A free-market energy blog
Random header image... Refresh for more!

Posts from — January 2012

‘Hidden Victims’ of Gulf Drilling Slowdown (Obama’s Negative Employment Multiplier)

Small business owners who depend upon the economy in the Gulf of Mexico are still victimized by the ripple effects of the moratorium Team Obama put into place after the BP oil well explosion in April 2010, documents Greater New Orleans, Inc. after surveying approximately 100 Louisiana-based companies directly involved in the offshore oil and gas industry, led by marine services and ship owners/operators.

The Impact of Decreased Drilling Permit Approvals on Gulf of Mexico Businesses found that 41% of businesses are not making a profit. Other statistics of decline:

* 76% have lost cash reserves

* 27% of businesses have lost more than half of their cash reserves

* 50% of businesses have laid off employees as a result of the moratoria

* 39% of businesses have retained workers but reduced salaries and/or hours

* 46% of businesses have moved all or some of their operations away from the Gulf of Mexico

82% of business owners have lost personal savings as a result of the permit slowdown

* 13% of business owners have lost all of their personal savings as a result of the slowdown

Even if the current administration’s anti-energy policies are reversed, this study demonstrates that there is an opportunity cost in terms of lost business that will never be recovered. As the Pelican Institute has previously reported, over 10 oil rigs have already left the Gulf and more could leave soon in the absence of a reasonable regulatory environment that allows for robust energy production on the part of those companies with a proven safety record.

Additional information was given in yesterday’s press release: [Read more →]

January 31, 2012   No Comments

European Energy Policy: The ‘Fatal Conceit’ Continues (EU’s ‘Energy Roadmap’ to 2050 Reconsidered)

“The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.”

- F. A. Hayek: The Fatal Conceit: The Errors of Socialism (1988), p. 76. 

The European Commission’s (EC) just-published Energy Roadmap 2050 (Roadmap) updates its last analysis (which I criticized here) of EU forced-energy-transformation projects to 2020 , as well as  scenarios reducing greenhouse gas emissions to 80-95% below EU 1990 levels by 2050. The forecast is stated (postmodernism?) as coincident with the need for energy security and affordability.

As one should “follow the money” when it comes to political capitalism, one should “follow the assumptions” when it comes to any roadmap pertaining to a post-carbon-based energy world.

1. Renewables The share of renewable energy sources is projected to be 75% in gross final energy consumption and 97% in electricity consumption by 2050. Electricity is projected to provide a substantially increased share of final energy demand reaching almost 40% by 2050 versus just over 20% today. A chart on page 5 of Roadmap shows renewable targets of 40–60% versus the above-75% as reported on page 4.

Either way the renewables portion is unrealistically high.

2. Costs The costs involved are substantial. Cumulative grid investments alone could be 1.5 to 2.2 trillion Euros between 2011 and 2050 according to the Roadmap. Remember much of this will have to be front-loaded to provide the infrastructure to theoretically support the projected deployment of renewable energy sources, and could easily be under-estimated given the uncertainties of such long term projections.

To this must be added an amount in the same order of magnitude for the renewable generation plants. Then there is also the additional cost of duplicate capacity of conventional generation plants required to compensate for wind’s unreliable and erratic behavior. These very high costs are consistent with those I previously described here and here.

Interestingly, as part of the process, the EC saw fit to establish an ad hoc Advisory Group (Group) to provide independent, expert advice on the proposed Roadmap. The following is a brief review of this energy policy approach in terms of the Group’s report published in December 2011. [Read more →]

January 30, 2012   4 Comments

Micro Solar: Eyesore NIMBYism and the Curse of Dilute Energy

Many years ago at at a DOE/NARUC conference, I took note when Christopher Flavin of the environmental Left (EL) Worldwatch Institute commented that he didn’t support solar farms (macro solar) because of their large resource and land requirement. 1

‘Wow!’ I thought. That depletes the EL supply-side strategy, leaving just industrial wind and distributed (micro-solar)–and maybe a little biomass.

