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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.

 

Climate Change Fascism - ORIGINAL CONTENT

Fascism
1: a political philosophy, movement, or regime (such as that of the Fascisti) that exalts nation and often race above the individual and that stands for a centralized autocratic government headed by a dictatorial leader, severe economic and social regimentation, and forcible suppression of opposition
2 : a tendency toward or actual exercise of strong autocratic or dictatorial control

Elements of fascism have reared their ugly heads in the US response to climate change including autocratic government, economic regimentation and forceable suppression of opposition.

Examples of autocratic federal government actions include: ordering an end to coal-fired electric generation by 2030; ordering an end to natural gas-fired generation by 2035; ordering an end to fossil fuel combustion by 2050; terminating oil and gas leasing and revoking oil and gas production permits; ordering half of vehicles sold to be EVs by 2030; and, ordering all new vehicles sold to be EVs by 2035.

Ending coal and natural gas generation will shutter numerous generators which have not yet reached the ends of their useful lives, destroy the primary market for bituminous coal and a major market for natural gas, terminate the employment of numerous powerplant workers, coal miners and oil and gas field workers and strand $ trillions of coal and natural gas reserves. The federal government is effectively expropriating the property of the power plant and coal mine owners, likely with no compensation for their losses. Shuttering the coal and natural gas generating stations will also remove the primary sources of the power required to compensate for the intermittency of wind and solar generation.

Terminating oil and gas leasing and operating permits will cause oil and gas availability to decline as existing producing wells are depleted. The federal government has made no obvious provisions to assure that oil and gas supplies will remain sufficient to meet demand as supplies are depleted.

The federal government and several state governments have mandated a transition from ICE vehicles to EVs. Manufacturers are being forced to transition their product lines to EVs until all new vehicles sold must be EVs. Purchasers will face declining vehicle choices, higher vehicle prices, reduced vehicle utility and expensive battery replacement. This transition is being forced in the face of unresolved issues with spontaneous battery fires in personal vehicles, light duty trucks and transit buses. Owners retaining ICE vehicles will be faced with challenges regarding fuel and maintenance availability.

The federal government is also coordinating with the broadcast and print media and with internet social media organizations to suppress skepticism regarding the government’s climate change initiatives. The various media organizations are employing “fact checkers” to suggest that information from skeptical sources is labeled as disinformation or misinformation. The federal government has also acted against numerous climate scientists who question the government’s narrative regarding the future dangers of climate change. These scientists’ employers have been periodically harassed by senators and congressmen. Some scientists have been removed from state and federal government positions for refusing to support the government narrative.

 

Tags: Climate Policy

EV (Electric Vehicle) Precautions - ORIGINAL CONTENT

Precautionary Principle: An expression of a need by decision-makers to anticipate harm before it occurs. Within this element lies an implicit reversal of the onus of proof: under the precautionary principle it is the responsibility of an activity-proponent to establish that the proposed activity will not (or is very unlikely to) result in significant harm.

Murphy's Law: An observation: anything that can go wrong will go wrong.

Environmental activists have frequently asserted the Precautionary Principle as the basis for immediate and aggressive actions to limit climate change despite the manifold uncertainties in climate science’s projections of future climate conditions. Their approach frequently appears to be based in part on Murphy’s Law.

While environmental activists have been very vocal regarding the uncertain, projected future dangers of climate change based on the outputs of unverified climate models, they have been far less vocal regarding the clear and present dangers of Lithium battery fires, both in EVs and in grid-scale storage installations.

Fortunately, there appear not to have been any fatalities in EV fires, except when the vehicle was involved in a crash. However, there have been numerous instances of spontaneous vehicle fires, some during charging and others when the vehicle was parked. There also appear to have been no fatalities in EV transit bus fires, which have occurred both when the buses were being charged and when they were parked waiting to begin a scheduled route. (here, here and here) There have been no reported battery fires in transit buses while carrying passengers. There have so far been no reported incidents of battery fires in EV school buses.

A fire aboard the trans-Atlantic vehicle ship Felicity Ace, which was carrying approximately 4,000 vehicles including numerous EVs, destroyed the ship and its cargo. The cause of the fire is uncertain, though it appears likely that a spontaneous EV battery fire was the cause. EV batteries were certainly a major contributor to the fire, which the ship’s crew were not able to control.

There have also been Lithium battery fires in grid-scale storage batteries. (here, here) In both cases, these incidents appear to have been triggered by malfunctions of the battery cooling systems.

