Posts from — June 2010
“If America can put a man on the moon, why should we stay in servitude to the first and second laws of thermodynamics? What we plainly need is a Manhattan Project–like the one that gave us the atomic bomb but not like the one that narrowly missed finding a cure for cancer.”
- Paul Samuelson, “Tragicomedy of the Energy Crisis,” Newsweek, July 2, 1979, p. 62.
“A group of industry leaders, including Microsoft chairman Bill Gates and General Electric boss Jeff Immelt, stepped up calls for a Manhattan project for low carbon energy last week urging the US government to significantly increase investment in energy research and development.”
- Danny Bradbury, “Gates and Co Demand Manhattan Project for Energy.” BusinessGreen.com, June 14, 2010.
Just as as the polls start finding that nobody thinks global warming matters much, and just as hockey stick predictions of catastrophe fall apart in a scientific scandal, guess who turns up at the White House?
Bill Gates! And the billionaire wants your money to federally fund research on “breakthrough” energy technologies to cope with carbon, an increase between $3 billion and $16 billion a year, possibly forever. The Wall Street Journal apparently lost its secret decoder ring and quotes him: “It’s the only way you’re going to get to the goal of not driving extreme climate change without extreme pain.”
In a video clip he says that ten years of research would mean that by 2030 “we’d be in a position to change the transportation infrastructure to zero carbon,” and likewise for electricity. Red ink in Washington a problem? No problem with “a modest energy tax,” or “cutting subsidies to fossil fuels.”
Subsidies? The U.S. Energy Information Administration defines them and finds that in 2007 coal got $932 million and gas and petroleum liquids got $2.1 billion. Even if your Congressman votes to kill them totally, that’s still only $3 billion. But before even hoping for any of this recall that your Congressman is the person who put the subsidies in place. Since $3 billion is rock bottom in Bill’s wish book, we are probably talking taxes or bonds for the rest.
Meet the New Energy Experts
June 18, 2010 16 Comments
[Editor’s note: Mr. Graf’s cash flow analysis of wind power projects is presented as another view of the inappropriateness of planned public policy in the electricity sector. The economics of wind power is a broad topic; previous posts at MasterResource are listed at the end of this post. For general problems of industrial wind, see here.]
There are many arguments to be made against government subsidization of industrial wind power, some objective and others subjective. We hear about noise, shadow flicker, disruption of wildlife, lack of consistent energy output (intermittency), questionable performance with respect to pollution reduction, and undesirable aesthetic appearance.
It occurs to me, however, with regard to subsidies for energy ventures and technology, three things must be kept in mind:
(1) any good investment must be made in worthwhile ventures that can show a reasonable return;
(2) arbitrarily subsidizing some ventures may cause inadvertent (or advertent) exclusion of others; and
(3) jobs cannot be created by subsidizing ventures that do not provide a viable return. We must keep our eye on the economic ball, and structure our primary arguments against government subsidies for wind power generation around the primary deficiencies of wind turbine technology: performance and return on investment (ROI).
It is obvious that any good investment must be made in worthwhile ventures that can show a reasonable return; and I believe it is fairly apparent that placement of wind turbine power generation technology in my home state of Ohio, vast areas of the eastern or mid-western United States, and indeed in most places in the continental United States, is not worthwhile.
Given the average annual wind speed limitations in most areas, and the relative inefficiency of wind turbines to transform wind into useful electrical power, the wind turbine technology we are subsidizing cannot produce enough electricity to be competitive with other more viable forms of generation, even when a generous allowance for future inflation of electricity costs is considered. The investment is being wasted; with no hope of a reasonable return, and without large subsidies from government entities to offset the investment losses and artificial increases in the cost of electricity, a viable business case for implementation of wind turbine power generation cannot be made.
