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Archive for the ‘Energy and the Environment’ Category

Fossil Fuel Subsidies: The True Cost of Energy

Tue ,03/05/2016

The Wichita Eagle recently published an interesting  letter from Darrel Hart, president of the Wichita chapter the Citizens Climate Lobby. He pointed out that the House energy and water development bill , as it stands, provides subsidies of $95 million for wind, $632 million for fossil fuel and $1 billion for nuclear.

The letter goes on, “Clearly when it comes to winning subsidies, wind falls short. Legislators favoring carbon-based fuel spin the idea that if wind were economical, it could compete without government help. Well, what does that say about fossil fuel? It has been receiving billions in subsidies for decades.

Lopsided subsidies and favored treatment reveal the intent to pick winners and losers. A better solution is carbon fee and dividend legislation that cuts greenhouse gas emissions and corrects the artificially low price of fossil fuel created by tax dollars rigging the system against clean energy. Let markets reveal the true price of energy, and it will be the consumer who chooses the winner.”

Mr. Hart certainly has a good point, as carbon fuels are not paying their true cost.  windmill4Besides the $632 million subsidies to fossil fuels, we are also providing an even greater subsidy by allowing them to release their waste products into the air without paying the external costs, i.e., the costs indirectly borne by society.

The external costs for fossil fuels include health and environmental damage from particulates, nitrogen oxides, sulfur oxides, chromium, mercury, arsenic, and carbon emissions. An EU funded research study, Externalities of Energys ,  found that including external costs would increase the cost of producing electricity from fossil fuels by 30% for natural gas to 90% for coal, if costs to the environment and to human health were included.

The carbon fee and dividend system Mr. Hart is recommending would put a fee on carbon at the source, which would require the fossil fuels to include their external costs.This would allow renewable energy sources to compete with fossil fuels on an even basis, and would greatly favor a switch to renewable energy.

(c) 2016 J.C. Moore

Carbon Fee and Dividend: How Much Fuel Makes a Ton of Carbon Dioxide?

Mon ,11/01/2016

In Paris, 196 countries agreed to develop plans to reduce their carbon emissions in such a way as to keep global warming below 1.5°C.  Although each country will develop its own plan,  the best plan for the US, and many other countries, would be a carbon fee and dividend system such as that developed by the  Citizens’ Climate Lobby (CCL), which has broad bipartisan support.  CCL’s proposal would place a fee on carbon at the source, and market forces would then encourage reduced emissions, energy conservation and investments in renewable energy.  The fee collected is not a tax as it would be distributed equally to every household as a monthly energy dividend.

CO2 equivalent emissions: CCL’s legislative proposal would set an initial fee on carbon at $15 per ton of CO2 emission or CO2 equivalent emissions with the fee increasing by $10 each year until the US emissions drop to 1990 levels. The main contributors to CO2 are combustion of coal, natural gas, and gasoline, with minor equivalent emissions coming from other industrial chemicals.  A little chemistry allows us to calculate the tons of CO2 that a ton of each fuel produces.

Coal: It is hard to calculate coal’s contribution exactly as it has from 65% to 95% carbon and the rest is impurities. Those include mercury, cadmium, lead, manganese, selenium, sulfur, nitrogen, and some radioactive elements. Much of the environmental damage and many cases of lung disease can be traced to the impurities and to the mining of coal. For calculation purposes we will assume that coal is all carbon as graphite, but keep in mind that each source of coal is different.

The chemically equation for the reaction of carbon with oxygen is:

co22

 

 

 

 

Carbon       +     Oxygen    =>        Carbon Dioxide

The mass of each atom or molecule in atomic mass units (MU) is written on the atom. The equation says that 12 mass units of carbon react with 32 mass units of oxygen to produce 44 mass units of carbon dioxide. The equation is like a recipe and once you establish the basic relationship, it can be scaled up to tons quite easily, i.e. :

C            +          O2               =>                 CO2

12 MU Carbon + 32 MU Oxygen  =>   44 MU Carbon Dioxide    – or –

12 Tons Carbon + 32 Tons Oxygen    =>  44 Tons Carbon Dioxide

Thus, each ton of carbon produces 3.6 tons of carbon dioxide.

Natural gas: Natural gas is composed mostly of methane, CH4 , with small impurities of other hydrocarbon gases. Following the method above:

Rx

 

 

 

 

 

CH4            +         2O2                =>                 CO2                  +          2H2O

16 MU Methane + 64 MU Oxygen   =>  44 MU Carbon Dioxide  +36 MU of Water

16 Tons Methane + 64 Tons Oxygen    =>   44 tons Carbon Dioxide  +36 tons of Water

Each ton of methane produces 2.8 tons of carbon dioxide.

Gasoline: Gasoline is composed of many volatile liquid compounds, but it can best be represented as octane, which has eight carbon atoms and 18 hydrogen atoms, C8H18. (The model for Octane is large so here we will just work from the equation. )

C8H18     +         25/2 O2   =>        8CO2        +         9 H2O

114 AMU  Octane +   Oxygen  =>  352 AMU  Carbon Dioxide  +   Water

114 Tons Octane +   Oxygen  =>  44 tons Carbon Dioxide  +  Water

Each ton of octane produces 3.1 tons of carbon dioxide.

Note: This means that the initial carbon fee on fossil fuels would be around $40-$50 per ton of fuel. This would pay part of the external costs of using the fuel as well as encourage conservation and a shift to renewable energy. One gallon of gasoline is about 7 pounds and it produces about 21 pounds of CO2. That means that 95 gallons of gasoline will produce 1 ton of carbon dioxide. The $15 per ton carbon fee would increase the cost of 95 gallons of gas from about $200 to about $215, or about 7%.

