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Posts from — February 2012

Windpower Case Study in Ontario (Part 1: Coal-fired generation not displaced)

[Editor Note: This case study of Ontario, Canada (one of the least emissions-producing electricity systems in the world) by a veteran energy engineer uses available data to shed light on unfounded claims about industrial wind turbines. Some aspects of the Ontario situation are unique, but many considerations are applicable to all countries/states/provinces. Part II concludes this case study tomorrow.]

“Even while wind was at peak operation, the coal generators served as backup (at low load) to be able to respond rapidly to the anticipated, and actual, drop in wind output that occurred just hours later.”

It has been claimed that industrial wind turbines allow Ontario to shut down coal-fired electrical generating stations. But the facts reveal this to be a myth.

The following graph shows how Ontario has generated its electricity from 1988 to 2011. It presents a pretty clear picture of what happened from an energy point of view, showing the generation sources for each year. Energy is measured in Terra (1012) Watt hours.

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In 1988, Ontario was using coal (about 35 TWh per year), hydro (also about 35 TWh per year), and nuclear (about 65 TWh per year). Those sources met the load of about 135 TWh.

In the early 1990s (1992 and 1994, and 1995), Darlington Nuclear generating station came into service. As nuclear output increased to about 92 TWh, the coal generation dropped to about 15 TWh in 1994. Also, a slight recession was causing the Ontario electrical load to drop a bit.

In the latter 1990s, as the economy recovered some, a decision was made to lay up Bruce A and Pickering A nuclear stations, and focus limited resources on bringing the newer “B” stations at Bruce B, Pickering B, and Darlington up to a higher operational level. Nuclear generation dropped to about 60 TWh. Coal picked up the slack, rising back over 40 TWh. [Read more →]

February 29, 2012   18 Comments

U.S. Oil Exports: Open Letter to Bill O’Reilly from Economist Donald Boudreaux (Keystone XL a-okay)

“[T]here is a second main factor that spawns new economic fallacies every day. This is the persistent tendency of men to see only the immediate effects of a given policy, or its effects only on a special group, and to neglect to inquire what the long-run effects of that policy will be not only on that special group but on all groups. It is the fallacy of overlooking secondary consequences.”

- Henry Hazlitt, Economics in One Lesson. quoted here.

At Cafe Hayek, economist Donald Boudreaux, Professor of Economics at George Mason University, wrote an open letter to Fox News host Bill O’Reilly’s opposition to exporting U.S. oil to other countries. O”Reilly has a populist streak, and he is prone to seeing the seen and not the unseen when it comes to economics, a sin indeed to economics as a science.

Professor Boudreaux is a master educator and prolific letter writer on behalf of common-sense economics. Read his explanation about why the namesake of the O’Reilly Factor 1) gets his economics wrong and 2) fails to see the implication of his own argument to himself as exporting his services

Dear Mr. O’Reilly:

You’re all lathered up because U.S. oil companies are exporting much of their refined gasoline and heating oil to other countries and thereby putting upward pressure on fuel prices here in America.  You conclude that these companies have a moral obligation not to export so much….

Economics

First some economics.  Selling in the global market encourages firms to build larger factories and refineries that, in turn, enable outputs to be produced at lower costs per unit.  So while in the short-run rising exports of oil products can cause fuel prices here to spike, the long-run effect might well be lower prices because of larger, more-efficient scales of operation.  [Read more →]

February 28, 2012   3 Comments

UT Study on Frac Water Contamination: “No Evidence” (Anti-drilling false alarm cut down to size)

A recent study from the University of Texas at Austin’s Energy Institute found “no evidence” of groundwater contamination resulting from hydraulic fracturing. Concluded lead author Charles Groat: “We found no direct evidence that hydraulic fracturing itself – the practice of fracturing the rocks – had contaminated shallow groundwater.”

Here is the list of the UT Energy Institute’s overview of findings:

  • Researchers found no evidence of aquifer contamination from hydraulic fracturing chemicals in the subsurface by fracturing operations, and observed no leakage from hydraulic fracturing at depth.
  • Many reports of groundwater contamination occur in conventional oil and gas operations (e.g., failure of well-bore casing and cementing) and are not unique to hydraulic fracturing.
  • Methane found in water wells within some shale gas areas (e.g., Marcellus) can most likely be traced to natural sources, and likely was present before the onset of shale gas operations.
  • Surface spills of fracturing fluids appear to pose greater risks to groundwater sources than from hydraulic fracturing itself.
  • Blowouts — uncontrolled fluid releases during construction or operation — are a rare occurrence, but subsurface blowouts appear to be under-reported.