To illustrate the economic shortcomings, I can point to specific high profile wind development projects I have analyzed in the past several months, including the Great Lakes Wind Energy Pilot Project in Ohio, the Highland Wind Farm expansion in Pennsylvania, and the Glacier Hills Wind Farm in Wisconsin. [Read more →]
June 17, 2010 9 Comments
Reforming a Flawed Process: The IPCC and Its Clients (submission to the InterAcademy Council Review)
[Editor note: David (P. D.) Henderson, formerly head of the Economics and Statistics Department of the OECD, is currently Chairman of the Academic Advisory Council of the London-based Global Warming Policy Foundation, which is headed by Nigel (Lord) Lawson). This is his first post at MasterResource.]
Over the past 22 years, governments everywhere and a great many outside observers have put their trust in the official expert advisory process as a whole and the IPCC process in particular.
I have come to believe that this widespread trust is unwarranted. But it is not just the IPCC process that is in question here. The basic problem of unwarranted trust goes further: it extends to the chronically biased treatment of climate change issues by responsible departments and agencies which the Panel reports to, and in nationally-based organizations which they finance.
Here is what I recently submitted to the InterAcademy Council.
I am Chairman of the Academic Advisory Council of the Global Warming Policy Foundation. On 26 May the InterAcademy Council invited the Foundation to submit written comments to the independent Review Committee. At the suggestion of the Director of the Foundation, Dr Benny Peiser, I am submitting herewith my own comments. While this submission is personal, it has been endorsed by the GWPF.
I am an economist, not a climate scientist. I became involved with climate change issues, by accident not design, towards the end of 2002. Up to that time, I had formed no considered views on the subject, and had seen no reason to question the work and role of the IPCC. I was an uninvolved spectator.
To begin with, my main involvement was limited to some economic and statistical aspects of this huge and complex array of topics. Over time, however, my interests and concerns have broadened in ways that I had neither planned nor anticipated. Increasingly, and unexpectedly, I have become critical of the way in which issues of climate change have been viewed and treated by governments across the world. [Read more →]
June 16, 2010 6 Comments
In yesterday’s post, Scientists versus Lobbyists: Looking for a Winning Strategy Against Big Wind, I promised to share with readers a citizens’ letter I received from Eric Bibler. Consider his piece, which has been condensed to meet format and space requirements, as Part II of my post. Mr. Bibler is focused on Massachusetts, but his experience and advice apply across the Northeast and across the nation where grassroots opposition to industrial wind turbines is growing apace.
This post summarizes a group discussion about how to counter Massachusetts’s Wind Energy Siting Bill.
Would it be more politically pragmatic (and therefore advisable) to avoid any argument against the fundamental viability of wind energy (which continues to be an article of faith held by many legislators), and instead to focus exclusively on the flaws specific to the bill?
In other words, in order to seem “reasonable” to lawmakers, should we argue against a poor implementation of the technology, rather than to question wind energy’s fundamental value?
The argument was that doing the latter may be too steep a hill to climb, plus it might lead lawmakers to reject opponents as “extremists” whose opinions were not worthy of serious consideration.
Pragmatism or Purity?
In my view, not focusing on the fundamental question of whether wind energy actually holds any promise as a solution to our energy and environmental problems is a terrible mistake for the simple reason that adopting such a “pragmatic” course makes us co-conspirators in the process of enabling a Big Lie.
While congratulating ourselves on our political acumen, we are sacrificing our credibility and our integrity. It is one thing to forgive people who support a bad idea because they don’t know any better – and most supporters of this technology admittedly have no idea what they’re getting themselves into. But our task is to educate and persuade any of those who are willing to keep an open mind.
But we typically reserve our deepest scorn for those who DO know better, or SHOULD know better, but who nonetheless promote wind energy, sometimes quite cynically, without regard for its bad consequences or for its ultimate futility.
We do know better. And I, for one, do not want to be in the second category of knowing better, yet pretending not to, as one of the enablers of a big lie – even if I think it may be expedient for me over the short term.
The pro-wind argument proceeds directly from a host of assumptions that are demonstrably false; all of these projects, therefore, are built upon foundations of sand. That is the truth that needs to be the basis of citizens’ responses. [Read more →]
June 15, 2010 8 Comments
My hope as a physicist is that our representatives make energy and environmental policy decisions based on sound science. So far that has not been the case. The main reason for this is that we are engaged in an epic battle between scientists and lobbyists for those with financial or political agendas.
