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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.

 

The Myth Of Replacing Fossil Fuels - Highlighted Article

  • 7/27/23 at 07:00 AM

 

From: Watts Up With That

By: Willis Eschenbach

Date: July 3, 2023

 

The Myth Of Replacing Fossil Fuels

 


A hat tip to the commenter on one of my posts who was kind enough to give me a heads-up as follows:

Mark BLR June 30, 2023 2:23 am

BP handed over the production of their “Statistical Review of World Energy” to an outfit called the “Energy Institute” at the end of last year.

They released the new version, with annual data updated to 2022, on Monday (4 days ago).

The latest (.xlsx) spreadsheet can be downloaded from the following URL :
https://www.energyinst.org/statistical-review/resources-and-data-downloads

Since I had the new data, I thought I’d update the following graphic that I made a few years ago, which only covered up to 2019.

Figure 1. The 2019 version of energy consumption.

When I put that out, people were saying things like “You don’t understand. Solar and wind are growing exponentially! Just wait a few years and you’ll see!”

So, having now waited a few years, here’s the 2022 version. This time I’ve split out fossil fuels as a separate line. I’ve also added a line for traditional biomass. All the data is from the BP spreadsheet linked above except traditional biomass, which is from Our World In Data.

Figure 2. The 2022 version, including traditional biomass and fossil fuels as separate lines.

There are some very interesting things about this graphic. First, all the solar and wind in the world combined doesn’t provide even a third of the energy we get from wood and dung. (continue reading)

 

The Myth Of Replacing Fossil Fuels

 

Tags: Highlighted Article

Six Phases of a Project - ORIGINAL CONTENT

Six Phases of a Project

  1. Enthusiasm
  2. Disillusionment
  3. Panic
  4. Search for the guilty
  5. Punishment of the innocent
  6. Praise and honors for the non-participants

This “smart joke” apparently originated in computer science in the 1970s and spread rapidly from there. It provides a humorous perspective on the history of a failing project and the fallout from its failure. It also provides a perspective from which we can analyze the current state of the “Net Zero by 2050” project.

The Net Zero Emissions by 2050 Scenario is an International Energy Agency scenario which identifies a potential path for all nations of the globe to achieve net zero annual CO2 emissions by 2050 to achieve the objectives of the Paris Accords. The almost universal agreement to the objectives of the Paris Accords by UN member nations led to great enthusiasm regarding potential future emissions reductions.

“The Net Zero Emissions by 2050 Scenario is built on the following principles:

  • The uptake of all the available technologies and emissions reduction options is dictated by costs, technology maturity, policy preferences, and market and country conditions.
  • All countries co-operate towards achieving net zero emissions worldwide. This involves all countries participating in efforts to meet the net zero goal, working together in an effective and mutually beneficial way, and recognising the different stages of economic development of countries and regions, and the importance of ensuring a just transition.  
  • An orderly transition across the energy sector. This includes ensuring the security of fuel and electricity supplies at all times, minimising stranded assets where possible and aiming to avoid volatility in energy markets.”

Disillusionment followed enthusiasm as night follows day as the violation of the above principles developed. Issues of the cost of technologies and emissions reduction options were offset by government subsidies and incentives, technology maturity was replaced by technology forcing regulations and market and country conditions were ignored. The only unaffected component of the first principle above was policy preferences.

The all-country cooperation called for in the second principle above succumbed to economic development priorities in the developing nations and disagreements over the requirements of a just transition. China, India, Indonesia and numerous African nations prioritized economic development over net zero pursuit and chose to base much of their economic development on increased use of coal and other fossil fuels. There are also continuing concerns over development funding from the developed nations to the developing nations.

The orderly transition across the energy sector fell prey to the intermittency of renewable generation, the immaturity of the storage technologies necessary to support renewable generation during periods of low/no renewable generation, the premature closure of conventional generation capacity, the Russian war in Ukraine and the US Administration war on the fossil fuels industries. Significant volatility in the energy markets in Europe, North America, Japan and Australia has resulted.