Numerous owners and operators are considering banning parking and charging of EVs in parking structures, including the basements of apartment complexes and shopping centers because of the fire risk and the extreme difficulty of extinguishing Lithium battery fires.

It would seem that environmental activists promoting the application of the Precautionary Principle regarding potential future climate change should be at least as concerned regarding the clear and present danger of EV battery fires. There is no urgent need to adopt EVs for a variety of uses until the issue of spontaneous battery fires has been addressed and resolved. These fires are a particular concern in school buses and transit buses because the fires are so intense and spread so quickly that evacuation might be hindered or even prevented. This is also the case for parking and charging EVs under apartment buildings.

 

Tags: Electric Vehicles

CVOW (Coastal Virginia Offshore Wind) & Storage - ORIGINAL CONTENT

Dominion Energy has proposed to build Coastal Virginia Offshore Wind (CVOW) a 176 wind turbine farm off the Virginia coast. The Virginia Legislature had predetermined that such a project was in the public interest. The Virginia State Corporation Commission (VSCC) has approved a rate increase related to funding of CVOW, though many project details remain to be finalized and many environmental approvals are outstanding.

The rating plate generating capacity of CVOW is 2.6 GW. Project output would be expected to range from 0 GW to 2.6 GW. The International Energy Agency estimates an annual capacity factor of 50% for offshore wind turbines. I will use that estimate here, since there is no significant US experience with wind farms off the US East coast. Therefore, CVOW would be expected to generate an annual average of ~1.3 GW, ranging from ~1.6 GW in Winter to ~0.8 GW in Summer.

The daily and seasonal output variations would require significant long-duration storage to allow the output of CVOW to be dispatchable. For example, the stored electricity required to make up the difference between annual average capacity and average summer capacity (1.3 GW – 0.8 GW = 0.5 GW) for a single Summer month would be approximately 372 GWh (0.5 GW * 24 hours/day * 31 days), while the capacity required to make up the difference between average winter capacity and average summer capacity would be approximately 595 GWh (0.8 GW * 24 * 31).

Dominion Energy is the majority owner of the Bath County Pumped Storage Station (BCPSS), which was frequently described as “the largest storage battery in the world”. BCPSS has a generating capacity of 3 GW and a total storage capacity of 24 GWh. Therefore, BCPSS could replace the full capacity of CVOW for approximately 9 hours (24 GWh / 2.6 GW). It would require 15-25 storage stations like BCPSS to render CVOW dispatchable seasonally based on storage capacity.

Construction of a pumped storage facility with the capacity of BCPSS would cost approximately $4 billion, or approximately $160 per kWh ($4,000,000,000 / 24,000,000 kWh), or approximately half the NREL estimated cost of battery storage. The cost of each new storage station would be approximately 40% of the estimated cost of CVOW.

Of course, the above calculations are all estimates since all of the inputs to the calculations are estimates. However, the largest uncertainty regarding the overall project is the amount of storage capacity which would be required in the Dominion Energy grid to maximize the value of the contribution of CVOW on an annual basis. Determining the optimal storage capacity would require a detailed analysis of the generating capacity mix planned for the future Dominion Energy renewable plus storage grid, including allowances for load growth resulting from population increases and from accommodating the federal goal of Net Zero by 2050.

The 2050 Net Zero Dominion Energy grid would be expected to exhibit annual electricity demand and consumption approximately 4 times current demand and consumption. That would be a massive technical and economic challenge.

 

Tags: Wind Energy, Energy Storage / Batteries

Energy Inflation Was by Design - Highlighted Article

  • 10/27/22 at 07:00 AM

From: RealClear Energy

By: Joseph Toomey

Date: September, 2022

 

Energy Inflation Was by Design


FOREWORD
by Rupert Darwall

The West is experiencing its third energy crisis. The first, in 1973, was caused by the near-quintupling of the price of crude oil by Gulf oil producers in response to America’s support for Israel in the Yom Kippur war. Their action brought an end to what the French call the trente glorieuses-the unprecedented post-World War II economic expansion. The second occurred at the end of the 1970s, when Iran’s Islamic revolution led to a more than doubling of oil prices. This again inflicted great economic hardship, but the policy response was far better. Inflation was purged at the cost of deep recession. Energy markets were permitted to function. High oil prices induced substitution effects, particularly in the power sector, and stimulated increased supply. In the space of nine months, the oil price cratered from $30 a barrel in November 1985 to $10 a barrel in July 1986. It’s no wonder that the economic expansion that started under Ronald Reagan had such long legs.

