CLEANER ENERGY

 

 

This memo consolidates a three-blog series posted in May-June 2012, which lays out a strategy for transitioning to cleaner energy over time.  The content has been modestly edited, but without change in substance.  

 

Section

Page

Coal power is out of style

1

Coal succession planning

7

Kill coal, lights out

14

 

5/28/12 – Coal power is out of style

 

The president expressed his distaste for coal-fired power plants during the 2008 campaign, and his administration has acted accordingly.  Obama’s plan to kill coal, Christopher Prandoni, Townhall.com, 5/22/12.

 

. . . President Obama charged Environmental Protection Agency Secretary Lisa Jackson with the task of regulating America’s coal industry out of existence. The EPA’s strategy is simple: impose punitive, costly regulations on existing coal plants and mandate unattainable emissions standards on future coal power plants. http://bit.ly/LjeeVg

 

There are valid reasons for transitioning away from coal, which currently provides some 40% of US electricity (not an energy source per se, but a medium for distributing it), and coal’s declining role in the mix is driven by market economics as well as by environmental considerations.

 

Coal power should not be abandoned, however, without thoughtful consideration of what would take its place.  The economic consequences of “ready, fire, aim” policymaking could be disastrous.  EPA to raise electricity prices, risk blackout, Romina Boccia, Heritage.org, 12/6/11.  http://bit.ly/tUNUGy

 

Bottom line, let’s consider the issues objectively instead of rejecting the “war on coal” just because the Environmental Protection Agency (not our favorite federal regulator) is leading the charge.  Not only are the choices and tradeoffs complex, but they will be affected by future developments that cannot be predicted with assurance.

 

Background – Here are some observations about the rise and fall of coal from a journalist who has written about energy and the environment for the past three decades.  A recurring point in the story (seemingly obvious, yet often overlooked) is that energy prices matter.  Terrestrial Energy, William Tucker, Bartleby Press (2008).  http://www.s-a-f-e.org/terrestial_energy.htm

 

Sixteenth-century England experienced an energy crisis because “the forests, which had provided wood and fuel since time immemorial, were beginning to disappear” as people struggled to stay warm during the “Little Ice Age.”  The solution was to burn coal, which was much cheaper than firewood, even though it turned the London air into a “foul and pestilent canopy of vapors.”  TE, pages 62-64.

 

One thing led to another, and the Industrial Revolution began two centuries later.  Manufacturing mills powered by coal vastly out-performed mills powered by wind or water, although the resulting environmental problems in English cities “were so appalling that many observers believed humanity was spiraling toward destruction.” TE, page 65.

 

Given the technological edge coal power provided for manufacturing and soon transportation (railroads and steamboats), its use inevitably spread to other countries, notably Germany and the United States. TE, pages 66-69.

 

Generating electricity from coal provided a new way to carry and distribute energy for a variety of tasks.  Thomas Edison opened the first electrical generation station in 1882.  TE, page 69.

 

Air pollution from coal-fired plants - e.g., sulfur dioxide (SO2), nitrous oxides (NOX), and particulates (both large particles, which can be filtered effectively with today’s technology, and smaller ones that cannot) - was mitigated by burning anthracite vs. bituminous coal, locating the plants in remote locations, developing more efficient boilers, etc.  It continued to be a serious problem, however, especially as coal was also the primary source of residential heat. In 1940, “King Coal” was producing more than half of America’s energy. TE, pages 69-71.

 

After World War II, the drawbacks of coal power attracted growing attention.  For example, a temperature inversion over London in December 1952 caused a “Black Fog” that resulted in 4,000 deaths.  There were similar, but less deadly events in New York City, and coal mining safety hazards also became more widely known.  TE, pages 72-73.

 

Remedial legislation was enacted: 1955 National Air Pollution Control Act, 1969 Federal Coal Mine Health and Safety Act, 1970 Clean Air Act (which, among other things, created the EPA).  TE, pages 73-74.

 

Early attempts to reduce coal power emissions were somewhat tentative and not particularly effective.  For example:

 

# The Clean Air Act mandated that all new coal plants be equipped with sulfur scrubbers, but exempted any coal plant licensed before 1973.  Utilities rushed to apply for licenses and sat on them.  In the 1990s, coal plants were still being built without scrubbers, and in 2008, 60% of coal plants still did not have them.  TE, page 74.

 

# Saying “the solution to pollution is dilution,” the EPA encouraged the construction of smokestacks that would send power plant emissions high into the atmosphere.  “Only later was it realized the sulfur dioxide was returning to earth as acid rain.” TE, page 77

 

Environmental activists proposed a different strategy: switch from coal to low sulfur oil power plants. “From 1965 to 1971, coal consumption dropped for the first time in the nation’s history,” while “oil consumption surged.” After the 1973-74 Arab Oil Embargo, however, the goal became cutting oil consumption and the transition to oil power plants was abandoned.  TE, page 75.

 

President Carter proposed increased reliance on coal power in 1977, while imposing new restrictions on nuclear power. Thirty years later, the US was burning over a billion tons of coal a year, twice the consumption in 1976.  TE, pages 75-76

 

An oft-told regulatory success story is the “cap and trade” limits on SO2 that finally got these emissions under control.  Actual costs of meeting the new and tougher limits were far lower than projected, and the results handily exceeded the goals set in 1990. However, improvement was primarily accomplished by switching to natural gas for new electrical generating capacity (95% between 1990 & 2008), not by developing and installing better clean-up technologies.  TE, pages 77-78.

 

After 2000, natural gas grew scarcer and market prices quadrupled.  Many gas plants were idled, and coal once again became the cheapest option for utilities.  TE, page 78. 