The failure of the IEA principles has led to panic in Europe and the UK as energy supplies have decreased and energy prices have increased rapidly. Numerous European industries have shut down or reduced production as the result of energy supply shortages and rising energy prices.

The political classes in the developed nations have focused the search for the guilty on Russia, though there is plenty of guilt to go around and they will ultimately share in it.

The punishment of the innocent is focused on the citizens and industries in the developed nations exposed to rising energy prices and the possibility of major energy shortages.

So far there has been no apparent effort to provide praise and honors for the non-participants, whoever they are.

 

Tags: Net Zero Emissions, CO2 Emissions

RGGI Investment Report Lessons for Cap and Invest Programs - Highlighted Article

  • 7/20/23 at 07:00 AM

 

From: Watts Up With That

By: Roger Caiazza

Date: July 2, 2023


RGGI Investment Report Lessons for Cap and Invest Programs


Cap-and-invest emission reduction programs are supposed to effectively reduce emissions and generate revenues.  The Regional Greenhouse Gas Initiative (RGGI) is an electric sector cap-and-invest program in the NE United States that can provide insight into the potential of these programs.  This post reviews the latest RGGI annual Investments of Proceeds report to determine how well the investments are producing emission reductions and the lessons that should be kept in mind from the observed results.

Background

RGGI is a market-based program to reduce greenhouse gas emissions. According to RGGI:

"The Regional Greenhouse Gas Initiative (RGGI) is a cooperative effort among the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, and Virginia to cap and reduce power sector CO2 emissions.

RGGI is composed of individual CO2 Budget Trading Programs in each participating state. Through independent regulations, based on the RGGI Model Rule, each state’s CO2 Budget Trading Program limits emissions of CO2 from electric power plants, issues CO2 allowances and establishes participation in regional CO2 allowance auctions. (continue reading)

 

RGGI Investment Report Lessons for Cap and Invest Programs

 

Tags: Highlighted Article

(in)Dependence Day 2023 - ORIGINAL CONTENT

The United States energy independence achieved in 2020 has been sacrificed on the altar of climate change, terminated with malice as part of an effort to “end fossil fuels”. This effort would ultimately make the entire US energy economy dependent upon intermittent renewable generation, some form of energy storage plus existing nuclear, hydro, geothermal, biomass generation and as yet undefined “Dispatchable Emission-Free Resources”.

The ”end fossil fuels” effort has proceeded faster on the supply side than on the demand side, causing the US Administration to go “hat in hand” to OPEC, Venezuela and even Iran seeking to arrange imports of foreign oil to fill the growing gap between domestic supply and demand. This Administration effort has not been well received by those potential suppliers. OPEC has recently announced a 1 million barrel per day reduction in production. US dependence, in this case, is amplified by sales of oil from the Strategic Petroleum Reserve which have left the SPR dangerously depleted.

The transition to a largely renewables plus storage energy economy increases our dependence on weather, as well as on foreign supplies of key materials required for the manufacture of wind turbines, solar collectors and storage batteries. Many of these materials are rare earth minerals, most of which are not currently available in the quantities which would be required to repower the US energy economy and some of which might not ever be available in those quantities. Many of those minerals are primarily controlled by nations which are unfriendly to the US, leaving us dependent on our enemies for our future wellbeing.

The requirement for energy storage in the renewables plus storage energy economy leaves us dependent upon technology which, for the most part, does not exist today and might never exist. The large seasonal variation in wind and solar generator output creates a requirement for long-duration storage capable of storing energy over a period of months when generation is in surplus for use during months when generation is inadequate to meet grid demand. The only established technology for such storage currently in use is pumped hydro storage. However, there has been major environmentalist resistance to the construction of pumped hydro storage facilities, particularly flow of stream facilities which require damming existing waterways.

Elimination of fossil fuel use also faces major challenges in several industries for which there is no existing electric alternative process, such as the production of iron and the calcining of coal. The impact of the “end of fossil fuels” on industrial processes which rely on fossil fuels for their process chemistry, on the synthetic fertilizer industry and on the production of the thousands of products made from derivatives of oil remains uncertain.

