmental Resources and Energy Committee.

Pushback on Corrosive Energy Idiocy

Congressman Byron Donalds excoriates the House Oversight and Reform Committee for biting the hands that energize the nation in the five minutes allowed him in video below.  (The settings button on the video allows you to turn on subtitles). For those who prefer reading, my transcript (lightly edited) follows in italics with my bolds and added images.

Chair: The gentleman from Florida Mr. Donalds is recognized for five minutes.

Donalds: Thank you Madam Chair and first of all to the witnesses, the the leaders of Exxon, Chevron, BP, Shell, I know that the climate activists are in twitter world which Dave Chappelle says doesn’t exist. And he’s right because it’s just people who have nothing better to do but type on their keyboards. And we do it too here in congress.

But let’s be very clear. You deserve an apology, because what I witnessed today was just rank intimidation by the chair of this committee, trying to get you to pledge on what you’re going to spend your money, is a gross violation of the first amendment. Just because we’re members of congress, and we’ve got microphones and we passed laws, does not mean that we also have the ability to infringe on your ability to organize, whether it’s API or anybody else, or what you choose to spend your money on. It is disgusting, absolutely disgusting. Somebody needs to go call Merrick Garland to tell them to get in here and watch the intimidation that came from this very panel today.

Because this is not about defending big oil or defending big anything; it’s about defending the ability of people in our country to be free to say what they want, think what they want, spend their money how they choose. And if we’re not going to be any better than the Chinese, how do we ever expect to beat them on the world stage? When we’re cutting our neck when it comes to energy production, while they are burning more coal, burning more oil. They’re increasing their emissions and they’re not showing up in Scotland. And why not?

Because they’re interested in building an economy; they’re interested in becoming the dominant economic player across the globe, in becoming the dominant military player across the globe.

Meanwhile we joke around and mess around intimidating you guys who frankly heat our homes, you cool our fridges and keep our cars going. This is insane. So I’m sorry for you and I’m sorry for the people in our country who have to witness shenanigans like this and witness circuses like this.

One show on HBO or whatever it is, is called the circus because that’s exactly what this is. Madam Chair, I’m requesting that a letter be entered into the record. This is a letter written by ranking member Comer and the other ranking members on this committee that actually speaks to the chilling effect that has come from you Madam Chair, asking you to stop intimidating companies, requesting information that is their first amendment right to have. I ask that letter be admitted into the record under unanimous consent

Chair: Without objection.

Donalds: Thank you Madam Chair.

I have a question for Mr. Sommers, now that we’re done with that. Mr. Sommers, it was asked of the executives if they believe in electronic vehicles. And it’s a noble goal to have, but Mr. Sommers: Where does the energy for electricity production actually come from?

Mike Sommers, President, American Petroleum Institute: Thank you congressman. Before I address that question, I do want to clear up one thing. Having a difference of views on electric vehicles is not climate disinformation. We as an organization support all forms of energy. We support the rapid advancement of electronic vehicles as well. But at the same time we don’t agree that the federal government should be the ones funding the build out of that infrastructure. As we built out service stations across the country, those service stations have been developed not by the federal government but by private industry. And members on this panel themselves are investing in building out that infrastructure, as is appropriate for the private sector.

First of all your question is very very important, which is: Where does that energy come from? In the United States most of the energy comes from natural gas. It has replaced coal as the primary source of energy in this country.

Donalds: Let me ask you this question as a follow-up. So if we don’t have natural gas, and obviously the democrats are against coal, where would we actually get the electricity to power all of these electric cars?

Sommers: Well congressman for most countries, and certainly for the United States, there would be likely be a fuel switch back from natural gas to coal.

Donalds: So real quick Mr. Sommers, I don’t mean to cut you off, because you make a great point, but I have 30 seconds. It is important for the American people to understand that if you follow the idiocy that’s in the bipartisan infrastructure agreement, it is going to make natural gas harder to procure. We’re actually not going to have lower emissions we’re going to have higher emissions because you’re going to have to switch back to coal fire plants.

And just for the record let’s also say the world will always demand energy. if you’re not getting it from us, where we actually do it more safely and more cleanly, you’ll get it from Russia or from China. And they don’t care what the climate activists have to say on twitter.

I yield the floor.

 

Leftist Energy Ignorance Abounds

Leftists are recognized by having three personality traits:  Know-it-alls, Drama Queens and Control Freaks.  The latest example is Liz Warren blaming rising fuel prices on energy producers rather than on her favored restrictive energy policies.  An article schooling the senator and her constituents is published at the Delaware Valley Journal PA Energy Pros Dismiss Liz Warren’s Complaints: ‘It’s Econ 101, Not Rocket Science’.  H/T Tyler Durden Excerpts in italics with my bolds.

Sen. Elizabeth Warren’s latest attempt to “turn up the heat” on the energy sector sparked a backlash from industry leaders who say the real problem comes from policies the Massachusetts’ Democrat has endorsed.

In recent letters to natural gas producers, Warren blasted what she called their “corporate greed” and demanded an explanation for the record exports of natural gas at the same time prices are rising in the U.S.

Warren wants the industry to respond to questions about “the extent to which these price increases are being driven by energy companies’ corporate greed and profiteering as they moved record amounts of U.S. gas out of the country,” she wrote.

She got a response, but not the one she demanded.

Leaders in the natural gas sector responded with a letter of their own, dismissing Warren’s comments as a diversion, one intended to distract consumers from the impact of the energy policies she’s championed.

“This a misguided and headline-grabbing ploy,” says David E. Callahan, president of the Marcellus Shale Coalition (MSC).

“If she knows anything about these highly complex energy markets, she must know what’s really going on here,” added Callahan, who co-authored a response letter alongside the leaders of the Gas & Oil Association of West Virginia (GO-WV), and Ohio Oil & Gas Association (OOGA). “It’s a commodity market, prices ebb and flow, and the market is responding to those signals.

Warren is an aggressive supporter of the Green New Deal, which would drastically restrict the production of oil and natural gas. In her state of Massachusetts, policies blocking the expansion of natural gas pipelines have resulted in Russian LNG tankers in Boston Harbor bringing fuel to the Bay State.

“She has her constituents to represent and her political affiliation to support,” said Charlie Burd, executive director of GO-WV. “But to be perfectly honest, I just think those comments almost show a complete lack of understanding on how energy is explored for, produced, and transported in this country.”

And those constituents are paying the price, according to Callahan.

“Number one, her region has very high energy costs, and her region is severely capacity-constrained when it comes to pipeline infrastructure,” Callahan said. “A Carnegie Mellon study from within the year pointed out that due to those pipeline constraints, customers in the New England region paid upwards of $1.8 billion in excess energy costs during just one month in 2014.”

“It’s really supply and demand 101,” added Burd. “It’s not rocket science.”

Republican National Committee spokesperson Allie Carroll said Warren’s latest attempt to blame energy companies for the results of Biden and Democrats’ war on energy is an insult to hardworking Pennsylvanians.

“From canceling the Keystone XL pipeline to stripping away our energy independence, Democrats’ reckless anti-energy policies are crippling our country, and turn after turn, Pennsylvania families are paying the price.”

Pennsylvania is the nation’s second-largest producer of natural gas, and attacks on the industry have an impact on the state’s economy.