Why Past Media Misperception?

Another interesting finding in the UT study, though, related to the media’s coverage of hydraulic fracturing. “For the nation as a whole,” the authors write, “the attitudes were found to be uniformly about two-thirds negative.” The accompanying chart in the study bears that out: [Read more →]

February 27, 2012   4 Comments

Wind Spin: Misdirection and Fluff by a Taxpayer-enabled Industry

Trying to pin down the arguments of wind promoters is a bit like trying to grab a greased balloon. Just when you think you’ve got a handle on it, it morphs into a different shape and escapes your grasp. Let’s take a quick highlight review of how things have evolved with wind merchandising.

1 – Wind energy was abandoned well over a hundred years ago, as even in the late 1800s it was totally inconsistent with our burgeoning, more modern needs for power. When we throw the switch, we expect that the lights will go on – 100% of the time. It’s not possible for wind energy, by itself, to EVER do this, which is one of the main reasons it was relegated to the dust bin of antiquated technologies (along with such other inadequate energy sources as horse and oxen power).

2 – Fast forward to several years ago. With politicians being convinced that Anthropogenic Global Warming (AGW) was an imminent catastrophic threat, lobbyists launched campaigns to favor anything that would purportedly reduce carbon dioxide. This was the marketing opportunity that the wind energy business needed. Wind energy was resurrected from the dust bin of power sources, as its promoters pushed the fact that wind turbines did not produce CO2 while generating electricity.

3 – Of course, just that by itself, is not significant, so the original wind development lobbyists then made the case for a quantum leap: that by adding wind turbines to the grid we could significantly reduce CO2 from those “dirty” fossil fuel electrical sources (especially coal). This argument became the basis for many states implementing a Renewable Energy Standard (RES) or Renewable Portfolio Standard (RPS)– which mandated that their utilities use (or purchase) a prescribed amount of wind energy, by a set date.

4 – Why was a mandate necessary? Simply because the real world reality of integrating wind energy made it a very expensive option. As such, no utility companies would likely do this on their own. They had to be forced to. [Read more →]

February 24, 2012   27 Comments

Overcoming the Climate: The Case of Malaria

“Malaria already kills a million people a year and now, researchers fear, climate change could make the problem even worse.” –ABC News, April 1, 2011

“Based on the new numbers, malaria deaths have fallen by 32 percent since 2004, dropping from 1.8 million deaths worldwide to 1.2 million in 2010.” –ABC News, February 3, 2012

Malaria has been long postulated to benefit from rising global temperatures and is included near the top of most alarming lists of the bad things that will happen if greenhouse gas emissions limitations are not immediately put into place. And while this seems good in theory, real world data show little, if any, connection between climate change and malaria outbreaks. In fact, while the climate has been warming, malaria has been in decline—being beaten back by direct measures aimed at reducing the spread of the disease.

And malaria is not alone. There are many examples of positive trends in measures that climate change is supposed to worsen. The broader lesson is that directed actions trump climate change. In fact, in some cases, climate change may even hasten positive change. Yet, the recognition of such is largely absent from assessments of the impacts associated with human-caused climate changes. Consequently, the assessments present overly pessimistic and unreliable visions of our future based on overly simplistic modeling exercises.

The Case of Malaria

One of the key elements of global warming alarmism is proposing a link from rising global temperatures to the increasing occurrence of really bad things. Think of any bad thing, and almost assuredly, a Google search of “global warming” and “[insert really bad thing here]” will turn up loads of hits. Try it! It is kind of fun to see just how absurd a link you can find. “Global warming” and “shark bites”? You betcha. “Global warming” and “UFO attacks”? Ding ding! “Global warming” and “malaria”? Of course. [Read more →]

February 23, 2012   3 Comments

The Collapsing Case for ‘Green’ Energy (Berkeley’s Borenstein on an intellectual wrong turn )

“Advocates of renewable energy feel cornered by the gridlock in Congress and waning interest in climate change. But arguing that renewable energy is the best way to address economic or security concerns isn’t the way to prevail. It just focuses the debate on issues where fossil fuels are almost sure to win.”