Our growing dependence is purportedly driven by a perceived need to avoid the adverse effects of climate change resulting from the emissions of CO2 and CH4 from fossil fuel production and use. However, numerous other nations of the world are increasing their consumption of fossil fuels in the interests of economic development and energy independence. As a result, our growing dependence on weather, renewable energy and energy storage, the increasing cost of energy in our economy and the decreasing reliability and resilience of our electric grid will have no measurable effect on future climate change, but will likely result in economic de-development.

“The urge to save humanity is almost always a false front for the urge to rule.”

H. L. Mencken

 

 

Tags: Electric Power Generation, Energy Storage / Batteries, Green Energy Transition, Energy Independence

Technology Forcing - ORIGINAL CONTENT

Government regulators periodically issue regulations which they are fully aware cannot be met with currently available technology; that is, the regulations force the development of the new technology needed to satisfy them within some defined time frame. In some cases, the regulation is expected, not to result in new technology development and implementation, but rather to drive non-compliant equipment and processes from the market when the technology forcing is unsuccessful or the resulting technology is uneconomic.

Government’s climate change efforts include several cases of technology forcing, some clearly intended to drive equipment and processes from the market. One very recent example is US EPA’s proposed tightening of PM 2.5 emission standards to a level which would make compliance of coal-fired generating stations either impossible or uneconomic. The Administration goal to terminate coal-fired electric generation by 2030 virtually guarantees that, even if complying technology became available, it would not be economically justified to install it in a power plant required to cease operation in 2030.

Similarly, requirements to reduce CO2 emissions from natural gas combined-cycle powerplants by applying high level Carbon Capture, Utilization and Storage (CCUS) systems would likely drive most or all such generators from the market by the administration’s 2035 goal, since design and installation cost recovery would be virtually impossible over the next 12 years. CCUS would significantly reduce power plant capacity and efficiency and increase operating costs.

The electricity generating system intended to replace coal and natural gas generation is also facing technology forcing. Wind and solar generators operate intermittently and require electricity storage to provide continuous output. There are currently batteries which can provide output smoothing for wind and solar generation for periods of approximately 4 hours. Research is underway on batteries capable of operation over approximately 8 hours. However, the only technologies capable of long-duration support for intermittent generators are pumped hydro and compressed air storage.

The largest current pumped hydro storage facility in the US, the Bath County Pumped Storage Station (BCPSS) has a generating capacity of 3 GW and a storage capacity of 24 GWh. Therefore, it could support intermittent generation with a capacity of 3 GW for a period of 8 full load hours. It would require 15 such storage facilities to replace 3 GW of wind generation with a 50% capacity factor through a 10 day “wind drought”. There has been significant resistance to the construction of such large pumped hydro storage facilities in the US.

Another example of technology forcing is EV batteries. Current light duty EVs are range limited, particularly in very hot and very cold weather. Medium duty trucks and transit buses and similar vehicles require larger batteries to permit full day operation without recharging. Long-haul, over-the-road tractors require sufficient battery capacity to haul maximum legal loads for the maximum number of miles and hours their drivers are permitted to operate. These requirements must be met by 2035 if production of ICE vehicles of those classes is to be banned then.

Finally, while there has been some development effort regarding battery-powered railroad engines, it appears likely that electrification of freight rail will follow the development of electrified passenger rail, drawing power from overhead catenaries using pantographs.

While technology forcing can be effective, there is significant risk to the overall enterprise if the required technology does not become available on the required schedule or its capabilities do not meet the required performance parameters.

 

Tags: Technology Forcing, Fossil Fuel Elimination / Reduction, Electric Power Generation, Energy Storage / Batteries

Social Cost of Preferences - ORIGINAL CONTENT

Preference :the act, fact, or principle of giving advantages to some over others
:priority in the right to demand and receive satisfaction of an obligation

The federal government, state governments and state utility regulators have established preferences for wind and solar electric generators, requiring that they be the first generators in line to supply power to the grid when weather conditions permit, while essentially freeing them from the obligation to serve since they are understood to be intermittent generators which cannot be dispatched. They are “source of opportunity” power generators, used when they are available and replaced by conventional generation when they are not available.