“Hostility toward the fossil fuel industry ill-serves the American people, including Pennsylvanians who sit atop huge natural gas and coal deposits that provide plentiful and affordable energy to millions of people,” said Gordon Tomb, a senior fellow at Commonwealth Foundation. “The benefits of these resources can hardly be overstated: well-paying jobs and prosperity as well as a foundation for all kinds of business activity and energy security.”

Republican U.S. Senate candidate Dr. Mehmet Oz also pushed back on Warren’s approach.

“The ground under Pennsylvania and surrounding states has almost as much natural gas as Saudi Arabia that is readily accessible through fracking,” Oz said. “We should be using this to make our nation safer, create jobs, and less dependent on China. As the Senator for Pennsylvania, I will fight against any effort to destroy Pennsylvania’s energy leadership and the jobs it supports.”

Meanwhile, Europe is facing fuel scarcity as winter approaches and some of the nations are turning back to coal to meet immediate demands. American exports are vital, experts say.

“Our friends and allies in Europe and Asia, they need natural gas and for a whole host of reasons including over-reliant policies on intermittent renewables,” says Callahan. “The wind is not blowing as hard as they expected it to this year, they find themselves in need of natural gas, and so we’ve been shipping some gas overseas to supply those markets and help our friends.”

Frank Macchiarola, American Petroleum Institute (API) Senior Vice President of Policy, Economics and Regulatory Affairs, also has a message for U.S. policymakers.

“They play a critical role in spurring long-term investment in U.S. natural gas supplies as well as expanded pipeline capacity to deliver the energy America and the world needs while driving down emissions,” says Macchiarola. “Rising natural gas costs reflect an imbalance between supply and demand that is exacerbated in regions like the northeast due to added state-level policy restrictions on building much-needed gas infrastructure that has made the region more reliant on foreign imports.”

Callahan believes Warren should “support infrastructure expansion” to get product where it is needed, domestically and globally.

“We felt the need to set the record straight, that the rhetoric is dangerous,” said Callahan.

 

Don’t Forget Biden’s War on Energy Producers

Hugo Gurdon writes at Washington Examiner that  Biden Hopes You Forget His War on US Energy Producers.  Excerpts in italics with my bolds.

Joe Biden’s decision to order the Federal Trade Commission to investigate high gasoline prices and see if Big Oil is manipulating them prompts an ironic chuckle, for it is perfectly emblematic of this presidency. It is calculated to suggest concern about a widely felt problem without actually giving two hoots about it except insofar as it might do serious electoral damage to the party of the Left.

Since their drubbing in the Virginia governor’s race and elsewhere on Nov. 2, panicky Democrats have scrambled to create the illusion that they’re still in touch with the concerns of ordinary Americans. Biden touts his Build Back Better — or is it Bankrupt? — welfare plan as a “blue-collar blueprint” for prosperity. Translation: Hey, little people, I’ve got your back. The hapless veep nods toward government’s need to hear everyone’s voice. Translation: We don’t think you’re deplorables.

Uh-huh.

And now, because everyone notices and dislikes rising pump prices, Biden wants to persuade us saps to disregard Occam’s razor and believe corporate baddies are to blame, not his mismanagement and cheek-by-jowl adherence to the Left’s anti-energy agenda.

The reality is that Biden and his minions have waged war on domestic energy producers since his first day as president. Even now, he is doing his best to foist a comptroller of the currency onto the nation who explicitly calls for the ruin of oil companies, saying she wants them to “go bankrupt.”

Prices are soaring because demand outstrips supply, and several of the reasons can be laid at Biden’s door.

He’s weakened the supply chain, discouraged domestic production in part by raising costs, and failed to persuade Russia, the Saudis, and others to bail him out with more output. (He begged them to increase production — another national embarrassment — which would substitute dirty overseas output for the world’s most regulated and cleanest production here at home. So much for concern about greenhouse gas emissions).

The problem for Biden is that sleight of hand, extra PR, and frantic communication efforts don’t fix underlying problems, as the Washington Examiner’s Byron York recently noted . The administration can spin like a dreidel — goodness knows, it’s trying — but spin doesn’t change the facts.

Obscuring the real causes of rising prices won’t make prices come down or people feel them less. Saying inflation is a luxury concern and anyway is only temporary won’t make it so. Saying another $4 trillion of spending, much of it with borrowed money, will reduce price acceleration won’t achieve that end.

So, as you drive to join family members to celebrate Thanksgiving this week, you’ll know who to thank for the extra $20 you must pay to fill your gas tank each time. When you sit down to dinner, you’ll know who to thank for the fact that your favorite foodstuffs were out of stock.

Yet, for all that, there are real reasons, even in today’s politics, to be thankful. One is that voters have already seen through the Democrats’ spin and are signaling that change is a-coming. Another is that presidential terms don’t last longer than four years.

War on Energy Case Study:  Trainer Refinery south of Philadelphia

Gordon Tomb writes at Real Clear Energy East Coast’s Remaining Refineries’ Daunting Domestic Threat.  Excerpts in italics with my bolds.

The modernization of the Trainer Refinery south of Philadelphia is initially obscured by aged brick buildings and hulking equipment. With closer examination, however, emerge brightly painted pipes, scores of gleaming white tanks and towering construction cranes that hint of ongoing upgrades.

With a growing post-pandemic economy and strong energy prices, prospects are bright save for threats of a controversial carbon tax scheme by the governor and federal regulations. Federal rules have contributed to the closure of seven independent refineries on the East Coast since 2009, leaving only Trainer and three others remaining. And one of those — owned by PBF Energy in New Jersey — closed half its refining units and laid off 250 employees last summer.

Monroe Energy, which owns the Trainer Refinery, annually spends tens of millions of dollars on improvements to keep abreast of government regulations and customer needs. A few years ago, it invested nearly $200 million on installing equipment to make low-sulfur gasoline. Currently, the company is building high-efficiency electrical substations, as well as water-cooling units that enable millions of gallons of water to be reused, drastically reducing dependence on Delaware River water.

It employs approximately 500 people and hires at any one time up to 1,400 members of the Philadelphia Building Trades for maintenance projects that can last for months. Because of their work, Trainer produces daily more than 8 million gallons of fuel, mainly for transportation and heating.

Among the worries is Pennsylvania Gov. Tom Wolf’s proposal to institute a tax on electricity generators that use fossil fuels through the Regional Greenhouse Gas Initiative (RGGI). This taxation scheme is intended to replace fuels like coal and natural gas with more expensive wind and solar energy.

In comments to regulators, Monroe Energy noted its extensive use of electricity and cited data showing that the cost of power was 38 percent less outside existing RGGI states. The company has spent hundreds of millions on environmentally beneficial investments with plans for more. “However, Monroe added, “we fear that enacting a program like RGGI will increase costs to such an extent that we may be unable to move forward with some of these projects.”

RGGI also would put at risk tens of thousands of jobs in Pennsylvania’s electric-power and manufacturing industries by inducing operations to move away.

An even more immediate issue for Monroe is the federal government’s 16-year-old Renewable Fuel Standard (RFS), which requires refiners to add ethanol to transportation fuels or buy credits. The RFS has expanded since its inception creating a burden that threatens to put Monroe out of business if not addressed.

Ethanol is added to fuel as it is distributed to end users — or shortly before — to protect the equipment of refiners and transporters from the additive’s corrosive effect. Because Monroe does not sell to end users, it has virtually no ability to add ethanol and has to buy credits, whose price has risen from a few cents to nearly two dollars.