Heat of Combustion: Each fuel releases a different amount of energy when burned, measured in kilojoules  of energy per  mole of fuel burned. Those are listed below along with another important quantity, the amount of heat released per mole of carbon dioxide released.

Fuel

 

 

 

 

Note that Methane releases more than twice as much energy as coal for each mole of carbon dioxide produced. This was the impetus to convert coal-fired power plants to natural gas-fired plants. That would help in the short term as natural gas has fewer impurities and produces more energy per mole of CO2 released.  However, there is another factor to be considered which is the Global Warming Potential of each greenhouse gas.

Global Warming Potential (GWP):   The amount that each greenhouse gas contributes to global warming depends upon its concentration in the atmosphere, it’s effectiveness at trapping heat, and its lifetime in the atmosphere. The focus is on carbon dioxide as it is the greenhouse gas whose concentration has increased the most by burning fossil fuels. Methane is very efficient at trapping heat and has a GWP 28 times that of CO2. Though methane’s concentration is low, it has more than doubled since pre-industrial times. There are other greenhouse gases which are more effective at trapping heat and have longer lifetimes, such as N2O, but their contributions are small because they have such low concentrations. Below is a table comparing those. Source.

co2 table

 

 

 

 

Although converting coal-fired power plants to natural gas might be advantageous in the short term, we should be concerned about methane’s volatile prices, the link between fracking and earthquakes, and its GWP. Large amounts of methane are lost from fracking operations, leaking gas wells, and pipeline leaks.  If even 4% of the methane produced is lost to leaks, then any advantage of converting to methane will be lost.  The EPA has taken steps to reduce methane loss to the air, but is a very difficult thing to measure. One study found that infrastructure leaks in the Boston area accounted for about 2.6% of the methane transmitted. And methane, when burned, still ends up as CO2 in the atmosphere. You can see from the table that the amount of methane in the air is growing, and rather than count on it for the future, we should focus on converting to renewable energy sources as quickly as possible.

(C) 2016  –  J.C. Moore

Note: Here is a model of octane for the curious:

octane

 

Sue the EPA over Clean Power Plan? The Public Does Not Support It

Thu ,05/11/2015

The leaders of the Republican Party in 26 states plan to sue the EPA to stop the Clean Power Plan. Those same leaders often justify what they want to do by claiming it is what the people want. But in this case, they are doing more what the fossil fuel companies want. The public in 23 of the states does not support the lawsuits, as in the chart below.

00support

The governors and attorney generals of the states want to make a name for themselves as “conservatives”, but it is a losing proposition for a number of reasons. The lawsuits do not actually represent a conservative position, as the EPA’s plan will lead to a shift to renewable energy which will keep billions of tons of carbon dioxide out of the atmosphere. In that respect, the EPA has the more conservative position.

The reason often given for the lawsuits is saving money on energy, but the politicians seem more interested in campaign money than saving money for their citizens. The EPA’s plan may lead to increased electricity costs in the present, but will lead to lower electric rates in the future. Coal and transportation prices are certain to increase in the future while the cost of renewable energy is falling. It costs upfront to build wind turbines and solar installations but, once they are in place, they are expected to function for 30 years or longer without any need for fuel.

It will cost the states lots of money for the lawsuits, and their chances successes is slim.   And, it will likely harm a number of citizens of the states if the lawsuit succeeds. There are many coal burning power plants in the US which operate without scrubbers to remove particulates, because coal is cheap and  scrubbers are expensive. The EPA projects the Clean Power Plan’s  proposed guidelines for particulates alone could  prevent up to 3,600 deaths, 1,700 heart attacks, 90,000 asthma attacks, and 300,000 missed work and school days per year. As a result, for every dollar Americans spend on the Clean Power Plan, we will gain up to $4 worth of health benefits.

So in terms of future energy costs, environmental benefits, and health benefits the EPA Clean Power Plan is a winner for the citizens. Perhaps the Republican Attorney Generals clamoring to sue the EPA should reconsider.

(c) 2015 J.C. Moore

 

Westar Energy’s Rate Request: A Study in Short-Term Thinking

Sun ,23/08/2015

Many of America’s power companies have put their profits before the health of our citizens and the 6coalprotection of the environment. The American Lung Association estimates that the EPA’s proposed guidelines for particulates could prevent 38,000 heart attacks and premature deaths, 1.5 million cases of acute bronchitis and aggravated asthma, and 2.7 million days of missed work or school.  Yet, there are many coal burning power plants in the US which operate without scrubbers to remove particulates, because coal is cheap and  scrubbers are expensive.

Scientists have known since 1980 that our increasing CO2 levels were endangering our environment. All the world’s major scientific organizations are now saying that we must take immediate action to avoid environmental disasters.   There is really no effective way to remove carbon emissions from fossil fuel   plants, yet our power companies have fought a shift to renewable energy. Many power companies are now being required  to install costly upgrades to their coal-fired  plants, and  are trying to recoup the cost of their short-term thinking by raising their customer’s rates. Westar energy is a good example, and it is likely  that your electric company may  soon follow suit.

Westar Energy has requested a rate increase by $152 million a year, about 8% over its current rates. Most of the increase will go to upgrade its Wolf Creek nuclear plant, to install scrubbers at some of its coal-fired power plants, and to remove mercury from its La Cynge coal-fired power plant. Westar’s proposed rate design would shift more of its costs  from businesses to residential customers and increase the basic charge for residential service by $3 a month each year for the next five years. That means the cost to just keep the power on would increase from the current $12 a month to $27 a month. Customers who want to install their own solar or wind power would be required to pay a $50 customer charge or pay for power at the peak rate, effectively killing private investments in solar energy. Westar’s customers are understandably unhappy about this.