 

Tucker’s book was published before the “fracking” boom for extracting gas from shale deposits.  Gas has become an economical fuel for power plants again, and utilities are responding accordingly. US coal generation drops 19 percent [from 45% to 36% of the total] in one year, Stephen Lacey, EnergyBulletin.net, 5/15/12.  http://bit.ly/JPZflV

 

Reliability – A key factor in choosing power sources is whether they will be available when and as needed to meet the needs of the households and businesses on the electric grid.  Coal, oil, natural gas, and nuclear power can be generated continuously (aside from maintenance shutdowns), so they are reliable (aka dispatchable).  The principal forms of “renewable energy,” wind and solar, are only available on an intermittent basis, so they are not reliable. Accordingly, wind and solar power must be “backed up” by an equal amount of reliable power. Simple, neat and wrong, John Nichols, SAFE newsletter, Spring 2012. http://bit.ly/Lgm1QM

 

It follows that replacing coal power with wind and/or solar power will not work, although the idea of doing so is often cited. Consider two Delaware energy policies: (1) participate in a Regional Greenhouse Gas Initiative (RGGI) that will establish a “cap and trade” regime for electrical power producers in the region and progressively penalize producers that fail to reduce their CO2 emissions (an inevitable by-product of burning coal, oil or natural gas, although coal produces more CO2 than the others due to its higher carbon content); (2) phase in a Renewable Portfolio Standard (RPS) that will require Delaware utilities to buy a growing share of the power they sell from renewable energy sources or acquire renewable energy credits to cover the shortfall.

 

Many comments at a public hearing on a proposed pause in phasing in the RPS revealed scant interest in and/or understanding of how the need for cheap, reliable power can actually be met.  A real world skirmish over energy policy, 4/2/12. 

 

Father Flowers was the last witness in favor of HR 247; over a dozen people who opposed the bill remained to be heard from.

 

After a bit more  – sea level rise, how long are we going to wait - cannot imagine any good reason for this legislation - today is the 33rd anniversary of the Three Mile Island tragedy and now we are sitting on a “fossil fuel bomb” - renewable energy has nothing to do with current economic problems and it’s time to accelerate the program - we’re installing solar systems at our site and they work – the SAFE team departed.

 

Renewable energy advocates give short shrift to the reliability issue, probably because they would like to see consumers forced to use less electricity.  Thus, a 2007 “green vision” plan of San Jose, California (former employer of Delaware Secretary of Natural Resources and Environmental Control Colin O’Mara) set a goal of reducing per capita energy use by 50% in 15 years.  http://bit.ly/J7Cn3D Although no such goal has been formally proposed for Delaware, we suspect a “less is more” mindset is in play here as well.

 

There is nothing wrong with voluntary energy conservation; it is perfectly sensible to strive for more efficient use of electricity and other forms of energy.  Experience has shown, however, that relatively low energy prices promote rising energy consumption. TE, pages 128-138.

 

Doing the same amount of work with less energy is the same as doing more work with the same amount of energy.  There is no proscribed limit to human demands.  If it become easier to produce things by using less energy, then people will want more of it.  *** Today’s refrigerators, for example, are more than twice as efficient as those of 1980.  Yet most homes now have two or more refrigerators. *** Improvements in [auto] engine efficiency may improve gas mileage, but this also makes it easier for people to increase their driving.

 

Global warming, etc. – OK, what about the argument that the burning of coal (and by the same logic other fossil fuels) must be stopped before the buildup of CO2 in the atmosphere causes irreversible harm that will threaten life as we know it? 

 

In other words, cost does not matter – nor the convenience of our spoiled population – fossil fuels must go for the greater good.  Destroy the economy, save the planet, Washington Times, 5/9/12.

 

Socialists hate the idea that individuals acting through the free market would be allowed to improve their living conditions as a result of a process lacking centralized direction. The leftist impulse is to entrust government with the responsibility of making decisions and imposing order.

 

http://bit.ly/JWn2fe

 

We do not share this enthusiasm for government control, and the supposedly overwhelming scientific consensus about the catastrophic manmade global warming theory is starting to unravel.  Scientists in revolt against global warming, Karin McQuillan, American Thinker, 11/27/11.

 

More and more scientists are revolting against the global warming consensus enforced by government funding, the academic establishment, and media misrepresentation. They are saying that solar cycles and the complex systems of cloud formation have much more influence on our climate, and account for historical periods of warming and cooling much more accurately [than] a straight line graph of industrialization, CO2, and rising temperatures.  They also point out that the rising temperatures that set off the global warming panic ended in 1998.


http://bit.ly/sUH8p5

 

Political leaders in the alarmist camp have likewise dialed back their warnings about global warming, although the change is probably tactical versus strategic.  Obama steers clear on climate, Steven T. Dennis, Roll Call, 5/24/12. 

 

Environmental activists, Senate Democrats and Republicans alike have noticed the White House’s shift, both in softened rhetoric and in using administrative tools to bypass Congress.

 

Republican critics say the White House has figured out that its policies aren’t popular, particularly in a still-sluggish economy. The White House instead is pushing administrative measures to accomplish the same results via Environmental Protection Agency regulations on power plants and the like. GOP lawmakers suggest the White House is hoping that it can push things under the radar.

 

http://bit.ly/KVHhwa

 

Here is our take on the global warming theory:  The Earth has warmed since the end of the Little Ice Age, but (1) there have been far more significant cooling and warming periods in the Earth’s history, (2) it is unclear what drives changes in global temperatures (e.g., variable solar activity), and (3) the warming trend since 1800 (about the start of the Industrial Revolution) has been intermittent, while atmospheric CO2 levels have steadily increased.  See, e.g., letters to the editor, 1/8/12 (Day) http://bit.ly/xqbOrC; 2/27/12 (Morris) http://bit.ly/JitmyN.

