J.C. Moore Online
Current Events from a Science Perspective

Archive for the ‘Energy and the Environment’ Category

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

T

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.

IMG_0945a

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

 

 

A Politically Viable Alternative to Cap and Trade

Thu ,15/08/2013

Global warming could be addressed by a carbon tax if the tax revenue was divided and each taxpayer given an equal share as a dividend.

Dr. Theda Skocpol , a Harvard University scholar and a former president of the American Political Science Association, recently addressed an audience at Tulsa University about the futility of pursuing a cap and trade policy to reduce carbon emissions. Cap and trade was once considered to be the free market solution to pollution as it was used successfully by Presidents Reagan and George H. W. Bush to reduce the sulfur emissions causing acid rain. To address carbon emissions by cap and trade legislation seemed to have the support of both businesses and politicians when it came up in Congress in 2008. However, it failed by a wide margin, even though Democrats controlled both houses of Congress. Dr. Skocpol was commissioned to study why. She quickly decided the question was not why the legislation failed, but why anyone thought it could pass. “Anybody who thought any issue having to do with environmental regulation or global warming was not a partisan issue … wasn’t looking at the data,” she said.

 Research: Dr. Skocpol’s research was aimed at understanding why the legislation failed. The League of Conservation Voter’s scores on environmental issues showed that about 55 % of the Congressional Democrats and 30% of the Republicans had pro-environmental scores in 1970. However, those began diverging in the middle 1990’s and by 2008 the scores averaged about 85 % for the Democrats and about 20% the Republicans. Clearly Congress had become more polarized on the issue, with many Republicans changing their position and Democrats, particularly those from fossil fuel producing states, having little incentive to support regulating carbon emissions.

The reasons had to do with popular attitudes about the cost and the actual threat posed by climate change. Addressing climate change would raise energy prices in the near future, while the benefits would mostly be to future generations. A survey examining tolerance for costs found those in the lower income brackets would be willing to pay up to 20% more for electricity while those in the top brackets would be willing to pay 10% more. Beginning about 2005, there was a stepped up media campaign to spread  misinformation about the cost to taxpayers and doubt about the scientific evidence for climate change. One false claim was that cap and trade would cost each U.S. household $3,100 a year. However, John Reilly, the MIT economist who authored the study, said that talking point was a serious distortion of his work. The EPA estimated more realistically that it would cost on average about $140 per household annually.

The opponents of regulating carbon emissions followed the successful path used by the tobacco industry. Rather than trying to address the evidence compiled in thousands of scientific research papers, the fossil fuel companies use their vast resources to spread doubt about the conclusions of the research and the effect it would have on the Earth’s ecosystems, climate, and weather. They used the same network of foundations, Libertarian think tanks, front groups, and hired grassroot organizations used by the tobacco industry to spread doubt. And, it worked. Many people were unwilling to support environmental regulations that might raise energy prices, particularly if there might be doubt about the scientific evidence. When it came right down to it, the public did not understand cap and trade well, and distrusted a system created by big business and politicians.

Dr. Skocpol’s graph below shows how the change in voter attitudes correlated with the propaganda campaign to spread doubt.

skop

Clearly, the opinion of  voters , particularly Republican voters , had changed. Dr. Skocpol commented that data shows the question really was “not why cap and trade didn’t pass, but why anyone thought it would”, given the polarization that existed in Congress and in the population. It was her opinion that any attempts to revive a cap and trade agreement would be futile. Dr. Skocpol pointed out that her assessment comes not from a climate-change denier, but from someone who believes irreparable damage might already have been done to the atmosphere. But as a political scientist, she said the data is quite clear: “Congress has no  interest in or incentive to act. ” What then can be done?

The Energy Dividend: Certainly the problem needs to be addressed, and it was her opinion that progress could only be made if everyone was given a stake in the solution. Her proposal was that it could be addressed by a carbon tax if the tax revenue was divided and each taxpayer given an equal share as a dividend. The dividend would be $800 per year if the carbon tax was the same as Australia’s, $23 per ton of CO2 emitted. Alaska has used a similar system successfully by taxing oil produced on public land and dividing some of the revenue equally among all Alaskan citizens. Over the past 31 years, each man, woman, and child in Alaska has received on average $1100 per year from that tax revenue.