Wind and solar are widely acclaimed as being the lowest cost source of electricity. They are also preferred because their operation does not result in CO2 emissions which might contribute to climate change. The availability of production tax credits allows wind and solar generators to consistently bid low wholesale prices into utility, ISO (Independent System Operators) and RTO (Regional Transmission Organizations) supply bidding processes. However, their intermittency requires the grids they serve to provide smoothing services and to maintain rapid response generation capacity to compensate for longer interruptions. These services and generation resources add to the real cost of wind and solar generation.

The output of wind and solar generation facilities displaces a portion of the generating capacity of conventional generation in the generation mix. However, the intermittency of wind and solar generation require that conventional generation capacity be available to meet grid demand during periods when wind and solar are not generating, or are not generating at capacity.

Utilities, ISOs and RTOs must maintain operating conventional generation capacity to replace the output of wind and solar facilities when they are not generating, as well as capacity to replace the capacity of the largest conventional generator in operation should it experience an unscheduled outage to assure grid reliability.
 
As the generating capacity of wind and solar increase, the operating outputs of the conventional generators are decreased, though they must remain in operation, ready to satisfy grid demand if wind and/or solar generator output decrease. This increases their cost of operation per MWh generated. The wholesale electricity price is determined by the cost of the next unit of capacity required to meet grid demand. Therefore, as the cost of operation of conventional generation increases, the cost of wholesale power also increases, as does the profitability of wind and solar generation.

Most of the coal-fired conventional generation capacity is utility owned. However, much of the natural gas combined-cycle generation capacity is owned and operated by merchant generators. The utilities are generally able to negotiate rates which maintain the profitability of their coal generation assets. However, the merchant generators might require proportionally higher prices to maintain profitability, further moving them down the dispatch order and further increasing wholesale electricity prices.

The combination of these factors are the reason why intermittent wind and solar generation, while supposedly less costly than conventional generation, have not resulted in reduced electricity rates as promised.

 

Tags: Wind Energy, Solar Energy, Power Grid

Social Cost of Mandates - ORIGINAL CONTENT

Broken Window Economics: an event that seems to be beneficial for those immediately involved can have negative economic consequences for many others.

The US and most countries have energy economies based on fossil fuels, plus contributions from nuclear, hydro, geothermal and biomass. The US and the other OECD (Organisation for Economic Co-operation and Development) countries have announced goals to replace the fossil fuel uses in their economies with renewable generated electricity across the entire spectrum of energy uses. These goals have been accompanied by mandates to eliminate specific fossil fuel end uses for electric generation, to halt the production of internal combustion engine (ICE) vehicles and to replace all fossil fuel end uses by dates certain.

These mandates require the retirement of existing electric generation, vehicle production and appliance production facilities, many before the end of their useful lives and the construction and outfitting of new, replacement facilities. The Biden Administration has argued that these efforts would result in the creation of millions of new, high paying union jobs, though they would also likely result in the elimination of a similar number of similar jobs.

The US currently has a fleet of 200 GW of coal generation capacity, 50 GW of which is scheduled to be retired by the 2030 mandated retirement goal for coal generation. The remaining 150 GW has been scheduled to be retired over the period from 2030 – 2048. Early retirement of these coal plants would strand approximately $35-40 billion of undepreciated private generation assets. It would also strand approximately $30 trillion of coal resources. It is uncertain how the owners of these assets would be compensated for their forced abandonment. Those costs would represent a societal cost of the mandate to close the generating facilities and the resulting abandonment of the coal resources.

The US currently has a fleet of 500 GW of natural gas generation capacity. Approximately 400 GW of that capacity is less than 30 years old, which is a common mid-life for natural gas generators. This suggests that more than 200 GW of natural gas generating capacity would be forced out of service by the 2035 mandated retirement goal for gas generation. Early retirement of these plants would strand another $35-40 billion of undepreciated private generation assets. Again, it is uncertain how the owners of these assets would be compensated for their forced abandonment. These costs would also represent a societal cost of the mandate to close the generating facilities and the resulting abandonment of billions of dollars of natural gas resources and underutilization of natural gas pipeline capacity.