This time is different. The third energy crisis was not sparked by Saudi Arabia and its Gulf allies or by Iranian ayatollahs. It was self-inflicted, a foreseeable outcome of policy choices made by the West: Germany’s disastrous Energiewende that empowered Vladimir Putin to launch an energy war against Europe; Britain’s self-regarding and self-destructive policy of “powering past coal” and its decision to ban fracking; and, as Joseph Toomey shows in his powerful essay, President Biden’s war on the American oil and gas industry.

Hostilities were declared during Joe Biden’s campaign for the Democratic presidential nomination. “I guarantee you. We’re going to end fossil fuel,” candidate Biden told a climate activist in September 2019, words that the White House surely hopes get lost down a memory hole. Toomey’s paper has all the receipts, so there’s no danger of that. As he observes, Biden’s position in 2022 resembles Barack Obama’s in 2012, when rising gas prices threatened to sink his reelection. Obama responded with a ruthlessness that his erstwhile running mate lacks. He simply stopped talking about climate and switched to an all-of-theabove energy policy, shamelessly claiming credit for the fracking revolution that his own EPA tried to strangle at birth.(continue reading)

Energy Inflation Was by Design

 

Tags: Highlighted Article

History in Real-Time - ORIGINAL CONTENT

 

“Those who cannot remember the past are condemned to repeat it.”
George Santayana

“Those that fail to learn from history are doomed to repeat it.”
Winston Churchill

"Insanity is doing the same thing over and over and expecting different results."
Albert Einstein

History: a chronological record of significant events (such as those affecting a nation or institution) often including an explanation of their causes
Merriam-Webster

History does not repeat itself identically because too many factors surrounding events differ or are subject to change during and after the events. History is easier to understand the more recent it is because more detail regarding an event is available for analysis and the factors surrounding the event have had less time to change. The ideal situation is the ability to analyze a series of events as they unfold in real-time, on their way to becoming history.

We currently have the opportunity to analyze several series of events regarding the transition from conventional sources of energy to renewable plus storage energy systems based on wind and solar generation. These series of events have occurred in two different states in the US and in two different nations in Western Europe. While each series of events was and is impacted by a unique set of surrounding factors, they share several common characteristics.

Each series of events involved aggressive introduction of renewable generation, while virtually ignoring electricity storage and relying on conventional generation to provide backup power when the intermittent renewable generation was either unavailable or operating below rating plate capacity.

Each series of events involved premature closure of conventional generating capacity, primarily coal and nuclear generation, thus reducing the backup capability of the remaining conventional generation.

Each series of events involved an unusual, but not unprecedented, weather event which significantly reduced the availability of the intermittent renewable generation capacity for a period of several days. These weather events included wind droughts in California and western Europe and unusually cold weather in Texas.

Each of these series of events has been accompanied by a significant increase in electric energy prices, despite government assurances that the transition to renewable generation would reduce electricity prices. These price increases are largely the result of the fact that the renewable generation is redundant capacity, since it continues to require equivalent conventional generation capacity as backup.

The consequences of these series of events in Western Europe have been aggravated by Russian reductions in natural gas deliveries, which then reduced the available natural gas combined-cycle generation output. This has resulted in numerous business and industry closures or output reductions due to reduced competitiveness or insufficient energy availability. Several Western European nations have altered planned conventional generation closures and begun reopening closed conventional generation.

States and nations which have not yet experienced similar series of events and their effects have the opportunity to learn from this history as it unfolds around them in real-time. Scheduled conventional generation plant closures are being deferred and expansion of electricity storage capacity is being re-evaluated. Continuing to do the same things is being questioned.

 

Tags: Electric Power Generation, Electric Power Reliability

Innovation Instead - ORIGINAL CONTENT

“That's why I think we need to recognize it has to be about innovation instead. If we focus on making green energy so cheap that eventually everyone will want it, then we can get everybody on board, and we can do so very, very cheaply. So, we can spend less money and do much more good by investing in research and development, rather than focusing on what has failed for the last 20 years”. - Bjorn Lomborg

Energy has been a critical factor in improving humans’ quality of life and lifespan. Lomborg has repeatedly emphasized the importance of the availability of adequate energy, clean water and sanitation to improve the quality of life in developing nations. He has also criticized the developed nations’ focus on investments in current technology intermittent renewable electricity generation, which he views as relatively less important.