“The difference between credit prices of 2 cents and 2 dollars for us is hundreds of millions of dollars in compliance-obligation costs,” says Mr. McGlaughlin. Since buying Trainer in 2012, Monroe has spent more than $800 million on RFS compliance — multiples more than the refinery’s purchase price.

The negative consequences of both RFS and RGGI — including job losses and diminished fuel security — seem obvious to nearly everybody. Yet the employees at Trainer are still waiting for relief from Washington while also hoping to avoid the economic wreckage proposed by the governor and the absurdity of bureaucrats trying to improve the climate.

“We hope people will side with us and allow us to keep doing our jobs,” says Ron Pierce.

See also Energy Industry Fights Off Biden Hostile Takeover

 

 

 

 

 

King Coal is Dead. Long Live the King!

You’ve heard the pronouncements:  “Coal Is Dead and Oil Is Next.”  “Glasgow is the Death Knell for the Coal Industry” (Boris Johnson).  “Coal is declining sharply, as financiers and insurance companies abandon the industry” (Yale360) “Parties to accelerate efforts towards the phase-down of unabated coal power” (COP26 agreement). The unspoken reality is the opposite:  Demonizing coal has increased coal consumption.  MISH explains in his article The Big Green Push to Get Rid of Coal Had the Opposite Effect.  Excerpts in italics with my bolds.

An alleged big win to eliminate coal turned into a bust and then some.

Investors Pushing Mining Giants to Quit Coal is Backfiring

Bloomberg has an interesting story on how Environmentalists Pushing Mining Giants to Quit Coal has backfired.

It was supposed to be a big win for climate activists: another of the world’s most powerful mining companies had caved to investor demands that it stop digging up coal.

Instead, Anglo American Plc’s exit from coal has become a case study for unintended consequences, transforming mines that were scheduled for eventual closure into the engine room for a growth-hungry coal business.

And while it’s a particularly stark example, it’s not the only one. When rival BHP Group was struggling to sell an Australian colliery this year, the company surprised investors by applying to extend mining at the site by another two decades — an apparent attempt to sweeten its appeal to potential buyers.

Now, after years of lobbying blue-chip companies to stop mining the most-polluting fuel, there’s a growing unease among climate activists and some investors that the policy many of them championed could lead to more coal being produced for longer.

BHP may end up holding on to the Australian mine it was battling to sell, Bloomberg reported last week. Earlier this year, Glencore Plc sounded out a major climate investor group before announcing it would increase its ownership of a big Colombian coal mine, according to people familiar with the matter.

India now burns more coal than Europe and the U.S combined and miners are betting on rising demand over the next decade from countries such as Vietnam, Bangladesh and Indonesia, although pollution concerns and cheaper alternatives threaten to derail those plans.

Tough to Eliminate Coal

The push to abandon coal made selling the mines difficult. So companies chose to extend their life.

Developing countries that invested in coal-powered electrical plants that have many years of useful life want reparations to develop new plants.

New wind and solar plants are cheaper but unreliable. And they are not cheaper than plants already built.

Moreover, wind can die for days and solar has on average 12 hours a day of outages.

This places additional capital investment requirements for countries to build energy storage facilities.

China alone is currently building or planning coal power plants that are the equivalent of six times Germany’s entire coal burning capacity.

It’s tough to get rid of coal when you build more coal plants than you retire.

David Stockman: Resist the GreenMageddon, Part 5

 

Double-click on image to enlarge.

This is the fifth and final post of a series to alert readers to a compilation of the scientific and economic case against the claims of IPCC supporters and anti-fossil fuel activists. David Stockman provides the evidence and the arguments against the IPCC policy framework in a series of five essays published at International Man under the title The GreenMageddon and What It Means for You. I have stated the five themes he develops in his essays, along with some excerpts and images to illustrate the main points. Here is the Fifth theme overview and discussion.

5.  GreenMageddon is no hyperbole. It’s is the virtually certain outcome of attempting to purge CO2 emissions from a modern energy system and economy that literally breathes and exhales fossilized carbon.

Indeed, the very idea of converting today’s economy to an alternative energy respiratory system is so far beyond rational possibility as to defy common sense. Yet that is exactly where the COP26 powers that be and their megaphones in the MSM are leading us.

In Truth, Green Energy is Overrated and Supplies Little of the Energy We Use

In the first place, it needs be understood that the climate change advocates essentially lie about how much “green energy” we now use and therefore the scope for energy supply system displacement of fossil fuels which would be required to get to net zero CO2 emissions by 2050.

For instance, it is commonly claimed that 12% of US primary energy consumption (2020) is accounted for by “renewables”, implying that we are off to a decent start in eliminating the fossil fuel dependency of the system.

Actually, no—not even close. That’s because “renewables” and green energy defined as solar and wind are not remotely the same thing.

According to DOE, the US consumed 11.6 quads (quadrillion BTUs) of renewables in 2020, but 7.3 quads or 63% of that was accounted for by old-style non-fossil fuels including:

  • Hydroelectric: 2.6 quads;
  • Wood: 2.5 quads;
  • Biofuels: 2.0 quads;
  • Geothermal: 0.2 quads

Of course, there is nothing wrong with these non-fossil fuels and in some cases they can be quite efficient. But they are not part of the “green solution” to displace some or all of the 73 quads of fossil fuels consumed in 2020 because most of these sources are tapped out or not desirable to expand.

We have already seen, for instance, that hydroelectric—which was a favorite of the New Deal back in the 1930s—was tapped out long ago. Up to 80% of the long rivers in the US are already damned, and environmentalists haven’t permitted a new major hydroelectric project in decades. In fact, hydro-electric output of 291 billion kWh in 2020 was well below the peak level of 356 billion kWh recorded in 1997 and was even exceeded by the 304 kWh generated way back in 1974.

Nor do we hear the Climate Howlers beating the tom-toms for the original source of modern BTUs— more wood combustion!  Actually, they advocate the opposite: Massive tree-planting as “offsets” to carbon emissions.

Likewise, most of the 2.0 quads attributable to biofuels is accounted for by ethanol produced from fermented corn. Yet any material increase in ethanol consumption—via higher mandated blending with gasolinewould likely wreck most of the IC engines on the highways, while turning the vast food production expanses of Iowa and Nebraska into fuel farms.

Finally, consider the implicit lesson in the small amount of consumption—0.2 quads—attributable to geothermal energy. As it happens, geothermal electricity is about as close to a perfect source of renewable energy as you can get, as one analysts recently noted, but there is a huge catch:

So why isn’t there more of it?

Because there wasn’t much of it to begin with. While renewable energy sources like wind and solar are exploitable to a greater or lesser extent almost everywhere, high-temperature geothermal resources are found only there is a coincidence of high heat flow and favorable hydrology, and…..these coincidences occur only in a few places.

Which Leaves Wind and Solar, Which Leaves a Lot to be Desired

This gets us to the only so-called “renewables” which are actually expandable at scale—-solar and wind. As to the former, it needs be noted that US consumption during 2020 amounted to only 1.2 quads, or less than half of the primary energy supplied by wood (including a small amount of industrial consumption of bio-waste such at pulp mills etc.).

That’s right. After decades of big time subsidies and endless government promotion, solar is still eclipsed by the fuel first used by cavemen!

