Posts from — May 2009

As a physicist, my belief is that one of the reasons that intelligent energy policies have not gained sufficient traction is that we are allowing those with political agendas (vs scientists) to define some key energy terms. And as a golfer, I know that a wager can be won or lost at the first tee — where the terms and conditions are agreed on.

Outside of “fiscal responsibility” probably the most significant misused concept that we have unwittingly gone along with is the term “renewable energy”. Giving some critical thought to this moniker is no academic matter, as the majority members of the U.S. Senate’s Energy Committee are currently pushing for a national Renewable Portfolio Standard (RPS), or what is now called the Renewable Electrical Standard (RES). Their decision as to what is a “renewable” will have profound technical, economic and environmental consequences on the United States.

To my knowledge there is no “official” definition of this bandied about term. [Read more →]

[Editor note: the current debate over climate policy has obscured another important energy-policy controversy: the notion that the production of hydrocarbons (even coal) has, or will soon, reach a physical peak. This post, like the author's previous ones on this subject, shed light on the fallacious concept (from a business/economic viewpoint) that mineral supply is fixed and thus depleting.]

The recent death of Patrick McGoohan brings to mind one of the best lessons offered by television, and one ignored by all too many analysts (including academic economists). In an episode of his cult-classic series The Prisoner, McGoohan is confronted with a unique teaching system, wherein “The General” pumps information into villagers while they sleep. The General proves to be a ‘supercomputer’ (presumably less capable than desktops now available) containing all known information. McGoohan causes it to breakdown by asking the simple question “Why?”

It has become common amongst many academics to do research that consists primarily of examining streams of data, using sophisticated mathematical tests. For example, Maslyuk and Smyth (2009) test to see if oil production data show unit roots. Slade (1982) and Pindyck (1999) examine price series to determine the appropriate path of mineral and/or energy prices, and particularly whether linear or quadratic equations better fit historical data. But none of them include any explanatory variables, that is, none ask why production or prices behave the way they do, and they typically ignore the effects of price controls, tax changes, and so forth. [Read more →]

In a provocative post, Joe Romm argues that even “strong climate action” would be well worth the effort. Yet Romm’s claim that stabilizing atmospheric greenhouse gases at 445–535 ppm (CO₂-eq) would cost only “one tenth of a penny on the dollar” (through 2050) understates the IPCC’s actual cost estimate by about 95%. In reality, the IPCC’s reported estimate translates into a mitigation cost of about 2.2 cents on the dollar–far far higher than Romm’s figure. Romm’s mistake has nothing to do with climate science: he simply confuses the rate of growth in income, with income itself.

To make matters worse, even when correctly interpreted, the IPCC estimate significantly understates what the cost will be in practice. The IPCC admits that its estimate is a theoretical textbook case, which assumes all participating countries implement their mitigation policies perfectly, and keep them in force throughout the 21st century. To the extent that any major government deviates from this flawless enforcement, even if just for a few years during a severe recession in (say) the years 2030–2032, then the costs of achieving the stipulated atmospheric concentrations will rise above the stated figure.

Presumably none of these details will alter Joe Romm’s conclusion. After all, he contrasts the slower economic growth resulting from new government regulations to the “incalculable cost of catastrophic global warming impacts to the next 50 generations.” With such a specter in mind, it hardly matters how much potential income the world will forfeit in order to meet Romm’s desired concentration targets. Still, for those who do think magnitudes are important, I explain below exactly how Romm managed to so severely understate the IPCC’s own estimate of the costs of mitigation. [Read more →]

Editor Note: This letter from a U.S. citizen/taxpayer to the U.S. Department of Energy is an example of grass-root opposition to government-dependent windpower. For a previous post along the same lines, see “New York’s Thousand Islands Are Being Ruined” (Letter to Sen. Schumer on the blight of government-dependent windpower).

Dr. Steven Chu
Secretary of Energy
U.S. Department of Energy
1000 Independence Avenue S.W.
Washington, DC 20585

Dear Secretary Chu:

You and other officials of the US Department of Energy should be ashamed of yourselves because:

· Despite thousands of employees and billions in our tax dollars, you have found it necessary to have some low level “energy analyst” from a CONTRACTOR organization reply to an email from a US citizen and taxpayer, and

· The reply was so lacking in substance (see attached) that your contractor (and, presumably, your staff) apparently assumes that citizens and taxpayers outside Washington have no knowledge of DOE programs or the true costs and benefits of wind energy – the subject of my email.

It certainly appears that DOE officials have forgotten that they have an obligation to citizens, consumers, and taxpayers who provide all the money that flows through the DOE to employees and contractors. Instead, DOE officials and contractors behave as if their sole obligation is to special interest groups, including the wind industry, that are enjoying billions in tax dollars.

I have studied wind energy for several years and I am well aware of its true environmental, energy, and economic costs and benefits and I am well aware that DOE officials—especially those in your Office of Energy Efficiency and Renewable Energy (DOE-EERE), your national “laboratories,” and especially the National Renewable Energy “Laboratory” (NREL)—are highly biased and repeatedly engage in: [Read more →]

Is the proliferation of electronic devices in homes and offices causing a net increase or decrease in electricity consumption and greenhouse gas emissions?

This question has been a topic of heated controversy ever since 1999, when technology analyst Mark P. Mills published a study provocatively titled “The Internet Begins with Coal,” and co-authored with Peter Huber a Forbes column titled ”Dig more coal – the PCs are coming.”

Others–notably Joe Romm and researchers at the Lawrence Berkeley National Laboratory–argued that the Internet was a minor contributor to electricity demand and potentially a major contributor to energy savings in such areas as supply chain management, telecommuting, and online purchasing.

