Energy Policies

Climate Zealots Throw Sand into Energy Supply

Posted on by Ron Clutz

Roger Conrad reports on how the US energy infrastructure is hobbled by climate activists empowered by funds and lawyers. His article at Forbes is Best Bets On Pipeline Politics. Excerpts in italics with my bolds.

It seems like a long, long time ago in a galaxy far, far away. But barely two years back, permits for new US oil and especially natural gas pipelines were basically a formality.

Back then, the only US pipeline facing significant regulatory hurdles was TC Energy Corp’s (TRP) proposed Keystone XL pipeline to bring Alberta oil sands to US markets. And on the day the Obama Administration rejected that project for the final time, officials actually approved two oil pipelines elsewhere.

Everything changed following the November 2016 presidential election. Congress’ failure in 2016 to fill empty seats on the five-member Federal Energy Regulatory Commission led to the lack of quorum in early 2017.

New approvals ground to a halt for nearly six months. That gave “keep it in the ground” advocates precious time to tap into record fundraising, fueled by a groundswell of opposition to Trump Administration policies.

One result has been legal challenges to projects on an unprecedented scale at multiple venues. Work on Enbridge Inc’s (ENB, ENB) Line 3 pipeline expansion, for example, is now completed in Canada as well as North Dakota and Wisconsin.

Project suspended in June 2017.

Courts, however, have overturned Minnesota regulators’ prior approval of the project’s Environmental Impact Statement. That’s forced officials to go through the process again, delaying completion at least until the second half of 2020.

We’ve also seen a decided shift to more restrictive energy politics in several states, notably Colorado. Others like New York have dug in further in refusing to grant water permits from long-delayed projects like the Constitution Pipeline. That’s triggered warnings of prospective natural gas shortages from New York City’s distribution utility Consolidated Edison ED +0% (ED), which is restricting new customer additions.

Time equals money when it comes to multi-year, multi-billion dollar projects. Bloomberg Intelligence estimates a $2.75 million cost increase per mile of planned pipeline for every one-quarter delay in construction. The projected final cost of the Line 3 expansion, for example, is already billions higher than initial estimates.

Consequently, the game being played by pipeline opponents is to delay. That means mounting enough challenges to ramp up costs and ultimately convince developers to walk away. And for the first time, they have the funds to do the job.

Project abandoned in April 2016.

Opponents have been particularly successful quashing projects in New England and the Northeast US. To date, they’ve failed in Texas, where several giant pipelines are under construction. Kinder Morgan KMI +0% Inc (KMI) has one major gas pipeline from the Permian Basin coming on full stream later this year. It has another next year and a third in early stages of development.

Ground zero now in pipeline politics is the struggle of two projects in the Middle Atlantic/Southeast US to cross the Appalachian Trail: The Atlantic Coast Pipeline and the Mountain Valley Pipeline.

These projects’ ultimate success or failure will have a huge impact on the long-term profitability of Appalachia-based gas and oil producers, which are sitting on huge reserves in the Marcellus and Utica shale. Ironically, the longer they’re delayed, the greater demand will be for Texas energy and by extension new pipelines in the state.

That will benefit Texas developers like Kinder Morgan and Plains All-American Pipeline (PAA), which is focused on oil. And it will hit pipeline companies in the East like EQM Midstream Partners LP (EQM), which faces a massive writeoff if the Mountain Valley Pipeline can’t win through.

To be sure, natural gas development especially still has plenty of support in the US. Replacing older coal-fired facilities with gas, for example, reduces operating costs and electricity rates. New plants increase utilities’ rate base, spurring earnings and dividend growth. And the prospective environmental benefits are enormous, cutting future legal liabilities.

Gas emits none of coal’s particulate matter, which is blamed for a host of respiratory woes. It emits no acid rain gases that have caused billions in property damage and creates no toxic ash.

As for carbon dioxide, equivalent sized gas power plants emit less than half what coal does. In fact, gas adoption is the single biggest reason America is still meeting greenhouse gas commitments under the Paris Accords. Finally, surging US energy production has dramatically shifted global energy politics, demonstrated by the relative lack of reaction in oil prices to elevated tensions in the Persian Gulf.

During the Obama years, those facts were more than enough to hold together a consensus for US natural gas development. And the result was a relatively easy path for pipeline approvals.

These days, that’s not enough for pipelines to succeed. The silver lining is the more difficult it becomes to build, the more valuable existing infrastructure and ultimately successful projects will be.

In the days when pipeline approvals were swift, any company raising funds economically could get projects built. These days, would-be developers need to be financially and operationally strong enough to handle legal challenges wherever they occur.

Footnote:  The Climatist Manifesto

Mission: Deindustrialize Civilization

Goal: Drive industrial corporations into Bankruptcy

Strategy: Cut off the Supply of Cheap, Reliable Energy

Tactics:

  • Raise the price of fossil fuels
  • Force the power grid to use expensive, unreliable renewables
  • Demonize Nuclear energy
  • Spread fear of extraction technologies such as fracking
  • Increase regulatory costs on energy production
  • Scare investors away from carbon energy companies
  • Stop pipelines because they are too safe and efficient
  • Force all companies to account for carbon usage and risk

See Also Why People Rely on Pipelines

Payback Upon Climate Grasshoppers

 

 

Greens Killing Electricity, Nuclear In Decline

Posted on by Ron Clutz

Green energy initiatives are steadily undermining the electrical grid essential to modern society. Coal-fired power is often termed “Climate Enemy #1”, but the War on Nuclear Energy started much earlier and has been more successful. This century is seeing many NPP closures, and almost none constructed.

The problem is that Nuclear plants produce neither dispatchable nor nondispatachable power. Capital costs are high while variable costs of nuclear electricity are very low, and plants have long 30 to 40 year lifetimes. Nuclear is economic as a base load producer of reliable electricity 24/7. It is not intermittent like wind and solar, and not very flexible like coal, gas or hydro to ramp up or down to meet changing demand. As we shall see, public policies as well as markets are now skewed in favor of wind and solar. The deck is stacked against Nuclear, and base load supply to electrical grids is threatened, not to mention dreams of zero carbon power production.

Update June 5, 2019 Ohio House passes bill to save nuclear power plants with Democrats Support Reuters

Update May 31, 2019 at bottom Democrats’ Curious Disdain for Nuclear Power

Background: War on Nuclear Power

From Environmental Progress, excerpts in italics with my bolds.

Nuclear has declined as a share of global electricity since 1995, and in absolute terms since 2006.

Nuclear’s underlying problem has to do with the well-funded and well-organized war against it that began in the 1960s.

Anti-nuclear groups opposed nuclear for being abundant and cheap and sought to make it expensive and scarce.

Anti-nuclear groups and individuals have consistently advocated coal and natural gas instead of nuclear for 40 years, and often accept contributions from fossil and other energy companies.

Even though nuclear is the safest way to make reliable electricity, it is regulated as though it is the most dangerous.

Opponents of nuclear have won large federal subsidies for wind and solar that have been in place for a quarter-century, and state clean energy mandates that explicitly exclude nuclear.

While it is tempting to blame low natural gas prices and misplaced post-Fukushima jitters, nuclear’s troubles are rooted in regulatory capture — a capture that finds its genesis in the origins of the U.S. environmental movement. This capture is now threatening to bring this climate-friendly energy source to the brink.

Everywhere the underlying reason is the same: anti-nuclear forces, in tandem with rent-seeking economic interests, have captured government policies. On one extreme lies Germany, which decided to speed up the closure of its nuclear plants following Fukushima. In Sweden the government imposed a special tax on nuclear. In the U.S., solar and wind are far more heavily subsidized than nuclear. And states across the nation have enacted Renewable Portfolio Standards, RPS, that mandate rising wind and solar, and that exclude nuclear.

In flat contradiction of their stated views that climate change represents an imminent catastrophic threat, anti-nuclear environmentalists from Germany to Illinois to California bless the burning of fossil fuels if it means they can force the closure of a nuclear power plant.

“We don’t need nuclear power,” environmental activist Bill McKibben told an audience at Middlebury in 2014, after a showing of the pro-nuclear documentary “Pandora’s Promise.” The world, he has repeatedly insisted, can be powered entirely on wind, water and solar energies. At the same time, Vermont Senator Bernie Sanders, whom McKibben endorsed early in the Democratic presidential nomination process, and national environmental groups, were quietly blessing the replacement of Vermont Yankee with natural gas.

The problem with nuclear is that it is unpopular, a victim of a 50 year-long concerted effort by fossil fuel, renewable energy, anti-nuclear weapons campaigners, and misanthropic environmentalists to ban the technology.

