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| Beijing smog in January 2013 |
A couple of weeks ago, the
New York Times published an article about the successful roll back of green energy mandates in Ohio. The writer made
it sound as though the evil fossil fuel lobby convinced gullible legislators to
“freeze the phase-in that utilities must buy from renewable energy sources”.
What disturbed me about
the article is that it made no mention of the economic considerations. If the original plan, passed in 2008, was
allowed to go forward, what would happen to the cost of energy in a state that
has seen its manufacturing jobs heading for other places for many years?
As a society, we prefer a
clean environment. No one wants his or
her kids to breath dirty air or drink polluted water. We have all seen pictures of the smog in
Beijing. And, Ohioans over the age of 50 can remember the sight of the Cleveland's Cuyahoga River on fire in 1969.
But, can we have our cake
and eat it too? Can we eliminate fossil
fuel energy without causing economic calamity?
That question will be
subject to the usual partisan politics that have affected all of the important
issues of our time. And, once the new
EPA mandates are made effective next year, there are bound to be battles fought
in court.
But, if we can get past
all that, is it feasible?
The new mandates require
each state to reduce its output of carbon by 30% from 2005 levels by 2030. Ten states have already met that requirement. Four of them (New York, New
Hampshire, Maryland and Massachusetts) – members of the Regional Greenhouse Gas
Initiative – have reduced carbon by nearly 40%.
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| Cuyahoga River on fire in 1969 |
So, how will we get there?
Everyone has a theory, it
seems. Many are intriguing. Fresh Energy CEO Michael Noble posits that an ultra low carbon system can be set up through a hybrid of nuclear and renewables. The idea of nuclear energy
sets off alarm bells in the minds of many Americans. However, it has been used safely to provide
75% of the power in France for over 30 years.
And, new technologies, such as the use of thorium rather than more volatile light-water reactors, make nuclear safer than it has been in the past.
A Stanford University
research team led by civil engineer Mark Jacobson has developed a roadmap for
each of the 50 states to reach 100% sustainable energy by 2050 using existing
technologies. Stanford’s roadmap
suggests we replace fossil fuel plants as they age out so as not to drive up
costs.
Whatever roadmap we, as a
nation or state-by-state, decide to pursue, there will be bumps along the
way. Projects will stall. There will be cost overruns. The promised benefits will be under
delivered. And, whenever that happens,
opponents on the political right will say, “I told you so”.
From the left, we hear
that the green lobby has criticized the new EPA mandates as not being
aggressive enough. Any suggestions of
energy sources that will provide a “bridge” to a sustainable future are
unacceptable to them. However, economic
feasibility is an important criterion in order to maintain the support of the
consuming and voting public. In the near
term, converting power plants from coal to natural gas will reduce both cost
and greenhouse gas emissions.
New methods of extracting
natural gas (hydraulic fracturing or fracking) have made this alternative to
coal inexpensive and available. The
conversion from coal to natural gas can be done so quickly and cost-effectively
that 15% of US power plants will have converted by the time the new government
mandates kick in at the end of next year.
The abundance of natural
gas within our borders promises to reduce oil imports and provide cheaper
electricity while the alternatives are being developed and scaled. Bans on fracking and pipeline construction
that will deliver natural gas safely and cheaply are counterproductive.
Further, fears about the
dangers of fracking are unfounded. According
to Scientific American the question isn’t whether it can be done safely. It’s “will it be done safely?”
What are essential are
careful planning, flexible regulations and the support of a well-educated
public. If we can get past the usual tug-of-war
between the extreme left and right, we can achieve a sustainable energy future
without damaging our economy.
The only question…
WHO WILL LEAD?
Sean McGinty, MBA
ReplyDeleteQuality Manager at Amtraco LLC
As I understand the carbon reduction we've seen in the northeast, those programs only turned out to be cost neutral or slightly positive because of falling natural gas prices. If their energy mix had stayed the same, residents of those states would now be paying significantly less for energy thanks to lower natural gas prices. Conversely, if the administrations efforts to curb fracking had worked as planned, natural gas prices would have risen as a result of the increased demand and those carbon reduction programs would have been very costly.
David Beemer
ReplyDeletetemporarily retired at Home
ummm----natural gas prices DID increase, and propane increased even more, and faster. Look into the last twelve months. My cost per therm of natural gas from last January was up on the prder of 2/3 over the cost a year ago last January. My folks in Michigan, one of the propane capitols of the world, fill up a couple of pigs every year, and their cost doubled a year ago last July.
Maybe there's a regional difference? I can't say.
Also, I would hesitate to say it is the administration that is looking at curbing fracking. Mostly, it is in fact the locals in the areas where fracking is occurring that are complaining about it. EPA acts on complaints, which is why companies engaged in fracking are using non-disclosure agreements when they buy people out.
Sean McGinty, MBA
ReplyDeleteQuality Manager at Amtraco LLC
According to the EIA, residential, commercial and industrial gas prices have fallen from a high in 2007-2008. Still, it might be more accurate to say the increased supply of natural gas mitigated the price hikes that the spike in demand would otherwise have caused, making these projects economically viable.
