Posts from — August 2009
[Editor note: Mr. Lynch's op-ed in the New York Times last week stirred a good deal of comment and disagreement from "peak oil" proponents. His response is here]
The publication of my op-ed on peak oil in the New York Times brought forth the usual tidal wave of criticism. The Oil Drum went so far as to put up a separate page for comments, and Joseph Romm issued a ‘challenge’ to me to wager on oil prices. (For an executed bet coming due next year, see the appendix below.)
Responding to each and every comment, or even the main ones, would be a Herculean (and Sisyphean) task, so I will (here) make some hopefully useful observations.
First, I apologize to Fatih Birol for lumping him in with the peak oil advocates. He is pessimistic about supply, as are many others, without being in the ‘peak oil’ camp, and he informs me that the widely-cited Guardian interview misrepresented his views.
Second, many comments bordered on the bizarre, to the point where a number of my friends—who are not acquainted with oil—found them so. (Just as an example, I was not director of the Center for International Studies, nor am I currently employed by M.I.T.)
Third, readers should understand that an op-ed piece is intended to express opinions, it is not a research piece, thus it was not loaded with facts and citations. The Times was kind enough to give me much more space than usual (hey, it’s August), but even so it would take an entire book to address most of these issues in detail.
The intellectual tradition behind resource expansionism (versus the fixity/depletion view) is a rich one, calling to mind such names as M. A. Adelman and Julian Simon. An overview of this theory, and its rich intellectual history, is provided by Robert L. Bradley Jr. in Resourceship: An Austrian Theory of Mineral Resources (28 pages). [Read more →]
August 31, 2009 43 Comments
I have lamented how the editorial board of my hometown Houston Chronicle long ago took a hard left position on the “problem” and “solution” of anthropogenic global climate change. Not even the U.S. House of Representatives’s Waxman-Markey climate bill–labeled a “monstrosity” and “less than worthless” by NASA scientist and Al Gore mentor James Hansen, and “out of control” by UN Foundation head Tim Wirth–has loosened the grip of climate alarmism and policy activism at the Chronicle despite an opposite view by the paper’s popular business editorialist Loren Steffy.
Last week, an estimated 3,500 Houstonians, the large majority working for oil and gas companies, gathered at the Verizon Theater downtown to protest Waxman-Markey’s carbon-dioxide cap (cap-and-trade, correctly identified by Tim Wirth as a carbon tax). The protest was covered nationally by the New York Times and the Wall Street Journal, and reported as a news item in the business section by the Houston Chronicle. Such was expected, as was the Left’s characterization of the event as industry sponsored and largely industry attended. Fair enough.
But why didn’t the editorial board of the Chronicle weigh in on this major event in some way. [Read more →]
August 29, 2009 2 Comments
“No, I have to do this my way. You tell me what you know, and I’ll confirm. I’ll keep you in the right direction if I can, but that’s all. Just… follow the money.”
- Deep Throat to Bob Woodward, All The President’s Men (1976).
Yesterday’s post at MasterResource presented seven areas where the American Clean Energy and Security Act of 2009 (H.R. 2454, aka Waxman-Markey) bribed segments of the electric utility industry into support. So it should come as no surprise that there are specific companies and technologies that are well positioned to gain quick, big bucks by its legislative requirements should climate legislation become law in its current form.
I have discussed carbon legislation with many of these companies that publicly declare their concern about anthropogenic climate change yet privately see this as the greatest money-making opportunity of their lifetimes. The Bootleggers and Baptist model of government intervention is in clear evidence. Adam Smith must be turning over in his grave given the enormous “invisible handout” that Waxman–Markey provides to a select few in the electricity generation market.
