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Posts Tagged ‘air pollution’

Paris Climate Conference: Pope Francis and CEOs Urge Action

Fri ,23/10/2015

On his world tour, Pope Francis called on world leaders to address climate change in November at the Paris Climate Conference. eiffelIt is not just religious leaders and climate scientist who are concerned, but business leaders who are aware that climate change will hurt the world’s economy. A recent study, published in the journal Nature, found that temperature change due to unmitigated global warming will leave global GDP per capita 23% lower in 2100 than it would be without any warming.

Joining the call for action on climate change are companies such as Nike, Walmart, Goldman Sachs, Johnson & Johnson, Proctor & Gamble, Salesforce, Starbucks, Steelcase, and Voya Financial, all who have adopted a goal of 100 %  renewable energy.  Food Companies are concerned that climate change is threatening our food supply. CEOs of Kellogg’s, Mars, Dannon, Ben & Jerry’s, Stonyfield Farms, and Nestlé have signed a letter urging US and global leaders to “meaningfully address the reality of climate change.”

By this week, 81 big-name corporations representing 9 million employees and $5 trillion in market capitalization have signed on to the President’s “Act on Climate” pledge.

 

THE AMERICAN BUSINESS “ACT ON CLIMATE PLEDGE”

 “We applaud the growing number of countries that have already set ambitious targets for climate action. In this context, we support the conclusion of a climate change agreement in Paris that takes a strong step forward toward a low-carbon, sustainable future.

We recognize that delaying action on climate change will be costly in economic and human terms, while accelerating the transition to a low-carbon economy will produce multiple benefits with regard to sustainable economic growth, public health, resilience to natural disasters, and the health of the global environment.”

 

The list of the corporations taking the pledge and a summary of their pledges are listed in this White House fact sheet. Their pledges set ambitious, company-specific goals such as:

Reducing emissions by as much as 50 percent,

Reducing water usage by as much as 80 percent,

Achieving zero waste-to-landfill,

Purchasing 100 percent renewable energy, and

Pursuing zero net deforestation in supply chains.

Most importantly, these companies set an example to their peers who will be asked to sign onto the pledge before the Paris Conference.

The plan to reduce emissions with broad bipartisan support in the US is the carbon fee and dividend as proposed by the Citizens’ ccl1Climate Lobby. Their proposal would place a fee on carbon at the source and allow market forces to encourage reduced emissions, energy conservation, and investments in renewable energy. The carbon fee is not a tax as proceeds would be distributed equally to every household as a monthly energy dividend. It would effectively stimulate the economy and add an estimated 2.8 million jobs over the next 20 years. What could be a better plan?

 

(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

Bits and Pieces: Oklahoma Must Increase the State Renewable Energy Standards

Sun ,01/06/2014

The fifth IPCC report says that the most important thing we can do to mitigate global warming is to switch to renewable energy as windmill4quickly as possible. Investing in clean energy helps fight climate change, reduces death and disease from air pollution and creates good, local jobs. Most states have adopted a Renewable Portfolio Standard (RPS) which requires that a certain percentage of the electricity generated in the state be from renewable resources.

Across the country, 30 states and the District of Columbia have renewable electricity standards in place that require a certain percentage, some as high as 33%, of all electricity to be generated from clean and renewable sources of energy. Oklahoma requires only 15% . It is 11.25% in actuality, because the legislature allows the utilities to meet a quarter of the renewable requirement by conservation. Oklahoma has the potential to be a leader in renewable energy but it is falling behind because the state is not being proactive in encouraging investment in renewable energy.

It is time for that to change. With the increased phase out of coal fired plants and the uncertainty in natural gas prices and supplies, Oklahoma must act to insure a supply of electricity for the future. We have a good supply of natural gas, but that could change if fracking and disposal wells are linked to water pollution and earthquakes.

Every state should adopt a Renewable Portfolio Standard, and states which already have them should increase the percentage of electricity produced by renewables. It’s time for the Oklahoma legislature to pass a renewable electricity standard that requires utilities to invest more in clean sources of energy. Click here and sign a Credo petition to the Oklahoma Legislature if you agree. You do not need to be a citizen of Oklahoma, as air pollution affects us all.

 

Oklahoma: Where We Subsidize Air Pollution and Earthquakes

Thu ,17/04/2014

Oklahoma is now coming in near last in most measures of civilized society, yet it is still cutting taxes – even as the Capitol Building is falling down. Generous in their hearts, the state Legislature has dug deep into the states resources to find a few hundred  million to continue its subsidies for state businesses.

One little-known act of generosity is the subsidies to the state coal mining industry. They’ve had a tough time of it, as Oklahoma’s coal is high in sulfur and is not worth much on the fuel market. Over the years the subsidy has been increased from $1 per ton to $5 or $10, no one is quite sure. Estimates are that the subsidies are costing the state about $16 million per year. That is not much when you consider what Oklahomans get for it, richer insurance companies and air pollution.