The Current Battle to Save Ohio’s Electrical Grid

Jessie Balmert writes in the Cincinnati Enquirer with an obvious bias against nuclear energy and in favor of wind and solar. Energy overhaul: ‘Clean Air Program’ just for nuclear plants, not wind or solar. Excerpts in italics with my bolds.

FirstEnergy Solutions, owner and operator of the Davis-Besse Nuclear Power Station, has cleared a hurdle in its bankruptcy proceedings after U.S. Bankruptcy Court Judge Alan Koschik on Monday approved FES’ amended reorganization plan. It was the fifth revised plan filed in bankruptcy court by FES. (Photo: File)

COLUMBUS – Ohio Republicans’ energy overhaul started as a thinly veiled attempt to rescue two northern Ohio nuclear plants with new fees on everyone’s electric bills.

Now, the veil is off.

Changes made to House Bill 6 last week would direct most of the $197.6 million collected from new fees on Ohioans’ electric bills to Akron-based FirstEnergy Solutions, which operates two nuclear plants outside Toledo and Cleveland.

Renewable energy companies from wind to solar would not get a cut of this “Ohio Clean Air Program.”

In a double blow, lawmakers also axed current programs that encourage electricity providers to purchase renewable energy and help customers become more energy efficient.

And lawmakers ensured utilities could charge customers a fee for two coal plants operated by Piketon-based Ohio Valley Electric Corporation through 2030. The plants are located in Gallipolis and Madison, Indiana.

The cost of a bailout

The latest version of House Bill 6 would charge Ohioans a $1 fee each month starting in 2021 for nuclear energy. The fee is higher for businesses ($15) and industrial customers ($250 to $2,500). Those fees end after 2026.

The proposal also allows electric companies to charge residents up to $2.50 each month for the two coal plants. This isn’t a new charge for many electricity customers, who are billed between $0.51 and $1.64 a month for these plants thanks to an Ohio Supreme Court decision. (An average Duke Energy Ohio residential customer pays $0.97 a month.)

But the proposed changes would lock that fee in until 2030.

At the same time, the bill eliminates current green energy and energy efficiency requirements, which cost the average customer about $4.39 each month.

Republican lawmakers argued the state shouldn’t be picking winners and losers in the energy market. Meanwhile, the bill has clear winners: nuclear and coal.

“My goal would be we should eventually get rid of all of this stuff and just let everybody compete as best as we can,” said Rep. Nino Vitale, R-Urbana, who leads the committee where the energy bill is being debated.

But the federal government already offers tax credits and benefits to renewable energy, creating an uneven playing field, Vitale said.

“Part of this bill is to correct the distortion – not bail someone out,” Vitale said.

At the heart of the debate is whether Ohio taxpayers should save FirstEnergy Solutions.

The company, which was spun off from parent FirstEnergy Corp., filed for bankruptcy in March 2018 with more than $2.8 billion in debt.

Without help from taxpayers, FirstEnergy Solutions says the company will close its two nuclear plants in Ohio: Davis-Besse, east of Toledo, in May 2020 and Perry, east of Cleveland, in May 2021.

The two plants employ more than 1,300 skilled workers who pay taxes and raise children in northern Ohio.

“We like to produce power in Ohio and use Ohio power,” said Larry Tscherne, business manager for International Brotherhood of Electrical Workers Local 245, which represents Davis-Besse workers.

But opponents of the bailout say FirstEnergy made poor business decisions by investing in coal and nuclear plants rather than diversifying its energy portfolio. The company’s financial situation is not Ohio ratepayers’ problem.

Nuclear energy is costly compared to natural gas, coal and some renewable energy. Nuclear plants require security, disaster plans and maintenance that other plants do not. That has made nuclear energy dependent on subsidies to survive nationwide.

“Clean air is obviously good,” testified Michael Haugh with the Ohio Consumers’ Counsel. “But having state government choose outcomes in the competitive marketplace is not good.”

The Case for Nuclear Power from Steffen Henne, head of research for the Center for Industrial Progress.

Q: The Ohio General Assembly is debating a new bill that would subsidize our two nuclear plants to keep them open. Apparently, the plants produce 14 percent of the state’s power. Would shutting them down (as seems likely if the bill fails) almost certainly raise carbon emissions, at least in the short term?

HENNE: This depends on many factors, including how much electricity from other states will be imported and how much new natural gas capacity will replace Ohio’s coal fleet in the coming years to fill the gap. Ohio’s power generation is dominated by natural gas (34 percent) and coal (47 percent) right now. Taking out 14-15 percent of zero-CO2 generation immediately would definitely lead to higher CO2 emissions compared to keeping these power plants alive, even if the absolute emissions might decline over time.

It’s noteworthy that the problems of nuclear and coal power plants to turn a profit are in some significant way rooted in the presence of unreliable solar and wind. Both technologies are able to produce very cheap baseload electricity but in an environment where solar and wind can just produce when the weather is right and every other generator has to adapt to the gluts and shortfalls, the cost this creates are high for nuclear and coal plants, which have been built to run at high capacity constantly. The current nuclear reactors are usually inefficient at what’s called load following because they were not designed to do that. Although solar and wind create the problem, they don’t have to pay for the cost in the current regulatory framework.

To the extent natural gas outcompetes nuclear on fair terms, that’s a different story, but it rarely makes sense to build a new natural gas power plant if the existing nuclear capacity could still do the job. And natural gas still emits more CO2 than existing nuclear power plants in any assessment I have ever seen.

Q: Does nuclear power offer the best hope as a power source that produces energy without carbon emissions and is available 24-7? Are the Generation IV nuclear power plants as promising as their proponents claim?

HENNE: There are really only two major countries that have created affordable, abundant power with low CO2 emissions, France and Sweden, and both have done it by using nuclear technology. You can use wind and solar to some extent and at a high cost, as Denmark has done, but this is not really scalable. Denmark now has the highest electricity prices in Europe together with Germany, in large part because of their focus on wind, and they are dependent on the constant imports and exports of power to stabilize their power grid. Without the availability of large conventional power fleets in their neighborhood, the wind experiment would already be over and Danes would sit in the dark. Germany doesn’t even meet its short-term goals in CO2 emission reductions because their costly scaling of solar and wind is completely insufficient.

Yes, nuclear energy right now is the only way to reduce CO2 by significant margins without ruining the economy, grid reliability, and energy security. That is because of the inherent properties in nuclear technology, which turns an abundantly available raw material into a concentrated energy source that does not emit CO2 from a chemical combustion process.

Generation IV is an umbrella term that applies to a variety of different technologies. It is difficult to judge at this stage which of these technologies will be successful or most successful at delivering the most abundant, affordable, and reliable energy. But some of the concepts are really promising. There are, for example, fast spectrum reactors, which promise to be able to use the “waste” of other nuclear fission reactors as fuel and overall increase efficiency of the fuel. Today’s typical reactors only use a tiny fraction of the energy content in the uranium or other fuels, which means there is huge potential for efficiency increase with innovation. Other innovative approaches seek to circumvent the cost escalations in the current American regulatory and anti-nuclear social framework, which for the industry means large reactors will be delayed for years or even decades, increasing the upfront cost. Small modular reactors, which can be built in a factory instead of requiring extensive on-site work, might be a good option to reduce cost.

All that innovation potential should be exciting news for everyone concerned about CO2 emissions and the availability of affordable energy to advance human flourishing.

Q: What do you make of the fact that green organizations generally oppose nuclear power, and also insist that climate change is an emergency that must be addressed immediately?

HENNE: I think we have to recognize that for organizations like Greenpeace it doesn’t make sense to actually solve a problem. The more abstract and diffuse the doomsday narrative, the better for their business model. Both climate change catastrophism and nuclear catastrophism are really great for them.

There is also an esoteric religious component to it. The reason why wind and solar are the preferred green “solution” is that they are supposedly natural versus the “artificial” splitting of the atom. Facts don’t matter in that narrative. Although nuclear is the safest technology to generate power it is still vilified as poisonous and dangerous.

Solar and wind are not proposed because they are real solutions but because they fit into that religious thinking.

The most immoral part of it is the absolute disregard for human flourishing. If you cannot afford energy, you have no energy. If you don’t have reliable energy, you have no energy. But affordable and reliable energy is probably the most central aspect of our survival and safety, including safety from climate. Over the last 100 years, climate-related deaths plummeted. Not because the climate suddenly became so much better for us, although the mild warming and increasing CO2 over recent decades was certainly beneficial to us, but because we were able to use technology to protect us from a naturally dangerous environment. And that required the caliber of energy that so far only fossil fuels, nuclear technology, and to some extent large-scale hydropower were able to deliver on a scale of billions.

Summation from Michael Schellenberger at Quillette Why Renewables Can’t Save the Planet

The problem with nuclear is that it is unpopular, a victim of a 50 year-long concerted effort by fossil fuel, renewable energy, anti-nuclear weapons campaigners, and misanthropic environmentalists to ban the technology.