Right now the scientists–the group with the better case for sound public policy–are losing.
I used to think that trying hard and being right was enough. Foolish me! Everything today is really about public relations. The Internet has spawned the perfect storm. Within a few minutes we can now send messages that are read by millions of people. At the other end, recipients are in overload, due to a steady bombardment of these messages. It is very hard for almost everyone to separate the wheat from the chaff.
Tilting Against Big Wind
What this says is that properly phrasing the message and getting it to the right people is critical. Scientists are not good at this, while this is a lobbyists forte — which is a big reason why scientists are losing. [Read more →]
June 14, 2010 19 Comments
[This important press release from the Institute for Energy Research yesterday is reprinted for MasterResource readers this weekend.]
Politics, not science drove offshore drilling ban, 40K jobs sacrificed
Washington, DC – In the days following the Gulf oil spill, President Obama requested that the Secretary of the Interior conduct a 30-day review of the offshore drilling program in the United States and issue a report with recommendations. This report was to be “peer reviewed” by a team of seven engineers recommended by the National Academy of Engineering.
The team of engineers reviewed, approved and signed off on a version of the 30-day review that was presented to them by the Administration. However, after they signed their names to this document, a significant change was made – a change that led to the 6-month suspension of deepwater exploratory drilling. Click HERE and HERE to view the section of the report that was modified after the scientists signed off on the report.
William LaJuenesse, a reporter with the Fox News Channel filed this report earlier today on this very topic:
Click HERE to watch this report
June 11, 2010
3 minutes, 5 seconds
What They’re Saying About Deepwater-Gate: [Read more →]
June 12, 2010 2 Comments
(with Luciano Lavecchia)
Mr Lavecchia is a fellow and Dr. Stagnaro the research and studies director at Istituto Bruno Leoni. This post follows the release of their recent analysis for Italy showing that for every ‘green’ job created by government, 4.8 ‘gray’ jobs are lost in the private sector.
Tradeoffs: if you chose this, you can’t chose that. In economics this is called opportunity cost, which is the next-best alternative to what is actually chosen.
The proverb in popular culture for this is “you can’t have the cake and eat it, too.” The Italian translation is “you can’t have a full barrel and a drunk wife.”
Apparently, politicians are less familiar with such a everyday-life concept. To some extent, they are right: they can get a full barrel and a drunk wife at the same time, provided that taxpayers and/or future generations will pay for it. Yet, even politicians are subject to constraints. That is particularly true in a period of crisis like now: shrinking public budgets and a slowing economy force even the politicians to make choices.
This brings us to the crisis of climate politics in Europe where most EU countries are considering cuts to the green subsidies.
The Socialist government in Spain dwarfed its support to solar power, causing a collapse in investments and thousands people to lose their jobs. In Germany, the conservative chancellor Angela Merkel proposed a similar reduction and is facing a huge Parliamentary opposition.
Italy decided as well to pare green incentives. How is that possible? After all, virtually every official EU document claims that the “green deal” will make us not just more sustainable, but also economically better off.
We will not deal with the environmental side of the issue in this post, leaving it to the wise words of Dr Gwyn Prins, for example, and perhaps a future post.
But what about the claim that renewable energy sources (RES) are good for the economy?
There is no spaghetti on this plate. If green sources are really cheaper than fossil fuels, there is no need to subsidize them, because households and businesses would have a built-in economic incentive to rely on RES, rather than on supposedly dirty, more expensive, energies. [Read more →]
June 11, 2010 4 Comments
It is the irony of ironies. Taxpayer and ratepayer-forced subsidies for utility-scale windpower also subsidizes emissions of carbon dioxide (CO2). The same would be true under a national renewable portfolio standard as proposed in pending federal legislation.
Such is a vivid demonstration of the perils of unintended consequences and, to borrow a phrase, “an inconvenient truth” about wind power.