The subsidy is paid as a tax credit, but the coal mines are mostly unprofitable and pay very little in taxes. The laws were a little vague about what to do with the leftover credits, so the coal companies were  selling them to insurance companies at a discount, providing cash for the coal companies and a few million dollars per year for our struggling insurance companies. That cushy deal was cut out of couple of years ago, and the coal mines are now required to return the credits to the state for $0.85 on the dollar.

Since nobody really wants to buy Oklahoma’s coal, the Legislature required that Oklahoma’s coal-fired power plants buy and use 10% of it to generate power. Since many of the power plants do not have adequate pollution control and scrubbers, the high sulfur coal produces more particulates and aerosols, which are considered air pollution by that interfering old EPA.

The state Legislature is now working on a bill which will put a three-year moratorium on building new wind farms in the Eastern Oklahoma while they study the problem. There are 27 windfarms in Western Oklahoma and a number of reports about their success, but apparently it will take the legislature three years to get around to looking at them. I brought that up as the Legislature seems much less curious about the relationship between fracking and earthquakes.

A bill to put a three-year moratorium on fracking while the problem is studied – would likely get little support in the state Legislature. Besides, that would leave a lot of money in the Legislature’s pocket with no place to spend it. While digging around for money to support the coal industry, the Legislature turned up an extra $200 million or so, which they are now using to subsidize fracking in Oklahoma. The legislature thinks the subsidy is important as it keeps our frackers from moving out of state, though some tightwad skeptics have pointed out that the frackers are probably here because that’s where the natural gas is.

Earthquakes

Click to enlarge.

It seems that there’s been a small increase in earthquakes in Oklahoma since fracking started, as shown in the graph. However our state Legislators are not big on graphical data, as it might involve statistics and is most likely based on models or something like that that you can’t trust. And they are not much for research either, as it appears that the federal government has known for decades about the link between injection wells and earthquakes.

A number of our citizens, particularly those whose walls and foundations are developing cracks, or those whose chimneys and other stonework are falling down, are beginning to wonder. Getting back to that crumbling infrastructure, there’s been a lot of unusual damage lately to roads and bridges in areas prone to earthquakes. And then there is the problem with the crumbling Capitol Building. Unfortunately, we will never know the cause as the Legislature just doesn’t have the time or money to study the problem.

(C) 2014 J.C. Moore

OK SB 1440, Blowing Away Wind Development in Eastern Oklahoma

Sat ,12/04/2014

Wind is in good supply in Oklahoma, leading to a “wind boom”  in Western Oklahoma. Congressman Frank Lucas supports what he calls the  “all of the above” policy on energy sources, and recognizes and supports the importance

of wind energy development in the third Congressional District, which covers the northwestern two thirds of Oklahoma.  The wind industry has taken off in Oklahoma because the state has enacted policies, such as a five-year property tax exemption and a production tax credit, that are more conducive and supportive of the wind industry than neighboring states. Until now.

Though there is plenty of wind in Eastern Oklahoma, the political climate is not good for wind development there. Senate Bill 1440, by Senate President Pro Tem Brian Bingman , passed last week by a vote of 32-8 and is headed to the House for consideration. The bill puts a three-year moratorium on development of wind energy East of Interstate 35, which essentially prohibits any further wind development in the eastern half of the state for three years. The rationale was that the issue “needed more study”.  But, for three years?

It should take about 30 minutes to discover the advantages of developing wind energy in Oklahoma. Oklahoma has spent more than a decade developing wind energy and there are now 27 windfarms in Oklahoma. Mr. Bingham and his supporters should be well aware of them, or they could just study the report compiled by independent consulting firm Economic Impact Group. The report shows that wind industry construction and operating activities from 2003 to 2012 in Oklahoma have created:

  • More than $1 billion in Oklahoma production of goods and services
  • More than $340 million in labor income
  • More than 1,600 direct full-time jobs
  • More than 4,000 total jobs including manufacturing and support industries
  • More than $1.8 billion of economic activity during the first 20 year contracts
  • More than $43 billion in property taxes annually after the tax abatement.
  • More than $22 million annually to landowners and $15 million in wages to local workers

 

Other than ignoring the contribution of wind energy to economic development in Oklahoma, there are a number of other things wrong with SB 1440. It infringes on property rights as it tells landowners how they cannot use their  land, if they live on the wrong side of I-35. It is probably unconstitutional, as there is really no rationale for such an arbitrary division of who can and cannot develop wind energy. It singles out and treats wind energy differently from other energy industries. That was pointed out by Senate Floor Leader Mike Schulz, R-Altus, who voted against the bill, “We have been writing oil and gas legislation and regulations for over 100 years and continue to do so,” he said, “I don’t anticipate anything different in the wind industry.”