Lomborg’s focus on innovation to make “green energy so cheap that eventually everyone will want it” makes eminent good sense. Unfortunately, that is the exact opposite of the path being followed by the UN, EU, UK, US, Canada and Australia. The UN is demanding and the developed nations are forcing an accelerated conversion of their energy economies to reliance on intermittent wind, solar and electricity storage. These conversions are being driven, not by citizen demand, but rather by legislation and regulations requiring replacement of fossil fuels for all energy end uses with renewable generation and storage. They are also being supported by government incentives which have been available for decades.

This enforced transition has resulted in dramatic increases in energy prices in these countries, despite government and developer assertions that wind and solar are the cheapest sources of electricity. It is also leading to impending shortages of energy, energy consumption restrictions and electric grid unreliability and instability. These issues are also being aggravated in Western Europe by the Russian invasion of Ukraine and Russia’s use of the natural gas it sells to those nations as a geopolitical bargaining tool, reducing gas deliveries below contracted volumes.

The current situation, rather than “making green energy so cheap that eventually everyone will want it”, is making green energy so expensive that eventually no one will want it. In the process, it is also making fossil fuel generation more expensive, since fossil generators are required to provide backup for the intermittent renewables when they are not generating, causing the fossil generators to be operated for fewer hours and to generate less power while their fixed costs remain constant.

The same governments are also forcing a transition to electric vehicles, again driven by legislation and supported by incentives for vehicle purchase and for installation of vehicle charging stations. However, the EVs are more expensive than internal combustion engine vehicles and there are growing concerns about battery cost and life. EVs have also been plagued recently by a rash of battery fires in personal vehicles, light trucks and transit buses. These fires spread rapidly and are virtually impossible to extinguish. Several jurisdictions are considering banning parking and charging EVs in parking structures because of this issue.

 

Tags: Power Grid, Electric Vehicles, Renewable Energy

Standby Generator Issues - ORIGINAL CONTENT

Intermittent renewable generation displaces a portion of the output of conventional coal and natural gas generators, but does not replace those generators. However, depending on intermittent renewable market penetration, the annual output of the conventional generators is reduced and the operation of some generators might be suspended, particularly during the shoulder months.

The reduced operation of these conventional generators increases the unit cost of their output because the fixed costs of the plants and the labor costs of operating and maintaining the plants remain relatively unchanged, but must be allocated to lower generation output. Unit fuel costs also increase slightly as modulated or intermittent operation reduce generator efficiency.

Uncertainty regarding required generator output creates fuel supply issues for the conventional generators. Coal plants maintain a coal pile on the generation site, from which coal is moved to the steam boiler. The coal in the pile represents an unrecovered expense for the generator. Therefore, the pile must remain large enough to meet demand without burdening the generator with excessive unrecovered expense throughout the year. While coal generators can load-follow over a wide range of output, restarting a coal generator from a “cold start” can take 10 or more hours. A decision to shut down a coal plant must take this restart time into account.

Natural gas generators do not maintain on-site fuel supply, but rely on contemporaneous pipeline fuel delivery. This typically has not been an issue when adequate pipeline capacity and adequate gas quantities are available. However, with variable or interruptible generator operation, the generator cannot enter into firm, fixed-price contracts for natural gas delivery and is reluctant to contract for firm pipeline capacity. Therefore, natural gas generators typically rely on interruptible pipeline capacity and purchase their natural gas in the spot market as required.

However, changes in the market are having an impact on this gas supply scenario. Numerous utilities with significant coal generation capacity will be required to retire those generators by 2030 to meet the Administration’s emission reduction goals. Several of these utilities are considering adding natural gas generators to replace the coal generating capacity. However, the Administration’s actions limiting oil and gas exploration and production will limit future gas availability, while its resistance to new natural gas pipeline construction will limit access to natural gas for future natural gas generators.

As natural gas production declines, the quantity of natural gas available in the spot market will also decline, increasing the spot market price and reducing generator access to fuel when required. This situation manifested in Texas in 2021, when high gas demand for heating in very cold weather dramatically reduced spot market gas availability and restricted gas plant generation. This problem was compounded by difficulties in restarting inoperative gas generators which had not been winterized.

This issue will become more critical as the market penetration of intermittent renewables increases and as the US energy market transitions to ‘all-electric everything” until grid-scale storage is available to support the intermittent generation. There remains a risk that storage capacity additions lag behind the loss of conventional generation capacity.

 

Tags: Electric Power Generation, Electric Power Reliability, Energy Storage / Batteries, Backup Power

100 Ways Biden and the Democrats Have Made it Harder to Produce Oil & Gas - Highlighted Article

  • 9/22/22 at 07:00 AM

 

From: American Energy Alliance

By: Thomas Pyle

Date: May 26, 2022

 

100 Ways Biden and the Democrats Have Made it Harder to Produce Oil & Gas

 

Joe Biden and the leadership of the Democratic party have a plan for American energy: make it harder to produce and more expensive to purchase. Since Biden took office, his administration and Congressional Democrats have taken over 100 actions deliberately designed to make it harder to produce energy here in America.