- Severin Borenstein, “Making the Wrong Case for Renewable Energy,” Bloomberg, February 13, 2012.

Severin Borenstein, Professor of Business and Public Policy at the University of California at Berkeley, and director of the U.C. Energy Institute, is firmly in the camp of climate alarmism and public policy activism. In a recent op-ed,  Borenstein argues that, absent the climate-change argument, the environmentalists are intellectually adrift trying to argue for their (politically correct) renewable energies–wind and solar (but not ethanol and hydroelectricity, mind you). 

Left environmentalists are in a predicament trying to converse with a public that is fatigued about climate change and is interested in affordable energy and economic prosperity. And it brings to mind what Tim Wirth, now with the United Nations Foundation but then Undersecretary of State for Global Affairs with the Clinton Administration, said back in 1990:

We’ve got to ride this global warming issue. Even if the theory of global warming is wrong, we will be doing the right thing in terms of economic and environmental policy.

The problem, however, is bigger than Borenstein lets on given 1) a slowdown in real-world warming; 2) growing interest in/explanation of global lukewarming; and 3) the need to move toward adaptation (instead of mitigation) as greenhouse-gas concentrations grow in the atmosphere. Still, Borenstein’s points are valid as far as they go.

Key excerpts from Borenstein’s recent Bloomberg op-ed follow: [Read more →]

February 22, 2012   6 Comments

More Bad Neo-Malthusian Behavior (Pacific Institute’s Peter Gleick joins the Climategate Gang, Paul Ehrlich, John Holdren, etc.)

[Editor note: This November 29, 2011, post is updated in light of the admission yesterday by climate activist Peter Gleick that he is the source of the stolen Heartland Institute documents. Gleick's malfeasance continues the authoritarian, anti-intellectual behaviors exhibited by neo-Malthusians, most infamously revealed by Climategate, but also including the treatment of the late Julian Simon by Paul Ehrlich.

Updates on what is now being called GleickGate can be found on popular climate websites, including those of Andrew Revkin, Judith Curry, Watts Up With That, Climate Depot, and Climate Audit.]

I read all about it at Judith Curry’s blog (Breaking News: Gleick Confesses) and added this comment (now 250 and counting) at the midnight hour:

Wow–surely Peter Gleick understands that feedback effects are in dispute, and the difference influences the sign of the externality in terms of what some climate economists say (Robert Mendelsohn at Yale, for one).

And if he did not know before, Dr. Gleick should realize that 1) the Heartland side is heartfelt, 2) that energy affordability is key for just about everyone, 3) central climate planning all but gets the climate police to the door, and 4) corporate rent-seeking is handmaiden to climate alarmism/policy activism (remember Enron?).

Perhaps this episode will encourage the present generation of neo-Malthusians to check their premises and consider, just as an option, that wealth creating capitalism is the best insurance policy for whatever the future holds, anthropogenic or natural.

Of course I cannot really expect the mad-at-the-world, ‘smartest guys in the room’ intellectuals who just know the world is in peril (unlike the rest of us) to embrace a challenge culture and make fundamental midcourse corrections. But I can state the ideal for the open-minded to consider.

Peter Gleick, please read Charles Koch’s The Science of Success. [Read more →]

February 21, 2012   5 Comments

Sen. Alexander: Statement on Production Tax Credit ($27 billion over 10 years is enough!)

“Let’s focus on reducing the debt, increasing expenditure for research, and getting rid of the subsidies. Twenty years is long enough for a wind production tax credit for what our distinguished Nobel prize-winning Secretary of Energy says is a ‘mature technology’.”

In a speech last Wednesday on the floor of the United States Senate, Senator Lamar Alexander (R- Tenn.) called on Congress to reject any efforts to add a four-year extension of the Production Tax Credit.

His learned statement brings out a number of facts that contribute to the debate–and explains why ‘subsidy fatigue’ has set in with windpower. Alexander also explains why the future belongs to the energy efficient, not dilute forms of energy that carry a large environmental footprint.

The full transcript of his remarks, published in The Chattanoogan, follows.

Madam President, there are reports in some of the newspapers this morning that there is an effort to try to slip into the negotiation about extending the payroll tax break for the next year a big loophole for the rich and for the investment bankers and for most of the people President Obama keeps talking about as people whose taxes he would like to raise. 

