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US Energy Policy

US Energy Policy

Energy Policy

The incandescent lightbulb is now outlawed.[1]  This fact is a perfect metaphor for “energy policy.”  Should it be illegal in the United States to manufacture, sell, buy, and use a traditional incandescent light bulb?  Your informed answer to that question will provide deep insight into your views on hundreds of other energy policy questions.   (BTW, my answer is no, but I bet you guessed that.)

Energy is the lifeblood of our economy; it touches your life in a hundred ways each day.  Yet energy policy--the set of government rules and regulations that prescribe how energy is produced, delivered, and consumed--is a complex and even a chaotic subject.

Energy was an uninteresting subject for the average person prior to the OPEC Oil Embargo in 1973.  Oil prices had been stable at about $20 a barrel in real terms for nearly a century and electricity prices had declined from about 22 cents per kilowatt to about 13 cents from 1960 to 1973, even as consumption of electricity quadrupled from 1950 to 1973, as more and more homes and appliances used electricity and utilities became better at building large coal and nuclear plants.

But the OPEC Embargo changed everything about energy and energy policy.  Four points will illustrate this importance. 

  • President Jimmy Carter’s presidency (1976 to 1980) was dominated by energy issues which he characterized as the “moral equivalent of war.” 
  • A little more than two decades later a California governor was recalled because he botched an electricity crisis in California and Arnold Schwarzenegger was elected Governor. 
  • There is a widespread perception that the US has gone to war in the Middle East over oil issues.
  • The Pope of all people has recently declared war on climate change, most of which is laid at the feet of fossil energy.

Part of the complication in energy policy is that it must be addressed on many fronts; international, national, State, and local governments all have a role in stirring the pot. 

Many books and articles are written on very specific aspects of energy policy but most are written for other experts.  Surprisingly, few are written that cover the broad landscape of energy policy.  Even fewer of these writings take a strong market-oriented perspective; the vast majority take an interventionist approach largely for environmental and oil import reasons.  And none that I have found are addressed to the pro-market political activist who has a real job during the day and then tries to save the country in his or her spare time.  This discussion is for that heroic citizen, The Forgotten Man.

So what’s the bottom line on energy policy? 

  • First, we make energy policy much more difficult than it has to be.  Energy is a commodity just like wheat or cars or hamburgers.  Mostly, we rely on competitive markets in each of these other commodity industries to make sure that we have an adequate supply to meet the consumers’ needs at reasonable prices.  But we treat energy differently.  I venture to guess that there are only a few industries more affected by government intervention than energy.  Why is that?  Does that mean we benefit from that intervention?  Is there a better way?  The article explores these questions.
  • Second, right now energy policy is being driven by climate change.  Even if one is sympathetic to some of the claims made about climate change, many stupid actions are being taken in its name that has profoundly negative effects on energy markets. 
  • Third, oil issues get the most attention but we do not face any real danger in oil markets.  Oil trades in global markets and while there may be price fluctuations (as I write, oil is about $35 a barrel, having been over $100 in the recent past), we will never face a situation where we run out of oil.  Most countries with plentiful oil have built their economies on oil revenue and the recent drop in oil prices has created serious political problems for these countries.  They simply can’t afford not to produce oil.  But problems in oil markets can result in unnecessarily higher prices and thus we need to pay some attention to them in order to promote prosperity. 
  • Fourth and most important, electricity faces real problems that could result in catastrophic failure of the system, thus threatening not only prosperity but human life.  The major framework for electric policy was set in 1935.  That framework worked fine up to the OPEC Embargo.  Electricity can compete against oil and natural gas in many applications.  Thus adjustments were necessary to the historical framework after the Embargo.  But policymakers have only nibbled at the edges of electricity policy and have not fundamentally changed the 1935 framework.  Yet little more than additional tinkering is being done to promote an electricity industry for the 21st Century.  Many special interests are pushing and pulling on the antiquated framework for personal gain but few are fundamentally committed to a complete rethinking of the role of the electric system of the future, especially given the increasing digitalization of our economy.  And as noted above, unsound policies on climate change make electric issues even more difficult.