32 of these anti-energy proclamations were enacted after the Russian invasion of Ukraine, which Biden regularly touts as an excuse for rising gas prices.

This is exactly what the Green New Deal agenda is, making the sources of energy needed every day for families around the country too expensive to afford.

The Democratic plan for lower gas prices is simple: blame everyone else, buy an electric vehicle, and don’t be poor. The Biden administration has made it clear they value the support of the radical environmental lobby more than lowering prices at the pump.

Below is a list of 100 explicitly anti-energy actions taken by the administration since Biden took office last January. (continue reading)

 

100 Ways Biden and the Democrats Have Made it Harder to Produce Oil & Gas

 

Tags: Highlighted Article

Grid Reliability - ORIGINAL CONTENT

The reliability of the electric utility grid depends upon the availability of generation output equal to grid demand at all times. Historically, this has been accomplished by operating numerous generators at somewhat below full capacity, so that the output of those plants could be rapidly increased in the event of a significant increase in grid demand or the loss of a generator due to equipment failure. The reliability issue is most critical during periods of peak demand. Electric utilities typically have maintained a capacity reserve margin of approximately 15-20% relative to their peak demand to assure that grid demand could be met in the event of the loss of a generator.

Nuclear generators are typically base-loaded because of their low operating costs and their limited suitability for load following. Coal generators have typically been used for both base load and intermediate load applications. Natural gas combined-cycle generators offer flexible response to load changes and are the first to be adjusted to match changing demand. Natural gas simple-cycle turbines offer even faster response, but are rarely operated except during periods of peak demand because of their lower efficiency and thus higher operating costs.

The introduction of intermittent renewable generation to the existing electric utility grid requires several changes in the historical approaches to grid management. Unlike conventional generation systems, the output of intermittent renewable generators such as wind turbines and solar collectors can change frequently and uncontrollably throughout the day, requiring more rapid and somewhat less predictable response from conventional generation assets. Intermittent renewable generation can also be unavailable for periods of hours or days as the result of weather conditions.

Conventional generation assets must be available to meet grid demand during periods when either solar or wind output is unavailable or significantly reduced by weather conditions. At current levels of solar generation market penetration, the predictable unavailability of solar generation from late afternoon until morning is only an issue in the late afternoon / early evening period when the grid experiences what is referred to as the ”duck curve”, when solar generator output drops as residential and small commercial demand increases. This issue is beginning to be addressed with the introduction of 4-hour battery storage systems. Otherwise, grid demand is low when solar generation is unavailable.

Most electric utilities experience peak demand in summer, though many are now developing somewhat smaller winter peaks. Solar is generally available during the summer peak, though it is less available during winter peaks due to reduced insolation resulting from lower sun angles, shortened daylight hours, increased cloudiness and snow accumulation on the collectors. Wind may become unavailable for periods of days when the weather is hot and still. Wind turbines may also become unavailable in winter due to icing of the blades, unless they are equipped with blade heating capability.

Utility regulation currently requires renewable generator output to be used when available, but utilities must be prepared to meet grid demand regardless of renewable generation availability. This issue becomes more critical as the market penetration of intermittent renewable generation increases.

 

Tags: Electric Power Generation, Electric Power Reliability

Incentives / Disincentives - ORIGINAL CONTENT


Society employs incentives and disincentives in numerous ways to influence the actions of various members of society. Sometimes these incentives and disincentives are soft and subtle, while at other times they are brutal and explicit.

The US federal government’s effort to force the transition of the US energy economy from a mixed-fuel economy to an “all-electric everything” energy economy based on renewable electricity generation and storage is becoming a brutal and explicit combination of incentives and disincentives.

Developers of renewable electricity generation projects are provided a variety of federal and state incentives which accelerate their development, reduce their installation costs, offset a portion of their operating costs; and, provide generation priority when renewable generation is available. Government also touts that these renewable generators produce lower cost energy and will result in reduced energy costs, to encourage the public to support the transition to renewables. Similar incentives are available for the purchase of electric vehicles; and, the federal government has begun supporting development of the public fueling infrastructure for electric vehicles.