 

The observed warming has had positive as well as negative effects, quite possibly representing an overall plus.  The same can be said for the increase in atmospheric CO2 (a trace gas that currently accounts for less than .05% of the atmosphere). The Many Benefits of Atmospheric CO2 Enrichment, Craig Idso & Sherwood Idso, 2011 (Vales Lake Publishing).  http://bit.ly/JdJDEZ

 

For an in-depth discussion based on recent scientific work, see Climate Change Reconsidered, Interim report of the Nongovernmental International Panel on Climate Change (alter ego of the UN-sponsored IPCC), 2011.

 

On the most important issue, the IPCC‘s claim that most of the observed increase in global average temperatures since the mid-twentieth century is very likely due to the observed increase in anthropogenic greenhouse gas concentrations [emphasis in the original], we once again reach the opposite conclusion, that natural causes are very likely to be dominant. Once again, we stress we are not saying anthropogenic greenhouse gases (GHG) cannot produce some warming or have not in the past. Our conclusion is that the evidence shows they are not playing a substantial role.

 

http://bit.ly/KTIT9p (download PDF)

 

Powerful interest groups remain invested in the global warming theory, both in the US and elsewhere.  Thus, yet another in the seemingly endless series of UN-sponsored conferences on the subject – aimed at persuading “developed countries” to curb their greenhouse gas emissions by taxing (directly or via “cap and trade” schemes) the use of coal and other fossil fuels and remitting part of the proceeds to “poor” countries – just wound up in Bonn, Germany. Is China poor?  Key question at climate talks, Karl Ritter (AP), Washington Times, 5/25/12.  http://bit.ly/JUWiSK

 

Whatever the ongoing scientific research may establish, the global warming (aka “climate change”) theory will be cited for years to come as an argument for ending the use of coal power and curtailing the use of other fossil fuels.

 

Even skeptical observers tend to accept the argument in an “abundance of caution.”  See Terrestrial Energy, which concludes a chapter on the global warming theory as follows (page 27).

 

Even if all the alarms about drowning Florida are exaggerated, putting three billion tons of carbon dioxide into the atmosphere each year has to force some change somewhere.  We are headed into unknown territory.  That is why we must take climate change seriously.

 

The path forward Summing up, a consensus has developed in the US for moving away from coal power.  (It is unclear whether China et al. will be willing to follow suit.)  The notion of replacing coal with renewable energy (e.g., wind or solar) is impracticable.  Natural gas and/or nuclear power could potentially fill the bill, although – as will be seen later – there are objections to both of them as well.

 

Given the failure of the Carter era energy policies, which with a bit of tinkering have been in effect ever since, a new approach is needed.  Is there merit in the EPA’s recent proposals, or are better options available?

 

6/4/12 – Coal succession planning

 

The idea of moving away from coal as a source of energy for generating electricity seems sensible in principle, for reasons that have been discussed. However, (A) there is no need to make this change on a crash (cost is no object) basis, and (B) renewable energy sources (wind, solar, etc.) do not represent a viable alternative to coal because they are only available intermittently and must be backed up by reliable power sources.

 

The logical alternatives to coal are natural gas and nuclear power. Both of these energy sources have drawbacks.  Natural gas is a fossil fuel; burning it results in CO2 emissions (albeit less than coal), which are seen by some as a problem.  Nuclear power plants generate radioactive materials, and there is a risk of operating disasters.

 

In addition to the foregoing concerns, which can be rationally discussed, some people oppose fossil fuels or nuclear power on ideological grounds:

 

#The sustainability argument is that no source of cheap energy can last, so human beings must adopt more modest lifestyles before (fill in the blank) happens.  Upcoming United Nations summit repackages global warming agenda under the guise of sustainability, Kevin Mooney, netrightdaily.com, 3/22/12. http://bit.ly/GNSVZ9

 

 #The fairness argument is that wealthy countries should curb their consumption of the Earth’s resources, help poorer countries, etc.  More than two planets needed by 2030, wwf.org (a South African biodiversity site ), 5/15/12.  http://bit.ly/IXS4We

 

By dint of ignoring the ideological critics (they cannot be satisfied), this country can ensure access to cheap and reliable electrical power for the foreseeable future.  The main obstacle is not technical, it is overbearing and/or misguided government policies that threaten to accomplish two results simultaneously: (1) shut down coal power, and (2) block the practical alternatives.  Discussion follows. 

 

COAL: It would be a herculean task to review all of the Environmental Protection Agency (EPA) regulations, actual or proposed, that have been aimed at coal power.  Conference speakers say EPA at war with coal industry, Hank Hayes, Kingsport (TN) Times-News, 5/24/12.

 

According to Chamber of Commerce Senior Vice President Bill Kovacs: (A) there are now 154,538 pages of EPA regulations, and “if the agency wants to get you, they can get you;” (B) since March 2010, 350 energy projects with a $570 billion economic impact and 1.9 million jobs haven’t been able to get EPA permits; and (C) the Sierra Club has taken credit for retiring more than 100 coal-fired power plants and preventing another 150 from being built.

 

http://bit.ly/LUe4UH

 

But here are some of the key rules in question, which the EPA has proposed lately or is currently implementing:

 

Ozone - Instead of proceeding with implementation of an ozone reduction standard that it had adopted in 2008, and which would have been subject to reconsideration in the future, the EPA proposed to issue a more stringent standard immediately.  Dire effects were expected for the manufacturing sector (including coal power plants).  EPA to drain $1 trillion from economy, Washington Times, 10/7/10.