The United States has the goals of achieving energy independence, reducing carbon emissions,  and and cutting air pollution. However, a number of politicians have been working against those goals by trying to hinder the development of alternate energy sources. There is nothing that hinders investments more than uncertainties in the investment climate. At one time, Tulsa was the home of DMI industries, a wind turbine tower manufacturer employing 167 people. The plant was closed in 2012 because of changes in the subsidy program that created uncertainty in the funding for the business. Even if SB1440 doesn’t pass, it will have a chilling effect on investments, as even the possibility of a ban creates uncertainties that discourage investors. SB1440 was designed to slow the development of wind energy in Oklahoma. Mr. Brian Bingman and his supporters are clearly not acting in Oklahoma’s best interest.

Note added on 07/10/2014: SB 1440 fail to pass this past legislative session, so Mr. Bingman has now requested that the Oklahoma Corporation Commission begin a study of wind farms, hoping the Corporation Commission will recommend legislation to limit the development of wind farms. Mr. Bingman, who has been exposed as a member of ALEC,  is following the goals of ALEC, one of  which is to stop the development of renewable energy sources.

(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    

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

 

Is There a Ban on Incandescent Bulbs ?

Sun ,10/07/2011

While Congress is wrestling with the problem of keeping our country from going bankrupt, some in Congress and our business community are concerned with the serious problem of  – light bulb standards. The Investor Business Daily posted an editorial “Let There Be Lights” on 07/08/2011. (1)  Although it is an opinion piece, it does not represent an informed opinion. The article claims that the ban on incandescent light bulbs sums up everything that’s wrong with intrusive, nanny-state government. However,  there is no ban- just efficiency standards that some incandescent bulbs cannot meet.

It is interesting  that the The Republicans for Environmental Protection are opposed to eliminating the standards while Republicans in Congress, such as Joe Barton and  Michelle Bachmann are pushing  HR 91, a bill which is designed to scuttle the efficiency  standards. The Investor Business Daily editorial uses many of the  politician’s arguments, apparently without checking the facts.  The article starts :

”Energy: The ban on incandescent light bulbs sums up everything that’s wrong with intrusive, nanny-state government.”

But, there is no ban- just efficiency standards that some incandescent  bulbs cannot meet.  The Republicans for Environmental Protection are opposed to eliminating the standards and here is what they say:

“There is no light bulb ban. There never has been. The bulb ban rhetoric misrepresents a 2007 law that sets efficiency standards for general-purpose, screw-in light bulbs. In fact, new, efficient incandescent bulbs that meet the new standards are already on the shelves of your local Home Depot. That fact has not prevented Barton, Bachmann and others from pushing legislation, HR 91, to scuttle the new standards. It is likely that HR 91 will come up for a vote in the House over the next few weeks.” (2)

The Investor Business Daily opinion article goes on :

” As the law stands, the incandescent light, the greatest invention by America’s greatest inventor, Thomas Edison, will disappear at the end of this year. It is being replaced with an unproven substitute — the compact fluorescent light, or CFL — that is both politically foolish and bad science.”

 Eh? The incandescent bulb will not disappear. It will still be available in more efficient designs. And CFL bulbs for home use are based on the same proven technology as other fluorescent light bulbs.  I cannot think of a company, school, or public building that does not use fluorescent light bulbs to save energy and avoid maintenance costs.

The editorial also puts words in the mouths of proponents:

 “Proponents claim CFLs would provide lots of healthy light but use as much as 30% less energy. Not true.” And “- because CFL bulbs cost as much as 20 times more than the reliable old incandescent bulbs, consumers will pay through the nose for pretending to be green. “

The article would like for you to believe that CFL’s are only 30% more efficient but no proponent would claim that.  CFL’s are three to four times as efficient as regular bulbs and last about 10 times as long. As to cost, where do they shop? Many electric coops sell CFL bulbs for $1.00 and they are less than $2.00 at most discount stores.  I doubt if you can find an incandescent bulb for  1/20th of that. And, over the life of the CFL bulb, it will save approximately $9.00 in operating cost over the ten incandescent bulbs it will replace.

Finally, the editorial wants you to be afraid:

“As for safety and disposal, the CFLs are downright dangerous. They contain toxins such as mercury, arsenic, lead and cyanide. You can’t just throw them out — they have to be recycled in a way that’s expensive.”

 Do they realize that much of our electricity is produced by coal-fired power plants. Coal contains a trace amount of mercury, lead, and arsenic  – but considering that we burn 7 billion tons of coal each year –  50 tons of mercury  and many tons of other heavy metals are emitted into the air annually. The mercury and other pollutants are carried to the ground by rain and much of them end up in our lakes and streams where they enter the food chain.  It’s true that CFL’s should be recycled, but even if you don’t, using them will keep much more mercury and other pollutants out of the environment. (3)

(1)    http://www.investors.com/NewsAndAnalysis/Article/577799/201107081902/Let-There-Be-Lights.htm

(2)    See : http://capwiz.com/repamerica/issues/alert/?alertid=51013516&queueid=7101172991 The article contains a link for you to contact your Legislator. 

(3)    http://jcmooreonline.com/2009/08/21/mercury-in-fish/

(c) 2011  J.C. Moore