The energy dividend produced by a tax on carbon should also help the economy. In 2008, George W. Bush gave each taxpayer a one-time $300 (or greater) tax rebate to stimulate the economy. A several hundred dollar energy dividend each year would give each citizen a stake in reducing carbon emissions and make up for any increase in energy prices. The tax on carbon would also level the playing field for other energy sources, making investments in renewable energy more desirable.

Note added on 06/21/2014:  Henry Jacoby, an economist at MIT’s business school, says there’s really just one thing you need to do to solve the climate change problem: Tax carbon emissions. “If you let the economists write the legislation,” Jacoby says, “it could be quite simple.” He says he could fit the whole bill on one page. Click here for his article.

(c) 2013 J.C. Moore

 

 

Should the U.S. Subsidize Fossil Fuel Companies?

Wed ,10/04/2013

The world needs a reliable supply of energy. To ensure that, many countries have granted subsidies and tax breaks to fossil fuel companies to help develop energy resources. However, with the concern over our carbon emissions and over the economic crises that many countries are facing, the wisdom of continuing those subsidies needs to be examined. The fossil fuel companies are now quite profitable. As the chart below shows, two of the five most profitable companies in the U.S. are oil companies with Exxon Mobil greatly exceeding the profitability of the other four.

 Exxon

 It is understandable that some countries may still need to subsidize fossil fuel companies, but fossil fuel companies receive about six times as much in subsidies as sustainable energy sources. The International Energy Agency reports that subsidies to oil companies in developing countries could reach as much as $630 billion in 2012, with those in developed countries adding about $58 billion.  Below is a breakdown of the subsidies in developed countries along with their commitment to Fast Start Financing, which supports immediate action by developing countries to strengthen their
resilience to climate change and mitigate their greenhouse gas emissions, including those from deforestation.

 Subsidies

 

The United States’ yearly subsidies to the fossil fuel industries amounts to about $13.6 billion. As Washington struggles to balance the U.S. budget, that is certainly one of the cuts that should be considered. The Institute for Policy Integrity lists the number of laws giving tax breaks to energy companies. It lists 38 for the fossil fuel industries, 25 for all the renewable energy sources together , and one break for nuclear power. 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. But that’s not the whole story.

Some of the tax breaks and subsidies meant to promote the development of renewable energy sources end up with the fossil fuel companies. For example, the Georgia Pacific paper company, a subsidiary of Koch oil, mixes  a byproduct of paper production, called black liquor, with diesel to make a product they claim as a biofuel. This fuel cannot be used in transportation, and can only be burned as fuel in their plants. However, Koch has managed to qualify the black liquor mixture to take advantage of the biomass fuel assistance program and has received $5 billion in subsidies for the process. Though Koch is on the record as being against green energy, funds meant for green energy projects are subsidizing the fuel for Koch’s paper mills.  Congress tried to close this loophole, but the effort was ultimately defeated.

The fossil fuel companies have become so large and so adept at lobbying, that they often distort U.S. policies for their own benefit. For instance, Exxon pays a lower tax rate than the average American. Between 2008-2010, Exxon Mobil registered an average 17.6 percent federal effective corporate tax rate, while the average American paid a higher rate of 20.4 percent. In spite of that, the company complains about its high taxation and is currently running ads against the Obama administration’s efforts to cut $36 billion in tax loopholes and subsidies to help balance the budget. Large oil companies are now multinational companies which have little allegiance to the United States. According to a Mother Jones article, “Exxon has 20 wholly owned subsidiaries domiciled in the Bahamas, Bermuda and the Cayman Islands that (legally) shelter the cash flow from operations in the likes of Angola, Azerbaijan and Abu Dhabi. Of the $15 billion in income taxes it paid in 2009, Exxon paid none of it to the United States, and it has tens of billions in earnings permanently reinvested overseas.” We should ask why our government is providing subsidies and tax breaks to companies that have little legitimate need for them and apparently little allegiance to the United States.

(c) 2013 J.C. Moore

Who Wants to Kill the Electric Car?*

Fri ,13/01/2012

 Who wants to kill the electric car? Apparently, a lot of people do. During the 1920’s, the Milburn electric cars were popular, particularly with the ladies who didn’t like cranking gasoline engines to start them.  In 1928, General Motors bought the Milburn out and it disappeared. In 1996, the EV1 electric cars appeared on roads in California. They were quiet and fast and produced no exhaust fumes. They were manufactured by GM under a mandate to reduce vehicle emissions. Ten years later, these futuristic cars were almost completely gone. A documentary, Who Killed the Electric Car , determined that the batteries were not the problem but that the culprits were mainly oil companies who stood to lose enormous profits if EV sales took off and GM, who didn’t think they would make enough profit from the car. If GM had developed and improved the EV1, they might not have gone bankrupt.