In response, the nuclear industry suffers battered wife syndrome, and constantly apologizes for its best attributes, from its waste to its safety.

Lately, the nuclear industry has promoted the idea that, in order to deal with climate change, “we need a mix of clean energy sources,” including solar, wind and nuclear. It was something I used to believe, and say, in part because it’s what people want to hear. The problem is that it’s not true.

France shows that moving from mostly nuclear electricity to a mix of nuclear and renewables results in more carbon emissions, due to using more natural gas, and higher prices, to the unreliability of solar and wind.

Oil and gas investors know this, which is why they made a political alliance with renewables companies, and why oil and gas companies have been spending millions of dollars on advertisements promoting solar, and funneling millions of dollars to said environmental groups to provide public relations cover.

What is to be done? The most important thing is for scientists and conservationists to start telling the truth about renewables and nuclear, and the relationship between energy density and environmental impact.

“Nuclear power is one of the chief long-term hopes for conservation … Cheap energy in unlimited quantities is one of the chief factors in allowing a large rapidly growing population to preserve wildlands, open space, and lands of high scenic value … With energy we can afford the luxury of setting aside lands from productive uses.”

Fifty years of empirical research show that Siri was right and the anti-growth anti-people extremists who started the anti- nuclear movement were wrong. More energy is good for people, and it’s good for nature.

Energy allows cities and agricultural intensification, which frees the countryside for return of forests and wildlife. Moving to nuclear frees us from air pollution, including carbon emissions.

Update May 31, 2019 Democrats’ Curious Disdain for Nuclear Power

Just published at National Review:  Until they embrace nuclear energy as a key to reducing emissions, the party’s many presidential candidates will be hard to take seriously on climate change.  Excerpts in italics with my bolds.

The Democrats’ disdain for nuclear energy deserves attention, because there is no credible pathway toward large-scale decarbonization that doesn’t include lots of it. That fact was reinforced Tuesday, when the International Energy Agency published a report declaring that without more nuclear energy, global carbon dioxide emissions will surge and “efforts to transition to a cleaner energy system will become drastically harder and more costly.”

At the same time that an increasing number of rural communities are fighting the encroachment of large-scale renewable projects, the U.S. is facing a wave of nuclear-reactor retirements. Nine reactors in the U.S. are slated to be retired over the next three years, and the IEA estimates that domestic nuclear capacity could shrink by more than half in the next 20 years. The agency points to the many challenges facing the nuclear sector, including increased regulations, low-cost natural gas, and competition from subsidized renewables.

This is, frankly, one of the biggest and longest-running disconnects in American politics: The leaders of the Democratic party insist that the U.S. must make big cuts in greenhouse-gas emissions because of the threat posed by climate change, but for nearly five decades, they have either ignored or professed outright opposition to nuclear energy. The last time the party’s platform contained a positive statement about nuclear power was way back in 1972.

America’s top Democrats repeatedly tout the need for “clean” energy and massive deployments of wind and solar power, but by denying the role that nuclear energy must play in any successful decarbonization efforts, they are ignoring the scientific consensus. If they truly care about the dangers posed by climate change, they should stand up and tell the truth about the need for nuclear energy. Until that happens, their various plans to address the issue will be impossible to take seriously.

Footnote:

Many do not realize how intermittent power from wind and solar farms cannibalize the electricity supply.  Since wind and solar capacity is subsidized, any actual power they produce gets top priority for consumption, since it has little or no marginal cost to the grid.  So on days when solar power is abundant in the afternoon, it absorbs the high price demand, while base load and dispatchable plants are denied that revenue.  That pattern will drive those plants into bankruptcy, leaving the grid without backup power, unless more subsidies are added to keep them open.

Cynical Climate Politics

Posted on by Ron Clutz

Lots of politicians in the US are grinding the climate ax, but the most cynical play of the climate card is on display in Canada. At Financial Post Gwyn Morgan describes how PM Trudeau is relying on global warming to escape electoral disaster in upcoming federal elections. His article: In choosing to mislead Canadians on climate change, the Liberals are basing their election campaign on a known lie. After describing a list of Trudeau missteps and failures widely criticized in the media, Morgan gets into the climate ploy. Excerpts intalics with my bolds.

So how does a government that can’t campaign on its record go about gaining re-election? By building its campaign around an issue where voters can see them as heroes fighting to save the planet against uncaring opponents. That issue is climate change and their weapon to fight it is carbon taxation. Winning re-election with this strategy requires convincing voters there’s a “climate emergency.” And so on April 1, the day the federal carbon tax kicked in on provinces unwilling to impose a tax that met the Liberals’ requirements, the federal Department of Environment and Climate Change released a supposedly independent report claiming “Canada is warming twice as fast as the rest of the world.”

[Note: Friends of Science deconstructed that report in post Climate Change NOT as Advertised, and Ross McKitrick dispelled the logic in Climate Hearsay ]

From now until the election, Canadians will hear Trudeau and his cabinet members blame every weather event, wet, dry, cold or warm on climate change. And the urgent need for a carbon tax to stop it. When the prime minister recently visited flood-ravaged areas in Quebec, he called the floods “the new reality of climate change.” But experts attribute the recent flooding to one of the longest, coldest, highest-snowfall winters on record. Isn’t climate change supposed to be about global warming?

Convincing Canadians of the need for carbon taxation is just the first element of the Liberals’ re-election strategy. Their most powerful — and cynical — tactic is their promise to give most taxpayers a bigger carbon-tax refund than what they will supposedly pay in carbon taxes. How is that possible? The answer is that individuals will get the refunds, while businesses bear the full cost. In other words, tax the job creators and use that money to bribe the voters.

The principal gladiators leading the Liberal carbon-tax forces are Trudeau and his eco-passionate environment minister, Catherine McKenna. The defenders opposing them in the carbon-tax coliseum are the premiers of Alberta, Saskatchewan, Manitoba, Ontario and New Brunswick, along with federal Conservative leader Andrew Scheer. Scheer will have most of the spears trained on him. McKenna recently accused him of “having no climate plan.” But unlike the Liberals, Scheer’s climate plan needs to be based on the fundamental fact that Canadians could all move to Mars tomorrow and it would have virtually zero impact on global climate change. Here’s why.

Many Canadians have been led to believe (with the help of Liberal misinformation) that oil is a sunset industry. But the consensus of authoritative forecasts sees growth in developing countries pushing world oil demand from the current 100 million barrels per day to at least 110 million by 2030. Here’s the question Canadians should be asking: If world oil demand is going up anyway, why should Canada cede the market for our most important export to Russia, Iran, Nigeria and Saudi Arabia — countries that don’t care about the environment and have horrendous human rights records? At the same time, hundreds of coal-fired power plants are under construction in China, India and Southeast Asia. (Vietnam, one of the smallest countries in that region, has new coal plants under construction that could end up producing more carbon dioxide emissions than all of Canada.)

As good little scout Canada struggles mightily to meet its commitments under the Paris climate accord, the vast majority of nations on the planet have already given up on the pact. Last year, global greenhouse gas emissions grew by an estimated 2.7 per cent. So if Canada’s economy had simply ceased to exist, our 1.6 per cent of global emissions would have been replaced in just seven months.

These are irrefutable facts. So the decision by the Trudeau Liberals to base their election campaign on the assertion that reducing our country’s relatively tiny emissions will help fight climate change can only be explained in one of two ways. First, Trudeau and his team are breathtakingly unaware of facts anyone can learn through an afternoon of Googling. Second, they choose to mislead Canadians in a desperate bid for re-election. That would mean they choose to base their election campaign on a known lie.

So what should Canada actually do about climate change? The clearest answer was recently offered by a man in hip waders, who was filling sandbags to help with the flooding in Central Canada. When he was asked by a reporter what should be done to prevent the floods, he said this: “Well, there’s all this talk about climate change, but I don’t see what Canada can do about that when China and other countries keep burning more. If that’s going to cause more floods, we’d better figure out how we can be ready for them.”

That’s the most common-sense analysis I’ve heard. Instead of throwing away billions of dollars subsidizing costly and impractical “green power” and handing taxpayer money to buyers of electric cars, let’s redirect those billions to risk mitigation and homeowner compensation. In the case of floods, dikes and dams need to be improved where practical. Homeowners in unprotected flood plains should also be offered the full replacement cost to move, as Alberta did after the floods of 2013. After all, it’s flawed government zoning that put people in the flood plain and created the problem; it’s only fair to homeowners that government make things right. Forest-fire risk can be mitigated by underbrush removal, regulatory setback distances and fire-resistant building materials.

A Conservative climate-change mitigation strategy based on the common-sense words of that flood worker would make Canadians much better prepared for climate change. And it has the added benefit of actually telling Canadians the truth about the climate-change challenge. That would be Andrew Scheer’s most important difference from Justin Trudeau.

