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Category — Clean Energy Standard

“Clean Energy Standard”: Time to Revisit Fundamental Assumptions

 [Editor note: This response to the Senate Energy & Natural Resources Committee’s March 21, 2011, "White Paper on a Clean Energy Standard" is by Glenn R. Schleede, citizen, taxpayer and consumer. He is retired after working more than 35 years on energy policy matters in the federal government and the private sector. ]

Thank you for undertaking a de novo review of the matter of a potential “clean energy standard.’ Such a review is far preferable to previous attempts to force such a standard on the people of the United States without adequate consideration of its cost and benefits.

My comments are directed towards fundamental issues that are not addressed directly by the Committee’s six major questions or thirty-three subsidiary questions; i.e., the fundamental issues of:

· Whether assumptions underlying proposals for a “Clean Energy Standard” or similar proposals are valid, and

· Whether actions by governments to select, promote, or mandate particular energy technologies and sources are in the national and public interest.

My more detailed analysis (below) explains that, during the past 35+ years:

· Governments have been unsuccessful in picking winning energy technologies and, instead, have forced spending of billions in tax and energy consumer dollars on technologies that have not proven to be commercially viable and have helped drive up electricity costs.

· Government actions to promote the government-selected technologies have resulted in (a) transferring billions of dollars from taxpayers and energy consumers to developers and owners of high cost energy sources, (b) diverted capital investment towards high cost, low production energy projects, and (c) focused human resources on government-selected, highly subsidized endeavors, diverting human and financial resources from innovative and productive private sector activities.

The president’s proposal for a “Clean Energy Standard” is an arbitrary one, unsupported by adequate consideration of costs, risks, and benefits. Rather than proceed with the design of a “Clean Energy Standard,” the Committee and its staff should undertake or promote thorough reconsideration of the assumptions that underlie such proposals.

Further, the Congress should avoid taking further actions that interfere with and distort energy markets and avoid expanding the role of government or extending costly tax breaks and subsidies for wind and other renewable energy sources that are unlikely to become commercially viable. [Read more →]

April 12, 2011   3 Comments

“Clean Energy Standard:” Bad Solution to a Non-Problem (Lindsey Graham rides again)

Senator Lindsey Graham (R-SC) has found another disguise for lining the pockets of “alternative energy” producers with consumers’ dollars directed there not by rational economic choices but by government mandate.

Once a supporter of cap and trade, Graham now supports a “Clean Energy Standard” that would require utilities to generate increasingly high percentages of electricity from “renewable” sources like wind, solar, and biofuels, from nuclear, and from coal using “carbon capture and sequestration”—catching the carbon dioxide (CO2) emitted when coal burns and forcing it, under pressure, into deep geological formations for long-term storage to keep it out of the atmosphere.

A variation on that theme suggested by Entergy Corp. head Wayne Leonard in the Wall Street Journal suggests that we begin with the seemingly innocuous step of increasing U.S. production and use of natural gas for electricity generation, and continue by converting hundreds of coal-fired plants to natural gas, which has lower CO2 emissions than coal.

With or without Leonard’s variation, the “Clean Energy Standard” is a bad solution to a non-problem.

The Dangerous Non-Problem

While die-hard Chicken Littles continue to insist that “settled” science has proven that carbon dioxide (CO2) emissions from fossil fuel use have caused most global warming since 1850 and will, if not severely curtailed, cause catastrophic warming over the next century, real science has, in the wake of Climategate and the exposure of multiple major errors of fact and procedure in the 2007 U.N. Intergovernmental Panel on Climate Change’s Assessment Report, left that meme behind. [Read more →]

January 10, 2011   7 Comments

“Clean Energy Standards”: The Sky is the (Price) Limit

[Editor note: This post was prepared by Mary Hutzler, Dan Simmons, et al. for the Town Hall blog at the Institute for Energy Research, a free-market 'all-energy-all-the-time' think tank.]

“The federal government is ultimately responsible for the long-term … consistent [energy] policy…. A clean energy portfolio standard is one example of a potential policy that the administration and Congress should discuss.… In this time of fiscal austerity I propose such a standard.”

–Secretary Steven Chu

With each passing day, the odds of Congress passing a Renewable Electricity Standard grow more and more dim. But Energy Secretary Chu, Senator Graham, and others are now promoting a similar mandate under a new name. Their old vinegar/new bottle effort should be exposed and rejected as the wrong path for energy policy.

Instead of a renewable electricity mandate, Chu, Graham, et al. are promoting a “clean energy standard” to “encourage” investments in nuclear energy, coal with carbon capture and sequestration technology, and renewable energy in the electric generating sector. But despite the happy talk about “clean energy standards,” these mandates will increase electricity prices and make our economy less competitive.

The term “clean energy standard” is a complete misnomer. Clean is defined by the specific legislation and not by common sense. For example, Secretary Chu’s definition is that the technology should remove 90 percent of emissions. Second, the schemes do not regulate all energy, but just electricity production. Third, these are mandates and not merely “standards.”

Policymakers Support “Clean” Electricity Mandates on Flawed Premises

It is difficult to understand why people support these mandates. According to E&E News, Sen. Graham supports a “clean” energy standard because of “jobs, jobs, jobs.” E&E states that Graham “predicts new energy mandates can be tailored to help businesses compete with China and not harm them economically.”[i]

But Graham’s argument is not supportable in theory or practice. As explained below, “clean” electricity mandates mandate the use of more expensive types of electricity generation. This artificially increases the cost of electricity, increasing the cost of doing business in America, and forcing energy-price sensitive industries to leave the United States for more welcoming economic environments.

Sen. Graham also claims to support a “clean” energy mandate because of pollution concerns. He stated, “I’m in the camp that all things being equal, that it would be good to clean up the air, carbon being just one pollutant. But I want to do it in a way that creates jobs, not loses jobs.” [ii] Sen. Graham needs to brush up on economics so that he will realize that, on net, mandates reduce jobs and do not create them. Also, while carbon can be a pollutant Sen. Graham isn’t talking about carbon, but carbon dioxide. The problem with lumping carbon dioxide in pollutants that are dirty, or toxic, or otherwise harmful is that carbon dioxide itself is clean. Carbon dioxide levels could be orders of magnitude higher and the air would still be just as clean as it is today. The difference is that higher carbon dioxide concentrations would impact the atmosphere’s greenhouse effect.

It is also difficult to take one of Sen. Ben Cardin’s reasons for considering a “clean energy mandate” seriously. He said, “If a clean energy standard gets us all off of imported oil, that’s good.” Sen. Cardin apparently does not know that petroleum only produces 1 percent of our electricity generation. The overwhelming majority of oil is used as a transportation fuel, not to make electricity. A “clean” energy mandate will not impact imported oil in any material way.

“Clean” Electricity Mandates Increase Electricity Prices

The mandate Secretary Chu is proposing would be 50 percent “clean energy” by 2050, with an interim target of 25 percent by 2025, where clean energy is defined as any generation that can capture 90 percent of emissions. According to Secretary Chu, the clean energy standard would not cost the government money but would instead be a direct cost to consumers and the market.[iii] [Read more →]

December 17, 2010   8 Comments