I was reminded of this when I read a recent article in ClimateWire (sub. req.), by Lacey Johnson, “Boom in Solar Panels injects NIMBY Battles into Neighborhoods.”

The story begins with Barbara Katz, whose hilltop home in historic north Baltimore, amid roaming wildlife, was threatened by her neighbor’s plan to install a 600-panel solar array. Johnson reports:

“My initial reaction was, ‘Oh my gosh, this is going to be an eyesore,’” remembers Katz, who was confronted by a plan for more than 600 ground-based solar panels on her neighbors’ lawn. “No one would want this in their backyard. It looks like it’s an industrial park.”

Johnson continues:

It takes a good deal of work — and regulations — to keep suburban communities looking picture perfect, and arrays of shiny solar panels don’t always fit the vision homeowners have for their neighborhoods. All over the country, citizens like Katz have begun organizing to block renewable energy projects, throwing a wrench into some peoples’ plans to “go green.” [Read more →]

January 27, 2012   5 Comments

Giberson: “Did the Federal Government Invent the Shale Gas Boom?” (December 20 post becomes part of a national debate)

One of the nation’s important energy analysts is Michael Giberson, an economist at the Center for Energy Commerce in the Rawls College of Business at Texas Tech University. Giberson, who has occasionally posted at MasterResource,  teaches energy courses at Tech such as U.S. Energy Policy and Regulation and Energy Economics.

Giberson is also a principal (with fellow energy expert Lynne Kiesling of Northwestern University) of the energy-centric Knowledge Problem, described as “Commentary on Economics, Information, and Human Action.”

A month ago, Giberson critically reviewed a study by the Breakthrough Institute that claimed, basically, that government energy activism crucially enabled the shale gas (and oil) revolution that is now sweeping much of the United States and many countries around the world.

“New Investigation Finds Decades of Government Funding Behind Shale Revolution,” announced Breakthrough on December 20, adding:

Breakthrough Institute research and interviews show the direct and sustained support federal agencies provided to the gas industry leading up to the modern natural gas revolution.

And virtually on the same day (Giberson was on holiday), a rebuttal came at Knowledge Problem (reprinted with separate comments at  Energy Collective) that is now part of the national debate.

On Tuesday night, the Breakthrough Institute trumpeted Obama’s mention under the headline “Obama’s Energy Revolution,” adding:

In his State of the Union, President Barack Obama referred to the findings of a Breakthrough Institute investigation, which found that 30 years of federal funding led to the shale gas revolution.

Given the high-stakes debate, MasterResource is pleased to repost, in its entirety, Giberson’s analysis–and his challenge for deeper research.  The debate is joined. [Read more →]

January 26, 2012   11 Comments

“The Lesson” Applied to President Obama’s State of the Union Speech Last Night

“[D]emagogues and bad economists are presenting half-truths. They are speaking only of the immediate effect of a proposed policy or its effect upon a single group…. [The correction is] showing that the proposed policy would also have longer and less desirable effects, or that it could benefit one group only at the expense of all other groups.”

- Henry Hazlitt, Economics in One Lesson, p. 6.

There are many analyses of the President’s address to the nation last night. As last year, Obama has opened himself up to ridicule and parody (see what MasterResource did).

For this year, in what could well be his last such speech, MasterResource presents timeless logic to unmask the fallacies spewed by our quick-fix, anti-market commander-in-chief.

“Green jobs’? The government-created ones for industrial windpower and for on-grid solar power?

Enter Henry Hazlitt, whose Economics in One Lesson, first published in 1946 and last revised in 1988 (Hazlitt died in 1993), exposes the fallacy of government-as-jobs-creator.

This excerpt is from chapter 1, “The Lesson,” of Hazlitt’s classic of 2oth century economic literature.