Gwyn Morgan is the retired founding CEO of Encana Corp.

Footnote:

A master class in exploiting global warming for political gain was portrayed in the British comedy series Yes Prime Minister

Transcript of video is at Yes PM Pokes Fun at Climatism

The West vs. Africa: Energy Hypocrisy as Seen from Kenya

Posted on by Ron Clutz

Suleiman Shahbal writes in Kenya at Standard Media Global warming: Why the West preaches water yet drinks wine.. Excerpts in italics with my bolds.

A few months ago I was with a group of Kenyan politicians in Abu Dhabi. Hosting us for a cup of coffee was my good friend Abdalla Nassir. Abdalla is a serial entrepreneur who owns 94 businesses, including the coffee shop. His 95th business is a steel mill that he was going to open in Djibouti, targeting the Ethiopian market of 80 million people.

I asked him why not in Kenya; the gateway to the Comesa market of 150 million people, to which he replied that the cost of power in Kenya is more than twice that of Djibouti and Ethiopia. One week later, I read that a glass company in Mtwapa had just closed down, with the loss of over 400 jobs. The reason? The high cost of power.

So what do we do? The quickest solution that everyone would like to come up with is solar or wind power. Both, ‘clean energy’. The problem is, what do you do when it doesn’t shine for three days? Or if there is no wind? You cannot run a hospital hoping for the sun to shine. Those baby incubators or that poor patient being operated on cannot depend on the weather being conveniently agreeable.

We are forced to look for dependable energy or, to use the lingo of the industry, ‘base load’. That leaves you with two energy sources – coal or gas. Coal is the cheapest. Gas prices are closely correlated to oil prices, which are very volatile and expensive. Remember that we have fewer industries and jobs because of cost. We have little choice but to go for the cheaper option. But the world doesn’t like coal. Why?

Affecting forests

In 2004, the world met in Copenhagen and came to the conclusion that global warming was a real threat to the planet. The world resolved not to allow global temperatures to rise above another 2 degrees.

Anything more would lead to catastrophic changes affecting forests, air, water and the environment. All true so far. No one doubts the disaster of global warming. The solution was either for the world to stop making any new coal plants or for the developed world to reduce their emissions by 10 per cent.

The developed world categorically refused. Such a drastic drop in emission would lead to loss of livelihoods and jobs, something they were not willing to take. So, let us force the poor Third World to stop starting such plants. Let the poor make the sacrifices. Who cares if they lose jobs or new companies? That’s why we have such a strong opposition to our coal power.

Shiekh Mohamed Al Maktoum is considered one of the most visionary leaders in the world. After all, he took the desert and transformed it into one of the world’s leading cities. He has all the gas and oil in the world, but he chose to build the Hassyn Coal Power Plant of 5,000 Megawatt. That is five times the one proposed in Kenya.

Do you think he is unwise to use coal when he has all the other alternatives? Turkey, one of Europe’s major economies, gets over 70 per cent of its power from coal and it is building a new one called Karabiga plant of over 1,500 megawatts. South Africa gets over 90 per cent of its power from coal. Do you think all these people are unwise?

Acceptable levels

Golda Meir, former Prime Minister of Israel once said: “there comes a time in every nation when they have to make sacrifices with their conscience and to make hard choices’’. Kenya is now at that cross point. Either we make that difficult choice and use the cheaper coal and create those jobs – or spend another 20 years dreaming of industralisation and job creation. Fortunately for Kenya, over 90 per cent of our power is from clean energy, mainly geothermal and hydro so the world can forgive us for trying to create jobs.

Chemicals can be deadly if used in excess. For example, 500mg of paracetamol (Panadol) will cure you, but 5,000 grams will kill you. That is the logic of chemistry. The same logic applies to all emissions from a coal plant, whether it be sulphur, carbon-dioxide or nitrogen. What is acceptable and what is not? The World Bank has set the standards that are acceptable and the proposed coal plant in Lamu meets all the requirements – and the day they don’t meet those standards then shut it down. No point arguing about the chemicals without stating the acceptable levels.

I am writing this in Lamu and I have to admit that I am one of the promoters of the coal plant. I am from Lamu, my family lives here and no one can claim to love this place more than I do. I would never do anything that would harm my people. However, there is no greater pollution than having millions of our youth remaining jobless and having their ambitions crushed through loss of hope. To quote Golda Meir, we need to make sacrifices with our conscience and bring the cheap power. Even if this annoys our rich friends.

Mr Shahbal is Chairman of Gulf Group of Companies

Summary

So wealthy elites in Europe and North America get to take virtuous postures on the imaginary problem of global warming, while Africans pay the price.  Racism anyone?  They are not asking for reparations, just letting them play by the same rules other nations used to build prosperous and healthy societies.

Good News: Outbreak of New Energy Realism

Posted on by Ron Clutz

Out of the darkness and gloom from climate doomsters shines a declaration of energy abundance, and positive prospects for future well being.  Robert Bradley Jr. writes March 14, 2019 at Master Resource  Perry’s “New Energy Realism” (freedom and fossil fuels are essential, moral, unstoppable) Excerpts in itallcs with my bolds and images.

“The lesson is clear. We don’t have to choose between growing our economy and caring for our environment. By embracing innovation over regulation, we can benefit both. And THAT is the heart of our New Energy Realism.”

At yesterday’s CERA conference, DOE Secretary Rick Perry did not quite come out and say it. But it’s a fossil-fuel world. Some bones were thrown out for the politically correct, economically incorrect energies (grid wind and solar, as well as batteries/electric vehicles), but make no mistake. The philosophy of the US Department of Energy is let the US-led global boom in oil, natural gas, and coal continue.

Oil, gas, and coal? Yes …. Ethanol? Not mentioned…. Domestic production? Yes…. Domestic usage? Yes…. Exports? Yes….. Regulation? No …. Sacrifice? No…. Pessimism? No.

Climate change? No mention….

Read between the lines. The fossil fuel boom is great for America and the world. Peak Oil and “the limits to growth” are refuted. Energy reliability (versus intermittency) is key. Heavy regulation of oil and gas is failure. New regulation and pain are unnecessary.

And you don’t even need to mention the Green New Deal.

The Obama era’s creeping radicalism to “keep fossil fuels in the ground” is being reversed. The CO2 mitigation window for the activists is closing rapidly, with the world energy market leaving the Paris accord in shambles. It’s a fossil-fuel world.

Excerpts from his speech follow:

“Just the other day the Meridian Spirit embarked from Sabine Pass with an LNG shipment to India. And just last week a LNG tanker left Cove Point, Maryland with its first shipment. These shipments underscore the Trump Administration’s desire to export more natural resources and innovation technologies to the world.”

“DOE [recently] met with producers and midstream developers to identify the next generation of technologies to unlock more of our nation’s resources. Whether carbon capture, developing new solar technology or stepping up efforts on storage, there is a tremendous amount of optimism in the energy sector and for obvious reasons.”

The Meridian Spirit loading a cargo for India’s Gail at Sabine Pass LNG. (Cheniere)

“Energy security is a roadmap to economic prosperity.”

“But today, we have the opportunity to reaffirm a new direction which I call the New Energy Realism. This ‘new energy realism’ rests on the fact that America is in the midst of incredible energy progress.”

“Due to a cascade of technological breakthroughs driven by innovation, America is producing abundant, affordable energy from a wider range of sources than we ever thought possible … and we are using this energy more cleanly and more efficiently as well.”

“… our successes refute old myths, debunk false choices, and transcend limitations, pointing the way to global energy security and shared prosperity. This dramatic progress is a decisive break from the 1970s, when America began pursuing a fundamentally flawed energy policy for which we paid dearly.”

“Those who believed in it claimed that the days of energy abundance were over. It was said we had a permanent energy shortage. It was said that even if we discovered new reserves, they would be too costly to produce or impossible to use without harming the environment. And the solution proposed was a bleak one — draconian regulation of energy.”

“Truth be told, we had no shortage of energy. What we had was a shortage of imagination and a loss of confidence in our ability to innovate. Clearly, the naysayers weren’t realists at all… they were pessimists blinded to the reality of America’s innovative capabilities. And unfortunately, this blindness ruled in one of the least innovative places on earth….Washington, D.C.”

“In a place that so obviously favored regulation over innovation, it was no surprise when the government used one thumb to promote a favorite technology and the other hand to regulate those they didn’t like.”

“In states like Texas, taxes were cut and regulations kept simple and transparent, giving people both the freedom and the incentive to innovate. And with innovation came a revolution in energy technology.”

“As a former Texas governor, I’m proud that the major breakthroughs in hydraulic fracturing and horizontal drilling – leading to our historic natural gas boom — began right here in this state.”