The US also has tens of billions of dollars of automotive manufacturing facilities which the owners would be forced to retire and replace with facilities designed to manufacture EVs and EV batteries, at the same time stranding several billion of dollars of oil resources and oil refining capacity.

Investments in ICE vehicles and natural gas appliances and equipment would be unlikely to be affected by the mandates, since they would likely have outlived their usefulness by 2050.

 

Tags: Coal, Internal Combustion Engine (ICE)

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

  • 6/8/23 at 07:00 AM


From: Institute for Energy Research

By: Thomas J. Pyle

Date: May 23, 2023

 

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


President Biden and the Democrats in Congress have a plan for American energy: make it harder to produce and more expensive to purchase. Since Mr. Biden took office, his administration and its allies have taken over 150 actions deliberately designed to make it harder to produce energy here in America. A list of those actions, which includes a few high-profile actions taken in states like New York and California, appears below. A list of those actions appears below. A PDF of the full list is available to download here.

___________________________

On January 20, 2021,

  1. Besides canceling the Keystone XL pipeline,
  2. President Biden restricted domestic production by issuing a moratorium on all oil and natural gas leasing activities in the Arctic National Wildlife Refuge.
  3. He also restored and expanded the use of the government-created social cost of carbon metric to artificially increase the regulatory costs of energy production of fossil fuels when performing analyses, as well as artificially increase the so-called “benefits” of decreasing production.
  4. Biden continued to revoke Trump administration executive orders, including those related to the Waters of the United States rule and the Antiquities Act. The Trump-era actions decreased regulations on Federal land and expanded the ability to produce energy domestically.

On January 27, 2021, (continue reading)

 

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

 

Tags: Highlighted Article

Social Cost of Subsidies - ORIGINAL CONTENT

Subsidy: a grant by a government to a private person or company to assist an enterprise deemed advantageous to the public.

The US federal government, several state governments and numerous local governments offer subsidies to assist various aspects of the energy system transition being undertaken in response to climate change. These subsidies are offered for wind and solar generation, electricity storage, electric vehicles, electric vehicle charging stations, and electric appliances and equipment. These subsidies reduce the individual transaction costs for the purchasers of the various devices. However, they also increase the societal cost of the transition.

Wind and solar generation facilities, whether for grid-scale applications or site-specific applications, displace some portion of the output of the existing electric power generation fleet during periods when the wind is blowing and/or the sun is shining. The existing power generation fleet provides the remainder of the grid demand when wind and solar generation are operating and all of the grid demand when wind and solar generation are not operating. Therefore, the subsidies provided for wind and solar generation facilities incentivize the installation of redundant generation facilities, increasing the total cost of the electric generation fleet and thus, the societal cost of electricity.

The cost of wind and solar facilities includes both equipment and installation costs, which are borne by the owners of the facilities. The subsidies available reduce the owners' transaction costs, but not the real cost of the facilities. The subsidies provided by government add to the societal costs of the facilities. These subsidies must be funded either by offsetting reductions in other government programs, increased taxation or incremental government borrowing.

The available subsidies for electric vehicles (EVs) function similarly. The vehicle manufacturer offers the EV to the market at a price which includes its costs and profit. The subsidies reduce the purchasers’ transaction costs, but not the cost and price of the vehicle. The subsidies add to the societal cost of the transaction. For example, an EV with a MSRP of $60,000 is sold to the purchaser at that price. The purchaser then receives a tax credit of $7,500. This reduces the purchaser’s net transaction price to $52,500,  but increases the societal cost of the transaction to $67,500. Again, these subsidies must be funded either by offsetting reductions in other government programs, increased taxation or incremental government borrowing. The same is the case for the subsidization of EV charging infrastructure.

The recent subsidies offered for the purchase of electric appliances and equipment under the “Inflation Reduction Act” are intended to incentivize the purchase of electric heat pumps, water heaters, ranges, laundry dryers and similar residential and commercial equipment. These subsidies are intended to “kick-start” the transition to “all-electric everything” intended by 2050.