While these various incentives have encouraged the adoption of renewable generation and electric vehicles, the Administration has determined that the process is not proceeding as rapidly as necessary to support the US “commitments” under the Paris Accords. Therefore, government has imposed numerous disincentives to coal production, consumption and export; and, taken numerous steps to limit exploration for and production of domestic oil and natural gas.

The federal government has established a schedule for the elimination of coal-fired electric generation, as well as a schedule for the elimination of all fossil-fueled electric generation. It has also established a schedule for elimination of all fossil fuel consumption in the US. These schedules would ultimately result in the elimination of the coal, oil and natural gas industries, with the questionable exception of oil and gas for use as chemical feedstocks. These schedules would also end production of vehicles powered by internal combustion engines (ICE), requiring full conversion to electric vehicle production by 2035.

Significant questions remain regarding the practicality of heavy-duty electric vehicles, including over-the-road tractors, construction equipment, farm equipment, railroad engines, ships and aircraft. There are suggestions that these applications could be fueled with renewable fuels such as bio-diesel, ethanol or hydrogen.

The federal government is also currently proposing incentives for the installation of electric heat pumps and for the replacement of gas appliances with electric appliances, to achieve an “all-electric everything” energy economy by 2050. These replacements would impose significant costs over and above the cost of the replacement appliances and equipment, including building electric service upgrades, building electric wiring modifications and utility grid capacity expansion. The “all-electric everything” grid conversion combined with expected energy demand and consumption growth through 2050 would require the electric grid to expand by a factor of approximately four by 2050.

Growing public resistance to industrial wind farms, industrial solar collector arrays and electric transmission infrastructure might require more aggressive federal and state government involvement in siting approvals, including eminent domain actions.

        Beatings will continue until morale improves.

 

Tags: Electric Power Generation, Electric Power Reliability, Electric Vehicles, Fossil Fuel Elimination / Reduction

Are fossil-fuel CO2 emissions good or bad? - Highlighted Article

  • 9/8/22 at 07:00 AM

 

From: Watts Up With That

By: Andy May

Date: August 30, 2022

 

Are fossil-fuel CO2 emissions good or bad?


This is the transcript, with minor edits to get it into blog post format, of my keynote speech to the Division of Professional Affairs, at the second International Meeting for Applied Geoscience and Energy Convention in the George R. Brown Convention Center in Houston on August 30, 2022.

In the great climate change debate between Princeton Professor, emeritus, William Happer and University of Melbourne Professor David Karoly, they were asked the following question by the moderator, James Barham:

“The IPCC’s official position may be summarized as making four claims: global warming is a well-established fact; it is anthropogenic; it is a major problem for humanity; and concerted global governmental action is required to combat it.”

James Barham and TheBestSchools.org


In this talk we will only cover a portion of the second and third parts of the question, which we rephrase as “Is burning fossil fuels and emitting CO2 and other greenhouse gases to the atmosphere a good thing, or a bad thing for humanity.” The other facets of the question are well covered in my latest book. Much of this talk is from Chapter 10.

In answer to the question, Professor Happer wrote:

“There is no scientific evidence that global greenhouse gas emissions will have a harmful effect on climate. Quite the contrary, there is very good evidence that the modest increase in atmospheric CO2 since the start of the Industrial age has already been good for the Earth and that more will be better.” (continue reading)

 

Are fossil-fuel CO2 emissions good or bad?

 

Tags: Highlighted Article

China’s “Long Game” - ORIGINAL CONTENT

China is aggressively pursuing economic development, including construction of numerous coal generating stations, steelmaking facilities and cement kilns. These actions, while inconsistent with the goal of the Paris Accords, are consistent with China’s Intended Nationally Determined Contributions (INDCs). China proposed to achieve maximum carbon intensity by about 2030 and to achieve carbon neutrality by 2060. The current construction programs are intended to massively increase carbon intensity by 2030, while the developed economies are aggressively reducing carbon intensity. China would thus become the globe’s primary producer of steel and cement.

China has also positioned itself as the primary supplier of many of the rare earth minerals required for the fabrication of the renewable generation and battery storage equipment essential to the development of a renewable plus storage electric grid. They are also enhancing this position through their “Belt and Road” initiative, funding and building infrastructure projects across Asia and Africa, including countries which also possess large deposits of the same rare earth minerals.