“From fossil fuels to renewables…supply rose…costs fell…efficiencies increased…and diversity blossomed. And something else happened as well. Our environment did not become worse. By nearly any measure, it became better, even as our economy expanded and energy development reached new heights.”

“The lesson is clear. We don’t have to choose between growing our economy and caring for our environment. By embracing innovation over regulation, we can benefit both. And THAT is the heart of our New Energy Realism.”

“Over the past year, President Trump and his Administration have brought this realistic view to Washington… and we are seeing its benefits. He has cut taxes and reduced regulations by historic numbers, putting Washington squarely on the side of innovators and investors.”

“… this can only help the President’s plan to spur the construction of more infrastructure. Tax reductions will cut a major cost of doing business, while his proposal to reduce the permitting process to just two years will give investors the confidence to provide the necessary capital and communities visibility on project completion.”

“The President has also signed off on critical new pipelines. He has removed draconian oil-and-gas restrictions on responsible exploration, supported clean coal technologies, and seeks to reinvigorate civilian nuclear energy.

“America is now on the cusp of energy independence, but the President would like to go farther. He would like to share our energy bounty with the world and let the spirit of competition benefit consumers by providing more choices in the marketplace. Already, we are sharing our natural gas.”

“Last year, we became a net natural gas exporter. Today, we export LNG to 27 nations on five continents.”

“We are increasing our coal exports substantially. These exports rose by an estimated 61 percent last year over 2016, according to the Energy Information Administration (EIA). Last August, the first shipment of Pennsylvania thermal coal bound for Ukraine left the Port of Baltimore. In the coming years, we will be exporting multiple fuels.”

“And not only that. We will export the same technologies that made us a clean, abundant, and diverse energy producer in the first place. By exporting our energy, we can free our friends and allies from fuel dependence on unfriendly nations.

“And by exporting our energy technology and know-how, we can help developing countries in Latin America, Africa, and Asia create their own energy renaissance and harness more energy to improve the lives of their citizens.”

“And that includes access to electricity. Over a billion people live without it. We want to reduce that number substantially in the coming years.”

“Now some aren’t happy with us exporting this technology because they oppose most energy production, specifically that of fossil fuels, which comprise 80 percent of world energy usage and continue to produce carbon emissions. I fear that this is the mindset of the Paris Agreement.”

“And while studies show that even by the year 2040, fossil fuels will still comprise 77 percent of world energy use, I believe that continued technological breakthroughs will help us defy this prediction.”

“What are the people without electricity supposed to do? Remember what we have done through technology…..we have not only produced more fossil energy with it; we’ve made that energy cleaner.”

“Since we’re making coal cleaner and since our technology can affordably extract massive amounts of lower-emissions natural gas, we’re likely to continue to reduce the overall emissions of our fossil fuels. That, again, is the New Energy Realism.”

“Thanks to the amazing power of human ingenuity and innovation, we don’t have to tolerate the intolerable…we don’t have to accept hideous sacrifices that harm the poorest among us.”

“And so let us reject the old energy pessimism – and embrace the New Energy Realism…. We would welcome – and help lead – a global alliance of countries willing to help make fossil fuels cleaner, rather than abandoning them. This will help nations diversify their energy supply…a key to achieving energy security.”

“And from that energy security… comes prosperity: affordability, economic growth…rising opportunities…optimism…and, most importantly, the freedom for each individual to pursue and achieve their dreams.”

“Combining opportunity with the freedom to design your own energy future, will enable the production of more energy from more sources, more affordably, and in a cleaner way than it ever could have in freedom’s absence.”

“It is by embracing this New Energy Realism that we will all move toward greater energy security and a brighter, more prosperous future. Let all nations embrace it – and the spirit of imagination and innovation that drives it – for their own sake and for the sake of the world.”

US Leads Globe in Clean Energy Tech

Posted on by Ron Clutz

 

North America has grown in population, but not in energy use.

Hank Campbell writes in Science 2.0 America Leads The World In Controlling Energy Consumption And Emissions – We Should Be Exporting That, Not Solar Dogma.  Excerpts in italics with my bolds.

As the world’s most powerful economy, we read a lot about how America needs to do more to use cleaner energy, and less of it.

The data show we already do. Energy is a basic need, like food, and in energy and food America has been a trailblazer in reducing environmental strain. We had a blip upward in emissions from energy when we scuttled nuclear in the U.S. (resulting in a coal surge), but less than two decades later improvements in natural gas had caused coal to be such a non-factor more people are now employed by the solar panel industry than in mining. The energy sector has made such dramatic improvements in emission reductions that President Obama’s Clean Power Plan was outdated before it could ever be enacted; the private sector reached what would have been the government’s 2025 target for energy emissions in 2017.

Americans are also good about responsible energy usage. Though there is a political divide about how much climate has changed since the 1950s, and how much of that is due to mankind, there is no political difference when it comes to green efforts like energy conservation. All of us do it. That shows in recent data from the U.S. Energy Information Administration. Though our population continues to grow, our growth in energy consumption has not.

The growth in energy and emissions is instead in Asia and Africa. But even that is not a bad thing when we consider the health hazards of burning wood or dung, as 90 percent of Africa recently did. The developing world deserves a chance to have centralized affordable energy and the benefits to culture that occur when basic needs become cheaper and more money is available for art and libraries and sanitation. Even coal is a reasonable interim solution because of its cost.

Source: EPA Our Nation’s Air 2018

The World Health Organisation estimates up to 6.5 million annual deaths are linked to air pollution each year but those are not happening here, we have the best air quality in the world; it is happening in homes where one billion people still burn their own fuel for cooking and heating.

We have done a disservice to poor countries telling the World Bank we would only help finance centralized energy in developing countries if it was solar or wind when we know they can’t afford those. We sacrificed sanitation and hygiene in places that need it most.

American science and technology has been a role model for how the world can keep energy affordable and clean. That is what we should be exporting to other countries, not guilt over our success.

 

 

Why More USA CO2 is a Good Thing

Posted on by Ron Clutz

A new editorial at Investor’s Business Daily explains: Don’t Join The Media Freak Out Over Recent Jump In CO2 Emissions — It Won’t Last. Excerpt in italics with my bolds.

CO2 Emissions: For the first time in years, U.S. carbon dioxide output rose last year, a new report says. The jump has set off alarms in all the predictable media quarters. Relax. It’s a great sign for the economy, and will mean nothing long term for the environment.

CO2, the main greenhouse gas that global warming advocates most fear, happens to be rising around the world right now. It has been for decades.

But in recent years the U.S. has been the big exception to that trend, with declining amounts of CO2 spewed into the air from its industry. The reason for this is that, thanks to fracking, companies and utilities around the country are replacing coal with natural gas.

At least, that is, until 2016. But in 2018, U.S. carbon dioxide output jumped by 3.4%, according to Rhodium Group, a research firm.

It’s not hard to understand why. Thanks to a booming economy set off by President Trump’s new trade deals, tax cuts and deregulation, in the past two years the U.S. has seen manufacturing jobs surge.

CO2 Emissions Vs. Factory Jobs
Indeed, since Trump entered office, the number of manufacturing jobs has jumped by close to half a million. Once-moribund industrial areas around the country, many of which voted for Trump, are coming back to life. Minority unemployment rates are at or near record lows. Meanwhile, wages rose 3.2% last year, the fastest in a decade.

These are good things. This is prosperity.

Sources: US Federal Reserve Board and MAPI Foundation.

All those people going back to work in refurbished factories in America’s Heartland — you remember, the ones Hillary Clinton called “deplorables” — helped push emissions from manufacturing up 5.7% last year alone.

Transportation also contributed, of course, in the surging economy, with jet fuel (up 33.1%) and diesel fuel (up 3%) posting solid gains. A growing economy also means more electricity demand. Emissions in the electricity producing sector jumped 1.9%.

Then there’s the irony of ironies: some of the increase in greenhouse gas emissions, which activists fear are causing runaway global warming, was due to an unusually cold winter last year. That’s right: Businesses and homes used more fuel for heat than they have in years. Rhodium noted that CO2 from this winter effect rose 10% in 2018.

A Cold, Cold Winter
Are these bad things? No. Not at all.

First off, people need to heat their homes and businesses in winter. That’s a given. Anyone who doubts that deserves the scorn and ridicule that surely would come their way for suggesting otherwise.

Second, those who have regained their jobs in factories across America should be cheered after living through years of steady, unremitting industrial decline. That some media outlets are now treating the very recent rise in CO2 output as some epic tragedy, please.

A healthy economy always produces more CO2 when its growing fast than otherwise. Our current growth rate is roughly 50% higher than it was under President Obama. If it didn’t produce more CO2, that would be surprising.