Five Link Chain
In “Federal Actions Will Greatly Affect the Viability of Carbon Capture and Storage as a Key Mitigation Option,” released September 30, 2008, the GAO found that a key technological barrier to carbon capture and storage (CCS) deployment was a lack of experience in capturing significant amounts of CO2 from commercial-scale power plants. The significant cost of retrofitting existing plants, which it deemed “the single-largest source of CO2 emissions in the U.S.,” also hampered deployment. The GAO also found that both the EPA and DOE had yet to comprehensively tackle the full range of issues that would require resolution for large-scale deployment. The GAO was spot-on in their conclusions. [Read more →]
August 28, 2009 7 Comments
Waxman–Markey's Gravy Train: Why the Electric Industry Got on Board (Getting favors, adding pages to H.R. 2454)
“I expect all the bad consequences from the chambers of Commerce and manufacturers establishing in different parts of this country, which your Grace seems to foresee…. The regulations of Commerce are commonly dictated by those who are most interested to deceive and impose upon the Public.”
- Adam Smith, 1785 letter. In The Correspondence of Adam Smith. (1)
The American Clean Energy and Security Act of 2009 (H.R. 2454, aka Waxman–Markey) was narrowly adopted by the House of Representatives on June 26. As has become standard practice, few legislators were familiar with the final 1,428-page bill, given all the horse-trading hours before the final vote.
Waxman–Markey was a low point in the political process, but what made passage possible was worse: highly organized support from some quarters of the electric utility industry and a lack of protestation from much of the rest.
Some industry parties believe that their lobbyists successfully watered down an extremely disruptive legislative draft to the point that the final was merely distasteful. But compared to killing the bill, which could have been done had the industry been so minded, getting “a seat at the table” resulted in passage.
I remember when “getting a seat” in legislative negotiations included infiltrating and defeating bad proposals. Today, it means ensuring your company gets a piece of the political pork. Such “rent-seeking” substitutes political capitalism for principled free-market capitalism and leaves virtually all of us poorer.
There are a variety of sections buried in the 1,428-page Waxman–Markey climate bill that clearly benefit a select few electric utilities. My post tomorrow will discuss which vendors and electric utilities are best positioned to greatly benefit by these legislative requirements should they become law.
The Winners (at our Expense)
A new study by the Energy Information Administration (EIA), Energy Market and Economic Impacts of H.R. 2454, reveals several very interesting, perhaps unintended, consequences that Waxman–Markey will have on the electric power industry. [Read more →]
August 27, 2009 5 Comments
MIT climate scientists Richard Lindzen and collaborator Yong-Sang Choi soon-to-be published paper (Geophysical Research Letters, American Geophysical Union) pegs the earth’s “climate sensitivity”—the degree the earth’s temperature responds to various forces of change—at a value that is about six times less than the “best estimate” put forth by the Intergovernmental Panel on Climate Change (IPCC). The smaller the climate sensitivity, the less the impact that rising carbon dioxide levels will have on the earth’s climate. The less the impact that CO2 emissions will have on the earth’s climate, the less the “problem” and ability to reverse the “problem.”
Lindzen and Choi’s findings should come as a solace to those folks who are alarmed about future climate and as a bulwark to those folks fighting to limit Congresses negative impact on U.S. energy supplies and our economy. Indeed, climate sensitivity to GHGs is the multi-billion dollar question in climate science. If climate sensitivity is low, then the earth’s temperature doesn’t react very much to variations in processes which impact it—such things as solar variations, volcanic eruptions, cloudcover fluctuations or changes in the concentration of greenhouse gases.
If, on the other hand, the climate sensitivity is high, then changes in the climate drivers can lead to large changes of the earth’s average temperatures. Another way to think of it is that the lower the climate sensitivity, the more stable the earth’s climate.
Climate sensitivity is hotly debated because we have don’t have a good enough handle on the magnitude of the earth’s past temperature changes and an even worse understanding on the magnitude of the variation of climate drivers. So while theoretically evaluating the climate sensitivity is as easy as dividing the temperature change by the forcing change, in practice, a poor understanding of both the numerator and the denominator have made it virtually impossible to pin down.
IPCC Estimatation and the ‘Wild Card’ of Clouds
In its 2007 Fourth Assessment Report (AR4), the IPCC claims that the climate sensitivity to a doubling of atmospheric greenhouse gas concentrations likely falls in the range of 2.0°C to 4.5°C. This is based on a combination of studies, some making determinations based on historical data, others basing their results on climate model output.
