Posts from — September 2009

“Waxman-Markey is largely top-down regulation dressed in cap-and-trade clothing.”

David Schoenbrod and Richard Stewart, “The Cap-and-Trade Bait and Switch“, Wall Street Journal, August 24, 2009.

The Environmental Left is pushing hard to provoke a civil war between natural gas industry (its “friend”) against the coal (and oil) industry. John Podesta (Center for American Progress) and Tim Wirth (UN Foundation) have cooked up a menu of bribes (taxes, a.k.a. “incentives,” “credits,” “allowances,” and “expand”) as follows:

Electricity

• Establish incentives to retire aging, inefficient, dirty coal-fired power plants, and replace them with renewable and low-carbon electricity.

• Create a renewables integration credit to offset specific costs associated with producing high levels of renewable energy and to reward those who go beyond the renewable electricity standard.

• Establish a dedicated incentive for development and deployment of “dispatchable” renewable energy to build markets for electricity storage technology.

• Require that the carbon price and other costs are included when determining the dispatch order for moving electricity onto the grid in order to prioritize natural gas and other clean electricity.

• Expand carbon capture-and-storage provisions to include other permanent storage technologies in addition to geologic sequestration. Ensure that carbon capture and storage research and deployment efforts include retrofitting existing coal- and gas-fired power plants.

Transportation

• Expand the market for natural gas as a heavy-duty transportation fuel by increasing incentives for gas-powered buses and heavy trucks.

• Create incentives for communities to develop mass transit systems that employ buses fueled by natural gas.

Decision-makers in the gas production, transmission, and distribution businesses should reject this Trojan Horse. Obama energy policy spanks natural gas, the predominant swing fuel in electric generation, by forcing renewables and conservation (conservationism) in the market. And fair warning: the more natural gas gains in market share relative to oil and coal, the less friendly the environmentalist movement will be. (Take note of the hydraulic fracturing debate between environmentalists and the oil and gas production sector.)

Don’t Take ObamaBait

Low natural gas prices have created a desperate industry, but the answer is not quick-fix politics that create political dependence and hurt the general economy. The modus operandi of ‘Mr. Natural Gas’ Ken Lay back in Enron’s heyday, and Boone Pickens today, should be rejected–as should political (“rent seeking”) capitalism as a philosophy. [Read more →]

“For a long time now, science reporters have been confidently told the science is settled…. But I am confused [by recent developments]. Four years ago this all seemed like a fait accompli. Humans were unquestionably warming the climate and changing the planet forever through their emissions of carbon dioxide.”

- Eric Berger, Science Writer, Houston Chronicle, September 6, 2009 [SciGuy Blog]

In his post at MasterResource last week, Ken Green spoke of a potential “death spiral” for climate alarmism, in that the failure of the political process would make it less politically incorrect to challenge climate alarmism. “As hopes for a Gore-style ‘wrenching transformation’ fade,” wrote Green, “more mainstream scientists and opinion-makers will become more ‘practical’ toward the issue, meaning that alarmism may give way to sensible assessments of mitigation, adaptation, and geo-engineering.”

But the other problem for climate alarmism is nonalarmist data, as well as new studies by top climatologists questioning the guts of high-sensitivity climate models. Chip Knappenberger summarized a new study by Richard Lindzen that concluded that the “best guess” warming from the Intergovernmental Panel on Climate Change (IPCC) was radically overstated. Marlo Lewis’s summary, Is the Climate Science Debate Over? No, It’s Just Getting Very, Very Interesting (with welcome news for mankind), also lays out the latest from the quite unsettled–and nonalarmist–science. Are the Malthusians wrong again?

Enter Eric Berger, the open-minded, fair-minded science writer for the Houston Chronicle. With just a little courage, and no doubt a good deal of perplexity, he is asking the question that some have been asking for a long, long time: what is really going on here. And no doubt he will take some heat from his post, and no doubt he is going to get to the bottom of what is going on.

Jerry North (Texas A&M) Hints at the Problem

Eleven years ago, when I was director of public policy at Enron, I entered into a consulting agreement with Gerald North, Distinguished Professor of Atmospheric Sciences and Oceanography at Texas A&M’s Department of Atmospheric Sciences, to tell me what was going on. North was as close as I could find to a ‘middle of the roader’ between climate alarmism and (ultra) skepticism. He is also highly decorated. [Read more →]

The success of exploration and drilling efforts in the Gulf of Mexico convincingly makes the case for opening up the nation’s other offshore areas for drilling. Yes, that should mean offshore California and the East Coast.

There are no perfect choices in energy, but offshore drilling has proved friendlier to the environment than the alternative of bringing in foreign crude supplies via tanker.