CEO pay and profits : As a Westar stockholder, I felt bad about the recent rate hearing in Wichita. Speaker after speaker, including several ministers and AARP representatives, testified about how the proposed increase in rates would affect the poor and elderly. The timing of the rate increase seems inappropriate. Morningstar moneyreported that last year the company’s top five executives received 23.5% in salary increases. Westar’s CEO now receives $3 million in compensation, more than 30 times that of our governor. A large portion of the compensation is in stock, which tends to encourage short-term decisions to increase stock value.

Many people also testified that the proposed rate structure would discourage private investments in energy efficiency, energy conservation, and solar panels. A poll by Magellan found that 76% of Westar’s customers oppose the tariff on solar panels, agreeing that Westar’s position was based on increasing its profit. Westar is also requesting a 10% return on investments which seems high for a company which has just invested several million dollars in executive raises.

A misleading process: Although Westar says it is committed to renewable energy and reduced carbon emissions,  their proposal would have just the opposite effect. There are number of red flags for investors evident in the rate proposal and in Westar’s actions over the last several years.  Many investors are now looking for long-term investments in environmentally and socially responsible companies. Westar may no longer fall into that category.  AARP ran a full-page ad in the local newspaper protesting the rate increase.  About 73% of Westar stock is held by  institutional investors and many of those are retirement funds.  If some of those retirement funds  decide to divest of  Westar’s stock,  the effect will certainly not be what the  CEO intended.

There was also concern about the integrity of the process, which was unnecessarily secretive and sometimes misleading. A local newspaper article pointed out that, ”Westar’s public notice fails to detail changes in billing, solar rates”.   And, the CEO’s letter to stockholders claimed that outside agitators were responsible for opposition to the solar fee – which was not what the Magellan study found.  His idea that solar customers were “free riders”  who didn’t  pay their fair share came from an ALEC meeting in Chicago.  Chicago?  It was propaganda created by power companies  worried about solar cutting into their market share.  His letter claimed that solar customers  who hooked to the  grid using net metering agreements were being subsidized by other ratepayers, though research has found just the opposite.  I would expect such a well-paid CEO to know about the research.

Solar Research: Studies in Vermont, New York, California, Texas, and Nevada concluded that net metering provided a net positive benefit for utility companies and their customers. A 2015 study done in Missouri is even more relevant to Kansas. A cost-benefit study of net metering in Missouri arrived at the same conclusion as the other studies, “ Net metering provides a net benefit. “ Missouri has 6000 net metering customers while Westar now has approximately 300. It is unlikely that a study done in Kansas would come up with a different result,  but the Westar executives claim differently.

Why should customers who cut their energy use in half by installing solar panels be charged an extra fee, while those who cut their use in half by installing extra insulation be considered differently? Westar claims they should be, but that seems unreasonable. Net metering customers are charged a fee to set up the system and for a safety inspection, but otherwise net energy metering customers should be treated just as any other customer when they use electricity and be reimbursed as any other supplier when they supply excess power. Charging solar customers an extra fee may actually cause an increase in electric rates.

Gaming the system: My son, who worked for a gas company, observed that in gas company rate cases they always asked for about twice what they wanted and settled for half of that.  Other than the money to have Wolf Creek comply with federal regulations, much of the other requests are unjustified. Residential customers are already paying a customer fee, an electricity fee, a fuel charge, a distribution fee, an environmental fee, an energy efficiency charge, and even Westar’s property taxes. Last June, our bill was $24.95 for electricity, but our total bill came out to be $53.27 after all those things were added in. The $12 customer charge is already greater than most other companies charge and Westar’s rates are second highest in our region. Westar has implied that residential customers are not paying their fair share of the cost. However, residential customers use about a third of the energy, but it seems they are being asked to pick up much more than a third of the cost of upgrades and pollution controls.

Westar owes a better accounting of the money it collects. There have been over 20 rate cases in the last six years. Too much time and resources have been devoted to rate cases designed to increase the company’s profits. The executive compensation seems excessive and much of it is in stock, which means a rise in profits will greatly benefit the executives. That tends to lead to short-term thinking, which is evident in this rate proposal. It does not take into account the increasing future regulations of carbon emissions and the need to reduce dependence on coal-fired power plants.

Settlement?  Just before the rate case was to go to the  Kansas Corporation Commission,  Westar cut  its rate request  in half. My  son said, ” See there”.   Westar also asked to postpone its request for a tariff  on solar panels to a later hearing.   Westar is now proposing a reduction in the subscription fee for wind energy customers, building its own solar plant, and selling solar power to customers. That is a big improvement, but Westar is  still relying too heavily on its coal-fired power plants. Three of its smaller plants have no scrubbers and they should be phased out as soon as possible.  Earlier,  $600 million was budgeted for upgrading the LaCynge plant.  I’m not sure how much of that has already been spent , but pouring more money into it to remove mercury may be a bad investment. It is expensive to remove mercury, but it is impossible to remove carbon emissions.

The Supreme Court, in Massachusetts v. EPA, ordered the EPA to make a determination as to whether carbon dioxide is a pollutant. The EPA found, based on the best scientific evidence, that CO2 is an endangerment to public health and has moved forward with regulations to reduce the carbon emissions from power plants. There will be future environmental regulations which will be costly to the coal plants. Why waste million of dollars in emission control equipment and spend millions importing coal from Wyoming when we could be transitioning to Kansas-based renewable energy?

The future: The Kansas Corporation Commission should approve upgrading the Wolf Creek plant, but carefully consider the amount of money requested. Moving forward with plans to provide customers with wind and solar energy subscriptions is in the right direction and should be encouraged. Other than that, there are better options for Kansas. The Kansas Corporation Commission should send the rest of Westar’s plan back to the drawing board.