 

. . . the Manufacturers Alliance/MAPI last month predicted that implementing the technologies needed to meet EPA’s proposed goal would cost the economy a staggering $1 trillion every year. A total of 7.3 million jobs would be lost along the way, adding 4.3 percent of the work force to the unemployment line by 2020. 

 

http://bit.ly/bIstLY

 

Nearly a year later, the president sounded a retreat, after which EPA Administrator Lisa Jackson announced that the 2008 ozone standard would be implemented after all – despite having previously characterized it as “legally indefensible.”  Jackson says EPA required to implement Bush Administration standard for ozone, Jessica Coomes & Andrew Childers, BloombergBNA, 9/23/11.  http://bit.ly/pBNBdv

 

This outcome was decried by the [Wilmington, DE] News Journal, which reported that “state health and environmental officials joined with citizen groups Wednesday in calling on President Barack Obama to reconsider postponement of new and tougher national smog standards.” http://bit.ly/ghPVOu (9/22/11)

 

Hazardous air pollutants – In December 2011, the EPA imposed draconian new limits on emission of mercury and other air toxins by coal and oil power plants.  Compliance costs were expected to be high, e.g., the “final rule may be the most expensive one ever devised by EPA,” while the envisioned health benefits appeared dubious at best.  Agenda-driven “science” at EPA, Paul Driessen & Willie Soon, Townhall.com, 2/1/12.

 

[Re the claimed benefits from reducing mercury emissions, for example, the EPA] confessed that U.S. power plants actually contribute a mere 3% of the total mercury deposited in computer-modeled American watersheds, and thus in fish tissue. Citizens will justifiably wonder where the other 97% comes from, and why we should spend so much money for so little benefit. (The “missing” mercury comes from foreign sources and from volcanoes, subsea vents and other natural sources.)

 

http://bit.ly/yYbkZI

 

Interstate air pollution – In July 2011, the EPA announced the imposition of new limits on sulfur dioxide (SO2) and nitrous oxide (NOx) emissions from power plants in 27 designated upwind states.  The rule was to take effect  on 1/1/12.

 

Legislation to block the rule fell short in the Senate; both senators from Delaware (a designated downwind state) voted against it.  The News Journal reported that EPA officials “estimate the rule will prevent up to 34,000 deaths a year linked to respiratory illness – including an estimated 140 in Delaware – and tens of thousands of nonfatal illnesses and symptoms.” http://bit.ly/ghPVOu (11/11/11)

 

Implementation was stayed at the proverbial “eleventh hour” by an appellate court.  Court delays EPA’s cross-state air pollution rule, Andrew Restuccia, The Hill, 12/30/11.  http://bit.ly/vvQ4lV To the best of our knowledge, the matter is still being litigated.

 

Greenhouse gases – In late March 2012, the EPA proposed the first ever carbon emission limits for power plants.  Their “watered-down” rule exempted existing coal power plants plus any new ones to be started within the next year. 

 

New plants beyond that would be required to approximately halve their carbon emissions to match the performance of gas power plants, which could in theory be done by underground sequestration (long-term storage) of CO2. Government proposes first carbon limits on power plants, Timothy Gardner, Reuters, 3/27/12. http://reut.rs/Hgzjwb

 

As sequestration is a costly procedure that is not currently in commercial use anywhere, this exception would be of no practical significance. EPA announces historic rule to limit climate pollution from new power plants, Renee Schoof, Kansas City (MO) Star, 3/28/12.

http://bit.ly/HmaOfH

 

Coal exports: Due to both EPA regulations and low natural gas prices, the use of coal to generate electricity has been sinking in the US. Fortunately for the coal-mining sector, a rising volume of coal exports to Asian markets has offset this trend.  Coal exports surge to highest level since 1991, Matthew Brown, Business Week, 4/10/12. http://buswk.co/HI8AXZ

 

Coal burned in Asia adds CO2 to the atmosphere, just as surely as coal burned in the US, so environmentalists are less than delighted. Coal, gas exports meet tough environmental resistance, Ben Wolfgang, Washington Times, 5/1/12. http://bit.ly/JBAyta

 

Government resistance to coal exports can be expected, as evidenced by Seattle’s efforts to block coal export facilities.  Ironically, the coal to be exported is cleaner – and therefore generates less pollution – than the coal China would otherwise obtain from other sources, e.g., Australia. There are no winners in the war on coal, Rebekah Rast, NetRightDaily, 1/6/12. http://bit.ly/L8qIks

 

In sum: Unless something happens to stop them, the EPA will systematically strangle coal power, in which case this country will either use energy sources to make up the electricity shortfall or do without.   

 

The results of the November election may not materially affect this outlook. The EPA is so deeply embedded in their regulatory niche that it would take strong action – which Congress has not been noted for in recent years – to redirect them.  America’s real climate and environmental crisis, Paul Driessen, Townhall.com, 5/25/12.

 

Nationwide, 319 coal-fueled power plants totaling 42,895 megawatts (13% of the nation's coal fleet and enough for 40 million homes and small businesses) are already slated to close, the Sierra Club joyfully proclaimed. Illinois families and businesses could pay 20% more for electricity by 2014, the Chicago Tribune reports. Chicago public schools may have to find an extra $2.7 million a year to keep the lights and heat on and computers running.