Economics is haunted by more fallacies than any other study known to man. This is no accident. The inherent difficulties of the subject would be great enough in any case, but they are multiplied a thousandfold by a factor that is insignificant in, say, physics, mathematics, or medicine — the special pleading of selfish interests. [Read more →]

January 25, 2012   4 Comments

Tucker’s Terrestrialism and the Technology of Modernity

“The release of energy from splitting a uranium atom turns out to be 2 million times greater than breaking the carbon-hydrogen bond in coal, oil or wood. Compared to all the forms of energy ever employed by humanity, nuclear power is off the scale. Wind has less than 1/10th the energy density of wood, wood half the density of coal, and coal half the density of octane. Altogether they differ by a factor of about 50. Nuclear has 2 million times the energy density of gasoline. It is hard to fathom this in light of our previous experience. Yet our energy future largely depends on grasping the significance of this differential. “

- William Tucker, excerpted from his lecture, Understanding E=MC2

William Tucker has powerfully explained how the future of technologically advanced civilizations depends upon a sophisticated ability to convert the highest energy densities into increasingly denser power performance, and in the process compacting the time and space necessary to do productive work.

In fact, Tucker wrote an excellent book about this, Terrestrial Energy: How Nuclear Energy Will Lead the Green Revolution and End America’s Energy Odyssey. In light of the excerpt from that book recently posted at Master Resource, I thought readers of this forum might find my review from two years ago (see below) of interest, particularly if they have not yet read Tucker’s book.

The Primacy of Energy Density

Rockefeller University’s Jesse Ausubel has demonstrated that the trend in energy usage continues along a decarbonizing trajectory. Improvements in technology combined with a communal desire to live longer and more healthfully have spurred this phenomenon. Given a choice, who wants to live in a town where thousands of chimneys cast off carbon by-products like sulfuric smoke and soot? Civilization will continue decarbonizing apace, whether this aligns with climate change alarmism, or not. [Read more →]

January 24, 2012   3 Comments

Wind Ordinance Debate: The 1,000-foot Set-Back Standard (Are environmentalists underregulating themselves?)

Editor Note: Environmentalists like regulation except when it comes to ‘green’ energy. This post asks: what is the growing acceptance of  the thousand-foot voluntary ordinance based on?]

In Indiana and elsewhere, many counties are falling all over themselves to adopt the so-called “1,000-foot voluntary industry setback” between large wind turbines and residences.1 In some states, it has become part of “model” wind ordinances created by wind developers and energy agencies.

This buffer zone (who said these structures were environmental?) is starkly smaller than those mandated in several countries widely touted by industry proponents as wind “success” stories. In Denmark, for example, the setback is four times total turbine height (or about 2,000 feet for a large turbine), along with a built-in mechanism for compensating abutters for property-value losses.

In Holland, it is 1 km (3,280 ft). Germany’s noise-based setback ranges up to a full mile (1.6 km).

Dozens of jurisdictions scattered around the U.S. and Canada have also adopted larger setbacks, often in the ½- to 2-mile range from abutting residences. All of these larger setbacks are in line with what is recommended by many independent scientific bodies, medical authorities, and acoustical engineers.2

With so many localities adopting the much smaller 1,000-foot distance as a de facto setback, however—seemingly with little public discussion—a reasonable person would expect to find reams of scientific and legal information to back it up.

Conflicting Evidence

But despite a concerted and sustained research effort by myself and others, finding a straightforward explanation published by any government agency (or the wind industry) documenting the origin and technical rationale for such a small setback has proven extraordinarily elusive.

Instead, what one finds is a remarkably opaque policy-making process wherein any scientific studies reviewed or substantive deliberations that may have occurred are not readily evident from the sparse number of documents publicly available. This post is a progress report, summarizing my attempts to uncover the origin and basis of this setback. [Read more →]

January 23, 2012   17 Comments

My One-Time, Tacit Support of Industrial Wind: A Confessional

[Ed. Note: This testimonial joins Michael Morgan's last week  indicating a growing disconnect between Washington, D.C.-based BIG ENVIRONMENTALISM and in-the-pristine, grassroots, common-sense environmentalism. Mr. Cudnohufsky's bio follows this post.]