Most of the government funding for subsidies to support the transition to renewable electricity generation and “all-electric everything” is coming from incremental borrowing, adding to the existing federal deficit. This borrowing injects additional money into the economy, likely increasing rather than reducing inflation.

 

Tags: Electric Vehicles, Electric Power Storage

Goals & Plans - ORIGINAL CONTENT

“A goal without a plan is just a wish.”, Antoine de St.Exupery

“I love it when a plan comes together.”, John (Hannibal) Smith

The Biden Administration has announced a series of goals, leading to an overall goal of a Net Zero US economy by 2050. The intermediate goals include eliminating coal-fired electric generation by 2030, eliminating gas-fired electric generation by 2035, ceasing production of internal combustion engine vehicles by 2035 and moving to an “all-electric everything” energy economy by 2050. These goals are to be accomplished through a combination of executive fiat and regulatory restriction. One key planning element in support of these goals involves starving the oil and gas industries of supply through cessation of drilling and production permits and blocking of new pipeline construction, thus destroying legal industries and their participants and depriving their customers of future supply. Another key planning element in support of these goals involves incentivizing and subsidizing wind and solar generation, electricity storage and electric vehicles.

What is lacking in this picture is a comprehensive plan. For example, the goals of eliminating coal generation by 2030 and gas generation by 2035 are not accompanied by a plan element intended to assure that adequate wind and solar generation, electricity storage and transmission infrastructure are in place to maintain grid reliability and resilience as the conventional generators are removed from service.

There is also no plan element intended to assure that, as natural gas supplies deplete as the result of production constraints, sufficient natural gas remains available to supply the expected increased natural gas demand for power generation as coal generation capacity is removed from service. There is also no plan element intended to assure that sufficient natural gas remains available to meet residential, commercial and industrial customer demand during the transition to the “all-electric everything” energy economy.

There is no plan element intended to assure that electric generation, transmission and distribution capacity increase timely to accommodate the growth of electric demand and consumption resulting from economic and population growth and the transition to the “all-electric everything” energy economy by 2050.

There is also no plan element intended to assure that sufficient gasoline and diesel fuel remain available to supply the needs of the range of ICE vehicles remaining in service post 2035, when the goal is to terminate ICE vehicle production.

These missing plan elements appear crucial to the successful accomplishment of the Administration’s goals. It appears that the Administration plans to rely on the function of a regulated and constrained energy market to deal with these missing elements of the plan as the market rapidly transitions from a multi-fuel market with regulated competition to a renewable generation plus storage regulated monopoly.

The schedule for this transition appears to assume that the currently non-existent technology required for the Administration’s goals to be achieved will become available timely. This technology includes medium-duration and long-durations electricity storage and what are referred to a Distributed Emission-Free Resources (DEFRs) for electric generation, as well as fossil-free technologies for iron, steel and cement production.

If there is no Plan “A”, is there likely to be a Plan “B”?

“No battle plan survives contact with the enemy.”, Helmuth von Moltke

 

Tags: Net Zero Emissions, Power Grid, Clean Power Plan, Renewable Energy

Fauci, Fear, Balance and the Grid - Highlighted Article

  • 5/25/23 at 07:00 AM

 

From: Climate Etc.

By: Russ Schussler

Date: May 8, 2023

 

Fauci, Fear, Balance and the Grid


Reflecting on the U.S. response to the covid pandemic, Dr. Fauci provides some important insights on managing complex risks – with relevance to climate change and the electric grid transition.

Dr. Fauci discussing past covid measures was recently quoted as saying,

“(W)e looked at it from a purely public-health standpoint. It was for other people to make broader assessments—people whose positions include but aren’t exclusively about public health. Those people have to make the decisions about the balance between the potential negative consequences of something versus the benefits of something.”