 

http://bit.ly/KPhKoH

 

NATURAL GAS: The short-term alternative to coal power is natural gas.  (1) Gas power plants can be quickly installed, (2) they emit less CO2 (not to mention real pollutants) than coal plants, and (3) natural gas is abundant and cheap  – thanks to the perfection of hydraulic fractioning (aka “fracking”) + horizontal drilling technology that permits the economic extraction of gas from shale formations.

 

Ironically, point 3 has converted environmentalists from supporters to opponents by threatening to position natural gas as a long-term solution versus a temporary expedient.  Natural gas flip-flop, Ronald Bailey, Reason, August/September 2011.

 

The national green lobbies initially welcomed shale gas. In 2009, for example, Robert Kennedy Jr., head of the Waterkeeper Alliance, called it “an obvious bridge fuel to the ‘new’ energy economy.” Local environmental activists were not as enthusiastic, arguing that fracking contaminates drinking water and causes other forms of pollution. After a while, some of the national lobbies began to come around to the locals’ side. In the words of the journalist Matt Ridley, “it became apparent that shale gas was a competitive threat to renewable energy.” Josh Fox, director of the anti–natural gas documentary Gasland, put it bluntly on Kennedy’s radio show: “What’s really happening here is not a battle between natural gas and coal. What’s happening here is a battle between another dirty fossil fuel and renewable energy.”

 

http://bit.ly/n3jpIk

 

A more recent report suggests opposition to any viable sources of energy.  Sierra Club declares war on natural gas, Sean Hackbarth, Free Enterprise, 5/7/12.

 

They oppose coal, they oppose oil, and now natural gas is off limits. To them, it’s wind and solar wind and that’s about it. But if they have their way and we start to get more of our electricity from wind and solar, expect them to move the goalposts again. In fact, maybe they already have. Local Sierra Clubs have been and continue to work to block solar and wind projects in Maryland, Texas, Florida, all over California, and elsewhere.

 

http://bit.ly/IX3mbr

 

And consider an anti-fracking cartoon, which recently appeared in the editorial section of the News Journal.  http://bit.ly/IS7Ktq (5/30/12)

 

A huge, ominous tanker truck labeled “fracking industry” is pumping “SECRET SAUCE” to an oil derrick at rear left.  Bemused onlooker, positioned near right and labeled “Ohio,” has his arms outstretched in a “what’s happening” pose. Worker standing on top of tanker: “We could tell you what’s in it, but then we’d have to let it kill you.”

 

It has not taken long for developing sentiment against fracking and natural gas to be manifested in new government (federal, state and local) requirements.  The purported goal is to protect public health and the environment, but there may well be a hidden agenda.  Load enough studies, hearings, permits, operating restrictions, inspections, and lawsuits on fracking, and shale gas will not be so abundant or cheap after all.

 

Notice how the president threaded the needle in the 2012 State of the Union Address, celebrating the shale gas boom on the one hand, but promising rigorous regulation and a “clean energy” future on the other. Transcript, page 6, 1/24/12.

 

We have a supply of natural gas that can last America nearly 100 years . . . my administration will take every possible action to safely develop this energy . . . I’m requiring all companies that drill for gas on public lands to disclose the chemicals they

use.  Because America will develop this resource without putting the health and safety of our citizens at risk . . . we don’t have to choose between our environment and our economy . . . public research dollars, over the course of 30 years, [helped] develop the technologies to extract all this natural gas out of shale . . . I will not cede the wind or solar or battery industry to China or Germany because we refuse to make the same commitment . . . It’s time to end the taxpayer giveaways to an industry [oil] that rarely has been more profitable, and double-down on a clean energy industry that never has been more promising.  

 

 http://nyti.ms/yUjy75

 

State regulatory approaches have varied, being relatively liberal in Pennsylvania, for example, and very strict in New York.  Natural gas is being produced by Pennsylvania, as a result, while fracking operations in New York are stymied.

 

Delaware has no shale formations itself.  Governor Jack Markell has opposed clearance by the 4-state (DE, NJ, NY, PA) + federal Delaware River Basin Commission of fracking operations within the area subject to its purview, however, on grounds that the environmental risks need to be studied further and the proposed regulations are not tough enough.  Debate seeps into Delaware, News Journal, 5/20/12.

 

Long and involved article elaborates on Governor Markell’s resistance to fracking regs proposed by Delaware River Basin Commission, with DNREC Secretary Colin O’Mara and environmental critics doing the talking.  Sample from O’Mara: “We’ve done a lot of work comparing and contrasting the draft DRBC regulations with those in other parts of the country as with New York’s proposed rules.  In many cases, we believe the DRBC’s proposed regulations fall short.”

 

http://bit.ly/IS7Ktq (5/30/12)

 

Federal regulators are currently playing catch-up on fracking, but longer term they may do a lot of damage.  Here are some scattered reports of their activities:

 

#EPA regulations of air emissions from fracking wells included a last minute concession.  The agency gave drillers until January 1, 2015, to “invest in equipment that slashes unhealthy air emissions from fracking wells, citing a lack of clean technology.” Fracking rules let drillers flare til 2015, Reuters, 4/18/12. http://reut.rs/HYfZVa

 

#Interior Department has proposed regulations concerning fracking operations on public land – they reportedly require disclosure of the chemicals to be used (information is considered proprietary) and address issues of well integrity & water management – Anadarko Petroleum and others met with White House staff to express their concerns.  Gas industry presses White House on “fracking rules, Ben Geman, the Hill, 4/9/12.

 

Anadarko, according to a presentation provided to OMB, fears that the rules could lead to hundreds of millions of dollars' worth of annual delays for industry projects on public lands, and warns of “onerous” reporting requirements.  The presentation also cites concerns that Interior could deny fracking from occurring at wells that have already been drilled.