(C)   2015 – J.C. Moore

 

The Citizens’ Climate Lobby: A Better Way to Reduce Carbon Emissions

Fri ,21/08/2015

The article “Obama orders steeper cuts from power 6coalplants” described how the EPA’s proposed limits on carbon pollution could cost $8.4 billion annually by 2030. The Citizens’ Climate Lobby (CCL) has a better way, a Carbon Fee and Dividend,  which would produce  deeper cuts in pollution in a shorter time.  CCL’s proposal would place a fee on carbon at the source, and market forces would then encourage reduced emissions, energy conservation and investments in renewable energy.  The carbon fee is not a tax and it would not raise taxes. The money collected would be distributed equally to every household as a monthly energy dividend.

CCL’s legislative proposal would set an initial fee on carbon at $15 per ton of CO2 or CO2 equivalent emissions.  The fee would increase by $10 each year until the CO2 emissions were reduced to 10% of the 1990 US levels. To protect American businesses and agriculture, adjustments at the  borders would be made on exports and imports by the US State Department to ensure fairness. The carbon fees would be collected by the US Treasury Department and rebated 100% to American households, with each adult receiving a dividend and each child one half dividend up to a limit of two children per household.

A similar Fee and Dividend policy is successfully working in Canadian British Columbia. In 2008, BC enacted a revenue neutral carbon tax which set an initial rate of $10 per metric ton of CO2 equivalent emissions, increasing by $5 per year until it reached $30, which it did in 2012. The revenue went straight back to taxpayers as tax reductions with a tax credit paid to low income households of $115.50 for each parent and $34.50 per child annually. The tax raised the price of gasoline by about $0.25 per gallon and the price of coal by about $60 per ton. Though there were winners and losers under the BC plan,  it’s GDP grew in relation to the rest of Canada’s.

bc

British Columbia gets most of its electricity from hydroelectric power, so it is difficult to estimate the effect it had on the price of electricity. There are now no coal-fired plants in British Columbia and the consumption of fuel there is now 19% below that of the rest of Canada.

In the US, all the money collected from the carbon fee would be distributed to US households as a dividend – which would effectively stimulate the economy. President Bush’s Economic Stimulus Act of 2008 provided a $600 rebate to each household. A 2012 study by Christian Broda found the increase in disposable income was an effective stimulus to the economy. President Bush’s stimulus, however, was only for one year and the money came from taxes. CCL’s proposal does not come from taxes, and a $30 per metric ton fee on CO2 is estimated to provide about $876 annually per person in the US. Though the price of gasoline and fossil fuel generated electricity will certainly go up, it will be offset by the dividend. People who reduce their energy consumption, or choose lower cost renewables, will be able to  increase their disposable income by saving more of their dividend.

The CCL Fee and Dividend proposal has a wide range of supporters such as notable climate scientists James Hansen, Katharine Hayhoe, and Daniel Kammit.  It has the support of both conservative and liberal economists such as Gary Becker, Gregory Mankiw, Art Laffer, Nicholas Stern, and Shi-Ling Hsu. CCL’s advisory board is bipartisan as it includes George Shultz, former Secretary of State under Ronald Reagan, conservative former US Representative Bob Inglis (R-SC), and RESULTS founder Sam Daley-Harris, who is an advocate for solutions to poverty.

A study by Regional Economic Models Inc. found CCL’s proposed carbon fee and dividend would achieve better pollution reduction than regulations while adding 2.8 million jobs to the economy over 20 years. Ccl

What could be a better way to reduce carbon emissions?

 

(c) 2015  J.C.Moore                   

Credit: Darrel Hart, Wichita CCL leader, who helped greatly withthe editing.  

 

Help Keep Electric Rates Low – No Extra Fees On Solar Energy

Thu ,19/03/2015

Article Photo

Many states are now seeing laws being introduced like Oklahoma SB 1456 , dubbed the Sun Tax. It is not a tax, but allows power companies to assess an extra fee on distributed generation (DG) customers who install renewable energy systems and hook to the power grid for backup. The end result will be higher electric rates as they reduce competition from renewable energy. Here is why.

ALEC: At the 2013 American Legislative Exchange Council (ALEC) meeting in Chicago, the Energy Committee, dominated by power and fossil fuel companies, decided one of  ALEC’s goals should be to discourage the spread of renewable energy. Their plan to do so was by weakening renewable portfolio standards (RPS), by claiming that renewable energy systems would make electric rates go up, and by promoting the idea that net energy metering (NEM) customers who install their own solar panels and use the grid for backup were “free riders” who did not pay their fair share of infrastructure costs. Legislation has since been introduced in a number of states intended to increase fees on NEM customers and to reduce the state’s RPS requirements.

SB 1456: Oklahoma passed SB 1456 the next year, which allows power companies to assess an extra fee on distributed generation (DG) customers who install renewable energy systems and hook to the power grid for backup. The law was designed to discourage the investment in renewable energy by private individuals, but it may have unintended consequences for the power companies pushing the fees. Under the law, both PSO and OG &E have filed a request with the Corporation Commission to assess additional fees on DG customers. Public hearings on the law will be held in Oklahoma City on March 31 at 1:30 on the third floor of the Corporation Commission Building. Studies (see below) have shown, when all things are considered, that DG customers provide a net benefit for all other customers. It is in the public’s best interest to request that not only should the fees be denied but, to be fair, the power companies should be required to compensate NEM customers for the extra power they produce.

Fairness: The rationale for SB 1456 was fairness, so the decision should be fair to NEM customers as well. First, NEM customers should be charged as any other customer for the electricity they use. DG  customers who use the grid for backup are required to have a net energy metering (NEM) contract with their power company which requires they pay for the installation and inspection of safety equipment. They also pay a customer fee which goes toward fixed costs and infrastructure, and they are currently not reimbursed for any extra power they produce, essentially providing free energy for the other customers, and they help to conserve energy. AEP/PSO’s states one of its mission is to “help customers use less energy and spend less for it”. Is it fair, then, that customers who cut their energy use in half by installing extra insulation are appreciated while those who cut their energy use in half by installing solar energy are charged an extra fee?