[1] This is a good place to make a point.  Some pointy headed academics will disagree with even this first sentence.  Technically, Congress did not “ban” incandescent bulbs in the Energy Independence and Security Act of 2007.  Rather, they set a standard that most, if not all, traditional incandescent bulbs could not achieve and established a schedule for light bulbs of different wattages to meet this standard.  So it is fair to say that Congress outlawed incandescent bulbs.  But since the accompanying Article is a synthesis of the broad topic of “energy policy” it would needlessly clutter and complicate the text to be “technically” accurate in every instance.  The size of the document would need to double and the reader would understand less of the essence of energy policy if I did not make some broad generalizations.  Nonetheless, I am sure I will receive some criticism that many of my statements are not “technically correct.”  I hope that making this point early in the article will allow for a better understanding of the content of the Article.

 

Highlighted Article: Cultural Motivations for Wind and Solar Renewables Deployment

  • 12/17/20 at 03:00 AM

From: Climate Etc.

By: Andy West

Date: November 19, 2020

 

Cultural Motivations for Wind and Solar Renewables Deployment


“For me the question now is, now that we know that renewables can’t save the planet, are we going to keep letting them destroy it?”. – Michael Schellenberger

Introduction

"There have been many technical analyses of Wind and Solar energy, covering a raft of issues from energy density and efficiency, through subsidies and land usage, to maintenance, grid impacts, intermittency and more. The angle examined here is in no way intended to replace such necessary views, whether they lean to the pessimistic or the optimistic or anywhere in-between. Rather, a complementary view is provided regarding an aspect that such technical analyses cannot address, albeit it often features in the conclusions and questions these analyses raise at the end. Right here at Climate Etc, the first of the excellent analyses by ‘Planning Engineer’ (on his retirement revealed to be Russ Schussler, ex-VP of Transmission Planning at Georgia Transmission Corporations), laudably highlighted the limitation of technical analyses with his very first line: “Power System Planners do not have the expertise or knowledge to say whether or not the benefits of reducing carbon emissions are worth the costs. However they should be respected as experts for obtaining a better understanding of what the implications and costs of such programs are.”...

 

Cultural Motivations for Wind and Solar Renewables Deployment

 

Tags: Highlighted Article

Guest Post: Get Ready For Nationwide Blackouts Under Biden

  • 12/7/20 at 03:00 AM

Guest Post

From: International Climate Science Coalition (ICSC)

By: Dr. Jay Lehr and Tom Harris

The power disaster unfolding in California will soon occur across the country, if Joe Biden gets his way. The Golden State has been sweeping away the forms of energy that have provided reliable electricity for decades, under the same agenda the former Vice-President is planning for America as a whole.

Power outages are now commonplace in California. Last summer, the state suffered its first rolling blackouts in nearly 20 years. Imagine if this happened in Chicago in the middle of winter.

California’s trouble is explained by officials who now openly admit to an over-reliance on wind and solar power. The governor said there was not enough wind to keep the turbines going, while cloud cover and nightfall restricted solar power. The Los Angeles Times recognized the root of the problem:

“… gas-burning power plants that can fire up when the sun isn’t shining or the wind isn’t blowing have been shutting down in recent years, and California has largely failed to replace them …”

Consequently, the state has fallen thousands of megawatts behind its needs. Governor Gavin Newsom admitted, “we failed to predict and plan for these shortages” and took (nominal) responsibility for the rolling blackouts. Now he wants everyone to conserve power, while the state looks for new sources of energy, most likely fossil fuel-generated power from neighboring states.

All this is happening while California continues its intention to transition to 60% renewable energy by 2030 and 100% “climate-friendly energy” by 2045, as required by state law.

Indeed, in their October 6 open letter to Newsom, the heads of the California’s Energy Commission, Independent System Operator and Public Utilities Commission wrote: “We are unwavering in our commitment to meeting California’s clean energy and climate goals.”

Team Biden plans to go even further, committing to making the entire nation 100% renewable within 15 years. The United States would fall tens of millions of megawatts behind on its electricity needs.

Like the California government, the incoming Biden-Harris administration is acting entirely under the unfounded belief that climate change is a manmade calamity that can be stopped by eliminating fossil fuel use. They are clearly unaware of the Climate Change Reconsidered series of reports of the Nongovernmental International Panel on Climate Change (NIPCC).