 

http://bit.ly/IjOpUb

 

#EPA is studying the environmental effects of fracking and the disposition of liquid wastes, but they apparently have not identified any serious problems. Fracking: an existential threat to green dogma, Paul Driessen, Townhall.com, 3/28/12.

 

Despite these facts [summary of prior studies of fracking and drilling, etc.], EPA is nevertheless trying to invent problems and inject itself into already vigilant and responsive state regulatory efforts. The agency has conducted a roundly criticized study [of alleged drinking water contamination] in Wyoming and is conducting water tests in Pennsylvania, where state officials view its activities as unnecessary meddling.

 

http://bit.ly/GWC8WD

 

#Another line of attack is offered by the Endangered Species Act (Fish & Wildlife Service has administrative jurisdiction).  We previously reported that a proposal to classify “the little (less than three inches long) dunes sagebrush lizard” as endangered could lead to significant disruption of oil drilling operations in the Permian Basin.  An administrative blitz, 5/9/11. 

 

A similar controversy concerning the desert sage grouse now threatens gas drilling and also ranching activities in western Wyoming, and this may be just the beginning.  Killing jobs to save the sage grouse, William Pendly, Washington Times, 5/31/12.

 

. . . the Sublette County case involves only one of 16 federal planning areas, covering 25 million acres in six Western states, in the Idaho court. Worse yet, environmental groups demand the sage grouse’s accommodation, regardless of the cost to humans and other species, all across its former range: 156 million acres in 11 Western states.

 

http://bit.ly/LNT4fn

 

NUCLEAR: A new wave of nuclear power plants to supplement those already in operation would represent an elegant replacement for coal plants – much cleaner, far less fuel and process waste, lower operating costs.  Consider, for example, this comparison of a coal plant and a nuclear plant that are both located near Omaha, Nebraska.  Terrestrial Energy: How nuclear power will lead the green revolution and end America’s energy odyssey, William Tucker, Bartelby Press (2008), p. 38.

 

#The North Omaha Power Plant produces 500 megawatts (MW) of electricity, about one-fifth of the power needed to run the city.  Every three days, a 110-car-unit train arrives, each car is loaded with 125 tons of coal. The plant occupies more than two square miles – much of it needed to store the mountains of coal. Waste products include 15,000 tons of CO2 a day.

 

#The Cooper Nuclear Station plant occupies two square miles, slightly less than the coal station.  Every eighteen months, a single tractor-trailer arrives carrying several dozen bundles of nuclear fuel rods. The Cooper Station produces no sulfur emissions, no mercury, no soot, no particulate matter, no slag, and no greenhouse gases.  And it does produce more electricity than North Omaha – 750 MW.

 

http://bit.ly/mQCHMn

 

Nuclear power also has drawbacks, notably concerns about the process getting out of control and causing enormous damage.  Although there have been few reactor meltdown events, and the only one on US soil (Three Mile Island, 1979) was wildly exaggerated, the concerns have a rational basis and deserve to be taken seriously.

 

 Last year’s earthquake/tsunami-induced meltdown at the Fukushima plant in Japan represented a huge setback for nuclear power, both in Japan (where all nuclear plants are being closed down) and around the globe.  SAFE advocated a reasoned, fact-based response to the event (see 3/21/11 letter to Delaware members, http://bit.ly/hkK4kT), but this was not a mainstream view at the time.

 

Today, over a year later, the Fukushima disaster is still unfolding with reports of widespread dissemination of radioactive materials and fears that fresh damage will occur at the shutdown but still not stabilized plant. Spent fuel rods drive growing fear over plant in Japan, Hiroko Tabuchi & Matthew Wald, New York Times, 5/26/12.

 

“The No. 4 reactor is visibly damaged and in a fragile state, down to the floor that holds the spent fuel pool,” said Hiroaki Koide, an assistant professor at Kyoto University’s Research Reactor Institute and one of the experts raising concerns. “Any radioactive release could be huge and go directly into the environment.”  Senator Ron Wyden, Democrat of Oregon, expressed similar concerns during a trip to Japan last month.

 

http://nyti.ms/KsSiX1

 

Renewed fears about nuclear power in the wake of the Fukushima disaster will probably not be allowed to interfere with the operation of existing nuclear plants in the US.  However, these fears – coupled with the high cost for new nuclear power plants and the availability of cheap natural gas – will impede a US nuclear power renaissance any time soon.

 

The Nuclear Regulatory Commission did recently approve permits for two new nuclear reactors, by a 4-1 vote, and the dissenter {Gregory Jaczko) has since resigned.  The Georgia plants will take years to build, however, and the cost estimates are staggering.  Moreover, we predict the private investors will demand government loan guarantees, which SAFE opposes in principle.  Nuclear agency approves first nuclear reactors since 1978, Larry Copeland, USA Today, 2/10/12.

 

[Southern Co.] expects to begin operating the new units in 2016 and 2017. They will cost more than $14 billion.

 

http://usat.ly/yJPxs5

 

Another issue is the disposal of nuclear waste disposal, given a Carter era decision to prohibit recycling of partially consumed nuclear fuel.  Withdrawal of support for the long-contemplated national repository at Yucca Mountain, Nevada, has left this question in limbo.  We think recycling would be the best answer, but in any case nuclear power cannot have a stable future unless the issue is resolved in some fashion.  If coal power is too “dirty,” how about nuclear?  3/8/10

 

Summing up, nuclear power could represent an attractive alternative to coal power – but only over the longer term.  Building nuclear plants on a crash basis would be enormously costly, and the American public is not prepared for such a program at this time.