House Of Cards: Much of the damage to the EV1 was done by misinformation directed at politicians, regulatory agencies, and the consumer. The same campaign is being used against the new crop of electric cars. In a Seeking Alpha article, Why The Electric Vehicle House Of Cards Must Fall, John Petersen continues the tactic. First, Mr. Petersen determines the value of an electric car by using an “analysis that starts with a $19,000 gasoline powered vehicle, deducts the costs of unnecessary internal combustion drivetrain components and then adds the incremental costs of necessary electric drivetrain components.” This analysis found a $38,800 cost for an electric vehicle. That cost is not unreasonable but the analysis is something like taking a conventional oven, stripping it, and adding parts to convert it to a microwave. There are many hybrids and electric cars on the market that have an MSRP much less than $38,800, such as the 4 passenger Mitsubishi MiEV which is rated at 112 MPGe and listed at $21,625. The price of the vehicles will certainly come down, as Department of Energy Secretary Steven Chu said at the Detroit Auto Show he expects the cost for electric car batteries to drop from a whopping $12,000 in 2008, to $3500 by 2015 and $1500 by 2020. Currently there are waiting lists to purchase many electric cars and hybrids because of high demand, so there is little chance for price negotiations.

The article goes on, “Electric drive proponents are selling a house of cards based on fundamentally flawed assumptions and glittering generalities that have nothing to do with real world economics. Their elegant theories and justifications cannot withstand paper, pencil and a four function calculator.” However, Mr. Petersen bases his economic analysis on his $38,800 cost and a list of subsidies from what he calls an “extraordinary article”, The Real Costs of Alternative Energy by Alex Planes . Fortunately for the future of electric cars, Mr. Planes’ real costs are extraordinarily misleading.

Subsidies: Mr. Planes says, “a clear-headed look at the true costs of energy is something many — including our political leaders — sorely need.” He goes on,“Subsidies are just one of the costs of supporting alternative energy, but are they worth it?” Using U.S. Energy Information Administration data, Mr. Planes calculates the subsidies to energy sources in terms of the dollars per barrel of oil equivalencies. The subsidies he comes up with are coal: $0.39, oil and gas: $0.28, solar: $63, and wind $32.59. Based on his values, he says renewable energy’s costs to the government are “in some cases so high, and the actual energy returns so low, that it hardly seems worth the investment. Solar’s pitiful slice of American power use — less than a single day’s worth of oil consumption — is underwritten by enough taxpayer money to simply buy most of the power outright and provide it to taxpayers for free.” Subsidies are a poor way to estimate “true costs” as they are more indicative of the perceived future value of the resource to society.

True Cost? The reason Mr. Planes article is extraordinarily wrong is that he does not really give you the “true cost” of the use of fossil fuels. The true cost  of a resource includes not only the price but also the cost of cleaning up the environment and disposing of the waste. Fossil fuels dispose of their waste by releasing it into the air which causes damage to the environment and health problems for many Americans. We are in effect subsidizing the fossil fuel industry by the cost of allowing them to freely discharge their wastes into the environment. Any effort to determine the “real cost” of subsidies should include health and environmental costs. Mr. Planes says in the comments section of his article that he perhaps should rewrite his article to include what he calls the external costs. In the meantime, many people are using his incomplete analysis to disparage sustainable energy sources.

A Truer Cost: It is difficult to come up with an exact value for the “real subsidies” to the fossil fuel industry, but it is possible to estimate their magnitude. Top economists such as Britain’s Nicholas Stern, using the results from formal economic models, estimates that if we don’t limit our carbon emissions, the overall costs and risks of climate change will be equivalent to losing at least 5% of global GDP each year, now and forever. If a wider range of risks and impacts is taken into account, the estimates of damage could rise to 20% of GDP or more in the future, and we would run the additional risk of an environmental catastrophe.