Second, NEM customers should be compensated fairly for the excess energy they provide. Research shows that states which encourage NEM customers have found they provide a small positive benefit both to other customers and to the power grid.  Why, then, should they be charged an extra fee?

Research: Studies have found that states which encourage net energy metering (NEM) experience a net benefit to all electric customers. A study by Crossborder Energy in 2014 found NEM allows utilities to avoid costs of generation and fuel, maintenance and upgrade of transmission and distribution infrastructure, transmission losses (which account to 7% of losses), capacity purchases, and compliance with renewable energy standards. The study concluded,” The cost which utilities avoid when they accept NEM power exported to their grid shows that NEM does not produce a cost to nonparticipating ratepayers; instead it creates a small net benefit on average across the residential markets.” While it does cause power companies to have to adjust their loads accordingly, NEM reduces peak loads, transmission losses, and the need for new power plants.  In California, the study found NEM “delivers more than $92 million in annual benefits to non-solar customers”.

Another important study was performed at the request of the Vermont Legislature who specifically charged the Vermont Department of Public Service with determining if there is a cross-subsidization with net metering and other retail customers. They were also asked to examine any benefits or cost of NEM customers to the distribution and transmission system.  The report found the specific ratepayer benefits, the statewide, and societal benefits of NEM as: “Avoided energy costs, including costs of line losses, capacity costs, and avoided internalized greenhouse gas emission costs; avoided regional transmission costs; avoided in-state transmission and distribution costs; solar’s coincidence with times of peak demand; and the additional benefit of the economic multiplier associated with the local investment and jobs created from the local manufacturing and installation of net metering systems. The report concludes, “ Even considering subsidies, solar net metering is a net-positive for the state of Vermont.”

These studies show that NEM customers provide a net benefit to ratepayers in states which encourage investments in solar and wind generation by private individuals. To be fair, NEM customers should be charged for the energy they use just as any other customer and they should be compensated for the extra energy they produce just as any other energy provider.

Unintended Consequences: Though SB 1456 was intended to discourage private investment in renewable energy, it may not turn out that way. Upon signing the bill, Gov. Mary Fallin attached a letter requiring “the Corporation commission to conduct a transparent evaluation of distributed generation consistent with the Oklahoma First Energy Plan. It also said, ” This evaluation mandates inclusion of all stakeholders including representatives of the solar distributed wind energy industries and utilities.” and “A proper and required examination of these other rate reforms will ensure an appropriate implementation of the Oklahoma first energy plan while protecting future distributed generation customers.”

The Oklahoma First Energy Policy encourages development of wind and solar energy, but it relies heavily on the increasing development of our natural gas resources. However, fracking and the associated disposal wells may be related to the increased incidences of earthquakes in Oklahoma.  If a definite link is established between fracking activities and earthquakes, it might greatly curtail Oklahoma’s production of natural gas. Oklahoma is now in the process of replacing some of its coal-fired power plants with natural gas plants. It would be prudent for Oklahoma to encourage the development of renewable energy systems. Recently, OG&E asked to increase its customer charges by $1.1 billion for federal environmental compliance and to replace an aging natural gas plant. Encouraging distributed generation customers to install extra capacity would not only help with the environmental compliance, but could eventually reduce the need to replace aging plants. Requiring that DG investors be compensated fairly for excess energy they provide would encourage them to install excess capacity to meet future demands.

A Model: Some electric co-ops , such as Oklahoma’s Indian Electric Cooperative, recognize the value of net energy metering. IEC allows net metering customers to accumulate credit for excess power and pays them at the end of the year for any excess credit at the wholesale rate, essentially treating them as any other power provider. If the Oklahoma Corporation Commission would adopt a similar model and require that NEM customers be compensated for the excess power they produce, it would greatly encourage private investments in renewable energy installations.

(C) 2015  J.C. Moore

The League of Conservation Voters: Do We Need These Policies to Benefit Big Oil

Sun ,02/11/2014

Oil has helped us develop our civilization and our economy and we will need it far into the future as a fuel and as a raw material. Four generations of my family have worked in the all business, and Big Oil does not represent the small independent oil companies we helped develop in Oklahoma.  Nor aaoildoes Big Oil represent the average American citizen very well. They represent the large international oil companies who have little loyalty to the United States, but who have enough money to influence our politics to pass laws and provide subsidies in their favor.

Big Oil has opposed regulations designed to protect people’s health and the environment. There is nothing conservative about that. The Canadian XL pipeline will allow a foreign country to take American property by eminent domain, will greatly increase the risk of damage from oil spills, and will provide oil to be shipped overseas to increase the profit of the international oil companies.

It is important that we preserve our national wildlife areas and the natural resources under them for the future, yet Big Oil is trying to remove the protections provided on our parks and federal lands. It is fiscally irresponsible to give large subsidies and tax breaks to Big Oil, made up of very profitable and well-established companies – when our country is trying to cut our national spending. And while Big Oil is promoting free market principles for itself, it is promoting anti-competitive principles and laws to reduce competition from renewable energy sources.

Recently one of big oil’s lobbyists, Richard Berman, was secretly taped as he solicited $3 million from oil and gas executives to finance an advertising public relations campaign to discredit environmentalists and celebrities that support them. He told the executives they must be willing to exploit emotions like fear, greed, and anger and turn it against environmental groups. And major corporations secretly financing such a campaign should not worry about offending the general public. he said, because “you can either win ugly or lose pretty”.