The problem with wind power, however, is no less prohibitive. In the case of the 3.0 quads of primary energy attributed to wind in 2020, virtually 100% was used by utilities to generate electricity for the grid. Accordingly, only 90% of that wind energy ever makes it to a home, industrial plant or EV auto. The difference is accounted for by BTUs lost in downstream transmission and distribution lines (T&D losses). And when you add the fact that 64% of primary solar consumption was also used by electric utilities and also suffered T&D losses, you get a truly startling fact.

To wit, only 3.4 quads of solar and wind energy actually generated net electrical power to end users in the US economy in 2020.

In turn, that tiny figure represents only 4.9% of the 69.7 quads of net energy from all fuels (after deducting utility system waste from all fuel sources) used by the entire US economy in 2020. Yet even that tiny fraction was an artifact of the massive government subsidies which have been thrown at the two green fuels.

In the case of wind power, for example, there is a Federal subsidy of 2.5 cents per kWh, which happens to represent 69% of the average wholesale price for wind power, plus a 30% investment tax credit for the original installation of wind farm CapEx. Then again, no one charges for the wind—so wind power is massively capital intensive with CapEx representing 70% of lifetime wind power costs, meaning that another 21% of the cost of power is funded by Uncle Sucker.

Green Energy is fraught with obstacles and risks.

Still, the question recurs. How do you get to, say, a 50% replacement of fossil fuels with green energy by 2035, which would be the minimum path to net zero CO2 emissions by 2050—even assuming still more wasteful Joe Biden subsidies than we already have?

In a word, you don’t. That because even a surface investigation takes you smack into the unacknowledged elephant in the green energy room. To wit, the only practical way to deliver wind and solar to the end use sectors of the economy is through massive conversion of green BTUs to electricity and the distribution of them through the leaky power grid.

Needless to say, that process would be fraught with obstacles and risks that the Climate Howlers never even remotely acknowledge. In fact, as we will show below, to convert even 50% of current fossil fuel consumption to wind and solar, would require a near doubling of total primary energy consumption in the utility sector from the 35.7 quads reported for 2020 to nearly 66 quads by 2035.

More crucially, the 10.6% share of utility primary energy or 3.8 quads posted in 2020 for solar and wind would rise to nearly 67% and 44.0 quads by 2035 (see calculations below). That is to say, solar and wind production would have to rise by nearly 12-fold over the next 15 years. And the cost of subsidies to make it happen (including drastically rising retail utility prices to consumers) would be truly staggering

Now, here’s the thing. Given the inherent intermittency and unreliability of solar and wind energy, the electric grid would become dangerously more fragile and subject to brown-outs and blackouts during periods of peak demand and low solar/wind production. That’s because when you take out half or about 11 quads of fossil energy now used by the electric utility industry you are removing baseload capacity which is essentially available 100% of the time, save for scheduled maintenance and very occasional unplanned interruptions.

By contrast, when two-thirds of the grid is powered by solar and wind as we have projected for 2035 under the COP26’s net zero regime, you have fundamentally transformed the nature of the electric power system. There would essentially be no baseload power supply left, meaning that the system would have to be equipped with massive pumped-hydro, compressed air or battery storage facilities to back-fill for no wind or sun days— plus meet time of day and seasonal demand surges, which would get far more severe when nearly the entire economy gets electrified, as further explained below.

The problem, of course, is the production of electrical power so that it can be stored and drawn-down later is inherently inefficient and a BTU waster. That’s especially the case, with pumped storage, the only practical idea for large scale system storage and back-up. Of course, what that solution does is burn a lot of BTUs pumping water uphill to a reservoir—so that the sluice-gates can be opened to regenerate the very same hydroelectric power when needed at a latter date.

Overall, it is estimated that the range of available storage solutions would result in a 10-40% dissipation of the primary green energy supplied to the utility system. So not only would massive costs be incurred to finance power storage, but the loss of BTUs in the storage loading and extraction process would require even more primary green energy capacity to make up for the wasted BTUs!

Thus, if the energy loss owing to storage systems for 32.2 quads of incremental solar and wind conservatively averages 25%, another 8 quads of solar and wind primary capacity would be needed to supply projected 2035 power requirements. That is, by 2035 utility system would need 44 quads of solar and wind or 11.5-times more capacity than its actual green power output in 2020.

For want of doubt, first consider the implications of shifting 50% of fossil fuels used in the transportation sector to solar and wind fueled electrical power production. During 2020, the transportation sector used 24.23 quads of primary energy, of which fossil fuels—petroleum products and natural gas—supplied 22.85 quads or 94% of the total.

It’s also not the half of it. When you switch to EV vehicles and and distribution of 3X more quads of energy through the utility system you are also creating havoc with load management. That’s because travel surges around holidays create peak loads that drastically exceed day-in-and-day-out levels. In the case of air travel, for instance, during a typical year revenue passenger miles in July are equal to nearly 140% of the level for the seasonal low in February.

Just imagine a hot but cloudy and windless July 4th. The normal air-conditioning and commercial demand surge would be over-layed with a huge fleet of EVs on the holiday roads and hitting the charging stations with relentless effect. This year, for instance, an record 47 million travelers hit the road on the July 4th weekend.

Of course, that is not a problem for the existing motor fuel supply system. Average demand is about 9 million b/d, but motor fuel stocks range between 220 and 260 million bbls—plus another estimated rolling inventory of 50 million barrels in the tanks of the nation’s 285 million vehicles. So with upwards of 300 million bbls or 33 days of supply in the system, peak load fluctuations are readily absorbed by the system.

Needless to say, electrical power is another breed of cat.

It can’t be stored as produced. As indicated above, production must always meet instantaneous demand or the grid will collapse. The only solution is to store dispatchable electric power in another form—pumped storage reservoirs or batteries, and that’s damn expensive.

Moreover, unlike the vastly de-centralized motor fuel stocks which are efficiently market-driven, creating a massive system-wide dispatchable surplus on the utility grid for peak EV demands would be a daunting task. After all, you would need about 140 million EVs on US roads versus today’s 1.4 million plug-in EVs to displace 50% of motor fuel demand.

Nor is the transportation sector unique. Currently the industrial sector accounts for 22.1 quads (2020) of primary energy demand, of which 19.7 quads are supplied by fossil fuels. Those fossil fuels supply various combustion equipment, IC engine driven power plants and machinery, as well as feed stocks for chemical processing industries.

The story only gets more complicated when you add-in the residential and commercial sector. For instance, the residential sector is already heavily electrified owing to the electrical powering of lights, air conditioning and household appliances. Consequently, while the household sector has primary energy demand of 6.54 quads, it actually uses 11.53 quads counting the 5 million quads of indirect energy consumption supplied through the electrical utility grid.

That is to say, the single most variable energy demand sector—America’s 130 million housing units—-would become virtually all electric. Fully 9.0 quads out of total residential energy demand of 12.0 quads (including current electrical power use) of consumption would be supplied by the electrical grid by 2035.

Would that fact create an even more egregious disconnect between unreliable solar and wind power on the fuel side of the electrical grid and variable demand on the user side?

Most surely it would. And that’s especially true when you add in the last two elements of the supply-demand picture. To wit, the commercial sector is growing at about 0.6% per annum, so by 2035 total primary use would be 5.3 quads and the incremental wind and solar requirement to replace half of current fossil fuels, which currently account for 88% of primary energy demand in the sector, would total 2.9 quads.