Using 5% of the US GDP for 2010 would give an environmental cost of $727 billion. 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. They estimate the economic benefits associated with reduced exposure to soot to reach as much as $281 billion annually. Those two add up to about $1.01 trillion, and when divided by the 13541 million barrels of oil equivalent given in Mr. Planes article for coal, gas and oil together amounts to an additional subsidy of $73.9 per barrel of oil equivalent. The subsidies to wind and solar electric energy do not look so bad if you actually use fossil fuels: $74, solar: $63, and wind: $32.59. The calculations do not include all the environmental and health costs, but they do give an idea of how much we are subsidizing the fossil fuel industries by ignoring the damage to people’s health and the environment. Then there is the added risk of an environmental catastrophe.

 Disclosures: In an apparent effort to be evenhanded, as required by Motley Fool, Mr. Planes then concludes, “Wind and solar power have their drawbacks, but continue to make notable improvements year after year. However, neither option can yet provide the clean, constant, and convenient power the world demands. Natural gas offers the best opportunity for the near term. It’s plentiful, well-developed, and efficient, and will take on greater importance as dirtier hydrocarbons lose market share. ” Mr. Planes then offers you a free analysis of an “exciting opportunity to play the natural gas boom, by investing in a small company turning our oil-guzzling vehicle fleet into clean-burning natural gas machines.” He disclosed that he holds no stock in natural gas vehicles, but he may not be disclosing a bias against renewable energy. He refers to one of Robert Bryce’s books in his paper and his analysis sounds much like those in Mr. Bryce’s “Power Hungry: The Myths of ‘Green Energy’ and the Real Fuels of the Future”. In Mr. Bryce’s  5 Myths about Green Energy, he attacks green energy using false comparisons, misquotes, scientific inaccuracies, and the omission of pertinent facts. It is not surprising that  Mr. Bryce is not a fan of green energy as he is a senior fellow at the Manhattan Institute, which receives large donations from the Koch Foundation and Exxon/Mobile.

 Mr. Petersen, using Mr. Plane’s analysis, finds, “The law of economic gravity cannot be ignored and will not be mocked. Shiny new electric vehicles from General Motors, Ford Nissan, Toyota, Tesla Motors and a host of privately held wannabe’s like Fisker Motors and Koda are doomed to catastrophic failure. Their component suppliers will fare no better. There is no amount of political or wishful thinking that can change the inevitable outcome.” When Mr. Petersen was asked about the omission of health and environmental costs in a comment on his article, he replied he was only interested in “hard authoritative numbers.”

 Obscenity? Mr. Petersen goes on, “The ultimate obscenity is that a conversion from gasoline drive to electric drive will not reduce the total amount of energy used in transportation. It merely shifts the energy burden from lightly subsidized oil and gas to more heavily subsidized energy from coal, nuclear and renewables.”  Not really. The amount of energy used would be reduced even if using electricity from traditional coal fired power plants to charge the electric vehicle. Coal-fired power plants have a thermodynamic efficiency of about 30%. Electric motors are now about 90% efficient in converting electric energy to work and when considering friction, power line transmission losses, energy lost when the batteries are charged, and the energy gained by regenerative braking, the overall efficiency of using coal to run electric cars comes out around 20%. Internal combustion engines have a thermodynamic efficiency of about 15% but drive train losses reduce that to an overall efficiency around 10%. These efficiencies are reasonable as a  paper by Stanford University  comparing “source to wheel efficiencies” rated the electric Tesla at 1.145 km/MJ of and the gasoline powered Honda Civic at 0.515 km/MJ. At current prices, that figures out to about 5 cents/mile for the Tesla and about 12 cents/mile for the Honda.

  Using sustainable energy sources to charge the batteries would be the ideal case as the “energy source to wheel” efficiency would be 60 to 80% and the carbon emissions would be greatly reduced.  There would be a substantial savings in energy and carbon emissions even if using electric cars charged using coal-fired power plants. Electric vehicles have the added advantage that the infrastructure to charge the batteries is already in place. The electric car does not seem to be built on such a house of cards as Mr. Petersen’s article suggests.

An article titled Investors See Climate Opportunity to Make Money, Create Jobs, reports 450 large institutional investors who control more than $20 trillion worldwide, agree “climate change is a risk to avoid and also an opportunity to make a good return on investments.” It reports “Global clean-energy investments reached $260 billion in 2011, some five times more than the $50 billion in 2005.” Our energy needs will best be served by a mixture of traditional and alternate energy sources and we should not let pessimistic analyses keep us from investing in and developing the alternate sources.

* Revised to include a more recent Stern Report on 01/22/2012.

 (c) 2012 J.C. Moore