The League of Conservation Voters wishes to remind us that Big Oil is spending millions of dollars to promote candidates who will further their interests. And while some of their interests are in our national interest, many are not – and it is important that we elect candidates who will distinguish between the two. Although in the past, many conservative Republicans were champions for the environment, that has changed .  Many Republican candidates now are ranked at less than 10% by the LCV, while the national average is 43% for Representatives and 57% for Senators.   The League of Conservation Voters rates the candidates based upon their past voting records, and you may find out which candidates represent you and the environment at the LCV website.

Oklahoma SB 1456: It’s Not Really a Sun Tax

Sun ,15/06/2014

asolar Oklahoma just passed and signed into law SB 1456, meant to allow power companies to assess an extra fee on  distributed generation (DG) customers who install renewable energy systems and hook to the power grid for backup. It is not really a tax as the extra fee will go to the power company instead of the state. The law was designed to discourage the investment in renewable energy by private individuals, but it may have unintended consequences for the power companies pushing the law.

Fairness:  The rationale for SB 1456 is based upon fairness arguments which have two very erroneous assumptions. It assumes it is not fair (1) that DG customers are being subsidized by other customers and (2) that DG customers cause an extra burden on the power grid. Research shows that states which encourage DG customers have found they provide a small positive benefit both to other customers and to the power grid.  Research (see below) indicates that distributive energy generation may require fewer upgrades to the power grid, benefiting all customers. Customers who use the grid for backup are required to have a net energy metering (NEM) contract with the power company. Under those agreements, they still pay a customer fee, which defrays the cost of infrastructure, and they are usually not reimbursed for any extra power they produce, essentially providing free energy for the other customers. The power companies agree that we should encourage people to use less energy as AEP/PSO’s states its mission is to “help customers use less energy and spend less for it”. Is it fair then that customers who cut their energy use in half by installing extra insulation are appreciated while those who cut their energy use in half by installing solar energy are charged an infrastructure fee? To be fair, DG customers should be charged as any other customer for the electricity they use and they should be compensated fairly for the excess energy they provide. 

ALEC: Since the author the law is AJ Griffin, my State Senator, I contacted her about the rationale for the law. She provided me with a document called Facts and Fiction, which was very similar to the rationale developed by the American Legislative Exchange Council (ALEC) to discourage the development of renewable energy. At their Chicago meeting last year, ALEC adopted discouraging the spread of renewable energy as one of its goals. Their plan to do this was by weakening renewable portfolio standards (RPS), by claiming that it would make electric rates go up, and by promoting the idea that those who install their own solar panels were “free riders” who did not pay their fair share of infrastructure costs.

When I asked Senator Griffin if she was a member of ALEC, she said that it she had attended one of their events, which turned out to be a trip to Alberta, but she did not know if she was a member or not. ALEC is apparently a very secretive organization. She denied that ALEC had anything to do with the bill, and I believe her, as she is apparently unaware of the connection.  Sen. Griffin told me the Facts and Fiction rationale, which was distributed to the legislators in support of the bill, was prepared by a group of people who represent the electric cooperative and the investor owned power companies. It is no wonder that it was very biased toward the position of the power companies.

Senator Griffin told me she had help writing SB 1456 from Kenny Sparks at the Oklahoma Association of Rural Electric Cooperatives. When I contacted him, he said that the idea of the bill had grown out of discussions with a consortium of power producers in Oklahoma which included representatives from investor owned companies. He said electric companies were worried that distributive generation might eventually increase their costs. One of the investor owned companies was AEP/ PSO, which is a member of ALEC, and the impetus and the rationale for SB 1456 likely came from them. Mr. Sparks told me that neither the consortium, nor the group which developed the Fact and Fiction rationale for SB1456, had a representative from any renewable energy group. It also apparently did it  consider the research which shows that private investors in renewable energy provide a net benefit to the other customers.

Research: There has been credible research which establishes that there is a net benefit to all electric customers in states where net energy metering has been encouraged. A study by Crossborder Energy in 2014 found NEM allows utilities to avoid costs of generation and fuel, maintenance and upgrade of transmission and distribution infrastructure, transmission losses (which account to 7% of losses), capacity purchases, and compliance with renewable energy standards. The study concluded,” The cost which utilities avoid when they accept NEM power exported to their grid shows that NEM does not produce a cost to nonparticipating ratepayers; instead it creates a small net benefit on average across the residential markets.” While it does cause power companies to have to adjust their loads accordingly, NEM reduces peak loads, transmission losses, and the need for new power plants.  In California, the study found NEM “delivers more than $92 million in annual benefits to non-solar customers”.

Another important study  was performed at the request of the Vermont legislature and carried out by the Vermont Department of Public Service. They were charged with determining if there is a cross-subsidization with net metering and other retail customers and to examine any benefits or cost of net metering systems to the distribution and transmission system.  The report addressed the specific ratepayer benefit as well as the statewide, societal benefit of solar net as: “Avoided energy costs, including costs of line loses, capacity costs, and avoided internalized greenhouse gas emission costs.; Avoided regional transmission costs.; Avoided in-state transmission and distribution costs.; Solar coincided with times of peak demand and market price suppression.; And an additional benefit explicitly not covered in the study is the economic multiplier associated with the local investment and job creation created from the local manufacturing and installation of net metering systems. “ Even considering subsidies, the report found that solar net metering was a net-positive for the state of Vermont.

It appears from these studies that net energy metering provides a benefit to the states which encourage the installation of solar and wind generation by private individuals. That benefit even extends to other customers.

Unintended Consequences: Though SB 1456 was an anticompetitive bill designed to discourage private investment in renewable energy, it may not turn out that way. Upon signing the bill Gov. Fallin attached a letter requiring “the Corporation commission to conduct a transparent evaluation of distributed generation consistent with the Oklahoma First Energy Plan. It also said, ” This evaluation mandates inclusion of all stakeholders including representatives of the solar distributed wind energy industries and utilities.” and “A proper and required examination of these other rate reforms will ensure an appropriate implementation of the Oklahoma first energy plan while protecting future distributed generation customers.”