China would likely continue to be a willing supplier of critical raw materials, processed materials and finished renewable energy generation and storage equipment as the developed nations expand their dependence on these systems as they pursue Net Zero CO2 emissions by 2050. However, after about 2040, the developed nations will begin to face the necessity to replace wind turbines, solar collectors and electric storage batteries to keep their electric grids functioning. The greatly reduced availability of conventional electric generation capacity and the increased dependence on renewables and storage in the developed economies would provide China with substantial geopolitical leverage. (The approaches followed by Russia in dealing with energy supplies to Europe and the UK provide some indication of potential Chinese approaches to dealing with the renewable generation and storage materials and equipment needs of the developed nations.)

The developed nations of Europe and the UK have played into the hands of Russia by closing coal and nuclear generation facilities and becoming dependent on renewables and Russian natural gas, rather than developing their own natural gas reserves. They are currently paying the price for those decisions. Those nations, plus the US, Canada and Australia are playing into the hands of China by allowing themselves to become dependent on Chinese materials and equipment, rather than developing their own domestic resources and materials processing and equipment manufacturing capabilities.

The availability of lower-cost steel, glass and cement from China discourages investment in competing facilities in the developed nations. That availability, combined with energy shortages in Europe and the UK, is already leading to closures of heavy industry facilities in numerous European countries. Tightened CO2 emissions regulations in the developed nations will also discourage heavy industry continuation and expansion in those nations, leading to further dependence on China and other developing nations which are continuing to rely upon and expand coal consumption.

The US is currently playing into China’s hands by limiting domestic oil and gas exploration and production opportunities, thus squandering its energy independence.

China, meanwhile, can pursue its “long game”, developing geopolitical leverage to be used at its convenience. With sufficient leverage, it could simply choose to ignore its INDCs and assume global governance.

 

Tags: China, CO2 Emissions, Energy Storage / Batteries

Timing is Everything - ORIGINAL CONTENT

Timing is not a particular issue in market-driven product, process or service transitions. The existing technology applications remain in the market and the new technology applications enter the market and replace them over time. The new technology applications might experience supply constraints early, depending on the consumer demand for the new technology, but the existing technology remains available if required.

However, in the case of non-market driven product, process or service transitions, timing can become a critical issue. This is currently the case with the government-driven transition to “net-zero” CO2 emissions and an “all-electric everything” energy market. The federal government has established hard goals for elimination of coal-fired electric generation (2030), elimination of all fossil-fueled electric generation (2035) and elimination of all fossil-fueled energy end uses (2050). Meeting these hard goals without major economic disruption requires that the new products, processes and services that would replace the existing fossil-fueled applications be fit for their intended uses and available in sufficient quantities to replace existing applications and satisfy the demands of new applications.

Replacing coal-fired generation over the next 8 years would require installation of renewable generation with at least twice to more than 3 times the rating plate capacity of the coal-fired generators, depending on the renewable generators selected for the application, plus the long-duration storage infrastructure necessary to make the renewable generation capacity dispatchable. That long-duration storage is not currently commercially available, and it is not certain that it would be available in sufficient quantities to support renewable plus storage replacement of all of the existing coal-fired generation by 2030. In the absence of such storage, the coal-fired powerplants cannot be shut down without causing major economic disruption due to grid unreliability.

Replacing natural gas generating plants by 2035 faces the same challenges regarding the availability of long-duration storage; and, those challenges would be even greater if current nuclear generation stations are not permitted to continue operating or are not replaced.

The economy will face additional challenges, beginning immediately but growing most rapidly in the period from 2035 to 2050 as all remaining fossil-fueled end uses are transitioned to electric end uses. This process has already begun with the introduction and incentivization of electric vehicles, but would accelerate rapidly after 2035 due to federal prohibitions on the manufacture of vehicles with internal combustion engines. The process has also already begun with local prohibitions on the use of natural gas in new buildings, which then requires all-electric construction.

Finally, the renewable plus storage grid must also grow to match the energy demands of a growing population and economy and, must do so economically.

There are current fossil-fueled industrial processes for which there are currently no electric alternatives, including iron and steel production and the calcining of limestone to produce cement. These processes, in particular, are essential to the production and installation of renewable generators, so acceptable alternative processes must be developed and tested. Offshoring the current processes would accomplish nothing from a climate change standpoint, since the CO2 emissions would still occur.

 

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Alternative Approaches - ORIGINAL CONTENT

There are fundamentally two approaches to the adoption of new technology. The more common approach has been to introduce and market the product, process, or service embodying the new technology and allow the market to adopt the new technology based on its functional and/or economic advantages. The speed of the adoption process is a function of the relative importance and cost of the equipment or process and/or its relative desirability. The rise of air travel and the decline of rail travel is an example of this approach, as is the growth of air freight relative to rail freight. The rapid growth of package delivery services at the expense of the US. Postal Service is another example, as is the transition from snail-mail to e-mail.