- “Gulf Giant: BP’s Find in the Gulf of Mexico Reminds Us of the Need for Oil Bridge to Greener Future,” Houston Chronicle, September 4, 2009.

Kudos to the editorial board of the Houston Chronicle for stating the obvious: that neighborhood oil which provides government revenue instead of requiring government subsidy is better than importing oil; that expanded domestic offshore drilling is part of the solution, not the problem.

The environmental advantage of domestic offshore drilling was also noted in the editorial:

Spills of crude from the growing traffic of tankers transiting the globe pose a larger risk to the environment than do offshore rigs and the pipelines connecting them to onshore refining facilities. And much of the oil imported by this country comes from nations such as Nigeria that have a dubious track record in protecting the environment.

Other Reasons to Support Offshore Drilling

The Chronicle does temper its enthusiasm for the offshore solution to oil abundance: [Read more →]

Julian Simon (1932–98) is an inspiration to those of us here at MasterResource and, indeed, the whole capitalist movement. Indeed, it was he who characterized energy as the master resource and human ingenuity as the ultimate resource.

In honor of Simon, I have reproduced some quotations from his works and invite readers to add their favorite in the comment section.

“The world’s problem is not too many people, but a lack of political and economic freedom.”

- Julian Simon, The Ultimate Resource 2 (Princeton, N.Y.: Princeton University Press, 1996), p. 11.

“There is only one important resource which has shown a trend of increasing scarcity rather than increasing abundance. That resource is the most important of all—human beings. . . . [An] increase in the price of peoples’ services is a clear indication that people are becoming more scarce even though there are more of us.”

- Julian Simon, The Ultimate Resource 2 (Princeton, N.Y.: Princeton University Press, 1996), p. 581.

“Human beings create more than they destroy.”

- Julian Simon, The Ultimate Resource 2 (Princeton, N.Y.: Princeton University Press, 1996), p. 580.

 “Progress toward a more abundant material life does not come like manna from heaven. . . . My message certainly is not one of complacency. In this I agree with the doomsayers: our world needs the best efforts of all humanity to improve our lot.”

- Julian Simon, “Introduction,” in Simon, ed., The State of Humanity (Cambridge, MA: Blackwell, 1995), p. 27.

“Adding more people causes problems. But people are also the means to solve these problems. The main fuel to speed the world’s progress is our stock of knowledge; the brakes are our lack of imagination and unsound social regulations of these activities. The ultimate resource is people—especially skilled, spirited, and hopeful young people endowed with liberty—who will exert their wills and imaginations for their own benefits, and so inevitably they will benefit the rest of us as well.”

- Julian Simon, “Introduction,” in Simon, ed., The State of Humanity (Cambridge, MA: Blackwell, 1995), p. 27.

And here is one Simon-like quotation from outside of the Simon tradition to think about!

“The worst of all forms of pollution is wasted lives.”

 - Al Gore, Earth in the Balance: Ecology and the Human Spirit (New York: Plume/Penguin, 1992, 1993), p. 162.

India released an analysis on Wednesday projecting tripled carbon-dioxide (CO2) emissions by 2030, the New York Times reports. Taking into account five independent studies, India expects to release between 4 billion and 7 billion tons by 2030, BBC News reports, compared to 1.2 billion tons today.

India released the analysis to strengthen its bargaining position at the December Copenhagen climate summit where delegates will attempt to negotiate a successor treaty to the Kyoto Protocol. The United States and other industrialized nations contend that India should adopt binding emission limits. India refuses, arguing that mandatory restrictions would stifle the country’s economic development.

The analysis supports this position, explains Jairam Ramesh, India’s minister of environment and forests, because India’s per capita emissions in 2030 will still be much lower than that of any developed country today. India’s per capita emissions in 2030-31 will be 2.7 tons to 5.00 tons (up from 1.19 tons in 2006).  For perspective, in 2006, per capita CO2 emissions were 19.8 tons in the United States, 10.4 tons in Germany, and 9.7 tons in Japan, according to the U.S. Energy Information Administration. 

The Indian government’s analysis inadvertently imparts an inconvenient fact: Even extraordinary parsimony in the use of carbon-based energy is not enough to achieve absolute cuts in CO2 emissions. Too bad Ramesh does not draw out the real lesson: Nations cannot achieve deep cuts in their emissions, or even cap emissions at current levels, without capping and cutting economic growth.

As the world’s most populous countries with the biggest “emerging” economies, India and China are uniquely positioned to challenge the moral bona fides of Kyoto-style energy rationing. So far they have not done so. They talk the Al Gore talk, which means they speak and act at cross purposes.