“The boom in manufacturing is good news for American workers,” said The Daily Caller, “however, major media outlets sounded the alarm on global warming.” Both Washington Post and Bloomberg .

The Post was worst, claiming the “world has only about a decade to make the ‘unprecedented changes necessary” to stave off climate disaster.

Of course, such predictions of doom are based on statistical models that have proven wrong repeatedly in the past. That’s not science; it’s little better than a Ouija Board. And yet, these prophets of climate doom would have us slash CO2 output and destroy hundreds of thousands of jobs just to satisfy the demands of the green socialist movement.

Nothing’s Forever — Not Even CO2
By the way, those gains in CO2 won’t go on forever. The next slump or slowdown will take care of that, by causing many companies to close and many people to lose their jobs. And fracking will continue to chip away at our CO2 emissions.

Meanwhile, around the world, countries are abandoning their restrictions on CO2 emissions that have impoverished them and angered voters. They’re also throwing aside the idea of punitive carbon taxes. People want jobs. They want incomes. They want better lives. And taxing them and the businesses they work for so that they’ll be poorer and pollute less creates resentment, even rage.

Just ask France’s Gilets Jaunes, who have nearly paralyzed President Emmanuel Macron’s administration over his proposal for higher energy taxes. It should be a warning to U.S. Democrats, who hope to parlay fear of a changing climate into total control of the U.S. government.

As Nancy Pelosi said earlier this month, on becoming House speaker again, “We must… face the existential threat of our time: the climate crisis — a crisis manifested in natural disasters of epic proportions.” This is nonsense on steroids.

Capitalism Cleans Up
The truth is, the world is getting much cleaner, when measured by CO2 output per dollar of GDP. So is the U.S. It’s decarbonizing. And as the world population begins to decline later this century and new energy technologies come on line — everything from new battery technology to ultra-safe nuclear power designs — CO2 emissions won’t be a problem, real or imagined.

The real problem? Having enough people working and paying taxes to support all the retirees around the world and pay off hundreds of trillions of dollars of global debt.

What is a problem is the nonstop fear-mongering, demands for more taxes, and dangerous socialist experiments in expanding government control of the economy, all in the name of warding off the threat of global warming.

So don’t worry about this jump in CO2. It won’t last. But the damage from bad green policies foisted on the economy will.

Energy Conundrums

Posted on by Ron Clutz

world energy by sources

Anyone paying attention to global warming/climate change knows that activists intend to disrupt (legally or otherwise) the energy platform supporting modern industrial society. It is a radical movement since the developed world (think G20) depends upon fossil fuels for nearly 90% of its energy. Gail Tverberg has again insightfully probed into the ways our energy supply is impacted by these alarmist concerns. Whether or not you believe global warming is now or could become catastrophic (I don’t), policymakers around the world are tinkering with energy supplies under pressure from greens convinced oil, coal and gas should be left in the ground.

At her blog Our Finite World, Tverberg describes the implications and dangers in a recent post  Electricity won’t save us from our oil problems The title is a link to her presentation, and I encourage you to go and read the whole thing. Here are some excerpts in italics with my bolds, selected and somewhat reordered according to my sense of her findings, along with some added images.

Electrical Supply Threatened by Prices Too Low for Producers

Almost everyone seems to believe that our energy problems are primarily oil-related. Electricity will save us.

It wasn’t until I sat down and looked at the electricity situation that I realized how worrying it really is. Intermittent wind and solar cannot stand on their own. They also cannot scale up to the necessary level in the required time period. Instead, the way they are added to the grid artificially depresses wholesale electricity prices, driving other forms of generation out of business. While intermittent wind and solar may sound sustainable, the way that they are added to the electric grid tends to push the overall electrical system toward collapse. They act like parasites on the system.

We end up with an electricity situation parallel to the chronic low-price problem we have for oil. Prices for producers, all along the electricity supply chain, fall too low. Of course, consumers don’t complain about this problem. The electricity system also becomes more fragile, as we depend to an ever greater extent on electricity supplies that may or may not be available at a reasonable price at a given point in time. The full extent of the problem doesn’t become apparent immediately, either. We end up with both the electrical and oil systems speeding in the direction of collapse, while most observers are saying, “But prices aren’t high. How can there possibly be a problem?”

Perverse Direct and Indirect Subsidies

Simply removing the subsidies that come from Production Tax Credits doesn’t fix the situation either. In one sense, the problem reflects a combination of many types of direct and indirect subsidies, including state mandates and the requirement that intermittent renewables be allowed to go first. In another sense, the problem is that, in a self-organizing economy, energy prices (including electricity prices) can only rise temporarily. The increase in energy prices is made possible by a growing debt bubble. At some point, this debt bubble collapses. Raising interest rates, as the US is doing now, is a good way of collapsing the debt bubble.

Slide 18 shows that in the US, the only types of renewable generation growing to any significant extent are intermittent wind and solar. Very high subsidies have helped push these types of generation along.

Parts of these subsidies are being phased out, but other, less visible subsidies remain. The fact that intermittent wind and solar are given priority on the grid, when they happen to be available, is a huge subsidy. Also, renewable mandates mean that generation is being added that is not really needed, lowering prices that that the self-organizing competitive pricing system creates for backup electricity providers. This is part of the reason for the unprofitability of many natural gas, coal, and nuclear companies.

There is also a problem with wholesale rates being too low for nuclear, when electricity rates are competitively set. To work around this problem, some areas use capacity auctions, which are intended to offset the inadequate funding for electricity providers providing backup electricity capacity. One catch is that a capacity auction is, in some sense, needed for every member of the supply chain. Just asking electricity generating companies to bid on providing capacity doesn’t guarantee that the full supply chain will be available.

Furthermore, the subsidies for intermittent wind and solar discourage other innovation because they lead to terribly low wholesale prices for innovators to compete against, particularly in areas where hour by hour competitive rating is done. The ultimate problem is that if one type of electricity production is subsidized (even if in subtle ways), all electricity producers must be subsidized. Governments cannot possibly afford such widespread subsidies.

Falsely Hoping Future Prices Will Save the Industry

By way of background, the US Energy Information Administration publishes “levelized cost of electricity” estimates that companies producing electricity are expected to use for planning purposes. When new generating capacity is added, planning needs to be started several years in advance. This is why what is being published now is the EIA’s calculation of expected wholesale costs (at a 2017 price level) for 2022.

Current wholesale prices for “dispatchable” electricity (the opposite of intermittent electricity) seem to be in the 3 to 4 cents per kWh range in the continental US, so all of the amounts shown assume that electricity prices will be much higher in the future. This thinking is in parallel with the “high oil prices will save the oil industry in the future” view that is prevalent in the oil industry. This thinking has helped keep the prices of shares of energy stocks up: “Even if there are problems now,” the thinking goes, “certainly higher prices in the future will fix the situation.”

With respect to wind, there are two reasons why variable wind can be sold in Power Purchasing Agreements (PPAs) for 2 to 3 cents per kWh. The first is the substantial subsidies that have been available, making this pricing arrangement profitable to wind producers. The second is the low value that intermittent electricity provides to the grid. In fact, prices locked into these PPAs are slightly below the bottom of the range of expected future natural gas prices (Figure 1, below). This suggests that the primary value of wind generation is to replace natural gas as a future fuel.

There is one reason why it might make sense to somewhat believe the first item, “Rising cost of electricity production will be no problem.” This has to do with the cost-plus type of electricity pricing (“regulated pricing”) that is used in some states of the United States. When cost-plus pricing is used, higher costs can, in theory, be passed on to consumers. The catch is that higher electricity prices tend to raise the price of finished goods and services. If wages are not rising rapidly enough, this can lead to an affordability problem. Industrial users of electricity are especially likely to cut back their electricity demand because higher prices make their products less competitive in the world economy.

After the talk, I decided to look at this situation a bit more closely. This analysis strongly suggests that since 2000, increased globalization has been playing a major role in holding down US demand for electricity. If there is an opportunity, industrial production will move to jurisdictions where the total cost of production (including wages, benefits, electricity costs, and other costs) is lower, even if there has not been a big increase in industrial electricity prices.

Industries get very unhappy when their electricity rates rise, making them uncompetitive with producers in other countries. The rates we are discussing are UK industrial electricity rates, so are a little higher (perhaps 1.5 times higher) than the wholesale prices discussed on Slides 5 and 6. If the price of 8.3 cents per kWh for industrial electricity is a big problem today, how can countries possibly withstand much higher rates, based on higher carbon prices or based on required technology that is much more expensive?

Suppose a worker gathers reeds and uses them to make baskets. If his production per hour falls, he will have fewer baskets to sell in the marketplace. He cannot expect the price of each basket to rise to make up for his lower production.