 

6/11/12 – Kill coal, lights out?

 

To recap what has been said thus far:  It makes sense to phase out coal as an energy source for generating electricity, and the federal government (with support from some state and local governments) is making every effort to push this result.  Government policies may also impede the use of natural gas and/or nuclear power to replace coal, and renewable energy (wind and solar) cannot do the job. 

 

So what will happen if more and more coal power plants are shut down, natural gas prices soar due to tough regulation of extraction of shale gas via fracking, and there are so many regulatory restrictions on nuclear power that new plants would take years to build and be prohibitively costly?  Simply put, this country’s electric power grids will be overwhelmed, causing power prices to soar while reliability plummets.

 

Some may view our electric power shortage scenario as a “scare story.”  Don’t make that mistake.  Unless the government adopts more realistic energy policies and slows down the regulatory onslaught on the energy sector, just such a shortage will develop over the next few years.

 

What: Occasional power outages are inevitable, as when power lines are downed during a storm, and many things that Americans take for granted are disabled until service is restored.  Thus, electric lights go out, televisions and computers won’t work, food in refrigerators and freezers starts to spoil, etc.

 

Such events will continue to happen occasionally, that’s life, but suppose they became more frequent – like almost daily.  Or alternatively your power company turned down the voltage in order to avoid shutting down the system, producing what is known as “brownouts.”  wiseGEEK definition.

 

Voltage reductions are undertaken when utilities sense that a disruption in the grid may lead to serious problems. Rather than instituting rolling blackouts [complete cutoff of power to selected areas on a rotating basis], the utility may temporarily cut voltage to some customers in an attempt to stabilize the grid and to allow reserves of power to accumulate again.

 

http://bit.ly/aQLPVZ

 

The lights are not going to suddenly go out all across America and stay that way, as one observer implied in a recent column.  Where will you be when the lights go out?  Marita Noon, Townhall.com, 6/3/12. 

 

We each know where we were when President Kennedy was shot, when the Berlin Wall came down, and on the morning of 9-11. If we continue on the current course, you’ll be telling your grandchildren where you were the night the lights went out in America.

 

http://bit.ly/K75TAu

 

But the situation that is developing will represent a big change from the abundant and reliable electrical power that Americans have been accustomed to.  It is not hard to imagine the “why didn’t anyone tell us this was going to happen” and “when is this going to be fixed” reactions. 

 

The public won’t be happy to learn that the power outages cannot be quickly resolved, but will require months or even years to fix. 

 

It would seem desirable to anticipate where things are headed and make decisions now to prevent the electric grids from being overloaded, e.g., functional coal power plants should not be shuttered before economic and reliable alternatives have been installed to take their place.  As already discussed, however, the government has been following a different path. 

 

When: To some extent, the overloaded-grid situation may have arrived already.  Consider these examples of real world power blackouts:

 

#A cascade of failures (high voltage power lines brushing overgrown trees, failed alarm system in the control room of FirstEnergy Corporation in Ohio) resulted in a power outage in eight states and Northeastern Canada that affected 50 million people and lasted two days. The blackout contributed to at least 11 deaths and caused an estimated $6B in damage.  The ensuing investigation blamed this event on human errors and equipment failures.  The 2003 Northeast blackout – five years later, J. R. Minkel, Scientific American, 8/13/08.  http://bit.ly/JS6E3

 

#Over 1.4 million Californians were left without power after a high voltage line from Arizona to California “tripped out of service.”  Grid officials said the blackouts could last for hours.  Offices shut down, workers sent home – people rescued from amusement parks and elevators – numerous traffic accidents due to nonworking traffic signals – no outbound airplane flights.  Officials begin attempting to restore power in San Diego area blackout, LA Times, 9/8/11.   http://lat.ms/nWN8en

 

#Rolling blackouts (power company initiates selective blackouts versus an overall voltage reduction) have been reported in Texas since early 2011.  Some observers blamed EPA regulations that are forcing coal power plant shutdowns and thereby reducing the power grid’s margin of safety, although a White House official attributed the early 2011 blackouts to mechanical failure and said the anti-EPA claim was “unquestionably false.”  Draconian EPA regulations to cause rolling blackouts, Paul Watson, PrisonPlanet.com, 12/2/11.  http://bit.ly/spEaq2

 

Although gas power plants can be installed to replace existing coal plants, power companies will understandably expect to earn a return on the additional investment.  This may force a sharp increase in the current price caps on peak power in Texas, or alternatively an overhaul of the rate-setting process.  Either way, consumers would pay more for electric power. Texas may triple [peak] power prices to avert summer blackouts, Mark Chediak & Julie Johnson, Bloomberg.com, 6/1/12.  http://bloom.bg/KRBAAK

 

Assessment: It seems logical that government support for renewable energy sources and environmental crackdown on coal power are contributing to growing vulnerability to power disruptions.  Proving the point is difficult as many other factors can be involved – such as weather events, equipment failures, and failures to prune trees near power lines – but let’s give it a shot.

 

There is concrete evidence that intermittent wind or solar power cannot take the place of coal or natural gas power – and indeed that just so much power from these sources can be tolerated if a grid is to function properly.  

 

In Texas, which has more installed wind-power capacity than any other state, wind turbines sometimes are ordered shut off because the state's electrical lines can't handle the surge of fresh juice.

 

Or consider the situation in Germany, where more and more wind and solar power is coming on line while there is a nuclear power moratorium in the wake of the Fukushima meltdown in Japan. Germany faces a growing risk of disastrous power blackouts, Paul Frederik-Bach, GreentechMedia.com, 5/30/12. http://bit.ly/JQA944

 

Some experts say a “smart” grid could handle more power produced from renewable energy sources, but creating such a grid might take 20 years and consumers or taxpayers would have to pay for it.