Finally, the baseline demand for primary energy in the utility sector itself is about 37.0 quads (2019) and it has not been growing for years. So on a 2035 projection, current fossil and non-fossil sources of utility energy would be as follows before giving account to the displacement shifts estimated above in the four end-use sectors of the economy. And this optimistically assumes no loss of nuclear or hydro capacity in the interim.

On an all-in basis, therefore, the implicit transformation of the utility sector would be staggering, and that would only get you half-way to zero net carbon by 2050. Here is the summary of what would be required in terms of total solar and wind capacity in the utility sector by 2035:

  • Current solar & wind: 3.8 quads;
  • transportation sector replacement: +8.5 quads;
  • residential sector replacement: +3.9 quads;
  • industrial sector replacement: +12.9 quads;
  • commercial sector replacement: +2.9 quads;
  • utility sector replacement: +4.0 quads;
  • back-up storage: +8.0 quads;
  • Total Solar & Wind, 2035: 44.0 quads;
  • Multiple of 2020 level: 11.6X

It goes without saying that the above is an economic train-wreck waiting to happen. You simply don’t go from 3.8 quads of solar and wind after decades of tepid gains to 44.0 quads in less than 15 years. Plain and simply, such a shift would take the US hostage to a centralized utility grid based energy respiratory system that would be dangerously unstable, imbalanced and subject to catastrophic black swan type events.

Summary

No electricity is stored in a grid; supply must match demand at all times, or it must shut down to save itself.  Climatists want to electrify everything, especially heating and cars, thereby spiking and complicating demand. Meanwhile the plan is to increase intermittent and remote wind and solar plants, making supply unpredictable. Get ready to be stuck at home, freezing in the dark. That’s GreenMageddon.

Footnote

The diagram at the top indicates many dimensions of modern life that are not discussed in this series of posts.  The short video below reminds that fossil fuels yield a plethora of ancillary byproducts that enhance and extend our lives; which will also be taken away by the Green agenda.

 

 

 

 

COP Ignorants Pushing Wrong Agenda

Some reflections by Dick Storm at his blog Glascow, COP-26 Eltists and Special Interests Promote China First, America Last.  Why?  Excerpts in italics with my bolds.

Because savvy engineers were not successful in educating the public and politicians on the true facts.

Well, that is at least one reason we have such a mess of energy policy now.

Once a “War on Carbon”, Has now Morphed into a “War on Freedom”, “War on our Rights”, “War on Capitalism” and an assault on much of What “We the People” Have Worked Hard For. The clowns in Scotland are spending our tax dollars and restricting our freedoms as best they can. Essentially putting China and the rest of the world first, America last. All on our dime.

Two Sides of the Same Coin

America has been a leader by example in reducing carbon. The U.S.A. has reduced our carbon emissions by over 50% since 2005. How? By releasing the power of free markets and American innovation. At the end of President Trump’s term, America was energy independent. He did that in four years only to have Joe Biden reverse his policies.

The War on Fossil Fuels is not new and the intentions have always been to raise energy costs so that “Green Power” will become competitive. Yes, the intentions of President Biden, John Kerry, Al Gore and the rest of the Green Extremists (Reminder, the War on Coal started in the Clinton-Gore Administration. Obama just continued and accellerated anti American energy policies Clinton-Gore began) The war on carbon is intended to make Exploration, Development, Production and use of oil, gas, coal and even nuclear, more expensive and harder to use.

All of this as the world’s people still depend on Fossil Fuels and nuclear together for almost 90% of our total energy. How can our leaders be so ignorant and insensitive? Well, back in the 1990’s when bill Clinton started the “War on Coal”, I did my best to educate the public and the students of public schools and several Colleges on energy and electricity generation. I am proud of my efforts, small as they seem in the grand scheme of things. There is still a need for Energy Engineers to become active in PR for Energy!

Series on World of Hurt from Climate Policies

In support of such educational efforts, here are a series of four posts showing how wrong-headed are climate policies which are actually anti-energy and anti-human. Below are links to articles providing numerous charts exposing how hurtful are these policies, along with one example for each theme.

World of Hurt from Climate Policies-Part 1

This is a beginning post toward infographics exposing the damaging effects of Climate Policies upon the lives of ordinary people.  And all of the pain is for naught in fighting against global warming/climate change, as shown clearly in the image at bottom.  This post presents graphics to illustrate the first of four themes:

  • Zero Carbon Means Killing Real Jobs with Promises of Green Jobs
  • Reducing Carbon Emissions Means High Cost Energy Imports and Social Degradation
  • 100% Renewable Energy Means Sourcing Rare Metals Off-Planet
  • Leave it in the Ground Means Perpetual Poverty

Part 1: Zero Carbon will Decimate US Workforce

EID (Energy in Depth) atudy shows renewable energy transition pushed by climate activists will result in a net 3.8 million lost jobs.

World of Hurt from Climate Policies-Part 2

Part 2: California Exemplifies Ruination from Self-imposed Climate Policies

By blocking domestic production through permit denials, California is playing a shell game with emissions. Overall use of petroleum products has held steady but shifted from energy produced within the state – where the industry is subject to U.S. environmental regulations and supports local workers and companies – to overseas.

California isn’t reducing its dependence on oil; it’s just adding a higher carbon footprint to get it.

World of Hurt from Climate Policies-Part 3

Part 3: Wind and Solar Infrastructure Consumes Rare Metals Far Beyond World Supplies

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.  

Conclusions
 Future annual critical metal demands of the energy transition surpass the total annual critical metal production.
• An exponential growth in renewable energy production capacity is not possible with present-day technologies and annual metal production. As an illustration: in 2050, the annual need for Indium (only for solar panel application) will exceed the present-day annual global production twelvefold.

World of Hurt from Climate Policies-Part 4

Part 4 The War Against Carbon Emissions Diminishes Efforts to Lift People Out of Poverty

How Climate Policies Keep People Poor

Note that the vision for 100% access to electric power was put forward by the African Development Bank in 2016.  (Above slides come from The Bank Group’s Strategy for The New Deal on Energy for Africa 2016 – 2025).  Instead of making finances available for such a plan, an International Cabal organized to deny any support for coal, the most available and inexpensive way to electrify Africa.

This is an organized campaign to deny coal-fired power anywhere in the world, despite coal being the starting point in the development pathway for every modern society, and currently the success model for Asia, and China in particular.

 

 

Dutch High on Green Hydrogen–Tulipmania Revival?

Cyril Widdershoven writes at Oil PriceThe Dutch Government Is Gambling Billions On Green Hydrogen.  Excerpts in italics with my bolds.

  • Green hydrogen is making headlines around the world as many consider it a cornerstone of a successful energy transition
  • The Netherlands is ready to spend billions in its attempt to become a global green hydrogen hub, but some observers are becoming increasingly skeptical
  • The economic viability of this new investment is unclear and a growing number of critics see these investments as the government gambling with billions of euros

The future of green hydrogen looks very bright, with the renewable energy source becoming something of a media darling in recent months. The global drive to invest in green or blue hydrogen is picking up steam and investment levels are staggering. Realism and economics, however, seem to be lacking when it comes to planning new green hydrogen projects in NW Europe, the USA, and Australia.

At the same time, blue hydrogen, potentially an important bridge fuel, is being largely overlooked. The Netherlands, formerly a leading natural gas producer and NW-European gas trade and transportation hub, is attempting to establish itself as a main pillar of the European hydrogen economy. According to the Dutch government, the Netherlands is ready to provide whatever is needed to support the set-up of a new green hydrogen hub and transportation network. During the presentation of the 2021-2022 government plans in September (Prinsjesdag), Dutch PM Mark Rutte committed himself to this green hydrogen future.