But again, the problem with the former is an observational record that is not accurate enough to make a reliable calculation; the problem with the latter is that the physical processes simulated by climate models are limited both by our less-than-perfect understanding of these processes as well as by modern-day computation power (which limits the temporal and spatial resolution of the climate simulation).
One area where climate models are particularly weak is in their ability to accurately simulate clouds and cloud variations. And, as you probably could have guessed, clouds and cloud variations play a pivotal role in establishing the earth’s average temperature.
There is a fast-growing evidence base that clouds respond to changes in greenhouse gas concentrations quite differently than the climate models predict that they should. Instead of acting to enhance the warming produced by increases in the earth’s greenhouse gas concentrations, it seems as if clouds may, in fact, act to suppress the rate of greenhouse gas-induced temperature rise.
The latest findings to this effect by Lindzen and Choi add to the work that Roy Spencer and several other researchers have been doing for years in this arena. Instead of a climate sensitivity lying within the IPCC’s range of 2.0° to 4.5°C, Lindzen and Choi report it to be about 0.5°C—six times less than the IPCC’s “best estimate” of 3.0°C. [Read more →]
August 26, 2009 28 Comments
More Deceit from Climate Progress, Center for American Progress (Is Joe Romm shooting himself in the foot?)
“Sorry to bother you with this. See the attached pieces. Rob [Bradley] is obviously not a fan of renewables or the global warming issue. Unfortunately, he works for a company that is.”
- Tom White (CEO, Enron Renewables Energy Corp.) to Ken Lay (CEO, Enron Corp.), June 8, 1998
Joe Romm, for the fifth time (the previous four are here, here, here, and here) has purposely obscured the record of my association with Enron in an attempt to discredit the Institute for Energy Research. I founded IER in 1989, in fact, to give myself an independent voice in the energy policy debate. And I used IER to challenge my employer Enron on the issues of climate alarmism and government-dependent renewable-energy investments.
Here is Romm’s headline from yesterday’s Climate Progress:
The latest polluter front group trying to kill the clean energy bill is overseen by a proud former shill for a man convicted on fraud and conspiracy charges
Romm’s angst is centered on the American Energy Express bus tour sponsored by the American Energy Alliance, which is affiliated with IER. The tour is bringing the message of free-market energy abundance and affordability to the heartland of America–and thousands are listening, learning, and supporting.
The tour’s powerful message of fewer and lower energy taxes will be more widely heard thanks in part to Joe Romm himself, whose radicalism and raw animosity–and even hate (he has repeatedly called me a “sociopath” in private emails)–is turning off the great middle. Romm reversed course to support the “grotesque” Waxman–Markey, no doubt under orders from his bosses at CAP. Romm’s bully-like attacks against James Hansen, Sierra Club/Environmental Integrity Project/Earthjustice, RealClimate, Energy Action Coalition, The Washington Post, The New York Times, and more, certainly put me in broad company!
I have conscientiously rebutted Romm’s previous ad hominem attacks against me. [Read more →]
August 25, 2009 3 Comments
Texas Wind Power: Reality vs. Hype (despite burdensome state mandate, only a 1.2% share projected for 2014)
“The first great requisite of motive power is, that it shall be wholly at our command, to be exerted when, and where, and in what degree we desire. The wind, for instance, as a direct motive power, is wholly inapplicable to a system of machine labour, for during a calm season the whole business of the country would be thrown out of gear.”
- William Stanley Jevons, The Coal Question (1865), p. 122.
Texas has repeatedly been lauded as a leader in wind power development. Some of that attention is deserved. In 2008, the state installed nearly 2,700 megawatts of new wind capacity. If Texas were an independent country, it would rank 6th in the world in terms of total wind power production capacity. But such growth is not the result of the free-market energy choices. It resulted from statewide renewable mandates passed in 1999 and 2005.