The Oklahoma First Energy Policy encourages development of wind and solar energy, but it relies heavily on the increasing development of our natural gas resources. However, fracking and the associated disposal wells may be related to the increased incidences of earthquakes in Oklahoma. Oklahoma is now in the process of replacing some of its coal-fired power plants with natural gas plants. It would be prudent to encourage a greater development of renewable resources in case a definite link was established between fracking activities and earthquakes, which might greatly curtail Oklahoma’s production of natural gas.

Some electric co-ops , such as Oklahoma’s Indian Electric Cooperative, apparently recognize the value of net energy metering. The company allows net metering customers to accumulate credit for excess power and pays them at the end of the year for any excess credit at the wholesale rate, essentially treating them as any other power provider. If the Oklahoma Corporation Commission would adopt a similar model and require that NEM customers be compensated for the excess power they produce, it would greatly encourage private investments in renewable energy installation. It seems it would be in Oklahoma’s best long-term interest to encourage private investment in renewable energy, and SB 1456 may be the vehicle for that to happen.

(C) 2014 J.C. Moore

The Beauty and Power of Wind Energy

Wed ,12/02/2014

Before fossil fuels, wind was man’s major source of power for sailing ships, grinding grain, and pumping water.  The beauty of ships and windmills were an endless source of inspiration for painters and photographers. Windmills were once the source of power for providing water in rural America, such as the one in the picture with the giant wind turbines towering over it. Though some criticize the wind turbines for being unsightly, they have a majestic beauty of their own. Their real beauty is in their utility as,  windmill4once built, there are no fuel costs or emissions. Much of the criticism of wind power has come from the fossil fuel industry, as it is hard to compete against a technology with no fuel costs and few  regulatory problems.

Fossil fuels now have a near monopoly on providing energy, and consumers would benefit from more competition in that market. Fossil fuels have served us well and we will certainly need them far into the future – even to develop sustainable energy sources.  But there is a trap if we wait too long, as the rising  price of traditional fuels will also increase the cost of  building the renewable sources,  possibly leading to an energy shortage before renewable sources can make up the difference.

Cost: As the cost of building new coal fired plants has increased prohibitively, a number of US power companies have taken advantage of wind energy to  increase the supply to their customers and lower their costs.  Recently, AEP/PSO  in Oklahoma was able to meet the demand caused by the heat wave in 2012 by bringing 200 megawatts (MW) of wind energy online. It recently planned to purchase 200 MW more, but took advantage of an opportunity to contract for an additional 600 MW of wind energy from facilities being developed in northwestern Oklahoma. AEP/PSO said the cost was now less than building new coal fired plants, and that the purchase will save an estimated $53 million in the first year and even more thereafter. The declining cost of wind energy is making it competitive to natural gas as well. Wind contracts in Texas, about one quarter of all US installations, are now regularly below $30/MWh. Even with a tax incentive, this still puts wind well below $50/MWh, while the comparable cost for a new gas plant is above $60 /MWh. New design and siting where there are good wind conditions allows Texas wind farms to get capacity factors around 50%. Nearly half of that occurs during peak load, defying characterizations of wind as essentially an off-peak power source.

Capacity: One criticism of wind energy is that it will not be able to supply enough power to replace the fossil fuel sources.  WindWind currently supplies about 3% of the worlds electricity and is growing 25% each year, meaning that it will double about every three years.The graph on the right shows the worldwide growth of wind power. Last year, wind farms in the U.S. generated 60,000 megawatts of energy, enough to power 15 million homes, and provided 81,000 jobs nationwide. Another criticism, based on a misunderstanding, is that there is not enough available space. Each windmill requires about about 14 acres of air space to insure they do not interfere with each other but they  require much less land space,  about 0.3 acres per turbine. Landowners can use the area below the windmills for farming or livestock, and they are compensated by a 5% royalty, about $3000 to $5000, as  each turbine generates about $80,000 in electricity.

Startup costs: To compare the costs of building new plants, the levelized costs of primary energy sources have been estimated for different regions  of the country. CostLevelized costs include all the costs of building a new plant and running it for a 30-year cost recovery period, regardless of the expected lifetime of the plant. Wind turbines may have a much longer recovery period, as some windmills in Holland have been operating for two centuries, though some of the gears are made of wood.  Though the table show some types of gas fired plants to be less costly that wind energy, the levelized costs do not include external costs, i.e.,  the costs indirectly borne by society. The external costs for fossil fuels do not include health and environmental damage from particulates, nitrogen oxides, sulfur oxides, chromium, mercury, arsenic, and carbon emissions. An EU funded research study, Externalities of Energys ,  found that including externalities would increase the cost of producing electricity from fossil fuels by a factor of 30% for natural gas to about 90% for coal, if costs to the environment and to human health were included. If we include the  costs of letting fossil fuel release  their waste products into the environment, then sustainable energy sources have a big cost advantage.

Criticisms: The  intermittency of the wind is a problem, as is the lack of a way to store the energy. Putting wind electricity into the power grid solves some of the problem, as conventional sources can take up the slack. Each unit of wind energy put on the grid saves about three times as much in fuel energy, as conventional plants are only about 30% efficient. Better storage technology is under development , but conventional sources will be needed  as backup in the mean time.

Wind turbines are also criticized, somewhat unfairly, for their noise and for bird deaths. The noise underneath a well maintained turbine is not much louder than from the wind turning it. The turbines are responsible for bird deaths, but they are not among the top ten human causes of bird mortality. A peer reviewed Canadian study of bird mortality finds that less than 0.2% of the population of any bird species is currently affected by mortality or displacement by wind turbine development. The study concluded that even though the number of windmills are projected to grow ten times over the next two decades, “population level impacts on bird populations are unlikely, provided that highly sensitive or rare habitats, as well as concentration areas for species at risk, are avoided.”