These documents summarize thousands of studies from peer-reviewed scientific journals that either refute or cast serious doubt on the climate scare. They conclude that we are not causing a climate crisis.

Yet, in their October 6 report, Preliminary Root Cause Analysis – Mid-August 2020 Heat Storm, the same heads of California’s Energy Commission, Independent System Operator and Public Utilities Commission highlighted the “climate change-induced extreme heat storm across the western United States” as the first cause of the blackout.

In their view, apparently, shutting down coal, gas and nuclear power plants in California and in states from which California imports electricity played only minor roles.

California’s determination to shift to so-called “green” energy – which is actually anything but clean, green, renewable and sustainable – is being echoed by politicians across the nation. The result, especially in states that don’t enjoy California’s mostly benign weather, is going to be that those in the poorest neighborhoods and those on fixed incomes may be forced to choose between heating and eating.

It also means people trying to run their homes, offices, factories, hospitals and schools on intermittent, weather-dependent, much more expensive wind and solar power will have to get used to never knowing when or for how long their electricity will be on or off. Now in California; soon in the entire USA.

Coherent energy systems are designed with the understanding that portions of the system will be offline from time to time. Power companies compensate for this with reserve power at the ready. However, California has closed its margin for error in response to anti-nuclear and anti-fossil fuel sentiments and climate change concerns. Team Biden intends to do this for the entire United States.

Power outages cannot always be avoided and are more common than one may think. For example, between 2008 and 2017, Illinois had 871 outages, the tenth most by state. Texas had nearly twice as many, giving it the dubious distinction of ranking number two in the list.

But these pale in comparison to California which has the least reliable electrical power system in the nation. It leads in power outages every year. Between 2008 and 2017, it had 4,297 power outages!

The origin of the problem is partly California’s Senate Bill 1368, which in 2006 established the state’s emission standards to reduce greenhouse gases from power plants. Following that year, eleven coal-fired power plants were closed and three were converted to biomass. Only one coal-fired plant remains.

The state also reduced its normal reliance on energy from out of state coal plants.

Yielding to anti-nuclear activists, the state also closed all but one nuclear plant, Diablo Canyon. That plant generates about 18,000 Gigawatt-hours of reliable electricity every year, fully 8.6% of California’s total generation.

But Diablo Canyon will soon be closed too. Not surprisingly, during its construction and operation, anti-nuclear protests were common; nearly two thousand people were arrested for civil disobedience during a two-week period in 1981. In response, in 2016, the California Public Utilities Commission approved a Pacific Gas & Electric Joint Proposal to phase out the state’s remaining nuclear power. That means the operating licenses for Diablo Canyon’s two units will not be renewed when they expire in 2024 and 2025.

Ironically, the Commission did not approve Pacific Gas & Electric’s proposal for resources to replace the station’s output. It does not appear to matter that nuclear reactors produce no greenhouse gas emissions during operation. They are hated by the enviro-radicals who drive California’s energy policy and are steadily putting the state even further behind the 8-ball.

It gets worse. California now requires that all new homes be nearly entirely electric. It wants citizens to switch their natural gas stoves to electric, as part of their global warming initiatives. More than 30 cities have already enacted bans on gas appliances, including San Francisco. The state also hopes to eliminate all gasoline and diesel cars in favor of plug-in electric automobiles.

This means demand for reliable, affordable electricity will rise by leaps and bounds, just as supplies are steadily reduced, and partially replaced by expensive, intermittent, weather-dependent power.

Just as Mr. Biden promises for the nation as a whole, California is sacrificing reliable electrical power as part of its impossible crusade to “stop climate change.” Of course, this will have no impact on our planet’s climate, because (a) climate change is mostly natural and not driven by carbon dioxide, and (b) all those wind turbines, solar panels and backup batteries will be manufactured overseas, mostly in China, using fossil fuels and simply moving the source of ever-increasing greenhouse gas emissions.

However, it will certainly spur sales of candles, flashlights, propane heaters, and natural gas, gasoline and diesel generators.

So, welcome to America’s future under a Biden-Harris-Kerry- AOC Administration. America, the blackouts are coming.