For some reason, economists seem to have overlooked this obvious problem. There is no reason to expect that the buyer will be penalized for the higher costs of the energy industry. These higher costs look much like growing inefficiency. In the real world, the seller is generally penalized for falling efficiency. Why do we have so much confidence that the price per barrel of oil can rise, or the price per kWh of electricity can rise, if the price of baskets that a less-efficient worker makes doesn’t rise?

Coal (and nuclear) are the products that have historically kept US electricity prices low. Replacing coal with fuels that are much higher in cost and more variable in availability seems likely to be problematic. Industrial users are likely to be especially distressed.

The United States has been fortunate enough to have very low natural gas prices recently. A major problem is that these prices are not really high enough for companies extracting natural gas as their primary business. If we really need to depend on natural gas, we will likely need much higher prices. In particular, natural gas prices will need to be high enough for natural gas companies to have bond ratings that are above junk ratings.

Low Prices Also Threaten Oil Production

I have been following oil since 2005, so I have had a chance to hear the discussion evolve. Oil prices were clearly too high for some consumers back in July 2008, when the sub-prime housing debt bubble popped in the United States. By early 2014, I started hearing that oil companies were very unhappy about the low price level available in 2013. In fact, some companies were sufficiently unhappy that they began cutting back on investment in new fields. It was not much later that oil prices dropped further, making the low-price problem even worse for producers.

It is difficult for any new technology to get a foothold in a situation where energy prices of all kinds tend to be low. In addition, the pressure seems to be in the direction of reducing energy prices further, even if this means less energy production of all kinds.

One common inaccurate assumption is that oil prices rise primarily in response to the rising cost of oil production. If a person looks at the data, it becomes clear that interest rates have a huge impact on prices. This seems to happen because the purchase of high-value goods with debt (such as factories, homes, cars, and buildings of all kinds) seems to have a very significant impact on total Demand. Lower interest rates make these high-value goods more affordable. (Quantitative Easing (QE) is a way of reducing long-term interest rates; it also seems to affect oil prices.)

Economies Collapse When Goods are Unaffordable

One way of understanding the situation is by understanding that energy consumption is required for jobs that pay well. If insufficient energy supplies are available at a low price, the vast majority of jobs available will be low-paid service jobs. There will, of course, be a few managers and business owners. But these few managers and owners cannot, by themselves, generate enough Demand for goods and services made with energy products to keep commodity prices up. This is why the system tends to fail.

This is probably the most important reason that economies tend to collapse. Most people miss the affordability connection because they interpret “Demand” to be something that anyone can do, without thinking about the affordability aspect. Without sufficient income, a person cannot demand a new home or new car, or gasoline from a fuel station.

See also:  Killing the Energy Goose

Climateers Tilting at Windmills

OPEC: The Walking Dead

Posted on by Ron Clutz

America is fracking away and has become the world’s greatest oil producer.  Investor’s Business Daily has the story  How Fracking Turned OPEC Into The Walking Dead Excerpts in italics with my bolds.

The river of oil now hitting the market from U.S. fracking has stunned global energy markets. The U.S. has already leapfrogged both Russia and Saudi Arabia as the No. 1 producer. Will U.S. oil lead to OPEC’s demise?

For the first time since World War II, the U.S. is on the verge of being a net oil exporter — something that, just five years ago, would have been considered impossible.

This, of course, has caught the 28-nation Organization of Petroleum Exporting Countries by surprise. Even just a few years ago, the consensus was that fracking and its related technologies would add a decent amount of oil to the market, but nothing like what’s happening now.

Can OPEC Cut Enough?

Now, as OPEC prepares to meet on December 6, its original hope of major output cuts to bolster prices has become a problem. A suddenly booming and opportunistic U.S. oil industry is raising output faster — and producing oil more cheaply — than its competitors. Prices are plunging.

As Javier Blas of Bloomberg notes, U.S. oil output is rising at its fastest pace in 98 years. Meanwhile, both Russia and the Saudis are also pumping at record levels. The U.S. is tipping the scale. Since 2010 in the West Texas Permian Oil Basin alone, some 114,000 new wells have been drilled, bringing millions of barrels of new oil to the market. Other parts of the U.S. are undergoing the same transformation.

That’s bad for OPEC.

“The U.S. energy surge presents OPEC with one of the biggest challenges of its 60-year history,” wrote Blas. “If Saudi Arabia and its allies cut production … higher prices would allow shale to steal market share. But because the Saudis need higher crude prices to make money than U.S. producers, OPEC can’t afford to let prices fall.”

Fracking = Plunging Prices

Yet that’s exactly what oil prices are doing. On November 1, West Texas Intermediate crude traded at $65 a barrel. Today, it’s barely above $50, a nearly 19% drop.

Yes, plunging oil prices might signal concerns over the global economy, or over President Trump’s trade fight with China, or over the election of a Democratic Congress, or perhaps all three. But the fact is, the U.S. is producing enormous amounts of oil today.

One thing history has shown is that so-called cartels such as OPEC have an easy time finding agreement when prices rise, and end up bickering and backstabbing when prices fall. OPEC is definitely in the latter mode right now. Adding to its woes, the Department of Justice is looking into recent bipartisan antitrust legislation to curb OPEC’s market clout.

Are we seeing the final days of OPEC? Thanks to fracking, even if OPEC continues as the walking dead, it will likely never again have the clout it once had.

BBC Disparages Hydropower

Posted on by Ron Clutz

 

A previous post explained how methane has been hyped in support of climate alarmism/activism. Now we have an additional campaign to disparage hydropower because of methane emissions from dam reservoirs. File this under “They have no shame.” Excerpts below with my bolds.

This week BBC News published Large hydropower dams ‘not sustainable’ in the developing world by an environmental correspondent.  “Sustainable” is a code word that means “little or no change to nature”, so of course building dams is already suspect. In fact, dams provide a range of economic, environmental, and social benefits, including recreation, flood control, water supply, hydroelectric power, waste management, river navigation, and wildlife habitat.  To say dams are “unsustainable” belies their success in the developed world, and seeks to deny those benefits to other nations who want and need those benefits.

BBC News: More than 90% of dams built since the 1930s were more expensive than anticipated. They have damaged river ecology, displaced millions of people and have contributed to climate change by releasing greenhouse gases from the decomposition of flooded lands and forests.

The climate change angle may be the real motivation behind these stories.  On March 5, 2018 a study was published in Environmental Research Letters Greenhouse gas emissions of hydropower in the Mekong River Basin can exceed those of fossil fuel energy sources

“The hydropower related emissions started in the Mekong in mid-1960’s when the first large reservoir was built in Thailand, and the emissions increased considerably in early 2000’s when hydropower development became more intensive. Currently the emissions are estimated to be around 15 million tonnes of CO2e per year, which is more than total emissions of all sectors in Lao PDR in year 2013,” says Dr Timo Räsänen who led the study. The GHG emissions are expected to increase when more hydropower is built. However, if construction of new reservoirs is halted, the emissions will decline slowly in time.

Another recent example of the claim is from Asia Times Global hydropower boom will add to climate change

The study, published in BioScience, looked at the carbon dioxide (CO2), methane (CH4), and nitrous oxide (N2O) emitted from 267 reservoirs across six continents. In total, the reservoirs studied have a surface area of more than 77,287 square kilometers (29,841 square miles). That’s equivalent to about a quarter of the surface area of all reservoirs in the world, which together cover 305,723 sq km – roughly the combined size of the United Kingdom and Ireland.

“The new study confirms that reservoirs are major emitters of methane, a particularly aggressive greenhouse gas,” said Kate Horner, Executive Director of International Rivers, adding that hydropower dams “can no longer be considered a clean and green source of electricity.”

In fact, methane’s effect is 86 times greater than that of CO2 when considered on this two-decade timescale. Importantly, the study found that methane is responsible for 90% of the global warming impact of reservoir emissions over 20 years.

Alarmists are Wrong about Hydropower

Now CH4 is proclaimed the primary culprit held against hydropower. As usual, there is a kernel of truth buried beneath this obsessive campaign: Flooding of biomass does result in decomposition accompanied by some release of CH4 and CO2. From HydroQuebec:  Greenhouse gas emissions and reservoirs

Impoundment of hydroelectric reservoirs induces decomposition of a small fraction of the flooded biomass (forests, peatlands and other soil types) and an increase in the aquatic wildlife and vegetation in the reservoir.

The result is higher greenhouse gas (GHG) emissions after impoundment, mainly CO2 (carbon dioxide) and a small amount of CH4 (methane).

However, these emissions are temporary and peak two to four years after the reservoir is filled.

During the ensuing decade, CO2 emissions gradually diminish and return to the levels given off by neighboring lakes and rivers.

Hydropower generation, on average, emits 50 times less GHGs than a natural gas generating station and about 70 times less than a coal-fired generating station.