Michael Carron
ReplyDeleteDirector at Gulf of Mexico Research Initiative (Gulf of Mexico Alliance)
Another possible hidden cost for cheap gas (methane)... http://stateimpact.npr.org/texas/tag/earthquake/
Christopher Santos
ReplyDeleteRoyal Dutch Shell
You end your blog with the "only" question "Who will lead?" I think there are many other questions. Foremost of these would be "Why bother?". You article seems to starts with the conclusion that we must eliminate fossil fuel use. You ask "...can we have our cake and eat it too?" I ask, do we need "cake?" The law may require reducing carbon outputs, but laws can change, as you point out in Ohio. I do not recommend returning to the days where factories dump there waste into rivers (Cuyahoga 1969), but neither do I think we need to reduce carbon outputs to save the planet from climate disruption nee climate change nee global warming nee global cooling. I find it strange that our society thinks in terms of right, left, center. I understand it makes discussions much easier to categorize using that spectrum, but where does the free-market enter into the separation of right and left? Many would probably place a "free-marketer" in the right, but there is no preclusion to being left-wing and a proponent of the free market. (Unless one thinks that left wing ideology is so detrimental to society that the free-market would reject it.) My answer to the question of global warming, carbon reduction, and just about any other public policy question is the free-market. It has always worked for the betterment of the majority of society, and I see no reason to think it won't continue to do so. I believe many people would look upon "the free market" as not an acceptable answer to "who will lead?" But I like it.
@Christopher. Thanks for the thoughtful reply. I must confess that I started my research for this article from the perspective that if people want it, the free market will provide it. However, the more reading I did, the more I began to believe that it won't happen unless the government mandates it. I must admit that, in the interest of saving space, I was a bit glib about this point (comparing utilities to Apple).
ReplyDeleteYou will note that I didn't use the term "climate change" or "global warming" anywhere in the post. All of my reading there (as well as discussions with scientists) tells me that the evidence is inconclusive and the forecasts are wildly speculative.
Free market companies are spending lots of money on R&D that will likely yield improvements in solar, battery and nuclear technology over the next 5 to 15 years that will make these alternatives economically feasible. However, there would be no R&D if there were no government mandates. Government has been a prime mover in other macroeconomic shifts in our history, providing support to RR and the steel industry in the 19th C., building transportation infrastructure in the 20th and funding pure R&D throughout.
I don't believe that government should have a heavy hand (such as investing taxpayer dollars in green tech ventures). However, I DO think that government must create predictable policies so that free enterprise can thrive.
It's difficult for me to say why "society thinks in terms of right, left and center". I speculate that it's largely driven by a news media that seeks to attract eyeballs by sensationalizing the political melodrama.
Some people have suggested that my blog is too cynical, always looking at the negatives. However, big changes require big majorities that cross traditional party lines. What is required of "leaders" is that articulate a vision that resonates with the public and support a plan that achieves it or, at least, takes major steps in that direction.
As for the "why bother?" question. I believe that the public wants it and that the free market can't do it without the right regulatory regime.
John McDowall
ReplyDeleteSystems Engineer and Enterprise Architect
The real issues are not technical -- we know how to generate electricity relatively cheaply and cleanly; we know how to build and operate nuclear plants safely; we know how to drill cleanly; etc.
The issues are political and ideological. They are fueled by people on the left and right who, for whatever reason, are committed to some particular course of action. The conflicts are able to continue because politicians and bureaucrats who do not understand the technical issues they are attempting to manager are forced to rely on outside experts, or are themselves committed to some ideological agenda.
Completely eliminating fossil fuels will be very expensive because pound-for-pound, we know of nothing else that packs that much energy and is usable in so many applications from multi-megawatt power plants to lawn mowers. No amount of legislating, regulating, or other nonsense from DC will change the laws of physics and alter that equation. Allowing activists to drive up the cost of nuclear plants through excessive litigation doesn't help matters either.
That said, combining a judicious use of different mixes of fossil fuels with modern nuclear plant designs, including some very intriguing developments in the area of small nuclear reactors, can go a long way toward reducing emissions, reducing or eliminating dependence on mideast oil, etc. This also has the potential to make energy even cheaper and more abundant across the world. Cheap and abundant energy are the keys to improving living conditions for those in less-developed areas (I hesitate to say "reducing poverty" because the definition of "poor" is both relative and slippery).
So what's the solution? A good start would be to require that regulators and their supervisors actually understand the technical aspects of what they're supervising. Quit appointing people with degrees in public policy or law and start appointing engineers to these jobs. Making those kinds of policy jobs attractive to engineers will require other changes, but that's a different topic. Another good start would be requiring a peer reviewed, publicly released cost-benefit analysis of regulations, including period updates after a regulation is adopted to make sure the costs remain reasonable given the observed benefits.
Stewart Lenox
ReplyDeleteOwner, Principal Designer at Lenox Design
Hi John,
As an Ohioan, I can tell you that nobody here wants a return to the coal smoke blackened days of yore. I remember when I was a kid and the snow would only stay white for a few days.
Happily, coal is being burned much more cleanly than in the past, and natural gas is plentiful. When I talk to people here about energy, most believe in an "all of the above" approach, with an ever increasing reliance on greener methods. The thing of it is, that this part of the country has been slowly trying to climb out of post industrial depression for a generation. The last thing we need is for energy prices to skyrocket, forcing the manufacturing that we still have to move elsewhere. You can pick just about any community here in NE Ohio and read about the effect of it's major industry moving south, or worse, overseas. It's not ideal, but neither are most things in reality.
atural gas prices had been on the rise since the late 90's due largely to the shift from coal to natural gas for new electrical generation capacity. The 2007 bubble accentuated that trend due to instabilities in global supplies (war in the middle east, political unrest in South America, various natural and man-made disasters plaguing offshore wells). Other than that spike, prices have been trending downward since 2005. http://www.eia.gov/dnav/ng/ng_pri_sum_dcu_nus_m.htm
ReplyDeleteBy Sean McGinty, MBA