What I mean by this is I have heard there may be an effort to put into the payroll tax agreement a four-year extension of the so-called production tax credit, which is a big tax break for wind developers.  I cannot think of anything that would derail more rapidly the consensus that is developing about extending the payroll tax deduction than to do such a thing.

We are supposed to be talking about reducing taxes for working people.  This would maintain a big loophole for investment bankers, for the very wealthy, and for big corporations.  We hear a lot of talk about federal subsidies for Big Oil.  I would like to take a moment to talk about federal subsidies for Big Wind — $27 billion over 10 years.  That is the amount of Federal taxpayer dollars between 2007 and 2016, according to the Joint Tax Committee, that taxpayers will have given to wind developers across our country. 

This subsidy comes in the form of a production tax credit, renewable energy bonds, investment tax credits, federal grants, and accelerated appreciation.  These are huge subsidies.  The production tax credit itself has been there for 20 years.  It was a temporary tax break put in the law in 1992. [Read more →]

February 20, 2012   6 Comments

Petroleum Development in the Ecuadorian Amazon: Setting the Record Straight (Part III: Did International Oil Firms Despoil Eastern Ecuador’s Environment?)

[Ed. Note: This concludes Douglas Southgate's review of Ecuador’s claims of “reckless environmental damage” against Chevron, and through them international oil companies (IOCs). Part I challenged the facade that Ecuador's passive view of its own resources led to exploitation by Big Oil; Part II examined the economic benefits of fossil-fuel development in the country.

This post refutes the charge that environmental damage is the responsibility of foreign firms alone. Indeed, it is the state company, Petroecuador, that was chiefly responsible for environmental despoliation in the Amazon region. These postings are timely in light of a recent article in The New Yorker, [1] a new book about the construction of a trans-Andean pipeline, [2] and other literature in which IOCs’ actions in Ecuador are criticized.

Billions for Government, Nada Environment

Opponents of petroleum development in the Amazonian lowlands (Oriente) of eastern Ecuador maintain that damage to the region’s natural resources has been the result of IOCs’ dominance of the country. But in the first of three postings about the anti-oil campaign, I show that the Ecuadorian government actually exercised considerable power in its dealings with foreign companies. Soon after petroleum was discovered in the Oriente, Ecuadorian authorities obliged IOCs to spend tens of millions of dollars on transportation infrastructure in order to facilitate colonization, in which the firms had no real interest. [Read more →]

February 17, 2012   2 Comments

Petroleum Development in the Ecuadorian Amazon: Setting the Record Straight (Part II: Oil wealth & socioeconomic progress in Ecuador)

[Ed. Note: This series addresses key issues at the heart of Ecuador’s claims of “reckless environmental damage” against Chevron, and, through them, international oil companies (IOCs). Part I challenged the facade that Ecuador's passive view of its own resources led to exploitation by Big Oil. Part III tomorrow addresses the misperception that environmental damage in this small, South American nations is the responsibility of foreign firms alone.]

 Oil and gas has been a 40-year economic driver in Ecuador. With the national treasury benefiting from oil and gas revenue, any lack of socioeconomic progress during the last decades cannot be blamed on international oil company (IOC) profit-making there.

Indeed, no serious observer claims that Ecuador has failed to experience development. Criticism has focused instead on waste and misallocation of the large cash bounty that multinational investment created for Ecuador.

Who Got the Money?

Much of the blame for misallocation rests with the uniformed services, which have received a sizable portion of the country’s petrodollars. Military expenditures averaged 45 percent of the national budget from 1972 through 2000, which has enabled the armed forces to acquire a fleet of oil tankers, an airline, and other commercial enterprises.[1] However, oil wealth also has been spent on social services and subsidies for the public at large.

Despite waste, corruption, and misallocation, gross national income (GNI) per capita improved during this period. So did non-economic indicators of human well-being, including the infant mortality rate (IMR) and life expectancy at birth, thanks to better water supplies and public sanitation, wider access to pharmaceuticals, and, most importantly, improved nutrition.

Conditions in 1967

At the time when oil was discovered in the Oriente, mean GNI in Ecuador ($260) was barely half the Latin American and Caribbean average ($478); only in Haiti’s GNI per capita was appreciably lower. [2] The country’s standing in terms of non-economic measures was a little better. [Read more →]

February 16, 2012   No Comments