 

The challenge of modernizing the electrical grid to accommodate cleaner energy rivals the monumental task of extending the grid into rural America in the 1930s and building a fleet of new power plants in the wake of World War II.

 

Also, the “smart” grid would represent a step toward centralized control versus allowing the system to be driven by consumer demand.  We do not relish the idea of the power companies (let alone government agencies) turning things on and off in American homes and places of business, thank you very much. The matrix overloaded: Clean energy will depend on a new, “smart” grid, Jeffrey Ball, Wall Street Journal, 10/24/08.

 

[The current grid is] not sophisticated enough to minimize electricity waste by allowing, for instance, power companies and consumer appliances to communicate about fluctuations in energy supply and demand.

 

http://on.wsj.com/LHR7lJ

 

Another flaw in the smart grid vision is that it would increase already substantial vulnerabilities to cyber attacks.  The cyber security risks of a smarter grid, Joshua McGee, Center for Strategic & International Studies, 6/23/11.

 

With full 2-way communication, increased automation, and an ever-greater reliance on the Internet, the Smart Grid will need greater protection than the current electric grid. One scenario described by a Department of Energy document is where “smart meters” could be programmed by hackers to send messages simultaneously that would ultimately create drastic fluctuations in the energy provided; such an attack could cause great grid instability and power outages.

 

http://bit.ly/uwYWux

 

Ironically, the most authoritative confirmation of our view that government policies are endangering the availability of cheap, reliable electric power in this country has been provided by the work of a federal government agency.  2011 long-term reliability assessment, North American Electric Reliability Corporation (NERC), November 2011 (updated 4/25/12).  http://www.nerc.com/page.php?cid=4|61 (download PDF)

 

NERC’s mission is to monitor operations of “the bulk power system in North America” and recommend measures to ensure system reliability.  Formed in 1968, it is “a self-regulatory organization,” which operates “subject to oversight by the U.S. Federal Energy Regulatory Commission and governmental authorities in Canada.” In 2007, FERC empowered NERC to enforce reliability standards with all users, owners and operators of the bulk power system in the United States. http://bit.ly/NoJJjo

 

The 2011 long-term reliability assessment is a lengthy and sophisticated report, which toes the “party line” in assuming increasing use of renewable energy sources, tougher environmental standards, and increased emphasis on “demand side” management (aka energy conservation).

 

However, the NERC report does identify some risks associated with these policies.  See executive summary (pages 1-4) and the more detailed text that follows.  For example:

 

One of the greatest risks indentified by the NERC Planning Committee (high likelihood, high consequence), is the potential impacts of future environmental regulations. (page 2)

 

 In addition to the regulatory drivers triggering an unprecedented resourcemix  change, societal  and political  pressures continue  to  prompt the industry to integrate  more renewable generation into its resource portfolio. (page 2)

 

. . . fundamental  changes to planning  and  operated strategies must conform to  consider evolving risks  such as gas and electric interdependencies, increased  uncertainty  from variable generation consuming less predictable fuel  sources, and new  vectors  of  penetration for emerging cyber and physical security threats. (page 3)

 

 [In Texas,] more generation may be retired, depending on how finalized environmental regulations are implemented . . . worsening reliability issues in the Region. (pages 5-6)

 

Environmental Regulations are shown to be the number one risk to reliability over the next 1 to 5 years. (page 82)

 

Early retirement of multiple units in the shortrun can stress the bulk power system if plans are not in place to add additional resources to cover the loss of generation from facilities affected by EPA regulations.  (page 84)

 

Studies demonstrate that regional reserve requirements could be compromised by the cumulative impact of EPA’s actions, which indicate that between 2012 and 2018, the nation’s power grid will be stressed in ways never before experienced and could pose a  reliability concern.   (page 85)

 

Conservatives hailed the NERC report – in contrast to other Energy Department statements – for candidly acknowledging the likely consequences of the EPA’s regulatory assault on coal power. EPA to raise electricity prices, risk blackouts, Romina Boccia, Heritage Foundation, 12/6/11. 

 

A recent report by the U.S. Department of Energy fending off concerns that pending air pollution regulations pose risks to electricity reliability is far from settling the question of possible blackouts. Just a few days prior, the government-designated expert panel to ensure electricity reliability, the North American Electric Reliability Corporation (NERC), warned that the EPA’s proposed regulations pose one of the greatest risks to the electricity sector.

 

http://bit.ly/tUNUGy

 

Others were less pleased with the report, and it apparently triggered adverse audit findings by the Federal Energy Regulatory Commission (NERC’s designated overseer).  FERC audits shows continuing tension with NERC, martindale.com, 5/10/12.  http://bit.ly/MjQ1Pj

 

The real knock against FERC was its stubborn insistence on doing its job.  Getting even on reliability, Wall Street Journal, 5/21/12 (link not available).  

 

Imagine if some obscure trading desk within J.P. Morgan had tried to warn [CEO] Jamie Dimon about corporate malfeasance – or perhaps a risky investment – and it turned out he tried to shut up the whistleblower.  We’d never hear the end to it.  Somehow the same norms don’t apply in government, as shown by a federal energy regulator’s reprisals against an independent advisory body.

 

In sum, the NERC report corroborates our thesis that current energy and regulatory policies are threatening the availability of cheap, reliable electric power – which is essential for a healthy US economy, not just now but for many years to come. 

 

To borrow a line from Motel 6, here is our message for future generations: “We’ll leave the light on for you.”

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