Without any real assessments of the risks and potential economic threats, plans are being discussed and implemented for a multibillion spending spree on green hydrogen, involving not only the refurbishment of the Dutch natural gas pipeline infrastructure but also the building of major new offshore wind parks, targeting the construction of hundreds of additional windmills. These wind parks are going to be set up and owned by international consortia, such as the NorthH2, involving Royal Dutch Shell, Gasunie (owned by the government), and others.

The optimism about these projects is now being questioned, not only by skeptics but increasingly by parties, such as Gasunie, that are part of the deals.

Dutch public broadcaster NOS reported yesterday that questions are popping up about the feasibility and commercial aspects of these large-scale plans as well as the potential risks of a new “cartel” of offshore wind producers. The multibillion-dollar investment plans, supported by the government, are even being questioned by experts of the Dutch ministry of economy, as it is not clear at all if green hydrogen production in the Netherlands, such as the NorthH2 project in Groningen (formerly known as the Dutch natural gas province), will ever be feasible or take-off.

The commercial viability of green hydrogen is a major issue as it still needs large-scale technical innovation and scaling up of electrolyzers. At the same time, there is uncertainty over demand as industry (the main client) does not appear to be interested at present. Dutch parties are also asking themselves if the current set up of the planned offshore wind parks are not a precursor to a new wind-energy cartel in the making. Some Dutch political parties and even insiders from Gasunie are worried about a monopoly position of the likes of Shell in the future.

The increased criticism by some, such as Gasunie and political parties, with regards to the power position of commercial parties, is also very strange. Some could argue that the current hydrogen strategy of Shell and others is what society and Dutch judges have forced them to do. Shell could and should argue a very simple position “we are doing what the Dutch legal system is forcing us to do”. For parties such as Shell, at least in the Netherlands or the EU, taking up green hydrogen strategies is a new License to Operate. International energy giants such as Shell do not want to be minor players in this market. For an international player, a pivotal position in any market is a must.

In the coming weeks, especially after COP26, as criticism is now being muted by most, a potential storm could be brewing.

If assessments are pointing out that the risks being taken by the Dutch government are too high in light of the benefits, and potential higher bills for customers, potential opposition to green hydrogen plans could be growing. At the same time, the Dutch hydrogen plans are seen by most as pivotal, even in light of the EU Commission’s Green Deal plans. A full-scale backlash to hydrogen could be a reality if Dutch political parties are going to constrain implementation, while other European countries will be more skeptical about their own plans. Billions, or potentially trillions, of euros will be at risk if this new hydrogen infrastructure turns out not to be economically viable. Without the power and technology of existing energy players, especially Shell, Total, BP, or ENI, behind the set-up, the future of this new power source will remain uncertain.

Comment on Hydrogen Fundamentals

What’s Not to Love About Green Hydrogen Energy? Let us count the ways.

The only cost-efficient way to produce H2 presently is electrolysis of H2O, powered by natural gas. This is called grey hydrogen. Objections: Burning the CH4 to generate the electricity gives off CO2, albeit less emissions than coal would. But because of energy losses in the process, the resulting H2 put into fuel cells delivers less energy than the CH4 that was burned. Better to run the cars using CH4 as fuel directly.

To lower the carbon footprint, some propose blue hydrogen, defined as H2 produced with fossil fuels, but including carbon capture to use or bury the CO2 emitted. Objections: Carbon Capture has not yet been scaled to be commercially viable, and in any case increases the cost of the resulting H2. And it is still less energy output than was input.

The latest dream is green hydrogen, which is H2 produced by electrolysis powered by wind or solar farms. Some proposed that this is a clean way to store intermittent renewable energy for use on demand. Objections: Wind and solar power is not clean or cheap, but involves high tech machinery requiring the extraction, transportation and refining of rare metals. Extensive tracts of land must be allocated to these installations, or else locating them offshore. Transmission lines must be built and maintained, and the panels or windmills depreciate rapidly. As well, the highly flammable H2 must be transported and stored prior to making fuel cells.

And the elephant in the room: Water is a precious resource.

One industry source told Oilprice that the production of one ton of hydrogen through electrolysis required an average of nine tons of water. But to get these nine tons of water, it would not be enough to just divert a nearby river. The water that the electrolyzer breaks down into constituent elements needs to be purified

The process of water purification, for its part, is rather wasteful. According to the same source, water treatment systems typically require some two tons of impure water to produce one ton of purified water. In other words, one ton of hydrogen actually needs not nine but 18 tons of water.

Accounting for losses, the ratio is closer to 20 tons of water for every 1 ton of hydrogen.

Speaking of water purification, organic chemists explain that the simplest way to do this is by distilling it. This method is cheap because it only needs electricity, but it is not fast. Regarding the electricity cost, distilling a liter of water requires 2.58 megajoules of energy, which translates into 0.717 kWh, on average.

So, providing the right kind of water for hydrolysis costs money, and while $2,400 per ton of hydrogen may not sound like much, the cost of purifying water is not the only water-related expense in the technology that seeks to make hydrogen from renewable sources. Besides being pure, the water to be fed into an electrolyzer has to be transported to it.

Transporting tons upon tons of water to the site of an electrolyzer means more expenses for the logistics.  To cut these, it would make sense to pick a site where water is abundant, such as by a river or the sea, or, alternatively, close to a water treatment facility. This puts a limit on the choice of locations suitable for large-scale electrolyzers. But since an electrolyzer, to be green, needs to be powered by renewable energy, it would also need to be in proximity to a solar or a wind farm. These, as we know, cannot be built just anywhere; solar farms are most cost-effective in places with a lot of sunshine, and wind farms perform best in places where there is sufficient wind.

Not all costs associated with the production of hydrogen from renewable energy sources are the costs of those renewable energy sources. Water is the commodity that the process needs, and it is a little odd that nobody seems willing to discuss the costs of water, including the European Commission’s Green Deal Team.

Summary: We now know it was a big mistake to divert corn from food production into biofuel. Will we make an even worse mistake converting drinking water into hydrogen fuel?

What’s Obstructing the Supply Flow, How to Unblock It

A wholistic analysis comes from an interview by Doug Blair with Joel Griffith at Daily Signal What Is the Root Cause of Our Supply Chain Problems? Excerpts in italics with my bolds and added images.

Blair: So Joel, if there is one thing that is dominating the news cycle right now, it is that there are massive supply chain issues. Americans are seeing images of empty store shelves and prices for things like electronics and gasoline have just completely shot through the roof. With all of this in mind, what exactly is the problem with the supply chain right now?

Griffith: Well, we have unprecedented demands placed on that supply chain. We talk about that chain—when we go to our grocery store, fill up our cars, we’re often not thinking of that process by which we actually get that merchandise. But in our interconnected global economy, which gives us a lot of benefits, we have a much higher standard of living now than we did a few generations ago, but we also really rely immensely on the ability to transport goods from point A to point B. And actually, in between point A and point B, you have a multitude of destination points.

You could be importing a suit from, let’s say, Vietnam. And from Vietnam, you have to go ahead, load it on a ship, get it to LA, to get it from LA all across the country. And if just one part of that process goes awry, you can be talking about delays for months on end. Because even prior to getting that finished product, you have a whole manufacturing product that also has its own supply chain. So one weak link in that chain can mean we don’t see the merchandise that we are in demand of.