The Facts about Tropical Reservoirs

Activists estimate Methane emissions from dams and reservoirs across the planet, including hydropower, are estimated to be significantly larger than previously thought, approximately equal to 1 gigaton per year.

Activists also claim that dams in boreal regions like Quebec are not the problem, but tropical reservoirs are a big threat to the climate. Contradicting that is an intensive study of Brazilian dams and reservoirs, Greenhouse Gas Emissions from Reservoirs: Studying the Issue in Brazil

The Itaipu Dam is a hydroelectric dam on the Paraná River located on the border between Brazil and Paraguay. The name “Itaipu” was taken from an isle that existed near the construction site. In the Guarani language, Itaipu means “the sound of a stone”. The American composer Philip Glass has also written a symphonic cantata named Itaipu, in honour of the structure.

Five Conclusions from Studying Brazilian Reservoirs

1) The budget approach is essential for a proper grasp of the processes going on in reservoirs. This approach involves taking into account the ways in which the system exchanged GHGs with the atmosphere before the reservoir was flooded. Older studies measured only the emissions of GHG from the reservoir surface or, more recently, from downstream de-gassing. But without the measurement of the inputs of carbon to the system, no conclusions can be drawn from surface measurements alone.

2) When you consider the total budgets, most reservoirs acted as sinks of carbon in the short run (our measurements covered one year in each reservoir). In other words, they received more carbon than they exported to the atmosphere and to downstream.

3) Smaller reservoirs are more efficient as carbon traps than the larger ones.

4) As for the GHG impact, in order to determine it, we should add the methane (CH4) emissions to the fraction of carbon dioxide (CO2) emissions which comes from the flooded biomass and organic carbon in the flooded (terrestrial) soil. The other CO2 emissions, arising from the respiration of aquatic organisms or from the decomposition of terrestrial detritus that flows into the reservoir (including domestic sewage), are not impacts of the reservoir. From this sum, we should deduct the amount of carbon that is stored in the sediment and which will be kept there for at least the life of the reservoir (usually more than 80 years). This “stored carbon” ranges from as little as 2 percent of the total carbon output to more than 25 percent, depending on the reservoirs.

5) When we assess the GHG impacts following the guidelines just described, all of FURNAS’s reservoirs have lower emissions than the cleanest European oil plant. The worst case – Manso, which was sampled only three years after the impoundment, and therefore in a time in which the contribution from the flooded biomass was still very significant – emitted about half as much carbon dioxide equivalents (CO2 eq) as the average oil plant from the United States (CO2 eq is a metric measure used to compare the emissions from various greenhouse gases based upon their global warming potential, GWP. CO2 eq for a gas is derived by multiplying the tons of the gas by the associated GWP.) We also observed a very good correlation between GHG emissions and the age of the reservoirs. The reservoirs older than 30 years had negligible emissions, and some of them had a net absorption of CO2eq.

Keeping Methane in Perspective

Over the last 30 years, CH4 in the atmosphere increased from 1.6 ppm to 1.8 ppm, compared to CO2, presently at 400 ppm. So all the dam building over 3 decades, along with all other land use was part of a miniscule increase of a microscopic gas, 200 times smaller than the trace gas, CO2.

 

Background Facts on Methane and Climate Change

The US Senate is considering an act to repeal with prejudice an Obama anti-methane regulation. The story from activist source Climate Central is
Senate Mulls ‘Kill Switch’ for Obama Methane Rule

The U.S. Senate is expected to vote soon on whether to use the Congressional Review Act to kill an Obama administration climate regulation that cuts methane emissions from oil and gas wells on federal land. The rule was designed to reduce oil and gas wells’ contribution to climate change and to stop energy companies from wasting natural gas.

The Congressional Review Act is rarely invoked. It was used this month to reverse a regulation for the first time in 16 years and it’s a particularly lethal way to kill a regulation as it would take an act of Congress to approve a similar regulation. Federal agencies cannot propose similar regulations on their own.

The Claim Against Methane

Now some Republican senators are hesitant to take this step because of claims like this one in the article:

Methane is 86 times more potent as a greenhouse gas than carbon dioxide over a period of 20 years and is a significant contributor to climate change. It warms the climate much more than other greenhouse gases over a period of decades before eventually losing its potency. Atmospheric carbon dioxide remains a potent greenhouse gas for thousands of years.

Essentially the journalist is saying: As afraid as you are about CO2, you should be 86 times more afraid of methane. Which also means, if CO2 is not a warming problem, your fear of methane is 86 times zero. The thousands of years claim is also bogus, but that is beside the point of this post, which is Methane.

IPCC Methane Scare

The article helpfully provides a link referring to Chapter 8 of IPCC AR5 report by Working Group 1 Anthropogenic and Natural Radiative Forcing.

The document is full of sophistry and creative accounting in order to produce as scary a number as possible. Table 8.7 provides the number for CH4 potency of 86 times that of CO2.  They note they were able to increase the Global Warming Potential (GWP) of CH4 by 20% over the estimate in AR4. The increase comes from adding in more indirect effects and feedbacks, as well as from increased concentration in the atmosphere.

In the details are some qualifying notes like these:

Uncertainties related to the climate–carbon feedback are large, comparable in magnitude to the strength of the feedback for a single gas.

For CH4 GWP we estimate an uncertainty of ±30% and ±40% for 20- and 100-year time horizons, respectively (for 5 to 95% uncertainty range).

Methane Facts from the Real World
From Sea Friends (here):

Methane is natural gas CH4 which burns cleanly to carbon dioxide and water. Methane is eagerly sought after as fuel for electric power plants because of its ease of transport and because it produces the least carbon dioxide for the most power. Also cars can be powered with compressed natural gas (CNG) for short distances.

In many countries CNG has been widely distributed as the main home heating fuel. As a consequence, methane has leaked to the atmosphere in large quantities, now firmly controlled. Grazing animals also produce methane in their complicated stomachs and methane escapes from rice paddies and peat bogs like the Siberian permafrost.

It is thought that methane is a very potent greenhouse gas because it absorbs some infrared wavelengths 7 times more effectively than CO2, molecule for molecule, and by weight even 20 times. As we have seen previously, this also means that within a distance of metres, its effect has saturated, and further transmission of heat occurs by convection and conduction rather than by radiation.

Note that when H20 is present in the lower troposphere, there are few photons left for CH4 to absorb:

Even if the IPCC radiative greenhouse theory were true, methane occurs only in minute quantities in air, 1.8ppm versus CO2 of 390ppm. By weight, CH4 is only 5.24Gt versus CO2 3140Gt (on this assumption). If it truly were twenty times more potent, it would amount to an equivalent of 105Gt CO2 or one thirtieth that of CO2. A doubling in methane would thus have no noticeable effect on world temperature.

However, the factor of 20 is entirely misleading because absorption is proportional to the number of molecules (=volume), so the factor of 7 (7.3) is correct and 20 is wrong. With this in mind, the perceived threat from methane becomes even less.

Further still, methane has been rising from 1.6ppm to 1.8ppm in 30 years (1980-2010), assuming that it has not stopped rising, this amounts to a doubling in 2-3 centuries. In other words, methane can never have any measurable effect on temperature, even if the IPCC radiative cooling theory were right.

Because only a small fraction in the rise of methane in air can be attributed to farm animals, it is ludicrous to worry about this aspect or to try to farm with smaller emissions of methane, or to tax it or to trade credits.

The fact that methane in air has been leveling off in the past two decades, even though we do not know why, implies that it plays absolutely no role as a greenhouse gas.

More information at THE METHANE MISCONCEPTIONS by Dr Wilson Flood (UK) here

Summary:

Natural Gas (75% methane) burns the cleanest with the least CO2 for the energy produced.

Leakage of methane is already addressed by efficiency improvements for its economic recovery, and will apparently be subject to even more regulations.

The atmosphere is a methane sink where the compound is oxidized through a series of reactions producing 1 CO2 and 2H20 after a few years.

GWP (Global Warming Potential) is CO2 equivalent heat trapping based on laboratory, not real world effects.

Any IR absorption by methane is limited by H2O absorbing in the same low energy LW bands.

There is no danger this century from natural or man-made methane emissions.

Conclusion

Senators and the public are being bamboozled by opaque scientific bafflegab. The plain truth is much different. The atmosphere is a methane sink in which CH4 is oxidized in the first few meters. The amount of CH4 available in the air is miniscule, even compared to the trace gas CO2, and it is not accelerating. Methane is the obvious choice to signal virtue on the climate issue since governmental actions will not make a bit of difference anyway, except perhaps to do some economic harm.

Give a daisy a break (h/t Derek here)

Daisy methane

Footnote:

For a more thorough and realistic description of atmospheric warming see:

Fearless Physics from Dr. Salby