_______________________________________________________

*Ohio-based Dr. Jay Lehr is Senior Policy Advisor to the Ottawa, Canada-based International Climate Science Coalition (ICSC). Tom Harris is Executive Director of ICSC.

 

Tags: Guest Post

Shifty(?) Climate Sands

The Biden/Harris position on climate change has been shifting (shifty?) as their political campaign has “progressed” toward election day. The Green New Deal is one of the key issues on which the campaign has shifted with regard to climate. The Biden campaign website states: “Biden believes the Green New Deal is a crucial framework for meeting the climate challenges we face.” Senator Harris is a co-sponsor of the Green New Deal in the Senate and has previously supported it on the campaign trail. However, Biden has now stated that he does not support the Green New Deal. Climate change is only one aspect of the Green New Deal, which deals with air travel, high speed rail, building energy efficiency and electric vehicles. Virtually all other aspects of the Green New Deal are reflected in both the 2020 Democrat Party Platform and the Biden Platform.

One of the key factors in the reduction of US CO2 emissions has been the shift from coal to natural gas for electric power generation. This shift was largely made possible by hydraulic fracturing, which has made natural gas far more available. The Biden/Harris position on fracking has changed from “ban fracking” to “ban fracking on public lands” to “not ban fracking”. Biden has also stated that there would be no more fossil fueled power plants built under his administration. Biden/Harris are committed to eliminating CO2 emissions from power generation by 2035, five years later than the Green New Deal schedule.

Biden has committed to incentivizing installation of 500,000,000 solar modules and 16,000 wind turbines. While these are large numbers, they are relatively trivial in comparison with the numbers needed to replace all existing fossil fueled power generation facilities with intermittent renewable generators and storage systems. Solar and wind currently supply approximately 12% of US electricity. However, this capacity is currently backed up by fossil fueled generation; and, in general, is dispatched first under environmental dispatch orders. Combined solar and wind generation capacity would therefore have to be increased by roughly an order of magnitude to supply approximately all of US electricity consumption, even with continuing fossil fuel backup. Eliminating the fossil fuel backup would require installation of significant additional generating capacity plus long term, high draw storage capacity sufficient to supply power for several days. This storage technology is not currently commercially available.

While a Biden/Harris administration would incentivize solar and wind installations, the majority of the investment required to install these systems would be required to be provided by private sources, such as investor owned electric utilities, other businesses  and homeowners. In the process, the utilities would be forced to abandon existing, functioning fossil fueled generating capacity, at a loss of approximately $4 trillion.

The switch from fossil fueled generation to renewable generation would also strand huge quantities of coal, oil and natural gas, causing a dead weight loss of $50+ trillion, which would be borne by both private owners and the government. These costs are not considered when the Biden asserts that: “The Green New Deal will pay for itself as we move forward.”

 

Tags: 2020 Election, Green New Deal

Highlighted Article: Your Life Under the Green New Deal

  • 10/8/20 at 03:00 AM

 

From: CFACT

By: Paul Driessen

Date: October 5, 2020

 

Your Life Under the Green New Deal

 

"During the cantankerous September 29 presidential “debate,” candidate Joe Biden proclaimed “I am the Democratic Party.” He is in charge, he insisted, and his views will be Democrat policy. Others aren’t so sure – about that, about what his views actually are, or about how far to the left he would be pushed, prodded and pressured by Kamala Harris, AOC, Bernie Sanders, Nancy Pelosi, Chuck Schumer, Antifa mobs, and coastal and blue city governing, academic and technology elites." ...

 

Your Life Under the Green New Deal

 

Tags: Highlighted Article

Highlighted Article: Memo to Biden

  • 7/30/20 at 03:00 AM

 

From: Master Resource

By: Robert Bradley Jr.

Date: July 20 - July 23, 2020

 

Memo to Biden

 

W. S. Jevons (1865) on Wind - Part 1
W. S. Jevons (1865) on Waterpower, Biomass. and Geothermal - Part 2
W. S. Jevons on Coal - Part 3
W. S. Jevons on Energy Efficiency - Part 4

 

“The first great requisite of motive power is, that it shall be wholly at our command, to be exerted when, and where, and in what degree we desire. The wind, for instance, as a direct motive power, is wholly inapplicable to a system of machine labour, for during a calm season the whole business of the country would be thrown out of gear.”