Blair: So a lot of different explanations have been given for what the supply chain root cause is, what the root cause of these issues with the supply chain is. Are these basically COVID problems left over from the pandemic? Is this government policy? Is it both? Where are we seeing the root causes of this problem?

Griffith: Well, there’s a multitude of root causes to this problem. Going back the past 18 months, on the manufacturing side, we have many restrictions that were put in place that impacted even the ability to run a factory—distancing restrictions, shutdowns on occasion. And then to get that merchandise transported, there were a lot of restrictions that were placed on not just the cargo shipping sector, but also in the trucking sector as well.

If you back up a year ago, year and a half ago, truckers, especially in places like California, faced so much difficulty in even operating their profession—from not being able to get a shower, not being able to get food. You had instances in which those that wanted to get CDL licenses to drive couldn’t because those facilities were closed. And during that downtime, you had a lot of truckers retire. So we’re paying for those repercussions now.

But in the immediate term, even though the United States has largely reopened from COVID, that’s not the case across the entire world. You see, even in China, most recently in August, you had the world’s third-largest port that was in effect shut down for two weeks because of one single COVID case. And you multiply that across all of China and across Southeast Asia where you’ve had these ports that were shut down on occasion or you had capacity restrictions in place, well, that really compounded that, really made it difficult to ship the same number of items as we did just a year ago prior to the pandemic.

And even here in the United States, in the port of New Jersey, New York, New Jersey ports, we had a lot of COVID restrictions in terms of social distancing guidelines that were in place even throughout much of the summer. And we’re still dealing with the consequences of that.

So that’s just the COVID aspects of these shutdowns. But we can get into the detail about some of the other government actions that have really exacerbated this problem.

Blair: You’ve mentioned a little bit about the COVID issues and that there were other root causes. I’d like to go in-depth a little bit more on the specific government policies that are to blame for this issue. Obviously, the government does have a role to play in the supply chain crisis. What are some of the policies that have been exacerbating this problem?

Griffith: Oh, well, on the COVID front itself, social distancing restrictions that were put in place both in California but also across New Jersey, that really impacted the number of workers that could be on-site at any one time. And then restrictions too in terms of the testing, the quarantine impact on number of workers that you would have on-site. And now, of course, we’re facing a possible vaccine mandate, which is discouraging quite a few, possibly upwards of 10%, of that workforce from participating.

But if you go back to during the shutdown component of this, for quite a time, up until late this summer, you had the federal government that was providing massive unemployment bonuses to individuals. And a lot of warehouse workers, a lot of dockhands, a lot of truck drivers found that when you’re dealing with all of these hassles to actually earning a living, for them it was more personally worthwhile to just be unemployed and take those unemployment benefits, which might have been personally the right decision for them but, of course, that created a further backlog because you have to be able to transport that merchandise once you actually get it into the shipping, the dock facility. So that was a big issue.

On top of that, we had government putting in policies that were suppressing the supply of goods, but that were increasing massively the demand for goods.

If you look at the retail sales numbers right now, we see that our retail sales are at all-time highs. Our retail sales are actually around 15% higher now than they were prior to the pandemic. So we have immense demand for goods, and that is contributing to that backlog.

But that immense demand for goods isn’t really spurred by the free market at this point, that’s spurred in large part by the federal government borrowing and printing hundreds of billions of dollars and juicing up demand. So we see this artificial pressure put on that supply chain as well, which, once again, … the government [is] responsible for.

Blair: Do labor unions in any way, shape, or form have anything to do with this? I know we’ve talked a little bit about how labor and employment shortages are affecting these supply chain issues like dockhands and retail workers. Do unions have any part in this problem as well?

Griffith: Well, organized labor has played a significant role in the delays in relation to the ports in California in particular. Now, usually you have a maximum of one or two cargo ships that are stranded off the Port of Los Angeles. And I say stranded, waiting, waiting to unload the merchandise. And we saw those numbers increase to over 70 just several weeks ago. And that was due in large part to the organized labor groups refusing to expand their work hours and work on weekends.

Container ships off Los Angeles/Long Beach on Wednesday. Map: MarineTraffic The time ships are stuck waiting offshore continues to lengthen. There are simply too many vessels arriving with too much cargo for terminals, trucks, trains and warehouses to handle. There were 103 container ships at Los Angeles/Long Beach terminals or waiting offshore on Wednesday, an all-time high.  This suggests that the cargo currently waiting off the ports of Los Angeles and Long Beach is worth around $22 billion, roughly the equivalent of the annual revenues of McDonald’s or the GDP of Iceland.

So this delay was growing and growing. And about last week, the ports in Florida, they offered to jump in and start taking in some of that excess shipping demand. And I think that’s why you saw those labor leaders finally bend just a few days ago and say, “OK,” they’re going to agree to run those ports 24/7 for the time being in order to catch up.

Blair: We’ve discussed some of the implications of the supply chain issues in terms of massive hikes in common consumer goods and services, price hikes on those certain things as well. What are some of the other implications of the supply chain issues that you see if this isn’t tamped down on?

Griffith: Yeah, well, you mentioned that price. I think it is important to underscore just how much those prices have risen for the shipping side. You’ve seen cargo costs to ship a big container have increased from around $1,500 back in 2017, it’s gone up 1,000%, to about $25,000 today. And those cargo ships, even though most of us have never visited a port in LA or New Jersey, [account] for over 10% of all global trade, just the container ships themselves. So there’s a lot riding on this.

So if these supply chain disruptions continue, that’s going to have a real impact on us as a country, both in terms of the price of goods continuing to rise, which we’ve all noticed, also, just the very ability to gain access to these goods, which I think too we’ve noticed. It’s harder to get shipments in on time with Amazon Prime. You go to Costco, go to your grocery store, oftentimes items are out of stock. So that’s another repercussion.

But something that might not be as evident is the fact that we have a number of manufactured goods that are relying on shipments, on components to finish those processes. And when you see a delay in that, well, that can cause an entire assembly plant to close, which can result in labor disruptions and layoffs.

Those are all big economic concerns, but there’s also a national security component as well. Our military relies on a lot of shipments as well from across the world, just-in-time inventory, lean inventory standards, where they don’t want to have a lot of stockpile on hand, it’s more efficient to ship these items in and have them just in the nick of time.

So I think this is going to really be something the military will have to focus on and ultimately have to reassure Congress that our national security interests aren’t being threatened by the possibility of continued disruptions.

Blair: In order to maybe tamp down on some of these problems, recently, President Joe Biden announced that he was going to be keeping the Port of LA open 24/7. Do you find that this is going to be maybe an effective government response? And if this is something that we should be doing, what else should the government be doing to maybe fix this problem?

Griffith: Sure. Well, the ports being open 24/7, that’s a commonsense measure. This should have been something that was really dealt with months ago. And I think it’s important to note that our secretary of transportation, Pete Buttigieg, has been pretty much off the job for two months. He is a new father and has taken paternity leave. But two months off the job in the midst of the biggest transportation crisis of most of our lifetimes and generations, that’s something we should not be applauding.

So I’m glad they’re open 24/7, but longer term, other measures are going to have to be taken because in California, where we rely on a lot of the shipping, there are a number of issues that are going to threaten our supply chains going forward.