The second approach combines law and/or regulation, government incentives, building codes and other non-market drivers. This approach is used by government to drive the adoption of new technology which is not perceived by the intended customers to offer sufficient functional and/or economic advantages to achieve market acceptance. DOE Appliance Efficiency Standards, DOT Corporate Average Fuel Economy Standards, vehicle emission standards are examples of this approach. In some cases this approach has been used to remove existing technology from the market before the replacement technology is “ready for prime time”, frequently referred to as technology-forcing requirements or standards.

A more aggressive version of the second approach is being pursued to transition the US energy economy from reliance on oil for transportation, natural gas and coal for power generation, natural gas and electricity for residential, commercial space heating, water heating, food preparation and coal, natural gas and electricity for industrial process heating. The federal government has established timelines for the elimination of coal and later natural gas use for electric power generation, and for the elimination of fossil fuel for all other uses.

The government is pursuing a goal of “all-electric everything” by 2050 to achieve net-zero CO2 emissions. In the process, government is forcing the installation of redundant intermittent renewable generation, which displaces a portion of the output of the remaining fossil-fueled generation without replacing that generation capacity, since it is needed to support the grid when the intermittent generation is not functioning or is operating below rated capacity. This addition of redundant capacity increases overall generation investment and thus increases electricity cost, as does the management of the intermittent redundant capacity.

The ”all-electric everything” energy economy would require an electric grid with 3-4 times the capacity of the current grid, and with storage capacity sufficient to replace the conventional generation which currently supports the renewable portion of the generation fleet as well as to provide support for the additional renewable generation serving the greatly expanded “all-electric everything” grid. This approach is technology-forcing, in that the storage technology necessary to replace conventional generation as support for renewable generation is not currently commercially available. It is also technology-forcing since a reliable renewable plus storage grid without conventional generation support has not been demonstrated.

 

Tags: Net Zero Emissions, Regulation, Efficiency Standards, Electric Power Generation

“Orderly Liquidation” - ORIGINAL CONTENT

President Biden spoke about his approach to destroying the US oil industry during a primary campaign debate in 2020. The approach focused on depriving the industry of supply through a combination of banning new exploration and drilling on federal lands and the application of new laws and regulations making industry operations more difficult and more expensive.

The Biden Administration has aggressively pursued this approach over the past 18 months, as documented here. The actions taken by the Administration have had a predictable effect on both gasoline and Diesel prices and availability. It is ludicrous to assume that a commitment by the federal government to destroy an industry would not create turmoil within the industry and among its customers.

The Administration has reacted to the resulting price increases and supply shortages by blaming the US oil industry and accusing it of price gouging; and, seeking production increases from OPEC. The Administration has even approached Venezuela and Iran about supplying additional oil. Only after these approaches to foreign suppliers has the Administration begun encouraging the US industry to increase production, while still maintaining the intent to put the industry out of business.

The US oil industry has modestly increased production from existing fields, but has been reluctant to invest in new E&P activity in the face of the Administration’s actions and threats of future actions. The Wall Street Journal recently described the industry’s approach as an “orderly liquidation” of current assets, including using increased revenues resulting from higher demand and prices to fund share buybacks and distributions to stockholders. This approach by the industry appears to be a reasonable exercise of fiduciary responsibility to its shareholders.

It seems likely that this “orderly liquidation” approach will spread to other energy industry participants under similar Administration threats to their futures. The owners and operators of coal mines and coal-fired power plants are faced with termination of their operation by 2030 and are unlikely to make any significant investments in their facilities in the interim. They would also likely terminate operations if faced with the necessity of major facility repairs or deteriorating market conditions. It is also unlikely that state utility commissions would approve incremental investments in coal facilities owned by utilities under their jurisdiction.

It also seems unlikely that either utility or non-utility generators would invest in new natural gas combined-cycle gas turbine (CCGT) generators, since their operations would be required to cease by 2035 to comply with the Administration’s goals. New CCGT generator facilities would have to be fully depreciated over 10 – 12 years, or 25-30% of their useful lives. Such rapid depreciation would further increase the cost of the electricity they generated.

There is no indication that such orderly liquidations would be offset by orderly installation of replacement facilities, particularly since the long-duration electricity storage technology necessary to render renewable generation facilities dispatchable is not currently commercially available, nor is there any schedule for its commercial availability of any indication of its likely cost and performance.

 

Tags: Electric Power Generation, Fossil Fuel Elimination / Reduction, Net Zero Emissions
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