Mills and Huber argued that digital networks, server farms, chip manufacture, and information technology had become  a new key driver of electricity demand. And, they said, as the digital economy grows, so does demand for super-reliable power–the kind you can’t get from intermittent sources like wind turbines and solar panels. [Read more →]

“Since 1976, Enron [and predecessor company] employees have been at the forefront of developing air credit trading policies for governments and businesses…. Enron today is the largest and most sophisticated air emissions credit and allowance trading organization in the United States. Since 1990, Enron has participated in over 80 SOx allowance transactions and has also been active in establishing policies for trading NOx in the United States and carbon [dioxide] world-wide.”

- “Enron Corp.’s Participation in Air Trading,” Enron Capital & Trade Resources, November 4, 1996 (copy in files).

“If implemented, [the Kyoto Protocol] will do more to promote Enron’s business than will almost any other regulatory initiative…. The endorsement of [CO₂] emissions trading was another victory for us…. This agreement will be good for Enron stock!”

- John Palmisano (December 12, 1997) from Kyoto, Japan. Quoted in Bradley, Capitalism at Work, p. 307

“If anyone has environmental credit needs, that’s what we do. We want to be to be the clearing house to monetize available credits or to manage risk.”

- Kevin McGowan, director of coal and emissions trading, Enron Corp., (Enron Biz, November 29, 2000, copy in files)

“We are a green company, but the green stands for money.”

- Jeff Skilling, CEO, Enron Corp., quoted in Capitalism at Work, p. 310.

Enron is Exhibit A against Waxman/Markey’s cap-and-trade proposal. Enron was poised to make money coming and going by being the nation’s and the world’s largest market-maker in CO₂ permits, and the “smartest guys in the room” were ready to game and game for incremental dollars (remember California?). Enron’s business model, in retrospect, had to do with regulatory complexity, [Read more →]

[Editor's Note: Projected emissions from China will more than cancel the effects of Waxman-Markey in the year 2050 when the proposed law's 83% cut in U.S. emissions would be fully imposed. This finding, calculated with the assistance of Chip Knappenberger and the MAGICC model, is part of a wide-ranging analysis below. Discussion, comments, and questions are invited by the author.]

The Waxman-Markey climate bill–characterized as a “648 page cap-and-trade monstrosity” by Al Gore’s mentor, James Hansen–is intended to bring the U.S. into line with Europe and Japan on CO₂ policy. But as I have explained previously, the current U.S. policy discouraging new coal and new nuclear capacity will:

1. Make the U.S. more dependent on energy imports,
2. Drive up generation costs,
3. Artificially incite demand for fickle natural gas, and related infrastructure such as LNG regasification facilities, and
4. Increase reliance on old coal and old nuclear for baseload power, resulting in less efficient, less clean, and less reliable electricity.

Such government intervention will block self-interested private investors who would otherwise provide America with more domestic, lower-cost energy, and more modern infrastructure for better reliability. And ironically, our more expensive, imported and unreliable electricity system will hardly make a difference in worldwide CO₂ levels and associated global climate change. [Read more →]

Supporters of the Waxman-Markey climate bill have not seriously disputed the extreme costs and the negligible benefits estimated by critics of the cap-and-trade proposal.  I must confess that I was expecting a real fight, but some very important markers seem to have been laid down in this legislative debate. Waxman-Markey supporters are going beyond the math to dispute the conclusion being drawn from the math. And that conclusion, which logically follows, is that cap-and-trade for carbon dioxide is a very bad deal. [Read more →]

“Binding emissions targets for the developing nations are out of the question.”

- Eileen Claussen, Pew Center on Global Climate Change, March 2009

As I demonstrated in my analyses last week (here and here), the impact on global temperatures of U.S. actions to reduce greenhouse gas emissions pursuant to the Waxman-Markey climate bill (which called for a whopping 83% reduction by 2050) was close to nil. Or more precisely, about 0.05°C (0.09°F) by the year 2050, expanding to maybe 0.1°C–0.2°C by the end of the century, depending on, among other things, which future emissions course is assumed as the baseline.

And as the negotiations continue into the specific details of the proposed legislation, the emission reduction schedule has begun to slip—and so too does the potential climate impact.

So what is the temperature impact of a dirty Waxman-Markey bill versus the “clean” bill’s 0.05°C/0.09°F? (Hint: divide by half and even half again.) [Read more →]

This has been the busiest period in the short life of MasterResource (we are less than five months old). Our viewership this week has exceeded ten thousand, and cross posts on mega-blogs across the political spectrum have introduced us to new audiences. MasterResource, an energy scholars’ blog (but one that is accessible to the general reader), is on the map!

Two issues have driven our recent traffic. One is the temperature analysis of the Waxman-Markey climate bill by environmental scientist Chip Knappenberger. His straightforward analysis (but don’t ask me to use the MAGICC model!) reflects Chip’s usual careful scholarship. I expect that it will not need to be substantially revised (no complaints so far at RealClimate). But if errors are found, Chip will be the first to thank the reviewer and make the changes.

I know Chip personally, and I have worked with him for more than a decade. In our camp, he has a reputation for telling it like it is in regard to climate science and climate observations to “skeptics” and “alarmists.” Knappenberger’s beginning post in a series questioning “ultra-skepticism,” for example, has attracted critical attention (and maybe even made him some enemies in such a contentious debate). Expect more interesting posts from Chip in his effort to identify the middle way between “skepticism” and “alarmism.”

The second issue driving our record views involved Joseph Romm of the mega-blog Climate Progress. [Read more →]