Consider UN IPCC chief Rajendra Pachauri, a prominent Indian citizen. Pachauri defends India’s refusal to cut its emissions, noting that millions of Indians still lack electricity. Yet Pachauri was instrumental in getting the IPCC to adopt a CO2 stabilization target of 450 parts per million. That’s a very aggressive target requiring, among other things, building new nuclear reactors at the rate of one every other day and covering one million roofs with solar panels every day over the next 40 years, according to Cal Tech chemist Nathan Lewis. Pachauri now calls for stabilizing global CO2 concentrations at 350 parts per million. Maybe a global de-industrialization treaty could lower CO2 levels to 350 ppm by 2050 – then again, maybe not. [Read more →]

The European Union has set a target of doubling the share of renewable energy sources (RES) to 20 percent by 2020. This is a very aggressive target given the growing grass-roots opposition of landscape-loving citizens against windpower and the large country-by-country deficits compared to the target.

The political consensus behind this renewables target is premised on the notions that:

1. The transition will be done at little or no cost and will result in economic recovery and job creation, and
2. The target will mitigate environmental disaster, most notably the ill effects of anthropogenic climate change.

Unfortunately, the target has been adopted before realizing what it would mean for the EU’s economy. Now, more detailed information has emerged. As more information becomes available–and the costs become more apparent–expect a public backlash. One can even predict that ‘green fatigue’ will increasingly emerge in the EU.

Cost Information

The latest piece of information that was made available is the British Government’s Low Carbon Transition Plan, and particularly its statistical annex.

Under the EU policy, Britain will have to raise the share of renewables up to 15% of its final energy demand, from just 1.6% in 2006. While London has been one of the most vocal governments in requiring stringent targets from the European Union, paradoxically it is the single member state with the largest gap to fill.

The following table shows the estimated costs for promoting RES (which exclude the costs to limit carbon emissions by relying on the EU Emissions Trading Scheme as well as a huge array of other costs attached to meeting different environmental targets). It should be noted that these costs refer to the UK’s own targets, which are more stringent than the EU’s own ones. [Read more →]

In two previous posts, “Green” China and CO2 Cap-and-Trade Meets the (China) Dragon, I described China’s rising greenhouse gas (GHG) emissions as a “one-country negation” to the Waxman-Markey climate bill (HR 2454). “The expected growth of coal-fired generation in China over the next 20 years will result in a net increase in CO₂ emissions from their power sector of more than ten times that of reduced U.S. emissions due to coal constraints,” I concluded.

This is good, not bad, insofar as dung and wood are terrible things to burn. Moreover, China has now committed to using better combustion technology in its power sector, including more coal gasification and high pressure (supercritical) coal-fired thermal power plants. To top things off, China has apparently committed itself to substantial growth in its renewable energy output by 2020.

This is generally to the good, and represents four key influences on Chinese energy and environment policies:

1. The market – if you have to pay world prices for fuel you can no longer afford to waste it using poor technology;
2. It is good diplomacy to be seen as “progressive” on the subject of climate change (and it takes trade sanctions off the table);
3. There is probably a good market in all the Kyoto/Copenhagen adopter countries for lower cost (i.e., Chinese) solar, wind and CO₂ capture technologies (why should “green tech” be any different from toys, clothes and electronics?); and
4. The people of China – better coal combustion technology will improve air quality in China’s urban areas (that’s real pollution, the kind that politicians are rewarded for reducing).

In the end China’s output of greenhouse gases (GHG), mostly CO₂, will continue to rise at a rate that is well above any decreases in the US or the EU. In fact, we looked at the actual output of CO₂ from this aggressive plan and found that, even with complete adoption of high efficiency technology for all coal fired power plants completed after 2015, China’s increase in CO₂ from power generation would be more than fifteen times the expected reduction in US CO₂ output. [Read more →]

[Editor note: Ken Green was a Working Group 1 expert reviewer for the United Nations' Intergovernmental Panel on Climate Change (IPCC) in 2001]

For weeks now, we’ve been hearing an odd refrain from the Democrats who are pushing hardest for the Waxman-Markey climate bill. They are determined, it seems, not only to have such a bill drawn up before Copenhagen, but to have it signed into law. At the same time, the EPA is widely expected to issue its endangerment finding for greenhouse gases, triggering what will undoubtedly be a hotly disputed regulatory process.

President Obama, it is reported, wants to sign climate legislation before the critically important Copenhagen climate conference in December. And Senate Majority leader Harry Reid wants the President to sign a climate bill this fall as well.

They both have plenty of company in the “act first, think later” brigade.

A New York Times article shows the sense of urgency: [Read more →]