The state’s Republican governor, Rick Perry, has been among the state’s most ardent wind power boosters, declaring a few years ago that “No state is more committed to developing renewable sources of energy.” He went on, saying that by “harnessing the energy potential of wind, we can provide Texans a form of energy that is green, clean and easily renewable.” The Lone Star Chapter of the Sierra Club has repeatedly trumpeted wind power development saying that it “means more jobs for Texas, less global warming from coal plants and less radioactivity from nuclear plants.” The group says that wind power in the state “has exceeded all expectations” and has created “an estimated $6 billion investments and 15,000 new jobs” for the state.
In June, shortly before the US House voted on the cap and trade bill, President Obama reminded reporters that Texas has one of the “strongest renewable energy standards in the country….And its wind energy has just taken off and been a huge economic boon to the state.”
Hype vs. Reality
Alas, the hype exceeds the reality. [Read more →]
August 24, 2009 9 Comments
[Editor Note: This piece was orginally published by the Institute for Energy Research and is reprinted with permission]
There are two futures for energy, depending on which socioeconomic system we adopt. The free-market promises a bright energy future, while the opposite path of political energy is dark. In that sense energy differs little from other goods and services (such as health care): its supply will depend on whether economic laws are allowed to work or are hampered by political intervention.
As the late Julian Simon explained, the future for free-market energy is positive. “It’s reasonable to expect the supply of energy to continue becoming more available and less scarce, forever.” So Simon said in his most influential book, The Ultimate Resource. This prediction riled his Malthusian critics, who labeled Simon a naïve romantic. He responded: “I am not an optimist, I am a realist.” In fact, Simon himself had once been a Malthusian and concerned about overpopulation and scarce resources, until the data reversed his thinking.
But abundant free-market energy requires free-market institutions: private property rights, voluntary exchange, and the rule of law. [Read more →]
August 22, 2009 3 Comments
“The Republicans are right — it’s a cap-and-tax bill. That’s what it is because they are raising revenue to do all sorts of things, especially to take care of the coal industry, and it makes no sense.”
- Tim Wirth, “Climate Bill ‘Out of Control,’ Former Senator Says,” Bloomberg, August 18, 2009.
“Trading of rights to pollute … introduces speculation and makes millionaires on Wall Street. I hope cap and trade doesn’t pass, because we need a much more effective approach.”
- Remarks of James Hansen, 350 Climate Conference, Columbia University, May 4, 2009 [Speech writeup in Appendix below]
Left commentators are interpreting what has gone wrong with the Obama healthcare plan. One explanation is the sheer complexity of the legislation. “[Obama] had a near-Depression to deal with, and a banking crisis of mammoth proportions,” stated MSNBC’s Howard Fineman. “But all the telephone-book-sized legislation and proliferation of czars left a lot of independent voters scared — and they are running from him now.”
The Waxman-Markey climate bill (HR 2454) is part of the same problem. Explained Fineman: [Read more →]
August 21, 2009 2 Comments
Cap-and-Trade Creators Dubious of Waxman-Markey (SO2 vs. CO2; political failure vs. 'market failure')
The Wall Street Journal recently ran an interesting story explaining that the two economists who invented the “cap-and-trade” approach to regulating pollution do not think it is an effective mechanism for dealing with manmade climate change. As with so many other economists (including those at the CBO [.pdf]), the creators of cap-and-trade think that an explicit tax is a much more efficient way for the government to limit greenhouse gas emissions.
To avoid confusion, let me stress that I am not endorsing a carbon tax myself–indeed I have a forthcoming article [.pdf] in The Independent Review that critiques the standard mainstream case for government pricing of carbon emissions. Nonetheless, it is interesting to see just how tepid the academic support for Waxman-Markey is becoming. It’s not simply “shills for Big Oil and Big Coal” who oppose it, as many activists would have us believe.
On the contrary, even hardcore alarmists such as James Hansen have come out strongly opposed to Waxman-Markey. And, as the Wall Street Journal story details, even the economists who invented cap-and-trade itself don’t think it’s useful in the global warming context. [Read more →]
August 20, 2009 6 Comments