The most important book written on energy economics was the first: William Stanley Jevons’s The Coal Question (London: Macmillan and Company, 1865, rev. 1866). This classic is available in its entirety on the Internet.

Jevons’s remarkably sophisticated treatment of energy sustainability remains pertinent today. In a real sense, the Biden approach to energy was refuted by the insight of W. S. Jevons more than 150 years ago.

This four-part series will continue this week with Waterpower, Biomass, and Geothermal; Coal; and Energy Efficiency." ...

 

W. S. Jevons (1865) on Wind - Part 1
W. S. Jevons (1865) on Waterpower, Biomass. and Geothermal - Part 2
W. S. Jevons on Coal - Part 3
W. S. Jevons on Energy Efficiency - Part 4

 

Tags: Highlighted Article

Highlighted Article: What If Hydraulic Fracturing Was Banned?

  • 2/13/20 at 06:00 AM

 

From: U.S. Chamber of Commerce's Global Energy Institute

Date: Fall 2016

 

What If Hydraulic Fracturing Was Banned?

 

"The U.S. shale energy revolution was not an accident. It was the result of innovation, strategic investment, and old fashioned hard work. More than anything, it was an event made possible by the development, refinement and application of cutting-edge technology – technology developed by engineers, geologists, and other scientists who spent decades trying to “crack the code” of tight oil and gas. These efforts delivered nothing short of an energy renaissance. After years of projections that America’s energy future would grow more dependent on imports, the U.S. energy landscape is now defined by abundance, not scarcity.

We don’t have to look back very far to see the significance of this technological breakthrough. In July 2003, TIME Magazine carried a feature story entitled, “Why U.S. Is Running Out of Gas,” which boldly predicted that the United States was heading to its “first big energy squeeze since the 1970s.” The magazine claimed further that “the U.S. is finally beginning to run out of domestic oil and easily recoverable natural gas.” A few years later, in 2008, oil was nearly $150 per barrel, and gasoline prices spiked to more than $4 per gallon. Henry Hub natural gas prices were also above $8 per million BTU, or about two and a half times what they are today." ...

 

What If Hydraulic Fracturing Was Banned?

 

Tags: Highlighted Article

Highlighted Article: Pathway 2045 - Edison’s Roadmap to Energy Hell

  • 11/21/19 at 06:00 AM

 

From: Watts Up With That?

By: Rud Istvan

Date: November 8 - November 14, 2019

 

Edison’s Roadmap to Energy Hell

 

Pathway 2045 – Part 1

Pathway 2045 – Part 2

Pathway 2045 – Part 3

Roadmap 2045 – Part 4

Pathway 2045 – Part 5

Pathway 2045 – Part 6

 

"California WUWT reader Cal B alerted Charles the Moderator to a new document just published by Edison International, the holding company parent for SoCal Edison, the largest electric utility for southern California. Cal B asked if WUWT posters might like to take it on? In his usual charming fashion, CtM got me (after some initial reluctance) to volunteer today over a lunch overlooking South Florida’s Intercoastal Waterway. The key was his sensible solution to my ‘too big a subject’ objection—break it into parts! ...

"My reasons for agreeing were several.

"First, most of the technical difficulty issues buried in Pathway 2045 I previously covered, albeit at posts over at Judith Curry’s Climate Etc and/or in my ebook Blowing Smoke. So there was not a whole lot of new research required.

"Second, it is stunning that an electric utility could foist such technical and economic nonsense onto its California customers. One presumes it was forced by coming California requirements imposed by Newsom worse than the crazy 2030 requirements to which SoCalEd already crazily responded in 2017.

"Third, as WUWT matures and changes from just the climate science to the climate politics, it is attracting new readers that may not be familiar with long past technical analyses. This is an opportunity to “bundle’” the big ‘Green New Deal’ energy fact picture together again."

 

Pathway 2045 – Part 1

Pathway 2045 – Part 2

Pathway 2045 – Part 3

Roadmap 2045 – Part 4

Pathway 2045 – Part 5

Pathway 2045 – Part 6

 

Tags: Highlighted Article
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