I was surprised to hear that Dr. Fauci did not think that public health should have been in total control of the pandemic response.  But he is right. We needed diverse experts providing input and impacting policy choices – some who worry about public health, others who worry about individual health, others who worry about children, and others well versed on the economic impacts of it all.  Doing everything possible to stop the spread of covid, all other costs and consideration be damned, should have been expected to reduce the overall well-being of society and provide grossly suboptimal outcomes.  Focusing solely on covid risks was likely counterproductive even for those most at risk from covid.

In the U.S., the balanced path Dr. Fauci is now advocating was not seriously pursued during the pandemic. With the Covid panic, it seemed public health took over with one over-riding goal.  Advocates for individual health and individual health care found few available forums and inroads to appeal to and  impact policy makers. Appearing to be against the central narrative of those in power may have had severe consequences for individuals and organizations. In hindsight, many see that balancing competing views and values would have better served us all. In focusing so exclusively on the threat of covid, we increased our risk from so many other threats.  Many now understand that our “best” scientific understandings should be subject to challenges.  It certainly seems we needed “other people” to speak up, but those voices did not find the platforms they would need to influence policy and direction. (continue reading)

 

Fauci, Fear, Balance and the Grid

 

Tags: Highlighted Article

Silence of the Grid Experts - Highlighted Article

  • 5/18/23 at 07:00 AM

 

From: Climate Etc.

By: Russ Schussler

Date: May 3, 2023


Silence of the Grid Experts


There are many reasons why grid experts within the electric utility industry have not spoken out when unrealistic “green” goals were being developed and promoted over the last 20 years or so. A more open debate during this period might have helped provide a  more realistic foundation for future development.  This posting describes some reasons as to why at the corporate level electric utilities did not speak out more in defense of grid reliability.  Collectively these factors tended to eliminate grid experts from playing any role in the development of policies impacting the grid.


Speaking Out Risked Negative Consequences

Utilities have many stakeholders with varying degrees of power.  Utilities depend on good relations with Public Service Commissions, other regulators, consumers and policy makers. The stereotype of electric utilities as uncaring, selfish, greedy destroyers of the environment tends to make utilities very cautious and careful in critiquing anything perceived as “green”.  The media and press attention from any such statements would likely not be favorable.

Utilities need support to acquire right-of-way, for financing, for cost-recovery and to avoid adverse legislation. Poor press and the associated public disapproval loomed as strong disincentives for speaking out.  Furthermore, as will be discussed later, expressing concerns over emerging reliability issues, could be interpreted by some as implying that perhaps you were not as capable as others appear to be. (continue reading)

 

Silence of the Grid Experts

 

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Renewable Experts: Undeterred and Unmoved by Failed Ideas - Highlighted Article

  • 5/11/23 at 07:00 AM

 

From: Climate Etc.

By: Russ Schussler

Date: April 17, 2023


Renewable Experts: Undeterred and Unmoved by Failed Ideas


“Green” ideas and their proponents can create problems.  Like the antagonist in Terminator 2, green arguments and proponents don’t go down easily.  With serious challenges, they retreat, hibernate sometimes, morph, transform and come back.  It’s hard to argue with many “green” energy ideas.  They are often huge in scope but severely limited in details.  Focusing on a couple key factors and ignoring  or leaving so much to be worked out later.  Painfully naïve or unaware of so many factors associated with the provision of energy, feedback and often even human behavior.   They see the flaws in current efforts, but are blind to the drawbacks which will necessarily emerge from their proposals.  The offer conjectures with a lot of dots to still be connected. They speak of things that may be possible, without any handle on the probabilities.


Usually, “green” ideas are packaged with threats of doom, promises of superior technology or both.   The media are drawn to both those themes and many policy makers are attracted as well.   Attention is a great thing for new ideas.  The themes of urgency and the scope of change,  gives these ideas more weight and seeming gravitas.  Unfortunately, the needed incentives to dig down and look critically as these ideas are generally lacking. Woefully, those promulgating “green” ideas don’t have much incentive for engaging with their critics or broadening their understandings. They generate the feeling that we need to move forward with the big, new important thing – no time for distractions. (continue reading)

 

Renewable Experts: Undeterred and Unmoved by Failed Ideas

 

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