One of these is an outright ban the state has proposed through Assembly Bill 5, an outright ban on independent owner-operators of trucks. And these are business owners. People work hard to be able to buy a truck and earn a living off that. And there’s a lot of special interests involved that want to deny the right of these independent truckers to operate.

The Legislature in California has already passed that bill, it’s hung up in court right now. But if the court decides that that doesn’t violate the California Constitution, you’re going to see a crisis in the trucking sector nationwide, because a lot of folks won’t be able to operate in California. Second of all, you have California moving to outright ban diesel trucks in the coming years, that too is going to impact supply chains, going to impact our prices.

So my hope is that, if California doesn’t wake up and stop passing such absurd legislation, my hope is that places such as Alabama, in Mobile; Savannah, Georgia; Texas; and Florida, which have far more sane policies, my hope is that the ports there over the coming years will be able to pick up the slack. But that is going to take time. You can’t just dredge a bigger harbor and build a new railway system overnight. That takes time.

And we are going to be dealing, I think, with the consequences of a lot of this California legislation in the coming years, separate and apart from the pandemic.

Blair: I do want to follow up on that. Switching gears slightly, I read a report in ABC News that says we probably won’t be seeing the end of these supply chain issues for a while. In your opinion, how long do you think this could last? And to maybe quote a phrase from the vice president, do parents need to start buying Christmas gifts for their kids now?

Griffith: It’s tough to prognosticate, but there is a substantial backlog and we still see these disruptions continuing across parts of the world, particularly in China with these rolling COVID shutdowns. So this is going to be something that’s going to take months to resolve.

But on the bright side, I’ve heard a number of retailers, including Best Buy today, talk about how they were working in advance to stock the shelves in time for Christmas. And Best Buy was saying that they’re actually running ahead of prior years in terms of the merchandise that they have stockpiled ready for Christmas. So that’s a positive.

On the negative side … there’s a real important ratio called inventory to sales that measures how much inventory you have on hand relative to your average monthly sales. And those numbers are still near all-time lows or at least generational lows, suggesting we’re not quite out of the woods yet.

Blair: I want to focus on something that I’ve been curious about about these issues. It seems like we’ve been talking about this in the U.S. for quite a while now. Are these issues something that the rest of the world is experiencing as badly as we are? I know you mentioned the ports in China that got closed down due to one case of COVID. But are other countries experiencing supply chain issues just as badly as we are?

Griffith: Yes, we are not alone in this. I don’t know if that should give us comfort. But other parts of the world are struggling with this as well. And in fact, other parts of the world are still struggling with lockdown measures, which are an absolute affront to human liberty. So in that respect, at least we are outperforming because we do have, in most of the country, a greater respect for human dignity and basic of human rights.

Also … with some of these other countries that rely more on the export side, their economies are really being hammered on that because they are much more reliant on manufacturing for the employment of their populace.

Blair: Now, moving back to the domestic side, is this supply chain issue something that affects rural and urban Americans equally, or is this affecting one segment of the population more than another segment of the population?

Griffith: That is a great question, Doug, that I don’t know that I have an answer to. I do know this, that regardless of where you are living, if you are looking to buy a new washer, dryer, vehicle, clothing, so much of that is reliant on imports. Even if it’s manufactured here, it’s reliant on components that come from overseas. And you’re facing some either mild inconvenience—for instance, if your washer machine goes out, you might have to wait a week or two, maybe that’s a modest inconvenience. But let’s say you need a new vehicle, spending 30% more, 40% more for a car compared to a year ago, that’s a major problem, especially for a middle-class family.

So these issues, they really do impact rural areas, urban areas as well. If you’re looking to buy food, all of us, whether we live in the countryside or whether we live in a big city, unless we’re growing our own food, and 98% of us aren’t, well, a lot of that food comes from across the border as well, whether Mexico, Canada, or even overseas for a lot of our vegetables, and those have been increasing double digits, too. So that’s impacting all of us. We are, not to use that phrase, but we are all in this together.

Blair: In a way it’s kind of refreshing that this is something that Americans are going to have to deal with together. So on that topic, what can the American government do, if anything, to help end the supply chain crisis? I know we talked briefly about you were in favor of President Biden’s announcement that he was going to be keeping the Port of LA open 24/7. You mentioned it was a commonsense measure. What are some of the other things that the government can be doing to help end the supply chain crisis?

Griffith: Yeah, and to be clear, with those ports, President Biden can’t just flip the on/off switch on that, but he did encourage them to do that. And I think that should be applauded.

But something that government could do is roll back some of these remaining onerous COVID restrictions that aren’t really grounded in science. And No. 2, this is a real big one, the Biden administration has proposed a vaccine mandate for employees at companies larger than 100. That’s 80 million people that are impacted by that. And there are possibly 5%, 10%, maybe even more, of individuals that have indicated they would rather not work than be subjected to those vaccine mandates.

Now, 10% of the workforce might not sound like a lot, but that’s millions of individuals. And many of them do work in the transportation sectors, whether they are truck drivers or they work at docks. Well, that’s going to not just be a burden on their families if they find themselves required to no longer work because of this mandate, that’s going to impact all of us. Even if a few percentage points of people decide to sit at home, that work in these vital sectors, that’s going to impact all of us.

So the administration could also forego it’s unconstitutional, unlawful vaccine mandate.

Thirdly, and this is a big one, the federal government should stop juicing demand artificially. We have a supply problem. We need to have more items produced, need to have more items shipped. The last thing we need right now, and really ever, is for the government to be printing and borrowing more money and artificially simulating demand at a time especially when supply just simply is constricted because of all these delays and restrictions.

So that’s three things right there the federal government could do to alleviate this problem.

And I want to add one more thing going forward, states have a role to play here longer term. With California looking to impose even more onerous restrictions on people in the shipping industry and in the trucking industry and diesel requirements, well, this gives opportunities for other states—we mentioned Alabama, Florida, Georgia, Texas in particular—to go ahead and pick up the slack. It’ll benefit their state economies. It’ll also benefit the country as well.

 

Glasgow COP Has Fleet of Teslas To Be Diesel-Charged

Tyler Durden reports at zerohedge  UN Climate Change Conference Reportedly Using Diesel Generators To Charge Teslas Being Used As Shuttles. Excerpts in italics with my bolds.

We’re not sure we can think of a better analogue for the lunacy behind the climate change hysteria that what is reportedly going on in Glasgow.

As many people know, the Conference of the Parties (COP) Climate Change Conference, hosted by the UK in partnership with Italy, is taking place in Glasgow from October 31 to November 12.

One blogger from Brighton wrote this week that attendees from the conference will be staying at Gleneagles Hotel.

He wrote that there’s 20 Teslas at the hotel to shuttle people back and forth to and from the convention, which is about 75km.

Then, the kicker. Since the hotel only has one Tesla charging station, diesel generators were contracted to help recharge the Teslas overnight.

The stated purpose of the conference is, among other things, “to review the implementation of the Convention, the Kyoto Protocol and the Paris Agreement.”

The climate change conferences now count themselves, according to the UNFCCC’s website, as “among the largest international meetings in the world.”

“The intergovernmental negotiations have likewise become increasingly complex and involve an ever-increasing number of officials from governments all over the world, at all levels, as well as huge numbers of representatives from civil society and the global news media,” the conference’s website says.

Maybe since we’re gathered to talk about the negative effect on the climate, we could at least start by finding a carbon neutral way to shuttle yourself back and forth to the event.

It’s almost like these meetings aren’t really about climate change after all…