Subsidies: While once the problem was getting electricity to rural America, the problem now is getting wind electricity from rural areas to population centers. It will require a large investment in research and infrastructure to develop wind energy. As Washington struggles to balance the U.S. budget, possible cuts in subsidies has created an uncertainty hindering investments in wind energy. While it is the national interest to subsidize the development of sustainable energy resources, a much larger share of tax breaks go to well established and profitable fossil fuel companies. The United States’ yearly subsidies to the fossil fuel industries amounts to about $13.6 billion, while all renewable energy subsidies together amount to about one sixth as much.

Our energy needs will best be served by a mixture of traditional and alternate energy sources, and we should not let unfair criticisms or politics keep us from developing the alternate sources.

(c) 2014  J.C. Moore    

Wind Energy and Bird Mortality

Tue ,07/01/2014

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A rather curious letter recently appeared in the Tulsa World Editorial page titled Wind Turbines, by Jim Wiegand, Redding, CA.  Mr. Weigand has no ties to Tulsa, yet the editor published it and added a note: “Wiegand is a nationally recognized wildlife biologist and expert on the effects of wind turbines on birds.” The letter started with, “The wind industry is hiding massive turbine-related bird and bat genocide. The industry has created fraudulent mortality studies and been given voluntary guidelines in order to hide its slaughter.” The letter never mentioned birds again but went on into conspiracy theories and a criticism of wind energy.   

 Wind-turbines do sometimes kill birds and bats, but bird genocide? In other of his writings, Mr. Wiegand claims windmills are responsible for dozens of Whooping Crane deaths, and that wind turbines will cause their extinction within five years. So far, there is not one Whooping Crane death that can be attributed to windmills.  Carla Gilbert, in a post to the article, disputed the danger to similar birds. “When I was traveling in Portugal a number of years ago we could see many wind turbine farms from the highway. We were informed that the storks like to build their nests atop them. When the bus stopped for refueling I took pictures of the storks sitting on their nests atop the turbines and saw several storks coming and going from their nests. I did not see any injured or dead birds.” And, the storks are not becoming extinct as a result of the windmills. One falconer, who was at first worried about the windmills, now puts his falcon boxes on wind turbines and does not consider them a greater threat to birds than his picture window.

There has been considerable opposition to windmills and of renewable energy in general, so it is difficult to know whether all the criticisms are factual. Studies have found about an average of five to eight dead birds per windmill. That is about the number of birds who do themselves in on a picture window each year. When you add in the birds killed by cars and by hunting, it would seem that man’s other activities are a greater threat to the birds than wind turbines. For birds, the main threats are windows, cars, climate change, disease, hunters and pesticides.

There is a concern for protected species such as lesser prairie chickens and eagles. There are severe penalties for harming eagles, so to be on the safe side, the owners’ of windmills apply for permits to legally kill eagles. That has caused quite an outcry, but recently, the government gave the companies a 30 year moratorium on enforcing protection laws, while they study the problem. HPIM2053aIt does not seem likely that an eagle would fly into a windmill, particularly since another criticism is about the noise windmills make. Still there are confirmed reports that 85 bald eagles were killed by windmills in the past five years,  about 17 per year. Eagles are at the top of the food chain, so any environmental pollutant is likely to harm them, and DDT was the main cause of their population decline. Once DDT was banned and eagles became protected, their population recovered to about 140,000 in North America. They have been taken off the threatened species list. They are harmed by many pollutants associated with energy production – about 280 were killed by the Exxon Valdez oil spill. It is a shame when one of the magnificent birds is killed by accident, but if we cut out any activities that might harm them, then we would have to cease much of our energy production. **

 

The concern about the lesser prairie chicken is that they avoid tall structures, and windmills might cause them to move from their normal habitat. Prairie chickens gather to mate each spring in large communal areas called leks. One enterprising oil company, opposed to wind power, drove a group of reporters up to a lek in the Osage Hills. They wanted to show the reporters what might be lost if windmills were built there, as if driving a van full of reporters around their lek is not going to disturb them. Many of the problems with wildlife and noise could be addressed by where the windmills are sited, and reasonable laws are needed to see that the windmills will disturb animals and people as little as possible.

Research finds the actual evidence of bird kills by windmills to be greatly exaggerated. In the Journal of Applied Ecology Volume 49, Issue 2, pages 386–394, April 2012, the authors found the impact of wind farms on bird populations to be minimal with the greater impact being during construction than during subsequent operation. A comprehensive study of bird mortality in Canada found most human-related bird deaths (about 99%) are caused by feral and domestic cats, collisions with buildings and vehicles, and electricity transmission and distribution lines.  A related peer reviewed Canadian study of bird mortality says their data suggests that less than 0.2% of the population of any bird species is currently affected by mortality or displacement by wind turbine development. They concluded that even though the number of windmills are projected to grow ten times over the next two decades, “population level impacts on bird populations are unlikely, provided that highly sensitive or rare habitats, as well as concentration areas for species at risk, are avoided.”

Mr. Wiegand’s letter is mostly fiction. A search shows that Mr. Weigand has a degree in biology from the 1970’s and makes his living by selling antiques.  He has done nothing that would qualify him as an expert in wildlife biology, and none of his claims, here or elsewhere, are backed by credible research. His avocation is writing letters to newspapers and posting comments on websites critical of wind energy. Some people can’t see the value, or the beauty of windmills, and they look for any excuse to criticize them.

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Smoky Hills Wind Turbines Greet the Sun.

**Note  added on  09/20/2015:  Here is an estimate of the number of birds killed by  each  major energy source from US News and World Reports..

 

usnews-avian-mortality-energy-source

 

(c) 2014 J.C. Moore