My recent four-part Wind Integration Realities reviewed two new studies, based on actual experience, that show fossil fuel consumption and CO2 emissions areincreased, not reduced, with the introduction of wind. Their results were compared as well as to those of my fossil fuel and CO2 emissions calculator for the same conditions. The brief summary in Part IV of the series is expanded upon here for clarity of this game-changing argument.
In general, the studies show that as wind penetration increases, the effect on fossil fuel and CO2 emissions worsens. Specifically, at wind penetrations of about 3% (as is the case in the Netherlands), the savings are zero. At 5-6% (as for Colorado and Texas) the “savings” become negative, that is, emissions actually increase due to the presence of wind power. [Read more →]
June 10, 2010 17 Comments
Green Fussing: What Do Left Environmentalists Really Want? (except to cap capitalism with cap-and-trade)
Ultra-clarifying moments of truth are sometimes possible when environmental groups and their so-called allies end up in “family” squabbles, disagreeing over implementation of their ill-conceived schemes. The disarray, aptly described in prior posts at MasterResource by economist Robert Murphy and others as a civil war on the Left,” has become commonplace with respect to cap-and-trade proposals. And this is part of what Ken Green calls the death spiral of climate alarmism.
Just maybe the Coercion Crowd should throw up their hands and just say: give peace a chance!
Gaming the Carbon Market – Say It Isn’t So!
Yet another example of this discord, reported in a recent issue of E&E News PM, Climate: Enviro group outlines 10 schemes for gaming carbon markets — 05/18/2010 — www.eenews.net (access with free trial subscr.) involves Friends of the Earth (FOE), which recently released a strongly worded critique of the Kerry-Lieberman climate bill. In its guide, FOE inconveniently details how “carbon offsets are especially prone to corruption and fraud” and directly questions whether carbon markets are an appropriate mechanism to reduce greenhouse gases (GHGs).
The guide derisively attacks cap-and-trade schemes detailing the ten ways carbon markets can be scammed “at the expense of both our economy and our climate.” The scams enumerated carry such unflattering headings as, “Ponzi carbon,” “Carbon bribery,” and “Sell fake carbon offset credits,” among other derogatory descriptions. Ouch! [Read more →]
June 9, 2010 6 Comments
Californians are attempting to reclaim the prospects of a top ten world economy from the disastrous downside of Global Warming Solutions Act (California Assembly Bill 32, or AB 32).
Leaders of the ballot measure campaign to amend the law filed over 800,000 signatures – well over the required 435,000 – to be able to vote on a proposition to delay the implementation of cap-and-trade, as well as 70+ other progeny regulations, until unemployment falls significantly.
Signatures are currently being verified by the Secretary of State, and the measure is expected to be on the November ballot.
Then versus Now
At the time the bill was originally signed in 2006, California’s unemployment rate was under five percent. According to the Bureau of Labor Statistics, statewide unemployment in April 2010 was a record high 12.6%.
The ballot measure would put AB 32 on hold until unemployment falls below 5.5% for four consecutive quarters. In other words, until the state’s devastating economic situation improves the state will not implement regulations that will increase energy costs—already among the nation’s highest—and cause additional job loss. The Initiative would not repeal the AB 32 but merely suspend it and its already adopted regulations.
Old Rationale– “Leadership” for The Children!
Flanked by “national and international dignitaries,” Gov. Schwarzenegger signed AB 32, California’s landmark global warming law, in September 2006. He said the law is “something we owe our children and grandchildren.”
Now, with too-numerous-to-count “gates” cracking the consensus, coupled with solid analysis, such as that of Chip Knappenberger of the lack of meaningful gain from reductions of national scale, there isn’t much discussion about global climate change even being the driver behind “the global warming solutions act.”
The debate has moved, and still moves. California was to lead the global parade, with other states and countries following. Didn’t happen. The death spiral of climate alarmism confirms that California’s mandatory CO2 emission cuts are costs without climate benefits. [Read more →]
June 8, 2010 14 Comments