On a regular basis, friends are surprised to learn of my recently voiced concerns about industrial wind. Enlightened, perceptive and thoughtful people, they share much of my concern for our earth and human communities.

They ask me, “Isn’t wind a good thing? What concerns you and why? Wind is a large renewable resource used for centuries! We are behind the rest of the world in the use of wind power! We need to address climate change. What is your solution?”

These friends have not incorporated wind energy investigation into their busy lives. With climate change, unemployment, a stagnant economy, health care legislation and a war all screaming for attention, there is to be expected a certain complacency and acceptance of industrial wind.

Despite little time for research, there is strong emotional conviction from the dwindling proponents of wind power as well as the growing number of opponents. Once healthy, convivial communities are sometimes permanently divided by the issue.

It takes but a minute’s reflection to realize that just over two years ago, I held the same opinion of wind that some of my friends do now.  However, investigation of industrial wind has led me to this well-considered conclusion: industrial wind is a total sham! Not only is it horrendously impactful, but it also does not work in any meaningful manner. But efficacy is a subject for another discussion. [Read more →]

January 20, 2012   15 Comments

Global Lukewarming: A Great Intellectual Year in 2011

“Mounting evidence [of lukewarming] begins to start to make you wonder whether there is some fundamental problem between climate models and reality.”
“To me, the most significant thing that the Climategate emails show is that the deck is stacked against the publication of research results that are critical of the established scientific consensus, and the skids are greased for papers that run in support…. Not a good situation for the advancement of science.”

“Lukewarmers” are those scientists (and others) who believe the balance of evidence is middling between “climate alarmists” (who tend to think that the global temperature rise will lie in, or even exceed, the upper half the IPCC’s 1.1°C–6.4°C range of projected temperature rise this century) and ultraskeptics, or “flatliners” (who tend to think that the addition of human-generated carbon dioxide has virtually no impact on global temperatures).

Lukewarmers have found the world to be a lonely place. But favor (think physical processes of global climate) smiled for us in 2011. Several scientific studies produced results, when considered in combination, provide evidence that the general warming of the earth’s climate is proceeding at a rate that lies in the lower half of the IPCC’s projected temperature change during the 21st century.

And with a low-end temperature rise comes along low-end impacts. Seemingly good news for all!

2011 Temperatures

First, let’s review the global average temperature, both at the surface, and in the lower atmosphere since 1979—the year that satellite observations of the temperature from the lower atmosphere become reliably available, and pretty near the beginning of the second warming episode of the 20th century. [Read more →]

January 19, 2012   40 Comments

Killer Energy (Time to Apply Endangered Species, Wildlife Laws to Windpower?)

Gleaming white wind turbines generating carbon-free electricity carpet chaparral-covered ridges and march down into valleys of Joshua trees.” Such is “the future” of American energy,  not “the oil rigs planted helter-skelter in [nearby] citrus groves.”

So reads a recent Forbes article. But Wind vs. Bird by Todd Woody also raises concern about the fate of a 300-megawatt “green” turbine project threatening California condors, a species just coming back from the edge of extinction. The project might be cancelled as a result.

Indeed, the U.S. Fish & Wildlife Service (FWS) has asked Kern County to “exercise extreme caution” in approving projects in the Tehapachi area, because of potential threats to condors. The “conundrum will force some hard choices about the balance we are willing to strike between obtaining clean energy and preserving wild things,” the article suggested. Hopefully, it concluded, new “avian radar units” will be able to detect condors and automatically shut down turbines when one approaches.

All Americans hope condors will not be sliced and diced by giant Cuisinarts. [Read more →]

January 18, 2012   4 Comments